Eddie asks about Foreclosures in No CA - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on February 28, 2002 at 21:37:32:

Ben–(NJ)----------------

Sad to hear–so young to be in bad health. Especially after taking such good care of himself.

I wonder if all his effort maybe gave him a few more years than if he had let himself go? I guess there is no way to know for sure. I have seen some formulas that one can use to estimate one’s age at death, from natural causes, anyway. It includes some information about ages of death of parents, grandparents, and other relatives, such matters as smoking, weight, healthy habits, and stress, I believe. It might interesting to compare his “predicated” age of decline with the actual.

Good Investing***************Ron Starr************

Eddie asks about Foreclosures in No CA - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on February 26, 2002 at 21:56:27:

I received the following e-mail question. Not seeing any problem with privacy, I post here for edification and possible contribution of others.

----THE E-MAIL-------*

Date: Mon, 25 Feb 2002 09:12:33 -0800 (PST)

From: “Eddie” | Block Address | Add to Address Book

Subject: NorCal FC Investing

To: tigerinpa@yahoo.com

Hello Ron,

Since you are the resident expert on the Northern California Foreclosure scene I was wondering what your
thoughts are on the current foreclosure investing environment in NorCal. I know you wrote before that
you don’t buy FC’s for yourself…only for another
pro FC buyer.

I thought Sacramento County was the last bastion of
foreclosure deals where I could survive and perhaps
prosper. After attending several Trustee Sales in
SacTown it looks like it is mirroring the immediate
Bay Area sales with 10-15 people showing up at every
sale and the prices getting bid up. I can see why
most potential FC investors drop out after a few
months.

I think some of the investor saturation has to do with
the McGee’s 3-day foreclosure.com boot camp sessions
held here in the Sacramento area. Sometimes I believe
they are the only people profiting from the
foreclosure game…

Anyways, since “You the Man!”, thought I’d get your
perspective on this crazy FC market up here in NorCal.

BTW, I remember reading somewhere of a successful Bay
Area/Central Valley FC guy, Paul Thompson, I
believe…Is he still in the FC business?

Thanks for all your wisdom and generosity.

-------RESPONSE-------
Eddie------------

Well, there are professional foreclosure investors who still make good and great deals from time to time. But, when the foreclosure market is as competitive as it is, you will have to work very hard and smart to make more than a modest living from foreclosures.

DATAQUICK recently released some information about notices of default being down about 1/3 in 2001 from what they were in 2000. When we have a good economy, it is easy for people in financial trouble to sell their properties through real estate brokers. When the real estate market is hot or warm, that is a good time for foreclosure investors to move into buying fixer-upper properties in more conventional ways and reselling when they are fixed up.

I have never taken in the McGee’s class, although I have heard a tape set she did on REOs. REOs would probably not be very good these days, either, due to the market being strong. The lenders probably get pretty much market value these days, I would guess. Guess, because I am not trying to buy in No CA these days, so don’t have my fingers on the pulse of real estate locally.

It seems to me that you have two choices. Take your foreclosure investing approach to some other locale where it works better or else switch to some other investment approach that works better where you are. Sorry about that, but nobody guarantees you wealth with real estate.

You might try moving to the midwest or the southeast, you might do better there.

Paul Thompson died last April. He was only about 60-65 years old, I think. Jack Reed had an obituary about him in his newsletter about four or five months ago.

Good Investing*Ron Starr

Foreclosures in the NYC Long Island Area - Posted by Frank Chin

Posted by Frank Chin on February 27, 2002 at 09:05:32:

Hi Ron:

What Eddie reports is the same situation in the New York City vicinity.

There’s been several articles about buying foreclosures, REO in the NYC area, and it reports that due to the HOT seller market, buyers pay market price or more for them. See:

There are many more articles searching in “newsday.com”, and searching under “foreclosure”.

In Queens County where I live, it was reported that the population since the last census increased by over 12%, compared to 9.4% citywide, and 5.5% statewide. As there is NO OPEN LAND that can be built on, the availabilty of housing stock for sale is NIL. The population of Queens County is over 2.5 million, and you can imagine what the need for housing an additional 270,000 in population can be with no open land.

Thus, prices skyrocket, and one has to pay market for foreclosed properties. I also experience the same frenzy in trying to rent out apartments.

This compares to Florida, also experiencing an increase in population. But in following prices of a typical 3BR new home, prices there appeared to have moved from 125K to 140K in the last five years. I have not gone there, but I I have a good friend who’s a RE agent in the Ocala area.

Apparently in FL, the availabilty of open land had kept price increases much more stable.

But within 2 hours drive of NYC there are many areas which experienced close to a 10% drop in population since the last census. These areas are experiencing a buyer market phenomenon where many of the techniques talked about here should work well.

There are at least two pages of sheriff sales, auctions in the local paper for areas with a small fraction of the population of NYC.

It seems everywhere you go, there’s HOT SELLER markets surrounded by COLD BUYER markets. You just got to find them.

Now the interesting question is, “what regional plans are out there to spur economic developments in these areas to take the load off the hot areas with no more room to grow?”

Someone knowing the answer to this may yet make a fortune.

Frank Chin

Re: Paul Thompson memories… - Posted by Julius Levai

Posted by Julius Levai on February 27, 2002 at 24:21:11:

Ron ! Thanks for the info about Paul. One of the really nice person you could ever meet. The last time he said was worth 4 Mill. The same thing happened to Nick Koon. When you`re to bizzy chasing the money, and life just ends like that…Sad story. Then you ask; what is life all about? At least he had two kids… Julius.

Re: Foreclosures in the NYC Long Island Area - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on February 27, 2002 at 21:39:28:

Frank Chin–(NY)------------

Thank you for your comments and the link to the Newsday article, which I read. It seems hard to believe that there are a lot of properties selling for “more than market value.” Maybe they are just selling at a new market value which is higher than an earlier market value which other people know about.

Interesting. In the San Fran bay area of CA, the price of investment properties, especially the 1-4 unit residential ones, got so high a decade ago that investors could not buy for cashflow. So some experienced investors and many new ones shifted into foreclosure investing. It sounds like in the NYC area, it has gotten to the point where the owner-occupant home-wanters have gotten so desperate for something to buy that they are after the foreclosures.

I agree with your observation. If you can project where there will be population growth, you can probably make money in real estate there. There are some areas of CA where prices have gone up maybe 1 % a year. Very different than on the Coast.

Good Investing and Good Posting******Ron Starr************

Re: Paul Thompson memories… - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on February 27, 2002 at 21:22:24:

Julius Levai-------------

Both Paul and Nick were overweight, I wonder if that has any bearing on it. I wonder if it has to do with not keeping in good health through good diet and regular exercise. I am trying to exercise more now. I don’t want to die before age 85, which is my target.

Good InvestingRon Starr******

A sad story… - Posted by Ben (NJ)

Posted by Ben (NJ) on February 28, 2002 at 05:31:32:

I have a cousin who is 52 and an absolute health nut.
He exercises daily, does yoga, eats nothing but tofu, wheat germ, etc and has been doing this for 25 years. Two weeks ago he was diagnosed with heart disease, one week ago he was diagnosed with prostate cancer! Something really unfair about that.