San Diego… Short Sale City

San Diego… Short Sale City

Short Sale San Diego Yes folks, it’s definitely all about the short sales. With 1 in 6 San Diego houses underwater many homeowners are opting for strategic defaults and walking away from their properties.

The hungry agents out there are simply working the NOD (notice of default) list and finding plenty of anxious sellers who want out as their home is now only worth roughly half of their loan amount. This presents a huge opportunity for investors and home buyers willing to wait out what’s frequently a slow process.

After scouring MLS for weeks for REO’s and swimming with all the sharks out there I decided to switch gears and actually get on the phone and start networking with the short sale agents who are on the front line with all the distressed deals.

I’ve quickly come to realize that you have to make your own deals, not just look for one. Not every agent however who has a short sale listing is capable of influencing the deal, much less even closing it. There are third party professional negotiators who seem to have the process wired though. A good short sale negotiator can hammer the lender and dispute their BPO’s, even sometimes providing their own appraisals and documentation as to the value and condition of the property and build in the margin rehabbers need to make a profit.

The downside is it can take 2-6 months to close a short sale so we are filling our pipeline up with as many as possible. Knowing who these agents are and networking with them is key, once again its not what you know in this market but who you know. If you are a homeowner looking to do a short sale in San Diego, make sure both lien holders give you a “non-deficiency”, it holds you harmless for the portion of the loan amount thats been forgiven. Our short sale agent has 100% success ratio getting this and has done over 150 transactions. If you are interested in a short sale please contact me.

Calling All Contractors! Contact me if you want to be a part of our team! 

Moving here I had the long term plan of stepping away from the labor part of the rehabs and just doing design work and overseeing the contractors.  Afterall, these arent huge projects, mostly cosmetic stuff. I had given myself a 3 year window to get to that point but after arriving here its evident that this needs to be my new business model right out of the gate.

I’ll be hiring all the construction out so I can do multiple projects simultaneously so if you are a GC or know of a reliable one let me know please.  Maybe once the market picks up for move up buyers I’ll do some larger structural projects again but the money to be made now is on the entry level stuff, that only needs light rehabs.

The profits wont be as large as we were used to but with increased volume we should be able to make it up and then some. I’m super excited, our California LLC is set up now, we have over 30 offers out there and some are very close to reaching acceptance so I’m looking forward to finding solid team members on the construction side.

Also, many people are reaching out to me, new blog followers and old alike. I’m stoked to meet all of you, after the machine gets running we’ll be open to joint venturing on some deals, offering some of our overflow deals to you or even using private investment funds so contact me if you are in San Diego and want to chat about all the opportunities we are seeing with the local real estate market.

                                                                                                                                                                                                                                 short sale negotiationI’m not totally over the bungalow craze so fast though, I’ve got an offer on this amazing California Craftsman REO, I hope it pans out. I’m competing with conventional retail buyer offers that are higher but hopefully the lender will opt for my all cash offer instead.

I utilized my “write the offer with the listing agent” strategy on this one: ). No matter what we start buying we’ll do some fun stuff and try to set our rehabs apart from the crowd by hopefully offering a little more attention to detail and some cool design sense. I’m really making headway, once we have more deals than we know what to do with I’ll share a little more about how I figured it out.

Stay tuned and thanks for following.

Tower to Tom: Continue Holding Pattern

Tower to Tom: Continue Holding Pattern

                                                                                                                                                                                                                                                             The Target House has been on the market for 22 days now and it feels like I am in some kinda weird holding pattern. No landing, no taking off, just holding course. As soon as this house sells we are moving back to Sunny San Diego so I don’t want to start any new rehabs while we wait.  We are sooo excited to move back we can hardly stand it, so its hard not to focus on this sale because there’s so much hanging on the line although its the last thing real estate investors wanna do. House Flipping is in my blood, if I’m not renovating something and using my creative skills I go crazy. To keep busy now we’re working smaller deals while we wait such as the Wholetail House which is due to close on December 15. The San Antonio Real Estate Market stays pretty good all summer but as soon as school starts in September things really slow down. Just like in San Diego, once the holidays start nobody really wants to move so you can easily be stuck waiting for January if your listings don’t sell. Although I totally anticipated this, it seemed we might have got lucky again when several potential buyers returned for multiple showings the first week but we haven’t seen any offers from them yet. The showings were better than average up until last week but now it seems to be tapering off a bit.  I’m holding advertised open houses and even hung up Christmas lights so we’re working all the angles. San Antonio MLS has a neat feature where you can perform a “reverse prospecting” search. This allows you to see which Realtors are emailing your listing out and then their clients response if they are interested. As long as I see it getting emailed out, and clients checking interested, we’ll continue to get showings. This wouldn’t be the time to start panicking and dropping your price since there’s way less traffic this time of year anyway but I’ve got some new marketing ideas planned for next weekend that should heat things up.

San Antonio Resale Homes are down 20% when compared to Q3 2009, similar to what’s happening to the San Diego Real Estate Market right now. A lot of this is due to the tax credit which pulled alot of sales forward but I sense a little slowing in general here in Military City USA. The good news is that for this same period prices are up about 8% whereas in San Diego they’ve lost about 2 points. There are 3 factors we’re dealing with right now with the sale of the Target House; the tax credit theft of Fall sales, the usual buying seasonality factor and last but not least the fact that we have a specialty property that’s above the median home price in which the most activity occurs. I always say I only need 1 buyer, cross your fingers that we get him during the holidays and don’t have to wait until spring 2011, after all half of this business is total luck!

Back Online!

Back Online!

Sorry for the lack of updates, I’ve been a baaaaaaad blogger… but after moving we didn’t have internet service for over a week.  I’m back online now and back in action! Although I’ve been distracted with the personal house sale and move, we’ve still managed to keep the momentum up on the Target House. I’ve got the millwork package ordered and it’ll arrive by the end of this month so that prompted me to get right on the interior paint and tile so I’m ready when it shows up. After alot more prep inside we finally got everything primered and then I sprayed 2 coats of semi-gloss on all my new trims, no brush marks baby, first class all the way. For the walls I chose a medium warm grey for the whole house with the exception of the dining room which as you can see is red. The grey probably wouldn’t be too safe for most homes but with all the natural light I have coming in and the abundance of white trim it really doesn’t make it dark or feel small. The red for the dining room ties into the stained glass windows in the living room and we planned to pull that same red down onto the new tile for the fireplace hearth.

The kitchen cabinets will be white shaker style again that will pop good on the grey walls. I’ve chosen black granite counters that will contrast the cabinets as well and then we are going light on the hardwood floor stain. It’s going to look incredible, definitely the best renovation we’ve done to date. Also this week I had my mason come in and re-mortar the fireplace brick and firebox, now there will be no cracks and it’s back to good as new condition. Thankfully I got the A/C on just in time for all this inside final stuff, it’s sure nice to work in the coolness after what seemed like months of humid 100 degree heat. For the first time in my life I hired a pro to do my tile, this guy is really good and its nice to see it getting handled perfectly and without taking 2 weeks of my personal time to do it. I picked up $2500.00 worth of various sizes of white ceramic, mostly 3X5 subway tiles that we are putting in a brick pattern. For the hall bath I am using white ceramic hexagon floor tile with black dots and as you can see they’ve almost got the tub surround completed with the 6×6 and subway pattern combo. I opted not to do a decorative liner in this bath to keep it clean as we’ll have plenty of stuff going on with the floor pattern.

 In the gorgeous master bath I’m running subway all the way up inside and outside of the shower and the tub box as well. I’ve picked out a real neat liner for the shower that’s super clean and linear to go with all the sharp lines. No glass accent tiles in this home, we are moving on to newer materials now. Having an account at Dal Tile is key, they do they not sell retail to the public. Their stuff is a little expensive even at my contractor discount but they’ve got the best of the best with new materials to choose from. Picking materials like tile, fixtures, etc. at Home Depot or Lowe’s will make your rehab look like everyone else’s. Nothing worse than walking into someone’s project and recognizing all the fixtures and tile from a big box store!

The San Antonio real estate market is feeling some post tax credit blues as is most of the Nation, home sales were 25% down in July as compared to last year but 6% up for the year. Median and average prices were up in July due to the higher number of home sales above the 500k mark, which have previously been getting hammered. As I’ve been saying, we’ve definately pulled some demand forward so this Fall should be interesting. Stay tuned and thanks for coming back, it’s all hands back on deck now.

New Concrete & SA Slippage

Over at our historical renovation, The Target House, we took care of the new concrete driveway and garage foundation this week. My contractor is charging around $3.00/s.f. for a job like this including demo and haul off, we poured 2000 s.f.  The concrete was an important part of this project, the original 1923 driveway width was more suitable for a Model T rather than a soccer mom SUV. Additionally, since our lot is sloped and I excavated such a deep cavity under the room addition for the peir and beam foundation it was imperative to prevent any water from entering the crawl space so the new driveway & curb will divert all rain and roof run off down the driveway. You’ll also notice in the video we are rough sanding the hardwood floors even before we hang drywall. This is a little trick I learned in cases where there are bad stains and smells. Sanding the wood takes the finish off and opens the pores in the wood so it can breathe and dry out. We’ll start bleaching out any stains and then once we are ready to refinish the floors possible do a bit more patching in any areas that still need it. Since my plan on this house is to go light with the floors I wont be able to hide anything with the dark stain. The last thing I want to do is go all dark on my brand new wood floors just to try and hide 4-5 stains up front on the existing portion of the house. We passed framing inspection and the insulation is now hung. Once we pass insulation inspection Monday we’ll be free to finally hang the drywall so I’ve got a delivery for 180 12′ sheets on Monday.

The May San Antonio real estate market stats were released this week and although activity was up nearly 20% the median price dropped almost 4% from last year. I normally don’t put a lot of weight on median prices anyway but there were certainly more less-expensive homes selling due to the buyer bait program. The higher transactions were also obviously a result thereof. After 2 consecutive months of low foreclosure numbers, SA now jumped up by 34% for the July auction and is on track for a record high 2010 number. I think the market will be slowing as Summer settles in, let’s hope home prices don’t continue to slip.

Hot & Cold

Hot & Cold

It was nice to get in a full week on the project now that the other house sold. I finished up the front porch by making new stairs and replacing the siding skirt where needed. We got a comment from Mike asking what I was going to do about the column base overhanging the porch floor, I’ll just have to live with it as its only over by a few inches and doesn’t strike me as really looking that odd since they overhang the top too. The posts that hold up the porch are existing 6X6’s. Their placement was really far out to the corners so in order form me to have the tapered columns I had to have the bases hang over the floor a bit. If I had gone back with just square posts I don’t think it would look as cool so I’ll live with it.  The 16 degree flare on the skirt looks real cool with the 117 siding.

My firebox arrived this week as well so I got to install it. Of course the dimensions I got online for the rough-in framing hole didn’t work out so I had to reconfigure this wall a bit on the fly. It’s a double sided see-thru gas fireplace that I’ve put between the jacuzzi tub in the master bath and the master bedroom. Locally you’d spend $5,000-$8,000 for something like this even at a wholesale builders supply so I was excited to find them online for $1295.00 from Ebay/Discount Fireplace Outlet. With the vent pipe and everything you need, the total including tax and delivery was about $1800.00. It’s easy to put in, once you have the box framed in there’s just one gas line that I’ve got coming in underneath and then the vent through the roof. The unit doesn’t need electrical as there’s an ignitor and low voltage switch that you mount on the wall. This is a real cool feature for what I spent, we’ve designed the whole master suite around it, can’t wait to see it with all the tile around it and the 6′ tub in.

I found a new HVAC guy last week who’s already got started roughing-in my new 5 ton central air/heat system. It’s a horizontal gas furnace of course (electrical is not smart energy) with a A-coil like I always use. Since this house is so long we’ve got a real long supply trunk line with 11 drops and 3 return air grills. Yellow Page retail prices in San Antonio for a total new install like this would run over $2,000/ton, or $10,000. My regular sub-contractor was bidding $6,500.00 for this house which equates to $1,300/ton. Like I’ve mentioned before, it’s common to experience price creep with subs, you always have to keep hammering them or switching because they slowly raise their prices on you. So here’s the good part; my new guy is only charging me $4400.00 complete. That’s only $880.00 per ton my friends! I’ve already turned him on to another investor friend of mine, this guy is hungry for work and I saved over $2k by shopping around and walking away from old faithful. In my business any savings along the way goes straight to the bottome line.

San Antonio Home Sales of single family residences were up 20% in April when compared to the same month in 2009. Great news but undoubtedly this is directly reflective of the Federal Tax Credit that’s now expired. In typical cheerleader fashion, the San Antonio Board of Realtors has come out to predict “these home sale increases should hold through the Summer” although I have different thoughts..especially knowing that mortgage applications are taking a dive in May.

Plumbing Passed, Pendings Up

Plumbing Passed, Pendings Up

We passed plumbing rough-in and top out inspections this week at Target House and have now got started on the electrical. My electrician is getting a slow start so I am kind of disappointed but its par for the course here in Land of Manana, especially when you are getting great prices. I am going to stay on his ass all week and try for an inspection Friday. On the exterior I am completely done with all the siding and window trims on the new portion of the house and have started working my way forward replacing various sections on the original siding where I moved windows or there was damage. There will be alot of changes once I get up front rebuilding the porch, porte cochere and columns so that’s exciting. On the new back porch ceiling I used authentic 1×4 tongue and groove bead board, sweet!

The San Antonio housing market certainly showed signs of Tax Credit fever while everyone scrambled last week for the handout. I’ve been tracking the Pending sales and as you can see they rose by about 100 houses for each week in April all the way up until the cut off of Friday. It will be interesting to see 2 things from here, if the Pending sale growth continues and how many pendings actually close and turn into solds. The San Antonio Spring buying season typically is just now heating up, we’ll see how bad the tax credit affected future demand shortly. There are currently 11,455 homes for sale, down from 11,697 last weekend.

Week                          # Pendings

Mar 29-April4                    246

April 5-April 11                 363

April 12-April 18               430

April 19-April 25              456

April 26-May 2                  556