Securing AC condensers
March 31, 2008
Nothing hurts a landlord’s pocketbook or pride like being the victim of theft or vandalism. The main security issue facing landlords in St. Louis and around the country is copper theft, but there are many other temping targets at any property. One particularly expensive and “easy to steal” component are AC condensers. Read more
Progress continues
March 26, 2008
Save a short break to get a bit to eat, I have been working on this blog nonstop since my previous post. I’m finally done with phase one. I have transferred everything from Blogger to Wordpress and things should move quickly from here on. I have more tedious cleanup to work on tomorrow, but I should be able to start implementing the full design very soon. In the meantime, don’t think badly of me for the current uninspired layout.
Posting back up
March 25, 2008
It looks like my ability to post came back sooner than expected. I’ve got a good start on the new design and everything close to being setup for the final transfer. This blog has been all substance and no style since its inception, but that is about to change. This new look is not only exceptionally user friendly, it simply looks awesome. I’m hoping to have everything off the ground by the end of the week. Keep your eyes peeled.
New blog design coming
March 24, 2008
I’m finally getting my new design together for the blog. Unfortunately I have to switch servers and blog software and I won’t be able to post for a few days because of the change. The new design will probably take a week or two to come together after the transfer. Check back later this week for the usual updates.
Improving Benton Park
March 20, 2008
Although the Neighborhood of Benton Park has continually improved in recent years, the park of the same name has long sat idle. Its ugly, its not user friendly, and its just not nice. Read more
Raising rents doesn’t make you a jerk
March 20, 2008
According to forecasts.org, as of today, the rate of inflation in the United States is 4.12%. That’s really high! Whether you live in St. Louis, the East Coast or Juneau Alaska this affects everything from the cost of a gallon of gas to your taxes. Money is worth less so it takes more of it to buy any product. Read more
Don’t forget the 2-families
March 18, 2008
In the hot real estate market of the early to mid 2000’s, duplexes were virtually ignored by investors looking for rental properties. And with good reason. Why would anyone buy a property if they couldn’t make it cash flow. With the upward spiral prices took in that market, 2-families were generally abandoned by rental investors and embraced only by owner-occupants.
Flash forward to 2008 and you have a much different situation. As foreclosures continue to pile onto the market and values continue to fall, these long unnoticed investment opportunities are beginning to look a little more appealing. Duplexes located in all areas and in all conditions are beginning to pop onto the market at an rapid rate. The prices have gotten so reasonable that cash flowing these buildings has become the rule rather than the exception.
I’ve been surprised at the number of duplexes I have been finding in the St. Louis market that already have a ton of work done to them, yet are for sale at a very reasonable price. Central heating and cooling, new stacks, updated kitchens and bathrooms, clean drywall finishes: these are common finds among the foreclosures flooding the market.
One of my clients closed on a 2-family in the Shaw Neighborhood last week that is a prime example of the great buys that are out there. This duplex has central HVAC, a newer stack, circuit breakers, intact copper, spacious two and three bedroom units and is really in great shape. He’s going to have to put some work into it, but it won’t exceed $15,000. Once he’s done he’ll be able to rent each unit for about $750 for a gross income of $1500 a month. The real kicker is that we negotiated the purchase price down to only $79,000. That’s only a $94,000 total investment after repairs. Not a bad cash flow. Especially for Shaw.
Another point to consider when looking a 2-families is that in the existing financing market of 20% down deals, finding 20% of $79,000 for one of these duplexes is a lot easier than finding money for a down payment on a high dollar 4-family. These deals are often more affordable and quicker to get turned around.
Of course, I am not saying that all duplexes are good deals or that you aren’t better off investing in some other style of multi-family. The real point I am trying to drive home is that you should pay these opportunities some attention. Keep you options open and you just might find one of these “diamonds in the rough.”
Colored kitchen cabinets
March 17, 2008
The most versatile, and probably most important, room in any property is the kitchen. A good kitchen can really make a lasting impression. So can a bad one. Thats why I constantly find myself disappointed by all the uninspired kitchen layouts and styles I see in buildings around town. Read more
More on the fate of Ballpark Village
March 14, 2008
Just a quick follow up on yesterday’s post about Centene potentially bailing out on the Ballpark Village deal. The St. Louis Post Dispatch posted a similar article in today’s paper. Looks like the situation is serious. Click here to check out the full article.
Lenders catching up on loan fraud backlog?
March 14, 2008
In the heyday of the 100% financing investment real estate market, fraud was really running rampant. One of the more common tricks was getting owner-occupant financing on a building, which the buyer had no intention of ever occupying. Nobody was getting called out on it, so more and more people started doing it.
Today is a different story. With all the checks and balances in the system, you’d be hard pressed to get away with that now. Some of these cash-strapped lenders are even getting so picky that they are looking back at old loans to figure out if any fraud was taking place.
I actually got a heads up on this issue from one of the tenants in a building I have ownership-interest in. The owner of the neighboring property did a rehab a couple of years ago and somehow got away with a non-historical porch and windows in the front of the project. We’ve been none too happy with his work and even less happy with the tenants he put in the building. I must confess that I wasn’t all that upset when I heard from our tenant that this guy was in trouble.
Apparently he financed his substandard rehab project with an owner-occupied loan despite the fact that this was a pure investment. I’m sketchy on the exact implications of this, but he now has this property for sale on the MLS. It’s way overpriced, so I’ll be curious to track what happens when he can’t sell this thing. Will they go so far as to foreclose on him or will they just renegotiate his loan?
The main question this situation raises is whether this is an isolated incident or if this is a sign of things to come? I suppose only time will tell. If you’re among those who financed this way, I would suggest you don’t wait to find out which way the wind is blowing.
Refinancing rates and terms are starting to open up again so it might be a good time to start thinking about making your loan legit. Under situations such as these, a lender has a right to call in a loan in full at any time. If that happens, the lendee (hopefully not you) might find themselves among the ranks of the recently foreclosed. Be careful out there.
