By Wendy Ceccherelli

One of the most common ailments for new investors is what is known as the “Shiny Object Syndrome.” It is an affliction which adversely affects the investor’s ability to focus, and negatively impacts their profit potential. Let’s examine the causes and symptoms associated with Shiny Object Syndrome.

A new real estate investor gets excited about investing in real estate and Starts out with the intention of “wholesaling.” ”Wholesaling” means buying a property at a low price and selling it at a low price, just like wholesale commodities. Wholesaling involves finding the deals. Find the deal and get it under contract, then flip it to another buyer with enough room for significant profit.

The most effective strategy for wholesaling is to find the buyer first, rather than the property. Most new investors get this backwards. They get so excited about finding “deals” that they think their buyers will automatically materialize when they get something under contract. Not very effective, and here’s why.

Every real estate investment association is filled with investors who buy properties. Many of them buy unlisted properties from other association members who “bird dog” by finding them the properties they want. Find out who in your association is actively buying properties. Then find out what they want to buy. This is known as “building your buyers list.”

For example, I buy single family homes in good neighborhoods in the city of Seattle, that have three bedrooms, two baths, at least 1200 sf, and that retail for less than $400,000. Iprefer houses that have some kind of off- street parking, and avoid those on busy arterials or in “war zones.”

So I’am not interested when my bird dogs show me vacant land anywhere, houses in Covington or Puyallup, 21-unit apartment buildings, or anything out-of-state. However, bring me a lead on a funky three-bedroom single family home in Ballard for under $350,000, and I am all over it! Find out what your buyers want first, then go find it.

Suddenly the new investor is hit with the first attack of Shiny Object Syndrome, as his buyers are not interested in any of the deals he has brought so far. The new investor decides this wholesaling stuff is too hard, and maybe soliciting underwater sellers for lease options would be easier than wholesaling. Off s/he goes, down a new path!

Second attack of Shiny Object Syndrome: new investor hears about how a lot of investors are making money flipping mobile homes and figures he has enough money of his own to buy and sell mobile homes. Maybe he buys one or two, but longs for bigger paydays. Shiny Object Syndrome is really beginning to incapacitate this poor new investor. He adds attending the foreclosure auctions to his list of activities, but can’t recall whether he is looking for properties for himself, or for some buyer.

The cure for Shiny Object Syndrome is to keep it simple. Pick a focus. For most new investors, this means finding the deals, and selling them to investors who want them. Repeat, until you have the resources and the experience to do the entire deal yourself.

Stick with the basics and get really good at the path you have chosen. Follow it through long enough to give it a chance to succeed. Ask for guidance from more senior investors. Keep the faith, and close off the exit doors. Be patient and persistent, and you will succeed. This series of articles is a regular feature of the REAPS newsletter, and as REAPS Membership Coordinator, I welcome your feedback. Please let me know what topics you might like to see addressed in future articles for the novice real estate investor. I can be reached by email at [email protected]

About the author…

Wendy Ceccherelli is the volunteer membership coordinator for REAPS. She has been a full-time real estate investor since 2006, and is the designated broker and owner of Home Land Seattle.

Prior to her career in real estate, she spent twenty-five years as a government arts funder. More information on real estate topics may be found on her blog at www.WendyWonder.Blogspot.com.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

James Dainard, Co-Founder of Heaton Dainard Real Estate has completed over a thousand real estate transactions in Western Washington. We are giving you the opportunity to ask an expert your top real estate investment questions.

“I am in the process of selling my home. It has a spectacular view of the mountains, an enormous garage space and a beautiful garden. My agent and I disagree on whether I should factor these upgrades into the listing price of the home. Any advice?” – Joanna, Snohomish

While those features of your home may be selling points, truth is, potential buyers may not value them nearly as much as you do.

By pricing your home higher because of the special features that you see as “upgrades,” you are shrinking the entire potential market of buyers. This is why it’s important to list with an experienced agent that will be able to provide you with a complimentary marketing analysis of your house. A CMA is an impartial evaluation of market activity used to price your house correctly using active, pending and sold listings. A professional agent will have the skill and experience to understand how much extra views and outdoor space can command in a particular area. Heaton Dainard’s agents have sold homes in every neighborhood of Western Washington and can provide you with a very accurate CMA. The pricing of a home is so important in attracting buyers when the listing goes live and you want to get it right the first time to insure that your
house sells quickly for top dollar.

“I am considering buying my first cash flow property in Western Washington. How is the area’s rental market? And what kind of changes can I expect to see in the next few years?” – Phil, Bellevue

You’re not the first to ask this question. We have more buyers than ever that are scooping up cash flow properties as a way to make passive income and create long-term financial goals to help towards retirement. Check out the stats!

• Effective rent at end of 2012: $1,060

• Rent increase from 2011: 5.8%

• Vacancy rate: 3.8%

• Forecasted effective rent growth in 2013: 5.2%

Big companies such as Boeing and Amazon drive up demand for housing in King and Pierce counties, but the city’s unique geography means supply is limited. Rents in Seattle increased the most of any U.S. market in 2012. While there is an increased supply of apartment buildings being built in Western Washington in 2013, the demand for single family homes and duplexes is higher than ever as families and people with pets tend to go for those. A cash flow property is more manageable than most people think, as long as you work with a trusted agent that has experience finding properties for investors. Heaton Dainard has a whole team of buyer agents that work with investors to find the perfect fit, They can even find you the perfect low maintenance high monthly cash flow property. The best way to get started is to attend Heaton Dainard’s Cash Flow & Flip course. It provides you with all of the tools you need to get started. Send an email to [email protected] to get started!

Got a question? For more information about Heaton Dainard, visit our website at www.heatondainard.com or give us a call at 425.881.5131.

About the author…
REAPS James Dainard1 Ask James Dainard: Hows the Rental Market?James Dainard is one of the founding partners of Intrust Funding, LLC. He has been buying and selling real estate in King, Snohomish and Pierce Counties for the past seven years. James has built a reputation in Washington for providing investors with multiple exit strategies and supplying them with easy and fast lending sources. He enjoys staying fit, spoiling his dogs, and traveling to exotic locations with his wife Clair.

Previous REAPS articles by James Dainard:
Q & A with an Expert in Real Estate Investing
Q & A: Green Edition

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

By Brian Sorensen
General Contractor & RE Investor

You’re right to be concerned.  Underground oil tanks at houses all over the Puget Sound are rusting away and leaking oil into the ground. Who’s responsible for the contaminated soil?  The owner, of course!  Because of this, it’s best to be careful when looking at a property with an underground oil tank.

Underground oil tanks have an average life expectancy of 10-15 years.  A 20 year-old tank is risky.  A 30, 40 or 50 year-old tank is riskier.  Most underground oil tanks were installed decades ago and many of them are undocumented.  With buyer’s inspections common nowdays, most inspectors will note the existence of an underground oil tank and require assurances that the tank is stablized and taht the soil is not contaminated.  A buyer’s lender will also want to see this.

An underground oil tank which has been leaking for years (which many have been) will cause the owner to be responsible not only for the tank decommissioning or removal, but also for soil testing and removing all contaminated soil on the property and then filling everything back in. Sometimes the contaminated soil has gone under the house or the driveway, usually at the elevation of the bottom of the tank.

This type of clean up is extremely expensive and can easily kill a deal.  An old tank which is not leaking can be decommissioned or removed for $1,000-$1,500 depending on access and other site specific issues. This is not a deal killer.  You just have to work it in the budget.  Decommissioning involves removing old heating oil and sludge from the tank and then filling it with an inert material such as slurry, foam or sand.

You can locate the tank by looking for a fill pipe and a vent pipe sticking out of the ground.  You can also use a metal detector to locate the tank.

The trick is in knowing whether the tank is leaking or not before you get into a deal.  The best way to detemine this is with the use of soil testing.  A soil tester will dig several deep holes around the underground oil tank until they get below the bottom of the tank.  That’s the elevation where the leaking oil is most commonly found.

Then they will take a soil sample from each of the test holes and send them to a laboratory to be tested.  There are soil testing labs locally so the results will be available within a few days.  A soil test costs about $400.

One way you can do a preliminary test yourself is by spending an hour with a post-hole digger digging some test holes yourself.  As you dig, have a pan of water nearby.  Periodically put some of the soil you’re digging out into the water.  If there’s oil in it, the oil will pool on the surface of the water like it does in oily parking spaces.  This may not be conclusive, but if you do find oil then you know the tank is leaking and you can decide to either pass on that property or to get actual soil testing to see how extensive the leaking is.

About the author…
Brian Sorensen is a general contractor and investor who partners with REAPS members.  His company, Unity Construction LLC, is a full-service residential construction company in Puget Sound. His construction company also invests in single and multi-family properties to both flip and hold.  Brian is a Sounders fan and plays tennis for fun.  To contact Brian, send an email to: [email protected] or call 360-731-1963.

Previous REAPS articles by Brian Sorensen:
Wet Basements – Oh My!
What to do with these aluminum windows
Buying Rehab Materials

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 10.0/10 (2 votes cast)
VN:F [1.9.22_1171]
Rating: -1 (from 1 vote)

Comments (0)

By Doug Owens

I have previously written about a fairly recent court case in which an investor who was the successful bidder at a sheriff’s auction sale of a condo that was held to foreclose the HOA’s lien for unpaid assessments was able to fend off a challenge by the original owner’s lender who tried to upset the sale based on the disparity in the purchase price of about $13,000 compared to the value of the unit at about $170,000. In that case, the bank, although it had been made a party to the HOA’s foreclosure lawsuit and given notice had not participated in the case.

The court held that the bank had waived its right to challenge the sale. In that transaction the investor reaped windfall profits based on the bank’s failure to protect its rights.

Another more recent case shows that there are pitfalls for investors who try to replicate the results of the successful buyer described above. In this recent case the HOA sued the owner to foreclose its lien, but did not name the lender of record as a party in the case. This is not uncommon in such types of proceedings. Although the bank was not named as a party, it was aware of the proceedings. Had the bank been named as a party, its lien could have been foreclosed along with the owner’s interest. The bank and the HOA reached a stipulation in which the HOA recognized that the bank’s lien would not be affected by the judgment of foreclosure. This stipulation was filed in the county records one day before the sheriff’s auction.

The investor bid at the auction and won two properties, both subject to the same fact situation: underlying bank deeds of trust but the banks were not named as parties to the case and the HOA recognized in a stipulation that the banks’ deeds of trust would not be affected by the foreclosure. The HOA had received a default judgment in the foreclosure cases because the owners of the properties did not participate. The properties were auctioned based on a judgment that said “All right, title, claim, lien, estate or interest of the Foreclosed Defendants, each and all of them, and of all persons claiming by, through, or under them, in and to the Property or any part thereof is inferior and subordinate to Plaintiffs lien and is hereby foreclosed.”

Once the auction was concluded, but before the sale had been confirmed, the investor learned of the underlying deeds of trust and then tried to withdraw his bid because he became aware that he had bought the condominiums subject to the existing liens of the lenders. The court refused to allow the investor to withdraw the bids and confirmed the sales.

On appeal the court considered the investor’s argument that the language quoted above was confusing and led the investor to believe that if successful at the auction he would take the properties free and clear of any liens. The investor claimed that this supposed confusion was an “irregularity in the proceedings” that justified allowing him to withdraw his bid. “The court denied this claim as well, holding that all that was really exercise due diligence The court rejected this argument and noted that there were in fact no irregularities in the proceedings that resulted in the sheriff’s sale. The investor also objected because the stipulation between the bank and the HOA that the bank’s lien would not be affected by the foreclosure would not have been viewable in the public online records until after the day of the auction. The court denied this claim as well, holding that all that was really involved was the investor’s failure to exercise due diligence before making his bid, because if he had searched he would have found the two underlying deeds of trust on the titles involved.

The teaching of this case is that situations like the earlier windfall reaped by the lucky investor are rare and those who bid at condominium HOA lien foreclosure auctions are well advised to do exhaustive title searches and if the underlying lender has not been named as a party to the foreclosure lawsuit, to proceed with great caution. The preceding is intended to be educational and should not be considered Legal Advice.

About the Author…
REAPS Doug Owens HOA Foreclosure Auctions   Let The Buyer Beware!Doug Owens practices real estate law and general business law from his office in Seattle.  He offers a 20% discount for REAPS members and he can be reached at 206-985-6679 or [email protected]

Previous REAPS articles by Doug Owens:
HOA Lien Foreclosures
DODD-Frank and Seller Financing as an Exit Strategy

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

By Mark Kohler

As all small business owners know, this is a critical time of year to try and dig up all the expenses we can from last year in order to drive down our tax bill as low as possible.

As you are sitting around your kitchen table organizing receipts and combing over bank and credit card statements, don’t be timid or shy when considering your expenses. I truly believe that far too many business owners, CP As and Tax Preparers are overly conservative and miss out on important expenses that we are entitled to. Here are 5 tax deductions that should be maximized to the greatest extent possible and will have a major impact on your tax return:

1. Travel related expenses. In my opinion, this is one of the most underutilized tax deductions by small business owners today. Unlike meals and entertainment that are limited by 50%, travel expenses are 100% deductible. These include airfare, hotel, rental cars, valet, taxi, trains, tolls, etc… You would be shocked to know how many tax returns come across my desk every year of new clients with literally zero travel deductions. Consider all of your travels last year that may have involved a meeting with a client, a vendor, or a training meeting, a tour of a competitor’s facility or store, your annual board of directors, shareholder, manager or member meeting, a conference with retreat with a partner, the list goes on and on. It just doesn’t make sense for any business owner to not have some travel expenses.

2. Auto Deductions. Remember this isn’t travel, but expenses for your cat or truck used in your business. There are two main options: mileage or actual expenses, and statistics show that 90% of small business owners actually utilize the mileage method. For last year in 2013, the mileage deduction was 56.Cents per mile. Surprisingly, again I see many taxpayers shy away from claiming their true mileage because they are afraid of an audit. True, you should do your best to keep a written record, but if you haven’t been extremely detailed, still utilize an estimate and take the deduction. I would rather see my client defend the deduction than not take it at all. As for ‘actual’ expenses, this is for those typically with large trucks or SUVs. Again, do your best to track down your fuel, repairs and maintenance for last year if you used the <actual’ method.

3. Dining and Entertainment. Again, a highly underutilized expense by small business owners and should be a healthy line item on your tax return. Please make sure you consider all of your meals last year where you discussed business with a partner, or a potential client, vendor or strategic alliance. If you didn’t keep a receipt, still take the expense. Another overlooked fact is that you can write-off dining by yourself when you are traveling. This has been defined as outside of a normal commute of your home office or place of business and business owners should be diligent in tracking these expenses. However remember, although you are traveling, all dining and entertainment is still limited to SO% of the full amount.

4. Office Supplies and Technology. Every small business owner is regularly buying supplies and upgrading their phone, computers and digital reading devices. Don’t forget that when you have a small business, the majority of these items can be fully expensed. Make sure you track them and discuss with your tax advisor which expenses for items should be reduced by some percentage for personal use if necessary.

5. Technology and Telephone. This is obviously an ever increasing expense as small business owners utilize technology to do business nationwide, if not worldwide. Many also don’t know that recent case law and IRS rulings allow business owners to write-off 100% of their cell phone expenses, so long as they have at least one dedicated home phone line. Moreover, make sure to include the cellphones of your family members that work in the business alongside you and need a cell phone for their legitimate role in the business.

Now with all of these expenses, you need to take into account your overall income, profit and the size of your operations. Your deductions need to look realistic and common for the type of business you have. However, if they’re legitimate and you have support, don’t be afraid to take them. Go for it and just have your records as back up if you need them in the future to justify your expenses.

Join Mark Kohler at our next REAPS meeting on Thursday, March 27th & special all-day event on Saturday, March 29th

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

By Eddie Speed

It’s time to re-evaluate your real estate investment strategies and holdings.  The market has already made a fundamental shift that has changed the entire industry.  The smart money has already reacted to this and will reap huge rewards as a result.  If you wish to take advantage of these market changes, like the smart money already has, you must first identify what these are.

Fundamental Change 1: Banks, FNMA, FMAC, FHA & HUD have shifted away from foreclosures and to selling the debt

Evidence of a market shift from REO and foreclosure sales to note sales are popping up everywhere.  For example, Michael Bull, host of the popular “Commercial Real Estate Radio Show” recently interviewed Charlie Brake of Hartman Simons (Atlanta based Commercial Real Estate Law Firm), who said this: During his appearance, Brake noted that when faced with non-performing loans, lenders often prefer to sell the note rather than go through the foreclosure process for a variety of practical and financial reasons.  Selling a note often is a quicker process than foreclosure for a lender, and it also enables a lender to avoid paying insurance and real estate taxes on a foreclosed property, he said.  Furthermore,  “by selling the notes, [the lenders] don’t get in the chain of title, so they don’t have to worry about any environmental issues or any other sort of issues that might arise from being in the chain of title.”

Fundamental Change 2: Hedge Funds and other Cash Buyers are investing Billions right now

Billions of this “anxious money” has found it’s way to hedge fund companies.  You may not realize this, but hedge fund companies have been the bigger buyer of real estate for years.  The individual investors don’t even come close.

Hedge fund company managers are highly paid individuals who have some of the brightest minds in the financial markets.  So what are these hedge funds buying today?  Performing and Non-performing Notes.

Sue Allon, CEO of a Denver-based company that specializes in examining toxic assets and determining their present value, said this in a recent article: “I can name at least 12 hedge funds with $30 billion who are ready to start to buy them [non-performing note portfolios ].”  Allon figures the banks could “quickly find buyers for more than $1 trillion worth of the stuff.”

Hedge funds are here to stay.  The real estate investors who don’t realize this are in for some tough times ahead.

In addition, many individual investors, fearful of the stock market and precious metal prices, are now looking at alternative investments.  Over the past two years, real estate has become an attractive alternative investment as evidence by the 4+ million homes that sold for cash from 2010 to 2013.  the vast majority of those sales were purchased as investments not residence.

That trend has slowed for several reasons: 1) The supply of REO properties has dwindled making the prices go up, 2) Many investors simply don’t like the hassles and liabilities that come with property ownership.  What about the money though? are there still cash investors’ anxiously looking for higher returns?  According to the Federal Reserve Statistical Release on July 2013, there is now approximately 10.2 trillion dollars in cash accounts (called M2 supply).

That is an absolutely staggering number.  Consider this; a trillion seconds is 32,000 years!  By the way, that cash account number doesn’t even include retirement accounts.

Fundamental Change 3: The Discounts on Notes are Dramatically Greater than the Discounts on Property Sales

The discount prices on both performing and non-performing notes are so great right now that you don’t even need a calculator to know you are going to make a return on investment.

While most real estate investors are happy buying at around 70 cents on the dollar, Note buyers are buying at 30 cents on the dollar or less; In some cases, much less.

As previously stated when you buy a note for $2,000 and can cut the loan amount due down to $60,000, you don’t really need a calculator to see if that works!

This Industry Does Require Specialized Knowledge

The opportunities have never been better.  These industry changes have formed the perfect storm for note buyers and brokers.  You can either catch this wave or simply get crushed by it.  Contact NoteSchool, the nations foremost note educational institute, today at http://www.NoteSchool.com.  Extraordinary training yields extraordinary results.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

By Brian Sorensen

General Contractor & RE Investor

Winter in Western Washington is the best time to go shopping for houses with basements because the rain that has fallen leaves recent evidence of water problems in the basement. In the summer, only the long-term evidence of water remains.

The two greatest causes of water coming into the basement are also fairly simple to correct. Many houses have grades that slope into the house rather than away from the house. Sometimes they were graded that way and sometimes the backfilled soil around the perimeter of the house sinks as time passes creating surface water flow towards the house. The other is gutter downspouts that have nowhere to go. The water runs down to splash blocks and soaks into the soft backfilled soil around the perimeter, inundating the outside of the basement wall.

Historically, basement foundations weren’t waterproofed and many of those that were have deteriorated over time. There are also cases of houses being placed near springs or in wet soil areas which can be even more problematic to resolve.

Once surface problems have been addressed the following options are available to deal with the foundation itself. Inside-the-basement remedies are less expensive and also less effective than outside-the-basement remedies, but are worth considering depending on how severe the water problem is and how much money is available to tackle the problem. Cracks can be sealed on the inside of the foundation and the concrete walls (or block and grout) can also be sealed with waterproof paint or hydraulic cement. These fixes are considered temporary because they still allow water to penetrate through the majority of the basement walls and thus are prone to failure.

Another inside fix is more expensive than this, but still less expensive than the best solution. This inside fix involves cutting a trench through the concrete around the inside perimeter of the basement, installing perforated pipe with drain rock, and then “daylighting” or pumping the water out. This is an interior perimeter drain. The main problem with this method is that it doesn’t necessarily relieve the water pressure on the outside of the basement walls so leaking can continue to occur. The water has a longer, indirect path to run before it is captured and removed.

The best way to go, but also the most expensive, is the exterior perimeter drain. This involves trenching around the perimeter of the basement walls all the way down to the footing. Ideally, this is done with a backhoe (less expensive) or an excavator (more expensive). If the site doesn’t allow a machine to do the work then a band of laborers must be hired to dig it up by hand.

Once the exterior of the foundation is exposed it gets pressure washed, dried and sealed with one of 300 different concrete sealing products, all of which are the best according to their manufacturers and sales reps. Some of them are better than others, however. Then a perf pipe is enclosed in filter fabric next to the footing all the way around the perimeter and the water is again either daylighted or pumped to an appropriate location.

Finally, the foundation is wrapped with a drainage plane which sheds the water to the new footing drain if it happens to make it through the about-to-be-installed drain rock which gives the water two opportunities to drop to the footing before it hits the sealed basement walls. You can imagine why this is the most expensive option, but also the best. There are essentially three exterior-side defenses keeping the water from penetrating the walls now. This is as good as it gets.

Matvey Construction, a REAPS partner, specializes in this type of work. If you don’t want to take it on yourself then you might want to give them a call.

About the Author…
Brian Sorensen is a general contractor and investor who partners with REAPS members. His company, Unity Construction LLC, is a full-service residential construction company in Puget Sound. His construction company also invests in single and multi-family properties to both flip and hold. Brian is a Sounders fan and plays tennis for fun. To contact Brian, send an email to: [email protected] or call 360-731-1963.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

A Series for the New Real Estate Investor

By Wendy Ceccherelli
REAPS Membership Coordinator

There is an old and speculator’s adage to “Buy by the acre; Sell by the foot,” a sure-fire formula for making profit. This concept is applied in many different ways to real estate, with the idea of taking something larger and selling it at a higher price in smaller, more affordable increments.

I have seen this concept applied to condominiums, buying a large building or parcel and selling off separate units. I have used it myself to buy or rent income-producing property by the building, and to lease it out by the room. Many commercial spaces are subdivided this way by artist-developers in creating art space. Time shares, vacation rentals, co-housing and fractionalized ownership models are all applications of this concept. These are but a few examples.

Affordability, as well as potential profit, are by-products of this approach to investing in real estate. Recently, I was hired as a buyers’ agent for four friends looking for a nice residential property in Seattle that they wish to purchase as Tenants In Common (or TIC). I refer to them affectionately as “Cuatro Amigos.”

These Cuatro Amigos are looking for four or more bedrooms, so that each of them has their own separate space, in addition to nice larger common areas in more desirable neighborhoods that either of them might be able to afford if they were to purchase on their own. They are considering features, such as separate bathrooms, entrances, wings or additional kitchens that can accommodate a communal living arrangement. Each will contribute to the down payment and to the monthly mortgage payments, but in different amounts, reflecting each owner’s financial ability and different ownership interests. They also intend to modify percentage of ownership based on the private space each will occupy in the house they purchase.

Tenancy In Common is one way of vesting title or ownership to property. TIC is defined as “a form of concurrent ownership of real property in which two or more persons possess the property simultaneously, it can be created by deed, will, or operation of law.”

TIC may come with or without rights of survivorship. This means that when one owner dies, his/her ownership interest may be passed on either to the surviving owners or to the owner’s heirs. Legal and tax professionals should be consulted by anyone considering this type of ownership model.

Many different models exist for vesting title or ownership in real estate. Your real estate title and escrow representatives may also be helpful in explaining options to home buyers and investors exploring different possibilities for taking ownership of real estate.

This series of articles is a regular feature of the REAPS newsletter, and as REAPS Membership Coordinator, I welcome your feedback. Please let me know what topics you might like to see addressed in future articles for the novice real estate investor. I can be reached by email at: [email protected]

About the author…
Wendy Ceccherelli is the volunteer membership coordinator for REAPS. She has been a full-time real estate investor since 2006, and is the designated broker and owner of Home Land Seattle.

Prior to her career in real estate, she spent twenty-five years as a government arts funder. More information on real estate topics may be found on her blog at www.WendyWonder.Blogspot.com.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

By Shan Whiteside

If you don’t design your own life plan, chances are you’ll fall into someone else’s plan.  And guess what they have planned for you?  Not much.”  - Jim Rohn, 1930-2009, Author and Speaker

I work out.  The biggest month of enrollment for gyms is January.  That is when they see a huge spike in membership, and by Feb. 15th – well, let’s just say the gym is a little less crowded.  But I am still there, because my trainer has given me 3 secrets to keep me on track through the year.  So let’s cross-apply my trainer’s advice to real-estate investing:

In order to “bring it”, the first secret to a great workout is CONSISTENCY.  This isn’t just about showing up every time – but also about sticking to your plan.  You don’t want to be changing it up all the time.  Same with real estate.  To be consistent, it helps to have a good plan.  Training works because the trainer creates your plan for you and keeps you accountable.  If you work on your own, you will need to make your own plan.

PLANNING You can’t just start anywhere.  For workouts, trainers first ask you about your goals so you have something to build towards, then they take measurements, they talk about habits, they get you started slowly with stretching and warm up, and they approach your workout as a series of micro cycles of several weeks to give focus to your goals.  There are lots of types of workouts, but the trainer targets all that as well as daily activities for you in the background.

So for your 2014 Real Estate Workout, you need to create your own plan in this level of detail: Do you have a real estate plan for consistency-complete with a focus, cycles, and daily activities?  And what is your overall goal and objective for real estate?  Your plan should let you know where you are at in the big cycle – say the month, plus what your focus will be for each day before you start (say Monday Marketing, Tuesday Seller Calls).

Next…

  • ACTION PLANS – Likewise Peter Drucker reminds us “Always plan long-term; act short-term.”  So for action, make a WAC “Weekly action plan” or DAC “Daily action plan,” depending on what works for you.  Also schedule relevant items on your calendar in time blocks.
  • REST – Plan for and control emotions; build some fun and down time into your plans.
  • ORDER – Clear and eliminate distractions and messiness so you can focus.  Brian Tracey says “neatness is a key habit to productivity.”
  • EXECUTE – Remember, make planning succinct to get you moving, but if you are only organizing or planning, you are not working!  Contrast the saying… “Every minute you spend planning will save you 10 minutes in execution” vs. “A good plan violently executed now is better than a perfect plan executed next week.”  - George S. Patton

So there you have it! Secret #1: CONSISTENCY through a good PLAN – the first element of your New Year’s Real Estate workout to get you pumped and ready for a successful year.  Make it an awesome 2014!

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

 

 

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)

By Will Heaton

Intrust Funding, LLC, the leading hard money lender in Western Washington, is bringing you the All eight counties in the area experienced generous price increases from 2012 to 2013 (YoY).  This information verifies that confidence has returned to the market.  This is also evident in the increased number of listings year-over-year.

Those who are interested in investing in real estate should be encouraged by the positive trends in the local market for December 2013.  In King County, foreclosures are down 52% year-over-year, demonstrating continued market improvement.  Snohomish County and Pierce County have also seen great declines in foreclosures in December 2013 compared to the previous year.

Generally speaking, more homes are selling at higher prices.  This is just another indication that the real estate market continues to bounce back and approach a healthy and profitable market balance from its previous 2008 decline.

We hope this information gives you useful insight into the current real estate market.  We are certainly encouraged by the positive market outlook based on the December 2013 and the estimated annual statistics outlined in this report.

We expect 2014 to be just as profitable, if not more, and we have high expectations for our investors in the coming years!  From everyone at Intrust Funding, we wish you all a profitable and happy 2014!

Intrust Funding’s loan volume is higher than ever as investors take advantage of the deals that are out there right now.  Please give our lending team a call to get approval in under 48 hours.  You can contact Loan Specialist, Travis Gossnell at 425-458-5042 or email him at [email protected]

About the author…

Will Heaton is one of the Founding Partners of Heaton Dainard, LLC.  Mr. Heaton delivers an extensive background of real estate expertise and has an all-encompassing knowledge base of real estate development and rehabilitation through the hundreds of transactions he has been involved with over the past 7 years.  Will and his wife Niveen are the proud parents of a baby daughter, Amira.

REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)

Comments (0)