One small child can change the world.
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Refreshed and Ready
First, I’d like to thank the many, many of you that commented and emailed about my short blogging vacation. It was appreciated. I started blogging in January of 2006. That’s like the pioneer days when you think about it. At least where real estate investing or real estate is concerned. And with very few breaks I’ve blogged continually. So it was a much needed mental rest. 🙂
While I was away I ate a lot of food that wasn’t so good for me. Watched a ton of college basketball including teams I may not get to see again until March. And even had time to go out and look at a few potential rental properties. Oh, and did I mention last weekend I got a call from my tenants in Olathe saying the fridge had shot craps?
I’ll end this post with a message I’ve been screaming for years and years. Keep a reserve for your rental properties. With one phone call I had to spend $800. $800 over the Thanksgiving weekend and Christmas right around the corner. $800 when real estate investment property sales are down from last year. $800 of cash.
If you do not keep a reserve that $800 would have to come out of your personal account. Try explaining to your kids why there will be no Christmas. Plan, save and be diligent with your money. Someday, you’ll be glad you did.
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Blogging Vacation
I keep searching but for whatever reason I just can’t seem to find my muse these last couple of weeks. I feel like Stephen Phillips, the neurotic screen writer. (If you have not seen Albert Brooks’ The Muse you simply have not lived.)
I’ll be back in touch after Thanksgiving. Enjoy the turkey, football and basketball. I know I will.
Chris
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Sorry I’ve Been AwayBut…
…how can I be busy every day and yet don’t think I accomplish anything?
…thank Goodness Zach Greinke won the Cy Young. Otherwise my head was going to spin right off my head.
…just heard the dumbest reason a house can’t close. Seriously, the reasons just keep getting more and more ridiculous.
…interest in real estate investing is rising again. Though action has yet to follow.
…Kansas plays Memphis tonight. If you need to talk to me after 9:00 pm CST, good luck. 🙂
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Honest To God, Fannie Mae Doesn’t Get It
I have ranted and railed against Fannie Mae and Freddie Mac here on this blog before. Not only do they put up barriers to a true real estate recovery by keeping real estate investors, actually qualified real estate investors, on the sideline but in addition they staff themselves with asset managers that just don’t seem to understand real estate. Seriously.
Read the link above to see previous self-defeating decisions they have made. But now I have a new story.
I represent a buyer who contracted a Fannie Mae owned duplex in the Kansas City area for $140,000. Based on comps we felt this was a bit high but that taking this position would ensure my buyer got the property for a good price wherein he could do the necessary repairs and still have room for cash flow.
Bank of America did an appraisal that came back at $120,000, because of a very recent fire sale that Fannie Mae had held a short distance from the property in question. So we submitted an amendment to the contract changing the sales price to $120,000. Fannie Mae would not sign, not that they ever got around to signing the original contract, but after about 5 days of communications decided to order their own appraisal.
How did their appraisal come back? $130,000. So they will sell the duplex for $130,000, right? No. Their answer is to ignore and reject my ready, willing and able buyers and to discuss a price reduction in the “future.” We are welcome to watch the Kansas City MLS and submit a new offer when that does, or doesn’t, happen.
How does Fannie Mae get away with just suspending the realities of our current real estate market which they helped to create? How does hanging on to another asset for a few additional months and then inevitably dropping the price to $130,000 help? People, your tax dollars are at work here. The machine is clogged up with “decision makers” located in NW Washington, DC and Dallas (I believe that’s the location of the asset manager) making decisions about whichever local market you live in. I would seriously doubt if this asset manager has any actual real estate sales or appraisal experience. But I’m quite certain the AM has a minimum of 2 weeks paid vacation, health care benefits, and leaves promptly at 4:59 pm each afternoon.
It’s bad enough that we are in this current real estate situation. It frustrates me to no end to know that it’s difficult to get out of it when I see the decisions being made by people who are supposed to know what is going on.
Swine Flu Had Yours Truly
I literally went from feeling normal (such as that is for me) to feeling achy and knowing I was going to be sick in less than an hour. Most of last week I had a temperature and still this week I have a lingering cough, cough, cough that comes along with full recovery. Yes, folks. I had the swine flu. Pretty cool, eh?
But in our modern world of political correctness we cannot upset the swine so I’m told it is now called H1N1. Whatever. Four of us got it. Myself, my second son and my first daughter and the little friend from across the street. My wife, oldest son and youngest daughter have skated through unharmed. Funny. We all live in the same house and breath the same air. Guess I’m just one of the weak ones.
As I sat reading and researching all last week and weekend I learned a lot about our current real estate market. More of that to follow. Till then, cough, cough.
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Has Kansas City Been Abandoned?
Yahoo! has a story titled America’s Abandoned Cities. And guess who comes in #1? That’s right, Kansas City! I hadn’t realized that the streets were so empty! 🙂
Seriously, I don’t doubt their numbers at all. But I will say I’m almost 100% positive that the bulk of the vacancies on rental properties and home-owner foreclosures alike are mainly in 3 different zip codes.
There are a increased vacancies in a lot of areas surrounding those 3 zip codes. A true 5% vacancy neighborhood is not too hard to find. But it’s not all that bad in the key suburbs. That’s until you get out on the fringe/new-growth cities. There vacancies climb back up a bit.
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BBQ Capital | Kansas City Real Estate Investing 