Wednesday, December 31, 2014

Greedy Fat Cats at The Water Authority Are Getting Challenged Again

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A member notified me that there is another great bill in our state House again. This time attempting to completely eradicate the language that allows the Water Authority to bill us as landlords for deadbeat tenant unpaid water bills.

The bill was introduced by Daniel W. Marshall III.

It will remove all of the below language:

 § 15.2-5124. Delinquent payment of rates and charges.
Notwithstanding any other provision of this chapter, if the use of any water or sewer system is contracted for by an occupant who is not the owner of the premises and such occupant's premises are separately metered for service, the owner of any such premises shall be liable only for the payment of delinquent rates or charges applicable to three delinquent billing periods, which together shall not exceed a period of ninety days. No authority shall refuse service to other premises of the owner not occupied by someone who is delinquent in the payment of such rates or charges on account of such delinquency provided that such owner has paid in full any delinquent charges for which he is liable. No authority shall refuse service to or unreasonably delay reinstatement of service to premises vacated by a delinquent occupant if a new party has applied for service, provided the owner of the premises has paid in full all delinquent charges for which he is liable.

(Code 1950, § 15-764.12; 1950, p. 1318; 1954, c. 554; 1958, cc. 400, 402; 1960, c. 430; 1962, cc. 130, 623, § 15.1-1250; 1968, cc. 355, 556; 1970, cc. 444, 617; 1972, c. 161; 1979, c. 280; 1980, c. 159; 1981, c. 610; 1983, c. 422; 1984, c. 554; 1994, c. 477; 1997, c. 587.)

Please go to this webpage and input your address if you don’t know who your state Senator and Delegate are or don’t have their contact information. Then email or call them to leave a message to support HOUSE BILL NO. 1424 to remove the language that allows the Water Authority to bill a landlord for a deadbeat unpaid tenants bill.
http://whosmy.virginiageneralassembly.gov/

Please go ahead and do it. If you were thinking it won’t matter because someone else will I can assure you they won’t. You have to remember the common saying that in any group there are 5% of the people doing  95% of the work. You’re help is needed on issues like this that can or have effected you. I have almost all multifamily houses so I pay most of the water bills on my properties. This does not effect me but I am going to stick my neck out there and support you in what’s right which is the removal of the ability for the Water Authority to bill a landlord for something that we had no use of and didn’t cosign for. The next thing in line will be their power bill and their gas bill. So get on the ball and do something please as it is an important subject.

Please take the 5 minutes to send an email or leave a voicemail or message with the receptionist who will answer if there on how you stand regarding this issue.

If the bill passes the house it goes straight to the Senate to be signed. Similar actions have taken place and they passed the house and passed the Senate committee to later fail on the Senate floor. So contact both your House member and your Senator so they know when it hits their floor vote for it.

Foreclosure vs. Short Sale Credit Impact

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To clear things up…

FYI, as debated last night at the meeting which was fun, I was right as usual. Just don't usually have the time to prove it. LOL

http://www.myfico.com/crediteducation/questions/foreclosure-fico-score-affect.aspx

Both Short Sales and Foreclosures both stay on your credit for 7 years. There is only one thing that stays on a persons credit for 10 years and that’s bankruptcy. All other negative hits against credit including your judgments against a tenant or something as simple as a cable bill not getting paid stay on your credit for 7 years. 

However they all weigh differently on your credit and have greater and lesser of an impact. And there isn’t much of a difference between the two credit atom bombs, a foreclosure or a short sale.

So if you’re letting people know the benefits of a short sale vs. a foreclosure there are no big benefits pertaining to credit.

The big benefit is that the Obama administration during his first term made it so if a bank agrees to a short sale they can’t turn around and bang you with a deficiency judgement to get you for what they lost. They CAN do that with a foreclosure.

Great Real Estate Investors of Virginia Testimonial!

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Hi Dallas,

I don't know if you will want to share this with the REI and potential new REI members, but I just wanted to take a moment to thank you and the REI for all of your help with my property and the problems that I was having with the city.  I have gone from the very real possibility of my vision of my first income property not only not working, but really hurting my credit and hurting me financially for years to come, to being well and truly back on the path of success.  With your help I've gotten the "green light" from the powers that be at the city after years of trying and failing miserably on my own.  I still can't get over the personal attention and time that you put into helping me; someone you had never met or heard of.  I take it as a true Godsend.  I have literally never had an organization so willing to genuinely help me with no strings attached or huge fees tacked on.  I absolutely want to be a part of REI going forward and I would encourage anyone trying to decide if it is worthwhile to sign up.  Finding REI is the best thing that has happened for me in a long while.

 Thank you again.
 Name Removed

Monday, December 29, 2014

What Do You Do With A Property In Your Portfolio That You Paid Too Much For?

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The chances are that you have a house or two in your portfolio that you paid too much for. I have analyzed several landlords property portfolios over the years that were going under to help them determine which ones are their winners and which are their losers. We did this so a game plan could be made to resolve the issue and get them back on their feet.

Most often I’ve found that they have both properties that cash flow and others that don’t. Obviously you can have some losers as long as you have enough winners to make up for the ones that are sucking the life out of the good ones. Or else you have to have a nice paycheck from another job so you can cover your losses.

This week we have special guest speaker Keith Boley with http://www.reiwealthacademy.com/  flying out from California to speak to our group. We had Keith last year and he gave a great presentation. The guy has a good head on his shoulders and has some fantastic ideas.

Keith is going to speak to us on what to do with these poorly preforming properties in your portfolio. How to dig yourself out of the hole you created. LOL.  Or to help someone you know now or in the future dig themselves out.

Every investor should know how much money each of their rental properties are making for them on average over the years. Otherwise you’re flying by the seat of your pants. You need to be able to identify your winners and losers. If you find one that fits in the loser category I’m sure it’s in a nice area and you’re rolling the dice for appreciation. Otherwise you need to get rid of it to strengthen your portfolio.

A good quick and dirty way to determine this is to do a cash flow analysis on each property to determine if it is a cash flowing rental.

Have a look here to see how to do one.
http://www.reiofvirginia.com/2010/04/cash-flow-analysis-for-landlords.html

Come on out this Tuesday for some real estate education and bring your friends!

Friday, December 26, 2014

BTU's per square feet in Roanoke VA.

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The Virginia Maintenance Code requires you to allow your tenants a minimum of 65 degrees of heat. That is 65 for an average seasonal temperature. If it becomes unseasonably cold than they need to bundle up. There is a provision for that that does not require you to provide more than 65 degrees on an unseasonably cold winter.

Take a look at this chart. Here in Virginia we don't fit either the warm climate or the cold climate. We are right in the middle.

When determining how much heat is enough heat for a house you need to be in a minimum of 35 BTU's per square foot for a new house and about 45 BTU's per square foot for an older house.

So does this mean nothing to you? If so, to get you up to speed, all heaters, including furnaces, baseboard heat and everything else tells how many BTU's it heats. It's a measure of heat that allows you to determine how big or how many of the units you need to heat your house.

Example, If you have a 1,000 square foot older house you need 1,000 X 45 BTU's per square foot. So that house will need about 45,000 BTU's to adequately heat the house. A standard 5 foot baseboard heater typically heats 5,000 BTU's. So divide the 45,000 by the 5,000 and you have 9 / 5 foot baseboard heaters needed for the house. Get it?

A furnace will also say somewhere on it how many BTU's it heats. If you can't find it contact the manufacturer with the serial or model number. In the case of a 1K square foot house you will need a furnace that heats at least 45,000 BTU's. Same thing if you were using a wood stove, or a pellet stove or a portable heater.

Monday, December 15, 2014

Convert Your Rentals Into Lease Options or Contract for Deeds…

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Ladies and gentlemen, Let me announce one of our favorite speakers, attorney Ross Hart. Ross will be at our meeting to give us the rundown on some of the best types of contracts that landlords can use to sell their property in the secondary market. What would be considered better options than the typical “Rent To Own” contracts which can be messy.

There is no better attorney in the area than Ross, to get advice from regarding these matters considering his involvement with Legal Aid and active attendance at their conventions which have conferences on matters of such. Playing within the rules is critical and ensures that your contract doesn’t automatically get judged as a sale leaving you with no other option than an expensive foreclosure.

These lease option and contract for deed type contracts are something that those of you who have properties reaching the 27.5 year write-off should consider as a tax strategy.  Rather than paying a huge capital gain you have the option of adding several more years as to where your taxes can be deferred as a result of the sale not allowing for an immediate gain.

These types of contracts are also good for those of you who are tired of playing games with tenants and would rather have the people purchasing your property handle their own repairs. Doing so requires an attorney who is very well versed in the subject of lease options and contract for deeds. Ideally you want to be able to take the property back if they fail to make their payments while avoiding having to go through the foreclosure process. The recording of the contract may be required to ensure that the new owner doesn’t get you pulled into court by the city if they aren’t keeping the property up as required.

Come on out and learn from Ross which is best to use for particular situations and how they can benefit you now or in the future.

See you there!

Monday, December 8, 2014

End Of Year To Do List And Business New Year Resolutions To Consider

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At our weekly meeting this week we’re going to have a business round table discussion. This meeting will include topics such as an end of year to do list as well as business related new year resolutions.

Anything you need to do before the year end for tax purposes? How about insurance purposes? Is it a good time to implement some property management software at the start of the year into your business?

What do you have planned for your business next year? Are you going to grow slowly or quickly? Or not at all? Do you have a certain number in additional revenue that you are planning on obtaining to add some more comfort to your life? Are you going to give a shot at commercial real estate, speculation land, storage units, or something different? Or are you going to take the big leap into the real estate game and buy your first house?

Do you even have any new year resolutions or goals for the following year? At this meeting we intend on throwing some ideas out there and seeing where it goes. I guarantee you will end up leaving with some great ideas to implement within your business. We did something similar to this last year and it was a fantastic meeting.

We’ll see you there!
 

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