Josh Schlesselman
"Quality Service with a Name you can't Forget"
757-748-1845
Jschless81@aol.com
www.JoshSellsVirginia.com

 
 
 
 
 
 
 
 
 
 

Have you ever wanted to get started in Real Estate Investing?

 

 

     There are so many ways an aspiring investor can get started in Real Estate. Hampton Roads is an excellent location to invest in. As the country's largest military area, our local market here in Hampton Roads/Tidewater is very stable and economically profitable. Hampton Roads is comprised of seven cities: Virginia Beach Real Estate, Chesapeake Real Estate, Norfolk Real Estate, Portsmouth Real Estate, Hampton Real Estate, Newport News Real Estate and Suffolk Real Estate. Each city has it's own individual pros and cons for investment purposes.

 

 

 

     How much do you know about investing in Real Estate locally in Hampton Roads? Do you currently own rental property? Are you looking for a short term investment or a long term investment?

Do you know any active investors or any real estate professional to help you get started? Do you currently own a home that you are living in that has available equity? Do you have good or bad credit? These are basic questions that you should be asking yourself when you think of Real Estate as an investment.

 

There are four most common ways to invest in Real Estate. There are many variances and differences in each of these ways, but for the most part each is done the same.

 

 

Rental Property:

 

     Rental property is the foundation to every serious long term investor. Aquiring and building a diverse portfolio of rental property is paramount in order to achieve financial wealth and investment leverage. The key thing you must look for when purchasing a rental property is how much cash flow will it yield? What is the standard appreciation in that given area? What are rental rates verse what my mortgage is? Are there any owner paid utilities?

     Once you begin to purchase cash flow properties, you begin to build monthly cash flow. The more properties you own, the more monthly cash you will have, therefore, the more investing leverage you have to buy more properties and to use to invest in other areas such as Rehabs. In essence, this cash flow is Residual Income, money that will come to you each month for the rest of your life as long as you own the property. For Example: You own 5 properties each bringing $300.00/mo after all fees and mortgage. That's $1500.00 a month that you can use to reinvest back into your properties or to use to buy more cash flow properties. Just think, that's $6000.00 every four months you own the houses.

     On top of the monthly cash flow you will receive, your properties will continue to appreciate or go up in value constantly, depending on the current real estate market. Which the difference between market value and loan amount is equity, money that you have sitting in your house that you can leverage to purchase more cash flow properties.

     Thirdly, each year that you rent these properties, the tenants will be paying down the amount owed, increasing equity build-up as well. On top of that, each year rental rates will almost always raise, so each year you own the rental property, the investment will just get better and better.

 As you can see, rental property will be the backbone for your investment endeavors and will create long term wealth as well as residual income. The more rental property you own, the more cash flow you will have to purchase rentals on a consistent basis.

 

 

Rehab Projects:

 

     Rehabs are a lot more complex than rentals. You must be very good with number crunching and have some great contractors, or you'll have problems. Rehab investing can be very risky, and timing is everything. Rehabs are short term investments. The faster the better, the longer you hold on to these properties, the less profit you will make.

     You must have substantial capital in order to rehab properties efficiently. The first thing you must do when you find a fixer upper is know what the property is selling for verses what you can get for it completely renovated. This is your gross profit margin. For Example: A house is selling for $50,000 and has a market resale value rehabbed at $150,000. You have a $100K margin to figure in all the expenses involved.

     What kind of expenses are involved with Rehabs? To begin with, you must have a down payment and closing costs to purchase the property. In most cases, 10% down and 5% closing costs determined upon contract price. On a $50k house, that's $7500. Next you must figure in rehab expenses after taking bids from multiple contractors and negotiating the price as low as possible. Let's say rehab expenses for this property is $40K, to completely renovate and sell this property in a timely fashion. Now you have $47,500 invested. Next you must figure in your selling expenses. which include commission fees and closing costs. Commission fees are 6% of resale value, and closing costs are normally very inexpensive depending on sales price, day in month you close, etc....in most cases no more than 1% of sales price. In our case, that would be $10,500 for commission and closing costs  based upon a sales price of $150k. Total capital invested into the project is $58k. Amount owed on property is $45k, after putting the initial down payment of 10%. Add capital invested to loan balance to figure total investment. Subtract sales price of  $150k from total investment of $103 which is the net profit earned of $47K. Which should take no longer than 60 days to renovate and resale once owned, determined upon project size. Any longer than 60 days, you must start deducting net profit for holding costs.

     Always remember that you must figure into your budget, Capital Gains tax will apply on profit made of 15%. Always consult your tax advisor for a more in depth overview. This will apply to all investment properties aquired and sold if you have not physically lived in the property two out of the last five years. In that case however, no capital gains tax would apply.

 

 

Flipping Property:

 

    The meaning of flipping property is to aquire a property and flip it to someone else, sometimes without ever owning it. You normally don't make large amounts of money on a standard flip. You must be very networked, especially with investors. Your job is to find under valued property and essentially flip it to a buyer or an investor. You must always have a buyer on the sideline to buy this property or you can get stuck with it. Which will usually mean to a loss, since there isn't really much of a profit margin to begin with. The best and most efficient way to invest in this nature is to work with several full time investors such as rehabbers or landlords that are consistently purchasing investment property and scout out great deals to sell to them at a slightly higher price to make a profit. Normally you will only make a couple of thousand dollars, but the more under value the property is, the better your profit. You must keep in mind that most investors that work full time are very market savvy and won't pay a dime more than what market value is, and even that is a challenge in itself. The best thing to do, is sell it slightly below market value if there is room, that way it's a win-win and you will more likely strike a deal. Most of the time flipping is done by being able to assign the contract to someone else. However, you must get the seller's consent in order to do this, which isn't always easy. There are many variations to flipping property, but for the most part, this is how it's done.

 

 

Foreclosures:

 

     Foreclosures are the most risky investment. They can also yield the highest return. Foreclosures can be aquired in three different ways. The first way is when the notice of auction is put into the newspaper in the legal section or when an investor receives a lead from a generated list of upcoming forclosures. The investor will attempt to make contact with the owners to ask if they would be interested in selling their property at a below market value in order to help them avoid foreclosure and bad credit. The more equity the owner has in the house the better, but the best way to approach these disgruntled owners is with a win-win situation.

     The second way to approach foreclosures is at the courthouse steps on auction day. You must make sure that you have done due diligence with this property and possibly have viewed the interior in order to know what your buying. Many times you will buy a foreclosure and it is infested with termites or has any number of unknowns wrong that may take away from your profit margin. Always know what market values in the area are going for and what you can flip or rehab it for when completed.

     Lastly, if the property is not purchased at the auction, it becomes Real Estate Owned, Or REO. An REO is a bank owned property. Normally they are fixer uppers and great for rehabbers. Hud and VA also have REO property that is listed. Normally these properties are sold below market due to condition and can be great investments, however, there is a lot of red tape in order to purchase these properties. With the Hud properties, you must bid for them, and the first two weeks of being listed is generally a owner occupant bid only time. Meaning, investors get second dibs of the properties after the owner occupants.

     Foreclosure investing is very complex and can be handled many different ways. It can almost become a full time job if done thoroughly and efficient. You must have substantial capital with foreclosures, because many times you must purchase these properties in cash due to the amount of time it will take to qualify and close a loan to purchase.

 

 

     These are the four most common ways to invest. If done correctly, you will build wealth and financial independence with no limits. It's a fact that 96% of all millionaires in this country credit real estate for creating some amount of their net wealth. That's an amazing percentage! All these methods point back at the foundation of your portfolio. You must own rental property in order to leverage the money you will need in order to Rehab or purchase forclosures. The equity you will build in your rentals along with your monthly cash flow will help you continue investing.

 

 

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Investment Property

Investment Properties, Real Estate Market, Rehab House, Foreclosure
Types of investment property

What Is Flippng, Real Estate Investment Market, Real Estate Investing, Investing In Property
Let

Foreclosed Properties, Invest In Real Estate, Real Estate Brokers
Purchasing foreclosed properties can be an excellent way to invest in real estate.

Rental Properties, Investment Property, Apartment Buildings, Condominiums
Rental properties are an excellent source of investment property.

Real Estate Investing In Florida, Real Estate Market In Florida, Purchase Rental Units
Real estate investing in Florida is still a lucrative way to make money.

Real Estate Investing In The Midwest, Real Estate Market, Real Estate Investing
Real estate investing in the Midwest

Purchasing A Rehab Property For Investment, Fixing Up A Rehab Property, Today
Purchasing a rehab property for investment can be fun and profitable, or a disaster. Much depends on the investor and their ability to choose a good property.

Handyman
A handyman

Building And Selling, General Contractor, Invest In Property, Real Estate Market
Building and selling is one way to invest in property.

Inspections For Fixer-upper Properties, Invest In Real Estate, Property For Investment
Inspections for fixer-upper properties



Landlording

landlord advice needed
I have 2 tenants in a duplex. One wants a pool - the other doesn't.
Originally when they moved in 5 years ago I told the one who wants a pool that they can have one as long as they are full responsible and it is attheir ow expense.

The other tenant is onlythere a year and he ha kind of take over the yard and does a lot of bbqing and entertaining. He does not want a pool and is threatening to break the lease if a pool is in the yard.

What would you do?

Health & Code Violations
My first post did not hyperlink, I must have done something wrong. How do you deal with a tenant who calls the health department and the building code inspectors on you but then is unavailable for the requested repairs (most of which are damages done by the tenant and her family)? She is refusing to pay rent until repairs are done but then sent an e-mail saying no one is allowed to enter the home without her permission and yet we only have 21 days to do the reapirs that are emergent enough they require a call to code and health enforcers.

Cut locks off vacated tenants bike. Am I liable
I have/had a tenant who was supposed to be moved out on the 30th. I made it very clear to him that his furniture and possessions needed to be out on that day. He asked if someone could come over on the first to move the furniture out and I said OK. On the third all the furniture was still in the apartment an the couch was wedged in between a couple of walls preventing access to said apartment. I had not heard from the tenant at any time during this period. I needed to start moving another person in the next day so I proceeded to move the couch out myself. In the process I found that I was unable to get the couch past the tenants bicycle which was locked to my front porch. I could not just leave the couch on the porch so I cut the locks and moved the bike. He arrived that night and was upset and said I owed him $40 for the locks. I said I would give him twenty, but he was supposed to have been completely out on the thirtieth and he still had a lot of furniture upstairs. I explained that his bike was on my property and I had to move it. He actually got the police involved who of course said that it was a civil matter and they were not going to do anything about it. Is this something I should be worried about? I planned to keep part of the security deposit because he flooded his tub which ran into our apartment downstairs. Unfortunately the pictures and receipts fro repair went missing. Any advice?

Tenant moving out
tenant is moving out. Which forms do I use to address the following:

* Tenant painted unit deep dark colors.
* Tenant painted kitchen cabinets.
Tenant claims unit was as is and could make alterations.
Tenant has 2 cats.


* LL is missing some pages from lease.

(I'm the LL btw.)


I have a "Tenant's Right To Request Initial Inspection" form; but I am looking for something that informs the tenant of their obligation to return unit to the original off-white colors.

Insurance Co. for multi-unit (17 apts) building?
I posted a similar query last week, but didn't pose the question right...
Is there anyone out there who has a medium-size building (10-30 units) who can help me find an insurance company that is willing to quote a policy.
I have a 17-unit building, an old school from the late 1800's. Built like a 'brick sh**house' if you know what I mean - 16" thick brick walls outside and inside the building, and re-done nicely into mostly 1BR apts. Fire alarms but no sprinklers, multiple exits but no fire escape, no elevator (3 floors), hard wired smoke alarms, lots of fire extinguishers, fire doors, self-closing security doors inside and out, no flooding issues and NO CLAIMS in the last 5 years.
Anyone know a company that would be interested? I have Travelers now, and they're pushing the premium up every year. State Farm and Nationwide are HIGHer yet.
Advice appreciated...

Deployment/Miltary Clause
I include a military clause in my rental agreement that states that the tenant needs to provide a copy of their orders along with a written letter of their intent to terminate, 28 days prior to deployment. Under SCRA, notice would be effective at the end of the following month (nearly 2 months, in this case)

Does this mean that if the tenant is being deployed in three months they can terminate their lease 28 days from when they give me their written orders (2 months prior to their deployment) or is their actual deployment date the date of termination as long as notice was provided 28-days prior? It seems unfair to the landlord that they would be able to break the lease far in advance of their actual deployment date.

I have explained to my tenant that I am willing to break the lease earlier if a replacement tenant is found but they want to move in 28 days regardless and live rent free with a friend prior to deployement and pocket their housing allowance.


We have a tenant who reported some issues to our property manager. Two sounded emergent so we sent someone immediately. #1 leak in kitchen ceiling. Turns out this was caused by the tenant unplugging the deicer on no less than three occasions despite having it demonstrated to her that this had to stay plugged in during winter to prevent just such an occurence.

#2. She stated a health and safety concern due to a mouse "infestation" (had not reported any evidence of mice previously).

Each time we have sent someone to do repairs no one will come to the door. People leave and tell us they will not go back because they are wasting time, unsupervised children, disgusting living conditions that they are uncomfortable being exposed to. She is given advance notice and is clearly at home but will only answer the door when she feels like it.

Because of this we had a maintenance person meet the pest control company at the house. Cars were visible but no one would come to the door. We aren't sure that an infestation constitutes an emergency but decided it did so the maintenance worker let the pest control company in. Someone was lying on a couch just a few feet away from the door but did not acknowledge the people entering the house. They finally saw a child (changin his own diaper they said) and asked him to get an adult. The tenant was home all along but just didn't come to the door.

The pest control company took pictures of the living conditions and all I can say is OMG! Dirty diapers and garbage all over, broken toilet seats on the floor. Piles of trash bags all over the basement and garage dispite curbside trash pickup provided by us. Worst of all was a huge oil spill all over our garage floor and down the drive.

The pest control company provided us with the pictures and a written statement of the homes condition and stated that the open food sources contributed and caused this infestation.

We had our property manager contact the tenant about the condition and the serious nature of an oil spill as we have a well. We asked for her to consider taking this offer, two months free rent in exchange for the damage deposit (which we will use for all the now neccessary repairs and water tests) and we would let her out of the lease which ends in October. We think that as the tenant has children she might want to leave during the summer and have them situated before a new school year begins so the children would not be disrupted (not that we think she cares based on the living conditions in the photos but we personally have a concern for children in that situation).

Her response was to withold half a months rent because a tree had fallen on the property line (our home is in a forested area) and this deprived her children the right to play in this small area (we have an acre of cleared yard space available to play in but whatever). She also called in a health authority and cited issues (broken basement window, peeling wall paper, water stain on kitchen ceiling) all damages caused by the tenant and her children and not previously reported to management.

Naturally we had our property manager respond to fix all of these "issues". The tenant (as has been her ongoing tendency) did not return phone calls or answer the door for the repairs once again dispie notification via e-mails and phone calls.

The health authority contacted the tenant and explained she will be court ordered to comply with the repairs that were so emergent they warranted a health official to visit the property.

The tenant's response, told the property manager that she has "rights" and will not be paying any rent AT ALL! and fully expects a judge to side with her.

Additionally, she called a housing code office and they visited the house. This official doesn't even cover our area so he is unaware of permits we had for projects undertaken prior to this tenant moving in. He cited boiler installation and a fire covering for a door between the garage and basement (though no inspector seemed to find this a problem when we purchased the place). Naturally we will show the permits to the correct agency and if need be we will cement cinder blocks in the opening.

In the meantime we have given the tenant notice to quit since she is behind half a months rent. I really have no questions, just wanted to vent. This is not a property for investment purchases, it is our home we rented out while we are serving our country overseas. I am heartsick.

Just venting. Thank you!

Help with Forclosed Client
We own a small Property Management company in South Carolina and am currently dealing with a homeowner who is being foreclosed on. We manage 3 properties for this particular Homeowner and Tenants were in place for all three (all paid on time and were a joy to rent to).
Unfortunately, the Owner was falling behind on her payments and neglected to tell us. After we found out about the foreclosures; we moved one Tenant to another property, one decided to move and the other is still in place. The Tenant still in place is the issue.
The Owner wants the Tenant to move in hopes that she can sell the home before foreclosure but it is very overpriced.
She wants the income from the Tenant however wants him to be willing to move at very short notice.
Has anyone dealt with a situation like this and how did you handle it?

Plumbing Repairs due to Clogged Hair
Can a California landlord charge the tenant for regular maintence and plumbing repair due to hair build-up in the shower? The drain was cleared as recently as October 2008 and at move-out it is starting to back-up again. Can a landlord deduct the plumbing repair from the security deposit?

Who's responsible for damages?
I am asking this because we live in a different state from where our property is {SC}, and we do not have a Maintenance company so far; this is such a gray area everywhere I look, I'd like to know who is responsible when something in the rented house breaks?

Who or how do you determine is the item in question was "deliberately damaged"? The tenant is obviously not going to admit their wrong doing. {For example, the 2yr old dish washing machine breaks, you're not there, you call a plumber for the tenant, they say it needs to be replaced but cannot say why}

OR, who is responsible if a lock breaks in the home during the tenant's lease? Who and how is it determined who's responsibility it is to fix?? I would assume on one hand, that this is the Landlord's property, and he should repair it, on the other hand, if the tenant broke it, why would the tenant not be liable for fixing it? Even if it was an accident?

Lastly, is it "normal", "fair" or legal, for a tenant to damage something, not report it, and wait until the month of the one year lease to report it to the landlord and expect the landlord to pay for having it repaired?

Any info, would be great! thanks. I would like to have a very specific and fair lease for my next tenants, and these questions do not seem to be answered anywhere I turn.


 

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