... and why you may be paying more and getting less

The Insurance Industry has lost billions over the past few years

due to a series of natural disasters and tragedies

and similar to Las Vegas

they don't like to lose money

keep in mind that insurance is designed to mitigate risk

and depending how risky your condo building is

the cost to insure can go up dramatically

the only way to pay for this is to raise the HOA fees

which can make them unaffordable to many owners

some condo associations have made a decision

to carry insurance that is lower than full replacement cost

which means that if there is a disaster where

the building cannot be repaired

and must be demolished and ultimately rebulit

there would not be enough insurance money available

to put up the new building

the owners would then need to pay a special assessment

to complete the new building

and if that is not possible

the owners, in essence, own a share of the dirt where the condo once stood

we go over the nitty gritty details in today show

...is your 1st step to wealth building through real estate

This is the time tested number one way to make money for more than 100 years it has even outperformed the stock market during this time most investors start out small with 1 property many times it is a current residence that they no longer want to live in but don't want to sell (or can't sell for some reason) some do it on their own others hire a property manager and do much less work all month long they do sacrifice a little money but save a lot of time along the way and those landlords just watch for direct deposits each month today we discuss several strategies and a checklist of items to get you started on your journey to becoming a real estate investor

...is a growing segment of the real estate market

Most often it occurs when timelines have changed

those needing to sell a year or 2 after a home purchase

where property values are less than desirable to sell a home

create the largest category of of home owners in this situation

home buyers that had low down payments or none at all

and factor in that the sellers may have helped with closing costs

there simply may not be enough equity in the home today

to facilitate a sale where the owner would get a profit check

or even worse...paying money at the closing to complete the sale

recent FHA and VA Loan buyers are particularly vulnerable

so what if there was a different view of this seemingly troublesome situation

renting a home as opposed to selling it

would mean a transition from owner to investor

becoming a landlord paves the way for a renter

to pay off the owners mortgage over a period of time

there is likely some positive cashflow

and the mortage balance comes down every month

which opens the door to selling down the road

when prices are higher

and the loan balance is lower

but what if you had to pay $100-$200 per month for the mortage

in the long run it would be a small amount of money invested

to control an assset worth $250,000-$500,000

where else can you buy into to something like that so cheaply?

listen in as we go over the math in todays show

...Can be done by using a 1031 Exchange

Real Estate investors often use this strategy

when they want to be able to purchase more real estate now

and pay the taxes from the sale in the future

I am definitley not a CPA or an attorney

but here are some examples of why a 1031 Exchange is attractive

capital gains tax is due when selling most properties

short term capital games occurs when

a property is bought and sold in less than 1 year

the profit from the sale is considered ordinary income

it is added to the rest of your income and taxed at that bracket

long term capital gains occurs when a property is sold

when ownership is longer than 1 year

that tax rate is currently 15% of the profits

a 1031 exchange delays the taxes due

by placing the proceeds of the sale into a 1031 Exchange Intermediary

the money must be left in there until a subsequent purchase is made

you mjust identify 2 properties within 45 days of the closing

and complete a purchase within 180 days

we discuss several scenarios in todays show

detailing how things work out and why certain decisions are made

...many home improvements that you want to make

• roofing
• hvac
• plumbing
• electrical work
• fences

are prime examples of work that often needs a permit

and if you knowingly (or unknowingly)

do some work as a DIY project

or hire a handyman to perform work

that requires a permit

and/or needs to be done by a licensed contractor

you may very well fly under the radar for many years

and it may just come back to bite you

when you sell the home

many times during the home inspection

non-permitted work is detected

and then things can get messy

we give several examples of what might happen next

and the solutions that may "fix" the problem

...to add more square footage is worth considering

the time and cost of the project is often more than most want to take

quite often the homeowner elects to do 1 of 2 things

1. keep the existing footprint in their home
2. sell the home and buy one that has the size that they want

but if you were going to add space to your home

what would give you the best bang for you buck

especially if you plan to sell the home at some point

adding an extra bedroom is the safest choice

a bonus room would be the 2nd option in that scenario

now lets suppose that this is your forever home

then the door opens much wider

• a fitness room
• a sports bar
• a home theater room
• relocate the kitchen
• an outbuilding garage and loft

the best return on your investment

will be based on the timeline that you will remain in the home

we dig in today to guide you through the decision process

...do you really need to look at before making an offer

10 ?

20 ?

50 ?

the actual number may surprise you

I believe that today's buyers typically look at more than 100

now stay with me on this

given the amount of information available online

buyers are able to research properties in great detail

and rule out dozens of them based on their findings

this pre-work has greatly reduced the number that they see in person

now with that said

buyers may still do multiple home tours

often over an elongated period of time

which in turn means that some of those homes

go under contract with a different buyer

and the search then takes longer

there isn't a right or wrong way to shop

it just depends on your timeline and your goals

we expand upon these thoughts in today's show

...is "almost never" a good idea

• even for veteran home buyer
• even for contractors
• even if its a brand new home

Its not that the sellers are always hiding something

or that home builders are doing sub standard work intentionally

hidden defects happen

and construction works can make mistakes

home inspections can find those things

or confirm that everything is ok with the home

both are good outcomes for the home buyer

writing offers with no inspections may help negotiate the price

but may come back to bite you

when you need a wind mitigation and 4 point to get insurance

as the seller doesn't have to allow it

savvy home sellers may choose to pre-inspect their homes

before going on the market as part of a sales strategy

that lets the buyers know upfront

what an independent expert thinks about the home condition

here are some the most popular inspections

• whole home report
• 4 point inspection
• wind mitgation report
• well and septic
• wdo report also known as the termite inspection

... your life situation demands it

We all know the reasons to buy vs rent a home

• home ownership
• build equity
• have a place of your own

but what doesn't often get enough attention

are the reasons why it makes sense to rent

• change in family situation
• long hours at work
• lifestyle choices
• frequent traveler

today we discuss real life circumstances

where renting is the right choice

and when it becomes compelling to buy a home

....and how it impacts the market value of your home new homes are far more energy efficient than those built in years past adding in a solar energy system in addtion to that can reduce monthly energy costs even further the trick is to right size your decision based on the timeline that you plan to own your home solar energy has not proven to be a dollar for dollar increase in a homes value and for those that plan to be in their home for just a few years there may not be enough time for the cost to make financial sense for those that plan to be in the home long term and want to own a green home a whole house solar system may be the exact right thing to choose if you are an investor considering solar options spending some time crunching the numbers is advisable we go deep into solar energy products today and provide some thought provoking conversation