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Forget a Garage—Buyers Won’t Budge on High-Rated Schools

American Apartment Owners Association - Mon, 07/30/2018 - 10:25am

Buyers have their eyes on schools, and with the irrefutable link between the quality of schools and values, a district with high ratings trumps all—even coveted features of a home, according to a new realtor.com®survey.

To get into their desired district, 78 percent of the homebuyers surveyed had to let go of something on their wish list. When asked what they would compromise on, approximately one-fifth (19 percent) of respondents would forgo a garage, while 17 percent would go without a kitchen that has been remodeled. Another 17 percent would settle for less bedrooms.

Being within an in-demand district is “important” to 73 percent of respondents to the survey, and even more so to those with children, and those who are younger. What are the characteristics of a “good” school? Accelerated programs, arts and music and diversity are all factors, but the most important is test scores, according to the survey.

“Most buyers understand that they may not be able to find a home that covers every single item on their wish list, but our survey shows that school districts are an area where many buyers aren’t willing to compromise,” says Danielle Hale, chief economist at realtor.com. “For many buyers, ‘location, location, location,’ means ‘schools, schools, schools.’”

Generally, homes in proximity to sought-after schools move quicker than others, and are pricier.

 

Source: rismedia.com

The post Forget a Garage—Buyers Won’t Budge on High-Rated Schools appeared first on AAOA.

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Behind the scenes of Netflix’s new real estate reality show ‘Stay Here’

Inmannews - Mon, 07/30/2018 - 10:03am
Popular video-blogging agent Peter Lorimer will help struggling Airbnb hosts alongside ‘Trading Spaces’ designer Genevieve Gorder
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BoxBrownie rebrands, rolls out features that give listing photos and headshots a new look

Inmannews - Mon, 07/30/2018 - 9:21am
Australian real estate image editing and enhancement company BoxBrownie announced at Inman Connect San Francisco a major branding overhaul in conjunction with new features for real estate agents.
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When the Wall Street steamrollers come for real estate

Inmannews - Mon, 07/30/2018 - 9:21am
The writing is on the wall for real estate companies today: you need to be ready to pivot hard and keep up with a constantly shifting landscape of well-moneyed players, or get into another business entirely.
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40 percent of Seattle landlords are selling due to new rental rules

American Apartment Owners Association - Mon, 07/30/2018 - 9:20am

Landlords are a bit displeased with the Seattle City Council at the moment, and they are taking their investments and going home. A recent University of Washington study on Seattle rental housing found that 40 percent of landlords have sold or are planning to sell their properties as a result of the new rental rules.

“Don’t think of an apartment or house or dwelling as anything other than a place where one can put your money, like a stock,” said KIRO Radio’s John Curley. “A building is an investment, and one wants to have a return on their investment.”

But Seattle landlords don’t find the new rental rules to be worth it. Those rules include expanded source-of-income protections, a ban on using criminal records as a determining factor, restricting the size of security deposits, and the First-in-Time law, which forces landlords to take the first renter that applies and meets the criteria. It was recently struck down by a Superior Court judge, but the City of Seattle has filed an appeal.

“All the noise we had heard from the wonderful, illustrious city council was about tenants’ rights, and about how horrible landlords are,” Curley said. “And we’re going to come down with one after another regulation on you because you have a bias, and don’t rent to this person, or you charge them too much money.”

Not only are landlords finding it difficult to maintain their properties under all the new ordinances, they don’t believe any of them are actually making Seattle more affordable. According to the report, one in five increased their rent in the past year in response to new city ordinances. And 40 percent reported that they have already adopted stricter rental requirements as well.

Seattle landlords and social expectations

For Curley, government interference and the demonetization of landlords is suffocating the rental market.

“The market will dictate the price of the apartment,” Curley said. “But once the government gets in and says, ‘Oh, that’s too much money to charge, or that’s unfair to somebody who has a right to live in this apartment.’ At that point everybody says, ‘You know what? I’m not going into Seattle. I will not build apartments in Seattle because they’re going to restrict how much money I can make, and therefore I’ll go build somewhere else.’”

KIRO Radio’s Tom Tangney doesn’t believe the ordinances are driving all landlords away.

“There are plenty of people who are willing to rent in Seattle, and those 40 percent may sell to people who are willing to rent them,” Tom said.

“The reality is that we have certain social expectations of landlords, and yes, I’m sure it bites some landlords. But the idea that you can’t have rent increases on substandard housing units seems like a fair deal.”

From the renters’ perspective, the city-funded report indicated that the biggest issues with housing are affordability, discrimination, a lack of adherence to and awareness of rental laws, and limited transparency in the application process. Rental prices remain high, but have been gradually flattening out, according to Zillow.

Perhaps most striking of the statistics gathered is that 89 percent of landlords believe their perspectives are not even being considered by local government.

“Part of their problem is who you have to rent to, first person in, and when you can take the security deposit. The majority of landlords said that the city council is against them,” Curely noted.

“So congratulations city council, you’re getting what you want, which is driving landlords out. But what you didn’t intend for was to have the rents go up, which is what’s going to happen.”

 Source: mynorthwest.com

The post 40 percent of Seattle landlords are selling due to new rental rules appeared first on AAOA.

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Five Steps To Avoid Illegally Evicting Your Tenants

American Apartment Owners Association - Mon, 07/30/2018 - 9:16am
One of the biggest risks related to owning investment properties is dealing with an eviction. If a tenant doesn’t pay rent, the simple answer is to evict him.

To a seasoned investor, however, it’s never that simple. Actually evicting a tenant is an extremely complicated and expensive process, and one that should always be avoided.

An eviction is an official legal proceeding, complete with a formal process that needs to be followed exactly in order to have your tenant move out and relinquish the property back to you. Failure to follow your state’s laws on a legal eviction can result in delaying the eviction date, losing a court hearing or owing the tenant money.

Rental property owners will benefit from understanding the legal eviction process in order to protect themselves from breaking the law should they ever go through the process. I also hope to instill the idea that addressing an issue with a bad tenant takes a lot more energy than simply evicting him. I want all investors to understand  and sticking to the lease terms, so you can minimize the risk of dealing with an eviction.

Let’s first take a look at the difference between an illegal and a legal eviction.

An illegal eviction involves:

• Changing the locks.

• Putting your renter’s belongings on the curb or in the garbage.

• Threatening the tenant with an eviction or increased fines.

• Turning off utilities or other services.

A legal eviction includes:

• A court order.

• Official notices.

• Appropriate communication.

• Adherence to state laws.

• Patience.

What Is An Eviction?

An eviction is a lawsuit, sometimes known as an unlawful detainer lawsuit, that a property owner files against a tenant in order to regain possession of a property. Once an eviction lawsuit is filed with the court and a judge rules in favor of the eviction, the property owner can work with law enforcement to remove the tenant by an agreed-upon date per the eviction ruling.

In order for a property owner to win an eviction ruling, the property owner must prove that the tenant violated a lease term, that he gave proper notices to the tenant to fix the violation and that the proper eviction process was followed.

Reasons To Evict A Tenant

A tenant can lawfully be evicted for:

• Failure to pay rent.

• A lease violation (like illegal use, subleasing, unauthorized pet, etc.).

• Damaging the property.

• Threatening the safety of other tenants, neighbors, the property or community.

• Breaking other local housing laws, as outlined in the lease agreement.

A property owner cannot evict a tenant because of personality clashes, minor disagreements or annoying behaviors. If you establish a reasonable need to evict a tenant, you should act immediately and follow your state’s guidelines for a legal eviction.

The Eviction Process

Here is a general overview of the standard eviction process:

1. Establish a legal need to evict a tenant:

Tenant violates a lease term, like failing to pay rent.

2. Notify the tenant:

Landlord provides an official notice to Cure or Quit to the tenant. A Cure Or Quit Notice notifies the tenant of the violation and tells the tenant to either fix the violation within a certain amount of time (cure) or move (quit). This notice should be taped to the door and mailed via certified, first-class mail. You will need to prove in court that you did your best to notify the tenant of the potential eviction proceedings.

In some cases, a property owner or manager can file an eviction with the courts without giving the tenant time to remedy the problem. Such is the case if the property or other people are in immediate danger.

3. File with the court:

If the tenant does not fix the violation outlined in the notice and does not voluntarily move out, the landlord can proceed with filing an eviction lawsuit.

After filing an unlawful detainer lawsuit with the local courthouse, you will receive a date for your eviction hearing and the court will notify the tenant of the summons. Depending on which state you live in and how busy your local courthouse is, this hearing can be anywhere from one week to a few months from your filing date. If it takes a few months for your eviction date, you have to let your tenant continue to live at the property until a judge rules otherwise. Often, a tenant will not pay rent during this time. If this is the case, let’s hope you have a good lost rent policy with your .

4. Court hearing:

At the court hearing, you will need to provide proof of the reason for eviction, and that you gave the tenant an official notice to cure or quit. It is also a good idea to bring copies of the lease, rent payment records and records of all communication you have had with the tenant.

If the judge rules in your favor, you will be able to move forward with an eviction by contacting your local law enforcement to escort the tenant out on an agreed-upon date, if needed.

5. Regaining possession of the property:

On the date determined by your eviction hearing, you will officially regain possession of the property. You are allowed to change the locks and proceed with managing any abandoned tenant property per your state’s laws at this time.

As you can see, moving forward with a legal eviction involves a lot of time spent dealing with your local courts. You have to be patient with the court’s timelines and rulings. You also must keep all your communication with your tenant professional during this time, which can be challenging if you are frustrated with your tenant’s behavior.

Evictions are risky because of the unknown timeline from the filing date to the date a tenant will actually be required to leave the property per the court order. The time and money associated with moving forward with an eviction demonstrate the need for approving only the most qualified tenants for your property, minimizing the risk of eviction.

Source: forbes.com 

The post Five Steps To Avoid Illegally Evicting Your Tenants appeared first on AAOA.

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The Pros & Cons of Owning a Rental Property

American Apartment Owners Association - Mon, 07/30/2018 - 9:09am

Being a land baron — it’s an appealing idea, isn’t it? Real estate is a notoriously stable long-term investment, but it’s not for everyone. There are both advantages and disadvantages to owning a rental property – here are a few to consider when considering owning a rental property.

Pro: You Get Multiple Sources of Revenue

Even a single rental property will increase your net worth in several different ways. You’ll get income from your tenants and your property will appreciate in value over time. Any improvements you make to the property yourself will further increase the value of the asset.

When you have multiple properties, the income potential is even more considerable. You will be able to diversify your assets in terms of properties and tenants. The more properties you’re able to purchase, the more consistent your revenue will be.

Con: You Also Have Multiple Sources of Expenses

If your rental property needs a new HVAC system, you’ll need to find a way to pay for it. Rental properties require a lot in upkeep and maintenance. You need to keep them clean and habitable and may need to renovate them occasionally to ensure that they are still marketable.

Other expenses can include legal expenses, as it’s possible that tenants may need to be evicted. Tenants can also cause expensive damages.

Pro: You Can Sell Your Property for Profit

If you want to sell your property later, you can. In nearly any market, property values are going to rise steadily. Once you no longer want steady revenue from your rental property, you can choose to cash out. This could be used to invest in a business or retire. You can also leverage your properties to buy additional properties.

Real estate does give you some flexibility, as you can borrow against the equity that you have at any time.

Con: Your Money is Tied Up in an Asset

Becoming a landlord does mean that your money will be tied up in real estate, which could ultimately lead to a lack of diversification if you don’t have enough invested in other areas. If you want to start a business or are interested in other aspects of investing, you might be looking for a less expensive investment. It is possible to invest in real estate through other means, such as REITs or investing in stocks for real estate focused companies.

Get Started Today

Whether a rental property is right for you depends on your own financial goals. Rental properties make you money, but they also take some work — unless you engage with a property management company. You can get started by investigating the real estate available in your area.

 

Source: egundo.com

 

The post The Pros & Cons of Owning a Rental Property appeared first on AAOA.

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Future Renters and Apartment Demand Factors

American Apartment Owners Association - Mon, 07/30/2018 - 9:02am

As the apartment industry runs through its cycles, changes in apartment demand and demographics are fostered by economic fluctuation. And with the expectation that the economy is on the cusp of a new direction, multifamily strategies are likely to shift.

Various factors dictate apartment demand and how future renters look. In the current cycle, the industry adjusted to historic household changes and embraced young, single renters and empty nesters looking to downsize. But as younger renters finally start to marry, settle down and have kids and the working-age population growth slows, the nation’s apartment makeup is bound to look different over the next few years.

The strength of the economy is sure to be a factor on just how multifamily is reshaped. It’s likely going to be sooner than later that the already softening industry shifts focus with maturation of some demographics and depletion of others.

Economists predict the economy will recede by 2020

Economists say conditions for a recession are edging closer and that markets will start feeling the squeeze in earnest by 2020.

A signal, notes RealPage Chief Economist Greg Willett, is that the gap between interest for long-term and short-term treasury notes is tightening. Typically, long-term rates are higher than short-term but when the two intersect conditions have historically been ripe for a recession.

The gap has steadily closed since the fall of 2013, according to the Federal Reserve Bank of St. Louis, and dipped to its tightest in July. This fall, when the Federal Reserve is expected to boost interest rates by 25 basis points, it could get even tighter.

“In the best case, that’s going to put us at even at that point,” Willett said at RealWorld. “For the last seven times you’ve had this inflection between these two measures, we’ve had a recession within 18 months.”

Willett said it’s not a guarantee but multifamily investors and operators should nonetheless be prepared that one of the longest, most fruitful cycles the apartment industry has enjoyed is approaching the finish line.

“You can make arguments why it doesn’t matter to the degree this has occurred in the past, but I think if you’re planning for business strategies, given indicators out there at this point, it’s irresponsible to assume everything is still hunky dory two years from now.”

For the short term, indicators point to healthy apartment market

Willett said indicators continue to point to a healthy apartment market at least for the short term. A large block of additional apartment deliveries lies ahead and apartment demand appears favorable to cover the new inventory.

New supply volumes are likely to continue at an annual pace above 300,000-320,000 units through mid-2019, levels last seen in the 1980s, according to RealPage Analytics. RealPage analysts expect that plateau to remain for the foreseeable future.

Helping to fuel demand is that employment growth is pointing to new household formation. U.S. monthly job production, is healthy and on pace with 2016-17 levels despite tapering from its peak in 2014 when 2.5 million jobs were added.

Willett notes that the return of manufacturing growth is a key storyline in the recent overall employment picture but another is that increased investment by smaller businesses points to significant confidences in the economy’s direction.

A National Federation of Independent Business survey that measures small business expansion and investment posted its highest readings beginning in the fall and they’ve carried into 2018.

“Jobs being created now are actually coming in small businesses rather than corporate employment,” Willett said. “Small business owners tend to like some of the policies we’re seeing now and expanding.”

Also, solid consumer confidence is helping to spur retail spending, a key component of economic expansion.

Demographics and misaligned employer needs could signal change

But the demographics and misalignment of employer needs could make it tough to maintain today’s economic expansion pace in the next couple of years.

AARP and the Census Bureau report that 10,000 Baby Boomers are turning 65 each day, which means growth in the working-age population is slowing meaningfully. Also, today’s 6.7 million job openings slightly exceeds the number of unemployed people who are looking for work.

In addition, wage growth at 2.7 percent, as reported by the Bureau of Labor Statistics, is topping rent growth.

Willett reminds that a growing segment in rental housing is single-family homes. Build-to-rent space could play a meaningful role in inventory growth for the nation’s institutional capital firms, according to Rick Palacios, Jr., Director of Research at John Burns Real Estate Consulting, in a recent podcast on the rise of the single-family home rental industry.

The impact of prevailing conditions means total housing demand should remain robust for the next couple of years, although some expected cooling in the pace of job production points to demand off a bit from recent highs, Willett said.

“The apartment sector’s share of total housing demand should be solid, although some headwinds not seen earlier are now developing,” he said. “We think demand will slow down from where it has been, but still will be pretty substantial. And that begs the question, who will the renters actually be.”

Analysis reveals interesting trends in future renter makeup

RealPage applied data science and clustering analysis among more than five million apartment lease transactions across the country to get a picture of future renter makeup. A portion of the analysis looked at individual households and characteristics like age, income, pets and children in 25 major markets and 25 smaller markets.

Willett anticipated the individual makeup of the markets would compare to the current U.S. renter household segmentation, which is based on eight demographics. The top four are renters just starting out (29 percent), followed by young adult roommates (21 percent), “Perma Renters” (16 percent) and middle-income Baby Boomers (11 percent).

Of the major markets studied, Minneapolis looked most like the U.S. average in household makeup, and segmentation in Philadelphia and Charlotte was similar. But in most places across the 50 metros examined, the story wasn’t the same.

“The big takeaway is that in almost every other metro there was something different about one or two segments relative to what you saw in the U.S. average,” Willett said. “And there wasn’t an especially pronounced pattern in how they were different. You really have to deal with each one as a separate entity.”

Couples and renters moving up in the world fueling new product demand

Young adults are key components of the renter audience but in some markets they are an out-sized portion of the total. In Indianapolis housing is so affordable that older dwellers are purchasing homes, leaving a plethora of young renters. Similarly, Salt Lake City, San Jose and San Diego have high concentrations of younger renters.

Also, the data shows that roommate households have a large share in expensive metros but San Jose was well above the norm. There, 41 percent of households living in roommate arrangements are roughly double the U.S. norm.

Willett said the real fuel for new, luxury apartments comes from the “Moving on Up” and “Young Couple” segments. Groups consist of fairly affluent singles in their early 30s and couples in the mid- to late-30s that live close to jobs in the urban core and suburbs. Most are living in the fast-growing metros that have high home prices.

The biggest concentration of these demographics are out west, primarily in San Francisco, Los Angeles, Denver and Seattle.

“These are the people who have the incomes to really fuel that demand for the new product that we’re building,” he said. “It’s a stretch for these folks to actually get out there in the marketplace to buy some homes.”

Small metros with affordable single-family product had very few households for these groups, likely a byproduct of positive economic growth.

“They are not great choices for new apartment development,” Willett said.

‘Perma Renters’ an attractive segment for the future

Willett noted that one of the industry’s more interesting and under-appreciated segments of the renter population is the “Perma Renters,” households o

f one person at a median age of 42. They have a median income over $50,000 and rent-to-income ratio of 22 percent. Typically, “Perma Renters” live in Class B apartments in the suburbs and tend to renew a lease at least once. As Millennials get older, this segment is sure to grow, Willett said.

“To me, if I’m an owner and operator, this is a really easy segment of people to keep happy,” Willett said. “That makes them attractive.”

They’re also in pretty appealing markets like Washington, D.C., Atlanta, Dallas, Houston and Las Vegas.

Willett also noted that middle-income Baby Boomers − older singles with moderate incomes − only exist in limited numbers. Also, renters with kids tend to prefer single-family homes.

An interesting stat from the analysis is that although people with pets isn’t a huge demographic in the overall U.S. renter household segmentation, Denver is going to the dogs. More than 8 percent of households have multiple pets, compared to the U.S. norm of 3.5 percent.

“Denver looks nothing like the U.S. average at all,” Willett said. “It’s probably the most different from the U.S. norm. It’s an interesting economy and population in Denver. Look for that to be an outlier compared to the rest of your portfolio.”

Younger renters will continue to maintain grip on households

Willett said younger renters will continue to maintain a hold on the U.S. household renter segmentation for the future. While they don’t have high credit card debt, younger renters could be slowed in home-buying pursuits by high student debt. But how that plays out is an unknown.

“It’s hard to get a handle on that,” he said. “Are students paying off the debt or is mom and dad? While student debt is much bigger than it used to be, credit card debt among those households is much smaller. If I’m qualifying for a home loan, I’m looking at all debt. We’ll see how that comes together.”

Source: propertymanagementinsider.com

The post Future Renters and Apartment Demand Factors appeared first on AAOA.

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Pending home sales rose 0.9%, but another slump is projected

Inmannews - Mon, 07/30/2018 - 7:11am
The number of pending home sales ended its two month slump and rose slightly in all four tracked regions from May to June.
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7 steps for obsessively committing to your business and success

Inmannews - Mon, 07/30/2018 - 2:41am
To succeed in real estate, you must be obsessed with success. Here are seven steps to becoming obsessively committed to the success of your business.
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Lesson learned: Be a problem-solver for your clients

Inmannews - Mon, 07/30/2018 - 2:30am
Find out how Florida real estate broker Jim Whatley turned a lucky coincidence and a can-do attitude into a thriving real estate brokerage.
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Sick of defending your commission? Here’s what you need to make your case

Inmannews - Mon, 07/30/2018 - 2:00am
Are you tired of clients hammering on you about your commission? If so, here’s an entirely new twist on how to defend your commission.
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3 steps to ‘relist’ that painful property that just won’t sell

Inmannews - Mon, 07/30/2018 - 1:00am
What do you do with a listing that just isn’t selling? Especially when the national media has homeowners convinced all they have to do is stick a sign in the yard and watch the offers roll in.
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Ryan Serhant’s iPhone game gives you the stress, and thrill, of being an NYC agent

Inmannews - Sun, 07/29/2018 - 3:00am
Is working as a real estate agent all day not enough? Now you can work for “Million Dollar Listing New York” star Ryan Serhant in his new iOS game “Agent Empire: NYC.” “The real estate experience, as you’ve seen from people watching the TV shows, is pretty interesting,” Serhant said. “People are playing the game […]
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7 takeaways that made attending Inman Connect worth it

Inmannews - Sun, 07/29/2018 - 2:00am
Automation, artificial intelligence, voice-driven commands and big data algorithms were all identified as the technology affecting the change. But the good news is that the tech, which has been ever-changing and thus difficult to keep up with, is about to get easier — if we approach it the right way.
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Why being a Realtor means you should be a conservationist

Inmannews - Sat, 07/28/2018 - 3:00am
“Under all is the land.” These are the first five words of the preamble of the Realtor Code of Ethics. When you boil it down, the essence of our commercial and residential real estate industry is all about the land.
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Exclusive: Compass’ first big tech licensing deal has fallen apart

Inmannews - Fri, 07/27/2018 - 2:26pm
Compass is reportedly pulling out of a deal that would have given Massachusetts indie Leading Edge the same technology tools and platform that Compass agents use.
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New ‘whisper listing’ portal launches in New York City

Inmannews - Fri, 07/27/2018 - 12:57pm
RealAgentz.com launched this week as a marketplace for high-end listings that would have previously never reached the market.
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Newport Beach couple charged with $5.9M real estate fraud

Inmannews - Fri, 07/27/2018 - 12:26pm
A Newport Beach couple is facing money laundering and grand theft charges on allegations that they stole in excess of $5.9 million in a real estate fraud scheme.
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WATCH: How disinformation is screwing up your reality

Inmannews - Fri, 07/27/2018 - 12:22pm
Fake news. False reviews. Internet swarms. Trolls. With the seemingly endless slew of internet lies constantly swarming us, what can we do to keep our brand integrity in check?
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