7 Tips for Foreclosure Property Investing

With foreclosures rising nationwide, prices falling, and inventories swelling to historic levels, investors with a discerning eye and knowledge of the foreclosure process can build a profitable portfolio of distressed properties, says James Saccacio, CEO of RealtyTrac, which tracks foreclosure data. Saccacio offers this basic advice to foreclosure investors:

1. Know your market. The most important tool in your real estate investing toolbox is knowledge of the area where you plan to invest.
2. Develop an appropriate investment strategy. Find an investment strategy that will work in your market, and then do what it takes to implement that strategy.
3. Make the foreclosure process work for you. Decide what foreclosure buying technique works best with your investment strategy and your strengths as a person.
4. Scrutinize each deal. Many real estate investors wrongly assume that if a home is in foreclosure it's a good deal.
5. Rely on a trustworthy team. You'll be in over your head if you try to do all the work involved in foreclosure investing on your own.
6. Network with banks and lenders. In a slow real estate market, banks and other lenders are saddled with larger inventories of foreclosed properties and will be more motivated to sell those properties at bargain prices.
7. Act quickly, but don't be in a hurry. A slow real estate market gives you the upper hand as a buyer, but you'll still need to act quickly to get the best deals.

— REALTOR® Magazine Online


Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Top 10 Reasons to Invest in Hawaii Real Estate

I was talking to my long time friend about the real estate market today and she got me thinking about all the great reasons why Hawaii is a prime location to invest in. No matter what the real estate market might look like at any given time, there’s no doubt that over the long haul, Hawaii real estate will always go up.

Why is that? Well, there’s really no new land that’s being created and the land that is being created is well…. Let’s just say that living on a lava field isn’t exactly a great idea. And since there’s no new land, supply is limited. Now, you know the whole deal about how supply and demand works, right?

So here it is! The top 10 reasons why investing in Hawaii Real Estate is a good idea. If you can think of others, feel free to add them to the list.

1. Given enough time, property values will always go up. There will always be an up and down cycle to any real estate market, but real estate values will never be what they were 30 years ago.

2. The Hawaii market always lags the continental counterpart.

3. Aside from inter-island travel, the longest one way trip you’ll ever make on an island is at most 100 miles. In fact, by traveling 100 miles, you could drive essentially around the perimeter of most of the islands. That’s good news for commuters!

4. No matter how far inland you are, you’re never really far from the beach.

5. Weather can vary significantly depending upon where you are on the island. One side of the island can be raining while the other side of the same island has practically no rain at all.

6. The farthest island is about 50 minutes away. Travel to another island within an hour.

7. You can live on one side of a high rise condo and have a spectacular view of both the mountains and the ocean.

8. The temperature difference between summer and winter is at most 40 degrees. Winter temperatures average in the low 60’s.

9. You can live in the tropics and still enjoy convenience stores and Starbucks.

10. You’re kids will think you’re the bomb if you ever gift your Hawaii estate to them!


Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Buyer Strategy: The Equity Trade-in Plan

Ever wonder how ordinary people can afford homes costing over half a million? These people aren’t pulling in a six figure income individually; they’re just regular folks, but they live in the some of the most prime locations such as Mililani Mauka, Downtown Honolulu, or even Hawaii Kai. Just how do they do it?

“Trading in” or “trading up” is the strategy to use. Your initial home (starter home) purchase is in an affordable range and somewhere in between every 3 – 7 years, you sell your old home and purchase another home with increasing value. Now there are many factors that influence when you would “trade up” but basically, the idea is that you capitalize on the equity being built in your home. Equity is built as you make your regular mortgage payments, but equity is also built as the market increases in value.

A “starter home” is your first home purchase. Many times, it’s not your dream home, but it is something you can afford as well as some place you can live in. When is a good time to purchase your starter home? The answer to that question is different for every situation, but a good answer would be “as soon as you can afford to purchase”. Why is that? Because as a renter, chances are you’re paying off someone else’s mortgage. You’re building someone else’s real estate investment equity. Why not start building your own wealth instead of building up someone else’s?

In the Hawaii real estate market we live in today, rarely do first time homebuyers purchase one home to live in for the rest of their lives as their parents did. With the average sold price of single family homes costing over half a million, the equity trade-in plan provides a way for your family to be able to afford the purchase of your dream home perhaps within a couple of trade-ups. So are you wondering if the equity trade-in plan is for you? Again, there are many factors that influence when you trade-up. Consult with a local realtor who can give you current market activity in your area to make the best decision.


Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

10 Steps to Prepare for Homeownership

1. Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.

2. Develop a wish list of what you’d like your home to have. Then prioritize the features on your list.

3. Select three or four neighborhoods you’d like to live in. Consider items such as schools, recreational facilities, area expansion plans, and safety.

4. Determine if you have enough saved to cover your downpayment and closing costs. Closing costs, including taxes, attorney’s fee, and transfer fees average between 2 percent and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report.

6. Determine how large a mortgage you can qualify for. Also explore different loans options and decide what’s best for you.

7. Organize all the documentation a lender will need to preapprove you for a loan.

8. Do research to determine if you qualify for any special mortgage or downpayment-assistance programs.

9. Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.

10. Find an experienced realtor who can help you through the process.


Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®Copyright 2005. All rights reserved.


Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Tips for Finding the Perfect Neighborhood

The neighborhood you choose can have a big impact on your lifestyle—safety, available amenities, and convenience all play their part.

Make a list of the activities—movies, health club, church—you engage in regularly and stores you visit frequently. See how far you would have to travel from each neighborhood you’re considering to engaging in your most common activities.

Check out the school district. The Department of Education in your town can probably provide information on test scores, class size, percentage of students who attend college, and special enrichment programs. If you have school-age children, also consider paying a visit to schools in the neighborhoods you’re considering. Even if you don’t have children, a house in a good school district will be easier to sell in the future.

Find out if the neighborhood is safe. Ask the police department for neighborhood crime statistics. Consider not only the number of crimes but also the type—burglaries, armed robberies—and the trend of increasing or decreasing crime. Also, is crime centered in only one part of the neighborhood, such as near a retail area?

Determine if the neighborhood is economically stable. Check with your local city economic development office to see if income and property values in the neighborhood are stable or rising. What is the percentage of homes to apartments? Apartments don’t necessarily diminish value, but they do mean a more transient population. Do you see vacant businesses or homes that have been for sale for months?

See if you’ll make money. Ask a local realtor or call the local realtor association to get information about price appreciation trends in the neighborhood. Although past performance is no guarantee of future results, this information may give you a sense of how good an investment your home will be. A realtor or the government planning agency also may be able to tell you about planned developments or other changes in the neighborhood—like a new school or highway—that might affect value.

See for yourself. Once you’ve narrowed your focus to two or three neighborhoods, go there, and walk around. Are homes tidy and well maintained? Are streets quiet? Pick a warm day if you can and chat with people working or playing outside. Are they friendly? Are their children to play with your family?


Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®Copyright 2005. All rights reserved.


Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

8 Ways to Improve Your Credit

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, “Knowing and Understanding Your Credit,” visit http://www.homebuyingguide.org.

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Searching for Hawaii Foreclosure Properties

We all hear stories of how your neighbor got a great deal on a foreclosed property and illusions of grandeur fill our minds. Okay, reality check! So maybe we don’t necessarily want to own a dozen properties – maybe just our own home and prices these days in Hawaii are outrageous! The truth is that foreclosure properties are out there but it takes work to find them. Chances are that if you spot a great deal, so did at least 50 other people if not more. Honestly, did you think you were the only one checking the newspaper?

Still, if you’re serious about purchasing or investing in a Hawaii foreclosure property, here are some websites that list these types of properties. The best thing about them is that they’re absolutely free to review. There’s a lot more to purchasing foreclosure properties than these links, but they will be sure to provide more current property leads when you’re in the market for them.

1. The Honolulu Star-Bulletin – click on the “foreclosure” link in the Island Homes section.

2. Hudson and Marshall – they’re a company specializing in auctioning real estate

3. Premiere Asset Services – handles Wells Fargo foreclosed properties

4. Countrywide REO – handles Countrywide Mortgage foreclosed properties

5. Bank of America REO – handles Bank of America foreclosed properties

6. HUD PEMCO – handles HUD homes in Hawaii, California, Georgia, Guam, and Marianas

7. Fannie Mae REO – handles Fannie Mae owned foreclosed properties

8. Freddie Mac REO – handles Freddie Mac owned foreclosed properties

9. FDIC – handles asset sales for FDIC owned and seized properties

10. IRS – handles real estate properties foreclosed due to taxes

Again, these are just sites of listings for Hawaii foreclosure properties that are available. You would still need to do your due diligence on the property before purchasing.

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

What Money Will You Need to Purchase?

Every purchase is different but this post will give you some idea of what you'll have to come up with during the purchase of your home.

The first money you'll put down is called an earnest money deposit. This is not to be confused with your downpayment. The earnest money deposit is typically $500 - $1000 although there is no set standard. I've been asked to make higher deposits to accompany my offers on properties and I've also read that one investor doesn't even make a deposit. In any case, this money goes towards escrow closing costs if your offer is accepted and gets returned to you if your offer doesn't get accepted.

At closing, you'll put down your downpayment. The amount of your downpayment is worked out between you and your lender during the escrow process and you should expect to show up at your closing appointment with a certified check (not a personal check).

At closing, you'll also pay the remainder of the closing costs which can be estimated to be 3% of the purchase price. You'll be getting a HUD statement prior to closing which will tell you how much the balance is. If there were any additional costs that arose during the escrow process it gets settled here. Closing costs are listed on your purchase agreement (the form you signed when you submitted your offer). Typical closing costs include escrow fees, taxes, inspections, legal fees, etc.

The following situation is not typical, but if for some reason you worked with a seller who was not willing to pay for realtor commissions, you'll be paying for it here as well. It will all be listed in the HUD statement. Keep your HUD statement for tax purposes.

There may be a remaining amount that escrow will hold to cover unexpected charges that come up after closing. Any unused portion will be returned to you within a few months.

Lastly, you'll have to find and purchase home owner's insurance. This is for flood insurance, fire, etc.

As you can see, the amount of what you'll need at closing varies depending upon the sale. It's a good idea to keep up with your lender, escrow agent, and realtor during the escrow process so you'll know what you need.

This is your year!

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

The 80/20 Rule for Mortgages

So what is the 80/20 Rule? That just meant that the buyer would give a 20% downpayment and carry an 80% loan. Mortgage loans have come a long way from having to put a 20% downpayment. No longer is the full 20% required. There are loans awarded with only a 10% or 5% down. FHA loans offer a 3% downpayment requirement.

A couple of years ago, loans were being given for 100-103% of the purchase price assuming a good credit standing. I haven't really seen much of these loans being advertised, but that doesn't mean that they aren't out there.

How does the 80/20 Rule apply to you now? If you take out a loan that is greater than the 80% you will most likely have to pay mortgage insurance on the loan. The insurance is meant to protect the lender in case you default on the loan. You will pay this mortgage insurance until you've paid the 20% (or in the case of FHA loans - 22.5%).

The main thing to get out of this post is that you don't need a 20% downpayment and be aware that there are costs associated with having less than a 20% downpayment.

The best thing to do is contact your lender to see what their terms are and what are the costs of the mortgage insurance and work with your realtor to find the home that is priced right for you. You'll need to factor in all these costs when making your purchase.

Just remember that nothing is impossible and this is your year to turn your dreams into realty!


Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Types of Loans Available

Are you confused yet? As if there isn't enough to learn about buying a home, you also have to learn about banking as well. Well, I'm exaggerating... The truth is, there is a lot to learn and you should be an educated buyer so you at least know what you're getting yourself and your family into.

Here's a snipet of info regarding mortgages to get you started. There are several types of loans - 30 yr., 40 yr. (still very new), ARMs (in 10yr, 7yr, 5 yr, 3yr, and 1yr), interest only, balloon mortgages, and reverse mortgages.

All of these have various costs that differ from lender to lender. Costs include the interest rate you'll be paying for the loan, points and possibly even a loan fee.

30yr fixed mortgages generally have the same interest rate for 30 years. I would imagine that the same is for the 40yr, but you'll have to do your own research for that one.

ARMs are short adjusted rate mortgages which means that the rates change at you guessed it - 10yr, 7yr, 5yr, etc. - you get the idea.

Interest only loans means that you pay interest only up front which seems cheap, but the rates can change quickly so don't be deceived. Because of the problem we had earlier this year with subprime lending in the form of ARMs and interest only, they may have stricter lending requirements. I've heard that they aren't even being offered and yet, I seen so many ads offering these loans. If this is the loan for you, it'll probably be best to ask your lender what's available when the time comes.

Balloon payments have a huge "balloon" payment at the end of the loan term.

Reverse mortgages basically pay you assuming you have considerable amount of equity in a property you already own. Let's just say for now that this doesn't really apply to our situation.

With all that being said, a lender could offer one or more of these loans. Take some time to watch the ads in the real estate section of the Sunday paper. See whose offering what at what interest rate. Don't be shy in calling them to inquire about the loan. Find out what the terms are and how you can qualify for the loan. The terms you're interested in are:

1. What's the interest rate?
2. Are there points or fees attached to the loan?
3. What kind of FICO score would you need to obtain the loan?
4. Is there a prepayment penalty for the loan?

By the way, I forgot to mention that we don't want to have a prepayment penalty on the loan as much as possible. A prepayment penalty means that you will have to pay in order to get out of the loan - kind of like having to pay to get out of your cell phone contract early.

By the way #2, also remember that you're only shopping for your loan at this point. Unless you're ready to buy, don't let them pull your credit just yet.

Be the informed buyer. I know this information may all make your head spin, but it'll be worth it when you get the keys to your new home! This is your year to turn your dreams into realty!

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Check Out Your Credit BEFORE You Apply for the Loan

OK, it's like this... Would you rather walk around in a dark room or turn on the light so you can at least see where you're going? Unless you regularly check your credit report, you probably have no idea what your credit is actually like. Even if you check it annually, one year is still a long time and on top of that, most people only run their report when they are applying for a loan. Do you ever see that report?

My point is that you should know where you're headed. Every time some one pulls your credit report, that counts as a credit inquiry. If you have too many credit inquiries, that lowers your FICO score which is so important in qualifying for a loan (unless you plan on paying for your property in cash). That credit report also has a shelf life and could be pulled twice as part of the loan portion of the escrow process - once at the beginning to pre-qualify you for the loan and once at the end to ensure everything is still current.

Get a free credit report at none other than http://www.freecreditreport.com/. There are other websites that offer free credit reports as well. You will need to obtain a report that has your FICO score listed. Credit bureaus (Experian, Equifax, Trans Union) also offer one free report annually for consumers, but the last time I checked, the FICO score was not included. Things may have changed.

Review the report for any errors and correct them if needed. In some situations, this may take months! Give yourself the time you need to prepare for your loan without impacting your credit score. Talk to lenders and find out what kinds of FICO scores are necessary for the loans they are advertising. Know where you stand before you apply for the loan. You'll feel much more confident about the loan process if you know where you're headed!

Happy loan hunting!

***Your realtor may also be able to help you estimate a ball park figure of the amount of loan you may be able to qualify for.

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Funding Your Downpayment

If not having a downpayment is keeping you from buying your first property, here's some information that'll help you! You will need to be a 1st time home owner (not owning any residential property on Oahu within the last three years). You will also need to comply with income requirements and other specifications.

The American Dream Downpayment Initiative (ADDI) will fund a maximum of $5000 towards a down payment as a grant. That's really helpful since it's in the form of a grant - meaning that you do not have to pay it back.

The second type of assistance comes in the form of a loan from the City and County of Honolulu with a maximum loan amount of $25,000. The great thing about this (besides the high loan amount) is that it comes with a 0% interest rate. You are also able to apply for the ADDI grant, but the maximum amount granted will be reduced to $3000. That's still a great opportunity!

For more information regarding these programs, click on the link below:

http://www.hicentral.com/public_REALTOR_window_9.html

Talk to your lender to help you pursue this opportunity.

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

Plantation Town Apartments

This development is being built by Hawaiian Island Homes, Ltd. It is conveniently located, close to schools, Waikele Shopping Mall, and the freeway entrance.

There is a lender onsite to assist you with funding if necessary.

For more information, click on the title of this post to get to the website.

If you would like to view a model of these units, let me know and I will be happy to arrange that for you.

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
ckn0316@hawaiiantel.net
Office: (808) 488-2992

May 2007 Oahu Resale Market Info

Median Sales Price Single Family Residence: $650,000

Median Sales Price Condos: $325,00

Median Number of Days on Market - Single Family Residence: 42

Median Number of Days on Market - Condos: 38

Contact me if you need other data.

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
Office: (808) 488-2992

Is This the Right Time to Buy? - For 1st Time Homeowners

We're hearing in the news - "The sky is falling!" "Real estate is going to drop!" We're reading that interest rates are on the rise.

Is this the right time to buy? That answer depends on what you want to do with your real estate purchase. Our parents probably bought one house in their life time - it's the one you grew up in and the one they still live in. If that's your plan, 30 years down the road, it's probably safe to say that your property value will have gone up. There isn't any new land being created - at least on most of the major Hawaiian Islands and unless you want to live on a lava field.

Still 30 years is a long time and a lot can happen. We've been reading in the newspapers about the increase in foreclosures happening nationwide. We think what if that were me?

Is this the right time to buy? If you're a first time homeowner, the next question is your REAL question - Am I prepared to buy my first home? If not, how can I get prepared? Here are some things to think about.

1. Do you know what your credit score is like?
2. How much mortgage can you afford?
3. Do you know where you'd like to live?
4. Do my spouse and I agree that this is the right time for us?

Just remember that nothing is impossible. Your dreams of home ownership can become a reality but you have to be financially prepared to handle that blessing!

I'd like to help you turn your dreams into realty! This is your year!

Coreen K. Nishijo (RA)
The Master's Plan Realty, LLC
Office: (808) 488-2992