Thursday, August 16, 2012

Foreclosure/REO Property - "Real Estate Reality"

Note to Self:
"After 25 years, you should KNOW better!"
25 Years!  
That's how long I've been a Real Estate Broker... 
Helping Buyers and Sellers and Investors navigate the mine fields of several crazy market swings.  In 1986, as a newbie, they gave me a manual "mortgage calculator wheel" to help figure monthly payments... and the mortgage interest rates on the wheel STARTED at 10%.  Why?  Because there were no available rates under that.  When I came back from Berlin, Germany with the Army in 1980, to work at the Pentagon, I bought a house with a rate of 16.75%.  So don't complain if you feel abused today with a 4.5% rate.

So, with all this experience and wisdom, I should have discipline and smart business sense, right?  I should look them in the eye and tell them they have little chance to be successful in certain types of transactions, right?  Well, I do... most of the time.  Here's the deal - I have a strong desire to help people get what they want, as far as their Real Estate Goals are concerned.  And I feel pretty good, knowing that's the heart and soul of how I approach things.  If a guy tells me he wants to buy a house, I'm going to work it for him, like a dog on a bone.

But lately, I've been experiencing a lot of push-back from specific areas of the market... and I don't like my lack of self discipline, in how I've responded.  Two quotes come to mind:

  • "Knowing that the task was absolutely impossible, I doubled my efforts anyway." (Unknown)
  • "A man's got to know his limitations."  (Dirty Harry/Clint Eastwood)
"I can get a great deal, right?"
Here's the cheese to go with my whine.  Buyers call me and say something like, "Frank, I found this house at 3113 Chatham Road online, and it's 2,400 square feet, with 4 Bedrooms, for only $119,500!"  "Can you show it to me?"  And I immediately start to think, "Oh, Oh..."  because I KNOW it's an REO (Real Estate Owned - Bank Foreclosure)  Of course my buyer wants to see it, however, it's been on the market for only 3 days and it's listed at a "teaser price" - crafted to create competitive bids.  They race to get a "lender qualification letter" to show they can get a mortgage.  They want to offer less than the asking price, have an inspection contingency, make it subject to their bank's appraisal, and offer a $1,000 max escrow deposit.

So, what's the problem?  As soon as our offer goes in and 5 days have passed, we are told by the listing company that we need a "Multiple Offer Disclosure Form" and that "Highest and Best" offers are now due "by Noon tomorrow."  There are 12 total offers and ours is the only one that's not "cash with no contingencies."  These investors can usually close in 15-30 days and also are not timid about going over the asking price.  They realize the value presented and they know we are at the bottom now.  BOOM!  SPLASH!  (That's the sound of being blown out of the water)...

In Flagler County, Florida today, there are 685 homes For Sale, from $35,000 to $4,200,000.  Only 17% are distressed (short sales/foreclosures) and only 5% are REO/Bank Owned.  Sounds pretty OK?  Sure, BUT in the "Under $150,000," market it's different... Way different!  There's only 175 of those homes and 63% are distressed... with a whopping 35% being REO/Bank Owned!  And that is exactly the market segment that draws all the "investors with cash" looking for rental properties.  And they are driving "Mom and Pop with a mortgage" out of the segment.

I'm not saying that's bad, because it's not.  Actually, it is helping to clear out the market bottom, which is essential to real recovery.  But my "lesson learned" is this:  Keep my "non-investor" buyers with mortgages in the "normal" market and away from REO enticements.  Short sales are OK now (and I'm shocked to hear myself say that).  BUT, stay away from REO's!!!  Fool me once, shame on you.  Fool me twice, shame on me!

Monday, July 16, 2012

Palm Coast, FL, Olympic Dream - Sam Vazquez

Long journey to Olympics for one-time high school phenom Vazquez

28-year-old volunteer coach at the Illinois Institute of Technology to represent Puerto Rico in 1,500 meters

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Sam Vazquez
Sam Vazquez training at the University Chicago athletic facilities. (Phil Velasquez/Tribune Photo /July 15, 2012)

On June 14, 2003, Sam Vazquez ran the Adidas National Scholastic High School Meet in Raleigh, N.C., against one of the fastest prep mile fields ever assembled. Vazquez won in 4 minutes, 3.87 seconds, beating — among others — eventual two-time U.S. Olympian Leonel Manzano.

Vazquez, then a high school senior, and his coaches, present and future, justifiably figured he was on a fast track to make an Olympic team as well.

Almost nine years later, in an unheralded June 16 Indianapolis race that ended just before midnight, the 28-year-old volunteer coach at the Illinois Institute of Technology went back to the future.

By running the 1,500 meters in a national-record time of 3:37.60, Vazquez qualified to join old rival Manzano in the metric mile at the 2012 Olympics.

The difference is Vazquez's time is the national record of Puerto Rico, his ancestral homeland and the country for which he will be running in London.

The difference is Vazquez's career got so far off track that he spent several years running in place — when he was running at all.

"Sam had gone back to square one," said Peter Hopfe, his coach at Flagler Palm Coast (Fla.) High School andEmbry-Riddle Aeronautical University. "He had regressed to the level of when I first met him after his freshman year of high school."

Too immature for the academic challenges of college, Vazquez threw away a chance to develop in one of the country's top track programs by not caring about classes and flunking out of the University of Arkansas after finishing fourth in the Southeastern Conference 1,500 as a freshman. He moved back in with his mother in Florida, drifted from one low-paying job to another and was out of the sport for four years.

"The job that woke me up was being a sandwich maker," he said. "I was thinking, 'Someone should be making sandwiches for me.'

"At times I do regret what happened at Arkansas. Things would be so different now. I probably would have a pro contract. But I probably wouldn't have met my wife."

Vazquez met Flo Silva, 23, a native of Uruguay, in Florida through a mutual friend. They married five years ago.

She encouraged him to return to running and school. They both earned degrees last year from Embry-Riddle and ran on the track and cross-country teams. He won an NAIA national indoor title in the 1,000 meters as a senior.

"I really grew up," Vazquez said. "Going to class with Flo all the time helped me concentrate on doing two things at once and doing them both well."

They moved to Chicago last July, when she got a job in revenue management with United Airlines. They live with her mother, two dogs and a cat in a South Loop apartment that costs three times as much as their rent in Florida. They make ends meet on Flo's salary so Sam can concentrate on running.

"I wanted him to follow his dream even if we struggle financially most of the time," Flo said. "In the end, hopefully he will get a sponsorship."

Before he entered Arkansas, Vazquez represented the United States at the Pan American Junior Championships. After so many years away from running, Vazquez realized his best chance to return to elite international competition would be as a Puerto Rican, no matter that the little Spanish he speaks is with a Uruguayan accent.

Seven of the 23 athletes on Puerto Rico's 2012 Olympic team live in the United States.

Vazquez ran the 1,500 for Puerto Rico at the 2011 Pan American Games, finishing ninth. Then he began chasing the Olympic "B" qualifying standard, 3:38. It took eight races to get it.

"I knew it was in there," Hopfe said. "Sam has it back. Now he has to take it to the next level."

Hopfe acts as a mentor for Vazquez, who essentially coaches himself during workouts at the University of Chicago track. In the last two years, his times finally have become faster than what he clocked in high school.

"I think the time off saved my body," he said. "If I can gain a sponsor, I want to try to run another eight years. I'm still learning."

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