Category Archives: investment

So, you want a Foreclosure…

Wednesday, 26 June 2013 08:58

Written by Lane Bailey

2 Comments

I have been getting a lot of calls lately asking about foreclosures.

English: (Photo credit: Wikipedia)

Almost word for word, “I’m thinking of buying a foreclosure… what do you have for me?”

My reply is generally along the lines of “where were you last year… or the year before… or the year before?”

A year ago I was saying that the market was poised to turn. And that when it DID turn, it would be fast. It would be REALLY fast. Here we are. There is little inventory. Prices have shot up. Foreclosures are few and far between… hardly the controlling factor they were not that long ago. Short sales are no longer prevalent, although there are some hanging around.

A couple of years ago, you could make an offer on a foreclosed property… below the asking price… and have it be THE offer they had to look at. You were betting against the table, but only the table. A bit over a year ago, that started to change. Multiple offers started happening on the cream of the foreclosure crop. No, you were betting against the table and several other players… but usually the list price could win the day. In fact, it would usually more than win the day. We were begging buyers to get back in the market.

Now, bidding full price on a freshly listed property isn’t even close to a guarantee. In fact, some fo the nicer ones can go for considerably over the list. And the list isn’t all that hot to begin with.

All is not lost… There are still deals in some pockets. But the pockets are moving and the deals are fleeting. Right now, if you want to find a reasonable deal, you have to be ready to look FAST. And you have to be ready to make an offer just as quickly. You better have your financing in order as well.

Of course, you can wait until things calm down… but that might mean that a similar house costs 10-20% more. Interest rates might not be as nice, either.

If you are ready to make a move, give me a call.

Phoning In Home Improvements…

Wednesday, 19 June 2013 11:57

Written by Lane Bailey

1 Comment

Interior design (Photo credit: Wikipedia)

I ran across an article recently with 5 apps for Android phones that can with your next DiY project… Here is the source article.

Houzz Interior Design Ideas

Looks kind of like a self-contained Pinterest for Home Improvement… They have almost 1,000,000 photos of various style home interior designs.

My Measures & Dimensions

Now this looks REALLY cool, especially for a free app. Shoot a “before” picture and then add measurements along with arrows and notes… It can really help get everything together to communicate a project’s goals to your vendor.

DIY Remodel Cost Calculator

This is my kind of calculator… first, it’s free and second, it can be used to get a good idea of the cost of a project.

There are a couple of others on the source article, but these are the ones I thought were the coolest. Also, below, there are a few links for other articles that might be of interest.

interior design oxford rogue designs (Photo credit: rogue-designs)

One thing to ALWAYS keep in mind, though, is that you shouldn’t undertake these improvements if the goal is resale value. It is VERY rare to find an improvement that actually adds to resale value. Some may actually hurt resale. The one exception to that would be painting… or replacing worn out things like carpeting.

And maintenance isn’t “improving”. Too many times people tell me that they replaced the roof and A/C when asked what improvements have been made. Unless they were dramatically upgraded during replacement, it likely wouldn’t qualify… although they can still add value (although, lack of proper maintenance really detracts from value more than proper maintenance add to it).

Foreclosure Wave Broken on the Shore?

Wednesday, 05 June 2013 16:19

Written by Lane Bailey

0 Comments

For years I have been hearing (and talking about it here) the “wave of foreclosures that are just around the corner”. For years the wave has been just around the corner, over the horizon and getting ready to hit. We did have a tsunami of foreclosures, and Gwinnett County has been one of the worst hit in Georgia, but the second wave has been a phantom…

Foreclosures fall behind retail sales in Gwinnett

And I am about ready to say that it will remain a phantom. That isn’t to say that there won’t be more, but I would like to lay to rest the idea that the banks have a pile of foreclosures that they are “about the release” or that “will hit the streets in the next few months”.

If there was a time, it would be NOW. There is little inventory, prices are starting to strengthen… the time would be ripe.

Instead… we see the first chart.

The green line represents wholesale (foreclosures, short sales, pre-foreclosure sales, etc.). It has dropped over the last few months… as retail (that would be regular sellers) have surged. One not to include here… the red line (new homes) only represents a portion of new home sales. Builders only report “inventory sales” to the MLS. And many of their sales are “pre-sales” (houses purchased before they are built). Some builders are selling 3 or 4 pre-sales for each inventory home. Expect that the red line might actually be 50% higher than it shows…

Prices rebounding in Gwinnett County, GA

To be sure, everything isn’t all wonderful… but it is a load better than a year ago. Right now, actual people that want (or need) to sell their homes have a shot.

The next issue that will start to right itself over the next couple of years regards the people that have been through this wave of foreclosures…

It takes most people 3 years to recover from a foreclosure, short sale, pre-foreclosure, deed-in-lieu or other mortgage shortfall. So, over the last three years, as Gwinnett County has been ravaged by foreclosures and similar issues, thousands of homeowners have been locked out of the market… instead, largely joining the ranks of renters.

That won’t last…

And as they come back into the home market, with the reduced inventories we’re seeing, expect to see continued price strength.

Like I said, it isn’t all wonderful, but we are looking at the beginnings of a Gwinnett recovery. If it follows the Forsyth recovery (they weren’t hit as hard) you can expect to see the market heat up quite a bit through the end of the year as the pent-up demand is released.

Mortgage Flowchart…

Wednesday, 29 May 2013 08:07

Written by Lane Bailey

2 Comments

“Do I Qualify for a Mortgage Loan?” – RealEstate.com Flowchart

So, You Want To Be a Real Estate Investor…

Monday, 13 May 2013 09:08

Written by Lane Bailey

0 Comments

I had a call recently from a “would-be” real estate investor. He wanted me to find a few properties for him to flip. He’s been looking at the Atlanta market for a few years (his words) and decided that now was the time to jump in and flip some properties.

Atlanta (Photo credit: Lima Pix)

Specifically, he was looking for entry level homes that he could pick up needing a little work, maybe in the $50-75k range, needing $10-15k worth of renovation. His goal was then to sell them for $100-$125k. East peasy.

Except, it isn’t…

In fact, right now that would be ANYTHING except easy peasy. It would be quite difficult. And here’s why…

A few Billion Dollars in “hedge fund money” floating around the Atlanta market
A market turn that while not “complete”, is far from unnoticed.
A limited inventory, especially on the entry level end.
Lack of easily available financing.

Billion Dollar Car (Photo credit: soul_motor)

This was a guy without a load of cash, unable to offer quicker closes than “the next guy”, and unable to out-spend the competition. He was not only convinced that there was a glut of homes, but that he was completely in the driver’s seat on these types of deals.

That is NOT the case. In fact, small investors are regularly SHOCKED at what the hedge funds are paying for houses right now. They are bidding them up on the open market. They are bidding them up on the Courthouse steps. They are willing to pay top dollar whenever and where ever they find them.

They don’t care what they can sell them for right now. They are looking at 5 year turns… with rental income in the mean time. The “over-payment” will be erased by the rental income and the increase in values over the next few years.

If you want to compete right now, THAT is what you have to compete with. A few years ago, you might have been able to pick up a cheap property and flip it… not so much any more.

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Category Archives: investment

So, you want a Foreclosure…