Article from Forbes Magazine on Best Ways to Profit from Distressed Housing

How to profit from buying and rehabbing distressed properties!

Nicholas Vercollone (Fiance to my sister Nikelle) on Forbes discusses his investments in buying and rehabbing distressed homes.

 Nick and my sister Nikelle (I don’t know how they are going to handle the phone when someone asks for Nicky!) are investing in distressed properties, fixing them up and making a nice profit on selling them. This can easily be done with a small group of investors and/or friends pooling their money together to purchase properties of all price ranges.  I commend them on their entrepenurial spirit in this prospering business!

The following story appears in the June 25, 2012 Investment Guide issue of Forbes Magazine.

Early last year Nicholas Vercollone bought his first property: a run-down three-family Victorian in the working-class Boston suburb of Chelsea for $175,000 in cash. The place, which he spotted on Zillow.com, was being sold “as is” by an estate. “There was two feet of snow in the living room, and we were working in raincoats through the spring,” chuckles Vercollone, a 32-year-old carpenter who decided to invest in distressed properties after working on renovations for other investors.

To read more about this article please visit:    http://www.forbes.com/sites/morganbrennan/2012/06/06/best-ways-to-profit-from-distressed-housing/

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The most interesting part of being a realtor is getting out in the field, visiting and valuing homes that may go on the market. Often they are homes that I am being interviewed for in possibly listing the home. Extra care and attention goes into valuing a home that I may be representing. In these next 2 videos, the home has a few surprises for me!

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many home sales — has been taken up by industry trade groups.

The National Association of Realtors and the National Association of Home Builders have both identified issues surrounding appraisals as a factor putting a damper on sales of new and existing homes in May — the first month new rules governing appraisals conducted on loans slated for purchase by Fannie Mae and Freddie Mac took effect.

NAR has asked the regulator that oversees Fannie and Freddie to suspend the rules for 18 months, saying they may not be working as intended.

Although existing-home sales picked up slightly in May — posting the first back-to-back monthly increases since the fall of 2005 — the 2.4 percent increase was less than would have been expected from a previous rise in pending sales, NAR says.

Many contracts fell through in May because of “faulty valuations” that kept buyers from getting a loan, NAR Chief Economist Lawrence Yun said when the group released the latest numbers on sales of existing homes.

Stories of appraisal problems “have been snowballing from across the country,” he said. Some lenders may be using appraisers who are unfamiliar with a neighborhood, or who compare traditional homes with distressed and discounted sales, Yun said.

Sales of new homes were virtually flat in May, and one of the factors limiting sales was the use of foreclosures and short sales as “comps” and the affect on appraisals of nearby homes, NAHB said.

NAHB is calling for new guidelines for appraisals of properties in areas with large numbers of distressed properties, that would include giving appraisers the option of expanding the geographic area or time frame for eligible sales to get a more representative take on home sales in the area.

Because appraisers can’t inspect the interiors of many properties that are used as comps, they may not be aware of maintenance issues or damage that are common with foreclosed properties, NAHB said. The failure to adjust comparable values of foreclosed and distressed homes often results in the undervaluation of new homes, the group maintains.

In a June 22 letter to the federal regulator that oversees Fannie Mae and Freddie Mac, NAR placed much of the blame for problematic appraisals on the Home Valuation Code of Conduct — new rules governing appraisals conducted on loans slated for purchase by Fannie and Freddie that went into effect May 1.

Appraisal Information on Properties, Economic Real Estate News, Real Estate News

I am starting this new category of “in my opinion only” because what I will write under this category will have no factual evidence (unless I cite any) but merely will be a channel to express some of my opinions that are smothered elsewhere.

I recently had a transaction that was in escrow in the $700,000’s price range. The appraisal came in over $100,000 less than the escrow price. The buyer was using Wells Fargo banking services..if you could call it that.

The buyer wanted a discount on the “agreed to price” in escrow. The sellers didn’t feel the price should be adjusted because the buyer clearly wanted the property at the agreed upon price in the beginning. The sellers made a very good point that I do agree with:

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