Chalk another one up for the history books. After 66 days on the market, 27 Realtor showings, 6 offers, 1 backup offer and 3 deals that fell apart , we finally got er’ done. The Neighbor’s House sold yesterday for $367,500.00. This is the highest sale in Mahncke Park to date, trumping our last record with The Hat Trick House at $340k. This is huge by anyone’s standards as theres never been any other sales over $300k. We’ll spare everyone the gory details out of respect for the parties involved since the entire neighborhood has found their way to my blog by now. The real estate market has slowed a bit from last year in our area. Year to date there have only been 3 sales in Mahncke Park including ours while last year there were 7 by now and 12 total. Compounding the issue are the higher inventory levels this year, there are currently 13 houses on the market with an average time of 136 days, compared to last year where there was never more than 2-3 active at any given time. This was probably the craziest sale we’ve had as far as drama goes, it’s just a real weird market out there right now. We paid $150k for this house originally so this investment had a textbook spread, but dont worry it’s not all profit when you take into account the big rehab budget that it took for the transformation. Looking at the data would make anyone else feel lucky for selling their house but we had buyers lining up for our creation. Thanks to everyone who helped out with this great project and to Morgan at DeWitt Architects for the killer facade design and color palette. A big congratulations to the lucky buyer, we know you’ll have years of great times in the lovely home.
This is the last big weekend before the Federal Tax Credit expires on next Friday, April 30 so we are now in what I consider Last Call for this years hottest real estate sales period. Undoubtedly we are pulling future demand forward as everyone looking to make a purchase this year will try and have something under contract by next Friday. As many folks work during the week , today and tomorrow will be the last chance to get out and find something. The question remains though, what will happen to the real estate market after this credit expires? San Antonio will be o.k. but I’m not sure about less stable markets.
Sellers should be extremely cautious accepting offers this week as many buyers out there are simply not qualified, even if they are waving a “pre-approval” letter, as I personally found out several weeks ago. To get the $8000 back you just have to purchase an $80,000 house so we arent talking about the strongest buyers out there anyway. Couple that with a buyer going FHA and asking the seller to contribute 6k in closing costs sends up a red flag to me that they don’t even have the 3% to put down. Buyers not having any skin in the game simply shouldn’t be allowed to purchase a house in my opinion. It’s been said that some buyers are even tying up several properties at a time to make sure they get one that sticks so they get their free government handout. In this case the other sellers will get left out to dry with their properties going back on the market after the tax credit expires and in what could be the slower summer months. How many of these tax credit sales will wind up being next years foreclosures?
Neighbor’s House is under contract again, we had a back up offer so when the last buyer couldn’t arrange financing we went to plan b. Maybe 3rd time will be a charm, someones eventually going to be the lucky homeowner with the Coolest house in Mahncke Park.
Neighbor’s House Back On Market today!!!! Arrrrggghhhhhh! This has never happened to me, have a house fall out twice. This time we had it sold to a lady who was going VA. We made it past the home inspection, then the VA inspection and finally it passed the VA appraisal last week. This morning we get a call from the buyers agent stating that her client was turned down by the VA underwriting for not having the last 3 years tax statements. What idiot mortgage broker writes someone a “Pre APPROVAL” letter w/o checking tax returns???? These things arent worth the paper they are written on in todays market. Supposedly he thought since she was putting 20% down it wouldn’t matter. Dear Mr Mortgage broker, this isnt 2005 buddy, buyers need to state their income these days! Between incompetent mortgage brokers and an overzealous home inspector claiming my brand new 30 year roof had a life expectancy of 20 years and my brand new 16 seer A/C is 2-3 years old, nothing seems to be going right on this deal. Oh yea, my brand new gas hot water heater is also 2-3 years old according to this brain surgeon. Over at the other house the plumbers are almost done, they are shooting for an inspection on Wednesday. Stay tuned for more drama.
Excuse the mess….We have been fumbling all week trying to learn WordPress after getting this template from a webguy who was suppose to dial it all in for us. Needless to say after a couple emails with no response and hours of cutting/pasting our content over here we are. I like what I see with WP so far but there’s still alot to learn and changes we hoped to incorporate into the new design that will have to wait.
I guess 13 wasnt so lucky afterall, last week the buyer of The Neighbors House had their inspection and hired who we heard was the “deal breaker” of all local inspectors. He pretty much scared her into pulling out so we are BOM, (back on the market). Allthough some of his items were questionable, we’ll fix the legit issues that affect the integrity of the house so we’ll be ready for the next buyer. Afterall, it is a 100 year old house so buyers looking for something brand new shouldn’t even be considering our historical area.
It’s a good thing I’m not superstitious because good things have been happening to us lately with the number 13. Recently we purchased our newest rehab the Target House on a Friday the 13th. Now, after 13 days on the market and 13 showings; we have accepted an offer for the Neighbor’s House, which bears the address of 319, all multiples of 1 and 3. The culmination of this project also ends a 13th month stint that I’ve spent on this block rehabbing two houses next door to each other. Weeeeeird! Right? Of course we never call it “sold” until it closes but this buyer is strong, so as long as we get past the inspection and appraisal we should be good to go. (knock on wood). The average market time for San Antonio is close to 100 days so we are pretty stoked. Inventories have been decreasing this year but still higher than 2009. There is currently 6 months of inventory on the market in San Antonio so it’s pretty balanced between a buyers and sellers market.
Let’s take a closer look at the real estate market in our little farm area of Mahncke Park. It has still higher inventory levels with 10 homes on the market currently whereas last year there were never more than 2 or 3. This sounds low but keep in mind the size of our farm is only roughly 6 square blocks. In the last year there were 13 homes sold (yes, I know, another 13) with an average market time of 80 days and price of $240,000. With our recent sales prices around $340,000 we are getting roughly 100k higher than the average and selling our houses in an eighth of the time. It’s purely speculation because removing our sales comps, nobody would even guess what we are doing is possible. In fact we’ve heard local realtors scoff at our asking prices then say that we are the talk of the town when they sell. How are we doing this you ask? Simply by buying low, doing the construction ourselves to control costs and offering a product that you can’t find otherwise nor replace for the same price. Sure, there are some “updated” houses we compete with but nothing that’s been totally gutted, added onto and all new from scratch. It’s also gratifying to know that we are doing a good thing for the area and actually creating organic inventory for buyers by turning these otherwise uninhabitable homes into great new places for new families to live. Here’s to Lucky 13.
The Neighbor’s House is finally done and officially on the market (in MLS). On Friday we took hundreds of photos for our marketing campaign and web content. My favorite parts would be the master suite, having hardwood floors in the master bath, the cool Samsung fridge and of course the river rock shower floor. This house really came out good and all the concrete work and driveway gate really makes it a complete package. I got it in the computer late Friday night and this weekend we are already getting calls and have had offers. We priced the property at $389k and are marketing it heavy as a 2 on 1. Total square footage with the rear house included is 2,630 and if we used our recent comp of $175/s.f. it would put the value at $460k so I think our pricing is fair. The extra value that rear house adds should push us close to this new price level if we find the buyer who needs it. We sold the house next door for $340k in 5 days, $175/s.f., so I think our pricing here is in line although it’s quite a bit higher than most comps in the area. As I mentioned before there was never any sales over $285k for these historic homes in our farm so what we are doing is really outside of the box and drastically changing the neighborhood. We are buying at such a low level and with low construction costs it enables us to come to market with a superior product and at an affordable price, as replacement costs for one of our projects would be much higher than our asking price. Plus, who would want to live through a remodel of this caliber? Our success has been derived from offering a quality high-end remodel in an inner city neighbor and knowing that there are young professionals who work downtown and want to live close that will gladly pay for it. I compiled some pics so you can see the finish out as well as a new YouTube video that documents the whole rehab and shows what we went through along the way.
My plans are finalized for our next project, The Target House so we’ll be pulling the permits this week and weather “permitting” ha ha, getting started grading the back yard with the Bobcat in preparation for the addition. As we all know, The Spring buying season starts right after football season ends and it’s right around the corner. Additionally there are over 3000 more medical officers moving to San Antonio from February to May that will be stationed at neighboring Fort Sam Houston due to B.R.A.C. and most of these soldiers will be buying homes in our area. We have a great product and are ready to see how this plays out; we’ll keep you posted!