All Forum Posts by: Kevin Dickson

My favorite source of information about gurus is John T Reed's guide to gurus:
http://www.johntreed.com/Reedgururating.html

Well researched reviews on over 150 gurus. Donald P. Beck isn't in there, however.

@Scott W. ,

Thanks for the quick real world numbers. They seem about right to me.

I agree with the philosophy @Steven Maduro is promoting.

A simple approach I use is to buy all the appropriate bath and kitchen accessories at IKEA that will fit the space. They are all coordinated to match, and have the same "name". They also don't cost a bit more than HD junk and usually are more durable. (often in solid stainless steel) Example: http://www.ikea.com/us/en/catalog/categories/departments/kitchen/20676/

A wine glass rack for $13, for example.

An apartment rehab/management company has built an entire business plan around this philosophy and is a huge success story, commanding 10-20% higher rent than the competition:
http://www.boutiqueapartments.com/index.php/properties/

Their higher prices and cool finishes have generated a lot of talk among their tenants, most of it good:

http://www.yelp.com/biz/boutique-apartments-denver-2

"Stayed in their corporate housing for a 3 months, it did the job, pricing was a little high for what you got, but I did love the use of their beach cruiser." is a typical complaint.

There is much debate about zoning and property values, and we seem to think it's a necessary fact of life.
But always keep this in mind: All of the most charming, desirable, and expensive urban neighborhoods "in the old part of town" were laid out and built by profit seeking developers before zoning was even invented.

[b]Jane Jacobs, Wash Park, Montbello, and Park Hill

@Ryan M

I'm in Wash Park (56 years now). The scrapeoff trend in Denver started in Wash Park and Bonnie Brae in the early 90s. Prior to that, "pop tops" were the redevelopment method of choice, starting in the 80s.
Prior to that, there was very little neighborhood redevelopment because the new neighborhoods were still close in and there was a huge selection of brand new houses.

Jane Jacobs talks about the bustling NYC neighborhoods that got too reliant on only one industry (like shirtmaking). Changing economic forces could easily kill a non-diverse area like that. Most slums in NYC have now re-gentrified because of sheer housing demand.

Neighborhoods can have healthy gentrification too, diversity is the key. The Highlands was "the next Wash Park" for 20 years. Recently that prediction has come true. It still has more diversity than Wash Park, which bodes well for it.

Montbello is one example of a downtrodden neighborhood with low home values. It's lack of diversity in terms of built environment and income levels is the primary culprit. Now (if you can imagine) it's essentially a slum made up of solid 3 bedroom 1960’s brick ranches. There is definitely some fixup and investor activity there, but scrapeoffs are at least 20-30 years out. [url]http://en.wikipedia.org/wiki/Montbello,_Denver

Now, will Wash Park get over-gentrified and implode? Jacobs' observations indicate yes, it could happen. Home prices in gorgeous neighborhoods in Park Hill (NE Denver) suffered greatly due to "white flight" in the 60s and 70s. Those areas have since recovered: [/url]http://en.wikipedia.org/wiki/White_flight
If Park Hill had more income diversity at the outset, home values would have remained healthier.

Even though Denver's unemployment rate is double what it was during the recent boom years, Wash Park currently has about 50 scrapeoffs going right now. The value of these new homes will be $1M- $3M each. Eventually this activity could force out the lower income homeowners and renters because property taxes might get too high.

Some preliminary conclusions:

1. Try to get a toehold in those obviously gentrifying areas if it’s not too late. Understand that older homes are selling for the land value, and sell before the next bad cycle. (Real estate cycles are easy to spot compared to the stock market).

2. Racial issues were the main cause of some Denver real estate problems in the past. Racial problems are diversity problems.

3. Zoning policies are by definition anti-diversity, and are usually the wrong solution to imaginary problems.

All the deeds and notes I've seen recently (at 4 banks in Denver) explicitly prohibit any sort of second mortgage on income properties. Primary residences are OK.

If a second is placed later, they could call the note, but usually don't if it is performing.

Aren't you giving the investor any collateral?

I try to stay on top of urban trends.

Rising home prices "decrease income mobility and ultimately hurt the U.S. economy," reports Nicole Goodkind in this article:

http://www.cnbc.com/id/49551180

Jane Jacobs noticed that overly gentrified neighborhoods will often implode because of their lack of income diversity in her book "The Death and Life of Great American Cities".

Has anyone else identified other trends, like how zoning codes can ruin a city?

On an especially good deal, I'd close. Then it's really just a run of the mill eviction process. In Denver, if there is no lease, I can get ANYONE out within 3-4 weeks. YMMV

I don't see how pressuring the realtors would help. What extra leverage do they have to influence the occupant? I doubt they would pay the moving costs or first month's rent.

One BIG caveat. You can't evict the tenant if he has filed for bankruptcy. If that's the case, run away.

UPDATE

Padmapper is still bravely defying the cease and desist from Craigslist.

Craigslist itself still generates the big majority of interest in rental vacancies. Unfortunately, there is so much overposting that it is essentially forcing us to overpost our own ads. It's a Catch-22 that causes an upward spiral.

Padmapper is still the solution to this overposting since it only puts one listing at one address. Any Craigslist listing that doesn't have a verifiable address is automatically ignored.

So PM is the solution for apartment hunters, but it doesn't solve the landlords problem of having to deal with CL.

Mark H. and Steve Babiak,

Very good points, and I've definitely seen that play out as you say.
In fact, if the neighborhood isn't top tier, you actually have to be a little below market to attract a good tenant. But $100 less for a good tenant is a tradeoff is usually worth making in those neighborhoods.

UPDATE

I did find a quote for $800, but not before Tuesday's windstorm broke the upper half of the tree into the neighbor's yard. I still haven't heard from the neighbor. Luckily, nothing was damaged, even the power line.