Four-plexes and multi-family properties provide one of the highest rates of return and less variance in rate of return. How can you get in on that rate of return?
Four steps to finding a four-plex that pays:
- Find a market: Buy four-plexes or multi family properties in areas that show signs of growth and popularity. Urban area close to shopping, entertainment, transportation has the highest potential for appreciation.
- Select a property: Find an agent that works in the area you are interested in and specializes in small investment property. Then look for a property that is small and easy to handle. The greater number of units, the more time you will spend on showing and rent collection, unless of course you hire a competent property management company.
- Secure financing: Contemplate how long you will own the property. If you plan to have the property for ten years, a balloon mortgage is not the best idea, if you plan to only have the property for a short period of time, avoid a loan with a prepayment penalty. Obtain quotes from a couple different lenders and also the local bank close to the property. Banks are encouraged to make loans to the community they serve. If lenders know that you are considering different financing options, they are more likely to give you the best available terms.
- Decide to hold or sell: To take advantage of appreciation, hold the property and increase the rents each year to keep up with inflation. If your building had good upgrades and is in a great neighborhood, you can base your rent increases on the properties estimated market value. You can also use some of that appreciated value to refinance and invest in another property. If you were lucky enough to buy the property under market value and don’t really want the hassle of being a landlord, make some additional upgrades, take advantage of the current HOT market and sell it to another investor.
Whatever you decide, a four-plex or multi family property makes a great investment! Want to find out more? Call us today 208-343-9393!
Fully leased! West Boise’s best location. Split bedroom design which is the best for tenants available today. HOA dues are $275./month, which includes hazard insurance, common grounds maintenance, trash and irrigation. This one is a great deal.
The market continues to improve. Inventory in Ada County dropped 9% in the month of October – the largest one-month percentage drop in memory. We are down to a 3-month supply of residential property. Closings increased 15% compared to last October and new pending contracts were up 20%.
The average price of a property sold this October was $205,046, 17% higher than the average for last October. The major reason for this price increase was that in October 2011, 46% of all closings involved distressed properties while this October distressed properties accounted for just 25% of all closings.
The chart below shows the relationship between inventory level and average price.
And the chart below shows the relationship between pace of sales and average price.
Families Looking for an apartment to call HOME
Apartment occupancy in the Treasure Valley is now almost 98 percent, up 8 percent from the first quarter of 2011. The demand makes apartments a very good investment; this demand is driven by several factors. Many families that cannot afford to buy homes or have lost their home to foreclosure or short sale are choosing long-term stays in apartments to establish stability. Stringent loan requirements and a lack of cash for down payments have led others to rent instead of purchase.
A large population of young people and new college students adds to the demand for apartments. As they move out of dorms or graduate from college and seek new housing, they are more likely to rent initially, than buy. Recent studies show that people 25 years old or younger account for 75 percent to 80 percent of the nation’s rental market.
Here at First Service Group Property Management we have seen the multi-family unit market rise and fall. In early 2011, occupancy was high – 96 percent. Throughout 2012, we have had occupancy rates teetering between 97-98 percent. This year, our vacant properties have sustained a 5-7% rent increase across the board with 98% of these properties having very minimal if ANY vacancy time.
Unusually low rental rates made by borrowers as they work out foreclosures have allowed many renters to live three to six months or more at a time in foreclosed homes. As the foreclosure market tightens, they are choosing to stay in apartments because there are fewer opportunities to “home hop. Tenants are staying longer and looking at this as a permanent solution.
Contributing to the shortage is a slowdown in construction. Only a hand full of building permits have been filed in Boise this year for multi-family units. Rental rates are a function of demand and home-buying options. Because Boise’s rental rates are still low, it is hard to justify building new units. However, rent increases and the stable 2012 vacancy factor is very enticing to those investors waiting for the right project to jump on. Not many investors can justify selling as multi unit property values have been increasing and the rental market has been so great. In conclusion, new construction of multi family units might seem likely in this current market, yet the economic pressure has become much more pronounced.
If you are interested in obtaining first hand information about income properties contact us today to get added to our Hot Sheet at 208-343-9393.
Boise has some very popular trick or treat hot spots. Number one being the all famous Harrison Boulevard. Known for its awesome decorations, spooky old homes and the best candy, its the place to be on Halloween eve. Every year the residents on Harrison Boulevard deck their homes with Halloween fright and artistry. If you have not had a chance to experience this spooktacular hot spot, this Halloween is your chance to do so.
Halloween is a great time to enjoy your family and have an excuse to have fun and be silly. Help keep everyone safe by reviewing safety tips at http://www.halloween-safety.com/.
Sellers HONEY DO list, Sell it TODAY
When you are ready to place your property on the market, we will go through your house together. In the meantime, here are some “handy hints” for you to consider. If you follow the guidelines below, you will have an advantage over the competition already on the market. It is very important that your home “shows” well for the buyer’s first impression. Here are some suggestions to help make that happen.
1) Clear out all unnecessary objects from the furniture, throughout the house. Keep decorative items located on the furniture, to a minimum.
2) Remove all unnecessary objects from the kitchen countertops. If something hasn’t been used in a few weeks put it away! Clear the refrigerator fronts of messages, pictures, magnets, etc. If the rooms are clear of clutter, then the prospective buyers will mentally begin to move their own things into your home.
3) The bathrooms need to be as uncluttered as possible. Clear countertops, tub & shower areas and commode tops, leaving only necessary items for daily grooming. Coordinating towels are a nice touch.
4) Rearrange or remove some of the furniture if the room seems full. When it comes to selling, we need to make the rooms appear larger by having a balanced amount of furniture.
5) Take down or rearrange certain pictures or objects on the walls. Patch and paint if necessary.
6) Review the house inside, room by room:
a) Paint any room needing attention.
b) Clean carpets and drapes, if necessary.
c) Clean windows and baseboards.
7) Leave lights on during the day. During “showings” turn on all the lights and lamps.
8) Have your FM stereo on during the day, playing soft music, for all showings.
9) Have a lock box installed by your agent. Most agents showing a property will not take the time to show a property that does not have a lock box.
1) Walk around the perimeter of the house and move all garbage cans, discarded wood scraps, extra building materials, etc into a storage area or the garage.
2) Check the roof for the dry rot. Make sure the gutters are free of debris.
3) Walk around the yard, check out the plants, prune the bushes away from windows and make them appear “landscaped”.
4) Weed all planted areas. Keep the lawn freshly cut. Remove any dead plants or shrubs.
5) Clear patios and/or decks of all small items, such as planters, flower pot, charcoal, barbecues, toys, etc. (Store them in a storage area or the garage.)
6) Check the paint condition of the house, especially the front trim. Curb appeal is very important!
Try to look at your home “through the buyer’s eyes”, as though you’ve never seen it or been there before. Any time or money spent on the above items will bring you more money in return and result in a faster sale.
Moving Check List
Give Address Change to:
- Post Office
- Subscriptions (notice usually requires several weeks.)
- Friends and relatives
- Transfer funds, arrange check-cashing innew city
- Arrange credit references.
- Notify company of new location for all your insurance needs.
- Contact Gas, Light, Water, Telephone, Fuel and Cable Companies.
- Request refunds on any deposits made.
Medical, Dental & Prescriptions:
- Ask your Doctor & Dentist for referrals.
- Transfer needed prescriptions, eyeglasses and other pertinent information.
- Obtain birth records, medical records, etc.
Also, Don’t Forget to:
- Defrost and empty freezer. Clean refrigerator. Place deodorizing agent to dispel odors.
- Have appliances serviced for moving.
- Clean throw rugs and clothing and have them wrapped for moving.
- Check with your moving counselor re: Insurance coverage, packing & unpacking labor charges, arrival day, various shipping papers, method and time of expected payment.
- Plan for special travel needs of small children and elderly travelers.
- Leave all old keys, needed by new tenant or owner with Realtor or neighbor.
ON MOVING DAY:
- Carry enough cash or travelers checks to cover cost of moving services and expenses, until you make banking connections innew city.
- Carry precious items such as jewelry and documents yourself, or ship them certified/registered mail.
- Plan for transporting your pets, they are poor travelling companions if unhappy.
AT YOUR NEW ADDRESS:
- Check closets, drawers and shelves to make sure they are empty.
- Have the gas company make sure that all pilot lights are in proper working order, where applicable.
- Advise the local Department of Motor Vehicles of your address change and register all vehicles within five (5) days.
- Contact new Doctor, Dentist and Optometrist and advise them of the referral from your various physicians.
- Register children in school.
Why Use a REALTOR®?
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR “®” logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®.
But if you’re still not convinced of the value of a REALTOR®, here are a dozen more reasons to use one:
1. Your REALTOR® can help you determine your buying power – that is, your financial reserves plus your borrowing capacity. If you give a REALTOR® some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders — banks and mortgage companies — offer limited choices.
2. Your REALTOR® has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your REALTOR® can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning. schools, etc. There are two things you’ll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your REALTOR® can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your REALTOR® provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your REALTOR® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your REALTOR®, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your REALTOR® can help you in understanding different financing options and in identifying qualified lenders.
7. Your REALTOR® can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your REALTOR® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your REALTOR® markets your property to other real estate agents and the public. Often, your REALTOR® can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your REALTOR® markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your REALTOR® acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The REALTOR® Code of Ethics requires REALTORS® to utilize these cooperative relationships when they benefit their clients.
10. Your REALTOR® will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF REALTORS® studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
11. Your REALTOR® can help you objectively evaluate every buyer’s proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing — a lot of possible pitfalls. Your REALTOR® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your REALTOR® can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your REALTOR® is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).
Three Steps to Selling Your Home in a Buyer’s Market
You have probably heard over and over “It’s a buyer’s market out there.” But, in hearing that, many are left wondering what does that really mean, and how will it affect me if I want to sell my home?
WHAT IS A BUYER’S MARKET?
Put simply, the term “a buyer’s market” means that right now, that’s who has the advantage in the real estate market. Because of these three factors: inventory is high, astoundingly low interest rates, and record-high availability of foreclosed homes; buyers are looking for nothing less than (and can certainly find) what they deem “a steal.”
YOU CAN STILL SELL YOUR HOME!
However, this certainly does not mean you will be unable to sell your home! In fact, a buyer’s market is a great time to sell your home – since there are so many buyers out there! But, just putting a sign in your yard and waiting for the buyers to stampede won’t get the job done! Now – more than ever, you have to have a solid strategy to get your home sold.
STEP ONE: PRICING YOUR HOME RIGHT – THE FIRST TIME!
The homes that are selling right now fall into one of two categories: Perfect, move-in condition at a fantastic price; or Needs work, and is priced well below the neighborhood’s “market value.” Therefore, you need to make a decision before ever listing your home for sale: Spend some time and money to fit your home in the “Perfect” category, or show your house as-is, and price it in the “Steal” category (which means taking more money off the price than it would cost a buyer to “fix it up”). No matter which route you choose – use homes comparable to yours, in or near your neighborhood, that have sold in the last three months to help you establish the asking price for your home. These are not the days where a seller can risk pricing high to “see what they can get.” Pricing your home effectively the first time will help you avoid extended periods of time on the market before a sale, and lost money at the closing table.
STEP TWO: YOUR HOME MUST SHOW WELL – EVERY TIME!
It is imperative that the buyers who see your home get a great first impression. This means don’t show your house before it’s ready! Listing your home with a disclaimer that “some work still in progress” is a terrible idea. A buyer cannot envision the work that “will be done”, nor are they likely to come back later to see what you’ve done. There are too many homes on the market right now to risk letting your buyers leave your home with a less-than impression. Among the most important factors to ensure your home sells well are: great smells, no clutter, and clean, clean, clean!
STEP THREE: EXCELLENT MARKETING IS KEY!
No matter where your home fits on the “price scale,” you MUST get the word out! It is imperative to use all available resources in marketing your home – in order to reach the highest possible number of “ready-to-act” buyers. This means that you (or your agent!) must utilize the latest, cutting edge technology to syndicate information about your home via the internet – to reach buyers both in & out of town, within real estate offices throughout the city (as 97% of buyers work with professional Realtors), and to your neighborhood and to your entire circle of friends and family (leaving no stone unturned!).
While it’s true that there is a lot of “competition” out there – if you follow the above three rules – there is no reason your house can’t sell! If you would like more information about buying or selling a home in your area, please don’t hesitate to contact me! We are always available to answer your questions – and ready to serve your real estate needs. Your complete satisfaction is out goal – because we want to be your Realtor for life! Call us today for a free market analysis of your property 208-343-9393.
What are the steps to finance and buy a home?
After deciding to buy a home and hiring your real estate agent (it is best if they are an exclusive buyers agent), you will need to think about financing if you haven’t already.
It is best to do this before you spend time looking at homes so that you are ready to make an offer when you find the perfect one! Don’t worry, you don’t always have to put 20% down to qualify for a loan, there are a lot of programs available that require as little as 3%, sometimes less!
Be sure your credit history is as clean as possible, it is best to get copies of your credit report a few months before you start house hunting. It is free to do so and can be done online. If you’d like advice on how to raise your credit please contact me.
- First, you will need to choose a loan officer or mortgage specialist in the area
- You will fill out a loan application and get pre-approved. (don’t confuse this with pre-qualification - pre-approval from a lender is based on your actual credit, income and debt.)
- After you decide what you would like to pay for a home you can select a loan option. You usually have the option of paying additional points – part of the interest you pay at closing – in exchange for a lower interest rate. A lower interest rate will save you money in the long run if you are planning on staying in the house (Although interest rates right now are very low already!)
- Now when you find a home, you will be ready to submit an offer along with an earnest money deposit (usually 1-2% of purchase price) (Don’t worry your real estate agent will help negotiate the offer!) A copy of the accepted purchase contract goes to the lender.
- Next, your lender requires you to get an appraisal on the property. You will also want to hire your own home inspector during this time. Your final loan will still need to be approved for the property, and your credit will be run again. When you are in escrow you don’t want to put anything on credit!
It usually takes around 30 days to close after getting an accepted offer for a traditional sale. Don’t forget, you still have to pay cash for the down payment and any closing costs before you get the keys!
Need more advice or have a question? Contact us today at 208-343-9393!