All Forum Posts by: Jared Anderson

Another user, @Justin B., just posted this article, it's a good read on where our residential housing market is and what you are touching on:

http://charleshughsmith.blogspot.com/2014/01/after-seven-lean-years-part-1-us.html

I would keep in mind when buying real estate your purchase is a potential "hedge" against the risks you're talking about.

This is what I mean by a hedge: When inflation occurs, products cost more because the currency is not worth as much. For example, $.10 used to buy a burger, now it costs $1.00 to $6.00. This is because of inflation. Look at a house just like a truck load of goods: gasoline used to build it, wood, windows, materials, glue, nails, shingles, etc. If inflation occurs the cost of ALL THESE GOODS goes up and subsequently so does your house. When I look at long term investments I am looking for these areas of gain:

1. Appreciation (This typically ties to your land value. Several factors drive this value: scarcity is the greatest, thus location is the key).
2. Cash flow
3. Principal paid down (your tenants pay off the mortgage).
4. Hedge against inflation (your property price inflates with the economy, not just the cash you used.)
5. Purchase at a discount.

Maybe I am speaking to what you are getting at?

Your county most likely "re-appraised" your property. This occurs on a regular basis in each county; typically it's every 4-6 years. Call your county assessor and find out if and when that occurred. If you find that comps from your agent show a lower value, you should be able to appeal your value for a reduction in your taxes. Ask your county assessor's office about this as well. Make sure you use comps that aren't short-sales, REO, or distressed. Your county assessor will look at arm's length sales; and if you don't use arm's length sales you could end up raising your taxes if non-distressed comps are actually higher than your assessment.

My initial thought is if you are going to be holding for 20 years, then it's always a good time to buy with the right numbers.

Speculating where the market will be in 12-24 months is the most difficult question. From my perspective on the market there are several factors that recently occurred which will influence the market:

1. Dodd-Frank is changing it's affects on the market (This includes many loan related laws).
2. Mortgage Brokers were just handed a whole new batch of regulations through Fannie Mae, effective Jan. 1 (It's become more strict/difficult to get loans in some cases).
3. FHA just scaled back their loan limits. (This will limit buying power in some cases)
4. Bernanke is talking like quantitative easing is ending (This is what has been keeping the interest rates so artificially low).

With all of these major changes in the air it's hard to predict. I do know that once you limit borrowing resources for buyers, prices go down. I also know that when mortgage rates go up, prices go down. It looks like to me we will have both of these events occurring in the next 3 years.

If you know somebody who's had a recent full appraisal in the market ask to look at it. There will be a form in the report called "Market Conditions Addendum to the Appraisal Report" (aka 1004MC). There is a line of information reported on that form which shows "Median sale price as % of list price." I attached a sample 1004MC showing where you should look (the report is from a relatively healthy market in UT). OR If you are comfortable crunching your own numbers obtain a stack of comps and see what people are closing prices at versus the list price.

I would check with your State Division of Real Estate before picking an online school. I know in Utah each educator has to be approved for the classes to be accepted by the state at registration.

Once you've done that, check with McKissock or similar websites. I've used several different ones. I know that you can either find discount codes online or sweet talk the sales people in to lowering their prices. Good luck!

Galaxy Note 3 or 2 or 1. Hands down the best phones I have ever owned for work. Features that I use frequently: pen window, scrap booker.

You could always try using a proxy website when at work.

Are you talking tax assessed value? If you are talking tax value then I have a few reasons this could have happened:

1) An owner could have appealed their tax value due to market decline. I have completed tax appeals for people and helped them hack a large percentage of their taxes off because of a lower value.

2) A new owner actually bought it for $19,000 and the county picked up that number from the transaction.

3) The county could have re-assessed all the properties in 2012. The flip side with re-evaluating is they adjust the tax rate too so owners taxes are pretty similar to the year before. You could ask the seller what taxes they paid in 2011 versus 2012.

If it was me, I would bring it up and get to the bottom of it. What do your sales comparables report for tax amounts versus your deal?

A condo can be a pretty turn-key rental. You don't have to worry about exterior maintenance, mowing, exterior insurance, roofs, and possibly utilities. Here are some things you will want to know about the HOA you are buying into:

1. Does the HOA restrict to a certain percentage of rental units? or require permits? (They do this to maintain FHA approval)

2. What does the HOA fee cover? Water? Cable? Garbage? Gym? Pool?

3. What type of ownership is the property? Is the project a PUD or a Condo? (This may have implications on your financing)

4. Is the project FHA approved? (Because Condo's tend to be a first-time buyer property, a lot of the buyers use FHA financing. This could potentially limit your buying pool when you go to sell the property, if it's not FHA approved.)

If you want to know about cash flow, find units renting in the same or nearby projects and work backwards with the financing or funds you are using and the HOA fee. Check with the HOA and see if there are any upcoming or recent assessments for repairs; such as resurfacing parking lots, fixing the pool, roofs etc.

I've never read such a long, painful, and discouraging thread before. This sounds like my divorce that took 4 years to resolve. Haha!

Hold fast @Will Barnard ! Persistence, patience and traveling the moral high road will always be better in the end.