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Real Estate Resources
Welcome to the AAOA Forum, where we discuss the the topics our members want to hear and want to talk about. We like to take an active roll in the online community to help our members learn and help educate landlords new and old. We encourage you to participate and join in our discussions. Thanks.
Refinancing Applications Down 30%
The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 26, 2009. The Refinance Index decreased 30.0 percent to 1482.2 from 2116.3 the previous week and the seasonally adjusted Purchase Index decreased 4.5 percent to 267.7 from 280.3 one week earlier. The Refinance Index is at its lowest level since November 2008.
The four week moving average for the seasonally adjusted Market Index is down 9.2 percent. The four week moving average is unchanged for the seasonally adjusted Purchase Index, while this average is down 15.2 percent for the Refinance Index.
The refinance share of mortgage activity decreased to 46.4 percent of total applications from 54.0 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.3 percent from 4.1 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.34 percent from 5.44 percent, with points increasing to 1.12 from 0.99 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.81 percent from 4.93 percent, with points increasing to 1.04 from 0.92 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 6.52 percent from 6.54 percent, with points increasing to 0.13 from 0.11 (including the origination fee) for 80 percent LTV loans.
For questions about our blog, contact our editor at kim@joinaaoa.org.
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Posted by Kim Ezzell on 07.02.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Alternatives to Traditional Financing
Despite all the information in the press about a thaw in the availability of mortgages, many highly qualified borrowers are still having a difficult time obtaining financing. This is especially true if you own a more expensive home.American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.org.
For questions about our blog, contact our editor at kim@joinaaoa.org.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 07.02.2009. 1 Comment »
Filed under: AAOA Forum, Financing
Condotels Don’t Pencil Out
6 factors that negatively impact investments
by Steve Bergsman
Despite the oversized ego, I’ve been a big fan of Donald Trump. After all, how many real estate developers have created a “brand” out of a family name? Once, when I interviewed him, he told me putting “Trump” on a building created a huge premium as compared to, for example, an equivalent apartment unit built by someone else.
So it was with some dismay as I watched him over the past few years try to carve his way through the world of condo hotels, now often advertised as “condotels.” This product has been on my watch list as one of the worst real estate investments ever created for the simple reason that it is really just a financing mechanism for the developer and for all practical purposes, caveat emptor, which in today’s world means let the buyer be damned. Read the rest of this entry »
Posted by Kim Ezzell on 06.22.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Alternatives to ‘Buying’ Real Estate
by Howard Bell
There are a lot of us that would like to participate in the housing recovery, but won’t or can’t invest large dollars in a home. Prices are still declining and if you are wrong you wont be able to get out, thereby becoming a late stage victim of the housing collapse and feeling especially stupid for having done it.
There are alternatives to real estate investments that wont take everything you got and they are liquid: The traditional method is to use
REIT’s.
REIT’s
You might think of these as mutual funds that use real estate investments rather than company stock or bonds as the underlying tradable asset. There are REIT’s that specialize in apartments or storage or shopping malls, you can pick the sector you think will do best. If you are wrong you can sell. Its a stock market investment, they are as liquid as stocks.
RPX Index
Another method of virtual real estate investments the RPX index, compiled by Radar Logic. A real estate data and analytics company, they created a daily price index of property using the MSA as a basket.
What makes Radar Logic interesting is that you can drill down to a single MSA, almost a micro market. REIT’s are using broad asset classes such as Mortgage REIT’s or Public Storage, Apartment or even state REIT’s. But MSA’s, now that’s quite a narrow slice. If you know your area and have deep convictions, you can make a bet on the direction of price.
The RPX March Index Report
The report indicates the 25-MSA Composite has stabilized since January 2009, after being in a free fall for much of 2008. The Composite declined only 0.3 percent on a month-over-month basis in both February and March 2009, which compares favorably to the 1.2 percent and 0.9 percent declines in February and March 2008, respectively. The average monthly decline in 2008 was 2 percent. They have a nice chart breakout of the 20 MSA markets. Its a cool way to track real estate by sector and stay on top.
According to RPX, Prices improved on a month-over-month basis in 11 of the 25 MSAs tracked by Radar Logic. In six more MSAs, home prices declined less from February to March than they did from January to February. Buyers returned to California’s housing market en masse in February, attracted by 2001 and 2002 price levels and a fresh supply of foreclosed homes. What is intriguing about the approach is that you can drill down to your own micro market, what you know best. If your wrong you can sell, quickly. This should improve risk levels and allow people to participate who might not yet be ready to buy in the physical world.
See Howard Bell’s feature, Get Your Property Rented Faster.
Howard Bell PFP CCRM is the founder/editor of Your Property Path.com, featuring over 450 articles on property management, Your Property Path SF, trade talk for the San Francisco real estate industry, Your Property Path News Brief, snap news updates and real estate market info, and Your Property Path Amazon Store. Howard is a property manager in San Francisco and holds a certification in financial planning.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at joinaaoa.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 06.10.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
New “Fair and Safe” Lender Certification
As the costly burden of predatory lending and mortgage foreclosures continues to ravage families and neighborhoods across the United States, the “Fair Mortgage Collaborative” (FMC) was launched Wednesday by mortgage lenders, foundations (including the Ford Foundation and Calvert Foundation), and advocacy organizations (such as the National Council of La Raza) to promote the use of fair and safe lending practices and its certification program.
The Fair Mortgage Collaborative is a nonprofit membership organization whose members are individually and collectively committed to homeowners and homebuyers access to mortgages with the consumers’ best interests at its core, at a fair rate of compensation. Read the rest of this entry »
Posted by Kim Ezzell on 06.10.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Converting Home to Rental More Difficult
by Tom Kelly, Inman News
The housing market has been as uncertain as the next monthly unemployment figures. Families have put home purchases and remodeling projects on hold, waiting for a positive sign in consumer confidence — or an upward, consistent move in the stock market — to make a big-ticket decision.
A friend of mine, whose two daughters are grown and gone, would like to remodel a home in the neighborhood, sell his present residence, and then move in to the remodel. Given the present conditions, he doesn’t feel he can do either. Read the rest of this entry »
Posted by Kim Ezzell on 05.28.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Foreclosures Surge: Another New Record
by Howard Bell, MyPropertyPath.com
This bubble is still not over. I wonder if its true that bubbles tend to erase wealth all the way back to its beginning. Bubbles are a do-over.
Realtytrac: Foreclosures in April rose and are now affecting one in every 374 housing units, and bank repossessions will spike in the next few months.
cbs marketwatch: “Much of this activity is at the initial stages of foreclosure — the default and auction stages, while bank repossessions … were down,” suggests that many lenders and servicers are beginning foreclosure proceedings on delinquent loans that had been delayed by legislative and industry moratoria.”
Parsing the News
Foreclosures in California fell 10% month over month, a rate of one in every 138 housing units targeted for foreclosure. If you could remove the top four foreclosure states: California, Nevada, Florida and Arizona, it wouldn’t look as bad. Together they accounted for nearly 60% of all the activity.
Anyone Benefit?
Renters. Apartment rents are dropping and vacancies are increasing. We are beginning to see rent roll backs which landlords are happy to agree with. A tip for owners: ask for a new one year lease if you do agree to a roll back. Constant cash flow and tenant retention is now more important than getting that high value renter.
Future Buyers. Some signs of stabilization, the ratio often used to compare home prices to income puts homes at 5% overvalued.
Two things make me nervous. First Jan Hatzius, the chief economist at Goldman Sachs, says that the “massive amount of excess supply” means that home prices nationwide will probably fall an additional 15 percent. (Via the NY Times.)
Secondly, we have huge inventories that the banks have been holding back because they are flooding the markets and driving prices even further down. Still, economically, the worst is probably behind us but for homes we will have to wait a little longer. When the bottom does come, it will be a hell of a buyers’ market.
See Howard Bell’s feature, How to Rent Your Property Faster.
Howard Bell PFP CCRM is the founder/editor of Your Property Path.com, featuring over 450 articles on property management, Your Property Path SF, trade talk for the San Francisco real estate industry, Your Property Path News Brief, snap news updates and real estate market info, and Your Property Path Amazon Store. Howard is a property manager in San Francisco and holds a certification in financial planning.
American Apartment Owners Association offers discounts on products and services for landlords related to your real estate investment including REAL ESTATE FORMS, tenant debt collection, tenant background checks, insurance and financing. Find out more at http://www.joinaaoa.org./
To subscribe to our blog, click here.
Posted by Kim Ezzell on 05.18.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Appraisals Killing Deals in Many Markets
by Dian Hymer, Inman News
Finding the right house to buy is never easy; selling a home today is also challenge. It’s best to prepare yourself for obstacles that could cross your path so that you’re prepared should they arise.
In some markets, one in three transactions doesn’t close. This is a high ratio compared to the fallout ratio in previous years when the housing market was stronger and financing options were plentiful. In past years, most transactions fell apart over inspection issues. The biggest hitch today is financing, which is not to say that property defects don’t come into play.
Posted by Kim Ezzell on 05.11.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
Need to Knows When Buying REO`s
Q: My husband and I are in the process of buying a foreclosure property, as is. The property is not in bad shape, but it is missing the air-conditioning units and a few other items. A: You’ve clearly stumbled across one fundamental truth of buying an REO: You’re not buying from a person! You’re buying from an organization — an institution — a corporation. This has numerous, different implications at every point of the buying process. The decision-makers have totally different motivations and guidelines than individual sellers do.
Mindset Management
Picture yourself as David vs. the Bank’s Goliath. Go into your deal understanding that all the contracts will be written up as favorably toward your opponent as possible without being declared unconscionable. Kick off your escrow with the understanding that the bank’s own boilerplate counteroffer and addenda will be bulletproof in changing all of your state’s standard real estate practices to go against your interests and protect the bank, and making sure that you could never successfully sue the bank should a surprise problem later arise with the property. And walk in with your eyes wide open to the fact that your escrow might be bumpy.
But also go in knowing it could very well be worth it to get (a) your dream home (or at least your pre-dream-home home), (b) a great price, or (c) a house at all on today’s market — depending on your price range, and where you’re at geographically, you might find that many or most of the homes for sale in your market are REOs so, as my Mom used to tell me about my little brother, you might just as well learn to live with them!
Don’t let all this deter you from buying an REO. Instead, let it inform your perspective and your action plan. Instead of relying on the bank to give you as much information as possible, like you would expect from an individual seller, rely on yourself and your team of inspectors to obtain all the information possible to uncover before you remove your contingencies or waive your objections.
Need-to-Knows
One more need-to-know about doing the deal with the bank — the bank never lived there! And, for that matter, the bank’s break-up, so to speak, with the folks who did live there (the former owners) was very likely, shall we say, less than warm-and-fuzzy. So the bank has absolutely no information whatsoever about the condition or history of the property. Many states totally exempt banks from making substantive disclosures about the properties they own and sell. Any forms you can get from the bank or their listing agent are likely to be liberally sprinkled with “N/A” or “Unknown” in every blank that calls for the information you care about.
Any and everything you need to know about the property you need to gather yourself, from your own personal observation and investigation or from your inspectors and contractors. Beyond that, you can minimize the financial exposure you face from surprise issues by obtaining — and maintaining — a home warranty plan on the property for the entire time you own it.
Action Plan
1. Get inspections — at least pest, property and roof. Then read the reports. Then follow up; if any further inspections are recommended, get them, attend them and read those reports, too.
2. If there’s work you’ll need to have completed to be comfortable owning or living in the property, obtain contractor repair bids for those projects before your contingency period is up.
3. If you wonder whether an addition is legal or not — go investigate your city’s building-permit process. If you wonder what the neighbors are like, go knock on their doors and drive through the neighborhood at different times of day. If you want to know what the district’s crime rates are, call the police department and ask. The theme here is — if there’s any information that’s important to you, then it’s important that you go get it!
Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.
Share your insights by commenting below. For questions about our blog, contact our editor at kim@joinaaoa.org.
American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 05.07.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing
New Appraisal Rules May Deflate Property Values
New guidelines that became effective last Friday are causing controversy within the mortgage industry, and protests have been launched by both mortgage brokers and appraisers calling for immediate amendments.- only lenders can order appraisals
- the borrower must pay (credit card pre-authorization)
- brokers or loan officers cannot pay for or order appraisals
- only the lender can communicate with the appraiser
Share your insights by commenting below. For questions about our blog, contact our editor at kim@joinaaoa.org.
American Apartment Owners Association offers discounts for landlords on products and services related to your rental investment, including real estate forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.
To subscribe to our blog, click here.
Posted by Kim Ezzell on 05.04.2009. CLICK to Leave a Comment »
Filed under: AAOA Forum, Financing