Looking Out From the Garage: June 2007

I received an interesting call today.  When I first came here, one of my first blog posts was about a phenomenon I called "House Stalking."  Original post may be found here http://activerain.com/blogsview/123630/House-stalking.  Well, today I had a call from a reporter with the New York Times that is doing a story on this.  No, he didn't get the idea from me... I'm kind of relieved about that, too.  But, apparently there are a bunch of us that have our eyes open for specific houses.

He promised to keep me updated on the progress of his article.  

BTW, he found the blog from a Google search... so, we're on the map.

The family just got back from a visit to New Orleans.  We stayed in a rental condo just outside of the French Quarter, near Decatur and Frenchmen streets.  It was a great place to stay.  

We spent the majority of our time in the French Quarter.  We did have to run over to Slidell for a wedding reception (1/2 of the reason for the trip).  We did, however, see some of the left-over damage from Hurricane Katrina.  We spotted a few things on the way in along I-10.  The Six Flags park is closed... and not coming back.  There were areas where all of the trees were dead.  We were told that the ones that didn't get taken down by the winds died from the salt water that flooded into the area from the canal/levee breaches.  The drive to the Quarter from the interstate also showed us a few damaged houses.  

From the perspective of a tourist, New Orleans is back.  The "touristy" things have pretty well recovered.  The city knows that right now, their most valuable resources are visitors.  Not only has the city government embraced visitors, but the businesses that cater to visitors have embraced us as well.  I can't count how many times I heard "Just tell everyone you know that we are here... and want them to come, too."  So, I am.  Bourbon Street was friendly.  Drink prices were pretty good.  Cover charges didn't exist.  The bands were good... and plentiful.  

From the perspective of a resident, there is a LOT of work that needs to be done.  So many businesses have just stayed out it is amazing.  The Home Depot, and daiquiri stands (even far from Bourbon Street) are doing well.  But, there are so many holes in the business fabric of New Orleans it is amazing.  We were also told that housing is still short.  

From a real estate investor standpoint... things look wide open.  I think that one could go in and buy entire subdivisions.  Mid-priced and entry level homes look to be needed.  Commercial property in plentiful, but finished space is at a premium in many areas.  One of the biggest opportunities I see is to revamp larger tracts that are nearer the city center, and raise the price level of the area.   There also look to be some great opportunities with some of the apartment complexes.  I would say that refitting, and converting to condo could have a HUGE profit potential.  Even with very affordable pricing, some of the complexes might be turnable for very good margins.  The main challenge looks to be getting workers in that aren't already so b usy that they can walk from your work.  

Bottom line... Go visit New Orleans.   They need you.  And it is a great time to see the sights.

Every time I see one, it reminds me of one of those hospital gowns that your butt hangs out of.  Three sides are fine, but that fourth side just isn't making it.  What am I talking about?  Three sides brick homes.

I like brick.  My house is brick... all four sides.  But three sides brick is just something I don't get.  One of the great things about brick is that it's low maintenance... but if 25% of your house still needs to be painted every couple of years, it is no longer low maintenance.  

I certainly understand it from the perspective of the builder.  If you are building 500 houses, and you can save $3,000 per house, that is $1.5M.  That's enough to buy a really cool car after taxes... I mean REALLY COOL.  But, for a home owner, I don't get it.  The $5,000 or so that it would take to cover the last side with brick is minimal.  And the house would look SO much better.  And, the money will be paid back in a couple of paint jobs.  

Now, brick fronts I can deal with.  In that case, the cost difference is more significant.  I'm not in love with them, but they make more sense to me.  They still need the same maintenance as a sided house, but 3/4 of the house just seems to be more logical to me.  

Odd I know, but what do you think?

Garages are a specialty.  Oddly, after deciding that I really wanted to focus on fellow gear heads, I find that there is more of a need than I thought.  Personally, the garage has always been one of the first places I went to when looking at a house.  I guess I enjoy it in the same way a cook enjoys the kitchen, and a movie buff enjoys the media room.  

And then I catch a news story that garages are the new exercise room, kinda like pink is the new black.  It seems that there are a lot of people like me that enjoy the time out in the garage.  The garage make-over business has become huge.  There are tons of products to enhance the storage, clear the clutter and generally beautify the garage.  Of course, after getting it cleaned up, there are about 300 different flooring options ranging from industrial coatings worthy of a NASCAR shop, to snap together tiles that allow designs to be put on the floor.  In fact, one of the garages I was in recently had the floor faux painted to look like Italian marble.  Personally, I like the race shop look, but those coatings aren't fond of weld spatter and plasma slag (that's right kids, plasma is not just for TVs).  I'll probably end up with acid washed, polished concrete.  It looks cool, and it will stand up to most everything.  But I digress.

Back to the topic.  Garages aren't just a place to store the car for some of us.  It is more of a combination shrine, workshop and trophy room.  It's a place to work on the latest project, and hang out tossing BS with a few friends.  It's a place to recharge the spiritual batteries... and the battery from the lawnmower, occasionally.  

So, as we walk through, we look at how many receptacles there are, and where they are, how many are 220 volt, and what type of lighting there is.  We look at the layout of doors and windows, just like many would in a living room.  We look for cable or satellite jacks (I told you we like to hang out in the garage).  We look at the size of the doors (I drive a truck that is 8 1/2 feet wide, and 6 1/2 feet tall, and my last Jeep was 6' 9"... in a world of 6' 8" doors).  Just as my wife would mentally place our furniture in the family room, I place my projects, tools, and parts in the garage.  I wonder if the space will work as I need it.   

So, if you are a car buff, and looking for new digs in the Gwinnett area, look me up.  If you are an agent that has a car-centric client, keep the above in mind.  

I look forward to your comments.   

I was out showing a house to a contractor for a buyer today.  As they toured the house and sized it up for renovations, we spent a lot of time chatting about the market, strategies for prospering, and building wealth through real estate.

While I'm not enough of a typist to cover everything that we said, I would like to pass along a few of my impressions of the conversation.  Keep in mind that I am the agent of the seller, and therefore not working "for" this buyer.

As a little background about the property, it is a nice entry level home in a suburb of Atlanta.  It has a pretty good sized yard, and reasonable location.  It has been partially remodeled, but some of the work is a little less than desireable.  The kitchen was done a bit too cheaply, but the new windows are really nice.  It is priced at about $190k in a subdivision that ranges from $160k to $235k.

The buyers wanted to talk about "completely" redoing the house.  Replace all of the carpet with hardwoods, tear out the entire kitchen and start over, as well as re-do all three bathrooms.  Finally, they want to remodel the lower level into a new master suite.  The cost of the renovations looked to be around $40k.  Frankly, I think it would end up closer to $60k by the time it was done.  I also think it is too much to spend on the house.  The house is currently worth about $200k, but the sellers need to get it sold, so it is priced competitively.  After the renovations, I think it would only pick up about $25k to $30k in value.

Now, normally I wouldn't present too much of an objection to that proposition.  After all, if one is going to buy the house and live in it for a good long time, then much of the value of the renovation is made up in increased liveability.  In this case, the buyers are looking to move up the property ladder, or use it as a rental property after they buy their next house.  Since that is their situation, I think that spending closer to $10k on the house would be a better investment.

So, the tidbit is this:  Don't over-improve a house unless you are willing to not be able to recapture the cost.  Spending money (especially on kitchens and baths) can greatly improve the value of the property.  However, building it past the norms of the neighborhood isn't such a great idea.  Granite counters, limestone showers and commercial stainless appliances are cool.  They add value to a home.  However, they may be out of place in a mid-priced area if you are expecting to recoup the investment.

That is the question!

HOA, or Home Owner's Associations are the subject of some debate.  They are either a useful body to help maintain the value of homes within the subjected neighborhood, or they are a bunch of nosy, busy-bodies that need to remove their noses from everyone's business.  

The purpose of a HOA is to provide uniformity for the community, make sure that homes are maintained, and administrate the rules of the community.  But, just as they can help to insure that the people next door don't paint their house lime green with orange trim, they might also prevent one from parking a <gasp> pick-up truck <gasp> at your house.  It all depends on the rules of the community.  

There is certainly a trade-off.  As an automotive enthusiast, and one that likes to do his own wrenching on occasion, I would opt to NOT live in a subdivision with an active HOA.  But, I have friends and clients that are in the same hobby, but have chosen HOA neighborhoods.  Others have gone as far as to restrict their searches to homes not in a subdivision at all.  

The bottom line is that there isn't a simple answer, and it can depend upon one's personality, and how much of a "disturbance" one might make... As well as the individual community's rules.  But, remember that if one is looking in a subdivision, one needs to know if there is a Home Owner's Association.

I had a new experience today.  Not that I am new to real estate, but I just hadn't had the occasion to hang out for one of these.  I attended an eviction.  The clean-out crew, locksmith and Sheriff's Deputy we all scheduled to arrive at 1:00.  I got there a few minutes early.  My job was to take a look at the property, and put on a lockbox with the new key. 

The rest of the players arrived, and the deputies entered and cleared the house.  There was nobody inside, there were no guns, cash, drugs or other things that needed to be secured.  We all walked into the house, and the clean-out crew began to take a few pictures.  Very little remained, and most of what was left was piled in the garage.  It was first staged to the driveway, then loaded into a trailer for disposal. 

While the clean out crew took care of the contents of the house, and removed all of the trash from the yard, I had the opportunity to talk with the Sheriff's Deputies and the owner of the Foreclosure Services company.  I already knew that the Atlanta area was near the top of the heap in foreclosures, but it hadn't really sunken in.  The service guys are handling as many as 4 houses per day with each of their 4 crews.  The Deputies are part of a department  that just deals with evictions.  This is what all of these other people do all day, every day.  And it's getting worse.  The Deputies are backlogged, as are the clean out guys.  And they are looking at increases over the next few months.  

While walking around the house, which was pretty well stripped, I could get clues about the people that lived here.  One bedroom was pink, and had a "Little Princess" light switch cover.  Another was dark green, but had a lot of small hangers in the closet.  There was a small girls bike, and a little boy's bike.  Obviously this was a family with a couple of young children.  They drove a minivan, and the last seat was still in the garage.  Aside from the trash all over the front and back yard, there were plants still in the trays from the store.  The house, aside from the previously mentioned junk and a few spots that looked like moving damage, was in pretty good shape.  The carpets needed to be replaced, and the house needed to be painted.  The landscaping needed to be caught up with, and the outside trim needed to be repainted.  

Outside, in the 95* heat of Atlanta, we talked about how a nice family could get to the situation where they would take what they could, and abandon their house.  As a REALTOR, I know that there are options.  Selling before foreclosure, even if it is a short sale is the last tool in the box, but it is an option.  The banks don't want to own the property.  Let me repeat that.

Despite what some people believe, the bank does NOT want to own the house.  They don't want to foreclose.  They don't want the scene that I was a part of this afternoon to be played out.  They don't want to spend the money to bring in the cleaning crew, or the locksmith.  They don't want to pay a lawyer to file the paperwork to bring the Sheriff's Deputies out there.  They don't want their clients belongings to be loaded into a trailer to go to the dump.  The Deputies don't want to stand around on a hot day and watch the work going on.  They don't want to have to confront someone that has to be evicted.  The bank doesn't want to sit on the house for months waiting to sell it at a loss.  And, as a REALTOR, I'd rather have two people that are happy the house is changing hands. 

If you are in trouble, don't bury your head in the sand.  Ask for help.  You might have the opportunity to avoid foreclosure.  You might be surprised that the people at the bank really don't want to foreclose.  But, they need your help, and they need to see a plan.  

Not too long ago, I had a friend and client tell me that he and his wife were "stalking" a house.

Around the corner, in the same subdivision they were in was a house that they loved.  In their case, they were friends with the owners, and joked that when their friends moved, they wanted the house.  It got me thinking... always a dangerous act. 

My wife and I have been stalking a house, too.  We don't know the owners.  We just admire it as we drive by.  Every day.  Several times.  OK, the route to my son's daycare goes right by the house, so each time we go to take him or pick him up we drive right by.  There is a beautiful front yard.  We are talking about a golf course quality yard.  I'd have to hire someone to keep me from killing it.  There is also a full basement.  My wife likes that.  But, the draw is the "extra" garage.  If I had to take a guess, I would say it is in the 3,000 square feet range.  Of course there is a three car attached garage, but that would be for my wife's minivan, and some lawn stuff.  The 3,000 sf garage would by my "man pit."  I could spread my automotive projects all over the place.  I would be in heaven.  

But, it's too much.  Well, it isn't for sale yet, either.  But, if it was it would be too much.  Maybe by the time the current owner tires of it, we'll be ready to get it... or we will have built a home to fit our needs.  I'm not that patient.  

So, who else has stalked a home?  Did you get it?