Deaton Investment Real Estate & The Wake County Apartment Association

Monday, April 28, 2008

Downtown Durham apartment market is smoking

If you haven't been to the American Tobacco center in Durham, you're missing out on one of the top re-development projects in the southeast in the last decade. It really is remarkable to think about what they've done to the place.

Well, now its getting apartments, too.

If I were in the apartment market needing a place to love, I'd head here first. In fact, I'd take something in this development long before some of the, what I believe to be, overly pretentious mixed-use communities in the Triangle. At least there is some authenticity in this project.

Anyway, this is cool news for the local apartment community, and for Downtown Durham.

The market is weird

Just read this article in today's N&O.

So, office demand is high. Normally, this means that companies are growing and can still afford to relocate. Odd. I thought the bottom was falling out. This can mean two things, really.

1. The "downturn" is simply not as bad as many think.
2. The "downturn" hasn't really hit yet.

Let's hope #1 is true. I surely don't know.

Incidentally, SPACE magazine, published by The Triangle Business Journal, also stated that the first quarter of 2008, normally the slowest of any year, showed signs of a healthy market with plenty of positive absorption. Still, job growth is pretty slow.

Oh, and in other news, gas prices are high.

Friday, April 25, 2008

Flipping is so 2005

There was a good post on the NuWire's InvestorCentric Blog about the slowdown (thankfully) in house flipping as a real estate investment.

As my comment stated on that blog, I do believe flipping is a legitimate method by which to invest in property. However, it is far from as easy as its unrealistic ascension in the marketplace makes it out to be. Anyone who tells you they're a full-time flipper was probably also a day-trader back in 2000.

Maybe that's a harsh comparison.

Flipping should be treated as one component of your real estate investment strategy. And only a "bonus" component at that. By that I mean, if one comes your away suddenly, jump on it. I wouldn't spend all my time looking for them.

An investor we know quite well, who owns well over one hundred rental houses and manages them full-time, says he can find maybe one flip every couple of months while working (his words) "24-7" hunting down potential purchases. To boot, he already has an established network of contractors and understands what costs what throughout the process.

In the end, I guess my point is yes, flipping can be a great way to make good money in real estate. Long-term wealth though? I doubt it.

Thursday, April 24, 2008

Taking eviction to a whole new level

This reminds me of those episodes of Tom & Jerry where they would create a hole in the floor and slide the carpet over it. Don't know what I mean? Read this.

And, um, no, we don't advocate this type of management approach.

Wednesday, April 23, 2008

Apartment Internet Marketing

Okay, so you're probably not there right now if reading this. But, if you own apartments, or plan to, this may be worthwhile come next year.

The AIM (Apartment Internet Marketing) Conference.

Spend some time on the site, it's worth getting to know.

You want to crown them?! Then crown their a#@!

The DBSI Group of Companies, which comprises several companies dedicated to locating, acquiring, providing, and managing outstanding real estate throughout the nation, had an interesting piece about cash flow vs. appreciation in its most recent newsletter.

Read it here.

If you're not at all familiar with DBSI, spend some time on their site after you read the article. I tend to learn something new about real estate investing each time I'm there

Wednesday, April 16, 2008

Inspections, inspections

Aaannnnnd we're back!

Okay, so its been a month. I know, how do we engage anyone if we're never here? I guess we just keep trying. Anyway, I came across this article about a state bill being considered that would impact the role property inspectors have in terms of random selection of potential code violators in Raleigh and Durham. It sounds like a good thing for property owners.

Have a read.

Proponents of this bill seem to understand that landlords are often impacted by violations they had no idea were in play. Many property owners feel that rules are applied haphazardly and in many cases, are applied to some and not to others. (The PROP, for example.) If the codes were enforced in a uniform manner, property owners would at least have some reasonable ground on which to stand. And, the relationship between the two parties (city inspectors and landlords) would improve.

That being said, the property inspector's role is vital to the vibrancy of a community. The disconnect comes when city officials, who often demonstrate very little understanding of the role rental property plays in the city, add regulations without consenting the very owners of that community. (Garbage disposal ban, anyone?)

Every city needs affordable housing. (Keep in mind: there is no connection between needing affordable housing and an inability to obey the law.) And it is the goal of all landlords to own property in respectable areas. Who seriously believes that landlords like to chase down tenants for rent? Many landlords would be more than happy to make a property more attractive and an appealing part of any city street and have tenants who respected their apartments. Because eventually, that would lead to increased property values and more rent.

The old adage, "the tenants will treat the property like it treats them" is quite a ways from reality. There are bad property owners, of course. However, even the most ever-present landlords see new windows get busted out, appliances stolen, cars abandoned, carpet ruined and police called. It is simply a harsh reality of owning rental property, regardless of location.

Essentially, there is a delicate balance between the quality of a property and its contribution to a
neighborhood. Houses don't commit crimes. Their occupants do. However, a blind eye is turned toward the real source of blight in an effort to ignore that not-so-harsh truth. Nicer property will not make a neighborhood's residents suddenly respect it. Ask anyone who tries to change a neighborhood. I can speak first hand for a couple of our customers who have rehabbed on rough streets, leased the units, and are still fighting thefts, non-payment, yard trash and PROP violations.

The mindset that a slanted porch is a driver of community blight simply doesn't jive. If several adjacent properties are abandoned and attracting crack dens and prostitution, then surely something needs to be done. This bill allows for an inspection department to play a key role in community upkeep while bettering the relationship between frustrated apartment owners and city inspection departments. I hope it passes.