Buy Back Oregon Presentation

John McClay, Principal Broker, CDRS

Nathan Jones, Principal Broker

Buy Back Oregon Presentation

John McClay, Principal Broker, CDRS

Nathan Jones, Principal Broker

OverviewOverview

• Who We Are

• The Current Real Estate Situation

• How Did We Get Here?

• Program Overview

• What We Need to do Now!

• How to Turn the Tide

Oregon Principal Brokers with over 25 yrs. experience, who are passionate about our State,

communities and people we serve.

We want to put families back into their homes. We are advocates for private property ownership, the

American dream.

Who We AreWho We Are

• 3 ½ years of unprecedented decline in Oregon Real Estate business

• Property Values have declined anywhere from 30%-50%

• Property Values are declining nationwide at the rate of 1% per month this year. -The Wall Street Journal

The Current Real Estate SituationThe Current Real Estate Situation

How Did We Get Here?Foreclosures by YearHow Did We Get Here?Foreclosures by Year

*Wall Street Journal projections

Forclosures by Year

240002200022000

18700

16000

0

5000

10000

15000

20000

25000

30000

2008 2009 2010 2011 2012

Forclosures

• Purchase all REO properties in Oregon through 2013

• Rent out currently empty homes

• Rent to own option for qualified residents

• Sell homes at Fair Market Value

• Alleviate downward pressure on all Real Estate values and the financial burden on State Lenders

Buy Back Oregon Program OverviewBuy Back Oregon Program Overview

• Rent previously foreclosed properties with a purchase option

• Up to 40% of all families who have been foreclosed upon could be back in their homes

• First time home buyers could have affordable housing without incurring economic ruin

Program PotentialProgram Potential

• Stop declining values in all residential properties

• Stop the downward pressure on pricing and values

• Put the real estate business on firm footing

What we need to do Now!What we need to do Now!

Stabilize the real estate market and help stabilize the State economy

Create opportunities for people to have a home.

Excellence achieved through Oregon’s best real estate practices

Mission StatementMission Statement

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Mortgage Forclosure Inventory in Oregorn

Mortgage Forclosures Started

Seriously Delinquent Mortgages in Oregon

90+ Days Past Due Mortgages in Oregon by %

60-89 Days Past Due Mortgages in Oregon by %

30-59 Days Past Due Mortgages in Oregon by %

Past Due Mortgages in Oregon by %

National Delinquency SurveyNational Delinquency Survey

Wallstreet Journal May 18-19, 2011Wallstreet Journal May 18-19, 2011

• “Home buyer tax credit did little more than pull sales forward, once expired sales slumped.”

• “If seller’s can’t unload homes in the spring, they will be more inclined to aggressively cut prices. That, along with the wave of distressed properties still coursing through markets, may mean that 2011 price drops are more severe than expected.”

• “Falling mortgage rates won’t counter high unemployment. Until that improves markedly, and the huge inventory of unsold homes declines, investors should beware of any housing head fakes.”

Wallstreet Journal May 18-19, 2011Real Test for Housing Markets to Come Later | By David Reilly

Wallstreet Journal May 19-19, 2011Wallstreet Journal May 19-19, 2011

• “Housing IS the business cycle.”

• “Economists and policy makers haven’t fully understood the implicates….especially in regard to rising dept levels…one reason the current downturn is so severe.”

• “2011 will mark a sixth year in a row of new home sales declines and the fewest sales since records began being kept in 1963...2010 less than 60% of the number of new homes sold in 1963, even though the population today is nearly two-thirds bigger.”

• ”…the absence of a housing recovery makes it more challenging to create a vigorous economic recovery.”

• “We are stuck today, as in the 1930’s, ia a household recession triggered by excessive debt.”

Wallstreet Journal May 18-19, 2011The Housing Headache Felt All Over | By Kelly Evans

•1.2 million foreclosures this year in the United States • 24,000 home foreclosures this year per state (Projecting a little less than 19,000 residential home sales in Oregon this year.)

•REO properties (Real Estate Owned by lenders) –

Currently 10% of “properties for sale”. It is obvious

many more REO’s have to be sold to clear foreclosed

home inventory.

Where Are We Now?Where Are We Now?

1. Purchase all REO properties in Oregon this year, 2012 and 2013

2. Contact all previous owners of foreclosures and offer rent/purchase. (could work for up to 40% of these people)

3. Offer the rent /purchase option to people who want to own a home but don’t quite qualify at this time. (first time home buyers etc.)

4. Sell on open market without dropping price

5. Rent

The Critical SolutionThe Critical Solution

• Not an entitlement program• Is Government funded (US Treasury) paid back within 10 years

• Not get rich by buying foreclosures program

• Collectively we are providing a means for individuals to “Earn your own way.” and “Buy your own home.” while repaying the principal balance

How do we pay for it?How do we pay for it?

Government/Politics

Government must be 100% involved; First, for funding,Second, for cooperation from Fannie Mae , Freddie

Mac, etc.,Third, to assist us with convincing ALL lenders in

Oregon to participate in this program.

*It is critical that ALL lenders participate.

Buy Back OregonBuy Back Oregon

• Lenders – Clear REO Inventory

• Private Property Owners – Values Stop Declining

• Buyers – Rent/Purchase Options

• Home Sellers – Downward pressure on pricing stops

• Real Estate Business - Stabilize pricing and sales

• State of OREGON – Help stabilize economy

• Lenders – Clear REO Inventory

• Private Property Owners – Values Stop Declining

• Buyers – Rent/Purchase Options

• Home Sellers – Downward pressure on pricing stops

• Real Estate Business - Stabilize pricing and sales

• State of OREGON – Help stabilize economy

• Lenders – Clear REO Inventory

• Private Property Owners – Values Stop Declining

• Buyers – Rent/Purchase Options

• Home Sellers – Downward pressure on pricing stops

• Real Estate Business - Stabilize pricing and sales

• State of OREGON – Help stabilize economy

Winning ProgramWinning Program

• Cost for 3 years: High is five billion, low would be two billion*

*depending on how many foreclosures are currently in asset management departments of lenders in Oregon.

• Operation budget: 3 to 4% of cost. The rest of the monies are used to purchase REO properties. All costs to be repaid.

Project management, property management, BPO’s and appraisals, property insurance, property taxes, marketing, commissions, set up escrow accounts, etc.

Upfront CostsUpfront Costs

Six months after the purchase of the 2012 foreclosures

• The remainder repaid over the next 8 years.

• Payback will come from:

1. Proceeds of outright sales of REO properties

2. Rent received

3. Purchase of rent/purchase

4. Rent from rental properties

5. Sale of rental properties over next 8 years.

Payback begins Payback begins

Purchase Flow ChartPurchase Flow Chart

Pay Back Flow ChartPay Back Flow Chart

*All Monies to be paid back by 10 years from beginning of payback

We are here to answer questions and

look forward to working with you to

“Buy Back Oregon”!

John McClay, Principal Broker CDRS

Nathan Jones, Principal BrokerLicensed Oregon Real Estate Brokers

Buy Back Oregon! Buy Back Oregon!