For the last two weeks I have been in a pretty upbeat mood. I had finally got my rehab project at 3969 Humphrey under contract and a smooth closing looked to be all but a sure thing.

Now, the contract has fallen through and the property is back on the market (a steal at $127,750 if you are looking for a house ) . So what happened? The appraisal came in last night. It came in at $101,000! For my gut-rehabbed house! All I can say is that the appraiser in question doesn’t know the area. Every single comp pulled was from south of Utah. Streets like McDonald and Fairview. Anyone that knows Tower Grove South knows that the area south of Utah is almost a different neighborhood. More appropriate comps on streets like Utah, Humphrey and Wyoming were ignored in favor of the lower values streets to the south.

If that wasn’t bad enough, the appraiser adjusted the comp prices downward because I only have a parking pad instead of a garage. That is all well and good, except adjustments are a two-way street. I replaced all the electric, plumbing, HVAC, windows and flooring my rehab. Was that the case for the comps? No. But the appraiser did not make positive adjustments on my behalf. It was clear that the man did not know the area and is totally unfamiliar with the concept that rehabbed properties are worth more than properties with 50 year old systems. According to this appraisers logic, the $20,000+ put in to update the systems was a financial waste.

I am frustrated, but I am not worried. There are quite  a few other interested parties coming forward that can see the realities of the property. That can appreciate it’s REAL value. But take my lesson to heart. Don’t just assume the appraisal on your transaction will go smoothly. Common sense does not always rule. Assume that the appraiser doesn’t know the area and make sure you do a little homework and prep some comps of your own prior to the appraisal. Send these over to the appraiser to help point them in the right direction. Some of the more headstrong in the appraisal trade might take offense to this, but with ludicrous appraisals popping up from time to time, it is clear that some are in need this kind of direction.

The grass is always greener, right? When you hear so many stories about people making a killing on real estate, it can be hard not to feel a little envious.  There is no doubt that real estate can be very profitable,  just don’t fool yourself into to thinking that it is easy money. It isn’t.  When it comes to real estate investing, it takes a lot of work to be successful, and not everybody is cut out for it.

The so-caller “real estate experts,” publishing books and producing television shows about real estate investing, tend to show you the rosy side of things. They are trying to sell their books or get you to watch their show, so why shouldn’t they? They probably wouldn’t  do too well if they scared you off with doomsday scenarios. But if you are considering taking the plunge from watching others invest in real estate for entertainment, and actually doing it yourself, you need to wake up to a harsh reality: Investing in real estate is not easy. Read more…

Over the past few years, the St. Louis Board of Alderman have debated the prospected of a vacant property registration system numerous times. One bill almost passed about a year ago. Not taking no for an answer, Alderwoman Kacie Starr Triplett brought the issue back up recently. The new bill corrected many of the issues with the previous versions, but many in the real estate industry felt the bill still had unfair aspects.

Apparently, the Board of Alderman did not agree. I have been unable to officially verify this, or who specifically voted for it, but the bill passed this morning. From now on, whenever a property is vacant in the City of St. Louis for at least six months, and has recorded code violations, it must be registered with the City. The owner must provide their contact info and pay an annual $200 fee.  The provided information will then be placed on a  publicly available database. There will be some exceptions to this, but I still don’t know at this point if there were any last minute alterations to the bill before it was passed. Check back for more details and implications soon.

For more, check out the official Bill #322 website.

Real estate investing can be a lucrative and rewarding enterprise. It can also be a frustrating and profitless exercise. You could write a 1,000 instructional book on all the dos and don’ts of investing, but perhaps the first and most important question to as is simply “Why?” “Why should I invest in real estate and not put my money in savings or stocks?”

The most important benefits of real estate investing are related to the generous return on investment and the ability to control your own destiny. Real estate offers a great way to make significant profits quickly for the self-starters out there. Here is a detailed breakdown of some of these benefits: Read more…

Even in the best of economic times, real estate developments fall through all the time. In a recession, this trend can become an epidemic. One seeming victim to this trend is the proposed Pelican Place project at 2232 and 2256 South Grand in the Compton Heights neighborhood.

The Planning & Urban Design Agency of the City of St. Louis published development details back in August of 2006. The former YMCA building at the site was to be torn down and replaced by a mixed-use development. The historic Pelican building at the corner of Shenandoah and Grand was to be restored to historic alignment, which would have seen the removal of the the ghastly 1-story addition to the north. The plans looked pretty great.

In 2007, demo began on the Pelican building and leasing signs for the finished project went up. Things looked like they were on the fast track. Unfortunately, over the following two years, nothing seemed to happen. Other than the grass at the site becoming overgrown.

In May 2009, the St. Louis Post Dispatch was reporting that the project was still moving forward with Snap Fitness as the anchoring tenant in the 37,000 Sq Ft project. Nearly one year later, the site remains untouched. The poor economy, as well as the sluggish sales at the nearby Compton Gate Condos seem to be the likely holdups.

Thankfully, the surrounding area has continued to improve in terms of residential development. Once things start top loosen up economically, this project seems to stand a good chance of actually coming together. In some form or another. South Grand between Arsenal and I-44 has become a pretty nice stretch, but a project like this could really push things over the edge. Hopefully something gels sooner rather than later. Here is a look at the current site.

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To follow up on a the story about Fremont Park from a few weeks back, it looks like the work is now complete. It turns out that crews were merely replacing the sidewalks in the Benton Park neighborhood recreational area. Still, the new aggregate sidewalks look good. It seems like crews were busy replacing sidewalks all around Benton park this winter, as similar replacements were made in front Pointers Market and the former location of McClozzi’s among other places.

I have been working on a few layout changes to the blog over the last couple of weeks and I finally feel that they are ready for prime time. I still have a few more additions and tweaks to finalize over the next few days, but things are largely complete.

I have tested the new slideshows on a variety of different browsers without issue, but everyone’s setup is a bit different. If you have any problems with this feature not working properly, please let me know. I hope you enjoy the changes.

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.

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

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.

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.

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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.

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.

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

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…