April 28, 2012

BMR Coming to Menlo Park?

Some cities are more compliant than others in providing BMR (Below Market Rate) housing.  Perhaps Menlo Park will be getting off the “But we don’t have any below market residents” excuse pot.

Menlo Park eyes below-market rental housing

HIP Housing proposes deal with Menlo Park

120426-willow-pierceby Sandy Brundage, Almanac Staff

The city of Menlo Park has its eye on a Willow Road apartment complex that might be purchased for use as below-market-rate rental housing — something that currently doesn’t exist in Menlo Park.

The 12-unit complex, located at 1157-1161 Willow Road, comes with a price tag of around $2 million, according to a representative from HIP Housing, a nonprofit organization that specializes in finding below-market-rate housing and hopes to partner with Menlo Park on the deal.HIP currently operates 13 rental properties in San Mateo County.

120426-willow-backThe Willow Road complex would rent nine units to people earning less than 50 percent of the regional median income of $81,300, and three units to those making less than 30 percent. Rent at the complex would fall in the range of $610 to $1,016, according to a staff presentation.

A real estate listing described the property as vacant and partially renovated; it also said the complex had won a renewable energy award for upgrades such as solar panels and efficient lighting. Laundry and parking are available on site.

The apartment buildings are not currently for sale (the first is pending, the second is merely delisted).  They were built in 1958.  If you want to dig deep into the offering memorandum for the two buildings, have a look at this PDF.  And check out the pictures.  Solar panels!  Sweet!

120426-willow-offerpix

Assuming the rental numbers are correct, that would give this complex a rent ratio of 10.26.  BUY!!!!!!!!  Then again, I’m not sure I trust these numbers.  Notice something hinky here?

120426-willow-math

While Burbed has yet to amass a huge portfolio of investment property, even we can tell the difference between a 5 and a 50% vacancy rate.  This is another great reminder of how Real Estate Professionals deserve those hefty commissions, whether commercial or residential.

Discuss this neighborhood, older apartment homes like these, BMR housing, any Open Houses you visited, or anything else you can think of. Yes, this is your weekend open thread.

Comments (9) -- Posted by: madhaus @ 5:08 am






April 12, 2012

Want an investment property close to Facebook? TOO LATE

Burbed continues with Burbed reader Petsmart Groomer week, and now we return to Palo Alto.  Ah Palo Alto, home of high prices for working-class residences.  This fine investment property/teardown/whatever cannot be yours because it went pending in just six days.  Let’s drool on it and hope the sale falls through.  We’ll use Zillow this time because Redfin already took the listing copy and pictures down.

2316 Amherst St
Palo Alto, CA 94306
$1,498,000

120405-amherst-zillow

Beds: 4
Baths: 3
Sqft: 2,025
Lot: 6,098 sq ft / 0.14 acres
Type: Single Family
Year built: 1959
Parking: —
Cooling: —
Heating: —
Fireplace: —
On Zillow: 9 days
MLS #: 81211442
County: Santa Clara
Legal description: —
Parcel #: —
Per floor sqft: 2,025
Zillow Home ID: 2120434658

Sold in conjunction with 2320 Amherst. Two buildings: 2316 is spacious 1/1 with hardwood & updated kitchen. 2320 has 2/1 downstairs with refinished hardwood & updated kitchen; small 1/1 upstairs with huge deck and lovely views of the hills. Both buildings have laundry facilities. Legally 2 lots, zoned R1. Fabulous College Terrace location – Move in, buy for investment or build a new home! [Listing information © MLSListings Inc. All rights reserved.]Brokered And Advertised By: Dreyfus Properties, Inc.Listing Agent: Lucy Berman

120405-amherst-patioThis one is a Wow!  As in Wow, that photography really hurts to look at.  We’ll include a number of pictures in case the listing is scrubbed from teh internets forever.

You can also try your luck with the Virtual Tour, which has the same pictures, only in much sharper focus.  The color intensity is still dialed up to 11, though, so you keep that feeling you accidentally wandered into The Bee Movie.

120405-amherst-virtualtour-gardenThis photo at right is from the Virtual tour.  It’s the only one not on Zillow as well, and lucky for us, it’s got that riot of color so distinctive of this photographer.  The kind of buyer who wants an investment property in Palo Alto will definitely appreciate this effort that makes it look like a Henri Rousseau painting.

The rest of the photos, available after the break, are straight from Zillow.  That way you can enjoy the blurry effect on top of the bright colors.

(more…)

Comments (9) -- Posted by: madhaus @ 5:03 am

April 3, 2012

Palo Alto duplex home is 2 units $1950 each or maybe $1500

Real estate is a great investment that can pay you to live in your house.  That is, it pays you to live in your house if you rent some of it out.  Here’s an investment opportunity too good to miss from Burbed reader Petsmart Groomer.

3799 PARK Blvd
Palo Alto, CA 94306
$1,149,000

120401-park-redfin

BEDS: 3
BATHS: 3
SQ. FT.: 2,236
$/SQ. FT.: $514
LOT SIZE: 6,930 Sq. Ft.
PROPERTY TYPE: Detached Single Family
STORIES: 2
YEAR BUILT: 1979
COMMUNITY: Ventura
COUNTY: Santa Clara
MLS#: 81207935
SOURCE: MLSListings
STATUS: Active
ON REDFIN: 30 days

Duplex home set up as a two separate units of 1,100sq feet each rents for $1,950. 1 level is a 2 bedrooms/2 baths and the other unit is a 1 bedroom/1 bath rents for $1,500 on a month to month. 1 car garage is rented for $100 a month. Home can be shown by appt only every TuesdayRight fence to be fixed before close of escrow.

imageThe market is hot, hot, HOT here at Ground Zero of the Google-Facebook Nexus.  I don’t understand why this one hasn’t been snatched up yet.

Any ideas why some dot.com entrepreneur hasn’t moved into one unit, rented out the other, did some internets magic in this amazing Garage, and raked in the Profit?

Is it because the listing copy has even Redfin too befuddled to compute a rent ratio?

If we just add up all the dollar amounts mentioned above, we get $1149000 / ($1950 + $1500 + $100) * 12 = 26.97.  That ratio would say “RENT!” anywhere but in Palo Alto.  Here, just getting the privilege to bid on a neglected rental property in a dynamic neighborhood right on the cusp of High Speed Rail is such an honor, the agent won’t show you the inside.  Even though today is Tuesday.

Comments (11) -- Posted by: madhaus @ 5:06 am

February 29, 2012

The property is dangerous holes in floors debris all over

Today’s fun find is a Cambrian cutie from Burbed reader yaknuts.  If you’ve been wanting something in the suburbs, but enjoy a sense of excitement and unpredictability, this may be the house for you!  Come and talk a walk on the wild side of the Cambrian!

3682 May Ln
San Jose, CA 95124
$439,900

120227-may-redfin

BEDS: 3
BATHS: 2
SQ. FT.: 1,234
$/SQ. FT.: $356
LOT SIZE: 7,519 Sq. Ft.
PROPERTY TYPE: Detached Single Family
STYLE: Ranch
STORIES: 1
YEAR BUILT: 1959
COMMUNITY: Cambrian
COUNTY: Santa Clara
MLS#: 81204098
SOURCE: MLSListings
STATUS: Pending Without Release
ON REDFIN: 25 days

This is a CASH AS-IS SALE ONLY. contractor exp investor Special. THERE IS NOT A KITCHEN SO FINANCING IS NOT POSSIBLE. Aproximatly 500 foot of unpermitted additional space. Garage has been converted to living space. The property is dangerous holes in floors debris all over, dog waste all over back yard. Old garage converted to living space. Cooking done in microwave and outdoor bbq grill.

Here’s why yaknuts thought this home was Burbed-worthy:

120227-may-bbqI have been a long time reader of your blog. I came across this listing the other day (already taken down from Redfin).

Check out all the junk in these pictures and the description: "the property [has] dangerous hols in floors," "dog waste all over back yard," or "cooking done in microwave and outdoor 120227-may-patiobbq grill." It went pending on 2/5/12 for $439K. I don’t have time to do a full write up at this time, but I had to bring this to your attention. I hope to see a feature on this property soon — you should have plenty of material in this listing. Cheers!

This is one of those features that just writes itself.  After all, a picture is worth a thousand words, so we can save 7,000 of them.  Redfin could take these pictures down again any minute!

120227-may-kitchen

120227-may-tv 120227-may-diningroom120227-may-couch120227-may-sink

This must be one of those listings where the agent made a drunken bet with the broker.  In this case I’d venture they bet over whether incoherent photography sells houses faster.  That should explain why some of the rooms look almost staged, while others suggest they refused to spend 10 minutes picking up.

And since this poo palace went pending the very next day, congrats to the winner of that bet!  It clearly worked! 

Although we know who the real winner was when it came to this house: the geniuses who sold it in 2007 for $620K.

Comments (14) -- Posted by: madhaus @ 5:32 am

October 15, 2011

RBX: Housing Futures Contracts may be in your future!

RadarLogic to launch housing futures

imageby LIZ ENOCHS
Thursday, October 13th, 2011, 5:21 pm

In about two weeks, hedge funds, mortgage lenders, and other investors will be able to bet on the future of the U.S. housing market without buying a home.

RadarLogic, a housing data provider, is introducing a tradeable futures contract based on its national composite index that compiles data on home prices in 25 U.S. metropolitan areas. The contracts are slated to be available through the CBOE Futures Exchange after receiving regulatory approval, which is anticipated within the next two weeks.

The product could help bring stability to the housing market and ultimately lower costs for borrowers, said Quinn Eddin, director of research for RadarLogic.

Who cares about how housing is doing nationally?  It’s doing terrible, that’s why I stuck in that photo of hard-earned equity getting burned up every month.  (Also I couldn’t find a photo of flat-screen TVs getting thrown out the window.)  But what you should care really about is When Can I Buy Myself a Futures Contract on the Real Bay Area?

RadarLogic is looking into regional and metropolitan-level futures contracts, but there’s nothing about an RBA-specific deal (which should obviously be called the RBAXX, because it’s eXtra Special Here).  Also, the RBX is only going to be settled twice a year. 

The RBAXX will need to be settled daily, because it will only go up. 

This is an Open Thread.  How much would you overbid to get in on the ground floor of the RBAXX?

Comments (18) -- Posted by: madhaus @ 5:10 am

June 25, 2011

Another Foreigners with Suitcases Full of Cash Story!

Thanks to Burbed reader Real Estater for bringing this up in comments yesterday.

The Chinese Go on a Global Homebuying Spree

businessweek

Kelvin Wong, Nichola Saminather and Hui-yong Yu, On Friday June 24, 2011, 8:08 am EDT

On a sunny Saturday in early June, Larry Zhou strolled the floor of a property exhibition in Hong Kong, wondering whether it was time to buy another home — not in the city, where residential prices have soared 50 percent in the past two years, but maybe in Thailand or Malaysia. "My wife and I have been thinking about investing outside of the country since we already own an apartment in Shanghai," says Zhou, a 38-year-old civil engineer, who was visiting the Hong Kong Convention and Exhibition Centre before wrapping up a business trip and returning home. "I’ve known people in Shanghai who like to bring their money and invest in Hong Kong properties, but I think Hong Kong is way too expensive."

The two-day event that lured Zhou and 3,000 others is one way that China’s expanding wealthy and middle classes are finding investment properties and second homes around the world. They are grabbing everything from $68,000 foreclosed condominiums in Florida to $2 million beachfront villas in Vietnam. "Some of them will buy homes considering better education opportunities for their kids, while others look for immigration options," says Mo Tianquan, founder and chairman of Beijing-based SouFun Holdings (NYSE:SFUNNews), which runs China’s biggest real estate website and organizes buying excursions abroad.

Vietnam beachfront villas?  Don’t be silly.  Every single one of them wants to buy a house in… Vancouver?  The smart ones, though, are buying in Silicon Valley, especially places smart enough to work the magic word “Cupertino” into the listing somehow.

In the U.S., Chinese buyers have helped support home sales and prices in Silicon Valley and Hawaii, while they are an increasing presence in Las Vegas and New York, according to local brokers. […]

Las Vegas?  What the heck are they thinking?  There’s no Apple Campus in Las Vegas!

This is an Open Thread.  Let us know what Open Houses you’ve seen full of foreign buyers.  Or any buyers.

Comments (8) -- Posted by: madhaus @ 5:00 am

January 15, 2011

Who’s Buying All Them State Buildings? Nobody’s Sayin’

<img missing due to burbed’s terrible admin skills. working on restoring>Hidden in emergency budget legislation, 7.3 million square feet of noted state office complexes were put up for sale, including several in San Francisco.That resulted in the oddity of all seven justices recusing themselves from deciding whether the sale could proceed. (Their offices in the Earl Warren building, part of the SF Civic Center, would be included, photo right.)  The deal was halted only 2 days before closing on December 15th, as Arnold’s reign came to an end.  And the more reporters dig to find out who benefits from this sweetheart deal, the more muck they find.

24 buildings on 11 sites, including landmarks such as the Ronald Reagan building in Los Angeles, plus others in San Francisco, Sacramento, Oakland, and Santa Rosa are being sold. The deal is with a mysterious group of investors who don’t wish to be identified, or claim they’ve dropped out when contacted.  The buildings cover 43 percent of all state government office space.

Identities of Investors in State Property Sale Grow Cloudier

Many have dropped out of contested deal, and those that remain are tight-lipped

By ELIZABETH LESLY STEVENS on January 12, 2011 – 3:12 p.m. PST
The Bay Citizen

Most of the members of a shadowy investor group that agreed to finance the sale of tony state office buildings last year appear to have dropped out of the deal, and those that remain are tight-lipped about their involvement in the transaction, which is being challenged in court as an illegal gift of state assets to a group with political pull in Sacramento.

Departing Gov. Arnold Schwarzenegger tried mightily in his waning days in power to close the controversial sale of 11 premier properties.

The deal, now being challenged in a state appellate court, is in limbo. The new administration of Gov. Jerry Brown asked the court for a month to review the matter, and now arguments are scheduled to begin in February. The nonpartisan Legislative Analyst’s Office reported in November that the deal would end up costing California taxpayers $6 billion in the coming decades, but the approximately $1.3 billion net proceeds of the deal are already factored in to the state’s budget for the coming year. If the deal falls apart, the cash-strapped state’s deficit will swell by another $1.3 billion.

The deal had been scheduled to close on Dec. 15. The legal challenge, brought by lawyer Joseph Cotchett and former San Francisco City Attorney Louise Renne, convinced the appellate court to issue a stay just 48 hours before the sale was to have closed.

<img missing due to burbed’s terrible admin skills. working on restoring>Color me surprised.  A bunch of former officeholders finding ways to sell themselves some primo office properties hiding behind lawyers and corporations?  Stalwart building authority members who objected to the deal got sidelined?  Who would have predicted that?

And what a lovely problem it’s left California with: sell our buildings to these crooks, and have to rent what we owned.  (Bonus!  And get evicted in favor higher-paying trophy retailer!)  Or, invalidate the deal and dig up another $1.3 billion for that out-of-whack state budget.  Plus everyone standing to benefit will then sue when they don’t get their cut.  Be sure to read the first link in the article for more background if you haven’t been following this local example of how crony capitalism works.  (Photo above left, State PUC building is part of the 24 building deal.  Adithya Sambamurthy/The Bay Citizen)

But that’s just one secretive sell-off of public assets.  Burbed reader nomadic sends in what could be the answer, but it only raises more concerns.  Matt Taibbi suggests that large chunks of our infrastructure, including “a whole bevy of Californian public infrastructure projects,”are being bought by “sovereign wealth funds.” SWFs are extremely large amounts of cash, in particular from oil-producing nations.  One of the SWFs was offered the entire Pennsylvania Turnpike.  (They demurred, but Taibbi names other public works projects that have been sold off, including the Chicago Skyway and their parking meter revenue.)

Around this time, state and municipal executives began putting their infrastructure assets up to lease — essentially for sale, since the proposed leases in some cases were seventy-five years or longer. And in virtually every case that I’ve been able to find, the local legislature was never informed who the true owners of these leases were. Probably the best example of this is the notorious Chicago parking meter deal, a deal that would have been a hideous betrayal even without the foreign ownership angle. It was a blitzkrieg rip-off that would provide the blueprint for increasingly broke-ass America to carry lots of these prized toasters to the proverbial pawnshop.

Sounds familiar.  Maybe that’s why this California First LLC group is being so secretive?

Comments (7) -- Posted by: madhaus @ 5:05 am

December 5, 2010

How to Lose Ten Million Dollars by Investing in Real Estate

You know how to make a small fortune in real estate, right?  Start with a large fortune. 

This is a story of someone with a decent fortune who managed to lose it all, by buying can’t-lose inflation-proof real estate.  Let’s see how well that went.  Thanks to Burbed reader nomadic for sharing this modern morality play.

Family’s Fall From Affluence Is Swift and Hard

By GERALDINE FABRIKANT
Published: November 25, 2010

WAMEGO, Kan. — Grateful to have found work in this tough economy, Nick Martin teaches grape growing and winemaking each Saturday to a class of seven students in a simple metal building here at a satellite campus of Highland Community College.  (photo, right)

Then he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished tract house that he rents for $900 a month on a dead-end street in McFarland, a smaller town. Just across the backyard is a shed that a neighbor uses to make cartridges for shooting the prairie dogs that infest the adjacent fields.  (photo, below)

It is a far cry from the life that Mr. Martin and his family enjoyed until recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the “21” Club and a $7,000 mink coat.

That luxurious world was fueled by a check Mr. Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.

Photos: Steve Hebert, New York Times

In some ways, this story is similar to many sympathetic treatments of less wealthy people losing their homes due to not understanding the basics of finance.  If you owe more than you own, you’re not moving in the right direction.  And if you sign papers you don’t understand, you’re setting yourself up for a world of hurt.

What’s amazing is how Nick Martin still seems to think what happened to him is somehow somebody else’s fault, maybe multiple somebody elses.  Unlike the numerous victims of manufactured documents and hard-sell subprime Pay Option ARMs, Martin seems to have sought out what became his undoing.

I do recommend you read the article, but here’s the shorter Nick Martin: He bought a bunch of crap he couldn’t afford, so now he’s broke.  That’s a fairly common story, it’s just most of them don’t start with getting a phone call asking where you want your $14 million deposited.

Please share your advice for Nick Martin, or for anyone about to enter the exciting world of buying and selling real estate.  How would he have fared if he’d bought in the Real Bay Area instead? 

Comments (17) -- Posted by: madhaus @ 5:09 am

December 4, 2010

The Next Bubble: Right In Your Neighborhood

Last week, I mentioned ten possible bubbles now that the non-RBA did a real estate fail.  (Real estate in the Real Bay Area, of course, has never lost value.)  This week, The New York Times validates some bubbles and they’re the ones closest to home.  And that is great news for homeowners!

A Silicon Bubble Shows Signs Of Reinflating

BY JENNA WORTHAM AND EVELYN M. RUSLI,
The New York Times, December 3rd, 2010

In a memorable scene in the movie “The Social Network,” Sean Parker, the investor played by Justin Timberlake, leans over the table and tells the founders of Facebook in a conspiratorial tone: “A million dollars isn’t cool. You know what’s cool? A billion dollars.”

These days in Silicon Valley, a billion dollars seems downright quaint. The enthusiasm for social networking and mobile apps has venture capitalists clamoring to give money to young companies.

Evan Williams, left, who has started several Internet companies, including Twitter, and Fred Wilson, a venture capitalist who says investors are eager to participate in young start-ups.The exuberance has given rise to an elite club of start-ups — all younger than seven years and all worth billions. Successive investments in Twitter have reportedly increased its value 33 percent, to $4 billion, while Zynga, creator of the popular Facebook game FarmVille, is worth more than $5 billion.

Photo: Andrew Harrer/Bloomberg News Evan Williams, left, who has started several Internet companies, including Twitter, and Fred Wilson, a venture capitalist who says investors are eager to participate in young start-ups.

Don’t let these new companies stop you from investing in them.  So they aren’t traded publicly? You can buy the stock before the IPO through SecondMarket.  Heck, so many people want to own shares, you can buy derivatives of these pre-market Facebook shares. Or you can own a Google share or two and gain from their buying up every small tech company for miles around, provided Apple or Facebook doesn’t buy them first.

For example, Google tried to buy Groupon for six billion dollars.  Six.  Billion.  Dollars.  For a company that throws up virtual coupons on the Internet.  A company based in Chicago.  And Groupon said NO.  I guess they think they’re worth more than… Six.  Billion.  Dollars.  For a little reality check, the biggest acquisition Google ever had was paying $3 billion for DoubleClick, in 2007.  Good thing they didn’t do anything foolish back then like buy an office building in Manhattan.

So, hot companies, limited shares available?  Sounds like something frothy and bubblicious is on the stove!  Some people are going to make a lot of money while this bubble gets bigger, and you know what that means?  It means there’s nowhere for Silicon Valley real estate to go but up, up, up!  Happy days are here again!

Comments (8) -- Posted by: madhaus @ 5:15 am

November 27, 2010

Bubble Bubble Toil and Trouble

While you digest your Thanksgiving meal, here’s something to think about.  The rest of the nation is dealing with the burst bubble of the real estate market (not a problem for homeowners in the Real Bay Area, of course), and eagerly awaits the Next Great Investment.

So, are these the Next Bubbles Waiting to Burst?

  1. Gold – $1408 an ounce for bullion.  Glenn Beck is hawking the stuff.  I rest my case.
  2. Real Estate in China – When amateurs enter a market, it’s time for the pros to pull the rip cord.  And doesn’t this remind you of all the overbuilding in the Phoenix exurbs?  Oh, and don’t forget you don’t own the land.  The government does, and they can cancel your land lease anytime they want.
  3. Alternative Energy – As soon as the government subsidies run out, then what?
  4. Commodities – Wheat up 60% because they aren’t growing any more wheat!  You know what commodity you should worry about?  Indium.  It’s used in capacitive touch-screens, and without it, say goodbye to your iPhone 4.
  5. Apple – Okay, obtaining the Apple Records catalog was cool.  But the iPhone 4 still has antenna problems, and eventually their pointless spat with Google is going to cost them.
  6. Social Networking  — How do you estimate the value for companies such as Facebook, Twitter, or LinkedIn which aren’t traded publicly?  At some point, someone’s going to put a market pricetag on those firms, and it’s probably going to be too high.
  7. Emerging Market Stocks  — These countries’ rising prices despite no growth are backed by… commodity price increases.
  8. Small Tech Companies – These pre-IPO firms are being eaten by the big fish, and at big valuations.  Often they bid against each other with the small firm owners the winners.
  9. The US Dollar – You know all those foreigners with cash at the sidelines?  Maybe they’re tired of that cash being in dollars and will trade them for their own currency.
  10. US Government Debt  –  The US owes $13.7 trillion dollars.  Try and get your head around that number and figure out how they could possibly pay it all back.  Want another number?  The Gannet Company says with all the money the government has borrowed from other agencies (Social Security, Veterans Administration, etc) it owes… $73 trillion.  However, Wikipedia states the intergovernmental debt is $4.7 trillion, so take that extra-large number with a grain elevator of salt.

Will any of these bubbles be worse than the real estate follies?  What will happen to the RBA if either Apple, the social networking sector, or all the small tech companies collapse?  Is the RBA economy dependent on any of these other sectors?  Discuss.

Comments (22) -- Posted by: madhaus @ 4:58 am