Broker RoundTable Notes 5

Broker RoundTable Notes 5 by Bill Roberts

Last night we had our semi-monthly Broker RoundTable meeting of the Mike Watson Institute of Real Estate Investing. We had about twenty people in attendance. The membership is made up of Mike Watson students. Most of us are real estate brokers but some are investors, contractors, architects, and other real estate related service providers.

The meeting always starts with a discussion of the "market." The fed's rate drop was discussed. Several of us are in the mortgage industry so the comments were flavored by our "take" on its effect on mortgage rates. General consensus is that the effect will be small but another rate drop will really help. Stated-stated was discussed as well. Being that it only is available for conforming loans it is not much help to us in San Diego.

Increasing FHA loan limits would be a great help, but it seems that it is going to take a while yet. San Diego should get a high value area limit like Hawaii has.

Next we discussed deals in process. Financing has become an "issue" for most of these deals. Where once 90% financing was available, banks are looking for more "skin in the game." One deal that BofA was going to make a 90% loan has been "conditioned" to 80%. They said if it were a new application it would be at 70%. Because it is a million dollar deal they need to come up with an additional hundred grand.

Another member has 2 4-plexes in Houston that he wants to get rid of, cheap. In the ensuing discussion it came out that the neighborhood wasn't so good, the buildings were single-metered, and the tenants had other priorities than paying rent on time. I say good luck to him being able to unload these things.

Another member had a house on a large lot (one acre) under contract. He wanted to do a lot split to six lots. The city said five max. Now he says the deal doesn't "pencil." I think that he is just scared by the current climate. He doesn't want to get stuck. Someone mentioned "wholesaling" the lots to a developer, but it appears that developers won't pay enough to make it worthwhile.

The meeting was closed on a kind of down note. Usually, we leave with enthusiasm. Oh well, maybe next time.

Note: The Mike Watson Institute teaches Realtors how to be your own best client, by creating value through use change. I have written several articles on some of these investment strategies. You can check them out.

            One Hit Wonder part 1

            Can You Get a Good Return on Land?

            106º Today and We Went Looking at Land! Why?

            Land Banking - Isn't It Time You Tried It?

            I would never buy raw land part 2

            Highest and Best Use, Part 3

            Highest and Best Use, part 2

            Highest and Best Use

I'm always looking for a few good members for my PowerTeam.

            What is a PowerTeam?