Real Estate Investors: Buy, Sell or Hold?
Brandi Brand is Director of Sales for Breakwater Mortgage in Virginia
Beach, Va. Brandi and her husband, Scott, also rehab and resell
real estate investments in southeastern Virginia. the next interview
consists of common questions real estate investors have right now,
when mortgage interest rates seem to be on the rise.
Q: What is the overall tenure of the real estate and mortgage industry in
Virginia at the end of 2005 and before the first quarter of 2006?
A: The local market has slowed down in Virginia for the last six months.
Homes stay on the market longer. This means there is more time
involved for real estate investors who want to sell.
Q: Are the housing and mortgage markets headed for a recession?
A: The market remains very strong despite a slight decline in activity. In
Southeast Virginia, home sales fell about 3% in
November 2005, indicating a slight adjustment.
Q: Is it a buyers market now?
A: Currently, the market is stabilizing. When it was a seller’s market,
contracts were signed on houses and properties before anyone had a
opportunity to think the purchase through. Investors now have the
opportunity to quote the repairs and renovations necessary to obtain the
most return off property.
Q: Is it a good time to buy?
A: Yes. The market is tightening and there are great deals for
the real estate investor. You can always find good deals. Year
investor is looking to buy a property below market value, that is
how they make profit Buy a property with aesthetic problems,
rehabilitate and resell is a strategy. Other good deals can be found.
with properties for sale by owner.
Q: What makes the Virginia real estate market different from, say, the
market in the northeast?
A: In general, the Northeast market is more expensive than the
Southeast, with the exception of Florida. Royal Southeast Virginia
real estate is more affordable, so investors come from the northeast to buy
Q: What do mortgage lenders look for when considering lending?
for real estate investors?
A: A mortgage lender is looking for a strong work history and six
times monthly payments on assets left over after paying money owed on
closure. For 100% financing, the applicant may be required to have a
Credit score of 680 or higher. Ideally, lenders would like to see two years of
experience in renting properties if the real estate investor is trying to
buy multiple properties. On average, a property that brings in a
return of at least $200.00 per month (for maintenance and repairs) is
considered a good investment. For new investors, banks will be
inclined to limit the investor to two properties in the first two years.
Q: What are the best real estate markets to invest in?
A: One of the highest real estate investment areas is near the military.
the essential. Southeastern Virginia has a large number of bases. soldiers in his
themselves often prefer to live at the base of hoses. Those with families often choose
to rent in order to have more privacy or a patio.
Q: What are the current trends in mortgage financing for real estate?
A: Before the summer of 2005, many investors chose interest
only 2-, 3-, or 5-year adjustable-rate mortgages (ARMS) or loans that
It requires little initial money. Most investors buy a property with 5
years in mind. Home values will continue to rise, but
investors see 30-year fixed loans as stronger while interest rates
are on the rise. Young investors seem less worried about the rise
mortgage rates. Many experienced investors remember when interest
rates were 13-14%, but investors under the age of thirty have not seen comparable
interest rates throughout your adult life.
Q: What are the refinancing trends for real estate investors?
A: Many investors choose to refinance by going from a short
term mortgage to a long-term loan. Investors with rental properties
locked in rates with 30-year fixed loans. investors who want
rehabilitate and resell the property will be refinanced to obtain cash for
Other real estate investment. In general, the boom in refinancing has