Real Estate Investing

I had to laugh (that or cry) at an article in the most recent magazine I received from the fine folks at The Real Estate Buyer’s Agent Council.  They offer a section called “60 Days” that features little vignettes of real estate news from around the country.  So we see there will be problems ahead for the housing rich, a county in Florida has begun buying and selling foreclosed homes (which I’ve preached to my own local community to no avail), and how one real estate company in Spain is offering a one-stop shop: houses, title company, divorces.  Wow.

My favorite tidbit by far, though, was about the squatter who was removed from an almost-million dollar home in Jupiter, Florida.  Apparently a woman had moved in to a home in January that had been on the market for more than two years.  She removed the for sale sign and had all the utilities turned on.  Then she redecorated!   When the listing agent went to check on the house, the woman was removed.  The squatter said she worked at a title company tha tdoes business with the homeowner, but the seller denied authorizing the move-in.

I wonder if she paid rent?

Plus I’d think she was doing the homeowner a favor … the insurance rate is less for an occupied home than it would be for a vacant home.

I do think renting is a strong option for many home sellers these days.  It just kills me to see a perfectly nice house sitting vacant.  They get that empty smell.  They stand as bait for criminals.  When a seller does opt to rent, they can have the credit of a renter checked and also get references from both work and former landlords.  It’s a viable option for homes that just won’t sell no matter what.

Photo from Standing Firm.

I have toured homes that are so indescribably filthy that my head hurts when I walk through, along with my nose and all my more gentle sensibilities!  It’s shocking how some people choose to live or how they’ve decided to treat a home when they know they’ll be leaving it.

We heard from a gentleman today at our meeting who works for a company called Zoom Property Preservation.  The company specializes in getting a property back to sellable condition once it’s vacated.  They do trashouts (cleaning out trash piled in a home), board up, lawn maintenance, photo documentation, repairs, and secure the property by changing locks.  Apparently they do whatever is do-able to get a home back in good condition.

The worst home I’ve been in was trashed due to a very bitter divorce.  Clothes were strewn everywhere, the garage was filled top to bottom and end to end with trash bags.  You could SMELL the house as you drove up the driveway.  The family had at least one dog, as well, that had full use of the home - apparently no one ever let the poor thing outside nor did they clean up after it.

Dan from Zoom explained that nothing can surprise him anymore after what he’s seen.  He said, “People are more cruel to each other than any other species.”  Schadenfreude aside, my belief is that people who trash their homes are not doing it with the intent to be cruel to another single person.  They’re doing it to get even with their lender or the bank for taking away the home.

One thing Zoom does is recycles property that the seller has left.  For example, if there is a couch in decent condition, it’s donated to the Salvation Army or Goodwill. The company makes every effort to be green in the sense that they don’t want to create more waste than needed for the environment.

When most property preservation companies work on a home that’s been nearly destroyed, there are standards that must be met when restoring.  Berry of the Property Preservation Resource Blog pointed out that HUD requires certain conditions be met before a title may be conveyed to a new owner.  In the summer, a mowed lawn within two weeks of conveyance is required.  In the winter, a home must be winterized to prevent pipes from breaking.  Other conditions include (but are not limited to):

• The mortgage company has clear title to the property which is usually accomplished as a result of the foreclosure sale

• The property must not be occupied

• The property is secure and has been secured following the guideline requirements including lock codes

• Outbuildings must be secured with proper locks and key codes

• Exterior debris and health hazards have been removed from the property

• Interior debris and health hazards have been removed from the property

• Personal property has been removed from the property

If you’re considering the purchase of a HUD property or other bank-owned, give Berry a visit to read additional requirements.  They’re quite interesting and will help protect you from being taken advantage of by unwitting or dishonest sellers.

Photos from Hollywood Services, a company in central Florida that specializes in revitalizing property on behalf of owners.

Once the sun rises on the day after Christmas, many households awaken with the debate in their mind: take the tree down now or wait a few more days?  Of course it’s an individual decision - I know people who dismantle their tree immediately and others (me) who wait several days.  I don’t know why I wait except I just adore the season and want to milk it for every twinkling light that I can.

However, if you’re selling your house my advice is to take down the tree immediately and get the house back in parade condition. We are nearly into 2009 (I’m quite anxious to say goodbye to the market of ‘08) and I believe the niner will be the year that the real estate market will turn back around. It may make a slow climb back, but climb it will.  And I believe the climb is beginning with people making good buys on foreclosed homes.

If you intend to invest in a foreclosure, do so with your eyes wide open.  CNN Money provides four tips on buying a foreclosed property including making sure a home inspection is done in advance.  Most foreclosures are “as is” which may not be an issue, but it could well turn into a nightmare down the road.

My advice is to also be very careful about where you buy.  Like you would when you buy your own home, you want to check with the local police department to see how often and what types of crime calls they answer in that neighborhood.  It wouldn’t hurt to investigate if and how many calls were made to the actual house you’re considering buying.  Make sure there are no squatters cooking meth or no animals left to die whose insides have soaked into the subfloor.

Meanwhile shelter always has been and always will be a basic necessity and in that, people will grow tired of paying rent eventually.  Giving your money to someone else and dealing with neighbors whose music is so loud your fish tank bubbles is a convincing rationale to drive people to find their own dirt, their roof, their own walls.

And why not in 2009?  Interest rates are crazy delish, home prices are quite reasonable, and there are now numerous safeguards in place to protect buyers from predatory lenders.  We’ve survived the holidays, we’ve survived 2008.  Time to move along.