Responding to the Spike in Real Estate

Lufos profile photo

As a friendly Real Estate Broker, I get all of these magazines directing to Brokers by the usual associations. They all say that it is time for Real Estate Brokers to become involved in curing the lack of affordable housings. Like most things in life, they describe the probem but do little about suggesting a solution.



Well guys and girls I doubt that this solution will be forthcoming from the various little groups that will be formed up to study the problem. We Brokers are big on study groups but alas thats the end.



So once more you the active persons out there playing in the trough of real estate are the ones to play this little game.



Being a good Capitalist I think you should all make money at it just do not be super greedy.



My suggestion is based on the observance that legislation is now appearing which allows a homeowner with a house on a nice little Residential, One Lot, to add a second home. What this does to Density Control, Dunt Esk. But we are short and the powers that be feel that this is the answer. So now may be the time to buy with heavy leverage, a slightly overpriced single family with a lot that is a little over the usual size. You then add onto the lot the second house.



This you finance with an equity loan. It is possible if you will build a low cost house. Perhaps a manufactured house, a modular structure. Or if you are a historical type. Perhaps a kit from the ads in Popular Mechanic. Quansit if I remember the spelling. Nice roundy house. Easy to erect. What is called in the Military a two case house. Thats the amount of beer drunk which erecting this small structure. You can play all kinds of games as to design and additions.



Or perhaps you would like to build a concrete Igloo. Now thats fun and can be done by the normal householder who has a few typical American Skills. You know, can tell a 8 penny from a 16 penny nail. Can handle a Skill Saw without having the wood torn out of his hand.



Do the math and, if it comes out, now might be the moment. Of course the local practice of Garage conversion into a unit is also applicable and you can do this for about $5,000 if, repeat if you do a few of the tasks yourself.



Teach your wife to lay tile, or in my case accept instruction from my highly talented wife. Remember to snap a line so all stays in line. God she is good at it. Annoying.



A property bought for one purpose and then expanded to another which creates a stronger income stream now that is a goody, The time has come. Grab it. Oh a word of warning. Do not move a relative in. Unless of course they are rich!



Lucius


Comments(5)

  • ghardin28th July, 2004

    Affordable housing has been and will continue to be a political buzzword with little or no substance. After all, what is affordable housing? What is affordable to me, may not be affordable to someone else. It is a very subjective concept. The solution lies in the lap of developers. We all want to make money, but many developers have taken it to the extreme, building homes that are so over priced and over valued that only a few select people can afford them, and as a result, these developments are limited in size to only a few homes. While I do not believe in high density housing (I live in the Mtn West) I do believe in making money from hig volume low margin homes. I believe that an astute and responsible developer CAN build high quality homes at an affordable cost and sell them to lower and midel income buyers and still make a profit. They are not going to buy their yacht or airplane on the sale of a few homes, but if managed well and market right, they can still get the perks from selling larger numbers and a lower margin. The mix of social responsiblity, and good business makes a lot of sense if greed is taken out of the equation.

    • Lufos28th July, 2004 Reply

      What you say is a great truth. I read a touch of cynicism in your remarks. But do not stop here. Low Cost Housing does not have to be crappy built, high volume, no design and the same old junk inside as has been over the last 70 years.When I say low cost housing I am talking about no maintenance really advanced stuff. I am putting one in Beverly Hills. The lot value is over $400,000 and here on it will sit a $58,000 costing house. Why? why not. Better house then any other within a four block area. I know there is an old Neutra and Frank Lloyd Wright just down the street, this is more advanced.



      .My chief ex carpenter, smuggled his family in from Mexico and what a time that was. He is now legit, what a bunch of lies I told for that one. He is getting the same house except it is going on a $55,000 lot I leased for 99 years with the option to buy whenever. His lease cost for the land is $87.00 a month and that on top of $375 is his total payment. He will live surrounded by rednecks, a few below the line movie mechanics and the rest just us the people.



      I am satisfied with the profit I make on each house. I do not mind cosigning all the mortgages. Actualy I am the service agent on the mortgages for the lender who just loves the deal. Here is a house on which they lend $58,000 and the day it is completed they could sell it for a minimum of $300,000. Of course they cannot sell for ten years. I want them to raise their families and mix it up for at least ten years. If I can expose their kids to our social strange ways, they will be one of us at the end of that time. Ask any Catholic Priest. The system works.



      If it is accepted in Beverly Hills and they ooh and aah and make comments on the progression of architecture thru Cubism into Modernism and now Latter Day Industrial Modernism on the Cusp of the Information

      Age. I go with it. I like the fact that it generates electricity and sells it back to the local Utility. I like the fact that it heats itself with solar cells and not only heats itself also heats all the water. If it were out in the country I would tip and collect water from the (occasional) rain and store that underground. Mix it with used water creating a gray water system and make all the flowers and stuff happy. I also watch for gas pollutants you know the stuff that is generated by every new house. Well these are different.



      Why are they so cheap. Simple we use the ISO Shipping Containers which have been arriving loaded with goods from China. There are no goods going back so there they sit rusting away. Yes we worked out the rust problem. The color coatings that go on are heavy duty. Some turkey yesterday asked for a Pink one. I almost plotched. Can you imagine Pink Shipping Container? But these are 1400 sq. ft. 3 bedrooms 2 baths.



      No termites, no earthquakes, no fires, semi bullet proof this is Califiornia, and they float.



      If we do not mix our minority families and by minoritys I do not limit to race but include economics this society will fail. It is right now being streached in the middle and the middle cl***** as always is under attack.



      I intend to correct it and the first steps are in progress>



      cheers just a little hyper, Lucius

      • ghardin28th July, 2004 Reply

        This is an interesting idea Lucius! Tell me more. It is something we might be able to make work here! With the growth we have had and the jump in property values, any kind of "affordable" housing is either so far out in the boonies it is not practical or it is a roach infested dump in a crappy, dangerous neighborhood. Maybe we can work out some kind of arrangment. You can email me thru my profile and we can talk more, if you want.

        Gary

      • bencase310th August, 2004 Reply

        What a great way to use a shipping container. We have several on our land that we've converted to workshop space for our landscape desig/build co.. We've gone "out" and were considering going "up" with the units but hadn't seen any examples of the technique. Do you have any pics of the project underway or one that is finished? Interestingly, Dwell magazine had a competition for a modern prefab prototype home for mass production. The winning design was built just down the road from me. It involves a number of standard "modules" that can be configured in any combination for customization. This leads to les expensive housign that's built well and is not "cookie cutter".



        This is from Dwell regarding the challenge:

        http://www.thedwellhome.com/ />
        “As labor costs continue to rise in America, it is becoming increasingly difficult to afford the high cost of building a quality custom home,” says architect Joseph Tanney. In response, Tanney and Robert Luntz, prin-cipals at architectural firm Resolution: 4 Architecture, created Modern Modular, a housing concept that leverages existing
        construction methodologies of prefabrication to create mass customized, modular homes at a reasonable cost.





        Modern Modular houses are based on prefabricated, factory-produced, easy-to-transport modular units, minimizing the cost of production. Final structures are designed from the inside out using a series of standard “modules of use.” Modern Modular envisions dwellings composed of these modules, which have the potential to be configured in a variety of ways, meaning limitless home design possibilities, each specific to client and site.





        The Modern Modular design proposed for the Dwell Home represents just one of many configuration options—a program specific to Nathan Wieler and Ingrid Tung—and careful consideration of the Pittsboro, North Carolina, site. “It’s impossible that one home is right for everybody,” says Tanney. “Modern Modular is about establishing a system that can be modified for each individual client.”





        By merging conventional wood framing with advanced technologies that allow for mass customization, Resolution: 4 Architecture hopes not only to transform the traditional relationship between architect and client in home construction, but also to change the future of residential architecture itself. “Modern Modular offers an option for a modern, affordable home that could aesthetically transform the American domestic landscape,” says Tanney. “The challenge that lies ahead is execution and implementation. We believe we have the strategy; now we need to execute it—and the Dwell Home offers the perfect opportunity to show that the system works.”


    • Lufos10th August, 2004 Reply

      Dwell is my love. I read every issue of that magazine. I love the furniture, I love the housing but there is only one thing I do not love. That is the price (cost) of the housing they are producing. I called the people on the Dwell project. I guess the Arch etc. I asked if they were interested in getting into high production as their product was beautiful but costly. They informed me that they would continue on their way making them one by one. Broke my heart. I think they are better then I am. Much more talented and trained.



      Its like Jennifer Siegal a winner of an arch but she is involved with clients who have big bucks and I am involved with clients who have no bucks.



      My target is $20 a sq. ft. Now I know I have some handicaps. Because these containers are only 8 feet wide I have to join them together on occasion as 8 feet wide may be all right for small children or a family with lots of children who wants to give separated sleeping rooms and maybe one big master bedroom of at least 14 feet across. Now that I can do. But the ultimate solution is to manufacture yourself and set your dimension to a minimum of 14. Great, wish I could do it.



      I am afraid I will just have to struggle along the way I am going. I will have to mostly stick build on site until I get past number 10 and then a small mobile factory based in perhaps two 40 foot containers.



      I want to get to the point where a person can come in sit down with a CAD operator and with their personal imput help create a one of a kind house by mixing the boxes to answer their own housing family problems. Then push a button. Out pops the plan. The lot and area is selected and up she goes. Now that is my ultimate aim. I think it is dooable. I think I have solved the land cost problem and right now I have to solve the Building Departments problems. The financing for some strange reason I have run into some very progressive bankers. All they want is to not have to be involved. So I will do a full service. From loan service. To foreclosure and subsequent resale of the property. Cradle to the grave.



      Right now is the hard part. So best I do that alone. Then like a butterfly emerging from its lowly status as a worm, we will launch a design so far out it will look like a Klingon's from outer space residence. So where else?

      Why in California!



      Cheers Lucius

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