Archive for January, 2011

Duplex Sales Go On Vacation

said on January 12th, 2011 categorized under: Twin Cities Real Est

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Flip-flop on sea backgroundMinneapolis duplex sales took a break along with the rest of us over the holidays.

Just ten duplexes, triplexes or four unit property sellers signed purchase agreements.

That’s a drop of 44.4 percent from the same week last year.

Of these transactions, only one did not involve a bank in the negotiations. Last year, 29.63 of the pended sales involved traditional sellers in the negotiations.

The average off-market price didn’t fare much better, ending at $95, 345 for the week; a drop of 34 percent from the sold price for the last week of December in 2009.

The good news in all of this is the number of new listings to hit the market during this between holiday slump was down as well, with just 10 coming on the market compared to last year’s 27 for the same stretch.

The single family home market a bit of a break in transactions during the week as well, with 1.6 percent fewer new properties hitting the market than the year before.

Buyers also found other things to do with their time off, with the number of single family home purchase agreements dropping 26.2 percent for the week from the year before.

Sadly, the single family home market continues to see swelling inventory, with 10.5 percent more homes on the MLS than there were just one year ago.

Let’s hope the New Year brings better things.

Minnesota Duplex Owners Face January Deadline

said on January 10th, 2011 categorized under: Tenants

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Vector Ornate Certificate TemplateIt’s January in Minnesota. If you’re a duplex landlord, you know what that means.

Time to fill out your Certificates of Rent Paid(CRPs).

The state of Minnesota requires anyone who was a landlord in 2010 to fill out a CRP for the amount of time he or she owned the rental property.

And no, these aren’t formal certificates. Rather, they’re a form the state of Minnesota requires investment property owners to fill out.

It can be found here.

Owners should give one CRP to any married couple, and invididual forms to any adult, unmarried tenant.

If two or more unmarried adults shared a unit, take the total amount of rent they paid for the year, and divide it by the number of adults living there; regardless of how much each of them paid.

Caretakers who received rent credit are entitled to a credit equal to the amount they would have paid in rent had they not exchanged labor and services for all or a portion of it.

Section 8 tenants are given credit only for the amount of the rent they personally paid; not the amount subsidized by the government.

It’s important to remember you should also in your calculations any rent a tenant paid for a storage space, garage or parking space. However, you should not include damage deposits, late fees or delinquent rent.

CRPs must be mailed by January 31, 2011, so we procrastinators still have a little bit of time.

Of course, the rest of you probably already have yours done!

Comments Off on Foreclosed Homeowners Looking For Places To Live

Help...There was some good news in the apartment sector of commercial real estate this week.

According to Reis, a company that tracks performance and vacancy rates in apartment buildings, vacancies fell by .5 percent in the last quarter of 2010. The previous quarter had seen drops as well, but apparently since nobody likes to move in winter, the fourth quarter drop came as a bit of a surprise.

Of course, with fewer apartments available, rent prices also improved by a half a percent.

Now duplexes aren’t apartment buildings, and I know of no national or local service that specifically tracks duplex vacancy rates. However, it would stand to reason that as more people lose their homes to foreclosure, they would need places to live.

For the next seven years.

Because a foreclosure on a credit report keeps someone from buying a property for at least that long.

I can’t say it enough. Whether it’s a condo, townhouse, single family home, duplex or larger apartment building, it is an excellent time to invest in real estate.

People are still losing their homes to foreclosure. And every single one of those folks is going to need to find someplace to live.

How To Make Duplex Ownership Less Taxing

said on January 6th, 2011 categorized under: Multi-Family Property Investing

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pam rickerThe start of a New Year is a great time to strategize for all the ways investment property ownership can benefit your year-end tax bill.

That’s why CPA PamRicker of Ricker & Associates has agreed to come to my new digs at Keller Williams Edina and teach a free class on “Understanding The Tax Benefits of Rental Property Ownership”.

Pam will cover a number of tax related topics, including what constitutes rental income, allowable deductible expenses, how vacation rental properties are taxes as well as the consequences of selling your investment property.

The seminar begins at 6:30 pm on Thursday, January 27. Anyone is welcome to attend, I just ask that you RSVP so I can make sure we have enough literature and refreshments for everyone.

One Week In Duplex Market Says It All

said on January 4th, 2011 categorized under: Twin Cities Real Est

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The Big Picture - High Definition Television HDTVSometimes the little things in weekly Minneapolis duplex sale statistics tell the whole story.

For example, the week ending December 25, 2010, a duplex by Lake of the Isles sold for $873,000.

It was the most expensive duplex to sell all year.

Which is cause to celebrate, right?

Trouble is, only six duplexes in the entire metro sold for more than $400,000 all year.

In 2005, the peak of Minneapolis/St Paul duplex sales, 106 properties exceeded the $400,000 mark.  The most expensive of the bunch, again in Kenwood, sold for $1,125,000. (That same property sold again in 2009 as a foreclosure for $443,000.)

But here’s the most telling thing of all. In 2009, 1402 duplexes sold in the Twin Cities market. As of December 25, 2010, just 839 had changed hands. While that total will change somewhat with the final week of December’s tally, it’s unlikely the shift will be significant.

In other words, the number of sold duplexes year-over-year was down 40 percent.

There was another significant difference between 2005 and 2010 as well. In the glory days of 2005, 2,731 duplexes hit the metro market.

In 2010, just 1873 did. That’s a drop of 31 percent.

In 2009, there were 2211 new duplex opportunities for buyers on the MLS. So even year-over-year, new inventory is off 15 percent.

That trend wasn’t necessarily reflected for the week ending December 25th. There were 13 duplexes that received purchase agreements. Of these, two were offered by traditional sellers.  This is pretty consistent with the same stretch in 2009, when 12 duplexes pended, two of which were sold by people with names.

Just 21 new listings hit the market during the holiday week. This is up by four from the year before; probably just an exception rather than an indication of a coming trend.

The single family home market, meanwhile, saw 3.3 percent fewer purchase agreements signed during the week than the year before. New listings, however, jumped 47.3 percent; which is something the single family home market just doesn’t need.

I don’t know about you, but I’m glad to be done with 2010.

Minneapolis Duplex Foreclosure Freeze Thaws

said on January 3rd, 2011 categorized under: Short Sales/Foreclosure

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seated snowmanIt may be cold outside, but last month, Bank of America rather quietly thawed out its national duplex foreclosure freeze.

What does this mean to you?

Well, in south Minneapolis and parts of St Paul alone, I can can think of at least 15-20 duplexes that were slated to go to Sheriff’s Sale last summer and because of the “robo-signing controversy” and subesequent foreclosure moratorium, didn’t.

But they are going to Sherif’s Sale in January and February.

Which means they will either hit the market as short sales or, more likely, foreclosures. The short sales will happen this spring.

Property owners have six months to redeem the amount bid at the Sheriff’s Sale, and if they fail to do so, the bank takes control of the property.

These duplexes should start hitting the market in mid-summer to early fall.

If you’re a seller, this means you should think about getting your property listed before the wave of foreclosures comes ashore.

And if you’re a buyer, you should align yourself with a Realtor who, as a result of specializing in duplexes and distressed properties,  knows where they are and can help you pre-empt your competition for those that are especially good values.

As I said, I know of at least 15 – 20 already!

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