Category Archive : Property Management

Regardless of your investment preferences, whether they are primarily geared toward corporate stocks and bonds or real estate based, diversification is the best road to take to insure asset protection during volatile marketplace upheavals. In other words, as the old and time-proven saying goes, “don’t put all of your eggs in one basket.”

Best advice to any investor; know the marketplace you are playing in. If you are not thoroughly familiar with the rules of the game, you are assuredly destined to lose.

Certainly, no one, no matter how skilled an investor one may be- and we have said this time and again- knows everything, and if you are playing the real estate game, incorporate a team of specialists as your guides and advisers. As any successful investor will assure you, it takes a team effort to succeed.

There are many ways to diversify a real estate portfolio, and the investor should –after careful analysis – choose the path that best suits present and future market conditions and projections.

Among the many and most common real estate diversification investments are:

• Purchasing and selling or renting high-end properties; estate homes, luxury condos, etc.
• Buying, repairing and renting or selling handy-man specials
• Apartment complexes
• Condo conversions
• Real Estate Investment Trusts (REITs)
• Real estate mutual funds
• Real estate hedge funds
• Real estate related stocks
• Raw land
• Commercial property

Diversification allows the investor to ride out a down cycle in a particular market, with asset loss minimized or even neutralized by an up cycle in other real estate investments.

Take for example, what is happening in today’s marketplace. An investor whose specialty is strictly geared toward the buying and selling of single-family homes is faced with falling property values due to a huge glut of available inventory, mostly consisting of distressed properties, and with no immediate prospects of this inventory diminishing to any great degree for some time.

However, an investor for example, who buys and sells homes and has additionally invested for the long term in rental properties, including single family residences and apartment complexes, will have the benefit of continued cash flow from rentals.

Investors who have concentrated strictly on one aspect of real estate investment are in trouble when their investments hit a severe down cycle, since these investors have no immediate options to fall back on.

The investor with a skilled real estate agent as part of his/her advisory team is in an excellent position to intelligently forecast near future  market trends in some instances, and make the kind of investments that will maximize revenues and minimize loss.

Although these examples are just simplified versions of complex issues, the wisdom of diversification is obvious.

The worst housing crisis in more than half-a-century has devastated Las Vegas home prices, severely impacted our economy, and thrown many people out of work and out of their homes.

But, as in any downturn, even during the Great Depression of the 1930s, opportunities for the astute investor could always be found.  Of course, in good times or bad, cash is always king, and an investor with a ready source of capital and a sound line of credit is in a position, particularly at this point in time, to acquire real estate properties at record low prices. Read More

Investing in Las Vegas Townhomes

The classification of “townhome” is often confusing to people, since townhomes offer some of the attributes of both a single-family home and a condominium. A townhome is a structure that shares, or is attached by a common wall, either a garage wall or an interior (living room) wall to an adjacent structure.

If the land occupied by the townhome is part and parcel of the deed, then the building is designated as a “townhome.” However, if the land is not the actual property of the homeowner, then the townhome is designated for insurance and tax purposes as a condominium.

Townhomes can be constructed as a single-story, duplex, or triplex. Depending on how the bylaws of the townhouse community are structured, each owner may have an additional shared ownership of the complex, which would include the common areas, parking facilities, swimming pool, recreational facilities, and clubhouse.

A governing Home Owners Association (HOA), oversees the community’s adherence to Covenants, Conditions & Restrictions (CC&Rs.) These policies dictate the legally enforceable operational guidelines that the Home Owners Association must follow and the rules homeowners are obligated to follow, inclusive of the homeowner’s obligatory monthly payment of association fees to cover the costs of landscaping, repairs, maintenance, taxes, etc., of the common areas of the community.

The townhome “lifestyle” appeals to those who enjoy close community living, freedom of the responsibility for maintenance and repair of the exterior portion of their home, easy access to recreational facilities; swimming pool, workout room, clubhouse, tennis courts, etc.

The question of whether or not a townhome is a good investment, has many pros and cons. Certainly, if the purpose of the investment is for rental or resale, the Home Owners Association guidelines assure that the unit’s exterior will be well maintained.

Appreciation is usually not quite on a par with single family residences, and in a down market, townhomes most often depreciate at a faster rate. Certainly, the age of the townhome, how well the interior has been maintained, and if the home has been upgraded, as well as the location, are important factors to consider.

It is equally important to investigate the financial condition of the Homeowners Association. An examination of the operating budget, and copies of past years budgets should be compared. Amounts allocated to the reserve fund, a current financial statement, including a balance sheet, and operating cost statement are necessary to examine as well.

Reviewing the financial statements, insurance declaration and all pertinent documents necessary to analyze the financial health of the HOA is as necessary as evaluating the townhome itself, before deciding if the potential investment is worthy of pursuit.

Shelter Realty is a Real Estate and Property Management Company specializing in the areas of Henderson, Las Vegas and North Las Vegas, NV. Feel free to give us a call at 702.376.7379 so we can answer any questions you may have.

Once you have made the mental preparations necessary to “sell” your loan proposal to a lender, you, as a new investor, must be certain of the documentation and information required by a lender. The lender will require, at the very least, the following:

• A completed loan application form
• Copies of your past and present IRS income Tax forms. Ask the lender, prior to your visit how many years of IRS filings will be required
• Copies of your credit reports from all three principle credit reporting agencies: Experian, Equifax and TransUnion. Of course, the bank will pull their own reports, but bringing the reports as part of your loan application documentation will certainly enhance your credibility with the lender.
• The loan application form will require you to document your current source of income from any and all sources, employment or business, type of employment or business, debts and other liabilities, alimony, child support payments, if applicable, banking information; checking, savings accounts, etc. Read More

With economic conditions being what they are today, everyone and his brother is out there looking for a real “steal” in Las Vegas bank-owned properties, and besieging lenders with loan requests.

In addition to Las Vegas Investors looking to borrow funds, banks are additionally dealing with many real estate related issues forced upon them by current market conditions, such as foreclosures, loan restructuring requests, short sales, etc.

Unless you are financially well off enough to be an all-cash buyer, you are going to need a loan to finance/purchase your new found property, and since banks are, to put it mildly “running scared” in these unstable times, it’s going to take some skillful planning and preparation to convince a lender that you are a suitable risk. Read More

All the rage these days, a Las Vegas “short sale” to the uninitiated means snatching a valuable piece of property from a grateful lender or desperate property owner at so-called “bargain basement rates.”

Actually, the short sale phenomenon, born from the ashes of the Las Vegas housing burnout of the last few years, is not always what it may seem on the surface. One sees a property that may sell at a considerably below market price, just sitting there, waiting to be snatched up and moved into, or “flipped” for a fat profit. Or so you might think!

A short sale is the result of a home owner’s default on mortgage payments due to an inability to pay as the result of a loss of income, or some such related financial difficulty.  The homeowner is facing foreclosure, and the bank is confronted with an unwanted foreclosure proceeding.

So, a short sale is basically a problem solver of sorts for both debtor and lender. Both parties have agreed to sell the property, and the lender hopes the property will sell for as high a price as possible, but is willing to allow the distressed homeowner to sell at less than the mortgage balance if necessary, sparing the lender and homeowner the difficulties of a foreclosure proceeding.

Sounds simple, but it’s not. There are many complexities involved in a short sale, particularly since the prospective buyer’s price offering may or may not be acceptable to the lender. A further complexity for the buyer deals with the issue of the record low mortgage rates currently tempting competing investors from everywhere.

The record-low rates now in effect have attracted even more hungry investors roaming the real estate “jungle” and the lenders now realize they can minimize their losses by encouraging buyers to bid on these distressed properties, which has had the result of driving selling prices upward. Good news for the mortgage holders.

A further complexity –and often frustration – for the buyer is that, unlike in a “normal” real estate transaction, the prospective buyer’s good faith deposit money does not obligate a lender-who may be selling the home through a listing agent- to sell the home to the qualified buyer, or even have an obligation to sell at the original asking price for the property. Instead, the good faith deposit only means that the lender will consider the buyer’s price offer as one of many “bids” the lender is in the process of reviewing.

This process is to the lenders advantage, since the “bidding” encourages many investors to offer higher prices for the property than the competition. The frustrated initial bidder has no choice but to either withdraw the offer and search elsewhere or offer a higher bid and then patiently wait until the lender decides which of the investor bids is most acceptable.

We are not talking strategies here. We are only discussing the basics of the short sale procedure, and emphasizing that patience and persistence, and an understanding that the lender may take weeks, or even months to decide which bid would be acceptable, is the norm these days.

Having a thorough understanding of the processes and procedures involved in short sale investing is the foundation for a strategically workable approach to a profitable undertaking. Bottom line: short sale investing can be a lucrative undertaking, but only for the savvy investor.

One more thought. Since short sale deals often take so much time and effort to close, and as often as these deals can fall through, bidding on short sales shouldn’t really be the focal point of your overall real estate investment strategies.

Should you have any questions about investing in short sales, feel free to give us a call at 702.376.7379 or reply below with your questions.

Nevada Rental Properties in Foreclosure

Nevada rental properties in foreclosure are sold by the lender at auction or directly to investors, just like any other foreclosed properties. If the foreclosed property is occupied by tenants, the landlord or property manager assigned by the new owners to oversee the property has to abide by specific guidelines when dealing with this situation.

The property management company must be cognizant of the new laws enacted in 2009 that basically allows a tenant to remain in the home, town home, or condo unit for the full remaining term of the lease.  There are two exceptions: Read More

There are many factors involved – from  a Las Vegas Real Estate Investor’s prospective – in choosing which single-family home properties would be the most suitable for purchase. Among the most important considerations are what type of purchase arrangement can be negotiated, and who the seller may be, private owner, or bank, urgency to sell, etc.

Among the criteria to be considered in evaluating the property’s cost of purchase and after-purchase expenditures versus ultimate profit potential are the following: Read More

Homeowners Association Board of Directors Elections

This is the time of year when plans must be made for the election of the new Homeowners Association Board of Directors. Property managers are required to supervise the election process from start to finish. They begin by mailing a flyer and Nomination Form to each homeowner informing them that an Annual Election Meeting is currently being scheduled. Those individuals interested in being  candidates are asked to provide relevant information regarding his or her qualifications to serve on the Board and the reasons why they wish to do so.

Terms for Executive Board Members are now allowed to be increased from two to three years. There is no Legislative limitation on number of terms a member may serve. Each HOA must have a minimum of three Board Members with an odd number preferred for tie breaking of votes.

Sometimes there are not enough candidates interested in serving on the Board of Directors and sometimes there is a battle for control of the positions between two differing factions.

The updated procedures for elections now state that if the number of candidates running for the Board is the same – or less than – the number of vacancies, a notice must be sent out to all homeowners by the Executive Board that all those nominated are considered to be elected – unless an owner submits a nomination form within the nomination period – which is thirty days after receiving the notice from the Board.

If another owner indicates interest by submission of an application, a regular election is then held with the usual balloting procedure. If there are no other candidates, it will not be necessary for ballots to be mailed to the community and the previously named candidates will be considered as newly elected Board members thirty days after the closing date of the period of nomination.

When there are sufficient candidates for a ballot, each one may request that the HOA send out to each owner at the association’s expense a candidate informational page listing his or her areas of expertise and experience that will benefit the community.  Often, each HOA will host a Meet the Candidates night supervised by the property manager so that unit owners have the chance to ask each candidate how he or she feels about specific community issues to help them determine for whom to vote.

All ballots that were mailed in to the management company are brought to the meeting by the property manager. These votes, along with ballots that are hand delivered at the Annual Election Meeting, are opened and tallied by an Election Committee in full view of the unit owners. The duly elected Board Members then meet privately, elect officers and preside at the Annual Meeting.

Shelter Realty is a Real Estate and Property Management Company specializing in the areas of Henderson, Las Vegas and North Las Vegas, NV. Feel free to give us a call at 702.376.7379 so we can answer any questions you may have.

Las Vegas Residential property management companies provide managers who are assigned to work with several homeowner associations and consequently, must be familiar with the specifics of each HOA Community.

One of the many important responsibilities of the manager is to attend the association meeting which may be held monthly – usually in the evening – and remain for the Executive Board meeting.   This may be held after close of the HOA meeting to possibly meet with homeowners who are in violation of the CC&R’s (Covenants, Conditions and Restrictions) and who have not cured the violation.

Depending on the degree of involvement of  the manager in accordance with the requirements of the Las Vegas HOA Board of Directors, he or she will help guide the direction of the meeting by clarifying legal issues based on association documents and responding to some homeowner questions.  Sometimes managers will have to help maintain order when homeowners respond to emotional issues related to decisions made by the Board.

Some managers take Minutes of the meeting and subsequently provide them to Board members for approval.  The Minutes are then read at the following HOA meeting for comments from homeowners.

Some of the skills necessary to homeowner association managers include:

• Logical problem solving
• Communication ability
• Customer service skills
• Conflict management
• Effective time management
• Group decision making
• Understanding budgets
• Multi task oriented

The manager must be familiar with the association documents and be knowledgeable of  the State of Nevada regulations governing homeowner associations.  He or she should guide the Board in the decision making process so that they are in compliance with State and Federal regulations.

When a problem arises that is beyond the scope of the manager’s expertise, it should be recommended that the association attorney is contacted.

The manager is required to maintain an inventory of all records of each client.  If the relationship between the residential property management company and the client is terminated, the manager will turn over all records to the new Las Vegas management company.

The manager is required to attend classes and obtain ongoing CEU’s (continuing education units) in order to stay current with changes in rules and regulations pertaining to HOA’s including (but not limited to) new developments in law, insurance coverage and accounting principles.

Some residential property management companies offer classes to their staff members and members of their client Boards; State agencies provide training to community mangers, Board members and interested homeowners wishing to be knowledgeable regarding HOA updates.

The manager must be careful to reveal any personal connection with service vendors or professionals to avoid any appearance of inappropriate business dealings and must not accept any gifts which will influence his or her acting in self interest or gain in HOA decision making.

The manager must ensure that financial transactions of a client are current, accurate and properly documented and maintained in compliance with applicable State laws and regulations which govern financial records.

A Las Vegas residential property management company can work with HOAs (Homeowners’ Association) to help the Board of Directors manage the myriad details – both large and small – that are involved in the daily decisions of community life.  Since the Board is responsible for determining the policy of the association, the property managers act as advisers to the Board providing the value of their experience and expertise.

The manager may take on the responsibility of carrying out the directives of the Board which often includes daily operations of the HOA such as:

• Providing routine inspections of the property
• Noting and reporting violations of the CC&R’s (Covenants, Conditions & Restrictions)
• Providing notice of violations to homeowners regarding lack of compliance
• Helping homeowners resolve issues of property violations

Las Vegas Residential property management companies will maintain a list of vendors who are carefully and thoroughly screened to provide a high level of service to the HOA clients.  They can help the association by suggesting and obtaining three required bids from vendors in areas of pool maintenance, landscape gardening, plumbing repair and electrical work.  They also maintain a list of professionals which include attorneys and accountants.

In communities that maintain security services, the management company can provide a list of security companies.  When club houses need to be redecorated, the management company will locate vendors who will paint, wallpaper and install carpeting or new floors.

When emergency repairs are needed, a designated staff member of the property management company can be reached 24/7 to help solve the problem by finding and dispatching the appropriate repair person.

All vendors are required to complete specific forms and attach necessary documentation before being considered an approved vendor for goods and services:

• Independent Contractor Information Form
• Vendor Agreement Disclaimer of Liability Form
• W9 Request for Taxpayer Identification Number
• Secretary of State Trade Name Registration Form
• Liability Insurance  Certificate from vendor’s insurance agent stating minimum liability coverage of $1,000,000
• Certificate of Workers Compensation for company with more than one employee
• If vendor is sole proprietor, an Independent Contract Workers Compensation Indemnity Agreement.

Residential property management companies also provide business and financial services to the HOA.  These financial reports include – on an interim as well as an annual basis:

• Operating budget
• Balance sheet
• Accounts Receivable report
• Bank reconciliation of all accounts
• Cash disbursement report
• Budget comparison report.

Las Vegas Neighborhood Communities that are governed by HOA’s are required to pay a monthly fee for maintenance.  Depending upon the services covered, the fee can be anywhere from the high $xxs to the low to medium $xxxs.

Of course, homeowners may pay these monthly fees  by sending a check to the management company or by paying in person at the company office.  Some companies have arranged to allow homeowners to pay their dues by automatic withdrawal payment.  They provide an ACH form which must be completed and given to the company along with a voided check so that the maintenance fees are conveniently paid each month.

Investing in Las Vegas Single Family Homes

If your real estate investment focus is primarily on the Las Vegas single-family home market, there are a number of options to consider, any of which could prove quite profitable, provided your investment strategies are on target.

• Purchase/rent or resell
• Purchase/repair (fixer-upper)-rent or resell
• Purchase fixer-upper/ sell to renovator as-is
• Lease/option rental
• Purchase/sell to investors

As in any money-making endeavor, the old saying “buy low/sell high” is the ideal scenario for any profitable venture; however, there are few simple money-making scenarios in the Las Vegas real estate investment game, particularly considering current market conditions.

In order to find the most profitable deals, you need to locate motivated sellers, including lenders with an inventory glut of deals gone bad, and adapt your methods to concur with the marketplace.

Since finding the properties that can make you money is the key to your real estate investment success, you have to know where to find the deals most suited to your investment goals, for example: Las Vegas Short sales, foreclosures, “underwater” homeowners, homes for sale due to divorce, death, relocation, etc.; these offer many opportunities for the astute investor to capitalize on.

Don’t forget the MLS. That may seem obvious, but the MLS allows you to quickly evaluate a property to see if it fits your profile of targeted properties. The MLS can be a shortcut to finding the particular kinds of housing that suit your investment strategies best. Check with the county recorder’s office as well to keep up to date on realty transactions.

Network with your business associates, attorneys, Realtors, accountant, etc., even your mailman. Let everyone know that you are in the market to purchase Las Vegas single-family homes. You may be surprised to find that some of your best deals can originate from many an unlikely source.

Another form of generating new business can be from Yellow page ads and flyers targeted at specific neighborhoods which work well in some cases, and not in others. However, you won’t know if they work for you unless you try them.

Once you have found a property or properties of interest, don’t make a move until you have determined the property’s current market value. Seems like a no brainer, but this is where your Realtor comes in. He/she will have access to the up-to-date information you need in order to determine how much you are prepared to pay for the property, as opposed to the asking price.

Once you have concluded a deal, it is imperative that you have given equal thought to formulating effective strategies to attract buyers or renters, in order to generate profits as soon as possible after purchase.

Always keep in mind that reliable information and advice is the foundation upon which every successful real estate venture is based.