Tiny House Movement

The tiny house movement, it makes sense, yet I don’t know that I would follow.  It takes simplifying your life to a new level.  Only having room for the things you truly need.  (I personally need a little more air conditioned space to breathe than these people, but all the power to them.) 

The tiny house movement is an extension of the green movement.  It shines a spot light on those who have such large homes that it is a waste of space, energy, and resources in general.  There is no reason for a 20,000 square foot home unless it is housing half a small village.  For instance, the house featured in the popular TV show Revenge, highlights the complete waste of really everything you can think of.  I am not a socialist by any means, but isn't this a little excessive?  Wouldn't those resources be better used somewhere else?  If they opened up an orphanage in it that may do good for their conscious. 

The tiny home movement is definitely not for everyone.  However, it epitomizes the ideal of simplistic living and proves that there is nothing wrong with living in a small house.  They can be nice too.

Where I would Invest

If I were to invest this summer I would invest in the inner loop of Houston.  More particularly I would invest in a residential single family detached property in the Montrose, Midtown, Rice, or Heights area.  These are young, hip areas where people are willing to take on roommates and pay high rent to live close to work.  Looking at market trends these areas are booming and by putting down a reasonable down payment (assuming I had the money) and renting the property out, all expenses would be covered.  There is definitely a high demand for housing in the area.  These inner city neighborhoods have become increasingly popular with the rising gas prices, terrible traffic and booming economy of Houston.  I know that I am willing to pay a lot in rent in order to live close to my work.  Aside from 2009, right after the housing market crash, property values have increased significantly in these areas and apartment values trends show increases across the board.  Aside from the income from rent covering all costs, in 30 years you will be able to turn around and sell the property for 2 if not 3 times what you paid for it. This link, Neighborhood Information Finder, provides a graph showing how property value has increased in Montrose through the years.

The Houston property values (especially inner city) have historically increased.  For example, though this is technically not Houston, my grandfather bought a house in Bellaire for $80,000 in the 70’s and turned around and sold it for $600,000 in the 90’s.  The value of location is everything, and living near your work is such a contribution to quality of life that we can count on inner city property residential property to continue to grow in value. 

Foreclosure

Burt Reynolds is facing foreclosure on his 4-acre waterfront Florida estate.  He owes $1.2 million to Merrill Lynch Credit Corp. and has not made a mortgage payment since September 1, 2010.  A second mortgage of $750,000 held by BankAtlantic is also outstanding.  This is a judicial foreclosure.  Merrill Lynch filed the foreclosure lawsuit on August 9^th with evidence of the back payments.  In 2009 Reynolds put his home on the market for $8.9 million but has had no takers, which isn't terribly surprising considering it is valued between $4 million and $2.4 million.  Apparently the home itself is falling apart and the value in the property is the land it sits on.

            The house was originally purchased in 1994, and a 25 year mortgage of $1.5 million was taken out on it.  Then in 1996 Reynolds filed for Chapter 11 bankruptcy for the first time.  He had made bad investments and had a messy/costly divorce.  So why was his house not repossessed at that point?  He has also recently sold his Los Angeles glass house to Vera Wang for $10 million.  So this begs the question, why not pay off the house with the money from the Los Angeles home?  Life styles of the rich and famous I suppose.  The actor has seen hard times lately with a series of medical issues and little work, but it is definitely his excessive spending that has led him to this place.

ABC News

Business Insider

Corpus Christi

I am from Corpus Christi, TX.  It is a beautiful city that is surounded by water,  with the bay of Corpus Christi on the east side, the Laguna Madre in the middle and of course there is the beach.  It has an older population, though times are changing with the growth Corpus Christi A&M has brought it.  The population is some 300,000 and has grown about 10% since 2000.  The two prominent racial demographics are (60%) hispanic and (33.3%) anglo.  There are many different sub-cultures around Corpus, the military and defense base workers, the hispanic community, the oil field and its workers, the cowboys, and the surfers and beachgoers.  It is a day time city, there is an abundance of things to do during the day, yet the night life is nonexistant.  Corpus has the 5^th largest port in the United States and the economy is largely made up of service jobs, government jobs, oilfield jobs, wholesale and retail jobs (tourism is a big driver).  It was certainly a fun city to grow up in, yet I am not planning to head back immediately.  There is a low unemployment rate there, yet it is far from the economy and booming job market in Houston.

There are two main areas in Corpus that get mistaken for separate municipalities, Flour Bluff and Calallen.  I am from Flour Bluff and the running joke is Flour Bluff, America.  There is also Padre Island were all of the fun happens, at least in my opinion.  On one side of the island you have the Laguna Madre where boating and fishing are big and in the last 10 years Packery Channel has opened up.  It has made the Laguna a far more pleasant place (more water flow, less stagnent) and that leads us to the beach.  The beach is Corpus’s main draw in my opinion.  It is 100x better than Galveston (not quite the party scene of South Padre though).  Schliterbahn has recently announced that they are moving to town and that will be on the island as well.  Our claim to fame is Selena.  In my opinion Corpus Christi is the most beautiful city in Texas, it is just so far from everything that it is forgotten

Guest Lecturers

On January 28^th my real estate finance class had two guest lecturers.  One was Dr. Harrison, a fourth generation aggie, who inhereted a large piece of land in Boonville City, Texas.  His great grandfather had won the piece of land in a poker game.  Lucky guy.  And now it is being developed and sold for millions by his grandson, and even luckier guy.  The second lecturer was Mr. Gentry who is Dr. Harrison’s lawyer. 

Prior to the development process Dr. Harrison had a tax exemption on the property, only paying $148 in taxes a year.  This is how he talked the city into building a road on the land.  The city wants the land developed because it is loosing out on a lot of money from taxes due to the large plot of land that has the ag exemption on it.  So the city of Boonville spent 1.8 million to build a road on the property, though the back piece of land still has ag exemtion on it.  When Dr. Harrison started to develop the land the first problem was that it may have been a cemetary for freed slaves after the Civil War, this is where you may first see the need to have a lawyer by your side when developing a piece of property.  Holes were dug in search of bodies and when they didn’t find any the development process began.  Dr. Harrison struck a deal with a hotel and then problem number two arrose.  Exxon had a pipeline running across the property that had been moved at one point, and of course when they moved the pipeline, hazardous material was spilled.  This was a costly problem when the hotel that was being built on the land found the spilled oil. 

It is interesting to me how intertwined Texdot is with the development process.  I always thought that developing land was as simple as building on it, but you have to have permission for everything!  I also thought it was interesting to hear Dr. Harrison talk about who would buy the corner lot.  At first he told us that Buc ee’s had approached him and asked him to donate the lot, because they would increase the value of all the surrounding land.  The class was so excited because the guy who started Buc ee’s is an aggie and Buc ee’s is awesome.  Then he told us that he instead went to their main rivals, and sold them the land.  Laughing he said business is business.

Private & Public Restrictions on Real Estate

Private restrictions on real estate include covenants, conditions, and restrictions (CC&Rs); liens; easements; profit a prendre; adverse possession; and encroachments. CC&Rs are restrictions on how property owners can use their land. For instance a homeowners association in a neighborhood may have a no cars left out on the street overnight policy. Or homes built may have to meet certain criteria, for instance the color may have to be approved, or the garage may have to be in the back yard/ further back from the face of the house. A lien is a claim on a piece of property used to fulfill an obligation or to serve as collateral on debt. An easement is a right given to access the property by the landowner. For instance utility companies may need to access a power line in your back yard so you allow them to walk through. A profit a prendre is an interest in real property that allows one to remove things from the land, like cattle, soil, or produce. Adverse Possession is when an individual who has openly possessed the land for a long amount of time without actually owning the land aquires the title to the land. An encroachment is typically the result of carelessness when a fence line is built over your property line, etc.
An example of an easement would be the Corpus Christi Seawall.  The state of Texas has a public easement of 200 feet along all Texas Beaches.  The depleting beach front over the years has left the private seawall within that boundary.  It was brought to the state and any further plans to expand the seawall were put to rest, but the existing seawall remains private.  This Caller Times article explains further, as well as some alternative land restrictions faced on the beaches of Corpus Christi. http://www.caller.com/news/2008/apr/20/seawall-divides-city/?print=1

Public restrictions on real estate are when the government creates limitations on real estate like taxation, eminent domain, police power and escheat. 
An example of when eminent domain was used was for the expansion of the 610 Loop in Houston. The Texas Department of Transportation bought some 73.4 acres along the West Loop for expansion.  The article explains further. http://realtynewsreport.com/2012/05/14/deal-sikes-unprecedented-eminent-domain-play-in-nw-houston/

 

Most Fascinating Piece of Real Estate

The Most Fascinating Piece of Real Estate:

In my opinion, the most fascinating piece of real estate is the land owned by the Four Seasons in Punta de Mita.  In 1999 the Four Seasons Resort was opened but they first had to completely relocate the tiny Mexican village that used to sit at the end of the peninsula with the Bay of Banderas on one side and the Pacific Ocean on the other.  The village was picked up and moved to the northern end of the Bay of Banderas which is where my family owns a condominium.  And though I love being in the small village bordering the Four Seasons the real estate at the peak of the peninsula is timeless. 

The resort is surrounded by countless surf breaks, amazing fishing, snorkelling, whale watching, and
if you can tear your eyes away from the water you will see the Nayarit Jungle and mountainous terrain which makes for fun zip lining!  During the winter Hump Back whales migrate to the Bay to have their babies which can be an amazing spectacle from the shore or by boat.  The Four Seasons has developed the land into Golf Courses, Luxury Hotels, and Villas which are world class.  However, it is the land itself that is so fascinating to me. 

There are records of 6 different cultures living along the peninsula dating all the way back to 300 BC, so it has obviously been a prime piece of Real Estate for quite some time.  LOCATION, LOCATION, LOCATION.  There is just something special about having a calm, nurturing bay on one side and the untamed Pacific on the other that makes this peninsula prime real estate.
This picture is from the La Punta Realty Blog Boats Picture Golf Course Picture Whale Picture