I was reminded today how important it is to do your research before leaving your house to look at a potential purchase.
I received a call from a new real estate investor who told me he had a pre-foreclosure deal that he could not fund. He asked if I was interested in taking over the transaction from him.
He told me that the house was worth $350,000.00. The house is in a nice section of town, so it didn’t sound unreasonable. He told me the owner was willing to walk away for just a few thousand dollars and only owed $230,000.00. He said that it needed some paint and carpet, totaling about $10,000.00 worth of work.
Some quick math indicated a cost including purchase and renovations of $240,000.00 and a resale price at $350,000.00, which sounded good. I arranged to meet with him and drove about a half an hour to see the property. I had my realtor print out some comparable sales and hit the road as it was getting late in the day.
I arrived at the property to find that it was on a busy street and very dog-eared. The property needed a complete cosmetic redo, including carpets, paint, lighting and a new kitchen. The work would cost at least $40,000.00. I took a careful look at the comparables and found that the value was closer to $300,000.00 maybe a few thousand less. In further discussions with the investor, he informed me that the property had been appraised within the last month at $295,000.00.
The trip was a waste of my time and helps me to remember that it always pays to ask questions and do your research before getting in the car to go see a property.
Don’t forget your goal is not to purchase a property, but to locate a property you can buy at a cheap price so that you can make a profit. The profit is the goal, not the acquisition of the property.
At my basic seminars and in my books, I teach how to accurately gauge the value of properties from the comfort of your home.
Until next time, good investing,
Bob Diamond
For more informations visit:
http://bobdiamond.com
Monday, May 08, 2006
Tuesday, May 02, 2006
Foreclosures up 50% in March Nationwide
by the Associated Press
Published April 29, 2006
NEW YORK - In what could be a crack in the housing market's sturdy foundation, the number of foreclosed homes put up for sale rose 50 percent between February and March, according to a new study by Foreclosure.com.
The increase is one of the biggest monthly spikes Foreclosure.com has seen since it began tracking the market in 1999, according to Jim Houston, vice president of the foreclosure listing service.
The survey, released Wednesday, showed 28,190 foreclosed homes were put up for sale across the country in March, which is 50 percent more than in February.
The total number of foreclosed properties available for sale stood at 80,757 at the end of March, up 10 percent from the previous month.
Foreclosure.com tracks government and financial institutions when gathering data on foreclosed properties.
The number of foreclosed properties rose in 47 states in March. Houston attributes this increase to a rise in interest rates during the latter half of 2004 and a slowdown in home price increases.
Houston said it's "possible" this is a sign that the market is turning. However, it's too early to call definitively at this point, he cautioned.
Sometimes, foreclosures are delayed during the holiday season, which may have pushed some February foreclosures into March, he said.
"There are a lot of late filings and some of them take up to 90 days," he said.
If the spike in foreclosures continues in April, he said, it could signal a trend that the housing market is turning down.
The surge in the number of homebuyers opting for adjustable-rate mortgages over the past few quarters could pose a problem for homeowners as interest rates tick up. "We're starting to see repercussions because of that," Houston said.
Indeed, the markets seeing the largest number of foreclosed properties are those whose home values have stopped rising, such as Ohio, Texas, South Carolina and Michigan.
However, certain other markets, such as California, Washington, D.C., and South Dakota, saw larger percentage increases in foreclosures between February and March, which could indicate a turn in those markets. Although the total number of foreclosures remains low in those markets, the percentage increase rose more than 45 percent.
Fitch Ratings analyst Bob Curran expressed surprise at the increase reported by the study. However, he noted that foreclosed properties still represent a very small percentage of the overall housing inventory, which totaled 2.8 million homes in February. He doesn't see the foreclosure numbers as reason for alarm.
"It may simply reflect our overleveraged society and the fact that people are carrying more debt on everything and it doesn't take a lot to affect a small percentage of them in terms of moving them from homeownership to not," Curran said.
"It's hard to make a case, based on what I see here, that all of a sudden it's become an enormous trend." He said the economy is improving and employment is growing, which bodes well for a homeowner's ability to make mortgage payments.
Published April 29, 2006
NEW YORK - In what could be a crack in the housing market's sturdy foundation, the number of foreclosed homes put up for sale rose 50 percent between February and March, according to a new study by Foreclosure.com.
The increase is one of the biggest monthly spikes Foreclosure.com has seen since it began tracking the market in 1999, according to Jim Houston, vice president of the foreclosure listing service.
The survey, released Wednesday, showed 28,190 foreclosed homes were put up for sale across the country in March, which is 50 percent more than in February.
The total number of foreclosed properties available for sale stood at 80,757 at the end of March, up 10 percent from the previous month.
Foreclosure.com tracks government and financial institutions when gathering data on foreclosed properties.
The number of foreclosed properties rose in 47 states in March. Houston attributes this increase to a rise in interest rates during the latter half of 2004 and a slowdown in home price increases.
Houston said it's "possible" this is a sign that the market is turning. However, it's too early to call definitively at this point, he cautioned.
Sometimes, foreclosures are delayed during the holiday season, which may have pushed some February foreclosures into March, he said.
"There are a lot of late filings and some of them take up to 90 days," he said.
If the spike in foreclosures continues in April, he said, it could signal a trend that the housing market is turning down.
The surge in the number of homebuyers opting for adjustable-rate mortgages over the past few quarters could pose a problem for homeowners as interest rates tick up. "We're starting to see repercussions because of that," Houston said.
Indeed, the markets seeing the largest number of foreclosed properties are those whose home values have stopped rising, such as Ohio, Texas, South Carolina and Michigan.
However, certain other markets, such as California, Washington, D.C., and South Dakota, saw larger percentage increases in foreclosures between February and March, which could indicate a turn in those markets. Although the total number of foreclosures remains low in those markets, the percentage increase rose more than 45 percent.
Fitch Ratings analyst Bob Curran expressed surprise at the increase reported by the study. However, he noted that foreclosed properties still represent a very small percentage of the overall housing inventory, which totaled 2.8 million homes in February. He doesn't see the foreclosure numbers as reason for alarm.
"It may simply reflect our overleveraged society and the fact that people are carrying more debt on everything and it doesn't take a lot to affect a small percentage of them in terms of moving them from homeownership to not," Curran said.
"It's hard to make a case, based on what I see here, that all of a sudden it's become an enormous trend." He said the economy is improving and employment is growing, which bodes well for a homeowner's ability to make mortgage payments.
Subscribe to:
Posts (Atom)