Home Partners of America

The problem the business is here to solve:  Fannie Mae requires a 4 year seasoning period since last bankruptcy;  FHA requires a 3 year seasoning period since Short Sale; and Freddie Mac doesn’t even tell you how long you need to wait (guidelines state “Determined by [automated underwriting system]”…which basically means, wait a while, then maybe you’ll get approved.  The problem isn’t necessarily that there are seasoning requirements between buying a home and major credit hits, the problem is that by the time these seasoning requirements are met, home prices are drastically different in some metropolitan areas to the point where those homebuyers now can’t afford to buy anything, and become stuck in rental purgatory.   For example, in the last two years alone, home prices in Seattle have risen 42.5% (from July 2014 to July 2016).  A would-be homebuyer is drastically behind the curve if they are forced to wait on the sidelines to meet mortgage seasoning requirements while the housing market passes them by.    

The solution:  Home Partners of America.  What HPA does is essentially buy the house upfront, then lease it back to the clients for up to 5 years.  They guarantee rent won’t rise more than 3.75% annually, and over the course of those five years, the tenant can buy the house for a pre-set price which slightly increases annually – in Seattle it’s 5% per year.  That 5% appreciation rate is a FAR cry from what housing is actually appreciating at here in Seattle, but yet it’s also a high enough return given the risk that it makes a business like this viable, and attractive to investors. 

Home Partners has grown incredibly fast over the last few years mainly due to its ethics.  It’s a straight forward lease to own business that doesn’t take advantage of clients like some other companies in this industry have done in the past.  The company now operates in 38 markets across the nation, and owns around 5,000 houses (about 250 in Seattle).  It might be the best option for someone waiting to meet their seasoning requirement before they can be approved for a mortgage, but it’s definitely one worth knowing about.  Read more about HPA here:  http://www.bizjournals.com/seattle/news/2016/08/23/ex-goldman-sachs-execs-new-company-helps-kent.html

Happy Investing!

Today's blog courtesy of Kyle Bergquist, Guild Mortgage

Rent to Own

From Craigslist:

Hi, I am seeking seller financing for a home in West Seattle. Currently rent, tired of renting, newly divorced, so I won't have the 3.5% down saved for a long time! Desperately want to own a home again. Looking for someone who can offer me rent to buy option. Looking for payments no more than $1200.00 a month. My lease is due in Spring, I can put some funds down, but probably about $2000 if that works. Willing to sign a recorded contract and forfeit any deposit and all paid rent towards purchase in event of default (won't happen). Rent is very expensive so that is also why I want to buy. I'll even pay (finance $5,000) above your homes asking price in order to obtain financing, then can use down payment of rent in order to refinance home in my name (purchase is done as a refi if recorded and owned for a few years and contract needs to be added to title). I'm a mortgage professional, so that's why I know how to do this and am asking. Maybe you are a landlord and want to sell one of your properties, or just need to rent out your home and can sell it later. Anyways, serious offers only, I'll provide my personal info for credit check through an attorney of your choosing, or other professional who can write contract (real estate agent). Not a joke-just a desperate buyer who can't afford damn down payment banks want, tired of flushing my money in toilet with rent. Hope to hear from someone soon. Thank you.

Seller financing used to be more common than it is today, and it was a way to help buyers like this one prepare to buy a home and for sellers to sell quickly and easily for more money.

Rents are going up in Seattle, and tenant/buyers like this one are tired of wasting their precious resources on renting. Seattle is a great appreciation market, and housing prices have appreciated rapidly in this city since 2008. Now prices to purchase even modest homes outstrip most people's ability to purchase a home, even a small one.

I have no idea whether this particular buyer was successful in his efforts to secure seller financing. I am always on the search for seller financing, both for myself and for my investor clients. Seller financing gives buyers the opportunity to get into a property at a reasonable fair market price with affordable monthly payments. 

For the seller, it means they can often negotiate a higher price, avoid many of the costs and hassles of listing with an agent on the NWMLS, have a larger pool of potential buyers, and ultimately make more money.

Seller financing, rent to own, lease to own and other options are examples of owner financing, without going through an institutional lender.

If you are interested in learning more about seller financing, please message me privately at HomeLandInvestment@gmail.com or leave a message on this blog post.

Happy Investing!

 

Rent to Own?

So your house did not sell?

I notice your property has not sold and is listed for rent. I am curious if you just want to rent ONLY?

Or would you be interested in some of my qualified tenant buyers who are looking to rent now but want to purchase the home in 1 to 3 years?

We also have buyers with a lot more cash looking to get owner financing based on your terms.

We have a lot of people like married couples, single moms and dads who have nice chunks of cash and have good paying jobs that will pay you full price for your house. However dings on their credit in the past has put them
in the situation where they are not the banks " perfect customer."
 
We are working with them to get their credit cleared up and to get them into homes they can realistically afford, so that they can rent now and then purchase them in 1 to 3 years.

No cost to you the homeowner, our fees are paid by the tenant/buyer.

Are you interested or would you consider it?

If you are, send your contact info and I will give you a call so we can move forward.

I am always open to "rent to own" options.

Happy Investing!