It occurred to me this morning that I have not shared a post about my resource for new homebuyers. A few years back I created a Udemy course and pdf checklist that educates and guides new homebuyers about the process. Check out the course here.
If you have any specific questions, comment below or contact me @ (786) 327-6326. I hope this helps! Happy house hunting!
Have you been thinking about making a career in real estate?
There are many reasons to love a career in real estate, but there are many negatives too. There’s no such thing as a “perfect” career, but if you can get to 85% (and you’re having fun), you’re doing well!
Here’s a Bird’s Eye View of 5 Benefits of a Career in Real Estate:
- Easy Entry.
- No Boss.
- Good Income.
- Flexible Schedule.
- Job Satisfaction.
- Access to Investments.
Here Are A Few Negatives of a Career in Real Estate:
- Working Beyond 40 Hours a Week.
- No Regular Paycheck.
- You Need to Spend Money to Get Started.
- Not a Lot of Repeat Customers.
- Requires a Real Estate License and CE Credits Every Two Years.
In summary, you have to weigh your options before jumping into the pool of real estate. I’ve been a student and/or practitioner of real estate for 27 years and I still find it fun and fascinating to observe the changes happening every year. If you want to know more about this career, reach out to me. John@colemantanner.com
Now Hiring: firstname.lastname@example.org
¿Quieres aprender a leer y redactar informes legales en inglés? Puedo ayudar. Tengo un título en derecho y soy un profesor de inglés certificado con una década de experiencia en la enseñanza.
Encuéntrame en WhatsApp, IG, FB, Tik Tok y YouTube @johnwtanner y envíame un mensaje. Mi tarifa es de $ 20 por hora, pagadera por cashapp, Venmo o PayPal, para unirme a una clase de LegalESL de grupo pequeño (máximo de 10 estudiantes por clase). Envíame un mensaje para conocer los horarios y días disponibles.
Do you want to learn how to read and write legal briefings in English? I can help. I have a law degree and I am a certified English teacher with a decade of teaching experience.
Find me on WhatsApp, IG, FB, Tik Tok, and YouTube @johnwtanner and send me a message. My rate is $20 per hour, payable by cashapp, Venmo, or PayPal, to join in a small group LegalESL class (maximum of 10 students per class).
Message me for available times and days.
Taught by a non-licensed attorney who is a Florida certified English teacher with a decade of teaching experience and four college degrees.
1. Clay tile. AKA “Spanish tile” (my favorite) this material is considered the most attractive, but also more expensive. This roof will have a 50 to 100 year life expectancy, but is costly to repair.
Benefit: good wind resistance.
2. Steel Panels. This roofing material is less expensive than clay tile, but not as attractive.
Benefit: lower cost & good wind resistance.
3. Composition Shingle. There are many grades of shingle quality to choose from, they are the most affordable material, and they have a 20 to 50 year life expectancy. However, they are the least wind resistant.
Roofing Options: Solar Panels. When you are thinking about your roofing installation, you may want to consider adding solar panels. They may cut your electric bill, but you should consider the installation costs, as well as future repair and replacement costs. Also, they may be difficult to remove when repairing your roof and they are not attractive.
Perhaps when the technology expands to the point where the panels are embedded into the roofing materials, it will become a “must have.” For now, you may need to crunch the numbers closely before placing an order.
In closing, when designing your new home, you may be restricted by the developer’s rules on what roofing material you can use. Also, take into consideration your environment and how well your preference will blend in. Lastly, remember the old adage that you get what you pay for.
Ever wonder what it would be like to pitch a tent in Florida? Click on the link to learn more…
A real estate consultant is an advisor and counselor, one who can clarify your available investment options, as well as provide you with research and analysis to justify your decision-making. If you are feeling cloudy about your real estate holding, it’s probably time for you to get a third party’s perspective from someone who can shed light on your situation.
Q.1. What Does a Real Estate Consultant Do?
To perform well in real estate investing, you need to get some advice from a professional real estate consultant that is highly informed in the purchase and sale of real property, mortgage finance, income analysis, market valuation, tax consequences, legality, contract terms, risk, and feasibility studies of a proposed project.
With this knowledge, a savvy consultant can provide you with skillful guidance on real estate investing to help you amass a fortune. As such, these services are always in demand.
Are you interested in buying, selling, or leasing real property? Do you need assistance in defining your real estate goals and investment plans? Whether for passive income, retirement planning, or legacy succession planning, a real estate consultant can deliver investment options and strategies that a client can rely on to achieve their financial goals.
Q.2. How Much Does a Real Estate Consultant Charge?
Fees vary according to the amount of time involved in conducting market research, crafting investment options to choose from, and outlining holding strategies based on the investors wants and needs, as well as other factors, and the level of detail that is requested. The consultant may charge an hourly rate, a flat rate for services to be rendered within the scope of the assignment, or a hybrid of the two. Additionally, if the consultant is also operating as a broker, he or she may also earn a real estate sales commission for such buying, selling, or leasing services associated with a given transaction.
Q.3. How Does One Engage a Real Estate Consultant?
The consultant-client engagement usually begins with a request for information or request for proposal (RFP). On such request, the consultant will gather enough preliminary information to assess the prospective client’s real estate needs, then draft a proposal that defines the scope of work to be performed, the costs associated with the assignment, and any appropriate disclaimers and limiting conditions. The prospective client may then request changes to the scope of work to meet their needs and objectives during the consulting process.
After some back-and-forth negotiation on terms and price, the client will sign the final engagement letter and submit a nonrefundable binder deposit (usually 50% of the fee), with the balance due on invoice and submission of the completed assignment.
Coleman Tanner | Real Estate Consulting
John W. Tanner, J.D.|M.S., is the head of our real estate brokerage and consulting practice, as well as the managing broker in Florida. He is based in Miami and oversees all Florida operations.
John has worked across three sectors of the real estate industry, including loan origination and processing, residential and commercial property valuation, and residential real estate sales. He also studied hotel development while in graduate school at Florida International University’s Chaplain School of Hospitality Management.
While attending Florida Coastal School of Law, John took courses in residential and commercial real estate law, trusts and estates planning, and business law. Through a study abroad program, John attended the Universitè Du Auvergne in Clermont-Ferrand, France, where he studied French business law and international contract negotiations.
John has extensive experience in valuing residential and multi-family properties, as well as some experience appraising retail, hotel, and office/warehouse properties. He has worked for various banks and credit unions, private investors, homeowners, landlords and tenants. His team of appraisers completed valuations of over $500 million worth of real estate from 2004-2010.
To book an initial consultation, visit www.Calendly.com/jwtanner
For more information about Florida properties for sale or lease, visit www.colemantanner.com
New home buyers often fall in love with the model homes they visit because the builders hire interior designers to showcase almost every premiere feature they offer. As such, it is important to clarify what IS and what IS NOT included in the model that you buy.
Here is a list of typical upgrades offered by most new home builders:
- Coffered, Vaulted, or Raised Ceilings,
- Built-in Shelving, Alcoves, Art Niches, or TV Cut-outs,
- Bonus Room, Mud Room, Laundry Room, In-Law Quarters, or Sun Rooms,
- Covered Patio or Lanai, Wood Deck, Brick Paver or Concrete Slab Patio,
- Swimming Pool (with Option to Screen Patio),
- Landscaping (Front/Rear/Sides),
- Fireplaces and Mantles,
- Covered Porch,
- 1 to 3 Car Garage and/or “Porto Cochere” (carport),
- Dormers (real or faux), Shutters (real or faux), or Decorative Windows (such as “Bay” Windows),
- Skylights or Recessed Lighting, and
- Optional Siding (Brick, Stone, Stucco, or Log Siding). Note: I recommend you avoid buying a home with synthetic stucco, vinyl, aluminum, Hardy board (aka T-111 siding), or Masonite lap siding. These low cost options have aged poorly in the past and may cost you money for replacement when you want to sell, as well as lose its luster and reduce your home’s curb appeal.
Also, keep in mind what others are doing in your neighborhood. An appraisal rule of thumb to keep in mind is that if your home is the only one in the neighborhood that has a fancy “thing-a-ma-gig” that nobody else has, it will be deemed an “over improvement” and not be given weight to the bottom line market value of your home.
In closing, when negotiating the features of your new home, be sure to get the cost of each upgrade upfront and in writing and stick to your budget. Compare the builder’s costs versus doing it yourself, or consider the cost of outsourcing some of these optional items, such as the pool, on your own, post-purchase. But do keep in mind that any items included now will also be financed into your home loan at highly remarkable, low interest rates – in today’s market October, 2020 – that’s under 4% for a fixed 30-year loan.
Best of luck in your new home construction purchase!
Buying “new construction” is an exciting undertaking. Unlike buying an existing home, you’ll get to make it your own before turning the key for the first time. Here are ten tips to keep in mind as you begin your home building journey.
- Establish a Set Budget. When it comes to establishing a budget for your new home, being a prudent homeowner is highly recommended. Therefore, you should plan on paying a 20% down payment on your new home and your monthly housing expense (principal, interest, tax, insurance, and association fee) at 25% of your income.
- Get Everything in Writing. Having a lawyer review your initial contract and any subsequent amendments is highly recommended. Here are a few items to look for in the contract: (i) a “cooling off” period; (ii) payment schedule; (iii) timeframe for completion; (iv) included plans and specifications, warranties and insurance protection; and no blank spaces. Be clear about what changes are allowed once you “sign off” on the final plans. Two addendums you should include are (a) “all changes must be clearly documented & mutually agreed upon” and “time is of the essence.”
- Stay Informed. Ask the builder for regular updates. Have somebody take pictures of the progress so you have evidence of any issues that may arise.
- Be Patient. Delays will happen. This is a marathon, not a sprint.
- Prepare for Hidden Costs. Does the developer’s estimate include “Finishing Costs”? How about zoning or CDD fees? Does your estimate include utility hookups, such a electric and gas meters? What about internet service wiring and installation? Are there estimates for your exterior, such as landscaping, concrete decks or brick pavers, fences and entries, or a mailbox? Try to think of every expense associated with your new home so that your estimate is as close to perfect as possible and that you have adequate financing in place to cover every expense. Ask about closing costs and developer contributions, if any.
- Choose the Right Builder. It’s always a good idea to read online reviews, talk to residents in the new community about their experience, and see if any complaints are filed against them on USA.gov – consumer complaints, the Federal Trade Commission, and the Better Business Bureau. Also check to see if they are registered with the National Association of Home Builders. Lastly, are they good at communication? The last thing you want is to feel in the dark whilst waiting on your new home to be built.
- Hire a Private Home Inspector (HI). Look for a home inspector with a current or prior Residential Contractor or General Contractor license. This type of person will know all the building materials and methods used in the construction industry. Their job is to ensure the structure is built up to code and complies with the municipal and HOA regulations and CC&Rs. Having the new home inspected by a 3rd party will help you rest easy at night while you wait. There are four stages of construction which warrant an updated inspection: (i) Foundations & Footings: the HI will check the slabs, foundations, drains and form work; (ii) Framing: the HI will check that the walls are straight & level, verify room dimensions, and ceiling height and roof lines all conforming to the plans & specs; (iii) Lock Up: This is the stage where the windows and doors have been installed. The HI will check the frames, seals, window flashing, brick and mortar work, and electric and plumbing; (iv) Final Inspection (Pre-Handover): At this point your home should be ready for a Certificate of Occupancy. Your HI will check for final interior/exterior finishings, paint, tile, carpet, wood flooring, cabinetry, windows & doors, and hardware, as well as inspect the site to ensure it is clear of any remaining materials or debris.
- Create an Image File. You will be looking at plenty of options for creating your new home just the way you want it, and trying to convey a mental image of the vision for what you want each room to look like is quite tricky. So, why not save images that demonstrate what you want? This will help you communicate your requests to the builder and other 3rd parties more succinctly.
- Think About the Little Things. Having electrical, telephone and internet outlets installed after drywall & insulation are installed is practically impossible to have done, so be sure to think about where you want your TVs mounted and cable boxes set prior to the electrical installation date. Do you plan on enjoying afternoon on the patio in the shade? The direction of your new home and where the sun sets will impact whether or not this happens. Keep shady sunsets in mind when you are looking at available lots. Location is important! By the way, corner lots are usually bigger and offer more privacy (one neighbor instead of two), so you’ll likely be charged a premium for it.
- Lastly, Begin With the End in Mind. Will this be your “forever” home or your “retirement retreat”? Whether you plan to grow a family in a home that you’ll spend the rest of your life in, or one you will approach your golden years in, take time to envision the lifestyle you want for yourself (and your growing family, perhaps) before you select a new home development.
In closing, buying a new home is fun when you think of the construction details with a business-like approach, and the community lifestyle & interior design with your heart. We wish you a successful journey in pursuit of your “forever” home!
Coleman Tanner Realty – Your Home for Real Estate Solutions!
To schedule a Home Buyer Consultation, we can be reached at (786) 258-8877 or by e-mail at email@example.com.
Coleman Tanner Realty is an Equal Opportunity Housing provider.
Are you thinking about getting into the real life game of Monopoly? If so, you probably have a few questions you want answered before committing yourself to your first investment purchase, such as:
- What is the property worth?
- How do you calculate return on investment? (ROI)?
- How much equity will I earn through appreciation?
- What are my tax burdens going to be?
The answers to these questions vary with every property as no two transactions are ever identical. That notwithstanding, let’s take a look at the basics and figure out how to analyze a property to determine whether or not it is a good deal for you.
Q1. What is the Property Worth?
The answer to this question depends on whether the property is a single-family residence, a 2 to 4 unit property, or a 5+ unit multi-family property. Generally speaking, the market dictates the value of 1 to 4 unit residences using a valuation model called the sales comparison approach. The sales price/rent price of comparable properties that recently closed within the immediate area of the subject property are analyzed to determine an opinion of value.
For commercial real estate, 2 to 4 unit properties, or 5+ multi-family properties, the income approach to valuation is widely used by real estate agents, appraisers and lenders. This approach requires determining an annual market capitalization rate (based on the income of comparable sales) and a property-specific cap rate, based on projected annual income of the subject property (a pro forma statement of rents), using a gross rent multiplier, divided by the current value of the property.
Example: If a 1 unit condo costs $120,000 to purchase and the expected rental income is $1,200 per month, then the expected annual income is: $14,400 divided by $120,000 (cost to purchase), equals a cap rate of 12%.
The cap rate Is helpful for comparison purposes, but for a closer look at your potential investment, you’ll need to consider inflation and deduct for it using a discounted cash flow model. You’ll also need to factor in the costs of a mortgage, known as annual debt service, property taxes, property insurance, and other miscellaneous expenses such as water, electricity, landscaping, security, reserves for replacement, preventative maintenance, etc.
Q2. How Do You Calculate ROI?
When comparing investment options, properties with a higher ROI will help you make the best choice with regard to the greatest return on investment. To calculate your ROI, divide your profits by your investment cost. For ROI to be meaningful, you must input the most realistic expenses that can be expected for the subject property. Otherwise, any costs that are manipulated or omitted, which would reduce the ROI, will paint a picture that is unrealistic, increasing your opportunity cost (that is, The cost of not investing in other investment options), and may burden you with additional operating costs every month during the holding period.
You should also consider the option of using a mortgage to acquire the property, versus paying cash, and consider the annual debt service, which are the mortgage payments, and how they impact your monthly and annual cash flows. Additionally, the upside of leverage (buying an asset using other peoples money, or OPM), may significantly increase your ROI.
Note: Don’t forget to factor in your closing costs, real estate commissions, etc. into your purchase price and sale price of the subject property; these are acquisition and disposition costs.
Before we examine ROI on a financed property let’s look at the ROI for a subject property purchased as a cash transaction.
As you can see in the case study the overall rate and a five year period for rental ROI is 8.8%. The overall rate (OAR) on value appreciation is 29.6% for the five-year period or 5.92% per year. Added with the rental income the total annual ROI per year is 14.72%!
Now, let’s take a look at the same investment property but, in this case, let’s use a mortgage to purchase a property.
As you can see in the second example the ROI on rental income is an overall rate of 16.9%! Wow! the ROI on the appreciation is 134%! Combined together, this property produces an annual ROI of 43.7% per year!
Q3. How Much Equity Will I Earn Through Appreciation?
It depends. The market dictates the sales price, and, as we all know, that fluctuates based on a variety of variables, such as political, social, cultural, “acts of God,” (such as hurricanes and tornadoes), and economical and business changes in the immediate environment (such as the installation of an Amazon distribution center or an Apple research park coming to Your Town, USA. That said, on average, real estate doubles in value every 10 years. Put another way, a property owner can estimate a 10% per year appreciation in a healthy market in the growth stage of its economic life.
Given the science behind the economic life of a property and its community, the best time to purchase a home is when it is first built. Thus, the best time to sell would be at the end of the first 15 years of its growth or shortly into the stability phase. As a rule of thumb, a rental investment is less risky when the property was built within the last 10 years and the holding period should be no more than 10 years. Buying an investment property within these parameters will give you the best opportunity, external factors aside, to realize a 10% per year gain of appreciation in value.
Q4. What Are My Tax Burdens Going To Be?
That’s a tough question to answer because no two investors are examining their tax situation from the same position. If you lived in the home to out of the past five years prior to the sale, then you could be exempt from capital gains tax on the sale of the property buy up to $250,000 for a single person or up to $500,000 for a married couple. However, assuming the property was rented for all five years of the holding period, then you would report your profit as capital gains, which that amount would depend on adjustments such as depreciation and other taxable income which would shift your tax bracket up or down.
Note, however, that a 1031 exchange Allows the seller to roll over the profit into another investment property of equal or higher value without incurring any capital gains taxes. Another note worth mentioning is that if the owner sells the property due to divorce or death and unmarried widow or divorce may count any time that their former spouse lived in the subject property under the exceptions to the “time and use” test. If that sounds like your situation, you should consult a real estate attorney in your market with expertise in real estate law.
Disclaimer: The author of this article is a non-licensed attorney. The information provided herein is for educational purposes only and is not intended to be used as legal advice.
- Return on investment (ROI) Can be used to calculate the value of an investment based on its monthly cash flow’s, as well as during the entire holding period.
- To see the true ROI, consider the return with appreciation over an extended holding period, such as five years.
- ROI tends to be much higher when buying an investment using other peoples money, or OPM, with a five year holding.