Good to see some of the news media recognize the hand investors have in alleviating some of the pressure of the housing crisis.
Still, real-estate experts working inside and outside the investment community agreed that investor interest in the Valley real-estate market has helped to prevent communities in 2009 from being overtaken by boarded-up, crime-friendly vacant homes.
“We’d be in a disaster area without the independent investor in today’s real-estate market,” said Alan Langston, who runs an information-exchange service for investors in Arizona.
The housing market certainly is an interesting beast; but investors, especially in pre-foreclosure properties, are one of the keys to turning around the housing market by removing underwater properties from the bank’s books and giving them new life. The housing market may or may not be at the bottom yet; but you can bet there are investors riding the train both directions, up or down. Being successful revolves around knowing which cards to play at what time.
We’ve said it before, but creativity in the real estate industry is critical: One investor is building a company that creates homeowner / investor partnerships as a creative solution to keeping the home:
Dave Dziedzic, owner and designated broker of RealCore Realty International in Phoenix, said he was launching a program called Housing Angels that would create partnerships between investors and homeowner-occupants.
It could help those destined for foreclosure to keep their homes by short-selling them to investors, leasing back the homes for a few years and then buying them back at a much lower price, Dziedzic said.
The program is still untried in Arizona and could run into resistance from the banks, he said.
Dziedzic and others working with investors said they have taken on a vital role in stabilizing the housing market, by fixing up blighted properties that traditional lenders don’t want to deal with and first-time homebuyers don’t have the cash to pay for in advance.
One of Dziedzic’s employees, Jeff Dicks of Avondale, said he is counting on the new angel-investor program to help him keep his home.
“I said, ‘Dave, I need an angel,’ ” said Dicks, who like many Valley residents has taken a significant pay cut during the past year.
And of course the role of Short Sales in particular;
There has been a rapid rise in short-sale transactions in which homeowners in default on their mortgage avoid foreclosure by getting the lender’s permission to sell the home for less than their loan’s outstanding balance.
The short-sale process, which can be time-consuming and often requires the consent of multiple moneylenders, has become widespread despite initial reluctance by lenders, homeowners, buyers and sellers to embrace it.
Langston, executive director of the Arizona Real Estate Investors Association, based in Tempe, said a number of recent developments have slowed the rate of lender foreclosure in recent months, which has reduced the number of listings that might appeal to an investor.
One factor is the rise in short sales, which have replaced about 25 percent of the foreclosures banks were initiating a year ago, he said. Langston said many investors don’t want to get involved in short sales because of their reputation for being lengthy and unreliable, but that widespread adoption of the short-sale process is making them almost unavoidable.
Again, adoption of what is the reality of the real estate market is key. Sure, many investors may not want to deal with short sales; but develop a system for managing your workload and they can be tremendously lucrative.
What are your thoughts? We’d love to hear from you about your creativity in the housing crisis!
