Archive for April, 2013

Buying a Flip Home: What Buyers Should Watch Out For

Friday, April 26th, 2013

If you haven’t noticed, flippers are back in full force. It seems everyone wants to get into property flipping these days, even those who have never done so or may not have a good sense of what they are doing. If you are a buyer or know someone looking for property – whether a home, second home or investment property, you need to be careful when you come across flipped properties.

Let’s start with defining a “flip.” This is a property that has been recently purchased and then remodeled, oftentimes very quickly, in order to put back on the market and make a profit. There are all kinds of flippers – from experienced to do-it-yourselfers, and many different levels and degrees of remodeling. As a buyer you need to be very careful when considering writing an offer on these properties. There are several different types of flips, and I have categorized them to make it easier to understand:

Types of Flips:

1. Quick Flip or “Eye Candy” Flip: This is the most common type of flip that I see when showing property, and it is very easy to do and the cost is minimal. This type of flip often involves new paint inside and usually outside, a major cleanup, new (usually inexpensive) carpet in carpeted areas, new hardware to freshen up cabinetry, new light fixtures, and often new kitchen appliances. It gives the illusion of newness, but usually upon deeper inspection one finds that there are many items that need attention – furnaces and water heaters that need to be replaced, electrical issues, landscaping, and many others. If the home is older oftentimes the flipper does not replace the windows, which is an expensive job. Each home obviously differs in what is needed to make it look great to a buyer, and these quick flips often get the “oohs” and “ahhs” from buyers, but they may still need a lot of work.

2. Full Flip: These types of properties address replacement, or partial replacement, of most appliances and other issues, along with a remodel. They typically involve more than just painting and putting in baseboards and new kitchen appliances. Many flippers these days do not do this type of flip, because it is not cost effective. but for a buyer this is obviously the best kind of flip property to buy, because it is not just eye candy and things have been properly attended to. These flippers often address issues that quick flippers do not, like replacing old windows, flooring, cabinetry and sinks, appliances, landscaping, and any other issues that a quick flipper might pass over.

How to Avoid Making a Mistake in Buying a Flip that is a Lemon:

1. Get a home inspection: Keeping in mind that not all home inspectors are alike, it is a good idea to do your research – most real estate agents know inspectors who do a thorough job. If not, contact a few and get names of people who have used them. Talk to those people and see how well the inspector did. Also, check their credentials and make sure they are certified by either CREIA (California Real Estate Inspection Association) or ASHI (American Society of Home Inspectors); if you live in another state you can check with that state’s licensing board. My favorite inspector is a licensed civil engineer and a licensed general contractor as well, so I feel very confident my clients are getting the best inspection possible.

2. Get a home warranty plan. Home warranties are great for the first year, in case any appliances break or you have other issues that are covered under your policy. You can write this into your purchase contract and ask the seller to pay for it. You may want to ask the seller to include upgrades to the policy, like roof, pool (if relevant), air conditioner, etc. That way you are covered, and you can extend the policy at the end of the first year should you desire. Discuss this with your real estate professional.

In order to avoid having to waste time on a home that is a low quality quick flip, you should look beyond the “eye candy” that paint and fresh baseboards and appliances may present. Look inside cabinets, check the furnace and air conditioner (if there is one), as well as the water heater. Look for any signs of prior leaks (although paint usually does a good job of covering these up for a short time). Really take a good look at the home to see if there are other potential issues that may need to be addressed, either immediately or in the future. Have your agent ask questions of the listing agent if you need. If you feel comfortable in making an offer than you will find out more when you have your home inspection.

The bottom line is to hold off on getting excited about a flipped property until you have all the facts and can verify that the home will not end up in need of a lot of work soon after purchase. As always, if you do your homework you will likely avoid making mistakes…buying a flip home can be wonderful if you are careful. Happy home hunting!

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The Housing Ripple Effect

Tuesday, April 23rd, 2013

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Is it a Good Time to Buy for Investors?

Tuesday, April 16th, 2013

This year much has changed in the real estate investment world, but where does that leave investors, and is it still a good time to purchase investment property? The answer really depends on the goals of the investor. Let’s look at a few different possibilities.

Buy and hold investors. Like the majority of my investor clients, many investors purchase with the notion that down the road the property will have gained equity, and at some point in time, a sale will net a nice profit. Most of these investors look for properties that are in good to excellent condition, and need very little work (such as paint and new appliances or possibly flooring), but they tend to stay away from major fixer properties. The goal is to purchase for a good price in a home that will command a good rent.

Most of these types of buyers have stepped back this year and are no longer looking for properties to add to their portfolios. This is because of the increase in prices due to increased demand and very low inventory. These types of buyers are not interested in getting into bidding wars and definitely do not want to pay prices that are above comparable market sale prices – like many purchasers today who are buying homes for their primary residences. For these folks the decision is not emotional, so they have or are no longer active in this market, at least until inventory levels rise and demand cools off.

Flippers. Flippers are still looking in today’s market, but it is harder to find the “gems” out there. Flippers come in many shapes and sizes…some do minor – what I call “bandaid” – work, and then sell. They are good at doing a minimal amount of work on the property to make it feel like a remodel. But if you look deeper you will see that they don’t tackle a lot of the things that the “heavy” flippers (my term) don’t. Heavy flippers don’t just slap on a coat of paint and throw in new appliances, they replace lighting and fixtures, surfaces and bathrooms, and repair other issues that need addressing (like installing new water heaters and HVAC units, etc.) It is really very property-specific, and obviously some properties need more work than others.

In today’s market it has become more difficult for the heavy flippers, as they usually need to purchase homes for low prices in order to make a decent profit. But I have definitely seen more and more bandaid flippers – some are willing to pay contract price, and then go in and do a minimal amount of work before putting the property back on the market. Many of these flippers likely make $10-15 in profits and are happy with that. So if you are a flipper or are thinking about becoming one, whether the market is ripe for doing so will depend on the specific area market, on your competition, and on what you plan to do to rehabilitate the property.

For many investors it is a difficult time to acquire property that is priced well without getting into a bidding war. And since paying over comparable sales is usually not a good business goal for an investment, it has become a difficult time for many buy and hold investors. Similarly, flippers are faced with challenges in finding properties they can buy for prices that are low enough for them to make a profit on the flip side.

It is important to keep in mind that every real estate market can be very different from the next, even neighboring complexes or cities may be different in terms of value and comparable sales. So before you venture out there to buy investment property, make sure to do your homework and work with an experienced local area agent. Have no fear – when inventory increases once again there will be more opportunities for investors.

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Short Sales and HOA Fees: What You Should Know

Wednesday, April 10th, 2013

Someone called me the other day with a question about short sales and HOA fees. She wanted to know whether a homeowner should continue to pay HOA fees if they are involved in short selling their home, and are awaiting lender approval. The answer is YES.

Unlike other fees which short sale lenders typically agree to pay (such as county transfer fees and certain document fees, escrow and title fees, etc.), lenders normally will NOT pay late HOA fees. In most situations where the homeowner is behind on these fees, the buyer will end up having to pay for them. This obviously could be an issue if the balance is hefty.

The even bigger problem is that the HOA could file a lien on the property for the late fees. This could hold up the closing of the short sale, or even worse: cause the parties to miss the closing deadline that was specified in the lender approval letter.

The best advice to give short sellers (and I always do so right from the start)  is to stay current with HOA payments, even when they are no longer current with their loan(s). This will assure a much smoother transfer of title and avoid any problems that could lead to a bungled short sale and a foreclosure.

If you have any other questions regarding short sales or questions related to legal ramifications of selling your home, please feel free to contact me at Rachel@LaMarRealEstate.org.

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California’s Improving Markets

Monday, April 8th, 2013

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Gorgeous New Carlsbad Listing

Friday, April 5th, 2013

It doesn’t get much better than this! This fantastic, bright home boasts the largest floorplan in the gated hilltop community of Mar Brisa. Sitting on one of the biggest lots in the development, the serene views and numerous custom upgrades complete the long list of reasons to make this your home. Enjoy ocean breezes, the resort-like community pool, spas and play areas, low HOAs and no mello roos, plus Carlsbad schools!

•  4 bedrooms/2.5 bathrooms, 2570 square feet

•  Beautiful views of mountains, rolling green hills, canyon and golf course

•  Largest floorplan in gated coastal community of Mar Brisa

•  Northeastern exposure, with lots of sunlight throughout the day

•  Travertine flooring with custom inlays downstairs and on staircase

•  Chef’s dream kitchen with custom granite counters and travertine backsplash, center island and breakfast area, and lots of counter and storage space

•  Cathedral ceilings

•  Formal dining room

•  Open family room with fireplace adjoining kitchen

•  Master suite with endless views

•  Granite counter, sunken tub and walk-in closet in master bathroom

•  Custom paint throughout

•  Big, private backyard (8000+ square feet) with large patio area for entertaining or dining al fresco, and pathway around the perimeter of the yard

•  Lots of storage throughout

•  3 car garage with epoxy flooring

•  Ceiling fans, recessed lighting

•  Upstairs laundry room with sink

•  Great loft area for den/office/playroom/gym, or convert to 5th bedroom,

•  Peek-a-boo ocean view from the loft

•  Common area space area on north side of house, with more space between neighboring home

•  Short stroll to community pool/spa and tot lots

•  Carlsbad schools

•  Low HOA fees, no mello roos taxes

 

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San Diego April Calendar of Events

Monday, April 1st, 2013

April 5 – 7
Goodguys 13th Meguiar’s Del Mar Hot Rod & Custom Car Nationals
See more than 2,000 hot rods, customs and classics, muscle cars and trick trucks at this indoor and outdoor automotive fair. This event features vendors/exhibitors, swap meet and car corral, model car show and fun for the whole family. Refer to website for admission information.
Time: Refer to website for specific times
Location: Del Mar Fairgrounds, 2260 Jimmy Durante Blvd., Del Mar
For more information visit www.delmarfairgrounds.com

April 6,
2013 Silver Blade Regatta
Bring the family out to the Olympic Training Center to see the 2013 Silver Blade Regatta, and experience what it’s like to be a part of the Olympic movement.  This annual event is hosted by the San Diego Canoe Kayak Team, a non-profit organization focused on developing young athletes in Olympic style sprint kayaking and canoeing, surfski racing and the exciting new sport of stand up paddleboard racing.   Enjoy the day of competition, and see if you might be interested in a new recreational and/or competitive sport.
Time: 10:00 am – 4:00 pm
Location: Olympic Training Center, 2800 Olympic Parkway, Chula Vista
For more information visit www.sdckt.net

April 6
After Dark Dash
How about a nighttime running event for a change? This 5K will be in downtown San Diego under the city streetlights. The event will raise money and bring awareness for the Children’s Tumor Foundation.
Time: 10:00 pm – 11:30 pm
Location: 10th Ave. and K St., Downtown San Diego
For more information visit www.afterdarkdash.com

April 9
East Village Opening Day Block Party
This event is a block party in celebration of opening day for the Padres baseball season. The event will have retail merchandise, great music, a beer garden and a food court. This is a free event.
Time: 11:00 am – 6:00 pm
Location: East Village, J St., San Diego
For more information visit www.eastvillagesandiego.com

April 13
emBARKadero: Run.Walk.Roll.Wag
This is a run/walk and dog festival fundraiser to benefit Canine Companions for Independence. There will be a free festival after the 4k with vendor booths featuring products and services for dogs and people plus a Kid’s Zone.
Time: 8:00 am – 2:00 pm
Location: Embarcadero Marina Park South, 200 Marina Park Way, San Diego

April 13
Hullabaloo Family Music Festival
Enjoy a full day of art, music, and activities for kids and families. Featured music will be by Steve Poltz, Jambo and Raggle Taggle plus hands-on activities by Art Soup and Gymboree. Refer to website for admission information.
Time: 11:00 am – 4:00 pm
Location: Del Mar Fairgrounds, 2260 Jimmy Durante Blvd., Del Mar
For more information visit www.hullabalooartsfest.com

April 14
Third Avenue Village Spring Festival & Street Faire
Enjoy performances, food, contests and family friendly fun! Celebrating the historic Third Avenue Village, this festival will feature two stages with live entertainment, food, artisan, commercial and community vendor booths, a kid’s fun zone and more.
Time: 11:00 am – 5:00 pm
Location: Third Ave., Chula Vista
For more information visit www.thirdavenuevillage.com

April 14
San Marcos Swing Into Spring Festival
The festival route is dotted with around 250 vendor booths. There will be fun for the whole family with delicious food and deserts, live entertainment, kid and carnival rides, arts and crafts, and much more.
Time: 9:00 am – 5:00 pm
Location: Via Vera Cruz, San Marcos
For more information visit www.swingintospringfestival.com

April 19 – 21
Annual Del Mar Antique Show & Sale
More than 250 premier antique dealers from all over California and the western United States will be selling the finest in antiques and collectibles. Appraisal service will be available for a nominal fee. Refer to website for admission information.
Time: Refer to website for specific times
Location: Del Mar Fairgrounds, 2260 Jimmy Durante Blvd., Del Mar
For more information visit www.calendarshows.com

April 19 – 21
49th Annual Lakeside Rodeo
The Rodeo features seven major events including the Bareback Bronc, Barrel Racing, Bull Riding, Calf Roping, Saddle Bronc, Steer Wrestling, and Team Roping. This rodeo is fun for the whole family! Refer to website for admission information.
Time: Refer to website for specific times
Location: Lakeside Rodeo Grounds, Highway 67 and Mapleview St., Lakeside
For more information visit www.lakesiderodeo.com 

April 20
Chicano Park Day Anniversary Celebration
A historic public arts site, Chicano Park is recognized worldwide for its mural paintings of Chicano and Mexican history. The annual Chicano Park Day celebration features cultural music and dance, food, arts and craft vendors, a jumper for kids, and a classic low rider car display. This is a free event.
Time: 10: 00 am – 6:00 pm
Location: Chicano Park, Cesar Chavez Pkwy, San Diego
For more information visit www.chicano-park.org

April 20
8th Annual Paws in the Park
Fallbrook’s Paws in the Park will have several contests including Cutest Puppy, So Ugly You’re Cute, Owner Look-Alike, and Best Dressed. The opening parade will precede the contest. There will also be vendor booths available.
Time: 9:00 am – 2:00 pm
Location: Live Oak County Park, Reche Rd., Fallbrook
For more information visit www.foundationforseniorcare.org

April 21
Annual San Diego Earth Fair 2013
The annual Earth Fair in Balboa Park is the largest free annual environmental fair in the world. This event showcases a wide variety of causes, goods, and services pertaining to the environment and quality of life. This is a free event.
Time: 10:00 am – 5:00 pm
Location: Balboa Park, San Diego
For more information visit www.earthdayweb.org

April 27
Walk For Wishes
The Make A Wish Foundation provides an avenue for people to help local children receive wishes through donations and events such as this one. This family-friendly event is open to all and will feature a 1.5-mile course along San Diego’s beautiful Embarcadero Park.
Time: 9:00 am
Location: Embarcadero, Embarcadero Marina Park, San Diego
For more information visit www.makeawish-sd.org

April 27
Ramona Music Fest VI
This event includes five hours of ska, rock, Americana, rockabilly, blues, jazz, and bluegrass all on two stages. There will also be face painting, toss games, and much more for the kids.
Time: 12:00 pm – 5:00 pm
Location: Dos Picos Park, 17953 Dos Picos Park Rd., Ramona
For more information visit www.ramonachamber.com 

April 27
SanTree Fest
This event will have continuous live entertainment, interactive demonstrations, over 50 vendor booths, healthy food booths, kid’s fun zone; tree planting and a river clean up. This is a free event.
Time: 9:00 am – 4:00 pm
Location: Town Center Community Park East, 550 Park Center Dr., Santee
For more information visit www.ci.santee.ca.us

April 27 – 28
Adams Avenue Unplugged
A free event that will feature acoustic music with live performances staged inside or around more than 30 restaurant and bars lining the neighborhood. Musicians will also perform on three community stages spread throughout the area.
Time: Sat: 12:00 pm – 10:00 pm /  Sun: 12:00 pm – 7:00 pm
Location: Adams Ave., Normal Heights, San Diego
For more information visit www.adamsavenuebusiness.com

April 27 – 28
Annual Encinitas Street Faire
Browse among 400 unique booths featuring a little of everything including arts and crafts, antiques, clothing, items from around the world, and more. There will also be children’s rides, four live stages, and the Karl Strauss Brewery beer garden guaranteeing that you’ll find fun for the whole family.
Time: 9:00 am – 5:00 pm
Location: South Coast Hwy 101, Encinitas
For more information visit www.kennedyfaires.com/encinitas
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