Category Archives: Real Estate

Making the Most of The Outdoors: Decks

With spring approaching, many of us are dying to get outdoors, some of us are itching to refinish our wooden decks and others of us are resisting the urge to rush out and plant our seeds too early!

Decks usually need re-finishing every three years or so, and it will soon be dry enough to make a start. Preparation of decking (or any exterior wood) is very important. Wood is more prone to difficulties than other materials are and it must be well protected from the elements, particularly direct sunlight and heavy rain.

Decks cannot be finished until the weather is quite dry; this is because the deck wood needs to be completely dried out before applying sealers etc.

If you decide to re finish your deck, you will need to do it in two stages; first there is the stripping and cleaning and then there is the finish – either paint or stain. All decks need to have water repellant and preservative applied to them, preferably not by spray but by hand painting. Even redwood and cedar need a water repellant.

Common problems include flaking paint, mold and discoloration, usually from exposure to the elements.If you find isolated patches of flaking paint you can scrape and sand it off and simply re-prime it then paint it over.

Mold will usually indicate moisture from somewhere, so check your down pipes or see if your gutters are full of leaves. This can be remedied by washing the wood with a fungicide and then once you are sure it has been rinsed off and dried properly, apply primer and paint.

In some cases there may be mold or rotting wood from termites, in which case cut the wood, burn it and replace. Keeping the paint jobs up to date is often a deterrent for termites. Bare wood soon turns gray but the color may be able to be brought back with wood cleaner and then you can apply a natural finish.

Bad cracks need to be filled with filler that has some flexibility before priming the area and repainting. When you apply stripper, roll the stripper onto the deck (water based stripper will not harm plants) and force yourself to wait 20 minutes.

Use a garden hose to wash off or a power washer. (Note: if you use a power washer you may have to sand the wood afterwards to get rid of the fuzzy effect from the friction of the washer.) After two or three days to let it dry you can finish off the prep.

If you are using paint, the higher the price – the better the quality, the words premium or quality may be an indicator. Of course, you will pay more, but how long does it take you to paint a deck? Maybe you will save yourself extra labor time if you do not have to repaint it for five years instead of three. Look for water repellant qualities and UV blockers.

Some painters recommend two coats of primer sealer and one of top coat and some recommend two coats of top coat and one of primer! It would seem that one or the other of the paints better have two coats! Using a quick drying self priming alkyd paint is ideal.

If you want to go with staining, a stain that is heavy bodied will show up the grain but not the texture, whereas lighter bodied will still show the texture. Coat the stain with a sealer once it is dry, one that says it is ‘non chalking’ to avoid your finish being rubbed off with wear.

A protective finish will make your work last longer no matter which effect you are going for. If the deck is new remember to let it weather for a month or two so that it will better absorb the stain; also seal any knots in the wood before you primer.

Investors – How To Buy a House For Your Rent To Own Inventory

First and foremost, this article is for investors. As an investor, you should not (must not) have any emotional ties to any of your properties. You are in this business to make a fair and honest profit, and you will sell your home(s) when it makes sense to do so. Your goals should be to buy low and sell high, generate a positive cash flow while you own the house and use as little of your own money as possible. OK, so now how should you go about buying a house for your rent to own inventory of homes?

Location: Stay in your comfort zone. If you are not familiar with the laws and regulations in other states, stay in your home state. If you must “touch and feel” (see) your properties, stay within a comfortable driving range. If you are not comfortable with certain types of neighborhoods, whether it be an urban blight area or upscale posh area, don’t go there. There are plenty of opportunities in your comfort zone. All you have to do is find them and BE PATIENT.

Buy low: The best way to do this is to find a motivated seller. Here are some obvious (and some not so obvious) ways to find that seller:

1. Search the MLS listings in your preferred location(s) for properties that have been listed for more than 90 days.

2. Check public records for foreclosures and/or tax delinquencies.

3. Read the obituaries in your preferred location(s). There might be a house in the estate that must be sold.

4. Check public records for divorce filings. Many times a house must be sold to satisfy a Judgment.

5. Advertise in local newspapers and on the web (for example, place a free wanted ad on JSC Rent To Own Homes).

6. Look for a high growth area where builders are extremely active. You will discover there will be people who are unable to sell their home because the builder incentives are capturing all the qualified buyers. These neighborhoods are usually very desirable, and there are motivated sellers unable to sell. That sounds like an opportunity, doesn’t it? Here is your advantage. The person that you will try to find to rent the house after you buy it probably is not a qualified buyer to the builder. Builders want bank qualified buyers. Typically, people who are seeking a rent to own opportunity do not qualify for a mortgage with a bank. All you have to do is have a good renter/buyer lined up to move in to that desirable neighborhood.

7. Let your good renter/buyers find their own rent to own home. If you have a good prospective renter/buyer that is asking for your help (and you will if you do your job properly), give them the opportunity to find their own rent to own home. You have to set the ground rules, and they will think you walk on water. It is strongly suggested you develop a relationship with a good realtor who will follow your ground rules, take your renter/buyers on showings (most homes are listed anyway) and save you the time of doing this yourself.

Bottom line – If you find a motivated seller, you should be able to buy the property below appraised value.

Sell high: In this scenario, sell high refers to the option price you will set with your renter/buyer. Keep this in mind – If your renter/buyer was able to qualify for a mortgage today, he/she would probably not be your renter/buyer. He/she would simply buy a house without your help. Furthermore, the renter/buyer is probably a frustrated renter who wants to be a buyer. In other words, you have a motivated prospect, and that prospect should understand that you are a business person who is entitled to a FAIR profit in exchange for the risk you will take to help them. Bottom line – your prospect is probably not very price sensitive, and he/she will probably accept any fair number. In my opinion, a fair option price should be the current appraised value (not necessarily what you paid for the property) plus an amount equal to the average annual rate of increase compounded annually for each year of the option term. Allow me to explain by way of example:

First, try to keep all of your option terms to one year. It’s to the seller/landlord’s advantage. So, assume you own a house with an appraised value of $150,000 and prices have been increasing an average of 8%. For a one year contract, you should set your purchase price at $162,000 ($150,000 + 8% of $150,000 or $12,000); a two year contract, $175,000 ($162,000 x 1.08 = $174,960).

Positive cash flow: Cash flow is defined as the amount of money you receive per month minus the amount of money you spend per month. Obviously you want that to be a positive number.

1. First let’s look at how to minimize the amount of money you spend per month:

Your mortgage loan: You could put a large amount down to minimize your monthly payments, but that would not be wise. The best thing you can do is find a good lender who is willing to work with you. They are out there. A good lender will realize that you will bring in many deals, and most up front fees should be greatly reduced if not eliminated. Ideally you should be able to borrow up to 90% LTV amortized over 30 years without having to purchase mortgage insurance. You should avoid high interest fixed rate loans. You plan to sell the house in a short period of time so a 30 year variable rate loan with a fixed interest rate period of 3 or 5 years will be much better. In our example, we borrow $135,000 at 5% amortized over 30 years. That is approximately $725 per month (principle and interest) Furthermore we use an additional $300 per month for taxes and property insurance.

The lease: Your tenant is not just a lessor. Contractually he/she has the right to become the owner of the home. As such the tenant should develop a "pride of ownership" attitude and be responsible for most of the minor maintenance issues that arise with any home.

Ownership: Get a good real estate attorney and an accountant. They should be able to explain the advantages/disadvantages of personal versus LLC ownership including liability issues. This will help you determine the extent (and cost) of insurance you will want to have.

2. Now, let’s look at how to increase the amount of money you receive every month:

Here’s a little known fact – Over 90% of all people who enter into a rent to own agreement fail to exercise their option after one year! Do you remember I said to try to keep all of your contracts to one year? Besides maintaining better control of your investments, this little known fact can be hugely advantageous to you, the business person. Now, PLEASE keep this in mind; if you have a GOOD tenant who is unable to exercise his/her option, WORK WITH THEM. You should renegotiate a second year to your advantage, but not one that would force a good tenant to leave.

OK, here’s what you should consider (by way of example).

Using the above example, a reasonable contract might stipulate an option consideration of $8,000 (to be fully applied toward the down payment upon exercising the option) and a monthly rent of $1,100 per month of which $100 will be applied toward the down payment providing that monthly rent payment was made on time. After one year, assuming all rent payments were made on time, the tenant/buyer will have accumulated $9,200 in credits ($8,000 plus $100 per month). One can view the actual monthly rent as $1,000 assuming the option is exercised. If the tenant/buyer fails to exercise the option for any reason, That $9,200 is forfeited by terms of the contract.

To increase your cash flow, offer the tenant/buyer greater credits in exchange for a higher monthly rent. For example, in exchange for $1,300 per month, offer the tenant a $400 rent credit for every on-time payment received. Now, it can be viewed as a monthly net rent cost of $900, and the total equity built would be $12,800. If you present this properly, you can let the tenant negotiate for higher rent payments! You will have a much better cash flow, and there will still be a nice profit if the option is exercised provided you properly purchase the house. If the option is not exercised (90%+ odds it won’t be exercised), you keep all the rent monies paid. But, again, PLEASE keep this in mind; if you have a GOOD tenant who is unable to exercise his/her option, WORK WITH THEM. You should renegotiate a second year to your advantage, but not one that would force a good tenant to leave.

Use as little of your own money as possible: With diligence and patience, you will be able to buy a home for less than appraised value.

Little Ideas That Bring Big Dollar Increases When Selling Your Home

by Dan Pool © 2006

When you’re selling, home price is everything. Your goal is to maximize the amount you get for your home as much as possible. Many people believe that – in order to significantly raise their home’s value – they must perform extensive and costly renovations. While adding a new bathroom or bedroom certainly does increase your asking price when selling, home improvements don’t need to be that dramatic to be of help. Here are several little home selling tips that can bring big dollar increases.

Aesthetics are vitally important when selling a home. For little or no money, you can greatly improve your home’s appearance and, in turn, its selling price. In return, buyers will have a more favorable impression of your residence.

Clean, Clean, Clean

No one will be impressed with a house that is dirty. One of the best (and cheapest) investments you can make is in a thorough spring-season cleaning for your home. In addition to the regular mopping and dusting you do, clean the windows (inside and out), clean carpets, wipe down walls and baseboards, clean fingerprint marks off interior and exterior doors, and sweep the fireplace (if you have one). People are always more inclined to pay higher amounts for homes that look as though they have been well cared for.

Pack Personal Items & Clutter

Once you have cleaned your home to prepare it for selling, home clutter is the next project to tackle. One of the best home selling tips I offer is to keep packing boxes on hand. As you go through your belongings, immediately put items you want to keep into boxes and label them. This accomplishes two things. First, it helps you stay ahead of all the packing you must do for your move. Second, it allows you to keep clutter at bay. Another great use for packing boxes is for spur of the moment hiding places for clutter. If a prospect wants to see your home at the last minute, temporarily toss piles of clutter into moving boxes and close the lids.

Curb Appeal

Another great home selling tip is to increase your curb appeal. When prospective buyers drive up to your home, are they immediately impressed with what they see? A fresh coat of exterior paint, an extensive pressure washing of vinyl siding and some new, inexpensive shutters can really make an impact on buyers. In addition, adding or upgrading landscaping details can be helpful as well. Replace old, faded mulch or pine straw with fresh. Edge your driveway and sidewalk as well as your flowerbeds, and make sure bushes and scrubs are neatly trimmed. These items are a small investment that will pay off with a quicker sale at a potentially higher price.

Single Fee Real Estate Broker

Even greater than the money you can gain with small improvements is the money you can save on real estate commissions. Fees and commissions certainly take away from the amount you earn on the sale, yet most sellers don’t have a plan for saving money in this phase of the process. The best home selling tip I can offer is to use a single fee broker. Single fee brokers will sell your home for free if you agree to purchase your next home through their office. This can save a typical homeowner thousands of dollars in commission fees and is, without a doubt, the best way (and the easiest way) to make more money on your home sale.

Increasing Foreclosure Problem

The recent report released by Mortgage Bankers Association on Mortgage Foreclosure numbers, revealed that at present the mortgage market is involved in the most awful foreclosure crisis in the recorded history. It is almost 15 percent of the sub prime borrowers defaulted and the prime borrowers have started to follow suit. During the last few years, many people with the help of easy credit and adjustable rate mortgages bought big and expensive homes; thinking that when the home price will rise and they will be in profit.

The rate of foreclosure during the last quarter has passed the highest point recorded 54 years back in the year of 1953. The number of sub prime borrowers those who are currently behind on their home loans has increased to 14.82 percent. The homes that are purchased with 2/28 adjustable rate mortgages are under the highest percentage of foreclosure. The credit crunch is not only making mortgage financing tougher but also it also pushing more homeowners towards foreclosure.

According to most recent Mortgage Bankers Association’s survey, the foreclosure crisis is likely to increase in the near future. Since during the last quarter, the foreclosure rates in states like California, Florida, Arizona, Indiana and in few other states almost touched the sky, so it is expected that the foreclosure problem will become worse in the coming period before it stabilizes again.

It is expected that the number of foreclosures and payback delinquencies will rise during this quarter and may be in the next quarter too. Since the mortgage interest rate is rising high once again due to the fall in the home prices, the act of refinancing has become more difficult for the current borrowers those who are not comfortable with their current interest rate and wants to refinance at some lower interest rate.

According to Mortgage Bankers Association, the main reasons behind the foreclosure crisis is the 2/28 adjustable rate mortgage and the economic condition that is under pressure. Most of the foreclosures in the mortgage market are the result of these adjustable rate mortgages that normally offers low introductory interest rates and when the rate adjusts after a few years, most of the homeowners find difficulty to meet their monthly payments. With more Adjustable rate mortgage expected to reset this year and in the coming year, it is probable that the rate of foreclosure will also increase during that time.

After Federal Reserve tried to stabilize and control the mortgage market by its cut down in the federal fund’s rate. The democratic leaders are also concerned about the condition of the market. Last week they approached President’s administration to appoint a person who will have the authority over the federal mortgage and will coordinate with the government to reduce the increasing number of home foreclosures. They also proposed for $200 million as funding for foreclosure prevention.

The democratic leaders have also proposed to give government approved nonprofit money to the help the homeowners those who are facing problems in making their mortgage payments. If not the program, then at least the news can become a reason for temporary smile on the face of the homeowners and the lenders.

Las Vegas real estate

Is Las Vegas real estate really a wonderful real estate investment option? Well, probably yes. With the population on the rise and the economic indicators signalling growth, one would assume that Las Vegas real estate should be on the cards of any real estate investor. A lot of businesses are getting setup in Las Vegas. So all those developments combined with the fact that Las Vegas is what Las Vegas is, have made Las Vegas real estate investment a really attractive option.
The uptrend in Las Vegas real estate can also be judged by the fact that the rents in Las Vegas have moved up quite a bit in last couple of years. With new facilities being added and with more businesses getting setup, you would expect the unemployment rate to go down for Las Vegas (which actually is the case). Moreover, as there is more influx of people and businesses, Las Vegas real estate would be expected to be in demand (both for business purposes and residential purposes). The appreciation of Las Vegas real estate can also be contributed to the avenues for enjoyment that exist in Las Vegas.
A lot of people have made a lot of money by investing in Las Vegas real estate and a lot of people have started investing in Las Vegas real estate. However, as is the case with any real estate investment, you must evaluate your options carefully before you actually go for Las Vegas real estate investment.
If you are full time into real estate investment business in and around Las Vegas, then you must already be looking at various investment avenues in Las Vegas real estate not just from the perspective of new developments but also from the perceptive of existing/ evergreen Las Vegas real estate investment opportunities (i.e. in terms of distress sales, public auctions of property etc). However, if you do not live in Las Vegas or anywhere near Las Vegas, but want to invest in Las Vegas real estate, then your best bet would be to find a Las Vegas real estate broker or maybe just look for the Las Vegas real estate listings over the internet. If you are unable to find other avenues easily, you might consider investing in new Las Vegas real estate developments i.e. new constructions. However, you need to pay heed to the growth indicators before you make the move to invest in Las Vegas real estate.

Housing Down Payment Assistance

As home prices continue to appreciate throughout the nation, down payments become harder to make. Housing down payment from HUD may be the answer.

Housing Down Payment Assistance – HUD

One of the biggest financial hurdles to the American Dream of owning a home is the down payment. The magic number with down payments is twenty percent of the value of the home. If you can put down this amount, you avoid expenses such as private mortgage insurance and get a head start on building equity in the property. It can be hard, however, to come up with twenty percent on a home selling for $300,000, to wit, you need $60,000!

Homes can then be purchased through HUD and financed through FHA-approved low interest loans. In addition, HUD offers other services including housing down payment assistance. Although HUD does not offer these directly to the public, it has DAPs in place. A DAP is Downpayment Assistance through Secondary Finance Providers. These providers are backed by HUD and offer no to low interest loans that be used for down payment assistance when it is needed. Instead of financing your home purchase, they finance the down payment required for the purchase.

As you might imagine, financing you down payment in addition to your overall real estate purchase raises some questions. First, should you buying the property in question if you have to pursue both financing options? Owning a home is a great financial move, but you might be biting off more than you can chew by going in this direction. Second, perhaps you should choose a home with a lower price? This double finance situation means you are going to be paying a lot of interest to get into that home. Ultimately, you might regret doing so when you realize you will never see it again.

Housing down payment assistance through HUD can be incredibly useful. In fact, all of the services offered through HUD can greatly assist any potential homebuyers. They offer great, low cost homes and offer assistance to homeowners who are struggling to make the payments on their own home. This service should be taken advantage of when necessary.

Estimate the Market Value of a Property

Often people fail to make a profit from property investment when they do not understand the true market value of their chosen property, both in terms of resale and rental income.

Investors hoping to purchase a run-down home or off-plan development and sell it on at profit when the work is complete; a practice known as flipping, are often caught out by over-inflated prices or under-estimated renovation costs.

On the other hand, buy-to-let investors can be seduced by suggestions of high rental values and then disappointed when these do not materialise.

Whether you’re planning to flip a property or buying-to-let, it is important to ensure that you do not pay over the odds, as money saved on the purchase price will lower your mortgage costs and increase your profit margin.

Understanding the local market

One of the best ways to estimate the potential value of a property is to understand the local market. Fortunately there are a number of tools to help you do this:

Use the internet – The Land Registry ( now provide information on all properties sold in England and Wales since 2000. Through this you can access information on the property’s value when the registration took place. Remember this information will not be up-to-date, but it may give you a broad idea of what the current owner paid.

Browse estate agent listings – Using the internet and local papers, you can soon get an idea of the market value for different types of property in the area. It is also worth arranging a couple of viewings, allowing you to make suitable comparisons when you have decided on a place to purchase.

If you are planning to buy-to-let, it is also worthwhile speaking to a few letting agents to try and gauge the general rental prices that could be expected. Again rental listings on the internet and in local papers will help to verify the amounts tenants will be prepared to pay.

Seek professional advice

Once you have decided on a property and feel confident that it reflects the true market value, it is advisable to carry out a full survey.

Although it is a requirement for mortgage lenders to inspect the property, the surveyor will not look at inaccessible parts (such as the roof, floors and drains), unless there is reason to believe that there may be a serious defect, in which case it is likely that a recommendation for a more in-depth survey will be made.

The risk of relying on this basic inspection is that the surveyor could miss an important defect which will be expensive to repair. By having a more in-depth survey, the surveyor will be able to identify such defaults and advise on the potential cost of repair, allowing you to negotiate a discount on the purchase price to cover this.

Take your time

Unfortunately there is no silver bullet approach to accurately valuing property and one of the secrets to running a profitable property business is investing time and money to ensure your buy your property at the right price.

Investing in Orlando Land

With the rampant development happening in most parts of the country, the purchase of land is becoming more and more secure in terms of investment. Have you ever wandered around the undeveloped areas in your town or city and wondered who owns them? Or maybe you have seen the “land for sale” signs on open lots and fields. Well, people are making great money on selling land for new developments and sub-divisions. Who owns that land? It could be you.

Investing in land is something that takes a bit of research, timing, and some risk but it can be extremely rewarding if done properly. The first thing you need to wonder about when considering a certain piece of land is the zoning of that land. This is probably the most important factor in land purchases. If the land is not zoned for residential, getting the zoning changed for sale to a development company interested in sub-divisions could be kind of tricky. The same can be said for land that is not zoned for commercial purposes. So do your homework when looking at different land parcels. Make sure that the zoning is appropriate for you and who you want to sell to at the end.

If you are thinking large scale when doing this, prepare to spend a fair chunk of cash. These days land is not too cheap. But in comparison to what you can expect as a ROI in a few years it is well worth the time and money. If you live in an expanding area where housing is at a premium then buying land is a fantastic idea. It should only be a matter of time until the developers come knocking. Or, if you are so inclined, sub-divide your land yourself. The process does have some merit as a great profit can be realized from the sale of single home lots. When you get down to brass tacks, investing in land is a great way to make some profit and increase your wealth exponentially.