Lauren Allah talks about real estate and home ownership
The process of home ownership can be a dreadful task (I know because I am currently in the process of getting one). With so much information out there, it can seem daunting to know who to ask for advice. Beaut&Beast had a chance to catch up with a rising star within the real estate community, Lauren Allah. Check out the interview below where she shared tips on buying your own home and real estate as a career:
- What would be your advice to first time homeowners? My advice would be to save as much as you can! The rules and regulations change from state to state so look at your state requirements for employment, credit, and make sure you do not owe any taxes. There are many fees included closing cost, private inspections, down payments, and appraisals that you have to pay for. Therefore, make sure you are setting aside the fess of the sale and purchase of the home.
- What is an idealistic mortgage payment? I recommend not surpassing 25% percent of your income for mortgage payments. It gives you wiggle room for any errors that happen in life, so you do not lose your house if your income changes drastically. If you are maxing out your budget and something happens than that home will immediately get into foreclosure. Remember that just because you are eligible does not mean you should get it.
- What should you look for when buying a home? Be very specific but also realistic about what you want. If you have an idea of what you want stick with your list of “must have” and “not a must have”. Also, look into the school system and make sure the neighborhood accommodates your plans for the future not just the present.
- Can you get an approval for a home loan and have a renovation budget? If the house is in poor shape or too expensive you cannot get a mortgage because it becomes a liability for the insurance company. You have to be realistic about what you can and cannot afford with budgets and how long it will take to complete the renovations.
- Fixer upper versus a newly modeled home? I did a fixer upper; the difference is seeing what type of cash you are working with. If you cannot afford to do all the things you need, do not get it. If you do, a second credit loan to do the renovations the credit interest is going to be higher. When you get a fixer upper there will be expenses that pop up that will not be a part of your monthly budget.
- Is purchasing money-generating property an option for first time homeowners? That is a personal decision; most of those homes the utilities are higher. Many people think it is so easy to be a property owner, understand the hidden fees that come with that property. If the tenant does not pay for two months can you afford to take them to court? You have to get lead based paint, inspections, make sure it is up to city codes, etc. Another option would be that if you can afford to pay a property manager you can pay them 10 percent of your earnings and they take care of everything with the property. Be cautious. It sounds good but the process is difficult, do not be delusional with your credit, assets, or job stability.
- What are the drawbacks and benefits of being a real estate agent? Closing times would be the only drawbacks. It is a form of entrepreneurship because you do not make a dime unless you make a sale. It is good to have a rotating clientele, if you do not have the knowledge of the business and marketing, or good clients you will not make money. If you want to be successful, you will be. People can decide at any moment to pull out. You essentially have to work free, work hard and be prepared for the possibility that it may fall through. If you have children, start as a part time agent and see what your options are. Over 80 percent of realtors in their first year do not make it. Be knowledgeable because you have your clients entire world in your hand, there is no room in this business to make mistakes. People are counting on you.
- What is the process to become a realtor? As an independent contractor, you have to work under a broker once you get your license; most brokers will take on anyone. You are under their umbrella; so look into a place that will give you the most training. Usually when you work under a broker a good split would be the broker receiving 30 percent of your closing profit. The benefits of being under the broker are that you do not have to pay for your own office, signs, office supplies, etc. as part of that deal. There are hundreds of companies out there, find your niche. Find someone who is knowledgeable, look for the fundamentals and a company who trains you and continues to provide education. Every couple of months the real estate changes, every year you have to complete certain hours to learn about those changes in the industry.
- What credit score do you need to have for FHA (Federal Housing Authority)? A good credit score minimum is a 640 to get yourself in the door. I prefer that my clients have a little wiggle room; I love to work with 700 excellent credit scores because you have a safe gap in case something happens. I have definitely worked with people that started with a 630 credit score and kept bringing it up throughout the deal. The better your credit, the better your interest rate is and it can change drastically.
FHA is a great option to see if you qualify for a home mortgage payment with just 3.5 percent down. CLICK HERE for more information. There are also down payment assistance programs offered on county and city levels so contact your local Housing Authority to see what is available in your area.
CLICK HERE to follow Lauren's social media where she posts tips, advice, and encouragement for women, future home owners, and real estate agents.
CLICK HERE to follow Hood Estates a great source for those looking into real estate investing, tax deed purchases, etc.