Maximizing the potential of your shotgun units
January 30, 2008
Shotgun-style units are a dime a dozen in South St. Louis. I don’t understand how anyone ever thought they were functional, regardless of the era they were built. I guess we take privacy for granted these days.
The question is what to do with these units today. You can rent them, for sure, but not having a private bedroom can be a major drag on your rent potnential. Seeing as this business is all about profits, that’s an important concern. One solution that a surprising amount of owners seem to gloss over is reorienting the layout of the unit. And its not really that hard.
The best time to do this is if you need to replace your drainage stacks in the building. At that point its simply a matter of moving the stack from the far end of the building to the middle. You’ll have to rework the plumbing and move the kitchen cabinets, but its not too big an ordeal. The costs are minimal and when you’re done you’ll have a private bedroom, which will bring increased rents and up the value of your property.
If you have shotgun units in your buildings, the next time you plan on replacing the stacks, make sure you take advantage of this great opportunity.
St. Louis traffic light nightmares
January 28, 2008
Oh how I hate sitting at traffic lights. I understand why they exist and can’t think of any better way to manage traffic, but I still hate them. And traffic lights in the City of St. Louis are some of the worst you’ll ever come across.
I live in Benton Park and workout at the Fitness Factory on Washington Avenue Downtown. My rage just increases every time I make that trip. My route takes me down Tucker Avenue and I swear that there are times that I hit ever light on a red. That half mile run from Chouteau to Washington can take forever under those conditions. Long enough to open even the most patient person’s eyes to this horrendous problem facing St. Louis: non-synchronized traffic lights!
Obviously, you feel the impact of this problem most significantly in areas with many intersections such as Downtown, but the problem is city-wide. The City has been talking up and “studying” plans for improved synchronization for years, but there has been little action. In early January, the Downtown St. Louis Partnership claimed that traffic signals Downtown, east of Tucker, will be synced by this April. That’s great, if true, but what about the rest of the City?
Just another one of those little things that leaves people with a bad impression of our fair city. How is it that virtually every county in the metropolitan area can have sensors in the ground to detect if a car is waiting at an intersection, but St. Louis can’t even sync the traffic lights of major transportation corridors without studying the problem for ten years? Unfortunately, nobody in City Hall seems to have a good answer to that question.
To be fair, I’m probably being overly dramatic about the situation, but there is not doubt that there is a problem. Feel free to share your displeasure with your local alderman if you feel particularly passionate. If there is a particular light you have had problems with, the City actually has a special website to report the issue. Let the complaints begin: light synchronization complaints.
Infill housing from old cargo containers
January 24, 2008
Pretty cool looking place isn’t it? Modern without being too “in your face.” Would you believe that this home was made out of two old forty foot cargo containers? A company called Logical Homes has been working on the concept for a while and is about to unveil this design in a new line of prefab homes sometime in 2008.
The picture above was taken from the show floor of the 2008 CES in January, and is apparently the first completed prototype. Price and specifics are not yet available, but I find concepts like this intriguing. I like the design as-is, but I just wonder if you could orient the flat face to the street and have the open end facing backwards. Or if you can stack these to create multi-family properties. If these are real possibilities, these prefab units might be feasible to build somewhere in St. Louis. Unless they are too expensive. I’ll keep you posted on details.
If you want to be notified via email when this product line is release, check out Logical Homes website
City taking over Fleur de Lis site?
January 22, 2008
I have a little follow up on the situation with the Fleur de Lis project site. Kind in mind that this is only a rumor at this point, but apparently the City’s Land Reutilization Authority (LRA) was none too happy about Millennium trying to sell the site. They went through a lot of effort and spent a lot of money to secure the site from the former gas station and Hardees that formerly sat at the location and were a little peeved that Millennium was trying to make a profit at the taxpayers expense.
Word has it that there was a “Right of Re-Entry” clause in effect and that the City is calling it in. Perhaps the they will take over the site and shop the development at a more reasonable price to local developers. Anyone want to take on a big project? Please remmeber that this is only a rumor at this point. I’m sure we’ll find out more in the coming weeks.
For more information, check on my past entries on the matter:
Fleur de Lis - Benton Park project goes from dream to dead
Fleur de Lis - Property no longer for sale
Cash-for-keys as an eviction alternative
January 18, 2008
Getting unwanted tenants out of your apartment units can be one of the most frustrating experiences a landlord can go through. Whether you want to give them the boot to rehab the unit or want them out because they aren’t paying their rent, its not a fun experience. The most common method used to do the job is the eviction. An effective method, for sure, but an expensive one. Legal fees, rent loss and value-of-time costs tend to rack up in a hurry.
The next time you need to move out a tenant, consider an alternative: cash-for-keys. This method, commonly used by banks in foreclosure situations, can be very fast and relatively cheap. The basic premise is that rather than going the route of eviction, you offer a cash settlement to the tenant if they are out of the unit by a specified time. Of course, the actual amount of the settlement depends on the situation. At first glance, many landlords scoff at the idea, for many reasons. Such an attitude is, however, rather shortsighted. Consider the following:
- It’s fast - This method can potential get the tenant to move out in a matter days due to the financial incentive. Compare that to the three months a knowledgeable tenant can stretch an eviction out.
- It’s cheap - Offering a tenant $250 to move out is far cheaper than any eviction. Paying a professional to handle the process will run you $300 alone. If you account for lost rent and tenant damage accrued during the eviction process, the choice is obvious. Even if you have to offer more than $250 to get the tenant to move.
- It’s easy - Going through the process of eviction not only takes time and money, its a pain in the butt. Especially if you are representing yourself in the eviction. It’s also easier on the tenant. Many tenants would be willing to cooperate with you and move out, but they don’t have the money to make a down payment or move to a new place.
When you come down to it, there is no reason not to try this method. It’s cheaper, it’s faster and it’s quite simply a better arrangement for both you and your tenants. It doesn’t always work and it isn’t for ever situation, but its always worth a try.
Old North St. Louis looking impressive
January 16, 2008
Two years ago when talk of an Old North St. Louis revival was really heating up I had my doubts. Last year my doubts increased with the virtual standstill in development along North Market and the continued “talk” about the revival of the old 14th Street Mall. As a former skeptic, I’d like to make a formal apology for my doubts.
I drove through the neighborhood last week and was totally floored. Not only was construction along the mall going full steam ahead, I was shocked by the amount of work being done on buildings on nearby streets. I was well aware that construction was underway, but not to this extent. Streets were fenced off, crews were everywhere and the vibe was fantastic.
There is still a long way to go for this project and the neighborhood as a whole, but the future is looking bright. According to the “What’s New in Old North” blog the current development is set to include:
“27 buildings are being completely rehabilitated as a part of this housing and economic development initiative. 33,500 square feet of new high quality street-level commercial / retail / restaurant spaces will be created, constituting the neighborhood’s first significant new economic development in decades—and a boost to the local economy and tax base. 80 units of rental apartments, townhouses, lofts and live/work spaces - reasonably divided between affordable and market-rate units will be completed as a part of this redevelopment effort.”
The question is no longer if this project is going to happen, but what kind of impact it is going to have? Quality developments in North St. Louis have been nearly nonexistent for decades, but if this project is successful it could go a long way in correcting that trend.
A public meeting discussing this project is set for Saturday, January 19th 2008 and all are welcome to attend. For more information check out this blog. Even if you can’t attend, I recommend that you drive by and check out what’s going on in the neighborhood. Make sure to pay a visit to Crown Candy Kitchen while your there. Click here for directions.
*I previously wrote about this development in the December 2006 issue of my newsletter: Check it out.
Fleur de Lis no longer for sale
January 14, 2008
A little over a week ago, I posted a story (Fleur de Lis - Benton Park project goes from dream to dead) about the site of the former Fleur de Lis development proposal going up for sale. Interestingly enough, after only 27 days on the market, they just pulled the listing. All of the lots are coming up as “Canceled” in their listing status. As for what this means, I have no idea. Expect an update when I know more.
Lumière Place: A great addtion to the St. Louis skyline
January 10, 2008
I have definitely not followed the progress of this development as closely as I have some others. However, it seems that we are all going to benefit from the fact that Pinnacle Entertainment is running this project instead of the originally proposed Isle of Capri project. This thing is huge!
While Laclede’s Landing has had its struggles and the Bottle District can’t even get off the ground, this $507 million project has been moving full steam ahead. The casino finally opened up a few weeks ago. If you haven’t driven by at night, you need to check it out. Its a site to behold. A very unique and worthy addition to the skyline.
The impressive thing about the project is that is really going to improve the amount of social options in the area. Aside from the casino itself, the development includes the following destinations (some are still not open):
Dining & Bars
Retail
A worthy assortment of bars, restaurants and retail shops. The map above is a layout of the casino itself. One of the remaining questions about the project is how it is going to affect Laclede’s Landing. Although it acts as a sort of southward extension of the Landing, many have addressed concerns over how disconnected the casino feels from the rest of the area. The fear seems to be that casino and it’s many nightlife destinations will draw customers away from the rest of the Landing. For an area that has had its share of troubles that could be a death knell. Whether those fears prove to be founded will be seen in time.
Early reports seem to be positive on atmosphere and ambiance, but slightly negative on service. I guess thats to be expected for such a large establishment so soon after opening. Once they manage to convince the State to remove the current $500 loss limit per two hour session (we all known that’s going to happen) things look like they are going to work out just fine.
But the most exciting thing about this development isn’t even the casino, the hotel or the plethora of new nightlife opportunities; its Phase II of the project. Pinnacle has been planning this phase since the projects inception and is committed to building at least $50 million in residential developments along the North Riverfront. This is what Pinnacle Chairmen and CEO Daniel Lee had to say about the next phase of this project:
“Additional phases, which include eight residential buildings totaling 375 condos, and 220,810 square feet of commercial space, will be built after phase 1 opens based on market demand. Retail tenants have not been signed to the proposed commercial space
. The second phase of the development calls for a 35,258-square-foot grocery store, an 11,481-square-foot cafe and an additional 174,071 square feet of retail space.”
Initial plans were recently put on display at Lambert airport and can be seen: HERE. This plan is in the very early stages and will undoubtedly change as it develops, but its a great sign of things to come. Pinnacle has a very strong track record on following through with such proposals and even a scaled-back version of this project could do a lot to increase the desirability of the north riverfront. Rumors are circling that costs for the second phase could even reach $500 million. Needless to say, its going to be interesting to see how this pans out. As a region, we need to do all we can to retain our local young professionals and to draw in others from across the country. This is the kind of development we need to be seeing more of.
Looking for some tools? Cheap?
January 9, 2008
Everything must come to an end. Even though they have been in business for over 85 years, it looks like ABC Tool Rental in South City is going out of business. Since they have no need of their current rental inventory, they are selling off everything. They have everything from $50 heaters to high-end floor sanders. Its worth a look. Here is the information on the company:
ABC Rental (Click for map)
3456 S. Grand
Saint Louis, Missouri 63118
(1 Block North of Gravois)
Business: 314-865-2400
Home: 314-353-3034
Mobile: 314-757-2626
Open Seven Days a Week
7:00 a.m. - 6:00 p.m.
Analyzing the profitablity of investment real estate
January 8, 2008
One of the most important things every investor needs to do before purchasing a property is a profitability analysis. At first glance, many deals seem great, but upon further review turn out to be less than ideal.
I’m not going to write a long article on what makes a good deal, but I will provide you with a tool that can help you figure this out for yourself. If you have Microsoft Excel, I have a financial spreadsheet, which I find particularly useful when scrutinizing deals. You can download this spreadsheet for yourself by clicking on this link: Rental Property Analysis.
The nice thing about this sheet is that it figures out most of the math for you. Simply enter the rents, expenses and financing and it figures out how profitable the investment will be. Of course, this is a very simplified spreadsheet. It does not account for major repairs, appreciation or tax benefits. However, it should give you a realistic snapshot of an investments potential.
I like to pay particular attention the the cash-on-cash return. Some people tout using cap rates, but they do not take financing into account. The percentage cash-on-cash return tells you how much money you will get back in a given year for the money you put it.
Try it out and see what you think. If you have any questions, comments or suggests I welcome them.
