Nationwide Some Good News & Bad News & More Bad News… See Below

If you don’t get Yahoo News I thought I’d pass on a couple of articles

Home sales rose in ’09 as prices plunged 12 pct. – Yahoo! Finance

December home sales down nearly 17 percent – Yahoo! Finance

My conclusion is that this market could be much better if the powers that be would just allow loans to be made to investors at or near the same rates, maybe just a bit higher,  than Owner Occupied real estate.

See my blog article regarding poor Mr. Phillips.   That story is being repeated thousands of times all across the country.

Pass the word.

Make it a great day…!

Ed Favinger, Broker, CRS, GRI      916-203-1260        favinger@rwnetwork.com

What… Another Renter’s Market Story…? Old News…

Sacramento Bee’s Recent Update Here

If you own a rental or are in the Property Management business, this is really old news.   Take a look, they aren’t long reads.  I’ll have more comment later.

Home Front: Asking rents in Sacramento region retreat to 2004 levels – Sacramento Business, Housing Market News | Sacramento Bee

Home Front: California unemployment ticks up

Make it a Great Day…!

Ed Favinger, Broker CRS, GRI              favinger@rwnetwork.com     916-203-1260

Technology and Today’s Property Manager

 It’s Amazing How Much We’ve Evolved isn’t it…?

Because every day it seems I’m checking out the Fry’s and Best Buy ads in the paper.   I’m amazed at the prices for digital cameras and video “camcorders”.   I can’t believe how little they cost anymore.

video camera

 

 

I purchased my first Sony Digital Camera back in 2000 for almost $500 that used floppy discs to store the images.   I could only get about 15 or so high quality pictures on a disc and sometimes the disc would be defective.   Which meant that I’d have to go back out to the site and get new pictures.

Now…?   I’m almost afraid to purchase anything because if I wait a couple of weeks I can get it much cheaper because the next “big thing” was just put on the market.

Video – What We Do With It.

  • Advertising – We’ve been using video in our Real Estate Sales business for about a year now and Digital stills in our rental ads.   That changed about a month ago and we are now using Digital Video in our Rental Ads
  • At Move in & Move Out  –   In addition to the “move in-move out” sheet that the new tenant would ordinarily fill out, we now do a video and “hi-lite” the areas that have “dings” or “stains”.   We then keep this in the tenants file and send them a copy too. 
  • Annual inspection – If you are an out of town owner, wouldn’t it be nice for your property manager to do an annual inspection so you the owner can see how your investment has been maintained ?    I did one just a few days ago over in Granite Bay.  And…as a side note,  when I’m in the area of a rental we manage I’ll drive by and just take a still with my Palm Pilot.
  • Emergencies & Repairs that come up  – Recently we made some repairs to a roof and gutter system in an apartment complex so I got a video of the work for an out of town owner.    We’ve also used videos of fallen trees and sent them over the Internet to out of town owners to keep them up to speed.

Bottom LIne…?

Keep in mind that you don’t have to have commercial radio quality “Voice Over Tonality” to do these videos.   It’s the pictures that do most of the talking.   So just narrate enough to describe what you are shooting and remember that “Youtube” is your friend.

 

I hope this helps…

Make it a Great Day…!

 

Ed Favinger, Broker CRS, GRI         916-203-1260 Mobile         favinger@rwnetwork.com

Long Term Tenant Can’t Pay the Rent – Tales From The Front.

So you’ve got a Long Term Tenant that wants to “work a deal” with you… ?

Should you be flexible in these “hard times”… the recesssion

I know times are difficult now, but you as the landlord are not part of the Welfare System, so please don’t feel guilty that you are owed the rent.    

If you find yourself in this situation, let me give you some advice before it’s too late.

In California as you may know the rental contracts specify rent is due on the 1st and late on the 2nd. However you can’t not charge a “late fee” until after the 5th of the month.

Here’s the correct way to handle this situation.

Let’s say a tenant comes to you with a situation that they are unable to pay the rent and I mean they can’t pay any rent. If they have been decent tenants and have not been consistently late and have maintained the property, here’s what you should do so you don’t get burned and left without rent for a long period of time.

Your first step is to give the tenant a “3 day notice to pay or quit”.   If at the end of that time you don’t have a response your next step is to turn this over to an “Eviction Attorney” and let them handle it from that point.

However, let’s say you have given the 3 day notice to pay or quit and the tenant comes to you with a “partial” payment.  It’s ok to take that in, but then, you turn right around and issue another 3 day notice to pay or quit for the remainder until it’s paid.   The reason I recommend this strategy is that you must keep up the pressure on the tenant to get their rent in and continually issuing 3 day notices after a partial payment does that.

Why You Should Not Be Too Flexible.image2021

Let’s say the 1st of the month comes around and a tenant tells you he can’t afford this month’s rent for what ever reason.  You’ve had a decent relationship with this person so you decide to give them the benefit of the doubt, take their word and do not issue a 3 day notice.

Two or three weeks later they still haven’t paid the rent,  they tell you they are “working on it”  but,  still haven’t given you any money towards the rent.

All of a sudden you realize it’s in the 3rd week of the month and the next month’s rent is due within a week or so.  Keep in mind you haven’t  started the “eviction” process.

In Sacramento County you have to figure it will be about a 9 to maybe 10 week  process from the day you give the 3 day notice to the tenant  to the day you get into court.  When a judge finally orders the tenant out of the property and the Sheriff does the “lock out” a lot of time has passed with no rent.

Failure to act quickly and timely because you are “working” with a tenant that is in arrears will,  “in most cases”,  cost you time and therefore income if you had a “paying tenant”.

So… in the case above you’ve waited 3 weeks or so.. then you finally give them a 3 day notice to pay or quit.  Another month will pass before you finally get them into court and regain possession if they don’t answer the complaint.   If the tenant does answer the complaint, it will take longer.

And since they are so far behind, the chances of them catching  up are very slim. 

Bottom Line is you should run your property by the book.   You can be compassionate, but don’t let someone else’s problem become yours.   I’ve had experience trusting tenants in arrears only to be burned later when they decide it’s cheaper for them to move out than to pay the back rent and the current rent in a “deal”.

I hope this helps…

 

Make it a Great Day..!

Ed Favinger, Broker CRS, GRI         916.203.1260 Mobile          favinger@rwnetwork.com

Sorry.. You Don’t Qualify for a Loan Mr. Phillips.

What do you mean I don’t qualify for a loan…

Look of shock

Are you crazy…?

I make over $100k a year,  have an 800+/- FICO,   AND…  Several Million in the Bank!

That’s just exactly what Mr. Phillips was told by Wells Fargo Bank  recently.  He’s in contract with us to purchase a duplex in the area and while waiting for the Short Sale approval,  was going through a “refinance” on a duplex he paid cash for about 6 months ago.

Because of the “new lending rules” regarding investors, Mr. Phillips had to wait 6 months just to be able to even put in an application to borrow some money on this property.

The property was appraised at over $230,000 and he only wanted to borrow 60% of this amount.. about $138,000 maybe a little more and use this money for a down payment on a new investment.

Wells Fargo is offering fixed rates at about 6%,  30 year fixed or maybe a little lower, but Mr. Phillips doesn’t qualify because his income is all passive.

Let me tell you that Mr. Phillips has had this problem in the past because I have described him in earlier posts to this blog.

By the way… He can get a loan… but it won’t be at the rates a person who has a W-2 type employment would ordinarily qualify for.   No,  Mr. Phillips, inspite of his net worth, low debt and high FICO scores doesn’t qualify for the “best available” rates.    Mr. Phillips deserves 12% and higher in loan rates..!  Isn’t that amazing…?

What is the “effect” on the Real Estate Market when this occurs hundreds of times over in this area..?

Well… someone once told me the average income multiplyer that occurs for every real estate transaction is around $30,000 and higher.   Because, not only are commissions paid to real estate agents.. fees go to title insurance and escrow companies, city & county taxes & fees,  loan companies , pest control companies, roofers, furniture companies, movers, inspectors and appraisers, contractors, and suppliers are all a part on just one deal in most cases.

In Mr. Phillips’ case, he’s taking a 2nd look at this new deal because his rate of return of his investment  is being devalued only because he’s been a success.

When you slow down people like Mr. Phillips…?  you slow down the recovery of the Real Estate market and the rest of the economy.   Ask around you’ll hear lots of stories like these.

Does that make sense to you…?

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI         favinger@rwnetwork.com 916-203-1260

The Reaction of a Cynical Homeowner in need of a Modification

short sale - small house

Participate in a Short Sale and We’ll give you some $$$ back was the message to a Home Owner…

So What Happened…?

I approached this particular Owner in my capacity as a “Home Retention Consultant” under a contract with Titanium Solutions Inc. Titanium Solutions, if you didn’t know,  has been retained by several Lenders to help keep people in their homes if possible and to assist the Banks and Home Owners in keeping the lines of communications open.

If a Modification can’t be worked out, we as Agents and Brokers are encouraged to get the Home Owner to participate in a Short Sale because the banks know it costs them more to go all the way to foreclosure.  We pay a referral to Titanium if we successfully close a Short Sale lead provided by them.

They will also pay us a small fee just to help the Lender and Home Owner keep the lines of communication open.

I can not tell you who the Lender was but they were ready to offer this particular owner  $2,500 if he’d participate in a Short Sale.

He just turned it down flat.!!   Not interested.. Not motivated at all.   Why…?   Because, in his opinion,  he had put so much money into the house that if he took the $2,500 from Wachovia he’d “lose money”.   His rational was that he knows what the homes in his neighborhood are selling for and he wants a decent loan modification that lowers his payments and does not have negative amortization.

He also wants his loan amount lowered.   If he doesn’t get it his way he’s prepared to go all the way to foreclosure but then take everything he’s put into the house with him.  In short gutting it.   He’s installed over $13,000 just in a patio cover, new granite counters and new kitchen cabinets, new appliances and a new bbq island in the back yard.

I think this is an indication of the “cynism” that is in the minds of many people, who for whatever reason, find themselves in this situation.

In this case the young man got divorced and the only way he could stay in his home was to “refinance” into one of these loans that have been the subject of many a news article.

Just another story in a frustrating year of Short Sales and Foreclosures that are everywhere.

Make it a Great Day…!

Ed Favinger, Broker, CRS, GRI     favinger@rwnetwork.com 916-203-1260

Bank Owned Duplex in Rancho Poised for Mulitple Offers

On the market for just a day or so…I walked inside and saw an Agent writing up an offer.

Click here to view what I saw and let me know what you think.

 

Make it a great day

Ed Favinger, Broker CRS, GRI      favinger@rwnetwork.com  916-203-1260

Have You Heard..? It’s a Renter’s Market Out There

Rental Market Update  –  Is it picking up or not ?   Phone Traffic is the Clue !

As a whole our phone traffic has been a little better this week.   Prospective tenants have been searching new places to move to and we’ve noticed they ask a lot more questions regarding amenities and rental terms such as who is responsible for water, sewer and garbage fees. 

upward graph

We’ve had calls on a condo that’s been vacant for about 45 days that was finally shown today for only the 2nd time.    We’ve had several new inquiries on a duplex in Roseville that’s also been vacant about 45 days or so and we’ll be showing this weekend to a couple of potential tenants.  We’ve had a decent amount of showings for a Town House Apartment in an 8 unit complex in Cameron Park… one gal has looked at it 3 times now.  We’ve rented up 2 of them in the last 2 weeks after we lowered the rent schedule.

We took a Holding Deposit on a Town House apartment in a small 13 unit complex in Roseville the day after the other tenant moved out.    We’re now in the process of getting it “rent ready”.    On this complex, we had to lower the rents to a new “price point” that finally worked.   Since then, we have rented up 3 units in this complex that were vacant for over 45 days.

A small amount of calls have come in on some  2 bedroom 1 bath flats in Citrus Heights that have been vacant for 2 months…but no applications to rent.    The reason for this in their case is because of a lack of “amenities”, in my opinion.   So when you couple that with a “tenants market”, you’ll find that good prospective tenants are looking for more value and utility for their money..

The only way to compete is to offer a “rent special” at move in, or perhaps lowering rents if you have an extended vacancy period.

 

Make it a great day….

Ed Favinger, Broker, CRS, GRI

favinger@rwnetwork.com    916-203-1260

Cash Is King in Sacramento Region’s Duplex – Four Plex Market..!

Fourth Quarter Stats show just over 50% are All Cash Offers.

I think one of the reasons you are seeing more cash deals is because of the tight restrictions on “investor” financing that I will have more to say about later.

If you have been looking for an investment property and haven’t been able to get in the door because of competition of other Investors, don’t feel like it’s something personal with you and your situation.   It’s a function of our current Market & Economy.

I have the list of Closed Sales for the 4th Quarter that shows:  List Price,  Sold Price,  Days on Market, Type Financing if any and the “reported rents” in some cases.   I have the Summary Below.  Click Here for the Closed Sales List in PDF format

4th qtr 2009 

I hope you take a minute to look at the list because you’ll be amazed at how many of them sold for well over asking price.

 

Make it a Great Day

Ed Favinger, Broker       favinger@rwnetwork.com, 916-203-1260