Miami “Preconstruction” Condo Flippers Drown in Glut | By Wolf Richer Wolfstreet

Because there have been zero resales, “the actual market value of the units in the project is uncertain.”

Miami, particularly near the waterfront, has experienced one of the hottest post-housing-bust construction booms in the country, creating a veritable mecca for “preconstruction” condo flippers – often institutional investors – that are trying to make a buck. The construction boom is quite a sight to behold, still, as seen from a cruise ship, where crane counting might while away the time. This photo, taken by Matthew Brandley, shows the rising condo towers in the New Edgewater area:

That this might eventually create a supply problem is clear. Alas, “eventually” got here in a hurry.

Brickell, an area that is part of Miami’s “condo corridor” by the waterfront, is just an example, similar to New Edgewater above. Andrew Stearns, founder of StatFunding, who analyzed the Brickell condo area – more on that in a moment – mused about the New Edgewater area: “There is an unprecedented glut of new preconstruction condos coming to market there too, but different neighborhood.”

Interesting things are starting to transpire in Brickell. Among the newest condo projects is Bond Brickell, a tower with 328 units, completed in August 2016. The analysis by StatFunding found that the 318 units (97%) that have been sold look good on paper, but…

• The developer is still sitting on 10 units. Of them, four are listed for sale on the Multiple Listing Service (MLS).
• Many of the sold units were acquired by “preconstruction” condo flippers. 69 of these units are now listed for resale on the MLS.

Thus a total of 79 units are either listed for sale or still owned by the developer. That’s 24% of the total units. To attract potential buyers, 14 of these units have been listed for sale at a loss after the standard 6% commission.

And yet, there have been zero sales reported on the MLS.

Preconstruction condo flippers make a leveraged bet. They buy condos from the developer during the construction phase with a small deposit and make additional payments as construction progresses. In a booming market, lenders are eager to extend these short-term loans. When the building is completed, the preconstruction flipper closes the sale and then tries to unload the condo at a profit.

During good times, developers sell all their units either to end-users or to flippers within a few months of completion. But now, developers are getting stuck with unsold units, and flippers cannot flip.

But Bond Brickell isn’t the only new tower in the neighborhood. It competes with other towers that have just been completed or are going to be completed soon. This map shows those projects clustered around Bond In this list of the towers in the photo, the percentage in parentheses indicates “closed sales” as percent of total units in the project. Sales cannot close in projects that are not completed though buyers may have put down deposits on some of the units. Hence uncompleted projects (bold) show no closed sales:

1. Bond Brickell, 328 units, completed 8/2016 (97% sold)
2. 1010 Brickell, 387 units, to be completed 8/2017
3. Brickell Heights 2, 332 units to be completed 9/2017
4. Brickell Heights, 358 units to be completed 9/2017
5. SLS Lux Brickell, 450 units, to be completed 12/2017
6. CityCenter Rise, 390 units, completed 9/2016 (46% sold)
7. CityCenter Reach, 390 units, completed 4/2016 (88% sold)
8. Echo Brickell, 175 units, to be completed 5/2018
9. Le Parc Brickell, 128 units, completed 6/2016 (93% sold)
10. Cassa Brickell, 81 units completed 11/2016 (75% sold)

In the Brickell area alone, 2,547 condos are listed for resale. In 2016, only 1,017 sales closed. In Q1 2017, 227 sales closed. At the Q1 rate of sales, there is 34 months of supply.

This is what the Brickell “neighborhood” and its cranes look like from the street (photo by StatFunding.com):

And the plot thickens: Another 1,700 new units (in the list above) will be completed over the next 12 months within blocks of Bond Brickell. But here’s the thing, according the Andrew Stearns:

Because there have been zero resale transactions at Bond Brickell, the actual market value of the units in the project is uncertain. With 14 out of 69 Bond Brickell resale listings listed for a loss, asking prices indicate that Bond Brickell units cannot be resold unless sellers are willing to take a loss on resale.

And even then…. The fact that there have been zero resales so far at the Bond Brickell – and the competition hasn’t even fully matured yet – also indicates that the loss flippers have to take might have to be significantly larger than indicated by those asking prices. When prices drop enough, there will eventually be a buyer. But the price level where buyers come out of the woodwork hasn’t been reached yet.

Peak Rent? In the most expensive US markets, there are traces of relief for renters. Landlords scramble. But in some cheaper cities, rents soar.

How To Buy Foreclosures Properties | Investors Goldmine - Eugene Hoffman

investorsgoldmine.com/blog

Maybe you've heard about people making a living buying and selling foreclosures. It isn't something you want to just jump into. There are processes and strategies that are far different than buying a regular home off the MLS.

This article will let tell you what you need to know about working with the banks and how to buy foreclosures in [market_city]. 

What Type of Foreclosure Do You Want To Buy?

There are three stages of foreclosure, and each requires a different strategy.

1. First, you have the property in Pre-Foreclosure, or, more commonly called a "short sale." During this period, the current owner may still sell the home themselves in an effort to save them the pain of having the bank take their home. The homeowners are usually eager to sell but will want to recoup what they owe on the house so they are able to pay off the bank. Owners in this situation do not typically have much time until the bank comes knocking at the door, so you're able to find a great deal, and help a fellow homeowner save themselves from doing horrible damage to their credit.
2. Once a property is out of the pre-forclosure phase, there will often be a public auction of the home. You may have heard of this happening on the courthouse steps, and while some auctions are now done online, others are done in person, some still on the courthouse steps. Purchasing an auctioned home offers both great risk and reward. The bank can only get back what is still owed to them on the house, they are not allowed to make a profit. If you are able to find a hidden gem, you can find a great deal, paying the bank only a fraction of what the home is worth. However, you must remember you are buying as-is. Without a proper inspection, you could end up buying a home in need of extensive repairs or that in encumbered with liens.
3. The third type of foreclosure is a Bank Owned REO (Real Estate Owned.) This is the most common as it is typically the easiest way to buy a foreclosed property. The bank will want to get this property off their books fast, however, the home will still be priced close to market value. You can definitely find great deals, but make sure the costs to repair and maintain the home don't outweigh the deal you are getting.

Current listings

Work With A Pro

If you are in the market to buy a home for yourself or your family, and you want to find the best opportunities, you will want to work with a licensed realtor. They can help you to work with the bank, set your terms and navigate the process of purchasing foreclosed properties.

They can help you find deals as they become available, and help to steer you away from homes with potential problems.

However, at the end of the day, you are ultimately responsible for the home you buy. This is why you will want to have your own, independent inspection done if possible.

If you are looking to buy a foreclosure for a fast flip, you might want to think about partnering with a seasoned investor who can show you the ropes, or work with a company like [company] who can help guide you throughout the entire process.

About Eugene Hoffman

Get Your Financing In Order

Depending on the home, obtaining traditional financing might require you to jump a few additional hurdles. The banks are investing in you, and if the home appraises for a low amount, you might not be able to get the loan you're after. Many foreclosure buyers deal in cash.

A cash offer can speed up the process by avoiding additional red tape from another bank. Many foreclosure investors deal only in cash, making the process highly competitive.

Making Your Offer

Know your limits. Sure, you might pay a bit more if you are trying to buy a home you want to live in for the next 50 years. But if you are only looking to flip, you will not want to pay a dime more than you have to.

You must have predetermined price guidelines you stick to. You are better off losing a deal than losing money. The banks will often ask you to submit your "highest & best" offer.

In essence, this is the bank, asking for all interested parties to submit their maximum bid. If you've ever bought anything on eBay, you'll know those last few seconds, trying to get the highest price can be invigorating and stressful!

Don't get caught up trying to outbid what you think your competitors will offer. Stick to your price, and walk away if you have to.

At [company], our mission is to help you navigate the world of foreclosures and help you find a great deal. If you have any questions about the process, or if you would like to receive early access to deals, fill out this short form, or give our office a call now! [phone]

Making an Offer: 5 Mistakes to Avoid | DAILY REAL ESTATE NEWS | WEDNESDAY, MAY 10, 2017

eugenehoffman.com/blog

In competitive housing markets across the country, making an offer that sticks has become increasingly difficult. Ensure your client doesn’t make the process even tougher by succumbing to one of these common mistakes.

Delaying

“Time kills deals,” says Andrew Sandholm of BOND New York Properties in New York. “Dragging your feet means you could wind up paying more in a bidding war situation or missing out on the property altogether.” Buyers need to be ready with their paperwork, such as bank statements, a preapproval letter, and documents supporting proof of funds, from the day they begin house-hunting mode. That way they can pounce quickly with an offer when they do find a home they like.

Making an offer for their preapproved amount

Smart buyers are getting preapproved to show a seller they’re financially able to purchase a home. However, Chuck Silverston, principal at Unlimited Sotheby’s International Realty in Brookline, Mass., warns buyers against using that document to come up with an offer amount.

“Many buyers come in with a preapproval for the exact offer price, but when you’re competing against other offers, including cash offers, you want to show financial strength,” Silverston says. “An exact preapproval could make a listing agent nervous because not only does the buyer not have any wiggle room to negotiate, but they might no longer qualify if interest rates rise.”

Submitting a lowball offer

Lowballing a seller often backfires, particularly in a seller’s market. “A lowball offer that isn't backed up with math or comparable sales data is disrespectful and could turn off the seller and possibly mean you will miss out on the property completely,” Sandholm says.

Waiving inspection contingencies

“I don't care whether it’s new construction or even your mom’s house you’re buying from her – get it inspected,” urges Joshua Jarvis of Jarvis Team Realty in Duluth, Ga. Further, if you waive the inspection contingency in your offer, you may lose the earnest money if you later back out of the deal.

Not presenting yourself well enough

In a seller’s market, buyers need to take steps to make sure they look good in the eyes of the seller. “In today’s highly competitive environment, the listing agent is trying to determine which buyer will be the easiest to deal with,” Silverston says. Buyers may want to avoid pointing out every defect, making nitpicky queries, or questioning the seller’s tastes.

“Basically buyers who act less than enthusiastic will see themselves at a competitive disadvantage when sellers are comparing multiple offers,” he says.

Current properties for sale

No Sale: Retail Jobs, Under Fire, Play an Important Role in Paying the Rent | By Aaron Terrazas on 5/3/2017

eugenehoffman.com/blog

By Aaron Terrazas on 5/3/2017  

zillow.com/research

• Department and general merchandise store employment dropped sharply during the first quarter of 2017.
• Almost 300,000 American households are dependent on the income from a retail job to cover monthly housing costs.
• Fayetteville, Ark., Dallas-Fort Worth and Indianapolis are the housing markets most at risk from declining department and general merchandise store jobs.

American retail workers had a rough start to 2017, with department stores and general retail shops shedding tens of thousands of jobs in Q1. And continued losses could imperil hundreds of thousands of households that depend on the income from a retail worker to pay the rent or mortgage each month.

In the first three months of 2017, the number of jobs in department and general merchandise stores fell by 2.3 percent from the quarter prior, or 71,000 jobs, to 3.11 million – essentially erasing two years of growth in the sector, according to preliminary data from the U.S. Bureau of Labor Statistics.[1] The quarterly decline was the biggest such 3-month drop since early 2012.[2]

Retail Jobs Pay the Rent

Retail jobs, while declining, remain a critical part of the American jobs landscape. About 2.7 million U.S. households (2.3 percent) include one member who works in a department or general merchandise store. At the median, these workers account for 41 percent of their household’s total income.[3]

And in 1.1 million households nationwide (0.9 percent of all U.S. households, and 41 percent of the 2.7 million households home to at least one retail worker), the retail worker is the highest earner in the household. Typically in these households, the primary earner’s income accounts for about two-thirds of the household’s total income (according to the most recent data available from the American Community Survey).

A small majority (53 percent) of households in which a retail worker is the primary earner are homeowners, and 20 percent of these own their home outright (with the remaining 33 percent holding a mortgage). The remaining 47 percent (1.1 million) rent. Almost a quarter (24 percent, or 273,000) of these retail-worker-headed households fully depend on the retail worker’s income to cover monthly housing costs, unable to pay the mortgage or rent if the retail worker lost their job. A large majority of these households dependent on the income from a retail job are renters: 74 percent rent, and 26 percent own (with a mortgage).

Markets with the largest shares of households dependent upon a retail job to cover housing costs include:[4]

• Fayetteville, Ark.: About 3,800 households, or 2.1 percent of all households;[5]
• Dallas-Fort Worth: About 11,300 households, or 0.5 percent of all households;
• Indianapolis: About 3,200 households, or 0.4 percent of all households;
• Minneapolis-St. Paul: About 5,700 households, or 0.4 percent of all households;
• Kansas City, Mo.: About 3,300 households, or 0.4 percent of all households.

In all five of these markets, the majority of households dependent on retail income are renter households – ranging from 55 percent in Minneapolis-St. Paul, to 88 percent in Kansas City.

In general, the housing market in most of these areas has been strong in recent years. The median home value in Minneapolis-St. Paul surpassed its pre-crisis peak for the first time in March – in other words, homes in the Twin Cities area are more valuable than they’ve ever been. Similarly, the median home value in Dallas-Fort Worth is 37 percent above its pre-crisis peak; in Fayetteville, the median home value is 8 percent above its pre-crisis peak (home values in Indianapolis and Kansas City are still, on average, about 2 percent below their pre-crisis peaks).

It’s important to keep this data in perspective: Generally speaking, the number of households vulnerable to retail job losses is relatively small, and labor markets in even the most vulnerable communities are sufficiently diversified that some job losses should not spill over broadly into the housing market.

However, a not-insignificant number of families are likely to feel a pinch on the individual and household level if retail job losses continue.

Related:

• Close to Home: Why Stay-at-Home Parenting is Increasingly a Luxury
• Dismal Growth in Coal Country Home Values
• Occupation, Location & Preference: Why an Affordable Home to Me may not be Affordable to You

[1] NAICS codes 4521 and 4529. Data from the Bureau of Labor Statistics, Current Employment Statistics, preliminary April 2017 data.

[2] Between January 2012 and March 2013, department and general store employment fell by 4.3 percent, comparable to the 4.8 percent drop in employment reported from February 2008 to December 2009 during the depth of the recession.

[3] Includes industry codes 5380 (Department Stores and Discount Stores) and 5390 (Miscellaneous General Merchandise Stores). Data from the U.S. Census Bureau, American Community Survey, 2015 made available by the University of Minnesota, IPUMS-USA.

[4] Those for which we have sufficient data to assess household dependence on department and general merchandise store jobs.

[5] The very large share of retail-worker-dependent households in the Fayetteville metro is very likely attributable to the presence of retail giant Walmart’s global headquarters in nearby Bentonville, Ark. While many corporate Walmart employees may not hold traditional retail positions, weakness in Walmart stores themselves can be reflected in corporate layoffs, and so we kept this market in this analysis.

6 Tips For Moving Long Distance That Will Make Your Life Easier – Eugene Hoffman

May 7, 2017

By Eugene

More about Eugene Hoffman

Current wholesale properties

Moving can be tough no matter how far you are going. But moving a long distance can add additional stresses and a sense that you are jumping into the unknown.

To keep the process as easy and manageable as possible, we’ve put together some great tips for moving a long distance in FL.

1) Pack like a pro:

There are many clever tricks you can utilize to pack your possessions efficiently. If it makes sense in your situation, wrap up your clothes in dresser drawers. Don’t leave any loose space in boxes. Pack items within each other. For example, put your silverware inside your Tupperware. Wrap linens and towels up in black trash bags, and use them to pad boxes. It might not be glamorous, but it is a great way to be efficient, and efficiency is key when preparing for a big move.

Pack items within each other. For example, put your silverware inside your Tupperware. Wrap linens and towels up in black trash bags, and use them to pad boxes. It might not be glamorous, but it is a great way to be efficient, and efficiency is key when preparing for a big move.

It might not be glamorous, but it is a great way to be efficient, and efficiency is key when preparing for a big move.

2) Downsize: 

There is no better time than now to purge your belongings for your fresh start. Even if the new house is similar in style, you are not going to want to bring it all with you. If it isn’t something you absolutely love, now is the time to sell it or give it away. Often times people move with all their possessions, only to find months later they are still surrounded by boxes they have never unpacked. If it’s not something you love or need, you probably aren’t going to miss it very much. Also, if furniture costs more to ship than it’s worth, you might want to consider leaving it behind.

Often times people move with all their possessions, only to find months later they are still surrounded by boxes they have never unpacked. If it’s not something you love or need, you probably aren’t going to miss it very much. Also, if furniture costs more to ship than it’s worth, you might want to consider leaving it behind.

Also, if furniture costs more to ship than it’s worth, you might want to consider leaving it behind.

3) Take heed when hiring movers:

Always keep sentimental items and valuables, such as jewelry, with you if possible. For items of value, that you won’t be moving on your own, have the items insured in case they become lost or damaged. Make sure to mark boxes with name and address as many big moving companies will move several families items on one big truck.

Make sure to mark boxes with name and address as many big moving companies will move several families items on one big truck.

4) If possible, drive your car:

See the county (or state) and make it an adventure. Shipping a car can be expensive and can have ambiguous dates of arrival. Many shipping companies wait until they have many cars to move, before getting your car loaded up and on the road. Being in a new city, without transportation will get very frustrating, very fast.

Being in a new city, without transportation will get very frustrating, very fast.

5) Be prepared to buy some new things:

As with any move, there are always things you will inevitably need when moving into your new home. Think a new dish drainer, silverware organizer, paper towel holder and other similar items. Plan ahead and stash a little cash away for these purchases. You don’t want to add any additional stress to the move by worrying about buying the little things you will need to make your house a home.

Plan ahead and stash a little cash away for these purchases. You don’t want to add any additional stress to the move by worrying about buying the little things you will need to make your house a home.

6) Be patient and give it a week or two:

When you find yourself in a new town, it is more than just physically settling into your new home. You must settle in emotionally too. It will take a couple of weeks to really feel comfortable in your new town. Get to know the area, and do some exploring. Be patient and you will feel right at home in no time.

Get to know the area, and do some exploring. Be patient and you will feel right at home in no time.

http://www.cityoforlando.net/ Things to do

Are you looking to relocate without any stress? Give Eugene Hoffman a call now at (407) 781-7312 or fill out this form, and we will be in touch right away!

-AA+A Bad Credit Can Triple Home Insurance Costs | DAILY REAL ESTATE NEWS | FRIDAY, MAY 05, 2017

About Eugene Hoffman

Homeowners with a bad credit score can expect to pay double—in some cases, even nearly triple—what owners with solid credit pay for their home insurance, according to a new state-by-state study by insurance Quotes.

Policyholders with fair credit pay an average of 36 percent more than those with excellent credit, the study found. When a consumer's credit is poor, premiums can more than double, increasing an average of 114 percent.

“Many consumers aren’t even aware that, in most states, credit plays a significant role in determining how much you pay for home insurance,” says Laura Adams, senior insurance analyst of insurance Quotes. “So, even if you don’t plan on using credit to borrow money, it still affects your finances.”

Consumers in these states saw the greatest spike in home insurance premiums when their credit was poor:

• South Dakota: 288.1%
• Arizona: 268.6%
• Oklahoma: 248%
• Nevada: 235.3%
• Oregon: 234.9%

On the other hand, consumers in these states saw the smallest increase:

• North Carolina: 0.2%
• Florida: 25.7%
• New York: 29.3%
• Wyoming: 43.9%
• Hawaii: 53.1%

The list excludes California, Massachusetts, and Maryland, which prohibit the use of credit scores when setting home insurance rates, the authors note.

View the full report to see state-by-state rankings.

Source: insuranceQuotes 

6 Tips For Moving Long Distance That Will Make Your Life Easier – Eugene Hoffman

More about Eugene Hoffman

Current wholesale properties

Moving can be tough no matter how far you are going. But moving a long distance can add additional stresses and a sense that you are jumping into the unknown.

To keep the process as easy and manageable as possible, we’ve put together some great tips for moving a long distance in FL.

1) Pack like a pro:

There are many clever tricks you can utilize to pack your possessions efficiently. If it makes sense in your situation, wrap up your clothes in dresser drawers. Don’t leave any loose space in boxes. Pack items within each other. For example, put your silverware inside your Tupperware. Wrap linens and towels up in black trash bags, and use them to pad boxes. It might not be glamorous, but it is a great way to be efficient, and efficiency is key when preparing for a big move.

Pack items within each other. For example, put your silverware inside your Tupperware. Wrap linens and towels up in black trash bags, and use them to pad boxes. It might not be glamorous, but it is a great way to be efficient, and efficiency is key when preparing for a big move.

It might not be glamorous, but it is a great way to be efficient, and efficiency is key when preparing for a big move.

2) Downsize: 

There is no better time than now to purge your belongings for your fresh start. Even if the new house is similar in style, you are not going to want to bring it all with you. If it isn’t something you absolutely love, now is the time to sell it or give it away. Often times people move with all their possessions, only to find months later they are still surrounded by boxes they have never unpacked. If it’s not something you love or need, you probably aren’t going to miss it very much. Also, if furniture costs more to ship than it’s worth, you might want to consider leaving it behind.

Often times people move with all their possessions, only to find months later they are still surrounded by boxes they have never unpacked. If it’s not something you love or need, you probably aren’t going to miss it very much. Also, if furniture costs more to ship than it’s worth, you might want to consider leaving it behind.

Also, if furniture costs more to ship than it’s worth, you might want to consider leaving it behind.

3) Take heed when hiring movers:

Always keep sentimental items and valuables, such as jewelry, with you if possible. For items of value, that you won’t be moving on your own, have the items insured in case they become lost or damaged. Make sure to mark boxes with name and address as many big moving companies will move several families items on one big truck.

Make sure to mark boxes with name and address as many big moving companies will move several families items on one big truck.

4) If possible, drive your car:

See the county (or state) and make it an adventure. Shipping a car can be expensive and can have ambiguous dates of arrival. Many shipping companies wait until they have many cars to move, before getting your car loaded up and on the road. Being in a new city, without transportation will get very frustrating, very fast.

Being in a new city, without transportation will get very frustrating, very fast.

5) Be prepared to buy some new things:

As with any move, there are always things you will inevitably need when moving into your new home. Think a new dish drainer, silverware organizer, paper towel holder and other similar items. Plan ahead and stash a little cash away for these purchases. You don’t want to add any additional stress to the move by worrying about buying the little things you will need to make your house a home.

Plan ahead and stash a little cash away for these purchases. You don’t want to add any additional stress to the move by worrying about buying the little things you will need to make your house a home.

6) Be patient and give it a week or two:

When you find yourself in a new town, it is more than just physically settling into your new home. You must settle in emotionally too. It will take a couple of weeks to really feel comfortable in your new town. Get to know the area, and do some exploring. Be patient and you will feel right at home in no time.

Get to know the area, and do some exploring. Be patient and you will feel right at home in no time.

http://www.cityoforlando.net/ Things to do

Are you looking to relocate without any stress? Give Eugene Hoffman a call now at (407) 781-7312 or fill out this form, and we will be in touch right away!