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Fix ‘n Flip…by the numbers Tom Ruff AZREIA May 14, 2012.

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Presentation on theme: "Fix ‘n Flip…by the numbers Tom Ruff AZREIA May 14, 2012."— Presentation transcript:

1 Fix ‘n Flip…by the numbers Tom Ruff AZREIA May 14, 2012

2 In the beginning… Tracking daily real estate transaction since 1983 Tom Ruff Director or Operations AZ Bidder, LLC

3 “One way to think about it is, the longer a household formation stays down the greater the pent-up demand is, and it's like a rubber band — you keep pulling back on it. At some point, when you let it go, it's going to snap back in a very big way. So that's very likely to happen in the housing market. We can debate exactly when it happens, but happen it will.” - Nariman Behravesh, Chief Economist of forecasting firm, IHS

4 “Before I tell you what I know… …let’s go over what I don’t know” Tom Ruff

5 Methodology o Data set: June 1, 2011 thru March 31, 2012 o Flips are defined as properties purchased and resold in within a 6 month window o Subtleties No cost considerations Wholesale model/Deed considerations

6 “The reports of my death are greatly exaggerated.” ― Mark TwainMark Twain

7 DATEFLIPSNORMALPERCENTAGE Jun-1198310,23610% Jul-119108,61812% Aug-119419,02810% Sep-118198,01310% Oct-117487,44610% Nov-118247,03112% Dec-119627,92712% Jan-127706,49912% Feb-129377,40313% Mar-121,1339,01413% TOTAL9,02781,21511% Short Term Trends Increasing

8 A deal is a deal wherever you find it! SALE TYPECOUNTPERCENTAGE 3RD PARTY AUCTION 5926 66% BANK SALE 962 11% FANNIE MAE 520 6% ACTIVE NOTICE 431 5% SHORT SALE 331 4% NOT CODED 250 3% HUD 233 3% NORMAL SALE 181 2% FREDDIE MAC 170 3% VA 17 0.19% NEW CONSTRUCTION 6 0.07% Speculators Returning

9 Standardized Breakdown SALE TYPECOUNTPERCENTAGE 3RD PARTY AUCTION592665.65 BANK SALE190421.09 SHORT SALE7628.44 NORMAL SALE4354.82 TOTAL9027100

10 Sales - Median Normal Sales$ 70,000$ 113,600$ 43,60059% Short Sales$ 79,900$ 120,000$ 40,10046% Bank Sales$ 68,000$ 109,900$ 41,90053% Third Part Auction$ 107,000$ 145,000$ 38,00039%

11 Sales Average TYPESALEPRICEAPRICEDIFFERENCECOUNT INCREASED VALUE 3RD PARTY AUCTION $ 130,173 $ 171,871 $ 41,698592639% BANK SALE $ 84,211 $ 123,767 $ 39,556190455% NORMAL SALE $ 110,275 $ 153,920 $ 43,64543559% SHORT SALE $ 106,633 $ 147,517 $ 40,88476246%

12 Flipper’s Target

13 o Flippers like a sure thing o Over the last 10 months, “9027 Flips” have accounted for 11.11% of all sales o 98% have had a positive return o They know their market o Time

14 Time TYPECOUNTTIME 3RD PARTY AUCTION592666 BANK SALE190490 NORMAL SALE43569 SHORT SALE76278

15 Range RANGECOUNT PERCENT AGE RUNNING TOTPROFITRATIOTIME 500002000.1765 2392176%60 1000004120.36360.54013855753%79 1500002430.21450.75464106734%74 2000001280.1130.86766027335%84 250000610.05380.92146414328%88 250001+890.078619112324%81 TOTAL1133114447247%76 RANGECOUNTPERCENTAGE RUNNING TOTALDIFFERENCE INCREASED VALUETIME $ 50,00020018% $ 23,921.0076%60 $ 100,00041236%54%$ 38,557.0053%79 $ 150,00024321%75%$ 41,067.0034%74 $ 200,00012811%87%$ 60,273.0035%84 $ 250,000615%92%$ 64,143.0028%88 $ 250,001+898%100%$ 91,123.0024%81 TOTAL1133100% $44,472.0047%76

16 Tidbits: o Purchases 93% cash or hard money o On the flip side 65% are financed o The median price paid at auction by flippers is $10,000 higher than the median price of all homes purchased at auction, $107,000 compared to $97,000 o April flips were 13% of the normal market o Prices continue to move up in May

17 Ancient History NormalShortBank3rd Party Auctions 10 Months30 Days10 Months30 Days10 Months30 Days10 Months30 Days Average $ 43,645$ 47,627$ 40,884$ 43,887$ 39,556$43,845$ 41,698$ 44,402 Increased Value 59%69%46%52%55%60%39%40%

18 Single Family Residence Recorded 5/10/2012 TYPE INCREASED VALUE PURCHASE Price SOLD Price ASSESSED Value DAYSZIP LOT SQFT POOLSQ_FT YEAR BUILT NORMAL SALE $ 56,000$ 129,000$ 185,000$ 119,200 49850236550Y16371997 3RD PARTY AUCTION $ 72,400$ 47,500$ 119,900$ 32,100 71850357728N18121971 SHORT SALE $ 59,000$ 53,000$ 112,000$ 49,000 34850376508N14551993 SHORT SALE $104,900$ 225,000$ 329,900$ 203,000 104850506985Y18341996 3RD PARTY AUCTION $ 91,000$ 44,000$ 135,000$ 59,100 87852047745N12241970 3RD PARTY AUCTION $ 59,500$ 97,500$ 157,000$ 99,600 86852058481N16431988 NORMAL SALE $ 80,000$ 75,000$ 155,000$ 87,500 91852108538N12441976 SHORT SALE $ 57,250$ 105,000$ 162,250$1 09,700 113852247701Y19731971 BANK SALE $ 67,201$ 109,699$ 176,900$ 122,800 48852348512Y17071993 NORMAL SALE $ 84,000$ 155,000$ 239,000$ 162,600 658525410676N17851969 BANK SALE $ 81,750$ 56,500$ 138,250$ 76,800 101853089506N13851974 3RD PARTY AUCTION $ 57,450$ 192,500$249,950$155,200 56853408627N39062002

19 Recorded 5/10/2012 13026 W ALEGRE DR LITCHFIELD PARK, AZ 85340 Purchase Price: $192,500 Sold Price: $249,950 Spread: $57,450 3 rd Party Auction : 56 Days on Market 4419 E JAEGER PHOENIX AZ 85050 Purchase Price: $225,000 Sold Price: $329,900 Spread: $104,900 Short Sale: 104 Days on Market 6507 E ENCANTO ST Purchase Price: $ 97500 Sold Price: $ 157,000 Spread: $59,500 3 rd Party Auction: 56 Days on

20 “A deal is a deal is a damn deal.” - Tom Ruff Thank you!


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