Use of a mortgage to rehab and update a property may be a good option for buyers competing complicated real estate market. Learn why!
Be that prepared real estate client!
Learn how to prepare yourself as a client working with a Realtor. This market is complicated! You need a professional. It’s important to know who is looking out for you. Learn about Agency and responsibilities to the client in this video.
Homebuyer – understand how to prep for mortgage application ahead of time
Define Your Real Estate Investment Comfort Level
by weichert
Get The Best Real Estate Investment Opportunity With Us!
Submitted by Curt Amesbury So – if you want to invest in real property then Rochester/Monroe County is THE place to maximize your return. It is NOT the place to realize appreciation unless you intend to keep your property for some time (years). Before you start, first think about your comfort level. Do you like the idea of single family houses? Some investors I work with only deal with SF because they view the tenants as being more stable. (The downside is that if the tenant doesn’t pay rent, bills still need to be paid). Do you like the idea of a duplex? City vs. Suburban? Small apartment buildings? Mixed use commercial? Each decision carries pro’s and con’s. Talking to a knowledgeable Realtor can help you sort through the options. The fun part starts by looking for opportunities!Property Selection – Watch Out For Big Ticket Items
by weichert
Submitted by Curt Amesbury Okay – so we have an idea of the area and the type of property you want to invest it. If you have options to use cash vs. leverage, remember that cash is king! Since we are not accumulating wealth by appreciation, using cash can drive the best and fastest deal from the buyer’s perspective (you can always refinance after the fact to reduce your exposure). In either case, you will want to be conscious of items that can cost you big bucks now of in the future…such as:
The Roof
The age and condition of the roof surface are important, but what is underneath? Is the original roof made of cedar shake shingles? If so, IT HAS TO GO SOMEDAY! You don’t want to incur the cost of tear-off and plywood installation unless you factor that into your numbers! Does it have a flat roof? If so, be very careful! Rochester’s climate is hard on flat roofs.Electric Service
If the meter is inside IT HAS TO GO OUTSIDE SOMEDAY! A ballpark estimate is $1200 per 100 AMP service (if you own a multi-family multiply $1200 times the number of units). (Incidentally, if you are moving meters outside have a separate meter box for each service – if someone tampers with a meter you won’t jeopardize the whole building!). Also, upgrading electric or restoring shut off service means bringing the electric box AND electric grounding up to today’s code (electrical certification required)! It’s not uncommon to spend $800 in-ground rods etc.Water Service
Is the main water line coming into the building a galvanized pipe? If so, IT HAS TO BE REPLACED SOMEDAY!Sewer Line
Is the main sewer going to the street in good condition? A camera inspection is well worth the $150 a licensed plumber will charge. (One investor I work with owns his own fiber optic cable, so he can investigate sewer lines himself!)How to Choose Investment Opportunities
by weichert
Submitted by Curt Amesbury Anyone who wishes to invest in real estate for wealth building and/or income generation should have a good accountant or CPA. That being said, here are two quick “back of the envelope” ratio models that many experienced investors use to see if the investment property makes economic sense: GROSS RENT MULTIPLIER GRM = Purchase Price/Annual Rental Income CAPITALIZATION RATE CAP RATE = Net Operating Income/Purchase Price
A word to the wise:
Define what expenses are factored into YOUR Net Operating Income. Don’t use anybody else’s NOI figure. COMPUTE YOUR OWN!!
Insurance on Rental Property
by weichert
Rental Property Insurance Rochester NY
Submitted by Curt Amesbury While almost everyone is familiar with traditional Home Owners Insurance, being the owner of a non-owner-occupied investment property is a little different. As a new investor (and assuming you have a general idea of the type, size, age and location of a property you might buy) I recommend that you talk to a few insurance agents. Landlord insurance can include coverage’s that Home Owners Insurance does not address, so ask questions and get an idea of what options you have. Decide upfront if you want to insure for replacement cost or to cover your investment. Those are two very different things in the insurance world!Property Management Selection
by weichert
Submitted by Curt Amesbury All too often I run into investors who have bad experiences working with their existing Property Manager. If you are making an investment in real property that you cannot visit yourself, then it is a good idea to properly screen and selects the local manager who will be guarding your investment.
Some criteria for selection could be:
- Is the firm run by a Licensed Real Estate Broker and a member of the National Association of Realtors? (If so there is an accepted Code of Ethics that governs business dealings).
- Does the firm have a legitimate brick & mortar location – not just a Post Office Box. Can you and tenants actually go there and find someone on duty during business hours?
- Does the firm report owner statements using a professional reporting system? Is it integrated with a standard database (such as Quickbooks or Excel).
- How much is the fee and what is covered? What type of extra charges can you expect? If you sign up, what is required for either party to exit the contract?
6 Reasons Your Agent Wants You Pre-Approved Before Showing You Homes
by weichert