Home Buying in 95403>Question Details

Rebecca Alth…, Home Buyer in Pacific Beach, San D...

Looking to invest in property in Santa Rosa, under $300. What should my first steps be? Should I get preapproved for a loan, get a realtor?

Asked by Rebecca Althoff, Pacific Beach, San Diego, CA Wed Feb 23, 2011

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11
Hello there.

I see you are investing. Yes, you will need to get preapproved first and then find the right agent. You will also need a great property manager who knows the area, one that creates value for the owner and will put your mind at ease and oversee tenants.

Whether it is a single family home, a multiplex, a larger apartment building or commercial purchase. the important aspect is looking at what your goal is. Do you want a single family home to rent to possibly retire in someday? Are you looking for an investment like a duplex where you can rent one or more units or are you looking for a property that is going to give you a larger return.

I'm easy to talk to and can give you a few tips being an owner and investor and property manager myself.

Best,

Donna Nordby
W Real Estate and W Property Management
Director of Management and Leasing
500 Bicentennial Way Suite 300
Santa Rosa, CA 95403donnan@wrealestate.net
0 votes Thank Flag Link Tue Nov 27, 2012
Hi Rebecca! You didn't say whether you are planning on relocating the future or what your plan is, but it makes a big difference what type of property you're interested in, whether fixers, foreclosures, rentals, etc., as the types of loans can vary depending on whether the home will qualify for certain loans. So really, I would recommend that you find an agent first to get an idea of your goals and they may be able to recommend a few lenders or brokers that can best meet your specific needs.
0 votes Thank Flag Link Mon Aug 1, 2011
Hello Rebecca,

Short answer, Get preapproved first. Good luck!
0 votes Thank Flag Link Sat Feb 26, 2011
Rebecca, some good answers but awfully long - start with the loan. Why do all that work only to find out you can't get approved? Or you find out it takes more money than you can part with? Or the payments are higher than you thought?
0 votes Thank Flag Link Wed Feb 23, 2011
My questions to you would include: why santa rosa? why 300k? what are you really trying to accomplish by investing in real estate instead of something else? Are you after cash flow or gain, or both? Check out the Investing section in my website. We regularly help investors figure out what they really want, and then guide them to achieving that. Don't hesitate to ask any questions that pop into your mind. cj cjholmes@cjholmes.com
Web Reference: http://www.cjholmes.com
0 votes Thank Flag Link Wed Feb 23, 2011
I really think that John has given a great answer to your question Rebecca. Assuming that you have taken these steps, then the other answers apply equally well.
You are not ready to start that search for an investment, until you are first pre-approved, hopefully with a local Sonoma County lender; someone you can sit down with and talk to in person. Then you are ready to talk to a Realtor who can listen to the strategy you have decided on, and find the property that meets those requirements.
Best of luck, feel free to contact any of us directly for more information!
0 votes Thank Flag Link Wed Feb 23, 2011
Don't talk to a mortgage guy or real estate agent until you do two things first:
1. Meet with a financial planner to determine how investing in real estate will affect your global financial situation. Consider how this type of investment could influence your income, financial risk, tax situation, retirement plans, etc.
2. Get educated and get a mentor. You need to know just as much or more about real estate investment than the agent you use to buy property. Your mentor should be someone who knows the business, such as an experienced fellow investor, retired agent, or an agent who is willing to share with you but WILL NOT BE INVOLVED IN YOUR TRANSACTIONS (that would be a conflict of interest). A good mentor will show you how to develop investment strategies appropriate for your circumstances, create a business plan, screen properties, and assemble a trusted team (agent, lender, inspectors, maintenance crew, etc.).
Real estate investment isn't rocket surgery, but it's complicated, so do all you can to prepare before you put your hard-earned money on the line.
0 votes Thank Flag Link Wed Feb 23, 2011
Get pre approved. There are a variety of loan programs for investors that will affect how much you need to put down. In Santa Rosa there is quite a bit of Homepath properties (fannie mae foreclosures) and for investors you may qualify to put down only 10%. Any strong realtor in sonoma county will want you preapproved before they start showing you houses. Let us know if we can help.
Jennifer Ready - jready@mmcdcorp.com
Web Reference: http://www.readybell.com
0 votes Thank Flag Link Wed Feb 23, 2011
Hi Rebecca:

Finding a Realtor® or getting your Pre-Approval first are interchangeable (the Realtor® can suggest a reliable mortgage Broker/Banker). The key point here is that you do not start looking for property until you obtain a Pre-Approval. Unless you are paying in CASH, looking at property without a Pre-Approval is a waste of everyone's time.

In the Real Estate industry the terms Pre-Qualification and Pre-Approval are used interchangeably to mean the same thing - they are not. Please review the following to understand the difference: http://www.Steven-Anthony.com/GettingStarted (speaks to getting a "True Pre-Approval"). Retail Lenders (Wells/BofA/etc) RARELY provide a True Pre-Approval; only Mortgage Broker/Bankers typically take the extra step to obtain an automated underwriting system approval, which puts you at an advantage over other offers that do not have this.

These links should also give you a good understanding of the financing process:
http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf
http://docs.Steven-Anthony.com/SAR-HowMortgageRatesAreDeterm…

There’s an issue for the Buyer who moves forward with making an offer without fully vetting financial capacity: There are three primary contingencies that allow contract cancellation without the loss of the Buyer's deposit money; however, the cost for inspections and appraisals is a "sunk cost." This means the Buyer expends about $1,000 (Appraisal, Home, Pest, Chimney, etc.) that does not get reimbursed if they find out they can't afford the home or a debt/income "surprise" is later uncovered via the Lender’s Prior-to-Doc (loan docs) or Prior-to-Funding requests.

Best, Steve
0 votes Thank Flag Link Wed Feb 23, 2011
Good question! Honestly both steps are very important. I would say getting pre-approved for your loan is slightly more important as you need this to be able to move quickly when circumstances call for it, and also greatly increase the credibility of any offers you make. In addition, it might uncover problems with your credit you weren't aware existed (bad data in your credit file, etc) and give you time to clean it up before you are trying to submit offers. That all being said, establishing a relationship with a reliable Realtor is important as well. I can often help people get pre-approved for their loans because I know and work with mortgage brokers all the time and can refer you to reliable people who can work quickly and get you the best deals. So you can see, both steps are important but getting pre-approved is a must in this market unless you are going to make all cash offers. Good Luck!
0 votes Thank Flag Link Wed Feb 23, 2011
Hello Rebecca,

That is a great question! Any successful, good, realtor probably won't even talk to you unless you are pre approved for a mortgage. Otherwise it is almost a waste of their time. With that said, even if you found a realtor to work with, no selling agent will even accept your offer without a pre approval as well. So to answer your question, you should take the time to get pre approved. We would be happy to take care of that for you here at Residential Finance Corp. We are a national direct lender with exceptional rates and even better service. We close loans on average, 19 days from start to finish and can close in as little as 10 days. Feel free to contact me to get you in touch with one of our Senior Loan Officers licensed in your State.

Joshua A. Lerette
Residential Finance Corp
800-930-7334 ext. 1108
josh.lerette@myrfc.com
0 votes Thank Flag Link Wed Feb 23, 2011
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