San Francisco Area Sells 5,000 To Investors & Home Buyers
March 31, 2009
The market is totally dead, right?
Wrong! Would you believe that about 5,000 homes are selling MONTHLY in the bay area right now. Does not sound like the market is totally dead to me.
One of the interesting stats is that most of these homes sales are going to one of two categories of people:
- Investors; or
- First Time Home Buyers.
Let’s look at the first time home buyers first. One of the things that has happened in the Bay area is the ability to use FHA financing for first time buyers. Previously, the price points made this impossible but today, the FHA limit goes all the way to $729,250. Personally I believe that is a bit ridiculous but that is besides the point. So, with FHA financing, the buyer can put little money down and get into a fantastic deal.
The price points have changed dramatically as well in the area. A couple of years ago, less than 10% of the homes in the area sold for under $300K…… Today, it is over 51%.
Investors are also finding good deals. A recent article in the San Francisco Chronicle described how a real estate agent turned a quick $77,600 profit by buying a house with cash and the reselling. While most investors are buying, then renting, then planning to sell in a few years, there is still a few flip type opportunities that exist.
This Is A Link To The Chronicle Article
Loan Modifications - How To Work With Your Lender
March 30, 2009
Talk to almost any ethical homeowner these days that is having trouble with their mortgage and they will tell you the same story……
I talked with my lender but could not find anybody to help…. they told me my loan would need to be in default before anybody would talk to me seriously.
Suppose that you are actually one of the lucky people who gets to a potentially cooperative lender. Now what? There are some major things you should do at that point to maintain this relationship. Yes, it will be work but it will also potentially be extremely important for your financial future.
To be successful in this process, you have to understand how to make it work for BOTH you and the lender. Keep in mind that this will probably be one of the more emotional things that you will have to go through, so one of the tricks will be staying professional and leaving your emotions at the door. Tough to do I know.
Another common mistake is playing your cards a bit too close to your chest. Any lender is trying to sort through two scenarios: Is this person BSing me or do they have a true hardship on their hands: in the laer case, the LENDER KNOWS is is in their best interest to work with you. As a recent Realty Times article put it:
Only by laying all your cards on the table and disclosing the truth can you begin to attend to the root cause of your financial hardship and then develop and implement solutions that put you back on the path to long-term financial health. Understand your lender’s point of view Regardless of how you ended up in the situation you’re in, blaming the lender or the mortgage broker or loan officer who placed you in your current mortgage does little good, unless you can prove your point in court.
This is just a couple of the tricks to use. If you are facing this situation, then this article is definitely worth the read.
Florida Existing Homes Sales Up —- Again
March 29, 2009
There is a interesting trend starting to develop in Florida with existing homes sales now up for 6 straight months on a year over year basis.
Existing home sales rose 20 percent last month, with a total of 9,858 homes sold statewide compared to 8,181 homes sold in February 2008, according to FAR. February’s statewide existing home sales were 16.7 percent higher than January’s statewide sales.
You have to realize thought that many, many of these sales are coming from discounted sales. According to the Florida Association of Realtors,
Florida’s median sales price for existing homes last month was $141,900; a year ago, it was $199,300 for a 29 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures.
From our perspective however, anything that reduces total inventory on the market is definitely a good sign.
Click this LINK to get a good chart of how each of the Metropolitan Statistical Areas (MSAs) did across the state.
No Bull Real Estate - What’s That?
March 28, 2009
What do we mean by NO BULL REAL ESTATE for investors?
That is a frequent question that we get but fortunately, it is very simple to answer. Here is what I want you to do:
- Go to Google and type in the phrase “real estate investing”
- Look at the ads on the right had side;
- Click through to some of the sites.
When I did that, some of the ads that I see include:
Helps Get You Out of the Rat Race!
Get Rich In The Real Estate Market!
Secrets to Turning $10 into $16,547
In Real Estate Revealed!
Free Real Estate Investing Video.
Make A Fortune In Real Estate Fast!
Grow 1000% Richer With Real Estate
PLEASEEEEEE!!
I have personally participated in over $50 Million in real estate and most of this stuff is junk….. some value, but frequently very little.
We wanted to bring a web site together we some of the most ethical people we have found in the business. While we are huge proponents of real estate investing, we wanted to offer information and properties without all the hype….”Just straight forward information with the Good, The Bad, & The Ugly exposed”.
Go Zone Real Estate: Let Uncle Sam Pay Your Bill
March 28, 2009
Since I have been immersed in the Katrina Go Zone for the last two years, it amazes me that many real estate investors and tax professionals have no idea what the Go Zone is or how it can help them reduce taxes to zero for this year, and potentially 5 years to come.
But I realize that even though I have been living & breathing this for the last several years, in reality this is an obscure piece of tax code that most people, and most tax professionals know nothing about…. That is unfortunate.
For purposes of this blog post, let me give you a short primer of the Go Zone legislation and then point you to a great resource if you want to learn more:
- Tax code enacted in 2005 to help Hurricane Katrina impacted areas;
- Allows investors to deduct up to 50% of the purchase of SOME real estate the first year on their taxes;
- This is called “Bonus Depreciation” and can result in tax savings of 10s, 100s, or even millions of dollars;
- Not a new concept….. The Government used this same trick after 9-11: called the Liberty Zone;
- This best applies to three classes of people:
- Real Estate Professionals;
- People with adjusted gross incomes less than $150,000
- High income W-2 earners but with spouses not working.
- Typically property must be new and put into rental service;
- Currently limited to a few counties in Mississippi and a few parishes in Louisiana;
- You need to own your structure before the END OF 2009 based on current legislation
If you want to learn more about this, go to this resource:
Go Zone Extension For 2010
March 28, 2009
There is still a lot of confusion about when does GO Zone benefits end, especially for real estate investors.
Bottom line is that in certain locations in Mississippi and Louisiana, you can claim bonus depreciation benefits through 2010. In Mississippi, the eligible counties are:
- River;
- Stone;
- Hancock;
- Harrison; &
- Jackson.
For Louisiana, there is a much longer list of parishes including:
- Calcasieu;
- Cameron;
- Orleans;
- Plaquemines;
- St. Bernard; and
- St. Tammany.
In Alabama, no addition counties will remain open for bonus depreciation or GO Zone benefits after 2008.
The American Institute of Certified Public Accountants has published a handy guide that really summarizes all the rules, dates and locations. Click here to get their PDF report.
Fannie Mae Increases Lending Caps
March 28, 2009
To help support the needed financial recovery, Fannie Mae has announced that they are changing their recent investor cap on the total number of mortgages under the same borrower. In the later part of 2008, Fannie Mae reduced the total number of mortgages that an investor can have from 10 down to 4! This resulted in investors scrambling for higher-rate in-house programs and even higher rate private funds for investing.
Now with the issuance of Announcement 09-02 by Fannie Mae, the cap has been temporarily lifted back up to 10 properties. While still sorting to the details, for properties #5 to 10, it looks like 75% LTV with a minimum of 720 credit score and above. The requirements apply to any investment property or second home loan being delivered to Fannie Mae, regardless of whether Fannie Mae is the investor on the borrower’s other mortgages.
You can read more details on this by clicking on the below link: http://www.gozoneonline.com/FannieMae0902.pdf
Remember that most banks, even with this rule, may still limit the total number of mortgages that you have with their institution. However with this said, it greatly opens the doors back up for investors in the GO Zone trying to take advantage of the benefits before the end of this year.
Given this temporary reprieve from Fannie Mae, the timing of the remaining GO Zone benefits, and based on previous Fannie Mae changes over the past 9 months, I suggest that any serious investor who has been wanting to invest in the GO Zone do so now before the cap rules change back and while you can still find high-quality and affordable opportunities.
Some Positive Signs For The Housing Market?
March 27, 2009
Two pieces of data have been reported recently that actually give a glimmer of hope for the battered housing market.
- New residential building permits ticked up 3% from January to February; and
- Sales of New, single family homes increased by 47%
While this is a long way from a rip roaring “Buy” signal, it is an encouraging sign for a change.
According to the Washington Post:
The number of newly issued residential building permits, which offers a glimpse of construction activity in coming months, ticked up 3 percent in February from January. Existing-home sales were up 5.1 percent, according to industry data released this week. And yesterday, government data showed that sales of new single-family homes increased 4.7 percent, the first increase in that market in seven months.
“Between the new and existing-home figures, we have seen a little bit of a pulse showing up in a patient that was thought to be terminal,” said Mike Larson, a housing analyst at Weiss Research.
Of course, most of what happens in housing is going to be directly tied to employment/layoffs caused by the economy. All of us are simply waiting to see how that plays out.
Get The Washington Post Article
Fannie Mae Actually Helping With Short Sales?
March 26, 2009
You are kidding me right? A quasi-government institution actually doing something that makes sense and helping homeowners.
Realcomp II Ltd., Michigan’s largest Multiple Listing Service provider to real estate professionals, Thurdsay announced a partnership with Fannie Mae to create a pilot program for homeowners in fear of foreclosure or staring down the barrel of a short sale.
The program will help streamline the short sale process, making it easier for homeowners who are under water in their mortgages to sell, thus reducing foreclosures by allowing these homes to be sold rather than seized by a financial institution.
My personal experience is that the banks and related institutions are their own worst enemy in this foreclosure crisis. As an example, we had a 1.4 Million dollar, cash offer on the table to buy a complex in SW Florida. Even though the price was competitive, the bank never even bothered to provide any sort of reply to our WRITTEN offer.
Hopefully things are starting to change for the better.
Click Here For The Entire Story
Freddie Mac Feb investment portfolio up 34.7 pct
March 26, 2009
NEW YORK, March 25 (Reuters) - Freddie Mac (FRE.N) (FRE.P) said its investment portfolio grew by nearly 35 percent in February, after shrinking the prior two months, though late payments on loans it guarantees also continued to jump.
The government-controlled mortgage funding company said the unpaid principal balance of its mortgage-related holdings rose to $822 billion at the end of February, for an annualized 12.9 percent increase year to date.
291,000 Foreclosures in Feb. Creates Window Of Opportunity
March 25, 2009
Realty Trac has reported that there where another 291 thousand foreclosures reported in February alone. And this is despite the government actions to date.
While this is not great news for homeowners, it does present some interesting opportunities for investors.
NBC put together a well written piece that is worth visiting.
SYNOPSIS
The growing inventory of distressed homes on the market may be sending shock waves through the economy, but it’s also giving investors a wider window of opportunity.
Despite federal initiatives to stem the rising tide of foreclosures, some 291,000 foreclosure filings were reported in February, the third highest monthly total since RealtyTrac began following the data in 2005. Such filings include default notices, auction sale notices and bank repossessions.
Over the last three years, more than 4 million U.S. homes have been sent into foreclosure.
Whether you’re an investor looking to purchase a rental property, or a homeowner who’s ready to retire and move someplace more affordable, the price of foreclosed properties right now is right,” says Debra March, executive director of the Lied Institute for Real Estate Studies at the University of Nevada Las Vegas, the nation’s leading state for foreclosures.
Foreclosure Auctions? Are You Really Getting A Good Deal?
March 24, 2009
Have you heard about all the foreclosure auctions that are ongoing these days?
These are auctions that are conducted in the final stages of a foreclosure, with the bank hoping to liquidate the property and recover its losses. Generally this is referred to as “selling on the court house steps”. Like any auction, you get a lot of people together, some sophisticated some not, get everybody excited with a good auctioneer, and let the bidding begin.
As these first began in a few areas of the country, you could get some AWESOME deals. Of course as the news spread and the crowds crew, the banks saw a great opportunity to really get top dollar for their foreclosures.
What this means to you, the real estate investor, is that you really have to know your value BEFORE you go to the auction. It is to be determined if the auctions will remain a viable strategy for foreclosure investors.
Here is an example article of what is going on
Buyer’s Flocking To Cheap Foreclosures At Auction
March 23, 2009
In Glendale & Phoenix, buyers have been grabbing up some incredible deals by attending foreclosure actions. As reported:
“A Glendale home that sold less than two years ago for $259,000 sold again three months ago for $113,000. A Phoenix home that fetched $190,000 two years ago just went for $45,900. A Queen Creek home sold for nearly $275,000 when it was built in 2005. Last month’s price: $78,000.”
While this makes for great journalism, one thing that we encourage our club members to remember is
WHO CARES WHAT IT SOLD FOR TWO YEARS AGO.
That is totally irrelevant information at this stage and the only thing that counts is current market information.
Before entering into any such transaction, make sure you know the critical pieces of information:
- Price relative to current market value;
- Cost to repair;
- All issues related to title; &
- Rental amounts (even if you don’t plan to rent);
- Your plan for exit
In these crazy days of real estate, make sure you don’t get caught up in the excitement but instead, know your plan and stick to it.
What About Title Issues?
March 22, 2009
Want to know a dirty little secret about Bank REOs and foreclosures that could cost you 10’s of thousands of dollars?
It is simply that most homes that are now in foreclosure have some form of title defect. What does this mean you might ask?
Simply that there are disputes as to the legal ownership of the property. As a result, it can be difficult or impossible for a new owner to sell the property. When home owners go into foreclosure, by that time they frequently are behind on almost every other aspect of their payments:
- Federal taxes;
- Property taxes;
- Unresolved judgements;
- Mechanics liens.
A single recorded title blemish could literally cost you 10’s of thousands of dollars to repair. Worse, usually banks transfer ownership to you via a Quit Claim Deed, which then means there is no recourse on your part.
One of the things that BankREOSpecialists.com does during its due diligence is to insure clean, marketable title for all our buyers. Make sure that if you are acquiring properties on your own that you have a thorough title examination performed.
Property Appraisals: Declining Market Adjustment
March 20, 2009
California is considered a “declining market” by lenders, the secondary market, and appraisers alike. Appraisers have been instructed to adjust the “comparable sales”, on a Uniform Residential Appraisal Report (Form 1004), by 1.5% per month. What this means is that the appraiser will use an exact model match (same size, floor plan, and location in the subdivision) from December, and lower the price by 3%, for a current appraisal. For example, if the property sold in December for $300,000, the adjusted price in February will be $291,000.
Sounds reasonable, right? Sometimes, that’s not necessarily a fair depiction of current market conditions.
Much of the Southern California market is driven by bank-owned properties. The banks, in an interest of disposing of the property, pursue a “fire-sale” pricing method in order to generate multiple offers. Ask buyers in the tony San Fernando Valley how hard is is to buy a bank-owned home. One of our borrowers has made over 30 offers, unsuccessfully, to purchase a bank-owned property,
The free market has “priced in” future market declinations and has “discovered the true bottom”. Still, appraisers have their hands tied. Pursuant to directives from the secondary market, the appraisers adjust those “free market base prices” because they were closed a month or two ago. The cycle becomes never ending. The lower adjustments provide an unnatural price pressure, driving prices even lower. The policy then becomes a market factor.
The policy can be counterintuitive to its originally stated purpose; to provide a “true” reflection of this “declining” market. It assumes that prices will continue on an 18% annual decline, forever.
Why Buy REO Properties?
March 18, 2009
The term REO means “real estate owned” by the lender and indicates the house or income producing property has been repossessed by the lender and already completed the legal foreclosure process. In most cases, the lender is the bank, which is why you hear the term “bank owned properties” or “Bank REO’s”.
The bank becomes the owner of the property after the foreclosure process or an individual if an agreement has reached during the proceedings..
Short Sales may be a great buying opportunity. The major complaint from people is the time involved to get it approved by the lender for the short sale price. The home is normally listed by a real estate agent for a value that they feel is right to bring buyers, and will be adjusted accordingly once the lender has finished a complete home valuation analysis to determine the actual sales price.
The majority of the time the lender approves a sales price below the current market value just to sell it quick. One needs to remember that prices in the first-time buyer range have lots of competition which could make it bidding war.
When a buyer buys a foreclosed property, they agree to take the property on its present condition and accepts all other conditions and agreements that goes with the property.
Since what is owed to the bank it is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale. Then the property “reverts” to the bank. It becomes an REO, or “real estate owned” property.
The Risks and Rewards of Investing in Foreclosures
March 15, 2009
There are many different things to invest in these days. One investment route which individuals take is with regard to foreclosures. Foreclosures occur when the current homeowner of a property fails to pay their monthly mortgage and the property is repossessed by the lender. There are various risks and rewards which go along with investments of this type and some of these will be discussed below.
Advantages and Disadvantages to Buying Pre-Foreclosure Properties
One type of property sale which relates to foreclosures is the pre-foreclosure sale. A pre-foreclosure sale occurs when the lender allows the homeowner with past due mortgage payments to sell the home on their own and pay back the lender what they can from the sale of the home. The lender often agrees to this so that they do not have to get involved with possessing then reselling the home and the homeowner likes this option because it prevents foreclosure. The investor also benefits from this type of sale as well.
Some advantages to purchasing an investment property via pre-foreclosure sale include discounted price, speedy purchase and wonderful profit opportunities. As for the disadvantages, the investor who buys property by way of a pre-foreclosure sale may find that the homeowner is hard to contact and/or unwilling to sell, the research is cumbersome and there are other potential buyers who wish to purchase the property.
For those who wish to purchase property via a pre-foreclosure sale, they should do their independent research, approach the homeowner in a courteous manner and ensure that they make an offer that will not cause them to lose money in the end. By doing so, the investor may find that buying a house by pre-foreclosure sale will work to their advantage.
Advantages and Disadvantages to Buying at a Foreclosure Auction
Another way to purchase foreclosure property is through a foreclosure auction. Auctions of this type are usually held at the local courthouse of the county where the property is located within. This is a common way for foreclosed properties to be sold and this too has its pros and cons.
Foreclosure Investing - The Fastest Way To Get Started
March 7, 2009
Foreclosure investing is actually quite another world when people have finally taken that risk and go for it. This really applies to anything else in life. Remember all those late nights where you’d stay up and watch those “how to make millions in your sleep” commercials. Or perhaps you remember all those times you went to the book store and purchased tons of real estate investment study guides.
In fact you probably have a impressive home library and collection of real estate, investment, and how to get rich quick type books by now. Some people may get a feeling of being overwhelmed after wading through those thick books and studying all the complex terminology.
The truth is, if you are a naturally goal-oriented and self-disciplined person than you can probably achieve a full-time income in real estate within a year with the right system. So how do you choose the “right” system when everyone and his uncle says they are an expert or guru within the real estate domain?
One thing you might want to consider doing is to align yourself with a acquaintance or relative who is already successful in real estate investment or at least in the branch of real estate that you are interested in doing. Don’t be shy, definitely get in touch with them.
It may be a friend from high school or university, or perhaps even a former room mate that you knew when you were just getting started with your own life and needed someone to share the rent costs with in order to have your own place, etc. I am sure that if you brainstorm for a bit, you may even surprise yourself at how much opportunity there is in your own circle.
That is actually a very good idea- the number one way to get into real estate successfully is to have a mentor or at minimum someone that can really show you the ropes and provide feedback in real-time. No matter how well written the courses you’re looking at is, nothing really compares to a trusted friend or adviser that can actually walk you through this process step-by-step.
Understanding The 3 Stages Of Foreclosure
March 2, 2009
If you are like many people, you recognize that there is tremendous opportunity available in this real estate market. Let’s face it, we have not seen bargains like this since the 1970’s.
However, what many people also learn is that finding, buying, servicing, and reselling foreclosures is a lot of work.
If you are like many people, you recognize that there is tremendous opportunity available in this real estate market. Let’s face it, we have not seen bargains like this since the 1970’s.
Considering the home pictured to the left, you can try to acquire this home at 3 different stages:
- Preforeclosure - The bank has not yet foreclosed on the current owner;
- Foreclosure Sale - Typically auction style at the court house steps; and
- Bank REO - After the bank acquires the property.
PREFORCLOSURE:
In this stage, you are typically negotiating with the current owner to reach some sort of advantage
ous agreement. Unfortunately, many owners at this stage are very unrealistic in their expectations and as a consequence, many times you cannot get a good deal.
Also during this stage, you will have to have a stratedgy to deal with the underlying mortgage holder…. the bank. While there are many possibilities of how to accomplish this task, rest assured that unless you are trying to acquire $5M of property, you will not be high on the priority list of banks.
In short, this can be a very time consuming process where you need to look at many deals to get one.
FORECLOSURE SALE
The next option is to buy the property at the court house steps during a bidding process. In this case, you are bidding against many other professionals in the hopes that you can get a great deal. Of course, you have lots of issues like:
- You don’t know the minimum that the bank will take in advance;
- You cannot inspect the property (inside) before the sale;
- You will typically need to cash buy the property with 24-72 hours after the sale.
While some people make a living doing this, it can also be a very time consuming process.
BANK REO
This is our favorite stage to purchase….. after the bank has been forced to take the property back. In this case, there is two methods to buy:
Method 1: Bank REO’s go out to brokers at somewhat reduced rates. Generally, this is not your most advantegeous time to buy because the bank is still trying to maximize returned capital.
Method 2: Banks bundle 100’s if not 1000’s of homes together and sell them to private equity groups at pennies on the dollar because of the large volume that they buy. What BankREOSpecialists.com does is then bring those properties to you at incredible prices.
-
Who Is "REALLY" Making $ In Today's Real Estate Market?
Our 29,689 Members Tend To Agree...
It's Usually Not The GURUs
Have you ever noticed that every "Guru" real estate pitch sounds the same........
They once were poor, but now are rich working only 5 hours per week, and you can be rich too if you just buy their "can't fail system".
Or have you noticed that every property promote has a can't miss proposition, if you just buy TONIGHT.
At the NoBullRE club, we are huge believers in real estate investing...... but we also know that every approach has two sides: Nothing is perfect.
If you want unbiased ("No Bull") facts of who is making money, how are they doing it, and where do they get their knowledge, then you don't want to miss joining the NoBullRE Club
IT'S FREE (FOR NOW)
SECURE & CONFIDENTIAL
Your info will never be shared
CONFIDENTIALITY GUARANTEED
