Category Archives: Adventures in Real Estate

A Window with a View – Your neighbors may be increasing the value of your home?

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What do you see when looking out your front window?  I sit here and write from a comfy chair, looking out my front, picture window, onto a tree-lined street, with flowers beginning to blossom.  My neighbor across the street has a red front door and a matching red bird house in the tree that we can see from our window too.  I am very fortunate and try not to take for granted our entertaining view.  Kids play on their scooters and shoot each other with Nerf guns.  People walk their dogs and converse while strolling [our dog barks or whines, trying to get their attention].  Three or four retired men on the street meet up for a weekly bike ride.  Birds flit and perch… a squirrel jumps from a tree branch onto a roof.  I had no idea the beauty and entertainment I would receive from this window and view.  I am thankful for my neighbors and the hood in which I live.

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Many buyers spend hours sitting in front of a home they contemplate purchasing… Curb appeal is everything, right?  Yes, everyone wants a sharp-looking home.  And yes, a lack of curb appeal detracts from value.  I do NOT see many people standing at the front window and look out, asking, “Do we love this view?”  Most of us are focused on our house and the interior.  What about the view out front and back?  These, I believe, are overlooked assets.  I understand that not every price point has this option, yet there are many nooks, even in the worst neighborhoods where where neighbors comes together and have pride of ownership.  There are also so many ways to simply beautify your own yard, yet it’s difficult to control what you neighbors do.  If you are looking to buy a home, consider this concept when considering a neighborhood and the houses around the subject property.  I have a lot of ideas from years of experience and insight into what others may ignore when it comes to buying a home.  I hope to share with you this attention to detail on your next deal.

Best

Keith Klassen, Real Estate Broker – 916.595.7900

Specializing in Residential Sales & Property Management

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Effective Tenants Screening

Keith has a knack for effective screening of potential tenants. He has given recommendations for reasonably priced contractors when we need them. He is good at keeping our tenant and us calm and working together when issues arise. Thank you Keith!  

–Amy & Robert (Property Management Clients)

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Effective Tenant Screening

When engaged in a job role that required repetitive actions, it’s easy to think that some things are obvious, and forget that others have no understanding or bearing, in this case, when it comes to screening tenants.  I’ve had clients initially tell me that this is what they are most afraid of.  When I ask why… here are a list of reasons given to me:

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  1. Don’t we have to accept anyone who applies, due to non-discrimination laws?
  2. How do we know if they qualify? What if they can’t pay their rent?
  3. What if they are partiers? And the neighbors complain and then everyone will be mad at us!
  4. What if no one applies?
  5. How does the process work?

Many times people inherit a property, or make their old residence a rental and then fall into property management or become landlords (this is what happened to me).  When this is the case, it becomes extra scary for the new landlord.  This makes more sense, versus a savvy landlord who already owns or intends to buy a property with renting it out solely in mind.  Either way, to a property manager and someone seasoned in rental properties, these are easy questions to address.  Hopefully I can take some of the fear out of the process for people reading this.

#1 – You DO NOT have to accept any applicant that applies.  However, you CANNOT base your reasoning on any discriminatory factors, such as, race, religious, familial status, sexuality, age, etc.  A good property manager follows set practices and procedures that eliminate much of this concern and fear.  One practice that is helpful is to have a minimum requirements to rent sheet available to all applicants.  This then helps potential applicant figure out whether they meet the criteria or not, and takes it out of the category of subjective choosing.

#2 – All property management should use a filter, as stated above… a systematic approach to qualify an applicant.  Primary requirements: Income; credit score; rental history (evictions and what past landlords report).  There are other factors I’d be happy to share with you as a client, and which I develop for each client individually based on their preferences and the situation.

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But what if they cannot pay rent?  The employment/income check gives way to the prospect’s capacity to pay rent, however, without the ability to forecast the future and fully predict human behavior, there is always this risk of not getting rent from tenants.  However, the best predictor of the future is past behavior, yet there are still unseen variables and life events that are never foreseen.

#3 – This answer is similar to the last, regarding predicting the future.  I like to try to have a conversation with the last landlord or property manager, oppose to just emailing a questionnaire.  By taking a relational approach to all of property management (tenants, landlords, vendors, etc.), you can build a bridge with a fellow property manager and, you’d be surprised how much information I can glean from a conversation by just appealing to one’s humanity.  Yet, sometimes it’s very difficult to know if a potential tenant like to play music late night, or work odd hours, or rev their motorcycle at midnight.  I say this because I had a great tenant once, whose adult son moved back in with him mid-lease.  The original, single guy was quiet, helpful, and always paid on time.  Once his son moved in, the entire neighborhood was up in arms about the smoking, rude behavior, revving of motorcycles late night, etc.  You never know what will transpire.  This is the risk an owner/landlord takes when owning income property.  This is another reason why many owners opt to have a property manager, even if they live two doors down.   Good tenant screening and selection will always make the management aspect easier.  If things go sideways, a good property manager can objectively take the next procedural steps, communicating with the owner along the way, a many times sooth a tumultuous situation better than an owner.

#4 – If no one applies, then most of the time (if the property has been marketed correctly) the rent is too high.  Most of the time it’s better to ratchet the rent down a little rather than hold out for a unicorn tenant.  The loss of the lower rent is usually less than the monthly vacancy expenses.   If these does not make sense to you , I can elaborate on this more if you want to message me directly.

#5 – How does the process of finding and renting a property out work?  I’m happy to sit down with you or have a conference call to lead you through each step.  Feel free to email or text.

Keep your tenants happy!

Keith Klassen, Real Estate Broker – 916.595.7900

Specializing in Residential Sales & Property Management

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Foodie Friday – Augmented Reality Meets Wine

This weeks was all quiet on the food front.  Not many exciting places on which to report.  We did go to a friend’s house for her birthday and had an interesting wine experience, with an interactive app that goes with it… Have you heard of 19 Crimes?  I saw an ad for it and thought, “What a gimmick!”  But two people brought this wine to the party and it was pretty cool to see everyone ooh and ah over the marketing novelty.  If you have not seen it, there’s an app that can be downloaded and used to view the label of the wine through your phone, creating an augmented reality of sorts.  The criminal on the label begins to tell his story, etc.  This article explains it as, what Pokemon did for kids, this brands does for adults.  Check it out, and the wine was not bad at all. Go Aussies!

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Oh and we brought prosciutto wrapped asparagus to the party – healthy hit!

BBQ IN SACRAMENTO

Our tradition continues for this season, of dropping our oldest at Jiu Jitsu and then going somewhere for a snack/drink.  We decided to go to Fahrenheit 250, a BBQ joint a few blocks away – right outside of one of entrances to Sac. State’s campus.  It’s changed hands many times in the past – I think it was a comedy club, or dance club at one time, then a dive bar, then another failed restaurant… kinda has that reputation of, “Hmmm, I wonder when that place will go out of business?”  I’ve driven past it many times and honestly didn’t even know it was a BBQ haunt (even though it says, “BBQ” right on the sign!).  I can’t comment too much on this place since we only had an appetizer and some drinks.  Another couple we were with got nachos with pulled pork on top, which I tasted and I was smoky good.  We had potato skins… rather 4 potato halves.  Needless to say we took a potato home and the boys devoured it!  We need to go back and eat their BBQ, then I’ll comment more.  They do have $1 rib happy hour… sounds right up my alley.  Has anyone gone there?  If so, did you like it? And what did you order.

AT HOME

Beer Can Burger

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Confessions

#1 – I made this last summer

#2… I use to binged watch the cooking channel for about a year straight… almost every show… even the lame ones!  Every now and again, a good idea came up where I say, “I am going to make that tonight! [or very soon]”  Like the eating/traveling show where the guy goes to a wrestling match in Mexico City, where they serve tortas… back home/on the show he recreated the sandwich – refried beans, sour cream, hot dogs, and so much more – check out these articles (HERE & HERE)to read a cool stores about this street food  phenomenon.    Someday I will chronicle that adventure – it ended with a torta feast with about 10 friends given a 2 hours’ notice.

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This one day during the summer we were having friends over and I exclaimed, while watching a cooking show, “THAT’S WHAT WE ARE GOING TO MAKE TONIGHT!  BEER CAN BURGERS!

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Vegans… I’m sorry… you may want to stop reading now… this may offend you greatly! [actually too late, after the BBQ mention and tortas – my bad].  This burger starts with using a beer can to make a cup outta the patty, which you proceed to fill with anything you want.  We put mushrooms, bacon, onions, bell peppers, BBQ sauce, cheese, and an egg!   Oh man, this was on point!  Look it up!  Here’s one of many websites with recipes and instructions – get to it!

Cheers,

Keith Klassen, Real Estate Broker – 916.595.7900

Specializing in residential sales and property management

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LESSONS LEARNED IN REAL ESTATE & PROPERTY MANAGEMENT – How to manage & sell a dump.

5 Star Review

Keith Klassen is smart and professional.  No matter what the circumstances, he manages his attitude and stays solution oriented.  Because of this, we came up with great solutions together. 

Mari Paul (Buyer, Seller, Property Management Client)

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HOW TO HANDLE SOME OF THE ROAD BUMPS THAT GO ALONG WITH MANAGING AND SELLING A RUN-DOWN PROPERTY (Part 1)

Many income/investment properties are purchased with the idea in mind that they will be fixed up and improved over time.  This is a great idea… let the property pay for itself.  However, this doesn’t always happen, especially when the property is just breaking even or not cash flowing as expected.  Perhaps this also points to a reality check when figuring out expenses, deferred maintenance, and a realistic slush funds for unexpected costs at the time of purchase – by the way, this is something I enjoy helping newer investors figure out. When that big ticket item comes up, like when a new roof is needed, or rotting widows need replacement, it could be time to encourage an owner to sell, or for you to walk away from the property management position.  I have found that owners who are not able to maintain their properties to a minimum standard can put the property manager’s neck on the line (i.e., lawsuit waiting to happen), or just create an unmanageable situation.

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Here’s a story of how the house of cards can fall over.  The tenant calls to say that several of the old windows won’t stay up any longer – of course the owner was going to install new windows as a first priority.  The tenant says that it’d be nice to fix them, but they understand and it’s not a big deal because they can just put a stick or a book in the window to hold it up.  The owner says, “Oh good, because I don’t have the money to fix it anyway.”  Several months later the tenant calls to say that the window slammed shut and the glass cracked.  The owners says, “Can they survive with a cracked glass for a while?  … Until we get new windows, or just until I get some money together to fix it?  Maybe they can put some tape on the glass?”  The tenant is not super happy, but puts some tape on the window.  Six months later the tenant says, “I’m starting to notice some mildew, or maybe mold in the bathroom where the window was cracked.”  As it turns out, the roof was on its last leg, the windows were rotting, and many other items had been on a list to renovate over time…

The owner ended up having to give the tenants notice to move and give them free rent due to the mold (and pray there were no health issues as a result).  When the owner finally decided to sell after doing some hodge-podge fix-its, they still took a big loss on the sales price due to all the put-off maintenance issue that later became health issues.

While I had to threaten to cancel our management agreement due to the owner’s inability to take action to make the needed repairs, I ended up being able to navigate us through the fog of it all without things escalating and ending in litigation.  Eventually I listed, sold the property, and eventually wash my hands of the situation.  Remember, distressed properties a lot of times equal distressed owners.  If I had to do it again, I would have taken action faster, and not hung around as long, cancelling the management agreement or encouraging the tenant move-out and sell sooner.  What happens when everything starts sliding down hill, the property manager gets taken down by all parties (who used to love you and high five you for being so great).  This also obviously will kill the listing/sale opportunity. Fortunately on this one, I still walked away with a high five.

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Have you had any mold or deferred maintenance scares, whether as an landlord, seller, or agent/PM?

Cheers to learning new lessons,

Keith Klassen, Real Estate Broker – 916.595.7900

Specializing in residential sales and property management

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Raising Rents – Property Management – Quick Tip

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In a past blog post we explored the benefits and disadvantages of keeping a tenant while trying to sell.  As noted in that post, most know that a 60 day notice must be served when  tenant has lived at the property for over a year (12 months), when not on a lease.  If on lease, then the lease trumps all, except cash of course.  This is another discussion, but a tenant can always agree to move if paid to do so – many know the phrase from the bank owned property days, “cash for keys.”  This question was asked recently, “When a tenant is not on a lease, they’ve lived there for over a year, and I want to raise the rent… do I have to give them a 60 day notice?  Or will a 30 day notice do?”

Answer:  If the increase is less then 10% of the rent, then  30 day notice will suffice.  If the increase is more than 10%, then a 60 days notice is needed.

Rents are going up in Sacramento and there is always a decision to be made between keeping up with rents vs. keeping a tenant.  If you do not raise rents a little bit over time, the shock of a one time, big raise will certainly drive a tenant out.  Other would argue that a good tenant is hard to find and is worth keeping, even if it means leaving their rents low.  I find including a note with the rent increase stating how much you love them as tenant… how you want to keep up the maintenance, and how expenses have risen… this seems to take some of the sting away.  I do believe in keeping good tenants, and surely the cost of re-renting, the cost of making the place ready to rent, and potential vacancy may not be worth the extra $30-50/mo.?

What’s your strategy and experience in raising rents?

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Keith Klassen, Real Estate Broker

Klassen & Associates / 916.595.7900

 

Wind-Water Knowledge in Real Estate

I’ve had several clients in the past that caused me to think more seriously about feng shui and pushed me to get a bit more educated on the topic.  This was especially the case when we would find, what I thought was the perfect home, yet the responses were, “Yeah, but it’s located on a ‘T’,” or “I really wish you could see the fireplace when you walk in,” or simply, “There’s not enough natural light.”  I understood people like natural like, but some of the other comments left me scratching my head.  I began to ask more questions and do some simple research.  Each one of these items and more stop the flow of the home for me have gotten in the way of a home sale.  Some things can be corrected with simply measures, while other items are almost impossible to over-come.   Here are some basic examples I’ve come across and a few links at the bottom of the page to guide you deeper.

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The term feng shui literally translates as “wind-water” in English.  While a fad to some or superstition to others, feng shui has been popularized among people with money and hipsters alike, others take it more seriously, as a deeply rooted practice and way of being.

Colors are important, which can also be easily changed.  The placement of color in specific areas of your home can enhance your mood and demeanor.  Others would say that colors attract or magnify the energies of your life.  For example, certain colors in the bedroom can spice up one’s love life (or maybe just picking up dirty clothes would help!  My wife gets turned on when I clean the bathroom – ha ha).  Green is known to be the color of health and family – it makes sense to add plants to the living/family room of your home.

Flow and Organization – If a home is built a certain way not conducive to good flow, this may be hard to overcome, while arranging one’s furniture in a congruent, life-given way can be an easy enhancement.  The same goes for getting rid of clutter and cleaning – this a personal decision that takes just a little effort.  Entries and exits are important in feng shui.  Attracting good energies and blocking negative forces is key.  Open up the entryway for the good to flow in.   Some guru’s attest that a toilet lid must be kept down!  This “waterway” can suck positivity out of a home.  Fireplaces that can be seen from the entry encourage prosperity to leave one’s home, or be sucked out of one’s life (so I’m told).

The direction the house faces or is oriented is key … I’ve heard East is good.  But another friend said that the entrance to the North is better, due the sun exposure.

Numbers seem to be important.  Eights are good.  I know some agents price their listings with $_____, 888 at the end.  I’ve had buyers tell me to write the offer with 8’s (for good luck).  Someone told me that if the last two digits of the address adds up to eight, that’s good too.

Corners – I’ve heard that sharp corners are not good, say when it comes to small eating tables.  Some don’t like corner houses.  Homes located on a “T” are definitely bad feng shui.  Practically speaking, cars can run into a home easier in this case (nothing that some scrubs/trees or a few blockades won’t fix).  We had a neighbor whose parents warned them about bad spirits entering into their home since they lived on a “T.”  The fix was simply to hang a small crystal (like you’d see on an old chandelier) from a string at the entrance, as well as a small mirror and this did the trick.  When I asked why these objects, they said that this confused and repelled the bad spirits.

Death – Dead plants, trash around the house, a cluttered table, and dead people… many buyer’s have a hard time seeing through a mess, and many more clients buying a home want nothing to do with a property where a death has taken place – Some just want to know that it was peaceful, or not violent.  Whereas, I had an investor client who was not happy (or just not alarmed) to find out that a gang shooting had taken place at the house they were purchasing!  Really?  This became a negotiating tool for a deep discount.  A friend of mine had a dying tree in front of this home.  His father sternly told him, “Get rid of it… it’s blocking your wealth!”  He swears that they very next day his stock portfolio began to soar!

Whether your desire is to gain deeper soul-strength or just have a better flow in your home, I hope you found some inspiration, creativity and practical help in this post.  I’d love to hear some of your stories on how feng shui has affected your life.

Here’s some links to explore future.

http://fengshui.about.com/od/glossaryofterms/ss/Feng-Shui-Basics-Create-Good-Feng-Shui-Home.htm

http://inhabitat.com/9-simple-tips-to-feng-shui-your-home/

http://inhabitat.com/feng-shui-101-getting-started-with-the-basics-of-feng-shui/

 

Cheers,

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Keith Klassen, Broker

Klassen & Associates

916.595.7900

Love Letter to Seller – Does it Make a Difference?

Does it make a difference for a buyer to write and include a personal letter with an offer?  I jokingly call them love letters, because they can ooze with emotion and sometimes be kinda cheesy.

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Over the years, working with home buyers, I’ve been an advocate for the buyer writing a personal letter to the owner.  One might wonder if this even makes a difference?  I got my real estate license in 2005 and wrote my first offer on the house I’m living in today.  During those days, buying a home was extremely competitive and the prices were going through the roof.  A buyer had to do whatever they could to get an offer accepted.  So, I too wrote a “letter from the heart” on my first deal as a licensed agent.  It was flowery, heart-warming, and true – we loved the house (and still do!).  The seller subsequently told us that this separated our offer from the others, especially the part where you said, “[your child] immediately ran into the back yard and jumped on the play structure.”  Hmmm, I instantly learned, there’s something to this letter writing thing.

Subsequently, I’ve had many of the same experiences with other clients.  Just recently I listed a home where we received 3 offers.  One of them included a personal letter.  To my surprise the seller said, “I know that this one is lower in price, and you might think we are crazy, but we just love this buyer’s story and want to go with that offer!”

Try this with an investment property and the owner may laugh out loud.  I’ve actually had investor sellers tell me to not show them the personal letters because they didn’t want to be influences by their emotions.  This statement nails it on the head… We are humans with emotions.  Even though every seller wants the most money out of their sale, there is always the human element and emotions involved.

“What should I say in the letter?” is the next questions I get.  While I enjoy writing, not everyone is as confident with their prose.  Here are some suggestions.

  • Make it short and to the point – most people don’t want to read several pages on your life and journey of buying a home. Several paragraphs get the job done.
  • With that said, introduce yourself. Briefly say who you are and maybe something interesting that relates to the home.  Example:  We love the river and are so glad it’s in walking distance! OR,  This home is close enough for me to bike to work – this is so relieving since I’ve been commuting by car for 8 years, an hour each way! OR, I’ve always loved trains and always wanted to live next to the railroad tracks [I kid you not, I actually heard someone say this!]
  • You may even want to start by complimenting the owner in some way, without being heavy handed. Example:  When we walked into the house, we immediately knew this was the one for us!  Purple is our favorite color and we absolutely love the stenciled lettering above the bed, that reads, “YOU ARE AWESOME!”  The deal was done when we saw the bidet in the bathroom – ahhh to be back in Paris again!  Okay, I’m trying to be funny here and this is an example of heavy-handedness, but you get the point.   When done appropriately, a little flattery goes a long way.  How about this:  We love your sense of style and can tell you really cared for this house.
  • Briefly talk about how this house fits you. Do you have a family that you will raise here and enjoy it for years to come?  Is your elderly mom going to live with you and the downstairs bedroom is perfect?  Are you single, and this downtown loft is a “babe magnet?”  [okay don’t say that].
  • End with a “thank you for considering our offer.  And, we look forward to a smooth transaction.

What else would you include or omit?  Do you have success stories of your own, or maybe a reason why not to include a personal letter?  Your stories and feedback are always welcome.

Cheers!

Keith Klassen, Real Estate Broker – 916.595.7900