Real Estate Reminders

Real Estate Reminders

Real estate investing, done right, can be one of the most secure methods of growing individual wealth. Every financial portfolio can benefit from the income real estate ownership can generate, the returns it can accrue, and the offsets it can justify. A strategy that some investors have found favorable is converting an apartment complex into condominium homes. But if the transition is not managed wisely, you can kill your potential profits before the contract ink has time to dry.

Conversions of any sort, if done with due diligence, can turn a handsome profit. Changing apartment rentals into condominiums for purchase is a lucrative option. The key, of course, is choosing the correct existing property to convert. You want to find a property that’s 95 percent occupied or greater. You want to purchase it when 70 percent of the renters’ leases are due to expire within six to seven months. You want to offer current qualified residents an opportunity to stay on and purchase one of the units, and explaining and contracting the requirement for a 30-day period of vacancy to accommodate for renovations and upgrades.

Have your project manager arrange it such that a clear 3/4 section of the apartment complex will remain empty for the renovations and the start of the condominium sales. When you start selling the redesigned apartments that are now condominium homes, you do not want any old units readily associated with the new property. This is especially true if the old renters are still living there in run-down conditions. No new prospect is going to want to pay you $300 thousand dollars for a unit that’s obviously renting for less than a thirtieth of that on an annual basis. No amount of declared renovations will close the discomfort gap at the negotiation table once that realization is noted. As a matter of fact, you may find it best to complete the changes to the outer perimeter of the property, including final signage, after your construction team completes all of the conversions. If you’re concerned about marketing, use a print out of the digital workup. The best way to sell a home is with a showing that can accept an immediate ‘yes’ versus ‘we’re still working on that one.’

The timeframes discussed have the objective to use the income from the remaining renters to contribute to the new renovations. Generally, your chosen style of renovation will have little bearing on its marketability as long as you’ve selected a wise location. Whenever you’re looking to purchase real estate as rental property, whether whole or partial, go for a location that is within a 20 to 40 minutes walk and/or drive of a stable, renowned university and/or an established and/or growing research development hospital.

Do not skimp on the renovations. Design every unit to have two bedrooms and 2.5 bathrooms. Of course, this would not apply to units that are only suitable as studio apartments or other types of units designed for efficiency. Let each bedroom unit contain a bathtub shower combination en suite with an away toilet and strong vents exceeding code standards. Let each bedroom unit contain an alcove that can function as a business area and measures as 1/6 or 1/8 of the puchaser’s overall home space for ease of tax calculations for any business ventures pursued from home. Also allow for a 2.8 cubic ft. fridge, microwave and coffee pot to fit in the bedroom alcove/library/business center area. This would be in addition to the regular kitchen in the unit.

The kitchen/dining area design will feature as an entertainment space with streamline appliances. The half bath will feature a toilet and sink and a shower designed for guests. It will also have two stackable washer/dryer units on either side of the sink or toilet. The kitchen/dining area would feature a stage and projection wall. The purchaser could use it as a regular dining area but also as a section for play (adult or child’s), presentations, KJV Bible study, karaoke, charades, children practicing public speaking, etc. You can vary the units by adding fireplaces to some, libraries or bookshelves to others, sky observatory balconies to others, etc.

You may also differentiate the units per their turnkey color, making some stark white, others egg-shell white and some creamy or off-white. While these designs are strongly suggested, remember that it is fine to do so without gutting the existing units. Make the 2/2.5, special amenity, office alcove, spacious closets, double stackable sets stand even if the floor plans for some units will differ slightly.

Another negotiation angle that you could employ for the apartment to condo conversion is to purchase the property when 80 percent or more are due to terminate lease in 95 days and let them. But purchase the complex at day 95 and use a heavier commercial loan for the renovations. Do not start sales locally until after all units have emptied except you’re okay to sell to previous renters. Spend for large, speedy renovation teams and unique luxury materials such as marble, stone, crown molding, French patio doors, etc. Aim to sell all units within a 7 month to 1 year timeframe using an expansive, global marketing campaign that covers key potentials based on local university enrollment, current neighborhoods and frequented eateries of staff and medical professionals of the local hospital, etc. When marketing abroad, do so with network connections through local banks that sponsor relocation packages on a global scale.

When you buy a home, you’re buying into your future and that of your progeny, as well.

closing costs

Closing Costs for Home Buying: Charges Incurred When Buying a Home

Many first time home buyers are under the misconception that once they pay the asking price on the property they can move in. In fact, there are many additional closing costs that you have to pay out of pocket. Note that last part – you have to pay out of pocket, so you as you prepare to buy a home you should have this money ready. What are these costs and what can you expect to pay? Here are some of the common ones. Make sure to discuss them with your real estate agent and your lender so that you can know which ones apply to you – it will help with proper budgeting.

Pre-paid homeowners insurance – homeowners insurance is one of the most important investments you will ever make in your new home. In case there is damage to your property your insurance company will reimburse the full cost of the repairs. The amount you will pay will depend on the value of the property that you buy – the higher the value the higher the homeowner insurance premiums.

Cost of appraisal – it is never a good idea to buy a property that you haven’t had appraised. The previous owner may try to convince you that they have already done an appraisal, but you shouldn’t take them at their word. You need to bring in your own professional to do an independent appraisal and give you a valuation as well as a report on the state of the property.

Charges by the mortgage company for implementing the mortgage  – getting the mortgage is one thing, but did you know that there are fees associated with the actual process? Think about it this way – there are people who have to be paid to handle your mortgage every step of the way and that cost falls on you. The amount you pay will vary depending on the size of your mortgage.

Prepaid interest or points – we all want to get mortgages at lower interest rates and you can make this happen if you pay a prepaid interest. This usually works out to about 1% of the total value of the mortgage and it could result in higher monthly payments, but remember that you will pay less in the long term because you pay lower interest rates.

Attorney fees – even when you have a great real estate agent it is a god idea to have an attorney come in and look at your contract – remember your real estate agent is looking to make money out of the deal and they may do so at your expense if you are not careful. You should pay an attorney and have him look through all documentation and help you through the closing process.

Recording fees – this may not be necessary depending on where you live, but there some states that require you to pay for the processing and holding of information relating to the purchase of your property.

These are just some of the fees that you can expect to pay as a part of closing costs. Ask your real estate agent to provide you with a list of everything required in your stat

choosing a REALTOR

Are You a First Time Home Buyer? Tips for Choosing a Realtor

The time has come for you to buy your first home and you know that one of the things that you have to do is find a realtor to help you through the process. In fact, it is one of the most important things that you can do – having a realtor working with you in the early stages of your real estate transaction can save you a lot of heartache down the road. So what should you be looking for?

The first thing you need to do is distinguish between a real estate agent and a realtor. A real estate agent is required to qualify by taking certain exams as is a realtor, but realtors are held to a higher code of ethics because they have to be members of the National Association of Realtors. This association requires them to do so much more than just help people buy and sell property. They must, for example, pledge to hold the interests of their clients before their own. This means that if they come across a deal that may make them money but that would cost their client it is their duty not to pursue that deal and to be honest to their client about it. Realtors cannot also exaggerate, misrepresent or conceal material facts, something which real estate agents can do. Before you engage someone to help you with the purchase of your first property it is important to confirm that they are a realtor.

What previous clients have to say also matters a big deal. The best realtors are those who work locally – they find a city or town and focus on helping with property deals in that particular area.  They are familiar with the properties within this zone that are for sale and those who are looking to buy. You will find that they also have a client pool in this area. It is your job to find a few of their former clients so as to know what kin d of reputation the realtor has. Talk to three or four about what it was like to deal with the realtor and whether they would recommend them to someone else. You should also look online to see whether they have any negative testimonials.

You may find some realtors or real estate agents who describe themselves as part-time. Don’t hire one of these. It means that they help people buy and sell property during their free time, which means that they are not completely up to date with the property market around them. The best realtors are those who are on the job full time and who know everything about the properties in their community as well as the property market.

Make sure that you get an airtight contract with your realtor. Look into how much they are charging you as well as what they are prepared to do for you – ideally they should take you through the process from beginning to end. It is also their duty to warn you of any pitfalls that you may encounter.

should you rent or buy a home

Home Ownership: Should You Buy Or Rent Your First Home?

Young people today are grappling with the question of whether they should buy or rent a home to start a family. For their parents it was a no-brainer – they got a job, saved a bit of money while they lived in a rental but as soon as they could they put down some money and took out a mortgage. Today it is not so easy. For one thing, incomes are lower than they were in the past – young people are making less today than their parents were making at their age. For another, young people are in a lot more debt today – the average college graduate owes tens of thousands in student loans. So, as someone who is looking to start a family, should you buy or should you rent?

Home ownership comes down to one thing – whether or not you can afford it. How much you make, your monthly expenses and how stable your job is all determine whether or not it is a god idea to buy a home today. This, however, is a short term view. If you think about it in the long term it is much better to buy a home than to rent. Simple logic can explain this. Imagine that you rent an apartment that costs you $800 a month in rent. In one year, you will have paid the landlord more than $10,000 in rent. Imagine if you were using this money to pay for a mortgage. In a few years, you would probably be all paid up and you would have an asset that you can truly call your home.

For many the issue of finding a lender is what leads to the decision to rent. Finding a renter is easy so long as you are disciplined about your spending. Remember the only thing that a lender wants to see is your ability to pay them back. So long as you are employed and you are not in debt you should have no problem finding yourself a mortgage. The thing to be careful about is debt. Many young people have no idea how the debt they are taking on will affect them when it comes time to make the tough decisions. Every time you are tempted to take on debt remember that it will only work against you if you are not able to pay it back. There really is no reason why you should own several credit cards when you can make do with just one, or drive a flashy car when you can drive something cheaper. There is no reason to eat out every night of the week when you can save money by preparing meals at home. It is the small decisions like these that eventually help you get a mortgage when the time comes.

There is another benefit to owning your own home. You can borrow against it once you have paid off some of your mortgage, which can help you get other projects underway. You can, for example, plan things in such a way that by the time you pay off a certain amount of your mortgage you can borrow against it and start a business.