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Anyone who knows anything about the Fresno Ca real estate market knows that we have substantial supply of lender owner properties for sale. Here is one listed by Lazarus Realty that just had a substantial price reduction. The ask price was 118,500 and was recently reduced by the lender to $95,900.

If you would like to preview this home or make an offer on it - Call me @ 559-301-1647

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Yesterday I had my left pinky finger operated on. Minimal, if any blogging for until it heals.

Lazarus is now the four-finger blogger.

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Lazarus Realty is proud to announce the addition of Aram
Atikian to its small but growing sales force. Aram has lived in Fresno for over 30 years and besides his endearing character, is fluent in Armenian, and has better than average grasp of Arabic. You can contact Aram at 559-974-0624. He can help you with the purchase or sale of land, home, or investment properties.

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Well, maybe you don’t want to be, but you’re in the position that I mentioned in Part 1 of this Series.

Before you take the plunge, allow me to share a few stories with you: nothing fabricated; all TRUE.  How do I know? They are mine, and mine alone to tell J

Story #1

I get a call from  Susie (not her real name) enquiring about my house for rent .  I must emit  “soft touch” radar, because the next thing I know Susie is appealing to my Christian charity and asking me to save her and her child from homelessness.  I should have ended it right there.  I knew from what she told me that she couldn’t qualify under any traditional guidelines.  It wasnt long before I took pity on poor Susie and told her I would rent to her if her parents would be willing to meet with me and co-sign a contract.

Her parents, who obviously didn’t want Susie living with them, agreed to co-sign for her rent payments.  Whew!  Ok, so I figure if I rent to her I shouldn’t have any problems, at least collecting the rent.  Partially right, here’s what happened.

Susie paid her rent on time and took good care of the property until…. UNTIL her boyfriend was released from prison.  #1 I had no knowledge of the boyfriend. #2 the boyfriend was not on the Rental Agreement. But I can guarantee you  boyfriend was sharing the house with Susie, who was now not paying rent.  I don’t think Susie’s parents approved of boyfriend because I stopped getting the rent.  

When I went to collect I was greeted by a shirtless, tattooed, guy who obviously had nothing better to do in prison than work out.  If I were to guess where the rent money was –  I would say in his veins. He didn’t look happy; didn’t act happy.  Just asking him for the rent money made my butt pucker.

After they moved out I had to patch a hole in the living room ceiling made by ballistics (translation: it looked like he blew a hole in the ceiling with a shotgun).  I was also told later that while they were living there, a mutual friend who didn’t like how  boyfriend was treating girlfriend, during an argument, shot boyfriend in the leg on the porch.  I had good reason to be uncomfortable when collecting (or trying to collect) the rent.

___________

Check back soon! 
I have plenty more stories to tell.  And if you need help selling or managing your Fresno California property don’t hesitate to call me.  My stories might sound negative but I am POSITVE I can help you. 

© Randy “Lazarus” McAtee

   Owner/Broker Lazarus Realty

   559.301.1647

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I could have titled this: HOW NOT TO BUY REAL ESTATE.

I received a call from a gentleman who saw my number on a sign I had on a property I own. He told me he was from L.A. and wanted discuss investment property with me. He came by my office and the first thing I learned was he just closed a deal with another Realtor on a piece of commercial property.

He showed me a flyer his with a picture of the property just purchased, and told me he bought it for $225,000 cash and wanted to buy some more property in the area. The more we talked the more he opened up and it turned out that while he DID buy the property for cash, a substantial portion of the cash used to make the transaction came from an equity line on his primary residence.

I then asked him the question I would ask anyone who buys real estate as an investment: “So Mr. ________ ‘WHY did you purchase this property‘?”

His answer: He believed that one day he could develop it (at which time it would be a good investment) but until then he was going to rent it out. So I asked him how much he intended to rent it out for and he said he was hoping he could get $900-$1,000 per month.

It turned out that his payment on his credit line for the financed portion of the property is right around $1,000 per month. So here is what I laid out before him:

M. ______ if you put $225,000 cash in the bank at 5% interest you would collect approx $937.00 per month without doing anything: no risk, no hassles, no taxes, etc.

Every month that you hold this property you will have the following fixed costs:

• Taxes: $225.00
• Utilities: 60.00
• Insurance: 65.00
• Managment: 100.00 (unless he decides to manage it himself)
• Payment 1000.0
• Total $1450.00 PER MONTH

If you rent this property for $1000 per month it will cost approx $450.00 per month to carry it - not including deferred maintenance and vacancy factors.

SO - MY TWO QUESTIONS:

• 1) HOW IS THIS A GOOD INVESTMENT?
• 2) CAN YOU AFFORD TO PAY $450.00 PER MONTH TO HOLD ON TO IT UNTIL SUCH TIME AS YOU DEVELOP IT?

Believe it or not - he had never been asked these questions and I could tell his wheels were starting to seriously spin. He left my office and returned to L.A.. A couple of months later we met in my office again. He had contacted the City of Fresno and an architect to get an estimate of development cost (something he should have done BEFORE he bought the property) and from the information he gathered the cost to develop the property exceeded the potential income.

So now he asks me, “CAN YOU HELP ME?”

Conclusion: I found him a tenant that did a lease/option and the lease payment is close to break even for him, the option money put some cash in his pocket, the option price (if exercised) will give him a profit —- HE’S HAPPY.

If you’re going to buy real estate as an investment you need to know WHAT YOU’RE BUYING AND WHY YOU’RE BUYING IT. How simple is that? If its an investment then you need have numbers that show a reasonable RETURN ON INVESTMENT (ROI). The first thing you should ask your agent when he says that he has a good investment property is SHOW ME THE NUMBERS.

If you’re interested in purchasing INVESTMENT PROPERTY in Fresno, don’t hesitate to call me.

© 2007 Randy “Lazarus” McAtee - owner/Broker Lazarus Realty and Fresno’s Foremost Blogging Broker.

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NEW YORK (AP) — The decline in U.S. home prices accelerated nationwide in July, posting the steepest drop in 16 years….( go here for full story ).

Browsing some of the local Realtor’s web sites I came across one that had a graphic market guage on it indicating the Fresno real estate market was in perfect balance. YEA RIGHT! This market sucks, and to be quite honest its sucking even worse than I thought it would.

Take a look at the 24 Hour Stats I just pulled up from the MLS

Add the numbers in the grey to get the homes inventory that came onto the market and we have 122 properties that came on the market. Now minus from that the homes that went Contingent and Pending = 26. Then divide 122/26 and you get 4.69 which means for every 1 property that went off the market 4.69 came on the market. The reason the SOLDS are not included in the above equation is that they are the homes that went pending/contingent 30-45 days ago that actually closed. We dont really know how many of the Contingent and Pending sales will actually close. But if we replace the Pendings and Contingents with the Solds then then we have 122/21 = 5.8 …. or a ratio of about 6 to 1. VERY IMBALANCED. For further proof of how imbalanced the market is just look at the ratio of Price Increases to Price Reductions.

Now in order to state this more simply, if the equations above don’t make sense, lets just say a balanced market would look like this:

50 properties come on the market
50 properties go off the market
50 price increases
50 price reductions

that’s a balanced market - where buyers and sellers are equal.

If you need a home, it may not be a bad time to buy; but if you need to sell… it’s tough. If you’re an investor the big question is: WHERE’S THE BOTTOM? Of course, if I could call market tops and bottoms I would be in better financial shape than I am. I love to trade stocks and this chart pretty much sums up how the market treats you:

click image or here to view larger

I was once a dot com multimillionaire. I lost more money in paper profits than the average real estate broker makes in 30 years of work …. So don’t even think to ask me when then market has bottomed. Had I known the top (of the recent runup in property values) , I would have done some things differently. Many of you are probably saying the same thing.

If you have property that needs to be sold, don’t let this negative information deter you from calling me to help you sell it. If you don’t absolutely need to sell the property right now - your best bet might be to wait and ride things out. Unfortunately, I can’t tell you when it will improve - and it could even get worse ( I hope not ). One of my friends was able to find tenant for his home that he couldn’t sell. I recently got a 3 year lease option for an owner of a commercial property that was sitting on the market with no bidders.

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