Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

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You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Oct. 10, 2019

Determining A Good Cash-On-Cash Return

When you are thinking about investing in real estate, you will want to understand what the cash-on-cash (CoC) return is, how to calculate it, and knowing what a good cash-on-cash return is for a rental property.

Determining A Good Cash-On-Cash Return

Over the shoulder photograph of a businesswoman reading a cash flow report to illustrate, "Determining A Good Cash-On-Cash Return".Every real estate investor is to find a good income property. That’s why it is important to determine the property’s potential profitability before actually making the purchase. Investors can do this by “running the numbers”.  One of the calculations an investor would look at is their return on investment (ROI). One of the primary calculations in determining potential profitability is the cash-on-cash (CoC) return.  To begin, we’ll discuss what exactly the CoC return is.

The cash-on-cash return

This is also known as the “equity dividend rate”.  It measures the property's net income with respect to the initial cash investment used to purchase the property.  Said another way, CoC return tells you how much you’re earning back annually on your down payment.

The CoC return formula is pretty straightforward.  We simply divide the net operating income (NOI) by the total cash invested.

NOI - Net Operating Income is the property's annual revenue minus all operating expenses (NOI = Annual Revenue - Operating Expenses).

Total Cash Investment - This is the amount the real estate investor paid to make their property operational, including down payment, closing costs, repairs/rehab, loan fees, and debt service if financed (Total Cash Investment = Down Payment + Closing Costs + Repairs + debt service).

CoC return examples:

Ex #1:

Cash purchase - Assume a $250,000 cash purchase with $12,000 in repairs and closing costs. Then,

Total Cash Investment = $250,000 + $12,000 = $262,000

Concerning the NOI (Net Operating Income), if the property rents for $2,800/mo the annual revenue would be $2,800 x 12 = $33,600. Further, assume $10,000 per year on operating expenses. Then,

NOI = $33,600 - $10,000 = $23,600

Putting it all together,  CoC Return = $23,600 / $262,000 = 0.09 (9%)

Ex #2

Not everyone is able to make a cash purchase.  So now let’s assume 20% down with conventional financing at 9% for the same property.  That’s a $250,000 purchase price, $50,000  ($250,000 x 20%) down payment, $12,000 in repairs, and $18,000 ($200,000 x 9%) in debt maintenance. Then,                                           

Total Cash Investment = $50,000 + $12,000 = $62,000

Using the same revenue and operating expenses as the first example and taking into account the debt service ($18,000) we get,

NOI = $33,600 - $10,000 - $18,000 = $5,600  

Then CoC Return = $5,600 / $62,000 = 0.09 (9%)

This means if the investor finances 80% of the purchase price 9% their CoC return would be 9%.

You can see there isn’t a difference in these examples.  But this is seldom the case.  Everything depends on the various amounts that apply to the property (down payment, loan amount, rehab costs, interest rate, and rental income).

Making the CoC return calculation can be time-consuming when you’re modeling different scenarios.  There’s also the ever-present possibility of making errors in your calculations.  For that reason, it may be worth your while to build a simple spreadsheet that will allow you to just plug and chug the numbers, error-free.

What’s a good CoC return?

There isn’t a specific number the makes for a good CoC return. But the general consensus from investors is in a range of 8 - 12 % indicates a good investment.  But there are some investors that will only consider a property with a CoC return of 20% or more.

The CoC return doesn’t take everything into consideration and is just one of a number of metrics that indicate a property would be a good investment. For example, CoC return doesn’t account for tax benefits, the property’s possible appreciation, or your own personal goals and circumstances.  It’s just an indicator of whether or not a property is a good candidate to research further.

Related article: Investor's Math For Investment Properties in 5 Steps

REALTOR and MLS llogoCall the EP-REALTORS office now and speak to one of our experienced Realtors® about investing in income property or any of your real estate needs, (407) 704-8030.

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Posted in Investing
Oct. 8, 2019

3 Benefits Of Buying A Condo

Condominiums represent a special kind of real estate.  In the end, there are a lot of benefits to condo ownership.  But here we’re going to talk about what we think are the top 3 benefits of buying a condo.

1 - Exterior maintenance is taken care of for you

Photograph of an apartment building or condo development in a tropical locale to illustrate, "3 Benefits Of Buying A Condo".If you are one who truly dislikes mowing the yard on a hot and muggy Florida summer day, then purchasing a condo could be a fantastic investment for you.

Typically, a condominium owner pays a homeowners association (HOA) fee that covers the expense of the exterior maintenance of the condo.  So the condo owners have the benefit of a well-groomed lawn and maintained landscaping as well as having the building exteriors and the condo amenities maintained for them.

Generally, severe roof damage is also covered by the HOA through the insurance they have on the property.  The benefits here being if your roof is damaged during a hurricane or other severe weather, the HOA fees you have paid will take care of the repair costs.

2 - Being part of a condo community

Condominium communities exist everywhere and have their own HOA rules and regulations.  Even though every condo community is different, they share many of the same rules to ensure the owners can enjoy the condo lifestyle every day.

For instance, some properties have specific quiet hours, minimizing any risk of noisy neighbors and all the grief that comes with that late at night. Other properties have policies in place that prevent owners from renting their unit out.  Keeping the condo full of owner-occupants insures that everyone cares about the neighborhood as much as you do.

A condo community might have occasional community events. Making it very easy to get to know your neighbors and build your circle of friends.

3 - A condominium unit can be less expensive than a house

Often a condo is a cost-effective alternative to buying a house.  They are often the most affordable homeownership option available to the first time homebuyer.

Condominiums are offered in many sizes and styles making it possible to find one that fits your budget, lifestyle, and tastes. As stated earlier, the exterior maintenance is taken care of by the HOA, even if the maintenance is needed on your first day of ownership!

Buying a condo is a big decision.  It’s important that you do plenty of research before investing in any kind of real estate.  When you hire a Realtor®, you can search for a condo in your area that meets your needs perfectly

An experienced Realtor® can help you understand all the details of condo purchasing and ownership so that you find the condo that will give you pleasure for many years to come.  Additionally, your Realtor® will keep you current with the market and let you know about condos as they become available for sale and help you through the buying process

Call EP Realtors® and speak to one of our Realtors® to learn more about condominium ownership and other housing opportunities in Orlando, (407) 704-8030.

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Posted in Home Buying
Oct. 4, 2019

Tailgating Game Plan - Free Download

For millions of people, football is an integral part of the cooler months, as high school, college, and pro football teams create their own unique level of excitement and stir up local pride during autumn and winter. Many enjoy the long-held tradition of tailgating before these games. However, hosting the ultimate football tailgate takes a lot of planning.

Photographic Portrait Of Family Group Tailgating In Stadium Car Park to illustrate,"Follow this guide to tackle your tailgate with ease from food and drink, to games, and everything in between!

Hopefully, this tailgating pack helps you host some amazing parties that you’ll be talking about long after the game is over. Remember: football season is supposed to be fun, not stressful. If there’s anything else you need help with, don’t hesitate to reach out. 

Free download

Down load your free Tailgating Game Plan and have a fantastic season!

Do you have questions about the current state of Orlando's real estate market? Call EP Realtors® and speak to a Realtor® about any of your real estate needs, (407) 704-8030.

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Posted in Community
Oct. 3, 2019

Real Estate Investing During A Seller’s Market - Part 2 of 2

By, Baron Marsh

Sellers Market Home House For Sale Sign 3d Illustration to illustrate, "Real Estate Investing During A Seller’s Market - Part 2 of 2".This is the second of two articles discussing real estate investing during a seller’s market.  The first part was posted last week. You can read part one here.

In this post, we are going to talk about 8 practical and tactical tips that will help you to strike good investment property deals during a seller's market.

1 - Get pre-approved with a letter of commitment

Even though you will feel like a transaction is about you, remember that the seller has skin in the game as well.

Being pre-approved for a mortgage demonstrates financial ability to the seller.  This gives the seller some peace of mind that the transaction will not only close with you as a buyer but also go smoothly.  Pre-approval is different than being pre-qualified.  Pre-approval requires documentation and is based on actual data, not estimates.

2 - Hire a Realtor® to be on your side

You don’t need a Realtor® or a broker to purchase a property, but having a good one on your side, representing your interests, can give you a serious advantage as a buyer in a competitive seller’s market.

Start your search for an Realtor® by speaking with your friends and family members, as well as other investors that you know. Or even by driving through neighborhoods you’re interested in investing in and calling agents from the sold signs you see for an interview (or, just call me 407-607-0126, ask for Baron). Properties sell quickly in a seller’s market.  You want to find a Realtor® who will keep you up to date on the current market at all times.

3 - Be quick and flexible

In a seller’s market, due to the rapid turnover of properties, today’s listing could be gone tomorrow.  This means you may not have the luxury of waiting to see a property. Be as flexible with your time as possible and be available for showings as soon as a property becomes available.

When you see a property that you like submit an offer on the spot. The sooner you start negotiations, the sooner you can block other investors and lock the property down.

Related article: Buying Investment Property Without Seeing It

4 - Make a fair offer

Everyone wants a good deal on an investment property, but you don’t want to lose the property due to a low ball offer.

Work out an offer strategy with your Realtor® after researching recent comparable sales to develop an idea of what should be offered. Ultimately, you need to be comfortable paying what you offer.

5 - Make your offer stand out

There are many ways to make your offer stand out from the others. Here are just a few:

  • If you’re able to, make a large earnest money deposit AND offer a larger deposit than is customary for your market.  This communicates to the seller your seriousness to buy.
  • Make the transaction easier for the seller.  For example, if there’s a lot of clutter in the yard that the sell might rather not deal with, offer to take care of it yourself.  Consider anything that can make the transaction easier for the seller to move the sale forward.
  • Likewise, be mindful of the seller’s schedule and be flexible with the closing date to demonstrate your willingness to work with the seller and to demonstrate your commitment to closing the sale.

6 - Compose a personal letter to the seller

Many people, including investors, become emotionally attached to their property, especially when they truly care about their tenant who may be their friends on some level as well. Demonstrate to the seller that you’re invested emotionally and that you are serious about this transaction by writing a personal note to them. Tell them what it is you like about their property and your plans for taking care of both the property and the tenants. The sellers might like knowing their property is going to be in good hands, building goodwill with you and gaining some leverage for your offer.

7 - Decide what you’re willing to compromise on

We all have an image of what a perfect investment property is.  But finding that in a seller’s market might not be too easy. So dig deep, and decide what is most important to you in an income property (size, style, location, amenities, etc.)

After you have identified your must have items, consider compromising on the less important criteria, not your must have items.

Related article: Know Your Must Have Features Before You Begin Home Shopping

8 - Be patient

In a seller’s market you will undoubtedly find some stiff competition.  Be patient and make staying focused on your goal your priority above all else. Don’t buy a place just to buy a piece of property.  It has to meet your financial goals. It’s far better to be patient and buy the right property for you than to be impatient and purchase the wrong one.

You have to think differently about buying in a seller’s market. You need to be well informed and know the market very well.  You must know what state the market is in and where it’s heading. So buckle down and get the best market data you can and be ready to move quickly when your criteria is met.

REALTOR and MLS llogoCall the EP-REALTORS office now and speak to one of our experienced Realtors® about your real estate needs, (407) 704-8030.

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Posted in Investing
Oct. 1, 2019

Why It’s Never Too Late To Buy A House

Last week we published the article “5 Reasons To Buy A Home While You’re Young”.  This week we’re going to talk about the other end of the spectrum and why it’s never too late to buy a house.

By being a homeowner with a fixed interest mortgage you could have a more stable monthly housing cost compared to have to put up with the annual rent increases as a renter.  But maybe you’re afraid that the time to buy a home has passed you by years ago.

Why It’s Never Too Late To Buy A House

Photograph of a Happy Affectionate Senior Couple Hugging in Front of Sold Real Estate Sign and House to illustrate, "Why It’s Never Too Late To Buy A House".If you think it’s too late for you to buy a home, you could be wrong.  The lending laws prevent lenders from discriminating based on age.  The mortgage lenders also recognize that income and being financially responsible and financially stable are important indicators about the borrower repaying the mortgage.  Age is not a financial indicator.

As time passes, the would-be borrower may have built up retirement savings and additional personal savings that aren’t set aside for retirement. Borrowers may have built equity in technology, vehicles, land, and art.  All of this equity can be leveraged when purchasing a home.

If you’re middle age or older, you may have already put your kids through college, paid off a mortgage of a larger home, and are at the point in your career where you’re at your personal peak earning potential. All of these accomplishments are points in your favor as far as mortgage lenders are concerned.

Your current bank may be an excellent resource for acquiring a mortgage.  Many banks offer mortgage specials or other perks with your existing accounts to their customers.

If your time permits, you could use your experience freelancing or consulting from home and pay your monthly mortgage with the additional income.  Compared to a young person who doesn’t have the experience.

Some ways that buying a house could work for you

By taking in renters you could pay your mortgage with the rental income. There are options for selling your property too. You could keep the property in the family by selling to your children or grandchildren years down the road.

Not only does selling to your children or grandchildren keep the property in the family, but it could also save your family members a lot of money. You should also consider your career and personal goals.  Maybe you’re taking steps to set yourself up as a freelancer, consultant, or startup a small business. Or maybe you simply want to start an entirely different career at this point in your life.

Regardless of your reasons for buying home midlife and beyond, don’t let fear stop you.  You should also know it’s possible to pay off your thirty-year mortgage in just fifteen years, depending on your circumstances and income. As in any borrowing situation, be sure you’re financially able to afford the mortgage.  You also have to be sure you’re able to take on the responsibility of caring for the property and maintaining it.

REALTOR and MLS llogoCall the EP-REALTORS office now and speak to one of our experienced Realtors® about your real estate needs, (407) 704-8030.

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Posted in Home Buying
Sept. 26, 2019

Real Estate Investing During A Seller’s Market - Part 1 of 2

By: Baron Marsh, Realtor

This is the first of two articles discussing real estate investing during a seller’s market.  Be sure to read the second installment after reading this post.

You can be more profitable in a hot market that’s appreciating regardless of the investment strategy that you’re using (buy and hold, flipping, buy to lease, etc.).  You know the expression, “All ships rise with the tide”?  Well, that’s the idea at work in a hot market.  The downside is you will be competing with more investors who are able to beat you to the best deals, especially in the latter stages of a hot market when everyone is on the bandwagon. So when decent investments are hard to find you have to work smarter.

For the most part, the whole country is experiencing a seller’s market, and if you haven’t framed your strategies accordingly your business of real estate investing is about to experience a rapid decline, as will your income.

You may remember hearing investors complain about the housing market in ‘07 as the real estate market started in downturn leading up to the ‘08 crash.  Well, we’re about to hear even more complaining as it gets even more difficult to find the investment gems we were able to find when the current market started heating up.  If you haven’t been hit by the tightening of the seller’s market, strap in, it’s coming for you.

Image of a clock face with the words "time to invest" on it to illustrate, "Real Estate Investing During A Seller’s Market".Now that you have decided to take on real estate investing.  Maybe you own a couple of income properties or maybe you have just begun your journey as a real estate investor and are shopping around to make your first real estate investment. Wherever you are on the investor path, regardless of your experience, you have to study the national, regional, and local real estate markets before you make your next offer.

Before entering a transaction as a buyer or seller, you need to know if it’s currently a buyer or seller's market. Why might you need to know that?

Most importantly, there are different strategies to be used it you’re buying in a buyer’s market versus buying in a seller’s market.  In order to get the most for your investment, you have to know which strategy will work best for you and your circumstances.

Don’t make the mistake so many other real estate investors make by not studying the national, regional, and local real estate markets.

So what are buyer and seller markets, and how do we define them?

Buyer’s market 

A buyer’s market is one that favors the people who want to buy a piece of real estate. Even without being an economist you can see this occurs when there are more properties on the market than there are people willing to buy them. In a buyer’s market, buyers have a lot of options to choose from with little competition for other buyers. This is the perfect market for a first-time homebuyer or a real estate investor who is just starting out because the best properties are available to them at the lowest prices.  These conditions allow a real estate investor to build their portfolio much more quickly.

  • Characteristics of a buyer’s market:
  • Six months or more of inventory available for sale
  • Properties spending a lot of time on the market
  • A greater number of properties on the market than in the past periods
  • Current asking prices are below previous sales prices
  • A lower percentage of closings overall
  • Declining average home prices
  • A flood of real estate advertising trying to entice buyers to buy

You can search the online portals to find current housing prices and inventories. As a buyer you can search for projected returns of potential investment properties very easily by looking at the sales price history of any property.

Or, make it even easier and build a relationship with a Realtor who you can put to work finding potential investment properties for you!

Characteristics of a seller’s market

Simply put, a seller’s market is the opposite of a buyer’s market. In this market, the conditions favor the seller. A seller’s market comes about when there are fewer properties available for sale than there are people who want to buy a place. Due to the buying pressure (the competition among buyers), buyers are willing to pay the full asking price or more to get the property they want.  This is great for sellers since they can expect to have a quick sale at a greater than expected price.

  • Characteristics of a buyer’s market:
  • There are fewer properties available for sale than in past periods
  • No more than three months of inventory available for sale
  • Properties are on the market for less time
  • Current asking prices above previous sales prices
  • A higher percentage of closings overall
  • Increasing average home prices
  • Fewer and less impressive real estate advertisements

The buyer and seller’s markets are the extremes of the real estate market spectrum.  So what’s in between?  A neutral market.

Characteristics of a neutral market:

  • The number of properties available for sale is the same average number as the past period
  • Three to six months of available housing inventory
  • Current asking prices are similar to previous sale prices
  • Average housing prices are stable
  • Properties are on the market for a “normal” amount of time
  • Advertisements for real estate are comparatively mediocre
  • The number of buyers and sellers is more or less equal and stable

Great, now what?  What type of market is the country currently in? Generally speaking, it's difficult to make a claim about the national market due to all the local markets that can be experiencing any of the three market conditions that make the national average.  But there are trends that are happening in the national market.  And if you can figure out the relationship between the national market and your local market, all the better.  So if you can, work out if your local market leads or follows the national trend, and by what time-frame (months, quarters, years).

Currently the national market is favoring sellers for these reasons

  • Real estate inventory is low.  The market has moved from a position of high supply to something that’s looking like a housing shortage. The overall housing inventory has declined more than 35% in the past four years. This is good news for current homeowners and investors because their properties are now in high demand.
  • Real estate prices have been increasing. Since the bottom of 2008, real estate prices have been steadily increasing.  Economist are predicting property prices will hit an all-time high equivalent to the peak of the housing bubble.  Also, job growth has been strong with record employment levels and increasing wages.  Taken together this means employed people can afford to have a mortgage on their new home.
  • Mortgage rates are increasing.  Increasing mortgage rates and improving employment opportunities will become a greater factor over time.
  • A greater number of millennials are beginning to purchase houses. This is the largest generation so far in U.S. history and as they enter the housing market demand for real estate will increase.  Additionally, it is still more financially prudent to own your own home rather than to rent, this increases demand as well.

If all of the data is making you think about selling you own income property, remember these are national averages.  Your local market may be different, be sure to do a thorough market analysis before listing it.

Again, keep in mind that the national market is not uniform.  Different areas will likely be experiencing different market conditions.  Even within a state one city can be in a seller’s market while another is in a buyer’s market.  That holds for individual cities too.  One part of town can be in high demand and another not so much.  Your local market analysis is crucial!  This is something your Realtor can do quite easily for you since they have access to all the local market data.

  • What does a real estate investor have to do to be in a strong position during a seller’s market?
  • Improve your negotiating skills
  • Increase your negotiating power by building your brand
  • Streamline your bidding process
  • Develop a real estate team with top lenders, a Realtor, and others so you’re in a position to move quickly when a deal presents itself

This was the first part of a two-part series.  Read part 2 where we will cover 8 practical and tactical tips that will help you to strike good investment property deals.

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We here at EP Realtors can help you with a variety of investment property types including our “managed investment properties”.  Call us, and let's get started! (407) 704-8030.

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Posted in Investing
Sept. 24, 2019

5 Reasons To Buy A Home While You’re Young

Photograph of a happy smiling young couple showing a keys of their new house to illustrate, "5 Reasons To Buy A Home While You’re Young".

Maybe your someone just starting on your life’s journey in your early 20s, maybe you’re a recent college grad, or your just getting started on your career. Making a large purchase like a piece of real estate may not be the thing on the top of your mind.  After all, you’re still young and want to have some fun before taking on more responsibilities like a mortgage.

But the truth is you aren’t too young to be a homeowner and make what could become the single most important investment for your future. Here are 5 reasons to buy a home while you’re young and why you should begin the search for your new home today!

5 Reasons To Buy A Home While You’re Young

1 - You can be a homeowner and not be tied down

Being young you probably want to do a little traveling and see the World, or some of it anyway.  Or maybe you travel a lot for your job and don’t spend a lot of time at home, so you think buying a place would be a waste of money. Or you think you will want to relocate to another area sooner than later and you’ll need money to do that, so you don’t want to tie it up in a house.

Being free and having those options available to you is great! But consider this, you can be a homeowner and rent the property out.  Then you mortgage gets paid by your tenants and there could be some profits in your pocket to do the things you want to do.

If you don’t like the idea of being a hands-on landlord you can hire a property management company to take care of the tenants and the day-to-day landlord tasks.  You can see there are ways to go for people who don’t want to be tied down.

Related article: 5 Things To Consider When Selecting A Property Management Company

2 - Homeownership is more economical than renting

Perhaps rent in your area is inexpensive or you’re living rent-free with your parents, and you don’t think there’s any point to buying a property yet.  Don’t allow yourself to be fooled, rents fluctuate a lot due to many things including, property values, the gentrification of urban areas, the general economy (local, national, and global), and many other reasons.  Besides, your parents might like the extra space and privacy and some point.

When you’re renting, you’re paying off your landlord’s mortgage and putting money in their pocket.  Wouldn’t you rather be the one who’s made the investment and is getting paid by someone else?

3 - Maintenance, mortgages are not cheaper if you rent

Think about it. Your landlord isn’t going to let you live there “at cost”.  Landlords have built maintenance costs, management fees, mortgage payments, taxes and profit into the rent they charge. So as a renter you’re paying more than a homeowner in the same kind of property.

It’s a lot to consider beyond the mortgage, but you can figure out how to structure your budget to be a homeowner. If you rent a bedroom to a friend or relative you can easily cover the cost of ownership without struggling.

Related article: A Single Persons Home Buying Guide

4 - Homeownership is a fantastic investment for your future

Many young people think they can make it in the stock market and do well without buying a piece of real estate.

Being young you probably enjoy risk-taking.  Perhaps you good friend gave you a hot tip on a great stock he has invested in or a flourishing small business opportunity, and he’s making money hand over fist.

Fantastic!!  For now.  However, markets are cyclical and businesses close their doors all the time.  But when you own your own home you have someplace to live, if nothing else.  Do you think you can live on the stock market floor if times become tough and you lose your investment?

5 - Homeownership is for people who can think long-term

Imagine you live in a good home in a nice neighborhood and you can do this because you have 2 roommates paying rent and sharing the costs with you.  You’re not interested in purchasing something in a new neighborhood because you’re used to a particular lifestyle.

That’s ok.  New housing projects grow, new neighborhoods become established over time, more people move in and the area becomes desirable, and property values appreciate.  What looks like a bad choice now will certainly be a good long-term choice.

Related article: The Leading 6 Factors Of Real Estate Appreciation

If you’re thinking about being a first-time homeowner as a young adult, start by talking to a local Realtor.  Your Realtor will supply you with all the information you need to make a well-informed decision as well as help you find properties that meet your exact needs.

REALTOR and MLS logoYour Realtor® will be there to help you navigate the entire home buying process.  Call EP-Realtors® and speak to one of our residential specialist about finding your next home, (407) 704-8030.

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Posted in Home Buying
Sept. 19, 2019

5 Pros & 3 Cons Of Investing in Foreclosure & Pre-Foreclosure Properties

As exciting and fast-paced as the realm of foreclosure real estate investing is, you should know about these 5 pros & 3 cons of investing in foreclosure & pre-foreclosure properties before you begin your journey as a foreclosure investor.Red Foreclosure Home For Sale Real Estate Sign Over Beautiful Clouds and Sunset Sky to illustrate, "5 Pros & 3 Cons Of Investing in Foreclosure & Pre-Foreclosure Properties".

5 Pros & 3 Cons Of Investing in Foreclosure & Pre-Foreclosure Properties


1 - Lower prices and greater ROI

Both foreclosure and pre-foreclosure properties most often sell for less than current market value. They can be discounted as much as 50% of the current market value of similar properties. Among other possibilities, this means it’s possible to flip these properties with little to no improvements for a reasonable profit.

Today it’s still possible to negotiate lower prices with lenders for a short sale, essentially creating instant equity!

2 - Rehab profits

A lot of the properties that are in foreclosure or pre-foreclosure will need some repairs and have a large potential for updating.  If you have the ability to do a lot of the rehab work yourself you can substantially increase the property’s value without spending a lot of money to do so.

3 - Lower costs of settlement

Since time is of the essence for the owner of the foreclosed or pre-foreclosed property you are often in a very good negotiating position.  You can often negotiate for lower down payments, better options for financing, reduced closing costs, even a new kitchen sink if you’re dogged enough!

4 - Property access

Usually, foreclosed homes are vacant.  This means you might have easy access to the property for both viewing and inspections as well as taking possession sooner than later.  If the property is occupied, they know they have to vacate quickly, allowing you to get to work sooner.

5. Better financing

When you’re buying a foreclosure from a bank they may offer an attractive loan package to make the deal that much more appealing.


Related article: All About Real Estate Bank Foreclosures


1 - Hidden liabilities

Many foreclosed and pre-foreclosure properties will have back taxes due and maybe other liens as well. You will have to pay these when taking ownership.  Occasionally these liens won’t be disclosed upfront and won’t be discovered until the title work is done.

2 - Poor property condition

Even though many pre-foreclosure and foreclosure properties are perfect candidates for rehabbing, you will also find many that are in very poor condition.  You might be in for a shock if you don’t do your due diligence and budget for the required repairs and rehabilitation.  If you inspect the property or even if you’re buying a property unseen through an auction, budget for the worst and you may find it’s still financially feasible for you.

3 - Steep learning curve

It’s necessary to understand the foreclosure process for your market. You will also have to know how to find your potential investments, ideally finding them when they first enter pre-foreclosure. This can be an annoyance for some real estate investors, preferring a more direct process for purchasing investment properties. But once you’re familiar with the purchasing process of foreclosures you just might find that it’s not all that bothersome.  

Developing an investment team that includes a Realtor can make the foreclosure/pre-foreclosure investing process much easier and more enjoyable - like a team sport.

Related article: Building Your Real Estate Investment Team

All-in-all, investing in pre-foreclosures and foreclosures is a great way to invest in real estate.  That is if you’re willing to take the time to learn what buying this type of investment involves and are prepared to manage the cons.

REALTOR and MLS logo to illustrate investing in land.

Whether you are interested in long-term investing or flipping a property for a quick profit, the experienced and professional Realtors® here at EP-Realtors® can help you.  Call today for a no-obligation consultation (407) 704-8030.

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Posted in Investing
Sept. 17, 2019

How To Handle Encroaching Trees From Your Neighbor’s Yard

Besides being an attractive part of your neighborhood and your own property, trees can create tension among neighbors. Trees can grow in a way that their roots or branches encroach into the neighboring yard, either actually causing damage or potentially causing damage in the future.  As a property owner, it would be good to know how to handle encroaching trees from your neighbor’s yard before you find yourself on either side of the fence with an encroaching tree.

Encroaching branches

Photograph of overgrown bushes or trees damage the concrete fence of the garden to illustrate, "How To Handle Encroaching Trees From Your Neighbor’s Yard".When the offending tree’s trunk is in your neighbor’s yard they are the legal owner of the tree.  So you cannot cut their tree down, but you are within your rights to trim any branches coming into your yard to prevent property damage.

However, before you begin trimming, be a good neighbor and talk to them about the problem and give them time to address it.  If they don’t take care of it in a reasonable time you can trim the branches back to the property line yourself, but not beyond the property line.  You also cannot trim so much of the tree that its structure is compromised or alter its cosmetic appearance. You also are not allowed to enter your neighbor's property for trimming without permission unless there is a risk of imminent property damage.

Issues with debris falling into your yard

Your neighbor is not responsible when the leaves, nuts, or branches from your their encroaching tree falls on your lawn or clogs your gutters because these are acts of nature.  But remember, you can trim the encroaching branches back to the property line.

Curiously, when there is fruit on the branches of the encroaching tree it is the neighbor’s fruit.  However, state and local laws determine who owns the fruit after it falls to the ground.

Property damage caused by an encroaching tree

If an encroaching tree branch causes damage to your property by falling in a storm and your neighbor took reasonable care of the tree, it will be considered an “Act of God” and they will not be held responsible for the damages. But if it was a diseased or dead tree and your neighbor had been warned and didn’t do anything about it, you might be able to hold them accountable for damages.

Occasionally a tree will have roots that have grown so far into a neighboring property that they cause damage to the adjacent property. The fence dividing the property is the common victim, but the roots could interfere with the plumbing or the driveway or foundation in extreme cases.  In cases like this, your neighbor may be required to remove the tree.  The situation isn’t as clear when the offending tree sits on the property line - check your local and state laws.

Attempt to work together

Try to take care of the problem through a friendly conversation when you find yourself having to deal with a neighbor’s encroaching tree.  If talking fails, you might have to contact your local government or envolve the courts in order to take care of the issue.

EP Realtors® is a real estate brokerage.  The information provided here is for educational purposes only.  We recommend you consult with the appropriate professionals for guidance concerning your particular circumstances.

Do you have questions about the current state of Orlando's real estate market? Call EP Realtors® and speak to one of our Realtors® about any of your real estate needs, (407) 704-8030.

REALTOR and MLS logo.

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Posted in Community, Homeowners
Sept. 12, 2019

How Real Estate Investors Progress Naturally

Photograph of a bag with money and three wooden houses to illustrate, "How Real Estate Investors Progress Naturally".The author of “Seven Habits of Highly Effective People”, Stephen Covey, writes about a model he has coined as the Maturity Continuum.  In this model, people are born as dependents having their most basic needs fulfilled by others. Then as we grow and mature into independence and self-sufficient.  But Covey shows us that independence is not the pinnacle of personal growth and adulthood, we have to build mutually beneficial relationships to attain greater achievements than we can otherwise accomplishment. on our own.

In this article, we are going to look at how real estate investors progress naturally from being dependent to being independent and can retire by investing in real estate.

Being dependant

Bedding dependant is having a job working for someone other than yourself.  You may be able to manage a pay raise, but you’re not the one in charge. You’re dependent on someone else for your livelihood and whether or not you’ll be able to earn more next year. Yes, you can make a difference as an employee, but what happens when you make it look easy? Typically your employer will either give you more responsibility without an equivalent bump in your salary or take away some of your support staff and other resources.

Obviously, there are positions they pay very well. But you will never be independent as an employee where your employer controls how much you earn, the hours you work, and when you “may” take a vacation.  You will always be earning money by trading your time, leaving little time for enjoying life.

But by investing in real estate, you start becoming independent.

Being independent

A lot of people look at investing in real estate as a way to diversify their portfolio. But it’s entirely possible to become independent from buying, rehabilitating, and renting out single-family homes and other types of investment properties.  Having multiple sources of recurring rental income grants freedom choice.  Many investors choose to retire as soon as they can. Others prefer to work at what they enjoy doing to finance further investments.  There is a huge difference between doing what you enjoy to earn an income compared to HAVING to go to work.  After you have gained independence from an employer and you no longer NEED to fund a retirement account you are legitimately free to spend your time as you wish.

Being interdependent

Having a real estate portfolio will take you just so far towards financial freedom because you’re still trading time for money.  Banks and other lenders limit how many mortgages you can have, limiting the number of properties you can purchase.  Because of this, and other reasons like economies of scale making it easier to own 20-unit apartment, many investors focus on multi-unit properties instead of single-family homes.

You become interdependent by investing in apartment communities.  When you own and manage an apartment community you’re a business owner who hires employees to do the work.  Every apartment community you own will pay you regardless of the number of days you work.  This presents the potential for creating great wealth. You can purchase all of the apartment communities you want with a group of qualified investors because lenders will lend based on the value of the business, not your personal financial ability.  This is the reason about 90% of the country’s millionaires have been made from real estate.

The choices are yours to make.  You can choose to work hard for the majority of your life, retire, and hope you don’t run out of money before you run out of time.  Or you can begin a new life journey to becoming financially interdependent.

REALTOR and MLS llogoCall the EP-REALTORS office now and speak to one of our experienced Realtors® about investing in income property or any of your real estate needs, (407) 704-8030.

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Posted in Investing