Member Outreach Condo Program

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Join us for one of six Member Outreach Meetings, part of our CAR2U program. FREE exclusively to C.A.R. Members, we come out to your neck of the woods and offer a unique session to help educate you on what's happening at C.A.R., news impacting your industry, and how to be more effective and profitable. It's the Chicago Difference. Come to as many sessions as you like, or simply join us for the ones most convenient to you. Speakers will engage the audience with the current must-know items of today's market, as well as information to share with fellow agents and your clients.

Morning sessions include a continental breakfast and evening sessions include hors d'oeuvres and refreshments.

It's our pleasure to bring CAR2U through our Member Outreach Meetings - we hope to see you. Register Today!

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  • hello
    Am jessica, can i know you well ?,
    please contact me truth my e-mail inbox
    (jessicajohn22@ymail.com) and i will tell you
    more of me ok?, waiting!!
    cheers!!!!!
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Member Outreach Condo Program

  1. 1. Be a Condo Sales Pro CAR Member Outreach www.MarkiLemons.com
  2. 2. Focused on Real Estate!Marki LemonsSpeaker@Marki_Lemonshttp://www.linkedin.com/in/markilemons#CARMO
  3. 3. Condos Are Selling Focused on Real Estate!
  4. 4. Chicago Condo Selling Price Focused on Real Estate!
  5. 5. S I M P L I F Y I N G T H E D I F F I C U LT "A condominium or condo-conversion development is warrantable ADPR if it has features that lenders view as protection against hazards that threaten the value of the units”5 www.adprnetwork.com
  6. 6. https://entp.hud.gov/idapp/html/condlook.cf m S I M P L I F Y I N G T H E D I F F I C U LT7 ADPR www.adprnetwork.com
  7. 7. S I M P L I F Y I N G T H E D I F F I C U LT8 ADPR www.adprnetwork.com
  8. 8. Some things that impact Warrantability… S I M P L I F Y I N G T H E D I F F I C U LT (in no particular order) # of (pre)-sales Market conditions and absorption Proven demand for units Owner occupancy ratio Investor ownership ratio HOA finances HOA control Builder warrantees Completion of common elements Phasing and add-ons Commercial space # of units in project or phase ADPR New construction or conversion Gut rehab, non-gut rehab conversion Marketing/sales programs Builder reputation/experience Legal aspects Architect’s report Quality construction Engineer’s report Legal document requirements Phase at time of application9 www.adprnetwork.com
  9. 9. What is the problem? S I M P L I F Y I N G T H E D I F F I C U LT • The rules are complex, and change all the time. • The requirements of Fannie Mae, Freddie Mac and FHA/VA (more than 95%+ of all condo loans) increased, and now strictly applied. • Lenders used to have flexibility with respect to warrantability, and non-warrantable finance options were readily available. ADPR This is no longer the case! • Lenders have additional property criteria. Overlay • Additional borrower criteria. (Minimum credit scores affecting LTV, PMI, interest rate, other).10 www.adprnetwork.com
  10. 10. Warrantability is not specific… S I M P L I F Y I N G T H E D I F F I C U LT • Different rules depending on project characteristics. • Different rules as the development progresses. • Different rules for different lending programs. ADPR • Rules change all the time. • Some rules are subjective (opinions of decision makers).11 www.adprnetwork.com
  11. 11. Possible implications of non-warrantability S I M P L I F Y I N G T H E D I F F I C U LT • No buyer financing can be obtained - at all! (If you think this is not true, just google it). • No buyer financing can be obtained until the project is complete, or nearly complete, and even then there ADPR may be sales-stopping limitations. • Buyers may only be able to get a non-warrantable condo loan at a (0.50-2.00%) higher rate. • Loans at more than 80% loan to value may be difficult, or impossible to obtain.12 www.adprnetwork.com
  12. 12. If the project is warrantable… S I M P L I F Y I N G T H E D I F F I C U LT • Mainstream mortgage programs available at market rates. • Higher loan limits (up to $729,750 per unit) may apply. ADPR • Financing to 80%-90%-95%-100% LTV. • More options for hard to place loans available. • Financing can be effectively included in marketing/sales promotions, and deal structures.13 www.adprnetwork.com
  13. 13. Warrantability is always temporary… S I M P L I F Y I N G T H E D I F F I C U LT Re-approvals are required - or may be desirable – due to: 1. Construction/rehab progress. ADPR 2. (Pre-) sales (as often as with every single sale)! 3. Approval expirations. 4. Other events.14 www.adprnetwork.com
  14. 14. What to do… S I M P L I F Y I N G T H E D I F F I C U LT Warrantability drastically increases marketability! • Planning, and a pro-active stance is critical. It should start as early as property acquisition. • Position the project to become warrantable at the earliest opportunity. ADPR • Ensure continued warrantability and availability of lending programs to enable marketing/sales. • Develop alternate buyer financing options where warrantability cannot be (initially) secured.15 www.adprnetwork.com
  15. 15. FHA Condominium Project Approval S I M P L I F Y I N G T H E D I F F I C U LT Spot approvals not available, entire buildings only16 ADPR www.adprnetwork.com
  16. 16. FHA Condominium Project Approval S I M P L I F Y I N G T H E D I F F I C U LT  Common areas must be 100% complete  Final or temporary certificate of occupancy must be 12 months old ADPR  50% owner occupied  10% reserves  HOA can be in control of developer as long as CO is more than 12 months old.17 www.adprnetwork.com
  17. 17. FHA Condominium Project Approval S I M P L I F Y I N G T H E D I F F I C U LT  30% Presales needed  Must be 50% owner occupied  Certificate of occupancy must be less than 12 months old ADPR  For projects with final CO issued more than 12 months ago, need 50% pre- sales  50% presales needed after June 30, 201118 www.adprnetwork.com
  18. 18. Non-Warrantable Condominium Projects S I M P L I F Y I N G T H E D I F F I C U LT  Projects which do not qualify for Fannie/Freddie financing  20% down payment ADPR  620 minimum FICO19 www.adprnetwork.com
  19. 19. Non-Warrantable Condominium Factors S I M P L I F Y I N G T H E D I F F I C U LT  Less than 50% pre-sales  Can do “first-in” condos  More than 50% investor concentration  Waiver when purchasing unit as ADPR primary/second home  More than 20% commercial space  Exception granted with compensating factors20 www.adprnetwork.com
  20. 20. Docs needed for Condominium Project Approval SIMPLIFYING THE D I F F I C U LT  Budget with 10% of the association dues as reserves  Completed Condo Questionnaire  Articles of Incorporation  Must be in good standing and registered with the state ADPR  Recorded and signed declarations and by- laws  Plat map or survey of the floors  Master Insurance Policy  Certificate of Occupancy for all units21 www.adprnetwork.com
  21. 21. Example of Sample Budget S I M P L I F Y I N G T H E D I F F I C U LT GARDENS AT SUNSET COVE PROPOSED OPERATNG BUDGET -- COMMON EXPENSES as of Jan 1, 2011 2421 2423 2425 2427 2301 2303 2305 2307 Monthly Proposed Assessment Collected 172 202 202 172 172 202 202 172 Annual Operating Revenue Per Unit $ 2,067 $ 2,426 $ 2,426 $ 2,067 $ 2,067 $ 2,426 $ 2,426 $ 2,067 Unit 2421 2423 2425 2427 2301 2303 2305 2307 Allocation 11.5% 13.5% 13.5% 11.5% 11.5% 13.5% 13.5% 11.5% Operating Expenses Telephone (Fire alarm) $ 1,000 115.00 135.00 135.00 115.00 115.00 135.00 135.00 115.00 Water 200 23.00 27.00 27.00 23.00 23.00 27.00 27.00 23.00 Common Electric (allocated) (4) 600 69.00 81.00 81.00 69.00 69.00 81.00 81.00 69.00 Fire Monitoring 720 82.80 97.20 97.20 82.80 82.80 97.20 97.20 82.80 Landscaping 4,000 460.00 540.00 540.00 460.00 460.00 540.00 540.00 460.00 Contingency 1,500 172.50 202.50 202.50 172.50 172.50 202.50 202.50 172.50 Subtotal Operating Expenses (a) 8,020 922 1,083 1,083 922 922 1,083 1,083 922 ADPR Repair and Maintenance Common area cleaning - - - Building maintenance, inspection and repairs 1,200 138.00 162.00 162.00 138.00 138.00 162.00 162.00 138.00 Subtotal Repair and Maintenance (b) 1,200 138 162 162 138 138 162 162 138 Insurance Subtotal Insurance (c) 3,600 414 486 486 414 414 486 486 414 Administrative Subtotal Administrative Expenses (d) 650 75 88 88 75 75 88 88 75 Reserves Roof 1,000 115.00 135.00 135.00 115.00 115.00 135.00 135.00 115.00 Exterior painting 2,500 287.50 337.50 337.50 287.50 287.50 337.50 337.50 287.50 Windows/Doors 1,000 115.00 135.00 135.00 115.00 115.00 135.00 135.00 115.00 Subtotal Reserves (e) 4,500 517.50 607.50 607.50 517.50 517.50 607.50 607.50 517.50 Reserves as % of Revenue Collected 25% 25% 25% 25% 25% 25% 25% 25% Total estimated expenses (a+b+c+d+e) $ 17,970 $ 2,067 $ 2,426 $ 2,426 $ 2,067 $ 2,067 $ 2,426 $ 2,426 $ 2,06722 www.adprnetwork.com
  22. 22. Recorded/Signed Decs and By-laws S I M P L I F Y I N G T H E D I F F I C U LT23 ADPR www.adprnetwork.com
  23. 23. Plat Map/Survey S I M P L I F Y I N G T H E D I F F I C U LT24 ADPR www.adprnetwork.com
  24. 24. LEADS
  25. 25. S I M P L I F Y I N G T H E D I F F I C U LT 20 Billion Page Views Per Month27 ADPR www.adprnetwork.com
  26. 26. Facebook Leads S I M P L I F Y I N G T H E D I F F I C U LT28 ADPR www.adprnetwork.com 28
  27. 27. The Power of Twitter S I M P L I F Y I N G T H E D I F F I C U LT29 ADPR www.adprnetwork.com
  28. 28. http://www.google.com/alerts S I M P L I F Y I N G T H E D I F F I C U LT30 ADPR www.adprnetwork.com 30
  29. 29. S I M P L I F Y I N G T H E D I F F I C U LT The condo options vary widely from Conventional, FHA and VA. Credit scores, HOA budgets, HOA dues paid timely, presale requirements, down ADPR payments, etc And…the rules are changing all the time, which means what might be good today is bad tomorrow.31 www.adprnetwork.com
  30. 30. Focused on Real Estate!Marki LemonsSpeaker@Marki_Lemonshttp://www.linkedin.com/in/markilemons Thank#CARMO You.

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