MA Declaration of Homestead

October 16, 2009 By

In preparing for a recent closing on a refinance, it came to my attention that the Borrower did not have a Declaration of Homestead. A simple fix, but it is surprising how many property owners hold title without the protection afforded by the statute. Under Massachusetts law, an individual may declare a homestead in their principal residence thereby protecting up to $500,000.00 in their home from unsecured creditors (see General Laws of Massachusetts Chapter 188, Section 1).

Example: Joan owns a home, which is her primary residence, and has recorded a Declaration of Homestead. Joan’s credit card company seeks to attach $10,000.00 in credit card debt which Joan contracted for and defaulted on subsequent to the recording of the Declaration of Homestead. The credit card company would be barred from attaching this debt under the statute. It should be noted that Joan is still liable for this debt, but her interest in the property is protected.

Example 2: Dan owns a home, which is his primary residence, and has recorded a Declaration of Homestead. Dan has taken out a second mortgage with his local credit union. Dan then defaults on his second mortgage. In this example, the statute will not protect Dan. The credit union holds a security interest in the property and therefore is a secured creditor who would be exempt.

Summary:

  • A Declaration of Homestead protects the investment in one’s primary residence from the claims of unsecured debts up to a maximum of $500,000.00.
  • The Declaration of Homestead must be filed with the appropriate Registry of Deeds.
  • A Declaration of Homestead will not protect a homeowner from the following: (i) tax assessments, claims and liens; (ii) first and second mortgages; (iii) an execution issued by the Probate Court to enforce a judgment for support; (iv) court judgments based on fraud, mistake, duress, undue influence, or lack of capacity; and (v) debts contracted prior to the recording of the Declaration of Homestead.
Filed Under: Real Estate Law

The Bryant: Why Auction, Why Now?

October 9, 2009 By

Touted as a boutique luxury condo development that offered more expansive floor plans than neighboring buildings, the Bryant Back Bay missed its stride with the buying market and has reverted to an auction event to generate new demand for the some 45 units remaining for sale in the building.

According to LINK (one of Boston’s two MLS systems), 5 unites at the Bryant Back Bay, a 50-unit high-end development on the border of the Back Bay and the South End, have been sold.  These units have an average sales price per square foot of $826, a figure significantly bolstered by the sale of a single penthouse unit at $1,479 per square foot.

On paper, the development has a tremendous amount going for itself.  From a convenient and desirable location to direct elevator access floor-through units.  When construction began in October 2006, the building generated a significant amount of anticipation for sprawling three, and sometimes four, bedroom condos in a new construction Back Bay / South End building.  Yet there were a number of factors that ultimately impacted the Bryant’s ability to drive sales velocity.

The Bryant is a ground-up new construction building, and not unexpectantly, the development pushed out the scheduled occupancy date five times, and in the end, missed its mark of opening by over a year.  Buyers, rightfully so, are hesitant to buy in earlier to a new development, oftentimes signing a purchase and sale agreement months before construction completes, however, if the occupancy date is continuously pushed out, Buyers become even more hesitant to place reservations in a building, tying up personal capital in deposits of anywhere from 5-10% of a unit’s purchase price.  One of the most notable concerns from Buyers was the proximity of the Bryant to the 131 Dartmouth building, and the potential impact it could have on views and light in the Bryant.  If you fast forward to the present, while 131 Dartmouth is immediately visible outside of the Bryant’s bedroom windows, 131 Dartmouth tapers away from the Bryant, and especially in the summer months, this spacing allows light to pour into the back half of units.  Nonetheless, Buyers weren’t able to gain this knowledge first-hand because a model unit was not developed inside the building until late in the Bryant’s sales cycle.  In lieu of a true model unit, potential Buyers visited the sales center adjacent to the Bryant to see a sample kitchen and bath, but unfortunately, could not get a true feel for lighting and flow of an actual unit in the building.

During the latter half of 2007, another luxury condo development, 285 Columbus Lofts, began construction (or more accurately, began redevelopment).  Unfortunately for the Bryant, 285 Columbus Lofts was two doors down the street, and while the two buildings differ on some levels, the property represented direct competition for the Bryant at a lower price point.  It was during the latter half of 2007 and early part of 2008 when the Bryant made its biggest slips.  While the Bryant began pushing out its occupancy date from Spring 2008 to August 2008, 285 Columbus Lofts actually moved their occupancy date up, from June 2008 to May 2008.  And the key here was that 285 Columbus Lofts delivered on their prediction.  This was the first condo development to be delivered on time or ahead of schedule in quite some time.  Price points at 285 Columbus Lofts were lower, and the development was quickly approaching sold out status when it opened its doors to residents in late May 2008.  Nothing should be taken away from 285 Columbus Lofts launching so quickly, and finishing ahead of schedule, but as it relates to the Bryant, 285 Columbus Lofts did have a leg up on the competition by doing a gut rehab project versus a ground up new building construction.

In the spring of 2009, the Bryant was rebranded from the ‘Bryant on Columbus’ to the ‘Bryant Back Bay’, and in conjunction with that, the developers, Vornado Realty Trust and Wasserman Real Estate Capital LLC, switched listing brokerages from Otis & Ahearn to Campion & Company.  The renaming of the development attempted to drive deeper association with the prestige of the Back Bay versus any connotations the development carried sitting on the border of the Back Bay and the South End.  Despite 3 additional units going under agreement relatively quickly following these changes, the shifts still left 90% of the building sitting vacant, and the developers decided to leverage an entirely different strategy to generate cash flow and take out existing debt, an auction.

Accelerated Marketing Partners, led by Jon Gollinger, announced on September 22, 2009 that they would take 10 of the available 45 units from the Bryant Back Bay and auction them off to the highest bidder during an October 17, 2009 auction event.  Gollinger’s thoughts are that rather than drag out the normal listing process, it’s much more effective to sell a bunch of units at once, figure out what the market is willing to pay, and then coordinate prices on any remaining units in the building.  This tactic, of auctioning only a small pool of remaining units in a building followed by trying to sell remaining units post-auction at auction prices (auction pricing without the auction) is a tactic that has been relatively effective for Nouvelle at Natick.  The Nouvelle development recently auctioned off 43 units, and in a week’s time, has sold 17 additional units at prices established at the auction (see Nouvelle at Natick Condo Auction Results).

There will be seven 3-bedroom units and three two-bedroom units auctioned at the Bryant on October 17th, with minimum bid prices ranging from $1,075,000 to $1,475,000 ($476 to $811 per square foot). The appraised value of the Bryant Back Bay condos will be left to lenders, but Buyers can look at average sales price per square foot for the past 6 months in the Back Bay of $746 and the South End of $577 as a very high-level starting point.

Given the legacy of the Bryant Back Bay project, an auction to at least kick start sales velocity for remaining units in the development appears to be the next logical option in the sales process, especially in light of success that the auction sales format has had on other downtown Boston, and metro-Boston, properties.

Filed Under: Back Bay Condos, Boston Tagged With: , ,

Boston Landlord & Investor Group Annual Conference

October 7, 2009 By

On October 14th, 2009, The Boston Landlord and Investor Group, a 2,000+ member strong organization, will hold their annual conference with the theme Investing in Real Estate: How to Proposer in the New Economy.

The free conference aims to provide an informative overview of Boston’s current real estate market, and will assemble four Boston real estate experts that will speak about the local real estate investment market, future real estate trends, and opportunities to invest in Boston.

Guest speakers for the event include:

  • Jeanine Hall, VP of Lending at Citibank
  • Simon Butler, Executive Director at Cushman & Wakefield (Sold in excess of 25,000 apartment rental units valued at more than $3.2 billion)
  • Debi Benoit, Vice President at Coldwell Banker (Sold more than $725 million in real estate and Wellesley’s #1 broker from 2006 through 2008)
  • Terry Hillery, President of Hillery Holding Company (Privately held real estate company with an established track record of successful Boston developments)

The conference will provide an opportunity to learn what local real estate experts are doing, what they think you can do in order to profit in the new real estate economy, and what their predictions are for the future.

When: Wednesday, October 14, 2009 at 6:30 PM
Where: Citibank (1st floor) 491 Boylston St. Boston, MA 02116 (between Clarendon St. and Berkeley St. in Back Bay)

To register for this free event, please RSVP to Matt Martinez at: info [at] landlordandinvestor [dot] com. For more information, please call (617) 448-5550.

Filed Under: Real Estate Investing

Nouvelle at Natick Condo Auction Results

October 5, 2009 By

Over 400 potential Buyers crowded into a standing room only Crowne Plaza Natick Hotel to purchase 43 auction units and 12 additional post auction units at prices between 34% and 64% of their most recent asking prices.

The Nouvelle at Natick condo auction’s goal was to kick start sales at the troubled luxury condo development adjacent to the Natick Collection Mall, and despite the developer, General Growth Properties, not seeing the selling prices they would have liked, the auction brought the occupancy rate in the 215-unit building from 17% to approximately 43%, and more importantly, the market established a consumable price point of approximately $300 per square foot for remaining units.  The lowest purchase price at the auction was $249,000 for a 1 bedroom 1.5 bathroom condo, and the most expensive was $628,000 for a 3 bedroom 2 bathroom penthouse.

General Growth Properties, which has filed for bankruptcy because of the happenings at Nouvelle at Natick, looks to the auction to set a price point as established by the market, and is now poised to re-engage the market through a normal sales process on the remaining units, but at auction prices.  The plan has worked well so far, as 12 additional units, above and beyond the 43 brought to auction, sold yesterday following the auction.

The method will be tested again in the downtown Boston market when the Bryant is taken to auction (see Bryant Back Bay to Auction 10 Luxury Condos) in a similar fashion on October 17th – 10 units in the 50-unit development are slated for auction.  Similar to the Natick auction, the intent is to clear inventory, generate cash flow, and ultimately re-engage the buying market on remaining units (tentatively 35 units will remain for sale following the auction) in the luxury Back Bay / South End development.

Filed Under: Boston Condo Auctions Tagged With:

South End Listing Prices Adjusted…Up

September 28, 2009 By

In the face of a luxury condo auction less than four blocks away (see Bryant Back Bay to Auction 10 Luxury Condos), listing prices at the Atelier 505 building, the South End’s first large-scale luxury condo development, are actually being adjusted up, rather than down.

Unit 307 at Atelier 505 was listed for sale on September 8, 2009 for $1,750,000, and 20 days later, a price adjustment of $45,000 has taken place.  The interesting note is that the price adjustment is up, not down, and the condo is now listed at $1,795,000.  The condo boasts 1,810 square feet ($992 per square foot), 2+ bedrooms 2.5 bathrooms, floor to ceiling windows, and 2 deeded garage parking spaces in the onsite underground garage.

Atelier 505 - Unit 307

In the past six months (according to MLSPin, one of Boston’s two MLS systems), of the 296 units that sold in the South End, there have been 17 condos that have sold for prices higher than the original listing price.  Condos such as unit 317 at Wilkes Passage sold for $31,000 over its original asking price on August 28, 2009, or unit 3 at 116 W Concord Street sold for $10,000 above the original asking price on September 24, 2009.  This adds to the 13 units that sold for full original listing price during that same time period.  There are, nonetheless, instances that go in the opposite direction, including 437 Columbus Avenue unit 4, which labored on the market for 262 days and closed $89,000 below its original asking price.  Clearly, being priced “right” out of the gate is a clear predictor in a unit moving quickly and at or above its original asking price, as the units that sold for at or above original listing prices over the past six months had an average days on market of 21, compared with an average of 76 for those that sold for anything less than full asking price.

Perhaps part of the allure to an auction format that South End / Back Bay residents will soon see when the Bryant condos are auctioned on October 17th is that the units will inherently be priced “right”, not arbitrarily, but by the uninhibited economic forces of the market.

Filed Under: South End Condos Tagged With: , ,

Bryant Back Bay to Auction 10 Luxury Condos

September 22, 2009 By

After multiple project occupancy delays, changes in listing brokerages, and amongst rumors swirling this past week, the Bryant Back Bay condo auction has been announced by Accelerated Marketing Partners.  The auction event, slated for Saturday October 17th,  will offer 10 luxury floor-through direct elevator access units with minimum bids starting at $1,075,000.

Similar to the recently announced Nouvelle at Natick auction (see Nouvelle at Natick Condo Auction), the Bryant Back Bay, a somewhat boutique 50-unit development, is currently advertising that only 10 of its some 45 available units will be brought to auction, in an effort to eventually kick-start market sales of other units, a tactic that has not yet been tested in the downtown Boston market.

The property is available for previews September 22 – October 16 (Monday to Sunday noon – 6 PM) onsite at 303 Columbus Avenue Boston, MA 02116.

The auction will take place on Saturday, October 17, 2009 at the The Colonnade Hotel located in the Back Bay at 120 Huntington Avenue Boston, MA 02116.

Bryant Back Bay Auction

Filed Under: Boston Condo Auctions Tagged With: , ,

Parking Spaces Gold Standard in Turbulent Times

September 21, 2009 By

While the Boston real estate market has remained relatively resilient in the face of the US housing slump, there is a niche within the residential real estate market that most oftentimes flies completely under the radar of downward trends.  Parking spaces.  These small deeded pieces of land represent a viable option for investors who seek investment vehicles for available cash.

The acquisition of parking spaces in downtown Boston represents a risk-mitigated means by which to enter the real estate investment arena, and has the capability of producing a steady return on investment above and beyond what is available via common investment vehicles that are leveraged for both short and long term semi-liquid investments, such as certificates of deposit or money market accounts, which at present, are returning 2% per year at most.

Simply put, the supply of parking spaces in downtown Boston has not increased quickly enough to satisfy demand (see Snowed In? Garage Parking Spot Investment Looks Clear).  The simple concept of supply and demand is tried and true.  The investment numbers tell a positive story as well.  Take a $50,000 parking space in the South End of Boston purchased with cash, assume monthly rental income of $225, a vacancy rate of 5%, and after accounting for HOA expenses, you have approximately a 5% pretax return on your equity investment.

Despite the downtown Boston residential market maintaining strength, there has been a host of both rumors and news stories about market activity, such as auctions, that inevitably create uncertainty and ambiguity in the market as it relates to value.  In the face of that situation, deeded parking spaces, which are purchased in a very similar manner as to any other piece of real property, present the real estate investor a viable means by which to invest into the downtown Boston market, while at the same time not subjecting themselves to the same types of risks inherent with housing investments (see current list of Boston parking spaces for sale).

Filed Under: Real Estate Investing

First Resale Flip at 1850 Lofts

September 15, 2009 By

With talk of the Nouvelle at Natick condo auction scheduled for October 4, 2009, the 1850 lofts auction that took place in late June 2009 almost seems like it is in the distant past (see Buyers Prepare for 1850 Condo Auction). It was June 28, 2009 when the 1850, a South End loft-style condo development, went to auction selling out the remaining 35 units in the building, and it was in August that units in the building actually closed.

On August 7, 2009, unit 511, a 780 square foot loft closed at a purchase price of $325,000.  Unit 511 was one of the 35 units sold at the 1850 auction, with a price per square foot of $417, well below the average price per square foot sales price of $582 in the South End during 2009.  Fast forward just over one month, and unit 511 is now listed as a resale in the 1850, and represents the first flip in the building, pre or post auction.

Coupled with the presence of a deeded onsite parking space, sold at a flat $35,000 each during the auction, unit 511 represents a quick flip of an auction property without the large profit expectations some flippers had following the last downtown Boston condo auction at the Broadluxe (see Flip That Condo at Broadluxe).

Filed Under: South End Condos Tagged With: , ,

Boston Meet the Schools Fair

September 14, 2009 By

In an effort to help students and their families decide where to attend school in the Boston area, the Charlestown Mothers Association (CMA) is organizing the 2nd annual Meet the Schools Fair on September 30, 2009 from 6 PM – 8 PM.  Charlestown, and greater Boston area, families have a host of choices between public, independent, and parochial schools, and while visiting schools is an important part of the school selection process, learning about them from a representative in the comfort of your own community is additionally helpful.  It was this thinking that prompted the CMA to organize and host the first Meet the Schools Fair last year.

“We thought it would be really helpful for Charlestown families to be able to get initial information about a school and learn about their options under one roof. It is also a great way for the school representatives to meet us, experience our neighborhood, and see the number of families committed to Charlestown” said CMA member and School Fair oordinator Leslie Sullivan.

Last year’s fair drew attendance that prompted the CMA to move to a larger venue this year to give school representatives and families more room to exchange information.  This year, in addition to school representatives, a representative from the Massachusetts Education Financial Authority will be on hand to discuss the UFund, a college savings plan. Additionally, CMA is attempting to secure attendance of a representative from the School Committee to speak with residents about the public school process including topics such as the lottery system, walk zones, waiting lists, etc.

The public is invited to meet representatives from over 30 schools including:

  • The Advent School
  • Beacon Hill Nursery School
  • Boston Children’s School
  • Boston College High School
  • Boston Latin School
  • Boston University Academy
  • Buckingham Browne & Nichols
  • Cambridge Friends School
  • Charlestown Nursery School
  • Child Focus Center
  • Dexter and Southfield School
  • Fayerweather Street School
  • The Good Shepherd School
  • Harvard-Kent Elementary School
  • International School of Boston
  • John Eliot K-8 School
  • John Winthrop School
  • The Kennedy Center
  • Kingsley Montessori School
  • The Learning Project
  • Milton Academy
  • Mount Alvernia Academy
  • Mount Saint Joseph Academy
  • The Park School
  • Park Street School/Park Street Kids
  • Pine Village Preschool
  • The Rivers School
  • Roxbury Latin School
  • Saint Clement School
  • Saint Raphael School
  • Shady Hill School
  • Spruce Street Nursery School

For a complete list of schools attending, please visit the Charlestown Mothers Association website.

The Meet the Schools Fair will take place at the Knight of Columbus Hall, 85 West School Street in Charlestown on Wednesday, September 30, 2009 from 6 PM – 8 PM.

Filed Under: Boston

Nouvelle at Natick Condo Auction

September 10, 2009 By

General Growth Properties, the developer of the 215-unit luxury Nouvelle at Natick condo development west of downtown Boston, has turned to Accelerated Marketing Partners to auction off 43 of the Nouvelle residences on October 4, 2009 in an effort to kick-start new sales and provide operating cash flow to the bankrupt mall operator.

Nouvelle at Natick opened in 2008, and has sold or gone under agreement on 37 of the 215 available units (17%).  Minimum bids at auction will start at $160,000 (796 square foot 1 bedroom 1.5 bathroom), which is approximately 70 percent below the most recent asking prices.  In preparation for the auction on October 4th, a daily open house up until October 3, 2009 will take place onsite at 10 Nouvelle Way, Natick, MA 01760.

While it has not been announced that the entire inventory of remaining condos at Nouvelle at Natick will be up for auction, the development joins Longwood Towers as the second large-scale condo development just outside Boston to go to the auction block in 2009.  In downtown Boston, the 35 remaining lofts for sale at the South End’s 1850 condo development were auctioned in late June 2009 (see Buyers Prepare for 1850 Condo Auction).

Filed Under: Boston Condo Auctions Tagged With:
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