FOR SALE: 3 Condo Seller Finance Package

I recently listed these units for sale:

These three condominium units are part of a four unit community located at 804 12th St. in Ogden.  The owner controls the HOA and maintenance expenses.  Rather than sell all three units individually, he is selling all three as a package and willing to seller finance the transaction.  The transaction will require 20% down to complete.  Here is a video tour.



The units were built in 1999 and are 3 bedroom 1.5 bath with detached 2 car garages.  Rents are $795 per month and could be raised.

Please CONTACT ME for copies of profit and loss statements and additional details.  
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What About Condos?

I have a few clients who are trying to sell condominiums or townhomes.  In light of that, I thought I would do some research into the market and see how inventories are shaping up.

Queue chart please...

This chart contrasts the inventory levels of 2 bedroom condos and 3 bedroom condos for various zip codes in Weber County.

As you can see, with the exception of 84405 (S. Ogden/Riverdale/Washington Terrace) the differences are quite remarkable.  This indicates that overall demand for 2 bedroom condos is still quite low.

Also 84403 (S. Ogden/WSU Area) and 84404 (Ogden north of 12th Street) both have elevated inventory levels for each category of condo.  Anything above 6 months is normally considered a buyer's market. 

The three areas that can no longer be considered buyer's markets are 3 bedroom condos in 84405, 84414 (North Ogden), and 84401 (Downtown Ogden/West Haven).

Condos have some unique qualities that can cause problems getting them sold.  The first is the HOA.  If it isn't FHA approved, that can cause the whole complex to be unmarketable to FHA buyers.  The second consideration is HOA dues which are an added expense not associated with single family homes.  Sometimes the numbers work for a purchase price but don't work for buyers after HOA dues are factored in.

Despite this, I have closed a number of condo transactions this past year using seller financing.  It is a very fast way to sell condo and has tax benefits as well.

If you are looking to sell a condo, CONTACT ME, and let's see if the market is right to sell your property.   

Boomerang Buyers Back From Foreclosure

There has been a sense in the housing market that things are improving.  While incomes are not increasing wildly, people have been holding jobs and credit has been steadily improving.  Since the housing crash is now almost four years behind us here in Utah, it is interesting to see what time has done for folks who went through foreclosure.

In many people's minds, foreclosure was the end of the world.  It held a social stigma as well as carried a significant financial penalty for anyone who experienced it.  Making payments on your home was just something that you did as an act of decency and honor.  So, when the economy turned on it's head and forced many borrowers into the uncomfortable reality that they could no longer afford their homes, it sent a significant portion of the homeowners into the emotional and credit "penalty box".   

Well, time heals all wounds and foreclosure is not the end of the world.  So much time has passed now that borrowers who foreclosed can now qualify to buy homes again, and at today's low price and interest rate environment.  They could be termed "boomerang buyers". The Wall Street Journal has this interesting quote in a story today:

Using the three-year benchmark it takes to get an FHA-guaranteed loan, in this year's second quarter there were 729,000 households that were foreclosed upon during the bust that are now eligible to apply for an FHA mortgage, up from 285,000 in the second quarter of 2011, according to an analysis of foreclosure data by Moody's Analytics. The company projects that number will grow to 1.5 million by the first quarter of 2014.

An curious side note about this phenomena is the effect it has on the rental market.  These borrowers were all forced into rentals when they lost their homes.  As a landlord, some of my best tenants were former homeowners.  They took pride in their rental units and knew how to care for space.  If many of them return to homeownership, this will put downward pressure on the overall quality of the tenant pool and require more rigorous screening on the part of landlords.  I have already begun to see some of this in our rental market today.  The question that remains is how soon will these former homeowners return to the market to buy again.  Even though they have paid the credit penalty, the emotional penalty is one they will have to overcome at their own pace and in an unknown time frame.  Market psychology will play a big role here.     

The news is a mixed bag depending on your perspective.  It portends increasing house prices and property values which makes most property owners happy, yet it means a bit more work for them to preserve the condition and rent revenue as tenant quality weakens slightly.  Let's keep our eye on the market and see how this shift manifests itself.

FOR SALE: Quiet Canyon Area Condo

I just listed this condo for sale:

It is located at 1305 Monroe Blvd just south of 12th Street.  This condo is about 30 minutes drive from Snowbasin Ski Resort and near the mouth of Ogden Canyon.  The unit is 960 SQFT and has a one-car garage and also a carport for parking.

 

The unit was constructed in 1998.  HOA fees are $120/mo. 

The unit is 2 bedroom 1 bath.

The unit recently had new carpet installed as well as fresh paint.  If you are interested in this unit, CONTACT ME for current pricing and details. 

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.

Ogden Valley Development: Edgewater Estates

One of Ogden Valley's most exciting development projects is currently being organized. Edgewater Estates will be located just west of Lakeside Village on lake front property and also at the base of the road to Snowbasin ski resort.  What makes this project so unique is its combination of residential, recreation, and retail commercial space.  It will be unlike almost any property in Ogden Valley.

Here is a layout of the master plan for the project (click to enlarge):

 

If you are interested in learning more about this up and coming development in one of Utah's best resort locations, contact me.

FOR SALE: South Ogden Short Sale Condo

I just listed this condo located at 1091 Country Hills Drive in South Ogden.  This one is unit #207.  List price is $49,900. 

The unit is 2 bedrooms and 1 bath and located conveniently close to Weber State University. 

The property was updated in 2007 and has granite surface countertops, updated cabinets and stainless steel appliances.

The unit has 1140 SQFT and one covered parking space.

This property would make a great investment or first time home.  Monthly payments are incredibly low.  If you are interested in learning more about this great opportunity, please email me or give me a call.

DEAD: HB 53 - Condominium Conversion Seismic Mandates

As many of you are aware, I am currently at the Capitol working on many issues affecting our state.  Part of my job is to sit on committees which "screen" bills to be heard on the House floor for a vote.

Yesterday afternoon a bill was presented to us which would require that owners of apartment complexes that were built before 1975 and wanted to convert the complex to a condominium form of ownership would be forced to conduct a seismic review and then upgrade their building to current seismic code.

      57-8-42. Seismic evaluation required if multi-level structure converted to
                 condominium -- Requirements if structure not in compliance.
                     (1) If a structure that is two or more stories high and was built before 1975 is converted
                   to a condominium under this chapter, the structure's owner shall cause a seismic evaluation of
                   the structure to be performed by a person licensed as a professional structural engineer under
                   Title 58, Chapter 22, Professional Engineers and Professional Land Surveyors Licensing Act,
                   to determine whether use of the structure as a condominium would result in an unreasonable
                   safety hazard to its occupants.
                       (2) The person performing the seismic evaluation under Subsection (1) shall perform
                   the evaluation according to standards and requirements set forth in the code, as defined in
                   Section 58-56-3 , of the applicable compliance agency, as defined in Section 58-56-3 .
                      (3) If the seismic evaluation under Subsection (1) indicates that the structure is not in
                   compliance with an applicable standard, the structure's owner shall, before occupancy of the
                   converted condominium:
                       (a) review the noncompliance with, as applicable:
                       (i) the county in whose unincorporated area the converted condominium is located; or
                       (ii) the municipality in which the converted condominium is located;
                       (b) correct the noncompliance; and
                       (c) comply with applicable county or municipal requirements, including:
                       (i) submitting the converted condominium to an inspection; and
                       (ii) obtaining a required approval or permit.

You can probably guess how excited I was to hear this piece of legislation come forward.  The sponsor of the bill had no idea what costs this would impose on owners or what affect it would have on the marketplace.  The bill mandated seismic compliance regardless of improvements and was based simply on a change in ownership.   For those of you interested in hearing the discussion (and my comments) you can listen to the committee hearing HERE.

In the end, we poked so many holes in this proposal that this particular legislator killed his own bill by adjourning the meeting before we could vote on it as a committee.