All Forum Posts by: Ken M.

Top five buyer-friendly housing markets offer price cuts and increased inventory

Phoenix leads the pack with over 31% of listings showing price cuts as national housing inventory reaches a five-year high

According to Realtor.com, these are five of the ten most "buyer-friendly" areas:

Phoenix, Arizona

The number of active listings in Phoenix posted a 23.1% year-over-year jump last month.

Tampa, Florida

Roughly 29.9% of its listings in May had experienced a price cut

Denver, Colorado

The proportion of up-for-sale homes that have undergone price cuts came in at 29.4%.

Austin, Texas

In May, according to the report. Realtor.com found 29.1% of homes on the market had a discount

Jacksonville, Florida

Roughly 28.8% of homes in the area featured a price reduction.

The other metro areas in the top-10 included Charleston, South Carolina; Salt Lake City, Utah; Dallas, Texas; Palm Bay, Florida; and Portland, Oregon, according to Realtor.com and Prices had been reduced on 19.1% of homes up for sale across the country last month.

Quote from @Luis Ramos:

you misunderstood Ken

Contract for Deed is executed when Due On Sale is triggered by the bank. Scott Horne and his team help execute this. 

Subject to is (a) strategy I use to acquire properties. 

Contract for Deed is an executory contract that violates the Due on Sale clause. Ask your banker or attorney.

19. Transfer of the Property or a Beneficial Interest in Borrower. For purposes of this Section 19 only, "Interest in the Property" means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract, or escrow agreement, the intent of which is the transfer of title by Borrower to a purchaser at a future date.

If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender's prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, Lender will not exercise this option if such exercise is prohibited by Applicable Law.

I have no idea who Scott Horne is. ;-) But, he should actually read the Due on Sale clause before he passes on more bad information.

 

In the first quarter of 2025, there were 61,660 foreclosures, a 49.6% increase from the previous quarter.

Louisiana, Kentucky, and Mississippi topped the list of states with the highest share of “seriously underwater” mortgages... face a high risk of foreclosure.

In Q1 2025, 2.8 percent of mortgages nationwide were classified as being seriously underwater, up from 2.5 percent in Q4 2024.

“Louisiana remains the state with the highest percentage of seriously underwater mortgages, though the percentage improved from 11.3 percent to 10.5 percent from Q1 2024 and Q1 2025,” said the statement.

“In Louisiana, one in every 10 mortgages are seriously underwater,” ATTOM added. “The counties with the highest percent of mortgages seriously underwater are Vernon, Saint Martin, Iberville, and Webster.”

The rate of such mortgages in Kentucky and Mississippi was 7.3 percent and 6.6 percent respectively.

As with Louisiana, the rate dipped in both these states on an annual basis.

Virginia had the lowest level, where only one in 51 mortgages are considered underwater. This was followed by Alaska and Vermont.

• In the first quarter of 2025, there were 61,660 foreclosures, a 49.6% increase from the previous quarter. In 2024, there were 174,100 consumers in the U.S. with a new foreclosure on their credit report. While this figure was up from 150,820 in 2023, it remained significantly lower than the 1,755,860 consumers who experienced new foreclosures in 2008 when the housing market crashed in the wake of the Great Recession.
• In Q1 2025, only 2.1% of mortgaged properties were “underwater.” This figure is up slightly from 2.0% in Q4 2024 and far below a record high of 26.0% in 2009.

Quote from @Zach Berry:

Quote from @Ken M.:

Quote from @Zach Berry:

Deborah - my company actually has a process that is contrary to most lenders. We underwrite all fix and flip deals up front before any commitment. We'll give out a rubber-stamped term sheet up-front so you can feel comfortable knowing we'll do the deal unless the house get's hit by a tornado (or some other catastrophe). 

My fallout rate is unbelievably low because of this. Give me a shout if it's meaningful to connect. Good luck!

Do you use an appraiser to get ARV value or do you do "in house" appraising?

Ken - we do what is essentially a desktop ARV comp underwrite. 100% free and comes back typically same-day. If the deal and borrower pass the sniff test, then the deal gets approved. Happy to walk you through it if you like.

I buy properties "off market" using creative finance, without borrowing, but I know a great majority of people on BP rely on lending, so this is for them. They just don't know what questions to ask.

Good so far.
Is your ARV based on Solds, Listeds or something else? 

Quote from @V.G Jason:

Quote from @Ken M.:

Quote from @V.G Jason:

Quote from @Ken M.:

Quote from @V.G Jason:

Do not think it's this that breaks the camel back.

It's likely something we don't expect. 

Or the consistent inventory that delists by Oct/Nov, re-lists the following March coupled with new inventory that creates an inventory logjam.

It's also now not just rates that are preventing sellers from selling-- it's also being underwater on the loan.

And people just don't have the income to qualify. Even if rates were dropped, it won't be enough to offset the huge increase in the property, increased insurance costs increased tax costs. A lot of markets are maxed out. (not all markets of course, it's a big country, but a lot of markets are at too high of a debt to income level).

 Inventory has doubled in Phoenix in the last couple of months. DOM over 90 is consistently growing. People aren't buying. The West Coast is slowing down.

Phoenix is like Sedona and Scottsdale-- peak season is probably Oct to March ish. So off-peak just to play devils advocate.

The reality is no one can afford houses at these rates, no one can afford to cut a check to get out from underwater if they re-fi'd in 20-22. What's the solution?

Actually Scottsdale is Hot, Hot, Hot  - lots of properties selling over in the $1,000,000 market. Mostly cash sales.

 Scottsdale will demand that.  Non levered deals will be up, levered lower. How many levered ones are happening? Think it's down yoy and YTD against any previous year in some time.

"In a recent story published by , Scottsdale has taken over as the nation’s fastest-growing metro for millionaires. The upscale Arizona enclave has officially surpassed Austin, TX, as a premier destination for affluent households. According to the newly released USA Wealth Report 2025 by Henley & Partners, Scottsdale’s millionaire population rose 125% between 2014 and 2024, driven in large part by the city’s flourishing tech sector and high quality of life."

https://www.realtor.com/news/trends/scottsdale-millionaire-h...

I think a lot of the transactions in Scottsdale are cash.
A lot of the buyers are sports figures, football, baseball and yes hockey. ;-)

Quote from @Tolise Adkisson:

I’ve noticed a lot of investors sharing wins and challenges around getting their deals funded, especially once they’re already under contract. Thought I’d open up a discussion to see how folks here are navigating that process.

If you've had a deal under contract recently — whether for a flip, rental, or BRRRR — how did you go about securing funding? Did you already have a lender lined up or did you start searching once the contract was signed?

Would love to hear what’s been working for others and if there are any lessons you’d share with someone trying to move quickly once they’ve got a signed deal.

Open to hearing all types of experiences. Just looking to learn and connect.

First fact of real estate, what may be a deal to you, may not be a deal to a lender. Ask lenders what they fund, before you spend time buying that property in your head.

Quote from @Crystal Gibson:

What would you do if you had 40k lying around and you wanted to purchase a property. You don't own any homes and you're currently renting but would like to get into the buy and hold game with rentals. Looking in mid Missouri. Not finding much. Approved for 350k FHA.

Before I spent any money, I'd join a REIA (NationalREIA.org maybe $20 a month dues) and learn as much as I can and meet as many people as I can and yes, I would buy close by for my first project.

Quote from @William Miller:

Hey everyone  I wanted to throw this out there and hopefully get some honest feedback from folks who’ve been in the game longer than I have.

I have a rental in Arizona that I’ve held for a few years. Right now, the mortgage is around $1,479 and I’m renting it for $1,895. On the surface it looks like it cash flows, but when I factor in reserves (30% for vacancy, maintenance, management, etc.), I’m actually operating negative every month.

I've run the numbers a few different ways, and unless I'm missing something, it just doesn't work long-term if I want to scale. I'm trying to follow the BRRRR method and build real wealth, not just hold onto properties that "look good" on paper.

The tenants are still in place and I’ve been debating whether to:

• Sell it and free up equity
• Try to raise rent (market may not support much more)
• Hold and hope for appreciation

I’d love to hear how others have navigated situations like this. Do you dump underperforming rentals to scale faster? Is there a better way to structure this so it performs?

Appreciate any real insight — just trying to do this right and surround myself with people actually doing it.

Thanks in advance.

– Will

Don't forget the benefits

1. Tax write offs
2. Inflation hedge
3. Asset to borrow against
4. You can 1031 to a different property
5. Owning real estate makes you cool  ;-)

Quote from @Noah Corwick:

Hi William, 

I think more context is needed here in order to provide a true opinion. 

-What area of town is the property in? Is the home in an area that is on the appreciation horizon or up and coming? 

-How much equity do you have in the property? 

-Have you looked into the MTR/STR market for where the home's located?

-Obviously nobody knows if/when rates will go down. But have you ran numbers and identified a rate percentage that you'd feel comfortable with from a cashflow perspective? 

Just curious, where is property "appreciating" in Phoenix? Scottsdale, yes in the over $1,000,000 market, but Phoenix is not Scottsdale. :-)

Over 90 DOM has doubled in the last two months for Phoenix.

Quote from @Drew Sygit:

I think a bigger problem will be the Florida condo market continuing its downward spiral and that causing concerns in other markets like Austing, Phoenix, etc. and all of it dragging prices down for a few years.

There will be more properties foreclosed on for unpaid HOA compliance charges or just walking away from their homes than properties foreclosed on for fraud.

The other issue is investors underwater with their STRs they overpaid for. How many of them will eventually not be able to make their mortgage payments, try to sell and bring back short sales?

The study focused on STRs that were originally presented to the lender as "owner occupied" in order to get a better loan rate and better terms.

For the sake of the Lurkers, Lenders generally have two sets of rules 1. "Owner Occupied" which is more favorable and easier to qualify for. People tend to work harder to make sure their personal home mortgage gets paid and 2. Investor or "Non owner occupied" loans which typically has a much higher default rate when times get tough.  It is very unwise to claim the 1st type on paper if your end result is to be type 2. Contrary to popular belief, banks aren't stupid.

Now, back to the post:

A typical requirement is

"6. Occupancy. Borrower must occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and must continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent will not be unreasonably withheld, or unless extenuating circumstances exist that are beyond Borrower's control." 

(That word "must", in legal terms, means "must", not an option.)

My guess is, that those STR loans are the properties at risk of being called due and there is someone with a slide rule that has calculated what the numbers are. When a "wanna be" investor starts feeling the pinch from a bad STR (or rental) investment, or it's too much work, he walks and stops paying the mortgage. He is underwater, so he can't sell. The property goes into default, the default turns into a foreclosure and the "wanna be" investor finds out why it isn't nice to lie to lenders.

 And we find out, just how big the "shadow foreclosure market is. ;-)