Friday, February 11, 2011

Simple and inexpensive ways to make your home shine

In this crazy housing market, I spend a lot of time talking with sellers about the relative value of improvements to their homes.

While each case is different, given varying degrees of equity, home locations and styles, etc, there are some constants invariably apply across the board.

The first one is PAINT. PAINT! It is ALWAYS a good idea to make sure your home is well-painted. Paint is so cheap, especially relative to the value of the impression a good paint job makes on a prospective buyer. If you only do one single thing to prepare your house for sale, I recommend PAINTING. (Have I said that enough? And with enough capital letters? Let's give it one more try: PAAAAAAAAAAAAINT!)

I don't recommend white, either. Although painting everything white is still better than not painting at all, presuming the walls are anything less than perfect to begin with. Consult home decor magazines, the internet, or your real estate agent for tips on what colors would work best for your home. (Also note: I'm talking primarily about interior here, but the same rules apply for exterior as well. If your color is anything less than fresh, I recommend a paint job. And there should be NO PEELING PAINT ANYWHERE AT ALL. Just trust me on this.)

The second thing is lighting. Pay attention to it. Have enough of it. And try not to have it all be from Home Depot, if possible. I highly recommend lamps. Lower wattage bulbs with soft, warm light are highly superior to those super-bright CFLs, for the record. Even if you want to save the planet with the decreased energy usage that CFLs provide, I recommend swapping them out for soft incandescents AT LEAST just for the period during which your home is on the market. You will see the difference and so will the buyers.

And third, if you have natural woodwork, consider its condition. Is it dull? Are there any scratches or paint splatters? It's not difficult to clean up those small mars and then spruce up the wood with a fresh coat of stain or shellac. I know because I've just done it in my home.

When we live in a house for some time, it can be easy to grow used to the little faults and blemishes, and stop seeing them. But believe me, buyers will see them. So it's important to look at your home with a fresh eye when sizing up the need for cosmetic fixes prior to listing.

And, on the subject of woodwork, another cheap and easy way to give your rooms a boost is adding some sort of trim-work. That could be chair-rail, picture-rail, or crown moulding. In my house, I just had picture-rail installed in the living and dining rooms. The total cost for the wood itself was under $60.00, and with stain, mastic and nails it was still well under $100 (I'm guessing conservatively here because I already had the additional supplies.)

I wish I had a before photo, because these rooms in my house were disgusting when I moved in. White walls, splattered woodwork, dingy light fixtures with icy CFL bulbs, the works. It was awful. But with just a bit of paint, lighting and woodwork help, we now have this:

And yes, in case you were wondering, I am thinking of selling my home this year, and finding yet another fixer-upper. I am totally addicted to this process.

Know anyone in the market?

Wednesday, February 9, 2011

Don't buy high and sell low

Alex Stenback has a GREAT post over at Behind the Mortgage, which anyone interested in real estate should -I think- go and read immediately.

Alex hits on something that has perplexed me for a long time, and that is the sort of herd mentality that many people have about real estate.

As far back as eight years ago, it seemed like everyone around me was into buying real estate. At parties and social gatherings, new homes and home projects were a constant topic. If a renter was uncovered in the room it was highly likely that s/he would be overwhelmed with bossy proclamations about how s/he was missing out THE GREATEST OPPORTUNITY EVERRRRRR... because homeownership and real estate was totally where it was at.

I had a friend who bought a small condo off of Excelsior at 38th in St. Louis Park. He got seriously lucky over the whole Excelsior/Grand development, and sold for a tidy profit. I was pleased for him. But then he took the money and invested it into no fewer than ELEVEN different rental properties, all of which he paid top dollar for.

I remember discussing the shift with him and expressing concern that the rents may not be sufficient to cover his loan payments, given the high prices of the properties he was purchasing. He told me that he'd make it work with fat Section-8 rents, and that he wasn't worried, because even if that didn't work out, he'd still realize appreciation on the values and could sell the properties if need be.

Well, a couple of years later, he was in bankruptcy. And, the worst part in my view was that he didn't even have a homestead. After selling his condo, he plowed all the gain into investment property down-payments and then rented an apartment for himself. (Interestingly, it seemed that he didn't care to live in the neighborhoods where he invested, which is why he didn't occupy one of his own units. That set off a red flag of an entirely different nature, which I'll save for a future post.)

At any rate, this friend's situation was particularly dramatic, but there were others who got in over their heads even with their primary residences. You probably know a person or two like that - it seems these days that we all do.

So why did everybody believe they needed to buy? Why were buyers engaging in bidding wars, pushing home prices skyward in their desperation to experience ownership?

I really have no idea, to tell you the truth.

Just like I have no idea why today, when home prices are in the tank and half the houses in my neighborhood could be owned for ONE HALF of the monthly expense of renting around here, many people are still terribly hesitant to buy.

Alex called it a "fear bubble."

And I get that. Some people are scared that prices will continue to fall. But consider this: Unlike with price increases, which theoretically could continue on into oblivion, price decreases do actually have a lower bound. A forty thousand dollar house can only decrease to zero/FREE. (Do you think sellers will start giving homes away for free? I suppose it's technically possible.)

But let's say you find a forty thousand dollar house and its value plummets to zero in the course of four years. That's about $834 in value lost per month.

Which is cheaper than the average rent for a three bedroom unit.

So do you really win by renting?

(And we haven't even gotten into things like mortgage interest deduction, potential rental income in the case of duplexes, etc.)

It's time to pop the "fear bubble."

Tuesday, February 8, 2011

Anonymous threats and stalking - why Northsiders don't want to talk

As Sheila Regan and Ed Kohler both illustrated lately in the Twin Cities Daily Planet and The Deets, there's a bit of drama swirling around the Northside blogosphere these days.

What's unfortunate is that the most nefarious aspects are being perpetuated under a cloak of anonymity.

There's been plenty of speculation as to the identity or identities of the "Jordan Hawkman Group*" but of course, unless someone sues them (or Blogger/Google) it seems unclear as to whether or how these theories can be proven. (But in case you haven't been following the story, word on the street is that it's at least partially Don Allen. Hence the above-linked stories causing a backlash on JHG.)

In the meantime, the angry personality(ies?) hiding behind this moniker are having a grand old time spreading misinformation and -in some cases- outright lies about a variety of Northsiders.

Is it any wonder that nobody wants to talk?

Here's an email I received from "Jane Doe" just today:

from Jane Doe
to Minneapolis Girl
date Tue, Feb 8, 2011 at 9:59 AM
subject Constance E. Nompelis
hide details 9:59 AM (2 hours ago)
Don't feel left out as of late, we have not been forgetting about you.

JHG has a few questions for you:

1. How is the completion of the TISH orders coming along for your North Minneapolis House?

2. Were you involved in any way with the Jeff Skrenes accident? In any case, was there alcohol involved in his accident?

3. Have you ever been investigated for Real Estate transactions? Which ones?

As you well know, we keep our word as to what is on the record and off the record. If we dig up the answers on our own we have moved forward with stories. As stated before, we are willing to put up your side of the story....your call.

Your friends at JHG

For the record, this is not the first time I've been contacted by JHG, and while the questions in this particular message are mostly related to me, in the past they've attempted to blackmail me for info about others. Take this message, for example:

from Jane Doe
to Minneapolis Girl
date Sat, Aug 28, 2010 at 8:17 AM
subject Time
hide details 8/28/10
What's it going to be?

We know you represented the buyer side of Goodmundson's house among other things. We have known this all along, yet have not brought it up when there were logical times to publish it. That should prove that JHG can be Connie friendly.

Now would be the appropriate time to slide us information that focuses our attention towards Hoff and Goodmundson. There are others working with us already. Don't be late to the party, because it will not count if you are.

The dumbest part about it all though, is that threats of exposure *should* only work if the threatened party has actually done something wrong. The JHG have implied OVER and OVER again that I had some unethical or illegal role in Megan Goodmundson's home transaction, but the reality is that I did not. The JHG have also implied OVER and OVER again that I have romantic relations with any number of Northside characters, but the reality is that I do not.

So why should I (or anyone else) be afraid?

Well, because they lie. And lies really suck.

And I know a dozen other people over here who won't dare say one word about any of the local issues because they're afraid of some anonymous-lying-COWARD-blogger posting lies about THEM TOO.

Which really is a terrible shame.

I spent a few months trying to ignore this whole mess, hoping that it would just die down, and feeling like the best response was none at all. However, things have not in fact died down.

So, I decided to respond.


Oh, and for the record, I'm happy to answer the questions posed in the initial email. Here goes:

1) All the corrections have been made. (PS - Did you notice the beautiful new paint job on my home? I know you drive by it a lot as part of your intimidation efforts.)

2) Nope. Jeff's car accident took place in Northeast Minneapolis and I was nowhere near him at the time. (But how nice of you to take the friendly act of picking him up and driving him to the hospital and try to twist that into something seedy.)

3) Not unless it's been so super-secret that I wasn't informed about it. (And not unless your obsessive googling and defamatory insinuations count... which I don't believe they do.)

*Which I REFUSE to link to. If you want to read that garbage and you don't already know where it is, please consult with Google.

Saturday, February 5, 2011

Reflections while scrubbing woodwork

When I first bought the house I now live in, I basically hated it. And not only did I basically hate it, but in uncharacteristic fashion, I had little hope that my sentiments would ever change. Part of it was due to the extreme nature of its hose-up-ness, but also, I now realize, in part due to the particularly grumpy stage of life I was passing through at the time.

In any event, two years later, much has evolved for the positive, both for the house and for my general disposition.

As I ponder the various options this new year has brought to me, I cannot help but also reflect upon the amazing transformation of this house, and my attitude toward it.

There are still things to be done, for sure. But Now I look at them with (mostly) good humor, and I know that they can be accomplished. I also know that this house has finally become a home. And I like it.

Friday, February 4, 2011

Remembering the Petro Stop

Here are some not-so-great photos of some REALLY GREAT photos:

Wednesday, February 2, 2011

Using your IRA to invest in real estate

Did you know that it's possible to invest in real estate with funds from a self-directed IRA?

Yeah, I didn't either until several months ago, when I learned about it from a savvy new client from another state, who I helped purchase in just this fashion, here in Minnesota. I was a little uncertain about how the whole thing worked, so I consulted an estate planning attorney, several custodian firms, and -of course- the internet.

What I found was that it's a surprisingly simple process!

There are some restrictions of course, and it's always wise to consult tax and estate-planning professionals when considering purchasing real estate for any purpose, whether investment or homeownership.

Nevertheless, it's always exciting to learn and share information about new ways to invest in real estate!