Tag Archives: real estate

HomeOwners Association – Love or Hate Relationship

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HomeOwner Associations- Love or Hate Relationship

In this episode Nic and I are talking about HomeOwner Association.  I get asked my opinion of them a lot and my answers depends on the purpose of the property.

The Good

If the property is going to be your primary residence and you want to live a quiet lifestyle and don’t mind living under the rules of the community then a homeowner association (HOA) is a good thing for you.  They keep the property and the values uniform.  They keep the lawns in good shape, service vehicles out of the driveways, houses uniform in appearance and common or community areas maintained and in good shape.  They can control the paint colors of the homes, organize and community wide yard sale and organize to help the neighborhood and make it a great place to live.  The homeowner association will oversee that the neighborhood is a great place to live and the homes are all uniform.  I have even seen them maintain bank-owned or neglected properties until a new owner is in place.

The Bad

Like anything a homeowner association can also be bad and make everyone living there miserable.  Here in Florida we have more homeowner associations than most areas and while most are good, some are not.  A common homeowner association problem that I have seen is that some retiree moves into the neighborhood, usually by the gate and decides he owns the whole neighborhood.  They proceed to make friends or just plain bully other neighbors into voting them HOA president.  Once their regime is in place, it’s when the real nightmare can begin.  Under the guise of doing their ‘elected job’ they proceed to make even the smallest infraction a huge deal.  They get their torches and pitchforks and begin to mob terrorize the neighborhood.  The tyrant typically has a group of fiercely loyal supporters that helps with the fear and terror campaign throughout the neighborhood.  Neighbor turns on neighbor.  It makes the owners live in fear.

This happened to the neighborhood next to where I live.  It got so bad that the association president would follow the trash truck through the neighborhood each week and if the cans were not removed nearly immediately you got a notice in the mail with a picture.  The neighborhood was made up of working people what would bring the trash cans in when they got home from work.  Apparently, that was not enough for this guy.  Finally, at a board meeting the entire neighborhood showed up and disbanded the entire homeowner association.  Now while this is an extreme case, I frequently, get calls for homes I have listed for sale by the HOA president notifying me that the grass is 1 inch too tall or the shrubs are out of violation.  When I suggest they call the owner, they’d rather be passive-agressive about it and avoid the actual owner.

We have a lot of condominiums here in Florida and their associations are similar, but a big issue with these associations is the finance.  You can get someone with no real financial background making decisions for a large commercial building that could have serious consequences for the owners.  Capital improvements for large condo building like roofs or resurfacing the parking lots can easily be hundreds of thousands of dollars and not budgeting for the repairs over time can lead to a special assessment to the owners.  I have seen this also, you suddenly get a letter in the mail that you owe $8,000 for some building improvement that the condo association did not budget for.  My advise, get a professional company to manage the condo association and maintain the budgets.

The Investor

Personally, I don’t like homeowner associations for my investment properties.  However, if I owned a short term rental property near Disney or a class A (up scale) property, I’d think differently.  Your relationship with the association depends on your investment plan, area and type of property.  Just be aware before you buy a property in one of these areas that they also have a cost associated with them that can reduce cash flow.

 

 

 

 

 

Orlando Vacation Rental Secrets

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Orlando Vacation Rental Secrets

In this episode I am talking with my friend Lance Whipple and we are talking about vacation rental homes. Lance and I are covering all aspects of the Orlando vacation rental market.

Hot Areas

Lance is sharing with me what areas are hot which areas you should avoid.  Lance is an expert in the area and deals with a lot of vacation rental properties. Did you know that Orange County does not allow vacation rentals? But Polk County just to the west of the parks does.  Also, there are several communities that are nearly entirely vacation rental properties.  Is it good or bad to be in these neighborhoods? Do you know the hottest vacation rental areas?  Lance talks about what the tourists look for when they are looking for a vacation rental.

Do’s and Don’ts

We cover the do’s and don’ts of vacation rental ownership.  Especially near http://www.disney.com and http://www.universalstudios.com.  Lance shares stories from his experience of things successful landlord do and the things that unsuccessful landlords do.  Several owners of these vacation rentals that I have spoken with are only trying to break even and have a place to stay for free during their vacations once or twice a year.  Their long term strategy is either retire to the property which will hopefully be paid off by then, or are hoping the equity and appreciation of the property will make the whole process worthwhile.

Rental Properties, vacation rentals near Disney and wholesaling properties.

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Rental Properties

In this episode my wife Nic from www.rapwithnic.com are talking about rental properties.

Vacation Rentals

Nic and I are also talking about the popular trend of buyer short term rental properties near Disney.  There are literally entire neighborhoods of all short-term vacation rentals.  These homes are typically newer homes that are at least 4 but up to 6 bedroom homes with pools, that allows entire families vacation together near the parks and reduce their housing costs.  We cover several aspects of these types of properties.

Wholesaling Real Estate

It seems like everyone is now selling some course about wholesaling real estate. 
Every corner now seems to be littered with “I Buy Homes for Cash”.  But I get a lot of calls from people that bought a course and have not been able to make any money.  Either for lack of effort or the course made false promises to them, the failure rate seems really high.  There is no “get rich quick” methods, and if there was they probably would not be selling a course about it.  While I do think wholesaling is a good way to make some money it is neither cheap or easy.  You are essentially starting a marketing business.  You are marketing from sellers and buyers.  Don’t believe the hype..

Episode 78: Secrets of the 1031 Exchange

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Secrets of the 1031 Exchange

My guest David Foster from ERG1031 gives us the details about Dave fosterhow to use this section of the tax code to defer tax liability.

  • What is a 1031 Exchange?
    • A 1031 exchange refers to the section of the tax code that allows you to sell a property and roll up the profits into a “like-kind” exchange and defer the tax liability until a further date.
  • What’s the benefit of a 1031?
    • You can literally save millions of dollars in taxes over a real estate investing career.
  • How do you start a 1031?
  • Perameters
    • Starts with the sale of a property
    • Intermediary has to be in place
    • Client must produce a list of potential replacement properties with in 45 days.
    • 6 month time to close on the next property
  • What is a “like-kind” property
    • investment property for nearly any kind of investment property.  NOT PRIMARY RESIDENCE.  You can exchange a single family or several for a commercial or multi-family property.
  • You MUST purchase as much real estate as you sell COST wise.. Does not matter if you change one property for thee or more.  The import part is the dollar value amount.

This system only works for buy and hold investors.  You should hold for at least a year before you try to do a 1031 exchange.  This method has been used buy rehabbers when they rent the property for a period of time after the rehab, then after a period of time they do an exchange.

Now if you can use this method if you hold the properties for you life span, when the properties are inherited by your heirs they will not have to pay the deferred taxes.

You can have as many 1031 exchanges as you like.  You must “intend’ to hold the property for “productive use” as an investment, but there is no set time period when you can do a 1031 exchange.

Here is Dave’s contact info

Dave Foster || Phone 850.889.1031 || fax 303.496.1031

Corporate Office 303.789.1031 || dave@erg1031.com

Exchange Resource Group || www.erg1031.com

 

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Episode 47: Renterup.com : Automating Your Properties

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Time to Automate Your Properties!

Have you see renterup.com?  This awesome service has be developed by a landlord for landlords.  Renterup.com allows you to receive the rent payments online for your tenants.  Stop running back and forth to the mailbox and collect the rent automatically.

 

Automate Your Service Calls

Renterup.com also allows your tenants to make service calls online.  This will also allow you to keep a record of the maintenance calls to a particular property.  This eliminates the back and forth with your tenants.

Allow Tenants without Bank Accounts to Pay Online!

Renterup.com has a new service called Paper or Plastic that allows your tenants that do not have a bank account to pay online.  This service gives the tenants a card they can scan at several national chain stores and the store will collect the rent payment and deposit it in your account.  Pretty Sweet!!