joshuagamen:

From my RE blog!

Originally posted on MyPadAZ:

 

By now most of us have a decent understanding of how the subprime mortgage mess came to a meltdown.

Easy money caught up with us when borrowers could no longer afford their minimum payments, which were usually their mortgages, which had been refinanced(or leveraged with home-equity loans) to pay off unsecured credit cards which had been used to finance liabilities like cars, boats, college, home improvements etc.

But can you really blame someone for being handed easy money?

I mean think about it.. The media pushes the message because it is bought and paid for, just like the political parties and currency systems, and by the same people.

The message is to spend money you don’t have.

The government does that, why shouldn’t you?

And now, four years past Ground Zero of the recession, and easy money is still available. How can this be? And who can still qualify?

View original 436 more words

Gas prices and the middle class

I have noticed lately it seems gas is most expensive in Ritzville and in the Hood. Life seems to be the same way – the rich and the poor stimulate the economy. Rather ..the rich and the poor are the economy, or so it seems. And the middle class always seems to find a way to separate themselves from it just a simple observation today..

Okay I’m not saying the middle class are not actuall part of the economy honestly that would be foolish. I’m just saying it seems that the rich buy the asset that the poor spend money on which are liabilities to the poor. The middle-class, the real middle-class, which is greatly shrinking and for the reasons I am talking about here(that and they are at or approaching retirement), stash their cash and avoid paying interest. In an economy that is entirely built on debt, very little is contributed financially outside of the fractional reserve dollars that they create by holding their money in savings. However, the real value created by these people is usually very high when you look at the quality of workmanship they produce in the small business sector. The rich and the government however beat the hell out of them. We have been seeing this especially in recent years with this bloodbath of the middle class.

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Rental Rates Up 18% in Phoenix – Great News For Cash Flow Real Estate Investors!

 

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JUL132012

Rental rates up 18% in Phoenix

 

Phoenix rental rates are up 18% in the last 12 months, making it one of the greatest places in the nation to invest in cash flowing real estate! Couple this with the fact that Arizona continues to grow with education across the valley as well as being one of the premiere retirement spots in the world as baby boomers are approaching retirement and rapidly moving towards Phoenix. Values and rental rates are increasing along with a greater demand for rentals, as unfortunately, foreclosures still plague the state.

 

appraisals

BPO: the most important part of a short sale

“BPO” stands for “Broker Price Opinion.” It is a report for the given value of a property, that a real estate agent will give to a lender to determine what to do with a property where they have a loan. And it is just what it sounds like, an opinion! All they do is quickly glance at the recent solds in the neighborhood, and go to the house to take pictures(they are at the property no longer than 10 minutes – a time frame that no buyer would feel comfortable making a solid offer in, given that it is not enough time to do any due diligence on a property to see what it has/needs.

Without going into too much detail here, let me just tell you I met both an appraiser and a BPO agent at a property yesterday, on a property valued somewhere in the  $2 million range. Because I met both the agent doing the BPO, and the appraiser, the property will close because they have a keen understanding of what is really going on, since I took the time to enlighten them. Can you imagine if I just left it up to the opinion of the two people who had spent no more than a couple of hours looking at the subject property?!(and in cases of cheaper house, taken no more than maybe 20 minutes analyzing the value!)

And then this morning I met another BPO agent on another property we are doing a deal on, valued around only $100,000. The property probably would have came back to the bank with a broker price opinion at $130,000 or more if I hadn’t been there to meet the agent, in addition to sending her comps and letting her know the listing history prior to her arriving at the property. I also took the time to make sure she actually looked at all of the systems in the house and pointed out needed repairs. Had I not been there the agent would have not seen any of the needed repairs or structural issues to the house. These things have a significant impact to the buyer and many agents fail to realize they have two ends of each short sale transaction to work, not just the buyer, but the bank too!

If you were to ask a room full of real estate agents what the biggest factor is in the success of a short sale transaction, I would presume you would hear dozens of different answers. Answers ranging from how severe the homeowners hardship is, to how much money in retirement accounts the homeowner has, to whether or not the person that is on the loan actually ever lived in the house or was just a cosigner, or the most common…”who is the bank?” I would like to think one or two agents would get it right, but would be surprised to hear much more than that. While these factors do play a role in the short sale settlement, they are not THE most important factor.

The answer is simple, and it only contains three letters: BPO. The BPO is the hinge of the entire short sale. If you have a high BPO you are probably not going to close your short sale, unless that is of course, if you can get another BPO ordered and have enough time to go through that process. I have seen more short sales go to foreclosure because the BPO was not addressed properly then any other reason for short sale transactions not closing.

It takes approximately 10 minutes to comp a property(look up current home sales) and send that email to the agent who is processing the BPO, prior to them arriving at the property. It takes usually no more than an hour to drive to the property, meet the agent there, and then tell them where your offer is and the listing history,  shake their hand and walk away. Sometimes you may leave the property feeling like you are going to get a high-value, and sometimes it will be the opposite, where you will leave feeling energized and know that you are going to have a slam dunk deal when the bank finds out they are getting more money out of the transaction after their closing costs then the true value of the property.

Setting up properly and processing the BPO correctly as the listing agent will be the deciding factor in 90% of short sales. I don’t care what the hardship is or how much excess cash the seller has, or even how much assets they have or none of that. I care what the value is and what the net is to the lender. Since I do have control over these things, contrary to popular opinion, I close consistently the short sales I take on.

It’s not rocket science.. Influence what you have control over. This is no different than anything else in the real estate business or for that matter, life.

To inquire about referring Joshua Gayman a short sale in the Arizona area or for assistance with negotiating a short sale of your self or for a client, or if you are a homeowner and another state just looking for guidance and true counsel, give me a call – I’d love to chat!

-Joshua Gayman

Phoenix Housing Market Trends – June 2012

The median sales price for homes in Phoenix AZ for Apr 12 to Jun 12 was $112,000. This represents an increase of 23.7%, or $21,432, compared to the prior quarter and an increase of 31.8% compared to the prior year. Sales prices have depreciated 52% over the last 5 years in Phoenix. The average listing price for Phoenix homes for sale on Trulia was $282,323 for the week ending Jul 04, which represents an increase of 0.4%, or $1,251, compared to the prior week and a decline of 0.1%, or $357, compared to the week ending Jun 13. Average price per square foot for Phoenix AZ was $200, an increase of 159.7% compared to the same period last year. Popular neighborhoods in Phoenix include Camelback East, Deer Valley, Paradise Valley, North Mountain, Maryvale, and Alhambra.

Two Rumors have been going around the Phoenix real estate market: 1.foreclosures are rising and 2. there is a “shadow inventory” of foreclosed homes the banks are sitting on.

Foreclosures are down big time in Phoenix and while we still get the occasional blip up here or there, the trend has been consistently down since the start of the year. Comparing the number of foreclosed homes for sale in January of 2012 to January of 2009 – the supply is down 92%. There will always be foreclosures, but the numbers are consistently dropping and the forecast is more of the same.

And then shadow inventory.. Shadow inventory is the homes that the banks have taken back and are sitting there vacant being held off the market in an effort to control pricing. The banks in Arizona do not have some stash of houses they are holding back. The thing about real estate is that changes of ownership cannot occur in secret – they require a public recordation to transfer ownership. So this persistent rumor is more attributable to errors in counting and tracking foreclosures than anything factual. What happens is that many houses are vacant due to homeowners vacating the premises prior to the bank actually foreclosing. I’ve walked the neighborhoods and door knocked the pending foreclosures and it is amazing how many houses are vacant.

The Phoenix market is hot and the opportunity to invest is still one of the best in history! This is a choice, and it’s not an easy one. The easy choice is to continue doing what you’re already doing. The hard choice is to beginning the process of changing your mindset—the process of choosing to be rich by investing in Arizona Real Estate. Call me. This starts with increasing your financial intelligence. Through these endeavors you will change your mindset.

I challenge you to invest in Arizona Real Estate. Will you accept the challenge?

From Facebook: “Comping a property this morning I found only one active and it had been on the market for six days. I contacted the listing agent on it to find out if they had received any offers yet to find out they have 15 offers and most are over list price! Nothing new for those who are in the market but just thought I’d throw it out there so everyone knows that no it is not cooling down yet!! Prices in the Phoenix metro area are up 32% since last August!! And one of the biggest metropolitan areas in the country there are less than 8000 homes on the market that are active and of those MANY have offers already on them just not accepted yet. % at 3.6 r u kidding me?!