Real Estate Financing...

This one goes beyond just referrals.  While it's a wonderful thing to have a former client refer somebody to you, it's even better when prospective clients can read or hear experiences from those folks ... and then talk to that person who has already done business with you.  Then, they reach out.  Then, it's a bit more comfortable to know they know a person who can and will look out for their best interests.

At the end of the day, that's what matters to any consumer or person. (Consumers, aren't we all:-)

I've delivered more 'Bad' news than I care to share recently.  That's reality though.  I'm sorry, on paper you can't afford that house or mortgage.  I'm sorry, your Credit Scores don't fall in line with the Lending Parameters.  I'm sorry, your Credit History is such that we have some work to do.  Guess what, you can probably bank on having a phone call from me sporadically until you get to the point where I can help.  You're not on speed dial, but you're on my mind.  I really hate failing you if you came to me during a time when you couldn't qualify for anything.  My mission is to be there when you do.

Back to the title of this particular prose.

It's been said but is worth repeating; we (lending institutions) get our money from the same place.  Banks are the same (that's another conversation).  Many of us have different angles, avenues, and knowledge of how to make things work ... yet it's all conversation until your loan closes.  You can damn sure bet that when it does ... I'll be following up with you to make sure things are OK.  That's just me, I want to ensure there's a human element behind your transaction.  Therein lies, the title of this post.

Awhile back, I closed a transaction for a Teacher in Harrisburg, Pennsylvania.  I followed up with him regularly but didn't think twice about what is going on.  Turns out, he sent an email to fellow staff about his experience with me and the next thing I knew, I was being bombarded with scenarios from that man's sphere of influence.  Some of those scenarios, I could and did close.  Some of those scenarios were a shot in the dark.  The bottom line was simple though, his sphere of influence suddenly became mine.

When I entered this business back in 1984 2001, I was advised to contact my family and friends in the State of Pennsylvania to jumpstart my business.  Afterall, that seems to be the easiest 'target' of trust there is.  There was a slight problemo though, I had little family here and my friends at the time were probably more inclined to pay the bar tab than the closing costs on a home purchase.  I had to do it the old-fashioned way, "Hi, I'm Jason Sardi and this is what I do for a living."

Marketing is an interesting beast, I am a firm believer in Chameleon Marketing.  Adapt, Survive, and roll with the punches.  Yet, sometimes 'Old Rules' are the truest form of navigation.  As I grew, my business grew, my client list grew longer, testimonials started coming in.  Most of which were not solicited by yours truly.  They took a moment of their precious time to write about their experience with little old me.  That means something. 

It reminded me that my next marketing campaign won't be overflowing with charts, graphs, rates, wonders, or niche-product info ... this time, I'll let the client speak for me.

On another note, some folks miss that I include links to songs in my posts.  For that, I apologize.  Here ya go ...

She was one of those clients that was truly a pleasure to work with.  Her peristence, patience, & steadfast pursuit of a dream ... became a magic moment in my Real Estate Career.  Though young, she was not living an unencumbered life.  With great motives and responsibility, she emerged from a struggle ... with a dream realized.

The name has been changed to protect the admirable.

Lucy came to me with a bundle of burdens in her credit history.  Her passion was simple, to sell the home she currently lived in and buy a new one.  She had made leaps and bounds in her career after schooling and the income was coming in.  It was now time to upgrade.  But the demon's of credit past were still lurking ...

In a tougher (somewhat rightfully so) lending environment, I knew we had work to do.  Actually, she had the work to do.  I could only guide her in the right direction.

After reviewing her credit, I let her know exactly what needed to be done to get the financing to buy that new home that she so had her heart set on.  I was fully expecting to call her back in a couple of months and find that little progress had been made.  Perhaps that is just the cynical side of this Mortgage Broker's cruel self ...

About a month later, I got the call.  Lucy was on the other end of the line and exclaimed, "I'm ready!"

"To buy a home?" I cautiously asked.

"Yes Jason, I did what you told me and paid off all the negative debt I had and I'm ready to go!"

I recall a slight birth of silence on my part.  While I believed her, I was a bit taken aback.  After all, I've dealt with folks for years for whom we've put together a game plan and it never reaches the sweet ides of fruitation.  Yet, she had worked her keister off to put herself in a position of qualifying for that which she so desparately wanted ... that home.

Lo and behold, she was right!  I gathered all the documentation that she kept for her records after paying off her creditors and we re-visited her file and got her pre-approved.  She didn't need or desire to go searching for a home though, she already had one in mind.  It was the same one touting the 'For Sale' sign a month earlier.

An agreement of sale was reached and we were off! 

What transpired was a wrestling match commonly known and encountered these days in our Industry.  At times, we were coming up against odds from parties having little to do with the transaction ... other than complicating it.  Every obstacle was hurdled, though a foot got caught now and again.  A Pre-approval turned into a Committment to Lend which turned into scratching for every inch to reach those three magic words from the Lending Side of Things ... Clear To Close!  I called Lucy and heard the satisfaction in her voice, the relief in mine.  She did good, damn good.  I was just a guide in the ride.

After the ink dried, she was given the keys to her new home.  She clenched them in her hands like a nostalgic piece of jewelry passed on through generations.  Her eyes, welled up, began dripping tears down her cheeks at a rapid and glistening pace.  Lucy then got up of from the closing table and came over to where I was standing.  By this time, her tears were a downfall.  She reached her hand out to shake mine and said words that so simply define the very reason I'm probably even here, "Thank you Jason, thank you so, so, very much."  Her tears persisted and mine were about to follow ... but I held back. 

I knew right then that humanity had surpassed financial gain, one more moment in our time.

Thank YOU Lucy ... and welcome home.

Jason 

Born sullen & weary, the young child rested within his mother's arms ... waiting for the grace that seemed inevitable.

If I was musically talented Mike Sardi, you'd be in trouble:-)

Somehow, someway, I found out at an early age that life is not only not easy ... but an experiment in the making.  We are all on a similiar level, read behind and beyond the words if you think I'm incorrect.  Nobody knows what really happens next, if anything.  Heck, the whole deal is a leap of faith.  That of, believing in God, ourselves, our existence, our importance, etc. 

One thing did change my mind about everything though.  When I was a boy, younger than I am now, I looked at my Father as if he was something greater than human.  Truth is, he isn't.  I love him all the more because of that.  While we all may be sons and daughters of God, I'm the son of Mike Sardi.  That, I know for a fact.  The mailman denied any involvement:-)

Under different circumstances, my Dad would be my best friend.  Yet, he looks out for me, worries for me, wants to take care of me until the day he looks death in the eye.  My Dad isn't my best friend, he just happens to be someone I can't put a loosely utilized label upon.  I love him to death ... and beyond.  He's someone I look up too, even though I'm taller.  He's someone I can talk to about anything, even though my lips are sealed at times.  He cares about me, more than I care to report. 

Once upon a time I watched my Father (with 4 other gentlemen) play the Pittsburgh Steelers in a charity basketball game.   God, I love watching him play basketball.  He's Larry Bird on a 5'10" frame, Pistol Pete ... willing to pass the ball.  There's something I love even more than that though, I love you Mike Sardi.  I really do love you.  When you hit a last second winning shot, they turned back the clock to allow the 'Real Athletes' the opportunity to win.  I saw your face after that shot, my face turned a similiar shade.  Life's like that, not fair ... but you roll with what you got and keep on going.

A tear wept out of my eye the very first time I saw him cry.  A smile smirked upon my face when I saw him succeed time and again.  When he was down, I was out.  I just didn't know it yet, and don't really show it much ... to this day. 

Come to think about it, I take everything back.  You are my best friend Mike Sardi.  I'm damn sorry I don't show it more.  My bad, Dad.  Happy Father's Day, from a son who hasn't shown that I appreciate it or you enough.

Jason

P.S. - And Elaine Sardi, you happen to me my hero on so many levels.  Thank you for being you!  I love you!

Understanding the specifics of Rehab Loans can be tricky.  Especially considering parameters and products often change.  If you get nothing from this post as a Prospective Investor, Seasoned Investor, or Real Estate Agent, I'll sum up the key to any Rehab transaction in my opinion.  Find the worst house in a decent neighborhood, that's probably going to be the ideal transaction for most Rehab Products. 

I have a couple of different outlets for Rehab Loans.  For a more conventional and less pricey product, check out this information on the post I did on REHAB LOANS a little while back.

There's another type of Rehab Financing that is even more aggressive that the one I posted about above.  They will go down to a 620 score and if you find the right type of property at the right price and equity position, you can literally buy it with little to no money out of pocket!

I'll tell you right now, these loans are pricey.  I'll get into that aspect another time, on another post.  For now, I'll lay-out some information on this particular Rehab Loan, some of its parameters, & what it offers. 

About Rehabbing
There are many formulas used for the successful purchase of a rehab project. It's important to use one.  Of course the formula should be formulated around the specific parameters of the financing available.  The best financing outlet is going to be on a case by case basis.  There must always be a comfortable cushion between the purchase price and the selling price of investment property. This cushion price will help you achieve a successful investment, even if you have repair cost over-runs, or hold on to the property longer than you had anticipated. Remember, every day that the property is not sold or rented comes right off your bottom line. The interest, taxes, insurance, and utility bills compound each day. Buying the property at the right price will protect you from Murphy's Law.

Here's the Rehab Funding formula:

1.       Establish an after repair value for your property. (Get "area comps" and view each one. Pick out the property that has a street that is most similar to your house's street, and a structure that is closest to your house's structure, then compare the square footage, amount of bedrooms and bathrooms that are all listed on the "comps." This will help establish a real fair market value for your property).

2.       Multiply the ARV x .65 (This will give you 65% of the ARV).

3.       Establish a comprehensive and accurate list of repairs that you plan to do to the property, and estimate the costs for each repair. (This is important. If you are knowledgeable and experienced in doing repair work, you may not need help. If you are not experienced or skilled in this, find someone who is and have them draw up a plan. Even if it costs you a little money to get them out there, this could save you thousands of dollars).

4.       Subtract the cost of repairs from the 65% value of the ARV.

This should be the maximum price that you pay for the property! This is a conservative formula, and it usually works well. Remember, anyone can buy a property at close to fair market value, but with your costs and risks, you must do better!

"Rehabber Friendly" Terms

• Loan will be 100% of the sale price and 100% of the repair funds, not to exceed 65% of the ARV (after repair value).

• Turn around time on the loan: Within (2) weeks.

• Maximum length of the loan: (12) months.

• No pre-payment penalties

• Deferred payment plans available         

• Seller's concessions/assists may be used to finance the closing costs, as long as the loan does not exceed 65% ARV.

• If purchase and repairs costs are below 65% of ARV closing costs can be wrapped into the loan.

• Interest only payments (no principal) until the property is sold or refinanced.

            There is no penalty for early loan pre-payment.

• Repair funds go into an escrow account:  The escrowed repair funds are paid in draws as work is completed.

I'll be posting a Q&A about this particular product relatively soon, to give even more insight into another product available for specific rehabbing needs.  As always, if you have any questions, you can reach me via my contact information in that nifty little box below:-)

Some time back, a bunch of Mortgage Professionals here on Active Rain participated in a contest in which the question posed was, "Which is better, A Fixed Rate or an Adjustable Rate."  I had cited a term I had learned awhile back called the Sleep Principle.  Simply put, whatever program you decide is best for your situation, it's a good idea that you are comfortable enough with that decision to lay your head against the pillow and sleep peacefully each night.

It is vital to understand the features associated with this or any loan program you choose, and that it meets your unique financial needs.  Ask questions, ask a ton of them.  Let a Mortgage Professional guide & educate you as to the pros and cons of any loan program.

Some of the advantages of ARMs are the following:

• Get approved for larger loan amounts (Be certain of a few factors here, including how long you will be in the home, affordability down the road if the rate adjusts, etc)
• Lower Monthly Payments (Again, this makes sense if you purchase a home for you and your family and plan on being there only a short period of time.  It also makes sense many times for Real Estate Investors to increase overall cash flow with reduced monthly payments.  In either case, make sure you have an Exit Strategy (way out) to make sure any adjustment won't cripple you financially in any way.)
• Payment options that adapt to your needs. (Some folks have income that varies throughout the year ... more in some months & seasons than others.  These folks can benefit from a loan tailored to their specific situation and needs.)
• Flexibility for First Time Homebuyers.  (Education passed on from your Mortgage Professional to you is crucial to make sure this is a good fit.)
• This can pose better options for Savvy Real Estate Investors.  (As mentioned above, a lower monthly payment can increase cash flow.  In turn, this money can be utilized to invest in other projects or investments to diversify your Financial Portfolio.)

For all your Pennsylvania Mortgage Needs, I'm a phone call or email away.  Also, below are some other niche products we have available to fit a wide range of Mortgage Needs.

BUYING A HOME IN PENNSYLVANIA

REHAB LOANS

STATED INCOME INVESTOR LOANS

SBA LOANS

MANUFACTURED HOME LOANS

LEASE PURCHASE FINANCING

Jason Sardi
Mortgage Consultant
First Choice Equity Group Inc.
610-439-2166 ext. 229
jsardi@fcegi.com
http://activerain.com/blogs/shears76

Licensed with the Pennsylvania Department of Banking

When I was asked to introduce and interview the new host for Blogger's Choice here on Active Rain, I was quite honored.  When I found out who I'd be interviewing, I was thrilled.  Few ooze class and professionalism more than the following person.  Without further ado (nice choice in wording Mr. Sardi:-) ... I give you ...

  Lola Audu!

*Did Active-Rain find you or you, it?  I would also love to hear your experiences, trials, & tribulations while you've been here!*

'Stumbling upon' would be the most appropriate way to describe how I started blogging on Active Rain.  I had been Blogging on Real Town Blogs for approximately a month and a half prior to joining AR.  I don't know how I found the site, but for some reason I decided to sign up. At that time, I had a butterfly that was my avatar.  I was very skeptical of being online...  I didn't loose the butterfly avatar for several months, but this was the post where 'the first sighting of Lola emerged."

The Parable...The Acorn & The Butterfly.

The most significant challenge when I first came was just being overwhelmed by the incredible amount of talent and information.  I had never had the exposure to so much knowledge about real estate and technology.  It was in a sense, all consuming.  Finding balance personally and professionally continues to be something I work on everyday.

*Most who read you realize what a very astute writer you are, how'd you come about learning how to write?  Who are some of your favorites, whether on AR or the New York Times Best Seller List:-)

Astute...now, that's a word that I need to look up.  Excuse me for a moment...

According to the Free Dictionary online, it means "Having or showing shrewdness and discernment, especially with respect to one's own concerns." 

Hmm...well, I'd agree with discernment, but I had never thought of myself as shrewd.  I'm not quite that calculating.  But, I would say that over time, I have developed about 3 different audiences which I think about when I'm writing.  (my clients, other agents/brokers, those I'd like to inspire...have I covered the world yet?)

On how I learned to write.  Well, it's funny but creative writing was something I liked doing at school, but didn't think I was very good at it.  Getting all the syntax and grammer right always seemed to get in the way of saying what I intended.  I have written outlines for courses that I've taught, but would NEVER have imagined that I'd be writing over 400 articles from scratch.  Writing for me is an outward flow of my thinking.  It's a conversation that's occuring with my fingers rather than my mouth...

I like good writing whenever I find it.  Some of my favorite writers here on Active Rain for prose are:  Broker Bryant, Elizabeth Nieves, Andrew Lenza, Linda Davis, Gary Bolen, Jason Sardi, TLW aka The Lovely Wife, Geno Petro, Elizabeth Weintraub & Chris Elizabeth Griffith.  Then there are so many whom I admire for their tech ability, Jeff Turner & Missy Caulk come to mind and others for their community Spirit, such as Midori Miller, Sally Cheeseman, Kathy McGraw & janeAnne Narrin.

Favorite Blogger outside the "Rain"...Seth Godin

Books I'm currently enjoying...just fininished "An Unaccostomed Earth" by Indian author Jhumpa Lahiri...breathtaking prose...just beautiful.

Boy, Jason...you will have to condense this interview big time...2 Questions and we've already covered enough material for 2 blog posts. :)

(Not to worry Lola, I may actually earn my 200 points today.  Besides, you get mad props for mentioning little old me amongst your favorite Bloggers.  This is good reminder folks.  It's never a bad idea to suck up to the interviewer!)

*Do you have a core philosophy about Blogging?  What are some of your favorite posts that you have written?*

Core Blogging Philosophy...Write from the heart...the blog is done when it resonates there.   Favorite posts...   This is hard.  I write for business and for inspiration. I'd choose the following from Inspiration...   What I Learned from the post Sarah Cooper told me NOT to read...   What I learned from the post Sarah Cooper told me NOT to read.  and from Business...   The New Wild West of Real Estate...( A 6 part series on Short Sales & Foreclosures)   Part 1 Link:  The New Wild West of Real Estate...Negotiating a Short Sale! (Part 1)  The series that I've enjoyed doing the most is "What It Means..."   This series involves looking at things that have had a profound impact in my life.     

*If AR entered a show-down with some of the other High-Octane Real Estate Blog Sites and you were in charge to hire 5 Bloggers to represent AR, who would they be and why?*  

-Lenn Harley...writes some of the best real estate stuff out there. Her Hard Core Real Estate posts could be a text book!  And she is remarkably productive!  

-Jeff Turner...again prolific...I think of Jeff as high tech with a heart.  Good blogger, but always on the look-out for the next best thing and willing to share his finds everywhere...Serious, he's a face I expect to find on any site worth joining.  

-Jeff Dowler...Excellence in local blogging.  Interesting & indepth analysis of the local scene in southern California, but also writes insightful articles about real estate and life.  

-Craig Shiller...brilliant writer, brings insight and creativity to the art of staging and doing it right.   

-Janet Gauilault...one of the best writers that I've read in the mortgage industry.  She knows her stuff and can explain it to the rest of us.   As you can see, my 5 choices reflect an emphasis on real estate and financing.  

The question was about a High-Octane Real Estate Site.  While I love non real estate related blogs and write them myself, I think that a real estate networks greatest cache is in making real estate interesting, informative and relevant.    

*Most folks remember their first transaction.  Sometimes it is a nightmare, sometimes it goes smooth.  Do you recall your first closed transaction in Real Estate?  Can you summarize that transaction?*

   Yes, I remember vividly my first transaction.  I had asked some friends if I could "practise" my listing presentation on them.  They agreed.  At the end of the presentation, they said, "Where should we sign?"  I thought they were kidding.  I was totally unprepared for my first listing and had to scramble to find someone who knew how to fill out the paperwork.  They ended up selling their house and buying another one within 4 months.    

*The idea behind 'Blogger's Choice' is a great one.  Got any plans in store as the New Host?  

Blogger's Choice evolved out of observing some of the discontent expressed about Featured Posts. The truth was that there were some excellent posts that were being missed for a variety of reasons.  I thought that it would be great to give bloggers the opportunity to speak for themselves about the content which they wrote and to have the entire focus of the group be driven by contributing members.    That was the idea behind having a Spotlight in which one member could choose posts they liked.  The other important aspect of the group was to get to know people better...thus the idea of introducing the host with a separate post.  It's an Open Source Group, so we're open to ideas and ways to improve.  Blogger's Choice belongs totally to the members.  I was simply a catalyst.    

*Do you recall who you first 'Subscribed To' on AR?  Are they still active here?*  

I have absolutely NO recollection of who I subscribed to First on AR.  And...that is NOT a politically astute answer. :)  

*Outside of Real Estate, what are some of your interests?  What is Lola doing at 9:00 on a Saturday Night?*

   Outside of Real Estate, I enjoy spending time with my family and friends.  I like a good movie and trying different restaurants.  We also do a fair amount of entertaining.  Saturday night often finds me online finishing a blog post before mid-night.  Then I'm totally disconnected from anything electronic until sometime on Monday.  This is when I catch up on my TV viewing and books that are piling up by my bedside table.  

*There's got to be something in life you haven't done but have wanted to do?  What might that be and what the heck are you waiting for?*

   Now, this is absolutely hands down the best question of this interview.  There's a lot of stuff that I'm working on or working through.  We'll leave it at that...  

*How did you generate your business when first starting out?  Does it differ from now?  What would you say to newer agents and even those who now may be struggling, to let them know how to generate more leads and business?*  

When I first started my real estate career, I had a trainer who told me I was sitting on a gold mine.  He was referring to my sphere of influence.  It took me awhile to understand what he meant, but he was right.  Relationships have always been the center of my life.  Starting with my relationship to God, my family and friends, this thread weaves itself through my business.    I care about people and I care about trying to determine what works for them.  I'm intrigued by the WHY behind the transaction.  My advice to newer agents would be to spend your time wisely...avidly seek a good mentor, respect their advice, time and attention and then DO what they tell you to do. There's a reason why it works!    

*Can I have an autographed business card?*  

Are you serious?  Nobody has ever asked for my autograph. LOL     Thanks Jason.

No, thank you Lola.  I'm still waiting for that autograph though;-)