Recession Delays

The recession can cause people to put off the things causing delays. The down turn (recession) is changing the way we live and it always happens. More people put off getting married and home purchases. Many who were going to relocate to a new area do not. We are uncertain or keenly certain of the way the recession will cause us delays. Lines of credit are and have been frozen and therefore, we do not tap into them and do fun things purchase thing we want so we put them off.



There is no way that the recession does not have some kind of an effect upon each and every one of us. Job loss or the potential of a loss, salary cuts, and/or lower income can lead to tension within the family and the community. The insecurity of the business climate but the community on edge.



Fewer people are driving their car alone, 75 percent fewer people drove alone to work and 22 states had declines in solo drivers compared to a year before. Now that is a change due to the recession.



Now for some good news private forecast of economic activity rose in August for the fifth straight month, the latest sign the recession has ended.



So we can go back to what we like to do or carry the good habits forward but we can choose to do things that the caused recession delays.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

www.markandtim.com

949-282-2521

Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Here Comes The Mortgage Increases

Here comes the begining of the increases in mortgage rates. Don't look now but the Fed is not going to support lower interest rates. On Wednesday the Federal Reserve said it was slowing the pace of a program to lower mortgage rate and prop up the housing market.



The Fed decided to stretch out its goal of buying $1.45 trillion in mortgage backed securities. Fannie Mae, Freddie Mac and Ginnie Mae until the end of the first quarter of 2010. The Fed Chairman Ben Bernanke and his colleagues believe the recovery is here.



The Fed must control inflation. There for the believe that they must pull back and that will cause the mortgage rate increases so here it comes. When the interest rates increase they do so at a rapid rate and they tend to fly up. So now before we actually start to climb up is the time for sellers to sell and buyers to buy.



The good news is that the Fed did hold the target range for its key bank lending rate of between 0 and 0.25%. So my conclusion over all is HERE COMES THE MORTGAGE RATE INCREASES.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

www.markandtim.com

949-282-2521

How Are Businesses Doing During the Recession in Orange County, CA

You have to ask yourself how businesses are doing during the recession in Orange County, CA. There are plenty of indications out there as you walk or ride around the county. Foreclosures, unemployment and bankruptcies were the all to familiar results of the economic turn down. Since the consumer's are fearful of the economic climate, they have become frugal. They fear being laid off or getting their home foreclosed on, or having pay cuts.




If you want to know how businesses are doing in Orange County, CA.we should look at the restaurants. They report that the number of folks coming to eat has drooped since late 2007. It got worse in 2008 as chains began closing stores because of the drop in sales. National Restaurant Association it has been 21 months of below average meals being served. Some local restaurants and or outlets failing during that period are Starbucks, KFC, Charo Chicken, and Black Angus to name a few.



Another place to look to see how businesses are doing in Orange County, CA would be small businesses. What we find is that many have lost their lines of credit or even get credit. This effects there ability to pay bills, expand, or just stay aflot.



Automotive sales were slipping until cash for clunkers off about 40%.



If we look at the retail business to see how businesses are doing in Orange County, CA it would not be good. A large number of retailers closed their stores and/orfiled for Chapter 11 bankruptcy protection, and several of those eventually went out of business.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

www.markandtim.com

949-282-2521

For Lease! Spacious 3 Bedroom Tri-Level - Remodeled & Upgraded!

Large Upgraded Tri-level with Greenbelt Views!

Fabulous Lease! Visual Tour at www.markandtim.com

Completely Remodeled and Upgraded

Spacious Tri-Level Town Home
Featuring 3 bedrooms, 2.5 bathrooms
1,800 sq. ft. (n/t) of living space
Newer Gourmet Kitchen with Newer Appliances
Beautiful Cocoa Hued Cabinetry
Granite Countertops and Designer Tile Floors
Bathrooms Recently Remodeled and Upgraded
Living Room with Gas Fireplace and Viewing Balcony
Formal Dining Room
Full Size Inside Laundry Room
New Heating and Air Conditioning Units
2 Great Patios and Lots of Windows Overlooking Greenbelt Views
2-car Garage
Award Winning School District and Convenient to Everything
Located near the prestigious Mission Viejo Country Club & Golf Course.

Proudly for Lease $2300 a month

The Elite Home Sales Team of Keller Williams
27101 Puerta Real, Suite 150, Mission Viejo, CA
949-282-2521
Ca.re lic. 00919781
Email Tim today:   tim@markandtim.com

Visual Tours at www.markandtim.com

Over 40 Years Experience Representing Home Owners

and Real Estate Investors in Orange County

Instant MLS Listings & "Free" Market Analysis

www.markandtim.com

 Tim Lorenz 

 Over 40 Years Experience Representing South Orange County Home Buyers,

Sellers, Investors and Relocations!

We Cannot Continue Without A Really Big Crash or Higher Taxes

Today as I was traveling to my office I heard a stock market gruru stating that there has been 8 times since the 1930s that we have had a better than 50% growth in stocks since 1930. He went on to say the data was gathered by Bloomberg. In the year after the 50% growth in all but one time the stock market grew 8% more. The one time was when we had a double dip in recession in the 1980s. Do you remember what happened then? It is very much like we are today.



We have runaway spending at the federal level higher than any time in our history. This is not a Democrat or Republican issue it is an economic issue. We need to have jobs to continue to grow and to buy things. Pretty basic. We need small business and big business making profit or they cannot hire more employees and invest in good and services.



Government jobs do not count. Yes, when the employee spends it is like the private sector buy the money that pays for a government worker is from taxes or fees the government gets from us. The private sector gets its money by selling a good or a service. Again pretty basic.



Our unemployment and underemployment is getting larger. These poor folks who are out of work or are making less and can't afford to spend on anything but basics. If they can't pay there credit cards or the payments on there homes then the banks lose money. Thus the bail out from government (our money) raised through taxes. If they are out of work many of these people are receiving unemployment. Money from the government. Very basic. If we continue to lose jobs because fewer and fewer people have any money to spend. Then businesses go under and again few and fewer jobs. If we try to save the job situation by creating government jobs again it will be from taxes and fees. They must go up.



Now over lay on that situation a new cap and trade bill that everyone states is another tax on businesses especially on small business that creates somewhere between 65% - 90% of the jobs. If business has to spend money on the government while they are strapped for cash they must cut costs. One of the biggest costs to most businesses are employees. So, more job loss. Oh by the way cap and trade bill will also cost the consumer money in higher utility costs and each of the goods and services will have a higher cost due to the higher over head of every business.



Lets assume that the health care bill has at least some underestimate of cost to the businesses especially small business. Again they have to cut cost and that will translate to loss of jobs and even businesses closing. As the pool of people make money is reduced and fewer rich people are produced, Who will pay the tab. Government need more money to cover the new expensive plans. So we will all have to pay more taxes. Not a little more but an exceptional amount of money.



Now it is proven that as the tax rate goes up the government makes less money. I know that sounds rediculous but it has been shown to be true over and over again. So then what needs to be done?



We need more private sector jobs and we need State Governments and Federal Government to stop spending. At least stop adding to the negative spending. We are currently printing money at the federal level to help with the short fall. People do you understand that if we keep this up it will cost thousands of dollars to buy your groceries. Is anyone else concerned?



We definitely, from my perspective, are headed for a double dip recession or a depression.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Have You Ever Thought of Using Real Estate as a Vehicle For Retirement.

Have you ever though about how much you need to retire from work? Real Estate could make sense for a great retirement vehicle. Lets look at what you can do. If you can purchase a home at a low price and pay it off in 10 to 15 years or if you purchase the home cash. In our area, each home will bring in (assuming you purchase a low end home) $1800-2500 per month.




If you own 5 homes it will bring in $9000-12,500 per month. Now that is better than Social Security. There are a few thing you need to do. Have good credit if you are going to purchase a home with a loan. I would still carry 30 year financing but pay it off like a 10 or 15 year loan (calculate the payments you would make on a 10 or a 15 year loan and pay that). The reason for taking the longer term rather than the short term is if life delivers you a curve ball you did not see coming you can pay the lower 30 year payment. If you have a 10 or 15 year loan and some problem in life creates a financial hardship, the bank will now allow you to pay a lower payment. Usually, if a financial hardship does happen you cannot refinance either. So plan ahead.



Southern California does not have enough property to handle the influx of people that are going to need housing. Therefore, in the long term one can easily have a home to rent to those who need housing. I suggest single family homes, but duplexes to fourplexes are fine. I favor single family homes because they increase faster in an up market and if you need to sell one of your properties a single family home has a larger population of buyers. The positive for an investor with a multi-unit property is spreading the risk of vacancy. A vacancy will only be part of the income on the unit that is not coming in.



If you choose wisely in a market like we have now you can set yourself up for life. For more information contact me at www.markandtim.com Real Estate can be a great retirement vehicle.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

www.markandtim.com

(949)282-2521

Buying Investment Property With FHA Financing

It seems that very few realtors know that FHA financing can be used to purchase up to 4 units. Owner occupancy is required but the buyer can still buy the property with as little as a 3.5% down payment. Financing one and two units the minimum down payment is always 3.5%. With three and four units the loan amount is determined by the debt service.


When a buyer wants to purchase three or four units utilizing FHA financing the property must be self-sufficient. The maximum loan amount is limited so that the ratio of the monthly mortgage payment, divided by the monthly net rental income, does not exceed 100%. The buyer must have three months total payment in reserves and the reserves cannot be a gift.


Here is an example of how a buyer can purchase four units with FHA financing when the debt service is 100%.


Let's say your buyer want to buy four units for $650,000. A 3.5% down payment is $22,750 making the loan amount $627,500. This is fine as long as the net rental income from all four units can cover the total monthly payment, even though rent will be received only on three of the units because the buyer will occupy one.


At 5.00% interest rate the mortgage payment is $3,426. The mortgage insurance is $287. The taxes are $595 and insurance $100 totaling $4,408, PITI. Let's assume the average rent of each unit is $1,470 making the average net rental income from each unit $1,102. ($1,470 x.75% = $1,102) 25% is for the vacancy factor. Since $1,102 x 4 = $4,408 or 100% of the PITI then the buyer will need to have only 3.5% down payment and finance $627,500.


For qualifying the net rental income on three units is treated as income and is not subtracted from the mortgage payment. Since the PITI is $4,408 and FHA qualifies at a 45% ratio then the gross income to qualify is $9,795. ($4,408 / .45% = $9,795) Subtracting the net rental income of the three units from the gross income needed to qualify is what the buyer needs to make on a monthly basis assuming no additional debt. ($9,795 - $3,306 = $6,489) This is equivalent to an annual income of $77,868 the buyer should make to purchase the four units in this example.


Please don't hesitate to contact me with any additional questions you may have

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

949-282-2521

Beautifully Remodeled Coto De Caza Residence!

 31832 Via Coyote, Coto De Caza



Outstanding Views, Guard Gated Community


One-of-a-kind Custom, Craftsman Style Home


Located in Highly Desired “Village” Neighborhood


Uniquely Designed Around Center Atrium


3 Bedrooms and 3 Full Bathrooms


2,450 sq. ft. (n/t) of Living Space


Brick Hardscape Sidewalk and Oversized Patio


Charming, Cottage Garden Entry


Mountain Views From All Verandas Across Back of Home


Downstairs Master Suite with Custom Master Bath


Gleaming, Solid, Hardware Floors


Family Room Features Fireplace with Emerald Granite Surround


Formal Dining Room, Large Laundry Room


Custom Built-Ins, French Doors, 10’ Ceilings, Crown Moulding


Gourmet Chef’s Kitchen Features Emerald Granite Counters


Center Island with Cook Top and Wine Storage. Double Ovens


Glass Front Cabinets with Upgraded Hardware


2-Car Garage


Lush Mature Landscaping Around Entire Property


Large Lot boasts 6,000 sq. ft. (n/t)


Very Large and Private Backyard


Award Winning School District


No Mello Roos




Proudly Offered $729,500



Keller Wms. Agt. Tim Lorenz
949-282-2521
27101 Puerta Real, Suite 150, Mission Viejo, CA

tim@markandtim.com


Visual Tours at http://www.markandtim.com


Ca.re lic. 00919781

Over 40 Years Experience Representing Home Owners and

Real Estate Investors in Orange County!

Beautifully Remodeled Coto De Caza Residence!

Pending Home Sales Rise!

A few days ago in our local paper an article in the business section states that the Pending U.S. home sales rose in June for the 5th straight month. This statistic came from the National Assoc. of Realtors. It rose 3.6% from 91.3 to 94.6 from May to June. It has been 7 years since we have had 5 consecutive monthly gains.



These statistics were on written contracts to purchase a home and generally they do not turn into solds until the close of the sale a one the two month lag.



Price are low, interest rates are low and a first-time-home buyer incentive (tax credit) of up to $8,000 have all helped the market.



Here in South Orange County we have been reporting this up spike in sales with multiple offers on homes and condo's in the 300,000-600,000 price range. The biggest problem in our market will be the amount of jobless in the area.



These are all good signs of the market turning. The prices have not gone up but sales have increased in the area. This would include Mission Viejo, Aliso Viejo, Laguna Beach, Laguna Niguel, Laguna Hills, Dana Point, San Clemente, San Juan Capistrano, Ladera, Irvine, Newport Coast, Foot Hill Ranch, Portolla Hills, Lake Forest.



It is a perfect time to buy a home. If you need more information contact us. We would be glad to expand on the information.

One of the agents in my office asked me, "What do I do about the low appraisal?" What is happening is a feeding frenzy in our low price market. All of the comps were $380,000 and the price of the home was $410,000 and the highest offer of 6 was $426,000.



Well we all know that the appraisal will and did come in low so:

What do I do with the low appraisal?

Check your numbers and always meet the appraiser. Remember the first person willing to pay the price asked is the new buyer. Have good comps with you. In a lot of instances the law may not allow you to meet the appraiser. Then be ready to talk and show the comps to the lender if needed.

If there aren't any, "What do I do with the low apraisal?" If you have 1 accepted offer and 5 backup offers work the one you have accepted. Ask if they can bring in extra money to close the purchase. If not check with the backup people and see if any of them will be able to bring money to close the transaction.

What if I only have one offer? Negotiate, Negotiate! I hope you know how to negotiations should work. There are many possiblities among them is the buyer comes up with some of the money that is beyond the appraisal and the seller reduces the amount of the property to make up the difference. If it is an REO or a Short Sale see what the bank will do.

When the markets correct this is not an unusual problem at the point of the change. If properties are going up again after a month or two after enough properties get into the system the appraisers will be able to reflect the new market. Change can be a difficult situation.

Too Many Loan Modification Problems.

The Orange County Register had an article that discused loan modifications. The Attorney General was investigating the loan modification companies and stated so few had gone through he was considering baning them in the State of California. The difficulty he had stated was the fact that consumers paid up front fees and were even given guarantees that if the company was unable to do a loan modification they would give there money back. However, moneys were not returned and this area is ripe for even more fraud and loss to the consumer.




Short sales at least you have an oppertunity to sell the property and move on with your life. The seller will have less of a loss than having the foreclosure on their credit report. The short sale forgiveness of debt is also less than a foreclosure. If you are a seller please always check with your accountant and/or your attorney conserning your own personal tax liability.

Great Open Floor Plan & Model Perfect!

23 Mesquite, Wagon Wheel Community in Trabuco Canyon, CA


2 Bedroom, 1 Bathroom Condo

Located in the Dakota Tract of Wagon Wheel

900 sq. ft. (n/t) of Living Space

Living Room Features Gas Fireplace

Easy Care Tile Floors and Plush Carpet

Open Floor Plan Great For Entertaining

Mirrored Wardrobe Doors

Light, Bright and Airy – Lots of Windows

Bathroom has Shower/Tub

Eat-In Kitchen Features White Appliances and Tile Countertops

Sunny Dining Area Leads to Nice Patio

Lots of Storage Throughout

1 Car Attached Garage

Award Winning Capistrano Unified School District

Proudly Offered at $245,000

Keller Wms. Agt. Tim Lorenz


27101 Puerta Real, Suite 150, Mission Viejo, CA                     949-282-2521

email:               tim@markandtim.com

Visual Tour at  http://www.markandtim.com/                                                        

 Ca.re lic  00919781

Over 40 Years Experience Representing Home Owners and Real Estate Investors in Orange County!

Additional pictures can be seen at http://www.markandtim.com/