Stocks, bonds, and savings accounts do not create cash flow. Instead your money is tucked away somewhere either increasing or decreasing based on variables that you cannot control.

Another commonality between the Great Depression and our recession is the fall of the real estate market. Impacted by foreclosures and over-development, the real estate market has become flooded with properties being sold for significantly below their appraisal value.

If the Great Depression is the comparison, it is important to note that after the Great Depression real estate steadily appreciated at an accelerated rate. And I believe that is exactly what is going to happen with our current real estate condition. It is already on the mend, and when it fully recovers those who invested are going to be very successful.

Most of our investors don’t want to be bothered with the details of being a landlord, and that is where we step in.  We offer full property management which makes being an investor easy. From getting a tenant, to ensuring the tenant pays their rent, we oversee everything.

Someone once said that cash is king, yes it is, but let me add to that ‘Cash flow is King.’ Don’t let fear or uncertainty keep you from this great opportunity. Investing in real estate and using the properties as rentals creates a steady stream of cash flow. Using our property management team gives you peace of mind. And that cash can be used to stabilize your financial portfolio, invest in more properties, or even take the vacation you have always dreams of.

Give us a call and get the cash flow rolling.

For the most part, seasoned investors usually are the only ones who take on commercial investments, which is why we focus on residential single-family home properties. Yes, we are Realtors, but in the investment process our role is that of a Real Estate Investment Adviser. It is our job to help you make the best decision for your future.

As we begin the investing process with you, we will assess your financial portfolio and that includes both your capital and your personal comfort level.

First, there is capital. Most people have a finite amount of money that they can invest in real estate. You could make a lump-sum or cash purchase, but then your capital is gone. Alternatively, you could choose to leverage your money through loans. Fannie Mae and Freddie Mac allow up to four financed properties per individual and based on the strength of their financial portfolio. So, if you start with them, use up the number of property financing options they allow, what next?

Are there alternatives to Fannie Mae and Freddie Mac?

Absolutely. VA financing and local bank financing are two other ways investors can get funding for investments. As your Real Estate Investment Advisor it is our job to help you use your capital wisely.

Second, we help determine your personal comfort level. Some people want to invest only in high rent, safe locations. These people aren’t worried about the property paying for itself or monthly cash flow, they are considering the future return of that property. On the other hand, there are those who can’t afford to pay an additional mortgage. For these individuals, a property must pay for itself through rents and monthly cash flow.

“Real estate is one of the most popular forms of income

investing because it is tangible.

It doesn’t always work for everyone’s personality or portfolio,

but it may be a good consideration if you are hands on and want some diversification.”

Getty Images, Phil Marden

Real Estate brings four things to your financial portfolio:

(Source: Investopedia)

1. Diversification

Investors have more flexibility and control over real estate investments. This improves the diversity of a traditional portfolio.

2. Hedging Inflation

Investors can increase rent rates with inflation, which helps them hedge inflation that could damage other investments.

3. Risk Reduction

Lease agreements and property management companies help reduce investor risk.

4. Historic Returns

Historically, real estate has out performed stocks and bonds and been more secure during the ebbs and flows of the economy.

Would you like to diversify your financial portfolio?

Give us a call at 901-867-1000 and ask for the Real Estate Investment Adviser.

A diversified future is one call away.

For first-time home buyers, though, all of the loan options can be a bit overwhelming. How do you choose the loan program that works best for you and your economic situation?

So let’s look at some of the options.

1. HomePath Mortgage

If you want to purchase Fannie-Mae owned properties, which are often priced below market value, this is a great option. Fannie Mae offers this financing in order to get qualified buyers into the thousands of empty properties in its possession. In addition, HomePath offers both a traditional mortgage and a renovation mortgage for home buyers.

HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal and no mortgage insurance. Expanded seller contributions to closing costs are allowed. Benefits to You, the Borrower Low down payment and flexible mortgage terms (fixed–rate, adjustable rate, or interest–only). Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer. No lender-requested appraisal. No mortgage insurance; ask your lender for cost details on loans without mortgage insurance. Expanded seller contributions for closing costs allowed. Available for primary residences, second homes and investment properties. Many condo project requirements are waived; ask your lender for details.

HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation – up to 35% of the as completed value, no more than $35,000. Benefits to You, the Borrower Low down payment and flexible mortgage terms (fixed- rate or adjustable-rate). Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer. Renovation amount based on appraisal “as completed” value. No mortgage insurance; ask your lender for cost details on loans without mortgage insurance. Expanded seller contributions for closing costs allowed. Available for primary residences, second homes, and investment properties. Many condo project requirements are waived; ask your lender for details.

(source: HomePath.com)

2. FHA 203k

This loan program allows home buyers to buy a home and improve it with any renovations that are necessary or desired. This loan covers renovations such as new flooring, mold removal, lead-based paint abasement, new appliances, new windows, and deck installation, but it does not include some luxury improvements.

(source: Hud.gov)

3. USDA Rural Development

If you would like to purchase a home, but don’t have money for a down payment, you need 100% financing. If the house falls within the guidelines for “rural” you can purchase the property with 100% financing. It is important to note that “rural” doesn’t mean living in the country. Instead, under these guidelines, many smaller towns and communities are eligible. Arlington, Tennessee, Fayette County, and northeast Shelby county.

Would you like more information about buying a home as a first-time home buyer? Contact us today for more information.

Investing in real estate can be very profitable, but getting started and even procuring the needed financing is often problematic for some. Gone are the days of no-fuss financing, especially for investment properties.

“Investors are more scrutinized than they ever were, and financing is more difficult, but not impossible,” says Ben Spofford, an Ohio real estate investor and president of RealtyRTO.com.

In spite of the new difficulties, you can improve your financing ability with these simple steps.

Strength in Numbers

Check your credit score and work to maintain a score of 740 or higher. Scores lower than 740 will require that you pay a fee to qualify for your desired interest rate. Read more about how your credit score is calculated and how to improve it here.

Size Matters

If you are considering and investment purchase, being prepared to put a sizable down payment on the property is in your best interest. One of the primary reasons for this is that mortgage insurance does not cover investment properties. In most cases 20 percent is required to secure traditional financing.

Specialties Count

Many websites will tell you that traditional banks and mortgage brokers are more accommodating to your financial situation than the big national banks. But there are problems with both for investors:

Traditional Banks

1. Won’t lend to out-of-state investors without significant CD purchase
2. Great for local buyers, but guidelines for investors are strict
3. Rarely specialize in investment purchases

Mortgage Brokers

1. Some sellers won’t accept offers from brokers
2. No control on the underwriting
3. Whole package goes through another source, which could be problematic

Instead of using a traditional bank or a mortgage broker, finding a direct lender who specializes in investment purchases can ease the process and minimize the possibility of problems.

Direct Lenders

1. Approves, underwrites, and finances the loan
2. Many specialize in investment loans
3. Work with out-of-state borrowers

If you would like more information about getting financed or finding a direct lender who specializes in investment purchases, give Chris Peak a call at 901-867-1000.

Read more: 5 tips for financing investment property

Featured Property: Kinston Park from Ryan Tucker on Vimeo.

This is a great investment property with the potential of more than 14% cash on cash ROI.

Check out the full breakdown on our spreadsheet.

Everyone loves a green lawn.

Lush, soft grass not only is pleasing to the eye, but it is calming and relaxing. Getting a green lawn isn’t always an easy task, though. Weeds, lack of rain in the summer, and numerous other challenges threaten your lawn in this region.

What can you do?

1. Jump-start your yard and bring in the green.
2. Use a rake to remove all the thatch (loose grass, weeds, leaves, etc. that have accumulated on your yard). Thatch saps the nutrients that the roots of the grass can get, so removing it is essential to having a green lawn.
3. Mow you yard on the highest setting and bag the remains. While convenient, leaving the dead grass on the yard helps promote weed growth.
4. After you have removed the thatch, mowed and bagged the grass, now would be a good time to fertilize. There are numerous brands available at your local hardware store, just ask for assistance in choosing the one best for your type of grass.

You should hold off on seeding your yard until any risk of freezing has passed – late March is ideal.

One last thing you can do to your yard before April showers bring May flowers is take care of any transplanting that needs to be done.

Many homes have contractor grade bushes and shrubs in the front of the house and homeowners want to change those out to freshen up the landscape. Before you dig them up and throw them away, consider if there is a place for them in your backyard. Transplants should be done while plants are dormant – before spring. First dig a hole where the plant will be moving. Dig up the plant. Gently place it in the hole and firmly pat down dirt around it. Then, water well.

If you don’t have a place for you plants and are planning to throw them out, offer them to a friend or list them for ‘free’ on Craigslist. This is a great way to recycle your landscape.

Remember a beautiful lawn helps sell your home.

Would you like to sell your home this year? Do you want some advice on the market and help listing your home? Want a guarantee?

Contact us to get started.

In addition, if you find a foreclosure with sizable equity built-in, you will profit on the future sale of your home.

Consider that 1 in every 624 homes is a foreclosure. That is a lot of homes, which means there are tons of great deals.

Foreclosures come As-Is

When you consider purchasing a foreclosure, you first must understand that most foreclosures come ‘as-is’. You can bargain with the bank about fixing the roof or repairing the plumbing, because usually the price is already below what they would like to get for the property.

Although sometimes structural damage or combined needs outweigh the value of the home, in most cases all of the renovations will be cosmetic in nature – a new coat of paint, new carpet, etc. is often all that is needed to spruce up a foreclosure.

What do I need to know?

Yes, you could go online and find various foreclosures, contact the listing agent, and go look at the property yourself. If you contact the listing agent, the property is ‘always’ going to be a great deal. After all, it is their property and they want to make a commission. Additionally, they aren’t going to go out of their way to help you evaluate the home for your current needs as well as your future selling needs.

As a buyer, remember, it doesn’t cost you anything to use an agent. They get paid on the sale of a property. So choosing not to use a buyer’s agent can be a costly decision.

If you tell your agent that you want to look at foreclosures, he will likely start by interviewing you about the areas you want to live in, how much work you would be willing to do yourself on renovations, and other information that will help him narrow your searching field. Then, rather than scrolling through hundreds of listings online, your agent will present you with a few options that are best for you. Just imagine all the time you will save on Internet searches and looking at homes. What a time saver!

Financing A Foreclosure

Purchasing a foreclosure means using non-traditional financing such as FHA 301k and 301b to get the money needed to make renovations on the home. Regulations for these loans are often changes, so check with your lender to determine which loan is best for you. Visit HUD.gov to learn more about FHA loans.

Know When to Walk Away

Once your agent starts finding foreclosures in your area, you can expect that he will be looking at a few things:

1. Are there any addition inspections that should be done on the property, such as termite, mold, or radon inspections?
2. How is the flow – functionality of the home? Although it may work for your family today, is it a floor plan that will be compelling when you try to sell in the future.

Remember . . . the average home owner moves once every seven years.

What’s next?

Contact us and let us help you find the foreclosure that is right for you.

4386 Elysian Dr, Memphis, TN 38128

Buy Price $62,900

Great investment home in the Raleigh community.

This home has gone through complete cosmetic overhaul including flooring, paint,service plumbing service the HVAC, blinds, rekey locks, etc to put home in a rent ready condition.
Homes are hand-picked to be on the best streets and neighborhoods for cash buyers.
FINANCING SCENARIO

Buy Price $62,900
20% Down Payment (of purchase price) $12,580
Closing Cost $5,500
Commission Differential $0
Renovation Cost $0
Total Money Out of Pocket $18,080

Loan Amount $50,320
Payment PITI + Prop Management $474
Cash Flow Low End Rent Range $326
Cash Flow High End Rent Range $426
Total Equity in Project $4,100
Cash on Cash ROI (If Already Leased) 19.27%

CASH SCENARIO

Buy Price $62,900
Closing Cost $750
Commission Differential $0
Total Money Out of Pocket $63,650

(Payment) Taxes+Insur+Prop Manage $196
Cash Flow Low End Rent Range $604
Cash Flow High End Rent Range $704
Total Equity in Project $4,100

Cash on Cash ROI (If Already Leased) 10.39%
***Note – ROI takes into account, your payment including taxes, insurance, prop management, $750 yr maintenance.

“About 11 million Americans — roughly 1 in 4 with a mortgage — are underwater,” according to CoreLogic, a real estate data firm.


The Obama administration announced its latest plan to help troubled homeowners, enabling an estimated 3.5 million underwater mortgage holders to refinance at today’s historically-low interest rates.


However, experts speculate the proposal—which is expected to cost up to $10 billion and would be paid for by imposing a fee on major banks—could have a difficult time getting Congressional approval.


This proposal follows a string of government-initiated programs that have had mixed success, including the Making Homes Affordable Program a government program that claimed:

“There are a variety of MHA programs that may help homeowners having difficulty making mortgage payments. . . . Maybe your expenses have increased due to medical bills or you’re picking up the pieces after a separation or divorce. Maybe you’re trying to get by with less because your hours were cut or your business stumbled. In any case, it’s important to be proactive. MHA can help you get real help and real answers right now.”

Obama noted in a recent press conference that the MHA program had “fallen short of expectations.” The difference now is, Obama’s latest plan would assist borrowers with private (non-government backed) loans. Some of Obama’s comments include:

“I am sending Congress a plan that will give every responsible homeowner in America a chance to save about $3,000 a year on their mortgage by refinancing at historically low rates,” he told an audience in Falls Church, Va. “No more red tape. No more runaround from the banks.”

“I want to be clear: this plan, like the other actions we’ve taken, will not help the neighbors down the street who bought a house they couldn’t afford, then walked away and left a foreclosed home behind. It will not help those who bought multiple homes just to speculate and make a quick buck.”

Under the current proposal, to be eligible borrowers (about 11 million whose loans are backed by Fannie Mae and Freddie Mac, and about 3.5 million whose loans are privately held) must:

• Have not missed a mortgage payment in the past six months, and have no more than one late payment in the six months prior;
• Have a credit score of 580 or higher;
• Have a current mortgage balance within loan limits for FHA-insured loans in their communities; and
• The property must be their primary residence

It’s important to remember that this program would require Congressional approval, which may never happen.


Obama closed his proposal with this sobering fact, “No program or policy will solve all the problems in a multitrillion-dollar housing market. The heights the housing bubble reached before it burst were unsustainable. It will take time to fully recover. And it will require everyone to do their part.”

If you are on the edge, if you are facing foreclosure and desperate for help, don’t let the media talk of this proposal distract you from finding a real solution.


Related Articles:

Mortgage Relief Plan Aims at Refinancing – New York Times

Obama’s Mortgage Relief Plan Is Immediately Attacked By The Right-Wing Media – Media Matters

Helping Responsible Homeowners – Obama

Click to View Available Investment Properities

Using data from city-data.com and realtytrac.com, I have created the following tables to make things a little easier for you. (these statistics were based on the data availabe 2/9/2012)

More specific information about various properties can be obtained by requesting a Market Snapshot of that address. Simply sign-up for the Market Snapshot and request information about the address you are interested in.