NUTS & BOLTS NUTS & BOLTS
DOWN PAYMENTS
DOES YOUR CITY HAVE A LAND BANK?
Each property is assessed before it is placed on their listing site and may include a “dangerous building assessment.” If the assessor determines that the struc- ture is unsafe but the foundation is in good shape, the structure will be removed and the foundation left. Anderson and the team at KCLB are motivated to sell these properties and get the neighborhoods back to functioning and thriving communities. Not only does the land bank represent profit potential for real estate investors, but working with KCLB is a great way to help rebuild the community in areas still suffering from the housing crash. • Many land banks have a number of regulations that govern how they will work with investors and how any buyer may use properties purchased from the land bank. Make sure that your investing strat- egies meet their criteria, since failing to do so could result in your being banned from working with a land bank or even legal action against you. W ondering if your favorite market has a land bank holding hidden “gems” for your portfo- lio? Here’s how to find out: 1. TAKE YOUR SEARCH ONLINE There are dozens of national and local lists detailing the locations of land banks around the country. However, not all land banks are the same, and not all resource materials are unbiased. If your market is not on one list, check another source before writing it off. 2. IDENTIFY YOUR LAND BANK’S GOALS KCLB was created to redevelop languishing properties. Not all land banks serve this purpose, and not all land banks work with investors. Once you have identified your market’s land bank, contact the organization directly to find out what purpose it serves and how to best work with it as a real estate investor. 3. EXPLORE ADVANTAGES AND RESTRAINTS ON YOUR INVESTING
Make sure that you and your buyers are all running the right numbers when dealing with the cost of a down payment.
The “20-Percent Down” Myth YOUR BUYERS MAY NOT REALIZE 20 PERCENT DOWN IS NOT THE NORM.
by Lindsay Johnson
ortgage rates are slowly and steadily rising. These current market conditions make buying a home particularly attractive in today’s mar- ket. Homeownership has always been viewed as one of the central pillars of the American dream and, because your home is often your largest asset, it can be an incredible means for creating greater stability, wealth, and financial security. However, there’s a common misconcep- M
people 34 years or younger don’t know they can qualify for a mortgage without a 20 percent down payment. Only 13 percent in this same age group believe they can buy with five percent or even less money down. Meanwhile, a recent Realtor.org survey revealed that among first-time homebuyers who obtained a mortgage, nearly 80 percent put less than 20 percent down. Among all buyers whose transactions closed in April 2017,
tion among many prospective home- buyers and investors that banks require a 20 percent down payment in order to finance a real estate purchase. You may not need 20 percent down to qualify for a mortgage.
Heather A. Elwing is the assistant editor for Think Realty Magazine and is a licensed Realtor in Missouri work- ing on her GREEN designation. She may be reached at hdixon@affinityworldwide.com.
PLENTY OF OPTIONS According to the National Association of Realtors (NAR), nearly 40 percent of
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