But he also brings up a curious thought – what if the investors re-sell the house, and carry the financing for the buyer? An excerpt:
Longtime readers know that I think the most interesting possibility is that companies like Opendoor, Offerpad, and others are looking at revolutionizing the home financing process by offering direct seller financing to buyers. That was premised on the idea that these guys would resell their loans as private label RMBS.
What if they figure out a way to just hold on to the loans and service them directly in some fashion?
If investors were selling re-conditioned homes and offering to self-finance the purchase, they could bring in a whole new set of homebuyers that can’t get a loan now. They wouldn’t finance just anybody, but they could pick up those who get left out of the current mortgage guidelines for silly reasons. If they had sensible guidelines, they could even become the go-to lender – you just have to buy their house, at their price, to get their financing!
Creating a new buyer pool could keep the party going for a few more years!
It was a crumbling Parkdale rooming house, populated by drug users and squatters and available on the cheap. We were cash-strapped, desperate to move and hemmed in by a hot market. Five years, three contractors and $1.1 million later, our home renovation nightmare is finally over.
We realize that our story could’ve ended up much differently. We’ve learned a harsh lesson: there’s no way to shortcut a reno; they cost a lot, period. If we had just listened to the advice of realtors, architects, designers, tradespeople and many friends, we would have avoided considerable stress and, well, $100,000 in debt. We were the victims of a shoddy contractor and bad luck, but also of our own colossal ignorance and hubris.
Anyone thinking of doing their own home renovations should read full story:
The list price was $729,900 – $759,900. It closed for $785,000 cash yesterday! The previous high sale on the street was $685,000 in December for a bigger house on the same side of the street. Congrats Tom!
Here’s a video tour of Tom’s latest project, and discussion about his business. The master suite in back was two bedrooms that he combined, and re-configured to create a large walk-in closet and right-sized master bath.
Note how he hit all the hot buttons: curb appeal, canyon lot, cantina doors, white kitchen with marble-like counters and high ceiling, great room, and quality master suite.
This will be for sale this weekend around $750,000:
A reader asked if there has been an influx of investors around Carmel Valley.
Buying an investment property is worth considering. Money sitting in the bank couldn’t be more idle, and the rents around the 92130 have been averaging $2/sf, which is pretty strong. We’ve heard that big investor groups have been active around the country – are they making a local push?
I checked the tax records of the 44 homes that have sold over the last 12 months in Pacific Highlands Ranch. These are primarily the detached homes with small yards selling in the $900,000s near Del Mar Heights Rd. and Carmel Valley Rd.
Of the 44 sales, only three had a mailing address that didn’t match the property address – a good sign that recent buyers have been mostly owner-occupants. Only two of the 44 paid all-cash too, and there were no corporate or partnership names as buyers either.
The combined HOA/Mello-Roos payments of $500+ per month probably prevent a decent cash flow for rentals that are financed. I doubt that Pardee or Taylor Morrison are encouraging investor buys either, so there are hurdles that would cause investors to look elsewhere.
But if they aren’t buying resales at the lower end of one of the hottest areas in the county, then their impact on the market elsewhere is probably limited too.
The owner-occupant buyers are willing to pay more money because they seek the additional value of securing a newer home in the best school district to raise their family. Investors aren’t going to pay more than owner-occupants any time soon.
As much as we’d like to believe that there could be nefarious actions at work to undermine our local real estate market, the more I look at it, the more it seems like we’re enjoying an environment driven by owner-occupants seeking a quality place to live long-term.
Though 3D-printed architecture is still in its relative infancy, we’re already at the point that printing a basic house is feasible. 3D-printing firm Apis Cor, in collaboration with development firm PIK, recently showed off the portable 3D printer it has developed by using it to build a basic structure of a 38-sq-m (409-sq-ft) home.
The actual printing process took 24 hours and is very similar to the other 3D-printed architecture projects we’ve reported on. Put simply, the 3D printer, which looks like a small crane, extrudes cement out of a nozzle in layer after layer to create a structure.
The machine didn’t do all the work, though. The roof, insulation, windows, and other components were all added later by humans. The total cost for the project came in at just US$10,134, not including furniture or appliances.
Reader socalbuyer had to send in this article about the Republicans threatening to tinker with the 1031 tax-differed exchange benefits – but who knows what will happen. If they do eliminate the 1031s, the extra taxation on sales of investment properties would cause fewer people to sell.
House Republicans are working on a proposal that, as part of an overall streamlining of the Internal Revenue Code and a reduction in tax rates, may eliminate or seriously restrict the use of tax-deferred exchanges — property swaps — under Section 1031 of the code. President Trump has identified tax revision as one of his top priorities, and legislation is expected to move quickly in the new Congress.
Loss of the ability to use an exchange would be a significant blow to “Mom and Pop” and other small-scale realty investors. According to a study posted on the website of the National Rental Home Council, there were 15.7 million rental homes in the United States as of 2015, and 99 percent of them were owned by non-institutional investors. A study by professors at the University of Florida and Syracuse University estimated that most exchanges involve relatively small properties; in 2011, 59 percent had a sale price of less than $1 million.
Exchange proponents, such as Suzanne Baker of Investment Property Exchange Services in Chicago, argue that most of the deferred taxes ultimately are collected when properties get sold for cash and that exchanges stimulate economic activity — redevelopment and upgrades of properties, for example — that would not occur if owners faced immediate taxes on their gains and therefore simply sat on them.
Bottom line: If you own investment real estate and have contemplated a Section 1031 exchange, be aware: There’s a significant possibility that tax revisions could knock your plans off track. Keep a close eye on what’s happening, because it could happen fast.
I have followed Jim’s BubbleInfo blog from the early days of the bubble when “real estate could only go up in value” and I knew him to be a straight shooter who would not sugar coat properties nor gloss over their faults.
So when we decided to move back to California after 7 years in the more “
Jim met with us prior to listing – provided guidance on preparation, detailed information and stats regarding local market conditions. He was invaluable for providing contacts for repair and improvements that would provide return on investment. Our combined efforts, strategy and his attentativeness more “
Jim and Donna Klinge are an impressive team. They work extremely well together and back each other up, as well as their clients, along every step of the way. Their expert guidance made a tremendous difference in the experience we had, both buying a new home and selling our previous home of 40 more “
Since Zillow only allows me to write 1 review per real estate transaction, per team of agents we worked with, this is going to be a super long review.Review on Jim Klinge:
Jim Klinge is the quintessential real estate agent, the “broker’s, broker” of real estate agents. My husband and I reached more “
by Louie and Tim Cook
Jim and Donna are the BEST of the BEST! Their knowledge, professionalism, work ethic, and devotion to their trade are unrivaled. It was refreshing to have worked with a pair of professionals who truly understand the meaning of customer service, a lost art in our opinion. Despite living over 3,000 miles away on the opposite coast, Jim and Donna were with us every step of more “
Jim found me a multi family property that we purchased as an investment (Please see my review of Donna Klinge for details on how it went). But the bottom line is this: I never would have found this property, which cash flows right out of the gate, if it weren’t for Jim pointing me toward that house. It just was not on my radar, even though I consider myself a savvy real estate troll. Jim is giving of his time, and his intelligence. And he is also transparent and truthful. And I think he is funny, which is helpful in stressful situations like RE transactions. Jim and Donna have earned every last penny they made from our deal — and in fact they deserve more. And that is why I will use them for my RE transactions the rest of my life. Thank you, Jim and Donna! more “
I can’t say enough about Jim and Donna. Jim got a great price for us and negotiated well. Donna walked us through escrow, handling vendors, and negotiating everything we asked for in the request for repairs. They are know exactly what they are doing and I’ve already recommended them to two other people. more “
I followed Jim’s blog for several years and decided to contact him (along with several other realtors) when an out-of-state work relocation required me to sell my home in San Marcos, Ca. At our initially meeting, Jim spent a significant amount of time discussing pricing options, strategy, as well… more “
Honesty. Integrity. Professionalism. Dedication. Commitment. Jim and Donna Klinge hold these attributes in abundance. They have acted as both our buyer agent and our seller agent delivering highly relevant insight into local market conditions, spot-on advice to maximize the home’s value, and unparalleled management of the transaction process… more “
I cannot imagine a better experience! Jim was our broker when my husband and I bought our first house. Jim never pressured us or glossed over anything. He was patient, knowledgeable, and helped us buy our dream home. His office was detail-oriented, always responsive and we closed in 30 days! The excellent service didn’t end when we bought our house, either, the Klinges have given us excellent and fast referrals along the way. We feel privileged to have worked with such a consummate professional and appreciate how rare this level of skill is. Jim is simply the best in the field. more “
Jim and his team are top flight. He knows the market better than anyone, and his team ensures the deal goes through without a hitch. There’s always something at the last minute, but you’d never know it with Jim and his crew. I’ve bought and sold houses with Jim as my agent over the years, and I wouldn’t use anyone else. Save yourself the headaches and potential costly mistakes… more “
Buying a house is one of the most emotional,exciting, and sometimes confusing milestones you’ll reach for in your life! Being a buyer in this market can make it even more interesting! My husband and I have been looking to buy for a year, and when the time came we wanted a realtor team that would be on our team! Being that I’m a business woman and was 7 months pregnant, I wanted, NEEDED, communication, dependability, and consistency! The Klinges went so far above and beyond … more “
Jim was recommended to me when I bought my first house here in the US five years ago. He and Donna explained the whole process and it was a great experience to work with them. Not surprisingly, when my company asked me to relocate my first choice was to work with them again… more “
I have followed Jim’s real estate blog for years and by the time I got ready to sell my townhouse I felt I knew him both personally and professionally. At our first meeting he was prepared with recent comps and listings for the area… more “
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