How to Find and Evaluate The Best Duplex Properties For Sale

Are you looking for a duplex?

That’s a good idea because historically, these are some of the best long term real estate investments you can make.

Knowing how to locate, evaluate and acquire them is the trick.

Locate – Let’s start with how to locate them. Once you determine the areas you are interested in, you should begin searching a comprehensive database of listed and unlisted duplexes for sale (see below). This will be more effective than just searching duplex for sale or duplexes for sale.

It’s important that this database includes as much information on all available and recently sold properties as possible. You need to see all the information, including photos, rental income, operating expenses, property condition descriptions, Broker/Owner comments, etc.

Evaluate – First of all, you need to determine your own criteria for purchasing. What are your looking for? Most buyers/investors are looking for a combination of location, property condition, income potential, etc.

Now it’s time to evaluate the available properties in your area. Make sure to take your time so you can figure out which ones look like the best opportunities, based on location, property condition, rental income (actual vs. current market) and operating expenses.

Tip – ask for information on current market rents – with rents rapidly increasing in the last 5 years, many income properties will show rents that are well under market. Make sure to consider rent control laws that may limit the amount these current rents can be increased.

Also, make sure to search for recent sales in the area as well. Once you have an idea of what the market looks like, you will be able to quickly determine if new listings meet your criteria.

Now that you know the asking prices, income and expenses, it’s time to start crunching the numbers. Determine how much of a down payment will you need in addition to what the monthly expenses will be including your mortgage payment (principal and interest), property taxes, insurance and other operating expenses.

Getting Pre-Approved for a mortgage in the beginning of this process is always the best idea. You will know the price range you can afford, be able to evaluate properties better and make offers on the ones you are interested in.

Acquire – Now it’s time to make your move. You’ve found some duplex properties that you are interested, and your loan is Pre-Approved so you know what the initial capital requirements and ongoing monthly expenses will be.

I know you are thinking that it all seems like a lot of work. It’s really not if you start with getting Pre-Approved, then gain access to the information you need along with an experienced Broker to navigate you through it all.

The good news is that we can help you with all of it. Since 1991, we have helped thousands of Southern California families and investors, purchase, sell and finance their properties.

So what are you waiting for? Are you ready to get started?

Start Searching here. Get Pre-Approved here.

Duplex for Sale
Brian Bush, Broker
Office: 310-817-6410 x220 | Direct: 310-293-8095

Please contact us by completing the form or call: 310-817-6410.

Three Big Improvements to Rental Property Loans

If you are a real estate investor, you probably know that good rental property loans can be difficult to obtain.

Banks and other lenders typically see these as riskier loans so they create tighter guidelines to minimize their risk.

If you look at historical loan default and foreclosure data, it suggests that rental property loans are more likely to become delinquent when times are tough than are owner occupied property loans.

Rental Property LoansNew Less Restrictive Guidelines

Even though the large banks are still very cautious to make rental property loans, there are now several large national mortgage banks with new, more flexible guidelines in the following three areas:

Higher Loan-To-Values – smaller down payments and less equity required

Until recently, to get a decent loan when purchasing a rental property, you would be required to put 25-30% down or have that amount of equity when refinancing.

New programs allow 10% down, and in some cases, less when refinancing.

Cash Out – less restrictions on LTV, amounts and use

For investors looking to take cash out of an existing rental property, now is the time. The amounts allowed and terms available are much better than in recent years.

Getting more of your equity out and a larger amount of cash is now possible.

Lower Credit Scores – required score lowered by 100 points, or more.

Just recently, new programs have been released allowing credit scores as low as 620 on rental property loans (even lower in some cases). The old credit score minimum was 720 for “prime” market loans.

Other Improvements

These new rental property loan programs also offer:

  • Larger Loan Amounts – jumbo loan amounts
  • Fixed Rate Options – low cost fixed rate options
  • No Pre-Payment Penalties – no penalties for early pay off

If you are looking to purchase an investment property or lower your payments to improve cash flow on an existing property, consider using these new programs.

With rents on the rise, and very low interest rates, isn’t it time to maximize your returns?

We work directly with the large national wholesale banks that are offering these programs.

Are you ready to see what these new rental property loans can do for you?

Duplex for Sale
Brian Bush
Office: 310-817-6410 x220 | Direct: 310-601-1997

What You Need to Know About Stated Income Loans

Stated income loans were very popular before the meltdown. Of course, as all things come and go, they are making their way back into the marketplace. Many blamed the financial crisis on lending institutions and their lack of concern and desire to document a borrower’s ability to repay a loan.

Today, stated income loans are available for investment properties, partly because these loans do not fall under the same amount of regulation as do owner-occupied residential loans.

Here are three things to note if you are considering using a stated income loan program:

1. Who is allowed to apply under a stated income program? These loans were originally intended for the self-employed who often don’t claim all of their gross earnings or have less actual business expenses than they report on their tax returns. Some stated programs will allow employed borrowers.

2. Will the amount stated as income on the application be verified? Some lenders will require a 4506T form which is a request to order a transcript from the IRS. This transcript shows the line item amounts for each schedule filed with previous year’s tax returns. The 4506T can be ordered by the lender and reviewed before funding the loan. They will look to see if the stated amount of income on the application is reasonable as compared to previous year’s tax return filings as shown on the transcript. Not all stated income loan programs require this.

3. Are bank statements allowed to determine qualifying income? Yes, these programs are a good alternative for business owners that would rather not provide their tax returns and want to avoid the risk of stating an amount of income on an application that may not be verified by an IRS transcript. Lenders will usually review the most recent consecutive 12 months of statements and determine the applicant’s personal income by calculating the gross deposits minus some percentage for expenses.

As always, be careful when applying for a stated income loan and make sure to discuss the pros and cons with your Loan Officer first.

So what are you waiting for? Are you ready to get started?

Duplex for Sale
Brian Bush, Broker
Office: 310-817-6410 x220 | Direct: 310-601-1997