CT Real Estate Today - May Edition

Renovating a property?

Be sure to use this tax strategy.

Property Management pushing you to your limits? Take a breath and keep your sanity.

Don’t let debt hold you back from your next investment property.

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May 2019

FEATURED ARTICLES 4

Publisher’s Message: CTPOA and supporters visit the Capitol; Meet with Governor’s staff to raise awareness on housing issues.

The Valley Association of Realtors

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Celebrating 74 years 6 Talking Property Management: Experienced property manager gives her best advice to staying sane when the pressures of property management add up.

Tools cities should be using to address blight.

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Realtor Viewpoint: Thinking of selling your property?

Here are 6 ways to get it SOLD fast.

TAKING ORDINARY LOSSES ON ABANDONED ASSETS DURING RENOVATION

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Financially Speaking: Don’t let

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debt hold you back from purchasing an investment property.

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PUBLISHER’S MESSAGE “Helping Property Owners Since 1994” Bob De Cosmo began purchasing and managing rental real estate in 1982 and is a strong advocate for affordable housing and private property ownership right's in Connecticut.

Published by CTPOA Our goals; Educate our members on “Best Practices” for maximum efficiency Increase profitability Provide access to “Core Services” needed to better manage and maintain properties

Our Team: Emily Pacileo Carmine De Cosmo Bob De Cosmo

Bob De Cosmo, President

When things go well economically in the real estate industry, that’s when policies and regulations are created that harm property owners and Realtors. It’s a simple concept to understand. In bad times everyone is focused on their own misery and it’s not long before misery loves company and the result is the coordination of efforts and groups form to change policies that are harmful towards the industry. In good times these groups disband and efforts cease to reform policies and people stop paying attention.

work behind in exchange for prosperity I and others departed 300 Capitol Avenue after changing the eviction laws twice in the landlord’s favor in 1997 and again in 1999. We fought to make it a crime to destroy a landlord’s property. We successfully lobbied for allowing commonly granted fire-code modifications to be approved at the local level and convinced Governor Rowland veto the pressure vessel legislation… we had a pretty successful run over 6 years.

When I was actively developing property in the early 2000’s, I also stopped advocating for landlords at the Capitol to enjoy the market uptick. When I left the advocacy

going well for the real estate industry again.

When the market began to tumble in 2006, I saw some new legislation being proposed, it was 180 Winston Churchill is quoted as degrees opposite from when we saying; “For those that fail to learn stopped advocating. The bills from history are doomed to repeat it. were now, Identification of a Landlord, Responsibility of a So, what does this historical quote have to do with real estate? Landlord, fines and fees for blight and code violations were increasThe answer is an awful lot because right now we are forgetting ing and lead paint became an increased risk that owners where to the lessons of the past and real be held responsible r without any estate investors and agents are discussion of parental neglect or a not paying attention to the poli- tenant’s responsibility for their cies in play right now that will own children. negatively impact Connecticut’s It’s been 12 years since the Great housing industry.

Recession and in 2019 things are

Unfortunately, it appears that some legislators have decided to shut off the prosperity and target real estate 4

on numerous fronts with proposals including, limiting rent increases, lowering lead abatement levels, introducing strict liability for lead poisoned children, providing civil rights protections to criminals as well as concealing criminal records from the public, to name a few.

present. Capital for Change president and CEO, Cal Vinal was in attendance as well as eviction attorney and member of the Citizens Advisory Council on Housing Matters, Venoal Fountain.

CTPOA was represented by David Haberfeld, Naomi Freeman, Ereyn Lalonde and me. The meeting lasted an hour and was productive; we’ll request another meeting soon.

On Tuesday April 30th, a meeting was held with Governor Lamont’s housing policy advisor, Lisa Tepper Bates. I The purpose on requested the my part to request meeting because this meeting was the legislative proto start a converposals being put sation and raise forward will imthe Governor’s pact Connecticut’s awareness to cereconomy in a negtain housing proative fashion. Real posals at the LegEstate is an ecoislature. The three nomic generator groups believe but if landlords are several of the probeing exposed to posals are going L to R...Freeman, Clinton, Fountain, De Cosmo, Haberfeld and higher risk by to have a negative Souza after the April 30th meeting at the Connecticut Capitol. renting to career impact on real escriminals without any real knowledge of their past tate, which is one of Connecticut’s vital industries activities or are facing seven figures lawsuits for and we want to solve Connecticut’s problems not the lifetime earning capacity of child because their add to the list of troubles we face. lead level is just a few points above zero; this is There is just one month left till the end of the really dangerous course. Private investment dollars 2019 General Assembly session and still many will seek safer havens and Connecticut will contin- bills that are harmful to the real estate industry are ue to rank near the bottom in economic indicators alive. In years past, these bills would have never and bleed off its middle class residents to other made it out of committee let alone be waiting for states…a trend that we need to stop immediately. action in the House or Senate.

This meeting also marked the first time

Vigilance isn’t something that should be turned on

that all three Statewide Property Owner and off like a faucet. The Real Estate industry is Associations sat at the same table at the vital to Connecticut’s economy and I implore evesame time. The CT Apartment Association was ryone associated with this industry to pay attenrepresented by their lobbyist, John Bailey, the CT Coalition of Property Owners had its president John Souza, fellow officer and eviction attorney Michael Clinton and their lobbyist, Michael Rell

tion to policies while they are being formed, not after they are signed into law. It’s hard to stick the Jeannie back into the bottle once it escapes.

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Submitted by: Valley Association of Realtors, Board of Directors

The Valley Association of REALTORS® (VAR) is proudly celebrating our 74th year of serving its members throughout the State of Connecticut. The Association received its Charter from the National Association of REALTORS on January 27, 1945. VAR, formerly the Valley Board of REALTORs®, originally consisted of REALTORS® and REALTOR® Associates. The organization changed to an all REALTOR® board in 1981. Our mission is to enhance our members' ability to conduct business professionally, ethically and competently and promote the image of REALTORS® as knowledgeable practitioners essential to the real estate transaction. Through our educational and informational endeavors, we foster career advancement, real estate best practices and enforcement of the Code of Ethics distributed by the National Association of

REALTORS®.

The jurisdiction as acknowledged in the bylaws of the Association are the towns of Ansonia, Beacon Falls, Derby, Oxford, Seymour and Shelton. In addition to servicing those areas, members often belonged to more than one association based on the location of properties for sale. Our MLS began on index cards and moved on to MLS books, printed every two weeks in black and white. Books were either delivered to each office or left in the VAR office for pickup by agents. Mailboxes were available at VAR for delivery of MLS books and mail for each member office. A photographer was employed to take photos of our listings. We can only imagine the long, tedious process of managing the listings and books that needed to be updated.

As the industry changed, so did the meth6

Valley Association Listing Book , 1974

od in which we conducted business. MLS service became more complex and service areas merged. VAR relocated from our second floor Main Street location in Ansonia to a purchased two family on Wakelee Avenue where we were located on the first floor and landlords to tenants on the second floor. Storage space and parking again became a problem with our growing membership and a larger colonial, also on Wakelee was purchased. A Renovation committee was formed and the colonial was transformed into new offices for VAR with ample space for storage and meeting rooms.

But again, as the market changed, the economy altered course, The VAR Board of Directors voted to sell the building and find a suitable location with a goal of reducing overhead and keeping operating costs low so they could set reasonable fees for members. Our next address was 50 Olivia Street in Derby where we still are home to our members. Then the Internet came as we all know and in 2017 came the merger of the two large Multiple Listing Services to the new Smart MLS. LOOKING AHEAD: STAY AHEAD = knowledge, values and efficiencies, Promote and support shared values.

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The local associations have always been the managing arm for its members in providing the Code of Ethics which distinguishes “THAT’s WHO We R” as now seen in ad campaigns from the National Association of REALTORS®. As reported in Inman, 79% of Americans feel owning their home is a key part of the “American Dream”. As REALTORS® and VAR members, “We R”, and should be, the go to persons for the “American Dream” VAR provides

continuing education to members through our own school, Valley Academy of Real Estate, lunch and learns, business presentations, community involvement and events on matters that are important to our members. We encourage all members to participate in Calls for Action by texting “CTR” to 52886 and “REALTORS” to 30644.

The Valley Association of REALTORS®, while representing the wonderful six towns we have mentioned above, welcome all real es-

tate professionals to come meet us at our office location: 50 Olivia Street Derby, to learn about what we have to offer and join our association. Thanks to the many Valley Association of REALTORS® Board of Directors and members past and present for making these last 74 years so great and for guiding us into a bright and promising future.

We will be having a 75th Anniversary Celebration in 2020.

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VALLEY ASSOCIATION OF REALTORS

Anita Visconti Branch Sales Manager Company NMLS ID# 71655

anita.visconti@norcom-usa.com www.anitavisconti.norcommortgage.com

https://www.facebook.com/varct/

Twitter @ValleyAOR

7 F Garage Road, Southbury, CT 06488 This is not an offer to make a loan or to make a loan on any particular terms. All loan applicants must qualify under requirements and satisfy all contingencies of loan approval. Rates and terms subject to change without notice.

www.varct.com Call: 203-735-7815 Email: info@varct.com Association Executive: Carol Rich

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Property Management Ways to save your sanity

By: Naomi Freeman, Founder of Freeman & Co.

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olding my laundry on a sunny morning at the laundromat close to downtown New Haven, two women nearby that were tenants loudly complained about their property management companies.

all their money and they’re gone!”

I almost burst out laughing. I own a real estate consulting company and have done a good deal of property management for years now. I wasn’t sure what was more comical, their idea that it was such a lucra“My old company was only there around tive business or their idea that property 2 years and then they left! They’re just in it managers strategically planned a two year for the money!” exit strategy as that’s when they would have, “...all their money!” No ladies, I “That’s right!” lady #2 bellowed, “they thought, they didn’t “get their money and just get their money and run!” My man- run. They snapped. They had to save their agement company was only around for sanity, (if they hadn’t already lost it).” about two years also! By then, they make 10

Property management can be one of the most emotionally, physically, and spiritually taxing lines of work. We’re talking about being responsible for not one, but many residences where people call home...their safe abode.

In a state that is actively working to make your already high responsibilities even higher, it seems that even if a tenant punched their fist through the window, it would somehow be the landlord’s fault because the window was there.

It’s not that extreme, however, this is the general attitude that is present and growing. It’s as if the tenant has no responsibility or repercussions for their negative, destructive or negligent behavior.

the tumultuous seas on this wild ride, how do you keep your sanity?

Disconnect. Take

at least one 24-hour space of time every week to disconnect. It’s imperative you take that time to remember you are human, to heal emotionally and physically.

When you disconnect, turn off your phone, your i-pad, your laptop, etc. Detox from technology. Disconnect to reconnect. There’s a lot of science on the positive benefits of doing this. Solutions to your biggest challenges will come to you as you’re staring at the wall thinking about nothing in particular. Your weekly productivity actually increases when you take this time.

If you do not take this time, you are constantly going about, running on empty or half charged batteries, decreasing your production, increasing procrastination and obviously affecting your health, relationships and Naturally, more and more good and hon- overall mental well-being. It allows you to est landlords are jumping ship into the re-charge and take on the week with a much safer bosom of the ocean of other sharpened focus. I know taking this time endeavors. may seem difficult, if not impossible, however, it is definitely doable, and it will However, if you are one of the landlords save you. Here is how. or property managers still sailing through 11

It’s best to schedule this time when most offices are closed. a Saturday or Sunday is best. Then you must think, if there truly is an emergency, what REALLY qualifies as an emergency that is ACTUALLY applicable to me and if so, how do I handle it?

True emergencies are not a tenant having a Tift with another tenant, the cabinet door coming loose, or a hundred other things that a tenant may deem as an emergency. A true emergency that a truly needs quick action basically boils down to a few things. Plumbing, heat and electricity. Now, either set up in your voicemail the number of a trusted person or persons to handle this type of emergency. Alternatively, some people also just have calls rerouted to a 24-hour emergency answering service that sends the message to the appropriate individual.

work, a company that takes all my incoming calls, a company that does the cleaning and so forth. I have found companies/ services to be more cost effective as they are typically able to do bulk pricing and they are reliable whereas with an individual, there are life events, (unexpected sickness, emergencies, etc.) that business will not wait for.

Wait! Develop the

skill of waiting. Do not succumb to re-

acting to a person’s negative emotions or words. This takes practice; however, anyone can develop this skill and it will serve you well in all areas of life.

I have been doing this for years and it Here’s a scenario: A tenworks just fine, while giving you time that ant shows up unanis imperative to disconnect and rejuvenate. nounced at your office.

They have just received Delegate! I know an eviction notice. it is very tempting to They are behind on do it all yourself to rent and they have make sure that it gets done right and per- caused property damage. They are haps initially when you are very small and screaming, shaking their body defiantly just getting started it makes sense to do it and wagging their finger at you at what an all yourself, however, as soon as you can, awful human being you are for collecting delegate! Delegation is essential to freeing rent. They seem to have forgotten that to up your time to work ON your business pay the mortgage, insurance and a 100 rather than just IN your business. other bills, rent is mandatory. It is simply essential. That is all. However, there they Personally, I prefer services rather than in- are, creating a scene targeting you as the dividual people if possible. For example, I devil itself. have a company that processes my paper12

The first thing you must do is wait a moment before you respond. Learn how to monitor your breathing and quiet your heart. You will feel that feeling where your heart starts to race 100 miles a minute, you break into a cold sweat and you start to trip over your words. A trick that some use is to imagine a time in the future after the present situation when the eviction is done and gone, and a wonderful new tenant is now renting there. Think of yourself smiling and grateful for the wonderful new tenant. Feel the peace in your heart and in your mind. Feel the calmness.

Intensify the calmness and serenity. Let it fill you up to where it’s “seeping out of your pores.” You can use a different mental scenario than what I described. It can be any mental scenario that inspires calmness to trigger a calm strength in you. Imagining your calm scenario and mentally placing yourself there may sound like a lot to do quickly, however, it can be done in the flash of eye. If you’re just starting out, you’ll find that initially, you may have some rocky starts, however, you’ll get better and better at it.

apply it to your response and communication. When they can’t “stoke the fire” in you, it won’t necessarily make them calm, however, it puts you in a mindset that you can now think with calculation rather than from impulsive and dangerous emotion.

You may find that you need to be sternly harsh with them, again though, it will be from a place of control rather than losing control. This takes some practice; however, it is imperative. You will find that your emotions may still become heightened from such a confrontation, however, you are able to recover at a much faster rate and the derogatory effect that it has on you is significantly lowered. The more you do this, the better you become.

Take this same concept into hateful messages that you receive. If it is not an emergency, give it time. The last thing you want to be caught in is an emotionally charged text war. Let it sit. At first, it will kill you.

Everything in you will want to respond right away! Don’t. Just don’t. Don’t respond until you are responding from a place of calm cognition rather than emotion. Also, even if you are in a place of calm cognition, the tenant clearly is not, so anything you respond will only enrage them. Perhaps give it a day or two, (depending on the scenario), give them time to cool off. It is not uncommon that something that has nothing to do with property management tripped their trigger, and they dump their emotional waste on whomever they think of. If you get pulled into their chaos, they will rememNow take that same calm perspective and ber you for the next time they want to 13

dump emotions. Whereas if you wait to respond until they cool down, (if a response is even warranted), typically, they will then feel foolish and ridiculous, discouraging further emotional dumps on your company.

Unify! Most land-

lords and property managers have some form or other of PTSD from being attacked and abused on all sides from the city, the tenants, the attorneys, etc.…yet, we

are not helpless. Unified, we represent a strong force to be reckoned with. It’s time.

Don’t let the train run you over. Contact CT Property Alliance to join the statewide network to create a powerful alliance to work to make this state a better place to do business and to live.

I trust the four steps will help you. They have helped me and countless others. It is important to create healthy ways to deal with the stress. Turning to alcohol, food or drugs will only hurt the one body you have. Nothing is worth giving that kind of power over you. Stay healthy, stay peaceful and prosper.

Naomi Freeman, founded Freeman & Co. to give property owners a comprehensive solutions to your real estate, and financial needs.

From property management to foreclosure solutions, no matter what your challenge or need, we look at your situation in its’ entirety, connecting you with attorneys, real estate, & finance experts to bring to you what is truly good for you and your goals.

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Let’s Stop Losing the War On Blight By: Bob Decosmo, CTPOA President

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n August of 2013, I was appointed by then Senate President Don Williams to represent Connecticut’s residential landlords on the Statewide Blight Task Force.

The task force was charged with studying the blight issue, holding hearings and then making recommendations to the legislature prior to the opening of the 2014 General Assembly session.

There was a diverse group sitting on this task force and I had a belief that landlords do not secretly drive to their investment property at night and graffiti and deface their own buildings. However, some on that panel wanted to make landlords responsible for their tenant’s willful destruction, even when it wasn’t the owner’s fault. In fact, one member suggested piercing the corporate veil and suing the managers or presidents of LLC’s and Corporations personally for the outward appearance of properties.

In 2012, New Britain enacted a blight ordinance that made property owners responsible for conditions such as; indoor furniture left outdoors, clothing or articles hanging from a tree and faded paint…the fine was $250 per day, per violation and each violation was a unique offense.

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If a New Britain property owner failed to open their certified mail in a timely fashion that sent notice of the blight violations, after just one or two weeks, the owners’ equity could be stripped away, and then the city could begin foreclosure proceedings! This is a textbook example of “Government Takings” and that New Britain ordinance has been updated and

the Mayor that drafted the policy was ousted from office after one-term.

The War on Blight boils down to one thing, MONEY, or the lack thereof.

One piece of research that CTPOA has requested is a comparison of the increase in Fair Market Rents over the past 30 years versus the increase in utility, insurance, property tax and maintenance costs.

I will believe the research will show that

rental rates have failed to keep up with operational expenses by a large margin.

Exterior maintenance is the last improvement an owner makes when pressing obligations such as mortgage and tax payments take priority and of course, nonpayment evictions just compound this problem.

However, not all property owners are good property owners and what cities need to do is collaborate with local neighborhood and property owner associations to effectively remove those “bad” owners that give credence to that term frequently used; slumlord.

Cities have all the tools they need to win the War on Blight with just the “Clean and Lien” statute but I have yet to see many cities take this statute to the next level which allows that lien to become a “super-lien” and jump ahead of the bank’s mortgage. If the lien goes unpaid after 30 days, the city can commence foreclosure proceedings, but this is a power that needs to be used judiciously.

Another tool that could be effective requires good landlords or neighborhood groups to band together and file lawsuits against the offending slumlord for the de16

decline in their property values.

While I have never seen this in practice, in theory it makes good sense to target absentee landlords that don’t try to maintain their property and they rent to anyone that shows up with cash.

It’s time to think outside the box because it’s been 5 years since the Bligh Task Force concluded its work and things have gotten worse in many cities.

There are no winners in the War on Blight, everyone is a loser so let’s get some renewed focus where it needs to be applied and try and clean up our cities.

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Ways to sell your property for top dollar!

By: Eryen LaLonde, REALTOR - DB & Associates of CT LLC. The spring market is in full effect. In fact in April the U.S. national median home listing price reached $300,000 for the first time ever according to realtor.com which is also a 7% jump year-over-year. In April CT also saw an increased sold price with an average of $372,548 with 84 days on the market compared to April of 2018 where the average sold price was $358,327 with 71 days on market. There are currently over 15,000 single family homes and condos/co-ops listed for sale and over 900 multi-unit properties on market.

1. Hire a professional

REALTOR to sell your property.

This will provide your listing with maximum exposure in the market. There is a reason FSBO properties sell on average for significantly less than an property listed with a REALTOR. According to the last study by NAR (National Association of REALTORS) FSBO properties sold for 32% less than agent assisted sales. That is a lot of money to leave So how do you ensure you stand on the table. That profit loss increases even out in the market and receive top more when a FSBO has dollar for your property? an arms length transaction.

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Price your home aggressively. Also be mindful of the actual price. Buy-

Naturally money or net proceeds will be foremost on your mind and rightfully so.

Setting the right price for your home is the single most important decision you will make when you decide to sell. Price will have a tremendous effect on whether your home sells quickly, possibly receive multiple offers or languishes for months on the market which naturally will equate with diminishing interest. Your agent will be able to put together a current list of comps. To determine a realistic market value you need to analyze what has recently sold, what is pending and what is currently on the market. It is also a good idea to review what has not sold or has expired off the market. The expired listings can show a trend of what buyers are perceiving for value or lack thereof.

er’s generally get approved in even increments usually in $5,000 brackets. They also are searching on mobile devices that often have pull down brackets in $25,000 increments. So pricing a home at $200,000 will give you broader appeal then pricing it at $199,999 or even $201,999. The reason is if you price at $201,999 you may miss out a buyer who is approved for $200,000 because they are searching the $200,000 and under categories. I listed a house last year for an investor. I had represented him on the buy side of the property years earlier. Renovations got sidetracked and he was not ready to list for a couple years. When he came to me he wanted to list at $179,900. I did a new Comparative market analysis and predicted we could likely sell for $190,000 to $195,000. Therefor I suggested listing at $200,000 because that magic number would place in two price brackets - the $175k to $199k and the $200k-$224k giving us maximum exposure in the market place. This strategy worked and we received multiple offers right away and closed just slightly under list at a price higher than I even originally estimated.

In our market right now with a properly priced home you should be seeing an offer fairly quickly and we are actually seeing a trend of multiple offers. If you currently have a property that is not generating interest resulting in an offer take a hard look at your pricing. Everything will for the right price especially if all other 3. Put your best foot forward. factors are favorable. If your property is not selling it will usually Prep your house for photos and showcome down to price. ings. This means doing a deep cleaning,

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decluttering and sprucing up curb appeal.

Clean like you’ve never cleaned before.

Few things significantly detract from the appeal of a home quite like clutter.

Though straightening and organizing is rarely the way most of us homeowners want to spend our days, invest some time in tidying up and it will make a huge difference. Rid your entryways and mud rooms of extra coats, bags, and boots.

Keep those countertops clear, and don’t forget to straighten up areas like the inside

ware or light fixtures. If you’re willing to invest a bit more, replace an outdated appliance or two. Something as simple as cleaning the grout in your bathroom will go a long way toward making the place shine.

5. Be flexible with showings.

Today’s buyers want to see how houses when they want to see them. Having your home on the market will require some patience and flexibility. It is never helpful to have a restrictive showing schedule. Often buyers are touring multiple homes in one the cabinets, closets, basement and other day so if they can not see your property storage areas. they may not circle back another time.

4. Invest in some minor upgrades During showings owners should not be present and remember to take fido with (that make a major difference). you. If you get frustrated with showings Fresh coats of paint brighten up rooms just remember your goal is to sell and and make them appear fresh again. If you once you have an executed contract you don’t have the money to splurge on a ma- are on your way to handing over those jor kitchen renovation, consider inexpen- keys, collect your check and move on — sive updates like switching out the hardliterally!

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If you are selling a multi family be sure to speak with tenants before going on the market and firmly set the expectations for showings.

Nothing makes selling a multi-unit harder than uncooperative tenants.

Advise tenants to vacate for showings. If they don’t you risk the chance of them speaking negatively about your property . This happens often, even with the best tenants as they often become fearful of change in ownership. So the best practice is to get them to leave for showings. CT requires minimum of 24 hour notice to tenants for entry unless an emergency.

6. Take care of an-

noring? Fix it now. If you’re aware of problems that will undoubtedly appear on a home inspector’s report, deal with them as soon as you can so you don’t waste time or lose a potential

Eryen LaLonde, REALTOR 2016 - 2018 Top Producer Representing buyers, sellers & investors!

DB ASSOCIATES OF CT Board of Directors MidState Board of Directors CT Association of REALTORS

Call: 860-384-4992 eryenlalonde@yahoo.com

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TAKE ORDINARY LOSSES ON ABANDONED ASSETS DURING RENOVATION By: Ted Lanzaro, CPA Description – Building components removed during the renovation of an income producing property can be written off at their net cost basis to create an ordinary loss not subject to passive activity rules. The new Tax Cuts and Jobs Act of 2017 did not change these rules.

Why is this important?

An investor who purchases an income producing property requiring renovation has a huge opportunity to break out the individual building components (units of property) and then write off those components disposed of during renovation.

What is a unit of property?

A unit of property refers to the various systems that make up a building. These can be defined as:

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Heating, ventilation and air conditioning systems

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Plumbing systems

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Electrical systems

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All escalators

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All elevators

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Fire protection and alarm systems

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Security systems for protection of building

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Gas distribution systems

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The remaining building structure that includes walls, windows, doors, floors, roof and concrete

When should I use this strategy? This strategy is used primarily when demolishing and renovating a building that is used for business or income producing purposes.

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An example:

Result: John gets to write off

the $300,000 from the original cost basis of John paid $3,000,000 to purchase a 100 unit apartment building that requires ren- the property as an ordinary loss on his tax ovation to improve the dwellings and at- return and he adds the cost of the new kitchens and bathrooms to the cost basis tract new tenants. Each apartment consists of 2 bedroom and 1 bathroom, with of the property. a living room and a kitchen.

How do you implement and Each unit needs a new kitchen and bath- safeguard this deduction? room. The plan is to gut the existing The IRS requires an abandonment study kitchens and bathrooms and replace them to be performed by a tax engineering firm with newly installed components - cabito prepare a report to document the denets, sinks, appliances, shower, etc. duction.

Here is how it would work:

First, an allocation of the original purchase price of $3,000,000 is made to each old kitchen and bathroom. For example, let's assume we allocate $2,000 of the purchase price to each kitchen and $1,000 of the purchase price to each bathroom.

Prior to renovation, we take photographs and document the items in the old kitchens and bathrooms that will be disposed of.

We do the renovation. Upon completion, we have disposed of $200,000 of kitchens ($2000 x 100) and $100,000 of bathrooms ($1,000 x 100).

Tax $mart Tip #13 Assets abandoned during the renovation of an income producing property can result in a huge tax benefit. If you are purchasing an income producing property that you will be renovating, then this strategy can result in huge tax savings.

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Investors using Debt Service Coverage, instead of income, to buy Investment properties By: Lisbeth Rivas, Mortgage Advisor

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ith the US housing market becoming more stable over the past years there have been new investor products to hit the mortgage scene. As many still recover from the effects of the 2008 recession, some investors can find it difficult to provide traditional forms of income; this is where Debt Service Coverage (DSC) shines bright. Which begs the question. What is this Debt Service Coverage I speak of ?

It Requires:  The typical 20% down needed like

most investment products.  620 minimum fico score  Minimum least 12 months reserves

If you have all these items, this maybe the right product for you.

Well it’s quite simple instead of asking for traditional forms of income such as W2s, tax returns, profit and loss sheets, etc. The bank requires that the average rental amount covers the mortgage payment and your good to go. Now don’t start jumping out of your seats just yet.

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So, who should look at using a product like this?

If you are looking to purchase some investment properties but your traditional forms of income don’t reflect enough or you, like many Americans, have a ton of debt then I would consider this product. Now that your armed with this information go make that phone call so you can be on your way to your next investment property!

About Lisbeth Mortgage Advisor Lisbeth Rivas has extensive experience in the banking and real estate industry. She obtained her real estate license at 19 and became the Assistant Branch Manager of a major bank at 21. Lisbeth made the move to Province Mortgage Associates in October of 2018, because of their vast array of products, “5-Star” reputation, and the fact that their employees provide unprecedented peer support. Lisbeth resides in Bethel, loves spending time with her family, traveling and watching the Chicago Bears!

Contact Lisbeth: 203-617-7528 lrivas@provincemortgage.com

NMLS # 1383789 PMAI NMLS # 2861

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Are you and other real estate professionals having issues with bad tenants, government agencies or tired of witnessing the swarm of proposed laws targeting your profits and helping protect non-compliant tenants?

Have you ever considered organizing a local property owners and investors group in your area? CTPOA is looking for a few quality individuals with great reputations that can step up and become local leaders in their real estate market.

We will provide start-up funding, association management, social media postings, mass marketing, legislative advocacy, and speakers for events to attract new members to the organization.

Seeking local leaders for New London - Groton, the Naugatuck Valley and Litchfield County.

Interested? Contact us 888-610-4710 info@ctpoa.com

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One of the most frequently asked questions is what's the difference between a FICO Score and a Vantage Score?

850 but they differ in how they weigh some aspects of a consumer’s credit profile and history. For instance, percentage of available credit, number of recent Inquiries, late payment history each has a different measure on the consumers score but, in the end, the overall credit score for that consumers score is fairly consistent.

It is our experience that Vantage is beThe simple answer is today, there is little coming the more popular model as afterdifference between the two scores. Fico all it is owned by the credit bureaus themstands for Fair Isiac Corporation and is a selves. privately-owned company whereas Vantage is owned by all three major credit buVantageScore 4.0 Score reaus.

Distribution They both use a score range of 300 to

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CTPOA WANTS TO MAKE AN

We are pleased to provide a great new resource for Connecticut’s Property Managers and Landlords.

We have approval to operate the Landlords Collection Agency here in Connecticut and we are now able to place tenants that owe outstanding rent into formal collections.

Collections vs. Small Claims Court  Small Claims Judgements no longer appear on credit reports.    

Less expensive to use Landlord Collections is automatic denial for public housing (Most Authorities) Appears as Negative Rental Performance on Tenant Tracks Reports.

Credit Monitoring services notify tenants of a change in their credit report

Contact us for details 1-800-369-6153 or email: info@ctpoa.com Conditions apply—debt must be from an LLC or Corporation to upload to Equifax.

Statute of limitation to file a claim—3 years for oral leases and 6 years for written Filing fee, CTPOA Members $25 per file and 33% of monies recovered. NonCTPOA Members $50 to file and $33% of monies recovered.

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