Mike's Blog

I found this list the other day, I can't disagree with anything butthe order...If this is the list, how would you rewrite the order by level of importance to declining home prices.

    Top 20 reasons home prices will continue to drop in South Florida
    1. Home prices are still overvalued by at least 20% to 30%
    2. The cost of housing has grown faster than local wages
    3. High property taxes are still a concern for first time home buyers
    4. Insurance premiums are increasing to unreasonable levels
    5. First time homebuyers are priced out of the market for now
    6. There is an oversupply of new homes that have not yet been sold
    7. Large inventory of unsold existing homes sitting on the market
    8. Investors have long pulled out of the real estate market
    9. State authorities are pushing for tighter regulation of appraisers
    10. Eventually interest rates will rise, decreasing affordability
    11. Buyer confidence about the real estate market is still weak
    12. The foreclosure rate has been rising steadily without relief
    13. New tax break makes foreclosure easier for sellers to stomach
    14. Many adjustable rate mortgages are scheduled to reset soon
    15. Florida leads the nation in mortgage fraud and loan schemes
    16. Mortgage industry is using tougher standards to approve loans
    17. Many are moving out of the state to find affordable housing
    18. Many sellers have a lot of "paper" equity in their asking prices
    19. Currently, renting is at least 30% cheaper on a monthly basis
    20. Prices will balance out to whatever the local wages can bare

Only one reason why do not own yet - you have no money! Keep on renting.

I see no immediate reason for the decline to do anything but slow down, but this year is already in the tank as far as hitting the bottom

Posted by Jason Sardi, Pennsylvania Mortgage Broker on 09/20/2006 09:16 AM

As a result of many things going well, but not perfect, I have come full circle.

As I stated in a previous post, I have been working with investors on larger land deals, nice big stuff with huge back ends. Suddenly, a fund manager says" Hey Mike, who do ya know that could put together a portfolio of single family homes all in one area, and set up the property management too?

Well, squirt me down and call me Shirley. Didn't I gleefully walk away from this about 5 months ago?? But, after a bit more questioning, I realize I have a buyer who want to buy about 20 houses.. Better than a poke in the eye with a sharp stick! As my birthday luck would have it, I got another call from a contact who wants to do the same thing, about 20 at a time, and keep them coming..No kidding...

So its a very happy birthday for me, this is good news. I then have a article come out in Investors Daily.com and someone reads that, an ivestment firm in New York... and he too wants to purchase portfolio house deals in Central Fl.OMG...is this a joke...But apparently something has told these investors to get started....

I have promised my sanity that I would not go back to foreclosures. The emotional toll was really too much..All day long. everyone you are dealing with is depressed, and soon to be homeless people. It was really too much for my sensitive nature to deal with. ........Mothers with children going to be put into the street...constantly asking what can someone do for them...

It really got to be too much...\

But now, we will deal with only Bank Owned units...they will be cleaned out, and I can imagine that these homes have always been happy little houses, we will just have to deal with Mr Smiley Bank Special Assets Manager in his nice office.

It won't seem so bad when we just imagine that they all went up north to visit Aunt Patsy. Found a better job and won't need this home any more. So we will just think a happy thought, and maybe I won't see evidence of children with dreams lost, leaving homes and neighborhood freinds to move somewhere else quickly in the middle of the night.

Ok, the decision is made...Mike Norvell of Developers Capital Realty will be selling houses, (in bulk this time) again with an exit strategy of doing lease options for our investor partners. They will never see the homes, its just a great deal, this should be safer than stocks.

The main thing is investors are coming off the sidelines. Investors are saying lets pull the trigger. And its not like I had a problem with houses, it was the sadness of dealing with the families that tore me up.

I truely hope that the folks who have moved on from this bunch of homes have found a way to go. Lets hope the new families moving in to start over in these homes learn from the last ones that lost it all.

Lets hope

Hello World

Active Rain has put me in the eyes of the world again!

Due to my participation here, I have been chosen again for an interview with Investors Business Daily.

http://www.investors.com/editorial/IBDArticles.asp?artsec=27&issue=20080717

I'm am not really sure how 15 minutes of conversation gets reduced to a paragraph, but I am pleased to be mentioned in the article.

So, thanks to Active Rain, I am having another 15 minutes of fame. My wife is proud (she is such a sweetheart!) and it has to help to be quoted in these times.

I really do enjoy working with investors and fund managers to find large property deals. These deals are very involved and take a lot of time. Developers Capital Realty is involved in a huge amount of Real Estate transactions, but even fund managers and private investors are stepping back to take a breath during these turbulant times.

We have been recently involved with several new funds, at least new to us, to find criteria specific projects in our Florida area. Funny thing was, one of the funds manages a group of small investors who is looking to find foreclosure houses in the Central Fla area. Do we know anyone with those kinds of contacts???Talk about coming full circle!!!!

Thanks to all for the support.  And please go read my article...

Hey guys,,I thinks its all going to work out...

I am the featured neighbor for my area,YES I AM THE KING, but I won't retain it because I won't buy it..I have learned to write posts with titles and content that get found in search engines..and I also write posts as good therapy for me. In fact, thats where this started.  I was writing on a blog called Planet Realtor that got very little in the way of feedback, but allowed me to reach out to others across Fla that were experincing the same related issues......One day Broker Bryant invited me to Active Rain..I was immediately hooked.

All in all, in my area, I am the number one Realtor by about 60,000 points only because I started so much earlier...I certainly don't consider myself the number one Realtor. I just ended up with more points. Along the way, I found that localism posts were getting me phone calls on deals, I kept putting stuff in on localism, just short little posts at least once a week...I believe it will still be a value to keep posting to localism.

If you go to Google and Type in Mike Norvell , or Developers Capital Realty, you will find me. If you type in Distressed Commercial Property, you will find ME. If you type in Lake County Forclosures, you guessed It!! I owe this to the fact that I found a source that marketed me better than all the money I was spending elsewhere. Thank you Active Rain, and to the early mentors Broker Bryant, Scott Daniels, Jason Sardi, Todd Clark, Andrew Lenza, Don Rogers, Jim Crawford,Katerina, Lenn Harley and Keith Perry. I really learned from these guys, I have actually read EVERY ONE OF their posts...Every one.

Now back to the story, if we take the fact that I have that many more points than anyone else, itwill be hard to blow me off the top ranking as the featured Realtor..someone will have to get really busy. This new way will allow others to come up the ladder with cash.. I have about 20 pages of posts, they are still there, but now others will feel it is possible to get noticed...I get it...and I am OK with it...

So, what ever happens here, I will be OK. If I write a post with good content, and a smart title, it will show up on Google within an hour...I could care less about the rest, because as of yet, customers for my services are not coming to Active Rain to find me..They are finding me off Google Searches and my 30 bucks a month on ad sence...Yes...I havea 30 dollar monthly account that gets me hits a plenty, and I turn most of these over to another agent for refferrals because I don't even want to do houses right now...

As time goes on, I get told more and more in my interaction with other Realtors and related industry proffessionals that they have seen me on Active Rain.. In fact, its fairly common to get "Hey, you're that guy from Active Rain". I have been called for interviews now twice from Investors Business Daily.com, and have found my name refferenced in over a dozen articles from other sources as well. Imagine if I really took this serious and tried to use it as a marketing tool to its highest advantage.

So thats my take on this Localism deal. I will be king of my area for a bit longer, and thats OK. Starting August first, I will glady transfer my weighty crown to a deserving person with a check made out to Active Rain. Thats just life, and I don't belive that it will slow me down a bit.

Wow...the liquidity crisis has created more deals and steals than you can shake a stick at. I opened my email early this morning to yet another PAGE of bank portfolio packages that have dropped their cash price since just last month.

Condos, houses, office buildings, strip centers, motels...If you have a cash client that is looking for unbelievable deals in Fla, then please give me a call.

But the deal of the year may be a 57+ acre industrial park in Central Fl.  Developers Capital Realty is heavily involved in putting this deal under contract, its now with the the attorneys to iron out details of the contract.

The problem is of course that NO BANKS are willing to step up to make this deal happen.  What does a project have to look like on paper to make a bank jump now?? How about all cash down, and we still promise to make payments ???? I think that even a deal offer like that will take a committe to approve in these times.

Developers Capital Realty has been working on this deal for months, and we have pro formas and all kinds of spreadsheets showing this deal will make millions over the next few years. Our present plans show us being able to split off almost 15 acres of unused highway frontage to sell as new development. This will give us the rest of the project for basically free.

Did I mention that the combination of the current tennants and the prospective long term tennants will produce a positive cash flow, net net net, within months...And did I mention that the property is unencumbered with debt, and that the owner is willing to now hold the note for 3-5 years??? But the banks just yawnn...and return to thier desks while waiting for SOMEONE else to make a decision.

I am not negative...this project will make money in a big way. It will produce possibly hundreds of jobs over the next few years. We have 2 large manufacturers who want to come in to take a big piece of this deal, bringing much needed jobs to this area... Its between two citites, with easy access to the interstates, and it even has Railroad spurs coming onto the property...It even has its own water tower and municipal grade pumping station for a user who needs a huge supply of onsite water..

I was talking to a commercial banker last week about this deal. They don't want to get involved in anything over a million dollars at this time..

I have a need for a strong financial partner to come into the front end of this deal. The business plan will blow most financials away...Just a year ago this kind of deal would have been snatched up in a week..Now its among the great deals just laying in the weeds waiting on someone to wake up to the fact that its being offered at abut fifty cents on the dollar, with litterally millions in development income yet to be made in the near future.

Call  Mike Norvell Sr for information on great deals in Fla

Developers Capital Realty works hard to find deals for cash investors.....Call today

Lake County Fl is a growing community. The City of Leesburg is where I live, but I work all over this county and the surrounding counties. After years of being a sleepy little communty,the world found us and suddenly nice little developments sprung up in all directions.

Like the rest of the country, Lake County , Fl went a little crazy with subdivisions over the last few years. As the market cooled, we have a totally revamped community with nicely developed subdivisions full of amenities. We have communities with beautiful entrances, and with homes for sale for much less than what you would expect.

Lake County is a buyers market for nearly new homes in most every direction. Yes, there are many foreclosures in this area, but that does not detract from the fact that this market will recover in a bit and those who take advantage of this situation will be in a great position.The nearly new 2100 sq ft home on the right was available for just over 200k.  This is a lake front home! Bargins galore are everywhere!

Commercial projects are available as well, office buildings and industrial parks are ready to build with all infrastructure in place. The towns and county offices are welcoming new business to come into these office parks that are sitting half empty now.

Anyone with a desire to move thier business to Central Fla should really think about Lake County, Fl. We have a turnpike exit, as well as a short drive to I-75. We have the population to support the need for more jobs, so call Mike Norvell Sr of Developers Capital Realty and lets talk.

On a Saturday morning, I am reading the paper in my small town of Leesburg Fl. Its a bit cloudy outside, and the squirrels are running about preparing for the coming rainfall.

Its a small town compared to our neighbors, Orlando to the East and Ocala to the North. It nice to know that there are these big cities around us, keeping all their traffic and crime away from our area.

But Leesburg has some really great qualities. We have access to the Harris Chain of Lakes, a nice sized mall, and most of our area schools have good ratings. I remember when I came here over 20 years ago. The rat race of traffic and crime from the Daytona Beach area where I had been living seemed far away once I had moved over here.

Now, years later, I still feel the same way. I tune into the local (Orlando) news, and its full of the reasons I won't leave this nice area.I am glad that stuff is an hour away.  We have good roads, jobs, and its a short drive to either coast. There is a reason so many people retire here, and a quieter peacefull lifestyle is what comes to mind.

We have a sense of community here, and its hard to get that in the bigger towns. My company had an office in Downtown Orlando until recently, and we used to meet clients there. Now they meet at our office in Downtown Leesburg, and there is a very favorible response. There is very little traffic and people say hello as you go by. Leesburg, Fl has a very successful Downtown Partnership, and they have done a remarkable job in keeping the commuity together with ongoing events that draws the residents.

Leesburg, Fl is big enough to get lost in but freindly enough to help you find your way. With so many lakes in the area, its easy to lose your sense of direction, because they have to build the whole area around the lakes. We have a lot of water. But, the city has a definate character because of all these lakes, and those of us lucky enought to call it home recognise the qualities. We do have a lot of acreage still in cattle not far from Malls and shopping centers. Clean air, nice lakes, good roads, what a great place to work.

Leesburg, Fl is very close to the Villages. Since I have been here the Villages have grown from a good sized mobile home park to what some say is the largest adult community in the whole United States..Maybe even the world. SInce the Villages came, so has every form of resturant, bank, chopping plaza, home and garden center, and everything else you could imagine.  During all of this, Leesburg grew a little too, but its not the mad house the Villages has become.

So, thats why I still like living in Leesburg, Fl. It has kept its smaller town values, but is close enough to all you will need to not feel isolated. Its 15 minutes to the Villages, and about and hour to Orlando and the same to either coast..Other towns that border Leesburg, Fl include Fruitland Park, Tavares, Eustis, Mt Dora and Grand Island.

If you need a closer look at a great place to do business, think about Leesburg, Fl.. For all those who need a place to be close to the middle of the state, its a great choice.

Call Mike Norvell Sr  of  Developers Capital Realty, LLC  for all your commercial and development needs.

Hello...what is going on in the mortgage world. Fannie Mae and Freddie Mac are publically traded stock companies.

What kind of reasoning is taking these stocks lower and lower??

Speculation is creating a run on the bank so to speak. When Wall Street puts a target on your stock, the market makers will create some action.

Many people don't know you can make money on a stock falling as well as going up. That is what is happening.

I read that less than one percent of their loans are failing, yet we have a near collape of the system because the talking heads on the daily financial news shows have put it in the spotlight. Never mind that the stock holders are loosing thier shorts, thier life savings in some instances.

We have an investor who says he will buy a commercial building in town as soon as GM stock gets back to 17.50. Problem is, today it closed under 10.00.  All I can add, is we can purchase property from Bank Portfolios for about 55 cents on the dollar.

So, if the stock market is making you crazy with all of its volitilties, then lets talk.  Mike Norvell Sr of Developers Capital Realty has a list of many deals in this price range...We now even are dealing, thru a joint venture, in houses and condos as well.But we are acquiring these in bulk.

 I think we should take some of that wasted money I hear about in Congress and place it into Fannie Mae & Freddie Mac. About a a 100 billion to save our system in our own country is a bit smarter than wasting it on some of the Govs pet turkeys. A lot of good money from normal hard working citizens is at stake here...

So my vote is to fund Freddie Mac, and save our banking system. Even Jim Cramer of "Mad Money" feels we canot take another big hit without a collapse.

I know the late night TV is full of internet trading informationals, but this is no time for many of our seniors to be investing in less than a sure thing.

I feel we have a sure thing going on over here..We can offer values of 50 cents on a dollar. We have commercial building that throw off cash every month, and we have industial parks that are also 50 cents on the dollar...Come and get it.....

I'm not Jim Cramer, but I know a good deal when I see it...

Recently I was asked for my opinion about some condos going for less than half of what they were going for a year ago..I do not know the area, but condos on the beach for 177,000 seems very cheap..There are always factors to consider though, and things like HOA dues and taxes still reflecting a 450k price tag are just some of them. 

Here is my answer,  I hope it helps one other person that takes the time to read it.

************************************************

Dear Jason

What would be valuable to me is to know what the other distressed situations are going for down there.

While working with Mike & Jaclyn last week I did the same thing on our area here…..I was blown away to see what has happened to comps due to foreclosures, short sales and bank REOs…A home that was listed for 185, and sold in 2006 was just put on REO FULL LIST PRICE at 59,900…The reason: there are several more in the same neighborhood.

I had not seen the decline in this neighborhood value but I drove by it on a regular basis.. For the last 6 months I have been consentrating on larger commercial projects.. Again.........Knowledge is Power.

That is what a comp evaluation pricing adjustment will do for you….but its only one of the tools to consider.

The other, more important tool in this market is the rental income approach…..If we take this home they were looking at and with minor fix ups, what can we get a steady rent out of it for????…….We all agreed that it would pull at least 800. Per month…A quick rule of thumb for investment rentals is 800.00 payment per 100k…so we would take total price including repairs say =75k X 800=   .75x800.= 600.00 per month PITI  leaving approx 200. Per month in cash flow for reserves and profit.

In the times of declining values, we have to be very careful not to evaluate in terms of historical values. While the unit at 177k looks like a great deal, what is the real value based on either comp approach or income.. If it can be supported by cash flow on a steady basis, then it has a real value X 2.

 First, it is an undervalued asset to acquire. But is it the best price..Imagine being in a situation that has an overabundance of any commodity..a trunk full of cheap new tires and no gas in the tank creates a car that still wont get you where you need to go.

But if the asset has a cash flow in excess of basic costs, then the cheap price becomes very valuable. Not only is it valuable, but it has sustaining power to keep itself alive on its own until the pricing of markets catch up again. That’s what I have learned about looking at a property.

First, is the neighborhood going up, down, or just floating in place. Second, can the income off the property sustain the investment costs. Third, will the value of the neighborhood allow your asset to appreciate in value over time so that you can sell when ever YOU wish to sell.

With the amount of inventory available, I believe we can find properties that meet all the above requirements, or just pass until we find those that do. This is true for a single unit condo or the entire building.  The rules of cash flow don't change  as the project get bigger.

 Mike Norvell Sr.

Developers Capital Realty, LLC

Office (352) 365-6464

Fax       (352) 365-6556

Cell      (352) 408-7111