May, 2008
I want to thank Kim for picking up the slack in blogging here over the last couple of days. Things have been a little hectic for me. We had a bit of a medical emergency in my family, that commanded a lot of my time over the last several days.
In the interim, Kim posted a couple of great articles. We should hopefully be back track now. Some good things in the works for the next couple of days, to share here…. a land listing coming that is located off of Massaponax Church Road, an article on a buyer being sued for walking away from a contract, another “short trip” article, and a bunch more.
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I have been working with a client that is looking to buy a home in the Fredericksburg real estate market. He has a definitive financial plan for his future, and from it a few tips can be shared with our readers.
After looking at Fredericksburg homes for sale, he found the one he wants to purchase. To lay the foundation of this situation, let me give you some background numbers. This client….
- Is retired from the military
- Has a middle credit score of 815
- Possesses $330,000 in a 401K program, and
- Would like to put $100,000.00 down on the purchase of a home priced at $396,000.00.
After listening to the plans for his family’s future, and the goals he has set for the next 10 years, I felt that there were several financing options for him. Part of the job of your loan officer/mortgage planner, is to listen to your long term goals, in order to know what loan products best fit your needs.
We talked about a few ideas he had on the type of loan he wanted. He wanted a 30 year fixed – as he was planning on living in the house for at least 8 to 10 years. He also owns a home in Virginia Beach, and may go back there eventually, or he may sell both properties (the Fredericksburg real estate, and the Virginia Beach real estate) and move out west near his family.
Being military, he wanted to explore the rate for a VA loan, but was also considering an FHA loan, and a standard conventional loan. Through our conversation, I also found out he receives a disability payment each month from the military. Comparing rates from one product to another, they were fairly close – on Friday – but there was more to consider.
First with FHA, you are charged a funding fee of 1.5% of the loan amount. With VA there is a funding fee of at least 2.15% (depending on if it has been used more than once). The catch here, is that with the VA product, he would not have to pay a funding fee because of his disability situation. That saves my client money and rules out the FHA loan product.
Now the question becomes, should he buy down his rate? That is a great question, and is something I will explain in another article.
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KUDOS to Mary Washington Hospital Emergency Room!
I spent last evening there with my niece. The physician’s assistant and all the different nurses that helped, made a very difficult time easier. Mary Washington has taken a lot of heat over the years. My children were born there, three of my nieces were born there, my in-laws and my parents were treated there, and many emergencies with my nieces were all handled well.
I have a good friend that works in the ER at Mary Washington, who was not working during any of our visits. Our experience has been that the staff works very hard to get you treated in a timely manner. And, not only are they professional, but also very caring.
Again Kudos to MWH, and I for one, Thank God we have them!
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Kim and I have posted several articles on our blog about things to consider when facing foreclosure. This is a relevant factor in the Fredericksburg real estate market, as there are thousands of foreclosures for sale. Forbes identifies an additional issue for people who are potentially facing foreclosure – scams.
Delinquent homeowners looking to break free from default notices are getting tricked by brokers promising to save them from foreclosure, only to make off with thousands in fees or what home equity is left.
Take rent-to-buy scams. In cases like these, a fraudulent rescue company convinces a homeowner to sign over the title while building equity as a renter. The homeowner avoids foreclosure, but risks being evicted by the very firm that promised to save his home.
For more on this article, visit the Forbes website.
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My team just listed a wonderful home in the South Woods Community, in Spotsylvania County. This home is situated on 1.22 beautiful wooded acres, and features more than 3700 square feet of living space, plus a huge unfinished walkout basement. The veritible gourmet kitchen offers granite counters, state-of-the-art stainless steel appliances, including a built-in microwave, double wall ovens (one is a convection oven) and a gas cooktop, with a delightful center island, with bar seating.
Bedrooms galore. A coveted first floor master suite makes this a fantastic home for families, or for someone viewing it as a retirement home. Three or four more bedrooms are located on the second level. A lovely gas fireplace in the two story family room, creates an ambiance that is sure to make this room a popular gathering place for friends and family.
The huge unfinished walkout basement, includes some dividing wall frames, space for a large recreation room, and rough in plumbing for an additional bathroom.
Outside, an irrigation system makes it easy and convenient to keep the grounds in tip-top shape, allowing the owner more time to sit in the cool canopy of shade provided by large mature trees.
This fabulous home will be available on the MLS Saturday evening. Come see it, and explore the delightful South Oaks Community. This piece of Fredericksburg real estate will become a sensational home for it’s new family.
A few exterior photos are shown below. Many more photos, a website and virtual tour will be available in the next few days. If you are interested in previewing the property, give me a call at (540) 538-7222.
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Bryan, my friend from InTheBurg, took this idea and ran with it. He posted an article on a short trip to Charlottesville on his blog. So, this is a share-and-share-alike scenario. You can preview two destinations today, one here, and one over at Bryan’s blog.
Short Trip From Fredericksburg – InTheBurg
Thanks Bryan!
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I have a busy day ahead, but wanted to take a few minutes this morning, and kick off a series of articles on “Short Trips” from Fredericksburg. After I posted the article, “A Reflection of Days Gone By,” I pondered a bit more about gas prices.
My family has always been a driving family. For the last several years, we have taken long driving trips across the east coast, and middle America. I am not anticipating that happening this year, based on fuel prices. That caused me to think about many of the shorter trips, and places we have visited in past years. It occurred to me, that a lot of people may not have experienced some of these places. So, that prompted the idea for this, “Short Trips” series.
The locations will be in no particular order, other than the timing in which I think of them. I would encourage anyone who has comments, or suggestions about places to visit, to please share them with our readers. Either comment on my articles, or send me an email.
The intention is to identify locations, or trips that can be done in a day, or a weekend, and won’t necessarily break the bank in terms of fuel costs. We will begin with Roanoke, Virginia.
Roanoke, Virginia
Roanoke is considered to be in the southwestern Virginia area, and is, in my opinion, one of the more beautiful parts of our state. It is roughly a 3 1/2 hour drive to Roanoke, from Fredericksburg. The Roanoke area offers several recreational activities, and some pretty good dining. It is also fairly close to some nice attractions.
But, first a bit of history. Roanoke was settled in the 17th century, when the early pioneers began a westward movement. Some of them established settlements on the banks of the Roanoke River. As the railroads reached further west, the town prospered as a transportation and trading center.
Coincidentally, transportation was almost the demise of Roanoke as well. When the Interstate system passed by in the 1950′s, the town nearly died. But has come back strong since that time.
There are a couple of places or things I would recommend doing/visiting while in Roanoke.
Mill Mountain Coffee (This is one of my favorite coffee shops. I haven’t been there in probably 5 years, but always make it a point to go, while I am there.)
Market Square – offers the historic Farmer’s Market, some nice dining, and I am told, decent nightlife.
The Art Museum of Western Virginia
The Harrison Museum of African-American Culture
The Blue Ridge Parkway passes just east of the city, and offers one of the more scenic driving experiences on the east coast. The Appalachian Trail is not far, offering hikers a chance to plod where thousands before them have gone.
A short drive down the Interstate is Christiansburg/Blacksburg area, home of the Virginia Tech Hokies. A short jaunt up the road is Lexington, Virginia. Lexington is home to The Virginia Military Institute (VMI) and Natural Bridge.
Baseball lovers can take in a Salem Avalanche game. The Avalanche team is a Class A minor league team of the Houston Astros.
Finally, don’t forget to look to the top of the mountain at night - you will see the city’s star shining brightly – reminding you that Roanoke, is still the Star City.
I want to wish everyone a safe, and happy holiday weekend. Drive safe, and make the most of the weekend!
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Remember when we thought these prices were outrageous? This defunct Liberty gas station sits on Route 17, just off of exit #133 in Stafford County, near Fredericksburg. I spoke to someone recently who saw this sign, and delightedly pulled up to the pump. Only to come to the sad realization that the sign was a reflection of days gone by.
Search for the lowest gas prices by zip code, at the GasBuddy website. It changes almost daily, so check it often. Meanwhile, I am pondering how my clients will view a Realtor who shows up on a gas powered scooter… they get 60 to 80 miles per gallon! Do you think I can sell the image as eco-friendly?
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Most people who didn’t grow up in Fredericksburg, as they drive along the Rappahannock River along Riverside Drive and Fall Hill Avenue, think they are looking across the river to the Stafford County shore. In fact, they are looking at one of the most coveted parcels of Fredericksburg real estate – Lauck’s Island.
Lauck’s Island as Seen From Riverside Drive in Fredericksburg
The island contains approximately 87 acres of land. According to some local sources, approximately 50 acres of the 87, have never been flooded. I have found no historical resource yet that confirms that information. Interestingly enough history seems to reflect that Captain John Smith plotted the island on a map in the early 1600′s.
According to local sources and websites, the island is currently owned by Dr. Wheeling, and has been for nearly the last quarter century. With permission of Dr. Wheeling, Friends of the Rappahannock routinely schedules tours of the island.
Rumor has it that developers have been itching for years, to get their hands on the island, and develop it into one of many “highest and best” uses they believe fits the island. Making it one of the most coveted pieces of real estate in Fredericksburg.
I highly recommend (when the water is safe) that you jump in a canoe, and float around the island, just imagining the history that has transpired. I also would suggest a tour of the island, scheduled with Friends of the Rappahannock. You can take a look at the island from Fredericksburg, as seen in the photo below, you can even see part of the old bridge from Riverside Drive.
Much of the information for this post was gleaned from the Simply Fredericksburg website, among several other resources, including lifelong Fredericksburg residents. I suggest reading this website for further history on the island.
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There are several potential avenues to investing in Fredericksburg real estate. Most people have some understanding of the common avenues. But, a lot of people overlook a simple primary investment avenue, that is probably the most financially sound option for a lot of people.
I fielded a couple of questions this week that prompted me to write this article. One party who asked the question was a young couple. The other was a middle aged man, who was recently widowed, and essentially starting over in life. The question was, “I don’t have much money in the bank, so how can I invest in real estate?” It’s a great question. Most people think if they don’t have gobs of cash in the bank, they cannot invest. But, it’s not true.
The simple fact is, many can. The simplest way to starting a rental property investment portfolio, is to buy a starter home as your primary residence. But, there are a few things to keep in mind.
- First, you will likely be buying a little below your desired comfort level in terms of price, condition, location, etc. That is because point number two below is so important.
- As you look at Fredericksburg homes for sale, you should be looking in a price point, that allows for neutral-to-positive cash flow. That means that the purchase price, plus improvements should give you a mortgage payment that can at least be offset by the rental rate.
So, ideally, a young couple, or new investor that also needs a home, can buy a property, using the appropriate loan. Make the repairs on the home. Live in it a couple of years, and then lease it. In many cases the DTI (Debt to Income) ratio for a new loan will not consider the original property, because you have a signed, long term lease.
Assuming you were able to do this a couple of times in ten years, and considering the normal inflationary increase in property values, you not only would have tenants paying your mortgage – but you would also be accumulating equity on two-three-four- or even five houses.
Imagine an average home price of $150,000, owning four of them ten years from now, with a conservative return of 25% on your money ten years from now if you sold them. A net gain of a couple hundred thousand dollars is not at all unrealistic. How many people reading this blog will SAVE $150,000 of quickly liquidated assets in the next ten years? Very, very few.
Another important factor for this to work is market timing. It is fairly easy now, to find homes for sale in Fredericksburg and the surrounding areas that are in the appropriate price point to make this work. As the market rebounds, and changes to a seller’s market (and it will,) this becomes harder to accomplish. Buy your first one this year, in this market… now if possible.
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