- Sacramento Real Estate Adventures - Your Sacramento Real Estate and mortgage blog!

If you are looking to invest in the Sacramento Real Estate Market, the more information that you can get about our area the better! Many investors come to Sacramento to buy cash flow homes. If you are an out-of-town investor, you will want to do as much research as you can about our Sacramento real estate market.

I came across this graph from Lenn Harvey's real estate blog and thought this would be a great tool to share with the Sacramento real estate community.

Forbes magazine created this cool tool based on Internal Revenue Service data.  Forbes US Migration Map allows you to choose any county in the United States and it will show you where people are moving from and to.

Please note: This chart does not count inter-county moves for more than 10 people.

The map to the right visualizes people who have moved in and out of Sacramento County. Visit the link below, to click on any county for the details of that county. The black lines indicate net inward movement, red lines net outward movement.

Check out this interactive tool >>

If you want to purchase investment property in the Sacramento area and want to work with an investor friendly Realtor give me a call or contact me! 

I found out Friday that my out of town investor client is in escrow on a short sale duplex in Sacramento! My investors know Sacramento is a great place to bring their investment dollars!

I have been working with my clients to locate a multi-family investment in Sacramento that provides them a minimum return of 10% after vacancy and maintenance deductions.

If you are from out of town and are looking to invest in the Sacramento Real Estate Market, once you get into escrow, you will have to decide if you will come into town for your inspections.

Here are some things to think about:

Don't forget your inspections need to be done within a specified time frame!
Keep in mind that your contract requires you to perform in a set amount of days. This number is typically between 10-17 days, but every offer will vary. The time clock starts the day the contract is accepted or if a short sale the date the short sale is approved. If you want to attend your inspections, you will need to make yourself available during the required time period.

Do you really need to be there?
It really depends on you. Some investors rely on the home inspectors report to confirm the condition of the property. Others need to be on site during the inspection to ask questions as items are discovered. It really is a personal choice.

When I have an out of town investor come to Sacramento for an inspection, I schedule other vendors to show up on the same day. This way my investor can meet with their new property manager, contractor, or other service provider needed to get the units up and running and generating income.

It is important when investing out of town that you work with a Realtor who not only understands investment properties, but also has a team of service providers in place to assist you.

If you would like to find out more about what the Sacramento Real Estate Market has to offer you, please call me at (916) 585-3858 or send me an email at ErinNewington@kw.com !

You can also check out my other Sacramento Real Estate Investment Club blog - www.ElkGroveREIA.com !

 

There are popular zip codes that our Investor clients are purchasing Sacramento cash flow homes in! I thought it might be interesting to do a series of blogs that would show what these investor friendly zip codes have done in 2009.

Keep in mind the goal of most of our investor clients is to purchase a Sacramento home and secure monthly cash flow.

One of these popular zip codes is 95823. It offers a low price point homes (as you can see below ) in the 115-130k range that cash flow.

This zip code located in the south Sacramento area and attendees down to the outskirts of North Laguna (Elk Grove area).

This is an area that we fequently visit during our Sacramento Real Estate Investor Boot Camps because the cost of the homes are in the target range to achieve cash flow and there are great niche neighborhoods if you know where to look. 

 

 

 

According to Zilpy.comhere are the rental income numbers for 95823. Keep in mind these are not figures you should solely rely on. This website will give you a snapshot based on collection of data from all available sources (newspaper classifieds, online classifieds, apartment rentals, etc.) and Zilpy.com will filter the data based on your criteria (proximity, property type, crime rate, population, income, etc).

The lower price points, great niche areas, and rental income possilble above your typical mortage payment (with 25% down)... makes 95823 worth looking into!

Here are some statistics for 2009 for this zip code: 

If you are interested in attending our next Sacramento Investor Boot Camp and Foreclosure Tour make sure to enlist at our website www.SacramentoInvestorBootCamp.com!

If you like the charts and graphs above and want to keep an eye this zip codes... sign up for our free reports sent right to your email!

 

I recently attended a local Sacramento Investors Club Norcal Reia. Their speaker for the month was Bruce Norris of the Norris Group. Bruce said that if you are putting offers on Sacramento short sales as an Investor, you have to disclose to the lender who approved the Sacramento short sale if you intend to flip the property or you are committing fraud.

This definitely peaked my interest! This makes absolutely no sense to me!

If an Investor is putting an offer on a short sale (or any home for that matter), the goal is to get the best deal they can on the property. When the offer is made on a short sale, the current owner agrees to the Investor's offer first, and then the signed contract is forwarded to the Lender(s) who hold the lien(s) on the property. It is up to Banks involved to do their due diligence to see if the current owner qualifies for the short sale and determine the current value of the property. 

In order to determine the current value of the short sale home, the Lenders involved will order a Broker Price Opinion (BPO) and sometimes a full appraisal will be completed. It is not unusual for the Lenders involved to order multiple BPOs and/or appraisals in order to get clear on the current value of the home.

Bruce Norris says as an Investor you must disclose to the lenders involved if you intend to flip the property for a profit. He mentioned if you do not fully disclose it could be construed as fraud because you are getting the property at a discount.

This makes absolutely no sense to me at all. So when did getting a deal on a property equal fraud? Now I can see if you take advantage of an elderly homeowner and practically steal the home from them. That person may not know the current market value and may rely on the Investor to tell them what the property is worth. In this example I can see why this scenario may be fraud.

BUT a national bank who has more than likely done multiply BPOs and maybe even a full blown appraisal or two... How in the world is an Investor going to manipulate the Bank?  Come on! These national banks are in the business and have ample resources to protect themselves. If they decide to let the property go at the discounted price ... Then why do I as an Investor need to tell them what my intentions are once the sale goes through? 

Bruce mentioned that he learned of this from the FBI Mortgage Fraud website. The very next day I was scouring that website trying to determine what he was referencing. I read through the 2008 Mortgage Fraud Report and every single article regarding short sales. I could find no reference or examples that would indicate a Buyer should disclose what they intend to do with the property. I even contacted him through his blog to try and find out what reference material he used, but I never got a response back.

Here is what I did find out...

Here is the definition of mortgage fraud according to the FBI...

Mortgage fraud is a material misstatement, misrepresentation, or omissions relied upon by an underwriter or lender to fund, purchase, or insure a loan. Mortgage loan fraud is divided into two categories: fraud for property and fraud for profit. Fraud for property/housing entails misrepresentations by the applicant for the purpose of purchasing a property for a primary residence. This scheme usually involves a single loan. Although applicants may embellish income and conceal debt, their intent is to repay the loan. Fraud for profit, however, often involves multiple loans and elaborate schemes perpetrated to gain illicit proceeds from property sales. Gross misrepresentations concerning appraisals and loan documents are common in fraud for profit schemes and participants are frequently paid for their participation.

Source: FBI Financial Crimes Section, Financial Institution Fraud Unit, Mortgage Fraud : A Guide for Investigators, 2003.

Although I could not find what I was looking for... I did find common schemes some shady characters are using to rip off owners and the lenders...

Short Sale Schemes
In a typical short sale scheme, the perpetrator uses a straw buyer to purchase a home for the purpose of defaulting on the mortgage. The mortgage is secured with fraudulent financial documentation and information regarding the straw buyer. Payments are never made on the property loan causing the mortgage to default. Prior to the foreclosure sale, the perpetrator offers to purchase the property from the lender in a short-sale agreement. The lender agrees without knowing that the short sale was premeditated. The mortgage owed on the property often equals or exceeds 100 percent of the property's equity.

Short Sale Schemes - Modified
Short sale fraud schemes continue to be used in combination with foreclosure rescue schemes in an effort to victimize homeowners and financial institutions.  Perpetrators across the country are recruiting real estate agents and paying them referral fees for locating and soliciting homeowners undergoing foreclosure.  Homeowners are entering into agreements with perpetrators deeding their property to them in the form of a land trust.  The homeowner is listed as the beneficiary of the trust and the real estate agent is listed as the trustor.  The perpetrators then negotiate a short sale with the lender.  After the short sale, the real estate agent sells the property for a profit to another previously identified buyer, but the lender and the homeowner do not know this.  In effect, the perpetrator sells the property for less than the mortgage and re-sells the property, often the next day, for a profit.

I can see why these acts would fall into the fraud category.... But how is making a low ball offer on a short sale misrepresenting the value of the property?

This low ball offer merely reflects what the Investor is willing to pay. There is no mis-representation of value on the Investors part as far as I am concerned. Just a willing buyer making an offer at the price they want to pay.

I don't buy it... What do you think? I would love to hear your thoughts about this subject!