PB Reed

by | Mar 25, 2012 | Bubbleinfo TV | 3 comments

I’m not sure you could pop units up on this lot, but would pencil as a rental property now, as-is – especially if you didn’t mind college students:

House of Hemp

by | Mar 24, 2012 | Interesting Houses | 7 comments

From the latimes.com:

Woody Harrelson championed the environmental benefits of hemp. Giorgio Armani and Calvin Klein incorporated it into their collections. Now a company promoting hemp as the eco-building material of the moment said it wants to build California’s first hemp house.

Hemp Technologies said it wants to use hemp-based materials to construct a 500-square-foot structure at the ruins of Knapp’s Castle near Santa Barbara. The castle, completed in 1920, was built for Union Carbide founder George Owen Knapp but destroyed by wildfire in 1940. Since then, all that has remained on the property are the sandstone blocks outlining the once-grand estate.

The principal material for the project is Hempcrete, made of the woody internal stem of the Cannabis sativa plant, which is processed into chips and mixed with a lime-based binder. That concoction is then sprayed on, poured into slabs or formed into blocks like concrete to create the shell of a building. Interior surfaces are plastered, and exterior surfaces are stuccoed.

“The walls are to be framed and earthquake-braced internally with lumber,” said Greg Flavall, Hemp Technologies’ co-founder, who added that “hemp is very close in cellulosic value to wood.” The material helps to keep structures warm in winter and cool in summer, he said.

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“Values To Fully Recover”

by | Mar 24, 2012 | Market Conditions | 10 comments

Gary is a long-time local real estate advisor.  http://londongroup.com/

By: Gary H. London

As published in the San Diego Business Journal, March 19, 2012

With signs of economic recovery finally promising to be sustainably good news, it’s time to reflect on what this means to the residential real estate sector.

In short order, it doesn’t mean much. Most of the for-sale residential real estate sector will lag in recovery. In the long run, the housing sector should fully recover, although new housing will be dominated by apartments and condominiums.

The first to recover has been rental housing occupancy. At its weakest in 2009, apartment vacancy was estimated to have been 7 percent to 8 percent.

That hasn’t lasted long. Rental vacancy now stands at 4 percent to 5 percent and is declining. Average rental rates have increased approximately 14 percent in the last seven years.

This is the undisputed stronghold of the real estate investment and development sector right now. Investment grade apartments have recently been trading at 5 percent to 6 percent capitalization rates, a metric indicating rising revenues and aggressive pricing. New apartment construction totaled fewer than 1,000 units last year, and we are on pace to add more than 2,000 units this year.

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No Short-Sale Surge (Yet)

by | Mar 23, 2012 | Inventory, Market Conditions, REO Counts, REO Inventory, Short Sales, Thinking of Buying?, Thinking of Selling? | 3 comments

With the tax exemption of debt-relief expiring at the end of the year, we keep thinking that there will be a surge of short-sale listings coming to market.

Not only is there NOT a surge of short-sale listings, there’s not a surge of ANY listings, relatively.

Here are the total new listings that came on the market in SD County between March 1st – 15th:

Year New Listings LP $/sf
2009
2,438
$269/sf
2010
2,918
$274/sf
2011
2,734
$258/sf
2012
2,262
$262/sf

Moneymaker or Publicity Stunt?

by | Mar 23, 2012 | Bailout, Ideas/Solutions | 8 comments

Hat tip to ProfHoff and Susie who sent in stories about the BofA “Mortgage-to-Lease” program:

Excerpts from wsj.com:

Executives last year began to ask themselves “isn’t there a way to sort of combine that whole process and keep the borrower in the property? It’s just better for the market,” said Ron Sturzenegger, the Bank of America executive who last summer was put in charge of the unit that handles troubled mortgages.

The initial pilot is limited to loans that Bank of America holds on its books. Homeowners can’t apply for the program—only those who receive letters from the bank can participate.

Borrowers would agree to a what is known as a “deed-in-lieu” of foreclosure, where they essentially sign over ownership of the property to the lender. This is less costly to the bank and also does less damage to a borrower’s credit than a foreclosure.

Borrowers selected for the program must be at least two months past due on their mortgage and face considerable risk of foreclosure. Bank of America is reaching out to borrowers who have exhausted other alternatives to foreclosure or who haven’t responded to earlier solicitations. Homeowners with second mortgages or other liens won’t be selected.

http://online.wsj.com/article/SB10001424052702304724404577297904070547784.html

Excerpt from cnbc.com:

“Pilot participants will transfer title to their properties to the bank and have their outstanding mortgage debt forgiven. In exchange, they may lease their home for up to three years at or below the current market rental rate,” according to a statement. The rent will be less than the mortgage payment and the (former) homeowner will have no financial obligations to the property, like taxes and insurance.

Bank of America will work through property management companies to handle the pilot. A Bank of America spokesman tells CNBC, “We’ll own the properties only in the pilot and only initially. If a decision is made to roll out a full program, Bank of America would not be in the ownership position at all.”

Banks Extracting “Excess Profits”

by | Mar 22, 2012 | Bailout, Loan Mods | 10 comments

Hat tip to evansea for sending this along from HW:

The nation’s largest banks are charging borrowers who refinance under the Home Affordable Refinance Program significantly higher rates than other types of refinance loans, according to Amherst Securities Group.

HARP 2.0, announced in November, introduced new benefits to servicers for refinancing their own loans. Different-servicer refinances received only marginal improvements, however, often requiring the new servicer to provide full representations and warrants on the new loan.

“This tends to lock a borrower into refinancing with their existing lender, which conveys tremendous pricing power to the banks,” Amherst’s Laurie Goodman says in an analysis of the program.

Under the program, different-servicer refinancings require servicers to gather more information about borrowers than under a same-servicer refinance.

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Rich Get Richer

by | Mar 22, 2012 | Bailout, Real Estate Investing, REOs for sale | 8 comments

Hat tip to SM and jpinpb for sending this along….from Reuters:

Dan Magder recently gave up a top job with private equity firm Lone Star Funds to strike out on his own and become a landlord.

He’s joining a growing list of big and small investors who see fat profits to be made in renting out foreclosed homes, especially now the U.S. government is moving ahead with a trial project to sell big pools of single-family homes that Fannie Mae currently owns in some of the hardest-hit housing markets.

Investors seeking higher yields are drawn to foreclosures because the rental market is red hot. But the heated competition for foreclosed homes is reminiscent of the frothy expectations that seem to accompany each new Wall Street investing craze.

Even proponents of buying foreclosed homes are advising caution about the kind of returns that investors can expect to reap and the potential negative headlines that can come with being a landlord.

Critics, meanwhile, contend the federal government is fostering a transfer of wealth of sorts by selling big pools of foreclosed homes to big fund investors and high-net-worth individuals. There’s also concern that some of the players who helped create the housing crisis will now benefit by buying foreclosed homes at a steep discount.

Between them, Fannie and Freddie Mac own more than 200,000 foreclosed homes. The nation’s banks own more than 600,000 single-family homes, according to RealtyTrac, a housing tracking service.

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