Monday, July 30, 2012

Victorian Tragedy: Care-Taking Calamity

I was driving by a property to check it out for a potential client.  After I did my walk around the property, I turned back to the car and cast my eyes upon this interesting dichotomy:

Both of these homes have the same floorplan and were built at nearly the same time in the 1890's.  Yet, today one is quite different from the other.  A home is meant to be much more than just stucco encased square footage as this interesting comparison illustrates.    

Before you decide to irrevocably denude your Victorian home of its ornamentation, contact me and let's review some affordable alternatives.

Friday, July 27, 2012

FOR SALE: Duplex Investment Property

I just listed this property located at 391 Downs St. in Ogden.

This building was constructed in 1998.  Each unit is two two levels and arranged side by side.  One unit has 3 beds, 2 baths, and a 2 car garage while the other is a 2 bed, 1 bath configuration with a 1 car garage.  The property is located just a few dozen yards from Heritage Elementary School.  It is also situated very  close to the Business Depot. 

Rents are currently $750 and $675 but could be raised.  One tenant has been in the property for eight years.  The owner has kept rents at their current levels since he purchased the property several years ago. 

This property would make an excellent tax shelter while preserving wealth and providing a positive return on investment.  If you are interested in learning more about this property contact me for details.  Please do not disturb the tenants as they are unaware the property is for sale. 

Tuesday, July 24, 2012

FOR SALE: Washington Terrace Tri-Level Estate Sale

I just listed this property in Washington Terrace:

This property is part of an estate sale.  It sits in a quiet cul-de-sac on a .17 acre lot not far from Rohmer Park.  The yard is fully fenced and has shade trees while the floorplan is tri-level with 1440 SQFT.  There is also a master suite with updated bath.

This will make a great first time home for someone.  If you are interesting in seeing the inside of this home, please contact me for details, current pricing, and an appointment.  

Restoring Old Houses: Decorative Woodwork and Roofing Redo

One of the challenges facing owners of old homes is the issue of handling repairs and upgrades while preserving the architectural integrity of their home.  Today’s new construction is performed to much lower architectural standards than in days of yore.

For instance, lets use our Arts and Crafts Style (aka Craftsman) home as an example.  Unfortunately, our home has been in need of a new roof for some time.  The original roof from 1908 was beautiful cedar shake installed on cedar slats.  Over 104 years, three other layers of shingle were added.  Another layer of cedar shake was installed along with two layers of asphalt.  The last time the roof was shingled was likely in the late 1970’s.  You can see the moss growing on the cedar shakes below.

One of the unique characteristics of our home (relative to new homes) is that it has crown molding adorning the fascia boards as an ornamental architectural feature.  Since the crown butts up against the roof, any roofer would have to work with it to have a nice looking finished product while maintaining the decorative ornamentation.

We called several roofers to bid the job.  One of the responses was disheartening:

“Oh, I can do that job no problem.  Let’s rip off all that ugly crown molding and just put some drip edge on there.  We can get’er done fast!”

Clearly, this roofer had no appreciation for old homes.  As I later confirmed, he mostly worked on homes built after 1960 and was only bidding my roof because he was starving at the time.  We passed on using this contractor.

Of the three bids we received for our roof, we ended up going with the highest bid.  The lowest bid was a 35 year old guy and a truck who had been roofing for 5 years.  He was nice enough but he was unfamiliar with working around the crown molding.   We ended up using Stuart Roofing which had 80 years experience as a family roofing business.  Their bid was only $2,000 higher and we felt they were by far the best value for our home.  We definitely got our money’s worth.

The tear off crews arrived around 6am one morning and had the roof torn of and dried-in after just two days.  They removed 60 yards of debris.  Amazingly, they used drop clothes around the home and didn’t leave a single nail in the grass or on our driveway.

Then it was time to pause while we dealt with our crown molding.  After searching for the right contractor for the job, we tapped Paul Martin to install new crown molding and paint our home.  We had Ellis Planing, on Wall Ave. and 26th St.,  custom mill our 4” crown out of paint-grade poplar.  Paul got to work priming, painting and installing the new crown.

After Paul installed the crown, he painted our dormers and the decorative woodwork around the home.  We asked him to leave the lower half of the front porch for us to paint as a Saturday family project.  Paul completed his work in just over a week and it was time to put the shingles on the home.

We chose a 40-year architectural asphalt shingle as we figured we didn’t want to install another roof on this home in our lifetimes.  We tossed around the idea of installing a cedar shake roof but the cost would have doubled our bid.  So, asphalt prevailed.   Three more days of work, and the project was finished.     

Here is the before and after video:

Tuesday, July 17, 2012

The Housing Bust Is Over

Interesting article from the Wall Street Journal this morning titled Housing Passes A Milestone.  Here are some excerpts:

 Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. "We finally saw some rising home prices," S&P's David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

-snip -

In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months' worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006.
The article also has some interesting charts showing just have far we have fallen and stopped falling.  The key is the "stopped falling" part.  It's tough to make confident business decisions involving real estate when prices are in freefall.   

I  suggested that Utah was at an inflection point last November when I wrote We're On the Cusp: Charts Show Prices to Rise or Massive Over Correction. The WSJ article also cites increases in sales year over year nationally.  You can see Utah's figures in RECOVERY! Housing Market Awakens From Coma.

Here is to light at the end of the tunnel!

Monday, July 16, 2012

JUST SOLD! Turn-Key Triplex Investment

I just closed on a listing for a client:

We listed this property back in May.  Shortly after putting it on the market for $149,900 we began receiving inquiries.  Several weeks later we received an offer. 

The buyers made their initial volley to us at $135,000.  That was quite a bit lower than our list price but one of our conditions was that the offer be written subject to inspection after acceptance of an offer.  We didn't want buyers disturbing the peace of the tenants during the marketing period.  Since the buyer's didn't know what the interior looked like, they aimed low.  I assured the buyer's agent of the condition of the interior and we counter offered them $145,000.  They accepted our counter.

The contract on this property went exceptionally smooth.  The buyers were well qualified and the appraisal came back with no problems.  The buyers were also satisfied once they did their interior inspection that the condition was what we had represented to them.  

Congratulations to my sellers on quickly liquidating their property!

If you are thinking of selling your rental property, contact me and we can put a plan together that is right for you.

Monday, July 9, 2012

Condo Rental Conundrum

I recently visited with a perspective client who wanted to rent their condominium.  They had purchased it several years ago during the housing bubble and owed more than it was worth.  Life circumstances compelled them to relocate and hence they opted to rent their condo out rather than damage their credit in a short sale or by strategically defaulting.

At the end of our interview we determined that the owner would net about $60 less than their mortgage payment.  They were fine with that.  However, as we were concluding an interesting question came up:

Would the HOA permit the owners to rent their condo?

Why would this even be a question?  Well, as it turns out many HOAs have rules limiting the number of rental units allowed in a complex.  In this particular case, this owner's complex limits rentals to only 10% of total units.  I have seen some HOAs do 20% but this 10% number was quite a surprise.

So what happens if you rent a unit that is unapproved by the HOA?  Well, a couple things could happen.  First, the HOA could use its delegated powers to take action against the owner.  This would create an uncomfortable and often untenable situation for the tenant.  Or, the HOA may do nothing.  This usually indicates management inefficiency at the HOA and would often be evidenced by a complex that significanly degrades in quality over time.

Regardless, it is a gamble for the property owner to rent their condo outside of HOA rules.  This could put the tenants at risk of forced departure and is unsound business in my opinion.  For this reason, I recommend that condo owners always follow HOA guidelines when renting their property.  It may not be the most desirable option but it avoids opening a can of worms that can put the owner, tenant, and property manager at risk.  

If you are thinking about renting your property, contact me, and we can put a plan together for you.

Thursday, July 5, 2012

Photo of the Day: Landscape Graffiti Let Down

While traveling on vacation I passed through Arco, Idaho.  I remember seeing these as a kid many years ago but their impact on me as an adult was more poignant this time. 

In a sort of parody version of "mountain letters" found above many cities across Utah, the residents of Arco have taken upon themselves the duty to paint the year of graduating high school classes on the cliff rocks above. 

Perhaps a more attractive and dignified tradition is in order?

Tuesday, July 3, 2012

Mt. Borah: Daunting Outdoor Adventure

I recently got together with some old friends while traveling to Idaho for vacation.  We have hiked some pretty significant peaks in the past and wanted to add another mountain to our list of accomplishments.  This year's goal: Summit Mt. Borah, Idaho's tallest peak.

Our journey began in Idaho Falls headed west on Broadway. We departed at 6:30am.

The territory east of Idaho Falls, at the center of the Snake River Valley, is beautifully desolate.  A huge swath of land is covered in lava formations.  Short grasses grow in shallow soil atop basalt rock that flowed as lava as recently as 2,000 years ago.  The mountain in the photo above is Big South Butte, which is really a dual lava dome formation. 

The road leads to the town of Arco where a right turn leads north to the town of Mackay.

A few miles north of Mackay and 2 hours from Idaho Falls, the rugged Lost River Range comes into view.

The turn off to Mt. Borah is marked by a sign on the highway.  The road turns east and is unpaved until it reaches the trailhead. 

The trailhead is well kept and has warning signs posted at the entrance encouraging hikers to be prepared.

The trail ascends very quickly and provides some beautiful wooded scenery.

At the halfway mark we stopped to eat some lunch and sit on some logs that had fallen conveniently close to the trail.  As soon as we sat down, this chipmunk pranced out of the brush and came within several feet of us.  Clearly, he knew that if he put on a show for us he would get some of our food.  He was correct.   

The trail from that point ascends above the treeline which is marked by the presence of a campsite made of old trees.  Then, the trail resumes in a punishing set of switchbacks.

 Finally, the trail reaches a crest and we were rewarded with beautiful views of Mt. Borah and surrounding peaks.  Little did we know the challenge that laid before us.  Our pre-hike research suggested that there would be some challenge crossing Chicken-Out Ridge (the snow cover ridge in the top right of the picture below).  However, we found out that what we read had really understated the difficulty.   

To get to Chicken Out Ridge, we had to follow the trail as it meandered along a rocky ridge line.  The people hiking the trail in the photo above give you a sense of scale. 

The trail then becomes lost in loose rock on the prelude to Chicken Out Ridge.  

Finally we reach the unrelenting incline and precipitous perch of Chicken Out Ridge.  It was approximately 2pm in the afternoon at this point.  The wind was blowing around 40 MPH and gusting higher at times.  The ridge narrowed to a point where it seemed there was only about a 4 foot wide section of rock to grab on to while climbing.  On each side there were drops of 800 to 1000 feet.

The wind blew away any confidence we had on chancing the narrow ridge.  I took the picture below at the highest point we reached on the ridge.  You can get a sense of the steepness of the climb in these next couple of photos.

If we had finished climbing over the ridge, the next challenge would have been a treacherous snow field that another experienced hiker told us was slushy and just as steep as the incline we were climbing.  A small trail had been dug into it but one slip would likely prove fatal.  You can see the snow field on the ridge in the picture below.

Although the walk across the field would have been brief, the fall to the bottom would not have been.

We decided that discretion was the greater part of valor and began our return to the trail head.  Meanwhile, we took a moment to admire Leatherman Peak to our south. We reached the trail head again around 5:30pm.

When we attempt to summit Borah again, we will bring crampons and an ice axe.  We will also try to come later in the season to allow the snow some more time to melt.