Explosive Growth in Texas Investment Buyers

Investors across the globe are purchasing single family rental properties throughout Texas. Texas migration patterns, the strong economy, and lack of financing are driving rents to skyrocket. Rents have increased almost 10% in east Dallas, Uptown and other areas throughout the metroplex. The luxury rental market and the market that previously fell within the range of first time home buyers is now further hollowing out the rental market. The lack of financing available for first time home buyers coupled with distressed sales such as short sales and foreclosures, creates the perfect storm for investor purchases...Another game changer is how residential real estate is now viewed as an asset class by institutional investors and private equity funds. Many funds that have been buying in the sand states, (Florida, Nevada, Arizona and California) are now buying in Texas due to the lack of distressed inventory.
The amount of capital that has been on the sidelines for the last five years in the distressed debt market has created a lot of pent up demand for distressed mortgage debt. A lot of that capital is now being transitioned into the residential single family market. Logan Waller, President of Waller Group Properties and Waller Group Property Management provides services for several hedge funds and many individual investors. “An Australian hedge fund that could purchase anywhere in the world chose to first invest in North Texas. This speaks volumes for our N. Texas Market, we have worked with investors for years since we list properties for most of the major banks and servicers. The difference in the investors over the last year is that they are institutional and high net worth individuals...The investors in years past have been less sophisticated property flippers that were looking for a quick return, usually with unrealistic expectations. They can no longer compete with our institutional investors and high net worth individuals that use our platform of services from acquisition, renovation, accounting, make ready and lease up; providing a true passive investment to the investor. High net worth individuals have the ability to take advantage of the low interest rates through cross collateralizing their assets, allowing them to borrow at almost half the cost of a typical first time home owner.”
 With increasing rents, investors are seeing a 7-14% cash on cash return on their money.  As the stock market becomes more volatile, an income producing investment property that can be purchased for 1/4th of replacement cost is a VERY attractive alternative."


Logan Waller,
Waller Group Properties
214.704.5001
Dallas•Austin•Houston

Homebuyer Interest In Foreclosures Increases In The U.S. #Foreclosures

 

Homebuyer interest in purchasing a foreclosed property more than doubled in the past 2 1/2 years even as the U.S. available inventory shrinks, according to a Realtor.com survey.The share of buyers who say they’re likely to purchase a foreclosed home jumped to almost 65 percent from 25 percent in October 2009,...

 

Homebuyer Interest in Foreclosures Increases in the U.S.

By Prashant Gopal - May 30, 2012 5:00 AM CT

• Facebook Share
• LinkedIn
• Google +1
• 0 Comments
• Print
• QUEUE
  
  

  Q

Homebuyer interest in purchasing a foreclosed property more than doubled in the past 2 1/2 years even as the U.S. available inventory shrinks, according to a Realtor.com survey.
The share of buyers who say they’re likely to purchase a foreclosed home jumped to almost 65 percent from 25 percent in October 2009, according to the telephone poll by Realtor.com, the National Association of Realtors’ website. The survey was conducted this month and the results were released today.
U.S. foreclosure filings fell to a five-year low last month as lenders sought to avoid repossessing properties and a housing recovery showed signs of taking hold, RealtyTrac Inc. reported on May 17. The number of default, auction and seizure notices sent to homeowners dropped 14 percent from a year earlier and was the lowest tally since July 2007.
“Because prices are getting towards the bottom, people see foreclosures as even a greater value because they’re usually priced below market,” Steve Berkowitz, chief executive officer of Campbell, California-based Move Inc. (MOVE), which operates the Realtor.com website, said in a telephone interview.
Home prices in 20 U.S. cities fell in the 12 months ended March at the slowest pace in more than a year. The S&P/Case- Shiller index of property values dropped 2.6 percent from a year earlier following a 3.5 percent decline in February, the group reported yesterday.
Almost 56 percent of respondents in the Realtor.com survey said they are concerned that major lenders will release backlogged foreclosures onto the market and bring down values in their markets.
A “gradually rising foreclosure tide” forecast by Irvine, California-based RealtyTrac after a February settlement by the nation’s biggest mortgage servicers over faulty documentation practices has yet to materialize. Banks have been finding alternatives to seizures, such as approving the sale of distressed properties for less than the amount owed on them.
The Realtor.com survey of 1,004 adults was conducted from May 4 to 6 and has a margin of error of 3 percentage points.
To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Bank Foreclosure info

http://www.reodev.com/property-for-sale/georgia-dallas-30132-251-moriah-ln/  

Foreclosure Discounts

http://www.dallasnews.com/business/residential-real-estate/20120307-foreclosure-discounts-fuel-dallas-home-price-declines.ece      click this link to read more!

Teas or Bust!!

o be sure, the economic downturn has hit Texas hard.

Texas or Bust!

T

But the state’s economy has performed better than

most, bolstering its attractiveness to outsiders.

Since January 2007, net nonfarm employment in the United

States has decreased by almost seven million jobs. Meanwhile,

Texas added 389,500 jobs. That was about ten times the net job

growth of second-place North Dakota.

Only seven other states (North Dakota, Louisiana, Alaska,

Oklahoma, South Dakota, Wyoming and Nebraska) and the

District of Columbia had increases in nonfarm employment

over the 54-month period through July 2011 (Table 1). Together,

they represented a net increase of about 119,000 jobs, less

than one-fourth the total of Texas’ increase.

Data from the U.S. Census Bureau reveals about half a million

people annually have been relocating to Texas from other

states in recent years. Migrants from foreign countries account

for another 180,000 a year.

What areas are immigrants relocating from? What levels of

income and education do they bring? What sectors of the Texas

economy are employing them? This is the first in a series of

articles addressing these and other questions.

Nine reasons to Invest in TEXAS

hile making presentations across Texas, Real Estate

Nine reasons to invest in Texas!

  W

Center researchers frequently are aware of high-networth

investors in the audience. These people may

live in New York City, Miami or San Diego, but they invest in

Texas real estate.

Why do investors find Texas so attractive?

Let us count the reasons: (1) Texas is leading the United

States in the current economic recovery, (2) Texas’ economy is

big and growing, (3) Texas’ economy is profitable, (4) Texas has

a growing population, (5) Texas’ economy is an international

economy, (6) the tax burden is less in Texas, (7) Texas has an affordable

housing sector, (8) Texans have entrepreneurial spirit,

and (9) Texans are mobile.

Texas Leading Nation

in Economic Recovery

   The Great Recession ended in June 2009, according

to the Business Cycle Dating Committee of the

National Bureau of Economic Research. The committee

noted that “a trough in business activity

occurred in the U.S. economy in June 2009. The

trough marks the end of the recession that began

in December 2007 and the beginning of an expansion.”

The Texas economy suffered less in terms of lost jobs and

outputs in the Great Recession than the nation as a whole

(Figure 1). The duration of the recession, measured by the number

of months of job losses, was shorter for Texas while the

intensity, measured by the highest job loss rate in the trough

month, was smaller for Texas than for the nation.

While the U.S. economy experienced its first month of

job losses in May 2008, Texas continued to create jobs for

eight more months, until January 2009 (Figure 1). The state’s

economy posted job losses for 16 months, from January 2009

to April 2010, compared with 28 months for the nation, from

May 2008 to August 2010. The largest year-on-year annual job

loss rate for the United States was 5.1 percent in August 2009;

it was 4 percent for Texas that month.

The state’s private sector suffered 17 months of job losses

with a trough of 5 percent job loss in August 2009 compared

with 28 months of job losses and a trough of 5.9 percent in

June 2009 for the nation.

Texas’ Economy is Big

and Getting Bigger

   With a gross domestic product (GDP) of more

than $1.2 trillion, Texas’ economy was the 14

th

largest in the world in 2010 (Table 2). It was the

second largest economy in the nation in 2010,

larger than New York’s (Table 3). The state’s GDP

accounted for 8.3 percent of U.S. GDP compared

with 13.1 percent for California and 8 percent for New York.

A growing economy offers more job opportunities and

attracts more population, leading to further growth in the

regional economy. By offering more investment opportunities,

a growing economy can further promote growth and development.

Revenues generated by a growing economy enable local

and state government to impose lower taxes.

Texas’ share of U.S. GDP increased from 7.3 percent in 1997

to 8.3 percent in 2010 (Table 4). The state’s share of total personal

income (wages, salaries, interest and dividend incomes)

generated in the U.S. increased from 6.7 percent to 7.9 percent

during that period

Waller Group Investment Coordination

The Waller Group is not only a full service brokerage but offers turn key services for residential property investors. Our services include the following:

Residential Investor Business Platform available to Investors who purchase and execute a management agreement with 5 or more properties from the Waller Group.

Logan Waller provides a consultation with our investors to review a business plan to achieve the investors long term goals. This includes:

1.       Long Term goals and strategic plan. Logan and the investor complete a phone interview to adjust and review the investor’s long term goals, property characteristics, management theory, financial capacity,  and scope of services. Proof of funds or documentation to support financial capacity is required to move forward to the acquisition strategy.

2.       Acquisition Strategy and associate placement. Logan reviews your monthly acquisition expectations with sample properties to indicate the availability, time, and expectations between the investor and the Waller Group sales associate.

3.       Virtual introduction or personal introduction with the Waller Group Associate and investor including the investor’s criteria is completed within a scope of services and a buyer representation agreement is executed between the Waller Group and the Investor.

4.       Business Plan is followed by the Waller Group and investor. Logan Waller reviews with investor on quarterly basis to ensure expectations are met between the Associate, Property management division, and marketing team.

Waller Group Turn Key Services Include

1.       Seamless Acquisition and Property placement that does not require a time commitment or due diligence coordination for the investor.  The acquisition and property placement services are completed AT NO CHARGE to the investor. A nominal $500 transaction fee is  charged for the first purchase at closing.

a.       Property Sourcing eliminates investor tiresome property searches

b.      ROI analysis with repair estimates eliminates investors obtaining repair bids and viewing properties

c.       BPO (Broker Price Opinion) including as is and ARV, After Repaired Value for streamlined decision analysis is submitted to investor with investment summary for each property after purchase contract is executed to streamline investor decision analysis

                                                               i.      BPO includes: pricing trend for neighborhood, demographic information, local economic data, as is value, repaired value, repair estimates, rental analysis, highest and best use analysis.

d.      Investor is required to sign purchase documents to execute contract and wire earnest money to title company

e.      Waller Group coordinates due diligence on the investor’s behalf and Waller Group vendor coordinator sends scope of estimated repairs for contractor to bid and provide timeline.  If any variances arise from the BPO repair estimates then investor is consulted before repairs are authorized.

f.        Investor executes closing documents, notarizes, overnights to title company and wires funds to close transaction.

2.       Seamless Lease up and Vendor Coordination for Make ready. These services range from $500 to $1,500, depending on the scope of repairs coordinated and managed. $1,000 is placed in reserve account for utility coordination and payment

a.       Utilities are initiated by Waller Group, paid by Waller Group and billed back to investor monthly or quarterly.

b.      Property insurance is authorized by the investor placed on the property by Waller Group on the investor’s behalf.

c.       Waller Group repair coordinator authorizes contractors to complete scope of recommended work. Work is completed within pre-designated timelines, QC is completed by the Waller Group. Upon scheduling of repairs marketing team pre-markets property to Waller Group Property Management and tenant base.

d.      Signs, lockbox is placed, property is cross marketed with other managed homes. Home is offered simultaneously for sale or for rent to achieve highest return for investor. Home is cross marketed to Waller Group credit repair database, Waller Group sales team,  AND First Time home buyer database.  If home is sold through these methods before listed in the mls sales commission is reduced.

3.       Waller Group Marketing Services Sales commissions range from 4.5%-7%, Listing Lease Marketing services are 1 month’s rent

a.       Upon completion of repairs if property is not leased or contracted Waller Group marketing team lists property. Property is scheduled for photography when final clean is scheduled. Listing detail is completed by associate, syndicated to multiple websites, listed on mls for sale and for lease.

b.      Waller Group Marketing  Plan is executed by sales associate. (inquire within for sample marketing plans)

c.       Lease application screening includes, background check, credit report, rental history report, rental history verification,  work and income verification.

d.      Lease applicants are screened by management division, purchase offers are qualified and reviewed by investor.

e.      Upon approval of qualified rental applicant or acceptable purchaser offer contract is executed or referred to Waller Group Property Management

4.       Waller Group Property Management fees vary from 5%-10% depending on monthly management revenue and number of properties for landlord managed by Waller Group

a.       Property Management agreement is executed by Waller Group and investor.  Waller Group is pre-authorized for nominal repair authorizations, rent collection, maintenance service coordination.

b.      Taxing authority is contacted and tax statements are mailed to the Waller Group to provide seamless coordination and monitoring of tax assessment and market value. (County Tax Assessment Protest services also provided by Waller Group)

c.       Lease between tenant and landlord is coordinated and executed by all parties

d.      Rental move-in form is completed by tenant

e.      Deposit and first month’s rent is collected by tenant

f.        Utilities are transferred by Waller Group and final billing is requested

g.       Yard maintenance Is discontinued by Waller Group contractors

h.      Locks changes and rekey is coordinated by Waller Group and completed before tenant move-in

i.        Ongoing monthly recurring services

                                                               i.      Rental proceeds are direct drafted to landlord’s account

                                                             ii.      Third party mortgage information is received from landlord and payments are drafted to mortgage company monthly.

                                                            iii.      Maintenance repairs are documents, photographed and e-mailed to landlord with monthly billing statement

                                                           iv.      24 hour repair hotline to ensure property preservation items and emergency repairs are coordinated without hefty upcharges and are timely attended to without a hassle to the landlord.

                                                             v.      Quarterly property inspections are documented with photos and sent to landlord to ensure proper property maintenance and tenant monitoring

                                                           vi.      Annual tax protest services. No up front charge to the landlord. Only charge if taxes are reduced. Fee is ½ the reduction of the annual tax.

j.        Eviction and collection coordination is completed if tenant falls behind on rent. Hourly rates apply for court ordered representation and or coordination.