Phoenix boomtown! Great place for real estate investors

Phoenix housing boomed with the housing market and then crashed hard with the subprime mortgage crisis. Now things are looking up again in the state. It seems as though when the national markets go up, Phoenix goes higher, and when they go down, Phoenix goes lower..

This makes Phoenix one of, if not, THE best place to invest in real estate. You can buy properties for cheap when the market is rough, then rent them for amazing cash flow and tax breaks, all the while riding it out to realize some significant gains from appreciation.

Phoenix is volatile, but for the cash flow investor, that’s good news!

Click here for to get started investing in Arizona real estate!

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

 

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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.

 

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?!

Phoenix Housing Market Trends – May 2012

Those of you who are wondering what the facts are on the valley’s real estate market values, this will be a quick primer.

Despite national news or even the local news stories (shadow inventory, prices dropping, foreclosure wave coming, etc.) the fact of the matter is prices have been marching upwards at a record pace the last 3 months. The price per square foot since February 16th has jumped from $85.62 to $98.81. In three short months that is an appreciation of 15.4%. On an annualized basis that would equate to 61.6%. Yikes! This jump can be attributed to the scarcity of inventory – which had been dropping dramatically since the beginning of the year.

Do we think the market will continue appreciating at that clip? No. Inventory appears to be stabilizing – and price appreciation seem poised to do the same in June. But appreciation seems to be the theme for this year – so although we don’t expect the rate to hit a dramatic 61% we do expect it to continue its upward climb.
The Arizona market is as HOT as the summer right now! Here is a snap shot of what has been happening recently. The most sales were purchased with CASH (3967) and the largest number of homes ( 1760) were on the market for only 1-10 DAYS before they SOLD! ( ARMLS data ending April 2012). Yes that is correct…DAYS!

Financing used to purchase homes:

Cash- 3,967
Conventional- 2,544
FHA- 1,441
Other- 18
Owner- 56
VA- 264

DAYS ON MARKET vs. SOLD

0 days- 166
1 to 10 days- 1,760
11 to 20 days- 971
21 to 30 days- 633
31 to 60 days-1,349
61 to 90 days- 846
91 to 120 days- 603
121 to 180 days-907
181 to 360 days- 785

The Facebook Crash Isn’t What It May Seem (as usually is the case with anything on Wall Street..)

I haven’t been very social lately. We’ve had the playoffs….the playoffs….ummmm…..the NBA Playoffs… Go CELTICS!!

Oh and we’ve been selling a TON of houses!!

Silver has been falling. “Sell in May, and go away.” So they say anyways, we’ll see. It’s an election year and we know that Central banks are trying to prop up the dollar as long as possible. We’ll see if we see QE3 after the election and a skyrocket in silver pricing tho.. The USD (US Dollar) is higher than it has been in over a year at over 82.

Facebook has gone public!

Many people think that when there is a stock IPO(Initial Public Offering) that it’s the first time people can buy stock. That’s not actually quite accurate.

It IS the first time the general public can buy the stock. But before the general public can invest, accredited investors get their shot first, and at a much lower price! To be an accredit investor, you have to meet certain criteria that the SEC sets out. Basically this means that the wealthy get an advantage with investing..No surprise!

Facebook stock opened up near $40, and it is now below $30.

Facebook shares dropped 10% today at a drop of over $3.

Many people are saying the IPO for Facebook was overvalued. Those who claim this might talk about how Google has 10x the cash flow of Facebook and 10x the strength on their balance sheet. What Facebook has now over Google is social usage. Google is working on that, but they got in late.

But here’s the thing: When a stock goes public, it is meant to benefit the company!! They make money by selling shares.

Facebook is smart and finds a way to do smart things. Zuckerberg is simply not your average CEO. There is something different to Facebook. It has swag. Facebook continues to adapt and integrate with other platforms. This is why I was wrong 2 years ago when I said Facebook was on the verge of falling to other platforms like wordpress and blogger.(right before my parents got on Facebook!) hah!

Will I invest in Facebook? I dunno…

With real estate, I can control my investment.

If Facebook keeps dropping, I can come up with a lot of fundamental analysis to support getting in. But I just don’t know…

What I can tell you I definately will buy more of if it keeps falling, is silver. I promise you I’ll pick up on that. I forecast QE3 after an election and more devestation to the European Union shooting the price of silver up.

If you want to follow Facebook as a company daily, and you commit yourself to a solid education in stocks, you can make money in Facebook. This way, you can make money whether Facebook stock goes up, goes down, or goes sideways.

But whether it’s Facebook stocks or any other investment, do your homework and don’t trust the BROKErs.

 

Distressed Arizona Homeowners May Qualify for the Short Sale Assistance Program (SSA)

Underwater Homeowner Update

May 22, 2012

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Distressed Arizona Homeowners May Qualify for the Short Sale Assistance Program (SSA) 

If you are financially distressed and can no longer afford your home or investment property in Arizona and are pursuing a short sale, you may be eligible for financial help with your relocation to alternative housing!

 

The funds come from the Arizona Department of Housing’s Save Our Home AZ program, part of the Short Sale Assistance Program (SAA).

 

Arizona Housing is making this transition assistance available to low- to moderate-income homeowners who may be eligible. You must:

 

·         Apply for the funds while actively engaged in a short sale before you complete the transaction.

·         Maintain their property until their house is sold.

 

For those who qualify, these state funds may be in addition to any transition assistance you may receive as a result of participation in the Home Affordable Foreclosure Alternatives (HAFA) program or any other pre-offer short sale program!!(Bank of America just came out with a program last week where you can get up to $30,000 for completing a short sale!!)

 

To find out more about the Short Sale Assistance Program and how your homeowners may qualify, visit the program’s website at http://www.azhousing.gov/. You can also direct your clients to call MyPadAZ’s Arizona Foreclosure Hotline at 623.252.3234 and identify themselves as Bank of America customers seeking SSA.

If you have questions, first contact your short sale specialists at MyPadAZ or by sending an email here

For urgent needs (such as a foreclosure postponement) or for escalation beyond your short sale team lead, contact MyPadAZ Short Sale Customer Care at 623.252.3234

Visit the Bank of America Underwater Homeowner’s Resource Center at http://www.arizonarealestateshortsalesphoenixaz.com/bank-of-america-short-sales/ for educational guides, news and resources to help you complete a short sale with Bank of America.  

Bank of America offering Underwater homeowners up to $30,000 to short sale

Bank of America Increases Relocation Assistance Payments to Customers Completing Preapproved Price Short Sales

Short Sales Provide Alternative to Foreclosure for Delinquent Borrowers Who Have Exhausted or Declined Home Retention Solutions

 

SCOTTSDALE, Arizona. – Adding to its foreclosure prevention initiatives, Bank of America has launched a nationwide program that offers delinquent mortgage customers increased assistance with relocation expenses – between $2,500 and $30,000 – at the completion of a qualifying short sale.

 

“Bank of America is committed to providing alternatives to foreclosure whenever possible,” said Bob Hora, home transition services executive for Bank of America. “This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home.”

 

The short sale relocation assistance program builds on the bank’s already robust short sale initiatives, which led to 200,000 completed short sales in the last two years and another 30,000 in the first quarter of 2012. This program is based on a similar incentive offer that Bank of America tested in Florida last year.

 

To qualify for the enhanced relocation assistance payments under the new program, the seller must work proactively with the bank to obtain a preapproved sales price prior to submitting a purchase offer to the bank. A short sale must be initiated by the end of this year and close by September 26, 2013, to be eligible for the payment. Qualifying short sales that have already been started but have not closed may be eligible for the relocation assistance.

 

The amount of assistance provided under the new program will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations.

 

Initially, the program will be offered on mortgages that are owned and serviced by Bank of America.

 

While available nationally, Bank of America anticipates greatest response to the program will come from borrowers in California, Nevada, Arizona, Florida and other states hardest hit by the economic downturn and falling property values.

 

Customers who believe they may be eligible for Bank of America’s short sale relocation assistance program may contact program specialists at 623.252.3234.

 

To help homeowners understand the short sale process and other foreclosure avoidance programs, we encourage you to visit the Home Transition Services website at: Arizona Bank of America Short Sales for Money.