DAVIDSON PROPERTIES
5711 Broadway ~ San Antonio, TX ~ 78209 ~ (210) 826-1616 ~ mail@dpisat.com
COMPANY UPDATES
Starting 2012, Davidson Properties will be
printing all leases, contracts, and correspondence double-sided to help conserve
paper.
This will also help with
file space for our office / clients, and tenants.
We are proud to "go green!"
NEWS ARTICLES
Turning Foreclosures Into Rentals. By: Tami Luhby.
CNNMoney Jan. 10, 2012.
NEW YORK (CNNMoney) -- Federal officials
hope to launch a pilot program in early 2012 to convert government-owned
foreclosures into rental properties. The program, which was cited by
Federal Reserve Chairman Ben Bernanke last week as one way to address the
housing crisis, would sell foreclosed homes now owned by Fannie Mae and Freddie
Mac to investors in bulk. The properties would then be converted into
rentals. The initiative began back in August, when the Federal Housing
Finance Agency, the Treasury Department and the U.S. Department of Housing and
Urban Development announced they were seeking suggestions on ways to dispose of
repossessed homes now owned by Fannie Mae, Freddie Mac, and the Federal Housing
Administration. In addition to getting the properties off the government's
books, officials are hoping putting the homes back into productive use will
stabilize neighborhoods and housing values. Also, it is looking to expand
the supply of rentals, which are increasingly in demand. The agency is not
releasing details on how the rental program would work, instead saying it is
"proceeding prudently but with a sense of urgency to lay the groundwork for the
development of good initial transactions in early 2012." Administration
officials said they are continuing to work with the agency to develop the
program.
HOUSING, STOCKS, GOLD AND OIL: HOT OR NOT IN 2012?
Until now, most foreclosed homes have
been sold individually because investors have demanded bigger discounts to buy
large numbers of properties. But federal officials are warily eyeing the
expected surge in foreclosures as banks ramp up their action against delinquent
homeowners. The process had been stalled since late 2010 when banks'
shoddy paperwork practices came to light. There are close to 2 million
homes in the late stages of delinquency, according to Lender Processing
Services. Since foreclosed properties often sell below market value, they
can wreak havoc on home prices. Converting these homes to rentals can both
help the neighborhood and minimize losses to Fannie, Freddie, and the FHA, which
hold about 250,000 properties, Bernanke told lawmakers last week. He urged
lawmakers to ramp up their efforts to fix the housing market, placing particular
emphasis on the problem of vacant homes on the market. "Restoring the
health of the housing market is a necessary part of a broader strategy for
economic recovery," he said. Bernanke's comments launched a full-court
press by Federal Reserve officials last week to raise awareness of the
continuing problems plaguing the housing market. His proposals were
quickly followed by Fed Governors Sarah Bloom Raskin, who spoke on ramping up
enforcement of mortgage servicers, and Elizabeth Duke, who said Fannie Mae and
Freddie Mac could do more to help heal the housing market. Meanwhile, New
York Fed President William Dudley gave a speech that touched on a wide range of
housing policies - including principal reduction and mortgage refinancing - that
he believes will boost the economy. The Fed has already tried to boost
real estate sales by pushing mortgage rates down to record lows through massive
bond-buying programs. But the renewed push for housing help indicates that
the Fed, which has basically run out of monetary policy ammunition to revive the
real estate market, is urging the federal government to ramp up its efforts.
"The Federal Reserve is signaling in even stronger terms the need for the
government to do more to help housing," said Jaret Seiberg, a policy analyst
with the Washington Research Group.
How Can Renters Solve the Housing Crisis? By: Greg Rand.
RISMedia.com. Dec. 10, 2011.
Residential real estate is not rocket
science. We know that this housing crisis is:
1.
Explainable -- bad lending, mad speculation, wild expectations, government
meddling.
2.
Isolated -- bad mortgages, negative equity, strategic default, government
meddling.
3.
Temporary -- demand for housing always catches up to supply eventually.
Anyone with any experience and perspective will agree that
this market will recover over the next 10 years, but what will this particular
recovery look like? Since the root of the problem was unprecedented, the
solution might be as well. My belief is that renters are going to solve
the housing crisis. Homeownership rates have fallen by a few percentage
points, which has translated into more than 4 million new rental households in
just the past few years. According to the Census, 1.4 million of those
were added between July 2010 and June 2011, showing that this trend is
accelerating. As a result, rental rates are growing at more than 5% per
year, and this trend is also accelerating. As a result of this, investors
are pouring capital into American housing with a long-term mindset, kicking this
trend into hyper-speed. This crisis will not be solved by enticing home
buyers. Their confidence is waiting for unemployment to come down and
government to act responsibly, which could take a while. But investors are
confident right now. Why? Because they see the big picture.
Rental demand equals stable cash flow. So what can be done to encourage
them? How about eliminating archaic waiting periods for investors who want
to buy foreclosures? How about eliminating waiting periods for investors
who paid cash and want to tap it with a refinance? Today they have to wait
months to put that money back to work. Why not eliminate the overall bias
against investors in FHA, Fannie Mae, and Freddie Mac, and require big down
payments to make it safe to lend, and lend. Better yet, keep your eyes
peeled for a private sector player to seize this opportunity to create America's
first national investor mortgage brand. The estimates are that half a
million investor loans close every year, and who owns that niche? No one.
The Martial Arts teach you how to use the weight and momentum of your opponent
against them (or so they say in the movies). This is the same thing.
This drastic increase in rental demand is a by-product of the foreclosure
crisis. Use it against the crisis by turning it into positive cash flow
investments for those willing to be confident and take a risk in this
environment. Burn off that shadow inventory and create housing options for
newly minted renters, which will, in turn, stabilize rental rates, and everybody
wins. Good credit renters and buy-hold investors will be the heroes at the
end of this saga.
Greg Rand is CEO of OwnAmerica.com and former managing partner of Better
Homes and Gardens Rand Realty.
Bank of America developing foreclosure rental programs to deal with
distressed properties. By: Jon Prior.
HousingWire.com. Dec. 9, 2011.
Bank of America is looking at a new program to rent a home
back to the borrower after foreclosure. "There are programs that we are
quite interested in," said Ron Sturzenegger, who leads the bank's legacy asset
servicing division, in an interview with HousingWire. "We are talking with
investors that would come in and buy these houses and would lease them back to
who would now be the now tenant." In February, BofA formed the division to
handle the servicing for delinquent mortgages, loans no longer being written,
and to sort out outstanding representation and warranty claims. Currently,
more than 35,000 employees at the bank are sorting through 1.1 million loans 60
days delinquent or worse, according to its third-quarter financial statement.
The Federal Housing Finance Agency is working on an REO rental program for
Fannie Mae and Freddie Mac. It received more than 4,000 ideas on how to do
it. But private banks own $50.4 billion worth of REO properties, too,
according to the Federal Deposit Insurance Corp., and millions of these homes
are sitting vacant. Sturzenegger described how their idea would work.
"We are looking at programs where you can capture somebody before the REO
process and offer a deed-for-lease. We would go to the customer and say,
'We'll do a short sale. Will you be interested in leasing your property back?
We're still going to sell the property. You will no longer be the owner. But you
can be a tenant now in that same property and save you from moving on,'" he
said. Sturzenegger stressed the bank would still sell the REO as before in
areas where there is a market for them and they can still get reasonable bids.
But some areas are so saturated with inventory, there isn't enough investor or
homebuyer demand and properties can sit for years uninhabited. Rick Sharga,
the executive vice president at Carrington Mortgage Holdings, said in an
interview that many firms, including Carrington are preparing to participate.
"We already have the infrastructure and assets in place to participate
effectively," he said. "Everyone is waiting on final direction from the FHFA."
Sturzenegger stressed the private program at BofA is in its infancy. "It's
in the very early stages," he said.
Investors Increase Market Share, Especially in Distressed Sector. By: Krista
Franks.
DSnews.com. Nov. 23, 2011.
Investors are making up an increasing share of home purchase
transactions, especially in the distressed sector, according to a HousingPulse
Tracking Survey released Tuesday by Campbell Surveys and Inside Mortgage
Finance. In October, investor purchases accounted for 22.3% of
transactions, in keeping with the last three months during which the rate has
remained above 20%. At the same time, distressed property transactions
grew to take up a larger portion of the market, increasing from 44.4% in
September to 48.4% in October, according to the HousingPulse Distressed Property
Index. Campbell and Inside Mortgage Finance reason that falling
prices - especially among distressed properties - combined with rising rents
makes purchasing properties to repair and rent a good option for investors.
While residential properties averaged $266,700 in October, damaged REOs averaged
$101,100, their lowest price in two years, according to the survey. About
61.6% of properties sold to investors in October will be rented rather than
flipped, according to Campbell Survey's estimate. "Renting single family
homes is an extremely viable option and seems to be a growing trend in the
valley with the decreasing of prices," a Nevada real estate agent told Campbell
Surveys in the recent HousingPulse survey. A California agent expressed a
similar outlook: "At this point renting homes is a better option than flipping
because the gap between what an investor can buy a house, fix it and flip it
does not cover the cost of re-selling it." While investors increase their
share of the distressed market, the absorption gap between investors and first
time homebuyers is widening. At 8.8% in September, the gap grew to 13.7%
in October.
Cashing
In On Rental PropertyBy:
Jeff Wallach. MONEY
Magazine. Sept. 2, 2011
Most of the news lately about real estate has been dismal: Home prices are
swooning, foreclosures ballooning. There is, however, one bright spot: the
rental market, where demand is up and rents are rising. That's partly because
those foreclosures have turned more than 4 million former homeowners into
renters, but also because many other prospective homeowners, worried about
losing their jobs or housing prices falling a lot further still, are reluctant
to buy now. As with many investments, the best time to get in is when most
others are sitting on the sidelines. To figure out whether you can benefit by
investing in rental property, here's what you need to know.
THE CASE FOR BUYING NOW
Many factors make this a great time to invest. Mortgage rates are at a 40-year
low, and homes in many areas are ultra-cheap. Meanwhile, demand for rentals has
risen in more than 500 cities, according to recent Census data. That, in turn,
has enabled landlords to charge more. Hotpads.com, a real estate research firm,
reports that rents nationwide jumped 11.6% in 2010, to $1,320 a month.
You'll need that rental income to tide you over until home prices bounce back;
in fact, the typical investor today plans to hold for 10 years, according to a
survey by the National Association of Realtors. If you can hang on that
long, you've got a good shot at solid gains, especially if you're financing the
home purchase. "Whereas leverage is dangerous when buying stocks, it can be a
good long-term strategy with real estate," notes real estate investor and
Columbia University adjunct finance professor Marshall Sonenshine. The big
catch: "Can you afford to hold the property that long and not need the equity
for your kid's college fund?" says Sonenshine. Or whatever other pressing need
might crop up. You'll also face some tough financing rules. Most banks now
require a down payment of at least 20% to 25% and evidence you have enough cash
to cover six months' worth of mortgage, tax, and insurance payments.
Home | Management | Advantage | Available Rentals | Office Space