Homeowners who are delinquent on their mortgage provide an opportunity for investors

Homeowners are delinquent on their mortgage provide an opportunity for investors!

There are still 1.5 million borrowers who are seriously delinquent or have late-stage delinquencies at 90 days or more past due on their home loans, according to the June Mortgage Monitor report from Black Knight.

While the national delinquency rate is at its lowest level since the beginning of the pandemic, about 1 million homeowners are expected to be in serious delinquency as September’s wave of mortgage forbearance program expirations begin, the report showed.

The economic recovery is expected to slow down even more as more Americans fall behind on their mortgage payments, and fewer can afford to purchase homes. The housing recovery will be delayed as banks tighten their lending standards. 

What is the difference between default and delinquency?

Delinquency means that you are behind on payments. Once you are delinquent for a certain period of time (usually nine months for federal loans), your lender will declare the loan to be in default. The entire loan balance will become due at that time.

How did we get here?

One of the most difficult things about owning a home is taking care of your financial obligations. If you’re not making your monthly mortgage payments, you’re considered delinquent. In the past decade, this has been a problem for a lot of homeowners. In total, about 1.5 million homeowners are delinquent on their mortgage payments. This is a problem for the investors, as the value of these homes goes down because the homeowners can’t afford to pay their mortgage. It’s a frustrating situation for everyone involved.

The 90–day delinquency rate is a measure of serious delinquencies. It captures borrowers that have missed three or more payments. This rate measures more severe economic distress. View this link to learn more and view interactive charts:  https://www.consumerfinance.gov/data-research/mortgage-performance-trends/mortgages-90-or-more-days-delinquent/

What you need to know as an investor

Per MarketWatch (https://www.marketwatch.com/story/one-subset-of-homeowners-could-be-in-trouble-here-are-the-real-estate-markets-most-at-risk-11625591292):

Any homeowner who isn’t able to sell their home or modify their loan is likely to face foreclosure or other financially challenging options, such as a short sale, the researchers warned. Whether a homeowner leaves their home by choice or through foreclosure at the end of all this, it will have the effect of adding supply to the market they live in.

“As a result, a buyer’s market could develop in ZIP Codes with heavy exposure to such borrowers,” the researchers wrote, noting that these would be areas with a high concentration of FHA loans in delinquency. So which markets are most at risk?

Atlanta tops the list, with 17.4% of the city’s mortgages in delinquency as of May. The city also has a large share of FHA loans overall, with those loans representing over a fifth of all mortgages in the city.

Many of the metro areas most threatened by such a scenario were located in Texas, including Houston (No. 2), Dallas (No. 4), San Antonio (No. 8) and Ft. Worth (No. 9).

Should you buy a distressed property now?

If you’re planning to buy a distressed property, now may be a good time to buy. Just make sure you’re aware of the risks and understand what you’re getting into.  Distressed homes offer a unique buying opportunity for real investors, but the average home buyer should probably look elsewhere. 

If you need funding, apply now. I am working online with the rest of you.  

Patrick St. Cin

W – 512-213-2271



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That Shiny Top Matters

Texture and Color

Even if you don’t cook, but you are interested in successfully fixing and reselling a home as an investment, you need to develop a passion, or at least an interest, in countertops. It seems to be the first thing everyone wants to change in their house or in one they are looking at to buy. Either it is not the right material, it is not the right color, or there is just not enough of it. When it comes to kitchen countertops, the lumber yard has almost as many choices as the cereal isle in the grocery store. There are the different materials themselves; and then beyond that, there are textures and colors that add to the variety.

Dusting and Resale

I wonder why the kitchen counter has become such a focal point. I have my own ideas. First, I think it has to do with cleanliness. Cracks and porous materials can hide bacteria. But I also think it has to do with visual deprivation, a response to the minimalist approach to decorating.

When I was a child, I loved to walk across the unfenced backyards behind my grandparents’ house to the house of a little old lady who lived on the corner. She always let me in to admire her china dog collection. The house was full of more than dogs from all over the world though. It was filled with beautiful objects in ceramic, plaster, iron, wood, glass, and cotton thread. There were figurines of dogs and birds, glass fronted cabinets of vases, crystal, salt cellars, pitchers, and salt and pepper shakers in all shapes and colors. There were heavy door stops shaped like sheep or bears and small dollied tables.

All these wonderful things needed to be dusted. I think that is why the maximal style of furnishing bit the dust; too much dusting.

A Focal Point in Open Concept

Cleaning is much easier when there is less to work around. But, maybe it is because we have become visually deprived by this turn in furnishing fashion that we focus so much attention on the kitchen counter. In many open-concept homes, the kitchen is the center of the living area. The cook wants to be a part of the action, and so the kitchen is exposed. It is not the couple of added on rooms behind a wall off the dining room like it was in my grandma’s day. As the kitchen counter surely is a useful area, the minimalist can take pleasure in its expanse and beauty and still not have “too many things,” just one beautiful thing in the middle of everything to look at and display.


The kitchen counter even made the Wall Street Journal this week. In an article by Robyn A. Friedman on December 26.

“Quartz is All the Rage”

The variety of countertop materials has grown like the number of cereals in the cereal isle at the grocer since 1960. Formica laminate is not the only choice any longer. There is granite, quartz, agate, glass, wood, and for those with a more industrial taste, stainless steel.

“Quartz is all the rage now,” Bill Feinberg of Allied Kitchen and Bath, tells Ms. Friedman. Quartz is an engineered stone that has the look and feel of natural stone and comes in all colors, even white. It resists scratches and stains and never needs to be sealed because it is nonporous. It costs about $50.0 to $100.00 a square foot, including installation.

Granite is found all over the world and comes in many colors with interesting vein patterns. There are many finishes to choose from including, polished, honed, leathered. It is pre-sealed for durability. The price for granite is $50.00 to $75.00 a square foot installed.

Glass is available in many thicknesses and colors. It is nonporous, can be backlit, and display a work of art between its layers. However, it will chip and crack if you drop the canning pressure cooker on it. Glass costs $200.00 to $300.00 a square foot installed.

Agate slabs are a work of art all by themselves and they are semiprecious. Agate can be backlit as well. An agate countertop will cost you $300.00 to $500.00 a square foot installed.

Butcher Block is also available in many kinds of wood from unfinished European Walnut to Ash and Birch. Wood offers warmth and natural beauty. It can be unfinished, oiled, or stained. For the price of a sheet, see your call hardware store.

Topping it Off

Whether your own tastes follows the minimalist or the maximalist anyone in the business of remodeling a house for resale, needs to keep their ear to the ground about what is the latest in kitchen counter fashion. You need to take an interest in the kitchen counter and the choice of and cost of the materials used to top it.

Reference: Friedman, R. A. Countertops Limited Only by Your Budget and Imagination. WSJ December 26, 2018.



Austin, Texas


Downtown by the River

If you watch much of the show “Buying Alaska,” you will be very familiar with the phrase, “It has a view.” In Alaska, it is all about mountains, glaciers, and sometimes a lake, but in many cities the desired view involves an urban river. According to an article in the Wall Street Journal, “The Latest Housing Hotspot Is Downtown and by the River.” I think that San Antonio already knows this.

“Urban Energy and Natural Beauty”

Ceclie Rohwedder, (WSJ, December 6, 2018) writes about couples in Minneapolis, Washington DC, and Omaha trading in their country homes for homes in remodeled power plants and other industrial buildings in downtown areas along urban rivers, buildings that have been turned into modern condos. What does their new home offer, she asks? “Urban energy and natural beauty” one couple says.

I must agree. Watching a river is like watching a fire, its mesmerizing. But it is interesting and beautiful too with boats, birds, and fishermen. And those old buildings left over after industry has moved on, I have often looked at them, the old brick warehouses and mills that sit along the elevated freeways of our cities, the ones with the fading billboards high up on one corner, and vacant windows. What is the architecture like, I’d wonder? They look so sturdy. They are not going to come down soon, but who is going to use them.

Americans Just want to Live Downtown

Well the city planners, developers, and investors are way ahead of me. They are turning these behemoths into housing with a view, housing near culture and sports arenas, and water. Young professionals and retirees alike, it seems, crave community and walkability along with a touch of nature. And Americans overall (this year anyway) want to live downtown. An urban riverfront close to downtown offers work, culture, and play.

These are the areas that are drawing people to look at the old and want to make something new out of it. It is the buying and the fixing up of the building that is the investment. But investors are doing this all over the country and people are buying.

So, even if you are not up for buying and remodeling the old paper mill down by the river, when you are looking for a house to buy as a fix-n-flip investment, do not forget to scout around in these riverfront areas of your town. There, in the shadows of the big buildings, might be some smaller projects, homes or shops, more to your liking.



Austin, Texas


Cold Storage 101 or −101°

Looking into the future, where should you put your money or your efforts if you are looking for a commercial real estate project that can offer decent returns. Perhaps you should think about one of the things we Americans, and people and animals everywhere, really need, food.  According to Esther Fung, WSJ, the best performing real estate investment trusts this year are in the area of food storage —cold food storage.

Right now, according to Rick Romano, head of PGIM’s global real estate securities, “cold storage is about as defensive an investment strategy as it gets.” American Realty Trust, the only publicly traded cold storage real estate investment trust, has risen 50% since the start of the year.

He also says that only 2% of groceries are bought online, but as people work longer hours and avoid long commutes and extra trips to the grocery store, that number could rise.  If it goes up to 5% or 10%, he suggests, there will be a continued demand for cold storage facilities in densely populated urban areas.

Cost of Building or Remodeling for Cold Storage

Cold storage might be a very good investment for an investor interested in commercial real estate construction or a commercial fix-and-flip project.

I know there are cold storage facilities operating near me, near the train warehouse area, because I have a friend who went to work there and in a cold storage facility, even the office space is a cool 40°.

According to Joshua Everage at A-N-C- cold storage, investment management firm JLL says the “cost of building a new cold storage facility is $150 to $170 per square foot, compared to $50 to $60 dollars a square foot for regular warehouse construction.  Most cold storage facilities are new builds, but you can expand or upgrade existing warehouse space at a cost of $60.00 to $70.00 a square foot. That is about 40% of the cost of building a new facility from the ground up. ”

−Everage also says that when you are looking at costs, consider the usual items, like location, but also the unique requirements of a cold storage facility, the freezing equipment.  Do you need a unit that can flash freeze product like fish, or a chiller? There is a difference in cost.  Also consider the height of the docks, the height of the building itself, exterior and interior wall finishes, and plumbing requirements. For a free cold storage construction guide, visit http://www.anccold.com/blog/cold-storage-construction-cost and download a guide.

For help coming up with a lender or someone willing to tackle the project, call me. I’m based in Austin, but I can meet you where you are at, in Dallas, Houston, or San Antonio.



Austin, Texas


Everage, J. 2017. Cold Storage Construction Cost Per Square Foot. Blog, at http://www.anccold.com/blog

Fung, E. WSJ, December 2018, Real-Estate Stocks Beating S&P 500 for First Time Since 2015. https://www.wsj.com/articles/real-estate-stocks-beating-s-p-500-for-first-time-since-2015-11545134402


What is $358.00?

Answer: Price per square foot for a luxury home in TX.

It is true that you can put a price tag on anything, well maybe not everything, but you certainly can put one on a luxury home. According to the 2018 Texas Luxury Home Sales Report by the Texas Association of Realtors (TAR), the median price for a Texas luxury home  remains unchanged at $1.35 million.

Houses priced over $1 million dollars are considered “luxury” and 5,123 of them sold across the state of Texas from October 2017 to November 2018, up 11.5% from the previous year. The average price per square foot for a luxury home was $358.00. This is up 2.5% from the first ten months of 2017. A median house in Texas carried an average price tag of $128.00 per square foot.

From January to October 2018 the average time a luxury home spent on the market in Texas was 94 days, a decrease of four days from the same timeframe in 2017. It makes sense that the bigger price would lead to a longer time on the market because there are few buyers who can afford the higher price and it takes longer to get a big loan.

For comparison, here are some statistics courtesy of Realtor.com.

Austin-Round Rock, TX, Median Price $350,000. Days on the Market, 65.

Dallas-Fort Worth – Arlignton, TX Median price $335,000. Days on the Market, 58

Houston-The Woodlands-Sugar Land, TZ – Median Price $350,000. Days on the Market, 65.

Killeen-Temple, TX, Median Price $200,000. Days on the Market, 68

San Antonio-New Braunfels, TX – Median Price $285,000. Days on the Market, 66.

For more on luxury houses, read “Livin’ Large: Texas’ Robust Luxury Home Market,” a Tierra Grande article by Real Estate Center Senior Data Analyst Joshua Roberson. https://www.recenter.tamu.edu/news/newstalk-texas/?Item=21652.Read more at Texas Association of REALTORS



Austin, Texas


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