Archive for March, 2010

Deadline Pushes Minneapolis Duplex Market

said on March 9th, 2010 categorized under: Twin Cities Real Est

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clock 12There are less than 60 days left to qualify for either the first time home buyer or repeat buyer tax credit.

That looming deadline may well have inspired the Twin Cities housing market’s 13.9 percent year-over-year jump in accepted offers for the week ending February 27.

While not as dramatic, the duplex and small multifamily property market also saw an increase in pended transactions; up 4.4 percent year-over-year.

Of the properties that pended, 19.46 percent were offered by traditional sellers; up from 11.6 percent for the same week in 2009.

While neither year posted particularly inspiring average off-market prices, the figure for the week in 2010 of $83,746, did nonetheless represent an increase of $805 over the year before.

The amount of new duplex inventory continued to trail last year’s mark, with just 45 properties coming on the market for the week. This represents a 30.7 percent drop from last year.

Of these new listings, 28.9 percent were offered by traditional sellers. While that’s a figure that appears thin, it is still more than twice as many as last year.

As the tax credit deadlines loom, let’s hope for continued good news.

Go Green And Save When You Fix Your Minneapolis Duplex

said on March 8th, 2010 categorized under: Home Repair

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recyclage ecologie symboleWhen I sit down with someone considering buying their first rental property, I always go over not only the potential revenue the property can generate, but also the certain and probable expenses.

The one expense most prospective owners (and to be honest, listing agents) seem to omit most often is the cost of repairs.

Let’s face it. No matter how new or old your duplexor house is, sooner or later something’s going to break, become outdated or wear out.

I have fixed numbers I use as projected repair costs for each unit per year. Of course, some years nothing breaks and others, everything does. So my estimates are just that; estimates.

It’s usually about then that I also share the names of some of my favorite local shops.

Of course, when and if  something needs repair or improvement, the obvious locations to look for supplies are Home Depot, Menards and Lowe’s.

However, if the repair or upgrade isn’t urgent, it might be easier to stay under budget by shopping at a couple of local treasures.

Building Materials Outlet (formerly Cannon Recovery) is just over the Mendota Bridge in Eagan. For over forty years they’ve specialized in liquidating excess inventory from national distributors and manufacturers.

While their inventory isn’t as reliably consistent as the retail stores, the savings are significant. On any given day you can find French doors, new windows, rolls of carpeting or pallets of tile for as a third less or more than at traditional home improvement stores.

Another local institution that’s not only a great place to save money, but also a green solution is The ReUse Center in Minneapolis.

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Title Is Everything When Buying With Family

said on March 5th, 2010 categorized under: Buying A Duplex, Legal Stuff

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Realty PuzzleIt’s often said that blood is thicker than water.

With that in mind, I often have two family members express an interest in buying a duplex together. Each intends to live in one of the units.

Sometimes the buyers are a grown child and a parent who winters in warmer climates.

Sometimes the buyers are siblings.

In one case I even encountered a former husband and wife who saw a duplex as a way to co-parent their children, but continue on with their respective lives.

Sharing a multifamily property can be a workable solution for some people. And while family may well look out for each other’s interests more reliably than friends or acquaintances, it’s important to remember life circumstances can change.

And that’s why deciding how your going to take ownership at closing is so very important.

There are two ways a pair of buyers can take title; either as joint tenants or tenants in common.

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The Question Most Often Asked On Duplex Chick Is…?

said on March 4th, 2010 categorized under: Tax Credits

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3d man with a red question markAs a Realtor, I get asked a lot of questions.

They range from, “What were they thinking when they installed the bathroom here?” to “Won’t people just make us an offer, even if we list our duplex at a higher price?”

I don’t know the answer to the first question. And the answer to the second is usally no.

But these days, the question I get asked most often is “Does a duplex qualify for the $8000 first time home buyer tax credit?”

And while I’ve discussed it here before, then answer was and is yes.

For the record, multifamily homes like triplexes, four-plexes and apartment buildings qualify too. However, the property must be used as your principal residence. It’s also important to note you can only get credit for the part you live in.

The credit has been structured so that any first time home buyer who has a binding purchase agreement in place by April 30, 2010, can receive up to 10 percent of the property’s purchase price, not to exceed a total of $8000 in the form of a tax credit.

Since only one half of the duplex would be used as your principal residence, you can only use the value of one half of the property to qualify.

For example, if you pay $160,000, your half would be worth $80,000.  If you buy a duplex for $100,000, however, your half is worth $50,000. Your tax credit would then be 10 percent of your half , or $5000.

The same would be true if you bought a four-plex for $200,000 and lived in one of the units. The value would again be $50,000, giving you a credit of $5000.

Of course, to receive this credit, you must not have owned a home in the past three years. If you’re single, you can’t earn more than $125,000 a year and if you’re married, the two of you can’t earn more than $225,000.

Purchase agreements must be signed no later than April 30, and the transaction must close no later than 60 days after that.

Call me if you want to beat the deadline.

Minneapolis Duplex Market Hints At Thaw

said on March 2nd, 2010 categorized under: Twin Cities Real Est

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seated snowmanBelieve it or not, in some sectors of the Twin Cities housing market have begun to thaw. In fact, it feels like spring: of 2006.

Realtors and our clients are once again experiencing multiple offers and having to rush to see newly listed properties before they’re gone.

Unfortunately, the bulk of this activity is in first time home buyer territory; namely, those properties below $225,000.

But there are hints in MAR’s Weekly Market Activity Report that perhaps things are loosening up. For the week ending February 20, pending sales were actually 9.9 percent higher than they were for last year. This is the first year-over-year increase we’ve seen in weeks.

With just 5.39 homes available for each active buyer in the market, a 17.7 percent increase in the number of new listings for the week may help those facing multiple offers find homes. There are 6.9 percent fewer homes available for purchase this year than there were at this point in 2009.

In the small multifamily sector, traditional sellers continued to gain ground on the banks. Twenty-five percent of the owners of properties that received purchase agreements were people, not corporations. Of those listings new to the marketplace, 48.14 percent were being sold by people with actual names.

While the number of pended duplex sales was down 38.5 percent, the good news is the average price they left active status at was $121,509. This represents a significant leap over last year’s sold price of $94,671.23.

As we head toward the $8000 first time home buyer and $6500 repeat buyer tax credit April 30 deadline,  we’re sure to see even more signs of spring.

A Minneapolis Duplex Isn’t Always About The Numbers

said on March 1st, 2010 categorized under: Buying A Duplex

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love heartOne of the reasons I specialize in helping people buy and sell duplexes is that each and every one, whether it’s strictly an investment property or a place for the owner to live, is that it is both an intellectual and emotional endeavor.

On the one hand, for both investors and owner occupants, the financial analysis is crucial. If you’re an investor, the property needs to meet your financial goals for a return.

If you’re an owner occupant, the numbers also need to work. Most buyers have a very specific idea of how much they’re willing to contribute in “rent” toward their share of the monthly mortgage payment.

But for both an investor and an owner occupant, the return a property gives your heart can be just as important.

There are times when owning an income property sucks. Period. And it’s times like that when a piece of woodwork, a built-in, a view, can be the inspiration to muddle through.

Make sure your duplex is a good investment. Of course. But it never hurts if it makes your heart sing too.

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