Wachovia or Wells Fargo loans in default? Let's talk short sale

Wachovia bank which has approximately 25% of it's loan portfolio in default status has a very aggressive stream lined process for short sales. They are processing short sales within 10 business days of a ratified offer being submitted to the bank. Their intent is to eliminate the possibility of a future foreclosure which will cost everyone more money. Wachovia's process (which was taken over by Wells Fargo) has proved so successful that Wells Fargo is considering the use of the Wachovia short sale team to handle the Wells Fargo defaulting loans too. I wish all banks get to this state of proactive loan processing. And if you know of anyone with a loan in default (or sometimes not even in default) and they are upside down in their home, have a true hardship (now or in the future) and want to consider a short sale - call me - we can evaluate the situation and very likely provide a solution.

Single Tenant NNN Family Dollar Store for Sale

Just listed is a Family Dollar store in Akron, Ohio. Amazing pricing on this solid investment property. 9.0% cap rate at a $737,733 list price. Corporate leased store by a company that is doing very well in this current economy. Over 8 years left on the lease. Corporate tenant pays for taxes and insurance. The store had $1,350,000 in sales last year. $52,000 average household income in a 5 mile radius with 240,000 population in that same area. This is a wonderful investment and amazingly priced.

Now - why is it so well priced? There is a lack of 1031 exchange buyers in the market since last year. This typical single tenant net leased investment would have sold to a west coast buyer who was selling his single family rental house with $400,000 in equity. Now that same rental home has $100,000 in equity - not enough to do an exchange and with that same house rented - why sell now? The buyers went away for the low price point NNN deals - and of course that affects the chain going up to the larger shopping center investments.

This is a great opportunity for someone with cash on the sidelines or an investment property in the right location that has not lost it's equity in the last 18 months. This same Family Dollar store will sell at a 7.5 cap rate in a couple years when the market solidifies. Very good deal indeed!

3 REO Bank Owned Office/Warehouses San Jose

1198 N 4th Street @ Hwy 880 - 12,650 square feet, on .46 acre fenced lot, space can be divided into 4 units. Approximately 50/50 office & warehouse in current configuration. Offered at $1,125,000.

6150 Hellyer #100, commercial condo, 6,093 square feet, built in 2006, shell interior, gorgeous commercial park at the south end of Silver Creek Valley County Club area. Amazing price per square foot for new product. Offered at $700,695.

1939 Monterey Hwy, three side by side commercial office condos. One is plumbed for 2 bathrooms. $295,000 for each unit. Very near The Plant retail mega-center.

These are three outstanding bank owned values in San Jose. Call us to tour.
Mario Pinedo, CCIM 415-269-6249

Cupertino Schools Bank REO Condo $278,900!

Newly listed Bank of America REO condo on Auburn Way in San Jose with Cupertino Unified School District, 2 bedroom, 1.5 bath, two story townhouse style condo, 1099 square feet - offered at $278,900! Great deal. Hurry. Two offers submitted as I write this. Although property is still available.

Condo Complexes in a World of Hurt

Perpetuated by rampant special assessments by Home Owner Associations that were never funded sufficiently, lenders are shying away from lending on these properties. FHA is currently revising it's guidelines with respect to "approving" certain condo complexes. The current situation is there are certain condo complexes that were built to FHA approval specifications. The one's that did not go through this process (most in the Bay Area because prices were way above what FHA would lend) had to get "spot" approvals. This took weeks and made FHA loans on these complexes far less attractive. Now it looks like all complexes will not have FHA approval and all will be required to be spot checked - ughh!!!
FHA was the one source for low down payment loans on condos recently - at 3.5%. Otherwise at least 15% down for conventional loans. If FHA becomes far more difficult to use, then far fewer buyers will be buying condos - not a good sign for a market that is already soft due to all the REOs and short sales.
Financing is key - and the single family home market is relatively firm because financing is readily available.
Is there an opportunity in the condo market - absolutely yes - but when, that's tough to say.
One complex is so underwater on Technology Drive, that listing agents are suggesting cash offers only!
That complex is 5 years old, had sold at prices above $500k for 2 bedroom units, now units are offered at $249,000, and many of the units are rentals, which is another major deterrent to lenders. Add the potential of a special assessment or HOA litigation and you have a true nightmare. Beautiful property too.

Appraisal Law Taking Values Lower

Ever since the new appraisal regulation came in to effect, it has made a significant impact on the value of homes. The law was enacted to place a separation between lender and appraiser. It was thought that an appraiser may be beholden to a specific lender who routinely gives them business. Some appraisers needed only one lender to fill their book of business. Can there be influence in a situation like this? - of course there can. Can lenders push appraisers to come in with appraisal values at or above the contract price? It doesn't seem unreasonable that this occurred.
What is happening now is perhaps backlash or maybe it is an adjustment to the right level or maybe it is a pendulum swinging way past where it should rest.
Lenders and Realtors now are at the mercy of an appraisal. These are normally completed a week or so before the purchase transaction is due to close. Now, we are crossing our fingers that the price comes in at or above the contract price (worsened by overly cautious appraisers and bank REO comps that sometimes are the only comps) and the conditions spelled out in the appraisal are not deal killers (examples - repair all termite work including Section 1, Section 2 and Further Inspections and repair/replace any and all items that the appraiser found faulty - remember we are selling homes that are 10-90 years old and then some).
How does this affect pricing? Easy - deals fall apart when a seller thought he had a home sold at a certain price and with certain repairs/costs to be absorbed. Now a week before closing, the seller is required to do major work to the property - sellers tend to object, buyers do the same and then deals fall apart. This means more time on the market, more inventory, more Days On Market, and eventually lower prices.
Was the law effective - yes - was it overly effective - probably yes too. If a lender is going to lend a home buyer a few hundred thousand dollars to buy a house - should that lender not be able to pick a trusted professional to appraise it's risk - I think so. Can this process be flawed - of course - but for a true laissez-faire believer - this is best. Ah well, we shall see how this plays out in the next year.

Open House Short Sale Townhouse Willow Glen

Today from 1pm - 4pm. Come view this wonderful, updated townhouse near downtown Willow Glen at 2052 Delbarr Court off Malone and Bird Avenue. Check out the vitual tour then come see the real thing! $515,000. 2 bedrooms, 2.5 baths, two story, 1290 square feet. 1 car garage plus a one car assigned space in complex.

New Short Sale Townhouse Listing in Willow Glen

http://tours.altavistavirtualtours.com/public/vtour/display/7022

$515,000 for a lovely 2 bedroom, 2.5 bath, 2 story townhouse in a quiet and small complex in Willow Glen. Low HOA dues of $175 per month. 1 car garage plus an assigned open space. Great schools. Come to see this home on Sept 13th open house or sooner by calling me at 415-269-6249.

Corole Rodoni Speaks to Intero About Housing

Listen to 10 minutes of Carole Rodoni's review of the current real estate issues of the day. She has been consulting and researching the Bay Area real estate market for decades and has always had great insight.

Short Sale Condo Berryessa Area Not on MLS Yet

Just listed, 2 bedroom, 2 bath short sale condo. Ground floor in modern complex. Very rare attached 2 car garage. Patio, 2 master suites, 1040 square feet, nice condition. Offered at $249,000. 2 bank owned REO condos in same complex in escrow already at similar prices. This is a deal and no huge competition like the bank owned deals. HOA just spent $800,000+ on repairs and modernisation in complex. HOA dues are approx. $480 per month. Call me for details and to write an offer on this property.

Zillow Zestimate Values - How they are derived

Good video from Zillow.com explaining clearly how the Zestimate is derived. Please let me know what you agree with and what you don't.

Trulia Voices Question - Convert Campbell Detached Garage to Legal 2nd Unit?

Absolutely POSSIBLE - there have been many 2nd units done in the Campbell area legally. Of course, the City will require everything done according to code - while this may not sound unreasonable - the cost of making a true 2nd unit legal may cost far more than what you may want to spend. The best solution would be to check with an architect and have some plans drawn up. The architect will check with the City and see what needs to be done to make this legal. Some initial blocks that will come up that may derail the project are set back requirements of the structure. While the garage may be "grandfathered legal', any re-work to the space may trigger all new approvals and zoning compliance - 5' from side property lines, 20' from rear, etc. If you don't own the home yet, perhaps consider a duplex which was built legally as 2 units.

Trulia Question - Arbitration or Not?

Do most buyers opt for arbitration? Question arose from a buyer who has an offer in to a seller. The seller is requiring the arbitration clause signed or no deal.

Yes, in most contracts, the buyer and seller agree to arbitration. Though this may not be the best solution depending on what transaction and which party you are. By not agreeing to arbitration up front, this does not eliminate the option if a litigious situation occurs - but then both parties must opt for arbitration. By opting for arbitration, then you are forced into that situation without choice. Arbitration is effective in the most part to save money and time, but it very well may limit what you can achieve in a full blow court situation. By the way, most attorneys, who buy homes, don't opt for arbitration, obviously.

Short Sale Commercial Warehouse Condo for Sale Union City

Short Sale APPROVED on this 2,452 square foot commercial warehouse condo in a great location in Union City. Very convenient to highways 880, 92 and the Dumbarton Bridge. Offered at $399,000 - this is a great price per square foot for this building in excellent condition. Address is 33371 Croation Way, Union City, CA.

Santana Row Area Apartment Building for Sale

10 units near Santana Row, Winchester Blvd and 280 for sale at a very attractive price.
7,050 square foot living building on a 12,000 square foot lot, fully rented, nine 1 bedroom units and one two bedroom unit. $116,000 gross rents annually offered at $1,300,000. Great 1031 exchange replacement property. Rents are strong and stable in this market segment. Excellent opportunity to buy into a good rental market. Call me to tour this property or to see the other great apartment deals available that we are tracking.

San Jose Silicon Valley Real Estate First Time Home Buyer Seminar

Our very informative first time home buyer seminar is scheduled for Thursday August 20th from 6pm - 7:30pm at the Intero Cupertino office. Tony Guaraldi of Intero Mortgage will talk about current financing options and our manager Jess Wible will talk about buying opportunities in the REO, short sale and conventional markets. Buyers in 2009 will do very well in my opinion. Get to the class and let's start looking at your first home.

RSVP please as seating fills up every meeting.

*** Need a Buyer for Approved Short Sale Townhouse in San Jose ***

After 4 months waiting on a short sale approval from the bank, buyer is no longer around. Short sale is now approved and I need a buyer for this great deal by Friday, August 7th! $400,000 price for a 2 year old townhouse, 1,496 square feet, 3 bedroom, 2.5 bath, end unit, 2 car garage, HOA is only $158 per month! View the virtual tour here. Address is 3234 Lago De Como Place, San Jose, CA 95136. Call me to tour as soon as possible!

Absolute NNN California Burger King

Walmart pad ABSOLUTE NNN Burger King with 9 years left on lease. Built in 1998, this Burger King is operated by a master franchisee with 40 stores. Personally guaranteed by the franchisee. Currently $115,000 per year rent to landlord. Offered at $1,695,000. No landlord responsibilities! Perfect 1031 tax deferred exchange replacement property. Let's run the numbers on your single family rental or fourplex and see how much more you can get in income and without the headaches of management.

Great Neighborhood Bank Owned Duplex Santa Clara

Off Bascom and Newhall - very close to Santa Clara University, Westfield Valley Fair and Santana Row is a quality duplex now owned by the bank. 1,550 square feet, 2 bedrooms and one bath on each side. Shared two car garage. Upgraded kitchens and baths, hardwood floors, vacant units. This is a very nice duplex investment in a solid neighborhood. Nice, easy investment property. Let me show you the numbers and the area. $575,000. One more short sale duplex in the area too. May take a long time, but well worth the wait.

1031 Tax Deferred Exchange Strategies

Ron Ricard of Investment Property Exchange Services, Inc sent the follow article regarding current investors strategies paired with the 1031 exchange:

Investors are Buying

Today's educated investors are repositioning their investments and buying up "deals" during this dip. Purchasing at today's low prices can allow investors to have positive cash flow with single family rentals that, in some markets, are normally purchased primarily for appreciation. Investors are beginning to sell assets like apartment complexes, commercial and industrial properties and using the cash to exchange into multiple single family rental properties that will cash flow immediately. When the real estate market turns positive, these investors will be poised to gain maximum appreciation and will continue to reposition their real estate investments utilizing the benefits of a 1031 Exchange.

Some Creative 1031 Exchange Strategies

1. Sell commercial/industrial/retail properties and buy multiple single family rentals
2. Sell single family rental properties and buy desirable vacation rental properties
Many vacation areas are priced at record lows
3. Sell vacant land and buy single family rentals, vacation rentals or commercial/industrial/retail investment properties
4. Sell investment properties and buy a "dream" property that later can be converted to a principal residence
5. Converting from or to an IRC §1031 "Qualified Use" may offer tremendous favorable results

For your 1031 questions, Ron Ricard can be reached at 408-483-1031 or ron.ricard@ipx1031.com