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Live at Connect: The right and the left give us a roadmap to civility

Inmannews - Mon, 12/11/2017 - 2:08pm
The economy is booming and the housing market is red hot, but the background noise from Washington, D.C., is so shrill some days that you cannot think straight -- and it can create uncertainty and make your clients crazy. How do we tone down the noise? ...
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Nextdoor expands real estate arm into three new markets

Inmannews - Mon, 12/11/2017 - 2:04pm
Community networking platform Nextdoor announced the expansion of its real estate arm into three new markets: Minneapolis-St. Paul, Minnesota; Washington, D.C.; and Tampa-Saint Petersburg, Florida. The company says it chose these three areas due to long waiting lists and robust market conditions ...
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Live at Connect: Hacker Connect on the future of real estate tech

Inmannews - Mon, 12/11/2017 - 1:43pm
Imagine a room full of creative, smart and clever real estate nerds. That is Hacker Connect, where 500 of the savviest real estate tech professionals will convene all day on Monday, January 22, in New York City at the Marriott Marquis Hotel, Times Square to solve problems, share insights and learn from each other ...
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Nextdoor reportedly closes $75M in funding

Inmannews - Mon, 12/11/2017 - 1:18pm
Nextdoor, a social network specifically designed to connect neighbors and is serving 100,000 U.S. neighborhoods and counting, has reportedly raised $75 million in a recent funding round, according to an article published today by subscription tech news website The Information. That ...
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5 Mistakes Landlords Make When Approving Tenants

American Apartment Owners Association - Mon, 12/11/2017 - 12:52pm

 

  1. Not getting RentGuard

A RentGuard Analyzer is provided in every AAOA tenant screening package. If your tenant qualifies (most do) you can purchase or have your tenant purchase annual coverage for lost rent, damages, or legal fees. This is better than traditional insurance or even a security deposit because it covers you up to $10,000 against common rental losses. Landlords who do not get RentGuard may later find themselves paying out of pocket for lost rent or damages. In many cases a security deposit is not enough and even if you take a tenant to court it is unlikely that you will collect a judgment from the tenant. Visit or call (866) 579-2262 for more information about RentGuard.

  1. Relying solely on a credit score to make a decision

A tenant’s credit score is one piece of their story. What’s more important than the score is why the person’s score is low. Did they have a rough period in their life that they are now recovering from? Is it because they simply have not established much credit history because they are young or new to the country? Or is they have a good score, do you think they can afford to pay your rent while also paying off their debt? If you need help reading a credit report you can always call us at (866) 579-2262 to get live support.

  1. Not running a criminal background check

Many landlords have a “feeling” about an applicant and maybe think it’s not necessary to run a background check on every tenant, but on other tenants they might. THIS IS A DIRECT VIOLATION OF THE FAIR HOUSING ACT so please make sure to treat every tenant equally. The only reason not to run a criminal background check is if your applicant is under the age of 18 or if you plan to never run a criminal background check on ANY applicant – which we advise against. Your due diligence as a landlord is to first ensure that your community is safe. Should anything happen on your property you’ll want proof that you ran a background check and considered the nature of the crime, if any.

  1. Not collecting a social security number

Unfortunately, due to recent identity fraud scandals, landlords and tenants alike are becoming more cautious about sharing their social security number. However, a social security number is still the main piece of data used to identify an individual. Although you could run a background check without one, you can only imagine how many people have the same first and last name and date of birth in the US. Verifying records and getting a credit check becomes much more difficult. Secondly, if your tenant later skips out on rent, having their social security number is a key piece of information you can use to locate them and serve them a court notice or turn them into a collection agency.

  1. Not checking references or source of income

Ask your applicants for multiple references including two or more landlords and a current employer. Although they may not be able to speak to their character, they can legally share important facts like whether they paid rent on time or their employment status. Be sure not to discriminate based on source of income such as disability, self-employment, child support, etc, but verify that they have sufficient income to pay for rent. If you don’t do this, you could be renting to someone who simply can’t afford rent or someone who has a history of making late rental payments. Remember just because someone has a good score and no eviction doesn’t mean they aren’t a problem tenant.

 

The post 5 Mistakes Landlords Make When Approving Tenants appeared first on AAOA.

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How to help homeowners recover from fire damage

Inmannews - Mon, 12/11/2017 - 12:38pm
Just two months after fires devastated sections of Northern California, a cluster of fires have broken out across Southern California, fueled by dry brush and Santa Ana wind events. Southern California has seen an outbreak of at least six major active fires.  ...
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Live at Connect: Indie brokers gather to confront challenges

Inmannews - Mon, 12/11/2017 - 10:20am
While independently owned brokerages are enjoying more opportunity now than ever before, they face new threats from upstarts like Compass and Redfin, and fast-growing Keller Williams. To confront these challenges, indie brokers are rallying at Inman Connect New York. This time in New York City on Monday, January 22, 2018, at the Marriott Marquis Hotel, Time Square for our Indie Broker Summit ...
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Connect/Reflect: Open hearts, open minds

Inmannews - Mon, 12/11/2017 - 9:54am
It’s no understatement that Billy Ekofo, now Inman's Director of Event Content, has had some incredible, life-changing moments on stage at Inman Connect. ...
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The Compass haters are starting to look lost

Inmannews - Mon, 12/11/2017 - 9:46am
The industry has wasted too many cycles on Compass FUD (fear, uncertainty and doubt). It must get busy competing ...
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7 Tips to Invest in Multifamily Property

American Apartment Owners Association - Mon, 12/11/2017 - 8:49am

Buying a multifamily property can be an important next step for a real estate investor who had previously purchased single-family homes to rent to tenants. Doing so can allow you to produce more income and build net worth faster, if you’re up for the challenge.

“You’re ready to buy a multifamily property when you’re excited about the idea,” says Brian Davis, a real estate investor and co-founder at SparkRental.com. “I’ve known people to buy a multifamily property as their first investment property, and I’ve known investors to buy dozens, even hundreds, of single-family properties because that’s what they liked.”

The key to determining whether the increased responsibility, liability and capital reserves required to buy a multifamily property suits you is performing careful due diligence, so heed the following tips from real estate experts:

Consider living in one of the units for favorable terms. If you buy a building with four units or less and live in one, you can qualify for owner-occupied financing with little money down, while investors usually have to put at least 20 percent down, says Mark Ferguson, a real estate agent, investor, author and creator of InvestFourMore.com.

It may also allow investors to purchase another investment sooner because their debt-to-income ratio would be lower to show banks they are better qualified, Ferguson said.

Choose the right professionals to help. Buying a multi-unit building can be overwhelming, so choose an experienced broker who can help you through the entire due diligence process.

“At a minimum, your experienced team should include a broker, attorney, and lender,” said Lee Kiser, managing broker of Kiser Group in Chicago

 

“These professionals can guide you through local practices and customs, and help you determine the most important items to review during due diligence,” Kiser says, which include physical aspects of the building and the financial and cash flow of it. Instead of hiring a general inspector, enlist consultations of local tradespeople to give you opinions for each major system or component of the building.

Ask for detailed paperwork. Request income and expense statements for the current and previous years, current rent rolls, service contracts and all existing reports, Kiser says.

“Make sure the historical information matches your expectation of the current operations – and if it doesn’t, find out why,” he says.

“Get very, very familiar with the vacancy rate in that neighborhood,” Davis adds, and talk to the tenants directly to get honest feedback about the building’s condition and potential problems.

Also, verify proof of rental payments and copies of leases, says Janine Acquafredda, associate broker of House n Key Realty in Brooklyn, New York. Have security deposits transferred to you and meet all of the current occupants.

Value the prospect carefully. A multifamily property is not valued by its price per square foot, but rather its income and return on investment generated. Look at the income and expenses of the building and see how much is left over, which is called net operating income. This number is divided by the typical rate of return for a market area (called a capitalization rate) to determine fair market value, Davis says.

A cash-on-cash return is determined by dividing the income after expenses by the cash you’ve put into the property, Kiser says.

Keep adequate cash reserves. Unexpected events will occur when owning a bigger rental property. For instance, do not assume the property will be fully rented all the time or that tenants will pay consistently, says Corey Vandenberg, a mortgage banker in Lafayette, Indiana.

“Sometimes it’s good to see if 50 percent rented would pay the bills,” he says.

You’ll also want to make sure that you know what it will take in your jurisdiction to evict a tenant, says Ralph DiBugnara, vice president of Residential Home Funding in Parsippany, New Jersey.

A good rule of thumb is to take 10 percent off of the top of expected rents to prepare for unexpected market declines, vacancies and other factors, says Adam Bray-Ali, a Los Angeles real estate agent and investor.

Know what you’re getting into. “Do you want to be a landlord for reasons other than money?” Bray-Ali says. “Your due diligence should include an attitude check to determine if you want to deal with the management.”

“Headaches are largely based on the quality of the neighborhood and the age of the property,” Davis says.

You can determine those factors by seeing how it is classified – either as A, B, C or D class property (A being the best condition) – and buy one according to your wherewithal and budget.

“Having owned many D class properties, I can tell you firsthand this is entirely true,” Davis says. “In my worst properties, it’s a constant struggle to collect rent, to repair damage caused by tenants, to keep the properties rented, and so on. In my best property, I have none of those headaches. All of my renters there have always paid on time like clockwork and treated the property with kid gloves.”

There is often less inventory of multifamily properties than single family homes, so “you may have to sacrifice on location or property condition to find one in your price range,” says Allison Bethel, real estate investor analyst for FitSmallBusiness.com.

Bethel says investors often fail to confirm property is legally zoned for its use and number of units.

It’s also a good idea to have a property lawyer set up your leases and an LLC to own the property, Vanderberg says.

Consider professional management. First-time apartment building buyers should think of paying a property manager to handle day-to-day issues for tenants and repairs, which normally costs a fee of 3 to 10 percent of rents, Kiser says.

“Each market has its own idiosyncrasies for landlord-tenant relations, advertising, leases, disclosures and many more items,” he says. “It is usually a good idea to learn this from a professional third-party manager working for you than to learn by making the mistakes yourself.”

 

Source: money.usnews.com

 

The post 7 Tips to Invest in Multifamily Property appeared first on AAOA.

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New trend: Random spaces in existing buildings becoming rental housing

American Apartment Owners Association - Mon, 12/11/2017 - 8:45am

Regulations allowing San Francisco property owners to convert common spaces into accessory dwelling units have brought forth a flood of applications to carve new apartments out of everything from garages and basements to old boiler rooms.

In the first nine months of the year, property owners applied to create 593 accessory dwelling units, known as ADUs. That is more than double the 242 ADUs that were applied for during the first nine months of 2016. There are now 1,046 ADUs in the pipeline, with building permits approved for 531 of them.

San Francisco’s big jump in ADUs — often known as granny flats or in-law units — started in 2014, when the Board of Supervisors passed an ordinance by former member Scott Wiener allowing ADUs to be added to buildings undergoing mandatory seismic retrofitting. In 2016 legislation by Supervisors Aaron Peskin and Mark Farrell allowed buildings with five units or more to create an unlimited number of ADUs.

And many more are likely to come, said John Pollard of the SF Garage Co., a contractor whose clients are either building or waiting for permits for more than 300 ADUs.

“We are getting a ton in the Sunset, the Richmond, the Castro, Noe Valley, Haight-Ashbury, Russian Hill, Telegraph Hill,” Pollard said. “Pretty much every multiunit building with crappy old storage rooms is taking a look at this. You’ve got all these property owners that realize they are sitting on dead equity.”

So far 317 property owners going through soft-story retrofits, which enhance earthquake safety by strengthening wood-frame buildings that have poor reinforcement at the ground level, have applied to add 660 units, about 63 percent of the total ADUs in the pipeline.

“When we first started the program, there was just a trickle of applications, and some people pounced and said the program wouldn’t work,” said Wiener, now a state senator. “As with anything new, it’s going to be a slow start. People have to evaluate their buildings and finances and talk to an architect. Now we are seeing a great acceleration of applications. I’m very happy to see it.”

At 735 Taylor St., a 62-unit building on lower Nob Hill, Veritas Investments, one of the biggest landlords in San Francisco, is adding seven units in a ground-floor space previously used as a dining hall and common kitchen.

The seven units are small — between 220 and 381 square feet — and will rent for $2,400 to $2,800 per month. Veritas President Yat-Pang Au said the ADUs cost $300,000 to $400,000 a unit to construct — less than the $600,000 it typically costs to develop a unit in San Francisco, but still costly. He said the economics don’t work as well if there’s only enough space for one or two ADUs.

“It’s about making the economics work — one unit can cost $1 million,” he said.

Au said Veritas is looking at adding 200 to 400 ADUs in 100 buildings over the next five years.

While ADUs are commonly added to single-family homes in many cities, in San Francisco most of the action has been in larger apartment buildings. Owners of 39 buildings have added five units or more since the legislation passed.

“We are very happy to see the large apartment buildings are taking advantage of this,” said Kimia Haddadan, policy and legislative planner with the San Francisco Planning Department.

Kristy Wang, policy director at the urban think tank SPUR, said San Francisco is the only California city to create an ADU program for multifamily buildings, rather than just single-family homes.

“Owners of apartment buildings are already landlords and are accustomed to rent control and other rental regulations and have more experience managing construction projects,” she said. “It’s a soft way to increase density in a dispersed fashion without changing the physical landscape very much.”

Pollard said city residents’ changing transportation preferences are allowing landlords to get creative with garage space. A property owner on the 1700 block of Mason Street, for example, is putting three ADUs into a garage and a vacant boiler room.

“They took out the boiler 25 years ago and can take out the parking because the Millennials don’t use it — they all ride bikes and take public transportation,” he said.

 

Source: sfchronicle.com

 

The post New trend: Random spaces in existing buildings becoming rental housing appeared first on AAOA.

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Hardwood Flooring Is Top Preference

American Apartment Owners Association - Mon, 12/11/2017 - 8:36am

Hardwood flooring is dominating the main living areas of new homes, and engineered hardwood has been particularly catching on over the past decades, according to the latest surveys from Home Innovation Research Labs.

Engineered hardwood floors are made up of layers: the top and bottom layers are natural wood, but the middle contains a core of plywood. It’s known to be a more quick, fuss-free installation than solid hardwood.

Hardwood has become the most popular flooring in new-home kitchens, according to Home Innovation Research Labs. Hardwood floors—both solid and engineered—have increased from 11 percent of all flooring in new single-family homes to 31 percent over the past 12 years.

Other flooring types are decreasing in popularity. For example, ceramic tile has posted a slower growth rate from 15 percent to 21 percent over the last 12 years.

Hardwood flooring represents 65 percent of all flooring installed in new-home dining rooms, half of all flooring in living rooms, and about 45 percent of all flooring installed in kitchens, BUILDER reports on the study.

Hardwood of all types has grown in popularity in all areas of the home, except for the bedroom and bathroom. Carpeting remains the champ in bedrooms.

 

Source: realtormag.realtor.org

 

The post Hardwood Flooring Is Top Preference appeared first on AAOA.

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The profits made from flipping homes continues to shrink

American Apartment Owners Association - Mon, 12/11/2017 - 8:34am

Even as more investors are flipping homes, they’re seeing less profits in return.

High home prices, increasing renovation costs and a skimpier supply of distressed properties are making it more expensive to get in the game, even though demand for move-in ready homes is high.

Single-family homes and condos flipped in the third quarter of this year brought an average gross profit of $66,448 per flip, representing a 47.7 percent return on investment for flippers, according to Attom Data Solutions, a real estate data and analytics company. Attom defines a flip as a home bought and sold in a 12-month period.

That return is down from 48.7 percent in the second quarter and from 51.2 percent in the third quarter of last year. It is the lowest average gross flipping return on investment since the middle of 2015.

“Home flipping profits continue to be squeezed by a dwindling inventory of distressed properties available to purchase at a discount and increasing competition from fair-weather home flippers often willing to operate on thinner margins,” said Daren Blomquist, senior vice president at Attom Data Solutions.

Despite lower returns, home flipping is still a popular business. Close to 49,000 homes were flipped nationwide in the third quarter, unchanged from a year ago. One big shift, however, is that there are more investors flipping, and they’re each flipping fewer homes. The ratio of flips per investor, just 1.25, is the lowest since 2008.

“A more than nine-year low in the ratio of flips per investor is evidence of this increased competition, which is pushing many investors to new metro areas that often have weaker market fundamentals but also come with a bigger supply of discounted distressed properties to flip,” Blomquist said.

That may be, but Washington, D.C., which is not exactly a weak market, came in with the highest flipping rate in the nation. It was followed by Nevada, Tennessee, Louisiana, Alabama and Arizona.

Metropolitan areas that saw the highest flipping returns were Pittsburgh, Baton Rouge, Louisiana, Philadelphia, Baltimore and Cleveland.

High-end real estate agent Tony Giordano, of the Opulent Agency, said he has multiple flipper clients right now, but the ones who get the highest returns are the builders. They tear down homes and start from scratch.

“The key I see with your most common type flipper is that the carrying costs can be much lower today than in previous hot markets. Cost of construction is higher, but time to flip lower,” Giordano said.

That may be why the number of flippers continues to grow. Technology is also making it easier for flippers to find the services they need and at the same time keep costs low.

“Even Amazon plays a part in how much faster and cheaper you can find, purchase, deliver and flip!” said Giordano.

 

Source: cnbc.com

 

The post The profits made from flipping homes continues to shrink appeared first on AAOA.

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Emergency lighting during power interruptions guides occupants to safety

American Apartment Owners Association - Mon, 12/11/2017 - 8:31am

What would you do if all the lights in your building went out during an emergency? Would your occupants know with 100% accuracy how to navigate the nearest exit?

A poll commissioned by Cintas Corporation shows that more than a third of all U.S. adults would not feel very confident getting around a building safely following a power loss. This poses a substantial problem, the largest concern being that the U.S. as a whole is highly susceptible to power failures.

“The U.S. experiences more power outages than any other developed country in the world, so it’s important for businesses to be prepared,” says Taylor Brummel, Marketing Manager of Cintas Fire Protection. “Whether it’s severe weather, faulty power grid equipment, a fire or any other issue, emergency lighting can assist in guiding occupants to safety when power fails.”

The poll also found that if the lights went out at their place of work, 50% of U.S. adults would not feel very confident in their ability to walk up and down stairways safely. More than two in five employed Americans would not feel very confident in their ability to execute their workplace’s emergency plan – if they have a plan at all.

The presence of emergency and exit lighting is often omitted or glossed over in life and fire safety programs, which is problematic as power outages continue to rise. Power outages are almost four times more likely to occur than they did just 15 years ago.

Source: buildings.com

 

The post Emergency lighting during power interruptions guides occupants to safety appeared first on AAOA.

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Re/Max now offering social media automation tool for agents

Inmannews - Mon, 12/11/2017 - 8:26am
Re/Max has launched Social Prompt for Re/Max, a new social media tool created by BombBomb that provides Re/Max affiliates with pre-written "timely, consistent and brand-aligned posts" to be shared on Facebook and other social media platforms ...
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Connect/Reflect: Never eat alone!

Inmannews - Mon, 12/11/2017 - 8:23am
Karen Bigos, a broker-owner at Towne Realty Group in northern New Jersey, knows a thing or two about learning and growing your business at Inman Connect. We recently had the opportunity to sit down with her, and here she shares some of her best advice for navigating the conference, picking the right sessions and making sure you have the means to capture all the insights you’ll hear ...
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Connect the Speakers: Rivers Pearce on making sense of the data

Inmannews - Mon, 12/11/2017 - 7:26am
Rivers Pearce appears at Inman Connect New York (Jan. 22-26, 2018, Marriott Marquis Hotel, Times Square) presenting his marketing track talk "Five Best Tools for Measuring Marketing Results." ...
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Real estate daily market update: December 11, 2017

Inmannews - Mon, 12/11/2017 - 6:45am
All the latest real estate market news ...
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Structurely’s personable chatbot will cultivate leads for you

Inmannews - Mon, 12/11/2017 - 3:00am
Structurely is a lead cultivation chatbot for real estate agents that doesn't generate leads, but helps qualify those that come in from online channels ...
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How to create a website as a brand new real estate agent

Inmannews - Mon, 12/11/2017 - 2:45am
As a new real estate agent, you’re ready to set the world on fire with all your new knowledge. But before you can strike the match, you have to get your marketing plan in order. An essential part of that marketing plan is your website ...
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