Kim O’Neill ran a medical billing company for years in Chandler, Arizona. When her father became ill, she moved her business into her home. Pretty soon, the city of Chandler was demanding she get a permit, her employees were not allowed on site, she would have to build a parking facility, and get approval from her neighbors.
She finally gave up and shut down her business.
Read the sad story here: https://www.wsj.com/articles/when-the-city-comes-for-your-home-based-business-1531691394.
In 2017, 86% of all notes created were created by single note creators. This means that these folks were not in the business of selling properties by offering seller financing. Quite the contrary – they had a property to sell, they found a buyer who wanted the property, and they were willing to carry the note in order to get the transaction done. In all likelihood, they will never do another transaction like this.
They are One and Done!
So, what should a solid transaction look like? Target these terms as your minimum:
Residential
Down Payment 10%+
Fully Amortized
6%+ Interest
625+ Credit
If the buyer is weak in one area, make up for it by demanding more elsewhere.
A judge says the state misused settlement cash to fill a budget hole.
In early July 2018, California Third District Court of Appeal Judge Andrea Hoch rebuked state lawmakers for misappropriating funds from the National Mortgage Settlement Deposit Fund for budget triage. California’s Department of Finance, with the Legislature’s tacit consent, diverted nearly $300 million toward servicing debt for housing bonds. This overtly political use was in violation of the settlement that required the funds be used to help homeowners. The victims of this raid were low-income and minority communities.
Read the full story: https:///www.wsj.com/articles/californias-mortgage-fraud-1531694667
The Inland Empire area of Southern California had more industrial real estate under construction than anywhere else in the United States, with more than 19.6 million square feet of space being built as of the first quarter of 2018.
The Inland Empire has approximately 4 million residents, and comprises most of Western Riverside County and South Western San Bernardino County. Major cities include Riverside, San Bernardino, Ontario, Victorville, Corona and Rancho Cucamonga.
Source: News from Board of Supervisors Chair Robert A. Lovingood, June 29, 2018.
Less owner financed notes were created in 2017 than 2016, but the down payments were larger, the loan balances were larger, and the borrowers were better qualified. Here is a snapshot of what happened:
“Loose mortgage terms are pushing home prices up. Underwriters need to tighten standards.”
A May 31, 2018 article by Paul Kupiec and Edward Pinto started with the above quote. Here are some highlights:
Paul Kupiec and Edward Pinto, Wall Street Journal, May 31, 2018.
My business is focused on the Western States and Texas. Why Texas? Each year, Texas leads the country in most seller financed transactions closed, so we go where the business is. And, the economy in Texas keeps growing. See this article below:
“Texas wrapped up 2017 with the fastest-growing economy in the United States, propelled by a resurgence in oil extraction that lifted business across the state.
The Lone Star economy grew at a 5.2% seasonally adjusted annual rate in the fourth quarter, with the mining industry the leading factor.
Texas added the most manufacturing jobs of any state from December 2016-2107.”
Commerce Department, May 7, 2018.
House flipping across the nation is going crazy -again. Interesting article from CoreLogic on what is going on and where. Read it here: https://www.corelogic.com/blog/2018/05/house-flipping-reaches-a-post-crash-high-across-the-nation.aspx?WT.mc_id=crig_180523_IIK.Js
California’s housing market continues to exhibit the struggle between the haves and have nots, with the government making decisions that directly affect housing – for better or worse. The latest issue is rent control.
California Apartment Landlords Dump Properties Ahead of Rent Control Vote
https://www.wsj.com/articles/california-apartment-landlords-dump-properties-ahead-of-rent-control-vote-1526404269?mod+searchresults&page=1&pos=1.
Below is the majority of an article written by Chris Trafecanty of Lighthouse Loans:
A full fledged housing crisis has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families. The median cost of a home here is now a staggering $500, 000 – twice the national cost.
For California, this crisis is a price of this state’s economic boom. Tax revenue is up and unemployment is down. But the churning economy has run up against 30 years of resistance to the kind of development experts say is urgently needed. California has always been a desirable place to live and over the decades has gone through periodic spasms of high housing costs, but officials say the combination of of a booming economy and the lack of construction of homes and apartments have combined to make this the worst housing crisis here in memory.
Home buyers and the cost of housing is beyond the reach for almost all of this state’s low-income population. Despite having some of the highest wages in the nation, the state also has the highest adjusted poverty rate.
Homes are selling even faster than they did last year, when nearly one in five sold within a week.
Mortgage rates will climb from below 4 percent to 5 percent or higher for a standard 30 year loan. And because of high demand, home prices are expected to keep climbing, pushing the monthly payments 15 to 20 percent higher.
Chris Trafecanty, Lighthouse Home Loans, ctrout@fasterhomeloans.com, May 2018.
At a national level, the ratio of flipped properties to sales reached 6.2 percent in the first quarter of 2018, which matches the post-crash high in the first quarter of 2013. The first time it reached this level after the housing crash, home prices had just started to recover, and there were still a considerable number of distressed properties on the market. However, the flipping dynamics have changed over time. The share of distressed properties sold has declined significantly, from 30 percent in January 2013 to 4.4 percent at the end of 2017. Additionally, as a result of six years of home price appreciation and limited for-sale inventory, in many areas, home prices have already passed the peak values reached before the market crashed. Consequently, the acquisition cost in nominal dollars for investors has increased drastically. High acquisition cost, tight inventory, and rising flipping activities together point to possible speculation: investors are betting on continuous home price growth.
CoreLogic Insights Blog, CoreLogic.com, May 16, 2018.
