Featured Posts - Education - Real Estate Mixer2024-03-29T10:08:38Zhttps://realestatemixer.ning.com/blog/feed/featuredMunicipal Tax Liens Afforded Protection By Courthttps://realestatemixer.ning.com/blog/municipal-tax-liens-afforded-protection-by-court2014-06-28T00:17:04.000Z2014-06-28T00:17:04.000ZAnthony L. Velasquez, Esq.https://realestatemixer.ning.com/Network/AnthonyLVelasquezEsq<div><p><strong>Municipal Tax Liens Afforded Protection By Court - June 25, 2014</strong></p><p>Earlier this week, on June 25, 2014, a decision from the <strong>NJ Supreme Court</strong> has bolstered the position of <strong>tax sale certificate holders</strong> throughout <strong>New Jersey</strong> -- particularly those seeking to enforce their rights and foreclose upon a property where the property owner has sought bankruptcy protection. It is a landmark decision and it helps to solidify and protect the rights of <strong>tax lien holders</strong> and investors in a turbulent marketplace. The decision <strong><u>In re Princeton Office Park</u></strong> seems to set <strong>tax lien holders</strong> outside of the purview of bankruptcy plans reorganizing a debtor’s finances and seeking to modify the interest rate on such <strong>municipal tax liens</strong>.</p><p>In <strong><u>Princeton Office Park</u></strong>, the <strong>tax lien holder</strong> acquired a substantial <strong>tax lien</strong> interest in the subject real property, whereby subsequent taxes paid by the <strong>lien holder</strong> earned <strong>18% interest</strong> pursuant to NJ statute. The property owner then filed a voluntary Chapter 11 bankruptcy petition and submitted a proposed bankruptcy plan whereby the <strong>tax lien holder’s interest rate</strong> would be reduced to <strong>6%</strong>. The <strong>tax lien holder</strong> objected, but both the Bankruptcy Judge and the United States District Court disagreed and concluded that the interest rate <i>was subject to modification</i> by the bankruptcy plan. The <strong>tax lien holder</strong> then appealed to the United States Third Circuit Court of Appeals, on the basis that Congress had passed a specific law within the bankruptcy code prohibiting modification of the rights of holders of “tax claims”. Yet the term “tax claim” was undefined within that law. The Third Circuit then certified a single question to the NJ Supreme Court -- namely whether or not the holder of a <strong>tax sale certificate</strong> holds a <strong>tax lien</strong> so as to fall under the umbrella of a <strong>tax claim</strong>?</p><p>On Wednesday, the NJ Supreme Court issued its response in the affirmative -- yes, a <strong>tax sale certificate holder</strong> holds a <strong>tax lien</strong>. Additionally, it is not merely a lien where the actual payment of taxes has been made and there remains no open and remaining tax claim -- but instead <i>the tax lien</i> <i>continues to exist</i>.</p><p>The question now returns to the Third Circuit for resolution, but the outcome seems unavoidable -- a <strong>tax lien holder’s</strong> claim is not subject to modification by a bankruptcy plan. Ultimately, either the full lien gets paid or else the lien holder may seek relief from the automatic stay provisions and move forward with its tax foreclosure against the property for the full amount (with full interest). This is a major boost to the rights and entitlements of <strong>tax lien holders</strong> and investors statewide in <strong>NJ</strong>, and it increases the enforceability of <strong>municipal tax sale certificates</strong> against real property -- thereby making them a more lucrative and attractive investment mechanism. Before engaging in any such detailed <strong>tax lien investments</strong> or properties involving such <strong>tax liens</strong>, it is advised that investors seek appropriate legal counsel for guidance specific to their investments and activities.</p><p>By Anthony L. Velasquez, Esq. (Hamilton, NJ)</p></div>Deal Cultivation - Nuture Your Relationships!https://realestatemixer.ning.com/blog/deal-cultivation-nuture-your-relationships2014-05-20T20:37:44.000Z2014-05-20T20:37:44.000ZChristopher Ursohttps://realestatemixer.ning.com/Network/ChristopherUrso<div><div class="post-content"><p>It’s finally spring (A snowstorm here or there notwithstanding) and its time to shake off the slow pace of winter and get active. Watching things come alive and grow got me thinking about gardens…planting seeds…cultivation.</p><p>You might be thinking, “What does this have to do with real estate?” Stay with me here, there are a few parallels.</p><p>SPREAD THE SEED<br /> This is a relationship business. Don’t underestimate the importance of creating a strong relationship with a broker in your market. This is how you’ll see deals that haven’t yet hit the marketplace yet. Another great source for deals are your potential property managers. They’re in tune with what’s happening with local owners and often will tell you the things that the brokers may “forget” to mention. Personally, I don’t ever seriously consider any property without a local property manager’s input.</p><p>CULTIVATE<br /> Broker relationships need to be cultivated. If a broker sends you a deal that doesn’t fit your parameters make sure you follow up and thank him for the opportunity while reminding him of the specifics that you’re really focusing on. When you visit properties with him be sure you follow up with a thank you and possibly a small token of appreciation. Small gestures can go a long way. I once bought lunch for a broker and I was shocked to hear from him that over his 30-year career no one else had ever done that for him. This was a few years ago and I still get deals from him.</p><p>TIME TO HARVEST<br /> Staying in touch with brokers keeps you fresh in their mind. As I had mentioned earlier, this is how you will see deals that haven’t yet come to market. Even if a deal that you’re interested in goes to someone else, be proactive. Reach out to your broker to find out how the deal is progressing. The broker that you create a relationship with will be the one that calls you when the deal heads south, affording you a great opportunity. Deals fall through all the time and if you can be situated to capitalize, you’re ahead of the game. Brokers want to close as much as anyone involved in transaction. If you show them that you’re a real buyer they’ll often go to bat for you with the seller to get the deal done.</p><p>Now get out there and do some gardening!</p></div></div>Private Money is the key to scaling your Real Estate business – want to know how to start?https://realestatemixer.ning.com/blog/private-money-is-the-key-to-scaling-your-real-estate-business2013-07-31T18:59:28.000Z2013-07-31T18:59:28.000ZChristopher Ursohttps://realestatemixer.ning.com/Network/ChristopherUrso<div><p>With the economy still on shaky ground and lenders requiring that your deal fit neatly into their guideline box, the ability to raise private money has never been more important. You frequently hear people discussing this topic but you might be wondering – where do I begin?</p><p>Having raised roughly 10 million dollars over the last 5 years I’ve gotten very familiar with the process but I am by no means an attorney. When raising private money please be sure to seek out a qualified real estate attorney that specializes in securities. There are SEC regulations that you need to be aware of and you will need an experienced attorney to help you navigate theses waters.</p><p>That being said, I wanted to offer a few tips to get you started the right way.</p><p><strong>Start building out your network of investors</strong><br /> <em>Start with whom you know.</em> One of the exercises we do at our 3-day training events, The Multifamily Investor Weekend, is to have people go through their cell phones and make a list of their potential investors. They then assign each contact a dollar figure as to what they feel the contact might be willing to invest.</p><p><strong>Create and nurture that list</strong><br /> Let these people know that you are seriously interested in Multifamily Real Estate and not just dabbling as a hobby. You’ll want to establish yourself as a knowledgeable professional by sending them information on why Multifamily Real Estate is the best play in real Estate today. If you have done your due diligence on your prospective market, speak about why that market has your attention. Set up a schedule to email your contacts, whether it’s bi-weekly or monthly, and stick to it. Be consistent! Make sure that you follow up and respond to any questions or comments. You want to build on these relationships.</p><p><strong>You need to market yourself</strong><br /> You never know who might be a possible investor. Let everyone know that you’re actively pursuing multifamily real estate. Your doctor, dentist, someone’s Aunt or Uncle all may be possible investors.</p><p><em><strong>Things To Avoid</strong></em></p><p><strong>DON’T wait to have a deal to get started</strong><br /> Don’t make the mistake of waiting to talk to investors until you have a deal. You should be nurturing your list long before you find one that fits your criteria. When you find something that you want to move that’s not the time to first inform people that you’re interested in finding investors for purchasing an apartment complex. They should already know what you’re up to. Avoid discussing specific properties as you don’t want to put yourself is a box. Allow yourself room to be nimble.</p><p><strong>Don’t solicit or advertise</strong><br /> Having a pre existing relationship with prospective investors is required by the SEC. What does this mean? Essentially you cannot go out and advertise your offering to try and find new investors. To keep it simple, do not advertise! This is something that you’ll want to discuss with your securities attorney and thoroughly understand before starting out.</p><p><strong>Don’t talk about possible returns</strong><br /> Every investment involves risk. Even if you feel that your offering is the single best investment that has ever existed you never want to guarantee performance. This could get you into big trouble</p><p>Private money can be an incredible resource to help you grow your business. Just be sure that you treat your investor’s money like it’s your own and always keep the lines of communication open. <em>Come from a place of service, not selling</em> – set yourself free from the ‘salesman’ mindset.</p></div>Section 8- The Good,Bad and Ugly?https://realestatemixer.ning.com/blog/section-8-the-good-bad-and-ugly2013-08-02T00:02:15.000Z2013-08-02T00:02:15.000ZAnkit Duggalhttps://realestatemixer.ning.com/Network/AnkitDuggal<div><p><span style="font-size:13px;">Urban landlord investing combines elements of crime, drugs, boarded up assets, and low income tenants. Within all this uncertainty comes a unique risk adjusted opportunity. This post is going to look at one major tenant type that you will come across</span><span style="font-size:13px;">: The Section 8 Tenant.</span></p><p><b>Section 8 ?</b></p><p><span style="font-size:13px;">Section 8 is a Government housing voucher program that is managed by the Department of Housing and Urban Development. The goal of the Section 8 program is to help low-income, elderly, and disabled tenants afford decent and safe private rental housing.</span></p><p>Tenants have to apply and get approved by their local HUD, Housing Authority or Public Housing Agency office. Once approved, the tenants are provided a voucher that states that the municipal or state government will pay their rent in part or in full – depending on their income and household size. The voucher is a government guarantee that they will pay a portion of the tenants rental payment ranging from 80 to 100% of the monthly rental payment.</p><p>So, where does the money for Section 8 come from?</p><p>Section 8 “Housing Authority” (PHA) works under grants from the federal government to assist low income families, the elderly, and people with disabilities to afford clean, safe, and sanitary housing from owners of private property. Each year, every state receives a block grant from the federal government to cover housing assistance costs that gets divided throughout its municipalities or parishes. The Housing Authority uses this funding to cover the cost of the Section 8 program and to pay for a portion of the tenant’s rent and utility costs.</p><p><b>How to Become a Section 8 Landlord</b></p><p>Becoming a Section 8 landlord is accomplished by having rental units that tenant would want to live in. </p><p>Once a tenant has been approved for Section 8, it is their responsibility to find suitable housing. All participants in the program must search for a home to rent on their own. The rented unit can be a single family home, apartment, townhouse or mobile home. The participants can choose any location that meets both their needs and the requirements of the program. Hence it is important to have a vacant unit that appeals to the tenants as it is their decision as to which apartment they want to lease.</p><p>As a landlord, you can make potential Section 8 tenants aware of your unit by listing your property with the PHA office(s) that serve the community closest to the property. Once the unit is listed, the information will be provided to any voucher or certificate holder looking for a property of that particular size. </p><p>Once you find a tenant that wants to lease your unit then follow the Section 8 rental steps below:</p><ol><li>Have the tenant complete your rental application.</li><li>Underwrite the tenant to your standards and utilize the voucher as a proxy for income and credit standards.</li><li>If the tenant works within the underwriting above then you need to sign a lease and send it into the tenants case worker at the housing authority.</li><li>As a landlord, you will need to complete an application and provide personal information to the housing authority. The housing authority will also review your lease and rental rates to ensure that they fall in line with rates for comparable dwellings in your area.</li><li>Once the housing authority approves you as a landlord, an inspector will visit your rental property to make sure it meets all local building and safety codes. At the very least, you must have working locks on every window and door, the structure must be sound, no chipping paint, peep hole, smoke & carbon monoxide detectors.</li><li>Once the inspector approves your property then the voucher is approved and you must provide the case worker your deposit instructions</li><li>Then, once a month, the housing authority will mail you a portion of the rent and the tenant will pay you the rest.</li></ol><p><b>Good & Bad of Section 8 Tenants</b></p><p><i>Good</i></p><ul><li><b>Guaranteed Rent</b>. With Section 8, you will always get the majority of the rent on time, every time. Typically, Section 8 tenants pay their portion on time as well. Since failure to live up to the lease can cost them their housing voucher, Section 8 tenants can be even more reliable than private tenants.</li></ul><p><i>Cons</i></p><ul><li><b>Routine Inspections</b>. To get into the Section 8 Housing Choice Voucher Program, your property will need to pass a safety inspection and annual routine inspections upon lease renewal.</li><li><b>Rent Control</b>. You will need to keep your rent within the median for your area. If you have an extremely well done or a rental in an improving neighborhood, you may lose out on rent you could have otherwise charged outside of the Section 8 program.</li></ul><p>Use the section 8 program to your advantage if you are looking to invest within local urban markets such as Newark, Plainfield, Passaic, Paterson to name a few. </p><p></p><p>Happy Investing</p></div>NJ Home Improvement Contractors Must Be Registeredhttps://realestatemixer.ning.com/blog/nj-home-improvement-contractors-must-be-registered2013-08-07T18:30:00.000Z2013-08-07T18:30:00.000ZAnthony L. Velasquez, Esq.https://realestatemixer.ning.com/Network/AnthonyLVelasquezEsq<div><div class="mts _50f8">August 7, 2013</div><div class="mts _50f8"></div><p>It is summertime, and that means many <strong>homeowners</strong> are taking advantage of the good weather and doing improvements on their homes. Some are landscaping; others are getting a new roof installed; still others are taking care of that long-awaiting new driveway and walkway. Whatever your project, you should avail yourself of the <strong>consumer protection laws</strong> that exist for you as a <strong>homeowner</strong> when you contract with <strong>home improvement contractors.</strong></p><p>Be aware that most landscapers[1], tree trimmers and other outside contractors ARE considered <strong>home improvement contractors</strong> under NJ law and must <strong>register</strong> with the State of New Jersey before obtaining or engaging in any improvement work on your home. Almost all other types of contractors are included. The registration requirement is known as the <strong>Home Improvement Contractors Registration Act</strong> and applies to residential dwellings. The term <strong>“home improvement”</strong> as used in the act includes:</p><p>the construction, installation, replacement, improvement or repair of: driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, windows, doors, walls, ceilings, roofing, cabinets, kitchens, bathrooms, garages, basements and basement waterproofing, fire protection devices, security protection devices, central heating and air conditioning equipment, water softeners, heaters and purifiers, solar heating or water systems, insulation installation, aluminum/ vinyl siding, wall-to-wall carpeting or attached/ inlaid floor coverings, and other changes, repairs or improvements made to residential property.</p><p>If the work you are obtaining falls within these parameters, then your <strong>home improvement contractor</strong> must be registered. <strong>Registration</strong> must be renewed on an annual basis for all home improvement contractors. During the annual registration process, the <strong>NJ Division of Consumer Affairs</strong> confirms that the contractor maintains adequate insurance. It also investigates the <strong>background of the applicant</strong> with regard to criminal activity, prior convictions, prior complaints or violations of the registration act, fraud, negligence, malpractice, misconduct, etc. The purpose of the law is to protect you, as the homeowner/ consumer, and help you to obtain quality service from reputable and professional contractors.</p><p>The <strong>home improvement contractor</strong> must also comply with certain requirements when doing business with you. Importantly, look to see that your contractor provides his registration number on all advertising, contracts, business cards, invoices, etc., along with a statement on all contracts and invoices that he is regulated by the NJ Division of Consumer Affairs (with the 1-800 number for the Division). This ensures that you know you have rights and a legal forum in which to seek redress if the contractor acts in an unethical, unprofessional or illegal manner. All contracts for home improvement work above $500 must be in writing and must include:(1) the terms and conditions of the contract, (2) the total price (including finance charges, if any), (3) a copy of the contractor’s commercial general liability insurance in a minimum amount of $500,000 per occurrence, (4) the contractor’s name/ address, and (5) signatures from all parties. The contract must also provide you with <strong>notice of the right to cancel</strong> the contact before midnight of the third business day after receiving a copy of the contract. This notice must be in bold type on the contract itself (at least 10 point size). </p><p>Most importantly, the registration act provide for significant penalties for violations of the law. In addition to civil/ administrative penalties, it is considered a <em>fourth degree crime</em> for a <strong>home improvement contractor</strong> to violate the provisions of the registration act (and this carries a potential penalty of 18 months in jail). Armed with this law, many homeowners who find that their contractor has violated the act have sought redress in many forms, including <strong>voiding the contract</strong> or <strong>reducing the disputed amounts</strong> claimed under the contract. Also, these violations often eliminate a contractor’s right to place a <strong>“construction lien”</strong> against a homeowner’s property. It is advised that you seek knowledgeable legal counsel for these types of disputes. </p><p></p><p>[1] An exception applies for a landscaper <em>who</em> <em>only mows lawn and trims hedges</em>, and he will not generally be required to register if his activities remain so limited; but if that landscaper plants any flowers or shrubs, lays sod or establishes a lawn, he is immediately transformed into a home improvement contractor who must register. Moreover, a person who is registered as a landscape architect is exempt since such person is then subject to another (often more rigorous) set of laws for such architects.</p></div>Reaching out to a New Broker in a Propective Markethttps://realestatemixer.ning.com/blog/reaching-out-to-a-new-broker-in-a-propective-market2013-11-08T19:33:26.000Z2013-11-08T19:33:26.000ZChristopher Ursohttps://realestatemixer.ning.com/Network/ChristopherUrso<div><p>In this day of e-mail, it’s easy to have your VA (Virtual Assistant) send out form e-mails to prospective commercial brokers.</p><p>While I’m a big believer in automation and systems, the broker who receives your impersonal e-mail is probably not going to have you at the top of their list when that perfect deal crosses their desk.</p><p>As you know, your level of success in Real Estate Investing is the equals the quality of the relationships you cultivate. Brokers are an amazing resource, and truly a necessary part of your Real Estate Investment team. This is why you must PICK UP THE PHONE. This is the only way to create the personal connection you’re looking for. Very often we are not looking at investment properties on Long Island, but outside the Tri-State area so making this personal connection is crucial. We are huge proponents for giving before you receive. (If you have something of value that you can offer the broker, great!)</p><p>Make sure that the calls you make to the broker do not waste their time. Do your market research and have a clear picture of what you’re looking for. Do your due diligence and know what the demographics of the sub-markets are. Make sure that the broker knows that if he finds the deal, you are prepared to move. Commercial Real Estate brokers do not close hundreds of deals a year, and if you want them to really keep you in mind, be serious. You will be surprised at the wealth of knowledge they possess, not just about the market; but about Property Managers, local contractors and the subtleties of the neighborhoods. A broker is the best way to get insight into how to start putting your team together.</p><p>Things that will send you to the “bottom of the list” – serious DON’TS:</p><p>DON’T ask him to look at everything under the sun – you should be clear on your plan, he knows that if someone is calling on a 40 unit deal in a C market, he shouldn’t also have the 100+ unit in an A market building on the brain.</p><p>DON’T waste their time. If you make a trip, have an itinerary and a schedule. Also pick up the tab for lunch. You’d be surprised how this makes a difference, that personal effort. DO follow up. Send a handwritten thank you for their time – these are the things that will create a solid foundation for a mutually beneficial relationship and lead to great things for both of you!</p></div>Homeowners beware: take care to insure your property and provide timely notice of extended absenceshttps://realestatemixer.ning.com/blog/homeowners-beware-take-care-to-insure-your-property-and-provide2014-01-06T18:00:00.000Z2014-01-06T18:00:00.000ZAnthony L. Velasquez, Esq.https://realestatemixer.ning.com/Network/AnthonyLVelasquezEsq<div><p>On December 27, 2013, the NJ Superior Court, Appellate Division, issued an unpublished decision denying a homeowner from insurance recovery for vandalism caused to his home, despite homeowner’s insurance, where the owner failed to make necessary changes to the insurance policy and provide notice that he had vacated the property. In <i>Bulusu v. Allstate New Jersey Insurance Company, A-3694-12 (decided Dec. 27, 2013)</i>, the Court found that the owner had moved from the property and left it vacant for more than 30 days prior to the vandalism and damage. Although the term “vacant” was undefined within the insurance policy, the Court applied the plain and ordinary meaning of the term “vacant” and found that the insurer was not liable for the vandalism damage under such circumstances where the owner had moved to accept a new job, had shut off the heat and hot water, had terminated the alarm system contract, had shut off the water, and had removed the furniture, clothing, dishes, utensils and other such household items from the property. This was effectively rendering the property “vacant”, and under the policy the insurer was not liable for damage where the property was rendered “vacant” for more than 30 consecutive days prior to the damage.</p><p> </p><p>The lesson from this case is clear to homeowners: if you are temporarily moving from a property or taking an extended absence, it is incumbent upon you to contact your insurance agent to make whatever changes are necessary to keep your insurance in place and coverage current during your absence. Your premiums might be raised, but coverage will be ensured -- unlike an instance where you provide no notice of absence and insurance coverage is permitted to be denied in full based upon a “vacant” property in the instance of a theft, vandalism or other such incident.</p><p> </p><p>Anthony L. Velasquez, Esq.</p><p>Hamilton (Mercer County), NJ</p><p>January 6, 2014</p></div>Planning for Retirement? Investing in Apartments can put YOU in control!https://realestatemixer.ning.com/blog/planning-for-retirement-investing-in-apartments-can-put-you-in2014-01-29T20:14:05.000Z2014-01-29T20:14:05.000ZChristopher Ursohttps://realestatemixer.ning.com/Network/ChristopherUrso<div><div class="post-content"><p>Many of us are guilty of it. We all know how it goes…we’ve been hearing all about the volatility in the market and once a month that retirement statement arrives with a seemingly endless amount of pages.</p><p>How many of us do the quick once over and the file it away?</p><p>How many of us would rather not look at all knowing full well that our day might be ruined in an instant!</p><p>I like to call this traditional way of retirement saving the “Park and Pray” plan. You did what your advisor told you to do. You started saving early. You’ve invested and reinvested all with the hope that the market will continue to appreciate. Finally, when the time comes to retire we hope and pray that the market is high! We know all too well what happened just a few years ago. If you were planning to retire then</p><p>Does any of this sound familiar?</p><p>What if there was an alternative…Away for you to really control your savings. An investment strategy that will not only appreciate over time but also provide you with actual spendable dollars to supplement your retirement income?</p><p>This is just what multifamily real estate has to offer. And I say multifamily real estate specifically because there are of course many different strategies one can choose to invest in. Almost all require the investor to be very hands on; managing the property yourself…fixing plumbing issues, fielding tenant calls…you name it.<br /> When you invest in apartments you manage your property manager. You are the asset manager, not the landlord.</p><p>Multifamily Investing allows you to achieve all of the benefits of investing in Real Estate; monthly cash flow, appreciation, tax benefits…but without the sweat equity and time cost of traditional Real Estate Investing.</p><p>One deal a year…done the right way. That’s all it takes to create a retirement portfolio that’s based on sound, performing properties as opposed to the whims of Wall Street. Please understand that I’m not anti Wall Street by any means. I am a firm believer that any portfolio needs to be diversified and multifamily real estate is a strong way to do that.</p><p>The market for apartments is stronger than it’s ever been before and the demand for rental units far outweighs the available product. Tight credit markets, student housing, baby boomer housing, and immigration… everyone needs a place to live. That’s what you will provide while building a portfolio of cash-flowing assets for your future.</p></div></div>NJ Tax Foreclosure Judgments May Be Subject to Fraudulent Conveyance Claw Back Actions Brought By Former Ownershttps://realestatemixer.ning.com/blog/nj-tax-foreclosure-judgments-may-be-subject-to-fraudulent2014-02-05T18:33:43.000Z2014-02-05T18:33:43.000ZAnthony L. Velasquez, Esq.https://realestatemixer.ning.com/Network/AnthonyLVelasquezEsq<div><p><b> By Anthony L. Velasquez, Esq.</b></p><p>On January 29, 2014, the Honorable Gloria Burns, Chief Judge of the U.S. Bankruptcy Court in New Jersey, issued a decision in the case <i>In re Oyster Bay Inn, Inc.</i>, D.N.J. Bkr. Case No. 13-22624 (GMB) which may have wide spread implications for property acquisitions that have occurred by way of a <em>tax foreclosure</em> within New Jersey. Specifically, the Court held that a New Jersey <em>tax foreclosure</em> judgment resulting in a grant of title to a successful lien holder is not automatically exempt from a subsequent challenge by the prior owner (foreclosed party) in a fraudulent conveyance claw back action.</p><p>By way of background, in 1994 the U.S. Supreme Court concluded in the landmark case <i>BFP</i><strong><i> </i></strong><i>v. Resolution Trust Corp</i><i>.</i>, 511 <i>U.S.</i> 531 (1994) that where a standard <em>mortgage foreclosure</em> sale under state law has occurred the foreclosed owner cannot maintain an action for fraudulent conveyance under the bankruptcy code section 11 U.S.C. § 548(a)(2) that mandates any transfer must occur for “reasonably equivalent value”. The petitioner in <i>BFP</i> had argued that the price obtained at the sheriff sale was grossly different than the fair market value of the property, and thus it was tantamount to a fraudulent conveyance in violation of this bankruptcy provision requiring “reasonably equivalent value” be paid. But the High Court rejected this argument and found that where such public sale occurred in conformity within the standard, legal provisions and procedures of the state’s <em>foreclosure</em> laws then the price obtained is <i>per se</i> a fair and proper price and automatically constitutes “reasonably equivalent value”.</p><p>This 1994 U.S. Supreme Court decision has been uniformly applied in New Jersey with regard to <em>mortgage foreclosures</em>, and it has essentially barred claw back actions from disgruntled prior owners under fraudulent conveyance theories. However, in New Jersey the procedures with regard to <em>tax lien foreclosures</em> are vastly different from the <em>mortgage foreclosure</em> procedures. Except under special circumstances (for example, the existence of certain federal liens), a final judgment in a tax foreclosure <i>does not</i> automatically send the matter to a public sheriff sale but instead vests title in the successful tax lien holder, in and of itself. The tax lien holder generally takes that final judgment and records it with the county clerk as deed and title to the property. Since this occurs in the absence of a public sheriff sale, the Court in <i>Oyster Bay Inn, supra,</i> concluded that there is no true determination that the price paid automatically satisfies the “reasonably equivalent value” standard. Thus, there is no automatic bar to claw back actions on fraudulent conveyance theories when title vests in a tax lien holder and is stripped from a prior owner based upon a <em>tax lien foreclosure</em> final judgment. This decision may pave the way in New Jersey for increased post-judgment challenges to <em>tax foreclosure</em> judgments. It is strongly advised that parties involved in such complex <em>tax foreclosure</em> acquisitions seek competent legal counsel at the earliest point available. </p></div>Questions to Ask Your Potential Property Managerhttps://realestatemixer.ning.com/blog/questions-to-ask-your-potential-property-manager2014-03-31T18:59:08.000Z2014-03-31T18:59:08.000ZChristopher Ursohttps://realestatemixer.ning.com/Network/ChristopherUrso<div><div class="post-content"><p>Property management encompasses all aspects of running an income property. From finding and screening tenants, to maintaining the property, collecting rent, and handling any issues that might arise.</p><p>While some professional property managers specialize in certain types of services, most are prepared to take full responsibility for your property, unless you’d prefer to handle certain things yourself.</p><p>Professional property management can make owning (and profiting from) rental properties a hassle-free experience.</p><p>For most, the decision to use a professional property management is a simple cost/benefit equation. Professional property managers are experts at handling properties and tenants and they generally take only a small percentage of your property’s monthly rent in exchange for their services. When you consider what you get in return—a hassle-free, essentially passive income stream—the decision to employ a professional property management is a no-brainer for the majority of rental property owners.</p><p>After all, our job is to manage the property manager and the asset while looking for our next deal.</p><p><b>Things to Consider When Interviewing Property Managers</b></p><p><b>1 – Cost:</b> Managers generally charge a monthly fee to watch and maintain your property. Those fees can range from as low as 4% or so, to upwards of 10%. Obviously, you should look for a company that charges less and provides more services.</p><p><b>2 – Communication</b>: For me, communication with a manager is of the utmost importance. I need someone who uses email, and is responsive to both the telephone and email. If I don’t get a response back in a timely manner, it is time to walk. In addition, you need someone who can deal with you and your idiosyncrasies. Some of us are needier then others. You want to let companies know up front where you stand, and make sure they’re willing to be flexible for you.</p><p><b>3 – Termination of your Agreement:</b> In the event that your “relationship” does not work out, you want to know up front what exactly it will take to terminate your agreement. Is there a charge for breaking your contract? Penalties?</p><p><b>4 – Repairs and Maintenance:</b> Does the company have their own maintenance crew, or do they contract out to a handyman? How much do they bill out at? Can they handle all kinds of repairs? What happens if they can’t do something? Do they have other contractors that they work with? In addition, you probably want to have a maximum that the company can spend without contacting you. Generally, I will allow my managers to do what they need to as long as it is for something under $200. I must confirm any expenses over that. If you are a bit more of a control person, you can also request invoices/receipts for expenses.</p><p><b>5 – Monthly Statements</b>: Does the company send out monthly or quarterly statements. I wouldn’t deal with anyone that does not provide monthly income/expense statements.</p><p><b>6 – Evictions</b>: How does the company handle evictions? What are the costs to evict?</p><p><b>7 – Yard Work:</b> How much do they bill yard work out at? Landscaping? Do they handle snow removal? Mow lawns? How much does each cost?</p><p><b>8 – Reserves:</b> What kind of reserve does the company require? The reserves are used in case anything comes up. Most managers will require a certain amount.</p><p><b>9 – Accounting</b>: When will the manager mail your check to you? Beginning of the month? State laws usually dictate accounting rules for managers, but you would want to know all of this up front. Tenant Deposits: How do they handle deposits? Are they commingled, or simply put together with all other income for your account?</p><p><b>10 – Vacancies:</b> I’ve actually interviewed companies that will charge you 1/2 a month’s rent to fill vacancies in your property. This is typically up for negotiation and will vary depending on types of properties and sizes. You will need to fill your vacancies, so you will need some advertising done.</p><p><b>11 – Advertising:</b> Where do they advertise properties? Are for rent signs put on the property’s lawn? Do they advertise in the paper? Online? There are quite a few effective places to advertise properties for free, online. Do they use these? In addition, you want your property advertised effectively. Do they have the basic HTML skills to add images to their for rent ads online? This makes a huge difference, trust me. IF THEY DON’T USE CRAIGSLIST DON’T HIRE them!</p><p><b>12 – Section 8:</b> Do they have experience dealing with section 8 properties / tenants? Do they know what is entailed with such properties?</p><p><b>13 – Properties They Manage</b> – I also like to know how many properties they manage, how many managers work at the company, what specific areas they focus on, how long they have been in the business, and other questions about their experience. This should be a good start to get you going. I like to always tour the manager’s current properties without them knowing to get a good feel for them.</p><p><b>14 – Tenant Retention</b> – Ask what they do to retain tenant’s i.e. special incentives, customer service policy, etc.</p></div></div>Buyers of properties with active tax foreclosures CANNOT simply pay the tax lien at closing; they MUST file a Court motion first in time or else their property rights will be subsequently stripped!https://realestatemixer.ning.com/blog/buyers-of-properties-with-active-tax-foreclosures-cannot-simply2014-03-31T17:47:29.000Z2014-03-31T17:47:29.000ZAnthony L. Velasquez, Esq.https://realestatemixer.ning.com/Network/AnthonyLVelasquezEsq<div><p><span class="font-size-3"><strong>Buyers of properties with active tax foreclosures CANNOT simply pay the tax lien at closing; they MUST file a Court motion first in time or else their property rights will be subsequently stripped!</strong></span></p><p>This article is intended to AGAIN provide investors and buyers with knowledge of the <strong>NJ Supreme Court’s</strong> ruling and directive in <strong><i>Simon v. Cronecker</i>, 189 <i>N.J.</i> 304 (2007)</strong> where the High Court condemned the practice of a buyer simply proceeding to a closing and paying off an active tax lien (currently in <em>tax foreclosure</em>) without first notifying the Court through an “intervention motion” and obtaining approval for the transaction. While this seminal and landmark case is now 7 years old, there are still active violations of this law on a daily basis. Buyers routinely fail to follow this mandatory procedure, and title companies routinely fail to require it. Yet when title rights are stripped for failure to follow the procedure, title companies deny coverage on the basis that the tax lien was not redeemed -- and they are correct. Thus, the Buyers are left defenseless -- and out of a whole lot of money! It is important to adhere to the policy and procedures to protect your property investment. Let’s start at the beginning:</p><p>In our example, let’s pretend you find a property that you want to buy and you learn that it is facing a <em>tax foreclosure</em>. This information is usually obtained either by the seller telling you that there is already a pending tax foreclosure, or through your title search when you are preparing for closing. Side note: having a <em>tax lien</em> against the property is <i>not</i> the same as having an active <em>tax foreclosure</em> case pending. In the first instance, a tax lien is sold for unpaid taxes. If this exists, but foreclosure has not yet been filed, you can generally proceed to closing and pay off the lien. But in the second instance, if the tax lien was not timely paid back and the tax lien holder waited the mandatory time period (usually 2 years but sometimes shorter if, for instance, the property is abandoned) then the tax lien holder files a <em>tax foreclosure</em> complaint and you now find yourself in the midst of an active foreclosure. Upon filing the complaint, the tax lien holder also files a <i>lis pendens</i> that is recorded in the county land records -- just like the tax lien itself, a deed, a mortgage, etc. It will show up on a county search and this indicates that there is a pending and active <em>tax foreclosure</em>.</p><p>The foreclosure process does not happen overnight. After the <i>lis pendens</i> is filed, the tax lien holder (also called the “Plaintiff” in the foreclosure case) has to serve the parties, obtain default, obtain a redemption order, etc., before they can apply for final judgment. In between this time and while the Plaintiff’s attorney is going through this process, the property owner facing tax foreclosure often seeks to either (1) pay off the lien, or (2) sell the property before final judgment occurs. It is this second instance where you come in as an investor. You want to buy the property. But you cannot. Not yet. And please do not let a title company or unknowing attorney tell you otherwise. Read on.</p><p>This is a specialized area of the law, and general real estate lawyers are notorious for getting it wrong. It is not difficult; it is just unknown and hence the need for this informational article -- even 7 years after the landmark decision of the NJ Supreme Court. The problem with simply going to a closing and paying of the tax lien -- just as you would pay off any open mortgages or judgments -- is that the Court considers the money being used to pay off the tax lien as the “buyer’s money”. The Court knows that the seller is redeeming at closing in order to be permitted to transfer clear title to the buyer. But since it is not the seller’s money <i>independent of the entire transaction</i> the Court considers the buyer the “indirect redeeming party”.</p><p>This is the problem, because the law requires that only certain persons are permitted to redeem a tax lien. Specifically, in order to redeem you must be “named in the action”. Your name must appear in the caption of the tax foreclosure case. The seller’s name obviously appears as the defendant and the property owner. But the buyer’s name does not. Thus, it must be added before redemption occurs or else the Court will find that the redemption is illegal. It does not matter that the transaction is an arms-length, bona-fide sale for true, market value dollars. It does not matter that title insurance was issued and all parties were given notice of the sale -- even if the tax lien holder was provided notice. It is <i>the Court</i> that must be given notice and must give its stamp of approval. Without it, the redemption is illegal. Period.</p><p>What does this mean? Well, let’s pretend in our example that you proceeded to closing without intervening in the Court action and you even used a lawyer and obtained title insurance. Let’s also pretend you bought a house valued at $250,000 for the bargain price of $200,000. Finally, let’s pretend you paid off the tax lien at closing long before the Plaintiff’s attorney even approached final judgment (but after the <i>lis pendens</i> was filed) and you took possession at closing and undertook a $20,000 rehab project on the property. Now, several months later (or even a year later) the tax lien holder files a Court action to declare the prior redemption of the tax lien illegal. He seeks to strip you of title and to obtain possession.</p><p>Your first knee-jerk reaction is to approach your title company and demand that they provide you a defense in Court, right? Wrong. The title company will deny the claim, and they will win. Why? Because in Schedule B of the title policy, they listed that you must redeem the tax lien as a requirement of title insurance. They didn’t spell out the procedures for doing so legally -- they just mandated that it be done. They do not have to tell you "how" to do it. It's enough that they required that it be done. It is <i>your job</i> (and your attorney’s job) to do it <strong>legally</strong>. So that now leaves you with the option of possibly suing your attorney for malpractice. But this doesn’t save your property, and even if you get a monetary judgment from your attorney’s malpractice insurance this is a long way off and likely a losing scenario, anyway. Why? Because attorneys do not like to sue other attorneys; and legal malpractice cases are usually complex, difficult, time consuming and expensive. So you’ll likely be paying for the mistake one way or another. </p><p>The question still remains - what happens to the property? In the <i>Cronecker</i> case, in which the author of this article <em>Anthony L. Velasquez, Esq.</em>, was the lead attorney, the NJ Supreme Court ordered that the remedy of “constructive trust” is proper. This means that the tax lien holder succeeds to your bargain. They get to buy the property for the same price you paid. They get to step into your shoes. In essence they get the benefit of your bargain. You no longer made a $50,000 profit on the purchase; it is the tax lien holder who reaps this benefit. You get paid back your purchase price, but not your costs (attorney fees, closing costs, etc.) and you are held responsible for those costs. Also, based on another related NJ Appellate Court case the additional investment you made for rehab ($20,000 in our example) is also lost, and becomes a windfall to the lien holder -- because you proceeded to make those rehab changes at your own risk and in violation of the redemption law. Therefore, the tax lien holder gets to walk away with the property for $200,000 but gets a property valued at $250,000 plus $20,000 worth of additional rehab work that you invested (and lost). Also, some Courts award the tax lien holder attorney fees -- so you might even be charged with paying their attorney fees for them to receive this benefit!</p><p>Sounds heavy-handed, right? Nope. That’s the law. And in fact, the High Court has held in another case that this has <i>always</i> been the law and thus it is considered “retroactive” despite the fact that it was sparsely enforced.</p><p>You might think this is unfair. But the law exists <i>not for the benefit of the tax lien holder</i>. Instead it exists for the benefit of the distressed property owner facing <em>tax foreclosure</em>. The Court takes a high priority for protecting the vulnerable -- and it wants to see the transaction first, before it occurs and before redemption is made. In doing so, the Court can confirm that the sale is made for real, tangible, meaningful dollars -- not token money. Historically, unscrupulous investors have tried to take unfair advantage of distressed owners facing tax foreclosure and offered token or “nominal” value for the property. If the seller walks away with no true benefit (for example, the sale of $200,000 requires payment of $199,000 in tax liens and the seller receives a net gain of $1,000 or less from the closing) then the Court will not approve the transaction. So the Court mandates that it <i>first</i> have the opportunity to review the transaction and confirm that it exceeds “nominal” value. This is why the punishment is so harsh for failing to adhere -- because unmonitored transactions can be grossly unfair and harmful to the financially vulnerable seller. The Court not only frowns upon this -- it vehemently scorns it.</p><p>Now there is hope. The sale does not have to be true market value; in fact in <i>Cronecker</i> the Court said the $1.2 million property value that was sold for 21% ($250,000 sales price) with a net gain of 5% ($63,000 net dollars to the seller) was still sufficient and legal value (adequate) because that amount of money was true, actual, beneficial, meaningful, tangible dollars. But despite the $250,000 sales price and $63,000 net gain being above “nominal”, the Court still stripped the investor’s title rights in <em>Cronecker</em> because of the failure to first intervene. The monetary success did not stop, fix or excuse the procedural failure. The property rights will still get stripped.</p><p>It gets even worse if the investor obtains a mortgage. Let’s go back to our example and assume that after the sale the investor takes out a home equity mortgage based on the $50,000 equity that remained in the property. As above, let’s pretend a mortgage policy was obtained from a title company. But the title claim would again be denied because of the same standard exclusion noted above. Thus, the investor now find himself stripped of title, stripped of the benefit of the bargain, stripped of the rehab costs, possibly responsible for the other side’s attorney fees, and now responsible for the home equity loan amount he took out! Yes, the property is removed as “security” for the loan; but the lender could still seek recovery against the borrower as an unsecured loan - through a normal collection action. </p><p>As you can see, making of the mistake of not submitting a simple intervention motion prior to closing on a simple sale can have EXTREME consequences for an investor sometime down the road. So how do you avoid these pitfalls? My advice is to hire a competent attorney to file a quick motion to allow you as an investment buyer to proceed to closing and <em>redeem</em> the tax lien as part of the closing with the pending <em>tax foreclosure</em> then being dismissed (or do it yourself without an attorney if you can navigate the legal minefields).</p><p>As a final hint, it is advised that you <i>do not</i> try to take some easy way out and devise some plan or scheme to circumvent this mandatory intervention procedure. Many cases exist in New Jersey where a buyer “loaned” money to the seller so that the seller (named in the lawsuit) could redeem the tax lien prior to the sale, and then the buyer was “repaid” or “given a credit” at the closing for this loaned amount. This, too, has been struck down as illegal by the NJ Court -- along with a long list of variations on this scheme. It will result in the same thing -- stripped title, massive costs and a great big headache. It is amazing that 7 years after this case law was confirmed by the NJ Supreme Court (and repeatedly upheld and enforced in countless subsequent cases), real estate practitioners including attorneys, title companies and realtors <i>still do not know of the mandatory requirements</i>. But as always, ignorance of the law is no excuse. You are better served to play it safe, protect your investment and conduct a “legal” redemption of a tax lien in an active tax foreclosure when you seek to buy such an investment property.</p></div>How to Analyze Cash Flow Real Estatehttps://realestatemixer.ning.com/blog/how-to-analyze-cash-flow-real-estate2013-02-19T02:30:00.000Z2013-02-19T02:30:00.000ZAnkit Duggalhttps://realestatemixer.ning.com/Network/AnkitDuggal<div><p>Have you ever heard of the 2-50 rule? Then you need to read this blog.</p><p><strong>Why Should You Learn This Rule</strong></p><p>Getting overwhelmed with “prospects” (potential deals) hitting your email on a daily basis. Is it starting to get overwhelming? It was for me as it is a lot to swift through. You need to develop a quick rules or shortcuts so that you can weed through the unwanted prospects quickly and efficiently. </p><p><strong>2-50 Rule To High Cap Rate Investments</strong></p><p>The 2% rule says if you can find a property priced such that the gross incoming rent is 2% of the purchase price, it will produce a 10%+ cap rate. Note that you cannot use this to figure out what the rent should be. The market dictates the rent. Rather, you have to use it to determine how much you can pay. The 50% rule is an empirical rule developed from observations of many multifamily cash flow investors across the country. The rule states that a real estate asset either in New Jersey or other parts of the country will have average operating expense ratio of approximately 50% of collected rents. </p><p>These two rules do work together to find you that 10%+ cap rate deal. If you collect 2% of the rent each month, you're collecting 24%/year. If expenses cost you 50%, the prospect Net Operating Income (“NOI”) will be 12%/year (Cap Rate). So lets see this rule in action:</p><p> </p><p><span style="text-decoration:underline;">Scenario:</span></p><p>You receive a deal in your email or from a wholesaler that provides the following details:</p><p>Asking Price: $220,000</p><p>In-place Rents: $3,700 per month</p><p>Potential Rents: $3,900 per month</p><p> </p><p>What should you pay for this piece of cash flow real estate?</p><p><b>2% rule:</b> Max purchase offer should be $ 3,700/.02 = $185,000 </p><p><b>50% rule:</b> Your projected expenses would be $3,700 *.50 = $1,850 per month</p><p><b>NOI:</b> $1,850 per month</p><p><b>Cap Rate:</b> ($1,850*12)/$1850000 = 12%</p><p> </p><p>Now remember these rules have been implemented to produce high cap rate returns but you as an investor might have a lower hurdle rate of return</p><p></p><p>Happy Investing</p><p></p><p>Ankit</p><p></p><p></p><p></p><p></p></div>Avoid Toilet and Tenant Investments with Tax Lienshttps://realestatemixer.ning.com/blog/avoid-toilet-and-tenant-investments-with-tax-liens2013-04-06T01:00:00.000Z2013-04-06T01:00:00.000ZAnkit Duggalhttps://realestatemixer.ning.com/Network/AnkitDuggal<div><p><b>The Problem: Toilets and Tenants!</b></p><p>When I started looking into what sucked up a lot of time during the week I noticed a pattern. Toilets and Tenants sucked up a lot of my time and the resources of my company week to week.This week we talk about one of my favorite “No Toilet” asset class: Tax Liens.</p><p><b>Why Tax Liens?</b></p><p>I was searching for yield with minimal effort. One night I was digging around the internet for alternative investments within the real estate asset class and I came across Tax Liens/Tax Deed. Tax Liens promised returns up to 18% (in New Jersey) with minimal day to day management. Hence I had to dig more into Tax Liens.</p><p><b>What are Tax Liens?</b></p><p>Tax Liens come about as function of cash flow management by municipalities If a property owner doesn’t pay their quarterly property taxes, then a municipality places a tax lien on his or her property. Twenty-eight states, Washington, D.C., Puerto Rico and the U.S. Virgin Islands allow those liens to be sold to private investors, and about $6 billion in liens come up for sale each year. The local government gets its cash immediately, and the buyer gets the right to collect the delinquent tax, a penalty and interest on the late payment that can (in theory) run as high as 12% to 36% a year, depending on the state. <b>12 to 36% per year!</b> Being a capitalistic driven investor. I had to dig even further and learn more about the pros and cons on this asset class:</p><p><b>Pros & Cons of Tax Liens</b></p><ul><li>Limited Capital: If you have small capital savings then you can invest into this asset class with money as little as $100. Young Investors (under the age of 25) who use the excuse of no capital cannot do so anymore.</li><li>Lower Risk: Tax Liens contains risks associated with real estate, municipal fines, bankruptcy and government errors. Even with these risks, tax liens are lower in risk profile when compared to other assets and investment styles.</li><li>Stabilized Rate of Returns: Unlike cash flow or flip investments where you returns can be high volatile. When you invest into tax liens you will know your going-in yield with a high degree of certainty subject to bankruptcy risk.</li><li>On Going Cash Flow: If you are looking for monthly cash flow then Tax Liens are not the investment for you. Tax Liens investment are paid off in a lump sum at the redemption which includes both your principal and your interest earned return.</li><li>On Going Investment Dollars: Once you buy an initial lien then you will have to buy the subsequent liens to protect your interest in a property because new liens hold priority over older ones. So tax lien investing requires a sizable chunk of cash that you won’t need for a while.</li></ul><p><b>How to Invest in Tax Liens</b></p><p>There’s usually stiff competition for liens from lien investment funds and money managers and individual investors.</p><p>Use a niched investment approach to be an effective individual tax lien investor:</p><ol><li><b>Investment Strategy:</b> Are you targeting liens for redemption or non-redemption?</li><li><b>Investment Areas:</b> What are the towns that you want to own tax liens within? Are they urban, suburban, white collar, blue collar? There are many ways to define your investment area.</li><li><b>Minimum Lien Size:</b> What is the minimum amount of capital that you want to invest into liens? Bigger funds and investors will not typically into the $100,200 or even $500 liens as they need to invest a large amount of capital so they prefer higher dollar value liens to help move their needle. Use this to your advantage as a smaller investor you have more flexible investment thresholds.</li><li><b>Understand the Process:</b> When investing, it is important to know just how much return on investment is to be expected and what the bidding process while participating in the tax lien auctions. Talk to the municipal or county tax collector before an upcoming auction so that they can advise you about the process and procedures of bidding at their upcoming tax lien auctions.</li></ol><p>Tax Liens have been a great investment tool for my personal portfolio as I have been able to invest idle cash into these instruments and earn a blended 15% return on capital. Use this “No Toilet” Asset class to grow and/or diversify your personal and business investment portfolio.</p><p></p><p></p></div>New Court Ruling On The Inspection Of Property Located Within Wetlands Areashttps://realestatemixer.ning.com/blog/new-court-ruling-on-the-inspection-of-property-located-within2013-04-23T22:30:00.000Z2013-04-23T22:30:00.000ZAnthony L. Velasquez, Esq.https://realestatemixer.ning.com/Network/AnthonyLVelasquezEsq<div><p>Here is an article I wrote a couple weeks ago that I thought might be interesting to the Tri-State group members.<b><br /></b></p><p></p><p><b>Developers Take Note – Land Located Within Wetlands And Subject To The Freshwater Wetlands Protection Act Can Be Searched Without A Warrant (by Anthony L. Velasquez, Esq.)<br /></b></p><p>The NJ Supreme Court recently issued a landmark ruling that permits warrantless searches of residential and commercial property subject to the Freshwater Wetlands Protection Act (hereafter “FWPA”), <i>N.J.S.A.</i> 13:9B-1 et seq. This paves the way for unannounced administrative inspections of private land subject to the FWPA, and if violations are found it can result in administrative and civil penalties and fines, including mandatory requirements to restore wetland conditions often at astronomical costs.</p><p>In the lawsuit <i>NJ Department of Environmental Protection v. Huber</i>, decided April 4, 2013, the question was raised whether an owner’s Fourth Amendment rights to be free from unlawful searches and seizures is violated when DEP inspectors enter an owner’s property without permission for the purpose of inspecting the land to ensure conformity and compliance with the FWPA. Under the FWPA, owners must obtain a permit before taking certain action on their land such as removing soil, disturbing the water level, adding fill or altering plant life. The DEP inspectors entered the Huber property and concluded that Huber had placed 2,500 square feet of fill within the wetlands and had cultivated a lawn. They also found that Huber had constructed a deck, patio and retaining wall that encroached on a wetlands easement. Huber was ordered to pay a substantial penalty and restore the property to its prior condition.</p><p>On appeal, Huber argued that the evidence of violations should have been excluded from trial since it was obtained without a warrant. The DEP defended its warrantless inspection by relying upon a prior case where a warrantless inspection was declared legal – <i>U.S. v. Burger</i>, 482 <i>U.S.</i> 691 (1987). In <i>Burger</i>, the landowner operated a junkyard and inspectors entered his property without a warrant to confirm compliance with junkyard operations. During the inspection, stolen vehicles and stolen automobile parts were discovered. The owner was charged with possession of stolen property, and at trial he attempted to suppress the evidence as obtained without a warrant in violation of his Fourth Amendment rights to be free from unlawful searches and seizures. The U.S. Supreme Court disagreed with the land owner, and found that the search was legal since the owner’s privacy interests were weak as compared to the government’s strong interest in regulating junkyards – a “closely regulated business” necessary for the health and safety of the public. </p><p>The DEP inspectors said that the inspection of the Huber’s property was similar to the <i>Burger</i> inspection since it was done in furtherance of an existing law (FWPA) that was implemented for the well-being of the public and for the protection of wildlife – a strong public interest. Huber argued that the situations were different: inspecting a highly regulated commercial business such as a junkyard or waste facility is <i>vastly different</i> than inspecting a private, residential home. But the NJ Supreme Court ruled that the inspection was legal and valid, since it was in furtherance of the FWPA - a strong public interest - and the land was subject to the wetlands legal protections. It found that a reasonable administrative inspection scheme will comply with the Fourth Amendment even without the consent of the land owners, if the regulatory scheme advances important government interests, takes into account reasonable expectations of privacy and avoids nonconsensual forced entry outside of the bounds of the regulatory framework.</p><p>This ruling sets the stage for the DEP and other administrative enforcement agencies to inspect countless private, residential properties and commercial properties located within and subject to the FWPA and other similar environmental and regulatory laws throughout New Jersey. As long as the inspection is in furtherance of an <i>important government interest</i> and is tailored to fall within the regulatory framework, the warrantless inspection will be found valid and legal.</p><p>Does your property fall within a wetlands zone? You can find out by using the NJ DEP web site, specifically the Geographic Information Systems page within that site, although it is difficult to navigate. You can also check the wetlands maps by using other web sites that provide GIS such as PropertyPilot through the layering function (easier to navigate). Doing so, you can discover whether or not your property might lie within a wetlands area. This might indicate whether your property may be subject to the protections of the FWPA -- and warrantless inspections to ensure conformity with that law. While this discovery alone may not conclude the legal inquiry as to whether or not your land might be subject to warrantless searches, it is a great starting point.</p></div>Syndicating your way to a deal!https://realestatemixer.ning.com/blog/syndicating-your-way-to-a-deal2012-08-17T12:21:43.000Z2012-08-17T12:21:43.000ZAnkit Duggalhttps://realestatemixer.ning.com/Network/AnkitDuggal<div><p>You have spent hours seeking, structuring, placing offers, and contracting a real estate investment opportunity. Now you a deal locked up and may have gotten qualified for hard money or conventional debt financing but this is not the good old 100% financing days. So that means that you will need to bring cash to the deal to help complete the acquisition. What happens when you are overextended or do not have enough cash? Then understanding syndications can help you get into a deal.</p><p> </p><p>Real Estate Syndication involves bringing a group of accredited individual investors together to pool capital for investment in real estate to help make up the equity portion of the capital table.</p><p> </p><p><b><i>Parties to Syndication</i></b></p><p><i>Syndicator/Promoter</i> who creates the syndicate in the first place;</p><p><i>Syndicate Manager</i> who sources the equity and manages the syndication. Typically the promoter is the syndicate manager</p><p><i>Capital Investors</i> who purchase the investment units.</p><p> </p><p><b><i>Legal Structure</i></b></p><p>Selecting the form of organization involves practical as well as legal and tax considerations. To choose the right structure you need to balance the following parameters: co-ownership, divided ownership, corporation, trust, general partnership and limited partnership.</p><p> </p><p><b><i>Syndicate Structure</i></b></p><p>Limited Capital Investors</p><p>A <i>hurdle/preferred return</i> on invested capital. They receive a percentage figure which is stated from the outset on invested capital prior to the syndicator/general partner receiving payment. Depending on the risk attached to the deal, this typically rests somewhere between 5% and 10%.</p><p> </p><p>A <i>waterfall structure</i> profit structure whereby the sponsors’ cut of the profit increases as the profits rise. Differing ‘hurdle rates’ are set which dictate the profit split between the capital investor and the sponsor/general partner.</p><p></p><p></p></div>Deal Sourcing from your Chair!https://realestatemixer.ning.com/blog/deal-sourcing-from-your-chair2012-12-28T17:00:00.000Z2012-12-28T17:00:00.000ZAnkit Duggalhttps://realestatemixer.ning.com/Network/AnkitDuggal<div><p> Today we will discuss using online search tools to help you find potential deals so that you can filter them down.</p><p> </p><p>CAVEAT: The best deals are not usually found online since deals that wind up online usually deals that the realtors or their investors did not want to buy. So be careful but use online searches as a business tool to find potentials. You can make a potential into a deal by using your structuring and creative negotiating skill set.</p><p> </p><p>I break apart the search location into Residential and Commercial asset class buckets:</p><p> </p><p><u>Residential (1 to 4units)</u></p><p><a href="http://new.gsmls.com/publicsite/propsearch.do?method=getcountysearch">http://new.gsmls.com/publicsite/propsearch.do?method=getcountysearch</a></p><p><a href="http://www.njmls.com/">http://www.njmls.com/</a></p><p> </p><p>Setup a user profile on these sites and search for deals based on your established investment criteria. A few tips on how to use these sites more efficient are:</p><ol><li>Save Properties that match your investment criteria and request updates to be sent to your email. This allows you to know as soon as an agent changes the price, remarks, or the status of the asset without you having to go back daily. The goal is to more efficient not more laborious.</li><li>Setup a search criteria and request the website to send you daily deals that match your criteria. This allows you to comfortably every day sit in front of your email and see what new deals have come into the market that meet your search criteria.</li></ol><p> </p><p><u>Commercial (5+ units, retail, self storage etc.)</u></p><p><a href="http://www.loopnet.com">http://www.loopnet.com</a></p><p><a href="http://www.showcase.com">http://www.showcase.com</a></p><p><a href="http://www.marcusmillichap.com">http://www.marcusmillichap.com</a></p><p> <br /> Use these sites to find commercial deals online. These are typically more robust in my opinion that the residential sites so use those features to get more creative. Most investors use these online sites to search for properties in a specific geographical location and/or a specific asset class. Your goal is to be better than the next investor so what if you got creative and combined the geographic/asset search with the keyword search feature.</p><p> </p><p>Here is how you can make the keyword search combination to find your next creative or below market deal: <br /> <br /> Go to the <u>Search Properties for Sale</u> link. Fill in your locations and the asset types that you are interested in investing into. Now here is the creative part, look at the bottom of the screen for the section titled “Keyword”. Now get creative with your search terms.</p><p> </p><p>Think about keywords that might work in helping you find creatively structured or distressed deals. Here are some of the ones that I use in my daily reminder search: owner financing, motivated, reduction, make a deal, owner financing.</p><p> </p><p>Next click Search and Happy Hunting!</p><p> </p><p>I hope that you find these resources and tip/tricks helpful in finding your next real estate deal.</p><p> </p><p>Happy Investing</p><p> </p><p>Ankit</p><p> </p></div>What are the different types of mortgage calculators to help you buy real estate property?https://realestatemixer.ning.com/blog/what-are-the-different-types-of-mortgage-calculators-to-help-you2012-10-18T10:29:13.000Z2012-10-18T10:29:13.000ZGeorge Alfordhttps://realestatemixer.ning.com/Network/GeorgeAlford<div><p>When you’re planning to invest in real estate property, you need to calculate the total amount you can afford to spend. Therefore, a mortgage calculator can help you estimate the total amount you can afford to spend to buy real estate property. Therefore, you’re required to acquire more information on mortgage calculator before you invest in real estate property. <br /><br />The loan mortgage calculators are designed to help people to determine the amount they can afford to pay off. You’re required to submit details in the <a href="http://www.mortgagefit.com/calculators/" target="_blank">mortgage calculator</a> in order to know your monthly payments on the loan. You need to provide details like interest rate and mortgage term on the loan to get your mortgage payment. <br /><br />However, there are various types of calculators to help you buy real estate property: <br /><br /><strong>1. Monthly Payment calculator:</strong> This calculator can help you manage to calculate the amount you need to pay in a month. Therefore, you can be aware of the amount you need to pay each month. It can help you choose a loan with specific term and interest rate that can be affordable to pay off. So, you can easily decide which loan you want to apply. <br /><br /><strong>2. Interest rate mortgage calculator:</strong> This calculator can be effective if you’re required to pay interest on the mortgage loan for a particular period of time. The payment you make towards the loan is divided into two parts. One part is used towards the principal amount and the other part is used for paying the interest rate. Therefore, you can estimate the amount you’re required to pay on interest or both on interest and principal balance. <br /><br /><strong>3. Adjustable rate mortgage calculator:</strong> This calculator is designed for lower interest rate, so the monthly interest rates are low. There are great risks involved in this type of calculators as the interest rate may increase in future. Therefore, you need to keep this aspect in mind while working with an adjustable mortgage calculator. <br /><br /><strong>4. Amortization schedule calculator:</strong> With the help of this calculator you can manage to estimate the amount that is going towards the principal balance and interest. If you’re planning to lower your principal amount, then this calculator can be beneficial to know the amount you can pay to lower your principal balance. Therefore, you can increase your monthly payment with the help of this calculator to lower your principal balance. You can manage to eliminate your financial woes once the loan term reduces. <br /><br />Therefore, you need to keep in mind the names of the above mentioned calculators before you plan to buy real estate property. </p></div>Different Kinds Of Home Loans and their advantageshttps://realestatemixer.ning.com/blog/different-kinds-of-home-loans-and-their-advantages2012-10-12T10:58:29.000Z2012-10-12T10:58:29.000ZGeorge Alfordhttps://realestatemixer.ning.com/Network/GeorgeAlford<div><p>Are you looking for a house loan? There are a lot of aspects that need to be considered before purchasing a appropriate one. There are a lot of financial loans existing and choosing the one that meets your needs and specifications can be a complex job. Speaking with professionals or economical professionals can help you to get a better idea about the property home <a href="http://www.bankrate.com/">mortgages</a> and their costs.Talking about the different kinds of home loans, we can see that home mortgages are of different kinds. Here we can talk about the essence of a home loan rather than going into its information.</p><p>In this procedure you take a loan and use the house which you are looking to buy as security. If you fall short to make the expenses consistently it will only improve the prices and can even eventually cause to foreclosed. The prices of these home mortgages will be just like all other kinds. Re-financing is another type in which the dealing of one debt for another occurs. The advantage of this technique can be the low per month interest and lesser per month bills. This technique has become well-known due to the large problems in the international economic climate.</p><p>Subprime loaning represents the technique were the loaning company who gives cash to the debtors who never yet fulfill underwriting recommendations. The danger engaged in this technique is high as it is mostly used to people with bad record of credit worthiness or those who have a record of misbehavior. Another one is the mortgage mortgage, where the client has to put the value of their home security for the cash obtained.</p><p>They are usually given in one huge transaction and have a set amount. This should only be used only if you are certain that you will be able to pay it off. One similar type of home loan is home equity history of credit score, in which the house is used as the collateral for a history of credit score. The repayment will be the amount borrowed and also the interest rates. The history of credit score is offered for a draw period which can be up to 20 years.</p><p>People must be advised about the key benefits of the mortgage loans and its benefits. You can decrease the prices by selecting appropriate plans. It is possible to bring down the payment amount and also to decrease the prices. You can even modify the expenses based on your per month income. This can be considered as the main and best function. By making the per month bills cost-effective, you can avoid the charges for overdue expenses.</p></div>Finding Deals through Auctions!https://realestatemixer.ning.com/blog/finding-deals-through-auctions2012-10-31T23:00:00.000Z2012-10-31T23:00:00.000ZAnkit Duggalhttps://realestatemixer.ning.com/Network/AnkitDuggal<div><p>Recently I covered the topic of how to find potential deals from the comfort of your chair. Continuing along that theme; I will be talking about s how you can find deals at upcoming real estate auctions in the Northern New Jersey market.</p><p> </p><p><b>What is a real estate auction?</b></p><p>A real estate auction is an innovative and effective method of selling real estate. It is an intense, accelerated real estate marketing process that involves the public sale of any property—most certainly including those that are nondistressed—through open cry, competitive bidding.<a title="" href="#_ftn1">[1]</a></p><p> </p><p><b>Who can hold an auction?</b></p><p>Auctions can be held by both <u>private entities</u> such as auctioneers hired by the seller or realtors or <u>public entities</u> such as the sheriff, municipality, and the federal government. Each entity usually utilizes one of the following three types of auctions:</p><p> </p><p>1. <i>Minimum Bid</i><i> </i>is the lowest bid (decided by the seller prior to auction) the auctioneer will accept for a property. Once that bid is reached, the property will sell to the highest bidder.</p><p>2. <i>Published Reserve</i><i> </i>is the lowest amount that the seller must sell a property at auction, but the bidding can start wherever the bidders choose. If the Published Reserve bid is not reached, then the seller can accept, reject or counter the highest bid.</p><p>3. <i>Absolute Auction</i><i> </i>is where the highest bidder acquires the property, regardless of the amount. There is no reserve price below where it will not be sold. Absolute Real Estate Auctions tend to attract the highest amount of interest.<a title="" href="#_ftn2">[2]</a></p><p> </p><p><b>Where can you find out about upcoming real estate auctions?</b></p><p><u>Private Entity Auction Sources:</u></p><p>The National Auctioneers Association's Web site (<a href="http://www.auctioneers.org">www.auctioneers.org</a>) or the National Association of Realtors' Web site (<a href="http://www.onerealtorplace.com">www.onerealtorplace.com</a>) lists dozens of upcoming auctions nationwide. Or, <a href="http://www.auctionweb.com">www.auctionweb.com</a> offers an online list of affiliated real estate auctioneers. Some namesake private auctioneers that continuously hold auctions in the New Jersey market are as follows:</p><p>Williams &Williams <a href="http://www.williamsauction.com/">http://www.williamsauction.com/</a></p><p>Sheldon Good & Company <a href="http://www.sheldongood.com/">http://www.sheldongood.com/</a></p><p>Real Estate Disposition Corp <a href="http://www.auction.com">http://www.auction.com</a></p><p>Hudson & Marshall <a href="http://www.hudsonandmarshall.com/">http://www.hudsonandmarshall.com/</a></p><p>Max Spann <a href="http://www.maxspann.com/">http://www.maxspann.com/</a></p><p>So subscribe to their email lists that way you can be update on the auctions that are coming in this area.</p><p> </p><p><u>Public Entity Auction Sources:</u></p><p>Public entities auctioning real property can include sheriff sales, IRS sales, US Marshall sales, Treasury & IRS etc. The major issue that I had when I first started was finding out about them without spending hours searching each entities website. So how do you find out about these auctions so that you can act upon them quickly and easily. For that you need a system and I will give you mine.</p><p> </p><p>I usually break apart this auction category into two buckets: Sheriff Sales Auctions and Other Government Auctions.</p><p>Lets attack the easy one first- Other Government Auctions. There are few good websites that compile different government department upcoming auctions:</p><p> </p><p>Bid4Assets <a href="http://www.bid4assets.com/">http://www.bid4assets.com/</a></p><p>GovSales <a href="http://www.govsales.gov/govsales/govsales/">http://www.govsales.gov/govsales/govsales/</a> </p><p>CWAMS <a href="http://www.cwsmarketing.com/realestate.htm">http://www.cwsmarketing.com/realestate.htm</a></p><p> </p><p>Sheriff Sale is the other public entity auction that happens on a weekly basis at the county sheriff office. A sheriff sale auction happens when an unpaid money judgment such as a mortgage needs to be satisfied with the sale of the asset backing that judgment. Sheriff sale in New Jersey happen on a weekly basis at a fixed day and time in each county. So you need to keep on top of the sheriff sale websites to see what are the properties coming up at the next week’s auction. Below is the list of sheriff sale county websites in Northern New Jersey where you can find the upcoming foreclosure auctions (PS its FREE on these sites unlike Realtytrac or Foreclosure.com):</p><p> </p><p>Essex County <a href="http://salesweb.civilview.com/SalesListing.aspx">http://salesweb.civilview.com/SalesListing.aspx</a></p><p>Passaic County <a href="http://www.pcsheriff.org">http://www.pcsheriff.org</a></p><p>Bergen County <a href="http://168.229.7.54/sheriff_sale.aspx">http://168.229.7.54/sheriff_sale.aspx</a></p><p>Union County <a href="http://ucnj.org/government/sheriff/sheriffs-sale-information/">http://ucnj.org/government/sheriff/sheriffs-sale-information/</a></p><p>Morris County <a href="http://www.mcsheriff.org/sales/">http://www.mcsheriff.org/sales/</a></p><p>Hudson County <a href="http://www.hudsoncountysheriff.org/Sales/">http://www.hudsoncountysheriff.org/Sales/</a></p><p> </p><p>Use the above resources and websites to find your next auction deal but be careful, as auction buying is a tricky and a high-risk strategy. I will be covering in the upcoming weeks on how you can complete due diligence on traditional distressed assets along with auction purchases to help minimize the risk associated with distressed asset investing. </p><p> </p><p>Happy Investing</p><p> </p><p>Ankit</p><div><br clear="all" /><hr width="33%" size="1" align="left" /><div><p><a title="" href="#_ftnref1">[1]</a> <a href="http://www.realtor.org/auction/the-basics-benefits">http://www.realtor.org/auction/the-basics-benefits</a></p></div><div><p><a title="" href="#_ftnref2">[2]</a> <a href="http://www.propertyauction.com/blog/index.php/2011/01/defining-the-terms-the-3-main-types-of-real-estate-auctions/">http://www.propertyauction.com/blog/index.php/2011/01/defining-the-terms-the-3-main-types-of-real-estate-auctions/</a></p></div></div></div>Rehabbing with Randy -- The Re-Birth of 97 Oraton St 3 Family Rehab -- Week...I'm losing count LOLhttps://realestatemixer.ning.com/blog/rehabbing-with-randy-the-re-birth-of-97-oraton-st-3-family-reha-52012-08-23T01:12:32.000Z2012-08-23T01:12:32.000ZRandy Kuhnhttps://realestatemixer.ning.com/Network/RandyKuhn<div><p>Alright, so i had to take a blog break as there are just some things that are outside my control and nothing too exciting has been going on to really talk about...well in regards to this specific project (outside this deal there has actually been a lot of fun stuff and drama stuff going on). But heres where we are at, the contractor on the job is moving along, limited of course in what he can do because believe it or not, we are still not completely past the town issues we ran into, i know i know...its sometimes unreal how peices to the puzzle are fitting together...but trust me in that i am going to force the peices in and make it work.</p><p>Regardless, even though some areas of the project cant be closed up and finished, other areas can be and progress in those areas are actually being made as seen fit. It just gets difficult to go so far ad then say OK, lets move to something else and this will have to wait til later. So, walls that can be fixed have been, most have been primed and 1st coat of paint has been applied where possible...doors have been repaired/installed where needed, trim work is getting done etc. etc. Once we get past the town hurdle, the total transformation will move at a rapid pace as the contrator wants to finish and go onto the next project and he wants to do everything in his power to make us happy...which is to finish...although i would put money on it that he wants to move forward so he an get his next check..lol.</p><p>Bottom line is that we knew this was going to be a long project (aside from this delay weare experiencing) to complete due to the mere scope of the job and we are really just going to be behind a couple weeks. Its nothing that is going to break us as we are able to adjust, its just something you would like to avoid if possible.</p><p>So bare with me as we make our way through the maze and in about a week or so, i am hoping that most of our issues have been addressed and we will see momentum pick up again on this deal.</p><p>Til next time... :)</p><p> </p><p> </p></div>Rehabbing with Randy -- The Re-Birth of 97 Oraton St 3 Family Rehab -- Week 5...and a 1/2https://realestatemixer.ning.com/blog/rehabbing-with-randy-the-re-birth-of-97-oraton-st-3-family-reha-42012-07-19T03:11:15.000Z2012-07-19T03:11:15.000ZRandy Kuhnhttps://realestatemixer.ning.com/Network/RandyKuhn<div><p>You know, this business is definitely not for the faint of heart and the ability to adapt and take the good with the bad will show in the end if you will survive in the long run. With that being said, this week brough an inconvenience and some unnecessary stress in dealing with permits and it comes courtesy of the Newark Permit Division.</p><p>When you take permits out, the town/city will 1st verify that the owner listed on the permit matches the real owner. Being that we recently closed on this property, tax records are not instantaneously updated in the system when we were ready to start working...basically day two or so of ownership, so in order to proove we have full ownership, we included a copy of the DEED along with the package. Well, thats how i handed it in, but after the package got moved around...the Deed somehow vanished. Heres the kicker...We submitted two packages: One for the roof and another that included the electric, plumbing, building and fire applications. The town approved our roofing package, which needed the Deed like the other package, but said they didnt have the deed for the main package. Long story short, i told them that the deed was submitted and the lady who helped me even made the copy herself, and although they dont have it now, a copy was in the other roofing package (like they couldnt just figure that out on their own). Anyway, they made another copy and put it back in the right place, but there is a formal process with permits and we basically have to start from scratch and are now back in the waiting process for the package to be approved. So how long will this process take, maybe two to three weeks. Fortunately, there is enough work to do in other places where most things can get, but it does throw a wrench into the mix as now we have to adjust what work is to get done and in what order. </p><p>Well, it is what it is, the bathrooms and kitchen areas can only get done to a certain point and then its a hurry up and wait game until the permits are issued where we can schedule rough inspections and close up walls. Hopefully, we can just progress with all other prep and get as much done as possible so that when we get the go ahead to close up walls we can take this deal to the end.</p><p>Not the worst thing to happen, just a hurdle we need to get over and deal with another week slow down in the project. Of all the times i have submitted a permit package, sometimes they move fast, sometimes they move slow, but this is the first time an integral part of the package was lost and we had to start over. Like i mentioned in a previous post, there is always something to learn...except in this case there is nothing i can do in the future to prevent this from happening, except know that ANYTHING is possible.</p><p>Back on track and tomorrow i will go over a new game plan and take it from there.</p><p></p><p>Randy</p><p></p><p></p><p></p><p></p><p></p><p></p></div>Rehabbing with Randy -- The Re-Birth of 97 Oraton St 3 Family Rehab -- Week 4https://realestatemixer.ning.com/blog/rehabbing-with-randy-the-re-birth-of-97-oraton-st-3-family-reha-32012-07-09T02:01:36.000Z2012-07-09T02:01:36.000ZRandy Kuhnhttps://realestatemixer.ning.com/Network/RandyKuhn<div><p>Week 4...Just calling like i see it here...not the most exciting week on the jobsite and for those reading, its not the most OMG exciting reading material either, but as you know we have had basically two set backs thus far...1) the request to change the entire heating system from steam to baseboard and 2) some electrical issues which are now in the process of being corrected. The rough for the new baseboard heat is complete and this week will allow the electrician to tie up all loose ends and the plumber to finish up all of his final roughs and get the furnaces and hot water heaters into the basement. Once this week passes, things will start to pick up and the final product will start to pull together, but lets not forget there is still a lot of work to do. We still have to build a 3 story deck (waiting on permit approval), fix up all damaged walls (and re-damaged walls from the baseboard heat lines being run), finish up 3 kitchens and 3 bathrooms, add a couple windows, install some new doors and trim, a ton of paint and flooring (and all the little stuff in between).</p><p>Unfortunately, the end of the behind the scenes work (Basically end of Phase 1) is always the most important but never the most exciting (whereas the interesting things to see and talk about happen in the beginning). I know, i know, you were probably expecting some crazy story where i went to the jobsite and...never mind, i am not even going there as i dont want to put the whammy on the jobsite!!! Moving on...we just cant get started with any of the fun finish work without first making sure the stuff behind the walls is all squared away and in our case, there is a lot of this kind of prep work that is needed. Hopefully by next week we will be entering Phase 2, where we will be focusing on the 3rd floor unit getting it ready to be finished. This would entail all wall repair as needed, a lot of spackling, windows, doors, trim and maybe some paint. Now based upon the total in-efficiency of the Newark Permit Division, i am not 100% sure yet of when we are getting the go ahead to close up the bathrooms and kitchens (it really should be sometime this week), but until then, we will hit all other areas of the units and leave the kitchen and bath until last if need be. Trust me there is plenty of other work that needs to get done that this will not make a difference time wise.</p><p>Ok, looks like i am going to keep it kinda short here compared to the last 3 weeks, but hey...it is what is ;)</p><p><br />See ya back here in about a week +/-</p></div>Rehabbing with Randy -- The Re-Birth of 97 Oraton St 3 Family Rehab -- Week 3https://realestatemixer.ning.com/blog/rehabbing-with-randy-the-re-birth-of-97-oraton-st-3-family-reha-22012-06-29T04:33:47.000Z2012-06-29T04:33:47.000ZRandy Kuhnhttps://realestatemixer.ning.com/Network/RandyKuhn<div><p><br /> </p><p>Alright guys and gals, week 3. If you are like me and planned your rehab right from day one, everything should be smooth sailing, you should be right on schedule, right on budget and there definitely shouldn’t be any surprises because you thought of everything…you did think of EVERYTHING right??? C’mon now, let’s get real here for a minute, its possible that everything goes as planned, but that doesn’t happen on every deal. We aren’t doing a super light, no skills necessary, lets trick our friends and family into helping us on the weekend for free pizza and a six pack of beer, carpet and paint kind of rehab here. When doing a rehab on the scale we are doing, there are some things you cant forsee (but with experience you will be able to anticipate some potential problems, buuuuuuuuut, your kinda crossing your fingers and hoping for the best). The problem is you don’t know for sure until you know for sure. If you couldn’t tell by now, Houston...we have a problem. OK OK, its not a huge problem…more like an inconvenience, but it probably will cost us a couple grand in the end…DOH!</p><p>So what happened this week on the jobsite that we typically don’t encounter on our other rehabs? Well aren’t you glad I just felt like asking myself that question!!! Well to get where we are at, we need to go back to when we started with our evaluation of this deal and conducted our initial scope of work and inspection (If I could make that dreaming/recollection chimey music right now, I would). When looking a job of this caliber, typically the property has been vacant for quite some time and either the electric or the water has been turned off. If this is the case, it is very difficult to determine what electrical repairs are needed, unless of course you are planning on running EVERYTHING new…if that’s the case, its actually very easy to know what the cost will be. So on this property, the electric panels were so damaged that even if we had a generator hooked up to the panel, it would be too unsafe to try and get power on to “test” the electric.</p><p>On a side note, even if we wanted to test the electric lines, god forbid something happened because we gave power to the house and a short happened somewhere, a few minutes later a couple guys start running out of the house because its on fire. Next thing you know the cops show up, draw guns on you because the neighbors called them saying you intentionally just burnt a house down. So as you lay there on the ground with a knee in your back, taking a couple cheap shots, you now have to explain what you were doing and that the owner probably didn’t give you permission to do what you were doing in the first place. A month later you get some legal papers cuz now someone is suing you for burning down their crappy house…you actually did them a favor. OK, that may be my imagination running wild and a little bit of a stretch, but the point is, estimating the exact repairs needed for electricity is a real unknown unless you do everything from scratch.</p><p>So what did we estimate repair wise and what happened? Well, we knew as a fact we would need a new 200AMP service with 4 meters (1 for each of the 3 units and 1 for the common area). Based upon how someone else “renovated” in the past, I knew the smoke alarms and security lights should not be on the same line, so I knew we would be separating common electric. Additionally, we assumed that due to the age of the house, the 1<sup>st</sup> floor common electric was commonly run to the first floor unit, and the same for the 2<sup>nd</sup> and 3<sup>rd</sup> floor. Therefore we accounted that we would open some walls and separate everything as needed. We knew we were gutting the bathrooms, so we would have to update the electric there and run new home runs (a home run is a separate dedicated line directly from the panel box to desired location). From there, basic outlets and switches. So where did the problem come in…in a nutshell once some walls were opened, we saw behind them and noticed that someone just half-assed it and ran the wrong kind of wires and didn’t use the right kind of fixture boxes. For example, someone jumped from one outlet to another and used a solid green ground coated 14guage wire as the HOT wire and a bare ground wire as the neutral (Black coated wire is typically used as a HOT and white coated wire is typically used as a NEUTRAL). Some other issues are non grounded outlets and missing neutral outlets as well as BX wire (this is the wires that are wrapped in a coiled metal jacket) just tucked into a blue plastic box…basically, something you don’t want your city inspector to see.</p><p>Also, what should be accounted for is the fact that instead of running a new line from the basement to lets say the third floor for whatever reason, sometimes people…aka handyman…may just “tap” into whatever line they see, jump off that and add some new source to a different apartment, whether it be an additional outlet or a new light fixture. The end result is that the person on the third floor is now using electricity that the person on the second floor is so kind enough to pay for. We just had this on our last rehab where unit 1 was jumping off the basement common electric and was stealing an outlet which ran their air conditioning unit for “free”…well free to them, expensive for owner. I know I know, unimaginable, who would do such a thing…don’t be nieve people, know your building and keep tabs on it.</p><p>As for the rest of the rehab, are we on schedule…NOOOOOOOOOOOOOOOPE! That’s right, we had two surprises this week and now we are about 1 week behind. I am going to hit this topic quick as the 2012 NBA draft and the ESPN X Games are over and I have a meeting in a few hours so I need to wrap this up. Bottom line, when you are doing a real rehab, the Scope of Work is very important, as it clearly outlines what work is to be done and what you expect, thus eliminating a lot of confusion between you and the contractors you hired…notice I didn’t say eliminate ALL confusion. If you are not on the job all the time, there will inevitably come a time where the contractor has a question he needs you to make a call on. ANYWAY, as we started on the 2<sup>nd</sup> week, the contractor started to fix a bunch of the walls and then our end buyer we are selling to made an “upgrade” request to run a different type of heating system then what was currently used in the property. We originally had steam radiators and were now switching to baseboard heat (much more effective heat wise). The problem is that the water lines for the baseboard system were not in place and we had to open all these walls and ceilings to run the new lines. So not only did we add work to the plumbers original Scope of Work (well he was happy), but now we paid the contractor to fix walls, that he now has to repair and smooth out again. Unfortunately, there was so much that this is something I could expect him to just do for free as the additional damage had nothing to do with him.</p><p>So what was the solution: Make the buyer pay for it, just that simple. If the buyer wants to change the Scope of Work during mid-project, that’s on him/her and should be his/her responsibility. In the end, if there was ever a time to decide this, it was now. The contractor probably had 2 guys spackling for 2 days, so its not a big deal on his end, just more the fact that there even more wall repair work then there was in the first place. So why did we agree to do this? Simple, because this is a relationship business, our buyer is a repeat buyer and in the end it will be his/her property and it will make him/her happier. How are we effected? Ahhh, we loose about 1 week worth of work and now our holding costs are that much longer, so its not that big of a deal to make a fuss over.</p><p>So heres your take away notes for this week: 1- expect the unexpected, especially with electricity when the power is turned off. Try to look at how things were done, and if it is clear the work was not done correctly, assume you will find problems in other areas. Ask your electrician to guestimate how much you should add in reserves in the worst case scenario…and hope you don’t spend that much in the end. 2- If you are retailing, your Scope of Work is on you, but if you know who your buyer is before you get into your rehab, ask them if they have any special “upgrade” requests and make sure they know they will be responsible to pay for the upgrade. In our case, since this “upgrade” is not in our original Scope and not in our budget, we arranged for the buyer to pay the plumber direct for these services and the buyer is aware that IF he/she can not close for whatever reason that this expense would be non-refundable as he is requesting something that is not necessary, rather preferred.</p><p> </p><p>Okaly Dokaly, that’s it for this week. As always thanks for staying with me as I like to give as much detail as possible so you can really follow the project and possibly pick up a tip or two.</p><p>If you have any questions...feel free to hit me up.</p><p></p><p>Thanks</p><p>Randy</p></div>Rehabbing with Randy -- The Re-Birth of 97 Oraton St 3 Family Rehab -- Week 2https://realestatemixer.ning.com/blog/rehabbing-with-randy-the-re-birth-of-97-oraton-st-3-family-reha-12012-06-20T06:11:32.000Z2012-06-20T06:11:32.000ZRandy Kuhnhttps://realestatemixer.ning.com/Network/RandyKuhn<div><p>For all you guys and gals out there that are into rehabs...I am talking about House People! Houses!...the first week or so is usually one of the busiest and in my opinion the most exciting (or stressful if you didnt plan right and got some nasty surprises)...and thats exactly what this week was - minus the surprises, well at least surprises i couldnt foresee.</p><p>Proper planning and project coordination is key to running any successful rehab project and I have made it so that all my contractors are in communication with not only me, but with each other and that they all play nice :) thus my job becomes that much easier. Now there is a method to communicating effectively with contractors in order to get your way and minimize confusion on the job site, but it takes a little "Je Ne Sais Quoi" (YEP, i am French, my mom was right off the boat and the only class in school i ever failed was 7th grade French, go figure!)...i just call it advanced contractor negotiating, either you take control or they will control you. Set the standard up front and if you use some of my power negotiating tactics, you will always be large and in charge.</p><p>So, here we are, moving forward from The contractor cleaning out the property and ripping down walls--the Roofer removing 3 layers of shingles (thats A LOT) being torn off down to the rafters and eliminating the Yankee Gutters -- the Electrician removing our quality Federal Pacific electric panels (I am be sarcastic, google Federal Pacific if you dont have a clue what i am referring to) and installing a new 200AMP service with new 4 meters -- the Plumber removing EVERYTHING (gas, water, drain and vent lines) and running the new vents and main stack runs. Its just cool to see everything running as i said it would and going smoothly (especially when you have a reputation to protect; as its one thing to say you can do/handle something and another to show and do it).</p><p>Anyway, a lot of prep work goes into this time of the rehab, so even though its a busy time, its a time where an untrained eye will say...hmmm this doesnt look that much different from 3 days ago! Most people just get that WOW factor when the kitchen and baths are close to completion, or the floor get installed or the first coat of paint hits the wall. Let me tell you my friends, behind the wall kinda stuff is just as important and making sure things are lined up in the right places is critical to the final product you "see" and having the right team in place will get you to your end goal with minimal problems.</p><p>I want to quickly point out that prescreening your contractors is the MOST important part of a rehab, even more important than price. I SCRUTINIZE the *#@$ out of anyone who thinks they are worthy enough to work on my jobsite. With that being said, I am assuming 1 of 4 things if you are reading this, 1- you are into rehabbing, 2- want to get started, 3- you stumbled upon this rambling blog by accident or 4- your wife is watching Dancing with the Stars or something like that and if you change the channel...well, I feel ya, i am married too, LOL. Seriously though, this is IMPORTANT!!! I just dont get 3 bids like most people have been "taught" and choose based off of price, kind of truck they drive or how they present themselves to me. This is all BS and anyone can "fake it til you make it" and this doesnt show you what you are really getting. What i do takes more time, but effort in the beginning pays off in the end...so i will leave you today with a quick power lesson:</p><p>1- Conduct either an initial phone interview or a live interview and hit them with your evaluation pre-screening questions</p><p>2- Visit the potential contractor on a LIVE jobsite, un-announced or short notice, and observe what kind of work he is doing, whose working on the job and pay attention to jobsite details. Sit back and just observe, if you dont know what you are looking at, learn fast or pretend for a few minutes!</p><p>2- Get the contractor to schedule a showing of no less than 2 jobs he has recently done that would be similar to the kind of work we are trying to hire him for. Pay attention to details, again as this is what you will get on your jobsite.</p><p>3- Look at the tools on the jobsite and watch how the workers carry themselves and act around you, this will tell you more than what any contractor can pitch you about them and their company.</p><p>4- Last but not least, put yourself in a power position and negotiate the best price.</p><p>I do these four steps to everyone i work with and i highly suggest you do the same as this will save you money, time and will put you on the fastest track to building your rehabbing dream team in no time flat.</p><p></p><p>Happy Investing, and if you have and comments or questions you want to ask, feel free to do so below so that everyone benefits (i have gotten quite a few PM's since last week, but that doesnt help the community)!</p><p></p><p>Hope all is well</p><p>Randy</p><p></p><p></p><p></p><p></p></div>Rehabbing with Randy -- The Re-Birth of 97 Oraton St 3 Family Rehab -- Week 1https://realestatemixer.ning.com/blog/rehabbing-with-randy-the-re-birth-of-97-oraton-st-3-family-rehab2012-06-13T02:30:00.000Z2012-06-13T02:30:00.000ZRandy Kuhnhttps://realestatemixer.ning.com/Network/RandyKuhn<div><p>Over the past few months, many people have been asking me about the rehabs we have been doing, and countless times i have been approached by someone who has asked, "Hey, can i tag along with you for one day to see what you do each day?"(kinda flattering actually). So although i have granted this to some, i cant always do it and cant do it for everyone as my time is VERY scarse and limited. For that reason, I have actually started our first Rehab Mentorship program where I walk everyone through a current project of ours for experience and while in our mentorship, our group WILL take down a LIVE rehab project of our own where EVERYONE WILL make money with us as they learn, GUARANTEED...no BS theory, no books (yet), no tapes (ok...no CD's), but rather Hands-On, Smack You in The Face, Real World, I Am Telling You The Way It Is so Toughen Up, Nothing Will Stand in My Way, The Days of Buying Course After Course Are DONE kinda ACTION. </p><p>With that, I have decided that its time to share, give back and allow anyone who gives a...(HEY! you finished that saying Mr/Mrs Potty-Mouth, not me) an opportunity to follow this rehab as it is happening from start to finish from someone local actually doing it versus someone 1,500 miles away where we really never know whats happening and dont have the opportunity to see progress.</p><p>SO....today is Day 1 of the 97 Oraton Street Rehab located in the North Ward of Newark. This is a detached 3 story, 3 family building and the unit mix is a 3/3/2, and the story starts out like this:</p><p>Once upon a time in a land far far away (Newark is actually only a 35 minute drive from home for me, but if i walked there it would be far far away, so lets roll with that), there was a young boy (me) and his friends (business partners) who embarked on an adventure to become the biggest and baddest (I' kinda big @ 6'1" and we are all actually very nice and approachable) providers of a special magic potion that couldnt be found anywhere in the kingdom (I am talking about sit back and stuff your pockets with CASH FLOWING, guaranteed rents for a year, management and maintenance free, renovated 3 unit and up multi family properties)...OK, A.D.D. is setting in now, so lets just jump into the meat and potatoes.</p><p>As on all of our rehabs, our business philosophy is to be geared towards being Section 8 compliant. This way, our end Investor will know IF they decide they want a Section 8 tenant that they will pass a Section 8 inspection. Section 8 has a much more stringent inspection process then the typical town inspection, thus there are many landlords that do not accept Section 8 applicants because they know improvements that cost money will have to be made in order to comply...we never have that issue as we are providing quality products with higher standards of living.</p><p>What do i mean by that??? There is a difference between what is commonly referred to as a "Slum-Lord" versus a Landlord. A Slum-Lord is generally one who will not make necessary improvements for the well being of a tenant where there may be health or safety hazards, may build a couple rooms in a basement to rent out where there is clear evidence of mold...maybe a toilet but no shower, etc...trust me, we have seen it all. To these "Slum-Lords", a deplorable condition is just a space where they can rent that area to a helpless victim for cheaper than market rent...Its just straight up wrong! A landlord on the other hand, runs a business and understands that there are improvements and expenses that will need to be made over time and that these Tenants are people and deserve to live in quality adequate housing. A real landlord will always set money aside each month from the gross rents in a separate account to pay for any needed future expenses.</p><p>Back to the Rehab as I digress!!! So here we are, all permits are in and work has begun. Basically, we have one of our many rehab crews onsite and the massive property cleanout and alot of the demolition has already happened, all on day 1 (now thats management). Any walls that need to come down have, bathrooms are gutted (everything has been removed down to the studs), and tomorrow the majority of the debris should be removed...i will be sure to post some pics each week.</p><p><span style="text-decoration:underline;"><strong>The (shortened) General Scope of Work on this property includes the following:</strong></span></p><p>Securing the property, Overall property clean out (est 120yds of junk--or for a visual, its about 3 really big dumpster), 3 new bathrooms, 3 new kitchens, refinish/new floors, New roof (we have 3 existing layers = BAD), new gutters, new front steps, 3 new furnaces, 3 new hot water heaters, fix a lot of messed up walls and ceilings, some new windows, new 3 story rear entrance deck, all new plumbing (Main stack, venting, water lines and gas lines), New 200 Amp electrcial service with 4 new meters (we had Federal Pacific Electric Stab Lock breakers and meters in place...F.P.E. = BAD/fire hazard. Google it, this is a 4-5K Uh-Oh if you miss it when estimating repairs), a ton of paint and last but not least an oil tank sweep (an inspection for an underground tank...we didnt have one, WHEW!!)</p><p></p><p>Just so we are clear, although i like to make light of the situation, aside from a "Burn Out" or a "Full Gut Rehab", this is the next most intensive rehab and is not something anyone without a lot of experience or guidance should jump into on their own...we are talking more than paint and carpet here people. The proper coordination, communication and planning between the Plumber, Electrician, Roofer, Mason and Main Contractor will dictate if an operation will run smooth as silk or as rough as 30 Grit sandpaper. There are many ways in which one could lose their shirt on a rehab this size and extreme due diligence must be taken before you buy any property as any miscalculation in the ARV (After Repaired Value) and TRUE cost of the total rehab will make or break you. Knowing what to look for is vital as if you get a contractor to give you a quote and YOU forget to mention a big item (Ex. Replace the Federal Pacific Electric panel), when time comes to fix/replace that item, its on you for not telling the contractor to price that out and now you have OVERAGES (No Joke, I seriously just did the Homer Simpson "DOH!" saying out loud).</p><p>Anywho, Thanks for reading, and i will be sure to keep everyone posted each week with any progress pitfalls and pointers.</p><p></p><p>Happy Investing...</p><p>Rehab Randy</p><p></p><p></p><p></p></div>Where do we stand with our business?https://realestatemixer.ning.com/blog/where-do-we-stand-with-our-business2012-01-03T02:28:56.000Z2012-01-03T02:28:56.000Zalhttps://realestatemixer.ning.com/Network/al<div><p>I’m in this game long enough to have seen more ups and downs than all the rides in Disney World combined.</p><p> </p><p>Over the past forty years, the number of houses built each year in the US floated around 1.5 million a year and went just over 2 million in 2005. Then it hit the fan. For the past three to four years, housing starts hasn’t reached 600,000. This isn’t even half of the forty year average.</p><p> </p><p>We’re not talking sales here, though lack of sales is a result. We’re not talking about remodeled houses. We’re talking about new homes. New homes are one of the largest contributors to a healthy economy. Resales of existing houses are down because people sell when they want a new house. Not another house, a new house.</p><p> </p><p>Builders are slow to build new housing developments due to the existing open market glut, and worse yet, the shadow inventory. Shadow inventory are the homes in limbo between foreclosure and the sheriff’s sale. And, homes that are in default that the banks are reluctant to process for fear of adding to the open inventory and driving prices down further.</p><p> </p><p>I know most people are done with short sales, with the time span and difficult bank managers. Even if you don’t hear about them, foreclosures are still happening, though not as quickly. Banks are slow to process for fear of being charged with fraud. Don’t you think that if they’d been more honest in their dealings with borrowers, they wouldn’t have to be afraid? That’s another missive!</p><p> </p><p>As far as foreclosures: California led the nation last year with 51,800+, next came Florida with 24,000+, then Michigan – 14,000+, Georgia – 11,500+, Illinois – 11,400+, Texas – 9,800+, Nevada – 9,600+, Arizona – 9,000+, Ohio – 8,500+, Colorado – 4,800+. And on and on! And yet, California is still selling high priced homes. Go figure!</p><p> </p><p>In all this mess, there were only two metro areas that I track that showed an increase, albeit small. Detroit prices rose about 2.7% and Washington rose about .3%. Imagine buying in these two areas. One with extreme unemployment and one with extreme over-employment; talk about a dichotomy of the present state of the housing economy.</p><p> </p><p>Here’s the thing. Real estate is still a great business to be in. You can make money, but you have to look at each opportunity carefully. If your numbers work, try to follow through to the transaction. If they don’t work, let the deal go. Do Not try to work the numbers into a deal. If they don’t work, walk away. As you can see from the numbers, there are going to be many opportunities. Don’t overwork the bad ones.</p><p> </p><p>I’ll close this with a list of some of the markets I watch to look for trends in the areas that I want to invest. They’re in alphabetical order, not the order of price decreases.</p><p> </p><p>These are all negative numbers: Atlanta -6.3%; Boston -1.7%; Charlotte -3.4%; Chicago -5.8%; Cleveland -4.8%; Dallas -1.9%; Denver -1.6%; Las Vegas -5.8%; LA -3.5%; Miami -4.6%; Minneapolis -8.5%; NYC -3.4%; Phoenix -7.7%; Portland -7.6%; San Diego -5.5%; San Francisco -5.3%; Seattle -6.1%; Tampa -5.8%.</p><p> </p><p>Yes, I look in many other areas, but these are some of the largest markets in the US with some of the highest foreclosure rates. I was most surprised by San Francisco. This is the first time I’ve followed this city with the prices dropping. This is a really hot market when the economy is going even a little bit. I will have to look at some opportunities out here very soon.</p><p> </p><p>At present, I’m following about ten cities in the mid-west. These are all fairly large, destination or distribution hubs, stable economies, rising prices, low unemployment, good for business tax areas, etc. I’ll have a report ready in about six weeks and let you know then. Have a Happy, Healthy, Safe and Holy New Year!</p></div>Hey, Pay Attention! Are You the 1 in 11 Who will NEVER Sell their Home?https://realestatemixer.ning.com/blog/hey-pay-attention-are-you-the2011-07-17T20:17:50.000Z2011-07-17T20:17:50.000Zalhttps://realestatemixer.ning.com/Network/al<div>Wow, you are sooo lucky!<br /><br />Do you like surprises? Better sit down for this one. Did you know that if you sell your <br />house after 2012 you will pay a 3.8% sales tax on it? <strong>That's $3,800 on a $100,000 home!</strong> <br /><br />This is in addition to all your other closing costs, including your transfer tax, errr, I mean fee.<br /><br />When did this happen? Remember that health care bill Obama said will save 24 million uninsured<br />Americans from the fate of no insurance? <br /><br />The one that really only reaches about 8 million of these people?<br /><br />The one that Pelosi said, "We won't know everything that's in it until it's passed!"? The one that's<br />going to bankrupt America as well as our grandchildren? <br /><br />Well, it's in that same health care bill. Just thought you should know.<br /><br />This Sales Tax will only go into effect in 2013, as part of the new Health Care Bill. Why 2013? <br /><br />OMG, could it be so that it only comes to light AFTER the 2012 elections?<br /><br />So, this is "the change you can believe in"?<br /><br />Under the new health care bill - did you know that <span style="text-decoration:underline;">all</span> real estate transactions will be subject to a <strong>3.8% Sales Tax</strong>? If you sell your $300,000 home, you will be paying an $11,400 tax.<br /><br />And that this is only one of the new taxes? The bulk of these new taxes won't kick in until 2013 and later. <br /><br />This bill is set to really hurt the retiring baby boomer generation who so often downsize their homes and use this money to fund their retirements. <br /><br />Now, doesn't this stuff make your November 2012 vote just a bit more important? You better believe it.<br /><br />Oh, I'm sorry, you weren't aware this was in the Obamacare bill? <br /><br />Guess what, you aren't alone. <br /><br />There are more than a few members of Congress that weren't aware of it either.<br /><br />So much for the promise that every bill passed by this administration would be given <br />ample time to be read and discussed.<br /><br />This rush through the system for passage was done for just these reasons. <br /><br />Wait til we find out what else has been hidden from US. (Read United States Citizens)<br /><br />I beg you to get educated and use the one vote you are presently guaranteed; <br />before you don't have that vote anymore.</div>Institutional Lending getting tougher, Enter the realm of Creative Financing.https://realestatemixer.ning.com/blog/institutional-lending-getting2011-03-16T03:35:53.000Z2011-03-16T03:35:53.000ZWinston Hahnehttps://realestatemixer.ning.com/Network/WinstonHahne<div><p> </p><p>I have been speaking with a lot of my mortgage broker friends and they are all despondent and depressed.Apparently some bank regulations are kicking in on April 1st.From what they're telling me, broker compensation from banks such as Bank of America,Wells Fargo, Chase, Citi ect...will be severly curtailed.This,they(brokers) believe will help with the demise of their industry.Looks like the "Government" sponsored crony banks want the consumer to deal directly with them for everything.I will post better details once I can verify the specific regs. <br /> <br /> Also, FHA mortgage insurance premiums are jumping from .9% of loan per year to 1.4% of loan per year as of April 15,2011. <br /> As an example $200,000 loan FHA, the premiums currently are approx; $1,800/year or $150/month. it will go up to $2,800/year or $233/month . Keep in mind the premiums used to be .5% or $1,000/yr or $84/mo. Rates may be low but everything else is going up(except incomes and the value of our fiat currency) <br /> <br /> Banks are also looking for six months mortgage PITI reserves for each property owned.If you are a brand new landlord,no dice !!!They want to see 2 years tax returns showing your rental property income. <br /> <br /> The above are reasons enough for you to learn creative financing.</p><p>Want to read a real-life example?</p><p> </p><p>Stay tuned,In my next blog I'll show one I did in December. </p><p><br /> </p></div>What Better Time To Sell a Home Than Now? Hmmm!https://realestatemixer.ning.com/blog/what-better-time-to-sell-a2010-12-22T18:03:19.000Z2010-12-22T18:03:19.000Zalhttps://realestatemixer.ning.com/Network/al<div><p>In an old saying, “Time Waits for no Man.” Well let’s convert this to the present real estate market; “Time waits for no man, woman, or holiday.” And it doesn’t wait for a season or a life event. Time just doesn’t wait.</p><p>The market may slow down during the holidays, but people are still transacting business. If you study the most motivated buyers and sellers, they are transacting business if not on a daily or weekly basis, at least a monthly basis. Why, because they have to buy and sell their inventory. This is how they make their money. Furthermore, they might sell a home for a distressed purpose or relocation.</p><p>So if your home is on the market during this season, and you want to sell it, here are some tips. And a reminder that these tips are for now, but will work in any season, holiday, or market.</p><p></p><ul><li><b>Holiday Decorations.</b> If you’re thinking of decorating, it must be extremely detailed or don’t do it. Forget crowding your space with big trees, lots of presents, stockings from the mantle or stair railing, life sized displays, etc. All this will make your home look crowded and small.If you feel you must decorate, think in terms of staging; nothing too personal and not too cluttered. Set your dining room for a holiday dinner, but keep it secular. I don’t care about your religious or ethnic preferences, and your buyers won’t either. They will be looking from their backgrounds. If your decorations are too much toward one particular religion or ethnic display, it will confuse their minds and they won’t be able to visualize themselves here.</li><li><b>Expect frustration and nuisance.</b> Deep breath and count to ten. Ready? Like a boy scout, be prepared. Be realistic. There will be some buyers, serious or not, who, through no fault of their own, track rain, mud, or snow into your home. They may forget to close the door and your house will quickly cool down. All this will come to pass, but you are prepared.Remember, one of these trespassers might be a very motivated buyer looking for exactly what you have. You’re counting on this because you decided to sell this time of year, right? You will avoid the emotional roller coaster, because you will chalk this up as the inconvenience of necessity.Be prepared with a hand-held vacuum, a swifter mop, and some Windex and Pledge. You will find that luck, as well as patience, favor the prepared mind.</li><li><b>Pre-set Your Specific “Not Showing” Dates.</b> Do you feel like showing your home when you’re entertaining guests or opening gifts? If you know dates when you will be busy or entertaining, let your listing agent know. Have them write these in the listing remarks. This will save you a lot of interruptions and inconveniences.With so many houses on the market, buyer’s agents are looking for easy access. If your home is hard to get a date to show, they won’t show it. So be ready at any time except your block out dates and state them clearly right from the beginning.Buyers will understand if they know ahead of time and it will make it easier on everybody, especially you and your family. Just remember, have more “show” dates, than “no show” dates if you’re really serious about getting your house sold.</li><li><b>What is “Sensory” Staging and How do You Keep it Safe.</b> What smells better than apple pie, pumpkin pie, mulled cider, or freshly brewed coffee? Nothing! And nothing says “I’m home” any better or easier.Am I asking you to feed your buyers and their agents? No. Just make your home smell like you are home. Throw together something that smells good and bake it. Then put it away, unless you want to be in the restaurant business while trying to sell your home.Some people just don’t cook, you know who you are, and use candles instead. Just remember that if you are leaving the house when buyers come over or to do some shopping, <u>do not</u> leave the candles burning.Nothing is worse than a dark house on an overcast day. Keep the lights on and make sure the heat is at a comfortable level. If your home is dark and cold, the buyers will think the home isn’t bright enough and the heat doesn’t work.</li><li><b>If it’s not a Necessity, Don’t Do It.</b> This time of year, you will see that the active and qualified buyer’s pool turns out to be significantly smaller. It’s cold. It’s wet. It might be icy. Buyers know that many people take their homes off the market for the holidays. But, there are still buyers out there who are very serious about buying a home. They are qualified and they need a place to live.They also know that if you are still listed, you have to sell. So, expect some very low offers. It’s what they do. They inconvenience you, dirty your home, and then offer so much less than you need.Taking your home off the market, especially at this time of the year, is not that risky. So, if you really don’t have to sell right now, wait until January and then re-list it. You’ll be working with newer sets of buyers with renewed motivation. They won’t be pressured by the holiday hustle and bustle and neither will you.With this said, you have some benefits if you have your home on the market at this time of year. You may have a bigger pool of buyers come next year, but buyers at this time of year fall into only three categories.They are bottom feeders looking to get their low-ball offers accepted because you’re in a distressed situation. They really need a place to live, and they need it quickly. Or for tax purposes, they must close before the end of the year.With this tax consideration a motivation for your buyer, you can treat it as your own, turn the tables, distressed situation. You might be able to profit from their urgency instead of them from yours.</li></ul><p></p><p>So, decide what you need and what you must do, be prepared, be patient, calm down and sell your home. Or take it off the market until the New Year. It’s your choice, but hopefully you’ll now have a better understanding of how to proceed.</p></div>It is now a Federal Law to be Certified for Lead Paint Removalhttps://realestatemixer.ning.com/blog/it-is-now-a-federal-law-to-be2010-12-17T17:49:31.000Z2010-12-17T17:49:31.000Zalhttps://realestatemixer.ning.com/Network/al<div><p> I wrote about this before, but I wanted to remind everyone of the importance of this law. April 22, this year, was the effective date. Yes, there were some extensions due to lack of available certification classes, but all that is past us and we are all subject, right now, to this law and the stiff penalties associated with it.</p><p> One of my reasons for this reiteration is that I recently looked at a property where a homeowner was rehabbing his house one room at a time. Much of the work had been completed, but I entered a room where the peeling paint told me immediately that it was lead based. What do I mean? Lead based paint has a tendency to peel in large pieces. It pulls down almost like wallpaper, coming off in small sheets.</p><p> I warned the homeowner about the effects of lead dust and what he should be doing to protect himself and his family, but he seemed nonplussed. I was actually concerned for myself too, since the work he had already completed was not cleaned in accordance with the present law. This is an unsafe home.</p><p> On April 22, an EPA law named the “Renovation, Repair, and Painting Rule” went into effect. <u>Any</u> contractor disturbing just <b>6 square feet</b> of lead paint in any interior room, or <b>20 square feet</b> outside while working on a pre 1978 residence, school, or daycare center is required to be <b>Lead-Safe Certified.</b></p><p> If you do this work and you’re not certified, it <u>will</u> result lawsuits and penalties. These penalties include a $37,500 fine for each violation, and/or up to 5 years in prison with a <b>felony</b> conviction.</p><p> The rules get even tougher if the housing you’re working on is HUD or Section 8 related. In these, <u>any contractor</u> who disturbs <b>2 square feet</b> of an interior room, <b>20 square feet</b> of the exterior, or <b>10%</b> of a component surface during work on a pre-1978 residence, <u>must have</u> <b>everyone on the jobsite</b> RRP certified.</p><p> These rules don’t just affect the construction industry and individual trades, they also apply to <u>apartment owners</u>, <u>condominiums</u>, <u>property management companies</u>, <u>all maintenance staff at daycare centers and schools</u>, and <u>Realtors</u>.</p><p> However crazy this may sound, these rules do not concern “zero” bedroom units such as: studio apartments, hotels/motels, hospitals, dorms, elderly and disability complexes.</p><p> As the year progresses, the EPA will be <b>more forceful</b> about the penalties. The EPA has already fined companies for non-compliance of these new rules. What you must know above all else is:<br /></p><ol><li>Even a small amount of dust from renovations, repairs or painting can contaminate an entire home. If inhaled or swallowed, this dust can cause irreversible damage to children and adults.</li><li>Anyone who, for compensation, proposes to perform any renovation or repair in any pre-1978 house or child-occupied facility must now be an EPA Certified Renovator. Even an owner-occupant who plans to hire someone to help him do even small repair jobs must comply with the rule. The threshold for triggering these requirements is "disturbing more than six square feet" of any painted surface. If the residence receives federal assistance, stricter rules apply, as mentioned above.</li><li>Failure to obtain certification or to employ mandated "lead-safe" practices in target housing can lead to civil penalties of up to $37,500 per violation and up to five years in prison. Willful violations are subject to a doubling of the fines and penalties.</li></ol><p></p><p> Many contractors think, “I won’t get caught,” or “I’ll just go into bankruptcy if caught.” What you must remember is that these are “civil” penalties and “felony” convictions that <u>will</u> survive bankruptcy court and the closing of a business. This means that they attach to you personally!</p><p> Although these rules don’t apply to every job, you are responsible for knowing which ones they do pertain to. If the rules apply, the contractor must be “Lead Safe Certified” to proceed with the work. This means successful completion of the 8 hour EPA course, “Lead Safety for Renovation, Repair, and Painting” from an accredited EPA training provider. 6 hours is class training and 2 hours is hands on training and demonstration. Part of this training will show you how to educate your client on what they have to do or not do, testing of the site to check if it applies to the rules, dust control, required and prohibited tools, record keeping, and cleaning of the site before occupancy.</p><p> Are there any additional costs associated with this? Absolutely. Depending upon the size of the area being worked on, and whether it’s inside or outside, the costs will run between $100 and $500, not counting permits or the testing equipment.</p><p> Always check with the building department before starting your project. It’s better to be safe than sorry. <b>Good Luck!</b></p><p> </p></div>