From The Washington Post
(Can’t believe they didn’t interview me! I need a better publicist.)
By Ovetta Wiggins
Washington Post Staff Writer
Sunday, April 11, 2010
The house on 29th Street in Mount Rainier is a shambles. Mold and mildew cover the walls. The carpet reeks of urine. A chandelier in the dining room and dingy white curtains in the windows are the only reminders that the house was once a home.
“They let it sit so long it became a crack house,” said Karl L. Granzow Jr. as he walked through the building, looking out for rodents, roaches or their remains.
Despite the condition of the house, it is just the type of property that Granzow, his business partner, Patrick Ricker, and other investors have been snatching up in Prince George’s County since the housing bubble burst about three years ago. Granzow and Ricker bought the home on 29th Street a few months ago.
The properties are inexpensive. They are inside the Capital Beltway. And they are in communities where redevelopment projects and new construction are underway.
Granzow and Ricker said their company, Property and Industry Coordinators, has bought and renovated eight homes in the past year. Most of them are in Mount Rainier and Hyattsville. Bright Lusk Properties, a family-owned business in Hyattsville, has bought three since 2008. All are in Hyattsville, one of the Prince George’s communities hit hardest by the foreclosure crisis.
Last year, Prince George’s had 13,412 foreclosure filings, more than any other jurisdiction in the state. A filing could mean that the homeowner received a notice threatening foreclosure or that the property was sold at auction or was repossessed. The county, with 13.8 percent of the state’s housing units, had 31 percent of the state’s foreclosure filings.
Under the circumstances, housing and foreclosure experts said, it is no wonder that investors are eyeing places such as Hyattsville, Mount Rainier and Capitol Heights, communities with older housing stock near the District line.
“These are desirable locations,” said state Del. Doyle L. Niemann (D-Prince George’s), who has sponsored a number of bills dealing with foreclosure in recent years and who prosecutes mortgage fraud as an assistant state’s attorney. “Mount Rainier and Hyattsville are strong and attractive communities to folks, even in the current economic recession.”
Maryland does not track what happens to homes after they go into foreclosure or how many of those homes are bought by investors, said Raymond A. Skinner, state secretary of housing and community development.
But Skinner said it seemed likely that people would be looking for bargains and that many investors would focus on older communities, where the prices are lower and the chances of resale are greater.
Rebekah Lusk, a resident of Hyattsville and a founder of Bright Lusk Properties, said she chose to buy a house in the county’s Lewisdale section because her company wants to be part of the redevelopment effort in the city. All of its properties have been renovated and are being rented out.
“Our goal is to be active investors and be involved in the community,” she said. “We don’t flip. That’s not our goal. We’re not looking to put properties back on the market when there are so many already on the market.”
Niemann said the properties would otherwise become increasingly blighted or would be scooped up by speculators with no ties to the community.
Ricker said that he has made a living brokering real estate deals and investing in new developments — his company’s offices were raided by the FBI in 2008 during a probe of a proposed development near the Greenbelt Metro station — but that he had to refocus when the market dried up.
As he drives his black Cadillac Escalade through Mount Rainier and Hyattsville, he searches for signs of neglect in the neighborhoods. Brown lawns. Weeds. Missing curtains. He is looking for any possible indication that a homeowner is in foreclosure.
“When the bubble burst, I said, ‘Why not buy some of these homes?’ ” he recalled.
Instead of going to auctions, Ricker negotiates with lenders to arrive at an acceptable price.
He bought one house in Brentwood for about $100,000. He gutted it, installed marble countertops in the kitchen, new appliances and new bathroom fixtures, and he transformed attic space into a master bedroom. He said the house will sell for about $300,000.
“The positive is that they are not fly-by-night speculators who want to make a quick buck,” Niemann said. “Yes, they are making a return on their money, but there seems to be a strategy to make the community stronger.”
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This is off-topic, I know.
The new iPad is here and as much as I’m a fanboy of all-things-Apple (I would have given a kidney to Steve Jobs), I’m just not sure I see the need to buy one, yet. I dig the form factor and I think its very pretty, but its feature-set wouldn’t make me get rid of my kick-ass MacBook Pro.
Have you checked out the iPad? If so, let’s have some fun. Answer my slick (figured it out myself) survey below!
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Can someone, anyone, tell me where to find the ACTUAL lending rules for FHA buyers. Is it me or do they seem to change everyday? For the love of God, will the US Government just get the hell out of my way? All I want to do is buy super-crappy houses for pennies on the dollar, throw a chunk of money at them to make ‘em crazy pretty, and sell them for a huge profit. Simple, right?
Based on pure capitalism, my simple little business model seemingly flies directly into the face of the current administration, but its all I know – so I’m gonna keep on keeping on. That said, most if not all, of my buyers are first timer’s who use FHA or VA financing. I mean seriously, does anyone have 20% down anymore?
The FHA almost came to their senses by suspending the 90-day seasoning requirement on flips, and as we were all jumping for joy, we soon realized they didn’t. All the changes they made are now the subject of great debate. This is no lie – I’ve talked with lenders and other real estate investors just in the past few days who all seem to be confused regarding:
- What’s the deal with the 90-day rule? Can I sell a friggin’ house within 90 days or not?
- How many appraisals are needed and when a 2nd appraisal is ordered?
- What the rules are concerning flipping houses when you are an agent?
- What’s the deal with credit scores? Is it 580, or 620?
- Is there a new rule concerning raising the asking price to cover seller help?
Now, I KNOW, I read that they suspended the 90-day seasoning requirement and investors were jumping for joy thinking this applied to them- but then the FHA came out with more precise language. If you want to wade through it all you can do so by going to THIS LINK on HUD’s site.
The general consensus seems to be that the suspension applies only to buyer’s who are buying foreclosures from banks or clearing houses that sell bank REO’s – NOT – flipper who happen to get there rehabs done and sold under 90-days.
Tell me what you think. Tell me what you know! C’mon and chime in here and regale me with your knowledge on the subject.
More Helpful Links
FHA Considers Down Payment Requirements
FHA Increases Minimum Credit Score Requirement
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Don’t cha’ just love new laws? If so, you’ve got to be loving all the new junk coming down the pike lately from our Ultra-liberal Maryland politicians. It’s pretty tough to be a landlord in Baltimore City, what with the stringent lead laws, and now – how about some carbon monoxide for ya?
I just received this very important email from my friend June Piper-Brandon; Kick-ass Realtor in Anne Arundel County. June’s all over AA County, but does a lot of business in Baltimore City as well. If you have rental properties in Baltimore City, you better read about this new law.
Here’ s the reprint from THIS article from the Baltimore CityPaper
By Erin Sullivan | Posted 3/3/2010
Per the Baltimore City Health Department, as of March 1 it’s mandatory that you have a carbon-monoxide detector installed in your home. We haven’t heard much about this ordinance which, according to information posted on the Department of Health’s website, was introduced in Jan. 2008 but only went into effect this year.The press release announcing the law (dated Feb. 23, but sent out by automated Nixle.com notification service on March 2—a day after it went into effect) indicates that the law “follows the February 13th sickening of six passengers on a cruise ship docked in Baltimore.” Which is somewhat baffling, since the law would not have applied to the cruise ship since it’s not a city dwelling. Plus, the law actually passed 18 months ago, way before that ship even docked in town.
A basic carbon-monoxide detector will only set you back around $20, but if you’re really strapped for cash, Johns Hopkins Children’s Safety, located inside Children’s Admitting at the Johns Hopkins Children’s Center, has 250 of them to give away for free to those who qualify. According to Kisha Price, health educator at JH Children’s Safety, they’ve only given away about 50 so far. (If we had to guess, we’d say that’s probably because there hasn’t been much in the way of a public-education campaign about the new law or what it requires.) If you qualify for need-based programs like WIC, temporary cash assistance, and the like, you probably qualify for a free detector. Call (410) 614-5587 to set up an appointment to get one.
Even after the freebies are gone, Kidde says, “our center offers them pretty much for what we pay for them, or less.” The center’s also got reduced-cost fire alarms and other such safety implements.
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Well, there doing it again in Baltimore. Thank you; oh ever miopic, ultra-liberal Baltimore politicians. Folks, if you own rental houses in Baltimore, you better read the email I received this morning – and YOU BETTER ACT. C’mon, let’s start our own tea-party. Get active! Attention landlords in Baltimore City – if they pass this lead law in Baltimore County, you can believe it will be coming to the city.
Baltimore is already a terrible city in which to be a landlord, but just when I start to think they can’t get any worse, they’re now looking to make the lead laws in Baltimore even more stringent. Read below:
Our lobbyist Bob Enten has asked our help in defeating Senate Bill 504, scheduled for a hearing on Thursday March 4 at 1:00 p.m. in the Senate Judicial Proceedings Committee.
This bill would require owners to perform BOTH the 10-step risk reduction standard AND clearance lead dust tests in order to get a Full Risk Reduction Certificate from MDE. This would cost millions of dollars and would not result in the decrease of incidents of lead poisonings. MDE statistics show that over half the poisonings in 2008 occurred in the dwellings other than pre-1950 rental properties. In addition, the statistical trend – in reducing incidents of lead poisoning – has been steadily downward over the 14 years that the law has required us to perform either the 10-steps or lead dust clearance testing. MDE needs to concentrate efforts on enforcement of the existing law, not on making the law more difficult and costly for those who already comply.
There are two important swing votes in the JPR Committee:
1. Senator James Brochin of Baltimore County District 42 (telephone 410-841-3648; email jim.brochin@senate.state.md.us) – His District includes Towson, east to Harford Road,
and
2. Senator Norman Stone of Baltimore County District 6 (telephone 410-841-3587; email norman.stone@senate.state.md.us) – His District includes Dundalk.
This week, we need to send many emails and phone calls to both Sen. Brochin and Sen. Stone from property owners in their respective districts – asking them to vote against Senate Bill 504.
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In yet another attempt to completely ruin my business model (yes, its all a move against me only), the Federal Government; specifically the FHA is changing its guidelines AGAIN for home buyers. If you are a rehabber, you must read this story from The Edmund Sun entitled, “FHA Loans To Cost Homeowners More.”
The title sounds good already huh? How do you think this will effect your rehabbing business?
Link to story is HERE
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I’ve been saying for months now that there are three variables rehabbers must follow (especially in Baltimore) – to sell their houses quickly and for the maximum profit. If you follow this simple formula (and you buy correctly) while rehabbing your houses, I’m telling ya; YOU WILL MAKE MONEY. If you stray you will get bit, so says the Baltimore Sun. This is the biggest real estate investing tip revealed (again).
Craig’s Formula For Successful Rehab Flips
- Buy in Places People Actually Want to Live. Kind of a let down, when my super secret formula starts with Location, Location, Location, huh? It ain’t really rocket science folks. Newsflash; along with buying at the right price, selling is still about location, Baby. Stop buying houses in sketchy neighborhoods; places where the renters outnumber the homeowners and where you’ll find blinking blue police lights. Buy in solid homeowner areas and stay off main roads.
- Do a Super-Sweet Rehab. There’s a lot of listings on the market. Uhm, that’s your competition. In my area, I’m competing with a ton of “nicely kept,” or “well-maintained,” listings, so when my kick-ass, super crazy, sparkling clean and new houses hit the market, they far exceed what I’m competing against on the MLS.
- Price Your Rehabs Below the Market. Ask yourself this; if a “nicely kept” house is selling for say, $200,000 in 45 days, why wouldn’t your kick-ass brand new rehab sell for $190,000 in 30? Don’t get greedy folks. Its OK to make big profits, but don’t think you can make the market. This is SO IMPORTANT, and its why I sell houses in 9 Days while the average is 120 days.
I so wish I could tell you that there’s more, but if you live your rehabbing life by the three simple rules above, you should be able to safely sell houses in this market.
Check out this great Baltimore Sun entitled Real Estate Asking Prices Fall in Baltimore Area that talks specifically about rule #3. I still know people playing the list it high and reduce it to sell game. That strategy was played out a year ago!
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Remember the beginning of the mortgage meltdown? One of the first big banks to fall was IndyMac Bank. Who do you think bought the assets (all those mortgages) of IndyMac after the FDIC took over? What kind of a deal do you think the new owners got? “Hope and Change,” Baby! Its working out real well for the buyer’s of IndyMac Bank.
The unbelievable video below from Think Big Work Small became viral overnight. It has been seen by millions on Facebook and YouTube. Its garnered so much attention that the FDIC actually moved to rebut little ole’ TBWS’ claims in the shocking video via a story originally printed in Reuters BreakingViews.
I’m telling you – you will be shocked when you see this video, and you should send this link to ALL of your friends too. Its time to throw them all out in Congress. No matter your political affiliation, we need to clean-out the swamp (thanks Nancy Pelosi) once and for all.
This is SICKENING! Go ahead. Watch it – then watch it again. Then tell all your friends to do the same!
← CLICK the picture to see the video on ThinkBigWorkSmall.com
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Caught in the act. Tax Lien Sale mischief in Baltimore. Hey, here’s a shocker for you; smart guys with a ton of money duping the system in Baltimore City. Even the lowly passers-by bidding at recent Tax Lien Sale auctions in Baltimore have known for years that the big sharks were in cahoots. Well, it seems the sharks have finally been snagged and their getting slapped pretty hard. Oh how the mighty have fallen.
If you like reading about big-shots being taken down, or if you are even remotely interested in the tax lien sales in Baltimore, you must check out this post from my good buddy Ned Carey. Ned is an all-around good guy who has made some pretty nifty money over the years buying tax lien certificates at the Baltimore tax lien sales. I’m not smart enough to figure all that stuff out, but Ned is – so ask him questions!
Ned’s Link: The Last Shoe Is About to Drop
Incidentally, I used to speak with Jack Stoloff; the old man in the story who just pleaded guilty. Its a wonder this rich old guy wasn’t permanantly in traction from patting himself on the back so much. He loved to regail young guys like me on all the money he had made over the years. Read Ned’s story to see how old Jack is about to lose a crap-pile of mula!
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Oh the weather outside is frightful, and that’s just the way my 3 year old likes it. In usual fashion he woke us up this morning at about 6:05am but on this snowy morning he exclaimed, “Mommy, that’s more snow than I’ve ever seen in my whole wide world!”
I was actually planning on working today as I have been a busy little squirrel stocking up on and saving houses for the winter. Yep, that’s right we closed on the purchase of three more this week; one on Thursday, and two on Friday. I also got one more under contract this week. Stay tuned for all the video updates!
That, ladies and gentlemen brings the pipeline to NINE. Nine houses to be rehabbed and put back out on the market as soon as possible.
So I have a request – COMMENTS! I’ve even made it easier with a new commenting software (DisQus) installed below. What I really need right now is comments on where I can find some cheap but nice tile. I’m looking for closeouts, lot sales, etc. I need 16 to 18 inch, or stuff that goes beyond the run of the mill.
Let me know!
Finally – if you have kids who still believe, you have to check out Santa’s Portable North Pole. Its 100% free and 100% magical. You can craft a personalized video from Santa directly to your kids. My little guy almost pee’d his pants when he got an email from Santa. Very cool!
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