Archives (page 10 of 17)

May 2, 2009

Are you looking for a flinty-eyed steward to protect the value of real estate? Whatever you do, don’t turn to a banker!

by Greg Swann

Sun City Real Estate Broker

This from my Arizona Republic real estate column (permanent link):

If there’s one thing we can say we’ve learned from the housing bust, it’s this: The worst conceivable stewards of financial assets are bankers.

At every step of the real estate market’s retrenchment, the bankers have been right there, on the spot, ready to make precisely the wrong decision — days, weeks or even months late.

Can’t make your payments? Put the home up for sale. Will the bank honor an offer short of the amount owed? Maybe. Maybe in six weeks, maybe in six months. Will the buyer still be there when the bank finally responds? With prices declining by thousands of dollars a month?

So the bank has to foreclose on the home — at an imputed value far lower than it could have had from the short sale. And then it must list that home for sale at a still lower price.

But don’t waste your time looking for evidence of prudence or even simple greed in a lender-owned listing. The home will be filthy, with fixtures and smoke alarms missing. The kitchen range will have been stolen, thus to assure that the home is not accidentally sold to an FHA or VA buyer.

If the bank inadvertently approves a purchase contract for the home, it will do everything it can to avoid recouping even a tiny fraction of its losses. First the bank will attempt to savage the deal by completely rewriting the contract. And everyone involved in the process will be insanely overworked, so that even the simplest question will occasion a two- to five-day delay.

Absolutely nothing will be done to address even deal-killing defects. But because the decision chain is so convoluted, negotiations over problems will drag on for weeks or even months. That way, when the deal falls apart, as many do, the bank will be able to relist the house at an even lower price.

I wish I were making this up. I want to deride bankers as being clowns, but that’s unfair to the clowns. They produce wealth, rather than destroying it — and they dress better for work, too.

April 25, 2009

Is there a housing boom going on in the Phoenix real estate market? Or is this really just a Fool’s Gold Rush?

by Greg Swann

Sun City Real Estate Broker

This from my Arizona Republic real estate column (permanent link):

Do you feel an insatiable urge to rush right out and buy a house?

There’s a reason for that: You’re being conned into thinking there is a shortage of available housing, when the exact opposite is actually the case.

Maybe conned is too strong a word. Are you begin misled? Are experts and pundits themselves misled? Are we all of us suffering under a mass delusion, an amplified species of wishful thinking?

Here’s what’s really going on: Last fall FannieMae and FreddieMac, along with some of the bigger private mortgage banks, declared a moratorium on new foreclosures.

So for four months, homes that would have been foreclosed on sat on the sidelines of the real estate market.

And for those same four months, inventories of already-foreclosed homes declined. In March of 2009, for example, a total of 7,621 listed homes were sold in the Phoenix area, of which 5,066 — two thirds! — were lender-owned homes.

That sounds good doesn’t it? Even better, as I write this, only 7,607 lender-owned homes are listed as being Active in the MLS database. That’s just a month-and-a-half’s supply. Happy days are here again!

Not quite. That Fannie/Freddie moratorium on new foreclosures ended on April 1st. In the first three weeks of April, there were 2,460 new lender-owned listings. And there are still two years of foreclosures in the pipeline.

What we’re seeing is a Fool’s Gold Rush. The perceived shortage of housing is an illusion, an artifact of a normal number of buyers competing for an inventory that seems to be declining rapidly. It isn’t. Instead, even now the inventory of lender-owned homes is surging.

If you need to move, you need to move, and interest rates are amazingly low. If you want to bite the bullet and move up, now might be a good time.

But even if we see a month or two of stable or even rising prices, there is an echo-bust in our future as buyers catch on to the artificial nature of our illusory housing shortage.

April 22, 2009

Why won’t I take real estate investors to buy super-cheap rental homes in Queen Creek, Maricopa or Buckeye? Because residences without residents have no value…

by Greg Swann

Sun City Real Estate Broker

Here are three hard-boiled facts of life for real estate investors in Metropolitan Phoenix:

1. Despite the ridiculous hoopla in the newspapers, there is no shortage of foreclosed homes. FannieMae and FreddieMac imposed a four-month moratorium on new foreclosures, which resulted in the false perception of a shortage. The moratorium ended on April 1, and inventories are surging.

2. Hence, there is no sane reason for an investor to get mixed up in a bidding war for a particular property. If you can’t buy what you want right now, you’ll be able to get something better for less money a month from now. You don’t need to — and shouldn’t — buy the cheapest rental property out there, but there is no need to overpay for anything right now.

3. There is no viable tenant base in Queen Creek, Maricopa or Buckeye. Investors fixate on those towns because the homes are so cheap. They’re cheap for three reasons: They’re half vacant, they’re more than half lender-owned and — most importantly — there are no jobs to speak of in those towns. No jobs means no reason for tenants to live there, which means no rents for landlords.

Those three towns — Queen Creek, Maricopa and Buckeye — are the poster children of the real estate bust. Out-of-state investors got suckered into buying rental homes there in 2004 and 2005, which homes comprised much of the first wave of foreclosures in the Valley. Now a second wave of suckers are snapping up super-cheap homes in those remote locales, even though there must already be at least a dozen vacant rental homes for every marginally-qualified tenant.

Here’s the hard, cold truth, and it’s a lesson every landlord has to learn: Residences without residents have no value. The price you pay on the way in matters, yes. The price you collect on the way out matters, too. But what matters most is whether your rental home covers its own costs — ideally throwing off positive cash flow — while you own it.

Emphasize that: It doesn’t matter how cheaply you bought it, and it doesn’t matter what the theoretical Gross Rent Multiplier might be — if the home sits vacant for months on end.

So who is at fault when a Realtor helps an out-of-state investor buy the wrong rental property in the wrong town? Is it the Realtor, who should have put his foot down? Or is it the investor, who insisted upon buying the cheapest possible property, even though the cheapest homes have no commercial value right now?

My answer is that I don’t care. I don’t work with investors who can’t figure out which side of the bread has the butter on it. I sell rental homes in towns with a strong jobs base, abundant retail and entertainment, decent, nearby schools and adequate transportation services. In other words, I work in towns — and in specific neighborhoods — where tenants actually want to live, where rental homes stay rented, and where they sell for premium prices to owner-occupants on the way out.

Here’s the kick in the teeth: Even in these premium neighborhoods, lender-owned houses are still amazingly cheap. The homes I sell are cash-flow positive from the first tenant, and acquiring that first tenant is normally quick and painless.

Owning rental housing is a business — and not an easy business. The objective is to make money. If you want to find out more about how to make money on buying lender-owned homes and converting them to rental properties, assert yourself.

April 19, 2009

A good Realtor may be the key to preserving your parents’ legacy when they pass away

by Greg Swann

Sun City Real Estate Broker

This from my Arizona Republic real estate column (permanent link):

Here’s a horrifying thought. It’s late at night and you’re at home in bed in Manhattan or Manhattan Beach when you get an emergency phone call from Thunderbird Hospital. Your widowed mother has passed away unexpectedly.

And now you must take on the burdens of the grieving. In addition to making the funeral arrangements, you have inherited your parents’ estate. You’ll need to talk to their estate planner, and possibly also to their accountant. But the financial professional who could have the greatest impact — positive or negative — on the legacy your parents have left is the one with whom they very probably forgot to forge a relationship.

That would be a Realtor, of course. For many retired people, the most valuable investment they have will be their home. Many will own the home free and clear, a six-figure asset. But how the heirs manage the sale of their parents’ home can make a huge difference in how much the property sells for.

Here’s one way of looking at things: Your folks have died, may they rest in peace, and everything they left behind is free money. Sell it cheap, sell it fast and move on.

But your parents worked hard all their lives, in part to leave you a significant legacy, and with just a little bit of planning and husbandry, you can realize thousands more on the sale of their property — perhaps to pass along to their grandchildren.

You’ll need to have an estate sale, first. Cluttered houses sell slowly and for less money. Then you’ll probably have to arrange for repairs, painting and cleaning. You can sell the home as-is, but then you’re competing with all the low-priced foreclosed homes out there.

What you’ll need more than anything is a Realtor who is accustomed to handling estates in your absence. To sell for top-dollar, the home will need a thoroughgoing marketing effort — staging and decorating, open houses, internet promotion.

Your parents are gone and nothing will bring them back. But a little bit of forethought will go a long way toward preserving their legacy.

April 16, 2009

USA Today: “Foreclosures 46% higher in March than a year ago”

by Greg Swann

Sun City Real Estate Broker

The other shoe drops:

The number of homeowners facing foreclosure surged in March as lenders lifted temporary moratoriums and resumed legal actions against delinquent mortgage payers.

Foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 341,180 properties in March, 46% more than a year ago and 17% above February’s total, RealtyTrac reports today.

One in 159 U.S. housing units received at least one foreclosure notice in the first quarter, for a total of 803,459, according to RealtyTrac, which lists foreclosed properties around the country.

The sharp increase in foreclosures comes as the Obama administration is launching an effort to help as many as 9 million borrowers avoid foreclosure by modifying their loans or refinancing mortgages. Many lenders put a temporary freeze on foreclosures late last year while the administration prepared its program.

Much of March’s activity was in new foreclosure actions — bank repossessions fell 3% from February. With most of the moratoriums now lifted, bank repossessions are likely to start rising again.

This is not the end of the world, but reports of the real estate market’s immediate resurrection may have been exaggerated.

Put another way: This does not mean the Phoenix real estate market is not going to find a bottom, but it does seem to imply that, once it does, it’s going to stay there for a while.

Buying a residence with plans to stay put for five years? It’s hard to argue with today’s interest rates.

Buying a rental home for cash-flow now, putting off any hopes for appreciation for the next few years? You’re probably okay.

Buying to fix and flip? Guard your upside and get it sold fast.

Buying to fix and hold, either as a residence or a rental? This may be the best bet of all right now.

Selling a home? Don’t play games. Price it to the market and get it sold. If your home is not showing, the price is too high. If it’s showing but not selling, unearth the deal-killing defect and correct it. Every month you waste is costing you money.

We have two years, at least, of bad loans still to work through. If demand rises to meet the inflow of foreclosure inventory, prices will rise despite everything. But don’t hold your breath on that outcome. Long-term risk is probably pretty safe. Short-term risk is foolhardy, for now.

April 12, 2009

Taking the pulse of the Phoenix real estate market: Boom? Bust? Both?

by Greg Swann

Sun City Real Estate Broker

This from my Arizona Republic real estate column (permanent link):

I was in a new-home sales office last weekend, and the sales rep was raving about how the real estate market has turned. It was hard to argue with her. That subdivision had a lot of traffic, and, besides, the newspapers have carried story after story bearing good real estate news. And who wants to rain on the parade?

There is good news out there, after all. We track bread-and-butter tract homes month-by-month, and, in some respects, March was a great month. Volume of sales was up 62% over February, for example, and this past month was the best March since 2005.

But both August and September of 2008 were better months. Still worse news, sales prices were down another 5.2% for the month. That’s 35.22% year-over-year and 54.13% from the peak in December 2005.

So, yes, people are buying homes. And, yes, for now inventories are declining. But FannieMae and FreddieMac had declared a moratorium on new foreclosures late last year. This was quietly ended on April Fool’s Day. There are 10,000 new foreclosures happening right now, half of which will hit the market as lender-owned homes in the next 60-90 days.

So what? Boom? Bust? Both?

If purchases exceed new listings, prices should stabilize or even go up. But if that’s a temporary phenomenon — a temporary “shortage” of newly-foreclosed homes — we could see an echo-bust: Stability for now followed by more price declines later.

And heads matter more than beds. If investors buy homes for which they can’t find tenants, this will depress prices, too.

On the other hand, interest rates are at unprecedented lows. Is it possible that you could save more by paying a higher purchase price now, at a lower interest rate? Or are you better off waiting for better prices, even if you end up paying a higher interest rate?

Here’s an easier question to answer: Is it time to put the champagne on ice, thus to celebrate the bottom of the real estate market? Possibly. Just don’t pop the cork yet.

April 4, 2009

The five bad habits of highly ineffective real estate investors

by Greg Swann

Sun City Real Estate Broker

This from my Arizona Republic real estate column (permanent link):

I’m working with a lot of investors right now, which is fun for me. There are a great many challenged houses in the Valley, and it’s the investors, for the most part, who are digging in and restoring value to those homes.

There is another class of investors I don’t work with at all, and I’d like to highlight some of their bad habits, in the hope of convincing you to adopt better practices.

The number one bad habit of unsuccessful real estate investors is buying homes where there are no tenants. Yes, the houses are cheap in Buckeye, but that’s because there are no jobs in Buckeye. In ten years, the Valley’s western outpost will be a thriving rental community. Not now.

The number two bad habit? Buying way too much house. This 1,400 square foot house is selling for $75 a square foot. But we can get this 2,600 square foot house for only $30 a square foot! Even though the price seems very low, the house is too big for tenants, and too costly to maintain and keep cool.

Bad habit number three is buying the worst property available. No one wants to be treated like a second-class citizen. Bad homes send premium tenants to better homes.

The number four bad habit is over-charging for rent. If the market rent for a turn-key unit is $1,000, a bad landlord will offer his home dirty and unpainted — and then charge $1,100 a month. If he delivered the best-quality home at $950 a month, he would have the pick of the premium tenants. Instead, he’ll end up settling for the tenants no one else wants.

And that leads us to the fifth and most costly bad habit: Our investor chose the worst available model of a too-big house in a town without a tenant pool. The house is dirty and grungy, and he’s charging too much for it. Therefore, he will have no choice but to rent to tenants with bad credit, bad work records and bad real estate references.

Making money in the metropolitan Phoenix residential rental market is easier than it’s been in years. But losing money is easy, too, if you make the right mistakes.

April 2, 2009

Timing the bottom of the market? For home-buyers, the trade-off may be a lower interest rate now versus a lower purchase price later

by Greg Swann

Sun City Real Estate Broker

I won’t be able to rely on the numbers for another few days, but March will turn out to have been a very busy month. Volume of sales will be up substantially over February, and April promises to be even stronger.

The bad news? Prices were down again in March, and I’ll bet April will also be a down month.

The good news? Mortgage interest rates are at historic lows.

The worse news? The foreclosure pipeline is still very full, and 10,000 more homes are being lined up at the entry point.

And that’s the trade-off confronting owner-occupant home-buyers. We’re looking at two more years of foreclosures, which argues that prices will continue to decline, at least for a while. But it’s hard to imagine interest rates going much lower — or staying this low.

About half of those newly-foreclosed properties will end up as lender-owned resale homes, hitting the market in 60-90 days. FannieMae and FreddieMac had a moratorium on foreclosures in the fourth quarter of 2008, so some of these new foreclosures will reflect that delay. Even so, there are plenty of other troubled mortgages still to hit the pipeline.

I see two issues that matter:

Will new foreclosures come onto the market more quickly or more slowly than they are coming off? Right now, overall inventories are declining, which argues that sometime soon prices will stabilize or even increase.
But do we have enough heads for the bedrooms? We’re overbuilt, and if we don’t have enough people to put into these homes, we could see an echo bust as inventory newly absorbed by investors sits vacant.

We know in the long run we will recover, but we don’t know where the long run is. The question for owner-occupant buyers is the one addressed above: Will you save more by paying a higher purchase price now, at a lower interest rate? Or are you better off waiting for better prices, even if you end up paying a higher interest rate?

Is it possible that the home of your dreams could be selling for $10,000 less three months from now? Yes. Is it also possible that, three months from now, interest rates will be high enough that you won’t be able to qualify for that home, even at the lower price? Sadly, yes.

These are all questions for a lender, so let me know if you want me to put you in touch with one.

March 28, 2009

If you live where it snows and where rust is common, it might be time to think about moving to metropolitan Phoenix

by Greg Swann

Sun City Real Estate Broker

This from my Arizona Republic real estate column (permanent link):

This is a note to the folks back home — in my case, the rust belt of Illinois. If, like many adults in metropolitan Phoenix, you come from someplace else, you might print this out and mail it to the people who stayed behind.

The topic: It might be time to pack up and move to Arizona.

Everybody wants to root for the home team, but there are cities that will grow out of our current economic mess and others that will not.

If you make your home in a region that thrived in the days of mass production, it’s likely that the sun has set on your local economy.

In cities like Detroit and Cleveland and Philadelphia, thousands of homes stand empty as people move away faster than they are replaced. Aging factories close one by one, and the high-paying jobs they once offered are not being replaced.

This is baked in the cake three different ways: Local laws make new-business formation difficult and costly. The climate often makes life unpleasant and more expensive. And the long-term movement of the nation’s population is south and west, away from loud, smoky cities and toward clean, quiet — and sunny — suburbs.

By contrast, Phoenix is growing — even now. Last year was another boom year for population growth, and our unemployment rate is remarkably low, considering what’s going on in the rest of the country. Our houses are cheap, our rents are affordable — and our horizons are unlimited.

There’s no way to put a price on psychological costs and benefits, but seeing the sun set every day — with a uniquely different majestical beauty every day — will effect a priceless change in your attitude about life.

If you live someplace where it snows and where rust is common — and not just as a decadent architectural ornament — it’s time to think about moving.

Even if you have to let your house go — and if your local population is declining, you’ll never get back what you paid for it — your future prospects — and your future mental health! — are probably better in greater Phoenix.

March 25, 2009

Phoenix real estate bargain of the day: “I’m looking for a decent home in the Phoenix area that I can buy as a rental for now, but then use later as a getaway home — or maybe even retire to.”

by Greg Swann

Sun City Real Estate Broker

I hear the request in the headline about twice a month. It’s a doable proposition, and it all really depends on price. Spend enough and you can have golf. Spend more and you can have gated golf. Spend way too much and you can have gated golf on the side of a mountain.

This house, in Ryland at Heritage Point in Tolleson, is the bargain-priced expression of that ideal. No gates, no golf, no mountains, but a nice-sized three-bedroom home with a pool in a near-in suburb of Phoenix.

For the record, I don’t love pools for rental homes. If you’re going to have one, then you simply must carry a liability rider while you’re housing tenants.

Beyond that, this house has a lot going for it. Bedroom number two has a closet, but it doubles as a den, a very practical configuration. The landscaping needs attention, but it was decent to begin with, so it should come back fairly easily. The pool was built by Paddock Pools, a reputable company.

We need appliances, along with flooring and paint, but the home is in pretty good shape overall.

The home is listed at $87,900, which is pretty aggressive. I might start at $80,000 and see who salutes. With $5,000 to whip it into shape, it could be rent-ready (or move-in-ready) for $85,000. It should be able to command $950 a month in rent, maybe even $1,000, very comfortably cash-flow positive.

And then, someday, you can lay on your back on your air mattress in your own backyard pool, watching the silent progress of the jets taking flight from Skyharbor Airport. There’s a beer or a margarita somewhere in this scene, but you’ll have to paddle over to the cool-deck to find it.

In the mean time, email me or phone me at 602-740-7531 and let’s go take a closer look at this property…

March 25, 2009

If the Phoenix-area economy is too dependent on housing for jobs, why is our unemployment rate so much lower than other big cities?

by Greg Swann

Sun City Real Estate Broker

Robert Robb in today’s Arizona Republic:

So, Arizona’s housing sector has suffered a sharper decline than probably anyplace else in the country. If the rest of Arizona’s economy is dependent on housing, then why does Arizona have a lower unemployment rate than the rest of the country?

January is the most recent month for which comparative figures are available from the Bureau of Labor Statistics. During January, the country had an unemployment rate of 7.6 percent. Arizona’s rate was 7 percent.

The paradox is even starker when looking at major metro areas. The Phoenix area’s unemployment rate was 6.7 percent. Only one metro area in the Case-Shiller group had a lower unemployment rate, Washington D.C., which has an economy clearly driven by government. The average unemployment rate for the 20 major metro areas was 8.4 percent.

According to BLS, of the 49 metro areas in the country with a population in excess of 1 million, Phoenix had the seventh-lowest unemployment rate.

Phoenix has done much better than many metro areas alleged to be our economic betters. San Diego, the proclaimed bioscience leader, had an unemployment rate of 8.6 percent. Charlotte, N.C., which supposedly does right in education what Arizona does wrong, was at 10.5 percent. Portland, Ore., the antithesis of an economy driven by housing, was at 9.8 percent. Seattle, which has the big companies we supposedly can’t attract, was at 7.5 percent.

So, most large metro areas have unemployment rates substantially above the national average while Phoenix, whose housing sector has been hit the hardest, has an unemployment rate substantially below the national average.

All this unveils what should have been obvious all along. Housing does not create its own demand. Something else has to draw people to an area, which in turn creates the demand for housing.

Arizona has a fundamentally solid underlying economy that benefits from, but is not dependent on, housing. And it has a frothy real-estate sector that depends on growth generated primarily by other factors.

The real-estate sector is oversized. But that is inevitable in a place that is growing faster than other places. That’s not the same as the rest of the economy being dependent on housing.

My take: There are cities that will grow out of this mess and others that will not. If you live someplace where it snows and where rust is common — not just a decadent architectural ornament — it’s time to think about moving. Even if you have to let your house go — and if your local population is declining, you’ll never get back what you paid for it — your future prospects — and your future mental health! — are probably better in Metropolitan Phoenix.

March 24, 2009

Real estate bargain of the day: The Lavendar floorplan at Coldwater Springs could be yours for $90,000…

by Greg Swann

Sun City Real Estate Broker

I’ll make it back to Coldwater Springs sometime soon, but, for now, this house is making me crazy. I’ve been following it for six months, and, despite a very sweet pricing history, it just won’t move.

What’s this property’s Achilles’ Heel? It’s missing its dishwasher, and I think the lack of a $600 item is sending buyers elsewhere.

If you can make a mental leap, you’re in for a nice bargain. The home faces south, and you’re just steps away from the Coldwater Springs Golf Course. There’s ample shopping nearby, and the public school is right in the middle of the subdivision. Kids can walk or ride their bikes to school without ever crossing a busy street.

As a starting bid, I like this home at $85,000. It has competition at $88,5000, but the recent low sale in the Lavendar floorplan was $105,000. The all time high for a Lavendar without a pool was $267,107.

You’re looking at around $5,000 after closing to whip it into shape — dishwasher, range, refrigerator, carpet, paint, landscaping and touch-ups.

How will it rent? It should go for $950 a month, comfortably, throwing off around $7,200 a year in before-tax cash-flow.

This is a smokin’ deal in an Avondale neighborhood that should be a pace-setter, once the real estate market starts to recover.

If you want to give it a closer look, email me or phone me at 602-740-7531.

Not home yet? Not to worry. We’ll talk about another great deal tomorrow.

March 23, 2009

Phoenix real estate bargain of the day: Sweet suburban homes with a community pool. Schools, shopping and jobs nearby, with easy access to Phoenix and the West Valley — all for $60,000 — or less…

by Greg Swann

Sun City Real Estate Broker

These houses are making me crazy. The Phoenix real estate market is awash in incredible bargains. I’m going to start writing about them until they’re sold.

Here’s the way it is: Decent-quality homes are for sale for fire-sale prices. Interest rates are at all time lows. Whether you’re buying a home for your family or a rental home — perhaps to produce income now and serve as a retirement home later — opportunities abound.

Today’s bargain is actually four bargains, four homes in the same floor plan in the Ryland at Heritage Point subdivision in Tolleson, Arizona.

If you follow that link, you’ll find photos on eleven houses, but today we’re just going to talk about the four that are selling for the lowest prices.

The photos I’m showing you are “warts and all” pictures. These are lender-owned homes, and all of them will need some work before they are move-in- or rent-ready. But, as you’ll see, most of them won’t need much work, and we can help arrange for contractors and handymen to get these minor jobs done — quickly and economically.

So let’s take a look at our four houses. Tolleson is a near-in suburb of Phoenix, and Ryland at Heritage Point is the jewel in its crown. There is a community pool and ample green belts, some with playgrounds. There is great shopping nearby, and freeway access could not be easier. You’re in the heart of the West Valley warehouse zone, so there are lots of good-paying jobs in the immediate area. In short, this is a nice place to live and a profitable place to own rental homes.

8330 West Hughes Drive Tolleson AZ 85353

This house is in decent shape overall. Alas, the air conditioner compressor will probably need to be replaced. The most recent sale in these units is $55,000, so $50,000 would be a fair offer on this home. You should figure your net entry cost at around $60,000, although it could be less.

2612 South 84th Glen Tolleson AZ 85353

This house is better than it looks right now. The lister promises to do something about the front-yard landscaping, and the rest of the house is not in awful shape. The carpet needs to go, and the house faces east — which means the back of the house will get very hot on summer afternoons. I like it at $52,000 to start.

2620 South 84th Glen Tolleson AZ 85353

Not awful, but it faces east, and there is a lot of bad decorating to be undone. I like it at $50,000 as a starting offer.

8433 West Preston Lane Tolleson AZ 85353

I see this one as a reject, but you might see it as a challenge — and a bargain. The kitchen has been gutted, down to the walls and plumbing. The water heater is gone and the AC compressor is damaged. It’s going to take $15,000 – $20,000 to whip this house into shape, so I think $35,000 is a fair place to start negotiations.

Why not lower on all these? Because the list prices on these homes are already so low that you will have competition in bidding on them. But each one can be made turn-key livable for about $60,000, gross, and this exact floorplan in this subdivision has sold as high as $237,000 in the past. They’ll rent for around $850 a month, so they’ll be cash-flow positive from the first tenant.

These are smokin’ deals. If you want to jump, email me or phone me at 602-740-7531 and we’ll get cracking.

Are these homes not for you? Fear not. I have thousands more available. We’ll talk about another great deal tomorrow.

March 23, 2009

Can Canadian real estate investors take over Phoenix one lot at a time?

by Greg Swann

Sun City Real Estate Broker

Perhaps not, but it’s not for a lack of trying. From the Toronto Globe and Mail:

The subprime mortgage crisis in the United States may have helped push that country into a recession, but for one Calgary company the financial fiasco represented a cross-border opportunity.

CBI Group, a real estate investment firm, has launched a fund that aims to raise up to $12.5-million to buy about 175 single-family homes in Phoenix over the next year. The idea is that Canadians will be able to invest in the United States, profiting from the housing market collapse.

“The opportunities are limitless for CBI,” said Jarrett Zielinski, CBI’s vice-president of property acquisitions. “For Canadians with a good cash flow, real estate has become so distressed the opportunities are boundless.”

Here are some interesting facts for you to consider:

1. You don’t have to be a Canadian to take advantage of the perfect storm in the Phoenix real estate market.

2. Canadian or not, you don’t have to be a millionaire.

I’ll have more to say about this later, but this will suffice for now: If you have cash or credit, Phoenix is ripe with investment opportunities.

March 22, 2009

Why should you buy real estate — and lots of it — now? Well, inventory abounds, prices are low, and interest rates are incredibly low. And there’s one other factor you might take into account…

by Greg Swann

Sun City Real Estate Broker

Follow the tiny blue line. That’s the growth of the U.S. money supply. That vertical surge you see there at the right is, essentially, a doubling of the number of dollars in (virtual) circulation since August 2008. Every dollar you own will soon be worth fifty cents. And every dollar you owe will soon be worth two bucks. You do the math…