It is always a tough decison where to buy since good properties tend to be priced above what makes sense for cash flow (low rents compared to sales price). I personally like to buy in marginal neighborhoods since they tend to have better cash flow and my company is good at picking tenants like South Sacramento(95820, 95823, 95824, 95828). But some like more middle of the road neighborhoods and pay a little more, with less cash flow Natomas (95834, 95835) or Elk Grove (95624, 95757, 95758) make sense for that middle area. Higher end properties like Folsom (95630) can make sense if the deal is good and the investor can wait out the slow sales market. Of course, there are a lot more choices than that, but most fall in one of those three categories.

Yesterday Fannie Mae announced a new program it has designed to further assist homeowners facing foreclosure.

The Deed-for-Lease Program (D4L) allows qualifying homeowners to remain in their homes by signing a lease in connection with voluntarily transferring the property deed back to the lender. According to a press release from Fannie Mae, “The new program is designed for borrowers who do not qualify for or have not been able to sustain other loan-workout solutions, such as a modification.

Under Deed for Lease, borrowers transfer their property to the lender by completing a deed in lieu of foreclosure, and then lease back the house at a market rate. To participate in the program, borrowers must live in the home as their primary residence and must be released from any subordinate liens on the property. Tenants of borrowers in this circumstance may also be eligible for leases under the program. Borrowers or tenants interested in a lease must be able to document that the new market rental rate is no more than 31% of their gross income. Leases under the new program may be up to 12 months, with the possibility of term renewal or month-to-month extensions after that period. A Deed for Lease property that is subsequently sold includes an assignment of the lease to the buyer.”

To learn more about D4L please visit www.efanniemae.com. There you will find program details, eligibility requirements, and a helpful FAQ document.

The Sacramento rental market is struggling a bit more than usual. There are fewer rentals available and those that are on the market are not seeing a real strong demand.

Our firm rented out an above average amount of rentals in October which has lowered our overall available properties. It appears the winter will be slow and that usually means the spring will see a rebound.

Vacancy rates are holding at around 5% or lower for single family homes, but don't expect rents to rise anytime soon.

You can access our rental survey at our website:  www.HomePointe.com and click on Owner Services.

We have noted that the rental market is pretty soft right now.  It is a combination of the soft job market, state furloughs, soft real estate market, lower amounts of foreclosures, and finally, school is in sesson and the holidays are close.  In sum, everything is working against a strong rental market right now.

One thing I know, the market in Sacramento has never fallen off the cliff.  We have a stable job base in the state, the exception this time being the 10-15% pay cuts for state workers. 

The next big event will be the new year.  Pent up demand usually makes Janaury a strong month.  We will see.

The funny thing is that we are still renting property at a brisk pace.  Just at lower prices.

At next year's National Association of Residential Property Managers (NARPM) Convention and Trade Show the past presidents will host a charity golf tournament.  The location in Seattle has yet to be determined but the date is to be October 13, 2010.  The shotgun style tournament will be a best ball scramble and each foursome is to include a NARPM past president.

So far we have a committment from Chris Hermanski, MPM, who owns Mainlander Property Management in Portland, Oregon to be the Site Chairman.  Mark Kreditor, MPM, who owns Get There First Property Management in Dallas, Texas is in charge of Sponsorships. 

The charity part is something that will change year to year based on one of the past presidents selection.  For this 2010 tournament the charity is Creative Living Options which is located in Sacramento, CA.  Here is some information on this non profit and the work it does:

Creative Living Options (CLO) is a non-profit agency that provides Supported Living Services for adults managing developmental disabilities in Sacramento, Yolo, and Placer counties in California. Creative Living Options: • Enables people to live in homes of their own • Encircles people with holistic, individualized supports • Embraces each person’s lifestyle choices • Encourages and supports people to participate in their communities • Empowers people to pursue their dreams

Their  website address is www.creativelivingoptions.com

We have not yet set the goal for funds to be raised but that is coming soon. 

I am the this years chair of the tournament and am seeking additional help. Contact me if you are interested.  Stay tuned for updates as they become available.  I welcome your support.

Some property managers are telling their clients that they must now receive their owner statements via email and owner proceeds checks via ACH (direct deposit).  This is a "go green" proposition and money saving for all as it reduces delivery costs and speeds delivery of both statements and funds.

I am curious what you think of the idea of forcing that issue.  A property management company may lose some older and institutional clients by going completely paperless.

HomePointe offers both methods at this time.  But, certainly "going green" has its merits if every client does it.

The first annual Appfolio Golf Tournament held at Osprey Ridge in Orlando, Florida in conjuction with the National NARPM Convention and Trade Show went off on time this morning at 9:30 am with a shotgun start.

Bob Machado took the early lead but Chris Hermanski did not remain far behind. In the end, Bob sunk a short putt on 18 for par to win $10.00 and the tournament. Chris came in second but did win the 16th hole, a long water laden par 5.

Next year promises to be an even better and bigger event. We thank all the tournament organizers including Alana Pergis, Aimee Miller, and Albert Oaten. Without Appfolio's committment this tournament would not have been a success. See you next year in Seattle!

Whenever I have an early flight out of Sacramento I always stop at La Salsa Fresh Mexican Grill in Terminal A.  Their breakfast burrito and and an orange juice is a real treat.

The burrito includes scrambled eggs, salsa, and chorrizo.  Just the right amount of food and made fresh.

My flight to Orlando will be much more pleasant on a full stomach without having to suffer through hungry.  Give this place a try on your next flight.

The highlight of year for us single family property managers is the national convention.  This annual event is being held this year in Orlando, Florida. 

Among the many features of this event are a trade show featuring the many vendors that serve our industry including software, advertising, and credit reporting companies.  There will also be keynote addresses, classes on many subjects of interest to professional property managers, and lots of networking.  Getting to know managers and how they do business all over the country is a huge advantage for the attendees.  Much time is saved and profitability increased by paying attention to the best practices in the industry.

For more information go to www.narpm.org.

We sign up a lot of owners for our property management services. Once signed up, we check the county records to see if we have signed up the actual owner of the property.

Some of the time we sign up an owner that has a spouse who is not present at the meeting. So we just sign up that spouse and follow the directions of the person we met.

Recently this happened and then we got a call from the other spouse stating that they were getting a divorce and she wanted the rent money. My first inclination is to stop everything and wait until the two of them work it out. My backup plan is start writing owner proceeds checks in both of their names so they both must sign the checks.

Anyone got a better plan?