What Investors Need to Know About AZ Short Sales

by Barbara Broyles, HomeLovers

Short sales are very popular with investors because they represent an opportunity to buy a home at less than market value. However, before stepping into the quicksand, there are a few things investors should be aware of.

You may be riding on the Titanic, so diversify

Short sales are a slow process. We have seen competitive cash offers made six months ago that still have not been accepted by the bank. If you are making offers on only one or two homes, be careful that you don't tie up all available cash on a short sale that may stagnate for three to six months as you watch other great cash deals sail by.

It is best to make offers on short sale properties when...

Read the full article here, just published today on NuWireInvestor.

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Scottsdale Investment Properties

Demand For High-End Home Rentals Increases

Because HomeLovers manages hundreds of rental properties all across the Phoenix metro area, we have our thumb on the pulse of the home rental and investment market. We see trends as they begin to shift and evolve, which can be critical to the long-term success of our investor clients.

Rent in the range of $1,000 - $1,200 have been the market's sweet spot for the last six months or so. Interestingly enough, the last few weeks have seen a major shift towards more expensive, larger rentals. Demand has picked up substantially for homes ranging in rent from $1,800 to $2,400. We aren't seeing it just in Scottsdale - it is all over the Valley.

We like this! These more expensive rentals attract a different type of tenant.

They are business people who often make great tenants, perhaps coming out of foreclosure on a similar home. They have a homeowner mindset, instead of a renter mindset, and they take care of the property. Some are coming out of a very large mortgage payment, realizing they can get a similar property for 1/2-2/3 less money each month. Turnover is less, and maintenance is less.

Scottsdale Investment Property Remains A Strong Investment

Scottsdale is still a choice location for investors, especially when it comes to homes that rent for over $2,000/mo. Historically, it has shown very strong appreciation, which is a critical factor of any long-term property investment strategy. For example, the 85253 zip code in Scottsdale had an 80%+ appreciation over a five-year period, even including the price decline in 2008.

Much like a stock portfolio, diversifying the types of homes in an investment portfolio is very important.

Unless you are a speculative investor that prefers to flip properties and is investing for the short-term cash flow, true investing considers the long-term gains. While cash flow can be good for the low-end properties, they just don't appreciate as much as the mid- to high-end properties can. This appreciation is critical in building wealth.

Including a few higher-end homes, such as those in Scottsdale, can be a very smart move.

For details on diversifying your investment portfolio for maximum long-term profit, give us a call to schedule your free consultation today at 602.792.5324.

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Canadian Buyer Looking for Arizona Foreclosures?

HomeLovers' Barbara Broyles was on Trulia this morning, answering a question from a Canadian Buyer looking at Arizona foreclosed homes. Click here for the full Trulia dialog.

One rule of thumb for Canadian buyers that are not paying cash? Get your financing in order BEFORE you start looking. It can take longer than you think.

Here is another important point, according to Barbara:

"Being in a different country does present its own unique challenges. Be sure that you have an agent in place here that has a team of individuals that can help with all aspects of purchasing a home including financing, insurance, accounting, etc. You don't want to be on your own for investigating and finding each professional you need via long distance."

According to the Phoenix Business Journal, part of Arizona’s appeal to Canadians is that the exchange rates have been fairly level between the U.S. and Canadian dollar.

10 Questions Canadian Buyers Should Be Asking AZ Real Estate Agents
BEFORE they decide on a long-distance partnership:

1. How many out-of-town investors have you represented?
2. What is your process for selecting good investment properties?
3. What is your average vacancy rate for properties you have selected for investors?
4. What about for properties brought to you for property management that have already been purchased by the investor?
5. What other resources do you offer, such as insurance, mortgage, title, taxes, etc.?
6. What happens when I go home?
7. Give me some examples of properties you have selected for an investor, and walk me through their process start-to-finish, all the way through the signed lease.
8. Give me some examples of what you think makes a good investment and why.
9. What data do you have that supports your theories?

Post a question for Barbara on Trulia or read her other blog articles here.

Do You Have a Realtor in the Family?

by Barbara Broyles

Almost everyone has a friend, cousin, brother, sister, or uncle that holds a real estate license. But real estate transactions are much more than a simple relationship business. Especially when it comes to building a real estate investment portfolio.

Is that family member or acquaintance really who you want to trust with your financial future?

Unfortunately, most people don’t understand the true significance of a good agent. Obtaining a license is not that difficult, but keeping up with market trends and truly studying the financial end of real estate is very complicated.

Why it matters
Right now, the feeding frenzy is at the bottom of this market - meaning the lowest priced homes - and homes can be purchased as low as $40,000.

Does that make it a deal? While it sounds reasonable and smart, buying low is only a fraction of the equation when it comes to owning investment properties.

What if it takes six months or more to get that home rented?

Will you get the kind of tenants that you really want in a home that is in a low priced, low rent neighborhood?

How often will you have evictions?

What kind of rehab work will you have every time a tenant moves out?

These kinds of questions are essential, and ones that the right real estate agent should be helping you ask AND answer.

Selecting an agent
Investing in Real Estate is not a one-size fits all, and the right agent should require a detailed consultation to learn about your needs, your finances, and many other issues. Your portfolio should be as individualized as which home you choose to live in.

You should be asking about things like Return on Investment, Cash on Cash Returns, Cash Flow, Appreciation Rates - not focusing on how cheap a house is.

The bottom line is that your Realtor(r) or agent should be your guide to the right investment home, not someone who will just write a contract on a low price home then leave you to figure out the rest.

071709 © Barbara Broyles, HomeLovers

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Bio - Barbara Broyles

Meet Barbara Broyles
Associate Broker, Director of Portfolio Sales

As Director of Portfolio Sales and Associate Broker for HomeLovers, Barbara shares her strong investment and portfolio management expertise by actively training and managing a team of HomeLovers agents, and is an essential force behind its roster of successful investor clients. She also manages a personal portfolio exceeding $1,000,000.

Barbara's career began with stunning success, as she collected awards for "Rookie Of The Year" and "Top Salesperson" during her first year, and produced total sales exceeding $10 Million consecutively for two years. She earned Associate Broker status during her third year, and is a member of the Arizona Real Estate Investors Association.

Barbara's ongoing passion for investment management and education keep her at the top of her field. By combining her investment, financing and market acumen with proprietary HomeLovers portfolio planning tools and a network of proven experts in related areas such as financing, title/escrow, LLC formulation and more, Barbara inspires rapid confidence in her clients.

Prior to her career in Real Estate, Barbara was a 25-year veteran of client relations and management for Qwest Communications who was instrumental in large business sales, management of 30+ technicians, and the establishment two call centers from the ground up.