Sunday, October 4, 2015
The latest and most egregious example of homeowners association ("HOA") abuse. (On a daily basis I could pick many.)
A homeowner cannot fly an American flag on her own home even when her neighbors say is it fine. When an overflow meeting is called by angry residents to address the flag rule, the HOA cancels it at the last minute. The homeowner is still looking at $75 fine for the HOA violation and has vowed not to take down Old Glory.
The lesson here?
NEVER NEVER EVER buy an investment property with a HOA.
You lose virtually all control over your investment. Period.
Most HOAs are not well run, in fact, it is amateur hour at the vast majority of them. Even when the HOA members are well intentioned (a big if) things never happen like you planned. Costs rise faster than anticipated due to a lack of competitive contract bidding and even cronyism. Wacky HOA members are elected who believe they are in the incarnation of Stalin. Maintenance is deferred by homeowners on the HOA who are selling their properties soon so future buyers can pick up their repair costs. The list goes on and on and on and on....
Sad when the Stars and Stripes are controversial anywhere. Dumb HOA.
Tuesday, September 29, 2015
Absolutely brilliant analysis by one of Wall Street's greatest investors, Carl Icahn.
Don't believe me. Believe Carl. We have been saying the same things for months now.
Enough said. Watch the video.
Saturday, September 26, 2015
Far too many real estate books are hypertechnical or filled with jargon and legalese making them hard to read. It gets boring fast slugging through a CPA's fantasy of endless IRS code sections or examining blueprints and engineering plans seemingly written by a nerdy scientist.
The new book, CABIN LESSONS, by author Spike Carlsen is NOT such a work.
I absolutely LOVED this book. It's a personal tale of what happens when a married couple decides to build a small cabin on Lake Superior. An updated 21st century version of MR. BLANDINGS BUILDS HIS DREAM HOUSE.
This story is filled with charm, humor, wit, adventure, fun, and most of all, love.
Yes, it is also crammed with LOTS of technical and practical advice for do-it-yourselfers on everything from finding and inspecting land to actually building a home step-by-step. But it is the wonderful readability of this book that separates it from so many in the marketplace. This work reads like a novel more than a real estate investment guide---which it clearly is.
You get to know these people and cheer them on towards final victory. You live their daily ups and downs, their mistakes, and their victories. Not exactly a common theme in most real estate texts.
I highly recommend this book. Informative, packed with money and time saving advice, but also a real testament to a once in a lifetime odyssey from people you wish lived next door to you.
Uplifting and enlightening. What more can you want?
A real big thumbs up. One of the best real estate books I have read in a long, long time.
Wednesday, September 16, 2015
Real estate books generally come in two categories. "Newbie" books for novice investors who know virtually nothing about the industry but want to learn more and more advanced texts which deal with the specifics a professional and experienced investor might want to know.
CASH FLOW FOREVER by author Jeff K. Johnson fits perfectly into the first category.
This book is one of the most basic primers on real estate I have ever read. If you have a friend who has never invested in properties before but wants to learn the ABC's quickly and simply, CASH FLOW FOREVER is just about ideal.
Experienced investors may pick up a tip here and there but their interest will not be sustained over the 236 page book length.
I found this book easy to understand and readable, not filled with technical and confusing jargon but common sense solutions to basic problems and simple answers to simpler questions. It is quite effective on this rudimentary level. But do not think there isn't a great deal of substance here. The advice offered is real, practical, effective, LEGAL AND ETHICAL, and often quite imaginative.
My only quibble with the book is its subtitle. THE REAL SECRETS OF REAL ESTATE INVESTING.
There are no "secrets" in the real estate world. Period, end of story. There is only information you just have not learned yet, hardly a secret really. I have objected to the use of the word "secret" in the real estate investing context for years since it suggests a cabal of investors are keeping the general public away from their keys to real estate wealth. It's just not true. Not knowing a fact does not make it a secret, it just means you have more to learn.
A great alternative subtitle here would be "The Real Truths of Real Estate Investing" because this is precisely what is offered here.
With that tiny teeny weeny exception aside, I would highly recommend this book to any novice investor who wants to learn the absolute basics about real estate, especially if they can't decide to buy properties versus investing in stocks, bonds, or other assets. CASH FLOW FOREVER is a readable and informative book definitely worth the price.
For the record, I was given a free copy of this book for review purposes.
Tuesday, September 1, 2015
One of the dumbest ideas currently raging across Seattle (and surely headed to a city near you) is the idea of "parklets" or converting parking spots and roadways into tiny little urban parks.
Here is the official City of Seattle website page on parklets and its gastronomic equivalent called "streeteries" or converting parking spots into dining spaces.
The idea is to provide urban residents with new park spaces. Of course, the City of Seattle already has FOUR HUNDRED PARKS comprising 6,200 acres of parkland in a space just 142 square miles wide but who's counting?
The notion ANY congested city like Seattle with a fixed infrastructure space anticipating 120,000 new residents over the next twenty years would intentionally destroy valuable parking spaces and roadways verges on insanity.
But as my Twitter hashtag notes #WelcomeToSeattle.
Aside from the obvious transportation issues, here are some other problems with parklets not ever mentioned once, and I mean ONCE, by the local Seattle media.
PARKLETS ARE DANGEROUS
Using a parklet literally means you are sitting in a roadway with cars whizzing past you at 30 MPH with virtually nothing between you and death.
Each parklet is separated from oncoming traffic by pretty flower boxes and white traffic markers, much like these two new parklets which can found in the hipster (and very expensive for renters) Capitol Hill district of Seattle.
See the pretty planter boxes? Each gives the illusion of protection. They are made of plastic, not concrete. None are bolted down and all are held in place by about a hundred pounds of soil. The white posts you see are bolted into the roadway but are made of plastic and bend on a spring.
Any car careening into a parklet would run right over everything in its path and easily exit the other side.
Notice this parklet was placed on a sharp curve and how closely the cars come to the flower boxes.
Sitting in a parklet with your back to traffic is suicidal. It is just a matter of time before a drunk driver or a psychopath drives right through one. Sounds incredible but a drunk recently did the very same thing at Seattle's Pike Place Market just two weeks ago.
One other obvious danger to parklets is a serious trip risk. Notice all the steel cables holding down the chairs and tables so no one (without a bolt cutter) can steal them. Slip-and-fall lawyers across the city just can't wait for the first broken hip or fractured skull.
PARKLETS ARE EXPENSIVE
The parklet above just a few weeks ago was SEVEN parking spots. Each spot sells on the meter for $4.00 per hour. Each meter day is twelve hours (8:00AM to 8:00PM) so this parklet costs Seattle $336 per day in lost revenue.
$9,408 per month lost. (Sundays are free so only six days per week of revenue.)
$112,896 per year.
And this is just one parklet.
Parklets need to be maintained. For example, who empties this garbage cans in the pictures? City workers, that's who.
Parklets need to be built. According to the workmen I spoke to building this parklet above (the curved one), the cost was about $40,000.
Sounds high? Not really. Recently the City of Seattle painted crosswalks in its Capitol Hill neighborhood rainbow colors for the Gay Pride Weekend and parade. Cost to paint each crosswalk was $11,000.
Yes, $11,000 to paint a crosswalk.
PARKLETS NEGLECT REAL CITY PARKS
Seattle has many gorgeous parks but no money to maintain them. Many are deteriorating and filthy, filled with vagrants and drug addicts who use them as campgrounds and toilets.
Here is a beautiful small park near two major historic properties about halfway between the two parklets photographed above. Notice the dirty park sign, the vagrant urinating on a bush in the park and the two groups of drug addicts with their shopping carts and packs getting high in the background.
How about this novel and creative idea? Before building new parks why not maintain and improve the parks you already have?
I could go on and on and on about parklets but why? This is the Seattle media's job, not mine. They get paid to investigate but instead they cheerlead and reprint press releases received from City Hall.
But most of all, parklets obviously destroy property values by denying owners access to the very sidewalks outside their properties. Your customers get to park their cars blocks away instead of at your curb. Handicapped and elderly residents can walk a distance, right? No need to accommodate the disabled. Your business loading zone just disappeared.
And the best part of parklets for real estate owners is a sure kicker. Every parklet is built with the proceeds of a special real estate levy on all Seattle property owners. $146 million in total from 2009-2014. A $450,000 home in Seattle pays $80 per year for this nonsense.
One last important point. NO ONE USES PARKLETS. Notice in all the pictures above not one single person is sitting at all those tables and chairs. And these photos were taken on a sunny day, not in December or during a rain storm.
Honestly, look at the pictures above and ask yourself would you sit there? These parklets are less than one month old and already are filthy and covered in grime.