1. real estate

TheAZREIA Advantage
Arizona Real Estate Investors Association Newsletter
“AZ Real as it Gets”
APRIL 2015
Contents
Executive Director
....................2
Legal Expert . . . . . . . . . 3
Property Management
Expert
....................4
Self-Directed IRA Expert
....................6
Title Expert
....................7
Lending Expert . . . . . . . 8
Monthly Meetings
....................9
Calendar of Events
. . . . . . . . . . . . . . . . . . 10
Legally Speaking
. . . . . . . . . . . . . . . . . . .10
Classifieds
. . . . . . . . . . . . . . . . . . 11
Meetings at a Glance
. . . . . . . . . . . . . . . . . . .12
Arizona Real Estate
Investors Association
1841 North 24th Street
Suite 10
Phoenix, AZ 85008
480.990.7092
fax 480.990.7017
www.azreia.org
Ranking the Top Real Estate Investing “Jobs”
this lofty ranking primarily because of the lifestyle
benefits and virtually complete lack of liability and
I ran across the annual list of the best and worst jobs
exposure. If you are good at wholesaling, it is one of
for 2015 according to CareerCast.com. Naturally, real
the world’s most profitable part-time careers. First of
estate investing wasn’t on the list, probably because it is
all, it primarily only takes you. You only need a small
considered investing, but more likely because it is
team. There are virtually only two skills that are needentrepreneurial. Most of the jobs on the list were ones
ed and both can be learned – marketing and
where you have a boss.
negotiations. You can be successful with little to no
funding. Fundamental to success is your level of husIt did peak my interest about what the best and worst
tle. There are countless stories over the years of the
“jobs” are in real estate investing. So, I thought I’d give
wholesaler who completes a handful of deals over a
it some thought. Mind you, there is absolutely no
two month period and takes the rest of the year off.
methodology to my ranking, no
When the money runs out,
scientific study and no mathethey do it again. Now this
matical algorithm to how I
Stuart Gethner
may not be the lifestyle you
arrived at the list. Just my keen
want, but for some it is the
Uncovering Acres of
powers of observation and the
ultimate life of independence.
fact that I took time to form an
Diamonds
in
Your
Backyard
opinion e. I invite you to do
#3 Private Money Lender:
the same. It could be fun to get
May 11th - Phoenix
This one is on the list because
a lot of investors’ opinion on
of what you don’t have to do
May 12th - Tucson
this subject, so go tell the world
and the control you possess,
what you think.
not to mention the ROI. You
by Alan Langston
Top 5 Ranking of Real Estate Investing “Jobs”
#1 Buy & Hold Using a Property Manager:
“Show me the money!” That popular line from Jerry
Maquire pretty much sums up owning rental property
and having someone else do most of the work. True
“mailbox money”. The strategy that provides cash flow
and wealth building. Let’s see… Someone is paying
you to buy you a house that probably grows in value
while they are doing it. The asset adjusts for inflation
in terms of rent and appreciation. Once you properly
set up all the ownership aspects of owning rental property, you basically forget that part. Someone else
handles most of the daily operations which is the ugly
part. Sure you pay for it, but a good property manager
is worth every penny. If your property manager does
their job correctly which primarily consists of properly
screening the tenants, enforcing the lease and maintaining the property, your risk of loss is minimal.
#2 Wholesaling (Individual): I bet a lot of you will
take exception to wholesaling being ranked #2. It takes
don’t have to find the deal, rehab the property or market the property. You kind of sit back and wait for the
deal to come to you. You analyze it. Determine if you
want to participate, and the amount of risk you are
willing to take. You set the terms. It is a beautiful
thing. Once you have your “stable” of investors bringing you deals it gets even easier. Oh, I almost forgot,
you’re protected by the real estate itself. It is also easy
to do in your self-direct IRA.
#4 Buy & Hold Self-Managed: All the really good
stuff detailed in #1 above, but you want to do the
work. Congratulations! You just got yourself a job and
a pretty thankless one at that. Okay, I admit you can
save some money managing your own properties and
if you have enough of them this can be a very wise
choice. Also, I understand that it is challenging finding
a good property manager. I further understand you
feel that no one can take care of the property as well as
you. But, it is a job and that fact is why it is ranked
lower on the list. You will need to have the personality
to deal directly with tenants, be on call 24/7, build a
____________________________________________________________________Continued on page 2
ExecutiveDirector’sMessage
Best & Worst Jobs – Compared to Real Estate Investing
Naturally, any list of the best and worst will cause debate and lots
of it. Since we are blessed to be real estate investors and for the
most part control our own destiny, I thought you may be
interested in what CareerCast.com thinks are the best and worst
jobs for 2015. In creating the ranking they considered
Environment, Income, Outlook, and Stress. I certainly don’t agree
with them regardless of the methodology used especially with the
ranking of enlisted military, but that just proves my point about
debate. As you read through the list, think about how real estate
investing is better than even the best jobs. Consider things like
freedom, pride of work, impact on the community, helpfulness to
others, earning potential, etc. To me, real estate investing should
possess the #1 slot, but then again we don’t think of real estate
investing as a job.
Top 5
4. Statistician: Tabulates, analyzes, and interprets the numeric
results of experiments and surveys.
5. Biomedical Engineer: Analyzes and designs solutions to
problems in biology and medicine, with the goal of improving the
quality and effectiveness of patient care.
Bottom 5
200. Newspaper Reporter: Covers newsworthy events for print
publications.
199. Lumberjack: Fells, cuts, and transports timber to be
processed into lumber, paper, and other wood products.
198. Enlisted Military Personnel: From serving food in the mess
hall to fighting a battle on the front line to avoiding land mines
along the path to a village, the duties a soldier carries out have
very different levels of responsibility.
1. Actuary: Interprets statistics to determine probabilities of
accidents, sickness, and death, and loss of property from theft and
natural disasters.
197. Cook: Oversees the daily food preparation at restaurants and
other places where food is served. They direct kitchen staff and
handle any food-related concerns.
2. Audiologist: Diagnoses and treats hearing problems by
attempting to discover the range, nature, and degree of hearing
function.
196. Broadcaster: Prepares and delivers news and related
presentations over the air on radio and television.
3. Mathematician: Applies mathematical theories and formulas to
teach or solve problems in a business, educational, or industrial
climate.
Have an opinion? It will make for great networking discussions at
the next AZREIA or Phoenix Real Estate Club meeting.
Ranking the Top Real Estate Investing “Jobs”
team, develop business relationships and
more. You will also need to develop skills
and stay up to date on landlord tenant law.
#5 Fix & Flip: A good argument could be
made that Fix & Flip should be higher on
the list. Considering the amount of money
you can make, the cash on cash return, use
of other people’s money and the fun factor,
I’d understand if you’d place it higher. The
fact is this strategy is a job. It generates
income along with the tax consequences. It
2
requires an on-going pipeline of possible
deals to feed the machine and you need an
excellent team around you including contractors you can trust. Rehabbing is also the
strategy that is most susceptible to market
changes. However, it may be the most fulfilling of the strategies.
There you have it. The Top 5 Real Estate
Investing “Jobs”. Jobs is in quotes because
we’d probably agree that investing in real
estate isn’t like a normal job. Some of the
www.azreia.org
Smarter investing,
Alan Langston
Continued from page 1
strategies like Buy & Hold aren’t jobs at all.
True jobs are those that generate income.
So, Fix & Flip and to some degree
Wholesaling are jobs. There are several other
real estate investing careers that didn’t make
the list. Maybe they are on your list. Have
an opinion? It will make for great networking discussions at the next AZREIA
or Phoenix Real Estate Club meeting.
Smarter investing,
Alan Langston
The AZREIA Advantage
AZREIA Advantage:LegalExpert
Know Your Creative Real Estate Transactions
Mark B. Zinman,
Attorney
Williams, Zinman
& Parham P.C.
by
Mark Zinman
(480) 994-4732
www.wzplegal.com
Investors I speak with are quick to tell me
that they are looking at alternative means
for securing properties because the number
of trustee’s sales is down and because the
prices at the trustee’s sales are too high.
This has been the case in the market for a
while. While this means that less investors
are interested in trustee’s sales, there are now
opportunities to be had in excess proceeds.
Any time the amount paid at the trustee’s
sale is more than what was owed on the
promissory note, there is an opportunity to
be had.
If a home sells for more than what is owed,
the trustee has a statutory obligation to
account for the excess funds. This usually
means the trustee will file a court action for
Landlord Issues
Evictions
Fair Housing Complaints
Litigation Defense
The AZREIA Advantage
interested parties to make claims to the
funds. See, A.R.S. § 33-812. By statute,
the trustee has to pay-out the proceeds following a priority schedule. For example,
the trustee is to pay the costs and expenses
of the sale, to other obligations undertaken
by the lender before the sale, and then any
condominium, homeowner’s association
and to other lienholders. If there are any
excess proceeds remaining, the trustee is to
notify the former borrower. Instead of
applying the proceeds pursuant to these priorities, a trustee can elect to deposit the
excess proceeds with the county treasurer
and start an interpleader lawsuit in Superior
Court. The lawsuit would ask the court to
determine who gets the money, and letting
the interested parties litigate over it. The
trustee is then discharged from further obligations.
The statutory scheme for such lawsuits
actually contemplates and permits uninterested third parties to assist people with
claims to collect their money. Many former
owners are either unaware of these rights or
they choose not to pursue the amounts
because they are think that the litigation is a
Investor Issues
Suits for Trustee’s Deed
Defending Quiet Title
Actions
www.azreia.org
hassle or don’t want to pay an attorney to
file the Application. As a result, many
entrepreneurs set up companies to assist
with the process. The company need not
be a law firm, but a lawyer or the former
owner is required to file the actual court
documents.
A.R.S. § 33-812(P) addresses such action.
It says that a claimant may enter into an
agreement with a third party to pay for or
assist with the recovery of excess proceeds.
The parties must have a written agreement
and it cannot be entered into within the
first 30 days after the trustee’s sale. The
company can charge a fee, but the fee must
be reasonable and anything over $2,500 is
presumed unreasonable.
The process to collect the excess proceeds
isn’t difficult, but: (1) it requires an attorney
or the interested party actually file pleadings, and (2) that they follow the statutory
steps to get the money. A smart investor
will find former owners who may have
excess proceeds and are not interested in the
hassle of obtaining them. Many owners
may not even know that this possibility
is available to them.
(480) 994-4732
www.wzplegal.com
3
AZREIA Advantage:PropertyManagementExpert
Do Not Forget Your Tenants
Ryan Haueter
Property Manager
Caldwell
Property Solutions
www.aHouseisBetter.com
by
Ryan Haueter
2500 S. Power Rd.. Ste. 218
Mesa, AZ 85209
Direct (480) 212-7083
Fax (480) 212-7084
As a landlord, we’re all aware of the many
issues that frequently happen with
unreliable tenants. Late rental payments,
disturbing the peace, illegal activity, and a
general disregard for the property are all
problems that typically occur in the real
estate industry.
Many times, we’re so focused on dealing
with the problems at hand for property
management that we overlook the tenants
that always pay on time; the tenants that
take good care of their property, the
tenants that are
considerate of their
neighbors. How do we
make sure that those
tenants are happy? That
they feel appreciated?
That they know that we
want them to remain
tenants as long as
possible?
they are appreciated:
• Be sure to take their concerns seriously.
If your tenant calls to complain about
loud music at midnight, or
unauthorized vehicles in their parking
spot, take prompt action and make sure
that you advise them of both the action
and the outcome; don’t make them
complain more than once about the
same issue.
• Fulfill the promises that you make. If
you promise a tenant a new dishwasher
or new carpeting, be sure to fulfill that
promise. Don’t make them ask you
about it. Just schedule a time and do it.
• Respond promptly to any and all
maintenance requests. If a tenant is
responsible and takes good care of the
property, they shouldn’t have to wait
three months to have their stove
repaired.
• Bend the rules – just a little. Should
you waive a late fee – due to a mix-up
with the post office for a reliable tenant
that is never late with their rent? While
opinions vary, remember that a good
tenant is like a good customer, and it
may be appropriate to bend the rules
now and then. That’s not
discrimination; that’s good business
sense.
• Give them a gift. A gift card to a local
store at lease renewal time, or a card on
their birthday will make a tenant feel
appreciated, and build loyalty in the
process.
At the end of the day there are many ways
to make a good tenant feel appreciated,
with tenant stability, timely rent payments
and someone actually taking care of your
property is the ultimate payoff. What
more could an investor want?
Every tenant is different
but there is a good
chance those tenants are
feeling unappreciated;
which means that they
will have no reason to
stay at your property if a
better opportunity opens
elsewhere. It’s so
important to remember
that a rental agreement is
between two separate
parties, and just like any
of us, our tenants like to
know that they’re
appreciated.
Here are just a few ways
to show your tenants that
4
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The AZREIA Advantage
Tim Walch, CPA PC
Certified Public Accountants
Creating Client Wealth Through Lower Taxes
• Tax return preparation for
Real Estate Investors at
reasonable rates!
• Tax Planning
• Bookkeeping Services
• Bookkeeper Training Program
• Payroll Taxes
• Tax Segregation Studies
Counseling
We are Real Estate Investors Ourselves
8160 N. Hayden Rd., Ste. J-108 • Scottsdale, AZ 85258
Phone: (480) 557-0561 • Fax: (480) 718-8495
[email protected]
“Helping Investors is our Passion”
BUY & HOLD SPECIALISTS
Let us help assist you in achieving your Real Estate Goals. We are Realtors® who are real estate
investors with experience and who specialize in BANK OWNED, SHORT SALE PROPERTIES, Buy &
Hold, and Landlording. Let us help you navigate through the complexities of SHORT SALES &
BANK OWNED PROPERTIES from our specialized training and hands on experience.
Dawn Kirkpatrick,
• Diamond Club Award
(Top 3%) - 2013, 2012
• Executive Club Award
Chris Kirkpatrick,
(Top 10%) - 2013, 2012,
CRS, ABR, CRIR, CSSN, CSSPE, e-Pro, SFR, RSPS
2011, 2010
21040 N. Pima Road
• Silver Team Award - 2012
Scottsdale, AZ 85255
• Bronze Team Award - 2011
• Scottsdale Association of
Bus: (480) 585-0101
Realtors Top Producer - 2012
Chris’ Cell: (480) 326-2454
• Top 1% of Agents in MLS [email protected]
1st Half 2013
SFR, CLHMS, CNE
Dawn’s Cell: (480) 600-0010
[email protected]
AZ.R.E.I.A., Inc. (the “Association”) does not: (1) render legal, tax, economic, or
investment advice, (2) investigate its members, or (3) represent or warrant the quality of goods or services provided by its members, the honesty, integrity, reliability,
motives and/or resources of its members or their officers, directors, managers,
employees, agents, and/or contractors. Consult your legal counsel, accountant, and
other advisors as to risks and legal, tax, economic, investment and other matters concerning real estate and other investments. Members will comply with the Code of
Ethics of the Association.
The AZREIA Advantage
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5
AZREIA Advantage: Self-DirectedIRAExpert
Draft Your Real Estate Investor Dream Team
J.P. Dahdah
Chief Executive Officer
Vantage Self-Directed
Retirement Plans
www.VantageIRAs.com/AZREIA
by
J.P. Dahdah
20860 N. Tatum Blvd. #240
Phoenix, AZ 85050
Phone (480) 306-8404
Fax (480) 306-8408
Being a “self-directed” investor doesn’t mean
you have to go through your financial journey
alone. In fact, very few high-net worth individuals would tell you that they reached their
level of financial success by themselves.
Making sound financial moves consistently
requires a high level of financial literacy and
it’s difficult to master a multitude of investment, tax and legal strategies by yourself. If
you are going to excel at the money game, it is
essential that you identify an effective group of
professionals that can add value to your retirement planning by sharing their knowledge
and experience in their area of expertise. Let
me be clear, I am not suggesting that you delegate your financial decisions to third party
advisors. What I am stating is that you should
surround yourself with a team of experts that
can help YOU make the most informed decisions with your savings. You should still
maintain total control at all times. Subject
matter experts and advisors should be by your
side to provide knowledgeable input, information, insight and options for consideration.
Ultimately, they report to you and then you
make the final decision based on your level of
comfort, understanding and confidence resulting in the most suitable direction for you and
your family. You may be thinking “I already
have a CPA, Financial Advisor and Attorney,
so I’m set. I have my team established
already.” Wrong. That isn’t sufficient. You
must go deeper…much, much deeper.
For example, let’s assume that you have decided to open a Vantage Self-Directed IRA to
invest in real estate. Your dream team should
include, but not be limited to, the following
list of knowledgeable professionals.
1. Registered Investment Advisor
(RIA)/Financial Planner: This individual
is responsible for ensuring that your real
estate IRA strategy is in line with your
comprehensive financial goals and that the
expected rate of return will help you
achieve your defined retirement objectives.
6
I encourage you to seek a fee-based or feeonly advisor that can prove that they
embrace the methodology of incorporating
alternative investments, such as direct real
estate investments, into a well-diversified
investment portfolio. If your Advisor
seems allergic to alternative asset strategies,
it’s probably a good time to re-evaluate his
or her role on your team. You may have
out grown them.
2. Certified Public Accountant (CPA): This
individual is responsible for confirming
that your real estate IRA strategy will not
increase your tax exposure and that you’re
prepared to cover any current and/or future
tax liabilities. Should your real estate IRA
strategy include leverage or active fix and
flip transactions (i.e. potential for dealer
status), your CPA should be able to educate you and analyze the potential impact
of Unrelated Business Income Tax (UBIT)
and Unrelated Debt Finance Income Tax
(UDFI) to your IRA.
3. Real Estate Attorney: Having a family or
general business attorney won’t cut it. You
need legal counsel that specializes in real
estate. Someone that can provide guidance
on real estate contracts, debt instruments,
eviction rules, leases, landlord laws, deeds,
ownership structures, etc.
4. Self-Directed IRA Attorney: Identifying
an attorney that specializes in Self-Directed
IRA legal strategies is also critical. This
individual is responsible for educating you
about prohibited transactions, disqualified
persons for your IRA, appropriate investment ownership structures (i.e. Limited
Liability Companies, Limited Partnerships,
Private Placements, Syndications,
Investment Funds, Private Stock, etc.)
Working with attorneys before you make an
investment to help you minimize your
potential liabilities is much more cost effective than hiring them to fix problems after
the fact, so please do yourself a favor and
don’t skimp in this area. A great attorney
in this area is worth their weight in gold. I
suggest you follow my personal mantra
about attorneys… “If you can’t afford hiring the appropriate attorney(s), you can’t
afford the investment.” Meaning, if you
are seeking to save yourself $200-1,000 by
not engaging an attorney to evaluate your
investment legal strategy, you probably
shouldn’t risk directing any higher dollar
amount into any investment!
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5. Estate Planning Attorney: A third
Attorney? Yes, a third attorney. This individual is responsible for ensuring that your
IRA investment is aligned with your overall
estate plan. They will counsel you on your
various IRA beneficiary options and suggest
the most tax efficient structure given your
wishes upon death. Even if you are not
married or have children, you still have an
estate and I suggest you make certain that
your hard earned savings are inherited by
your loved ones and not the Internal
Revenue Service.
6-10: See complete article on the AZREIA
blog at AZREIA.org
You may be looking at this list of ten professionals and thinking “OMG, that seems like a
lot of work, meetings and costs. I don’t have
enough time to meet with all of these advisors.” There is no denying it, it is a lot of
work and there are various costs involved. No
one said building wealth was quick or easy.
The truth of the matter is that these are the
steps needed to invest prudently. There are no
shortcuts to attaining true wealth. Remember,
this list is relevant to someone making an IRA
investment in real estate. If your alternative
investment appetite is something else, there
will be a slightly different list perhaps but taking the step of drafting a dream team of
experts in each key area shouldn’t be overlooked. As you gain more investment
experience and you identify a group of experts
you trust and feel comfortable with, this
process will increasingly get easier and more
proficient. Most investors already have a head
start with this and already have a short list of
these professionals on their side and only need
to draft a few more to complete their power
team. Regardless of whether you have a few
or you are starting from scratch, you may be
wondering “What is the best way to find the
right professionals?” The best way is to get a
referral from a trusted source. Find someone
that is already at the financial level you are
seeking to obtain and ask them who they use.
If they are wealthy, chances are, they have
already built their dream team and can share
their contacts with you.
The great news about being an AZREIA
member is that you have many of these professionals, if not all, at your fingertips during
monthly meetings. Good luck in drafting
your real estate dream team and happy
investing!
The AZREIA Advantage
AZREIA Advantage:TitleExpert
What is Going On with FHA’s 90 Day Flip Rule?
Dianna Jackman
Sr. Escrow Officer
Branch Manager
Chicago Title Agency
14200 N. Northsight
Blvd., Suite 100
Scottsdale, AZ 85260
by
Dianna Jackman
Phone: 480-998-9298
FAX: 480-998-9307
The anti-flipping waivers expired on
January 1, 2015. What does this mean for
the investors? Well, you now have to be
aware that if your end buyer is obtaining
FHA financing, they will be slowing you
down and adding to your holding costs!
For those who utilize FHA financing, the
90 day restrictions began on the 1st of
January. There will be some exceptions
such as:
• HUD properties under REO
• Sales by other federal agencies of REO
properties
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• Sales of properties by non-profit
organizations approved for resale by
HUD
• Sales by state or federal financial
institutions such as Fannie, Freddie or
GSE
• Sales of HUD properties where the
President declares it a federal disaster
area
There are many myths surrounding FHA
and what you can and can’t do. The most
important thing to understand is that FHA
considers date of sale the day you execute
the contract with your FHA buyer. What
this means to the investor is that once you
take title (day of recordation) the clock
begins to tick. In order for your buyer to
obtain a loan through FHA the contract
between you and your end buyer CANNOT be entered into until day 91. All the
same rules apply as in the past. The rules
have not changed they just waived the
rules for a few years and now they are
back. FHA does not allow assignments.
www.azreia.org
The cap without lots of justification (i.e.
Inspections, additional appraisals etc.) is a
19% increase in sales price from time of
purchase to time of sale. If you are making
a profit of 20% or more, be very prepared
to jump through some hoops to get the
deal done. FHA will not allow double closes or fund through transactions either. If
you plan on marketing your property to
FHA buyers you should be prepared to
add to your holding time and to acquire
the property with cash or hard money. Be
sure your P&L accurately reflects the additional cost for holding so you have a
realistic expectation of your profit. You
should have your hard money partner
lined up if you can’t buy cash. Right now
hard money is fairly inexpensive. Don’t shy
away from these buyers just be prepared
and do your homework to be sure the deal
works for you and your business model.
As always, Chicago Title is a resource of
information and technology tools and
always just a phone call away!
7
AZREIA Advantage: LendingExpert
Different Situations for Every Borrower
Summer is coming
and the market is
beginning to heat
up more and more
Peoples Mortgage Co.
with each week. We
2500 S Power Rd.
are beginning to see
Bldg. 11, Ste. 225-2
Mesa, AZ 85209
multiple offers and
bidding wars again
by
Phone: 480-735-4095
as the media has
Andrew Augustyniak EFAX: 480-882-0877
created a “hype” to
“get in while interests rates are so low”. With that being said, I
wanted to touch again on different loan scenarios that could
apply to anyone at any given moment. Like in my previous
article, we run into so many tricky situations in which we
become problem solvers, in addition to loan officers. Below are
three different situations that may arise in the loan process.
Andrew Augustyniak
Licensed Mortgage
Loan Originator
Out of the many unusual situations I see, these are some of the
more common from that list. If you have any unusual situations, don’t hesitate to run them by me anytime.
What if you have a HELOC and want to do a refinance?
There are certain times you can consider the loan a rate and term,
and other times you must consider it cash out refinance.
• Conventional Rate and Term Refi – Only if HELOC was
used to purchase the property. We must document that the
funds used from the HELOC were used to acquire the property.
• Conventional Cash Out Refi – HELOC was not used to purchase property
• FHA Rate and Term Refi – A HELOC over 12 months old.
• FHA Cash Out Refi – If active HELOC with current disbursements over $1000 in the past 12 months.
• VA IRRL (Interest Rate Reduction) – Not eligible for IRRL
Refinance
• VA Cash Out Refi – If paying off any other type of financing
than a VA insured mortgage, it is considered a cash out.
Can a debt that has been awarded to another party be
excluded from my debt to income ratio?
Yes, Court-Ordered Assignment of Debt. When a borrower
has outstanding debt that was assigned to another party by
Court order (such as under a divorce decree or legal separation agreement) and the credit does not release the borrower
from liability, the borrower has a “CONTINGENT
LIABLITY”. The lender is NOT required to include this
contingent liability in the borrower debt to income ratio.
8
The lender is also not required to evaluate the payment history for the assigned debt AFTER the effective date of the
assignment. The lender cannot disregard the borrower’s payment history for the debt BEFORE its assignment.
If I work seasonally, do I have to be on the job to count my
income?
No, but if the borrower is not back at work be aware that
you will not have a current year to date paystub showing the
minimum of 30 days of year to date pay to meet the AUS
requirements and will have to “MANUALLY DOWNGRADE” the file. This will also require all other increased
documentation of manual underwriting.
What is considered Seasonal Employment (umpiring baseball games in the summer, working at a department store
during the holiday season, etc.) is considered uninterrupted
employment and may be used in qualifying the borrower if
you can document the borrower has worked the same type
of job for the past two years and expects to be rehired during the next season.
Unemployment Income can also be used as effective income
with Seasonal Employment if you can document receipt for
most recent two years and there must be reasonable assurance that this income will continue.
Again, not all of these situations apply to everyone but they do
pop up on a frequent basis. If you have any questions, please
don’t hesitate to contact me directly.
Quick Tips:
• Be aware that you will be asked to get most of your financial
documents
• Pre-Qualifications take between a few hours to a few days
depending on the borrower and borrower cooperation in
gathering documents, investors with multiple business and
properties usually take longer
• Be diligent in gathering your documents, don’t be lazy and
drag it out!
• Don’t get mad at your Loan Officer, it’s not his fault.
• Let go of the past, we are not in 2007 anymore
.
“Growing our business, one satisfied customer at a time”
www.azreia.org
The AZREIA Advantage
Monthly Meetings
AZREIA Phoenix Meeting
Monday, May 11
Celebrity Theatre
AZREIA Prescott Meeting
Tuesday, May 5
Yavapai Title
AZREIA Tucson Meeting
Tuesday, May 12
Tucson Assn of Realtors
Phoenix Real Estate Club
Wednesday, May 26
24th St. Conference Ctr.
Our Phoenix and Tucson meetings feature learning from an
AZREIA member with an exceptional track record of success.
Recent wholesale, fix & flip and buy & hold deals will be used to
teach successful investing techniques. Also, in a great rental market
should you consider Section 8 tenants? Information is critical.
Find out everything you need to know about this viable rental
strategy.
Phoenix Workshop – Section 8 Rentals
We are currently in a great rental market. Demand is strong and
rents are very good. So, why should I consider Section 8? That’s
one of the good things about AZREIA. Our job is to expose you
to different ways to invest and new techniques. By the time you
leave you will fully understand Section 8 rentals, whether they are
right for some or all of your portfolio, and how to go about participating in this segment of the rental market. We pride ourselves on
bringing experts to our stage to inform and educate you and this is
very true this time, as well. Elizabeth Morales, Housing Manager
Section 8, Phoenix Housing Department, is our presenter. She is
an expert on Section 8 housing.
lies’ kitchen tables. In addition, he has participated in Lease /
Options, Subject To, Wholesaling, Fix-&-Flips, and his personal
favorite, Buy & Holds.
Phoenix Real Estate Club – The Best Real Estate
Investing Networking Anywhere!
Haves & Wants, Structured Networking activities and the Market
Discussion all combine to make the Club an integral part of any
active investor’s month.
Prescott Main Meeting – Update on Commercial in
the Prescott Area
“Commercial follows roof-tops” is commonly stated, but sometimes commercial development is needed to bring in the labor
supply that will buy homes. In this session, a leading commercial
appraiser in our area, Robert Huck, MAI, will share with us some
of the commercial activity and trends he sees. This can be interesting not only to a commercial investor, but also to a residential
investor, as it relates to growth patterns and economic development in the area. In his presentation, Bob will share answers to
the following, and more:
• What market segments are attracting attention?
• How do commercial office and medical office prices compare
with peak prices?
• How do commercial land prices compare with peak prices?
• What sizes of medical and office spaces seem most in demand?
• Which commercial segment was hit the hardest in the downturn?
• Is there life in multi-family development?
• What part of Prescott is strong for retail?
Market Update with Alan Langston
Phoenix Agenda
The latest in trend analysis for the US, Arizona and Greater
Phoenix including existing homes, new homes, foreclosures, REO,
short sales and traditional sales. Also, a complete analysis of the
economic condition of Greater Phoenix with trend analysis of
employment data, bankruptcies and current events shaping the real
estate investing market. This is must know information for the
serious real estate investor.
5:15
6:00
6:45
9:00
Phoenix & Tucson Main Meetings – “Uncovering
the Acres of Diamonds in Your Backyard”
with Stuart Gethner
5:15 – Open Networking
5:45 – Networking: Investor-to-Investor, I Have – I Want,
Tucson Market Discussion
7:15 – Main Meeting
8:30 – Adjourn
Stuart will present current Wholesale, Fix-&-Flip, and Buy &
Hold transactions performed in your neighborhoods. From these
local examples Stuart will:
• Clarify the Four Keys to Winning Negotiations
• Illustrate Various Unintended Consequences
• Show how to AVOID the 3-Fatal Flaws of Real Estate Investing
–
–
–
–
Workshop
Trade Show & Guest Orientation
Main Meeting – Market Update & Featured Presentation
Adjourn
Tucson Agenda
Prescott Agenda
5:30 – Networking, “Haves and Wants” & Market Overview
6:00 – Main Meeting
7:15 – Adjourn
Phoenix Real Estate Club
Stuart Gethner, RPh, started his business 15 years ago and today
real estate investing continues to be his passion. Although Stuart
primarily focuses in single-family residences, he has also invested in
commercial, industrial, land, and hard-money lending. He has
been to various courthouse steps, Trustee Sales and countless famiThe AZREIA Advantage
5:30 – Open Networking
6:00 – Investor to Investor Networking: I Have – I Want
Market Discussion
7:15 – Main Meeting/Discussion
8:30 – Adjourn
www.azreia.org
9
AZREIACalendarofEvents
Check www.azreia.org for the current schedule.
•
•
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•
•
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•
Q:
A tenant called me to claim that their sink was backed up
and beginning to overflow on the kitchen floor. I was in
the area, and I immediately went over there to fix the
problem. I was able to stop the overflow. A few hours
later, the problem returned and I called the plumber to
come over and fix it. After the plumber left, the tenant
complained that the area around the sink needed to be
professionally cleaned because it smelled like mildew. I
personally offered to clean the area and bleach any
problems. The tenant said no and that they would do it
themselves. The tenant is now tendering his rent, but
wants to deduct $150 for the cost of his time and
cleaning supplies. Do I have to accept the lower payment
because of the flooding?
A:
No, you do not have to accept the partial payment of the rent.
Tenants often get confused and expect that a property has to be
in perfect working order and if any problem arises, they are
immediately entitled to compensation. That is not usually the
case. Under the Arizona Residential Landlord and Tenant Act, a
landlord is to provide a fit and habitable property; further, a
landlord is required to address and cure any problems in a
reasonable time period. No landlord can guarantee a perfect,
problem-free property. A landlord’s liability usually arises when
they fail to timely take action when notified of a problem. In this
case, you immediately went to the unit, had it fixed the same day
and offered to clean any problem. You are not in breach and the
tenant has to pay the full rent.
Information contained in this article is for informational purposes only and should not be considered legal advice.
You should always contact an attorney for legal advice and not rely on information published here.
10
www.azreia.org
The AZREIA Advantage
Classifieds
Complete listings online: www.azreia.org
Note: All real estate advertising in this newsletter and on our website is subject to the Federal Fair Housing Act of 1968. Please visit
www.azreia.org for complete notice on fair housing and for additional information on each property listed.
The AZREIA Advantage
www.azreia.org
11
Arizona Real Estate
Investors Association
1841 North 24th Street, Suite 10
Phoenix, AZ 85008
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Meeting May 11, 5-9 p.m.
www.azreia.org
AZREIAMonthlyMeetingsataGlance
Phoenix Workshop – Section 8 Rentals
We are currently in a great rental market. Demand is strong and rents are very good. So, why should
you consider Section 8?
Market Update with Alan Langston
The latest in trend analysis for the US, Arizona and Greater Phoenix including existing homes, new
homes, foreclosures, REO, short sales and traditional sales.
Phoenix & Tucson Main Meetings – Uncovering the Acres of Diamonds in Your Backyard
Stuart Gethner will present current Wholesale, Fix-&-Flip, and Buy & Hold transactions performed in
your neighborhoods. From these local examples Stuart will clarify the four keys to winning negotiations, illustrate various unintended consequences and show you how to avoid the three fatal flaws of
real estate investing.
Phoenix Real Estate Club
Haves & Wants, Structured Networking activities and the Market Discussion all combine to make the
Club an integral part of any active investor’s month.
Prescott Main Meeting – Update on Commercial in the Prescott Area
A leading commercial appraiser will share commercial activity and trends.