Friday, July 27, 2012

Repairing Holes in Drywall

         Since becoming a landlord we have decided to manage the property ourselves, and with that comes the responsibility to make any needed repairs. The best time that we have found to make those repairs is during the transition period between old tenants leaving and new tenants arriving. So during this last transition we wanted to repair a few holes in the walls before painting.
         Because I'm attempting to start a YouTube Channel I would like to share this video with everyone on how to repair holes in drywall. I hope you find it useful if you ever have to fix any holes in your own walls:

Thursday, July 26, 2012

Anything to Save a Buck!

So I recently called Provo City Power to talk to them about an issue with one of our electrical bills at the house. After resolving the issue the representative asked me if I had recycling cans located at our rental. I told her that I had previously opted out of having Provo’s recycling cans because they were $4.00/month, and we have three units, so that would be $12.00/month for recycling cans.

An additional incentive Provo offers to for those who have recycling cans is a $2.00/month discount on their garbage bill. A net savings of $2.00/month per recycling can. So if we were to get three cans it would be a savings of $6.00/month, but we would have to pay $12.00/month to get that savings. Either way we looked at it, we decided to opt out.

After explaining why we decided not to have recycling cans she told me that they could give us just one can for the whole house at $4.00/month, and still give us the $2.00 discount for each of the three garbage cans we pay for each month. That’s a discount of $6.00/month with the added expense of only $4.00/month.

No Brainer.

We decided to get the one recycling can delivered to our house, and we are basically getting paid $2.00/month to have it. Score!

I know it’s only two measly bucks, but it’s a savings nonetheless. Win, win, win!

Friday, July 13, 2012

Finding the Right Realtor

         When we first started looking for our house, we would just call up the #’s on for sale signs and get in touch with whatever realtor was listing the property. We visited homes with 2 or 3 different realtors before settling to work with just one of them.

Here are some of the reasons we chose the realtor that we did:
  1. He was very knowledgeable of the area we were looking
  2. He knew the names of all the apartment complexes and where they were located in that area
  3. He knew average rents that tenants pay for certain types of properties
  4. He was aware of new developments in the area that might affect tenant demand and rents
  5. He was aware of other properties that recently sold in the area
  6. He helped us realize all of the different expenses that we might incur from buying a property
  7. He worked with us as first time home buyers to educate us on what we didn’t know
  8. He was willing to work around our schedule when visiting homes
  9. He was patient with our many questions
  10. He was likeable and friendly
Other things we liked as we worked with him:
  1. He used the electronic signing company for all interactions with the seller. This made it super easy to sign documents from wherever, without having to print, sign, scan, and send paper documents.
  2. He helped us get an extra $500 from the seller for a one year home warranty, and he helped us get the seller to pay all closing costs.
One thing we did not like:
  1. We wished he would have been more aggressive with negotiating the price of the home. We were newbies in the real estate negotiating department, and the only home buying experience we had was from watching HGTV’s House Hunters. We felt like we should have come in a little lower with the initial offer, but he felt like we shouldn’t go so low. We naively listened to him, and the seller stuck to their guns with the asking price. Dumb! It was still an alright deal, but looking back we feel like we could have negotiated that better. In all reality, realtors have a conflict of interest when working with buyers. Realtors get paid more if the house sells for more, so we quickly learned that we will never let a realtor influence how we negotiate the price of a home. We will stick to our guns next time!

Tuesday, July 10, 2012

Pre-Approved vs. Pre-Qualified

As a student going to BYU, I wanted to get into real estate, but my income while attending school was far from being sufficient to buy a home the conventional way by applying for a loan. So I had to wait until I graduated in 2011 and got a full-time job to be able to get serious about buying my first rental.
...Now, I realize there are other creative methods out there to buy a home, and I am constantly trying to learn more about these methods, but the one I understood the most when I graduated was to apply for a loan through a mortgage company. And that’s the road we took.
So in the process of applying for a loan and finding the right house to buy, we learned that we had to know the difference between Pre-Approval and Pre-Qualification.

Pre-Qualification: A verbal statement from your loan officer telling you how big of a loan you can qualify for based on how much debt you have and how much income you make. The loan officer will ask you for ALL of your monthly expenses, as well as how much money you bring in each month. The lower your debt/income ratio, the more you will “verbally” be approved for.

Pre-Approval: A physical statement from your loan officer saying how big of a loan you actually qualify for based on your actual debt and actual income determined from a credit check. The loan officer will ask you for your social security # and run a credit check. This way he will determine exactly how much of a house you can buy. The lower your debt/income ratio, the more you will “actually” be approved for.

This information was helpful for us to know when started searching for homes. I would say it's okay to just go with the Pre-Qualification in the beginning, but as you start to get more serious about finding the right home for you then you have to go through the Pre-Approval process. I was a little hesitant at first to go through the credit check, because this was my first time going through the whole home buying process, but to tell you the was pretty painless. It was also helpful for our realtor to know that we could "actually" be approved for a loan if we ended up finding a house we liked. The last thing a realtor wants to do is waste his or her time showing homes we can't buy.