The Riverstone is my favorite condo conversion. We even have a thread dedicated to it in the forums. The lady that bought a few condos (and appears to have convinced a few relatives to buy too) is a realtor and she immediately put them up for rent. A friend of mine was pitched a condo as a flip when they first opened. They even said that many “investors” that bought are cash-flow negative because they’ll have >$40k appreciation in 2 years. I thought they would’ve gone repartment by october, but I guess not.

Whats going to happen… after the Section 8 And the Apartments renters start Flowing In…. Paying if there lucky 1,400. dollars- Im saying LUCKY… Because the Rental Market is NOW HAVING PROBLEMS AS WELL..

IM NOTICING: That there is a increasing number of apartments offering free months rent…. this Is the FIRST STEP In the process before they start to lower the Rents… The Professional Property managers ALWAYS OFFER FREE MONTHS in a downward rental market… the reason they do this is its better to give FREE MONTHS RENT… Than lower the Rents- Once you lower the Rents its much harder getting back to point of where the rents were.
Ive gone though couple of Property Management Courses… Lets Just Say you might not ever Rent from A Large Professional Property Manager again if you knew all the Tricks and Angles they play on raising the Costs and Milking every dollar along the way. If you can find a Property not managed by a large professional company you might be better served there if you plan on being in a position renting apartments.

BACK TO RIVERSTONE Question: how many of these Units out of the 25 might end up being Foreclosurers after the wave of renters hit them?? The Units are not going to be worth much in this Senario…. in-fact “I Would be hard pressed to give 140-150,000. dollars for one of these units today..

RIVERSTONE Apartment/Condo Conversions…
Get this they been trying to push this PIG For almost 2 years..

98 UNITS… Roughly 25 CLOSED.. There not even close to hitting the 1/2 way mark… the 1/2 way mark is Very important in these projects, thats a Big Requirement to get Loans closed especially NOW..

Most these Aparment/Condo Convertors…. Take 2 year loans usually Interest only themselves…

Now its gets interesting that the RIVERSTONE Is coming up or might just be getting to that 2 year Mark.. The person behind this has something like 3 other projects.. He is LLC- Which in some ways changes the Liability on the overall project- seperating each Unit to protect and create seperate entities… hard to explain.

Im willing to bet Riverstone will be going back to apartments on the remaining units in the next 6 months? it should be interesting seeing/watching the process… would like to be a fly-on-the-wall in the phone conversions Meetings and whats going though the head of the Investors taking this risk on..

You can see on Zillow if your curious THE ACTUAL SALES PRICE For Riverstone was Something Like 14-15 Million for the 98 units. If you broke down this into the 98 Units you can see just how inflated according to rents they are..

Something like 43 cars are parked there now… FUNNY: One buyer asian Couple purchased 3 Units, I trying to remember if this is 4… however, what does it matter? these Units dont even “rent out for positive cash flow- the payments average about 2,800. dollars a month on the units which are priced in the 300,000 range some are as high as 380,000 for about 1,100 feet- the parking is Of Course All open and this Apartment/Condo conversion is Corner Part of the GREATER APARTMENT Buildings surrounding it….

Hopefully this gives some Clarification for the LUXURY RIVERSTONE: As it says on there Sign, LUXURY BELLEVUE LIVING

They have Several loan Programs that are Being Funded by the Bank that FUNDED THE PROJECT..

INFACT: They are Offering Interest Only loans.. INTERESTING, apparently the Bank is Maybe going to carry the paper for this Loan in the Interest Only Senario… IM ONLY GUESSING on this Senario, However Whos going to accept Interest Only in this world- other than the Bank that has everything to loose on this project not getting some feet under it, So far there hasnt been any takers from the looks of it… One of there Loan Programs “Interest Only- gives you something like a 1,500. dollar payment.

NOTE: Champaine is LETS JUST SAY: Small Units- they have a 2 Bedroom Model… OK- Hahahaha… HOWEVER- That 2nd. Bedroom is only screaming “Very Small Office or Baby Room…. from the low 300s for a 6-800 square foot apartment.. OF COURSE ITS LUXUEERY LIVING IN ITS FINEST… … Didnt you Know everything is LUXUEERY IN BELLEVUE

Champaine was totally gutted and talk about a Plumbers NIGHTMARE…. The plumbers working this project Were pretty vocal, “LETS JUST SAY- Is was a Total Patch Job….. they spent so much time trying to patch into the Very Old Pipes that Im guessing down the road the Future Tenants- possible apartment Renters? are in for some Potential Plumbing Problems..

Get this the CHAMPAINE Doesn’t even Have Natural Gas ON THE PROPERTY.. You can easily reference this by calling them… Im very familiar with this property.

I was wondering about the 0% down some condo conversions were touting (like this one). Note neither my wife or I has ever seen a car parked at that condo. How long can the hold out with zero sales?

…is that when all these craptacular apartment to condo conversions ultimately don’t sell (I certainly wouldn’t buy one), and revert to rentals that lowly renters will have access to the ultimate life defining experience of basking in the gloriously luxurious glow of the light as it reflects of the granite counters and stainless steel appliances?

Whoo Hooo!

/sarcasm

Apartments are pretty much built with Lower Quality… Packed Parking in most cases not even covered.

Apartments are not usually built with great Insulation for heating and Sound proofing..

Most these Conversions Locally in Seattle are on Run Down Apartment Buildings…. that have high maintenance cost and Utilities run higher on Buildings built from the 60s and Older. Face it Utilities cost wasnt a great concern back then.

These Projects were simply for the most part Fast Buck Artists coming in and paying WAY OVER MARKET PRICES for Old Apartment Buildings that Were “Not even close to the VALUE Of the Rental Market Value of these Apartments.

The only way these projects could fly was selling them at Grossly Inflated Home Ownership Values.

Now the problem is that so many of these buildings are having Trouble Selling… Now the Problem on some projects of the Buyers in some cases that purchased the first units a year or so ago of now wanting to sell and compete with the Units the Condo/Converter Wants to Sell.

The Next 12 Months Will Be Interesting.. to say the Least.

When they hit this REQUIREMENT They then can package the 50% Condos that have sold AND Shoot them off to FHA…

By giving the 0 Down they close many more Loans that they couldnt of Otherwise…. … Face It the Consumer Loves not having Skin in the Game.. Its a Well known Marketing Ploy.

Many Most of the Apartment/Condo conversions are funded by Local Banks that HAVE EVERY INCENTIVE Of getting the Projects Sold…

They carry the Loan on there Books up to the Point they reach the ReQuirements of CURRENTLY FHA….. …. In most all Cases..

Since FHA Has at this point as far as I Know the LOWEST Downpayment requirements… something like 3% down.

By Placing the Money in a TRUST… They are getting arround the GIFTING Rule… I Believe the RIGHT TERM IS: TRUSTING The Money to You~!!

These small Local Banks that I know that are Locally doing this: LETS JUST SAY THEY HAVE NO INTENTION OF CARRYING THESE LOANS FOR THE LIFE OF THE LOANS..

YOU CAN PUT LIPSTICK ON A PIG- PROBLEM IS IT’S STILL A PIG~~@@

I think much of the unsual data is explained by the loss of scam down payment assistance programs after September. It goosed September and borrowed from October. Sales and prices will be very weak from here forward

NOTE:

ITS STILL HAPPENING~ The Way the Game of 0 DOWNS ARE PLAYED NOW….

ITS CALLED TRUSTING THE DOWNPAYMENT…

You doubt me go arround to the Apartment To Condo projects and NOTICE THE 0 DOWN SIGNS… There Still There..

By trusting the 3% to you there getting arround the Rules by being Creative with GIVING THE Downpayment.

Effectivly there in THE BUSINESS OF SELLING FORECLOSURERS..

As far as the hits and session on my web site, they just come in. There is a report that shows the Seattle Bubble as the source. I started using the Seattle House Cleaning web site in my gravatar over a month ago to see what that would do to my numbers. It’s staggering the amount of people who click on my name here.

Anyway Thank You Tim.

For one, currently I rent and dont have to worry about mortgage payments. That is my landlords problem, not mine. IF I were to be laid off, I have a ton of money saved up and I can simply move to a smaller place. I dont have to worry about paying a mortgage every month or desperately attempting to sell a house in this market. (50% of my savings are in stocks and beaten down right now, but I am not interested in selling them for another 10-20-30 years)

With regards to my job. Sure, layoffs are always a possibility. I know I can always go back to a couple of previous employers who would be extremely glad to have me back. (They tried increasing my pay 15% as a counteroffer to what I was getting here, I am sure they would be more than happy to hire me back at my old pay level).

Compare this to people who bought houses on a single income and over extended themselves. Or people who had double incomes and bought the house assuming they would both stay employed. That is where this wave is going to hit next and it wont be pretty.

I feel sorry for some of those folks, but there was a reason 30 year mortgages worked when the monthly payment was less than 30% of a single income. The sooner we go back to those levels, the better it will be for everyone.

Everett Tom I disagree. I think people on the Bubble are very investment minded. I know I have met over 10 bubblers and sold 5 of them Homes. Gems in residential? My passion has always been in Commercial. I think Bubble heads and YOU need to think outside the “residential investment box”. There will be alot of commercial gems coming in 2009. Its on the MLS and Craigs. If it doesnt sell who cares. Its still a GEM and will force me to be a BOSS again and manage a schedule. Dang…… I apologize Tim for offering my concept of a GEM to the masses of BubbleHeads. BTW Everett Tom if a BubbleHead buys it from this Blog. Tim will get 3%. Hows that. Either Tim or an Agent will get it.

Home sellers warming up to idea of renting
From the PI

And David L. I think the Tim commented awhile ago that he’s got a nofollow option set, so search engines don’t use any of the links in these comments for ranking…, so your comments here arn’t helping your search engine ranking… (right?).

the problem with her is most likely not so much her as it is me. I should give her 8k for her stuff, staff it, and easily triple my 1k to about 4k but then I have to deal with staffing…ugggggggy

CNN money forecasts another 20% decrease for 09.

Why is the tenant a pain?

Cash Cow!!!!

Ray you have given us the perfect example of real estate today. Between 1997 to 2005 this property went up from $35K to $65K. From 2006 to today it went from $65K to $265K.

Welcome my friends to the show that never ends.

I know the tenant is paying high rent as opposed to the previous tenant who was paying reasonable rent, I mean low rent.

I did check my hot sheet this morning to find about five GEMS sold in North Seattle in the past few days out of about twenty closed sales. Another five people way over paid for properties while the rest paid retail, not real numbers just my opinions.

It’s all about the deal you can make today. Prices are staying about the same. We don’t see huge price reductions. Everybody wants to believe that prices should remain inflated.

The very vast majority of the listings on my hot sheet are new construction.

I would like to take a look at that. What impact does new construction have on pricing, especially on the price per square foot? My hazy recollection is that I can build for about $125 per square foot. How does that now translate into over $200 per square foot or even up to $300 per square foot?

What are the price break downs for town house, condos, wood construction versus concrete and steel?

It’s all a matter of perception.

I ran some numbers last night concerning Real Estate sales income. Yes our house cleaning company makes money compared to the people who “sell” Real Estate.

Even though you look at Real Estate agents as making a ton of dough for giving you bad advice the reality is you need to be in the business to make money.

Real Estate agents who build housing units make more money from the owning the units than the commssions for selling the units. Building housing units have been what drives the Real Estate prices.

What do I know from forty years of contracting, cleaning, selling, buying, or trading in Real Estate? Nothing.

I learn something every day about Real Estate. I originally came to this site for organic search engine optimization. My link average on comments is about eighty a day.

What I learned, and never saw coming was the global credit market. Even after reading the warnings here it took a trip to Spain and Peru to actually see what the impacts are.

You learn by being there. You learn by participating. How involved is the agent you get your Real Estate information from? Is an internet lead generation web site the place that’s going to give you information or more apt to tell you what the masses want to hear?

If people lose their jobs people who rent will have a hard time the monthly payment. At this point it doesn’t matter if your rent or own these economic conditions can hurt anyone.

Hulk – at this point there are many people who are in fear of losing jobs or have already lost a job. How do you know that your job is secure and you won’t have a hard time making your monthly payment?

We ain’t see the bottom yet. By the first quarter of 2009, the down-trend will be intensified.

We all know the cracks started to show a couple of years ago, and the leaks a couple of months ago. The flood is coming soon. Unemployment numbers will be pretty bad (over 8%?) by the summer. Heck; they claim “real unemployment” is over 7% now.

By Idiots,for Idiots and to Idiots – > Real estate.

I dont drink coffee. I’m not a Barista.. I dont have the time.

Good LORD!

28180896 MLS #

We will return to pre 1998 levels, It’s a done deal.

We have nothing to fear. Europe is going to take the brunt of the economic melt down. The Euro in particular will have a very shaky future.

We have resources, like wheat, corn, oil, sugar, and oranges, commodities. We have land for solar, geothermal, and wind. We have a centralized democratic government.

We have stuff Europe used to dream about.

The trick about housing prices is in the individual housing units. Town houses are worth nothing but the dirt they sit on. many Craftsman Homes have been let go to point they are only worth the dirt.

New construction has become a Catch 22. Builders and owners of new construction want to make out like the new homes have value. A lot has been made of construction cost. The down side is that as we “clustered” housing or densified neighborhoods we destroyed a lot of value by bad zoning decisions.

Then we have the construction practices of today. If a builder built well that would be great. Unfortunately way too often builders did hack jobs and sold for top dollar. As those hack jobs fall apart other properties will devalue.

You can talk about the global economy versus the local economy, but what has happened is housing units got built, bought, and lent on for many of the wrong reasons.

What do charts show about land use? What is a good building site as opposed to a bad one? What ever in the world happened to critical area hazards? What are the building codes in your area and how can you avoid them, or get a project to pass inspection without following the codes? Which builders get a free pass and which ones have to tow the line? Which districts have future economic viability?

Where are the charts and graphs showing my street values and the future economic viability of my street? Is my house better built than the house on either side of me? How about my lot placement compared to every other property on my street?

It goes back to if the internet is the place you can get information concerning the house or home you want to buy. The probability of a web site giving you anything more than very basic information defeats the money for nothing concept of the internet.

radfun wants to make money. Tim wants to make money. On the internet you make more money by inviting people into your site so you can get people to pay you money. So you tell people what they want to hear.

http://seattlepi.nwsource.com/business/386233_boeing04.html?source=mypi

Congrats on your new “digs” at redfin. Hmm hard work and analysis does pay off. After seeing so many “realtors” and “mortgage brokers” and “securitization analysts” take home millions in bonuses, I was wondering if there was any sanity in the RE market.

Slowly but surely we will now be moving into phase 2 of the RE meltdown. Phase 1 was the credit crunch ending easy money supply (and thus no more ninja loans). That took out the front shock wave of the bubble. Sadly with the credit train grinding to a halt, the entire economy is slowing down with it as well.

With a brutal holiday season, lackluster sales everywhere (see auto sales for the past 2 months for examples), massive layoffs and dreadful unemployment is on the horizon. And when jobs are lost, who is going to make mortgage payments? If you thought Phase 1 was bad wait till you see Phase 2. I expect prices to rewind to 2002/2001 levels before the whole thing settles down. It will be a triple whammy of Phase 1, Phase 2 and higher interest rates that will take down the housing market.

http://calculatedrisk.blogspot.com/2008/11/tech-slowdown.html

I want some of their drugs….. just to help wiith the rainy season blues!

"golly", Tim! If only you hadn’t wasted your time with this silly blog and bought a house instead, you’d be $0 wealthier! Unless you tried to sell now and lost an additional 8-10% on transaction fees as well.

Thanks The Tim! so $385k. If it translates into a simialr closed sale median it’s almost exactly 20% off last years July median of $481k. Significant.

Interestingly, $385k was also the median in August 2005, the month I started Seattle Bubble, and wrote this:

One thing I do know for certain is that the recent trend of rapidly increasing property values (double-digit increases year-on-year) cannot possibly continue indefinitely. If it did, eventually everyone would be priced out of real estate. There has to be a slow-down sometime, and I think it’s coming fairly soon (within the next 3-5 years). I don’t know if it will take the form of a leveling off of values, or a slow decrease, or a sudden decrease (bubble bursting), but I know it is coming.

What with the post election stock market starting to look like 1929 again; a downturn in Seattle Home Prices is a good thing….they’re starting to realize with rising home mortgage rates, unemployment and loan scrutiny….lower prices at least mean a few more sales.