Knowing value in a bank owned home

A bank owned home in Ventura’s mid-town at 258 Glen Ellen just sold. The asking price was $379,900. Many buyers today think they can offer less for an REO because the bank “just wants to get rid of it”. Wrong! This home just closed escrow for $440,999. The home is loaded with charm but needs A LOT of work. It was listed as having about 1,200 square feet on an oversize lot, year built “unknown” (old!), 2 bedrooms and 1 bath.

This is a good example of having to know value when you submit an offer.  Just because a property is bank owned doesn’t mean the price won’t go for more. Don and I work with our clients to learn and know value, so that when they see “THE HOME” they just-must-have, they’ll know how much to offer and be confident they’ve made the right choice.

Filed under article topic: Foreclosures,Home buyers
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Boy Scouts work on the Tiger Moth

On a beautiful Saturday morning, a group of Boy Scouts from Camarillo worked on the lower right wing of the Tiger Moth.

Specifically, they installed the geodetic bracing on the upper side of the wing. Thanks guys for all your work!

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Yesterday’s Fed interest rate drop…

… of 1/2% doesn’t directly affect homeowners, or especially those of you thinking of buying a home and watching mortgage interest rates. As you know, when you go to Citi, Wells Fargo, B of A, etc, to get a loan, the money doesn’t come from them, it ultimately comes from investors who buy the pools of loans sold to Fannie Mae, Freddie Mac and the like. The investors are the ones who determine your interest rate, because they determine what interest rate they are willing to accept for their perceived risk of their investment.

And right now, investors are demanding higher rates for their perception of risk. That’s why the credit markets are still jammed up. However, over the past week there are indications things are starting to loosen up, especially as lenders react to federal guarantees for loan modifications they might make to troubled homeowners. What’s this mean for buyers looking to buy this 4th quarter? Read the rest of this article »

Filed under article topic: Mortgages/Interest rates
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Oxnard REO “speed dating” caravan set for Nov. 15

Another “speed dating” caravan of going into 7 REO (bank owned) properties in 70 minutes is coming up. We go into each home, but only for 5 minutes max – that’s why we call it “speed dating”! Call Leslie at 659-2000 for all the details. Hope you can join us – we have lots of fun!

Filed under article topic: Home buyers
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Why are investors buying now? Cash flow plus…?

You know many investors are snapping up REO (bank owned) properties. But why?

You can buy any number of nice homes for about $400,000. These will be 3+2 or 4+2 homes,  about 1,500 or 1,600 square feet in good family neighborhoods. Assume for now you pay all cash. Let’s run some numbers:

Income – $2,000 a month gross x 12 months = $24,000

Taxes – about $400 a month x 12 months  =  <$4,800>

Insurance  =  <$750>

Vacancy (5%)  =  <$1,200>

Maintenance (5% budget per year)  =  <$1,200>

Approximate Net Operating Income (NOI)  =  $16,000  (4% cash on cash return)

But are investors buying properties today because of cash flow? NO! They are making the assumption prices will come back over the long term and are looking for future appreciation. That’s why properties look so good today to investors!

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