Monday, September 29, 2014

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.

DIVIDED HOUSE PRICES: Ogden's Trolley District and East Bench Neighborhoods Converge

Ogden's core historic neighborhoods have historically been divided by a great imaginary barrier.  Starting 60 years ago, Harrison Blvd. was seen as a partition that separated Ogden's upper middle class community from the supposed unseemly riff-raff that lurked on the opposite side.  As Ogden's neighborhoods matured over the decades, this perception became self-reinforcing and self-fulfilling.  Ultimately, by the time our family moved into Ogden in 2004, it was common knowledge among anyone living in Weber County that this boundary existed.

To illustrate how this impacts the real estate markets, lets take a look at a history of house prices in these two distinct neighborhoods. Here is a snapshot of the Trolley District which is bounded by 20th St. on the north, 30th St. on the south,  Harrison Blvd on the east, and Washington Blvd. on the west.

As you can see, homes are selling on average today at a super affordable $56/SQFT.  Prices have recovered nicely from the market trough experienced a couple of years ago.  There is a broad noisy range of data though due to the condition of the properties.  Nevertheless, our trendline gives us some idea of the direction of prices.  Now lets take a look at the East Bench as defined as homes east of Harrison Blvd, south of 20th St. and north of 36th St.

As you can see here, prices have also recovered nicely from the recession bottoms but they still are quite a ways below their pre-recession peak.  Today's East Bench homes are selling around $78/SQFT with a lot less variance in the recent figures.

On average, today's homes east of Harrison Blvd. are valued 39% more than homes west of Harrison Blvd..  This confirms the market stigma and its impact.  Yet, the most remarkable trend we find is when we study the difference in figures between the sales of the Ogden Trolley District and the East Bench over time.  Surprisingly, it would seem there are forces at work eroding the great divide that has bifurcated Ogden for so long.

As you can see, over the past seven years, the difference in average sales prices between the two neighborhoods has been declining.  Although the data is noisy, there is definitely a clear trend.  If the trend holds, in the next 15 years, the East Bench and the Trolley District will be at parity in value.  If this happens, it will be a day that many Ogdenites thought they would never live to see:  A day when it is perceived to be as respectable to live west of Harrison Blvd as it is to live east of Harrison Blvd.  I am optimistic we will see it sooner than we think.

Two forces, I believe, are at play which are pushing price trends in these two neighborhoods.  First, price increases in the East Bench are slowing due to the aging of the homes and their occupants.  Many homes on the East Bench are owner occupied and have not been updated in decades.  When the owners sell or their estates are liquidated, this means that the sale prices are hampered due to the condition of the property.  The inherent value in the neighborhoods prevents investors from swooping in to rehabilitate the homes for a profit.  Thus, the market is dependent on owner occupants and this keeps the market prices stable but limited from vaulting to new heights. Since many owner occupants lack the skill sets or capital to improve their homes in a significant manner, this means it may take a little longer for improvements to occur in some of East Bench homes.  It is a function of the where the neighborhood is in its life cycle.   Meanwhile, the Trolley District saw home prices collapse in the past and the condition of homes was so bad that a significant portion have been completely renovated from top to bottom.  These homes are being put in "like new" condition by investors which makes the homes more attractive to home buyers and thus helps their relative price points.

So, while the East Bench is definitely valued more, it is appreciating more slowly than the Trolley District, which has accelerated in its price increase.  Let's keep our eyes forward to see how the next decade reshapes the landscape of Ogden's neighborhoods. Ogden's two great central neighborhoods are headed toward a more vibrant and unified future.    

Thursday, September 25, 2014

FOR SALE: Seller Finance Ogden Arts and Crafts Duplex

I recently listed this duplex property for sale in Ogden:

This property is located at 2539 Orchard Ave.  It is just behind the Jefferson Historic District.  The home has been subdivided into an up and down duplex format.  The whole building is approximately 3100 SQFT.  Each unit is 2 bedrooms and one bath.  Laundry facilities are in the basement and shared by the tenants.  Rents would be $550 for the upper unit and $650 for the lower unit.  The gas meters are separate and there is one joint electric meter.

The unit does have some amazing architectural features that make it shine.

The seller is offering seller financing with 10% down, and a $500 monthly payment on a 3.75% note.  If you feel this property would interest you, CONTACT ME, and we can discuss details.

Wednesday, September 24, 2014

Standard Examiner 1911: This Old House Advertisement

Occasionally, I will do historical research on who owned a home in the past or who built a home.  It is kind of like doing real estate genealogy.  One of the fun parts is going back through old newspapers and finding real estate ads.  Here is one such ad I found in the Standard Examiner from around 1911.

There are a few very interesting things about this ad.  First, the phone numbers only have 3 digits.  It also appears that having your home connected to the sewer line could potentially double its price.  Also, it appears that homes in the 'Railroad District' were in demand.  We know that is a non-starter in today's market.  Fun tidbits.

If you are interested in doing your own historic newspaper research, you can find an excellent archive at Utah's Digital Newspaper Database.

Tuesday, September 23, 2014

FOR SALE: Ogden Cottage Short Sale

I recently listed this property for sale:

This home is located at 1118 22nd Street in Ogden.  The includes 2 bedrooms and 1 bath and has a nice one level floorplan and a formal dining area.  The living area is about 1100 SQFT.

The owners are looking to simplify their lifestyle by moving into a condo.  The home does need some minor TLC.

The house comes with a 2 car detached garage in the rear with access from the abutter's alley.

This home is being sold as a short sale. If you want current price information or you are interested in viewing this property, CONTACT ME, and we can set up a private showing.

Monday, September 22, 2014

Super Split-Entry Shapeshift Makeover

The three most popular floorplans in Utah are the Split-Entry, the Tri-Level, and the Rambler.  The split-entry floorplan has its own set of drawbacks but it continues to be built as a format for starter homes even today.

Roy, Utah saw a slew of these inexpensive split-entry homes constructed in the early 1970's.  My wife and I lived in one when we were first married.  Back when these homes were built, most had flat, or very flat, roofs.  For obvious reasons, these roofs didn't last very long and required trusses to allow water to shed from the building.  Yet, some homes today still have their poorly designed roof structures.

While in Roy this week, I stumbled upon the most amazing remodel of a split-entry home that I have seen.  First though, here is a home a couple doors away that closely represents what the home would have looked like when it was originally constructed.

As you can see, it is pretty unremarkable.  A flat roof and a token awning gracing the front of the home.  Here is the super remodeled version of this same kind of home I found:

What a remarkable transformation in this kind of home!  The roof and awning have been converted to a hipped prairie school style.  The exterior is now hardiplank-style siding and the windows have been cased.  It is amazing what some simple changes in materials and craftsmanship will do to a home.

Thursday, September 18, 2014

PHOTO COMPARISON: The Power of Paint

I visited a property today to identify some repairs that need to be made.  The neighborhood is composed of turn of the century Arts and Crafts style homes.  Sometime in the 1920's, the home I was looking at and the home next door had work done which required that clapboard exterior walls be built.

The one property looks like this:

If you look carefully, you can see some old paint under this nice recent coat.  Nevertheless, it looks clean and to be in good repair.  The wood has withstood the test of time.

Now, lets take a look at the construction next door to see how it has fared:

Whoops!  It appears that this wood didn't receive the same attention as its neighbor just a few feet away. Years of naked exposure to the elements have taken their toll on this wood.  This structure will need to be resurfaced entirely.

So, the moral of the story is if you have exterior wood surfaces that need to be painted, do it before mother nature robs you of the necessity.

Wednesday, September 17, 2014

FOR SALE: Spacious Ogden East Bench Mid-Century Rambler

I just listed this property beautifully located high on the East Bench of Ogden.

This beautiful mid-century rambler is over 3300 SQFT with 6 bedroom and 3 baths.  It has 2 garages attached as well as a detached 2 car garage.  It also boasts a beautiful pool.  The home is located at 2735 Buchanan Ave. in a highly desirable neighborhood at the mouth of Taylor Canyon.

The home is designed with an open floorplan and plenty of windows to enjoy the mountain and valley views.

Here is a video montage of the property:

The pool is easy to maintain and comes with all the equipment.  The large flat screen TV in the basement is also included in the sale.

For current price information and other details, CONTACT ME.  This home will go fast so don't delay.

Tuesday, September 16, 2014

FOR SALE: Ogden Canyon Condo Short Sale

I recently listed this condo property for sale near the mouth of Ogden Canyon.

Located at 1639 E. 1470 S., this unit is 2 bedroom 1 bath with 1672 SQFT.  The complex is tucked away on the side of a gentle slope north of 12th Street.  

 HOA Fees are $145 per month.

The unit comes with one assigned covered parking space and one uncovered space.  The unit was constructed in 1985.  Some TLC is required.  If you are looking for a great affordable first time home or a project investment property to repair and resell, this may be right for you.  Presently, the HOA has restrictions on rentals in the complex.  CONTACT ME with question or current short sale status and price.

Friday, September 5, 2014

JUST SOLD! Bargain West Haven Townhome Short Sale

I just closed on this property I listed in West Haven:

This property has presented quite the experience.  My clients had purchased the property back in 2008 shortly after the property was built.  Later, they refinanced and somehow the property appraised for over $135K, which the bank quickly lent my clients.  Fast forward to October 2013 and my client's finances were hamstrung by an awkwardly large house payment.  The approached me and asked if we could do a short sale.

A quick glance at the market showed that their unit was worth $125k in good condition.  But, it needed some minor  TLC.  Also, in order to compensate prospective buyers for the hassle of having to deal with a short sale, we decided to discount the price a little further list the property at $115,000.

The short sale process proceeded as expected and we received a few offers.  It took us several months to get an approval and in April we finally received one.  At that time we began to work towards closing the purchase.  However, in a weird turn of events, the buyer forgot to pay her student loans during the contract period and her credit was destroyed mid-process.  It was a serious disappointment.

So we put the home back out in the market.  We reduced the list price to $109K to solicit another offer.  We recieved one and again mid-process, the buyer couldn't quality for a mortgage.  This was getting to be a very annoying pattern.

After a quite month or so, we reduced the price again to $105K to attract another buyer.  Finally, in late July we received a cash offer.  They offered $106K.  The bank took a couple months but ultimately approved $108K as the final price.  The buyer agreed to pay that amount and we closed quickly on the property.

If you are needing to do a short sale on your property, CONTACT ME, and lets review some scenarios that may help your situation.

Tuesday, September 2, 2014

Rental Deposits: Making Tenants Place A Bet On Themselves

When I talk to folks about owning and managing income property, many times they look at me like I am taking about the nuances of quantum physics.  I know just a little bit about quantum physics, and trust me, property management is a lot less difficult to understand.  In most cases, people simply don't know what they don't know about managing property.  Hopefully, sharing some of my stories with you will cast some light on the subject.

Fear is a great detriment to many people wanting to invest in real estate.  There is a fear of loss and a fear of the unknown.  It is true that there is no sure fire way to prevent undesirable outcomes in regards to unpaid rents or damaged property.  However, there are things that can be done to hedge against those risks and make them less likely.  Understanding the role of risk and then compensating for it is the key to success in owning income property.

Much of the success or misery experienced owning income property will be related a tenant's performance on a lease agreement.  The three considerations landlords care most about are:

1.  Will the tenant pay rents on time and in full?

2.  Will the tenant treat the property in such a way that it will be returned in the same condition in which it was delivered to them?

3.  Will the tenant be a respectful neighbor to others (especially if living in a multi-unit building)?

I came across an interesting situation that caused me to stop and think for a moment on how to  arrange the lease agreement for a prospective tenant.  I recently recieved an application for an apartment.  The application was delivered to me by a family member who explained that he was the executor of this applicant's finances and would be paying the rent.  The applicant was disabled and required assistance with paperwork and other personal record matters.  He also explained that the applicant had been notified by the previous landlord that their lease would not be renewed due to a problem with a misbehaving roommate who has since left the scene.  The income of the applicant was just barely below the required amount for an unconditional qualification.  When we pulled credit, there was a litany of medical collections.  Yet, the applicant didn't smoke, nor had pets.

This was the first time I have bumped into an executor situation with someone besides the tenant being in charge of paying rent.  I felt uneasy with the application.  I could understand the medical collections because that can happen to anyone who is uninsured.  The roommate issue was a concern but apparently that relationship had ended and that person wouldn't be around anymore.  But, what would happen if the executor decided he didn't want to pay rent or wanted to pick up this applicant and move them to another place without notice?  After thinking on the situation, it came to mind that there was no incentive for the executor to perform on the lease agreement because he was not tied to the lease.  

To resolve this problem, and to create incentives for performance, I asked the executor be a co-signor on the lease.  Otherwise, the only way I could justify taking the risk on this particular tenant was to require a significant security deposit well over the rent amount.  The executor agreed that paying a large security deposit was undesirable.  When I made the proposition about signing on the lease with the applicant, he hesitated and said he would call me back. 

To me, this was where the rubber hit the road.  Was he willing to place a bet on the performance of his family member and on his performance to pay rent by putting his good credit on the line while acting as a co-signor?  Whatever answer I received, I knew that it would make or break this application.  Ultimately, the executor called back and said he would be willing to co-sign.  That was the act of confidence we needed and we signed the lease agreement, received a modest security deposit, and got them keys.  

While investors are fearful of losing money due to tenants breaking the terms of a lease, so are tenants.  Thus, writing lease agreements that balance the risks for both parties through the use of deposits and co-signors is one of the pillars of successful property management.  Obviously, some tenants may not be able to afford the deposit amount that compensates for their risk factors.  In these cases, it requires the tenants to save a little more before moving.  Most don't.  But, if they do,  they find there are many more doors open to them.  There are ways to create win-win scenarios for both tenants and landlords.

If you have income property or want to own income property and are considering hiring professional management, CONTACT ME, and lets discuss your property management needs.