The Worst Advice About Real Estate I've Ever Received

Hi Friends and Fellow Investors,

   They say it's good to dwell on the positive things in life, but sometimes, it's healthy to hop over to the dark-side for a bit and reflect on some of the wacky (but with good intentions) advice I've received over the years regarding Real Estate, from buying to selling to investing. I'll share some of these events chronologically so you can appreciate the time and setting in which I was the recipient of these tidbits of advice.

   Well, a little over 20 years ago, my aunt and uncle used to come over to my apartment at the time a couple of times per week, and they always found me going over the Real Estate section looking for properties. They said I probably spend too much time rsearching and seeing properties. At one point, my Aunt suggested that I should focus on work and just slow down and enjoy life. Why was that bad advice? "Slow down" is the opposite of what a 22-year old should be doing, and "enjoyment" of life is different in every person's own eyes. I worked hard through college and graduated with the equivelant of a 90-degree average to earn my Bachelors Degree. I studied ridiculous hours (ADHD - you have to really cram the information in there!), but wow, did I party, as well! I managed to work during school and sock away some good money, and just had my first home under a Rent to Own Contract, and it was addictive. So, the breaking news on that advice they gave me is that I was very proud of my achievements in school and my initial step into Real Estate Investing. Now, fast forward, and they are now aware that my days of reading the Real Estate section of the newspaper (Pre-Internet "Stone Age" Days) have led me on the path I am on. That little "hobby" of mine has been working out pretty darn good. I make sure to bring up the Real Estate market whenever I see them, as it puts a happy smile on my face. You see that? Real Estate does bring smiles!

   During the early 90's, I had been evaluating some developments in Central Florida. I had conflicting advice from some fellow investors. I was warned by some as if I was to avoid the bubonic plague to not throw a single penny into these developments. Of course, I did not heed that advice. Good thing, because a simple investment of $2050 became an equity stake of $35,000 by the mid 90's, and I cashed out. Listen to your little voice inside.

   During that same time, I did take bad advice two times, and paid the price for it. The first time, I was advised by two investors who followed the New England market very closely via publications that they ordered in those pre-Internet times. They told me to put everything behind a property in Connecticut, so I invested. As it turns out, somebody missed out that there was a toxic waste/Sewage treatment plan not far away, and the smell kept people from buying in. The place folded and the wrecking ball came in, and I kissed my investment goodbye. Needless to say, I phased out those two woodpecker investors from my circle!

   The second time, I had my eyes on a promising piece of land in Maine, in a sectio I was not at all familiar with, but the property adjacent and surrounding tripled in value over 4 years. I needed to get in touch with some local investors, and I made contact with a friend of a friend, and this fella was like a book of everything in that section of Maine. My funds were ready to invest and I was excited. He was so dead-set against this property, saying it was rocky and hard to develop, and showed me a letter from the County actually asking him to invest in it, along with his polite letter of proposal rejection he sent to them in reply. He seemed reasonable in his arguments against the property. Fast forward all of these years, and I am still quite upset with myself for that bad advice, because I missed out on a hotel and a strip-mall, and a price appreciation of more than 25x my would-be invesment! Oddly, I lost "Mr. Maine's" phone number. It's still a mystery today as to how I could have lost it.

   So, as you can see, I dodged some bullets, but got caught between the eyes with some others. I remember a friend in the industry warning me not long ago about investing in too many different states. He failed to realize that to ignore hot properties that you have people on the ground you trust to manage it for you is akin to business suicide. Locking yourself into just one market is like putting all of your money on a winning horse. Once he breaks a leg, then what?!

   Overall, as I said in the beginning, all of this advice was done with good intentions, but still, that was just some of the worst advice I've ever received about Real Estate.

   FYI, more Epson hardware is on it's way for me to review and share with the many of you who have been quite consistent in your requests. Thanks for your patience.

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Happy Thanksgiving!
Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes - Rent to Own Homes, since 2002
"Located at the Corner of Technology and Real Estate"
Rent to Own Homes and Real Estate Blog for HomeRun Homes: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com


TAGS: #realestate #maine #florida #investment #advice #newengland #developments #centralflorida #realestateinvesting

Are Homeowner Associations, or HOAs, Necessary?

Hi Folks,

   Hope you had a great weekend! Spring is coming, and many people are happy. I am personally a huge fan of cold weather, but that is rare...I know !

   Today we will explore a few sides of the HomeOwners Association, or HOA, debate. There are many folks who say that HOAs are not needed, and there are many others who strongly advocate HOAs. Let's take a step back from the drama of all of that, and see what an HOA is and see what are it's functions, advantages, and disadvantages.

   Let's start out by discussing the duties of an HOA, which, "serve some benefit such as the uniformity of appearance in a community, offering of amenities, and the maintenance of our landscaping.". says Deborah Haataja-Deratany, a Legal Liaison of an HOA. Kerri Fivecoat-Campbell, a homeowner and a blogger, expands on this and says that many HOAs, "put a limit on the size of homes that can be built in neighborhoods". John Paul Hanna, an Attorney, notes that, "California law requires that all common interest developments ("CID's) have a homeowners association, either incorporated or unincorporated. The main advantage of an HOA is that it has power to enforce".

   Sharon Van Buskirk, a Marketing Director, says that she lives in a designated Historic District in Dallas they, most definitely need" their HOA to serve as, "a concerted voice when the winds of City Hall blow afoul and threaten our unique neighborhood."

   This leads us to our next piece of the puzzle, which is the Structure and management of an HOA. "Overall, I feel that HOA's in the state of Florida are a disaster, particularly because of the intense legislative lobbying efforts from the lawyers and the insurance industry and the lack of accountability for developers, boards, and community association managers (CAM's). Boards of directors have incredible power. It is an abomination that Board members are often neophyte volunteers, charged with the significant fiduciary of being entrusted with millions of dollars in budgets, and hundred of millions of dollars in real estate, etc., often times with little or no experience in related fields", says Haataja-Deratany, who goes on to say that their, "expected or required standard of performance is minimal!". She also says that, "virtually, the only requirement is that they own property in the respective community."

   Haataja-Deratany suggests that in order to serve on an HOA board, one should be, "required to possess credentials related to this industry, much like other corporate boards in this country. Board members should also be required to have a stake in their performance on a Board (carrying E&O or comparable insurance of their own)."

   Michael Garard, with Garard Real Estate, says that where the HOAs get a, "bad rap" is from the attorneys who help oversee the board of directors. Garard says that the attorneys, "have the mind set of 'black and white' decisions, and once you let a small item get changed, then everyone else will follow the lead, so the attorneys advise to fight (very expensive to the HOA) and not to give an inch." He adds that most board of directors are typical homeowners who just want to, "help their community, they are not professional, just volunteers", and that the attorneys are paid hourly.

   Sharon Blanding, a former civil engineer who has worked on many "Planned Unit Developments", feels that any new community should be, "regulated more by HOA covenants than by city/county zoning laws.", and says that most people, "do not realize the extent of the controls and regulations most cities have on the books. Even small cities can have volumes of regulations. (I worked in San Diego and Seattle, and the controls are beyond believable. But even little towns on the outskirts could easily have 30 to 50 volumes of regulations.)". Blanding surmises that, "perhaps we could get rid of some of the excessive government controls this way. (Some of the people running HOAs are truly crazy though, and there does need to be constraints built into the original documents, similar to a constitution, that limits their powers.)"

   In regards to HOA fees, this will vary by community, and for example, Vinny Amatulli of the Foxhall Subdivision in Georgia, says that his HOA has "established a means to help with short-term and long-term budgeting process, eliminating the need for homeowner assessments. Our current dues is $600 per year and has only been raised three times in the past 16 years. I can only assume that fees vary by region, even within our local area."

   Garard points out that future resales in a community, "will come from buyers whose first impressions is of the 'look' of the subdivision, which is where the HOA and the covenants can keep up the look of the community."

   Is your home part of an HOA community? If so, did we miss out on anything that the HOA does or doesn't do? Do you think HOAs are necessary? We'd love to hear from you!

Have a Great Week, and Happy Rent-to-Owning !

Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #HOA #developer #developments

Revival and the Life Cycle of Neighborhoods

Good Morning Everyone,


   Hope you're all having a great week. Things are just soggy and humid here in New York, and we eagerly await the return of the sun. Sounds like a great title for a book!

   On the topic of water, it's amazing how towns and neighborhoods go through revivals and declines. We are about 1 mile from the town lake, which back in the 1950's, was the hot spot for people who lived in the city (about 50 miles out). It was the perfect spot to escape the heat without making the trek the rest of the way to the Hamptons.

   Somewhere back a bunch of years ago, the immediate area surrounding the lake began to decline, with the homes and properties falling into disrepair, and the quality of that little area diminished. However, due to some fantastic community efforts, that area is now on an upswing. There were some unoccupied, older-style mobile homes that were in horrendous shape, and these have been torn down for some new lake home developments. In addition, there have been a few incredible new playgrounds that were built (we frequent them with our toddler, so we have become "playground connoisseurs").

   The point that I'm trying to make is that we have seen all of this change within the past 5 years, during one of the worst recessions that most of us have ever seen. Sometimes, the life-cycle of towns, neighborhoods, and communities can operate independently of the greater economy.

   May this be your inspiration for today; no matter what the bigger picture may dictate, be strong, push forward, and keep your ultimate goal in mind, as long as it is ethical.

   We would like to start a new feature here on our blog, since we have had a few people ask us about it, so we are definitely considering it. So, do you have a property you'd like us to feature here? If so, E-mail us at homebuyer@leasebuy.com with the Subject Line, "Feature My Property on Your Blog"

Have a Great Day, and Happy Rent-to-Owning !!