Tuesday, January 30, 2018

Florida Home For Sale * $179,900 * 3 Bedroom / 2 Bath / Cape Coral, FL

This is a perfect home for an Investor or 1st time home buyer. This is a 3 bedroom, 2 bath home with a 2 car garage in a really quiet area across from waterfront homes. The property has new paint inside and out, newer fixtures, upgraded well equipment in 2007, added impact glass windows all throughout the home in 2007 (save on your electric bill and very, very quiet during storms!), the roof was redone in 2004 and new plumbing in Feb 2017. Tile floors in main areas with laminate wood floor in the bedrooms, breakfast bar & all appliances. The previous owner was a HVAC contractor, so although the AC is older, it has been very well maintained. Schedule your showing today.  

General InformationML# 218006891
List Price:$179,900
MLS#:218006891Status:Active (01/22/18)
Address:2121 NW 9TH AVE
CAPE CORAL, FL 33993
GEO Area:CC41 - Cape Coral Unit 37-43,48,49
County:LeeProperty Class:Residential
Status Type:Resale PropertySubdivision:CAPE CORAL
List Price/Sqft:$161.20Development:CAPE CORAL
Property ID:34-43-23-C2-02983.0030DOM:7
Furnished:NegotiableCDOM:7
Approx. Living Area:1116 - Property Appraiser OfficeBedrooms:3 Bed
Approx. Total Area:1560 - Property Appraiser OfficeBaths:2 (2 0)
Building Design:Single FamilyYear Built:1991
Virtual Tour URL:
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ting Broker:
Florida Complete Realty


Terence Trombetti
Professional Florida 
Realtor®
Florida Complete Realty
Mobile|Text (239) 560-1574









Friday, January 26, 2018

Did You Know?

New homes represent less than one-fifth of the housing market, but have a major impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

source -National Association of Home Builders

Wednesday, January 17, 2018

Using Your Home's "Dead" Equity

Using Your Home's "Dead" Equity
Question. Our house is free and clear. We have a $100,000 home equity line of credit, and the interest rate is somewhere in the neighborhood of 7 percent. We itemize tax deductions and are in a high federal tax rate, and hoping that any new tax laws will reduce our taxes.
My question concerns using the home equity loan for investment. We are considering using $50,000 of the home equity line of credit and investing it in a growth stock for the next five years. Our accountant/tax advisor, however, is strongly in favor of having an unencumbered house especially as we are close to retirement.
Answer. It is my strong belief that homeowners -- of any age -- should make use of the equity they have gained from their real estate investments. As this column has suggested in the past, there are too many retired persons who are "house rich and cash poor." Hopefully, your house will appreciate in the future, and this appreciation will continue whether you have equity or not in the home. Thus, for all practical purposes, that equity is "dead equity."
There are, however, a number of parts to your question.
First, should you use the equity in your home for investment purposes? My answer is a qualified yes. Are you prepared to lose your investment if the stock market tumbles? Growth stocks may grow -- or they may not. If you are in any way concerned about risk, you should consider investing in government insured programs or tax free bonds. Of course, the higher rate of potential return will also carry a higher risk.
I am sure that readers will ask: why borrow money at 4 or 5 percent only to invest it in a security which has a 2 or 3 percent rate of return? Here, you have to do the numbers, and also look to your own future situation.
At first blush, it makes no sense to pay more interest than you are receiving from your investment -- especially if that investment has no (or little) growth capacity. But there is one important factor that must be considered, namely the liquidity of your investments. If you find at a later date that you need money for emergency purposes, if may be difficult -- if not impossible -- to tap into the equity of your home when you are retired and no longer employed. The investments you are considering -- whether stocks, mutual funds, or government securities -- do have immediate liquidity.
Second. If you decide to invest the equity in your home, what is the best route to take? You have indicated that your current home equity line of credit is around 7 percent. This seems rather high in today's market.
More importantly, most home equity loans fluctuate in rate; the rate of interest is pegged to some index -- such as "prime." If the prime rate rises or falls, so will the interest rate on your home equity loan.
Instead of using your home equity, you may want to consider refinancing your home, while interest rates are relatively low and stable. You can probably get a fixed 30 year rate for around 4 percent. While I understand you may be reluctant to borrow for such a long time -- especially when faced with retirement -- the alternative is to keep the equity in your home.
How will you make the monthly mortgage payments when you are retired? If you do not have other sources of income -- such as a pension plan -- you still have the liquidity of your investments that should be able to carry you for a long period of time.
Additionally, if you decide to refinance your home, although the refinance funds will pay off your home equity loan, nevertheless, you definitely should keep the home equity loan available. As you know, a home equity loan is a line of credit; you only pay interest on the amount of the money you have actually borrowed. If you obtain a refinance mortgage, make sure that you can also keep the existing (or obtain a new) home equity loan. There are some logistical legal issues that your attorney can handle to make these arrangements.
Third. You must understand the tax implications of borrowing on your home equity. Interest deductions for tax purposes are based, in part, on what the IRS calls "acquisition indebtedness." In your case, this indebtedness is zero, since your house is free and clear. You will only be entitled to deduct interest on the first $100,000 that you borrow -- whether this money comes from a new first mortgage or a home equity loan. And this may all change if Congress enacts a new tax code.
These are difficult -- and clearly personal -- decisions that everyone must consider. Talk to your tax advisors, and "crunch the numbers."

Saturday, January 13, 2018

6 VITAL REAL ESTATE CYCLE INDICATORS (order of importance)

1. Sales of Existing Homes: Are sales increasing or decreasing? This is the strongest single indicator. Sales have dropped off from peak numbers a few years ago, because there are far fewer foreclosures/short sales, less investor purchases, and slightly higher interest rates. Recent sales are at a balanced level, which should keep our market healthy, and hopefully prevent unrealistic price increases of 25% or more per year, such as we experienced in 2004 - 2006

2. New Construction Permits: Increasing or decreasing? Permits start to drop before a recession, and increase prior to an expansion. Permits for new construction in SW Florida (especially Cape Coral) are steadily increasing, and by a significant number in 2015 and 2016.

Cape Coral had 937 new home permits in 2015, a 58% increase from 2014, and a big leap from the bottom of our market when we averaged only 200 permits a year. Based on U.S. Census Bureau reports, Cape Coral alone needs about 3,000 permits a year for the next decade to keep pace with expected demand of new residents. Construction on freshwater canal lots and off-water lots started to increase last year, as existing home prices rose for the fifth straight year. Because the cost difference of new homes versus existing homes has shrunk to 15 – 20% (from 40% - 50% during the Recession), more homeowners are now opting to build. Builders and investors are taking advantage of the low inventory and building spec homes, which oftentimes sell before completion.

3. Supply of Home Inventory: 6 months’ supply is a level playing field. Under 5 1/2 months is a seller's market and prices will rise. Over 6 1/2 months of inventory is a buyer's market and prices will decline proportionally to the number of months' supply of homes. In 2015, we averaged 4 1/2 month's supply of homes in Cape Coral/SWFL, and at one point dropping to as low as 3 month's supply. We will keep a watchful eye on this important indicator over the next year and report accordingly. If we have too many months of 3 - 4 months of inventory I'm concerned that home prices will spike well over 10% per year.

4. Mortgage Default & Foreclosures: Two things to look for - are the default/foreclosure numbers traditionally high or low, and more importantly, is the number increasing or decreasing? Defaults and foreclosures have decreased dramatically over the past three years, and there are not many homeowners in SWFL who are still “underwater”.  Although we will not see many new foreclosures, banks still have an decreased inventory of existing foreclosures that they will gradually release over the next year or two. Banks have noticed the dramatic increase in home prices, and are in no rush to sell off their foreclosure inventory in this rapidly rising market. I feel that a slow stream of foreclosures will somewhat help keep a healthy balance of inventory, which will prevent local property prices from rising even faster than they have for the past five years.

5. Days On Market (DOM): This stat provides a big clue as to what the market is doing. 90 days on the market is neutral. Over 120 days means it’s a down or declining market, and you can expect prices to drop. Under 70 DOM means it is a very strong seller's market and prices will rise, and will likely rise significantly. Over most of 2015, SWFL homes averaged 65 - 70 DOM. This is down significantly from the bottom or our market when homes were on the market for 130 -150 days, with many homes lingering on the market for over a year. Near the next peak we'll drop below 50 DOM, and that is not necessarily a healthy place for our market. I'm quite content with 65 -70 DOM.

6. Interest Rates: Again, there are two aspects of this indicator to monitor. Are interest rates relatively high or low, and are rates rising or dropping? Interest rates, which are in the 4% range, have risen about 1/2% from historical lows.  Rates are predicted to rise to 4.5 – 5.0% over the next 12 months, but this is still well below historical interest rates. Any negative aspect of interest rate increases should be offset by the lending industry’s gradual loosening of borrowing requirements, which were quite stringent following the housing bust. Also, many borrowers are now “out of the penalty box”, meaning they now qualify for loans again after going through a foreclosure or short sale several years ago.

These 6 Vital Indicators Have Preceded Every Boom Or Bust - DON’T IGNORE THEM!

The 6 Vital Indicators was gleaned from one of the best books I have ever read on real estate investing: Timing The Real Estate Market. Below are invaluable quotes and advice from this book, with my own notes in blue.

 A Few More Real Estate Market Indicators:

Listing Price Versus Sales Price: An average differential is 5%. If the gap falls below 4% we are in a seller's market and prices will increase. If the spread goes over 6%, it's indicative of a strong buyer’s market, and prices will keep falling. There is currently a 3% Sales vs Listing price gap in SWFL, indicating a seller's advantage. Well-priced homes are selling at over asking price, and overpriced homes are selling at 5 - 10% off asking price. Lower priced homes sell the fastest and the closest to asking price.

Unemployment, Consumer Confidence, Population Trends and Changes In Tax Laws are other secondary indicators that you should monitor. However, the Six Vital Indicators will be your road map to real estate timing and investing.

 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Trust What You See (especially the 6 Vital Indicators), not what you feel. Be particularly wary of what the media reports. The media is usually far behind the curve on real estate cycles.
Don’t follow the herd mentality. The herd is almost always late and wrong regarding real estate cycles. I keep my customers informed so they stay ahead of the herd.
Location, Location, Location is no defense or consolation against financial loss when you buy or sell in a great location at the wrong time. Please burn this sentence into the financial part of your brain.
Knowing when to sell is probably even more important than knowing when to buy. Nobody rings a bell when the market peaks or hits bottom. Buying near the cycle bottom can make you rich, and buying near the market peak can make you poor. It's as simple as that.

By observing the Six Vital Indicators, you have a three to six-month window to sell near the peak or buy near the bottom. Market Trends last three to five years, both on the upside and downside. The longer a down cycle lasts dictates how long the up cycle will last (usually 1 1/2 to 2 times longer). Because the down-cycle was so long (over 4 years), historical trends suggest we should have an up-cycle of 7 to 8 years, and we are currently at 6 years. I feel we are only a little more than half way in our current real estate cycle.
Over 90% of real estate buyers and sellers do not have an established guideline as to when to buy or sell. They simply conduct their real estate activities based on "gut instinct" or worse, they “follow the herd”. Following proven historical guidelines is far more likely to lead to successful investing than following gut feelings.
Like the weather, real estate markets should be looked at locally, not nationally. Southwest Florida historically precedes the rest of the country in the real estate cycle by about two years.
At the bottom of every cycle people have always predicted that “we will never again in our lifetime see the price levels of the previous peak”. When the following peaks arrived, prices always surpassed the previous peak prices, often by huge margins. Tom: if we don't reach our previous peak (January 2006 for SWFL), it will be the first time in recorded history.
Savvy Investors sell when the market is hot, and buy when it's not.
The media and the general public feed off each other at market cycle extremes. It's almost as if the media provides the "Herd" their oats and hay.
There are no bad pieces of real estate, only good pieces that are owned at a bad time.
Once a real estate cycle has reversed a trend, it will continue in that direction until it hits the other end of the cycle. It doesn't zigzag like the stock market.
Real estate is like horseshoes...you can score with near misses. You don't need to be perfect in your timing. Just be close to the top or bottom of the cycle.
The greatest profits are achieved in the last year or two of the market up-cycle. The majority of losses occur in the last few years of a down-cycle.
Because real estate is not a liquid asset, you would rather be out of the market wanting in, than in the market wanting out.
The biggest secret in real estate isn't what or when to buy. The greatest secret is knowing when to sell.
Rising real estate markets are what make you rich. Avoiding bad markets is what keeps you rich.
The 6 Vital Signals are the language of the real estate market. When they talk, LISTEN.
Just as a great baseball hitter only swings at good pitches, a good investor should only be investing in a good cycle trend.
During rising markets, even poorly located properties go up in value. During falling markets even prime location properties go down in value.
90% of millionaires acquired their wealth through real estate, not through their jobs or other forms of investing. And they certainly didn't "Buy High and Sell Low", or follow the herd. They were very astute at market timing.

Monday, January 8, 2018

Pre-Listing Home Inspection: Key Driver For Home Sellers

Pre-Listing Home Inspection: Key Driver For Home Sellers
Pre-listing home inspections are an important component in the real estate transaction, but are often overlooked by home-sellers.
If done properly, the pre-listing home inspection allows sellers to gain a clear understanding of the status of their property. They can then fix any issues before putting the home on the market, or properly set the asking price.
Real estate professionals often suggest sellers do a pre-listing home inspection to aid in the efficiency of the transaction process and reduce surprises that may arise from the inspection. Below are some key benefits:
Uncover Any Issues
A pre-listing home inspection will provide sellers a clear understanding of any issues there are in the home. The inspector will provide the seller a list of issues they can both address and fix prior to placing the home on the market or lay out the issues to potential buyers up front. This will result in saving the seller both time and money.
Save Money
Pre-listing home inspections generally cost the same as a standard home-inspection. The inspection can provide immense value. Instead of having only a few days to fix problems after a buyer's home inspection, the pre-listing inspection will alert the seller of issues before the home is put on the market. This provides the sellers plenty of time to compare costs of repairs and negotiate prices without having a time constraint.
By providing full disclosure upfront, along with any repairs that were made, buyers will have acknowledged the existing condition of the home. This reduces the risk of buyers from coming back to the seller and asking for more money off the sale price.
Boost Marketability
Transparency is a key driver in the home-selling process. Having a pre-listing home inspection aids in disclosure to the potential buyers and will earn the sellers a higher level of trust. Having the information readily available will make the home more attractive to buyers and benefit the sellers by getting their home sold quickly.
Remember, the goal of a home inspection is to provide a true reflection of any issues concerning the home and offer guidance in solving the issues. Leveraging the knowledge and experience of professionals like WIN Home Inspectionensures important issues aren't missed, reports are received in a timely fashion and sellers are enabled to move the home efficiently through the real estate transaction.

Friday, January 5, 2018

Does It Makes Sense To Buy A New House Before Selling The Old One?

Does It Makes Sense To Buy A New House Before Selling The Old One?
You're interested in moving. You need to sell your old house first before buying a new one, right? After all, you don't have enough of a down payment for the new house without selling the old one, and you are pretty certain your bank will not qualify you for two mortgages.
You are in a dilemma; houses in your area are currently receiving multiple offers. Inventory is low. Sure, you can sell your house under the same circumstances, but will you be able to identify a new house so that you can simultaneously move from the old house to the new one? Unlikely. Do you sell the current house, move to a rental [or hotel) while you identify and try and close on the new house? Is the extra hassle of moving twice and the added stress of the inability to simultaneously close on the sale and purchase the new worth it? IF you could purchase a new house while still living in the old house, is it worth the added costs involved with having a second mortgage until you sell the old house? How much is "peace of mind" worth in not having the pressure of having to purchase a new house (because you sold the old house too soon)?
These questions are a reality in today's world in many parts of the country, specifically, the San Francisco Bay Area, because of the real estate rebound after the Great Recession. According to Jeff Stricker, a real estate professional with Alain Pinel Realtors specializing in the Silicon Valley in California, his clients are faced with these exact situations much of the time, as property is swooped up almost as soon as it hits the market, and, many times, with multiple, over asking prices. Jeff states that, although it is great for his clients as sellers, those same clients face challenging hurdles when buying a replacement property; competing against other buyers, some with cash only offers, who are willing to bid up a property far beyond the asking price in many circumstances. Some buyers are just so frustrated with the process of competing and getting outbid that they act in ways that they normally would never have thought. Overbidding. Settling for a house that they may not have originally envisioned. The list goes on.
Jeff, however, decided to think outside the box. What would happen if another house was purchased (without the added pressure of "living out of a suitcase", if you will) prior to the sale of the old house? Is it even possible with the banking regulations that were placed upon financial institutions as well as homeowners over the past decade due to the "mortgage meltdown" that happened in 2008 and on? Dodd Frank rules that placed inordinate restrictions on the ability of homeowners to obtain financing left many people unable to get loans in which they previously were easily able to qualify.
Jeff decided to come up with a spreadsheet wherein, if he plugged in some assumptions, he could figure out if it would make economic sense to acquire a new house before selling an old house. The other part of the equation was to find a lender who would allow for a homeowner to purchase a new home without first selling the old home; thus, carrying two mortgages at the same time. Since most conventional lenders would not touch this, Jeff had to look to alternative sources. He found a company called Pacific Private Money, in Novato, CA that specializes in such a product.
Pacific Private Money can lend enough to the borrower to purchase the new home if there is enough equity in the old home to justify a combined Loan to Value (LTV) of 70% or less. Sometimes, if there is not enough equity in the old home, the borrower needs to add cash to bring the LTV to 70%, but, the ability to purchase a new home without having to sell the old one first can solve many issues for the homeowner. First, the new home can be identified without adding pressure since the homeowner is still living in the old house until the new house closes escrow. Second, the stress of moving twice is eliminated. Third, and probably the best (and possibly most surprising) is that this solution may actually cost LESS in terms of increasing net equity to the household than selling the old house and buying a new house with the proceeds from the old house (and new mortgage) in most circumstances wherein the new house is more expensive house than the old house.
In a rising market, the earlier the purchase of the more expensive new house and the delay of the sale of the old will increase the net equity to the homeowner more than the costs associated with carrying two mortgages.
For example, let's assume the old house is worth $1,000,000 and there is currently a 1st mortgage of $200,000. The homeowner desires to purchase a new home for $1,400,000 and has $100,000 in the bank that can be used for a down payment. We will look at two scenarios; the first is where the homeowner sells the current house, rents for a period of time, and then purchases a new home. The second scenario is where the homeowner borrows the money in order to secure the new home while owning the old home.
Obviously, there are many moving targets with both scenarios, such as how much it will cost to rent a place (in the event of selling the old house first) as well as how long it takes to identify and close on the new house, storage costs for belongings, the cost of obtaining a private loan, and the appreciation assumptions for both houses, just to name a few.
Here is a calculation making the following assumptions; it takes nine months to close on a new house after selling the old house; houses in the area (both old and new houses) are appreciating at 1% per month; interest earned on bank deposits are at 1% per annum; storage costs are $1,000 per month, a conventional bank loan is not available because the homeowner does not qualify and has to use a private loan company; the costs for the private loan are 9% plus 2 points; the interest rate on the old house is 3% per annum. Click Here to see 1% per month appreciation.
As you can see, in a rising market, where the new house is worth more than the old house, there is a significant benefit to using a private loan to purchase the new home and sell the old home at a later date. Waiting 9 months to eventually acquire the new house has tremendous opportunity costs, as compared to a net benefit of purchasing the new house right away and eventually selling the old house.
Although assuming a 1% per month appreciation of real estate may seem aggressive, the San Francisco Bay Area, and specifically the Silicon Valley, has experienced such growth. However, even if we lower the appreciation to .5% per month (Click Here to see .5% per month appreciation), we still see a fairly significant benefit to purchasing the new house now rather than waiting to first sell the old house and then buy the new house.
Aside from the economic benefit, other factors need to be considered; the lack of stress of moving twice should the homeowner decide to sell the old house first and then purchase the new house; what if the homeowner finds the house of his/her dreams now and does not want to let the house slip away? In today's market, sellers are not willing to take contingent offers. Can the homeowner budget for both houses at the same time while waiting for the old house to sell? Is the market rising? Is the new house more expensive than the old house? How long will it take to sell the old house? These are just some of the issues to consider before deciding one way or the other; however, and this can't be stressed enough -- when a homeowner finds a house they like, they do not want to lose the opportunity of buying it. This means that they can start looking at new houses before putting their old house on the market. This also allows them time to make any repairs or fix up their old house so as to maximize its value prior to putting it on the market.
Once homeowners know that there is a potential to purchase a new house before selling their old house, they can be proactive in obtaining a commitment letter from the lender. Of course, homeowners should see if they qualify for a conventional loan for buying the new house (owning two houses at once), but they should keep their minds open to procuring a private loan should the bank turn them down. Pacific Private Money is such a private loan company.

10 Reasons To Buy Investment Properties In Cape Coral, FL

Should you buy investment properties in Cape Coral, FL? We’ll focus on practical reasons you’d want to invest in the Cape Coral real estate...