Michelle McGrew is not in any hurry to move, although she plans on selling the home she and her family live in this year because they want to downsize. Nor does she take investing her money in real estate lightly. Having been a real estate agent in Ohio years ago, and now a new licensee in Arizona, the Scottsdale resident is not a typical real estate investor.
“I’m real interested in real estate all the time,” McGrew said. “I was having realtors call me over the last five years to ask about foreclosures and how they work. I told them to get a subscription to RealtyTrac.”
She refers to herself as a “slow speed investor,” meaning she and her husband buy a home, live it in, fix it up and then flip it when they feel the time is right to move on. She first came upon the RealtyTrac website while searching the internet. She saw the site offered a trial subscription and thought it was something she could use since they were searching for a bigger home at the time. So on Oct. 22, 2008, she signed up and has remained a subscriber ever since.
Unlike most of the local and foreign investors who have been swarming into the hotly contested Phoenix market over the past few years, duking it out trying to scratch out their next deal at the lower end of the market, McGrew prefers neighborhoods with more toney addresses and price tags to match with six zeroes at the end.
Her current address, a 6,100 square-foot home in the Mirabel home development in northern Scottsdale, boasts a Tom Fazio designed golf course, mountain views, desert vistas and “dining to rival a five star private Club or resort,” according to the website.
McGrew said they bought the home at a trustee’s sale on Jan. 26, 2011, after seeing the auction notice on RealtyTrac.
“It’s the easiest thing we ever did,” she said. “The kicker was, on this house we never saw the inside. There was a video online, but it did not show the secondary bedrooms. We showed up at the auction and liked the minimum bid which was $983,000. We got it for $1,006,000.”
McGrew believes her custom home could be worth as much as $2.5 million in today’s market based on the going prices of recent sales in the neighborhood. That’s a stark comparison to just a couple of years ago when foreclosures were lining the streets of Mirabel. Today there are no bank-owned homes to be found, she noted.
“Right now the market here is a seller’s market or turning into a seller’s market. There’s hardly anything for sale. It’s better than it’s been in the last four years. Builders are about to go great guns. The last several months there’s been a burgeoning glut of customers willing to wait for a new home,” McGrew said.
Part of the problem stems from the market crash that hit both the Phoenix and Tucson markets right between the eyes a few years ago, making Arizona real estate a popular investment opportunity for cash flush investors from as far away as Canada. Now, although the market is healing and prices are headed upward, another threat to local investors like McGrew is the onslaught of well-heeled institutional investors who are coming in and buying in bulk, paying top dollar for the properties they buy (most times over list price).
“The low-end properties are getting multiple offers. If $300,000 and below, they are getting 15 offers on a property within hours of the listing. If the house is under $750,000 and priced right, it’s not going to be on the market very long. We’re even seeing multiple offers on million dollar homes,” she said.
A keen market observer, McGrew has noticed that over the past few years as the FDIC has taken various banks into receivership, the properties in her market that were with those banks have not reached the market yet. Houses that are between 5,000 and 7,000 square feet are sitting with the banks and not for sale, even though the banks took them back a year or two ago.
“The banks are not dribbling them on the market fast enough. They are sitting there not for sale and deteriorating. It means the owner signed it over to the FDIC entity or the bank that was in receivership.”
So until she finds the house that fits her criteria (now she wants a house between 4,500 and 5,500 square feet), she remains skeptical when it comes to investing her money.
“We’ll move quickly for the right deal. I use RealtyTrac to get the notifications of the trustees sales. The nice thing about RealtyTrac is we can query in a specific zip code. I look in two particular zip codes,” she said. “The best part is it gives me a head’s up about a property owner and that something is going on with that property. If it’s something I’m interested in, then I’m going to track it and get more serious about it.”
And because the public auctions often get postponed, tracking properties of interest allows her to keep on top of the market to see what ultimately happens with any particular property over time. And that’s also how she knows the banks are sitting on properties in her market and not putting them up for sale, McGrew explained.
In the meantime she’s looking to sell their present home, purchase another and maybe even a second property this year.
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