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One of the Biggest Mistake Beginner Wholesalers Make. THEY PAY TO MUCH!!!! Here are 3 ways to prevent that from happening. 1. Become a bird dog for a seasoned wholesaler. This will teach you how evaluate properties, learn the neighborhoods that are selling and you don’t have to risk any of you own money. In […]
If you’ve been following the real estate news as reported in the Arizona Republic, you are likely very confused by now. For example:
- June 12 – “The Investors are Back” and “More foreclosures likely in county”
- June 21 – “More signs housing market is gaining”
- June 23 – “A building storm: 45,000-plus properties remain in the foreclosure pipeline”
I’ll offer a few insights of my own based on news reports, experts like Alan Langston (head of the Arizona Real Estate Investors Association, AZREIA ), statistical sources such as the Cromford Reports (see links below) and property management firms. I filter this data against what I observe daily in my central Phoenix area-of-expertise and against what I learn from networking with investors and Realtors active in the Valley.
- The low end of the market has definitely hit the bottom. For a while, viable rental properties for under $80k were plentiful and the best were easy to pick up. Banks are still offering properties in this price range, but the best ones are being bid up by multiple buyers. In one case, the bank was picking from offers TWICE the list price!
- REO inventory has dropped dramatically. In most areas of the Valley, REO sales account for 60% to 90% of the transactions. What is shocking is that the number of real estate transactions closing today is higher than it was during the boom years! These REO properties are being picked up in high volume by first-time home buyers and investors – both looking for bargains.
- Rents are declining. Valley apartments report record high vacancies and we are starting to see the effects role over to the single-family rental market.
- The foreclosure pipeline is still bursting with inventory. The banks are not issuing Notices of Default when they could and are slow at moving properties to auction.
So, what do these tidbits of information mean for the investor? Have I missed my investment window of opportunity? Will I be able to find tenants for my investment properties?
What You Don’t know About Loan Modifications Can Hurt You!
Did you know that over 9 million people are in Foreclosure and another expected 9 million on the way. Those are staggering numbers! Most people think they only have a two options to save or delay the NOS (Notice of Sale). First to delay the sale they may try to sell their home with the assists of a Realtor. The bank may allow a couple extra months to try to sell the home. Option two is Bankruptcy. This will put an automatic stay on the sale, generally from 3-6 months depending on the local /state laws.
What many people don’t know is the Obama’s administration pass a new program that banks / lender’s are required to work with the home owner to help them stay in their home. The program, unveiled last month, creates a $75 billion loan modification program that would allow “responsible homeowners” to refinance to interest rates as low as 2 percent. This allows at-risk borrowers to reduce their monthly mortgage payments in an effort to keep them from losing their homes.These loans can be extended as long as 40 years.
Here are some qualifications about the program:
NY TIMES – SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.
Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.
So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.
“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.
City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.