Have you been living under a rock?

The financial meltdown and gloomy outlook has some people wishing they could go hide away in a cave. Well for one family, the recession and lack of financing is forcing them out of their 17,000-square-foot, subterranean home. After purchasing the home in 2004 with a 50% down payment and a 50% loan from the seller for 5 years, Curt Sleeper cannot find a source to refinance because there are NO comparables for the property and no banks want to take the risk. Now he has turned to E-Bay to sell or find a lender and the response has been unreal. Let's hope they can find a way to stay in the 'home' since they just gave birth to their third child (in the cave).

More to lose than just Earnest Money

Some people believe if they sign a contract to buy a piece of property and then decide to back out of the deal, the worst result would be a loss of their earnest money. This is not true. While every deal and contract is different, any party that defaults on a contract can be pursued for additional damages, assuming the other party can prove those damages.

In fact, one condo developer in Tennessee is taking aim at several buyers that backed out of purchase contracts. The developer ended up selling the units for significantly less than the original contract price and is asking the former contract holders to pay the difference, or be sued. It should be interesting to see the results.

Four Is The Limit No More

Fannie Mae announced a new policy on February 6, 2009, to allow investors and second home buyers to own up to 10 financed properties. The new policy takes effect on March 1, 2009, and replaces the current 4-property limit. The restriction applies to the total number of financed properties, not just to the number sold to Fannie Mae.

Investor and second home borrowers that seek to own between 5 and 10 financed properties must meet additional eligibility requirements.

-Borrowers must have a credit score of at least 720. The maximum loan-to-value ratio is 70% or 75%, depending on specified criteria.
-Borrowers may not have any history of bankruptcy or foreclosure in the past 7 years, or any mortgage delinquencies of 30 days or greater within the past 12 months. Reserve and other requirements also apply.

WCAA Meeting - Thursday

If you are interested in education and networking that relates to investing in apartments I recommend checking out the Wake Count Apartment Association. www.thewcaa.com
The group meets the first Thursday of very month to help provide it's membership with information to improve efficiency and profitability of operating apartments. Our next meeting will be this Thursday, 2/5/09 and the guest speaker will be Raleigh City Council Member Philip Isley. For meeting details, visit www.thewcaa.com