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Monday, September 30, 2013

3 Lessons Learned from Home Flippers

Here's an interesting article i just came across from RisMedia.  House flipping was huge in the Sacramento area during the boom/bubble years of 2002-2006.  Then things died down a bit when the bubble burst.  Slowly, flippers started getting back into the game in 2010 and it has really picked up again in the Sacramento Area.
House flipping in Sacramento real estate - Doug Reynolds Real Estate - www.SellWithDoug

Lex Levinrad is getting phone calls. More than he can handle. His Deerfield Beach, Fla.-based Distressed Real Estate Institute is flooded with requests these days from regular people — teachers, plumbers, paint salesmen — who want to invest in South Florida real estate now that home prices are rising.

Many who attend his monthly seminars around the area are learning the art of “flipping” — buying properties at deep discount, fixing them up and reselling within a few months to traditional buyers.

Levinrad, 46, a South African native who says he’s bought and sold more than 500 homes, shows aspiring investors how to do the math and where to find the deals. He also counsels them to be careful, to avoid the mistakes that led to the housing crash. He said investors often pay too much for homes and underestimate the cost of repairs. “They become emotionally attached to the house, get greedy and stubborn and won’t sell unless they make a certain profit,” he says. “That’s how they get stuck.

Here are three golden rules of real estate investing:
—Don’t buy with the expectation that the home will shoot up in value. During the housing boom, too many flippers got burned by counting on fast price appreciation. When the market tanked, so did they.
“If you buy only hoping that prices are going up, it’s the same as going to (Las) Vegas,” Levinrad says.
Flippers must buy at enough of a discount that gives them instant equity in the home, Levinrad says. That allows them to turn around and sell without having to wait for prices to rise.

Without instant equity, it’s best to hold off — unless investors are willing to become a landlord, he says.
Levinrad and David Dweck, founder of the Boca Real Estate Investment Club in Coconut Creek, Fla., say flippers should buy a home for no more than 65 percent of the market value after repairs. If a house is worth $100,000 after it’s renovated, and it requires $10,000 in work, the maximum price an investor should pay is about $55,000.
Dweck’s advice: Don’t skimp on renovations and save the receipts to show appraisers. “The biggest challenge right now is appraisals,” Dweck says. “The more ammunition you have to give appraisers, the better. But there is absolutely no guarantee.”

Maher Hanna, a student of Levinrad’s seminars who started investing full-time this year, says flippers — particularly beginners — may have to be satisfied with modest profits.

—Do your own due diligence. Investors should know the true value of a house without relying solely on outside sources.

Too many novice investors take a real estate agent’s word, Levinrad says. Even appraisals may offer only a ballpark figure, he says. The best way to determine value: Travel to the neighborhood, attend open houses and see what similar-size homes are selling for.

Also find out how many other homes in the area are listed and for what prices. Flippers should price their renovated properties slightly below market value to attract interest. That will ensure they don’t have to keep the home any longer than necessary, Levinrad says.

—Know your exit strategy. If an investor is planning to buy, renovate and resell, stick to the plan.
Some investors change course and end up regretting it. They may realize they’ll make less money on the deal than originally expected, so they hold the home and rent it instead.

But then they discover they aren’t prepared to be landlords — from the hassles of dealing with problem tenants to the high cost of maintaining the homes.

“Something that was supposed to be a profitable and enjoyable experience turns into a nightmare,” Levinrad says. “If your profit is less than you anticipated, consider it a lesson learned and move on to another property.
clear skies,
Doug Reynolds

Wednesday, September 25, 2013

JUST SOLD- 8161 La Riviera Dr, Sacramento Ca 95826 - www.CollegeGlenRealEstate.com

Just Sold - Doug Reynolds Real Estate - www.CollegeGlenRealEstate.com - www.BuyWithDoug.com - 8161 La Riviera Drive, Sacramento Ca 95826

JUST SOLD!!! 9/13/2013 in College Greens, Sacramento Ca.  This is a wonderful townhouse right next to the American River, the bike trail and close to Sacramento State, shopping, dining.  Beautifully remodeled 3 bedroom, 1.5 bath, 1326 square feet.  Open and Bright floorplan, tons of storage, covered parking spot, personal patio/backyard area, indoor laundry, and large bedrooms.  Congrats to my client on purchasing her first home!!

This property is in the neighborhood that i live and specialize in: College Greens / Glenbrook.  If you are looking to buy or sell a house in that area i am available to assist you.  More neighborhood information can be found at: www.CollegeGlenRealEstate.com 

clear skies,Doug ReynoldsRealtor916-494-8441 

Tuesday, September 24, 2013

Sacramento Real Estate September - October 2013 video Market Update

Doug Reynolds, a Sacramento Area Realtor, discusses the most recent market statistics for Sacramento Real Estate.  In August 2013, the Sacramento market started to level off after going up like crazy for 1.5 years.  This month Doug talks about the balanced market going on this Fall/Winter in Sacramento.  Price reductions are beginning to happen as sellers start to come back down to reality.  Days on the market are slowly starting to go up as well.  This balanced market should continue through the winter months and into spring.

Contact Doug Reynolds if you are a buyer or seller looking for a great Realtor in the Sacramento area.

clear skies,
Doug ReynoldsRealtor916-494-8441 

Friday, September 20, 2013

Do you need to appeal your 2013 Sacramento Property Taxes?

Appeal your property taxes Sacramento Real Estate Doug Reynolds www.sellwithdoug
Property tax bills will be mailed to homeowners in Sacramento County in October. And it is worthwhile for owners to scrutinize their bills.  The questions are: Is your property's assessment too high given the values of other homes in your neighborhood? If so, what do you do?

If you haven’t received your 2013-14 assessment bill yet, go straight to www.assessor.saccounty.net and choose parcel viewer.  By entering your street number, you can see the net assessed value listed below your address.
Your net assessed value should be a reflection of sales on or around Jan. 1, 2013, of homes similar to yours in your neighborhood.  If you don't think the net assessed value is comparable to sales of your type of home in your neighborhood, you can ask the county for an informal review of your assessment at no cost.
Visitwww.assessor.saccounty.net and print out the Request for Assessor Review form linked on that page, fill it out and fax it to the county.

The process for establishing residential valuations is not foolproof. The assessor uses "mass appraisal techniques" that account for home sizes and other attributes within neighborhoods.  When there are questions, the assessor can examine a specific property closely, zeroing in on a specific street or house or area.  The Assessor's Office does adjust valuations when the research shows a change is warranted.

"There's no way we have the manpower to look at hundreds of thousands of properties every single year," said Curt Caldwell, chief appraiser for Sacramento County. "We do our best. If there are questions about it, the property owner can go through the informal request for review. If there are still questions, they can go to the Assessment Appeals Board.

Taking that next step will require some homework. But it's fairly simple. Visit www.sccob.saccounty.net  and choose Assessment Appeals Board link to see all the forms and steps you'll need. The cost to file is $30.
The filing period for appeals closes at 5 p.m. Nov. 30 for the current tax year. Most people wait until November to file their claims. By then, the county assessor's office is swamped. So it's a good idea to get ahead of the pack.

Remember when you analyze your own neighborhood, you're looking for comparable sales in late 2012 or in the first three months of 2013. 

Contact me for assistance with providing Comparable Market Sales, I can help you out!

 clear skies,
Doug Reynolds

Wednesday, September 18, 2013

College Greens / Glenbrook Sales in August 2013 (Sacramento, Ca)

Real Estate Update
August 2013
Doug Reynolds Real Estate - College Greens Glenbrook College Greens East - www.CollegeGlenRealEstate.com - Sacramento, Ca
There were 22 homes sold in College Greens / Glenbrook / Larchmont / College Greens East for the month of August, 2013.  That is up from the 16 sold in July, 2013.  Here are the addresses and specific information.
 College Greens Glenbrook Real Estate sales August 2013 - www.CollegeGlenRealEstate.com -  Doug Reynolds Real Estate

Currently there are: 26 Active listings, 4 Active short sale listings, 5 Short Sales waiting for lender 

approval and 14 Pending Sales .

If you would like a FREE analysis of your homes current market value without any obligation, Call or email.  I’m here to help and love working with sellers and buyers in our neighborhood. Also, Check back each month for the updated statistics.

 Your College-Glen Real Estate Advisor
Living & Working in College-Glen

clear skies,
Doug Reynolds

Tuesday, September 17, 2013

Sacramento Real Estate Market update - September 2013

Real Estate Update

September 2013

 ó In August 2013, the median price increased to $254,000.  That is 37.4% higher than one year ago!
ó 25.4%  of the purchases in the month were ALL CASH.   That number is starting to quickly decrease.  Since prices have increased, a lot of investment properties are no longer making financial sense for many cash investors.  That is good news for the First Time Buyers that have been having a tough time competing with investors in the lower price ranges of $250,000 and below.
ó The available housing inventory is up to 1.3 months.  I expect to see that number slowly increase as the year goes on.  A “normal” or “balanced market” is between 4 to 5 months. 
ó The homes that are priced right, show well and have a high quality marketing plan are still receiving multiple offers but the   buying frenzy has died down a bit since interest rates jumped up at the beginning of June.
ó High Demand and Low Supply/Inventory has driven the market prices up in 2013.  I am starting to see signs that the market is slowly beginning to find a balance and seller’s current power may shift to be more equal this fall and winter.

clear skies,
Doug Reynolds

Tuesday, September 10, 2013

Did you Short sell your house or get foreclosed on recently? Good news...

Here's a good news article from the Boston Herald.  Basically if you have recently been foreclosed on or did a short sale, you will now be able to get a mortgage to buy another house much sooner.  As soon as one year!!

Sacramento Real Estate house money - Doug Reynolds Real Estate - www.SellWithDoug

For home short-sellers, finally comes some good news

Sunday, September 8, 2013 by:Kenneth R. Harney
WASHINGTON — Policy changes by two of the biggest mortgage market players could open doors to home buys this fall by thousands hard-hit by the housing bust and who thought they’d have to wait for years before owning again.

Fannie Mae, the federally controlled mortgage investor, has come up with a “fix” designed to help the many consumers whose short sales were misidentified as foreclosures by credit bureaus. Under previous rules, short-sellers would have to wait for up to seven years before becoming eligible for a new mortgage. Under the revised plan, they may be able to qualify for a mortgage in as little as two years. 
Homeowners who are foreclosed upon often must still wait for up to seven years before becoming eligible again to finance a house through Fannie. Industry estimates suggest that more than 2 million short-sellers might be affected by inaccurate descriptions of their transactions.

Meanwhile, the Federal Housing Administration (FHA) has announced a new program allowing borrowers whose previous mortgage troubles were caused by “extenuating circumstances” beyond their control to obtain new mortgages in as little as a year after losing their homes instead of the current three years. They will need to show that their delinquency problem was caused by a 
20 percent or greater drop in income that continued for at least six months, and that they are now back to work, paying bills on time and earning enough to qualify for a new FHA-insured mortgage.

Fannie’s policy change came after months of prodding by the federal Consumer Financial Protection Bureau, U.S. Sen. Bill Nelson (D-Fla), the National Consumer Reporting Association, the National Association of Realtors and Pam Marron, an outspoken Florida consumer advocate. They all sought fairer treatment of borrowers who had participated in short sales in recent years.

In a short sale, the lender approves the sale of a house to a new buyer but typically receives less than the balance owed. In a foreclosure, the bank takes title to the property and seeks to recover whatever it can through a resale. Though the two types of transactions are distinct and involve significantly different losses for banks, with foreclosures usually far more costly, credit bureaus have no special reporting code to ID short sales. As a result, say critics, millions of people who have undertaken short sales in recent years may have their transactions coded as foreclosures on their credit bureau reports.

That matters — a lot — because Fannie Mae and other major financing sources have mandated different waiting periods for new loans to borrowers who have completed short sales compared with borrowers who were foreclosed upon — in this case, two years versus seven. Under the new policy in effect Nov. 16, short-sellers who find that their transactions were miscoded on credit reports and are able to put 
20 percent down, should alert their loan officers and provide transaction documentation. The loan officer should advise Fannie about the coding error. Fannie will then run the loan application through its revised automated underwriting system.

Freddie Mac, the other government-administered mortgage investor, continues to require a four-year waiting period for short-sellers who cannot demonstrate “extenuating circumstances” as having caused their problems. If they can do so — documenting income reductions beyond their control that wrecked their credit — they may be able to qualify for a new Freddie Mac loan in two years.

FHA’s policy change may prove to be an even more generous deal for some previous homeowners. Like Freddie Mac, FHA wants to see hard evidence of what economic events beyond the borrowers’ control — loss of a job, serious illness or death of a wage earner, for example — led to the delinquency or loss of the house. Applicants must be able to show 12 months of solid credit behavior, participate in a housing counseling program and get through the agency’s underwriting hoops. But unlike either Fannie or Freddie, if you qualify under FHA’s revised rules, which are now in effect, and your lender approves, you might be able to buy a house with a new, low-down-payment mortgage in as little as a year.

clear skies,
Doug Reynolds

Monday, September 9, 2013

8.3 Million Underwater Homeowners on Track to Resurface Before 2015

Here's a recent arcticle from Rismedia talking about homeowners that are now gaining equity and no longer underwater due to the appreciation in home prices over the past year.  In Sacramento, we' have seen the median sales price rise from $160,000 in Jauary 2012 to $252,000 in July 2013.
Housing markets improving - Doug Reynolds Real Estate Sacramento Ca

 While 10.7 million residential homeowners nationwide owe at least 25 percent or more on their mortgages than their properties are worth, another 8.3 million homeowners are either slightly underwater or slightly above water, putting them on track to have enough equity to sell sometime in the next 15 months — without resorting to a short sale.

The 8.3 million include homeowners with a loan to value (LTV) ratio from 90 to 110 percent, meaning they have between 10 percent positive equity and 10 percent negative equity. These homeowners represented 18 percent of all U.S. homeowners with a mortgage as of the beginning of September.

The 10.7 million residential properties with an LTV ratio of at least 125 percent represented 23 percent of U.S. residential properties with a mortgage — down from 11.3 million deeply underwater properties representing 26 percent of all residential properties with a mortgage in May 2013 and down from 12.5 million deeply underwater properties representing 28 percent of all residential properties with a mortgage in September 2012.

“Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months,” says Daren Blomquist, vice president at RealtyTrac. “Homeowners who already have ample equity are quickly building on that equity, while the 8.3 million homeowners on the fence with little or no equity are on track to regain enough equity to sell before 2015 if home prices continue to increase at the rate of 1.33 percent per month that they have since bottoming out in March 2012.”

“In addition, nearly one in four homeowners in foreclosure has at least some equity, giving them a better chance to avoid foreclosure without resorting to a short sale — assuming they realize they have equity and don’t miss the opportunity to leverage that equity,” Blomquist added. “Even homeowners deeply underwater have reason for hope, with about 150,000 each month rising past the 25 percent negative equity milestone — although it will certainly take years rather than months before most of those homeowners have enough equity to sell other than via short sale.”

clear skies,
Doug Reynolds