Episode – Houstonius

Does a real estate broker add value to a transaction? How many people are involved in a transaction? How much is your real estate worth? We reveal the Not Obvious. There are often unusually or unexpected problems. What are the underlying main issues? You should ask revealing questions and find the true answers. Who, What, Where, When and How ?? We know what to do and we enjoy helping people. Listen to our discussion about real estate.   Here is the dialogue of this Podcast ----------------- Welcome to our podcast about Snakes, Landmines and Grass Fires. We are at the Poodle Ranch. How Does a Real Estate Agent add value to your transaction and your property. WHY? We reveal the Not Obvious. There are often unusually or unexpected problems. What are the underlying main issues? You should ask revealing questions and find the true answers. Who, What, Where, When and How ?? We know what to do and we enjoy helping people. Phone us to discuss real estate. We can make this discussion in three parts 1. Before the contract is written 2. While writing the contact 3. After the contract is signed and executed and before final closing. Depends on experience of the client. Does the client know the need to collaborate with an experienced agent? Even experienced buyers and owners know that experienced agents can all value by drawing on their vast history of transactions. This podcast will discuss past nightmares and challenges. Each transaction has different physical features, characteristics and odd actors and characters. Here is a list of 21 people that may be involved. Not all of them in each deal. Buyer Seller Buyer agent Seller agent Title company Building Inspector Bug inspector Mold inspector Environmental consultant Hydrostatic plumbing inspector Surveyor 1031 Tax Deferred Exchange 3rd Party Intermediary Commercial mortgage broker Residential mortgage broker Property manager Real Estate attorney Insurance agent Residential appraiser Commercial appraiser Residential lender Commercial lender Owner Association Each person has a different responsibility and world of experience. Importantly, each involved institution and organization, (both public and private) hire new personnel and frequently create new policies which affect a transaction. Active experienced real estate agents may have dealt with those people and institutions, thus they know what to watch for. This year I represented a seller and two buyers in 3 transactions which all dealt with that one specific lender in California which has 2 offices in Houston. The lender administrative personnel has unrealistic expectations and policies which we had to work around. We will discuss this type of lender and that transaction in another podcast episode. What happens before the contract is written? We talk on the phone and you visit the website at Houstonius.com, and you decide if we should meet. I have no planned presentation to sell you or convince you to sign a contract. We meet and you ask important questions. From that discussion, you, the client, will know and I will know that I can help you, or not. The prospective client knows … because I ask the right questions. Are we right to work together? If you are a buyer, we discuss your objectives and what you want to buy and challenges which we may encounter.

To find a property and add value, look for properties which need repair or which do not offer features which are now popular. You can add Covered parking Additional storage Make it pet friendly, such as covered dog runs. Make it gated and locked or add fencing Resize windows to add light Add accent lighting behind ceiling crown molding Add sky lights. Install wi-fi door locks Add outside lockboxes for deliveries Add outdoor wi-fi internet real time video There are many features to add value which do not require repairs. They are add on features. As the city changes and properties get older, buildings can become functionally or economically obsolete. This can create an opportunity to add value to a property. You can also RE-purpose the use. As an example, you can find a multifamily property on a loud freeway which makes it hard to sleep and get high rent. Change it to a commercial use such as retail or office space. But leave the bathtubs, otherwise the city inspector will require changing all wiring from residential to commercial specs. Just put a bookcase on top of the bathtub after the inspector leaves. Actually, some business tenants travel long distance to work and prefer a shower onsite, instead of traveling home before their next appointment. I know of a 6 plex multifamily apartment property on the 610 Loop South. Too loud for tenants to sleep. Consider converting to white collar offices with signage for an insurance agent or a law office or an accountant. I want to buy the land next to it for additional parking. Again …. Leave the bathtub and put a bookshelf on top. Yes …. To repurpose the function of a building can cost some money, so carefully analyze your forecast spreadsheet. You may need to hire an architect who knows current building codes and who knows how to get city occupancy permits and who understand the American Disability Act. I read recently that an office building was converted to self-service storage units. With the advent of Amazon, retailers using overnight delivery distribution. Some retailers are wanting space for storage and packing areas. Thus we can look for a retail strip center or office building with land behind or adjacent to the rental unit. We can add storage space such as shipping units or modular storage space and add lights and insulation with AC. A retail strip center had land in back to add a storage ship contain to the back door. Thus retail store now had a warehouse room for inventory to service their online sales efforts. You can find multitenant warehouses and add a nice retail showroom in front with decorative ceramic floors and recessed and pin-spot gallery lighting Some seminar gurus say that to find a good deal…. Do not use the MLS to avoid seller having to pay real estate commissions. Send hundreds or thousands of postcards to owners and find motivated sellers. Convince owners to sell below market value to get a quick cash closing. Seller wanting a quick cash sale can avoid paying for repairs. I note that you will need to drive by to look at hundreds of properties and meet with many hungry owners. A client recently purchased a four plex on a busy street (thus hard to tenants to sleep) and converted to white collar high end offices. She kept the bathtub to avoid having to replace ALL the residential electrical wiring with commercial wiring. She put a bookshelf on top of the bathtubs. After you remodel and get stable higher rents, you can refinance and get your cash out or sell for a 1031 tax deferred exchange, if you own it for one year. We can learn from new concepts such as We-Works, a communal office small business center. Co-Living centers have sprouted in several major cities. Sorta like high end dorms for adults wanting urban living with friends.

We talk about the purpose and use of my web application to determine value of an income producing property. You can use it on a desktop computer or your mobile phone. For use you determine value for buying or selling.  Also use as evidence at property tax protest hearing. Click here to get app

Our neighborhood division has 25 homes and each has approx 1 ½ acres of land. We own our sewer system and own the horseshoe road. We each have a water well. We live two blocks north of the Addick Dam Reservoir and several block from Bear Creek Park and two blocks north of the County courthouse on Clay Road. We are in the Katy School District but east Katy City limits. Not only will we talk about snakes, landmines and grass fires, well will also talk about raccoons and rats. Vacant homes are a problem in southeast Texas since the hurricane last year. We have lived here for 3 years and am not sure how long the vacant home has been empty. It has been vacant approx 10 years since it partially burned and it did flood last year during Hurricane Harvey. The county health and environment services has had 2 courtroom trials, one of which is since I have lived here. We hoped the judge would tell owner to tear down the house, however he instructed the owner to take away the trash in the back yard and keep the grass cut. I think our legal remedies are finished. If you have a nuisance building in your area, first determine if you are in an unincorporated area of the county or if the property is in a city. In Houston, contact the Director of Department of Neighborhoods at 832 394 0600. They fight blight. If the property is in Harris County, but not a city or town, You can ask the county to enforce the Neighborhood Nuisance Abatement Act. Phone Harris county Environmental Public Health at 713 – 274 - 6300 Before calling Harris County Public Health to file a complaint: • obtain a correct address of the complaint site (name of street, street number, nearby cross street). • obtain the legal description of the property in question, if possible (name of subdivision, lot number, block number). • obtain the name and address of the owner and/or name of the occupant of the property in question, if possible. Hopefully we will find a way to get rid of the vacant ghost home. Several Owners nearby have seen many raccoons and rats. It seems that the County laws do not require the owner to maintain it to be livable, however it must be locked to prevent entry. The trash must be taken away and the grass cut. The 11 homes on the south side of the horseshoe did flood. When we built our home, we noticed another owner on the south side corner was pouring a slab and did not think to ask why. She built a duplex and has tenants The realtor across the street did not complain nor the next door neighbor. The owner on the corner also turned the garage and garage quarters above the garage into a duplex. In her main house, she rented two rooms upstairs. It has an indoor pool attached to the back of the home. So the owner has 6 tenants and they sometimes walk down and around the horseshoe road. In our neighborhood, We look our for each other and watch for people we do not recognize. Previously we knew all our neighbors on this street which a horseshoe and not a through street. We do not have an owners association therefore deed restrictions must be legally enforced by one or more owners in the subdivision. We own the road and could put up a gate if we have 100% written authorization from all the owners in the neighborhood. The deed restrictions say that each owner may have a single family home … not a multifamily rental property. Legally, another neighbor can file a lawsuit to force the multifamily owner to stop renting to tenants. She might claim that they are not rental units and she is not collecting rents. We may have to take depositions from the multifamily owner and her tenants to prove that she does lease the converted apartments After the flood, all our owners met at my house to discuss flood challenges and we agree to put up temporary wood barriers at each end of the road,

6 years ago, I helped the owner of a large automobile repair shop to sell his 9 bay building on one acre of land, including equipment and inventory. There are not many people who want to buy an auto repair business. My advertising found a gentleman with repair experience and money for a down payment. We got help fronm Dennis David, and SBA loan expert. We wrote the contract to include a “Non Realty Items Addendum” form, to include the equipment and inventory in the sales price. I represented the Buyer and Seller. The buyer hired a licensed building inspector and also an environmental consultant. The bank hired an appraiser. After a successful transaction the seller retired. 4 years later, that same seller phone and asked me to sell another auto repair shop. He retired and six months later decided to work again. He bought a building and remodeled and upgraded the building. I agreed to help and it took 8 months go find a buyer. The buyer toured the property after normal business hours. The buyer then had questions which seller agreed to answer face to face. We should understand that the buyer gets the same net net funds regardless of buyer paying cash or getting a mortgage loan. The buyer asked the seller if he would accept a price 90% lower than the asking price. Seller asked a question with one word which commited him. He ask “Cash?” I think he could have gotten 5% higher price. If the seller had not negotiated face to face. Buyer wrote a contract which required a bank loan and needed a bank which would also finance the equipment and inventory. The current lender also had a separate loan for equipment and inventory. But the buyer wanted to use a different bank. Here comes the challenge. Remember he had hired me to sell the previous property. Unfortunately the current owner/seller did not hire me when he bought the property 3 years ago. Because he knew the seller and just made a deal. The environmental study indicated that the retail convenience store next door to the auto repair shop also sold gasoline and suspected that the tanks leak to the auto repair shop. It gets worse. I represented the seller and the buyer represented himself. When I am writing a purchase/sale contract, the seller phones to say he is now finally speaking with his estranged nephew. His nephew had 15 years experience as a real estate agent and wants his nephew to over the transaction and asked me to report to his nephew, who lives in Las Vegas. On a telephone conference phone call, his nephew agreed to handle all communications with the buyer, whose office is 5 minutes from my office. I write the contract with a drop dead date tomorrow, and seller took it to buyer office. I had expected nephew to email it to buyer for signature, today. It gets signed after the drop dead date. Nevertheless, buyer deposits earnest money at the title company, which makes the contract good regardless of contract date. (it is a fine legal point). I phone nephew in Las Vegas to discuss fine points of the contract and process of buyer due diligence. Buyer nephew get mad at me for acting like I know everything and give me 8 “F” bombs directed at me personally. I suggest we hang up and continue the conversation tomorrow. We did not. The Buyer lender would not loan due to previous environmental study with a discussion about possible pollution from the convenience store on the continguous land. The Nephew and I do not have further discussion nor conversation. I get my info updates from the title company. They spoke to the title company and arranged title company attorney to write a loan doc for seller financing, because a bank would not loan on a suspected polluted property. It gets worse. Several days before final closing date, I get a certified letter from an attorney representing seller with several demands.

Roy Varner helped my wife and I with the short term bridge loan to build a new home (The Poodle Ranch) then helped with the final long term loan after the home was built. We discuss the differences between loan brokers and loan bankers.  We also talked about mistakes that borrowers make. He talks about why he enjoys being a residential mortgage helperr. Win a Laser Measure Ruler The DEWALT DW055E is ideal for layout and estimation. This measurement device allows for quick and easy measurement of up to 55 feet. New winner each month. To get your hands on one of these awesome Laser Measure Rulers, all you have to do is enter! Follow the link below and enter your information. We pick one lucky winner each month. Click Here to enter