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Misconceptions in real estate markets by Private Money Loans Arizona Finance Articles | July 9, 2010
Proper evaluation of the property, keeping in mind various factors like depreciation, repairs, mortgage Air Max 270 Kopen , etc would have saved this investor from wasting his time and budget.


Welcome to Real Estate Investing Today brought to you by private money loans arizona. My name is Ryan Wright and thank you for joining me. Today, I would be talking about the mistakes made by the real estate investors. The biggest of them is the incorrect evaluation of property which can pose a threat to the whole loan process. This can be explained in an example given here which actually happened in our office today. A borrower came to us and claimed that his property was worth $90,000 and wanted a loan of $65,000. The borrower completed his loan application process. We might have facilitated his application but an interesting thing happened when we did evaluation of the property on our own. We sent two evaluators on the ground to have a look at the property asking them to evaluate it in terms of its market value.

Now, about these on the ground evaluators, they are totally independent. They have no idea of how much the property is worth beforehand. We do not inform them of your claim of property?s worth or how much you want the loan. Their basic duty is to visit the property and make a fair evaluation on their own when the property is fixed up. They will calculate its worth keeping in mind property?s market value Air Max 2019 Kopen , repairs and any other factor that may have any implication on its evaluation. Basically, their whole operation is independent. They are neither influenced by us nor informed of your application.

The evaluators came up with an interesting figure. They said the property was worth not more than $45,000 fixed up. This was quite a revelation as the borrower was claiming its worth 100% more than that. The entire outlook of the loan application process changed. Now, we could not approve a loan of more than $17,000 because of depreciation factor in the market along with some other issues. Depreciation of a property is calculated on the following formula: if the value of a property depreciates more than 11% in one year, we have to take the additional percentage off the loan value that we can approve. So Nike Air VaporMax Kopen , a 20% depreciation means 11% depreciation and 9% off the loan value.

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