Mitten Realty Group

Scott Fader & Gary Brincat — Top Producers — Oakland 
(this was an article in the Real Producers of Oakland County, Michigan magazine)                                       

 

Committed to Clients, Agents and the Community

 

By Jane K. Asher, Ph.D.

 

For Scott Fader and Gary Brincat, real estate is more than a business opportunity that feeds their families: It’s a venture of love fueled by their passion for the industry and commitment to their clients, agents and the community. Through Mitten Realty Group, LLC, Co-Owners Scott and Gary have leveraged their combined 40 years of real estate experience in buying, renting, flipping and selling homes —  as well as their extensive training in contract negotiations — to build a thriving veteran-owned business and one of Michigan’s 2019 top-25 firms founded on the simple principle that there is always time to help someone else succeed.

 

“We don’t keep score, and we help each other whenever possible,” Gary said. “We answer our agents’ calls 24/7 and make sure that our agents have access to us, no matter what day or time — this allows them to have success with their buyers or sellers”

 

“We don’t just claim to provide training; we actually provide great individual and group training,” Scott said. “We also minimize monthly fees and costs.”

 

Another way that Scott and Gary distinguish their business and actualize their commitment to others is through their ongoing efforts to help veterans, law enforcement, firefighters and other first responders. As honorary members of the Detroit Police Lieutenants and Sergeants Association (DPLSA), Scott and Gary have sponsored the DPLSA Honors Ball — an event that recognizes fallen officers —  as well as golf outings to fundraise for Detroit police. Mitten Realty Group also partners with a local non-profit that fundraises for local and national charities through real estate, in addition to reducing commissions or returning 33% of their commissions back to first responders and military members following the purchase or sale of a home.

 

“Beyond being a veteran-owned business, what motivates us is that so many people put their lives on the line, sacrificing time, family and themselves for others. We like to make sure these people know they are appreciated,” said Scott.

 

Before becoming a REALTOR®, Scott worked with his father’s CPA firm, which handled accounting for investors and real estate agents. He then was presented with an investment opportunity and earned his real estate license in 2003. In 2008, when Scott was 35 years old, he took a hiatus from real estate to join the army where he was deployed to Afghanistan. He then went on to earn his broker’s license in 2018. 

 

Gary has spent 20 years buying, flipping and investing in real estate, and he also served as vice president of sales for a multinational marketing company and a multinational software company. Then about three years ago, Gary decided to leave the corporate world and become a REALTOR®, and that’s when he teamed up with Scott to build Mitten Realty Group.

 

Scott and Gary, both of whom were multi-million dollar producers in 2019 and are on track to increase production in 2020, are well versed in all aspects of the business, but Scott gravitates toward marketing and working with buyers while Gary enjoys working with sellers. Right now, they are focused on growing their team with individuals who share their passion for real estate and dedication to helping others, which they say can be challenging at times because they are looking to work with people who look beyond the profit. They shared that one of their goals is to create a “long-term culture and environment where people look forward to coming to work each day.” They are also grateful for all of their agents. “We are like a family,” Scott said. “Without our agents, we would not be growing as we are.”

 

When Scott isn’t with his work family, he enjoys spending time with Sara — his wife of 20 years — and their son Diego who they adopted from Guatemala in 2006. The Faders travel to Disney World several times a year, and Scott says they are “Disney addicts.” Scott, who regularly takes online classes for both business and personal growth, also says that he is “addicted to education” and loves reading and watching biographies.

 

Gary and his wife Romiana — who was born in Bulgaria — met in France and like to travel. They have two children and four grandchildren. Their daughter Nelly is a commercial property manager, and their son William, who is FAA licensed to fly drones,  is an agent and photographer at Mitten Realty Group. Gary is a 7th degree black belt and owns two martial arts schools. He also developed a two-credit hour continuing education real estate safety class, trains police in self-defense, and enjoys business, mystery and puzzle-solving books.

 

Scott and Gary agree that success is measured on an individual, team and company basis, and they both strive to succeed in all three areas. They also believe that success will come to those who work at it. “Putting in the time, working through the ups and the downs and being able to see mistakes as opportunities will lead you to the paths you want and the goals you seek,” Gary said. “We all run into issues with deals, clients, mortgage companies and title companies —there are a lot of moving parts — but we know each time we encounter an issue, we learn from it and are more likely to be prepared for the next transaction.”

 

For Gary, the most rewarding aspect of his business is helping someone achieve something they didn’t think was possible; for Scott, it’s helping veterans and first responders. Collectively, they care a great deal about their clients, agents and community. “Without our clients, agents and community, Mitten Realty Group would not be here,” they said. 

Contact Mitten Realty Group at 248-294-7850 or info@mittenrealtygroup.com

Real Estate Calculations for Investors

There is more to understanding investment real estate than the home itself. There are decisions that will need to be made before you purchase the property. You will need to know certain calculations so that you can make the right decision. One decision you will need to make is, are you holding the property to be rented out or are you going to rehab it and flip the property.

Remember, your profit is usually determined when you buy the home, not when it sells. This means if you buy the property for the right price, you will have the profit margins you are wanting.

Using a Realtor, you can get help with some of the information you will need to complete the formulas or double check the numbers. Websites like Zillow and other public sites that offer FREE VALUATION can provide inaccurate information.

Gross Scheduled Income

This real estate formula lets you know how much income your property will generate if all units within it are rented and if there are no defaults in rent payments. This can be a useful measure to compare with your actual income.

Talk with your Realtor and get some rent comps for the area. Many investors guess the rents or place what they think they will be asking. Rental comps are as important as sales comps. You want to be realistic in your calculations. If you get more than what you expected…GREAT!

Gross Scheduled Income = Rental Income + Lost Rental Income from Vacant Units

Gross Operating Income

This figure reflects the gross operating income in addition to all other sources of income from your rental property. This can include revenue from parking spaces, laundry, public vending machines, or others.

Gross Operating Income = (GSI – Lost Rental Income from Vacant Units) + Other Income

Net Operating Income

To use the net operating income formula, you first need to figure out your gross operating income. Once you have that figure, you subtract your operating expenses- things like insurance and maintenance costs. You should note, however, that things like investment property depreciation and interest payments do not factor into operating costs. 

Net Operating Income = Gross Operating Income – Total Operating Expenses

Capitalization Rate

The cap rate is one of the most important real estate formulas. The cap rate formula compares an investment property’s net operating income with its market value, allowing investors to quickly compare properties to see which one is most worth it.

Cap Rate = Net Operating Income / Market Value of Property

Cash on Cash Return

Figuring out your cash on cash return is crucial in real estate investing. It is a widely popular real estate formula since it allows investors to compare investments and evaluate the most profitable one based on the terms of financing. A spreadsheet is a good way to see the side by side comparison between properties that are similar. By setting up the spreadsheet with formulas, you can quick input the basic numbers and see which one is the best property for your investment.

To use the cash on cash return formula, you simply divide your net operating income by your total cash investment. Typically, your total cash investment will include the down payment, closing costs, renovation costs, and any other upfront fees you paid to acquire the investment property.

Cash on Cash Return = Net Operating Income / Total Cash Investment

Equity Build-Up Rate

Smart real estate investments do not always come in the form of immediate income. Some properties are great investments due to their potential to build equity, therefore becoming more valuable assets in the future. This simple real estate formula can help in measuring these gains.

Consulting with your Realtor is also a good way to see how quickly an area is growing in value.

Equity Build-Up Rate = Mortgage Principal Paid (Year 1) / Initial Cash Invested (Year 1)

Price to Rent Ratio 

This figure shows you how much rent you will be receiving, versus the price at which your property was purchased. This can be useful when comparing residential real estate investments. Like other calculations, a spreadsheet with formulas can help make quicker decisions.

Price to Rent Ratio = Purchase Price of Property / Annual Rental Revenue

Price Per Square Foot

Along the same lines, the price per square foot real estate formula can be useful when comparing investments. Savvy investors can use this calculation to evaluate if a rental property is overpriced before it is purchased. Your Realtor can help you evaluate this more in depth by pulling both rental and sales comps, which list out the price per square foot (as-is, not post-rehab).

Price Per Square Foot = Market Value of Property / Property Square Footage

Return on Investment

The return on investment formula allows you to see how much of your initial investment you can recoup annually.

Return on Investment = Annual Returns / Cost of Investment

Cash Flow From Operations

Successful real estate investments will involve more money coming in than going out. You need to subtract your capital expenditures (roughly defined as large expenses that do not reoccur) from your net operating income to figure out your cash flow from operations.

Cash Flow From Operations = Net Operating Income – Capital Expenditures

Cash Flow After Financing

Considering that most real estate investors have borrowed money in order to make their investment, this cash flow formula can provide a better idea of what your cash flow is like.

Cash Flow After Financing = Cash Flow From Operations – Financing Costs

Occupancy Rate

This figure reflects the time that an investment property is rented out over a period. Your occupancy rate is one of the most important indicators of your success, and a low occupancy rate can let you know that action is needed from your end.

Low occupancy can occur when properties are in need of repair. People tend to look for a replacement place to live if a landlord is not keeping the place livable or did not complete some repairs required previously. Landlords can “promise” to fix things to get people to move it, in turn causing them to move out as fast.

Occupancy Rate = Number of Days Occupied / Total Number of Days in One Year

Break Even Ratio

This figure is often used to evaluate risk when making a real estate investment. Too high of a figure when using this real estate formula can indicate that it will be an uphill battle to break even with an investment property and recoup debts.

Break Even Ratio = (Debt Servicing Costs + Operating Expenses) / Gross Operating Income

Gross Rent Multiplier

The gross rent multiplier real estate formula allows investors to figure out the market value of a rental property. This is especially useful when selling a rental property, as it allows you to set the right price the first time.

You will want to compare notes with a Realtor. This calculation can help set the value based on the numbers, but it is always good to have a second pair of eyes.

Gross Rent Multiplier = Market Value / Gross Scheduled Income

Debt Service Coverage Ratio

This real estate formula can be used to figure out the current cash flow you have available to recoup the debt which financed your investment.

Debt Service Coverage Ratio = Net Operating Income – Annual Debt Service

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan (Ohio and Florida in 2021), please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

For Sale by Owner and the Buyers Agent

Being a For Sale by Owner or FSBO, you will most likely still be dealing with a buyer’s agent. Many times, these buyer’s agent will seem as though they are there to help you, but THEY DO NOT REPRESENT YOU – THEY REPRESENT THE BUYER.

When you are selling a property or business on your own, be aware of the overly helpful buyer’s agent who has NO AGENCY AGREEMENT with you. They will present the offers on their forms and make all sorts of suggestions which will “HELP THE PROCESS ALONG” – most likely in their clients’ favor.

Read the purchase agreements all the way through and look for some of the following items:

  • OTHER ITEMS SECTION:
    • This is a section in almost all purchase agreements where custom requests are done, such as:
      • Seller to Pay XXX in Concessions
      • Seller to make all repairs from inspection
      • No EMD
      • EMD to be returned to buyer under all circumstances
    • Property Description Section:
      • Lists Appliances
      • Does it list other items you did not want to include
    • Taxes – make sure you are only paying for taxes on the days you are responsible.
    • Repairs – some purchase agreements have a section for inspection and municipal repairs and who pays them.

 

The buyer’s agent may also want to suggest you work with their title company. If your state allows, choose to do a split closing where you have a title company separate from theirs. Some states the seller picks the title company and other states the buyer does. There are also some states where an attorney is involved in all closings. You may want to reach out to a title company in your area to find out how your state does closings – you can call Inked Title who works nationally and someone can help provide information at 248-617-0004 or email info@inkedtitle.com

Do not feel pressured to use any services offered by the buyer’s agent.

(title company, home warranty, repair company, etc.)

 

Selling your home on your own has many moving pieces. Stay in control of your deal and stay in contact with the people you choose to provide services. A lawyer is always a good idea or a transaction coordinator to help review documents and get you to the closing with the greatest of ease.

A transaction coordinator is a licensed real estate professional who will charge a small fee or percentage of the sales price (much lower than the full service Realtor) to review docs, may help negotiate, and handle the process from offer to close to you getting paid.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in  Michigan, please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

 

 

 

 

 

When you are selling your home, whether it is For Sale by Owner or traditionally with a real estate agent/Realtor, you will have to understand the offers presented to you and the financing they have been approved for. Each type of financing can be different, and each have their pros and cons. Let us look at an VA loans.

A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multi-unit properties, manufactured homes and new construction. The VA does not originate loans, but sets the rules for who may qualify, issues minimum guidelines and requirements under which mortgages may be offered and financially guarantees loans that qualify under the program.

The basic intention of the VA home loan program is to supply home financing to eligible veterans and to help veterans purchase properties with no down payment. The loan may be issued by qualified lenders.

The VA loan allows veterans 103.3 percent financing without private mortgage insurance (PMI) or a 20 percent second mortgage and up to $6,000 for energy efficient improvements. A VA funding fee of 0 to 3.3% of the loan amount is paid to the VA; this fee may also be financed, and some may qualify for an exemption. In a purchase, veterans may borrow up to 103.3% of the sales price or reasonable value of the home, whichever is less. Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the loan amount, allowing for larger loans with the same payment. In a refinance, where a new VA loan is created, veterans may borrow up to 100% of a property’s reasonable value, where allowed by state laws.

VA loans allow veterans to qualify for loan amounts larger than traditional Fannie Mae / conforming loans. Standard VA guidelines state that the VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills, although there is no hard limit to the DTI for a VA home loan. Veterans have been known to be approved with a DTI of up to 80%, if there are other factors that strengthen their loan application. These factors include a low Loan-To-Value (LTV), sufficient residual income, additional income received but not used to qualify for the loan, good credit, etc.

Let me break down the pros and cons of this type of loan. This will allow you to get some insight on how the borrower was approved and what guidelines they will be facing.

VA Loan Pros

Here are some of the major advantages of the VA home loan program:

  • No down payment: This is such a significant benefit. Qualified borrowers can borrow as much as a lender is willing to lend, all without needing a down payment. FHA loans typically require a 3.5 percent minimum down payment, and for many conventional loans it is a 5 percent minimum. On a $175,000 home purchase, that is a $6,125 down payment for FHA and a $8,750 for conventional.
  • No private mortgage insurance (PMI): This is required for conventional borrowers who cannot put down at least 20 percent. FHA borrowers have a couple forms of mortgage insurance, one that is paid up front at the time of purchase and another that is paid monthly. PMI typically disappears once you have about 20 percent equity in your home. There is no PMI on a VA loan.
  • Higher allowable DTI ratio: Lenders will look at the ratio of your total monthly income to your total monthly expenses. The VA typically wants to see a debt-to-income ratio of 41 percent or less. That benchmark is higher than what you would see on conventional and even FHA loans. And it is possible for qualified borrowers with a DTI ratio greater than 41 percent to still secure VA financing.
  • No prepayment penalty: You can pay off your VA loan early with no fear of getting hit with any prepayment penalties.
  • Refinance options: The VA home loan program has a pair of refinance loans that can help qualified buyers lower their monthly payments or get cash back from their equity. The Streamline refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL), is for homeowners with existing VA loans. The VA Cash-Out Refinance allows VA and non-VA homeowners to refinance and get cash at closing to pay down debt or take care of other needs. Refinancing may result in higher finance charges over the life of the loan.
  • Flexibility with bankruptcy and foreclosure: Some borrowers who qualify can be eligible for a VA home loan two years after a bankruptcy or foreclosure. The wait can be much longer for different loan types.

VA Loan Cons

Now here are some of the potential drawbacks of the VA loan:

  • It is not for everyone: The VA loan program is a benefit you must earn, which makes it relatively rare to obtain compared to other loan products. VA home loans are only available to eligible service members who have served their country in the United States military. Spouses of veterans who have died in the line of duty or because of a service-related disability may also be eligible.
  • VA Funding Fee: All VA loans come with a mandatory VA Funding Fee charged by the VA. This fee goes directly to the agency and helps keep the VA home loan program running for future generations. It is a cost you can finance into the loan, and borrowers with service-connected disabilities are exempt from paying the fee. But this is not something you will pay on a conventional loan or FHA loan. You can learn more about how much the VA Funding Fee is, who pays what and who is eligible for a refund.
  • They are intended for primary residences: This is not a loan program you can use to purchase a second home or an investment property.
  • Sellers are not always on board: Some home sellers are not open to receiving offers from VA borrowers. A lot of this undoubtedly has to do with some of the myths and misconceptions surrounding VA loans.

 

The information here is provided for informational purposes. The writer is not a mortgage or financing professional. It is always best to discuss financing matters with a mortgage or financing professional.

As a veteran myself, I have used this loan product myself and had an amazing experience. Besides the loan product, it takes a good mortgage company to make the who loan process easy and streamlined.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan (Ohio and Florida by 2021), please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

A buyer’s market occurs when the supply (available homes for sale) exceeds demand (the number of buyers seeking to purchase homes).

FOR BUYERS: If you are buying a new home, a buyer’s market is the ideal time to make your move. You might be able to buy a great home for a lower cost than you would in a seller’s market. This is the best market for you to get equity from the start. Your Realtor should be able to do the homework and know what the market is trending at regarding pricing for the area you are looking in. Not all homes will be affected by buyer’s markets. Sellers who do not need to sell, sellers who can wait out the current market, and specialty homes where the seller knows there is value outside of market conditions. There are still multi-offer situations in a buyer’s market. This situation may drive the price back to asking or above. Decisions will be made to get your dream home above what you were expecting or move on to find the bargain during the buyer’s market.

FOR SELLERS:
If you are trying to sell your property in a buyer’s market, your home may remain on the market longer before you’re able to secure a buyer due to the large number of available properties. You may also have to lower your listing price or make other concessions in order to secure a buyer. Your listing Realtor should help you find ways to maximize the value of your home. There are things you can do and offer to attract a buyer who is willing to pay the right price for your home. In a buyer’s market, you want to 1) make sure your home in priced right 2) make sure your home in prepared right and 3) make sure you home is marketed right (show all the value).

FOR SALE BY OWNER SELLERS: Many people try to sell their home For Sale by Owner during a buyers’ market in order to save money on commission. For some, this will work, but for many, they may not have the knowledge of the market, and negotiations skills in order to get the maximum pricing for their home. Using a Realtor can help you make more money on the sale of the home, above what you would have paid out in commission. Realtors do the research, know the values, and can make sure the purchase agreements are not in favor of only the side of the buyer. When a buyer’s agent sees that the property is FSBO, they tend to be more aggressive with lower offer and requesting additional concessions the seller may not realize they are paying out. Call on the professionals to help guide you through this market.

If you have any questions about real estate or would like to buy or sell a home, Investment property, or commercial property in Michigan, please e-mail us at info@mittenrealtygroup.com or call 248-294-7850.

Thank you,

Scott Fader and Gary Brincat
Mitten Realty Group, LLC

Mitten Realty Group is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.