New FHA Rules – Read em and weep…!

It seems they just don’t want to let the market recover…  That’s my opinion.

Click Here for the Update

One of the big changes that will come into effect soon will be the limit on the amount of Closing Costs  you can ask the Seller to pay.   That means if you are a low cash down buyer it will be harder for you to get in.

What they are worried about is the potential for the Seller to “inflate the price” to pick up those costs.

I don’t know how that can happen since the appraisal rules also require an appraiser to stipulate that even though the Seller is paying the closing costs, it has no effect on the value being paid.

Make it a great day.

Ed Favinger, Broker CRS, GRI     916-203-1260

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

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         916-203-1260

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 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, 916-203-1260

Is Curb Appeal Important for Duplexes or Any Investment Property..?


A Side by Side Comparison – Which One Would You Live In…?

I was out and about driving in the area looking at property and saw two Duplexes side by side and thought I’d show them to you here.

Let me guess which place you would want to live in.



As you can see this one is nicely landscaped… well manacured that shows “pride of ownership” because it’s got an Owner that runs it right. 


In fact when I took this picture today she was getting a bid to have the exterior painted.   She got a chuckle when I told her why I was there to take a picture.   





This Duplex is located directly next door and to the right of the picutre above.  In my opinion this not only impacts the rental value of this property, it also effects the rental value of the one above as well.







  What is there negative to say about this property?    Yea… maybe it does need a new paint job to update the curb appeal a bit.  This owner knows the value of putting money back into an investment to get a consistant return.  That’s why she was there with a painting contractor to make sure it’s kept up. 






While I don’t know how often the owners drive by his property, if they don’t have time…?   Maybe he should hire a Property Manager that would have this responsibility. 

I think you would agree,  that if you as an owner,  don’t maintain or care about the curb appeal of your property, don’t expect a tenant to pick up the slack.   Chances are they will make it worse if you don’t have expectations and rules for them.

Folks…  You know… I’m not saying that you have to spend a lot of money on landscaping, but an initial investment in some trees, flowering shurbs, a timed sprinkler system and some lawn area will pay you back big time in the form of higher rents paid by quality tenants.   They will pay you on time and when you go to sell this asset…?  Ask your Agent or Broker how much the Sales Price is affected if it’s got a lush landscaped “curb appeal”.

Make it a great day…!


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Bank Owned Four-Plex – Carmichael, Ca


If you have known me a while, you know I am not a big fan of Four-plexes in this area.

The reasons are as follows:

  • Most are flats – 2 units down and 2 units up
  • Most have no covered parking
  • No private patios or yards
  • No Firepaces
  • No Dishwashers
  • No Washer/Dryer Hookups – although they might have a coin-op Laundry Room
  • Located in a high density area of other rental units

However – Check this one out at 5720 Engle, Carmichael – These Four  Plexes  were built in the late 80’s.  They have just about all the amenities of a single family home or a duplex,  that are excluded in the list above.   Those missing amenities are pretty typical of most of the Four-Plexes in the Sacramento Region.

Click here for a Palm Treo video of the exterior taken this past Saturday, July 25th.  This property is located on the corner of Engle and Sareco Court.   If you go to google maps you can get the “street view” of this property.

You will notice in the slide show above that this is a nice area that is not all apartments another “plus”…!