This Week’s Short Stories

Pending Home Sales Up

Pending home sales rose sharply in May. Low mortgage rates and increasing inventories helped. All four regions of the country saw increases. The Pending Home Sales Index increased by 6.1% in May. This is the largest monthly gain since April, 2010.

Minimum Wage Increases Make the Day for Mobile Home Park Owners

A statistic overlooked by many investors is the relationship between mobile home park values and the minimum wage. With the minimum wage at $7.25, a monthly income of around $1,200 mandates rent of roughly 38%, or $456 per month. While apartment project and single family landlords can rarely get their rents down to this range, it’s common for mobile home parks to provide housing for around $500/month.

Some Say Flipping is Hurting the Housing Market

The people saying that certainly aren’t engaged in flipping. Watching the house flipping “reality” shows on TV, it’s no wonder that everybody and their brother wants to jump into flipping. After all, it’s easy to grab up a dilapidated bargain, slap on some paint and new countertops, and sell at a big profit … right? Maybe.
Redfin pulled some average flipping profit numbers that certainly seem to bear out that it’s a major profit generator for many. The top 27 markets averaged $90,200 in profit per flip in 2013. California dominated the top of the list for average per-flip profit with:
• San Francisco $194,600
• San Jose $152,000
• Oakland $134,500
• Los Angeles $126,100

Pent Up Demand Not for Buying, Definitely for Rentals

Take a look at any recent or even past marketing or market-related reporting coming from NAR, the National Association of Realtors, and you’ll find that it’s always a good time to buy a home. Right now with dismal sales, a lousy economy, and almost no first time home buyers anywhere to be found, just where is the “pent up buying demand” that the industry wants so much to promote? By promising that demand is about to spike, it makes some people feel safer in buying and expecting prices to appreciate.
Unfortunately, almost no data exists to support this theory. People aren’t buying or selling homes for a number of fundamental reasons:
• They’re insecure in their jobs.
• They’re experiencing wage increases below the inflation rate.

$500,000 profit margin. YUP. Closing tomorrow. Oh, did I mention? NONE OF MY OWN MONEY! Oh, and in Los Angeles area.... Hmmm :)

Hello DG Family,
Well, I wanted to make an effort to get here to this site much more frequently. But, sadly that hasn't happened. I've been working on a deal for the past 11 months that finally has come to fruition. You know me..., its one of Tammy's crazy deals! A short sale with 2 loans that's a divorce with IRS and other liens. Yes, I attract the problem properties, don't I? But I'm not complaining. Laughing out loud I AM A PROBLEM SOLVER after all. And this one, I left in other's hands to resolve the problems while I worked on a few other deals.

This Week’s Short Stories

New Cities, but Also Moving Downtown
The first article in this issue addresses companies moving to attract younger workers who want a big city lifestyle. There’s another trend however, as in just about all cities all workers are moving closer to the center of the city and the activity. They’re leaving suburban areas and commercial buildings are beginning to go to empty status in the suburbs.

More Homeowners Becoming Landlords

Cash Home Purchases & Low Demand for Mortgages the New Normal

It’s not new news that a major chunk of home purchases are being made with cash. For several years now, there’s been a steady 30%+ of cash home purchases fueled by investor demand. This is more true than we can prove with hard numbers, as many deals over the past few years were “off the books” in a way. Investors were buying before homes hit the MLS, buying directly from banks, and thousands of homes were purchased in bulk deals. Many of these are not in the data that reports that 30% number.

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