By Victor Hairapetian, Attorney
Question to Victor: A 60 day notice that I served ends on the 15th of the month, I know I am only suppose to receive 15 days, but the tenant paid the whole month, what should I do?
Victor’s Advice: This is an area that most landlords easily confuse. You may demand and accept rent that covers through the 15th, however you should not accept a check that includes any amount beyond that final day. This means that you should not accept a month’s check, and then offer a refund or credit since the acceptance of the payment alone can invalidate the notice. The simplest and clearest solution is to compute what is due, and return the original check to the tenant and ask that they replace it with the amount you computed.
Question to Victor: Am I responsible if my tenant’s dog bites someone or another tenant at the property.
Victor’s Advice: The answer to this question is too detailed for this article, and California premises liability law is still evolving, however keep in mind that the primary consideration that will be taken into account is your knowledge or reasonable opportunity to know of the likelihood that the animal is a danger to others. Certainly, the type of dog and its prior history in the property will be relevant to such considerations.
Question to Victor: Can I serve a tenant with a 3 day notice for a property in REAP.
Victor’s Advice: Yes, you may serve the tenant the amount that REAP has set, but be sure to check with REAP to see whether the tenant has paid REAP directly. For those readers who are unfamiliar with REAP, it constitutes the “Rent Escrow Account Program” in Los Angeles that regulates rents for units deemed to be in substandard conditions.
Question to Victor: Is there any way I can stop a tenant from just getting up and leaving a unit in the middle of their lease.
Victor’s Advice: No. A tenant may vacate your unit at any time, however you still have rights to sue for the breach of a lease including all of the future rent you will be losing until a replacement is found.
Question to Victor: My landlord hired a lawyer who keeps sending several threatening letters to me alleging things that are not true and scaring me that he intends to evict me, what can I do.
Victor’s Advice: You should immediately respond with advising the landlord and his
attorney that you dispute all of the allegations and to instruct them to
cease the harassment. As a tenant you also have rights, and should
not be bullied just because the other person has a lawyer. You
should consult with a lawyer so a response can be prepared that
assertively addresses their threats and gets your message across.
Victor’s Advice: Someone told me that I have to pay the interest on the security deposit to the tenant even though the building is in rent control, is this right.
Question to Victor: Sounds like your tenant’s giving you advice, it does not sound right since you are not in rent control.
Question to Victor: What is the consequence of demanding rent above the MAR (maximum allowable rent) in a rent control jurisdiction.
Victor’s Advice: A landlord who demands rent in excess of the MAR may be held liable for the excess charged, interest, attorneys fees, costs, and even punitive or treble damages. Definitely not a good idea.
Question to Victor: A judge dismissed my eviction since I was late to court, can he do this.
Victor’s Advice: Yes. This can be easily corrected and your case will be reinstated if the reason was due to your inadvertence or excusable neglect. See a lawyer.
Quote of the Month: “..I am moving by the end of the month and do not want to cause
any problems..”
Victor Hairapetian is an attorney licensed to practice law, and has conducted thousands of evictions in California. Feel free to submit your questions to him, and have them answered in the Apartment Management Magazine, or otherwise feel free to contact his office for any questions at (818) 500-9881 or email him at victor@lawandadvice.com.
Wednesday, July 30, 2008
Friday, July 25, 2008
US foreclosure filings more than double in 2Q
Taken from Forbes
By J.W. ELPHINSTONE
NEW YORK -
The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released Friday.
Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, Irvine, Calif.-based RealtyTrac Inc. said. That's up 121 percent from the second quarter of 2007.
Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.
Foreclosure filings increased year-over-year in all but two states, North Dakota and Alabama.
Nevada, California, Arizona, and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.
Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That's nearly seven times the national average.
CLICK HERE to view full article
By J.W. ELPHINSTONE
NEW YORK -
The number of households facing the foreclosure process more than doubled in the second quarter compared to a year ago, according to data released Friday.
Nationwide, 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households, Irvine, Calif.-based RealtyTrac Inc. said. That's up 121 percent from the second quarter of 2007.
Soft housing sales, declining home values, tighter lending standards and a sluggish U.S. economy have left strapped homeowners with few options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't refinance into an affordable loan.
Foreclosure filings increased year-over-year in all but two states, North Dakota and Alabama.
Nevada, California, Arizona, and Florida continued to clock in the highest foreclosure rates. One in every 43 Nevada households received a filing during the quarter.
Cities in California and Florida accounted for 16 of the worst 20 metro foreclosure rates. Stockton, Calif., had the worst rate, with one in every 25 homes in the town receiving a foreclosure filing. That's nearly seven times the national average.
CLICK HERE to view full article
Thursday, July 24, 2008
The Latest on Vacation Homes and Section 1031
I have a vacation property at Lake Tahoe that I’ve owned for several years. My kids have grown and aren’t interested in going there for vacation. Also, I’ve been too busy with my business to get up there much over the past few years. So I think that it’s time to sell it, but I have not placed it on the market yet. I think it will sell for about $800,000. My tax basis is $100,000, so I’m looking at about $700,000 of gain, which means approximately $105,000 of federal taxes and another $65,000 of California state taxes. Can I exchange the home under Section 1031 to defer the $170,000 in taxes?
A property must be held “for investment or in a trade or business” to be eligible for gain deferral under Section 1031. “Investment” means primarily for appreciation and not for personal use. Therefore, the Lake Tahoe property will only qualify if you hold it primarily for appreciation.
You will want to know what “primarily” means, of course. The Tax Court addressed this issue in 2007 in the case of Moore vs. Commissioner. The Moores owned a vacation home in Georgia. The family used the property for recreational purposes two or three weekends per month from mid-April to Labor Day each year. They would also visit the property intermittently during the “off season” to perform maintenance and other caretaking duties. The Moores moved to a new primary residence farther away from the vacation home and weren’t able to visit it. They decided to exchange it for a closer vacation home. They claimed an exchange on their tax return, stating that the vacation homes were held for investment. The Tax Court disallowed the exchange because the Moores’ primary intent was personal enjoyment and not investment. The Moores never rented out either vacation home, or even attempted to rent them out.
I guess that I should compare myself to the Moores. I’ve used the Lake Tahoe property about 15 to 20 days per year over the past few years. I have not rented it out other than to friends and family members. I did not want renters that I did not know. I’ve heard horror stories about irresponsible renters who caused thousands of dollars of damage. The rentals to friends and family amounted to about 10 days per year. I’m not sure if the rent I charged was fair market. I never checked for comparable rentals, although I’m sure other properties in the area are rented.
So you have issues similar to the Moores. While they did not rent their properties out at all, your rentals are minimal. You need to be concerned that the IRS might assert that you held the property primarily for personal purposes. Let’s look at other factors that go to the issue of investment intent. How have you treated the property on your tax return? The Tax Court pointed out that the Moores did not have investment intent because they did not claim depreciation or investment expenses on their tax return, and they deducted the interest on the mortgage as home mortgage interest. If you have taken similar reporting positions, you would have difficulty in an audit. I would recommend that you wait to sell the property and try to come within the IRS safe harbor for vacation homes. You have a lot of tax dollars at stake.
That seems wise. I’m not in a hurry to sell and I want to defer the taxes. What is an IRS “Safe Harbor” and what are the requirements to meet it?
This IRS recently issued Revenue Procedure 2008-16, and if you meet the requirements of this revenue procedure, the IRS will not challenge whether your vacation home qualifies as property held “for productive use in a trade or business or for investment” under Section 1031. That’s why it is called a “safe harbor”. Under the safe harbor, your Lake Tahoe property will qualify as for an exchange if it is owned by you for at least 24 months immediately before the exchange. You’ve met that requirement. However, in each of the two 12-month periods immediately preceding the start of the exchange: (i) you must rent the property to another person at a fair rental for 14 days or more, and (ii) your personal use of the property cannot exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the property is rented at a fair rental.
No Problem! I’ll just rent it to my kids for 14 days in each of the next two years, and limit my use to 14 days total. That sounds too good to be true. Will that get me
in the safe harbor?
That is too good to be true. The IRS is not that kind and gentle. The 14 day rental must be to unrelated parties. You are deemed to have used the property for personal purposes if used by you or your family members. So rentals to your kids, even at fair market rent, count as personal use by you and not towards the minimum 14 day rental requirement. Family members include your children and grandchildren, your siblings, and your parents. You can however rent to friends, in-laws or extended family members. You also can’t “trade” rentals with someone under a reciprocal use arrangement, even if rent is charged. Likewise, if you were to co-own the property with another person, you can’t rent to each other. For example, if you and your friend each owned a 50% interest in the property, you can’t meet the 14 day rental test by renting to each other. In short, you must rent the property to non family members for fair market rent. Any rental at less than fair market rent is counted as personal use by you too.
If you have a buyer in mind for the property, you may rent it to the buyer for the next two years and give the buyer an option to purchase the property with a reasonable earnest money payment too.
I have some friends that I could rent it to for 14 days or so. How do I determine what constitutes “fair market rent”? This seems to be an important key in fitting into the safe harbor.
You are correct that it is important. According to the Revenue Procedure, “fair market rent” is determined based on all of the facts and circumstances that exist when the rental agreement is entered into, and all rights and obligations of the parties to the rental agreement are taken into account. You should obtain an appraisal or other evidence from local rental agencies as to the fair market rent, at the time of the rental. Don’t wait till you’ve been audited several years later! Remember that you have significant tax dollars on the line and you want to go into an audit armed with good evidence of fair market rentals.
Don’t forget the other requirement. You and your family members cannot use the property for more than 14 days per year, or 10% of the rental days, if greater. This includes rentals to friends at less than fair market rental. I should mention that you may rent the property to your child if he or she uses it as a principal residence (and not a vacation home) and pays fair market rent. You may also be allowed some usage for repairs and annual maintenance, but be prepared to prove that you were there principally for that purpose. Have receipts, pictures, or other evidence of the work done.
This is great! I can apply some of the $170,000 in tax that I’m deferring to the cost of vacations to new places over the next two years. I’ve always wanted to go on a
cruise in the Greek Islands.
Yes, but remember to carefully document the rental to unrelated parties as well as your personal use. If you meet these requirements, the IRS cannot question whether the Lake Tahoe property is held for investment. Also, be sure not to claim the home mortgage interest deduction because it will not qualify since you are not using it for more than 14 days. And deduct the expenses related to the property as investment expenses under Section 212 of the Internal Revenue Code.
What about the replacement property in the exchange? Suppose I find a vacation home that suits my current needs, or would make a good retirement home later? How does the safe harbor work with respect to the replacement property?
You can do the same thing with the replacement property for the two years after the exchange. It will qualify as replacement property if you own it for at least 24 months immediately after the exchange, and, in each of the two 12-month periods immediately after the exchange, you rent it out to unrelated parties for 14 days or more. Like the Lake Tahoe property, your personal use of the replacement property cannot exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the dwelling unit is rented at a fair rental. Generally, all the safe harbor requirements that we’ve discussed for the Lake Tahoe property will also apply to the replacement property.
Kevin A. Williams, President of North 1031 Exchange is currently the Managing Director of the North Wealth Management Company LLC. He has a Bachelor’s Degree in Economics and holds the following securities registrations: FINRA series 6, 7, 24, 63 & 65 and is licensed by the California Department of Insurance. He has allocated his talents to the institutional investment services arena for over 15 years. Kevin can be contacted at North 1031 Exchange, 4667 MacArthur Boulevard, Suite 220, Newport Beach, CA 92660. Toll Free: 866-700-1031 or 949-975-1031 or Kevin@north1031.com.
A property must be held “for investment or in a trade or business” to be eligible for gain deferral under Section 1031. “Investment” means primarily for appreciation and not for personal use. Therefore, the Lake Tahoe property will only qualify if you hold it primarily for appreciation.
You will want to know what “primarily” means, of course. The Tax Court addressed this issue in 2007 in the case of Moore vs. Commissioner. The Moores owned a vacation home in Georgia. The family used the property for recreational purposes two or three weekends per month from mid-April to Labor Day each year. They would also visit the property intermittently during the “off season” to perform maintenance and other caretaking duties. The Moores moved to a new primary residence farther away from the vacation home and weren’t able to visit it. They decided to exchange it for a closer vacation home. They claimed an exchange on their tax return, stating that the vacation homes were held for investment. The Tax Court disallowed the exchange because the Moores’ primary intent was personal enjoyment and not investment. The Moores never rented out either vacation home, or even attempted to rent them out.
I guess that I should compare myself to the Moores. I’ve used the Lake Tahoe property about 15 to 20 days per year over the past few years. I have not rented it out other than to friends and family members. I did not want renters that I did not know. I’ve heard horror stories about irresponsible renters who caused thousands of dollars of damage. The rentals to friends and family amounted to about 10 days per year. I’m not sure if the rent I charged was fair market. I never checked for comparable rentals, although I’m sure other properties in the area are rented.
So you have issues similar to the Moores. While they did not rent their properties out at all, your rentals are minimal. You need to be concerned that the IRS might assert that you held the property primarily for personal purposes. Let’s look at other factors that go to the issue of investment intent. How have you treated the property on your tax return? The Tax Court pointed out that the Moores did not have investment intent because they did not claim depreciation or investment expenses on their tax return, and they deducted the interest on the mortgage as home mortgage interest. If you have taken similar reporting positions, you would have difficulty in an audit. I would recommend that you wait to sell the property and try to come within the IRS safe harbor for vacation homes. You have a lot of tax dollars at stake.
That seems wise. I’m not in a hurry to sell and I want to defer the taxes. What is an IRS “Safe Harbor” and what are the requirements to meet it?
This IRS recently issued Revenue Procedure 2008-16, and if you meet the requirements of this revenue procedure, the IRS will not challenge whether your vacation home qualifies as property held “for productive use in a trade or business or for investment” under Section 1031. That’s why it is called a “safe harbor”. Under the safe harbor, your Lake Tahoe property will qualify as for an exchange if it is owned by you for at least 24 months immediately before the exchange. You’ve met that requirement. However, in each of the two 12-month periods immediately preceding the start of the exchange: (i) you must rent the property to another person at a fair rental for 14 days or more, and (ii) your personal use of the property cannot exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the property is rented at a fair rental.
No Problem! I’ll just rent it to my kids for 14 days in each of the next two years, and limit my use to 14 days total. That sounds too good to be true. Will that get me
in the safe harbor?
That is too good to be true. The IRS is not that kind and gentle. The 14 day rental must be to unrelated parties. You are deemed to have used the property for personal purposes if used by you or your family members. So rentals to your kids, even at fair market rent, count as personal use by you and not towards the minimum 14 day rental requirement. Family members include your children and grandchildren, your siblings, and your parents. You can however rent to friends, in-laws or extended family members. You also can’t “trade” rentals with someone under a reciprocal use arrangement, even if rent is charged. Likewise, if you were to co-own the property with another person, you can’t rent to each other. For example, if you and your friend each owned a 50% interest in the property, you can’t meet the 14 day rental test by renting to each other. In short, you must rent the property to non family members for fair market rent. Any rental at less than fair market rent is counted as personal use by you too.
If you have a buyer in mind for the property, you may rent it to the buyer for the next two years and give the buyer an option to purchase the property with a reasonable earnest money payment too.
I have some friends that I could rent it to for 14 days or so. How do I determine what constitutes “fair market rent”? This seems to be an important key in fitting into the safe harbor.
You are correct that it is important. According to the Revenue Procedure, “fair market rent” is determined based on all of the facts and circumstances that exist when the rental agreement is entered into, and all rights and obligations of the parties to the rental agreement are taken into account. You should obtain an appraisal or other evidence from local rental agencies as to the fair market rent, at the time of the rental. Don’t wait till you’ve been audited several years later! Remember that you have significant tax dollars on the line and you want to go into an audit armed with good evidence of fair market rentals.
Don’t forget the other requirement. You and your family members cannot use the property for more than 14 days per year, or 10% of the rental days, if greater. This includes rentals to friends at less than fair market rental. I should mention that you may rent the property to your child if he or she uses it as a principal residence (and not a vacation home) and pays fair market rent. You may also be allowed some usage for repairs and annual maintenance, but be prepared to prove that you were there principally for that purpose. Have receipts, pictures, or other evidence of the work done.
This is great! I can apply some of the $170,000 in tax that I’m deferring to the cost of vacations to new places over the next two years. I’ve always wanted to go on a
cruise in the Greek Islands.
Yes, but remember to carefully document the rental to unrelated parties as well as your personal use. If you meet these requirements, the IRS cannot question whether the Lake Tahoe property is held for investment. Also, be sure not to claim the home mortgage interest deduction because it will not qualify since you are not using it for more than 14 days. And deduct the expenses related to the property as investment expenses under Section 212 of the Internal Revenue Code.
What about the replacement property in the exchange? Suppose I find a vacation home that suits my current needs, or would make a good retirement home later? How does the safe harbor work with respect to the replacement property?
You can do the same thing with the replacement property for the two years after the exchange. It will qualify as replacement property if you own it for at least 24 months immediately after the exchange, and, in each of the two 12-month periods immediately after the exchange, you rent it out to unrelated parties for 14 days or more. Like the Lake Tahoe property, your personal use of the replacement property cannot exceed the greater of 14 days or 10 percent of the number of days during the 12-month period that the dwelling unit is rented at a fair rental. Generally, all the safe harbor requirements that we’ve discussed for the Lake Tahoe property will also apply to the replacement property.
Kevin A. Williams, President of North 1031 Exchange is currently the Managing Director of the North Wealth Management Company LLC. He has a Bachelor’s Degree in Economics and holds the following securities registrations: FINRA series 6, 7, 24, 63 & 65 and is licensed by the California Department of Insurance. He has allocated his talents to the institutional investment services arena for over 15 years. Kevin can be contacted at North 1031 Exchange, 4667 MacArthur Boulevard, Suite 220, Newport Beach, CA 92660. Toll Free: 866-700-1031 or 949-975-1031 or Kevin@north1031.com.
Myths and Realities of Low Income Housing
by Bryan Wittenmyer
Before I explain what I believe are myths about lower-income housing let me first clarify a few important points. First, low-income landlording, or even regular middle-income landlording is not for everyone. I’m not one of these guys who says everyone should be a professional landlord. A good portion of the population just isn’t cut out to be anybody’s landlord, or even in business for that matter. Landlording of any stripe or flavor is not easy. It just isn’t.
In addition to that bit of negativity let me add this. Landlording, again any type, is not a rapid one or two year process that will liberate you from all of your money troubles or cares of this world. Professional landlording is very similar to being in business: It requires constant vigilance.
Now having taking the gloss off of income property and having lowered your expectation back to earth, let me very briefly and succinctly explain a few big benefits of income property before we get into my myths and realities segment. I’ll list just three benefits, although there are many, many more.
First, owning real estate assets just makes a whole lot more tax sense than buying and selling, although buying and selling has it’s place in the business world. You can grow large amount of capital faster, starting with virtually no cash, with income properties, than with other assets or businesses. And, ten years from now, you’ll be far better off for it.
Second, while developing a cash flow is no easy trick with income properties, it is like any other business or trade, a developable skill. And, this cash flow will come into your mailbox every month, whether or not you work. Furthermore, once properties have all or most of the debt service paid off, you have what I have coined, Perpetual Income. The income stream from a rental asset can literally be maintained for ten, twenty, even thirty years, without expending or depleting the corpus of the asset. At the end of your rental career, or if you just feel like it, you can sell this undepleted body of capital known as the building.
Third, while many consider landlording a lowly or pitiful career, I consider owing income property as one of the top careers, even glamorous. It has a mystique to it that people respect. I occasionally meet old school mates, and I often hear them ask in wonderment, “I hear you own rental properties.” They say it with amazement.
3 Myths
There are countless books on the market explaining rental properties and landlording. The interesting thing is precious few talk about low-income landlording. Almost like it doesn’t exist. The fact of the matter is, and this is big: Most landlords are engaged in at least some form of low-income housing. Doubt me? Ever hear of Section 8 housing? Hmmm. Seems to me that good ol’ Section 8 housing is low income housing by the governement’s own definition. Here’s another zinger: The vast majority of folks who are full-time housing entrepreneurs are involved in some form of lower-income housing.
The truth of the matter is a huge portion of the tenant populace is classed as lower-income, especially when you factor in their net worth. I hang around dozens of landlords, and at least in my little world, these guys have a lot of low-income rentals. It’s the yield.
So, myth number one: Very few investors are involved in low-income housing, except a hardened bunch of “slumlords”. The reality: a good portion of professional landlords are involved in at least some forms of lower-income housing.
Myth number two: Low-income housing is slum landlording; low-income property investors invest in deplorable and bombed out ghettos where few dare to trod. The reality: There are at least 3 levels of lower-income housing, only one of which is blighted, war-zone property (which by the way, I strongly urge you to avoid) . There is an upper level of lower-income areas which is marginally desirable. This is the area where folks will live and stay and pay their rents. So the point is, there are acceptable and relatively safe areas that technically are lower-income, but depending on interpretation could even be classed lower-middle income.
Myth number three: There are no good, low-income tenants; they all trash property, and don’t pay their rent. The reality: While yes, there are some bad tenants in the bunch, even a higher percentage than in middle-income housing, there is a solid core of folks in the lower-income areas who, when managed properly, will pay their rent and even remain in a house or apartment for several years. There is an art and craft to finding these folks, and occasionally you’ll make the wrong tenant selection, but you can find acceptable rental clientele in the right areas.
What Does All of This Mean?
There are housing needs in lower-income areas that can be serviced with minimal to moderate amounts of risk with a very high yield potential. That potential, is cash flow. Secondly, aggressive investors who aren’t afraid to get their hands dirty can at build a cash flow base from which to launch a more upscale rental portfolio. This again is not for everybody. You have to find a comfort level. If any mistake is made, folks buy in too tough of areas. There is a point of diminishing returns in tough areas. It’s all about yield. Don’t even think of messing with lower-income houses unless you absolutely buy at sub-wholesale levels. If the deal isn’t stunningly cheap in terms of price or financing, don’t buy it.
Before I explain what I believe are myths about lower-income housing let me first clarify a few important points. First, low-income landlording, or even regular middle-income landlording is not for everyone. I’m not one of these guys who says everyone should be a professional landlord. A good portion of the population just isn’t cut out to be anybody’s landlord, or even in business for that matter. Landlording of any stripe or flavor is not easy. It just isn’t.
In addition to that bit of negativity let me add this. Landlording, again any type, is not a rapid one or two year process that will liberate you from all of your money troubles or cares of this world. Professional landlording is very similar to being in business: It requires constant vigilance.
Now having taking the gloss off of income property and having lowered your expectation back to earth, let me very briefly and succinctly explain a few big benefits of income property before we get into my myths and realities segment. I’ll list just three benefits, although there are many, many more.
First, owning real estate assets just makes a whole lot more tax sense than buying and selling, although buying and selling has it’s place in the business world. You can grow large amount of capital faster, starting with virtually no cash, with income properties, than with other assets or businesses. And, ten years from now, you’ll be far better off for it.
Second, while developing a cash flow is no easy trick with income properties, it is like any other business or trade, a developable skill. And, this cash flow will come into your mailbox every month, whether or not you work. Furthermore, once properties have all or most of the debt service paid off, you have what I have coined, Perpetual Income. The income stream from a rental asset can literally be maintained for ten, twenty, even thirty years, without expending or depleting the corpus of the asset. At the end of your rental career, or if you just feel like it, you can sell this undepleted body of capital known as the building.
Third, while many consider landlording a lowly or pitiful career, I consider owing income property as one of the top careers, even glamorous. It has a mystique to it that people respect. I occasionally meet old school mates, and I often hear them ask in wonderment, “I hear you own rental properties.” They say it with amazement.
3 Myths
There are countless books on the market explaining rental properties and landlording. The interesting thing is precious few talk about low-income landlording. Almost like it doesn’t exist. The fact of the matter is, and this is big: Most landlords are engaged in at least some form of low-income housing. Doubt me? Ever hear of Section 8 housing? Hmmm. Seems to me that good ol’ Section 8 housing is low income housing by the governement’s own definition. Here’s another zinger: The vast majority of folks who are full-time housing entrepreneurs are involved in some form of lower-income housing.
The truth of the matter is a huge portion of the tenant populace is classed as lower-income, especially when you factor in their net worth. I hang around dozens of landlords, and at least in my little world, these guys have a lot of low-income rentals. It’s the yield.
So, myth number one: Very few investors are involved in low-income housing, except a hardened bunch of “slumlords”. The reality: a good portion of professional landlords are involved in at least some forms of lower-income housing.
Myth number two: Low-income housing is slum landlording; low-income property investors invest in deplorable and bombed out ghettos where few dare to trod. The reality: There are at least 3 levels of lower-income housing, only one of which is blighted, war-zone property (which by the way, I strongly urge you to avoid) . There is an upper level of lower-income areas which is marginally desirable. This is the area where folks will live and stay and pay their rents. So the point is, there are acceptable and relatively safe areas that technically are lower-income, but depending on interpretation could even be classed lower-middle income.
Myth number three: There are no good, low-income tenants; they all trash property, and don’t pay their rent. The reality: While yes, there are some bad tenants in the bunch, even a higher percentage than in middle-income housing, there is a solid core of folks in the lower-income areas who, when managed properly, will pay their rent and even remain in a house or apartment for several years. There is an art and craft to finding these folks, and occasionally you’ll make the wrong tenant selection, but you can find acceptable rental clientele in the right areas.
What Does All of This Mean?
There are housing needs in lower-income areas that can be serviced with minimal to moderate amounts of risk with a very high yield potential. That potential, is cash flow. Secondly, aggressive investors who aren’t afraid to get their hands dirty can at build a cash flow base from which to launch a more upscale rental portfolio. This again is not for everybody. You have to find a comfort level. If any mistake is made, folks buy in too tough of areas. There is a point of diminishing returns in tough areas. It’s all about yield. Don’t even think of messing with lower-income houses unless you absolutely buy at sub-wholesale levels. If the deal isn’t stunningly cheap in terms of price or financing, don’t buy it.
Wednesday, July 16, 2008
In Slowing Economy, Apartment Vacancy Rates Remain Stable
Taken from Multi-Family News
By Anuradha Kher, Online News Editor
New York--Amidst headlines of doom and gloom in the economy, the multifamily industry is holding relatively strong. “Vacancy rates in the apartment sector have been stable in the last three quarters and apartment rent growth in the second quarter of 2008 has seen the strongest gain as compared to all other types of commercial real estate,” Dr. Sam Chandan, chief economist and senior vice resident for research at Reis Inc. said today in a virtual conference hosted by Reis.
“Overwhelmingly and in all parts of the country, buyers are preferring to rent now as a result of which effective rent growth is expected to keep going up. The overall slowdown and situation in the slowing labor market will negatively affect apartments and in some markets, the condo shadow market will compete with the apartment sector with more units coming online,” he said. As a result, asset prices for apartment units have been falling from their peak period to the first quarter of 2008, by 13.3 percent.
Chandan also talked about the ongoing housing crisis, resulting financial troubles, low consumer confidence levels and slowing labor market and then went on to outline how this will affect commercial real estate. He said there will be greater regulatory oversight, more significant intervention in the housing market as is already happening and tighter credit conditions in the housing market.
CLICK HERE to view full article
By Anuradha Kher, Online News Editor
New York--Amidst headlines of doom and gloom in the economy, the multifamily industry is holding relatively strong. “Vacancy rates in the apartment sector have been stable in the last three quarters and apartment rent growth in the second quarter of 2008 has seen the strongest gain as compared to all other types of commercial real estate,” Dr. Sam Chandan, chief economist and senior vice resident for research at Reis Inc. said today in a virtual conference hosted by Reis.
“Overwhelmingly and in all parts of the country, buyers are preferring to rent now as a result of which effective rent growth is expected to keep going up. The overall slowdown and situation in the slowing labor market will negatively affect apartments and in some markets, the condo shadow market will compete with the apartment sector with more units coming online,” he said. As a result, asset prices for apartment units have been falling from their peak period to the first quarter of 2008, by 13.3 percent.
Chandan also talked about the ongoing housing crisis, resulting financial troubles, low consumer confidence levels and slowing labor market and then went on to outline how this will affect commercial real estate. He said there will be greater regulatory oversight, more significant intervention in the housing market as is already happening and tighter credit conditions in the housing market.
CLICK HERE to view full article
COLLECTING LOST REVENUE
Owners and Managers Partnering with
Collection Firms to Recover Lost Revenue
Increasing Profitability and Productivity for Owners and Managers
Owners and managers of multifamily housing properties are increasingly partnering with collection firms specialized in the intricacies of the industry to collect lost revenue. The outsourcing of this function to experts in the industry allows owners and managers to focus on their core competencies while also more efficiently retrieving valuable funds.
Property owners and managers with uncollected rent face diminished revenue of one to three percent annually, which can significantly impact the profitability of multifamily property. This issue often goes overlooked because on the surface it may not seem significant. However, an owner with only 100 units with rent at $800 per month loses nearly $2,400 (at three percent) in a year. When an owner wants to grow his or her business and increase profits by two to four percent annually, a revenue loss of three percent requires an additional five to seven percent in additional revenue to net the original growth goal.
How Big Is The Problem Of Uncollected Rent?
Owners who do nothing to collect past-due rent are leaving money on the table and in turn losing out on additional revenue. Default renters can cost everyone money. While many believe an improving economy will ease this significant issue, recent numbers reveal an alarming trend. For the first time in our nation’s history, Americans’ consumer debt has topped the $2 trillion mark, and billions of dollars are still uncollected, many of which include rent payments. (Source: Federal Reserve Statistics).
Adding to the already difficult issue of increasing consumer debt is the fight against time a majority of owners face. Research shows the longer a debt goes unpaid, the less likely a property owner or manager will be able to collect it. (Source: Collection Agencies Services) Specialized firms who are committed to focusing their time on only the issue of debt collection increase the likelihood of retrieving a portion of the debt, if not the entire amount. With the additional revenue received from successful debt collection, property owners can increase their property value but more importantly their bottom line.
Why Is Multi-Family Debt So Hard To Collect?
An experienced firm specializing in the complexities of multifamily debt will achieve the highest success for owners with uncollected rent. Multifamily debt is very distinct and complex. Debt associated with the multifamily industry is among the most difficult to recover for a variety of reasons:
Resident debtors tend to be more transient; they move and change jobs more often and rarely leave forwarding addresses or phone numbers, so locating them is often the most difficult aspect of the collection process.
Debtors are not homeowners, so there are no easily attachable assets.
A majority of multi-housing debts are disputed; debtors often claim the co-resident is responsible, or that the charges are excessive or arbitrary—usually due to a lack of understanding of the lease agreement. Medical or credit card debts, on the other hand, have minimal dispute rates and are therefore more collectible.
The rent payment is the last thing to go unpaid, because more is at stake (losing shelter). When debtors stop paying for their shelter, they are usually in extreme financial circumstances and are less likely to have the capacity to pay, even if they are willing.
A collection firm must possess the expertise and experience to handle intricate issues surrounding multifamily accounts. Also, proper training is crucial when dealing with this type of debtor, especially if the account has aged. A professionally trained collector becomes efficient at developing excellent problem solving and effective communication skills with which to handle multifaceted accounts. Professionally trained collection representatives must exhibit tact, persistence and an understanding of people’s motivations, which in turn will produce more dollars collected for owners.
If necessary, professional collection firms can take a debtor to court, however this is used only as a last resort. In such a transaction-rich industry, accessing excellent legal advice is an absolute prerequisite for success. Owners who use the services of a specialized collection firm are shielded from any exposure or negative effects of suits.
The Days Of ‘Dialing For Dollars’ Are Long Gone
The modern collection firm uses a sophisticated array of technology, systems, specialized training, monitoring and reporting to deliver maximum results in the least amount of time. A professional firm will have an attorney and compliance officer on staff to ensure adherence to federal and state regulations designed to protect the consumer, like the Federal Trade Commission’s Fair Debt Collection Practices Act (FDCPA). According to ACA International, third-party collection services that use specialized phone systems, computer and software designed specifically for the collection industry, usually are more effective than creditors at collecting payment on delinquent accounts.
An experienced, specialized collection firm relieves property owners and managers of the overwhelming administrative work of debt collections while dramatically increasing profitability. A specialized collection firm should also provide detailed reporting systems designed to help owners and managers make better leasing decisions and assist them from the onset in reducing future bad debts.
When it comes to uncollected rent, an experienced collection firm can assist owners in retrieving as much revenue as possible from residents in default. Property owners who want to increase their efficiency while growing their bottom line will profit from a partnership with a professional collection firm specializing in the multifamily industry.
About the Author
Stephen Sobota is CEO of Hunter Warfield, Inc. and can be reached at ssobota@huntwar.com. Hunter Warfield, Inc., an incorporated affiliate of Pierce Hamilton & Stern, provides debt collection services to clients in a wide range of industries from multi-housing to funeral services to commercial business. Focused on superior customer service and advanced management practices, Hunter Warfield is committed to taking collections to a new level. Through innovative technology and flexibility, we are unmatched at providing comprehensive collection solutions tailored to meet each customer's evolving business needs. More information is available at www.HunterWarfield.com.
Collection Firms to Recover Lost Revenue
Increasing Profitability and Productivity for Owners and Managers
Owners and managers of multifamily housing properties are increasingly partnering with collection firms specialized in the intricacies of the industry to collect lost revenue. The outsourcing of this function to experts in the industry allows owners and managers to focus on their core competencies while also more efficiently retrieving valuable funds.
Property owners and managers with uncollected rent face diminished revenue of one to three percent annually, which can significantly impact the profitability of multifamily property. This issue often goes overlooked because on the surface it may not seem significant. However, an owner with only 100 units with rent at $800 per month loses nearly $2,400 (at three percent) in a year. When an owner wants to grow his or her business and increase profits by two to four percent annually, a revenue loss of three percent requires an additional five to seven percent in additional revenue to net the original growth goal.
How Big Is The Problem Of Uncollected Rent?
Owners who do nothing to collect past-due rent are leaving money on the table and in turn losing out on additional revenue. Default renters can cost everyone money. While many believe an improving economy will ease this significant issue, recent numbers reveal an alarming trend. For the first time in our nation’s history, Americans’ consumer debt has topped the $2 trillion mark, and billions of dollars are still uncollected, many of which include rent payments. (Source: Federal Reserve Statistics).
Adding to the already difficult issue of increasing consumer debt is the fight against time a majority of owners face. Research shows the longer a debt goes unpaid, the less likely a property owner or manager will be able to collect it. (Source: Collection Agencies Services) Specialized firms who are committed to focusing their time on only the issue of debt collection increase the likelihood of retrieving a portion of the debt, if not the entire amount. With the additional revenue received from successful debt collection, property owners can increase their property value but more importantly their bottom line.
Why Is Multi-Family Debt So Hard To Collect?
An experienced firm specializing in the complexities of multifamily debt will achieve the highest success for owners with uncollected rent. Multifamily debt is very distinct and complex. Debt associated with the multifamily industry is among the most difficult to recover for a variety of reasons:
Resident debtors tend to be more transient; they move and change jobs more often and rarely leave forwarding addresses or phone numbers, so locating them is often the most difficult aspect of the collection process.
Debtors are not homeowners, so there are no easily attachable assets.
A majority of multi-housing debts are disputed; debtors often claim the co-resident is responsible, or that the charges are excessive or arbitrary—usually due to a lack of understanding of the lease agreement. Medical or credit card debts, on the other hand, have minimal dispute rates and are therefore more collectible.
The rent payment is the last thing to go unpaid, because more is at stake (losing shelter). When debtors stop paying for their shelter, they are usually in extreme financial circumstances and are less likely to have the capacity to pay, even if they are willing.
A collection firm must possess the expertise and experience to handle intricate issues surrounding multifamily accounts. Also, proper training is crucial when dealing with this type of debtor, especially if the account has aged. A professionally trained collector becomes efficient at developing excellent problem solving and effective communication skills with which to handle multifaceted accounts. Professionally trained collection representatives must exhibit tact, persistence and an understanding of people’s motivations, which in turn will produce more dollars collected for owners.
If necessary, professional collection firms can take a debtor to court, however this is used only as a last resort. In such a transaction-rich industry, accessing excellent legal advice is an absolute prerequisite for success. Owners who use the services of a specialized collection firm are shielded from any exposure or negative effects of suits.
The Days Of ‘Dialing For Dollars’ Are Long Gone
The modern collection firm uses a sophisticated array of technology, systems, specialized training, monitoring and reporting to deliver maximum results in the least amount of time. A professional firm will have an attorney and compliance officer on staff to ensure adherence to federal and state regulations designed to protect the consumer, like the Federal Trade Commission’s Fair Debt Collection Practices Act (FDCPA). According to ACA International, third-party collection services that use specialized phone systems, computer and software designed specifically for the collection industry, usually are more effective than creditors at collecting payment on delinquent accounts.
An experienced, specialized collection firm relieves property owners and managers of the overwhelming administrative work of debt collections while dramatically increasing profitability. A specialized collection firm should also provide detailed reporting systems designed to help owners and managers make better leasing decisions and assist them from the onset in reducing future bad debts.
When it comes to uncollected rent, an experienced collection firm can assist owners in retrieving as much revenue as possible from residents in default. Property owners who want to increase their efficiency while growing their bottom line will profit from a partnership with a professional collection firm specializing in the multifamily industry.
About the Author
Stephen Sobota is CEO of Hunter Warfield, Inc. and can be reached at ssobota@huntwar.com. Hunter Warfield, Inc., an incorporated affiliate of Pierce Hamilton & Stern, provides debt collection services to clients in a wide range of industries from multi-housing to funeral services to commercial business. Focused on superior customer service and advanced management practices, Hunter Warfield is committed to taking collections to a new level. Through innovative technology and flexibility, we are unmatched at providing comprehensive collection solutions tailored to meet each customer's evolving business needs. More information is available at www.HunterWarfield.com.
Thursday, July 10, 2008
Top U.S. Housing Markets For Investment
By Matt Woolsey, taken from Forbes
Rahul Reddy, a dentist from Perth, Australia, has been investing in commercial properties in Western Australia for the last two years. Now, with the Australian dollar growing in strength and the American housing market strained, he's got his eye on residential and commercial properties in Florida and California, areas he believes will recover over the long term.
He's not alone. Encouraged by a weak dollar and a belief in the resiliency of the U.S. economy, individuals like Reddy, along with institutional investors such as pension funds and private equity groups, are seeking investment properties and development opportunities in the United States.
Their markets of choice include New York City, Los Angeles, Washington, D.C., Seattle and San Francisco.
"The U.S. is good for speculative higher-risk investments from our perspective because the strong Australian dollar will enable us to gain hold of properties at prices we will probably not see for a long time," says Reddy. "The U.S. is an economic powerhouse that I think will recover, and if the exchange rate goes back to figures from a few years ago, that will benefit us."
Key word there: Risk. With every passing month, a few pieces of conventional wisdom fall by the wayside. The July news that Manhattan sales prices dipped by 3.1%, according to New York appraisal firm Miller Samuel, pierced the logic that Manhattan holds unique status as a bulletproof market.
Still, international cash is flowing to cities from coast-to-coast as international buyers see plenty of opportunities.
CLICK HERE to view full article
Rahul Reddy, a dentist from Perth, Australia, has been investing in commercial properties in Western Australia for the last two years. Now, with the Australian dollar growing in strength and the American housing market strained, he's got his eye on residential and commercial properties in Florida and California, areas he believes will recover over the long term.
He's not alone. Encouraged by a weak dollar and a belief in the resiliency of the U.S. economy, individuals like Reddy, along with institutional investors such as pension funds and private equity groups, are seeking investment properties and development opportunities in the United States.
Their markets of choice include New York City, Los Angeles, Washington, D.C., Seattle and San Francisco.
"The U.S. is good for speculative higher-risk investments from our perspective because the strong Australian dollar will enable us to gain hold of properties at prices we will probably not see for a long time," says Reddy. "The U.S. is an economic powerhouse that I think will recover, and if the exchange rate goes back to figures from a few years ago, that will benefit us."
Key word there: Risk. With every passing month, a few pieces of conventional wisdom fall by the wayside. The July news that Manhattan sales prices dipped by 3.1%, according to New York appraisal firm Miller Samuel, pierced the logic that Manhattan holds unique status as a bulletproof market.
Still, international cash is flowing to cities from coast-to-coast as international buyers see plenty of opportunities.
CLICK HERE to view full article
Wednesday, July 9, 2008
Apartment Management Magazines goes digital with new “Virtual Magazine”
By Jordan Smith
Are you tired of waiting for your magazine? Tired of waiting 5 days for the United States Postal Service to reach your front door? Tired of missing an issue because it got delivered to some other place?
Well…all that is a thing of the past. The publishing industry has been revolutionized. Are you ready for a digital magazine that will be sent to you the day it is sent to the printer?
Apartment News Publications Inc. is pleased to announce that Apartment Management Magazines will be releasing an interactive, digital upgrade to our online magazine. Since the launch of our website, www.aptmags.com, we have offered only a PDF format of our online magazine. While it allowed many readers to access it on their computer, we were not happy with it and knew we could offer better to our readers. That is why we are launching our new digital magazine in conjunction with this issue. Everyone in our office is excited at the launch of our digital magazine, and we are eager to experience firsthand the digital future of our magazine, and its impacts upon the apartment industry.
Apartment Management readers will now be able to open a fully functional virtual magazine that will offer hot links to our clients, 3D page turning abilities, captivating videos, and in the future, the ability to be downloaded the publication straight to your phone. Continually I am frustrated at the rate of speed that our PDF version downloads, but with the new virtual magazine, it will load five times faster, and it will take no time at all to switch between the different zones. And it will be easier than ever to read our magazine online, because all six of our zones will be placed in one link on our home page. In addition, you will now be able to sign up to have the new digital magazine sent to your email on the day the magazine is shipped, and from there you can pass along the link to your friends.
We know that many people love to have their magazine in front of their hands, and that is why we will always continue to deliver our magazines to your doorstep for those who prefer it that way. Yet we also know many of you rather have it online, and reduce paper waste and emissions from delivery. And now we can add upon our 90,000 circulation, continuing to reach every apartment owner/manager with the preferred apartment management publication that “has saved my butt over and over again when I needed to find the right help with my apartments. I wish you guys were nationwide, because I could use your magazine with my apartments across the county (anonymous apartment owner).”
EXCITING FEATURES OF APARTMENT MANAGEMENT’S VIRTUAL MAGAZINE:
• 3D Flip Animation: Flip through the pages with cool 3D animation, or easily turn pages with the user friendly tool bar.
• Hot Links: With a click of a button jump to our client’s webpage or quickly jump to the articles that you want to read.
• Navigation Tools: Zoom in and out, adjust resolution size, send to your friends, view the table of contents, and much more.
To receive in your email box the digital version of Apartment Management every 1st of the month, sign up for it online at our website, www.aptmags.com, or send an email to js@aptmags.com saying you want to join the mailing list.
Are you tired of waiting for your magazine? Tired of waiting 5 days for the United States Postal Service to reach your front door? Tired of missing an issue because it got delivered to some other place?
Well…all that is a thing of the past. The publishing industry has been revolutionized. Are you ready for a digital magazine that will be sent to you the day it is sent to the printer?
Apartment News Publications Inc. is pleased to announce that Apartment Management Magazines will be releasing an interactive, digital upgrade to our online magazine. Since the launch of our website, www.aptmags.com, we have offered only a PDF format of our online magazine. While it allowed many readers to access it on their computer, we were not happy with it and knew we could offer better to our readers. That is why we are launching our new digital magazine in conjunction with this issue. Everyone in our office is excited at the launch of our digital magazine, and we are eager to experience firsthand the digital future of our magazine, and its impacts upon the apartment industry.
Apartment Management readers will now be able to open a fully functional virtual magazine that will offer hot links to our clients, 3D page turning abilities, captivating videos, and in the future, the ability to be downloaded the publication straight to your phone. Continually I am frustrated at the rate of speed that our PDF version downloads, but with the new virtual magazine, it will load five times faster, and it will take no time at all to switch between the different zones. And it will be easier than ever to read our magazine online, because all six of our zones will be placed in one link on our home page. In addition, you will now be able to sign up to have the new digital magazine sent to your email on the day the magazine is shipped, and from there you can pass along the link to your friends.
We know that many people love to have their magazine in front of their hands, and that is why we will always continue to deliver our magazines to your doorstep for those who prefer it that way. Yet we also know many of you rather have it online, and reduce paper waste and emissions from delivery. And now we can add upon our 90,000 circulation, continuing to reach every apartment owner/manager with the preferred apartment management publication that “has saved my butt over and over again when I needed to find the right help with my apartments. I wish you guys were nationwide, because I could use your magazine with my apartments across the county (anonymous apartment owner).”
EXCITING FEATURES OF APARTMENT MANAGEMENT’S VIRTUAL MAGAZINE:
• 3D Flip Animation: Flip through the pages with cool 3D animation, or easily turn pages with the user friendly tool bar.
• Hot Links: With a click of a button jump to our client’s webpage or quickly jump to the articles that you want to read.
• Navigation Tools: Zoom in and out, adjust resolution size, send to your friends, view the table of contents, and much more.
To receive in your email box the digital version of Apartment Management every 1st of the month, sign up for it online at our website, www.aptmags.com, or send an email to js@aptmags.com saying you want to join the mailing list.
Multifamily Boasts Solid Fundamentals in Weak Economy, Industry Experts Say
Source: MULTIFAMILY EXECUTIVE MAGAZINE
By Chris Wood
Key players in the multifamily industry offered insight on the industry's strengths and challenges in the next few years at the Multifamily Trends Conference portion of the Pacific Coast Builders Conference, held in San Francisco this week.
Putting a finger on the industry pulse, conference chairman and Houston-based Camden Property Trust CEO Ric Campo noted that "multifamily is a great place to be" in his opening address. "Underlying fundamentals are good, and as a result of foreclosures on the single-family side, we are seeing an increase in the renter pool from 30.9 [percent] to 32.2 percent. That's 1.5 million new renters looking for an apartment," Campo explained.
Among a litany of positive industry fundamentals, Campo did recognize a void in the construction and asset transaction arenas. He also conceded that broader economic issues could impact multifamily operators in the coming 12 to 18 months, particularly among unprepared players. But overall, Campo urged the conference to turn their focus away from the "woe is me" mentality infecting American industry today.
"Some of the forecasting at NMHC indicates that by 2011 we might even be facing rental shortages," Campo said. "The next several years are going to be a time of great opportunity but in a market in which there is no place to hide. You will take part in the value creation of the industry, or you will get run over by it."
CLICK HERE to read full article
By Chris Wood
Key players in the multifamily industry offered insight on the industry's strengths and challenges in the next few years at the Multifamily Trends Conference portion of the Pacific Coast Builders Conference, held in San Francisco this week.
Putting a finger on the industry pulse, conference chairman and Houston-based Camden Property Trust CEO Ric Campo noted that "multifamily is a great place to be" in his opening address. "Underlying fundamentals are good, and as a result of foreclosures on the single-family side, we are seeing an increase in the renter pool from 30.9 [percent] to 32.2 percent. That's 1.5 million new renters looking for an apartment," Campo explained.
Among a litany of positive industry fundamentals, Campo did recognize a void in the construction and asset transaction arenas. He also conceded that broader economic issues could impact multifamily operators in the coming 12 to 18 months, particularly among unprepared players. But overall, Campo urged the conference to turn their focus away from the "woe is me" mentality infecting American industry today.
"Some of the forecasting at NMHC indicates that by 2011 we might even be facing rental shortages," Campo said. "The next several years are going to be a time of great opportunity but in a market in which there is no place to hide. You will take part in the value creation of the industry, or you will get run over by it."
CLICK HERE to read full article
Monday, July 7, 2008
Investor says only one road to foreclosure profit
by Matt Padilla, Register Reporter and Blogger
I quizzed Lee about the mortgage market, his business, and his prediction for a housing rebound. I have a feeling this interview will appeal more to housing bears than bulls.
Q. Foreclosures in Orange County have broken all the records set in the housing slump of the early 1990s. When is this bloodbath going to end?
A. I’m projecting that the market will start stabilizing in four to five years from now – 2012-2013. That’s not to say home prices will be back to their peak, which could take up to eight years. I base this opinion on proprietary information Foreclosure Trackers has at its disposal. Banks turn to Foreclosure Trackers as the first line of defense because we are defaulted mortgage experts and buyers. Banks send their portfolios to us for evaluation every week before anyone else in the nation. Our company is on the “inside track” with the banks and often times receives information first before the “outside” track – such as the government, title companies, investment firms, lawyers, real estate firms, and even competitor foreclosure sites.
Q. With so many foreclosures, how is an investor supposed to make money buying a property in some stage of foreclosure? As the housing bears like to say, isn’t buying a foreclosure now akin to catching a falling knife?
A. Precisely. There are really five main strategies for investing in foreclosures. But four of the five rely on equity, which doesn’t really exist in today’s market. An equity purchase, foreclosure auction, short sale or REO purchase can all be profitable, wise investment strategies – just not in today’s market. There is only one strategy that makes sense in this market and that’s defaulted and performing mortgage (notes) investing.
At Foreclosure Trackers free seminars, we teach investors how to “buy the loan, not the home” and “work out, not kick out” strategies for defaulted mortgages and note investing. As I said, there’s no equity in properties today. By buying the loan at a substantial discount, we create equity and we are able to turn a profit on the property while helping Americans to save their homes.
This is an example of how it works: a bank may hold a note for a defaulted 1st mortgage in the amount of $800,000. The Broker Price Opinion may state the value of the property is $600,000. This property is over-encumbered or upside down. Foreclosure Trackers buys the note for $325,000. We then deploy our “work out, not kick out” strategy of working with the homeowner and reduce the principal balance to $480,000. The homeowner gets a principal reduction of $320,000, and is able to handle their mortgage payments going forward.
We’re doing our best to get the word out so the movement will start to make a real difference, both to those looking to earn great profits and those who want to help save America one home at a time.
CLICK HERE to view full article
I quizzed Lee about the mortgage market, his business, and his prediction for a housing rebound. I have a feeling this interview will appeal more to housing bears than bulls.
Q. Foreclosures in Orange County have broken all the records set in the housing slump of the early 1990s. When is this bloodbath going to end?
A. I’m projecting that the market will start stabilizing in four to five years from now – 2012-2013. That’s not to say home prices will be back to their peak, which could take up to eight years. I base this opinion on proprietary information Foreclosure Trackers has at its disposal. Banks turn to Foreclosure Trackers as the first line of defense because we are defaulted mortgage experts and buyers. Banks send their portfolios to us for evaluation every week before anyone else in the nation. Our company is on the “inside track” with the banks and often times receives information first before the “outside” track – such as the government, title companies, investment firms, lawyers, real estate firms, and even competitor foreclosure sites.
Q. With so many foreclosures, how is an investor supposed to make money buying a property in some stage of foreclosure? As the housing bears like to say, isn’t buying a foreclosure now akin to catching a falling knife?
A. Precisely. There are really five main strategies for investing in foreclosures. But four of the five rely on equity, which doesn’t really exist in today’s market. An equity purchase, foreclosure auction, short sale or REO purchase can all be profitable, wise investment strategies – just not in today’s market. There is only one strategy that makes sense in this market and that’s defaulted and performing mortgage (notes) investing.
At Foreclosure Trackers free seminars, we teach investors how to “buy the loan, not the home” and “work out, not kick out” strategies for defaulted mortgages and note investing. As I said, there’s no equity in properties today. By buying the loan at a substantial discount, we create equity and we are able to turn a profit on the property while helping Americans to save their homes.
This is an example of how it works: a bank may hold a note for a defaulted 1st mortgage in the amount of $800,000. The Broker Price Opinion may state the value of the property is $600,000. This property is over-encumbered or upside down. Foreclosure Trackers buys the note for $325,000. We then deploy our “work out, not kick out” strategy of working with the homeowner and reduce the principal balance to $480,000. The homeowner gets a principal reduction of $320,000, and is able to handle their mortgage payments going forward.
We’re doing our best to get the word out so the movement will start to make a real difference, both to those looking to earn great profits and those who want to help save America one home at a time.
CLICK HERE to view full article
Wednesday, July 2, 2008
Apartment Building Security
By Robert Levitt
We are our "brothers keepers". If we don't look out for others, who will look out for us? This is especially true when it comes to crime, whether it be potential assaults or property crimes (theft or vandalism). Know who your neighbors are and they should know you. Not only does it make for a better community, but it is also better security to know who should be on the premises.
Each of us can do our bit to prevent crime before it happens by being alert and following the following suggestions throughout your building. Learn these tips and make them part of your everyday habits and teach them to your children.
CRIME PREVENTION IS EVERYONE'S RESPONSIBILITY
Building Entry
Suspicious or unknown people trying to get into the building should be referred to the building superintendent, management or security. If you do not want to talk to them, then let the building superintendent, management or security know about these people immediately.
NEVER allow strangers to enter the building as you are leaving or entering any apartment building. Be aware of anybody hanging around the door who looks disinterested but makes a dash to hold open the door after it has been unlocked. Make sure all outer doors are kept locked at all times.
DO NOT buzz anyone you don't know into the building. Criminals have been known to randomly buzz people's apartments saying it is a pizza delivery and another tenant is not answering so can you please let them in.
List only your first initial along with your last name in the lobby tenant directory.
Do not let canvassers into your building. They do not have the right to be in the building unless there are there for government elections, or for organizing tenants into a tenants' association, where under the applicable laws, these people do have a right to be in the building.
Doors
If your apartment doors do not have a "peephole", have one added.
Also, criminals, or people you just don't want to bother you, can use the peephole in reverse. They can look in from the outside to see if the light coming through is changing and (if the quality of the image is good enough even if it is very small,) if it appears something is walking across the room, to indicate someone is in the apartment even if you are not answering. The solution to this is very simple. Take a small flap of leather, plastic or other opaque material, and affix it on the inside of your door above the peephole with a small short screw or even a thumbtack so that it covers the peephole. I used a piece of a new plastic watchstrap that I replaced on a friends watch for the job. That way nobody on the outside will ever see any light coming through it; it will always be dark. When there is somebody knocking at your door and you want to look out, wait until your face is close to the door (to block the light) then rotate the flap out of the way to look out, and when you are finished before moving away from the door, rotate the flap back; All the person on the outside will see is darkness through the peephole and will not know you just checked out that they were there.
Ensure that a new lock has been installed when your tenant moves into an apartment so that a former tenant can not gain entry.
Replace the entry lock from the common hallway into your apartment if it is one where the keyhole is in the center of the doorknob. These can be easily defeated. Replace them with deadbolt locks (preferable with minimum one-inch/25mm long bolts). Deadbolt locks are ones with rectangular bolts that go into the doorframe when locked.
"Jimmy plates" are a scam. These are pieces of metal which fraud artists claim will prevent criminals from sticking in a credit card between your door and frame to enter your apartment. This cannot be done to a rectangular deadbolt. These "installers" are the criminals. They often want to charge you $10 to $20 for each installation. (Think about it. If they can get 200 tenants in a building to pay them $10 each for installing 10 cents worth of useless metal, they can make almost $2000 off of just one building.) Jimmy plates are useless.
Legitimate locksmiths can do things to improve the security of your doors. When installing improved locks, they can securely install metal sheeting that wraps around the front, side and back of the door, with a hole where the lock goes through. These plates are meant to reinforce wooden doors around the lock. If you have a metal frame for your door it is unlikely you need anything to improve it. If you have a wooden door frame, a locksmith can examine it to make sure it is solid and tight fitting, and if not, they can remove the wood molding to add extra wood inside the frame, and then attach the strike plate (the metal plate added to wooden door frames where the dead bolt goes through when locked) with extra long screws (2.5 inch/6cm,) before putting back the moldings. Of course the locksmith may change the lock or add a second one with a higher security lock.
If you lose your keys, you should replace your lock.
You may want to install an alarm system in your apartment.
Windows and sliding doors
You may like to keep your windows and sliding door open. Criminals also like you to do this, especially if you are in a basement, first floor or a second floor apartment.
You can limit how much your windows (for ones that slide sideways,) and sliding doors open, to an amount less than a person can fit through, by putting a piece of broomstick or other object of similar size, cut to the right length, into the sliding track. For older upwardly sliding windows in wooden frames, you can drive a large nail into the frame at a level above the window to limit its travel to just enough of a crack to let in the air, then remove the nail and then push it back into the hole that remains (you don't want this to be permanent in case of a fire where you may need to get out of the window yourself).
Elevators
Look to see who is in the elevator before entering.
DO NOT enter the elevator if you do not feel comfortable; Wait for the next one.
When in the elevator, stand beside the control panel and know where the emergency alarm button is.
If a suspicious person enters the elevator, exit before the door closes.
Parking garages
If your underground parking garage is too dark, contact your municipal (city) building inspector, as many cities have building standards as to the minimum brightness of underground garages.
ALWAYS be aware of your surroundings.
If there are suspicious characters in the garage that arouse your concern, go back. If you are entering the garage from the apartment, go back quickly into the building and lock the door behind you, and if you are coming into the garage with your car drive your vehicle out of the garage. In both cases let the superintendent, building management or security know about it immediately.
Do not loiter in the garage. When going to your car, have your keys ready in your hand with the correct key next to your index finger, which will enable you to enter your vehicle quickly, plus keys can be used as a weapon to poke an attacker in the face with to defend yourself if necessary. When leaving your car, do the same.
Always check the inside of your vehicle through the car window before entering.
Always leave your automobile locked, and remove any valuables.
The Telephone
Tell you children not to let callers know if they are home alone, unless they are the ones making a call and it is to the Police, Fire Department or 911.
Don't have a message on your telephone answering machine that lets callers know no one is at home, that there is only one person living there, or that you are on holidays. Instead say that "we are "presently not available to come to the phone"; That way a caller will not know that you live alone or that you are out, only that you and others may be busy with something else but may be there. If you are going away on holidays, you will have to let friends and family know that you are away, so they do not keep calling the answering machine.
Going on vacation
Inform a trustworthy neighbor of when you are leaving and when you will be back. Have them pick up any items such as junk mail left outside of your door or in your mailbox, so there will be no visible sign left for criminals to know you are away.
Cancel all deliveries for that period; Thing like the newspaper.
Use timers to turn on and off lights and/or radios at various times to disguise your absence.
DO NOT leave a note to inform people that you are not home.
Crimes
IF YOU SEE A CRIME BEING COMMITTED, IMMEDIATELY CALL THE POLICE!
If you see one or more strangers removing items out of a neighbor's apartment without the neighbor being present CALL 911.
When you arrive home, if you believe a crime may have occurred, do not enter. The criminal(s) may still be in the apartment. Use a neighbor’s telephone and call the police.
If a crime has occurred, also use a cell phone or a neighbor's telephone to call the police. DO NOT touch anything or clean up until the police have inspected the apartment or vehicle for evidence.
Write down the descriptions of any suspicious people and the license number of any suspicious vehicles.
You should also keep a list of all your valuables in case a crime ever does occur.
We are our "brothers keepers". If we don't look out for others, who will look out for us? This is especially true when it comes to crime, whether it be potential assaults or property crimes (theft or vandalism). Know who your neighbors are and they should know you. Not only does it make for a better community, but it is also better security to know who should be on the premises.
Each of us can do our bit to prevent crime before it happens by being alert and following the following suggestions throughout your building. Learn these tips and make them part of your everyday habits and teach them to your children.
CRIME PREVENTION IS EVERYONE'S RESPONSIBILITY
Building Entry
Suspicious or unknown people trying to get into the building should be referred to the building superintendent, management or security. If you do not want to talk to them, then let the building superintendent, management or security know about these people immediately.
NEVER allow strangers to enter the building as you are leaving or entering any apartment building. Be aware of anybody hanging around the door who looks disinterested but makes a dash to hold open the door after it has been unlocked. Make sure all outer doors are kept locked at all times.
DO NOT buzz anyone you don't know into the building. Criminals have been known to randomly buzz people's apartments saying it is a pizza delivery and another tenant is not answering so can you please let them in.
List only your first initial along with your last name in the lobby tenant directory.
Do not let canvassers into your building. They do not have the right to be in the building unless there are there for government elections, or for organizing tenants into a tenants' association, where under the applicable laws, these people do have a right to be in the building.
Doors
If your apartment doors do not have a "peephole", have one added.
Also, criminals, or people you just don't want to bother you, can use the peephole in reverse. They can look in from the outside to see if the light coming through is changing and (if the quality of the image is good enough even if it is very small,) if it appears something is walking across the room, to indicate someone is in the apartment even if you are not answering. The solution to this is very simple. Take a small flap of leather, plastic or other opaque material, and affix it on the inside of your door above the peephole with a small short screw or even a thumbtack so that it covers the peephole. I used a piece of a new plastic watchstrap that I replaced on a friends watch for the job. That way nobody on the outside will ever see any light coming through it; it will always be dark. When there is somebody knocking at your door and you want to look out, wait until your face is close to the door (to block the light) then rotate the flap out of the way to look out, and when you are finished before moving away from the door, rotate the flap back; All the person on the outside will see is darkness through the peephole and will not know you just checked out that they were there.
Ensure that a new lock has been installed when your tenant moves into an apartment so that a former tenant can not gain entry.
Replace the entry lock from the common hallway into your apartment if it is one where the keyhole is in the center of the doorknob. These can be easily defeated. Replace them with deadbolt locks (preferable with minimum one-inch/25mm long bolts). Deadbolt locks are ones with rectangular bolts that go into the doorframe when locked.
"Jimmy plates" are a scam. These are pieces of metal which fraud artists claim will prevent criminals from sticking in a credit card between your door and frame to enter your apartment. This cannot be done to a rectangular deadbolt. These "installers" are the criminals. They often want to charge you $10 to $20 for each installation. (Think about it. If they can get 200 tenants in a building to pay them $10 each for installing 10 cents worth of useless metal, they can make almost $2000 off of just one building.) Jimmy plates are useless.
Legitimate locksmiths can do things to improve the security of your doors. When installing improved locks, they can securely install metal sheeting that wraps around the front, side and back of the door, with a hole where the lock goes through. These plates are meant to reinforce wooden doors around the lock. If you have a metal frame for your door it is unlikely you need anything to improve it. If you have a wooden door frame, a locksmith can examine it to make sure it is solid and tight fitting, and if not, they can remove the wood molding to add extra wood inside the frame, and then attach the strike plate (the metal plate added to wooden door frames where the dead bolt goes through when locked) with extra long screws (2.5 inch/6cm,) before putting back the moldings. Of course the locksmith may change the lock or add a second one with a higher security lock.
If you lose your keys, you should replace your lock.
You may want to install an alarm system in your apartment.
Windows and sliding doors
You may like to keep your windows and sliding door open. Criminals also like you to do this, especially if you are in a basement, first floor or a second floor apartment.
You can limit how much your windows (for ones that slide sideways,) and sliding doors open, to an amount less than a person can fit through, by putting a piece of broomstick or other object of similar size, cut to the right length, into the sliding track. For older upwardly sliding windows in wooden frames, you can drive a large nail into the frame at a level above the window to limit its travel to just enough of a crack to let in the air, then remove the nail and then push it back into the hole that remains (you don't want this to be permanent in case of a fire where you may need to get out of the window yourself).
Elevators
Look to see who is in the elevator before entering.
DO NOT enter the elevator if you do not feel comfortable; Wait for the next one.
When in the elevator, stand beside the control panel and know where the emergency alarm button is.
If a suspicious person enters the elevator, exit before the door closes.
Parking garages
If your underground parking garage is too dark, contact your municipal (city) building inspector, as many cities have building standards as to the minimum brightness of underground garages.
ALWAYS be aware of your surroundings.
If there are suspicious characters in the garage that arouse your concern, go back. If you are entering the garage from the apartment, go back quickly into the building and lock the door behind you, and if you are coming into the garage with your car drive your vehicle out of the garage. In both cases let the superintendent, building management or security know about it immediately.
Do not loiter in the garage. When going to your car, have your keys ready in your hand with the correct key next to your index finger, which will enable you to enter your vehicle quickly, plus keys can be used as a weapon to poke an attacker in the face with to defend yourself if necessary. When leaving your car, do the same.
Always check the inside of your vehicle through the car window before entering.
Always leave your automobile locked, and remove any valuables.
The Telephone
Tell you children not to let callers know if they are home alone, unless they are the ones making a call and it is to the Police, Fire Department or 911.
Don't have a message on your telephone answering machine that lets callers know no one is at home, that there is only one person living there, or that you are on holidays. Instead say that "we are "presently not available to come to the phone"; That way a caller will not know that you live alone or that you are out, only that you and others may be busy with something else but may be there. If you are going away on holidays, you will have to let friends and family know that you are away, so they do not keep calling the answering machine.
Going on vacation
Inform a trustworthy neighbor of when you are leaving and when you will be back. Have them pick up any items such as junk mail left outside of your door or in your mailbox, so there will be no visible sign left for criminals to know you are away.
Cancel all deliveries for that period; Thing like the newspaper.
Use timers to turn on and off lights and/or radios at various times to disguise your absence.
DO NOT leave a note to inform people that you are not home.
Crimes
IF YOU SEE A CRIME BEING COMMITTED, IMMEDIATELY CALL THE POLICE!
If you see one or more strangers removing items out of a neighbor's apartment without the neighbor being present CALL 911.
When you arrive home, if you believe a crime may have occurred, do not enter. The criminal(s) may still be in the apartment. Use a neighbor’s telephone and call the police.
If a crime has occurred, also use a cell phone or a neighbor's telephone to call the police. DO NOT touch anything or clean up until the police have inspected the apartment or vehicle for evidence.
Write down the descriptions of any suspicious people and the license number of any suspicious vehicles.
You should also keep a list of all your valuables in case a crime ever does occur.
Monday, June 30, 2008
The economy of California
Click Here to view a video from Forbes on the current economy of California.
The video states that the economy is definitely hit some bumps, but still is growing more than expected and promises growth in the near future. Exports are up, agriculture is up and the big tech industry is still putting a lot of money into R&D, and post not cutbacks in spending.
The housing market is hurt, which anybody could tell, but will not turn into a waste land, since 70% of California home owners do not have sub-prime mortgages, and he states that the "bottom fishers" are picking up these properties at a high rate. San Fransisco and San Jose still post high home prices.
Some disturbing news is that lot of jobs are being lost in the home building and financial sector in southern California, but is being offset by job growth in other areas in California.
The video states that the economy is definitely hit some bumps, but still is growing more than expected and promises growth in the near future. Exports are up, agriculture is up and the big tech industry is still putting a lot of money into R&D, and post not cutbacks in spending.
The housing market is hurt, which anybody could tell, but will not turn into a waste land, since 70% of California home owners do not have sub-prime mortgages, and he states that the "bottom fishers" are picking up these properties at a high rate. San Fransisco and San Jose still post high home prices.
Some disturbing news is that lot of jobs are being lost in the home building and financial sector in southern California, but is being offset by job growth in other areas in California.
Tuesday, June 24, 2008
No rate cut! That’s the bet on Fed
Here is an article from Jon Lasner (O.C. Register) on Real Estate about the forecast of rate cuts in the coming year.
Economist Mark Schniepp of California Forecast: They’ll hold steady. Economy looking more stable than two months ago. Dollar is strengthening, core inflation is reasonable. Raising rates would risk deepening the havoc in housing. When will they raise again? When oil prices are clearly in decline. When mortgage rates are a little lower. When there is less risk that raising rates will produce increases in the indexes that adjust adjustable mortgages. So , not this year.
O.C. Treasurer Chriss Street: The Fed will stand pat on Wednesday. The real economy is already in much worse shape than is being reported and this is early in the down business cycle. The case for raising rates is the obvious piece of the iceberg you can see. Inflation is trending to the 4.5% or higher level. With the discount rate set at the 2% level, that means the real net interest rates are actually “negative” by about 2.5%. Present this to an accountant and the answer is clear that rates need to rise at least 50% of the spread to slow the economy and create enough “slack” to slow the economy down. Unemployment appears to be headed to 6% or higher. This is the big iceberg that you and the Fed should be very afraid of.
Click Here to view the full article.
Economist Mark Schniepp of California Forecast: They’ll hold steady. Economy looking more stable than two months ago. Dollar is strengthening, core inflation is reasonable. Raising rates would risk deepening the havoc in housing. When will they raise again? When oil prices are clearly in decline. When mortgage rates are a little lower. When there is less risk that raising rates will produce increases in the indexes that adjust adjustable mortgages. So , not this year.
O.C. Treasurer Chriss Street: The Fed will stand pat on Wednesday. The real economy is already in much worse shape than is being reported and this is early in the down business cycle. The case for raising rates is the obvious piece of the iceberg you can see. Inflation is trending to the 4.5% or higher level. With the discount rate set at the 2% level, that means the real net interest rates are actually “negative” by about 2.5%. Present this to an accountant and the answer is clear that rates need to rise at least 50% of the spread to slow the economy and create enough “slack” to slow the economy down. Unemployment appears to be headed to 6% or higher. This is the big iceberg that you and the Fed should be very afraid of.
Click Here to view the full article.
Monday, June 23, 2008
Etiquette
By John C. Maciha
Meeting, Welcoming & Leasing To
Prospective Residents
G
reetings
How a prospect is greeted when they walk through the door of the leasing office will often determine whether or not they lease. The greeting is the prospect’s initial first-hand impression of the community and the staff. Therefore, it is important that the greeting be carried out properly.
1. Tools for a Warm Welcome — In Person:
• Prospects must always be greeted with a smile. A smile is contagious and is the first step towards establishing good rapport.
• Leasing Consultants must always stand up and walk around the desk to greet the prospective resident. This tells the prospect that he/she is important and makes them feel welcome.
• Eye Contact must be established immediately. Looking directly at the prospect indicates that the Leasing Consultant is giving him/her full, undivided attention.
• When greeting a prospect, the Leasing Consultant should always introduce herself/himself and obtain the prospect’s name. A handshake may or may not be appropriate and the Leasing Consultant should make this determination. Once the person’s name is obtained, it should be used throughout the presentation.
• Enthusiasm should be a part of every greeting. This helps to create a positive introduction and serves to immediately interest the prospect in both the Leasing Consultant and the community.
2. Tools for a Warm Welcome — On the Phone: Your Voice Smiles! Your Heart Cares!
Often, the first impression a prospective resident receives of the property is on the telephone. Therefore, it is important that the telephone is always answered in a friendly enthusiastic manner. The telephone should always be answered in the following manner:
“Hello, ___________________ Apartments.
This is _____________________. How may I help you?”
If the caller is a prospective resident, the following will help guide you through the call:
• Ask for the caller’s name.
• Identify the size of apartment, date needed and number of people to occupy the apartment.
• Ask if they have any special needs for the apartment.
• Ask if they have pets.
• Describe the apartment’s benefits and the property’s amenities.
• Describe the community.
• Don’t mention price. If they ask, tell them what we pay for (utilities, cable, etc.) and then tell them the price. Never give the price before describing the benefits.
• Invite them to visit the property.
• Set an appointment time.
• Give clear directions to the property. It is important to know how to give directions from different areas; i.e., “If you will be coming North on the 405, or South on the 5, etc.”
• Thank them for calling and give a friendly good-bye.
It is important to control the conversation, be enthusiastic and make an appointment! You may find it helpful to have guest cards by the telephone. As you ask the questions above, fill out the guest card. When the prospective resident comes in for the appointment, you will be ready with a guest card already filled out. This gives the resident a welcome feeling.
Qualifying
1. Purpose:
• A sales presentation should never be made without first qualifying the prospect. Qualifying is necessary in order to determine the prospect’s needs and wants. This will enable the sales presentation to be directed towards those needs.
• Proper qualifying enables the Leasing Consultant to develop a rapport with the prospect and determine his/her buying signals. The sales presentation can then be planned around those specific buying signals.
• Identifying the prospect’s specific needs allows the available apartments to be narrowed down to one. It is important to create a sense of urgency.
• Qualifying enables the closing process to begin. Closing is a continuous process which begins as soon as the prospect walks in the door.
Remember, the worn out be true phrase, “a person’s home is their castle; accordingly, everything you do as you meet, welcome and lease to your prospective resident should center on making that person feel that indeed, you can provide that castle that theywill call their home. Y
Source: The Operational Apartment Guide & Desktop Reference By John C. Maciha & Associates • Copyright © 1995
John Maciha is a former vice president of The Irvine Company and now serves as a consultant in the area of asset management. He can be reached at (714) 542-9224.
Meeting, Welcoming & Leasing To
Prospective Residents
G
reetings
How a prospect is greeted when they walk through the door of the leasing office will often determine whether or not they lease. The greeting is the prospect’s initial first-hand impression of the community and the staff. Therefore, it is important that the greeting be carried out properly.
1. Tools for a Warm Welcome — In Person:
• Prospects must always be greeted with a smile. A smile is contagious and is the first step towards establishing good rapport.
• Leasing Consultants must always stand up and walk around the desk to greet the prospective resident. This tells the prospect that he/she is important and makes them feel welcome.
• Eye Contact must be established immediately. Looking directly at the prospect indicates that the Leasing Consultant is giving him/her full, undivided attention.
• When greeting a prospect, the Leasing Consultant should always introduce herself/himself and obtain the prospect’s name. A handshake may or may not be appropriate and the Leasing Consultant should make this determination. Once the person’s name is obtained, it should be used throughout the presentation.
• Enthusiasm should be a part of every greeting. This helps to create a positive introduction and serves to immediately interest the prospect in both the Leasing Consultant and the community.
2. Tools for a Warm Welcome — On the Phone: Your Voice Smiles! Your Heart Cares!
Often, the first impression a prospective resident receives of the property is on the telephone. Therefore, it is important that the telephone is always answered in a friendly enthusiastic manner. The telephone should always be answered in the following manner:
“Hello, ___________________ Apartments.
This is _____________________. How may I help you?”
If the caller is a prospective resident, the following will help guide you through the call:
• Ask for the caller’s name.
• Identify the size of apartment, date needed and number of people to occupy the apartment.
• Ask if they have any special needs for the apartment.
• Ask if they have pets.
• Describe the apartment’s benefits and the property’s amenities.
• Describe the community.
• Don’t mention price. If they ask, tell them what we pay for (utilities, cable, etc.) and then tell them the price. Never give the price before describing the benefits.
• Invite them to visit the property.
• Set an appointment time.
• Give clear directions to the property. It is important to know how to give directions from different areas; i.e., “If you will be coming North on the 405, or South on the 5, etc.”
• Thank them for calling and give a friendly good-bye.
It is important to control the conversation, be enthusiastic and make an appointment! You may find it helpful to have guest cards by the telephone. As you ask the questions above, fill out the guest card. When the prospective resident comes in for the appointment, you will be ready with a guest card already filled out. This gives the resident a welcome feeling.
Qualifying
1. Purpose:
• A sales presentation should never be made without first qualifying the prospect. Qualifying is necessary in order to determine the prospect’s needs and wants. This will enable the sales presentation to be directed towards those needs.
• Proper qualifying enables the Leasing Consultant to develop a rapport with the prospect and determine his/her buying signals. The sales presentation can then be planned around those specific buying signals.
• Identifying the prospect’s specific needs allows the available apartments to be narrowed down to one. It is important to create a sense of urgency.
• Qualifying enables the closing process to begin. Closing is a continuous process which begins as soon as the prospect walks in the door.
Remember, the worn out be true phrase, “a person’s home is their castle; accordingly, everything you do as you meet, welcome and lease to your prospective resident should center on making that person feel that indeed, you can provide that castle that theywill call their home. Y
Source: The Operational Apartment Guide & Desktop Reference By John C. Maciha & Associates • Copyright © 1995
John Maciha is a former vice president of The Irvine Company and now serves as a consultant in the area of asset management. He can be reached at (714) 542-9224.
Tuesday, June 17, 2008
California: Most Popular State To Move Into
Relocation.com reveals a study showing the moving trends, and where everybody is heading.
"According to the survey results, California and Texas are the two most
popular states for people to move in 2007, based on interstate and intrastate
moves combined. Surveys over the past decade have shown that California (the
largest state by population) has always ranked first in terms of destination
state for people changing residences. This trend continues, despite the
growing mortgage crisis, which has heavily affected many areas of California.
The effect of declining home values combined with the high cost of living has
not kept consumers away. Only 43 percent of people moving to a new location
in California currently live in California; thus 57 percent of all moves to
California are people moving from other states."
Click here to see full report from earthtimes.com
"According to the survey results, California and Texas are the two most
popular states for people to move in 2007, based on interstate and intrastate
moves combined. Surveys over the past decade have shown that California (the
largest state by population) has always ranked first in terms of destination
state for people changing residences. This trend continues, despite the
growing mortgage crisis, which has heavily affected many areas of California.
The effect of declining home values combined with the high cost of living has
not kept consumers away. Only 43 percent of people moving to a new location
in California currently live in California; thus 57 percent of all moves to
California are people moving from other states."
Click here to see full report from earthtimes.com
Friday, June 13, 2008
Housing: It'll get worse
By Les Christie, CNNMoney.com staff writer
Jun 12th, 2008
Hard hit cities like Sacramento, Phoenix and Las Vegas are set for more steep losses. Some real estate experts are bracing for price drops of as much as 50%.
NEW YORK (CNNMoney.com) -- With home prices plunging by more than 30% in some markets, bargain-hunters are ready to pounce.
But it may pay for buyers to wait. Many housing experts say that the worst-hit metro areas have even farther to fall, and could see total drops of as much as 50%.
"The housing boom was unprecedented in U.S. history," said Michael Youngblood, a portfolio analyst with FBR Investment Management, "and the correction will be as well."
Click here for full article
Jun 12th, 2008
Hard hit cities like Sacramento, Phoenix and Las Vegas are set for more steep losses. Some real estate experts are bracing for price drops of as much as 50%.
NEW YORK (CNNMoney.com) -- With home prices plunging by more than 30% in some markets, bargain-hunters are ready to pounce.
But it may pay for buyers to wait. Many housing experts say that the worst-hit metro areas have even farther to fall, and could see total drops of as much as 50%.
"The housing boom was unprecedented in U.S. history," said Michael Youngblood, a portfolio analyst with FBR Investment Management, "and the correction will be as well."
Click here for full article
Toxic Black Mold
by Clark “Sparky” Beardslee
The Basics
Mold spores are everywhere and cannot be avoided. They float in through your open windows and doors, or come inside by riding on your clothing or your pets. Real problems in homes and buildings rarely occur unless there has been intense flooding, usually in basements, sometimes from leaky roofs, or where there has been an extensive plumbing problem.
If spores land on a moist or damp surface, usually in a poorly lit area -- they can grow.
So the key to mold control is moisture control. Water-damaged areas must be dried within twenty-four to forty-eight hours to prevent mold and mildew growth.
Health Risk
Most people have a natural immunity to antigens present in mold, but some are more sensitive than others – and a moldy home is not a healthy home. At-risk individuals are mostly infants, the aged and asthmatics being treated with steroids. The highest level of danger is for those with pre-existing respiratory diseases such as tuberculosis or cystic fibrosis and those undergoing chemotherapy or other treatments that adversely affect the immune system.
The most common health concerns include symptoms similar to hay fever. Others may experience respiratory difficulties or skin and eye irritations. There are some reported extreme reactions, too.
According to the Centers for Disease Control and Prevention, determining the level of health risk is mostly a factor of looking at the individual and assessing whether they fall into one of the risk groups. However, exposure to mold is not a desirable living condition and it should be removed, just like you would also throw away moldy bread without eating it.
The Cleveland Incident & the CDC
There has been a widely reported case regarding the deaths of some Cleveland infants between 1993 and 1994. Some articles say eight infants died. Other articles say ten died. One article even says that forty-five died.
The cause of death, according to these articles, is that the babies died of acute idiopathic pulmonary hemorrhage that was traced back to water damage in their homes and the subsequent infestation by the mold species Stachybotrys ChartarumIn.
The articles also say that the cause of death was determined in a study done by The Centers for Disease Control and Prevention.
The CDC (Centers for Disease Control and Prevention) web site says something different. They say that “this remains to be proved” and that no one really knows what causes acute idiopathic pulmonary hemorrhage.
The cause of death may have been the mold, as the articles claim. However, the claim that the CDC identified that as the cause of death is not true. So, to paraphrase Fox Mulder of the X-Files, “the truth is still out there.”
Differing Opinions and Lawyers
There is some disagreement on the seriousness of the mold issue. Some say it is an expanding problem because modern homes -- with air conditioning, heating, and energy-saving insulation – are much more airtight and susceptible to infestation than homes of the past.
Others say the problem has always existed and the current frenzy is an invention by attorneys so they can mine this latest “pot of gold” with expensive lawsuits. It has become a major profit center for attorneys, inspectors, laboratories, and test-kit developers.
As one lawyer states in a recent Time magazine article, “For science to prove something, it has to be 100% certain. In a civil lawsuit, it only has to be proved 51%."
Identifying Molds
Some molds can be identified by their growth patterns, but that requires an expert. Even experts make errors based on a visual inspection, because growth patterns of different molds can appear similar to one another. To correctly identify a mold species requires a sample that can be examined in a laboratory by an experienced technician using a microscope.
The most important thing is to remove the mold.
However, if someone has a health problem that may be caused by the mold, you may want to identify it. Wearing rubber gloves, take a piece of scotch tape, lift some spore samples from the mold, and seal it in a Ziploc bag. Then you have something you can take to your doctor or a laboratory.
There are lots of mold-testing laboratories available on the web. It’s become a “hot” industry in the last couple of years.
The most common indoor molds are Cladosporium, Penicillium, Aspergillus, and Alternaria. Some rarer molds, such as Stachybotrys, may be more dangerous but its spores are only found in two to five percent of homes and only a small percentage of those homes provide an environment for growth.
Mold Growth and Cleanup
Mold flourishes in dark, damp places that are poorly ventilated and in areas where water collects. This provides an environment for ever-present dormant mold spores to collect and grow. The first step in mold clean-up is to eliminate the source of moisture.
No one should attempt to clean mold or mildew without wearing rubber gloves. Sensitive people should wear a dust-resistant facemask or carbon filter respirator.
If the mold patch is less than a foot square, it can be removed with a chlorine bleach solution (one cup of bleach in one gallon of water). Never mix bleach with other cleaning materials, period. It is difficult to tell what cleaning materials contain ammonia, and bleach mixed with ammonia creates a toxic gas.
The mold should come off with simple gentle scrubbing. Do not scrape a mold that has dried because this could release mold spores into the air, where they can circulate through your air-conditioning or heating system and land elsewhere.
Once you have washed away the mold, the area should be dried completely. Make sure to remove or repair any sources of excess water, such as leaky plumbing or a faulty roof.
Absorbent materials (such as ceiling tiles and carpet) that become moldy may have to be replaced.
If the moldy area is larger than two feet square, you should seek professional assistance or call your local government health agency for guidance.
Conclusions & Homeowners Insurance
Once a mold appears, all it generally takes to prevent health problems is a little bit of bleach and water – and maybe a blow dryer. There are exceptions, however – and those exceptions should be treated seriously.
When mold growth is massive or hidden behind walls, professional help is required. Clean-up costs can range between $10,000 and $50,000 for a moderately sized home.
One result of the recent trends toward lawsuits involving black mold is increased homeowner’s insurance premiums. Another effect is that insurance providers are asking states to allow them to exclude mold coverage in policies.
The Basics
Mold spores are everywhere and cannot be avoided. They float in through your open windows and doors, or come inside by riding on your clothing or your pets. Real problems in homes and buildings rarely occur unless there has been intense flooding, usually in basements, sometimes from leaky roofs, or where there has been an extensive plumbing problem.
If spores land on a moist or damp surface, usually in a poorly lit area -- they can grow.
So the key to mold control is moisture control. Water-damaged areas must be dried within twenty-four to forty-eight hours to prevent mold and mildew growth.
Health Risk
Most people have a natural immunity to antigens present in mold, but some are more sensitive than others – and a moldy home is not a healthy home. At-risk individuals are mostly infants, the aged and asthmatics being treated with steroids. The highest level of danger is for those with pre-existing respiratory diseases such as tuberculosis or cystic fibrosis and those undergoing chemotherapy or other treatments that adversely affect the immune system.
The most common health concerns include symptoms similar to hay fever. Others may experience respiratory difficulties or skin and eye irritations. There are some reported extreme reactions, too.
According to the Centers for Disease Control and Prevention, determining the level of health risk is mostly a factor of looking at the individual and assessing whether they fall into one of the risk groups. However, exposure to mold is not a desirable living condition and it should be removed, just like you would also throw away moldy bread without eating it.
The Cleveland Incident & the CDC
There has been a widely reported case regarding the deaths of some Cleveland infants between 1993 and 1994. Some articles say eight infants died. Other articles say ten died. One article even says that forty-five died.
The cause of death, according to these articles, is that the babies died of acute idiopathic pulmonary hemorrhage that was traced back to water damage in their homes and the subsequent infestation by the mold species Stachybotrys ChartarumIn.
The articles also say that the cause of death was determined in a study done by The Centers for Disease Control and Prevention.
The CDC (Centers for Disease Control and Prevention) web site says something different. They say that “this remains to be proved” and that no one really knows what causes acute idiopathic pulmonary hemorrhage.
The cause of death may have been the mold, as the articles claim. However, the claim that the CDC identified that as the cause of death is not true. So, to paraphrase Fox Mulder of the X-Files, “the truth is still out there.”
Differing Opinions and Lawyers
There is some disagreement on the seriousness of the mold issue. Some say it is an expanding problem because modern homes -- with air conditioning, heating, and energy-saving insulation – are much more airtight and susceptible to infestation than homes of the past.
Others say the problem has always existed and the current frenzy is an invention by attorneys so they can mine this latest “pot of gold” with expensive lawsuits. It has become a major profit center for attorneys, inspectors, laboratories, and test-kit developers.
As one lawyer states in a recent Time magazine article, “For science to prove something, it has to be 100% certain. In a civil lawsuit, it only has to be proved 51%."
Identifying Molds
Some molds can be identified by their growth patterns, but that requires an expert. Even experts make errors based on a visual inspection, because growth patterns of different molds can appear similar to one another. To correctly identify a mold species requires a sample that can be examined in a laboratory by an experienced technician using a microscope.
The most important thing is to remove the mold.
However, if someone has a health problem that may be caused by the mold, you may want to identify it. Wearing rubber gloves, take a piece of scotch tape, lift some spore samples from the mold, and seal it in a Ziploc bag. Then you have something you can take to your doctor or a laboratory.
There are lots of mold-testing laboratories available on the web. It’s become a “hot” industry in the last couple of years.
The most common indoor molds are Cladosporium, Penicillium, Aspergillus, and Alternaria. Some rarer molds, such as Stachybotrys, may be more dangerous but its spores are only found in two to five percent of homes and only a small percentage of those homes provide an environment for growth.
Mold Growth and Cleanup
Mold flourishes in dark, damp places that are poorly ventilated and in areas where water collects. This provides an environment for ever-present dormant mold spores to collect and grow. The first step in mold clean-up is to eliminate the source of moisture.
No one should attempt to clean mold or mildew without wearing rubber gloves. Sensitive people should wear a dust-resistant facemask or carbon filter respirator.
If the mold patch is less than a foot square, it can be removed with a chlorine bleach solution (one cup of bleach in one gallon of water). Never mix bleach with other cleaning materials, period. It is difficult to tell what cleaning materials contain ammonia, and bleach mixed with ammonia creates a toxic gas.
The mold should come off with simple gentle scrubbing. Do not scrape a mold that has dried because this could release mold spores into the air, where they can circulate through your air-conditioning or heating system and land elsewhere.
Once you have washed away the mold, the area should be dried completely. Make sure to remove or repair any sources of excess water, such as leaky plumbing or a faulty roof.
Absorbent materials (such as ceiling tiles and carpet) that become moldy may have to be replaced.
If the moldy area is larger than two feet square, you should seek professional assistance or call your local government health agency for guidance.
Conclusions & Homeowners Insurance
Once a mold appears, all it generally takes to prevent health problems is a little bit of bleach and water – and maybe a blow dryer. There are exceptions, however – and those exceptions should be treated seriously.
When mold growth is massive or hidden behind walls, professional help is required. Clean-up costs can range between $10,000 and $50,000 for a moderately sized home.
One result of the recent trends toward lawsuits involving black mold is increased homeowner’s insurance premiums. Another effect is that insurance providers are asking states to allow them to exclude mold coverage in policies.
The Benefits of a Walkable Neighborhood
Here is an article from wisebread that weighs in on the benefit of a walkable community. I am always fascinated at the idea about being about to walk to school, work, the grocery store, nightlife, etc. from home; yet I live in Orange County, and there is not that many communities that allow this. Yet with the rise of reurbanization and new apartment complexes located nearer to conveniences, this could be the future, and help our wallets with less gas being churned.
"When I lived in Honolulu, Hawaii, I walked practically everywhere because my family did not have a car. The grocery store was a block away, and the beach was less than a mile south. Nearly everything we needed was within walking distance because Honolulu is a fairly densely populated city. Before my family moved to California, we heard from my aunt that not having a car in California is like not having legs because you have to drive almost everywhere. Unfortunately, this is certainly true in the exurbs of Southern California and many suburbs in the Bay Area. As a result, we now drive almost everywhere.
I think there are quite a few benefits to live in a highly walkable neighborhood. One obvious reason is that you can save quite a bit of money and time on transportation. When I visited my inlaws in Southern California last winter, I felt like we spent hours and hours inside of cars. Most of the trips were small errands like going to the grocery store or getting lunch, but they seemed to take a very long time. When I told an aunt that my commute to work each day is 9 miles each way she said to me, "That's not a commute! That's going to the grocery store!" Understandably, it does not make sense to walk when the nearest grocer is so far away, but the cost of driving so much really adds up especially when gas is topping $4.50 a gallon here in California."
Click here for full article and discussion
"When I lived in Honolulu, Hawaii, I walked practically everywhere because my family did not have a car. The grocery store was a block away, and the beach was less than a mile south. Nearly everything we needed was within walking distance because Honolulu is a fairly densely populated city. Before my family moved to California, we heard from my aunt that not having a car in California is like not having legs because you have to drive almost everywhere. Unfortunately, this is certainly true in the exurbs of Southern California and many suburbs in the Bay Area. As a result, we now drive almost everywhere.
I think there are quite a few benefits to live in a highly walkable neighborhood. One obvious reason is that you can save quite a bit of money and time on transportation. When I visited my inlaws in Southern California last winter, I felt like we spent hours and hours inside of cars. Most of the trips were small errands like going to the grocery store or getting lunch, but they seemed to take a very long time. When I told an aunt that my commute to work each day is 9 miles each way she said to me, "That's not a commute! That's going to the grocery store!" Understandably, it does not make sense to walk when the nearest grocer is so far away, but the cost of driving so much really adds up especially when gas is topping $4.50 a gallon here in California."
Click here for full article and discussion
Friday, June 6, 2008
Where are they heading?
This week the news certainly has been confirming our worst fears as homeowners; thousands are left with no other option than to give up their homes, and pack up all their dreams of living in their own homes in paradise (sunny, southern California). With the largest drop in home prices in the nation, and with foreclosures at its record, the California real estate market does not hopeful for the next year, and maybe even longer (too many are predicting too many things to be sure).
But where are all these people going? Are they packing up, leaving town, and looking for new markets to enter that are easier on the wallet, such as the mid-west. Or are their families into apartments? Could it be a mixture of both?
California, on average, adds over 25,000 in population each year; but will that change now due to our drastic crunch (only time will tell). Will there be more urban developments, allowing families to move into rental units that are closer to their jobs, lessening the strain on gas, even though that means not owning their dream house. Maybe in this economy it is their only hope to live in the Greater Los Angeles area, where so many people call home and find work to bill pay the bills.
I have been looking in the re urbanization of Orange County (since that is where I live) and I feel that there is a lot of room for improvement. More apartment units that are in reasonable walking distance to local food markets, jobs, and entertainment. A better transportation system could be implemented. I'm not saying to imitate Europe, but there is so really good models to benefit from. More cost-efficient ways to live that help our wallets, and that help our environment.
Today's market may not be the best for home builders-just check the financial news and you will see their predicament. Yet it may be the time for apartment owners/developers to seize the opportunity and make living more affordable for those who can not afford a house in the suburbs, and 200 bucks on gas a week to drive to work.
If you have any thoughts about the apartment housing industry, or the real estate market, send me a comment, and let us know what you are thinking?
But where are all these people going? Are they packing up, leaving town, and looking for new markets to enter that are easier on the wallet, such as the mid-west. Or are their families into apartments? Could it be a mixture of both?
California, on average, adds over 25,000 in population each year; but will that change now due to our drastic crunch (only time will tell). Will there be more urban developments, allowing families to move into rental units that are closer to their jobs, lessening the strain on gas, even though that means not owning their dream house. Maybe in this economy it is their only hope to live in the Greater Los Angeles area, where so many people call home and find work to bill pay the bills.
I have been looking in the re urbanization of Orange County (since that is where I live) and I feel that there is a lot of room for improvement. More apartment units that are in reasonable walking distance to local food markets, jobs, and entertainment. A better transportation system could be implemented. I'm not saying to imitate Europe, but there is so really good models to benefit from. More cost-efficient ways to live that help our wallets, and that help our environment.
Today's market may not be the best for home builders-just check the financial news and you will see their predicament. Yet it may be the time for apartment owners/developers to seize the opportunity and make living more affordable for those who can not afford a house in the suburbs, and 200 bucks on gas a week to drive to work.
If you have any thoughts about the apartment housing industry, or the real estate market, send me a comment, and let us know what you are thinking?
Housing downturn is a jolt to upscale Temecula
From LA times, staff writer Scott Gold
For almost 20 years, they've been painting the town red in Temecula.
Atop onion fields and grazing pastures, they've built a parade of 4,000- and 5,000-square-foot houses -- palaces, many of them, with turrets and faux backyard grottoes, with six-car garages and children's playrooms larger than the average Manhattan apartment.
Today, they're painting the dirt green.
"Here's one now," code enforcement officer Jean Voshall said as she pulled her hulking pickup up to the curb in a gated community called The Fairways.
At first glance, the house looked like so many others in Temecula: five bedrooms, mushroom-colored stucco walls, a seven iron away from a dapper golf course where two men prepared to tee off. A closer look at the lawn, however, revealed that it was dead and crunchy -- and had been spray-painted green.
The paint came courtesy of neighbors, in the hope that it might be less evident to passersby that the house was empty -- foreclosed and left to the elements, with no running water, no electricity and little chance of new occupants any time soon.
For more of the article, click here
For almost 20 years, they've been painting the town red in Temecula.
Atop onion fields and grazing pastures, they've built a parade of 4,000- and 5,000-square-foot houses -- palaces, many of them, with turrets and faux backyard grottoes, with six-car garages and children's playrooms larger than the average Manhattan apartment.
Today, they're painting the dirt green.
"Here's one now," code enforcement officer Jean Voshall said as she pulled her hulking pickup up to the curb in a gated community called The Fairways.
At first glance, the house looked like so many others in Temecula: five bedrooms, mushroom-colored stucco walls, a seven iron away from a dapper golf course where two men prepared to tee off. A closer look at the lawn, however, revealed that it was dead and crunchy -- and had been spray-painted green.
The paint came courtesy of neighbors, in the hope that it might be less evident to passersby that the house was empty -- foreclosed and left to the elements, with no running water, no electricity and little chance of new occupants any time soon.
For more of the article, click here
Thursday, June 5, 2008
Tips for Graffiti Prevention
To step up graffiti prevention efforts, consider the following:
1. Keep up the neighborhood
Make every effort to keep the appearance of a neighborhood clean and neat. Remove litter and trash, fix broken fences, trim landscape, and ensure all lighting is working properly. According to the Los Angeles Police Department, “an exterior appearance that suggests apathy and neglect attracts vandals.”
2. Remove graffiti promptly
Rapid removal of graffiti is an effective prevention tool. Data shows that removal within 24 to 48 hours results in a nearly zero rate of recurrence. Most Keep America Beautiful affiliates credit the reduction in graffiti in their communities to rapid removal.
3. Encourage citizen reporting
Educate the public about the impact of graffiti vandalism and provide a way for them to report graffiti. In many cities, an 800 number, a dedicated telephone line, or a web site is established for this purpose. Respond promptly to reports of graffiti vandalism.
4. Enforce anti-graffiti laws
Ensure that any existing anti-graffiti laws are being enforced. Law enforcement dedicated to tracking and apprehending graffiti vandals is a strong deterrent. A survey of arrested taggers found fear of getting caught was the top response when asked what would get them to stop tagging.
For a guide to developing local anti-graffiti laws, visit the National Council to Prevent Delinquency web site.
5. Educate Youth
Use the Graffiti Hurts curriculum and video to incorporate graffiti education and prevention into classroom activities, after school programs, and youth group activities. Keep Waco Beautiful, for example, has a mentoring program where high school students teach 4th and 5th graders about graffiti.
6. Use an "adopt-a-spot" program
A handful of communities provide citizen volunteers with graffiti cleanup kits to keep an area they have adopted graffiti free. These programs improve awareness and engage citizens in graffiti prevention. Get the contents of a graffiti cleanup kit.
7. Create a paint-brush mural
Use a community mural to restore a wall chronically hit with graffiti. Graffiti vandals rarely tag a paint-brush mural, and they are a great way to get the community involved in graffiti prevention. Murals can involve local artists, youth and community volunteers, and the local paint store, which may be willing to donate paint and brushes. Download a step-by-step guide for creating a mural.
8. Control Access
Make changes to build-in graffiti prevention:
* Incorporate natural deterrents, such as landscaping. Shrubs, thorny plants and vines will effectively restrict vandal access.
* Plan or add lighting to promote natural surveillance.
* Use fences, controlled entrance and exits, rails, and other barriers that discourage through traffic.
* Limit access to roofs by moving dumpsters away from walls and covering drainpipes to prevent vandals from scaling them.
* Use graffiti hoods to buffer freeway signs.
* Incorporate metal baffles on sign poles, similar to squirrel baffles on bird feeders.
9. Employ graffiti resistant surfaces
To vandal proof targeted areas use:
* Graffiti resistant materials or coatings. The city of Tucson, AZ, for example, requires that walls of new buildings be constructed of or painted with graffiti resistant materials.
* Sacrificial coatings, which allow graffiti to be washed off. Sacrificial coatings must be re-applied after each graffiti clean-up.
* Textured surfaces, which are less attractive to graffiti vandals.
* Dark colored or colorful surfaces; neither of these provide a good canvas for a graffiti vandal.
10. Monitor graffiti-prone locations
Get the support of law enforcement to step up police monitoring of locations that are frequently hit by graffiti. A few communities are using some type of security camera in areas that are frequently graffitied. Also consider organizing a Neighborhood Watch to keep an eye on targeted sites.
11. Employ curfews
A national survey of police agencies found that the vast majority felt curfews were an effective tool to control vandalism, graffiti, nighttime burglary, and car theft. Most jurisdictions with curfews had them in effect for several years. A survey of 800 cities conducted by the National League of Cities found curfews effective for curbing gang violence as well.
12. Provide alternatives
The Institute for Law and Justice, Inc. manual on safe neighborhoods suggests diverting graffiti criminals to positive alternatives. The effectiveness of this approach is largely undocumented, but consider some of the following to encourage youth in more positive directions:
* Youth Centers - A 2002 Colorado study recommends establishing centers for youth to gain leadership skills and to express themselves in a variety of ways. The centers teach responsibility and provide a safe place to have fun.
* Arts Programs - A 1999 U.S. Conference of Mayors study found that youth participating in arts programs exhibit improvements in academic performance, conflict resolution, team building and decreased frequency of delinquent behavior. Get a YouthARTS Tool Kit, developed through Americans for the Arts, and create an arts program to address youth crime.
* Community Programs - Community programs encourage youth to take control of their lives, make good choices, and provide a substitute for vandalism. Seattle Public Utilities has developed two such programs, ArtWorks and Panels for Progress.
* Youth Involvement - Involve youth and schools in graffiti prevention efforts, such as cleanups or mural projects. Keep Houston Beautiful initiated a mural series where they paired groups of neighborhood youth with professional artists to design and paint a mural on a chronically tagged wall.
What About Legal Walls?
Legal walls are largely ineffective as a deterrent or graffiti prevention device. Communities that have tried legal walls, or areas that permit graffiti, find them ineffective. Over a dozen cities in California, Illinois, and other states have all found them to be a failure.
Legal walls send a mixed message - sponsoring graffiti in an effort to rid a community of graffiti. Community records indicate they may work at first, but after a period of time, the surrounding areas also become covered with graffiti. Data also shows no decrease in arrests for graffiti in cities where there are legal walls.
About Graffiti Hurts
Graffiti Hurts® - Care for Your Community is aimed at educating individuals about the consequences of graffiti in their communities. The fact is, graffiti is harmful to everyone -- homeowners, businesses, schools, and you.
Graffiti clean up alone costs the U.S. over $8 billion annually. And, research shows that graffiti results in more graffiti, vandalism, and crime in suburban and urban communities.
Through the Graffiti Hurts® kit of resources, communities can get educated about graffiti and build local partnerships to prevent and remove it.
We hope you will help keep our communities clean and explore positive ways for artistic expression that support individual talent and instill community pride.
1. Keep up the neighborhood
Make every effort to keep the appearance of a neighborhood clean and neat. Remove litter and trash, fix broken fences, trim landscape, and ensure all lighting is working properly. According to the Los Angeles Police Department, “an exterior appearance that suggests apathy and neglect attracts vandals.”
2. Remove graffiti promptly
Rapid removal of graffiti is an effective prevention tool. Data shows that removal within 24 to 48 hours results in a nearly zero rate of recurrence. Most Keep America Beautiful affiliates credit the reduction in graffiti in their communities to rapid removal.
3. Encourage citizen reporting
Educate the public about the impact of graffiti vandalism and provide a way for them to report graffiti. In many cities, an 800 number, a dedicated telephone line, or a web site is established for this purpose. Respond promptly to reports of graffiti vandalism.
4. Enforce anti-graffiti laws
Ensure that any existing anti-graffiti laws are being enforced. Law enforcement dedicated to tracking and apprehending graffiti vandals is a strong deterrent. A survey of arrested taggers found fear of getting caught was the top response when asked what would get them to stop tagging.
For a guide to developing local anti-graffiti laws, visit the National Council to Prevent Delinquency web site.
5. Educate Youth
Use the Graffiti Hurts curriculum and video to incorporate graffiti education and prevention into classroom activities, after school programs, and youth group activities. Keep Waco Beautiful, for example, has a mentoring program where high school students teach 4th and 5th graders about graffiti.
6. Use an "adopt-a-spot" program
A handful of communities provide citizen volunteers with graffiti cleanup kits to keep an area they have adopted graffiti free. These programs improve awareness and engage citizens in graffiti prevention. Get the contents of a graffiti cleanup kit.
7. Create a paint-brush mural
Use a community mural to restore a wall chronically hit with graffiti. Graffiti vandals rarely tag a paint-brush mural, and they are a great way to get the community involved in graffiti prevention. Murals can involve local artists, youth and community volunteers, and the local paint store, which may be willing to donate paint and brushes. Download a step-by-step guide for creating a mural.
8. Control Access
Make changes to build-in graffiti prevention:
* Incorporate natural deterrents, such as landscaping. Shrubs, thorny plants and vines will effectively restrict vandal access.
* Plan or add lighting to promote natural surveillance.
* Use fences, controlled entrance and exits, rails, and other barriers that discourage through traffic.
* Limit access to roofs by moving dumpsters away from walls and covering drainpipes to prevent vandals from scaling them.
* Use graffiti hoods to buffer freeway signs.
* Incorporate metal baffles on sign poles, similar to squirrel baffles on bird feeders.
9. Employ graffiti resistant surfaces
To vandal proof targeted areas use:
* Graffiti resistant materials or coatings. The city of Tucson, AZ, for example, requires that walls of new buildings be constructed of or painted with graffiti resistant materials.
* Sacrificial coatings, which allow graffiti to be washed off. Sacrificial coatings must be re-applied after each graffiti clean-up.
* Textured surfaces, which are less attractive to graffiti vandals.
* Dark colored or colorful surfaces; neither of these provide a good canvas for a graffiti vandal.
10. Monitor graffiti-prone locations
Get the support of law enforcement to step up police monitoring of locations that are frequently hit by graffiti. A few communities are using some type of security camera in areas that are frequently graffitied. Also consider organizing a Neighborhood Watch to keep an eye on targeted sites.
11. Employ curfews
A national survey of police agencies found that the vast majority felt curfews were an effective tool to control vandalism, graffiti, nighttime burglary, and car theft. Most jurisdictions with curfews had them in effect for several years. A survey of 800 cities conducted by the National League of Cities found curfews effective for curbing gang violence as well.
12. Provide alternatives
The Institute for Law and Justice, Inc. manual on safe neighborhoods suggests diverting graffiti criminals to positive alternatives. The effectiveness of this approach is largely undocumented, but consider some of the following to encourage youth in more positive directions:
* Youth Centers - A 2002 Colorado study recommends establishing centers for youth to gain leadership skills and to express themselves in a variety of ways. The centers teach responsibility and provide a safe place to have fun.
* Arts Programs - A 1999 U.S. Conference of Mayors study found that youth participating in arts programs exhibit improvements in academic performance, conflict resolution, team building and decreased frequency of delinquent behavior. Get a YouthARTS Tool Kit, developed through Americans for the Arts, and create an arts program to address youth crime.
* Community Programs - Community programs encourage youth to take control of their lives, make good choices, and provide a substitute for vandalism. Seattle Public Utilities has developed two such programs, ArtWorks and Panels for Progress.
* Youth Involvement - Involve youth and schools in graffiti prevention efforts, such as cleanups or mural projects. Keep Houston Beautiful initiated a mural series where they paired groups of neighborhood youth with professional artists to design and paint a mural on a chronically tagged wall.
What About Legal Walls?
Legal walls are largely ineffective as a deterrent or graffiti prevention device. Communities that have tried legal walls, or areas that permit graffiti, find them ineffective. Over a dozen cities in California, Illinois, and other states have all found them to be a failure.
Legal walls send a mixed message - sponsoring graffiti in an effort to rid a community of graffiti. Community records indicate they may work at first, but after a period of time, the surrounding areas also become covered with graffiti. Data also shows no decrease in arrests for graffiti in cities where there are legal walls.
About Graffiti Hurts
Graffiti Hurts® - Care for Your Community is aimed at educating individuals about the consequences of graffiti in their communities. The fact is, graffiti is harmful to everyone -- homeowners, businesses, schools, and you.
Graffiti clean up alone costs the U.S. over $8 billion annually. And, research shows that graffiti results in more graffiti, vandalism, and crime in suburban and urban communities.
Through the Graffiti Hurts® kit of resources, communities can get educated about graffiti and build local partnerships to prevent and remove it.
We hope you will help keep our communities clean and explore positive ways for artistic expression that support individual talent and instill community pride.
U.S. Mortgage Malaise Deepens
Taken from Forbes.com, written by Maurna Desmond
Lenders foreclosed on U.S. mortgages in the first quarter at a rate that hasn't been seen for nearly three decades, with high-quality loans failing even faster than subprime. The data, released Thursday, was an ominous sign that a housing recovery probably is not in the wings.
The Mortgage Banker's Association said foreclosures surged 70.7% in the quarter, with 0.99% of outstanding U.S. mortgages entering the process in the first three months of 2008 versus 0.58% during the same time last year. The latest number was the highest rate in 29 years.
For the whole article click here
Lenders foreclosed on U.S. mortgages in the first quarter at a rate that hasn't been seen for nearly three decades, with high-quality loans failing even faster than subprime. The data, released Thursday, was an ominous sign that a housing recovery probably is not in the wings.
The Mortgage Banker's Association said foreclosures surged 70.7% in the quarter, with 0.99% of outstanding U.S. mortgages entering the process in the first three months of 2008 versus 0.58% during the same time last year. The latest number was the highest rate in 29 years.
For the whole article click here
Tuesday, June 3, 2008
Calif. home price down 24%, nation’s worst
First American LoanPerformance says California is again the nation’s worst housing market with prices falling at a 24.37% annual rate as of late April. California has held this dubious distinction since May ‘07.
Following California in April price tumbles: Florida at -17.11%; Nevada at -16.61%; Arizona at -15.78%; and Ohio at -13.41%.
National best was Utah, up 4.13%, and Montana, +4.12%. Only 17 of the 50 states and District of Columbia showed price gains in the year, according to FALP’s math that tracks “paired sales” — gains or losses on individual homes.
To check out more, and to see what others have to say about it, check out Lasner's blog on real estate.
Following California in April price tumbles: Florida at -17.11%; Nevada at -16.61%; Arizona at -15.78%; and Ohio at -13.41%.
National best was Utah, up 4.13%, and Montana, +4.12%. Only 17 of the 50 states and District of Columbia showed price gains in the year, according to FALP’s math that tracks “paired sales” — gains or losses on individual homes.
To check out more, and to see what others have to say about it, check out Lasner's blog on real estate.
Friday, May 30, 2008
Is It the End of 6% Real Estate Commissions?
This week the Justice Department reached an antitrust settlement with the National Association of Realtors that is meant to spur competition and bring down the standard 6% commission that comes with each real estate transaction. Basically, the NAR is no longer able to withhold the information on multiple listing services from discount online brokers such as Redfin and ZipRealty. Will consumers like us see a huge deduction in real estate transaction prices soon?
For more visit Wisebread
For more visit Wisebread
Thursday, May 29, 2008
Foreclosures and Sinking Prices...
Foreclosures and sinking prices maybe what it takes to rebound the housing slump, but it will not be anytime soon that is for sure.
Robert Sheridan of RISMedia, states that "We’re in a mess of our own making and it’s time to own up to it. Prices need to fall, credit needs to flow (more responsibly this time) and everyone - from homeowners to industry professionals - needs to lower their short-term expectations. We won’t be hearing any good news until we come to grips with the bad. We’ll get through this, of course, and the cycle will start again. When it does, I hope hindsight makes us much, much wiser."
The truth is that many are not wanting to see prices fall for another two years, but it may take that long for a turnaround, and I think that this crunch will make us "much, much wiser," and something good will come out of this mess. People who I talk to, who are not actively involved in the real estate industry, claim that it will bounce back fast, and we have already seen the worst; yet they miss the signs, decreasing home prices each month, and increasing activity of foreclosures.
Yet decreasing home prices, and increasing foreclosures, might be what jet starts the home market once more, argues a news article from Bloomberg. "In some regions, such as San Francisco, sinking prices may already may be helping the housing market recover." Banks do not want to hold on to the properties, so they put it on the market very quickly, and with that comes low prices that will help the market adjust.
Robert Sheridan of RISMedia, states that "We’re in a mess of our own making and it’s time to own up to it. Prices need to fall, credit needs to flow (more responsibly this time) and everyone - from homeowners to industry professionals - needs to lower their short-term expectations. We won’t be hearing any good news until we come to grips with the bad. We’ll get through this, of course, and the cycle will start again. When it does, I hope hindsight makes us much, much wiser."
The truth is that many are not wanting to see prices fall for another two years, but it may take that long for a turnaround, and I think that this crunch will make us "much, much wiser," and something good will come out of this mess. People who I talk to, who are not actively involved in the real estate industry, claim that it will bounce back fast, and we have already seen the worst; yet they miss the signs, decreasing home prices each month, and increasing activity of foreclosures.
Yet decreasing home prices, and increasing foreclosures, might be what jet starts the home market once more, argues a news article from Bloomberg. "In some regions, such as San Francisco, sinking prices may already may be helping the housing market recover." Banks do not want to hold on to the properties, so they put it on the market very quickly, and with that comes low prices that will help the market adjust.
Wednesday, May 28, 2008
Apartment Management Discovers a "Must Have" Tool for Property Management
XAP Realty, a Los Angeles based real estate marketing company has created a lead capture solution to utilize the fact that cell phones are now carried by all prospective buyers and renters. The concept is extremely simple, www.xaprealty.com provides real estate agents, individual sellers, and property management companies with interactive signs. The signs allow prospects to request the listing information of a particular property by sending a text message. the prospect is instantaneously sent the listing details including: address, price, beds, baths, acreage, amenities, contact information, and more. Simultaneously, the agent or property manager is sent an email that includes the prospects phone number and the listing that he/she is interested in viewing. The service acts like an on-site assistant, reporting full property details and taking down new lead information 24 hours a day 7 days per week. Paul Warkenting of KAMAP Property Management says, "The service increased our monthly number of leads, and brought us more business because it shows our commitment to customer service."
If this new, intriguing service could benefit you, then go over to their website right now and check it out.
If this new, intriguing service could benefit you, then go over to their website right now and check it out.
Wednesday, May 21, 2008
Apartment smoking bans. Good idea?
Recently we had an article about smoking in apartments, and now I found a survey on Lansner on Real Estate from the OCRegister that shows what the actually tenants think about putting a ban on smoking in an apartment complex. Write in to us and tell us what you think.
Apartments.com’s latest tenant survey says renters — even those who don’t smoke — aren’t that crazy about smoking bans.
Of those surveyed, 44.7% opposed the idea of making smoking in apartments illegal while 39.1% supported a ban. Nearly two-thirds of those surveyed — 61.9% — were non-smokers.
About a third of the respondents — 31.8% — said a property management company shouldn’t decide that you can’t smoke in the privacy of your own apartment. Another 22.2% didn’t mind people smoking in their own place as long as it didn’t affect them.
Apartments.com’s latest tenant survey says renters — even those who don’t smoke — aren’t that crazy about smoking bans.
Of those surveyed, 44.7% opposed the idea of making smoking in apartments illegal while 39.1% supported a ban. Nearly two-thirds of those surveyed — 61.9% — were non-smokers.
About a third of the respondents — 31.8% — said a property management company shouldn’t decide that you can’t smoke in the privacy of your own apartment. Another 22.2% didn’t mind people smoking in their own place as long as it didn’t affect them.
Tuesday, May 20, 2008
Deadbeat Homeowners Hit The Road
New article from Forbes.com
There was a time in America when losing your home to the mortgage lender was about the worst financial calamity that could befall a person. Not only were you homeless, your dignity was trampled by the repossession of your property.
That was Norman Rockwell. This is now.
To the distress of many banks and investors, American borrowers are increasingly viewing voluntary foreclosure as a practical financial decision, stripped of its taboo. Perhaps a bigger problem is that banks don't want to talk about the problem and they don't appear to know what to do about it. As long as it persists, there will be downward pressure on home prices, especially in overbuilt markets where the supply of housing already outstrips demand.
For the homeowners, the problem is a combination of falling real estate prices and the end of low-cost teaser periods on their mortgages. Those who bought at the crest of the market are finding their mortgages worth more than their homes. Faced with payments they can't afford and houses they have no stake in, these people are just hitting the road. Though difficult to statistically isolate, there is evidence pointing to the trend.
In March, according to foreclosure database RealtyTrac, foreclosures rose 54.0% year-over-year, but bank repossessions surged at double that rate, 129.0%. What accounts for the difference? Rick Sharga, vice president of marketing at RealtyTrac, said most March repossessions likely involved walkaways: homeowners who simply mailed their keys to the bank and moved. There was no need for the banks to foreclose.
In mid-April, Chief Risk Officer Don Truslow of Wachovia acknowledged the troubling trend during a conference call: "I don't know where the tipping point is, but somewhere when a borrower crosses the 100.0% loan-to-value, somewhere north of that . . . their propensity to just default and stop paying their mortgage rises dramatically and really accelerates up."
Even more disconcerting, Truslow added that the trend was "almost regardless" of borrowers' creditworthiness. Lender's are beginning to report that loan-to-value ratios are better indicators of the likelihood of default than borrowers' FICO scores, a widely used metric of creditworthiness developed by Fair, Isaac. (See "Subprime In Sheep's Clothing")
But Wachovia doesn't have a plan to deal with the phenomenon.
"We are concerned about the issue, we just don't have a strategy yet," said Don Vecchiarello, a spokesperson for Wachovia (nyse: WB - news - people ). "We are monitoring the walkaway phenomenon and if the issue persists we will develop a strategy around it."
Banks won't come out and say how many walkaways they are seeing month after month, but most will offer anecdotal evidence of the trend. The unusual element of walkaways in this cycle that banks will acknowledge is that borrowers with relatively good credit files are opting to exit their mortgage agreements.
Washington Mutual (nyse: WM - news - people ) isn't in much better shape. "In short, we don't break out walkaways or provide any metrics on them," said Derek Aney, a company spokesperson. Aney added that the bank "acknowledges the phenomenon and manages it as part of its overall loss-mitigation activities."
If it's in a lender's best interest to simply claim the property and cancel the mortgage debt, it will accept the deed in lieu of foreclosure and write down the difference between the current value of the home and the remaining mortgage. RealtyTrac's Sharga said that deeds in lieu are actually better for both the lender and the borrower.
For borrowers, the process is slightly less severe than a foreclosure on their credit records. Also, the bank essentially agrees not to pursue any further payments. For the lender, there are savings in not going through the auction process. This is expecially true if the home has lost value, as is often the case in today's market. There's also the relative ease of process relative to the time and expense of a lengthy foreclosure proceeding or the potential of the owner suddenly abandoning the home.
Thomas Kerrigan, a real estate lawyer in New York, said that if a borrower has other assets besides the home, than there is a much greater likelihood that the lender will pursue the deficiency between the total mortgage and the depreciated home price. However, if the lender believes there are no other assets, it will likely make a business decision that it isn't worth trying to recoup the loss. "You can't," Kerrigan noted, "get blood out of a stone."
Kerrigan also said that that foreclosure law varies from state to state and that banks will have to develop their walkaway strategies accordingly. States with judicial foreclosures, which emphasize homeowner rights, have the most cumbersome procedures. Lenders luck out in non-judicial states like California where foreclosure is a relatively speedy process. Walkaways would probably prefer judicial states because they can camp out in their homes while the banks spend up to a year trying to foreclose.
"It really is a moral dilemma, because it's wrong, but the repercussions are credit-based," said Nancy Flint-Budde, a certified financial planner in Salem, New York. "Destroyed credit is a still huge deterrent, but if someone is willing to throw their credit score away for seven years then walking away is an option." Negative credit items are typically deleted from consumers' reports after seven years.
Because many people "went in as investors," rather than homeowners, "they went in with a different mindset and might be willing to just walkway." Flint-Budde added, "This is why traditionally people had to put more money down when they borrowed money for a second home or investment property."
Glen Costello, a structured finance officer at Fitch, said that walkaways are nothing new, but this cycle's factors are. "One could understand that if someone had lost their job and all their savings, they were being forced to give up their home," said Costello. Now, however, homeowners aren't as much vulnerable to foreclosure as amenable. They just don't want to pay high monthly costs for properties in which they do not have stakes.
There was a time in America when losing your home to the mortgage lender was about the worst financial calamity that could befall a person. Not only were you homeless, your dignity was trampled by the repossession of your property.
That was Norman Rockwell. This is now.
To the distress of many banks and investors, American borrowers are increasingly viewing voluntary foreclosure as a practical financial decision, stripped of its taboo. Perhaps a bigger problem is that banks don't want to talk about the problem and they don't appear to know what to do about it. As long as it persists, there will be downward pressure on home prices, especially in overbuilt markets where the supply of housing already outstrips demand.
For the homeowners, the problem is a combination of falling real estate prices and the end of low-cost teaser periods on their mortgages. Those who bought at the crest of the market are finding their mortgages worth more than their homes. Faced with payments they can't afford and houses they have no stake in, these people are just hitting the road. Though difficult to statistically isolate, there is evidence pointing to the trend.
In March, according to foreclosure database RealtyTrac, foreclosures rose 54.0% year-over-year, but bank repossessions surged at double that rate, 129.0%. What accounts for the difference? Rick Sharga, vice president of marketing at RealtyTrac, said most March repossessions likely involved walkaways: homeowners who simply mailed their keys to the bank and moved. There was no need for the banks to foreclose.
In mid-April, Chief Risk Officer Don Truslow of Wachovia acknowledged the troubling trend during a conference call: "I don't know where the tipping point is, but somewhere when a borrower crosses the 100.0% loan-to-value, somewhere north of that . . . their propensity to just default and stop paying their mortgage rises dramatically and really accelerates up."
Even more disconcerting, Truslow added that the trend was "almost regardless" of borrowers' creditworthiness. Lender's are beginning to report that loan-to-value ratios are better indicators of the likelihood of default than borrowers' FICO scores, a widely used metric of creditworthiness developed by Fair, Isaac. (See "Subprime In Sheep's Clothing")
But Wachovia doesn't have a plan to deal with the phenomenon.
"We are concerned about the issue, we just don't have a strategy yet," said Don Vecchiarello, a spokesperson for Wachovia (nyse: WB - news - people ). "We are monitoring the walkaway phenomenon and if the issue persists we will develop a strategy around it."
Banks won't come out and say how many walkaways they are seeing month after month, but most will offer anecdotal evidence of the trend. The unusual element of walkaways in this cycle that banks will acknowledge is that borrowers with relatively good credit files are opting to exit their mortgage agreements.
Washington Mutual (nyse: WM - news - people ) isn't in much better shape. "In short, we don't break out walkaways or provide any metrics on them," said Derek Aney, a company spokesperson. Aney added that the bank "acknowledges the phenomenon and manages it as part of its overall loss-mitigation activities."
If it's in a lender's best interest to simply claim the property and cancel the mortgage debt, it will accept the deed in lieu of foreclosure and write down the difference between the current value of the home and the remaining mortgage. RealtyTrac's Sharga said that deeds in lieu are actually better for both the lender and the borrower.
For borrowers, the process is slightly less severe than a foreclosure on their credit records. Also, the bank essentially agrees not to pursue any further payments. For the lender, there are savings in not going through the auction process. This is expecially true if the home has lost value, as is often the case in today's market. There's also the relative ease of process relative to the time and expense of a lengthy foreclosure proceeding or the potential of the owner suddenly abandoning the home.
Thomas Kerrigan, a real estate lawyer in New York, said that if a borrower has other assets besides the home, than there is a much greater likelihood that the lender will pursue the deficiency between the total mortgage and the depreciated home price. However, if the lender believes there are no other assets, it will likely make a business decision that it isn't worth trying to recoup the loss. "You can't," Kerrigan noted, "get blood out of a stone."
Kerrigan also said that that foreclosure law varies from state to state and that banks will have to develop their walkaway strategies accordingly. States with judicial foreclosures, which emphasize homeowner rights, have the most cumbersome procedures. Lenders luck out in non-judicial states like California where foreclosure is a relatively speedy process. Walkaways would probably prefer judicial states because they can camp out in their homes while the banks spend up to a year trying to foreclose.
"It really is a moral dilemma, because it's wrong, but the repercussions are credit-based," said Nancy Flint-Budde, a certified financial planner in Salem, New York. "Destroyed credit is a still huge deterrent, but if someone is willing to throw their credit score away for seven years then walking away is an option." Negative credit items are typically deleted from consumers' reports after seven years.
Because many people "went in as investors," rather than homeowners, "they went in with a different mindset and might be willing to just walkway." Flint-Budde added, "This is why traditionally people had to put more money down when they borrowed money for a second home or investment property."
Glen Costello, a structured finance officer at Fitch, said that walkaways are nothing new, but this cycle's factors are. "One could understand that if someone had lost their job and all their savings, they were being forced to give up their home," said Costello. Now, however, homeowners aren't as much vulnerable to foreclosure as amenable. They just don't want to pay high monthly costs for properties in which they do not have stakes.
Thursday, May 15, 2008
$100 prize
Just reminding everyone of the promotion Apartment Management is offering. Write an article, less than 1,500 words, about your experience in the apartment industry. It can be about anything, it is totally up to you. All it has to be is interesting, and if yours is picked, then you will get a $100 American Express gift card.
Just make sure you send your submissions to editor@aptmags.com by the end of June.
Just make sure you send your submissions to editor@aptmags.com by the end of June.
Secondhand Smoke in Apartments
A guide for owners and managers by The American Nonsmokers' Rights Foundation
"Secondhand smoke is the third leading cause of preventable death in the United States. Approximately 70,000 people die annually from diseases caused by secondhand smoke, with hundreds of thousands more suffering ill effects from exposure. Multi-unit dwellings present a particular challenge for dealing with this significant health and nuisance problem. Tobacco smoke from one unit may seep through cracks, be circulated by a shared ventilation system, or otherwise enter the living space of another. You may wonder what you can do to mitigate some of these problems."
Improved Ventilation May Not Solve the Problem
Standards cannot ensure the avoidance of adverse health effects from tobacco smoke. Yet if you improve the system with fresh air intake, installing better filters, and limit amount of air exhausted from one unit to another, it can help
Work Creatively with Tenants toward a Solution
Work with tenants, and show them the effects of their habits, and how their lease agreement prevent them from engaging in behaviors that interferes with other tenants enjoyment.
To Completely Solve the Problem, Eliminate Smoking
There is no constitutional or legal right to smoke. You can make policies that are phased in gradually with new leases "containing a clause that prohibits smoking both indoors and on all grounds."
There are many reasons to implement non-smoking policies, so check out the editorial by ANRA, and contact them to see what you can do to cut down on all the preventable deaths caused by second hand smoking.
"Secondhand smoke is the third leading cause of preventable death in the United States. Approximately 70,000 people die annually from diseases caused by secondhand smoke, with hundreds of thousands more suffering ill effects from exposure. Multi-unit dwellings present a particular challenge for dealing with this significant health and nuisance problem. Tobacco smoke from one unit may seep through cracks, be circulated by a shared ventilation system, or otherwise enter the living space of another. You may wonder what you can do to mitigate some of these problems."
Improved Ventilation May Not Solve the Problem
Standards cannot ensure the avoidance of adverse health effects from tobacco smoke. Yet if you improve the system with fresh air intake, installing better filters, and limit amount of air exhausted from one unit to another, it can help
Work Creatively with Tenants toward a Solution
Work with tenants, and show them the effects of their habits, and how their lease agreement prevent them from engaging in behaviors that interferes with other tenants enjoyment.
To Completely Solve the Problem, Eliminate Smoking
There is no constitutional or legal right to smoke. You can make policies that are phased in gradually with new leases "containing a clause that prohibits smoking both indoors and on all grounds."
There are many reasons to implement non-smoking policies, so check out the editorial by ANRA, and contact them to see what you can do to cut down on all the preventable deaths caused by second hand smoking.
Wednesday, May 14, 2008
Real Estate Management Among Top Jobs in U.S.
The Institute of Real Estate Management (IREM) recently wrote an article in our magazine that described the growth, and future, of real estate management jobs. They say that "career opportunities in real estate management are the best ever."
Here are some data that supports this argument:
-Last year, Money magazine and Salary.com ranked real estate management 23rd among the 'Best Jobs in America.'
-U.S. Bureau of Labor Statistics assessment of high-growth, high-wage occupations ranks real estate management 38th among the top 50 jobs that are growing faster than the average
-Spring 2007 issue of Selectleaders Job Barometer reports a 35% increase in commercial real estate job postings from February to April 2007, with real estate management second only to finance in postings.
IREM is "confident that demand for real estate managers will continue to grow due to the confluence of these two factors: (1) the unstoppable forces of demographics in the work force exacerbated by generational change, and (2) the market dynamics of real estate values as driven by new product development, interest rates, occupancy levels and cap rates."
If you want to know more, check out our magazine online at www.aptmags.com
Here are some data that supports this argument:
-Last year, Money magazine and Salary.com ranked real estate management 23rd among the 'Best Jobs in America.'
-U.S. Bureau of Labor Statistics assessment of high-growth, high-wage occupations ranks real estate management 38th among the top 50 jobs that are growing faster than the average
-Spring 2007 issue of Selectleaders Job Barometer reports a 35% increase in commercial real estate job postings from February to April 2007, with real estate management second only to finance in postings.
IREM is "confident that demand for real estate managers will continue to grow due to the confluence of these two factors: (1) the unstoppable forces of demographics in the work force exacerbated by generational change, and (2) the market dynamics of real estate values as driven by new product development, interest rates, occupancy levels and cap rates."
If you want to know more, check out our magazine online at www.aptmags.com
Tuesday, May 13, 2008
Newer O.C. apartments suffer more vacancies
Taken from the Lasner on Real Estate blog, posted by Mary Ann Millbourn
REIS Inc. reports that during the first quarter, O.C. apartments built after 1999 had 2.5 times the vacancy rate of the county as a whole.
Countywide vacancies were 4% in the 784 O.C. complexes that REIS studied. Units constructed after 1999, however, had a 10% vacancy rate. The oldest apartments — built before 1970 — had the fewest vacancies at 2.8%.
Rents made the difference. Apartments built before 1970 rented for $1,359 while those constructed after 1999 went for $2,055. The average county rent was $1,550.
Year Built Vacancy Rate
Before 1970 2.8%
1970-1979 3.2%
1980-1989 4.2%
1990-1999 3.6%
After 1999 10.0%
All 4.0%
REIS Inc. reports that during the first quarter, O.C. apartments built after 1999 had 2.5 times the vacancy rate of the county as a whole.
Countywide vacancies were 4% in the 784 O.C. complexes that REIS studied. Units constructed after 1999, however, had a 10% vacancy rate. The oldest apartments — built before 1970 — had the fewest vacancies at 2.8%.
Rents made the difference. Apartments built before 1970 rented for $1,359 while those constructed after 1999 went for $2,055. The average county rent was $1,550.
Year Built Vacancy Rate
Before 1970 2.8%
1970-1979 3.2%
1980-1989 4.2%
1990-1999 3.6%
After 1999 10.0%
All 4.0%
Thursday, May 8, 2008
Apartment resident safety
Apartment.com has some helpful tips for resident dwellers. It is important for apartment managers to make sure the tenants are safe, and feel secure in their own apartment complex. Here are some tips that managers should tell their tenants, and make sure the units in their care will be a safe place, and keep their tenants happy, because tenants will pick up and move if they feel unsafe in their own home.
Our biggest “mom” tip is to purchase renter’s insurance to protect your valuables. Even with insurance you still need to take steps to protect yourself. Here are some other easy ways to make you, your apartment and your belongings much safer.
Do…
* Write only your last name or initials on your mailbox.
* Although you may have to pay a small fee, it’s a good idea to have an unlisted phone number for safety reasons. Having an unlisted number will also cut down on solicitation calls.
* Make sure the locks on all doors leading into your apartment have been changed since the last tenant was living there. You may need to make copies of your keys for roommates but most apartment owners forbid copies made for anyone not living in the apartment. This includes your best friend, boy/girlfriend and parents. For safety reasons, keep copies of keys in your hands only.
* Apartment doors should all have peephole viewers. If you don’t have one, ask your landlord to install one.
* On the elevator, avoid riding alone with a stranger. If you get stuck with someone you do not know, stand near the control panel so you can exit in an emergency or if the stranger makes you feel uncomfortable in any way.
* Stay alert when entering your apartment. Don’t talk on your cell phone or look preoccupied when walking toward your building. Criminals look for a weak target and are more likely to pass up someone who appears focused, aware and strong.
* Report bad lighting or overgrown shrubbery to your landlord. You are never being too picky when it comes to your safety.
* Inventory the description, serial number and cost of your valuables. Keep a copy of your records online, in a fire-proof locked box or in a safe deposit box in a bank. Take pictures of your most valuable items and attach those to your receipts to make any insurance claims run as smoothly as possible.
* Keep a broom handle or other long stick in the track of sliding glass doors. This may deter a break in.
* Purchase light timers and set them so that your lights turn on when you’re away from home in the evening.
* Take in your newspaper and packages on a daily basis.
Our biggest “mom” tip is to purchase renter’s insurance to protect your valuables. Even with insurance you still need to take steps to protect yourself. Here are some other easy ways to make you, your apartment and your belongings much safer.
Do…
* Write only your last name or initials on your mailbox.
* Although you may have to pay a small fee, it’s a good idea to have an unlisted phone number for safety reasons. Having an unlisted number will also cut down on solicitation calls.
* Make sure the locks on all doors leading into your apartment have been changed since the last tenant was living there. You may need to make copies of your keys for roommates but most apartment owners forbid copies made for anyone not living in the apartment. This includes your best friend, boy/girlfriend and parents. For safety reasons, keep copies of keys in your hands only.
* Apartment doors should all have peephole viewers. If you don’t have one, ask your landlord to install one.
* On the elevator, avoid riding alone with a stranger. If you get stuck with someone you do not know, stand near the control panel so you can exit in an emergency or if the stranger makes you feel uncomfortable in any way.
* Stay alert when entering your apartment. Don’t talk on your cell phone or look preoccupied when walking toward your building. Criminals look for a weak target and are more likely to pass up someone who appears focused, aware and strong.
* Report bad lighting or overgrown shrubbery to your landlord. You are never being too picky when it comes to your safety.
* Inventory the description, serial number and cost of your valuables. Keep a copy of your records online, in a fire-proof locked box or in a safe deposit box in a bank. Take pictures of your most valuable items and attach those to your receipts to make any insurance claims run as smoothly as possible.
* Keep a broom handle or other long stick in the track of sliding glass doors. This may deter a break in.
* Purchase light timers and set them so that your lights turn on when you’re away from home in the evening.
* Take in your newspaper and packages on a daily basis.
Wednesday, May 7, 2008
Check out this real estate blog
Pied Piper Speaks:
Since 2005, Pied Piper Speaks On Real Estate has been a recognized real estate blog leader, providing literally thousands of North America's finest agents with the kind of creative, dynamic, effective and powerful marketing ideas they need to survive and succeed in the fiercely competitive arena of real estate.
Since 2005, Pied Piper Speaks On Real Estate has been a recognized real estate blog leader, providing literally thousands of North America's finest agents with the kind of creative, dynamic, effective and powerful marketing ideas they need to survive and succeed in the fiercely competitive arena of real estate.
Friday, May 2, 2008
Real estate contest
We are pleased to announce that we were allowed to enter into a contest hosted by FHA Mortgage Center. They are holding a contest for blogs about the real estate industry, and I decided to enter the Apartment Management blog, and see what damage we could do. It would be awesome if you could support us and vote for our blog. Thanks.
Thursday, May 1, 2008
Taxpayer Wins Victory in Wealth Transfer Case
New article by Michael Trainotti
On March 26, 2008 the IRS lost a major case in the tax court dealing with family wealth transfers not being included in the decedent’s estate. As will be discussed below, the tax court found that there was a sufficient business non tax purpose in creating a LLC to manage family assets for the next generation and making lifetime gifts into trusts. This is a very important point in the successful outcome against the IRS.
Facts of Case. Decedent and her physician husband had a long history of having and encouraging a close knit family, having three daughters and regularly taking an annual family vacation which included family meetings considering business and investment matters and often involving accountants and attorneys as invitees. Dr. Mirowski had been developing an implantable defibrillator device and to pursue its development and funding, the family moved to the U.S. in 1968, and within 10 years Dr. Mirowski was successful in developing an implantable cardioverter defibrillator(ICD) thereafter achieving success with implantation in humans.
Mrs. Mirowski at all times was an astute and involved financial manager, as stated by the court, "a careful,
deliberate and thoughtful decision maker, especially with respect to financial matters." She worked with an investment advisor at Goldman Sachs to handle a rapidly growing investment portfolio, eventually agreeing to the principle of diversification, and in early 2001 consolidated all investments with Goldman Sachs.
The concept of using an investment entity, here a limited liability company (LLC), as a vehicle for pooling of family assets first came up during a presentation to decedent by U.S. Trust.
The LLC documents were finalized following the August 14, 2001 meeting, and now, beginning at page 18 of the Tax Court's opinion, the findings of fact chronicle the purposes of the LLC, the steps in formation and funding, the gifts by the initial sole member, the decedent, of 16% interests in the LLC to each of the daughter's trusts, all leading up to the sudden September 10, 2001 deterioration of decedent's health and her death the next day, the infamous 911 tragedy.
1. Joint management of the family's assets by her daughters and eventually her grandchildren,
2. Maintenance of the bulk of the family's assets in a single pool of assets in order to allow for investment opportunities that would not be available if Ms. Mirowski were to make a separate gift of a portion of her assets to each of her daughters or to each of her daughters' trusts, and
3. Providing for each of her daughters and eventually each of her grandchildren on an equal basis.
Decedent retained outside MFV significant assets, totaling $7.5 million in overall value, of which over $3 million was in liquid form. The court found that there was no express or implied agreement that any LLC distributions would be made to allow decedent to pay gift tax on the gifts of MFV interests. Decedent had substantial liquid assets in her name, the LLC was mandated to make annual distributions of net cash flow, and decedent could have borrowed as needed to pay the gift tax due.
Then the court turned to the gifts by decedent of a 16% MFV interest to each of the three daughters' trusts.First, no express retained income or enjoyment retention under 2036(a)(1) was found by the Tax Court. The IRS contended that since decedent was the managing member (General Manager) of MFV, her authority "included the authority to decide the timing and amounts of distributions from MFV."
Not so, said the court, pointing to the operating agreement and State law limitations on such General Manager authority. As to the operating agreement, the provisions regarding annual mandated distributions, the required distributions of capital asset disposition proceeds (including in liquidation, etc.) were significant limitations on the General Manager's authority, couple with general fiduciary duties.
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