Hilton Anatole, Dallas TX/September 7-11 2013
SERIES/topic
Agenda topic 5
Star REO Certification
Discussion/Conclusion: Saturday to Sunday afternoon I spent
in training for an REO Certification that allows me to list foreclosure
property with Banks and Asset Companies.
The teacher was an awesome asset to the class as he also teaches boot
camps, one on one and coaches companies around the country. He’s been a home preservation person with
Safeguard for many years and speaks on behalf of them.
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15% of all real estate in the US is bought by
hedge funds, soon to sell and dump on the US market
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Next step, REIT/Hedge Fund world! The US is becoming a rental market!
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The majority of the market is diversified into
FDMC/FNMA/HUD homes
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4+ MFU have too many benefits to sell! A must keep right now.
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GSE’s seeing higher return at Auction now hence
the movement into Auction style selling, No more bulk buying
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Ask local MLS to add Virtual Staging Button!
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Smell = 20% reduction in price
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If Lower than 3 months of inventory banks add
30% more in pricing
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FHA no longer needs a closet for a bedroom!
(Door & Window needed only)
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2 great marketing ideas, (Bra/Sock)
Action items
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Person responsible
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Deadline
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Consideration of aligning with large
Asset companies for listing REO properties
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2014
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Met Bubba Mills, CEO of Corcoran
Consulting who speaks around the country on Home Preservation
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Agenda topic Investment
/ OwnAmerica, Greg Rand, CEO
Discussion/Conclusion: OwnAmerica is a real estate trend
data selling company that guarantees experienced people on the ground level
working to provide top data that is informative and reliable to investors
trying to stay ahead of the market trends.
Action items
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Person responsible
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Deadline
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Opportunity to work with Rand for
California on ground level gathering data for their algorithm.
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Christine
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ASAP
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Agenda topic Rennovation
Innovation
Discussion/Conclusion: REO/Property Preservation class to
prepare for the next wave of REOs in the US.
88% of all notes in the US are backed by Government Service Entities
(GSEs), making it imperative to have an REO repair strategy in place to
maximize their returns. Speakers
reviewed strategies for both repairing vs selling as is. Biggest problem they are experiencing is mom
and pop home preservation companies stealing them blind and not providing the
proper repair to the home. The 2nd
biggest challenge is communication amongst the team of individuals attempting
to fix these homes (Lender, Realtor, Sub Contractors, Asset Managers,
etc). FHA has list of guideline repairs
that are standard for their homes
Action items
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Person responsible
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Deadline
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QC a Must, No ability now, Fraud
continues to be High/Present
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Communication
System needs to be created for QC
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Acquire
FHA Standard Repair List
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Agenda topic The
Emergence of Short Sale Auctions
Discussion/Conclusion: There is a movement by the top 5
banks to sell short sales in an auction format creating more of a streamlined
environment for buyers and sellers while maximizing net proceeds for
themselves. On the ground level it is
still met with hesitation by the realtors while the banks love the relationship
between identifying top dollar for their assets and keeping the realtors
honest. HUD is engaging the auction
options and Ocwen is trying to push end users from Zillow, Trulia and sites
such as these to Auction.com for purchasing.
Their goal is not to remove the realtor as much as work together
simultaneously. Auction.com will
continue to modify their website to provide for a more streamlined approach,
the true challenge is in the rates charged on both sides of the transaction (5%
Buyer/6% Seller/Mktg Fees to Seller).
Their intent is to remove marketing and advertising costs that would
otherwise be placed upon the realtor.
This idea was utilized primarily to stop the undermining of realtors
selling property under the table prior to the listing making the MLS.
Action items
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Person responsible
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Deadline
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Potentially align with Auction.com
type companies to sell luxury homes
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Short sales still high in most
states in US
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Agenda topic Investment-James
Lockhart III, former Fed Housing Finance Director
Discussion/Conclusion: Noted 70 Billion in REO to Rental in
the market right now, 10.7m still underwater… which will become short sales. Most assets are going to the secondary
smaller guy market. $5.5 Trillion owned
by FNMA/FDMC, of which 86% is Single Family Res & 71.8% Multi Family
Units. Determining where FDMC/FNMA is
critical , market needs discipline , stronger capital, there is a need to be
Counter Cyclical.
Senate House
GSEs Wind down
in 5yrs Receivership
in 5 yrs
Investors Protected Protected
Affordable Housing Repeated Repeated
Conforming Loan
Limits $417k reset Hi/Lo Lower than $417k
FHFA FMIC,
Insurance & Regulator Retained
with authority 1 mtg
utility
platform
Gov Mtg Backed Sec
Guar FMIC if 10% loss retained or NOW
Insured
to be funded by premiums
FHA No
change New
industry FHA reform
Right now Obama backs the Senate bill which means higher
premiums, lower amounts insured when house prices get out of line with
historical trends, construction costs & rentals. Essentially FMIC steps up when the bubble
bursts to protect from another disaster.
We are going back to private
label mortgage backed securities. Of the Banks, 500 closed, 1800 disappeared,
in the future liquidity will be contingent on capital in the marketplace along
with Bonds. It will also depend on the
new Fed Chair and the outlook of that person, potentially Larry Summers at this
time. Jumbo loan limits will hurt the
high end homes the most as they will begin to lower; anticipates inflation to
be moderate to long term.
Also reported slow economic growth, less people seeking
jobs, employment weak, banks undercapitalized.
Global markets uncertain of our real estate market, China, Middle East,
EU, emerging markets are trending on US market.
19.8% of US market still distressed and we have a way to go in Short
Sales and REO business as a whole as of Mar 2013.
Action items
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Person responsible
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Deadline
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How do we create a Distressed
Property niche!
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Do we need to be concerned about
future liquidity?
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Agenda topic FNMA
Update
Discussion/Conclusion: Mortgage fraud still huge in US. They have NO intention in working with
Auction.com.
Action items
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Person responsible
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Deadline
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Go to Home Path website to become
REO agent
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Agenda topic REO
to Rental Strategies
Discussion/Conclusion:
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Investors love short sales
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Prediction of short sale volume to be up across
the US
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Boots on the ground approach is important
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14 Million rentals in the US
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Build a Team! Must have Appraiser/HUD specialist/Code
Enforcement/Realtor/Attorney/General Contractor/Property
Manager/Wholesaler/Title/Hard $ Lender/Photographer/Gardner
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Diversify your portfolio SFR/MU/Condo/Townhouse
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Most difficult risk for most is the FIX
(FIND/FUND/FIX/EXIT) people don’t understand cost!
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Get smart about market selection, check changing
market & neighborhood trends
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Investors like bulk sale purchases
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Rent to Net Income ratio most important
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Houston/Dallas only two markets who have not
seen double digit returns
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Mom/Pop still largest investor in US
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Redevelopment to Lease is the hardest challenge
for the investor (Trust in rehab & property mngt)
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3/2 1500 sq ft most profitable & 2/1
conversions to 3/2
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$2500 avg payout for GSE/$12,500 avg for private
asset holder ($7500k to 25k)
Action items
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Person responsible
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Deadline
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How do we be the FIX they are all
looking for?
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Agenda topic From
Rehab to Renter Occupied
Discussion/Conclusion:
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Don’t move towards the Heat Maps because that’s
where everyone buys!
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Looking for 20% ROI
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Cap rates,
8 – 11%
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$7,500 average fix for GSE, $12,500 for Private
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Target 1978 or older for renovation
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Investment companies have slowed down on buying
& moved to leasing – waiting for appreciation
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HVAC maintenance done by fund
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Compliance issues important
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General Home Inspector/Recurring Services,
Eviction Attorney & Preservation Unit really important
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Funds move in/out and go to the next best city (
Typically 6 – 7% Bulk Investor/8% Hedge/14% Specialty)
Action items
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Person responsible
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Deadline
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Target Bulk Investors, Hedge Fund
& Specialty Funders
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Agenda topic FDMC
Super Fraud Session
Discussion/Conclusion:
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Newest fraud happening is people using false
names & property addresses that are false
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People are placing liens on homes in order to gain
$
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Flipping Scheme – realtor & service agent
working together, secured 2 offers ($158k/240k), lower offer taken, deed
restrictions taken off, 2 sales simultaneous same day, 82,000 profit split
between realtor and service agent.
Action items
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Person responsible
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Deadline
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Agenda topic New
Ideas
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Realtor/Private Investigator services in
locating vacant property owners
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Become a Home Preservation Company that is
Minority Woman Owned for marketability
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Connect to OwnAmerica to open the California
market for data
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Reach out to auction sites or start an auction
company for Luxury sales
Resource persons: Bubba Mills,
Corcoran Consulting; Greg Rand, Own America; Anthony Pellicane,
Anothony-Joseph Private Investigations , Charlie Engel, Auction.com
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