Ever wonder how Zillow got started? Here is the story.

Rich Barton co-founded Zillow in 2006. He graduated from Stanford with an Engineering degree, went to work for Microsoft in 1991. A few years later he pitched an idea to Bill Gates – let travelers book their own flights and hotels on-line. Gates gave him the green light and in 1996 Barton launched Expedia. In 2003 Expedia was sold for 3.6 billion dollars.

A few years later, Barton and Lloyd Frink, also a Microsoft and Expedia alum, were looking for homes for their families. Since both were tech and internet geeks, they found it frustrating that they had to use a professional to get information about any home they were interested in. They felt the process was too hard, and since the internet had been around for a while, it had to be easier to get basic marketplace information.

The seed for Zillow was planted.

Barton thought: “How would it be to strap on Oculus virtual reality goggles and take a spin around apartments and homes? Can we develop this kind of technology? Can we change the basic mechanics of home shopping? We believe we can, and we will be leading the way on all of it.”

Zillow launched in 2006. By 2022, Zillow had over 5000 employees and had been accessed on line over 10 billion times.

Barton became a billionaire.

On April 6, Freddie Mac reported the following:

• The standard 30 year mortgage rate fell to 6.28% as of April 4
• This is the lowest level in 6 weeks
• One week ago the rate was 6.32%
• This time last year the rate was 4.67%

Sam Khater, Freddie Mac Chief Economist, says “borrowers are coming back to the market, but as spring homebuying season begins, low inventory remains a key problem.”

Remember, properties need to be sold, and homeowners will be more willing to carry a note when folks can’t or won’t obtain a conventional mortgage. Call me if you want guidance on creating note terms for your property sale.

Reported by housingwire.com on April 6, 2023

Website www.balancingeverything.com recently published an extensive study on the 2023 housing market. Here are their top 10 cities to be flipping this year:

1. West Valley City, Utah
2. Greensboro, North Carolina
3. Pittsburgh
4. New Orleans
5. Denver
6. Boston
7. San Diego
8. Memphis
9. Atlantic City
10. Virginia Beach

Why these cities? The many variables included positives on median home value, average listing price, average sell price, average days on the market, number of realtors in the area, remodeling costs, rental vacancy rate and homeownership rate.

Since the Pandemic, many businesses have changed the way they conduct business. Flexible employee hours, work from home, Zoom meetings, etc. One of the things I have always admired about our note business is our flexibility and willingness to adapt in order to get things done – pandemic or no pandemic.

Here is an example – pre-pandemic:

I was talking to a note holder who was carrying a note on a property located on the East Coast. The negatives were we had no down payment and the property was a rental – not owner occupied. The positives were strong credit, strong note terms and very good seasoning. We made an aggressive offer to buy the note and the seller accepted.

Then, he threw us a curveball. He and his wife had purchased a property out West and would be heading there in the next few days. They had shipped many belongings to their new home and would be driving with a trailer attached. They had planned their trip with several stops and would take approximately 30 days to get to their destination. Could we close under these circumstances?

We said yes. We quickly ordered the property appraisal and asked if we could talk to his borrower up front. The appraisal came in above the sales price and the interview with the buyer went well. The sellers retrieved their documents and managed to email our requests when they arrived at one of their pre-determined destinations. As we got closer to finalizing the transaction, we were able to identify a notary at one of their upcoming stops and he agreed to receive our overnight package of closing documents. When the sellers arrived at this location, the notary was prepared, the docs were signed and overnighted to us, and we released the funds. We closed in 28 calendar days.

This was one of the most fun transactions I have been involved with. Everyone co-operated and did their part on a timely basis.

We can do the same for you. Call me with your questions or to get some pricing for your note.

The U.S. Census Bureau recently reported some interesting data for those of us in the real estate industry. Over the past 5 years, there has been a tremendous spike in the number of rental households, with folks making $150, 000 or more jumping by 87%. Over 44 million households are now renting with a median income approaching $71, 000.

The biggest increase was in Austin, Texas. Folks making $150, 000 or more who are renters increased 154% over the past 5 years. Many moved here and to other parts of the South and Southwest after the pandemic.

Why are they renting? Higher home prices and mortgage rates play a big factor. Some people can’t find what they want. And others just want to experience the lay of the land before they commit. The result is that rents will remain high and lower and middle income earners will be squeezed. Builders are targeting high earners with buildings that have pools, fire pits and huge fitness centers.

At some point, some of these folks will be ready to buy. If you have developments in your area that cater to these renters, you may want to make some of them your friend.  When they are ready and you have an attractive property, you may have a cash buyer or someone you can come to terms with on an owner carry note. And, when YOU are ready to sell that note, we are here to buy it from you.

In 1965, the Mamas and the Papas had a huge hit with the song California Dreamin’.

“I’d be safe and warm if I was in LA, California Dreamin’ on such a winter’s day.”

The song was written 2 years earlier by John Phillips, who was living in New York City and enduring a particularly cold winter. The song became a symbol of a lifestyle that identified California. Millions of young people from the East Coast and Mid-West flocked to California as a result. I was one of them.

Guess what the average home price was in 1965?

$20,000 !

These thoughts filled my mind as I read a recent study on the California Housing Market and 2023 predictions:

• San Francisco Bay area median price is $1,000,000.
• Southern California median price is $738, 250.
• Central Coast median price is $894, 500.
• Central Valley median price is $425, 000.
• The Far North median price is $367, 000.

The study suggests that after a cold winter, the spring homebuying season will see some “thawing” and gradual price improvement.

For new – and old – homebuyers, let’s hope so.

Read the full report at noradarealestate.com, California Housing Market, Prices, Trends and Forecast 2023.

Diana Olick of CNBC.com reported on March 1, 2023:

• Mortgage applications have hit a 28 year low
• Mortgage rates have moved 50 basis points higher in the past month
• Mortgage rates were in the 4% range last year – now around 6.7%
• Re-fi applications are 74% lower today than same time last year

This data presents a wonderful opportunity for a real estate investor. There are loads of people who want to buy a home, and some of them are a prospect for you if you have a property in a nice neighborhood and can come to terms that are attractive for your buyer and protective for you. Talk to the realtors and mortgage brokers in your area – maybe they can find your next buyer.

Here is how you protect yourself when you decide to sell a property and carry the note:

1. Know Your Buyer. Either you or your real estate agent need to play the role of detective. Ask a lot of questions. Why can’t the buyer get a bank loan? How long has he been with his employer? Why does he want to live in this neighborhood? What kind of car does he drive? What is the condition of that car? What is his credit history? Who will live in the property with him? Will anyone else contribute financially to the note payments? Does extended family live in the area? If you are agreeing to be tied to the note for as many as 30 years, please get to know your buyer.
2. Max the Down Payment. A down payment is protective equity for the seller. The bigger the down payment, the more protection. The more committed is the buyer. Always negotiate the largest down payment possible.
3. Shorten the Term. If I lend money to a friend, do I want my money back sooner or later? If a note buyer invests his funds in a promissory note, would he prefer to get his money back sooner or later? Most folks do not want to wait 20 or 30 years. Negotiate the shortest term possible.
4. Up the Interest Rate. Normally, the reason a buyer can’t get a bank loan is because either he or the property don’t meet the lender’s standards. That leaves the seller 2 options – find an all cash buyer or carry the note. Experienced note investors will demand an interest rate above current mortgage rates in order to be compensated for not cashing out.

The idea is to sell the property, of course, but the focus should be on finding the right buyer and agreeing to strong terms. Then, you are protected if you keep the note for income or sell for cash.

On January 13, 2023 U.S. News published a lengthy report based upon interviews with several housing economists. The general consensus was that mortgage rates are expected to decline by the end of the year.

Fannie Mae sees rates going from 6.5% in the 1st quarter to a flat 6% by year’s end.

Freddie Mac agrees, seeing rates at 6.2% by the end of the year.

Mortgage Bankers Association sees rates at 6.2% in the 1st quarter, sliding down to 5.2% by year’s end.

National Association of Realtors envisions 5.7% by year’s end.

Realtor.com is an outlier, seeing the mortgage rate at 7% throughout the year.

Redfin sees the rate declining to about 5.8% by the end of the 4th quarter.

They all agree that affordability continues to be a big issue, with a housing shortage exacerbating the situation and 1st time homebuyers being squeezed because their earnings are $30,000 less than the income needed to purchase a starter home.

Stay tuned!

Welcome to 2023!

Let’s start off the year with a note refresher. Last month I had several conversations with new noteholders. Some of these folks had no idea there were people like me who would buy their note. So, they had the obvious questions: How does this work? How much will you pay me? How long does it take?

To get a price for your note is simple. You will provide a copy of your note and closing statement, I will do some homework, ask you some questions, and give you a price for your note.

Should you decide to sell, you will provide the following documents:

1. Original Signed Promissory Note
2. Recorded Deed of Trust
3. Title Policy
4. Proof of Insurance
5. Proof of Payments Received
6. Final Closing Statement signed by your Escrow Officer
7. Contact info for your buyer

Our average closing time is 28 calendar days. We have closed as fast as 7 days.

If you or someone you know is considering selling your note, call me and let’s get you some pricing for you to consider.