Team Reba Real Estate

At a recent CCIM conference that I attended, one of the sessions covered the movement toward Built Green and LEED Certified commercial buildings.  For WA State, we’re in a good position for many companies because the current building codes for our state already meet many of the compliance elements of the LEED certifications. The presenters stated that, on average, it only added anywhere from 3-10% to the cost of construction to go for a LEED certification and the long run prospects for increased sale or leasing of the space covered or made up for this differential.

They also made mention that a large number of companies are putting into their business plans a requirement to “go green” and part of that includes the work environment.  The thought goes that if shopping for a new location, the business will gravitate to the newer, “green” building over the older non-green building.

Well, that’s all well and good, but I couldn’t help but think to myself, if all the businesses are pushing to be in new construction that meets these green or LEED standards, what will happen to the old buildings?  Will they just sit vacant?  Does that foretell a larger problem down the road?  It’s too early to tell, but I don’t see us blowing up all the old inventory just to make room for the new “green” alternatives.  That doesn’t make any sense either.

To read what others have to say about this trend and how it will affect employers and landlords over the next few years, take a look at this article I received this week from my CoStar membership (a commercial property listing site). The study that is cited says that within 3 years landlords who aren’t moving toward the sustainability movement will be getting hurt in their wallets.

This applies not only to commercial buildings that house businesses, but for those that house residential condos. The first Silver LEED certified condo building in Seattle was the 5th & Madison building. At a recent interview held by a marketing firm, hired by Vulcan, questions were asked whether or not LEED certification was important to buyers.

If you’re a commercial property owner, it would be wise to start looking at ways you can upgrade or update your property to meet the demand for sustainability.  Heck, have you seen the recent IBM ads talking about energy consumption?  Sure, the greenwashing does still have to do with money (profits), but you can be profitable and “green” too, can’t you?  Doesn’t helping a company be more profitable help them decide to choose cleaner options over more negatively impacting the environment?  If the message of green can go that high up the business food chain, it’s going to trickle down to the smaller players too.

And, if your property can help reduce a company’s legal liabilities for worker health issues which in turn helps productivity at the business, and provide a positive marketing message when selling or leasing the property, can it be all that bad?

You tell me… I’m open to hearing what you’re doing….

This article from REALTOR.com Magazine is a bit disturbing when you read that people who owned vacation properties were coming to their abodes and finding strangers living in the houses.  It seems a supposed real estate agent (yet to hear if it was verified) and his assistant were renting out people’s places without their knowledge utilizing the well known Craigslist to advertise the openings.  I’m wondering if the agent was the guy who sold the properties to these owners to begin with and this is perhaps how someone knew for certain that these were only part-time homes for the owners.

A lot of people buy 2nd homes but don’t always have a method of checking in on their place while they are away.  Case in point, a good way to put in a monitor came from Eric Aasness (one of our co-contributers) who has some cabins out on Hood Canal that he ended up having to put remote cameras on when he and his wife noticed that some of their wine and food was going missing.  Seems they had an errant plumber on their hands - they dubbed him “the hot tub bandit.”

Perhaps remote property management - even if a stepped down version of what rental property management people handle - is a line of business someone could take up and do well in markets where lots of 2nd homes exist?  Especially if there is no rental pool or short term rental aspect to handle.

As an associate member of RHA, I get a chance to meet a lot of really great local professionals. One of them is Chris Benis, a local attorney who I have much regard and respect for in the Seattle area.  He is teaching an upcoming class for RHA that anyone who is a landlord should consider attending to bone up on issues that could impact them down the road.  You never know when a difficult tenant situation could arise, and the best plan is to have tools and information on your side when it happens.  Info on the upcoming class is noted below.   If you are considering getting into the landlord arena, this and many other RHA classes are items you should check out!

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A client of ours works at the local Almvigs appliance and design center in the Roosevelt area. While they have loads of gorgeous bath and kitchen items to drool over they are also carrying a product I’d like to see more available (and more affordable) in this area…. LED lighting.

These fantastic little, yet hyper-bright, lights are the up and coming favorite for lowering our energy needs in the USA when it comes to lighting a home.  Incandescent lights burn up a lot of energy and even CFL’s, while better, don’t match up to LEDs (light emitting diodes) because of energy needs, limitations on use, and concerns about mercury when being disposed (they should be recycled).  We’ve had LEDs around for years and they are being used in traditionally manufactured commercial products and auto manufacturing for use in car lights.

If you’re a homeowner, renter, or landlord who is trying to lower your electric bills this is one way to start doing that as well as providing a mercury free lighting source.

The amended Washington Domestic Partnership Law (RCW 26.60) becomes effective June 12, 2008.  If you would like more information go to http://www.secstate.wa.gov/corps/domesticpartnerships/ At the website, you will find a summary of the 2008 changes, access to the 196 page statute and answers to frequently asked questions such as “Who can register as domestic partners?” and “How do we register a domestic partnership?”

Per the Washington State website, “the amended laws generally involve dissolutions, community property, estate planning, taxes, court process, service to indigent veterans and other public assistance, conflicts of interest for public officials, and guardianships.” For more information about the differences in the 2007 - 2008 laws go to ttp://www.secstate.wa.gov/corps/domesticpartnerships/laws_and_regulations.aspx.

 If you have questions or concerns regarding these changes to the laws, please consult licensed professional advice from an attorney.

Frequently I am contacted by  clients and real estate agents asking for help with finding property management companies in Wichita, KS or the Seattle area.  I currently own 2 properties in Wichita, a 4-plex and a duplex, and right now my brother manages them for me. In Kansas you don’t have to have a real estate license to manage property as long as it is 4 units or fewer in number. In Washington, if you are managing another person’s property, that is not a family member, you must be licensed to receive compensation.

Anyhow, an agent asked me if I had a firm I could recommend in Wichita since she had read the less than flattering review of another company that I used previously. I sent her an Excel spreadsheet that I had my assistant put together for me with a list of questions that I gave her to use to pre-qualify the companies she found online.  Here is the list of questions I used; perhaps you will find them useful too.  These are by no means a comprehensive or exhaustive list of everything you should ask, but it’s a start and can lead to additional information you may want regarding the company you’re considering hiring. These questions are reasonable for both in-town and out-of-town landlords to ask a management firm.

1. What are your management fees on a monthly basis?  Are the fees charged before or after expenses are paid for the month?

2. What are your “lease up” fees for getting a new tenant?

3. Is the cost of advertising wrapped into the lease up fee or is the owner charged separately for these costs?

4. What advertising methods do you use?  Do you do a combination of print and online advertising?  Is advertising on-going or only as vacancies arise?  Do you pool fees from multiple clients to do annual on-going advertising?

5. What are your reporting methods for financial data?  Will I get an annual statement at the end of the year besides monthly statements?

6. Do you offer annual maintenance agreements or other methods to check-up on the properties under your management?

7. How is maintenance handled on an ad-hoc basis?  Do you have your own maintenance staff or do you hire out?

8. How do you handle the move-in/move-out checklist for tenants? Are digital photos taken during the move-in/move-out periods to help augment checklists to secure deposits and to handle charging for damages above normal wear and tear on a unit? 

9. Do you require the use of your own leases or do you allow other leases to be used on properties your company manages? And, if you use your own lease, will you provide a copy for me to review prior to signing up with your firm? Has your lease been reviewed by an attorney?

10. If an out of state owner wants or needs work done can your firm help to manage the work, and what is the cost to manage it?  If I have a preferred company to use for a certain type of work (eg. plumber, electrician) will you work with them as well?

11. Does your firm also sell property?  If so, will you require me to use your services to sell my property when I am ready to sell, or is that negotiable if I already have my own agent that I prefer to use? Will the decision to use another agent raise the cost of the fees you will charge me?

12. Will you provide a list of references including other out-of-state owners that I may contact?

13. If I have a large number of units or buildings to manage, is there a discount applied or available to negotiate if I turn them over to you for management?

14.  What is your coverage area for property?  Do you limit your business geographically or to certain types or sizes of property?

15. How do you handle doing background and credit checks on rental applicants?  Do you do full criminal background checks and, if so, how far do you search (eg. local, state, national).  Does your background check include registered sex offenders?  If not currently, will you consider doing it for my business?

16. Do you track local market information regarding rent levels, vacancies, etc and do you share that information with your clients?

17. How do you handle notices and evictions with tenants? Have you ever had to appear in court on tenant related issues? What was the outcome of any such court action?

18. Do you belong to any professional organizations for property management? Does your staff have on-going training or educational opportunities related to your field of expertise?

19. Are you licensed? Do you have a copy of local landlord/tenant laws in your office for reference? How do you handle or deliver necessary disclosure forms for tenants?

20. How do you handle Fair Housing requirements in your area? Do you use the same process for each applicant?  Have you ever had a Fair Housing complaint made against you or any of your clients? How do you handle section 8 tenants and the yearly reviews that are required?

These questions aren’t listed in any particular order but you may find them useful.  Even if you’re looking to manage your own property you might consider asking yourself these questions to determine how you’ll handle these things on your own.

For those readers/landlords in the Seattle and surrounding area I would suggest getting to know the Rental Housing Association of Puget Sound too.  They are a great resource for information, forms, education and more. Check them out at http://www.rha-ps.org

Tomorrow I’ll be reviewing a 4-plex in Wichita that is for sale by owner for a whopping (I’m kidding) $76,000.  I’m interested to see the condition of it since the outside is okay, but not great, but it’s near a place that I own in town.  I’m hoping a client will be interested in perhaps picking it up as an investment in Wichita. 

I’ll post more later once I get a chance to check it out and to learn more about it.  According to records my mom and I pulled the guy has only owned it a year so I’ll be curious to learn why he’s selling already.  When I spoke to him the other day he told me it’s because he has 3 small kids, a wife, a full time job and he’s coaching his kid’s soccer team.  Maybe that’s it, maybe he’s in a pickle with financing and can’t handle the payments now. 

One other interesting element is that his property is zoned commercial and is on the edge of the revitalization area of downtown Wichita.  I’m interested in helping investors sweep up property in this area to benefit from the long term change in the area and to work on continually improving the quality of the tenant base in the area and perhaps looking at an even longer term idea of turning these 4-plexes into rowhouse condos.

In the meantime, anyone interested?  Give me a call or email.

If you’re considering buying a condo - I recommend this book.  If you already live in a condo and have discovered it has more going on (arguments, lawsuits, assessments, hassle) than you expected when you bought it - I recommend this book.  If you are considering joining the board of a condo association you belong to and want to know what to expect - I recommend this book.  If you are already on a board and a big issue has just come up and you have to deal with it - I recommend this book.

So, have you figured it out yet?  I recommend this book.  And, I’m not being paid to recommend it, although for full disclosure I will say the company that published it (Sphinx Publishing/Sourcebooks) contacted me several weeks ago and sent me a free copy of Condo Owners Answer Book to read, with a request that I write a review.  I get asked to do stuff all the time, and more commonly, I am asked to BUY things all the time - so to have a company ask me to read something and comment was slightly new and I have to say that reading is one of my major pasttimes so this was an easy request for me.   

For those that are considering a purchase of this book, the relatively inexpensive amount of money that it would take to buy, considering all of the issues that you can be confronted with as a condo owner, makes it worth every penny.

I’ve been selling real estate for 5 years and I’ve owned several properties for about 12 years.  Given that I am in the midst of property, property contracts, and clients every day I was pleasantly surprised by how much I learned in reading this book.  That’s right, the attorney who wrote it is one sharp cookie! :)  Her name is Beth A. Grimm and she’s worked in condo law for quite some time.  She’s got a fun website called: www.CaliforniaCondoGuru.com that’s worth checking out, particularly if you’re in California, where Ms. Grimm holds her license to practice law.

Some of the elements that she put into the book (some I knew and some are new to me) are things such as being sure to ask for minutes from a board prior to purchase and to have that as part of your document review.  Many telling items are covered in board meeting minutes and you’ll learn a lot about the property you’re about to move into by reading them.  Such as, is there an ongoing dispute among owners or the board?  Is there a pending lawsuit?  Are there safety issues in the building?  Is a large assessment being considered?  The list can go on and on.  The importance of getting these during a purchase review period is large because these aren’t public documents and they must be requested by the owner of the unit - buyers aren’t allowed to ask the board for non-public documents but members of the association (the seller) may have copies of them, actually, they have a right to them.

A website that she points out, that I wasn’t familiar with before, is www.condocerts.com.  Some associations will post their meeting minutes here - but it’s not a requirement.

I like also that Ms. Grimm takes a very no nonsense, practical approach and she doesn’t gloss over the pitfalls of ownership in condos. There is strong coverage of each topic and all are explained in simple terms.  Additional items I liked were the appendix sections at the end of the book.  In fact, I wish Appendix B would have come in earlier since there are likely people who miss it when reading the book and getting to the end think that these are just boring references sections or part of the Glossary that precedes them.  Appendix B lists national and international sites that are quite useful resources for condo owners.  Groups such as Community Associations Network, Community Associations Institute (CAI), National Association of Housing Cooperatives (NAHC), and even The Canadian Condominium Institute (CCI).  There are others listed as well but I’ll let you buy her book to get them.  If you like what you read from this book there are other books that she has authored  or recommended as well that you might want to check out.

I want to point out too that for those of you out there that think any ole’ real estate attorney will suffice if you’re in need of help in a condo association - you’re wrong.  Condominium laws are an animal almost unto themselves so if you’ve got an issue you should go to an attorney that knows your local state condo laws inside and out.  Most general real estate attorneys do not know the intricacies of condo law and statutes.  If you’ve ever read a condo CC&R, bylaws, and other documents as well as condo law legislation you’ll understand why it’s so complicated and a section of real estate all on its own.  A recent example came up with a client of mine who owns a unit as an investor but he sits as President on the small HOA board.  A unit in the building is potentially under foreclosure because of a loan default and the unit owner is also in arrears of his HOA dues.  My client was asking me about how to place a lien on the unit in the event the unit is sold - which may be imminent - and I directed him to a condo attorney as well as advising him to read his regulating documents for his association.  He was hoping that the process would be simple, much like when he puts liens on his client’s properties (he’s a contractor) but my concern was that he wouldn’t complete the process correctly and that it would be key for him to get proper advice on how to move forward.

While I couldn’t find that information immediately on the site my business partner seems to think that it is.  I was just made aware of www.Zilpy.com today by a title rep (Jeff Ross) I work with frequently from Ticor Title.  Below is the message he sent to me….

Need accurate rental information?  Then check out the new website www.zilpy.com Rebecca. 

 It posts residential rents for very specific areas.  I am
not sure exactly from where the site gleans its information – possibly from rental screening centers or craigslist.com – but my experience is that it is quite accurate. 

          Searches can be conducted down to individual residences.  The 50 most relevant properties pull up on a map.  Bedrooms, baths, rents and brief descriptions are disclosed for each address. 

          The site is helpful for landlords, investors, would be landlords and renters alike.  It is also very easy to use.  I thought you might find useful.  As always, I have your best interests in mind.  Thanks for the business and best of luck. 

Sincerely, 

Jeff Ross/Ticor Title

At TEAM REBA we do a lot of research and one tool we’ve used to track the trends of rents in the local area is to read what Dupre + Scott puts out in their reports.  These folks have a long and well respected history of tracking rental data for the Puget Sound region.  I’ll be interested to see how they react to this new online venture.

Today I’m attending a forum on providing middle income housing opportunities in the City of Seattle and surrounding areas.  It’s called the Workforce Housing Action Workshop.  The morning is mostly consisting of listening to speakers and a panel discussion and this afternoon will be set up to do group work and to provide feedback for moving forward.

From what I’ve seen so far on the development side there are questions about the amount of time needed to go through design review and permitting processes as well as parking costs and requirements.  One of the financial issues that is coming up is whether or not subsidizing of middle income housing is appropriate or available.  Politically, I can’t see this being very popular.  Thankfully, as the day progressed it was notable to many that this option was steered clear of by pretty much everyone (which was roughly 150 people) and consensus was that this shouldn’t be the answer.

Environmental concerns flowed throughout the conversation with people from Cascade Land Conservancy being present but that was of interest even without them being here.  Business energy tax credits are also thrown in as part of the possible methods of incenting developers to make good buildings and projects but overall there is a belief that for the Seattle and King County public we must make this part of the overall package just to make anything that is put together amenable and acceptable to the public.  While many of the participants were in their 40’s, 50’s, and 60’s there was much discussion about how we must get the 20’s and 30’s involved in helping get higher density neighborhoods and planned acceptable into neighborhoods and to prevent or reduce NIMBY-ism as it normally applies to these topics.

Overall, the consensus was that permitting process need to be streamlined; zoning and building codes need to be revisited and perhaps overhauled since Seattle is more difficult than any other local municipality; and that it’s going to be important that businesses get involved in considering how they might help with making middle income housing affordable for their workers, which led into the additional element of today’s discussions of possible Employer Assisted Housing.  One area of interest as a model is Austin, TX where they do “SMART Growth“.

As the notes from today’s meeting come out I’ll do an update to provide a window to you, the public, into what considerations are being made.  We need a healthy real estate market in all housing levels for the Puget Sound area to remain vibrant and liveable and to continue a big part of our quality of life around here.  This will mean that we need your support too to get the politicians to agree with these plans and to implement them.  Let’s all get educated together…