Friday, January 30, 2009

Cupertino Schools Bank REO $264,900

Two story condo in Cupertino school district, 2 bedrooms, 1.5 baths, 1099 square feet for only $264,900! Low HOA dues of $295 per month. Great first time buyer home or strong investment property that will rent well. Nice condition, good location near 280 and Saratoga Avenue. Yes, Virginia, there is a Santa Claus - or - Yes, sweetie, there are deals on the west side!

Wednesday, January 28, 2009

San Jose NNN Dollar Tree for Sale

There is a great local NNN investment that just came available. On Story Road at McLaughlin in the heart of very dense retail development and renovation is a single tenant Dollar Tree on a new 10 year NNN lease. Offered at a reasonable 6% cap rate, the asking price is $5,128,000. The future upside is the 39,200 sq ft lot that the building is sitting on. The building was built in 1998 and has 4.59 spaces per 1,000 square feet or 55 parking spaces. If Dollar Tree does not exercise it's option to extend the lease in 10 years, the property will be well positioned to rent to another user. This is the time to get in to the San Jose retail market with a great location and great solid tenant. Call me for info!

Tuesday, January 27, 2009

Applebee's NNN Investment

3 year old Applebee's (I'm not a big fan of their food, although many people are)

20 year absolute NNN lease

Strong Missouri location adjacent to a Lowe's & Wal-Mart supercenter

54,000 square foot lot

7.75% Cap Rate

$1,185,000 price

These are the kind of strong tenant, great NNN lease term deals that are out there now for 1031 exchanges or straight purchases. Time to trade in the management intensive fourplex for a corporate rent check every month and higher net income.

Saturday, January 24, 2009

Loan Update from Tony Guaraldi of Intero Mortgage

Rates are up quite a bit this week as Fannie/Freddie mortgage securities traded lower six days in a row, which lead to higher rates each day. Things are abnormal these days with mortgage rates. Typically rates are influenced most heavily by inflation and demand for bonds. Lately it’s been different. Here’s why.

The lenders spent most of 2008 either going out of business, merging with other banks, or laying off employees to cut costs as business came to a grinding halt. All of a sudden the US Treasury starts buying mortgage securities from Fannie & Freddie at a low 4% coupon, and this action dropped interest rates in the beginning of December. The lenders were instantly slammed with new refinance business, and now are at the point where they can not keep up with work load. So when you have too many loans in your pipeline the best way to slow down the flow of new loans coming in the door is to raise your interest rates! But people are still applying! Raise them again! Let’s take some profits while we’re at it, we can use it!

The second phenomenon in this environment is the lenders are changing the way they price zero point loans. They are strongly encouraging borrowers to pay points to get lower rates by increasing the spread between zero point rates and 1.0 point rates. You will see this on the rate sheet for conforming loans. The reason for this is a buyer/borrower is more likely to keep the loan for a longer period of time if they pay the points to get the loan and have a lower rate. The bank loses money if the borrower keeps the loan for only a few months. To encourage the behavior they desire, they are pricing the 1.0 point rates much better than zero point rates. This is of course the opposite of what the client thinks they need, so it’s our job to educate them on the benefit of paying points and show them the large amount money they will save by investing in lower monthly payments. This is a generalization on the market right now, but there are exceptions to this rule.

The third thing holding back the jumbo/conforming rates from dropping further is the rule created with the 2009 Jumbo/Conforming loans. A given bank is not allowed to have more than 10% of all of its conforming loans be jumbo/conforming. That means that 90% of all their loans must be below 417k and only 10% and go up to 625k. Well there is such a huge demand for jumbo/conforming loans that the lenders maxed out of it in a couple weeks. So most of them have greatly increased the rates on jumbo/conforming to stop the new submissions from coming in. This will hopefully normalize soon as the bundling and selling cycle starts over, and jumbo/conforming will come back down again.

In order to minimize this risk for rate volatility, with Intero Mortgage we are signing up new lenders constantly. This is a big advantage of being a broker, and not just any broker. A broker with some good volume and professional loan officers who submit clean files and act with integrity. The lenders are starting to really realize that not all brokers are good to partner with, and they are being very picky about who they will do business with. This way we have a better chance of having a lender that is not “full” already and can be competitive for rates and turn times.

That’s all for today. Give us a call this weekend if you need anything. We’ll be around! Have a good one!

Tony Guaraldi
Mortgage Consultant

Friday, January 23, 2009

Top Ten Foreclosure Cities

1. Merced, CA

2. Modesto, CA

3. Stockton, CA

4. Riverside, CA

5. Detroit, MI

6. Fort Lauderdale, FL

7. Cape Coral, FL

8. Vallejo, CA

9. Las Vegas, NV

10. Sacramento, CA

Interesting that Merced is the top foreclosure city in the US. Why Merced? Perhaps because it was a hotbed for home investors over the last few years ever since the new University of California campus was chosen there. I saw a lot of people buy there with the expectation that some 30,000 students and faculty would greatly impact the value of real estate in that city. Just buying anything in any market does not guarantee you success. We may all agree that now is a good time to buy. What is more difficult is what location, property type, etc. is best to buy. Following the herd is also not wise. The herd was very present in Las Vegas too as seen by their 9th place ranking. The land of glitter had many non-owner purchases. These being the easiest to let go to foreclosure when times get tough. The strongest markets? - those that have very high owner occupant ratios. Look at the central bay area with ratios as high as 98% for owner occupied single family homes - now that is stability.

Thursday, January 22, 2009

Bank REO Purchase Addendum - Watch Out!!!

After a buyer makes an offer on a bank owned property, the counter offer addendum that comes from the bank or from the asset manager/servicer is interesting, for lack of a more nasty word! Little clauses such as: attorney fees for the bank to be paid by buyer if buyer loses their dispute, buyer's attorney fees to be borne by buyer if buyer wins! Evil, evil, evil. If buyer defaults on the purchase agreement, then the bank keeps the deposit without needing buyer to approve release of deposit from escrow (I hear retired Realtors turning over in their graves at that one - also to be known that Realtors never retire, they just sell underground dwelling into eternity). OK, yes, you can hear in my words that I am a bit upset at these addendum and the rough-shod take-it-or-leave-it attitude of the banks disposing of their inventory. My current buyer loses his job during escrow and the bank (to remain un-named - let's just say they are now owned by Chase...) decides to keep the family's $5,250 deposit. Nice, very nice...

Tuesday, January 20, 2009

Bank Owned Duplex San Jose

The following financial analysis is of a duplex that I previewed today. The numbers make good sense.

$399,000 list price for two 2-bedroom, 1 bath units in decent shape.
Assuming a purchase price of $380,000
Down payment of $76,000
1st loan of $304,000
payments at 5.25% = $1,450
Insurance, taxes and utilities = $550
Rent at $1,200 per month per unit
$400 monthly cash flow

Not a bad little investment at all!

San Francisco Apartment Building Deals

The core rental markets in San Francisco have always been great areas in which to own. Due to the softness in certain other markets such as the single family rental home sales market, the buyer demand of small apartment buildings has lessened. Fewer sellers of rental houses are initiating 1031 exchanges and then looking for small apartment buildings to trade in to. If you have the ability to buy in this market, it very well may be the best time to get into the SF rental market. I have seen very nice buildings for prices not seen in a long time. Two such deals in Nob Hill and the Inner Richmond stand out with asking prices in the $260 per square foot range. Prices at $1.6M - $1.9M. And... rents are very healthy! And, and... interest rates are way low! Time to take advantage of the deals out there. Call me to run the numbers and see the opps.

Thursday, January 15, 2009

Bank Owned Cambrian Home

Just on the market today is a beautiful 4 bedroom and 2 bath single story home. Prefect for first time home buyers. Large front and backyard, spacious and bright living room, open floor plan. Nice and quiet neighborhood. Great location, easy access to major freeways, close to schools, parks and shopping's. Must See! List Price $534,900

Home Buyers Workshop Thursday, Jan 15th

Wednesday, January 14, 2009

Willow Glen Duplex Listings Under $450,000

Live in one and rent out the other, or rent out both. Either way this is a great deal for an investor or first time home buyer. Willow Glen has some really great bank owned duplex listings. We have four currently on the market all asking below $450k. Very close in distance to Downtown, transportation, and freeways. Now is your chance to make a great move. If your interested in finding out more information regarding bank owned properties or one of these duplex listings I mentioned please contact me mario@interorealestate.

Cambrian Bank Owned Home

Very cute bank owned home with a lot of potential to make your. Nice lot and home that has lots of space. The 3 bedroom/ 2 bathroom has a very large floor plan and fireplace in living room, kitchen and dining area combo that leads to back yard patio access. List price $515,900

Tuesday, January 13, 2009

New Condos San Francisco

There are some very good investment opportunities in new San Francisco high rises these days. Rents are up and holding their prices well while sales prices are down especially in the newer communities near the Bay Bridge and the ball park. If you compare annual rents to purchase price (the GRM), that ratio has become significantly better. GRMs unheard of in San Francisco for decades. Call me for some great investor deals with good equity upside in the future.

Monday, January 12, 2009

Excellent location in the Villa's, just walking distance to Santana Row's upscale shops and restaurants. Very nice sized 3 bedroom/2.5 bath with large living and dining room. Very clean and bright home. Good sized fenced and landscaped rear yard. We are currently tracking this excellent bank owned deal listed for $724,000. If you have additonal questions please contact my assistant

Sunday, January 11, 2009

South Lake Tahoe Bank Owned Homes

I just took a trip up to south shore Lake Tahoe to see the inventory of bank owned homes. There are some very nice deals up there. My focus was on the sub $400,000 price range, single family homes all near Stateline, Heavenly Ski Resort and the lake. Of course, everything in south shore meets these requirements. There are very nice homes selling at or near $200 per square foot prices. Some that take a bit more work are in the $150 per square foot range. These homes are selling significantly below what the market was a year ago ($300 per square foot range - with many homes still listed at those prices). If you have an opportunity to invest in this market, you will be very happy a few years from now. Let me know if you want to see some of the standout opportunities that I saw.

Monday, January 5, 2009

Great Bank Owned Homes for First Time Buyers

Great opportunity for first time home buyer or investor! Charming Cambrian home in a wonderful neighborhood. Close to all services including schools, parks, shopping and transportation. Corner lot, 4 bedroom/2 bathroom house! Recently remodeled kitchen with granite countertops, hardwood floors, dual pane windows, recessed lighting,newer electrical panels . Bank owned. List price $449,900.

Nice 3 bedroom 2 bath bank owned Cambrian home with an extremely low listing price. This home has updates throughout, very close to schools, shopping and freeways. List price $378,900.

Willow Glen Bank Owned Duplex

Spacious Willow Glen duplex for the price of a single family home. Live in one and rent out the other! Unit #1 3 bedroom/2 bathroom, upgraded, Unit #2 is a 2 bedroom/1 bathroom. Each unit has a fireplace and laundry facility. This home is just walking distance to banks, shopping, restaurants, schools and churches. Don't let this one pass you by. List price $589,000.

Santa Clara County Market Update Week Ending 1/1/09

Here is the Santa Clara County market update week ending 1/1/2009. To view larger picture of diagrams please click on the picture below.

Bay Area Apartment Brokers Forum

Group: Bay Area Apartment Brokers Forum - Established 1986 - (23 Years)
Guest Speaker: Kari Noomen-WaMu - J.P.Morgan Chase - The Noomen Team
Topic: Financing Multi-Housing Properties2009
Date: Wednesday, January 14, 2008 - 8 AM
Place: First American Exchange Company, 1737 North First St., San Jose ---- 4th Floor
Breakfast: Continental Breakfast - no charge - First American Title/Exchange
Chairman: Richard Domich - CB Richard Ellis
Vice Chairman: Keith Suddjian - Cornish & Carey
Membership: Kari Noomen - WaMu - J. P. Morgan Chase
Sponsor: Mary Kay Kennedy - First American Exchange

Note: All present will have an opportunity to present their listings, buyer requirements, as well as their analysis of current events and market trends that directly effect the multi-housing (apartment) industry in Silicon Valley and greater Bay Area.

Adjournment: 9:30 AM
Feb. 11, 2009 Larry Souza - Bay Area Multi-Housing Overview 2009
March 11, 2009 Ric Russell - The Future of Multi-Housing Brokerage 2009