All Forum Posts by: Jeff B.

For people who only have say 10 units or less I was wondering if anyone found a

phone app like Keyme that you can take a picture of the key and the app can identify the location it matches.  This would help if you find any unlabeled keys that you have logged into the phone app inventory.  Just brainstorming with people in the profession as there has to be a better solution with todays tech.

I don't like to put the address on my keys also because of liability issues and I'm human and could lose them.  Looking for a solution for a lower inventory landlord with under 15 units, but has door keys, mailbox keys, and pool keys.

One last but very important thing I've discovered.

All Judge's want to see the original lease where the landlord and tenant(s) have signed in ink and NOT copies.  This goes for the Walk through checklist if you are attempting to collect damages when they move out.  Unfortunately that when people swear to tell the truth in court usually only one side does. 

Lastly this goes for the Judgement for Count I or II.  The clerk of court and sheriff want to see the original Judgement that is stamped and signed in ink by the Judge and Not a copy.

If anything on the form is to complicated when your attempting to file the case you can set an appointment with a lawyer at the clerk of court's office.  Be forewarned that at least in Palm Beach County they are Not their to give you legal advice on how to try the case.  They are to be used to interpret and instruct you on the filing and Rules of Court.

Sounds like you fell into the same trap I did with some past tenants.  You letting it get out of control again will usually on happen once.  The eviction process is not all that hard.

I actually like law and had people in the law library and advice found from law firms online guide me through all the proper steps.  

1.  Serve a pay or quit notice through certified mail.  Make sure to name both parties on the lease if that's how it was created.  It should include the exact wording from Florida Statue 83.56 beginning with "you are hereby notified" ending with "to wit: on or before and the date" Keep a file for all of these documents.  File the returned certified mail receipt.

2.  Do NOT accept a partial payment from them or it will delay the eviction.
Go to the courthouse and purchase the County Civil Case filing documents and pick up the Self Service Guide.

3. Make copies and save the receipt for all your collection expenses as this is the total amount of your judgment you want repaid.  You will file a County Civil Eviction Case Count I and Count II.  You want them out and your money.

4.For Affidavit of Military Status, Google Search "Verification of Military Status" Enter their SSN and full name.  Print out the results to file.

5. Fill out Count I and for Count II and file the case with the clerk of court.

6. You will need to bring multiple envelopes pre addressed to the defendants with postage.

7.  Fill out the Notice of Confidential Information sheet if applicable.

8.  Bring plenty of money or checks as you will be spending about $250 - $300 to file everything.

9.  The clerk will issue a 5 day and 20 day summons.  This will be when the tenant will have to file and mail a written response to the court case or possible face a default judgment.

10.  I usually fill out and submit the Sheriff information sheet which allows the clerk to file a Writ of Possession after Count I Possession judgment is made.  Otherwise you will be making another trip to the courthouse.  

11.  If the defendant doesn't pay all of the judgment after Count II Damages then I pay the extra money and go to sunbiz.org and record a Judgment Lien against the defendants.  This gives your lien priority over some other liens.  

12.  The interest applied to Count II damages can be found on the Florida Chief Financial Officers website and is currently 4.75% annually.  They have the formulas listed on how to apply interest to the judgment.

13.  When the case goes to trial you will need to bring a signed copy of the lease, and all the service notices on mail being delivered as to Count I and II.  All the receipts from the Clerk or Court and Sheriff for filing and serving the case.  It is important for your witness to physically be present at the trial if you served or had any interaction or altercation with the tenant.

The most important thing I find is that all of the paperwork has to be accurate and served properly.  This is not that hard.  Additionally any physical interaction you have with the tenant should be done in front of a witness you bring with you or the Sheriff.

As I mentioned this doesn't happen to often.  The next time you will serve the three day notice once they are late and know how to properly file the Eviction and Damages court case.  You have know learned that being a Landlord is like running a business and that it is nothing personal but you do NOT run a Non-Profit.

Jason,

Sorry for the miscommunication but I am answering from the OP (Original Poster) Question

"For buy and hold investors out there, how do you guys think about appreciation and how do you factor it in to your buying and selling decisions, if at all? What key factors do you use to measure the potential for appreciation and where do you find this data?"

Again I can't give you 2 - 3 years worth of investing knowledge and how to value a property and account for costs in a post.

My method is that I do NOT account for appreciation if I am flipping properties.

OP as you can see above asked about how it is factored in a buy and hold scenario.
My response is that it is more a factor to be used to calculate your Expenses rather than
how much your total return will be in two years.  In addition it can be used with your due diligence research to determine if there is additional value for a property in the future.

I guess where I differ is that with all the valuation training and experience I have a better grasp on what is undervalued compared to current FMV. Just like in stock investing.

Example I own a Samsung Phone but I spent 1/2 a day reading analyst reports, researching and completed my due diligence on Apple on 10/14 I purchased 130 shares at
100.34 then on 10/16 AAPL went down to 95.64 when I purchased 50 again on 10/27 I purchased 65 at 105.15.

What I am trying to illustrate is knowing when something is undervalued after performing your due diligence.  According to the calculation above with todays AAPL price of $118.80
is AAPL still under valued?  You can't answer that question definitively, I can use all my knowledge and resources to determine that when I bought, even though they were at three different price points that it seemed to be depressed.  AAPL is listed on the NASDAQ but also tracks the S&P.  If you review both NASDAQ and S&P for 10/8 - 10/21 it shows an Anomaly.

I can't explain my system to everyone in terms they easily understand but I can say that just like the severity of the housing bubble that you need to understand when something is undervalued (buy) and overvalued (sell).  Knowledge = reduced risks, higher profits overall.

P.S. Yes I can and Yes I will show my brokerage account purchases of the above AAPL purchases.  That is not my point it is that everyone needs to be very good at proper valuation of real estate.  For flippers I'd assume knowing what level and quality of renovations to complete to return a better profit is very important.  

@David Krulac  My quote "Appreciation is growth, and in securities investing growth is more accurately calculated one to two years out."  You are trying to use a crash that no one has seen in I don't know how long to devalue my method.  

Please follow the smart money and Google "Blackrock investing in Florida real estate"

Calculate definition "to get a general idea about the value, size, or cost of (something)"

Educated guess definition "a guess based on knowledge and experience, making it more likely to be correct"

You are asking me as a securities investor to give you a 2 - 3 year education in investing, valuing a company or property, economics, growth, business, and Algebra etc, etc. 

Time is money and I would have to charge you for this.

I'm very fortunate that the developers build communities all at once so when I run the comps for some purchases I can get an apples to apples comp.  

I am not going to divulge some of my secrets but here is an example:

Condos 1137 sq ft Jan 2013 sales,  45, 89, 87, 76400, through out the 45.

89000+ 87000 + 76400 = 252400/3 = 84133.33/1137 = 73.99 or 74 a sq ft.

Condos 1137 sq ft Dec 2013 sales, 78, 65, 58275, 75 through out the 58275.

78000 + 65000 + 75000 = 218000/3 = 72666.66/1137 = 63.91 a sq ft.

84133.33 / 72666.66 = This shows a Depreciation of 15.78% 
This shows either a declining market, a market that has not bottomed, or in this case a development that went from rental to condos with most sales from 2005 - 2007 so there are still foreclosures depressing the FMV. (Opportunity)

(If I can maintain my rent while reducing operating expenses this year I should have a higher ROI)

Condos 1137 sq ft Jan 2014 sales, 66570 , 45, 115, 92, through out the 45 and 115.

66570, 92000 = 158570/2 = 79285/1137 = 69.73 a sq ft. From Dec 2013 the prices have bottomed. (The volatility in prices is where my knowledge and living in this neighborhood helps determine the true FMV and if this is an Opportunity.) Warning this experience comes from years of knowledge from people who are smarter, more successful, and more experienced in investing than me.  So DON'T wing it ask for help if you are not experienced enough yet.

Condos 1137 sq ft Nov 2014 sales, 82, 73500, 88900.

82000 + 73500 + 88900 = 244400/3 = 81466.66/1137 = 71.65 a sq ft.

81466.66 / 79285 = This shows a Appreciation of 2.75% for through Nov 2014
But I know I only have through Nov 2014 so the Actual Appreciation will change.
Nov 2014 81466.66 / Dec 2013 72666.66 = 12.11% YOY I know it's only through Nov 2014.

FYI the surrounding neighborhood as a whole showed a 14.78% YOY for 2014.

My projected appreciation and increase in property taxes and homeowners insurance effecting operating expenses is going to be 11%.  Again I arrived at this percentage by using resources, professional insight, knowledge of investing in the securities market, and extensive knowledge of this particular community.

For a Buy and Hold investor you should understand why you need to calculate appreciation as this will effect your operating expense percent and ROI. This is when
you will need to calculate how much to raise the rent depending on the expenses your ROI requirements, and the market demand and what it will support.

JScott thank you for all your contributions as it is people smarter in the flip market like you that have educated me and allowed me to better understand real estate investing and how to properly run a successful RE business.

Sorry for the typos still early here and brains not fully awake. there = their
investing in growth

Moderator, Couldn't find the edit button, help!

I am not sure you can fairly call yourself an investor if you don't calculate appreciation.

Let me explain before I become over whelmed with responses.  I have a back ground in securities investing and to be successful or beat the market you need to determine the value of a company, the product growth potential, macroeconomics, narrow or wide economic moat, there competition and there products, resources and information from experts and analyst who are specific to that company and who's analysis you agree with.

Appreciation is growth, and in securities investing growth is more accurately calculated one to two years out.  This is the same for Real Estate.  A buy and hold investor will look at the projected appreciation more as an expense.  Home owners insurance, Real Estate property taxes, and the max level of rent that a market can support (52 week high), Operating Expenses.  This is why the wise investors keep pounding it in our heads that the profit is made mostly by the purchase price, what value you can add to the property, and the markets economic moat.  

Appreciation should always be a conservative and realistic calculation, it is not an exact science. Financial Analyst try to be accurate most of the time and review and change projections quarterly (I believe semi annual review is enough for real estate.) When we calculate sales it is common to not use the absolute highest sales price and absolute lowest sales price as we are trying to determine the FMV sales prices as an average.

I hope this explains more about why appreciation is important and how to calculate and use the projected appreciation in your buy and hold, flip, or owner occupied properties.

Post Happy Thanksgiving.  For the contributors thanks for sharing all of your helpful and wise knowledge to help us grow into more experience real estate professionals.

The key numbers that I look at are NOI or ROI and the operating expenses percentage. The next is the amount of rent I can charge to minimize vacancies. I am also fortunate to have a bunch of tenants who treat my rental as their home.

Then since the Real Estate Assessor in Palm Beach County sends the 2014 property tax bill towards the end of the year I check the home sale prices to get an average price and
percentage of increase.  Next go to the Tax Collector's office and gauge the percentage of increase.  

On a Month to Month I always send them an informative letter on how I appreciate their business, why the rent is being increased, and comparative rates from similar properties showing what a value mine is and that with all the hassles of moving it doesn't make since to go anywhere else nearby.

I have already sent out my rent increase notices since the latest sales prices that the Real Estate Assessor is going to use for next year is projected to increase.

I would sell it for the 960k and move on.  That's only 1.54% off the 975k you wanted which is a good deal for both parties.  I'd put more effort into where to invest the funds once the deal closes.  

As for the theory that other fish will eventually come along and take the bait.  It may be true but time equals money and who says the next person will see any more value in the property than the other people who have offered.  This is about money management and if you can pay down debt or invest the money for a nice return then you are a wise person.