Today’s highlight is brought to you by David Renberg, listing courtesy of Landmark Real Estate.
1020 Houston has some real potential. It is made up of 10, 1-bed, 1-bath apartments. Gross lease is $4,800.
Pros:
This property cash-flows. With a projected 8% cap rate, this property yields high returns.
Cons:
The property is outside the ideal proximity to campus. Because of the age, original design, and number of apartments, the maintenance costs are expected to be high.
Bottom line:
This property is an excellent opportunity for a medium scale investor ready to purchase their next property.
See listing link here.
See link to investment analysis here.
Call Foundation Realty at 785-473-7230 for more details about investing!
As the price of materials and labor rises, along with buyers’ expectations for the finer amenities in new homes, builders are tempted to sacrifice quality and cut costs on the structure of a newly constructed home. Unfortunately, builders know that buyers typically do not think to ask how their new house was constructed. The assumption realtors and buyers make is that inspections are performed during the construction process and that a hired, third party inspector will be able to discover any flaws in construction before the house is purchased. As a builder for over thirty years, I know that nothing could be farther from the truth. Many of the most important structural components of a home lie beyond the detection of a third party inspector and can only be verified during the construction process. In areas where building codes are adopted and enforced through scheduled inspections, buyers can take comfort that their new home meets minimal structural and safety standards. In areas where no code requirements are enforced, your new home could be a structural disaster waiting to happen.
Fortunately, many lending institutions require a ten-year structural warranty for any home constructed without a Certificate of Occupancy. This warranty guarantees that trained observers inspected the build during construction and pays for any defects to be fixed, but it does not prevent a structural disaster from happening. To help mitigate the risk of being stuck with a structurally-flawed home, you can request the following items from any quality builder:
Any or all of these items can and should be employed when you are having a builder construct your new home. If the builder hesitates to provide any of the above you might want to question why. No house is perfect, but a structurally sound build is imperative to having the house of your dreams.
Written By: Terry Robinson
Terry Robinson, president of Robinson Building Corp. has been building homes in northeast Kansas for over thirty years.
Some would say that the weather has been the worst they have seen in years. It can be alarming to turn on the news and hear about cities being flooded and homes being destroyed by heavy rain and tropical storms. As a homeowner, it is important to understand what is covered by your homeowner’s insurance policy. For example, do you know the difference between water damage and flood damage? Does your policy cover you in the event of water or flood damage? Water damage insurance and flood insurance are two different things and you don’t want to find yourself being denied a claim because you were not aware of the difference.
Water Damage:
Water damage is defined as the damage of property by the sudden or accidental intrusion of water. Water damage is typically covered by your homeowner’s insurance policy except in the case of the owner’s failure to maintain the home. For example, if pipes burst or the roof has hail damage and heavy rains cause leaks, your homeowner’s insurance policy will typically cover the cost of repairs because these are sudden and accidental occurrences. However, water damage caused by poor maintenance or negligence on the part of the homeowner will not be covered. It is important when obtaining a new policy or renewing an existing policy to take the time to visit with your agent to get a good understanding of what types of water damage will be covered under your policy.
Flood Insurance:
A flood is defined as the overflowing of water on dry land. Flood insurance policies cover any structural damage to your home as well as the contents within it in the event of a flood. It is important to note that a flood insurance policy will be a separate policy from your existing homeowner’s insurance. Flood insurance policies are written through NFIP (Nation Flood Insurance Program), which is governed by FEMA (Federal Emergency Management Agency). It is a good idea when purchasing a home to verify whether or not your home is in a flood zone. If your home is in a flood zone, your lender will require you to have flood insurance. If you are not in a flood zone, you may think you are safe, but the unexpected can happen to anyone, so it is always better to ask your insurance agent to give you a quote for flood insurance during your annual review.
Written by: Peggy Foist
VA loans are a largely misunderstood loan product. Operating a real estate firm in the Manhattan area, I encounter VA loans frequently. VA loans are commonly referred to as a military ‘benefit,’ but oftentimes they do nothing but burden the borrower for years to come.
Before we talk about the pros and cons, let’s first clarify what a VA loan is. A VA loan is a loan guaranteed by the US Department of Veteran Affairs. It is important to understand that the VA does not issue VA loans; they guarantee them. If the borrower of a VA loan defaults, the VA “assumes the sale” of the loan. In other words, the VA buys out the bank that issued the loan. Many lending institutions take the ‘assume the sale’ tactic to a predatory level by pre-qualifying borrowers because they know the VA will assume the sale if the borrower defaults. Pre-qualifying with certain national brands makes it appear that you are pre-qualifying with the VA themselves, but don’t be misguided; the national brands are just another lending institution.
The appeal of a VA loan is that you can put 0% down. This is a huge benefit because you can scarcely find that same borrowing scenario outside of a VA loan. Another appeal is that you can ‘pay no closing costs,’ so there is absolutely no money needed to purchase the home. However, it is important to remember that someone has to pay those costs. Just because it is a VA loan, doesn’t mean that the Title Company, inspector, and appraiser work for free. To pay for associated closing costs, up to 4% of the purchase price can be financed into the loan. In addition to that, the VA requires a funding fee that ranges from 2.15-3.3% according to the VA benefits website. This can also be rolled into the loan.
Oftentimes, VA loans can provide a huge benefit to our military personnel, but use caution. If you are only anticipating being at that location for a short amount of time, it is easy to be buried in debt. My recommendation is to not purchase a home on a VA loan if there is a strong possibility of only staying for a couple of years. Otherwise, expect a hefty bill to get out from under the property, or the headache of renting, which also makes it much harder to purchase another home at your next location. Usually three or more years provides enough of a buffer to sell the house and to ensure that you are not paying to sell the property. Three or more years usually ensures the combination of property value appreciation (hopefully) and principal reduction on your loan. Conclusion: a VA loan is an excellent option in certain scenarios, but is not always the best or even a good option if you are only planning to live in your purchased home for less than three years. Working with a reputable local lender and Realtor® is crucial to finding the best lending options for you.
Written by: David Renberg
When buying a new home, consumers are often confronted with an added monthly expense of special assessments that are connected to the title of their home. In most major cities where there is a lot of new development, special assessments are quite common, and in fact, are quite popular. Understanding how special assessments are either an advantage or disadvantage for you is the topic of this article.
First of all, let us determine where special assessments originate and what their function is. Municipal and county governments will often cooperate with builders and developers to create benefit districts within their jurisdiction for the development of infrastructure such as streets, sewers, storm sewers and water service lines. These benefit districts create a way for builders and developers to provide, at a lower initial price, building sites for both residential and commercial properties. This development provides local governments a larger tax base to fund their operations which proves to be a beneficial for everyone involved. Once the cost of the infrastructure improvements in the benefit district is established, local bonds are sold to finance those improvements. The total cost of construction and financing are then divided between the number of parcels (lots) created by the benefit district. That divided cost is recouped by the local government in the form of “special Assessment Taxes” levied by that government body by deed restriction to that parcel.
Now the big question, is this a good thing for the home buyer? The answer can be either yes or no depending on your situation but let’s first establish some parameters. First parameter: typically the infrastructure for a building site is about equal or slightly higher than the land cost, so that a $25K piece of land with added infrastructure costs would be $50K plus. If the interest rate on the municipal bonds is cheaper than the current mortgage rate then you benefit because your financing costs are less. The opposite is true if the bonds are higher than the current mortgage rates. The second parameter is that special assessments are structured over an extended period of time, often 20 years. Therefore, if you are only planning to stay in the home for a short period of time, special assessments benefit you because you only pay for the infrastructure for the time you use it. If you are planning to live in your home for a long period of time, that advantage is lessened.
Take the time to ask your realtor about special assessment taxes in your area. If you are looking to buy a newer home, the discussion will be pertinent. Take some time to learn if living in an area with special assessments is a benefit for you.
Terry Robinson is a Realtor/Owner of Foundation Realty in Manhattan Kansas and has been a builder developer for over 30 years.
Written by: Terry Robinson
Today’s listing is a great investment close to the KSU fieldhouse. Listed at $210 with a full basement, this property is a nice investment.
The good:
This property is in a great location, and is sound from all angles. No major deferred maintenence with lots of space to rent
The bad:
This property is not yet rented for next year. This means that you may have to take a hit year one just to get it occupied.
Who this is for:
This investment is for an investor wanting to start investing. It doesn’t have ratios that some larger scale investors demand, therefore, it is attainable. It is also for those looking for a place for their student to live close to campus. There is plenty of room to rent out to buddies, and more than cover a mortgage payment, allowing your’s to live for free.
Click here to view the MLS listing. Click here to view the Listing Analysis.
Call me today for more information:
Today’s highlight is a single family home VERY close to campus (courtesy of Coldwell Banker Realty Group 1). It has 4 bedrooms, will undoubtedly have no vacancy if managed correctly. It is currently a single family home, but I am calculating to convert it into a 2-unit property in order to capitalize on rents.
Rents are calculated at $1,800 with $15,000 in up-front remodel costs.
Click here to view the MLS listing.
In the analysis below, I have assumed a purchased price of $193,000. This follows the market average of 98% list to sale price in Manhattan, so is a safe bet.
My thoughts on this property:
As you will see in the analysis above, I project this property to make:
This is a great low-capital opportunity, give me a call today!
For more information on this property, and where I got my figures, feel free to email me at David@RenbergRealty.com, or give me a call at (785) 236-9438.