November 27, 2008


As I mentioned the other day, my family is visiting Pasadena this week to see my son Chris, whose first “real job” with eSolar is here. I must say, despite the rain (yes, it can rain in southern California), it is one of the nicest small cities we have had the pleasure of touring. The streets are clean, the town is eminently walkable, there are beaucoup places to shop and eat, and of course the climate is absolutely seductive.

Real estate is in the same boat as in the northern Virginia area, but it will recover well, I believe. I continue to urge Chris to buy – perhaps after the first of the year – and take advantage of the current pricing and mortgage rates. If you happen to be looking in the Pasadena area, I can recommend Chris’s agent Irina Netchaev and her website Pasadena Views.

Go Jackets!

November 21, 2008

ramblinwreckThis coming week I will be visiting Pasadena with my family. The Pasadena resident member, Chris, is a proud Georgia Tech graduate. While he is indeed a helluva engineer, one of the reasons he chose to go to Georgia Tech was because of the athletic tradition of the school, which despite its relatively small undergraduate student body (e.g. half the undergrads of U of Georgia, Virginia Tech, U of Maryland, Florida State), is an extremely storied one.

On the Saturday after Thanksgiving, GT and UGa play their annual grudge match. Going into the contest this year, GT is 8-3 and sitting precariously atop its division, with a chance to reach the ACC title game. Georgia is 9-2 but out of contention for the SEC title. For GT to win its division, on the 22nd Clemson must beat UVA and NC State must beat UNC; then UVA needs to beat Virginia Tech the next week. Pretty convoluted.

UPDATE 11/22:  Clemson beat UVa and NC State beat UNC! If Virginia Tech loses either this week to Duke or next week to UVa, GT is in the conference championship game!

But it all won’t matter if GT beats UGa. We’ll be home by then so Chris will probably be watching at his favorite watering hole, provided the game is telecast on the Left Coast.


I’m a Ramblin’ Wreck from Georgia Tech and a hell of an engineer,
A helluva, helluva, helluva, helluva, hell of an engineer,
Like all the jolly good fellows, I drink my whiskey clear,
I’m a Ramblin’ Wreck from Georgia Tech and a hell of an engineer.
Oh, if I had a daughter, sir, I’d dress her in White and Gold,
And put her on the campus, to cheer the brave and bold.
But if I had a son, sir, I’ll tell you what he’d do.
He would yell, “To Hell with Georgia,” like his daddy used to do.
Oh, I wish I had a barrel of rum and sugar three thousand pounds,
A college bell to put it in and a clapper to stir it around.
I’d drink to all good fellows who come from far and near.
I’m a ramblin’, gamblin’, hell of an engineer.

Go Jackets!

Want To Buy A Home, But Can’t Afford To Fix It Up?

November 21, 2008

I hear this a lot:


“I’d like to buy a foreclosure because I can get a great deal, but almost every one I see looks like crap – dirty carpet, missing or broken appliances, lots of cosmetic repair work – and I don’t have much cash after the down payment, so how am I supposed to fix all this stuff?”

It’s certainly true that in looking for a great deal on a foreclosure, you are going to encounter a lot of homes that have not been cared for very well. As you can imagine, when folks can’t make their mortgage payments, they have little money or incentive to maintain the property as well as they otherwise might. If you do manage to come across a foreclosure in good condition, you can be sure it will sell quickly, and the buyer will pay close to market price. Not the great deal you were looking for, right?

home-improveFHA has a loan program that is designed precisely for this situation, and makes it as easy as possible to get qualified and get the repairs done. The loan program is called the FHA 203k Streamline program and it allows homeowners to finance improvements costing up to $35,000 into the original mortgage. (For those homes that need major rehabilitation, there is also a full FHA 203k loan which will allow more than $35,000 worth of rehabilitation work to be done, but is much more complex. This post covers only the “Streamline 203k” – for more info on the “full 203k” see here.)

Because the 203k Streamline is an FHA program, all standard FHA guidelines apply when qualifying for the loan – low down payment, etc.

The maximum Streamline 203k mortgage amount is the lesser of:

  • The maximum (statutory) mortgage limit for area
 (Northern Virginia is $625,500 for 2009).
  • The “As is” value (usually the purchase price or outstanding debt in case of a 
refinance transaction) plus cost of rehabilitation
  • 110% of “After Improved” value; Condominiums are limited to 100% of “After Improved” value.
  • If the borrower has owned the property for less than one year, the acquisition cost is the maximum.What improvements are eligible under the new Streamlined (k) program?

The Streamline 203k program is for uncomplicated improvements to a home for which plans, consultants, engineers and/or architects are not required. It includes the improvements shown below:

  • Repair/Replacement of roofs, gutters and downspouts 
  • Repair/Replacement/Upgrade of existing HVAC systems 
  • Repair/Replacement/Upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring 
  • Minor remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior 
  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens 
  • Accessibility improvements for persons with disabilities 
  • Lead-based paint stabilization or abatement of lead-based paint hazards 
  • Repair/Replace/Add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement

That’s an extensive list of the sorts of things that need doing on most foreclosures. What properties are not eligible?  If they require the following sorts of work, you’ll have to use the “full” 203K:

  • Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall; 
  • New construction (including room additions);
  • Repair of structural damage; 
  • Repairs requiring detailed drawings or architectural exhibits; 
  • Landscaping or similar site amenity improvements;
  • Any repair or improvement requiring a work schedule longer than six (6) months; or
  • Rehabilitation activities that require more than two (2) payments per specialized contractor.

Under the 203k Streamline guidelines, you must use contractors to complete the work unless you can provide documented proof that you can perform the work yourself (for example, if you are a licensed plumber or electrician) and the lender will verify your contractors’ credentials in the loan process. The contractor will also have to provide licensing, bonding and insurance documents and professional estimates. However, for the 203k Streamline program a general contractor is not required, so you can line up your contractors yourself.

Once the loan is approved and closed, the repair funds are held in escrow until payment is made to the contractors. You will have up to 3 months from your closing date to complete the work and no more than 2 payments (first payment and final payment) may be paid to each contractors. The first payment is limited to a maximum of 50% of the total cost, and all payments are disbursed to the contractor unless you are performing the work. In that case you have to provide receipts for materials and of course your labor is “free.”

For more information, you should speak with an FHA-approved mortgage professional. I can recommend a couple of good ones if you like!

What Caused The Problems?

November 20, 2008

Here’s a little video that gives one reason:

But it’s only one reason, and maybe not the main one. The greed of certain mortgage brokers could only have had this impact if the greed (and in some cases ignorance) of everyone else involved in those transactions was not also at work.

Monty Python Channel Comes To YouTube

November 19, 2008

Unbelievably, the Pythons have agreed to post everything in their own YouTube channel (watch the announcement video):

For closet Python geeks like me, this is a tremendous boon. However, for the business of real estate (as well as the businesses of home maintenance, cat care, and whatever-else-have-you), it will be a tremendous loss of daily production.

Thomas Jefferson High School for Science and Tech – We Came for the Yuks

November 18, 2008

examanswer1Thomas Jefferson High School for Science and Technology – TJHSST – is arguably the preeminent magnet high school in the United States. Two of my kids graduated from TJ and I spent a lot of time there over a seven-year period.

TJBash is a “quote repository” containing (PG-rated) quotes by TJHSST students, alumni, and faculty mostly relating to humorous personal experiences occurring in class, such as:

// During “Word of the Day” in English

Erin: My word is “masticate”, which means to chew. I picked it because I like the way it sounds.

Ms. Bello: Does anyone want to use the word in a sentence?

Erin: I masticate every day.

Tim: I masticate 3 or 4 times per day. I even masticate with my friends.

Bello: Good job, guys.

Tim: Would you like to masticate with me, Logan?

Logan: *laughing too hard to answer*

Erin: Do you think you masticate too much, Tim?

Tim: There’s no such thing as too much mastication.


//In Chemistry, Dr. Acio is explaining variably charged metal ions

Dr. Acio: Tin (II) is called stannous, tin (III) is called stannic. Don’t do what one kid did and say it’s “satanic chloride.” It ain’t satanic, it’s stannic.
A: *mutters* No, there’s only one satanic thing in this room and it writes tests.

How To Get Out Of Debt . . .

November 14, 2008

I saw this one at a business planning seminar this week.

Vodpod videos no longer available.

I was an original fan of SNL but lately my body clock has been in a different time zone . . .