Blackstone to buy real estate for rentals – buying vs renting in Tampa and more – The Duncan Duo Radio Show

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    The Duncan Duo Real Estate Show. Now, your host: Andrew Duncan.

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    Andrew Duncan:              Happy Sunday, Tampa Bay. We’re here with you live for another week to talk about the local real estate market. We’re here every Sunday at 10:00, right here on 970WFLA. You can also hear us on FM at 105.9. Check out the iHeartRADIO or podcast at 970WFLA.com. And, we’re here answering the questions about real estate: whether it’s buying, selling, investing, foreclosures, short sales, property management, the real estate business in general, news that are out there about real estate. Whatever it is if it has in title ‘real estate’, we’d love the opportunity to talk to you and help to answer the questions: 990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-960-9352. And when we aren’t on air you can check out our website at theduncanduo.com and our socials by searching for The Duncan Duo.

    I have Nate Davis with Plant City Mortgages with us today –  plantcitymortgages.com, to also answer your mortgage questions so if you’re thinking about buying a home, thinking about financing, re-financing – you know, there are multiple re-financing opportunities out there, you can call us with your questions about that as well. Again, our call numbers are 990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-969-9352.

    Nate, we talked about having the kids on the show and we were both completely slammed this week and we haven’t had a chance…so we were talking of our kids about having them on the show and I think it would be a great show but we postponed it a little bit because we want to prepare a little bit more than we did. But I think that will be a real fun show and we’ll get to it in about a month or so.

    Nate Davis:                         It will and I will be nervous, too.

    Andrew Duncan:              Yeah, I will too.

    Nate Davis:                         About what the kids were going to say.

    Andrew Duncan:              Yeah! [laughing] Well, we don’t want to prep them too much because I think it will actually be kind of funny to ask your daughter: “OK, what’s a short sale?” or: “What do you think about the adjustable rate mortgages?” Just to see their answer, I think, would be really funny so.

    Blackstone has been in the news week because they are apparently going to buy a lot of real estate in the Tampa Bay area and rent them out. This is a trend we’ve been seeing pretty regularly that, I think, the market in Tampa needs to understand that this is probably going to be the norm because it is a healthy rental market; it’s a market that’s recovered; it’s a market that’s more balanced. Three and a half months of inventory in our average price-range is a sellers’ market and I think the large hedge funds are seeing what investment opportunities are out there and investigating these different markets. It’s a great sign that they’re investing in Tampa.

    Nate David:                        And the amount. Tell me again what was the amount of homes? I mean, it was staggering.

    Andrew Duncan:              Well, they said it was a billion at first but then the next day another release came out that said: “Eh, we don’t think it’ll quite be a billion.” It’s going to be less than that because they didn’t agree.

    Nate Davis:                         Billon Dollars homes, right?

    Andrew Duncan:              Yeah. So if you say it’s a billion… Let’s say an average sale price of 200, so five of those is a million. I mean, it’s thousands if it were really a billion. But it’s… According to a Blackstone release this is not really going to be a billion. It’s going to be a lot, it’s going to be substantial. We’ve actually sold homes to them. So I don’t really know what’s happening. They’ve looked at all listings of our and they were looking for good, clean, move-in-ready, relatively new – they are not looking for brand new. I think they bought one of ours. It was built like in ’94. So they’re not looking for brand new but they’re looking for renovated, remodeled and they’re buying them merely to rent.

    Nate Davis:                         It’s an amazing business out there right now. It’s the real estate market not because of the same benefits real estate has always had attached to it: tax-deductions and things of that nature, but just right now where can you put your money that’s conservative and also generate a return? And real estate right now is just a no brainer investment.

    Andrew Duncan:              And that’s not even counting appreciation. That’s not the appreciation like saying… It’s just based on a cash on cash return.

    Nate Davis:                         It’s like a stock that pays dividends that has massive upward potential as far as equity goes.

    Andrew Duncan:              Right. And it’s… So, when you see these companies doing that and doing it at a specific market it’s a sign that they’ve investigated a lot of other markets and if they’re picking Tampa, it’s because Tampa is well positioned, stabilized and in a great shape. We haven’t had the opportunity to say that about our real estate market in a long time so the fact that it is the case, it’s definitely great thing. I think what we are going to see is more and more home buyers being challenged position and struggling against large hedge fund investors. They are going to be competing with the big boys: the guys who have large amounts of capital, they can execute it quickly and buyers are going to have to be prepared to compete with that.

    Nate Davis:                         And it’s interesting, too, to see what they’re going to focus on. For example, the more expensive homes probably have more upward equity potential but as far as cash flow…

    Andrew Duncan:              Ithas been distressed so much.

    Nate Davis:                         Yeah. But as for the cash flow…in your lower end it is. That’s where your first home-buyers are starting to get tense.

    Andrew Duncan:              I’ll show you…I’ll tell you, are experienced: they’re buying everything but… their price-points are 125 to probably 250 to 300.

    Nate Davis:                         Yep.

    Andrew Duncan:              I mean pretty much kind of a core of all the heart of our market. They’re not going after the high-end at least from what we’ve seen. They’re going after the kind of bread and butter which is what first home buyers aren’t going to be competing with.

    Nate Davis:                         And this is great for the real estate market. It has such a big investment firm coming in. I’m sure this is not going to be the only one but also if you’re a first-time home buyer and you sit on the fence and think: “Maybe I should do this, maybe I should do that”, it’s one thing to compete against another first-time home buyer but when you…

    Andrew Duncan:              You need to jump off the fence.

    Nate Davis:                         Yes, whenever you are competing against – was it Blackstone?

    Andrew Duncan:              Yes, they have a 180 billion dollars management.

    Nate Davis:                         Yes, so it’s kind like Blackstone is bigger against Grey Pebble.

    [both laughing]

    Nate Davis:                         That’s what you’re up against.

    Andrew Duncan:              Well, so what’s interesting now is what it tells you is that if you’re nervous about the real estate market – look, these people spend millions of dollars on some research and analysis. Nobody can ever get it right or predict everything perfectly, but the fact that they’ve decided to invest as much in Tampa Bay tells all the other home buyers out there that our market is swinging in that direction. If you’ve been thinking about it and have been sitting on the fence, it’s pretty much – now’s the time.

    Nate Davis:                         Yes, I would say so.

    Andrew Duncan:              So, we have got Mickey on line one who’s got some questions about budgeting I think, maybe a line of credit with repairs. Is that what you’re looking to do, Mickey?

    Mickey:                                Yeah, well I actually already did it. I owe my own home, my husband died six years ago so then I had a roof problem I had to have a new roof put on so I checked out a HELOC if I’m pronouncing it correctly.

    Andrew Duncan:              Yeah, HELOC.

    Mickey:                                Yes, then the HELOC. I got four percent interest and twenty five thousand is what I took out  and so now I have thirteen thousand left and I’m not a good saver, I’m not good with finances. My husband always did that so I’m really not good at it and so all I have right now in my saving is like fifteen, sixteen thousand dollars, that’s it.

    Andrew Duncan:              OK.

    Mickey:                                But the income I have every month is good to keep everything going and I don’t owe any credit cards and so just my house payments and I had my daughter, son in law and the grandson move in with me so they helped with the bills. So, what do you suggest? I’m a terrible saver.

    Andrew Duncan:              So what is it…? So what kind of repairs do you have on the property? I guess, what is it you’re looking at doing?

    Nate Davis:                         Or did you already do them?

    Mickey:                                                I already did it. I already did it and…

    Nate Davis:                         And do you have your first mortgage on your home as well?

    Mickey:                                                On my home? Yes. I did that.

    Nate Davis:                         How much do you owe on your first mortgage on the house?

    Mickey:                                Uhm…98 or 92 thousands, somewhere around there. That was 92 thousand before I checked this one out.

    Nate Davis:                         Uhm.

    Andrew Duncan:              And do you…you owe…you’ve used twelve, thirteen of the 25 so far, you say?

    Mickey:                                                Yeah. Aha.

    Andrew Duncan:              It’s about a hundred four owed.

    Nate Davis:                         And what’s your goal here? Are you trying to free up monthly cash flow or get your home paid off sooner or…

    Mickey:                                Actually, my only goal is hopefully to sell my home in a couple of years and move closer to my son because my grandson is there and I’m spending money going up to see him because I like to be near my family and my little grandson needs me.

    Andrew Duncan:              What’s the interest rate on your first mortgage?

    Mickey:                                                Interest rate on the third…

    Andrew Duncan:              On the first mortgage.

    Mickey:                                                Is like 4.75 or five. I think it’s right around five.

    Nate Davis:                         OK.

    Andrew Duncan:              Ok.

    Nate Davis:                         Well, the answer in your scenario lies in your decision, you know. Mathematically speaking you could probably benefit as a result of re-financing however if you plan on selling the home within a couple of years it may not work.

    Andrew Duncan:              It may not payoff.

    Nate Davis:                         It just depends on what your decision is. The longer you retain your home the more benefits you realize from the re-financing because you’re still in the home but if you were to sell it quickly then you might not be be there long enough to get the benefit.

    Andrew Duncan:              Right. So, you could re-finance it, lower your payment because your interest rate on the first is a little higher than, I think, what the market is bearing. The problem is that if you’re only going to be there two more years you weren’t likely to get the entire benefit I don’t think because of the cost of re-financing will probably be more than what you saved over two years.

    Nate Davis:                         Yes, and…

    Mickey:                                One other question: I wasn’t sure if I was allowed re-finance the HELOC and my original loan. If I do re-finance can I put those together?

    Andrew Duncan:              Correct.

    Nate Davis:                         Absolutely. You sure can.

    Mickey:                                                Alright, then. I was not sure about the Heloc if they allowed you to do that.

    Nate Davis:                         Yep. Providing you have equity in home you can definitely do that.

    Andrew Duncan:              So I think the choice you have, Mickey, in terms of re-financing whether or not you want to stay in the home more than two years. If it’s shorter than two years you probably it may not make sense.

    Nate Davis:                         With that being said, too, there’s something that we’re seeing more and more of, is no-cost re-financing where we’re actually able to charge the client a higher rate than they could have otherwise gotten but in exchange for that all your closing costs get paid for you.

    Andrew Duncan:              So in other words instead of it three-and-a-half percent maybe the first is a little bit higher.

    Nate Davis:                         Right, little bit higher. A quarter of a percent or something and…

    Andrew Duncan:              Three-seventy-five or four, so she’d still lower her rate but may not have increased the principle owed.

    Nate Davis:                         Correct. That way if she is going to move in a year and a half or so it still may possibly make sense. That way if she moves she breaks even and if she doesn’t move, she actually comes ahead.

    Andrew Duncan:              So does that help to answer your question, Mickey?

    Mickey:                                I think its worth more than what they were telling me. My house was actually worth 250,000. Now, they’re telling me 121 from a tax-statement.

    Andrew Duncan:             Oh, don’t pay attention to tax statement for the market value of the property. The tax statement’s really based on assessments. If your home was worth that low I don’t think you could get a second line of credit because I’m sure they’d appraise the property when they did that. If it was only worth 121 then I don’t think they would have…the numbers would have been pretty tight loan to value for them to do that so.

    Nate Davis:                         Yeah.

    Andrew Duncan:              I mean it’s hard to say without knowing the exactly the address to give you a more of a proper range but we usually see the tax assessments and not really being in completely indicative of current market value because they’re looking at arrears. Does that help you answering your question, Mickey?

    Mickey:                                Yes, sir. But do you think I could get like a three-point-seventy-five or four percent interest rate?

    Nate Davis:                         You can get a lot lower than that, Mickey.

    Mickey:                                                I could?

    Andrew Duncan:              Yes, on the first.

    Nate Davis:                         Yes.

    Mickey:                                                Can someone tell me how to do that?

    Andrew Duncan:              Go to plantcitymortgages.com

    Nate Davis:                         The Producer can get you.

    Andrew Duncan:              Yeah, Leo will get your phone number and then they’ll give you a call and take you through off air.

    Mickey:                                                I appreciate it. Thank you very much.

    Andrew Duncan:              Thanks, appreciate your call, Mickey. Have a great day. So again you’re listening to The Duncan Duo Real Estate Show, here on 970WFLA. We have another question here that we’ll have a quick chance to take before our brake. Charles in Tampa, what can we help you with?

    Charles:                                                How you’re doing this morning?

    Andrew Duncan:              Great.

    Nate Davis:                         Good.

    Charles:                                I’ve got kind of an unusual question for you and I don’t know if it fits within the category of your program there. I live in a townhouse here in Tampa.

    Andrew Duncan:              OK.

    Charles:                                Back in 2007 they rehabbed the complex – it’s 36 units in here. And doing so, each owner got an assessment for 18,000dollars.

    Andrew Duncan:              OK.

    Charles:                                Alright? Now, I paid that payment for about a year and a half. It’s just the interest rates were very high. I eventually paid mine off. It was almost like check for 16,000. So now due to the economic conditions many people here have not paid their – well, some have not paid their maintenance fee.

    Andrew Duncan:              Correct.

    Charles:                                But also they had a meeting in June that now they’re not going to fund their reserve funds but instead they’re going to take their maintenance fee to pay off the bank loan.

    Andrew Duncan:              OK.

    Charles:                                                Well, the problem I have is: I’ve already paid my portion.

    Andrew Duncan:              Right, so you are getting…well, I’ll tell you: it’s pretty common in condo communities right now where the fee increases because the delinquent condos and townhomes have HOA’s and management associates. It’s pretty common right now.

    Nate Davis:                         That’s the joys of shared expense ownership there with townhomes, condos, etc.

    Charles:                                OK. Here’s my thought. You know what? I’m not going to pay on a loan that I’ve already paid off. Now, here’s my thought. I’m not going to…I’m going to pay the maintenance fee but in the meantime I’m going to take my maintenance fee put it in an escrow account until the loan is paid off in a couple of years and then I’ll release the funds to be used as what they were intended.

    Andrew Duncan:              And, Charles, that specific question probably would be more one that an attorney would be better able to answer and the main reason is because it depends on what’s in the by-laws, and HOA rules and what your association says you have to do. There are documents that you signed when you bought the property that mandate that but it’s hard to really tell you whether or not you could or could not do something without putting you in more risk because the HOA, believe or not, can foreclose on your unit for not paying certain dues.

    Charles:                                Well, that’s not going to happen because they’re not in a position to… I mean, I would love to present that to a jury. Would that be an interesting question?

    Andrew Duncan:              I think it would be a great question. It’s something that’s been brought up a lot.

    Charles:                                                So you gonna foreclose on me but I’ve already satisfied my loan, huh?

    Andrew Duncan:              Well that’s the difference though because what you’re saying though is you’d end up restricting paying the management fee though.

    Nate Davis:                         Yeah, they are not telling you who’s separate invoice for a loan. They’re saying there’s going to be an incorporate of each their dues so instead of paying a portion of your rates HOA dues each month then instead of a whole amount and therefore they can.

    Andrew Duncan:              Right. So, again, I encourage you to have a conversation with an attorney and have a legal consultation because they can look at the documents. But, Charles, I’ve got to put you on hold. We’ll wrap it up with you after a quick…quick break, here on 970WFLA.

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    Andrew Duncan:              We’re back here on 970WFLA talking about the local real estate market. We wrapped up our conversation about Blackstone and I got a couple of calls there but I tell you it really is a positive thing for market. I think home sellers can rejoice now due to the fact that they’ve got a huge and, here’s my experience with them so far: they’re not low balling. They are not coming in and being ridiculous and sending low ball offers. They’re paying market value. Their goal is to just do it quickly so they can start generating cash.

    Nate Davis:                         Because market value is good right now.

    Andrew Duncan:              Right.

    Nate Davis:                         If you buy at market value you’re still doing well.

    Andrew Duncan:              Right, exactly. Because market value, I think if you look at all the statistics our average sell prices are up 10 percent this year. I mean that’s [whispers] appreciation. I’ll say it very quietly. Shhh, [whispers softer] it’s appreciation. It is! And it is responding. It’s coming back up a little bit so I think a lot of people who are out there trying to decide to what to, do they need to understand that if these large hedge funds are coming in – like Blackstone and some of these bulk home buyers – you’re going to be competing with them. Sellers are going to be better positioned if their home can be marketed to them. In other words, the agent you hire needs to make sure you will be able to get in front of these people.

    Nate Davis:                         And you can take a look at most – not everybody – most folks that have bought their home in the last couple of years they could probably right now sell their home and be just fine, whereas we haven’t heard that in a long time. Before it was the earlier you bought the worse you were.

    Andrew Duncan:              I work with people right now that bought it in 2009, 2010, they’re selling and they’re doing a lot better than the people who bought in 2006 and had to sell in 2009. I mean, not every one of them is making a bulk lot of money but or anything but hey, they’re not losing money either.

    Nate Davis:                         Right, they’re able to get out and sell.

    Andrew Duncan:              So, they upgrade. A lot of people are doing the move-up. They’re selling at 200 and buying a 400 because rates are lower and it’s just the time to make that move and… So, again if you’ve got questions about the local real estate market here, in Tampa Bay, whether you’re buying, selling, foreclosures, short sales, give us a call. You can call us on toll-free 1-800-969-9352, in Hillsborough 990-9352, in Pinellas 461-9352 – all of our phone numbers end in ‘9352’ or ‘WFLA’.

    So, Nate, one of the things that came up this week was how much cheaper it is to rent than buy. And that’s my bad.

    Nate Davis:                         Cheaper to buy than rent?

    Andrew Duncan:              Yes. Ah, correct. Good correction on that.

    Nate Davis:                         Sell your home now. [laughing]

    Andrew Duncan:              [laughing]

    How much cheaper it is to buy your home versus renting home. One of the cities they studied was Lakeland and Winter Haven and Renee Butler from the Butler team there is actually going to be on our show in a couple of weeks with a lot of other agents from the Florida real estate market. But, interestingly enough, it’s $495 monthly cost owning with a monthly cost of renting of $1,276. A 61 percent savings for those who choose to buy rather than rent. And, again, you see the same thing in Tampa. You look across the border in Tampa, it’s not quite that drastic per percentage but it’s pretty common. Which is why you see these companies moving in and buying our properties to rent them because the rental market… It’s so many people last two and three years short sale, foreclosures, all this kind of stuff – those are prefect candidates for renting right now.

    Nate Davis:                         Oh, yeah. And the total payments that these folks are getting especially when they get those homes were maybe it was a trade builder of someone who bought a lot of homes and everyone bought the higher end market now they’re buying with short sales back. The insurance, for example: insurance in those new homes, a lot of times it can be like 80 to 95 bucks a month whereas if you were to buy an older home, 150 or 160 a month, so they will get in and out: taxes, insurance, everything up for a lot less than rent.

    Andrew Duncan:              Right. And it’s remarkable because we haven’t seen that much of disparity. I’ve always thought – obviously, being in a business and believing in real estate – I’ve have always thought that it was a better option but it got kind of murky there in ’08, ’09 and even part of ’10 as to whether or not it made sense for some of those people.

    We’re going to continue our conversation about the local real estate market. We’re going to talk about some potential increases in Fannie Mae and Freddy Mac interest rates in Florida, as well as why so many contracts are cancelling despite the market being so much improved, as well as FHA revamping condo rules for condo-financing after a quick break, here on The Duncan Duo Show.

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    The Duncan Duo Real Estate Show. Now, your host: Andrew Duncan.

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    Andrew Duncan:              We’re back here, talking about the local real estate market and taking your questions. You can call us on 990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-969-9352, whether you have questions about buying, selling, investing, foreclosures, short sales, news about real estate, whatever it is we’d love the opportunity to help you. We have Dennis waiting very patiently from Pasco County. He’s got some questions about the renewing the Government Forgiveness law. How can we help you, Dennis?

    Dennis:                                 Yes, I understand that Government Forgiveness law is expiring December. Is there any talk that they’re going to renew it or extend it?

    Andrew Duncan:              There is. And you’re talking about the debt forgiveness on like a short sale, for example.

    Dennis:                                 Yes.

    Andrew Duncan:              Yes. There is talk about it, it’s been passed in one of the legislatures – I don’t remember if it’s the House or the Senate, but it’s been passed in one, not in the other and, obviously, it’s still needs to go to President as well. So there is a chance, there’s been a lot of rumors about it, but nothing concrete as of yet.

    Dennis:                                 OK.

    Andrew Duncan:              So it’s…

    Dennis:                                 Its prospects look good apparently.

    Andrew Duncan:              I would say fifty-fifty. And it’s mostly because I think some of it is going to depend if it pushes a little while it just can get swept up in so much other stuff right now. It’s kind of a challenging time to be discussing something like that with the election on the horizon so, I’m saying fifty-fifty.

    Dennis:                                 OK, thanks much.

    Andrew Duncan:              You’re welcome. So, again, you’re listening to The Duncan Duo Real Estate Show here on 970WFLA. It looks like mortgages might start to cost a little bit more in Florida if the Federal Housing Finance Agency passes something they want to pass. In addition to Florida, this proposed rule would apply to Connecticut, Illinois, New Jersey and New York and it will increase mortgage fees by point-one-five to point-three percent. Only in the most highest real estates. Obviously senators and politicians from those states are strongly opposed to this but there’s certainly a chance that they’re going to be quoting higher rates if FHA gets their way.

    Nate Davis:                         Well, that’s yeah, if they get their way that they’re going to put into effect something that will increase cost of mortgage loans which of course the lenders are going to put that in their rate sheets basically, but this is what’s also occurring though that all of a sudden these mortgage back security purchases that have just been announced have more than offset those increases. So the net effect has actually been lower rates. Now, it’s spending borrowed tax payer money to lower rates and I have never heard someone say I don’t want to buy a house because rates are too high.

    Andrew Duncan:              Right.

    Nate Davis:                         Then that’s on its own topic but, nonetheless, we haven’t seen that. In fact, this past week we saw a nice shift in the rates, as well.

    Andrew Duncan:              It’s hit the bottom again.

    Nate Davis:                         Oh, it’s correct. We’re doing fifteen year rates in the twos right now.

    Andrew Duncan:              Right.

    Nate Davis:                         They’re in twos. That’s kind of…

    Andrew Duncan:              That’s scary.

    Nate Davis:                         It’s out.

    Andrew Duncan:              Actually, it’s a little scary. I mean

    Nate Davis:                         At some point it’s going to be free I guess, I don’t know. [laughing]

    Andrew Duncan:              Right. You don’t get much lower – I don’t know. So, we’ve got Joan waiting on line two here. Joan, you moved in with a partner and you’re wondering whether you should sell or rent out your home?

    Joan:                                     Yes, I bought the home in 1978 for like 38,000.

    Andrew Duncan:              OK.

    Joan:                                     So it’s an older home – that’s the biggest question. But it’s been completely remodeled. It has a new air-conditioner. I mean, it’s been completely remodeled now. So, don’t know if I should…

    Andrew Duncan:              Well, do you … the options are… I mean, do you have a mortgage on the property?

    Joan:                                     No.

    Andrew Duncan:              OK.

    Joan:                                     It was paid off in 1996.

    Andrew Duncan:              And do you have any other need for the… Now, when you sell, do you plan to move in and buy something else or what’s your plan if you were to sell the property?

    Joan:                                     I don’t have a plan for the money.

    Andrew Duncan:              OK. What about the plan for where you’re going to live?

    Joan:                                     Yeah, with my partner.

    Andrew Duncan:              OK. And, as far as your partner, does she own a house that you’d move in with?

    Joan:                                     Yes.

    Andrew Duncan:              OK. So, I think one of the important questions to ask is: do you want to be a landlord? Because it’s an opportunity time for that. You know, the rental market is strong. You can certainly rent it out and do very well and generate some cash. Being a landlord, however, has its own challenges. You can certainly hire property management company and pay them a portion of the rent to alleviate some of the challenges you have of being a landlord – not all of them, but some of them. Or you manage it yourself and you’re more or less just hiring yourself to be, you know, for a part-time job because you’re going to have to deal with things that break or collections if they don’t pay. So, some of it’s really going to depend on your lifestyle, whether you want to deal with that possible inconvenience and it’s a personal choice.

    Joan:                                     Well, I guess I understood that aspect of it but from an investment’s stand point, is it just to hold onto it and…I don’t mind all of the other aspects managing.

    Andrew Duncan:              It’s…it’s…

    Joan:                                     Like I said, we actually did all the remodeling.

    Andrew Duncan:              And what do you think your approximate value of the property is now?

    Joan:                                     I think it was selling for like 120,000.

    Andrew Duncan:              OK. So…

    Joan:                                     And I was concerned, too because it’s an older home and, you know, the insurance is probably the most expensive part of… I think the insurance is now like $1,200 a year and that’s…

    Andrew Duncan:              Right.

    Joan:                                     Because that would go down if it’s rented, would it?

    Andrew Duncan:              It would. Your insurance would go down because you wouldn’t have to cover contents any more. You’d just require your tenant to be responsible for contents. Nate, you had something you wanted to say?

    Nate Davis:                         Yes, yes. Joan…

    Joan:                                     Homeowners insurances I know practically impossible. I’ve had the same company now since 1982 but trying to find someone to insure an older home…

    Andrew Duncan:              It’s got…it has gotten a little bit better I think. We’ve had some influx of newer companies coming to the insurance market but I think, really, what’s going to depend is whether or not the prediction of values going up so if you hold on to it, the purpose is you’d get some cash now and if you waited to sell it you’d likely get some appreciation game if the market continues to chug the way it is. You could also sell it and do something else with the money.

    Nate Davis:                         My vote is to sell it and replace it with a newer rental home. That’s what my advice is.

    Andrew Duncan:              That’s a possible strong suit, too, because you’d lower your operating costs so if you sold it…

    Nate Davis:                         Yep. That insurance would not come into play, the repairs wouldn’t come into play.

    Andrew Duncan:              Yeah, so that’s an option, too, Joan: selling it and then buying something. And if you move out of it, it becomes an investment property and you may be able to do a like-kind exchange. It depends on how long you’ve moved out of it but if you do a like-kind exchange – what’s called 1031 exchange, you can possibly avoid some capital gain taxes and then move into another property, tax-free.

    Joan:                                     OK. I really don’t think there’s going to be a capital gain issue.

    Andrew Duncan:              OK.

    Joan:                                     Because it’s less than…don’t we have like $250,000.

    Andrew Duncan:              You do, yes. But it also depends on if you had …it had to be your primary residence for two out of the last five years. So what I’m saying is it would depend on how long you’ve moved out of the property before you decided to take action.

    Joan:                                     Oh, yeah, OK. I haven’t actually moved out of the property. And like I said, the house is completely remodeled right now so…

    Andrew Duncan:             The downside of renting it when it’s completely remodeled is that it’s going to get beat up a little bit. You know, any time you rent it, the one challenge we see with people that become a landlord for the first time, or the landlord of the property where there was an emotional attachment, is that it becomes a little harder for you to deal with when things get beat up in the property.

    Joan:                                     So true.

    Andrew Duncan:              And it’s very common. I have a rental property. It was my first primary residence in Florida. And every time we had a tenant move out every couple of years then we would go and look at it, I cringed. But we cleaned it up and it does well, but that’s the one challenge you’d have if you took that path. I like Nate’s suggestion. Selling it and then buying a newer property to rent.

    Nate Davis:                         Newer. Lower insurance than the one you already have, lower maintenance on them.

    Andrew Duncan:              And you can probably do a little better on the return.

    Joan:                                     Are there any properties around Pinellas County? You know, you barely see any properties around there.

    Andrew Duncan:              There’s not a ton but, believe it or not, they’re coming back. There are some builders that are building new homes again in Pinellas County. It’s starting to come back. It’s not… They’re not all over the place like they were in 2007 but it is coming back.

    Joan:                                     OK, great. Thanks.

    Andrew Duncan:              Ah, thank you, Joan. I appreciate your call. So, again, you’re listening to The Duncan Duo Real Estate Show, here on 970WFLA and we’re taking the calls if you have questions: 990-9352 in Hillsborough, 461-9352 in Pinellas and toll-free 1-800-969-9352. So with the real estate market improving so much, why are buyers cancelling the contracts more frequently? That’s something that we see. We’ve seen it recently. We’ve seen it a couple of times where I think buyers have… You have a bidding war and maybe a buyer had a remorse that they overpaid so as they get to the end of the process a little bit they check out and they change their mind. And I think there’s a lot of anxiety with the political climate, there’s a lot of anxiety with the economic climate and obviously the lending is causing some of that, too. What do you think about that?

    Nate Davis:                         Yeah, if people… As far as the loan process from that angle… If people are working with a diligent lender who’s done all the homework and has done the due diligence

    Andrew Duncan:              But let’s say a lot of them are not

    Nate Davis:                         There’s a lot …

    Andrew Duncan:              A lot of them are not

    Nate Davis:                         Yeah, there’s a lot of big entities that just… there’s no personal accountability with a lot of them

    Andrew Duncan:              I cannot tell you how often we deal with loans taking months, and months, and months.

    Nate Davis:                         Yeah and they don’t have to do it that way. It shouldn’t be that way.

    Andrew Duncan:              And then finding out that, you know, we had one recently where the process was getting delayed, and delayed, and delayed and all of a sudden we find out it was because the buyer had a 570 credit score.

    Nate Davis:                         [makes exhaling sound]

    Andrew Duncan:              Well, of course they weren’t able to qualify! So they were under contract and they were trying to do credit repair before the deal closed. They should have done that… They should have been doing the mortgage homework plan at Plant City Mortgages way before they even bought the house!

    Nate Davis:                         And I would also say if anyone out there has been pre-approved and they’re out there looking for a home, you should get your documents, your pay stuff, your tax returns, your bank statements and if your lender that you’re using has not asked for those, give it to them anyway. Just say: “Look, I need you to take this because I don’t want you to say whenever we’re ready to close “Oh, we looked at this and now there’s a problem.” There is no reason why they cannot look at it right now.

    Andrew Duncan:              Right. And, again, I think that the challenge is that there is a lot of anxiety. The market’s changed and I think consumers are having a hard time responding to it. They’re not used to the market being this way and I think that’s sometimes they’re not trusting the mortgage professionals and the real estate professionals who are telling them: the newspaper clippings you read in 2009 and 2010 – forget about them. It’s over. You need to stop thinking like that.

    Nate Davis:                         And I think some of that remorse has a lot to do with the fact that now instead of them making the decision like they waited and there’s no one else trying buy the property, they made it on all the wrong terms, when they’re in bidding wars and stuff they get some of that remorse in the end and say: “Wait a minute, I feel like I got rushed into this perhaps.”

    Andrew Duncan:              Right.

    Nate Davis:                         But that’s what’s happening. That’s the reality.

    Andrew Duncan:              But I also think and, again, even real estate professionals. I think a lot of challenges that they were dealing with, real estate professionals you got a shift in the market that they’re not prepared for, buyers or sellers. When a market shifts like this, it causes people to have to change the common patterns that they’d been experiencing. Like an example when they’re negotiating with an agent for purchase contract today and they’re showing you comps from nine months ago. This comp literally used to be few years back it comes from nine months ago, it meant that those had to be devalued. Today, they need to up-appreciated. So they’re using comps from nine months ago, not adjusting it. You have to adjust that up because we’ve seen it’s happening in Tampa Bay. Three and a half months of inventory. It’s supply and demand.

    So, again, you’re listening here to The Duncan Duo Real Estate Show on 970WFLA. We’re listening, too. And we’re going to continue answering your questions after a quick news brake. Actually, it’s not a newsbreak. It’s a commercial break. Newsbreak righ here on 970WFLA.

    [commercial break]

    Andrew Duncan:              We’re back here talking about the local real estate market, wrapping up the last segment of the show. I wanted to… Nate, I think you wanted to just give a quick shout to people that maybe look at refinancing a year ago and…

    Nate Davis:                         Yeah, anybody out there that has a mortgage loan in place now but just a couple of quick things to know: 1. there is a lot of programs out there that allow you to refinance even if you don’t have equity. There’s a HART program, there’s FHA streamlines, VA streamlines. There is a lot of different programs. I’m not saying there’s a program for every last person, but there’s a good chance you probably have an option to refinance and the thing is right now with the latest market has moved, even if you look at the possibility of refinancing even a year ago and maybe it was OK that that made enough sense. You should really revisit that conversation and take a look at that because now there’s just been a big disparity in rates and improvements and, yeah, you could pull out a lot of money out of your pocket or pay off your home loan a lot quicker than you would have otherwise. So it’s a good financial move to at least know your options.

    Andrew Duncan:              Right. And so many different refinance options. There’s HARP, there’s short sales, modifications programs, there’s refinance programs and a lot of it is going to depend so don’t just listen to a radio show and think: “Oh, I cannot refinance” or “I can refinance” because it’s going to depend on who backs your loan.

    Nate Davis:                         And if you’ve been told … if you were told ‘no’, definitely, definitely get another opinion. We’ve told it to so many people who have been turned down by places and they said that…

    Andrew Duncan:              They were turned down by their current lender.

    Nate Davis:                         Or their current lender or they said their loan to value is too high. For example, with HARP program, a lot of lenders out there will only loan you a 125 percent of your market value whereas the program the way it’s designed and it’s how we do it, there’s no limitation on it. If you have a 300 grand loan and the home is worth a hundred, that’s OK. But if you speak with just one place that tells you ‘no’, don’t stop there. Get a second opinion just like in anything else.

    Andrew Duncan:              So, what other article I wanted to get to before we wrap up the Show: Florida home prices bottomed  earlier than previously thought – an article in the West Palm Beach. They did a lot of research, talked to a lot of realtors. Basically, sounds like they’re pointing to 2009, 2010 as kind of being the down point of the markets so if you’re still waiting for the buyers’ market [sound effect], you missed it. It’s gone. The buyer’s market is not here anymore, especially in Tampa Bay. It’s a sellers’ market and we’re seeing just a lot of data pointing to that trend.

    Nate Davis:                         And now… I’ve always said I’d rather buy little bit too late than a little bit too early; buy on the upswing not on the downswing. And now you’re buying on the upswing. I mean, you’re…

    Andrew Duncan:              There’s no question. I mean you’re look at the average sale price in Tampa and it’s up. It’s up in January. So there’s current statistics: in January, the average sale price in Tampa Bay was 145. You know what it was in August?

    Nate Davis:                         What’s that?

    Andrew Duncan:              175.

    Nate Davis:                         Nice.

    Andrew Duncan:              That’s almost a twenty percent difference. Now, again, January was a slow month so it’s harder to prepare from… It’s hard to count it appreciation from January but if you look from August 2011 to August 2012, that’s a better number, that’s a more factual number because of seasonality. January is usually a lower-price month because there’s less activity and less demand. But it was 157 a year ago and 175 today. So it’s a little bit more than 10 percent.

    Nate Davis:                         Uhm.

    Andrew Duncan:              And if you’re out there looking for a great deal, you want to go and check out TampaBaySmokingDeals.com. Our team hand-picks a list of some of the best bargains in the market place: foreclosures, short sales, waterfront homes, condos. You name it, it’s on that site. We go from Tierra Verde, waterfront, beaches, up to North Tampa, down to South Tampa, over to Apollo Beach and we hand-pick some of the best bargains in the marketplace, looking at foreclosures, short sales and a lot of regular type sales as well. And again, the website is TampaBaySmokingDeals.com [sound effect]. So, go check that website if you’re out looking for a bargain.

    And one other website I want to mention: if you’re out there in the marketplace and you’re not really sure what you’re going to do, if you’re not sure if you want to sell your home, you’re kind of curious about the value, go to tampamarketanalysis.com Again, that website is tampamarketanalysis.com. What we do on that website is send you an automated, a really better than Zillow snapshot of the market around your home. So you can see relative, comparable sales and it sends you a report every month so you just kind of stay up to date on the market. Again, check out tampamarketanalysis.com if you’re curious about your home’s value and just want to stay up to date before you decide to sell at a later date. So, next week on the show, let me look at my list here. I cannot remember who we’re having on the show next week. But I know we’re going to have a great show next week. We have a great show every week. I don’t seem to have my list here, so I’m not going to announce who we’re going to have on the show next week.

    Nate Davis:                         It’s a surprise guest.

    Andrew Duncan:              It’s a surprise guest. And we are going to get to the kids show. I think it’ll be a lot of fun.

    Nate Davis:                         Uhm.

    Andrew Duncan:              I cannot image what my daughter is going to say. I’m trying to… Angela and I went back and forth about whether we should coach her when she comes on air.

    Nate Davis:                         I would say say so.

    Andrew Duncan:              You know she might repeat curse words on air about… When I asked her what a short sale is she might [laughing]. No, I’m just kidding. But now, actually, next week we’re going to have Richard Vazquez and Randy Noon on the show. Richard’s going to talk about home owners insurance and Randy is going to talk to us about home inspections and how those things kind of tie together. The week after that, we’re going to have the ERC Homes and Pulte Homes – local home builders, developers and renovators on talking about that segment of the marketplace. So, if you’re curious about what’s going on with those markets, it would be a good time to tune in two weeks from now. And then three weeks from now, we’re going to have a show with you again. And we’re going to have on multiple agents from all over the state of Florida talking about their local markets. So, tune in on October 14th if you have homes or properties in other parts of the state. So, thanks for tuning into The Duncan Duo Real Estate Show and have a great rest of your Sunday.