During the housing boom, drywall, which is gypsum pressed between paper and used in walls and ceilings, was imported from China to fill a domestic shortage. A growing number of homeowners — there have been more than 3,810 reports in 42 states and other areas — complain that it generates sulfurous odors and corrosion that tarnishes metals and causes appliances such as air conditioners to fail. The government recommends consumers remove any possibly faulty drywall. Although no study has yet linked the drywall to specific health problems, homeowners have complained of respiratory issues and headaches. A 2010 report from the Consumer Product Safety Commission identified several brands of Chinese-made “problem drywall” and said that some Chinese-made samples emitted hydrogen sulfide at a rate 100 times greater than non-Chinese drywall boards.
So far, Florida is ground zero. Up to 1,000 homes in the southern part of the state may be affected, says Jack Snider, president of American Management Resources Corp. (AMRC). Working for homeowners and builders, the environmental consulting firm has tested drywall for gases and checked homes for odors and corrosion. AMRC first began investigating odor complaints in 2004 and found drywall to be the cause. Because most drywall doesn't identify its origin, Snyder says, it took until 2006 before foreign-made drywall became the focus. Based on import records, he estimates that up to 60,000 U.S. homes may be affected, with about half in Florida.
This is not a new issue here in Florida. This issue started showing up around 2004 and it does not stop. This problem can continue to spread throughout the United States as more homes will become inspected for this problem. Are these drywalls from China a real problem for our health? The more I read about it, the more I come to believe that it is problem. I think that the behavior of this product can be affected by the local weather of each state, so the results of Florida may not be experienced in Montana. However, it warrants that this issue be seriously investigated. Chinese drywall is typically mixed in with untainted drywall, which is why people should not assume that their home is fine if they find U.S. drywall. Moreover, U.S. drywall may have been manufactured in China and rebranded.
As builders were looking for more ways to address the housing demand, increased material costs, and demand from shareholders for higher returns may have driven these companies to select products of questionable standards. Now the question I have is, where else were housing safety standards sacrificed?
Here are some Chinese Drywall facts that you may find interesting:
* 20 mil sq. ft. of Chinese drywall entered the U.S. since 2001
* More than 65,000 American homes could be affected
* Emits harmful sulfur gases
* Corrodes copper wiring
* Contaminates furnishings & fabrics
* Damages air conditioners and appliances
* The presence of Chinese drywall has been reported in 42 states, the District of Columbia and Puerto Rico.
Friday, April 29, 2011
Saturday, April 23, 2011
Proper Valuation of Your Green House
The value of green is many times lost in appraisals. Pitfalls are all over, but there are steps you can take make sure that they are taken into consideration in your appraisals. Green is something that is catching on in the United States and it should be something you should include in your marketing of your properties and be included in your appraisals. More buyers are interested in the green movement and want properties that are energy, water efficient. Unfortunately the lending community and appraisers seem to be behind on this concept and are not properly giving value to the investments made to make homes environmentally friendly.
It is the responsibility of the builders and real estate agents to insist that the lenders assign an appraiser that is trained in green construction. However, since real estate agents and builders are under the pressure of not influencing the appraisers decision on the value of the property, it falls on the borrower to insist on this requirement. Which it makes no sense since the borrower would prefer that those value be omitted to obtain a lower valuation of the property. This is a dilemma that needs to be addressed an insist from the lending and appraisal industry to take note and recognize the value of the efforts made to make homes that are ecologically friendly. It is imperative that the we obtain competent appraisers for this type of properties. I should be a requirement that homes with green features do have an properly trained appraiser that can recognize the value of them and properly value them. This can be accomplished without influencing the professional opinion of the appraiser.
When it comes to valuations, green is like any other feature in your property. Here are some suggestions on how to set your green home apart:
1. A rating from a recognized agency that shows how your green home stacks up against the same model built to minimally acceptable construction standards in energy efficiency.
2. A breakdown of the additional construction costs of green and energy efficient items.
3. Blueprints and detailed product specifications of the items that set your house apart from the rest.
4. A list of incentives, including tax breaks to the builder for green construction or the rebates to the buyer from the local power company, local, state or federal government.
5. A chart comparing green features with those in code-built houses.
It is the responsibility of the builders and real estate agents to insist that the lenders assign an appraiser that is trained in green construction. However, since real estate agents and builders are under the pressure of not influencing the appraisers decision on the value of the property, it falls on the borrower to insist on this requirement. Which it makes no sense since the borrower would prefer that those value be omitted to obtain a lower valuation of the property. This is a dilemma that needs to be addressed an insist from the lending and appraisal industry to take note and recognize the value of the efforts made to make homes that are ecologically friendly. It is imperative that the we obtain competent appraisers for this type of properties. I should be a requirement that homes with green features do have an properly trained appraiser that can recognize the value of them and properly value them. This can be accomplished without influencing the professional opinion of the appraiser.
When it comes to valuations, green is like any other feature in your property. Here are some suggestions on how to set your green home apart:
1. A rating from a recognized agency that shows how your green home stacks up against the same model built to minimally acceptable construction standards in energy efficiency.
2. A breakdown of the additional construction costs of green and energy efficient items.
3. Blueprints and detailed product specifications of the items that set your house apart from the rest.
4. A list of incentives, including tax breaks to the builder for green construction or the rebates to the buyer from the local power company, local, state or federal government.
5. A chart comparing green features with those in code-built houses.
How Will The Federal Budget Cut Impact You?
Here I will provide you a summary of how the budget cut will impact the various sectors of our lives. This will go beyond real estate, since our lives are affected by more than the news on the real estate market. Many of the cuts won't be felt by the public, others could pinch local government and low-income families.
1. Defense - No budget cut. Instead it received an increase of $5 billion from 2010. This brings the total amount to $513 billion.
2. Homeland Security - Received it first budget cut since its inception. Local government will receive the heavier burden, which reduces federal FEMA grants for first responders by $786 million and it cuts $226 million for border security fencing, infrastructure and technology.
3. Housing - Budget cut of approximately $1.4 billion from two HUD block grants used to rehabilitate housing primarily in low income neighborhoods and a fund that local public housing authority can tap to maintain and make repairs to housing units.
4. EPA - Budget cut of $1.6 billion, which represent a 16% reduction from 2010. There are concerns on how this agency will be able to pollution from mountaintop coal mining and mercury emissions from power plants.
5. State and Local Law Enforcement - approximately $700 million budget cut from the assistance program and a program to help develop crime fighting strategies and pay for technology.
6. Transportation - Approximately $6 billion dollars in budget cuts. Primarily the cuts are focused on highway projects and high speed rails. We need to see how this budget cuts in infrastructure could affect the competitiveness of the United States.
7. Nutrition - $504 million budget cut from the WIC program which provides healthy food and nutritional information to pregnant women and children younger than 5.
8. College Loans - Approximately $3.5 billion annually over the next 10 years. Eventhough the Pell grant was kept intact, on a compromise the summer grant was eliminated for those students that wish to attend year-round.
1. Defense - No budget cut. Instead it received an increase of $5 billion from 2010. This brings the total amount to $513 billion.
2. Homeland Security - Received it first budget cut since its inception. Local government will receive the heavier burden, which reduces federal FEMA grants for first responders by $786 million and it cuts $226 million for border security fencing, infrastructure and technology.
3. Housing - Budget cut of approximately $1.4 billion from two HUD block grants used to rehabilitate housing primarily in low income neighborhoods and a fund that local public housing authority can tap to maintain and make repairs to housing units.
4. EPA - Budget cut of $1.6 billion, which represent a 16% reduction from 2010. There are concerns on how this agency will be able to pollution from mountaintop coal mining and mercury emissions from power plants.
5. State and Local Law Enforcement - approximately $700 million budget cut from the assistance program and a program to help develop crime fighting strategies and pay for technology.
6. Transportation - Approximately $6 billion dollars in budget cuts. Primarily the cuts are focused on highway projects and high speed rails. We need to see how this budget cuts in infrastructure could affect the competitiveness of the United States.
7. Nutrition - $504 million budget cut from the WIC program which provides healthy food and nutritional information to pregnant women and children younger than 5.
8. College Loans - Approximately $3.5 billion annually over the next 10 years. Eventhough the Pell grant was kept intact, on a compromise the summer grant was eliminated for those students that wish to attend year-round.
Saturday, April 16, 2011
Real Estate Funds Are Defying Housing Market
While the media continues to fill the real estate news with grim data about decreased home sales and increased foreclosure rates in recent months, real estate funds, which typically invest in commercial property and multifamily housing, have soared. Based on Lipper, the 251 domestic real estate funds that it tracks have returned 55.7 percent over the past two years. Now compare that with 31.2 percent for diversified equity funds. Another research company, Morningstar, reported that real estate funds returned 6.1 percent in the first quarter of 2011, compared with a 5.1 percent average gain for all stock funds.
Before we start making conclusions and comments about this, we need to understand that these real estate funds have been able to outperform the average general equity fund at least in part because they did so much worse in the most severe part of the downturn. Commercial real estate for the most part hit the hardest during the heart of the financial crisis. On average commercial real estate investments lost two-thirds of their value in less than six months and some real estate funds ended 2008 with losses of more than 50 percent. What I want us to focus from this is that even on a down market there is opportunities. The managers of these funds did not give up, they reinvented themselves and went back into the market and now they are providing returns that surpass anybodies expectations. While most people are home scared of the real estate market, suffering of paralysis; these funds analyzed the situation and took action.
Here are two of these real estate funds;
1. Alpine Realty Income and Growth fund, which returned 9.24 percent in the quarter, making it the top-performing real estate fund among those tracked by Lipper.
2. Ivy Real Estate Securities returned 5.7 percent in the first quarter after a 28 percent gain in 2010.
Like any real estate investment, you must proceed with caution and seek professional help.
Before we start making conclusions and comments about this, we need to understand that these real estate funds have been able to outperform the average general equity fund at least in part because they did so much worse in the most severe part of the downturn. Commercial real estate for the most part hit the hardest during the heart of the financial crisis. On average commercial real estate investments lost two-thirds of their value in less than six months and some real estate funds ended 2008 with losses of more than 50 percent. What I want us to focus from this is that even on a down market there is opportunities. The managers of these funds did not give up, they reinvented themselves and went back into the market and now they are providing returns that surpass anybodies expectations. While most people are home scared of the real estate market, suffering of paralysis; these funds analyzed the situation and took action.
Here are two of these real estate funds;
1. Alpine Realty Income and Growth fund, which returned 9.24 percent in the quarter, making it the top-performing real estate fund among those tracked by Lipper.
2. Ivy Real Estate Securities returned 5.7 percent in the first quarter after a 28 percent gain in 2010.
Like any real estate investment, you must proceed with caution and seek professional help.
Tax Tips for Real Estate Investors
We are almost approaching the deadline of April 18th for the filing our tax returns. One of the important aspects of real estate investing is tax planning. Today I want to share with you some tax tips to help you minimize the tax bite.
1. Interest: This is often the largest deduction taken.
2. Depreciation: Not fully deductible the first year.
3. Repairs: Fully deductible so keep a running list of all repairs made.
4. Local Travel: Yes you can claim your travel to the property, even gas!
5. Long distance travel: If you own an out of area property hotels etc are allowed.
6. Home office: Offices must meet a minimum requirement but can be deducted.
7. Employees and Independent contractors: Anyone you hire to do work on the home.
8. Casualty and theft losses: Losses such as fire and flood are usually taken into account after Insurance.
9. Insurance: Premiums are deductible.
10. Legal and Professional Services: You can deduct your CPA fees incurred for rental property.
Tax planning is an aspect of your business that cannot be ignored and should not be trusted on inexperienced hands. Would you trust your local butcher with a open heart surgery? It is important that real estate investors seek professionals with experience in real estate taxation to assist them with their tax planning. Many times people fail in real estate investing, not because their ideas were bad but because poor tax planning.
1. Interest: This is often the largest deduction taken.
2. Depreciation: Not fully deductible the first year.
3. Repairs: Fully deductible so keep a running list of all repairs made.
4. Local Travel: Yes you can claim your travel to the property, even gas!
5. Long distance travel: If you own an out of area property hotels etc are allowed.
6. Home office: Offices must meet a minimum requirement but can be deducted.
7. Employees and Independent contractors: Anyone you hire to do work on the home.
8. Casualty and theft losses: Losses such as fire and flood are usually taken into account after Insurance.
9. Insurance: Premiums are deductible.
10. Legal and Professional Services: You can deduct your CPA fees incurred for rental property.
Tax planning is an aspect of your business that cannot be ignored and should not be trusted on inexperienced hands. Would you trust your local butcher with a open heart surgery? It is important that real estate investors seek professionals with experience in real estate taxation to assist them with their tax planning. Many times people fail in real estate investing, not because their ideas were bad but because poor tax planning.
Saturday, April 9, 2011
Force Ten Investments Investigated
Ft Lauderdale company Force Ten Investments aka Nationwide Short Sale Services and Ameriscott Mortgage is under investigation for alleged misrepresentations and deceptive practices regarding real estate short sale services.
This trend continues nationwide as many families do not understand the consequences of short sales and many times are manipulated by unscrupulous business people. Specially on this economy, where families are struggling with paying their mortgages, saving a home, keeping or seeking a job, or keeping a family under a roof, these thugs come to take advantage of them to have only a personal gain. Real estate professionals have the obligation to educate homeowners of the consequences of short sales and compare this option with other alternatives. We must provide to our clients what is best for them and not what is best for our wallets. It is sad that unethical behavior continue to taint the real estate industry with this type of behavior.
Contact your local DA's office and report all unethical acts. This is the only way to stop these people from continuing causing harm to unaware families.
This trend continues nationwide as many families do not understand the consequences of short sales and many times are manipulated by unscrupulous business people. Specially on this economy, where families are struggling with paying their mortgages, saving a home, keeping or seeking a job, or keeping a family under a roof, these thugs come to take advantage of them to have only a personal gain. Real estate professionals have the obligation to educate homeowners of the consequences of short sales and compare this option with other alternatives. We must provide to our clients what is best for them and not what is best for our wallets. It is sad that unethical behavior continue to taint the real estate industry with this type of behavior.
Contact your local DA's office and report all unethical acts. This is the only way to stop these people from continuing causing harm to unaware families.
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