Minneapolis

Warren Buffett had a good idea the other day.  He said instead of the government paying for all of the foreclosed real estate, private investors should be able to by 20% of the assets. This is similar to buying a house. You get a loan for 80% of the value and you put 20% down. Now the government would get the 80%, but private investors could buy 20% of the assets. These assets are rundown, vacant houses, but with a little work, there is a lot of money to be made. When the government buys these houses they are going to get a great deal. The banks don’t want them anymore, and the Feds have the money to take them. If they get them for a low enough price, the private investors can manage the properties, fix them up and sell them or rent them out and generate cash. Then when the real estate market turns around, they will be able to sell for a nice profit. I am making it sound simple. But in reality, that is what it is. People are trying to make this complicated, but they just want to confuse you. I think most people would agree that if you put up $140 billion to buy these assets you would probably care about what happens to them. Instead of some government employee who doesn’t really care that much and has no skin in the game. Right now there are a lot of real estate deals. I would love to be able to have $10 million and just invest it in real estate. Now that is a good idea.

I knew a floor sander who owned his own floor sanding company in Minneapolis once that wanted to add some value to his company.  He owned his company for many years and did a lot of work in Minneapolis, Edina, Richfield, and St. Paul.  He was a pretty good sander and always stayed busy.  But then, he made some bad investments.  He bought a lot of advertising that didn’t work, he bought some equipment that didn’t really improve the quality of his floor sanding, and he bought a big fancy truck with his companies name on it that got 10 miles a gallon.  But the kicker is, he bought it not with cash, but on credit.  When things slowed down he could not make his payments.  Things got tough and the creditors started calling and in the end they said they were going to take back his stuff.  The floor sander asked the government to give him the money he needs to pay off his creditors.  Now picture this.  Do you think that he should get the money from the government?  Obviously not.  This is what is going on with the bail out expect it is for the richest and most politically connected people in the world.  If you want to add some value to your Minneapolis home through hardwood floor sanding, give me a call and I will give you a free estimate.

I woke up this morning with frost on my window.  I got up around 6am and I went to my truck and there it was, frost, it is officially Fall.  We were starting a new floor sanding job in Golden Valley today off on highway 100.  It had nice 1.5 inch red oak flooring that just needed to be sanded and refinished.  The owner just bought the house and was fixing it up and getting ready to move in.  We got it all sanded today and got two coats down.  Tomorrow I will go back and buff everything out, do touch ups and put the final coat down.  So in just two days his floors were transformed.  They look a lot better the hardwood just pulls everything together.  If you live in Golden Valley, give me a call and I can stop by and give you a free estimate.  Don’t get too cold!

Eagan is a nice city.  It is close to the airport and the Mall of America and right off highway 77 that connects to highway 62 and highway 494.  Most of the homes in Eagan were build between 1950-1975.  A lot them have hardwood floors, mostly 1.5 red oak flooring.  About once a month my floor sanding company does job in Eagan or in Bloomington.  If your looking for a floor sanding estimate call today.

The government is going to spend $1.6 trillion to “fix” the economy.  Most of this money is going to buy foreclosed real estate that banks own right now.  The plan is to have the banks come to the government and say, “we will sell you our portfolio for 60% of the market price.”  The government will counter back and say, “no, well take it off your balance sheet for 22% of the market price.”  The bank will be mad, but will probably fall some where in the middle and say, “ok, fine, 35% of market price and you have a deal.”  Then the government owns it and they decide what to do with it and try to get as much as possible for the homes.  How does this affect home prices in Lake Nokomis?  Well, I live in Lake Nokomis and there are a lot of foreclosed homes.  One just up a came up a couple houses down from mine.  Say the bank that owns it right now wants $130,000, but the government buys it for $50,000, then sells it for $85,000, who wins?  government gets a profit, the home owner gets a deal, win-win right?  I don’t think so.  The government just printed more money to buy this Lake Nokomis real estate, got more in debt, and how do we know the true price for that  lake Nokomis home wasn’t $45,000?  Increasing the money supply always causes inflation which causes prices to increase, it make everything more expensive, and any money, or cash in your bank account becomes worth less.  I don’t know about you, but that doesn’t sound like a win-win to me.

Earlier in this decade the budget was $1 trillion a year for the federal government.  That is how much tax money was collected and that was how much was spent.  Now we just spent that same amount in a matter of days.  We bought all the foreclosures on the market from these banks.  Some say where did the money come from?  Well, we just created it, printed the money, literally.  China, Saudia Arabia, will own most of it, because since we don’t have it we have to borrow it.  So now what?  The banks balance sheets are cleaner, and the government now has the problem of getting rid of these assets.  I think there is going to be more opportunity.  People are scared, even after this.  Money is going to be tight, credit is going to be tight.  Inflation will go up, prices will increase, real estate will be cheap, very cheap.  the government is going to take the hit.  Real Estate prices in Minneapolis will go down.  Areas like Lake Nokomis, Lake Calhoun, South Minneapolis, and North Minneapolis, will all see prices drop.  Most of these houses need to be fixed up and sold, but who is going to lend somebody money?  I am trying to get a house right now and I can’t even buy it with 20% down.  There is an old quote, “the best time to invest is when there is blood in the streets.”  Well, get ready, because it is about to get bloody.

We just finished a job in bloomington.  The hardwood floors had urine stains all over the place.  It was bad.  But the owner didn’t want to put carpet in because it was going to be a rental and the carpet would just get destoryed in a year or two.  We decided to stain the floor a dark antique brown.  we used a staining technique called water popping to open up the grains in the wood to try to reduce the visabiilty of the stains.  It turned out great.  If you have urine stains on your hardwood floors in Minneapolis you might want to try staining them

What a difference.  A lot of homes in Crystal Minnesota have hardwood floors like this.  They have 1.5 inch red oak.  The floors are just beat up, totally worn down and they need to be sanded and refinished.  These pictures come from a old home that has been used as a rental unit for over 20 years.  The last time the floors were sanded was probably when Nixon was president. [click to continue...]

I get a call sometimes. People ask if they can lighten the look of their hardwood floors. I usually ask a few questions, but in general, yes you can. If you want to lighten the look of your floors you can sand and refinish them using a water based or oil based product. If you use a water-based product it will be lighter then an oil based. Most of the floors in Minneapolis, Richfield, Crysta, Edina, and St Paul have either oak or maple flooring, which are woods that can be sanded to look a lot lighter. Give Arne’s Floor Sanding a call today for a free estimate.