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Performance Property Real Estate Question

How Deed Restrictions Affect Homeowners

Q: My husband and I have been thinking about buying a vacation home down the shore. Is it true that they can limit the color you paint your house? Emma, Essex Fells, NJ. A: A deed restriction is a written agreement that limits how a homeowner can use their property. Deed restrictions can restrict what you build and how you can use your home and the land around your home. These deed restrictions often involve a homeowners association (HOA), which is a type of deed-restricted community. One of the most widely used deed restrictions relates to the color of a home’s exterior. Specifically, a color palette deed restriction requires homeowners to paint their homes with a color palette that has […]

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Real Estate Insight

Invitation Homes Seeking To Expand Its Property Management Business

Invitation Homes, the nation’s largest single-family rental landlord is seeking to expand its newly launched third-party property management business for institutional investors and buy up to $1 billion of houses this year.

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Performance Property Real Estate Question

How The MLS Helps Homeowners Sell For Top Dollar

Q: My wife and I are selling our home. I don’t want to pay that big realtor commission. What do you think? Warren, Carteret, NJ A: You are not required to use a realtor when you sell a home–as an owner you can sell your home yourself. As a long time real estate investor, I tried many times to sell property that I have owned myself, especially when I first started in the business over 20 years ago. My experience has been that when I tried to sell a home I owned on my own, the offers I received were much lower than the offer prices I received when I entered into a listing agreement with a licensed realtor (at […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/23/19

If you hire a property mgmt company to manage your real estate, make sure your property management agreement has the following 3 items: 1. roles & responsibilities 2. payment terms and 3. termination clause

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/13/18

To limit rehab costs you can pass on a general contractor and manage the rehab yourself. This will save money but require more of your time.

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Real Estate Insight

New Incentives For New Tenants

Property managers are offering more months of free apartment rent to attract new tenants in markets across the United States.

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Real Estate Insight

Managing Property From Afar Adds Expense

Managing property far away tends to be more challenging than close by, and real estate expenses often end up costing more than they would in your local area.

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Real Estate Insight

New Jersey Rents Skyrocket

Penthouse Five at the Ellipse building recently broke the previous rental ask price record in Jersey City at  $10,995 a month.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/29/17

If you hire a property management company to manage your real estate, make sure your property management agreement has the following 3 items: 1) Roles & Responsibilities 2) Payment Terms & 3) Termination Clause.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/22/17

Don’t rent to tenants who have been previously evicted.

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Real Estate Insight

New Jersey Landlords Adding Urban Amenities

New Jersey office landlords have been adding urban amenities like food trucks and fitness centers to stay competitive.

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Real Estate Insight

Rent in NYC on the Decline

The share of New York City rentals that cut prices surpassed 42% in October 2016, the highest level since December 2010.

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Real Estate Insight

Manhattan Rents Falling

Rents fell in February 2017 for Manhattan apartments of all sizes, the first across-the-board price decline in at least four years.

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Gerald’s Real Estate Tip of the – Week of 7/26/16

If you choose to hire a property management company to manage your real estate, make sure you require the individual or company to sign a written agreement that spells out roles, responsibilities & payment terms.

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Foreclosure Auction Sale Secret Many People Don’t Know

Q: Gerald.  If I buy a property at the sheriff sale and there are people living in the property, is the bank responsible for removing the residents? Dawn, Boston, MA A: Dawn, if a bidder purchases a home at a sheriff sale auction, he is responsible for evicting residents, not the lender because the lender never became the owner of the home. The new owner must go to court and use formal eviction proceedings to remove occupants of the foreclosed home. The lender is also not responsible for any damages the occupants inflict to the home while the new owner is trying to evict.  There are many risks involved in buying foreclosed property at a sheriff sale that you should […]

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What is a Real Estate Variance?

A real estate variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use the land in a manner not otherwise permitted by the zoning ordinance. It is not a change in the zoning law. Instead, it is a specific waiver of requirements of the zoning ordinance.

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Gerald’s Real Estate Tip of the – Week of 2/23/16

Before you make an offer to purchase, estimate a property’s monthly rent roll by examining and ideally visiting comparable rental properties in the same neighborhood.

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How Does Land Depreciation Work?

Land does not depreciate for tax purposes because it is considered to have an infinite useful life.   Land improvements like buildings, furnishings, equipment, etc. have limited useful lives and can be depreciated.

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Trulia or Zillow? Which is Better at Estimating Property Values?

Q: Trulia or Zillo? Which is better at estimating property values? Rich, Lakewood, NJ A: The amount of information, resources and tools available on Trulia and Zillow is enormous. Regrettably, the accuracy of the information on Zillow & Trulia often leaves much to be desired.  Trulia & Zillow use algorithms, to approximate property values.  Algorithms are mathematical formulas used for solving problems.  Unfortunately, the property values that these algorithms produce are not consistently accurate. Here are three major difficulties with Trulia, Zillow and other public property search portals: 1. Their information Is Inconsistent Trulia and Zillow, by their own admission acknowledge that their estimates are wrong a large percentage of the time.  So the risk is that a home buyer […]

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Gerald’s Real Estate Tip of the – Week of 2/16/16

Consider deferring capital gains taxes using a 1031 exchange when you sell real estate and reinvest the proceeds to purchase like-kind investment property.

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What Are Riparian Rights?

Riparian rights are the rights of land owners bordering waterways that relate to the water and its use.

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How Attorneys Steal From People in Foreclosure

I have seen many unfortunate homeowners who are behind on their mortgage payments lose thousands of dollars, in some cases tens of thousands of dollars to unscrupulous attorneys.  The main way attorneys steal from people in foreclosure is by charging exorbitant upfront fees and then stringing them along charging more and more fees as time goes on.  The attorneys then don’t deliver on promises that they made to homeowners.  Often, people who find themselves in foreclosure are understandably afraid and sometimes desperate and are looking for honest help–many unethical attorneys exploit homeowners in this situation for their own financial gain. The best way for homeowners in foreclosure to avoid losing money to swindler attorneys is to never agree to pay […]

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Gerald’s Real Estate Tip of the – Week of 2/9/16

Shop for a mortgage or funding source before shopping for a home or property.

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Short Term Vs. Long Term Rentals

Although short term rentals can produce higher income for property owners, they normally result in higher management, maintenance and advertising costs for owners than long term property rentals.

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Rock Salt Or Calcium Chloride: Which Is the Best Snow/Ice Remover?

Q: Rock Salt Or Calcium Chloride: Which Is the Best snow/ice remover? Candy, Arlington, MA A:  The 2 main snow and ice removal agents people use are rock salt (aka sodium chloride) and calcium chloride.  The only real advantage of using rock salt over calcium chloride to remove snow and ice is that rock salt is a little cheaper.  However, calcium chloride offers several advantages over rock salt: One of the most obvious advantages is that calcium can be effective at much colder temperatures than sodium chloride/rock salt.  In fact, calcium chloride can be effective at temperatures as low as -25 degrees Fahrenheit, while rock salt loses its effectiveness at temperatures below 15 degrees Fahrenheit. Also, rock salt poisons soil, damages […]

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Gerald’s Real Estate Tip of the – Week of 2/2/16

Never sign a purchase contract as a buyer with an inspection contingency period less than 7 days.

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Buying Property With No Cash Down

A property purchased with nothing down is unlikely to have much, if any, cash flow.

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How Much Earnest Money Do I Need to Pay to Buy a Bank Property?

Q: Gerald, I saw a bank-owned property that I want to try to buy. How much earnest money do I need to pay to buy a bank property? Rich, Hazlet, NJ A: That’s a great question, Rich.  Bank-owned property transactions also known as REOs (which stands for real estate owned) are often more intimidating for the uninitiated than typical real estate purchases.  There is no all-encompassing rule etched in stone when it comes to earnest money on REOs or any real estate transaction for that matter. Let’s first identify the purpose of an earnest money deposit, which is to show a seller that a buyer is serious about purchasing a property. When the transaction is finalized, the earnest money deposit […]

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Gerald’s Real Estate Tip of the -Week of 1/26/16

Never lend more money on a property than you would be willing to pay for the property yourself.

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Today’s Definition: Hypothecate

Hypothecate: To pledge (property) as security or collateral for a debt.

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Doers Vs. Dreamers

People with aspirations can, in general, be split into two groups: 1. Doers 2. Dreamers Doers make the world go ‘round. That said, dreaming isn’t all bad … and the truth is, most doers are also big dreamers. But the key is turning dreams into real-world action. You’ll never have the life you want — the career you want — the real estate business you want — if you spend your whole life just dreaming. You’re on my list and get my newsletter because you have dreams. You want to be a better real estate investor. You want to build a bigger real estate business. You want to grow your personal fortune. You want to live a better life. These […]

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Gerald’s Real Estate Tip of the – Week of 1/19/16

Good tenants are worth keeping. Keep rents for good tenants slightly below market–this limits service calls and reduces your property management and maintenance costs over time.

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The Surprising Truth About Lots and Income

A moderately priced house built on a great lot will appreciate more and yield higher income on average than a larger, expensive house will on the same lot.

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5 Hidden Costs of Homeownership

Whether you’re planning on buying a property short term or long term, there are costs of homeownership you should prepare yourself for ahead of time. In addition to mortgage payments if you borrow money to buy the property, there are additional costs that property owners often don’t expect. Here are 5 additional costs of homeownership you should expect to pay when you buy property. 1. Property Taxes When you rent, you are not responsible for the property taxes on the property, but when you become a homeowner, you’re expected to pay property taxes, so when you’re trying to determine what your property payments will be for the year, the quarter or monthly, don’t forget to factor in property taxes. 2. […]

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Gerald’s Real Estate Tip of the – Week of 1/12/16

Never loan money on a property you wouldn’t mind owning yourself.

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Beware of Property Foreclosure Claims

If someone has a claim against a property in foreclosure and does not receive proper notice that the claim is about to be erased by the sale, their claim is not extinguished.

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Stop Procrastinating & Finally Make It Happen

With a new year comes another set of New Year’s Resolutions You know, classics like •“This year, I’m going to get out of debt and save money.” •“This year, I’m going to lose 25 pounds and get in shape.” •“This year, I’m going to finally make some money in real estate.” The problem with New Year’s resolutions is that they rarely have a real plan behind them. The important question to ask yourself is HOW are you going to lose 25 pounds or finally make some money in real estate? Do you have a written plan to get those things done? Without a plan with tangible, measurable goals that you can work toward every day, it’s easy to fall victim […]

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Gerald’s Real Estate Tip of the – Week of 1/5/16

Do all your homework BEFORE you make your first offer to purchase a property.

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End Of Year Real Estate Tax Tips Part 2

Gerald Lucas here, with part 2 of my end of year real estate tax tips.  Let’s first recap the 1st three end of year real estate tax tips I’ve already provided to you in my last episode: 1) Consider deferring income 2) Take some last minute tax deductions 3) Account for refinancings Tax Tip #4. Prepay quarterly estimated state tax payments. Consider paying your fourth-quarter estimated state income taxes and any outstanding balance by December 31. Your payments will be tax deductible for this tax year if you’re not subject to the alternative minimum tax (AMT). Tax Tip #5. Contribute the maximum to retirement accounts There may be no better investment than tax-deferred retirement accounts because they compound over time […]

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Gerald’s Real Estate Tip of the – Week of 12/29/15

Provide multiple comparable sales, with photos, addresses and detailed information when you present a real estate deal to an investor, lender or JV partner.

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The Gift Of Anticipation

Few days bring as much anticipation as Christmas Eve, especially for children who lie awake at night, waiting to get up at the crack of dawn to tear open their presents under the Christmas tree. The truth is that anticipation is a big part of fun for everyone. Pleasant anticipation is an important source of happiness. Having something to look forward to makes us feel good and creates a healthy atmosphere based on positive expectations. There are four key stages we experience when we enjoy an event: 1. Looking forward to the moment 2. Enjoying the moment 3. Sharing the moment with others 4. Looking back on the moment Having something to look forward to brings happiness into our lives […]

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Gerald’s Real Estate Tip of the – Week of 12/22/15

Before you make a written offer to buy a rehab property, learn what real estate repairs cost (labor and materials), be conservative with your estimates and make a detailed list that you can show to potential lenders, investors and joint venture partners.

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The Financial Benefit of Garages and Basements

Garages and basements are cheap spaces that typically add more value to a property than their cost.

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End Of Year Real Estate Tax Tips Part 1

Many of you have been asking me for real estate tax tips as we get closer to the end of the year, So here are a few helpful end of year real estate tax tips: Tip #1. Consider deferring your income Income is taxed in the year it is received – so it may be advantageous to delay paying tax until tomorrow rather than paying it today particularly if you expect to be in the same or lower tax bracket next year. Your situation may vary depending on if you are an employee or if you are self-employed. If you are an employee, for tax purposes, you may want to consider deferring a year-end bonus until next year. If you […]

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Gerald’s Real Estate Tip of the – Week of 12/15/15

Real estate wholesalers should first build a comprehensive list of potential buyers before they present deals to flip to a mass audience.

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Easing Mortgage Standards

Easing mortgage standards are allowing first-time homebuyers to finally jump into the housing market after a rough start to the year held a lot of them back. The share of mortgages going to first-time buyers has risen sharply since the start of the year.

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How To Protect Vacant Property From Thieves

Q: Gerald, I just bought my first vacant rehab property. How should I protect the property from thieves while I do the renovation? Phil, Mahwah, NJ A: That’s a good question, Phil. What I’m going to do right now is give you 3 ways to protect a vacant property: Alarms: Install an electronic alarm security system. Alarms will deter individuals from attempting to enter your building and will quickly alert authorities if someone does break in. Live Security: this can be a security company that patrols the area around your property or an intimidating Dog you put in the property or having someone like a handyman live temporarily in the property. Lighting: Motion-activated lights and general lighting can help protect […]

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Gerald’s Real Estate Tip of the – Week of 12/8/15

When interest rates are low always borrow for the longest term you can negotiate.

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New Jersey’s Industrial Real Estate Market

New Jersey’s industrial real estate market continued to shine in the third quarter, bringing vacancy down to levels not seen since before the recession.

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Turn Negative Thoughts Into Positive, Productive Energy

In spite of our many blessings, it’s easy to fall victim to negative thinking. Unfortunately, negative thoughts distract you, drain you of energy and keep you from being in the present moment. The more you give into your negative thoughts, the stronger they become. On the flip side, a small positive thought can have the opposite effect, blossoming into a positive and profitable outcome. When you start to have negative thoughts, it’s often hard to stop them. Shifting your focus from negative to positive thoughts is easier said than done, but it’s the only way to avoid going down an unnecessarily painful path. When you find your thoughts tumbling down a negative slippery slope, here are 5 tips to turn […]

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Gerald’s Real Estate Tip of the – Week of 12/1/15

Confirm contractor availability to work before you commit to buying a property that needs extensive renovations.

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I Appreciate You! Happy Thanksgiving.

I want to wish you and my entire Real Estate Insider Family a warm message of Thanksgiving. I cannot tell you enough how much I appreciate YOU. A single expression of gratitude is never really sufficient, so Thank You, Thank You, Thank You … that’s Thank You to the power of three for all you math aficionados! In our fast-paced world, it’s easy to take things for granted, but I have so many things to be thankful and grateful for … including a happy, healthy and loving family, supportive friends, amazing coaching students, consulting clients, and business partners. I’m grateful for the lifestyle that real estate has afforded me over the last 15 years I’ve been actively investing. I’m thankful […]

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New Jersey Mortgage Delinquency

The mortgage delinquency rate in New Jersey is currently 8.3%. The national average is 3.5%.

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How Do I Get the Most Money for My Property Insurance Claim?

Q: Gerald, there was a fire in one of my rental properties.  I have insurance, but I’ve heard terrible stories about insurance companies ripping off homeowners.  How do I get the most money for my property insurance claim? Stacy, Toms River, NJ A: Stacy, I hear you loud and clear.  One of my first jobs was working as an actuary at an insurance company.  Insurance companies unfortunately do rip insureds off sometimes–their goal is to collect as much money in insurance premiums as possible and then pay out the lowest amount in claims. Here are 3 tips to help you get the most money from a property insurance claim: 1) carefully review your coverage 2) document damage with photos and […]

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Gerald’s Real Estate Tip of the – Week of 11/17/15

Line up multiple potential funding sources beforehand as you plan a property rehab or renovation.

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Growth of New Jersey Home Prices

The average New Jersey home prices are currently increasing at a 3% annual rate.

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How to Decide to Flip or Rehab a Home?

Q: Gerald, I have a property under contract to buy. I looked at all the numbers and I’m confident that it’s a good deal, but I’m not sure whether I should wholesale the property for a quick profit or rehab and then sell the property. Billy, Columbus, Ohio A: That’s a great question, Billy–this is something that I grapple with all the time myself as a full time investor–should I flip a property as is or take the time and money to rehab it and ideally make a bigger profit? When I make that decision, here are 3 factors I consider: 1) time of year 2) how many other rehab projects I have going on & most importantly 3) how much […]

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Gerald’s Real Estate Tip of the – Week of 11/10/15

When you file a property insurance claim, document damage with both photos and video.

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2015 New Jersey Home Sales

New Jersey Home Sales in 2015 are the highest since 2005.

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What If I Run Out Of Money Doing A Rehab?

Q: Gerald, I’m doing my first rehab and it’s costing me more money than I initially thought.  What should I do if I run out of money in the middle of the rehab? Sunny, Garwood, NJ A: Sunny, rehabs normally end up costing more money than you initially expect, which is why it’s always a good idea to build in a cushion when you do your planning for cost overages.  In your case, since you’re already in the middle of rehabbing, the best thing to do is take an honest look at all the additional renovations that you were planning to do and prioritize them.  In other words, determine the most important items that need to be repaired or replaced to make your property marketable and […]

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Gerald’s Real Estate Tip of the -Week of 11/3/15

When you estimate holding costs for a property rehab, consider estimated renovation time as well as the time required to sell the property.

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Buying a Home Sight Unseen

A survey commissioned by online brokerage Redfin of 2,134 Americans finds one in five buyers made an offer on a home without having visited it in person.

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How Long Should It Take To Rehab A House?

Q: Gerald, I’m trying to raise private money to fund my first rehab project. One of the questions one of my private lender prospects asked me was how long it will take to do the renovation. How long should it take to rehab a house? Josh, Garfield, NJ A: That’s a great question, Josh.  The amount of time it will take the renovate your property will depend on a number of factors including how much work needs to be done to bring the property up to the standards of the neighborhood where it’s located.  The time of year may play a role in how long it will take to renovate because renovations can be more problematic and time-consuming during winter […]

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Gerald’s Real Estate Tip of the – Week of 10/27/15

Only make small payments to contractors as they satisfactorily complete mutually agreed upon milestones.

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Investing in Senior Housing

Investor interest in the seniors housing sector is strong and growing. Transaction volumes are at record high levels, pricing is close to a cyclical peak, and auctions are active and often fully priced.

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The Number One Sign Another Investor is Trying to Steal Your Wholesale Deal

Q: Gerald, I’m trying to wholesale a property I have under contract to buy.  I want to protect my deal from other investors who may try to go around me and steal it from me.  Got any advice for me? Carmen, Reading, PA A: Hi Carmen, this is one of the most frequent questions I get from investors working on their first wholesale real estate deal .  What I’m going to do is give you the #1 sign that another investor may be trying to steal your wholesale deal. Before I give that to you I want to make sure you are on solid ground yourself.  The first question to ask yourself is: do you really have a good real […]

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Gerald’s Real Estate Tip of the – Week of 10/20/15

Demand an itemized breakdown of renovation costs from a general contractor rather just an overall estimate for an entire home rehab project.

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The Widening Gap Between Home Owners and Appraisers

For the seventh consecutive month,the gap has widened between what home owners say their home is worth compared to what appraisers say, according to Quicken Loans’ Home Price Perception Index. Home owner estimates now stand 2.65 percent higher than appraiser opinions, the largest gap in more than a year, according to the index.

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How Much Upfront Money Should I Give a Contractor Before He Starts Working?

Q:  Gerald, I hired a contractor to renovate our kitchen and bathroom.  The first 2 guys I spoke with wanted half of the money upfront.  How much upfront money should I give a contractor before he starts working? Robbie, Passaic, NJ A:  That’s a great question, Robbie and as a full time real estate investor myself, it’s an issue that I deal with all the time.  So, how much money should you give a real estate contractor before he starts working?  The answer is as little money as possible.  If you’ve been burned by contractors in past like most of us investors have who’ve been in the business for a while, you’ll understand why. As investors, we ideally would like […]

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Gerald’s Real Estate Tip of the – Week of 10/13/15

When you value a property, consider highest and best use as well as sales comparables.

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Banks Are Loosening Underwriting Criteria for Big Mortgages

The nation’s biggest banks are loosening their underwriting criteria for big mortgages, as lenders ramp up competition to grab a bigger share of the high-end housing market.

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Gerald’s Real Estate Tip of the – Week of 10/6/15

Find out how many jobs a real estate contractor is working on before you hire him. If he has too many jobs running concurrently, the job you hire him to do will unlikely be completed on time.

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Qualifying for a Mortgage with Bad Credit

You may still qualify for a mortgage loan even if you have a lower credit score if you pay a big down payment and don’t have much other personal debt in your name.

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Should I Get an Adjustable-Rate Mortgage?

Q: My mortgage broker told me that it would be easier for me to qualify for an adjustable-rate mortgage. Should I get an adjustable-rate mortgage? Monica, Peekskill, NY A: Monica, your mortgage broker is correct that it will probably be easier for you to qualify for an adjustable-rate mortgage than a fixed rate mortgage, but just because it’s easier to qualify doesn’t mean that it’s a good idea. Just for the record, the mortgage payments on a fixed-rate mortgage stay flat and consistent throughout the life of your loan whereas the interest rate is subject to change on an adjustable-rate mortgage–therein lies the potential danger. When you get an adjustable-rate mortgage, you are gambling on your ability to pay a […]

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Gerald’s Real Estate Tip of the – Week of 9/29/15

Only hire real estate contractors that have established trade lines (credit accounts that allow them to buy supplies and materials themselves).

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FHA Loan Credit Requirements

FHA mortgage loan credit requirements tend to be more relaxed than the credit requirements for conventional loans.

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Is My Credit Score Good Enough to Get a Mortgage?

Q: I’m at the point in my life where I want to buy a home. Is my credit score good enough to get a mortgage? Caroline, Tinton Falls, NJ A: Caroline, your correct that your credit score is the number that lenders use to estimate the risk of lending you money and is a key factor in determining whether you will get approved for a mortgage. However, many lenders view your credit score as just one piece in the puzzle, so a low score won’t necessarily prevent you from getting a mortgage. You can be approved for a mortgage with a lower credit score if, for example, you pay a big down payment and don’t have much other debt in […]

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Gerald’s Real Estate Tip of the – Week of 9/22/15

Do a thorough local rental demand analysis before you sign a contract to buy a rental property.

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New Jersey Property Tax Appeals

Property tax appeals continue to rise in New Jersey as property owners seek to have their property taxes reduced to align them with lower property values since the housing peak of 2006.

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Should We Rent Our Home or Sell?

Q: Gerald, my company is relocating.  We’re moving, so should we rent our home or just sell it? Brenda, Livingston, NJ A: That’s a great question, Brenda.  I want you to consider 3 factors in making your decision on whether to try to rent or to sell your home: 1. What’s the rental demand for your home?  You need to make sure there’s adequate demand to rent your place.  If there isn’t, then renting isn’t a viable option. 2. Will rental income realistically cover and ideally exceed all the expenses on your current home (property taxes, mortgage payments, insurance cost, repairs etc.)?  If you’re losing money every month, then it probably doesn’t make sense to rent and deal with all […]

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Gerald’s Real Estate Tip of the – Week of 9/15/15

Investigate and correct mistakes on your credit report before you apply for a mortgage.

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New Jersey Home Prices

Average home prices in New Jersey are still down about 20 percent statewide from 2006 peak prices, which is twice as much as the national average.

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How Do I Get the Lowest Mortgage Rate?

Q: I recently got a mortgage loan quote, it’s higher than the national mortgage rate I saw posted everywhere. What gives? How do I get the lowest mortgage rate? Jeff, Hillsdale, NJ A: Good question, Jeff.  When you see a very low loan offers or hear about the latest movement in interest rates in the media, take it with a grain of salt. Lenders price your loan with adjustments based on certain risk factors including: Your middle credit score Your loan size (how much money you’re borrowing) The loan product you qualify for The purpose of your loan (i.e. whether you are buying or refinancing) Whether you plan to live in the property or not So, the the riskier your […]

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Gerald’s Real Estate Tip of the – Week of 9/8/15

The best way to avoid paying too much for a property is to never offer too much.

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Upcoming Changes to Fannie Mae

Fannie Mae starts a program this year that lets lenders include income from non-borrowers within a household (i.e. extended family members) toward qualifying for a loan.

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Timeshare Or Vacation Home-Which Is A Better Investment?

Q: My husband and I are debating whether to buy a timeshare or vacation home? Which is a better investment?  Beth, Riverdale, NY A: That’s an interesting question, Beth.  When we compare a vacation home to a timeshare, the difference is essentially full time versus part-time ownership. A vacation home requires full-time ownership which includes maintenance and upkeep year round but gives you more flexibility than a timeshare to use whenever you want rather than just on a particular week when you may not be available. Although a timeshare has limits on when you can use it, timeshares tend to be more affordable than buying a vacation home and work best for you if you know exactly when you’ll take […]

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Gerald’s Real Estate Tip of the – Week of 9/1/15

If you hire a property management company to manage your real estate, make sure your property management agreement has the following 3 items: 1. roles & responsibilities 2. payment terms 3. termination clause

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The Role of Community Banks in Real Estate

Community banks are filling the gaps in the residential mortgage market left by an exodus of big banks in the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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3 Signs A Real Estate Attorney Is No Good

Q: I’m looking for a good real estate attorney because I’m buying a home. I’ve met with several attorneys so far, but they all kind of seem the same. I know there are some really bad attorneys out there-what signs should I look for to eliminate the bad apples? Jackie, Hagerstown, MD A: Jackie, I understand your challenge in trying to separate out the bad real estate attorneys.  What I’m going to do is give you 3 signs a real estate attorney is no good: Attorney promises positive results in advance.  Unless the real estate attorney you are talking to is Nostradamus, he cannot foretell the future, which means that he or she can’t promise you specific results in advance.  […]

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Gerald’s Real Estate Tip of the – Week of 8/25/15

Don’t rent to tenants who have been previously evicted.

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New Jersey Foreclosures

New Jersey foreclosure filings spiked 24% in the first half of 2015 fueled largely by trouble in South Jersey housing markets including Atlantic City as well as Cape May, Ocean and Cumberland Counties.

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3 Signs A Realtor Is Incompetent

Q: Gerald, my wife and I are looking for a good Realtor to sell our home. Our next door neighbor had a bad experience with a realtor when they sold their home–how can we avoid that happening to us? James & Susan, Morristown, NJ A: James & Susan, I hear you loud and clear. To help you avoid working with losers, I’m going to give you 3 signs that a realtor is incompetent: Realtor lacks experience. Having prior experience is important particularly if and when a real estate transaction doesn’t go according to plan. If you can, you and your wife should avoid being guinea pigs and allowing your realtor learn their craft while they’re working with you. The Realtor […]

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Configuring Property Depreciation Allowance

Property Depreciation Allowance = (Depreciable Basis)/(Useful Life); Useful life=27.5 years for residential property, 39 years for non-residential property.

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What Repairs Should I Do Before I Sell My Home?

Q: I’m selling my house now. What repairs should I do now before I sell? Sam, Rockville, MD A: Sam, capital improvements in general only add about 50% of their cost to the value of your home, which means that they are normally a waste of money unless the repair issue is so important that it could scare away buyers. A roof leak so bad that when it rains outside, it rains inside your house or a bathroom or kitchen that hasn’t been updated since the 1970s may be good examples of repairs that you’ll need to do in order to make your property salable. However, if your home is livable and presentable, then unless you are a contractor, it’s […]

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Gerald’s Real Estate Tip of the -Week of 8/11/15

If you allow the seller to stay in a property you are buying after the closing, make sure you have an airtight occupancy agreement that clearly spells out the dates of occupancy and the consequences of failure to abide by those dates.

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Identify Things You Can And Cannot Control

Identify Things You Can And Cannot Control Do you ever worry about things that are beyond your control? Unfortunately, worrying creates physical and mental problems without providing any benefits. People often worry about both the past and the future instead of focusing what they can do in the present. There’s nothing you can do about the past—the clock can’t be turned back. Worrying about what might happen in the future is equally futile and creates mental monsters that can paralyze you. The truth is that there are some things that you have no control over and others that you have complete and total control over—knowing the difference and then acting on that realization is one of the keys to personal […]

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Gross Rent Multiplier

Gross Rent Multiplier = Sales Price/Gross Monthly Rent.

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Gerald’s Real Estate Tip of the – Week of 8/4/15

When you buy a property, make sure that all the property owners sign the purchase contract.

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The Effect of Bidding Wars on Property Value

Bidding wars and sales concessions can distort property values in a local real estate market.

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If Something is Wrong with My Home When I Sell, What Should I do?

Q: If something is wrong with my home when I sell, what should I do? Tim, Teaneck, NJ A: Tim, normally when you sell your home, you are obligated to disclose problems that could affect the property’s market value.  In most states it’s illegal to conceal major physical defects in your property.  For the most part, you’re only responsible for disclosing information that you are aware of. The extent to which you are responsible for finding defects in your home when you sell varies from state to state, so I strongly suggest you consult an experienced local real estate attorney and your state’s real estate commission or board to confirm disclosures you’re responsible for making. Thanks for your question, Tim, […]

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Gerald’s Real Estate Tip of the – Week of 7/28/15

If you find an abandoned property, check the local tax records or enlist a skip-tracing service to locate the owner.

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What Price Should We Sell Our Home For?

Q: We’re about to sell our house. What price should we sell our home for? David & Danielle, Knoxville, TN A: Great question, David & Danielle. Everyone wants to get the highest price possible for their property when they sell it. Few people know how critical the way you price your property is to getting the highest price when you sell it. Here are 3 tips that will help you price your home so you can get top dollar for it when you sell it: Go out and look at similar properties for sale in your neighborhood. This will allow you to see what the eventual buyer of your house will see when they are out looking for properties to […]

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Gerald’s Real Estate Tip of the – Week of 7/21/15

Drive an alternative route to and from work to look for abandoned property that can be purchased & renovated–piles of unread mail & newspapers on the front stoop is a tell-tale sign.

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How Lower Interest Rates Affect Buyers

Lower interest rates push housing demand by expanding a buyer’s purchasing power

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First Thing to Do if Your Mortgage Application is Denied

Q: My mortgage application was denied. What can I do? Lloyd, Union, NJ A: Lloyd, it’s not the end of the world just because your mortgage application was denied. Lenders reject about 50% of refinance applications and about 30 percent of buyers who apply for a mortgage loan. Keep in mind that different lenders have different requirements, so you can apply with another lender or mortgage broker. It probably makes sense to try to find out why your mortgage application was denied—so ask. Also, the denial may not be based on you as a borrower, it may be the property itself, so go back to the lender or broker and find out why your application was denied, then take concrete […]

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Gerald’s Real Estate Tip of the – Week of 7/14/15

Don’t take on a home renovation project yourself unless you have prior experience-1st time home renovators often end up wasting both time and money.

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Overpricing Your Home

When you overprice your home, you give the buyer too much power, leverage and control in the negotiation.

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How to Win a Home Bidding War

Q: Our local real estate market is really hot. We keep getting outbid for homes we want to buy. Do you have any advice on winning a home bidding war? Kate, Summit, NJ A: Hi Kate, I’m sure it’s frustrating to pick a house you like only to lose it to someone else. As far as bidding wars go, the first and most important piece of advice I’ll offer you is 1) set your financial boundaries before you start making offers to purchase—this will protect you from paying too much in the heat of the moment. 2) The second tip is to start strong & serious—you do not want to look like a tire-kicker in a home bidding war 3) […]

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Gerald’s Real Estate Tip of the – Week of 7/7/15

To find good real estate deals, have an investor-friendly Realtor check the multiple listing service for properties that have been on the market for over 180 days.

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Work Fun Into Every Day

Summer is finally here! From backyard barbecues to beach trips, we associate summertime with having fun. Special summer moments remind us how important it is to have fun and play. When we reach a certain age, we often begin to starve ourselves of play. This comes at a huge cost, given the many important ways our brain and senses benefit from play. Play provides nourishment for both our body and our spirit. Recent Japanese research found that spending as little as two hours a month laughing or listening to your favorite music has as big an impact on blood pressure as eliminating salty foods, or even losing 10 pounds. Having fun is also a great creative engine that boosts our […]

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Gerald’s Real Estate Tip of the – Week of 6/30/15

Before you buy rental property in another state, check to see if that state requires a real estate license to manage the real estate of another person or entity.

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Indecision is a Decision

One of the main excuses people use for putting off decision-making is the fear of making a mistake. The problem with that logic is successful people make more mistakes than everyone else, precisely because they make more decisions than everyone else—they learn from their decisions regardless of how things ultimately turn out. You shouldn’t be afraid of making a mistake—you should be afraid of standing still and letting the world pass you by. Make it a point to cultivate decisiveness. Putting off decisions creates a cluttered mind. Decision-making creates order. Your life will be much more organized if you make decisions as they come. Rather than obsessing forever about decisions you’ve put off, your mind will be free to concentrate […]

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Gerald’s Real Estate Tip of the – Week of 6/22/15

A property owner must manage his property manager–regardless of how much responsibility you choose to delegate, when you own property, the buck ultimately stops with you.

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Gerald’s Real Estate Tip of the – Week of 6/16/15

Find out if your homeowners insurance uses “actual cash value” method rather than “cost to replace” method to calculate a claim–if so, depreciation will be deducted from your settlement amount, resulting in lower compensation to you in the event of a claim.

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Gerald’s Real Estate Tip of the – Week of 6/9/15

When you rent a property, set up group appointments so all the prospective tenants come at the same time-the prospective tenants may bid up the price of your rental and allow you to rent for a higher price.

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3 Ways Contractors Can Steal From You

Q: I gave my contractor money to buy materials for a job he was going to do for me on my rental property—he won’t return my phone calls and seems to be avoiding me.  What should I do?  (3 Ways Contractors Can Steal From You) Elliott, Deer Valley, NY A: Elliott, unfortunately, if you are a real estate investor and employ contractors to work on property for you, there will probably come a time when you get ripped off by a contractor.  I definitely have been ripped off before, so I know the painful feeling.  Here are 3 ways that contractors can steal from you: 1. The first way is what seems to have happened to you—the contractor collects money […]

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