Palouse Living, November 2017

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Tips for first-time

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November/December N ovember/December 2017 2017 Moscow-Pullman Moscow-Pullman D Daily aily N News ews & L Lewiston ewiston T Tribune ribune

Home is not just a place, it’s a feeling.

Everyone has goals, but not always a plan to reach them. We can help you find home financing options to meet your needs, whether you’re: • Purchasing your first home • Looking to buy a second home • Interested in buying an investment property And, with our PriorityBuyer® preapproval, you can shop for your home with confidence.

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Information is accurate as of date of printing and is subject to change without notice.

Wells Fargo Home Mortgage is a division of Wells Fargo Bank, N.A. © 2016 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801. AS3812380 Expires 09/2018

| November/December 2017 | Moscow-Pullman Daily News & Lewiston Tribune

Palouse Living

First-time real estate investors tips MetroCreative

R

eal estate can be a good investment that helps build wealth and secure a financial future. But investing in real estate can be risky, and it’s important that first-time investors consider a host of factors before deciding to delve into the real estate market.

can meet that 20 percent requirement, but also ensure they have enough capital left after making their down payments to address any repairs that need to be made. If not, they might have trouble attracting renters willing to pay enough in rent.

Interest rates

Current finances

Prospective real estate investors may be surprised to learn that investment property loans are often subject to higher interest rates than those for home buyers borrowing to purchase a primary residence, says Quicken Loans. Investors should not count on getting the same or better interest rates for their investment properties that they did when buying the homes they currently live in.

Real estate can potentially yield big returns, but these may only materialize after investors spend ample amounts of money refurbishing or even maintaining their investment properties.

Prospective investors without the capital on hand to finance repairs or routine maintenance may find it difficult to make their properties appealing to potential tenants, which can make it harder to meet mortgage payments. Prospective investors who already have sizable debts, be it consumer debt or existing mortgage payments, may want to pay down those debts before investing in real estate.

Financial reserves Some lenders may require that prospective investors have sizable financial reserves before they will lend them money to invest in real estate. Some may require that borrowers have several months’ worth of reserves to finance both their personal lives and their investments. If a 20 percent down payment would make that impossible, then prospective investors may want to wait a little longer to invest and save more money until their financial reserves

Down payments According to Wells Fargo, mortgage insurance does not cover investment property, and loans typically require a minimum down payment of 20 percent of the value of the property. So prospective investors cannot count on mortgage insurance to finance their investments in real estate. Investors should not just make sure they

would prove more acceptable to lenders.

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Moscow-Pullman Daily News & Lewiston Tribune | November/December 2017 |

How to invest in real estate if you have bad credit realtor.com // Jeanne Sager

I

t seems like every time you turn on the television, there’s a new home improvement show dedicated to flipping houses and making bank—a popular way to invest in real estate. Investing in real estate and turning it for a profit might be tempting. But if your credit score is below 601—the number the credit bureaus mark as the dividing line between “fair” and “bad” credit—you might have a tough time finding funding.

So is investing in real estate out of the question for someone in that bunch? Not necessarily.

Buying an investment property vs. buying your own home No matter what you’ve seen on TV, purchasing real estate as an investor is a lot more complicated than doing so as a homeowner if you are turning to a lender to help finance the deal.

“Those looking to finance the purchase of real estate as an investment—as opposed to a primary residence—can expect a higher interest rate and more stringent lending criteria from lenders before getting a mortgage,” explains Bruce Elliott, president of the Orlando Regional Realtor® Association and a broker associate with Regal R.E. Professionals in Orlando, FL. Lenders typically require more money down and a better credit score for a real estate investment loan than for an owneroccupied home loan.

“They also look very carefully to ensure that investment home buyers are financially capable of sustaining the mortgage over an extended period of time in the event that the property doesn’t resell, and they even have formulas to calculate for shortages in expected rental income,” Elliott explains.

Palouse LIVING Your resource for buying, selling and enjoying your home on the Palouse.

Can you invest in real estate with bad credit?

Unless you have spare cash or a loan from a friend or relative to finance your investment, obtaining a loan will likely be difficult.

That said, there are other options to help you one day become a real estate investor, Elliott says.

Improve your credit score. Resolve any collection-related issues uncovered by a credit check, and pay down existing balances. And be smart about other investments: Now is not the time to finance additional purchases such as a car or to open additional credit accounts of any type.

Find a hard money lender. No, this isn’t a back alley dealmaker. Hard money lenders are private individuals or groups who will put up cash for real estate ventures, and they are often more amenable to making a deal with someone who has poor credit. Of course, there will be some drawbacks: “Generally, these lenders will require anywhere from 40% to 60% down to purchase or close outright,” Elliott notes.

Skip putting money down. It might sound like a pipe dream, but Elliott says this is often the story behind those roadside “home for sale” signs that specify “cash only.” “The investor simply has purchased an option or received permission from a homeowner to try to sell the home,” he explains. “The investor makes money either from a back-to-back closing or from payment directly from the ultimate buyer.”

If you want to invest in real estate, bad credit can be a stumbling block, but it doesn’t have to derail the whole train.

Jeanne Sager has strung words together for the New York Times, Vice, and more. She writes and photographs people from her home in upstate New York.

Follow @JeanneSager

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PALOUSE LIVING

Prevent frozen pipes while traveling this holiday season MetroCreative

D

uring winter, many people plan vacations to warmer climates so they can enjoy a relaxing respite from the snow and ice. While travelers are enjoying the sand and surf, their homes may be in danger from extreme weather conditions.

According to the State Farm Insurance Company, frozen water pipes affect a quarter-million families each winter. Both copper and plastic pipes can freeze. State Farm notes that a single 1/8-inch crack in a pipe can result in up to 250 gallons of water leakage per day. Flood water can contribute to serious structural damage, mold and a host of other problems.

Water expands as it freezes, so pipes can be put under strain if the pressure from expanding water has nowhere to go, offers the American Red Cross. Pipes that tend to freeze most frequently include those exposed to severe cold, such as outdoor hose bibs, swimming pool lines and water sprinkler systems.

However, even pipes inside a home, such as those in unheated areas or those that run against exterior walls, can freeze.

To avoid returning from a relaxing winter escape to find a home in need of repair thanks to frozen pipes, homeowners can take these steps. ¡ Add insulation to attics, basements and crawl spaces to help maintain higher temperatures within the areas where some water pipes may run. ¡ Pipes themselves can be insulated with special coverings or sleeves. Homeowners also can explore heat tape or wrap pipes in heat cables controlled by their thermostats. ¡ Disconnect outdoor hoses, and drain water from pipes leading to outdoor faucets. Turn off the indoor valve to shut off

(continued on page 7)

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Moscow-Pullman Daily News & Lewiston Tribune | November/December 2017 |

Easy home maintenance tasks to cross off your list realtor.com // Holly Amaya

I

f you’re anything like us, you’re getting ready to hunker down for the impending holiday rush as fall begins its inevitable acceleration toward winter. But before you throw the turkey in the deep fryer and binge on a Lifetime holiday movie marathon, take a few minutes to protect your home against winter’s chill.

We’ve got you covered with our handy checklist of home maintenance chores to tackle this month. Read on for details about where to start, and whom to call if you need reinforcements.

1. Check your smoke detectors Daylight saving time officially ends at 2 a.m. on Sunday, Nov. 5. That’s the perfect time, according to the American Red Cross, to test your smoke alarms and change the batteries (which you should do twice a year).

DIY: Just press the “test” button on your alarm, and ensure it sounds. If you don’t have alarms, install them ASAP (at a minimum, you should have one on every level of your home, in all bedrooms, and adjacent to sleeping areas). Your local building codes might have additional requirements.

Call in a pro: You don’t need a pro to test your alarms, but if you have an issue and need to replace one, an expert can help.

Outsourcing the installation of hard-wired smoke detectors will run you $80 to $120, depending on your location.

2. Take stock of your emergency kit If the recent hurricane and wildfire season has taught us anything, it’s that you can never be too prepared for a natural disaster. Get ready by testing and replacing the batteries in your flashlights, stocking up on extra batteries and candles, and grabbing a few extra lighters and boxes of matches to have on hand in an emergency.

Update your 72-hour kit—or make one if you don’t already have one. Make sure you have some food stored: Fill up a few 5-gallon jugs of water and stock up on canned goods in case you go without power during a winter storm. And if you have a camping stove, give it a tuneup and make sure you have enough fuel to cook without power.

DIY: Kick-start your emergency kit with a starter set from the American Red Cross, or go deluxe with a kit from Costco, which will feed you for two years.

3. Block out pests When temperatures drop, rodents and no-see-ums seek out warm places to hunker down (just like us). But unlike us, many of them can fit through holes the size of a quarter. Take this

opportunity to give the exterior of your home—and especially your roof—a once-over. Replace damaged tiles and attic vents, and seal any holes around pipes and cables that run into your house.

DIY: Use wood putty, flexible brick, or concrete caulking to patch holes. And make haste, since filler takes longer to cure during colder months.

Call in a pro: If you need an assist, hire a painter ($20 to $35 an hour) or handyman (an average of $77 an hour) to patch exterior holes.

4. Replace weatherstripping Check weatherstripping and caulk for any small gaps, particularly around windows, doors, vents, trim, or siding. For larger cracks or holes, use expanding foam, which you can find at any home improvement store.

DIY: Turn off the lights in your place, and walk the perimeter at night with a flashlight; run the light along doors and windows to illuminate large cracks. Take a piece of your existing weatherstripping with you to the hardware store to ensure you buy the right replacement.

Call in a pro: A home audit that finds all the nooks and crannies where energy escapes costs nearly $400 on average. Painters ($20 to $35 an hour) will seal gaps with caulk.

5. Schedule a pre-Thanksgiving plumbing checkup Now’s a great time to call a plumber to clear your pipes before Thanksgiving guests start pushing uneaten turkey and stuffing down your garbage disposal. (That’s part of the reason plumbers call the day after Thanksgiving “Brown Friday.”)

“A lot can go wrong with your drain lines when you are cooking and cleaning and not paying attention to what goes down the drain,” says Janet O’Dea of Powers Plumbing in San Diego. “The well-meaning family members who offer to do the dishes sound so nice until the line gets clogged with mashed potatoes.”

DIY: To avoid a clog in the first place, put kitchen scraps (especially starchy foods, which expand) and other debris into the trash and use your disposal for crumbs only.

“Grease should never be allowed to go down the kitchen sink drain, because it will coat the pipes and create sludge,” O’Dea says. “We recommend that you put grease into an old container like an empty orange juice or soup can, let it congeal, and then throw it in the trash.”

Based in San Diego, Holly Amaya is a writer, lawyer, and communications strategist. She writes about real estate, legal, lifestyle, motherhood, and career issues. Follow @hollyamaya

| November/December 2017 | Moscow-Pullman Daily News & Lewiston Tribune

Palouse Living

Prevent frozen pipes while traveling (continued from page 5) the water supply to the outdoors, but leave the outdoor bib in the “open” position to allow water to drip and relieve pressure should some freezing occur. · The same technique can be applied indoors. A trickle of hot and cold water can keep pipes from freezing during extremely cold snaps of weather. · Set the thermostat to a consistent temperature, ensuring that the temperature indoors will not drop dramatically overnight. The temperature should be no less than 55 F. · Open cabinet doors to allow heat to reach under sinks and appliances. · Check around the house for drafty areas that can contribute to colder temperatures in garages, basements and crawl spaces. · Consider relocating pipes that are exposed to the elements to provide increased protection. · Ask a neighbor to periodically check on the house to ensure that pipes are in good working order.

Homeowners who know where the main water shut-off valve in their homes is located and who act quickly can prevent serious damage should a pipe burst. In such instances, leaks can be contained and extinguished as quickly as possible.

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