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Saturday, December 21, 2013

How To Find The Right Painter!

A Real Estate Investor can quickly add value by painting the exterior of a distressed property. If you are like us, hate painting (long story), we hire someone.

While painting to add value to the distressed property, dealing with contractors are going to be one of your biggest headaches. Last year over 3,000 complaints and lawsuits were filed against painting companies in South Florida. Remember, you get what you pay for!

Below are questions you need to ask to protect yourself and guarantee the paint job is without unpleasant surprises!

Here we go:

  • INSURANCE
    • Do they have an insurance policy with an insurance company or are they "self-insured"?
      • Very few moving companies carry genuine insurance. All other painting companies are "self-insured" even though their advertisement might say that they are "insured for your protection".
      • Estimate should include FREE full-coverage insurance - up to $10,000.
  • BONDING
    • Are they bonded? If they are, it should be on their "Certificate of Insurance". Most companies are not bonded. Don't accept any excuses why they are not. You won't be protected.
  • BUSINESS STANDING
    • Is the company a member of the Better Business Bureau?
      • If so, call and request a report of their standing.
    • Will they provided you with 3 current references upon request?
  • PRICE
    • Ask for two comparison quotes.
      • Get one quote based on your entire job.
      • Get a second quote based on a calculated "real-time" hourly rate.
    • This way we are assured to always get the better price!
  • Do they subcontract their work or perform it themselves?
    • We hired a paint contractor and he subcontracted the job. Job was finished and we paid the contractor. Found out later the contractor never paid the subcontractor. Be careful because you may be liable to the subcontractor.
  • Do they offer written guarantees of their work?
  • What products do they use?
    • Type of paint and sheen, stains,...
    • Are they environmentally friendly?
    • Types of brushes and rollers.
  • Are they specific by providing in writing the job specifics? Like:
    • About which surfaces you want to have painted (walls, trims, moldings, ceilings, etc.)
    • The paint colors and finishes you want used.
  • Do they provide a written contract?
    • Review it carefully.
  • Dis and re-connect of items as a result of painting?
  • Provide references upon request?
    • At least three.
Painting can be a tedious task and as a homeowners and investors ourselves, we understand the concerns and worries that come with it.

Related Links, Blog Postings, Presentations or Articles:

Written by +Bob Burns.
 
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Thursday, September 26, 2013

Wait List Opening for Housing Authority of the City of Fort Lauderdale #HACFL

Section 8 #HACFL Opens their Wait List.

The #HACFL is opening their Section 8 or Plan Ocho waiting list as it plans to have a lottery to add 1,000 names to its backlog for the rental-assistance vouchers, which are paid for by HUD.

The application forms are only available via Sunday's Sun Sentinel and Thursday's Westside Gazette and Saturday's El Sentinel. The form copy is available at SunSentinel.com/Section8. The form has to be mailed in. NO EXCEPTIONS.

 

Written by +Bob Burns.
 
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Sunday, August 18, 2013

How to Reduce your Florida Property Taxes

Living in Florida and not sure what to do about your property taxes? Trying to maximize your investment by reducing your annual property tax expenditure?

Great news! Every year in August county appraisers evaluate the assessment for real and tangible property and give taxpayers the opportunity to reduce their taxes by filing an appeal.

Ryan Banner Logo

Real property vs. Tangible Personal Property

Real property consists of land and any improvements to the land such as buildings. Additionally, any components attached to the land improvements become part of the structure and therefore considered real property. Property appraisers are required to establish the real property tax base for their county annually. In doing so, they use mass appraisal techniques approved by the Florida Department of revenue to determine the just or market value for each parcel as of January 1. Exemptions, classifications, and assessment limitations are then applied to determine the taxable value.

Tangible personal property consists of everything that is in a specific location but not affixed to the land improvement. Things such as furniture, machinery, and fixtures are considered tangible personal property. Inventory and household goods are exempt under Florida statutes.

Every Florida business that owns any tangible personal property as of January 1 must file a return with each county’s property appraiser by April 1. Tax payers have the ability to issue their opinion of value for their personal property by listing it on the property tax rendition. Appraisers will then evaluate the items of personal property and issue an assessment based on Florida guidelines. An automatic $25,000 exemption is applied to every personal property folio.

Truth in Millage(TRIM) Notices

Every year in July and August the Department of Revenue reviews the property tax rolls of each county. This ensures that the tax base established by the property appraiser is equitable, uniform, and in compliance with Florida law. The Department also reviews and approves each property appraiser’s annual budget.

After the review is completed and approved by the Department of Revenue, TRIM notices are issued and mailed out to taxpayers. This notice contains the property’s value as of January 1, the proposed millage rates by each local government, and an estimate of the amount of property taxes owed based on the millage rates. Additionally, the TRIM notice lists the date, time, and location of each local government’s budget hearing so property owners have an opportunity to attend and comment on the millage rates before final approval. After the notice is received, taxpayers have 25 days from the date of the notice to petition the value of their property to the county’s Value Adjustment Board.

Appeal Process
If a taxpayer disagrees with the proposed value listed on the TRIM notice, the taxpayer has the opportunity to file a petition with the county’s Value Adjustment Board (VAB).

The VAB consists of five-members which hear and rules on challenges to a property’s assessments, classifications, or exemptions. The value adjustment board is independent from the property appraiser and tax collector and acts as a neutral party to protect the taxpayer’s rights.

In order to challenge a value or exemption, the taxpayer must file Form DR-486 within 25 days of receipt of the TRIM notice. Additionally at least 75% of the outstanding taxes for the year must be paid in order to get the petition considered for hearing. There is a $15 fee for each parcel petitioned except for contiguous property.

Once the petition is processed by the VAB a hearing date is scheduled. Taxpayers must submit all their evidence for the challenge in value to the property appraiser at least 15 days prior to the hearing date. The property appraiser’s office must then submit their evidence within 7 days of the scheduled hearing. Taxpayers and property appraisers have the ability to reject evidence if proper procedure is not followed by either party.

After the evidence is presented, the Special Magistrate appointed by the VAB makes a determination to fully or partially grant the petition or to deny the petition. If the taxpayer or property appraiser disagrees with the magistrate’s decision, they will have an opportunity to take the decision to circuit court.

Reasons to appeal:

  • Opportunity to access the property appraiser’s valuation method.
    • By filing a petition and promptly submitting evidence to the property appraiser office, the county’s appraisal office is required to provide detail information on how they arrived to the value.
    • Taxpayers have the opportunity to discuss with the property appraiser and informally discuss the valuation method prior to presenting to the VAB.
    • Most of the time appraiser’s and taxpayers reach a settlement on the value of the property prior to hearing.
  • 10% Cap for future years.
    • Once a property is reduced, by law, the assessment cannot be in excess of 10% for future years, therefore successfully appealing a petition will stabilize the tax expense for future years.
  • Low cost.
    • Only $15 per parcel to process petitions.
  • No Risk.
    • Unlike other states, once property values are set by the appraiser’s they cannot go up, they can simply go down or if a petition is denied, stay the same.
    • Reductions normally range between 10 -15% of the value assessed.
    • Most tax consultants will absorb all costs associated with the appeal and only charge once reductions are received by the taxpayers.

If you are a taxpayer in Florida, be on the lookout for your TRIM notice during the month of August and secure your opportunity to save from 10-15% in your annual property tax expenditure by filing a petition with the county’s Value Adjustment Board by early September.

For more information feel free to contact me at 305-775-2617.

Written by Mirel Garcia
Senior Property Tax Consultant
Ryan LLC

Posted by Bob Burns.
 
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Monday, August 5, 2013

"For Rent" Channels for Landlord's Tenant Funnel

Landlords "For Rent" or "For Sale" Posting Options

One of my mentoring students the other day asked me: "Where can I post 'For Rent' or 'For Sale' on the internet?" He was familiar with the conventional ways but wanted to know what I would recommend concerning the internet.

Section 8 For Rent Sign
We have been preaching to our students to create as many channels as possible to produce the desired outcome. In this case, what channel(s) could Landlords use to produce the most qualified tenants for their investment properties.

We gave it some thought and came up with three channels:

  • The Retail Classified Market.
  • Low Income and Distressed Families.
  • Video

We came up with three lists for each channel:

Retail Cla$$ified Market
eBay Classifieds New York Times Classifieds
Backpage.com Real Estate Advisor
Facebook oodle.com
Zillow Vast
Trulia Google Real Estate Tools
Yahoo! Real Estate craigslist
Condo.com Streetseed Ltd.
HotPads Enormo
ByOwnerMLS Local.com
4RealEstateClassifieds.com Trovit
ByOwner Rent.com
OLX GeeBo
American Listed The Housing Block
Mitula Locanto
HouseHitz Gumtree
USFreeads Adpost
Classifieds For Free WebClassifieds.US
TheFreeAdForum.com Yakaz
PennySaver recycler.com
Claz.org Sell.com, Inc
Postlets ListedBy, Inc.
Low Income or Distre$$ed Families
GoSection8 Social Serve
Florida Housing Search.org
Video
YouTube Traffic Geyser
TubeMogul Dailymotion
Veoh Metacafe

As a Landlord, you want to rent your property as quick as possible. These tools will establish a very large internet footprint for selling or renting the Landlord's assets. It is a lot of work but can be very powerful for establishing cash flows.

Have you had any success with an internet service concerning an investment property? If so, we would love to hear about it by posting your success story in the comments section below this post.

Related Links, Blogs, Presentations or Articles:

  • List Your Section Eight Properties HERE.
  • Hands-On Real Estate Investing Course
  • Hash Tags: #SEC8 #landlord #REIP
  • Real Estate Investing Tip: Make sure when you are about to sign any real estate contract for a property: Florida FAR BAR, short sale option contract, purchase contract etc...that all parties are there for signature. If the significant other is not present you may have problems later on. By Florida law if the couple is divorced, unless the property has been settled previously (request documentation as proof), both husband and wife are entitled to the property therefore you need both signatures. Your first Question for any deal is "Are You or Have Been married?"

Written by +Bob Burns.
 
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Serious...You Better Go!
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Friday, July 12, 2013

Obtaining Funding for Real Estate Investing

Unsecured Capital

Finding the funds you need to take advantage of the real estate market can be difficult, if not impossible for most people. If you are successful with finding an investor who is willing to fund you with hard or private money, a significant amount of collateral will be required before you can even get started.

Aurelian Commercial Lending has developed a unique funding program to help fund your real estate investment projects. Mr. John Syron has designed this program to provide working capital for both start up companies and seasoned businesses.

Office Building of Aurelian Capital Grand Blanc Office
Aurelian Grand Blanc Office

Aurelian is well aware of the challenges small businesses face with both starting the business and maintaining profitability. Aurelian Commercial Lending's founder and CEO, Mr. Syron has ensured that Aurelian has the resources to fund and have access to over $500 million in capital and capital commitments specifically for small businesses.

Logo of Aurelian Capital Management
Aurelian Capital Management

In addition to his desire to help small businesses, Mr. Syron founded Aurelian with the purpose of funding his charity for autistic children. Everyone associated with Aurelian shares this commitment and donates their time and effort to support the foundation.

Since 1980, Mr. Syron has been building bridges that connect the often-disparate worlds of engineering and manufacturing to commercial financing. Mr. Syron is a graduate Chemical Engineer from Michigan State University. After serving as Vice President of a well-known engineering company for ten years, he founded his own company in 1990, Vector Environmental Group Inc. Vector was a large-scale engineering and manufacturing company with a focus on the environment. The aim was to develop new products and processes that could reduce energy consumption and minimize waste in automobile and steel production.

In addition to running his own business, Mr. Syron contributed significantly in the product development, international and domestic market expansion, capital acquisition and commercial financing of numerous Fortune 500 companies.

Our program allows clients the ability to:

  • Purchase real estate.
  • Pay any sort of fees related to starting a business, there are no restrictions on the money.
  • Have working capital to start or expand the business (purchase property, equipment, supplies, marketing and other essentials).
  • Pay employees.
  • Have a line of credit that can be used to help handle cash flow.

Our programs can typically provide start up businesses and small business with $50,000 - $150,000 in unsecured capital (up to $200,000 is possible -potentially more) and/or lines of credit, which can be used as the client determines. This is per person, so multiple people can apply to obtain larger levels of funding for your company.

For Start up businesses our only requirement is a strong personal credit profile:

  • FICO score of 720 or above.
  • No bankruptcies.
  • No foreclosures or charge-offs.
  • No late payments for the past 2 years.
  • Not over utilized on credit card debt (must be paid down to 20 - 30%).
  • 8 - 10 year history.

We don't require collateral, a detailed business plan, strong business experience, asset strength, tax returns, profit and loss statements etc. to obtain capital. Our only requirement is a strong credit profile or a co-signer who meets the criteria. To determine whether you or your company can qualify for one of our funding programs please complete the brief pre-qualification questionnaire on our website. You will receive a call from a Business Development Officer with your no obligation funding estimate in 24-48. If you have questions that are not answered in the FAQ section or would like to speak to a Business Development Officer, feel free to call us at 800.598.1140, email us at info@aurelianlending.com.

Additional Information:

Written By:
John Syron, CEO of Aurelian Capital Management
John Syron

CEO
Aurelian Capital Management
www.aurelianlending.com
8275 Holly Road Suite 2
Grand Blanc, Michigan 48439
800.598.1140

Posted by +Bob Burns

Related Links, Blog Postings, Presentations or Articles:

  • Funding Companies
  • Acquire Real Estate Funding
  • Hash Tags: #funding
  • Hash Tags: #hardmoney
  • Real Estate Investing Tip: Make sure when a potential client places a deposit for a rental property, you make them sign a document that explains the rules of the deposit, refund or non-refund terms, what it represents, disclosures, etc. Several times I received calls from potential clients wanting their deposits back after you, the landlord, already took your property off the market. Protect Yourself.

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Friday, June 28, 2013

Insurance for Real Estate Investors

Distressed Property Insurance

As our group started out as specialists in distressed properties, one of the problems we came across was insurance coverage for asset and worker protection. We thought if the Bank won't insure it, no one else will. But let’s look at it from the Lenders point of view.

167 Street Living Room Unit 2 Rehab Duplex
Why would you Insure this Property?

Investors always preach, leverage someone else's money not yours. That's true but Lenders are taking a risk. What happens if an injury occurred on the property or the asset burns down? The Lender is either stuck with court costs, fines, hospital bills or his money is gone due to the lack of insurance. So FYI...Lenders are going to make you insure the property. We rather get our own policy than make forced payments to the Lender's insurance policy.

Depending on your exit strategy, you will eventually need some type of insurance.

Front View 1184 Rehab Duplex
Would You Insure This Property?

Below is an outline of some of the coverage’s we implemented while bringing properties back online:

Types of Insurance Coverage or Services

  • Builders Risk Renovation Policy - Provides coverage that protects a person's or company's interest in materials, supplies and equipment used in the rehab or construction of an asset should these items become lost or damaged.
  • Liability Insurance - It protects the property owner in the event he or she is sued for claims that come within property boundaries. The policy is designed to offer protection against third-party insurance claims, like contracted workers or tenants.
  • Windstorm - Most policies issued today DO NOT cover damage from high winds. It is very difficult to get a windstorm rider due to the size of the deducible, ranges from 10K to 15K.
  • Flood - Damaged caused by rising water. Broken pipe or hoses causes damage to interior of unit or building. Flooding caused by storm surge.
  • Fire, Theft and Vandalism - During rehab you can expect one of these three items to occur. Are you protected from these likely events?
  • Insurance Loss Consultants - Provides Claims Representation to Policyholders. If you experience an event that financial hardship will occur, the insurance company is going to use every resource available to limit the payout amount and the policyholder is expecting the repairs to be done with no out-of-pocket expense, including the deductible. Insurance Loss Consultants make sure that the investor receives the largest benefit to which they are entitled under the insurance policy.
  • 4 Point Inspection is required if an investment property that your company or contractor is restoring is older than 30 years or being refinanced. Insurance companies will want to check the following four systems before issuing a Homeowners policy:
    • Roof
    • HVAC - Heat, Ventilation and Air Conditioning
    • Electrical
    • Plumbing
  • Our Contacts - These are companies that specialize in issuing policies that are going to protect you against the hazards of being a real estate investor.

In the beginning of the rehab depending on your exit strategy, insurance might not be needed but you will eventually. Remember, any property has value even if you can't see it. Are you prepared to lose that value if you don't insure it?

Related Links, Blog Postings, Presentations or Articles:

Written by Bob Burns.
 
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+Real Estate Investor
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Telephone #: 305-586-5280
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Monday, June 10, 2013

Cleaning & Securing an Investment Property Adds Value


As soon as we close on an Investment Property, we want to implement our Exit Strategy. The faster you get this distressed investment property back on-line the less money you are losing due to holding costs and the quicker the asset will cash flow. Every step we implement adds value to the property.

The first part of bringing the property back on-line is to Clean and Secure the property. This adds the most value to the property with minimum overhead. Below is an outline that describes the basic process of cleaning and securing a real estate investment property. By the way, most of these steps you can do it yourself.

Clean and Secure Process

  • Removal of debris from Interior & Exterior of House - If the investment property has been abandoned or on the market for a while, chances are there has been a buildup of debris and the property was broken into and trashed. The property becomes an eyesore and the city is just waiting to pounce on the new owner.
    • Dumpster container picture from Ocala property.
      Dumpster for Debris
    • Order a Dumpster - Depending on the amount of debris, you may have to order a dumpster. Delivery and removal are handled by the Dumpster Company. You just pile in the debris.
      • Can be very expensive.
      • Neighbors will help themselves by using your dumpster to pile in their debris.
      • Permit Fee is built into the price. The City keeps track.
        • Suddenly, city inspectors will begin to show up to see what you are up to and do you have the proper permits.
      • Neighbors can see the dumpster on the premises. They will report you to the City.
    • Finish cleaning and get rid of the dumpster as soon as possible. Less attention.
  • Recycle Materials - Every house contains items that you can recycle and receive money for these items. We are serious! You can start pulling cash out of the property right away.
    • eBay - You can place in eBay's Classifieds an ad selling items you found inside the property. It Works!
    • Metals - based on cost per pound.
      • Non-Ferrous - You know the metal that doesn't let a magnet stick to it.
        • Copper, Brass, Aluminum, Lead, Tin, Nickel, Gold, Silver
        • A/C Coils, Radiators, Batteries, Pots, Stainless Steel, Motors, Transmissions, Bathroom Fixtures, Electrical Wire.
      • Scrap - Less money. Pull wiring and motors off of appliances and recycle them separately.
        • Iron, Steel, Sheet Metal, Rebar
        • Old Appliances, Water Heaters, Non-Copper Pipes
        • Dryer & Stove Electrical Wiring
          • Three prong cords - Found on ranges and dryers.
  • Make sure all access points are secure
    • Doors with locks
      • Locksmith - You made need one if you are not handy with installation
    • Windows are covered with wood, rejas (metal bars) or original window.
      • If glass is cracked or missing must board whole window.
      • Board on window must be painted & uniform with other boarded windows.
      • If there are iron bars on the bedroom windows, they must have breakaways. Minimum size 20 x 41 inches.
      • If all windows are boarded, air holes must be drilled into plywood to provide ventilation.
      • Independent Securing Service - If you don't want to board up your property by yourself.
    • Secure your Outside Water Access - People will steal your water, especially if your neighbors have well water and you are connected to the City Water System.
  • Landscaping

By cleaning and securing the property you are adding value to your property right away, preventing break-ins, getting the city off your back and who knows, sell it as is to another investor for a nice profit!

Written by

Related Links, Blog Postings, Presentations or Articles:

Written by +Bob Burns.
 
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Bob Burns at MREIAs speaker podium.Clean and Secure!
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+Real Estate Investor
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Telephone #: 305-586-5280
email: sec8@planocho.com

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Sunday, June 2, 2013

Do Your Due Diligence before Purchasing

You think you found the property you are going to make some money on but once you close on a property, responsibility for this asset becomes all yours, good and bad. In order to be a successful real estate investor you need to make sure you don't make any mistakes. If you do, it will be small one and easily forgotten when you cash your first check.

Below is a list of items you should be checking before you make an offer.

Due Diligence on Your First Deal

Duplex Kitchen before rehab in Wynwood Miami
Wynwood Duplex Kitchen before Rehab
  • Inspection
    • Upon Entering the property look for visual clues that indicate the current condition of the house.
    • Look for things that should be there but are not.
      • A bedroom without a closest. HUD would not consider this a bedroom.
    • Look for things that are there but shouldn't be.
      • A window inside the house that isn't an exterior window. Could be a porch that was closed in years ago.
    • Looks for points of failure
      • Connections: bathroom fixtures, underneath sinks....
      • Intersections: roof, ceilings and walls, walls and windows, floors and walls, water stains...
      • Windows and Doors: water leaks, holes, broken or cracked pains of glass, widows and doors open and close properly...
    • Black Mold - Indication of moisture buildup.
    • Termites - Big problems for us in Florida and Puerto Rico.
    • Asbestos - Probably present in older homes. Need to check for this.
    • Environmental Hazards - Underground oil tanks for heating, septic systems. Check the property history.
  • Comparables or Appraisal - Before purchasing the property see if you can get your hands on:
    • Recent property appraisal less than 90 days old. Ask the seller if he/she has a copy. Dania Beach Duplex rehab, number 36
      Dania Beach Duplex Rehab
    • Try to determine the After Repair Value ARV by getting three property comparables within a 1 mile radius and less than 90 days old.
    • Use the Maximum Allowable Offer MAO Calculation to help determine your purchase price.
  • Title Search - Make sure you use a Title Company that understands how investors think and work. Every Real Estate Investment Club can recommend one. You assume Tile companies know what they are doing but I have gotten burned many times due to Title Company mistakes. Make sure they check for:
    • Open Permits - This has caused us more problems when we go to SELL an asset in our portfolio. It is usually the BUYERS Title company that finds the mistake and causes delays with the closing. MAKE sure they check for Open Permits!
    • Liens and Violations - Make sure they check for pet violations (Pit Bull), water, city and county liens. Check:
      • The City where the property is located: City of Miami, etc.
      • The County: Dade, Broward, etc.
  • Taxes - Check to see if back taxes are owed. Usually the Seller pays the back taxes but it is good to know while you are negotiating terms and price before you make an offer.
    • Most tax records will indicate if the structure is legal or not.
      • If you see on the tax rolls the structure is listed as a 2 bedrooms and 1 bathroom and on the MLS it is listed as a 3 bedrooms and 2 bathrooms there maybe a problem with the investment property as being legal or not.
  • History - Most counties will have a history of the property since it was built. It will contain information about the property that can be used to determine what has been done legally with permits, liens, violations, former owners, etc.
  • Zoning - You must know the current zoning for the individual parcel of land and its existing structure. You need to know what is the permitted use and current usage. Knowing this information can help you with your rehabbing plans and exit strategy.
  • Survey - You may want to order a survey before purchasing to see if the investment property has any encroachment issues.

These are some of the items we look at before making any decision to BUY. As you gain experience a lot of these items will become second nature and you will be able to apply this knowledge to tweak your success as a real estate investor.

Do you have any tactics you apply before you purchase a property? We would love to hear from you. Write your comments in the comment field below.

Related Links, Tips, Blog Postings, Presentations or Articles:

Written by +Bob Burns.
 
####
 
Bob Burns at Bahama Beach Club Ft. MyersBringing It to the Beach Baby!
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+Real Estate Investor
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Telephone #: 305-586-5280
email: sec8@planocho.com

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