Columbus REIA real estate investors association March 2011 newsletter

RICK HARRINGTON, Expert Home Inspector

Patch Home Inspections Thursday MAR 10 5.30pm

Gordy’s -Westerville Upstairs

Come join us on Thursday, March 10 as expert home inspector Rick Harrington reveals "The top 20 Critical Real Estate Property Flaws that buyers miss when purchasing Prop-erty & and how you can avoid them!", With a special bonus session, "Incredible energy audit techniques that will save you thousands in the future!". THE GREENIES COULDN'T BE HAPPIER.... If you haven't noticed while Beavis & Butthead in Washington have been having Mo-town parties and focusing on who can get the most face time in front of the camera en-ergy prices have been shooting through the roof. Like it or not the tree huggers are probably jumping around with glee excited about the idea of us driving around in go carts with lawnmower engines powering them. Truth be told is probably a whole lot of folks that are glad energy prices are going up so they can implement their agenda. What this means is there's a high likelihood that very little is going to be done about the incredibly increasing energy prices anytime soon. MEANWHILE BACK IN REALITYVILLE... Us plebes don't have a choice we have to pay these high energy bills whether we like it or not and it appears there is no and insight as to how high energy prices could go. The ruling class powers that be don't like fossil fuels, they don't like coal, they don't want anybody join for oil in the Gulf, truth be told we don't really know what the heck they like so Forewarned is forarmed! DO EVERYTHING YOU CAN TO BE ENERGY-EFFICIENT... Since it appears that this long-term problem is not going to go away anytime soon the simplest and most efficient solution is to take a look at everything that we can do to make our homes as efficient as possible. One of the good things that is available to us plebes is the availability of energy audits. What is an energy audit you say? Well I'm not

100% sure but I think it involves a guy with a clipboard and that's about where my expertise ends. The good news is we are bringing in an absolute expert to give you the inside skinny on energy audits. INSIDE SECRETS OF ENERGY AUDITS REVEALED.... Apparently there are numerous opportunities for free energy audits, low cost energy audits, benefits that are given to people who have ener-gy audits done and not to mention the long-term energy savings that will be had by people who take advantage and think ahead with energy audits. GUESS WHAT TENANTS PAY ENERGY COSTS TO! Oh and just in case you forgot when you tenants are paying much higher energy costs is this good or bad for you property owners out there? Do you think most tenants would rather have a warm house or pay the landlord? Well the smart landlords out there will take advantage of energy audits and see if there's extremely low cost high payback options to keep their houses as energy-efficient as possible so that the ten-ants have maximum ability to pay their rent. FANTASTIC DEALS ARE BEING HAD.. AND HUGE MISTAKES ARE BEING MADE! Their are fantastic deals being purchased out there as the banks are finally starting to come face-to-face with reality understanding that inves-tors are not going to pay retail for distressed properties. Boo Hoo. That's the good news. The bad news is a whole bunch of investors are buying property not fully understanding huge problems that exist in these homes have been sitting vacant for years. DON'T MAKE THAT MISTAKE! In addition to the insider secrets of energy audits Rick Harrington our favorite expert local home inspector will also be talking about the top 20 mistakes that he sees people making when they purchase homes and how you can avoid them. Rick has done thousands of these inspec-tions and you will not want to miss his insider information and his ability to answer any question you may have. So come join us at this fantastic meeting Thursday, March 10, 2011 at Gordys in Westerville and we look forward to seeing you there! Steve Zehala

UPCOMING EVENTS: MAR-2011 MEETING DETAILS:

Property Flaws & Avoiding Them Presented By Rick Harrington

Expert Home Inspector, Patch Home Inspections

Thurs, MAR-10, 2010 5.30pm Where: Gordy’s in Westerville

——————————————— FOCUS GROUP MEETINGS:

——————————————— J. T. Keiderling Short Sales

Focus Group Wednesday 3/9/2011 and 3/22/2011 6pm

Urban Coffee, 7838 Olentangy

——————————————— Scott Emerick- Landlording/ Wednesday 3/23/11, 6:00 pm

Panera -Mill Run Hilliard

——————————————— Steve Zehala- Real Estate For Breakfast-

Mastermind Group 3/22/11, 7am-9am

Cup of Joes– Bexley

——————————————— Register for any event at: ColumbusREIA.com

*Seating is Limited Register Online to Get Tickets to Bring to Meeting First Come, First Serve!

March 2011 Register for All Events at www.ColumbusREIA.com

2 YOUR PATH TO REAL ESTATE INVESTING SUCCESS

Real Estate Investors Association of Columbus • www.ColumbusReia.com 458 N. Cassady Ave • Bexley, Ohio 43209 • Phone 614-258-1000 • Fax: 614-737-5304, 24 x 7 • Email: [email protected] • To become a member of Columbus REIA please visit our website at www.columbusreia.com

“Fortunes are being

made right now!” From The Trenches,

Steve Zehala Over the past several months while we have been purchasing properties and as I have been researching different business models

that appear to be successful I have come across some astonish-ing deals that our students and associates are making on a regu-lar basis. It appears that finally the banks and parties who must sell their properties finally come to the realization that there is a tidal wave of inventory pushing them over the cliff and they have finally started taking some serious discounts and moving invento-ry.

So here's the theory…. Your only 20 deals away from a best of the best retirement… Seri-ously!

I have always said and still absolutely 100% stand by his simple formula which could allow you live an extraordinarily comfortable retire-ment if you implement it. It's a very simple doa-ble wrap your head around plan. It starts with a simple premise of purchasing properties at a 20% discount. Now the truth be told most folks should be able to get a much better discount than 20% but let's just assume that you are only able to negotiate 20% discounts on prop-erties that you purchase and you want to retire rich. Now what is the definition of rich? Let me show you what I believe is the best definition of rich. A river of money that never stops that you can stick a bucket in whenever you needed and do what you want. It does not matter how much your assets are worth as you can't buy groceries with equity. What really matters is how much cash your assets throw off every month when you're retired.

Can you buy a 130k house for 100k? All day …Every day…

The average house in Columbus goes for approximately $130,000. Working at the average house price is a fantastic busi-ness plan is that is where the vast majority of the population buys properties in the folks who buy or rent in this price range are hard-working run-of-the-mill good folks that are easy to work with and are the kind of folks that you would be happy to have over for din-ner. So let's assume that you can purchase $130,000 houses at a price of $100,000. Let's assume that the real value of the property is $130,000 and that it could be had in good condition. Now I'm here to tell you that you can do this deal all day every day with little or minimal effort. Even if you're the kind of person that has panic attacks at the car lot when the salesman tells you he needs to talk to his manager can make deals like this no problem. In fact somebody with just a little bit of savvy could easily get 35% dis-

counts pretty easily but let's just assume you make average deals. Finance it at 6% for 30 years…. So now comes the tough part you have to go out and get financ-ing at 6% for 30 years. We'll talk later about down payments and so on and so forth but let's just say that it would not really be that difficult to go out and get an 80% loan on a perfectly clean good house likely built in the last 10 years and 6% for 30 years. Your payment on this house would be approximately $750 per month P I T I and would amortize at a rate of $100 per month for every payment made. Sell it on lease option for $139,900, 5% down, $1200 per month

It does not take a rocket scientist to understand that is getting extraordinarily more difficult for people to go out and get bank

loans and there are a rush of people coming out of upside down properties that want to continue to stay in nice properties that they can afford. Additionally folks are having easier times com-ing up with down payments as they are not making monthly payments in houses they are coming out of while they are in foreclosure. So at this point we have a $40,000 profit on paper, and were making $450 per month cash flow in another hundred dollars per month in mortgage principal pay down. We‟ll assume the down pay-ments that the person gives you went towards the down payment necessary to get the original financing. How frequently can you do this? My premise is that this deal should be repeatable at least once every three months or four times per year. With the computer technology and data-base resources all of us have at our fingertips

with just a few hours work every month we should find one of the-se deals very easily at least quarterly. So at the end of year one if you have done four of these deals on nice middle-class houses, you should have a $1800 a month cash flow and $160,000 in pa-per equity. Not bad for giving up a few hours watching Oprah right?

But with some persistence it gets better…

If you set a goal to do this annually for five years straight you have laid the foundation for a retirement that very few people will even come close to. Let's look at the numbers. After five years you'll accumulated 20 houses and a cash flow of $9000 per month, with at least $2000 per month in principal pay down and a paper profit on each of these properties of at least $800,000 and it will only get better. These numbers assume no appreciation or increase in rent whatsoever. Now the appreciation part we have no idea about, however, I think it's pretty safe to say that inflation will hit at some point and it's likely that the monthly income will become dramatically higher when inflation hits. In fact this plan is fantastic if inflation goes up and I think it's safe to assume that it's going to go up. (Think of printing presses making money as we speak in the basement of the White House).

FROM THE TRENCHES, Steve Zehala, Columbus REIA Executive Director



Private Real Estate Consulting, Problem Solving, & Negotiating

Don’t Take a Knife to a Gun Fight! Don’t go to war alone!

Do you need help negotiating a creative deal? Need forms & Paperwork? Need

Help?

Have you found a good deal but have no money?

Do you want somebody to look over your shoulder to make sure you’re not mak-

ing a bad deal?

Are you having real estate related problems– with no one to turn to? Are you

upside down & want to escape with your credit ?

We have done hundreds of deals, been attacked, sued, ambushed by TV crews,

hosed, abused, lied to, been evicted & evicted & hundreds, foreclosed & been foreclosed, inspected, hit by bottles of ripple, threatened by Attorneys, buyers, sellers, closing agents, chased by pit bulls, attacked by fleas, roaches, the IRS, the City, the tax auditor, the Sign police, Section-8 inspectors, drug dealers, Liberals & more! We rarely back down and we almost always win! For us it’s fun and it’s all a part of the business!

NEVER UNDERESTIMATE KNOWLEDGE OR EXPERIENCE!

NEVER UNDERESTIMATE THE VALUE OF HELP AND THE MASTERMIND. If we

don't know the answer we likely now someone who does!

Sometimes just ONE missing piece of information WILL change your life!

Call or e-mail Steve Zehala at:614-258-1000 or [email protected] For simple reasonable Fee or Deal based assis-

tance! We have been there!

Now lets answer a couple of those pressing issues many of you are thinking about in your head…

What about those pesky down payments? Well as you can see most of the time you should be able to collect at least 3 to 5% on any lease out and deal. That will cover part of your down pay-ment. Let's assume you have no access whatsoever to down pay-ment money. That means you're either going to have to borrow it or do a joint venture with somebody who has down payment mon-ey. When you show these numbers to somebody who doesn't have time to do these sorts of deals but has access to down pay-ment money they would be crazy not to want to participate in something as profitable as what you see above. At the very least it would be pretty easy to borrow those funds and pay the person back a handsome rate to allow you to get into the deals. But Steve I can't borrow money! Now you're back to the joint venture situation. Find somebody who can put these deals together and now you have a half inter-est in these deals with somebody else. At the end of the five years you can split the houses 10 for him 10 for you or just do twice as many deals to get the same result. Anybody with a com-puter and a little bit of help should be able to manage 50 houses in this price range without any issues whatsoever in fact we know of numerous people who manage over 100 houses by themselves with part-time help without much difficulty whatsoever. This simple conventional business plan will put you far ahead of most folks these days and being able to purchase properties at a discount is extraordinarily simple these days. The question is will you do it?

Ilyce Glink: Homeowner discovers

house is older than previously believed

Q: I just found out that my house was built in 1972. When I bought the proper-

ty, my paperwork said it was built in 1985.

The only way I found out about the discrepancy is because I need to replace my

garage door. The garage door company told me that with a house built in 1972,

there is a possibility of lead paint. The company said it costs more money to

remove the door due to possible lead paint.

But I'm now worrying that my house is 13 years older house than I thought.

What should I be worried about?

A: It's unfortunate that you have to be worried about the age of your property.

I'm wondering how the age of your house came up. Did the seller tell you it

was built in 1985? Did you make that assumption based on property tax rec-

ords? Did the listing agent put it on the listing sheet? Where did he or she get

that number from?

It's possible that your property was initially built in 1972 and then remodeled

extensively in 1985. At that time, it's possible that all lead paint was removed

or remediated. You can find out by going to your municipal building depart-

ment and looking up the records for your property to determine the extent of

any work done on the home.

Even if your home is older than you thought, how does that change things for

you? If the house was completely remodeled in 1985, and the property feels 25

years old and not 38 years old, does it really matter? If you were perfectly hap-

py with everything before you found out your house was older, why are you

dissatisfied now?

If you just purchased the property, you can go back to the seller and ask about

the discrepancy in the age of the home. If the seller and/or broker knew the

property was built in 1972, the lead based paint disclosure form should have

told you that the seller knew the house had lead based paint.

But not all sellers are aware of whether their houses contain lead based paint or

not. If you are a real estate professional, you pretty much know that all homes

built before 1978 have lead-based paint in them.

If you have owned the property for more than two years, you may not have any

legal recourse against the seller unless you suspect fraud. In that case, please

consult with a litigation attorney who has extensive experience in seller disclo-

sure or real estate fraud cases.

As for fixing your garage door, you may want to consult another company that

fixes garage doors. Frequently, you get different pricing and opinions from

different companies.

Q: I am a new homeowner. I purchased a condo townhouse last year with mon-

ey from an inheritance, so I am lucky that I have no mortgage.

I filed for a homestead exemption with my county. What does this do for me? I

just want to know more about how this works.

Also, can I deduct my homeowners' association fees from my income taxes? I

pay $272 a month to my HOA, and that's about an eighth of my take-home pay.

A: Congratulations on becoming a homeowner. It's a good time to buy a house

for some — if you can afford it and you can qualify for a loan (not an issue

for you).

The homestead exemption helps reduces your overall property tax bill. So, it's a

good idea to file for it. In some states, senior citizens often pick up an even

bigger reduction in real estate taxes, so keep that in mind once you hit the mini-

mum age (which varies from state to state).

But for the particulars of any homestead exemption in your county, you should

place a call to the tax office there. Most counties also have websites and those

sites often explain how homestead exemptions work.

Unfortunately, you cannot write off your homeowners' association fees or dues

on your taxes. I know that's a big expense, but the only things you can write off

on your taxes are the interest you pay on your mortgage or home equity line of

credit and your real estate property taxes. And you can only write off these

expenses if you itemize on your federal income tax return. More than two-

thirds of Americans take the standard deduction, so they wouldn't be able to

take these deductions at all.

If you have questions, you can call Ilyce Glink's radio show toll-free 800-972-

8255 any Sunday, from 10 a.m.-noon, or contact her through her Web site,

www.thinkglink.com.



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Disclaimer: this newsletter and its accompanying enclosures are designed to provide accurate and authoritative information regarding the subject matter covered, however neither its publishers nor contributors

assume any responsibility for errors, inaccuracies, omissions, or advice. If accounting, legal, or other professional advice or expert assistance is required, the services of a competent professional person should be sought. Each individual reader is solely and wholly responsible for any decisions made or actions taken that may be motivated herein. Also, any sligths against individuals, companies or organizations are unintentional. These notices are based on publishing industry guidelines jointly adopted by the publishing industry and American bar association. All rights reserved by the publisher. Violation of copyright is a federal offense subject to criminal prosecution and penalties that may include fines and/or imprisonment, and also subject to civil litigation in pursuit of damages. Furthermore, reia does not represent, endorse, nor otherwise take any responsibility for the content, accuracy, truthfulness, or reliability of any of the information contained in advertisements discounts, information materials, or other offers or promises made by any vendor, advertiser, speaker, etc., nor as to the quality or reliability of any product, information or service offered in the advertisement or contained in a presentation. Reia makes no representation as to the charac-ter of any vendor, mentor, advertiser, or speaker, and the publishing of any advertiser or speaker by reia, or of the reliabi lity or truthfulness. Any reliance upon any materials, written or oral, shall be at your sole risk. Reia expressly disclaims any and all warranties, express or implied, including, without limitation, warranties of merchantability and fitness for a particular purpose with respect to any advertised service, mate-rials, information and/or products.

“While the law [of competition] may be sometimes hard for the individual, it is best for the race,

because it insures the survival of the fittest in every department. We accept and welcome, there-

fore, as conditions to which we must accommodate ourselves, great inequality of environment,

the concentration of business, industrial and commercial, in the hands of the few, and the law of

competition between these, as being not only beneficial, but essential for the future progress of

the race.” - ANDREW CARNEGIE

2011

PRIMARY MORTGAGE MARKET SURVEY®

Summary page with all rate types - U.S. averages

U.S. 30 yr U.S. 15 yr U.S. 5/1 ARM U.S. U.S. 1 yr ARM U.S. 30 yr FRM/

30 yr fees & 15 yr fees & 5/1 fees & 5/1 ARM 1 yr fees & 1 yr ARM 1 yr ARM

Week FRM points FRM points ARM points margin ARM points margin spread

1/6 4.77 0.8 4.13 0.8 3.75 0.7 2.75 3.24 0.6 2.76 1.53

1/13 4.71 0.8 4.08 0.7 3.72 0.7 2.75 3.23 0.6 2.77 1.48

1/20 4.74 0.8 4.05 0.8 3.69 0.7 2.75 3.25 0.6 2.76 1.49

1/27 4.80 0.7 4.09 0.7 3.70 0.7 2.74 3.26 0.6 2.77 1.54

2/3 4.81 0.8 4.08 0.8 3.69 0.7 2.74 3.26 0.6 2.76 1.55

2/10 5.05 0.7 4.29 0.7 3.92 0.6 2.75 3.35 0.6 2.76 1.70

2/17 5.00 0.7 4.27 0.7 3.87 0.6 2.75 3.39 0.6 2.76 1.61

2/24 4.95 0.6 4.22 0.7 3.80 0.6 2.74 3.40 0.6 2.76 1.55

3/3 4.87 0.7 4.15 0.7 3.72 0.6 2.74 3.23 0.6 2.76 1.64



This month we will continue to look behind the curtain and see what the great and powerful Oz is up to. The following is the second installment the script I use when presenting in front of small groups. As noted by the plethora of television ads, a great money people are scared about retirement. The concern is not when will I be able to retire, but if I can retire. This presents those of us needing private capi-tal for investing with a stupendous oppor-tunity. It is essential that investors recog-

nize this opportunity and act on it. Carpe Diem, Seize the Day. This is not a time to be on the sidelines. You are surrounded by potential private lenders. Almost anyone you meet in your day-to-day activities could be a lender. Your doctor, dentist, co-workers, fellow club members, church members, etc, etc, etc. Buy them a cup of coffee, talk about their retire-ment concerns, and how you have the best, deadlock solution to their sleepless nights. If presented in a sincere and empathic manner they will listen. We all familiar with the expression “Everyone talks about the weath-er but no one does anything about it”, well here is your chance to do something about it. Learn it, naturalize it, and USE it.

Will you be able to Retire as Planned?

If you are like most Americans, you‟re not very confident that you will have enough money to live comfortably in retirement. According to a recent national report, you will have more time to build your nest egg because you‟re not likely to retire as soon as you planned. The Annual retirement Confidence Survey released by the Employee Benefit Research Institute says a record low of only 13 percent of workers are “very confident” that they are financially pre-pared for a comfortable retirement.

That is a 50 percent plummet in just two years, down from 18 percent in 2008 and 27 percent in 2007 that were optimistic about their retirement security.

The solution: Start saving more. NOW.

The folks at EBRI say most workers have not done any substan-tive retirement planning or calculated the amount they need to save. Only 44 percent of the 1,257 persons surveyed said they'd tried to calculate how much money they'll need to save for a com-fortable retirement

That said additional savings may not be a viable alternative for most of us. In the current economic climate; with record unem-ployment, instability in the financial markets, crashing real estate values and raising food prices, reaching into our pockets and coming up with anything other than lint, may not be possible. Those who are able to budget additional savings should do so now and if they haven‟t sat down and completed some compre-hensive retirement planning they have to. With the devastation the stock market has caused in recent years baby boomers cannot just blindly cruise along and hope for the best.

PLAN THE WORK AND WORK THE PLAN.

I‟m sure everyone out there is saying; “Hey this is great, you have told me all of the things I can‟t do, how about some positive infor-mation. Is there any hope? I can‟t afford to increase my savings and I don‟t want to work the rest of my life or have to be a greeter at the local discount store.”

The solution: Increase the yield on your investments. NOW.

How? By using a little known investment tool called Private Bank-ing or Private Lending. Known for years to savvy investors, Pri-vate Lending offers a conservative, high yield alternative to the stock and bond markets. A Private Lender can expect two to three times the earnings over other interest paying investments.

Most people unfamiliar with the Private Lending process are helped by thinking of the Private Lender (you) as the Bank. The Private Lender finds a Buyer (usually a professional real estate investor) that has a steeply discounted property they are ready to purchase, re-develop, and covert to a rental or retail sale. Like a bank the Private Lender agrees to a loan amount, term, and inter-est rate. At the closing the Private Lender (you) sends certified funds and in return receives a note and a recorded mortgage stat-ing the terms of the loan and securing it with the real estate.

The benefits of being a Private Lender;

There is no Bankers “rule book”. Depending on your needs and the needs of the borrower, every-thing is negotiable. Payments, interest rate, dura-tion of the loan can all be worked out to the satis-faction of both parties. There are very few things remaining in society today that allow us to work out a win-win solution.

High returns are another great benefit. Private Lenders are normally able to earn 3 to 4 percent higher than other interest paying investments. Second mortgages usually earn 1 to 1½ percent higher.

Fixed returns that Private Banking offers are very attractive, particularly when other traditional in-vestments are volatile. When a private mortgage

is negated between a Private Lender and borrower, the interest rate is set for the life of the loan via the mortgage note. This is of great importance to baby boomers getting ready for retirement who can‟t depend on growth from the stock market and can‟t af-ford the meager rates paid by other fixed rate investments like treasury notes, annuities, and Certificates of Deposit.

Unlike the other fixed rate investments talked about above, your private mortgage is secured by real estate. It is common knowledge that we are experiencing the greatest buyers market in history. The benefit to you is that when properties are bought at bargain basement prices it is not difficult to maintain sufficient value to protect your investment. What this means is that there is no way to lose money. Earn the interest either tax free or tax deferred, depending on the type of I.R.A. you have. This can be easily accomplished by plac-ing your current I.R.A. or starting a new I.R.A. with a third party administrator. These administrators or custodians, for example Equity Trust in Ohio, are responsible for administration of your account, while you are free to choose your own investments. In short, private lending is the perfect combination of high return.

JT Keiderling Focus Group



No Tax on Home Sales in Recently Enacted Health Care Reform Bill Columbus Board of REALTORS®

Contrary to reports and newspaper articles circulating widely on the Internet, there is no 3.8 percent "sales tax" or "transfer tax" on the sale of a home included in the recently signed health care reform bill. “The analysis underlying these reports is incorrect and fails to take into account the interplay of the bill's provisions with already existing real estate tax laws that remain unchanged,” said Gavin Blair, CBR governmental affairs director. The National Association of REALTORS® informational brochure, “The 3.8% Tax: Real Estate Scenarios & Examples” states “this tax will not be imposed on all real estate transactions [which is], a com-mon misconception.” What was included in the health care bill, said Blair “is a provision that imposes a new 3.8 percent Medicare tax for some high income households that have „net investment income.” He indicates further that, “any revenue collected by the tax is dedicated to the Medicare hospital insurance program.” The NAR document indicates the “legislation becomes effective in 2013. The tax will fall only on individuals with an adjusted gross in-come (AGI) above $200,000 and couples filing a joint return with more than $250,000 AGI.” Since capital gains are included in the definition of net investment income, an additional tax obligation might result from the sale of real property. In the case of the sale of a principal residence, the existing $250,000/$500,000 exclusion from capital gains on the sale of a prin-cipal residence remains unchanged. Even when the AGI limits are met, the new tax would not be applied to all capital gains that result from the sale of a home. Rather, the tax would apply only to a home sale gain in excess of the $250K/$500K existing primary home exclusion that pushes the filer's AGI over the $200K/$250K adjusted gross income limit. Since $156,897 was the average sale price for a home in central Ohio in September 2010, “none of those home sales could possibly gener-ate a $250,000 profit.” According to Factcheck.org, this means “a typical home sale would not incur any tax.”

If manager can't help with noisy neighbor, talk with condo

board president Benny L. Kass

Q: I recently purchased a condominium unit and live on the third floor. I

have a noise problem with the unit above me. I can hear the people walking

back and forth, getting out of bed, and going about their everyday activities.

New owners purchased that condominium last week. I believe the previous

owner installed a low-grade laminate directly onto the plywood floor with no

padding or sound-dampening material. I talked to the condominium associa-

tion manager, and he says there is nothing that can be done. Is there any

legal action I can take?

A: Noise is very subjective. I often have joked that one person's definition of

music is another's definition of noise. Some people are more sensitive to

sound than others, so it will be your obligation to prove that the noise you

hear is above normal standards.

I am surprised at the property manager's position. At the very least, he could

have gone into your apartment to determine whether there really was a prob-

lem.

The first thing you should now do is talk with the president of your associa-

tion's board of directors. Invite that person into your unit for an inspection.

In addition, ask your immediate neighbors whether they experience the same

issues. Typically, a condominium association does not want to get involved

in disputes between just two unit owners, but if the problem is wider, then

the association has the responsibility to ensure compliance with the legal

documents.

You should review those documents, especially the rules and regulations

section. All such documents specifically include language that prohibits

disturbing noise. Typical language would read as follows: "Unit owners,

residents and lessees shall exercise extreme care to avoid unnecessary noise

or use of musical instruments, radios, televisions and amplifiers that may

disturb other unit owners."

Many associations require that a unit must have adequate floor covering,

such as rugs, over 80 or 90 percent of the unit. If that is the rule in your asso-

ciation, demand that the manager inspect the upstairs unit to determine

whether it is in compliance.

If there is no such rule, you should discuss your concerns with the board of

directors. It might be willing to enact such a rule.

If it becomes necessary to prove that you have a problem, you should retain

an acoustical engineer, at your expense. This professional can determine

whether the noise in your unit is within the acceptable decibel range. The

engineer should also inspect the upstairs unit, so he can provide suggestions

as to how to resolve the problem.

You should alert your property manager that an engineer will be doing an

inspection so that appropriate arrangements can be made with the upstairs

neighbor.

Once you have a report, and assuming that it demonstrates unacceptable

noise, show it to your upstairs neighbors. Explain that you are very troubled

by what you hear and ask them to take appropriate steps to correct the situa-

tion. For example: Carpets could be put on the floor throughout the unit; in

some cases, floorboards could be made more secure. (Often, hammering

down nails will solve the problem.)

If all else fails, you can take that owner to court, alleging a private nuisance.

But litigation is time-consuming, expensive and uncertain. Discuss your

situation with a lawyer to determine whether it's worth the effort.

Benny L. Kass is a Washington lawyer. This column is not legal advice and

should not be acted upon without obtaining your own legal counsel. For a

free copy of the booklet A Guide to Settlement on Your New Home, send a

self-addressed stamped envelope to Benny L. Kass, 1050 17th St. NW, Suite

1100, Washington, D.C. 20036. Contact Kass at [email protected].

LeaseOptionBusinessPlan.com

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On-Line Property Management ―Turning the average landlord into a

state of the art property manager”

When you tell people that you are a landlord, they

immediately think of clogged toilets and dealing

with tenants. Only when you have been in the

business for a while do you know what goes on

behind the scenes, and how much time and effort

it takes to keep it all straight. One simple question

will let you know just how organized you really

are. How long does it take you to do your taxes (or at least to get the infor-

mation to your accountant)? I know that a few years ago it took me till Octo-

ber to file my taxes. I was using an elaborate setup of Excel spreadsheets

with lists of tenants, income, & expenses. Soon after, I upgraded to Quick-

Books and spent weeks customizing the accounting program to work with

my rental business. This took care of the income and expenses, but the pro-

gram was not user friendly and I still needed to keep track of tenant infor-

mation. It just seemed like there should be a better way. Thus began my

search for the right property management software. I tried a number of prod-

ucts out there before stumbling upon Buildium. A web based property man-

agement software that stores all your information on a secure website that

can be accessed from anywhere. Here are the top reasons that I decided to

use Buildium in my rental business.

Track Income & Expenses for Taxes - Once I started using Buildium I

found that Buildium does everything that QuickBooks could do, and more. I

have the same chart of accounts so I can track income and expenses by cate-

gory or vendor. I can manage multiple bank accounts, and multiple property

owners (this is great if you own properties in different LLC’s, whereas with

using QuickBooks this becomes a Nightmare!). Plus Buildium will run all of

the necessary income/expense reports and produce them in PDF or Excel

formats. I am proud to say that now I could have my taxes done in a matter

of minutes not months!

Accept Rent Payments On Line - I am now able to accept online rent pay-

ments. This feature alone is worth having the program for me. My tenants

are able to log in to their tenant ledger, see exactly what they owe and then

make a payment using their checking account. This also brings up two more

great points. First, my on time rent payments have gone up significantly.

When a tenant is logged in, the first thing that they see is ―a late fee of $75

will be assessed on the 5th of the month‖. There is something about seeing

this fact in black and white every month that keeps the tenant pay on time.

Secondly, my collected late fees have gone up as well. Why…you ask. Be-

cause the late fees are automatically added to the tenants account. When the

tenant logs in on the 6th of the month, there is an extra $75 late fee, and most

of the time they go ahead and pay it. Before, they would just send in the

normal rent amount in hopes that the late fee would disappear. Then I would

have to call and remind them about it.

Track Tenants, Leases, and Rent – If you only have a few properties, then

this may not be a big deal. A simple Excel spreadsheet will probably work

for you. But once you start building up that portfolio, it is nice to have all

this information in one central place. I can access everything there is to

know about my properties and tenants from any computer, IPad, or

smartphone out there. Now I have the ability to tell a tenant when his lease is

up, or exactly how much they owe with a few swipes on my android phone.

Cost – To get more information go to the Buildium website at

www.Buildium.com. They charge a monthly fee based on the number of

units you are managing. I believe the landlord edition starts at $15 per

month. The property manager edition is $25 a month for up to 25 units and

goes up from there. There is an initial setup fee for setting up direct deposit,

plus they charge $.50 for each ACH transaction (think of the gas you saved

by not going to the bank)! They offer a free 14 day trial, which is all it takes

to get you hooked! If you are interested in signing up for their service, then

shoot me a quick email @ [email protected] and I’ll send you a

way to get a $50 credit.

These are just a few benefits that I have experienced since I started with the

Buildium software. I believe that it has transformed my business, and al-

lowed me to jump to that next level. Not only does it keep me organized, but

I am able to keep my eye on the big picture, which allows me to be more of a

real estate investor rather than a landlord. Being a landlord is great, but the

real reason we are in this business is to build wealth by investing in real

estate. I truly believe that if you are serious about being in this business, then

you need to invest in tools like this that are scalable and maximize your effi-

ciency. I am sure that there are other comparable property management soft-

ware tools out there, and I would love to hear about some of your favorites.

You can email me at [email protected].

Scott Emerick Focus Group

http://www.Buildium.com

mailto:[email protected]

mailto:[email protected]

Documents

Columbus REIA real estate investors association March 2011 newsletter