February 5, 2008

Mayor Michael Nutter to Deliver Keynote Address at Quarterly Meeting and Luncheon on March 17

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Philadelphia Mayor Michael Nutter will be the keynote speaker at the Association's Spring Quarterly Meeting and Luncheon on Monday, March 17. Nutter was sworn in as the 98th mayor of Philadelphia on Jan. 7. He is a native Philadelphian with an accomplished career in public service, business and financial administration. He served as a Philadelphia City Councilman for nearly 15 years representing the city's Fourth District encompassing the communities of Wynnefield, Overbrook, Roxborough, Manayunk, East Falls, Mt. Airy and parts of North and West Philadelphia.

The March Quarterly Meeting and Luncheon will be held at noon at the Park Hyatt Philadelphia at the Bellevue, Broad and Walnut streets. Tickets are available online at philadelphiabar.org.

Immediate-Past Chancellor Jane L. Dalton will be honored at the event. Dalton will be presented with a gold box, an exact replica of the one presented to Andrew Hamilton for his defense of John Peter Zenger in 1735. The gold box is presented annually to the immediate-past Chancellor and is inscribed with the message "acquired not by money, but by character."

Ethical Issues for Investment Management Lawyers Feb. 21

Join the Investment Companies Committee of the Business Law Section on Thursday, Feb. 21 for "Ethical Issues for Investment Management Lawyers."

Registration begins at 11:15 a.m. at the PBI CLE Conference Center, Wanamaker Building, 10th Floor. Information is available at pbi.org.

Volunteers Sought for LegalLine P.M. on Feb. 20

Volunteers are needed for LegalLine P.M. on Wednesday, Feb. 20 from 5-8 p.m. It is a great way for Philadelphia Bar Association attorneys to provide a public service to area residents who wish to receive quick and accurate legal information. LegalLine P.M. is offered the third Wednesday of each month at Bar Association offices. If interested please contact, Stephanie Mensing.



Is Buying a "Fixer- Upper" a Good Idea? by Lisa Getson

There are some homes for sale that are advertised as "fixer-uppers" or as being sold "as is." They require "tlc" or "tender loving care." This is reflective of the condition of the property. Usually homes like this have outdated kitchens and bathrooms. They require painting and flooring, among other things. Are these homes a good investment? It depends on the asking price, the amount of work to be done, and the ultimate price paid for the property.

The asking price for such a property should be reflective of the market value of the area and the condition of the home. There should be comparable houses in the neighborhood that have sold or are currently for sale, usually in average or above average condition. It is important to know what the home would be worth after all of the needed repairs. Once you have the end price established, calculate the amount of work to be done and then subtract it from the final price. This will back you into the appropriate asking price for the home, and it will usually be below current market value for the area.

The sale price of the home may depend on the buyer. If the buyer is an investor or a rehabber they will be limited in their purchase price as they have more costs involved. For starters, they have to pay transfer tax on the property both when they purchase it and when they re-sell it. They also have to pay a real estate commission on the resale. More than likely they own another home or homes and will be borrowing money to carry the new property while making the necessary upgrades. When deciding what improvements to make a rehabber always has to be sure that they are going to be able to quickly make a profit on their investment when selling the home. An investor who may consider renting out the property has to calculate if the monthly rental income is more than the monthly costs. This is all possible if the price paid for the property is low enough to allow for room for repairs and the final value of the home is significantly more.

If the buyer of the property is an end user, someone who is planning to live in the house, then they can usually pay a higher price for the property. They are still making a good investment. They are likely getting a house below market value for the area. There is more money available to make necessary repairs as there are no extra carrying costs involved and there is no worry about re-selling the property in a short amount of time. Furthermore, if an end user is handy they can do the work themselves.

There are some advantages to being an end user of a fixer upper property. First, you can usually get into a neighborhood that you may otherwise not afford. Second, you can make the upgrades to your liking. You can choose your own paint colors, put in the kitchen of your dreams and a bath to your satisfaction.

Whatever your position, as an investor, a rehabber, or end user, if the right property comes along that needs a little "tlc" it is worth visiting. And if the repairs are purely cosmetic and the house is structurally sound and the main operating systems are in good shape, it is worth considering for purchase.

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