March 2020 Part 2
Part 2 of Eric’s interview with Lynda Labosco.
Eric: Hi guys, thanks for tuning in, part two of Volusia Happenings. Eric Zimmerman, Adams Cameron and Company Realtors, Team Zimmerman. I am here with Linda LaBasco from LaBasco Jewelry Castle, here in Port Orange. And we were talking with her last time about investing in real estate and we established you, maybe what to look for when you’re purchasing a property.
This time, we wanted to cover a little bit of do’s and don’ts, maybe some tips and tricks, if you will or as things you wouldn’t mind sharing that you’ve, you know, learned over the years of doing this as there’s things you might want to share with us that you might recommend to our viewers?
Linda: The do’s and don’ts. One of the things I’ve noticed as far as these departments that are all in our area that they’re charging enormous prices. But so I asked myself, why people so willing to pay these high prices? And I think what it is, is such a busy lifestyle right now, where people hold down jobs or may possibly even two jobs, they don’t have time to maintain a home.
So, one of the things that I’ve changed in a lot of my rentals is I’m now starting to maintain the yard or the pool or something like that. Yes, they might pay a little extra in their rent. But a lot of people just want to come home, pull in the garage and not have to worry about anything else. And I think that’s why they’re going for these apartments. So that’s one of the do’s that I’ve just started. And then plus that, you know, a lot of people, you know, will drive through a neighborhood, say, and if the landscaping is not so good, they got that. Yeah, that’s a rental, because your tenants don’t really want to invest the money in buying shrubs or mulch or fertilizing or whatnot. But if you go ahead and do it as a homeowner, as their landlord, it maintains your property value, your neighbors like you a heck of a lot more.
And then plus that, it gives the tenant sense of pride when they pull up. So again, you always want to cultivate that a home kind of feeling with the tenant…
Eric: They’re there longer.
Linda: And they’re longer. Exactly. So you might spend a little bit more money, but it’s an investment in keeping your tenants happy and making it their home.
Eric: Okay. And what about, you know, preparing your home for rentals, is there any ideas or things you could share with us as far as getting it rent ready that you do?
Linda: Yeah. Well, first of all, if I always check my air conditioning and whatnot and it’s a good idea to have a maintenance man come in every once a while just to check the filtering systems and whatnot, because that’ll definitely ruin your air conditioning systems. But when I buy a house, it’s a little bit more expensive in the beginning, but what I’ve been doing lately is I’ve been tiling the entire house with a neutral cover, you know. And this way, if someone has a pet, they might move in and say they don’t have a pet but they really do and you do go ahead and cross that, they can’t ruin your carpet. If every time you lose a tenant and the carpet is ruin, that’s an expense. But if you have everything tiled, you get a professional company coming in, they sanitize, they steam everything and then tile last forever. It really does.
Eric: And again, versus so carpet, obviously is a more affordable choice.
Linda: In the beginning, it’s much more affordable. But in the long run, especially if you happen to have a major turnover in the house for whatever reason and people only stay a year or two, kind of have to redo that compound to maintain the quality of people that you want to live in your homes.
Eric: Exactly. Yeah. And I can see that too. What about, you know, I’ve had people with opinions both ways as far as purchasing one that’s turnkey, basically ready to go. You know, perhaps already seen updates or so or I see people the target ones that are in need of rehab. Do you have an opinion as far as one way or another on that?
Linda: I’ve done both. I have to admit when you remodel, it’s fun, it is a lot of fun, but it’s expensive. It always costs more than you think it’s going to cost. That’s for sure. It always costs more. You know, if you’re really, really handy and you want to do a lot of the work yourself, by all means, go ahead and do it. But I cannot do that. I don’t know how to swing a hammer. I have found when I have remodeled at once you factor in downtime, because it takes several months to go ahead and get it done and that expenses you don’t realize when you just eyeballing something. In a long run, I kind of found it was kind of even to be perfectly honest with you, you know. Unless you’re handy and a lot of people are, so that would be a great way to get into a property and a bit with the price.
Eric: So again, you know, it doesn’t necessarily you know, you don’t have to buy, fix [inaudible 05:02] that’s in horrible condition to actually get into the rental and, if you will, you can buy something that’s turnkey. And maybe that’s for a novice or somebody starting out, perhaps that might be a good stepping stone to start with something. You got a product, you can get it rented quickly, you don’t have the downtime.
Linda: It’s not so overwhelming.
Linda: And so for a beginner or someone who’s just starting investing, I think you might be better off just going with something that’s turnkey. Get it going, get it rolling, not overwhelm yourself.
Eric: Okay. That’s great. Let’s see. What else can we share with folks as far as maybe do’s or don’ts, what a tenant screening, is there a process that you have as far as finding the right tenant or ways to avoid the wrong tenant?
Linda: I kind of do it the old fashioned, way old school. I really like to sit down with the people and talk to them, just get a feel for them. Because they fill out an application, I don’t charge for my applications and apartments too, I don’t. And I check their references and whatnot. But the problem is, you really don’t know who you’re talking to on the other end of the phone. You know, if they’re renting from somebody else, one of the things that I’ve done is they’ll tell me, well, I’m living in this house, I’ve outgrown this house or my landlord is selling this house, dude, and then as well as I still need your landlord’s name and phone number for a reference. But what I’ll do is I’ll go on Volusia County website on the tax roll and see who willing owns house. Because they could be giving you their brother-in-law’s phone number, you know. A lot of times what I’ll do is after talking to them and whatnot, I will do a drive-by of where they live. If they live local, I will do a drive-by.
Eric: That’s a great tip.
Linda: You know, I take a look at how the outside is maintained. I even take a look at the window treatment. That kind of tells you how the inside is.
Eric: Right. Whether they got flowers in the window?
Linda: Yes, yes.
Eric: Maybe not the best.
Linda: Maybe not who you want in your home. Yeah. Again, you want someone to stay. You want someone not to live there, you want it to be their home. There’s a difference.
Eric: Absolutely. And I think that’s important too. I think a lot of people I see make mistakes as far as landlords go, is once they acquire the property, they don’t think about maintaining it and keeping it up in tip top condition. I know that’s one of your pet peeves and something that you’re really good about as far as keeping exterior maintenance good, doing your walk through on the properties, keeping things up fixing things as they need to be, when things will break, obviously. And staying on top of those and correct as they don’t grow into larger problem is as long as you move forward.
Linda: I found if, you know, and this is just life in general. If you treat people the way you want to be treated, things just work out a heck of a lot better. So I put myself in that position if I was a tenant. So when my tenants call me and tell me, the air conditioner is not working. To me, that’s a big deal. Because if I was in that house, that would be a big deal. So I try to get on it right away.
One of the things I do avoid though is when I rent, I don’t like to have a bunch of roommates, because you might have three people sharing a three bedroom house and they’re going to all pull their money together. To be perfectly honest with that, that doesn’t work.
Eric: That never really works out well.
Linda: Yeah, because it might be two great people and that one person and what will happen is the two people will come in and give their share and then you still check. And it’s just a logistic nightmare, just really is.
Eric: One ends up meeting their next boyfriend, girlfriend and they’re off and leaves the other ones hanging in there…
Linda: And then you don’t know who’s in the house. Yeah. So that is one thing I do avoid.
Eric: Okay. And it sounds like the properties that you are more or less targeting families, I guess you would, say with your properties versus, you know, singles or you know, for starting…
Linda: Wait,. I have nothing against singles. I do have a lot of singles in some of my houses and so in my apartments and whatnot. But I generally target three bedroom homes for families.
Eric: Pretty much. So put down roots and stay a little bit longer, the family?
Linda: Exactly. I’ve got families in houses over 10 years.
Linda: So and you know, their rents, it’s reasonable, haven’t raised it crazy in all. And I ride by and his beautiful flowers and I go in and they treat it as if I would treat my own home and they’re respecting my property and my property is going up in value. It’s a win-win. They have a nice home, they have a reasonable rent, their families could flourish. My property is in good shape. I could count on their rent.
Eric: It’s a win-win.
Linda: It’s a win-win.
Eric: One last question, I guess and then we’ll kind of break out. I had some I’ve had people mentioned me, you know, well, do I have to buy it cash in order to make something work, in order to get into income properties, it has to be a cash purchase or can you finance it and make it work?
Linda: You don’t want to pay cash, to be perfectly honest with you. You want to make your cash work for you as best as possible. So if you had enough money to buy cash a house, you’re much better off buying three houses.
Eric: Buy it.
Linda: You know.
Eric: Put that money to work.
Linda: Put that money into work. Exactly. Exactly. For the most part, I believe once you get involved in investing, your bank is going to require you to have a little bit more down, you know. But no, I would definitely go for, get a good relationship with your banker. There’s lots of banks in this area that they will work with you. Keep your credit score up, maintain your records, get your income tax down in a timely way. So you just never know if that next deal is coming along. You need to go into the bank with your income tax statement and go get another mortgage…
Eric: You got to be ready to go.
Linda: You got to be ready to go.
Eric: Right. Right. And that’s one thing Rebecca and I are great at is finding the deals. And I want to thank Linda for sharing some time with us this morning and some of her knowledge. If you have any further questions, message us below and we can either answer them. I know Linda would probably love to have you stop by and see them. They’re right there on Ridgewood, just south of down… in the LaBasco Jewelry Castle. I’m sure many of you out there have drove by, stop it and take it. Store is beautiful, all sorts of jewelry. It’s much more than what you probably would think just driving past. If you haven’t been to the store, check it out.
And this is Eric Zimmerman, signing off with another episode. And we’ll see you next time.
March 2020 Part 1
Part one of Eric’s interview with Lynda LaBosco on investing in real estate
Eric: Hey guys, thanks for tuning in again. Eric Zimmerman here, Adams Cameron and Company Realtors. Team happening segment that we’re doing. I’ve had a lot of inquiries as far as people that have now purchased their primary residence. And they’re inquiring as far as maybe possibly investing with flip properties or maybe a buy-and-hold income property scenario. So I thought it might be wise to reach out to one of our clients, Linda LaBasco. She owns the Jewelry Castle here in Port Orange and thought I wanted to pick her brain a little bit, maybe get some insights and tips and so forth that we can share with you guys. Linda, thanks for…
Linda: Good morning.
Eric: Good morning. So I guess my first question is, you know, people want to start investing in real estate. Number one, I guess, is that a good idea? Is that sound investment?
Linda: Absolutely. I’ve been doing it for many, many, probably even more years than I would want to admit to. But real estate is a fantastic investment especially if you get it in a really nice area like Port Orange. Port Orange is a wonderful city and I highly recommend it, matter of fact I have my children involved in investing.
Eric: Okay. And as far as targeting properties and thanks to give some suggestions as far as when what you’re looking for when you’re trying to locate an income property?
Linda: Well, first of all, I really do like Port Orange. Port Orange is got really, really good school districts and that I find that so important. Because a lot of you, rentals also families and they want their children to go into a really good school. I look for three and four bedroom homes, so someone could make it their home and raise their children and whatnot. I prefer cement block homes. I just find it easier to maintain. They’re cheaper as far as insurance. They’re just a little bit more solid. It’s just my own personal preference. Although there’s some beautiful wood frame homes, I just tend to go towards this cement block home.
Eric: Okay. And then you mentioned, obviously the school zone as well as important to you as far as deciding factor…
Linda: Very important.
Eric: What about price point is? Is that a factor to you or how do you establish, you know, what makes sense as far as where to purchase in dollar amounts, I guess?
Linda: Well, you know, for the most part, you have to consider, if you’re going to be investing for rental situation, you need to be able to be aware of how much your taxes are going to be, how much insurance is going to be, what your mortgage payments is going to be. So, and there’s only so high you could go in the rental. So I try to keep it probably around the 200,000 under 250,000 for a rental property in the city of Port Orange. And there’s some really good deals out there, there really is. And if you get a nice home, a lot of times I’ll be model it. And I try and look at the house, would I live here? Would I raised my children here? Because the whole point of getting a rental is you really do want the people to make it their home, treat it like their home and to stay. That’s the whole thing. You really want them to stay. It’s not getting every single dollar out, the highest rent you could get. No. You have to look at it long term. You don’t want people continuously moving out, moving in. You wants someone that stays. Because it costs money to refurbish a house, repaint it, recarpet.
So I would rather give them a little bit better price on the rent, so they figure well gosh, I can’t find this place anywhere else and then they tend to take care of it. You know, so that’s how I look. I don’t go for every single dollar.
Eric: Okay. So maybe that’s where, I think some investors might make a mistake is almost every year, they want to raise the rent, raise the rent, raise the rent, but then with that, a lot of times the tenants don’t stay as long.
Eric: And you know, like you mentioned before, I think you have the turnover as far as repaint it recarpet of course, downtime.
Linda: Downtime. Exactly, exactly. And back in the day, I used to have to put an ad in the news journal and that was expensive at the time. But now, of course, you have all different things on the internet. But now we really don’t want turnover, and no, I don’t raise every year, I really don’t. I’ve had tenants and houses for many years, never raised them, because I do a drive by and I’ll do an inspection. And if I see there’s flowers outside and I walk in and the house is maintained and they’re respecting the house. No, you know, if I do raise something, it’s very small amount.
Eric: And I know, you mentioned you generally try to hold for longer periods of time. So you’re not in a situation where you just like buy these properties to flip it a year or two. This is certainly more of a long term.
Linda: Yeah. Well, the whole purpose of me getting involved in the rental industry is, you know, I really don’t know what’s going to happen with social security. None of us know what’s going to happen with social security. So it was basically, when you are an investor, it’s also kind of like a tax shelter because you have depreciation, you have appreciation. And if you have a decent amount of down payment, your tenants actually making your mortgage payment for you…
Eric: It’s a way to build wealth.
Linda: It’s for savings as a tax shelter and plus that once you finally do get paid, then you’ve got your income for your retirement.
Eric: Okay. That way and I agree with you. And I must say, you’ve been successful at it, so you’re doing something right, obviously. I think what we’re going to do now, I’m going to say goodbye to Linda for the moment. And then tune in next time, we’re going to go over a few more things with her, maybe some do’s and don’ts and you know, a little bit more insight that she can give us and share with us and her own personal experiences. Again, this is Eric Zimmerman with Adams Cameron and Company Realtors. I’m here with Linda LaBasco, LaBasco Jewelry and Castle right here in Port Orange and we’ll see you next time.
February 2020 Part 2
Part 2 of Eric’s interview with home detectives.
Eric: Hey guys, thanks for tuning back in. Eric Zimmerman of Adams Cameron and Company Realtor. This is kind of part two our interview here with Sam from Home Detectives. I want to maybe take a little bit further in depth with Sam as far as some of the reports, what they cover and their purpose. Sam, I had someone messaged me about the wind mitigation report, specifically, they asked, you know, what exactly that is and they mentioned the new roof, is that something that you can do even on a home that you already own?
Sam: Absolutely, what you’re doing is, the insurance company, wind mitigation will help you get reduced costs… the insurance on your wind insurance. New Roof is going to be nailed down correctly, the sheathing is going to be nailed down correctly. If it’s a newer house, obviously, it’s going to be nailed down. But they’re going to go over and check it again and make sure that it’s nailed down correctly. There’s a secondary water resistant that can help with the cost of it. That gives you a credit. So there’s several different things that will give you a credit with wind mitigation, one is a new roof, one is a secondary water resistant that will help hurricane shutters or hurricane tied on windows, impact windows will help. If it’s strapped down correctly, newer house a lot of times have a double strap which will help with credits.
So they’re seven different things that will help with the insurance. They know that some of these things may be done, but the insurance company is going to give you the least credits for, will say may be a clip they’re considering where it might have been a double wrap within this strap that comes up the bottom of the wall, goes over the trust and how I have three nails at each side.
So there’s different things can help. Even if you own the house, this may not know that you had it and this will help you. You won’t get the credit if you have one left open with a skylight. If it’s a glass opening, every one of them has to be covered.
Eric: Okay, so you just can’t put in one window, say, hey, I’m hurricane proofed up?
Sam: Absolutely… it has to be all of them and people get upset about it, but they want the weakest point. That’s what they’re looking at is, what is the weakest point. If there’s several clips on it and they had it, that’s the roof, the wall connection. If there’s several and then only have one or two in the house, they want the weakest point, they don’t care that the rest of them are double wrapped. They care about them.
Eric: And I guess it’s important, I think the mentioned too as obviously building codes change over time. Right?
Eric: So I hear this from customers. And you know, it’s one of those things where just because the house is built with code from the 50s, 60s, 70s, 80s, I mean, they’re constantly changing and of course, always trying to make things better and safer, just because the house is may be built with code from the 80s or doesn’t have necessarily what would be our new construction is dropping, it doesn’t necessarily make it a bad house or an unsafe house, is just it is what it is right as far as the report goes.
Sam: It’s a better resistance for even a new construction, a lot of times there in the building, they may have down on the [inaudible 03:05] there were supposed to be a double wrap, but they may not have done that. But then it’s happened pretty frequently. So that’s what the insurance companies looking for, is they know that not everyone is going to be perfect. So what we’re doing is going through for them. Even though you may know how to check for wind mitigation, they want a licensed person individual, well as contractor or home inspector. We do the wind mitigation, we’re certified to do them. But like I said, there’s seven points that after been done, you know, it helps with your insurance.
Eric: So you show as a new home buyer, buying a home, it’s important to have one done because then you could potentially have credits or discounts basically for your homeowners insurance. And then even if you own your home currently, if you owned it for years, if you did things such as hurricane shutters, perhaps a new roof, things like that, it may be worthwhile have you come out do the report and then potentially savings moving forward…?
Sam: Right. And it doesn’t raise the price of your home. Having it done, it can help lower the price. I don’t want you to thinking that if we go do a wind mitigation house, it’s going to cause your insurance to go up higher because it’s not going to happen. What it’s doing is to help get you credits for that you save money not the cost, your actual money. Because some people, get worry, oh, my house I know it wasn’t…
Eric: It’s built in 50s, it doesn’t have the double structure there or…
Sam: Anything that can help with the cost that raise the coverage cost people get nervous, think, oh, I don’t want them to come here, it may put my [inaudible 04:42] or this or that. It’ll help with the cost, so that’s what it is for.
Eric: And I had somebody also mentioned about the secondary water barrier, what exactly is that as far…?
Sam: What it is in a hurricane or a high wind, the shingles can come off. Instead of using paper back in underneath, It’s a rubber that sticks to the roof. So everything that blow off, it’s going to stick to the roof and keep it water resistant from inside the house. It’s probably $1,600 to have additional under cost of your home when you’re doing a roof, but it pays for itself after a couple years. Just like having hurricane shutters at first, the cost might be a little high, maybe something that we don’t want to do, but it’s going to pay for itself. Wind mitigation is built for five years. And if you have these things that just helps it , that’s going to help. Now a four point insurance you were asking about?
Eric: Yeah, that was the other one I’ve had some people mentioned too and we wanted to kind of cover what those things were. I assume there’s four points of… what are you looking at?
Sam: Well, we do a home inspection where you’ve got a full report of four point, they don’t want to see that the lock doesn’t work in a house. They want to know what the four points are, you know, the roof edge, whether it’s leaking, whether it’s missing shingles, the heat narrow, what how old they are, whether they’re operational, electrical, if it’s been upgraded, if you have GFI, if you have our fault interrupters, or similar to what GFI, this will help with your insurance also. If it’s a newer panel… have been replaced, this all help with insurance, like I said, it’s not going to increase it, they do ask, if a water tank is older, they’re going to want it, [crosstalk 06:30] it could have potentially leak, especially those in an interior of the house and garage, it’s really not going to cause any damage.
Things that they know may fail. So what they want to know is you may have benefit this home and the plumbing of [inaudible 06:46] building up, it’s going to help the insurance.
Eric: Sure. So if you have an older home that has been updated, the plumbing has been replaced or the craps or electrical had been rewire the panel, those sort of things, I think you touched on that the first video. You know, just based solely on age doesn’t actually give the whole story of the home, you know, over years, it could have been upgraded or updated or, you know, completely redone. And so in essence, it may be as good or better than a new home, depending on what was held in the property. So that kind of, lets the insurance carrier realize and then know what’s going on with that property. Right?
Eric: And I guess the other thing too, as people mentioned in question as far as the home inspection itself goes, so we have the wind mitigation report that you can do at that time, which gives a potential discounts on our wind insurance. And then you do the four point of course, which almost sort of potentially could help with the insurance cost as well. And then the home inspection, now that actual report isn’t necessarily for insurance purposes, that’s for the homeowner themselves, correct?
Sam: Right, the purchase. Right.
Eric: And then that report, basically just enlightens them as to any defects that might get the property. Right?
Sam: Right. And what we try to explain to individuals, as I said before, it’s to give you more behind duelist, it let you know, this is older and that’s older where things are in the house that you may not be aware of if there’s any type of structural problems that we see. You may not see when you’re walking around the first time you build the house. So it’s another set of eyes to make you aware.
Eric: And I guess… Do you tell somebody buy this house, don’t buy this house?
Sam: No, we never do that. And we normally don’t ever tell you that some of these have been replaced, because most things can be fixed in order to do it. Like I said, very seldom you find one that you would, we would never say don’t buy it because we don’t know the reason you’re purchasing. Our job is to tell you what’s wrong.
Eric: Right. So your job to locate deficiencies, give that information to the buyer and then the buyer ultimately makes the decision of whether or not the property is right?
Sam: Right. And that’s why you’re representing them because you know what kind of situation they’re financially or [inaudible 08:54] or what they’re looking for. So, with you and them going over, now, you have an understanding, okay, it may need a new roof, it may need this, we’re going to renegotiate it again, it could be saving you money. A home inspection most of the time will save potential buyer money with it. So it’s not to say that, okay, may cost you $300-$400 for home inspection. But most of the time, if you utilize, it will save the money, you know, it will save you expensive cost. If you want to work like a structural problem can cost you thousands of dollars. It doesn’t mean you need to work with, no it can be fixed. But it gives you that opportunity to maybe go back to the table and say, hey, we have a structural problem, it’s going to cost X amount of dollars because everything can be fixed, so there’s no reason to walk away from it. That’s between your realtor and you. You know in your situation, just to give you another opinion [inaudible 09:50] helps.
Eric: So at the end of the day, I mean it sticks and stones, it’s made a 2 by 4 if it’s made of lumber, doesn’t matter…
Eric: Or submit anything can be fixed, I guess ultimately…
Sam: My job is not to give you a yes or no. My job is to tell you the facts and that’s what it primarily is. To give you the facts of the house, to show you how things operate, to let you know it’s something might be faulty, sometimes there’s items that are recalled bottom that they may need to just so you’re aware of the [inaudible 10:26] recall and some things products over time, you will find you’re faulty. So it’s that type of thing. So when they’re old electrical panels, they want them replaced. So it’s stuff like that can help. [inaudible 10:39] you’re walking into this. You may not go out and buy the big screen TV because you know that you’re going to have to, you know…
Eric: Budget for water heaters or whatever the case may be.
Sam: So that’s what is for [inaudible 10:49] help you.
Eric: Well, that’s great. You know, I think this is pretty enlightening. I think there’s some everything up, I mean, get a home inspection people, again for, probably the largest investment you’re going to make in your life financially, if you want to make sense to spend the dollars that it’s going to take educate yourself as far as the condition of the home, the structure. And in addition to that, a lot of the reports that Sam can do for you, can also save you money as far as your insurance premiums go to.
I want to thank you guys for tuning in. And be sure to give us a call if you guys have any other questions for real estate, feel free to comment below if you did have questions. And Sam, if anybody did have questions or did want to schedule perhaps wind mitigation report, how would they contact you?
Sam: Can call us at 386-615-9100 or you can go on our website, homedetectives.com and reach us that way also.
Eric: Great. And always teaser material when you need us, 386-846-1515. Thanks again guys. Till next time
February 2020 Part 1
Part 1 of Eric’s interview with Sam from Home Detectives
Eric: Hey guys, thanks for tuning back in. Eric Zimmerman with Adams Cameron and Company Realtors. Teams Zimmerman. I’m here with Sam with the Home Detectives. I’m going to ask a few questions as far as home inspections, what they cover, questions that you might have and something you never thought to ask. Sam… about you?
Sam: Thanks for inviting me today. We have a home inspection company, we’ve been doing business since 1997. We go from as far as Jacksonville to probably the sale side of Orlando. We have several people that do home inspections with us. We normally, if it’s a larger home, we use two people instead of one so the roller is out there as long.
Our job is to inspect the house, from top to bottom, when its mostly visible it’s visible. Doing the inspection, we don’t move furniture, out of the house, it’s visual but it’s another set of eyes looking at a home versus a home or purchase or going… to the house. What we’re doing is we’re going through from the top to the bottom of the home, checking the roof, the attics, the electrical, the plumbing, the heat mirror, the structure of the home, things that you wouldn’t think of looking at it being a new buyer or even a seasoned buyer somebody in construction of a home. So again it’s another set of eyes looking for.
We have three inspectors total. We do 1,500 inspections a year, every year. We go over things, especially with new home buyer, we’ll go over the house spend a extra time with them, showing them where the water shut off the power, we’ll explain this, a lot of items in a home inspection or honey do list basically. So what we’re doing is if there’s a structural problem, if there’s, maybe [inaudible 01:54], are older, we’re going to them, so this way, nothing they need to be replaced, but it may cost you this much money to get them fixed where you, yourself and then we’ll go back to the table and maybe renegotiate the price a little bit. So it helps with different things with the home inspection.
Some people get tired of a… light bulb doesn’t work. We’re not really there for that, we’re there to see if it’s got power, but not if the light bulb needs to be changed. Or some people get tied up on it. But the majority of the stuff is on to us as partners.
Eric: As far as days of operation are you…
Sam: Days of operation, we work seven days a week. We answer the phone, my wife is actually the office secretary, so we’re more dedicated. As I have an answering service and you’re calling you know you’re talking to, you’re going to be talking to my wife, Lisa. She’s going to walk you through what type of home inspection, which whether it’s an insurance inspection or the wind mitigation inspection insurance help with the cost of the home insurance. So the insurance company will ask for those.
Eric: Yeah, just to back up really quickly. So the reports you’re talking about, what reports can you do and what type of inspections do you actually cover?
Sam: But, it’s the home inspection, the whole total home inspection. We’ll check the pool sprinkler system, the heat narrow, the electrical, the roof, the attics, the structure of the home. The wind mitigation is how you can get reduced costs if the house, the straps, the trusses to the walls [inaudible 03:32] tie down correctly. If you have these things [inaudible 03:37] hurricane shutters, all the ones that help with your insurance. So it’s not quite as high especially with an older home where they were up to code as they are today. For the wind resistance, this will help with your insurance.
Because what they do is they, say well, the house in 1950, it wasn’t constructed like they are today with the wind pressures. So with this if people were to have modified, it helps with the insurance. The insurance inspection has a four point which were tech checking the roof, the heat narrow, the electrical and the hot water tank of the plumbing. What the insurance company wants to know is because over time things fail. So they want to know if they have water tank is over 10 years old, if it is, they may had to replace it, otherwise still raise your rates out of because they know that more. The same thing with a roof, if a roof over 15 years old, they get leery about it, because they’ve been wanting to replace so they won’t insure you.
So these are things, so this is why you have a home inspection is because you may think looking from the ground with the roof looks great when you get up there. But when we get up there, we can give you a better idea about the age of it, the condition of it, how it’s wearing. So it gives you a clearer look at it.
Eric: And I think too, it’s important, I think for people to realize as well as even if everything is in tip top shape as a newer roof, if it hasn’t newer plumbing, it’s been updated and so forth. Actually, it’s good to have those reports done as well, because you’re actually you’re eligible for credits based on those things with EPS are the best state. So when you do a new roof, there’s new nail patterns that you have to do if they have a secondary water barrier under the roof, the newer shingles are eligible for credits that otherwise you wouldn’t know to take advantage of unless they have the report. Is that correct?
Sam: And you have to have a licensed home inspector do it. So that’s one another reason why you would hire us. The inspections cost base price is $300. It’s well worth it to get you, when I say you get your money back, what I mean is, the items that we find wrong, we’re not there to try to justify our pay. What we’re doing is even though you may know how to build a house from the ground up, nobody is going to listen to you what you have to say, because they think you’re trying to beat them up on a prize. Where you have an outside person come in, go through the home, may find things that you didn’t notice. And it’ll help with the negotiation if that’s what you’re trying to do or let you know that, okay, well, it has a structural problem or the worst thing is to replace, you may not have the finances to take that into account to buy the house. So you may walk or try to get it renegotiated…
Eric: Basically, you know what you’re getting into.
Sam: Right. And you know, absolutely.
Eric: And I guess I get a lot too. People mentioned or asked me they say, well, you know, is this going to pass the home inspection? Is a home inspection to pass and fail?
Sam: That’s not a pass and fail. You know, most of the things we find at a house most of the time are pretty much handyman work, you know, how do you do this type of stuff that you would do? And obviously, if the [inaudible 06:44] failed or going to the point that it only is a year or two, it’s not failing or passing, but it’s letting you know that, okay, we’re buying this but it may cost us under a rough two years from now.
Eric: Going with your eyes open.
Sam: Right you know, what it is. That’s what you want is your eyes open to everything so you’re aware. Because sometimes what happens, it’s like buying a new car, you may not do any research on it, they’ll find out all these different things are wrong later and it could have saved yourself money and aggravation from it. So what we’re doing is eliminating the problems that you may not be aware.
Eric: Okay, that sounds great. I’m going to touch on a few other things with you on our next segment. I want to appreciate you guys for watching this time. And tune in next week for part two and we’re going to cover a little bit more with Sam and go over how to contact him and reach him if you have some needs for a home inspection.
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January 2020 Part 2
Part 2 of Eric’s Interview with Ryan of Ryan’s pest control.
Speaker 1: Hey guys, welcome back to part two. We’re meeting here with Ryan with Ryan’s Pest Control’. We’re going to talk a little bit of some do’s and don’ts as far as real estate industry. Ryan, what can you tell us?
Speaker 2: Okay, so as I previously stated that I’ve worked – I have almost 33 years’ experience. The one thing I always tell my employees, you’ve never seen at all. Because I stand corrected every day that I think I’ve seen it all. But over 40,000 inspections, I’ve got a pretty wide spectrum of what I’ve seen, what I haven’t seen, what’s resulted in decisions that people have made. So, I’m gonna start with the don’ts.
Speaker 1: Okay.
Speaker 2: The number one don’t that drives me nuts is I have a block home; I do not need a termite inspection. The only difference between a block home and a frame home is the load-bearing walls. Everything with them is the same. The framing, the door jam, the drywall, they eat the paper of the drywall, the truss system, trim, is all vulnerable.
Speaker 1: A lot of the wood.
Speaker 2: Lots of wood. What people don’t realize is, the exterior is nothing on the entry point. You have plumbing lines coming up in the middle of the house. So, if you have a kitchen and up come the termites in the middle of a house, what good are your block walls doing at that point? I’ve treated as many block homes as I have frame, if not more.
Speaker 1: Okay, that’s interesting. I hear that a lot too.
Speaker 2: Yeah, they’re huge don’t. As it pertains to real estate. The seller has a termite bond I don’t need an inspection. What people don’t realize and as we kind of touched on in the first time I was here is that, a termite bond or termite warranty only covers one specific entity, typically. It’ll cover subterranean, or it will cover dry wood. Whereas the state of Florida, when you’re doing a wood destroying organism report during your due diligence period covers wood rot, dry wood, subterranean, dent wood, powder post beetles.
So, if one takes the approach, I have a bond I don’t need to worry about it, buys the house then suddenly the bonds for subterranean and they walk and they go dry with termite damage. It’s damage. Have they done that WDO? They will do their due diligence and found out about it now they have an option. Do I want to continue? Will the seller pay the tent the house? Whereas, if you close with just that bond, you’re stuck with that, number one. Secondly if you do the WDO on the house, where the bond was in place. I do an inspection and I found subterranean damage. Once again, you have options. If you close you have one option and that’s to deal with that company. You might not like what they do or what they say.
Another thing people don’t think about, I have a bond. If you flip on any service agreement any termite warranty and it’s consistent. There’s a whole bunch of exclusions of mine included. The one that people I see their faces and their jaws just drop is, it has to be live. So, if you decide to remodel your house and you have it, they bond and you open up the walls in the kitchen and it’s just all eaten, then you can just crumble it in your hands. Unless they’re live, that termite that company is not responsible for that. The logic is as we treated that we did our job, we just couldn’t see this.
Speaker 1: Right, and you can’t go in and replace wood that’s inside of a wall, the treatment of.
Speaker 2: Exactly, you don’t know that it’s there but the damage is there. Not say for instance I’m doing the inspection the same scenario. I find one pin hole, they have options. I’m uncomfortable with this, it’s damaged up above, pinholes here I’m gonna go look at something else. Whereas, if you close do you have no options and that’s not going to become. So never ever be complacent with something like that.
Speaker 1: Just because the previous owner has a bond, it certainly makes sense to have your own inspection performed.
Speaker 2: An inspection performs. You know we have to look at this a lot of people, a lot of the realtors are run to say, I don’t like the bonding company I want someone different. Fair enough, however they are two different liabilities. You know the state controls my ability to perform my job. They can take away my and my employees’ livelihood, you know without licensing. I’m beholding to that license. So, even though I have a bond on the property I’m going to report what’s there regardless.
Speaker 1: Right.
Speaker 2: And everyone should.
Speaker 1: Sure okay.
Speaker 2: Dues, you know typically it’s most people’s largest investment for goodness sakes 80 bucks to have those options to make an informed decision. Your home inspection for the roof major systems, appliances, plumbing, electrical. Which probably cost three times as more.
Speaker 1: Yeah and I guess it depends on the house and obviously a 2-bedroom, 900 square foot house. It’s gonna be a different price than a 12-bedroom mansion that’s 10,000 square feet. But on average, can you give us some sort of range is what? So, we located we have termites. That don’t necessarily the end of the story worst thing in the entire world. I guess my question people think, oh my gosh gonna cost a fortune to treat for these. What would you say the expectation would be to do so like that for the two different types?
Speaker 2: It does vary preventatively on average with us now for a house under 3,000 square feet that does not have a problem, just to prevent it as we’re on 540. So, I mean a large house, I did one yesterday on the river. It’s gonna be just over a thousand but it’s 6,000.
Speaker 1: So, again to me it’s a house on the river without evening knowing it. It’s it’s over a half a million dollars. So, a pretty small investment to protect an extremely large investment.
Speaker 2: Yeah, it’s a no-brainer to me. I tell folks I’m doing the inspection; I hate salespeople, I don’t want to be a salesperson. I want to give them an informed information and they trust their intelligence and make a good decision. So, how many people do you know that do not insure their houses for floods and storms and everything, sinkholes and hurricanes? Well termites statistically annually cause more damage than everything you insure your house for combined. So, the insurance industry was absolutely not to do with termite insurance but that’s where we filled in that void.
Speaker 1: Okay.
Speaker 2: But unlike hurricanes, we can prevent it.
Speaker 1: Right.
Speaker 2: So, your odds of this happening are so much higher than anything else but you can prevent it.
Speaker 1: When you speak prevention, you treat for say subterranean. You said you treat the earth. Is that something you do every year annually? Is treat this soil around the house or how often that perform?
Speaker 2: It varies. So, in 86 they band all the inorganic products like in chloridine and they forced us, which environmentally is good. They forced us into organic products. So, it breaks that break down. So, the product I uses Termidor typically nothing else or a variation thereof. I’ve made the decision to retreat every ten years.
Speaker 1: Okay. So, you treat and it’s basically good for ten years before treatment goes as long as you continue with the annual inspections.
Speaker 2: Correct. They renew the annually, we come out and inspect it annually. The benefit of that is, we’re not just looking for subterranean we’re looking for everything.
Speaker 1: Right. So, now they’re not just the subterranean, okay great but that doesn’t mean that the drive what is you touched on earlier doesn’t mean did you drive with swarming or whatever. They somehow got into the structure or the beetles or anything else, right.
Speaker 2: It will tell a customer about everything’s as far as that goes. So, this is general information as well in each house is unique and can cost more depending on a circumstance.
Speaker 1: Sure.
Speaker 2: Another common a do is, please understand what your coverages are. Because one will not cover the other. Almost weekly get better frustrated customers of other companies I’ll make a point of my folks telling them. This is what your coverage is for there’s not, you know this can’t happen just understand it. If you have subterranean coverage it’s not going to cover to tent your house. We’re not being mean, it’s just the biology is different, differentiate policies. Saying dry wood and subterranean.
Speaker 1: Okay.
Speaker 2: Dues, keep the treated regardless if you have a good relationship with a pest control company that’s treated you well reliable but a good reputation. My goodness just treat the house. It could prevent these things. They could cause significant damage. It takes a long time but they can cause significant damage. They each about an inch a day. (Ryan misspoke. He meant about an inch a month).
Speaker 1: Okay. Wow well within a week, that’s a lot of damage. That’s a full blown worst case scenario. Well I think I covered a lot of information. If you have more questions obviously is there a way that they could reach you right. Website, you have phone numbers or they could call if they have more questions.
Speaker 2: Absolutely.
Speaker 1: Wanna schedule an inspection or to schedule a treatment.
Speaker 2: Yeah, the offices located 751 South Yonge Street, that’s on Ormond Beach. If you’re getting your holiday cheer, we’re right next door the ABC. The phone number 386 672 7775 and then we can schedule an inspection. If I may add one more do in there?
Speaker 1: Sure.
Speaker 2: As it pertains to real estate, we’ll come look at a house before it’s been sold. We just don’t issue WDOR, it doesn’t cost anything its free. You can then as a homeowner, have options where you don’t have options once it’s on the contract.
Speaker 1: Right. So, how can you be there, you kind of get ahead of it, right.
Speaker 2: Get ahead of it. This doesn’t cost anything. So, that could be scheduled at 3866727775.
Speaker 1: So, why wouldn’t you? Well, I appreciate you guys tuning in, thanks again. Tune in next time when we interview another business owner here locally in the area and kind of pick their brain, when it comes to real estate. Again, if you have any need for real estate as far as buying and selling, obviously reach out to team “Team Zimmerman”. 386 846 1515. Thank you.
January 2020 Part 1
Eric interviews Ryan’s pest control on the benefits of using pest control.
Eric: Hey guys thanks for tuning in again. Happy new year. I’m here with Ryan from Ryan’s pest control. He’s going to answer a few questions and go over some information with us with regards to termite inspections. Ryan, I guess to start off people always ask I recommend getting at ‘WDO’ report and people are asking, ‘What is that?’
Ryan: Okay, if I may just speak from experience I’ve done since 1987. I have done over 40,000 WDOR, is actually what they are “Wood Destroying Organism Report”. So, like any other trade whether it be electrical or plumbing, we are regulated by the State Department of Agriculture Consumer Services for pest control. They mandate what is wood destroy, they mandate and license us with our own section of laws. They also mandate the form and that is the only thing whenever there’s a transfer a real estate that can be reported or just called a Florida Statutes 13 6454 sumner.
What is it in layman’s terms is basically, the state of Florida considers termites, particles beetles wood rot, wood destroying organisms. Termites encompasses a group of them and not just termite because there’s different biology and we’ll get into that in a little bit.
Ryan: It’s made on what it’s visible and accessible at the time of inspection that does not constitute a warranty. So, buyers cannot get confused with that.
Ryan: Because you can do an inspection on Monday and then on Wednesday. They saw there was nothing externally visible. It can be a tiny little pinhole that they can create in a few minutes.
Ryan: So, people mustn’t confused it, being some type of warranty which it isn’t obviously. From your end obviously, you advise your customer based on our findings to do their due diligence and make decisions based on the home inspection as well as the termite inspection.
Eric: Right. Then you mentioned as far as that report goes, there’s multiple types of termites.
Ryan: Correct. So, my favorite analysis is people say termites a termite, well yes but is it specifically the primarily the ones we deal with the dry wood of the subterranean. Down port is well but in the 33 years, I’ve never had an infrastructure.
Ryan: So, never had to report on anything like that. So, the biology is different. Both the fire and the flood will destroy your house but they do it in different ways and they sure do that in different policy. So, that same applies to subterranean and dry wood. Subterranean below ground means that they have to have a moisture source. They have to go back to the ground; they are way more destructive than the dry woods. They will swarm in the spring and sometimes in the fall. They shed their wings and then they have to go back to the ground to start a new colony.
Eric: I mean, you said they swarm. Do they swarm with in the same house or is it possible for them to go from house to house where they swarm?
Ryan: No, they have to go back to the ground. So, the swarming is an indication of a mature colony. So, colony reaches a certain maturity they generate reproductive. So, you have the Queen, the workers, the soldiers, the nymphs and then the reproductive is the swarms. So, in the colonies big they swarm out with the intent of starting a new colony. They are not very good fliers, they’re delicious to ants and some birds and everything else is literally thousands of them that will swarm. However, they have to have to find a way to get back to the ground to start up a colony. So, they cannot swim your house into your neighbor’s house.
Eric: Okay, gotcha.
Ryan: Subterranean, dry wood on the other hand can but they’re much smaller. They do not require moisture source they live within the confinements of the wood. They extract sufficient moisture as they digest the wood. Colonies are way way smaller but it’s much much more intrusive resolve as being tent fumigation.
Eric: So, I said you mentioned tent so obviously there must be two different ways to battle these retreat them.
Eric: Subterranean and the dry wood, correct?
Eric: Correct. So, if you tend to the house that had both, because dry wood lives within the confinements of the wood. It’s gonna kill him regardless of where they are. If there was subterranean last that time it’s going to kill them. But fumigation during the fact is the most deadly form of the extermination that there is after the fact it’s the safest because there’s no residual.
So, it would kill whatever subterranean we’re in the house, the day of the tent comes off they’re right back in. So, those you have to treat with the chemical at the ground level. We use their biology against them as far as products that they interact with them, undetectable to them ultimately will affect the whole colony.
Eric: Okay. So, kind of two different treatments for two species.
Ryan: But as it pertains to the real state, obviously these are things that would be reported on. In the event, we find stuff like they’d obviously a custom can make decisions based on that they due diligence period.
Ryan: You’ve spending on average, what’s the 244,000-average price for a house in this area.
Eric: There for median.
Ryan: For goodness sakes, please even a hundred bucks to have your house inspected and save yourself a costly issue down the road.
Ryan: It’s a no-brainer to me that people decide not to, whether it be me or any other qualified professional.
Eric: Yeah, I always recommend that we do it again I think the cost versus the potential savings. At least that’s something I want to touch on as well but this report sometimes is confusing. Because it’s possible obviously to have a small amount of damage noted that’s not necessarily a live activity, could have been I mean houses you know 40 years old ,50 years old. As possible at some point there was a small point of damage does it necessarily cost you to, oh my gosh we would want to buy this house, is it that bad, right.
Eric: So, I think they said well, it was noted that there was damage but that doesn’t necessarily constitute that there’s activity, right. I guess that’s kind of sometimes people get confused when they see the report as far as what does it actually mean.
Ryan: Very confusing, we can thank to legislature for that. That had nothing to do the termite industry. We have input but a lot of times I don’t listen to it. So, the first question says, is there live and the same question says is there evidence of damage? So, you can have evidence and damage as you just described without having live activity. It’s confusing, people say but termites not know this evidence of damage from them. There’s not a day that doesn’t go by. Let me rephrase that, it’s rarely a day doesn’t go by that I don’t find evidence.
Ryan: Yeah, its Florida folks it’s you can take common-sense approaches. I’m never complacent, I try and present a fair and accurate description if your customers on hand of what they have. It’s like a roof leak, you get a roof leak you fix it. You can termite it, you treat it. It does just because you found evidence doesn’t mean asks for me back.
Eric: Exactly. There’s a stain on the ceiling of the Attic, I’ve got a brand-new roof on it. I mean yeah there’s a stain they’re never there always be a stain there of course unless you rip off the celling and make that go away. I had one recently too, there was some damage on one of the trusses in the Attic. Again, you can’t really get rid of it.
Eric: There’s a lot of activity but again they would still be noted as damaged. So, I think that’s something that people can’t keep, I think respect on, right.
Ryan: Yeah, and a lot of times they say well what happens if this wall will eat up. I cannot see through walls; I wish I could. My standard answer to that is, well what if there isn’t. So, you go ahead and cut a hole in this wall and there’s no damage, another line you got damage because you get hole in the wall. So, it’s a don’t if you do don’t, if you don’t situation. Remembering, it’s just what’s visible and accessible on that day at that time.
Eric: Quickly, here want to just finish up this part of our segment with. Once you do treat or expect to get through, what I was asked about the bond. Can you cover that a little bit?
Ryan: Sure, a bond is almost an incubus anymore. It’s more of a warranty and that’s the way the state makes us word pay a coverage of service coverage which means it’s limited to retreatment. So, anytime you do a complete WDO application, by law you’re obligated to issue a warranty for one year.
Ryan: Most of them have the option to extend that deal in initial year. In our case, whether it be subterranean or dry wood.
Eric: Okay. So, as part of this inspection when they buy the house, if they do choose to have the WDO or performed they’re basically covered for a year as far as treatment.
Speaker 2 No.
Ryan: No, only if you make an application.
Eric: Gotcha right.
Ryan: In other words, if Mrs. Jones buy the house, we’d find a little bit of evidence. It’s on the report Mrs. Jones is comfortable with that, she closes. Then close Ryan back and says I want to protect it. We make an application that’s when the warranty will kick in. There’s no warranty with WDOR’s, it’s just an inspection source.
Eric: Really inspection to let you know what’s going on, if anything at all. Then if you choose to take a one step further then that would be treatment and then is you bond on an annual basis.
Eric: Then every year you can keep that up for as long as you own the home for the rest of your life, correct.
Ryan: In our case, varies company to company.
Eric: Sure. In your case, they’re covered.
Eric: They can be covered for the rest of the time they own the home. That’s great. Well, I wanted to thank you guys for tuning in on this episode. Check us out next time, I’m going to get with Ryan and we’re going to cover some more kind of do’s and don’ts as far as real estate, insects, termites, the bugs and creepy crawlies. We’ll see you next time.
December 2019 Part 2
Eric interviews Mary Summers of Lighthouse Title of East Florida Inc. to help educate others on the importance and benefits of using a title company part 2.
Eric: Hi guys. And thanks for joining us again. Today, we’re with Mary Summers, owner of Lighthouse Title here in Daytona Beach located at 104 LaCosta Lane, which is just off at Dunn Avenue and Williamson.
Eric: She’s going to answer a few questions for us. Let me go over what her business does and how she can help both in the real estate side of things. I have questions as well that are frequently asked. I guess we’ll start today, Mary, what exactly does a title company do?
Mary: Well, Eric, we search title on property. We go back 30 years, sometimes further than 30 years, make sure that everybody that’s ever had an ownership interest in the property has got their interest to the following people. Any liens, judgments, mortgages have all been paid off. If somebody has passed away in the past, we review the probate, make sure everything is in order, all the areas, again, deed at their property. That’s kind of step one of the 52 steps that they are handling a purchase transaction.
Mary: We also work with the lender to prepare the settlement statement, handle the closing, get documents signed from the seller, make sure everything is recorded properly, and then we write the title insurance policy.
Eric: Okay. So, yeah, I think there’s a lot more, I think, entailed in what people think. They just show up a lot of times. They sign their papers. They have no idea what’s actually going on days and weeks prior to them even arriving at the closing table, right? You mentioned title insurance. And I guess that would be the next question is, what exactly is title insurance?
Mary: Well, in a transaction and cash transaction, all we write is an owner’s policy. And that ensures the buyer that they’re getting clear titled to the property. There’s nobody else that has an ownership interest. There’s no liens or encumbrances on the property that they’re not aware of. When you have a finance transaction, we write two policies. We write the owner’s policy to ensure the owner and then we write a lender — a loan policy for the lender. And that insures them that their borrower owns the property that they’re what we call first lien position. Meaning, if the lender dated to foreclose, they would get the first dollars out of the foreclosure sale. So, if there was an old mortgage that wasn’t paid off and they went to foreclose, the money from the foreclosure sale is going to go to that old mortgage before they would get any money. So, that way, if something gets missed, we’re all human and stuff does happen.
And so, if mortgage was missed, or whatever that lender would file a claim with the underwriter, which most of our stuff is written on stored title. We also write on Westcore. And they would file a claim on that and the title insurance would pay that old mortgage off.
Mary: Likewise, if you have somebody in divorce situation and the marital settlement agreement said that the one spouse was supposed to be at $10,000 in exchange for their interest in the property, we verify that they got the funds. They sign an affidavit to that effect. If they didn’t get the funds, then there’s the potential again for a claim under the owner’s policy. And the underwriter will then turnaround and pay off that spouse that didn’t get paid out at closing that should’ve.
Eric: Okay. So the main differences between these two, being the owner’s policy for the owner — I guess, the lender’s policy you mentioned, what would you say the main difference between the two are?
Mary: Well, it’s just that the owner’s policy insures the owner, and that’s good unlike any other insurance. You pay for it one time and it’s good for the entire time that you own the property.
Mary: The lender’s policy is specific to that lender. And that’s telling the lender, “Yes, your borrower owns the property and there’s nobody that has an interest in the property superior to yours.”
Eric: Okay. So, for example, if someone is purchasing a home and the owner before them didn’t pay the roofing contractor, for example, is that something that would deal with the insurance policy then?
Mary: Well, yes. But it should show up anytime that work is being done an excess of $2500 a notice of commencement gets filed.
Mary: That gives a contractor lien rights for one year. So, we go through it an awful lot. You went through it on your home.
Eric: Sure. Yes, we did.
Mary: With windows.
Eric: We did.
Mary: And so, we make sure that the contractor got paid. We terminate that notice of commencement. Because if the contractor didn’t get paid, their lien — because that notice of commencement was before your deed, they would get their money first in a foreclosure sale. They could turnaround and turn their lien into a judgment and foreclose on your property for their judgment. So, at that point, it should show up in title when the work is not been paid for because of notice of commencement should be of record.
Eric: Okay. And in the event that that wasn’t — for some reason —
Mary: Title insurance would cover.
Eric: That would protect me in that case.
Eric: However, after I purchase a home and close and I hire a roofer and I refuse to pay him —
Mary: That’s on —
Eric: I assume it’s on me and it doesn’t protect us, right?
Eric: So, it’s basically from the day and closing backwards in time to protect you.
Eric: Before you purchase basically till the day of.
Mary: Anything that happen on title prior to the date that you came into title.
Mary: The dates your deeds recorded.
Eric: Okay. And then what happens if you have to use your title policy? How do you —
Mary: Well, on your policy, you know, it’s eight to ten pages long, dependent upon what type of property we’re dealing with where it’s located, where there’s a homeowners association, or something like that. The contact information is in there to file the claim. You would reach out to — like I said, we write on store title or you would reach out to them, give them your policy number and what your problem is.
Eric: Okay. And they kind of take it from there and work out the situation. Okay. At this point, it sounds a bit kind of a dumb question. Do you need title insurance?
Mary: You should absolutely have title insurance. You don’t know — like I said, people are human. We do go back 30 years. I have an investment property that I bought that back in 1957, somebody tried to — they’re misdeeding the back 25 feet of the property.
Mary: And so, after the person that have received the property had died, somebody tried to deed that 25 feet to a dead person.
Mary: And then the person that received it passed away and we went through three probates and we had to do what’s called a quiet title suit so that I could get clear title to that back 25 feet of my property.
Mary: All because, you know, it enclose like eight times since that bad deed in 1957 where they tried to deed it to a dead person.
Mary: So, it missed 8 times.
Eric: So, it’s definitely something that every buyer should consider having. And I guess, the next thing is — well, it sounds great. But what if some of this has cost? It sounds like it’s going to cost tens and thousands of dollars for this kind of protection, right?
Mary: So, well, first off, typically, in our market, it’s a seller paid fee. So, the seller’s insuring that clear title to the buyer. But the state sets the rate. So, we have promulgated rates. And that’s the first 100,000 of the purchased price. It’s $5.75 per thousand. And then from $100,001 up to a million dollar is $5 a thousand. So, if you have a $200,000 purchase price, the classic title insurance policy is a $1,075.
December 2020 Part 1
Eric interviews Mary Summers of Lighthouse Title to help educate others on the importance of using a title company.
Eric: Oh, well, so it’s really affordable.
Mary: It’s affordable. Again, it’s good for the whole life of your ownership. So, it’s not like a homeowner’s policy or car insurance policy where you’re renewing it every six months or a whole year, whatever. It’s a one-time fee that’s paid for the entire time —
Eric: One time charge. If I live in the house for 3 years or 30 years, I’m protected for that entire length with that one charge. Is that correct?
Eric: Okay. Well, it’s certainly something worth doing that and having. Let’s see. And then I guess the other question that we have — and perhaps, you know, I know you’re really good at explaining this and much better than I am. We always get when people are looking to purchase or transfer the property, they’re always having questions about how do we vest? And I guess I’d like you — if you would, to kind of cover some of those things with us today.
Mary: Okay. So, vesting is how you hold the title. If you’re a single person, you’re just a single man, single woman, if you’re purchasing the property, husband and wife, you always want to vest as husband and wife, also known as tenants by the entireties. That means that upon the death of either spouse, the property will automatically go to the other spouse. But now, let’s say you get divorced — and I’ve had this happen where people got divorced. You then become what they call tenants in common. You each own 50%. You remarry. You don’t have that same protection the tenants by the entireties unless you do a new deed.
Mary: But when your tenants by the entirety, there are certain things that the property exempts from, there’s a judgment against you, there’s not a judgment against me. If we’re married, it doesn’t need to be paid.
Mary: If we’re tenants in common, you own 50% and I own 50%, that judgment will need to be paid out any proceeds, whether you do a refinance or you go to sell the property. So, there’s protections with tenants by the entireties. Tenants in common, like I said, you own 50%, I own 50% and our 50% in the event of our death goes through probate. So, our will is going to dictate where yours is going to, where my 50% goes to. It doesn’t automatically go to you when it’s —
Mary: If we’re joint tenants with rights of survivorship, then it will automatically convey to you upon my death.
Eric: Okay. And that’s something that we could do regardless whether your husband or wife or brother or sister or just —
Mary: Husband and wife has — tenants by the entirety is the best type of vesting that offers and affords most protection.
Mary: But when two unmarried people purchase a property together, you’re either tenants in common, you own 50%, I own 50% or we’re joint tenants with rights of survivorship. If I wanted to buy something with my son, I want my son to get the property without having to go through the process of probate.
Mary: I would vest as joint tenants with rights of survivorship.
Eric: Okay. And I guess another thing that I think people a lot of times don’t understand or don’t realize either. So even when they — a man or a woman say, purchase a home while they’re single, later on, marry, and then we go to sell the property. They’re always a little bit shock and surprised that we need both themselves as well as their spouse to sign the sold property. Can you maybe cover a little bit of that too? I always find that — people find that interesting and I don’t think a lot of people understand how that works.
Mary: Yeah. So, under Florida statute, if it’s an investment property, you as a married person can own it solely in your name and you don’t need your spouse to join in on the deed if you go to sell it. They don’t need to join in on the mortgage if you go to mortgage it.
Mary: However, when it’s your primary, when it’s you’re homestead property, in the State of Florida, the spouse automatically has a spousal interest in the property. They got a life and state interest.
Mary: You own a property, you know, by yourself and it’s your homestead, Rebecca has a life estate interest. She has the right to live in the property the rest of her life. The kids would actually inherit — minor children would inherit the property if they’re adults.
Eric: Oh, okay.
Mary: But because they have a spousal interest, when you go to closing, the spouse that’s not on title needs to join in on the deed because they’ve got to acknowledge that the property is being sold.
Mary: And that’s one of the things that we’re looking for when we search the title is, you know, you bought the property as a single man, now you’re selling it as a married man. We either need the joint or a spouse or we need to know that it’s not your homestead and we put specific verbiage on the deed stating that it was not your homestead.
Mary: But that’s one of the many things that we look at when we search in title for 30 years.
Eric: Right. Okay. And I think that’s an interesting fact. A lot of people don’t realize when they’re — when we say, “Okay. Well, it’s time to sign.” And they’re always kind of like, “Well, wait a second. Why does my wife have to come out as well? She wasn’t on it when I bought it? I own it years before us.” And, you know, they’re kind of unaware of that statute here in Florida. And just to clarify a little bit more though, on the flip side of that, for example, I sneak off one day and I buy myself a little condo on the beach and I don’t tell Rebecca about it. I can do that since it’s not my homestead property. She wouldn’t have to necessarily know about it. I could sell it and she wouldn’t know about it, right?
Mary: Don’t be planting that seed.
Eric: Okay. Well, that’s great. And I guess the one last thing I wanted to kind of cover briefly is you mentioned homestead. And a lot of people, again, asked about the homestead exemptions and things like that. Is that something you could cover really quickly with us today too?
Mary: Sure. So, homestead, there’s three parts to homestead. Most people are aware that it makes the first 50,000 a tax value not taxable for city county, mosquito control hospital, library, all that stuff. And the first 25,000 of tax value not taxable for school taxes.
Mary: So, that equates to dependent upon what the militrade is, which is the rate you pay per thousand of tax value on your property. It’s about an $800 a year savings. The second piece to homestead is that your assess value for tax purposes cannot increase by more than 3% a year. So you’ve got a homestead property this year. Your tax value was $100,000. Next year, it’s 110. Well, because it’s your homestead, you’re only paying taxes on 103. So now you take that 50, 25 exemption and you turn it into a 57, 32. And it’s just mushrooms.
Eric: It just compounds more and more —
Mary: The longer you’re in a property and in an improving market. For instance, my next door neighbor does not have homestead on her property. Her taxes are more than double what mine are because I’ve had my homestead over 12 years.
Mary: And then the third piece to homestead is that your homestead property is exempt from creditors’ claims. So, you run me over. I got a judgment for a million dollars against you.
Eric: I can’t run you over. You do all my closing.
Mary: So, I can’t touch your homestead. If you’ve got investment property, I can enforce my judgment against your investment property. But I cannot against your homestead. The only people that can take your homestead from you or your lender, if you’re not making your mortgage payments or a government entity. So, you know, you don’t pay your taxes for three years, the county can sell your house for taxes.
Eric: Okay. And that would be like that tax deed sale we hear sometimes.
Mary: Correct. Absolutely.
Eric: Okay. That’s when they’re trying to sell a property to recoup those taxes that you hadn’t paid.
Mary: Yeah. And in order to homestead, you’re supposed to be in the property six months in a day out of the year so somebody could have it as a second home, down here they live up in Pennsylvania. But, you know, they’re down here six months in a day. They’ve got the ability to homestead here.
Mary: Because a lot of states don’t have homestead.
Eric: Okay. So as long as it’s six months and a day, they could take advantage of those benefits.
Eric: Kind of keep that tax rate low, if you will, or at least —
Mary: They certainly keep themselves insulated.
Eric: Keep themselves insulated, yes. Okay. Well, I know there’s a lot more to it. But I think that covers a lot of what, you know, people are generally asking. If people have any more questions, obviously, shoot us a message and email, you know. Put something down on the bottom screen. We’ll get it answered for you. Or, of course, if you’d like to reach out to Lighthouse Title, the number there is —
Eric: I’m sure Mary or one of the girls there at the office. She’ll be happy to help with any questions or anything that you guys might have. That’s the end of it as well. And I want to thank you for coming today and meeting with us. And hopefully, this was useful to all of you out there, answered a lot of questions that you’ve had. And until next time.
November 2019 – Part 2
Part 2 of Eric Zimmerman interviewing Eric Mobley of MGN Construction about the benefits of using a General Contractor.
Eric: I guess, let’s see here. A couple of questions I wanted to ask. So, as far as — is there any specific horrible story that you might share or something in terms of something that jumps in the mind here what we’re talking about as far as maybe hiring around contractor or perhaps doing the work yourself or things that you’ve seen in your experience?
Male: Yeah. There’s a handful of things. One, do your due diligence. I mean, research contractor you want to use and make sure that they don’t have any outstanding claims or suits or anything like that against them. Two, you’re going to want to check their past workload history to see how far out there because you’re going to want someone in our house, wouldn’t you? So, if they’re three months out or if they’re a year out, you’re going to want to check that out to be certain. And then as far as horror story. I’d say just be leary there’s a lot of scammers that are out there unfortunately. It is what it is. That’s the world we live in. But let’s say you give them a $30,000 project and some comes to you with $15,000 deposit. I would be a little more leery on doing that because usually your deposit to start out with are around 10 to 15%. So I’ll just be careful of doing that and — because you don’t want your contractors to walk away and then you have to start over.
Eric: Right, right. We have been hearing horrible story, especially after the storm, after the hurricanes especially since that’s the state we’re in we’re. People end up with insurance checks and so forth, they want to get the work done, people are promising they’ll have it done quickly or timely and they give them huge deposits and they disappear. Or the worse, it’s not done or started and never completed. So, I think you did some great tips to kind of help, you know, protect yourself. I guess, the other thing too is that it’s fair to say that if any of our customers out here have any questions in regards to that can reach out to you, bounce some ideas off of you and maybe ask you for advice?
Male: Yeah. Absolutely. Absolutely. Another thing is when you’re doing a project, pay attention to your estimate. That’s one thing that I look up to is, you know, you can get a very faint aspect where you don’t know what you’re getting or you do very detailed one. So, I would ask as a consumer, I’d ask for a breakout of what you’re actually getting of what you’re actually spending your money on.
Eric: So, for example, if you get an estimate from someone and it says build a bathroom and it’s $20,000. And you’re saying, maybe break it down. What’s the fixtures going to cost? What is the demo going to cost? All the way down, very specific, I guess, more specific the better.
Male: Correct. Correct.
Eric: Okay. So I should know what they’re paying for and what the expectations are. And I guess, that too I’ve heard stories where, you know, people are getting a job for a bathroom. As it turns out, you know, they’ve been priced however. That price included basically the cheapest tile that your money can buy. It’s the cheapest fixtures the money can buy. And at the end of the day, it’s not what they wanted out there or what they signed up for. So, I guess, that’s a very valid point too guys. When you’re looking at the estimates, make sure you take time to look through them. Ask questions in more detail the estimate is, probably better.
Eric: Okay. So, for some of them who want to reach out to you, do you have a website? Do you have phone numbers? Talk to us.
Male: Yeah, yeah. Phone number 386-898-7101. We have a website, www.mgmcontracting.com, email, ngecontractingoutlook.com. Reach out. We’ll help you through anything. There’s tons of aspects to anything in construction. So, reach out those questions.
Eric: Thanks for tuning in, guys. Thanks for watching Volusia happenings from A to Team Z. If you have questions and comments, please do so below. If there’s questions we need to cover and if there’s anybody that you’d like us to interview, put a comment down below and we get them on the books. And also, we’re going to put Mr. Mobley’s contact information here as well so you can get a contact with him if you have any questions or if you need a good contractor. Thanks again for tuning in. We’ll see you guys next time.
November 2019 – Part 1
Eric Zimmerman interviews Eric Mobley of MGN Construction on the benefits of using a General Contractor.
Interviewer: Hi and thanks for tuning in again with us. This is Volusia Happenings, A to Team Z. We’re sitting here with Eric Mogely, with MGN Construction. We’re going to do a quick interview with him and ask some questions that many of you guys might have and maybe some of you might have not ever thought to ask a general contractor. So we’re going to kind of dig in with him this morning. Eric, tell us… so what does an actual general contractor do?
Eric: So a GC is you come up with an idea of your home, your business or a plan you own of what you want to do per se, as far as construction goes and then the general contractor gets with you and helps you design a plan, a layout per se of what walls are going to be moved. It helps you enact a budget and gets you inspired and goes from there and once you dial that down then they go file your permits and they build the project and they do the project completed all the way to your final inspections. So they’re kind of your manager of your project, per se.
Interviewer: Okay. So you’re with the customer from the start all the way through to the finish as far as guiding them through the entire process.
Eric: Mm-hmm, yup!
Interviewer: And handling everything. Okay! And I guess the next question I have and I guess a lot of other people have is “Why should I use a GC or why should I use a general contractor?”
Eric: Well, on a residential side you’re more than capable — Or not capable, I’d say “able” to do your own work, but the aspects that you get from a general contractor are 1) You get a warranty. The state of Florida mandates that general contractors get. You’re going to get a one-year warranty minimum. Some give you more than that on the structural side, which a lot of people don’t know. They have to give you a ten-year structural warranty on any structural components; and that’s mandated by the state of Florida. So that’s one good reason.
Another good reason is that god forbid, something goes wrong. You know… you flood the house or you burn the house down or you collapse the porch. Typically a home owner insurance policy will not cover a construction accident that you performed on your own house.
Interviewer: Oh! Okay.
Eric: So that’s where your general liability for a contractor comes into play; because the insurance company would do an investigation and typically I’ve seen it happen where it won’t be covered.
Interviewer: Yeah, I can see that. Actually that makes sense. You know, I guess so we’ve established that you guys help from the planning stage all the way through to the permitting. We’ve talked about why it’s important maybe to hire a contractor. What are some questions, when the customer decides “Yes, I’m going to hire a general contractor”…
What questions should they ask in the interview? What should they ask this person sitting across the table from them when they’re discussing the project?
Eric: First off, I would see how long they’ve been in business. That’s a pretty good tell-tale. You know, if they’ve just gotten their license two months ago you might want to not use them but ask for their past resume of what they’ve done before that. That would be one question to a new builder and then as far as after that goes; you want to ask them your basics. Your general liability insurance – make sure they’ve got it covered, all of that. You want to ask for workmen’s compensation policy. Make sure that if one of their workers get injured on your property that they carry a policy to cover that.
For instance, you as an owner; if someone is injured on your property you’re going to have to get insurance coverage for that. You can actually be held liable. So workmen’s comp is a big thing, and then references. There’s not actually going to be someone that gives you a bad reference. So if you ask for a reference — For instance, if I do some work for you and you’re going to act as a reference, I am not going to give you a customer that, you know, per se I might have had disagreements with. It is what it is. So you want to ask for their references, but you want to ask for references that allow you to come tour their home or other projects that they have done.
Interviewer: That’s a great idea!
Eric: That way if you want to redo your master bathroom and you want to see workmanship and you want to put your hands on it and feel it.
Interviewer: So actually go to a project that you completed or several and I would assume that the client’s happy. So somebody goes through and they show off their work and in turn you can kind of see what they’ve done and their craftsmanship.
Interviewer: I think it’s a great tip and it’s a great idea.
Eric: Craftsmanship’s big because pictures look good.
Eric: You can take pictures, but you actually can’t put your hands on it and feel it. So that’s a big thing especially on larger projects.
Interviewer: I get it. We’re in real estate, you know. You see a house online and you open the door and all of a sudden it’s “Ooh, this is not what we thought it was at all”. So that’s a great tip and a great idea.
Hello from Team Zimmerman
Eric and Rebecca are a husband & wife real estate team associated with Adams, Cameron & Co., Realtors. Eric has been with the company since 2005 as a top producer and has his Brokers designation. His successful track record as a full time, top-producing Realtor is a result of knowledge, experience and dedication. Rebecca brings real estate closing experience and a marketing background to the team. Together they offer knowledge, expertise and resources to facilitate a smooth real estate transactions, with customer service as a priority. When they are not busy with real estate, they volunteer in the community and spend time boating and fishing with their family.
Welcome to our new Team Zimmerman Video Series
Rebecca and I are going to be starting a new series based on the premise of everything local here in our area. We are going to be speaking with local business owners, local restaurant owners, and different heroes in the community, so if you would please help us name our series. We need to include Team Zimmerman in the name but local, local, local ideas! If you have any ideas of stuff that you’d like us to cover, or any people that you’d like us to interview, we’d love the ideas so just comment below and share them with us.