Thursday, March 28, 2013

Fracking the inconvenient truth!

I just went to a continuing Education class on Fracking put on by an attorney named Lee Chilcote. He is a big fan of Fracking because he stands to make big money. Now I know that 2 hour education course doesn't give me enough information to be an expert on this subject, but it did give me some valuable information that I feel I must share with you.

First of all Fracking isn't like installing an oil drill or a gas well. This is a big operation. It is a relatively new science that is still in its learning stages. Therefore there have been a lot of accidents that have caused irretrievable damage. For one Fracking drill site to be installed they need 640 acres or 2 square miles. What they do is drill down 6000 to 8000 feet vertically. Then they horizontally lazar out around the center in all directions 1 mile. This is done with water,sand and a chemical. Before this class I thought that the checmical was the cause for all these enviromental accidents. What happens when you drill this far down into the earths surface is you bring up radio active gases called radon. We see radon in homes that are built on shale and have a sub pump. This is a gas that can cause lung cancer. The problem with the drilling is this gas is extremely dense in radon. Not like the gas that may leak into your basement. If they drill too far down below the rock surface they can hit earths plates and cause a shift like they saw in Pennsylvannia with earthquakes.

So far the accidents that have ocurred have been down played. A house blew up in Ohio. Ground waters are being contaminated all over the country and earthquakes have ocurred. There are no repairs for these accidents. It is permanent. The pros and cons for fracking turns out to be financial windfall versus our environment. There are very few laws to protect us from Fracking. The CERLA Comprehensive Environmental Response,Compenstion,and Liability Act does not cover fracking.The SDWA Safe Water Drinking Act does not cover fracking! The RCRA The Resource Conservation and Recovery Act does not cover Fracking. CAA Clean Air Act does not cover Fracking! This Fracking business is like the Wild West. Our countries laws are not prepared to protect it people from this industry. The State of New York and Vermont have issued a moratorium until they feel they can safely move forward with this new way to recover fuel gases.

Governer Kasich is running full speed ahead seeing this as the big windfall Ohio needs to pull itself forward. It will be a windfall and it will give a kick to our State but it is short term. If you own land (and this should be what really rocks your boat) you can't say no to fracking. If a company decides that they want your land they will force you through eminent domain. Like I said earlier this is no little operation. If you are faced with this situation you need to have guidance. Being a part of a land owner assoication is a good first step. If you sign the wrong lease they can reek havoc on your land.

Our country is most proud that a person can buy property. Our Constitution states We the people of The United States, in order to form a more perfect union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United Sates of America. Fracking doesn't apply here! NO laws, no rights of the people, no protection. We don't have to worry about terrorists anymore we have to worry about big corporations destroying our land for the sake of money.

Sunday, February 24, 2013

Cleveland Restaurant week 2013

This year Clevelands annual restaurant week is February 22 to March 3. This is where a number of downtown restaurants sign on to do a price fixed menu for $30.00 a plate. Generally it includes an appetizer, entree and dessert. Last night I went dowtown to enjoy the event. I am glad to say our town was ALIVE!!!. There was so much going on downtown. The streets were full of people. The Jump Back Ball was going on at the Playhouse Square. I think a basketball game was on. We had to take another exit to get downtown because the regular exits were packed with cars around 6:30.

One of the restaurants doing the restarurant week event is Michael Symons Lola. I have wanted to go there for a long time. There was no getting a reservation through Opentable. Sometimes when this happens I call to make an reservation the old fashioned way. Most times I get a table. When I called Lolas the young woman who answered the phone was very smug and announced to me that they are booked until 10:45. It would have been nice if she tried to sell me another night or even said gee I am sorry but we can't accomadate you until 10:45. I am not going to hold this brisk behavior against our famed Michael but as a potential customer she could use a little training in the customer service department!

This years event is focused on Pierogis. We got reservations at Sans Souci in The Renaissance Hotel. This was great because we could park for $2.00 during this restaurant promotion with the certificate I printed on line. The problem was we parked at Tower City underground parking and it has a automatic ATM like machine. We were committed at that point so we paid it. I would not recommend this parking garage. It is scary and hard to drive around in. The good thing was it was cold and once inside we could go to the restaurant and then over to the Casino all within Tower City without freezing! I didn't realize that if you dine in the San Souci restaurant they will stamp your parking ticket only if you park in the Renaissance Hotel parking which is much nicer!

San Soucis Chef Brett Montgomery was voted by some group or organization as one of the best top 5 Chefs in America. I was excited to taste his work. The restaurant is kind of dated French Country which is fine because it gives it a little tattered ambience. The service was good, a little stuffy at first. We ordered the price fixed menu promotion. The appetizer was a pierogi with sour cream and carmelized mushrooms. The mushrooms were great the pierogi just average. I ordered the Lamb with polenta and spinach. It was done perfectly with a great sauce. My campanion ordered the skirt steak with potatoes and asparagas. I liked his better(always do). The potatoes were layered like scalloped potatoes and very flavorful, The steak seasoned and cooked just right and the asparagas was perfect. For desert we both got the Caramel Torte which was fabulous. I am not a big desert eater but I ate more bites than usual.

I was suurprised that this restaurant wasn't busier considering the quality of food and the notoriety of the Chef. I would definetly go back and park with the Hotel next time. All in all Cleveland was buzzing with excitement in the dead of winter. We have so many fabulous Chefs and restaurants to choose from. The Casino was packed with people every machine and table busy. We drove home down 25th street and that was filled with people too. Even with the weather below 30 degrees Clevelanders are out there!

Sunday, December 30, 2012

Distressed property review 2012

Wow, what a year this has been! We have seen a tremendous increase in activity for people looking to get in on the flipping market. That is where you buy a distressed property and fix it up to resell it for a profit. The competition is tough out there!

This is not a game for the mild. It takes guts,cash, and the ability to do the work yourself, so you can make a profit. The most important ingredient I believe, is a good Real Estate professional that you can trust! (ME) You need to know what is the highest amount you will be able to resell it for and what the costs of that sale will be. If you work with a Realtor who is out to make a fast deal it can cost you all your profit!

You need to find someone (ME) who will give you the truth and is in it for the long run.

Recently, I know a guy who is looking to do this. He knows me casually. I found out he is using a real estate agent that has been licensed 1 year! Probably a friend. I don't care how honest or hard working a person you are. 1 year compared to 28 years experience is a big deal! I am sure somewhere along the line he will realize that experience might just make or break his deal. I will keep you posted.

The biggest challenge in buying a bank owned home is money. Either you have cash or you will have to find financing and this is very tricky. The process to get a loan on a bank owned or distressed property can push you over the edge on your purchase. There are so many rules, and different options to navigate.

A couple things to look out for.... Most of these properties come with long addendums. These addendums tend to tell the buyer if they use the recommended title company of the seller, the seller will pay for title charges. I have a title company that will ony charge an extra $300.00 on your purchase if you want to make sure the title work is done correctly. Title work is insurance and it is all covered under the rules of the government so as long as you have title insurance you should be fine. But watch out if you are buying a VA property. They do not offer or pay for title insurance. I would highly recommend you paying the money to have coverage. These properties are in such a mess when it comes to clear title. The insurance is worth every penny.

Another item to watch out for is transfer tax. Traditionally this has been paid by the seller. We are seeing language that is confusing on this causing the buyer to get stuck with the cost. You have to watch every little item on the Good Faith estimate. (which most buyer can't read or understand)Some banks will outright charge the buyer the transfer tax. These addendums are starting to dig into the buyers pockets more and more. The Fannie Mae addendum just changed so if you read it two weeks ago it is not the same. Always read it to know what your charges will be so you can make an educated decision on your purchase.

The other problem, and I don't understand the thinking on this, is the governments repossessed homes tend to have a time period in which they will only accept owner occupant buyers. DON'T LIE ABOUT THIS! The repercussions are not worth it. Huge fines and sometimes the loss of license for the agent. The problem that I see here is sometimes the guys that know how to rehab a home would be the better buyers. They would in fact help bring the market back by reselling these homes at a higher improved price! I just don't get the government. If it was up to me HUD would have a loan product for rehabbers that have shown the ability to fix up homes and re sell them. In fact I would give them first right on the properties.

A lot of buyers are concerned that they are not going to get a fair shake on an offer if they don't work with the listing agent. One of my good friends in the business who has been a major bank owned lister will tell you his entire office only sells 7% of their own listings! In fact if the asset manager sees a listing agent selling most of his inventory and not co broking that listing agent could lose the business. NO major listing agent is going to take the chance to double side a deal to make maybe an extra $1000.00 and lose their supply of business. I am not saying everything is always fair but for the most part these guys are so swamped by their inventory and endless paperwork that they don't have time to screw around.

I had a bank owned property that had multiple offers. The highest offer was way over what the asset manager took. The reason why is the particular property was limited to a renovation loan or cash. This was listed in the MLS. Do you know how many agents wrote FHA offers on it? It was astounding because the house would never fly FHA!

If you want to play in the resale game get a good Realtor with experience, someone who wants to sell you more and more properties and be a partner in your success! They need to understand the different types of financing and what will fly. They also need to give you input on what to do, to best sell the property. It is a partnership. If you are out there just calling listing agents all I have to say is Caveat Emptor.

Monday, September 17, 2012

2012 Real Estate in Cleveland Ohio market update

This has been a fabulous year so far. The market is moving. Buyers are buying and listings are selling. BUT we have not been able to see increases in values yet. Whenever I try to push the value on a listing the market responds with low activity. Buyers are still a little shy and want to know that they are getting "a deal" before they make a purchase. The consensus is no one knows for sure what the future holds for real estate. The general belief is that we have bottomed out and are starting to recover. I hope this is true. There are still some really good deals to be had. If you have the ability to do repairs the market is ripe for opportunities in purchasing postive cash flow rental property. The rental market is very strong. One apartment owner told me he is 100% occupied and he has been able to raise his rents for the first time in 6 years! Buying investment property is still a little tough when looking for a good loan product. Most commercial loans are ARM's (adjustable rate mortgages) with a 5 year balloon. There are a few local banks that will lend money if you have 25% down and good cash flow. Credit unions are also great for commercial purchases. First time buyers have OFHA which will give you 2.5% toward your closing costs.This is an FHA product with 3.5% down. There are some pre payment penalities. Chase bank is offering Mortgage protection to all AFL-CIO members. That means if they lose their job or die the mortgage gets paid. Plus they give $500.00 off on closing costs. Chicago Title is offering AFL-CIO members discounts on title costs. If you have a house that is at a higher rate and have been unable to refinance because the value is less than you owe or you have less income than you did when you purchased you can apply for a HARP loan. Your present loan must be a Fannie Mae or Freddie Mac loan, To find out if your loan is one of these go to to see if your loan applies. Call me if you have questions about real estate and real estate finance. Let me put my 27 years of experience to work for you.

Monday, May 14, 2012

Spring Market 2012

I am very glad to report the market is looking like it might be stablizing. There are more buyers out there looking to purchase homes than I have seen in the past few years. There are still a lot of properties for sale. There seems to be a gap in the $200k to %350k market. Move up buyers are looking to snatch a good deal while the interest rates are low. This has not yet driven up pricing. Buyers a more savvy than I have seen in the past. They will walk away from a house if the price doesn't line up with past sales. If you are trying to sell a home and it isn't moving it is either price or condition. Condos are still a tough sale. I think people have become wary of getting involved with condominiums because of the assesments and uncontrollable HOA fees. This is a shame because there are some super properties out there with some pretty stable HOA fees. When you own a home you get hit with replacing a roof,furnace,central air. Well if you own a condo you get hit with assesments to fix issues as well. Just because you pay a monthly fee doesn't mean you won't have to come up with additional funds for repairs. One of my pet peeves is when people reference Zillow as a price parameter. Zillow doesn't do anything but merge all the values in a neighborhood and gives you a median value. Median values do not take into view what improvements or repair issues are present for that particular property. Another one is when a buyer references the tax value. First of all the county doesn't send an appraiser into every home. They don't even hire real appraisers to put the value on your home. Again the county uses the median approach to put a value on your home. The banks for years have tried to to automate appraisals and have found they can not do this. You need a real person trained in real estate valuation to take an actual look at your property and compare it to other properties that are similar to yours. We look at active properties which would be your competition and comparable sold properties. There is no black and white here. It ends up a caluculated judgment call on where we think the price will be. I have a great track record here and 27 years of experience is something that certainly comes in handy when valuing property. Financing is still available but you need a job or some kind of income and a good track record for paying your bills (credit score). Commercial finanicing is not so great. All I have found is ARM (adjustable rate mortgages) with a short term and balloon payment which means they will finance you for say 3 or 5 years with a rate that can change on a pre determined timetable and at the end of 3 to 5 years they want the full balance of what is owed. This doesn't seem like a good business move to me unless you know you have a windfall coming. SBA (Small Business loan) is a good loan for someone looking to purchase a property they plan to use for their business. It is expenseive and comes with lots of government imposed rules(red tape).The best bet for commercial financing is credit unions. They use a different set of rules than banks do to amke loans. So far they have been the more stable loan product. Let just keep our fingers crossed that this recovery continues! Real Estate sales lead to other related commerce so hopefully we can get back to some level economic recovery.

Friday, February 3, 2012

Outlook for 2012, in my opinion.

Happy New Year! I really think we are starting to see a turn around in the real estate market. If you are on the fence about buying my recommendation is to buy now while prices are still low and the interest rates are at the lowest they have ever been!
The deals are still out there. You have to be patient and keep an eye on the market. I have been in many multiple offers in the past few months.
My biggest advice is don't look a gift horse in the mouth. Half the time I am showing a really great value and the buyer wants to get a even better deal and ends up losing out to a multiple offer. If you are working with me and I say this is a good deal BELIEVE ME!
If you are selling your home it is still brutal out there. You have to be the best condition on the market at the best price. If you are not willing to paint a little here and there or replace old dated carpet the market is going to make you pay anyway. The buyers won't pay top price for a house that needs work, even if it is a little work.
Recently I was just< on a listing appointment and the potential seller asked me if I could sell the home without having to put them through the displeasure of showing it. Boy do I understand where they were coming from! Showing your house is no fun. It is a neccesary evil. Just like going to the dentist, you don't want to go and get drilled but you have to for the long term benefit. Selling of the internet is more likely to happen in a resort market where people may actually buy houses off the internet without seeing it in person.
So here's to 2012. It looks like it is going to be a good one!

Thursday, December 29, 2011

Avon Lake Ohio is a very welcoming community

Recently this last September I moved to Avon Lake. I have spent most of my life in Lakewood Ohio. Lakewood will always have a special spot in my heart. I spent 6 years in Bay Village and found it to be centrally located for my work but I wasn't impressed with the city and its services considering what I was shelling out for it. I have to say I am impressed with Avon Lake. Within the first week of moving here I recieved a welcome letter from my city council person. He invited me to his next meeting to get acquainted. Of course I was too busy moving to go but I felt welcomed! Then I recieved a letter from the water and sewer department. This letter told me about their services and how proud they are about what they do. Just recently I recieved a letter from the library inviting me to stop by. I have never lived in a city that reached out to its new comers so nicely. Everything is so convenient with the state of the art shopping up by route 83 and Detroit. Hienens is so beautiful I had to call a few friends and tell them it is like shopping in Hollywood! ( I come from a grocery store background) I can get used to this! I live real close to Giant Eagle and they are definately keeping up with the pressure of Hienens. Their meat,produce,wine and bakery are great. The discounts on gas can't be beat! Back to the library, well all I can say is WOW! They have a wonderful space and a childrens center for hands on learning plus a special childrens library. The people were all very friendly. When I signed up for my new library card they welcomed me to the neighborhood! The city just built a brand new swimming pool with slides and all sorts of play yard contraptions. The school system ranks at the top. I can see why Avon Lake continues to grow. It really is a nice place to live. I can't wait until the Lear exit off I 90 is open. It will be really convenient. The Cleveland Clinic just opened a new facility off of Lear. With all this I can still buy farm grown vegtables off the farm stands just down the street!