Listing Courtesy of OCEAN ATLANTIC SOTHEBY'S INTL REALTY
Looked at from one perspective, there has been a “bailout” of enormous magnitude. Okay—maybe you have to expand the meaning of “bailout” just a bit, but if you do, many Dewey Beach homeowners can be counted among the most prominent beneficiaries. We Dewey Beach real estate agents wouldn’t be complaining, either. As bailouts go, it’s the least controversial in a long time—probably because there are no politicians involved (so they aren’t quarreling about who’s responsible for what).
The colloquial term “bailout” has become a household word of late. “Bailout” comes from a straightforward nautical solution for a sinking ship: grab a bucket and bail as fast as you can. The odds of success increase if you can also stop more water from pouring in. Wikipedia’s definition is “providing financial support to a company or country which faces serious financial difficulty.”
It’s no exaggeration to say that after the last decade’s financial meltdown had driven residential real estate prices into the basement, many Dewey Beach homeowners faced, if not actual “financial difficulty,” at least the threat that it might be on the way. If the amount outstanding on their mortgage was greater than their home’s market value, they were said to be “upside down.” Since bailing and buckets don’t have much effect on a boat that’s upside down, perhaps that’s why another term gained prominence.
They were “underwater.”
The coincidence of maritime imagery couldn’t be more apt. During the underwater days, if you were a Dewey Beach homeowner wanting to sell or refinance, more likely than not the outcome left you feeling swamped. The banks were inundated with foreclosed properties. The market was flooded with bank auctions. Property values sank…
But finally, rays of sunshine broke through the storm clouds. The floodwaters receded, etc. etc. etc., until today, when CoreLogic has just come up with some buoyant metrics about the current unambiguous state of the nationwide turnaround. A huge amount of equity has returned to the residential real estate market. The increase in homeowner equity in owner-occupied homes is now $6 trillion since mid-2011—$1.3 trillion in the last 12 months alone!
If that is a type of bailout, it’s one accomplished through the free market, powered by consumers reversing the previous distortion. CoreLogic’s figures include the good news that 92% of homeowners no longer bear the burden of being “underwater.” A relatively short while ago, among those who didn’t own their homes outright, that designation tainted nearly a quarter of the nation’s homeowners.
For several years now, the return of high and dry Dewey Beach homeowner equity has meant a more stable and blessedly predictable marketplace. Right now, some excellent property offerings—not to mention historically low mortgage interest rates—make this a propitious moment to call me to take a look at all that’s available! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com.
In conjunction with the rise in house prices, the profit potential for flipping a home in Sussex County is once more drawing the entrepreneur-minded.
Flipping a home is the process of purchasing a property—often one in a rundown condition—then improving its value and reselling it for a quick profit. Quick is the key word in this strategy, since a fast turnover allows capital to be devoted to purchase and renovation rather than operating and maintenance costs. It’s why successful house flippers generally focus on quick gains over maximizing profits.
While this has proven to be a lucrative strategy in the past, financing has always been the first major hurdle for anyone flipping a home in Sussex County. If you’ve been noticing some of the inviting house-flipping prospects in Sussex County, several financing routes sometimes make such a deal possible:
Larger Down Payment
Flipping a house in Sussex County in the current lending market will often require a significant down payment. Since launching the project might require at least 25 - 40% for financing, it’s essential that you prepare sufficient cash reserves to complete the renovations envisioned—and successful house flippers suggest you add 20% to the cost estimate!
Seller financing—a mortgage provided by the home owner—is also called a ‘purchase money’ mortgage. Sellers may be willing to provide financing if they have had trouble selling their property, which is often the case when a Sussex County home flipper believes its value, can be greatly enhanced by repair or remodeling. Seller financing would be more common were it not necessary that the original owner own the home outright.
Hard Money Loan
Hard money loans—also known as short-term bridge loans—are another common source of financing for flipping a home in Sussex County. Hard money loans are backed by the value of the property rather than the credit record of the borrower, and typically feature a lower loan-to-value ratio than found in a bank mortgage. The added risk has a cost: expect to provide a large deposit and a premium for the loan (often 8% or more).
While sub-prime mortgages may no longer be as readily available as they once were, there are still multiple sources of financing for entrepreneurs who can spot profit possibilities for flipping a home in Sussex County. With real estate prices continuing to rise, this spring again holds promise in the house-flipping arena. Call/text 302-228-7871 or email me, Russell Stucki, REALTOR ® of Beach Real Estate Market to provide detailed information on Delaware homes for sale, investment and commercial properties, luxury and waterfront homes, condos/townhomes, new construction, lots and land, farms and equestrian properties located in but not limited to Bethany, Bethel, Bridgeville, Dagsboro, Delmar, Ellendale, Fenwick Island, Frankford, Georgetown, Greenwood, Harbeson, Laurel, Lewes, Lincoln, Milford, Millsboro, Millville, Milton, Ocean View, Rehoboth Beach, Seaford, Selbyville, Delaware.