Hurlbuthomes.com Blog

In news of the "Huh?" . . .

Three years after a Lake City, Ga, home was featured on "Extreme Makeover," the home is in foreclosure and about to be auctioned.

The Harper Family used the renovated property as collateral to get a $450,000 loan. Now they are unable to pay the bills and the property will be auctioned on the steps of the Clayton County Courthouse on Aug. 5.

ABC-TV said in a statement that it advises each family to consult a financial planner after they get their new home.

"Ultimately, financial matters are personal, and we work to respect the privacy of the families," the network said.

Source: The Associated Press (07/28/08)

Your credit score is the magic number that lenders use to determine what interest rate you will get on a loan. Want to see your score for free, anytime you wish? How about free 24-hour credit monitoring services for up to a year? You may be eligible for these services if you had an open line of credit from January 1, 1987 until May 28, 2008. That means if you received a car loan, opened a department store credit card or took out a student loan in the past 21 years, you'll qualify. This credit monitoring service will give you unlimited access to your credit report and your TransUnion credit score. You'll also get a notice by e-mail if there have been any significant changes to your credit report, like delinquent accounts or if someone tries to open an account in your name.

There are two kinds of service that you can choose:
Basic service: This would provide six months of the credit monitoring service with unlimited access to your TransUnion credit report and TransUnion credit score. According to the settlement, this has a retail value of $59.75. If you select this service, you'll also be able to apply for a cash payment from the settlement fund.

Enhanced service: This would provide nine months of credit monitoring services, plus a mortgage simulator service. This simulator lets you see what your mortgage rate would be based on your credit score. The service also includes access to your insurance score. This is the score that some insurance companies use to determine your rate. This option is valued at about $115.50. If you select this option, you will not be eligible for a cash payment. But some experts say the value of this benefit is limited.

"The score you're being shown isn't your FICO score," says credit expert John Ulzheimer. And the FICO score, established by Fair Isaac, is the score that most lenders look at when extending credit. The difference between your TransUnion credit score, called TransRisk, and your FICO score won't be drastic. But, there could be a difference of 40-50 points, says Ulzheimer. Another problem is that there aren't many lenders who use this credit score, says Ulzheimer. In fact, he speculates that less than 5 percent of lenders will use it.

"Small lenders like credit unions or local banks may look at this score," he says.

There are simulated credit scores that you can get for free without having to give away personal information. Check out bankrate.com or credit.com. And of course, you can get your credit report from all three credit bureaus for free every year at AnnualCreditReport.com.

The value in this kind of offering is that you can get an estimate of your credit standing. Consumer advocates are concerned this could cause confusion. "I expect there are lots of people under the impression that they have excellent credit [who] get shocked when they get a car loan for much more than those with truly excellent credit would receive," says Joe Ridout of Consumer Action, a nonprofit consumer advocacy organization.

However, consumers will benefit from having their credit monitored for free. "TransUnion has a reputable monitoring service," says Ulzheimer. Sometimes consumers will like the experience of being updated on their credit report. Other consumers will just shrug. In the end, it's nice to have free three months of anything.

The deal ends a class-action lawsuit that was filed after TransUnion sold customer information in the form of marketing lists to other businesses. The company says it discontinued that practice in 2001. TransUnion denied any wrongdoing. Under the terms of the agreement, the company will set up a $75 million fund to spread the word about the settlement and to pay attorneys and other claims.
You can file your claim beginning June 16. Go to the Web site at www.listclassaction.com. You can also call the TransUnion settlement number at (866) 416-3470.

Charming Craftsman in Rebecca Ridge by Luxury Pacific Homes! Walking up to the soaring entry, you're greeted by bay windows, extensive stone work and a nice covered porch to keep you dry. Walk into gleaming hardwoods, soaring ceilings and outstanding craftsmanship that just can't be beat! The Chef in the family will love the spacious gourmet kitchen with granite tile countertops and full height tile backsplash. Spacious open floor plan with 4 bedrooms, 2.5 bathrooms a den and a bonus room (which also has a closet and could be 5th bedroom) gives you space for everyone! Large level fully fenced yard is great for summer bbq's and keeping Fido safe! Don't miss the opportunity of a lifetime! Over $60K less than the last time this home sold!

For more information, visit:
http://johnlscott.com/67390
http://tourfactory.com/433958

Or Contact:
John Hurlbut, Realtor, ABR, GRI
John L. Scott Real Estate
http://hurlbuthomes.com/
jhurlbut@johnlscott.com
(253) 222-2626 Cellular
1-866-411-JOHN (5646) Toll Free

This weekend I met a potential client at a new condominium community. He and his wife mentioned they were talking about purchasing their first investment property. I congratulated them saying there's never been a better time to do so. As the conversation progressed, I overheard them saying that they could sell stock and buy the condo outright. We continued on our tour of the property, exchanged information and parted company.

Today I sent them an e-mail and mentioned that I had overheard them talking about selling stock to buy the condo outright. I said that unless they were counting on the rental income to finance their lifestyle, that they would be much better off only putting down as much as needed to get the property to cash flow by a hundred or two dollars per month and financing the rest. This was a foreign concept to them, so I went on to explain:

The power of buying real estate is in leverage. Using other people's money to finance your fortune. A stock investor that purchases a stock for $50.00 per share has to put down how much to purchase that stock? Right, $50.00 per share. However, when you buy real estate, you can often buy it for no money down. (Assuming you plan to live there) OR if you want an investment, you can often get away with putting as little as 10% down. So in the example of this particular condo, if the purchase price is $170,000 and say you have to put 20% down to get it to cash flow, you only have to put $34,000 down. That leaves you an additional $136,000 that you could either leave in your stocks, or you could purchase MULTIPLE properties with that same $170,000 LEVERAGING someone elses money to finance your real estate empire.

This is the time that the rich get richer. Imagine, if your stocks return 10% per year. And a home appreciates 5% per year. You would think that you're getting a better deal on the stocks right? Well if you've got $170,000 invested in the stocks, you've actually got $170,000 invested. But if you have a rental property, you've only got in this example $34,000 invested, but you're getting a 5% return on $170,000.

Stocks - 10% return year 1 - $17,000
House - 5% return year 1 - $8,500
Return on Investment (ROI) Stocks - 10%
Return on Investment (ROI) House - 25%

Now imagine if you had parlayed that $170,000 into 4 or 5 homes and you were getting a 25% ROI on each of them! This is how the rich get richer. And if you wanted to hedge your bets, keep half in the stock market and only purchase two or three investment properties. You STILL come out way ahead.

If you'd like to learn more about investing in real estate, don't hesitate to give me a call.

John Hurlbut, ABR, GRI
John L. Scott Real Estate
(253) 222-2626 - Cellular
http://hurlbuthomes.com/
jhurlbut@johnlscott.com