Here is a fixer-upper in the Butte for $100,000. It is in the back corner of a very quiet loop off of Plumley Road. This home was originally built in 1963 with a couple additions to it in the years since.

A natural gas heater furnace, hot water heater, and garage unit heater was added in 1998. The septic system dates from 1983. The house has been vacant for awhile but a few repairs have recently been made.

The owner is planning to sell it ?as is? and will not make any repairs. Therefore, buyers will need to explore options for financing, it will probably NOT qualify for normal 30 year mortgages. The only possibilities for financing that I know about at this time are:

• 1. A ?rehab? loan.
• 2. A bank-in-house loan.
• 3. Cash
• 4. Short Term Owner-Finance OAC

The plumbing has been tested to ensure that there is water to the baths and kitchen but the water is currently turned off. The well can be tested during the inspection period.

Here is the Mat-Su Borough information on the property. The borough has it sized at 1200 square feet but the owner measures 1138. The garage is approximately 900 square feet. This house has 2 bedrooms and an office that could be used as a small bedroom. The lot is 0.88 acres and is nice and flat. There is a nice greenhouse on the property.

Here is the borough tax map to the right?just click to expand.

This property is in the flood zone. In fact the garage and crawlspace did flood in 1971. It has not flooded since. Here is the flood zone map for the Butte area.

Here is a google map to the property. Drive-by?s are encouraged, but please don?t try to enter the property without an Realtor.

If you have a Realtor, they can access it with the lockbox. If you don?t have a Realtor, give me a call. I would be honored to help. My number is 907 232?7900.

Here are some more photos?just click to expand.

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USA Today recently published a state-by-state comparison of mortgage delinquencies and foreclosures.  Some of the other states are seeing loans go delinquent at a rate that is 2–3 times higher than Alaska. 

I had a loan officer tell me this week that they need to provide more documentation than they needed previously to complete the loans. That has held up a few loans and caused us to extend closings, but they are still closing. 

Alice Roe of US Bank mentioned that the volume of loans at US Bank is increasing due to closure of many mortgage brokers across the country.  Their current rates, (as of today), are 5.875% for a fixed 30 year note with a 1% loan origination fee.  You can get a 0% loan origination fee at 6.25%.   Those are some of the best rates I have seen for awhile. She has an online loan application here.

Dave Johnson at Fishhook Realty, sent me a link to this article by Peter Toner in San Diego.  In it, he recommends ensuring that you are working with quality professionals from quality companies.  It is in these kinds of times that the solid companies do well. 

Speaking of quality: I have mentioned before some of the experienced lenders here in the Matanuska Valley.  These people know what they are doing and will point you right.

• Alice Roe: US Bank
• Jo Oxentenko: Wells Fargo
• Howard Nugent: Wells Fargo
• Annemarie Weiland: Residential Mortgage

This is not an all inclusive list.  There are other good lenders in the valley as well and I will add to the list later.

By the way, I know a quality Realtor:  You can call him on his cell phone at (907) 232–7900.

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Or dollars as the case may be.

First I should tell you that most of the 31 duplexes currently on the Wasilla real estate market do not cash flow.

Cash flow means that after you collect your monthly rent and pay your monthly expenses, you still have at least a dollar in your pocket. Hopefully you have a few hundred dollars.

Most of the duplexes on the market today will cost you money at the end of every month unless you use a very large down payment to decrease your loan amount and your payment.

Here is the situation.

Purchase price, $250,000 Monthly with rents totalling $1,000 per side.

• 5% down = $12,500 which results in a loan for $237,500
• At 6.5% interest for 30 years you have a P&I of $1,501.16
• With $3,000 annual taxes and $1,200 annual insurance your PITI is $1,851.16
• Garbage pickup=$30 per month
• Maintenance Costs = $200 per month
• Management Fee = $200 per month, ( you need to figure this in even if you self-manage)
• Vacancy rate $100 per month (that’s a five percent vacancy rate)

Total costs so far = $2,381.16. 

So you are going into the hole at a rate of $381.16 per month.  There are other hidden cost which inevitably come back to bite that aren’t figured into this.

So How does it make sense?  (Or cents)

…Well let’s try this!

You are someone who only wants to pay about $150,000 or less for a home.  You look on the market and really can’t find anything that you like for a home in that price range.  So you get the bright idea of buying a duplex and living in one side.

Let’s compare the cost of a $150,000 house to a $250,000 duplex:

•  With 5% down you have a loan of $142,500 on the house
• At 6.5% interest for 30 years thats a PI of $900.70
• Add taxes and insurance and you are at a $1,150.70 PITI
• Figure garbage and maintenance at $220 per month

That comes to a total monthly cost of about $1,370 or so.  We left utilities out of the equation since you will be paying them in the duplex as well. 

If you move into the duplex and pay the $1,000 rent to yourself and absorb the $381.16 cents negative cash flow you are about breaking even. 

So…Duplexes only make sense under one circumstance:

You have put down a large enough deposit to reduce your loan payment down to a level where the duplex will cash flow. 

In the first example of the $250,000 duplex, we need to reduce the loan payment by $381.  That means you would need to put down $75,000.  That would give you a loan of $175,000 and you would have $14 in your pocket after paying your bills each month.

Occasionally duplexes come one the market that actually produce income with a minimal down.  I sold 2 like that this year.  But most of the time they do not and that is why there is 31 months worth of inventory on the market right now.

PS…09/08/07…I have had a couple people contact me privately with some disagreements or corrections to this post.  I can add an appendix if I need to but if you think I’m nuts, go ahead and comment.…

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The inventory for Wasilla Real Estate is beginning to ease.  I would expect to see a reduction in inventory as winter approaches. 

Fifty closed listings is a record for the summer.  It was a classic end of the summer surge.

Below are the statistics for this week:

It’s still interesting to note that the average days on the market is much lower for the houses that have sold or are pending than the total inventory.  Although I can’t show it yet using the AlaskaMLS data, the average days on the market for the total inventory is about 100 days, but the 50 closed properties this week only averaged 67 days on the market.

Someone asked me about how duplexes are selling so I checked it out today.

There are 31 duplexes on the market in the Palmer, Wasilla, Big Lake and Houston areas.  The average price is about $265,000 and the average time on the market for these duplexes is 141 days. Think about that while digesting the fact that only 3 duplexes have closed since May 1, (Mat-Su MLS shows 4 closed). 

It can still make sense to buy a duplex, but only under certain circumstances.  I’ll talk about those circumstances in the next article.

 If you have any questions about the current market…give me a call on my cell.  907 232–7900

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