Robert Guthridge's Blog

The FHA 203k loan is a great loan for properties that won’t qualify for a regular FHA loan because they need too much work. We all want to get a good deal when we buy something.  The problem with getting a good deal on a house is that, many times, the house needs work. Many ... Read more The post How Does an FHA 203k Loan Work When Financing Repairs? appeared first on InvestFourMore . from RSSMix.com Mix ID 8230700 https://ift.tt/2oCbBLM via IFTTT

We have all been told to go to college, get a good job, invest money in the stock market, and retire at age 65. The stock market is said to be the safest and fastest way to retire early. There are advertisements all over television, the radio, and online. The retirement calculators tell us how ... Read more The post How to Retire Early with Rental Properties appeared first on InvestFourMore . from RSSMix.com Mix ID 8230700 https://ift.tt/2V97jaM via IFTTT

New & Improved Housing Stock — and a Price to Go With! [ Editor’s Note :  The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway (“Berkshire”), or any other entity referenced. Edina Realty is a subsidiary of Berkshire.] Once upon a time — OK , until around a decade ago — the Linden Hills neighborhood in Minneapolis was known for its eclectic blend of housing stock. So, mixed in with the upper bracket homes overlooking Lake Harriet and Lake Calhoun always seemed to be an equal number of “cottage-y,” older homes further away from the lakes that were relatively affordable. Today? Not so much. Average(!) List Price: $847k According to the Multiple Listing Service (“MLS”), the average list price for the 35 Linden Hills single-family homes currently on the market is $847k, including several newly built or extensively remodeled ones in the last few years. That’s more than triple the median Twin Cities sales p...

Answer: a Lawsuit and Big $$$ (Potentially) [ Editor’s Note : The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.] “PREVIOUSLY WRITTEN PURCHASE AGREEMENT : This Purchase Agreement Is/Is Not subject to cancellation of a previously written purchase agreement dated _______________ .” –Standard Minnesota Purchase Agreement; lines 251. – 252. Consider this not-so-hypothetical scenario: the Buyer and Seller have a fully signed (executed) Purchase Agreement, but the Buyer has yet to deliver the stipulated earnest money (at least in Minnesota, required within two business days). Buyer #2 then shows up with a (much) sweeter offer that the Seller wants to accept. Can they? Yes, with a VERY big if:  if the Seller makes acceptance of Deal #2 subject to the cancellation of Deal #1. Legal Logic The perhaps not-so-obvious explanation is that ...

Home Buyer/Seller as Guinea Pig As a Realtor, I know better than to challenge an acquaintance who, almost sheepishly, explains that they would’ve liked to hire me, but instead were obliged to use their [insert relationship here**]. Far be it from me to poison — perhaps for years — an extended family’s Thanksgiving or Christmas, or strain decades-old relationships. So, I’ll express empathy for the social tug they feel, and applaud their loyalty to family, long-time friends, or some such. But, privately at least, I invariably think to myself, “Isn’t loyalty a two-way street??” What kind of Realtor would put their financial self-interest ahead of their BFF or close relation, especially if the agent is brand new to the business, (well) past their prime, or — heaven forbid — simply less than a top performer? High Stakes Put it this way: you seldom hear someone who needs back surgery say, “everyone says Dr. Smith is the most experienced surgeon for my procedure. But, my sister’s...

Question #2: How Realistic Is It That They Will? [ Editor’s Note : The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway, or any other entity referenced. If you need legal advice, please consult an attorney.] Normally, Minnesota home Buyers and Sellers decide when they negotiate the Purchase Agreement whether they will handle any post-closing disputes through arbitration or litigation. If the parties are amenable to arbitration, they both sign an Arbitration Addendum (their agents, too). Alternatively, if only one party — or neither party — wants arbitration, they’re deemed to waive it . . . and litigation is the default choice (note: disputes below $15k in Minnesota are now settled in small claims court, also known as Conciliation Court). And that’s usually the end of it: the vast majority of the time, there are no major issues after closing, and it’s a moot point. Un-Waiving Arbitration Which leaves the small % of home...

Realtors’ Investment: Skill, Time, & Marketing $$$ How long should a listing contract be? The short answer: “long enough to sell the property being listed.” How long that is — assuming that the home is well-priced, staged, and marketed — is typically a function of price. Under $250k in the Twin Cities today, you’d estimate 20-40 days of market time. For a move-up home ($250k – $450k), 2-3 months. As homes cross mid-six figures ($500k-plus), average market time locally can easily be several months; for truly upper bracket homes (over $2 million or so in the Twin Cities), the relevant metric can be  years. Of course, for each of the above categories, add extra time for properties that are especially unique, or only appeal to a narrow slice of the market (automatically the case for upper bracket). Step #2 Step #2 of calculating a contract term is to allow additional time for the home to close, once it’s under contract. From the time the last addendum on the Purchas...

Sure, sure , “how many years someone has been in the business” is a rough proxy for how experienced a particular Realtor is. That’s especially so in a field where something like 90% of new entrants last less than two years. But, I’d argue, there are three other metrics that more accurately capture how seasoned any given agent is: One . Transactions handled. Once a Realtor has handled 10 – 15 transaction sides — representing either the Buyer or Seller in a single deal — they’ve at least learned the basics. A few new agents get to that point in three months; others can require two (or more) years. Two . Types of markets they’ve worked in. Believe it or, there’s actually something called a “Buyer’s Market.” Supposedly, there’s even a phenomenon known as a “Balanced market.” But since the housing market hasn’t experienced either one in at least 6-7 years, I’m guessing that more than 50% of all agents currently active have never witnessed either one. When — not if — there’s anoth...

A NNN lease is very common in commercial real estate. I have used them on the commercial rentals that I own and on commercial spaces that I have leased as well. NNN stands for net, net, net. It means that the tenant pays most all of the expenses. They pay the rent fees plus property ... Read more The post How Does a Triple Net (NNN) Commercial Lease Work? appeared first on InvestFourMore . from RSSMix.com Mix ID 8230700 https://ift.tt/2PYXsFK via IFTTT

Practice Tips for Newer — and Not-So-New — Twin Cities Buyers’ Agents What does the Fall 2019 Parade of Homes — underway now — have to do with passing out Realtor business cards? Just this: if a Buyer you’re working with goes through a Parade home and decides to buy it, you may have a “procuring cause” issue with the property’s builder and/or the agent representing them. Translation for laymen:  you may not get paid. “Procuring Cause 101” That’s because the “payout” commission — the part of the commission offered to the Buyer’s agent — is technically payable to the agent who’s responsible for the sale. That’s usually the Buyer’s agent, but there’s a multi-factor test including such criteria as, “who introduced the Buyer to the property?” “Who had control of the Buyer?” and “Who wrote the offer?” Rather than get into a messy debate over a commission, most veteran agents — myself included — simply instruct their Buying clients to let the agent hosting the Parade open house k...

“The odds of finding yourself behind a slow-poke driver on a single-lane, no-passing-road vary proportionately with how pressed you are for time.” –Murphy’s Law of the Road (or at least, my version). “The odds of said driver having exactly the same destination as you — thereby maximizing the amount of time you’re stuck behind them — also vary directly with how late you’re running.” –Corollary, Murphy’s Law of the Road; Ross Kaplan. All of which is why, when I’m waiting to turn on to street, and the oncoming car is taking forever to drive past me, I don’t feel guilty about turning onto to the road ahead of them . . . from RSSMix.com Mix ID 8230700 https://ift.tt/315F7Yz via IFTTT

TV Realtors Manuever For Listings Who’s the “she” in the “She lied. She Cheated. She Won?” tag line? Phi Dunphy arch-rival Realtor Mitzi Roth, played by a very believable Ellen Barkin. In an episode titled, “Send Out the Clowns,” Mitzi outmanuevers Phil for a choice listing by showing up at the Seller’s home at the same time as Phil’s listing appointment, then weaseling her way in by claiming she has a Buyer. On the way into the Seller’s home, Mitzi fakes a fall into the bushes, blaming Phil’s “anger management” issues. She gets the listing. Act 2:  with help from his son, Luke, Phil resolves to bust Mitzi by showing up at her office, confronting her, and recording their talk on Luke’s spy pen for the “benefit” of the new clients. Except that Mitzi sees that coming and wrests the pen from Phil. What is Phil’s Plan C? Does Mitzi keep the listing? You’ll have to watch for yourself! P.S.: This show is just too attuned to real estate not to hav...

Lies, Damn Lies, and Realtor Statistics It seems straightforward:  if you’re looking for the best Realtor, just find the local agent who sells the most homes, for the highest % of asking price, in the least amount of time. Simple, huh? According to at least one pro, however (this one), such statistics are at best a starting point, and can often be misleading or worse. Parsing “Days on Market” For example, consider average selling time. Assume that Realtor Jane’s listings take an average of 78 days to sell, while Realtor Susan’s only need 47 days. Obviously, Realtor Susan’s the better agent, right? Not if her listings sell for an average of $300k, while Realtor Jane’s fetch $850k. That’s because market time varies directly with price point. In the Twin Cities, $850k homes currently take an average of 125 days to sell, while $300k homes only require 42 days on average. Ergo , notwithstanding the raw numbers, Realtor Jane is positively a ...

Homes with “Great Personalities” & Other White Lies [ Editor’s Note : While I do my best to avoid such euphemisms in my own capacity as a listing agent (representing Sellers), let me offer two (sort of) defenses on behalf of Realtors who are less circumspect: 1) beauty is frequently in the eye of the beholder, i.e., subjective rather than objective; and 2) at the right price, any property is genuinely attractive to Buyers (or, at least one!)] Every sales-related profession has them: euphemisms intended to put a positive face on what most people would agree is a negative. In that spirit, here is a “conversion key” to some of the most popular real estate terms today: What the listing says : ‘new construction opportunity.’ What the agent means : tear-down. What the listing says : ‘not a drive-by.’ What the agent means : the home has no curb appeal (still too subtle? It’s U-G-L-Y!). What the listing says : ‘quick closing possible.’ What the agent means : the home’s vacant. W...

When the Realtor REALLY IS a “Neighborhood Expert” In finance, “eating your own cooking” means that the investment advisor has their own money in the same kinds of investments that they recommend to their clients. So, what’s the Realtor definition of “eating your own cooking?” Here’s mine: a Buyer’s agent who recommends a neighborhood or condo building because they live there . (Very) Local Knowledge Except that — at least in my opinion — savvy agents shouldn’t prematurely volunteer that info, because their client’s taste(s), budget, preferred geographic area(s), etc. may differ from theirs. But, once the client is already considering a given property, is the Realtor more credible talking about the specific neighborhood or building — plus nearby schools, shopping, parks, and other amenities — because they live there? As the locals say, “You Betcha!” See also , “Is the Realtor REALLY a “Neighborhood Expert?” One Way to Tell” ; “ Cedar Lake Specialist” . . . Really...

It Depends Who’s Talking “Have you ever noticed that their stuff is sh*t and your sh*t is stuff?” –George Carlin Part of real estate sales — make that a big part — is handling clients with sensitivity and respect. That’s especially true for elderly clients, who haven’t moved in decades and have strong emotional ties to their home. And everything in it, valuable or not. Eye of the Beholder So  . . . Realtors’ term for emptying out a house full of accumulated items with little or no market value is “trash-out” (as in, “Does anyone know of an affordable contractor who can do a trash-out for an upcoming listing?”). Clients prefer to use (and hear) the word “de-clutter.” Ultimately, what matters isn’t the verbiage — it’s that the home is emptied out and prepped for sale (staging, fresh paint, any needed repairs done, city inspection, etc. ) before coming on the market. S ee also:  “ Real Estate Euphemisms “; “ Real Estate Clichés and How to Avoid Them “; “ Show and...

Step #1: What Are the Local Setback Requirements? Robert Frost’s line is often quoted, but seldom defined: what is it exactly that makes a “good” fence good? Here are my four criteria: One . Aesthetic. Acceptable fence materials include wood, vinyl, aluminum, chain link, wrought iron, and wire. Any of the above can be attractive — or ugly! In general, the quality of the fence should be consistent with the fair market value of the home. Warning to corner cutters: just like cheap replacement windows will devalue a classic, century-old old home filled with character and fine details, so, too, will an off-putting fence. Two. Condition. No , fences generally don’t require lots of maintenance. But, a good fence can’t be listing, rusting, or obviously deteriorating, either. Boilers, roofs, and water heaters all have expected life spans — so do fences. Three . Height. A good fence is private — just not too private. The optimal height seems to be about 6′. That’s high en...

Client to Agent: “What Would You Do?” “You break it, you own it.” –The Pottery Barn Rule. “You make it, you own it” (translation: if you make a decision for a client . . . you are responsible for the consequences ). –Real estate corollary, Ross Kaplan. Whether it’s in the context of choosing a home, negotiating a deal, resolving an inspection issue — or literally countless other scenarios that arise in residential real estate — one of the most common questions Realtors field from their clients is, “what would you do?” I’m a pretty direct, call-it-like-I-see-it guy (and Realtor), but I’ve learned not to answer that question. That’s because I’m not the client. It can be very easy to lose sight of, but it’s the client’s wants, needs, budget, timetable, personal taste, etc. that matter. After all, they’re the ones who’ll be living with the consequences of any decisions they make. Context and Analysis (vs. Decision-Making) Which isn’t to say I simply shrug my shoulders and say...

If you have researched investment properties, you have probably heard the term CAP rate. CAP stands for capitalization and is often used to determine the value of income-producing real estate. The cap rate is a measure of what the returns will be assuming you pay cash for a property. The CAP rate will not give ... Read more The post Understanding and Calculating the CAP Rate for Rental Properties appeared first on InvestFourMore . from RSSMix.com Mix ID 8230700 https://ift.tt/32kEfPX via IFTTT