Archive for October, 2011
said on October 31st, 2011 categorized under: Tenants
Comments Off on Duplex Owners And Gut Instincts
A new duplex investor and owner occupant recently asked if she could refuse to rent to a prospective tenant because her intuition told her something wasn’t right.
Unfortunately, state and federal law require duplex owners to a factual reason to disqualify an applicant for a rental unit.
Federally, this logical reason cannot be due to: race, color, national origin, disability, religion, age sex or familial status.
Many states take this even further. In Minnesota, for example, duplex owners may not refuse to rent to someone based on all of the already mentioned reasons, as well as: creed, marital status, public assistance or sexual orientation.
So what legal reasons are there to refuse renting a vacant unit to someone?
Poor credit or an apparent inability to pay rent. It’s a good idea to have a written policy as to what minimum credit score you’re willing to consider for tenancy.
A criminal background.
In my new duplex owner’s case, it was the last item that validated her intuition.
It seems the prospective tenant’s fiance was wanted in another state; for the disappearance of a child– which came as a surprise even to the woman applying to rent the duplex!
Comments Off on Let A Duplex Put Your Kid Through College
Many duplex buyers I work with are first time home buyers who intend to start a family in the near future.
Their goal is to live there until their family is of the size that a single family home is more suitable for their needs. At that time they will buy a house, and keep the duplex and its cash flow as the college fund.
So what if your kids are already in junior high or high school and you’re lookiing down the barrel of college tuition without a duplex in your portfolio?
What about buying a duplex near a university now?
Many parents know in advance their children are leaning toward a specific college, or, that they can only afford to help with tuition at a local university.
And yet, regardless of the cost of tuition, one of the most expensive components of higher education is on or near campus living.
What if you already owned a property with enough bedrooms for your children to have rent-paying roomates, allowing your child to live rent free?
University communities have not been unscathed by the foreclosure crisis. Whether it’s a duplex by the University of Minnesota or a condo just blocks from Arizona State University, there are many distressed property opportunities for forward-thinking parents and investors alike.
During the boom, these university duplexes tended not to cash flow.
Not only do they pay for themselves, but the cost of a Golden Gopher sweatshirt or Sun Devil window sticker or two as well.
Comments Off on Minneapolis Duplex Sales Require Shades
Outside, the temperature may be dropping as we head into fall, but the Minneapolis duplex market is heating up.
In fact, I had to check my sales thermometer twice this morning.
For the week ending October 15, 2011, there were 34 Minneapolis and St Paul duplexes, triplexes and four unit apartment building owners who accepted purchase agreements for their properties
Compare that to the 16 who did during the same week last year.
This is such a bright ray of sunshine that it would be enough to break out the sunscreen and flip flops if more than 32.25 percent of this year’s sellers had equity in their duplex.
Last year, 37,5 percent of the sellers walked away from the property with money in their pockets.
The average off market list price for the second week in October in 2011 was $118,491. For the same week last year, the average sold price was $118,856.
New listing inventory stayed roughly the same as one year ago, with 37 new duplex listngs hitting the market compared with last year’s 38.
Of these, 59.46 percent of this October’s listings were offered by traditional sellers, not banks. This is up substantially from the 31.6 percent equity sellers for the week last year.
The single family home market also saw a reason to shave its legs and don shorts, with pending home sales up 35 percent over the same week one yar ago.
Meanwhile, new listings were down 17.5 percent for the week, bringing the total available inventory for the year to 22,374 homes; down 21.2 percent from one year ago.
Winter’s coming, whether we like it or not. But it’s starting to look like we’ll have plenty of good news in Minneapolis duplex sales to keep us warm.
said on October 24th, 2011 categorized under: Tenants
Comments Off on Duplex Foreclosure Doesn’t Mean Free Rent
I recently received an irate phone call from a Minneapolis duplex owner’s tenant, informing me he no longer had to pay rent, as the property was in foreclosure.
Like him, many tenants living in pre-foreclousre duplexes mistakenly believe they are no longer obligated to pay rent.
But this is not the case!
Minnesota law states the duplex owner, regardless of his or her status with her lender, retains all legal rights and priveledges with the duplex until title changes hands.
In a Minnesota duplex foreclosure, this happens at the end of the redemption period, which is six months after the date of the sheriff’s sale.
Typically, duplex owners who are at least three months behind on their mortgage payments receive a “Notice of Default” from the bank. At that time, a sheriff’s sale is scheduled; usually six weeks from that initial notification.
However, in today’s market, many lenders are reluctant to carry more foreclosed duplexes on their books, so they may push the sheriff’s sale date back one or more times.
During this time, duplex landlords, retain the right to collect rent, evict delinquent tenants and rent out vacant units.
It is important to note, however, that after the sheriff’s sale has occurred, duplex owners must disclose to prospective tenants the property’s foreclosure status.
If you’re behind on your duplex mortgage payments, things are bad enough. Don’t let your tenants make them worse.
Comments Off on Free Expert Advice For Delinquent Duplex Owners
To my dismay, many distressed duplex owners don’t call a Realtor to help them avoid foreclosure simply because they believe they’ll have to scramble to find the money for her servies.
The real tragedy is because of this mistaken belief, they often lose their duplex foreclosure.
Realtors commissions are paid out of the proceeds of a successful sale. If you’re a traditional seller, with lots of equity in your duplex, then that commission is deducted from your check at closing or the close of escrow.
And if you’re facing foreclosure or a short sale, the Realtor’s fee is deducted from the money the bank gets. And believe it or not, all banks are willing to pay those fees.
So if it costs you nothing, why wouldn’t you call an experienced duplex and short sale expert to guide you through a difficult and often emotional process?
1 Comment »
When I tell a duplex buyer we can’t see a property because the seller has already accepted an offer, I am often asked how much it sold for.
My answer is always the same.
“I can’t tell you.”
I’m not trying to be secretive or evasive. It’s just that even if I know the answer, the law prohibits me from telling anyone until the sale of that property is complete and title has changed hands.
Realtors who list duplexes for sale have a responsibility to the sellers they represent. And that is to act in their best interest at all times.
Imagine for a moment that the duplex agent and seller have agreed to put a property on the market for $200,000. The seller is extremely motivated, and so when an offer comes in at $150,000, he accepts it immediately.
The buyer has a few contingencies, or conditions, that have to be met in order for the contract to be fully executed. He has, essentially said to the seller he will buy the duplex provided everything checks out OK in an inspection, and of course, provided he can get a bank loan.
While the buyer and seller are negotiating any issues that may have come up during the inspection, you tell your Realtor you love the duplex and would pay $200,000 for it all day long.
Read the rest of this entry »
Comments Off on What You Should Know About The Duplex Realtor Whose Sign Is In The Yard…
If you see a “for sale” sign in front of a duplex you like, how do you get in to see it?
Probably just call the agent whose sign is in the yard, right?
But here’s something you should know when you do. That agent represents the seller.
As in acts in the seller’s best interest in all times.
Not in your best interest.
Who’s looking out for what’s best for you, the duplex buyer?
Well, unless you have a Realtor representing you, no one but you.
Most buyers who are just getting started think in order to see a duplex that’s for sale, they need to call the Realtor who has it listed.
The reality is, however, any agent who is an active member of the Multiple Listing Service can show you the property. And if you’ve signed a Buyer’s Representation agreement with that agent, they will be charged with giving you a more objective opinion and acting in your best interests.
This is in addition to hustling and trying to find you a duplex that’s a great fit for you and your needs. This includes alerting you to properties the minute they come on the market, drop in price, and networking with other Realtors to find you something before it even comes on the market.
And those services don’t cost you a thing. Buyer’s agents are paid as a result of the sale of a duplex; usually out of the proceeds of the transaction. You don’t have to write a check, pay an hourly wage, or even reimburse the agent for gas.
So what if you’re working with a Realtor who’s a duplex specialist to find the right property, and she either has one either actively on the market or unlisted that’s absolutely perfect for you?
Well, in that case, the agent needs to work in both the duplex buyer and duplex seller’s best interests. In Realtor-speak,this is called “dual agency”, where the agent has to try to find a win-win solution.
If you’re in the market for a great duplex, the best way is to have a Realtor working hard on your behalf.
Comments Off on Minneapolis Duplex Sales Produce A Rainbow
It would be easy to look at the data for the Minneapolis duplex market the week ending October 8, 2011, and decide all of the rays of sunshine we’ve seen in recent months had suddenly turned to rain.
In doing so, though, you’d miss the rainbow.
See, the sellers of just 13 listed duplexes, triplexes, and fourplexes received and accepted purchase agreements for the week. And of these, just 23 percent had enough equity in their property that they didn’t have to involve a bank in the negotiations.
This is down from the 23 property owners who chose to sell a duplex and accepted an offer on it during the same week last year. Of those sellers, 34.8 percent owed less to the bank than the property was worth.
But here’s the “good” news for duplex sellers.
There were just 29 new listings for the week ending the 8th. Of these, 41.4 percent belonged to equity sellers.
During the same week in 2010, there were 45 new listings for Minneapolis and St Paul duplex sellers to compete with. Of these, 42.2 percent took a check home at closing.
The difference between 29 new listings and 45 may not seem like a lot; that is, until you convert it to a percentage. It’s a 35.5 percent DECREASE in the amount of new inventory on the market — the trend we’ve been seeing all year.
In English? There are one-third fewer duplexes for buyers to choose from than there was one year ago.
The single family home market experienced a similar phenomenon for the week. There, new listings for the week were down 13 percent, and continue to be down 21 percent for the entire year.
Meanwhile, pending sales were up 48.3 percent over the same week from last year.
Prices posted their smallest decline since February.
And sellers received a higher percentage of their asking price for the second month in a row.
With interest rates below 4 percent for the first time in history, and tightening inventory, there’s plenty of sunshine in the Minneapolis real estate market to offset winter’s coming gloom.
Comments Off on Minneapolis Duplex Buyers Can’t Find Minneapolis Duplex Sellers
Did you see the front page article in the Minneapolis Star Tribune yesterday about the shortage of Minneapolis and St Paul duplexes for sale?
Yes, I know. The article actually discussed how difficult it is right now for first time home buyers to find a house in decent enough condition to buy.
So how is that about duplexes?
Contrary to belief, not every duplex buyer is an investor. In fact, I would say that nearly one half of the duplex buyers I work with are owner occupants; more specifically, first time home buyers.
Many want to get into a popular neighborhood, and can’t afford the cost of a single family home. The added income provided by a duplex offsets much of the burden of the mortgage payment.
Others have a longer term plan. Ideally, they want to live in the duplex until they start a family. At that point, they intend to purchase a single family property to move into, and use the duplex as a long term investment.
Of course, these duplex buyers, like their single family home counterparts, aren’t finding anything to buy — because tradtional sellers, whose property is usually in better condition than a bank foreclosure, don’t understand it’s a seller’s market.
Meaning it’s a great time to sell your Minneapolis duplex.
No, you’re not going to get what someone might have paid you for it in 2005 or 2006. And if you’ve owned it longer than that, and refinanced and took money out, you might not break even.
And if you’re thinking of waiting until we see those prices again, data suggests you may have to wait as much as a decade.
However, if you’re a Minneapolis or St Paul duplex owner who’s even just playing with the idea of selling, or in a perfect world would, please get in touch with me.
You may be better off than you think.
Comments Off on What Bette Davis Knows About Duplex Foreclosures
To quote Bette Davis in “All About Eve”, fasten your seat belts, duplex buyers and sellers. We’re in for a bumpy ride.
RealtyTrac, the nation’s leading source for foreclosure data reported that while foreclosure activity was down nationally for the third straight quarter, there were signs it was beginning to ramp back up.
Remember, starting last October when the robo-signing controversy cropped up, banks have dramatically slowed their foreclosure filings while being investigated for their paperwork.
Realty Trac President Rick Sacchio stated, “Third quarter foreclosure activity increased marginally from the previous quarter, breaking a trend of three consecutive quarterly decreases that started in the fourth quarter of 2010. This marginall increase in overall foreclosure activity was fueled by a 14 percent jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months trying to clear the chimney of sloppily filed foreclosures.”
Notices of default were filed on 195,878 U.S. properties in the third quarter; a jump of 14 percent from the previous quarter.
Read the rest of this entry »