THE HERTZOG BLOG

ATTN BUYERS AND INVESTORS: Phoenix & Scottsdale Foreclosure & Short Sale Investment Strategies

BUY LOW, SELL HIGH

Words to live by.  We've grown up hearing this phrase time and time again when it comes to investing, whether it be the Stock Market, Gold, Pork Bellies, or REAL ESTATE.

For the past 8 years or so, 75% of my business has come from a core of investors in Land and Homes in the Phoenix and Scottsdale Markets (over $250 million in transactions, actually).  I/we were fortunate to get almost all of our investors out of their respective investments before the market began to turn in late 2006/early 2007.  Most of them made their fortunes in land, as Builders, Developers, and Investors were clamoring to buy as much as they could get their hands on.

Today's market is much much different.  We have been keeping a pulse on the Land Market on a daily basis (our Parent Company is a Land Brokerage), and this particular market is still comatose.  There are way too many home-builders sitting on way too much inventory, and they are having a very difficult time competing with the short sale, foreclosure, and REO inventory that is out there.  In other words, until we get through this Phoenix and Scottsdale Short Sales and Foreclosures inventory, new-home builds will continue to suffer, keeping demand for land down.  Which brings me to the reason I'm writing this blog today....

More and more, I'm getting calls from my investor client base (as well as "new" clients) asking me, "Where should I put my money"?  My answer...HOMES!  This, coming from a "Land Guy"(historically speaking).  Folks, I've NEVER SEEN A BETTER TIME TO BUY HOMES THAN TODAY, WHETHER YOU'RE A HOMEOWNER LOOKING FOR A HOME, OR AN INVESTOR LOOKING FOR SOMEWHERE TO PUT YOUR MONEY TO WORK.  As you can imagine, working with investors, I'm constantly looking for the "best" time to buy.  For the past 2 years, we've been waiting for the market to "bottom out".  If we aren't there today, we are pretty darn close, in my humble opinion.

In years past, most investors have looked at buying homes, leasing them, and waiting for the top of the market to sell them, then start all over again.  This strategy makes sense, if you don't mind being a landlord.  Many (including myself actually) don't want those calls in the middle of the night, asking you for repairs, or the destruction that can come with leasing your property.  Like I said before, today's market is much much different.

INVESTOR STRATEGY

Prices are SO LOW now that our investors are buying properties with a strategy I've never seen before in a Real Estate Market.  We now have folks that are buying Phoenix and Scottsdale Short Sales and Foreclosures, doing minor repairs, etc., with the intent to hold them for 366 Days, then selling them (for the Capital Gains Consideration).  Prices are so low that when they conduct their Pro-Forma Statements, they can factor in Repairs, Lawn & Pool Service, and Utility service, and still come up with some pretty favorable numbers for their investments.  Of course, most still want to lease their homes, but some feel that the acquisition prices are so low that they can get by without leasing, and still come out way ahead (i've seen some projections in the 60-70% ROI) after holding their properties for only one year!!!  So, where do we fit in?....Read On....

We have been researching various parts of the Phoenix and Scottsdale Short Sales and Foreclosures Markets, and we've come up with areas that people want to live in.  We do this by comparing Active Listings to Pending and Closed Sales in the past 6 months, and come up with a ratio.  Those areas that have the highest ratio of sales vs. active listings are the markets that we focus on, as our investors are most interested in turning a profit after holding their home(s) for a year.  WE KNOW THESE MARKETS LIKE THE BACK OF OUR HAND!  As a matter of fact, my business partner (Ed Cheney) and I happen to live in two of the top five markets in terms of sales vs. active listings.  Ed lives in Scottsdale, and I live in North Phoenix.  Each of the areas we live in have ONLY A TWO MONTH SUPPLY OF INVENTORY, BASED ON TODAY'S NUMBERS.  This supply is going down rapidly, as foreclosures went down considerably in March/2009 compared to February/2009.

To make a long story short, NOW IS THE TIME TO BUY.  We haven't seen 60 Day Inventories since the height of this Real Estate Market (2005-2006).  Prices are at an all-time low, and we are now scraping the bottom of the Residential Real Estate Market (especially in the Scottsdale and Phoenix Short Sales and Foreclosures Market). 

Homeowner Strategy

The best advice I can give a prospective homeowner in today's market is to CONTACT US FIRST.  While this blog may seem to be geared towards Investors, you need to understand that YOU ARE AN INVESTOR AS WELL!  Remember, your home is probably your largest and most important investment you own.  The only difference is, you may have an opportunity to cash in on the $8,000 First-Time Home Buyers Tax Credit.  As Certified Distressed Property Experts (CDPE's), we know how to deal with lenders when it comes to getting a Phoenix or Scottsdale Short Sales and Foreclosures deal done!  Regardless of where you want to live in the Metro Phoenix area, we can help you.  We don't make you sign a "Buyers Broker Agreement".  You just tell us where you want to live, and we go to work for you.  The best part is, you pay us NOTHING for this service.  The lender (or owner) pays us our commission.  Visit our State-Of-The-Art MLS Search Page to find out what's going on in the neighborhood you want to live in.  Then, call us and we'll be happy to show you homes and negotiate on the one you like best!  Remember, WE KNOW HOW TO NEGOTIATE WITH THE LENDERS!

If you haven't already, please read the INVESTOR STRATEGY above, as you need to think of yourself as an investor when making the decision of WHEN TO BUY.

Whew!  This was a long one!  I chose to write this today because we are definitely seeing some MAJOR CHANGES IN THE MARKET, to the benefits of buyers.  As always, feel free to CONTACT US, or, better yet...SUBSCRIBE TO OUR BLOG.  You'll receive an email everytime we post a new report. 

Summit Home Consultants Logo

 

Bob Hertzog

Designated Broker-Summit Home Consultants

http://phoenixhomeseekers.com

           


 

 

Comment balloon 0 commentsBob Hertzog • April 10 2009 10:38PM
ATTN BUYERS AND INVESTORS: Phoenix & Scottsdale Foreclosure &…
share
BUY LOW, SELL HIGH Words to live by. We've grown up hearing this phrase time and time again when it comes to investing, whether it be the Stock Market, Gold, Pork Bellies, or REAL ESTATE. For the past 8 years or so, 75% of my business… more
Looking for a Scottsdale or Phoenix Foreclosure or Short Sale?
share
You've come to the right place! There are currently over 22, 000 properties in Phoenix and over 1, 300 properties in Scottsdale that are listed in our database as being in Pre-Foreclosure or Bank-Owned. You can have all of these listings at… more
Phoenix, AZ: Short Sale & Foreclosure IRS & Deficiency…
share
In our intitial meeting with clients, we are always quick to point out the possiblity of having to pay the IRS for "Phantom Income" (i. e. in some cases the IRS considers the loss that the lender takes to be income, and can thereby force… more
85254 Scottsdale Foreclosures & Short Sale Statistics for April…
share
I just wanted to give everyone a quick "snap-shot" of the current conditions in the 85254 Zip Code These numbers reflect Scottsdale Single Family Residences that were (or still are) in Pre-Foreclosure (Short Sale), Foreclosure, and REO.. more