All Forum Posts by: Vincent D.

My investment zone is Indianapolis, Indiana. Since last year, and accelerating in aggressiveness this year, the Health and Hospital Dept has dispatched a veritable army of pawns to raise money for the county. As a landlord with many properties, it is frustrating to respond to hearing notices for negligible and/or transitory "issues", like fallen branches in the yard, "scattered debris", etc.

I'm having trouble keeping up with the 100-pg "Housing & Environmental Standards" manual and its overactive "enforcement" in my zone!

I think the municipality is trying to raise funds for an ailing budget!

Anyone else having similar issues?

Corey, great thread.

It seems to me that the FHA is hard at work, for now, supporting OO purchases. I question the legitimacy of this in a "tight credit market", especially insofar as it generically bumps up market "values" in the areas of Indianapolis where I purchase investment properties.

While Indy is still rife with FCL opportunities, the dynamic has become a bit strained relative to what it had been just two years ago, for example. It is exactly the OO buys that are squeezing prices upward and frustrating red-blooded capitalist real estate investors such as myself, intermingled with legitimate investor bid competition.

Ultimately, and notwithstanding sentimental sway or insider bias, my fear (yet mercenarial pleasure as an opportunistic REI buyer) is that these FHA-supported purchases will again fail their debt service obligations in a couple years, swirling us back into another "correction" when this present swath of FHA loans collectively turn sour.

You heard it here first (as far as I know) - ANOTHER market downturn, caused by (mostly) FHA mortgage failures, within the next couple years.

I plan to "dollar-cost-average" my purchases, tempering volume in these present days of over-represented values and betting on another round of bust in the near future.

Peace.

You are a good and honest person Jon. Nicely responded!

Danny, I am 100% at par with your thinking. One must simply ask, "from what source is BOA procuring the untold billions to pull off this stunt?". Another case of the taxpayer shouldering the unholy sustenance of a failing bank in cahoots with the fedgov. Boils my blood, frankly.

In a true market, free from fedgov meddling, BOA would be toast. That is exactly what SHOULD happen, IMO.

Vince

What about future trends? If the FHA is genuinely seeking to limit questionable loans, might this be just one initiative in a series of impositions to follow?

We tend toward a rosy perspective on concepts which enhance our own career pursuits, disposed to glossing over endemic threats to our success. Objectively speaking, IF the FHA is beginning to tighten standards, won't the greater part of your buyer base be undercut from loan viability?

This MAY be an isolated move by the Federal Housing Administration, but if it is not (as I suspect), might the profit paradigms which rely on mortgage buyers be in jeopardy?

BTW, Ophelia, this is not MY bubble to burst, any more than I derive pleasure from painful failure and its manifestations upon any person or group. I'm merely speculating about what dangers may lurk beneath the surface of this seemingly-benign and abstract article from CNN Money.

Peace,

Vince

Thx Jon ;) Not very technically adept here...

As profiled in an article on CNN Money (http://money.cnn.com/2012/03/30/real_estate/FHA-loans/index.htm), the FHA is actually taking initiative to make it MORE DIFFICULT TO OBTAIN MORTGAGE LOANS. Even folks with perfect credit, for example, can be denied FHA support if they have a $1000+ credit charge dispute. I'm not sure how prolific this instance will be, in practice, but at the least this new imposition will tighten credit even further. This has downside implications for OO homebuyers as well as investors seeking to buy with leverage, or sell to mortgage-leveraged buyers.

In any case, it might be dangerous to ignore the matriculations and subsequent trends spawned by this new policy, active TODAY, APRIL 1, 2012. Food for thought.

Vince

Mike,

Comb the streets for vacant houses, writing down addresses as you go. With each house, look up the owner name in the county tax rolls. Then run a SKIP TRACE report (buy a package for lower overall pricing) to drudge up possible current phone numbers and addresses. Write handwritten letters and make phone calls in attempt to track down the owners, using verbiage like 'I want to buy your house at [address], cash, no hassles". When you get a positive hit, you can either nab the listing and/or short sale, or set yourself up for a wholesale opportunity (depends on the underlying debt and/or title encumbrance). I've had good luck and great fun with this method in the past.

Bandit signs also work for finding short sale prospects. You may first wish to present yourself as someone likely to make an offer, stating that you have experience negotiating with short sale lenders.

Happy hunting!

Vince

My BLC search parameters for properties in my target investing area has been static for the past three years, whereby I'd seen a steady stream of revolving inventory in my wheelhouse. However, over the past several months there have simply been fewer and fewer new listings at my preferred ask price point.

Less REO inventory, increasing investor and OO demand, or both? If this is a trend, is it sustainable?

I'd like to know if others are having a similar experience. I'm in Indianapolis, IN. What are other markets like?

[b]Should I raise my max offer baseline in my BLC search criteria as an adjustment to a new level of market prices?

Thanks for the feedback!

Vince

Hello All.

I think it's safe to say that by pushing banks to make ridiculous mortgage loans leading up to the "implosion", and promising to back these loans (with dollars it did not have) in the case of default, was a substantial contributor to the bubble build-up.

Though I'm no longer wired in directly to the leveraged purchase element of the buyer market, it seems to me that a huge faction of OO buyers these days are again finding support from the dubious benefactors we know as Fannie Mae and Freddie Mac.

Does anyone else have an eerie sense that a similar build-up of unjustifiable (based on traditional financial parameters) mortgage loans amongst buyers? Notwithstanding the edification of the seller, investors and OO sellers alike, upon finding a buyer who can procure financing, might it be that this intensely insidious pattern of risky lending on little-to-no down payment, federally-backed loans is again establishing a deep footprint? While not overlooking that loan screening is "rigorous" and credit is "tight" in today's market, doesn't it seem odd that so much of this institutional capital is again being backed by fannie and freddie?

My concern is that in the collective eagerness of folks to return to a bullish RE mkt will cause a general non-vigilance to the underlying "catalysts" to "growth". I fear that our pattern of expecting growth as a matter of "when", and not "if", will misdirect our scrutiny of key underlying factors of movement in the markets.

Summarily, I ask you, are we setting the table for an aftershock?

Peace,

Vince