Valley Sprawl – Gentry Real Estate Group

Bill 2153 was signed last week by Governor Jan Brewer.  This new law prevents city governments from making code revisions that include the requirement for fire sprinklers in single-family new home construction.  Read the AZ Republic article here.

A 75 year old Peoria man and his son are accused of scamming tenants on 5 rental homes. They supposedly filed quit claim deeds on properties so it appeared as if they were the owners of record. They then found tenants by advertising the homes at below market prices. The only problem for the tenants – the homes were actually in various stages of foreclosure. They were paying rent into a black hole.

Father and son are now behind bars and facing several felony charges according to the Maricopa County Attorney’s Office.

Work with a licensed agent like myself if you are in the market for a rental home. I can search public records for you to make sure we are dealing with the true owner and can also verify that the home is not currently in foreclosure.

Read the AZ Republic story here.

According to the Humane Society there are over 77.5 million dogs and 93.6 million cats owned by Americans.  62% of households owned at least 1 pet in 2008 according to APPA.

How should we handle these statistics in the property management business?

From my experience owners are either extremely against pets in their rental or are pet lovers and owners and have no problem with tenants with pets.

I have seen the extreme damage that untrained/unsupervised pets can cause in a very short period of time.  I have also seen rental homes left in mint condition even though the tenant had multiple pets.

From my experience, the qualifications of the renter are a much better predictor of how the home will be left at move-out.  It is imperative to talk to past landlords to check the condition upon move-out of your applicants previous residences.

I think it is foolish to rule out 62% of your rental pool by outright banning pets in a rental but some owners are adamant about not allowing pets in their investment property.

What are your thoughts?

We represent investors that purchase foreclosure homes at the daily Maricopa County trustee sales.

Many times these homes are occupied by tenants or the previous homeowners.  We typically have no problem signing a lease with the current tenants but we have been running into a problem with previous homeowners trying to drag the process out and stay in the home.

We offer a lease agreement to the previous homeowners if our investor is pursuing a buy and hold strategy rather than a flip.

These former homeowners have usually dragged the foreclosure process on for months past the 6 month minimum to handle a trustees sale.  They then ask the new owner for “cash for keys” to leave the property.  They are usually expecting $2000-$5000.

Our investors then face the decision of investing money to file a forcible detainer (eviction) to force the former homeowners out of the home or to cede to the extortion and pay up.

Most choose the legal route and pursue the eviction.

I would like to hear how others deal with this decision.

I have been in the property management field for many years and have never seen rental demand at these levels.  We currently manage 850 homes and have 32 vacancies.  This is a 3.8% vacancy rate.

We have been receiving multiple applications on many of our available properties allowing our owners/investors to be more picky with the tenant they choose.

Our biggest issue right now is having available rental homes.  I speak to roughly 20-30 rental prospects per day.  Many ask about homes in Gilbert, Tempe, Chandler, and Mesa.  Right now I have 1 home in Gilbert that has been vacant for 5 days and a town home in Mesa that has been vacant for 14 days as my available inventory.

It seems as if the banks have gotten serious about moving through the foreclosure process since the beginning of the new year.  Almost all of the prospective tenants I speak to have gone through a short sale or foreclosure and are now forced back into the rental market.

As we see the home ownership rate continue to drop will the vacancy rates continue to drop or will new investors step in converting the REO inventory into available rentals?

Have you waived late fees, extended due dates, only to find that your tenant is now ignoring all of your calls and no longer making payments?

I talk to owners in this situation all the time.  Usually they are reluctant to hold the tenant accountable for their actions because of the personal nature of the tenant/landlord relationship or they just want to avoid confrontation.

Hire me to enforce the terms of the lease.  I will work hard to represent your interests and make sure the tenant follows the terms of the lease agreement or I will help you to remove your problem tenant and replace them with a more reliable tenant.

My eviction process can be completed in 30 days or less for the cost of the attorney – $395.

Once the eviction is complete we can work as a team to minimize the chances of another problem tenant and you can rest easy knowing that your property is being diligently managed and supervised.

The Cromford Report released a market summary for the rental market covered by ARMLS. In summary, available single family homes increased by 10% over last month. Total inventory is still much lower than what was listed last year.

Rental rates are now averaging 69.4c per square foot on signed leases and asking prices are averaging 92.6c per square foot.

Brewer-Caldwell has seen increased demand and a much lower inventory of available homes. We do not use the local MLS system, ARMLS, to advertise our properties. Most of our prospects are still former homeowners who either went through foreclosure or are attempting a short-sale. Our average rents seem to keep pace with the average compiled by the Cromford Report and ARMLS statistics.

View my available inventory of rental homes.

The La Times has an interesting article today about the number of high credit borrowers intentionally screwing the banks:

Research using a massive sample of 24 million individual credit files has found that homeowners with high scores when they apply for a loan are 50% more likely to “strategically default” — abruptly and intentionally pull the plug and abandon the mortgage — compared with lower-scoring borrowers.

588,000 people with the ability to pay took the easy way out and gave their homes back to banks simply because they were underwater:

The number of strategic defaults is far beyond most industry estimates — 588,000 nationwide during 2008, more than double the total in 2007. They represented 18% of all serious delinquencies that extended for more than 60 days in last year’s fourth quarter.

Banks are adjusting to this new phenomenon:

The Experian-Wyman study does not try to explore the ethical or legal aspects of mortgage walkaways. But it does suggest that lenders and loan servicers take steps to screen and identify strategic defaulters in advance and possibly avoid offering them loan modifications, since they’ll probably just re-default on them anyway.