August 23rd, 2009 by Scott
I ran across a very interesting article about a group in CA buying the note on a foreclosure before it got to the court house steps. You take on the hassel of doing the foreclosure but it can lead to major profits. Check out the article on Realty Times. http://realtytimes.com/rtpages/20090821_investorreport.htm
March 18th, 2009 by Scott
Long has been the winter of our discontent. Well maybe things are changing. An article by Michael Kanell and Kevin Duffy in the Atlanta Journal-Constitution reports a 22% rise in new home starts. The activity was centered around multifamily construction but also saw a rise in single family homes. Discussions with several Realtors I have had in the Atlanta area shows some promise.
Chip Ivie is a realtor with Keller Williams Metro Atlanta and he is guardedly optimistic, “Spring is always the top selling season and this year is showing a spring thaw in activity, but we will have to see activity carry through summer to start thinking things are turning around.” Chip says, “The old advice is still the best, be priced right for the market, and make sure the home shows excellent, there are too many homes for sell and you have to make sure your’s stands out.”
Investors are beginning to asorb some of the foreclosures and distressed properties. On one hand this helps reduce inventory but on the other short or distressed sales prices drive down appraisals in the area. Investors are also facing problems with finding funding for purchase and rehabs of these properties which is leaving cash as king.
You can find the AJC article at http://www.ajc.com/business/content/business/stories/2009/03/17/housing_starts_atlanta.html
Scott
March 3rd, 2009 by Scott
Banks need to remove special assets (bank speak for collection or nonperforming loans) off the books to be able to get back to the business of banking. While removing these assets are easily talked about the transactions and how to go about it is a royal headache. In the 80’s and 90’s RTC (Resolution Trust Corporation) was formed by the government to buy toxic assets from the failed or failing Savings and Loans. This process served the needs fairly well, and there are signs that we may reinstate this type of program. Market Watch.com is reporting that last week FDIC sold a block of loans to a private investment group that ended up with a shared interest in the portfolio. http://www.marketwatch.com/news/story/FDIC-sells-15-billion-toxic/story.aspx?guid=%7BB08BA9AC-3B4F-490E-9B0F-789D14EE365C%7D
In true free market style two investors in NJ are taking there own approach to buying up some bank problems and converting them to opportunities. Raj Bahati and Albert Behin are rolling up their sleeves and finding profits from buying the mortgages in groups from the lenders. The catch is they must buy several loans at one time, but they are getting them for 40 cents on the dollar. These are Alt A loans that were not the worse of the worse but still were mostly no income verification loans. This approach buys the loan before it goes to foreclosure so this allows the investors a chance to be creative in how they deal with the homeowner allowing a lot of them to stay or at least humanizing the experience by having one on one dealings instead of the cold corporate special asset department. This post is based on a story ran on NPR. To hear the whole report
http://www.npr.org/templates/story/story.php?storyId=101227971
February 27th, 2009 by Scott
Warren Buffet says, “A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful.” While Mr. Buffet was writing about buying stocks, the same can be said for housing today.
Housing issues have permeated the economy both locally and nationally. This week, one index that tracks housing prices, S&P/Case-Shiller Home Price Indices, indicated home values fell the most since 1968, declining 18.5% in December from the year before.
Looked at from a different perspective, this means home prices have fallen to levels not seen in six to twelve years, depending on individual markets. Following the Case-Schiller report was the report from the National Association of Realtors (NAR) recently. The NAR reported that home prices for the month of January fell by 14.8%.
The bright spot though in contrast was that the number of homes sold in December increased. Home buyers from coast-to-coast have been buying distressed properties at the rate of 45% of total sales.
Recognizing that now is the time to buy, everyone – from those looking to purchase their first home to seasoned real estate investors – is buying homes today. Bruce Norris, the head of an investment group in Southern California, expects to buy at least 100 homes this year as, “This is the buying opportunity of our lifetime.”
Fundamentals Point to Strength
The basic fundamentals of the housing market point to higher prices ahead. Almost half of the properties being sold today are existing homes that are either owned by banks or homes on which banks are accepting short sales, allowing them to be sold for less than what is owed.
New homes or homes under construction are near all-time lows. The country’s demographics point to more potential buyers coming into the housing market than projected inventory in coming years. This all points to higher prices on the horizon as demand will be greater than supply. This is supported by the fact that the inventory of unsold homes fell 2.7% in January.
Why Buy Now?
Three very important reasons to buy now are:
Lower Prices Don’t Always Equate to Lower Payments
One final point to consider. Even if you believe that home prices will continue to decline, it’s very difficult to believe that interest rates will remain at these low levels.
Did you know that even if home prices were to decline 10% but also during that time, interest rates available for home loans were to increase by 1.00%, your monthly principal and interest payment would actually be higher? It’s true. So, if you are thinking of buying or the end of your lease is near, get busy and get in the game. To quote Mr. Buffet again, “If you wait for the robins, spring will be over.”
