The Two Utah Real Estate Investor Types

Fix-and-Flip or Buy-and-Hold: Which Are You?

With the Fed having announced its intention to hold interest rates near 0% until at least mid-2015, even very cautious investors are recognizing that this provides a rare opening. If ever there were a time to start a real estate portfolio, it’s hard to imagine a better one.

For many, the first question is whether there is still an opportunity to buy foreclosed homes in Salt Lake City and Beyond... That answer is yes, for sure – but that is not always the only strategy that will get you to your goal. 

It all depends on you.

Before we can develop your strategy, you first need to decide which type of real estate investor you wish to be:   

The Fix-and-Flip Investor  - This type of investor is handy (or has a lot of contacts who are), and is familiar with remodels and improvement projects. Usually, at least part of the goal is to create an income stream from the investments.  This investor buys a property at the lowest price possible, improves it, and sells at a profit as quickly as possible.  This investor may have one or more projects going at a time -- with or without loans on the properties. This is the more hands-on type of investor.

The Buy-and-Hold Investor – This investor need not have a high degree of familiarity with real estate (as long as he or she has a source for accurate market advice), and plans to use the real estate portfolio for its long-term wealth-building potential.  This investor may or may not buy foreclosed homes – the goal is to buy property at a price that, when rented, will generate cash flow that makes financial sense. This investor often takes loans on properties. This can be the least-involved kind of investor after purchase – especially if a property management company handles the day-to-day details.  

Whether you are looking to buy foreclosed homes in Salt Lake City and Beyond, or to capitalize on one of the bargains now available in the traditional market, cool-headed, informed decision-making is at the core. If you are also looking for an agent to be by your side supplying up-to-the-minute market data, give me a call.  We can talk about your goals, and come up with a buying plan that matches your investing style.

First-Time Buyers: Line Up Those Ducks!

Unexpected Bargains Test Utah First-Time Buyers

It can happen when you least expect it: an opportunity unexpectedly opens up – and you suddenly realize that the time to become a homeowner is here! It may happen when the landlord of the Utah home you’ve been renting suddenly decides it’s time to sell. Or, during a search for a rental, you happen upon a new Salt Lake City or Beyond listing that’s such a bargain you’d be crazy not to snap it up!

For Salt Lake County area first-time buyers, unexpected opportunities like these may be the first time they seriously entertain home ownership. If that’s the case, they may well be disappointed.

The fact is, the time for first-time buyers to start planning is well in advance.

Job One is to take very seriously the sometimes arbitrary-seeming Rules of the Road for credit scoring.  Money Magazine recently reported the average FICO credit score for denied conventional loan applicants was 729…a pretty darn good score for anything else. The score on approved loans was 762 -- after an average 21% down payment!  

Successful first-time buyers have kept their options open by lining up their ducks well in advance -- completing at least two mandatory steps. For anyone who hasn’t done so, right now would be the appropriate time to start!

1.     Get your accounts in order. If it comes time to pull the trigger, every bank will look closely at every bank account you have. They look for “seasoned” funds, meaning cash that has been on hand for at least three months (sometimes six), untouched.   First time homebuyers will have established the total amount needed for a down payment -- or have a clear trail of the origin of the assets they will sell to get it.

2.     Check your debt.  Banks are looking for a debt-to-income ratio of no more than 33%.  If you got a little too festive with your credit cards during last month’s holiday season, start paying down those balances.

Buying a first home is an exciting decision that can be as fun as it is stressful.  Having prepared in advance will accentuate the fun part , just as having the right agent by your side will, too.

   If and when the opportunity to become one of Utah first-time buyers presents itself  -- or even if you have any questions about how to prepare -- give me a call!