Investment Property on Eaton Street

Looking for an investment property with upside in Old Town that has a motivated seller? Look no further. I have a suggestion for you.

1110 Eaton Street pictured to the right is a 5 unit apartment building (4 licensed apartments plus an owner's unit) with off-street parking. Four of the apartments were recently updated and the fifth is in fair condition (can be rented as is without hanging your head down). Only two of the units are rented. An on site manager occupies a third and the owner keeps one for himself when he is in town. The two that are rented are rented below market. It's a long story...

CLICK HERE to see more pics of the property and obtain more details about the building.

The owner wants to sell. Bring me an offer. 1-305-766-2642.

Pre-Sale Home Inspection--Key West

During the time I have been writing this blog I have mentioned the variety of homes (style, age, value) on any one street or in any particular neighborhood. Up north in America there are blocks after blocks of very similar buildings or homes, mostly built contemporaneously with each other and in a style and scale as to not be dissimilar. The suburbs that developed after World War II are filled with "cookie cutter" homes. So the buyer can easily shop for the best value by comparing similar homes in similar areas.

But Key West is different. On any one block you can find a cigar maker's cottage of 1000 square feet next door to a two story 2200 square foot grand conch house (Greek Revival). So pricing and comparing properties is a bit more difficult. And since the current real estate market in Key West is in such a flux, I suggest that potential sellers get their property appraised before we place it on the market. Now most Realtors can do a Comparative Market Analysis and give a seller an opinion of the current value based on recent sales. I view the impartiality of an independent appraiser (who is not going to list the property) as being more beneficial. Then the seller can use the appraisal as an additonal marketing tool to sell the property.

Another tool that should be considered is to obtain a Pre-Sale Home Inspection by a Certifed Home Inspector. There was an excellent 30 minute program on the Fine Living Network last night about Pre-Sale Home Inspections. (It is supposed to be rebroadcast this weekend.) It shows one would-be seller who obtained such a report and discovered several problems that any post contract inspection would have found. This gave the seller time to get the items repaired or obtain estimates to determine the cost of repair. The seller opted to spend the money and remediate the problems. The house was listed and went under contract 27 days after being listed.

The nice thing about a Pre-Sale Home Inspection is that it helps reduce the uncertainty of contingencies in a real estate contract. Most contracts have financing and inspection contingencies. (Most Key West contracts are "As Is", meaning the buyer can have the home inspected and walk away from the deal if the inspection discloses some problem with the property.) But the Pre-Sale Inspection, like the appraisal, can be used as a marketing tool to reduce the uncertainty in the buyer's mind about the condition of the property. If the inspection is done by a certified home inspector, it is usually transferrable to the buyer without any additional cost. The inspection reduces the liklihood of a subsequent lawsuit by the buyer against the seller for failing to disclose material defects with the property since the pre-sale inspection is done by an independent, certified inspector who will not benefit from the sale.

I suggest that any potential seller in any town or city watch the program on the Fine Living Network. It is well worth 30 minutes of your time.

If you live in the Key West area and are considering selling you propety, contact Kevin Barlow at Islandview Associates. Go to www.islandview-associates.com for more information on fees and services they provide. I know Kevin. He is a real professional. He is very knowlegable and will work hard to make your sale in this difficult market a little easier. It is worth a call to him. He can be reached at 305-304-9196. Mention that Gary Thomas sent you. I won't get a nickle, but I would like to know that someone heeded by advice.

Something is Happening Here, What it is Ain't Exactly Clear

Remember the Buffalo Springfield song For What It's Worth? It was about the Viet Nam War. The first two lines "There's something happening here, What it is ain't exactly clear..." are rather haunting because they alert us to something forboding (a man with a gun over there...).

Well, something is happening in Key West and I wrote a little about "it" a few times, even as recently as May 19th. That something is the subtle changes ocuring on our little island. There is an item onPage 3 of the May 18th issue of SOLARES HILL, the Key West weekly newsmagazine. CLICK HERE to get the issue in Pdf format. The item discusses the demise (or relocation to another city) of several art galleries in Key West. One of the galleries mentioned is the Charest Weinberg Gallery on upper Duval. Jeff Dunaway of our office is involved in the sale of the building. It went under contract about two weeks after being listed. Our offices are filled with the works of several artists featured at the gallery. I guess we'll have to give the artwork back.

I recently spoke with a builder who moved here around the same time I did. He remarked on the ever changing scene on Duval and how Key West has always adapted to the changes brought on by circumstance. As an example he cited the drug smuggling of the 1970's when the fishing business was so bad that many fishermen resorted to smuggling to be able to take care of their families. A story I have heard before from others. He mentioned the influx of gays and their impact on the gentrification of Old Town. He discussed several other events and how the town coped, and then he mused on what is occuring now: the downward turn in the real estate market. But he was not pessimistic. Instead,he saw the new market as a buying opportunity.

It bothers me that art galleries are going, and that neon signs are subtly appearing in Old Town. They were supposedly illegal. What is happening here? I ask. It bothers me that a good steak uniformly costs $39 or more at every good restaurant. Potatoes extra. It bothers me that a bottle of beer costs five bucks. That's six with a tip. How did this little town get so expensive? Why did it?

I have written about all of the new two million dollar condos going up around town. None of them have sold. There are pre-sales. We'll see how many actually close. I bet the banks are going to start selling some of them off in the not too distant future.

I previously wrote about all of the new luxury hotels being built in Key West. Maybe I'm ill informed, but I don't think there is a market to support all of the luxury rooms being built.

So those are just a few of the issues that make me sense that something is happening here, what it is ain't exactly clear.

By the by, if you do open the Solares Hill link and read the story, please go to Page 18 and hit the magnifier button so that you can read the page. The editor asked Realtors to identify "the single most important thing you can do if you're trying to sell your house". Read the responses. Two of note: Rudy Molinet of Marquis Properties said to "...price the house correctly." He suggested having your Realtor perform a Comparative Market Analysis of comparable sales in a similar location. And I was quoted saying "Get an appraisal from a qualified professional appraiser and list your home at or below the appraised value. Then use the appraisal in your marketing to show that your list price is reasonable."

Another One Bites the Dust

Remember the song "Another One Bites the Dust"? Well, the Key West Citizen has a story in today's edition CLICK HERE TO READ THE STORY about the demise of The Deli located at the corner of Truman & Simonton Streets. It was an easy going diner with good food served Key West style--slowly. I only ate there a few times. The food was good, but like everything else in Key West it got expensive.

Now you may not care about the demise of a diner, but if you live in Key West or want to buy a place here, the closing may have some meaning if you put it into context. There are several announced plans for major redevelopment projects of some favorite and maybe some not-so-favorite properties. The Holiday Inn located right when you drive over Cow Key Channel from Stock Island has been raised and the new swank BEACHSIDE KEY WEST RESORT is rising from the dust. It will be operated very much like a Ritz Carlton hotel. The same developer, the Spottswood Companies, recently announced that it had purchased several major hotels across the street and running east towards Old Town that will be raised to make way for a very large convention center and more swant hotels.

The Hotel La Concha at the corner of Fleming & Duval is supposedly being renovated into a major luxury hotel as well. Back in January I wrote about the renovation that is currently going on at the Casa Marina Hotel. It has always been a luxury property, but it got a little run down. But the project is rolling along with a total make-over of the property. It too will cater to the tony crowd.

A few blocks away The Atlantic Shores Resort has two more weeks left before it gets demolished to make way for more luxury oceanfront condos. Even the seedy Key West Youth Hostel is getting the e axe to make way for new condos.

I am sure the developers all think the gentrification and luxurization (is that a word?) of Key West is a good thing, but I wonder if the premise of the Kevin Costner flick "Field of Dreams" will come true: Build it and they will come. More importantly who are the operators going to get to staff all these new luxury hotels?

Not every tourist or regular traveler or potential second homeowner to Key West wants a luxury hotel, a luxury condo, or luxury second home. A lot of people come here just to unwind and enjoy the funk and feel of the place. Key West is normally very clean, a little noisy, but almost always a lot of fun. I think the windbags that stay at the Ritz Carlton will turn this quaint little drinking town with a fishing problem into something we may not like.

About 30 years ago a small group of people in Denver (my hometown) organized themselves into an International Olympic Committee and successfully secured the 1976 Winter Olympics for Denver. The problem was that the public didn't want the games. Another group got organized and put an issue on a statewide referendum to walk away from the games. The measure passed and the Olympics did not occur in Denver.

I really question the merit of redeveloping so much of the infrastructure that helped make Key West such an inviting place. If it gets turned into another Boca Raton, why will people even consier coming here.

I'm not all that pessimistic. I still think people will want to come to Key West. And if you want to buy a place here, checkout our mls website by CLICKING HERE and then call me for more info. 1-305-766-2642.

An Uplifting Experience

The house pictured to the right is located right next door to mine in the Casa Maraina area of Key West. The folks who own it live in Atlanta and own several restaurants. The house is a vacation home that gets used a couple of times a year. It sits on a very large lot by Key West standards and the lot is filled with specimen palms and plants.

The house suffered major damage during Hurricane Wilma due to flooding. The house was built years ago and the ground floor was low to the ground. So the house is getting a face lift and a body lift. Two weeks ago the movers came in and within two days elevated the house six feet off the ground--it's new height.

Contractors are now building a new foundation and will lower the house onto it soon. The rest of the house will get redone as well. I will post additonal pics and comments as the construction progresses.

Although much of the Casa Marina area had about a foot or so of ocean water during Hurricane Wilma, not many homes flooded because they were built high enough off the ground not to get flooded. But I learned several years ago that certain parts of town can and do flood even during healthy rainstorms--not just hurricanes. I always make a point of asking a listing Realtor this question when he/she shows a property: Does this has flood. I insist that the buyer get a home inspection as a contingency of the purchase.

Thinking of buying a home or business, then please also think about contacting me to help you. 1-305-766-2642. CLICK HERE to checkout all mls listings for Key West and the Florida Keys.

Do I have to Eat My Words?

Back in March I wrote an entry about another new townhome development near the Atlantic Ocean just east of the Casa Marina are CLICK HERE to see what I said then.

The project is out of the ground and two of the buildings have been erected. Pics of the proposed development and the actual buildings are at the right. There is a noticeable difference between the proposal and the "as is". Now I understand the buildings are not complete. For example, the roofs have not been installed. "What?" you ask. That's right. These buildings are modular construction. They were made elsewhere and transported here and placed on concrete piers. The roofs will be installed later along with the balconies, etc.

The townhomes are like many of the new developments I have written about as far as planned amenities such as crown molding and individual pools. But if you look closely you will see that the "pool" is also preformed fiberglass. That is not the same as an in-ground poured pool in my opinion.

I was dismayed when I went by the development yesterday. We have not had any rain in about two weeks, but there is standing water at the far west side of the development. The area is known for flooding, but the city has spent a lot of money to create drains and injection lessen the problem. The standing water means trouble to me. There may be an explanation. I hope so.

It looks like about 1 1/2 blocks have been cleared to make way for this development. I does not look like the developer is going any further than the first two buildings. At least at this point.

I do not see the value in these townhomes. In fact, they look more like an urban "project" than a luxury townhome development near the ocean.

I also added a pic (bottom right) of another modular home being erected on James Street near the Historic Seaport. The building was put in place about two months ago and little has happened to the exterior since. The builder owns the adjacent lot and has poured piers for another house.

So far, I am not impressed with either of these modular projects.

I may have to eat my words for suggesting that the townhome project looks promising. As of now, it does not. Nor does the single family home on James Street. For the sake of the builders, I hope that both projects turn out okay. Time will tell.

As always, I would like to be your Realtor. Please give me a call and let me help you find your home in Paradise. 1-305-766-2642. Thanks.

Recently "Solds" in Old Town

I thought it would be interesting to compare the prices on the highest and lowest "solds" in Old Town Key West since May 1st. There were only five single family sales.

The two I am reporting on are at 1121 Petronia which is a 960 sq. ft. 2 bed, 2 bath wood frame home located one block east of the cemetery. It was "redone" a couple of years ago and has a pool. (The remodel was poorly executed and cheap in my personal opinion. Lots of work yet to be done.) The neighborhood is mixed of single family, apartments, and light commercial on White Street. The house listed at $699,000 and sold for $660,000 or $687.50 per sq. ft. The sellers bought the house in August 2004 and paid $699,000. Seller had to pay a 6% real estate commission (-39,600) and I am assuming seller's title transfer fees and closing costs. So the final net to the seller $605,000 or a $94,000 loss. Give or take.

The second property is located at 520 Emma Street in the exclusive Truman Annex. It is a single family home built in 1995 with 1914 sq. ft. of living space and private pool. The home has 3 bedrooms and 3 full baths on a private 3444 sq. ft. lot. The home has all the bells and whistles! The home was listed at $2,185,000 and sold for
$1,895,000 or $990.07 per sq. ft. and was on the market 40 days. The sellers bought the house in January 2000 and paid $749,000.

I think the buyer of 1121 paid a lot of money for that little house. It needs a lot of work and the location is not the best--it is really close to a very smelly Cuban restaurant. But I think the buyer of the Truman Annex house got a good deal. The house sold near the top end based on price per square foot in today's slow market. When the market rebounds,that price will be every bit as good as the price the seller paid for it in 2000. Mark my words.

CLICK HERE for more details and photos on both properties.

There are lots of homes and condos on the market in Key West. Some are good, some are really bad, and some are bargains, and some are properties that you should not even consider. CLICK HERE to search for the type of property that you are interested in purchasing, and then give me a call so that I can help you find your new home in Paradise.

Up, Up and Away

It just got easier to get to Key West. On Saturday Delta Airlines launched a new route between Key West and Tampa, flying two trips on Saturdays only on a 50 passenger regional jet. Continental already offers daily service between Tampa and Key West on a smaller 19 passenger plane.

Delta already files three daily nonstop flights to Atlanta on a 65-passenger regional from Key West.

United, US Air, American, and Continental all fly into Key West daily from Miami, Ft. Lauderdale and other Florida locations. Instead of booking your flight through Miami, try one of the other large Florida cities such as Tampa, Orlando, Ft. Meyers, or Ft. Lauderdale. And if you feel you want to drive to Key West, start out in Ft. Lauderdale. That airport is much more user friendly. It is just as easy to drive to the Florida Turnpike and take a left to go to Key West. If you have ever driven to Key West from Miami you will agree that the extra 40 minutes in driving time is worth it.

The Florida Turnpike, Interstate 95 and U.S. 1 all converge and meet in Florida City. From there the drive is interesting—if you are not following a funmobile going 40 miles per hour. There is basically one lane in and one lane out of Key West. The drive is pretty, however. Try the drive once and fly the rest of the time.

Of course you could take a boat from Ft. Meyers or Marco Island. CLICK HERE for more information.

I have one plea: Please do not tease the Realtors. So many people come to Key West and toy with the notion of buying a second home here. Many folks are serious, but not all. I don't know how many hours I've logged driving would-be buyers around looking at homes or condos. The real estate market in Key West is in the dumps right now, so please don't waste a Realtor's time or gas by going on a sightseeing trip in his or her car. But you can see all current mls listings by CLICKING HERE. If you are really considering buying, please think about calling me at 1-305-766-2642.

Herd on the Beach

Recently on Good Morning America there was a segment on Freakonomics which the author discussed the herd mentality and gave the example how he and his daughter used to go to a bus stop and wait several buses because it was so popular. After weeks of waiting and then being squished on a packed bus he had an idea. He walked a couple of blocks to the stop just before this popular stop and now he and his daughter get on the bus and get a seat when they used to have to wait for a bus and then stand for the ride.

And this little snippet relates to real estate how? you ask. Do you follow what everyone else is does, becoming part of the herd, or do you do your own research and make decisions that are in your own best interests? Do you blindly trust the media, or do you use those reports just as part of your deliberative process?

Herd behavior is the term used to describe situations in which a group of individuals react coherently without there being any coordination between them. Such a group is called a herd. The term is used uncontentiously to describe the behavior of animals within herds and flocks, and more controversially to describe some kinds of human phenomena such as stock market bubbles, and behavior in political demonstrations.

A great little item in Wikipedia describes it this way: "In the case of stock market bubbles, the optimal behavior for an individual may be to do what everyone else is doing, because even though everyone knows that they are in a bubble, until it bursts, most profit is to be made by staying in the market. In this case the term "herd behavior" is relatively appropriate, because the "collective" behavior emerges from uncoordinated individual choices. Interestingly, though the behavior of the group is evidently irrational, the behavior of the individuals that cause it is rational at least in the short term, though it does show some abandonment of risk aversion, as the crash usually occurs without much warning." I have found that the real estate bubble has affected the masses the same way: the masses have become the herd.

Most people know about Warren Buffet's theory of stock picks. Buy quality and do not buy when everyone else is buying. Buy value and buy it cheap. I think that's it pretty much in a nutshell. Books have been written about him so I am not going to expound any more. But I share his theory as it relates to real estate--especially in this market: buy value and get it for a good price. Take advantage of the down market. Perhaps even profit as the misfortune of others. I'm not being hard, I am being pragmatic. If you have cash and can afford to buy in this market and want to buy a good property, do it. The junk is not selling. Not in Key West. But the good properties are. And some are being purchased at very attractive prices.

CLICK HERE to search the Key West mls website where you can see every residential and commercial listing from Key West to Key Largo. If you are looking for a property in Key West or the lower Florida Keys, please give me a call and lets discuss how I can help you. 1-305-766-2642.

Buy This Old House

The grand two and a half story home at 1009 Southard Street is another bargain looking for a new owner. The 3719 square foot home sits on one of the great streets in Key West. Just a few doors to the east is the big house that sold last year for $5.5 million. And across the street is the home of the former Vice Chairman of AOL Time Warner. (It was featured in a huge Architectural Digest piece a few years ago.) White House Chief of Staff Joshua Bolten owns the house next door to the west. All in all, it's a pretty good neighborhood.

The house is presently configured as a 3 unit building with a studio apartment downstairs in the front, a two bed two bath apartment on the second and third floor, and the owners quarters are at the rear of the main level. The tenants have their own private pool, but the large pool at the rear is the domain of the owners. And the owner's guests have their own cottage accessed off Lowes Lane. Oh, and there is also a garage.

The house is in very good condition as it sits. The kitchen and bath in the owner's quarters are about 15 to 20 years old. But they are perfectly liveable as is. A new owner may want to restore the house to a single family residence. There is plenty of room to do whatever suits your fancy. And the price at $482 per square foot is a bargain.

CLICK HERE to see more photos and read more about this great Old Town home. And then please give me a call to see it. I think you will be surprised at how wonderful a property this is. My number is 1-305-766-2642.