Adding Value by Dennis O'Hagan

Census Bureau statistics show that fewer Americans are uprooting. And when they do move, they're favoring D.C., Alaska and Texas.

U.S. residents are leaving two sunny states in droves and heading to unexpected places...

Don't mess with Texas

In terms of net migration -- those moving in minus those leaving -- Texas was the star performer in 2008, with the population growing by 140,000.

That meshes with what moving company Allied Van Lines experienced. "We moved more people here than anywhere in the U.S. in the last several years," said David King, general manager of Berger Transfer and Storage in Houston, Texas, and Allied Van Lines' largest booking and hauling agent.

The moving company recorded 5,891 inbound shipments and 3,988 outbound shipments in 2008, a net gain of 1,903. That was just slightly lower than last year's net gain of 2,041.

That influx may be due to the state's employment picture, which has remained rosier than most other places thanks to the energy industry and a welcoming business climate. Plus, home prices never cycled through a boom-bust period: They've remained affordable, which facilitates mobility.

In contrast, battered Michigan, with its housing and job woes, was the least-popular place to move to. The state experienced a net loss of 109,000 people, or 1.1%, in 2008, according to the Census. Allied said its outbound shipments totaled 2,388, more than double its inbound shipments of 1,181.

New York State lost even more people than Michigan -- 126,000 people -- but because it has a larger population to begin with, the percentage drop is just 0.7%, almost identical to New Jersey's.

To read the entire article please click <HERE>...

Record Low Interest Rates Entice Homebuyers

You don’t have to be an expert in economics to know that as interest rates drop, mortgage applications rise. Add the lowest mortgage rates in recorded history, and lenders are working double time to meet the demand.

Freddie Mac Interim CEO John Koskinen predicts that mortgage rates, which are holding in the mid to upper 4 percent range, are “probably as good as it’s going to get” and “interest rates are probably close to bottoming out.” The government sponsored mortgage investment company is recommending that people buy now.

While much of the current loan activity centers around refinancing, the low rates also are attracting homebuyers into the market. Many of those include first-time buyers who are also enticed by the new $8,000 tax credit.

Record-low mortgage rates, great pricing and the new tax credit have combined to push consumer buying power through the roof but how long it will last is anyone’s guess.

Simply put, the lower the mortgage interest rate, the more home a buyer can afford to purchase. For example, a monthly payment on a $250,000 mortgage would be roughly $1,200, assuming a 5 percent down payment and a 30-year loan at 4.5 percent. However, if the interest rate goes up to 6.25 (which it was in November 2008) that same $1,200 mortgage payment would apply to a home valued at just $205,000—a $45,000 reduction in buying power.

In deciding how much home you can afford, experts recommend that first-time homebuyers, and even seasoned homeowners, follow some practical “old school” advice.

Most mortgage counselors or financial advisors suggest using the 28/36 rule. This basically means that your monthly housing expenses like the mortgage, insurance and property taxes should be no more than 28 percent of your gross monthly income. And, all your debt combined should account for no more than 36 percent of your gross income.

Depending on your circumstances, there may be some flexibility in easing the 28/36 rule, like including a co-signer on the mortgage or making a large down payment.

If you or anyone you know is interested in buying a home please give either Cheryl or me a call or send us an email at Cheryl@CherylOHagan.com or Dennis@DennisOHagan.com and we will be happy to help.

Investment Properties

Investment properties are also known as Non Owner Occupied.  Here are some defining rules as it relates to Investment Properties:

• Property can be rented
• Family member sometimes occupy the property
• Is not eligible for the homestead exemption
• Must do a Conventional loan with at least 20% down
• Must have strong cash reserves remaining after loan closes
• Must count full payment and cannot offset with a new lease
• Rate is higher than owner occupied
• Seller contribution ia maximum of 2% of sales price

This information was provided to me by Fay Hendon of Service First Mortgage.  Service First Mortgage is located at 175 Ridge Road, Ste. 600 in McKinney, TX  75070,  You can call her at 972-562-0096 or email her at Fay.Hendon@servicefirstmtg.com.

Dallas is the best market for Real Estate investing

HomeVestors of America Inc., a company that trains local franchisees to buy homes and repair them, named Dallas the top real estate market for investing in the third quarter.

Dallas-based HomeVestors of America is known primarily by its marketing slogan, “We Buy Ugly Houses.”

In the company’s listing of top real estate investing markets, Dallas is followed by Houston and Fort Worth, which rank second and third, respectively.

HomeVestors purchased more than 36,000 homes in the U.S. last year. Data collected in their housing markets contributed to the report and determined the cities rankings.

HomeVestors says with tighter lending conditions and a shaky economy hurting homeowners, franchisees are seeing more homeowners who are determined to accept cash to off load their properties.

Other markets ranked in the top 10 locations for real estate investing include: Atlanta (No. 4); San Antonio (No. 5); Denver (No. 6); St. Louis (No. 7); Philadelphia (No. 8); Milwaukee (No. 9); and Richmond (No. 10).

Investing in Real Estate

As with all investments, real estate investment has it own risks and the decision to invest should be carefully considered. As a landlord there are certain costs that you will need to cover, potential vacancy problems that may strain your ability to pay your mortgages, and liability issues. It is important that you speak with an expert before putting yourself in a situation where you can potential over-extend yourself.

Single-family residence. First time real estate investors are usually advised to buy a single family detached home and rent it out as it's market value appreciates. The reason for the popularity is that they are relatively easy. They are easy to buy, easy to finance, and they hold appeal to buyers and renters.

Vacation property and second homes. Investment options in this category are myriad, from outright purchase to fractional-interest contracts and timeshares. Even if the property isn't income producing, it can appreciate into a worthy investment, and mortgage interest is fully deductible.

Apartment properties. Apartment properties require a long-term commitment, as well as a substantial investment of borrowed and equity capital, but due to the availability of professional managers they often don't demand a lot of personal time. If you are the do-it yourself type then you might find yourself spending your weekends painting, advertising vacancies, and repairing faucets - though the higher return might be worth it for you.

Condominiums. Condominium investments provide a bit of extra risk. Their market value appreciates more slowly than for detached single-family residences, and rental rates usually aren't high enough to cover mortgage, property tax, and maintenance fees.

Commercial property. To reduce personal liability and offset the greater expense of these properties, some investors form or join a limited liability company. Because of the extremely high risks involved with this type of agreement, consulting a real estate attorney is essential before taking this step.