Tuesday, August 27, 2013

Roanoke City Plans On Making YOU Pay For The WATER AUTHORITIES Dumping of Raw Sewage In The River

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 *Commentary*

The EPA wants our rivers and streams cleaned up.

A few of us were given a presentation regarding the new tax that the city plans on implementing to cover the costs of cleaning up the Water Authorities mess. As I recall, each property will be required to pay approximately 30 to 40 dollars per year. They have positioned their strategy to place blame on the Roanoke City homeowner. The city takes the position that your house and driveway and other structures such as sheds are not allowing water to soak in the ground and the runoff is the reason the waterways are polluted. I strongly question the number one contaminant of our waterways. And I can guarantee you that it's not raining fecal matter.

The Water Authority is dumping a massive amount of raw sewage into the rivers. Take a trip to Tinker Creek Park one day and you will see for yourself the huge grate chained on the ground where the creek meets the Roanoke River. On a number of occasions I have personally seen raw sewage shooting 8 feet in the air out of that grate and running down into Tinker Creek. They have lye spread on the ground around it. No way that will do anything with the amount of sewage that runs down that hill. It forms it's own tributary to the river.

I hate seeing all of the people play in the water whenever we have a big storm and the city floods. The Water Authorities raw sewage plant backs up as their lines have city storm water runoff draining into them.  These kids clearly don't know they're playing in raw sewage. The currant infrastructure can't handle large quantities of excess water. 

This is a problem that has to be straightened out but it kills me that the city pretends it is a result of the homeowners impervious surfaces and talks about pesticides and oil and such rather than the raw sewage issue that they have been covering up for a long time now.

The Draft Stormwater Ordinance - Click Here

Frank Is Going To Knock It Out Of The Park With A Section 8 Tool He Has Developed!!!

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This Week it's all about Section 8. Our Member and Chief Technology Officer, Frank Erhartic, developed a new tool that will help you mathematically determine what's affordable for your Section 8 tenants. It takes everything into account including the utilities, number of bedrooms, etc. Is your rent too high? Or is it too low…

You're not going to want to miss this meeting. Go ahead and cancel any plans you had and come on down.

Maybe I can get Frank to tell me how I get my own page on Forbes…
http://www.forbes.com/profile/frank-erhartic/

On another note regarding the Housing Authorities Section 8 program, we had some discussion a couple of times regarding the program and how difficult it has been with one of the inspectors in particular. A police style my way or no way attitude and the no house will get a clean bill of health standard that had developed doesn't work for the Section 8 Program or the Landlords who participate in it.

I had a conference call with the leadership as they were concerned and do have an interest in the continual development of positive relationships with landlords in the program. So don't give up on it yet. After talking with them, I do strongly feel that they will make some changes in the program regarding their methods of communication with Section 8 landlords which will allow us to continue to move forward providing safe and healthy environments for Roanoke's low income residents. 

Thursday, August 22, 2013

There Is No REI Group In The Country Like Ours!!!

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Your Dump Truck Kind Of Looks Like This, It's Under CDL
Real Estate Investors of Virginia is diligently working on developing some great benefits for our Premium Members. One idea we came up with was to start buying items that Premium Members can use with their businesses. We just bought an old dump truck with only about 67,000 miles on it. It is currently getting a tuneup and some paint to stop the rust. We are looking for a good deal on a lowboy trailer, backhoe or skid steer loader, maybe a mini excavator, a dump trailer, soil pipe cutter, commercial ozone generator, power plumbers auger with 100 feet of cable and a cutting head, a brush cutter, jackhammer, maybe a ditch witch,  a towable lift or cherry picker, etc. We don't have much money so we will be getting these things slowly throughout time.

You will only be able to use these items if you are a Premium Member. REI of Virginia is interested in setting up some awesome benefits for our members. We are paid nothing for what we do!!! We are merely volunteers.  Your dues money goes back to helping out you and landlords in general in greater Roanoke. If you haven't signed up for Premium Membership yet, please contact me right away and I will lead you in the right direction if you don't already have Eric's contact info. I'm not putting it here on the internet as he will end up getting spammed.

Spammers Click Here 

Monday, August 19, 2013

Slash The Cost Of What Is Likely Your Largest Yearly Maintenance Expense…

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This week we will be learning about what you probably spend the most amount of money on with your rental properties. Our guest speaker will be Larry Ray who is the territory manager for Valspar Paint.

Larry will be out to talk about Valspar but this meeting will be all about paint in general. Tips and tricks regarding painting for rental purposes and for flip purposes.

Let me ask you some questions that we will answer through our collective experience.

1. What is the best way to paint a fire damaged property?
2. Are their any tips or tricks regarding painting a property that had smokers? Just painting as usual requires several coats to get adequate coverage.
3. Are there any particular colors that cover better than others?
4. What are the benefits to painting all of the interiors on your rentals the exact same color?
5. If you need to paint a damaged wood floor, are there any steps that should be taken prior to doing so? And what type of paint should be used?
6. Is their any fast way of ensuring a one coat paint job in a house?
7. What is the fastest and neatest way to paint trim, doors and cabinets?

Being aware of the intricacies, tips and tricks used by professionals in the know will save you hundreds to thousands of dollars per year. REI is all about saving you money. After Larry's presentation we will break into a tips and tricks discussion. Don't miss this meeting! Money saved is money earned…

Sunday, August 11, 2013

Learn How To Save $ This Week By Using Roanoke Cities Tax Abatement Program…

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This week at REI will be the week of showing you how to keep money in your pocket by using Roanoke Cities Tax Abatement program. Our guest speaker will be KC Bratton, appraiser for the Real Estate Valuation office. I have used this program many times and we used it on our REI Group Flip to benefit the buyer as it passes on to them.

Essentially the way it works is you give them a little money to apply for the program, they come out and look at your property before rehab and take plenty of pictures, count how many rooms you have, etc. They at that point in time assess the currant value of the structure and lower it to what it should be.

You then are required to fix it up to at least 40% greater value and they come back out and take another look when it's done. Depending on the exact location of the property, you don't have to pay taxes for 5 to 10 years on the additional value they assessed the property for. So if you buy a junker that is worth 20K and 5K is the land value you have 15K on the structure. Then they come back out and say that the structure is now worth 60K, you won't have to pay 40K of taxes for the next 5 to 10 years. Nice way to save some money.

This works out great for the city because when you fix up these eye sores, they can go around all of the surrounding property and increase the tax assessed value significantly which more than makes up for the deduction that you get. I like to look at this as an Old Neighbors helping the New Neighbor program. The may not be happy about their tax assessed values going up if they aren't selling but they sure would be when it's time to cash out.

If you are flipping your property it's absolutely essential that you are involved in this program since there are so many people that think that the tax assessed value is what the property should be worth. You then can get the value increased for the numbers to look good on the GIS.

Like all things, there are pros and cons:

Pros:
1. Save a substantial amount of money over the next few years.
2. Raise the value of the whole neighborhood by putting some lipstick on that pig.
3. For flipping purposes, get the correct tax assessed value so people have a generality to go by.
4. The higher tax assessed value of the property certainly will affect a bank appraisers opinion to some degree. The more it's worth, the more you can borrow.

Cons:
1. You have to get a permit even if you're doing nothing more than cosmetic work that doesn't require a permit. (Update) At the meeting they said you don't have to have a permit if only cosmetic but I have been required to do so.
2. They will take lots of pictures that will be used against you in court if you make non permitted changes. Everything you are doing has to be on that permit.
3. If you are buying to hold the property as a rental, and didn't get a permit because you weren't required to do so, they wouldn't know that it got fixed up in the first place so you would most likely continue to have low taxes. Their final assessment of your property will allow you low taxes for a few years. Maybe many more if they didn't know it happened.

Fun stuff people. I'm telling you both the positives and negatives of this program because you should know. As I said before, I like it and continue to use it therefore in my opinion in many cases, the pros outweigh the cons.

Monday, August 5, 2013

This Week Our Guest Speaker Will Be Carlile Robertson from Lowes

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Don't have a guy who can tackle a specific project? Do you need to speed up a job by hiring more people adding turnkey services from Lowe's? You may not have known that Lowe's has over 50 interior and exterior installation services. I didn't.

Carlile Robertson will be covering the services offered by Lowe's at our meeting this Tuesday.

Chris Chittum Agrees To Test Tenant Accountability With An REI of Virginia Member

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Photo by www.roanokefreepress.com
We had a nice meeting with Chris Chittum. Props to Chris! He showed up at our meeting by himself! That's a first for any government employee. It seems that they more often like to have a support team with them.

Chris turned out to be a pretty good guy. He was firm in his beliefs but open minded and willing to give new ideas a try.

The main issues that  our members had related to tenant accountability. Chris would like to do a test case with one of our members when a tenant has an outdoor storage zoning issue.

He requests that the case be a single family house so there is no question on who owns the property. And that you have a lease and ideally photos or video of the outside of the property prior to the tenant moving in.

See below Chris's detailed response to our meeting. If you have an outdoor storage issue in the future, please let me know so I can put you in contact with Chris:

 Dallas,

Thank you for your invitation to speak at REI's meeting earlier this week.
As I expected, there was a spirited discussion and I think that the result
was at least more mutual understanding, if not agreement.   I appreciate
that the discussion was civil.  Most discussion focused on citing the
tenant rather than property owner.  On this issue, there are two questions.
First, CAN we legally cite the tenant?  Second, if we can, then SHOULD we?

On the "can we" question, of the four major codes enforced, three legally
require us to cite the owner with few exceptions.

---The outcome of a weed/trash violation is often abatement by the city and
billing for these services.  Of course if the bill is not paid, a lien goes
on the property.  It would not be legal, nor ethical, to place a lien on a
property without going through due process with the owner.  Therefore,
weed/trash violations are not a candidate for citing the tenant.

---The outcome of an inoperative motor vehicle violation is towing the
vehicle.  In rare cases when the vehicle cannot be accessed by the towing
company, the owner summonsed to court.   It really does not matter two whom
the vehicle belongs, but as legal due process, we must notify the property
owner.  There is no flexibility.

----The Building Maintenance Code assigns responsibility to the owner or
the person responsible for maintenance.  This almost always means the
owner.  There are some exceptions related to unsanitary conditions inside
the unit where we can and have gone after the tenant to compel compliance.

----Roanoke's Zoning Ordinance, however, allows us to hold pretty much
anyone associated with the property accountable:


    (1) Violating, causing, or permitting the violation of, or failure to
comply with any of the requirements of, this chapter, including violations
of any conditions established in connection with grants of variances,
conditional rezonings, special exceptions, or the issuance of zoning
permits or development plan approval, by any person, firm, or corporation,
whether as principal, agent, owner, lessee, employee, or other similar
position.....


Virginia Code Section 15.2-2286 appears silent on specifying owner or
tenant in enforcement; however Virginia Code Sec. 15.2-2311 requires us to
give notice to the owner in order to advise the owner of their right of
appeal.  (See VaCode Section 15.2-2311)

On the "should we" question, there are situations where everyone involved
knows that the tenant has caused the violation.   We look at each case as
having the potential to end up in General District Court.  Accordingly, we
have to document everything in writing and must be able to assign legal
responsibility appropriately.  I am hearing this as the very point you and
other REI members are making, but as we have communicated, holding the
tenant responsible is not very easy and impossible in some cases.

I have spoken to Dan Webb and others about the potential of citing tenants
in very limited situations as a test case.  As I said, I am most interested
in our team's ability to be effective in getting rid of violations.  I am
willing to consider or test ideas that might help improve.   Our zoning
ordinance is really the only one that gives us the flexibility to cite who
we think is responsible for causing the violation.    Zoning violations
(commonly outdoor storage) are the mostly likely candidate for a type of
test case.

We've identified several issues with citing the tenant and, specifically,
several conditions that need to exist for a successful test case.  We would
need cooperation from the property owner to be successful.

1.  The property would need to be a single-family dwelling so there is no
doubt which tenant caused the violation.  This condition would ensure that
the tenant cannot point the finger at another tenant of the property.

2.  The owner or manager would need to have some documentation such as a
move-in checklist, preferably including photos, that show the violation did
not exist on the property when the tenant took possession (or after the
tenant took possession, but before the violation occurred).  We are
thinking that the owner or manager would need to come to court as a witness
to present this evidence and testimony.  This documentation and testimony
would prevent the tenant from simply claiming the violation existed before
they moved in.

3.  We must be able to find the tenant who caused the violation.  The test
case should be one where the same tenant still has possession of the
property.

4.  We need the property owner to provide us with a copy of the lease
showing the current tenant has sole leasehold interest in the property.

5.  When a violation is observed, we do not know - at least initially - who
the tenant is, so we would still need to give some sort of initial notice
to the property owner.  We would need to have a process where the owner
would certify us that he/she believes that the tenant is responsible for
the violation, that the above conditions exist, and that the owner will
provide the documentation noted above.   This is a step that would add
additional time to the process;  we need prompt response from the owner
here.

I am by nature inquisitive and truly interested in finding out if this idea
will prove effective.  We plan to pursue this idea in good faith to see if
it will work.  We have already started mapping out the chain of events that
need to occur and will need to do a little more work to get a solid process
together.  We have not yet discussed this idea with the Commonwealth
Attorney's Office, so there may be other issues that we need to work
through.  Once we have the process mapped out, we will then need to find
the ideal test case.  I would prefer that the test case be on property of
one of your members who was privy to the discussion and therefore
understands what we're doing and why we're doing it.

That's all for now.

Regards,

Chris



 

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