All Forum Posts by: Ray Mulli

@Mark Shaffar I'm aware of Calhoun Ventures and  I know they are now looking to Iowa for deals. 

I just love the twin cities and I think opportunities still exist here if (when) approached from a different perspective.

http://www.bloomberg.com/news/articles/2015-06-08/...

404 error...sorry...here your go:

http://www.bloomberg.com/news/articles/2015-06-08/...

@Steven Johnson, @Matthew Berry, @David Huynh, @Travis Sperr......this just in:

www.bloomberg.com/news/articles/2015-06-08/cerberu...

Cerberus capital to buy 4200 rental homes throughout U.S.

Best.

@Matthew Berry, thanks for the compliment.

So, we are not in disagreement that REO's are trending up. For direct marketers (and i'm one if them) getting a slice of motivated potential REO sellers will become easier.

I've been contacted by a few that were too far gone in the foreclosure process for me to help. I have others that I'm helping. The houses are not rehab material, throw some paint and carpet and you get a turn key rental. Add into that mix tired landlords and you can see why this topic circles back to high rents mentioned by @ Travis Sperr and @ Steven Johnson, turnkey investments and buy and hold investors.

best

@Steven Johnson and @ Travis Sperr, your observations on rents is telling. I have focused more of my business on cash flow rentals and the buyers are other there. Had 2 inquires this morning.

My working theory is that as distressed property inventory increases, rents will go up.

Turnkey inventory is the new "rehab".

Check this out: Distressed property opportunities are surging in 2015. So where are they, and who’s buying?

While some newbie real estate investors that have gotten into the industry since 2008 have been griping about a lack of deals, the data shows there are even more distressed properties coming up for sale. In fact; according to the stats there are twice as many.

Rocketing REOs

While some appear to have forgotten there was a foreclosure crisis RealtyTrac reports that bank owned properties leapt up 50% year over year to April 2015. There are a lot more distressed properties in the works too. RealtyTrac reports an almost equivalent number of pre-foreclosures and auction properties too. The Mortgage Bankers Association reporting commercial and multifamily delinquency rates reveals that the number of Fannie Mae loans that were 60+ days delinquent almost doubled in Q1 2015 as well. Many of these are properties which aren’t even included in foreclosure figures yet.

California Foreclosures and Fast Growing Markets

It’s no secret that California has been one of the fastest rebounding housing markets in America. In fact, it dominates Realtor.com’s recent list of the hottest US real estate markets; claiming 10 of 20 places. Yet, even in CA where property prices are up, and days on market are shrinking RealtyTrac says bank owned REOs have climbed even higher; by 74%.

Demand is up too. Online listing portal Realtor.com says visitor numbers have doubled in 2015. So more distressed properties are coming down the pipe. But there are plenty of buyers eagerly looking to snap them up. These are perfect conditions for real estate wholesalers that can virtually flip an unlimited number of house deals using transactional funding.

Best,

aluta continua  

So I have been talking to fellow investors in Minnesota and the once hot rehab market has dried up! Yet I'm still seeing 'cash buyer' signage when driving around.

I welcome observations from others in Minnesota. We are not a feisty bunch like those in DFW area, but then again, that is a red hot market.

@David Wiser for a 1.5 million multi family, you need $300K down. What you want to have in reserves will depend on if you want to hire a property management company to collect rents,etc or if you'd do that yourself. Also, the condition of the property will influence reserves.

Are you actively looking?

Thanks,

Ray

@Blake Reynolds, I would also recommend you get J Scott's book located in resources under FilePlace.

Best. 

The Best of Times May Be Now

Local industry observers agree: the Twin Cities rental market is humming along smoothly with all the usual health indicators still flashing go. High rental and investor demand continues to fuel the market. Sales prices are at record highs in well-located areas, and lenders are awash in capital. The downtowns remain the hot spots for new supply and high rents, but the metro market overall remains a top contender nationally as it has for the past few years.

How long will this last? Reports vary about specific timing and to what degree, but a gradual cooling of the market is anticipated sometime this year and through 2016.

"What goes up usually comes down," quips Tom Cooper, MBG's founder and principal broker. "The tax reform of 1986 and the 2008 housing crisis are major market corrections still vivid in our minds.”

No one expects a crash landing, but some atmospheric changes in the metro market are becoming increasingly palpable says Cooper.

Interest rates are poised for adjustment. Interest rates affect property demand and prices. After close to six years of historically low rates, and with an economy growing every year, the Federal Reserve is expected to allow modest increases to the rates to achieve a more normalized level. Mortgage lenders in a recent Forbes article predict a range from 4.5 percent to 5 percent rate by year end.

Apartment construction is slowing. Development has been one of the strongest indicators of the health of the Twin Cities multifamily market, especially in the urban areas. Lower new unit projections for 2015 suggest that pent up demand might be easing. Last year, close to 5,000 new units were built in the Twin Cities metro. Total new units predicted this year are considerably lower at 3,500 (Marquette Advisors).

Property taxes rising with higher values

A valuation increase is the most common factor affecting a rise in property taxes. In the past three years, new apartment assessments in Minneapolis jumped to more than $600 million an increase of 7.5 times. The apartment market value in Minneapolis grew 27.8 percent in 2014 compared to 2013.

“A change in any one of these market factors influences the others.” Cooper says. The mood in the market is still highly optimistic, but with some slowdown expected, now might be the best time to buy or sell, which means it’s a good time for brokers as well.”

Source: Minnesota Brokerage Group.