Archive for January, 2008.
Hot off the wire! An Investor Group I know of has a package of 59 New Construction Homes under contract at 50% FMV all over the Valley. They are putting in $250,000 themselves, and are looking for an additional $9 Million for the rest of the funding. These homes are all from a single builder here in the Valley, who’s obviously dumping his inventory to stay afloat. The plan is to wholesale out the homes at 70-75% FMV and be completely out of the deal within 6 months. Here’s the facts I know in the moment…
- 59 New Construction Homes
- $9Mil required, will be secured by Title Reports, 1st Position Trust Deeds, and Fresh Appraisals
- Acquiring properties at 50% Fair Market Value
- Wholesaling them out at 70-75% Fair Market Value
- Total Holding Time: 6 Months Max
- Willing to pay points + return to funding entity
- Can assemble multiple investors for the take down, but would prefer just one or two
Most of the time you hear of these deals, they’re complete BS. However, I personally have known this investor for 7+ years, and feel confident in the deal. They’re looking to fund within 3 weeks, if possible. If you know anyone looking to get into this opportunity, please let me know ASAP.
Are you maximizing your Return on Investment (ROI) and Cash Flow from your Commercial Investment Property? You can apply Cost Segregation tactics to your Investments and save a bundle on your taxes. Essentially, cost segregation is the process of separating out personal property assets from real property assets for decreasing your tax liabilities. Using a Cost Segregation Study, you can shorten depreciation time frames on certain elements in your property from 27.5 or 39 years, down to as little as 5 to 15 years. This allows you to free up more money now to assist with current tax liabilities, or apply to startup costs or other investments. Wikipedia has a great reference explaining how this all works.
It’s always best to have the most knowledgeable people on your team. I became affiliated with the Lackman Commercial Group largely due to their expertise and extensive background in Accounting. Two of the founding members have been CPAs for many years, and can easily assist applying such techniques when purchasing Commercial Property. I don’t know many other Commercial Agents who can assist with the purchase/listing of your property, as well as provide the highest quality and expert advice in maximizing your financial returns. If you would like to purchase or sell Commercial Real Estate, please contact me to see the benefits you’ll have with the Lackman Commercial Group.
ok guys, time to gear it up here. Just came across a SMOKIN deal in the Gilbert/Chandler area. Here’s the specs-
1750sf, 3 bed/ 2 bath, No Pool, Single Level, built in 2005, It is a Bank REO, and the Fair Market Value is anywhere from $250,000 to $300,000+. We can get it for less than $190,000. Did I mention it’s in a gated community? It’s off of Germann and McQueen, roughly. This is a GREAT DEAL for someone as a rental, or, owner/occupy. If you are interested, give me a call and we’ll go snag it! A deal like this WILL NOT last long, so we gotta move fast!
I am constantly amazed that most people don’t know this. I inform people of this on a daily basis. Potential clients are always asking me how much it costs them to hire me. If you are buying or renting real estate, it is FREE to hire a REALTOR® to help you! That’s right, no cost whatsoever. The Seller or Landlord is the one who has to pay all agents their commissions. It really becomes a no brainer for you to be represented by a Licensed Real Estate Agent.
The next train of thought I come across is this- "why not hire the REALTOR® who is listing the property to represent you? Won’t that save on fees for the seller, and I can get a better deal"? Well, there’s a few reasons for not doing this.
- The Seller will still have to pay the same amount of fees
- The Listing Agent will DOUBLE their commissions- they just get the commissions that another Agent would have received, had you hired one yourself
- The Listing Agent was hired by the Seller to get them the highest price possible. A Buyer’s Agent is hired to try to get the lowest price possible. Who do you think the Listing Agent will work harder for?
- A Buyer’s Agent is watching out for your best interest, and no one else’s. They will make sure you are not getting taken advantage of, and that you are protected.
When you look at all the reasons, it really makes sense to hire an Agent to represent you. It’s free, you’re protected, the Agent understands the buying process and can guide you the entire time. If you’re still hesitant, feel free to give me a call and ask me questions. If you’re looking to purchase foreclosures, REOs, Short Sales, Commercial or Investment property of any kind, contact me and let’s find you the best deal possible.
If you haven’t heard it by now- the Fed has cut rates from 4.25% down to 3.50% this morning. This is during the global stock sell off going on. Read more about it here. Still not convinced it’s the time to pick up investment property? Foreclosures are at an all time high. Banks are realizing it’s time to get lean and mean with their inventories, and are being very aggressive with REOs and Short Sales. Now, our interest rates are dropping even lower than ever before. In fact, I think it might be time for me to refi some of my own properties, now that I think of it…
Sorry I’ve been out of touch here guys, just been slammed finding deals and building the business up. There’s some HUGE things right around the corner- but it’s not the right time to announce them yet. I’ll keep you guys posted.
I’ve been finding a ton of deals with REOs- many are fixer uppers, with enough equity to turn for a profit. Short sales are always slow, but, sometimes might yield something worth while. However, something interesting I’m seeing are deals in Austin, TX. I have a buddy who I am training down there, and the market is looking VERY good! In my next post, I’ll throw up numbers, charts, etc of the Austin, TX area. They haven’t had nearly the slow down that we’ve had here- and appreciation is going well to boot. Long term, they’re ranking pretty well for population and job growth. Stay tuned and I’ll get you more info.
I’ve also been working on some commercial deals- a couple land development properties, as well as a couple clients looking for properties themselves. The Commercial Market is hanging tough and going fairly strong- so anyone looking for commercial property, give me a shout and let’s get you in some good deals.
More to come… How about those Playoffs, huh? 
Well, let’s get this white elephant out of the living room. Bank of America agrees to buy Countrywide Financial for $4 Billion in stock. Wasn’t is just a few months ago B of A infused $2 billion into Countrywide as a "line of Credit’ Loan? huh- seems like we, the public, were led astray to avoid the panic from setting in. So, essentially, they just paid $6 billion to take down the company. As one of the Nation’s top tier lenders, you would think they could get the beast under control. Yet, I’m still seeing most of their foreclosures get taken back as REO at the foreclosure auctions here in Phoenix. I’m seeing most of their short sales go unapproved when they have solid, ready to close buyers at nearly full price. They’re taking back the majority of their foreclosures without addressing the internal problems of loss mitigation. You would think they saw this coming, and would’ve made corrections long ago. I’m not too surprised at all. They needed to completely revamp their lending standards, as well as their loss mitigation standards. Loosen up their regulations, and start dealing more freely with buyers/sellers before they take back the REOs.
My prediction is that there’s going to be a large surge of REO inventory within the next 6-12 months, banks finally realizing they need to dump their properties and get them off the books. REOs will be picked up for pennies on the dollar (more so than they are now). It’ll be interesting to see how B of A handles their inventory of non-performing notes and REOs as well. Maybe they have figured out how to deal with the current problem, and start pushing deals out for the investors to enjoy. At the same time the Fed is cutting rates and pushing money back into the economy. So if B of A loosens up their lending standards somewhat, we’ll have a stronger buyer’s demand, as well as strong supply. Watch this to get an idea of how the Federal Reserve works.
I’d really like to see the numbers of outstanding liens/debts they have on the books now- see how much of a bargain Bank of America walked into for their $6 Bill. If they know how to deal with loss mit and REO’s properly, they can easily turn this nightmare around and take in some very large profits. My guess is that is exactly what they’re thinking, and changes are hitting the cubicles of loss mit reps’ desks already. The next few months will be very interesting. Are you ready to pick up more REOs? Contact me ASAP to find the best deals!
I’ve been showing property all weekend to my relatives who are relocating down to Gilbert, AZ. They were looking for an Active Adult Community, 55+ with golfing. They love to golf, and Trilogy at Power Ranch has a beautiful coarse with very reasonable fees. We ended up making an offer on one property, which looks like it’s going to go through. However, throughout this process, we’ve come across quite a few motivated sellers who are looking to get their home sold NOW. Many of the agents I spoke with said that their clients would accept a much lower price in order to close quickly. I see some outstanding opportunities here for anyone looking to move into Trilogy. I’m shocked at the size and quality of home my clients are purchasing for less than $230,000. Every home we looked at was in excellent condition, ready to go. If you, or anyone you know, are considering purchasing in Trilogy, please contact me and I can assist in finding you a great deal.
The Phoenix Business Journal has an article that the office inventory in Downtown Phoenix is expected to grow by 42% by 2011, as reported by Integra Realty Resources.
Current inventory sits at 4.94 million square feet, with another 2.05 million feet expected to be built between 2008 and 2011, according to the company’s "IRR Viewpoint 2008."
That number puts Phoenix 11th among U.S. cities for downtown construction, which is expected to total 88.5 million square feet nationwide over the four-year period.
The article goes on to day that the current vacancy rate is at 8.5% in Downtown Phoenix, compared to 11.1% for the National Average. This goes right in line with the previous reports of expected job and population growths for Arizona as a whole. Anyone who has a concern about the future of the Arizona Real Estate market really needs to dig into the research and see for themselves. It’s picking up this year, and will continue to rise until our next boom/bust in 15-20 years…
I’ve always believed that people’s true colors come shining through when they’re put under abnormal or stressful conditions. We’ve all known people in our lives who are kind, sincere and genuine 98% of the time. However, you give them a few drinks and they become mean, cold hearted, selfish and even combative. Or there’s people who completely change their personalities in stressful situations, whether it be a major life crisis, or a Super Bowl game. True we all behave differently to some extent under various pressures of life. However, I’m talking about people sacrificing their morals, integrity and relationships when times get tough.
Since the downturn in the Real Estate market, I’ve noticed a major shift in colleague’s personalities and integrity as a whole. On a daily basis I’m hearing more and more stories of investors pulling scams, stabbing business partners in the back, even taking advantage of people for their own personal gain, all while having no remorse for their own actions. True, this has always existed in this industry, but it seems to be happening more often in the past couple years.
My own personal experiences are no different. Business Associates I’ve known for years have sold their souls to the devil in order to make a few bucks, forcing me to cut all ties immediately. People who have always been honest and trustworthy have now become expert scam artists and stabbing everyone in the back. It’s sad to see those relationships perish, but I refuse to associate with anyone with those kinds of standards and morals.
From what I see, the market changed, money became tight across the country, and people panic. Instead of adapting to the changes in the market and holding your values, many people decide it’s easier to screw someone else over than to hold true to their morals and standards. Essentially, their true colors were finally allowed to shine through. To them, it’s better to screw other people over, risk going to jail and throw away trusted relationships than it is to adapt to the market. So that begs the question- does the market have control over who you are as a person?
If you believe so, maybe you’re in the wrong industry. I can assure you, that every industry is impacted by the real estate market. You’ll feel the effects no matter where you go. Is it possible to build your net worth while holding true to your morals? To be honest, it doesn’t matter what the market is doing, it’s a matter of what YOU are doing. YOU must shift the way you do business and deals. YOU must shift the way you handle tenants, vendors, and find properties. YOU must change the way the systems and mechanics work in order to adapt to the ever-changing market place. However, the things YOU must not shift and change are your morals and standards. It is possible to be successful while retaining your integrity. Yes, times are different, deals are different. What you would’ve paid 85% 3 years ago you won’t touch for more than 75% now. I get that.
The way you are adapting to this market shows every fiber of who you are as a person. Are you bailing out when the times get tough? Let me throw this out to you- maybe the market isn’t ‘tougher’ right now- maybe it’s just DIFFERENT. Are you freaking out while waiting for the market to turn around? Are you sacrificing and taking risks that you normally wouldn’t take? Maybe a simple change in the mechanics of your business is all you need. I promise you, this won’t be the last change in the real estate market. It is constantly changing, and as a result, you must change your business systems as well. If you find yourself changing your morals and integrity, that should serve as an alarm going off in your head that you’re not adapting properly. It would probably serve you to take a step back, realize that MANY people are making great money in this market, and all you need to do is shift the business mechanics, not who you are as a person.
I know for a fact that those who sacrifice their integrity pay for it, one way or another. Those who maintain their integrity and shift their business systems to adapt to the market, realize ongoing success and wealth throughout their careers. Sometimes a hard look in the mirror is the toughest thing you can do, but is usually the most profitable. If you’re not making as much money, or expanding your portfolio as rapidly as you’d like, maybe it’s time to take a look inside and ask yourself some tough questions.
