RealtyTrac Presentation at Los Angeles Real Estate Investors Club October 2013
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Transcript of RealtyTrac Presentation at Los Angeles Real Estate Investors Club October 2013
![Page 1: RealtyTrac Presentation at Los Angeles Real Estate Investors Club October 2013](https://reader036.fdocuments.net/reader036/viewer/2022070316/555c9e55d8b42a6f778b52d9/html5/thumbnails/1.jpg)
LEVERAGE THE LATEST HOUSING TRENDS TOLAND THE BEST REAL ESTATE DEALS
© 2013 Renwood RealtyTrac LLC
WELCOME
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WHAT WE’LL COVER TODAY
• Latest home sales & price trends• Latest foreclosure trends• Trends in property flipping
– Best markets for flipping• Trends in single family rentals/institutional investors
– Best markets for buying rentals• Monsters of the housing markets: zombies & vampires• Leveraging the latest trends
– Knowing the markets where you want to invest– Buying short sale, auction, bank owned
© 2013 Renwood RealtyTrac LLC
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REALTYTRAC DATA PRIMER
100 Million+ U.S. Properties20 Economic & Neighborhood characteristics: schools,
crime rates, rents, unemployment, incomes, hazards etc.
Estimated Values: 2.2 billion current & historical
120 million+ current & historical loan records
82 million+ Sales/Deed Records back to 2000
Listing data for 1 million+ active listings
20 million current & historical foreclosure records
© 2013 Renwood RealtyTrac LLC
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REALTYTRAC DATA PRIMER
County-Level Public Documents• Pre-foreclosure, foreclosure auction and REO• Sales & Loan• Valuation and property characteristics
MLS• Listing status, price and other info• Property description and more characteristics
Publicly available datasets• Neighborhood features, amenities, red flags• Macro housing and economic metrics
© 2013 Renwood RealtyTrac LLC
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LATEST HOME PRICE TRENDS
© 2013 Renwood RealtyTrac LLC
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LATEST HOME PRICE TRENDS
© 2013 Renwood RealtyTrac LLC
Distressed median prices still flat lining
Overall home prices up annually for 17
straight months. UP 23 percent from bottom, still 26
percent below peak.
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LATEST HOME PRICE TRENDS
© 2013 Renwood RealtyTrac LLC
Average Annual Pct Change YTD in 2013 is 7 percent for non-
distressed properties
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LATEST HOME PRICE & SALES VOLUME TRENDS
© 2013 Renwood RealtyTrac LLC
Sales volume increasing but low inventory helping to push prices up
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STATE LEVEL SALES VOLUME TRENDS
© 2013 Renwood RealtyTrac LLC
Lack of for-sale inventory may be slowing sales in California and
Arizona
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SO CAL HOME PRICES
© 2013 Renwood RealtyTrac LLC
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COUNTIES AND ZIPS WITH MOST APPRECIATION
© 2013 Renwood RealtyTrac LLC
ZIP 2012 2013 Pct Change91502 $237,500 $415,000 75%90021 $335,000 $580,000 73%90716 $168,000 $271,000 61%90031 $225,000 $361,000 60%90007 $308,500 $458,220 49%91601 $315,000 $467,000 48%91020 $367,500 $542,500 48%90404 $511,250 $750,000 47%91316 $345,000 $504,000 46%93532 $123,500 $180,000 46%90502 $243,500 $352,500 45%91001 $423,000 $610,000 44%90020 $250,000 $357,500 43%90028 $455,000 $650,000 43%90038 $516,250 $734,500 42%90755 $272,500 $387,000 42%91204 $263,250 $370,000 41%91406 $300,000 $420,000 40%91411 $370,500 $517,500 40%91768 $194,500 $271,500 40%
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LATEST HOME PRICE TRENDS – LOCAL MARKETS
© 2013 Renwood RealtyTrac LLC
Cash buyers increasingly winning out in tight
credit market with low inventory of homes for
sale
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LATEST HOME PRICE TRENDS: NATIONWIDE
© 2013 Renwood RealtyTrac LLC
Seriously underwater means mortgage amount is at least 25 percent
higher than estimated market
value
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UNDERWATER DATA BY COUNTY
• County-level interactive heat map• http://
www.realtytrac.com/Content/news-and-opinion/seriously-underwater-homeowners-county-heat-map-7856
© 2013 Renwood RealtyTrac LLC
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HOME EQUITY PROFILES FOR MAJOR METROS
© 2013 Renwood RealtyTrac LLC
• http://public.tableausoftware.com/shared/HTMMWH5ZG?:display_count=yes
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LOCAL UNDERWATER DATA
© 2013 Renwood RealtyTrac LLC
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LOCAL EQUITY DATA
© 2013 Renwood RealtyTrac LLC
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HOME PRICES BUOYING UNDERWATER INVENTORY
4.5 million homes nationwide would transition from short sales to
equity sales with 10 percent increase in home prices; 8.3 million
with a 20 percent rise
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LATEST FORECLOSURE MARKET TRENDS
© 2013 Renwood RealtyTrac LLC
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HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
August foreclosure starts at lowest level
since December 2005
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LATEST FORECLOSURE MARKET TRENDS – METRO MARKETS
© 2013 Renwood RealtyTrac LLC
L-Shaped recovery with clear signs of a
U developing
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LATEST FORECLOSURE TRENDS – LOCAL MARKETS
© 2013 Renwood RealtyTrac LLC
Classic U-Shaped Recovery
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LATEST FORECLOSURE MARKET TRENDS – METRO MARKETS
© 2013 Renwood RealtyTrac LLC
Steady plodding
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LATEST FORECLOSURE MARKET TRENDS – METRO MARKETS
© 2013 Renwood RealtyTrac LLC
Still flatlining
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© 2013 Renwood RealtyTrac LLC
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LEADING THE RECOVERY
© 2013 Renwood RealtyTrac LLC
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LAGGING THE RECOVERY
© 2013 Renwood RealtyTrac LLC
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LATEST FORECLOSURE MARKET TRENDS
© 2013 Renwood RealtyTrac LLC
California time to foreclose now more than 450
days
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LATEST FORECLOSURE MARKET TRENDS RECAP
• Foreclosure activity is well past its peak nationwide• Some state and local markets are lagging in
recovery because of lingering foreclosures• States that have enacted more aggressive
foreclosure prevention legislation over the past few years are susceptible to a rebound in foreclosure activity
• For investors this means there will still be opportunity to find discounted foreclosures going forward in some markets over the next two years.
© 2013 Renwood RealtyTrac LLC
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WHERE FORECLOSURE ACTIVITY IS REBOUNDING
© 2013 Renwood RealtyTrac LLC
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WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
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SO CAL ZIP CODES WITH INCREASING FORECLOSURE ACTIVITY
© 2013 Renwood RealtyTrac LLC
Zip City State County NOD LIS NTS NFS REO
Total Props w/ Filings
1/Every X HU
% ∆ from Q2 13
% ∆ from Q3 12
91390 Santa Clarita California Los Angeles 21 0 13 0 4 38 177 58.33 -49.33
92377 Rialto California San Bernardino 37 0 15 0 6 58 94 56.76 -55.04
92627 Costa Mesa California Orange 17 0 8 0 7 32 734 52.38 -69.52
91324 Northridge California Los Angeles 14 0 12 0 7 33 283 50.00 -49.23
92082 Valley Center California San Diego 14 0 16 0 3 33 211 50.00 -51.47
92236 Coachella California Riverside 27 0 16 0 10 53 182 47.22 -57.60
90066 Los Angeles California Los Angeles 10 0 12 0 3 25 1,013 47.06 -44.44
92131 San Diego California San Diego 17 0 7 0 3 27 449 42.11 -65.38
90025 Los Angeles California Los Angeles 16 0 7 0 2 25 915 38.89 -16.67
92808 Anaheim California Orange 12 0 9 0 4 25 306 38.89 -53.70
92807 Anaheim California Orange 23 0 16 0 8 47 283 38.24 -48.91
91914 Chula Vista California San Diego 20 0 12 0 2 34 148 36.00 -64.58
91791 West Covina California Los Angeles 23 0 11 0 4 38 279 35.71 -55.29
92122 San Diego California San Diego 15 0 9 0 7 31 682 34.78 -60.26
90008 Los Angeles California Los Angeles 32 0 20 0 8 60 263 33.33 -25.00
90621 Buena Park California Orange 15 0 6 0 7 28 373 33.33 -56.25
92071 Santee California San Diego 29 0 18 0 10 57 338 32.56 -61.22
92879 Corona California Riverside 40 0 26 0 8 74 194 32.14 -63.55
91770 Rosemead California Los Angeles 21 0 9 0 3 33 530 32.00 -35.29
91746 La Puente California Los Angeles 16 0 10 0 3 29 245 31.82 -61.33
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SO CAL ZIPS WITH HIGHEST FORECLOSURE RATES
© 2013 Renwood RealtyTrac LLC
Zip City State County NOD LIS NTS NFS REO
Total Props w / Filings
1/Every X HU
% ∆ from Q2 13
% ∆ from Q3 12
92530 Lake Elsinore California Riverside 46 0 34 0 141 221 72 0.00 -19.64
92548 Homeland California Riverside 11 0 12 0 7 30 86 25.00 3.45
92301 Adelanto California San Bernardino 44 0 35 0 20 99 90 -2.94 -60.56
92377 Rialto California San Bernardino 37 0 15 0 6 58 94 56.76 -55.04
92582 San Jacinto California Riverside 23 0 10 0 9 42 105 -20.75 -68.66
92344 HESPERIA California SAN BERNARDINO 21 0 22 0 13 56 109 7.69 -62.91
92337 Fontana California San Bernardino 40 1 32 0 15 88 109 10.00 -60.89
92392 Victorville California San Bernardino 81 0 45 0 27 153 110 -2.55 -67.10
92532 Lake Elsinore California Riverside 28 0 16 0 4 48 113 -18.64 -69.03
92585 Sun City California Riverside 17 0 19 0 14 50 115 2.04 -58.68
92371 Phelan California San Bernardino 19 1 12 0 18 50 116 -9.09 -51.92
92571 Perris California Riverside 57 0 35 0 19 111 117 5.71 -64.76
92883 Corona California Riverside 45 0 30 0 10 85 117 30.77 -59.72
92284 Yucca Valley California San Bernardino 43 0 24 0 31 98 120 1.03 -51.96
92345 Hesperia California San Bernardino 92 2 65 0 45 204 120 0.00 -54.77
93552 Palmdale California Los Angeles 31 0 36 0 16 83 122 -25.89 -72.79
92394 Victorville California San Bernardino 30 0 24 0 17 71 122 -10.13 -70.42
92551 Moreno Valley California Riverside 32 0 23 0 11 66 122 -7.04 -68.12
93543 Littlerock California Los Angeles 12 1 9 0 10 32 128 -28.89 -57.89
92325 Crestline California San Bernardino 23 0 13 0 15 51 132 0.00 -62.22
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WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
© 2013 Renwood RealtyTrac LLC
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HOW LONG WILL SHORT SALE SURGE LAST?
© 2013 Renwood RealtyTrac LLC
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WHERE FORECLOSURE STARTS & AUCTIONS ARE REBOUNDING
• Why are foreclosure starts and auctions rebounding?– Pent-up foreclosure activity from robo-signing, national
mortgage settlement and state legislation/court rulings– Rising prices may be helping to motivate foreclosure
• What are implications for real estate investors?– Clock is now ticking on delinquent homeowners– Auctions may be good place to buy in next 6 to 12
months
© 2013 Renwood RealtyTrac LLC
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TRENDS IN PROPERTY FLIPPING
© 2013 Renwood RealtyTrac LLC
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FLIPPING TRENDS
U.S. property flips increased 17 percent from a year ago in the
second quarter
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FLIPPING TRENDS
© 2013 Renwood RealtyTrac LLC
Arizona flips down 35 percent YoY. Gross profit $21K per flip
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FLIPPING TRENDS
© 2013 Renwood RealtyTrac LLC
Phoenix flips down 36 percent YoY. Gross profit $26K per flip
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BEST MARKETS FOR FLIPPING
© 2013 Renwood RealtyTrac LLC
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WHAT YOU BUY MATTERS - FLIPS
©RealtyTrac Inc. 2013, Not for Distribution
Metro Number of 2012 Flips Avg Purchase Price Avg Flip Price Gross Profit Gross Return PctLas Vegas 1,525 $124,849 $246,347 $121,498 97%Atlanta 1,396 $91,873 $102,096 $10,223 11%Riverside-San Bernardino, CA 1,004 $185,429 $210,177 $24,748 13%Cape Coral, FL 802 $98,747 $113,979 $15,232 15%Denver 591 $223,323 $230,417 $7,094 3%Sacramento 496 $198,369 $225,917 $27,548 14%Miami 486 $132,476 $177,256 $44,779 34%Orlando 480 $98,122 $205,727 $107,605 110%Sarasota, FL 356 $116,428 $157,443 $41,014 35%Port St. Lucie, FL 273 $89,894 $130,380 $40,486 45%Jacksonville, FL 271 $80,249 $119,345 $39,096 49%Seattle 250 $220,018 $231,263 $11,245 5%
Flipping data for 3-bedroom single family homes built in 1990 or later
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WHAT YOU BUY MATTERS - FLIPS
©RealtyTrac Inc. 2013, Not for Distribution
Metro Number of 2012 Flips Avg Purchase Price Avg Flip Price Gross Profit Gross Return PctLos Angeles 981 $247,660 $328,077 $80,417 32%San Francisco 273 $251,091 $317,343 $66,252 26%Denver 249 $149,778 $197,265 $47,487 32%Riverside-San Bernardino, CA 201 $102,571 $131,716 $29,145 28%Sacramento 146 $120,761 $146,443 $25,682 21%Miami 132 $88,442 $125,562 $37,121 42%San Diego 119 $232,261 $310,801 $78,540 34%Seattle 108 $152,905 $203,199 $50,294 33%Cincinnati 107 $46,327 $48,944 $2,616 6%Detroit 102 $57,455 $56,325 ($1,131) -2%Portland 102 $146,713 $199,693 $52,980 36%Atlanta 91 $68,715 $84,178 $15,464 23%
Flipping data for 2-bedroom single family homes built 1920 to 1950
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TRENDS IN SINGLE FAMILY RENTALS/INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
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RENTAL ROI STILL GOOD IN MANY MARKETS
© 2013 Renwood RealtyTrac LLC
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FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
U.S. institutional investor purchases accounted for
10 percent of all residential sales in August
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FLIPPING & INSTITUTIONAL INVESTORS
© 2013 Renwood RealtyTrac LLC
Institutional investors only
accounted for 4 percent of all
residential sales in LA County in August, down
from 6 percent a year ago.
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HOW SINGLE FAMILY HOMES ARE BEING PURCHASED
© 2013 Renwood RealtyTrac LLC
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TOP 25 HIDDEN GEM SINGLE FAMILY RENTAL MARKETS
© 2013 Renwood RealtyTrac LLC
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TOP SATURATED SINGLE FAMILY RENTAL MARKETS
©RealtyTrac Inc. 2013, Not for Distribution 50
# Metro Area Investor %1 Atlanta-Sandy Springs-Marietta, GA 24%2 Charlotte-Gastonia-Concord, NC-SC 20%3 Macon, GA 18%4 Memphis, TN-MS-AR 18%5 Jacksonville, FL 18%6 Tampa-St. Petersburg-Clearwater, FL 17%7 Winston-Salem, NC 16%8 Las Vegas-Paradise, NV 16%9 Lakeland, FL 16%
10 Orlando-Kissimmee, FL 14%11 Albuquerque, NM 14%12 Palm Bay-Melbourne-Titusville, FL 14%13 Athens-Clarke County, GA 14%14 Greensboro-High Point, NC 13%15 Miami-Fort Lauderdale-Pompano Beach, FL 12%16 Deltona-Daytona Beach-Ormond Beach, FL 12%17 Phoenix-Mesa-Scottsdale, AZ 12%18 Montgomery, AL 12%19 Bakersfield, CA 11%20 Reno-Sparks, NV 11%21 Detroit-Warren-Livonia, MI 11%22 Boise City-Nampa, ID 11%23 Sarasota-Bradenton-Venice, FL 11%24 Vallejo-Fairfield, CA 10%25 Gainesville, GA 10%
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THE MONSTERS OF THE HOUSING MARKET: ZOMBIES & VAMPIRES
© 2013 Renwood RealtyTrac LLC
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THE PROBLEM AND OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
Nationwide vacant foreclosures account for one
in every five properties in foreclosure
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THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
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THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
• The problem– More than 150,000 vacant homes nationwide, 20
percent of all homes in the foreclosure process– Homeowners often don’t realize they still own the
property and are responsible for taxes etc.
• The opportunity– Homeowners who have exhibited a desire to let go of
the property– Lenders who don’t want to foreclose
© 2013 Renwood RealtyTrac LLC
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VAMPIRE REOS
© 2013 Renwood RealtyTrac LLC
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LOCAL VAMPIRE REOS
© 2013 Renwood RealtyTrac LLC
ZIP State County City Pct REO Occupied90044 California Los Angeles Los Angeles 81%90003 California Los Angeles Los Angeles 78%91335 California Los Angeles Reseda 73%90047 California Los Angeles Los Angeles 70%91331 California Los Angeles Pacoima 69%92410 California San Bernardino San Bernardino 64%92346 California San Bernardino Highland 64%92324 California San Bernardino Colton 61%93552 California Los Angeles Palmdale 59%92545 California Riverside Hemet 59%92405 California San Bernardino San Bernardino 57%92335 California San Bernardino Fontana 57%91342 California Los Angeles Sylmar 57%92234 California Riverside Cathedral City 57%90650 California Los Angeles Norwalk 55%92201 California Riverside Indio 55%92376 California San Bernardino Rialto 55%92307 California San Bernardino Apple Valley 54%93550 California Los Angeles Palmdale 54%
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THE PROBLEM & OPPORTUNITY OF ZOMBIE FORECLOSURES
© 2013 Renwood RealtyTrac LLC
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LEVERAGING HOUSING TRENDS: KNOW YOUR MARKET
© 2013 Renwood RealtyTrac LLC
Recent default, auction and REO trends
Local, state and national
foreclosure rates
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LEVERAGING HOUSING TRENDS: FIND MARKETS WITH REBOUNDING FORECLOSURES
© 2013 Renwood RealtyTrac LLC
Foreclosure Inventory and
Prices
Historical Foreclosure Discounts
3. Know your overall market
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LEVERAGING HOUSING TRENDS: FIND-OFF MARKET HOMES
© 2013 Renwood RealtyTrac LLC
Find pre-foreclosures and scheduled auctions in your
neighborhood
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LEVERAGING HOUSING TRENDS: CONTACT HOMEOWNERS
© 2013 Renwood RealtyTrac LLC
Create mailing lists of distressed homeowners in
default or scheduled for foreclosure auction
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LEVERAGING HOUSING TRENDS: TARGET MOTIVATED SELLERS
© 2013 Renwood RealtyTrac LLC
Identify homeowners who have vacated their homes and get
new mailing addresses
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FIND MOTIVATED SELLERS WITH EQUITY
© 2013 Renwood RealtyTrac LLC
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FIND MARKETS/HOMES WITH GOOD POTENTIAL CAP RATES
© 2013 Renwood RealtyTrac LLC
• Buy for $20K (possibly less at auction)
• Rent for $1000 a month• Est. carrying costs at
$500 a month• Cash flow of $500 a
month• Cap rate of 30%!
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FIND MARKETS/HOMES WITH GOOD POTENTIAL CAP RATES
© 2013 Renwood RealtyTrac LLC
• Buy for $105k (REO)• Rent for $1,284 a month• Est. carrying costs at $514
a month• Cash flow of $770 a month• Cap rate of 9%
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FIND HOMES/MARKETS WITH GOOD FLIPPING POTENTIAL
© 2013 Renwood RealtyTrac LLC
• List price $46,500, Est. After-Repair Market Value: $117,088
• Sold back to bank for $23,600, so they are motivated to sell low