Renters welcome: But they won’t cover your mortgage
Within the current market conditions I come across a number of wanna be property investors. They attend and buy foreclosure seminar products with the old sales pitch of buying low and flipping at a new market value. What these wanna be’s don’t realize is the people selling these products are disconnected with today’s market. They are disconnected from what the lenders are accepting. They don’t realize that all of the major lenders own massive local residential portfolios and it’s these portfolios that are setting the new market values. The idea that you can buy low and sell at a higher market value is gone for the time being. The local South Florida Real Estate market is declining at the same rate it appreciated through the boom. The professional property investor is looking at the annual return of the down payment on an investment. Take for example $10,000 of capital can produce minimal returns in an environment with falling interest rates and a rocky equity market. So the idea is to out perform the annual return the $10,000 would produce in other markets. The clear cut answer is income producing properties. Now that property values are declining income producing properties make sense on operating sheets. If structured properly one can produce 20-30% annually on the out of pocket costs to take control of an investment property. Rents make sense in these tough market conditions. Buy and hold and produce positive cash flow over the current economic and real estate down turn. This article in the Palm Beach Post further explains the current local South Florida market conditions. (more…)
One of 32 Miami-Dade homes in foreclosure
Over the past couple of months while working in the South Florida Real Estate Market I have noticed a large number of foreclosure, pre-foreclosure and bank owned properties. This activity is adding fuel to the fire of the declining price and sales activity within our local markets. I came across this article in the Miami Herald that displays current stats in Miami-Dade and Broward Counties.
Mortgage Fraud
Seven more arrested for mortgage fraud
Police arrested seven new suspects, accused of taking out loans on phantom properties and using stolen identities to get loans, as a Miami-Dade County anti-mortgage-fraud group unveiled a proposal for a law to increase criminal penalties for people convicted of real estate fraud.
The proposal would allow property appraisers to revalue assessments in neighborhoods plagued with fraud, where inflated values have driven up property taxes for nearby homeowners. It would also create a statewide anti-fraud task force or even a ”mortgage fraud czar” to coordinate statewide efforts.
South Florida Real Estate Boom?
Recently while debating with a family member about the prior real estate cycle verses current economic conditions, my family member stated that many have accumulated wealth in Real Estate during this Administration’s Economic policies. I smiled and later that evening I picked up one of my favorite books (Empire of Debt by William Bonner and Addison Wiggin) to review a chapter regarding Real Booms Versus The Phony Variety. I figured this might shed some light on the prior debate with my beloved family member, and after reading a part of the 9th chapter, I found myself in a real mental debate. (more…)
Cash Back at Closing Investigated in South Florida
Recently, I have been noticing a large amount of sales in my market closing at higher sales price than list price. I this find alarming as our market is correcting and the typical informed buyer is not willing to pay above list price. This article recenlty featured in the Palm Beach Post explains what is going on in the South Florida Market. As a buyer, make sure that your appraiser is not utilizing sales of this nature in their reports when estimating your market value. For more information on appraisal services visit: www.FastFloridaAppraisals.com
Slow housing market speeds up scam
Predatory buyers are borrowing more than what a house is worth, pocketing the difference, then foreclosing.
By JEFF OSTROWSKI
Palm Beach Post Staff Writer
Sunday, October 28, 2007
Even after the South Florida housing market peaked in 2005, Johnson Cuffy knew how to score big profits in real estate. First, the Broward County real estate investor found a Fort Lauderdale house for sale for $245,000. Then, inflated appraisal in hand, he convinced the lender that the home was worth $340,000.
Cuffy, a 29-year-old who works with his father and siblings at a family-run mortgage company, landed a loan for $340,000, paid the seller $245,000 and pocketed the $95,000 difference, state investigators say. Profits secured, Cuffy let the home go into foreclosure.
He was arrested in July after the seller alerted officials to the scheme.
