May 2009 Multi-Family Report

MULTI-FAMILY PALM SPRINGS, PALM DESERT,CATHEDRAL CITY, DESERT HOT SPRINGS, RANCHO MIRAGE, LA QUINTA, INDIO, COACHELLA VALLEY

A total of twenty multi-family properties went into escrow in May, 2009.

City	Type	# of Properties
Cathedral City	REO	7
Desert Hot Springs	REO	6
	Short Sale	1
Indio	REO	3
Palm Desert	REO	1
	Regular Seller	1
Palm Springs	Regular Seller	1

IN ESCROW	Asking Price	Age	# of Units
81363 Miles, Indio	72,500	1977	2
44709 Palo Verde St,Indio	79,900	1945	2
82412 Valencia, Indio	114,900	1940	3
73770 Santa Rosa, Palm Desert	199,999	1984	2
45310 Sunset, Palm Desert	759,900	1992	3
222 W. Via Sol, Palm Springs	899,000	1958	3
32735 Desert Vista, Cathedral City	130,680	1985	2
32580 Wishing Well, Cathedral City	156,750	1986	2
33225-33227 Wishing Well, Cathedral City	149,900	1985	2
33320 Wishing Well, Cathedral City	159,900	1980	2
33205 Moreno, Cathedral City	178,800	1993	2
32425 Monte Vista, Cathedral City	184,500	1986	2
32550 Shifting Sands, Cathedral City	329,900	1986	4
66660 3rd st, Desert Hot Springs	25,000	1966	2
66442 Estrella, Desert Hot Springs	39,250	1946	3
13655 Sarita, Desert Hot Springs	89,900	1992	2
13960 Quinta Way, Desert Hot Springs	89,900	1980	2
66304 Desert View, Desert Hot Springs	135,000	2005	2
66298 Desert View, Desert Hot Springs	156,000	2005	2
66878 Vista Pl, Desert Hot Springs	204,900	2005	2

Market times were 4 days to 194 days for the REO properties and 105 to 310 for the non-reo sellers.

Activity will increase substantially for the rest of 2009. There will be many more REO’s as investors decide to let their properties go back to their lender.. Investors that have more than ten loans cannot obtain any additional loans.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf

It is anticipated foreclosures will be at an all time high by the end of July because of investor foreclosures as well as the moratorium on foreclosures that ended in March of this year.

Rents are declining in the area because of high unemployment in the service and construction sectors.

Rental income has fallen $100 to $200 per unit. A smart landlord will negotiate with any tenant that is considering vacating. Much better to have a lower rent than a turnover with some vacancy time thrown in.

Enough Negatives?????

Income property now produces “INCOME”. Cap rates * are a minimum 6% and occasionally as high as 12%.

Check out Great Real Estate Buys in 2009

There is a short period of time where millions of dollars can/will be made.

*Cap Rate Annual net income divided by the value of the property. A cap rate of 5% means you are earning 5% of the property’s value each year from rent