I’LL TAKE DOOR NUMBER 2, ALEX

 

Choices, decisions, recommendations, options, what do you do? Nothing? Do you ignore the marketplace and hope “things” will settle? Or do you plunge in hoping you are making good choices with your actions?  The world’s largest library (www) can lead you anywhere and prove most anything. Be careful out there. Paralysis serves no one. Confidence trumps confusion.

 

For you ANALysts, here’s the S&P/Case-Shiller Home Price Indices, just released.  Knock yourself out with these statistics. The usual suspects, prices rise with a BIG BUT…that darn Tax Credit Honeymoon!

BUT WAIT, there’s more…as a numbers junkie, this article from Daily Finance was sent to me by a local investor:

 

Financial analyst Meredith Whitney recently joined the ranks of those who foresee a serious decline in housing prices in the second half of 2010. Her reason: Banks are starting to unload higher-priced homes in their bulging “shadow inventory,” and with sales dropping sharply now that the federal tax credit for homebuyers has expired, there’s a massive mismatch between supply (rising) and demand (falling).

 

The article goes on with some interesting stats. Citing US Census Bureau stats, we have aprx 131 million residential homes in US. Aprx 20 million are VACANT! Aprx 37 million are rentals, aprx, 24 million are owned free and clear and aprx 51 million have mortgages. Of these 51 million aprx 24% or about 12.25 million are “underwater,” they owe more than they’re worth!

So what does this mean? For openers, rentals are rising like the tide (no, it’s not Global Warming!) both in rental units AND in rent rates. More homeowners are walking away, especially, those with some wealth. To me, this means OPPORTUNITY. Look for it. Find it! If I was a real estate authority, I’d color rentals “green” with a “buy” recommendation; I’d color flips “amber” for “buy/sell,” and I’d color commercial “red” for “be verrrrry careful.”  I just read that a Phoenix Burger King has closed due to the immigration economy. Is nothing sacred?

 

Here’s another ANALysis of Housing economics from Seeking Alpha citing demand AND supply. Good data on why our housing industry and economy is “slumping.”

 

So how’s our Interest Weather? Mortgage Rates: 30 year fixed: 4.6% National, 4.6% Colorado. 5/1 ARM: 3.67% National, 3.69% local. I’d say the Whether (sic) is balmy with a “BUY” sign!

REAL ESTATE WEATHER REPORT

 

On our local scene there has been some transaction activity, not like 1H2010; we’ll see statistics in 30-60 days to confirm our observations that the market has “slowed.” Some reports outside Colorado say that the market has “tanked!” On the other hand, rentals appear to be booming, rent rates are rising as are occupancy rates. Our company rentals have no vacancies and we have a waiting list with a 6-plex. If you have a vacant rental, something must be “wrong,” poor condition, rent too high, etc. This is THE season for relocates and moves, especially with schools and kids.

 

I suspect we’ll see resurgence in the Real Estate Investor Marketplace for Lease Option and Owner Carry training. Demand is increasing, people still WANT to buy, they just can’t get loans like they used to.  This is an opportunity for investors; you don’t have to fix up your properties as you would for a flip. I hear reports of investors getting multiple daily calls from property bandit signs (don’t forget my favorite: RENT TO OWN).

 

Remember, this is not a static market; imbalance drives opportunity. People need to live someplace and homeownership is perceived as a RIGHT in our culture.  Keep your mind open (and your pocketbook) and take advantage of these unique times!

 

Wholesale inventory is low. We expect 2H2010 inventory to improve. Prices are falling. It is important to understand the dynamics of our marketplace. Compare appraisers and comps with sellers and comps. If properties were selling at $150K last month, won’t they be selling at $150K this month? It takes time for asset managers, loss mitigators, lenders, homeowners, and realtors to adjust, usually 60-90 days. We’re already starting to see “highest and best” decline. Keep your BS meter on with wholesalers; they/we must adjust, as well!

 

Call us with tips, rumors, conjectures, and cold cases (we’re thirsty!). We appreciate feedback on both our Newsletter / Blogs and Breakfast Club meetings (next meeting is August 14). Thank you for helping us help you!

 INVENTORY

Diligence rules. Investors are scrutinizing deals more closely (it’s about time!) Great deals go quickly. Call us, 303 338-8000, for more information or with questions. FU and ARV are estimates. Actual results may vary.

11192 E 7^th Ave, Aurora. HUD. 3 bedrooms, 1 bath, 1 car garage. Buy at $65.5K and fix to flip at $18K OR keep this as a rental until prices come up. Cash flow should be extraordinary ($300+/mo).

 

2610 Fillmore St, Denver. Golf anyone? 3 bedrooms, 3 baths, double garage. City Park! Reduced to $217K, fix at $45K (that’s a nice fix) and sell at $325K. Private investor owned.

 

521 S Newton St, Denver, 2 bedrooms, 1 bath. Just rented at $750. Buy at $55K and keep it rented and defer repairs (or fix around $10K  with estimated ARV $99K). Private investor owned.

 

Bon Homepetit!

 

John Fisher

www.happycanyongroup.com

303 338-8000

 

QUOTE OF THE WEEK :   The person who sends out positive thoughts activates the world around him positively and draws back to himself positive results. ~Norman Vincent Peale

WHERE HAVE ALL THE COMPS GONE?

 

 

No, this is not a folk song. Really, where have they gone?  Anyone who’s in our “business” has seen a dearth of recent comps. Why? “No sales” is the obvious answer.  New home building continues to lag, lending continues to drag, property pricing continues to sag, it’s enough to make you….(and investors continue to brag…but that’s what we do J).

 

GOOD NEWS: Move.com reports Mortgage Rates Fall to New Record Low! How low can we go? 4.56% on 30 year fixed. What’s not to like? 15 year fixed fell to 4.03% and 5/1 ARMs are 3.79%.

 

From the I-didn’t-know-he’d-been-away-department: Seller Financing Comes Back! 10-15% of today’s sales are “owner carry.”  See our blog two weeks ago for more details on how and why “owner carry” can be a great exit strategy for you.

 

In keeping with the dearth of sales trend it appears there is such a thing as a Mortgage Fraud Index. While new mort fraud is down 25%, there was $14B in fraud lender loss in 2009. Top 3 “frauds:” income, internal, then identity, then occupancy, property, employment, and undisclosed debt fraud.  And, to no one’s surprise, there is a direct link between fraud and foreclosure (sounds like a new book coming out).

REAL ESTATE WEATHER REPORT

 

As our nation goes, so go we. Comps are thin. What’s an appraiser to do? Adjust, expand geographic area, explain and hope the underwriter is OK with “it.” Hope only goes so far.  Isn’t it ironic how an appraiser can be your friend and your enemy? It’s a tough job and appears to be getting tougher, what with regulations and “brokering.”  Cross that occupation of your wish list of careers.

So many indicators point to a tough sell to owner occs, tighter lender restrictions is huge. Tax incentive credit set an artificial volume trend that is declining. And, yet, it appears, that Denver Metro has it better than most of our country (statistics: remember, you can PROVE anything).

 

Call us with tips, rumors, conjectures, and cold cases (we’re thirsty!). We appreciate feedback on both our Newsletter / Blogs and Breakfast Club meetings (next meeting is August 14). Thank you for helping us help you!

 INVENTORY

Lots of NICE houses. We expect deals.  Call us, 303 338-8000, for more information or with questions. FU and ARV are estimates. Actual results may vary.

11192 E 7^th Ave, Aurora. HUD. 3 bedrooms, 1 bath, 1 car garage. Buy at $65.5K and fix to flip at $18K OR keep this as a rental until prices come up. Cash flow should be extraordinary ($300+/mo).

5188 Osceola St, Denver. 3 blocks from Regis University campus. Buy this 3 bedroom, 1 bath, 2 car garage HUD at $126.5K, fix at $20K with a $200K ARV. Berkeley ‘hood. Rent to Own or Flip.

 

16328 E Warren Av, Aurora. 4 bedrooms, 2 baths, 2 car attached. Nice house, nice ‘hood (even has sprinkler system). Kingsborough ‘hood. Buy this HUD at $127K, fix at $20K with ARV of $182K.

 

2610 Fillmore St, Denver. Golf anyone? 3 bedrooms, 3 baths, double garage. City Park! Reduced to $217K, fix at $45K (that’s a nice fix) and sell at $325K. Private investor owned.

 

2540 S Lowell Blvd, Denver. 3 bedrooms, 1 bath with carport. Hot Harvey Park. Lots of “CHARM.” Buy this HUD at $127K, fix around $20K and sell around $180K.

521 S Newton St, Denver, 2 bedrooms, 1 bath. Just rented at $750. Buy at $55K and keep it rented and defer repairs (or fix around $10K  with estimated ARV $99K). Private investor owned.

 

5550 S Versailles St, Aurora. 3 bedrooms, 2 baths, 2 car attached. Sweet home, Saddle Rockana.  Cherry Creek Schools. Buy this HUD at $167K, fix at $8K, or fix at $14K for a 4/3/2.

 

Bon Homepetit!

 

John Fisher

www.happycanyongroup.com

303 338-8000

 

QUOTE OF THE WEEK :  Your vision will become clear only when you look into your heart. Who looks outside, dreams. Who looks inside, awakens.  ~Carl Jung

IT’S NOT WI-FI, IT’S REFI

Interest continues to be THE low hanging fruit. If you have decent credit…ok, GOOD credit; there are lenders out there and deals abound.  It remains a Buyers’ Market, especially in certain price bands. Do the math, run the numbers. With the drop in interest rates, it may pay, literally, to refinance your home and/or your rentals. I know one investor refinancing from 5.875 to 4.625 and saving over $500/month. That loan will pay for itself in less than one year.

Now the good bad news: Foreclosures fall 5%. Yeah, only 1.65 Million foreclosure filings. Bank repo’s increased 5% to 270,000. Nevada, California, Florida and Arizona lead the pack. Do you think you can find a bargain there? OK, Foreclosures accounted for a third of all sales — and sold at a nearly 30% discount — during the first three months of 2010.

 

Here’s the TOP 5 LEASE VIOLATIONS. Who would have guessed waterbeds and yard signs?  Make sure your lease is “legal!”  Lead paint, mold, pets, all addendums.

 

INTEREST RATES. Nationwide. Owner occ.  30 yr fixed: 4.61%; 5/1 ARM 3.72%. Colorado remains close (4.61 & 3.7).  Figure ½ - 1 point higher for Non-Owner Occ/Investor. RATES are at an all-time LOW! These numbers change weakly weekly.

REAL ESTATE WEATHER REPORT

 

What’s happening on our local front? SFH sales are sluggish. It appears that there is more movement in the $150-250K sale range.  As a rehabber, it remains your goal to have the nicest product at the nicest price. That usually means great landscaping and staging. You want your potential buyers to WANT to get inside and be delighted with what they see. That Jacuzzi tub maybe worth it if the sale process accelerates.

Rent remains strong. We are approaching rent levels we saw 3-4 years ago. Why? People still need somewhere to live. We must be creative, trade off a washer/dryer for lawn maintenance and snow removal, for example, or a pet. I had heard that 50% of all renters have a pet or two…or three. Fluffy needs a home, too! Be creative (can’t you see the sign: TWO FOR ONE with your house and a dog house?)

Foreclosures go on and on. I heard a report today that indicates foreclosure status quo for another two years. What else could that mean? I suspect prices will remain stagnant.

As an investor, I still see that undervalued real estate (junkers, REOs, etc) prices have crept up. We started to see a retail sell rise but that has subsided with the witherawation of the stimulus tax credit. Our market remains in flux, in turmoil, indigestion.

 

Call us with tips, rumors, conjectures, and cold cases (we’re thirsty!). We appreciate feedback on both our Newsletter / Blogs and Breakfast Club meetings (next meeting is August 14). Thank you for helping us help you!

 INVENTORY

Still strong. Lots of NICE houses. We expect a Thornton 4/2 anytime.  Call us, 303 338-8000, for more information or with questions. FU and ARV are estimates. Actual results may vary.

5188 Osceola St, Denver. 3 blocks from Regis University campus. Buy this 3 bedroom, 1 bath, 2 car garage HUD at $126.5K, fix at $20K with a $200K ARV. Berkeley ‘hood. Rent to Own or Flip.

 

16328 E Warren Av, Aurora. 4 bedrooms, 2 baths, 2 car attached. Nice house, nice ‘hood (even has sprinkler system). Kingsborough ‘hood. Buy this HUD at $127K, fix at $20K with ARV of $182K.

 

2610 Fillmore St, Denver. Golf anyone? 3 bedrooms, 3 baths, double garage. City Park! Buy at $223K, fix at $45K (that’s a nice fix) and sell at $325K. Check out this private investor owned property.

 

2540 S Lowell Blvd, Denver. 3 bedrooms, 1 bath with carport. Hot Harvey Park. Lots of “CHARM.” Buy this HUD at $127K, fix around $20K and sell around $180K.

521 S Newton St, Denver, 2 bedrooms, 1 bath. Just rented at $750. Buy at $55K and fix around $10K (or keep it rented and defer repairs). Estimated ARV is $99K. Private investor owned.

 

5550 S Versailles St, Aurora. 3 bedrooms, 2 baths, 2 car attached. Newer home. Cherry Creek Schools. Saddle Rock Ridge ‘hood. Buy this HUD at $167K, fix at $8K, or fix at $14K for a 4/3/2.

 

Bon Homepetit!

 

John Fisher

www.happycanyongroup.com

303 338-8000

 

QUOTE OF THE WEEK :  We are what we repeatedly do. Excellence then, is not an act, but a habit. ~Aristotle

 

IMPORTANCE OF BEING EARNEST

With credit to Oscar Wilde, there is an “A” in EARNEST. Earnest not only connotes “good faith”, a PLEDGE, in our marketplace, it describes doing something well: well thought out, well done. It’s a value misplaced by many.  It is IMPORTANT!

This blog is going to focus more on trends, conjectures and SOLUTIONS than national claptrap. With one major exception: MORTGAGE INTEREST.

OK. Another record low. What does that mean? One obvious answer is that residential real estate has slooooooowed down dramatically in nearly every market, including ours. So what? Will this stimulate home buying? The $8K tax credit was a red herring, a distraction, a diversion, a bump that some of us were able to capitalize. Now we’re paying the price. Call it the DEFERRED DROP. Pain was delayed, postponed. Is that PAIN or PAYING? Sounds the same to me! Who wins?

 

INTEREST RATES. Nationwide. Owner occ.  30 yr fixed: 4.61%; 5/1 ARM 3.69%. Colorado remains close (4.61 & 3.7).  Figure ½ - 1 point higher for Non-Owner Occ/Investor. RATES are at an all-time LOW! These numbers change weakly weekly.

REAL ESTATE WEATHER REPORT

 

What does this slowdown mean to us?  Major home sale, new and “old,” are off the cliff. Interest rates are at an all-time low. I’ll say it again: CASH IS KING. There is money out there. However, many are not willing to invest in anything except their mattress. A banker friend told me he just had gold bars delivered to one of his clients; a precious metal hedge that needs no trimming.

Consumer confidence is LOW. We hear more and more doom and gloom. Ask yourself the question: how can I/we take advantage of this recession/depression? What can I do to make a difference? One answer is to take action, and do it with EARNEST. Find solutions, seek answers. Stay optimistic.

OK. Your rehabbed house has been on the market for a while. No showings. No activity. You’ve dropped the price as low as you can. You could delist it and put up that sign I love:

RENT TO OWN

Remember, you get three types of calls/callers:

1.  Those that only read/see RENT, and want to rent

2.  Those that only read/see OWN, and want to buy, and

3.  Those that read RENT TO OWN and want a lease/option

 

Although Rent To Own never went away, it’s coming back!  Banks are getting more restrictive with their conditions and requirements (remember how guidelines become rules). If you can get a “normal” mortgage (take out that hard money loan or that HELOC), Rent to Own is a very viable option. I love not getting those proverbial “my toilet is overflowing” calls….

 

OWNER CARRY

 

Another option is to sell your house on an Installment Land Contract (Contract for Deed), sell your seasoned note at a discount, pay yourself (or your lender) back, and, hopefully, make some money in a relatively short period of time.

 

There is demand out there. Many good people may have qualified last year but do not today. I know one mortgage broker who is working with over 10 families to get their credit up enough to buy a house; do you think they may be interested in lease option or owner carry? Be creative. Network. Run with the sun.

 

Don’t forget our Breakfast Club meets tomorrow, July 10, Saturday, 7-9AM at NY Deli News Restaurant.

 

Call us with tips, rumors, conjectures, and cold cases (we’re thirsty!). We appreciate feedback on both our Newsletter / Blogs and Breakfast Club meetings. Thank you for helping us help you!

 INVENTORY

3 new properties. No more HUD DUDS! Check these out! Compare our deals to others. There is a reason we’ve been doing this for nearly 10 years. Occasionally we “list” a wholesale deal for another investor. We expect more deals anytime! Call us, 303 338-8000, for more information or with questions. FU and ARV are estimates. Actual results may vary.

5188 Osceola St, Denver. 3 blocks from Regis University campus. Buy this 3 bedroom, 1 bath, 2 car garage HUD at $126.5K, fix at $20K with a $200K ARV. Berkeley ‘hood. Rent to Own or Flip.

 

4995 Shoshone St, Denver. Clean and stucco’d. Buy this 3 bedroom, 1 bath, 2 car garage HUD at $105.5K, light fix at $15K with a $170K ARV. Hot Chaffee Park and 12 blocks from Regis campus. What’s not to like?

 

16328 E Warren Av, Aurora. 4 bedrooms, 2 baths, 2 car attached. Nice house, nice ‘hood (even has sprinkler system). Kingsborough ‘hood. Buy this HUD at $127K, fix at $20K with ARV of $182K.

 

2610 Fillmore St, Denver. Golf anyone? 3 bedrooms, 3 baths, double garage. City Park! Buy at $223K, fix at $45K (that’s a nice fix) and sell at $325K. Check out this private investor owned property.

 

2540 S Lowell Blvd, Denver. 3 bedrooms, 1 bath with carport. Hot Harvey Park. Lots of “CHARM.” Buy this HUD at $127K, fix around $20K and sell around $180K.

521 S Newton St, Denver, 2 bedrooms, 1 bath. Just rented at $750. Buy at $55K and fix around $10K (or keep it rented and defer repairs). Estimated ARV is $99K. Private investor owned.

 

5550 S Versailles St, Aurora. 3 bedrooms, 2 baths, 2 car attached. Newer home. Cherry Creek Schools. Saddle Rock Ridge ‘hood. Buy this HUD at $167K, fix at $8K, or fix at $14K for a 4/3/2.

 

Bon Homepetit!

 

John Fisher

www.happycanyongroup.com

303 338-8000

 

QUOTEs OF THE WEEK from Oscar Wilde:

·        Experience is the name everyone gives to their mistakes.

·        I am not young enough to know everything.

·        I think that God in creating Man somewhat overestimated his ability.

·        The truth is rarely pure and never simple.

·        We live in an age when unnecessary things are our only necessities.

·        One can survive everything, nowadays, except death, and live down everything except a good reputation.

·        What is a cynic? A man who knows the price of everything & the value of nothing.

·        Consistency is the last refuge of the unimaginative.

·        Anyone who lives within their means suffers from a lack of imagination.

 

WHO’S INDEPENDENT?

Independence Day? No, the answer is not “what’s between a Democrat and a Republican?” It’s really about acting alone, being alone, doing alone.  No man is an island, the world is flat, I hate crowds, we need each other, behind every great man…, don’t be the Lone Ranger. Lots of clichés and doses of reality. Why do it alone when it’s so much more fun to do it with others? Like Streisand sang: “People who need people are the luckiest….” Oh, loners don’t live as long, either! I just read that men need women more than women need men (read “I Don’t, the Case Against Marriage”) and married women spend 1 hour a day more on housework (than unmarried women, i.e.)…hmmmm. LET FREEDOM RING!

Buyers signed fewer contracts to buy homes in May than in any time since the government starting keeping records on them (that’s 47 years for those who keep track). How sobering is this? 30% drop in ONE month! “OUCH” is hardly the word.

Condominski anyone?  2 of the 11 recently captured Russians spies are realtors.

 

INTEREST RATES. Nationwide. Owner occ.  30 yr fixed: 4.68%; 5/1 ARM 3.69%. Colorado is close by (4.66 & 3.69).  Figure ½ - 1 point higher for Non-Owner Occ/Investor. RATES are at an all-time LOW! These numbers change weakly weekly.

REAL ESTATE WEATHER REPORT

Lower end home sales (under $150K) have almost come to a standstill. Mid-priced homes will pick up slightly as summer/school moves continue. Higher end homes will continue to tank.  At least rentals are strong…and the “Rent to Own” market is strengthening: it’s getting harder to get a loan, banks have money to lend, but FHA/Fannie/Freddie “guidelines” have become restrictive prohibitive “rules!”

Here’s a national article on Cableland, Hickenlooper, and a local mansion with a fireman’s pole, 14 bathrooms, and 4 kitchens! Bill Daniels has left the building!

 

Call us with tips, rumors, conjectures, and cold cases (we’re thirsty!). We appreciate feedback on both our Newsletter / Blogs and Breakfast Club meetings (next meeting, July 10, Saturday, 7-9AM at NY Deli News Restaurant). Thank you for helping us help you!

 

 INVENTORY

We still have properties. Occasionally we “list” wholesale deals for other investors. We expect more deals anytime! Call us, 303 338-8000, for more information or with questions. FU and ARV are estimates. Actual results may vary.

5188 Osceola St, Denver. Cute and only 3 blocks from Regis University campus. Buy this 3 bedroom, 1 bath, 2 car garage HUD at $126.5K, fix at $20K with a $200K ARV. Heck, you could live there!

 

4995 Shoshone St, Denver. Clean and stucco’d. Buy this 3 bedroom, 1 bath, 2 car garage HUD at $105.5K, light fix at $15K with a $170K ARV. What’s not to like?

 

845 Lansing St, Aurora. 3 bedrooms, 1 bath. Rented at $700/mo. Buy at $72K and keep renters or fix up around $20K and flip this around $125K. Private investor owned.

 

5127 Saint Paul St, Denver. New carpet, new paint. 3 bedrooms, 1 bath with double garage. Swansea. Buy at $65K, fix under $5K, rent it out or sell it at $110K. It’s your call on this private investor owned property.

 

2610 Fillmore St, Denver. Golf anyone? 3 bedrooms, 3 baths, double garage. City Park! Buy at 223K, fix at $45K (that’s a nice fix) and sell at $325K. Check out this private investor owned property.

 

521 S Newton St, Denver, 2 bedrooms, 1 bath. Rented. Buy at $55K and fix around $15K (or keep it rented and defer the repairs). Estimated ARV is $99K. Private investor owned.

 

Bon Homepetit!

 

John Fisher

www.happycanyongroup.com

303 338-8000

 

QUOTE OF THE WEEK: 

You cannot strengthen the weak by weakening the strong.
You cannot help small men by tearing down big men.
You cannot help the poor by destroying the rich.
You cannot lift the wage earner by pulling down the wage payer.
You cannot keep out of trouble by spending more than your income.
You cannot further the brotherhood of man by inciting class hatreds.
You cannot establish security on borrowed money.
You cannot build character and courage by taking away a man’s initiative and independence.
You cannot help men permanently by doing for them what they could and should do for themselves.  

~William J. H. Boetcker, (often attributed to Lincoln)