From the City of Minneapolis Website-Nov 21, 2008

The Minneapolis City Council and Mayor R.T. Rybak approved a spending plan Friday, Nov. 21 to use $5.6 million in federal Neighborhood Stabilization funds to acquire and redevelop foreclosed properties in neighborhoods hardest hit by foreclosures.

The funds are the result of the Housing and Economic Recovery Act of 2008, which was passed by Congress and signed into law in July to help state and local governments respond to rising foreclosures and falling home values. The funds are targeted based on the number and percent of foreclosures, subprime mortgages, and mortgage defaults and delinquencies. The City will now submit its plan to the U.S. Department of Housing and Urban Development (HUD) for approval.

The $5.6 million plan is focused around purchasing, re-developing, and rehabilitating foreclosed properties:

$500,000 will establish financing mechanisms to purchase and redevelop foreclosed homes and residential properties, including using soft seconds, loan loss reserves and shared equity loans for low and moderate income homebuyers. Contract for Deed or incentive programs geared to home homeownership will also be considered.

$1,464,800 will support the First Look Program, a new national pilot project launched in Minneapolis to coordinate the transfer of real estate-owned properties from financial institutions nationwide to local housing organizations, in collaboration with state and local governments. This funding will also provide value gap financing to partners to cover the difference between cost of purchase and rehab of property and final sale price.

$1,515,200 will be used to acquire vacant foreclosed properties that are not candidates for rehabilitation, demolish them, and hold them as vacant parcels until the market is ready to absorb new development of owner-occupied housing units.

$1,700,000 will be used to demolish blighted structures. To date, the City has more than 900 properties on its vacant and boarded list.

$420,000 will cover program administration costs within the City of Minneapolis Departments of Community Planning and Economic Development, Finance and Intergovernmental Relations.
Additional Neighborhood Stabilization funding guideline details:

* The funds must begin to be used within 18 months of receipt and spent within four years.
* No less than 25 percent of the funds ($1.4 million of the $5.6 million) must be used for housing low-income individuals or families whose income is below 50 percent of the area median income.
* Property rehabilitation spending may include energy efficiency and conservation measures.
* Purchases of properties must be at least five percent below current market value (based on a 60-day appraisal from the date of acquisition).
* Properties can be sold for only an amount equal to or less than the cost to acquire and redevelop such a home or property up to a decent, safe and habitable condition.
* Within the first five years of the program, any revenue generated from the sale, rental, or redevelopment of properties in excess of actual costs shall be recycled back into the City’s foreclosure program.
* After July 30, 2013, any program income must be returned to HUD, unless otherwise approved by HUD for eligible program use.

Nov. 21, 2008

If you boil down all the slick marketing, the websites, the bus benches and the business cards with their pictures on them, Real Estate agents are just sales people.  [Any real estate agent reading this, don't throw things at me].  We get paid by producing.  Plain and simple.

Just like any sale profession, the better the agent is at their craft [selling real estate], the busier they should be, and therefore the more successful they should be.  In this market, if your real estate agent is not working his tail off just to keep his head above water with the volume of transactions, well then, I suspect he one of the following:

1. Worthless.  S/he is either too new in the business or has not developed enough experience to find solid investors.
2. Not an investment property agent.  The average real estate agent is not doing great (that is why so many have left the business).  Listing standard owner occupant houses is rough.  Most will be overpriced and stay on the market for months.  Investors on the other hand are out in full force and in some areas (like North Minneapolis) it is like a feeding frenzy.

I am not sure who I am writing this post to (agents or customers).  I guess maybe both.  As an investor, I would be cautious of the agent that is just sitting around in this market looking for business.  As an agent, I would work hard to pick up some investor clients and light the world on fire.

There are many things to consider when remodeling or purchasing an older home. Homes built before 1980 have the strong likelihood of containing asbestos. Due to a steady progression of technology and green sustainable methods, there are many ways to ensure your home or property is asbestos free. If you are interested in saving money, remodeling and improving your carbon footprint, here is some information to get you on the right track.

Used in millions of homes throughout the last quarter of the 20th century, asbestos insulation can become a real dilemma for homeowners due to causing a variety of health problems, including Peritoneal Mesothelioma and Malignant Mesothelioma. These types of cancer take the lives of thousands each year.
Non-regulated asbestos material can be legally performed by homeowners, regular contractors, or licensed asbestos abatement contractors as long as the National Emissions Standards for Hazardous Air Pollutants (NESHAP) are not violated. Asbestos removal in public facilities, homes and workplaces must be undertaken by a licensed asbestos abatement contractor. One the removal is complete, green insulation options should be given serious consideration, such as: Cellulose, Cotton Fiber and Lcynene.

The United States Green Building Council (USGBC), in a study conducted in 2003, estimated a savings of $50-$65 per square foot for well-constructed green buildings in the U.S. (see table below) during that year. The numbers continue to improve as more eco-friendly options become available, and those kinds of figures have finally begun to attract those who thought eco-friendly construction was just a bunch of hogwash.

In the spirit of the upcoming election, I thought it would be fitting to spin a little political terms and political history into this week’s Carnival.  (Don’t worry, I am not going to start a long diatribe on why I am voting one way or another.  I don’t want to be the first (I think), Carnival host censored by the Carnival Admin!~)

The United States Presidential Line of Succession was first passed into law in 1792 naming the Senate Majority Leader and then the Speaker of the House as in line after the Vice President to take office.  In 1885, the President’s Cabinet was added in place of the Majority Leader and Speaker, but, in 1947, the Speaker and the Majority Leader were added back in above the cabinet.  The only other changes were to remove the Postmaster General, in 1971, from being in the succession and add the Secretary of Homeland Security to the bottom of the list in 2006.

Despite there being many, many topics discussed in this election, between Joe the Plumber and arguing about how many houses McCain owns and what Obama paid for his mansion in Chicago, this election has been lately centered around the economy with the housing crisis in the spotlight.  Seemed only fitting that the top political office awards go to those posts about that topic.

The Presidential Award goes to The Digertati Life.  As SVB (Silicon Valley Blogger) states, we often disconnect the foreclosed home (that we are excited to get a good deal on) from the family that once lived there and lost everything.  The video is especially eye opening about Foreclosure Alley’s Personal Stories of Financial Loss: The Aftermath of Foreclosure.

Toby Boyce at Saide’s Take on Delaware takes home the Vice Presidential Award for explaining the recent market collapse associated with Mortgage Backed Securities.  He puts on his Bubba Gump hat to simplify the explanation and gets Forrest’s Take on Mortgage Backed Securities.

Even after all the doom and gloom you hear on television these days about the housing market, it was amazing to have Amy Bohutinsky at the Zillow blog tell us that 32% of the people they surveyed still believed their house when up in value over the last 12 months!  Amy gets the Speaker of the House Award as she explains Strangely, “Not My House” Sentiment Continues, Albeit a Smaller Group.

The Senate Majority Leader Award goes to The Mortgage Reports Blog that explains How Cutting The Fed Funds Rate Helps The U.S. Economy.  While many people believe cutting the Fed Rate helps the economy, Dan cautions that we could be overheating it.

After that big dose of reality and the stress of watching the political coverage you need to get a laugh now and then.  Two posts gave me a smile and are worth honorable mentions.

• Purva Brown at Sacremento Real Estate Girl gave me a fright when she perfectly described a customer that I am working with right now in her post titled: Who? Me? A Monster?
• Over at Mike’s  Corner, Mike  Price talks about How To Be A Clueless Twit and Social Media Failure and how as Real Estate agents, we need to remember that Blogging and Social Media is not an immediate return.

It’s late at night as I finish up this week’s carnival post.  I suppose I am just in training for another long night of watching returns on Tuesday.

Remember:  Get out and Vote!

I have previously written about the new Minneapolis Rental License Fees.  I have even talked about how the City of Minneapolis has hired people with the sole purpose for finding unlicensed rentals.

When buying an investment property anywhere, not just in Minneapolis, it is easy to assume that the property that you are buying has a rental license.  You need to check!  In many cities, you can simply call the licensing department.  In Minneapolis, you can simply dial 311 and they will tell you.

The problem with no active rental license is that it can cost significant amounts of money ($1000 fee plus license cost in Minneapolis) to get the building licensed again.  In some cases, the building may not be eligible for a license (See my License Lost for Good story).

Do your homework!

For those of you that have spent anytime cruising the real estate blogosphere, you may have run across a reference to the “Carnival of Real Estate“. The goal of the Carnival, as it is know in the real estate blogging community, is to:

..bring together the best real estate bloggers from around the country (and world) to share information about what we’re all passionate about: real estate. This is intended to be a forum for everyone to participate. Like a potluck, everyone brings something and may the best dishes be recognized each week. [from their website]

The interesting part about the Carnival is that each week it is hosted at a different blog/web site. I am excited to announce that on November 3, this blog, Minnesota Investment Real Estate, will host the Carnival. It will give our readers the chance to experience different blogs, new writers, and interesting articles that they may have not have been exposed to previously.

Mark the date on your calendar!

Scott Ficek is a Realtor with Re/Max Advantage Plus in Minneapolis and helps new and seasoned investors buy and own Minnesota investment property. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.