Renee Burrows - Las Vegas NV Valley - Homes For Sale - SRES - SRS - AHWD - ABR

Some days are a surge of excitement, for all the job opportunity I have here, and some days it is infuriating, like living next to a pre-foreclosure and hearing from renters losing their security deposits from being foreclosed on.

When I saw the Manhattan mid rises going back to the bank in January I felt like I should call a friend who rents in there but then again, she was renting from a "friend" so she was safe, right? Wrong, I got a call from her two weeks ago. She was notified by the cash for keys agent. (*&$@^&$@&*

I could go on and on with stories about doing BPO's with a fresh lease option on the books, renters paying higher than market rent, loan is in default. (vomiting in mouth) I wonder how much their option money was.

The emotions of the ones getting foreclosed on are sad (obviously!) to cavalier. You got to love :tongue in cheek of course: the cavalier who think they are entitled to squeeze more money out of the home by renting it out, taking some unsuspecting soul's money and deposits through no fault of their own and then fire selling every appliance and fixture that may be worth something.

I bought in 2002, pre-boom. I extracted a little money in 2004 to put in a pool. We still had $300K in equity AFTER that loan was taken out. Let me tell you something, it's gone now because of the cavalier attitudes and what REO property has done to our market in regards to appraisals. Am I going to go the way of the cavalier and let it go back? No! Why? Our loans are fixed and we can't even rent a comparable property for cheaper than our house payments! Am I angry or bitter that we don't have equity? No! Why? Because my husband and I bought this home as our "forever house". Our kids will be cleaning it out when we go to the nursing home or die. We didn't buy it as an intention to be an ATM or immediate investment.

So you are wondering to yourself, "why are there angry undertones to this post?" Hmmmm you can feel the vibe can you not?!?!?!

It's because of the home I am currently living next to. Mr Cavalier Investment who bought in 2005. Why do I know it was a cavalier investment? Because it was placed back on the market less than a handful of months later for $70K more than they bought it for. It wasn't selling, it wasn't selling, it wasn't selling so they placed it for rent. The rental screening wasn't all that wonderful. Tenants would come and go. The neighbors have dubbed this home "the crack house", "the whore house", "the meth house", "the dog house", etc. You get the picture. Landscaping has been non-existent since the watering stopped in 2005. Pool has been green between renters, a public health nuisance. Guess they haven't heard of west nile virus.

The last renters were great. They only had about 10 people living in the house, an unlicensed utility trailer sitting in front of my newly landscaped front yard for 8 months and a pit bull that would get out and bare his teeth to anyone who crossed their path. Animal control would pick him up, he would be back in less than the designated holding time. City code enforcement would do nothing about the trailer. We don't live in an HOA because I thought that when I bought this home that people who CAN SPEND A QUARTER OF A MILLION DOLLARS FOR A HOME CAN MONETARILY TAKE CARE OF THE UPKEEP.

So there lies my frustration my anger. It's three years of living next to neighbors who don't give a rat's behind about respecting their other neighbors, an eyesore and a public health hazard (green pool).

You can probably imagine the rush of joy & glee I felt when I got a call from an agent friend who was doing the default BPO asking questions about the neighborhood.

These vacant or deteriorating properties are taking it's toll not only on the bank's asset books, but on public & HOA resources. Not only that, but there are still some of us owner occupied living in the land of the vacant foreclosures who really do care.

To Every Mr Cavalier Investor: Please stop preying on unsuspecting renters, please stop being a burden on the HOA and our public resources (Health department & code enforcement). PLEASE PLEASE PLEASE CALL YOUR ATTORNEY and ask them what a "deed in lieu of foreclosure" is and ask if he recommends one in your situation. If your attorney does recommend it, please contact your bank instead of dragging this out. Make this short and sweet for you and make this short and sweet for us and make this short and sweet on our public resources. Let's get this property back to the bank so they can list it and sell it to (hopefully) some one that will care and love the property.

You see, this is just as painful for your neighbors as it is for you. Yes this will hurt your credit for 7 years, we have been dealing with this for 3 years already. My teenage kids and their friends see that green pool from our two story windows and they ask if I know anything about that property yet. My other neighbor goes over and covers the pool after a wind with the pool cover so we don't have to see it, until the next wind! I picked your weeds out of our side yard for two years and then decided I was DONE!

PS: I have wanted to write this for a long long time. It was extremely emotional for me to do this obviously. That BPO was done in Jan, the renters moved out in Mar and the darn thing still hasn't gone to a trustee's sale. I am only wishing and hoping for the day it is listed and someone will buy it to gently rehab and love just as much as we do (and many of our neighbors) with our own home(s).

PSS: Actual pictures so you can feel my pain.

This Rhodes Ranch Area resale market report was generated on April 30, 2008 (graph on bottom):

• Active Listings: 405
• Under Contract: 201
• Sold 3/24-4/24/2008: 50
• Months Inventory: 8.1
• Low: $89,900; High: $3,490,000; Median: 235,000(listing prices only)

Rental Market Report generated on April 30, 2008 (graph on top):

• Active Listings: 72
• Under Contract: 12
• Leased 3/24-4/24/2008: 52
• Months Inventory: 1.4

Median List Price for an area rental: $1250/month, Low: $795, High: $3500

Information from GLVAR is deemed reliable but not guaranteed.

Last Market Report Generated April 16, 2008

Click here to view past market report graphs and active rental, resale and new construction listings in the Rhodes Ranch Area

Includes: Apache Hills, Apache Springs (The Falls), Astoria Homes at Rhodes Ranch
(Independence), Canyon Trail, Huntington, Liberty @ Warm Springs, Maplewood, Rhodes
Ranch, Richmond@ Rhodes Ranch, Sierra Madre, Venezia, Vistana.

Here it comes, the avalanche of lawsuits because owners are claiming that they bought because they were promised one thing and then they delivered another.

Here is what I wrote in November 2006:

Las Vegas Condotels - Sizzle or Fizzle? Losing Bet on Immediate Cash Flow, Placing Your Wager on a Long Term Investment: What Joe Doesn't Know!

Here is what is going on now:

• InBusiness Las Vegas April 18, 2008 issue: Luster Fades for Condo Hotels
• RealEstateJournal.com, April 8, 2008: Condo-Hotel Buyers See Investments Sour
• Las Vegas Review Journal February 10, 2008: Condo-Hotel Project Faces Class Action Lawsuit

Apparently the condotel owners are not seeing the returns they are promised and are trying to do something about it. Just a little trip to the Las Vegas Convention & Visitor Authority's website could have saved a ton of money and heart ache for people who didn't understand that the amount of rooms (%wise) does not add up to the increase in visitor volume (%wise).

A good long term investment, the verdict is still out. An immediate return on your buck, HECK NO! Seriously, you probably would have received a better return buying a regular high rise condo on or near the strip, buy some cheap furniture from Ikea and straight out rent it out yourself.

Economic Conditions for the Las Vegas Valley March 2008

Housing Conditions:

• Foreclosure/Short Sale Listings (4/29/2008): Total Listings 21,669; Short Sales: 5270, 24% of all listings; Bank Owned Listings: 3859, 17% of all listings.
• New Home Sales (March 2008, units sold): 869 Year Change -29.3% (excl condo conversions, highrises)
• New Home Sales (March 2008, median price): $259,940 Year Change -18.1% (excl condo conversions, highrises)
• Existing Home Sales (March 2008, units sold): 1899 Year Change -30.7%
• Existing Home Sales (March 2008, median price): $230,000 Year Change: -19.3%
• New Home Permits (March 2008): 391 Year Change -79.9%
• Rental Rate (MLS Monthly Average March 2008): $1342/month

My analysis: Resale listings are down and pendings are up sharply, absorption rate is turning healthy. REO listings are in a seller's market. The Rental Market is turning. Fire sale prices remain attractive to both long term investors and buyers tired of paying rent. Distressed listings (foreclosures and short sales) are 42% of total listings.

New Residents/Employment Conditions:

• New Residents (March 2008): 5,378, Year Change -19.4%
• Total Employment (March 2008): 925,500, Year Change -0.3%
• Unemployment Rate (March 2008) 5.6%, Year Change +30.2%

My analysis: The rising unemployment rate concerns me. Availability of jobs will not keep new residents streaming in to town. Could be tied to construction jobs lost and lack of home equity money for home improvement services

Tourism/Gaming Conditions:

• McCarran Airport Total Passengers (March 2008): 4,120,158 Year Change -1.7%
• Gaming Revenue (February 2008): $865,968,262, Year Change -4.0%
• Visitor Volume (February 2008): 3,495,465, Year Change+2.6%
• Convention Attendance (February 2008): 893,982, Year Change +15.8%
• Hotel/Motel Occupancy (February2008): 89.4% Year Change -1.0%

My analysis: YAY for rising convention attendance! All other indicators are fairly stable. Gaming revenue down 4% should be a slight concern!

Sources: Salestraq, Home Builder's Research, Greater Las Vegas Association of Realtors, Nevada State Gaming Control Board, Nevada Department of Motor Vehicles, McCarran International Airport, Las Vegas Convention & Visitor's Authority, Nevada Department of Employment, Training and Rehabilitation

This is a primer (not intended legal advice, just my astute market observations as a real estate licensee in the state of Nevada) for anyone who is looking to Purchase or Sell using one of these types of financing. This post was prompted by Jeff Turner's most excellent post in response to a FSBO. This is a MUST READ.

Definitions:

• Owner Will Carry: Commonly referred to as "OWC". This means the seller will hold the note. Buyer usually must come up with a 10-20% down payment. Interest rates are usually higher than normal mortgages, depending on usury laws in your state.
• Lease Option to Purchase: Commonly referred to as "Lease Option". This means that the house is currently being rented out with an option to purchase at the end of the term. Terms can be flexible. Option deposits range generally from 3-5%. Option deposits are generally: a)forfeited at the end of the option term if the option to purchase isn't exercised or b)applied towards closing costs or down payment if purchase option is exercised. This MUST be written in the contract!!! Monthly rental rates are generally higher than market rates and sometimes a portion of that rent gets applied towards down payment or closing costs.

For Sellers:

• OWC: Base the down payment and interest rate (per your state's usury laws) on credit. SEEK THE ADVICE OF AN ATTORNEY and have the attorney write the note. As a Realtor, I would NEVER write a note myself or use a canned form you buy at a local office store! Treat this type of purchase as a souped up lease option. You also run the risk when changing title of new liens being added to the property. Make sure property use is clearly defined.
• Lease Option: Make sure the option period is short and cannot be reassigned. Make sure price is clear. Make sure what happens to the lease option deposit is CLEARLY DEFINED in the contract. These should be treated like a LEASE and like a PURCHASE. There should be a leasing contract and there should be a purchase contract.

Thoughts and reflections on both of these financing types:

If you don't know what you are doing you will be preyed on by what I call "the unrentable". The "unrentable" usually have extremely poor credit and are living on (what I call) Noah's Ark. Noah's Ark means they have a plethora of animals and more than likely one or more of them are on "banned breed" insurance lists. Your insurance could be dropped and your home may become uninsurable on the C.L.U.E. report if your insurance company has banned an animal breed and they find out. Generally if these types of people were to do a normal lease or rental home, they would be required to double or triple their security deposits and their monthly rent could skyrocket. So their thoughts are "why not a lease option or OWC." They pretty much have to come up with the same $$$.

These types of transactions can be done with success. You just need the correct purchasers. The real reason behind a lease option would be someone who is speculating and doesn't want to risk in a declining market or they are new to the area and just want to test drive.

Lastly, make sure you DO NOT HAVE A MORTGAGE ACCELERATION CLAUSE in your note. Most lenders do NOT lend to allow this type of financing and you could possibly have your mortgage accelerated if they find out you are doing this!

For Buyers/Renters:

• Get a lawyer and protect yourself from scams! I was bumping around on a major auction site (starts with an e) last week and was AMAZED at the amount of scams out there. I even checked title on some of them and what I found was atrocious!
• Escrow the funds that are held as down payments and lease option deposits. Many homes in the Las Vegas area are getting foreclosed on and I would say a majority of people getting foreclosed on are renters. The best way to protect your deposits and down payments would be to have a licensed and bonded escrow company HOLD those funds and even make the monthly payments in regards to anyone who can put a lien and foreclose on the property. (Mortgages, HOAs, Taxes, Liens, Sewer, Garbage, etc etc etc)

Now if you still haven't read Jeff's posting, go read it now and I will wait. tap, tap, tap, tap.

You are back, great! I am simply amazed by how many people called replied with advice that this person needs a Realtor. You can do this type of transaction WITHOUT a Realtor, and rather easily if you understand and do your due diligence (either buyer or seller!) What you do need to do one of these transactions is AN ATTORNEY who SPECIALIZES in these types of transactions. There are scams on both sides, folks! When I do these types of transactions an attorney is a MUST once I procure the buyer for a seller or vice versa.

It is easy to procure a potential buyer for ANY of these types of financing. What isn't easy is qualifying and making sure they are doing it for the right reasons!