Arn Cenedella

Archive for the 'Short Sales' Category

2035 Ralmar Ave., East Palo Alto $239,900

A new bank-owned property has just come on the market.

3 bedrooms 1 bath priced at $239,900.

West of 101 right next to Menlo Park Willows neighborhood.

This property was purchased for $640,00 in April 2006.

Property listed with Athena Chilicas Coldwell Banker Woodside.

Call me and let’s take a look!

Investor Alert – SF Bay Area homes break even with 20% down

For many years, I have had numerous clients contact me looking to buy rental real estate on the San Francisco Peninsula that would “break even” with 20 % down. Until now,  I would say “that is not possible – you need 40% down to “break even” on a single family home.

Banks and have other lenders price their foreclosed homes very aggressively.

Multiple offers are not uncommon.

Let’s look at sample purchase for $250,000.

$250,000 less $50,000 down (20%) leaves $200,000 loan.

$200,000 at 6.5% has a monthly payment of $1,264.

Property taxes will be $250 per month.

 Insurance will be $75 per month.

Total monthly ownership cost $1,589.

Your typical 3 bedroom home in these areas will rent for $1800.

In a Section 8 program, the County will pay 80% to 90% of the contract rent leaving only a small amount to collect from the occupant tenant.

Buy San Francisco Peninsula real estate and break even with 20% down.

You used to have to go to Texes to get cash flow – now you can get it right here.

Contact me and let’s get started.

Good information for owners considering a short sale

Even on the San Francisco Peninsula, short sales do occur.

A short sale occurs when the existing loan balance on the property is greater than the value of the home.

The property is placed on the market and an offer is obtained which is accepted by the owner subject to the lender’s approval. The lender’s approval must be obtained before the sale can proceed and close. The lender needs to agree to accept less payment of an amount of money less than the current loan balance.

For example, there is a property with a $600,000 loan on it that is currently worth $500,000. An offer is obtained at $500,000 and then the offer is sent to lender for their approval. The lender does their own appraisal of the property. If you can convince lender property is only worth $500,000 in the current market then they may agree to take $500,000 now as full payoff of the loan instead of taking 6 months to foreclose on the property and then put property on the market and then sell for only $500,000 anyway and maybe less if the property or the market continues to deteriorate.

James Wexler, a real estate in the Scottsdale/Phoenix area has written an excellent post where he goes into detail how to make the short sale process easier and less time-consuming.