Average margins at California trustee sale auctions evaporate in January.  But, the problem with "averages" is that they include everything from the best deals to the worst.  While just over half of sales at SoCal foreclosure auctions sold for more than 95% of estimated market value, $68.5M in real estate sold at auction in Southern California in January for 15% or more below market value!  By diligently following Sound Equity's auction program, our investors are still finding the best opportunities at auction and are being rewarded with solid margins. 

On to the data...

Continuing the trend from the past 18 months, the number of properties concluding each month continued to decline in January.  The chart below shows the number of SoCal trustee sale properties that got an opening bid (green) and actually sold (red) over the past 18 months. 

Auction sales prices rise in January

Estimated margins shrink in January to their lowest point since late summer, particularly in Southern California.  Northern California saw mixed market conditions in January with dramatic increases in auction sale prices in Contra Costa county and modest improvements in Alameda & Placer counties.

According to the latest Case-Schiller Home Price Indices report released January 29th, nationwide year-over-year prices through November increased 5.5% with California markets like San Francisco, Los Angeles and San Diego among the strongest markets in the country with year over year price increases of 12.7%, 7.7% and 8.0%, respectively. 

Additionally, Case-Schiller economists believe November's results indicate continued strength in the housing recovery.  “The November monthly figures were stronger than October, with 10 cities seeing rising prices versus seven the month before.” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices.

How to profit at California Foreclosure auctions

With over 50% of SoCal auction properties selling for more than 95% of estimated market value, the key to success is finding, researching and acting on the relatively few properties that have real opportunity.  But, don't despair.  Over 65 MILLION DOLLARS in properties were sold last month with at least 15% estimated equity. As shown in the chart below, 22% of sales still have at least 15% estimated equity potential and 14% are still sold at least 20% below estimated market value. There are deals out there, buy it's critical to follow a proven system to find them.

Sound Equity's proven system

Of the 728 properties in SoCal that we tracked which actually sold in January, Sound Equity's FTT/AuctionSteps technology notified our clients before the auction on 537 of them.  That's a 73.8% hit rate for the month.  With technology like our foreclosure target tracker and AuctionSteps, Sound Equity clients are able to focus their attention on the properties that will actually sell and have equity.  Not only are we helping our clients find the "needles in the haystack", but our proprietary technology is saving them countless hours per day that would otherwise be spent driving properties that postpone.

In summary, how to win at auction...

Hundreds of millions of dollars in property are selling at the auctions every month.  Just follow our 3 step system for success at auction and you'll join the few who have the inside secrets to success:

1. Use our FTT/AuctionSteps technology to focus only on the properties with a 74% chance of selling;
2. Stay in your market ready to drive by last minute opportunities the FTT sends you;
3. Bid around 83% of estimated market value to consistently string together profitable deals.
   

Investors:  For a free trial of the Foreclosure Target tracker that will email you the properties that are actually going to auction every day, click here. 

Real estate agents:  To start building the knowledge to have meaningful conversations with real estate investors and win their listings, register for the free AuctionSteps Foreclosure Activity Report where we'll email you a short report each day highlighting foreclosure auction activity in your area. 

For more information about our services or even just to ask questions about how to be more successful at the auctions, speak with any of our field representatives at auction or call us at (888) 490-4450.

As a quick disclaimer, we do NOT track the entire state and put the majority of our attention in the counties where we do the most loans.

Best wishes for your success,
David Huey, CEO
Sound Equity Inc.

True, retail real estate slows over the holidays with fewer listings on the market as homeowners instead focus on family, but the holidays are without question the best time for investors to buy property.

Pricing:
There is no better time of year than the transition from the holidays to the spring market for investments to act upon the ageless wisdom "buy low, sell high."  Average prices across the U.S. peak in May and bottom out in December with average prices in December 4-5% lower than in May. 

Inventory:
Sellers who keep their homes on the market this time of year are very motivated.  And, you have less competition from other buyers than you will in the Spring.  According to Trulia Chief Economist Jed Kolko, buyer search activity in January increases 30% over December and peaks in March.

Rehab Time:
Finally, unlike the busy summer months, larger rehab projects can provide extraordinary profits.  Summer projects tend to require quick rehab to return the property to marketable condition as fast as possible.  But, the opposite is true over the holidays.  Larger rehab projects that could yield higher profits make sense to allow you to time completion to take advantage of the Spring market.  Plus, contractors are typically less busy and often more aggressive on pricing over the holidays.  

In Closing:
While thousands of other investors take the holidays off, start your 2013 with huge profits through great December purchases. It truly "Tis the season" for real estate investors. 

For more information about our services or even just to ask questions about how to be more successful at the auctions, speak with any of our field representatives at auction or call us at (888) 490-4450.

Best wishes for your success,
David Huey, CEO
Sound Equity Inc.

Investors:  For a free trial of the Foreclosure Target tracker that will email you the properties that are actually going to auction every day, click here.

Real estate agents:  To start building the knowledge to have meaningful conversations with real estate investors and win their listings, register for the free AuctionSteps Foreclosure Activity Report where we'll email you a short report each day highlighting foreclosure auction activity in your area as well as notify you of upcoming training seminars on how to win investor right-priced listings.

Margins at California foreclosure auctions have improved since peaking in May. 

The number of properties being acquired and the number actually going to auction have been relatively stable since April. And, with retail market values continuing to climb, actual margins will likely be even better 2-4 months from now when properties acquired last month enter the retail market. 

On to the data...

The chart below shows the number of SoCal trustee sale properties that got an opening bid (green) and actually sold (red) over the previous year.

Auction sales prices down while retail market values rising

The average sale price at auctions in July is down 5.0% from the May peak.  The most recent Case-Shiller Home Price Index report, published July 31st, reports that prices in Los Angeles rose 2.2% from April to May and 0.9% in San Diego.  While conditions remain tough for fix & flip investors, the large buy & hold players are showing slightly more conservative buying habits.  And, while the chart below suggests that margins are only slightly better than May, the computer generated pricing models used to generate this chart are lagging actual retail market conditions so margins are better than the chart suggests. 

Sound Equity's property tracking technology still predicts 7 in 10 that sell

Of the 1135 properties in SoCal that we tracked which actually sold in July, the FTT successfully identified 813 of them.  That's a 71.6% hit rate for the month.  Additionally, the large majority of the 28% that sold that were not on our "hot list" reports were purposefully ignored because there wasn't enough equity for our clients.  Bidding on a property that sells is emotionally better than not bidding at all, but investors don't make money unless you buy houses.  By focusing our attention on the properties that will actually sell and have equity, we're helping our clients find the "needles in the haystack" and saving them countless hours per day that would otherwise be spent driving properties that postpone.

In summary, how to win at auction...

Hundreds of millions of dollars in property are still selling at the auctions every month.  Just follow our 3 step system for success at auction and you'll join the few who have the inside secrets to success:

1. Use our FTT technology to focus only on the properties with an 8 in 10 chance of selling;
2. Stay in your market ready to drive by last minute opportunities the FTT sends you;
3. Bid around 83% of market value to consistently string together profitable deals.
   

Investors:  For a free trial of the Foreclosure Target tracker that will email you the properties that are actually going to auction every day, click here. 

Real estate agents:  To start building the knowledge to have meaningful conversations with real estate investors and win their listings, register for the free AuctionSteps Foreclosure Activity Report where we'll email you a short report each day highlighting foreclosure auction activity in your area. 

For more information about our services or even just to ask questions about how to be more successful at the auctions, speak with any of our field representatives at auction or call us at (888) 490-4450.

As a quick disclaimer, we do NOT track the entire state and put the majority of our attention in the counties where we do the most loans.

Best wishes for your success,
David Huey, CEO
Sound Equity Inc.

Despite many economists predicting that home prices have bottomed out and the recovery process is underway for the housing industry, Michael Feder, President/CEO of RadarLogic, has a different opinion.

“Shadow inventory is overwhelming and will continue to be a weight on the market,” Feder said. “Looking at the market going forward, supply will overcome demand for years to come. The activity we continue to see is coming more and more from distressed properties which will lead the industry until the inventory situation is addressed.”  The key drivers that lead the housing industry are supply and demand. In May, the supply of inventory for existing home sales (2.54 million) and new home construction (146,000 units) was six months, Feder said. However, he added that if seriously delinquent homes, which was 3.7 million through May and the shadow inventory of about 4 million properties, were accounted into this total, there would be 27 months of inventory.

Read the full story here.

Simplicity, ease of use and confidence in the data are key components of success in the highly competitive, fast-paced foreclosure auction world.  To help our clients get to the most relevant, useful data as fast and easy as possible, Sound Equity released a major enhancement to our web site yesterday making it easier than ever before for investors to find and jump on the best properties actually going to auction each day. 

The screen shot below shows the new Foreclosure Target Tracker (FTT) property search results page.  The new tabbed interface on the property results page breaks the data into 4 tabs displaying the most relevant data to each user with a single click: 

1. My Hot List - With a single click, users can see today's Hot List properties ***in their zip codes*** and another click shows them the ones scheduled for tomorrow. 
   
2. Opening Bids - The Opening Bids tab shows every property in the user's zip codes scheduled for the current day with an opening bid. 
   
3. My Bids (or 'Client Bids' if logged in as an agent or staff) - Shows properties that users have expressed an interest in bidding on. 
   
4. All Properties/Search - Although most users only need to focus on the "My Hot List" tab since it shows users 86% of the properties that actually sell at auction each day, the All Properties/Search tab provides a full search capability that advanced users will appreciate.

Note: the properties below were actual FTT hot list properties that were automatically emailed to our clients before the auction.  Other than the single last minute cancellation, every one of them sold.  If you want to win at auction, you have to instantly filter out the thousands of postponements and focus your valuable time on the properties worth buying!  The FTT has an 86.1% accuracy rate of doing just that. 

For more information about how Sound Equity can help you find and win great investment properties at California foreclosure auctions, and finance 75% of the purchase, talk to any of our field reps at auction or Contact Us Online.  Or click Free Trial for a no obligation, completely free 30 day trial of the FTT. 

Best wishes for your investing success,
David Huey, CEO
Sound Equity Inc
(888) 490-4450

Overview

With 4000-6000 properties scheduled per day in California and only 50-150 actually selling (1-3%), getting a shot at a California foreclosure is truly like finding a needle in a haystack.  Fortunately, the FTT solves this enormous challenge by predicting with 86.1% accuracy which properties will actually sell at auction each day.  Combine this groundbreaking technology with our on-site, at-auction bidders and capital, and Sound Equity is making it easier than ever to compete and win in this tough environment.

Plus, with our new mobile and online bid management system, investors can bid on auction properties right from their computers, smart phones or tablets and our underwriters and on-site bidders can instantly go to work helping our clients win the best auction properties in California!

Bidding Components   New “Bid” link in FTT emails make it easy to bid from anywhere Full, unlimited access from computers, tablets and Smartphones Online, easy to use Bid Management for Sound Equity clients and our underwriters, bidders, sales staff and brokers.

FTT Emails

With only 1-3% of scheduled properties going to auction, the best way to win is to jump on FTT “Hot Property” emails.  The FTT scours every trustee sale every 5 minutes looking for clues suggesting which properties will actually go to auction and be worth buying.  Properties it picks are instantly emailed to our clients and the thousands of properties that cancel, postpone or aren’t worth pursuing are automatically filtered out.  No most wasting time on the 97% that don’t go to sale.  Instead, FTT users can focus on the 86.1% of daily sales that the FTT identifies.   There is truly no faster or more convenient way to find out why properties are worth jumping on. 

Last Minute Opening Bids

For every hour of notice the bank gives when they set the opening bid, properties are bid up 1% higher.  For example, properties with an opening bid set 3 hours before auction time sell for an average of 3% higher.  On a $300k property, that’s $9000 in lost profit potential. 

Why?  Simply, the earlier the opening bid is set, the more people know about it.  Last minute opening bid drops present quite possibly the ONLY properties worth buying at auction today and there is absolutely no better way to jump on last minute opening bids that with Sound Equity’s FTT system and on-site bidders. 

To make it even easier for our clients to jump on last minute opening bid drops, FTT Emails now include a “Bid” link in the left column for each property (see screen shots below).  Clicking this link takes the user to the property details page on the FTT web site where the user can submit a bid, request a loan, save their diligence or just express preliminary interest in a property… all from any computer, tablet or Smartphone.  Our underwriters and bidders are instantly notified and will be ready come auction time!

FTT Website—Property Diligence

Sound Equity Due Diligence

Each property on the FTT website includes the option for Sound Equity underwriters to save information from our diligence on each property.  As part of SEI’s diligence, we’ll specify a Suggested Bid (based on our experience on what properties are selling for) and a Max Loan Amount. 

Client Diligence, Placing a Bid and Requesting a Loan

We also enable clients to save their diligence, submit their preferred and max bids and requested loan amounts.  Our underwriters will thoroughly review every property bid on that we think is going to auction.  And when you place a bid, we’ll not only do the bidding and buy the property for the lower possible price, but you’ll know that we’ve done our homework.  After all, we don’t up on 75% of the capital on a property unless we know it’s a great investment!

• Preferred Bid:  How much you hope to get the property for.  Our bidders will always bid in small increments to win properties at the lowest possible price.
• Max Bid:  This is the absolute highest possible price you would be willing to pay.  Again, we hope to win for a lower price, but this is the highest amount you could pay to beat out other bidders.
• Requested Loan Amount:  This is how much you’d like to borrow from Sound Equity. 

FTT Website—Bid Management

Sound Equity clients, staff & brokers now have a new menu item on the FTT Website… labeled “My Bids” for clients and simply “Bids” for our bidders, underwriters, etc.

Clicking “My Bids” provides access to all pertinent information for bids placed on properties.  There’s also a “Bid Search” window that allows advanced users to search by over a dozen fields to view & manage bids they’ve placed on properties. 

Users can then bid on additional properties or view detailed information on each property or update their diligence or bid information.

Summary

With thousands of “junk” that isn’t going to auction to weed through, tough competition and limited professional services, Winning at trustee sale auctions has never been tougher.  With the help of Sound Equity’s FTT technology, our on-site bidders, millions of dollars of capital available for lending at auction and insanely experienced underwriters, Sound Equity provides the key ingredients to successfully investing at the auctions.

For more information, visit us at www.SoundEquity.com, call our main line at (888) 490-4450 or call your Sound Equity sales rep.

There was an abundance of good news on the foreclosure front in 2011 that might portend a rosy outlook for 2012 — at least at first blush.  According to RealtyTrac, a new wave of foreclosures could be coming in 2012, if the recent spike in "default filings" is any indication.

Continued at... http://www.realtytrac.com/content/news-and-opinion/exclusive-report-emerging-foreclosure-trends-for-2012-6963

Sincerely,

David Huey
Sound Equity

My friend Brian Cotham with Billco Investments forwarded a blog post that all of us who are working diligently to clean up the mess left behind by the various administrations, banks and Wall Street can appreciate. 

Enjoy... http://www.foreclosuretruth.com/blog/sean/vultures-real-estate-investors/

Sincerely,

David Huey
Sound Equity

Improved employment figures and record home affordability levels could spawn a minor housing recovery this year, analyst Mark Fleming said Wednesday in the CoreLogic (CLGX: 13.76 +1.03%) MarketPulse report.  Continue reading...

Turning foreclosures into rentals

NEW YORK (CNNMoney) -- Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.

The program, which was cited by Federal Reserve Chairman Ben Bernanke last week as one way to address the housing crisis, would sell foreclosed homes now owned by Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) to investors in bulk. The properties would then be converted into rentals.  Click http://money.cnn.com/2012/01/09/news/economy/foreclosures_rental/index.htm to continue reading.