Marketplace

King County Foreclosure Auction Statistics for December 5th 2008

Of those 203 properties:

• 11 were picked up by 3rd parties at the auction
• 51 reverted back to the bank
• 141 were cancelled/sale off

Since we started the week with over 300 properties on the list, there were aslo over 100 postponements granted as well.

We specialize in foreclosure auctions, short sales, REO/bank owned properties

Will low interest rates bring buyers back to the table

Conforming 30 year fixed rates mortgage loans have dropped considerably this past week.  Locally Citibank and Countrywide are offering a 30 year fixed conforming loan for 4.875% with a cost of 2.250% and 2.000% respectfully. 

Will these never before seen interest rates prompt buyers back into buying again or will they sit on the sideline in hopes of obtaining the rumored 4.5% government subsidized rate when the new Obama administration takes office. 

Below is a chart obtained from MSN Money detailing available rates, fees & points available in the greater Seattle-Tacoma area.

Loans shown are 30-yr. fixed conforming loans available in Seattle-Tacoma, Washington.

photo credit: respres

 With rates this low, anyone looking to purchase a primary residence or investment property definitely needs to look to the foreclosure auction and short sales or REO/bank owned properties to get twice the financial benefits.  By buying a distressed property you can pick up a new home at discounts of 20-45% under today’s market value.  Combine that with never before seen low interest rates and you can increase your buying power dramatically.

Will Dec. 5th 2008 be the Biggest Foreclosure Auction Ever in King County

The foreclosure auction set for December 5th in King County, Washington is set to be the largest in County History.

Read more...

Forbes Ranks Seattle #1 Real Estate Market to Rebound!

Forbes.com recently posted an article listing Seattle as the #1 real estate market in the country most likely to rebound.  An excerpt from the story says “Seattle has a reputation for nurturing brainy industries like aerospace and software. That should help it weather the coming financial storm. Seattle also stays strong because of its vibrant, livable downtown where rents are going up and tenants are likely to stick around.”

It’s nice to know that the people at Forbes and the 700+ real estate professionals they surveyed for this piece echo the same sentiments that we at Real Estate Investment Firm have been saying for several months now.  When you look at the fundamentals of the Seattle area real estate market and the local economy, there is no better place to be to position yourself to make large gains when the turn around occurs.

You can read the entire article here.

Purhasing Foreclosures – Is It Hot Or Not?

Occording the Matt Steel, the owner of Real Estate Investment Firm, “this is the opportunity of a lifetime.”

As reported in a Seattle Weekly article on November 12, 2008, Steel talks about the current foreclosure market and how his company plays a part in it.  Helping thier investors find the “Hot” properties at auction each Friday or helping clients who are behind on their monthly mortgage payments find a buyer, through a short sale, to avoid foreclosure all together.

To see the full article in its entirety, go to http://www.seattleweekly.com/2008-11-12/news/foreclosure-vultures/

Join with REIF in Giving Back to the Community!

GOAL: The primary goal of Toys for Tots is to deliver, through a shiny new toy at Christmas, a message of hope to needy youngsters that will motivate them to grow into responsible, productive, patriotic citizens and community leaders.

OBJECTIVES: The objectives of Toys for Tots are to help needy children throughout the United States experience the joy of Christmas; to play an active role in the development of one of our nation’s most valuable natural resources – our children; to unite all members of local communities in a common cause for two-three months during the annual toy collection and distribution campaign; and to contribute to better communities in the future.

We treat people with kindness and respect, and we give without regard to race, creed, sex, lifestyle, residence, or other discriminatory consideration.

          Real Estate Investment Firm Cares   

                       GENTLY USED COAT DRIVE

Did you know that 90% of homeless adults need a new, warm coat each winter because they have no place to keep one over the summer months? But it’s not just homeless people who need our help; thousands of families are forced to make a choice between buying a winter coat and putting food on the table, or meeting other basic survival needs.

This year REIF Cares want to collect gently used winter coats and distribute them to thousands of men, women, and children who would otherwise go without.

Happy Holidays & a Joyous New Year

REALESTATEINVESTMENTFIRM

16300 Redmond Way, Suite 202, Redmond WA 98052

Please contact LoAn at 425-214-6744 with any questions or for drop-off information & locations. 

Why you should be buying foreclosure properties at the King County foreclosure auction

The month of October has proven to be a memorable one when it comes to buying foreclosure properties at the King County and Snohomish County Foreclosure Auction.  The deals that are available today at the trustee foreclosure sale are the best I have ever seen.

The roller coaster swings of the stock market, the federal bailout package, the collapse of WAMU, Fannie Mae and Freddie Mac and much, much more have created what I can only call the perfect storm of opportunity to buy these properties at discounts of 30-45%.

With such a small amount of liquidity available these days, the investors of a year or two ago can no longer play in this arena.  Since there are no more stated income loans, little or no down loans, etc. many real estate investors are forced to sit on the sideline and a new breed of investor has emerged to capitalize on this unprescendented opportunity. 

Today’s investor is likely to work at companies like Microsoft, Google, and Boeing, etc.  They do not see real estate investing as the path to overnight riches and a lavish lifestyle.  Rather they see real estate investing for what it should be.  What they do see though is opportunity. 

With the banks taking the radical ^{(Yes that is sarcasm)} position that for a person to qualify for a home loan they need to be able the document the following items:

1.  A steady and verifiable source of income (ie. they need to have a job)

2. Verifiable liquid assets (money in the bank)

3. A history of paying back loans (good credit)

many would be buyers and investors have been frozen out of the market.  This seemed to reach its peak during the beginning of October when you had the Dow Jones dropping like a lead balloon and Congress unable to come together at first regarding the bailout package.  This caused uncertainty and resulted in a 90% drop off of properties that get purchased by 3rd parties at the foreclosure auctions.  When 3rd parties don’t buy, the banks in turn end up with even more REO properties and they quickly realize that unless they act dramatically they will end up taking back even more of the foreclosure properties that go to auction.  When this happens the only real remedy the banks have is to stimulate 3rd party interest in the properties again.  The only way they can do that is to dramatically drop their opening bids down to levels that will assure that the foreclosures end up getting bid on at the auction instead of reverting back to the beneficiary.  THIS IS EXACTLY WHAT THEY HAVE DONE!  Lenders have begun to discount their opening bids by as much as 50%.  This equates to several hundred thousand dollars in some cases.

One example is a West Seattle property one of our clients purchased at the foreclosure auction on October 24th 2008.  The foreclosing lienholder was a first mortgage with a balance owed of $636,000.  Late Thursday the lender posted an opening bid of $311,000.  Our client was able to purchase the property at the King County foreclosure auction for $326,000.  The current market value of this custom built 2003 home is $500-550K.  That represents over $200,000 in instant equity for the buyer. 

This is just one example of many in the month of October.  November is traditionally a very busy month at the foreclosure auctions.  Don’t let this opportunity slip away. 

You can register to attend our free workshop, “Never Pay Retail” held every Tuesday at 5:30 in our Redmond office.  There you will learn how you can participate and profit from buying foreclosures at the foreclosure auction.  Sign up today!

When It Comes To Investing in Foreclosures or Other Distressed Real Estate ~ “Be Fearful When Others are Greedy, and Greedy When Others are Fearful”

“Be Fearful When Others are Greedy, and Greedy When Others are Fearful”  ~ Warren Buffet 2004

The above quote was written by Warren Buffet in his 2004 letter to shareholders of Berkshire Hathaway.  At the time Mr. Buffet penned the remark he was commenting on investors who try to “time the market” and was saying that if they insist on doing so, then they should keep in mind to “be fearful when others are greedy, and greedy when others are fearful.”

There is another famous quote regarding “greed” from Oliver Stone’s 1987 movie, Wall Street where the character Gordon Gekko, portrayed by Michael Douglas proclaims that “greed is good”.  The question then becomes, when should you be greedy!

In my opinion, that time is NOW!  Never before has an opportunity to purchase distressed and other below market real estate existed like the one before us now exists.  It is also likely to never occur to this degree again. 

Two or three years ago when the money flowed like wine from banks and other lending institutions and the masses were eager to run out and leverage not only all that they had but often they also leveraged what they didn’t, it was wise to be cautious.  It seems that any time their is a bull market in real estate most people develop amnesia and forget that real estate also follows a cycle.  You have periods of market appreciation and periods of market depreciation.  Tracked over any extended period of time and that line graph will always end up higher than when it started, but in-between there are always periods of ups and downs.

How many people who bought real estate in 2006, when just about everyone fancied themselves a real estate investor just because they watched a handful of “flip this house” episodes now are upside down on their “investment” or have already lost their house to foreclosure.  A perfect example of “being fearful when others are greedy”.

On the other hand, NOW is a perfect example of when to “be greedy when others are fearful”.  The savvy real estate investor knows that every crisis or correction in the market is only an opportunity to buy at a great discount.  Several factors have combined today to create a perfect storm of opportunity for those willing to educate themselves on the realities of the market.  While so many are afraid and sitting on the sidelines, those that pull the trigger today will reap the rewards of that decision tomorrow.

To learn how you can take advantage of the opportunities in this unprecedented market and buy investment or primary real estate please visit Real Estate Investment Firm and take the first step in creating long term and lasting wealth for you and your family.

Benefits of the Current Market – Why now is a great time to buy Foreclosures!

The following is a very insightful video-blog from Zach Anderson at Cobalt Financial Services about the current market conditions and the opportunity that is available during this turbulent time.  Zach is a Certified Mortgage Planner and Strategic Wealth Advisor with CFS. 

The Credit Crisis ~ Is the Federal Bailout the Best Solution?

The following article is a very helpfull explanation about “mark to market” otherwise known as FASB 157, a Federal Regulation requiring banks to report or “mark” their assets to the marketplace each day. 

Thank you Dean Ono from The Legacy Group for the valuable information and allowing me to repost it here for all of you.

The Chinese have a proverb: “May you live in interesting times.” And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of “toxic” mortgages. This has a lot to do with FASB 157, also known as “mark to market”.

Each day, lenders must mark their assets to the marketplace. It’s like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But “mark to market” does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to “mark to market” requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio…at cheap prices. And this makes the vicious cycle continue.

And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn’t just A paper or B paper etc. it’s everything. It’s got some A paper, B paper, C paper…and even what looks like toilet paper. An “A” investor buys the whole pool but because they are an “A” investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic “shorting” done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don’t get this either. That’s why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

Dean Ono
The Legacy Group

As the turmoil in the financial markets continue it creates an amazing opportunity for investors and others to be able to purchase property at significant discounts to market value.  At Real Estate Investment Firm we help our clients create long term and lasting wealth through the acquisition of distressed property at 20-40% under market value.