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Changes might be coming… and they aren’t good.
Buried in the 1500 page bill is a very long section on the Retrofit for Energy and Environmental Performance program, REEP for short.
Category Archives: investment
REEP and Cap & Trade
- Thursday, 02 July 2009 23:57
- Written by Lane Bailey
- 0 Comments
Deals…
- Tuesday, 23 June 2009 23:46
- Written by Lane Bailey
- 0 Comments
- Image by Phil Dragash via Flickr
There are some great deals out there… I’m working on a couple of them with buyer clients right now. And many of them are not hanging around for long.
Financing isn’t going to get cheaper, and in many cases, waiting for the price to drop further could be counter-productive if the cost of financing increases…
Just food for thought.
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How much earnest money is enough?
- Friday, 19 June 2009 23:14
- Written by Lane Bailey
- 0 Comments
- Image by DavidDMuir via Flickr
This is a common question from both buyers and sellers…
For Sellers…
The object is to get enough that it would be painful for the buyers to walk away without cause after the contingencies are settled. For instance, $100 is obviously too low. Just about anyone would be willing to walk away from that without too many worries.
But, what about $2,000? Well, if it is a $200,000 property, that might be a substantial amount, but for a $2,000,000 property, maybe not so much.
The bottom line is that you can ask for more if the amount offered isn’t realistic. With VERY few exceptions, the buyer will need to put up a minimum of 3.5% as a down payment on the property in order to get financed. The earnest money WILL be credited to them at closing, so 1% doesn’t seem that onerous… but some buyers may balk.
For Buyers…
Actually, I recommend the same amount in most cases. There are some exceptions, but not many. Keep this in mind, the idea is to make the seller comfortable with the transaction. It IS part of the negotiating strategy. And since the object of the buyer is to get the best price for the property, making the seller comfortable is a big part of that… and assuring the seller that the buyer will actually close WILL make the seller more comfortable.
I have had sellers ask for amounts that I thought were onerous for the buyers, but not that often. Most agents don’t think about it until there is a problem. But, the sellers generally DO think about it when they are looking at multiple offers, or they have EVER had a buyer fail to close.
In both cases we aren’t talking about failures because of inspection issues or other cause.
This specifically relates to contracts with contingencies released. When there are hidden issues uncovered during the inspection, the buyer has a right to drop the contract (assuming it is written that way). But if any financing and inspection contingencies are cleared, and the buyer backs out without a valid reason, the seller HAS been damaged. The property has been removed from the market, and in many cases it is stigmatized… other buyers may assume that the reason for the failure was related to the property’s condition.
In that case, the seller should be compensated for their damage…
Also, remember that often the seller HAS the right to sue the (former) buyer for damages. While we often assume that the the buyer is only on the hook for the earnest money, that isn’t actually the case… the buyer could be on the hook for more.
from LilburnDwellings
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What makes a Garage “Inspirational”?
- Friday, 12 June 2009 12:06
- Written by Lane Bailey
- 0 Comments
- Image by genevievepan via Flickr
There are basically three kinds of garages…
- Places to store stuff
- Places to work on stuff
- Places to display stuff
Most garages are storage sheds. They hold tools, lawn mowers, cars, sporting goods, cleaning supplies and overflow food in the chest freezer.
The next most common group are working garages. Whether it is building a hot rod or keeping the family rides in tune, they have tools and parts and more tools.
Finally, there are the showplaces. These are less garage and more gallery of mobile art. And some of them are incredible. They are limited only by imagination and budget… and some are limited much at all.
I’d love to have one of each…
But what makes it inspirational?
I would say that what makes it inspirational is as different as the person that is inspired. For me, a garage that allows me to get dirty and throw some sparks is what inspires me. While I would love to have an incredible showroom for a bunch of cool toys, I love to get out there and weld and grind and paint and wrench. I like not having to worry about dropping a wrench on the floor and chipping the marble or scarring the textured walls.
But, for others, having someplace that looks like a stable to house their prancing horses or a full-on NASCAR shop is their dream, with checkerboard tiling and powder-coated tool benches.
The first step… Figure out what you want. Are you going to store, build or display?
The second step… Decide on your style. Do you like acid-etched, polished concrete? Epoxy Coatings? Powder-coated cabinetry? Stained wood cabinets?
The third step… Make a budget.
The fourth step… Make a plan. Even with a modest budget, there are ways to minimize the out-lay while maximizing the impact. Like Craigslist… Discarded kitchen cabinets are a great way to add attractive storage to the garage. And everything doesn’t need to be done at once, it can be done in stages.
The fifth step… Pull it all together.
A couple of tips…
- If you are going to work in the garage, put anything on the floor on wheels. If it is mobile, you can move it to clean behind it.
- If it isn’t on wheels, get it off the floor. If it is off the floor, you can sweep and/or hose under it. Wall mounted cabinetry is very cool.
- Floor coatings don’t stand up to welding and plasma cutting. Stick with polished or acid-etched concrete.
And here is a cool place to check out… DreamGarage.com
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Can a $29,000 Home be overpriced?
- Thursday, 04 June 2009 23:44
- Written by Lane Bailey
- 0 Comments
- Image by lane.bailey via Flickr
I wandered out to look at some investment properties this afternoon… One of the properties was priced at $29,000… in a neighborhood of $100,000+ homes. In fact, this very home had sold for over $110,000 in the last couple of years.
Could it be overpriced at $29,000?
Yep.
The funny thing is that the wholesaler says it needs like $12,000 in repairs… Maybe if you pick up all of your materials from the curb after they are tossed out of nice homes… I would put the budget at closer to $40,000. and that is assuming that the mechanicals and structure are ok, and that isn’t a safe assumption.
Here is a list:
- Gutters
- Roof repairs
- Front door and casing
- Enough of the siding to make it worth replacing all of it
- Ditto for the windows
- All of the flooring. That which is still there is nasty
- And every wall and ceiling needs paint
- Rebuild the rear deck
- About 20 sheets of drywall
- All of the appliances
- EVERYTHING in the kitchen… like the cabinets and counters
- Landscaping
- Un-convert the garage from its bonus room conversion
I would peg the property at a value more in line with $15,000. An investor will need to realize a healthy profit AND have enough room for hidden defects.
- Mold abatement
- HVAC replacement
- Structural repairs
- Foundation repairs
I’m not saying that those are probabilities… just that they are possible.
An end-use buyer would face similar issues, AND they will need to be able to finance it without FHA support, since it probably wouldn’t qualify. It also would have trouble with many renovation programs… so cash might be in order for renovations.
But for the right buyer it could be a great deal.
I did run across another property that looks like a much better deal…
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