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Know to Own

A recent Bankrate.com survey finds while 29 percent of renters say they can’t afford a down payment, nearly a quarter report they don’t have a clue how much they would put down to buy a home.

Only 9 percent of non-homeowners said they would put down 1 – 5 percent of the purchase price as a down payment. It’s possible to get an FHA loan with just 3.5 percent down, or a conventional loan with 3 percent down.

As real estate professionals specializing in multi-family properties, we come across a lot of rental clients. Many of them are unaware of what is required to purchase a home. They are uninformed about the various programs available to assist with down-payment costs. As the real estate market continues to rebound and home values increase, many renters are feeling the heat with rising rent costs, making it harder to save for a down payment. 

We take time to research programs and educate potential clients on what is needed to purchase a home and provide resources to assist them in setting goals, finding financial assistance programs and becoming more financially responsible to build wealth through real estate. For more information on our upcoming FREE seminars, please visit www.urbanmoneymatters.com or contact us at Contact@MandrellCo.com

We look forward to serving you. 

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3 Inexpensive Tools Landlords Can Use To Make Life Easier

Being a landlord is an excellent wealth building tool. All things designed to make you money, costs money. We want to help you be efficient and get the greatest return on your investment. Here are three inexpensive tools to help you run your real estate “business” more effectively:

  • Purchase a Lockbox so you don’t have to walk around with 50 keys
  • Invest in a toilet auger. Trust us, you’ll thank us later!
  • Purchase Quicken Rental Property Manager to track your expenses and rent payments

We hope the audio helped explain why each is a great, inexpensive investment into your property that will save you time, frustration and MONEY in the long run. For more advice on how to be a super landlord, feel free to contact Willie Mandrell at Willie@MandrellCo.com or 617-297-8641.

Happy Landlording!

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I have 2 friends who both recently purchased their first homes in the Boston area. While I’m happy for them both, my friends took two completely different approaches to home ownership, which resulted in two wildly different financial scenarios. Below are the details

Larry (friend #1) makes about $40,000 annually, has very little consumer debt and a fair credit score (650). Larry was pre-approved by his mortgage broker for a $300,000 homes purchase based on his financials. As of 2016, $300,000 in Boston will buy you an entry level single family in the city which is what Larry decided to purchase. His mortgage, taxes, insurance, and water bills cost Larry about $2,077.30 after a 5% down payment and paying his own closing cost. His monthly cost of detailed below.

Larry’s Payment Information
Principal & Interest: $1,360.63
PMI: $250.00
Water/ Sewer: $50.00
Taxes: $250.00
Insurance: $166.67
Total Monthly Payment: $2,077.30

Pros & Cons:

  • Larry has the joys of single family living and doesn’t have the responsibilities that come with tenants 
  • If anything happens to Larry financially, he is on his own when it come to covering his monthly obligations
  • Larry was able to purchase this home with 5% or just 15,000 out of pocket.

John (friend #2) makes nearly the same annual salary of $40,000. John also has very little consumer debt and a 650 credit score. Instead of accepting the same $300k pre-approval Larry did, John decide to talk to his mortgage broker about purchasing a multifamily property, more specifically a Boston triple decker. John planned to live on one floor and rent out the other 2 units to help cover his monthly cost.

John’s mortgage broker did some research and found that apartments in John’s area were renting for $1650 per month on average. If John occupied one unit and collected rents from the other two, he would be putting an additional (after his own salary) $3700 per month in his pocket. In this scenario, John’s mortgage broker re-evaluated John’s financials and determined that if John was to purchase a triplex, he could afford to spend up to $550,000. Simply put, the additional rental income allowed John to purchase a larger home. After John collected rental income from his tenants each month, John was left with a balance of $4.17 that he need to cover. John was essentially living for free. ($1650 per month x 2 rental units = $3700 – Monthly Cost of $3,704.17 = $4.17 balance)

John’s Payment Information
Principal & Interest: $2,554.17
PMI: $400.00
Water & Sewer: $150.00
Taxes: $350.00
Insurance: $250.00
Total Monthly Payment: $3,704.17

Pros & Cons:

  • John was able to purchase this property with 5% (27,5000) out of pocket.
  • John has a very small obligation every month  (4.17$) to cover but what if one of the tenants moves out? John will need to save money to cover the cost of vacancy. He will also need to cover the cost of repairs to the building/ tenant units. 
  • John doesn’t have the privacy single family home provides.
  • John will eventually raise his tenants rents. If rents go up, John’s income from the property goes up as well. Now he’s putting money in his pocket every month after his expenses…”cash flowing”
  • If John ever moves out of his apartment he could also rent it for market value. In the near future he could be putting $2000 into his pocket every month.
  • John does need to create a reserve account for the raining days that come as a landlord.

 

Would you like to speak to one of our mortgage brokers and find out what you qualify for? Are you interested in purchasing a multifamily home and need more information? Give us a shout at 617-297-8641 or email us at Contact@MandrellCo.com

 

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5 Need Funding For Flips? Here Are The Top 5 Hard Money Lenders In MA

Are you looking for funding for you local real estate flips? Great, Below is a list of the TOP 5 HARD MONEY LENDERS in the Massachusetts area. If you have a deal pending, or would like to get more information about working with these lenders, please contact Doug Medvetz at 617-297-8641.

Endeavor Capital is a “direct” real estate lender that has been providing investors with immediate access to short and intermediate-term commercial loans for over 15 years. Endeavor serves a growing need for experienced investors looking for creative, situational financing within a tight time frame to fund acquisition, construction, and other investment projects.
Unlike commercial banks, Endeavor makes asset-based lending decisions that focus on the financial strength and underlying value of the collateral that secures the loan and not on the credit history of the applicant. The length of these loans is generally between six months and two years for amounts ranging from $100,000 – $10,000,000.

Conquest Capital specializes in private lending secured by real estate. We work with experienced real estate developers and investors primarily in Massachusetts and California to finance the acquisition and construction of non-owner occupied residential properties. The firm’s principals have a combined 30 years of experience in all aspects of real estate lending and investing. Having spent years developing real estate prior to launching the firm, its principals have built Conquest’s private lending platform from the ground up. Since the firm’s inception, its principals have consistently invested their own personal capital into its lending projects alongside its investors.
Conquest Capital’s core investor base consists of individual as well as institutional investors. Our mission is to provide investors with attractive current income and total returns while remaining focused on capital preservation. We aim to deliver real value to investors and to outperform the returns of other secured investments in the marketplace.

Commonwealth Equity Funding is a direct collateral based private real estate portfolio lender with over 50 years of collective experience. We provide investors with bridge financing to purchase, refinance, construct, or renovate their residential and commercial investment properties when traditional lenders cannot perform in a timely manner. Our fast, flexible, and creative financing solutions provide borrowers with near immediate approvals on asset based loan scenarios. Our common sense lending guidelines are solely based on the underlying equity present in the real estate we are securing, the likelihood of default, and the marketability of the property. We use stringent loan to value guidelines and have a hands on approach to our loan investments. Origination, processing, funding, and loan servicing are all handled by our in house team. This allows us a unique understanding of our borrowers and loan portfolio at all times. Our reputation speaks for itself by the repeat clients that choose us for their financing needs year after year.

Grand Coast Capital Group is a national private lending firm based in Boston, MA that provides creative, short-term financing to real estate investors, builders, and developers across the country. As a direct lender, Grand Coast has the ability to analyze and fund loan requests very quickly in order to meet time-sensitive transactions.
Grand Coast finances residential, commercial, industrial, and multi-family properties as well as entitled land, with a primary emphasis on 1-4 unit residential properties. We do lend in all 50 states, but with a particular focus on the Northeast Region and Southern California, in addition to targeting experienced local investors and operators in their perspective markets.
Grand Coast targets lending opportunities that do not necessarily fit within the parameters of conventional bank financing either due to time constraints, complexity, or value-added nature of the transaction. We primarily make first-position mortgage loans with a maximum loan-to-value of 75%. Our typical loan size ranges from $100,000 — $3,000,000.

The Raymond C. Green Companies offer creative, short term financing to builders, developers, and real estate investors throughout New England and Florida. We specialize in providing fast, flexible and reliable alternatives to traditional bank financing. We recognize the importance of customer service, building strong relationships, and QUICK CLOSINGS.
We provide financing for the construction of single family homes, subdivisions, renovation projects, condo conversions, condominium developments, bridge loans, permitted land development, commercial properties, DIP (Debtor in Possession) loans and more.
We are proud to have delivered over 50 years of professional service and look forward to earning your business.

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