Living In Pike.com

The house that Laura and I saw on April 14th in Traders Hollow has just had the list price dropped from $995,000 to $899,900. A drop of over $95,000. I Wonder if they read my review. (See below)

On April 14, 2008 Laura Heigl and I took a second Field Trip. One of my favorite communities in Pike Township had done me in on our last trip. Our research had connected a startling case of mortgage fraud which involved two homes in Traders Hollow and 36 homes in total. Another one of the homes had been in Zionsville and Laura had already seen it and gotten the skinny on the history of the home. The home in Zionsville was in Thornhill, a premier community in Zionsville.

The partners in crime had been arrested on January 30th and one of them, a real estate agent was out on her own recognizance awaiting trail.

This time we went back to Traders Hollow. The second house in Traders Hollow that was part of the mortgage fraud is on it’s way to Sheriff’s Sale this month and is not available to be seen yet. The house that we were going to see today had been listed 4/1/2008, was a possible short sale and/or pre-foreclosure. It had been built in 2007 and according to the listing sheet was a brand new home that had never been lived in. It was priced at $995,000 with a total of 9,924 square feet including the finished basement. Interesting…my first thought was that someone had built it, ran out of money and could not make payments. These kinds of listings really peak my curiosity. Since it was vacant, it made it an easy preview.

Laura, my mentor, my educator of high end houses and office cohort was also interested in seeing the house. When we arrived, we were greeted by a long driveway that appeared to be sunken from close to the street to the garages and covered with 6 inches of water. At first I hesitated going through the water fearing my car might stall, but I wanted to see the house and decided to chance it. My car made it. We parked next to a workers truck. Turns out that the basement had been flooded and they were trying to pump the water out. There was only half of an inch left.

As we entered the house, the smell of stale, sitting water about knocked us over. We decided that the water had been in the basement for a while.

There was a first floor master bedroom suite. It was odd shaped and the back wall was filled with bay windows in a half circle. Laura said “where do you put the bed?” She was right. There was no good wall to put the bed against. You would either be blocking the room entrance, the master bath entrance or putting it on the back side against the bay windows. Not well planned or thought out. The master bath was large and nice but the front panels of the counters looked cheap. Nice large shower stall (what I call a party shower), about 5 X 8 feet but it only had one shower head. I have seen smaller showers with 8 to 10 shower heads.

The great room had a wall of windows but they looked out the back into the neighbor’s yards in Walden Glen. When you spend $995,000 for a house, you don’t want to see any neighbors houses.

The kitchen was large and laid out well. Granite counter tops. Problem was that where it overhung the counter, cheap looking braces were installed. Also the wood that the braces attached to was painted white and looked very inexpensive. The four car garage had an interesting layout. It actually was one 2 car and two 1 car garages. I thought this was well thought out. The 1 car garages could be used as storage, work areas or for lawn equipment. You got to the single garages by going through the 2 car garage. All garages had a overhead door to the outside.

Coming back into the house from the garages Laura said “there is no mudroom. For a million dollars I want a mudroom.” Again she was right. Where they could have easily put a mudroom between the garage and kitchen, there was a good size closet. Again, what were they thinking?

Upstairs there was a second master suite. It actually was over the first floor master suite and had about the same floor plan. There was such a bad smell in the bathroom that we stayed maybe all of 5 seconds.

What appeared to be a loft at the top of the stairs on the second floor was very unusable. There were no open walls to put furniture. One door lead to an attic storage space. It could have been opened up to make a much more functional loft area.

The last area we saw was the basement. We had to look from the bottom step since there was still half an inch of water on the floor. The shocker was that there were water marks 4 feet up the wall and a mold like substance was starting to be seen on the walls. What you could see was a large room with a bar/kitchen and 2 bedrooms off to the side. I would have loved to walked around down there and saw the whole thing. According to the listing sheet there was a home theater. Unfortunately that was not possible without rubber boots.

Leaving the house Laura and I took inventory. 9,924 square feet included finished basement, 5 full baths and 2 half baths, nice master bath, 4 car garage, nice kitchen layout and home theater. I said I thought the house was not worth $995,000 but closer to $500,000. She agreed. She asked me what I thought repairs might cost. I ventured a $200,000 price tag. Again Laura agreed.

The house had way too many flaws. Although there were some good points, the quality of some of the highlights, the location and closeness to Lafayette Road, backing up to Walden Glen, walls of windows without a gorgeous scene, flooding of a finished basement in a brand new home, a driveway that needed a bridge to get over the standing water and no landscaping with very little curb appeal just don’t say “this is a million dollar house”.

I got home tonight and looked up some title information on the internet for this house. I was horrified to find out that on 5/31/2006 this home was sold for $1,675,800 with the mortgage company giving two loans. They were construction loans. The conclusion I come to is that the house was bought before it was built. The first loan was for $1,000,000 and the second was for $260,000. Whoever appraised this home for $1,675,800 had better be in jail. This is utter nonsense. Thanks to Laura, now when I see numbers like the above, I think mortgage fraud. I have no proof other than crazy numbers, but it leaves me with a lot of questions.

Who was the builder and are they reputable?
How could a house be worth 1.675 million at that location?
Why did the mortgage company believe it was worth 1.675 million?
Why did the owner never live in the house?
How could a basement flood in a million dollar house?
Could the basement flooding be related to an insurance scam?
Could the basement flooding be related to a mortgage fraud scam?

Flooding basements are not new to me. I have seen plenty. It usually happens when someone shuts off the electricity in a house, it rains and the sump pumps can’t turn on automatically. In a million dollar house, you don’t turn off the utilities. You could have very expensive problems if you do.

On the way back to the office Laura and I talked about the devastation transactions like this have on communities. It doesn’t matter if the communities have $100,000 houses or million dollars houses. Bank owed, foreclosed on houses sit empty which really is house abuse if not watched closely. They get sold at a market discount which brings down market values in a community. Nobody wins.

One thing that Laura and I agree on, we have never in our lives seen the emotion greed as much as we have seen it in real estate. We see it with sellers, buyers, mortgage companies and even with some real estate agents. I guess when you
are talking about large sums of money, greed can come easy.

I will be watching this house closely. I want to know what a buyer will pay for this location. I will also be watching for the home in Traders Hollow that is going to Sheriff’s Sale to be put back on the market. That will be another Field Trip Day.

Thanks again Laura for your time and expertise.

From the charts and numbers below you might well assume that real estate has fallen flat in Pike Township. I can tell you for motivated sellers and buyers this is not the case. Daily I see new listings that are at prices I have never seen in my real estate career. They are not staying on the market long as savvy buyers are picking them up fast. Sellers that bought wisely 7 to 10 years ago and have lots of equity can beat the market and get the job done. HUD and bank owned sales are still a great buy for my investors. I have seen many in “move in” condition. Interest rates are also very low making payments very affordable.

My business has continued dispite the real estate climate. There are buyers and sellers on the sidelines waiting for better days. Once those days come, the compitition will be fierce and you won’t see the deals I am seeing today.

Do let the numbers fool you!

On March 25th I got the privilege of seeing the most expensive house sold in Pike Township in the last 3 years (at least as the Brokers Listing Cooperative is concerned) and I got to see it with Laura Heigl, the top agent in our office. Laura is a high end salesperson and has seen, listed and sold many expensive houses. I think Laura’s knowledge of high end houses would match my knowledge of $100,000 to $150,000 houses and $50,000 to $100,000 condos in Pike Township. As far as sales are concerned, she is my mentor. As far as real estate technology is concerned, I believe I am her mentor.

It all started when Laura wanted me to look at a condo in Cobblestone she was going to list. She wanted my opinion. Since Pike condos are a third of my business and I had listed one at Cobblestone last year, I was looking forward to helping her. Laura and I do real estate favors for each other all the time. This would mean that she would now owe me one and I knew what favor I wanted from her.

Every morning I get an email from the Broker Listing Cooperative showing me all the new, changed and pictures added listings in Pike Township. Usually there are about 30 a day. Last week a new listing in Traders Hollow (about 86th and Lafayette Road) caught my attention. I had sold a house in Traders Hollow last year and had seen another listing in the community. What is so unique about Traders Hollow? I consider it to be an elite place to live in Pike. I can’t think of a another community of 27 houses buried in the woods with one street in and out and so many premium lots that would match Traders Hollow. About 5 minutes away from I465 or I65. I consider it one of the best locations in Pike Township.

The listing that caught my eye had 6894 square feet above grade (first and second floor) and a 4354 square feet basement. That’s a total of 11248 square feet. It was bank owned and the price was $900,000. I wanted to see it. This was my chance for payback from Laura. If I was gong to look at her Cobblestone condo, I wanted her to go with me to the Traders Hollow house. I knew I could learn from her just by listening to her comments.

Laura agreed. When we drove up to the house we saw that it was perched on a hill with a very steep driveway that lead to a 4 car garage. The scenery from the driveway was just gorgeous. You could see cows grazing on a hill to the south of the property. I imagine during the summer months you would have complete privacy because the trees surrounding the house would be in full bloom.

Walking in the garage door entrance there was a huge laundry room and a very unique kitchen office. The kitchen was extremely large with a family dining area. Laura mentioned that the stove in the kitchen costs over $15,000. Next to the family dining area was a large entertainment area with a full bar.

Walking through the grand house, room after room, we saw that even though was livable it needed a lot of work. Wood floors were scuffed. A lot of wallpaper from the 1990’s era. New carpet was needed in areas. Some personalized paint (owners choice - not neutral). The master suite was on the first floor and you entered a study to get to the bedroom. The master bath had a hot tub that even had a place to chill a wine bottle next to the tub. The five bedrooms upstairs were large sized, all with walk in closets to match. There was an attic storage area that you could have put three more rooms in.

At this point Laura said she remembered seeing this house on the Brokers Price Cooperative before at $1,424,000. She said that most likely there was mortgage fraud here. Laura knew mortgage fraud. She had recently been involved in a transaction but backed out in the knick of time and notified the authorities. She knew all the signs of mortgage fraud.

The basement was the best part. Although it was filled with very expensive dark wood paneling and shelving which made a lot of the areas very dark, the size made up for it. More entertainment rooms, a banquet hall and a big surprise. At the end of a long hall you had the choice of going back upstairs using the front staircase (we had come down the back staircase) or there was another staircase leading to a lower level. It almost looked like a dungeon level. I went down the steps and pushed open the door. There was complete darkness. The words that I uttered to Laura were highly echoed. I found a light switch and turned it on. Low and behold there was an indoor half size basketball court. Simply amazing! Even had sodium lights in the ceiling. The kind that gets brighter as they warm up.

On our way out of the house Laura and I did a mental inventory. 1.73 acres, 6 bedrooms, 5 full baths and 2 half baths, 11,248 square feet (I think this includes the basketball court), 24 rooms, private heavily wooded location overlooking grassy meadows, fabulous main floor master suite, lower level walkout, patios and/or balcony’s located on all sides of the house, 5 fireplaces, 4 furnaces, 4+ car garage and a new roof in 2006 at a cost of $42,000. Truly elegant living at its finest. The house was built in 1990 and during it’s heyday probably deserved a page in Architectural Digest.

Another inventory we did was for repairs and upgrades to bring it back to its finest hour. We figured about $200,000 was needed. Laura and I are not contractors and we don’t pretend to be. We are experienced Realtors. We can see surface things and know what it will cost to improve or repair. We do not deal with structural problems. It would take a house inspector to tell you if there were major problems. We did not see any “signs” of major problems.

On the way back to the office we talked about loan fraud and how it happens. Once back at the computer I looked up the history of the house on the Broker Price Cooperative. Laura had been right. The house had been listed and sold 18 months ago for $1,424,000. The pictures from the listing sheet looked gorgeous. The rooms in the house looked elegant. What happened in 18 months? I looked up some title information from the transaction. It said that the house had sold for $1,700,000+ and the first loan was for $950,000 and a second was for $331,000. None of this made to much sense to me. Laura said this was more proof of loan fraud. Laura said “key the buyer agent’s name into Google“. I did and what came up was unbelievable. The second Google entry came from MortgageFraudBlog.com and said “2 charged with mortgage fraud involving 36 properties.” It was the buyer’s agent and her partner in crime. There was a link to the 10 page indictment. They had been arrested 1/30/2008. Looks like they may spend the rest of their lives in jail. LAURA WAS RIGHT!!!

There is even a short note about this sale in the indictment. Seems there were two sets of closing statements. One for the seller and Title Company and a forged one for the mortgage company that the pair had cooked up. The partners in crime walked away with $28,980 in commissions for selling the house and $121,229 swindled from the mortgage company and the buyer they represented had no idea this was going on. They convinced someone with good credit to buy the house and they would make the payments and find someone to rent it. My guess is that they got Power Of Attorney from their buyers. This way they could sign for all their buyers and they did not have to be present for any of this.

Actually nobody rented the house at Traders Hollow. It became a hospitality house for their new potential investors. No payments were made and the house went into foreclosure. 18 months later it is bank owned and back on the market for $900,000, $50,000 under the loan amount. The second loan was lost. Add in the cost of the foreclosure, maintaining the house (the cost of running 4 furnaces during the winter), the cost of the resale and this mortgage company will take a huge loss. It will grow even more the longer it takes to sell.

The way Laura and I see it, the house is probably worth somewhere between $1,000,000 and $1,100,000 in excellent condition. It needs about $200,000 worth of work (what can be seen) to put it in excellent condition. If you bought it at $900,000 and did the work, you would have a house at market value. The trick is to buy it for less than $900,000. The longer the bank owes the property the more willing they will be to take less. It is like a Dutch auction. The price will start dropping in a couple of months and you hope that no one buys it above the price you are waiting for. If the house could be had for $700,000 and you did the work for $200,000, it is possible that you would have a under market value house that you could resale and make a $50,000 to $100,000 profit. Many possibilities.

In the indictment it lists 36 homes where this was done. There was another one in Traders Hollow but apparently it was not a public sale because it never showed up on the Brokers Listing Cooperative. I imagine once it gets processed it will be back on the market.

Today I got a great education. Thanks Laura!

Interesting…I just opened up my copy of Court & Commercial Record and see the second Traders Hollow property going to Sheriffs Sale on 4/16/2008.

Shortly after our field trip I noticed another house in Traders Hollow up for sale. Build in 2007 and never lived in. It is now owned by the bank. My guess would be the builder ran out of money building the house. Priced at $995,000. Time to plan another field trip, Laura.

Tim Lord

I met Dave and Marjorie Koch at Los Rancheros last year. Like me, they were regulars at the Mexican restaurant. After getting to know them I found out they lived in Liberty Creek, both worked for Pike Schools and were Hot Wheels collectors. Seems Dave has 10’s of thousands of the cars and they are taking over their house. (As a Realtor, this caught my ear.) About 2 weeks ago they invited me to the December 15th Indy Hot Wheels Club Christmas Celebration that was going to be held at the Pike Schools Freshman Center. Curiosity and friendship got the best of me and I decided I would make a point to attend.

Arriving there at 11:00 AM it was a site to behold. The entire Freshman Center Cafeteria was full of vendor tables, a race track, a dart game and tables of food for the pitch in. Dave was on stage running the show. Marjorie was behind the food tables getting the lunch buffet ready. Hot Wheel enthusiasts had traveled from as far as Michigan, North Carolina and Terre Haute just for this xmas celebration.

Walking around looking at tables of Hot Wheel cars I saw many priced over $100. There were also many transactions going on. Although the majority of the people there were adults, the kids were not left out. There were kid raffles, Hot Wheel racing and the appearance of Santa.

Dave and Marjorie tell me that Mattel helps these clubs out by letting them purchase limited edition cars for prizes and give a ways. They also bring in a race track for shows. The Indy Hot Wheels Club is the only one that does not have fees for membership. All monies earned by the club come from raffles, a dart game and donations. This show was free to the public.

Thank you Dave and Marjorie!

This time we are looking at 208 new apartments. This new development was going to have 126 single family homes in addition to the apartments but guess what? There are no builders interested in building 126 homes at this location at this time.

The location? 7511 New Augusta Road. Just south of Eastbrook Elementary School and north of the Augusta Green neighborhood. Currently the property is home to Crooked Creek Golf Club and Midwest Softball.

Pike Township Schools bought the north 47 acres of the total 114. They would like to rebuild Eastbrook either just south of where it is now or further south on part of the 47 acres. Eventually they might build a new middle school on the remainder of the 47 acres sometime in the future. The other 67 acres would be for apartments and single family homes.

Since the apartments would be where some of the golf course is and since the single family homes would be where the some of the softball fields are there is talk that the softball fields may stay open another year or until they can find a single family home builder.

My take?…I am always leery about new apartments. The density of these apartments would be 10.96 units per acre on 18.981 acres. I have seen pictures of what the proposed buildings would look like. They remind me of Lakes of Georgetown at 62nd and Georgetown. I have several other grips. They will be adding 200 new cars of traffic to New Augusta Road just south of the school. I suppose you could argue that apartment residents could walk over to Georgetown Road and catch the bus. The entrance to the community is along side this monstrosity. A red trailer that has been sitting there for years. It would be much nicer if the developer bought this property (has been commercial use in the past - carpet warehouse) and turned the entrance into a park like setting (this property has been for sale). As a Realtor I like nice entrances to communities. This attracts buyers. My other big grip is that the high power lines go right through the middle of the community. For resale, this is horrible. Nobody likes to buy next to high power lines.

I don’t think this project will be stopped. I have attended several informational meetings on this project and the city seems to be OK with it. It will be interesting to see when a production builder will step up and be willing to build single family homes at this location.

Original Plot Plan - Click Here

Revised Plot Plan - Click Here

November 7th was a sad day for Pike Township Residents Association and myself. PTRA had asked me to do a presentation in front of the Metropolitan Development Commission to try and stop a new community from being built at the old YWCA location. I knew of many reasons why it was a bad idea and tried to express them to the commission. The southeast quadrant of Pike Township is very unstable in terms of property values and foreclosures. Until the area stabilizes you don’t want a new community in the area. Not only would it not help the surrounding communities but would likely depress the values of the new homes. Unfortunately the Commission only looks at “land use”. If there are houses all around the land, why not put houses there. It is very sad that the Commission takes a narrow view at zoning, but that is their charge. State statutes say that is the way they are suppose to judge it. I consider this a huge flaw in the zoning system.

There is one glimmer of hope…the zoning they received for the land allows for 75 homes OR the land can be used for religious use. There is a church that is interested in the property. They would use the existing YWCA building after fixing it up. Their plan includes neighborhood outreach, programs for children, daycare, and health center etc., something the area could really take advantage of. I am hoping that a deal can be made between the developer and the church. Otherwise I see a storm brewing.

Plot plan of the new development - Click Here

Commission presentation through Windows Media Player - Click Here Starts at 22:55

The federal government has been talking about helping home owners with their sub prime loans and loans that adjust every year. They have been asking banks and mortgage companies to bend and help out these people by working with them, adjusting their rates or not making the yearly adjustment to the interest rate. Well folks…

Read this

Pike has had it’s fair share of what I call recycled homes (Bank owned, HUD, VA owned and Pre Foreclosures). Right now over 1 in 5 homes sold today in Pike Township is a recycled home (22.32%). In June it was almost 1 in 4 homes (24.9%).

There is a bright side to this for buyers. NOW IS THE TIME TO BUY!!! I can’t tell you how many bargains there are out there. Everyday I see houses that are under market value. Some may need a little work, BUT there are loans available that will include money for repairs. For the homes that need a lot of repair, investors have been buying them up. I deal with investors that are more than willing to buy a house, fix it up and rent it or resale it. They are getting some fantastic bargains.

To me it seems that house investing is a fairly new industry. When I started in the business, foreclosed on homes would sit on the market forever. Now investors are having bidding wars. If you are a non investor, you have to work quick. There are several communities in Pike where people are paying over list price just to win the bidding for recycled home.

The Pike Township Residents Association, Inc. (PTRA) is a non-profit organization that provides a forum for Pike Township neighbors to discuss regional and local neighborhood concerns such as land use, development, parks and recreation, transportation, schools, drainage and sewage problems, water supply, area beautification, etc. PTRA serves as an umbrella organization for local neighborhood associations as well as serving the needs of individual residents and businesses. PTRA meets on the second Wednesday of each month at 7:00 PM at the Pike Township Government Center ( 5665 Lafayette Road ) and this meeting is open to the public.

Typically at every meeting builders, developers and residents that want zoning changes or variances present their cases to the 20+ Board members. The Board can request commitments from the presenters. The Board will take a vote on the pitition. The vote is non binding but weighs very heavily with the downtown Zoning Commission who has final say.

Congraulations go out to Mr. Dan Kuznik, math teacher in the Pike Freshman Center. Last Thursday he was awarded 2008 Indiana State Teacher of the Year. A great honor for the Pike Schools System. From the schools news release;

Today, Dr. Suellen Reed, Superintendent of Public Instruction, visited the Pike Performing Arts Center to present the Indiana State Teacher of the Year Award to Mr. Dan Kuznik! Dr. Reed surprised Mr. Kuznik and the freshman family with the announcement at their annual ISTEP convocation.

According to an information release from the Indiana Department of Education, “Math teacher Daniel Kuznik knows that the essentials of education are commonly listed as curriculum, instruction and assessment, but he challenges himself and other educators to form strong relationships with students. This is why Kuznik was named the 2008 Indiana Teacher of the Year.”

Mr. Kuznik was selected to receive the honor by an Indiana Department of Education committee comprised of department personnel and external community and education leaders - including former teachers of the year. He was chosen from an initial pool of 53 public and nonpublic educators nominated by local superintendents across the state.

Superintendent Jones said, “I cannot think of a more deserving educator to receive this honor. Dan Kuznik is a committed educator who is passionate about making a positive difference in the lives of his students.”

“Mr. Kuznik clearly has the ability to connect with his students in an important way. The high expectations he sets for his students are a positive example for us all, and we are proud to have him representing us at the national teacher of the year competition.”

- Dr. Suellen Reed -

“Dan is one of those rare educators who understands and embraces the awesome responsibility of educating all children. His strength as a teacher is his ability to connect, interact and inspire his students to learn.”

- - Superintendent Nathaniel Jones -