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Name:	Feb -	Reply
Subject:	Hey HTMLman
Date:	4/5/2007 7:42:36 PM

Another Forum member just reminded me of the post you made last June. Is the same 40 acres you mentioned just below in your post the same 40 acres you stated you owned back in June 06?

Name:	MotorMan -	Reply
Subject:	Hey HTMLman
Date:	4/5/2007 8:19:21 PM

After doing a search, I think HTMLman was using the same "friend" that little boys blame when their mothers blame them on the missing cake when they have a brown smile.

More than one guy knows a litle html. I bookmarked his site when it was open and hacked into the map. It only took two tries. Some file names are so easy.

By the way, never name a file "passwords".or "credit cards" If anyone hacks into your computer, it is the first file name they try.

I used WHOIS to find the owner of the site. It is a man in Waukesha, Wisconsin.

URL: link to map

Name:	au67 -	Reply
Subject:	Feb and MotorMan
Date:	4/5/2007 9:29:46 PM

His exact post was "I bought a long time ago so I won't say what I paid. I am going to sell my forty acres. Its on a small slough with summer water. I wonder what it's worth?"

Here we are nine months later and the forum is being asked to appraise another 40 acres. Coincidence?

I'll pass commenting on Andy's self portrait.

Name:	Osms -	Reply
Subject:	Hey HTMLman
Date:	4/5/2007 9:34:41 PM

Where is this property? Mapquest has never heard of Stillwoods Drive in Dadeville or Alex City

Name:	au67 -	Reply
Subject:	Osms
Date:	4/5/2007 9:47:06 PM

Take County Road 34 east, turn right on Cricket Road and then right on Stillwoods Drive. When it deadends, I think you are there.

Name:	au67 -	Reply
Subject:	Osms
Date:	4/5/2007 9:48:15 PM

Sorry, I should have said west on 34.

Name:	Pier Pressure -	Reply
Subject:	Feb and MotorMan
Date:	4/5/2007 11:14:26 PM

Man, can't let anything slip past you guys. Please do not hack my site :-)

Name:	Osms -	Reply
Subject:	au67--Thanks
Date:	4/5/2007 11:21:50 PM

I know exactly where it is. The waterfront is next to two APCo lots that were leased about 4 years ago and now have two nice houses on them. Built as specs by three guys from Auburn. That far back in the slough makes that 'waterfront' about as attractive as The Cascades ditch front.

Name:	MotorMan -	Reply
Subject:	comments on prices
Date:	4/6/2007 6:41:11 AM

I looked at the middle house in the three when it was for sale. $285,000 plus a $395/month APC lease. There was a lengthy explanation on why leasing could save you money vs. buying at $325,000 for lot only.

For conventional financing, a house must be 3x the land value. Some will go with 2.5x Now this was 20 years ago when I did a lot of sales. It may have changed. It is best to put up a house of 10x the land cost. Otherwise, it becomes a tear down too quickly. More than 10x means you are overbuilding for the neighborhood.

I guess no one "bought:" the sales pitch. It assumed a static land price if I recall. The builder still has it. It appears if you park a golf cart on your new concrete for the summer, it leaves a rust stain on the concrete. The price is correct, but I may be off on the APC lease price. I was lured in by the asking price but stopped paying attention when I did the APC math.

I passed a for sale sign on Lovelady road.; 86 acres; a mile off road, still for sale after over a year at ~ $210,000.. It is about five miles south of the Lake. No power, cable etc.

My high school buddy Ron bought a 3200 sq foot house in Los Banos (the toilet) CA. a few years ago He wanted $610,000 for it early this year. Prices began to fall. He lowered to $599,000. I urged to sell more quickly. He lowered again and got a sale. I checked today and a 3316 sq foot house on the same sized 0.16 acres is listed at $511,000. He got out just in time. I saw the tour. 0.16 is way less than you think because of monster front setback rules. They have room for a 20 foot deep back yard.

In 1973 Ron bought a lot for $3000 and put up a $30,000 house. This was a good thing .on a land to improvements ratio. Sold it in 1987 for $88,000 when lots were $18,000. House to land then down to 5x by then

And we complain about Lake prices. What suckers. I recognized the interior doors. Same cheap ones I saw at Spencer lumber. Not granite counter tops or other upgrades.

URL: Los Banos, CA

Name:	MotorMan -	Reply
Subject:	Sorry. dead link.
Date:	4/6/2007 6:52:46 AM

To see it go to link choose "los Banos, ca, 500,000 to 550,000, single family.

They want to keep records of searches, I guess,

URL: link

Name:	Feb -	Reply
Subject:	Hey MotorMan
Date:	4/6/2007 8:22:41 AM

This is a question or a lead to a discussion. Please do not take it as argumentative. I might just learn something here.

I read your rules of tumb and was curious. If a Lake lot is valued at $200,000, then your point is for finance purposes, 3X guide, the improvements should equate to $600,000; therefore a total investment of $800,000.

What I think you may of also said is the above may become a tear down and it is better to follow closer to the 10X guide an build up to $2mil in improvements on a $200,000 lot.

Did I read you right or is it (guidelines or rule of thumb) maybe a little different on the Lake? It seems the 3X and 10X guides might be less applicable on Lake property. I certainly understand it and pretty much aggree for less expenisve lot property and subsequent construction.

Now to a slightly different discusslion. As we all know there are some nice Lake Homes on the Lake. Many of the more expensive homes are in gated type communities (I will use the Ridge as and example). There are some as equally nice homes and lots outside gated communities with lower values. I am of the opinion the gated community Lake houmes may stay more stagnate from initial investment cost for years while the other properties outside the gated communities may in fact continue to rise in value to a greater degree (%). This is not to say the two options will become equal in value but the initial investment may change dis-proportionately. As we all know, the cost of ownership for the gated communities is usually greater due to association fees and the amenities they may offer to some.

Just currious what others may think and see things in their opinions and experience.

Name:	Osms -	Reply
Subject:	Feb and MotorMan
Date:	4/6/2007 9:38:31 AM

It's interesting to see the various opinions which tend to justify the decision already made by the poster. You know my opinion on APCo lots so I won't bother to repeat other than to say that in Motorman's example of why not to go APCo, he didn't factor in reality that for $250K for the APC house the purchaser is on the lake--not wishing he could find that house and lot for something he could afford, say $250K--good luck. Formulas work in city subdivisions not on the lake. Lake property is too variable to plug into a formula.

IMHO, The Ridge has been a driving force in the escalation of property values around the lake. FEB, I agree with you that investments in places like the Ridge will appreciate slower, mainly because Russell got all the profits up front--people who bought early will make big bucks, but those who bought lately are going to wait years for a profit.

One important question. Are we discussing BEING on the lake or INVESTING on the lake. To me, BEING, on the lake is the goal.

Name:	MotorMan -	Reply
Subject:	Hey MotorMan
Date:	4/6/2007 11:10:04 AM

from feb
"This is a question or a lead to a discussion. Please do not take it as argumentative. I might just learn something here.
I read your rules of thumb and was curious. If a Lake lot is valued at $200,000, then your point is for finance purposes, 3X guide, the improvements should equate to $600,000; therefore a total investment of $800,000. "
ANSWER: YES, AT A MINIMUM

from feb
"What I think you may of also said is the above may become a tear down and it is better to follow closer to the 10X guide an build up to $2mil in improvements on a $200,000 lot. "
ANSWER: YES, I learned this rule in 1978 in a real estate school. It had worked for a century.

from feb
"Did I read you right or is it (guidelines or rule of thumb) maybe a little different on the Lake? It seems the 3X and 10X guides might be less applicable on Lake property."

ANSWER: sort of. I bought a 720 sq ft 1916 cottage teardown in 1974 for $65,000 on one of Wis's nicest lakes. Just myself, I fixed it up for $20,000. I sold it in 1990 for $250,000 and it was promtly torn down and a 4000 sq ft house put up on the cheap, maybe $400,000. This was a mistate, moneywise, but all he could afford. A 2.5 million house was too much, but a million might have better. My $20,000 was not wasted as I got a nice place for a single guy to live for 16 years or $1250/year. Since the 4000 sq ft house was built on the cheap, it became a teardown as soon as lots on that lake hit $600,000. The 10x number breaks down when land values soar due to very limited supply. All States will have their version of WI's Lake Geneva, the deepest, cleanest, biggest lake midway between Chicago, Milwaukee and Madison, the State Capital.

I call it the "Lake Geneva effect" ; you take the nicest lake in the State and it has the highest prices. In 1975, when Lake Geneva was $200,000 for a lot, nearby lakes shallower, sold for $60,000 to 100,000. Northern WI's Minocqua chain was nice, but near nothing. They sold for $20,000. Little lakes near Minocqua sold for as little as $4,000/lot. When lots are only $4,000 few big land owners will subdivide their massive 200 acre holding if it costs $3,000 per lot to put in a road, power, etc. It is generally that MONSTER taxes that force big acreage owners to subdivide in WI. More on THAT later.

from feb
"I certainly understand it and pretty much aggree for less expenisve lot property and subsequent construction. "
ANSWER: YES, under certain conditions.

from feb
"Now to a slightly different discusslion. As we all know there are some nice Lake Homes on the Lake. Many of the more expensive homes are in gated type communities (I will use the Ridge as and example). There are some as equally nice homes and lots outside gated communities with lower values. I am of the opinion the gated community Lake houmes may stay more stagnate from initial investment cost for years while the other properties outside the gated communities may in fact continue to rise in value to a greater degree (%). This is not to say the two options will become equal in value but the initial investment may change dis-proportionately. As we all know, the cost of ownership for the gated communities is usually greater due to association fees and the amenities they may offer to some. "
ANSWER: I'm not sure what you're getting to here. It may be "DON'T PAY TOO MUCH" The other is called "diseconomy of scale". See: http://en.wikipedia.org/wiki/Diseconomies_of_scale
EXAMPLE: An empty nester wants to sell her 3600 sq ft house for the going price of $1,00,000 in her area. However, the 1800 sq ft houses she is looking at cost $700,000. So for half the house, she pays 70%. This happens because the smaller house buyers can only afford the monthly payments of the $700,000 house. House prices always go down, for a while, when interest rates go up. The time to buy is when they are low.

Stillwaters lots acutioned for $8,000 then slowly fell to $4,000. As soon as it turned around, lots were snapped up and $12,000 lots are getting more rare.

Funny as it seems, you lock in your profit in lake property when you BUY. Anyone can sell at the going market. What's hard is the buying. Above $65,000 tearndown was worth $100,000 in my opinion, but others could not overlook the "ulgy" 1916 cabin and I saw value in the framing.

from feb
Just currious what others may think and see things in their opinions and experience."
ANSWER. When Ron's hometown of Janesville had unlimited cornfields to subdivide, prices went up gradually. But then commute costs start to rise and the new lots are almost in the next County, so old lots because more desireable.

This is turning into an econ 402 lecture. Please forgive the length. Ask any other questions. I have been making money in lake property since 1971.

Name:	Feb -	Reply
Subject:	Feb and MotorMan
Date:	4/6/2007 11:17:06 AM

Thanks for your thoughts Osms. I agree with the importance of being on the Lake.

I do think it is worth considering the other important aspect, the aspect of the investment. As MotorMan pointed out, you do not want to under invest or over invest. There are exceptions to this philosophy too.

What are association fees at various gated communities around the Lake? I am just curious. I would think it was common knowledge, but I have never heard the numbers mentioned.

I am currently in an association of 11 homes here in Virginia. I do not want to go back into an association. It in not so much the fee but the personal intrusion it presents to a degree. I can see some advantage for some part timers.

I still maintain the APCO leased lots are the second best way to get on the Lake. Far superior to condos and off-water lots. Has anyone heard whether there will be any APCO lease lot auctions this year? Never did hear a definitive answer as to what halted last year's auctions.

Name:	MotorMan -	Reply
Subject:	Hey MotorMan
Date:	4/6/2007 11:38:49 AM

I said
"House prices always go down, for a while, when interest rates go up. The time to buy is when they are low."

I will ammend this by saying when oil prices shot up in 1973, interest rates doubled almost overnight and the biggest WI builder, Nanz went belly up from over extention.

Right then was the time to buy for a year or so. Ron could have afforded twenty lots if he took out a loan. He played it safe and bought one lot. A school went up nearby and as early as 1978 the few vacant lots near the school were going for $18,000. A potential profit of $300,000 or 1.2 million in real dollars. The DOW was around 1000 then too. 12,000 now.

Name:	boataholic -	Reply
Subject:	comments on prices
Date:	4/6/2007 2:03:36 PM

Very interesting idea on the 3x and 10x theory. At first I was inclined to disagree because many of the current properties for sale have houses worth far less than the lot. But I now realize it only confirms that there is still a lot of money to be made on lake property. For example, many of us reject the idea of buying in the Ridge because we know if we had 1.2 million to spend we could buy an equal or better lot with few restrictions and a mediocre house for 650,000 and tear it down. But the Ridge is selling, so it isn't overpriced, the other properties are just underdeveloped. That is why the market is currently adjusting at some 20-25% per year. Eventually, all those mediocre houses will be gone. At somewhere between 3x and 10x, teardowns and condos and subdividing becomes unattractive. Unfortunately, it looks like the trend towards mega-mansions, condos and developments like Glynmere is economically inevitable.

Name:	MotorMan -	Reply
Subject:	comments on prices
Date:	4/6/2007 4:09:14 PM

boataholic -
Subject: comments on prices
Date: 4/6/2007 2:03:36 PM

"Very interesting idea on the 3x and 10x theory........." edited for brevity.

The 3x was no theory. If your house did not make it, you did not qualify for a sellable mortgage. Most lenders sell their "paper" to Freedie Mac or whatever and make about 75 basis points on the deal (0.75%). Other investors then buy these loans and get the interest + principal. Many income tax advantages and disadvantages.

Now the Bank of Dadeville will loan on Lake Martin. They may think a lot is worth $300,000 and the 30 year old house, depreciated, worth 200,000 and loan $400,000. These are what are "In house loans". They cannot be sold to the usual places. But ask them about interest !! Maybe 1.5% above the resale market. They are also a Bank that will make a loan when there is no mortgage. An APC lease is still owned by Southern Company (SO). A good stock pick in my opinion.

Here's the 10x in action. My wife bought a lot at a tax auction for $100 plus back "sewer and water dues" of $1200. She used it for dog sleding. A place to camp or whatever. She is trying to sell it and got an offer of $3000. The buyer wanted to put up a $100,000 house.

Now this would have the height of foolishness. The city of Iron Belt, WI is almost a ghost town. If he needed to sell, or died, the house might have gotten $40,000 for it because there are plenty of houses for $20,000. No work for 20 miles.

He would have murdered the 10x rule of thumb. If he wanted to build a new house, he should have picked the County Seat of nearby Hurley. Plenty of land for $10,000 a lot and it will always be the County Seat.

Name:	MotorMan -	Reply
Subject:	Feb and MotorMan
Date:	4/6/2007 8:40:39 PM

quote:
"I'll pass commenting on Andy's self portrait."

Look at the next page. I rather liked "Women with flowers"

The guy painting is a little "gay" for my wall but I'm sure all they have are other students for models and old paintings to try and copy. The young artists I've seen look like pincushions. At least Andy has no body piercings.

URL: Women with flowers

Name:	MotorMan -	Reply
Subject:	hacked another one
Date:	4/13/2007 5:01:50 AM

When I saw the fawn in the sales site, I tried fawn.jpg and got the full size image file It's my new, center of page, background pic.

Thanks for the pic.

URL: link to fawn

Name:	BoatsRFun -	Reply
Subject:	hacked another one
Date:	4/13/2007 2:40:05 PM

Motorman, why would you have to hack your own site?
You and HTMLman have alot in common according to the seach button, lol, why cant people just use one alias? anyway..... Peace and Happy Boat ridin

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