Real Estate Investors Offer Big Pay Off, If You Can Keep Up.

Deadline News.com article originally published on Feb. 3, 2012

JULIE WYSS – Today’s Silicon Valley real estate investor isn’t necessarily a high roller, but more often a working stiff with a small-business, who is tapping existing non-real estate investments to cash in on affordable real estate properties to flip or rent.

If you are a real estate agent looking to serve them, you’d better bring your A-game.

These younger investors aren’t “suits” sporting fancy cars, but are more likely to dress casually and drive a hard bargain, offering all cash or sizable down payments on the properties they buy.

Many are smaller, newer, more innovative-thinking investors with one or two rentals under their wing, looking to acquire more. One thirty-something investor with three children chose to drain the kids’ college accounts and buy three houses with 15-year loans. By the time the kids graduate, mom and pop can sell the farm and pay cash for college.

Some are trading in two-, three- and four-plexes for single-family homes (SFH), considered diamonds in the rough, valued at half what they cost at the peak of the market.

Investors with cash in the bank are getting off the fence because they no longer trust that their money will perform as well in conventional investments, including money market funds, stocks and other investments.

In the business to make money, investors also favor Section 8 housing’s guaranteed rental income.

San Diego-based DataQuick says absentee buyers – mostly investors – purchased a record 23.8 percent of all Bay Area homes sold, up from 21.7 percent in November and 20.2 percent a year earlier. That’s an average. The share is higher in some counties, cities and neighborhoods.

If investors sound like tough cookies, they are, but you can serve them well if you have the energy and expertise to meet their demands.

The average real estate agent thinks the job is to write a contract and pray it gets accepted. Here’s what’s really required.

Going the distance

Investors aren’t in the mood to manage. That’s what they do for a living. They expect you to take the lead on acquiring their investment and expect you to understand their investment goals.

Be prepared to show an investor as many homes as they wish to see in a day, six, eight. And not just any homes. They include short sale properties occupied by families down on their luck and homes in horrid shape.

When a hot property is available, the investor needs to be convinced to tour it.

“You need to see this property and I am picking you up at your office in 30 minutes and will have you back in an hour….” Worker bees may say “no” at first, but later will agree, because you insisted. They appreciate your initiative and ultimately enjoy the thrill of the chase.

Bring hard core negotiating skills to the table. An investor needs a real estate agent familiar with the distressed property market. After several investment purchases, a skilled agent should recognize a good deal and advise the buyer what to offer. Hit the nail on the head and you gain their trust.

When the investor trusts the agent, the investor is more often willing to offer a higher price, if that’s what it takes to get the offer accepted. However, if the investor is an all-cash buyer and can forgo the appraisal contingency, even the property inspection and disclosures contingency, then a lower offer with a quick close is a more effective strategy.

Investors have little time to spare, including the celebratory two-martini lunch after the deal closes. Instead, they’d prefer you to pick them up, get them to the sign-off and back to work in an hour.

Other investors prefer not to leave work, but complete the transaction without leaving their desk. They appreciate the convenience of electronic signatures, when permitted. Electronic signatures are not allowed on a short sale, but offering to send a traveling notary or providing curb-side pick up can overcome that obstacle and help them maintain a sense of control without actually managing you.

Investors don’t care to read the fine print, but they do want to know what’s in the deal. You, along with the lender, must review the note to be sure the rate and the terms are what the investor wants. You must sign off on the title report and be certain there are no problems with liens or easements. The new title must be in the correct name of the investor or the investor’s living trust.

After escrow, the tough keep going

The real work begins after escrow closes.

Whether the investor will flip the property or rent it out, chances are, the property could use some help.

You’ll have to have at the ready a database of trusted vendors available for any work necessary – termite work, painting, hardwood floor finishers, roofers, general contractors, landscapers, pool repair guys, HVAC companies, virtually any provider you can think of. But not just any contractor, great contractors with competitive prices.

You can manage the work by installing a lock box and setting up appointments with the contractors. This allows them to quickly get to work transforming the purchase into an investment with hefty returns.

Source: Julie Wyss is the top producing individual broker associate with Intero Real Estate Services-Los Gatos, CA. For more information about Julie and her real estate services, please visit her website.

How to Prepare Your House for Sale

How to Prepare Your House for Sale

By Julie Wyss, Broker Associate

Intero Real Estate Services

518 North  Santa Cruz Ave. Los Gatos, Ca.

www.juliewyss.com

julie@juliewyss.com

408-687-2026

Time Required: Seven to 10 Days

Here's How:

1)  Disassociate Yourself With Your Home.

Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.

Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.

    

2)  De-Personalize.

Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can seemyself living here."

3)  De-Clutter!

People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.

• If you don't need it, why not donate it or throw it away?
• Remove all books from bookcases.
• Pack up those knickknacks.
• Clean off everything on kitchen counters.
• Put essential items used daily in a small box that can be stored in a closet when not in use.
• Think of this process as a head-start on the packing you will eventually need to do anyway.

4)  Rearrange Bedroom Closets and Kitchen Cabinets.

Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:

• Neatly stack dishes.
• Turn coffee cup handles facing the same way.
• Hang shirts together, buttoned and facing the same direction.
• Line up shoes.

5)  Rent a Storage Unit.

    Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around.

6)  Remove/Replace Favorite Items.

    If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.

7)  Make Minor Repairs.

• Replace cracked floor or counter tiles.
• Patch holes in walls.
• Fix leaky faucets.
• Fix doors that don't close properly and kitchen drawers that jam.
• Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
• Replace burned-out light bulbs.
• If you've considered replacing a worn bedspread, do so now!

8)  Make the House Sparkle!

• Wash windows inside and out.
• Rent a pressure washer and spray down sidewalks and exterior.
• Clean out cobwebs.
• Re-caulk tubs, showers and sinks.
• Polish chrome faucets and mirrors.
• Clean out the refrigerator.
• Vacuum daily.
• Wax floors.
• Dust furniture, ceiling fan blades and light fixtures.
• Bleach dingy grout.
• Replace worn rugs.
• Hang up fresh towels.
• Bathroom towels look great fastened with ribbon and bows.
• Clean and air out any musty smelling areas. Odors are a no-no.

9)  Scrutinize.

• Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
• Linger in the doorway of every single room and imagine how your house will look to a buyer.
• Examine carefully how furniture is arranged and move pieces around until it makes sense.
• Make sure window coverings hang level.
• Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
• Does it look like nobody lives in this house? You're almost finished.

10)    Check Curb Appeal.

If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.

• Keep the sidewalks cleared.
• Mow the lawn.
• Paint faded window trim.
• Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
• Trim your bushes.
• Make sure visitors can clearly read your house number.

Looking for a great buyers agent in the Los gatos Area? Give Julie Wyss a call at 408-687-2026.

How to Lower Your Property Taxes

Here are some cool ideas from the California Association of Realtors®:

Despite home prices in major urban centers decreasing 31 percent between 2005 and 2009, property taxes across the U.S. increased by nearly 20 percent.  There is good news, however; homeowners can fight back.

• Homeowners should keep in mind that property taxes do not always correspond with home values, because local governments typically don’t measure values every year and some have limits on annual property-tax increases.
• As a result, current property taxes might reflect the home’s value when the market was healthier.  According to the Congressional Budget Office, property-tax adjustments lag behind changes in home prices by an average of three years.
• Although homeowners cannot change their property-tax rate, which is set by the local government, homeowners can get their assessment lowered if they appeal to their local assessor.
• One key to a successful appeal is fact checking the assessor’s work. About half of all successful appeals come from homeowners pointing out an error in the assessor’s description of the home, according to one property tax expert.
• During the appeal process, which is similar to a less-formal court hearing, homeowners may present their case to several local officials or representatives.  The simplest way to convince officials that a property has been incorrectly valued is to provide evidence of the sales price of homes that are comparable to the property being discussed.  This should include square footage, amenities, and neighborhood characteristics.  Sale documents and photos of the property in question, as well as the comparable properties also should be brought in.
• Homeowners who have made improvements or substantial changes to the property should be cautious about appealing an assessment though, as it could have negative effects and actually increase the property’s value and, in turn, the property taxes.

If you are a buyer looking at homes in your area, be sure to ask your realtor® for the tax information of the neighborhood. Mello-roos and special assessments can vary greatly from one area to another even in the same city. You don’t want to be in escrow before you find out that the taxes are going to increase your monthly payments beyond your comfort zone.

Looking for a great buyers agent in the Bay Area? Give Julie Wyss a call at 408-687-2026.

MARS' Loan Modification Protections Extend To Short Sales, Other Foreclosure Relief

Rules protecting consumers from being taken by modification services also extend to short sale services and other forms of mortgage assistance, including some assistance offered by real estate agents.

Effective Jan. 31, 2011 modification assistance firms have been banned from collecting fees until a home owner agrees with a written foreclosure or modification plan approved by their lender or loan servicer.

The ban and other related disclosure and regulatory provisions are part of the Federal Trade Commission's (FTC) "Mortgage Assistance Relief Services (MARS) Rule", designed to curb fraud, scams and rip-offs in the distressed mortgage services industry.

While MARS news has been focused largely on the cottage industry of private companies offering modification services to consumers, the rule impacts all mortgage assistance relief services including those offering short sale services and other assistance.

Some real estate agents must comply

Laurie Janik, National Association of Realtors' general counsel, recently reviewed the new rule at a forum during the Realtors 2011 Midyear Legislative Meetings & Trade Expo in Washington, D.C. and put on notice, real estate agents who provide short sale services, according to a recent DSNews report.

"As the leading advocate for homeownership, NAR supports efforts to ensure that mortgage assistance relief services truly benefit consumers. Nevertheless, NAR has some concerns about the rule and its application to real estate professionals involved in short sales transactions," Janik told DSNews.

But it's not just short sales. The official Federal Register Vol. 75, No. 230 rendition of the rule is pretty clear, as federal regulations go.

"The Rule is intended to regulate for-profit providers of mortgage assistance relief services...defined as 'any service, plan, or program, offered or provided to the consumer in exchange for consideration, that is represented, expressly or by implication, to assist or attempt to assist the consumer' in negotiating a modification of a dwelling loan…stopping, preventing, or postponing a foreclosure or repossession; or obtaining one of several other types of relief to avoid delinquency or foreclosure... (including) a forbearance or repayment plan; an extension of time to cure default, reinstate a loan, or redeem a property; a waiver of an acceleration clause or balloon payment; and a short sale, deed-in-lieu of foreclosure, or any other disposition of the property except a sale to a third-party that is not the loan holder."

One question is obvious: If a company doesn't charge for mortgage relief services, does the MARS rule apply?

"Most of the local short sale specialists advertise this as a free service to our sellers and understand that the cost of the professional negotiations will be paid out of the hired Realtor's commission," said Julie Larsen Wyss, broker associate, Intero Real Estate Services, Los Gatos, CA.

Janik acknowledged to DSNews that real estate agents who do offer fee-based services must not take upfront fees, as the law requires, but she also voiced concern that other MARS rules could also apply to real estate agents helping with short sales, including rules that touch on disclosures, advertising, communicating with clients, negotiating a short sale or arranging for a short sale negotiation.

"NAR is discussing with the FTC some language in the second and third disclosures as well as some other requirements found in the MARS rule," Janik said, according to DSNews.

"The FTC is considering possible options to help make the rule more applicable to a real estate brokerage…when they are performing traditional real estate functions in a short sale transaction," she added.

A history of fraud

Too many foreclosure rescue and loan modification services became a festering outgrowth of the mortgage market meltdown that left many home owners underwater with a mortgage balance greater than the value of the home.

The operations often promised to be a go-between and negotiate with the lender to obtain a modification short sale  or some other relief from foreclosure. Some also duped home owners into believing they were affiliated with real government assistance programs.

Now, without up-front fees, many fly-by-night operations don't have the capital to resume operations.

MARS does allow licensed attorneys to charge advance fees, provided the fees are held in an escrow (trust) account and provided the attorney complies with state laws and regulations related to the federal rule.

MARS rules are disclosure heavy. The rules say mortgage assistance relief services must disclose:

• The proposed cost of the service.

• That consumers have a right to reject any offer from the service or the lender without charge and can stop doing business with the service company at any time.

• That the service is not affiliated or associated with nor approved by any government entity.

• That the lender can reject any change to the home owner's loan.

• That home owners could lose their home and damage their credit rating if they follow a service's advice to stop paying their mortgage.

If services are offered or negotiated in Chinese, Korean, Spanish, Tagalong or Vietnamese, the disclosures must also be provided in the same language.

Foreclosure rescue and loan modification services are also prohibited from making any false or misleading claims about their services, including claims about results, government affiliation; the consumer's financial obligations; refund and cancellation policies; legal representation and the amount of savings a consumer can expect, among others.

Home owners should also check with their state rules for the services. Some states have stronger regulations than the federal MARS rule.

by Broderick Perkins, Deadline News Group, May 18, 2011

Real Estate Investing for Beginners

by Broderick Perkins
DeadlineNews.Com

(09/01/2010) The real estate investment band wagon is rolling again, but try to hop aboard before you know how to hang on and you could end up under the wheels.

Savvy, experienced investors looking to buy low and sell high are always the first to hitch a ride when the housing market skids along the bottom but right now, others, maybe less experienced, are jumping aboard.

The number of buyers who plan to buy a home as an investment is more than double what it was a year ago, according to a recent Move.com Homeownership Survey.

"This latest Homeownership Survey validates what many had hoped to see in the housing markets -- affordable prices and ample inventories are restoring the appeal of real estate to investors," said Move, Inc.'s chief revenue officer, Errol Samuelson.

Relatively low list prices, an inventory of bargain-priced distressed properties and interest rates hovering at and below 4.5 percent, are all combining to bring existing and first-time investors to market.

"If you anticipate inflationary conditions in the future, investment property could be a good bet to hedge against it," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Real estate investments can pay off, but not without a lot of ground work.

• Buy your own home first. The general rule of thumb is that buying your own home will not only put a roof over your head, but also add to your insight beyond acquisition information. You'll learn not only how to buy, but you'll also get schooled in the true cost -- in time and money -- of property ownership.

With homeownership comes lessons in market conditions, financing, and property maintenance. You'll also get introduced to a host of professionals who could prove invaluable as your investment portfolio grows.

What's more, your first home could later become your first investmentproperty, a property in a market with which you are familiar.

There is one exception to the buy-your-own-home-first rule. If you live with Mom or Pop or the cost of your rental housing is low, stay put and purchase investment properties.

Just watch your cash flow -- the amount you hope to net each month after all your costs.

"No one knows better than a property manger true maintenance, repair and replacement costs, market rental values, tenant turnover, hidden liability costs, and the best areas to invest," said Andrea G. Caldwell a property manager with Century 21 Alpha in San Jose.

• Get professional help. In addition to a property manger for those buying investment properties, you'll also want additional professional help, an investment mentor and partner would could be a real estate agent, attorney or other investor who's been around the block a few times.

Seek referrals from friends, family, professionals you've previously hired and others you trust. Someone who already knows the ropes will come in handy when you are on the ropes. "Just be sure to hire a Realtor who is an aggressive negotiator, who will get your offer accepted," says short sale expert Julie Larsen Wyss, a broker associate with Intero Real Estate Services in San Jose.

Wyss says the professional should be particularly endowed with the ability to go toe-to-toe with investors who are often flush with cash.

"You need a fully underwritten loan approval, proof of additional funds in the bank for a down payment and the difference between the appraised value and the actual selling price. Be prepared to offer and pay over the asking price and appraised value, Wyss says.

• Go back to school. Turn to the Internet, libraries of books by reputable authors, successful, credible investment groups, college and university level courses, even your state's real estate license program. You don't have to actually get a license, but you can become just as educated as a licensed agent with their curriculum.

• Learn your investment market. A home in one market could give you rental income to offset all your costs, but still not appreciate. Another home could fail to bring home the bacon but appreciate over the long haul to offset long term carrying costs.

Just because the investors are back in town, doesn't guarantee you a real estate investment windfall, especially it, say, rents are down.

Lower rents can mean poor cash flow and that could force you to count on appreciation, an illusive ingredient in today's housing market.

"If you find a well-priced property, located in a healthy rental market and are able to manage and monitor the property and maintain a positive cash flow from the onset for a unit used strictly for income purposes, rather than being held with the expectation of price appreciation, this could be a good time to become a landlord," Osborne said.