August statistics show active listing inventory is up, pending and closed sales as well as average and median prices in the Pensacola area area all down, but I am not discouraged. My company has a large property management division and we have had a record summer leasing homes.  I for one bought three homes this summer, and will continue to buy if the deals keep coming.  We have a constant need for apartments and homes for long term tenants in our area.  With the historically low interest rates and the low prices we are seeing now it is possible to purchase investments that will provide long term income with a great rate of return for years to come.  If you are not into actively managing your own properties let us do it for you, we have a proven track record for finding the deals, helping to get repairs done to make the property rent ready, finding quality tenants,keeping track of your income and expenses for you and taking care of all the daily management details.

I have owned and managed my own properties for over 30 years, and Realty Masters has been managing properties in the area since 1998, so if you have any questions about this aspect of the business I consider myself to be an expert in this area.  Cash sales, mortgage financing,1031 Exchanges, and Self directed IRA's, are all ways I have helped my clients purchase investment real estate in 2010.  Visit my website at http://pensacolarealtymasters.com for more info about property investments and management services, and if you are considering using retirement funds to fund your purchase I recommend http://www.theentrustgroup.com, they are Nationwide and offer education about self directed IRA's as well as self directed IRA services for real estate purchases. Happy Investing!

Worst new home sales....in decades.

How bad? May new home sales dropped by nearly 33%. Lowest housing numbers EVER were in 1981...and its predicted that this past May's numbers will be the worst...ever. Not a great time to be a new home builder.

I have also noted that pending sales listed in our MLS service in the greater Pensacola area were down by about 40% form May's numbers in 2009 so that may translate into fewer June closings in our area.  June is usually one of our better months, but I have nto seen it to be so sgood this year.  And we are on the Gulf Coast so the oil spill can't be helping our numbers. 

As of April 22, 2010, the EPA has a new lead-based-paint renovation rule that impacts anyone paid to perform work that disturbs paint in housing built before 1978. The EPA considers receipt of rent payments or salaries derived from rental payments as compensation. This means landlords and employees of property management companies who perform renovation activities must also comply wiht this rule. 

Any activity that disturbs paint in pre 1978 housing is subject tot he rule.  That includes remodeling and repair, electrical, plumbing, painting, sanding and scraping, carpentry and window replacement.  FOr a copy of the  "Renovate Right" pamphlet, go to http://epa.gov/lead

As a result of these new rules, I foresee the cost of repairs to older buildings going up considerably and may make it more difficult for Realtors to sell these homes to investors, which can result in decreased property desirability and may affect values negatively.  SInce my buisness focuses on selling and managing investment property this information will affect which properties I would advise an investor to purchase. I will recommend properties built 1978 or after to my clients.

BP announced the availability of state-specific websites designed to offer information to residents of communities affected by the Deepwater Horizon oil spill. Residents are encouraged to visit these sites frequently and sign up for the mailing list to receive the most current information about the spill response.
These websites provide up-to-date information about activities and events most important to residents of each state. Residents can sign up to receive email updates, follow an RSS feed, a Twitter feed or a Facebook page with this information. The sites will provide updates on BP's state and local response plans, activities, information about opportunities to be involved in clean-up efforts and information from the many participating agencies and organizations in each state.  
Alabama: www.alabamagulfresponse.com
Florida: www.floridagulfresponse.com

In Pensacola we currently have the Perdido Beaches under a health alert and visitors have been asked to avoid contact with oil or the water, but Pensacola Beach is still open.  The oil slick is just offshrore so this may change by the weekend.

It is still too early to tell how this will affect our real estate sales values and number of sales inland, but I feel that the beach real estate which has already suffered over the past couple of years will continue to decline, and our local economy will be affected for a long time to come due to tourist eservations for this summer that are being cancelled.

I am happy to report we still have a very active rental market and we intend to continue to solicit new properties for our long term rental program. Clean up workers will likely need a place to live, and the military will continue to transfer people in and out of our area so there will always be a need for this type of housing. 

My company does alot of property management. I have had several investor clients who have let their property go into foreclosure.  Often, they have not even notified me or consulted with me about their circumstances and we found out when the tenant received a default notice and they call upset. The result is usually a lost tenant, no matter what we tell them about the lease contract they are obligated to they often get upset and start looking for another house.  Then we have a house in default that the owner wants us to find another tenant for.  At this point we must tell them that we will not lease the property to someone else while we know the owner is in default.

There may be significant tax consequences for the investor client that loses his property through a foreclosure or short sale.  THe investor may still owe Capital Gains Tax, tax on Cancellation of Debt(COD), and/or tax on the recapture of depreciation deductions taken on the property. You can view the tax consequences on http://www.IRS.gov. 

One example is, if you borrow money from a lender and the lender later cancels or forgives the debt, they are usually required to report the canceled debt to you adn the IRS on a 1099-C, Cancellation of Debt. There is also the fact that investors depreciate an investment proeprty over a certain number of years.  When sold under a short sale or when foreclosed the investor could still be subject to capital gains tax, or tax on the recaptureof his depreciaiton deductions.  These are certainly items one might want to consider telling an investor who is in default.

 

I live in Gulf Breeze Florida and am sad to see that this oil spill in Louisiana is going to be affecting our beautiful coastline, our wildlife and our economy for a long time to come.  As if Florida did not have enough problems. Today at 3 pm a state of emergency was declared for our area.  Local areas are expected to begin seeing the impact of the Deepwater Horizon collapse sometime Monday, May 3, with Escambia County affected first. For more information visit www.santarosa.fl.gov

Citizens can sign up to automatically to receive breaking news alerts from Santa Rosa County Emergency Management via e-mail or as a text message on their cell phone at:  www.santarosa.fl.gov/emergency/publicwarning.html. 

With the downturn in the real estate market, I have been focusing on two things in my real estate business:

 1.) helping investors find great deals on homes they can lease for a positive cash flow and future appreciation.  Some of the investors are using self directed IRA's to get the money to pay cash and fix up distressed properties.

                                                       and

  2.) my property management business. Providing property owners and renters in the Pensacola area with quality management services has paid off for my company. I am happy to report we have achieved the status of number one for our MLS area for homes rented for the past 12 months. I am thankful to all my clients and my property management team for their dedication. 

Market Penetration By Company 3/25/2009 - 3/25/2010 Status: R, Category: Rental, Side: Both Sides Rank           Code    Name                                                     SidesVolumeAverage% Sides% Volume

Category:5
1	ALLS01	REALTY MASTERS	504	$423,158	$1,679	5.65%	5.25%
2	OLDS01	OLD SOUTH PROPERTIES INC	498	$417,538	$1,676	5.58%	5.18%
3	RMAX01	RE/MAX HORIZONS REALTY	396	$310,694	$1,569	4.43%	3.85%
4	MD&K01	MARK DOWNEY & ASSOCIATES, INC.	306	$276,700	$1,808	3.43%	3.43%
5	SHOM01	CENTURY 21 SOUTHERN HOMES RLTY, INC	294	$233,100	$1,585	3.29%	2.89%
6	TSBR01	TEAM SANDY BLANTON REALTY, INC	294	$179,628	$1,221	3.29%	2.22%
7	SUNQ01	SUN QUEST PROPERTIES OF NWF,I	290	$247,830	$1,709	3.25%	3.07%
8	BEUM01	BEUMER REALTY	270	$256,780	$1,902	3.02%	3.18%
9	CBU002	COLDWELL BANKER UNITED, REALTORS	268	$273,960	$2,044	3.00%	3.39%
10	PRSI01	PERDIDO SAND REALTY, INC.	248	$308,410	$2,487	2.78%	3.82%

In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration's most aggressive attempts to grapple with a problem that has defied solutions. More than five million households are behind on their mortgages and risk foreclosure. The government's $75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done. I say instead of paying seller to leave, they should pay the mortgage companies if they negotiatie to accpet the offer within 30 days and close within 90 days, I don't think it is the sellers who are holding up the process, it is the banks. Pam Keen/Broker

Important News!

 Effective for all sales contracts dated on or after February 1, 2010.

Certain property may be resold and financed using FHA insured financing without waiting 90 days.

FHA has temporarily waived the 90 day wait period, on certain transactions. These recently purchased homes may be sold and financed with FHA insurance

•Ø  Private sellers and investors are now eligible to take advantage of this waiver.

 •Ø  These transactions must be arms-length, with no identity of interest between the buyer and the seller or other parties participating in the sales transaction.

 •Ø  In cases where the sales price is 20% or greater than the seller's acquisition, the lender must justify the increase in value with supporting documentation of renovation, repair and rehab work.

 •Ø  If no work was performed the appraiser must provide an appropriate explanation of the increase in property value since the prior title transfer.

 •Ø  The lender must order a property inspection and provide that report to the home buyer. Buyer's may be charged for the cost of this inspection.

If you have transactions meeting this guideline you are advised to read the waiver in its entirety here: http://www.hud.gov/offices/hsg/sfh/waivpropflip2010.pdf