bpe3

For the record, my primary business is brokering commercial real estate loans. I've closed over $2 billion in CMBS and life company loans in the last 5 years alone. At least 75% of those have been multi-family. Earlier in my career I worked for a Fannie Mae DUS shop doing nothing but underwriting multi-family loans. I think I know a thing or two about underwriting. I wasn't underwriting the deal. That's why it called it some "quick math". It nothing more than a back of the envelope estimate of what this deal might be throwing off. If anyone really wants to know how a deal like this really underwrites, I'd be happy explain it. Did I miss something? I don't recall getting an economics lesson from you at all. bpe3

Texas real estate brokers are required to deal with everyone (buyer and seller) in a FAIR and HONEST manner. At the same time, a selling broker has a fiduciary duty to his client to act in seller's best interest. If mutilple offers exist, it is well within a selling brokers rights to leverage them for their clients benefit. In fact, not doing so may be a violation of their fiduciary duty. On the other hand, manufacturing bogus offers in an effort to extract a higher price from a buyer clearly is dishonest and could result in loss of the broker's license. bpe3

Well... It looks like the "renovation" is "complete". The fence has come down and now there are For Lease signs in each and every window. I assume that means they don't have a single tenant lined up. There's nothing like undertaking a muti-year renovation of a consistently 100% occupied property only to end up with a property that looks nearly identical, yet has 0% occupancy. Now that they are "done", they get to enjoy a few years of rail construction that will forever ruin Richmond for vehicle (read: customer) traffic. Somebody really dropped the ball on this deal. bpe3

Here's some quick math: 900 units @ $90,000/unit = $81,000,000 value X 5.5% cap rate = $4,455,000 NOI/year = $371,250/month. Assuming they tore down 2/3rds of the units, the early demolition is costing them $245,045/month in foregone cash flow. It's not the kind of money that will make or break this project. At the same time, it's enough to get someone's attention. No smart delevoper would just leave this much sitting on the table. Clearly they thought they'd be going vertical by now. bpe3

Standard Operating Procedure is to keep the tenants as long as you can by converting leases to month-to-month as they roll. When you're ready build, you give them 30-days notice to vacate and the bulldozers come in a week later. The Regent Square developers told the tenants to get out because they thought they were ready to build. They weren't. They had to go back to the drawing board because their previous plan didn't work. They left a lot of money on the table with their hasty demolition. I'm curious to see how their scaled down project works out. Only time will tell. bpe3

It's actually 30 feet short of a mile. Article from UK Daily Mail

I don't think the existence of a 2nd lien would cause a single foreclosure event to count twice. If a first lien is foreclosed, the second lien is wiped out. Two lenders can't foreclose at the same time. Only the senior lender can foreclose. I think the disclaimer actually means that same unit could have been foreclosed multiple times over the course of a year. As in: Bought by Buyer A and financed by lender A in 2005, foreclosed by lender A in early 2007. Sold in mid 2007 to Buyer B with a loan from Lender B. Foreclosed by Lender B in late 2007. What the Chronicle did was go through the foreclosure files and count up the totals. They were too lazy to go back and compare all the address to check for duplicates. bpe3

Yes. Tremont built Hyde Park Crecent. And yes, Hyde Park Crecent was also plagued with complaints about shoddy construction, particularly with regard to water leaks. Come on Tremont. How hard is to build a building that doesn't leak like a sieve months after completion? The Lemon Lady who protested daily in front of Tremont Tower was a Hyde Park Crecent homeowner. bpe3

Yes. That's exactly what I'm looking for. Now I just need to figure out what kind of railing system I need so my guests don't fall out the window after they've had a few drinks. bpe3

You need to make one more change. The thread is now called "Highland Tower Not High Street", but the thread description still says, "Former car dealership on Westheimer" which is not where Highland Tower is going to be built. Highland Tower will be north of the former car dealership at the NEC of Bancroft at Bettis. bpe3

YES!!!!!!!!!! Now we are getting somewhere. Those doors look awesome, Scharpe Guy. They all seem to all be flat though, which would require that I remove the existing stucco facade and install them flush with the brick facade. While that's certainly an option, it would really nice to find a similar system that can be intalled within the curve of the existing curved stucco facade. Then I could really open things up without substantially altering the look of the exterior. That would cetainly make my neighbors happy. bpe3

Where did I say anything like that? I think you're in the wrong thread. This thread is about the townhouse trend in Houston. There's another thread about people making $80k a year and buying $300k homes. If you read it, you'll see that I clearly said you need to do one of two things to be able to afford a $300k home: 1. make a lot more than $80k 2. put down a large down payment. I agree with you 100% that leveraging one's self to the hilt to buy a home is a really bad idea. When I bought my home, I bought FAR less than I could afford. I put 20% down and paid off the rest of the loan over 12 months. The fact of the matter is that Houston home prices are a SCREAMING bargin when compared to many other large American cities. I realize that certain neighborhoods are still out of reach of many homebuyers. If you can't afford the house of your dreams in Houston, you should take solace in the fact that if you lived in many other cities your dream would be even farther away from reality. bpe3

That second link is right on point, Judah. Here's a quote from one of the other links above about townhouse development in Seattle: You don't have to be an economist to figure out what would happen to real estate prices in Houston if it took FIVE YEARS to get approval to build townhouses, apartments, etc. Prices would be through the roof. Demand is demand. Houston has created 170,000 new jobs in the last two years alone. These people have to live somewhere. If you you don't add the supply, prices go up. In my option, one of the best things Houston (and the suburbs) has managed to do is allow the supply keep up with the demand. Houston's moderate real estate prices have become a magnet for talented people. I know of several college educated couples who decided to move to Houston specifically for the affordable real estate. I'm good friends with one couple that moved here from Chicago several years ago. Both were college educated people with decent careers. They wanted to get married, have kids, etc., but they looked around Chicago and didn't see how they'd ever be able to afford the lifestyle they desired. They didn't want to raise their family in a 1,000 SF condo and the didn't want to move out to BFE to buy a home. They both started looking for jobs in Houston and within six months they were here and gainfully employed. A year later they bought a home just west of the Galleria. A year after that they started a family. They looked objectively at options all across the country and chose Houston as the best combination of big city amenities and housing affordability. bpe3

Wow. Just wow. The Chronicle is reporting that there were 74 foreclosures out of 76 units were foreclosed in 2007 alone. Perhaps HCAD hasn't kept up with all the ownership changes. That's a mind blowing figure. People really are voting with their feet. Chronicle forclosure data: http://www.chron.com/business/2007_foreclosures.html bpe3

The song would be about 100x better if the singer just referred to Montrose as Montrose instead of the 'trose. I've lived in and around Montrose for a very long time and I've never heard anyone refer to it as the 'trose. bpe3

I guess you learn something new everyday. Unitl now, I thought the only good thing to come out of Bellaire HS was Peter Gardere. I think RedScare is pretty much thinking of what I was trying to describe in the original post. I imagine the new second floor doors and or windows to be flush with the brick facade and existing framing. The current bay window isn't very deep though. To make it usable at all it will still need to extended and cantilevered out from the existing facade. I imagine the third floor stucco facade to remain unchanged. The second floor however will be completely scraped. The balcony will extend outward from a flat facade. The sides of the balcony will be perpendicular to the facade. The outter edge of the balcony, the part facing the street, will have a curve to mimick the third floor curved stucco facade. bpe3

I guess Sowanome's post pretty much disproves my point. He or she seems to have bought a $318k house with a $90k combined salary. They put $73k down though, which makes a difference. I guess it's different for married people. Most single people I know wouldn't want that much of their cash flow committed to mortgage payments. We'd all rather have more cash available for dining out, entertainment, travel, etc. I guess HAIF really is a cross section of society. As soon as people start asking about how people seem to be living a more affluent lifestyle than the rest, others start chiming in about leased BMW's, unfunded IRA's, maxed out credit cards, etc. How hard is it to come to grips with the fact that some people just make a lot more money than you do? Forget the $300k townhouses, there are single family homes all over the inner loop that are selling like hot cakes for $800k to $1,500,000 or more. Cetainly some of these folks may be stretched to their financial limit, but many others are not. bpe3

It's a great world we live in. There's something for everybody. bpe3

BryanS is on the right track. The newspaper articles all seem to frame this as a home buyer vs. the developer battle. It's too late for that now. The time to blame the developer is long gone. For better or for worse, the condo owners are on their own at this point. Clearly the building has problems. As far as I know, no one has actually figured out what the exact problems are, let alone come up with a strategy to fix them. The developer started off pretending the problems didn't exist. Then he tried to blame the victims. Then he tried to band-aid the problem. None of those stratagies worked. The building still has problems and they aren't going away on their own. The first thing the HOA needs to do is hire a structural engineer to go over every square inch of that building with a fine tooth comb and figure out where the problems are. Only then, will the HOA be able to come up with a plan to fix the problems. Of course then comes the fun part, paying for and executing the repairs. It's not like the condo owners are in the construction business. Who within the HOA has the expertise to take on this project? Who do the other owners trust with their money? How many of the owners actually have the money to contribute? Even if an owner can afford it, does it make any sense to throw more money at the problem if you already have your unit encumbered with a mortgage? Many of the remaining owners are likely underwater on their mortgages. Why whould they throw good money after bad? Half the building has already been foreclosed by lenders. The owners are voting with their feet. HOA's are simply not set up to handle issues like these. They are there so busy body neighbors can fight about the color of paint in the hallway, the style of the sofa in the lobby and who is or isn't following the pool rules. There are 27 units listed for sale on HAR. Five of them are under contract with asking prices around $100/SF. There's value here somewhere. The only real way to determine that value though, is via a detailed inspection of the entire building. Maybe these new buyers have more infomation than the rest of us. If not, they are merely speculating. Good luck to them. They'll need it. I wouldn't pay $100/SF with this kind of uncertainty. bpe3

The Seattle projects referenced are nice, but they sure aren't cheap. "Prices range from $695,000 for 1,575 square feet to $925,000 for 2,200 square feet." Four of the units are priced at $325,000 to $350,000. That undercuts the typical two- or three-bedroom Craftsman townhouse, but these are one-bedroom lofts of just 776 square feet. There's an active thread on this same board where Houstonians are scratching their heads about how people can afford to pay $300k to live inside the Loop. Most Houstonians have no idea how good we have it. bpe3

Maybe casements aren't the answer for an opening that large, although I like the idea. Maybe there's another kind of window that can really be opened super wide. In my younger years at Lamar High School (class of '87), the main building had some cool windows. With the turn of one crank, a bank of four vertical stacked windows would swing open. RedScare - I like the door idea, but I don't want to have four doors swinging open into my living room on a beautiful day. There wouldn't be any room to walk around. bpe3

Just make more money people. That's the answer. The whole premise of this thread is bogus. You'd have to look long and hard to find a person making $80k/year in a $300k home unless they did what it takest to come up with a very large downpayment. The fact of the matter is that most people in $300k homes make a lot more than $80k/year. End of story. The OP makes $80k+. The PITI on a $300k loan is about $3k/month. At $80k/year, he's taking home about $4,750/month before 401k and IRA distrubutions. That ain't going to cut it. You have to make more than that. It's that simple. The only other option is a very large downpayment. He says he doesn't want to put down $50k. More bad news. He'll probably need to put down twice that. Many an inner loop homeowner has used a large downpayment to get inside the loop. Over the last 10 years, it's been a VERY wise investment. bpe3

Most of my 30-40 year old friends live inside the loop. They all fit into one of the following catagories: 1. they rent an affordable apartment, alone; 2. they rent a house, with roommates; 3. they are married with two incomes; 4. they make $150k to $250k a year; 5. they scripted and saved and invested well and put more than $100k down to make their mortgage affordable; 6. they work on commission and had a few REALLY good years allowing a LARGE down payment; 7. they took in roommates to cover the cost of the mortgage; or 8. they bought an inexpensive condo ($100k to 150K); bpe3

Thanks, cgallagher. That is extremely helpful information. Maybe this project is feasible after all. HAIF is awesome. Another option has crossed now crossed my mind. Maybe there's a window solution that can worked into the exiting facade. Maybe the balcony itself isn't necessary (it would be nice though). Maybe I could put four large casement windows in the existing window openings. That way, with four large windows (no screens) opened all the way up, I can get that outdoor feeling while still being inside. Do they make casement windows that large? Is there another window system that would be better? I'd love to have one huge window system (like the kind they have a RA Sushi) that could slide all the way out of the way on a nice day leaving one large opening. I always like the townhouses with garage-type window-doors that roll up and provide a huge opening. The garage-type look wouldn't work here though. bpe3

There are no deed restrictions to prevent this. The agreement with my attached neighbors is very thin. About the only issue it covers is reponsibilty for maintenance/repair expeneses associated with our common walls. It doesn't address several key issues I'd like it to address, such as: 1. a requirement to carry insurance; and 2. mandatory repairs/rebuilding after a causualty loss. If my place burns down, it would be within my rights to pocket the insurance proceeds and leave a gaping hole between the other two units. I bought the place about three years ago. I've talked to my neighbors about beefing up the agreement, but we haven't done anything yet. bpe3