Be one of the first to move in and score some deals while doing so. The Burgundy Place at the Gateway is a condo new development in Edina that just finished up and to this date might still be empty. Located at 4910 W 77th Street in Edina.
There are some problems with the redevelopment plans in the immediate area including portions of the Edina Pentagon office park being in foreclosure (according to the MSP Biz Journal) and the aloft hotel not breaking ground until spring/summer. Nonetheless the show must go on.
There are 36 condominium units in the building and currently 7 are listed in the MLS. Prices range from $229k for 1 bed 1 bath units all the way up $489k for a 2 bed 2 bath units.
Here’s the dealio from the website:
Not to shabby… except for the closing costs. I bet you could get the developer to pay all closing costs and more. Ask me how here.
Nothing ever looks good in real estate if you have a city (Rosemount) pull some eminent domain stunt that doesn’t pan out. I have to admit, I was getting worried that no tenant would ever fill in the bottom commercial space in Waterford Commons.
Until the other day I was driving by and realized they where putting some studs up and dividing up the some 7,000 plus square feet.
Currently the website doesn’t have anything listed as a possible tenant(s).
The end unit with the rounded corner appears to be some sort of restaurant but there is nothing on the outside of the building for advertising. The other end-unit has a VA loan banner on the front window.
There is definitely good street frontage and I’m surprised its stayed this vacant for so long after the luxury apartments are close to or already are fully 100% leased. On average 14,000 cars a day drive by Water Commons by way of South Robert Trail so the visibility is there day in day out.
The Other Redevelopment Area
There is also that other site in along South Robert Trail less than a block from Waterford Commons which is the former Genz Ryan building. Now that is a vacant eyesore. Now I’m all for redevelopment IF it makes sense. This would be one of them.
Last time I checked the purchase agreement that Kraus Anderson ran through April 30th of 2010 to get something done on it. There was plans but have since been nixed based on the current economic situation. Plans where for a senior living complex (since there are a few down the street in Evermoor that are struggling) and health clinic.
The city of applied for Met Council funds in the amount of $270k to demolish the building to make it more attractive for developers so they didn’t have to pay the money themselves. That has fallen through.
One of the biggest issues with the site is that it is so narrow. Someone would have to get creative with design and parking.
What’s Next
Hopefully the retail spaces in Waterford Commons has some long-term tenants that around for longer than a year like a lot of commercial real estate developments are seeing around the Twin Cities.
Then maybe it will sway the start of the other stalled redevelopment project.
Remember the former Ethan Allen building in Eagan off Yankee Doodle and Promenade? Neither do I seeing that I lived there for most of my life and never set foot in it.
I still can’t believe that it made it that long, which was around for 10 plus years. I rarely saw any cars in the parking lot. Prime retail spot in where 27,500 cars cars drive by on a daily basis.
The building has now been remodeled to fit six tenants in which there is 14,500 square feet of retail space available. For being a bad market for vacant space in the commercial real estate arena, this building is 100% leased before it even is delivered.
The tenant that I’m looking forward to the most is Smashburger. I’ve been waiting for this franchise to open an a spot south of the river ever since coming into the Twin Cities market about a year ago, they have been mainly on the north end of the metro.
If you haven’t tried them before, compare them to a Five Guys or In-N-Out. Don’t place them high on the “healthy things to eat” list.
The New Tenants
Smashburger
Sports Haircuts
Solo’s Pizza
Verizon Wireless
Pearle Vision
Panda’s Express
Anyone could be called a good anchor tenant except for maybe Sports Haircuts and I’m a little surprised by the Panda Express, I thought those where relative to mainly malls but it landed the end-cap space in the building.
That’s one happy landlord/developer to land such quality tenants in such a short period of time.
Nice, Fannie Mae just upped the ante in getting a mortgage. They announced a few days ago (late to the party but I’m busy) that they will include an incentive of up to 3.5% if a buyer uses the HomePath mortgage program. The monies can be used for closing costs and appliances.
If you’re unfamiliar with the HomePath mortgage program, here are the deets.
WASHINGTON, DC — Fannie Mae (FNM/NYSE) announced today that people purchasing a Fannie Mae-owned HomePath® property will receive up to 3.5 percent of the final sales price to be used toward closing cost assistance or their choice of appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010.
You can search for Fannie Mae HomePath specific properties on their website.
The flipper’s paradise has returned and is in full effect around the Twin Cities metro area. It appears that it is 2002-2006 all over again when it comes to “turn and burn” real estate for property flippers. Not only are the lower-end properties hard to grab, most buyers area finding themselves competing with wannabe seasoned real estate investors on cash deals looking for quick profits.
Quick basics of a flip is to buy low and sell high to maximize profit without putting in a lot of capital in out of pocket. Let’s all admit that all of us have at least glanced at one of the episodes on television about people making six figures in one deal.
A lot of distressed properties that are rehabbed don’t actually make the final grade in what a buyer is looking for. Most seem fake.
Most Flips Miss
All flips follow the same flow. Cut corners on the less noticeable (roof repairs, trim work, etc) and dump money into the eye catching features (kitchen appliance, granites, et al). Almost all flipper’s hate spending money on practical items.
Here’s a quick list of some characteristics to watch out for:
Kitchen Appliances: Most flippers have connections with local vendors offering ’scratch and dent’ appliances, watch out for noticeable damage. Even if
Vanilla in colors. All those training videos tell real estate investors to use neutral colors to appeal to the broader audience. The color of choice seems to always be light tan.
Consistency throughout the property is a problem. Mix-matching finishes like flooring, carpet, tile, cabinets (kitchen/bath). I think the reason is they ran out products to choose from on the discontinued rack. Cutting corners once again.
Cheap windows, these are used because either they where retro fit in the current opening or because someone broke in. Check how they slide, some might have been installed wrong and therefore brute strength is needed to open. Also, faulty installation can cause a mess with water intrusion.
The carpet is cheap. Sure it is brand new, but the quality is at the bottom of the scale. They use a upgraded pad to make it feel better than what it usually is. End result is the carpet wears a lot quicker.
Travertine and Brazilian cherry floors don’t solve everything.
Ever walked into a rehabbed house with staging? It doesn’t happen that often, but this usually means that they have done this thing before. Why? The real estate investor knows that a well staged house usually sells faster and draws eyes away from the real problems. Remember first time flippers are really trying to cut corners and typically don’t want to pay for home staging.
Fundamentals Need To Be Addressed
There is no joy in updating a roof, siding or simply upgrading the furnace along with the HVAC systems. This everybody knows, but fixes like these are often over missed and are small aesthetics for buyer’s.
Be on the lookout for the small things: caulking around bathroom fixtures, repaired cabinetry, trim (mitered corners, chips in the wood, dated), stain carpet cleaned but not replaced and other eye sores.
Moving walls or adding spaces can be much more functional as an end result. A lot of homes are older and not not kept up with today’s trends.
I’m no professional flipper, but I would like to think that I know what buyer’s want. Perhaps most flippers lose focus and only worry about the potential cash made from the property. A little time spent on the smaller things might create a quicker sale.
Be Cautious
Ask for disclosures. Property flippers don’t want to give these out. They will probably only issue a limited warranty for title meaning that they *only* know what they know from the time the property was first purchased.
True story and not uncommon, I was able to dig into one property for a client and found out there was mold prior to when the property was bought by the investor. It turns out they admitted to it being a small amount, but only to find out it was part of major cover-up. You see, all they have to say is there was mold, it has been taken care. The question is, how much mold damage?
Before pictures would be nice. If they just bought the property, odds are the buyer’s agent will have access to the prior listing photos giving you an idea of what the property looked like when the investor purchased it.
Just make sure to explore all due diligence, get an inspection.
Get Over The Shiny Objects
Seeing past the bright shiny objects is the key to spotting if flip has flopped. Make sure the property fits what you, the buyer is looking for. Just because the property has all the latest and greatest fixtures doesn’t mean that it is the best.
Find something that has value.
It’s hard to find a flip done right, most are simply half-assed.
