Foreclosed West End Circle Condo is a Steal

westendcircle

Attention value seekers: this West End Circle condo is a steal. While this condo is not my personal listing, I found the opportunity so remarkable, I had to point it out. It is a Freddie Mac foreclosure that originally sold for $177,000 in 2007. I have doubts this condo will be worth $177,000 in the immediate future, I am positive $120,900 is grossly undervalued. This is a perfect 1 bedroom condo for a Vanderbilt or Belmont student.

Grant Hammond, Broker, ABR, SFR, ePRO
Call or Text: 615-945-7123
Condos@GrantHammond.com

Tax Record for Foreclosed West End Condo

West End Circle Condo Tax Record

An Open Letter to Zillow from a Realtor

An open letter to Zillow from a Realtor who believes his clients deserve better service, better data and a better experience.

Dear Zillow,

Congratulations on hiring Jay Thompson, co-owner of Thompson’s Realty in Phoenix and respected real estate blogger to be your new Director of Industry Outreach & Social Media. Also, in case you did not get my memo a few weeks back, congratulations on hiring Bob Bemis, the ARMLS (Arizona Regional MLS) CEO to be your VP of Partner Relations. Judging from your latest hires, it is clear your company is determined to hire talented folks rooted in the traditional real estate industry. It is also clear that you finally embraced the fact that you have a massive PR problem and you seem determined to spend your way out of it.

Zillow Senior Executives Dump Stock

Bloomberg reports that in late February, your Chairman and Vice-Chairman sold 885,400 shares of stock valued at over $27.7 million dollars. Curiously, that sell off came just one day after Zillow announced that fourth-quarter revenue doubled from a year earlier. However, that sell off caused the stock’s value to fall 6.1% and sparked speculation from investors that your business model is entirely unsustainable. Bolstering that fear, your stock trades at about 50 times estimated 2013 earnings, the highest multiple that Pacific Crest Securities Inc. tracks. Wow, if I could sell investment properties on a 50 multiple, I’d be a paper billionaire too. Did I mention that Zillow isn’t sustainably profitable yet? Ut oh, spaghettio.

Zillow CEO Spencer Rascoff Interview

Listen closely to what Spencer Rascoff says in the third minute of this interview. Mr. Rascoff confirms that Zillow’s principle business is selling advertising to real estate agents. There is no mention of fiduciary responsibility to agents or their clients, just sell, sell, sell. In fact, he goes on to characterize his company by saying “we have less than 1% wallet share of what agents spend on advertising”. Mr. Rascoff goes on to claim that “we are the biggest real estate company” and outlines an investor-like pitch on why Zillow is going to be able to sell more advertising to real estate agents.

 

Is anyone else offended by this brash, “we’re smarter than you” attitude? I think it wholly offensive to be told by the CEO of Zillow that real estate is not highly evolved. Especially from someone who is literally hijacking our work product and then selling it back to us. If agents stopped syndicated listings to Mr. Rascoff, the “biggest real estate company” would literally cease to exist overnight.

What is Zillow’s End Game?

It is clear that Zillow cannot continue to trade at 50 times projected earnings, so what can Zillow do to boost revenues? How can Zillow turn the corner to ensure profitability and win back agents?

1. Become a one-stop shop for agents where Zillow can serve all of their business needs;
2. Eventually morph into a VOW (ala Redfin);
3. Eventually morph into a referral brokerage; or
4. A combination of (1) and something else.

I do not see a clear path in any of the above scenarios.

In Memoriam (Yes, I am predicting Zillow’s demise)

Without the listings — all of them — cleanly delivered and refreshed, Zillow will crumble under their own weight. Once the general public realizes that Zillow does not display all of the real estate listings in their city (they do not in Nashville) they will begin to lose credibility. Consumer confidence will begin to erode slowly at first, but hastens as users find the multitude of errors, old listing information and sees a rather alarming percentage of listed properties are actually already sold or no longer available. This process further accelerates when the public learns that all real estate listings are displayed on Realtor websites only. The death knell will be heard when it is revealed that Zillow is not a real estate site, but an advertising site that simply regurgitates erroneous data in an effort to sell a disingenuous service. Zillow subsists in the seedy underworld of page hits, banner impressions, user click paths and dollars earned per visit.

So long Zillow, it has been a blast having you around. I wish you luck in your next endeavor (please do not get into the subprime mortgage business or create any credit default swaps).

Sincerely,

Grant Hammond, a multiple award winning real estate broker who wants his clients to have the most up to date, accurate information available.

How Peyton Manning Can Play for the Titans for $1

Peyton Manning

Peyton Manning Vols QuarterbackAllow me to digress from real estate for a moment and float my theory about how the Tennessee Titans can bring Peyton Manning home for a $1 a year salary. BTW, I am not a dyed in the wool Vols fan, but I am a huge Titans fan and do believe that Peyton Manning is not only one of the best quarterbacks in NFL history, but he is also one of the most kind, giving and loyal human beings in sport today. What he has done for the city of Indianapolis far outweighs what he has done on the field and I want that for Nashville.

Before I get started, let me lay out a few ground rules and assumptions. First, let’s assume that Peyton Manning has fond memories of his time as the defacto leader of Volnation. Next, let’s assume that he has not already made up his mind. Let’s also assume that Peyton is mentally prepared to become the face of Tennessee – not just the team, but the entire State. Peyton is a living legend in Knoxville and you better believe in Nashville too. Next, let’s assume that the Titans ownership and management want Peyton on the team. Clearly, there could be a dynamic within the organization that the general public is not privy to. Finally, let’s forget about all of the minutiae and specifics of how the deal would be structured and look at it from a ten thousand foot vantage point.

How to Structure Peyton Manning’s record $1.00 Contract

The general premise is simple: having Peyton Manning on the field will increase ticket sales, concession sales, merchandizing, TV contract revenue, radio contract revenue, etc. I propose that you pay Peyton $1 per season and give him 50% of the incremental revenue the team earns over the previous calendar year (yes, I know the NFL minimum base salary is $925,000 for players who have been in the league to 10+ years, but it doesn’t roll off the tongue like $1). Additionally, the team commits to help to publicize and fund the PeyBack Foundation as well as a Peyton Manning wing at the Vanderbilt Children’s Hospital. If there is one thing I have observed about Peyton, he gives back in spades to his fans and community. The team ownership should embrace and amplify these efforts.

I know the above plan may sound crazy to most in the sports world, but in the real estate world, we do this exact deal every day. In real estate it’s called a joint venture (JV) and is defined as a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. In the above scenario, Peyton Manning is contributing his football services and brand as equity to the deal while Bud Adams and the Titans organization are providing the infrastructure and vehicle for incremental revenue.

Why Not Pay Peyton Manning Millions?

The answer is simple, the money you save by not paying Peyton Manning what he is worth in salary is diverted to building the team around him. There is no doubt that Peyton Manning wants to go back to the Super Bowl. The Titans have a lot of the right pieces in place like a ridiculously talented Chris Johnson, but the offense needs a little more firepower. I am not going to speculate who would be the best players to acquire, but certainly there are a handful you would attempt to secure.

The other reason you don’t pay Manning millions is because putting a price tag on this guy is insulting. If some owner in Arizona or New York thinks that $30 million is all this guy is worth, he is not valuing Peyton the person. Case in point: I have a good friend who has lived in Indianapolis for almost a decade. When I spoke with her last night, she was devastated that Peyton Manning had been released from the Colts. She is not a football fan at all, but she loves Peyton Manning the person and what he has done for Indy. His footprints are literally everywhere in that town, from the “House that Manning built (Lucas Oil Stadium) to the Peyton Manning Children’s Hospital at St. Vincent and everywhere in-between.

Listen – I live in a world where the good guys win. I want Peyton Manning to win and I want him to do it in Tennessee where millions of Vol fans love this guy beyond belief. If Peyton signed with the Titans, it would be like Elvis coming out of hiding, showing up on the doorstep of Graceland and saying “where have ya’ll been?” If I am Governor Bill Haslam or Mayor Karl Dean, I am on the phone with Bud Adams formulating a plan to bring Peyton home. Seriously, go get on the phone and make this team, city and state better!

Thanks for indulging me this afternoon, I promise to get back to analyzing and practicing real estate now.

photo credit

The Echo Restaurant Era Begins in Encore Condos

Echo Restaurant NashvilleToday, March 7th, construction has begun in the street-level retail space of Encore condominiums in preparation for the restaurant, Echo. Echo is renowned restaurateur and chef Deb Paquette’s latest submission to the Nashville restaurant scene. Slated to open in the fall of 2012, the 4,000 square foot space will seat 150 patrons and offer a private dining room, full bar, outdoor patio and an open kitchen with bar seating, allowing guest to interact with the much celebrated chef.

Paquette, a graduate of the Culinary Institute of America, has been featured in Bon Appetit, Southern Living and on the Discovery Channel’s Best Chefs of the South. Gourmet Magazine named Zola, Paquette’s last venture, one of the 60 best restaurants in the United States. Furthermore, Paquette has been named “Best Chef” in Nashville a record 16 times by the Nashville Scene readers poll. As an Encore condo owner, I feel very lucky to have such a notable Chef coming to my building and am very proud to see Nashville back on the culinary map.

Will Echo Affect Encore Condo Pricing?

You better believe it.

The Encore features 333 condos with a little more than 20,000 square feet of street-level retail space. Up until now, that retail space has remained 100% unoccupied. It is a proven fact that condo sales are amplified by attractive, well liked and utilized retail space. This fact has been proven out by other developers who have “seeded” their retail space with upscale dinning and shopping establishments. For example, when the Icon condos seeded their retail space with Casablanca Coffee, Cantina Laredo, Urban Flats and Cashmere Salonspa, sales experienced a significant jolt. When sales began to lag in the Gulch, master developer MarketStreet attracted urban grocer Turnip Truck and the rest is condo price increase history.

Echo is simply the beginning for the Encore. I have it on good authority that a local coffee house is considering opening a satellite location in the northeast corner of the building, adjacent to the Pinnacle building. With the impending completion of the Music City Center and Omni Hotel in 2013, I suspect more than 80% of the Encore retail space will be leased within the next twelve months.

Encore Condo Prices Will Increase

The developer only has 6 condos left to sell. Yes, those are listed at a lower price than condo owners would like, but once those condos are sold it will be up to owners to determine the new pricing. Typically, once a high-rise condo project is sold out, there is a natural 4-8% bump in price that occurs immediately as a result of no longer competing with the developer. Moreover, there is NO new condo supply coming to the market in the foreseeable future. The fact that the condo supply will remain static coupled by the fact that demand has not slowed will ultimately lead to a significant price increase in the Encore. Pressed to make a prediction, I would say that Encore pricing may appreciate as much as 18% by the end of 2013.

If you are considering a purchase in the Encore, there may not be a more opportune time to make your purchase a reality. The sales volume and velocity of downtown Nashville condos has been increasing for the past 7 months straight. Inevitably, price will begin to increase very soon as it has in buildings like the Icon and Adelicia.

Grant Hammond, Broker, ABR, SFR, ePRO
Call or Text: 615-945-7123
Encore@GrantHammond.com
View Available Condos

encore condo building nashville

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Vote No on HB 3528 in Tennessee, Urgent

Vote NO on HB 3528On Wednesday, March 7, the Tennessee House State and Local Government subcommittee will vote on HB 3528, which exempts municipal, county and state governments from paying HOA fees and assessments by homeowner associations following a delinquent tax sale. This bill is similar to HB 2430 which was scheduled for a vote last week, but no action was taken after Bill sponsor Rep. Judd Mathney realized he did not have support for the bill to pass, and he deferred action.

Although using language slightly different from HB 2430, HB 3528, threatens property values and HOAs by exempting municipal, county and state governments from the obligation to pay fees and assessments any time such government acquires the property through a delinquent tax sale. HB 3528 limits the exemption period to 24-months.

How to Take Action

No other state in the United States gives local governments this exemption from HOA fees and assessments. Thus, it is imperative that our legislators hear from homeowners and industry professionals. Please contact members of the House State and Local Government Committee and ask them to OPPOSE HB 3528 on March 7, 2012.

Thank you for helping us communicate that we will not allow the Tennessee legislature to not unduly burden its constituents with fees that are the responsibility of the true owner of the real estate, not matter who the owner.

Click here to see a copy of the letter I sent to the Tennessee House State and Local Government Subcommittee.

(Note: Ryan Haynes is the Bill sponsor and the Committee Chairman)

Ryan Haynes (R-Knox) 615-741-2264 rep.ryan.haynes@capitol.tn.gov
Tommie Brown (D-Chatt.) 615-741-4374 rep.tommie.brown@capitol.tn.gov
Jim Cobb (R-Chatt.) 615-741-1450 rep.jim.cobb@capitol.tn.gov
Gerald McCormick (R-Chatt.) 615-741-2548 rep.gerald.mccormick@capitol.tn.gov
Larry Miller (D-Memphis) 615-741-4453 rep.larry.miller@capitol.tn.gov
Bob Ramsey (R-Maryville) 615-741-3560 rep.bob.ramsey@capitol.tn.gov
Currey Todd (R-Memphis) 615-741-1866 rep.currey.todd@capitol.tn.gov
Mike Turner (D-Nashville) 615-741-3229 rep.mike.turner@capitol.tn.gov
Kent Williams (CCR-Elizabethon) 615-741-7450 rep.kent.williams@capitol.tn.gov
Beth Harwell (R-Nashville) 615-741-0709 rep.beth.harwell@capitol.tn.gov

 

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