Should I buy in a seller's market?

It is definitely a buyers market!!! There are many homeowners in Phoenix Metro Area stuck in the exit for so long that are now able to sell their positions to larger investors with big horsepower!

We hit the rock bottom 3 years ago here and yes, if you bought Ford stocks at $1 then you would be paying ten times more for it today as well. However, we have only gone back up to 2004 home values in most Phoenix Metropolitan Areas. At 10% running inflation since we should have been back up to what they sold for at the height of the market in 2007 and that’s exactly why the big equity funds are fueling this current frenzy in the market expecting big returns in a few more years.

The bottom line is whether you are buying one to live in or increasing the size of your portfolio, you are sitting pretty. People who have money know how to play the game. Do what large Equity Funds are doing, buying in bulk from Fannie Mae, keeping the most desirable ones, banking on the future, 4 to 5 years from now.

OK. Time out! I only have $200,000 in the bank and I want to get on the game. What do I do? I get this question every single day. Well, here is what I would do. Get my finances in line, put 35% down and buy two $250,000 to $300,000 single family homes in most desirable areas.

This is not the time to play the penny stocks! The same rule works here in Phoenix Metro. It’s time to invest in APPLE and not how many sq ft you can buy in Katmandu.

How do I find these gems and who should I trust if I live 3000 miles away and have no clue what I am buying? Good Question. I get calls often from investors whose agent told them this house rents for this or that, a lot more than what the market bears and when we go look at it, yes, they sold them a pretty house in a town where we would recommend but all the way at the edge, next to a cow pasture. They were told it rents for $2500, we can barely get $1600 for and who wants to live out there anyway even when the market shoot back up? So, you just made an uniformed real estate investment decision and now you expect us to deal with it. 

We are hands on in the business every day, 16 hours of it 7 days a week, 366 days of the year. We are married to your investment till we hand over the keys to the next homeowner.

I run the investment part of the business and I have a well qualified staff to lease and mange your investments. I am your eyes and ears out here on the filed while you go play and my success is tied to yours.

90% of my listings are purchased by my own investors before the hit the market. I let other agents sell the other 10% not because I don’t have buyers for but they don’t meet my expectations.

Time is of the essence. No, it is not. I would rather see you pay a few thousand more waiting for the right opportunity and if you run across an old lady from Pasadena on your way, let me know, we married up on it.  

If you have got your money and finances together, please let me know what your agenda is. I can not tell you if 20 years from now a certain area is where you want to retire but what I can do is to give you an honest opinion what I know to help you with your due diligent. 

Owing an investment property may be fun if you own the one next to the one you live in. Otherwise; please leave it to the experts. 

I follow George Clason’s 7 basic principals of financial freedom:

The Richest Man in Babylon

1) Start thy purse to fattening
2) Control thy expenditures
3) Make thy gold multiply
4) Guard thy treasures from loss  
5) Make of thy dwelling a profitable investment
6) Insure a future income
7) Increase thy ability to earn

If you are on the same page with me, I am looking forward to hearing from you. Please let me know how I can help.

Thank you.

Payam H. Raouf
Owner/Designated Broker
Arizona Property Management & Investments
info@azezrentals.com
623-776-5774

Straight talk! Should I buy or should I sell?

Straight talk! Should I buy or should I sell?

BY:  Payam Raouf

President/Designated Broker

Arizona Property Managements & Investments

(888) 777 6664 ext 114

INFO@AZEZRENTALS.COM

It has been a while since I have given you my opinion on the market condition in Phoenix Metropolitan Area. I think it is time to have another straight talk with our investors. I don’t have a crystal ball to predict the future and I don’t claim to be right 100% of the time but if you look back at my posts through the past three years and read my predictions, you will see they have been right on the dot most of the time.

Here we go. It is time to sell if you have bought an undesirable property in Phoenix metro between mid 2009 to mid 2011. Had you followed our recommendations, you should be fine to exit at the next opportunity. Had you not and bought into the hype, let’s help you find a strategy to exit now and reinvest it into something else.

As we went through different phases, we recommended our investors to buy with a clear exit strategy in mind. It is useless now to go over that again as we have already gone through those phases. I will try to be more specific as to where we are going from here later on.

We have had a considerable spike in the market, somewhere between 15 to 30 percent in the past two months. It is time to sit down and do some hard core math. Is it a keeper or is it time to part with it?

Do I own a unique piece of real estate? It is a very difficult question to answer when you live thousands of miles away and in most cases bought in without even looking at all your options. The only consideration was, it was cheap to pass on. Most often cheap cost more in the long run. It may be time to get an expert’s opinion.

You have now owned it for some time and should have a really good idea what it has cost you. Should you take some money off the table here and reinvest it in something else with a better outlook or could you afford to keep up with it?

To give you more specifics, there will be a link to MY EMAIL below this post. Don’t be afraid to drop me a couple lines. Give me the address of the property you own and let my team go to work for you. It won’t cost you a dime. I review their findings and give you my opinion to help you make an informed decision. 

Part two:

If you bought a property in mid 2007 to mid 2009, you are most likely upside down but not by much specially after the recent price increase in the market. The bad news is, the rents haven’t caught up with the prices and even when they do, they won’t by much. You still have to cough up the difference between the rental proceeds and your monthly mortgage. Have you considered talking to your financial adviser or an attorney to see if you benefit by short selling it? If the answer is yes, why wait? We have investors who would make you a reasonable offer that is acceptable by most financial institutions. Please let us know if that is the case by FILLING OUT THIS FORM and we even help you with the entire short sale process.

Part three:

This is for you speculator investors! If you bought a property at the top of the market, from late 2004 to mid 2007, you are in it for the long haul, think 5 to 7 more years before you can break even. It is a tough call as many of you cannot afford to short sale it. The best you can do is to keep your carrying costs manageable. Our property management division understands how important it is to keep your expenses under control. We are proactive.  To compare our services and fees please click here and FILL OUT THIS FORM and one of our area managers will show you the savings.

There are a few other groups that we have not mentioned here such as the folks who bought homes for their retirement or the calculated investors with specific plan of action.

Who should be buying in this market you may wonder? Let’s first see who is doing most of the buying these days. I break them up into three groups. Believe it or not the tenants who sold their homes through a short sale process a few years ago are now qualifying to buy again. Last month 9 of our tenants with similar circumstances bough their own homes. The dilemma is, in most cases they need to come up with a larger down payment to qualify since they have to compete with their number one competitor, institutional investors with deep pockets.

Did I mention institutional investors? Oh yeah. Almost every cash offer we get on our listings these days are over the asking price with the proof of funds attached in excess of 3,000,000 and I have seen as high as $30,000,000. They are selective. For the right property, they pay as much as it takes especially one with a good tenant in place.

Did you know banks are now getting into rental business as well? They haven’t come up with the most attractive program yet but they will in time. Anything is better than nothing.

In addition to properties we manage on behalf of several banks and financial institutions, We were recently interviewed by a large hedge fund that purchased 2500 homes directly from Fannie Mae to rent out.

In the case of banks, financial institutions and hedge funds, they fix up the homes and rent it back to the tenants or the owners already in place with lower or no deposits. They have deep pockets to pay for major repairs when it is needed and can afford to keep up with the demand of today’s tenants. The other thing is, they most likely sell it back to the tenants sometimes down the road.

The number of homes for rent both on MLS and property management sites is increasing by the day. It is taking longer to rent them out to qualified tenants especially when they are asked to pay larger deposits. 

In addition to tenant’s moving out of rentals buying their own homes, more homes are being purchased by investment groups to be rented out. The question now is, are there still opportunities out there that make sense to average investors?

You bet they are and plenty of them if you ask me. I will be doing my investors injustice if I lay them all out here. Just a quick hint, remember, location, location, location and a 3 year exit strategy! Contact me and I can show you how.

We take pride in what we do, selective when it comes to picking our players and loyal to those who have confidence in our team. Whether you have been holding off for the right opportunity, or want to improve your position or simply exit the market, please email me at payam@azezrentals.com with your information and your request. It will be answered promptly to help you make an informed decision.

With Pleasure,
Payam Raouf

President/Designated Broker

Arizona Property Managements & Investments

Phoenix home prices surge higher in past year to lead nation

Phoenix Business Journal by Kristena Hansen, Reporter

Date: Tuesday, August 7, 2012, 10:50am MST

Home-values in both the metro Phoenix and Arizona markets eclipsed the rest of the nation once again in June -- and by a long shot.

The latest housing report released Tuesday by CoreLogic shows Phoenix-area home values, including distressed sales, surged nearly 17 percent year-over-year in June -- the fastest rate of any metropolitan area nationwide. Trailing far behind in second place was the Houston metro area’s 4.5 percent increase, followed by the 3.3 percent rise seen in the Washington D.C. market.

Home values across Arizona, including distressed sales, also posted the biggest year-over-year leap of any state in June at 13.8 percent, the report said. Idaho came in second with its 10.4 percent jump from a year ago, which was closely followed by South Dakota’s 10.1 percent hike.

Nationwide, home prices in June rose an average 2.5 percent year-over-year and were up 1.3 percent from May.

Only nine states saw declines for the month with Alabama posting the biggest drop at 4.8 percent, the report said.

CoreLogic economists said in the report that the widespread price appreciations are a response to the nation’s notable reductions in both visible and shadow inventories, meaning the number of homes currently listed and not yet listed on the market.

“At the halfway point, 2012 is increasingly looking like the year that the residential housing market may have turned the corner,” Anand Nallathambi, president and CEO of CoreLogic, said in the report. “While first-half gains have given way to second-half declines over the past three years, we see encouraging signs that modest price gains are supportable across the country in the second-half of 2012.”

To inquire about purchasing or managing an investment property in phoenix please contact Payam Raouf, Desiganted Broker at 8887776664 ext 109.
 

Mystery buyer snaps up foreclosure homes

Mystery buyer snaps up foreclosure homes

Catherine Reagor - Jul. 27, 2012 04:30 PM
The Arizona Republic


A few days ago, 275 foreclosure houses across metro Phoenix were purchased through a very quiet $34 million cash deal. But it's not clear yet who the buyer is.

In February, Fannie Mae announced it would auction 2,490 foreclosure homes in Phoenix, Atlanta, Chicago, Florida, Los Angeles and Las Vegas. It was the first time the government-owned mortgage firm agreed to openly sell groups of foreclosure houses located in just one metro area. Since the crash, Fannie Mae and Freddie Mac usually have sold homes they get back from lenders one by one, or in bulk with houses located all over the country.

Several buyers were interested in the Phoenix houses Fannie Mae was selling. Originally, 341 in the region were to be sold to one buyer, according to the federal government.

The sale of the Fannie Mae foreclosure homes became apparent to data guru Tom Ruff of AZBidder on Wednesday night, when he tracked metro Phoenix's REO inventory -- homes taken back by banks that haven't been resold -- and realized it had dropped by 5 percent.

In the latest sales filings, he discovered that a group called SFR 2012-1 US West LLC, located at 135 N. Los Robles Ave., fourth floor, in Pasadena, Calif., purchased 275 foreclosure homes from Fannie Mae that day. Each deal was individually recorded. Fannie Mae's Dallas office is listed as the seller.
More research shows the buyer is an LLC created by Fannie Mae.

Fannie Mae declined to comment. But a source close to the deal said Fannie Mae is transferring the properties to an LLC that the winning buyer will invest in through a private placement deal.
That means the actual sales of these homes may not be recorded in Arizona.

The Federal Housing Finance Agency, Fannie Mae's overseer, announced earlier this month that winning bidders in the foreclosure auction had been chosen, with transactions expected to close early in the third quarter. But it didn't release names.

Before February, to get 10 foreclosure homes in Phoenix, an investor might have gotten a bundle of 30 in Detroit, five in Kansas City, two in Los Angeles and one in Boise, Idaho. Most of those are not foreclosure hot spots like Phoenix.

Now that foreclosures have slowed and metro Phoenix's median home price has climbed more than 30 percent in the past year, fewer deals are available for investors. To get 275 foreclosure homes without having to individually bid on each would be a coup if the houses are priced right.

Here are few examples of the 275 Fannie Mae foreclosure houses that sold individually on Wednesday: $265,000 for a Queen Creek house; $78,000 for a Scottsdale condominium; $59,000 for an El Mirage house; and $458,000 for a Peoria house.

Most of the 275 homes are leased.
The way the sales are being handled could be problematic for the Valley's housing market because the deals could be used as comps, and its not clear yet what the winning investor will actually pay for the houses. Ruff is pulling the sales from his data so they don't skew the area's median home price.

Mixed bag: Investors spark local recovery

by Catherine Reagor, columnist - Jun. 23, 2012 12:00 AM
The Republic | azcentral.com

A market overview from a longtime Phoenix real-estate expert, who recently became an analyst, Mark Stapp, director of the Master of Real Estate Development program at Arizona State University's W. P. Carey School of Business.

Question: Is metro Phoenix's housing market recovering?
Answer: When you look at the statistics, it's obvious the housing sector is recovering. My concern lies specifically with how it has recovered. It is investors who dug us out of the hole, not homeowners. We currently have a single-family housing stock that is about 30 percent renter-occupied. Normally, we are at about 10 percent. Our full recovery will come when homeowners can buy existing homes, and that requires more appreciation at all price levels, and more importantly, the ability for homebuyers to get a mortgage.

Q: Are you concerned the low supply of homes for sale has made bidding wars among investors and regular buyers the norm now?
A: Yes, this puts upward pressure on prices, which is good and bad. It is good because it helps resolve the "underwater" home-value issue that persists. It is bad because it impacts affordability. Unless we see significant wage growth, appreciation at current rates will not be sustainable. It's impossible to separate regional economic development from the health of the housing market.

Q: Do you think the 30 percent-plus increase in home prices since last year is sustainable?
A: No. But, this type of appreciation will continue for a while, especially in certain sub-regions. It is important that appreciation does continue. As prices rise, as long as demand persists, new homebuilding will become more feasible, and volumes will increase, and that will start to dampen some of the appreciation.

Q: Are there now too many investor-owned homes in metro Phoenix?
A: I'm concerned about the reason why there are so many renters. Many are not renters by choice. For every foreclosed home, there is a family that has faced stress. That impacts the entire community. We cannot afford, as a community, to be seen simply as a place to buy cheap real estate. In the long run, we need to build on community infrastructure that makes the Phoenix metro area a highly desirable place to live.

Q: What about all the vacant homes? Are they finally filling up?
A: Yes. Homes that were marginal in quality and location become more desirable as prices increase. Some houses may never be desirable again or have physically deteriorated to the point they may need to be demolished. However, I don't see that problem as much in this metro area as in others.

Q: Do you think the real-estate industry has changed since the boom and crash?
A: The industry has been dealing with a down cycle for six years. The shift resulting from socioeconomic and demographic changes in our population is very significant. Now we need to pay closer attention to how these changes impact what we do, how we communicate about what we do, the value proposition we offer and the design of our products. You can't simply pick up where we left off six years ago. The market is more competitive, and buyers' attitudes have shifted. Demand has changed, so the developer, to be successful, must better understand how buyers have changed and what they want and need.

To inquire about buying, selling, leasing and managing residential investment properties, please contact Mr. Payam Raouf, President/Designated Broker at Arizona Property Management & Investments at (888)777-6664 ext 109. Thank you.

Valley home values soar 32 percent in past year

Posted: Thursday, June 28, 2012 6:39 am

By Garin Groff, Tribune 

Valley home prices have skyrocketed by nearly one-third in the past year as a growing shortage of units for sale keeps boosting housing values. Median sales prices were 32 percent higher in May compared with a year ago, according to the W.P. Carey School of Business at Arizona State University. Prices were up 9 percent since April, $147,000.
  The recent trend of soaring prices is likely to end as summer settles in as people are less willing to move in 110-degree temperatures, said Mike Orr, a real estate expert at ASU.
“We’ll still see a pretty healthy transaction rate, but I think we’ve got to let people catch up a little bit on pricing and it wouldn’t surprise me if we went sideways on pricing for a month or two,” Orr said. “After all, there is a limit.”

The number of homes on the market dropped to an unusually low 8,550 on June 1. That’s down 50 percent in one year. The tight supply has led to bidding wars and buyers getting flooded with offers.
One Chandler home garnered 84 offers and a house in Glendale had 95 — only to sell for 17 percent higher than the asking price.

“If I was in the business of trying to buy a house, I’d focus on going to a new subdivision,” Orr said.
The East Valley remained the hottest portion of the market for new homes. Gilbert held the record with 187 houses, followed by Chandler’s 49 and Mesa’s 49. Phoenix logged 60 new homes in May.
However, overall home sales fell nearly 6 percent because of a short supply of listings.

Orr said looming economic woes could dampen the market, but he wouldn’t predict the market’s performance more than a few months ahead. Even if interest drops among buyers who plan to live in the home they purchase, Orr said strong investor demand will fill that gap.

New home construction shot up 57 percent in the last year as homebuilders are responding to the shortage.
“They’ll go as fast as they can but that’s not very fast because of the shortage of labor,” Orr said. “It’s not clear how quickly the labor shortage can be filled.”

To inquire about our sales, leasing and property management services, please contact Payam Raouf, President/Designated Broker of Arizona Property Management & Investments at 888-777-6664 ext 109. Thank you.