tag:blogger.com,1999:blog-69655074454993455702024-02-20T11:55:03.830-08:00Lee J Schneider, Long Island Real EstateAnonymoushttp://www.blogger.com/profile/00703886975337310340noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-6965507445499345570.post-31045682349712301502012-07-30T10:05:00.002-07:002012-07-30T10:05:28.964-07:00Lee J Schneider Review 6 real estate investment strategies<br />
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<span style="font-family: Arial;">Especially today, in real
state investment it is important to consider the various approaches and options.
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<span style="font-family: Arial;"><a href="http://leejschneiderny.com/">Lee J Schneider</a> reviews 6 real estate investment strategies unique for today.<o:p></o:p></span></div>
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<!--[if !supportLists]--><span style="font-family: Arial; mso-fareast-font-family: Arial;">1.<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><!--[endif]--><b><span style="font-family: Arial;">Speculative
Purchase</span></b><span style="font-family: Arial;">.<br />
Perhaps the<span class="apple-converted-space"> </span>most common<span class="apple-converted-space"> </span>real
estate investment strategy is also one with some of the most inherent risk: buying
properties which the investor believes will increase in value due to
market-wide appreciation. Unfortunately, this is in fact pure speculation. No one knows which areas will appreciate in value. Although many billions of
dollars have been made by investors, they were simply
lucky. Any many more have been unlucky and thus loose money.<br />
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<!--[if !supportLists]--><span style="font-family: Arial; mso-fareast-font-family: Arial;">2.<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><!--[endif]--><b><span style="font-family: Arial;">Bargain Real Estate Purchase.<br />
</span></b><span style="font-family: Arial;">Simply put, this is purchase of real estate for at least 20% or more below current
market value.<br />
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<!--[if !supportLists]--><span style="font-family: Arial; mso-fareast-font-family: Arial;">3.<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><!--[endif]--><b><span style="font-family: Arial;">Selective
Value Purchase</span></b><span style="font-family: Arial;">.<br />Property using this strategy is purchased for its current market value but by selecting only
ones with unrealized potential. Immediately after the purchase, any
necessary changes are made to increase the value of the property. Generally,
the property must increase in value by at least 20% within six months in order
for the strategy to be worthwhile.<br />
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<!--[if !supportLists]--><span style="font-family: Arial;">4.<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><!--[endif]--><b><span style="font-family: Arial;">High Yield</span></b><span style="font-family: Arial;"> <b>Purchase</b>.<br />
Using this scenario, a building or home is purchased only if it has a
capitalization rate of 10% or more. The capitalization rate is the net
operating income or the rent minus operating expenses but before debt service, divided
by the purchase price. <br />
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In other words, the cash-on-cash rate of return if the property was owned without
a mortgage, free and clear. In the absence of a bargain purchase, double-digit rates are hard
to find and generally only occur temporarily in depressed markets or in small
market niches.<br />
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<!--[if !supportLists]--><span style="font-family: Arial;">5.<span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><!--[endif]--><b><span style="font-family: Arial;">Unethical
Purchase</span></b><span style="font-family: Arial;">.<br />
Unfortunately, this strategy is advocated by some. Here the goal is to find unsophisticated
sellers and use a convoluted real estate transaction to take advantage of
their lack of expertise. <br /><br />These strategies are unethical, immoral, and often
illegal. Thus, please do not use.<br />
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<li class="MsoNormal"><b><span style="font-family: Arial;">Rental
Income Purchase</span></b><span style="font-family: Arial;">.<br />
Buying rental properties for the purpose of generating income, not equity,
is a great option, and is explored further.<br />
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By updating and remodeling the properties, one is able to maximize rents,
which in turn make the property profitable and valuable.</span><span style="font-family: Arial;"><br />With rental properties, enough
rent must be taken in to offset your PITI, or Principal Interest
Taxes and Insurance. </span><span style="font-family: Arial;"><br />It is best to buy a home that yields at least one thousand dollars in
positive cash flow. Why? Because with every investment there is inherent
risk.</span><span style="font-family: Arial;"><br />In a rental situation, vacancies can occur at any time. Even though they
are particularly low in some areas (such as Long Island, New York, and
other East Coast cities), the need to find the </span><em style="font-family: Arial;"><b>right tenant</b></em><span style="font-family: Arial;"> could
lead to several months of forced vacancy. This could be a great
time to rehab or update the apartment or dwelling: i.e. painting,
carpeting, flooring, fixtures, repairs, cleaning, landscaping etc.<br /><br />Additionally, the possibility of an eviction looms large and could not
only lead to several months of <em><b>no income</b></em> but the probability
that renovation work will be needed. Pending the legality of your rental
could lead to a neighbor’s rebuff of your renting and hence call the town
to alert them of that fact. This in turn could lead to a larger problem
suspending your tenancy indefinitely.</span><span style="font-family: Arial;"><br />Regardless of the details, know that there will be some down time and
that has to be calculated in any yearly profit projections. </span><span style="font-family: Arial;"><br />Some landlords accept as little as $100 per month in positive cash flow in
the hopes that they will capitalize on the equity they will build over the
years. This was a sound strategy years ago, before the market and its
players (banks, investors, Fannie Mae etc.) decided to treat real estate
like a commodity. Currently, many homes are under water and to make a
purchase on the hopes that you will inherit a windfall in 10 years is as
risky as a stock purchase. </span><span style="font-family: Arial;"><br />Perhaps once the real estate market fully corrects from the inordinate
amount of foreclosures still needed to vet can we stabilize and think
again of </span><em style="font-family: Arial;">potential </em><span style="font-family: Arial;">equity
gains. Feel free to contact <a href="http://richmondequitygroup.com/lee-j-schneider-realty/">Lee J. Schneider</a> for any addition information regarding these real estate investment strategies.</span></li>
</ol>Anonymoushttp://www.blogger.com/profile/00703886975337310340noreply@blogger.com0tag:blogger.com,1999:blog-6965507445499345570.post-63744745185472277812012-06-04T07:01:00.002-07:002012-06-04T07:01:36.611-07:00<br />
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Lee J Schneider Three Tips on How to Choose the Right
Tenants</div>
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There is an old saying: “<em>That the only way to know if
you have a good tenant is when they leave</em>..." Unfortunately,
this saying IS usually true.</div>
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You can do all the correct things by reviewing pay stubs, credit
reports, personal and business references, etc.
However, no matter what you do you can still get burned, regardless of
your experience as a landlord, and it's going to happen. No one ever bats a
1,000%!! </div>
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That being said, here are some things to do to which can
limit your exposure to <em>"bad tenants</em>”:</div>
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<!--[if !supportLists]-->1-<span style="font-size: 7pt;"> </span><!--[endif]--><em><b>Don’t ever rely on a realtor’s reference to
vouch for a tenant</b></em><b>.</b> <br />
First, understand there is good and bad in everything, especially in realtors.
Some really do take their careers seriously, and look to build long term relationships.
Others are part-timers looking only for the quick buck turnaround. Once they get
their commission they are on to the next deal, while you are stuck trying to
manage a problematic nightmare.<br />
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Its true that everyone has motives and some people will abandon their
principals, morals, ethics or responsibilities in an effort to secure their own
self interests in scoring the deal. That being said, just know that this rule
of human nature applies equally to realtors. <br />
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In fact, the worst tenants I ever had were through a realtor, amazingly enough.
Yes, the tenants had a credit report and although there were some issues with
it, the realtor was only too glad to help "sell" them to me. In
actuality, they were really helping me overlook issues that normally would have
raised warning signs. In fact, right before the tenants moved, my gut was
telling me it wasn't right. I had tried to terminate the lease and exit out of
the deal, but the realtor was right there to assure me that everything would in
fact be OKAY. <br />
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Well, it was not. The result was an
eviction several months later and getting beat for over ten thousand dollars in
lost rent and damages. Yes, these were professional tenants. They had screwed
just about everyone they had come in contact with along he way. Judgments from
doctors, businesses even the IRS was owed hundreds of thousands of dollars.
Sure, I won a judgment, but who do you think got paid first me or the
IRS? <br />
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Don't take anyone’s word for someone and don't let them fool you that they have
your best interests at heart! Let your gut tell you what to do, it will
never fail you. After you sleep on it a night, your answer will come to you
usually by the next morning...<em>Remember, when in doubt, stay out!!!<br />
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<!--[if !supportLists]-->2-<span style="font-size: 7pt;"> </span><!--[endif]--><em><b>Telephone call back's don't lie and reveal
the real tenant</b>.</em> <br />
Whenever I run an ad for an apartment, I usually get many calls, and it's
virtually impossible to pick up the phone to speak with people at that time. I usually
call them back at a time more convenient and where I can focus on the
conversation. I can't tell you how many times I get a message, “Hi! This
is Jane Smith, how are you? I saw your ad about the apartment and would
love to set a time with you so that I may come to look at it? Please let me
know when it would be convenient for you to show it? Thank you very much.”<br />
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Pretty standard, right? Only the Jane I call back often times answers the phone
like she just finished having a bar or arguing with her phone company. I get this, "Hello, is Jane there? Yeah! Who’s
this?,” in a gruff, defensive voice. Then
when I tell Jane that I am returning her call about the apartment she changes her
inflexion once again and becomes "Nice" Jane. Who do you think you're
going to deal with down the road when a problem or depute arises? You
guessed it! "Not-so-nice-Jane”! <br />
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People are always telling you who they are and what it will be like dealing
with them. It's YOUR job to listen and
look for the signs. <em>Remember it's easy putting them into your place, it's
hard getting them out!!!</em></div>
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<!--[if !supportLists]-->3-<span style="font-size: 7pt;"> </span><!--[endif]--><em><b>Never rent to single tenants for a
multi-family house</b>. <br />
</em>It has been my experience that when you have a two bedroom apartment and
two single, non-partnered people want it, you are asking for problems. <br />
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Here’s why: two single people are untethered, meaning they are free to pick up
and leave it anytime they want. This generally means the other party is left
holding the bag for the rent. As a result, there are a few poor options. They could either pay the whole amount, and if
they do, won't last for very long, or leave as well which probably means
breaking the lease, or find themselves another roommate which if they don't
scrutinize them, like you would do, often leads to a potentially bad match as
well as acrimony for the remaining tenant and you the landlord.<br />
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I did such a thing once. I rented out a nice multi-unit house to two single
teachers. They seemed great! Communication was great, income great, job
security great. However, the
outcome...not so great! <br />
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Although they had signed a lease and committed to at least two years, the whole
thing unraveled in just the first month. One of the tenants met a man, fell for
him, had a falling out with her roommate who seemed slightly less enamored with
him. In one fell swoop, the tenant was moving out and asking for her security back.
The remaining roommate tried to work
things out with us, and did by moving her to another available apartment.
However, the moral is that life is unpredictable. With two single people you
double your chances for changes. In addition, you have scenarios of
adding more cars to the property because so and so's boyfriend decided
that he likes his girlfriends new pad better than his and keeps parking in
roommate "B's" spot. Roommate "A's" boyfriend takes
exception to that hence more drama. When you rent to a couple or family, you
lessen or straight out avoid scenarios like this from ever
happening. <br />
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<br /></div>Anonymoushttp://www.blogger.com/profile/00703886975337310340noreply@blogger.com0tag:blogger.com,1999:blog-6965507445499345570.post-23356374604616293502012-05-08T08:08:00.001-07:002012-05-08T08:08:39.031-07:00<a href="http://leejschneiderny.net/">Lee J. Schneider</a><span style="background-color: white; color: #555555; font-family: Bitter, serif; font-size: 13px; line-height: 22px;"> of Long Island, New York was born and bred on Eastern Long Island and knows all things real estate. Lee J Schneider has been working in the rental and sales market since 1997. He’s married (at Gurney’s Inn in Montauk, naturally), a graduate of Bloomsburg University and is a member of </span><a href="http://www.lireia.com/" style="background-color: white; color: #dd5424; font-family: Bitter, serif; font-size: 13px; line-height: 22px; text-decoration: none;">Long</a><span style="background-color: white; color: #555555; font-family: Bitter, serif; font-size: 13px; line-height: 22px;"> Island Real Estate Investors Association,(LIREIA).</span>Anonymoushttp://www.blogger.com/profile/00703886975337310340noreply@blogger.com0