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JPFCO REAL ESTATE BUZZ

Sep 1, 2011       Issue: 199

J Pepper Frazier Company
The Steamship Authority's Eagle in Nantucket Harbor
 
 New Listings VIEW ALL

Jul 26, 2017

Cliff
$5,975,000

Jul 26, 2017

Town
$4,945,000

Jul 25, 2017

Town
$2,495,000

Jul 25, 2017

Town
$895,000
 
 Recently Sold VIEW ALL 

Jun 22, 2017

Mid Island
$930,000

Jun 26, 2017

Town
$5,585,000

Jun 26, 2017

Cliff
$2,450,000

Jun 16, 2017

South of Town
$325,250
 

REAL ESTATE BUZZ
  Notes from Dalton Frazier's Blog

With interest rates so low, summer rents could actually make your vacation property cash flow positive. This has rarely been the case in the past. My friend who is a mortgage banker told me his bank was offering their lowest rate in bank history on a 5/1 Jumbo ARM mortgage up to $4MM-2.375%!!! That is far from normal. The bank actually had to raise that rate .5% this week to cool the deal flow because its infrastructure could not handle anymore deals and it is a very service oriented bank. So, let’s do an example.

There is a property listed for $3.25MM furnished, that one could probably buy for around $3MM. The property has a new house, pool and pool house in a desirable area. It could rent for $20k/wk. for July and August and $10k/wk. the last two weeks of June and first two weeks of September. So, the gross rent would be $200k. Subtract the expenses, $2.1MM debt at 2.375% amortized over 30 years (approximately $100k), 15% brokerage commission ($35k), taxes ($10k), maintenance, landscaping, cleaning, trash pick-up ($15k), utilities ($10k), insurance ($10k) and misc. ($10k), $190k total. Net $10k.

Not saying that this property is the property one would invest in if all that person wants is cash flow, but it is an opportunity to take advantage of the historically low interest rates and the depressed Nantucket real estate market, two phenomenons that are not common, and have a comfort net to know that the property can more than cover itself if need be.
 
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RENTAL BUZZ
  Where is the Key?

Electronic locks have gained popularity in recent years. An electronic lock operates by means of electric current generated by batteries. These keypad door locks feature ten buttons that custom entry codes can be easily added or deleted right at the keypad, or from a smartphone/internet connection. Some electronic locks relock after five seconds, ensuring your home is safe and secure at all times. Keypad door locks are ideal for rentals, because they don't require keys, they offer super convenience. A keyless lock means no worries about losing keys, who has the key, Tenants locking themselves out, etc. You can add and delete assigned codes as often as you want or need to in seconds! Most keypads have a battery life of over three years. When looking for an electronic keypad deadbolt lock, be sure to look for Grade-2 or higher and one with wear-resistant keypad buttons, so potential burglars can’t guess a code based on wear and tear.
 
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NANTUCKET REAL ESTATE NEWSWIRE
 

NOTES FROM PEPPER THE ELDER
  J Fred Muggs

I know it's dangerous to think, But, nonetheless, I've been thinking. And keep the wisecracks to yourself, thank-you. Who are the greatest Americans of all time? You have the military. Generals Washington and Patton, Colonel Sanders and Captain Kangaroo. Want to make a few quick quid? Take this tidbit down to the local Pub. Captain Kangaroo and Claribell are one and the same person. That's right. Two Chesters in one. Great Americans? Ron Popeil, Ernie Boch, J Fred Muggs, Don Ameche, Victor Mature, Mr. Ed.

The list keeps going. And so does the price of gold. I peg it for $6,000 in 24 months. Gold is a non-perishable commodity. If something can deteriorate, it can't be legal tender. That's why, for example, wheat has never been the monetary standard, but gold, salt and sea shells have been. The word salary came about when salt was the standard, which brings me to the Nantucket real estate market. It should and will follow the path of gold. Yeah, I know, all I can talk about is gold, Mr. Ed., Nantucket, and Don Ameche. You got anything better? And I did add J. Fred.
 
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