Archive for June, 2008

Interested In Building A RV Park On Lake Martin?

June 26th, 2008 categories: Entertainment, Lake Martin, Regulations and Red Tape

Lots of people enjoy Lake Martin by taking their RV to or camping in Wind Creek State Park. It has lots of sites on the waterfront, and is really a pretty park. As you can imagine, it can get crowded on the summer weekends with camping spots in high demand.

Recently this was a topic of discussion on the Lakes Online forum that is dedicated to Lake Martin. You can read the posts’ thread here. The general consensus was one of wishing for more options to RV or camp on the water, and why there aren’t more places like that around Lake Martin.

I chimed in on the thread, saying:

“this is a generalization, but usually land on the water is so expensive it is hard to make the numbers work for an RV park. Plus it is hard to find land on the water that doesn’t have a deed or neighborhood restriction against commercial use like an RV park.That said, there is plenty of land that is close to the lake that you could do it on. Maybe you could have the park, then boaters could go put in at a public ramp.

There are also some parcels here and there that are on or near the water that you might could do homes to rent and also park and RV. Just depends what you want to do. Email me if you would like specifics.”

Then someone emailed me anonymously (through the Lakes Online) and asked me the following questions:

“So do you have property on the water for sale? Everyone I talk to says sewer is the issue. You can pump sewer up hill to make it work. Thanks. ”

My response was:

“someone emailed me thru lakes online as an anonymous visitor, and asked the below question, I really don’t know how to email them back, so I will answer them here. Their questions:‘So do you have property on the water for sale? Everyone I talk to says sewer is the issue. You can pump sewer up hill to make it work. Thanks. ‘

Sewer / septic might be the issue in that you might have a hard time getting a system approved, but that is only on a lot by lot basis. It’s hard to make a call on the septic because it’s only approved by the county when you turn in a plan for that specific lot.That to me is the lowest of three hurdles for a project like this. the highest would be cost. If you were to buy a lot for $300,000, and it was only an acre, how many RV spots could you fit in there, 7, 8? If you can charge $50 a night, even if you rented it every possible night, would that be enough to float the debt on the $300,000, plus operating costs? Maybe you supplement by other income, I don’t know.

Second hurdle is zoning. The lot / land you buy would have to be approved for this use. Not saying it can’t happen, but it is a consideration.

Third hurdle is septic. Do you have enough land for a proper area for field lines, based on the amount of waste that will be discharging? Just a matter of math and money.

Again, I am not saying it can’t happen. There are a few spots around the lake that maybe, possibly, could work. You don’t know until you get into the details.

As to me sending you info on possibilities, please email me from your real account so that I can reply, or just call me.

I thought it might help to post the same to Lake Martin Voice, maybe other readers have the same question.

One final thought regarding Wind Creek: I have never tried this, so I disclaim all potential legal and ethical liability, but it seems that, in general, in theory, hypothetically, sometimes when you have a scarce product (like RV lots) that are monitored by salaried personnel (like Wind Creek employees) it seems that it helps to TIP the folks? Ha! Only kidding, of course.

Related Post:

5 Questions and Answers: Alabama Power Leased Lots on Lake Martin

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John Coley Featured In Bham News Article On Vacation Homes

June 23rd, 2008 categories: Buying Tips, Investor Tips, Lake Martin, Seller Tips

I guess part of being a realtor, even in the web 2.0 world, is cheesy self promotion, hence the obnoxious headline.

Alison Ketcham of the Birmingham News interviewed me in an article she did for the Sunday, July 22, 2008 paper. It was in the Real Estate section, page 22J.

She wrote the article about buying second homes, and what the current real estate market is doing to vacation home sales. She interviewed a developer on Lake Mitchell, a realtor that sells homes in the foothills of the Appalachians, and talked to me about Lake Martin. It should be on al.com pretty soon, when it is, I will link it in here.

I was really honored to be interviewed. Plus, the picture she used (below) was one of mine, of a home I have for sale, 1135 Lakeview Drive. It is a 3 bed, 2.5 bath home built by Bradley Pemberton of Landmark Construction and Development. We just dropped the price to $447,000 - click here for the direct link to watch an online video tour.

I mainly talked about how it is a buyer’s market, yet we still have historically low rates. Here is but an excerpt:

“Over the past 40 years or so Lake Martin property has appreciated at about 12 to 15 percent per year,” Coley said. That return combined with the fact that a vacation home provides a place to bring family together makes it a good investment.

“I tell buyers that historically Lake Martin has strong returns like a mutual fund, but it’s better,” Coley said. “Because 30 years later nobody says ‘Hey, didn’t we have fun sitting on the dock of that mutual fund?’ You can get a return on your investment, but nothing can replace the memories that you can make with your kids on the lake.”

“No one has warm and fuzzy feelings about their 401k plan, but they do have warm and fuzzy feelings about the lake.”

Thanks, Alison, for the mention in a well written article.

Here is the picture of 1135 Lakeview Drive that she used:

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5 Questions and Answers: Leased Lot Homes on Lake Martin

June 21st, 2008 categories: Buying Tips, Lake Martin, Real Estate Tips

These questions were submitted to me from a Lake Martin Voice reader needing more info on Alabama Power leased lots on Lake Martin.  If you have more questions on this or another subject, please email me or call me (info at top of page) and let me know.  Who knows, maybe your questions will inspire a post like this. 

1. Are Lake Martin lot leases standardized?  If so, where can I get a copy of the lease to preview?

Yes in that most all leases on Lake Martin are with Alabama Power. A lease they did 15 years ago might differ very slightly from one they did 2 years ago, but for the most part are the same. Copies - I doubt they would send you an example but as a practical matter I can send you copies - 4 of my listings (see each linked here) are leased lots right now. I can email them to you.

2. Are the expiration terms on all properties the same or do they vary from lot to lot?

The lease expiration and all other terms vary from lot to lot.  Most of them are for 25 years or 30 years total.

3. How does the property tax work on waterfront lot leases?

Alabama Power pays the property tax on the lot, and you pay on the improvements (house, dock, sea wall, etc). On Lake Martin, most of the value in any property is in the waterfront lot, so often the tax on the lot is greater than that on the improvements.

4. Are there any local lenders willing to do loans on leased lot homes?

Yes, plenty. National mortgage companies that have no clue about Lake Martin sometimes bring out the red tape over leases. That’s OK, because most of the time a local bank can meet or beat their rates and closing costs, anyway.

5. How has APCO historically acted upon termination of any existing leases on Lake Martin?

Have a lawyer examine each lease, but, in general at lease end they can:

A.) Renew the lease for another 25 or 30 years.
B.) Sell you the lot
C.) Buy the improvements from you at market value, determined by an appraiser.
D.) Let you haul the home etc out of there.

Since my grandad started our company in 1953 we’ve never heard of them doing C or D. Not to say they never will, but I think it’s highly improbable.

Will they sell to you? I think odds are they will renew most of the time.  It seems like once every decade or so they decide to phase out of the Real Estate biz and sell upon renewal. They did it for a stretch in each of the 70s, 80s, and 90s. When they did it was (according to lot owners I’ve interviewed) at prices that folks were happy to pay.  Who knows what will happen.  I wouldn’t bank on it, but I wouldn’t let it bother me, either. I think most people look at it like this: if they feel the lot is worth at least $200,000 - it would take a bank payment of $1,200 a month (6% on 30 years) to finance the lot. The leases on my listings are all about $350 a month currently. So if you bank that $850 a month - at lease end you’ll have a huge chunk of cash if they sell it to you. Or a big cash nest egg for retirement. Whatever.

Extra Points to those who read these three Bonus Q&As:

1.  What is the highest valued leasehold property on Lake Martin that you’re aware of?

Value - depends on your definition of value here.  If asking price = value, right now there are about 16 leased lot homes for sale, lowest asking price is  $319,900 (info here) and highest is like $559,000.  If selling price = value, according to the MLS the highest leased lot home sold was for $489,000.  But I know of several leased lot homes that, if sold, would bring a lot more than that.  But to answer the unasked question about appreciation of value - at the end of  2006 I did a study of the MLS for property types that sold multiple times within a 6 year period: lots, condos, deeded homes, leased lot homes.  I found multiple examples where the exact same lot sold, e.g., three times that period, or the exact same leased lot home sold.  I calculated a total gain and divided by number of years between first and last sale.  All property types AVERAGED about 30% gain PER YEAR.  Granted, that was at the end of a huge bull market run.  Over 50 years, most appraisers use the 12% to 15% gain per year factor.  But most importantly, it demonstrated to me that Lake Martin real estate appreciated rather uniformly across all property types (lots, condos, deeded lot homes, leased lot homes).  Sure, there are times when some types do better than others, but in any time frame greater than 4 or 5 years it is my opinion that all will appreciate pretty much uniformly.  It’s not a science.  We have small sample groups, but I’ve seen enough anecdotal evidence to convince me to have that opinion.

2.  How and who do you contact at APCo in order to negotiate lease extensions / renewals / purchase request / etc.?

Alabama Power has a land management office over in Dadeville which houses all of their people that do this, from the real estate leasing folks to the shoreline management (permits to build docks) folks.  Owners of leases talk to them about extensions. Typically they only talk to the owners, and won’t discuss hypothetical situations.  For example, if you called them up and said “I am thinking about buying a leased lot home, would you extend the lease” they would probably not talk to you as you are not the owner.  If you get down to an exact home you want to buy, and want more years on the lease, I (as your realtor, of course) would advise you to ask the sellers to make a request for a renewal letter.  Also I would advise that you make the contract contingent upon your favorable review of the lease.  All of them are pretty much the same, so you probably wouldn’t find anything that surprises you, but at least you have looked. Request to purchase – they haven’t offered any new lots to lease in a few years.  If they do that again, you can get on a list to be notified of the chance to bid for the right to lease them.

3. Will APCo verify expiration date of specific lots on Lake Martin?

I suppose that, if you had one under contract, your realtor (me ) could call AL Power with the lease info and get them to independently verify that the seller has given you the current lease to review.  That office of Alabama Power is always swamped with heavy workloads, so I would be surprised if you as a potential buyer called them up if you could get them to respond in a timely way, if at all.  But who knows, maybe they might.  But again, if it were me, I would not do any verifying or extension / renewal talk until I had a property under contract.  It is just too much of a pain to do, you don’t want to ask Alabama Power for 4 or 5 favors and only use 1.

 

Do you have any other questions about Alabama Power lot leases on Lake Martin?  Leave a reply and comment below, and I’ll do my best to answer it.  Who knows, maybe someone else has the same question.

 

Leased Lot Homes For Sale:

For Sale: 145 Captains Road
For Sale: 26 Claytons Lane
For Sale: 207 Paces Trace
For Sale: Pleasure Point Road

Related Post:

Mythbuster: Alabama Power Leased Lots On Lake Martin

Spoken by John Coley | Discussion: 3 Comments »

Lake Martin And The New F Word

June 9th, 2008 categories: Buying Tips, Lake Martin, Seller Tips

You may have heard the new F word that is seeping through the real estate industry and trickling down to Lake Martin – Foreclosures!  A lot of folks ask me if Lake Martin has as high a foreclosure rate as the rest of the nation.

First of all, I must give a huge hat tip to Kevin Warmath on his blog LiveInAlpharetta.  I read this post on Alpharetta Foreclosures of his a few weeks ago and I loved his “new F word” phrase I had to use it:

“While a lot of sellers want to use the real ‘F’ word for this real estate market, my ‘F’ word in this market is Foreclosure.  Everyone is fixated on Foreclosures. Last week alone, I had three people contact me out of the blue looking for Foreclosures…looking for a deal.”

Back to the local question:

Are there many Lake Martin waterfront homes in foreclosure sale right now?

Short answer: no.

Long answer:

Lake Martin has been affected, just like the rest of the country, by the downward spiral of the real estate market.  There are a lot of waterfront lots and homes for sale right now, and many of them are spec homes.  But there are not many being sold on the courthouse steps in foreclosure sales.

That is because (at least traditionally) builders or people don’t owe more on a Lake Martin property than it’s worth.  So the banks choose not to let it go all the way to the courthouse sales.  Most of the time the banks choose to sell it themselves (just like a FSBO) or they use a realtor, just like any other seller (aka a REO sale).  Click here for more info on the foreclosure process.

Will we see more in the future? Probably so.  But if I had to guess, I don’t think you will see as many courthouse steps sales for waterfront properties as in proportion to other markets.  In the past the sellers have cut their prices enough or the banks simply REO’d them.  I could be wrong, though.

I sincerely hope that a seller would cut the price to sell it and break even before a foreclosure.  Some don’t, though, no matter how savvy or sophisticated they seem.

 

To wit: laughing Ed McMahon, Tonight Show sidekick, and (most ironically) America’s hope for retirement, Publishers Clearing House Sweepstakes check toter, is being foreclosed.  Isn’t that weird?  The man that all of America would love to see knocking on their door will be losing his doors very soon.  According to reports, he owes $4.8 million on a home that he has for sale for $6.25 million.  AND HE WON’T DROP THE PRICE??

I can’t believe it.  Hey Ed, why not shave it down to an even $5M, pocket a cool 2 hundy, and be done with it?  Maybe there are other issues here, but to me it’s crazy.  Sure, it hurts your pride to drop the price, but I guarantee you that would not have made the national headlines like a foreclosure has.  What do you think, Ed?

“You are correct, sir!”

Spoken by John Coley | Discussion: No Comments »

Clean Lake Martin And Get A T Shirt To Prove It

June 4th, 2008 categories: Lake Martin, Lake Martin History, Lake Martin Living

The Annual Lake Martin Cleanup portion of the Renew Our Rivers program will be held this Saturday, June 7, 2008.

Renew Our Rivers is a joint effort between Alabama Power and the Middle Tallapoosa Clean Water Partnership.  If you pitch in and help, you’ll get a free T shirt and all sorts of other cool swag.  Plus you get the satisfaction of helping keep Lake Martin clean.

How long have you just ridden by that old air conditioner that’s laying in the woods just off the road to your cabin? What about that fast food bag that someone threw out last Labor Day?  How long do you actually plan to keep those 4 silver bubble floats that have been punctured since 1991?

Depending on your location, sometimes it’s hard to find legitimate places to dump trash around Lake Martin.  So if you have procrastinated cleaning up because you didn’t know where a dump was, here’s your chance to do a good deed and get a T shirt to boot.

Here is some more info taken from this article in the Outlook:

“Collection sites will be Dare Park, Real Island Boat Ramp, Kowaliga Boat Ramp and the Alexander City Coley Creek Boat Ramp. The event begins at 8 a.m. with Alabama Power giving volunteers t-shirts, plastic gloves and trash bags at each collection point.

Last year, the Lake Martin Cleanup Day saw 167 volunteers collect 6.17 tons of trash.”

Why not go ahead and sign up for the Poker Run to benefit the Sherriff’s Girls’ Ranch so that you’ll have something to do after the cleanup?  It’s sponsored by 93.9 FM – call 334–887–9999 for more details.

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How To Get One Up On Lake Martin Wannabes

 

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