WHAT TO CONSIDER BEFORE YOU BUY A CONDO IN MESQUITE NV.

WHAT TO CONSIDER BEFORE YOU BUY A CONDO

Condos were once thought of as homes that attracted singles or couples, often without children. But today, condos are growing in popularity and attracting families of all sizes.

Condos can be an excellent choice for the right buyers. Here are a few things that should considered before purchasing a condo. Most buyers start with the condo itself. That may be a good place to begin but, before they buy, buyers should also consider other factors outside of the condo.

Some developers are building condos that have a look and feel like single-family homes. These modern condos have great rooms and open, flowing floor plans that look and feel like a single-family home rather than an apartment or condo.

One of the major attractions of condos is the low maintenance. The community area is maintained by an association funded by the dues that homeowners pay into it.

That’s why buyers’ first consideration should be to explore the development and make sure they like the look and feel of the complex and surrounding community. There are codes and restrictions, often referred to as CC&Rs (covenants, codes, and restrictions) that buyers will have to abide by once they purchase a condo. Buyers should ask to review them before making an offer to purchase a condo. These regulations help ensure that the community maintains its general appearance and any necessary repairs of the external areas.

Review the association’s budget. It may be necessary to get the seller to provide this information because it may not be released to a non-owner who is only a potential buyer. However, in considering buying into a development, it’s almost like going into business with the neighbors in the complex. It’s important to make sure that the association is running properly and has enough of a reserve for necessary expenses and maintenance. The budget and CC&Rs will give an idea about how stable the association is and if increases in the homeowners’ association dues are likely each year.

Find out how many owners in the development are delinquent on their dues. A condo complex that has a high level of delinquencies can cause problems for buyers when it comes time to get a loan or sell the condo. Some loans are not approved if delinquency rates are higher than 15 percent.

Review the minutes from the association’s board meetings. They will reveal the day-to-day issues that occur each month and give an indication of how the development is run. For instance, lots of complaints and filings about noisy residents, loud parties, or dog droppings on the lawn reveal potential problems with neighbors. The minutes will also reveal if the development is engaged in any lawsuits.

Understand what your responsibilities are for the upkeep of the condo. Find out what the association takes care of and what the homeowners have to maintain. Look at the association’s property management team and see how many times the association has changed management companies. Find out why. This will may reveal how responsive the association will be should residents need its assistance.

Ultimately, buyers need to ensure that when they purchase a condo they’re not buying into any legal battles the association is in the middle of and that they will be able to live in their condo the way they want. Study the CC&Rs and do due diligence before buying.

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Capitalization Rate: How to Compute and Use

Capitalization Rate: How to Compute and Use

The capitalization rate is one of the most popular rates of return real estate agents, investors, and other analysts rely upon to help them measure the value and profitability of rental income property.

As a result, it regularly appears on rental property marketing presentations, property performance reports such as the annual property operating data (or APOD) and proforma income statements, not to mention on the tongues of most active real estate investing participants. In fact, you would only have to spend one day working with investment real estate to see or hear the word “capitalization rate” or “cap rate” (the more common vernacular) popping up somewhere.

It seemed needful therefore to dig in and explain the return for those of you who are less familiar with investment real estate. So in this article we’ll take a look at cap rate, including its meaning, popularity, and the two primary ways (with formulas) analysts use it to benefit their real estate analysis.

Meaning

Capitalization rate is technically defined as “the rate at which you discount future income to determine its present value”.

In layman’s terms, however, and more meaningful for our purpose, let’s simply regard cap rate as the ratio (expressed as a percentage) between a property’s estimated value and its net operating income (NOI). Think of it this way: It expresses what percent of a property’s value is attributable to net operating income. For instance, a value of $500,000 and NOI of $50,000 computes a 10% caprate and is consistent with the fact that the NOI is 10% of the value.

Uses

Fair enough. Now let me show you two of the ways you can use capitalization rates to benefit your investing activity and objectives.

1. Property Comparison

Because it’s easy to compute, cap rate provides a quick way to conduct “rule-of-thumb” measurements of an asset’s financial performance and therein facilitates ones ability to make rapid market comparisons between similar-type income producing properties at almost “one glance”.

Formulation:
CR = Net Operating Income / Property Value

Example:
A multifamily apartment building producing an annual net operating income of $50,000 and listed for $500,000 would have a capitalization rate of 10.0%.

Application:
Let’s say that one of your customers has expressed an interest in making a real estate investment if you can locate a rental income property that has a cap rate of 10.0% or more. What’s your customer “really” requesting? That he or she wants you to locate an income-producing property that produces a net operating income equal to or greater than ten percent of its asking sale price.

What do you do in response? You examine the inventory of apartments for sale in your target area and calculate the caprate for each to determine which may or may not be a viable investment candidate.

2. Property Valuation

If you know what an appropriate cap rate for some particular type of rental income property is in your area, then you can transpose the formula to calculate a reasonable estimate of value. And this is beneficial because it ignores the seller’s asking price for the property and instead determines what it should be worth based upon its net operating income and the prevailing market rate.

Formulation:
Value = Net Operating Income / Capitalization Rate

Example:
Say you want to establish the fair market value for a commercial office building that generates an annual NOI of $90,000. Based upon your comparable market analysis for similar-type buildings that recently sold in the area, you conclude that the prevailing cap rate is 10.0%. You would derive an estimated market value of $900,000.

Again, a highly simplistic example that purposely ignores other relevant considerations, but hopefully you get the idea.

Rule of Thumb

Bear in mind that rental income and operating expenses both derive the net operating income, and their numbers might be skewed. After all, it’s not unusual for some sellers and agents to inflate rents and deflate expenses for marketing purposes. Therefore, whereas you might want to also explore buildings denoting a lower cap rate than your primary objective, it’s also smart to refrain from becoming over-zealous when it appears to exceed your objective.

The bottom line is for you to always dig deeper into the numbers regardless, and never rely on capitalization rate apart from other criteria to make a prudent real estate investment decision.

 

James Kobzeff

It Is Not Working!

Heart surgeon speaks out on what really causes heart disease

We physicians with all our training, knowledge and authority often acquire a rather large ego that tends to make it difficult to admit we are wrong. So, here it is. I freely admit to being wrong. As a heart surgeon with 25 years experience, having performed over 5,000 open-heart surgeries, today is my day to right the wrong with medical and scientific fact.

I trained for many years with other prominent physicians labelled “opinion makers.” Bombarded with scientific literature, continually attending education seminars, we opinion makers insisted heart disease resulted from the simple fact of elevated blood cholesterol.

The only accepted therapy was prescribing medications to lower cholesterol and a diet that severely restricted fat intake. The latter of course we insisted would lower cholesterol and heart disease. Deviations from these recommendations were considered heresy and could quite possibly result in malpractice.

It Is Not Working!

These recommendations are no longer scientifically or morally defensible. The discovery a few years ago that inflammation in the artery wall is the real cause of heart disease is slowly leading to a paradigm shift in how heart disease and other chronic ailments will be treated.

The long-established dietary recommendations have created epidemics of obesity and diabetes, the consequences of which dwarf any historical plague in terms of mortality, human suffering and dire economic consequences.

Despite the fact that 25% of the population takes expensive statin medications and despite the fact we have reduced the fat content of our diets, more Americans will die this year of heart disease than ever before.

Statistics from the American Heart Association show that 75 million Americans currently suffer from heart disease, 20 million have diabetes and 57 million have pre-diabetes. These disorders are affecting younger and younger people in greater numbers every year.

Simply stated, without inflammation being present in the body, there is no way that cholesterol would accumulate in the wall of the blood vessel and cause heart disease and strokes. Without inflammation, cholesterol would move freely throughout the body as nature intended. It is inflammation that causes cholesterol to become trapped.

Inflammation is not complicated — it is quite simply your body’s natural defence to a foreign invader such as a bacteria, toxin or virus. The cycle of inflammation is perfect in how it protects your body from these bacterial and viral invaders. However, if we chronically expose the body to injury by toxins or foods the human body was never designed to process,a condition occurs called chronic inflammation. Chronic inflammation is just as harmful as acute inflammation is beneficial.

What thoughtful person would willfully expose himself repeatedly to foods or other substances that are known to cause injury to the body? Well, smokers perhaps, but at least they made that choice willfully.

The rest of us have simply followed the recommended mainstream diet that is low in fat and high in polyunsaturated fats and carbohydrates, not knowing we were causing repeated injury to our blood vessels. This repeated injury creates chronic inflammation leading to heart disease, stroke, diabetes and obesity.

Let me repeat that: The injury and inflammation in our blood vessels is caused by the low fat diet recommended for years by mainstream medicine.

What are the biggest culprits of chronic inflammation? Quite simply, they are the overload of simple, highly processed carbohydrates (sugar, flour and all the products made from them) and the excess consumption of omega-6 vegetable oils like soybean, corn and sunflower that are found in many processed foods.

Take a moment to visualize rubbing a stiff brush repeatedly over soft skin until it becomes quite red and nearly bleeding. you kept this up several times a day, every day for five years. If you could tolerate this painful brushing, you would have a bleeding, swollen infected area that became worse with each repeated injury. This is a good way to visualize the inflammatory process that could be going on in your body right now.

Regardless of where the inflammatory process occurs, externally or internally, it is the same. I have peered inside thousands upon thousands of arteries. A diseased artery looks as if someone took a brush and scrubbed repeatedly against its wall. Several times a day, every day, the foods we eat create small injuries compounding into more injuries, causing the body to respond continuously and appropriately with inflammation.

While we savor the tantalizing taste of a sweet roll, our bodies respond alarmingly as if a foreign invader arrived declaring war. Foods loaded with sugars and simple carbohydrates, or processed with omega-6 oils for long shelf life have been the mainstay of the American diet for six decades. These foods have been slowly poisoning everyone.

How does eating a simple sweet roll create a cascade of inflammation to make you sick?

Imagine spilling syrup on your keyboard and you have a visual of what occurs inside the cell. When we consume simple carbohydrates such as sugar, blood sugar rises rapidly. In response, your pancreas secretes insulin whose primary purpose is to drive sugar into each cell where it is stored for energy. If the cell is full and does not need glucose, it is rejected to avoid extra sugar gumming up the works.

When your full cells reject the extra glucose, blood sugar rises producing more insulin and the glucose converts to stored fat.

What does all this have to do with inflammation? Blood sugar is controlled in a very narrow range. Extra sugar molecules attach to a variety of proteins that in turn injure the blood vessel wall. This repeated injury to the blood vessel wall sets off inflammation. When you spike your blood sugar level several times a day, every day, it is exactly like taking sandpaper to the inside of your delicate blood vessels.

While you may not be able to see it, rest assured it is there. I saw it in over 5,000 surgical patients spanning 25 years who all shared one common denominator — inflammation in their arteries.

Let’s get back to the sweet roll. That innocent looking goody not only contains sugars, it is baked in one of many omega-6 oils such as soybean. Chips and fries are soaked in soybean oil; processed foods are manufactured with omega-6 oils for longer shelf life. While omega-6’s are essential -they are part of every cell membrane controlling what goes in and out of the cell — they must be in the correct balance with omega-3’s.

If the balance shifts by consuming excessive omega-6, the cell membrane produces chemicals called cytokines that directly cause inflammation.

Today’s mainstream American diet has produced an extreme imbalance of these two fats. The ratio of imbalance ranges from 15:1 to as high as 30:1 in favor of omega-6. That’s a tremendous amount of cytokines causing inflammation. In today’s food environment, a 3:1 ratio would be optimal and healthy.

To make matters worse, the excess weight you are carrying from eating these foods creates overloaded fat cells that pour out large quantities of pro-inflammatory chemicals that add to the injury caused by having high blood sugar. The process that began with a sweet roll turns into a vicious cycle over time that creates heart disease, high blood pressure, diabetes and finally, Alzheimer’s disease, as the inflammatory process continues unabated.

There is no escaping the fact that the more we consume prepared and processed foods, the more we trip the inflammation switch little by little each day. The human body cannot process, nor was it designed to consume, foods packed with sugars and soaked in omega-6 oils.

There is but one answer to quieting inflammation, and that is returning to foods closer to their natural state. To build muscle, eat more protein. Choose carbohydrates that are very complex such as colorful fruits and vegetables. Cut down on or eliminate inflammation- causing omega-6 fats like corn and soybean oil and the processed foods that are made from them.

One tablespoon of corn oil contains 7,280 mg of omega-6; soybean contains 6,940 mg. Instead, use olive oil or butter from grass-fed beef.

Animal fats contain less than 20% omega-6 and are much less likely to cause inflammation than the supposedly healthy oils labelled polyunsaturated. Forget the “science” that has been drummed into your head for decades. The science that saturated fat alone causes heart disease is non-existent. The science that saturated fat raises blood cholesterol is also very weak. Since we now know that cholesterol is not the cause of heart disease, the concern about saturated fat is even more absurd today.

The cholesterol theory led to the no-fat, low-fat recommendations that in turn created the very foods now causing an epidemic of inflammation. Mainstream medicine made a terrible mistake when it advised people to avoid saturated fat in favor of foods high in omega-6 fats. We now have an epidemic of arterial inflammation leading to heart disease and other silent killers.

What you can do is choose whole foods your grandmother served and not those your mom turned to as grocery store aisles filled with manufactured foods. By eliminating inflammatory foods and adding essential nutrients from fresh unprocessed food, you will reverse years of damage in your arteries and throughout your body from consuming the typical American diet.

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