Homebuyer’s and real estate investors are becoming increasingly aware of the opportunities for real estate investing in St. Louis. With the demise of the sub-prime mortgage market along with the faltering economy and unemployment rate increases, many people are beginning to realize that now is a great time to begin investing in real estate in St. Louis. Properties are routinely selling for 50-60% of the value they sold for during the boom years of 2005 and 2006. This provides an excellent opportunity to purchase properties, perform minor (or major) repairs and place them into a rental property management program. Our approach is to hold these properties for a minimum of 3-5 years to allow the economy and the St. Louis real estate market to rebound and begin to appreciate again.
One of the first things to address as a beginning real estate investor in St. Louis is where do you want to be? Where do you work and live? Many St. Louis real estate investors prefer to own rental properties near their place of employment or home. Theoretically, this allows the investor “to keep an eye” on the property. Other St. Louis real estate investors like to pick one area that provides good opportunities and purchase several investment properties in that area. When we began real estate investing in St. Louis, we chose the latter of the two approaches. We are currently focusing on neighborhoods in Florissant and St. Ann, primarily in the Ritenour, Pattonville and Hazelwood School Districts. Once each week (sometimes more) we make the 30 minute drive from our office to these areas. This allows us to keep up with the neighborhoods and the condition of our properties. This approach has served us well and we believe that in order to avoid the “horror stories” and pitfalls of real estate investing in St. Louis, you must be hands on and treat it as a full-time business. If you don’t have the time, it will suit you well to hire a professional property management firm that does. Check back here often for future parts of this series on real estate investing. Best of luck!
Thursday, August 13, 2009
Monday, July 13, 2009
Selecting a Reliable Contractor
Whether you are interested in rehabbing houses, maybe remodeling your own house or just wanting to make some minor improvements you've encountered the following questions: Who should I hire to do the work? Should I pick the cheapest, most professional, or something in between? What should I ask them during the interview? Hopefully the following will help relieve some of your concerns during what can be an extremely stressful time.
1. Ask friends and family about experiences
2. Interview several contractors
3. Ask for references (and actually call them)! Ironically, I was doing some work on a condominium unit and had a contractor that I was quite impressed with and thought I would be selecting for the job. Just to be safe, I called the first reference on the list he gave me. The reference actually said he was currently in a lawsuit with the contractor over unsatisfactory work. Needless to say, I chose not to with this contractor and am very glad I did some research on him before getting started. Not to say the exact same thing would happen to me, but if he is not even concerned enough to make sure his references are "good" references, I'd rather not have him doing work for me.
4. Request cerficates of insurance
5. Be sure YOU are the one who selects the materials (tile, carpet, paint, etc.)
6. Make yourself available during the job and check on progress daily
7. Do NOT pay in full until the job is 100% complete to YOUR satisfaction. Be prepared to pay in portions (ex. 1/3 up-front; 1/3 mid-way through the job; 1/3 upon completion).
8. Ask for copies of all applicable licenses/certifications
9. Check records with the Better Business Bureau (BBB)
10. Take a look at past jobs
11. Ask who will be supervising the workers
12. Ask if they use sub-contractors. If so, check references and BBB records for them as well.
13. Make sure bids and contracts are in writing and spell out details of job and specific time-frames.
14. Ask about policies for incidental damage and warranties for the work they perform.
Most importantly, go with your gut. If something seems too good to be true, it probably is. Make sure you are selecting a contractor that you are comfortable working with for several months.
1. Ask friends and family about experiences
2. Interview several contractors
3. Ask for references (and actually call them)! Ironically, I was doing some work on a condominium unit and had a contractor that I was quite impressed with and thought I would be selecting for the job. Just to be safe, I called the first reference on the list he gave me. The reference actually said he was currently in a lawsuit with the contractor over unsatisfactory work. Needless to say, I chose not to with this contractor and am very glad I did some research on him before getting started. Not to say the exact same thing would happen to me, but if he is not even concerned enough to make sure his references are "good" references, I'd rather not have him doing work for me.
4. Request cerficates of insurance
5. Be sure YOU are the one who selects the materials (tile, carpet, paint, etc.)
6. Make yourself available during the job and check on progress daily
7. Do NOT pay in full until the job is 100% complete to YOUR satisfaction. Be prepared to pay in portions (ex. 1/3 up-front; 1/3 mid-way through the job; 1/3 upon completion).
8. Ask for copies of all applicable licenses/certifications
9. Check records with the Better Business Bureau (BBB)
10. Take a look at past jobs
11. Ask who will be supervising the workers
12. Ask if they use sub-contractors. If so, check references and BBB records for them as well.
13. Make sure bids and contracts are in writing and spell out details of job and specific time-frames.
14. Ask about policies for incidental damage and warranties for the work they perform.
Most importantly, go with your gut. If something seems too good to be true, it probably is. Make sure you are selecting a contractor that you are comfortable working with for several months.
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