BUILDING WEALTH IN REAL ESTATE: HOW LONG DOES IT TAKE?

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By Glenn Mananeng

This is a question on the mind of investors. There is no definite answer for this. This topic is always up to debate no matter how you look at it, as wealth is measured differently by every individual. Here are a few factors you need to know when building wealth – allow us here at Unique Wealth Education to teach you some important pointers to consider:

#1 Wholesaling

This is the easiest point of entry for the majority of the investors, as it requires the least amount of capital. You find a seller who wants to put their property for sale and find a buyer for that property on “as is” condition without the fixing part to try and get the market value higher. After the property has been sold, you’ll get a cut on the sale. Basically you are the intermediary that builds a buyers list to locate undervalued properties using a multi-pronged approach. This relies heavily on how good and how broad your real estate network is.

#2 Fix and flip

You don’t have to be an avid real estate investor to know what fix and flip is. Anyone who has cable and passed by HGTV has a basic idea of what it is. You buy a house below the average market value, renovate it, sell them for a profit! This is one of the most widely used real estate investment strategies used around the county.

Keys to fix and flip investing success:

· Preparing yourself by understanding how to locate undermarket valued properties in the right locations
· Understand values (make sure you are comparing apples to apples and going with the highest comp when doing our due diligence as a conservative approach)
· Aligning yourself with multiple capable and competitively priced renovation contractors to not only give you a bid prior to purchasing the home, but also to deliver as agreed on
· Understanding how far to go with finishes and layout changes to keep within the budget and comps in the area
· Stay away from potential losers such as foundation issues and bad layouts
· Having a sales strategy in place prior to the purchase that accounts for commissions, closing costs, holding costs, etc…
Contrary to “reality” real estate shows, getting rich doesn’t happen overnight. The longer it takes to flip the property, the more expenses you would incur for maintaining it while waiting for a buyer. Working with getting coached by or partnering with a seasoned investor is a huge advantage, as you learn best practices and pitfalls to avoid, which only years of experience can provide.

#3 Rentals

Mortgage Paydown

Let’s use a rental property as an example. In a normal scenario, you have a tenant who is essentially paying the rent in exchange for living privileges. If you bought the rental property with a mortgage, your loan will eventually cancel itself out over time. Why? The rent you receive from your tenant is basically used to pay the loan, which is increasing your equity in the property. The money left over is your cash flow divided by the amount you put down to come up with your CAP rate. This is a GREAT way to build long term wealth.

Cash Flow

We can all agree that this is very important. For those who are new in the game, cash flow is basically the income you get from your investment property (usually rental properties). This is a major factor in generating a high return for your investments and savings. Once you increase cash flow by accumulating properties, this allows you to plan your income and determine the course of future investments.

Taxes

If taken into account optimistically, you’ll see a lot of tax benefits when it comes to real estate investments. Consult your CPA to see how you can depreciate properties that you are holding onto for rental income and also discuss with them acceleration methods used to front load depreciation to give you more capital to buy more and keep building your portfolio.

The answer to how long it’s going to take, as you might’ve guessed already, is up to you. Your real estate skillset, determination, experience, and risk management are major players in this ballgame. it’s all about how smart you invest in the industry. If you make due diligence and play your cards right, you’ll one day realize that you’ve gained a considerable amount of wealth already. Unique Wealth Education can help you in your real estate career in helping you avoid common mistakes & pitfalls, is something that we take to heart very seriously. Contact us at(734) 224-5454 or email us at [email protected]to learn more.

CARING FOR TENANTS WITH DISABILITIES

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By Glenn Mananeng

All tenants have rights to housing and those with disabilities are no exception, additionally, those with disabilities have unique rights under state and federal law. We often hear about people being evicted from the rental property and many of these people are people with disabilities who cannot afford rent or fall behind due to medical bills or low pay from Social Security benefits.

Millions of Americans are affected by disabilities struggle to find a place to rent. In fact, 1 out of 5 people in the U.S. have a high chance of acquiring some type of disability according to the Census Bureau. It is of utmost importance to understand their rights in order to provide a proper place for them to live comfortably.

QUALIFYING DISABILITIES

The Federal Housing Act (FHA) has set a very broad description as to what qualifies as a disability. Under federal law, these disabilities have certain qualities such as:

Must limit one’s major life activities
This covers anything as simple as walking, talking, breathing, manually performing tasks, or caring for oneself. If it significantly affects at least one or more of these activities or something similar, the disability should be considered.

It doesn’t have to be obvious
The disability does not have to be noticeable to other people regardless of how much time they see or spend time with you. For example, a person suffering from asthma may seem normal to anyone unless there is an obvious breathing issue due to an emergent attack. A landlord is not legally permitted to ask a resident or prospective applicant about a disability.

Doesn’t require the use of an assistive device
People with mobility disabilities can still qualify under FHA rules even without the need of assistive devices such as wheelchairs, canes, or walkers. The same also applies for those with hearing impairments where there wouldn’t be a need for a hearing aid.

Physical disabilities aren’t the only ones included
Mental illness, chronic fatigue, and learning disabilities are included as part of the FHA’s definition.

Addictions are included as well
Individuals suffering from drug or alcohol addiction can qualify as long as they are currently part of a rehabilitation program.

EMOTIONAL SUPPORT ANIMALS (ESA)

As the name implies, they provide support and comfort especially for those suffering from mental health issues. They help their owners cope with daily life and alleviates their condition a little bit better. There is a clear difference between a service animal and an emotional support animal.

The former is well-trained to perform specific tasks to support a physically disabled person. One of the most common service animals are guide dogs for the visually impaired. ESAs on the other hand provides support and companionship to people with mental health problems.

If you’re in need of such a companion, you need to request an ESA letter from a licensed mental health professional (therapist, psychologist, or psychiatrist). The letter should confirm your mental condition, explain how limiting the disability is when it comes to day-today activities, elaborate how an ESA helps improve your well-being, and should be signed by the medical professional.

As long as one has an ESA letter, the landlord can’t deny housing to that individual. This means that the landlord cannot charge a pet fee even if the rental property follows a NO PET POLICY.

WHAT IS REASONABLE ACCOMMODATION?

This refers to modifications in the rental property which will enable the tenant with a disability to fully use amenities and features of the home as easy as possible. Some of these may include adding a ramp for wheelchair use, widening of doorways, adding grab bars in the bathroom, and even lowering kitchen countertops.

In the event that the landlord receives government funding to maintain housing, there is a chance that they have to cover the renovation costs. However, if a landlord accepts Section 8 tenants, they would not have to pay for the modification.

If a tenant needs the modification to the property but can’t afford the cost, there are a few resources to help fund it. Local fair housing centers are available in almost every community. In Michigan, most of them are divided into different areas throughout the state from Metropolitan Detroit, Southeast and Mid, Southwest, and West Michigan.

A landlord cannot deny or refuse reasonable accommodation to their rental property not unless it would somehow change the layout of the whole building, be unreasonably expensive or impossible to do so, or would pose a physical hazard to other tenants.

Regardless of one’s situation, no one shouldn’t be denied housing. Landlords should always treat tenants equally despite disabilities. There’s nothing more important than working with professionals who have a deep understanding of Fair Housing Laws, especially people with disabilities.

For additional information about Michigan Fair Housing Laws, you can check out our Tenant Section here. To learn more about property management services that we provide, you can call us at (734) 744-5080 or send us an email at [email protected].