Investors Target East Bay Foreclosures

Foreclosures Are Bringing Out the Investors

Alameda County Foreclosure Sales  =  44.4% of home sold
Contra Costa County Foreclosure Sales  =  63.0% of homes sold

It’s a great time to consider investing in California real estate.

  • Home Prices are Down
  • Interest Rates are Down
  • Inventory is Up
  • Positive Cash Flow Opportunities

Investment Scenarios

  1. Investment Properties for College Students – buying an investment condo for your college age children instead of paying for a dorm or apartment rental.
  2. Investment Properties for First-Time Buyers – buying an investment property now to help your children get into their first home a few years from now.
  3. Retirement Properties – Contra Costa homeowners nearing retirement can leverage the current market dynamics to buy more and put money in their retirement funds.
  4. Investment Properties for Homeowners – with interest rates and home values so low, now is an excellent time to explore leveraging home equity for investment purposes.

mrei_cover_front.gifHarperMees & Associates has been working with more and more homeowners and investors over the last six months that are thinking “outside of the box.” These are historic times. There has never been a real estate market like the one we are currently experiencing. This market is full of opportunity, much of which is missed due to “past models.” Banks have an over-abundance of foreclosed properties they want to be rid of – AND – banks have money to lend for deals that make sense.We provide a free copy of The Millionaire Real Estate Investor by Gary Keller to every potential investor we meet with.

Three Areas of Focus for the Millionaire Real Estate Investor

  • Criteria: What You Buy
  • Terms: How You Buy It
  • Network: Who Helps You

We’d love to buy you a cup of coffee and discuss the current market and the opportunities available.  You can call Paul at (925) 963-4246 or email: Paul@HarperMees.com

Best Books of 2008

Most Interesting Books of 2008

I probably read 50 books in 2008 - very little fiction this year. Below are 4 that I highly recommend. I included The New Rules of Marketing & PR which I read a year ago for those who have yet to educate themselves on the topic.

California 2009 Real Estate Forecast

california-kid.jpgCalifornia Real Estate 2009 Forecast is Regional & Local

CNN's Top 10 List of 2009's Worst Real Estate Markets contains 8 California communities: Los Angeles, Stockton, Fresno, Anaheim, San Diego, Sacramento, Riverside, and Fresno.

The economic outlook for the nation is questionable and California is more vulnerable with the state budget crisis and higher unemployment. Unemployment is going to be a major factor in local real estate markets this year.

The 2009 Forecast for California Real Estate is insignificant for buyers and sellers. More than ever, buyers and sellers need to look to their local real estate markets and experts for guidance.

Given CNN's list, we see that the Los Angeles basin represents the largest regional down market in the country. Job losses in construction and the mortgage industry were big contributors to the unemployment figures in 2008. In 2009, we are going to see job losses mount in the financial services industry as banks and investment houses continue the consolidation process and the effects of that ripple out.

Pleasanton, California is a good example of why real estate is always local. Pleasanton is a mature community that is mostly built out - there is not a lot of new construction and home values, though down, have weathered the subprime meltdown better than other areas. Foreclosure activity in Pleasanton is lower than much of Alameda & Contra Costa County, but two major employers in Pleasanton have announced layoffs - Safeway and Washington Mutual. The impact of hundreds of layoffs in a community may have a significant impact on real estate. 

I've heard several comments about the upcoming change in Washington, D.C. Some homeowners are thinking that it may be best to wait until March or April to put their homes on the market this year - hoping that Obama and his team can produce some improvement quickly. 

Again, if we look at Pleasanton - we know property values are still settling and though over 80% of the subprime loans in California have reset, there are still thousands of homes in the foreclosure process adding pressure to that downward movement. The impact of local unemployment is a unknown negative, but it's not going to help things.

So, here's how I see things stacking up (in general)

Sellers - Knowing your local market at the community level and the neighborhood level is extremely important. Don't base your decision on what happened with your neighbor down the street - find an experienced expert that knows the area. Base your decision to sell and when to list your home on your specific situation and needs, not what you think or hope will happen. For the past year, we have been advising clients that needed to sell in the next two years to sell now - prices are still settling and chances are if you wait, your home will depreciate more. We continue to see sellers lose money by pricing too high. Here are some articles that apply:

Buyers - Though prices have not yet hit bottom, they are close enough and conditions are such that there are other factors more significant at this point than the asking price. Everyone in the country is onboard the "we need to save the economy" and the "stop the foreclosures" bandwagons. Things don't turn around overnight, but today and for the next few months, we know that some of the best deals for homes in the East Bay are at historic highs. Many buyers have totally unrealistic ideas about how a homeowner will respond to current conditions and offers submitted. Contact an experienced agent - it costs you nothing. Whether you are buying an existing resell home or new construction, an agent (based on national data collected for over 60 years) can help you strike a better deal than you can on your own. (Obviously, this is a general statement and doesn't apply in all cases, but statistically it is true over time)

Investors - Sophisticated investors are already in the game. For the person who missed making their fortune in the real estate markets of the 80's and 90's - NOW - is your opportunity. The opportunities and potential are simply incredible - East Bay real estate has never been subjected to the current dynamics. My next post will be a letter that we are sending out to thousands of home owners about investment opportunities and different scenarios. Come back on Monday to read it.

Mortgage Modifications - Bad Rap or Help for Home Owners

Does Mortgage Modification Actually Help to Lower Monthly Payments?

Interest in loan modification is increasing in Alameda & Contra Costa County. Local homeowners, inundated by negative news stories on foreclosures and dropping home values, are not getting all the facts when it comes to mortgage modifications programs.

“More than half of adjusted loans go into default again. The problem: Many workouts don’t actually lower payments.”  -Les Christie, CNNMoney.com

There is so much news and chatter around modifying home mortgages but what can you believe? How will it affect you? Is there help? Can you save your property? What do I believe to be true?

What makes the topic of Mortgage Modifications difficult is that all of these things can be true; there are many variables that determine an individual’s outcome. An article on CNNMoney.com titled “When mortgage rescues go bad” touches on some key issues surrounding modifications:

  • Lenders are ramping up their attempts to “help”
  • Most “modifications” are destined to fail
  • Repayment plans
  • Mortgage modifications
  • Affordable payments for success

The bottom line is that many modifications do change the current structure of a person’s loan, but many have a negative effect and can actually RAISE the monthly payment! The key to a successful program, which actually helps a person keep their property, is one that lowers the monthly payment to something affordable based on their current budget situation. If you can't afford the adjusted payment, what's the point?

rodney_kennedy.jpg

There is help out there but you must be careful on your approach when attempting to repair or better your situation. Many were enticed to rush into bad loans, don't rush into a bad modification.

Rodney Kennedy is a Mortgage Modification Consultant. If you have questions or would like further dialogue, you can email him or call 925-719-4009.

Accepting the Disney Award

This recognition from Disney is overwhelming.

What a way to start the New Year!!

I guess helping Mickey & Minnie get into their new home and keeping Goofy out of foreclosure had an impact on the powers that be.

2008 was a tough year for many, but Disney's gesture reaffirms the kindness and gratitude are still alive and well.

Here's hoping that 2009 is a joyous walk in the park for everyone.