Tag : closing costs

8 years, 3 months ago 0

We closed on the sale of another awesome renovation.  You know you’ve done a good job when you find a buyer after only five days on the market.  This was one of those houses you fall in love with during the renovation so we definitely wanted to find buyers who would really appreciate the house.  Luckily, we did and they were nice enough to do a testimonial video for us.  Check it out and then watch the video walkthrough and you’ll know exactly why they bought the house.

[youtube=http://www.youtube.com/watch?v=gM8Iu2hnyzU]

 

[youtube=http://www.youtube.com/watch?v=4YrLoz5XVwc]

8 years, 5 months ago 1

If you are a real estate investor, you may come across a fire damaged house.  What do you do?  Wether it’s a small fire or a large one, many investors will be scared off but if you know how to clean and repair the damage, you will have the courage to buy the property at a rock bottom price.

If you do buy a fire damaged house, your two main concerns will be replacing anything that was damaged and making sure there is no lingering smoke smell after you make your repairs.  I’ve documented the cleaning process with videos and pictures to inform you of the process for getting the house back into livable condition.

Check out these four videos to get an idea of the condition of the property prior to the start of smoke and soot cleaning:

Day 1

[youtube=http://www.youtube.com/watch?v=YdPn8kbfQWo]

After interviewing three fire damage cleaning crews, I chose a company called PuroClean, which I had previously used to clean mold on another rehab.  Day 1 was all about prep work.  They removed cabinets, removed all the sheetrock nails in the studs and tested different cleaning materials on different surfaces to determine the best cleaning strategy. 

To sum up the desired strategy for cleaning a fire damaged house: remove all the loose soot, ash and debris from every surface in the house, then encapsulate every square inch of the house with special paint to trap in the smoke smell.  The biggest problem is that smoke, like mold, can be anywhere.  It can penetrate every nook and cranny in the house and it can get behind walls and in the insulation.  That’s what makes the clean up process so difficult.

Living Room Picture

Master Bathroom Tub

We replaced the burnt wood with new on the left.  Pretty easy to tell what we replaced and what we kept.

Check out the smoke on the walls behind where the cabinets were in the kitchen.  This is why you have to take them down.  Otherwise, there is now way to clean and encapsulate it.

 

Day 2

[youtube=http://www.youtube.com/watch?v=gnOuRaX-Dvc]

The second day was really the first day of actual cleaning.  Some of the ceiling joists were scrubed down using a combination of special dry sponges and wire brushes.  The bathrooms cleaned up pretty well, especially the tubs and toilets.  Plastic was laid out over the attic floor in preperation for blasting the roof decking with sodium bicarbonate.  This process is almost like sandblasting or pressure washing.  It works really well on plywood like surfaces as well as surfaces that have a lot of nails you can’t remove, like roof decking.

We tried to save the cabinets but had to remove them.  The finish was blistered and the particle board was falling apart.

The master bath tub cleaned up very well.

Plastic laid down in attic in preperation of blasting the decking with sodium bicarbonate.

 

Day 3

[youtube=http://www.youtube.com/watch?v=7AKLAZHDjP4]

The third day showed major improvement.  Blasting the decking and wood with sodium bicarbonate really was an effective method to remove soot and ash but it sure is a messy job.  That stuff gets everywhere but the results speak for themselves.  They got most of the house done in one day.

A 50 pound bag of sodium bicarbonate

 

Day 4

[youtube=http://www.youtube.com/watch?v=4bIWoD333Sw]

The sodium bicarbonate blasting was finished on this day and then the clean up began.  As I said previously, that stuff gets everywhere and it has a sand like texture.  Anyone who has ever tracked sand into their house knows how difficult it can be to get it all cleaned up so I definitely felt sorry for the guys on this one.  The clean up took most of the day and went into Day 5.

The machine used to blast the sodium bicarbonate.

Here is a picture of the rafters and decking after being blasted with sodium bicarbonate.  Compare this picture to the one shown in Day 1.  Huge difference.

The plastic laid down on the attic floor was used to catch the sodium bicarbonate.  This made the clean up much easier.

 

Day 5

[youtube=http://www.youtube.com/watch?v=tyIp95NFS8o]

The last of the sodium bicarbonate was cleaned up and the encapsulation was begun.  Encapsulation is the process of spraying everything with odor blocking paint to trap or encapsulate the smoke smell. 

Upstairs bedroom after encapsulation.

One of the multiple products used for the encapsulation.

 

Day 6

[youtube=http://www.youtube.com/watch?v=F1Asah8d-PQ]

More encapsulation work was done today.  By the end of the day, the interior of the house looked like a “white palace”.

Compare the living room picture after clean up to the Day 1 picture.

The bathrooms cleaned up very well but now I don’t like the tile.  Just might change it out.

Kitchen after clean up.  Compare to Day 1 picture.

 

Day 7

[youtube=http://www.youtube.com/watch?v=rPb5Nk3VwWE]

The last day of the project was mostly a day for touch ups and final cleaning.  Windows were wiped down, trash was hauled off and extra materials were loaded up.  Now that its all finished, we can now put the place back together starting with HVAC work, rough plumbing and electrical.

Attic picture after encapsulation.

Another attic picture after encapsulation

 

Summary

Cleaning a fire damaged house doesn’t have to be scary or overwhelming.  The most important thing to remember is that once you go to the expense of putting the house back together, it cannot smell like smoke.  If there is any doubt that something won’t clean up, then replace it.  In fact, your local building code will dictate when burnt wood framing needs to be replaced.  Whatever you don’t replace, make sure it gets cleaned and encapsulated.  After that, it’s just a standard renovation.  Good luck!

Mark Anderson

Lucky A Properties

8 years, 8 months ago 0

Mark Anderson is back with another update of the renovation project at 421 Holmes Circle in Memphis, TN.  Major progress has been made since the last update so check it out!

[youtube=http://www.youtube.com/watch?v=gVQ41A9VM78]

9 years, 7 months ago 0
Posted in: Uncategorized

Ten real estate articles of interest for the week of 2/15/10 – 2/21/10 with a focus on the interests of Memphis Real Estate Investors.

1.  U of M Area Residents Work to Salvage 38111 – The article says that some neighborhoods in this area of Memphis don’t want certain types of real estate investors but it doesn’t really say what they are doing to attract the type they do desire.

2.  Mid-South rebound on track, but job creation lags, St. Louis Fed CEO says – The recovery, while real, “is still on the output side rather than the worker side.”  That may be the best and easiest way to understand what is happening right now.  Sounds like the job picture in Memphis is better than the rest of Tennessee but uncomfortable levels of unemployment will be with us for a few more years.  For Memphis real estate investors, this is important because jobs have a huge impact on housing.

3.  Fewer people falling behind on home loans – This is the first time in almost three years this has happened.  *Huge caveat*  This decline is only for the three month period ending in December.  This is by no means a trend or a sign that things are truly getting better as the article implies.  But is this article even true?  Take a look at this: Mortgage Delinquencies Tick Higher in Q4.

4.  Revitalizing Main Street – Officials pump money, resources into Downtown’s heart – I’ll be the first to admit that I almost never go downtown, but a strong,vibrant downtown is a good thing for Memphis.

5.  Nike files loan on Winchester facility – It’s always great news when a large employer shows continued faith in Memphis.  Nike recently moved to a new facility in the north part of town, but instead of leaving the facility they were in, they found another use for it.

6.  Questions abound for commercial real estate’s future – The pain currently being felt by commercial property owners is gaining more and more attention…and the Memphis commercial real estate market is no different.  Some good info in this article.

7.  Exchange Building up for auction – As noted above, commercial real estate is ill right now.  Anyone want to buy this Memphis landmark?

8.  Trulia: Memphis home price reduction level still above 30% – The title makes you think it’s talking about falling home values, but really it’s saying 31% of the properties listed for sale in the Memphis market have had at least one price reduction on the list price.  Can’t say I’m surprised.  We get so many calls everyday from sellers with wildly unrealistic expectations of the value of their home.

9.  A Subtle Improvement: Realtor rosters highlight industry dip, but all not lost – A staggering number of Memphis real estate agents have been lost to the downturn.  Separate the wheat from the chaff as they say.

10.  Property Transfers: Feb. 21, 2010 – Property transfers for the week in which the transfer value was over $100,000.

Our website: Lucky A Properties

9 years, 8 months ago 0
Posted in: News

Ten real estate articles of interest for the week of 2/8/10 – 2/14/10.

1. No More Seller Financing? – HUD is attempting to institute some rules that may prohibit investors from selling property they own and offering seller financing or LLCs and corporations from offering seller financing without licensing.

2. Where’s Housing Headed?  Follow Rents – Awesome article that describes the relationship between rent and the value of homes with some interesting statistics.

3. Stabilizing Home Sales Hit Bump in January – After several months of good reports, sales in the Memphis area were frozen under all the snow we got.

4. Citi Offers Alternative to Foreclosure – “This is a deed in lieu on steroids.”  Citi will test it in six states.  Tennessee is not included in the test.  This is not a program to help you keep your home but is designed to help the lender take back the home in a less painful way than a foreclosure.  I don’t know if it will be successful but it is good to see new ideas.

5. Survey: Jobs, Housing are Biggest Local Concerns – Though housing is the #2 concern in Memphis as well as nationally, it seems we are much more concerned about it than the rest of the country.

6. Tennessee Foreclosure Rate Ranks #26 – It’s a short article with an interesting prediction of where foreclosures might be headed over the next few months.

7. Small Grocery & Deli Looking to Locate Downtown – I grew up only minutes away from food, groceries & shopping.  This is the type of stuff that is missing downtown, in my opinion.

8. UT Predicts Two More Years of Unemployment Above 10% – Economists have been wrong before.  Lets hope they are wrong on this.  Some good info at the end of this article.

9. Fuss Scares Off Overton Square Grocery – I am still blown away that all the parties involved in this fiasco cannot compromise so that everyone benefits. 

10. Memphis Area Property Transfers – 2/14/10 – Real estate transfers of $100,000 or more as shown in the records of the Shelby County Register’s Office.

Happy Valentine’s Day from Lucky A Properties!

9 years, 8 months ago 0
Posted in: Taxes

It’s that time of year – Tax Time.  Nobody likes it but if you stick your head in the sand like an ostrich, then you could be missing out on a wonderful tax break, or loophole, depending on where you stand.  For those who invest in real estate in Tennessee, you must learn about the FONCE.  Its something we at Lucky A Properties have taken advantage of and you should to. 

FONCE is the acronym for Family Owned Non-Corporate Entities.  As the name implies, you don’t qualify for this as an individual, you must create an entity.  For most investors, it will probably be an LLC.  In order to qualify for the FONCE exemption, the entity must meet two criteria:

  1. At least 95% of the entity’s ownership must be held by family members, and
  2. Substantially all (66.67%) of the activity of the entity is either the production of passive investment income or the combination of the production of passive investment income and farming.

So why should you care?  Simple, your entity would be exempt from paying Franchise & Excise taxes.  The current Tennessee tax rates are as follows:

  • Franchise Tax – 0.25% of the greater of net worth or real and tangible property in Tennessee.  The minimum tax is $100.
  • Excise Tax – 6.5% of Tennessee taxable income.

It’s not that complicated.  If you own rental properties in Memphis or anywhere else in Tennessee:

  1. Create an entity such as an LLC.
  2. The properties should be titled in the name of the entity.
  3. File the paperwork for the FONCE exemption.
  4. Save on taxes!

Please be advised, I am not an accountant nor am I an attorney.  This may not be for everyone so consult your trusted advisors.  They may just tell you to FONCE yourself.

9 years, 9 months ago 0
Posted in: General

[youtube=http://www.youtube.com/watch?v=kafP5MUgf_c]

If you turned on the TV today, you know what I’m talking about.  Snow, aka “White Death”.  In Memphis, we got pounded by at least a half-inch of snow.  Yes, you read that right.  Schools closed.  The grocery stores have been packed the last few days.  Craziness ensued.

If you are a looking to buy Memphis investment properties, is there something you can do to avoid some of the craziness that can ensue prior to closing?  Of course there is – get yourself a great real estate closing attorney.  One big tip is to determine what the primary client type is for the attorney.  Does the attorney mostly do closings with investors, or John & Jane Homebuyer.  Obviously, if you are looking to build a portfolio of cash flow properties, you should be working with an attorney that specializes in working with investors.

At Lucky A Properties, we work with one of the best real estate attorneys in town.  This attorney is a sponsor of our Mid-South Real Estate Investors Association and I brought a new private lender to her office today so he could ask a few questions about how the private lending process works.  She answered all of his questions clearly and in plain English.  Now the private lender is ready to fund two of our upcoming deals.  Just remember, when its crazy out there, surround yourself with good people.

9 years, 11 months ago 0

We’ve got another fantastic Memphis investment property available in Raleigh.  The same caring owner has owned this house since 1983 and it is in pristine condition.  This house is move-in ready and needs no rehab unless you want to update  a few light light fixtures and the wall paper in the kitchen and hallway.  Situated at the end of the cove, the well landscaped property features a large backyard and covered patio with a wonderful outdoor kitchen.  The inside features three bedrooms, two bathrooms, living room, den and dining room.  The kitchen appliances are included with the house.  The separate laundry room includes the washing machine but will need a new dryer.  This property is 1,600 square feet with an attached 2 car carport.  Other features include a brand new water heater, central heat & air plus a gas wall heater in the den.  Only 1.5 miles from Bartlett and close to nearby schools, this home is located in a prime location. 

Arsenal Cove Exterior Front #3

If you are looking to invest in Memphis real estate, this property should rent quickly for $750-$850 per month, providing outstanding positive cash flow and instant equity. 

Not a Memphis real estate investor?  That’s ok!  This home is move-in ready and can be purchased at a significant discount, which will make your monthly payments more affordable.

Click on the Photo Slideshow for many more photos!

Lucky A Properties Logo

Contact Information

Pricing

  • Price: $69,900.00
  • Estimated Rent: $750-$850
  • Annual Taxes: $2,177
  • Zillow: $109,00
  • Previous Sale: $60,000 5/13/1983
  • Tax Assessed Value: $120,800
  • Rehab: $2,000
  • Estimated ARV: $85,000-$90,000

Property Location

  • 4842 Arsenal Cove
  • Memphis, TN 38128
  • Map

Links

Features

  • Bedrooms: 3
  • Bathrooms: 2
  • Parking Spaces: 2 Car Carport
  • Year Built: 1964
  • Square Footage: 1,600

Attributes

Interior Amenities

  • Hardwood Floors
  • Central Heat & Air
  • New Water Heater
  • Appliances Included
  • Attic

Exterior Amenities

  • Outdoor Kitchen w/Covered Patio
  • 2 Car Carport
  • Two Storage Sheds
  • Fenced Yard
  • Landscaped Lawn
10 years ago 0
Posted in: General

We recently gave a presentation about the Top 10 Questions for New Real Estate Investors.  We’ve taken a few snippets and created some short informational videos.  Check them all out here: http://www.youtube.com/user/LuckyAProperties#play/uploads

Here is a sample:

[youtube=http://www.youtube.com/watch?v=onjnHRCbQEw]

10 years, 1 month ago 0
The Allison Ave. rehab is complete. Check it out and contact us regarding adding this great property to your investment portfolio!

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