David Glenn, Author at Blog

What Every First-Time Home Buyer Needs to Look for in Insurance

by David Glenn | Jul 5, 2017 | CRESTICO

When buying a new home, you will also need to purchase home insurance. This coverage is always required by your mortgage company, and there are minimum amounts of coverage that your lender may require you to buy. Even if you do not have a mortgage on your new home, property insurance is necessary in order to protect your financial investment in the asset. After all, you stand to lose hundreds of thousands of dollars or more if your home is damaged or destroyed. When you are shopping for a new home insurance policy, look for these factors to get the best deal possible on your coverage. Suitable Coverage One of the first things to consider when comparing policies relates to which events are covered and which are not covered. Coverage can vary substantially, so it is important to know what type of coverage you need and prefer. For example, earthquake coverage may not be necessary when buying a home in Florida, but flood and windstorm coverage is. Fire and theft coverage are common, but you may need to purchase mold coverage separately. Flood coverage is not required in all areas, but it may still be useful for most homeowners because flooding can happen from a variety of events. Reasonable Replacement Value Some first-time home buyers assume that a home insurance policy will pay to completely replace their home if it is destroyed, but this is not always the case. These policies are written in different ways, and they have different coverage limits. For example, some policies only pay for the replacement cost of the home up to a pre-determined limit. You do not need to insure the land because the land will never be destroyed. Therefore, your sales price will not equal your replacement value. However, the replacement value should be reasonable to build a new home of similar square footage and quality in your area. Protection for Your Personal Property Home insurance also usually provides coverage for your personal contents or assets inside the home. After all, if your home is destroyed by a tornado, earthquake or other similar event, there is a good chance that you will need to buy new clothes, furniture, electronics, appliances and more. It can be difficult to place a value on the contents in your home. A smart idea is to itemize as many items in your home as possible. Estimate their value in a list, and take photos of the belongings. Provide these items to your insurance agent so that they are on file in the event you need to file a claim. Great Rates and Discounts The cost for home insurance can vary substantially, and you understandably want to get a great rate on your policy. Many insurance companies offer cheap auto insurance to homeowners who bundle their auto and home coverage together. You may also get a lower rate overall if you buy a life insurance policy from the same insurer. While you should compare the basic rates for home coverage, focus on the net costs for all types of insurance you plan to purchase through the insurer in a bundled package. Steps to Reduce Rates Further Many insurance companies also provide homeowners with additional methods for reducing coverage rates over time. For example, you may obtain a list of improvements you can make to the home for discounts, and you can slowly work your way down the list over the course of the next few months. Many insurers, for example, offer lower rates if you have a monitored security system installed. Home insurance coverage will likely be one of the more expensive aspects of home ownership, but it also can prevent you from experiencing considerable financial loss in a worst-case scenario. If you are preparing to buy home insurance soon, keep these concepts in mind to get the best coverage possible at a competitive rate.

3 Ways to Increase ROI When House Flipping

by David Glenn | Jun 21, 2017 | CRESTICO

One excellent investment opportunity that can make you a lot of money is house flipping. If you purchase properties at a cheap price and then turn around and sell them for a much higher price, you can make quite a bit of money, often in a relatively short period of time. However, not all house flipping investments really work out that well. If you are looking to increase the return on your investment so that you can really make house flipping worthwhile, consider these helpful tips.

Make Sure That You Purchase the Right Properties

First of all, it is important to be careful about the properties that you purchase. You will need to look at a few things, such as how much it’s going to cost to fix up the house and how much the house is going to be worth later on.

For example, even though you might find a property that is available very cheaply, it might not be a good investment if the work that needs to be done is going to be very costly. If you can find a home in a nice neighborhood that mostly needs affordable work done, such as cosmetic repairs, then you might be able to buy it at a rock-bottom price and then turn around and sell it for a very nice profit.

Don’t get into too much of a rush when buying investment properties. Instead, take your time in really looking into the repairs that may be needed and how much they are going to cost and really studying the market in the area that the home is located in. This can help you make the right decisions.

Do As Much of the Work Yourself as You Can

One big way that you can cut a lot of your costs when house flipping is by doing as much of the work yourself as you can. With many home repairs, the largest cost comes from hiring someone else to do it. If you have to pay out a lot of money in labor costs, this is going to drastically cut down on how much you actually pocket after you sell the home.

Even though you might need to hire a professional for certain things, such as electrical work, you may want to tackle some of the smaller and easier projects yourself. For example, interior painting is relatively easy for anyone who has a bit of time and patience. There are even products on the market that make basic home improvements a whole lot easier for the average person, such as locking laminate flooring and stick-down backsplashes. Plus, once you learn how to tackle some of these projects, you will be able to use this new knowledge both in your own home and in any future homes that you might purchase with the intent of flipping.

Sell the Property On Your Own

Another big way that you can lose out on some of your profits is by hiring a Real Estate agent to help you sell the property when you put it on the market. Even though you might assume that this will make things a whole lot easier for you, you should think about how much the real estate agent’s commission will cut into your profits. If at all possible, you may want to think about listing the home yourself.

A for sale by owner process can be easier than you might think, especially now that there are tons of ways that you can advertise the property yourself online. If you need a little bit of help with the paperwork, you can also look into having a real estate lawyer assist you to ensure that everything is done properly, all without the help of a real estate agent.

As you can see, if you are looking to make a nice profit off of house flipping, there are a few tips that you can follow. This can help you make even more off of your investments.

3 Big Expenses New Home Buyers Are Often Unprepared For

by David Glenn | Jun 9, 2017 | CRESTICO

There is no doubt that buying a home is an expensive venture, but like so many other purchases, there are also a number of “hidden” costs that home buyers may not be prepared for. While they may have saved up 20% of the projected cost of the home they want to purchase, the additional costs may quickly eat up their savings or increase their loan amount to well beyond 80% of the cost of the home. They may also be unprepared for the much higher costs of maintaining a home in relationship to an apartment or townhouse. Here is a list of 3 expenses new home buyers regularly do not expect.

Fees

There are a wide range of fees associated with buying a house that range from inspection fees to closing costs. In many cases, it’s important to get a survey so you know exactly where your property ends and your neighbor’s begins. If your lender wants a credit report, you have to cover the costs. You may have figured taxes into the monthly amount you will need to pay, but may be unaware that you actually have to pay those costs at closing. Probably the heftiest fee, however is the loan origination fee, which can run in the thousands of dollars, particularly if you are buying points on the loan. There are also a wide range of smaller fees you will have to pay, but can cumulatively add up to several hundred dollars. Some of these smaller fees include recording fees for deed, loan and mortgage documents, tax service fees to ensure previous taxed are up to date, title services and title insurance.

Insurance

While renters may have had renter’s insurance and be used to paying that insurance, they may not be prepared for the significantly higher coverage they will need to carry as home owners, at a significantly higher price. Renter’s insurance only needs to cover your personal belongings, since the property owner carries the coverage on the building itself. Home owner’s insurance, however, covers not only your possessions, but the building itself and even the lot it sits on. Your rate will be determined by a number of factors such as the age of the home and the quality of the materials that were used to build it with. In addition, if you are putting less than 20% down on a mortgage, you will most likely also be required by your lender to carry mortgage insurance. You can of course shop for the cheapest insurance rates, but ultimately insurance will eat a much larger chunk of your monthly budget.

Bills and maintenance expenses

When you rent a home or apartment, there are generally a number of expenses folded into your rent, which you will now be responsible for paying. These include water, sewage and trash collection, but can also include homeowner’s fees and even expenses related to the care, upkeep and maintenance of your home that you hadn’t counted on. In an apartment or rental, if the toilet breaks, you call your landlord. Now, if the toilet breaks, you call a plumber and you get to pay for it. And it might surprise you just how much a single service call will run you. You now also get to keep your own lawn watered and mow it once a week in the summer, or more often depending on where you live. Of course you can always pay someone to mow it, but that’s also one more expensive fee new homeowners actually factor into the cost of owning a home.

While few, if any, of the costs of owning a home are actually hidden, they are also not generally factored in by many new home buyers. This is why it’s important to be sure when buying a home that you don’t overextend yourself just on the house payment itself. Make sure you work out a mortgage payment you can comfortably afford and don’t blow your entire savings on your down payment. With a little careful research, planning and budgeting, you can have the house of your dreams and not a financial nightmare.

How Homeowners Can Increase Value of Their Older Home

by David Glenn | May 23, 2017 | CRESTICO

Older homes have charming appeal that many home buyers are drawn to. In fact, it may have been one of the reasons why you decided to purchase your current home. If you own an older home and are preparing to sell it in the near future, you may be banking on your home’s historic character to attract offers. However, you may also be interested in generating the maximum profit possible from the sale. There are several improvements that you can make to an older home that will help you to generate a faster offer at a higher price point.

Make Energy Efficient Improvements

Energy efficiency is not just the latest buzzword in the Real Estate industry. It equates to real financial savings for homeowners over the years, and it also can impact the environment considerably. Many home buyers are drawn to energy efficient homes, but older homes are unfortunately not built with this in mind. You can take numerous steps to address energy efficiency in your older home. For example, you can replace your HVAC system or water heater. If your system is very old and needs repair work, your home warranty may even pay for a portion of the replacement. Adding more insulation, replacing windows and re-sealing doors and windows can also be beneficial.

Enhance the Square Footage

While many homeowners may be drawn to the charm and architectural detail in an older home, they also often prefer the open floor plan that is commonly associated with newer designs. Taking down a wall or two in the home to open up the kitchen to the dining and living areas can add great appeal to your home. If possible, you can also finish out an attic or basement to add even more functional square footage to the home.

Update the Kitchen and Bathrooms

Because many of the features in a kitchen and bathrooms are built-in features, they are often dated. Some buyers may find charm in these older features, but in many cases, they need to be restored or updated so that they are more functional and appealing. When you are renovating these spaces, try to resource materials as much as possible. In addition, retain the historic character of the home while adding modern features. For example, an antique look on the cabinets paired with modern appliances is a great combination for a kitchen in an older home.

Add Fresh Paint to the Walls and Trim

Re-painting the interior and exterior of the home is a rather affordable project to complete, and it can add dramatic appeal to the space. Fresh paint makes a home look cleaner and brighter, and this is particularly true when the right colors are selected for the home. Because many rooms in an older home are smaller in size, use painting techniques to create the illusion of space for maximum results.

Focus on Curb Appeal

While home buyers may be sold on a home based on the interior design and condition, the curb appeal can play a large role in enticing buyers to stop by and tour the home. Curb appeal is instantly noticeable when buyers are searching online for listings, and it makes a first impression on the buyer when he or she arrives for an on-site visit. Spending time refreshing the lawn, trimming bushes and updating flower beds can enhance your property’s value and appeal.

An older home has special charm and personality that many newer homes lack, and this can be an instant selling point. However, when you are focused on maximizing the return you can get from selling your home, you may need to spend time making some repairs and improvements to the home. These are some of the projects that are most commonly needed with older homes and that can have a major impact on property value. Analyze your property to determine how these ideas can benefit your space.

Lessons most real estate investors learn the hard way

by David Glenn | May 20, 2017 | CRESTICO

Investing in real estate can be one of the most exhilarating things an investor does. There is a thrill that comes with finding a good deal, improving a home and, making a killing off of the sale. Most real estate investors don’t start out that way, however. In fact, many, if not most, real estate investors will tell you that they have made many mistakes and lost quite a bit of money as well. They will also tell you it was worth it because of the lessons learned that could be utilized later down the line.

Here are a few mistakes real estate investors typically make in the beginning. Avoiding them can save a lot of heartache.

Hard money

Hard money loans can be an incredible tool. If you have not heard of hard money loans, they are quick loans that are based on the value of the asset (the home, or piece of real estate) instead of the person getting the loan. This means someone with bad credit good get a hard money loan, as long as it is a good deal and the house is worth a lot more, or has a lot of potential.

Hard money loans are usually less than a year, and are just used to snag a quick deal, maybe fix things up, then sell or convert to a regular loan. They have incredibly high Interest Rates – often as high as fifteen percent.

Because of the high interest rates, investors usually hold hard money loans for as little time as possible. If a mistake is made and they end up holding the loan significantly longer than expected, the interest expenses can rack up and put them in a miserable place. If they hold past the original time of the loan, things can get really ugly.

Simply put, if you are going to use a hard money lender, be careful, have exit strategies and backup exit strategies to be sure you are not stuck holding the bag.

Signals

Most good investors are able to use signals and see when the signs point to selling and when they point to buying. If you are able to recognize these signals then you are able to capitalize much quicker and make money much faster.

Research

If you think you are getting a good deal on a piece of property then it is time to be careful. There is often a reason a piece of property is priced the way it is. While good deals do exist, bad deals disguised as good deals also exist.

Research the neighborhood, the history of the home, the future of the area, rental prices, the real estate market as a whole, and everything else you can think of. If everything checks out, you can feel confident in the deal you are getting.

Understand expenses

Your mortgage will absolutely not be your only expense. There will be random expense all along the way. Try to have an emergency fund for when something big comes up. New investors are often surprised to realize how much some home repairs can cost. One recommendation that some investors will give is a home warranty. A home warranty is a warranty that gives you the ability to insure almost everything in your home that can break. From water heaters, stoves, microwaves, refrigerators, and more. While these are not killer expenses if broken, it may be a good idea to have a warranty in place until you have a large enough savings that you can replace and repair these items yourself.

This list is not comprehensive in the least. New real estate investors make mistakes every day. It will happen no matter how big the list. Find a mentor who has done what you are looking to do. Get advice and confirm your first few deals with them. Someday you may be that very mentor.