R.O.I. Properties

Beth Jo Zeitzer

Beth Jo Zeitzer is the President and Designated Broker ofR.O.I. Properties, a full-service real estate advisory and brokerage firm based in Phoenix. Before founding R.O.I. Properties, Beth Jo, served as the Director of Commercial Properties at Del Webb Corporation where she handled $96 million in real estate transactions and a 600-acre commercial property portfolio which included: regional and neighborhood retail centers, business, medical and professional offices, industrial parks, and light industrial spaces.

She is experienced in commercial development including planning, entitlement, infrastructure delivery, budgeting and financial oversight, marketing analysis, sales and marketing, contract negotiation, design review, and construction monitoring. Beth Jo is a licensed attorney in Arizona and California and a licensed real estate Broker in Arizona.

An Arizona resident since 1971, Beth Jo graduated from the University of Arizona with a B.A. in General Research (with Real Estate and Marketing emphasis). She is also a graduate of the University of San Diego Law School, where she was the Research Editor of the Law Review and the recipient of the Hahn Award for Excellence in Real Estate.

The Strategic Seller: Ways to Position Yourself as the Most Attractive Buyer, Part 2

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The current housing market in Greater Phoenix demands a more strategic approach to buying and selling homes than we have seen in many years. The R.O.I. Properties team has launched our new blog series, Excelling in the Residential Market, as a way to help both homebuyers and home sellers to navigate the process for maximum success and with minimum hassles. To be alerted when new articles come out, make sure to like R.O.I. Properties on Facebook.

In the previous article, we discussed some of the strategies to persuade sellers based on their emotional sensibilities. Now, let’s talk about what will make even more difference in executing a deal: money!

3 Financial Factors that Can Make You a More Attractive Buyer

In residential real estate, you generally hear the term pre-qualifying in terms of a mortgage lender and how much you are allowed to borrow. In this highly competitive market, the concept of pre-qualifying has another important definition that is relevant to the seller: Is this buyer going to perform? Here are three financially oriented steps you can take to prove you can and will make good on a deal:

  • Address appraised value/appraisal contingencies up front. Properties are selling above recent comparable sales, which is what appraisers use to value properties. Appraisers generally do not take a forward look, merely a historical look at property values. Property values are rising at this time, but comparable sales are trailing market activity. If you can address appraisal issues by either waiving the appraisal, or indicating that you will “close the gap” on the appraised value and contract price, you will have a higher success rate.
  • Increase your down payment, if possible. Financing contingencies are what is holding sales up these days. If you have cash available, you may want to provide for financing less of the transaction. This will allow a seller to feel more confident in you, as a buyer, and your ability to perform.
  • Provide proof of funds. Providing a statement that indicates you have enough money to cover your proposed down payment, and submitting this with your offer, may differentiate your ability to perform, from the seller’s perspective. This could be a statement from your bank (removing all but the last four digits of your account number), or a letter from your bank or investment firm.

In an upcoming blog post, we will be offering an exclusive interview with a Greater Phoenix appraiser—including insights for sellers on how to maximize their price—so keep an eye on this page!

Read previous articles in the Excelling in the Residential Market series:

Sellers hold the cards in today’s market—so a strategic plan is essential for buyers who want to secure a good deal at the right price. Contact R.O.I. Properties at [email protected] or 602-319-1326.

The Great Acceleration: Let Us Entertain You? Sports and Entertainment Struggle

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Let Us Entertain You? Sports and Entertainment Struggle

Our new blog series, The Great Acceleration, focuses on trends that have been pushed forward in commercial real estate sectors, from retail and office, to multifamily, hotels  and industrial properties. To ensure that you are alerted when new articles come out, make sure to follow R.O.I. Properties on LinkedIn.

If there’s any era in which we could all use a little entertainment, it’s surely the age of COVID-19. Many brick-and-mortar entertainment businesses, however, have discovered the need for muddling through, burning cash, and leaning on loans. For the hundreds of Arizona movie theaters, bars, gyms, and water parks shuttered in June, new guidelines released by the state in August offer a path forward on the process for reopening. For professional sports franchises, it’s about playing to empty seats until the crowds can return at some unknown future date.

What’s Driving the Great Acceleration in Sports and Entertainment?

Prior to the arrival of coronavirus, Americans were already spending more time and money on entertaining themselves at home. With better, larger, and cheaper big screens plus ever-expanding choices of streaming media, the “cocooning” instinct may have been the strongest it’s been since that phrase was coined by futurist Faith Popcorn back in 1981. Here are a few of the trends at play behind how we play:

Rise of online content. Why battle the crowds and risk possible infection when you can access a world of content from the comfort of your couch? To cite a few examples of how the landscape has changed: Netflix added 26 million paid new subscribers in the first two quarters of 2020, just 2 million less than they added in all of 2019. Disney+, which launched in November 2019, already has more than 60 million paying subscribers.

Tarnishing of the silver screen. Theater chains did not have a particularly good 2019, with ticket sales dropping by 4% from 2018 and a decline in frequent moviegoers. Still, you can bet that they would trade this year for that in a heartbeat—as would Hollywood, which had to delay all of their summer releases. Overcoming concerns about interpersonal contact will continue to be an issue, although some have worked creatively around the issues. Within a few weeks of social distancing rules, pop-up drive-in theaters began appearing as a way to adhere to social distancing rules while still enjoying the “togetherness” experience of viewing movies together. Locations have included Harkins Theatre in Chandler, Schnepf Farms in Queen Creek, the Digital Drive-In AZ in Mesa, and WestWorld of Scottsdale, which also featured a July concert with country star Blake Shelton.

No roar of the crowd. Greater Phoenix is one of only 13 U.S. cities with all four major professional sports. While attendance at Arizona Coyotes home games has improved somewhat in recent years, the Arizona Diamondbacks were down 5% in 2019 and the Phoenix Suns have experienced some of the smallest crowds in the NBA. A few weeks ago, the Arizona Cardinals announced that there would be no season tickets this year, just single-game sales—if fans are even allowed to attend. The issues extend to collegiate sports such as Arizona State University football and basketball, since the Pac-12 has delayed all competition till January 2021 at the earliest.

Beyond the stadiums and entertainment venues themselves, the ripple effect extends to the entire commercial real estate ecosystem—including the fortunes of nearby restaurants, bars, and retailers that require foot traffic to survive. Will pent-up demand explode when conditions improve? Fingers crossed. Even optimism needs to be balanced against two caveats: 1) whether businesses can be profitable at 50% capacity or less for an uncertain period and 2) that discretionary spending tends to decrease during rocky economic periods and in light of job security concerns.

Read previous articles in the Great Acceleration series:

Due to the coronavirus and other economic factors, the Phoenix real estate market is rapidly changing. To put an expert advocate on your side for buying, selling, or leasing residential and commercial real estate, contact R.O.I. Properties at [email protected] or 602-319-1326.

The Strategic Seller: Ways to Position Yourself as the Most Attractive Buyer, Part 1

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The current tight housing market in Phoenix  requires a more strategic approach to buying and selling homes. The R.O.I. Properties team has launched our new blog series, Excelling in the Residential Market, as a way to help both homebuyers and home sellers to navigate the process for maximum success and with minimum hassles. To be alerted when new articles come out, make sure to like R.O.I. Properties on Facebook.

If you are in the market to purchase a home, you are well aware that sellers hold all the cards at the moment. But don’t despair! As discussed in our recent post about buying a home, you can increase your odds for success by targeting a specific neighborhood, and enlisting the help of a Greater Phoenix real estate agent such as R.O.I. Properties to find off-market inventory.

Positioning Yourself as the Most Attractive Buyer

Of course, the process is not just about finding the right house at the right price. This is particularly true in today’s market—especially when there may be multiple offers for properties up to $500,000. Here are a few additional strategies to consider:

  • Write a compelling letter. In some cases, it may be good persuasion to appeal to an owner’s emotional senses—particularly if they are longtime residents or particularly attached to their home. The letter can convey certain background information about you as a buyer, why you would be a good fit for the property, and familiarity with or connection to the neighborhood.
  • Waive or shorten certain aspects of the deal. If it’s an investor deal, it may help to waive all of the inspections, speeding up the process compared to reviewing multiple offers. The seller will have the comfort of hard money up front —and that the buyer is going to perform. If you are an owner-occupant buyer, you may want to shorten the inspection period, which will enable the Seller to move through the transaction quicker.
  • Set the stage that you are committed. Similarly, a prospective buyer who is going to occupy a home can reassure the seller that a small hiccup is not going to quash the deal. For example, a buyer can acknowledge that the HVAC units are of an older vintage, and they will be accepted on an as-is basis.

Even though they have the upper hand, the last thing a seller wants is to have a deal go sour at the last minute, and have to put their home back on the market. Anything you can do as a buyer to reassure them will help you secure the property. The residential market is in a completely different zone right now, and as a homebuyer, you need to adjust your strategy accordingly. In Part 2 of “Ways to Position Yourself as the Most Attractive Buyer,” we will discuss some of the financial tactics you can use to help get your deal done.

Read previous articles in the Excelling in the Residential Market series:
Tight Housing Markets Require Focus and Strategy

Even in a market where sellers have the upper hand, buyers can improve their odds for success. Contact R.O.I. Properties at [email protected] or 602-319-1326, and we will help you formulate a strategic plan to find and purchase your dream home in your desired neighborhood.

The Great Acceleration: Arizona Hotels Plan for a Post-Pandemic World

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Our new blog series, The Great Acceleration, puts the spotlight on trends that have been pushed forward in commercial real estate sectors, from retail and entertainment to office, multifamily, hotels and industrial properties. To ensure that you are alerted when new articles come out, make sure to follow R.O.I. Properties on LinkedIn.

After hitting revenue records in 2019 and contributing an overall economic impact of $25 billion, the Arizona tourism market has experienced a slog in 2020. During the high season—when resort occupancies tend to run 80% or higher—the cancellation of Spring Training, spring breaks, events, and other business and leisure travel created a ripple effect throughout the hospitality industry. While hotels remained open as essential services, increased restrictions in air travel and drastically limited amenities at properties all but destroyed Greater Phoenix’s customary appeal as a warm-weather getaway.

As of late July, the Arizona Office of Tourism (AOT) calculated the industry’s net losses at about $7 billion so far, with job losses and furloughs of about 50% of the tourism workforce. Although there was a slight uptick in June occupancy, July once again fell back. AOT has created a strategic recovery plan, but the unknowns of the coronavirus pandemic will remain an issue.

What’s Driving the Great Acceleration in Hospitality?

Clearly there’s been more economic deceleration than acceleration in the overall hospitality market. Nonetheless, there are a number of areas where the advent of COVID-19 has forced a speed-up in the rate of change within hotels and resorts.

Ascension of short-term rentals. Even before the pandemic, Airbnb, Vrbo, and similar options were giving hotels a run for their money. In the early spring, it looked like short-term rentals were going to be more negatively impacted than big-brand hospitality—and indeed, a flood of properties were released on the market as owners looked at their dropping reservations. However, this segment has subsequently come back stronger. As noted in Travel+Leisure’s recent article, “Why Travelers Are Turning to Vacation Home Rentals for a Safe Getaway This Summer,” home rentals seem like a safer option than high-traffic properties and the resulting interaction with numerous unknown guests. On the downside, Airbnb recently experienced negative headlines that forced them to crack down on so-called party houses that were flouting social distancing guidelines.

Technology advances. Aside from the obvious low-tech solutions such as wearing masks, requiring temperature checks, and cleaning surfaces, the coronavirus outbreak has forced hospitality destinations to invest in high tech. Contactless check-in and keyless room entry are prime examples that are very popular with today’s travelers, for convenience as well as minimizing disease exposure. Within the rooms themselves, similar principles apply with apps that mimic smart home features, allowing guests to change the thermostat, lights, or TV channel, without ever touching a thing. In some cases, the touchless capabilities extend to restaurant ordering or reserving pool chairs.

Clearing out of marginal properties. Trepp’s July 2020 Delinquency Report notes that 23.79% of lodging properties are in default and another 5.39% are in grace (under 30 days in default)—more than 29% in default or distress. It’s too early to tell the full impact, but receiverships and bankruptcy may be in the cards for less-profitable properties with the expiration of PPP and other government funding assistance. Ultimately, we may see a trend towards alternative uses for properties that can be repurposed. Or, for more aggressive investors who can hang on, this might be an opportunity to position themselves for a value play that pays off in a 2021 or 2022 recovery.

The Phoenix commercial real estate market’s changes are not restricted to hotels and resorts—and our team is ready to help you meet the challenges. To put an expert advocate on your side for buying, selling, or leasing commercial real estate, contact R.O.I. Properties at [email protected] or 602-319-1326.

Real Estate Bankruptcies and Work-Outs: Practical Strategies for the Post-COVID Era

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Thursday, July 9, 2020, Beth Jo Zeitzer, Owner and Designated Broker of R.O.I. Properties, and Cathy Reece, of Fennemore Craig presented Real Estate Bankruptcies and Work-Outs: Practical Strategies for the Post-COVID Era to the American Law Institute (ALI). This program examined the real estate market, pre and post-COVID-19 and discussed current market trends and how they will influence bankruptcy and work-out strategy.

Topics of discussion included:

  • Commercial real estate re-imagined: COVID-19 is the great accelerator
  • Foreclosure moratoria and their impact on commercial real estate: The long pause…
  • Loan default/delinquency by asset class: Hospitality/lodging, retail, m/f, office, and industrial
  • Creditor’s rights provisions and documents: Special/single purpose entities, non-recourse loans and carve out guarantees, intercreditor agreements, and pre-workout or pre-negotiation letters
  • Addressing insufficient cash flow
  • Alternatives and remedies: Deeds in lieu of foreclosure, assignment for the benefit of creditors, receivership, sale of property or auction, sale of note and lien, partition, and other state remedies
  • Bankruptcy process and outcomes

Let us know if you are interested in scheduling an exclusive webinar/seminar, on a complimentary basis. Please, email [email protected] for inquiries. We can offer continuing education credit/certificates as well!

The Strategic Seller: Tight Housing Markets Require Focus and Strategy

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The past few months have been a bit of a social and economic rollercoaster—and created the need for a more strategic approach to buying and selling homes. The R.O.I. Properties team has launched our new blog series, The Strategic Seller: Excelling in the Residential Market, as a way to help both home sellers and homebuyers to navigate the process for maximum success. To ensure that you are alerted when new articles come out, make sure to like R.O.I. Properties on Facebook.

Mortgage rates just dipped to historical lows, with rates down to 2.88% for the first time in 50 years. While those rates may get buyers salivating about purchasing a home with rock-bottom payments, the dreams of turning the key on a new front door need to be balanced against reality: The Phoenix market is currently experiencing very low inventory and significant pent-up demand.

Due to the stay-home orders and other pandemic safety measures, April and May saw many potential sellers remaining on the sidelines. Even though that pushed some listings later than customary seasonality, June did not fare much better, with inventories running 12% lower than last year—and the homes released by owners bailing out of the vacation rental market were quickly absorbed. As of June 20, there were fewer than 9,000 listings for sale through the Arizona Regional MLS and less than half of those listings were single-family homes under $500K. Although the number of single-family permits filed is up this year, it has not been nearly enough to meet increased demand.

Our expectation at R.O.I. Properties is that the residential real estate situation will change by 1Q 2021. However, with the foreclosure moratorium extended for homeowners with FHA, Fannie Mae, Freddie Mac, VA and USDA loans and forbearance options available until December 31, 2020, uncertainty will continue to reign for the time being.

Buying a Home in Phoenix? Build Your Strategic Plan First

Add it all up, and sellers have the upper hand at the moment. Markets such as this can be difficult from a buyer’s perspective, but there are still opportunities for those who are willing to be strategic and focused. A strategic plan for buyers right now centers on knowing very specifically what you want, even more so than usual.

Gone are the good old days of a leisurely Saturday drive through various neighborhoods, touring several homes in each, and taking your time on making an offer. Under current conditions, one worthy strategy is to secure an off-market deal—but we are not talking about the random spam text messages or mass mailings you may have received. The process starts by picking your target neighborhood first, ideally a specific subdivision. (If you are moving in from out of town, an experienced Realtor can be your eyes on the ground, based on your preferences.) At that point, your professional agent can go into the community and make personal contact with property owners to know of your interest—as well as your seriousness about buying and qualifications on the financial side.

In a tight market, restricting your search to the available inventory is likely to lead to frustration. To enlist the help of professionals who can help you formulate a strategic plan to find and purchase your dream home in your desired neighborhood, contact R.O.I. Properties at [email protected] or 602-319-1326.

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