Danville Home Buyers

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As some of you know, I love to do Open Houses. It’s old school Real Estate and I still believe in it.

Not only do Open Houses showcase a home to potential buyers and the community at large, they are a great source of new clients for me. Aside from referrals, Open Houses are where most of my clients come from. I love all the interesting people I meet, and it’s a great way to casually interview each other in an informal way.

Last Sunday I met a very interesting fellow at my Open House. He is an Investment Banker with Morgan Stanley and he and his wife are making the sojourn to the East Bay from The City, as so many young families do when they start thinking about children. It’s exactly what my husband and I did 23 years ago when we started our family. Back then we lived at the base of Coit Tower, then moved first to Lafayette, then to Alamo.

This client began talking about his current home in The City, which he hopes to keep as an income property. Lending guidelines have tightened up around keeping second properties, so I wanted to make sure he was well educated on the criteria around that. Things like equity level and debt to income ratios have changed significantly after the bubble burst, and it’s not as easy as it used to be to keep your existing home and just buy another one. Probably a good thing – still it’s important to understand that going into the home buying mode.

So Mr. Investment Banker started talking about a loan program Morgan Stanley offers called Pledge and Portfolio. A borrower can use invested assets to fund the down payment on a home purchase AND keep the money invested!! I’d never heard of such a thing! And even better, the purchase doesn’t have to be a home for the investor! He/she can be helping a child or anyone else with a home purchase. How can this be, she said scratching her head?!?

In all my experience, down payments had always come to the transaction as cash. That typically meant liquidating funds, paying taxes and shifting one’s investments from securities to equity in Real Estate. This program allows you to do BOTH!! With the SAME money. Truly letting your money do Double Duty! When my parents helped my sisters and me buy our first homes many years ago, my Dad had to sell stock and send us cash. With this program, he could have kept his securities invested, AND pledged it toward my down payment!

How cool is that?!? Pretty cool I think. I’m sure there are account minimums and other restrictions, but I still think it is so interesting that one can keep assets invested and use that same money for Real Estate investing for themselves or for their children. Now THAT’s having your cake and easting it too!

Have a great week!!

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