Wait at least one more year before purchasing house! (Phoenix: bank owned, foreclose)

[Captain Bill]

I may have mentioned before that many sales are done that never show on the mls for various reasons.

• Sales at trustee sales resold by the buyer direct to investor.
• Short sale buyers, flipping to someone on their buyers list.
• Rehabbers selling direct to someone on their buyers list.

Here's a good example:

This morning I reached agreement to purchase a property located on the waterfront in one of the lake communities in Gilbert. We had offered on the house before, but lost out to a higher offer. That contract fell through because of buyer non-qualification, and while it was in escrow the listing Expired.

I had asked the agent to call me if the sale fell through, and he did. He was waiting for the signed extension from the bank, which they still haven't sent, so he couldn't make it Active on the MLS again without that signed extension. That was a big plus for us because no one else knew the place was back on the market.

Since different duties are performed by different individuals, it didn't matter to the asset manager that the listing was showing Expired; S/he was still charged with selling the house.

It was someone else's responsibility to do the listing extention paperwork, and he could still sell it without the listing agreement being extended.

So I negotiated the purchase, and since the mls sheet still shows Expired, it will not reflect my purchase.

This property is in move in condition and we're going to sell it right away for only $198k because we were able to negotiate such a good price. We'll probably have a buyer ready prior to our own escrow closing because the Townhouse was upgraded with granite counter tops, tile floors and Oak hardwood in the great room. The comps show a value of around $249k. And the sale won't be on the mls because it'll probably be a buyer from our buyer list that will buy it.


I had discussed previously that investors should always have two exit strategies prior to a purchase. In this case we have 3.

1. Retail to end user at a discount
2. Do more upgrades, stage it, and retail for close to current market value
3. Hold to rent.

We don't want to hold it, but it is an option.

[markas214]

Originally Posted by azriverfan.

In addition, living near the beach comes with its own price, for one thing, it's a lot cooler especially in the winter. You are not really enjoying that balmy LA weather when you are living right on the beach. As anyone who lives on the beach in So Cal can tell you, it's pretty damn cold in the winter. .

What about the water temp? Is it swimmable most of the year like South Florida? No big deal being on a beach where all you do is look at the ocean.

[markas214]

Originally Posted by Captain Bill

Some economists are predicting turn around in as little as 4 months. I don't see it happening that soon. However, if the public begins to perceive that things are turning around then there will be more consumer confidence, and that consumer confidence is what is needed to get the economy turned around, in my opinion.

In 2005 "some" economists were predicting a 20,000 DOW and claiming that real estate prices were in a new paradigm and would never fall. Consumer confidence in an over leveraged economy with rising unemployment is more media driven than rooted in fact. I see so many properties that are in my range, over an acre, pool, horse facilities that tempt the hell out of me but my rational side is stronger. This economy like nothing we've seen before. It is impossible to predict.

[Howard Roark]

I agree with the group's points about LA versus Phoenix for the most part. LA has lots of griminess. It's not so grimey within a half mile of the beach. The climate is worth it. As for commute, I'm assuming that is not necessary. I currently work in LA, and the apartment is a mile from the beach. The office is about 2 and a half miles from the beach. So I don't see traffic problems. Also being close to the beach, I breathe cleaner air than those in downtown LA and in Pasadena.

There are bungalow prices coming down. I'm not so sure if I agree with Captain Bill on this issue. Schools along Redondo Beach and Hermosa Beach are much better at educating kids than the schools in Arizona. So the beach area is a good place to raise kids.

Originally Posted by markas214

What about the water temp? Is it swimmable most of the year like South Florida? No big deal being on a beach where all you do is look at the ocean.

[Captain Bill]

Originally Posted by markas214

In 2005 "some" economists were predicting a 20,000 DOW and claiming that real estate prices were in a new paradigm and would never fall. Consumer confidence in an over leveraged economy with rising unemployment is more media driven than rooted in fact. I see so many properties that are in my range, over an acre, pool, horse facilities that tempt the hell out of me but my rational side is stronger. This economy like nothing we've seen before. It is impossible to predict.

I agree that consumer confidence is pretty much media driven. The media has the consumer scared to death right now, and that's why restaurants and other companies are going out of business.

Obama scared the consumer further when he first took office because he was talking negatively. Now he is changing his tone to become more positive.

I also agree that this economy is unusual, and that's why we have so many different economist viewpoints and forecasts.

We have to look at what is happening in the market place and try to figure out on our own what the near future will bring.

[Captain Bill]

Mortgage Rate May Hit 4.2% By End of the Year: Economists - Real Estate * US * News * Story - CNBC.com

[olegk]

Originally Posted by Captain Bill

Mortgage Rate May Hit 4.2% By End of the Year: Economists - Real Estate * US * News * Story - CNBC.com

Thanks for link, Captan.
Considering housing market season will end in Aug- Sept. End of the year might be good time to consider buyiing, unless media is fooling us about depression slow recovery signs ( I don't see any so far..)

[azriverfan.]

Originally Posted by markas214

What about the water temp? Is it swimmable most of the year like South Florida? No big deal being on a beach where all you do is look at the ocean.

No, it's not swimmable. It's just eye candy. It looks cool. Most people never actually get in the ocean. This is why I laugh when LA people brag about the ocean because they never go in it or the beach for that matter. The few brave surfers have to wear wet suits because the water is freezing. It's not like South Florida, Mexico, the Caribbean or Hawaii. And even aesthetically, it's not all that pleasing. The water doesn't have that crystal clear blue that you like, it's black

[markas214]

Originally Posted by Captain Bill

Mortgage Rate May Hit 4.2% By End of the Year: Economists - Real Estate * US * News * Story - CNBC.com

If rates hit 4.2% and prices are down another 10-20% by fall or winter I'll buy. The difference from 5.2% and 4.2% is $200 a month on a $300,000 loan. It doesn't make nearly as much difference on a $150,000 loan, $80 a month saved. The lower priced houses are selling but the upper end still needs to adjust in my opinion. Also there is a huge inventory of houses priced over $400,00. So low rates and a 20% reduction may well get those moving too. At the risk of sounding overly optimistic it may be the opportunity of a lifetime.

[azriverfan.]

Originally Posted by markas214

If rates hit 4.2% and prices are down another 10-20% by fall or winter I'll buy. The difference from 5.2% and 4.2% is $200 a month on a $300,000 loan. It doesn't make nearly as much difference on a $150,000 loan, $80 a month saved. The lower priced houses are selling but the upper end still needs to adjust in my opinion. Also there is a huge inventory of houses priced over $400,00. So low rates and a 20% reduction may well get those moving too. At the risk of sounding overly optimistic it may be the opportunity of a lifetime.

Agreed, that has been my experience. The upper end has not adjusted and many of these homes are still grossly inflated. I'm waiting. I've been watching those homes and they have been on the market for a while. Ultimately, those owners will have to drop the price on their homes