As real estate prices continue to drop it may be a great time to buy another piece of real estate. However, it is always important to evaluate your current portfolio first to make sure it as recession proof as possible.
Here is the Nelsonian Theory on things to do RIGHT NOW….
1. Evaluate your investment portfolio
a. What is your ANNUAL YIELD:
i. for each property
ii. for the entire portfolio
b. What is each property doing for you?
Restated: Why own it?
c. Would performance be enhanced by refinancing it?
Restated: Do you have any interest only loans or variable rates loans that will adjust soon and have an impact on cash flow
d. What is the “runt of the litter”?
i. Should you hold it or trade it off?
ii. Can use it as a “down payment”
2. Evaluate your LIQUIDITY (“staying power”)
a. Make sure you can survive
b. 3-6 months of “survival number” or an extremely safe life of credit
3. Consider buying “foreclosures” and “the walking wounded”
Fannie Mae (FNMA) has a special program called Home Paths which allows an Investor to purchase a FNMA repossessed property and finance it with as little as 10% down payment. Special restrictions apply so check with you a knowledgeable lender regarding the financing options.
These special financing programs will not last forever!!
As real estate prices continue to drop it may be a great time to buy another piece of real estate. However, it is always important to evaluate your current portfolio first to make sure it as recession proof as possible.
Here is the Nelsonian Theory on things to do RIGHT NOW….
-
Evaluate your investment portfolio
-
What is your ANNUAL YIELD:
-
-
for each property
ii. for the entire portfolio
-
-
What is each property doing for you?
-
Restated: Why own it?
-
-
Would performance be enhanced by refinancing it?
-
Restated: Do you have any interest only loans or variable rates loans that will adjust soon and have an impact on cash flow?
-
-
What is the “runt of the litter”?
-
-
Should you hold it or trade it off?
ii. Can use it as a “down payment”
-
Evaluate your LIQUIDITY (“staying power”)
-
Make sure you can survive
-
3-6 months of “survival number” or
-
an extremely safe life of credit
-
Consider buying “foreclosures” and “the walking wounded”
Fannie Mae (FNMA) has a special program called Home Paths which allows an Investor to purchase a FNMA repossessed property and finance it with as little as 10% down payment. Special restrictions apply so check with you a knowledgeable lender regarding the financing options.
These special financing programs will not last forever!!
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