6/27/23 – No Rent Control on an SFR!

Inflation has hit all of us, and it’s no different, no matter where you are. Some can handle it financially, while others are struggling. I get calls every day from hardworking people, and their rent went up, their insurance went up, etc. I talked with a client yesterday for about 30 minutes, and they make a decent amount of money and have no debt. They have three children and are renting a place where the landlord will move their rent from $3000.00 to $4200.00. She was outraged, but this also opened a door for why they must consider buying NOW! Rent control on Single Family residences owned by individuals only needs to give 60 days’ notice to raise rents to whatever number they want to!

With insurance going up, that is taking a big bite out of the landlord’s profits, and landlords will push back and raise rents! What does this have to do with loans and mortgages? It gets people off the fence.

So take this person who will now have to buy a property for $700,000.00 with 3.5% down. Their payment will be $5375 ish with Taxes and Insurance. The interest write-off is about $41,000.00, so most people will get back about $9800 on their taxes or about $800.00 monthly. They can adjust their dependents monthly and take home the $800.00 extra every month to afford the payment. Yes, it is 5375 -800 = $4575, but they are still paying off the principal of $700.00 per month, and the house will appreciate at 4% plus annually! Take all that, and what is the better deal? Oh, if you refinance next year at 1% lower, your payment will drop by $400.00 per month. A 2% drop will save you over $800.00.

So here’s the plan.

If you have a person in a rental who is paying too little and capable of buying, call the landlord and tell them to raise the rent to market rent because they can! Then the client will call you back and start looking for a house. I know, it’s brilliant! LOL! I have the answer on how to get more listings, too, by causing divorces. Innocent stuff, but lots of late-night text messages to potential clients, like Jake at State Farm? These tactics will work, but you must leave your morals at the door. Yes, I am kidding, but the first two paragraphs are real!

Don’t forget to RSVP to Real Estate Roadmap for this Thursday! I will share more shady tips from Mike at the meeting! LOL!

Interest rates are slightly worse today, but they had a good day yesterday. I am not expecting too much movement to the downside in the upcoming weeks, but I hope I am wrong.

• 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge
• Government Loans (FHA / VA) are in the high 5’s.
• Conventional Loans up to $726,200.00 are in the 6’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the 6’s
• Jumbo loans above $1,089,300 are in the 6’s
• 5/1, 7/1, 10/1 Arms are in the high 6’s.
• Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
• No income qualifier – 20% down with reserves! In the 8’s and 9’s!
• 0 down loans are in the mid to high 6’s – 660 credit score min right now, up to $740,000.00.
• Private Money lenders - hard Money Loans – 35% down!
• No Ratio Loans 30% down
• Debt Service Coverage loans with as little as 25% down
• Bridge Loans - are typically 7.99% with limited fees – But they get you where you need to go!
• 0 down California Dream for all Equity Share – Postponed until 2024!
• 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I am around all week if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!