This blog series will be an 8 part discussion that will explain the basic steps to purchase a home here in Alaska.

After reading this series, you should have the basic understanding of what it takes, what is required from you, and all parties involved in the home purchasing process.

The first step to buying a house is to get pre-approved, or pre-qualified with a lender or banking company.

Why is this important? Looking for a house without pre-approval is like hunting without a working rifle. You don’t know how big you can go (purchase price), if you need to work on anything (credit, job length, etc.), or a slew of other factors that could prevent you from buying a house.

There are many different lenders who basically do that for you. My recommendation is typically to go with a local lender or a lender that offers a specific program that fits your needs and desires. For instance, if you’re going to use an FHA loan, most lenders can typically do the same interest rate, however, some may be able to offer you no origination fee, saving you thousands of dollars. If you want to purchase a foreclosure, you may need to get an FHA 203K loan, or use Alaska Housing Finance Corporation (AHFC) for their renovation loan.

If you don’t know what type of loan program you should use, consult a knowledgable licensed Real Estate agent to help you make an informed decision. Without knowing what you want to do, there is no clear path.

Four basic premises of pre-qualifcation are:

1. satisfactory job history or length of employment
2. verifiable income
3. suitable DTI (debt-to-income ratio), and
4. satisfactory credit score.

If you have had a job for the last two years, or have just gotten out of college and into a career position, 580 credit score or higher, you should be on your way to buying a home.

For more information, please contact our local Alaskan Realtor James Cash at 907-360-7448 or e-mail jamesfcash@gmail.com for more information.

            That’s a solid maybe. If you’ve seen recent Hollywood movies like “The Big Short” where air-headed Realtors converse over cocktails lavishly laughing about how much money they make without a clue how the game is played, you probably have a bad representation of us.

            There’s also the real-life version, driving around in a brand new Audi or Mercedes, who don’t seem to know how to tie their own shoes. This exists even in our great state of Alaska!

            While these examples of fictitious and real-life personas do exist, do they really get paid too much?

What Is Their Job?

            A discussion we should have first is: What is their job? Typically, it is to represent a homebuyer or home-seller in the process of buying and selling homes. This is where the term “Buyer’s Agent” and “Listing Agent” come from.

            It is notable to mention that typically, a normal person’s biggest purchase in their lives will be real estate related. It would then only make sense that some of the biggest commissions to be collected in a sales job would come from real estate.

            Let’s dissect this a little further though. We know what their job is, but really, what do they do for all that money?

Buyer’s Agent

            This is the guy or gal that is helping you buy your first home, or your next investment property. Their sole duty is to represent you as a buyer during the process of closing a prospective home. This can also be more time consuming than representing a seller. Typically, the process goes like this:

·      Identifying a property that fits your specific criteria, including:

o   Performing CMA’s to make sure the property is priced appropriately

o   Performing cost analysis sheets if the property is an investment

o   Performing projected gross and net proceeds if the property is a flip

o   Finding the best neighborhood based off of your specific needs

·      Help identify specific loan programs that are best for your specific needs

·      Doing their homework based on market knowledge to form an offer

·      Presenting the offer in the most appealing fashion, and negotiating:

o   Closing Costs, Terms, Repairs

·      Connecting you with Home Inspectors and Contractors who are the best in their field for the prospective property

·      Connecting you with legitimate title companies

·      Making sure all parties of the transaction abide to strict timelines and deadlines as to not delay closing

Basically, if your buyer’s agent is doing their job, you say, “I want this property, make it happen” while you sit back and they guide you for every step. If your Agent is not doing this, you’ve picked the wrong one.

Seller’s Agent

            This is the individual who helps you sell your home. Their sole duty is to price, market, and negotiate the sale of your home. This can be a harder task than being a Buyer’s Agent depending on the market, and it most likely will result in a direct cost to them (through marketing and advertising). How do you know if your Realtor is doing a good job? They should be doing the following:

·      Appear professional in your first introduction or interviews and well established in their market knowledge and abilities

·      Adequately present you with CMA’s (comps) for your property to indicate they have found the HIGHEST price for your home that will still let it be competitive on the market (overpriced homes don’t sell)

·      Market your home, including:

o   Professional Photos

o   Flyers

o   Signage

o   Internet Marketing

o   Direct Mail Marketing

o   Lead Capture of prospective buyers

o   Open Houses (though studies show these aren’t that effective)

·      Easy accessibility for ALL PARTIES (if your Realtor doesn’t answer their phone for you, will they answer for an eager buyer ready to write an offer?”

·      Knowledge and use of technology, including: Microsoft Office, Social Media Platforms, MLS systems, Website monitoring, Client Monitoring and integrated calendar scheduling

·      Firmly negotiating incoming offers with your best interest in mind

·      Keeping you up to date with the market

·      Keeping you up to date and on timelines for the transaction

·      Knowing what to watch out for during your transaction (weak offers, weak lenders, weak buyers, potential downsides to offers and contractors or companies to avoid, etc.)

If your Realtor is not doing ALL of the following, you may have chosen the wrong one!

What’s The Verdict?

            Poor performing Realtors are definitely overpaid! Whether they have a big name and do volume just because they can, or they are just starting out, you can definitely over pay for a poor service.

            If you’re Realtor is on point with their Reaxl Estate game, you’re not over paying at all. I can tell you from personal experience; I have experienced more joy and more stress in Real Estate than anything else I’ve ever done in my life. My phone is almost never off, and I try to be accessible at all times for the convenience of my clients while maintain a family life. 5AM phone calls, and showings at 7PM on a Sunday are the easy busy-work tasks that a solid Realtor has to deal with.

            Before you choose to hire a realtor, ask them the tough questions before handing them over their commission. Make them work for it, but be polite. Interview multiple candidates for the job until you’re confident you’ve found the right help!

If you’re looking for a local Realtor to assist you with buying or selling in Anchorage, Eagle River or Wasilla and Palmer, call or text James Cash today at (907)-360-7448 or e-mail at jamesfcash@gmail.com

Why using a Realtor is amazing!

            Have you ever wondered why some people use a Realtor / Agent and some people shy away from it? Have you also wondered why we just don’t use lawyers? These are all great questions that we will answer in today’s blog.

            Firstly, let’s get a couple of key fundamentals out of the way. In Alaska, a person who is licensed to assist in the sale of Real Property (AKA Real Estate) is called a Licensee, not an Agent. This had to do with some legal semantics about labeling and advertising, but for all intents and purposes, please call us whatever makes you feel best! Agent does sound cool though!

            Secondly, not all Real Estate professionals in the state of Alaska are “Realtors.” Realtors are a group of licensed individuals who are upheld to a higher level of ethics and standards. Becoming a realtor requires additional fees and certifications (including continuing education hours) that set them apart from others. I think about this like I do Personal Trainers in the fitness industry. Anyone can go online and get some cookie cutter, low-level certification. Then there are those who have to graduate college with a 4-year degree in order to get their certifications. Obviously with a higher standard of certification usually comes a higher level of knowledge, service and commitment to the profession.

(P.S. I am a firm believer that there are amazing Real Estate professionals who are not Realtors even though I am a licensed Realtor.)

            If you’ve watched movies like “The Big Short” or have succumbed to the stereotypical image of a flashy salesperson stumbling out of their Audi draped in Gucci sunglasses while just getting off of their Bluetooth, you may be getting the wrong image.

            Just like with any profession, whether a doctor, lawyer or dentist, there are people who fit the bill of a Hollywood heel. For the most part, in my experience, Realtors in Alaska are normal people living normal lives who care more about people than money. I think it is very easy for a person to stereotype some one who is professional that obviously looks and dresses the part. Would you hire a doctor who’s about to do heart surgery that rolls up to your consultation in a rusted Toyota? Or would you go with the suit and tie doctor driving up in his luxury car, with whom you’ve only talked to his assistant at this point? Probably the professional who has made hard work, through his expertise, let him make a good life for himself.

            Typically, Realtors (Agents) are classified into two categories. There are Buyer’s Agents, and Sellers Agents (commonly referred to as a Listing Agent).

            Buyer’s Agents typically represent the prospective buyer of a property. Seller’s Agents typically represent the seller on a prospective piece of property or home.

            It is important to note that in the State of Alaska a Real Estate Professional can be dual-licensees. This means that he or she can represent both the buyer and seller. In some states this is illegal because it is very hard to represent both parties fairly and adequately with fair, and equal representation. If you’re looking at a specific piece of property, I would ask your Realtor if he or she is also the listing agent. You might want to consider getting representation for your side of the deal specifically. Why?

            A Seller’s Agent is representing the seller’s best interest, and has most likely established that relationship before yours (relationships are important in any type of legal transaction). The seller’s best interest is to get the most amount of money for their property on the best terms possible. Re-read that last sentence and consider it before you think about using a Realtor as a dual-licensee.

            It is a Buyer’s Agent sole responsibility to find their client a conforming piece of property or home, that falls in line with their ideals, needs and wants and obtain it for the lowest price, on the terms that best suit the buyer.

            The cool thing about using a buyer’s Agent is that typically all the commissions paid out is from the Seller’s side of things. This means that using an Agent as a Buying Agent is free to you!

Why don’t people just use lawyers?

Lawyers usually work off of an hourly rate (anywhere from $175-$400 an hour), and they do not have as much access to real estate information that licensed Real Estate Professionals do. Typically in a very large deal, Real Estate Lawyers can be brought in to provide specific assistance.

Why use an agent at all?

            That’s’ a very good question, and one that has a solid answer. A lot of people try to do what’s called “For Sale By Owner.” This is where they cut out the middle-man and try to work directly with a buyer in attempt to save themselves money.

            While, in theory, this sounds like a very good money saving effort, there are major issues with it. Unless a person is very familiar with land and home contract laws, specifically in that state, it can get messy. There is a reason why states have locally licensed individuals to take care of things like stock trading, real estate and legal practices. Very intricate laws mixed with confusing contracts can hold a homeowner to a lot of liability.

            Just because you claim, “I didn’t know,” it won’t help you out. If you make a mistake because you did not know what you’re doing, it could cost you thousands of dollars, not to mention legal ramifications that result in fines, and even jail time.

These are just a few of the reasons why using a local Realtor in Alaska could benefit you big time! They have your best interest in mind and can save you thousands of dollars and maybe even save you from making some bad Real Estate deicions!

Interested in working with a local Realtor? Contact James Cash at 907-360-7448 or jamesfcash@gmail.com

Yearly Home Maintenance in Alaska

If you're a fellow homeowner, investment property owner or property manager, you probably know all about unexpected expenses in regards to property maintenance. In this blog, let's look at a short list of some simple things we should be doing yearly to keep deferred maintenance a thing of the past.

Roof Maintenance

Most Alaskan homes are asphalt composition shingle roof. Mixed with out many trees of various genus’s, especially birch trees with floating leaves, we tend to collect a good portion of falls short-lived foliage on our roofs. It's important to clean them yearly at the end of fall, paying close attention to moss build up. Also remember, it is better to gently scrape asphalt shingle (if there is gunk build up) than it is to pressure wash, as pressure washing will greatly deteriorate the lifespan of your shingles.

Also, let’s not forget about our roofs in the wintertime. Did it snow more than 12 inches in 24 hours? Or is it really heavy, wet snow? SHOVEL IT! Or pay someone to shovel it. Trust us on this one.

Gutter Maintenance

Yes, this is a separate section of maintenance from the roof. Make sure your gutters are scraped clean and free from any blockage, preferably at the start of the first snow. By Anchorage's first snow, most leaves should have fallen and you're clear to clean them for the winter.

Heating System Inspection

Every landlord will tell you, heating and plumbing issues are the worst. They often arise when it's most inconvenience and bring the highest cost to homeowners for repairs. Avoid this slippery slope by getting your heating system and boiler inspected every year by a trusted heating or mechanical company. Inspections are relatively cheap, and help establish a working relationship with a company or handy man that knows your system.

Grounds Maintenance

Probably one of the least fun things on the list - pick up your garbage. I prefer to do this twice a year at least. One at the end of break-up (when the snow and ice first melts), then again right before the first snow. This will help keep your property pristine giving it that curb appeal that gives you pride of ownership in your home. If you skip out on this step, especially before winter, your spring will look like a dumping ground for all of Anchorage!

Crawl Space

Once a year, it's important to inspect your crawl space. Yes, you'll have to brave yourself against claustrophobia and arachnophobia. Don't worry though, inspection of crawl spaces rarely leads to a paramount of a JRR Tolkien book - you'll be fine! Look for random leaks, foundational issues, drainage issues on the exterior of the building and possible infestations. Brave going down into the crawl space once a year and you'll be glad you did!

Exterior maintenance

Unless you're doing a major overhaul, there isn't much to exterior maintenance. Look for loose siding, chipping paint and small imperfections to your buildings' exterior that could worsen over time. Take care of what you can with well-done cover jobs, and hire it out if you can't do it well. I've seen loose side boards lead to wood rot that cost a lot of money to fix. Don't let a small exterior issue turn into a contractor’s gold mine.

There you have it! Follow these easy steps to secure and maintain your building for the best long-term results. I'm a huge fan of the saying, "Pay today, or pay tomorrow."

Now you know what you should be doing, turn your "shoulds" into "musts" and you'll avoid big headaches later in your properties life.

For more informations, or if you have questions about Real Esate in Anchorage, Alaska, please contact our local Realtor James Cash at (907)-360-7448 or e-mail at jamesfcash@gmail.com

Why A Fourplex Could Be Your Best Investment

            In this day and age, there is always speculation what is the best investment. On one side of the coin, wall street is telling us that diversification of our portfolio over many blue chip stocks is our best bet. The government tells us investing in treasury bonds is a sure way to beat inflation and a safeguard for our money. Then there are realtors like myself who are advocating for investing in real estate. But who’s right?

            The truth is, all of us. Depending on your financial goals and the amount of assumed risk you want to carry, any one of these options could be great for you. Personally, I got tired of riding the stock waves years ago and cashed out on the upswing by sheer luck. Many of us were not so lucky. I entered the Anchorage Real Estate market not to purchase my first home, but to invest.

            Following Robert Kiyosaki’s (author of Rich Dad Poor Dad) model of the “Wealth Building Phase,” I knew that working my corporate job I had to be highly leveraged just starting out in order to create some sort of financial future for myself. I was hard pressed just to save any sum of money every month after my bills were paid. At that time, I lucked into investing because I heard some older gentleman tell me to, “Buy a fourplex and live in it until you’re tired of it, then buy another one.”

            I didn’t know that his words carried such wisdom. He was a man I respected and knew he had done well for himself. He was by no means the next Donald Trump or Warren Buffet, but he was not a poor man by any stretch of the imagination. In that one sentence, he ignited my passion in real estate and my mindset shifted. Those words changed my life.

Why Is Investing In A Fourplex So Great?

Rent Free

            Aside from being the king or queen of the quarters (if you have a coin-op laundry, you get to collect a kings ransom in arcade funding every month), it enables you to live very cheap. You get to rent out 75% of the units, and can even live rent-free while some one else pays your mortgage. Even if you’re not living entirely rent free, you’re monthly payment to live in a roof-covered-sleeping-place is very low. This enables you to save your money, or pour it back into your investment.

Highly Leveraged

            For an FHA loan, you only have to put 3.5% down to get into that property (VA loan – Veterans/Military – is 0%). That’s crazy! In 30 years, you could control half a million dollars in Real Estate by putting down only $17,500! Ok – things will eventually go wrong and you’ll have to put more capital into the building so it doesn’t fall apart, but a man can dream! Even with capital expenses and regular upkeep, your investment and ROI (return on investment) is insane. Not to mention, in 30 years, your building will most likely inflate beyond the initial purchase price.

Inflation or Deflation – Who Cares?

            When you invest in treasure bonds, or even stocks for that matter, it can be a race against inflation. With the unregulated printing of U.S. Dollars by the federal reserve, exacerbated by the greed of the government to deficit spend, inflation is a very real threat against protecting your assets. Being so HIGHLY leveraged, you really don’t have to care about inflation, or even deflation for that matter – or a combination of both.  I like to use the following example:

Lets say the U.S. Dollar is worth $1 (One Dollar).

You Purchase a home for $100,000. You buy it with an FHA loan, at 3.5% down, investing only $3,500.

Printing U.S. Dollars unregulated inflates the actual cost of goods and commodities, therefor prices of everything goes up, even your home.

Due to this, your home is now worth $200,000 in 30 years.

The Actual Value of a U.S. Dollar is now worth $0.50 (50 Cents). This is because inflation of prices deflated the value of the dollar. Example: They say an ounce of gold has always bought a nice mens’ designer suite. In 1930 that may have been $20 – the price of an ounce of gold. Today, it may cost around $1,300. Prices of goods have inflated, and the true value of a dollar has gone down (deflated).

The Actual Relative Value of your home, in comparison with when you bought it, is $50,000. (Sad I know).

You only spent $3,500 and have made it grow by 1,423%. You’ve managed to leverage your money, and even in the worst conditions of economic management by our governing bodies, you beat the system. Congratulations!

A Roofed Stepping Stone

            I tell people live like you are still renting when you move out of your fourplex, and don’t take any income from it. Pretend it’s not there – it’s your magical investment in a far away place where you can’t harm it’s money making potential!

            Some day, when you decide you want to move into other endeavors, opening your own business, or getting into more Real Estate investing, you have a little nest egg you can leverage. Take out a HELOC (Home Equity Line Of Credit) to play around with, or sell it and 1031 Tax Exchange into a bigger, better cash-flowing commercial property. The possibilities are really endless.

P.S. You could also buy a fourplex when your kid is 1-5 years old and tuck it away so it pays for their college, and they have a place to stay when they graduate and decide not to work!

Tax Benefits

            The tax benefits of home ownership are real. The tax benefits of owning a fourplex are even more real! Interest, depreciation, repairs, legal and professional services just to name a few! I don’t claim to be a CPA, so don’t ask me the specifics here. Ask your accountant about all the amazing things your fourplex can tax shield you from!

These are not all of the amazing things a fourplex can do for you, just scratching the surface. Don’t think you only have to go big. Start with a duplex if that’s your comfort level (though they don’t cash flow as well and are a quasi-investment). Don’t take my word for it, just do some research of your own and you’ll soon see the benefits.

For more information about fourplexes, investment properties, multifamily properties or Real Estate in Alaska, contact our local expert James Cash at (907)-360-7448 or jamesfcash@gmail.com