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Jun 01 2020

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

I should have taken advantage more of sitting at home for most of 2020 by writing more.  This topic has been on my mind lately as the stock market has been going in all different directions.  To provide a refresher on this topic here is a link to my original post from 2013 on this subject.  Let’s follow the journey from my 2013 transaction and see where it has gotten my client today in 2020.

Clovis CA Real Estate Properties
Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

If you have not gone back to read my post from 2013, I’ll give you a quick summary.  Sometime around the end of 2012 a friend of mine had changed employers.  He had roughly $131,000 in his retirement account.  Somewhere along the way he discovered real estate investing through IRAs.  To make a long story short, he formed a LLC, got an attorney to draft some paperwork and he was off to self directing his IRA into a real estate investment.  He put about 60% down on a four bedroom 2 bathroom home in Clovis.  We got it under contract for $177,000 and he was able to borrow about $77,000 against the home with a non recourse IRA loan.  Non recourse means that if the loan defaulted or foreclosed that he wouldn’t get any negative impacts to his personal credit report.  These loans function more like a commercial loan where the rents or rental survey justifies the loan amounts.  So when you put enough money down, banks will lend on the investment if the Loan to Value ratio is low enough for them to accept the risks of having to foreclose, etc.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

Fast forward to today and the loan that he took out in 2013 has been paid off by the tenants in his rental property.  If I remember correctly it was a loan that was amortized over 10 years and he paid it off about 3 years early by contributing more towards the mortgage payments every month than what was required.  So in 7 years time, my client turned $131,000 in retirement savings into roughly $300,000 in a paid off single family residence in Clovis.  How did he get there so fast, more than doubling his money in 7 years?  He got there by tenants paying off his loan balance and by property values increasing over the past 7 years.  He was able to accomplish this gain in his retirement account over the past 7 years without contributing a single dollar to his retirement account since 2013.  That right there is hard to wrap my mind around.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

He enjoyed watching his retirement account grow so much through his self directed IRA that he wants to watch it grow again.  On May 29th, 2020 he closed on his 2nd single family home in Clovis through his self directed IRA.  How is he doing this you may be asking yourself?  It is through a concept called leverage where he is leveraging someone else’s money.  In this case it is the bank that is giving him a cash out refinance loan on the asset he owns free and clear and a purchase money loan on the home he is acquiring.  Again, these loans are not based on his income, assets or credit.  He is using non recourse loans backed by his IRA account.  These are loans that not very many banks or institutions issue.  I like to call these “Unicorn Loans.”

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

Back in 2013 there seemed to only be one or two institutions that brokered real estate loans based on ones IRA accounts.  In 2020 we did some searching and found several more options available.  However, upon calling on these so called IRA lenders we discovered that some didn’t lend in California or that most of their guidelines were so strict that they were not able to help my client accomplish his goal of buying a 2nd investment property.  Most of these few other lenders were only offering interest rates around 6% or above and that simply killed the chance of this deal happening.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

Before we found an investor who could guarantee us that they could do a cash out refinance on his current home and put it towards a down payment on another home, we secured a property in escrow that he wanted to acquire.  He wanting something close to where he lived where he liked the curb appeal and knew it would be easy to rent to good tenants.  That was on a Sunday in April.  So Monday morning I contacted the bank who financed his original investment in 2013.  But their guidelines were so strict and their interest rate sub par so we couldn’t use them.  In panic mode now I was calling and e-mailing all of the IRA lenders we could find.  Hope was growing dim that we could pull this off and actually close on this new purchase transaction.  Surprisingly the seller and listing agent accepted our offer without a loan letter.  But I assured them that we would be getting a letter to them soon.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

These banks will only lend 40-60% of LTV typically and their CA guidelines are more strict because values are high in CA compared to the midwest and other states where most properties will cash flow at those LTV amounts.  But banks didn’t just want to make sure that the rents would cover the mortgage payments.  They want rents to be 125% of the mortgage payments to cover any vacancies, repairs or emergencies, etc.  Another big qualifying factor is money in a reserve account.  Most lenders wanted 15% of the loan balance in a reserve account for a rainy day.  We had a couple banks who could do the refi but not the refi and the purchase loan.  We were down to our last bank.  It seemed promising what they were offering and we were hopeful.  Their interest rates and reserve requirements were way better than anyone else we could find.  We were quoted a rate of 4.5% on the refi and the purchase loan.

Pool Homes for Sale in Wawona Ranch Clovis CA
Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

It was game on at this point.  The low interest rate along with the 6 month principle, interest, taxes and insurance (PITI) reserve requirements made this deal possible again.  The difference in reserve requirements meant that my client only needed about $13,000 in his rainy day account instead of around $45,000.  That was a huge difference from other lenders.  And the interest rate was only roughly 1% higher than what someone could get on their personal residence with an 850 credit score with a traditional real estate loan.  I couldn’t believe the stars were aligning to make this deal work.  My client was impressed that I found someone who could lend on the home he wanted to acquire.  While he was busy with his day job, I was hustling phone calls and e-mails trying to source the financing for his retirement real estate needs, all while the 40 day escrow period on the purchase was ticking down.

 Caught At The Top Of The Market In New Construction Clovis Ca. 93619
 Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

At this point it was time to order the home inspection, termite inspection and get any other property inspections or investigations completed.  The property checked out rather well, with only a handful of items we negotiated to have the seller fix or replace before the close of escrow.  An unusual hurdle in this transaction was that we had to have two appraisal done.  One appraisal on the 2013 acquired home for the cash out refinance where we were borrowing $148,000 from that home.  About $12,000 of that was used to pay for the closing costs of 2 loans, the refinance and the purchase.  Another $13,000 or so was held back in the reserve account.  Roughly $120,000 of that $148,000 was used as a down payment for the purchase.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

So something a little different about these IRA loans is that since they are based upon properties cash flowing to pay down the debt, the appraisers are required to do a rental survey.  A normal residential real estate appraisal uses the comparative market approach where they are only concerned with the recent sales of like kind properties.  There is an income approach element to these appraisals where the appraiser will give in their report an opinion of monthly rents for the property.  That monthly rent value in the appraisal is what the lenders will use to determine if the rents are at least 125% of the principle, interest, taxes and insurance.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

In order to not miss the forest for the trees, let me review what my client now owns in his IRA portfolio.  He owns two single family homes in Clovis CA. with a current market value between $550,000 – $575,000.  In 7 years he was able to turn $131,000 into $575,000 of real estate.  Now, he doesn’t own this real estate free and clear, yet.  His loans will be amortized over 25 years but he should have both homes paid off within 10-12 years.  Loans on both homes are at 50% LTV or less and he’ll make extra payments each month on the mortgages to pay them down quicker.  So in 10 years it will be hard to say what these homes may be worth.  But if he rinses and repeats this process, he can build up a nice nest egg for him and his family without contributing any more towards his retirement plan.  How cool is that?  To see what other investment homes are available in Clovis CA. click here.

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

Self Directed IRA Real Estate Investment Success Story Clovis CA 93611

Written by Jason Nenadov · Categorized: Uncategorized · Tagged: best realtor clovis, best realtor fresno, changing careers, changing jobs, equity assets real estate, IRA Investments, non recourse loans, real estate investing, real estate IRA, rental surveys, retirement rollover, self directed IRA

May 09 2018

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

 

Now is a great time to list your Wathen European home for sale in a gated community in Clovis, CA. 93619.  Looking at the data from the gated communities of European Glen, European Quarters, European Village & European Parc, there are only currently three active listings still for sale.  In the past six months there have been 18 sales in these neighborhoods.  

 

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

There have been five sales of the small 1,271 sq. ft. model over the past six months.  These sales have ranged from $255,00 to $274,000.  There is currently one of these models for sale for $280,000.  It has been on the market for 34 days as of today and there was one price reduction after 14 days on the market.  It was originally listed for $285,000.  

 

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

From the 1,500-1,600 sq. ft. range there have been eight sales and one active listing.  The active listing is selling for $325,000 and it has been on the market for 25 days.  The eight sales in the past six month of this size have ranged from $268,000 to $296,000.  

 

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

In the 1,800 – 1,900 sq. ft. range there have been six sales and one current active listing.  The sold listings have went from $290,000 – $308,000.  Homes of this size are all two story floor plans.  The one active listing is listed for $339,900 and it has been on the market for 26 days.  This listing is seemingly priced $30,000 over comparable sales so it may sit on the market for a while at that price.  However, it is a foreclosure so most likely the price will be dropped in a strategic manner until it is sold.

 

Gated Community Wathen European Home Listing For Sale Clovis CA. 93619
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

These Wathen Castanos European Homes in gated communities in Clovis, CA. 93619 are hot commodities.  On average, the 18 sales have sold in a matter of 29 days on the market.  If you are looking to put your home on the market, keep in mind that values are neighborhood specific.  So it would be good to look at the sales on your street and in your specific community.  A European Glen home may not sell for the same sale price as a European Quarters home, etc.  If you would like more detailed pricing information if you are thinking of putting your home on the market give me a call or text at 559-246-8991.  I would be happy to provide a custom market analysis for your property and detail how I can help you sell your home for top dollar in the shortest amount of time.  To see which homes are actively listed for sale in real time in and around these Wathen homes click here.

 

Clovis Real Estate Properties
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

 
Gated Community Wathen European Home Listing For Sale Clovis CA. 93619

Written by Jason Nenadov · Categorized: Uncategorized · Tagged: best realtor fresno, buyorsellinfresno, energy efficiency, equity assets real estate, European Glen, European homes, European Parc, European Quarters, European Village, gated communities, home valuation, jasonnenadov, listing my home, local home builder, master planned communities, Wathen Castanos, what's my home worth, zestimate

Mar 23 2018

Wilson Homes New Construction Windsor Models For Sale at Harlan Creek Clovis CA 93619

Wilson Homes New Construction Windsor Models For Sale at Harlan Creek Clovis CA 93619
 

New construction is the new crave in the Fresno/Clovis region.  Buyers are tired of getting beat out of a bidding war on that perfect resale home that they really wanted.  They’ve thrown in the white flag so to speak on resale homes.  Or maybe they are tired of the constant fixing and updating that they are having to do on their home that has seen the greater of three decades of wear, tear and neglect.  

 

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

We’ve gone through the depressed mortgage crisis era where short sales, REOs and straight up disgusting homes were selling on the market.  The fix and flip investment companies have had several years now of spit shining the diamonds in the rough homes and pumping out eye candy styled homes with the latest and greatest fixtures and features.  Because of this new elevated product level of flipped homes, buyers now are taking a more marksman approach rather than the shotgun approach to finding a home.  They are zoomed in on what they want and if they don’t see it or enough of it out there they will turn to new construction.  Not to mention if anyone is looking to move up in home, they will probably need to pay twice as much as they did for their current home in the last mortgage “depression.”  And even though they probably have to wait 6+ months to get that next new construction home they are happy to do so.

 

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

Will this new home crave I’ve been trying to get out to some recent models and check out the latest and greatest.  I revisited the Windsor homes built by Wilson recently.  And although I have been there before I learned a little about their latest community being built out at De Wolf and Richmond.  This is north of the 168 freeway and directly west of the Harlan Ranch boundaries.  Wilson is calling this development Harlan Creek and it will feature some of their Windsor floor plans as well as their Reagent Park floor plans.  

 

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

Base pricing for the Windsor models includes the following:
 
BALDWIN – 4 BR, 3BA (guest suite available) 3 car garage (2,986 SQ. FT.) – one story $514,450
 
ADDISON – 3 BR, 3 BA (up to 4 BR) 3 car garage (2,725 SQ. FT.) – one story $474,450
 
CLAREMONT – 5 BR 3 1/2 BA (up to 7 BR/4 1/2 BA) guest suite available & 3 car garage (4,183 SQ. FT.) – two story $615,050
 
COLLIER – 5 BR 3 1/2 BA (up to 6 BR/4 1/2 BA) 3 car garage (3,912 SQ. FT.) – two story $585,950
 
EDMOND – 4 BR, 3 BA (up to 6 BR and 3 1/2 BA) 3 car garage (3,704, SQ. FT.) – two story $526,950
 
LA ROYAL – 4 BR, 3 BA (up to 5 BR and 3 BA) 3 car garage (2,700 SQ. FT.) – one story $474,450

 

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

Pricing on these homes is subject to change at a moments notice.  If you would like to tour these homes give me a call at 559-246-8991.  I would love to show you these homes, other builder’s homes or any resale home on the market.  The best thing is that my services are free to buyers!  Why would  you not have a non biased agent with you while looking at any new or resale home.  Click here to see what is available for sale in real time, in and around the Harlan Creek community.

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

 

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619
New Construction Wilson Windsor Models For Sale at Harlan Creek Clovis CA 93619

Wilson Homes New Construction Windsor Models For Sale at Harlan Creek Clovis CA 93619

Written by Jason Nenadov · Categorized: Uncategorized · Tagged: Addison, Baldwin, best realtor clovis, best realtor fresno, Bud Rank Elementary School, Claremont, Collier, De Wolf & Richmond, Edmond, equity assets real estate buyorsellinfresno.com, Harlan Creek, Harlan Ranch, Jason Nenadov, La Royal, Leo Wilson Homes, new construction homes, resale homes, single story homes, two story homes, Wilson Homes, Windsor Model Homes

Mar 01 2018

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

 
You can probably recall the Buchanan Estates floor plan that has the enclosed patio in the middle of the home’s footprint, well it is back and better than before.  Introducing the new and improved Buchanan Estates homes which combine some touches back from around 1998-2002 and blends them with modern designs.  

 

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619
The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

I recently toured the Mercer plan which is 3,817 sq. ft. and larger than any of the original Buchanan Estates plans by 200-300 sq. ft.   I was dazzled with what I saw on the inside and out.  Now The Reserve collection in Clovis is just on the border of Harlan Ranch on the west side of De Wolf so it has no homeowners association or monthly dues.  There are currently three plans built on the corner of De Wolf right now.  The first one, which is the Mercer plan, is on the the corner of Loyola.  The other two are just to the south on the corner of the next two streets.

 

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619
The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

There are only around 23 lots available at this location and a Wathen Castanos representative told me yesterday that about half of the lots are already spoken for even though the models are the only ones that are fully finished at this time.  I wish I would have visited these homes earlier in the year as they seem like they will not last long.  I took a bunch of photos so that you can enjoy these homes from the comfort of your home or smart phone, etc.

 

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619
The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

If you are looking for an estate sized home on an estate sized lot in north Clovis then you need to consider The Reserve.  I don’t have any pricing info on these homes but it is probably in the $600,000-$800,000 range.  Leo Wilson is building at Harlan Creek just to the south of The Reserve.  Wilson has many homes built out there already and construction crews seem to be working at a fierce pace on that development.  I was told by a Wilson representative yesterday that the Windsor and Reagent Park homes are going in at Harlan Creek.

 

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619
The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

If you want to tour any resale homes or new model homes give me a call, Jason Nenadov Broker and Realtor at 559-246-8991.  I can show you both new construction and resale homes and help you along the way until you decide if you prefer a resale home or a new construction home.  To see what homes are selling for in and around The Reserve click here.

 

Master Bathroom
Master Bathroom

 

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619
The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

 

Kitchen
Kitchen

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619
The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

 

The Reserve Buchanan Estates Inspired Wathen Castanos Homes Clovis CA. 93619

Written by Jason Nenadov · Categorized: CA 93619, Uncategorized · Tagged: 93619, best realtor clovis, best realtor fresno, Buchanan Estates, buyorsellinfresno.com, Clovis Real Estate, equityassetsrealestate.com, estate sized homes, estate sized lots, interior courtyard, Jason Nenadov, Kensington, Mercer, Porter, single story Wathen homes, The Reserve, Wathen Castanos

Nov 14 2017

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno, CA. 93720?

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno, CA. 93720?

 

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720
Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720?

Those who can fix up their homes by themselves or mostly by themselves could make a profit in this market.  I recently heard someone who is handy say that they wanted to find a home that was in need of repairs.  They would repair it with modern touches and then eventually sell it and buy the next fixer.  Each time they would take a bigger chunk of equity and apply it to the next purchase until eventually they wouldn’t have a mortgage and could buy a house for cash, etc.  Now that is a nice plan as long as the market is in a long bull run as we have witnessed for almost the past decade.  However if the market stays stagnant or crashes then this plan would need to be altered most likely.

 

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720
Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720?

This plan would probably only work if they waited at least two years before selling and buying another house due to capital gains laws.  If you live in a house for 2 out of the past 5 years you can receive up to $500,000 in gains without paying any capital gains taxes if you are married and live in CA.  So it isn’t a typical fix and flip game plan where the property is disposed of ASAP.

 

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720
Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720?

But the real intent of this blog was asking yourself if you are handy and capable of fixing up a home that you purchase.  I know that when my wife and I bought our first house the home projects were initially fun.  The fun lasted for about three months when we had finally changed the colors of 3 bedrooms and a bathroom.  Those who buy homes to fix up are grinders at heart.  They are not the type that needs to watch their favorite show or sitcom every evening.  They are working hard with their hands afterwork and after hours into the night.  Not only does it require the know how but the will to follow through.  My home is 25 years old and many aspects of it could be upgraded or updated.

 

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720
Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720?

But even routine maintenance such as cleaning rain gutters doesn’t even come easy for me.  I recently switched out some light switch covers from the old beige ones to nice and new white ones.  In the process, I killed power to three times as many switches and outlets as I upgraded.  A knock on the electrician neighbor’s door was my next step in my home’s improvement.  I think most guys take pride in being able to fix something or be handy.  For me if I have not experienced fixing something before then it seems to normally take me three or four times as long to finish the job as if I hired it out.  Often times with the multiple trips to home depot it can add up to costing me more to fix it on my own then hire it out.  So before you dive in and buy that fixer upper, audit your handiness skills and your will power to follow through with such an enormous task.  Click here to see what is actively for sale in real time in Fresno, CA. 93720

 

Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720
Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720?

 
Do You Have What It Takes to Buy A Fixer Upper Home in Fresno CA. 93720?

Written by Jason Nenadov · Categorized: Uncategorized · Tagged: 93720, best realtor fresno, buyer representation, buyorsellinfresno, equity assets real estate, Fix or Flop, fixer upper, Fresno CA Homes, Fresno Real Estate, full service broker, handyman, HGTV, listing agent fresno CA, sweat equity

Jason Nenadov
jasonnenadov@gmail.com
559.246.8991
CA. BRE # 01412695

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