John Occhi, ePRO, Hemet-San Jacinto CA Real Estate, 951-443-6259

As a Real Estate professional I find it critical to a successful career path to invest in my continuing education. After all, what other professional would anyone ever want to use if they did not keep up-to-date on the latest laws, trends and acceptable ways of performing their duties?

Certainly none that I would ever want to pay money for.

So, as a REALTOR® who specializes in the listing and sale of REO, or bank owned homes, in the Hemet – San Jacinto it is important that I continue my education – not only for my benefit, but so that my client is getting the very best listing agent of their bank-owned asset.

FORMAL TRAINING

The National Foreclosure Sales Training Institute (NFSTI) offers a certification program that provided the basic backbone education of this REO specialty. After completing their training, I was awarded the professional designation of NFSTI Certified REO Specialist.

The concept of NFSTI is based on developmental adult higher education techniques. They are members of the American Society of Training & Development, so they take their role as information providers with the utmost care.

A statement on their website really sums these guys up when they claim, “dedicated to providing the most current and useful material available to assist the default industry in Elevating The Standards Of Operation".

INDUSTRY EVENTS

Staying on top of the trends of the REO industry calls for attending numerous industry conferences, trade shows and educational events. In addition to attending the California Association of REALTORS® (CAR) Annual Expo every October, I have attended two major events that are very pertinent to the REO sector. These events provide the opportunity an REO REALTOR® to keep up with any changes in the industry, gather fresh knowledge as well as networking with other professionals from across the country.

In April, 2008, I attended REOMAC Spring Conference in Indian Wells, California where there were many educational sessions that allowed me to look at new innovative ways of conducting my business and serving the needs of my asset manager clients and ultimately the investors who own the properties I have been charged with liquidating.

The second event of major consequence was held just last month in Las Vegas when the California Mortgage Bankers Association (CMBA) gathered to examine the current market and collectively prepare for the events that are shaping and changing the real estate market and economy as we know it.

The event I regret not being able to attend this year is the Annual Five Star Default Servicing Conference and Expo in Dallas, Texas. This event is all about training the REO Agent.

The Five Star Institute offers it’s industry respected certification program – perhaps the most respected designation a REALTOR can earn to show their proficiency in the field of REO real estate.

Fortunately, the Five Star Institute offers their certification through their website, online and I am in pursuit of the prestigious Five Star Certification.

Since one of the ways that I learn a topic is to write about what I have learned, I have decided to create a series of articles based on my quest and the courses that I enroll in. In no way will my articles be as thorough as the information that has painstakingly been presented in an extremely professional manner by the Five Star Institute, and of course my information will not lead to any type of recognized designation. However, I know that I will learn by sharing and am hoping that I may be able to answer some of the basic questions REALTORS ask about selling REO real estate.

HEY - THAT'S ME ON MSNBC

Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California. If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above website or phone number.

This article is part of a series based on my own experience and the lessons taught by the prestigious Five Star Institute in their “REO from A To Z” class that is necessary in order to obtain the coveted Five Star Designation, by far the most respected professional designation a REALTOR can earn in the specialty niche of listing and selling REO properties.

This is my house - in the Foothills of Hemet, California

The Hemet – San Jacinto Valley is not a typical location that many people relocate to because of the traditional reasons, such as a job or school. The Hemet San Jacinto Valley is a rather isolated destination, tucked into the base of Mount San Jacinto and surrounded by the Soboba Indian Reservation to the North and East and Diamond Valley Lake to the South.

In order to get a good clear vies of the area, Google has some pretty amazing satellite imagery that you can download for free – just go to earth.google.com. Once you have the program on your computer, you have free access to views of the entire world…nut just the Hemet – San Jacinto Valley.

You can use this tool to check out neighborhoods and even specific homes that you may be interested in buying. All you have to do is enter the address and you are taken to that exact address. You can than pan out and check out the rest of the neighborhood – see how close you are to the commuter routes, restaurants, schools and even where you’ll be working.

This is a cool tool that you can get lost in – it is easy to follow a road and wee where it will take you – and at $4 a gallon of gas, this might be a whole lot less expensive. There is a number of plug-ins that can make the experience even more interesting – depending on what you are interested in and where you are searching. Unfortunately, I do not believe there is a tour of the Hemet – San Jacinto Valley.

There are limitations to the program, but nothing that I think is a big deal. If you are looking to determine distances or routes you will want to use one of the more traditional map programs like maps.google.com, mapquest.com or maps.yahoo.com.

In the next article, I’ll reveal more tips for investigating the Hemet – San Jacinto Valley real estate market using the power of the Internet. Until then, don’t spend too much time looking at Google Earth – I’m sure you have something else important to do.

Blessings to all who read this,

John Occhi, REALTOR®
Century 21 Crest - CrestREO
CrestREO.Com
Hemet - San Jacinto Valley
951-927-9473

Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner.

This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

This blog is part of the ActiveRain Real Estate Network, which is a social network highlighting the best of Web 2.0. Information is provided with the intent of educating and assisting home owners, home sellers, home buyers and real estate investors with information the can be used to make better real estate decisions.

I am proud to be a full time REALTOR® with Century 21 Crest and the CrestREO Division who is proud to be a contributing member of the ActiveRain community.

Krunching – An In Depth Look at the New Investor Tool

I recently published an article about a valuable new tool I discovered on the Internet and shared with my readers. This incredible website crunches numbers for investment real estate – and in the Hemet – San Jacinto Valley, we have a lot of properties that will generate a positive cash flow. In case you missed the article you can go back here and read about Krunching.

The purpose of this article is to go through the site and take a deeper look at what is offered for free.

The first search I did came from the “Find Investment Properties” search found in the upper menu area, in the center – nest to the blue magnifying glass icon.

I was given the opportunity to limit my search by county, city, zip code, the entire state of California, as well as by zip code. There were a couple of other limitations that did not make sense to me – maybe next time I play, I’ll look closer at those.

In any event, I selected my zip code of 92544, singe family detached homes under $150,000. The results were 88 Active listings with 45 of them reporting a positive cash flow.

The reported positive cash flow ranges from $5,517 per year down to a $82 return on your investment. The Hemet homes that reported a negative cash flow started at $114 per year and ranged all the way to a negative $4,125 with 6 reporting results of unknown.

When I click on the link, a clean page opens up with basic MLS data to include the listing agent and the MLS number. There are of course photos (apparently up to 6 can be displayed) as well as 6 tabs that allow you to look at additional details such as “County”, “Comps”, “Investment Summary”, “Investment Detail” and “Area Statistics”.

COUNTY TAB

This is pretty basic information that REALTORS® can typically get their hands on through the various Title Company websites, where they have accounts. It confirms the physical characteristics of the home as well as tax data and limited information on the last transaction. There is data that is held back for the paid subscribers, such as the current ownership and the loan details.

A nice feature that is reserved for the paid subscribers is “Underwriting AVM”. Apparently, the site will assign a value for the property based on their proprietary algorithm and then crunch the numbers to determine what the current Loan to Value is.

COMPS

A nice use of Google Maps where comps are identified within a 1.5 mile radius. The first 6 show up on the first screen shot and then you have the opportunity to “Show All”. You can also select the comps you want to view and narrow the search down to what you believe are the best comps to use in your analysis.

Remember now, these are only ACTIVE Comps – if you want the sold, you have to be prepared to pay the monthly fee.

Interestingly the data in the grid shows DAYS on MARKET (DOM). I was under the impression that the MLS quit sharing that information and it was only available on the AGENT REPOERT in the MLS. I’m not happy with that, hmmmm.

At the bottom of the page is a RENTAL COMPARABLE summary. Be careful if you select one of the reports available here – it will take you to a whole new site and you may lose your location and have to re-enter the criteria that got you where you were.

INVESTMENT SUMMARY

This is the interactive calculator where you can play with the numbers and KRUNCH away.

This is a real cool tool – as quick as you change a variable the Summary changes. There are a series of built in variables for you to select from and of course you can always put in your own custom numbers.

The seven variables that you can work with include, Purchase Price, Market Value, Market Rent, Appreciation (%) over a 5 year span, Rent Adjustment (%) also over a 5 year span, Financing options and Operating expense options.

You can spend some time here – playing the old “what if” game. It is kind of fun, too.

The summary itself spans out 5 years and covers Sales Value, Rents, Cashflow Before Taxes, Cash-on-Cash Return and Capitalization Rate.

INVESTMENT DETAIL

This is another page chock full of valuable information that I believe is generated based on the current scenario from the Investment Summary tab. This page breaks each category down into a five year analysis.

First there is the Net Operating Income report that covers Maximum Possible Rent, Vacancy Allowances, Management Fees, Tax Assessment, Insurance Service and Repairs leaving you with a 5 year projection of Net Operating Income.

The Cashflow report crunches the Net Operating Income and deducts the Debt Service, leaving you with the Cashflow Before Taxes.

As an investor, there always has to be an exit strategy to every property and of course this program allows the user to look at the

Sales Proceeds from a Hypothetical Sale. It takes into consideration the cost of the sale, the mortgage payoff, the amount of principal paid on the debt and then your Before Tax Sales Proceeds.

The tab ends with a look at the Basis, creating an Adjusted Basis and then looking at the Taxable Gain/Loss.

AREA STATISTICS

The final tab has limited free information – most of it is reserved for subscribers. Again, this is information that any REALTOR® worth their salt already can provide their real estate investor clients. We are talking about Property Types, Occupancy and Vacancy.

There is a grid that tells the viewer how many Residential addresses are in the tract as well as the Zip Code and how many vacancies there are (both in a real number and a percentage) and then the same for Commercial Addresses.

CONCLUSION

When all is said and done I have to admit that I am impressed with the accuracy of the data that Krunching provides. They do a very good job in presentation – not overloading any one page, but keeping the relevant data together. I am certain that this will become a powerhouse real estate website…maybe even still another place for us to advertise or to buy leads. Oh well, at least we still live in a free market economy.

Now have a blessed day,

John Occhi, REO REALTOR®
Century 21 Crest – CrestREO
www.CrestREO.Com

Blessings to all who read this,

John Occhi, REALTOR®
Century 21 Crest - CrestREO
CrestREO.Com
Hemet - San Jacinto Valley
951-927-9473

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Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner.

This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

This blog is part of the ActiveRain Real Estate Network, which is a social network highlighting the best of Web 2.0. Information is provided with the intent of educating and assisting home owners, home sellers, home buyers and real estate investors with information the can be used to make better real estate decisions.

I am proud to be a full time REALTOR® with Century 21 Crest and the CrestREO Division who is proud to be a contributing member of the ActiveRain community.

call me direct for your Hemet – San Jacinto Valley Real Estate needs, 951-443-6259

Investor Number Krunching – A New Web Based Tool

There is a mew website, Krunching, that once it becomes known should become as common place in the world of real estate websites as Zillow, Trulia, PropertyShark, RealtyTrak, ForeclosureRadar and all the other innovative sites that are transforming the real estate landscape.

This site is rather unique in it’s approach as it “Krunches” numbers for potential real estate investments, allowing the investor to analyze any piece of property, combining real estate information with the multiple listing service and it’s own set of digital tools that allow the real estate investor to crunch the numbers.

The site, www.Krunching.com is the brainchild of Brian Fudge who aside from being an active real estate investor is a bit of a geek, having worked in the video compression technology field. He has felt that there was a lack of good investing tools available to the contemporary real estate investor.

Krunching has an easy to use interface, with map based displays of comp properties as well as a number of reports that can be generated including cash flow, rental market analysis and market trends. The site can generate some slick reports that can be used for presentations to clients.

The program currently has tow programs with the promise of a third, just for REALTORS®. The first version, the “Visitor” is free and just a teaser of what it can do. The paid version, “Power Investor” is $39.95 a month. The yet unreleased REALTOR® version promises to include everything the Power Investor offers plus it will allow us to brand the reports and be able to send them to our clients and prospects.. Unfortunately, there is not yet a price released for the REALTOR® version. (I emailed them last week when I first stumbled upon the site, but have not heard back yet.)

Both version active allow the user to play with the numbers on an interactive calculator which is pretty cool. If you don’t like the rent projections, lets say, you can get as conservative (or aggressive) as you care to. MLS active comparables are also available for both the free and paid versions.

To include the sold data and access to three years worth of property data you will have to step up and become a Power Investor at the Krunching site. Other advantages to the paid version is you can search by cash flow - how cool can that be? There are a number of other custom features and notices as well.

Now for the sad news…this site is currently only available for properties throughout California and I can not figure out what the plans are for the other 49 states other than the company has plans to expand.

The other issue I am not 100% comfortable with is the fact that the site is owned by a Real Estate Broker. So, I have to question myself if I generate a report for an investor client, will that same client be solicited in the next few days…or will Krunching be looking to me for a referral fee at some point?

Anyway, it is a pretty cool site that I thought I would share. I think I’m going to go ahead and Krunch some numbers on a couple of properties that are on my radar and perhaps report back here.

Blessings to all who read this,

John Occhi, REALTOR®
Century 21 Crest - CrestREO
CrestREO.Com
Hemet - San Jacinto Valley
951-927-9473

Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner.

This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

This blog is part of the ActiveRain Real Estate Network, which is a social network highlighting the best of Web 2.0. Information is provided with the intent of educating and assisting home owners, home sellers, home buyers and real estate investors with information the can be used to make better real estate decisions.

I am proud to be a full time REALTOR® with Century 21 Crest and the CrestREO Division who is proud to be a contributing member of the ActiveRain community.

Buying a Hemet – San Jacinto REO Home: The Loan Process

Many people want to take advantage of the current market conditions in the Hemet – San Jacinto Valley at the eastern end of the Inland Empire, in Southern California because we have such a high foreclosure rate and there are many bank owned (REO) homes for sale in the region at very affordable prices.

Finding a good home is typically not the problem – as we have many to choose from. Today there is even a wide selection from as low as $75,000…if you don’t mind taking care of some repairs. There are many near move in homes available for well under $150,000 – maybe just in need of some fresh paint and flooring.

The process should not start with looking at homes, but rather with qualifying for financing. Perhaps the biggest determent in the market today is not the inventory but the financing options, as more and more lenders tighten their belts and really narrow down the availability of consumer friendly loan products.

One of the big misconceptions about financing a Hemet – San Jacinto REO home for sale is that there is money available to borrow for repairs. While there are approved FHA programs (and others) this does not mean that there are lenders willing to take on that kind of risk. So, for the most part, rehab money is not available to borrow via traditional resources.

The other problem today is there is not a 100% loan. State Income and No Document loans are all but a distant memory. Today the borrower must have decent credit, a low debt-to-income ratio as well as verifiable employment and income.

The FHA has a First time Home buyer program that many homebuyers in Hemet – San Jacinto take advantage of. The FHA will allow the seller to contribute 3% towards the buyers closing costs. Today most lenders are willing to participate in this program in order to sell the REO home.

You should be cautioned though, if the home is listed for a really good price and it is new on the market or has just taken a dramatic price reduction and is generating a lot of activity then you may want to stack the fees you are asking for.

As an example, there was a nice 2 bedroom 2 bath REO Hemet home that just came on the market, last Friday for $75,000. It was not very rough – but it did need a bit of work. I saw the property on Sunday with my buyer. We wrote our offer and submitted it to the listing agent for $85,000, asking for the 3% seller contribution towards the closing costs. About 10:00 a.m. Monday morning spoke with the listing agent and discovered that I was right in the middle of 8 offers, (with more anticipated coming in) and advised if my client wanted the property, they should submit their “highest and best” offer.

The flip side is homes that have been on the market for over 30 days are obviously not a hot commodity and there is room for negotiation. With another buyer, we found a home in the MLS that had been on the market for 43 days and had not yet reduced its list price of $92,000. Again, the home was in fair condition and only requiring the cosmetics of fresh paint and flooring. Yes, there were projects discussed to improve the property – but they were not necessary to make it move-in ready. In this case we offered $85,000 and requested the seller contribute the 3% ($2550) towards the buyers closing costs. Done Deal! Another Hemet REO comes off the market and opens escrow.

Back on Topic – The Loan Process

Regardless of whether you are buying an REO property of a For Sale By Owner (FSBO) or any other Hemet – San Jacinto real estate for sale, it all begins with money. So unless you are a cash buyer you will need to obtain financing.

The First Step: Apply

The application process is rater simple. As a Hemet REO REALTOR® I prefer to have you speak with one of the lenders that I do regular business with. It’s not that I have a financial incentive that you work with anyone; it’s that I have an established working relationship and an open avenue of communication that helps get the job done. Teamwork is critical to a smooth transaction and closing escrow on time.

Typically, when we meet, I will put you on the phone with the Loan Officer that I believe will best be able to work with you in your particular situation. The lender will answer general questions about available loan programs based on the verbal answers you provide to the questions the Loan Officer will ask.

Second Step: Pre-Qualification

After you application has been made and the Loan Officer has you gather additional documentation and your credit has been reviewed a decision can be made based on viewing your total picture.

Based on the complexity of qualifying and underwriting criteria the lender may suggest several different loan programs that may work best for you. The Loan Officer is a professional and his expertise comes from knowing the inventory of loan products and matching you to the one that works best for you…not the one the lender can earn the highest commission for.

Once you jointly agree with the Loan Officer, a Pre-Qualification Letter will be issued letting you know how much home you qualify to buy and what your own financial contributions will be. Additional information may include interest rate and monthly payments.

Step Three: Processing

This is where a file is built that assembles all of the documents necessary and verifies all of the information provided such as you income, your debt, your assets as well as all of the information on the property you are buying.

During this phase, the property will typically be appraised and any inspections completed so the lender will know the condition of the property. Remember, the lender is not only taking a calculated risk on you the Hemet REO home buyer, they are also taking a risk on the Hemet REO home – and who really knows what condition that is in?

Step Four: Doc’s

Document Preparation, of Doc’s as it is often referred to, is a complex process that must comply with the law that requires the lender to send you a full disclosure that confirms all of the loan details.

The actual loan documents are also prepared and arrangements for signing with a notary are made. Many times, Loan Doc’s are signed in the Escrow office. However since many REO’s contract with escrow companies outside of the area, arrangements may be made to have a mobile notary come and sign the docs with you, in your home or other place of mutual convenience.

Step Five: Approval

After the loan documents have been signed, notarized and returned to the lender, they are given a final review to make sure all of the “I’s” are dotted and the “T’s” are crossed. Although it is unusual, the lender may still require additional conditions are met. Once all of the conditions are met, the lender approves the loan, making their final commitment.

Step Six: Funding

After the lender makes the final commitment, the funds are wired to the Title Company which disperses them to Escrow. Escrow makes the disbursements to everyone who is entitled to any of the monies. Prior to funding, escrow would have issued a preliminary HUD-1, or net sheet. This form tells where every cent is going. If there are any challenges, that is the time – once money leaves escrow it is almost impossible to get back.

Step Seven: Recording

This is it! Recording will typically take place the day after the loan funds. Title submits all of the documents necessary to the County Recorder early in the morning and usually starting around 2:00 p.m. the Recorder will start releasing them, with the goal to have everything done by 5:00 p.m. Once the Deed has been recorded, title to the REO property officially changes hands and you are now the new owner.

There you have it – the loan process – over simplified maybe, but at least if give you an idea that there is a process that no one person has control over. Your Loan Officer can monitor what is going on and is often the messenger when there are issues that need to be dealt with.

On the other hand, your REALTOR® coordinates not only with the Loan Office, but every other aspect of what is taking place to close the escrow…and believe me, there is a lot more than can go wrong when you buy a Hemet – San Jacinto Valley REO home.

Blessings to all who read this,

John Occhi, REALTOR®
Century 21 Crest - CrestREO
CrestREO.Com
Hemet - San Jacinto Valley
951-927-9473

Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner.

This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®. The views and opinions expressed are just that - views and opinions of John Occhi and those who comment. Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance.

This blog is part of the ActiveRain Real Estate Network, which is a social network highlighting the best of Web 2.0. Information is provided with the intent of educating and assisting home owners, home sellers, home buyers and real estate investors with information the can be used to make better real estate decisions.

I am proud to be a full time REALTOR® with Century 21 Crest and the CrestREO Division who is proud to be a contributing member of the ActiveRain community.