Author Archives: Josh McIntire

3 Hot Tips to Help Make Buying Your Dream Home Come True

Today, buying their dream home, for many people, seems to be a goal that is harder and harder to reach. The biggest obstacles most give for not being able to do, far more frequently than any other reason, is the difficulty they face trying to save up enough money for their down payment. There always seems to be something that comes up and stops you from putting money into your “buy our dream home fund.”

Next on the list is poor credit scores, which many labor under the concept that they need a full 20% or more to buy and that they must have a credit score in excess of a 700 to secure a mortgage. While the reality is that you can buy a house with less than 5% for a down payment and with credit scores under 640. Here are three things you can do to ensure you are ready to buy your dream home.

1. Auto Payments to Your Savings Account

For many of us, trying to put money in savings each payday manually can be challenging. There is always something that seems to eat up your money before any of it makes its way into your savings account. The less money that gets funneled into your savings, the longer it is going to take you to reach the goal you have set for your down payment. Whether you have direct deposit and split a percentage of your pay to be automatically deposited in your saving account or you have your bank do so. Because you never actually “see” this money, you are less likely to miss it, and your savings account is going to grow more quickly.

2. Create a Good Credit Record and Keep It That Way

One of the things most mortgage lenders look for when they pull your credit report (more than the score), is your payment history. If you have a lower credit score from a previous credit issue, but your payments have been kept current for an extended period, this will show the lender you have become more stable and responsible. In which case they will also see that your credit score has been slowly recovering, yet another important detail lenders consider. Keep making your payments on time and try to keep your credit balance less than 30% of that which is available to you.

3. Try Living On a Budget

If you are serious about buying a home, you can start by creating a budget that cuts down on your current bill load. Use the extra money living on a budget can be put towards paying down your current bills. Try cutting back on things like going out for meals, buying a new car when your current one is still serviceable, or instead of going on a vacation, consider a stay-cation instead. The more you are willing to cut back on your current spending habits, the more you can funnel into your rapidly growing “buy our dream home fund.”

10 Hot Tips for Making Your House Feel “Homey” to Potential Buyers

There are many tricks and tips to help you prepare your house for showing to potential buyers. Many seem to focus on curb appeal, which after all is the first thing buyers see as they pull up to your address. But once your potential buyer gets out of their car and comes through the front door, what they see next will either seal the deal or turn them away. Here are ten hot tips for preparing your house to receive those in the market to buy.

1. Keep It Clean

If your buyers walk into a dirty house, it’s an instant turn off. Rather than being able to picture themselves living in the house, they are too distracted by dirt, grime, dust, and so forth. Go through your home and make it sparkle.

2. Avoid Empty Rooms

If you have a spare bedroom that has been used for storage, clean it out and turn it into a room with purpose. Put a spare bed in it or perhaps a desk and office chair. Doing this makes it much easier for buyers to see the room as a useful space.

3. No One Lives In the Dark

Open all blinds and curtains, turn on the lights, and make your home look bright and appealing. Dark rooms look gloomy and smaller than they actuallyare.

4. If It’s Broken, Fix It

One thing you can count, if you have anything that is broken like a faucet that drips, drawer pulls, or cabinet handles missing a ceiling fan that makes too much or doesn’t work at all, or anything else, buyers will see it. This will encourage them to offer you less than your asking prices.

5. Clean Out the Clutter

If you have to, rent a storage pod, but get rid of the clutter, thin out your closets, pare down your pantry. The idea is to give the impression of space and show buyers how much room there is.

6. New Carpet, New Paint

Unless your carpet is less than a couple of years old and looks brand new when professionally cleaned, replace it. It doesn’t cost much to paint the interior walls with a fresh coat of neutral colored paint. These are two of the best things you can do to make your home more attractive to buyers.

7. Keep Your Kitchen Organized

If you have appliances on the counters you don’t use, find a place to store them out of sight and make sure you clean everything.

8. Take Out the Trash

No matter where you have trash bins in your home, such as in the kitchen, bathroom, bedrooms, andoffice, be sure you empty them all before you show your home. The same applies to dirty laundry, put in a closed hamper or find somewhere to hide it.

9. Oil Those Hinges

If you have doors with squeaky doors, including closets, room doors, and cabinets, take five minutes out to spray a little WD40 on them. Not only will this quieten things down, but it will make them operate more smoothly.

10. A Bright Idea

Go through yourhouse and make sure all the light bulbs and switches work. It might not be a bad idea to replace the bulbs with new ones. The last thing you want is for a buyer to turn on a light that doesn’t work.

To Repeat! You Do Not Need to Wait Until You Have a 20% Down Payment to Buy a House

One of the most common reasons given by those who continue to rent when they want to buy a house of their own, is they continue to labor under the impression they cannot qualify for a mortgage until they have at least 20 percent of the cost of the house in savings for a down payment. However, in an age when rents keep going up and eating into the budget, the harder it is for a renter to put anything away in savings and certainly not enough to hit that magic “20%” they think isrequired.

In a study called “Barriers to Accessing Home Ownership” published by The Urban Institute, Freddie Mac, and Down Payment Resource, approximately 39% of renters labor under the mistaken belief that you need a down payment of 20% or more. The same report showed that 30% of current homeowners are also under the same impression.

The same study concluded that only 12% of renters and 13% of current homeowners were aware that there are multiple low percentage down payment programs that exist. When you stop to think about these numbers, they show that thousands of people continue to rent facing a constant uphill battle to scrape even a small amount of money together to go into their “buying our house” savings account.

You Would Not Believe How Low It Can Go

The “It” we are talking about in this case is the down payment. While so many continue to believe the 20% myth, others are cashing in on the opportunity to finally get out of the rental trap and into “home of their own” with down payments far below this figure. In 2018 the average down payment nationwide was only 5%.

That’s right only FIVE PERCENT! This means there are a lot of people out there who continue to pay their rent every month. In essence, if you are paying rent, you are paying your landlord’s mortgage when you could be paying your own and building equity at the same time. More than this, in many cases your monthly mortgage payments could be lower than your current rent.

There are two problems with continuing to rent. First you are paying some else’s mortgage. Second and one of the most common reasons given for not being able to hit the mythical 20%, is that the cost of living is going up faster than most people’s paychecks. With this in mind, many would be homeowners will never reach their goal. Research shows that more than 45 million “Millennials” are in a position to buy a home rather than renting one based on their income, credit, and current debt load.

If you are among those are planning to buy a new home within the next five years, the best thing you can do for yourself is to schedule a meeting with your local real estate professional. They can go over the numbers with you, check your credit scores and determine your ability to find a mortgage with far less than 20% for your down payment. You might be closer to your dream home than you ever imagined.

Who Reads the Lease Anyway?

You’ve run the credit and background checks, yoursoon to be new tenants passed with flying colors. They have all deposits in the required form, the month’s rent, and any other fees such as pet fees are covered. The only thing left is for the lease to be signedby all parties involved right? While the lease does need to be signed, there is one more crucial thing that must be taken care of. One that far too many landlords and property managers tend to let slip by.

No One Reads Their Lease

There you have it in a nutshell; if you don’t sit down with your new tenants and go over the lease clause by clause, it will likely end up in the bottom of a drawer somewhere completely forgotten. Those who are guilty of doing this will often tell their new tenants to read the lease at their leisure and contact them if there are any questions or issues.

No matter what state you have property in, there are certain landlord/tenant laws that cover things like the amount of security deposit you can require and how long you have to return any portion due to the tenant. But beyond this any “personal preferences” such as whether or not to allow smoking or the use of marijuana (legal in California now) inside your property, whether you will allow your tenants to have pets, or if you allow your tenants to have water beds (yes, people still have waterbeds).

You Dictate the Terms

When you are the property owner, it is to no one else but you as to what you will and will not allow to take place in your rental properties. But here’s the rub. If you don’t put it in black and white on your lease and make sure your tenants read and acknowledge that they have done so, you have no one else but yourself to blame. Your tenants are not mind readers, and unless you make it so, most will never read your lease either.

To make matters worse, if you don’t put something you don’t want to happen within your rental property on the lease such as “No parking on the front lawn!” you have no legal recourse beyond asking your tenants not to do so after the fact.

Put It All In Writing

No matter how silly something might seem such as don’t park your car on the lawn or no target practice in the back yard. If it is something you do not want occurring at your rental property, you need to put in the lease and ensure not only that your tenants read it, but that you go over it with them to ensure they understand their limitations.

Finally, with each clause in the lease the tenant reads, be sure to have each person who is signing the lease initial next to the clause to acknowledge they have read and understood it. This way should there be a problem; you have proof that they knew the rules outlined in the lease. It doesn’t take that much time out of your day to be this thorough with each of your new tenants, but doing so could save you from significant problems down the road.

Spring Has Sprung Time to Buy Your Next House

Here in sunny Southern California spring has definitely arrived. The flowers are blooming, the grass is starting to look shaggy and in need of mowing, and it’s the perfect time of year to go shopping for a new home. What makes this spring the right time to go house shopping? Consider these four excellent reasons to go house shopping soon:

1. Prices Are Only Going to Go Up

Housing prices have been steadily rising for quite some time, in fact from Jan 2018 through Jan 2019 the average increase in prices was approximately 4.4%. In a report issued by CoreLogic, prices are expected to increase by 4.6% by Jan 2020. This trend is likely to continue for the foreseeable future as demand continues to outstrip supply. The longer you wait, the more you will end paying.

2. Mortgage Rates Are On the Rise

In the most recent report issued by Freddie Mac dated Mar 18, 2019, it was noted that the current 30-year fixed rate mortgage stood at 4.31%. This is the lowest it has been since February of 2018, and it’s not expected to stay this way for long. In fact, leading experts from Fannie Mae, The Mortgage Bankers Association, the National Association of Realtors, and Freddie Mac all say that by this time next year rates will have gone back up. Every increase in the mortgage interest rates will affect both your monthly payment and the final payoff amount.

3. You Are Paying Someone’s Mortgage

No matter whether you choose to continue renting or decide to buy a home, the one thing you need to understand more than anything else is that in either case, you will be paying someone’s mortgage. That is barring the possibility that you have found somewhere to live rent-free like with your parents. If you are renting, you are helping your landlord pay their mortgage and build equity in their property. On the other hand, investing in a home of your own means paying off your mortgage while at the same time building equity in your property that you will access to at a later point in your life. This begs the question, “Who do want to help build equity in their property, yourself or your landlord?”

4. It’s Time to Make a Bold Move

The final “cost” of your home will be calculated using two numbers: the initial price of the property and the interest rate you are paying. It’s a little more complicated than this, but these are the most important numbers. And beyond the current “blip” in the interest rates, both of these numbers are only going to keep going up. If this isn’t a good enough reason all on its own, keep in mind whose equity you want to build.

Then, of course, you need to consider the reasons why you are considering buying a house. In most cases,buyers are looking for safe neighborhoods to raise a family. Some are looking for a place they can renovate or modify to suit their needs and numerous other reasons. If you buy a home this spring instead of waiting, you could be getting a lot more house for a far better price— justsomething to think about.

Wondering Why Your Rentals Aren’t Attracting More Millennials?

Millennials are those in their 20s and 30s, of which there are over 88 million in the U.S. This group is rapidly becoming the largest segment of the rental community. In part, this is due to the economy they face, but also their access to and acceptance of technology as part of their everyday lives. Given this, if you want to attract your share of the Millennial market, you need to offer what they are looking for.

Technology

The Millennial crowd has grown up with technology, from computers and the internet to smart technologies and artificial intelligence. Today, they prefer to take care of many routine tasks only online via computers or apps on their smartphones. Most use text and email as their primary form of communication.

They want high-speed internet and WiFi services that can be accessed throughout their homes. If you have a multi-family unit, the tenants want Wi-Fi access throughout the complex, especially in common areas like the pool, hot tub, fitness, and community rooms. It won’t cost that much to invest in the necessary equipment to do this, but it is one smart step in the right direction.

Install USB wall outlets; Millennials rely on an incredible array of electronics, all of which run on batteries. Adding USB outlets is another inexpensive upgrade you can make that will make a big impression on the younger renter.

Going Beyond Technology

Millennials are a very social and ecologically minded group. If you have multifamily dwellings like apartment complexes, consider adding a community garden or two and outdoor gathering areas. Gas grills during the warmer weather is a great way to bring people together. If you are in the market for new property, consider looking for those in areas where there are stores where the Millennial crowd shops.

Look for stores like Trader Joe’s, Whole Food Market, vegetarian and vegan restaurants, artisan stores, festivals, and the like. These are huge draws for the generation that has started to invest heavily in protecting and restoring the planet. The more Millennials feel as though they are part of a vast, thriving community, the more likely they are going to stay in your place.

A Last Word About Technology

Along with everything else technology brings with it, the one thing you can to do that is likely to attract more Millennials, is to create an online rent payment portal. Most property management offices today will not accept cash for security reasons, and checks have become a thing of the past. An online payment portal is not overly expensive to set up and maintain. But if all your tenants have to do is log on via a computer or smartphone app to pay their rent, you are sure to attract the younger crowd.

Along with making it easier for your tenants to pay their bills, having an online payment portal has another advantage. Your tenants are far more likely to pay their rent on time every month, and the software makes it much easier for you to see who has and hasn’t paid their rent. A win-win situation for everyone. Attracting more Millennials isn’t that hard, you just have to make sure you and your properties are ready to provide what they are looking for.

Tips for Keeping Rental Property Maintenance Costs Low

As any rental property owner can tell those thinking about investing in this market, it requires a continuing financial investment for as long as you own the property. Routine maintenance, occasional upgrades, full remodels, previous tenant damage, they all put a toll on your finances over time. While certain expenses are unavoidable, smart investors know how to maintain the perfect balance between maintaining the upkeep on their properties and bleeding money continuously. Consider these tips to help keep your rental property maintenance costs down.

Respond to Maintenance Calls Promptly

It’s easy to put off simple repairs, but this is by far the wrong thing to do. First, it irritates your tenants, leading to potential vacancies. Second, the longer you let a problem go, the bigger and more expensive to repair it may become. Fast response to every call, no matter how small the problem may be, is an excellent way to help keep your costs low and your tenants happy.

Be Proactive in Your Spending

It might seem counterintuitive to spend money on upgrades and repairs when you are trying to find ways to save money. But it is, in fact, an excellent way for you to save. Consider this: A new stove will cost you $500 (just a number) up front, but throughout the next five years you must pay for four after-hours maintenance calls @ $200.00 each (or more). In five years, you will have spent $800.00 or more on service calls, after hours fees, and parts. During this same time,  your tenants have been subjected to a stove that never really seems to stay working. Suddenly, that $500.00 stove isn’t so expensive.

Updating the fixtures is an excellent short-term investment with a long term-payback. Installing simple things like WiFi thermostats, voice-activated outlets, and light switches is a good example.These items may require a moderate investment, but when you add them to your rental property along with upgraded appliances, you could increase the rent. Not only will this help cover the cost of your short-term investment, but the return on your investment continues.

Plan for Future Expenses

Anytime one of your rental properties has a maintenance issue; you need to have the money available to pay for the repairs on hand. From a simple appliance repair to a water heater that decides to explode in the middle of the night, issues like these and more are something you will deal with at some time. Routine maintenance can help reduce the number of occurrences; there isn’t a way to eliminate them entirely.

You need to create a savings account that is strictly for maintenance, repair, and upgrade costs. This will help keep you from being stuck with a hefty repair bill and no idea how you are going to pay for it.  Along with this, it is vital that you find and keep excellent tenants. To do this, you need to stay on top of maintenance and repairs. It is much easier to invest a little to keepa great tenant than it is to deal with a long-term vacancy.

Quick Things You Can Do Over the Weekend to Improve Curb Appeal

If you are putting your home on the market, making sure you take care of what prospective buyers see first. Also known as curb appeal, it’severything the buyer sees as they are sitting in front of your home. The right curb appeal will send prospective buyers to the bank; the wrong appearance will send them packing. Here are a few tips for small things you can do over a weekend that can make a big difference.

  1. Clean It Up

One of the easiest and least expensive things you can do to improve your home’s curb appea lis to spend a weekend going through the yard cleaning it up. Mow the grass, trim the bushes and any hedges, get rid of the trash, and use the hose to wash down the sidewalks and driveways. If the outside of the property is grimy, you can rent a pressure washer for under $100 and use it to clean the walls, avoid windows and the caulking around them. And never use a power washer on the roof. Use glass cleaner on the windows; it works far better than the pressure washer.

  1. Touch Up the Trim

You don’t need to paint the whole house, but you can certainly paint the trim, window and door frames, and shutters. It will make a huge difference in how your home looks from the street.

  1. No Shutters

If your home doesn’t have shutters, they don’t cost much and are much easier to install than you might think. When you paint them to match the trim, they are going to make your home pop from the street.

  1. About That Front Door

An ugly front door will turn more buyers away than you can imagine. You don’t have to buy a new door, sand the one you have down, give it a fresh coat of paint. Add a set of decorative metal house numbers. During the right season add a wreath if appropriate.

  1. No Numbers on Your Door

If you don’t want to put your house numbers on your door, consider these easy ideas:

  • Plant a post in the ground with a planter hanger and put the numbers on the post.
  • Paint the number on the vertical riser of a front doorstep.
  • Paint the number on the curb in front of your home.
  1. New Outdoor Light Fixtures

If your outdoor light fixtures are a little dated and not looking their best, go ahead and replace them. Alternatively, you can spruce them up with a fresh coat of paint to save a little money.

  1. It’s the Little Things That Make the Difference

In creating curb appeal for your home, as in all things in life, it’s the little things that make the biggest difference.

  • A new mailbox or at least paint the old one.
  • Add a few flower boxes with blooms if the season permits.
  • Use small sections of fence to hide the air conditioning unit, your trash and recycling containers, and your hoses.
  • Consider planting a couple of new flowers and trees

All these items are simple, take less than a weekend to complete, and are relatively inexpensive. But despite this, they can make a huge difference in how fast your home sells and how much it sells for.

Should You Consider Affordable Housing as an Investment in Your Future?

One of the first words of advice that should be given to any newbie real estate investor is to decide on what segment of the market they are going to focus on and stick with it. One often overlooked investment area is that of affordable housing. Those most often rated as B or C properties.

Why Go This Route?

There is any number of good reasons such as the desire to help others in your community to achieve the American Dream of homeownership. One thing to look at here is that while unemployment is at a historical low-point according to the government, the average income here in the U.S. has not increased.

To make matters worse, the gap between the poor and rich has only become wider. What middle class is left is under siege and is slowly being squeezed into the upper class (only a small percentage) or is edging closer to the poverty line (the larger percentage). From this, it only makes sense to invest in affordable housing as demand is only likely to increase in the coming years.

The Supply is Limited

As you have probably noticed if you have done any research into affordable housing, you can’t help but have noticed that supply of this type of home far outweighs the number of available properties. It is easy to see where affordable housing properties might make an excellent investment vehicle. This becomes even more obvious when you look at the potential for increased rents (within reason based on the locale where you are investing).

On top of this, while there is plenty of new construction going on in towns and cities all over the country, not much of it is affordable housing. Instead, most developers are concentrating their efforts on B+/A grade properties with luxury features and amenities. In most cases, these projects are backed by large investment groups with lots of capital to spread around. For investors like this, affordable housing is simply not feasible as it doesn’t typically offer the ROI needed to make the project successful.

It’s the Cycle

Real estate markets tend to run in cycles, and current economic indicators say that the market is closer to the top of the cycle than it is to the bottom. Even if there is a downturn in the market (and there always is), the affordable housing market should continue to remain stable. Although only a fool would attempt to predict the future, it is safe to assume that when the inevitable downturn does come, it will hit the upper-income bracket as the prices fluctuate.

The luxury housing market is always the first to be affected by any variances in the market. On the other hand, the demand for affordable housing tends to remain the same, no matter what the market is doing. Invest carefully, renovate as needed, and let your tenants know you care. In doing so, not only will you be helping a community by providing affordable places to live, but you are all but guaranteeing yourself a steady income.

Not All “Disqualifiers” Should Stop You from Accepting a Tenant

If you have been a landlord for any period of time or even if you are just getting started, you may have already made your decision as to what does and doesn’t constitute a valid reason to deny a tenant’s application. But, are your rules cut and dried or is there a little bit of wiggle room built into your decision-making process.

It’s easy to decline every application based on a set of rules, and while this will most likely result in a string of good tenants, it may also cost you some of the best tenants you have ever had.  Consider these thoughts:

Three Vital Things to Look At

  1. Verified Income– The applicant should be making at least 2 1/2 to 3 times the monthly rent. The idea behind this being that this should leave them with enough money to pay the rest of their bills. Be sure you contact the employer to verify employment and the amount of income claimed. It’s easy to lie or produce fake paystubs; one phone call can typically provide the proof needed.
  2. Record of Evictions– Most landlords don’t want to rent to anyone with an eviction in the past, for obvious reasons. Yet,have you stopped to consider why the person has that eviction on their record? Maybe it was a mistake, and a simple call to their previous landlord will clear it up. It is possible they moved out, but their landlord processed the eviction paperwork anyway (it happens more frequently than most people know). Take the time to talk to the applicant and find out what happened; it could make all the difference in the world in making your decision.
  3. Criminal History– The average landlord sees any applicant with a criminal background to be unacceptable. Yet, what if their criminal record is from decades ago or for something simple, you might want to reconsider based on the rest of their application. Of course, a major crime at any point is usually a deal breaker.

Two Less Critical Issues

  1. Credit Scores– Far too many Americans now suffer from poor credit scores, often through no fault of their own. In many cases, recent years of recession forced many into foreclosure, losing their credit cards, repossessions of things like cars and more. Just because a person has a less than perfect credit score is not a reason to deny their application. Here again, talking to the applicant may explain why their credit scores are low, making it possible for you to grab a great tenant that no one else is willing to rent to.
  2. Criminal History Revisited– Let’s take a closer look at criminal records. The best thing you can do is talk the person and have them explain what happened. You can also pull the court records for the case (they are a matter of public record). For example, Jack was arrested and convicted of marijuana possession 20 years ago. This conviction will show up on his records until the day he dies, but is this a good reason to deny his application? Think about all those you may have rented to in the past who did the same thing when they were young but never got caught?

Be willing to work with your applicants; youmay find that in doing so you open yourself up to a much broader range of tenants. Many of whom may prove to be the best tenants you’ve ever had. Food for thought, just be sure you do your “full” due diligence before declining or approving every applicant.