Delia Real Estate Group w/ Real Living Kee Realty

Marilyn Ave Warren MI (Metro Detroit) Walkthrough

2013-11-07T18:22:00.000-05:00

Joseph Delia

Delia Real Estate Group w/

Real Living Kee Realty

C: 248-933-9462

E: Joe.Delia@realtyagent.com

Walk through on Marilyn Ave, Warren Michigan, suburb of Detroit Michigan.

Purchase Price 60K, 10K Rehab, Rent for 1150-1250.

www.DeliaRealEstateGroup.com

SouthEast Michigan Housing Report September 2013

2013-10-29T16:20:00.000-04:00

Joseph Delia

Delia Real Estate Group w/

Real Living Kee Realty

C: 248-933-9462

E: Joe.Delia@realtyagent.com

Market Report – September 2013

Highlights and Analysis:

• The median sale price for All MLS sales increased to $125,000 – up by 40%

• All MLS sales were up by 9.7% for Sept. compared to Sept. 2012

• Of the 6,235 sales closed in Sept. 6% (372) were identified as short sales

• Of the 6,235 sales closed in Sept. 35% (2,160) were identified as CASH sales

Synopsis of Inventory:

• Average Days On-Market decreased by 22 days, from 76 to 54

• The on-market inventory declined by 13%, from 26,023 to 22,535

• Approx. 6% of the on-market inventory is comprised of short sales.

• Approx. 13% of the on-market inventory is comprised of foreclosures.

Video explanation of these statistics

September 2013 Statistical Summary .pdf

September 2013 Zip Code Breakdown . xls

August 2013 South East Michigan Housing Report

2013-09-26T11:09:00.000-04:00

Joseph Delia

Delia Real Estate Group w/

Real Living Kee Realty

C: 248-933-9462

E: Joe.Delia@realtyagent.com

Analysis:
• The median sale price for All MLS sales increased to $130,000 – up by 45.3% over August of last year.
• All MLS sales for August were down by just 1.2%, from 7,041 to 6,957.
• Average Days On-Market (DOM) for the entire MLS decreased by 21 days from 77 to 56.
• Of the 6,957 sales closed in August, 6.2% (430) were identified as short sales and 35.8% (2,488) were identified as cash sales.
Synopsis of Inventory (8-13 vs. 8-12)
• On market inventory declined by 16.7%, from 26,404 to 22,007.
• Listings received for the month were up by 10%, from 11,672 to 12,844.
• Approximately 6.1% of the on-market inventory is comprised of properties identified as short sales.
• Approximately 13% of the on-market inventory is comprised of properties identified as foreclosures.

Vblog explaining what these numbers mean

August 2013 Zip Code Breakdown .xls
August 2013 Market Breakdown .pdf

July 2013 South East Michigan Housing Report

2013-08-19T13:20:00.001-04:00

Joseph Delia

Delia Real Estate Group w/

Real Living Kee Realty

C: 248-933-9462

E: Joe.Delia@realtyagent.com

Market Report – July 2013

Analysis:

• All MLS sales for July were up by 4.6%, from 6,468 to 6,763.

• The median sale price for All MLS sales increased to $125,000 – up by 38.9% over July of last year.

• Average Days On-Market (DOM) for the entire MLS decreased by 18 days, from 76 to 58.

• Of the 6,763 sales closed in July, 6.3% (428) were identified as short sales and 35.8% (2,422) were identified as cash sales.

Synopsis of Inventory (7-13 vs. 7-12)

• On market inventory declined by 22.2%, from 27,180 to 21,146.

• Listings received for the month were up by 11.9%, from 11,548 to 12,926.

• Approximately 6.4% of the on-market inventory is comprised of properties identified as short sales.

• Approximately 13% of the on-market inventory is comprised of properties identified as foreclosures.

July 2013 Statistics PDF

July 2013 Zip Code Breakdown PDF

Please "Like" us on Facebook: www.facebook.com/DeliaRealEstateGroup

Please "Follow" us on Twitter: www.twitter.com/RealMIEstate

827 Hampton Circle Rochester Hills MI 48307

2013-08-12T21:13:00.001-04:00

Joseph Delia

Real Living Kee Realty

C:248-933-9462

E: Joe.Delia@realtyagent.com

www.827Hamptoncircle.com

$229,000, 2005/sqft, 3br 2.1ba, attached 2 car garage w/ a partially finished basement.

Open House

Sunday August 18th 1-4PM

June 2013 South East Michigan Housing Report

2013-07-31T20:45:00.000-04:00

Joseph Delia

Real Living Kee Realty

C:248-933-9462

E: Joe.Delia@realtyagent.com

Market Report – June 2013

Highlights and Analysis:

· The median sale price for All MLS sales increased to $123,000 – up by 45%

· All MLS sales were down by 2.8% for June compared to June 2012.

· Of the 6,308 sales closed in June 7% (423) were identified as short sales.

· Of the 6,308 sales closed in June 39% (2,454) were identified as CASH sales

Synopsis of Inventory:

· Average Days On-Market decreased by 15 days, from 81 to 66.

· The on-market inventory declined by 28%, from 27,191 to 19,459.

· Approx. 7% of the on-market inventory is comprised of short sales.

· Approx. 13% of the on-market inventory is comprised of foreclosures.

All Counties Zip Code Report

June 2013 Stats

405 Park Ave Royal Oak MI

2013-07-15T13:44:00.002-04:00

Joseph Delia

Real Living Kee Realty

C:248-933-9462

E: Joe.Delia@realtyagent.com

We're a list a 3 br 2.1 ba, for $299,000. The condo is only two blocks from downtown royal oak!

Please visit www.405parkave.net for more information.

We'll be doing an open house July 21st from 1-4pm.

May 2013 South East Michigan Housing Report

2013-06-30T09:45:00.000-04:00

Joseph Delia

Real Living Kee Realty

C:248-933-9462

E: Joe.Delia@realtyagent.com

Market Report – May 2013

Highlights and Analysis:

• The median sale price for All MLS sales increased to $110,000 – up by 36%

• All MLS sales were up by 1.2% for May compared to May 2012.

• Strongest May on record (back to 2000)

• Of the 6,399 sales closed in May 8% (504) were identified as short sales.

• Of the 6,399 sales closed in May 42% (2,691) were identified as CASH sales

Synopsis of Inventory:

• Average Days On-Market decreased by 15 days, from 84 to 69.

• The on-market inventory declined by 19%, from 27,227 to 21,928.

• Approx. 12% of the on-market inventory is comprised of short sales.

• Approx. 11% of the on-market inventory is comprised of foreclosures.

Real Comp May statistical breakdown by Zip Code -- PDF File

Real Comp May Monthly Statistical Report

April 2013 South East Michigan Housing Report

2013-05-15T15:54:00.000-04:00

Joe Delia

Real Living Kee Realty

Joe.Delia@realtyagent.com

C: 513-405-2303

Market Report – April 2013

Highlights and Analysis:

· The median sale price for All MLS sales increased to $97,165 – up by 35%

· All MLS sales were up by 6.8% for April compared to April 2012. Even with a 21.7% decrease in Inventory!

· Of the 5,799 sales closed in April 8% (472) were identified as short sales.

· Of the 5,799 sales closed in April 44% (2,522) were identified as CASH sales

Synopsis of Inventory:

· Average Days On-Market decreased by 14 days, from 87 to 73.

· The on-market inventory declined by 22%, from 26,896 to 21,054.

· Approx. 14% of the on-market inventory is comprised of short sales.

· Approx. 13% of the on-market inventory is comprised of foreclosures.

Real Comp April statistical breakdown by Zip Code -- XLS File

Real Comp Monthly Statistical Report -- PDF File

March South East Michigan Housing Report

2013-04-17T12:36:00.003-04:00

Joe Delia

Real Living Kee Realty

Joe.Delia@realtyagent.com

513-405-2303

Market Report – March 2013

Highlights and Analysis:

· The median sale price for All MLS sales increased to $86,000 – up by 23%

· All MLS sales were down by 2.5% for March compared to March 2012.

· Of the 5,468 sales closed in March 11% (582) were identified as short sales.

· Of the 5,468 sales closed in March 45% (2,486) were identified as CASH sales

Synopsis of Inventory:

· Average Days On-Market for the entire MLS decreased by 10 days, from 88 to 78.

· The on-market inventory declined by 22%, from 26,317 to 20,488.

· Approx. 16% of the on-market inventory is comprised of short sales

Approx. 13% of the on-market inventory is comprised of foreclosures.

Breakdown By Zipcode XLS File -- XLS File

March 2013 Statistical Report Summary -- PDF File

Cincinnati Area Board of Realtors Feb Home Sales analysis

2013-03-21T13:01:00.003-04:00

Joe Delia

Real Living Kee Realty - Realtor

Greater Detroit

Please click on the link below to see the “February 2013” home sales press release from CABR that was sent to the media today.

http://www.cabr.org/pdfs/HomeSalesFeb20131.pdf

Southeast Michigan Housing Market Report – February 2013

2013-03-19T11:40:00.002-04:00

Market Report – February 2013

Highlights and Analysis:

• All MLS sales were down by 7.3% for February compared to Feb. 2012.

• Of the 4,442 sales closed in February, 15% (670) were identified as short sales.

• The median sale price for All MLS sales increased to $80,000 – up by 10.5%

Synopsis of Inventory:

• Average Days On-Market for the entire MLS decreased by 7 days, from 91 to 84.

• The on-market inventory declined by 23%, from 26,670 to 20,421.

• Approx. 17% of the on-market inventory is comprised of short sales.

• Approx. 13% of the on-market inventory is comprised of foreclosures.

What does this mean!?

Prices are rising, inventory is low, and buyers are fighting over the few houses that are left on the market! It's a sellers market!!

If you or someone you know is looking to buy or sell, please have them contact me today!

C:513-405-2303

E: Joe.Delia@realtyagent.com

2010-2011 Cincinnati SFR Data

2012-05-14T11:02:00.003-04:00

Joe Delia
Realtor / Property Manager / Investor
at Real Living Realty Services

I've been doing a lot of research and found some of this info on SFR sales from 2010 to 2011 very interesting. This link shows the amount of SFR (Single Family Residence) sales and the average price sold, per neighborhood in Cincinnati. I thought I'd share it with you incase you were interested.

I'm eagerly anticipating the 2011-2012 data release and will share that also when it is available.

Cincy MLS 2010-2011 SFR data

4 plex - Northdale Place Cincinnati OH

2012-03-27T13:50:00.002-04:00

Joe Delia
Realtor / Property Manager at Real Living Realty Services
Real Estate Investor

Hello again!

Sorry it's been awhile but I've been very busy acquiring two buildings totaling 7 units. On top of that I have been building our property management division! Between these two buildings we have over 150K in rehab work being done and complete overhaul of bathrooms, kitchens, and redesigns of whole floor layouts. The property we are discussing today we spent 43K on rehab for. We've also had several new owners sign on recently and the consistent marketing and juggling of it all takes a lot of time! I've rededicated myself to this blog and look forward to going through with you one of our recently finished projects.

This project, "Northdale" was an inter-office purchase. We have a lot of REO listings that flow through our office at Real Living Realty Services. One advantage of having a lot of inventory flow through your office, is you typically hear about it right away. This gives you a chance to view the property, and potentially put an offer in before your competition gets a chance to see it. That was the case here as we had a accepted offer and were under contract before this hit the MLS.

Northdale Place Pre-Rehab

The seller was a hard money lender that another agent does a lot of work for. He had to take it back after the guy he lent money to got in over his head in rehab. He had the building broken into several times as well. Some people might think "YIKES!". I think the exact opposite. This building was in very good shape. It needed new HVAC, some plumbing repair, some windows fixed, new tubs and surrounds, and overall trash clean up. Once the trash was gone, getting the rest of the work done was pretty basic.

Here are the pictures of the before and after: Northdale before and after pictures

What was left of the trash after the "Pickers" came through and took what they wanted.

Hearing of the past history of the building, I planned several different ways to protect my investment:

(I have no affiliation with any of these companies or sites)

First, I heard of Asset Trax from BiggerPockets.com. What Asset Trax does is it senses any type of movement with your AC (Located outside my building) and when it sense this it automatically triggers a red flag back at their headquarters. It also is a real time GPS and can track the units if someone does get them in the back of their truck before the police arrive. For $200/unit, it was a no brainer. I sleep better at night knowing people aren't messing with my AC units, and if they are, they'll be caught.

You can see the Asset Trax on top of the AC unit.
The unit is the grey square on top.

Second, I also built a fence around the AC units. This is just an extra deterrent to just have any thieves just move along to the next building and leave mine alone. This, coupled with the asset trax and signs notifying them that the AC units are being monitored 24/7 should keep most thieves away.

You can see the fence around the units.

Third, I read about another security system that fellow investors use, Laser Shield. Laser Shield is a mobile alarm system. I've put it on all the first level windows and doors, and put a motion detector in room in which people could climb through by breaking glass, it also has a smoke alarm. If someone was to try to get inside to get after our appliances, they'd be in trouble quickly. It sets off a loud and annoying alarm, while also notifying the authorities. This system wasn't cheap. I spent about $1,000 dollars but it's well worth protecting water heaters, furnaces, appliances, copper, and more. I'll move this from job site to job site protecting both my investment, and my contractors tools and equipment. When I do not have a project going, I can keep it at my personal residence, or lease it out to other investors / clients for a flat fee for a specified period of time.

Financials

Northdale Cash flow and Expenses

Above is the breakdown of the expenses associated with our purchase of Northdale. This is my personal sheet so I completely understand what is being done here. Might be a little harder to follow for you, focus on the Red and Green. After all expenses, when fully rented, after all anticipated maintenance and vacancy, we should average to cashflow $653-$980/m ranging from a 24%-37% CCR/CoC (Cash on Cash Return). That does not calculate the equity from the principal payment either, as explained in earlier blogs. While technically you are "earning" that principal, it's not something you can use to put food on the table with, therefore, as far as I'm concerned, is mostly irrelevant till there is enough there for a HELOC (Home Equity Line of Credit) or a flat LOC (Line of Credit). This also doesn't calculate any money made from Coin-Op Laundry. The way I look at the coin-op laundry is it contributes towards the house meter lights and water. On any rental property, being well lit is paramount. We've accomplished that by adding lights to the front, back, and sides of the building in an effort to keep problems from happening.

Vacancy: I've budgeted for each unit to be vacant for 1 full month. For just coming off rehab and being a completely empty building, that is low. It'll be on average two months in the first year most likely. From there, I do not anticipate more than 1 month of vacancy per year per unit on average. This CoC return is based off that anticipation.

Property Management (Should you get property management?): I've budgeted 10%, which is market rate, for a property manager. I'm the property manager for greater cincinnati for Real Living Realty Services, but, if I ever stepped away I'd want to know what my returns would be if I had to hire it out. To base my return off me managing the property would skew the numbers. Depending on the type of property, Real Living could be much lower or higher than 10%. $45/m/unit + 1 month lease up fee, OR 6% for commercial listings.

My sign outside the Northdale property.

Insurance: Insurance is something I'm currently battling with. I've put together a spreadsheet of quotes and also have reached out to an insurance broker for his services. I hope to have a decision made on the best carrier for me by the end of the week. State Farm was who I was going to go with, but, they are really starting to clamp down on what they'll insure and as a client for several years and with several properties with them, that bothers me. I hope to support a more local insurance company in the near future. I also hope to get my rate down to under $100/m, which will increase my overall return. I typically like a 1K deductible on my properties. Typically if something goes wrong or a problem occurs, it's going to cost more than a grand if it's serious, might as well take the higher deductible. It'll have to be something large for me to file a claim because I don't want rates to increase on all of our properties.

Rents: I've selected $550/unit as my rental rate. We're currently the best building on the street, and others are looking to get $595 but they pay water. I personally do not like paying ANY utilities. To me, thats a VARIABLE cost. I HATE variable costs. I want to know what my cash-flow will be each and every month. Covering something like water gives the tenant one less thing to be accountable for, and I don't like that. If someone is going to cover water and is doing legwork on a building, they can call both the electric company and water works to see what previous monthly costs were to get a good judge. I've also built in a rent range, which is why you see the CoC/CCR vary by roughly 200. By having a return of $50/m/unit less and more you are better able to see judge what your investment will be if the rent rises, or falls, or if you are off by $50/unit. This also helps cover for any rent you need to lower in order to fill vacancy, which is the bad guy to any investor.

RENT COMPS:

We're priced below average rents per hotpads.com

While we aren't a condo, we are less than any of these off of finest expert

Craigslist Ad Competition $575/m with water, not as nice

I've talked to people in the area as well, and $550 is right on the mark and even a little below.

Section 8: I went to the CMHA meeting today and got a lot of good info. As a result, we are now up on the section 8 website. The bad part about section 8 is they tell you what the rent will be, and you can take it or leave it. I believe we are priced correctly, however, if our building is completely vacant, we'd take a slightly less in rent in order to fill the building and get money flowing in. Another good thing about section 8 is the gov'ts check arrives on the same day every month, the tenants portion is another story. A lot of people have bad stories about section 8, and I can see why, however, a lot of time its a lack of due diligence on the part of that landlord. Just because the applicant is section 8, doesn't mean you do not do a background check on that person, check their credit history, check their employment status. If after all that screening, you still get a bad apple from section 8, you file for an eviction and provide CMHA with the eviction paperwork. That former tenant is kicked off the program. A lot of these people waited on a list, some for years, in order to get onto the program. The potential of them getting kicked out of essentially a free money program is a great deterrent.

Standards: We employ a STRICT standard to our renters. You must make 3 x 1 months rent per household. In this case, that is $1650 per month in total between everyone who is 18 years and older on the property. Tenants cannot have any felony convictions, or owe any previous landlords any money. If the applicant has a previous eviction, it cannot be in the last three years and they must of paid that landlord back. No tenant is a lot better than a bad tenant. Taking anyone off the street and putting them in your building is a disaster waiting to happen. The only standard we flex on is the monthly income for section 8 tenants. We'll follow CMHA's standards for section 8 tenants and that is rent + utilities can equal 40% of household income.

Maintenance: Typically in the past I've plugged in $550/yr for my SFR's (Single Family Residence). That has turned out to be a little low. So, with a multi-family where we are providing lawn and snow service, and have house lights and water going, I'm anticipating $3500/yr. I personally believe that is on the high side, but with any ANTICIPATED VARIABLE costs, I want to side on the HIGH side versus under estimating them. There really is no way to officially calculate this. You just have to know what condition your building is currently in, what will it be in after rehab, how many major items are being replaced, what are the age on those items, and so on. If your building is completely brand new, then your annual costs should be pretty low. Eventually you will need to replace roofs, and more, so that cost should be taken into account where maybe it's not actually going to cost you in year 1-5 but when year 6 hits you're hit for $5,000 roof. Those type of expenses should be divided out over the years when you're talking about maintenance in order to be able to get a true MACRO CCR/CoC.

Conclusion: This is a great deal when the building has three or more renters. With the area it's in, it'll take a little longer to get it rented, but typically, some of your renters could turn into permanent renters especially the older onces. The building next to us has had the same three renters for over ten years. Now thats is a vacancy rate I can live with.

Contact Information

If you missed it on my previous blog(s), I just acquired my QR code that contains all my contact information, here it is:

Feel free to contact me with any feedback, questions, concerns. I am a Realtor at Real Living Realty Services. My team handles Residential and Commercial purchases, listings, property management in Greater Cincinnati and the tri-state area. Contact me if you are interested in hearing more about what my team has offer.

C: 513-405-2303
E: Joe.Delia @ Realliving.com -- no spaces... I don't want bots to spam me!

How to Read a Rent Roll

2011-11-10T09:30:00.000-05:00

(Not originally written by me)

Joe Delia
Realtor / Property Manager at Real Living Realty Services
Real Estate Investor

Following are eight ways to measure financial outcomes from the rent roll. There are numerous metrics to value a multifamily asset from revenue per square foot to replacement value. This writing is focused on the rent roll and various means to measure the quality of the income stream derived from the existing, in-place tenant base.

Baseline Data. When beginning a review of the rent roll ask for two copies; one for the current month and one for the same month from the previous year (two years if you can get it.

Turnover. While a nice catch phase, in our business increases in turnover means we are burning cash. With the baseline data we can now determine turnover and inquire about the fate of those tenants no longer on the roll. What became of them?

Revenue and Revenue Growth (Rent Growth). Minus the layered view of revenue including Gross Potential, less vacant, less concessions, plus utility income, plus garages... yada yada. How much RENTAL REVENUE was obtained for the current month versus for the same month one and two years previous?

Renewals and renewal rates. Renewals are the cornerstone to stability. What is the year-over-year renewal rate? A number north of 75% is very good. High renewal rates converts to a low turnover rate. Low turnover converts to high gross margins and less turnover expenditures.

Lease Start dates/Lease end dates. This is separate and distinct from renewals. This category says much about the potential of un-locking value. What is the average length of tenancy? Is it 12 months or 12 years?

Collections Activity. Collections refers to only collections of rent- not any other category. We are focused only on the rent roll. What percentage of rents are collected as of the first of the month?

Late fee revenue. Late fees can be an indicator of future collections. This revenue is a mechanism to enforce timely payment of rent. The real target inquiry is to determine the quality of the under-lying tenant base.

Evictions Activity. Per the rent roll, how many evictions were performed in the last few years? What was the end result on each one; voluntary move once served or action necessitating legal fees? What was the cost to turnover evicted units?

Where this was originally published: http://www.biggerpockets.com/blogs/2251/blog_posts/19502-how-to-read-a-rent-roll

Do I Need A Property Manager?

2011-11-03T22:50:00.002-04:00

Joe Delia
Realtor / Property Manager at Real Living Realty Services
Real Estate Investor

Do I Need A Property Manager?

If you have purchased an investment property and are planning to rent it for commercial or residential purposes, you might want to consider a property manager. If you're a first time investor, you may not realize how time consuming effectively managing that property can be- you may become overwhelmed in no time at all. Even if you?re a veteran investor, you may think you have enough experience to forgo the expense and manage things on your own, only to find out you're completely in over your head. Both of these scenarios are fairly common, and a property manager can help you with operations of your property.

Property Requires Commitment

Think about the long-term commitment required of your property- management doesn't stop with collecting rent. In fact, that alone can prove a headache you do not have the patience to deal with. A property manager can help you deal with the routine management and maintenance issues that will surface quite frequently, especially depending on the size and number of your investment property(s). Other aspects of the job that a property manager can help you with are the back end of operations- book-keeping, documentation, filing, forms, and portfolio management.

The Value of Your Time

If it's true that time is money, a property manager can be invaluable. Most likely, you know better than anyone just how true this statement is. The majority of investors has more than one investment opportunities going at the same time, or are employing at a 9-5 job during the day. How in the world will you be able to be in two places at once? If this is the case, having a dedicated property manager that will free up your time to pursue your money making opportunities is not only a benefit, but a necessity!

Location of Your Property

You should also consider the geographic location of your investment property compared to where you spend most of your time- a property manager may be more accessible than your schedule or location allows. Even if you live in the same city, your property may be on the complete opposite side of town than your office or home, requiring a minimum of a 1-2 hour commute round trip. On the other hand, you may have invested in a property in another city or state. In both of these situations, it's practically impossible to effectively manage the property(s) in a long-distance capacity. A property manager can be available to the tenant(s) 24/7, and will have quicker access to resources for emergency maintenance situations.

Is Your Property Manager Doing His Job?

It can be difficult to know that your property manager is doing his job, especially since the whole point of hiring a property manager is to free you up from the routine maintenance and operations that the job entails. You do not want to micro manage your property manager, but at the same time you do want to know that your property isn't in jeopardy due to neglect by the property manager.

An Unhappy Tenant

Many times, you won't know anything is wrong with your property manager's performance until a problem arises. These situations usually begin by the tenant contacting you directly, clearly overstepping the typical chain of command. Regardless, you should take the time to investigate the problem. Your first course of action should be to ask the tenant if they have tried to go through the property manager regarding the conflict. If they haven't, you can direct them to the property manager and generally assume it was miseducation on the tenant?s part. If they have spoken with the property manager already, find out the details about what went wrong- did the property manager return their attempts at correspondence? How long ago was their original attempt at contact? If the property manager did return their call, why is the tenant unhappy with the outcome? After you have had the same discussion with your property manager, it's up to you to determine who is at fault, and if so, any repercussions for their actions.

Violations of Lease

If the call isn't from a tenant, it may very well be from a neighbor who has legitimate concerns that aren't being addressed or controlled by the property manager. For example, your tenant may be clearly violating their lease, which should have been caught by the property manager himself. Such situations may be a noisy dog that barks constantly when pets are not allowed in the unit or trash and garbage that has accumulated in the front yard without proper disposal. Your property manager should be performing regular inspections of the property- if this isn't being done, it could lead to property damage or even fines.

Failure to Comply With Regulations

Another way you may find out that your property manager is not doing his job is if you are cited violations in compliance and regulations. If your property manager has not regularly inspected the property, or has clearly neglected following state and/or federal regulations, the financial implication could be quite costly- not to mention costing you a tenant, which leads to vacancies and reduced cash flow.

While there are of course going to be one-off situations, it's important to notice if these complaints and occurrences are happening regularly. It could very well be a problem with the property manager- which ultimately becomes your problem as a landlord and employer.

Costs

What Property Managers charge varies greatly by region. On the home we own in Las Vegas, we pay 10% or $100, whichever is greater. Our rent is $750 currently, was $850 previously. Our brokerage in Ohio charges $45 per month, per unit, and 1 months rent per lease-up. Our Property Manager in Phoenix is 10% of $1350/m in rent, plus $400 per lease up. Any properties that are over $1600/m in rent it jumps to 16% of each months rent. Doesn't make sense to me either, but it is what it is. Call several different property managers in your area, interview them, get their pricing and see what they offer.

Contact Information

If you missed it on my previous blog(s), I just acquired my QR code that contains all my contact information, here it is:

Feel free to contact me with any feedback, questions, concerns. I am also Real Living Realty Services Property Manager for Greater Cincinnati. Contact me if you are interested in hearing more about what we offer.

C: 513-405-2303
E: Joe.Delia @ Realliving.com -- no spaces... I don't want bots to spam me!

Overview of an OO investment, something anyone can(should) do. P2

2011-10-20T18:07:00.000-04:00

Real Estate Investing 101 with Joe Delia

It's all about the numbers!

Welcome back! I hope I was able to articulate well in my last blog and you understand the basics of how to get to your rental spread. I also asked you to do some leg work on cash on cash returns (CoC or CCR), and CAP rates. When I evaluate different investments, I always look to see what my return would be if I paid cash for both the property, and the rehab. Different loan terms can affect your CoC. If your loan terms allow you to put less down then your CoC return will be higher. There is a crux in which being in for less, reduces your overall return because now you are paying so much in principal and interest that you no longer make your spread in profit. However, each one of those principal payments technically are part of your return, but, you don't get to see that money in your pocket until you sell, or get some type of second, HELOC loan, which are almost impossible in today's market, except for private money.

See Below on a 90% LTV vs a 50% LTV. Same Rents, same everything, different loan terms.

50% LTV:

At 50% LTV were getting a 16.5% to 21.5% return (ROI)... Not bad right? Beats the heck out of the H.A.P (Hope and Pray) plan most people are on. I don't want to get on a tangent so i'll leave that one alone.

Now lets look if you can secure loan terms at a 90% LTV.

At 90% LTV you're now receiving a 47% to 69% return (ROI)!!!! That's a 31% to 48% difference by just getting a better loan to value, on the SAME DEAL! Nothing has changed. Interest paid on the principal, insurance, rents, taxes, ALL STAYED THE SAME! That's huge.

The initial impact on your pocket book of the 50% LTV means you need to come to closing with $58,500. In the real estate world, that really isn't that much, but, if you are looking to do multiple deals, or, just supplement your mortgage by renting out different units in your home residence, it makes a major difference.

However, at 90% LTV, you only need to bring $13,300. That is a major difference. Most people can save $13,300 to purchase a home residence. Being under 80% LTV, you'll owe Private Mortgage Insurance (PMI) now on a monthly basis, but, once you have paid down your principal to put you under the 80% LTV, the PMI will disappear. You could chose to pay that down ASAP and pay more than what your monthly minimum is. Personally, paying PMI is cheap if you think about it as an additional small amount of interest added to your mortgage. When you can get a 47%-69% ROI, why would I pay down the PMI? Dave Ramsey lifestyle enthusiasts would disagree with me, but, everyone needs to make their own personal decisions. You can see what mine is.

One thing we haven't talked about enough is the equity you are also building on the back of your tenants. In order to do that let me show an amortization chart. I'll use the numbers off of the 90% LTV spreadsheet because that is the deal that makes the most sense to do, and applies well to a owner occupied loan.

Look at Year 1, we've accumulated $1,308 in principal against our initial loan of $101,700. While, that is not $1,308 that is in our pocket, it is money that we've "made". Someone else is putting money in our pockets, helping pay our mortgage, taxes, insurance, EVERYTHING. Being that it is your first home, you are probably only going to be there for 5-6 years, tops, and then you'll want to move. Lets year at year 6, you've now accumulated $1,743 more towards your principal that year. So if you add all the principal you've accumulated through the first 6 years $9,104 of your mortgage paid down in 6 years. That is almost 9% of the initial loan.

Living in one of the units, it's going to subtract the potential rent you could be getting by living there, however, if you choose to NOT SELL (Smart, you are now able to get huge returns. Remember this is all numbers based on if you were not living there. You have to subtact whichever unit you live in, from the rent total) you'll be getting a large return, a profit, and the principal being paid down on your mortgage. Below are the returns were projecting once we move out of the house (The LTV is going to raise to 96.5% because that is what a Full 203K mortgage is at currently).

As you can see rents for the either of the units we'd want to live in is 750-850 or 800-900. We're planning on living in the 750-850 rent unit. It is less space, and one less bedroom, but, we want the extra income monthly. We want to live for free. The point is, instead of paying Principal, Interest, Taxes, Insurance (Also known as PITI), we have two other units helping split those costs. You'll start to be able to get the extra cashflow once you move out. That cashflow can contribute towards your PITI on your next purchase, possibly a home in which you put your roots down and grow a family? Whatever your plan is, it is a no brainer to purchase a multi-family as your first home.

If you do not want to deal with the tenants as far as taking calls, finding them, and just focus on what you do best, whatever your job is, then there are property managers out there to help assist you. I personally employ two of them on property we own in the western part of the country. I also am the property manager for Real Living Realty services for greater Cincinnati. In the future, I can dive into what we pay in other parts of the country, and what Real Living offers in Cincinnati.

Here is a link to some of the terms we've mentioned for the first time:

Property manager: http://en.wikipedia.org/wiki/Property_management
PITI: http://en.wikipedia.org/wiki/PITI
Amortization Schedule: http://en.wikipedia.org/wiki/Amortization_schedule
Loan-To-Value(LTV): http://en.wikipedia.org/wiki/Loan_to_value
Private Mortgage Insurance (PMI): http://en.wikipedia.org/wiki/Lenders_mortgage_insurance

Our next blog will dive into CAP RATES, Property Management, and our logic on how to anticipate maintenance.

If you missed it on my previous blog, I just acquired my QR code that contains all my contact information, here it is:

Feel free to contact me with any feedback, questions, concerns.

Overview of an OO investment, something anyone can(should) do. P1

2011-10-18T01:17:00.001-04:00

Real Estate Investing 101 with Joe Delia

It's all about the numbers!

With this blog I thought I'd dive into a general overview of one out of the three investments I'm currently under contract with. In future blogs I'll link pictures, discuss interactions with contractors, section 8 inspections, city inspectors, overall rehab tips, and much more on all three of these buildings.

Back to the topic. I currently have three multi-family buildings that I am acquiring. This first break down is of a building that my wife and I will owner occupy. It is three units. I'll be making several lay out changes to this building that I will show in the future. Several of which will maximize my total income that I am able to command, while not "Overcrowding" the rentable space.

Below is the monetary breakdown of building one:

Financial spreadsheet
Owner Occupied Full FHA 203K Wells Fargo Loan

In future versions of this spreadsheet I've expanded to include three scenarios, not just two. Middle scenario on future sheets is what i expect, then I allow for a $50 variance per unit in either direction. So, using the above example, I would create a scenario in which I received $150 more than I anticipate, and another where I receive $150 less.

Today, I just want to give a general overview of this spreadsheet. Ignore the "Hard Money Terms" in C7:C9 as these are just what terms I've received in the past. This isn't a hard money loan, so it doesn't apply, as seen in A7 & B7.

Our total Purchase price (PP) + Rehab is anticipated to be around $115,000.

We'll be receiving $1950/$2250 in rents. As a general rule of thumb, you want your rents to be 2% monthly of your purchase price. As you can see, this investment falls short of that.

You're probably wondering why I am doing the deal still. This is an owner occupied investment. My wife and I plan to live there for several years. It's a lay out we like, in an appreciating market, and on the same street houses have sold for 2x this amount in the previous 6 months ("Comps" or comparables in today's market are typically only relevant in the past 6 months, MAXIMUM, you really want comps w/in 90 days). There is emotional decisions that go into this. We also have the potential to live basically for free, which is a $950 swing in cash-flow from what we are currently paying for our rental, vs what we would be paying by owning. I want my wife to be able to get out of her car, go outside at night, do normal things with out having to worry. Due to these circumstances, I was willing to take slightly less of an ideal projected return on my money.

I'm sure you're also wondering how I came to these rents. Well, there are several ways. I look on www.craigslist.com, call on other vacant properties in the area to see what other investors are charging, I check on www.finestexpert.com , I am very involved in Cincinnati's Real Estate Investors Association (www.cincinnatireia.com), I also check the Multiple Listing Service (MLS), and other property management companies websites for listings near by with the same type of features.

I have adjusted the rent amounts for the amenities involved. As you can see, one 2br / 1ba I have being rented for $500-$400/month, and another for $750-$850. The higher rent unit is much more spacious, easier to access. The lesser rent unit is on the third floor, is cramped confines, and it's walls follow the peak of the roof, therefore it's shaped like an inverse V.

Next, lets talk abut something not as exciting. The money you need to SPEND in order to get this property. Take your eyes to C2/C3 in red. "Money tied up". This is in red because we'll have to be PAYING this amount of money in order to acquire this property.

Getting to these two essential numbers are what will allow you to work the rest of the numbers. The lower the "Money Tied Up", potentially the better. If you are just getting started, you want as little "Skin in the game" as possible. Leverage is key. As you can see below, were projecting a fantastic return, which after working with our CPA (He is the expert in the tax code, I only know surface stuff, always check with your CPA is you have any questions on anything in the future that I write about), will be very little owed in taxes.

Here are some links to the terms used above. Read them for a better understanding of investing in both real estate, and in general.

Cap Rate: http://en.wikipedia.org/wiki/Capitalization_rate

Cash on Cash Return: http://en.wikipedia.org/wiki/Cash_on_cash_return

In my next blog, I'll dive deeper into the formula's of how to get to these numbers, what I'm doing to get to these numbers, and more overview of the different numbers that are on this spreadsheet. Take some time to look into the large overview of the spreadsheet that I listed above to familiarize yourself with it as I will be using it as my reference for everything.

I just acquired my QR code that contains all my contact information, here it is:

Feel free to contact me with any feedback, questions, concerns. I look forward to developing this blog!

Thank You

2011-10-10T02:04:00.000-04:00

I'd like to thank you for stoping by my new blog as I take my first step towards documenting Renee and I's pursuit of happiness. Much of this blog will contain our outlook on investing, travel, happiness, and overall lifestyle. Being that I am actively involved in, and throughly enjoy, the Real Estate community in Cincinnati, much of this blog will pertain to that. I'll also venture into sports, some politics, and generally anything I feel like talking about.

Below, I've linked some pictures of Renee and I's honeymoon as we traveled europe. Absolutely fantastic.

This is from the Eiffel tower in Paris, France.

Standing in front of an obelisk from 4000 BC (At least that is the date I have in my head).

Notre Dame!
What I remember most about this was the scene played out above the entrance of people being judged, and hauled off by devils!

Eiffel Tower at night! Fantastic sight!

I'm not big on doing clique' things, but, I went with it!

Delia Real Estate Group w/ Real Living Kee Realty

Marilyn Ave Warren MI (Metro Detroit) Walkthrough

SouthEast Michigan Housing Report September 2013

August 2013 South East Michigan Housing Report

July 2013 South East Michigan Housing Report

827 Hampton Circle Rochester Hills MI 48307

June 2013 South East Michigan Housing Report

405 Park Ave Royal Oak MI

May 2013 South East Michigan Housing Report

April 2013 South East Michigan Housing Report

March South East Michigan Housing Report

Joe Delia Real Living Kee Realty Joe.Delia@realtyagent.com 513-405-2303

Cincinnati Area Board of Realtors Feb Home Sales analysis

Southeast Michigan Housing Market Report – February 2013

Market Report – February 2013

2010-2011 Cincinnati SFR Data

4 plex - Northdale Place Cincinnati OH

Financials

How to Read a Rent Roll

(Not originally written by me)

Do I Need A Property Manager?

Overview of an OO investment, something anyone can(should) do. P2

Overview of an OO investment, something anyone can(should) do. P1

Thank You

Joe Delia

Real Living Kee Realty

Joe.Delia@realtyagent.com

513-405-2303