Things To Do In Idaho: The Blue Heron Inn

Our family recently escaped to Idaho for a much needed vacation over the Christmas holiday.  While we were with family, my wife and I decided to leave the kids with the grandparents and escape for the evening to a bed and breakfast.  Our search ended when we found the Blue Heron Inn.

The Inn is located just north of Rigby, ID on the banks of the Snake River.  Room rates are reasonable between $130-$180 per night and they include a delicious home made breakfast cooked by the owners.    

We happened to choose a less busy time of the year and a room was readily available.  Despite that, it didn't mean the setting was any less stunning.

Our room had an uninterrupted view of the Snake River.

The following morning we were rewarded with a beautiful sunrise and an outdoor temperature of -10ºF.  The river waters were choked with ice but their relatively warmer temperature put off steam in the ultra-cool air.

If you are looking for a great getaway in southeast Idaho, I strongly recommend the Blue Heron Inn. Booking reservations online is simple and the location won't disappoint.

INCOME PROPERTY: When Cash Cows Become Vicious Alligators

In 2008, I began attending regular lunches with a group of real estate investors in Weber County.  It was a great place to meet people with similar interests and share opportunities and best practices among each other.  I met many of my best and most loyal clients at these gatherings.

One client in particular moved here from California and began to aggressively acquire properties as the market turned downward.  I arranged for many transactions, most of them seller financed, as this particular client built a growing portfolio of properties.  This client indicated their plan was to cash flow the properties and invest in capital improvements to build equity.  That seemed to make sense.

However, by 2010, I distanced myself from this client as I learned more about their business practices and how they were operating.  They were obtaining funding from private investors based on the promise of what I considered unrealistic returns.  One particularly interesting 'trick' they used to facilitate their operations was to offer no-deposit lease terms to tenants.  The idea was that by reducing the deposit, they could increase rents proportionally or even more.  Since income property value is based on rent rolls, theoretically, this trick should increase the value of the property they owned.  If the value of the property was worth more, they could show this as an increase in equity and thus present it as evidence of their wise use of their investor-partner's funds.

The problem, of course, is that deposits are a natural and necessary part of responsibly managing property.  Also, according to the Rule of Three, there are natural limits to the price a tenant can pay in rent.  So, this client attempted to defy gravity, so to speak, by raising rents, dumping deposits, and hoping that everything would go well.

As you can imagine, they didn't go well.  When I spoke to the client's property manager in 2012, he indicated they were experiencing a 20% vacancy rate.  That was remarkable when the ambient market vacancy rate is just 4% for tenable property.  Whatever gains they were making on higher rents were being lost through punishing vacancy rates.

The other problem was that tenants had no incentive whatsoever to keep up the condition of the property.  When these tenants left, the client spent much more than was necessary to repair the units because the tenants abused the places without restraint.  And of course, since the tenants were typically low income, collecting from them for the damage was nearly impossible.

Thus, over a period of time, the business model began to unravel as investor-partners began to question their return on investment. Major cracks in the edifice began to show themselves in 2013.  At that time, this former client mailed keys back to the seller of a property they had bought via seller financing in 2008. Since that time, the former client's name has appeared on the Notice of Default list frequently as they have stopped making payments on their mortgage obligations.

Yet, in all the chaos that has descended on the portfolio of this former client, we made an interesting discovery.  Some of these properties in foreclosure have ended up with 2nd and 3rd mortgages on them.  Even more shocking, the loans came from private retirement accounts.  Finally, to ad insult to injury, many of these loans were made within weeks of the borrower defaulting on their first mortgage obligations.  It appears that while the Titanic was sinking, someone was been running up the tab at the bar.  In such situations, the private IRAs have no hope of recovering their investment as their collateral is wiped out at the foreclosure auction.  It is a sad sight.

Investors like cash cows that that produce profit each month after all expenses are considered.  The opposite of a cash cow is an alligator which is a property that needs to be fed money each month to keep operating.  It appears that this former client purchased what he thought were cash cows and through unwise decisions mutated them into vicious alligators.  These alligators have eaten their owner alive and it appears it was a feeding frenzy.  

           

INFERNO: Ginormous 1.3 Million SQFT Apartment Fire

I don't typically post about real estate events in other states.  But, after seeing photos of this event, I thought it was worth sharing.

Downtown Los Angels is experiencing a residential construction boom at the moment.  A particular developer has been building giant structures in interior urban neighborhoods.  One such project was called the Da Vinci.  It is/was a 1.3 million square foot giant.  Here are several photos.  The first is a rendering of what the finished project would look like.  The next couple are of it of it under construction.

Unfortunately, that much wood makes for excellent kindling.  Somehow, nearly the entire structure caught fire at same time.  Here is how that looked on the Los Angeles skyline.  More shocking photos can be found HERE.

Needless to say, authorities are investigating.

FOR SALE: Super State Street Commercial Building

I recently listed this perfectly located commercial building on State Street in Sandy, Utah.

Located at 10763 S. State Street, this property sits on .52 acres.  The structure is block construction and has over 3600 SQFT inside including an additional 400 SQFT of mezzanine storage.  The building currently houses an outdoor recreation and sporting goods business.  The front area outside the store is currently used as a display but it is permitted to be converted to additional parking if needed.

If you are interested in this property, CONTACT ME for more details and current pricing.  

Dirty Demolition: Lath and Plaster Removal

When we look at our walls, we don't typically think too much about what they are made of.  Contemporary construction uses a gypsum/paper sandwich that we call sheetrock.  But, before the mass production factories could spit out millions of square feet of gypsum board, home builders had to use another method to create flat and attractive wall surfaces.

The materials used up until the 1950's involved cedar lath and plaster.  Typically, two-inch cedar strips were tediously tacked to wall studs with small gaps left between them.  Then a base coat of rough plaster mixed with horse hair was laid over the cedar.  As the plaster squeezed between the lath, it created a grip to keep the plaster in place.  Then usually, a top coat of finer plaster was laid over the rough base coat to create a smooth finished surface.  That surface was typically wallpapered as was popular at the turn of the century.  

With remodeling older homes, removing lath and plaster is sometimes necessary to easily access electrical wires and plumbing. I recently had the privilege of removing some distressed lath and plaster in my own basement. 

 I only needed to remove about 80 square feet of ceiling plaster.  But, with us inhabiting the basement it was necessary to take precautions so I would not inundate our furnace with dust or have to give all our storage boxes a bath afterwards.  

Plastic sheets were hung to contain the dust. A dust mask and disposable clothes were necessary as well.  The ceiling came down in short order but the mess it created was immense.  I removed 8 large (strong 3mm thick variety) garbage bags of debris.  Each weighed in excess of 50 pounds.  

How yesteryear's craftsmen installed this stuff in the first place is remarkable to me. They had to be work horses to do the job, I am sure.  Fortunately, it doesn't take too much skill to take it down.  

  

Underneath that formerly white mask and formerly black hat, I am smiling.  

  

  

    

JUST SOLD! Arts & Crafts Duplex Restoration Project

I just closed on the sale of this property at 2539 Orchard Ave. in
Ogden:

This property was a wild ride for sure.  My client reclaimed the property from a previous owner after a default on a seller financed note.  The previous owner mailed the keys to us signed a deed giving the property back to my client.

That is when the fun really started.  We inherited a delinquent tenant who was notorious for mischief.  Prior to my client taking the building back, when the other unit in the building went vacant, she posed as the landlord and rented the unit out.  You can imagine the real landlords surprise when he discovered this sometime later.  However, for some reason, the previous owner never evicted this diabolically entrepreneurial tenant.

When we took possession of the building, this nefarious tenant asked that repairs be made to the property.  We instructed her that we could not make repairs but we were willing to let her break her lease and leave without consequence.  But, if she wished to stay, we would reduce the rents by $100 and she would be required to pay while she was there.  Unfortunately, she wanted repairs made and to live there rent free.  So, we proceeded with an eviction.

During this time we listed the property for $119,900.  We received an offer for $110,000 which requested seller financing on a 15-year note. But the buyer didn't want to move forward with the eviction being in process.  Later we received an offer of $100,000 from another buyer.  He didn't care about the ongoing eviction and moved forward.

All kinds of interesting things happened after that.  The furnace in the vacant unit was condemned; the tenant stayed until the sheriff showed up to lock her out; and, after leaving all of her belongings for us to store, her friends returned two weeks later to kick in the front door and steal a dresser drawer with some 'personal valuables' in it.  Despite all this, we were able to close the transaction for $97,000 on a 12-month seller financed note with the buyer placing $20,000 as a downpayment.

Despite the trauma, the home will doll up beautifully.  The buyer intends to restore the property as a home again.  Built around 1910, it was originally a 3,200 SQFT home for a well-to-do family in the area.  The original woodwork, fireplace, and lead glass are salvageable.  The hardwood floors can be brought back.  The community looks forward to seeing this gem of a home restored to its former luster.

If you are looking for a vintage home to restore in Ogden, CONTACT ME, and lets find one that will work for you.  I will handle all the sticky and unseemly transaction details so you don't have to worry.

Ogden's Architectural Dynamo: Leslie Hodgeson

The Standard Examiner recently had a front page write up on one of Ogden's most prolific architects, Leslie Hodgeson.  Ogden's cityscape is littered with monuments designed by the man. Interestingly, the lot our house sits on was owned by Mr. Hodgeson when it was purchased by Henry H. Hudman who built our home.  I am curious to find out if Mr. Hodgeson was the architect as well.

You can read more about the amazing Ogden structures designed over Mr. Hodgeson's 40-year career in this great photo illustrated write up:

Utah Architect Leslie S. Hodgson and the Architectural Environment of Early Twentieth Century Ogden Utah 19...

 

JUST SOLD! Art Deco Duplex

I just closed on the sale of this property with a buyer:

Located at 456 17th St. in Ogden, this property is an art deco masterpiece waiting for restoration.  The interior boasts original stain grade woodwork, light fixtures, fireplace, and even switch plates.  The property has been used as a rental property for years. 

The seller purchased the property in 2005 for $88,000.  Then in 2007, the seller attempted to flip the property for $143,000. That effort failed as the price was reduced to $135,900 in February of 2008.  In August of that year, the property was taken off the market.   

I year later in 2009 the property was relisted for $129,900.  After 12 months the listing expired in 2010.  The property was again relisted in March of 2013 for $105,000.  After 6 months of no interest, the listing expired.  

Finally, in July of 2014 the property was listed at $99,900.  My clients showed some interest in the property and in mid-August we submitted an offer $92,000.  The sellers sent us a counter offer of $95,000.  That was too high for us and so we let the offer lapse.  

After letting the sellers simmer in their juices for six weeks, we approached them again to see if they would reconsider.  We submitted a reinstatement addendum and changed the price to $93,000 with the seller paying $1000 in closing costs.  Because the property was teanant occupied, our inspections were delayed and we had to extend our contract deadlines.  However, once our inspections were complete we discovered some plumbing problems.  We requested a price reduction to $89,500.  The sellers countered and we settled on a purchase price of $91,000 and closed shortly thereafter. 

Congratulations to my buyers on the purchase of a fine period home.  If you are in the market for vintage house, CONTACT ME, and lets find a home that is right for you.  

       

Photo of the Day: Subtraction by Additions

I was cruising through town a while ago and stumbled upon this home.

Architectural features like dormers and a front porch can be a desirable thing.  But it is also possible for there to be too much of a good thing.  I think this is a good example.  I am  having difficulty comprehending what happened to this home.  Underneath all that is a cute cottage with a clipped gable roof.  It would appear to be that a series of successive additions have fully metastasized into a full blown case of Appendagitis.  Sometimes, things are better off left in their original form. 

PHOTO GALLERY: Whimsical Wacky Wonders

It has been a while since I have put together a photo gallery of oddities from the housing market.  So, for your amusement, here are some images you will remember.

Whoops! In an effort the kill the weeds in grass, this guy inadvertently applied weed and grass killer.  Of course, the weeds died...and so did the grass.  After applying it to two acres of his lawn, you can see the result.  To add insult to injury, the uneven application resulted in dramatic zebra striping.

This window was moved one foot to the left from its original location.  The brick arch is a feature that provides structural support.  You can see the brick separating now since the arch is missing its supportive leg.

 
Introducing the latest craze:  The Ovenless Kitchen.

    When your Victorian two story home has a fire and a contemporary 1920's style roof is built on what is left, this roofline is the result.  Art Deco meets Victorian in what we might call Vart Decorian.

 
Interesting artistic liberties were taken to augment this old home with unusual diamond shaped windows.

What compliments the opulence and luxury of new cabinets and granite countertops in a kitchen more than a frumpy old 1960's oven hood?

This is the first time I have seen the use of mirrors on the exterior of a home.  Interesting.

 
If you have ever wondered what it looks like to carpet your basement before you hang your sheetrock, here is an example.

Wallpaper can create subtle accents in a home...or completely overwhelming ones.

Whoa!

Sometimes wallpaper can make you feel like you are in some kind of carnival funhouse.

Need a toilet?  There's one in the doorless closet.  Just make sure folks look the other way while you take care of business.

FOR SALE: Big Brick Ogden Triplex

I recently listed this triplex for sale located at 452 5th St. in Ogden, Utah.

The building was constructed the early 1940's and consists of three units.  One is upstairs, one is on the main level, and one is in the basement.  The main level unit has two bedrooms with the upper and basement units each have one bedroom. The units are approximately 900 SQFT each and have an accompanying garage bay in the rear of the property.

The home has three electrical meters but the entire building is heated via radiant heat.  The boiler is fairly new and located in the basement.  The owner pays for gas and water expenses while tenants pay for their electrical service.    

I put together a double-speed video walk-through of all the units and the property so you could get a feel for the floor plan, condition, and use of space:



Overall, this property would make a good investment for both new investors or seasoned investors looking to add to their portfolio.  The building generates $1850/mo. in rent and generates an annual return-on-investment of 9.62% after all expenses including property management.

If you are interested in this property CONTACT ME for current pricing and details on income and expenses.

JUST SOLD! Renovated Historic Victorian

I just closed on the sale of this listing with a client:

We listed this property the last week in June for $144,900.  The property had been recently renovated from top to bottom and included granite counter tops, three new bathrooms and a more open floorplan.  Previously, the home sat vacant for many years while waiting for much needed improvements.  The improvements arrived, the home was marketed, and we began to get showings.  

After marketing the property for a couple weeks it became apparent that we were priced a bit too high.  We dropped the price to $139,900 to entice some more buyers.  A couple months passed as we received a moderate amount of showings.  Then, after Labor Day, we began to see increased activity.  We received an offer that my seller accepted but the buyers were unfamiliar with old historic homes and were uncomfortable owning a home with a rock foundation.  After the first buyers cancelled their contract, I was approached by some other buyers interested in the property.  A week after the cancellation, we had a new offer of $136,000 submitted to the seller with the request that the seller pay $4,800 in closing costs.  

The seller accepted this offer.  The buyers also used a $5,000 Own In Ogden grant to help facilitate the purchase.  The contract period was uneventful.  There were some minor nip and tuck repairs that needed to occur.  Once those were finished, my clients concluded the transaction very swiftly.

Congratulations to both my buyers and sellers!

If you are looking to sell your home, or perhaps you are looking to upgrade to a your next home, CONTACT ME, and lets make your next real estate experience a great one.  

VIDEO: Turning A Multi-Plexed House Into A Home Again

Ogden is the home to one of the largest inventories of historic quality houses in the western United States.  It was a railroad boom town up through the 1950's.  This boom, along with the economics of the depression, had an effect on many of the larger homes built at the turn of the century.  Due to the demand for housing, many of the larger homes in the community were divided into multi-unit dwellings.

While convenient at the that moment, altering the fundamental design of these properties had a negative effect on the neighborhoods that hosted them.  Also, since the structures were not originally intended for this purpose, the significant maintenance and upkeep required became a drag on owners and thus handicap the normal improvements you would typically see invested in properties over time.

Fortunately, Ogden is reversing this trend one house at a time.  One of my listings was formerly a "triplex" and is now for sale as a single family home.  However, when the home was remodeled prior to going on the market, the "units" were not eliminated.  Market feedback told us that this was a major impediment.  So, we took some measures to correct the problem.

Here is before and after video of the remodel work completed while eliminating the units:




These changes should make the home much more marketable.  If are thinking of selling your home and you need help figuring out how to prepare your property to sell, CONTACT ME, and lets make your home market-ready.

Just Sold! Excellent Roy Tri-Level Homestead

I just closed on this transaction with a client who was shopping for a home:

Located at 5540 S. 3200 W. in Roy, this home had everything my clients were looking for.

The home is a sizable 2725 SQFT with 5 bedrooms and 3 bathrooms.

My clients and I had been shopping for a home for a few weeks when this one popped up on our radar.  The property was listed at $215,000.  After viewing the home we decided to offer $210,000 using a VA loan and asked the seller to contribute $4,900 in closing costs.  Rather than countering, this seller accepted our offer immediately.  My clients were very pleased with the response.

Our contract time was a little longer than normal based on my client's needs, but Hazel Webb, our professional loan officer, made sure the loan process went very smoothly.  Ultimately we closed and my clients moved in to their new home.

 
Congrats to my buyers!  If you are looking for the perfect home for your needs, CONTACT ME, and let's see what we can find that is just the right match.  You can start your search HERE.