With financing hitting one of it's hardest times smaller builders have found themselves over leveraged and holding too many properties.  Some have turned these into rental properties, some have given up and are losing the half completed homes to the bank and yet others are buying all the homes they can.

Where did the big guys go?  Half completed developments surround us, final plat approvals suddenly are taking longer than expected.  Those on short plat schedules are dragging their feet so they aren't forced to close.  So what's the story.

The real story is this.......timing.  Why would you close now or in the near future when financing is tougher than usual?  Why would you close now just to flood the market with more lots?

Most developers are holding tight so that they can get the original owners to carry the cost of holding the property through the hard times.  Can you blame them?  The overwhelming inventory is slowly going to be taken and they will be seeing better times......or so they believe.

What do you think?

On to the other item I mentioned - the developers who are buying.  They are seeing incredible deals on short sales as banks are unwilling to take over half completed projects and know they can't sell these to consumers due to financing issues.  Developers are buying at 50% - 60% of value, finishing the product and relaying some of the savings on to home owners.

Crazy market, great times and the time to make a deal.....oh and if you know of someone that fits these scenarios let me know, I may have a solution for you!!!

Once again the growth management act has created headaches for the retail industry especially large end users in need of general commercial zoning or similar.  Due to the state legislation of the growth management act many parcels have changed zoning to include high density corridor designations or mixed use densities.  This has created the residential over retail design as well as the need for "mixed use" conferences and meetings from the international council of shopping centers.

Don't get me wrong, the higher density does help us maintain our rural lands and preserve the lands in a much more natural way.  Although my question is "Have they weighed the cost?"

With many retailers struggling in today's economy we are finding the need to buy items in bulk, using outlet centers and buying as many off-brand items as possible.  Several of those retailers such as Costco, Winco Foods and even Home Depot are recognizing these needs although they are unable to find sites due to difficult zoning codes and uncooperative jurisdictions.

Safeway took advantage of their current locations and the mixed use changes by revamping their entire interior, creating an experience while shopping by inserting Starbucks, Jamba Juice and other similar retailers.  This change to a "boutique" grocer was a great move by Safeway as they are already located in established high density areas.  New retailers to these areas are finding that they must move outside the hub to stay within budget while finding a site large enough for their stores.

New store plans have slowed for most retailers during the last few months although the bulk foods market has grown.  Will they locate near you soon?  Doubtful if you live in a higher density area - currently many of my clients that are in this arena are looking for sites 5 -10 miles outside of the hub but along highly traveled roads to try and pull those from the hub to them.  It's an interesting problem to have in the land of what's left.

Let me know your thoughts - by the way if you happen to know of 10-18 acres that are zoned general commercial on a heavily traveled road, let me know I'm always happy to pay referral fees.

Well for the last three years I had lived in a 1200 SF home, one of my real estate agent friends took a picture of my house and placed it in a Homes and Land Catalog hoping to drum up more calls due to the attractiveness of our neighborhood and home.  Well, immediately homes and land placed our home in Zillow, however when inputting the Square Footage they misplaced a few numbers and we were left with 115 SF.  Now my house value has plummeted on Zillow as well as a few of my neighbors, it has thrown off the "comps" as well and also created quite a few phone calls.

I am a commercial real estate agent and after inserting three listings about 3 months ago, I am unable to remove them.  I have placed them as sold, no longer for sale and every other conceivable status update and they cannot be removed, although I receive plenty of emails letting me know that I have been fired as the agent for these properties.

Please update your system and don't allow catalogs to automatically insert data over the top of homeowner data.  You are only ruining your own credibility.  I will also be emailing this to the folks at activerain that are from Zillow.

This is a copy of the post I left for Zillow after having several difficulties with their system.  Here is the response I received.

"We are sorry for your difficulty, we rely on several real estate magazines for our data and find them more reliable than homeowners data."

AMAZING!!!

Okay well things have changed a bit since last posting an update on my active listings so I want to make sure I put as much information in here as I possibly can.

2225 Cooper Pt. Rd - Total of 12.75 acres with 5.3 acres developable.  Difficult jurisdiction and setbacks on the site make it a bit challenging however the 75,000 cars per day and Hwy interchange visibility in the most prominent location in Olympia make this a great opportunity.  $3.5M

0 Sawall Ave - 300 acres for residential use.  14 seperate tax parcels, 11 of which have septic approvals.  The other 3 tax parcels can be split even further into up to 12.  All 23 of these lots are near City of Centralia services and will allow for territorial views.  Call for pricing.

2221 93rd Ave SE - Approximately 39.1 acres just outside City of Tumwater ready for residential lot development.  $1.2M - City services less than 1000' away.

Is there anyone out there that can help me with financing.  We are having extreme trouble finding financing for a fantastic McMansion that my clients just can't live without.

Please help us figure out how to put this package together.  I can tell you it won't be easy but I think if we can find a way we might find the secret to affordable housing!!!

Too many projects, very motivated and will consider all offers. Total of approximately 300 acres, currently split into 14 tax parcels. 240 acres zoned 1 per 20 acres and the remaining 60 is 1 per 5. Septic approvals in place for 11 of the parcels with the remaining 3 being transferred into the 1 per 5 zone. Roads are roughed in, have estimates to complete the project. City Services and City Limits less than 1000` feet from the site.  Amazing territorial views from top 11 lots, bottom 60 acres has received cluster approval from the city.  Annexation within next few years extremely likely.

Currently priced at $1,800,000 - motivated owner

Ryan Haddock

www.soundadvisors.net

Due to the state of the market I think it would be safe to say that many of us have evaluated our current status as realtors.  I've spoken to veterans, newer agents and those working around the market and all of them have been dissatisfied with one or more aspects of their current status.

Hey ME TOO!!!  All that being said it has caused me to reframe my thoughts on brokerage, development and just plain sales.  The best news is that it has created more motivation for me now then ever before.  I'm so excited about the possibilities that are opening up that sometimes I feel like a kid in a candy store.

The national news is horrible and has been, that's not news, but the good news is that it is not as bad as everyone thinks.  I got a call today from a major home builder who wants to renew our communication lines as they anticipate acquisitions in the upcoming month or two.  I have 12 people who are currently looking for commercial properties throughout the area.  I work with one retailer who is aggressively expanding in the market and looking to take advantage of the softened prices and lower construction costs than 1 year ago.

The rebound has started.....how long until you realize it?  Will you still be around?  I know I will. 

Ryan Haddock

www.soundadvisors.net

Due to the flooding  throughout Washington State, the IRS has updated their 1031 exchange deadlines for qualified candidates.

Please see the information on the IRS website for more information, here is a portion of those affected by the flooding in Washington.  Other areas also are candidates for this delay including Oregon, and areas in California affected by the wildfires.

Here are the details for the disaster area in Washington. 

FROM IRS WEBSITE - 

The disaster area consists of Grays Harbor and Lewis counties.

Deadlines for affected taxpayers to file returns, pay taxes and perform other time-sensitive acts falling on or after Dec. 1, 2007, and on or before Feb. 6, 2008, have been postponed to Feb. 6, 2008.

In addition, the IRS will waive the failure to deposit penalty for employment and excise deposits due on or after Dec. 1, 2007, and on or before Dec. 17, 2007, as long as the deposits are made by Dec. 17, 2007.

If any affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply during the period from Dec. 1, 2007, to Feb. 6, 2008 -- Dec. 1, 2007, to Dec. 17, 2007, for failure to deposit penalties. No penalty or interest will be abated for taxpayers that do not have an original or extended filing, payment or deposit due date, including an extended filing or payment due date, during this period.

IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Taxpayers within the covered disaster area do not need to self-identify by writing on their returns or using the disaster designation in their tax software.

Affected taxpayers who reside or have a business located outside the covered disaster area are required to call the IRS disaster hotline at 1-866-562-5227 to self-identify for disaster relief.

Covered Disaster Area

The counties listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose books, records, or tax professionals' offices are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area are eligible for relief.

Grant of Relief

Under sections 6081, 6161, and 7508A, the IRS gives affected taxpayers until Feb. 6, 2008, to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns), or to make tax payments, including estimated tax payments, that have either an original or extended due date falling on or after Dec. 1, 2007, and on or before Feb. 6, 2008. For original filing due dates falling during this period, the relief is provided under section 6081 and if additional time to file is needed beyond Feb. 6, 2008, an affected taxpayer may file the appropriate extension request to obtain the remainder of the 6-month period provided by section 6081. For extended filing due dates falling during this period where the full six-month extension period has been used, relief is provided under section 7508A. In such a case, no additional time to file is available after Feb. 6, 2008.

The IRS also gives affected taxpayers until Feb. 6, 2008, to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007), that are due to be performed on or after Dec. 1, 2007, and on or before Feb. 6, 2008. This relief also includes the filing of Form 5500 series returns, in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098, 1099 or 5498 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise deposits, due on or after Dec. 1, 2007, and on or before Dec. 17, 2007, provided the taxpayer made these deposits by Dec. 17, 2007.

Casualty Losses

Affected taxpayers in a presidentially declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year's return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements, but they must first subtract $100 for each casualty event and then subtract ten percent of their adjusted gross income from their total casualty losses for the year. For details on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts.

Affected taxpayers claiming the disaster loss on last year's return should put the Disaster Designation "Washington Severe Storms/Flooding" at the top of the form so that the IRS can expedite the processing of the refund.

Other Relief

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers who need them to apply for benefits or to file amended returns claiming casualty losses. Such taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.

Taxpayers may download forms and publications from this Web site, or order by calling 1-800-TAX-FORM (1-800-829-3676). The IRS toll-free number for general tax questions is 1-800-829-1040. 

www.soundadvisors.net

Ryan Haddock

As we move to a more litigious society and people are suing everyone for anything does it hurt to take some precautions?  Of course everyone agrees the answer to this is NO, of course not.  We will mitigate our risk however we can if it doesn't cost alot of money.

As investors to multifamily or commercial properties you could be opening yourself up to a whole host of issues depending on how you take title.  Obviously as agents we are not lawyers and must not try to act as such, but wouldn't we be neglect in our duties if we didn't at least explain some examples to our clients?

There are many issues that can arise with respect to how you take title to property, and especially so in a commercial context. If you take title as an individual, you may be exposing yourself to potential liability exposure that you might want to try to avoid or at least minimize. You take title through a business corporation, but doing this could be disaster from a tax standpoint point. Sometimes, there may be other alternatives such as forming a limited liability company that you would own and control that, in turn, could lease the property to your business entity.

If joint ownership is involved, you should clearly understand the differences between taking title as joint tenants, as tenants in common, as a partnership, or as community property. You should also clearly understand your rights versus the rights of your co-owners. Each and all of these types of ownership have significant ownership implications and rights of survivorship.

It short, there are no universal rules of thumb with respect to how to take title. It's always advisable to seek professional advice, including your lawyer and CPA, to assist you in making a smart decision, but it is extremely important that you are aware of these implications and are informed.

Often I am asked about how my job as a COMMERCIAL agent differs from associates in the residential world of real estate.  Generally speaking they don't mean the lending structures, the business aspect and/or any of the nitty gritty details of each deal.  People want to know, what do I do differently in my day versus my counterparts.

I can tell you the single largest difference is my job is not only that I work business hours like a banker but that my job is BLACK and WHITE.  Completely, honestly in many ways my job is easier although I have to wait longer for paydays.  When I present a business opportunity to a client they really could careless about the state of the building, the question is "Do the numbers make sense?"

"Yes."

"Then we got a deal."

I envy my counterparts as they often have to deal with the emotional side of real estate.....in commercial we deal with property owners and clients that usually have done this before, many times over and sometimes more than we have.  In residential you have first time buyers, sellers who are attached to their home and take every offer, counteroffer as insulting and personal.

In residential you have to manage expectations and emotions on a much greater scale than the commercial market and for that the residential agents have a much harder job than I.

Congratulations to Residential Agents for doing one of the hardest jobs in the world in one of the worst markets we've seen in sometime.  Keep being positive and keep working hard, some people will recognize it.  I know I do.

Thank you.

Ryan Haddock

www.soundadvisors.net