Lessons in the Real Estate Market

The first house we bought this year took longer than expected to rehab. We overcame obstacle after obstacle like long distance trail runners, clawing and scratching our way to making things right.  It was important to us to complete this project with integrity and ensure it was solid, safe and beautiful inside and out.  We went above and beyond to improve the comfort and functionality of the house, even if it meant costing us more money in the end.  We ensured permits were used so the house would be properly inspected and we called in trustworthy sub-contractors to complete their own specialties. Throughout the project we stayed mindful of measures to improve the efficiency and re-purpose materials to be as environmentally friendly as possible.  I am proud to say we achieved what we aimed for, as you can tell from the listing photos.

Mirroring the challenges we overcame to rehab the property we are also facing obstacles in the real estate market.  It had been our goal to complete this rehab in the spring, assuming it would sell quickly in the hot spring market and be closed by early summer. Unfortunately due to so many complications, the construction delays meant we were set back from completion a few months.  By the time we were almost finished, we were over eager to have it sold and went ahead with listing prior to the final electrical touches being completed.  We disclosed the work yet to be finished and crossed our fingers buyers would understand.

Within two days of being “live” on MLS there had about a dozen showings and two offers – it was exactly the response we had planned for and were so thankful others were seeing the 828livingroombeauty in this property.  We were under contract by the weekend and looking forward to closing by mid-August.  During the inspection, we held our breath anticipating the report, knowing it is an inspectors job to find imperfections not to reassure buyers and encourage sales.

Sure enough, something had gone horribly wrong.  During the inspection the buying couple, realtor and inspector all smelled the aroma of burning on the main floor.  They canceled the contract.  I don’t blame them, it would have panicked me too if I had been in their shoes.  But from where I stood, it was beyond frustrating to have this burning smell occur on inspection day instead of any other day in the last six months.

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What the buyers were likely imagining behind the walls. (not an actual picture from the house.

Thank goodness we already had an electrician scheduled to work at the house the following week. We removed our listing from MLS in order to complete what was already planned and to find the source of the smell.  In hindsight we should have waited in the first place to list it until we knew for sure it is 100% ready, this lesson is just added to the 4,593 other lessons this house brought us.

It was necessary for the city shut down power to the house to complete the scheduled updates. Unfortunately the timing of this work synced with major power outages across Kansas City with storms and flooding rain.  Inspections and restoring power to the house took a painful and agonizing two weeks.  Finally with the power back on, the electrician was able to sniff out the source of the burning smell.  He found the issue in the master bedroom with the original light/fan.  While the fan was trying desperately to turn the blades, instead it was burning its motor and causing the frightening smell.  He was able to replace it the same day and the source of the burning smell was extinguished like the original contract.

Finally feeling confident in the completion of this project, we once again returned to live status on MLS.  Only this time we were without the big rush of “first day on the market” excitement.  In the last two weeks since we resumed showings, we have had steady traffic and received a lot of positive feedback.  There has been compliments about the finishes and various reasons why the property won’t work for certain buyers.  On a few occasions we heard the house was being considered between two and on those few occasions those buyers opted to make offers on their other choice based on square footage or location – things out of our control.  We know we will have buyers for this house who will love it and make it their home, so for now we wait.

This house brought so many lessons, including growing patience preparing for the real estate market. There are so many unique people in Kansas City and so many redevelopment companies.  Unfortunately, not everyone or every company is honest and knowledgable about what they are doing to their properties. Buying a house is typically the biggest investment anyone will ever make and because of this there are measures in place to help protect people and their decisions, like backing out of contracts. No one can take our word for the work we have done or what we plan to do before signing at the closing table.  We have to demonstrate the ethics and trustworthiness of our company and the houses we redevelop by making a good first impression, because with other houses on the market to compete with we may not get that opportunity again.

 

 

The Party House (828)

We purchased “The Party House” and got started working on demo in February of this year.  Even when we stripped it of it’s dance floor, 8 track shelf, castle-like entrance and bar; the name remained and the ‘fun’ of the party continued.  We had quite a few hurdles to overcome working on this property and felt triumphant to get it to a state we are proud of.  Beyond the success of a beautiful transformation and quick sale, we also had another priceless event to make this flip even more memorable.

The property is a ranch style house with three bedrooms and two bathrooms upstairs plus a full basement with an additional bathroom and two rooms which could be used as bedrooms.  It was a massive project to take on with some major obstacles not typical of every redevelopment project.  We wanted to keep some of the features the last owner had spent so much time and energy to personalize the home and add some of our own re-purposed materials.  One of the biggest challenges was managing how to change the not so functional spiral staircase into something unique to fit the character of the home.  Now the house is clean, warm and ready for the next owners to tailor to suit their needs.

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The new basement is bright and inviting, we had to use a few barrels from the old bar just for staging and the memory of how far this basement has come.  *Still a fun place for a party.*

After a rush of showings and a few offers within the first 48 hours on the market, our realtor called to say she had been contacted by one of the people who used to live in the house.  I was put in touch with Liz, the daughter of the former owners, who expressed her gratitude for someone buying and fixing up the home she loved so dearly.  We agreed to meet and show them how the house looks now.  Liz and her niece Jessica, who was also raised in the home, came to walk though last weekend.  It was an emotional trip down memory lane for them to see the changes and to appreciate seeing the house “brought back to life,” as Liz put it.

Liz recalled when her family moved from across the street in the 70’s and how important this neighborhood was to introduce both her and her sister to their husbands.  She FullSizeRender (1)remembered carrying bricks between the houses to construct the patio, how her dad put a giant freezer in the storage area and then built walls around it, and the hours spent on the pool table and entertaining in the basement.  She talked about where the original stairway to the basement was and how her dad “got a wild hair” to put in the spiral staircase in the middle of the entryway.  And she is looking forward to bringing home whiskey barrels from the bar as her own memento, as she remembered her dad’s dedication to making wine that everyone said tasted awful.  Jessica also had fond memories of the home and especially the bedroom in the corner where her name remained on the wall when we bought the house.  We had been calling the pink room “Jessica’s Room” all along.  She reported unfortunate memories of taking a few tumbles down the stairs when she was young.  And remembered dancing with her cousins on the dance floor and mimicking a champagne celebration by shaking up sprite, loving the sound and feeling of shoes sticking on the wooden floor.

It was extra validation of a job done well to hear from people who lived in and loved this home.  They adored the improvements of opening up the main level living area, adding a laundry room upstairs and brightening up the basement with a sliding glass door and removal of dark paneling.  They appreciated the original touches remaining in the house which blend in now with the fresh space.  Liz stated she believed her mother, who wasn’t able to keep the home and has since passed, would be so pleased to see what has become of her home.  It was an honor to have Liz and Jessica visit, hear their stories and to have them feel so happy about the effort we put into this renovation.  The business of flipping houses can be profitable and it’s the impact on people’s lives which is truly priceless.

Consistent Distractions

We take our job very seriously.  We have invested a lot of time and energy into learning our trade and understanding the business.  Naturally we love the design aspect, shopping, checking out properties, educating about creating a healthier earth and watching  home transform.  And it’s critical we understand the systems to doing things the right way and avoid unnecessary risk.  When it boils down to it, it’s crazy fun.

Life as a real estate investor means we live on the fly, how we spend our days often gets made up as we go.  The best scheduled plans can quickly get detoured when a potential deal needs to be accessed because offers are made quickly.  Part of the excitement of the business is the unpredictability and it can also be a source of frustration.  At times we have found ourselves distracted by the excitement and wasting time on the wrong tasks.

Because of the tendency to chase shiny things, we have begun to emphasize improving our systems to implement tasks and routines with flexibility.  This allows us to keep focused on structure while still allowing for unplanned events.  We time block when to work on marketing, communications, renovation tasks, analyzing deals, education and networking meetings.  We keep each other accountable for sticking to assigned tasks and staying focused.  Our business is more productive because of this method.

Keeping in mind the necessity of avoiding distractions, I stood in our construction zone making a mental note of all of the duties which would need to be worked on over the next few days.  Tile on the kitchen floor to be repaired, trim around the windows, installing appliances, paint etc.  I placed a phone call to the contractor to go over what I was seeing when outside the window I spotted a flash of white.  Grateful to have the major part of my conversation completed, my focus wavered from his words to narrow in on the bright spot across the street.  I darted to the window like a labrador retriever and there it was, a small furry ghost on the tree, the neighborhood albino squirrel.  Okay, so we are not perfect.  We can’t time block everything and may still chase ‘shiny things’ on occasion.

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Not the actual squirrel, you would stop to look too wouldn’t you?

Kansas City Home Sales

soldimagesWith a decrease in inventory and an increase in sales price, Kansas City is currently in a hot seller’s market.  According to the Kansas City Regional Association of Realtors there are 27% less homes listed for sale in the Kansas City then there were just three months ago.  And the median house price reflects the greater demand by increasing 6.7% in the same time period.  If you are hoping to buy this spring, you have a lot of competition.

On the opposite side, this is great news if you are considering putting your house on the market.  You may have heard some extraordinary stories of people who list their home, have dozens of showings and multiple offers within days.  Ordinarily we would think this kind of house would be in a prime location and listed below market value to gain this kind of response.  However, this situation is occurring all over the metro and in every different price point.  The offers have been flooding in for home owners over asking price, no contingencies, with high earnest money checks and all kinds of additional bonuses to get contracts to stand out above others.

If you want to get in on the real estate action, now is the prime time to sell.  There is some up front work to consider as buyers love clean, updated homes with great curb appeal.  However, being a sellers market means buyers are willing to put money into some updating and landscaping just to get themselves to the closing table with a home.  It still would be unreasonable to think you could sell a house at a premium if it needs a complete overhaul or major repairs.

But what if your house needs updating or big repair and you still are interested in taking advantage of the current market?  It may seem overwhelming to replace a roof, repair foundation, install new carpeting or update bathrooms or a kitchen.  We may be able to help, we won’t ask you to clean, we won’t expect you to declutter for showings, and we won’t ask you to make any updates or repairs.  We make fair market cash offers, pay closing costs and close on your timeline.  And as license real estate agents, we may recommend it would be to your benefit to list your property in the traditional way to maximize your profit and can refer a great agent to serve you.  Reach out to us for more information at contact@ecolivingproperty.com or (913)333-9643.  We would be happy to answer your questions and help you with real estate solutions.

 

 

 

Travel Tuesday: Maggie Island

Once upon a time; five planes, one shuttle and a ferry ride from where I am today, I found myself on a rocky tropical island off the Queensland coast of Australia.  If I were being honest, the mystery of Maggie Island was one of the reasons I chose to attend a semester in Australia as opposed to Europe where I had always planned to go.  I can recall my travel advisor reporting:

maggieisaldnkoala.jpgStudents who go to James Cook University in Townsville have the ability to go an hour inland to the rain forest or an hour out the the Great Barrier Reef.  They also can take a 20 minute ferry ride out to an island to spend the weekend.  Maggie Island was named Magnet Island because it interfered with the compass of the ship when it was discovered.

With the promise of endless natural adventures ahead, I headed for Australia and Maggie Island did not disappoint.  Over half of it’s 20 square miles is reserved as a national park.  I learned to scuba dive in the bays, spent hours hiking the rocky trails and soaking up sun on the beach, rode horse back into the ocean, and spotted koalas in OLYMPUS DIGITAL CAMERAthe eucalyptus trees.  With so much the island has to offer with natural beauty and abundant wildlife, it is no wonder the 2,100 island’s residents recognized the need to move towards sustainable living.  The island embraced the opportunity to go solar and installed panels on many homes and businesses,  the majority of homes received smart meters to monitor energy usage and the island has cut energy during peak houses down by 16%.

Maggie Island has plenty to offer eco-minded travelers as well.  There is a wide range of Eco Accredited accommodations to stay and even more eco-tourism activities to enjoy.  In order to keep the island healthy, they limit where motorized vehicles can go and provide walking tours of the forts.  Hostels and hotels adhere to recycling and minimize waste.  They work to build environmental awareness and strive to minimize their impact.  There are dozens of ways to appreciate the island and with so much devotion to conserving it, Maggie Island will be able to be appreciated unchanged for a long time.

kayakmaggieisland

 

Have you considered real estate?

With so many HGTV and DIY shows making flipping look easy, many people have the idea real estate investing is simple and fun.  Choosing design plans, shopping for features and creating something beautiful out of what once was ugly – yes some parts are pretty cool.

In general, the thought doesn’t actually motivate most individuals into action to buy a house and begin construction.  This, as Martha Stewart would say, is a good thing.  Real estate is not as simple as it looks when trimmed into a 30 minute episode.  Unfortunately not all construction goes as planned, surprises can be hidden behind walls, permits can be stalled, and any number of things can go very, very wrong.  Experts who have invested in essential education, have systems for staying on time and on budget, and utilize a network of other seasoned investors can overcome these home nightmare obstacles without faltering.  For the beginner without knowledge about the process, these same obstacles can drive them to bankruptcy.

Okay I know this post started out scary, I promise there is an upside.

If you are a person who has an interest in real estate and realize you lack the time, energy or education necessary to take on a project there is still a way you can be involved and make money.  Redevelopment companies like, EcoLiving Property, grow business by building relationships with lenders who can fund the purchase and construction of a project.  The lender is given a first or second mortgage position to secure their legal interest, meaning the lender acts as the bank owning the property and collecting the interest.  Except you can earn double or more what a bank charges for interest on their mortgages.  The best part is, unlike your money in the bank or in the stock market, your investment is secured with the property and insured – no matter what could go wrong, you can’t lose money.

You may be wondering why wouldn’t we just get a mortgage loan from a bank, especially since the interest is cheaper.  The way our business works, we need to be able to purchase houses quickly and banks – to put it kindly – operate at their own pace.  Additionally, since the houses we purchase are distressed properties well below market value, banks cannot loan on properties without functioning kitchens and bathrooms.  Besides, we figure in the cost of paying our investor to our flips and we value their part in our business.

To review how the process works:

  1. EcoLiving Property finds an extremely undervalued property and presents you with the project.
  2. We borrow the funds from you to purchase and renovate the property.
  3. EcoLiving Property utilizes systems to complete an eco-friendly renovation staying on time and on budget.
  4. We list and sell the property.
  5. At the closing you’ll receive your principle plus interest payment.
  6. You can continue to invest in future projects and continue earning.

If this sounds like a more foolproof way to get involved in real estate investing, you’re correct!  However, we will not make money for just anyone.  We want to build investor relationships with those who have the same passion for our mission.  Our homes aren’t your typical flips, we aim to create green, energy efficient and clean home environments and hope you share this vision as well.   If you’re interested in hearing more, I’d love an opportunity to answer your questions.  Please give us a call.

 

Shopping and ReShopping

We will close on our first deal of the New Year next week and have eagerly begun design plans and purchasing for this renovation.  Our decision to start a home redevelopment company was simple.  The real and more important challenge became how to rehab homes to cleaner, greener living environments for the future families who would own them.  With each project we intend to take the care and thoughtfulness as if these were houses our families planned to move into.

Our passion for creating cleaner and greener homes comes from a deeply personal concern for human health and the health of the environment for future generations.  We, like many others, know how illness can devastate a person and their family.  Understanding the science of some diseases and the environmental factors which can cause them, drives us to be mindful of avoiding as many toxic chemicals as possible in our house flipping projects.  Again, we want to ensure the homes we create are environments we would feel confident about living in ourselves.

Yesterday was a productive day of shopping cabinets, counter tops, sinks and lighting fixtures.  We bought a few things to add to our stored items for this house and are beginning to see the design plans come together.  I like to actually have a visual of the items we are putting into each room while we continue shopping, so I started a spreadsheet with pictures of the items we have purchased so far.  I struggled to find a photo online for one of the vanity lights we bought and was disappointed when I did.  The light was listed for sale online with the following warning:

Prop 65 Warning

WARNING: This product contains a chemical known to the State of California to cause cancer and/or birth defects or other reproductive harm.  

Upon further investigation…  This warning means a chemical material used to make this lighting fixture is included in the approximately 800 chemicals listed as hazardous to human health according to the Safe Drinking Water and Toxic Enforcement Act of 1986.  The list, determined by The Office of Environmental Health Hazard Assessment (OEHHA) and the California Environmental Protection Agency, summarizes naturally occurring and synthetic chemicals known to cause cancer and birth defects.  The companies can knowingly continue to use these materials as long as they notify the consumer with the Prop 65 label.

Now do we believe by using this vanity light you are asking for cancer? No.  Do we believe this company manufacturing the lights maliciously plan to make people ill?  No.  Is it possible that businesses ignore the health of consumers over the profit for the company? Perhaps.  And do we, as a business trying to be profitable, have to also ignore the health of consumers?  Absolutely not.

Unfortunately it will be impossible for us to eliminate ALL the harmful chemicals which are utilized in housing materials, however, we are committed to reducing as many as possible.  And for all of the progress we made in buying products for our newest renovation, you can consider us in need of one more new vanity light.

The Key is Patience

One of the most difficult things about buying homes to rehab is falling in love the with character and charm of an older home and have a deal not work out.  As business women it is imperative to make business decisions, make them without emotions and make choices only in regards to the numbers.  Unfortunately for us, we not only chose real estate redevelopment for our business because of the viability of our investments but for the love of houses.

We swoon for great architectural bones, we are giddy with colorful patterns and rich textures, we ooh and aah like new mothers for built-in cabinets, glass door knobs and detailed crown molding.  We don’t turn our nose up at puzzling layouts, moldy odors, and layers of outdated wallpaper.  We seize the opportunity to explore our own creativity, make it functional and develop a home.  We have passion in this process so it’s not exactly ‘non-emotional.’

This week we had to make the difficult decision to let go of a house we had under contract.  The house itself was in an ugly state and in desperate need of love and attention.  We saw through the years of wear and neglect, the sagging roof, cracked stucco, over-sized fireplace and outdated lighting.  We knew the combination of our design plans to update with eco-friendly products and energy-efficient materials would bring new life to this home.  We knew a future homeowner would be able to enter into a warm inviting space where they could truly appreciate the original features we could highlight.  We were enthusiastic about this project and desperately wanted to fulfill the vision we had for this house with infinite potential.

In the end, we recognized the numbers didn’t make sense.  No amount of love for the original wood floors would cover the cost of a brand new HVAC system, the charm of the glass doorknobs was not financial compensation for replacing the front porch and the character of the neighborhood would not pay for replacing the kitchen and bathrooms.  In redeveloping properties there are daily lessons and this single one we return to more than all the rest: The Key Is Patience.

There will be more homes with these features, this one was not meant for us, the numbers have to make sense.  We love our business and we have to show our business love by following the numbers first.

Cash For The Holidays

Most American families begin to feel a rapid downhill pace from Halloween into winter and the end of the year.  It’s around this time when parents look ahead to realize the holidays are right around the corner and there is a need to prepare for the extra expenses.

This year for some families who already feel financially stressed, the holiday season will bring an extra burden.  Parents who are having difficulty maintaining their mortgage payments, keeping up with the utilities or deal with the relentless phone calls from credit collectors fear this season and facing disappointing their children.  It is the helplessly impossible reality too many Americans are facing.

We would like to help families find a solution to change their path, brighten their holiday season and begin the new year fresh.  As a real estate redevelopment company, we can help homeowners facing foreclosure, behind on bills and unable to maintain their property.  Our offers can be made within three days and we can close on their timeline.  A cash purchase could help homeowners to pay off debt and regain control of their financial picture.  Millions of homeowners have opted to sell their homes this way to avoid the hassles of selling in the traditional real estate market, including making repairs on the house and paying realtor commissions.  There is no obligation to find out information.  If this is something you or someone you know could benefit from, we would love to hear from you.

913.333.9643

contact@ecolivingproperty.com

Living Green Pays Off

As a small real estate redevelopment company we rely on the financial support of investors who value the mission of our company to provide ecologically safe and sustainable homes.  It is critical to the integrity of our organization for those individuals to not only be invested in the financial gain they will receive but also in the pride of knowing their backing has positively impacted the earth.

If you feel like EcoLiving Property meets the criteria you were looking for in an investment, we would like to meet with you.  Please contact us.

913-333-9643