Avatar's Blog

It's all over but the shouting in Seattle, WA. Avatar Financial Group takes their hats off to the Steelers and wishes them well. But even with the first sunny skies we have seen in more than a fortnight, sad sack faces are to be seen all over town. Tough game.

Sometimes, life just doesn't seem fair. You get hit with more things than you can handle and things don't go your way. Fortunately, there are alternatives to the conventional lenders in real estate. If you run into a "bump in the road", Avatar may be able to collateralize your real estate property to generate the working capital you need to get back in the game.

There's a buzz in the air in Seattle these days. Our football team is going to play 'with the Big Boys' at the Super Bowl. We aren't very cocky about this opportunity. Mind you, Seahawk fans know it's been 30 years too long in the coming. But we are finally on our way to the big game.

Parties are planned and brokers and borrowers around the nation have called to wish us well. Thanks to all of you who cheer us on. But really, folks - Avatar will lend even on properties in the Pittsburgh area - we are a nationwide lender and we look forward to serving all of you in '06!

A recent bonehead award went to George Melendez in Lowell, MA. Melendez came up with cool method to rob a bank. He filled a bag with books and wires, went up to a teller, and claimed he was carrying a bomb.

Then he collected the money, dropped the sack and ran out with the loot. Police, of course, had to be cautious, call the bomb squad, etc. and all this gave him plenty of time to get away. Brilliant move. So why the bonehead award? At the last bank robbery, Melendez was apparently running out of books from his bookshelves at home. This time he tossed in his own phone book, complete with his name and address on the label. Should have made a trip to the library! ...courtesty of my friend at Boeing.

While robbing banks may be the fastest way to get cash from a bank these days, private lenders like Avatar do pretty well all on their own - and can keep you on the right side of the law! Avatar funds in two weeks (or less in some cases!) for almost any kind of income producing property in the US. Call us at 888-886-0097 or email gillian@avatarfinancial.com and give us a try. We work nationwide, protect brokers, and pay on the day of closing.

 

 

 

For the first time in eighteen years, the Fed will have a new leader. Al Greenspan will step down as Chairman and Benjamin Bernanke will take the helm. Perhaps no other person in government is as important to the US investor as the Chairman of the Fed. He sets the rates by which real estate mortgages are set nationwide. Avatar Financial Group sets loan rates against the Prime Rate. Most Avatar loans fund at Prime + 6%; as they float with the prime rate, we (and, no doubt, our borrowers) keep a pretty firm eye on the Fed Chairman’s whims concerning the prime rate.

Ben Benanke becomes Chairman on Tuesday, January 31, 2006. Stay tuned as we learn more about ‘the boss’.

 

Every year it’s the same old story: we are hardly past the winter holidays when the Tax Man comes calling. For most real estate investors, the idea of filling out the forms is more egregious even than having to pay those taxes. So, most palm off the task to the professionals.

Even if the closest you come to tax preparation is an annual visit to your accountant, there are times when a little understanding of the tax implications of a business move might come in handy. Fortunately, our friendly IRS now offers 1040 Central, an online resource that might prove invaluable – all without waiting on the phone, or paying top dollar for some simple answers. Of course, for the more complex stuff, you’d best stick with the tried and true experts.

Access 1040 Central at http://www.irs.gov for a quick overview of changes for 2005 filings, current new releases, FAQs, filing options for most basic filers, and more. You can even check on your refund. Of special interest to investors: check out the credits and deductions section – you may find some real nuggets of information about your current and future holdings here.

Recently I got a direct mail piece from a local real estate agent offering to provide me with a market analysis. She promised to let me know what my home is worth. Basically, she is hoping that I will ask her to prepare this analysis, a free service and then be so star-struck with the numbers that I will ask her to sell the home for me... and perhaps ask her to find me another home to buy. Good marketing for the real estate broker.

Even better for you if you own commercial or investment residential real estate as well. There are thousands of real estate brokers out there hoping you will ask them to prepare a market analysis for your property. If you are seeking to refi the property, your first call should not be to an appraiser. Appraisers will provide you with an "MAI Appraisal" - aka "Retail value" of the property. But lenders will lend based on the "Street Value" - what your property will really sell for today.

Contact a real estate broker and tell them that you want to know what you can hope to get for your property if you have to sell it within the next four months. Tell them you know you'll take a hit. Ask them what the number would be. Agents want your business, so they will probably put on rose colored glasses and give you a number. Take the rose colored glasses off, reduce the sum by about 10% - give or take, as you feel the situation warrants - and that's your quick sale value. If you count on this number when you apply for the loan, you will probably be satisfied with the value the lender comes up with as well. Coming to a meeting of the minds with your lender is one of the most critical factors in a successful application.

Calling all apartment building owners! I am gathering info from owners around the country. Tell me the average overhead cost of your apartments in your area. Here's what I want you to do:

• Calculate your gross income per annum
• Add up all the expenses of the operation per annum
• Divide the expenses by the gross
• Divide that by the number of apartments

What you'll have the is operating expense expressed in a percentage per apartment per year. So - investors (with inquiring minds) around the nation want to know: how does my property stack up? Am I spending MORE than the average percentage per apartment, less, or about the same?

Email gillian@avatarfinancial.com Thanks!

Avatar Financial Group's CEO, Mr. Jerry Zevenbergen was blessed with the arrival of a granddaughter, Grace Lee yesterday. Proud parents, aunts, uncles, and grandparents greeted her arrival and shared photos. See her on our home page - lower right.

For those of us who spend our days focused on property values and finances, it's a pleasure to step back and take note of the miracle of the progression of life and family.

Meanwhile, business goes on as usual at Avatar - call or email us with improved commercial property deals anytime.

When was the last time you heard of an investor who purchased a commercial piece of property for MAI appraised value? Could you name a handful in the past three to five years? Probably not. Good real estate investors look for properties selling for less than the appraised value and snap them up.

The purchase price of properties is called the 'street value' or 'quick sale value'. It is the sum that a property will change for between willing parties today. MAI appraised values assume that the seller has one, two, or even more years to wait for the right buyer to come along and buy the property at top dollar. Life isn't like that.

When you are purchasing a piece of real estate, if you are seeking a non-bank (private lender) loan, count on getting a 65% LTV first lien position loan. Be sure you have 20% to put down on the property yourself  - you can gather a group of investors to help you out here, but don't borrow that money. The 15% balance can be a seller carryback.

More about this equation tomorrow....

Avatar is a Seattle based lender and we share the excitement in our town as our football team, the Seattle Seahawks, head for the Super Bowl. Many readers probably already know that the Seahawks have never been to a Super Bowl, so this is a big event for the local fans. We’re happy, but not cocky.

As the game winds down this evening, Avatar sends best wishes to Pittsburgh who will meet the Seattle team in Detroit. And our hearty congratulations to the city of Detroit as they host the game. Realtors and mortgage brokers take note – lots of people are coming to town. Make sure they know who to contact if they are interested in investing in your town.

PS – The game is over and I am thrilled to see the players of both teams, hugging each other on the field, the coaches approaching each other with deliberation and dignity – and hugging each other, sharing personal words together, and not just shaking hands. Win, lose, or draw, a good game of sport is a fine way for a country to spend a Sunday afternoon. …and now, I am headed off to pick up two dear friends who flew all the way from Charlotte, NC to see the game. Sandy and Cary, we’re sorry you lost, but we’re happier the game brought you to town to visit with us.