You know, we all take an occassional peek
to look at tax records or Zillow to try to
figure out what a property is worth.

And we all know (especially in Texas) that
Tax Records (or Zillow) doesn’t even come
close to showing what a property is really
worth.

As a matter of fact, Zillow even admits that
in Texas, they have the LOWEST Accuracy Rating
(only 1 star) and should only be used as a
‘starting point’ to find a property’s true
value.

http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm

So, just keep that in mind next time your
finger starts typing in to look at Zillow
or Tax Records for your comps. Don’t Do it.

For me, the only thing I will use to determine
real value is recent Comps. Period.

*And if you don’t have access to the MLS and
getting accurate comps, I highly suggest you
begin to add some qualified realtors to your
team that can help you to pull comps on your
possible deals.
*But keep in mind, if you only abuse them
with comp requests and don’t occasionally
give them an actual deal, they will soon become
less responsive…then back to Zillow for you

Brant

Here are some changes you can make to instantly add some appeal and value without costing you big bucks and lots of time in the process:
1. Turn a extra room to a true HOME OFFICE.  We all know more and more people are working from home these days, so why not respond with what people need.  Possibly add some built in shelves and things to make it a true workspace.
2. Add Glass Fronts to a couple of cabinets. This is a very inexpensive touch of class to set your kitchen apart from your competition.

3. Turn a ‘plain white’ tub surround into an Upgraded Tub Surround by replacing 1 row of tile around to create a custom look..

4. Pendant Lighting…this can be very inexpensive depending on the layout of the kitchen/attic access.  And the material cost is very cheap, as little as $30 per light/cord.

5. Add some Slate to the front porch entrance.  If it’s not a huge area, this is very inexpensive (as little as $3 per sq ft) and many times, the front porch area is less than 20 sq ft. So think about it, not much money spent to create a great 1st impression.

Of course, I hope it goes without saying that these changes will only make an impact if you do the basics first: painting, flooring, general updating, but definitely keep these things in mind when you’re planning out your next flip project.

………………………………………………………………………………………………….
What changes do you like to make when sprucing up an investment property?
How about your own home?

I know, interest rates are at an all-time low and, as many are predicting that inflation is heading for the skies, many will agree that now is may not the time to pay off your mortgage.  But, in my opinion, that’s probably best advice for your primary residence (*That is, only if your wisely investing that additional money that would be going towards your mortgage and instead investing it and earning a higher rate of return, see http://missedfortune.com/)

Anyways, if you’re like me and believe that paying off your investment property mortgages is the best financial decision for you and your business, check out these tips to make sure that your money goes where you want it and does the best work possible on decimating your mortgage debt:

Look for Hidden Fees
You should know that if you don’t check with your lender first, your additional payment could go towards fees and NOT you principal paydown!  Some lenders charge some steep fees if you send in unscheduled payments (believe it or not!)

Track Your Payments
If you’re not paying the same amount every month, you need to make sure the additional monies you send every month is being applied toward your principal…

Annual Lump-Sum Payment
As we all know, Stuff happens.  So, may consider instead of paying off additional principal every month, to set that money aside and pay at the end of the year with one lump-sum payment. It doesn’t hurt to have that money in your reserves where you can get it for emergencies, just in case… BEWARE! Some lenders look at large, lump-sum payments to be subject to a prepayment penalty EVEN if you’re not paying off the mortgage in entirety.  So, just make sure…

So, what do you think?  Do you believe in keeping all the cash-flow you can, or pay off the mortgage and sacrifice a little of that extra cash every month?

Thank you for reading!

Your comments and questions are welcomed below.

The waiver is a boon for investors seeking to rehab and flip properties, because it expands the pool of eligible borrowers to include those relying on FHA-backed loans, popular with first-time homebuyers and others who lack the cash to make large down payments.

In extending the waiver through 2012, FHA said all transactions must continue to be arms-length. In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will apply only if the lender can document the justification for the increase in value, FHA said.

FHA instituted the anti-flipping rule in 2003 to protect its mutual mortgage insurance program from losses on homes that were merely flipped, rather than rehabbed. Homes repossessed by Fannie Mae, Freddie Mac, and state- and federally chartered financial institutions were exempt from the rule.

In February 2010, the Obama administration waived the waiting period for resales — including homes purchased and rehabbed by private investors — in the hopes of stabilizing home prices and revitalizing communities hit by foreclosures.

It often takes less than 90 days to acquire, rehabilitate and sell properties, the Department of Housing and Urban Development said at the time. Some sellers of rehabbed properties had been reluctant to enter into contracts with FHA buyers because of the cost of holding a property for 90 days, HUD said

By Inman News, Wednesday, December 28, 2011.

Inman News®

Note:  The information below is a layperson’s guide to mold issues.  This doesn’t constitute legal, health or professional advice.  Seek advice from appropriate professionals on any mold issues in your property.

We all have heard at least one horror story about mold. You probably know that mold is a fungus – actually, there are many types of mold, and they are all different types of fungi – that grows in moist conditions. When you encounter a building that has been “infected” with mold, you definitely need to have it checked to make sure that the infiltration is not a threat to present or future inhabitants’ health. For the purposes of this article, however, we will assume that the mold in question has been determined to be a fairly minor issue and simply needs to be cleaned up thoroughly and effectively so that the problem does not recur.

Generally, if the area of mold is fewer than three patches in total, each smaller than a square meter, you can clean up the mold yourself. Conventional wisdom recommends using a bleach solution, but newer research indicates that this is unwise because of the fumes, potential damage to the surface beneath the mold, and general unreliability of the technique. Here are three important tips that you need to follow when you clean up mold yourself:

Protect Yourself: You may feel silly, but you should be wearing safety glasses, a disposable dust mask and household rubber gloves. This will help protect you from allergic reactions to mold spores and from respiratory issues associated with the spores. When you are cleaning, you will dislodge spores into the air and you need to make sure that they cannot reach your eyes and are filtered out before you breath them in.

Use Effective Cleansers: Mold usually will respond best to an unscented detergent or baking soda. Both of these cleaners have little or no scent on their own, which makes it easier for you to detect musty odors after you have finished cleaning. Use a damp rag to scrub off the mold, doing your best to allow the surface to absorb as little moisture as possible. Once you have finished, wipe down the surrounding areas as well and vacuum any carpet. Clean all rags immediately or dispose of them. Empty the vacuum outside and away from the house into a sealed plastic bag.

Monitor the Area: If your mold returns after a thorough cleaning, then this is generally indicative that you have an unsolved moisture problem. Have an expert evaluate the area to determine the source of the moisture and how best to eliminate the problem. 

Mold is not just a structural issue, but can present a serious health hazard. If you have any doubts about the source, scope or magnitude of a mold problem, consult an expert to make sure that you have fully dealt with the issue.

Tell us your mold horror story in the space below.

Thank you for reading!

Your comments and questions are welcomed below.

——————————-

Resources

Posted by Carole VanSickle on Tuesday, October 25th 2011    

http://www.epa.gov/mold/

http://www.cdc.gov/mold/

http://www.cmhc-schl.gc.ca/en/co/maho/yohoyohe/momo/momo_005.cfm

http://rentreadytv.com/longshadow/

I’m not saying the market is back, or even coming back anytime soon, but I will tell you that in the Houston area lately, we’ve seen some houses moving really quick…It’s hard to say if it’s because there is so much less competition because a lot of real estate investors have been scared off from the market, or if it’s because new construction is almost non-existent.  Probably a combination of those two, combined with the fact that many people have been renting for a long time and they’re just ready to be homeowners…Who knows?  Who cares! I’m just pumped I have offers coming in, in such a short time period! lol…

Anyways, check out the video and leave a post with your comments…

http://rentreadytv.com/longshadow/

Do you have an inspection done on all of your properties, or do you have the buyer get one when you go to sell the home?

Personally, as a rule, I would almost never recommend an investor get an inspection report for a house they are Flipping. Surprised? It’s really a simple explanation…you see when you go to sell the property, you will have to disclose that inspection report and all of the defective items to the buyer.  This will often trigger a response from the buyer along the lines of “If this investor knew about all of these repairs why didn’t they fix them?” It could also possibly introduce some liability concerns if you had foreknowledge of certain conditions that you chose not to address.

Buyers don’t understand all that we do as investors/flippers to get a home ready for the market/resell purposes and couldn’t possibly fathom the cost of repairs if we were to repair every single item on an inspection report.  Inspection reports are incredibly detailed and often include insignificant items that don’t necessarily need to be repaired, but to a first time homebuyer, they are often times under the assumption that EVERYTHING on the inspection report needs to be done.  They are not buying a new home!  Just because a home inspector includes  an item on his report doesn’t mean that it needs to be repaired, many of these items are not a code violation, and some of the items are only recommendations and not required, but try explaining that to a picky buyer, lol.  AND, if you were to repair all of these items, most likely, your budget/profit would vanish very quickly!

Instead, for Flips, I recommend meeting ‘consultants’ such as a contractors, tradesmen (electricians, plumbers, foundation co’s, etc) or retired inspectors to walk the property with you and point out (verbally) any issues/concerns they see, you can also of course obtain written estimates for any of the scope items you are going to go forward with.  This way you can find out what repairs are needed for the house, but  it’s not in a written report format that you have to share with the buyer when it comes time to flip it.  I’ve heard that some current inspectors provide this service also, but I believe they are not technically supposed to do this according the Texas State board of Inspectors, so, I would always encourage you to operate your business above all ethical/legal standards.

This is nothing against home inspectors, because they serve a great role for investors, especially newbies.  For the record, even though I’ve personally never used a home inspector for an investment property (yep, even when I bought my first deal), I still recommend to use their services for rental properties.  And, it goes without saying, any item that is out of code compliance and not ‘grandfathered’ in, as well as any safety or hazardous items in need of repair, should first and foremost be addressed every time, without question.

Hope this helps,

Brant

**Leave a comment below**

http://rentreadytv.com/

Contrary to belief, Section 8 inspections are generally
fairly simple and not to difficult to pass, especially when
you know what to look for.

I actually view the inspections as a ‘welcome’ event because
it is a documented yearly inspection proving that as a
landlord, I’m keeping good care of my property…
basically, a good ‘cya’ thing to have…

Check it out here:
http://rentreadytv.com/

Enjoy, now I’m going to watch football and hang out with the family,

Brant

–> Watch It Here <–

Now, remove 8 zeros and pretend this
is a household budget…
- Annual family income………………….. $21,700
- Money the family spent………………… $38,200
- New debt on credit card……………….. $16,500
- Outstanding balance on credit card… $142,710
- Total budget cuts…………………………. $385

I got those numbers from an email the other day.
This is the simplest breakdown (and most jaw
dropping) I’ve seen of why S&P downgraded the US.

Crazyiness for sure…just thought I’d share

Hope this doesn’t get anyone depressed, remember,
in every crisis there is opportunity…

“There are those who see an opportunity, and
then there are those who SEIZE an opportunity.”
Joanie Warren

Hope you liked the post…
Brant