WalshStreet Blog

It should be noted that just about all information that conveys how you can make your home more energy efficient, is referring to newer homes built on a slab foundation. A homeowner should be aware that there are additional issues that need to be addressed, if your house is on a raised foundation; has a "crawl space". The whole concept of creating energy efficiency, is to start with balanced air flow within the house. Leaks allowing the elements to come in or controlled air out, can greatly reduce the efficiency. One should consider how much efficiency loss they may have, if they don't properly seal off a crawl space. "Like trying to carry water in a paper bag".   

To all the AMC's, Banks, Homeowners, Realtors and Appraisers, yes Appraisers, "appraising real estate is not simply about collecting data, transferring data to a form and submitting a report with a value"! Unfortunately this message has to be conveyed to some appraisers who were supposed to get adequate training, from an already higher level licensed appraiser, but their work exhibits otherwise. Their lack of knowledge and know how pushes them to accept lower fees, unreasonable turn-times and have no confidence in representing the valuation process. These small few give the Banks, AMC's, BPO performing Realtors and others, reason to pay us data processing wages and have no respect for our profession. 

My real world experience as an appraiser puts me in a daily situation of having to be the person that comes in and makes the final decision -determine a value,  on a property that has been represented by at least two different parties, who's value estimates often vary between several thousand, to a few hundred thousand in value. Ultimately I am the one who has to provide all the data and analysis to support his conclusion, while everyone else involved in the transaction sticks to their value solely on lip service and getting paid! The liability I incur on a daily basis is transformed into pressure on me and the high errors and omissions insurance I pay. The licensing renewal fees and ongoing continuing education fees I pay exceed comparable fees paid by some medical doctors. In addition to uniform standard guidelines, the bank guidelines and requirements for the appraisal vary from bank to bank (1-8 legal pages of instruction). Now I have to learn and implement a new coding system (UAD) to report the appraisal along with additional written explanation. And to top it all off, banks are collecting what are my reasonable and customary fees -evidence of what an appraisal is worth, and offering to pay me half of that fee. ($200 - $250).

I can't think of any other job where someone is determining weather several thousand or a few hundred thousand of dollars is to be lost or gained and the compensation for that is $12 - $20 dollars an hour!

So no, appraising real estate is much, much more than data processing!

Lawrence A. Walsh

Chief Appraiser

All the foreclosure and REO properties available for sale in recent years has brought on a slew of newly acclaimed real estate investors who seek to capitalize on flipping (purchase, fix up, resale) of residential properties. What has transpired is, the banks have kept the supply of REO market inventory low, to keep the demand of REO properties high amongst these investors. In many cases, multiple offer situations are created and final purchase prices typically reduce an already watered down profit margin, usually no greater than 25%.

Given the additional "must do" expenses and risk that exist in today's investor market; remodeling the kitchen and baths, other repairs and  cosmetic upgrades along with trying to find a qualified buyer, this 25% or less profit is minimal compared to some other real estate investment options. 

One of those options is investing in commercial real estate via all cash purchases. This can be done with the same amount of money you would invest in, in a residential property through "syndication"! The opportunities are much greater with commercial deals because they cash flow and because they cash flow (reduced risk), bank requirements are a lot less stringent. In most cases you start receiving a return by the end of the first quarter after closing the deal.

At WalshStreet Investments we find the deal and do all the syndicating. All you do is sit back and collect profit. We can do this because of our real estate investing, appraising and sales experience. In most cases you can even use your 401K money to invest!

Please call or email us at:

323-936-9970

invest@WalshStreet.net

I keep hearing that appraisers and bad appraisals are part of the reason why property values are in such bad shape. 

Yes, like anything else there are those few bad apples that can give the rest of us a bad name. But in general, appraisals were being done competently and professionally. My fifteen years of appraisal review helped confirm this. The majority of the appraisals I review are accurate and professional.

The real problems were that prior to the market bubble bust, if an appraiser were to have said, "yes, there are comparable sales to support the sales price, but I cannot appraise it for that amount because an appreciation rate of 20% over six months with only a new paint job defies all historical and current market and finance analysis. Those comparable sales are inflated because they were purchased with money that should not have been loaned"! The appraisal would have simply been reordered with another appraiser who was willing to not look beyond those comparable sales. The first appraiser would have been "black balled" by all parties involved in that sales deal, never to receive any work from those sources again.

Appraisers do not have enough clout or influence to go against all the other players in the real estate deal who get paid when the deal closes. Even after all the trouble this economy is in, these same forces are still obstructing the necessary overhaul of how real estate transactions take place and ignoring the fact that the "appraiser and appraisal" has to be looked at as the foundation of any real estate deal.

Suggested solution: make it mandatory to get an appraisal first. Include a specific value range in the appraisal (comes from comparable sales considered), then use that value and value range as a bases for everything else, marketing, negotiating, financing etc...

Rule #1; if your discussing what a property is worth and that worth is not based on an appraisal completed by a properly licensed and experienced appraiser, then there is an additional influence involved in the number you're considering. That influence is from someone's commission or profit! It's that simple!

When you purchase other large items like a car, you have direct communication from the the manufacturer; what the base price is and what the fixed costs are for any extra features you want. Its the same for everybody in that regional market. Thanks to the internet you are now able to see the markup on the car and how much profit the dealer stands to make if you purchase at an agreed upon price.

 In real estate you don't get this kind of absolute information, it's typically presented to you by a "commissioned" salesperson or you research some online real estate data websites that use simple, generalized algorithms that don't take into account the specific characteristics of your property or the overall trends of the market, foreclosures, REO's, short sales, etc... 

Unlike buying a car, there are several items concerning property that are commonly "unsubstantiated" as to how much they add value or reduce the value of the property. Some of the more common residential misrepresentations are:

"It's selling for 100k more because of the city view"! "Yeah, but the lot is 5,000 sq.ft. more than most of the others, that's why its listed for 75k more. "We spent 200k in upgrades so its at least worth 100k more in value"! "Its selling for 75k more because its an end unit"!  "We've reduced the list price 150k from the original price, its a steal at this price"!

An appraisal includes research and analysis of every contributor to value of a property and every issue that may reduce value. Instead of an arbitrary comment which at best may be based on some loosely related facts that someone remembers about a sale nine months ago, an appraiser isolates each item in question and performs a complete analysis based on current data and uses multiple data sources.

And finally, but most importantly, don't let someone give you the biggest sucker line in real estate, "I have a willing buyer and the seller is willing, so that's what the property is worth". Or sometimes the misrepresentation is sweetened, "we have multiple offers at this price for this property, therefore it must be worth it"! The most commonly used definition of market value used by most of the governing entities involved in real estate says, "an agreement of price between a "fully informed" buyer and seller" establishes market value. The important words that are commonly left out of many peoples definition of value is "fully informed". If all of your multiple offers are based on buyers being told that the house is worth 100k more because of the city view by a select few who stand to make a commission or additional profit, they are inclined to go along with that price. The buyers think they've been properly informed and all of this is occurring because of someone's assumption, guess or hearsay.

 Do yourself a favor, base your purchase or sale on the appraised value, otherwise you can be spending or loosing thousands based on gossip! 

Just wanted to notify everyone about some of the servcies we offer relating to hard times.

Note Finding

We are in the business of liquidating real estate notes. If you know of anyone who is receiving monthly payments from a loan, secured by real estate
and they want to cash the note out and receive a lump sum, we can help. 

 Short Sale / Loan Modification

If you are a Realtor and don’t want to deal with the hassles of handling the bureaucracy and red tape that comes with the short sale process, you can outsource all of the work involved in getting your short sale approved to our experienced, full time short sale staff and still earn your “full commission”. We typically can get approval in half the time it usually takes. We can also provide our twenty five years of valuation experience in assisting you with determining what the market value is for the lender.

Investments

We are real estate investors that are always looking for realtors to work with, that can bring us good deals. We make all cash offers and provide standard appraisal documentation to support Our offers to the banks. This results in a higher bank acceptance rate and makes your time more
efficient. Additionally we are willing to compensate you with a buyers commission.

It gives us great pleasure to announce that after ten years,WalshStreet Inc. is offering our "CASH for real estate notes", service once again.

So if you are an individual who sold a property and carried a 1st or 2nd note to make the sale happen and would rather have the lump sum of cash versus the minimal cash payments you're receiving every month, then we can help!

You may have decided that the lump sum of cash you can receive today can be used more efficiently to make a down payment on another property or payoff bills. Perhaps the property may be depreciating in value, therefore reducing the market equity that protects the value of the note. Maybe the new homeowner making the payments is showing signs of instability and has missed or been late with a few payments. Or you simply may have never wanted the note in the first place!

No need to fear! We are connected with a network of note buyers and can get that note liquidated in a short period of time.

So please call or email us ASAP and we'll make it happen!

323-936-9970

800-705-5282

notes@WalshStreet.net

The governments new HAFA program is supposed to help all U.S. homeowners that are "underwater" with their current mortgage, restructure their loan so they may keep their house. Http://www.realtor.org/government_affairs/short_sales_hafa

The problem is that the guidelines allow for real estate agents to perform BPO's to determine what the current market value of the house is, resulting in a new restructured mortgage. This is like asking the "fox to guard the hen house". What were these people thinking! My suspicion is that money and politics allowed this obvious inadequacy to get by.

The current guidelines also allow for an appraisal performed by a licensed real estate appraiser to determine the value of a property for this program. An appraiser is an unbiased third party with no affiliation with the negotiation process "whatsoever"! One who is experienced in not only pulling comparables but analyzing a market that is in turmoil!

A fifth grader could have recognized this flaw. I smell a rat in the system before it even gets off the ground. I hope the rest of the "Financial Reform" process isn't as flawed.

If you are a real estate investor why wouldn't you want to use an investment company www.LAEquityHouse.com that is owned by a State Certified Appraiser that has been estimating market values for most of the major banking institutions for twenty five years!

Yes, we knew we were in a Bubble and the market was going to crash! We sold all of our investment property at "quick sale" prices and still made 60% - 80% returns. We have documentation to prove it! Now, people are saying "I don't want to invest in real estate because the market may continue to drop"!

Well because of our experience, we know which areas are healthy and which ones are not! You can still make money in short term real estate investing, if you know where to invest, and we do! We also allow you to pick which areas you're interested in and we'll find discount properties for you in those areas - if it makes, more than "cents".  

We are one of the largest wholesalers of single family homes in the state of California. We get bulk packages of REO's from our banks and realtor connections then sell them for pennies on the dollar. Please visit our website at www.LAEquityHouse.com or call, 323-936-9970.

Lawrence Walsh, Vice President