property (58)

I am a realtor and a Santa Cruz rental property investor since 2000. There are many reasons to invest in Santa Cruz rental properties, some of which I have discussed in this article. Today I want to talk about what the pros and cons are in renting to UCSC students. 


Here are the pros that I have experienced.

1. Vacancies are virtually non existent: There are almost $18,000 UCSC students and in any given year there is only room to house about 8,000 of them on campus. There are always many thousands of students looking for a place to rent, so the potential pool leaves no vacancies in your Santa Cruz investment rental properties.


2. Students pay more money:  They frequently will pay more per bedroom and sleep 2-3 in a room just to have a place to stay. Here is a link to what students expect to pay from the UCSC community housing page.


3. The rent money is very secure: The students get financial aid and/or are supported by their parents. In 17 years and 4 rental properties as a Santa Cruz rental home investor I have only had a problem getting paid once.


4. UCSC makes the rental process very easy for a Santa Cruz rental investor: They give workshops to the students on what they need to do to look attractive to a Santa Cruz rental investor. They come to you with complete rental applications, credit reports, references, and certificates saying they understand what it takes to be a good renter. The university posts your rental for free so you have a large pool of possible renters.


5. Students replicate themselves making the rental process even easier: My experience has been when one student moves out they have another take their place making the process seamless for the Santa Cruz rental investor.


6. Santa Cruz students are often long term renter: If you get the students early, in their sophomore or junior year they often stay for 3-4 years or more. making the cost of turnover very low.


7. Santa Cruz students can vacate in the summer if you want a summer beach home that is rented for 9 or 10 months: If you are a Santa Cruz rental property investor who wants a place in the summer for yourself you can rent to students during the school year and keep it for yourself in the summers. Many students go home in the summers, and the ones who don't can always find a sublet from another student who is going home. It is a way to have a vacation home that more than pays for itself.


Cons of renting to UCSC students:


1. Insurance on the house can be tricky: Recently many insurance companies, including the one I have always used, State Farm have decided they do not want to insure homes that are filled to the brim with students in college towns. They see them as Frat houses and won't write new policies. You can get commercial insurance, which is more expensive than residential or find the rare insurer who will do it. I found that CIG insurance out of Monterrey was willing to write a residential policy at competitive prices.


2. Large homes can be a hot bed of petty emotional issues for the Santa Cruz rental property investor.: If you are the owner of a large home with 6-10 students they may turn to you when there is a spat between the tenants. It is a time and emotional drain. I put one person in charge and have that person deal with issues like who is going to clean the house, noise complaints, bullying, etc. They have the final say. It works pretty well.


3. Students are often unaware of what it takes to take care of a house: Students do not always understand what it takes to care of a home and things can be damaged by mistake, even without large parties or Frat behavior. The way to ameliorate this is to buy a house that does not have delicate finishes and educate the students on basic home maintenance. My tenants know they need to call me right away if something is wrong and not let a small problem get out of hand. I would rather be over called than under called, and they know it.

So as a long time owner of Santa Cruz rental property I can enthusiastically say that renting to Santa Cruz students is a good thing from an investor perspective and not something to be afraid of.


If you have any questions about becoming a Santa Cruz rental property investor please feel free to contact me.

Marcy Moyer

eXp Realty of California


Specializing in Probate, Trust, and Investment Properties

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Wisconsin Quitclaim Deeds

Wisconsin Quitclaim DeedA quitclaim deed allows property owners to transfer whatever interest they may have in a specific piece of real estate. The Wisconsin statutes do not contain a specific form for deeds, but they do define what the different conveyances mean, and the minimum information necessary in each (Wisc. Stat. 706.02, 706.10(4)). To be eligible for recording, a deed also must meet all the local rules for content and format as well as the statutory requirements set forth in Wisc. Stat. 706.05.

As opposed to a warranty deed, a quitclaim deed offers no guarantees that the owner has good title or even ownership at all; it simply conveys whatever interest exists at the time of the deed’s signing. Once buyers accept it, they are left with little to no recourse against the former owner. This lack of protection makes a quitclaim deed unsuitable for purchasing real estate from an unknown party.

Yet, a quitclaim deed is fully sufficient to convey property in other circumstances. Consider the following scenarios:

  • Familial transfers: Quitclaim deeds are often used to transfer property within families, for example, between parents and children, siblings and other closely related family members.
  • Adding or removing a spouse: Whether resulting from marriage or divorce, a real estate owner can use a quitclaim deed to add a spouse to the title or to remove him or her.
  • Transferring real estate to an LLC or corporation: Since corporate transfers often happen between closely related entities, they are usually done with this deed.
  • Transferring real estate to a trust: Estate planning for subsequent generations often involves an initial transfer from a family member into a trust.
  • Clearing the title for insurance purposes: In the process of researching the chain of title, title companies may find a "cloud" on it. Generally this means that someone who is not identified in the ownership history may have an interest in the property. This can be amended if the person in question executes a quitclaim deed.
  • Removal of a potential interest holder: Prior to funding a loan, lenders may require someone who is not going to be on the loan, such as a spouse, to record a quitclaim deed, thus formally foregoing any future interest in the property.

Many of the above transfers are exempt from Wisconsin’s real estate transfer tax pursuant to Wisc. Stat. 77.25 as long as only nominal or no consideration is paid in exchange. Even if the transfer or removal of an interest falls under one of these exemptions, the transfer tax return form should be submitted in order to identify and document the exemption.

Further information about quitclaim and other real estate deeds is available at

This article information was provided by This is not legal advice and you are encouraged to consult legal counsel with any questions.
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Simple Ways to Get Your Home Ready to Sell

photo credit: Neil Kremer via photopin cc
photo credit: Neil Kremer via photopin cc

For those homeowners that have waited to sell their home, heed the advice of Nike: “Just Do It.”  Interest rates are still really low and the upcoming changes in mortgage lending may disqualify some buyers.  Now is the time to sell your home.  In order to help your home sell quickly follow the timely advice offered below.

Spend a Little Now to Get More Later

With so many homes available many buyers are seeking out a property that is move-in ready.  This means that small repairs and maintenance items will possibly turn off some buyers.  Take a walk through the home and pick out the small things that need to be fixed.  Leaking faucets, a chipped tile, a flaky bit of paint and other similar items can negatively impact the appearance of your home.

You should also consider spending a little money to get the carpets thoroughly cleaned and ask a local heating/air conditioning company to service your unit.

Put Yourself in the Shoes of the Buyer

If you are looking for a new home, what items are important to you?  The majority of people want to live in a clean home that smells nice with lots of room in the closets, cabinets and other storage areas.  Therefore, you should put a lot of time in to making your home look clean, neat and organized. Start with the cabinets and closets.  Remove as much clutter as possible and even add some shelves if it helps improve the look.  Go through all the rooms and put everything away in a nice, orderly fashion.  Finally, get a few aroma dispensers and put them throughout the house.

Make People Interested in Coming Inside

So many homeowners spend time, money and a lot of effort improving the inside of the home that they ignore the outside appearance.  It is important to have an inviting appearance.  Homeowners should trim all the bushes, clean out the gutters, make sure the driveway and walkway are clear and clean the windows.  For people that have siding, consider power washing the siding as well.  It is really important that the front door and the surrounding entrance area look clean and homey.

Two Important Rooms: Bathrooms and Kitchens

The bathroom and kitchen will usually have more influence over selling a home than any other part of the house.  It is a good idea to go through these rooms and spend extra time, and even money, to make sure they look attractive and modern.

Many types of cabinets can be painted with a little bit of planning and work.  All bathroom plumbing should be in good working order.  Make sure there is plenty of light with good looking fixtures and that the ventilation to both the kitchen and bathroom is more than adequate.  Also, make sure the counters are clean and devoid of clutter.

It may seem like a crazy idea to spend money on a home that you are planning to sell.  However, spending money in the right areas can greatly improve your chances of selling the home faster and may yield a good return on the investment.

Why list your home with Rock Realty?? Rock Realty Marketing Outline

Recent Testimonials: Rock Realty Client Testimonials

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I Used my Retirement Money to Buy Real Property and Make Money.

Well, as many of you may know, in the past two years I have been really studying as much as I can about how to use retirement funds to buy property. After much studying, last year I took the dive and attended my first tax auction. I bought a property with my retirement money and I am now about to resell it for nearly double what I paid for plus all my expenses. By doing this, I stand to make a return in my retirement account of nearly 28% in 2014. That’s right, you heard me correctly, I will sell these properties I bought at tax auction, with my own retirement money in 2013 for a net increase in my retirement of nearly 28% in 2014. Just so you know, when my money was with T. Rowe Price…for the past 15 years, I had never made that kind of money in 1 years time…..never! In fact, the best return I ever got with T. Rowe Price was a net increase of like .08%....what a joke!

I have privately spoken with some of you on how to use a Self Directed IRA and many of you have found your way to our Self Directed IRA social network however, many more of you still haven’t figured out how to make a SDIRA work for you or even what it is. I can’t stress to you enough, go join it’s FREE and, learn as much as you can. Read the blogs, get on the forums, contact the SDIRA Trustees……..RETIRE EARLY!

Stop waiting, it’s the new year and now is the best time to get started. We have some of the bet Trustees on our network that offer our members free webinars, workshops, libraries…..a wealth of information and knowledge. The best part, our Trustees are the same people I use, I learned from, hold my money and I can tell you personally, I have made money in my retirement, more money than I have ever made in my retirement. Stop procrastinating….go to and join now!

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5 Factors Affecting Sales Demand For Real Estate

Wherever you go, real estate holds a distinctive role in shaping up a country’s economy directly affecting the buyers and sellers in the market. Highly responsive to the law of demand and supply, realtors and independent sellers alike have to keep watch on various factors critical to their income-generating means. With hundreds of thousands, if not millions, of money on the loop, finding time to scrutinize the following critical factors affecting real estate demand will help generate positive results to your planned resale.
1. Current Demographics
The composition of the overall population concerning age, income, migration and population growth is critical. Most home buyers usually consider location as a top priority when researching for home investments making demographics highly critical when it comes to demand and, subsequently, pricing. Florida’s real estate market, for instance, has continually been tagged as a perfect haven for retirement due to the consistent number of baby boomers migrating to the area.
2. Demand Vis-à-Vis Supply of Real Estate Properties
There is no doubt that real estate properties’ supply largely affects demand in the market. As real estate can go through various cycles, so does its demand and supply. When supply surpasses demand in the market, prices can easily plummet. This is what took place in the US real estate market in the last three years or so. As the number of foreclosure rises, price of real estate took a nosedive. If you are in a realty buy-and-sell business, buying low and selling high later on will give bang to your buck. For someone selling a home, this can mean disaster as you will be competing with low-priced foreclosures.
3. Employment Condition
Areas with high employment availabilities are sure-ball real estate buying magnets. Cities usually equated with well-paying jobs can easily shift migration patterns leading to an increase in demand for more developments. Most cities with more employment requirements most often enjoy an upswing trajectory in real estate demand. As a result of this high demand, prices have the tendency to rise, too.
4. Correlating Credit Markets and Interest Rates
Not everyone can buy homes in cash. Most rely on mortgage or real estate loans to buy a property. If interest rate is low, loans can be had at a much lower cost making it highly beneficial for buyers. Low interest rates means easier to acquire loans or credit from financial markets and, subsequently, lower monthly amortization. With this, more demands for real estate will be imminent.
5. The Overall Economy
The health of the overall economy, of course, largely influence sales demand for real estate. A strong economy attracts more jobs and population growth increasing the demand for housing and development. A sluggish one does the opposite as consumer confidence is usually stunted. 

When you have a home or a piece of realty and you have plans for resale, it is important to take these critical factors into consideration. Do remember that in real estate, selling a property requires not just efforts but, most importantly, the right knowledge and timing. The perfect convergence of these factors will largely contribute to lucrative sale deals in the market.

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If you think buying a home is tough, try selling your own. Buying usually gives you due advantage during negotiations, but selling can be more challenging. In real estate, the seller usually takes the brunt of finding the right buyer and facilitating transfer of documents while obtaining a lucrative deal as planned. With much of your time spent on your business or work or an impending transfer, finding time to sell your property in a fast yet productive manner can be best done with a real estate agent in tow. With hundreds of “expert” real estate agents out there, finding one that can deliver what you need can be daunting. But this dilemma can be used to your advantage by simply asking the right questions.
1. Are you an accredited real estate agent in the state where the sale should be done, for how long and how many successful sales have you done in the past 2 years?
It is important to check on a realtor’s credentials vis-à-vis state accreditation, references and reliable sources. Accreditation by the National Association of Realtors would be a plus. Like everything else, experience does matter when it comes to facilitating real estate sales. Though it does not necessarily follow that more established realtors are better than new ones, a realtor’s experience will help you gauge efficiency and turnaround time for property sales. Of course, the number of successful deals complete with references will help you verify if the realtor can live up to the demands of the current real estate market and your expectations.
2. Do you operate locally? If so, how do you plan your sales strategies?
If you are selling a property in Pennsylvania, it would be a total waste of money to spend time and effort with a New York realtor. A real estate agent operating locally usually has enough information on the current real estate demographics, demands, and local marketing solutions to amplify the sale. Make sure to ask how he plans to sell. Dig deep into his marketing tactics, home staging, and other initiatives that quickens the pace of the sale process.
3. What is your selling method?
There are many ways to sell your property using a realtor – auctions, EOI, POA, tender agreement, or direct selling ( i.e, from realtor to buyer). Unless you will be selling your property “as in”, ask carefully if renovations, upgrades o r repairs are necessary.
4. Do you work alone or with a team? Communication method?
A real estate agent no matter how adept in dealing a real estate market should never work alone. Tons of workload awaits them. Whether working with actual or virtual assistants, a realtor must always have a team that does paper transactions, online marketing, and various data management solutions. This gives realtors more focus on his or her core competencies like negotiations, renovations, and arranging an open house. Keep in mind also the communication method and by how frequent. Look for a realtor that provides an open communication line with constant update to his client.
5. How do you charge your commission and by how much?
Normally 3%-5% commission is rewarded to real estate agents but this can be negotiable and can highly vary from state to state. It can also be fixed or according to tiered percentages. Always analyze its impact before signing a deal. Choose one that can deliver great value to your property.
Indeed, selling your home or any real estate property can be an overwhelming experience. Having a capable real estate agent as an ally in this quest is a wise move. By asking these questions, you can ensure finding the right person to entrust your property, way for a quick sale, and more value on your property.
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How to properly evaluate a potential investment property

photo credit: Håkan Dahlström via photopin cc
photo credit: Håkan Dahlström via photopin cc

Life is full of sayings that seem contradictory at first.  Expressions like “a chain is only as strong as its weakest link” and a “team is only as good as its worst player” seem to make no sense until they have been analyzed and understood.  In flipping homes, you make your money when you buy.  Quite simply, if you buy a home at the proper discount then you have a much better chance of selling at a profit.  Here is a general outline to help you evaluate a potential home for investment.

First, Take a Casual Drive

It is a good idea to only consider homes that you can actually inspect.  Being able to drive by the home gives you a firsthand perspective. On your way to the home pay attention to the little details such as

  • condition of the roads; are there large potholes, pavement patches, adequate street signs?
  • local area; are there any schools, shopping, offices, or factories nearby?
  • Appearance of the actual street; how do the other homes on the block look?
  • The prospective home; what is your first impression when you see the place?

Second, take a Casual Stroll

Now that you have had the time to look at the home and surrounding area from the road, it is time to actually look at the property up close.  When you are in the home ignore things like carpeting and paint.  Take time to look over the roof, the foundation, the electrical box, the HVAC unit and any plumbing pipe that is easy to access.   Walk outside and see if the septic tank or well has any problem.  These are the areas that can cost major money to fix.  If there are any noticeable problems with these primary parts of the home you can use that to negotiate with the seller.

Third, crunch some numbers

Now that you have looked over the home and determined that it is a possible investment, it is time to do the math.  You need to have an idea of what the total repairs will cost along with how much the home should be worth after the repairs are completed.  Once you have these numbers you can make an offer to the seller.

When putting together your repair estimates it is always better to over price.  Trying to cut corners and dream that the kitchen can be remodeled for $2,000, or some other wishful hope, will cause you tremendous grief later on.

After you have looked at a few homes and talked with the same contractor a number of times you can start to get a feel for how much repairs will cost.  This one skill takes some time to master for those that are new to real estate investment.   Once you are comfortable estimating repair costs you will be much better at spotting a deal when it pops up.

Search for: Madison, WI Foreclosures for Sale

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Are you planning to sell your house or apartment? Would you like to know what can help boost your resale incentives? If you have finally decided to list your property up for resale, you might be inundated by friends or work colleagues on undergoing notable changes to boost results. Though some people may find it easier to sell their homes “as is”, this idea does not apply if you want to gain more out of your hard-earned investment. You do not really have to spend a fortune if you wish to increase the resale value and appeal of your home. All you need to do is exert efforts and a few bucks to guarantee a resale that will put a huge grin on your coffers.
1. Standard Repairs
Aside from location, size, neighborhood, number of bathrooms and bedrooms, and so on, it is important that your property is comfortable and functional. You need to ensure that structure, plumbing, electrical, security system, and other crucial parts of the home are safe and sound. Carefully assess any broken outlets, chipped or cracked tiles, defective electrical and HVAC system, infestation, and other parts of your property. It is your ethical responsibility to sell a home that is functional and serviceable. In cases of serious repairs needed, a professional is one that guarantees a topnotch job, unless you are a master in do-it-yourself.
 2. Organizing Clutter
This may sound tedious at first but, when done right, can give your home a creative facelift without spending a lot. There are many ways to organize clutter nowadays. You can put into storage any unnecessary items which might disrupt a potential client’s interest. You may indulge in simple clean-up but when it comes to de-cluttering, you might want to check out various storage systems nowadays that deliver astounding results.
3. A Paint Job
Paint plays an important role in a home’s curb appeal. It is the very first impression that draws interest from potential clients. If you believe that your home is in dire need of a fresh coat of paint, slap both interior and exterior with a can or two. You may engage in DIY if you have significant experience. Just make sure not to become tacky with wallpaper, odd colors or bad flooring design. When you are not sure, better seek out a trusted local paint contractor to handle the job. Some also have a lot of vinyl siding now. It might be good to paint the exteriors or power wash them to ensure clean appearances for when clients come to view the property.
4. Add a Garden
You can prettify your back- and front yard with a garden. Mowing the lawn can prove to be an exciting chore to both men and women nowadays. A garden full of flowers makes a lot of difference. For small –spaced abodes, AeroGardening or simple recycled container gardening would suffice.
5. Take Note of the Kitchen and Bathroom
Be extra watchful of your bathrooms and kitchen. These areas are becoming highly considered focal points of a home. You might want to invest on new sinks, countertops or cabinets. Replace those with significant marks as this can easily distract a potential buyer.
6. Raise the Roof
Repaint, repair or replace? Carefully assess the problem on your roof. A professional roofer can easily pinpoint essential initiatives that must be done to ensure zero bad credit.
7. Update Security System

Last but not least, make necessary updates on your home’s security. Nothing beats a house that is not only well-kept but also fully secured. Homes with foolproof security system, often, acquire great interest.

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Estimating house repairs accurately for an investment/flip.

photo credit: Nebojsa Mladjenovic via photopin cc
photo credit: Nebojsa Mladjenovic via photopin cc

Very few people ever buy a car and then find out the amount of the monthly payments and insurance.  Most people sit down with pen and paper, or a computer, and crunch some numbers to make sure they can handle the purchase.   The same thing should be done before buying an investment property.  However, buying a home with the purpose of flipping takes a bit more knowledge and calculation in order to earn a profit when it comes time to sell.

Understand the Difference between Structural Problems and Cosmetic Needs

Even a brand new novice can recognize the need for some paint or fresh carpet.  People that have purchased a home before could possibly spot an older front door or some outdated windows.  However, being able to see and recognize a problem with the structure of a home takes a bit more knowledge and practice.  Pay close attention to these areas and possible problems:

  • Areas damaged by water; evidence could be water stains, rippled paint, musty odors or flaking of paint
  • Problems with water lines; water supplies that drip or don't run, leaks around toilets, pipes, and water valves
  • Presence of pests, especially termites
  • Dry and rotten wood

Beyond these trouble spots, it is also important to understand that a home 20+ years old will most likely need some kind of other normal repair such as an updated HVAC system, new roof, or new water heater.

The Right Compromise Makes Everyone Happy

Keep in mind that your goal is to FLIP the home.  That means that you can purchase the home well enough below the market value that you can quickly sell it to someone else for a profit.  If you try to repair too many things, then the price will need to be increased and you could scare off a few investors.

Here is a simple formula that will help you when looking at potential properties.

  1. Determine the value of the home after repairs have been made
  2. Deduct the money needed to make said repairs.
  3. Take this new amount and multiply it by 70%.  This figure is top dollar offer.

Here is a simple example.  You are looking at a home that should be worth $180,000 once it has been repaired.  The money needed to fix it up is $15,000.

Estimated new value of home after repairs$180,000.00
Necessary repairs-15000
Current value$165,000.00
Multiplied by 70%$115,500.00

In this particular example, if you could purchase the home for $109,000 and sell it for $114,000 you would make a quick $5,000 without lifting a finger.  To make this better, the investor that buys the home from you has enough room to buy the home, make the repairs and sell for a profit.

How to Get Better at Estimating Repair Costs

  • Habit of looking at homes – You will need to inspect quite a few homes in order to learn how to recognize particular problems. Seeing the same kind of problem multiple times will teach you what to search for in a home.
  • Get acquainted with a contractor – If you are not a contractor yourself then it is a good idea to strike up a friendship with a contractor.  They will be able to give you estimates on your potential properties.  You can also refer work to him to keep him busy.
  • Take good notes – When you are looking at a home with a contractor take notes about the problems that he points out and the price for the repair.
  • Study material prices – Get accustomed to visiting the local hardware stores to get prices on materials. Knowing when prices are going up, or going down, or certain items will help you make more accurate estimates.

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Rookie mistakes when flipping a home.

photo credit: Jeremy Levine Design via photopin cc
photo credit: Jeremy Levine Design via photopin cc

With mortgage rates still at all-time lows and lots of homes available at prices below market, many people are turning to real estate investment for the first time.  In order to be safe, new investors often start out with flipping homes instead of holding a property for its rental value.  Here are some of the top mistakes rookies make in home flipping and how to avoid them.

Not Allowing Enough for Repair Work

This is usually the biggest mistake made by new investors.  People who have never renovated a home often underprice the repairs needed to make the home attractive enough to sell.  This is why seasoned investors recommend that new investors talk to a contractor BEFORE placing a bid on a home.  Getting a good price upfront will help determine if the house is worth the purchase. It is also wise to add a bit of cushion for Murphy's Law for things that just go wrong for no reason.

Allowing Emotion to Let You Pay Too Much

Some investors find the “perfect” home and go full steam ahead with the purchase.  They find a home with a discount in a hot area and they just KNOW that they can sell it for a quick profit.  This is where cold, hard facts should take the lead, not emotion.

An investor should never, ever buy a home for anything more than 70% of the home's repaired value.  This is a rule of thumb that has been used by many investors for years and it has served them well.  Paying more than the 70% will lead to smaller profits or even a loss.

Trying to Do Too Much

Many new investors envision themselves remodeling the bathroom, adding new paint and then finishing up the front lawn in a few weeks and then, voila, the home will sell.  However, it is best to let the pro's handle the tough work.  Repairing or remodeling a home can require some or all of the basic contracting skills such as carpentry, plumbing, masonry, painting and electrical.  It is simply too much of a daunting task to try and do all of this on your own unless you have considerable experience in these areas.  Even if you can do it all, wouldn't it be better to hire someone to do this type of hourly work while you search for the next deal?

Taking Too Long for the Repairs

Each month that you own a property is another month of expenses for items like utility bills, insurance and property taxes.  This can eat in to your future profits and may even cause yourself a loss.  Before buying the property sit down with your contractor and discuss the estimated time needed to repair the home.  If necessary, ask the contractor to break the job down into rooms and develop a timeline.  This will help you and the contractor stay on pace to finish the work and get it back on the market.

Your goal as a home flipper is to find a home at the right price that you can turn around and sell for a profit.  Don't fall in to the trap of these mistakes and don't get too attached to any home.  Always be ready to simply walk away from a potential deal and look for a new one.

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photo credit: ifmuth via photopin cc

It Takes a Good Plan to be Successful in Rental Property

(Investment Properties: Part 5 of 5)

For people considering a purchase of a rental home this is truly an opportune time. The tremendously low mortgage rates coupled with attractive home prices makes this a buyer’s market.

However, numerous reports indicate that home prices are rising consistently, although modestly. If you are considering buying a home it is time to take action. Here are a few guidelines to help you plan out your first purchase.

Look to Experts

If you are looking at your first investment property purchase it would be wise to work with a real estate agent that is experienced in these kinds of deals. An agent that intends to work with an investor over the long term will be meticulous about the property recommendations to insure the investor meets their financial goals and comes back to the agent for more homes.

It is also a good idea to speak with other investors. They can provide you some guidance about what to look for in homes, what areas to avoid and other general information that is generally not found in a textbook.

What Type of Investment Do You Wish to Pursue?

Some first investors choose to buy a home at a great price and rent it out on their own. Others use the service of a management firm. And then there are the individuals that buy a home, spend some money on repairs and put the home back on the market at a price to make a profit.

It is important to consider your options and tolerance for risk. Buying a home that you can easily afford while looking for a tenant may be a good opportunity to get your feet wet.

Develop Your Team before the Purchase

If you plan to manage the property on your own, there will be a few individuals you need to contact prior to purchase. First, you will need a lender that can handle investment loans. Second, you should consult with an accountant and attorney to make sure you are covered legally and that you minimize your tax liability. Third, you should speak to an insurance agent about the proper policies to cover your investment. Finally, you will need to talk to a general handyman or one each of plumbers, electricians, roofers, painters and HVAC repairmen. Having these people lined up and ready to work for you will make much of the process go by smoothly.

Choosing the Right Area

It is important to pick a home in an area that is accustomed to rental property. Places with a high population close to schools and shopping districts are usually safe bets. Rural areas can be difficult simply because the number of available applicants is typically small. Keep in mind that you may want to sell the property in a few years. If you buy the smallest, or the largest, home in a neighborhood it can be tough to unload later.

Buying an investment home should be approached as a strictly business transaction. Decide how much you can comfortably invest and how much you hope to make as a return and let those types of items help you with the decision.

Investment/Rental Properties (5 Part Series)

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photo credit: reallyboring via photopin cc

Advice About Purchasing Your First Rental Home/Property
(Investment Properties: Part 1 of 5)

Before buying that first piece of rental property it is important that you answer a single question. This question has nothing to do with your credit score, your experience with real estate or how much money you can gather for the purchase. The question is quite simple: WHY are you buying an investment home?

The answer to this question will guide you towards the right kind of property and the right type of financing. Let’s look at some examples to get a better idea of reasons people use to start investing in homes.

Saving for College Tuition

This type of goal usually involves a term over a few years. Couples with young children will buy a home in an area that has shown signs of appreciating. A year or two before the child enters college the family will sell the home and use the profit to pay for tuition, books and other expenses.

In this particular scenario the couple is not concerned with making a large profit each month on the rent. They simply want to break even while keeping the home in tip-top shape to maximize the potential appreciation.

Using Cash Flow to Increase Monthly Income

Some individuals invest in rental homes because they want to earn a profit each month from the rent. In these cases it is extremely important to buy a home either for all cash or at a deep discount from the market price. Foreclosures and vacant homes are common for this example. Buying the home for cash or at a deep discount allows the landlord to charge a fair rent based on the current market conditions and pocket most of the money each month as profit.

Speculation about Future Values

Sometimes people simply buy a property at a slightly discounted price in hopes that the property value will escalate quickly due to a future event. For instance, a new shopping mall, new school or a new factory can greatly improve the value of homes in the immediate area. Buying a home in such a location and holding on to it for a few months to a year can yield a high profit.

Career Change

Some people want to begin their property investment as a means to escape their current full time job and start a new career. It is possible for people to invest in real estate as their main source of income. However, it is not a get rich quick scheme.

The most successful investors have clear goals and follow a proven formula. They buy homes in particular areas that exhibit desirable qualities. They only buy when the price is discounted heavily and they have favorable financing for the transaction. They also understand the rental rates for the area in comparison to the financing costs.

Buying a rental home can be lucrative and lead to good fortune. However, it must be approached with diligence and hard work, not pie-in-the-sky dreams.

Investment/Rental Properties (5 Part Series)

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Property Management, Rentals and Short Sale: The New Niche

From the time we sign up for real estate school, to the most experienced agents with 30+ years under their belt, we have all heard that to be successful in real estate, we need to find our niche. Well, I am here to say that’s a bunch of hog wash. I would go as far to say that by “finding your niche” you’re a signing, your own business’s death certificate. Many of our colleagues found out in 2007 – 2008, when the real estate bubble burst, having a niche meant you didn’t know how to work in a shifting market place. I understand that for most all of us, real estate was steady and predictable so, this niche thinking was rampant, accepted and promoted amongst our ranks however, now we have learned that being a niche Realtor means certain death as real estate become more and more volatile each day.

Now, I say all this but, let’s be honest, REO is definitely a niche, I like to think of it as being the undertaker of the real estate world. Yes, by extension, that means I am a housing mortician. As such, we see highs and lows and we are extremely sensitive to fluctuations in the market place. For some, that’s just fine, we have learned to work with these convulsions and have shielded our lives and business from times of drought however, a vast majority of us ended up in the foreclosure lines ourselves when the real estate market heard those fateful sounds, snap, crackle and finally….POP!

As a Realtor and full time Broker, I have found that taking a more diversified approach to my business offers me and my family a more stable outlook to my career. This means, I have done away with the niche and expanded my income streams to include things like; Property Management, Rentals and yes, Short Sales. I do have some other things I do in real estate like, investing however, that is another conversation for another time. Let’s stay focused on the whole “niche” thing.

True, you can say that each of those three I just wrote about are niches amongst themselves and, you would get no argument out of me here however, all together as a part of your service portfolio, they become more, much more. All together they become an inoculation of sorts, from the market place unpredictability. By adding more services you can offer, you are riding out the waves of instability in the market place by being able to quickly and effectively shift your business to more profitable ventures. Ok…yes, you are still working the “distressed property” niche so…..yeah, it’s still a niche but, it’s a niche with diversification.

Right now, many markets are seeing short sales take over and even outpace REOs however, we don’t see a flood of agents clamoring to do short sales like we did with agents clamoring to get REO assignments and, why is that? Have you thought about that? If not, why not? My argument is, the skills you learned to be a kick ass REO agent are really the same skills you need to be a kick ass Short Sale Professional. I would go as far to say, no real difference exist between the two required skill set that would stop any outstanding short sale agent from being a outstanding REO agent and vice versa.

Granted, short sales are much more time consuming and require much more paperwork but, these things shouldn’t scare you away but, should entice you to add short sales to your service portfolio. Let’s face it, if you can close a complicated short sale, you can close any REO. My bigger point is, due to the complex nature of a short sale, becoming a Short Sale Professional will build on skills you already have or at least, develop skills you don’t have and therefore, making you better in the long run.

Don’t be afraid of short sales, they are fast becoming the new REO. As REO agents, you already have the basic and even advanced skills to be a great Short Sale Professional so, grow a pair and get to work. Your area has hundreds or even thousands of homeowners who need the help of an experienced distressed property agent who knows the front and back of the foreclosure process so that they can avoid the foreclosure if at all possible.

As an idol of mine says, “You beda weeerk!”

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How to Buy Investment Properties with an IRA - Step by Step (Part 4 of 4)

Using a self-directed IRA to buy real estate is a sound investment strategy for many people. The ability to buy assets that can provide strong returns is appealing to a wide range of people. Listed below are the basic steps necessary to buy a property in compliance with the IRS rules governing the use of an IRA account.

photo credit: roberthuffstutter via photopin cc
photo credit: roberthuffstutter via photopin cc

1. Contact a financial firm that has experience with self-directed IRA’s. Working with a firm that is familiar with these accounts and the real estate transactions is the most important step.

2. Understand the IRS rules. A property bought via the IRA must be an investment home. Second homes, vacation homes and primary residences are strictly prohibited. Furthermore, distributions from the account are not allowed until the owner of the IRA is at least 59 ½

3. Deposit funds into the account. One of the important rules about buying property with an IRA is that all funds for the purchase as well as any other expenses has to come directly from the IRA. The owner cannot chip in extra money to help cover property tax or replacing the roof, in example.

4. All revenue received on the property must be deposited to the IRA account. The revenue cannot be given to the IRA owner or relatives.

5. Take time to preview multiple properties. It is wise to enlist the assistance of a real estate agent who has knowledge with these types of transactions. An agent can recommend properties in areas that have strong rental history. Furthermore, the agent can help calculate the return on investment based on average rent payments for the area.

6. Once you have picked out an investment property it is time to put down an offer. Contact the custodian for your IRA account and tell them you want to buy a property. The custodian will then fill out the necessary forms and sign all real estate documents on the behalf of your IRA account.

7. It is a wise idea to get a contract with a property manager to handle the finances of the property. This will prevent you from collecting the rent payments and making any necessary repairs yourself. A property manager can keep all the transactions clean and legal and free you from the headache of property management.

It is important to understand the rules concerning using an IRA to buy and manage real estate investments. Failing to follow the rules can lead to penalties and possibly loss of the tax advantages associated with an IRA account. When in doubt consult a tax professional before making any decision or transaction with the IRA funds.

This is Part 4 of a 4 Part Series.

Part 1: How a Realtor® can help you invest in your IRA

Part 2: Purchasing Investment Properties for your IRA

Part 3: How to invest in real estate using an IRA

Part 4: Step by Step Guide to Buying Homes with your IRA

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How to Buy a Short Sale– Part 1

4359178944?profile=originalBy Michael Humphries - Compass Roads Realty, Inc. |

8 Steps to a Successful Short Sale Purchase

In this two part post I will layout eight steps to follow that will walk you through a successful short sale purchase from search to closing.

Short sales are gaining market share again and are expected to make up nearly 35% of our inventory during the next 12 months. According to RealtyTrac, who charts real estate activity across the country, completed short sales are expected to exceed the 2012 number, which will likely be around 1 million for 2013. Forty percent more than the 600,000 foreclosures expected this year.

So like it or not if you’re in the market to buy a home this year you are going to be very limited in an already limited supply of inventory unless you consider short sales in your search.

A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property. This type of sale requires a third party approval of price, terms and whether or not the seller is eligible to short sale their property. A bank, lending institution or mortgage servicing company plays the third party role.

It has taken the industry a long time to adapt to the short sale complexities. These waters were unchartered prior to the financial crisis of 2007-2008.

It’s like the “Ten Thousand Hour Rule”– the idea that it takes 10,000 hours of practice to master any skill– that Malcom Gladwell writes about in his book Outliers. We’ve certainly put in the hours and have finally subjugated the madness and mayhem associated with this type of sale. Or, at the least, we’re able to keep it to a minimum.

Fannie Mae and Freddie Mac have recently implemented new procedures to help expedite the process that it takes to complete a short sale– these transactions can take up to three times longer to close than a traditional sale and often never make it to the closing table. The new changes are proving effective so far in reducing completion times and are expected to increase closing ratios significantly.

If you play your cards right, you can look forward to a more practical 90 day timeframe. And if you learn how to navigate through the red-tape associated with a short sale, you can greatly increase the odds of successfully completing your purchase.

Here are four of the eight steps you can follow to minimize the bureaucracy and maximize your Success Story.

1. Find a Realtor: Find a realtor that has hands on experience working with short sales. This is the most important step– period. This type of real estate deal really requires the help of an experienced agent or attorney.

Your realtor should have at least three completed short sale transactions under the belt to qualify as “experienced”. The difference will make or break your deal.

2. Mortgage Prequalification: If you plan on financing your new home you will need a Prequalification Letter from a reputable mortgage company, bank or credit union. The seller’s bank won’t even look at an offer that contains a financial contingency without a prequalification letter attached. Not having these credentials upfront will cause pointless delays submitting your offer.

The majority of lenders will provide a letter at no cost and it only takes a 10 minute phone conversation or a quick online application to complete.

3. Short Sale Search: In addition to traditional listings, ask your realtor to include the short sales in your search criteria. A lot of agents have gotten into the habit of excluding them. There are two types of short sale listings: Approved and Unapproved.

• Approved - simply means that the seller has qualified for and has received approval from their bank to short sale the property. In some cases the bank has approved the list price.

Approved short sales will have a higher yield in terms of potential, especially those with list price approvals. These listings should be considered first before betting on the unapproved– wildcard listings. Although price approvals are subject to change, particularly in markets experiencing rapid price appreciation, these listings are far better to work with than the unapproved deals.

• Unapproved - most short sales are listed as unapproved when they first go on the market. This status means that the seller hasn’t received the banks approval on price, terms or seller eligibility and in some instances, all of the above. In most cases the bank is not even aware that the property is on the market.

Unapproved listings should be left to the specialist, the few and far between agents that have been successfully working short sales for 3 plus years. They have developed ways to quickly indentify whether or not an unapproved short sale listing has a breathing chance for approval.

4. Listing Alert Notifications: Ask your realtor to set you up on an automatic listing alert system that will email you new listings as they hit the market. This will put you in-front of the market and give you an advantage over your buyer competition.

In Part 2, I will outline how to formulate an offer price that will get the banks attention, the valuation process and how to avoid the most common short sale pitfall.

Watch the blog next week for Part 2 – 8 Steps to a Successful Short Sale Purchase

Many partners including the U.S. Department of the Treasury, Fannie Mae, HOPE NOW, HUD, and NeighborWorks America will host "Help for Homeowners" Community Events on Tuesday, March 19, 2013 at the Paradise Event Center - Las Vegas Hotel & Casino.

For a FREE list of short sales in Miami-Dade or Broward County;
Email “FREE SHORT SALE LIST” to: Include a list of Zip Codes or City Names of interest.
Visit us at:

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It’s a sign of the times!

Most of us grew up thinking that if we planned well and played by the rules, we’d never have to stand by as our financial lives unraveled.

But upheaval on Wall Street, unacceptable rates of unemployment and plummeting real estate values have taken their toll.  Since 2007, 7.9 million homeowners have lost their homes to foreclosure. Current estimates are that one in four homeowners owe more on their mortgages than they could get from the sale of their home. Millions more homes will be lost to foreclosure before this real estate crisis runs its course.

The sad fact is that foreclosure is not an isolated event. For months leading up to the loss of a home, financially strapped homeowners live under a cloud of uncertainty.  And then for many years afterwards, the blow to credit gets in the way of buying another home or buying anything on credit. Foreclosure even complicates employment prospects.

The impact of foreclosure is huge and the sad fact is that it’s often avoidable.


As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially strapped homeowners with options to foreclosure, ensure that they steer clear of scams, and help navigate them through the solution that best meets their needs.

Among the most important facts to keep in mind: the sooner help is sought, the better the options.

These are tough times, but more help is available than ever before. If you or someone you care about is ready to navigate away from the dark cloud of an unmanageable mortgage and realize that hope and blue skies are within reach, contact me today and let’s get started.

What are your 10 Options to Avoid Foreclosure?


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The real estate industry is being flooded with new marketing tools, platforms and strategies, which are being rolled out in anticipation of a new housing boom and explosion of new Realtors but is this doing more damage than good?


The real estate business has long been plagued by endless expensive and ineffective lead generation tools aimed at Realtors. Now there is a new surge to cash in on all of the players entering and reentering the business from Zillow and the acquisition of Buyfolio to The Real Estate Book’s new internet marketing makeover of old and overdone tools to Listingbook and others.


In fact, one of the biggest risks to new real estate agents, brokers, investors and even mortgage companies is training and spending themselves into bankruptcy before they even really get going, despite the slick pitches of how ‘great’ the next exotic marketing ploy is.


Savvy real estate professionals know that they need to be constantly seeking the best possible ROI for their marketing budgets, while putting their blinders on to block out these distractions, yet keeping one eye on real future trends and emerging lead generation tools which are truly revolutionary and valuable.


After all, why give up your hard earned capital to overpay for others’ experiments in advertising or give up your highly valuable leads and referrals to someone else to work for you and no doubt cash in on in other ways? Or why blow big money on complex advertising campaigns which don’t improve results or speed up production?


This is especially true when effective and affordable solutions are at hand for delivering fast results for finding distressed multifamily properties, REOs and other real estate which needs to be listed and sold.


After all, winning in the real estate game today is all about controlling the listings or at least having off market properties to offer. Fortunately the latest software, like BankProspector has made this much easier, faster and affordable to do. This tool in particular means no need to waste time and dollars on fielding calls from unqualified prospects and being able to leap gatekeepers to lock up distressed properties for sale from institutions.


Don’t underestimate opportunities like this, which present the chance to get ahead of the competition, while improving speed and profit margins to continually compound and increase success. Only those who innovate and demand top results will be able to separate themselves and stay in the game long enough to really achieve what they set out to.

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Homebuyers Can Use a FHA Loan to Purchase Property from an Investor

FHA MortgagesFHA has been the most popular mortgage used by Wisconsin residents looking to purchase their first home. The relaxed credit standards lower down payment requirement and higher debt ratios has allowed many people to purchase a home through this type of loan. However, investors who were in the business of buying a home to simply turn around and sell it for a profit, called flipping, always steered clear of FHA borrowers. FHA had a rule stating a home could not be sold a second time within 90 days of its last purchase. But that has all changed.

Original Intent

The primary reason for this “anti-flipping” rule was discourage fraud on mortgages. However, as time marched on it became apparent that deserving FHA buyers were being denied a home. Many homes have been bought after foreclosure by investors and repaired to make them ready for resell. The FHA ruling prevented the investors from selling and the market has struggled.

Some Rules to Keep in Mind

Although the FHA administration has decided to lift this rule, there are still other guidelines that must be followed when dealing with one of these investment homes.

  • The seller of the home and buyer cannot have any type of pre-existing relationship. This could be as simple as a relative selling to a family member or as complex as a business owner selling to a partner or employee.
  • In the event that the new sales price is 20% or more than the price paid at acquisition by the investor the loan may be inspected more closely to ensure the value of the property was not artificially raised.

Keep in mind that the original rule was put in place to prevent fraud. In addition, the original rule only came in to effect when a home was bought by an investor and then resold within 90 days. If the investor waits beyond the 90 day window to sell the home most of these issues will not be present.

Protection against Future Fraud

Most lenders are well aware of the abuse that has taken place in the mortgage industry over the past few years and have stepped up their lending standards to catch fraud and illegal practices. Because of the heightened scrutiny, many high ranking managers among the top lenders do not feel that this change in FHA rules will lead to a sudden burst of bad loans. The tighter appraisal restrictions, along with the general awareness of potential problems, should allow banks and mortgage companies to move forward with new FHA loans without falling victim to a scam artist.

Original Post - Using an FHA Loan to purchase from an Investor

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Avoiding Problems with Your Mc Farland Escrow Account

If you are using a mortgage to purchase your first home it is highly likely that the lender will request that you use escrow in order to handle the annual homeowner's insurance and taxes on the property. This is reflected by an additional payment on top of the interest and principal payment that you make on the home loan. Ideally, the lender will review this account every year to see if there are overpayments or underpayments and change the escrow accordingly.

Unfortunately, we don't live in a perfect world and companies do make mistakes. Here are some important facts to help you understand the basics of an escrow account.


Property taxes are usually reviewed one year after a home has been purchased. At this time the property will likely get a new assessment, which can drastically increase the tax amount. For people that are buying a previously owned home this will usually not be an issue, although you should look at what the current assessment value is. If you are buying a brand new home, or if you have just built a home, then the previous tax amount was based on an empty lot. The existence of a new home will greatly improve the lot's value and subsequently change the tax amount.


Before finalizing the loan you will be asked to provide proof of insurance from a licensed insurance agent. The location of your home may dictate a few extras that might not be prevalent in other areas.

For instance, if you are considering the purchase of a home that is close to a river or lake then you may be in a flood zone and subject to flood insurance. Homes that are located in extremely rural areas may be subject to higher premiums if there are no fire fighting stations in close proximity to the home. It is vital that you speak to your Realtor® before buying a home to see if there are any conditions about the home that would result in a higher insurance policy.

Reviewing the Escrow

Every year your lender should mail you a letter that goes over the escrow account for the previous year. It should list all of the payments you made to the escrow account as well as any amounts disbursed from the account to cover your expenses. You should also contact your homeowner's insurance agent and the local tax assessor's office to see if there are any upcoming changes for your tax bill or your insurance bill.

How to Handle Property Tax Increases

Going back to the early example of someone buying a new home or building a home, there is the expectation that the property tax amount will increase tremendously. If the increase is more than $1,000 then the lender will possibly add $2,000 to the escrow account in case the taxes increase again the following year. This presents you with three choices:

  • Accept the new escrow amount and pay the additional $167 monthly amount
  • Ask your lender if they will spread the extra amount over the next two years to make the monthly amount lower
  • If you have the funds, offer to pay the increased tax amount yourself so that your escrow payment does not change.
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Homeowners-Insurance-300x183.jpg?width=300Understanding your Mc Farland Wisconsin Home Owners Insurance Policy

There is no doubt that an insurance policy on a home can be tough to understand. However, going over the policy and making sure you are comfortable with the important parts can payoff down the road. Here is an overview to make sure you have the basics covered.

The Home

It is important to know that in the event you lose your home to some sort of accident or force of nature that the insurance plan will provide enough funds to rebuild the home. This goes beyond the selling price of the home when you bought it. You need to know that the home can be replaced at today's costs. Construction costs and materials tend to rise over time. It is important to have replacement cost as part of your insurance policy.

Replacement of Belongings

Besides the actual structure of the home you should also consider your belongings. This can really mean anything such as furniture, dishes, picture frames, electronics, clothes, jewelry and a host of other items.

Try to stay away from the “current market” clause. This means that your 5 year old couch would be replaced at a price that assumed 5 years of use. The same concept would apply to any item that you have owned for a considerable amount of time. Also, ask the insurance company about their process for allowing you to replace items. For instance, if your home burned down and you are staying in a small apartment, do you really want to replace your giant screen TV right now? If the insurance company only gives you 60 days to replace an item, where will you store the products? Does the company demand that you buy an item, provide a receipt and then get reimbursed? All of these items should be covered prior to getting a policy.


The deductible for a home insurance policy works in the same manner as an automobile insurance plan. Higher deductibles will result in a lower monthly premium. However, a high deductible assumes that you have the funds to pay the amount in the event of an emergency. A smart financial move would be to save up a good amount, such as $2000, and then change your plan to a deductible of $2,000.


It is always a good idea to have a strong liability plan in place. For instance, if you have guests for a backyard barbecue and someone falls at the party, your liability policy should cover the expenses for the fall. This could be the cost for the ambulance, any stay at the hospital and possible rehabilitative therapy that is necessary after the injury.

Day to Day Expenses

Some insurance companies will reimburse you for your expenses while you are awaiting for your home to be rebuilt. Make sure you understand the circumstances surrounding this type of expense and how the insurance company will reimburse you.

A lot of the terminology used in the insurance plan is unique to the insurance world and may take a conversation with an agent to understand it properly. Understanding the policy before purchase will help you to feel confident that you are covered in the event of a major crisis.

Understanding Home Owners Insurance 

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