Seminar: Strategies for Growing Wealth 2012

Yesterday, I held a seminar at the Historic Ben Lomond Hotel for real estate investors.  We had a good turn out and I thought we all walked away from the event a little more enlightened after 90 minutes of conversation.  Here is the .pdf of the power point presentation I shared with the group.  I will be holding another meeting in June.  If you want notice of that event, be sure to contact me.
Strategies for Growing Wealth 2012

ILLEGAL: When Zoning Enforcement Bites

I recently placed this duplex under contract with a client looking for a great investment bargain.  The property has two separate 1 bedroom units in an up-and-down configuration.  The structure was build around 1950.  This was a bank owned property and our negotiations settled at a price of $57,000.

Once we got into our due diligence though, we had a major problem.  A phone call to Ogden City Zoning shows that this duplex does not have a non-conforming use certificate.  Although clearly a single family home that was subivided into a duplex decades ago, the previous owners did it without property application to the city.  Therefore, the property was not grandfathered the use.

Then, another client and I were shopping for a property and placed this triplex under contract:

This bank owend property had three mailboxes at the curb that are also decades old.  Yet, during our due diligence we discover that South Ogden City has only permitted the home for use as a duplex.  So where has city zoning enforcement been all these years?  Who knows.

The cities do appear to be in an enforcement mood however.  The glut of bank owned properties make it politically palatable to be so while not provoking the ire of owner occupants that would otherwise inhabit the property.  It's best to get the enforcement done while the property is vacant and the owner is a faceless corporation thousands of miles away.  

Workers You Can Trust: Jeremy's Preferred Vendors

As we come on the Summer season, repair and improvement work on homes tends to increase dramatically.  I have been busy already this last week ordering fix up on rentals.  For those of you looking for some good vendors, here is who I use:

Trusted Home Service Providers

If you have any question about who is the best fit for the job, contact me and I can let you know.  Happy rehabbing!

JUST SOLD! Updated South Ogden Breadbox Bargain

I just closed on this home with a buyer.

Located in South Ogden, his home was listed in early January for $139,900.  We placed on offer on the home for $130,000 and asked for $3,900 in seller paid closing costs.  The sellers counter offered at $135,500 and agreed to pay for my clients closing costs.  We placed the home under contract.

That is when our bizarre odyssey began with an appraiser who did not perform his duties well.  I will go into detail on his malpractice in another post.  Nevertheless, the appraisal came in at $126,000 even though surrounding homes supported a price closer to our agreed upon sale price.  Our formal dispute of the appraisal yielded a final value of $127,000.  We were forced to change the sales price and my client was compelled to pay for his own closing costs.  

The irony of the appraisal drama is that my client got an even greater deal on this home.  It is in superior condition and a great location.  Congratulations on a fine purchase.

The drawback to this situation is that the free market was not able to operate properly while this appraiser was involved.  Instead of the transaction being a freely negotiated win-win between the buyer and seller, it became a win-lose with the seller eating the loss.  Fortunately, there is some recourse to prevent this from happening again in the future.  Stay tuned for more of the story...

In the meantime, if you or anyone you know is looking to purchase or sell a home, contact me and let's look at the market in your neighborhood and put a plan together to meet your needs.

Things To Do In Idaho: Wolverine Canyon and Forty Horse Cave

While visiting family in Idaho we took some time to explore some old familiar places of my youth.  While my parents moved us around extensively as I was growing up, my extended family stayed put.  I was born in Idaho Falls, Idaho and that is the area where my extended family remains today.  My first home was in Shelley, Idaho and my grandparents lived there for decades until recently.  

That being said, it was time for me to show my wife and kids some of the fun things to do in the area that I experienced as a child.  Wolverine Canyon was our destination.

    
Our journey passes through 900 E. in Shelley heading south.  An old sugar factory is the landmark where you start heading south.  Along the way we stopped to photograph this cool old barn. 

The Blackfoot River cuts through old lava rock on the way into Wolverine Canyon.

On the way into the canyon we ran into this sign.  Apparently, the green energy folks and the pastural conservation crowd are wrangling with each other.

As much as I find wind energy interesting, I do think wind turbines would do a disservice to the vibe of this landscape. 

The canyon gradually narrows and provides a dramatic change in scenery from the endless wheat and potato fields of the Snake River Valley. 

A couple miles into the canyon you will come to Forty Horse Cave.  The name originates from a legend that some horse thief hid 40 of his ill gotten horses there to elude being caught.  Given the steep terrain, I doubt this legend is true.  Nevertheless, the hike is short and fun. 

We parked our car and headed up the hill.

You can see our car parked at the bottom of the hill.  The loose rock and dirt makes for a scramble on some parts of the hike. 

The cave itself is only about 25 or so feet deep.  It appears to be created by water erosion since there were many puddles in the dirt with water dripping from the ceiling of the cave.

There are two trails up.  We discovered the easier one on our way down.  The kids handled both of them well.

The geology and rock features make for an interesting hike.

The whole trip took us about 2.5 hours round trip starting from Idaho Falls.  It was great to share some of my childhood adventures with my own children.

If you are ever in the area and need directions on how to get there, let me know.

Green Homes: Scalable Self-Sufficiency?

While visiting family in Idaho I noticed an interesting curiosity at the end of my parent's street.  One of their neighbors has a conspicuous wind turbine dominating the landscape of their back yard.  As I roamed around the neighborhood, I noticed another unique feature.  The owner had built solar panels into the south exterior wall of his home.

When discussing the uniqueness of this home with my parents, they indicated that the whole neighborhood has a culture of self-sufficiency.  For instance, most of the homeowners in the subdivision also cultivate honey bees and large gardens.   

I tried to do some research online but I couldn't come up easily with a price tag for all this equipment.  As far as the energy use goes, I am curious if the turbine and solar panels simply reduce the bill or if they actually put electricity back into the grid.  The home is sizable so it would be interesting to find out.  Also, given the cost, would this be affordable to the average homeowner?

The other caveat would be concerns about zoning.  Putting a turbine on your property makes sense when you have 2.5 acres like this homeowner.  However, smaller lots would likely bump into zoning issues related to proximity and height restrictions.

So, the question for the green energy do-it-yourself marketplace is what kind of products are available to an urban homeowner looking to subsidize their power bill?  And, are the cost-benefits the same as a larger scale array like in the neighbor's home on my parent's block?        

It would be interesting to find out.

Things To Do In Utah: Snow Canyon State Park

We took some time off as a family to decompress and revitalize ourselves.  To help us enjoy our time, we headed to St. George.  While we were there, we took the kids to Snow Canyon State Park.

 

For those of you not familiar with the St. George area, the park is located about 8 miles north of town.  To get there, take the Bluff St. exit off I-15 and just head north while following the signs.  

The first stop was the Sand Dunes.  They are not so much dunes as they are patches of sand.  Regardless, kids love it.  

While the kids were digging in the sand, they uncovered these interesting greenish turquoise beetle grub.  They didn't like being in the sun and immediately burrowed back under the sand for cover.

 Our next stop was the Hidden Pinyon trail.

The kids were whiny and not in an adventurous mood.  Nevertheless, we were able to compel them to hike with their parents on this 1.5 mile loop.  

   

Just look at the enthusiasm beaming on those little faces (click to enlarge).  I guess we need some more lessons at the Peterson home on appreciation of nature.

 

Though short, the trail does provide some opportunity to escape and soak up what mother nature has to offer.  

The next time you are in St. George looking for something to do, be sure to check out Snow Canyon State Park. 

  

Lessons for Landlords: Aesop's Advice

I was reading through Aesop's Fables recently and fell upon this poignant story:

 The Farmer and the Snake 

ONE WINTER a Farmer found a Snake stiff and frozen with cold. He had compassion on it, and taking it up, placed it in his bosom. The Snake was quickly revived by the warmth, and resuming its natural instincts, bit its benefactor, inflicting on him a mortal wound. “Oh,” cried the Farmer with his last breath, “I am rightly served for pitying a scoundrel.” The greatest kindness will not bind the ungrateful.

 When screening tenants, I use objective criteria that I apply equally across all applicants.  I have found that this has prevented me from finding myself in the position of "pitying a scoundrel" and suffering the consequences of lost rents and damaged property as a result.  Truly, kindness does not bind the ungrateful.  As one of my investor friends once said, "No good deed goes unpunished."

So, as rental season kicks into high gear, make sure you stick to your established criteria.  Prospective tenants will feel they have been treated fairly and your business will be better off in the long run.

Photos Of The Day: Mosaic Tile Overkill

I was out shopping with some buyers when we walked into this ordinary red brick bungalow.

 

To our astonishment, our eyes were greeted with this mosaic tile pattern on the floor.

  

 Look at all those tiny tiles.  Somebody had a lot of time and energy to put all these into this pattern.

Then there is the random tile pattern in the hallway...

And the mini-tiles in the bathroom...

 

 

 
And then the wild subway tiles...
 

 

I could live without the subway tiles but I have to give the guy credit for doing some interesting work on the floor tiles.  Perhaps overdone for one small house but definitely done with craftsmanship.

TRENDS: The Changing Complexion of Utah's Population

I attended the 2012 WFRC Consortium on urban planning, transportation, and housing trends that are facing Utah.  Today's demographic trends will mean that policymakers and market participants will need to adapt to significant changes that are happening.  To set the stage for this, here are charts from the first presentation we heard from U of U economist Pam S. Perlich:
Consortium WFRC 2012 Data Slides

The meeting was informative but provided few answers to some of the compelling questions that this data poses.  Utah's housing market is built largely around the suburban model which is crafted around the automobile and large lots to accommodate large families.  This historically has been due to a cultural phenomena related to the predominant faith in the State.  Soon though, that will also be due in part to the cultural dispositions of immigrant families.  

So, with that in mind, can urban options be created that meet these needs?  Will market participants adapt to provide for this change?  Suburban consumers change their minds on urban living and move into the city?  Will developers innovate and pioneer new product to meet this need? Or, will city living simply change the size of families being formed?  How will low wage earning immigrants fit into this mix when urban real estate typically costs more than suburban space? This is the riddle that has to be solved.

Utah's population is getting older and more diverse.  By 2040 Utah's white population will be the minority.  We need to prepare for a seismic shift in how we have been planning and developing our communities.

I enjoy living in the urban center of Ogden.  Our family enjoys the amenities and walkability of our community.  For the future's sake, let us hope that more people find merit in these qualities as well.