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July Market Update

    Summer is upon us with all that it has to offer! Most of us would rather be experiencing summer activities rather then the reality of dealing with health, work, money , family etc.. That being said, the stock market continues to churn higher to record levels along with real estate values. Interest rates seem to have found a middle ground waiting for the Federal Reserve decision….What appears to be the driving force with the direction of rates is coming from Germany. Their rates have risen quite a bit and now seem to be leading the interest rate complex to higher levels. We will see what our Federal Reserve Board determines soon.

Our recommendation as it relates to the mortgage arena, is to allow Centek to evaluate your existing mortgage profile and analyze any programs that might be better suited for one’s overall financial strategy – reducing the amortization of one’s current loan, changing from an adjustable rate mortgage to a fixed rate or conversely changing from a fixed rate mortgage to an adjustable rate program. Mortgage rates have dipped below 4% and if rates continue down this path, our steadfast philosophy is to have one’s loan package in and ready to go in order to best take advantage of any further rate decline. If we start the process further down the line, we might not be able to catch the window of opportunity. Another segment of the financing arena which we are experiencing more and more issues with, is the student loan situation. Many of our younger clients are having difficulty qualifying for their first home loan because of the student debt load (even if deferred). Our suggestion to many clients is, if possible, to assist with their children’s home purchase by either co-signing on the loan for them or refinancing their home’s in order to pull out cash to pay off the student loans. These are difficult decisions for all parties on a multitude of fronts, but certainly worth considering.

In regard to the real estate market, we feel the most prevalent issue is with the lack of inventory for sale. This lack of inventory is due to several interrelated factors that we have not experienced in the recent past. The escalation of property prices in our California market (especially our So Cal & Bay areas),the vibrant California economy & the increases in the stock market in addition to the inherited wealth effect. The combination of these and other factors including the demand from foreign investors, has limited the number of available properties on the market. The flip side to this equation is where is the seller of the property is going to move to? This concept is a major reason as to why more properties are not for sale. Where does one move when they sell their home? This is a problem and a major reason why with elevated home values, more properties are not on the market. Many move up buyers have constraints in selling their existing house and being able to afford the next level up in price….This by no means applies to everyone, but is a major point in the overall real estate market place.

 

Please feel free to contact us to discuss your financing or overall real estate acquisition or sales needs. We can review and strategize with you. Stay tuned!

Best Regards,
Gloria Shulman & Curtis Cohen

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Spring Info

Want to share our latest information that went out to our CPA’s, Attorneys, and our extensive client base. In our complex real estate world it seems to take all of our joint efforts for a successful close. As you know we are experts with the most complex transactions and also welcome your “smallest vanilla type borrower” to the most sophisticated profile.
We know you are focused intensely on your clients’ tax filings and want to reach out and review some compelling trends and opportunities in our current real estate finance market that may be relevant to your clients’ real estate portfolio.

  • We are experts with Commercial/SBA/Apartment/Industrial/Construction transactions of all sizes and types. We offer complete acquisition and development packages.
  • Consider changing a 30 year fixed into a 15 or 20 year program up to $636,150.
  • Many equity lines are reaching their 10 year term and will roll into an annual ARM payment based on 15 year amortization. (This comes as a surprise to many clients due to the increased payment even though the terms were clearly stated in the documents).
  • Refinance’s combing existing 1st and existing equity lines into a new 1st trust deed. We are then providing an equity line at close for no charge (Which many clients seem to like just sitting if ever needed).
  • Review the time horizon for holding a property:
  • Why not consider a 5, 7 or 10 year fixed when less than a long term hold: various life circumstances such as family expansion, potential relocation, retirement, extensive remodeling are in the short term time horizon. Obviously the rate differential is a good saving mechanism.
  • Student Loans: The rates for financial aid for college loans seem to have a very broad range. Taking cash out of one’s property warrants consideration. $200K-$300K in student loans is no longer unusual.
  • Real Estate values are up in every sector and remodeling costs are significantly increasing due to demand.  Usually the most economic vehicle is to pull cash out from the property prior to work commencing.
  • Investments for long term financial planning are increasingly popular.  Initial cash flow is rarely possible but the overall objective is that these properties eventually turn into an excellent asset.  Caution, some clients are reaching out too much and are going into rural areas around the country without knowing what they are doing.  They’re motivated by cash flow but we all have “war stories”.
  • Non Occupant Co-Borrower concept offers great flexibility in helping one buying their first home or buying up etc. This is an excellent opportunity for many at all price points.

These are a few current thoughts we wanted to share.  Know how busy you are, but we are always available to run any “What-If” scenarios etc.  We are experts with the most complex of tax returns and have a very broad range of real estate and financial expertise at all price points and classes of real estate. Once again we welcome your contact.
Gloria Shulman, Curtis Cohen & all of us at CenTek

  • RATES ARE STILL VERY ATTRACTIVE
  • FOR YOUR RETIRED CLIENTS: SPECIAL PROGRAMS AVAILABLE!
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Happy New Year

First and foremost, a happy and healthy new year to everyone!!  Already seems like this is old news!!  Speaking of news, today’s  labor report was right down the middle of the road…not too hot, not too cold.   Since the election of Donald Trump, there has been a divergence between the stock and bond markets.  Equity prices have zoomed upward with the 20,000 Dow Jones Industrial Average in its sights, while the bond market has seen rates increase by over 60 basis points.  The equity markets have priced in to the equation a rosier economic picture with the combination of lower taxes and less regulation which will lead to better corporate earnings and the subsequent higher stock market.  The flip side has seen interest rates spike to levels not seen in the past few years because of the perceived notion that economic policy is changing from a monetary perspective to a fiscal one.  This in turn will create a landscape where the Federal Reserve will have less ability to shape policy and have to react more to the policies implemented by the new Trump administration.  What all of this means, remains to be seen…..
In regard to the mortgage arena, rates have risen dramatically over the past two months.  30 year fixed rate loans that were in the low to mid 3% range, have now risen to the low 4% area.  While trying to keep this in a 20-30 year perspective, rates are still historically low, but we all get spoiled and want the rates to stay well below any historic average.  The real estate market has stayed extremely buoyant and prices remain at elevated levels at all price points.  This can be said for the rental market as well.  Low inventory and the relative low mortgage rates are still the driving factor for this demand.  In addition, foreign investment remains strong.  On the commercial front, activity remains robust with many clients seeking to purchase properties for their own use versus paying rent to a landlord.
The mortgage market still has rigid underwriting guidelines, but we have a number of non-traditional loan options offered by a number of institutions that mirror prime/traditional pricing.  Some of the highlights are using only 1 year of tax returns versus the traditional 2 years, 12 month’s bank statements in lieu of tax returns & the use of liquid assets as a source of income.  All of these can make or break being able to obtain financing.  In addition, a number of our sources allow for recent short sales or foreclosures.  No need to wait four to seven years to purchase a new home.  Needless to say, we of course have a complete menu of traditional mortgage options, including interest only loans & a wide variety of investment property loan options.
We all look forward to a healthy & prosperous 2017 for each and every one of us!!  Please feel free to reach out to us to discuss any real estate situation.  We welcome your contact.
Warm regards,
Gloria Shulman and Curtis Cohen
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Our Latest Corespondence

Good Morning ,
Just reaching out….we haven’t spoken in a bit and hope all is well with you and yours. As we all know, rates have moved up, but the purchase volume appears to be holding across all price points in our Southern California. With that said, if a property was priced unrealistically based upon comparables, condition of the property etc, the price will have to probably be reduced before it sells. Regarding refinances, even though the rates have definitely moved up, they are still very appealing and can make economic sense based on projected holding period for the property, cash out for remodeling instead of using liquidity, and so many other life events that may need cash infusion. An important overview is that real estate has many of the attributes of institutional savings. There is increasing “talk” about a stronger economy with inflationary pressure, which in most cases extrapolates to hedging one’s finances by buying hard assets such as real estate and investment properties, obviously no one knows… stay tuned.
Wishing you and yours Happy Holidays and a wonderful 2017 full of joy and happiness.
Personal Regards,
Gloria & Curtis
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michael No Comments

Important Purchase Tips

A few general concepts to help you prevail with your potential offer.  Please contact us and we will strategize together how to submit an offer as it relates to financing, based on our extensive experiences. The market is requiring aggressive posturing with multiple offers being so frequently at play and the current competition being so intense.

Important concepts to consider for purchases:

  • Loan package must be fully ready to issue disclosures when there is finally an open escrow.
  • 30 day closes are possible with many transactions.
  • We can issue DU (direct underwriting) approval upfront for many programs (which means you are officially approved for the loan).
  • Another common technique is to cut an appraisal contingency down to 5 days.
  • Never waive an inspection contingency.
  • With condos, the listing agent should provide contact HOA phone numbers at the opening of escrow (Naturally your agent would have vetted the property pre your offer).

A few random thoughts to help you get to the escrow level:

  • Waiving all conditions ASAP.
  • Release of the deposit– if money is needed by the seller and you are approved.
  • Offer a 30 day lease back if the seller does not have a new property for the relocation.

These are just a few important thoughts to proceed with a successful purchase.

michael No Comments

November 17th Market Update

The language at the Fed meeting this morning references improvements across the board in the overall economy, although the comment was made ‘they’ could be more robust. The takeaway factor was the expectaion of inflation. Historically this inflation language triggers many to buy real estate as a hedge.

Extreme Market volatility with the bond markets— which is the driver with interest rates. No one expected rates to be jumping the way we are experiencing but the election triggered this chaos. Long term, the issue is the Fed’s decision with interest rates. In reality, the feeling is that one rate hike should be enough to return the policy to neutral and December seems to be the target. It is proposed that we will see medium term growth in the economy due to Trump’s infrastructure spending…

Stay tuned!

November 17, 2016