JUST SOLD! Seller Financed Fixer-Upper Breadbox

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.

Community Improvement: Painting Ogden's Historic Gems

With the Ogden Temple scheduled to open soon, Ogden's historic neighborhoods have been buzzing with service projects to give the neighborhoods a fresh face. We recently participated in a one such project.

This property is located on the 21st block of Adams Ave.  In this photo, it had been power sprayed in preparation for our work.  The cream and white two tone paint job was sprayed on about 10 years ago.

Here I am scraping the gable.  It was amazing how much paint scraped off.  The previous paint job clearly just sprayed over any loose paint that existed.  We spent quite a while making sure we got rid of any flaking paint.

Unfortunately, we also discovered that the paint on the brick was oil based.  We had purchase latex paint.  Since they were incompatible, we had to apply a bonding primer to the whole house in preparation for our colors.  This slowed us down quite a bit.

Finally, we were able to start applying colors.

There was quite a large group of volunteers that came to help bring the project together.  Even the kids were helping.

The final product turned out very nicely.

The Rental Rule of Three

I have many landlords ask me about how we keep our rental properties full and running smoothly.  No doubt, keeping a rental operating trouble-free can be a challenge at times.  However, my experience has taught me that most of the problems can be avoided at one critical junction in the property management process.

Most landlords think that vacancy is their biggest challenge.  While vacancy certainly takes the 'income' out of income property, this focus on vacancy often leads to rash decision making when it come to tenant screening.  These hasty decisions often lead to property damage, unpaid rents, and expensive evictions.

To avoid these pitfalls, I follow a hard and fast rule on my rental properties.  To qualify to rent, all of my tenants must have a verifiable monthly household income (i.e. social security payments, salary, commission, child support, etc.) that is at least three times the monthly rent amount.  So, if I want rents of $900 per month, my tenants would need to earn at last $2,700 per month to qualify.  The math is pretty simple.

While this rule is not a guarantee of perfect performance, following this guideline avoids many of the problems created by ignoring natural economic laws.  In today's economy, people can afford to pay about 1/3rd of their income to housing.  However, I have seen situations where tenants pay half of their income towards rent.  When I interview landlords about how things are going with these tenants, inevitably they admit they receive rents late, that the tenants have vacated early and unannounced, or there is some other ongoing and time consuming crises.  

While the tenant may technically owe the landlord what is due in the lease agreement, collecting on debts from broken leases is a tedious exercise at best.  After all, you can't bleed a turnip.  I have found it is better policy to help tenants avoid placing themselves in such undesirable situations...especially when the outcome is very predictable.  Everyone benefits when this is the case.

So what does a landlord do if everyone who applies to rent cannot meet the Rule of Three criteria?  In these cases, I have found that it means the rents are too high.  I have often lowered rents to accommodate this rule and make sure my tenants have enough wiggle room to pay rents even if they get sick or have a financial setback.  The last thing I want is a flu to put them permanently behind on rents and ultimately usher in their early departure.

So, if you are a landlord looking for some guidance on how to run your income property business, the Rule of Three is an important and wise place to start.

Otherwise, if you are looking for superior property management services to maintain and protect your income property, CONTACT ME, and lets talk about what we can do for you.