Short Sales - What Do You Need to Know?

Hi All,


   Happy Wednesday to you. In keeping with our promise to tackle every topic you threw at us a few weeks back in that now "famous" Blog Post, today we are going to discuss some tips and strategies when pursuing Short Sales.

   A conversation about Short Sales would be incomplete without looking at it from two viewpoints: that of the Buyer (Broker or Investor), and that of the Seller (The Homeowner), and we have spoken with a few experts in the field who will discuss both viewpoints.

   First, we will examine things from the vantage point of the homeowner (the Seller). Geena Becker, of Geena & Company/William Raveis Real Estate & Home Services reminds us that the credit score is bruised on a short sale vs a foreclosure - "whereas foreclosure your credit score is driven down 200 points and banks will loan money to a bankruptcy victim before they loan to a foreclosed victim.". Becker also states that the banks pay for the attorney, realtor commissions, and back taxes, but will, "not pay any liens on the property. Those liens have to be negotiated OFF before the approval."

   In addition, Allan S. Glass, President of ASG Real Estate Inc. adds that, "The bank is settling a bad debt. Anything and everything they can extract from you regarding financial information will be used to that end, there are no casual off the record conversations with the banks while they are collecting your debt". Glass warns that you need to make sure you are working with an expert in the field of short sales, and that, "not every agent/broker is created equal and there is a learned skill to negotiating a debt settlement."

   Glass also provides additional pointers, such as to never pay any fee under any circumstance up front ! ("Professional agents will not charge until they are successful in completing your short sale or modification"). Further, he says that you should never sign over title to an investor who will then negotiate with the banks, as you do not need to sign over title to your home to be helped with a short sale. Finally, Glass reminds us that investors who help you with short sales are attempting to buy your home for a discount in order to make a profit, and that, "Not that anything is wrong with that when reasonable, however make sure you ask what happens if they cannot negotiate a purchase price low enough for them to invest."

   From the Buyers point of view (broker or investor), Becker provides some important pointers:
   1. You Will be buying "as is"
   2. You may be subject to more than one banks approval
   3. The Buyer won't know if the seller's loan was an FNMA (takes longer).
   4. If seller has it in their contract to make it subject to not receiving a deficiency judgment tied with short sale appraisal - there is a 50/50 shot of getting that wish.

   Further, she says that she will, "always find out if the mortgage they are late on was their mortgage that they first had when they bought the house. If so, nationally the bank CAN NOT go after the sellers with a deficiency note or promissory note on the difference. With the bank knowing it can come into play in a short sale negotiation since they know they can't come after the seller or borrower for the deficiency. If they have re-fi'd meaning it was not the "original" mortgage they will not have that slam dunk protection."

   Glass also provides some pointers in reminding us that, "the banks are motivated by values. They will do a short sale if they make more money by doing so compared to completing the foreclosure process", and that, "the bank and the seller are NOT working together to get the highest price from the buyer." Glass tells us that the best strategy is, "for the seller and buyer to work as a team to deliver the best value to the bank.". He warns that you must, "understand the numbers (as a broker or investor) and have a strong understanding of market value. Compare what the bank will net as a short sale vs. foreclosure / REO sale".

   As for timing, Glass says that it is key to, "follow up, follow up, follow up. If you are not following up the bank is not working on your file!", and Becker suggests that you make sure the buyer is very clear that this will not be a normal closing time frame, and that the buyer has to be able to, "wait without having to move in." and tells us, "I have had a lot of short sales last year especially where the buyers walk 1/2 way through my negotiating process and I have to start all over again. The buyer's agent must get it through to their clients that they can not be in a hurry. Good deals come to those who wait..."

   This is good sound advice from some seasoned Short Sales Professionals. Do you have any additional tips to share with our readers? We welcome your comments below.

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

To Buy at Your Best, Get Creative (Rent to Own)

Hi Folks,
   Just a quick "Hello", and to let you know that we were just quoted in a great article in a new American Express Magazine ("Currency"):

The following excerpts are from this new article:

"Markets known for rich foreclosure shopping are also ripe for those willing to rent before they buy, says Rob Eisenstein, president of rent-to-own marketplace operator HomeRun Homes..."

"It's a great strategy for potential buyers with less-than-perfect credit or insufficient savings, Eisenstein says: While you navigate the lease period, you can build credit and equity at the same time"

Additionally, we were quoted as calling rent-to-own agreements, "creative real-estate at its finest."

   Head on over to their website (located at http://getcurrency.com/article/to-buy-at-your-best-get-creative) to read the full story

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

New Widget with Scrolling Ads from our Site

Good Morning Everyone,


   We hope you have all had a great weekend.

   OK, so once again, we are referring to that "Magical Blog Post", where we asked for your input, and you gave it to us. Over the past few Blog posts, we have already addressed The Top Real Estate Investing Markets, What You Need to Know in Real Estate Investing, The Top 5 Things NOT TO DO When Selling a Home, and What You Need to Know when Buying a Foreclosure.

   Today, we are giving you access to a Free "Widget", which is a piece of code that you can add to your website or Blog, and it will continuously scroll with the latest Buyer and Seller Ads from our website (See Below). The Widget and the Code are shown below as follows:

WIDGET CODE:

   Once the code is inserted into your Web Page or Blog, it will look something like the image on top of this Blog Post.

   If you have any questions on how to use the code or any additional questions, please let us know via commenting on this post.

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

UPDATED: Buying a Foreclosure? This is a Must Read...

Hello Everyone,

Welcome to Friday !

We have been receiving a lot of questions about foreclosures from people who are asking us specific questions on how the foreclosure market works. In order to paint the best picture for you, we have spoken with some of our peers who are active in the foreclosure property marketplace in one function or another.

Sheriff Sale guru Marc Sherby uses a 10-point checklist to tackle all aspects of purchasing a foreclosure home. His Process is as follows:

1. Do Your Homework (research the liens, mortgages, comps, bid price, etc. before going to the auction). NEVER bid on a property without doing this first. Joanne Cleaver of ForSaleByOwner.com says that it is important to, "Understand the micro-economics of the neighborhood. On some blocks, a foreclosure is an exception. On others, it's the rule. This affects your ability to quickly get good comps when you've fixed up the foreclosure and are trying to resell; this also affects its marketability as a rental." Additionally, Jan Green, an Arizona Realtor, suggests to, "check the health of the Home Owners Association (HOA)" (if applicable), and to, "Check the date of the last reserve study that was done in the HOA, making sure it was within the last year if not 6 months. A lot can change in 6 months in a neighborhood. If it was 1 year, then check the number of foreclosures currently in the neighborhood and ask if more than 10 - 15% are overdue in paying, another hint." She also suggests checking to see if, "there is an Environmental Report available that will disclose information the surrounding area for airports, landfills, soil conditions or other abnormal findings that could pop up."

Alfred Miller President, Private Lending Solutions, LLC, adds that it is important to know, "how long it takes to sell a home in your price bracket", to, "study the sale prices of comparable homes in your area.", and to remember that, "the sale is for the home as is."

2. Set up your support team (real estate attorney, accountant, realtor, Title Company, contractors, insurance agent and so on). Find people you are comfortable working with. Miller concurs, and suggests that you, "Find an agent specializing in foreclosures."

3. Learn the rules for your particular area FIRST. Rules and “conditions of sale” are different for each county and for different types of sales. You can obtain a copy of these rules the Sheriff or auctioneer. Green, who works in the Hot Arizona market, states that, "The deed issued in Arizona for REO's is a "Special Warranty Deed" and not a "Warranty Deed" that is the typical deed in a regular sale. Why is this important? There is no title coverage for past problems with the title prior to the bank taking ownership of the home. And always always buy title insurance to cover the transaction against any liens on the property, no matter the type of financing used to purchase the home." Know your market !

4. Get the list of auction properties. In most cases depending on your area, you can obtain the list of properties going to auction for free. If the sheriff or auctioneer has a website many times the lists are also posted on them.

5. Line up your funds BEFOREHAND. In most cases you will not be able to obtain a traditional mortgage beforehand to pay for the property. This is one thing many people do not realize. Cleaver agrees, and suggests to, "Have lots of cash. Banks will negotiate a little, but they will mainly listen if your money talks loudly.", as well as Miller, who suggests that you get, "Get pre-approved for a mortgage."

6. Go look at the property (before you bid), and try and determine if it is occupied or unoccupied. Green suggests that you, "Knock on neighbors' doors to ask for details about the area. Neighbors can be your best source of information about a neighborhood and can provide the names of others serving on the HOA board.", and Cleave similarly says that you should, "Get neighbors on your side. They are well aware that the foreclosure next door has eroded the value of their own property. Position yourself as as hero, not as a bottom feeder."

7. Know how to bid. Bidding is a psychological game as well as numbers game.

8. Have a plan. What type of property are you looking for and where? Is the area up and coming or in decline? Are you buying as your own personal residence, as a rental, or to rehab and flip? If it’s a flip, what type of buyer will you be looking for? How much money and time can you commit to this project? Know these answers ahead of time because as the old saying goes “those who fail to plan, plan to fail.”

9. “Sit on your hands.” Begin by attending several sales and just watch what goes on. Most sales happen very quickly, usually in just a matter of minutes, so you’ll need to pay close attention. See who the players are and take lots of notes.

10. Get Educated. Many of the people you will be bidding against are auction pros and you’ll need to become one yourself. Reading books, attending training seminars, joining local real estate investing groups, or finding a mentor are just some of the ways you can educate yourself. Additionally, you can check out, "Will It Work In My Town" for some good suggestions, as well.

Green has some additional tips that will be of huge help:

1. Always change the locks immediately upon purchase. REO homes are oftentimes on master keys for other homes in your area. If a home will be vacant for some time, get a security system as the home has a history of being vacant. If it has a pool, make sure it's maintained weekly. Check any other systems around the house to make sure they are being maintained. This way you'll maintain your equipment and have activity at the home.

2. Purchase a home warranty from a company that will cover pre-existing conditions ("hidden defects") for foreclosures.

3. Obtain a very thorough home inspection by a licensed contractor (verify the inspector is licensed, bonded and insured - Lots of home inspectors are not renewing their state licenses in this economy).

4. Check under every sink and water source for past water leaks. If there were leaks and you're still interested in purchasing the home, get a MOLD inspection.

Do you have any additional tips that will help our readers? Please feel free to comment here and let us know.

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




UPDATED: Top 5 Blog post for 2010 (For more information, CLICK HERE)

Top 5 Things NOT TO DO When Selling a Home

Hi Everyone,


Hope you're having a great week thus far.

Quite often, we hear from people who have had their home on the market for 6+ months, and true, the market is bad, but when they send over the photos for their Ad, it sometimes can raise some Red Flags.

So, our lesson for today is, "Ask before doing !".

Before you paint a wall, do infrastructure, or anything else to a home that you are selling, ask an agent, an appraiser or someone who can give you advice.

This list of the Top 5 things NOT to do when selling a home falls into two categories, which are "Bad Decisions" and "Inept Craftsmanship", and the following items will criss-cross both of these categories:

1. Do Not Paint your walls Red, Green, or some other flamboyant Color. A fresh coat of white paint will freshen up the walls and give off that nice new paint smell.

2. Do Not Put up wallpaper or paneling, unless you are filming a Brady Bunch Sequel.

3. Do Not paint over wallpaper. Remove it first using one of the many products that are out there, but do it professionally or you will wind up with lumpy walls.

4. Do Not undertake any infrastructure jobs that you cannot complete. Once you open a wall to do wiring, it needs to be Spackled, and once again, you need to avoid "lumpy wall"

5. Do Not invite "Huge-bush-asaurus", in other words, do not plant trees and shrubs that block the front of your home and windows. People are leaning towards the more well-manicured look of homes/landscaping, so don't hide behind a tree!

If you follow these tips, you should be steps ahead of the game. If you have followed these rules and you still are sitting and waiting for a sale, re-examine your pricing, and don't rule out a creative idea to sell your home, such as Rent to Own.

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

New to Real Estate Investing? What You Need to Know...

Hi Everyone,

Hope you had a great weekend.

With the market in a state of suspended animation, and with people either out of work and/or clinging on to their job by a thread due to the economy, many people are looking for additional sources of income. Some people might hop onto the Multi-Level Marketing programs that are out there, and some others are diligently looking for opportunities.

There is a fair amount of people who look towards real estate investing, and they want to buy and flip homes, which is basically purchasing the home, fixing it up, and selling it for a profit. Folks, let me tell you this...it's not easy! I am one of these people who, back in 2002, was looking for additional income, when a group of friends told me that they were investing in Central Florida. I took that as my cue and was down in the Sunshine State the following weekend.

We purchased a few homes, but turning these homes around was hard, even in a good housing market. We struggled, and it was very difficult. Things finally turned out well, and I left a job at a Nationwide Corporation in which I was a Computer Engineer. This was a good thing, however, we found it more and more difficult to find people for our homes (this is how HomeRun Homes was born, but that is another topic).

What can I suggest to a "newbie", or someone that is new to Real Estate investing ? Research, Research, and then Research again. You must chose the location to focus on, and research the heck out of how the state and the county works. Do you need an attorney? A Title Company? What is legal and what is not legal? These definitions differ from place to place, so you need to research and do your homework.

We have summarized some very important items regarding investing in Real Estate at THIS LINK, and this should give you a great foundation so you can get out there, make offers, and close deals!!

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

UPDATED: Right Time to Buy? Top Real Estate Investing Markets

Good Morning,


Happy Friday! With the dreaded humidity taking a swan dive here in New York, it should make for a nice and dry weekend...finally !

As we discussed on Wednesday, we had a ton of requests for us to discuss the hottest markets for Real Estate investments. Keep in mind that these requests were NOT for the hottest housing markets for the standard property buyer, however, for the top Real Estate investing markets.

We warn you - this is a long post - but there is valuable information here !

We have turned to some experts in their given regions, and we have summarized these markets below. However, keep in kind that they are not in any specific order, and we would need to compare apples to apples in order to put them in top to bottom order, which for our purposes here, is outside of the scope of this Blog post. However, some corroborating reasons are given along with each city/region listed below.

Detroit: We had two experts weigh in on the Motor City. Dennis Fassett, a local investor, tells us that, "Nice brick houses in the suburbs with three bedrooms, basements, appliances, garages, and fenced yards can be bought for $40-50,000 or even less in some cases depending on the area. And the properties I have bought like that rent for $1000 per month and up. The ROI is off the charts.". Fassett says that he currently has, "11 houses and 43 apartment units here, and two more deals in process, and I'm looking to buy as much as I can while the market stays depressed."

Drew Sygit of The Lending Edge at First Michigan Bank , concurs, and states that, "Detroit the city is pretty hot. Meeting today with an Australian CPA who's clients all want to buy $30-50k properties they can rent for $900/month. We've got more foreign demand than domestic!"

Memphis: We spoke with Ryan L. Hinricher, a Senior Housing Analyst with Investor Nation, and he said that, "In Memphis an investor who's looking for income property can purchase pristine investment homes at or near median home prices of $115,000, which offer a positive cash flow, or properties as low as $5000 in areas typically higher in crime and lower in income for section 8 rental purposes". Hinricher also reminds us that, "Memphis was recently named one of the 5 best housing markets for 2010 by MSN, Realty Tracs best places to find a foreclosure in 2010, US News and World Reports #1 place for real estate steals in 2010, and Smart Moneys 5 markets expected to fare best in 2010. This is primarily because the transportation industry is one of the first to lead an economic recovery.".

Orlando: Phil Peachey, a Realtor with Regal Real Estate Professionals in Orlando, Florida, says that, "I have apartments at present at $20,000 and 4 bed 3 bath homes with pools near Disney for $100,000. These were 3 times the price a couple of years back.", and that, "Savvy investors are snapping these up in large numbers as they know the market has to come back at some time". I have to concur, as we got our start in the Orlando/Central Florida market, and that seems like a perpetually favored region.

St. Louis: Adam Kruse, a St. Louis Realtor of The Hermann London Group, advises that a lot of the investors are making their own rules on the purchase criteria in that city. Kruse says that, "There are areas of St. Louis where people just don't really buy as primary residence, but they buy them all the time to hold for rental",and says that he has a client who advises him to, "Take the purchase price, subtract off the last 2 zeros, double that number, and I want to be able to get that for rent.", and that they have helped him buy at least 15 places with that criteria. (example: purchase price $35,000, rent amount $700+ per month.)

California: Griff Straw, President of Solidifi, a technology-based appraisal management company, tell us that in California, "Coastal areas continue to offer good opportunities for investors, especially in California, where San Diego has been among the strongest areas in the country. The more remote coastal areas like Oxnard, north of Los Angeles, are less of a sure thing for shorter term appreciation, but may offer potential.

Some Additional Areas that show promise for the Real Estate investor have been identified by Alfred Miller President of Private Lending Solutions, LLC. Miller has, "identified the discount and cash flow properties as well. These are investor friendly markets". The markets he mentioned are Dallas-Fort Worth-Arlington (Texas), Houston (Texas), Tulsa (Oklahoma), San Antonio (Texas), Salt Lake City (Utah), Phoenix (Arizona), Indianapolis-Carmel (Indiana), Denver-Aurora (Colorado), Oklahoma City (Oklahoma), and Charlotte-Gastonia-Concord (North Carolina/South Carolina)

We hope that this list will be of significant help to you. We welcome your comments on any and all of the cities mentioned above.

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


UPDATED: Top 5 Blog post for 2010 (For more information, CLICK HERE)

Construction and Home Sales Down...Is the Sky Falling?

Hi Everyone,


   Thanks for the overwhelming response to our post on Monday, and by a landslide, you have told us that you want to hear more about Real Estate Investing and the hottest markets. We hear you and we listen to you. Later on this week, we will be doing a piece on this very subject. Thank you, and we hope you enjoy all of your HomeRun Homes/Lease2Buy.com goodies that you received for your input. Enjoy !

   We had some housing numbers come out on Monday and Tuesday. The first set of numbers, pertaining to construction spending, showed these numbers slightly above the revised May estimate, however, 7.9% below the June 2009 Estimate. It's a huge difference, and we are all seeing it happen (or "not" happen).

   Pending home sales were released yesterday, and these also came down as well (in comparison with the Spring when the tax credit was applicable for home buyers).

   With all of these gloomy numbers, there are some gems out there. As mentioned earlier, we will discuss these real estate investing markets in our next post.

   The sky is not falling. Don't feed into that hype or it will take longer to recover. Keep your head up and keep your mind in the game.

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

Commercial Real Estate...and We Need Your Input !

Hi Everyone,


   Hope you had a nice and peaceful weekend. As for me, having a toddler, the word "peaceful" does not exist !

   We wanted to announce a few new things currently and on the horizon. First, we have created a new RSS Feed with all of our Press Releases, that covers our news, press and media, regarding rent to own and real estate in general. It is freely available at this link

   Next, for those of you who have placed your buildings, stores, apartments, and land available Ads in the "Homes Available" Section, please note that your exposure would be much better in the Commercial Real Estate section. Please let us know if you would like your Ads moved over to the Commercial Property section.

   Now, we want to turn things over to you, and we have a few questions. For all of those who respond via comments on this Blog or via E-mail, we will send you a small token of our appreciation (please provide your E-mail address along with your correspondence).

Question #1: Would you be interested in seeing additional countries added to the website? If so, which ones and why?
Question #2: Are there any Social Networks that you would like to see us on that we are NOT on currently?
Question #3: What other topics would you like to see discussed on our Blog? Please be specific.

   As mentioned above: If you answer any (or all) of the above either via comments on this Blog OR via E-mail, along with your E-mail reply address, we will send you over a small token of our appreciation.

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

Will the Housing Market Recover?

Welcome to Friday!


   Can it possibly be August? It certainly is, and folks, we are still in the midst of a housing crisis. Yes, I used the word, "crisis". There are definitely markets showing signs of recovery, as we have discussed in a previous post (http://www.blogging.lease2buy.com/2010/06/foreclosure-preventionimproved-housing.html), however, the rest of the market is struggling.

   An article recently cited the "6 Reasons the Housing Market Hasn't Recovered" (with credit to Luke Mullins of U.S. News and World Report), and the reasons were:

1) Labor market
2) Household formation
3) Foreclosures
4) Tight credit
5) Falling home prices
6) Selling your other home

   Two of these I found very interesting, and the first being "Household Formation". This is an angle that I personally have never thought about before, and might I add that it is a very good observation. What the author is saying is that basically, people cannot afford to branch out and purchase a home. People have fallen on hard times, and some have moved in with friends and family. Some couples who are looking to get married and purchase a home are perhaps holding off and staying in their rented apartment until things recover. Overall, a very good observation.

   The other point was that of, "Selling your other home". This has always been a problem, but is amplified during a market with falling housing prices, coupled with falling credit scores and income (or lack thereof). When you need to sell your home before you are able to purchase a new home, this takes it's toll. People are always looking to up size, downsize, or need to sell since they are moving. As we are seeing creative real estate options becoming more mainstream, such as Rent to Own (See our recent Blog post on this: http://www.blogging.lease2buy.com/2010/06/rent-to-own-transactions-move-into.html ), this will hopefully mitigate this factor from inhibiting our recovery.

   In keeping with our discussion, next week, there will be some important numbers released, which are the Construction Spending figures on Monday, and the Pending Home Sales Index numbers on Tuesday. Let's keep any eye on these together.

   Do you have any gripes about this market? What are your thoughts?

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

Toxic Asset Fraud...Does it Upset You?

Good Morning Everyone,


   I hope you're having a great week ! Thank you for your comments on our 3-part series on the home-building process, and to those of you who have asked about turning a pre-built home into a Rent to Own arrangement, we mentioned in our last part of the series that, "...there are many builders who build homes and will then Rent them with an Option to Buy (Rent to Own Homes), so it requires a little bit of homework on your end to find these builders." It will be on a hit and miss basis, but for those builders that read our Blog, please feel free to raise your hand if you would be amenable to a Rent to Own on your properties.

   The other day, I heard an insane story on NPR (Public Radio), about an investigation that was done by the Sarasota Herald-Tribune, where they looked at 19 Million Real Estate Transactions in Florida and found that, "...more than 50,000 Florida properties flipped under suspicious circumstances from 2000 through 2008", and they commented that, "Those flips artificially drove up housing prices and tax bills and contributed to the crush of foreclosures".

   NPR took a closer look at this investigation and purchased a piece of the bonds that are backed by these "toxic assets", and with the help of the Herald-Tribune (and reporter Michael Braga), they were able to see some of the people behind their toxic purchase (as part of those 50,000+ suspicious deals). This massive amount of suspicious deals included one attorney who defaulted on 5 loans totaling 3.6 Million dollars! Additionally, some of the other loans were tied into a group of investors who lied to banks to get loans. Overall, it was a frightening glimpse of what was going on under our noses.

   Can this happen again? We certainly hope not. But mankind is funny; there is good and bad. The bad are always finding new loopholes and ways to get around the rules. So it takes diligence and we need to always keep fresh in our memory the disaster these people have caused, the homes that have been lost, the livelihoods that have been lost. This has changed the Socio-Economic landscape for everyone for a long time to come. OK, time for the punishment to be be handed out ! We welcome your comments and thoughts, since this is a hot-button topic that irritates a lot of people (like myself)...

   Side Note: The full copy of our past few months of Blog Posts is available to download for Free ! You can use the following link (CLICK HERE) to download and save your copy today (it is in .pdf format). Enjoy !

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

Homeowners who Built their Own Home, Part 3 of 3

Good Morning,


   Welcome back. Hope your weekend went well. Aside from some painfully stifling humidity here in the Northeast and some massive storms, it was nice to get together with some family (and to take shelter when the storms hit !)

   Today, we will be completing the final installment on our series on the Home-building process, and we will be hearing from some people who have gone through the process of building their own home. This will provide some valuable insight and tips from people who have already gone through the process, from start to finish.

   We spoke with a couple of homeowners who built their own home. One of the people that we spoke with and who built her own home in Washington State is K.S.Brooks, who is also an author, and we also spoke with Richard Keycon, who built his own home in East Central Alabama.

   Brooks suggests getting to know all of the "local building permit requirements before you buy your parcel and start your project.", as counties usually have different requirements, and that it is important to know the Building Department Inspectors and Coordinators.

   Keycon adds that once you identify the area, you need to find a land agent, and drive around to see every part of the property. They were looking for a very specific parcel, with about "20-30 acres, not many neighbors, a creek, maybe a pond or pond site, and a good building site." Once they settled on the property and purchased it, they asked their land agent and some locals to recommend a builder. Once they selected the builder, they agreed on the building fee, and moved forward from that point.

   The entire process involves a lot of work, as Brooks states, and she says that you should, "Be prepared to be at the house every day either working on or managing the project." and to "take responsibility" for it. She also said to never use the response, "whatever you think is best" when the builder ask you to make choices.

   Both Brooks and Keycon both agree that you need to do your research and comparison shop well in advance, since some items require lead-time for delivery, i.e appliances, counter tops, plumbing fixtures, lighting fixtures, windows, doors, etc.

   As far as environmental impact, Brooks summarizes it as, "Lean towards green, but don't be over-zealous.", and gives us this specific example, "We explored installing a Geo-thermal heating/cooling system for our SIP (structural insulated panel) home. Because SIPs are air tight and incredibly efficient, and with the low cost of hydro-powered electricity in Eastern Washington, it would have taken us 20 years to reap a return-on-investment for Geo-thermal. Instead, we went with a high-efficiency wood burning fireplace, with standard HVAC as a back-up. The result: our 1700 square foot 100% electrically-run house is generating electric bills under $60 per month."

   In closing, Brooks states that it is vital to make lists for everything (parcel, vendors, materials, etc.), and Keycon agrees and says that planning is key and that when searching for a builder, to remember that, "All builders are not created equal".

   We definitely hope that this series has been helpful to you in one or many ways. Remember that there are many builders who build homes and will then Rent them with an Option to Buy (Rent to Own Homes), so it requires a little bit of homework on your end to find these builders.

   If you have any question, we area always available to respond to them. We will be back to our regular Blog posts on Wednesday, since we have a lot of interesting information and topics to cover.

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

The Home Building Process, Part 2 of 3

Good Morning,


   Today, we will be covering part 2 of our 3-part series on the Home-building process. In part 1, this past Wednesday, we took a look at the process from the first meeting between a future property-owner, the building company and general contractor. For a different perspective, now we will look at some additional tips from both a property manager and from an interior designer.

   From the angle of a property manager, we spoke with Blake Appleby, President of Cornerstone Property Management, Inc. in Colorado, who has almost two decades of experience managing large mountain homes, and he provided some additional pointers to be aware of during and after the process.

   Primarily, Appleby states that it is important to give consideration to where snow or rain will shed from the roof, to avoid snow, ice, or rain shedding on entry ways, decks, in front of garage doors or other areas that might interfere with basic usage of the home, as it can result in, "snow removal nightmares and added expense." He also reminds us that, "Complex roof designs can lead to ice build up and subsequent roof leaks in winter months."

   In addition, Appleby suggests using climate appropriate building materials on the exterior home, which will also save time and money (taking into consideration the, "temperature fluctuations, amounts of moisture, harmful direct sunlight and any other factors that might cause the exterior to deteriorate more quickly than normal."), and additionally, to install a leak detection system.

   As far as the interior of the home, he suggests keeping the use of technology as simple as possible, and while the latest gadgets are "impressive in the showroom", home integration can be very complex. Appleby suggests to, "stick with simple dial thermostats for climate control.", and to avoid computer controlled lighting.

   In keeping with the interior of the home, we spoke with Jo-Ann Capelaci, an interior designer with Colours & Concepts Interior Design, in California. Capelaci recommends that you, "Ensure that the interior design reflects the style of the outside of the home.", and to select all interior finishes, i.e. flooring, tile, cabinets, paint, etc, and to "produce a book to include all specifications". She suggests doing this before construction begins, if possible.

   Additionally, Capelaci suggests preparing the flooring plan, tile floor plans and elevations, electrical and lighting plan and furniture plan, select the furniture, window treatments, lighting and accessories, and to prepare the budget for these items and purchase them so that when construction is complete, these items are all ready. She suggests to, "enlist the help of a design professional, even if it is to confirm your choices and make recommendations.", since, "Designers truly do see things in a different way and assist clients to do things they might not have even known were possible"

   In closing, Appleby added another fantastic tip - To make sure that you "have records of the make and model of boilers, HVAC units and any other critical components in the home.", because if you need a service call, this can limit the amount of time with no heat, hot water etc. Additionally, Appleby adds that it is important to keep up with "basic preventative maintenance", such as cleaning gutters, dryer vents, changing HVAC filters and having your heating and cooling systems serviced once a year.

   We hope these tips have been helpful. Tune in on Monday for the final part of this 3-part series, where we will speak with some people who have gone through the actual process of building their own home, which will provide a very unique perspective for those of you interested in doing so.

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

Examining the Home Building Process, Part 1

Good Morning,


   At the request of our readers, we are beginning a 3-part series on the Home-Building process. We always receive a lot of questions about how the process actually works, and we have made contact with some solid resources to bring you some pretty good information that should be incredibly useful to you.

   David Spetrino of Plantation Building Corp (in Wilmington, North Carolina), uses a 10-step process that brings buyers from start to finish. The first step involves meeting their potential customer to identify their wants and needs (this is where you describe your custom dream home and the ideal “move in date,”). They need to know, for example, if you enjoy entertaining in your home, if this is a primary home or a vacation home, and if you would you describe your ideal home as formal, casual, or a hybrid of both styles. They will also ask you if you have any “green” requirements (environmentally-friendly)

   Next, they will discuss where the home will be located. If you have a lot ("home site") already, that's fine, and if you provide them with the address or community of choice, they will do the research regarding setbacks, zoning, architectural standards, etc. After this, they move on to the professional service agreement, estimate preparation (where they collect bids from their trade contractors and vendors), and ultimately, the construction contract (which involves the construction schedule and your financing). Spetrino makes it a point to note that, "the bank that provides the construction financing may not always be the bank that retains your long term mortgage. You have likely provided your lender with tax returns and related financials. Your bank will want us to supply them with a copy of the construction contract, set of construction drawings, specifications and the budget."

   During this process, the General Contractor comes into play, and there are some pointers provided by Arlene Battishill, a licensed general contractor in Los Angeles. Battishill notes that any proposed home site must be zoned for residential use, and you will need an accurate legal description of the parcel, soil testing, and a structural engineer’s review of the architectural plans to determine if any special reinforcement will be required. Once a licensed general contractor (“GC”) is hired, cost estimates can be made, and once acceptable, the architect or general contractor will submit the architectural plans to the local government building department for evaluation. Once all changes are made and the building permit fees are paid, construction can begin.

   From this point on, Spetrino's company works out the full details, and then begins construction. They provide, "regular updates, photos, and twice monthly, a ‘cost report’ that tracks budget and schedule." Over the course of construction, sometimes changes need to be done, and these requests go into a written format, officially known as the ‘change order.’ Once the "Big Day" arrives, a thorough "inspection and orientation of your new home" is completed. After one month, they schedule a follow up walk through to make sure that you are completely happy, and they also schedule a one year walk through.

   Battishill notes some of the costs of the process, for example, purchasing the land, the fees paid to all of the required consultants, fees to the local government and then the cost of construction. She notes that financing should be obtained well in advance of construction, and to assume that you will need 25-50% more money than the budget calls for to ensure successful completion, as cost tends to overrun in the construction of new homes.

   Please join us on Friday for part two in this series, where we have some additional pointers and points of view from a Property Manager and an Interior Designer.

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

Canadian Real Estate Magazine Interviews HomeRun Homes

Hi All,

   We were just notified by Canadian Real Estate Magazine (www.canadianrealestatemagazine.ca), that they have published an interview that we did with them on the Rent to Own Market. The segment that we are featured in is exclusively included in the physical magazine, so I have attached a copy of the article as well as a link to the file on our site (CLICK HERE FOR THE STORY).

   The article covers the many aspects of what a Rent to Own is, looking at it from the angle of Rent to Own Homes in Canada, and it begins as follows, "The rent-to-own option could prove to be valuable as lending guidelines make it more difficult for Canadians to obtain mortgages. Kit Kadlec recently spoke with Robert Eisenstein of Home Run Homes, a U.S. company that helps homeowners find rent-to-own buyers..."

   The two largest markets for Rent to Own Homes are both the US and Canada, and we are glad that we are able to help people buy or sell a rent to own home in each country.

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