Once upon a time a house was sold within a month. When the prince and princess and their little dwarfs lived there just a year, the value had gone up at least 10%. If they lived in a quickly growing area, or were busy little beavers with improving the house, their equity grew even faster.
Soon the prince and princess decided to sell, to get a bigger castle. It would be easy to sell, and ...
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Walking Through The Stages of Property House Wrapping
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Many people are put off by the thought of positive cash flow property house wrapping because it seems a ...
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An idea that doesn't always immediately spring to mind when selling your property is that instead of selling it for a lump-sum ...
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I recently ran across a site that is not sponsored by one property management company, but gives you valuable information to use to select a management company. Following is an article that helps you make that important choice. Be sure to check out the site, "Manage My Property". This article opens you to an entire series of articles to make sure you understand everything involved in selecting the proper company.
Hiring
a Property Management Company
Posted
by Jordan Muela on Nov 20, 2009 in Property
Management Articles
A good property management firm can easily
become one of your greatest assets, second only to the properties that
they steward on your behalf. That said, this company will make critical
decisions on your behalf making it extremely important that you do your
homework during the hiring process.
This guide is designed
to empower property owners with the knowledge and tools necessary to
confidently evaluate all of the property management companies they interview, and select a manager that can
competently meet their needs.
This guide is broken into three sections:
1.
11 Questions for Determining if
You Need a Property Management Firm
2.
Property Management Services -
A Complete List
3.
What Are The Benefits of Using
a Property Management Company?
What to Look for in a Property Management Company
1.
Property Management Fees - Part
I
2.
Property Management Fees - Part
II
3.
Handling Tenant and Owner Funds
4.
Setting and Collecting Rent
5.
Property Maintenance and
Repairs
7.
Tenant Marketing and Retention
9.
Examining the Organization -
Background, Qualifications, Portfolio
10.
Examining the Organization -
Size, Staff, Customer Service
What to Look for In a Property Management Contract
1.
Responsibilities and
Representations
3. Indemnification and Boiler Plate Items
1. No multiple transactions on the chain of title within a 12 month period. This means one Investor cannot assign a contract to another Investor or to a different entity before the end Buyer transaction occurs.2. There may not be more than 20% profit built into the deal without jumping through additional hoops. If more than 20% is warranted, then there must be a second appraisal, documentation pointing to extensive repair and renovation needed, including an inspection report. Inspection reports must include the main structural elements of the house and the main mechanical and electrical elements. Inspections must cover both exterior and interior condition, insulation, ventilation systems, fireplaces and other fuel burning appliances.Even with a low end property, however, 20% yields a fairly decent profit, especially when you are just starting out in investing. On a $50,000 house the maximum profit without further justification can be $10,000, while on a $200,000 house the built in maximum can be $40,000. You can see how dramatically profit will vary just by increasing the value of the property that you go after in the Short Sale marketplace. Still, the new ruling makes it profitable and simpler to go after low end deals and to put first time Homebuyers in place with these transactions than before when FHA buyers were out of the question. The Homeowners will no longer be forced to wait for lengthy seasoning periods, and therefore fewer deals will fall through.3. As in the past, all FHA transactions must be “arms length.” Do not try to transact a Short Sale flip with a relative or close associate.4. The Seller must hold title to the property. Make sure that the A to B transaction closes completely with separate funding, and that the sale is officially recorded. For this reason, it still may not be possible to do a same-day closing with end Buyers with FHA loans; there may need to be a few days to get the deed recorded before the second transaction can take place.Note by Real Estate Investor Girl: The title must also be officially recorded before the FHA underwrites the loan. And the Purchase and Sale must be dated on or after the recording.5. Make sure that you are investing within an LLC or corporation that has been fully recognized and is legally set up. Do not try to invest using a DBA. FHA does recognize trusts, if legally set up, but we highly recommend that you use an LLC or corporation as your legal base for your business.6. The deal must have been marketed. The FHA will recognize deals that were marketed publically through the MLS, an auction, FSBO service, or through a developer.