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Real Estate | Straight Table Talk

Archive for Real Estate

Income producing property in Chester

Income producing property in Chester  

Housing in Chester still offers some good opportunity for investors however; they must recognize that there is a difference between buying investment property, and buying a residential home to occupy. The first difference is a property purchased for your residence is paid for by money you earn from another source, It should also satisfy your needs such as school, Church, bedroom size, transportation and even the view from the kitchen windows should be a consideration. The value of a residential property will best he determined by the market, that is comparing the property you want to buy with similar properties sold in the same community. On the other hand investment properties should be purchased only for the amount of income it will produce: or can be expected to produce, and it should pay for it self from that income. In buying an investment property, the neighborhood school is important

only if it adds to the durability of the income the property will bring in. The fact that the present owner  invested considerable funds in the property, and the property is located in what is thought of, as a good neighborhood, does not mean that this property is a good investment, or that it should command a high sale price. This is a major mistake most often made by small investors. This mistake will cause the investor to have a negative cash flow. This was ok in the late 70’s and early 80’s. When the rich and high-income professionals, use negative income producing property as tax shelters, but for the small investor Real Estate investment with a negative cash flow frequently leads to hardship, and a sale of the property, at a loss of money invested from savings.

No one has ever become successful in the field of Real Estate by buying highly developed and desirable properties, (that is buying properties every one wants) Real Estate is just like all other investments that promise a high rate of return, it must be purchased when the price is low, the greater your risk the greater the income you can expect.

In the purchase of investment properties in Chester, a small investor must forget the concept of market value; that is to say a property can only have one correct marketable value at any one time. In contrast, investors must only be concerned with the value of the property to him. Under this condition, the value takes into account the investment financing, the after tax cash flows, and his desired rate of return on the savings he has invested. Using this concept, the value of the property is called investment value, it maybe less than, or greater than the market value. If an investor is willing to except some risk. Chester has a lot of properties that provide good opportunity, and can be purchased with a small investment.  Another idea is to form a partnership: that will limit your risk, yet give you the chance to test the water.  You must learn the laws coming out of Harrisburg, and Washington, that will pertain to housing, property rights, landlord and tenant, Crime, and the welfare system.

Chester in the next ten years will become a working class, bed room neighborhoods city; with the aid of government grants, and fair community lending policies by the banking institutions, the low income working citizens of the city will be able to purchase a home, or pay marketable rents for a decent place to live. Small investors will provide these places on average. All other businesses will increase and flourish because of the working class people that will be readily available for work in Chester. Chester will grow like wild flowers, when the city government recognizes that, Chester’s future lies in its abundance of affordable housing. They will then develop a more favorable environment for the small investor. By the development of this favorable environment, a lot more decent units of housing will be added to the market with little, or no aid from the redevelopment authority, and at no cost to the city tax payer. Then you will  see Chester grow.

FHA Revokes Controversial Credit Dispute Rule

FHA Revokes Controversial Credit Dispute Rule


The Federal Housing Administration has decided to rescind a rule that would have made it tougher for borrowers with credit disputes on their records to qualify for an FHA-backed mortgage. The rule had been widely criticized by the lending and real estate industry as shutting out too many potential borrowers from qualifying for a mortgage.

The new rule originally took effect April 1 but then was postponed a week later until July 1 as the FHA further reviewed the policy change.

The guideline would have required borrowers who wanted to qualify for an FHA-insured mortgage to pay off any credit dispute in their history of more than $1,000 or set up a documented payment plan on any unpaid collection accounts.

“FHA killing off the rule is not a surprise when you take into account the resounding objection from the housing finance community and their concern that this would overly constrain credit,” Edward Mills, senior vice president at FBR Capital Markets, told Housing Wire. “This action shows how it can be incredibly difficult to make choices that move towards protecting the insurance fund over keeping mortgage credit available.”

The FHA rule was expected to have the greatest impact on young, first-time borrowers. John Burns Real Estate Consulting found in a recent survey that about a quarter of builders said that the rule had the potential of delaying or losing up to 60 percent of their sales.

“The ripple effects of the FHA credit dispute rule would have had a notable impact on the housing market,” Lisa Marquis Jackson, vice president of John Burns Real Estate Consulting, told Housing Wire.


If you are a senior citizen holding the mortgage

If you are a senior citizen holding the mortgage on the sale of your family home: and your mortgagor inform you that the home is now under water (the home value is lower than the mortgage) and they plan to walk away from the mortgage:  given the fact that you bought and is paying for the senior citizen homes you now live in with the mortgage you are receiving from the sale of your family home. In this situation don’t you think the Government should provide help to a senior citizen holding a mortgage that is underwater? Just Like they do the big banks.


What to Do If You’re Facing Eviction

While it’s never nice to be presented with an eviction notice, there are ways to deal with it gracefully. Even though eviction laws vary from state to state, and every situation is different, there are some things you can do if you find an eviction notice taped to your door.

1. Don’t ignore the notice. Whether the notice is considered a legit, court-ordered notice posted by the sheriff or an “empty threat” note posted by an angry landlord, you MUST respond.

2. Respond with common courtesy. If you feel that the eviction is unfair, then the beauty of this country is that you can have your say in the matter in front of a judge. However, if you really are behind on your payments and/or have broken some sort of agreement to pay (i.e., a lease or mortgage agreement), then you will likely need to have a really good reason for non-payment. But you can’t go screaming, yelling or cussing at the landlord or the judge. Be professional, you’ll get farther with both and maybe find some leniency that is fair. Just be sure that you have your ducks in a row and have documented everything.


3. Initiate a conversation with the landlord and propose some sort of payment arrangement. Maybe you can’t make the entire  payment, but you can make it in pieces. Chances are your landlord doesn’t want another vacancy, so maybe they would be willing to make arrangements in which you would pay half at the beginning of each month and the balance in the middle of the month for a short term. If possible, show good faith by offering to pay a little more to the landlord (call it capped late fees) for their efforts.

4. Follow through. Whether you make payment arrangements or some other sort of agreement, you must follow through. If you can’t keep the arrangement that are agreed to, then ask the landlord if they have another rental that is less expensive for you to move into that will meet your budget.

5. Accept that truth is truth. Maybe there is no way of working something out and you must really vacate your home before the landlord and sheriff physically move you and your stuff to the curb. There is nothing wrong with downsizing until you get back on your feet. Your landlord knows that sometimes people fall on hard times and chances are they are not completely heartless, especially if they see that you are trying. Therefore, be cooperative and when you are back on your feet, you may still be able to use the landlord as a future reference.

By Jessica Hickok



Now is the time to invest in single-family homes:

Now is the time to invest in single-family homes: mortgage interest rates are low, and single family homes are being valued by appraisers at an all time low. Home value is based solely on the number of able buyers looking to make a purchase. This situation is compounded by the lack of jobs and a poor economy. To an investor, however, this is the opportunity of a life time. In the market today, you can find well-built homes in good locations, excellent condition, and priced well below their value.  If you are in a position to borrow, borrow all you can. If not, form partnerships with other like-minded people to invest. Make sure you: 1) look for homes in desirable locations, 2) buy below appraised value, 3) do only minimal repairs, and 4) hold as rental property while waiting for the market value to appreciate. Good Luck




Survey: Down payment an obstacle to homeownership for most

By Inman News  Date: Tuesday, September 20, 2011

More than half of renters who wish to buy a home say the biggest imediment is saving enough for a down payment, according to the latest American Dream survey from real estate search and marketing site Trulia released today.

Market research firm Harris Interactive conducted the biannual online survey for the company between Aug. 30, 2011, and Sept. 1, 2011. The survey included 1,392 homeowners and 758 renters.The majority, 70 percent, of respondents said owning a home is part of their American dream, unchanged from the last survey in January. This attitude toward homeownership rose with age, from 65 percent of 18- to 34-year-olds to 76 percent of those 55 and older.

Among current homeowners, 80 percent said they plan to buy another home in the future and 57 percent said owning a home is among the best long-term investments they could make, Trulia said.

Among renters, 59 percent said they aspired to own a home, but of those, 51 percent said saving enough for a down payment was their biggest obstacle to homeownership at this time.

Those in the 18-to-34 age group were most likely to cite this as their biggest concern (62 percent). Other obstacles cited by respondents include qualifying for a mortgage (36 percent), having a poor credit history (34 percent), inability to pay off existing debt (31 percent), not having a stable job (29 percent), and declining home values (13 percent).

“From saving enough for a down payment to qualifying for a mortgage and having a poor credit history, today’s aspiring homeowners face many financial obstacles in order achieve their American dream of homeownership,” said Jed Kolko, Trulia’s new chief economist, in a statement.

“These obstacles keep some would-be homeowners from taking advantage of low mortgage rates; on the other hand, they prevent some people from buying homes they can’t really afford,” he said.

“Government homeownership policies can target some of these obstacles to homeownership, but only stronger economic recovery will help households facing multiple obstacles become better able to buy homes.”

The survey also found that, among those who said homeownership is part of their American dream, ideal home size has trended smaller over the past year. At this time in 2010, 9 percent said their ideal home size was more than 3,200 square feet compared with 6 percent now. A range of 1,401 to 2,000 square feet was ideal for 32 percent in this survey, compared with 28 percent a year ago.

American’s Ideal Home Size




Y-O-Y % Change

More than 3,200 sq. ft.




 2,601 – 3,200 sq ft.




2,001 – 2,600 sq ft.




1,401 – 2,000 sq ft.




800 – 1,400 sq ft.




Not sure




Source: Trulia

Both the youngest (18-34) and oldest (55 and older) age groups surveyed expressed preferences that indicate they’d prefer to live in urban centers: shorter commutes to work for the former and proximity to restaurants and shops for the latter.

“Long-term housing demand will recover, even though today’s prices tell a different story,”source said “But the homes that people will want in the future will look different than today’s housing stock. Retiring baby boomers won’t  want big suburban houses: They care more about easy access to restaurants and retail and will be willing to trade down. High gas prices — which make long-distance commuting more expensive — will accelerate this trend, as would changes to the mortgage interest deduction that reduce demand for expensive homes.”

Contact Inman News:

Mortgage Interest Deduction Vital to Housing Market

Mortgage Interest Deduction Vital to Housing Market

The home mortgage interest deduction saves the average home owner thousands of dollars at tax time, supports home values at the community level, and helps American home buyers get into their first house. Supporting the mortgage interest deduction means helping families afford homes.

Having a tax deduction for mortgage interest makes owning a home more affordable because the deduction lowers the amount of tax you pay. U.S. Census data shows 37% of homeowners with mortgages spend more than 30% of their income for housing. Paying less for housing means having more disposable income for savings and other household expenses. Increasing housing affordability increases the number of renters who can afford to buy a home of their own responsibly; increasing the number of home buyers helps keep home prices stable for those who already own homes by ensuring a steady stream of new buyers.

How the deduction works In general, any home owners who pay U.S. taxes and who itemize their taxes can deduct mortgage interest attributable to primary residence and interest paid on home equity debt of as much as $100,000.

Extraction from    Dona DeZube of  (houselogic)

Get your property ready for winter

Now is the time to get your property ready for winter.

Preparing your home for the snow and cold temperatures of winter.
Here are a few things you should do before old man winter check in. Remove all debris from the roof surface and inspect the roof for cracks.  Seal up any place where water may get in, clean out all gutters and down drain to prevent clogging and freezing during the winter cold. 
The heating furnace should be check, cleaned and the filter changed. You should inspect all windows and doors for heat loss, where there is a possibility that there maybe heat loss, the use of plastic window covering and door installation will inexpensive solve this problem.
If you haven’t changed the battery in the smoke detector now is the time.

Three Signals to Invest in Rental Properties

  Three Signals to Invest in Rental Properties

 Beginning real estate investors often overlook the potential investment        return that can be generated from rental properties. In search of a big pay  off  quick, the fundamentals of investment are forgotten. In cities like  Chester,  PA, an investor can generate significant income from rental    properties.  Chester, the largest community in Delaware County, has an    abundance of  low-priced houses and is in close proximity to public  transportation within  the county and to neighboring Philadelphia and  Wilmington, Delaware.

 As with any investment option, your return on your investment will vary with  the degree of risk you are willing to take. Here are a few tips to evaluate whether a particular area has the potential for an inventory of good income-generating properties.

  1. There is an oversupply of active listings for sale. In Chester, you will find an abundance of homes sitting on the market. The reason that these homes linger on the market is the lack of qualified buyers who have the means to buy these properties. As these houses sit on the market, investors realize little or no appreciation in value. In some cases, a depreciation in value may occur. With some exceptions, we do not recommend investing in single-family home for resale or appreciation in this kind of market.
  2. Demand for rental properties is high. With the aid of city government programs, cities like Chester have more people looking for rental units than are available for leasing. The demand and the number of units available in the neighborhood also gives an indication of the probability of collecting rent.
  3. You must properly assess the risk of the individual investment property. Even when the overall economics looks good, the range of risk could still vary. The assistance of a knowledgeable real estate agent who has experience with rental properties in the market can greatly reduce your capital outlay. The key factors that will influence the value of your rental properties are: 1) The quality of the neighborhood, and (2) the durability of the property (an older house may require more maintenance than a newer one).

After you consider these three factors, you can make an informed decision about the risk-reward trade-off that you will face. If you make an investment in Chester city property, your risk may be high but so is the expectation for a high return on your investment.  As always, there is the time to buy. And, that time is now.

July Market Update: Sold Listings Spike in 10 of 13 Counties

Sales activity for Residential properties in TREND’s MLS Coverage Area increased 18.7% in July 2011 compared to a year ago, according to stats generated by MLS Blue. 10 counties reported an increase in sales activity, with the highest increase near 40%.

As previously stated, all but 3 counties in TREND’s primary coverage area reported an increase in sales, with New Castle (39%), Gloucester (31%) and Montgomery (28%) reporting the biggest gains in July 2011 compared to July 2010. Delaware (27%), Chester (22%) and Burlington (22%) also reported very strong numbers.