Archive for the 'Selling A Duplex' Category

Comments Off on Minneapolis Duplexes Worth A Little Bit More

Small Gains in duplex salesWith the release yesterday of the first quarter 2012 Case-Shiller Home Price Index, Minneapolis and St Paul duplex sellers got a bit of good news.

The index showed that Minneapolis was one of only seven cities that showed year-over-year price gains for the quarter, up 3.3 percent from the first quarter of 2011.

This jump was second only to Phoenix, which lead the nation with a 6.1 percent increase in value.

It is important to note that nationwide, the average for the nation’s largest 20 cities actually showed a 2.7 percent decline.

While the quarterly data for the Twin Cities looked good, the numbers between February and March told a different story. At that time, Minneapolis reported a .9 percent decline in value.

And it’s important to remember that nationwide, values are down as much as 30 to 50 percent from their peak in 2007.

Earlier in the month, the Minneapolis Area Association of Realtors reported a rise in the median home sales price in April of 12.4 percent. This leap was attributed largely to the decline of low priced bank-owned inventory on the duplex and housing market.

This decline in bank-owned inventory, coupled with a shortage of traditional sellers has lead to the tightest duplex market in years.

Southwest Minneapolis Duplex Sellers Disappear

said on May 21st, 2012 categorized under: Selling A Duplex

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Front Right (5)It occurred to me this morning I hadn’t seen any duplexes come up for sale in southwest Minneapolis for a while.

I wondered if I was missing something. After all, the area south of Lake Calhoun and around Lake Harriet has a healthy supply of the Craftsman duplexes everybody loves, and it remains a popular place to live.

So I did some digging.

Between January 1 and today, there have been just five southwest Minneapolis duplexes that hit the market.

There were 13 in the same amount of time last year.

And 29 over the first five and a half months of 2005.

I can’t believe there aren’t duplex owners who’d like to sell in that neighborhood any more. I know there are people who want to live there! 

Imagine what being the only Linden Hills duplex for sale could do for your asking price.

Comments Off on How To Be In Foreclosure AND Sell Your Minneapolis Duplex For A Profit

Stack of $100 billsIf you’re a Minneapolis duplex owner who is losing his investment property to foreclosure, did you may be able to sell it for a profit?

In Minnesota, when a duplex owner is delinquent on mortgage payments, the lender on their property will schedule a sheriff’s sale.

At that sale, which is usually held in the county sheriff’s office, a representative for the bank will, in essence, bid for the right to redeem the mortgage six months later and take control of the duplex.

From that date, the duplex owner has six months to come up the money to pay off, in full, the amount bid at the sheriff’s sale.

Most of the time, that figure is equal to the amount of the mortgage on the property.

Sometimes it’s less.

Why would the bank representative ask for less that what the duplex owner owes?

Because believe it or not, banks are not interested in owning more real estate. This seems especially true if the duplex is located in an area that has experienced a number of foreclosures.

When this happens, the duplex owner may, in essence, sell either pay that amount, or sell their rights to redeem the loan.

Failure to do so means the first lien holder (usally the bank with the first mortgage) is next in line, followed by the second mortgage holder (if there is one) and anybody holding any other kind of lien on the property.

And if that duplex owner happens to sell the property for more than the amount that was bid at the sheriff’s sale, he or she is entitled to pocket the difference (less any additional penalites, interest, fees and commissions).

For some duplex owners there’s an even better outcome. Many buyers are willing to let them stay on as tenants.

For many distressed duplex owners, this is the happy ending they’ve been hoping for.

Comments Off on Calling All Minneapolis Duplex Sellers: We Need Your Help

phoneThere are hardly any Minneapolis duplexes for sale, and that has created something of a feeding frenzy.

Last week, I had several buyers write offers on properties. In one instance, for $10,000 above the asking price, and all cash. The other was almost $30,000 above the asking price, using financing.

Neither buyer got the property they wanted.

Recent news about the housing market has been optimistic; fewer people are falling behind on their mortgages, and, in February, home prices were up .2 percent nationally.

The latter is largely due to a lack of inventory caused by the banks 11 month hiatus on foreclosures, and traditional sellers holding

After all, when supply exceeds demand, prices go up.

So will we be back at 2005-2006 prices next month or next year?

Buyers are still looking for value. This means either a duplex in exceptional condition or one that’s an incredible deal. Overpriced inventory continues to linger on the market, just as it always has.

This week alone over 200 property owners in Hennepin and Ramsey counties received notices of default, which are the first step in the foreclosure process.

Barring any delays, the banks will repossess those properties 7 months from now.

If you’re thinking of selling your Minneapolis duplex, the time is now.

Please get in touch with me.

Comments Off on Prediction: Your Minneapolis Duplex May Be Worth More Now Than Next Spring

predicting minneapolis duplex valuesIf you’re thinking of selling your Minneapolis duplex, but can’t imagine hanging on to it for another 10 years, you should give it serious consideration this year.

As I’ve stated countless times, we have a serious shortage of duplex, triplex and small multi-family inventory for sale.

And yes, if the trend continues, I do see this leading to a small uptick in value through the end of the year. Small uptick. As in a couple of percentage points; not the thirty-plus percent in value we’ve lost since the height of the market in 2005-2006.

Remember, today’s duplex buyer is incredibly savvy. They are looking for value and are willing to walk away from the property if the price isn’t right.

So why is it a great time to sell nonetheless?

Because the robo-signing settlement was approved by U.S. District Court Judge Rosemary Collyer once week ago today.

Guess what’s started happening in the week since?

Duplex owners who initially were notified their lender had scheduled a sheriff’s sale as much as 18-24 months ago and received reprieves as a result of the foreclosure freeze, started receiving notices.

Six weeks from now, provided their lenders do not give them another extension, these duplexes will go to the sheriff’s sale; after which the owners will have six months to redeem the amount bid, or lose the property to the bank.

If you add the six month redemption period to the six week notice of a sheriff’s sale, it’s easy to calculate bank ownership of these distressed duplexes at some time around the holidays.

Banks will also inherit any tenants. If they aren’t interested in managing rental property (most aren’t), the law requires them to give tenants 60 days notice to vacate.

In other words, those duplexes will be ready to sell next spring.

Fair warning; many are in the most prestigious neighborhoods in the Twin Cities.

Meanwhile, it’s 2012 and duplex buyers are out in force. They’ve rightly heard that with low interest rates and a backlog of bank owned inventory (which is currently in somewhat limited supply), it’s a great time to buy.

There just aren’t many Minneapolis duplexes for sale for them to look at!

Happy Duplex News Ignores Something

said on April 5th, 2012 categorized under: Selling A Duplex

Comments Off on Happy Duplex News Ignores Something

duplexes for saleWith all of the recent happy headlines it would be easy to think it won’t be long before we return to the Minneapolis duplex values we saw in 2005 and 2006.

After all, didn’t we just get news that February’s foreclosure starts were down 15 percent from January, and 19 percent from the year before?

But I have to tell you about the elephant in the room.

Distressed properties were more than one-third of all duplex and housing sales in the nation last year.

And you can’t tell me the 7.57 percent of all borrowers who are delinquent on their mortgage payments magically received loan modifications in one month’s time.

Fact of the matter is, for whatever reason, the banks are not letting their backlog of duplex inventory (over 200 by my estimation in Minneapolis alone) hit the market. And, they don’t seem to be picking up the pace on foreclosing on delinquent duplex owners…at all.

Everybody in the real estate industry was waiting for a spring tidal wave of foreclosures hitting the market. For whatever reason, it hasn’t come.

Meanwhile, traditional sellers are waiting for exotic values to return before putting their Minneapolis duplexes up for sale; which won’t happen until everybody who wants a job has one, the backlog of foreclosures has cleared, and banks begin lending to more borrowers.

So, if you’re a duplex owner who’s just ready to be done, there’s going to be a competition gap the next several months. Demand is high, and you may well be able to optimize your property’s value – because nobody else appears to be selling.

After all, sooner or later the banks are going to have to either decide to become landlords, forgive all debts, or sell.

My money’s on the latter.

Why Selling Duplexes Is Like Selling Shirts

said on March 30th, 2012 categorized under: Selling A Duplex

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minneapolis duplex salesThe other day the New York Times ran an article about retail shopping that also talked about pricing duplexes to sell.

I’m sure the journalist at the Times didn’t intend to write about real estate, but she may as well have.

The article quoted the CEO of JC Penney, Ron Johnson, who said, “The customer knows the right price. We can raise the price all we want; she’s only going to pay the right price. And why is that? Because she’s an expert.”

This consumer expertise comes from hours spent on the Internet studying and comparing prices. Thanks to their research, consumers know they can get a better deal at either another store, or by ordering the item online.

The article detailed how several retailers, including American Eagle and Urban Outfitters, are reworking their pricing strategies to adjust to web-savvy consumers.

Duplex buyers are every bit as savvy as someone looking for a new bedspread. In fact, they may be even more so, as real estate is a much bigger purchase.

I often have duplex sellers they want to go against my counsel by pricing their duplexes 10 percent or more above my recommended number.

Their thinking is they can “always come down”, or, buyers can “just make an offer”.

The trouble with this logic, however, is that a duplex buyer is educated and if a property is over-priced from the outset, they won’t even go through the front door. Because they’ve been shopping online, they know they can get a comparable property down the street for less.

And once the property’s been sitting, to consumers, it becomes like last fall’s sweaters– too expensive for what it is. At that point, the only way to sell it is at a discount.

In other words, when the duplex goes “on sale” at a price usually below what it might have brought had it been priced right from the start.

Do You Have A Duplex To Sell These Minneapolis Buyers?

said on March 28th, 2012 categorized under: Selling A Duplex

Comments Off on Do You Have A Duplex To Sell These Minneapolis Buyers?

minneapolis duplex sellers wantedWith an extreme lack of inventory of Minneapolis and St Paul duplexes for sale, I thought I’d ask whether any of you might have a duplex you’d consider selling to one of my pre-qualified buyers.

If you have something that matches one of the duplexes one of these buyers is looking for, please let me know!

Jordan – A first time home buyer/investor who would like to find a duplex, triplex or four unit building in the Uptown/Wedge area. While he’s ambitious and not opposed to work, the property needs to be in reasonable condition, make financial sense and have some charm. His preference is the Craftsman era of architecture.

Tim – Another first time home buyer/investor who would also like to find a Craftsman or mid-century duplex. He is open to doing some cosmetic work, but as he comes from a family of engineers, structural issues are out of the question. He is open to buying a duplex in a number of areas, including Northeast, Uptown, Kingfield, Prospect Park, near the University of Minnesota, St Thomas or Macalaster.

David and Linda – This couple are established home owners interested in down sizing. They intend to live in one half of the duplex, with their son and his young family living in the other. They prefer one level living or a minimum number of stairs, two or more bedrooms, an attached garage, and a duplex that’s in great shape. They would like to find a duplex in Southwest Minneapolis, Edina, St. Louis Park, Hopkins or West Bloomington.

Sally, Aaron and Mirian – Another family looking to split two sides of a duplex. They prefer something with big kitchens, two or more bedrooms, an attached garage, and in one unit, room for a home office/business. They are not opposed to updating paint or redecorating, but major repair projects make them uncomfortable. They are looking in Bloomington, Richfield, Hopkins, St Louis Park or Robbinsdale.

Joe – This buyer recently had a job transfer from Detroit, and has fallen in love with the Twin Cities. He is looking to owner occupy a duplex, triplex or fourplex in either Minneapolis or suburbs west. (His employer is located in Minnetonka.) As his career in the financial sector demands a great deal of his time, he is looking for a property in good repair that also makes financial sense.

Simon – A first time duplex/investment proeprty buyer whose ideal location is the Bryn Mawr neighborhood. He is looking for a duplex with two or more bedrooms in each unit. He prefers something with charm and, if possible, a view of downtown.

Jeff – An experienced investor who also owner occupies, Jeff is not opposed to projects. He is looking for a 1950s-1960s vintage side by side duplex in the Seward, Longfellow or Powderhorn Park neighborhoods. Because he’s not afraid of work, he’s interested in buying a duplex at a discount and earning sweat equity.

Derek – A first time home buyer who’s looking to owner occupy a property in Northeast Minneapolis. He’s an architect, so he’s looking for something basic that he can put his own flourishes to. He’d prefer two or more bedrooms and a big back yard for his black lab who’s been living in an apartment too long.

George – An investor who’s not afraid of more extensive cosmetic work. A property must make financial sense. He is primarily interested in properties in the south metro.

Caroline – As a veteran and native of the Lake Nokomis neighborhood, Caroline is interested in finding a duplex, triplex or fourplex in that area, preferably with easy access to the VA. She intends to reserve one unit for extended stays; giving veterans or their families a comfortable place to stay while receiving medical care.

Adam and Kari – An ambitious young couple who moved home from California to start a family as well as their investing careers. They are concentrating on single family homes, duplexes, triplexes and four unit buildings near either campus of the University of Minnesota. They are extremely handy and not afraid of projects and bigger repair work.

Mark – An experienced investor who is open to investment properties almost anywhere in the Twin Cities, provided their rate of return meets his criteria. Some amount of work is OK, but major rehab projects are not. He is capable of closing quickly if someone just wants out.

If you have a Minneapolis or St Paul duplex that matches any of the descriptions above that you’re thinking about selling, or would be open to selling if the right buyer came along, please call or email me. After all, selling a duplex doesn’t always have to involve completely putting it on the market.

Comments Off on Why Now Is A Great Time To Sell A Minneapolis Duplex

open window selling a duplexWhen is a good time to sell your Minneapolis duplex?

Now.

No, prices aren’t what they were in 2005-2006.

And they aren’t going to be anywhere near there for quite some time.

So why is NOW a good time to sell?

Because during the week ending March 17, there were just 28 duplex, triplex and fourplex listings newly  for son the market. Last year during that same week, there were 22 percent more new properties for buyers to choose from.

Of the new listings, most (53.6 percent) were being sold by traditional sellers who did not need a bank’s permission to sell. This represents a market share increase of 3.6 percent from last year.

Meanwhile, there were 17 Minneapolis and St Paul duplexes sold the third week of March. Of these, 52.9 percent did not involve a bank in the sale negotiations. While this number represents a 29 percent drop in new inventory compared to the week one year ago, it’s important to note just 16.67 of those sold properties were owned by sellers with equity.

In other words, the banks don’t seem to be offering as many of their Minneapolis and St Paul duplexes for sale.

And yet, here’s the real news…according to my crude estimates, there are over 200 bank-owned duplexes currently on the books, but not on the market.

I wish I could tell you why they aren’t selling them, but I honestly have no idea.

Worse yet, I couldn’t even begin to guess when they will offer these duplexes for sale; or foreclose on all the owners who are behind on their mortgage payments.

They simply aren’t doing it right now.

Which gives traditional Minneapolis and St Paul duplex sellers a window to sell…

One that won’t stay open forever.

Comments Off on How To Keep Tenants Happy When Your Duplex Is For Sale

duplex chick for saleOne of the biggest concerns many prospective duplex sellers have about putting their duplex on the market is that the tenants will be upset and leave.

After all, nobody likes to have a parade of strangers through their house day after day.

And, more importantly, this parade causes many tenants to fear as soon as the duplex is sold they won’t have a place to live.

Many duplex sellers I work with have found these fears can be addressed through a simple, honest conversation and sometimes, a little cash.

First, in the state of Minnesota, duplex renters are protected by their lease. If, for example, they recently signed a one year lease, then that lease would follow the property and protect them for the duration of the contract.

The only time that would change would be if the tenants agreed to move as the result of financial compensation, the amount of which is negotiable (in states and cities that don’t have laws governing this).

Many duplex sellers I work with also remind their tenants that in the state of Minnesota, the landlord has the legal right to enter the property for business purposes, provided a reasonable attempt to notify the tenants has been made. (Nowhere in state law is “reasonable attempt” defined.)

Having said that, duplex sellers often reassure their tenants that while every attempt will be made to give them as much notice as possible, there will likely be instances where it’s somewhat last minute.

Duplex sellers then usually conlcude by offering a rental discount because of the inconvenience this will cause their residents. Some duplex sellers even make this discount contingent on the level of showing cooperation the tenant demonstrates.

Believe it or not, once the tenants know the process, most of my owners have found them to be enormously cooperative.

After all, most of us fear what we don’t know, rather than that which we do.