“Water, Water everywhere, and all the boards did shrink. Water, Water, everywhere, nor any drop to drink” from ‘The Rime of the Ancient Mariner’ by 18th Century Poet Samual Taylor Coleridge. Although the Ancient Mariners of the 18th Century clearly understood that much of the earth’s surface was covered by water they quickly learned that a supply of life-sustaining fresh water was a scarce commodity. 70% of the earth’s surface is covered by water but, a mere 2.5% is freshwater with less than 1% easily accessible. The World’s population currently uses 30% of the available freshwater supply and according to the United Nations, water usage could run as high as 70% by 2050. It’s further said that by 2025, 1.8 billion people worldwide will live in areas plagued by water scarcity.
When demand for Real Estate exceeds available inventory it can be managed by building new homes. When demand for freshwater exceeds its capacity the solutions may not be as simple or cost-effective. If pressed to make a life or death decision, many would be quick to prioritize the need for life-sustaining water over the shelter of a home. What Real Estate & water flowing thru it share in common is both are considered ‘Real Property’. Often times the ‘Rights’ that go with a parcel of land, or property that includes a home, are taken for granted and the potential value remains just that, potential.
Water Rights that can provide fresh Spring water for consumption, as well as the ability to irrigate crops, can rival or exceed the value of the adjoining land in many cases. In Oregon, a water Right is authorized by the State Water Resources Department (OWRD). Requirements for issuance of a ‘Water Right’ before using surface water has been in place since 1909 and groundwater permits were first issued in 1955. The doctrine of “Prior Appropriation” is a system wherein it’s basically one of first come, first served. In times of shortage, the “Senior” water right holder is entitled to take all the water needed before the next “Junior” water right holder is served. With only a few exceptions, Oregon law provides that all water is publicly owned. Water Rights with a “Priority Date” that predates any “Junior” water right holders can add additional value under our “Prior Appropriation” doctrine.
Real Estate has remained an excellent long term investment, however, it’s not immune to cyclical changes in the market. Hedging one’s investment by utilizing valuable resources such as water can be just the right solution. Water and it’s importance to our survival have been referred to as a ‘Human Right’ thus, it will always be in demand. If you’ve wondered what one of the few prognosticators who saw the housing collapse of 2008 coming is doing today, after making $1,000,000,000 for his clients by ‘shorting the housing market”, Dr. Michael Burry is focusing all of his tradings on one commodity: Water.
Bob Zawaski P.C., G.R.I.
Oregon Licensed Principal Broker
Investors Trust Realty
Once the market analysis is completed, listing signed & post sign is set in the ground the real work begins. Putting the market plan into action is now priority one. Discussing how to react when things don’t go as planned is equally important as the initial plans themselves. Sellers may not be receptive to talk of any upfront failure and Brokers will be treading lightly as well. It’s important that an honest dialogue take place up front in order to keep things in proper prospective.
There are a variety of reasons why a Seller may elect to dismiss the importance of staying on the market too long. In some cases it’s over confidence that they’ll sell quickly. Certainly a Brokers enthusiasm can be contagious and can add to unbridled confidence. In some instances a Seller may feel he/she can wait for their price and is seemingly in no hurry. Again, a Broker who would knowingly list a property at a price higher than the market indicates could be complicit by “buying a listing”.
Whatever the reason may be, the end result is most likely a lower net price to the Seller. Whether a Seller is overly confident or seemingly in no hurry to sell, it’s a Brokers job to present the facts. Without a ready-made days on market to sale versus list price indicator we did our own analysis and here are the results.
We took closed sales of detached single family homes Northwest of Sunset Highway (area 149 & zip code 97229) over the last two months, June & July of 2018, in the $600,000 – $700,000 range. Here’s the breakdown:
DOM # Sold Units Listing Volume Sold Volume %SP/LP
0-10 17 $ 10,183,272 $ 10,226,250 100.42%
10-30 7 $ 4,697,800 $ 4,682,425 99.60%
30-60 7 $ 4,722,933 $ 4,618,928 97.70%
60-90 3 $ 1,944,800 $ 1,919,990 98.70%
90 – + 2 $ 1,354,995 $ 1,313,595 96.90%
There was a time when Brokers ‘freshened up’ listings by entering them as new. In virtually all cases & all places cumulative days on market (CDOM) follows the listing, making that strategy useless. Seller’s who might be relying on their own good fortune as opposed to hard facts might question the marketing efforts. A review of the Brokers Social Media plan and implementation is always advisable. Buyer’s have become far more sophisticated in their use & understanding of history & time on the market. Sending the same message repeatedly eventually has the opposite effect on those it’s supposed to reach thus, the simplest solution is often times the most logical i.e., price reduction.
No two listing scenarios are the same thus, there are a variety of market indicators your Broker can provide. First & foremost of course is actual showings and a gauge by which to compare with other homes that have sold. The $600,000 – $700,000 homes referred to above may not require the same number of showings that a home priced at $350,000 will in order to get maximum results. Second, our local RMLS monitors daily view counts which an experienced Broker can use for illustrative purposes. Third, monitoring view counts from public websites, as well as Broker managed social media can also be useful. Deciding when it’s appropriate to make a change or stay the course is crucial to avoiding unnecessary days on market.
When Marketing Your Home it’s important to review essentials such as Maximizing Multiple Listings all the way thru to Negotiating Offers. It’s equally important to discuss the potential pitfalls that may come your way so they can be dealt with.
Do you sell your house first, then hopefully find the next one or do you find your next home & hope you can sell your current home quick enough to close simultaneously on your next one ? We’ll discuss everything in between, including the current Portland metro area market & what factors you should consider along the way so, let’s begin…
One of the most important things to understand is that in most cases your probably moving to improve your quality of live to some degree and have envisioned what life will be like in your next home. With that serene picture in mind, there is no need to distort that vision by creating undue stress thus, remember why your doing it and that it’s a choice & most likely not a necessity. Of course, there are situations that life can dictate to us such as failing health, employment changes or a need to create a multi-generational household but, despite the importance of the need to do so, all the information contained herein is equally applicable to your situation.
Once you’ve decided your going to make the move & have weighed the pro’s & con’s, including how it might effect your situation if you didn’t make the move, your next to step should be to develop a level of comfort as to what’s reasonable to expect as far as making your next purchase. In our current market there is just a mere 1.9 months of inventory available as of September 2015’s Market Action published by RMLS. That may bode well for Seller’s however, it creates challenges for buyer’s thus it’s important to start thinking about things as a buyer does. In many areas in and around the Portland metro we are seeing rapid appreciation & multiple offers however, that is slowing just a bit as winter approaches and where you may be looking may paint an entirely different picture. In addition to preparing your finances for that next move via providing your lender with updated information, it’s important to note that even though you may have purchased just a few short years ago that the landscape is ever changing thus you can never start that process too soon. The most pressing concern buyer’s have is ‘what will my new payment look like’ however, that may not even be a consideration if there is nothing to buy. The comfort level an individual requires varies on many fronts, with no two people being exactly alike. Typically, I would suggest that as part of this process of ‘easing’ into this next phase of life scenario that we spend ample time looking at not only new listings (if they are available) but, sale fails & recently sold properties as well. With so little to choose from it’s crucial that you have a realistic view of the overall market, including what & why certain houses sell, as well as for how much. What we don’t want to do is give away everything that you may have just made on the sale of your house (or will potentially make) by proceeding on emotion rather then with as much knowledge of how the market’s been behaving. We want to have a thorough understanding of the market before entering into it, as hesitation based on a lack of preparedness or spending too much based on pure emotion will produce poor results. How long does this process take ? It obviously depends upon the individual but, when taking into consideration the preparation of a home to sell I’m typically seeing clients starting the conversation anywhere from a month to 6 or more months out. It’s never too soon to start your on line search to help develop that comfort level & no better place to start then here.
Once you’ve determined how much your new mortgage payment will be & whether or not what you hope to find does exist, even if only for sporadic periods, then your most likely looking for anyway possible to avoid having dual mortgages in place, assuming you would qualify to do so. Since you are now wearing two hats, one as a Seller & the other as a buyer, you should be able to better understand where a buyer who is purchasing your house or Seller you are purchasing from are coming from. Again, with just 1.9 months of inventory we are in a Seller’s market, assuming the property is priced correctly and has been prepared for market so as to appeal to buyer’s. The likelihood that you would consider an offer on the sale of your house that is contingent upon a buyer’s home selling i.e., a Contingency Offer, is pretty slim, unless of course you had no other offers but, that would also mean you have an issue that has made your property something other than what could be defined as being a “Seller’s Market Property”. If, as a future buyer, your first choice is to make offers contingent upon the sale of your property you should consider that first, it’s highly likely to not get accepted if the house has any sort of activity on it. Second, most Seller’s, or at least their Broker’s if they are providing good counsel to their Seller’s, would expect a Contingency offer buyer to pay a price premium for coming off the market for the uncertainty of a transaction that may never close. After all, Contingencies are things which may or may not happen, just like in everyday life. Again, as mentioned previously the goal should be to not give away what you may make via the sale of your house. Last, although not always the case you should consider that in a market where most homes are selling fairly rapidly that if a Seller is willing to entertain a Contingency offer you should be diligent in your efforts to understand why and that’s where your Broker can be most helpful in possibly attaining information you might otherwise not be able to gather on your own. There are obviously unlimited terms & conditions that could be added to any offer that could ‘sweeten’ the pot, including those made in concert with a Contingency offer however, that too is most likely subject to your Buyer’s Broker uncovering some pertinent fact and/or being able to articulate a certain need that a Seller appears to have based upon communications with a listing Broker. It’s not a given that a Contingency offer can ever be entirely ruled out as it depends on the individual circumstances surrounding each & every transaction & there are no two that are exactly the same.
The likelihood of a Seller accepting your Contingency offer is fairly slim so, how about negotiating a lease back on your current house while you search or wait for the 2nd house to close ? Just as was the case with individual circumstances surrounding each & every transaction not being exactly the same, as mentioned in regards to Contingency’s, it all depends on being able to understand your current situation well enough so as to not give anything away for the convenience of being able to stay over. Depending upon the amount of activity you may have on the sale of your current home your Broker (and ideally it’s the same Broker who will represent you in the purchase of your next property) may be able to gauge just how far you can push potential buyers in a multiple offer scenario so as to suggest that in addition to price, their getting accepted may hinge upon a limited lease back of the property to the Seller. Unless that buyer is paying cash (actually about 35% of sales are currently all cash) or via a non-owner occupied investors loan that buyer may be limited to do such a rent back for no more than 30 days based upon conditions of their loan. In addition to the aforementioned limitations, specifically those of buyer’s with owner occupied financing (the majority), a Buyer’s Broker who is providing thorough counsel to their buyer clients may convey that a Seller stay over has some potential liability that the buyer should consider thus, it may eliminate some or all of those potential buyers. The current Oregon Sales agreement (O.R.E.F. 054) does address in much greater detail then we would venture into here the terms & conditions under which each party is responsible for certain acts & costs etc., however, despite it’s best intentions over (4) pages there will always remain issues that will require additional deliberation, either by a Court or perhaps an insurance carrier. Point being, any attempt to stay over as a seller in order to easily transition into a purchased property may eliminate potential buyer’s who might bring the best offers thus, another scenario wherein your Broker can advise you.
What about those who would gladly carry (2) mortgages for a brief time but, aren’t able to qualify to do so ? Bridge loans have existed for a long time however, even in the boom market in the late 90’s and into the early 2000’s it was no secret that the costs were prohibitively expensive. With rates in general being lower then in the past the Bridge loan looks less attractive by today’s standards.
Although not practical for everybody hoping to transition from being a seller to a buyer, having a stopping point in between i.e., a rental property, allows for optimal strength on both sides of buying & selling. As a seller you have the flexibility in moving quickly from your property which some times can be looked upon favorably by a buyer who may pay a premium in price for the convenience. In addition, it allows you as a Seller the opportunity to slowly & methodically remove personal possessions from your home to better stage it for sale. From the buyer’s side of the equation you have the flexibility a seller might be looking for when deciding which offer to accept, moving quickly on a vacant house or perhaps a longer escrow where needed. Having your offer accepted is not entirely about price and having some flexibility and a verified down payment waiting makes your offer more attractive to a seller.
With home ownership being at it’s lowest level since 2004 it’s created a very competitive rental market thus, it’s not just homes for sale that are in short supply. The vacancy rate in the Portland, OR metro area is 2.5% at this time thus, you might disregard much of what I mentioned in the last paragraph about the possibility of renting in between. Typically, the initial response from clients might be one of dismay at the idea as they see the same difficulties in finding a short term rental as they do in finding their next house. In most cases this because they are looking at traditional rentals wherein the landlords are looking for long term tenants with terms & deposits etc. that are not geared towards shorter stays. With all the rentals that should be available due to record low home ownership why would vacancy rates be as low as they are ? In many cases those investors have ventured into shorter term rentals where regulations allow and have been able to get premium returns as a result. Programs such as VRBO, AirBnB & FlipKey have opened up short term housing in local areas throughout the Nation & Worldwide. There are numerous spin off websites in our area with similar rental opportunities that are priced competitively with local long term rentals, yet without the large deposits & other conditions we would hope to avoid that are common to traditional long term rentals. I sold several properties this year alone that will be used for short term rentals.
As is the case with every Real Estate transaction being different in their own way, the answers to your particular needs & requirements may require a combination of some or all of the ideas put forth in this blog.
Bob Zawaski P.C., G.R.I., C.R.S., S.R.S., A.B.R., S.F.R., e-Pro
Oregon Licensed Principal Broker / Owner
Investors Trust Realty
When one thinks of the term conversion as it’s used in Real Estate, one of the first thoughts that may come to mind is that of converting multifamily apartments to condos. As prices continued to appreciate during the years prior to 2007, there were numerous conversions that yielded far better returns ‘by the piece’ then as a ‘whole part’. When values soon thereafter began their rapid downward descent many of those property owners were faced with making mortgage payments on a property whose value was far less than what they now owed and/or paying monthly Homeowners Association dues. The combination of weakened buyers coupled with fractured Associations is just one of several components that have contributed to home ownership being at it’s lowest level since 1995. As a result of decreased home ownership (64.8% in 2014) the rental market has seen increased rents throughout most of it’s segments. In the Portland, OR metro area rents have increased by 5% in the last 6 months with Downtown rents typically going for $1.82 per sq. ft. & NW Portland rents spiking to $1.61 per sq. ft..
The overall market is certainly stable & it appears that we’ve been out of that downward spiral long enough that we can now look to the future with some degree of confidence. In most areas, we’ve made it back from the ‘bottom of the market’ but, depending upon location the gain may be very slight. It would be easy to simply suggest that location has most everything to do with the recovery or lack there of…after all Real Estate is all about location. Some of the causes & fixes to those issues still linger and can either hinder or help investors in the current market. It’s some of the residual effects of that down market that we can reflect on to examine strategy going forward & incorporate some ideas that may have been ‘shelved’ along the way.
Although not a new concept by any means the conversion of a Condo Association back to rental apartments & potentially being marketed as such has never went entirely off the landscape. Frankly, in addition to such conversions being done for a very long time it wasn’t until I had the opportunity to weigh the needs of two entirely different clients that I decided to investigate not only why certain market factors effected values but, how & when it might be appropriate to think slightly contrary to what the market is doing. The client who initially inquired about values within his small condo complex being somewhat lower than similar neighboring complexes understood that having lost FHA certification when the ‘do over’ button was hit and everyone had to re-apply & subsequently not being able to qualify again was a factor, as was a self imposed limitation placed on selling to investors. With values still slightly below 2007 levels this client has purchased a 2nd unit with an eye towards slow & steady appreciation, as well as the possibility of gaining enough control in the Association with future purchases that might allow changes that will make the units more marketable, such as allowing a limited number of rentals. Certainly a long term outlook at what appears to be the ‘bottom’ of the market for this complex seems to be a good strategy. In the event this clients goals are met in regards to owning a majority of units and making positive changes I wondered how that picture might look if this particular complex were converted to a Multifamily rental property under his ownership. Of course, by the time he might own enough units the market could have an entirely different landscape then it has now but, I couldn’t help wondering how my Multifamily buyers, who are experiencing a severe shortage of inventory, might view this property today & how that use compares to it’s present use.
At their current market values owners are typically seeing sale prices around $70,000 throughout this 11-unit complex thus, an aggregate total of $770,000. Based on current market rents @ $895 each this property would gross $118,140. With a 5% vacancy factor (our area at present is ranging from 2.2% to 3.4%) plus 40% in expenses ($44,893 Proforma) we would have a net operating income of $67,340. At present, the Portland, OR metro area is seeing CAP rates of 6.7 for properties in this category thus, it would be marketed at $1,000,000.
Obviously it’s not a simple task to dissolve an Association nor should it be done without the guidance of an Attorney & C.P.A., both with HOA experience. Having an understanding of By-Laws and how to navigate the process smoothly, especially dealing with remaining owners, is something that should be taken into consideration long before the situation presents itself…again something your Attorney can guide you with. Disbursal of Reserve funds and all the detailed accounting, including compliance with I.R.S. regulations are issues best left to your C.P.A. Like most other financial ventures you should be long on both education & the execution of those ideas, it’s my goal to act as a resource for my clients and give them a foundation upon which to carry forward their own investment strategy. As I mentioned previously, it’s difficult to tell what the market may look like several years from now but, there has always been room for successful investments in up or down markets.
Having the resources of seasoned professionals at the ready, in addition to over 20 years assisting investors exceed their financial goals are just a few reasons to contact me today !
Jim DeMarco P.C.
When purchasing a condominium, townhouse or other type of property in a planned unit development (P.U.D.) such as a gated community, leased land property or typical subdivision your obligated to join a Homeowners Association (HOA) & pay monthly or annual dues for upkeep of common areas & in most cases, building exterior maintenance. If your considering purchasing this type of property you should factor in, not only whether the obvious lifestyle choice you’ll be making suits your needs but, some additional factors that may impact your decision long term…regardless of whether you elect to become an active participant in the process or not.
To arrive at a point where your considering purchasing a property managed by an HOA you most likely have already determined that it’s a suitable lifestyle choice for you thus, you’ve progressed to exploring the possibility of having your Broker submit an offer on your behalf. In conducting due diligence there are issues that are ‘black & white’, such as what you can & can’t do and what happens when a violation of those rules takes place…those can be found in the C.C.R.’s (covenants, conditions & restrictions). In today’s world these can typically be found in an Associations online website and carefully reading thru it can help you determine in short order whether you can adhere to those rules or not. In addition to C.C.R.’s you should have access to by-laws, meeting minutes, financials (including reserve studies), special assessment notifications, amendments, insurance policy coverage (including Directors & Officers policy – D & O), notifications of safety or structural integrity issues & of course, contact information for Board members.
Analyzing any of the above mentioned items, including the ‘black & white’ C.C.R.’s, really requires further examination in order to uncover certain issues that may not have revealed themselves where you might have expected to initially find them thus, assistance from your Broker in determining what effects any of these issues can have on your future financial situation is crucial. Depending upon the size of the Association and how well (or not) it’s run you could easily find that there are no monthly meeting minutes or perhaps just one meeting has been held in the last year. This second category of subjective information or ‘taking it at face value’ really brings us to the essence of the 3rd category, face to face old School due diligence. The fact that there might be missing or incomplete information can be troubling enough however, you shouldn’t leave any stones unturned here. Speaking directly with a Board member or attending a meeting, if you should be so fortunate as to be permitted to attend & there is one scheduled, will give you far greater insight into how things really work. After all it’s your purchase & how you feel about individuals you will have to cooperate with in the future is a decision that only you can make, not your Broker. As a previous Association President, I found it insightful to see who the ‘players’ were & how they interacted with one another before making commitments to purchase or eventually take on that position. From a buyer’s standpoint you may say “I’m purchasing this type of property because I want things taken care so, why should I be concerned with what happens behind closed doors ?”…the short answer is you should. With most everything that appears ‘black & white’ your intuition still plays an important role in protecting your interests. The D & O insurance I referred to earlier not only covers misappropriation of funds by Board members but, also situations wherein a Director/Officer may slander an individual. Regardless of whether you want to take an active role in the future dealings of the Association your still being represented in your absence. The obvious parallel that comes to mind is Agency between you & your Broker wherein, speaking as an Oregon Licensed Principal Broker, what your Broker says on your behalf may have unintended negative consequences for you thus, carefully selecting representation that is tempered with practical application of State Law & delivered with some degree of diplomacy is crucial.
In addition to making certain that the above mentioned due diligence items are available to you there are some considerations worth mentioning that you and your Broker can further examine as everything isn’t always ‘black & white’. For example, going beyond whether or not the Associations Master Policy (different from the D & O) has enough dollar coverage there may be a fast approaching limitation to the number of rentals allowed that is not stated elsewhere & may cause rates to either escalate, cancellation of the policy or your inability to rent out your unit, even though other information you’ve obtained seems to indicate it’s O.K. Perhaps the Association hasn’t addressed an issue in any amendments that were made available to you that pertain to matters of insurance, such as requiring certain types of dryer duct material being used & licensed contractors being required to clean it on an annual basis. Obviously monthly dues, as well as reserve funds for capital expenditures, are considerations that go well beyond whether it fits your budget or not. With your Broker’s guidance you’ll want to determine whether dues are appropriate for the area, size, age & condition of the property. As your already aware, your lender looks at monthly dues as additional debt while you may have already calculated in the monthly expenses that are now inclusive as a help to your overall monthly budget…two different ways to look at it but, the lenders is what matters. Ultimately, a future buyer’s qualification for a loan could be hindered by excessive dues, not to mention that dues above the norm could be an indicator of less than stellar management. Of course, the pendulum swings both ways thus, below market dues could mean deferred maintenance & a future special assessment when you least expect or can afford it. The Association I was involved with in the past as President would fall into the latter category, very low dues however, because it was ‘Grandfathered’ in and wasn’t required to at the time it was founded, we had no reserve fund for future capital expenditures. This would be yet another example of a situation wherein a buyer would want to add any personal interaction into their due diligence in order to make a well informed decision about the people running things on their behalf.
Finally, in gathering information to help you make a well informed decision you’ll use various websites, your trusted Broker, perhaps an Attorney and a Title & Escrow Company. The resources that have been gathered by Title Companies, along with the knowledge of the Escrow officers, assistants, Title researchers & Attorney’s has made the chore of gathering critical information so much easier that I’m not sure what Broker’s would do without them. Like most anything else, the information we get out is only as good as the information that goes in thus, an Association that doesn’t keep up to date on things could easily forget to note or record a lien. Again, this is where that ‘old School’ in person due diligence comes back into play as again, at least here in Oregon, a standard General Exception to a preliminary Title report will make exceptions for items not shown or recorded that could have been ascertained by making an inquiry. Bringing some additional knowledge to the table is beneficial to your knowing as much about a property with an HOA (or any other for that matter) & as for the Broker, simply being able to point out as many potential pitfalls along the way will certainly make for an appreciative client.
LuAnne De Marco P.C.
As my Seller and I near the long awaited closing of his 11-unit apartment complex in the NE section of Portland, OR it was not without a few major obstacles along the way. Despite 20 + years of assisting buyer’s & seller’s with similar commercial transactions no two have been exactly the same thus, this was no different in that respect. Many of the commonplace issues were still there i.e., inspections & appraisals etc. however, changes to our market, while exciting for the future, are not without a few pitfalls that Real Estate Investors should take into account.
Find the strategy first then the property, not the other way around. Sounds simple enough but a sizable percentage of potential buyer’s who inquired about this property were working backwards in that they liked the potential that existed but, weren’t certain about a strategy that would help them reach whatever their goals might be. Unlike purchasing a home in which to live in with your Family where your emotions may set the stage for a transaction, an investment property requires an investment strategy…all together different from viewing it simply as a transaction.
Understand the process first, don’t let the process control you. Education is the key as it’s human nature for many who have been successful in their professional lives to believe that what worked in the past will translate into successfully purchasing & owning investment property. Although there are exceptions to every rule, allowing yourself to ‘skip’ a few steps up front and playing catch up later on can result in an irreversible set back. One of our potential buyer’s, although well qualified from an asset & income standpoint, didn’t grasp the concept that their being ‘first time investors’ would not be looked upon favorably as it would in the residential world. Again, simply carrying over what they knew of residential transactions didn’t bode well where an investment strategy was required.
Exercising due diligence, not ducking it. The most obvious are issues that are easiest to see such as deferred maintenance. Needless to say, the lender is concerned about a buyer potentially draining their personal savings due to extensive repairs thus, funds in reserve are a critical component to obtaining financing & can vary widely based upon the buyer and condition of the property. What things to consider knowing about as a part of the due diligence before & during a purchase may come from a checklist your trusted Broker uses however, nobody knows your financial situation as well as you do. A visit to your C.P.A., lender & perhaps someone who is an experienced investment property owner will serve you well in creating a list of issues important to you. Again, this falls back on educating yourself in advance. It’s always a good idea to ‘bring something to the table’ before meeting with any professional assisting you as it’s unlikely they will be able to lay out every scenario that may present itself in the process.
Even the Lone Ranger had Tonto. Amazingly enough, many potential buyer’s I spoke with over the term of this listing were not simply unrepresented in regards to having a buyer’s Broker working on their behalf but, had little or no ancillary support to fall back on in the way of contractors, inspectors or other legal specialists. Just as in the case of conducting thorough due diligence, it’s always wise to have all the pieces in place before you actually need them.
Get rich quick, misjudging cash flow. Although the multiple listing sheet available to the the public & Broker’s allows for a considerable amount of information to be shared, it’s never meant to cover all the pertinent information that will be essential to a buyer of investment property. Amazingly enough, the lack of due diligence in asking for information up front was not limited to just buyer’s calling on their own but, seasoned Broker’s as well. There were several instances of offers written without any information gathering prior to simply sending an offer along, only to find out that a simple up front question would have avoided the extra effort. If simply left to whatever financial information can be squeezed onto a multiple listing sheet or anyplace you choose to look on the web, chances are you would still be a far cry from being able to make an informed decision. Taking only some financial information without the remaining pieces to the puzzle is short sighted to say the least and a recipe for those looking to get rich quick to become cash flow poor in a hurry.
Bob Zawaski P.C.
Oregon Licensed Principal Broker / Owner
Investors Trust Realty
Be it the Seller who lingers just long enough for a ‘meet & greet’ with your clients or the disgruntled tenant who needs to air a laundry list of perceived code violations your going to run into someone willing to voice an opinion just when you thought you were alone i.e., the voices behind you. Being aware of your surroundings should always be a priority for safety sake thus, being prepared to respond to a friendly “excuse me” or an empty beer can coming your way should come naturally…I’ve dealt with both. How you deal with an impromptu situation may be your clients first opportunity to see first hand how you treat a total stranger or whether your ability to ‘think on your feet’ might translate well into negotiating them a good deal. It’s an opportunity to practice both good citizenship & let your clients know who you are.
Today’s encounter was not unexpected thus, I knew the well meaning property manager on my multifamily listing was going to open more than just a few doors for the commercial appraisers and I. Again, unlike the disgruntled tenant, she had no real intention of sabotaging a listing that now spans over 15 months and is just a few weeks from closing…if only these two seasoned appraisers don’t take issue with something said today. Of course, once the interior inspections were completed and a Q & A was about to commence they suggested that the property manager stick around as well, just in case she had some ‘additional insight’. Of course, in order to get myself in the right frame of mind the voice in my head said “That’s a great idea”.
It didn’t take long for a few questions regarding some deferred maintenance issues to go off the rails a bit with that ‘additional insight’ they were originally looking for when they asked the manager to stay. I’m pretty certain that both appraisers knew exactly what they were getting themselves in for by inviting the property manager in for the Q & A session. What better opportunity to quickly decipher what conditions might exist then to have the property manager serve up an outlandish tale to explain a hole in the wall and gauge my response to it. I will admit that the prolonged laughter the property manager exhibited when she described squirrels running circles inside one the units almost reached an ‘uncomfortable moment’ however, it also allowed me the opportunity to answer a few questions that were waiting for answers, as well as posing one to the manager about landlord/squirrel law.
Having worked for years in the Health Care industry prior to my 20 + years in Real Estate I found that recognizing & allowing someone an opportunity to take center stage, however brief that moment may be, may be more important to them then you’ll ever know. As I answered the appraisers questions about financials & condition issues, I made a point to address everyone in the room equally. I could sense by her silence that some of this ‘financial stuff’ was either getting by her a bit or perhaps she was just taking it all in, either way it seemed to have slowed the additional voices in the room.
As the appraisers and I parted ways one of them couldn’t help mentioning that “It appeared you had some help today ?”. I knew from their eye contact with one another that they not only planned for such a scenario but, were entertained as well so, hopefully we’ll come in at value with no conditions being required. I got a follow up e-mail from the appraisers later that day simply stating they enjoyed their visit, not something that happens very often. I may not know ‘Jack’ but, those voices do come up with some great ideas from time to time.
Water always flows downhill, and by the easiest route possible. That’s the basic concept behind a French drain, a slightly sloped trench filled with round gravel and a pipe that diverts water away from your house.
Water travels freely through the pipe, which empties a safe distance from the house.
The trench bottom should be sloped about 1 inch for every 8 feet in the direction you want water to flow. A low-lying area of your property, drainage ditch. dry well or the street.
When You Need a French Drain
- When you have a problem with surface water, such as a soggy lawn or a driveway that washes out.
- If you’re building a retaining wall on a hillside.
If Your Problem is Surface Water
Install a shallow French drain. Also called a curtain drain, it extends horizontally across your property, directly uphill of the area you want to dry out. It intercepts water and channels it around the soggy spot.
This type of drain doesn’t have to be very deep – a common size is 2 feet deep and 1.5 feet across. Where the drain passes through areas with trees or shrubs, switch to solid pipe (not perforated) to reduce the risk of roots growing into the piping and clogging it.
Cost: $10 to $16 per linear foot.
If Water is Getting Into Your Basement
Install a deep French drain. Also called a footing drain, it runs around the perimeter of the house at the footing level and intercepts water before it can enter your basement.
It’s easy to install during house construction, but much more difficult and expensive to add later. If you have tall basement walls, you may have to dig down quite a ways to access your foundation footing.
If there’s not enough slope for your drain system to work, you may need to pipe the collected water to a basin in the basement, where a sump pump can lift it and send it to the storm drain system.
Cost: $12,000 for a 1,500-sq.-ft. basement 6 feet deep.
Install an interior French drain. An interior French drain intercepts water as it enters your basement – it’s the surest method of keeping your basement dry and a better option than a footing drain.
However, if you have a finished basement, you’ll have to remove interior walls in order to install the system. That shouldn’t be a problem if water is ruining your basement anyway.
Crews cut a channel around the perimeter of your basement floor, chip out the concrete, and install perforated pipe all the way around. The water flows to a collection tank sunk into the floor, and a sump pump sends it out to the yard or a storm drain.
The channel is patched with a thin layer of concrete, except for a small gap at the edge to catch any water that dribbles down the wall.
Cost: About $3,000.
If You’re Building a Retaining Wall on a Hillside
If you’re building a retaining wall, add a French drain behind the first course of stones or blocks. Otherwise, water moving down the hill will build up behind the wall and undermine it. The pipe should rest on the same compacted gravel base or concrete footing that supports the wall.
To protect the drain from clogging with silt, drape landscape cloth across the base or footing and up the slope before adding the pipe and drain gravel. Near the top of the wall, fold the cloth over the top of the gravel, and top with several inches of soil.
Cost: The added cost to do this while building is very little – just the price of drain gravel ($25 per cubic yard) and pipe (50 cents to $1 per lineal foot).
If you are unsure if a french drain is right for you, contact a licensed drainage contractor before you begin your project.
Need a drainage contractor ? Try M. Leon Construction at 503-643-6631 or Ability Plus Drainage at 503-246-0474.
|Before selecting a real estate agent or buying a home, most consumers head to the Internet first. Researching homes and real estate agents online can get you ahead of the game when it comes to narrowing down your options. But with so many sites and sources to choose from, an online search can be exhausting…and sometimes futile. Here’s a guide to help you navigate the web when searching for a home or real estate agent.|