I just closed on this property I listed in West Haven:
This property has presented quite the experience. My clients had purchased the property back in 2008 shortly after the property was built. Later, they refinanced and somehow the property appraised for over $135K, which the bank quickly lent my clients. Fast forward to October 2013 and my client's finances were hamstrung by an awkwardly large house payment. The approached me and asked if we could do a short sale.
A quick glance at the market showed that their unit was worth $125k in good condition. But, it needed some minor TLC. Also, in order to compensate prospective buyers for the hassle of having to deal with a short sale, we decided to discount the price a little further list the property at $115,000.
The short sale process proceeded as expected and we received a few offers. It took us several months to get an approval and in April we finally received one. At that time we began to work towards closing the purchase. However, in a weird turn of events, the buyer forgot to pay her student loans during the contract period and her credit was destroyed mid-process. It was a serious disappointment.
So we put the home back out in the market. We reduced the list price to $109K to solicit another offer. We recieved one and again mid-process, the buyer couldn't quality for a mortgage. This was getting to be a very annoying pattern.
After a quite month or so, we reduced the price again to $105K to attract another buyer. Finally, in late July we received a cash offer. They offered $106K. The bank took a couple months but ultimately approved $108K as the final price. The buyer agreed to pay that amount and we closed quickly on the property.
If you are needing to do a short sale on your property, CONTACT ME, and lets review some scenarios that may help your situation.
Friday, September 5, 2014
Tuesday, September 2, 2014
Fear is a great detriment to many people wanting to invest in real estate. There is a fear of loss and a fear of the unknown. It is true that there is no sure fire way to prevent undesirable outcomes in regards to unpaid rents or damaged property. However, there are things that can be done to hedge against those risks and make them less likely. Understanding the role of risk and then compensating for it is the key to success in owning income property.
Much of the success or misery experienced owning income property will be related a tenant's performance on a lease agreement. The three considerations landlords care most about are:
1. Will the tenant pay rents on time and in full?
2. Will the tenant treat the property in such a way that it will be returned in the same condition in which it was delivered to them?
3. Will the tenant be a respectful neighbor to others (especially if living in a multi-unit building)?
I came across an interesting situation that caused me to stop and think for a moment on how to arrange the lease agreement for a prospective tenant. I recently recieved an application for an apartment. The application was delivered to me by a family member who explained that he was the executor of this applicant's finances and would be paying the rent. The applicant was disabled and required assistance with paperwork and other personal record matters. He also explained that the applicant had been notified by the previous landlord that their lease would not be renewed due to a problem with a misbehaving roommate who has since left the scene. The income of the applicant was just barely below the required amount for an unconditional qualification. When we pulled credit, there was a litany of medical collections. Yet, the applicant didn't smoke, nor had pets.
This was the first time I have bumped into an executor situation with someone besides the tenant being in charge of paying rent. I felt uneasy with the application. I could understand the medical collections because that can happen to anyone who is uninsured. The roommate issue was a concern but apparently that relationship had ended and that person wouldn't be around anymore. But, what would happen if the executor decided he didn't want to pay rent or wanted to pick up this applicant and move them to another place without notice? After thinking on the situation, it came to mind that there was no incentive for the executor to perform on the lease agreement because he was not tied to the lease.
To resolve this problem, and to create incentives for performance, I asked the executor be a co-signor on the lease. Otherwise, the only way I could justify taking the risk on this particular tenant was to require a significant security deposit well over the rent amount. The executor agreed that paying a large security deposit was undesirable. When I made the proposition about signing on the lease with the applicant, he hesitated and said he would call me back.
To me, this was where the rubber hit the road. Was he willing to place a bet on the performance of his family member and on his performance to pay rent by putting his good credit on the line while acting as a co-signor? Whatever answer I received, I knew that it would make or break this application. Ultimately, the executor called back and said he would be willing to co-sign. That was the act of confidence we needed and we signed the lease agreement, received a modest security deposit, and got them keys.
While investors are fearful of losing money due to tenants breaking the terms of a lease, so are tenants. Thus, writing lease agreements that balance the risks for both parties through the use of deposits and co-signors is one of the pillars of successful property management. Obviously, some tenants may not be able to afford the deposit amount that compensates for their risk factors. In these cases, it requires the tenants to save a little more before moving. Most don't. But, if they do, they find there are many more doors open to them. There are ways to create win-win scenarios for both tenants and landlords.
If you have income property or want to own income property and are considering hiring professional management, CONTACT ME, and lets discuss your property management needs.
Posted by Jeremy Peterson at 10:36 AM
Wednesday, August 27, 2014
The Wasatch Front Regional MLS has been a great tool. It has improved and grown substantially over the years and continues to do so. In fact, it appears it has ambitions beyond Utah or even the contiguous United States as this screen shot shows:
First Utah, next the Island of Sao Tome, then the world!
Posted by Jeremy Peterson at 1:21 PM
Monday, August 18, 2014
I just listed this giant home on Ogden's east bench for sale:
This home was constructed during the Craftsman era around 1910. It is over 3000 SQFT with a fireplace, refinished hardwood floors, an updated kitchen, and room to grow. The home has 4 bedrooms, 3 baths, an old-time one-car garage, and a brand new roof. The property was slightly modified in the 1920s to accommodate multi-family living. But today, it is permitted to be used as a traditional home. The quaint legacy kitchens remain as a reminder of the days of yore.
Historical research indicates this property was home to the Lewis Family when it was originally constructed. Newspaper clippings from 1912 show the residents signing petitions to support various political causes of their day. This home has a lot of history and would restore beautifully.
It is also priced very competitively. Here is video of the property:
If you are looking a lot of room on Ogden's premier East Bench neighborhood, this home is a must see. CONTACT ME to set up a private showing.
Posted by Jeremy Peterson at 1:52 PM
I just closed on the sale of this Historic Victorian home in the Lorin Farr neighborhood of Ogden.
This charming one level home is located at 484 Canyon Rd. just down the street from the rodeo grounds and water park. It was constructed in 1890's with some additional space added to the home in the early 20th century. The home had deteriorated quite a bit over the years until the sellers purchased it and did a complete overhaul of the home. They did some amazing work.
The home was listed on the 4th of July for $159,000. My clients had been patiently waiting for the right home to come on the market for the past year or so. We pounced and placed it under contract just 10 days after it was put up for sale. We offered and closed the sale at the ask price.
Congratulations to my buyers! If you are looking for a historic grade home in Ogden, CONTACT ME, and let's find a home that has the personality to match yours.
Friday, August 15, 2014
I just sold this home in Downtown Ogden.
This 2 bed 1 bath home is located at 2144 Adams Ave. in Ogden just a block away from the Ogden Temple site. The sellers asked me to list their property since they were being relocated out of state for work. We placed the home on the market for $84,900. Conveniently, I also had a client shopping in the market in this price range. I recommended the home to my client and we placed it under contract immediately after it came on the market at $83,500.
Unfortunately, later in the transaction we bumped into some title problems which were credited to sloppy work performed by the previous owner's escrow company during the sale of the home 10 years prior. The previous owner was erroneously showing up in the county records as having an ownership interest in the home. Our title company had to do some serious investigative work to find the previous owner. They found him in Park City. However, it turns out he was a real estate 'guru' who was in bankruptcy and also being hunted by the IRS. He refused to sign any paperwork out of paranoia of what the consequences would be. So, it took us a week or so to gently persuade this former owner that it would be in his best interest to authorize the paperwork. After he understood that he would be invoiced for all the legal fees incurred by our title company to complete a quiet title action, he agreed to fix the problem at no cost to himself by signing a simple quit claim deed.
Once that was done, we closed immediately. The home will be an investment property with our company providing property management services for the new owner.
Congrats to both my buyer and sellers on a win-win transaction! If you are looking to sell your home, or are in the market to purchase, CONTACT ME and let's see what we can do to meet your needs.
Thursday, August 14, 2014
I just sold this property in Clinton.
That is when my clients entered the picture. We had been looking for homes in North Davis County for some time and when this home came on the market we were there the first day to check it out. It turned out to be a perfect fit for my clients.
My clients were well prepared. We placed our offer at list price and put the home quickly under contract. Inspections were uneventful and we closed in a timely fashion.
Congratulations to my buyers! If you are in the market for a home in North Davis County, CONTACT ME, and lets find a home that is perfect for you too.
Posted by Jeremy Peterson at 7:55 AM
Tuesday, August 5, 2014
Landlords are exposed to many varied and interesting scenarios when it comes to their tenant's living arrangements. We have often rented to folks who are consolidating households where a parent will be sharing space with grown children or vise versa. In our 10 years of property management experience, we have rented to nearly every kind of family situation you can imagine.
Sometimes, we have two or three college students or unrelated individuals apply to rent a space. This 'roommate' scenario is often the most tricky to navigate. Since landlords cannot discriminate based on family status, our applications are blind to the social structure of the applicants. The only exception we have in law is related to the number of unrelated individuals that can live in one residence. In this case, the law allows cities to restrict the number of unrelated individuals living in a home to three.
So, assuming the roommates pass our credit and background screening, we have to be prepared for events that almost inevitably occur. In this kind of social arrangement, the tenants are sharing their living space with each other to minimize costs. But, each of the roommates is living their own lives and each of those lives may find itself on a trajectory that conflicts with the terms of the lease agreement or subverts their good relationship with the other tenants. Often, a roommate may find themselves "voted off the island" if they don't keep in good standing with their other cohabitants. Or, a roommate may fall in love and run off and get married to someone who is not on the lease agreement and cannot live there without violating city zoning restrictions.
In these kinds of cases, I have found it an advantage to keep an open mind to finding a substitute tenant when a void is created by a departing roommate. However, to prevent abuse of this rule, I often will charge the tenant that is leaving and the tenant that is filling the void a fee for the inconvenience. Historically this has worked well.
One of the things to consider is that it is very important to make sure that all the roommates ratify the changes that are being made. So, it is often necessary to sign new lease agreements with signatures of all parties. You can imagine that filling a vacancy created by a departed roommate with someone who does not jive with those remaining could create more problems than it fixes. Typically, we place the responsibility for finding a replacement on the tenant that is leaving. This keeps them motivated to find someone that will fit the mold and still pass our application process.
Roommate situations are by far some of the most complicated to manage. However, with some careful thought, it can be done. If you are considering renting your property and want an expert handling the details for you, CONTACT ME, and lets discuss what our brokerage can do for you.
Posted by Jeremy Peterson at 6:13 PM
Monday, August 4, 2014
I just closed on this very interesting short sale listing.
This property was a top contender in the gross-out category for craziest homes. It had been abandoned for 4 years and become a frequent den of iniquity.
Yet, the property has good bones and a lot of architectural appeal despite the abuse it's received. We listed the property at $44,900. In an indication of where we are in our current market cycle, we received four offers the first day this property went on the market.
It took us only 75 days to conclude the transaction with a cash buyer at $40,000.
Amazingly, the bank was owed $136,000 in principle and fees and they agreed to come down to $40,000 to make this transaction work. It is quite the write-down.
Indicative and congruent with the direction Ogden city is moving, the buyer will be doing a complete restoration of the property and transforming it back to its previous luster. It will be exciting to see what they do to this historic property.
If you are upside down on your home or our unsure if you can sell in today's market, CONTACT ME, and lets discuss your specific situation and how we can help you achieve your goals.
Posted by Jeremy Peterson at 10:17 AM
Thursday, July 17, 2014
I recently listed and sold this property:
This home is located at 3506 Eccles Ave. in Ogden just about a block from Weber State University. The owner of the home recently reacquired it after it was returned when the previous owner defaulted on financing provided by the current owner.
The property came back needing some significant TLC. The home had previously been sold in 2009 for a price of $92,000. You can watch a video tour of the property below:
We listed the property at a price of $76,900 and the seller expressed the desire to sell the property at $75,000 while providing seller financing. I placed the home under contract shortly after it came on the market but the first buyer felt the repairs were beyond what he wanted to do. A couple weeks later, we placed the property under contract with a second buyer and this is the contract that we just concluded.
The seller provided financing with a $7,500 down payment. Investment properties right now require 20%-25% down with conventional financing even if they need repairs. So, seller financing has provided the seller a quick way to liquidate their home and an investor the opportunity to conserve funds while they spend capital on improvements.
Congratulations to my buyers and sellers on a successful win-win transaction!
If you are looking for investment property or want to discuss the nuances of seller financing when selling your property, CONTACT ME, and lets have that conversation.
Posted by Jeremy Peterson at 9:26 AM