Blog > Blog > 2010 > February

February 28, 2010 at 12:33 am

Buying foreclosure properties can be a frustrating, cutthroat enterprise. The best properties usually have investors circling like vultures. You’re never going to be able to win all your bids, but there are things you can do to increase your chances of being the winning bidder. And get the best price in the process.

The following guide will help arm you with information that can help you along your road to becoming a power buyer:

  • Financial Viability – Keeping funds available at all times; ready to pounce on that next great deal.
  • Earnest Money – How much should you put down, and other negotiating tactics involving earnest money.
  • Limiting Contingencies -  Sometimes inspections are unavoidable, but keeping contracts as clean as possible can really help when making an offer.
  • Offer Pricing – Offer price is unquestionably the biggest single difference between a dead deal and an accepted offer.  Avoid overpaying, while not letting the good ones slip through the cracks.
  • Persistence – Whether it is not letting a lost contract get you down or keeping on real estate agents and banks when an offer is in play, sometimes the squeaky wheel really does get the grease.
  • Dates & Timetables – Keeping closings short and sweet can really increase the desirability of an offer.

February 26, 2010 at 9:09 pm

Heard some rumbling about this a while ago, but it looks like it is official: The former owner of Title Pros used $250,000 of escrowed money for personal use.  Just makes you wonder how commonplace this is.

Link

February 26, 2010 at 8:24 pm

A drive down the streets in the City of St. Louis after dark can be a telling thing. Some streets that seem great during the day show a different face at night. One of the most telling things about an area during the night is not the curb appeal of a house, but the quality of  lighting along the street.

As a property owner, you don’t really have much too say about the streetlights, but lighting your own property is totally within your control. Having a reasonable wattage light fixture on your porch and/or in other places in your front yard can do wonders for not only your property, but the entire block. The more houses on a street with good lighting, the safer the street feels.

Better lighting also makes it harder for would-be burglars and robbers to hide in the shadows. I encourage you to leave these lights on all times after dark, whether anyone is home or not. Perhaps install a light sensing fixture that turns itself on. If you use something like that it conjunction with a florescent light bulb, the costs will be low too.

I tried to take some example pictures of this affect for comparison, but nighttime pictures are a little tricky to get perfect exposure-wise. If you won’t take my word for it, drive through a few neighborhoods after dark for yourself sometime. I think you’ll agree, a few lights make all the difference.


February 26, 2010 at 3:00 pm

When renting apartments and selling multi-families, I have never really been able to figure out which people prefer: a first or second floor apartment. On one hand, the first floor apartment is usually easier to move furniture into and doesn’t require you to climb a flight of steps every time you come home. On the other hand, second floor units are usually safer because the windows are not reachable from the ground. They also tend to be quieter since you don’t have anyone above you.

My assumption has always been that the preference is slightly in favor of upper level units, but I am curious what you think. Which do you think is better? Please feel free to share explanations in the comment section.

When choosing an apartment, do you prefer a first or second floor unit?

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February 17, 2010 at 5:55 pm

If you’re new to landlording or could use a refresher, the University of Missouri St. Louis will be holding a 6-hour Landlord Training class this March.

Here is the basics on the course:

The University of Missouri–St. Louis Division of Continuing Education and its Center for Entrepreneurship & Economic Education announces the Landlord Training Program, a two-day, six-hour program leading to success in the rental housing business.

The program is from 6:00–9:00 p.m., Thursdays, March 4 and March 11. The seminar will be located in Clayton, MO, at the World Trade Center Building, Room 1009, 121 South Meramec (at Bonhomme). The registration fee is $70, which also includes a 500-page landlord resource book. Registration deadline is March 2.

Whether you’re a first-time investor or an experienced landlord, this course will teach useful, practical information that will help improve the bottom line. Participants will learn how to determine if a property is a good investment, find and select quality tenants, write proper leases, avoid housing court, and protect the investment. A Q&A session at each seminar will further aid the learning process.

Instructors include Don Benski and Tim Kanke of the St. Louis Real Estate Investors Association and Joseph O’Connell of the St. Louis County Neighborhood Preservation.

For more information, or to register, please visit the Landlord Training Program Web site or call (314) 516-5974.

February 17, 2010 at 5:10 pm

After years of waiting, the formal groundbreaking is now set for the new Mississippi River Bridge in downtown St. Louis. Meant to create a direct route from Missouri to Illinois along Interstate-70, this $670 million project will be breaking ground Friday, February 26th at 12:30pm.

Come 2014, this project could really bring some major changes to transportation through downtown St. Louis. It’s just too bad we have to wait so long.

February 16, 2010 at 12:59 pm

If you have ever rehabbed a house, rented out an apartment, or even simply lived in the City of St. Louis for any period of time, you are well aware of the ridiculous amount of red tape that the City throws up around just about every issue. A lot of it is necessary, but the implementation has always been wanting.

The Post Dispatch featured a very interesting article on this topic in this morning’s paper. It involves a property at 3500 Missouri in Marine Villa that the City took from an owner. If you haven’t checked it out, its worth the five minute read.

St. Louis City takes 3500 Missouri away from owner

February 9, 2010 at 1:57 pm

Tucked away, in the heart of the historic Shaw neighborhood of St. Louis, Missouri is a vacant lot. An, unfortunately, common site in this city of ours. But if group of developers has there way, by the end of the year there might something a little different at 4136 Flad: a high efficiently, green home.

This project would be developed by a partnership between The Fit House developers and St. Margaret Housing Corporation in Shaw. The thing that really makes this project stand out, is it’s contemporary design and creative use of natural elements. In this age of technology we live in, people see to dismiss natural ways to control temperature and lighting in homes. This design doesn’t do that. It is laid out in such a way that it will use natural sunlight and thermals to increase the flow of air throughout the house. Not a groundbreaking concept, but a lost art. They also incorporated a green roof into the design to control temperatures.

They will also be incorporating other elements such as solar panels, a hydronic water handler, and lots of insulation to keep energy consumption to a minimum. The design looks pretty exciting too. Very open and modern. And very different from most of the other properties in Shaw. Of course, these differences could be a hurdle in and of themselves. Read more

February 8, 2010 at 3:51 pm

One of the most important things every investor needs to do before purchasing a property is a profitability analysis. At first glance, many deals seem great, but upon further review turn out to be less than ideal. You just can’t tell for sure until you do the numbers. That’s where this spreadsheet might come in handy.

If you have Microsoft Excel (or OpenOffice), this financial spreadsheet will do the analysis for you.  I find particularly useful when scrutinizing deals as you can quickly determine if a property is worth further research by simply plugging in a  few numbers. Simply enter the rents, expenses and financing and it figures out how profitable the investment will be. Of course, this is a very simplified spreadsheet. It does not account for major repairs, appreciation or tax benefits. However, it should give you a realistic snapshot of an investments potential.

I like to pay particular attention to both cash-on-cash return, which consider real-world financing scenarios, and the always popular cap rate.  The percentage cash-on-cash return tells you how much money you will get back in a given year for the money you put it, while the cap rate is the yearly return assuming the property was purchased with cash.

You can download this spreadsheet for yourself by clicking on this link: Rental Property Analysis. Hope it comes in handy.  If you have any questions or comments of the spreadsheet, please contact me.

February 8, 2010 at 1:57 pm

After years of dormancy, this project just popped up out of nowhere. In an message to students and faculty of Saint Louis University, the university’s President Lawrence Biondi revealed that a bridge over the railways between Chouteau Avenue and Interstate-64 on July 1, 2010.

Details are very sparse at this point, but it sounds like the bridge will be closed for a year in order to demolish the old bridge, and build the new bridge and Metrolink station. The last renderings for this bridge came out in 2006 so there is no telling what it will look like. But with the construction date to start so soon, you can expect we will be seeing much about this very soon. Read more

February 5, 2010 at 2:47 pm

Although they have been leasing units since November, I just now got a chance to take a look at the recently completed Courtyard Lofts at Polar Wave project. Located at 2222 Gravois Ave in the St. Louis, neighborhood of Benton Park, the 14-townhome project is located in the same building as Shock City Studios and Bittersweet Bakery among other businesses.

When driving by the complex along Gravois, you might miss the residential component to the project entirely. That’s because the vehicle access to the courtyard is in the rear, via Sidney Street. There is a gate-entry along Gravois, but any tenant coming to the complex in a car would come around back. From that angle, they can access the underground garage for the project, which provides 2 parking spots per tenant as well as a bike rack.

Most of the units are 2 bed, 2 bath, but there are a few that are 1 bed due to handicap access and site restrictions. Finish levels seen to be of a very nice quality with concrete floors on the first level and carpeting upstairs. The picture gallery below does more just than I can put to words. Overall, I would say the the project is very impressive. I really didn’t notice anything that I didn’t like during my visit. It looks like the commercial and residential additions provided by the Polar Wave project are going to be a great long-term addition to the fabric of Benton Park.

Prices run from $850 for a 1 bed, 1 bath unit to $1495 for the oversized 2 bed, 2 bath. The units are currently be leased by Julia Mittelstadt of Prudential Alliance Realtors. For more on the units currently available, please click here: available townhomes.

February 5, 2010 at 12:18 pm

This might seem a bit off-topic for this blog, but if you are in real estate or any other business, you have likely run into this issue. Clients, agents, and tenants send me documents all the time that are for software I don’t have. Openoffice is a good (and free option) to handle that problem, but there is also a free file converter online that I have been using a lot lately: Zamzar.

The good thing about this method is that there is no need to download any software. This is a webware program that handles all the conversion through a website. The free version can convert just about any file you might have, into a format that you support. I have found this particularity helpful in working with Microsoft Publisher files, which are notoriously tough to work with. It also works with just about any other product from Microsoft, Adobe, Corel, etc.

To use the service, simply go to zamzar.com. Once there, simply select the files on your computer that you wish to convert, what format to convert them to, and what email address to send the files to. It might take a few minutes to process, but when the procedure is complete, a link to the new file will be sent directly to you.

So the next time some sends you a Wordperfect resume that you have no way of opening, consider Zamzar as an option. It just might come in handy.  And its the best price anyone could hope for: FREE.

February 4, 2010 at 1:16 pm

Filling vacancies in your apartment units quickly can be the difference between success and failure with real estate investments. Looking for tenants anywhere you can find them increases your odds of success, but never forget that not all situations are equal. One area to be especially careful of is when working with renting to family members. I am not talking about renting a unit to a member of your own family, although that can be an issue as well. I am referring to the situation where you have a vacancy in your upstairs unit and the downstairs tenant refers their cousin Billy as a potential renter.  Should you run across this situation I just have one simple thing to tell you: “Be careful.”

The first thing to ask yourself is whether the tenant doing the referring has been a good tenant. If they haven’t, a referral from them should be avoided. If they have been exemplary, it might be worth giving the person a shot, but make sure you run your normal background checks and that the person truly qualifies.

Even if they do, just use good judgment on how you handle things. I have been witness to a few horror stories where two or more units in a building were rented by family members, who seemed to think that since they knew each other that they could do anything they wanted. Keeping discipline in an apartment building can be a challenge in an situation, but things like these can make things even more murky.

You also can face problems if the referrer or referee family member defaults on their lease and you have to evict them. Some tenants might not blame you at all if you evict their relative and they deserve it, but others might walk out on their lease along with their departing kin.

The morale of the story is simply to be aware that things can be too to be true in the world of property management. Should you encounter a situation such as this, just make sure you consider the baggage that comes along with taking on related tenants.