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Our Newsletter is designed to give you cutting edge information and advise you regarding real estate investing, property management, and the economy that can help to make your business all that it can be. You are welcome to share this newsletter with a friend by clicking the link to the left. You can view past newsletters on our website at www.FastForwardPM.com
May Features
April Economic Highlights
Mortgage Rates
30 year fixed - 4.08%
15 year fixed - 4.02%
5/1 ARM - 3.61%
1 year ARM - 3.16%
Source: Freddie Mac
Prime Rate - 3.35%
Source: Wall Street Journal
10 Year Treasury Yield - 3.45%
Source: CNN Money
Unemployment Rates
National - 8.8% (down from 9% in January and 9.8% in December)
California - 12% (Down from 12.2% in the previous month)
San Francisco Bay Area - 8.7%
East Bay - 11%
North Bay - 10.4% (Sonoma County)
Sacramento - 12.7%
U.S. Western Region - 10.7%
National Average Hourly Earnings - $22.87
Source: U.S. Bureau of Labor Statistics
7 Ways to Still Buy Property with Little or No Money Down
By Fast Forward Property Management
1 - V.A. Loans
If you have ever served in the United States military, you may be able to get a loan backed by the Veterans Administration. People may qualify if they have served active duty or six years of reserve service. These loans are written by traditional lenders, but guaranteed by the federal government through the Veterans Administration. Since the government guarantees them, most lenders will not require any down payment on the loan. However, a down payment may be required by the lender if the purchase price exceeds reasonable value of the property. Because these type of loans are guaranteed in case of default, the banks have minimal risk in this type of lending.
For more information about VA loans visit www.benefits.va.gov/homeloans
2 - V.A. Foreclosures
When VA loans go into foreclosure, they are offered to the public with special financing. You do not need any military affiliation to qualify and they do not rely heavily on credit scoring for loan approval. There is no maximum number of investment properties that can be bought through this program. Their website (see below) has listings of these foreclosure homes that are actively on the market and can be searched by geographic location. Some advantages of these loans are:
• Seller may contribute up to 3% of the contract sales price in order to pay for closing costs, including the $2500 origination fee, prepaid and other expenses.
• Mortgages are assumable by qualification.
• Financing is not a credit score driven product.
• There are both 15 and 30 year fixed rate terms.
• There is a VA funding fee of 2.25% which cannot be included in the Seller concessions.
An Owner occupied purchase can be financed with as little as 0% down . A Non‐owner occupied purchase can be financed with as little as 5% down. Investors may use 75% of anticipated rent based on appraiser's estimate to offset the subject property monthly payment. Investors must have experience managing rental properties in order to include anticipated rent on subject property in underwriting. There is no maximum number of investment properties.
For more information about VA loan foreclosures visit https://va.equator.com/index.cfm
Click Here for the Complete Article
What's Killing Your Profits?
If your multifamily complex includes utilities in the rental fee, brace yourself. Utility cost increases are coming your way that may erode your hard-earned profits. Even more concerning is that you’re responsible for a sizable expense that you have little or no control over.
The “utilities included” model puts you squarely at the financial mercy of tenants, their usage tendencies, and utility companies. “Utilities included” also means that you have to be an accurate budget forecaster to ensure that your rental rates cover the annual utility expenses. Miss the mark and it’s you who’ll pay.
The exciting news is that you can quickly and easily change this situation by separating utilities from the rent fee and billing tenants directly–at no cost to you. By doing this, you’ll make a positive and immediate impact on your net operating income (NOI) and the value of your property. From a price perspective, your complex will be more appealing to prospective tenants and you’ll have effectively removed yourself from the utility equation altogether. Billing residents means no more worrying about the effects of runaway tenant usage and it leads to higher profits.
Click Here for the Complete Article
A Modern Day Tax Parable
We think you will enjoy this since we are now past tax season
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this.
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.
And so the fifth man, like the first four, now paid nothing (100% savings)
The sixth now paid $2 instead of $3 (33% savings).
The seventh now pay $5 instead of $7 (28% savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 ( 22% savings).
The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a Dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"
The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill! And that, boys and girls, journalists and college professors, this is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.
In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.
A Personal Board of Directors: Do You Have One?
By Ernest Oriente
Property management is rapidly changing, and you are faced with more decisions than ever before. Today’s fast-paced lifestyles create information overload. During your lifetime, you will have 10 or 15 major decisions and another 25-30 semi-major decisions. Developing a Personal Board of Directors will help you make great decisions and this article will tell you exactly how to implement this important idea. Once in place, you will never look back!
Developing your Personal Board: Let’s start with the obvious. Your Personal Board of Directors might include: a doctor as a health/medical resource, a CPA for tax advice, an attorney for legal guidance, a banker for financial guidance and a priest/rabbi/deacon for spiritual support. Here are some of the less obvious: a sales and marketing professional, a public relations expert, a business coach, a child care specialist, a human resource professional, a webmaster for Internet guidance, a property management professional three levels above you, an executive in an unrelated industry to property management and/or a business owner in the property management industry but not a competitor, based on geography or your resident profile.
Click Here for the Complete Article
Best and Worst Scams in Property Management
 By Fast Forward Property Management
We have been in the property management industry for over forty years. As technology has changed, so have the ways unscrupulous people try to take advantage of landlords. Anyone who has been around the rental business probably has a story or two of someone who tried to take advantage of them or someone they know. Some scams target landlords while others target potential residents. Our aim is to help you to be aware so that you can become wise and avoid these frauds. For the upcoming months we will focus on a a series well crafted scams.
Scam #1 Making a fake ad and collecting rent and deposit money
Have you ever noticed an ad for one of your buildings that you did not post with a different phone number? Scammers will copy and duplicate the online ad of well known apartment communities then list their own phone number. They will take calls from prospective residents and try to get the first month’s rent and security deposit. They may take a holding deposit for an apartment and then disappear. People who are relocating to a new area are especially vulnerable to this. When the resident shows up for keys at the leasing office there is no record of them and their money is gone.
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