All Forum Posts by: Mike Denham

Ken, competition and fairness have NOTHING to do with tax rates. Don't get me started.

I worked for one of the "good lenders," Wells Fargo, during the subprime rise and fall. I was on the wholesale side for the lender selling their products to brokers. I dealt with investors a lot and saw hundreds of "stated, no-ratio, and no-doc" loans go across my desk. That entire division is now gone but the way people still talk about subprime and Alt-A mortgages is frustrating.

That article, from the NY Times, talking about stated loans, said "...which did untold damage to the economy."

That's a distortion of the truth, at best. The "mortgages" and those who sold them are demonized, but a basic understanding of how mortgage products are developed shows who the real culprits are: the big banks who turned around and got bailed out by the government.

The banks not only supply the money to the lenders, but they say what GUIDELINES can be used in order for that product (mortgage) to be sold. The biggest banks in the US created those mortgage products. They weren't created by brokers and they weren't created by lenders.

There are some bad apples in EVERY business, but blaming the demise of the economy on a PRODUCT, which is what a mortgage is, is insanity.

Remember the Firestone scandal a decade ago? Tires were unraveling on the interstate. If the driver of an SUV was in an accident and someone else died because the tires were defective and installed wrong, would the driver be prosecuted for manslaughter? Of course not. This man being in jail is nuts.

Banks playing God is what "did untold damage to the economy."

I'm going to say it's all about your market. Here in BR, remodeled homes always sell fast and for the most per foot compared to the comps. If it's remodeled an not in an outlying area, then closing costs aren't necessary most of the time. There are other parts of our market though that are driven by 103% financing from Rural Development and those sellers almost always offer 3-5K in closing costs. So, I'm inclined to agree with J Scott and say it depends on where you're selling compared to the rest of the market.

I thought they only did that in Louisiana. LOL! Seriously, I was surprised to see this. My first experience with flipping, back in 99, was with a house I moved. It was what we call a "pier & beam" home locally. Many of them in older parts of Baton Rouge & New Orleans are built off the ground this way and because of the water tables, we don't have basements.

I moved one a good distance after I got a perspective appraisal on a lot with this house on it with the improvements I had in mind. Since I was gutting it, the effective age was "0" and I had a house marketable at $93K that I had a total of $44k in it before improvements!

In this case, it was my first flip, first remodel, first everything and I got ripped off by a contractor after underestimating the amount of time it would take to do the work myself. In the end I made money on it and sold it to someone else who finished it for $62K.

You asked for suggestions and I would say it depends on the construction style of the home and how it's moved. With a home built on piers, like some are here, a smaller home can be moved in one piece if it's small enough. Mine had to be cut in half and I don't recommend that. I'd never do it again that way.

On a side not, I know people who have put two or more homes together and had quite impressive results. At the end of the day, it's about the homes, how old they are, their construction style and how they are moved. Since I'm not in your market, it's hard to speak to.

I can't speak for New Orleans, but I can speak to the BR market. Investor activity, as best I can tell is low here and I see a ton of opportunity. Louisiana is #2 in the nation when it comes to foreclosure deals. While our foreclosure and shadow inventory isn't through the roof, there are fewer investors, so the properties go for less. The last numbers I saw indicated we were the state with the second largest difference between the price of regular sales and the price of foreclosed homes. The bigger that gap is, the better deal you get. I think you get the picture. Also, there's a shortage, from what I see, in the number of agents that want to work with investors. Most people don't like numbers. Point is, I see deals here that sit on the market for two weeks that would be gone in other markets instantly. Just my two cents. But I'm on the inside, in Baton Rouge, so my two cents is worth more like a dollar fifty. LOL!

I'm no longer an iPhone guy but when I had mine I had a CoreLogic app that did AVMs. In our market (Baton Rouge) it was scary how accurate they were. In every market data is different, as is what access they have to that data. Like in any case though, I can imagine that in situations with little or no sales, when a traditional appraisal is difficult, that any AVM software would have issues.

I found this forum because of this index. I'm in a market that's full of agents that consider research and analysis something foreign. I call that opportunity. :) Anyway, I've compared this index with our local sales and it corresponds almost exactly, with a few anomalies here and there. One thing it does illustrate, and this is one way I use it, is to show the relative number of buyers and what times of the year they are and aren't active. For instance, the week after July 4th, is, according to this index, the height of interest in the market every single year. You can also look at the history and see that the index consistently follows a pattern based on holidays with Christmas being the low every year.