Robert Shiller says: recovery for housing is in process.
With the numbers of foreclosures, and notice of defaults shrinking in Orange County the real estate market is soaring.
Keep growing Orange County Real Estate Prices!
The
shortage of homes for sale and rising home sale prices are being driven by
three forces: 1. Banks and Wall Street Investors 2. Foreign buyers and 3.
Fearful owner occupants who wait to sell or can’t sell because they are
upside-down.
The
major banks and Wall Street good old boy firms, (many were subprime lenders
five years ago) now have reorganized themselves into real estate “investors.” These all-cash investors are buying distressed
property at the low end of the price scale, muscling out first-time homebuyers
and smaller mom-and-pop investors. Big investors, like Blackstone, Colony
and others, are snatching up low-priced housing units in bulk and renting them
out to people who can’t buy. By amassing thousands of rentals, the Wall Street
landlords are putting a crunch on housing supply, driving up prices and making
millions of dollars. Thank you stodgy bankers for hoarding all the homes under
$200000.
The
second influence is the increase of foreign nationals buying investment
properties in California, Arizona, Florida and Texas. Foreign investors driven
by a multitude of Ponzi seminars and gurus who wrote a book on “get rich quick
flipping properties in the United States” are buying cheaper housing units
sight unseen. I see more Canadian investors than in the past fifteen year
cycle. Right behind them are Chinese, Taiwanese, Australian, and Middle Eastern
buyers all eager to find properties on the internet and make all cash offers.
As
a mortgage lender I am getting several calls a day about our foreign investor
loan programs. The biggest problem with these buyers is they have been told
nonsense ideas to vest each property in separate LLC’s or entities. They often
have complex financials with one parent trust. Unfortunately, with layered
financials, their package appears often too complicated to actually show income
enough to close on a traditionally priced loan. Canadians don’t have to go
through all the fiery paperwork hoops that Americans do to get a home loan.
They send in about twenty percent of the information and begin to argue about
why so many items are required. The obvious solution is for foreign investors
to close with a low documentation loan. Foreign investors are not required to
go through the income tests that Americans must complete, but the cost is not
in the four percent range. These loans cost around eleven percent and have
larger upfront fees due to the high level of risk.
Unfortunately
for stability in the market: home sales
and prices are up, but home ownership is down because it’s investors —
not first-time homebuyers — who are buying
up the majority of homes. RealtyTracshows 3.5 percent of all home
purchases in the first quarter of 2013 were closed by “institutional
investors.” Institutional purchases are up 34 percent from a year ago.
Meanwhile,
the housing “scarcity” is a result of two factors: 1) borrowers who are “upsidedown”
-they can’t sell, but have hung on making payments out of pride or job reasons,
and 2) banks refusing to modify underwater mortgages. Since more than 25
percent of all borrowers — or 11.3 million homeowners— are underwater, these
homeowners can’t sell, can’t refinance and can’t get a loan modification.
Many
homeowners are waiting to sell because prices are rising in many markets. In
Laguna Beach the single family house under a million dollars is gone. A home on
Santa Ana that I looked at sixteen months ago listed for $ 850000. They did not
get an offer and took it off the market. This month they re-listed for $ 950000
and received multiple offers for larger than full price. No improvements where
done to the home.
Sitting
vacant are 14.2 million homes, this creates hardship, crime and a giant sink
hole in a community. Would you want to live next to the vacant house that
squatters are making a fire out of scraps to keep warm in Detroit?
Mortgage Blue Jay in my window, he is ready to soar.
(Curbside appeal of these two planters with waterfalls of flowers in Corona Del Mar)
Still
buyers are interested
in homeownership. We all dream big.
Orange County California has turned the corner with few
foreclosures and a trickle of notice of defaults. Most
notice of defaults are located inland Orange County. A number of these
properties are unimproved land. Here is a list of the locations that still are
upside-down often with two lenders and not listed for sale:
East hill, Coto De Caza
W Martha Lane, Santa Ana
San Antonio, Fountain Valley
N Genesse St, Orange
Mount Neota, Fountain Valley
Mohave Way,Rancho
Santa Margarita
Granada, Newport Beach
N Fairview, Santa Ana
Walker Lane, Fullerton
Cabrosa, Mission Viejo
Foxtail Drive, Yorba Linda
W Palmyra, Orange
E Altura, Orange
Avon Cir, Westminster
Durango River Circle, Fountain Valley
San Angelo, Westminster
Poindexter, Garden Grove
Kings Place, Newport Beach
E Avenida Cornelio, San Clemente
Hopping St, Fullerton
Laguna
Beach distressed or foreclosed homes on the market:
Mortgage Lending today feels like a mountain to climb.
Let me make it easy for you to close a home loan.
Here are a number of things Caroline Gerardo at W J Bradley Mortgage Capital can do that
makes me different than your bank or your mortgage broker.
Conventional
Jumbo and Super Jumbo Purchase and Refinance
Investor purchase and refinance quickly. Purchase and close in fifteen days.Refinance and close in thirty days.
5-10 Financed Properties for Investors
Cash out Refinance for Investors who bought REO foreclosures
and distressed properties in the past six months, no seasoning required to get
the appropriate ( loan to value per guidelines) cash back return on investment
when investor is holding property, even short term hold to flip
Quick response any time you need
Purchases close in 15 days – no bank slow boat to nowhere
Refinance close in 29 days
Credit repair referrals and free tips to raise FICO
Construction experience, eye for curbside appeal, analytical view of real estate investment.
I can do ConventionalFHA VA Jumbo and Super Jumbo, Hard Money, Purchase and Refinance
Foreclosure for Sale Flip
Buy foreclosures and distressed properties rehab and flip or repair and hold for the market to improve?
·5-10 Financed Properties for Investors
·Understand Mortgage Underwriting and keep in
contact with your lender. Having a lender that can do all kinds of loans, or
knows where to refer you to the right source is valuable. If your credit is weak,
I can give you tips to repair that or a referral to raise that FICO. Pricing on
Mortgage Interest rates are driven by
FICO
·Cash out Refinance for Investors who bought REO
foreclosures and distressed properties in the past six months, no seasoning
required to get the appropriate ( loan to value per guidelines) cash back
return on investment when investor is holding property, even short term hold to
flip
·Investors can get cash back by refinancing with
me in the first six months. In this market sometimes you have to close with
cash to get the deal.
·No bank overlays (extra requirements our
government has on each bank that sells loans to Fannie and Freddie) Understand
that Wells Fargo has different rules than J P Morgan Chase. Going to a bank is
a middle man, just as most mortgage
brokers are middle men. Go to a mortgage
banker who is direct.
·Purchases close in 15 days if you have your
paperwork all complete in advance of the offer– no bank slow boat to nowhere
·Make your offer in person with seven day
appraisal contingency
·Refinance close in 29 days
·Assume in any foreclosure you purchase it will
need a new water heater and HVAC. Be aware of local planning permit laws about
strapping water heaters and wiring for HVAC. Knowing the rules is important because
your plumber of installer may not. Don’t use a 24 hour water heater service
that charges more for the instant repair. Shop for water heater by size of
existing space and compare prices.
·Number one thing in purchasing investment property
is the location. You can’t change or fix location. Check for blue ribbon
schools in area, this is a great starting point for desirable location.
·If you are going to rehab and flip, assume
everything will cost 30% more than you think. Save the extra paint, parts, and supplies
as you will need these for repairs later and the next project. Have a general
theme of your design project: a favorite paint combination that matches with
your finishes. Keep design simple, so a variety of people can see themselves
loving the property. Be aware of curbside appeal to buyers. Pencil out your
costs, time line and keep to the schedule. You may have to actually go pick up
your laborers/ contractors to work your schedule. It is a great idea to network
with others and compile a list of a great: plumber, dry wall guy, painter, the
local wholesale landscape grower etc…
·If you are deciding to hold the property, aim
for a two year lease. It costs time and money to have vacancy. The types of finishes
you choose for leasing a property should be durable and simple.
The market in
California has seen gains of 7% - 10% of median price. Don’t fall in love with
one property and overbid. Keep shopping and making fair offers. I’ve seen
offers that state $100 over anyone else’s bid. This seems risky. My website: http://mywjb.com/caroline-gerardo/
Quick response any time you need call me and let’s brain
storm on how you can make more money as a smart real estate investor. Turn that house into a pot of gold. Photo shows an image of me taking this picture.