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Dan Mullarkey, ABR's Blog

By Dan Mullarkey | Agent in Scottsdale, AZ
  • Paying Maricopa County Property Taxes (A Quick Reference)

    Posted Under: How To... in Scottsdale, Property Q&A in Scottsdale, Investment Properties in Scottsdale  |  October 29, 2012 2:35 PM  |  3,505 views  |  No comments

    I have been asked quite a bit lately about paying Maricopa County property taxes. If you have a mortgage, the mortgage company generally will include your taxes in your monthly payment and make the payment for you. If you own your property in Maricopa County free and clear (no mortgage) then the burden lies upon you. This is a new obligation for out of state property owners that may not be used to this. The process has become very streamlined with the Treasurer’s website and gives the property owner several different payment options, which we will review. First off, let’s take a look at how and when these payments should be made.

    Yearly Maricopa County property tax statements are issued on a calendar year basis and are printed and mailed in September of that year. This means that you should have received them in the mail, if you did not receive your tax statement check with the Assessor’s website. Make sure you double check the parcel number and property description to avoid paying for the wrong property.  The September statement will include two payment stubs, so don’t throw the additional paperwork out.

    Your Maricopa County property tax can be paid in full or in two installments:

    1)  The due date for the first half tax is October 1. The first half installment becomes delinquent after 5:00 p.m. on November 1. If Nov 1 falls on a Saturday, Sunday, or legal holiday, the time of the delinquency is 5:00 pm on the next business day.

    2)  The second half tax is due March 1 of the following year and becomes delinquent after 5:00 p.m. on May 1. If May 1 falls on a Saturday, Sunday, or legal holiday, the time of the delinquency is 5:00 pm on the next business day.

    3)  Current taxes may be paid in full by December 31 without first half interest if the amount due is over $100.

    4)  If the amount due is $100 or less, you must pay the full amount by November 1st.

    Maricopa County now offers several different payment options for property taxes:

    1) e-Check via Bill Pay

    The Treasurer's Office will accept e-Check payments from your on-line bill pay service provided by your financial institution. e-Check payments will be accepted for current taxes only. Please allow 5-7 business days for the payment to post to the Treasurer's database. Please make payments with the following payee information:

    Payee:  Maricopa County Treasurer

    Address: PO Box 52133

      Phoenix, AZ 85072-2133

    Account: Your Parcel Number (Examples: 123-45-678-1 or 123-45-678A-1)

    Phone: (602) 506-8511

    2) e-Check via the Website

    The Treasurer accepts e-Check payments through this Web site with no service fee charged to you. You may make payments up to $525,000. Please allow 3-5 business days for the payment to post to the Treasurer's database. To begin payment, enter your parcel number, or watch the video: How to pay by e-Check.

    3) Credit card

    For your convenience, the Treasurer's Office accepts automated credit card payments via Official Payments Corp. Please allow 3-5 business days for the payment to post to the Treasurer's database. This vendor will charge a fee of 2.35% of your tax payment on payments of more than $42.55. A flat service fee of $1 is charged on tax payments of $42.55 or less. The Maricopa County Treasurer's Office does not receive any portion of this convenience fee.

    4) Mail your payment

    You may send your check or money order using the envelope and remittance document you received in the mail. Or you may print your tax statement on-line by entering your parcel number in the yellow box to the left. Please allow 3-5 business days for the payment to post to the Treasurer's database. Please note payments mailed close to the first and second half due dates could take longer to post. Mail your payment to:

    Maricopa County Treasurer

    PO Box 52133

    Phoenix, AZ 85072-2133

    (Mailed payments must be postmarked on or before the due date. It is recommended that payments mailed close to the due date are walked into the post office.)

    5) Pay in person

    You may bring your payment to the Treasurer's Office in downtown Phoenix.

    Office hours are 8am - 5pm Monday - Friday, except Federal Holidays

    6) Branch Payment

    You may make your property tax payment at any Arizona Chase branch. Payments will only be accepted when accompanied with a 2012 Treasurer's payment coupon or 2012 tax stub from our internet site. Please include your Parcel Number on your check. A receipt for your payment will be provided at the branch. Please allow 1-2 business days for your payment to post.

    7) Bulk payments

    Maricopa County offers a simple, FREE solution to Mortgage Companies, Tax Servicing Companies, Developers and other multi-parcel payers. Our Corporate Services System is designed for easy electronic transmissions.

    CSS is a free on-line service provided by the Treasurer's office to facilitate the rapid and error-free collection of property taxes on multiple parcels.

    One last question that I hear often is "Why am I being charged for a full year's taxes when I just bought my property, didn't I pay those when I bought the home?"

    In a typical real estate transaction taxes are prorated, and the buyer is given credit for the seller's portion. Take a look at your HUD-1 settlement statement (provided by the title company) to confirm this. Double check with the Maricopa County Assessor’s Office that they have the correct mailing address for you.

    As you can see, Maricopa County is making the process easier for paying taxes. Below is a helpful step by step video, please let me know if you have any further questions that I can answer.

    Dan Mullarkey
    Associate Broker, West USA Realty
    480-296-5959
    MGroupAZ.com
    mgroupaz@gmail.com



     

  • Paying Maricopa County Property Taxes (A Quick Reference)

    Posted Under: How To... in Scottsdale, Property Q&A in Scottsdale, Investment Properties in Scottsdale  |  October 29, 2012 2:34 PM  |  3,564 views  |  No comments

    I have been asked quite a bit lately about paying Maricopa County property taxes. If you have a mortgage, the mortgage company generally will include your taxes in your monthly payment and make the payment for you. If you own your property in Maricopa County free and clear (no mortgage) then the burden lies upon you. This is a new obligation for out of state property owners that may not be used to this. The process has become very streamlined with the Treasurer’s website and gives the property owner several different payment options, which we will review. First off, let’s take a look at how and when these payments should be made.

    Yearly Maricopa County property tax statements are issued on a calendar year basis and are printed and mailed in September of that year. This means that you should have received them in the mail, if you did not receive your tax statement check with the Assessor’s website. Make sure you double check the parcel number and property description to avoid paying for the wrong property.  The September statement will include two payment stubs, so don’t throw the additional paperwork out.

    Your Maricopa County property tax can be paid in full or in two installments:

    1)  The due date for the first half tax is October 1. The first half installment becomes delinquent after 5:00 p.m. on November 1. If Nov 1 falls on a Saturday, Sunday, or legal holiday, the time of the delinquency is 5:00 pm on the next business day.

    2)  The second half tax is due March 1 of the following year and becomes delinquent after 5:00 p.m. on May 1. If May 1 falls on a Saturday, Sunday, or legal holiday, the time of the delinquency is 5:00 pm on the next business day.

    3)  Current taxes may be paid in full by December 31 without first half interest if the amount due is over $100.

    4)  If the amount due is $100 or less, you must pay the full amount by November 1st.

    Maricopa County now offers several different payment options for property taxes:

    1) e-Check via Bill Pay

    The Treasurer's Office will accept e-Check payments from your on-line bill pay service provided by your financial institution. e-Check payments will be accepted for current taxes only. Please allow 5-7 business days for the payment to post to the Treasurer's database. Please make payments with the following payee information:

    Payee:  Maricopa County Treasurer

    Address: PO Box 52133

      Phoenix, AZ 85072-2133

    Account: Your Parcel Number (Examples: 123-45-678-1 or 123-45-678A-1)

    Phone: (602) 506-8511

    2) e-Check via the Website

    The Treasurer accepts e-Check payments through this Web site with no service fee charged to you. You may make payments up to $525,000. Please allow 3-5 business days for the payment to post to the Treasurer's database. To begin payment, enter your parcel number, or watch the video: How to pay by e-Check.

    3) Credit card

    For your convenience, the Treasurer's Office accepts automated credit card payments via Official Payments Corp. Please allow 3-5 business days for the payment to post to the Treasurer's database. This vendor will charge a fee of 2.35% of your tax payment on payments of more than $42.55. A flat service fee of $1 is charged on tax payments of $42.55 or less. The Maricopa County Treasurer's Office does not receive any portion of this convenience fee.

    4) Mail your payment

    You may send your check or money order using the envelope and remittance document you received in the mail. Or you may print your tax statement on-line by entering your parcel number in the yellow box to the left. Please allow 3-5 business days for the payment to post to the Treasurer's database. Please note payments mailed close to the first and second half due dates could take longer to post. Mail your payment to:

    Maricopa County Treasurer

    PO Box 52133

    Phoenix, AZ 85072-2133

    (Mailed payments must be postmarked on or before the due date. It is recommended that payments mailed close to the due date are walked into the post office.)

    5) Pay in person

    You may bring your payment to the Treasurer's Office in downtown Phoenix.

    Office hours are 8am - 5pm Monday - Friday, except Federal Holidays

    6) Branch Payment

    You may make your property tax payment at any Arizona Chase branch. Payments will only be accepted when accompanied with a 2012 Treasurer's payment coupon or 2012 tax stub from our internet site. Please include your Parcel Number on your check. A receipt for your payment will be provided at the branch. Please allow 1-2 business days for your payment to post.

    7) Bulk payments

    Maricopa County offers a simple, FREE solution to Mortgage Companies, Tax Servicing Companies, Developers and other multi-parcel payers. Our Corporate Services System is designed for easy electronic transmissions.

    CSS is a free on-line service provided by the Treasurer's office to facilitate the rapid and error-free collection of property taxes on multiple parcels.

    One last question that I hear often is "Why am I being charged for a full year's taxes when I just bought my property, didn't I pay those when I bought the home?"

    In a typical real estate transaction taxes are prorated, and the buyer is given credit for the seller's portion. Take a look at your HUD-1 settlement statement (provided by the title company) to confirm this. Double check with the Maricopa County Assessor’s Office that they have the correct mailing address for you.

    As you can see, Maricopa County is making the process easier for paying taxes. Below is a helpful step by step video, please let me know if you have any further questions that I can answer.

    Dan Mullarkey
    Associate Broker, West USA Realty
    480-296-5959
    MGroupAZ.com
    mgroupaz@gmail.com




     

  • A True Arizona HAFA Success Story; 2 Weeks From Foreclosure to $3,000!

    Posted Under: General Area in Phoenix, Home Selling in Phoenix, Foreclosure in Phoenix  |  June 11, 2012 8:10 PM  |  1,869 views  |  No comments
    Back in Fall of 2011 we learned the story of "J", a home owner in Phoenix that had grown increasingly frustrated with Bank of America after a failed loan modification. J did everything that he was supposed to, and yet couldn't convince his lender to modify his mortgage to an affordable level. This inevitably led J to facing foreclosure, a road he didn't want to go down but had no other choice.

    By the time IncentiveShortSale.com took the listing, J was only 2 weeks away from his Trustee Sale date. Now, at this point J did not care what happened to the home as he already had written it off and moved to another property. The HAFA short sale program with the $3000 incentive and "no deficiency" was just what he was looking for, and J agreed to give it a shot. Now, 2 weeks is not much time to list, market, and secure a buyer before a Trustee Sale, but we still felt that we had a chance. The tight timelines do tend to bring out 110% effort from everyone.

    When we took the short sale listing, we knew that pricing had to be very attractive yet supportable by the comparables, which was a challenge in itself. Price it too low, and the short sale servicer rejects the offer; price it too high and you risk valuable days on market with a foreclosure sale approaching. Fortunately, our pricing strategy was right on the money, and we secured a cash buyer at full price during the first weekend of listing. This would turn out to be very critical in the HAFA short sale approval process and in securing our client's $3000 incentive.

    Now, one thing to keep in mind with a HAFA short sale is that it will take some time. Like most government sponsored programs, the process is long and arduous. But, with a $3000 HAFA incentive for a short sale client on the line, the wait is worth the reward. During the HAFA short sale process, this transaction went through numerous negotiators and was almost cancelled completely several times (through the HAFA short sale department, through no fault of our own), but we stayed diligent. We were told that we would receive HAFA short sale approval at numerous points but through the countless negotiators that were assigned and reassigned to the file, the actual Approval Letter took almost 6 months to receive. It is no secret that there were many different components and people involved in this transaction, and if everyone didn't work together as well as we did the HAFA short sale approval would have never happened.

    This HAFA transaction was recently closed, and J is very happy to have received his $3000 cash incentive. From foreclosure anticipation to cash in hand, J was very appreciative of the work we did. J should be ready to purchase a home again in a much shorter timeframe than if he let the home foreclose, yet another huge advantage of the HAFA short sale program. For more information on HAFA, please visit http://incentiveshortsale.com/hafa-home-affordable-foreclosure-alternative-program/




  • Chase Short Sales and Loan Modifications in Arizona-What to Expect

    Posted Under: Home Selling in Scottsdale, Foreclosure in Scottsdale, Property Q&A in Scottsdale  |  May 21, 2012 10:51 AM  |  1,920 views  |  No comments

    “Do we want to stay, or do we want to go?” This needs to be the first question a homeowner tackles when dealing with the tough decision of what to do with their home that is underwater or unaffordable anymore. Once this question is answered, it makes the decision between a loan modification, deed in lieu, or short sale a bit easier. Typically the loan modification is approached first, and if it becomes unsuccessful, a short sale or deed in lieu may be the next best option. Chase has developed programs that are geared towards helping homeowners through this difficult journey and are taking steps to make the process easier.

    JP Morgan Chase is one of the largest mortgage servicers in the Phoenix Metropolitan area; so many Valley residents are writing their checks to Chase each month to pay their mortgage. Currently Chase services over 225,000 loans in the Valley and is taking strides to enhance their short sale department in Arizona by recently adding over 10,000 positions. One thing to make clear here is that just because a homeowner writes a check to Chase, that does not mean that Chase owns their note, as Chase services mortgages for well over 100 different investors.

    A Chase Loan Modification in Arizona

    Chase has taken a stance of their #1 goal is to keep homeowners in their home in Arizona,  and the first way of accomplishing that is through a loan modification. Chase uses a term of their “Waterfall of Options” when referring to a Chase loan Modification, which would include:

    1)      1) Repayment-adjusting the repayment terms

    2)      2) Forebearance-giving the homeowner a “grace period” without payments

    3)      3) Interest Rate-adjusting the interest rate of the mortgage to make the payment feasible

    4)      4) Term-extending the length of the repayment term to lower the monthly payments

    Keep in mind that the average time of delinquency before a home forecloses in Arizona is 425 days, so there is ample time available to contact Chase and see if there is a loan modification program that works.

    The reality is that 60% of loan modifications are failing, so Chase has stepped up their short sale departments across the country. In Arizona, last year Chase closed 5400 short sales…from January to March this year that number is well over 13,400, a HUGE increase over last year, which further supports their commitment to making the short sale process easier and more effective.

    Chase has 2 Homeownership Centers in the Valley, where homeowners can meet one-on-one with a Chase Customer Assistance Specialist and further discuss their options.

    Phoenix: 2501 West Dunlap Avenue Suite 160 Phoenix, AZ 85021 Phone: 602-943-7013

    Tempe: 444 West Broadway Road Suite B Tempe, AZ 85282 Phone: 480-966-3101

    70% of homeowners are within driving distance of a Chase Homeownership Center across the United States.

    A Chase Short Sale in Arizona

    When a loan modification isn’t a possibility, sometimes a short sale may be the next best option.  There are several benefits of approaching a loan modification first with Chase, such as:

    -Chase’s Loan Modification Package is 75% of the material needed for their Short Sale Package (the additional material would be the MLS information, Purchase Contract, etc) which makes the submission process a bit easier and less work.

    -Chase will assign a Customer Assistance Specialist to the homeowner when they apply for a loan modification, which will remain the homeowners point of contact if they decide to try a short sale. This makes things a bit easier as the homeowner doesn’t have to start over with a new individual each time they call Chase.

    -After attempting a loan modification, your loan number is already in the system with Chase’s loss mitigation department, so the short sale submission process is escalated.

    Chase is actively participating in HAFA, which stands for the Home Affordable Foreclosure Alternatives. Homeowners that qualify for a HAFA short sale can receive a $3000 check at closing for relocation assistance. One recent significant change to the HAFA program is there is no longer the occupancy requirement, which further expands the range of qualified HAFA homeowners. More detailed information on the HAFA program can be found here.

    Chase Proactive Short Sale and List Assist

    Chase is now making the short sale process even faster with the Chase Proactive Short Sale and List Assist Program. A homeowner can now get their short sale “pre-approved” before they receive an offer with these programs. This takes a lot of the hassle and headache out of the short sale process, as many times valuations can come back quite different than a contract price, and negate the short sale altogether. I believe this is a fantastic tool to help both the homeowners and agents expedite the typically long and arduous short sale process. The average timeframe for an offer response is only 12-17 days through the Chase Proactive Short Sale and List Assist Programs!

    Accelerator Program-For Chase Portfolio Loans Only!

    Many people have been talking about the short sale incentives that Chase has been offering, up to $35,000 for the successful completion of a short sale. One main item to keep in mind is that this program is by Invite Only; meaning a homeowner needs to receive a letter by mail that references the individual incentive that Chase is offering to them. The problem is that many homeowners that are delinquent quit opening their mail and corresponding with their Servicer, and may in fact be missing a HUGE financial incentive being offered to them!

    Here are some key components to keep in mind with the Accelerator Program:

    -For failed loan modifications (must have a hardship)

    -Invitation Only (by mail)

    -$3,000-$35,000 eligible, offer amount will be in letter (based upon Chase’s foreclosure cost analysis)

    -Letter MUST be included in Short Sale Package submission

    -Letter has an expiration date but that can be extended on a case by case basis

    One thing to keep in mind is that 85% of the short sale packages that Chase receives from agents are incomplete and inaccurate, which can potentially keep a short sale from being approved. Make sure that you are working with an experienced short sale agent that is familiar with Chase’s short sale procedures. Chase will soon be moving to Equator (system that Bank of America uses) which will eventually help expedite the short sale process further.

    For more frequently asked questions regarding a Chase Short Sale in Arizona, here is their FAQ page:

    https://www.chase.com/chf/mortgage/hrm_faqs

    For more information on incentives for a short sale in Arizona please visit our website: http://www.IncentiveShortSale.com   

  • Short Sale Cash Back Incentive Programs for Homeowners

    Posted Under: Home Selling in Scottsdale, Foreclosure in Scottsdale, How To... in Scottsdale  |  February 28, 2012 5:06 PM  |  2,743 views  |  No comments
    There has been a lot of talk lately about the short sale incentive programs that banks are now pushing toward underwater homeowners. The problem seems to be that there is not much information available, and what is there is difficult to find. Homeowners in Arizona that are interested in the short sale programs are mainly utilizing HAFA and the new Save Our Home AZ programs, but what others exist? Here's a look at some of the short sale incentive programs that are currently available to Arizona homeowners:

    FHA Short Sale Incentive Program

    FHA offers sellers a $1000 incentive to complete a short sale through the Pre-Foreclosure Sale Program (PFS) which has actually been around since 1994.  HUD/FHA will pay the seller an incentive to successfully short sale their home within 120 days of approval to the PFS program, as long as the seller meets the FHA short sale incentive program guidelines.  This can be free money for the seller as long as there is no second mortgage or junior lien, otherwise HUD will use the incentive money for secondary liens.

    HAFA Short Sale Incentive Program

    The HAFA short sale program is a lengthy one, but a great option for primary residence homeowners looking for a short sale incentive. True, you may need to jump through a few legal and financial hoops to make sure your deal comes out smoothly, but the $3,000 cash incentive at closing is an enticing one.

    Here are 2 HAFA short sale incentive program benefits that a typical short sale does not offer:

    -Sellers will receive a cash incentive of $3,000 at closing, in order to cover any expenses incurred during relocation.

    -Lenders who partake in a HAFA short sale waive their right to a deficiency judgment.

    HAFA can be a great option; it just takes some time for the approval process like many government sponsored programs.

    Save Our Home AZ Incentive Program

    The Arizona Department of Housing is offering $4,500 to homeowners who successfully complete a short sale of their home through the Save Our Home AZ program. HAFA only offers a $3,000 incentive, so the extra $1500 is a nice enticement. One key component is that the lender(s) involved in the transaction must be willing to participate in the plan. As many homebuyers need assistance as well, the program will pay 3% of the buyers' closing costs. I’ve included some additional information and qualification requirements on IncentiveShortSale.com

    As for incentives offered by particular banks, here is a look at a few programs:

    Wachovia  

    $3,000-$5,000 short sale incentives offered, even on non HAFA and non owner-occupied properties.

    Wells Fargo

    Wells Fargo says it has been making “enhanced financial relocation assistance offers” (or short sale incentives) that can be as much as $10,000 or $20,000 to certain borrowers who choose to go through with a short sale or transfer the title back to Wells Fargo via a deed-in-lieu. The downside is that these larger incentives are mainly offered in Florida and other east coast states where the foreclosure process is lengthy and difficult.

    Chase

    JPMorgan Chase has adopted a range of incentives to borrowers that agree to a pre-foreclosure sale “because if we can’t work out a modification, a short sale is a better result for the borrower, the servicer, the investor, and the neighborhood than a foreclosure,” the company said in a statement. Chase says the amount of the offer “depends on a number of factors” but declined to share specific details on how much money it’s been providing to short sellers.  In terms of the exact dollar amounts, their short sale incentives range between $5,000 and $30,000…plus a borrower can earn an additional $3,000 in addition, if a successful HAFA short sale is completed.

    Here is a sample incentive letter by Chase.

    Citi, CitiGroup, CitiBank

    Citi has confirmed that its average incentive offer is currently $12,000 for borrowers in cases where Citi owns the loan. “Incentives are offered to customers experiencing financial hardship who need funds to proceed with the short sale,” a spokesman for the lender explained. The amount, which is agreed upon upfront, varies according to the borrower’s individual circumstances and loan characteristics, Citi said. It is disbursed to the homeowner when the short sale is completed. Like many programs such as this, typically the incentive offer is extended to the homeowner during the foreclosure process in an effort to entice a short sale transaction.

    Bank of America’s Cooperative Short Sale Program

    Bank of America’s Cooperative Short Sale Program is a new program that began in January 2011 to help provide the quickest route to a short sale decision so that homeowners may explore all their options and avoid foreclosure. With this program, Bank of America typically uses a local listing agent to reach out to the homeowner, and extend them the offer of a “pre-approved” short sale (price is already determined), which keeps them from having to wait up to 60 days for a representative to even be assigned to the short sale. There is a $2500 incentive at closing for the seller, and no deficiency is pursued by the bank. Also it does not have to be owner occupied (investment properties qualify as well). The short sale negotiator that I work with just did one of these for a borrower with 4 investment homes, $10K in incentives and no deficiency!  The seller cannot have secondary loans or mortgage insurance to be eligible. The best part is that the bank will respond to an offer within 10 days, and eliminates the “surprises” that come up with a typical short sale. This program is in test markets and not fully adopted into their system. 

    For more information on short sale incentive programs in Arizona, please visit: IncentiveShortSale.com


  • Top 10 Tips for Buying Cash Flow Properties in Arizona

    Posted Under: Market Conditions in Phoenix, Home Buying in Phoenix, How To... in Phoenix  |  October 4, 2011 5:01 PM  |  2,495 views  |  No comments

    Real estate is still one of the most attractive options for savvy investors, especially given the current economy. Government bonds and treasury bills offer a great deal of safety but provide very low returns. Investing in the stock market has become so risky it could justifiably be called gambling. And the prospect of future inflation eating away financial savings in IRAs and money markets makes them less appealing.

    Investing in real estate for the long term is likely the safest investment one can make today. Yes, a market characterized by foreclosures and short sales means investors must perform more due diligence than in years past. But with a local expert’s help, an investor can buy property at historically low prices and finance it with historically low interest rates. And real estate investments offer protection from inflation that devalues other forms of investment. Today, real estate provides those who perform the needed legwork with superior financial returns and the opportunity of a lifetime.

    There are numerous considerations when researching an investment property, so let's take a look at the top 10 things you should consider when searching for the right one:

     

    •Amount of Listings and Vacancies

    A high number of listings in a particular area could spell trouble for a landlord. That either means the rental season has passed, or the neighborhood may be turning to a “rentals only” neighborhood. Determining which of these is happening is crucial in your strategy. If it is a seasonal issue, you may want to determine when exactly would be the best time for purchase. In some neighborhoods, looking at the school schedule can be helpful.

    Rents are very dependent on supply and demand, so just as in buying a home the number of homes available lowers the potential rent. Finding a neighborhood that has a low vacancy rate can lower your days on market and improve your annual rate of return.

     

    •Employment

    Areas with growing employment opportunities tend to attract more people, meaning more tenants. Examine the average local commute time to the employment sectors, tenants like to live close to work which means higher rents and lower vacancies. The U.S Bureau of Labor Statistics is a good place to research rates, or take a look at the large employers in the immediate area. Areas with schools, hospitals, large scale manufacturing, retail and restaurants tend to draw more renters. Keep an eye on the local papers (online as well) to see if employers are planning on opening facilities in the area, new facilities mean new workers…and new tenants.

     

    •Market Rents

    Knowing what a potential renter will expect when they view your home is very important. Tenants are very astute these days with the amount of information available online, and are doing more and more research before they go out looking. Be familiar with what the average rent would be for your square footage, and use that as a benchmark when determining your formulas.  Some homes may require additional repairs than in other neighborhoods so prepare your calculations accordingly. Reviewing the rental rate history of the area will give you a picture of what to expect down the road.

     

    •Neighborhoods

    Neighborhood quality is a huge factor that can affect other items you will need to examine as well. This can be the benchmark for what type of renters you will attract and what type of vacancy rates you will face. In Tempe for example, rental rates fluctuate greatly with the ASU semester schedule. Many students return home for the summer, thus raising the vacancy rates and lowering potential rents.

     

    •Crime

    Owning a rental home in an area with a high crime rate can cause some major headaches for landlords. Check out the local police department’s website for information on crime statistics in an area. Examining the recent activity versus the past few years should give you an idea in determining if the area is improving or not. Visiting the area during various times of the day and evening should also help give you a sense of the criminal activity. If you are lucky enough to speak with a local policeman, they should be able to give you an idea of the areas to stay away from.

     

    •Schools

    Many tenants these days have larger families than years previous, so the local school ratings are becoming increasingly important. Conducting online research is fairly easy when rating a school district, but conduction physical research may be helpful as well. Take a look at the prominent elementary and high schools in the area…although you are mainly concerned about cashflow today, this could be a major factor once you decide to sell the home one day.

     

    •Amenities

    Drive and search online for surrounding parks, shopping centers, restaurants, and other area attractions that would attract potential renters.  A good place to start is the city’s website and by “googling” the zip code to find out what’s in the immediate area. Some neighborhoods feature community pools and other amenities with the HOA dues, but be cautious as HOA fees are paid by the landlord and a high HOA fee can hurt your monthly return. Most suburban neighborhoods are less than $50 a month, but if there are amenities included those rates can jump much higher.

     

    • Future Development

    If there are new condo communities, shopping centers or commercial condos going up in an area, that is a good sign that it is a growth area.  The local municipal planning department will have information on all the future development that is coming or has been planned for the area. However, look out for new development projects that could hurt the ”rentability” of the area which would make finding a tenant more difficult. If there are many new apartment projects planned, then it may be much tougher to find a renter as you will have corporate, big budget landlord competition.

     

    •Homeowners Associations

    HOAs are pretty much standard in neighborhoods built within the last 10 years, so understanding their role in your investment is very important. A high HOA rate could lower your return, but it could also mean extra included amenities which may lower your vacancy rate. If an HOA is higher than normal for an area, and the amenities do not cater well to tenants, you may want to avoid the neighborhood. However, if a neighborhood has a low HOA and it’s obvious that the bylaws are not being enforced (weeds in yards, immobile vehicles in driveways, garbage containers visible, etc) you may want to avoid the neighborhood as well...resale could be a problem down the road.

     

    •Property Taxes

    Property taxes can vary from one municipality to another, but generally run about $100 per month in most rental areas ($1200/year). Examining the tax history can be helpful in determining future tax rates. Looking up the local tax information is very easy as Maricopa and Pinal counties have easy to use websites that allow individual parcel number searches.

     

    Getting Information from the Neighbors

    Many times investors will talk to local homeowners but avoid tenants, which is a mistake. Tenants will be very candid about the area and give you a clear picture of what’s really happening since they have no ownership stake in it. Visiting the neighborhood throughout different times of the day will give you a higher probable chance of meeting some chatty residents.

     

    The Actual Property

    What we’ve found to work the best for investors in terms of cashflow is single family residences. The HOA fees are typically much lower than condos and the tenant is responsible for the landscape maintenance. True, with condos you don’t have to worry about the landscaping, but we make sure that the tenant is aware that if the grounds are not maintained that they will be paying any HOA fees that are incurred. Single family homes also limit the amount of competition that condos face from apartment communities.  

    Single family homes  tend to attract longer term renters, especially in the newer, suburban communities. For this reason we recommend looking to the newer, outlying areas of town, predominantly referred to as the “boom areas”. These are the Phoenix suburbs that experienced tremendous growth during our real estate boom, and therefore many homes are less than 10 years old, meaning less maintenance for the landlord. Now, some of these areas work much better than others in terms of cashflow and low days on market, and we would be happy to discuss these communities with you personally. These areas are also predicted to appreciate well in the next 5-10 years.

    Now, condos can still be a nice investment option as well, when purchased in the right area. With condos you need to remember that you are buying the “community” as much as the “unit” itself. Certain areas of the Valley cater towards condo living much better than others, and with Phoenix being the very definition of “urban sprawl” this becomes a very important factor. A condo might be a great option for the buyer looking to use the unit personally down the road. We have many clients that are still a few years out from retirement, and want a low cost vacation home with amenities once they are ready to give up the working life…for those buyers, condos are a great option.

    There are many deals still to be had, and the rental market continues to strengthen in the Phoenix Metro area. The traditional real estate investing principles still hold true, and those that do things the right way will look back and be glad that they were the ones that took action.

    Contact Dan at Dan@DanMullarkey.com or visit www.TheMullarkeyGroup.com

  • Fannie Mae and Freddie Mac First Look Initiative Explained

    Posted Under: Home Buying in Phoenix, Foreclosure in Phoenix, How To... in Phoenix  |  July 17, 2011 11:09 PM  |  3,465 views  |  2 comments

    More and more international and even local homebuyers have been asking me lately about the First look program put forth by both Fannie Mae and Freddie Mac, the two largest holders of REO property in America.  There seems to be some confusion on the Program itself and how it impacts their purchasing power in the Arizona foreclosure marketplace. I put together some information that I hope clarifies both the program’s objectives and the manner in which today’s homebuyer views these listings as they hit the market.

    Fannie Mae First Look

    The First Look program was designed to promote owner occupancy and homeowner involvement in their community.  Individual homebuyers and public entities are given a set period of time, usually 15 days after a property is listed on the HomePath.com website, to submit an offer to purchase before the property is made available to investors and second homebuyers.  According to the policy, Second homeowners (such as Canadian vacation home purchasers) are included in the investor category since they will not occupy the home primarily. Public entities have financed over 5,000 properties through First Look using Neighborhood Stabilization Program funds.

    "While investors play an important role in the REO market, homebuyers who intend to occupy a home make an immediate and lasting commitment to the community and therefore merit priority consideration in the REO sales process," said Jay Ryan, Vice President for Alternative REO Dispositions at Fannie Mae. "Public entities under the Neighborhood Stabilization Program also benefit from inspecting eligible properties and making offers to purchase without pressure from open market competition. These entities are making considerable investments in rehabilitation and stabilization."

    The main idea here is to give primary owner occupant purchasers the first shot at these listings. Without this program in place, many owner occupant buyers would be helpless in competing with cash investors who can close in a matter of days.  The main restriction as I see it is lumping Second homebuyers with investors, as many of these buyers are legitimately looking to occupy the property  for many months out of the year, and sometimes even nearing full time. Second homebuyers typically show a strong pride of ownership and take pride in their neighborhood. Overall, the program does definitely help the primary owner occupant in a competitive Phoenix Metro REO market so it is a vital component in reviving struggling neighborhoods.

     

    Freddie Mac First Look Initiative

    Freddie Mac First Look Initiative program offers homebuyers and select non-profits an exclusive opportunity to purchase HomeSteps/Freddie Mac homes before competition from investors and second homebuyers. This program offers owner occupant homebuyers, Neighborhood Stabilization (NSP) grantees and non-profits engaged in community stabilization efforts the ability to purchase HomeSteps homes during their initial 15 days of listing. After the 15 days expires, the home will open up to all Purchasers.

     

    The initiative supports Freddie Mac’s mission to stabilize communities and support housing recovery through the creation of affordable home-ownership opportunities.

     

    How does the initiative work? During the first 15 days a home is listed for sale in the Multiple Listing Service (MLS), HomeSteps will consider purchase offers from owner-occupants, public entities or their designated partners only. Buyers intending to purchase the property for investment, may submit offers to the listing broker and HomeSteps will consider them after the initial 15 listing days have expired; this assumes the house hasn’t sold. Many sell during the first 15 days to owner occupants. Typically condos have the best shot at making it through First look since financing programs are difficult to find.

     

    What homes are eligible to be included in the Freddie Mac First Look Initiative? All HomeSteps homes listed on or after September 17, 2010, are eligible for inclusion in the program.

     

    How will a homebuyer know if a home is included in the program? Buyers may contact their selling agent or the listing broker with questions about the eligibility of a home;  this information will also be included in MLS listing information.

     

    How can a homebuyer determine the number of days the home has left under the initiative? Buyers must have their broker check MLS or contact the listing broker to determine how many days are left. They can also check the Homesteps website to see when First Look expires.

     

    How will the Seller know if the homebuyer is buying the home as their primary residence? The buyer and their selling agent must sign an affidavit confirming that the buyer will occupy the home as their primary residence. If this affidavit is fraudulently signed, the homebuyer and their agent may be subject to criminal prosecution and fines.

     

    To participate in the Freddie Mac or Fannie Mae First Look Initiative as a homebuyer or to submit offers as an investor, contact me at dan@danmullarkey.com or on my cell at 480-296-5959.

    Article Source: http://themullarkeygroup.com/2011/07/17/fannie-mae-and-freddie-mac-first-look-initiative-explained/

    To Search Foreclosures in Arizona:
    http://www.MGroupAZ.com

    To Search HUD Homes in Arizona: http://themullarkeygroup.com/2011/12/15/new-hud-home-mls-search/

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