Learn how to prepare yourself as a client working with a Realtor. This market is complicated! You need a professional. It’s important to know who is looking out for you. Learn about Agency and responsibilities to the client in this video.    

Get The Best Real Estate Investment Opportunity With Us!

Submitted by Curt Amesbury So – if you want to invest in real property then Rochester/Monroe County is THE place to maximize your return. It is NOT the place to realize appreciation unless you intend to keep your property for some time (years). Before you start, first think about your comfort level. Do you like the idea of single family houses? Some investors I work with only deal with SF because they view the tenants as being more stable. (The downside is that if the tenant doesn’t pay rent, bills still need to be paid). Do you like the idea of a duplex? City vs. Suburban? Small apartment buildings? Mixed use commercial? Each decision carries pro’s and con’s. Talking to a knowledgeable Realtor can help you sort through the options. The fun part starts by looking for opportunities!

Submitted by Curt Amesbury Okay – so we have an idea of the area and the type of property you want to invest it. If you have options to use cash vs. leverage, remember that cash is king! Since we are not accumulating wealth by appreciation, using cash can drive the best and fastest deal from the buyer’s perspective (you can always refinance after the fact to reduce your exposure). In either case, you will want to be conscious of items that can cost you big bucks now of in the future…such as:

The Roof

The age and condition of the roof surface are important, but what is underneath? Is the original roof made of cedar shake shingles? If so, IT HAS TO GO SOMEDAY! You don’t want to incur the cost of tear-off and plywood installation unless you factor that into your numbers! Does it have a flat roof? If so, be very careful! Rochester’s climate is hard on flat roofs.

Electric Service

If the meter is inside IT HAS TO GO OUTSIDE SOMEDAY! A ballpark estimate is $1200 per 100 AMP service (if you own a multi-family multiply $1200 times the number of units). (Incidentally, if you are moving meters outside have a separate meter box for each service – if someone tampers with a meter you won’t jeopardize the whole building!). Also, upgrading electric or restoring shut off service means bringing the electric box AND electric grounding up to today’s code (electrical certification required)! It’s not uncommon to spend $800 in-ground rods etc.

Water Service

Is the main water line coming into the building a galvanized pipe? If so, IT HAS TO BE REPLACED SOMEDAY!

Sewer Line

Is the main sewer going to the street in good condition? A camera inspection is well worth the $150 a licensed plumber will charge. (One investor I work with owns his own fiber optic cable, so he can investigate sewer lines himself!)

Submitted by Curt Amesbury Anyone who wishes to invest in real estate for wealth building and/or income generation should have a good accountant or CPA. That being said, here are two quick “back of the envelope” ratio models that many experienced investors use to see if the investment property makes economic sense: GROSS RENT MULTIPLIER GRM = Purchase Price/Annual Rental Income CAPITALIZATION RATE CAP RATE = Net Operating Income/Purchase Price

A word to the wise:

Define what expenses are factored into YOUR Net Operating Income. Don’t use anybody else’s NOI figure. COMPUTE YOUR OWN!!

 

Rental Property Insurance Rochester NY

Submitted by Curt Amesbury While almost everyone is familiar with traditional Home Owners Insurance, being the owner of a non-owner-occupied investment property is a little different. As a new investor (and assuming you have a general idea of the type, size, age and location of a property you might buy) I recommend that you talk to a few insurance agents. Landlord insurance can include coverage’s that Home Owners Insurance does not address, so ask questions and get an idea of what options you have. Decide upfront if you want to insure for replacement cost or to cover your investment. Those are two very different things in the insurance world!

Submitted by Curt Amesbury All too often I run into investors who have bad experiences working with their existing Property Manager. If you are making an investment in real property that you cannot visit yourself, then it is a good idea to properly screen and selects the local manager who will be guarding your investment.

Some criteria for selection could be:

1. Is the firm run by a Licensed Real Estate Broker and a member of the National Association of Realtors? (If so there is an accepted Code of Ethics that governs business dealings).
2. Does the firm have a legitimate brick & mortar location – not just a Post Office Box. Can you and tenants actually go there and find someone on duty during business hours?
3. Does the firm report owner statements using a professional reporting system? Is it integrated with a standard database (such as Quickbooks or Excel).
4. How much is the fee and what is covered? What type of extra charges can you expect? If you sign up, what is required for either party to exit the contract?

Ever had an agent denied showing you a home because you weren’t pre-approved for a mortgage? It’s not because they’re mean, or they don’t value your business… it’s actually because they’re looking out for your best interests.

Let’s face it, shopping for a home before getting pre-approved for a mortgage is like walking into a grocery store without a wallet. You may have the desire to buy, but you lack the ability. Let’s cover some basics…

What is a mortgage pre-approval?

In a nutshell, a mortgage pre-approval is written assurance from a lender or broker that you’re able to borrow money to purchase a home up to a certain amount. It’s based on the income, employment and asset documentation you supply at the time of application, in conjunction with your credit history. So let’s look at the 6 reasons you should get pre-approved.

1. It carries more weight than a “pre-qualification”.

A pre-approval differs from a pre-qualification. With the former, the lender has actually checked your credit and verified your documentation to approve a specific loan amount (usually for a particular time period such as 30, 60 or 90 days). A pre-qualification can be useful as an estimate of how much you can afford to spend on your home, but it’s a less accurate indicator of your ability to purchase. A pre-approval always carries more weight.

2. You’ll know how much house you can afford.

Getting pre-approved before you begin house hunting allows you to know how much house you can realistically afford. Knowing this narrows down the options and makes the selection process more efficient. Not to mention, it protects you from the unpleasant surprise of realizing the home you fell in love with doesn’t fit your budget.

3. It adds clout to your offer.

In many markets, homes attract more than one offer. If the sellers are weighing one offer against another, they may lean towards the one accompanied by a pre-approval letter. That’s because pre-approvals instill confidence that the buyer is financially capable of purchasing their home.

4. It could increase your negotiating power.

In addition to strengthening your offer when compared to buyers who haven’t taken this step, getting pre-approved may give you the upper-hand when negotiating the price. If the homeowner is eager to sell, they may be more willing to accept a lower offer from someone they’ve been assured is financially capable of purchasing their home.

5. It saves time.

Obtaining a mortgage is a lengthy process. Getting pre-approved ahead of time shortens the time between contract to close — this way you’re ready to proceed with finalizing the mortgage once you’ve found the home you want to purchase.

6. Without it, most agents won’t work with you.

It makes sense, too. Right? Think about it: when you hire an agent, he/she will invest countless hours showing you homes over the course of your house hunt. If you were in their shoes, wouldn’t you want assurance that your hard work would lead to a favorable outcome for both you and your client?