Blog

Wahoo Baseball Game

What a perfect night for “peanuts and cracker jacks…”

____________________________________________________________

real estate investing pensacola fl
Thanks to my wife for the above photo.

 

Last month I wrote about all the exciting real estate developments in Downtown Pensacola: Wahoo @ the Developments in Pensacola! Pun intended with the title as The Wahoos and Pensacola Bayfront Park are two of the best drivers in the gentrification happening downtown. A short walk from many restaurants and bars, Pensacola Bayfront Park makes for an awesome afternoon into the evening outing, at any age.
real estate investing pensacola flreal estate investing pensacola fl

The outfield (CHEAP SEATS!) make it great for kids to run around with high top seating and plenty of concessions close by for the adults – just watch for home runs! One other tip: buy your tickets in advance: http://www.milb.com/tickets/singlegame.jsp?sid=t4124 .

We’ve visited the park on a couple of occasions only to find out the game was sold out. Our boys are in a close 2nd place right now so this year should be fun!

WAHOO to Downtown Pensacola!  I love seeing the revitalizing happening and allowing us to take part by investing.

Screen Shot 2018-02-05 at 4.00.05 PM

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Purchasing Our First Duplex

Up until this point we’ve only invested in single family homes, but as we keep doing our research, small multi-family (MFRs) are the way to go.
______________________________________________________

 

purchasing first duplex real estate investing pensacola fl

We looked in the Pensacola area for 12+ months and made offers on 3 other MFRs before we found one that fits our investing criteria. I was so anxious to get in a MFR at times I found myself compromising on our #s – trying to convince myself the #s were ok, they’ll improve later.  They were not ok and we’re not doing this to be just ok. Compromising on the #s is a no-no and this has been a great discipline exercise for me and great display of patience (which I rarely have – I must be getting older/wiser). As we stuck to our investing criteria, we finally found one. And I’m not just talking about a good deal, I’m talking about a great deal; at least it looks like that on paper :).

Excitement. What makes this such a great deal?

  1. Cash Flow. This Gulf Breeze duplex is expected to cash flow way better than our investment criteria require. I couldn’t wait to close on it and have the revenue coming in.
  2. Expanding: Our portfolio was expanding and so was our net worth.
  3. Subdivide Lot = Extra Cash Flow. This duplex is on a lot big enough to be sub-divided (which we will eventually do). This area of Gulf Breeze is zoned for many uses, so very little investment on the sub-divided property should yield a few extra hundred dollars more in monthly cash-flow. Another option is to sell off the subdivided lot, lowering our cost point on the duplex.

Screen Shot 2018-02-05 at 4.00.05 PM

Struggles. As-in, things that made me question what we’re doing.

  1. Patient to find a good great deal.  Now that we’ve found a great deal, this will be easier for me to repeat the next time.
  2. Banks/Mortgage Brokers. This probably goes without saying but I’d rather someone dig sand out from underneath my toe nails with a spoon vs. working with Banks/Mortgage Lenders . We have a great credit score, we have the down payment, W2s, etc, but I just felt like I was chasing them  –take my business please!!! Can’t quiet understand why they weren’t chasing me.
  3. Postponed Closing. Even though I finally caught a lender by the tail and started the process of ensuring financing with them a few days after we went under contract, it took 3+ months for them to pull everything together. The Gulf Breeze seller wanted to pull out, but thanks to my realtor for calming the seller down and bringing him back in. This was a new relationship with this bank and I’m hoping this doesn’t happen with our next acquisition. If it does, at least I’ll be used to it – they have REALLY good rates.
  4. Choosing a property management company. Gulf Breeze is a bit of a drive and with our portfolio expanding, I thought its best to bring on some extra help. I called 4 different property management companies (top hits from Googling ‘Pensacola Property Management’) and went with the only one that called me back. Luckily, they have impressed us thus far with their availability and response times.
Verification Process. There are a few things we wanted to verify about the duplex and made our contract contingent upon. The previous owner provided all of this. They are:
  1. Verified Rent Roll. We wanted to make sure the tenants were paying at least the amount of rent we used in our calculations to underwrite the deal. They were actually paying a little more.
  2. Current Tenant Rental Agreements. We also wanted to ensure what the current rental agreements look like as we would inherit those (at least until they expire) with the purchase. We also wanted to be aware of any security deposits the tenants paid that will need to be transferred to us at closing.
  3. Maintenance History of Each Unit. Just another verification step we took to ensure we weren’t acquiring a property that had a bunch of deferred maintenance.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

As the months roll on and this property produces like expected, I’m certain our Excitements will make me easily forget our Struggles. Like a new parent who struggles to get through the first 6 months, I’m hoping we quickly forget the stress and zombie feeling of being new parents.
Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

How We Increased Our Credit Rating

Our goal was to be deft free, save money for real estate investing, and follow a path to guilt free spending. Increasing our credit rating was just a by-product.

____________________________________________________________

real estate investing pensacola fl

 

For many years I heard about Dave Ramsey and his snowball approach of eliminating debt, but I didn’t believe it. It wasn’t until my wife and I decided to take action did I start to see the light at the end of the tunnel. It took us a few years, but once we pushed our debt snowball over the top, man was it exciting to see it roll!  At the time we started, we were approximately $25k in debt (credit cards, vehicles, student loans, etc),  not including mortgages. We were spending without tracking. We had no idea where our money was going, but we did know at the end of the month, we were constantly building our debt. Not a legacy either one of us want to leave. Here are the steps we took to become debt free and have great credit scores:

Step 1: Read or Listen to Dave Ramsey’s Total Money Makeover : A lot of my “reading” comes from behind the windshield so I definitely recommend the audio book. Ramsey’s site is loaded with info too, but the book is a great foundation to have to begin The 7 Baby Steps.

Step 2: Get Your Family on Board. This is the most important step. Your family will incur lifestyle changes as you create and stick to your budget. It was hard a first, but as that impervious debt snowball keeps canceling your stress, I mean debt, the excitement will soon roll in. To this day, there are weeks when my wife and I look at each other, want to go out for a nice meal, and we don’t because our budget doesn’t allow for it that week. But we are OK with that. We know that sticking to our budget allows us to reach our financial goals and provide a better life for our family.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Step 3: Create and Stick to Your Budget. This is hard to do. Especially if you haven’t been living within your means (like we were) and have to cut back. If you’re married, you’ll definitely want your partner onboard when creating and later struggling to stick to your budget. And the struggles will come, but the more you stick to your guns the more you’ll realize you don’t need whatever budget buster it was.

Step 4: Apply for Credit Cards. YES! I steered you to Ramsey and now I’m going against the grain. For our real estate investing strategy, we want to have great credit to take advantage of lower rates when we apply for loans. Credit is one of those funny things that’s hard to get unless you already have it. In our case, my wife had no credit. She never needed a credit card and that was awesome, but that poorly affected her credit score. We didn’t go overboard, just two separate cards, only used within our budget and paid off every month. Every 6 months we would call the credit card companies to ask for a limit increase until we reached an amount we were comfortable.

Screen Shot 2018-02-05 at 4.00.05 PM

We haven’t followed everything in Total Money Makeover, and we don’t plan to, but we  we are using the Ramsey methodology as a tool to help us achieve our real estate investment goals in Pensacola. To date, we have been following the Ramsey model for approx. 3 years. Other than mortgages that are paid off by someone else, we are completely debt free. In Ramsey’s world we are stuck somewhere between Step 4 & 5. I don’t think Step 6 will ever apply to us (as we will leverage equity to invest in more properties) but we can’t wait to truly dive into Step 7. Again, we haven’t followed his system to a T, but we have picked the items that make the most sense in helping us achieve our real estate investment goals. I hope our experience helps you achieve yours.

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Advantages of Selling Your Home to a Real Estate Investor

Selling your home to an investor is a relatively straightforward process in most cases. There are basically four types of investors: (1) buy & hold investor, (2) wholesaler, (3) flipper, and (4) the buy/flip/hold investor. In the Pensacola, FL and Cantonment, FL markets we serve, we apply a strategy of buy & hold and buy/flip/hold.
____________________________________________________
real estate investing pensacola fl

First things first…you are more than likely going to be offended by the initial offer you receive from an investor. Chances are they don’t know you, they don’t know the emotional memories you’ve made in that property and quite frankly, that’s not what the investor is buying. If they are a good investor, they have a specific investment strategy and mathematical formulas to support that investing strategy. The offer you receive on your property is just what comes out the other end of their formula. In most cases, as when we make offers, it is not meant to be an insult or devalue the memories you made in that home, it is simply the answer to an equation that makes that investment work for us (the investor). On your side of the deal, you more than likely have a property that is in disrepair and don’t want the hassle of making repairs that are traditionally required when using a Realtor. The investor is there to solve your problem: help you get rid of the house quickly.

Let me step back for a minute. There are basically 4 types of investors:

Buy & Hold Investors: simply put this type of an investor wants to purchase rental properties. They may manage their properties themselves (as we do currently) or outsource the management of these properties to a Property Management Company, but this type of investor wants to grow their real estate portfolio.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Wholesaler: this type of investor has no desire to hold your property for long term, even short term really. Complicated concept to grasp, but this investor may only own your property for 10 minutes and then turn around and sale it to one of the other investor types discussed here. These guys obtain the best deals on properties and while we don’t wholesale, we will link sellers to other investors if the deal isn’t right for us.

Flippers: you’ve seen the reality shows on TV. These guys buy the worst house on the block for cheap, demo it down to the studs, move some walls, update everything they can and then hopefully sell a modernized home for profit.

Buy/Flip/Hold: this is a combo of Buy & Hold and Flipper Investors and where we tend to find our sweet spot. This is typically a distressed property that the owner has let go due to financial strain, divorce, foreclosure, job relocation, or inheritance. This type of investor buys distressed properties, flips them, but holds onto them and turns them into rentals.

Many investors do a combo of flips, rentals, or Buy/Flip/Hold, while some focus on just one area and others do all. How much the investor is willing to pay depends on a number of factors, including the specifics of your house and the market conditions of the area.If you list your house for sale, investors may come to you, especially if you use the words “fixer upper, handyman special, or needs TLC” in the listing description. Even if you don’t list your house for sale, there is a chance investors may come to you. If you have a home in Pensacola and surrounding areas, there is a possibility you’ve received one our cards or letters in the mail. Don’t worry, all the information obtained about your property is public record and savvy investors know how to obtain this info. You don’t have to wait for an investor to decide to contact you, though. You can reach out to investors in your area, like us in Pensacola – hint hint :). There are both companies and individuals who will come to inspect your home. They will look around, check out the comparable homes and their value, and potentially make you an offer if it fits within their buying criteria and investment strategy.

Again, don’t be surprised if the offer an investor makes to you is considerably lower than what you were hoping to get for your home. That’s one of the downsides to selling your home to an investor. You often have to take less. After all, an investor isn’t looking to find their dream home. They are looking to make money, and they can’t make a profit if they pay too much for the homes they buy. Sometimes offers are very low, at around 1/2 of the value of your home. Other investors will be more fair with the value. A lot of that depends on how the investor plans to use the home (flip or rental), and whether the value of other homes in the area is going up or down. Market conditions always play a factor, as does the work that is needed on your home.

Screen Shot 2018-02-05 at 4.00.05 PM

Two BIG advantages to selling your home to an investor: (1) quick sale for cash and (2) no repairs needed.

Quick Sale for Cash: Investors don’t typically need to go out and get a mortgage, and you won’t be anxiously waiting for the bank to decide whether your buyer can get a loan. They typically pay cash, and because they don’t need a mortgage they can close the transaction much faster than a more standard buyer. Generally, closing is less than 30 days for an investor, and it can be within just a couple of weeks in a lot of cases. By keeping that in mind, you can decide whether the fast sale is worth the lower price you may have to accept. Depending on your specific circumstances, selling your Pensacola, FL or Cantonment, FL area home to an investor may be just the right choice for you.

No Repairs Needed: Unlike a buyer finding their dream home and wanting it to be in perfect, move-in ready condition, investors won’t ask to have repairs performed on your property. In fact, the more work needed, the better. Just realize this is one of those factors that affects the offer you’ll receive from an investor.

I have unintentionally offended a lot of people, but now that you know it’s all about a math formula and helping you get rid of that unwanted property. If you have a Pensacola area property you want to sell to an investor, Contact us today!

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

What Serving On My HOA Board is Teaching Me About REI

I have to hand it to my wife. She knows me better than I know myself…
____________________________________________________________
real estate investing pensacola fl

 

In September 2015 I was convinced to serve on the Board of Directors for my HOA in Pensacola, FL. Before throwing my hat in the ring, I inquired with people whose opinion I value and there are times where I wish I would have listened to everyone of them. They all told me “don’t do it!” I tried to convince my wife that this wouldn’t take much time, wouldn’t be a hassle, etc, but she knows better. “You’ll go at this full force like you do everything else.” She was right and what I’ve learned will help me when I run across that opportunity to Buy-Renovate-Hold a large multi-family that’s in need of deferred maintenance attention.

First, all of my interviewees had current or previous BOD experience not in our neighborhood (friends who live in Daphne, Navarre, and Pensacola). Second, their advice was solid and so far, on point: it is the most under appreciated role you’ll ever have – don’t do it.  A few things to note that makes this such a good opportunity for me to learn: (1) not a single member of the previous board that served for the 3 previous years lived full time in our neighborhood, not even in the southeast actually (2) we had 3 property management firms in the last 2 years (3) I’m currently the only serving BOD that lives full time in our Pensacola neighborhood (mostly rental properties).

Screen Shot 2018-02-05 at 4.00.05 PM

In the short 8 months of serving as Treasurer & Secretary, here’s what I’ve learned:

  • Not going to make everyone happy. This volunteer position doesn’t allow you to make every one happy. I can’t imagine taking over a large multi-family in need of deferred maintenance attention will provide much opportunity to make everyone happy either.  There are those that welcome improvement and there are those that are against anything that isn’t their idea and unwilling to serve. The later makes me smile.
  • How to resolve deferred maintenance items while working within a budget. With the previous, physically distant board attempting to take on large projects (i.e. grass replacement for entire neighborhood) while changing management companies each time the sun came up (not really), our neighborhood resulted in lots of deferred maintenance items. My wife and I joked a lot because each week before the HOA meeting it was like a scene from While You Were Out around here. Rush a years worth of work into one week. This part I’ve enjoyed the most and it has brought the most criticism (from none other than the previous board members).
  • Enhancing relationships with quality vendors. Once I came on board, it took some time to identify which vendors wanted our business with us and which ones didn’t. The quality ones are still around and we make sure to treat them like they deserve.
  • Expanding my knowledge/experience of replacing sub-par vendors.  Change always has a FUD (Fear Uncertainty Doubt) feeling, but we’ve made a few sub-par vendor changes that have led to easier management and less involvement from our board. We have a couple more to go but the deferred maintenance items are certainly dwindling down.
  • Resolving deferred maintenance items to improve overall property value. Just to name a few…dying to dead brand new sod, common area buildings that need painting, homes that need painting/cleaning, 10 year old irrigation system with little to no maintenance (ever), website with a 1980s look & feel, dying pool & spa equipment. More than a few, but we’re getting there.
  • It takes a team. Like managing any property, trying to take on HOA BOD duties solo is #1 illegal (due to our governing docs & FL statues) and #2 is just plain crazy. Having the proper team (board members, property management, maintenance, lawn care, pool service, HOA members that have previously been silent, etc) is the best way to accomplish improvement.
  • Increased my knowledge of FL Statues. While this won’t help me as much owning/managing a large multi-family, I’ve learned more than I really wanted to know about the legal processes an HOA BOD has to operate. Interesting process and glad the statues exist to provide the framework to operate. Thankful for our Pensacola legal team for all the guidance!
As we’re addressing many of the deferred maintenance items, I hope to continue to be able to serve for the education. I expect there to be endless tasks to be done or, as I like to look at it, endless opportunities to learn. If you’re looking to invest in Real Estate in Pensacola, or any area for that matter, I encourage you to serve on your HOA BOD. It will come with heartache, stress, and time away from other important items in your life, but it will be an education that you can translate into your investment properties.

 

#REI  #RealEstateInvesting #HelmsREI

5 Reasons to Invest Your Hard Earned Money into Real Estate

There are many ways to invest your money and make a profit, and one of the most popular investments is real estate. While it’s not for everyone, getting involved in the real estate market in Pensacola and Cantonment has the potential to provide big profits regardless of the investment strategy you choose.
___________________________________________________________

 

real estate investing pensacola fl

Here are five good reasons why you should be investing your hard earned money into real estate.

1). Positive Cash Flow via Passive Income

When you invest in real estate and have some rental properties, as long as you purchased the property correctly, you have positive cash coming in from those properties consistently. Naturally, you want to get as much cash coming in as possible, but it’s very important to be realistic about the value of the properties and how much you can rent them for. You’ll also need to budget for expenses like taxes, insurance, vacancy, property management and repairs. Still, you can obtain a positive cash flow with little effort, and having that money coming in can provide some peace of mind.

2). Tax Advantages

The deductions for property ownership can really add up, and that can bring you some big tax advantages when you invest in real estate. Before you make those investments, though, it’s a good idea to work with your financial advisor, CPA, or tax attorney. That way you’ll know exactly how real estate investing could benefit you, allowing you to weigh the pros and cons and make an informed decision about whether the tax advantages are enough in your particular situation.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

3). Potential for Appreciation – extra icing on the cake!

Property, in general, is going to go up in value over time. If you take good care of the property and make upgrades to it, you can help increase that value faster. That appreciation will mean that the property is worth more than the money you have put into it, giving you an investment that has real value and that will continue to gain value the longer you own it. Investing in good areas and keeping the property updated can help you with appreciation.

4). Long-term Wealth

Many real estate investors are quite wealthy. They have some missteps along the way, just like anyone, but they have managed to accumulate long-term wealth that they can feel comfortable with. It takes time and effort to get to that point, but once they achieve it they have little to worry about. Their real estate investments will simply keep bringing them income, and they can invest that income to build wealth more easily over time.

5). Financial Security

Having real estate investments can help you be financially secure. Unlike a company that could close its doors tomorrow and leave you without a job, real estate investments will still be there. As long as you own the property, you can continue to collect rent. You can also buy, flip, and sell properties, and then invest the profits in ways that are best for you. There are so many options to consider when you invest in real estate that the financial security opportunities are significant.

Screen Shot 2018-02-05 at 4.00.05 PM

Overall, real estate is a strong investment strategy with multiple avenues to explore, and one that can help you build wealth and feel comfortable with your financial future. For us personally, we focus on positive cash flow and strive for a return of 15% or greater. This is far better than the stock market or any IRA can consistently provide – at least in my experience. Our IRA grew a WHOPPING 1.4% in 2015 while our RE Portfolio provided 25% ROI! And if appreciation happens, which it will, it’s just extra icing on the cake.

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Wahoo @ the Developments in Pensacola!

With all this excitement, building & revitalizing, the recent announcement of two larger developments in and near downtown Pensacola has me wondering. Is it too fast?
_________________________________________________
real estate investing pensacola fl
About 2 years ago we started seeing new construction, but now it’s as if new construction is happening everywhere. From Perdido Key to Gulf Breeze and from Downtown Pensacola to Cantonment. And not just single family homes, but entire neighborhood developments. Just to name a couple, the expansion of Lost Key and with Navy Federal relocating their headquarters to Pensacola, Cantonment is booming. Lots of new construction is exciting, particularly exciting to see how downtown has and continues to revitalize (it was a dump when I visited for a fishing trip just a little over 10 years ago). Now it is awesome.
 
With all this excitement, building & revitalizing, the recent announcement of two larger developments in and near downtown Pensacola has me wondering. Is it too fast?
 

I wasn’t really in the real estate game when the bubble popped in 2006-2008. Ok, ok, I did get the bug on the tail end of the hype (which I’ll write about in an upcoming post), but now that we all know what happened then, are these truly signs of improving times or another economic bust?

It is hard to say and one that only elite experts can predict (recommend watching Adam McKay’s The Big Short), but I don’t think we’re facing another housing crash anytime soon. It is just too damn hard and complicated to get a loan these days. Credit Unions, Banks, mortgage brokers, they are all starting to become 4-letter words to me. Regardless of the lending institution, they are just to damn difficult to deal with. And this is coming from someone who is an ideal candidate for a home loan. Rant over, I’ll save it for another post 🙂

It is exciting to see what’s going on in Pensacola and many people are responsible. I’m glad we just get to experience it. Wahoo!!

Screen Shot 2018-02-05 at 4.00.05 PM


Article links to the aforementioned developments: 

Related Posts:

#REI  #RealEstateInvesting #HelmsREI

How the Florida Housing Market is Affected Before & After a Presidential Election Year

Many factors go into affecting the housing market (prices, values, etc) and I believe the presidential election is one of them.
_________________________________________________
real estate investing pensacola fl

This year the Presidential Election process has been entertaining (coming from someone who loathes politics). As the entertainment keeps piling in, I can’t help but wonder what typically happens to the Pensacola housing market before and after a Presidential election year. Google doesn’t return much on the subject but I did find a few sources where I was able to extract some data that focuses on some of the larger cities in Florida. I can’t find any info that directly shows how the election cycle affected areas of Escambia & Santa Rosa counties, but nonetheless, here is what I’ve found for Tampa and Miami and compare those to the rest of the U.S.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Figure 1 shows the % change in the housing market (inflation adjusted) prices from the beginning to the end of each election year. For example, in 2004 Miami experienced nearly a 20% increase in housing prices from January 2004 and December 2004. And in 2008, Tampa saw a >15% decline in housing value starting from January and ending in December.

 

Figure 1.

Below, Figure 2 shows the same data, just for the first year of office or first re-elected year in office.  For example, from January 2005 until December 2005, Miami saw approx. 17% increase in home value. And in 2013, Tampa saw approx. 10% increase in home value from January to December.

Figure 2.

A lot of Real Estate industry experts are predicting a dip in the market around Summer 2017. Those guys are certainly using more variables than just the election cycle. However, if you compare the two graphs (election year vs. first year in office), odds are favorable for a bump UP in housing market values when looking at 20+ years of a single point of data.

Screen Shot 2018-02-05 at 4.00.05 PM

Who’s right? Who’s wrong? Only time will tell. #Vote2016!
Related Posts:


Data pulled from Economist.com

#REI  #RealEstateInvesting #HelmsREI

Title Search: Should I Pay a Professional?

From my experience, absolutely 100% yes, a Title Search should be performed by a paid professional, every time. Furthermore, at closing, always, alwaysalways purchase title insurance. Title Insurance can save you thousands. For now I want to talk about why I will always pay a professional (lawyer, title search company, etc) to perform a title search.
___________________________________________________
real estate investing pensacola fl


As always, I’m not a legal attorney and if you have title / deed questions, a legal attorney should be sought after. Consider this post for entertainment purposes only 🙂

I recently started inquiring to buy a property near downtown Pensacola, FL.  The property appeared to have been abandoned for years & in absolute horrible condition (the way we like them). I had my realtor touch base with the listing agent and I expected it would be a lost effort as the deteriorating Realtor listing sign in the front yard conveyed this opportunity had been around for a while. After a couple of weeks my realtor finally returned with very little feedback. “Title issues”, she said. That was it. In an attempt to save $100, I went off to perform my own title search. Surprisingly it came up clean (hence the reason I now will always pay the professionals to perform title searches). My realtor abandoned pursuing the deal with me so I went on to speak with the owner listed on the Escambia County Appraiser’s site. For the sake of this post, let’s call him Pensacola Bill.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Over the next several months Pensacola Bill and I had many discussions and I learned a lot about the property.  This property was an heirloom passed from his deceased mother. Bill has been paying the taxes on the heirloom property for a few years, even though the property is abandoned and in horrible condition. He thought by just paying the taxes gave him 100% of the title. He eventually will be correct if he exercises something called Adverse Possession, but he’ll have to wait it out for several, several years to exercise this right. Bill and I finally agreed there were some unknown title issues and worked out a sales price for the property that included me paying for some of the legal costs to finally probate title the property directly to Bill. I had a ceiling of what I would pay and those legal costs will be deducted from the agreed upon sales price. Anything over that, Bill was responsible. As we dove deeper into the discovery phase, more items started to unfold to the degree that I became very uncomfortable moving forward – at least not until I understood everything better. Remember, when I did a title search on my own, it came back clean, one owner, property was Pensacola Bill’s.  A quick call to my Real Estate Lawyer and $100 title search later here’s what was discovered:

The heirloom property was actually titled to Bill and his two brothers. Unfortunately, Bill was the only one still alive. Because his brothers and brothers’ wives were also deceased without a will, their ownership of the property passed onto their children. Furthermore, each of the brothers, including Bill, had been married a couple of times. Each marriage resulted in at least one to several kids with each wife and some wives had children from previous marriages. Under Florida law, the ex-wives  (living or deceased) still have ownership in the heirloom property as long as they were legally married at the time the heirloom passed title to Bill and his brothers. If the ex-wifes were deceased, their ownership passed onto their children (including those from any previous marriage). As Bill and I started to add up the potential # of known dependents, that quickly totaled 27. Twenty seven individuals who would join the probate process, all of who had to agree to not only sale the property, but at what price. I know this is part of the probate process and something that needs to take place, but at this time I decided to not pursue the deal any further.

Screen Shot 2018-02-05 at 4.00.05 PM

Helping Pensacola Bill discover all that he didn’t know and give him some direction was truly educational and quite frankly, rewarding for me. Sure it may have cost me $100 and several hours of my time, but the probate costs alone were expected to be more than $10,000.  Bill and I have agreed to keep in touch in hopes that we can strike a deal in the future.

Bottom line, always pay a professional to do your title searches and always purchase title insurance. As in this scenario, it not only helped me save thousands of dollars but also allowed me to not get wrapped up into a deal where it would take potentially years before I was able to see any ROI.
Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

History of Real Estate: Strolling Down a Trail

As I get older, history seems to provide me with a newfound spark of interest and thankfully Pensacola is full of it.
___________________________________________________________
real estate investing pensacola fl
Recently we took advantage of a warmer weekend and explored the Tarklin Bayou Preserve State Park. Curious about the name Tarkiln, I had to do some research. It is a compound word made up of tar & kiln.
  • tar – As in pine tar. The kind that made George Brett of the Kansas City Royals infamous? Maybe so.
  • kiln – As in the type of oven that can get hot enough to harden objects such as clay for pottery or…yep, you guessed it, tar.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Straight from the pamphlet available at the main entrance kiosk:
During the 1800s, tar kilns were located on the adjacent peninsula to process the tar removed from the yellow pines. Visitors can still find an occasional “cat face” in some of the larger pine trees where ceramic pots were used to capture the seeping tar. While pine tar was an important resource for the maritime industry, it was also used in the production of soaps and animal medicines.
 
real estate investing pensacola fl
Thinking about life in the 1800s and how this now preserve was used differently then, I immediately wondered how real estate must have been in those days and wondering a step further, how did the act of buying and selling property, real estate, actually ever begin. Enter…Google Magic. Instead of boring you with words, the folks over at curbed.com put together the most meaningful graphic I could find. The history of real estate:

 

I get overly excited every time we start the process of evaluating single and multi-family homes to hopefully add to our portfolio. I imagine I would be like a kid in a candy store if I were anywhere near the size of a Louisiana Purchase or Alaska Purchase…wow. There we were as a nation, looking to add territories to our portfolio. I certainly didn’t have that thought going through my head when originally learned about those events in grade school history class.
More info on Tarkiln Bayou Preserve State Park: 
Located in southwest Pensacola off Bauer Road, the 4,200 acre park offers a few hiking trails, a picnic area and wildlife viewing. The short 1 mile loop is completely paved or raised platform – which makes for a nice walk with a curious, still stumbling toddler or stroller. The 6 mile loop on the other hand, be sure to wear boots. and get a little muddy. Either way I definitely recommend a visit, even if you have just a couple of hours. We will certainly be a repeat visitor.
real estate investing pensacola fl

 

Screen Shot 2018-02-05 at 4.00.05 PM

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Tax Season: How Real Estate Can Affect Your Tax Return

First things first, I’m not a CPA or tax attorney and this or any post should not be considered legal nor accounting advice 🙂

But if you’ve bought or sold real estate in the past year, either for yourself or as an investor, you’ll need to make sure the good ol’ IRS knows what you’re doing. Real estate purchases and sales can definitely have an affect on your tax return, and if you aren’t careful that can result in you owing a lot of money at tax time. Naturally, that can be a nasty financial surprise that you’ll want to avoid. Some of the tax concerns may be inevitable, but you can avoid most of them with some careful planning. When you buy and sell real estate as an investor, you’re running a business. The profit you make will be subject to tax just as it would with any business, but you don’t have to worry about capital gains tax and related issues that come about when you sell the home you live in (as long as you’ve lived there for at least 2 years). There’s also some fancy stuff you can do with what’s called a 1031 Exchange to defer taxes into a new purchase, but this is certainly where you will want some help from your CPA or tax attorney in Pensacola.

Screen Shot 2018-02-05 at 4.00.05 PM

Sellers who decided that they wanted to move, and sold their primary home, will be asked some questions at tax time. The IRS will be looking to see how long they owned that home before they sold it, and if they made a profit on it. If you lived in your home for at least two years before you sold it, you probably don’t owe any tax unless you made a very big profit on the sale. If you didn’t live in it for two years, though, you’ll owe capital gains on the profit of the sale. Fortunately, most people who don’t live in their house for at least two years don’t make a profit, because it takes a while to get real value out of buying a house. Because of that, they will likely not owe anything extra at tax time.

Buyers can get tax breaks for purchasing a home, because they can now take a deduction for the mortgage interest they have paid. The mortgage company will send them a statement detailing how much they paid in the prior year, so they have that information for their taxes. Of course, if you buy a home and pay cash, you won’t have that mortgage interest deduction to use. If you make improvements to your home, some of those are also tax deductible (like energy tax credits – https://www.irs.gov/uac/Form-5695,-Residential-Energy-Credits), so you could save some money on your taxes in that way, as well. The best choice when buying or selling a home is to talk to a tax advisor and make sure what you’re doing isn’t going to cause you tax trouble.

Remember, if you purchased a home recently in Escambia County, the deadline to file for homestead exemption is March 1. Here is more info from the Escambia Tax Collector’s Office: http://www.escambiataxcollector.com/ad-valorem-assessments .

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

If you ask first, and get some answers, you can buy or sell a home in the Pensacola or Cantonment, FL area without fear of a big tax bill. In some cases, people have waited to buy or sell until a certain date (such as owning a home for a full two years before you sell it), so they can avoid any chances of seeing their taxes go up. That makes sense, and can be the right choice when you want to make a move in the real estate market but you don’t want to be paying extra for it the next time April 15th comes around.

Related Posts:

#REI  #RealEstateInvesting #HelmsREI

I’m Facing a Tax Lien in Pensacola. What Are My Options?

Tax liens can be stressful. They are hard on your credit, and they can prevent you from selling your property because of the amount of the lien. If you’re facing a tax lien, you may want to list your property for sale and try to get it sold quickly. Then you can use the proceeds from the sale to pay your taxes, and also to find another place to live. Work with the IRS or other taxing authority that wants to place a lien on your property, in order to keep them “in the loop” when it comes to what you’re trying to do.

Then, add your Pensacola, FL home to the properties for sale in your area. Don’t go through a real estate agent, though. Homes for sale by owner are often a better choice. If you sell it yourself, you won’t have to pay a commission to an agent. That can save you thousands of dollars, and really help you spend as little as possible to sell your home. There are also investors and companies that buy homes for cash. Working with one of them can mean a quick closing that can help you avoid the tax lien.
Closing a real estate transaction often takes 30 to 45 days, but when cash is paid, it can take just a week or two. The extra time built into most loans is for the buyer to get a mortgage, so all that time isn’t needed when the deal is cash. That’s great news for anyone who has property to sell and who is facing a tax lien, since there may not be any time to waste in attempting to get the property sold before a lien can be placed. Sellers in this predicament are not trying to avoid paying the money they owe. They are just trying to avoid having a lien placed on their property.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Once there is a tax lien on a piece of property, many buyers will shy away from it. They are concerned about getting the lien cleared correctly, and so they will often move on to look at something else. Liens can mean title problems, or delays in being able to purchase the property and close the deal. Rather than take the risk that you won’t be able to sell with the tax lien in place, it’s better to sell the property before the lien can be attached. Then you can pay the taxes you owe, without involving the property in any way.

It’s a much less stressful way to handle the situation, and one of the best options for your Pensacola, FL home and its tax situation. Whether you owe the taxes on the home itself, the lien is for income tax, or it’s based on city, state, or other types of tax, liens are best avoided. When you work with a company or an investor to buy your house for cash, you can get the peace of mind you need to get through a stressful financial time. Don’t let the fear of a tax lien steal your peace and emotional health.

Let a company that buys houses make you a cash offer on your property. You won’t have to worry about the buyer getting a mortgage, or the length of time it may take to get the deal closed. All you’ll need to do is pack and move, and then pay your outstanding taxes from the proceeds of the sale. There won’t be any lien to worry about, helping to really lower your stress level.

Screen Shot 2018-02-05 at 4.00.05 PM

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Capital Gains Tax on Divorce Settlement including a Real Estate Transaction: Who Pays?

Divorce can be messy, from a financial standpoint. It can also be very stressful, and can take some time to complete. With that in mind, there are often nuances and subtleties that people overlook. One of these issues is capital gains tax on divorce settlements that include a real estate transaction. For example, many people who divorce sell their homes, and they split the amount of money they receive from the sale. That makes things fair and equitable.

When they have Pensacola, FL investment property, though, that can change the game. Investment properties are subject to capital gains tax when they are sold, and that tax amount can be very high. If there is a large gain on the sale of the property, the amount owed could easily be into the thousands of dollars. Who pays for that can depend on several factors. If the divorce decree spells out who is liable for that tax, that will settle the issue regarding the property for sale. The decree must be followed.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

If there isn’t anything in the divorce decree about the property or properties for sale, though, there may be a fight regarding who has to pay the capital gains tax. It could come down to whose name the property was actually in, and/or who played a more significant role in the management of the property. Often, it will be up to a judge to decide the outcome. Before any of that takes place, though, the property has to be sold. Rather than list it with a real estate agent and wait for months, you can contact a company that buys property for cash. Often, getting it sold quickly is just a phone call away.

There’s a lot less to worry about when the property is sold for cash, and the closing will be much faster. That can be a very popular option in a divorce, when people are looking to break all of the ties they had to one another as fast as possible. Owning joint property can make it feel as though they are still married, and that is usually the last thing they want to deal with. With a cash deal, you won’t need to wait for months and compete with all the other properties for sale and the multitude of MLS real estate listings.

Instead, you’ll work with an investor or company who wants to buy the property quickly, and for a fair price. Before you know it, you’ll be out from under the property, and you won’t have to be tied financially to your ex-spouse. That doesn’t solve the matter of the capital gains tax, though. If you both owned the property equally, the tax should be divided equally in many cases. However, every divorce is different, and there are often extenuating circumstances. For example, one person may have had a very good job, and the other may have been a homemaker. The distribution of money could be very different for those individuals.

Screen Shot 2018-02-05 at 4.00.05 PM

It’s best to work with your divorce attorney regarding who might have to pay what amounts, so you won’t get caught by surprise when the property sells and capital gains tax is owed. It’s much better to be prepared in these types of situations, as much as possible. Then you can sell the property quickly, know where you stand with taxes, and move on with your separate lives, after the divorce is finalized. Dragging out a sale on a property can make the divorce process worse, but a quick sale can help bring peace of mind and closure.

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Foreclosure in Pensacola. What Will it do to My Credit?

If you have a home in the Pensacola, FL area and you’re having trouble making the payments, you’ll want to find a way to change your situation. Getting a buyer for the home and getting out from under the mortgage can be a great way to do that. Then you can move to a place that costs a bit less, and get back on your feet. If you don’t make changes you could be facing foreclosure, and that’s devastating to your credit.

Screen Shot 2018-02-05 at 4.00.05 PM

Foreclosures are harder on credit than short sales, and they will remain on your report for up to 10 years. That can make it extremely difficult to buy another home, especially within the first four or five years after the foreclosure takes place. Most lenders won’t want to work with you, because they will see you as too much of a risk. That’s not a good thing, naturally, as you’ll have to rent – and you may even have trouble doing that due to your low credit score. Having bad credit can even get you turned down for a job.

To avoid the foreclosure hassle and the credit nightmare that often comes along with it, you’ll want to consider listing your property for sale. You don’t have to become part of the jumble of MLS real estate out there, though. You can join the ranks of homes for sale by owner, and look for an investor or company that buys properties for sale. You can ask them to value your house, and they will give you information on what the home is worth and what they would be willing to pay for it. Taking a cash deal can mean closing quickly, and that can help you avoid a foreclosure.

You’ll also save money that way, because you won’t need to pay a Pensacola, FL real estate agent commission on the sale. You’ll also generally save in closing costs, and you’ll be able to move from your home and get something less expensive fast. Letting a company buy your home that way can allow you to close the deal in days, not weeks, so you won’t have to spend more sleepless nights worrying about foreclosure or how you’re going to pay your bills. You can let go of all that stress, and also save your credit from any more damage.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

Having late payments on your home will bring your credit score down, but once you’ve sold the home your credit score will begin to come back up. Just make sure you pay all your bills on time going forward, and you’ll see the score rise until it’s back into a good range. A foreclosure, though, won’t allow your score to come back up as quickly. You’ll be stuck with a low credit score for years, and that can make life a lot harder than it would be otherwise. Fortunately, you can avoid that credit damage by selling the home instead of letting your lender foreclose on it.

Having property for sale can be stressful, especially when you need it to sell quickly. Facing foreclosure is emotionally draining and financially devastating, but there is always hope. By working with an investor or company that buys homes for cash, you may be able to get out from under your home and its mortgage, so you can keep a foreclosure off of your record. That means your credit won’t suffer the kind of hit you were worried about, and you can move on to rent or even purchase a home that fits into your budget more comfortably.

Related Posts:

 

#REI  #RealEstateInvesting #HelmsREI

Short Sales: How Do They Work in Pensacola?

Short sales aren’t the most desired option for getting rid of property, but they have become a reality for many people. These types of sales occur when the owner of the property is trying to sell the property for less than what he or she owes on it. The mortgage company has to approve the sale, since it will not be getting all the money owed to it from the transaction. Some mortgage companies in the Pensacola, FL area are much easier to work with than others where short sales are concerned.

If you’re considering a short sale, and you’ve worked with your bank or other lender to make sure you can get approved for one, the next thing you need to do is sell your property. The catch is that you need to sell it fast. If you can’t get a short sale to go through within a particular length of time, you’ll be facing foreclosure. While both of those events are hard on your credit, going through a short sale is often less damaging. To find a buyer quickly there are some things you can do. For example, you can make your home stand out from all the other properties for sale, either by price or some other factor.

Screen Shot 2018-02-05 at 4.00.05 PM

Often, though, that really doesn’t move things along as fast as you would like. There is so much MLS real estate available to buyers, that it can be easy for your home to be overlooked. Additionally, many buyers shy away from short sales, because they know those kinds of sales can be difficult to complete. The bank may not be overly willing to work with the seller, and that can mean a sale that should have completed in a couple of months can take two or three times that length of time. That’s frustrating for both buyer and seller.

To get around some of the issues that come with short sales, you can list your home for sale by owner and look for a company that buys property for sale for cash. That way you don’t have to worry about paying real estate commission, and you won’t need to wait to see if a buyer can get a mortgage approved. Instead, you can get a cash offer that can be closed in a matter of days, instead of weeks. As soon as your bank agrees to the short sale amount, you’ll be on your way to getting out from under the financial burden of the property. That’s a good feeling, and can help you move forward.

Don’t assume you can’t find a buyer. Companies that buy houses in the Pensacola, FL area are great choices for people who are trying to short sell. The bank will have to agree to the sale and to the price, but once that has been done, a short sale works just like a regular sale. Buyer and seller come to the closing table, papers are signed, and the buyer becomes the new owner of the property. The seller’s obligation is over at that time, unless the bank decides to pursue the seller for the difference between his or her mortgage balance and the sales price of the property.

REI Strategies. Lessons Learned. How-Tos. No Spam…Learn More.

The faster and easier the home can be sold, the less stress you’ll have as a seller. Banks aren’t generally very happy to do short sales, but with a cash buyer and a fair price, they may be more likely to do so. Finding an investor or a company to buy your home without all the usual hurdles, like getting a mortgage, can help your short sale go as smoothly as possible.
Related Posts:


#REI  #RealEstateInvesting #HelmsREI