Aug 15, 2019 | Real Estate
What can be done with a house that is just perfect but it is in a bad neighborhood or a dangerous spot? Think about homes that are in decent condition; yet, too close to the water. America is experiencing flooding now that is not supposed to happen in 500 years.
That cute little beach bungalow could easily get wiped out in the next hurricane. It might be time to think about moving those homes to a safer area or higher ground.
The International Association of Structural Movers says that around 8,000 homes are moved each year in America. Relocation may be due to hazards, such as the erosion of an oceanfront or cliffside lot. Others relocate for their historical value.
What It Takes To Move A Home
There are five main considerations for moving a home, which are:
- Legal Issues: Moving the home and transporting it must be allowed by law.
- Strength: A home must be strong enough to stay together when disconnected from its foundation.
- Lift and Transport: It must be possible to lift the home and transport it to the new location.
- Access: Access to the home’s new location must be unimpaired on the route to get there and on the site when the home arrives.
- Cost: The cost to move a home may be shockingly prohibitive.
Legal Issues
The legal issues can be very challenging. Do not give up easily, if the idea of moving a home is blocked at first because it may be possible to get a one-time waiver from the regulations.
Strength
Some homes are not strong enough to move. However, it is surprising what is possible if the home and/or lot is very valuable.
There are home-moving projects that lifted Victorian-style homes built over one hundred years ago in the most valuable parts of San Francisco. These homes only moved upwards. They stayed on their lots. The moving project raised them 15-feet higher to allow a garage to be built underneath. These well-built wooden homes survived the 1906 earthquake. They were carefully raised without damaging them.
Lift And Transport
Experts use many techniques to lift a home and prepare it for transport. Homes may be transported by strong flat-bed trucks, by industrial, heavy-lifting helicopters, and on barges in the river or ocean. Homes can be disassembled partially to make moving them easier.
Access
When moving a home, even if separated in pieces, the pieces may be very large. The entire transport route needs to be carefully checked by an engineer for proper clearance heights, enough turning radius when needed, and sufficient width for passage.
Cost
While many homes are movable, the cost may be too high to make it worthwhile. However, the cost to move a multi-million dollar mansion falling off a cliff may be far less than the home’s value, which might otherwise be lost.
Summary
If there is a beautiful heritage home sitting on a cliff’s edge overlooking the ocean and teetering on the edge of collapse, there is a new way to think about it. It may make perfect sense to move it to a lot that is down the street and further away from the edge.
Your trusted real estate agent is ready to help youfind the perfect home. Give them a call today!
Aug 14, 2019 | Real Estate
It’s often harder to make friends as an adult than it is when you’re a child. It’s even more challenging to make adult friends when you move into a new neighborhood. You may feel like people already have their own group of friends and aren’t looking to include newcomers. Of course, that’s just an illusion.
Here are some easy ways to implement tips for making friends in your new neighborhood.
Put Out The Welcome Mat
Make your front door inviting to the neighbors. Place some cheery flower pots near the porch and buy a nice welcome mat for the front door. Be sure to put fresh light bulbs in the porch lanterns, too. These small touches will show neighbors you’re setting a friendly tone.
Have Coffee And Lunch Out
Make a point of having your coffee breaks and lunch at the nearby cafes as often as possible. Mention to the servers or owner that you’re new in town and this is your first time trying out their menu. They’ll likely take an interest in you and ask what house you bought, and so on. As you continue returning, you’ll be on a first-name basis, which will probably lead to some casual introductions to other locals who are stopping in for coffee.
Host A Housewarming Party
Housewarming parties are a fantastic way to welcome old friends and meet new ones. They are also a great excuse to knock on your neighbors’ doors and personally let them know they’re invited. If you feel uncomfortable having strangers in your new home, make it a backyard BBQ housewarming. In no time at all, you’ll have a new collection of local friends and acquaintances.
Join The Local Clubs
Membership clubs offer a natural way to meet new people without appearing overtly friendly. Look for some local clubs you’re interested in, such as gardening, exercise and book clubs. When you start attending on a routine basis, friendships will organically begin to develop.
Volunteer
If you have an extra hour or two in the week, consider volunteering as a way to help the community and to make new friends. Places that typically need volunteers include theaters, schools and athletic programs.
Making friends in your new neighborhood will enable you and your family to feel more at home sooner. One or more of the above-mentioned tips is likely to work for your personality and preferences. And don’t forget your real estate and mortgage professionals! They’d be happy to help get you connected as well!
Aug 13, 2019 | Real Estate
Many baby boomers are reaching retirement age. If they set up their financial planning well, while younger, they should have accumulated enough wealth to have some discretionary money available for making investments.
Others, who may be just starting out, have some investment capital but not necessarily enough to buy a piece of commercial real estate on their own. These investors might enjoy a real estate investment pool, also called an investors’ club.
Pooling Resources
One way to get some investment participation in real estate is to pool investment funds needed to have enough for the down payment on a piece of real estate.
For example, if the down payment for acquiring a single-family rental home is $40,000 and four investors chip in, this means the contribution by each one will be $10,000. Each investor will own 25% of the deal. Many can come up with $10,000 for investment but it may not be as easy to find a spare $40,000.
Real Estate Investment Clubs
An investment club is where people get together to review the summary of a real estate deal to discuss its merits as a group investment.
To find a local group there is a nice system called Meetup online, which is a good resource. If there is no real estate investment club in a particular local area, consider forming a new one through that system.
Legal Structure
For real estate purchased by an investors’ pool, the best legal structure is to acquire the property by a newly-formed limited liability company (LLC). An LLC is very easy to create online. The LLC structure limits the liability of its owners (members) to the amount they each invest in the LLC.
It is best to set up a new LLC for each closing of a real estate acquisition. In this way, the owners can be different and to separate the deal from the successes or losses in other deals. Investors in an LLC buy units of the LLC, not shares.
When an LLC starts, it is authorized to issue a certain number of units. Each investment gets a proportional percentage ownership share of the LLC. The investor gets the number of units that represents the percentage value of the investment compared to the total investment.
Work with a real estate agent to help find deals. Use competent legal counsel and a professional accounting firm to set up and manage the LLC properly.
Summary
Investment clubs can be very fun. There may be considerable discussion and disagreement about each potential deal. This is a welcome thing. It is excellent practice to learn how to conduct proper due diligence.
Investors who are just learning about what to look for in a real estate deal gain insights from more experienced investors. Experienced investors stay active and get a chance to pass on their knowledge to the less-experienced ones. Everyone enjoys socializing together and that is a nice extra reward.
Aug 12, 2019 | Financial Reports
Last week’s economic releases included readings on consumer credit, job openings and weekly reports on mortgage rates and first-time jobless claims.
Consumer Credit Use, Job Openings Slow in June
Consumer credit use slowed in June as credit card use lost ground. Non-revolving credit, which typically includes education and auto loans, grew at its slowest pace in three months. Mortgage loans are not included in the Federal Reserve’s report on consumer credit. Consumer credit use grew by $14.6 billion year-over-year in June as compared to May’s year-over-year reading of $16.0 billion.
Year-over-year credit use fell one percent in June to 4.30 as compared to May’s year-over-year reading of 5.30 percent. Credit card use fell by 0.10 percent in June, which suggested that consumers held off on large purchases. Fed Chair Jerome Powell said ,”households are in pretty good shape overall.” in reference to current economic conditions.
Job openings fell in June, but maintained a 15-month streak of seven million or more job openings. There were 7.35 million jobs open in June as compared to May’s reading of 7.38 million jobs open. Job openings rose in retail and real estate, but were lower in construction, leisure and hospitality categories.
Analysts said that shortages of skilled labor and fears over the effects of trade wars caused fewer hires. The trade war with China has not broken the longest period of economic growth in U.S. history, but escalation of trade disputes could further slow economic growth if trade wars aren’t resolved.
Mortgage Rates, Weekly Jobless Claims Fall
Mortgage rates dropped last week according to Freddie Mac. Rates for 30-year fixed rate mortgages averaged 3.60 percent and were 15 basis points lower. Rates for 15-year fixed rate mortgages averaged 3.05 percent and were 15 basis points lower.
The average rate for 5/1 adjustable rate mortgages dropped ten basis points to 3.36 percent. Discount points averaged 0.60 percent, 0.50 percent and 0.30 percent respectively.
Initial jobless claims fell last week to 209,000 new claims filed as compared to the prior week’s reading of 217,000 first-time claims filed. Analysts expected a reading of 215,000 new jobless claims filed for last week.
What‘s Ahead
This week’s scheduled economic news includes readings on housing market conditions, housing starts and building permits issued. Weekly readings on mortgage rates and initial jobless claims will also be released.
Aug 9, 2019 | Real Estate
A hot market in real estate is identified by a few things, which include higher prices, lower amounts of unsold inventory, and desirable neighborhoods. Neighborhoods can increase in value because of having an excellent location, high-paying jobs, quality schools, and a variety of attractive amenities.
Hot Markets Are After The Fact
Properties in a hot market may sell faster, for higher prices, and without needing to be in perfect condition or staged for sale. Real estate investors do not necessarily benefit from learning about a hot market unless they already own property in that market area.
It is nice to be an owner with a property for sale in a hot market. However, more success may come from identifying a market as potentially valuable before it becomes a hot market.
Hot Market Trends Before The Fact
Gentrification is a pattern that may start out slowly and then build until a market goes from cold to hot. With gentrification, renovation of rundown neighborhoods attracts new, wealthier residents. Many cities encourage the gentrification of deteriorating urban areas.
Streets with abandoned storefronts may convert into pedestrian-only shopping promenades. Old wharf warehouses may turn into a riverfront boardwalk. Artist types may move into a bad neighborhood because of the low rent and then turn it into an eclectic, hip area with art galleries, coffee shops, boutiques, and street murals.
One way to benefit from gentrification possibilities is to follow the long-term development plans of a community and be an early investor in those plans. Invest in property just on the outskirts of a planned gentrification zone.
Be careful to note any physical barricades, such as a wide street, which may stop gentrification from progressing further. A wide street may prevent gentrification from moving across it to the rundown area on the other side.
A similar pattern shows up when investing in real estate that is on the outskirts of a growing area or adjacent to a desirable neighborhood. Over time, if the growth continues, these outlying areas may become a nicely profitable investment for those who are patient.
Getting Out Of A Hot Market At The Right Time
It is important to know when to sell properties in a hot market and move on to find a different one. Continuing to re-invest in a hot market may ultimately disappoint when there is a market correction to the downside. Try to avoid this if possible.
Market indicators to watch include:
- Year-over-year increases in listing prices compared to historical figures for the same area.
- The percentage of listings showing a price reduction.
- The average time a property is listed before being sold.
- A comparison between the listing price and the sales price for sold properties.
Conclusion
Studying market growth and guessing the direction of growth helps identify a potentially strong market before it gets hot.
It is time to sell and move on, if the listing prices are not increasing each year or if price reductions are increasing. Other strong indicators that a market is cooling down are when the average listing time is increasing and the average difference between the listing price and sale price is widening.
If you’re in the market for a new home or interested in listing your current property, be sure to set up a consult with your trusted real estate professional.
