Arizona Property Management and Investments
Owner/Associate Broker
888-777-6664
www.azezrentals.com
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Phoenix-area rental homes dominate housing market
Foreclosures, recession spur surprise market shift
by Catherine Reagor - May. 18, 2011 12:00 AM
The Arizona Republic .
Metro Phoenix has long been known for its supply of affordable houses, easy to buy and resell. Now, the rental market is dominating the region's housing sector, something many real-estate experts and agents didn't expect.
Rental homes of all shapes and sizes are in much higher demand across the Valley than they were five years ago. Rents are rising, and rental properties - from foreclosure houses to huge apartment complexes - are drawing investors big and small, local and international.
The housing crash is fueling a lot of the demand from tenants. Many former homeowners, who lost houses to foreclosure or walked away because they owed so much more than their houses were worth, have become new renters - and the most coveted by landlords. Another growing group of renters is made up of younger, more mobile workers who have little interest in buying houses because they have seen others take big losses on homes and don't know how long they might have jobs in metro Phoenix.
Enticing both groups is the growing number of still-affordable high-end rental homes and apartments across the Valley.
Demand for investment properties has set off a buying frenzy for both homes and apartments in the region. With interest rates so low, investors usually get a better rate of return off a rental property than if they put their money somewhere else.
Metro Phoenix foreclosure homes are selling at a record pace, and almost half are being turned into rentals by their new owners.
Apartment complexes in areas with good schools, shopping centers and freeways are sparking bidding wars among investors. During the past few months, sales of apartment complexes have been closing almost daily.
New census data confirms metro Phoenix's status as a growing rental market. The region's homeownership rate has fallen back to 1997 levels, and in some cities, including Phoenix, 30 to 40 percent of all homes occupied are rentals.
"The shift from homeownership to rentals in the Valley will continue as homeownership shrinks more," said Michael Trailor, director of the Arizona Housing Department.
Homes
Nearly half of all foreclosure and short-sale homes purchased in metro Phoenix during the past year are now rentals, according to industry estimates and property records.
The most popular homes for investor landlords have at least three bedrooms and are located in family-oriented neighborhoods.
Caroline Thompson and her family rent a three-bedroom, two-bath home in northeast Phoenix for $950 a month.
"We have an excellent landlord," she said. "For Christmas, he sent us an edible food arrangement. We take excellent care of his house, as if it were our own."
Thompson said that, in the future, she may consider buying a home, but she is three years from finishing her degree in mental-health counseling and will owe the government a lot for student loans. She also doesn't know where she will find a job or how much she will be able to earn.
A family paying $3,000 a month for a mortgage on a four-bedroom house in a nice Peoria neighborhood can move next door and pay $2,000 in rent for the same house, according to Payam Raouf, owner of Glendale-based Arizona Property Management and Investments.
"There are great renters out there now, the cream of the crop for landlords," he said. "People who earn good money are losing homes to foreclosure, and they want to rent houses as nice as they ones they owned."
More than 80 percent of independent landlords say they would rent to someone who had lost a home in foreclosure if the tenant had decent credit, according to a new survey by the National Association of Independent Landlords.
A growing trend is for investors to purchase bargain foreclosure homes and then rent them back to the former owners so they don't have to move. As a result, they end up paying much less a month for rent than their mortgage.
Monthly payments on rental homes are difficult to track overall for the region because of so many individual owners. However, most landlords and real-estate agents say rental rates on houses have been steadily climbing since 2009.
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Apartments
Metro Phoenix apartment rents are slowly climbing as more units fill up.
The average rent on an apartment in the Valley is $736, according to California-based RealFacts. That's up $12 from a year ago. Only about 8 percent of the region's apartments are empty, down from 10 percent in 2010.
Luke Consuelo rents a one-bedroom apartment in north Scottsdale.
"I don't have a family. I don't want to buy and worry about taking care of a house," he said. "Renting is great. Plus, one of the big benefits of buying is the tax deduction for mortgage interest, and the powers that be in Washington, D.C., are looking at getting rid of that."
Renters such as Consuelo who don't want to buy or can't afford rental houses are enticing investors to purchase more metro-Phoenix apartment complexes.
The amount of money investors spent on Valley apartment complexes during the first three months of this year was up 50 percent from the same period last year, real-estate brokers report.
Commercial-realty brokerage NAI Horizon, which tracks the sales of complexes with 100 units or more, reports that investors spent $293.3 million on large complexes in the first three months of this year. During the first quarter of 2009, only three apartment complexes with more than 100 units sold in metro Phoenix for a total of $60 million.
Karl Abert, an apartment broker with Phoenix's Grubb & Ellis, said investors both big and small are now bidding on apartment complexes in "desirable locations." He said investors from Canada and China are the most active international buyers of Phoenix-area apartments now.
Scottsdale, Tempe, east and downtown Phoenix, and Chandler are some of the region's most popular spots for apartments with investors.
Last month, one Phoenix apartment complex drew 15 offers.
"I think rents will flatten out this summer and then increase in September again," Abert said.
A long-term shift
The fact that many people are losing homes to foreclosure means a longer-term shift toward rentals. Most of those former homeowners won't be able to buy for at least a few years because of the hits on their credit ratings, unless they pay cash. Some former homeowners don't want to buy, even if they could.
"I have no plans on purchasing another house anytime soon," said Debra Ledford, who "walked away" from a home in Maricopa that she owed $304,000 on. It was valued at $120,000. "I'm scared of what might happen again. I lost a great deal of money."
Now, Ledford rents a home in Ahwatukee Foothills for herself and her four children.
Foreclosures stay on a person's credit for five to seven years, meaning she couldn't buy for at least that long. But, after record foreclosures, some lenders may change their requirement to spur more homebuying.
"A lot of people have lost their faith in the economy and their desire to own a home," said Jay Butler, director of realty studies at Arizona State University. "People used to buy because they had careers. Now, more people rent because they have jobs they aren't sure about."
With expectations of slow housing appreciation in metro Phoenix during the next few years, some people don't want to buy and potentially lose money on a house.
"The 'graduate from school, get married and buy a home' model doesn't work for everyone anymore," said Trailor, the Arizona housing official. "For someone who knows they may only be working for a Phoenix company for 12 to 24 months, I don't think buying a home makes sense."
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Wednesday, May 18, 2011
Tuesday, May 10, 2011
May 2011 Real Estate Market Report.
May 2011 Real Estate Market Report.
Payam Raouf
owenr/Associate Broker
Arizona Property Management and Investments
888-777-6664
Despite all the bad news coming in the past couple of days that real estate is heading for another 8% decline in the next 12 months, we are not seeing it here in most Phoenix Metro Areas. I do agree however, that we are top heavy in North Scottsdale, Fountain Hills and Paradise valley. We should see a considerable decline in prices by the end of this year in these areas.
Numbers speak louder than words!
As for the numbers: there are only 26024 homes showing active on Multiple Listing Services as of today May 10 2011 with 21878 homes under contract. In most areas, we have seen a price increase of at least 10% since December 2010.
Almost 70% of the homes under contract are purchased by investors. As the result, the number of rental homes is increasing. Currently there are 5388 homes for rent. The number of single family homes for rent has increased to 3216 an increase of 30% over the past 30 days and we see a substantial increase in that number in near the future as the homes cuurently under contract close.
Since January, rents in most areas have steadily increased by 5%. However; going forward I see rents stay where they are for the next six to eight months, until the excess rental inventory is absorbed by the number of homeowners losing their homes to foreclosure.
We are still short of 4 bed room homes. The number of 4 bed room homes verses three is a 3 to 1 ratio. Most investors bought 4 bed room homes and we shall also see that ratio balancing itself out going forward.
Our formula of monthly rent being equal or greater than 1% of purchase price still applies in most cases ( ex: purchase price $100000, rent $1000 ) but if you are looking for a higher rate of return on your investment ( ex: purchase price $50,000, rent $800 ), there are other opportunities out there. One must be very careful getting into that market as such older properties could become a burden if not selected and managed properly.
Banks have been releasing more foreclosures into the market in the past 30 days. They are going very fast. Asset managers have been pricing them below the market to create a frenzy and get the price they ultimately want instead of pricing them high to begin with and lowering it eventually which takes longer for them to sell.
We specialize in acquisition of investment properties and property management. Please contact us toll free at 888-777-6664 or info@azezrentals.com for more information.
Payam Raouf
owenr/Associate Broker
Arizona Property Management and Investments
888-777-6664
Despite all the bad news coming in the past couple of days that real estate is heading for another 8% decline in the next 12 months, we are not seeing it here in most Phoenix Metro Areas. I do agree however, that we are top heavy in North Scottsdale, Fountain Hills and Paradise valley. We should see a considerable decline in prices by the end of this year in these areas.
Numbers speak louder than words!
As for the numbers: there are only 26024 homes showing active on Multiple Listing Services as of today May 10 2011 with 21878 homes under contract. In most areas, we have seen a price increase of at least 10% since December 2010.
Almost 70% of the homes under contract are purchased by investors. As the result, the number of rental homes is increasing. Currently there are 5388 homes for rent. The number of single family homes for rent has increased to 3216 an increase of 30% over the past 30 days and we see a substantial increase in that number in near the future as the homes cuurently under contract close.
Since January, rents in most areas have steadily increased by 5%. However; going forward I see rents stay where they are for the next six to eight months, until the excess rental inventory is absorbed by the number of homeowners losing their homes to foreclosure.
We are still short of 4 bed room homes. The number of 4 bed room homes verses three is a 3 to 1 ratio. Most investors bought 4 bed room homes and we shall also see that ratio balancing itself out going forward.
Our formula of monthly rent being equal or greater than 1% of purchase price still applies in most cases ( ex: purchase price $100000, rent $1000 ) but if you are looking for a higher rate of return on your investment ( ex: purchase price $50,000, rent $800 ), there are other opportunities out there. One must be very careful getting into that market as such older properties could become a burden if not selected and managed properly.
Banks have been releasing more foreclosures into the market in the past 30 days. They are going very fast. Asset managers have been pricing them below the market to create a frenzy and get the price they ultimately want instead of pricing them high to begin with and lowering it eventually which takes longer for them to sell.
We specialize in acquisition of investment properties and property management. Please contact us toll free at 888-777-6664 or info@azezrentals.com for more information.
Thursday, April 14, 2011
How is the real estate market in Arizona?
How is the real estate market in Arizona?
Payam Raouf
Owner/Associate Broker
Arizona Property Management and Investments
Offices in: Glendale, Sun City and Mesa
It is getting pretty tough out there to find and get the right property these days. Good inventory is pretty limited and not much is coming on the market either. If you find something you like and it makes sense, go ahead and buy it.
The only issue I have been running across in the past three weeks is that the rents do not support the increase in home prices. They eventually will but for right now, you might have to settle for less than our rent formula. (monthly rent equals or greater than 1% of purchasing price). For example: If the purchase price was $140,000, rent should have been $1400 or more per month. But rents have only gone up by 5% since January - $1250 is more like it - so, your net cash flow will be off by 1%, instead of receving 8%, you are looking at 7%. However; I am expecting it to go back up when we renew their leases next year.
Inflation is running at 10% or more. Adjusted to inflation in 5, 7 or 10 years when you are ready to sell your property, paying a few thousand more now is not going to matter much for the right property.
Here is couple suggestions:
Stay away from old old homes unless they have been well maintained. Skip the price ranges of $140,000 to $165,000. They mostly won't pencil out for a decent cash flow. Look at the demographics and income. Don't buy a $150,000 home where most rents are at $1200 to $1300. It takes longer to rent them if you want more.
Consider putting an offer on a short sale.If you do, make sure they don't have too many loans on it, the less the better. The agent or the short sale negotiator knows what he/she is doing. It is a plus If the present owner is willing to rent back.
Buy at trustee sales only if you have seen the house, talked to the current owner and ran a title report on it. Too many people have got burnt on those. It is a huge plus if the current owners are still living in them and you can talk to them yourself. Better yet, they might want to rent it from you too.
Wait for the right opportunity. Don't buy into the frenzy. There is no hurry. Buy as if YOU want to live in it. If it doesn't feel right, pass. The chances are, you will find a better one. This market might go up and down here and now but it is going to be where it is for a while given $10,000 up or down.
Stay away from 4 plaxes. Too much headache for too little cash flow no matter how much you buy it for. Trust me on that.
If you need any advice on how much rent to rent your house, fill out this "Contact Form" and we will give you an estimate.
If you are not working with a realtor and want me to help you buy an investment property, that is my speciality, fill out this "Contact Form" and let me know when a good time ( Arizona Time) to contact you is.
WASHINGTON (AP) -- Investors drove up U.S. home sales last month, plunking down cash to grab cheap homes at risk of foreclosure. But purchases made by first-time homebuyers, who are crucial to a housing recovery, fell.
Sales of previously occupied homes rose in March to a seasonally adjusted annual rate of 5.1 million, the National Association of Realtors said Wednesday. That's up 3.7 percent from 4.92 million in February. The pace is far below the 6 million homes a year that economists say represents a healthy market.
Foreclosures or short sales, when the lender agrees to accept less than is owed on the mortgage, rose to 40 percent of all purchases. And deals paid for entirely in cash accounted for 35 percent of all sales. The Realtors group says that's the biggest percentage since they have been tracking all-cash sales.
Many of those purchases are being made by investors, who are targeting cheap properties in areas hit hardest by foreclosures: Phoenix, Las Vegas and Tampa. The trade group's data only accounts for individual investors and does not include homes sold in bulk at auction or on courthouse steps. So many of the foreclosure sales are likely being picked up en masse by private equity firms.
Another sign of the investor activity is that sales of homes priced under $100,000 have risen 10 percent from a year ago. In that same period, sales of mid-priced homes, between $100,000 and $500,000, have fallen more than 14 percent.
Fewer first-time homebuyers, the types of people who set down roots and raise families, are entering the market. Sales among that group fell to 33 percent in March. A more healthy percentage of first-time buyers is 40 percent, according to the trade group.
The median sales price rose in March to $159,600, but it is still down 5.9 percent from a year ago.
Homes at risk of foreclosure usually sell at 20 percent discounts compared to their original listing prices. So when sales of distressed properties rise, prices fall. But Joshua Shapiro, chief U.S. economist with MFR Inc., said that "part of the market-clearing process is that distressed properties must be sold, so the fact that this is occurring is good."
For March, sales rose 8.2 percent in the South, 3.9 percent in the Northeast and 1 percent in the Midwest. Sales fell 0.8 percent in the West.
Sales of single-family homes rose 4 percent to an annual rate of 4.45 million units. Sales of condominiums rose 1.6 percent to a rate of 650,000 units.
Payam Raouf
Owner/Associate Broker
Arizona Property Management and Investments
Offices in: Glendale, Sun City and Mesa
It is getting pretty tough out there to find and get the right property these days. Good inventory is pretty limited and not much is coming on the market either. If you find something you like and it makes sense, go ahead and buy it.
The only issue I have been running across in the past three weeks is that the rents do not support the increase in home prices. They eventually will but for right now, you might have to settle for less than our rent formula. (monthly rent equals or greater than 1% of purchasing price). For example: If the purchase price was $140,000, rent should have been $1400 or more per month. But rents have only gone up by 5% since January - $1250 is more like it - so, your net cash flow will be off by 1%, instead of receving 8%, you are looking at 7%. However; I am expecting it to go back up when we renew their leases next year.
Inflation is running at 10% or more. Adjusted to inflation in 5, 7 or 10 years when you are ready to sell your property, paying a few thousand more now is not going to matter much for the right property.
Here is couple suggestions:
Stay away from old old homes unless they have been well maintained. Skip the price ranges of $140,000 to $165,000. They mostly won't pencil out for a decent cash flow. Look at the demographics and income. Don't buy a $150,000 home where most rents are at $1200 to $1300. It takes longer to rent them if you want more.
Consider putting an offer on a short sale.If you do, make sure they don't have too many loans on it, the less the better. The agent or the short sale negotiator knows what he/she is doing. It is a plus If the present owner is willing to rent back.
Buy at trustee sales only if you have seen the house, talked to the current owner and ran a title report on it. Too many people have got burnt on those. It is a huge plus if the current owners are still living in them and you can talk to them yourself. Better yet, they might want to rent it from you too.
Wait for the right opportunity. Don't buy into the frenzy. There is no hurry. Buy as if YOU want to live in it. If it doesn't feel right, pass. The chances are, you will find a better one. This market might go up and down here and now but it is going to be where it is for a while given $10,000 up or down.
Stay away from 4 plaxes. Too much headache for too little cash flow no matter how much you buy it for. Trust me on that.
If you need any advice on how much rent to rent your house, fill out this "Contact Form" and we will give you an estimate.
If you are not working with a realtor and want me to help you buy an investment property, that is my speciality, fill out this "Contact Form" and let me know when a good time ( Arizona Time) to contact you is.
WASHINGTON (AP) -- Investors drove up U.S. home sales last month, plunking down cash to grab cheap homes at risk of foreclosure. But purchases made by first-time homebuyers, who are crucial to a housing recovery, fell.
Sales of previously occupied homes rose in March to a seasonally adjusted annual rate of 5.1 million, the National Association of Realtors said Wednesday. That's up 3.7 percent from 4.92 million in February. The pace is far below the 6 million homes a year that economists say represents a healthy market.
Foreclosures or short sales, when the lender agrees to accept less than is owed on the mortgage, rose to 40 percent of all purchases. And deals paid for entirely in cash accounted for 35 percent of all sales. The Realtors group says that's the biggest percentage since they have been tracking all-cash sales.
Many of those purchases are being made by investors, who are targeting cheap properties in areas hit hardest by foreclosures: Phoenix, Las Vegas and Tampa. The trade group's data only accounts for individual investors and does not include homes sold in bulk at auction or on courthouse steps. So many of the foreclosure sales are likely being picked up en masse by private equity firms.
Another sign of the investor activity is that sales of homes priced under $100,000 have risen 10 percent from a year ago. In that same period, sales of mid-priced homes, between $100,000 and $500,000, have fallen more than 14 percent.
Fewer first-time homebuyers, the types of people who set down roots and raise families, are entering the market. Sales among that group fell to 33 percent in March. A more healthy percentage of first-time buyers is 40 percent, according to the trade group.
The median sales price rose in March to $159,600, but it is still down 5.9 percent from a year ago.
Homes at risk of foreclosure usually sell at 20 percent discounts compared to their original listing prices. So when sales of distressed properties rise, prices fall. But Joshua Shapiro, chief U.S. economist with MFR Inc., said that "part of the market-clearing process is that distressed properties must be sold, so the fact that this is occurring is good."
For March, sales rose 8.2 percent in the South, 3.9 percent in the Northeast and 1 percent in the Midwest. Sales fell 0.8 percent in the West.
Sales of single-family homes rose 4 percent to an annual rate of 4.45 million units. Sales of condominiums rose 1.6 percent to a rate of 650,000 units.
Sunday, April 10, 2011
Home prices expected to rise this month
Home prices expected to rise this month
by Catherine Reagor - Mar. 9, 2011 12:00 AM
The Arizona Republic
The latest forecast calls for metro Phoenix home prices to climb in March.
The median sales price of a house in the region is expected to reach $114,000 this month, according to the Pending Price Index from the Arizona Regional Multiple Listing Service. The area's median price has been hovering around $110,000 for the past few months.
Home sales climbed 9 percent in February, giving prices a little boost.
Housing-data analyst Tom Ruff of the Information Market said he was "starting to see a bottom forming" for the market.
"Sales volumes are up year over year," he said. "New (foreclosure) notices are declining. Pending active (foreclosure) notices are declining. Higher prices are being paid by investors (for homes) at auction. Large hedge funds are taking a close look at our market and are prepared to hit the ground running."
by Catherine Reagor - Mar. 9, 2011 12:00 AM
The Arizona Republic
The latest forecast calls for metro Phoenix home prices to climb in March.
The median sales price of a house in the region is expected to reach $114,000 this month, according to the Pending Price Index from the Arizona Regional Multiple Listing Service. The area's median price has been hovering around $110,000 for the past few months.
Home sales climbed 9 percent in February, giving prices a little boost.
Housing-data analyst Tom Ruff of the Information Market said he was "starting to see a bottom forming" for the market.
"Sales volumes are up year over year," he said. "New (foreclosure) notices are declining. Pending active (foreclosure) notices are declining. Higher prices are being paid by investors (for homes) at auction. Large hedge funds are taking a close look at our market and are prepared to hit the ground running."
Thursday, March 31, 2011
March madness was here folks!! Cash flow is the name, appreciation is the game.
Payam Raouf
President
Arizona Property Management and Investments
888-777-6664 ext 111
March madness was here folks. It felt like 2004 and 2005 again. Investors were back with a vengeance buying up the entire valley IN CASH! Where did all that money suddenly come from?
Multiple offers were as common as sleeping in a sleeping bag behind a builder’s sales office to get the first releases 7 years ago but this time investors had cash and plenty of that too.
I don’t want to spoil it for my own clients by telling everyone out there what we are buying, as an investor told me last week in a phone conversation, “I read what is going to happen in you blog 9 months ago and it is happening now”. That maybe a little exaggeration, I wish I had such a crystal ball but the truth is we are in the tranches on the front line day in, day out; we have a good idea where the market is headed. Going through all the ups and downs in the past few years and have been involved in over 1000 transactions helps though.
Here we go, I cannot hold it. Let’s spread the wealth! 70% of the buying in Arizona is done by foreign investors!!! They are buying everything at trustee sales, bank owned, short sales and whatever makes some sense! These are very savvy investors. Conservative to some point but are willing to look at opportunities for longer term as well. Cash flow is the name, appreciation is the game.
I see more investors are moving in towards Peoria, Happy Valley, Arrow Head, and west wing Mountain taking all the good stuff betting against each other, taking the market up 5% to 10%!
Surprise, some parts of Glendale, Avondale are already played out. El Mirage, Buckeye, Tolesson, not getting much play at all. Laveen and Goodyear are getting back on the map. Litchfield park is still getting some actions.
Gilbert is on, Chandler on the side line, Mesa and Tempe, ummm. May not be too late to get into Maricopa, there may be still some deals out there, you have got to watch out where you buy out there. Queen Creek, San Tan Valley, Gold Canyon not even a prayer, dead as a door nail, don’t get stucked down there. You will be there a while.
We feel very confident that this frenzy will continue for a good while and as the result prices will continue to go up in some areas. We bought a property 14 months ago for one of our investors in Peoria for 220K and I just looked it up, it sells for 310K in today's market!! We were encouraging investors to buy there 14 months ago!
We also are expecting to see some good deals in Scottsdale area in the future, give it another six to eight months, November, December, before entering that market.
For right now folks, stick with the 3 real estate basics, Location, Location, Location.
It would not be fair to our clients to pin point exactly what pockets we are buying at this time however if you are seriously considering utilizing our expertise, please give me a call directly at 888-777-6664 ext 111. I have several associates out there in the field every day previewing properties for our steady investors. We can put you on our nightly recommended property list as well, if you would like us help you buy investment properties (our nitch) as well.
If you are currently in escrow and would like to take advantage of our “A’ Rating property management services, call Rhonda Urtuzuastegui, my Portfolio Manager at ext 109. We have a full staff to attend to your business including property prep, reconditioning and rehab services.
Just click on yahoo investment blog and saw this,"Russian billionaire buys $100M Silicon Valley home". He should have called us. We could have saved him some money. LOL
President
Arizona Property Management and Investments
888-777-6664 ext 111
March madness was here folks. It felt like 2004 and 2005 again. Investors were back with a vengeance buying up the entire valley IN CASH! Where did all that money suddenly come from?
Multiple offers were as common as sleeping in a sleeping bag behind a builder’s sales office to get the first releases 7 years ago but this time investors had cash and plenty of that too.
I don’t want to spoil it for my own clients by telling everyone out there what we are buying, as an investor told me last week in a phone conversation, “I read what is going to happen in you blog 9 months ago and it is happening now”. That maybe a little exaggeration, I wish I had such a crystal ball but the truth is we are in the tranches on the front line day in, day out; we have a good idea where the market is headed. Going through all the ups and downs in the past few years and have been involved in over 1000 transactions helps though.
Here we go, I cannot hold it. Let’s spread the wealth! 70% of the buying in Arizona is done by foreign investors!!! They are buying everything at trustee sales, bank owned, short sales and whatever makes some sense! These are very savvy investors. Conservative to some point but are willing to look at opportunities for longer term as well. Cash flow is the name, appreciation is the game.
I see more investors are moving in towards Peoria, Happy Valley, Arrow Head, and west wing Mountain taking all the good stuff betting against each other, taking the market up 5% to 10%!
Surprise, some parts of Glendale, Avondale are already played out. El Mirage, Buckeye, Tolesson, not getting much play at all. Laveen and Goodyear are getting back on the map. Litchfield park is still getting some actions.
Gilbert is on, Chandler on the side line, Mesa and Tempe, ummm. May not be too late to get into Maricopa, there may be still some deals out there, you have got to watch out where you buy out there. Queen Creek, San Tan Valley, Gold Canyon not even a prayer, dead as a door nail, don’t get stucked down there. You will be there a while.
We feel very confident that this frenzy will continue for a good while and as the result prices will continue to go up in some areas. We bought a property 14 months ago for one of our investors in Peoria for 220K and I just looked it up, it sells for 310K in today's market!! We were encouraging investors to buy there 14 months ago!
We also are expecting to see some good deals in Scottsdale area in the future, give it another six to eight months, November, December, before entering that market.
For right now folks, stick with the 3 real estate basics, Location, Location, Location.
It would not be fair to our clients to pin point exactly what pockets we are buying at this time however if you are seriously considering utilizing our expertise, please give me a call directly at 888-777-6664 ext 111. I have several associates out there in the field every day previewing properties for our steady investors. We can put you on our nightly recommended property list as well, if you would like us help you buy investment properties (our nitch) as well.
If you are currently in escrow and would like to take advantage of our “A’ Rating property management services, call Rhonda Urtuzuastegui, my Portfolio Manager at ext 109. We have a full staff to attend to your business including property prep, reconditioning and rehab services.
Just click on yahoo investment blog and saw this,"Russian billionaire buys $100M Silicon Valley home". He should have called us. We could have saved him some money. LOL
Friday, March 25, 2011
Arizona Rental/Investment Market Update as of 3/25/2011
Payam Raouf
President/Associate Broker
Arizona property Management and Investments
Arizona Rental/Investment Market Update as of 3/25/2011
Total Homes for sale on MLS: 38185 Active, AWC-Contingent Offers, AWC-Existing Option to Purchase, AWC-Seller Written Instructions
14582 pre approved short sale, pre-Foreclosure or short sale approval required in Active, AWC-Contingent Offers, AWC-Existing Option to Purchase, AWC-Seller Written Instructions
5239 Active foreclosed properties for sale ( less than 10% make sense to invest in )
Only 2135 unfurnished rental homes with 3 bed rooms or more Valley Wide, i.e. the entire Phoenix Metropolitan Area!
If this does not call for a panic, what does? There are 4 applicants per house as we speak. Rents have gone up 25% since 2009, most of it just in the last 6 months! Should this trend continue once these homes are foreclosed on, where should renters set their tenants up?
Cash buyers, investors have flooded the market. There are 2 to 3 offers on decent properties in good locations. Prices as the result are going up. Cash offers are coming in at 5% above asking prices. We have never received so many calls from cash buyers. When ask why, everyone almost says the same thing, hedging against dollar devaluation and cash flow and boy are they getting it. We used to calculate 1% of purchase price as a gauge for rent, giving investors 6 to 7 percent net return. Now a day, with the rents going up through the roof, that is moving up to 8 to 9 percent.
I just read in Arizona Republic yesterday, there are so many investors wanting to buy homes here that HUD is not accepting investors in the upcoming Auction.
Of course, bear in mind that is not on everything you buy out here. You have got to know, what and where to buy and what it rent for. That’s what we do. If you need additional information give us a call. 888-777-6664 ext 111. Payam Raouf
President/Associate Broker
Arizona property Management and Investments
Arizona Rental/Investment Market Update as of 3/25/2011
Total Homes for sale on MLS: 38185 Active, AWC-Contingent Offers, AWC-Existing Option to Purchase, AWC-Seller Written Instructions
14582 pre approved short sale, pre-Foreclosure or short sale approval required in Active, AWC-Contingent Offers, AWC-Existing Option to Purchase, AWC-Seller Written Instructions
5239 Active foreclosed properties for sale ( less than 10% make sense to invest in )
Only 2135 unfurnished rental homes with 3 bed rooms or more Valley Wide, i.e. the entire Phoenix Metropolitan Area!
If this does not call for a panic, what does? There are 4 applicants per house as we speak. Rents have gone up 25% since 2009, most of it just in the last 6 months! Should this trend continue once these homes are foreclosed on, where should renters set their tenants up?
Cash buyers, investors have flooded the market. There are 2 to 3 offers on decent properties in good locations. Prices as the result are going up. Cash offers are coming in at 5% above asking prices. We have never received so many calls from cash buyers. When ask why, everyone almost says the same thing, hedging against dollar devaluation and cash flow and boy are they getting it. We used to calculate 1% of purchase price as a gauge for rent, giving investors 6 to 7 percent net return. Now a day, with the rents going up through the roof, that is moving up to 8 to 9 percent.
I just read in Arizona Republic yesterday, there are so many investors wanting to buy homes here that HUD is not accepting investors in the upcoming Auction.
Of course, bear in mind that is not on everything you buy out here. You have got to know, what and where to buy and what it rent for. That’s what we do. If you need additional information give us a call. 888-777-6664 ext 111. Payam Raouf
Saturday, March 19, 2011
Arizona legislation to help homeowners under water.
Catherine Reagor
Arizona Republic
March 16 2011
Arizona legislation to help homeowners under water
Some Arizona homeowners under water on their mortgages might be able to reduce their interest rates and monthly payments if a proposed state program becomes law.
The "home certificate" program laid out in a new bill is intended to help homeowners lower their mortgage payments even if they can't refinance their mortgages through a traditional bank.
The proposal is both unprecedented and controversial. Essentially, it would create a separate market for mortgage financing from private investors, bypassing banks. Investors could benefit by earning interest paid by reliable borrowers, while homeowners could benefit from lower monthly payments and lower interest rates than they currently have.
Although the plan's backer says it could help many homeowners, critics say lenders will be reluctant to agree to the system.
Roadblocks
The program, which is intended to be short-term, might also put borrowers at risk and won't work if home values don't rebound enough for borrowers to refinance later, letting investors get back the money they put in.
Since the crash in home values, many Valley residents now owe more on their mortgages than their homes are worth. In that situation, they typically can't qualify to refinance. Their homes aren't worth enough for lenders to issue them a new mortgage at a lower interest rate.
That situation leaves homeowners, even those with good credit who can make their payments, unable to take advantage of lower interest rates.
Those are the homeowners the bill aims to help.
The legislation, backed by Scottsdale Republican Sen. Michelle Reagan, has passed the Senate and has been assigned to be heard in the House Commerce Committee, but that hearing is not yet scheduled.
Reagan said she believes the bill can help responsible homeowners unable to refinance to current low interest rates and set up a system for investors to make money.
"It's a private program that is based on free-market principles," Reagan said.
How it works
The system would work this way:
- Arizona homeowners would qualify if they were current on their mortgage payments but owed more than their houses were worth.
- Qualifying homeowners would enter a marketplace managed by a state agency that has not yet been designated. They would publicly post the monthly payment they were willing to make - typically a payment lower than their current bill and equivalent to their current mortgage but with an interest rate of 2 to 5 percent.
- Investors would evaluate those mortgage requests and then bid on the loans they wanted to buy.
- When investors and borrowers were matched up, the investors would pay off the homeowners' old loans. Homeowners then could make payments, at a lower interest rate, to the investors. Investors would make 2 to 5 percent interest, which Reagan noted is more than they can currently earn by saving cash in a bank.
- Borrowers would have to sign away their "anti-deficiency" rights. Laws in Arizona say banks in most cases cannot pursue homeowners to recoup any losses after foreclosing on a home. Waiving anti-deficiency rights is meant to reassure investors that borrowers wouldn't abandon their homes without repaying.
- Investors would receive a home certificate giving them lender rights to the house as collateral for the short-term loan. Each month, 3 percent of a homeowner's payment would go into an insurance fund that would help cover potential losses for investors. The fund would be managed by a government agency.
The system would make the deals temporary. After five to 10 years, homeowners would have to pay back investors' principal. The bill anticipates that, by then, home values will have rebounded, allowing borrowers to refinance through a traditional home lender.
Problems
The idea is stirring controversy. The bill is difficult to understand; the plan has never been tried before and the system would require changes to current Arizona real-estate laws and property records.
"The legislation sounds similar to how people bid on tax liens in Arizona, but the bill is very vague and hard to figure out," said Jay Butler, director of realty studies at Arizona State University. "Also, who says lenders are going to agree to it?"
That issue is key to the program. Once a private investor agrees to take over a mortgage, the original lender has to agree to the deal.
Typically, a homeowner is allowed to pay off the balance of a loan at any time. But, in this case, the homeowner is not the one paying off the loan. A third-party investor provides the cash and then that investor, not the bank, profits off the borrower's payments.
In essence, the banks would have to agree to give up their future profits to OK the deals.
Other questions remain: Would enough investors be willing to participate in the program, given that the homes are worth less than the value of the loans? Would homeowners who have signed over their anti-deficiency rights but who later lose their jobs and their homes end up also being sued by investors?
"The program has noble intentions," said Marc McCain, a Phoenix real-estate attorney, "but without widespread lender . . . support and participation, it is not likely to provide much practical benefit."
Reagan is addressing the lender issue with plans to add an amendment calling for "deemed foreclosures" in Arizona.
The move appears to be intended to force banks to give up the mortgages. But specifics on how it would work are not yet clear.
Reagan said it would help ensure that lenders must sell mortgages to investors.
"Any term with foreclosure is scary to homeowners, but deemed foreclosures will not hurt their credit," Reagan said.
Prospects
Last week, Reagan met with Gov. Jan Brewer's office to discuss the legislation and what agency could handle the insurance fund.
Ira Hecht, a New York attorney and accountant who crafted the idea behind the bill, participated in one of the meetings via conference call.
Reagan said Hecht approached her about launching the program in Arizona because many homeowners in the state are still making their payments despite a huge drop in home values.
Reagan is proposing to run the insurance part of the program through the Arizona Housing Authority, which is part of the state's Housing Department.
Mike Trailor, director of the Housing Department, said his agency is asking questions about the proposed program. The finance division of the Housing Department can issue bonds and provide other financial instruments potentially needed for the program.
Rep. Debbie McCune Davis, D-Phoenix, said legislation to help homeowners avoid foreclosures, instead of refinancing a loan they can afford, should be a bigger concern for the Legislature.
Arizona banking lobbyist Wendy Briggs said the banking industry is "neutral" on the legislation.
"This is a completely voluntary program for homeowners and investors," Reagan said. "If people don't like the terms, they don't have to participate. But, for so many of us underwater on our mortgages, it's our only option to take advantage of the current low interest rates."
Arizona Republic
March 16 2011
Arizona legislation to help homeowners under water
Some Arizona homeowners under water on their mortgages might be able to reduce their interest rates and monthly payments if a proposed state program becomes law.
The "home certificate" program laid out in a new bill is intended to help homeowners lower their mortgage payments even if they can't refinance their mortgages through a traditional bank.
The proposal is both unprecedented and controversial. Essentially, it would create a separate market for mortgage financing from private investors, bypassing banks. Investors could benefit by earning interest paid by reliable borrowers, while homeowners could benefit from lower monthly payments and lower interest rates than they currently have.
Although the plan's backer says it could help many homeowners, critics say lenders will be reluctant to agree to the system.
Roadblocks
The program, which is intended to be short-term, might also put borrowers at risk and won't work if home values don't rebound enough for borrowers to refinance later, letting investors get back the money they put in.
Since the crash in home values, many Valley residents now owe more on their mortgages than their homes are worth. In that situation, they typically can't qualify to refinance. Their homes aren't worth enough for lenders to issue them a new mortgage at a lower interest rate.
That situation leaves homeowners, even those with good credit who can make their payments, unable to take advantage of lower interest rates.
Those are the homeowners the bill aims to help.
The legislation, backed by Scottsdale Republican Sen. Michelle Reagan, has passed the Senate and has been assigned to be heard in the House Commerce Committee, but that hearing is not yet scheduled.
Reagan said she believes the bill can help responsible homeowners unable to refinance to current low interest rates and set up a system for investors to make money.
"It's a private program that is based on free-market principles," Reagan said.
How it works
The system would work this way:
- Arizona homeowners would qualify if they were current on their mortgage payments but owed more than their houses were worth.
- Qualifying homeowners would enter a marketplace managed by a state agency that has not yet been designated. They would publicly post the monthly payment they were willing to make - typically a payment lower than their current bill and equivalent to their current mortgage but with an interest rate of 2 to 5 percent.
- Investors would evaluate those mortgage requests and then bid on the loans they wanted to buy.
- When investors and borrowers were matched up, the investors would pay off the homeowners' old loans. Homeowners then could make payments, at a lower interest rate, to the investors. Investors would make 2 to 5 percent interest, which Reagan noted is more than they can currently earn by saving cash in a bank.
- Borrowers would have to sign away their "anti-deficiency" rights. Laws in Arizona say banks in most cases cannot pursue homeowners to recoup any losses after foreclosing on a home. Waiving anti-deficiency rights is meant to reassure investors that borrowers wouldn't abandon their homes without repaying.
- Investors would receive a home certificate giving them lender rights to the house as collateral for the short-term loan. Each month, 3 percent of a homeowner's payment would go into an insurance fund that would help cover potential losses for investors. The fund would be managed by a government agency.
The system would make the deals temporary. After five to 10 years, homeowners would have to pay back investors' principal. The bill anticipates that, by then, home values will have rebounded, allowing borrowers to refinance through a traditional home lender.
Problems
The idea is stirring controversy. The bill is difficult to understand; the plan has never been tried before and the system would require changes to current Arizona real-estate laws and property records.
"The legislation sounds similar to how people bid on tax liens in Arizona, but the bill is very vague and hard to figure out," said Jay Butler, director of realty studies at Arizona State University. "Also, who says lenders are going to agree to it?"
That issue is key to the program. Once a private investor agrees to take over a mortgage, the original lender has to agree to the deal.
Typically, a homeowner is allowed to pay off the balance of a loan at any time. But, in this case, the homeowner is not the one paying off the loan. A third-party investor provides the cash and then that investor, not the bank, profits off the borrower's payments.
In essence, the banks would have to agree to give up their future profits to OK the deals.
Other questions remain: Would enough investors be willing to participate in the program, given that the homes are worth less than the value of the loans? Would homeowners who have signed over their anti-deficiency rights but who later lose their jobs and their homes end up also being sued by investors?
"The program has noble intentions," said Marc McCain, a Phoenix real-estate attorney, "but without widespread lender . . . support and participation, it is not likely to provide much practical benefit."
Reagan is addressing the lender issue with plans to add an amendment calling for "deemed foreclosures" in Arizona.
The move appears to be intended to force banks to give up the mortgages. But specifics on how it would work are not yet clear.
Reagan said it would help ensure that lenders must sell mortgages to investors.
"Any term with foreclosure is scary to homeowners, but deemed foreclosures will not hurt their credit," Reagan said.
Prospects
Last week, Reagan met with Gov. Jan Brewer's office to discuss the legislation and what agency could handle the insurance fund.
Ira Hecht, a New York attorney and accountant who crafted the idea behind the bill, participated in one of the meetings via conference call.
Reagan said Hecht approached her about launching the program in Arizona because many homeowners in the state are still making their payments despite a huge drop in home values.
Reagan is proposing to run the insurance part of the program through the Arizona Housing Authority, which is part of the state's Housing Department.
Mike Trailor, director of the Housing Department, said his agency is asking questions about the proposed program. The finance division of the Housing Department can issue bonds and provide other financial instruments potentially needed for the program.
Rep. Debbie McCune Davis, D-Phoenix, said legislation to help homeowners avoid foreclosures, instead of refinancing a loan they can afford, should be a bigger concern for the Legislature.
Arizona banking lobbyist Wendy Briggs said the banking industry is "neutral" on the legislation.
"This is a completely voluntary program for homeowners and investors," Reagan said. "If people don't like the terms, they don't have to participate. But, for so many of us underwater on our mortgages, it's our only option to take advantage of the current low interest rates."
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