Archive for the 'Investment Properties' Category
A Warm Welcome for Kyle
I’m very excited to announce that Kyle Bergquist has joined the Greater Hartford Real Estate Blog and my residential real estate practice on a full-time basis.
As many of you know, Kyle is my husband and has been a regular contributor for quite some time. His bio has been available on the site for a while so I’m not going to rehash the gory details. I will say that he is a smart, creative and hard-working guy, and it never hurts to add people like that to your business.
Kyle has been working part-time as a licensed agent for almost a year now, so he’s going to be able to step right in and begin working with clients. We expect that he will focus mainly on buyers, giving our team twice the availability for showing properties. To the extent that we work with investors, he will likely take the lead there so that clients can benefit from his considerable experience analyzing opportunities (his full-time job for the past 5 years). Finally, he’ll also be active on the operational side of the business, working to support our various initiatives.
On a personal level, I’m really looking forward to seeing Kyle more often and having him partner with me. We both have different business strengths and ideas, and I think this is going to help take our customer service and overall business to an entirely different level. I can’t think of anyone else I’d rather have on my team! 
Welcome, Kyle!
UPDATE: A few of you inquired, Kyle was not laid off, he chose to leave his previous position to help me expand my business. This was a carefully planned decision which we’ve been working towards over the past few months.
Condo Association Boards at Their Dysfunctional Best
Upon returning from vacation, Amy and I discovered that we had a letter from the Board of our Condo Association. I assumed it must be the materials for the annual meeting, but inside was a far greater treasure – an invitation to a Special Meeting of the Board called through homeowner petition! The last meeting I attended resulted in a two-part blog extravaganza (part 1, part 2), so the conflict implicit in the Special Meeting would surely be worth the trip.
It did not disappoint. The petitioning homeowners felt that the Condo Association Board was not being open and fair with everyone. Which is always an interesting topic to discuss in public. The general sense of distrust seems to be the result of homeowners feeling as though they are not allowed to attend Board meetings, not understanding what the Board is doing, and not feeling that the Board is responsive to their needs and wishes.
Despite having some valid concerns about transparency, the ringleader of the petitioning group had trouble leading a coherent discussion. Making matters worse, he is actually a member of the Board and has apparently not tried to make the petitioned changes internally. The only thing that saved the meeting from complete chaos was the voice of reason in the form of the management firm. The two representatives were able to command the floor and insist that the meeting proceed according to the association bylaws.
The final result was that the handful of homeowners with concerns got to say their peace, and the Board committed to consider the requests on the petition. Once again I was pleased to hear during the Treasury report that the Association is well positioned financially.
But the formal business took a back seat to the absurdity of the whole proceedings. Amy mentioned a few times that she felt like she was witnessing a live Dilbert comic strip unfold. Some of my favorite moments:
1. Remembering that we elected the petition ringleader to the Board at the previous annual meeting, realizing that he was the one that launched the petition, and then further realizing that after 9 months on the Board he still does not understand the rules by which meetings are run.
2. Learning that the minutes from the annual meeting (last April) are still not available. The current minute-taking process is to record the meeting on tape and then transcribe the tape. Apparently only one person is capable of transcribing the tape and she has had a difficult year and has not yet gotten to that particular meeting.
3. “My name is John Doe, and I live in 4F.” All speakers began their remarks with this identifying sentence. Although a sensible thing to do in theory, the ringleader insisted on starting off with it each one of the 1.32 million times he interjected or responded. And each time one of the other Board members sighed in exasperation.
4. Hearing the recorder used for the minutes start beeping on three separate occasions. Based on the reactions of the Board members, the beep meant that the tape was done and needed to be changed. Minutes of transcript were lost each time.
5. Learning that the Board voted to kill the committee that the petition ringleader chaired rather than remove him as the chair. Another Board member actually admitted that they did it because they did not like dealing with the ringleader. The closed Board meetings must be a barrel of fun!
6. “Satellite dishes are beautiful!” The association has a policy of not allowing personal property outside on common property. Thus no satellite TV. And an impassioned plea for the freedom of (TV) choice.
7. “It’s the email’s fault! It’s the computer’s fault! ” A quiet aside by one of the Board members about why some information was not available. At first I thought it was a serious comment, but then she followed up with, “We have to blame the computers for everything.” Whew.
8. And last, but not least, the Board members selectively using the Roberts Rules to silence audience members (homeowners) when they were speaking out of turn. This tactic is a go-to move for power players and is especially effective when used against good-intentioned people who want to follow the rules.
Despite the absurdity and strong emotions, it’s possible that some good will come from what I’m certain will be known for all time as the “Special Meeting of 2009.” There should be some added transparency to the Board’s activities. And the Board should seriously consider some of the other proposals. I’m not sure if they will or not, but we can all look forward to the next Annual Meeting to see how things have developed.
That wraps up this edition of dysfunctional Condo Association meetings. Now we’d like to hear some of your stories. Does this all sound familiar? What has been your favorite moment? Please send them in without the name of the complex or individuals to protect the guilty…
Hartford Multi-Family Opportunities
I was just messing around with some data in the Multiple Listing Service. If you’re a real estate investor, toying with the idea of becoming a real estate investor, or a home buyer that would consider purchasing and living in a multi-family- you should take a very strong look at Hartford right now.
Year-to-date, multi-family homes sales are down 24% in Hartford, compared to the same timeframe in 2007. The median price for multi-families in Hartford is down 37% this year, compared to the same timeframe in 2007. And there is a whopping 15.4 months of multi-family inventory on the market in Hartford right now. That means if no more multi-families were listed in Hartford, it would take 15.4 months to sell what’s currently out there based on the current rate of closings.
As I mentioned the other day in my Short Sale post, 15% of the available multi-families are short sales. If you’ve got time and some cash, this may be an excellent opportunity for you to score a bargain in Hartford.
Short Sale Searches Coming Soon
Short sales are becoming more common these days, whether we like it or not. A short sale occurs when the sale of a property will not generate enough proceeds to cover what the seller owes their mortgage lender(s).
Offers on short sale properties must be approved by the seller’s lender before they can be officially accepted. And when a short sale property is listed in the Multiple Listing Service, the agent must call out language that it is indeed a short sale and it requires lender approval. Lender approval often takes months to receive, as the bank must do their own appraisal, a littany of paperwork, and often times negotiate with secondary lien holders in order to approve the sale.
Right now, there is no way for me to quickly find short sale properties, as the CT Multiple Listing Service does not have a required field which denotes a property is a short sale. Luckily, they will be adding this searchable field at the end of August and it will make my job a lot easier. Here’s why…
This morning one of my investor buyer’s called me to find out about short sales in Hartford. Because there is no searchable field, I had to look through all of the properties manually, both single family homes and multi family homes.
As of today, out of the 335 multi family homes for sale in Hartford, 51 of them are short sale or bank owned properties. That’s 15% of the market! The same is true with single family homes available for sale, out of the 153 single family homes, 23 are designated as a short sale or bank owned. Again, 15% of the market.
This is good news for my investor. They have time on their side and lots to choose from. The searchable short sale field will also make it easier for me to monitor area towns to see how the percentage of short sales compare, and when they increase or decrease. Will we actually work through the short sale inventory, or will it continue to sit and move towards foreclosure, eventually becoming bank owned?
Smart Buy on Prospect Avenue
One of my favorite houses on Prospect Avenue in West Hartford recently sold.
I typically walk by it on a daily basis while walking my dog. Well, in July, it went up for sale. It was bank owned and being sold As Is, originally listed at $769,900, which was about $100 a square foot. Not bad considering that houses on Prospect Avenue typically sell for $150-$225 a square foot.
I went to take a look and my general observation was that someone had started fairly extensive renovations and appeared to run out of money. Hence, bank owned. The kitchen had been completely updated, baths were gutted and updates stopped mid-stream, walls were freshly painted throughout. There were beautiful architectural details and hardwood floors, but fireplace mantles and stained glass windows had been pulled out and were strewn about the house. In the basement, it appeared that fire damage had occured at some point. There was a sizeable carriage house with a lower level office and upper level apartment, both in disrepair. Going through my mental checklist, I estimated that the house and carriage barn needed about $200,000 in work to get it up to Prospect Avenue snuff. Adding that to the list price of $769,900 was too much for an investor because they would never be able to recoup the investment, given that it’s on the first block of Prospect north of Farmington Avenue.
But I continued to watch the drama unfold over the next few months. The listing expired in September and was re-listed again in October at $719,900. Still too much. It expired again in November and was relisted at $699,900. It went under contract at the end of November. It closed on December 31, 2007 for $450,000. That’s right, it was last listed at $699,900 and closed for $450,000.
Holy schniekies. Happy New Year to the buyer! There are a few lessons to be learned from this…
1. With a bank owned property, find out how much the bank is owed, don’t assume it’s the asking price. They really only need to cover what they are owed and their fees to close the deal (real estate commission, attorney fees, etc.).
2. You’ve got to have cash and a squeeky clean contract (basically no contingencies) to pull off these deals.
3. The neighbors of this house are going to be peeved because it will drop the property value for that block. I mean, come on, $59 a square foot? Crazy!
4. The neighbors of this house will be happy when the buyer (most likely) finishes the renovations and flips this sucker in a few months. My guess, just in time for the spring/summer market. It could probably go for $850,000+ once everything is fixed and in tip-top shape.
So, if you’ve got some cash and the stomach for investing, here’s an example of how it can really pay off. Best of luck to the new buyer. I hope whatever their strategy is works out for them, flip or hold. I’ll provide updates as I see this unfold over the spring…