Inferno: The Apocolyptic End of Mercur, Utah

I recently purchased a book titled "Some Dreams Die: Utah's Ghost Towns and Lost Treasures" by George A. Thompson. Its an interesting historical read. The book is more of myth and legends about "lost" treasure than factual details but there are some very interesting tidbits in the book about old Utah settlements. Its just the right book for a history and real estate nut like myself.

One captivating story relates to the mining town of Mercur, Utah located south of Tooele. The place burned to the ground in 1896 just the day before celebrating Utah Statehood.

Mining was so productive that the city was entirely rebuilt. Here is a picture of it June 26, 1902.


Then, a careless flame caught the Preble Hotel on fire. Whoops!


This photo makes you thankful for modern fire codes. With this fire, the city was never rebuilt. However, the site is still mined today and what was once the former city site has been totally excavated for mineral extraction.

Investment Analysis: 718 21st Street Ogden, Utah

I recently concluded a transaction for a client looking for investment property to purchase. I thought I would run through this property scenario so you can see what kind of opportunities are in the marketplace.

I found the seller of this property while prospecting. She was a real estate agent from Salt Lake City who had purchased this triplex back in 2007 for $102,000. Despite being an agent, she had not yet listed her property for sale.

Her asking price was $109,000. Rents were disclosed as $425, $425, and $450 initially. Since the multi-unit market has been decimated by a lack of reasonable financing options, I asked the seller if she would participate in seller financing. She agreed to do so.

We offered the seller full price, a 10 year balloon, a monthly payment of $658, and with 10% of the purchase price down. This was all subject to her existing mortgage. Fortunately, she put 20% down when she purchased the property so we didn't find ourselves upside down with our new "wrap" mortgage. After a minor interest rate tweak she basically accepted these terms.

After our due diligence, we discovered the rents were really $325, $425 and $425. One of the units didn't even have a written lease. At this point, my buyer balked and excused himself from the transaction. Despite the lower rents, the building was still wildly profitable. Here is what kind of money my first buyer walked away from:


Not a bad return considering how low the rents were. I immediately presented the property to a more seasoned buyer. He closed on the property three days later.

The new buyer plans to raise rents to about $500 per unit. He is also going to make the tenants pay their own utilities. Here is the new buyer's profitability after raising rents to market levels:




The new buyer has about 80 units under management. Make that 83 now. And all this is possible because of seller financing.

Looking for an investment property with cashflow? Give me a call.

Photo of the Day: Vacant, Gutted, and Going

I wrote just a couple weeks ago about HUD funds being used to renovate commercial properties on the 23rd block of Washington Ave.

Well, things are progressing quickly. I cruised by and found the properties in this condition today.

Ogden Rising: Ogden High Restoration Fund

Another example of Ogden residents taking pride in ownership:

Video Courtesy of KSL.com

To Make your Contribution goto

www.RestoreOgdenHigh.org

ESTATE SALE: 2050 Jefferson Ave. Ogden Utah

This property is a real hoot. Only two owners in its entire history. My client's father built the home in 1925. The seller is 102 years old. Her father was a carpenter and did custom craftsman woodwork throughout the home. In fact, I have not seen another home like this in all of Ogden. The woodwork is completely original in form and the floorplan was ahead of its time. Its a great home. Just needs some paint and cosmetic work to shine.

The Ask Price on this home is $109,900 but we will look at any offer.

Davis and Weber County Unemployment Chart

House prices and markets are driven by income. Jobs and unemployment are highly correlated to the real estate cycle.

Hence todays unemployment charts. I created this chart to compliment the sales charts in today's earlier post. I believe Davis County's lower unemployment figures are playing into the sales statistics.


Enjoy your weekend!

August Sales Numbers

August numbers are out for Weber and Davis Counties.




Davis appears to be stabilizing and is at least flat year over year on sales.



Weber County is still below last years figures. I am expecting it to flatten out anytime now. Lets watch and see. There should be a burst of sales in November as the $8000 tax credit expires.

Restoration Project: 2569 Quincy Ave.

A former client called me last month and told me it was time to sell his home. He had bought it as a restoration project three years ago and seemed motivated to part with the home.

Unfortunately, his work and family schedule never permitted him to finish the job. All the demolition had been done, but nothing had been put back in its place.

The situation for my client was made worse by the fact that the kitchen and bathrooms were non-existent. That meant that it would be impossible to finance the home with a normal loan. We needed either a cash or seller financed transaction to take place.

Fortunately, one of my investor clients was in the market for just this kind of project. We were able to work out a win-win scenario where the sellers agreed to finance the propety for a year while the buyers fixed up the home.

The purchase price for this property was $87,000 as-is. (I sold it to my seller three years ago for $70,000.) With the basement finished and superior trimmings put into place, I believe the home will sell for somewhere in the $135K-$150K range. The buyers have asked me to consult with them on designing the restoration work.



Here is a photo of the kitchen. Not much to comment on here except that it needs to be put back together.






The living room has an original fireplace, bookshelves, and craftsman
windows.






And here you can see that the yard had not been mowed in about three years.

Ogden Rising: Washington Ave. Resuscitation

Ogden City has become the beneficiary of its "share" of the federal stimulus package passed by Congress. Although I am personally against Congress spending our tax money willy-nilly, I also believe that once a ridiculous spending bill is passed, it is paramount for local governments to spend the money in a way to maximize its effectiveness. Otherwise, communities may loose their competitive economic advantage to other communities by wasting the money on unproductive projects.

That leads to today's post. The city has allocated its $300,000 share of funds to rehabilitate and rent out dilapidated commercial buildings along the 2300 block of Washington Ave. This is a great use for the money. The prosperity induced by creating tenable commercial space will pay dividends for a generation.

According to the Standard Examiner, perspective tenants are already in negotiations to rent the property once it is fixed. Excellent news!