Real Estate Investing 101

Welcome to Real Estate Investing 101

Welcome to a different kind of real estate investment site.  This is not a get-rich-quick site. We are not selling seminars, books, DVD's or webinars. You won't have some salesperson calling or emailing you. We don't even have a widget that will try to get into your wallet.

Our goal is to provide both new and experienced real estate investors with information and insights gained by our twenty-plus years in the acquisition, management and sale of rental property. We have pulled together a variety of essays, data and information designed to help you be a more intelligent and profitable real estate investor.

Can I Buy A Home With An IRS Tax Lien, Maybe

We've seen a few deals come by where an IRS tax lien showed up during our due dillegence.  Our mortgage friend, Ron Hall, from BNC National Bank just sent us this article that explores this subject. If you have more questions, give Ron a call at 623-293-6970 or pop him an email at rhall@bncnationalbank.com. Here is what Ron has to say:

Many home buyers and real estate professionals find out they are dealing with a tax lien and assume that this buyer is done and move on to the next client.

I am here to tell you that is a HUGE mistake. In FHA lending the rule of thumb is that if the collection can affect title it has to be paid off, well that’s a guideline not a rule.

A couple of things come into play that most people are not aware of: First, is there a payment arrangement? In this case can you show that you have set up a payment plan with the IRS and have made those payments in a timely manner? The gold standard here is 12 months of canceled checks as proof.  If the answer to that is yes the second and very little known tool is… Will the IRS subordinate the lien to the mortgage? We’ll most of the time that answer is YES. Think about it for a minute, you owe the tax guy some money, you want to buy a home, so you ask the IRS to subordinate the lien so that you can accumulate an asset that they can collect against in the future if you default. Is there really a downside for them?

Hope this info helps provide some options and clarity to those who face buying a home with an IRS tax lien.

Gene Urban
www.UrbanTeamAz.com
602-234-5777

Information is deemed accurate but not guaranteed.

Flipping Homes Just Got Easier With New FHA Guidelines

Good news for residential real estate investors who are flipping properties. Last Friday FHA issued a waiver on the 90 day flipping rule. In the past, a real estate investor had to let a property "season" for a minimum of 90 days before they could sell it to a buyer using an FHA loan product. Since many of the flips were in the under $150,000 range, FHA buyers were a big part of the market.Under the new FHA guidelines, the waiver of the 90 day rule allows an investor to put the property on the market immediately with the following restrictions.

1. Waiver takes effect February 1, 2010 and will last for one year unless extended.
2. Investors are now exempt from the 90 day seasoning rule.
3. All transactions must be arms-length.
4. No identity of interest can exist between the buyer and seller.

There are a few more considerations in the guidelines. We understand that homes marketed for more than 20% of purchase price will need to substantiate the increased value. So keep all your receipts for costs incurred in the renovation.

Investors should also understand that appraisers will still evaluate the price of the home based on current market value. We advise performing a detailed evaluation of the neighborhood you are investing in and plan your expenditures wisely. You don't want to do all this work only to find you have overbuilt for the neighborhood.

Best to you and thanks for following us on Real Estate Investing 101.

Gene Urban and Ron Urban
The Urban Team at Realty Executives
602-234-5777

our other sites:

www.SearchforHomesinPhoenix.com -- The best real estate search site for Greater Phoenix

www.UrbanLifeBlog.com -- Downtown and Central Phoenix Information

www.Short-Sale-Phoenix.com -- Everything you wanted to know about short sales.

Section 8 Housing and the Benefits to Landlords In Arizona

Section 8 Housing is one of the rental vehicles available to landlords. In our opinion, it has received an unwarranted bad reputation. Many feel the program will bring bad tenants and problems when in fact, most landlords who utilize the program are happy.

The city of Phoenix Housing Department, the largest provider of Section 8 housing in Arizona, have a web site dedicated to information about this program. Among the many topics are the benefits to landlords that we have summarized below.

There are several benefits to landlords who participate in the Section 8 Housing Choice Voucher (HCV) program, from free advertising for your unit to annual inspections of your property.  There are no fees or charges assessed to property owners for services provided under the Section 8 HCV program.  Also, there is no application process required for potential landlords.

The Housing Department does require that all owners joining the Section 8 HCV program register their property with the Maricopa County Assessor’s Office Residential Rental Registration program.  The Housing Department also encourages certification of properties in the Phoenix Police Department’s Crime Free Multi-Housing program.

 

How the Section 8 Housing Choice Voucher Program Works

The Section 8 Housing Choice Voucher (HCV) program provides assistance, in the form of a Voucher, to qualified families, seniors and persons with disabilities for rental units chosen by the tenant in the private market.

The city of Phoenix Housing Department provides monthly payments directly to participating property owners to offset the cost difference between tenant payments and unit rent.  Tenant rent payment amounts are determined based on their adjusted income.  Program applicants may choose from a variety of housing options including apartments, condos, duplexes, single-family homes and townhouses.

 

We encourage interested landlords to talk with the appropriate people in the City of their interest. If you have properties in the Phoenix area, you can visit the City's section 8 housing web site for more information.

 

We are planning a meetup.com group meeting in March that will focus on Section 8 housing in the Phoenix area. Visit our meetup.com group page for meeting announcements.

 

Best wishes for success

 

Ron Urban & Gene Urban
The Urban Team at Realty Executives
602-234-5777

Rent Concessions & Broken Leases

Many landlords offers rental concessions as a way to attract new tenants. The signs are everywhere… “Free Rent”, “1/2 Off First 3 Months” and even “Free Plasma TV with 1 Year Lease.” When the market is saturated, like the current Phoenix market, landlords get creative.

We gotten some emails asking what damages a landlord can ask the court to consider regarding concessions and evictions.

As with all things legal, we turn to people with the “JD” thing behind their name and that person is most often Phoenix landlord/tenant attorney Andy Hull.  Regarding concessions and evictions, Andy says:

The normal lease agreement usually will have a provision for rental concessions that were given to the tenant as an inducement in signing the lease. These rental concessions then would be repayable as unpaid rent in the event the tenant does not fulfill the lease agreement.

The courts have seemed to be consistent in allowing rental concessions in evictions. The lease must specifically state that the concessions must be repaid as additional rent if the contract is not fulfilled. Most of the courts will also prorate the concessions for those used as of the date of the eviction.

We hope this info has been of help. If you need a knowledgeable landlord/tenant attorney in the Greater Phoenix Market, Andy Hull is a well known quantity. Just go to his web site for contact info and such.

Best to you,

Gene Urban & Ron Urban
The Urban Team at Realty Executives
602-234-5777

November Rent Rates Fall Slightly In Phoenix Area

According to rentBits, a rental search engine for apartments and rental homes, the average rental rates for Phoenix have seen a slight decrease November over October. Collectively, across all bedrooms (3,541 listings), the average rental rates has decreased from $788 in October to $786 in November.

"Demand for rentals in Phoenix has not caught up with supply." says Dan Daugherty, CEO of rentBits. "This is putting slight downward pressure on the rental rates in this area."

In most other cities across the US, rental rates for apartments are seeing a slight decrease for the year. Much of this is due to a decrease in demand. Many renters for apartments are either moving into a single family home rental, moving back in with Family or sharing rooms with friends. This transitional period has put downward pressure on most apartment rental rates.

Source: http://rentbits.com/rb/t/rental-rates/phoenix-arizona

Hope you have a great weekend…

Gene Urban & Ron Urban
The Urban Team at Realty Executives
602-234-5777

Visit our other blogs and sites:

Search for Homes in Phoenix... an incredible property search site
Short-Sale-Phoenix.com… Info site for short sales in Phoenix
Urban Life … the downtown and central Phoenix real estate Blog