Archive for December, 2010

Facing Duplex Foreclosure? There’s Always Hope

said on December 30th, 2010 categorized under: Short Sales/Foreclosure

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Climber on the summit of a rock spire.I spoke with a duplex owner facing foreclosure the other day.

He’s in the last three months of his redemption period and time is running out.

I tried to reach him months ago to see if I could help him avoid foreclosure.

I didn’t hear from him.

I tried again recently, and he responded.

He confessed to being depressed and overwhelmed by the stress of near unbearable financial hardship. Totally understandable.

But when I suggested we do everything we could to keep him from foreclosure and all its consequences, he was resistant. Basically, with so little time left, he wondered why he should even try.

In Webster’s dictionary, the fifth definition of the word “try” is “to make an attempt at”.

In his case, an attempt to change his financial future, possible tax consequences, and long term credit damage caused by foreclosure.

I encouraged him to take a chance and simply try.

After all, whether it’s in real estate or life, we never know all we’re capable of until we attempt it.

Sometimes it’s infinitely more than we ever expected.

And if we fail, at least in this scenario, failure results in foreclosure; an outcome he expects anyway.

But if we succeed, he may be able to buy a property again in two years. With a foreclosure, he’s staring at seven.

Isn’t that worth an attempt?

I think so.

I hope he does too.

Duplex Market Packs On The Pounds

said on December 28th, 2010 categorized under: Twin Cities Real Est

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Christmas spice-cakes isolated on white backgroundIf market activity were the equivalent of Christmas cookies, the Minneapolis duplex market would have managed to not gain a bunch of weight the week before the holiday.

Seventeen duplexes and small multi-family property owners received purchased agreements during the week. Of these, 17.7 percent did not involve a bank in the negotiations.

Last year during the same week, 16 duplexes pended, and just 12.5 percent did not involve discussions with a lender.

This year’s average off-market price was $80,429. This is off significantly from last year’s $122, 200 sold price.

There were 40 new duplex listings on the market for the week. This is a 14 percent increase over the same week a year ago.

Of the week’s new listings, 7.5 percent were served up by traditional sellers. This percentage is down by almost half from last year’s market share.

Meanwhile, the single family home market saw an 11.9 percent increase in new listings week-over-week. In all, the number of active listings on the MLS is 12.3 percent more than last year’s total.

That wasn’t the only place the market’s pants got tight. The total number of days a house is on the market until it sells is up 10.1 percent. The number of homes available for every active buyer is up 17.5 percent to 9.72. And, the total months supply of inventory rose 36.8 percent to 7.8 months.

Let’s hope the market makes a New Year’s resolution to join Weight Watchers.

Comments Off on 10 Ways A Duplex Specialist Can Help You Get A Better Deal

expert in colourWith a MLS full of deeply discounted duplexes and continued low interest rates, there’s never been a better time to invest in real estate.

But as many wonderful investment real estate opportunities as there are out there, it’s important to remember that not every Realtor is qualified to help you. In fact, some agents may even cost you money.

Here are 10 ways a Realtor who specializes in duplexes and investment properties can help you get a better deal when you buy:

  1. Realtors who specialize in duplexes have and are tapped into a network of past clients who may consider selling, know of non-MLS short sales and foreclosures, and can share firsthand knowledge of properties that have either been cancelled or expired from the MLS and may still be available for sale.
  2. A duplex specialist lists and sells duplexes and income property. She’s seen property presently on the market, as well as properties that have recently sold; meaning she can quickly tell you whether a property is overpriced or the deal of a lifetime.
  3. A Realtor who works extensively with duplexes, triplexes and fourplexes has customized addendums and amendments specific to the purchase of rental property, insuring you get pro-rated rent, leases assigned to you and the complete transfer of security deposits.
  4. Investment property Realtors can literally save you hundreds and put thousands of dollars in your pocket simply by knowing when’s the best time to close on a duplex purchase.
  5. Duplex specialists can help you determine whether or not a duplex is, in fact, the best move for you. Perhaps you’re more suited to own an apartment building; or maybe a more hands-off investment like a townhouse is right for you. Regardless, a qualified Realtor can help you avoid costly mistakes and make the best move.
  6. An investment property Realtor is a teacher, coach and advocate. If you’re new to owning income property, she can teach you the difference between a cap rate and a gross rent multiplier. And if you’re a seasoned pro, odds are she can quickly tell you the cap rate or average rate of return in any given MLS district.
  7. A duplex specialist can spot and predict trends  in the local marketplace. For example, has she noticed clients looking for more walkable neighborhoods than in the past? Are more families moving into the rental market? How has the vacancy rate been impacted by foreclosure?
  8. Duplex agents can  provide a mathematical analysis of the property, including in those calculations local vacancy rates, present and market rents, and realistic predictions for expenses like repairs and maintenance.
  9. An experienced duplex agent can help identify areas of concern in existing leases, alert you to unusual utility bills, and help you find ways to improve the rate of return on your investment after closing.
  10. Duplex Chick specialists are an ongoing resource for property owners even after closing, offering a network of contact crucial to successful real estate investment. Need a good real estate attorney? Call your duplex specialist. Need a better insurance rate? Chances are your Realtor can recommend someone.

Whether buying a duplex in Minneapolis, St Paul or anywhere else in the United States is part of your 2011 goals, let us help you find a Realtor who will help you save money; while you’re making it.

Minneapolis Duplex Sales Hold Ground

said on December 21st, 2010 categorized under: Twin Cities Real Est

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WanderschuheSometimes when you’re falling down the side of a mountain, just holding ground is good. And that’s exactly what the Minneapolis duplex market did the week ending December 11.

For the week, 18 duplex, triplex and fourplex listings received acceptable purchase agreements; down from the 25 that did last year during the same stretch.

This year as in last, most of the pended transactions involved buyers, sellers and banks in the negotations, with just 17 percent being negotiated without lender involvement.

New listings held their ground as well, with 34 coming on the MLS in the week for both 2009 and 2010.

The average off-market price for the week, however, saw considerable erosion. This year the figure stood at $88,340 while last year it was $115,140.

In the single family home market, new inventory grew by 2.4 percent, contributing further to the 11.3 percent more homes on the market this year than last.

Meanwhile, pending single family home sales were down 3.7 percent year over year. While that isn’t good news, it isn’t the double digit avalanche we’ve seen in other weeks of the year.

Make Buying A Duplex A 2011 Goal

said on December 20th, 2010 categorized under: Multi-Family Property Investing

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2011As the year draws to an end, many of us are busy not only preparing for the holidays, but also goal planning for our business, financial and personal lives for the coming year.

Many of us have experienced financial frustration in the weeks and months of 2010. Our 401ks aren’t getting the return they once did and job insecurity is everywhere.

Perhaps it’s time to find a supplemental form of income or invest somewhere else.

While its reputation has been sullied somewhat with the collapse of the housing market, there truly has never been a better time to consider real estate as an investment.

Interest rates are low.

Prices are low.

And with more and more people losing their homes to foreclosure, there is an even greater demand for rental units than there has been for the last five years.

Yes, its reputation is battered. But remember, it’s still the only investment you can make where someone will lend you the money to buy it.

Winter Duplex Dam Sure To Cause Spring Flooding

said on December 17th, 2010 categorized under: Short Sales/Foreclosure

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floodYou’ve probably heard some lenders have put a temporary stop to duplex foreclosures while they investigate and review the potentially fraudulent practice of robo-signing the paperwork.

And odds are, you think this a good thing.

I do too. Well, sort of.

While it’s important that banks obey the law and foreclose only on those who have legitimately defaulted, in the end, I think we’ll all find there are a lot more of those kinds of people than there was fraud.

And what happens come spring when those properties hit the market along with all the others?

According to Realty Trac’s Rick Sharga, “There are five million loans that are seriously delinquent right now and not yet in foreclosure. A large, large number of those will hit the foreclosure pipeline next year. So 2011 is probably going to be a little bit worse than 2010.”

That, of course, will probably result in far too much inventory on the market, adding even more downward pressure on prices. 

In other words, if you’re considering selling, you might want to get out ahead of the flood.

Comments Off on Two Days Make The Difference In Duplex Lease Renewals

lease agreement being signedLet’s face it, we’re all busy.

And among the many challenges duplex landlords face is making sure to follow the letter of the law when it comes to giving tenants property notice for entry, lease renewal, eviction and so on.

In an effort to reduce at least some paper management, many duplex owners have an automatic renewal clause in their lease which extends the terms of the contract past the expiration date of the lease.

While on the surface that appears to help reduce to chase down tenants to execute paperwork, when it comes to Minnesota state law, it can backfire on you.

If you require a tenant to give you 60 days notice, you cannot hold them to it after the initial lease expires unless you serve them with written personally deliver notice or send it via certified mail, 15 to 30 days before they were required to give you notice.

Not that big of a deal really. Unless, of course, you’re busy.

Is there a way to make it easier on yourself?

Change your leases so they require the tenants give you 58 days notice of their intention to vacate. Minnesota state law does not require written notice be served for any period less than two months in length.

Duplex Sales Stay Upright

said on December 14th, 2010 categorized under: Twin Cities Real Est

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Slippery floor hazard symbolSometimes the Minneapolis duplex market is a bit like walking down an icy sidewalk. You may not look gracefull or pretty while traversing it, but if you don’t fall down, that’s good enough.

And for the week ending December 4, the real estate market didn’t fall down.

Twenty-six duplex, triplex and fourplex listings received and accepted purchase agreements for the week; up one from the same week in 2009.

Of those transactions, 15.4 percent involved traditional sellers; down ever so slightly from last year’s 16 percent.

However, the average off-market price for the week of $111,894 slipped a bit from last year’s sold average of $117,452.

There were 38 new investment properties listed for the week, down one from last year. Of these, 36.8 percent were offered by traditional sellers; representing a nearly 5 percent decline of market share week over week.

Meanwhile, pending single family home sales actually got a bit of traction, climbing 10 percent from the same week last year. That mark represents the first year-over-year increase in 30 weeks.

The amount of newly listed single family homes also found a bit of balance, dropping 13.8 percent from last year. This represents the 11th consecutive week of inventory decline.

Comments Off on Fannie Mae Plays Santa For Investment Property Owners

dear santa isolated on blackLast week Fannie Mae released a study that read like an investment property or duplex owners Christmas list.

The survey reads not only like a forecast of the rental market in the months and years to come, but also paints a pretty clear picture of who present and future tenants are likely to be.

According to Fannie Mae’s National Housing Survey in the third quarter:

  • -33 percent of all Americans would be more likely to rent their next home than buy. That represents a three percent increase over January.
  • – Among renters, 59 percent said the next time they move, they are more likely to continue to rent. This figure is up 5 percent since January.
  • – While most people choose to buy a home because of lifestyle considerations, most elect to rent due to financial considerations. With nearly 10 percent unemployment and a flagging economy, this should bode well for the rental market.
  • – 57 percent of renters believe the best reason for renting is the financial benefits.
  • – Based solely on present household financial condistions, 52 percent of today’s tenants believe they are better off renting.
  • – Fannie Mae estimates 64 percent of renters who do not plan to own a home and 50 percent of those who do plan to own a home one day do not have sufficient income to qualify for a mortgage on a median-priced home.
  • – Single people are least likely to own.
  • – The financial and housing crisis has caused home ownership to decline 11 percent for those between the ages of 25 and 29. Homeownership among people over age 35 has declined 5 percent.
  • – Married couples, who are statistically most likely to own homes, represent a declining portion of the population.
  • – 58 percent of single mothers rent.

Ken Bacon, Executive Vice President of Fannie Mae’s Multifamily Mortgage Business added, “More Americans are viewing rental housing as an attractive and sustainable housing option. As a result, we remain focused on helping America’s working families- many of whom have incomes at or below the median in their communities – live in quality, sustainable, affordable rental housing.”

For a full copy of the report, click here.

Comments Off on Duplex Owners Facing Foreclosure Learn Meaning of Fear

Winner at vw showI’ve heard it said that the word FEAR is an acronym for False Evidence Appearing Real.

And if you’re facing foreclosure, it’s a helpful acronym to remember.

A property owner who’s in the process of readying a property for a short sale called this morning. The absolute terror in her voice was palpable.

It seems the bank had called her husband and threatened to not only sue them, but garnish his wages.

And he believed them.

Their subsequent panic caused them to imagine all sorts of horrors; including sleeping under a bridge and living out of a VW van. This, when they’ve already found a place to rent and have moved in.

While I’m not an attorney, it’s important to bear in mind that Minnesota, Alaska, Arizona, California, Connecticut, Florida, Idaho, North Carolina, North Dakota, Texas, Utah and Washington are non-recourse loan states.

In other words, the bank can’t come after them for any remaining debt after a short sale or foreclosure. The debt is tied exclusively to the property, not the owner; unless that indebtedness is the result of a second mortgage or Home Equity Line of Credit (HELOC).

The bank’s collection agent, of course, wants to recoup as much money as possible for the bank. And But they have to do so within the confines of the law.

Remember,  if your property is in the process of foreclosure, the very worst thing that can happen is the bank takes ownership, your credit is damaged for seven years and you may owe some taxes on the part of the property that was an investment.

Granted, those aren’t anything to take lightly. But life will get better once you get out of a mortgage you can no longer afford.

There is hope and life after a short sale or foreclosure. Things will get better. I promise.

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