Mortgage rates have dropped tremendously over the last few weeks and we have made many people very happy by being able to lower their payment. I belong to many economic sites that are geared to mortgage professionals and inform us of what is actually happening in the economy and with mortgage rates, this information is up to the minute. Unlike CNN or the Boston Globe, they are reporting on stories from last week or quoting a national average from closed mortgage from a week ago. The problem with is the information is old and can not really be used in anyway. Mortgage rates rose this week by 50 basis points or 1/2 percent.
A client this morning sent over a Yahoo Business report telling me where rates are and what the trend was. This is all good if you have time on your side and you are convinced that rates are dropping everyday. Rates move like the stock market, some days we are up and some days we are down. This week happens to be off because of economic news in the world which overshadows anything that is going on in the treasury markets or government plans.
I recommend that you sit down at your computer and make a spread sheet of what kind of money you would like to save monthly. Plug in a few different rates, start at 5.5%, 5.25% and go all the way down to 4.5% so you understand the difference in payments. You may find that each 1/4 is not a big difference. it is best to save at least $150 per month when refinancing and if possible look into a shorter term mortgage, you will save far more this way in interest alone. Find out the costs involved and make sure it is worth it to refi. Some clients have only 10 or less years on their mortgage and they are paying all principal now, the cost involved and the time left on the mortgage does not makes sense finacially. This refinance may cost $2000 to $3000 to accomplish. Take your savings and divide it into the costs, see how many months it takes to recoup this cost. If you are only going to be in your home for 3, 4 or even 5 years it may not be worth it. Go to my website at www.emersonlending.net and click on loan center. There you will see a calculator page that is set up for refinancing. This will truly help you with payments and interest saved over the years.
My biggest concern is at some point mortgage rates will spike up. At what point do you lock in and forget it. The government has a plan to inject $500 Billion into the the mortgage markets over the next 6 months. This will definitely will keep rates low and possible push them lower. Rates, again are like the stock market and can move several times in a day. The government could funnel there money in one day and rates drop and something happened 1/2 around the world and causes rates to go up that day. Mortgage back secuities has been the true way to track mortgage rates these days, it is almost impossible to find sites on the interent that give you this infomation without paying an arm and leg for.
Pick your local bank that you have your checkling and savings at, and track the movement of there rate. Whether it is high or low, it will still give you a good indication of the direction of mortgage rates. The trend this week happens to be up.
Most importantly, don't try to time the market, it is next to impossible. Get yourself with a lender/broker who has many options and many different banks to chose from. Find out what is your ablsoulte rate that makes your life easier, and don't say the lowest! You can always refiance today and rates continue to drop, do it again. I would just hate to see you miss this oppurtunity in our life time.
if you ever have any questions, please feel free to call me anytime or email me at bill@billnickerson.com
Sincerely,
Bill Nickerson
Mortgage Network/Emerson Lending
179 Great Road
Acton MA 01720
Wednesday, December 31, 2008
Saturday, December 20, 2008
4.5% Mortgage Rates
I am always amazed at consumers who listen to the media. When CNN reported mortgage rates were going to drop to 4.5%, it appeared the mortgage world stopped. Consumers no longer wanted their 5.25% interest rate they had locked into, CNN told them to wait. If anyone read the fine print of this latest plan from the government, you would have read in the Wall Street Journal ( a real news source for the economy) these mortgages were going to be set aside for purchase money only and it is only a plan, not even on paper yet.
Mortgage rates had dropped a full percent in the last few weeks due to large amounts of money pumped into the Mortgage Back Securities markets. This did work and we saw rates of 4.875% for an afternoon. Then, back to reality. The economy, which actually governs the markets took over. In addition to the economy, large mortgage companies like GMAC, Wells, Citi just a name a few have artificially raised their rates to slow down the mortgage application volume. You see, we can only handle so many mortgages, then if you are one of those tire kickers and just want to chat about the markets, you will get a call back next week. With all of this, mortgage rates backed off, a lot. From 4.875% Tuesday up to 5.375% in a matter of minutes. But why would believe someone who has been doing this for over 15 years, the CNN news person just learned who Ben Bernanke is and now is an expert on the markets.
I am sure we will see rates drop back down, but to try to time the market perfectly and get the lowest rate, nearly impossible. History tells us the markets react like a roller coaster, once we see an all time low interest rate, it is bound to spike back up. I admit, we are in new territory with this economy. If you are in the process of refinancing your home and you are going to save an estimated $150 per month, do you think it is wise to hold out for a possible rate drop of a 1/4 or 3/8ths just to save another 30 or 40 bucks. You may miss it all together and not even get a chance to refinance at all. Stop the greed, it is what gets most of us in trouble.
If you have any questions or comments, please feel free to e-mail me anytime at bill@billnickerson.com. I can share the many tools we use to watch mortgage rates and we are typically a full day ahead of the news media when it comes to the direction of mortgage rates. If you are getting your economic news from the evening news you are even further behind the curve.
Be careful what you wish for, if you really want to save money, cut back on your Starbucks or Dunkin Donuts coffee. That's $100 per month for the average person. Again, I am always amazed at the consumer of what they think and how they can predict the markets.
Good Luck and I wish you the best with timing the markets. Hopefully you not one of those who lost 30 to 40% in the stock market because you knew better then the rest of us.
Just another day in Mortgage Paradise!
Bill Nickerson
Vice President
Mortgage Netword
Mortgage rates had dropped a full percent in the last few weeks due to large amounts of money pumped into the Mortgage Back Securities markets. This did work and we saw rates of 4.875% for an afternoon. Then, back to reality. The economy, which actually governs the markets took over. In addition to the economy, large mortgage companies like GMAC, Wells, Citi just a name a few have artificially raised their rates to slow down the mortgage application volume. You see, we can only handle so many mortgages, then if you are one of those tire kickers and just want to chat about the markets, you will get a call back next week. With all of this, mortgage rates backed off, a lot. From 4.875% Tuesday up to 5.375% in a matter of minutes. But why would believe someone who has been doing this for over 15 years, the CNN news person just learned who Ben Bernanke is and now is an expert on the markets.
I am sure we will see rates drop back down, but to try to time the market perfectly and get the lowest rate, nearly impossible. History tells us the markets react like a roller coaster, once we see an all time low interest rate, it is bound to spike back up. I admit, we are in new territory with this economy. If you are in the process of refinancing your home and you are going to save an estimated $150 per month, do you think it is wise to hold out for a possible rate drop of a 1/4 or 3/8ths just to save another 30 or 40 bucks. You may miss it all together and not even get a chance to refinance at all. Stop the greed, it is what gets most of us in trouble.
If you have any questions or comments, please feel free to e-mail me anytime at bill@billnickerson.com. I can share the many tools we use to watch mortgage rates and we are typically a full day ahead of the news media when it comes to the direction of mortgage rates. If you are getting your economic news from the evening news you are even further behind the curve.
Be careful what you wish for, if you really want to save money, cut back on your Starbucks or Dunkin Donuts coffee. That's $100 per month for the average person. Again, I am always amazed at the consumer of what they think and how they can predict the markets.
Good Luck and I wish you the best with timing the markets. Hopefully you not one of those who lost 30 to 40% in the stock market because you knew better then the rest of us.
Just another day in Mortgage Paradise!
Bill Nickerson
Vice President
Mortgage Netword
Tuesday, November 18, 2008
Bailout 2008
Once again I sit up late watching as much financial news as possible. I typically spend my entire day watching Bloomberg, CNN and host of others on the Internet. I may be crazy, but this bailout package, excuse me TARP, is just a misguided iceberg. Now the automakers are in it! Because of mistakes they made decades ago in budget planning, SUV's, Unions and just plain Fat Cats. Didn't you see the movie Tucker, about the man who created a car that threatened the big 3 over 50 years ago. Well here we are in the new millennium, Nissan, Honda and Toyota all building cars very successfully right here in the US. Sales are down, but they are doing well, running efficient, only make a few models. You know, specialize in what they do best, don't change the model too much from year to year and really don't build anything outrageously fancy. As I look down the street where I live, almost every driveway as a foreign car. They get better mileage, they are safer and I could go on for ever about the pros and cons for the automakers. I purchase my fist American car this past year in over 20 years. I DON"T LIKE IT. It is bulky, the instruments are like they are from the 80's, but I said I have to support this economy. Not sure why I said that, this economy would never support me!
I found out the other day that in order to get bailed out of a mortgage or other debts you have, you actually have to go into default. I find this very hard to deal with, I work so hard in writing mortgages for people that deserve them, they have worked hard to obtain good credit, have a good job and good savings. The idiot mortgage companies that are no longer here have left of trail of shit for us to pick up and of course take the blame for. I have had several past clients that I actually turned down or said, come back next year when you have done this. They didn't listen, they went to the mortgage company down the street without any morals or ethics, got a bad loan and now they are in default. Of course they ask if I can help them out, I do honestly try, nut usually in this market there is nothing I can do.
So now back to General Motors, apparently if they file for Bankruptcy they will be able to survive and the government will then give them money!?
How does this work again? Go in to default, screw everyone in your path, take a large bonus check while you can. YOU WIN! The government will then write you a check to save your dumb ass so you can do it all over again!
What should happen: The Government should make it mandatory the Japanese Automakers come in run the American Automakers. Show them a few things, how to build 4 or 5 cars perfect! Not learn how to build a model line of over 25 cars crappy!
What a market, and we did it to ourselves!
I found out the other day that in order to get bailed out of a mortgage or other debts you have, you actually have to go into default. I find this very hard to deal with, I work so hard in writing mortgages for people that deserve them, they have worked hard to obtain good credit, have a good job and good savings. The idiot mortgage companies that are no longer here have left of trail of shit for us to pick up and of course take the blame for. I have had several past clients that I actually turned down or said, come back next year when you have done this. They didn't listen, they went to the mortgage company down the street without any morals or ethics, got a bad loan and now they are in default. Of course they ask if I can help them out, I do honestly try, nut usually in this market there is nothing I can do.
So now back to General Motors, apparently if they file for Bankruptcy they will be able to survive and the government will then give them money!?
How does this work again? Go in to default, screw everyone in your path, take a large bonus check while you can. YOU WIN! The government will then write you a check to save your dumb ass so you can do it all over again!
What should happen: The Government should make it mandatory the Japanese Automakers come in run the American Automakers. Show them a few things, how to build 4 or 5 cars perfect! Not learn how to build a model line of over 25 cars crappy!
What a market, and we did it to ourselves!
Friday, May 9, 2008
The Housing Crisis Is Over
By CYRIL MOULLE-BERTEAUXMay 6, 2008; Page A23
How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.
Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.
Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.
The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.
Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.
Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.
The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.
In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.
The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.
Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.
Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.
Many pundits claim that house prices need to fall another 30% to bring them back in line with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons. Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.
This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.
When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.
More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.
A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.
We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.
Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.
The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.
How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.
Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.
Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.
The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.
Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.
Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.
The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.
In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.
The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.
Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.
Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.
Many pundits claim that house prices need to fall another 30% to bring them back in line with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons. Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.
This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.
When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.
More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.
A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.
We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.
Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.
Saturday, May 3, 2008
Fraudulent Mortgage Letters
Today I received a letter from a loan officer who works for “The Money Store”. The offer was that his company was given special permission to offer me a mortgage in regards to the stimulus package. Reduced rate, 5.00% and it was fixed. I did my calculations and this would cost somewhere around 5 points (that’s 5% of your loan amount), but not to worry he said, you can just roll this into your mortgage, what do you care, he said, your payment is going down. After speaking with the loan officer and asking “loaded” questions, I realized he was just another order taker who is part of the problem in the mortgage meltdown and not part of the solution.
The stimulus package that was released earlier this year for mortgages will not really help out too many consumers. The combination of mortgage insurance, adjustments to the rates based on your credit and the tightening of mortgage guidelines has made if very difficult for the consumer. Especially if you bought your home after 2004, chances are your mortgage is now equal to or greater than the value of your home. Mortgage Lenders no longer have 100% financing programs to help out.
I do take these offers (I have a file of them) and I forward them to the Division of Bank, these are the companies that continue to take advantage of the consumer.
If something sounds too good to be true, it usually is. It is always worth to investigate these offers but always proceed with caution. Lenders, Banks and Brokers get their money from the same source. Mortgage rates can adjust on a daily basis, they move according to the markets around the world as the stock market. If you are to call 10 lending companies in the same window of time, the rates should be within a ¼ percent of each company.
Remember, when shopping for a mortgage, a car or even a washing machine, a second opinion is mandatory.
I have been in the Banking industry since 1991, I have worked for the large lender, the small savings bank as well as the mortgage broker. At the end of the day, the rates and closing costs should be the same or similar. It all depends if you were able to get an honest loan officer who is not taking advantage of you.
If you ever need a second opinion on mortgages, rates, or closing costs, you can always call me. I can be reached at 978-264-4803. Bill Nickerson
The stimulus package that was released earlier this year for mortgages will not really help out too many consumers. The combination of mortgage insurance, adjustments to the rates based on your credit and the tightening of mortgage guidelines has made if very difficult for the consumer. Especially if you bought your home after 2004, chances are your mortgage is now equal to or greater than the value of your home. Mortgage Lenders no longer have 100% financing programs to help out.
I do take these offers (I have a file of them) and I forward them to the Division of Bank, these are the companies that continue to take advantage of the consumer.
If something sounds too good to be true, it usually is. It is always worth to investigate these offers but always proceed with caution. Lenders, Banks and Brokers get their money from the same source. Mortgage rates can adjust on a daily basis, they move according to the markets around the world as the stock market. If you are to call 10 lending companies in the same window of time, the rates should be within a ¼ percent of each company.
Remember, when shopping for a mortgage, a car or even a washing machine, a second opinion is mandatory.
I have been in the Banking industry since 1991, I have worked for the large lender, the small savings bank as well as the mortgage broker. At the end of the day, the rates and closing costs should be the same or similar. It all depends if you were able to get an honest loan officer who is not taking advantage of you.
If you ever need a second opinion on mortgages, rates, or closing costs, you can always call me. I can be reached at 978-264-4803. Bill Nickerson
Saturday, April 26, 2008
Foreclosed Homes
My name is Bill Nickerson and I have been in the mortgage business since 1991. Since that time, I have had my share of investment properties, flipping homes as well renovations. I enjoy working with my hands. Today, I have seen too many clients chasing after that bank owned property or that home that has been neglected. I warn you, if you don't know how to swing a hammer or rewire a light switch, be prepared to spend a lot of money.
All too often I see the client or real estate broker come in a tell me they are going to make a lot of money on these short sales. One thing you have to remember, if a deal is so good, why didn't the local builder of contractor pick it up? Don't you think if a buck was to be made the builder would have picked it up. Nope, they didn't miss it or overlooked it. They passed on it for a good reason. They know that money can not be made on all of them.
I have experience in this, I have bought and sold several homes and completely renovated them, down to the stud, new electric, windows roofed, planted several dozen trees, learned how to use a back hoe. It still cost us a little over $40,000 in materials. I know EVERYONE in the industry and had every deal with every contractor. I continue to buy and sell even in this (what I call a perfect time to buy, prices are low and so are mortgage rates), market place.
So before you go out and think you are going to start flipping properties, ask yourself a few questions: Do I know how to hang a door? Can I install ceramic tile on a floor or bathroom? Do I know how to build a counter top from scratch as well as hang the cabinets? If you have to question any of these items, it means you are going to have to pay someone else to do the work. A basic kitchen with appliances will run you $20,000 installed, there goes your profit.
For more information on home renovations or what kind of properties you should be looking at, call me anytime.
Bill Nickerson has been in the mortgage banking for 18 years and has renovated several homes in his career. Currently Bill owns several investment properties in the area and is always on the look out for that bargain property.
Bill can be reached at Emerson Lending Company in Acton MA, 978-264-4803 or e-mail him at bill@emersonlending.net
All too often I see the client or real estate broker come in a tell me they are going to make a lot of money on these short sales. One thing you have to remember, if a deal is so good, why didn't the local builder of contractor pick it up? Don't you think if a buck was to be made the builder would have picked it up. Nope, they didn't miss it or overlooked it. They passed on it for a good reason. They know that money can not be made on all of them.
I have experience in this, I have bought and sold several homes and completely renovated them, down to the stud, new electric, windows roofed, planted several dozen trees, learned how to use a back hoe. It still cost us a little over $40,000 in materials. I know EVERYONE in the industry and had every deal with every contractor. I continue to buy and sell even in this (what I call a perfect time to buy, prices are low and so are mortgage rates), market place.
So before you go out and think you are going to start flipping properties, ask yourself a few questions: Do I know how to hang a door? Can I install ceramic tile on a floor or bathroom? Do I know how to build a counter top from scratch as well as hang the cabinets? If you have to question any of these items, it means you are going to have to pay someone else to do the work. A basic kitchen with appliances will run you $20,000 installed, there goes your profit.
For more information on home renovations or what kind of properties you should be looking at, call me anytime.
Bill Nickerson has been in the mortgage banking for 18 years and has renovated several homes in his career. Currently Bill owns several investment properties in the area and is always on the look out for that bargain property.
Bill can be reached at Emerson Lending Company in Acton MA, 978-264-4803 or e-mail him at bill@emersonlending.net
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