In a selfless move of generosity (oh pleeeeaaassssse Rich), I am adding links to all of the industry news sites I read every day - so that you may draw your own conclusions and educate yourself.
You can thank me later....
See links on sidebar ------>>>>>
Wednesday, June 24, 2009
Sunday, June 21, 2009
Another Great Party!
In response to inquiries as to how our 5th annual NSDREI party went last week...
Bruce Norris spoke, eloquently as usual. He highlighted the issues with appraisals (new regulations really hurting investor spreads), issues with artificially low inventory of REO's etc (moratoriums and shadow inventory), and the imminent (in his mind) wave of new REOs and their effect on prices (lower!)
As a soldier in the trenches I took it as good news and bad news. The good news is that soon we will have a chance to pick and choose excellent assets at rock bottom prices.
The bad news is that the business we have going currently is at risk, with imminent price declines and massive inventory coming.
He touched on the problems of our State of California, however he either did not want to open that can of worms to the group at this time, or he has not researched it yet enough to speak on the matter. It is, however, as big a problem (and systemic) as we will encounter yet.
In my (not so) humble opinion.
Bruce Norris spoke, eloquently as usual. He highlighted the issues with appraisals (new regulations really hurting investor spreads), issues with artificially low inventory of REO's etc (moratoriums and shadow inventory), and the imminent (in his mind) wave of new REOs and their effect on prices (lower!)
As a soldier in the trenches I took it as good news and bad news. The good news is that soon we will have a chance to pick and choose excellent assets at rock bottom prices.
The bad news is that the business we have going currently is at risk, with imminent price declines and massive inventory coming.
He touched on the problems of our State of California, however he either did not want to open that can of worms to the group at this time, or he has not researched it yet enough to speak on the matter. It is, however, as big a problem (and systemic) as we will encounter yet.
In my (not so) humble opinion.
Thursday, May 14, 2009
The Treasury and Short Sales
Uncle Sam has told the lenders... Get your Sh(ort Sale business) together! See this amazing Fact Sheet from the Making Home Affordable website. Some of the things that are mentioned in this release:
Sellers have from 90 days to A YEAR! to sell their property
Lenders are not supposed to mess with commissions
2nd lienholders get some subsidy on their loss from Uncle Sam
Stay Tuned!
Sellers have from 90 days to A YEAR! to sell their property
Lenders are not supposed to mess with commissions
2nd lienholders get some subsidy on their loss from Uncle Sam
Stay Tuned!
Your Opinion, My Opinion, Their Opinion
Watching the media reports about the housing crisis has been a real education for me. With 50+ years on this planet, I still learn something new every day. And today, it was a big one.
What did I learn? I learned that the government, the media, and the majority of the American people do not know how bad things are in the housing market and the economy. Or maybe they know the facts but are just in denial.
An objective look at the number of job losses and the accelerating runaway train of foreclosures and bankruptcies foretells a much different future than what the spinmeisters are saying. All the kings horses (loan modifictions, streamline refinances) and all the kings men (Obama, Geitner, Bernanke) can not put Humpty Dumpty back together again.
The housing market is broken. Period. Please, don't mortgage my childrens and my grandchildrens future to save a bunch of greedy bank executives. It's time for a re-set of property values. Let the problem run its course and don't use my future money to try and stop the inevitable. Our leader is reading his own press clippings and developing an unrealistic strategy. Parting the red sea and freeing the Israelites was divine - and a worthy cause. Trying to stop the foreclosure wave would also be divine - but not worthy. This market must fix itself. We can not and should not do it.
What did I learn? I learned that the government, the media, and the majority of the American people do not know how bad things are in the housing market and the economy. Or maybe they know the facts but are just in denial.
An objective look at the number of job losses and the accelerating runaway train of foreclosures and bankruptcies foretells a much different future than what the spinmeisters are saying. All the kings horses (loan modifictions, streamline refinances) and all the kings men (Obama, Geitner, Bernanke) can not put Humpty Dumpty back together again.
The housing market is broken. Period. Please, don't mortgage my childrens and my grandchildrens future to save a bunch of greedy bank executives. It's time for a re-set of property values. Let the problem run its course and don't use my future money to try and stop the inevitable. Our leader is reading his own press clippings and developing an unrealistic strategy. Parting the red sea and freeing the Israelites was divine - and a worthy cause. Trying to stop the foreclosure wave would also be divine - but not worthy. This market must fix itself. We can not and should not do it.
Sunday, April 19, 2009
Real Estate Investor Education
Over the past year we have watched the stock market dive, while real estate has made a few interesting moves as well. So many "experts" have announced that we have hit bottom and there is nowhere to go but UP from here on out.
Let me state my position on these matters. Look out below! There is a huge crush of foreclosures yet to come on the market. With the lenders scurrying about trying to hide and/or shift their bad loans from one department to another, and the government's misguided efforts at "saving" homeowners whom should not be saved, all we really have is a guarantee of a dragging out of the process.
Homeowners whom modify thier loans to reduce their payments but still owe $500k on a now $250k house are going to eventually wake up and smell the coffee. And the lenders whom have played this bad asset shell game will shortly run out of options. Soon, the masses will cry out - "The Emporer has no clothes!"
..and then, Look out Below!
Let me state my position on these matters. Look out below! There is a huge crush of foreclosures yet to come on the market. With the lenders scurrying about trying to hide and/or shift their bad loans from one department to another, and the government's misguided efforts at "saving" homeowners whom should not be saved, all we really have is a guarantee of a dragging out of the process.
Homeowners whom modify thier loans to reduce their payments but still owe $500k on a now $250k house are going to eventually wake up and smell the coffee. And the lenders whom have played this bad asset shell game will shortly run out of options. Soon, the masses will cry out - "The Emporer has no clothes!"
..and then, Look out Below!
Friday, February 20, 2009
Housing...Stimulus...Bailout
Holy Cow! Could the news get any bleaker? Price declines, softening demand, and the inability to get financing. How can an investor overcome all these hurdles?
It's simple. Stick to the Plan! If you don't have one, make one! Don't invest a penny until you have educated yourself, developed an investing course of action, and reviewed the possible results. Prepare contingency plans, and then...
TAKE ACTION! I talk to real estate investors every day who have analyzed dozens of deals and techniques - but have not taken any action! Don't go to the extreme of analysis paralysis. Focus on an attractive technique or idea, and TAKE ACTION!
If you have ideas but no money - focus on raising money!
If you have good credit and no money - focus on partnering!
If you have a few bucks but not sure the best course of action - make a decision and have faith - Trust Yourself!
Be prudent, check your contingency plans, and take that leap!
If you are in trouble with something you have done/tried - make a decision and TAKE ACTION!
Call the bank, call a realtor, call a lawyer, call ME!
Things are definitely going to get worse. Maybe even much worse. Review your situation, protect yourself, and - OF COURSE - TAKE ACTION!
It's simple. Stick to the Plan! If you don't have one, make one! Don't invest a penny until you have educated yourself, developed an investing course of action, and reviewed the possible results. Prepare contingency plans, and then...
TAKE ACTION! I talk to real estate investors every day who have analyzed dozens of deals and techniques - but have not taken any action! Don't go to the extreme of analysis paralysis. Focus on an attractive technique or idea, and TAKE ACTION!
If you have ideas but no money - focus on raising money!
If you have good credit and no money - focus on partnering!
If you have a few bucks but not sure the best course of action - make a decision and have faith - Trust Yourself!
Be prudent, check your contingency plans, and take that leap!
If you are in trouble with something you have done/tried - make a decision and TAKE ACTION!
Call the bank, call a realtor, call a lawyer, call ME!
Things are definitely going to get worse. Maybe even much worse. Review your situation, protect yourself, and - OF COURSE - TAKE ACTION!
Tuesday, February 03, 2009
"Shadow" Inventory
RealtyTrac and other respected bean counters in the real estate market are trying to get the word out about a new problem in the housing market - Shadow Inventory.
Shadow Inventory are homes which have been foreclosed by the bank, are technically now on the books of the banks, but have not been listed yet in a MLS for sale.
Evidence points to unlisted inventory as high as 66% of the properties the banks have taken back!!!!
On a slightly better note - additional evidence suggests that most of the subprime paper has been dealt with - properties have been foreclosed, sold or changed hands in one way or another. However, a whole new wave of problems is starting - a bigger problem yet - of alt-a and prime paper defaults. These are by and large bigger loans and nicer properties. In an era of plummeting demand, this points to even greater losses for the banks. Ouch!
Shadow Inventory are homes which have been foreclosed by the bank, are technically now on the books of the banks, but have not been listed yet in a MLS for sale.
Evidence points to unlisted inventory as high as 66% of the properties the banks have taken back!!!!
On a slightly better note - additional evidence suggests that most of the subprime paper has been dealt with - properties have been foreclosed, sold or changed hands in one way or another. However, a whole new wave of problems is starting - a bigger problem yet - of alt-a and prime paper defaults. These are by and large bigger loans and nicer properties. In an era of plummeting demand, this points to even greater losses for the banks. Ouch!
Sunday, January 11, 2009
Realtors - Don't Trust the NAR!
We just stumbled across the very distressing story about David Lereah, the Chief Economist of the NAR during the boom and more recent real estate collapse of the real estate market in America.
The NAR fiddled while Rome was burning. It now seems Mr Lereah has had a stroke of conscience, and admits to spinning positive for the NAR, concealing his true feeling of imminent housing price collapse. His most current outlook?
"We’ve still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It’ll take a long time to get back to the peak prices we saw in many markets."
To all the Realtors, Brokers and Agents out there - do your own economic research. It appears the organization you pay millions of dollars to each year for dues, has a problem telling the truth.
The NAR fiddled while Rome was burning. It now seems Mr Lereah has had a stroke of conscience, and admits to spinning positive for the NAR, concealing his true feeling of imminent housing price collapse. His most current outlook?
"We’ve still got excess inventories, a bad economy and a credit crunch that will push prices down further, another 5% to 10% more. It’ll take a long time to get back to the peak prices we saw in many markets."
To all the Realtors, Brokers and Agents out there - do your own economic research. It appears the organization you pay millions of dollars to each year for dues, has a problem telling the truth.
Tuesday, December 16, 2008
This CBS News Report Says it All!
Ladies and Gentlemen - This mainstream media report on the next HUGE wave of foreclosures is surprisingly unbiased. The quotes by many of the people we respect in the investing world are dire.
THIS IS A MUST-WATCH FOR EVERY REO BROKER, ASSET MANAGER, and PORTFOLIO MANAGER in the financial industry!
Watch CBS Videos Online
THIS IS A MUST-WATCH FOR EVERY REO BROKER, ASSET MANAGER, and PORTFOLIO MANAGER in the financial industry!
Watch CBS Videos Online
Monday, December 01, 2008
Saturday, November 15, 2008
Another Option Gone!
Folks, they did it to us again... This past Thursday our Treasury Seceratary Paulson broke the news to homeowners. The 700 billion dollar bailout will not be helping homeowners in trouble after all. Instead, they are just going to give the money to banks so they can hoard it and keep their balance sheets solid.
Are we surprised? Not at all. Bailing out the banks was the intent all along. Homeowners are again left to fend for themselves. As investors, we consider this the best way anyway. These property values must be reset - but how? Aren't the banks doing Loan Modifications? Yes, a few. But why would you want a loan mod? Other than some short term relief, it locks you in to a property worth WAY LESS than what you owe on it.
So what is the answer? SHORT SALES, of course! Get rid of that property at market value, get the lender to share/take the loss. Short sales of one of the most effective yet misunderstood methods of selling property in todays' market. See our special report at http://www.78homes.com/Short_Sales.html !
Are we surprised? Not at all. Bailing out the banks was the intent all along. Homeowners are again left to fend for themselves. As investors, we consider this the best way anyway. These property values must be reset - but how? Aren't the banks doing Loan Modifications? Yes, a few. But why would you want a loan mod? Other than some short term relief, it locks you in to a property worth WAY LESS than what you owe on it.
So what is the answer? SHORT SALES, of course! Get rid of that property at market value, get the lender to share/take the loss. Short sales of one of the most effective yet misunderstood methods of selling property in todays' market. See our special report at http://www.78homes.com/Short_Sales.html !
Wednesday, November 05, 2008
Auction News
Hello Fellow Investors:
This is a quick note to give you my observations of the REDC Auction at the San Diego Convention Center on Saturday. As a reminder, these are mostly bank REOs, some of which have been on the market for awhile with no luck for the seller. Many of these properties need a lot of work – some, however, are turnkey.
So what did we see? In a nutshell - just more of the same. We had viewed many of the properties and determined conservative retail market values.
Though the starting bids were attractive, usually homes were bid up to and sold for about 80% of that conservative market value. Add the 5% buyers premium to the transaction, and you end up at 85% of retail. In my humble opinion, just not a good deal. Especially if you believe, as we do, that there is still more downside to this market.
If you are in the market for "buy and hold", positive cash flow real estate in San Diego, NOW IS THE TIME. To find these properties and make them work, you need an edge. The Savona Group finds these properties, and brings quality, economical rehab services to these deals, giving you that edge.
Call or email us for a list of potential properties, and to get moving on your investing career!
Richard Worcester
The Savona Group, LLC
952 Postal Way Suite 5 Vista CA 92083
Phone: 760.208.2845
Fax: 760.454.2956
This is a quick note to give you my observations of the REDC Auction at the San Diego Convention Center on Saturday. As a reminder, these are mostly bank REOs, some of which have been on the market for awhile with no luck for the seller. Many of these properties need a lot of work – some, however, are turnkey.
So what did we see? In a nutshell - just more of the same. We had viewed many of the properties and determined conservative retail market values.
Though the starting bids were attractive, usually homes were bid up to and sold for about 80% of that conservative market value. Add the 5% buyers premium to the transaction, and you end up at 85% of retail. In my humble opinion, just not a good deal. Especially if you believe, as we do, that there is still more downside to this market.
If you are in the market for "buy and hold", positive cash flow real estate in San Diego, NOW IS THE TIME. To find these properties and make them work, you need an edge. The Savona Group finds these properties, and brings quality, economical rehab services to these deals, giving you that edge.
Call or email us for a list of potential properties, and to get moving on your investing career!
Richard Worcester
The Savona Group, LLC
952 Postal Way Suite 5 Vista CA 92083
Phone: 760.208.2845
Fax: 760.454.2956
Monday, October 06, 2008
Borrowed from an October 6 Article about TARP (Troubled Asset...)
"Federal Reserve Chairman Ben S. Bernanke told lawmakers last month that the government would likely pay above current ``fire-sale'' values, while still seeking discounts to shield taxpayers. The sales will force some financial institutions to book losses they've been able to avoid until now."
end quote
Therein lies the rub folks. The "frozen" credit market, the asset managers refusal to accept market value for properties in the real estate market. All products of fear on the part of the financial institutions to take market value.
The emporer has no clothes. Now what?
"Federal Reserve Chairman Ben S. Bernanke told lawmakers last month that the government would likely pay above current ``fire-sale'' values, while still seeking discounts to shield taxpayers. The sales will force some financial institutions to book losses they've been able to avoid until now."
end quote
Therein lies the rub folks. The "frozen" credit market, the asset managers refusal to accept market value for properties in the real estate market. All products of fear on the part of the financial institutions to take market value.
The emporer has no clothes. Now what?
Wednesday, October 01, 2008
A Voice of Reason
Here are my thoughts on the presentation done by Dr. Christopher Thornberg at Nick's meeting last night in the Inland Empire.
1- We are in a recession. Witness this morning Ford announced sales down 33%!
2-Chris believes we do not need the bailout bill as the mechanisms are in place already to fix the problem. In fact - he is against it. The Fed Discount window is open - that is all we need.
3-We have 2 choices - take the write downs and losses now in the form of market contraction, or bail out the system by injecting false support (read that as more national debt for us and generations to come)
As the old commericial so aptly put it - you can pay me now, or you can pay me later.
Please - spend a few minutes at Chris' site http://www.beaconecon.com/index.html - it will open your eyes.
1- We are in a recession. Witness this morning Ford announced sales down 33%!
2-Chris believes we do not need the bailout bill as the mechanisms are in place already to fix the problem. In fact - he is against it. The Fed Discount window is open - that is all we need.
3-We have 2 choices - take the write downs and losses now in the form of market contraction, or bail out the system by injecting false support (read that as more national debt for us and generations to come)
As the old commericial so aptly put it - you can pay me now, or you can pay me later.
Please - spend a few minutes at Chris' site http://www.beaconecon.com/index.html - it will open your eyes.
Saturday, September 20, 2008
REO Setbacks
Looks like our fellow REO Broket/Agents are going the wrong direction! Most likely they have no choice - the lenders are still dictating the asking prices - but the REO properties coming on the market are being priced EVEN HIGHER than the ones in the past year.
Let's explore the possible reasons...
Let's explore the possible reasons...
- Prices are being inflated to counteract the low offers the sellers are receiving. They might think we base our offers on a percentage of asking price - rather than what we think true value is for that property. The sellers are mistaken - and if you are basing your offers on a percentage of asking price without doing due diligence on value - you are in trouble.
- The lenders are having little success selling their inventory and are raising prices to increase book value for the impending bailout.
- BPOs are not accurately reflecting the values of properties because the highest BPO gains most favor with the lender, and might even get the listing.
- The quality of the properties coming on the market is increasing. This is true - however this does not justify unrealistic pricing. Now we are going to have a ton of Nice houses on the market
- Properties are selling fast at full price and we are back in a sellers market! Not!
The fact is that inventory is increasing, market time is increasing, and failed deals are increasing. Please do your homework. The stories of multiple offers and a recovering market are being brought to you by the same people that denied we had a housing bubble, the same people that declined short sale offers at 80% of value only to ultimately take back the property and not be able to sell it at 1/2 of that short sale offer, and the same people that say sales are up year over year. The fact is, if you pay asking price for any property today, REO or otherwise, it will be worth significantly less in the next 12 to 24 months. It has not even hit yet!
All the government bailout help in the world can not put Humpty Dumpty back together again. Values are continuing to decline and until the sellers make an effort to price with the purpose of unloading - rather than shopping - the majority of smart investors will just stay on the sideline.
Thursday, August 28, 2008
Connect to REOs
Hi Everyone! Just wanted to let everyone know we have created a yahoo group for REO Sales. It is called - REOsales@yahoogroups.com!
Brilliant naming strategy - I know...
Brilliant naming strategy - I know...
Tuesday, July 29, 2008
The End is Near!
“The end is near!” No, I am not talking about the end of the world (I hope!). I am talking about the securitized investment /cdo debacle which has precipitated this monumental drop in value in the real estate market.
Are we near the bottom? While I do not know any respected real estate investor or financial guru who is willing to call it – you must wonder?! Last week the Bank of Australia decided to mark their paper down to 10 cents on the dollar. Today, Merrill Lynch has tried to draw a line in the sand at 22 cents on the dollar. THESE FOLKS WANT THIS PROBLEM BEHIND THEM! It will still take months and even years to reconcile this mess – but at least these lenders are finally admitting… “I can not tell a lie. It was I who cut down the cherry tree.”
As a real estate investor, now is the time. Get your financial ammunition loaded up and get ready to fire. Whether you are a onesy-twosey, or blind or specified pool type, take heart. The end is near…
Are we near the bottom? While I do not know any respected real estate investor or financial guru who is willing to call it – you must wonder?! Last week the Bank of Australia decided to mark their paper down to 10 cents on the dollar. Today, Merrill Lynch has tried to draw a line in the sand at 22 cents on the dollar. THESE FOLKS WANT THIS PROBLEM BEHIND THEM! It will still take months and even years to reconcile this mess – but at least these lenders are finally admitting… “I can not tell a lie. It was I who cut down the cherry tree.”
As a real estate investor, now is the time. Get your financial ammunition loaded up and get ready to fire. Whether you are a onesy-twosey, or blind or specified pool type, take heart. The end is near…
Friday, July 18, 2008
Now that really is a Surprise!
There are certain players that you expect to be around - even flourish - in this declining real estate market. It appears, however, that we should take nothing for granted.
Two of the largest national distressed real estate auction houses have hit troubled waters. And a third - the biggest - may be laying off staff. Why? Well, if you have been to an auction you know what it is not. These operations are very successful at what they do - getting people to commit to buying a property at the best price possible for the seller. So what is it? In my humble opinion - the buyers who commit cannot perform! They can not close the deal - be it lack of financing or appraisal hangups, or just changes of heart.
So now we have great deals out there - and no buyers. What's next? Watch out - here comes the RTC Freight Train!
Two of the largest national distressed real estate auction houses have hit troubled waters. And a third - the biggest - may be laying off staff. Why? Well, if you have been to an auction you know what it is not. These operations are very successful at what they do - getting people to commit to buying a property at the best price possible for the seller. So what is it? In my humble opinion - the buyers who commit cannot perform! They can not close the deal - be it lack of financing or appraisal hangups, or just changes of heart.
So now we have great deals out there - and no buyers. What's next? Watch out - here comes the RTC Freight Train!
Friday, July 04, 2008
San Diego Foreclosure News!
I have tracked trustee sales (sales on the courthouse steps ) for the last year – watching for the avalanche of foreclosures we have all been anticipating.
There has been a marked increase in these filings the last couple of weeks. Yesterday, my weekly list had near 800 properties! Compare that to 155 a year ago – July 2007. This is a 500% increase in properties for sale coming on to the market. There is a noticeable upward bias to the east and north county neighborhoods, too.
This must be the feeling an astronaut has as he sits on the launch pad and hears “10, 9, 8, 7….”
These numbers are shocking, even to me. Clearly, we are in a buyers market. My advice is to avoid being a seller. If you must sell, have an iron clad, multi-pronged exit strategy.
There has been a marked increase in these filings the last couple of weeks. Yesterday, my weekly list had near 800 properties! Compare that to 155 a year ago – July 2007. This is a 500% increase in properties for sale coming on to the market. There is a noticeable upward bias to the east and north county neighborhoods, too.
This must be the feeling an astronaut has as he sits on the launch pad and hears “10, 9, 8, 7….”
These numbers are shocking, even to me. Clearly, we are in a buyers market. My advice is to avoid being a seller. If you must sell, have an iron clad, multi-pronged exit strategy.
Friday, June 20, 2008
Foreclosure Rate
In Nevada, 1 in 146 homes is in foreclosure. In California, it is 1 in 204. The national average is 1 in (just over) 500. The attendance at the big foreclosure auctions has declined from 5 attendees per property to under 2 attendees per. So just as the REO wave is rising, interest is waning.
A message to all the REO Brokers out there. The way you are doing business is broken. Playing hard to get, and abusing the other agents and investors, is going to come back to bite you. This is not the mid '90s. The #$%^ is going to hit the fan. Eat your wheaties and get ready to deal. Be proactive and adopt the mindset of the investor. The bank is your enemy - not the investor.
A message to all the REO Brokers out there. The way you are doing business is broken. Playing hard to get, and abusing the other agents and investors, is going to come back to bite you. This is not the mid '90s. The #$%^ is going to hit the fan. Eat your wheaties and get ready to deal. Be proactive and adopt the mindset of the investor. The bank is your enemy - not the investor.
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