Archive for the ‘Hot Arizona Investments’ Category

The US and Phoenix Real Estate Markets are Improving … Slowly But Surely

It was a good week for the U.S. economy, despite what was going on in Europe. The Conference Board Index of Leading Indicators was up to 117.4 from 110.1 from October 2010.

• Industrial production grew again. It expanded 0.7% in October. At 94.7% of its 2007 average, total industrial production for October was 3.5% above its year-earlier level. Capacity utilization for total industry stepped up to 77.8%. This is a key to the recovery because major increases in business spending for new plant is not likely to occur until capacity utilization reaches 80% or more.
• The Consumer Price Index for All Urban Consumers now stands 3.5% over year earlier levels.
• National retail sales, according to advanced estimates, increased 7.2% from October 2010.
• Housing had a “better than expected” month but the expectations were low. Privately-owned housing starts in October were at a seasonally adjusted annual rate of 628,000. This is well above year earlier levels of 539,000 and expectations of about 600,000 units. Housing permits were also higher than prior month and year levels.
• Arizona also saw continued employment gains. Total nonfarm jobs were up 44,700 over year earlier levels to 2,433,500 in the state. That is a gain of 1.9% over October 2010. For Greater Phoenix, job gains were 43,200. That equates to gains of 1.8% for October, 2011 vs. October, 2010.While these gains are modest and weak when compared to the extent of the decline since 2007, at least employment is growing.
• In housing news, R. L. Brown reports that 543 permits were recorded in October compared to 485 in October 2010. Median new home prices were $218,504 in October while median resale prices were $110,000.
• According to the Cromford Report, the average number of listings on MLS is 27,354 homes so far in November compared to 45,836 listings in November 2010.
• Days on market were down to 93 in October of this year compared to 104 in October of last year.

Major Point: Not a roaring improvement for Arizona Real Estate… . but slow and steady grow and a sharp decline in average listings.

Fannie Mae has rolled out new guidelines. Phoenix investors who have recently purchased an investment home for cash can now recoup a large portion of their investment immediately!

Cash Out without continuity: when the property is purchased for cash, the new loan is considered delayed financing, allowing the borrower to recoup the cash put into the purchase.  This can be done even if the borrower owns over four financed properties.

Guidelines:

Delayed Financing Exception

Investors who purchased a property within the past six months are eligible for a cash-out refinance if all of the following requirements are met:

• The new loan amount can be no more than the actual documented amount of the borrower’s initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points (subject to the maximum LTV/CLTV/HCLTV ratios for the transaction).
• The purchase transaction was an arms-length transaction.
• The transaction is documented by the HUD-1, which confirms that no mortgage financing was used to obtain the subject property.
• The sources of funds for the purchase transaction are documented (such as, bank statements, personal loan documents, HELOC on another property).
• All other cash-out refinance eligibility requirements are met and cash-out pricing is applied.

Note: The preliminary title search or report must not reflect any existing liens on the subject property. If the source of funds to acquire the property was an unsecured loan or HELOC (secured by another property), the new HUD-1 must reflect that source being paid off with the proceeds of the new refinance transaction.

Eligibility Requirements for Investor and Second Home Borrowers with Five to Ten Financed Properties

With the exception of high-balance mortgage loans, Phoenix investors and second home borrowers with five to ten financed properties must meet the following eligibility requirements:

Contact Phoenix Investment Property Partners for a referral to mortgage broker who can assist in building stronger Residential Rental Investment Portfolio

Rates have moved down quickly in the past ten days even for Phoenix Investment Properties. Refinance and purchase applications are already surging to 2011 highs with consumers taking advantage of the opportunity of locking in low payments.
Non-distressed Phoenix properties sold by sellers and/or investors have started to stabilize. That is an attribute proving that the worst could be behind us, Ajay Rajadhyaksha, the co-head of U.S. fixed income strategy at Barclays Capital, said in a research note. An increase in straight sales with no Banks involved over the summer should lead to another change in the mix of homes, in favor of non-distressed sales, and the aggregate index of home prices should stop declining and in hopes seeing a slow increase and stabilization of home prices in Phoenix. “In sum, there are many reasons to worry about the U.S. macroeconomic picture (the recent softening in the labor market, the U.S. fiscal picture, etc.) but the recent drop in Phoenix home prices should not be one of them,” according to Rajadhyaksha. Source: CNBC.com
The U.S. population is projected to grow by 150 million within the next 40 years and “more compact, mixed-use development” is needed to handle the growth and changing demands, Patrick Phillips, CEO for the Urban Land Institute, told an audience at the National Association of Real Estate Editors annual conference this week. “The design and development of urban areas will be radically different in the decades ahead. We are seeing a push to make our cities more livable and sustainable with more construction near downtown. Single Family homes are the number #1 demand properties, he noted. Also, younger generations, in buyer preference surveys, are placing a higher value on the sense of community and are willing to swap extra space for convenience. An urban renaissance has been taking place with neighborhoods that are near urban centers becoming more desirable, Phillips said.
Laveen Investment Property is a sound financial decision as it is close to proximity of the Phoenix Sky Harbor Airport, University of Phoenix as well as Downtown Phoenix. In that case investors who have purchase properties in Laveen are close in proximity getting the best of both worlds, a newer construction single family home paired with a good sized lot and close in proximity to the inner city. Contact us today for our Turn Key Laveen Investment Homes and surround Phoenix Area. Build a solid Phoenix Rental Homes Portfolio today with expert guidance from acquisition to Cash Flow leases.

The current Real Estate Market in the Phoenix area has seen a decline in prices as well as an increase in properties being bought by investors from all over the Nation as well out of country investors such as Australia, Middle East, Europe and many Canadian Investors. More often than not, these are cash buys in prices where positive cash flow can easily be obtained. In most cases properties are cleaned up and then put back on the market for resale after they have been leased to a tenant with 1+ year lease term. Lenders and Banks have imposed the 90 day flip rule And while it is not a deal breaker, it is important to know how things work in a quick re-sale situation of a Phoenix Investment Property.

This 90 day flip rule set forth by The Federal Housing Administration has been around for many years to prevent the buy and quick resale of a home within 90 days. Likewise, while there was no rule in place for conventional loans, backed by Fannie Mae and Freddie Mac, many lenders followed suit and did not allow for financing, for the resale of properties within 90 days. In our case we have lenders who would like 30 day seasoning and very few who will lend on a home with less than that.

However, in recent years this rule was lifted by the FHA and allowed for ownership change and immediate resale of a property. Initially, the ruling pertained just to banks that would obtain homes through foreclosure. Basically, banks had no restrictions after taking back a property through Foreclosure and re marketing to home buyers immediately.

However, that is no longer the case, as the resale of properties within 90 days by private sellers and investors is now permissible in many cases with both FHA and conventional loans.

The real key to making sure that the sale is permissible has to do with the difference between sales price or asking price compared to acquisition price of Investment Property. Basically, a property can be re sold much easier if Investor re markets the home with a less than 20% increase in price post acquisition.
However, if a property is re-sold within 90 days with sales price of more than 20% of what the first buyer bought the home for, then documented improvements (aka proof of money being invested to fix or upgrade the home) must be shown and well documented to warrant the new sales price. In addition, there will also often be two appraisals needed in these cases as well. And the lenders will take the lowest of the 2 appraisals as a final contract and purchase price of what they will lend for.
The Arizona Investment Property Market is definitely coming to life although prices are still being driven down by Phoenix Bank Owned Homes flooding the market. The market is good for the investor willing to work hard for a smaller spread than in a solid real estate market. On a side note, home prices have fallen in the first few months of the year at about 4 percent and downward pressure the Arizona Real estate market is projected through 2011…outlining a great opportunity for Phoenix Investors to build a solid Investment Property Portfolio in Arizona. Contact Phoenix Investment Property Partners with any questions regarding the Fix and Flip market and the long term Arizona Rental Property Investments the Valley has to offer.

Finally some good news regarding the Arizona Real Estate Market and the nation as a whole…Purchase applications for home loans increased 6.7 percent last week, reaching highest level of the year, according to the Mortgage Bankers Association. The MBA reports that government loan applications FHA loans reached their highest level since May 2010, increasing 10.3 percent last week compared to the week prior. This could have been caused by the projected and now imposed FHA mortgage premium increase in Arizona and nation alike.

Below replacement cost pricing of Phoenix homes combined with low interest rates below 5 percent may bring the Phoenix real estate market its busiest spring season in years, economists say. Phoenix Foreclosed Homes sales and other distressed property transactions continue to put downward pressure on home prices, which may lure more buyers off the fence and bring more hungry Phoenix investors ready to snag a deal during the typical prime-time buying season…Spring and early Summer. Some builders are imposing discounts on new homes as well as boosting commissions to buyer agents to try to spark more interest and closings of New Homes Sale transactions in areas such as Laveen, Tolleson, Avondale and parts of the East Valley such as Gilbert, Chandler and Queen Creek in Arizona Homeowners also are getting more competitive in pricing their homes. “After three years of downturn on pricing, people are becoming much more realistic in terms of valuing their home, and if they want to sell their Phoenix Home in some cases underpricing,” says Lawrence Yun, chief economist at the National Association of Realtors®. An improved job market with better income potential may also motivate more people to jump in and Buy Arizona Foreclosed Homes, says David Berson of the PMI Group. “Household formations are also very important,” Berson says. “Kids have moved back home with mom and dad, or two people may have moved in together, due to job concerns. Now they can venture out and purchase a home.” While rates are sitting comfortably below 5 percent for now, economists warn the attractive low rates won’t last long. “Few think rates are going lower,” says Mark Zandi, Moody’s Analytics chief economist. “It’s more likely they will be 6 percent than 4 percent next spring. This lights a fire under Phoenix home buyers to get in and buy before rates adjust.” Source: The Wall Street Journal

Phoenix Investment Property chart shows a slow but steady increase in the price per square foot for homes sold at Phoenix Trustees Sales. Arizona Homeowners are able to resell their properties to new Phoenix homebuyers. If it holds for the rest of December it will be the first time since June the price has been over $100 per square foot. The NUMBER of properties sold is basically on the same schedule as the last couple of months and down somewhat from December of last year, but is this the sign of recovery?! The charts are a measurement of ordinary Arizona single family homes throughout the entire metropolitan Phoenix area. On December 23rd 2010 a Phoenix Foreclosed Homes Freeze will be put into effect through the new year (January 3rd 2011). Not all Arizona homeowners will be affected but it should drive up the pricing during those 2 weeks according to statistics. If you have questions, please contact Phoenix Investment Property partners today.

Phoenix-Real-Estate-Market-Update

Phoenix Investment Property – Arizona Foreclosed Home Sales – Laveen Foreclosures – Tolleson Short Sale Homes – Investor Owned Properties – Lender Owned Price Per Square Foot Sales Laveen and Tolleson – Laveen and Tolleson Bank Owned Homes Hot List

Attention Phoenix and Scottsdale Investors

Short sale homes and REO investment property flipping 
is becoming more and more accepted by the government and major
lending institutions.  This is evidenced, among other things,
by Freddie Mac’s recent bulletins, updated credit policies by
major lenders allowing for C buyer financing (FHA buyers), and revised title bulletins
stating that the C purchase price does not need to be revealed
to the A lender as long as certain disclosures are made. 

Last Friday the FHA rescinded its 90 anti-flipping rule and will,
for a period of 1 year, allow FHA buyers to obtain loans
on investor owned properties that have been recently purchased by Phoenix investors
who intend to flip them for a profit.

This “green light” by FHA means that if you’ve been on the
sidelines of investment property flipping, you need to educate yourself
as soon as possible, because Real Estate investors will be coming on
strong in 2010 given this latest anti-flipping news. The Valley real etate market still has many potential Phoenix Investment Properties below current market price. The year 2010 will be marked as the year of the Savy R E Investor.

The waiver will take effect on February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner.  To protect FHA borrowers against predatory practices of “flipping” where properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction of the phoenix investment property
• In cases in which the sales price of the investment property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the specific conditions are met, which include the requirement of a 2nd appraisal and property inspection.

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Guidelines of 203K FHA Streamline Repair Loan

We all know that the Arizona real estate market has more Bank Owned Homes available for sale than ever before. The inventory of lender owned, REO and pending auction homes has grown to a level where it can no longer be ignored by homebuyers. Unfortunately, most of these homes are not within financeable boundaries or at least in livable condition. That’s where the 203K FHA streamline repair loan comes in to the aid of the homebuyer. Phoenix homebuyers can use the 203K FHA streamline loan and finance further repair costs of their property right into their home purchase. There are some basic things that you as the homebuyer of that distressed property need to know to fully utilize this 203K FHA streamline loan to purchase that perfect Greater Phoenix investment property:

The purchase:

The FHA 203K loan is available for the purchase of a property and takes into the account the purchase price and then add in the cost of repairs necessary to create a new loan balance. The repairs of your Arizona home would be completed after close of escrow.

Facts and Notes:

The maximum repair amount on the FHA 203K Streamline is $35,000 and there is no minimum or mandatory amount. A phoenix homebuyer can use $5K for that new roof of his Phoenix investment property or use the whole $35K and do more along the lines of a full home remodel. The other catch is that the buyer must use a licensed professional to conduct the remodel process of the home and then it must pass inspection. This is a great opportunity to convert to Arizona Green Real Estate. Purchase that distressed property, and with professional guidance from RealVision Group, you can live in a healthy eco friendly home in phoenix.

Eligible home improvements:

• · Repair or replace that worn roof of the home
• · Repair gutters
• · Place a new HVAC unit for the hot summer days
• · Fix the plumbing or convert from galvanized to copper piping in your new home
• · Upgrade your electrical to code
• · Put in that stone, wood or fresh carpet on the interior of the home
• · Do some custom painting
• · Upgrade those appliances from the 70s to nice new Stainless Steel
• · Build an awning or a patio for shade
• · Do some landscaping
• · Repair the cracks in your driveway
• · Switch out the windows to new Dual Pane Low E windows
• · Upgrade interior doors to 6 or 8 panel
• · Great opportunity to upgrade with Eco Friendly ideas in your new Phoenix home

Remember that this is only offered to owner-occupant homebuyers. No investors. Also, you may not amend or change the bones (structure) of the home. Only cosmetic repairs are allowable under the FHA 203K Streamline repair loan. We at RealVision Group can offer a slightly different FHA 203K program that allows for structural repairs, but that requires architects, contractors and becomes an elongated process which is less desirable for homebuyers.

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