Tuesday, July 22, 2014

How are the Top 5% Real Estate Investors Investing? | 2014-06-23 | HousingWire

Here’s how leading real estate investors are different than the other 95% | 2014-06-23 | HousingWire



Where they focus, how they get their money – it’s a different world

House Cash
 
Apologies to F. Scott Fitzgerald, but the big real estate investors are very different from you and me.

A comprehensive new survey by Realeflow shows exactly how different, as it gives an insight into who the big real estate investors are and what tools they use.



Real estate investors have been an outsized player in housing sales through 2013 and 2014, and this gives an idea of where they are getting financing, what their focus is and what tools they use.



“Our data shows that many of those who are at the top of their game have largely walked away from banks, and now rely on private lenders or their own capital,” the Realeflow report says.  “Those outside of ‘The Leaders’ are still working with banks as well as hard money lenders, to augment funds they may not be able to access through private lenders or their own capital.”



The challenge for the 95% will be in breaking the cycle that continues their reliance on banks and hard money lenders, the report states.



The report, which can be read here, divides investors into two groups, the “Leaders” (the top 5%) and the “Pack,” and while Realeflow does have a product to offer investors that’s supposed to help them break out of the pack, the survey results are enlightening.



A Marathon Not a Sprint



48% of The Leaders fall into the 31-50 age range.  Furthermore, 44% fall into the 50+ category. A whopping 93% of everyone else is 31 and over.



“These numbers show us that real estate investing is much more a marathon than a sprint. Those looking for a get rich quick scheme, may do better trying to design the next Flappy Bird app,”



Realeflow’s report says. “While success can be achieved rapidly (months) true long term wealth often takes years to create.”



The Action is in Rehab

Rehabbing clocks is at the top spot for both The Leaders (53%) and The Pack (39%). Rehabbing offers, perhaps, the best opportunity to add value to a property and, therefore, net the most profit.



Click below to see the graph.



“Rehabbing is, however, the most capital intensive and risky, which is why so many investors begin (and often stay) with wholesaling, which is far less demanding on funds,” they conclude.



Stay on Leads



Real estate agents and word-of-mouth referrals still occupy the number one and two positions, remaining in line with investor tactics for generating seller leads. For buyer leads, 3rd party websites have pushed out direct mail to assume third place.



In general, buyer lead generation presents far less of a challenge to investors than seller lead generation in this current market.



Based on survey responses, generating buyer leads didn’t seem to represent a large constraint in their business. Investors are, however, looking for newer, cheaper ways to market their properties, including social media.



Auction or not to Auction?

Auction sites tend to be a newer marketing channel for finding properties and potentially selling inventory. It appears that both groups are going to consider them as a viable alternative in the future, while far more of The Leaders are having success right now.



Click below to see the graph.





“We predict that auction sites will become more popular as property inventory continues to increase on these sites. Auction sites will likely see a jump in usage amongst those investors who are most limited on time or who are looking for a consistent source of readily available deals,” they conclude.



Source of Investment Capital

Of all the questions posed on the survey, the responses to this funding question most clearly delineated the differences between The Leaders and The Pack. Most striking is that The Leaders almost never use banks to finance their investments, preferring to utilize their own capital or funds from private lenders.



“The move away from banks and hard money lenders enables those investors to move much more quickly on deals, using less expensive money. The challenge to the rest is how to make that same transition. The answer is once again, marketing,” they conclude. “Investors need to develop their brand in order to build confidence in private lenders. Investors also need to target private lenders in much the same way they would sellers, using regular communication and a consistent message that creates trust and mitigates potential risks in the eye of the lender.”

Recent Articles by Trey Garrison

Monday, July 21, 2014

Employment Opportunity

Northern California Community Loan Fund is embarking on a comprehensive search to find the right individual for their Director of Development and Communications, a key senior management position.

They are looking for an experienced, dynamic fundraising professional to create and coordinate fund development, marketing and communications strategies for NCCLF, a community development financial institution dedicated to alleviating poverty and revitalizing the economic base of low-income communities in Northern and Central California.  

To learn more about the position, please visit their posting by clicking here.


Northern California Community Loan Fund
870 Market St., Suite 677 / San Francisco, CA 94102

Saturday, July 19, 2014

Median Price of SFR Home Listings Sold in Fresno & Clovis at a 12 Month High

The median price of SFR home listings sold in Fresno & Clovis increased by 15% from June 2013 to June 2014.   



If you have any questions on his information or want specific information on the Fresno/Clovis Real Estate housing market, please contact Greg Maroot at 559-994-0254.


Maroot Properties herein deemed this information is reliable but not guaranteed; representations are approximate, individual verification recommended. Real property transactions information listed above is limited to Fresno MLS listings and may exclude total number of real property transactions which occurred in the marketplace

Friday, July 18, 2014



 Employment Opportunities
Please send cover letter and resume to tgastelum@fresnoedc.com
NEW TITLE:      Corporate Locations Coordinator
GRADE:              Non-exempt
SALARY:            $45,000 annually plus benefits
SUPERVISOR:   Director of Corporate Locations

PURPOSE OF POSITION: Under the direction of the Director of Corporate Locations, the Corporate Locations Coordinator is responsible for optimizing the economic development activity in the County of Fresno through marketing the region and by providing technical and administrative support to the EDC's Corporate Locations Department. 

For the detailed job description, please click here.


The Economic Development Corporation serving Fresno County is a nonprofit organization established to market Fresno County as the premier location for business prosperity. We strive to not only facilitate site selection for new business within Fresno County, but we also assist in the retention and expansion of businesses that are already located in the area.  

Economic Development Corporation serving
Fresno County
906 N Street
Fresno, California 93721

For more information on the Fresno EDC, visit www.fresnoedc.com

                          

Tuesday, July 1, 2014

Northern California Chapter of the Appraisal Institute 2014 Annual Fall Conference





Northern California Chapter of  the Appraisal Institute 
Presents 
2014 Annual Fall Conference Real Estate and Appraisal Symposium

Wednesday, September 17, 2014
San Francisco Marriott 55 Fourth Street (at Mission), San Francisco 

Featuring 16 Informative Breakout Sessions

Registration/Continental Breakfast 7:45am 
Conference Hours 8:30am – 5:00pm 
Networking Reception 5:00pm - 6:30pm 

 For more information please follow the link below:
Northern California Appraisal Institute 2014 Annual Fall Conference

Wednesday, June 25, 2014

5 Types of Homes With Deepest Discounts

5 Types of Homes With Deepest Discounts



For home buyers who want to score the biggest discounts on a distressed property, they better be prepared to start the bidding. Distressed properties with the biggest price discounts are those scheduled for public foreclosure auction, and they are typically homes built between 1950 and 1990 that are now vacant, according to RealtyTrac’s May 2014 Residential & Foreclosure Sales Report. Such properties sold for an average discount of 28 percent below non-distressed sales.



RealtyTrac analyzed residential property sales transactions for the year ending in March 2014 to pinpoint the types of distressed properties that sell at the largest discounts, comparing factors like foreclosure status, occupancy status, equity, and the year the home was built. The discount was calculated by comparing the average discount (below market value) or premium (above market value) of 24 different distressed property profiles, and then comparing it to properties not in foreclosure that sold during the same time period.



While scheduled auctions offered some of the largest discounts, RealtyTrac also found that the following distressed properties also tended to carry some of the largest price discounts to buyers:

  • Homes in default with positive equity: 26% discount
  • Homes in default with negative equity that were built in 1950 or before and are now vacant: 26% discount
  • Vacant homes with negative equity that are scheduled for foreclosure auction: 25% discount                 
  • Homes scheduled for foreclosure auction: 25% discount
  • Bank-owned properties that are vacant: 18% discount
Despite the discount on vacant bank-owned properties, RealtyTrac found that repossessed homes overall tended to sell for a 3 percent premium. Those built in 1950 or before sold at a 7 percent premium, according to the analysis.

The largest discounts on distressed properties were found to vary considerably by state. The following states had some of largest discounts on distressed properties, according to the RealtyTrac analysis:

  1. New York
    Vacant properties with negative equity that are scheduled for foreclosure auction: 38% discount
  2. Ohio
    Vacant properties with negative equity that were built between 1950 and 1990: 34% discount
  3. Michigan
    Vacant properties in default: 34% discount
  4. Florida
    Vacant properties with negative equity that were built between 1950 and 1990 and are scheduled for foreclosure auction: 29% discount
  5. California
    Properties with positive equity that are scheduled for foreclosure auction: 17% discount
Source: RealtyTrac

Saturday, June 14, 2014

Number of Home Listings for Sale in Fresno & Clovis Up

The total number of SFR home listings for sale in Fresno & Clovis has seen an increase of 10% from May 2013 to May 2014.



If you have any questions on this information or want specific information on the Fresno/Clovis Real Estate housing market, please contact Greg Maroot of Maroot Properties Inc. at 559-994-0254. 


Maroot Properties herein deemed this information is reliable but not guaranteed; representations are approximate, individual verification recommended. Real property transactions information listed above is limited to Fresno MLS listings and may exclude total number of real property transactions which occurred in the marketplace.

Monday, May 19, 2014

Experts Undecided on Cause of Affordability Concerns

Experts Undecided on Cause of Affordability Concerns



Experts Undecided on Cause of Affordability Concerns

Experts Undecided on Cause of Affordability Concerns
A new survey from Zillow finds real estate and investment experts are divided on the likely culprits behind affordability concerns in the market.  For more local Zillow data, please see http://www.zillow.com/fresno-ca/.



In a survey of 106 economists, real estate experts, and investment and market strategists, Zillow found a slight majority—28 percent—pinned the most blame for declining affordability on stagnant income growth across the country, even as the rest of the economy has moved in a generally positive direction.

At the same time, the number of respondents pointing to "abnormally high rates of home price and rent appreciation" as the main problem was only slightly smaller at 27 percent.



The third most commonly cited answer, following close with 21 percent of responses, was the "abnormally low supply of homes currently available for sale or rent" due to a lack of sellers coming into the market and low rates of new home construction.



Still, given the host of issues hampering the housing market, "one could probably make the case that things could, and maybe should, be a lot worse," said Dr. Stan Humphries, chief economist for Zillow, noting that tight credit also presents a problem of its own.



"We're certainly in a better spot than we were just a couple years ago, but the housing market remains far from anyone's definition of 'normal,'" Humphries said. "It will take years for these issues to either be adequately addressed through policy, or to naturally work themselves out of the market."



While affordability conditions are still generally favorable as a result of historically low mortgage rates, cost is becoming a more serious problem for homebuyers in a number of metros, including some of California's largest markets, Zillow reported in a recent study.



The survey also turned up concerns about price growth inflating a new bubble if it continues at such a high pace. Those who say price spikes are the root behind affordability problems were most likely to express worries of a bubble, with 90 percent saying there is moderate to high risk—if one isn't already inflating.



On average, panelists in the survey forecast nationwide home value appreciation of 4.4 percent through the end of 2014, nearly a point above the historical average of 3.6 percent. Growth next year is expected to fall to 3.8 percent, dropping again in 2016 to 3.4 percent.



Predictions ranged from a low of 3.2 percent this year to a high of 5.8 percent.

"After narrowing over the past year, in this quarter, the spread between the forecasts of the most optimistic and pessimistic groups not only expanded, but widened by a degree we have not seen in the four-year history of this survey," said Terry Loebs, founder of Pulsenomics, which conducts the quarterly survey for Zillow. "Time will tell whether Washington's unfolding plan to expand mortgage credit will have a durable, positive impact on home values, housing confidence, and market expectations."



About Tory Barringer

Tory Barringer
Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.

Tuesday, May 13, 2014

FIN 181 Blog Post - 438 'O' Street

438 “O” Street Then and Now


Property today
Satelite Map


Building 1
There was a property on 438 “O” Street Fresno, CA 150 feet south of Santa Clara Street. The owner of the property at the time was Mrs. Helen Hulst. An appraisal was done by Massie’s Appraisal on April 7, 1966 because the City of Fresno needed to find the proper compensation since they were taking the property through imminent domain. Imminent domain is the right to seize private property for public use with just compensation paid to the owner of the property. 
Building 2
The property had 3 buildings all in poor condition and built similar with a concrete foundation, wood framing, wood siding exterior, and rolled composition covered roof. The property also has a bathhouse with attached storage shed. There are 3 dwellings within building 1 were all in poor condition and built. The first dwelling had 3 bedrooms and a kitchen and an exterior bathroom that is shared with the second dwelling. The second dwelling has a living room, 1 bedroom, and a kitchen. The third dwelling has 2 bedrooms, a kitchen, and a bathroom.  The appraiser used comparables to assess the value with 2 methods. The first was based on a price per square foot rate and the second was a gross rent multiplier. Through the comparables the appraiser came up with a price per square foot of $3.50, which would make the total square footage of the 3 dwellings at 2,111 sqft and produce a value of $7,389. For the gross net multiplier it was concluded that the multiplier was 45 and with the 3 dwellings producing $170 per month the value produced is $7,650.
Building 3
Looking at the appraisal with an appraiser friend of mine he pointed out that the validity of the appraisal is something to question. The reasoning isn’t explained very well. According to the information and comparables in the appraisal you can see that the appraiser was being conservative with their established value. This is most evident with the gross rent multiplier (GRM) who seems much to low compared to that in the comparables. After looking through all the material is seems that the appraiser made the GRM work to match the conservative number established by the cost per square foot. If the GRM were the smallest multiplier from the comparables it would have brought value of the property to around $9,000.
The appraised value of the property was $7,500 to looking at different multipliers I think that today the property would be valued at $93,500. He also brought up that this was a terribly difficult property to appraise and it would be more difficult to appraise today. It was concluded that the property was most likely undervalued about $1,500 and should have been appraised at about $9,000.

Sources:
"Measuring Worth - Relative Value of the US Dollar." Measuring Worth - Relative Value of the US Dollar. N.p., 2014. Web. 1 Mar. 2014 <http://www.measuringworth.com/uscompare/>.


Monday, May 12, 2014

Mark Massie Report

Finance 181 Appraisal
Then and Now: U.S General Services Administration.
By: Lizabeth Sixto

            Mark Massie an appraiser in Fresno, CA who worked for Miles and Cullington Inc. appraised several homes, buildings, and vacant lands throughout the city. Between November 19, 1964 and January 4, 1965 he inspected and appraised Parcel Nos. 5, 6, 10, 13 and 15 in the complaints filed April 16, 1964 in the County of Fresno entitled People vs. Mary Shamshoian, et al, Fresno County SCC no. 122310 and People vs. Simon Der Kevorkian, et al, Fresno County SCC No. 122306.

Parcel No. 5 was located at 251-253 L Street, found in the southwesterly corner of L and Monterey Street. In the assessor’s map Bk 468- Pg. 47, this home sat on portions of lots 1, 2, 3 and 4 in Block 195 of the City of Fresno (Parkhurst’s Addition). It was a Duplex home and was zoned to M-1, light manufacturing.  Its highest and best use was to turn it into an Industrial building. Massie concluded that the lot area was approximately 9,425 square feet and worth $1.55 per square footage that totaled up to $14,609 with an additional $400 of salvage value of improvements. He concluded that the market value of the home to be sold at $15,000.
 

            Parcel No. 6 sat at 247-249 L Street. It was located on the westerly side of L Street, approximately 65 feet southerly of Monterey Street. This particular home sat on lot 5 and the south-easterly 15 feet of lot 4 in Block 195 of the City of Fresno (Parkhurst’s Addition). Its present use was a Duplex home as well and zoned to M-1, light manufacturing. The area of this land was 5,800 square feet and worth $1.50 per square footage that equaled to $8,700. He then added the interim value of improvements that came up to $2,300 and concluded that the fair market price for this home to be sold at $11,000.

            Parcel No. 10 was located at the north-westerly corner of L and Los Angeles Street, which occupied lots 12, 13, 14, 15, and 16 in Block 195 of the City of Fresno (Parkhurst’s Addition).  At that time, the land was vacant and zoned to M-1, light manufacturing. Mark Massie calculated the area to be 18, 125 square feet and worth $1.793 per square footage. He concluded that the fair market price for this vacant land to be sold at $32, 500.
           
            Parcels 5, 6, and 10 were expropriated by the government for public use, with payment of compensation. Mark Massie was responsible to appraise these private lands in order to come up with a reasonable price that satisfied both the owners of the land and the government. Today, we can see that there are no longer any homes or a vacant land. We can see that they placed a building for public use called the U.S General Services Administration. 

            The current address for this particular building is, 2130 Monterey St, Fresno, CA 93721. According to the Find the Best website, they explain that it has a 4,200 square foot garage built on a 1.33 acre lot of land. In addition its total assessed value if it were to be sold sometime this year is approximately $309,530. It is broken down into $72,264 land valuation, with an addition of $237,266 improvement valuation.  
            
            In conclusion, Mark Massie played an important role when it came to appraising these particular private lands. He accommodated the owners of the land and the government as to how much their property was worth and how much they should sell it for. I had difficulty reading his report since I wasn’t familiar with some of his terminology, but I didn’t give up. I researched through the internet and found a lot of information that helped me along the way. I learned that it takes a lot of knowledge, extensive investigation and analysis in order to come up with a final number that is reasonable and close to a fair market value.

Sources
Appraisal Report Mark Massie (1965)