East End/EaDo Real Estate

[TJones]

As a long-time resident of Eastwood and one who has restored many homes in the area, I take great exception to the catty comments regarding the house on the corner of Bell and Dumble (no, it is not one of my restorations). Anyone who comes into this neighborhood and sinks the money that was put into that house--close to $100,000--should be congratulated, not given petty criticisms about the stupid bathroom sinks. If you think you can do better--and make a profit--come, buy a house and see how difficult it really is. Until then--keep your opinions to yourself. Most of you on this site are armchair quarterbacks who've never done anything to preserve a neighborhood. So my suggestion is that you put your money where you mouth is. AND thank the people who are doing their best to preserve Eastwood and the surrounding neighborhoods rather than scraping the lots and building the junk we see in Montrose and The Heights.

........and that's how the turf war between Eastwood and The Heights started in 2007.

[Houston1stWordOnTheMoon]

The person that pays that ridiculous price for that mess doesnt belong on this side of a nut house!!!!

[Scharpe St Guy]

Well...let's run the numbers, shall we?

This property was bought on 10/16/2006 for $40-50k.

$50k total to get into it.

Everybody on the thread seems to be tossing out $100k as costs to renovate, so we'll go with that.

Total of $150k

Holding costs...interest only payments from a hard money lender on $150k @ 16% are $1333 times 4 payments comes to $5332, tack on an extra $1700 for other stuff such as insurance utilities, etc

Now we're up to $157k

Closing costs...we'll say 3% plus an extra thousand...they won't take a 6% haircut from the fluffy bunnys because the owner appears to be an agent as well...at least so said the Craigslist posting for this property

That brings us up to $163k

Now we sell it...let's put a big discount from the asking price in there...say it sells for $205k

So now we're looking at a difference of $42k

Lop off income taxes...we'll use 30%

That leaves $29.4k...you're right...that's REAL scary. I don't know how anybody could survive on $6k a month after taxes.

Ok your math is pretty correct but not quite there:

Closing costs are figured from the contracted price, so if the contracted price is $205,000 it would be roughly 4% (3% for the buyers agent) and 1% for Title Insurance. So total estimated closing costs of $8,200. This would bring your total up to $165,200.

Estimated Profit before taxes of $39,800, after taxes assuming 30% tax rate: $27,860 IF the owner can sell it before the next loan payment, utility payments and IF they sell it for $205,000 or more. What happens if this home doesn't sell in the next week or two or two months or three months or six months??? What occurs to the projected profit of $27,860??? It goes down approx $1,500 a month using the numbers above which don't take into account taxes or for that matter time spent by the owners working on the property, showing the property, maintaining the property, manning open houses at the property, preparing flyers (paper/email) on the property, etc.... Looking at the closing date they have owned the property for 5 months, so monthly after tax income if sold today equals $5,572. If another month passes then the monthly profit drops to approx $4,500, if the property is still there's after 7 months then approx $3,500 and yes it does get scary because prices don't go up here in Houston then go down in order to get a property sold especially one with the hurdles this property has of 2 bedrooms/2 baths no garage located right on Dumble across from a warehouse and a charter school.

Good luck to the owners/flippers, I truly hope you can clear a good profit on this home and that you will undertake yet another home in the neighborhood.

Regards,

Scharpe St Guy

[Ralo]

Well...let's run the numbers, shall we?

This property was bought on 10/16/2006 for $40-50k.

$50k total to get into it.

Everybody on the thread seems to be tossing out $100k as costs to renovate, so we'll go with that.

Total of $150k

Holding costs...interest only payments from a hard money lender on $150k @ 16% are $1333 times 4 payments comes to $5332, tack on an extra $1700 for other stuff such as insurance utilities, etc

Now we're up to $157k

Closing costs...we'll say 3% plus an extra thousand...they won't take a 6% haircut from the fluffy bunnys because the owner appears to be an agent as well...at least so said the Craigslist posting for this property

That brings us up to $163k

Now we sell it...let's put a big discount from the asking price in there...say it sells for $205k

So now we're looking at a difference of $42k

Lop off income taxes...we'll use 30%

That leaves $29.4k...you're right...that's REAL scary. I don't know how anybody could survive on $6k a month after taxes.

Asking price is just that and usually set high to allow for negotiation. Further, if this house sells for $205,000 that comes out to $170/sq. ft which is unlikely in this location and is unheard of even in the gem of the East End - Idylwoood. The average there is usually around $120/sq. ft. In fact, if this house sold at the "Idylwood" avg. rate, which is unlikely, it would sell for $144,000 which would still mean selling at a loss. So, really, at best this should be considered a labor of love because I doubt there will be much profit, if at all.

[Ralo]

As a long-time resident of Eastwood and one who has restored many homes in the area, I take great exception to the catty comments regarding the house on the corner of Bell and Dumble (no, it is not one of my restorations). Anyone who comes into this neighborhood and sinks the money that was put into that house--close to $100,000--should be congratulated, not given petty criticisms about the stupid bathroom sinks. If you think you can do better--and make a profit--come, buy a house and see how difficult it really is. Until then--keep your opinions to yourself. Most of you on this site are armchair quarterbacks who've never done anything to preserve a neighborhood. So my suggestion is that you put your money where you mouth is. AND thank the people who are doing their best to preserve Eastwood and the surrounding neighborhoods rather than scraping the lots and building the junk we see in Montrose and The Heights.

Catty, petty criticisms, armchair quarterbacks, etc. . . all very true comments. I have noticed that the hobby here is not to share info and help each other but to take someone's comments, however irrelevant they may be, and tear them apart bit by bit to show one's great intelligence. Apparently, most folks (I should probably include myself) here don't have much to do.

I congratulate anyone who has the balls to invest in the East End because it is still a hard sell and obviously difficult to turn a profit.

[Dan the Man]

Went to the open house today and got an up-close look. A lot of work was done on this place, and it is now the best-looking house on the street, and is definitely making a positive contribution to the neighborhood. I am glad that someone had the vision and was willing to take the financial risk to save this house in this area. I stand by my earlier statement this renovation is good, in that it will attract a higher-end homebuyer to Eastwood, which will hopefully attract others who have the resources to save these homes.

I'll be curious to see what it sells for.

[TheNiche]

Went to the open house today and got an up-close look. A lot of work was done on this place, and it is now the best-looking house on the street, and is definitely making a positive contribution to the neighborhood. I am glad that someone had the vision and was willing to take the financial risk to save this house in this area. I stand by my earlier statement this renovation is good, in that it will attract a higher-end homebuyer to Eastwood, which will hopefully attract others who have the resources to save these homes.

I'll be curious to see what it sells for.

I was driving by and stopped in to check it out. They lowered the asking price to $199k.

It doesn't have a garage, one of the bedrooms is really more of a den than a bedroom, and too many of the doors are glass. It is nice and all, but when there is a bathroom with glass doors opening up to a bedroom with glass doors and has many windows in the bedroom facing Dumble, any sense of privacy is just shot all to hell.

[musicman]

I was driving by and stopped in to check it out. They lowered the asking price to $199k.

It doesn't have a garage, one of the bedrooms is really more of a den than a bedroom, and too many of the doors are glass. It is nice and all, but when there is a bathroom with glass doors opening up to a bedroom with glass doors and has many windows in the bedroom facing Dumble, any sense of privacy is just shot all to hell.

i saw a modern house recently where the bathroom doors were glass but they had the glass frosted. looked great in the modern setting but in a house such as this i'm sure the vintage look would be tarnished. having many windows is period IMO. yeah the dumble street might result in a bad view but some shades that raise up from the bottom would hide anything visually annoying.

[TheNiche]

i saw a modern house recently where the bathroom doors were glass but they had the glass frosted. looked great in the modern setting but in a house such as this i'm sure the vintage look would be tarnished. having many windows is period IMO. yeah the dumble street might result in a bad view but some shades that raise up from the bottom would hide anything visually annoying.

What I'm really getting at is that you can see clear from the hallway into the bedroom's bathroom. That is bad. ...and we're not talking about frosted glass.

[Scharpe St Guy]

jm1fd,

Are you picking up any risk yet in purchasing a property, fixing, and flipping? Price reduced to $199,900 so now we are $5,100 under your estimated sales price. Where has the phantom $6,000/month gone? This type of property and activity the owner undertook is RISKY and SCARY.

My hat is still off to the owners/flippers for taking a blatant eye sore and making a wonderful home out of the pieces.

Regards,

Scharpe St Guy

That leaves $29.4k...you're right...that's REAL scary. I don't know how anybody could survive on $6k a month after taxes.

[musicman]

What I'm really getting at is that you can see clear from the hallway into the bedroom's bathroom. That is bad. ...and we're not talking about frosted glass.

oh no, i agree the glass doors would be an issue for most.

[jm1fd]

i saw a modern house recently where the bathroom doors were glass but they had the glass frosted. looked great in the modern setting but in a house such as this i'm sure the vintage look would be tarnished. having many windows is period IMO.

I think with the right patterns in the etching...say some period looking craftsman style lines/squares/whatever that it could look wonderfully period.

Are you picking up any risk yet in purchasing a property, fixing, and flipping? Price reduced to $199,900 so now we are $5,100 under your estimated sales price. Where has the phantom $6,000/month gone? This type of property and activity the owner undertook is RISKY and SCARY.

The $6k a month has decreased by $1k a month or so...which is still good money....espescially if you've got a couple projects going on.

They wouldn't have taken on the risk if they didn't think the reward ($$$$) justified it....unless of course they're just flat dumb.

[4thWardBoy]

i don't see the numbers as too good for the rehabber in this case, but at the end of the day the rebabbing of this house is a good thing for the neighborhood. you have to give credit to anyone willing to take that project on.

[Mr. Chenevert]

Well...let's run the numbers, shall we?

This property was bought on 10/16/2006 for $40-50k.

$50k total to get into it.

Everybody on the thread seems to be tossing out $100k as costs to renovate, so we'll go with that.

Total of $150k

Holding costs...interest only payments from a hard money lender on $150k @ 16% are $1333 times 4 payments comes to $5332, tack on an extra $1700 for other stuff such as insurance utilities, etc

Now we're up to $157k

Closing costs...we'll say 3% plus an extra thousand...they won't take a 6% haircut from the fluffy bunnys because the owner appears to be an agent as well...at least so said the Craigslist posting for this property

That brings us up to $163k

Now we sell it...let's put a big discount from the asking price in there...say it sells for $205k

So now we're looking at a difference of $42k

Lop off income taxes...we'll use 30%

That leaves $29.4k...you're right...that's REAL scary. I don't know how anybody could survive on $6k a month after taxes.

We have no idea how much was spent on renovations. The house was in terrible shape. Hidden suprises were probably found everyday. Im sure there was vandalism and theft during the construction period as well. All the new construction in Midtown requires overnight security guards or the copper is stripped nightly.

29k profit doesnt seem enough considering the huge risk one has to take on this project. I wouldnt have done it for 29k, thats for sure.

[Scharpe St Guy]

Amen,

However jm1fd instead of applauding the risk the renovator took instead critizes the hypothetical profit they "May" make. All this while not taking into account the risk, the property, the area, and the limitations this home has in regards to it being evaluated as a future home for those buyers looking.

Someone else said armchair quarterback/renovator previously but honestly jm1fd you are very naive. If it weren't for those people taking risks and climbing out onto a tree limb all of our lives would be very significantly different in a bad way. I would encourage you yourself to find a property to purchase and resell after appropriate renovation and then report back how it went and how your budget matched your actual costs incurred and any profit generated at closing.

I speak from a small box having done two prior flips and working on my third and I learn more and more each time with each property.

All the best,

Scharpe St Guy

We have no idea how much was spent on renovations. The house was in terrible shape. Hidden suprises were probably found everyday. Im sure there was vandalism and theft during the construction period as well. All the new construction in Midtown requires overnight security guards or the copper is stripped nightly.

29k profit doesnt seem enough considering the huge risk one has to take on this project. I wouldnt have done it for 29k, thats for sure.

[Scharpe St Guy]

Hey Everyone,

I have an A*S of a neighbor who just met a crew of guys here who dropped off a load of material for a weekend addition. In the East End it is not uncommon for especially Hispanic's to all gather enmass and erect a whole new garage or room from Friday night to Sunday night. Most of the time I'm not all that concerned however this neighbor besides being an A*S does stuff half way which makes it not only look ugly but also drag down property values and the area.

I called City of Houston's Deed Restriction Hotline at 713.437.6769 however I'm kind of skeptical that either the message will get heard, get heard and acted upon, or most likely once heard and maybe even inspected the job will be done and the homeowner will profess ignorance and say it was always there.

Any better numbers or suggestions? Would you like to help me by also reporting this home?

Thanks you all,

Scharpe St Guy

[Dan the Man]

Contacting Code Enforement will probably be more helpful, since they are the department that actually reviews projects, issues permits, and performs building inspections.

http://www.publicworks.cityofhouston.gov/p...ement/index.htm

I think there are also laws that regluate the hours in which construction activity can take place. If they work after hours, you could call the cops and turn them in for a noise violation.

Of course, you can also call an investigative reporter. Think of the all the juicy story angles - public safety is compromised; there is a hint of tax fraud, as the improvement on the property is increasing in square footage unbeknownst to the appraisal district; aesthetics and property values are compromised; some of the workers may be illegal immigrants; the list goes on and on!

Good luck. Hope you can shut this jerk down.

[Guest danax]

Any better numbers or suggestions? Would you like to help me by also reporting this home?

Thanks you all,

Scharpe St Guy

Call 713-535-7510 (3300 Main St.) . Call before 9 am and get an inspector. I don't know how he'll react to just a pile of materials but they know well how this cat and mouse game works and might be able to do something, although the idea of weekend inspectors still is only an idea, after a few years now.

My next door neighbor did this a few weeks back. I got home around 6 on Friday, there were the 2 guys working feverishly building what turned out to be an ugly, cheap garage apt in.........the front driveway! I hesitated to call on the guy as we're friendly but someone else did and an HPD showed up on Saturday (not their normal function) and these contractors showed him a piece of paper and he drove off. I checked online and he had no permit so it was obviously counterfeit. They laughed afterwards as they had made a mockery of the system. >

So there it sits; no siding, pressboard sheathing exposed to the elements. The pit in his driveway where the water used to collect is now under the structure......nice. The one good thing is that his music is now blocked by the eyesore.

[musicman]

i would call earlier. the secretaries used to say the inspectors are only avail from 7-7:30am. early is good in general otherwise they are in the street inspecting.

[Scharpe St Guy]

Dan,

Do you know any investigative reporters to call? It does have many angles and new tax appraisals are being sent right now so the story is hot. I just emailed the main city inspector and will call in the morning.

Thanks you all,

Scharpe St Guy

[flipper]

i would call earlier. the secretaries used to say the inspectors are only avail from 7-7:30am. early is good in general otherwise they are in the street inspecting.

Yep, you gotta call around 7. Ask to speak to the structural inspector for the zone that services your area.

I'm all for turning in jokers working without permits!

flipper

[Scharpe St Guy]

Received a reply from my email last night at 8am this morning:

"Thanks for the info. We will have it checked out."

This came from a pretty senior person at Code Enforcement.

I really want the guy to come out and take a look to see how the lay of the land sits right now then either come back out this weekend or Monday and see if any changes were made from Friday evening to Sunday Night. If changes were made then write them up and make them tear it down.

Anyhow thanks for the info and listening.

Scharpe St Guy

ps.... Flipper please update both of your blogs!!!! Thanks!!

[flipper]

ps.... Flipper please update both of your blogs!!!! Thanks!!

[Dan the Man]

I have heard that Wayne Dolcrefino is very responsive, but I don't know whether he is still around (I don't watch TV). If you see any activity this weekend, I suggest taking a lot of pictures. Also, notify other neighbors on your street. Hopefully there will be some that will take your side...

[flipper]

any update?

flipper

[Scharpe St Guy]

any update?

flipper

Flipper/All,

Well the neighbor has covered up a lot of the material in the back with tarps and he was ranting and raving along the far fence line which he shares with his inlaws who live next door to them when I got home that Friday night. They are doing quite a bit inside the home and had a painting crew there till approx 8pm last night. No actual additions yet however I'm sure some walls have been moved and rebuilt inside the home. Problem is they are a family of four with two rooms and one bath. Now that the boy and girl are getting older I'm sure they need the room.

I wish they would just sell and move personally but who knows. I am grateful though that the city went out and looked it over so at this point they would need to pull permits to add on to the outside.

Anyhow best to everyone,

Scharpe St Guy

[Dan the Man]

Thanks for the update. If they moved any interior walls, I sure hope they knew what they were doing (sounds like they don't, from your general description). I once salvaged an old 3-bedroom house in West University, where someone had removed a load-bearing wall between 2 bedrooms to make a "master suite" I swear, the ceiling in the middle of the room was sagging at least 6 inches! I guess they wanted to make it easier for the demo crew!

[Scharpe St Guy]

Dan,

I'm thinking that an additional wall will be going up to create two small bedrooms and one normal bedroom. Just a guess though as this neighbor and I don't talk anymore unless he is having his quarterly loud music tantrum and I have to go out and yell at him.

Oh well what will be will be!

Scharpe St Guy

[Dan the Man]

Looks like the house has an offer on it...

[Vertigo58]

There is now a high wooden fence blocking the view from Dumble. Privacy is an issue for some.