Investment property built befor 1978 Lead Law

The lead law in older houseing is pretty straigh forward. Any home sold that was byukt before 1978 may have had a substance called lead that was added to the paint or plaster. It was a stabilizing agent still allowed in Marine & commercial uses wiht the discliamer that it is not allowed for residential property usage. The areas that it references are an peeling or chipping paint up to 5 ft on a mouthable serface or any frictional surface regardless of height or an peeling or chipping paint or plaster regardless of height. Over 5 feet the surfaces must be intact. Frictional surfaces are any surfaces 4 inches or under a child under 6 could put there mouth on or around or that dust could be created by rubbing surfaces. This includes all doors and windows. It is important to note that not all 1978 pain, plaster , or stain had lead added to them so testing maybe needed if a child lives in the property or visits the property on a regular basis and if you should delead the surface. There are lots of guidlines that the EPA puts out on this and each state further clarifies and inforces the law. Some states include soil testing for dropped dust or lead chips and some do not. ALL federal grants include all federal guidlelines, including the soil test. Sometimes lead is more suspect if the paint is cracking like an aligator or little squares. But some vanishes and stains may have a similar pattern without any lead at all. Newer paint types like latex tend to peel off in sheets. However, it not uncommon to see lead paint on lower layers covered by laytex or encapsulation paints. The only way to know if there is lead in the property is to have the surfaces tested either with kits or by hiring a licensed lead inspector. Seller are not obligated to test or delead on a sale only disclose there knowledge of lead, testing,& certificates unless they have been issued a violation order to correct based on an inspection.

Say yes to the ready willing and able customer and no to the "tire kickers"

There is nothing more important than to make sure your buyer is really a buyer. Lots of people unfortunately like tot waste our time if we let them. Make sure you ask your buyer or seller what they want to accomplish immediately after introducing your self. If there goal is anything other than to purchase then you need to decide if you need to ask more questions to see if your goal to sell a product or service is the same as the"buyers" goal. You should also always request how they plan on financing the purchase if is of any size that normally requires financing. Lots of people respond, I'm only looking or I'm looking for my son, freind etc. The sales presentation is a lot faster to these people as you don;t have the buyer infront of you. You also need to make sure if they are the only buyer. Don't be afraid to turn away none buyers or to shorten the walkthrough of the product or service, after all, you really want to sell to a true buyer. Once again in all cases your company may and should have a policy on how to handle none buyers. A simple sentence such as, I'd love to show this to your friend/relative/etc when they are available. Here's my business card I'll be happy to meet with them or send them infomration onlineor through the mail if you would like to pass theis on to them or I can do it now if you have the infrmation with you. The office policy is to only work directly with ready, willing, and able buyers for the security reasons. Then if they continue to object I turn the table sand say I'm sure you or your compnay has a similar policy. Thank you for stopping in and once again here is my card for your friend/relative/etc. This way I have time to work with only buyers that have the same goal as you; the goal is the sale. So keep your eye on the price. At open houses if two groups of people walk in and one is a buyer and one is previewing for others my focus would be the buyers that are the actual buyers. I'm sorry the previewer isn't a buyer but a hugh potential time waster as taste of one person is most often quite different from there friends/family/etc. But you be the judge based on your product and time. But remember the business card and to be polite but firm about company policy.

Important: The effects of government shut down on loans for purchasers and sellers.

Check with you lender if your buying or selling your home on the effects of the federal shut down effect on your home sale or pruchase: Items to review should include: (1) Type of loans that may need extension or need to be flipped to other types of loans including FHA, VA, USDA to convensional, hybrid, hard money, or in house portfolio loans that are closing today or during this period. (2)Cash buyer purchases and sales without government back loans that are not effected themself. by the shut down. (Conventional, hard money, portfolio or in-house loans and private loans). As always, the phrase cash is King will be heard multiple times today and during this period. (3) Loans of other parties in a multiple transaction that may effect closing dates of non-government backed loans. (4) Debt ratio impact of health insurance increases that may effect buyer debt ratio, etc. (5) Weighing offers on based on loan types. (6) Possible problems with short sales approved during shut down and the need to keep these property listed with contingencies accepting backup offers. (7) Federal bankruptcy delay in processing, filing, and approvals of cases and related claims and delays to releases or obtaining relelases of federal liens.

Proactive Investment property tips

(0) Prior to purchasing pull housing department, public record field cards, and building permit history, and housing court records. Read the files to see aoid or know in advance if your taking on prior owners problems. (1) Make sure all tenants are screened for prior credit, rental, housing cout, and fiancial history nationally. Get a written rent roll at time of purchase to see the status of all tenants rents including arrears, evictions, deposits, etc. (2) Make sure all tenants are listed on lease or tenant at will (TAW) agreement are in writing. (3) Make sure these written agreements include all required disclosures: property transfer/lead paint if built prior to 1978 with all required attachements, property condition report at time of move in or renewal of written TAW or lease. ALL agreements need to be signed by all adults over 18. (4) Clearly indicate boundaries of lease and storage areas and parking, restrictions and prohibited storage areas(example halls, yard, common area). (5) Make sure you understand state laws on first, last,& security deposits and lock change fees. If you plan to charge for other items such as water, pet deposits, renters insurance. Know your local laws. Make sure deposit interest is accured &/or returned to tenants per state law annually or transferred to new trustees acoounts at time of purchase/sale. (6) Spell out clearly trash requirements and storage. Storage containers by law may be required by law. (7) Verify eviction & move and store laws prior to needing them in your state. (8) Join a local home owners association to stay up to date on changes and how to hand issues in your owners association and for local advise from fellow investors. (9) Check you mail boxes monthly for names or occupants to avoid unnecessary tenant moving in or out surprises. (10) Post contact info for police or emergencies. If there is a neighborhood watch or officer assigned to the area introduce yourself to them to familiarize yourself with potential problems to avoid or to watch out for now or in the future.

Investment property loan types

Type of loans: (a) Owner occupied: FHA loans for 1-3 units : property must be in function conditon per hud guidleines Usually 3.5 % down or more based on lender. (b) Owner occupied FHA rehab loans: property requires 12K-35K (streamline) loans or Full 203K loans. Usually 3.5% down or more, check with lender. (c) Commercial loans for investors or owner occupants of mixed use, all investors purchases over 4 residential units. Usually 10 to 50% down depending on lender, buyers credit, and property condition. (d) Hard money private lenders or investors. Lender sets deposit amount and terms. Remember if you have other investment property or are self employed you need current profit and loss statements for each business or property. Also lenders may cap the number of properties that you maybe able to purchase under each entitys name.

Investor vs Owner Occupant residiential invesstment differences

Investors are looking for profits. Most owner occupants are looking for other units to pay for all or part of the monthly mortgage. Investors are looking for either a long term consistent cash flow or a quicker fix and flip return. Investors want a return of capital in at most 10 years: Owner Occupants are looking for yearly breakeven cost if possible. How do you know what your buyer is looking for and if this is a good potenatial profit for your client is dependent on what your client wants. The only way to discover this is to ask.

Investment Properties return factors to consider

If your planning on buying investment property the following factors must be considered: (1) The current condition and amount of maintenance the property needs now, (2) How well the current tenants and future tenants were screened to see if the current rent or future increases in rent are with in current renters budgets, (3) The cost of know or discovered repairs or improvements and if rents, increases in rent or additional loans are needed. (4) The amount of groos or net profit and loss to cover mortgages, taxes, expenses, etc. (5) Your avaialable time for maintence or management or the cost of additional labor to do this for you. (6) Your rate of return, profit or loss anticipated, bookkeeping of expenses, taxes, unforeseen factors that may arise. (7) A vacancy rate of at least 10%(or more) for each year to accont for late or unpaid rents or renatl losses from vacant units. Better screening, fully updated units with excellent workmamship, high rents with good ontime payment rental history and written leases, and low maintenance property monthly maintenace will amount in higher reliable returns. Poorly screened tenants, unmaintained properties, missing written lease or tenant at will agrement, older less updated unis with do it yourself prior owner repairs will likely result in low returns, possible losses, and higher vacancy/non rental income an the likelyhood of eviction or court costs and unforecseen expenses that will cut in to expected rate of return. No two properties are a like so the more data you have prior to & during the purchase the better equiped you are to judge your future and current costs and expenses to see if you have a reliable rate of return.

MassHousing's “Get The Lead Out” Loan Program Expanded I just got this on the expanded program. Evereryone that has units with children under 6 in them without a certificate needs to take advantage of this. MassHousing announced a major change in the “Get the Lead Out” lead paint removal loan program that will now allow all qualified households with children under age six to obtain zero-percent financing to remove lead paint regardless of whether the child is lead poisoned or in case management. Before the program change, zero-percent, deferred financing was only available to households where a child was lead poisoned or in case management the Childhood Lead Poisoning Prevention Program (CLPPP). For more information about the Get the Lead Out program, including income limits, loan limits and how to apply, clidk the words to the right for details: https://www.masshousing.com/portal/server.pt?open=512&objID=228&&PageID=305&mode=2

Fair Market Rents 2013 per HUD proposed rental guide

Remember rents may need to be adjusted up or down based on neighborhood area, condition of property, upgrades, etc. Rents will also need to be adjusted based on if utilites are included or exclude, appliances, bathrooms, parking It's also a good guide for a quick check to see if you rents are in line with your competition. The latest table by county are area is located at: http://www.huduser.org/portal/datasets/fmr/fmr2013p/FY2013B_SCHEDULE_B.pdf Remember this is a large area that is covered by each estimated rent so this should be assumed as the average rental for the entire area for a property in good condition. Some areas rents will not be as high. Others will be higher.

Which house is easy to sell: the one with the ugly outside or inside?

This is really easy if you thing about it. Yes your first impression is important but you can change that first impression by wanted a buyer to see more with a sign that says I'm Gorgeous inside, don't judge a book by its cover, or inside photos on information in a listing or flyers. On the other hand, a house with a beautiful exterior that is ugly on the inside and gorgeous on the outside gives you a felling like a ballon quickly deflating. As long as the shell of the home doesn't have structural defects the last impression maybe more important than the first as long as you make the buyer want to get past the front door. An added bonus maybe that an ugly exterior may give you a lower assessment, plus the exterior can almost always be repaired while you still occupy the property.

How do recent sales effect your property value.

Property values are set by what a ready, willing, and able buyer is able to purchase your property or simial properties for based on either cash or financed /lender approved sales prices. While cash buyers sales only require documentation of avaialalbe funds at the time of offer, Purchase & Sale Agreement (P&S) and closing financed sales require comparable sale. These comps are usually with in the immediate area or a five mile radius with in a 3 month period. However, the area or time frame maybe extended to a larger area or time frame for unique or specifi property classes for uncommon sales of real estate. If sales prices go up your values go up; If sales values go down then your base value goes down. In all cases some adjustments should be made for location, property condition, area amenities, upgrades, feature missing/improvements.

What is "fair market " value for rent or sales value.

A common question we get as Realtors is what is a fair market value of a property or to charge for rent. The definaion of fair market value is the price a ready, willing, and able consumer is willing to pay for a product. The value can be impacted by location, property condition, added features such as upgrades, the type of heating and or cooling system, parking, storage, the type of flooring, cabinets, room size, closet space, laudry or appliance &/or hookups. Comparable unit values with simialar feautes are used as a basis for pricing units to rent or for sale. If your thing about selling in the Worcester or Central MA area. Contact me for a market analysis or to list your property.

Landlord/investors need to have all paperwork in order

Owners of investment property need to have wriiten lease or tenant at will agreements clearly stating the terms of the rental. This will list all owners all occupanys & all tenants over 18 uses, other occupants, uses, who pays what utilies, restrictions, rent rate, security or last month rent( if either collected), storage, parking and more. At the time of purchase the new landlord will replace the old landlords for obligations under any rental agreements in place.