Quite a few people have been calling, emailing, Facebooking, instant messaging, tweeting and texting me with a million different variations of basically the same two questions. 1) I am a potential condo buyer, where can I buy the best deal in Nashville and 2) Which building(s) are the safest for condo investment?

General advice for condo buyers

Now is a great time to be a buyer, in fact, the next 12 months might be the best time in the history of Nashville to be a condo buyer. Obviously, there are traps one could fall into, but for the most part, the landscape is pretty clear cut. For instance, we know that there are now a finite number of condos that will exist in downtown Nashville for at least 5 years. Should our inventory absorption continue at the past 6 month's pace, it is reasonable to assume that a developer will begin building another condo project in downtown by 2015 (most likely in the Gulch).

We also know that several developers still have excess unsold inventory. The Icon and Velocity each have more than 200 unsold condos and 5th & Main has around115. The Terrazzo has right at 100 unsold condos and is hosting a 30 condo auction this coming Saturday. The West End is also planning on an auction to relieve excess inventory, selling 45 of their 70 unsold condos on December 5th. The Encore and Rhythm each have around 78 unsold condos and both are offering heavy discounts to move that inventory. Not to mention that Rolling Mill Hill has 72 units and sits idle in receivership with no condos listed on the MLS.

The rest of the Nashville condo story

Everyone knows the above information, but very few know the whole story. Which buildings are the best projects from an investment standpoint? Which projects have the possibility of going bankrupt? Which projects have the best pure deals with the lowest risk? These are all questions that I know the answers to because I know all of the players involved.

As an example: The Encore is 80% sold and closed out, leaving 78 unsold condos on the market. There is a pervasive rumor in the real estate community that Tony Giarratana is going to lose those 78 condos plus the 18,000 square feet of retail space in that building because his development partner, Novare Group out of Atlanta, is going to file for bankruptcy in the near future. It is also a consensus that $5 million of the original construction loan still exists as secured debt on the Encore project.

This sounds like a good theory, but I rate the Encore as the second safest place to buy a condoin downtown Nashville behind the Adelicia in Midtown. I also rate it as the best place for an investment minded buyer to purchase for 2 year appreciation. Obviously, I don't buy into the rumor that Giarratana is going to lose the building. What do I know that you guys don't know? Yes, Giarratana has loans coming due on several development sites including the Signature Tower site on 5th Ave and Church Street, but will that fact affect the Encore? If so, how will Encore be affected? Are the banking entities and financial partners all the same on all of the deals? The answer is that several partners are involved in several deals, but there is an angel among them who shall remain nameless on my website.

BTW - anyone notice the site work being done on the lot next door to the Encore and just behind the Pinnacle office tower? The Sobro Development Company owns about half of that city block, C B Ragland owns the rest with a small sliver still owned by Norma Crow. Three guesses who is a development partner is the Sobro Development Company? That's the easy part, now guess what they are clearing that land for (gravel top parking lot is not the end use). Hint - the Mayor's office, Governor's Office and CVB are all working behind the scenes to make this happen.

I digress. The point is that if you are a condo buyer, do your research, don't just buy a condo because someone tells you it's a good deal (especially the onsite agents who all work for the sellers, not you). Tour all of the buildings and create a spreadsheet that compares the prices, views, unsold inventory, retail and location in town. Be patient - do not walk into a development one day and write a contract on a condo the next day. Negotiate - figure out what else you can get other than a price concession. There are other items like closing costs, HOA forgiveness, appliances, storage units, parking spaces and property management fees that can all be throw-ins to get you the best possible deal.

Be mindful, but don't wait too long

I don't know about you, but I love the Oracle of Omaha and his everyman's sayings. Here's the one that you need to embrace at this very moment: "Be fearful when others are greedy, and be greedy when others are fearful." The deals are happening now while the developers are fearful of their construction lenders, but it does not take long for those developers (and banks) to regain confidence. Case in point, the Icon negotiated several sweetheart deals on downtown facing condos in the tower section of the building this past Spring, but as soon as they got to 60% sold out, the deals stopped that day. Now, if you want to negotiate a juicy deal in the Icon and want a downtown view, you have to settle for a condo in the mid-rise. The moral of this story is that there is a point at which the developers will hold onto their best inventory and if those condos are the ones you want the most, you better negotiate before they sell too many.

Of course, there are times when the opposite is true to. During the "sell out" phase of a development, typically the last 10%, you can normally wheel and deal your way all the way to the end on any of the condos. The downside is that last 10% of unsold condos are typically the least desirable floor plans and views.

Should I negotiate myself or use a real estate agent?

Working with a buying agent is not going to cost you a penny (condo sellers pay all commissions) and and buyer agent's advice will typically save you from making a mistake. The mistake could be in scheduling the punch walk too close to your closing date and not having a fully completed condo on the day you close. It could also be smaller, like forgetting to secure contents insurance. It could also be huge, like leaving $14,450 on the table during negotiations (sorry Mike). Always work with a real estate agent who knows this market and the dynamics that drive it. I am not saying that I am the only agent who ‘gets' it, but I am saying that the typical suburban agent does not. There are plenty of us who thrive on market knowledge, who own a copy of The Plan of Nashville, who attend community action meetings to learn about what might be coming or closing, who talk to the developers, banker and appraisers...and who have data based every single downtown condo closing from 2008 until now; well, maybe there aren't that many of us.

Contact me for a private consultation

There's a viral email circulating around that has been sent to me by a few of our associates who had received it from clients . . .

The "Freak-out factor" is off the charts because the bill in its original form was far from "user friendly" for real property owners.

Below is a copy of that email - The MYTH . . . and below that is - The MYTH BUSTING - a summary of what actually passed as well as a link to the National Association of REALTORS website where you can find more information:

"H.R.2454: "American Clean Energy and Security Act of 2009"

Beginning one year after enactment of H.R. 2454, you won't be able to sell your home unless you retrofit it to Comply with its energy and water efficiency standards. The "Cap & Trade" Bill, already passed by the House of Representatives and pending in the Senate, will be the largest tax increase ever. The Congressional Budget
Office estimates that the average cost to every family of four will be $6,800 per year. No one is excluded. Mr. And Mrs. Middleclass America will Pay even more since those with lower incomes can apply for a tax refund
(even if they pay no taxes at all) to offset this new cost.

Under the Act you won't be able to sell Your house without the permission of the EPA administrator. Yes, you read That right. Even if you have enough money to make the required upgrades to Your home, or if your income is low enough that the government subsidizes Your upgrades, you can sell it only if the EPA Administrator approves it. Even pre-fabricated homes are included.

To get this permission, you will have to Have the energy efficiency of your home measured. Then the government will Tell you what the new energy efficiency requirements are and you will be Forced to make modifications to your home under the retrofit provisions of This Act to comply with the new energy and water efficiency requirements. Then you will have to get your home measured again and get a license (called
A "label" in the Act) that must be posted on your property to show what your Efficiency rating is; sort of like the Energy Star Efficiency rating label on your refrigerator or air conditioner. If you Don't get a high enough rating, you can't sell. And, the EPA Administrator. Is authorized to raise the standards every year, even above the automatic Energy efficiency increases built into the Act.

The EPA administrator, appointed by the President, will run the Cap & Trade program (aka the "American Clean
Energy and Security Act of 2009") and is authorized to make any future Changes to the regulations and standards he alone determines to be in The government's best interest. Requirements are set low initially so the
Bill will pass Congress; but thereafter the Act requires that there be Annual increases in energy efficiency for private and commercial residences And buildings.

Sect. 202: Building Retrofit Program
Mandates a national retrofit program to increase the energy efficiency of All existing homes across America . The Act allows the government to give You a grant of several thousand dollars to comply with the retrofit program
Requirements if you will meet certain energy efficiency levels.. Who will Be eligible for these grants? The government will decide who qualifies to Receive the grants. As long as the Obama Administration is enforcing the
Act, you can expect such requirements as "can't have an income of more than $50K per year," or "home selling price can't be more than $125K," etc.

Sect.. 204: Building Energy Performance
Labeling Program requires that "at least 90 percent of the residential Market within 5 years after the date of the enactment of this Act" shall be Measured, rehabbed, remeasured and labeled with its energy efficiency
Performance. The EPA administrator will get $50M each year, and the Secretary of the Department of Energy will get an additional $20M each year, To enforce the labeling program. You will be required to post the label in
A conspicuous location in your home and will not be allowed to sell your Home without having this label. The government estimates the cost of Measuring the energy efficiency of your home should cost only $200 each
Time. [Note: When the California auto smog inspections first started, they Were to cost $15. Now they cost $50 and up for the inspection andCertificate.]

Sect. 304: Greater Energy Efficiency in
Building Codes establishes new energy efficiency guidelines for the National Building Code and mandates that 1 year after enactment of this Act, all State and local jurisdictions must adopt the National Building Code energy
Efficiency provisions or must obtain a certification from the federal Government that their state and/or local codes have been brought into full Compliance with the National Building Code energy efficiency standards.

MYTH BUSTING

Here's what actually happened:

The American Clean Energy and Security Act

The U.S. House of Representatives approved H.R. 2454, the American Clean Energy and Security Act by Reps. Waxman (D‐CA) and Markey (D‐MA). Following NAR’s long‐standing policy to only take a position on legislation, or provisions within legislation that have a direct affect on real estate, NAR worked with our Congressional allies to strip the Energy Bill of provisions that would have adversely affected our industry.

After multiple consultations with the NAR Climate Presidential Advisory Group, the NAR Land Use, Property Rights and Environment Committee, and state associations who had dealt with energy audit legislation at the state level, the Land Use, Property Rights and Environment Committee directed NAR staff to concentrate on the real estate provisions in the bill. As a result, NAR issued calls for action and made this a talking point for Capitol Hill visits during its recent Midyear meeting.

Overall, REALTORS® succeeded in making a number of positive changes affecting the real estate provisions of the bill. The House‐approved bill:

• Does not create a federal energy audit requirement for real property;
• Exempts existing homes and buildings from any federal guidelines for new construction energy efficiency information labels.
• Prohibits the implementation of any labeling during a sales transaction.
• Leaves the decision to states as to whether to require energy audits, disclosures, etc.
• Provides property owners with significant financial incentives, matching grants and tools to make property improvements and reduce their energy bills;
• Prohibits the Environmental Protection Agency from regulating residential and commercial buildings under the Clean Air Act;
• Eliminated an early proposal to allow citizens to sue over minor climate risks under the Clean Air Act; and
• Establishes green building incentives for HUD housing, including a loan program for renewable energy, block grants and credit for upgrades in mortgage underwriting.

Follow this link for other documents pertaining to this law.

http://www.realtor.org/government_affairs/gapublic/american_clean_energy_security_act?lid=ronav0019

My Point?

Don't believe everything you get in your email in-box.

SUPPORT The National Association of REALTORS Political Action Committee.

If you're a professional in the Real Estate industry, KNOW THIS STUFF so you can respond appropriately to people in your sphere of influence.

We're having enough fun as it is keeping up with the complexities of the market to have viral emails freaking out our clients, right?

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

Yesterday in our SPRINTS daily warm-up session we talked about Creating Buyer Urgency.

(We broadcast SPRINTS LIVE each morning 8:30-9:00 CST @ www.stickam.com/barryowen)

We know better than to think that we can create motivation, so our focus was on having found motivated Buyers how we can create some urgency to protect them from their own inaction.

If you're a motivated Buyer, and you are not BUYING because you're waiting for "better" ANYTHING (Pricing, rates, etc) You are playing a dangerous game.

We blew the dust off a few archived Gary Keller & Dave Jenks videos and found this golden nugget.

REALTOR to Buyer:

"If you buy a house today, I am willing to GUARANTEE that I will will buy it back from you in ten years at the same price. DEAL?"

The Buyer will say: "NO WAY!"

Why?

Because of the high probability that the house will be worth MORE in 10 years than today.

PLUS . . . Owning a home is an investment that you get to LIVE IN!

Additionally, consider the leveraging power of buying a house.

For relatively very little capital investment (Down-payment), home ownership offers potentially gargantuan gains in ROI over time.

With a taste of careful budgeting, most folks could actually pay OFF most (if not all) of a home mortgage in a 10 year period of time . . . THEN what do you have?

FORCED SAVINGS!

There you sit 10 years from now having made an initial 3.5% investment (FHA financing) - Let's say a $200,000 house = $7,000 . . . You get to live in it and pay your mortgage (You'd be paying to live somewhere anyway) . . . and it appreciates as real estate has historically appreciated over time @ 3% per year . . . and you're sitting on an ASSET worth @ $270,000.

Hmmm . . . Turning a $7,000 investment into $270,000 in 10 years.

Sounds like a great reason to buy a house NOW!

OBTW - That 3% annual appreciation is probably lower than reality when the market turns UP.

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!

The truth is that interest rates will rise before this chapter in the story of our economy ends.

It is also inevitable that when they do rise, they will rise QUICKLY!

Thus far, the Powers that be have effectively (artificially) been able to enable us all by keeping the rates low . . .

As Gary Keller said: "When the American public stopped spending, SOMEONE had to spend . . . so the Government has stepped in and has been doing the spending for us to keep the economy moving and hold off inflation."

The trick is that eventually even the government will have to decrease spending . . .

This comes to mind for me today as I remember that when I got into this business of selling houses in 1993, the interest rates were for the first time in YEARS just dipping below double digits . . . and there was veritable dancing in the streets.

From then until now, we have all enjoyed hilariously LOW interest rates and have reaped LOTS of rewards . . .

and we have been cruising along "borrowing Buyers from the future" and basking in our gluttony.

I think we are finally at the point where we are going to need teenagers to start buying houses because nearly 70% of all other humans in the USA now own houses . . . The pool of available Buyers HAS shrunk because we created such a "friendly" home buying experience.

So here's my message . . .

Don't let yourself stay in denial . . .

RATES WILL RISE!

and

When they rise, they will rise QUICKLY!

If you're alive and have the ability to buy a house, NOW is the time to do it . . . PERIOD!

And REALTORS . . . If you are not a die-hard believer in this and are not communicating this very real threat of rate increase to your sphere of influence, I recommend some level of therapy to pull yourself out of denial.

A YEAR AGO, Keller Williams Realty published a brochure entitled "What Are You Waiting For?"

Did you know that a 1% increase in rate results in @ an 11% DECREASE in Buying Power?

Here's how that looks:

When that brochure was created, rates were @ 6.04% (Today, they are significantly lower)

$218,900 Selling Price @ 6.04% . . . Payment = $1,054

Add a 1/2 point to the rate @ 6.54% and the selling price drops to $207,955 for the same payment.

Add another 1/2 point to 7.04% and the Buyer power decreases to $197,010 for the same payment

Just imagine what happens when the rates jump SEVERAL points in a relatively short period of time???

Get yourself out of denial and PAY ATTENTION to the probability of this happening.

How will this affect Home Buyers and Sellers?

What will we need to do differently to keep the market flowing?

These are the questions we need to be addressing NOW.

Oh yeah!

and it can't hurt to educate our potential Buyers a bit . . . If they are standing on the sidelines waiting for values to fall further, I believe it would tragic for them if interest rates ROSE while they were waiting.

I'm just sayin'

Best,

b

Barry Owen
Principal Real Estate Broker
Keller Williams Realty
30 Burton Hills Blvd Suite 175
Nashville, TN 37215 - Green Hills

Call me: 615-568-2123
Text me: http://www.mycricket.com/sendtextmessage/ 6155682123
email me: barryowen@kw.com
Visit The Owen Group http://www.theowengroup.net
http://www.owengroupnashvillehomes.com
Barry Owen's Internet Portal to all blogsites, websites, and social networks
http://tnrealestatetribalhub.wordpress.com/2009/06/02/barry-owens-web-portal/

Simply & BOLDLY Living the FourFold Way in Open Space!

Quintessentially connected to the real estate industry to offer the ultimate experience for Home Buyers and Sellers in Middle Tennessee . . . Inquire within!