Hey, People.
If you've watched all of the reality shows on how to invest & fix up properties to "flip" we have some re-educating to do. The "flip" is dead (At least in San Diego) unless you buy the property at an auction for all cash (Someone will find that one in a million example to prove me wrong. That house that was bought for $100K, had it's light bulbs replaced and was flipped for $200K. On a whole, flips are dead).
Properties on the market are priced correctly (Again, somebody will find that lotto house that only needed the drive way swept before he flipped it for a quick $20K).. Do not think you can buy something, slap on some paint, throw in a Ficus tree and think you can sell it for a profit. The seller knows (At least his listing agent knows) how much to deduct for paint and other cosmetic fixes. Plus you have closing costs (On the buy and the sell), mortgage payments to make while you own it & realtor commissions (96+% of all houses sold are done through a Realtor. You don't have to use one but it will usually take you longer). It ain't 2004.
The good news? Since it's not '04 and since prices have come down mucho faster than rents, it's a great time to invest in rentals. I have a client who's in escrow on a duplex that she's paying $315,000 for. The rents come to $2550 a month, gross profit. Her mortgage payment, taxes & insurance will come to under $1750 a month. A potential of $800 a month in her pocket. That's just potential. To be safe, you should multiply your gross rent ($2550) by .8. That comes to $2040 net before mortgage, $300 a month of approx net.
That's about a 7.5% capitalization rate (Take the net rents, before mortgage, and divide it by the sales price. The higher the rate the better). Back before '06 you'd be lucky to get a 4 or 5% cap rate.
These are pretty conservative #s, you should do better on your investment.
Check out the old article I found by clicking on the title.
Call me with any questions on investments, 619-507-7449 or email me at jack@rowellrealestate.com
God Bless.
Sunday, March 28, 2010
Tuesday, March 23, 2010
KRAZEE
People.
If you own, rent, buy, sell, invest, look at, build on, tear down, or do something else revolving around real estate then you are a target for coo-coo people. Case in point.
I was putting a lockbox on a listing of mine in P.B. when someone asks me "can I help you?". Anytime I'm asked that I feel like just saying "no" and going on about my business. But, I decided not be rude and I introduced myself and told the guy I was the listing agent for this particular dwelling. I shook the guy's dead fish hand and listened to his story of how he was interested in renting the place from my seller (My seller had moved out of state) but he couldn't get a hold of her. He mentioned that my seller did not call him back a couple of times before he asked me for her phone #. "I'm sorry. I can't give it to you. If you want I can relay a message for you" was my uncomfortable reply. I gave him my card and prayed that he would not call.
Within an hour he called me. He started telling me of this great plan he had when I interrupted him and asked him to call me back in 20 minutes. I then tried to get a hold of my seller to ask her if this is a friend of hers so I would know how short with this guy I could be. He called me approx 10 times inside of an hour (Hell no I didn't answer) leaving me one message telling me that I really should answer the phone.
The next day I finally got in touch with my seller and told her of the evil plot going on and that I was against it. She told me that the guy gives her the creeps too (Thank goodness) and that she did NOT want to rent to him. Now I was armed.
I was just about to call my stalker when he called me. I let him state his case. He wanted to rent her place for $2000 a month and give me a $1000 (For que?). He told me "If you're smart (No one ever accused me of that), you'll take this deal. Places sell much faster and for more money when people are living there". I explained to him that wasn't true (In fact, the opposite is true) and that I told my client that it wouldn't help her to rent the place out while she was selling it. He told me I was wrong. I said I wasn't. "You are". "I'm not". This went back and forth until I gained my senses and told him "I understand your opinion but we are not going to rent to you. That is final".
There was an odd silence before he said "Well, you are wrong and I work for a news paper and I am going to write an article and tell the world what you are doing". I started laughing. "This article will shine an unfavorable light on you". I was laughing very loud now. I told him (Through my laughter) that we really couldn't rent to him now, due to his character issues. "Character issues? Would you like a letter from a Congressman to vouch for my character?". I could barley get it out when I said "I'll need a letter from a Congressman, a Priest, a Rabbi & a pharmacist". A full minute of me laughing went by before he said "I think you're wrong". I finally hung up, sat down and laughed my butt off.
I called my seller to tell her about the comedy I was just in. She said the guy told her he was with the FBI.
So, watch out. There are loonies out there that will entertain you.
Tell me your funny story in the comment or call me 619-507-7449.
God Bless.
If you own, rent, buy, sell, invest, look at, build on, tear down, or do something else revolving around real estate then you are a target for coo-coo people. Case in point.
I was putting a lockbox on a listing of mine in P.B. when someone asks me "can I help you?". Anytime I'm asked that I feel like just saying "no" and going on about my business. But, I decided not be rude and I introduced myself and told the guy I was the listing agent for this particular dwelling. I shook the guy's dead fish hand and listened to his story of how he was interested in renting the place from my seller (My seller had moved out of state) but he couldn't get a hold of her. He mentioned that my seller did not call him back a couple of times before he asked me for her phone #. "I'm sorry. I can't give it to you. If you want I can relay a message for you" was my uncomfortable reply. I gave him my card and prayed that he would not call.
Within an hour he called me. He started telling me of this great plan he had when I interrupted him and asked him to call me back in 20 minutes. I then tried to get a hold of my seller to ask her if this is a friend of hers so I would know how short with this guy I could be. He called me approx 10 times inside of an hour (Hell no I didn't answer) leaving me one message telling me that I really should answer the phone.
The next day I finally got in touch with my seller and told her of the evil plot going on and that I was against it. She told me that the guy gives her the creeps too (Thank goodness) and that she did NOT want to rent to him. Now I was armed.
I was just about to call my stalker when he called me. I let him state his case. He wanted to rent her place for $2000 a month and give me a $1000 (For que?). He told me "If you're smart (No one ever accused me of that), you'll take this deal. Places sell much faster and for more money when people are living there". I explained to him that wasn't true (In fact, the opposite is true) and that I told my client that it wouldn't help her to rent the place out while she was selling it. He told me I was wrong. I said I wasn't. "You are". "I'm not". This went back and forth until I gained my senses and told him "I understand your opinion but we are not going to rent to you. That is final".
There was an odd silence before he said "Well, you are wrong and I work for a news paper and I am going to write an article and tell the world what you are doing". I started laughing. "This article will shine an unfavorable light on you". I was laughing very loud now. I told him (Through my laughter) that we really couldn't rent to him now, due to his character issues. "Character issues? Would you like a letter from a Congressman to vouch for my character?". I could barley get it out when I said "I'll need a letter from a Congressman, a Priest, a Rabbi & a pharmacist". A full minute of me laughing went by before he said "I think you're wrong". I finally hung up, sat down and laughed my butt off.
I called my seller to tell her about the comedy I was just in. She said the guy told her he was with the FBI.
So, watch out. There are loonies out there that will entertain you.
Tell me your funny story in the comment or call me 619-507-7449.
God Bless.
Sunday, March 21, 2010
I Are Angry
Hello People.
Ever thought "Boy, if I had $400,000 (More or less) I would find a good house priced around......Oh... $430,000, and I would offer them $400,000 and watch their mouths water"? Sounds like a good plan, right? The seller would be nuts to not take your offer. No, appraisal. No loan hassle (There are tons of them). No brainer.
That's what my client and I thought too. After making that offer we we're countered at $425,000. We were also told if we did not close in 14 days (That was the amount of time we offered) the price would jump to $427,000. We countered their counter at $405,000, still feeling like the cash was good. They emailed back (Very coldly I might add) saying they had another offer that they were going to deal with.
I talked to my client and she wanted that home. I emailed the agent back and asked him if $415,000 would work. "That will not work" is what Mr. Sunshine emailed back. We sent him a counter that countered our counter that countered the seller's counter saying $420,000, all cash and any other terms and time lines the seller would like. They took the other offer.
I was (Am) so pissed. My client is heart broken. I am thinking bad thoughts towards the seller and listing agent. The moral of the story is real estate is nuts. No science involved, just people and very often those people are bananas.
Let me know what pisses you off.
God Bless.
Ever thought "Boy, if I had $400,000 (More or less) I would find a good house priced around......Oh... $430,000, and I would offer them $400,000 and watch their mouths water"? Sounds like a good plan, right? The seller would be nuts to not take your offer. No, appraisal. No loan hassle (There are tons of them). No brainer.
That's what my client and I thought too. After making that offer we we're countered at $425,000. We were also told if we did not close in 14 days (That was the amount of time we offered) the price would jump to $427,000. We countered their counter at $405,000, still feeling like the cash was good. They emailed back (Very coldly I might add) saying they had another offer that they were going to deal with.
I talked to my client and she wanted that home. I emailed the agent back and asked him if $415,000 would work. "That will not work" is what Mr. Sunshine emailed back. We sent him a counter that countered our counter that countered the seller's counter saying $420,000, all cash and any other terms and time lines the seller would like. They took the other offer.
I was (Am) so pissed. My client is heart broken. I am thinking bad thoughts towards the seller and listing agent. The moral of the story is real estate is nuts. No science involved, just people and very often those people are bananas.
Let me know what pisses you off.
God Bless.
Friday, March 19, 2010
They Hate Us
People. Hi.
CNN Money just came out with a list of the top 25 cities in the U.S. to have the best home price forecasts. San Diego did not (They hate us for being beautiful) make the list. Matter of fact, they said we were going to Depreciate. They said we were going to loose .3% (That's .oo3. I know you know math, just clarifying) and places like Kennewick & Yakima, Wa, Modesto, Ca (Have you been to Modesto?) and Anchorage, Ak are going to appreciate. The top 25 are projected to appreciate from 6% to 1.6% in 2010.
It breaks down like this: Washington had a whopping 8 cities in the top 25. State growth seems to be the reason (Or some sort of witch craft). Oregon and California came in 2nd with 4 cities. Let's just say California was 2 & Oregon was 3. Alaska, Wyoming & Montana all had 2. Colorado, New York & South Carolina all had a a big 1.
So, us San Diegans are projected to lose .3% of home value in 2010. On a $300,000 home that is $900. Probably not going down much more. If you're waiting on the bottom, you should be pretty darn close.
Click on the title to see the article that shows all of the cities that crushed us.
God Bless.
CNN Money just came out with a list of the top 25 cities in the U.S. to have the best home price forecasts. San Diego did not (They hate us for being beautiful) make the list. Matter of fact, they said we were going to Depreciate. They said we were going to loose .3% (That's .oo3. I know you know math, just clarifying) and places like Kennewick & Yakima, Wa, Modesto, Ca (Have you been to Modesto?) and Anchorage, Ak are going to appreciate. The top 25 are projected to appreciate from 6% to 1.6% in 2010.
It breaks down like this: Washington had a whopping 8 cities in the top 25. State growth seems to be the reason (Or some sort of witch craft). Oregon and California came in 2nd with 4 cities. Let's just say California was 2 & Oregon was 3. Alaska, Wyoming & Montana all had 2. Colorado, New York & South Carolina all had a a big 1.
So, us San Diegans are projected to lose .3% of home value in 2010. On a $300,000 home that is $900. Probably not going down much more. If you're waiting on the bottom, you should be pretty darn close.
Click on the title to see the article that shows all of the cities that crushed us.
God Bless.
Thursday, March 18, 2010
Stupider And Stupider
Hi People.
Here's a story of how dumb the banks are.
Back in '08 I was doing a short sale for a friend who fell on hard times (He's doing much better now, thanks for asking). After months of being on the market we finally got an offer for $975,000 (we were on the market for $1.1M). A little low, but not bad.
We (When I say "we" I mean Brian Calvin who does all of my negotiating with banks on short sales. He has the right kind of temperament for it. I get my feelings hurt way too much when people are too stupid to listen to reason) negotiate back and forth with the banks (There was 2 loans) until we had an agreement with the 1st loan for $980,000 and they give the 2nd loan $3000. The 2nd loan said "jump in a lake, we want $30,000". The 1st loan told them to "go to that same lake and take a long walk on a short pier" (Walking into a lake and jumping into a lake will get the same result) you're only getting $3000.
So, we (You know who I'm talking about) go back and forth with the banks and they both will not budge. That kills the deal. No short sale. The property gets foreclosed on 10/09, about a year after the deal would have been done. The kicker?
Both the 1st and 2nd loans were with National City Mortgage, different departments but the same bank. The real kicker?
The house just went back on the market for $787,500. They lost nearly $200,000 because they could not play nice with themselves. Is it any wonder the banks are in the kind of shape they are in?
Let me know how stupid I am.
God Bless.
Here's a story of how dumb the banks are.
Back in '08 I was doing a short sale for a friend who fell on hard times (He's doing much better now, thanks for asking). After months of being on the market we finally got an offer for $975,000 (we were on the market for $1.1M). A little low, but not bad.
We (When I say "we" I mean Brian Calvin who does all of my negotiating with banks on short sales. He has the right kind of temperament for it. I get my feelings hurt way too much when people are too stupid to listen to reason) negotiate back and forth with the banks (There was 2 loans) until we had an agreement with the 1st loan for $980,000 and they give the 2nd loan $3000. The 2nd loan said "jump in a lake, we want $30,000". The 1st loan told them to "go to that same lake and take a long walk on a short pier" (Walking into a lake and jumping into a lake will get the same result) you're only getting $3000.
So, we (You know who I'm talking about) go back and forth with the banks and they both will not budge. That kills the deal. No short sale. The property gets foreclosed on 10/09, about a year after the deal would have been done. The kicker?
Both the 1st and 2nd loans were with National City Mortgage, different departments but the same bank. The real kicker?
The house just went back on the market for $787,500. They lost nearly $200,000 because they could not play nice with themselves. Is it any wonder the banks are in the kind of shape they are in?
Let me know how stupid I am.
God Bless.
Wednesday, March 17, 2010
Psych!!!
What's up, People?
There's a cruel trick going around. It's kind of like going to the zoo and holding a banana just out of reach of the ape cage. Like taking a kid to the Disneyland parking lot and then going home before entering said amusement park. It is just as mean as a Baskin Robbins commercial on t.v. telling me the most delicious ice cream ever is now free and my wife telling me I can not have any because of some lie my doctor said about me having high cholesterol (I hate my doctor).
This trick going around is perpetrated by Realtors all over the greater San Diego area (Maybe the whole country). Here's how it's laid out. The Realtor takes a listing and puts it on the market under market value. Have you ever heard of anything so horrible? You have heard of things that horrible? You've heard of much worse things? Well, I agree that it's not as bad as my ice cream story. Here's why it does suck.
When a listing comes on the market under value it gives buyers false hope that they could actually end up with the house. Well, why couldn't they? The house is priced in the buyer's price range, right? Yes (Is me talking to myself confusing?), but it will get bid up to actual market price or, if there is enough of a shark frenzy, it could get bid over asking price. It should be easy to spot, right?
Yes, it is easy to spot. The unfortunate thing is you have to pursue it anyway, just in case. Just like that 16 year old kid who has to ask the super model out when he comes in contact with her. You can not let those types of opportunities go by without at least trying.
So, to all of my home buyers (And all of the buyers across the land), keep asking that super model out, no matter how much it hurts. You'll get lucky one day.
Let me know your super model story.
God Bless.
There's a cruel trick going around. It's kind of like going to the zoo and holding a banana just out of reach of the ape cage. Like taking a kid to the Disneyland parking lot and then going home before entering said amusement park. It is just as mean as a Baskin Robbins commercial on t.v. telling me the most delicious ice cream ever is now free and my wife telling me I can not have any because of some lie my doctor said about me having high cholesterol (I hate my doctor).
This trick going around is perpetrated by Realtors all over the greater San Diego area (Maybe the whole country). Here's how it's laid out. The Realtor takes a listing and puts it on the market under market value. Have you ever heard of anything so horrible? You have heard of things that horrible? You've heard of much worse things? Well, I agree that it's not as bad as my ice cream story. Here's why it does suck.
When a listing comes on the market under value it gives buyers false hope that they could actually end up with the house. Well, why couldn't they? The house is priced in the buyer's price range, right? Yes (Is me talking to myself confusing?), but it will get bid up to actual market price or, if there is enough of a shark frenzy, it could get bid over asking price. It should be easy to spot, right?
Yes, it is easy to spot. The unfortunate thing is you have to pursue it anyway, just in case. Just like that 16 year old kid who has to ask the super model out when he comes in contact with her. You can not let those types of opportunities go by without at least trying.
So, to all of my home buyers (And all of the buyers across the land), keep asking that super model out, no matter how much it hurts. You'll get lucky one day.
Let me know your super model story.
God Bless.
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