cool roof

Uniflex roof coating lowers electric bills and helps environment

How to have a Lower Electric bill: New roofing material

Lower electric bills are something we all would like.  Your roof is a huge source of heat.  Traditional asphalt shingles heat up.  You can cook an egg on our hot Texas roofs.  With the right construction, your roof can help you have a lower electric bill.  New roof coatings are available today which create energy efficiency and are good for the environment.  We will explore the difference between traditional asphalt shingles and new polymer materials which are also called cool roofs.  Uniflex coating is one such material you can use.

Asphalt Shingles Trap Heat.

Asphalt shingles are used because they are less expensive and relatively easy to install as compared to other traditional roofing materials.  However, asphalt shingles absorb light and generate a lot of heat.  They can reach summer temperatures of 156F for black shingles and 138 F for white shingles.   The shingles remain hot into the evening hours.  Asphalt shingles contribute to the urban “heat island” effect.  The urban heal island is the phenomenon of urban construction trapping heat and increasing the air temperatures relative to rural environments.  The fact that cities take longer to cool in the evening is directly related to the urban heat island effect.

Asphalt Shingles Negatively Impact the Environment.

Asphalt shingles are composed of 20% asphalt with the balance being made up of granules.  The granules are there to protect the asphalt to extend its useful life.  These granules shed over time, collect in gutters and leach metals into water.  The negative environmental impact does not stop there.  Approximately 11 million tons of asphalt shingles end up in a landfill each year.  Asphalt naturally contains polycyclic aromatic hydrocarbons (PAHs) some of which are carcinogenic (cancer-causing) and may put recycling workers at risk. These types of roofing materials are outlawed in other parts of the developed world.

Advantages of Uniflex Coated Roofs

New polymer coating systems have been developed for roofing materials that have numerous advantages over traditional roofing materials.  These advantage translate to lower environmental impact, lower cost of installation and maintenance and lower overall operating cost of the building.  Some of the advantages are

  1. Lower electric bill. The polymer coatings can reflect up to 85% of the radiant energy.  The roof temperature can be up to 100F cooler than black asphalt.  This lower heat directly translates into lower utility bills.   It reduces the urban heat island effect by reflecting the radiant energy back into space.
  2. Environmentally Friendly. On virgin roofs, the polymer system is applied to the roofing surface.  With existing asphalt roofs, polymer system coats existing asphalt and extends its life, in some instances up to 40 years.  Chemicals are not leached into the water.  Water run-off can be collected.  The material does not go to the landfill.
  3. Lower installation cost. The coating system can be applied for around $2 per square foot.  It is less labor intensive.  It does not require lifting heavy materials or heating tar.  There is no need to remove and dispose of the existing shingle roof.
  4. The polymer system expands and contracts with the roof thus reducing the possibility of cracking. The systems can be warrantied for 10 years. Maintenance involves putting on a new coat to extend the roof life.
  5. Storm resistant. Because the roofs are coated, shingles do not come off in the wind.  Hail does not damage the coating.
  6. Light weight. The polymer system weighs ounces per square foot rather than 2 pounds per square foot.
  7. Tax advantages. The polymer coatings can be considered preventive maintenance and in many instances are fully tax deductible the first year.
  8. Since the material is Energy Star certified, many areas offer rebates on installation.

New construction methods and materials are not only more cost effective; they are environmentally responsible.  Uniflex coated roofs lower electric bills.  Jodywallrealtor.com and Cincero Investment Properties, Inc. build for the future.  Your roof can help provide a lower electric bill.

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refusal to pay

How to handle a tenant refusing to pay repairs

Tenants who refuse to pay repairs

I am going to share how I deal with tenants who refuse to pay their portion of repairs.  If you are a landlord long enough, you will encounter tenants who do not want to pay for repairs.  It can be a stressful time.  We alleviate the stress because we have a system to follow when the tenant refuses to pay for repairs.

The Repairs are Completed

One night our tenant called regarding a plumbing issue. They said the toilet was backing up and they could not get it to flush properly.  The next morning we called our plumber and informed the tenant when he would arrive.  Our property manager was there to let the plumber into the house.  The toilet backed up because it was clogged with an abundance of toilet tissue.  Nothing in the piping was defective.  According to our lease in this situation, the tenant is responsible for the first $50 of the service call.  We informed the tenant of the $50 responsibility.  He said He understood was would pay his portion later that week when his rent was due.

The Tenant Refuses to Pay Repairs

The rent came but no late fee included. We reached out to the tenant.  In the meantime he had decided he ‘disagreed’ with our assessment and decided he was refusing to pay the repair.   We informed him of his responsibility.  We followed our lease. We deducted the fee from the rents paid, and sent the tenant a Notice of Late Payment. We told him the $50 was due on the next rental payment.  In the notice, we quoted the section of the lease applicable to this situation.  The next month came and no payment of the $50.  We contacted the tenant who vigorously informed us of his refusal to pay the repairs.

The Escalation and Resolution

We sent another Notice of Late Pay and we reported to the credit agency notice of late/short pay.  The next month’s rent payment came with no additional money to cover the fee.  We followed our process and sent the tenant a Three Day Notice to Vacate, citing the appropriate section of the lease.  Upon receiving the Notice to Vacate, the tenant agreed to pay the money.

Conclusion

If we were to do this again, we would send the Notice to Vacate earlier in the process.  There was no need to drag the process out.  Our outcome was successful because we followed our defined process.

  • Our lease clearly defines the financial responsibilities of all parties with respect to repairs.
  • We go over the lease with our tenants to ensure they understand it.
  • We sent our standard Notices of Late Payment citing the lease and we reported the late payment to the credit bureau.
  • When the tenant did not respond, we sent our standard Notice to Vacate

To be successful as a Landlord, you need the right tools and the right processes.

We use our proven leases and letters and follow a standard process.  We know every tenant is treated fairly because we use the same process for each tenant. Don’t be confused what to do when your tenant refuses to pay repairs.

 

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Build to Save Energy

Homes that Save Energy and Money

SIPs are the 21st Century Building Material.

Build a home that saves energy and money .  Structural insulated panels (SIPs) are a high performance building system for residential and light commercial construction.  The panels consist of an insulating foam core sandwiched between two structural facings, typically oriented strand board (OSB).   Here are 6 reasons you should use SIP material in your construction project.

Reason number 1 SIP Saves Energy.

Heating and cooling is a major expense that is not getting cheaper.  SIP’s allow you can save 60-70% on you heating and cooling bills.  That equate to money in your pocket every month.
A 2000 square foot house in Miami can have an electric bill of $40 per month in summer.

Reason number 2 SIP construction is stronger.

SIP building is stronger than traditional stick building.
The wall and roof are stronger and it is easy to achieve designs that withstand 200 mph winds.
Reason 3 SIP Construction reduces waste.
SIP buildings are manufactured to plan at the factory to be shipped and assembled on site.
Traditional building uses raw lumber which is cut to need on the job site.
This process generates a lot of waste.
SIP material has a lower burden on the environment.

Reason 4 SIP Construction is faster.

Because the walls and roof are manufactured in the factory, assembly at the job site happens very quickly.  With the foundation in place, it takes three days to assemble the house and be in the dry.   Total construction time from the foundation can be as fast as 10 days.
Reason 5 SIP Construction uses less labor.  Because the building is made offsite, the number of people needed to construct the building onsite goes down.   Typically a crew of 1 experienced carpenter and 3 general laborers are all it takes.   With the high demand on skilled labor, SIP  construction saves tremendously on labor costs.

Reason 6 Mold, Pest and Flame Resistant.

One type of SIP uses Magnesium Oxide Board (mag board). Construction with this material is mag sip with flamenearly wood free. The resulting structure is therefore not susceptible to mold or rot. It has the added benefits of being termite free and very flame retardant. Mag board can be taped and bedded like sheet-rock and painted. That means no sheet-rock is needed for the interior.  This saves on waste and labor.

 

Conclusion
The 21st century consumer requires greater energy efficiency and environmentally friendly products.  SIP construction meets both of these demands.  So SIP building will ensure your home saves energy and money.  It is great for the environment and your health.

Like my Jody Wall Realtor Facebook page to follow our construction of environmentally friendly houses.

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tenant rent nonpayment

Tenant rent nonpayment- can I deduct the loss

I will discuss the tax implications  of tenant rent non-payment. You will learn what you can deduct and what you can’t.

Depreciation, Maintenance and collection expenses

Depreciation of the property is not affected by a tenant.  You claim depreciation regardless

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whether the property is rented or not.  Expenses incurred to maintain the property are also unaffected by the tenant payments.  Deductions for taxes, insurance and interest are unchanged.  Expenses incurred to collect rent are costs of doing business.  Mailing late notices, trips to the property or bank are all normal expenses to collect the rent.

Loss of Income is not deductible

You may not deduce the loss of profit for non-payment.  The profit would be in the income after expenses.  You never received the money as income so it was never yours to lose.  The money will not show up on the tax return.

Good Samaritan Pitfalls

No good deed goes unpunished.  If you lower the rent below fair market, you may lose your profit motive for owning the property.  If the tenant is a relative or close friend, reduction of rent may be seen by the IRS as converting the property to personal use.  If that occurs, then you lose your deductions for depreciation, maintenance, insurance and other associated business deductions.

You must maintain a business posture throughout the rent recovery process.   Do not let tenant rent nonpayment cause you to lose your tax deductions.

See also Late Rent Payment – three easy steps to resolution and

Collecting rent – three rules you must follow

 

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Obamacare Tax Code

How to Avoid Obamacare Tax: Become a real estate professional

 

Avoid Obamacare Tax: Another reason to become a real estate professional

Avoid the Obamacare tax and save 3.8%.  This strategy has a huge impact on your bottom line.  In my article How to claim Passive Loss Limitation Exemption on being exempt from the $25,000 passive loss limitation, I detailed the process on how to qualify as a real estate professional.  The Obamacare tax gives you another incentive to become a real estate professional in the eyes of the IRS.  Find out how.

Obamacare Tax Safe Harbor

The tax code provides a safe harbor for those who qualify as a real estate professional.  The entrance requirements into the harbor are as follows:

  • You must qualify as a real estate professional, and
  • You must participate 500 hours per year in real estate activities

Being a real estate agent or just owning rental properties is not enough to qualify as a real estate professional.  See How to claim Passive Loss Limitation Exemption on how to qualify as a real estate professional.

Real Estate Business Avoid Obamacare Tax

Here is some more good news.  Real estate professionals who qualified for the above criteria in five of the last ten years are considered to be in a real estate business.  That means profits from your rental real estate business is EXEMPT from the Obamacare Tax.  How about some more good news?  When your sell your property, profit from the sale is also avoid the Obamacare Tax.  Now this is a harbor you definitely want to chart a course to.

More tax advantages for Real Estate Business

Business income is exempt from the Obamacare Tax.  Your business has other tax advantages that are discussed elsewhere.

Subscribe to Jodywallreator.com to get more real estate business tips.  We promote our free offers on Facebook so be sure to like us today.

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residential rehab budget

Four big ticket repairs killing your property rehab budget

Property Rehab Budget

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So you’ve found a 3-2-2 in a trendy area with a good school zone. Now you want to know how

much to offer. The only way to figure that out is by estimating the repair cost. Learn how to estimate big ticket items when preparing your property rehab budget.

Number 1: Does it need a roof?

This is an easy answer. Weathered or broken shingles and decking is fairly easy to spot from on the ground. Where costs inflate is the number of pitches and angles in the roof, and not the total area to replace. There are factors which bloat the cost of repair, such as cedar shake decking, because it’s labor intensive, outdated, and a fire hazard. A good inspection should help you determine the presence of cedar shake.

Number 2: Is there foundation damage?

Diagonal cracks near windows and doorways are a prime tell of foundation problems. Large cracks and uneven concrete in the driveway is another tell. Slab foundations require breaking into the concrete and inserting piers to raise uneven portions of the house. Luckily, most foundation companies offer transferable, lifetime warranties.

Number 3: Cast Iron or Clay pipes?

Homes built before 1979 are at risk for cast iron or clay pipes, and lead paint. Cast iron rots and clogs over time. If you have foundation damage, you can almost guarantee those cast iron pipes have broken. Clay pipes just dissolve and are susceptible to root penetration. When that happens, your sewage quickly backs up. Fresh paint or new dry wall will often satisfy housing requirement codes if you’re looking to rent.

Number 4: H-Vac and Water Heater.

Water heaters more than 10 years old are at greater risk of giving out. So while it might not be an immediate priority, know it might be an issue in 2-3 years. H-Vac systems now-a-days are a godsend, but that doesn’t mean they’re any less expensive than a roof or plumbing. If they’ve not been updated since Obama first took office, or if the previous occupant didn’t know what filters were, that’s another item that needs fixing.

Understanding the need for these costly repairs is essential for your property rehab budget.  Don’t be surprised.  Be prepared.
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Cover photo by www.nearify.com

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late rent payment

Late Rent Payment- three easy steps to resolution

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Your tenant has a late rent payment.

Late rent payment can put you in a financial bind.  The best solution is to have a plan before the situation happens.  We have a three step process for dealing with late rent payments.  It centers on our lease and execution of it.  Rental property is our business and we treat it as such.  Here is how you can deal with late rent payments.

Step 1- Make your tenant aware of the process

Our lease is very specific on when and where rent is due.  It spells out when and the amounts of late charges.  The first late charge of $100 is assessed 4 days after the rent is due.  An additional late charge $25 is assessed each day at 11:59 p.m.  That gives the tenant all day to get the payment to us.  We go over our process when the lease is signed.

Step 2 – Send a notification of late charges

When we have a late rent payment, we send the tenant an e-mail notice of the delinquency.  The e-mail is sent the next morning after the due date.  We quote the section of the lease pertaining to late fees to remind the tenant of the process. Most times tenants respond and the process ends here.  If they get the rent to us before the 4th day of delinquency, they are not assessed a late fee.

Step 3 – Send 3-day notice to vacate

If after 4 days we still have a late rent payment, we report the late rent payment to the credit bureau. We also send the tenant a 3-day notice to vacate.  The notice is sent via certified mail return receipt.  The letter states their obligation and amounts due for rent and late fees.  At this point, the tenant knows we are serious and the rent payment is made.  It is a very rare circumstance that the process escalates.  If we have to move past this point, we already have the eviction process in motion.

Treat your rental property as a business.   You do not live for free and neither do your tenants.  When you have a late rent payment, your personal finances are impacted.  Have a system and stick with it.

See Collecting Rent- Three rules you must follow for the rent collection process.

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older plumbing

Older plumbing risks in Dallas-Fort Worth

Older Plumbing Risks of Cast Iron and Clay Pipes 

Older plumbing is DFW can be a buried time bomb waiting to explode.  Normal home inspections will not uncover the risks.   They say the best mistakes to learn from are someone Else’s. I will give you two examples of when ignorance cost me thousands.  You can avoid the mobile apprisk of buying and older home in DFW.

Home Construction Background

In the early 1970’s builder switched from building homes on pier and beam and went to slab on grade.  That meant water and sewage pipes became integrated into the foundation.  No big deal right?  Wrong.  The materials of construction for pipes used at the time were either cast iron or clay.  Herein lies the problem.

 Cast Iron Rusts

My husband says water eats cast iron like Baptist eat chicken at a church social.  Given enough time, everything will be consumed.  We bought an investment property with some foundation damage.  The deviation did not appear to be a big problem and not too expensive to repair.   The home inspection revealed no plumbing problem.  However when the foundation was brought back to level, the cast iron in the foundation cracked.  The water created a weak spot in the plumbing which gave when exposed to the stress of leveling the house.  That meant digging into the foundation in the bathroom and repairing the leak.  Can you say use up your contingency money?

 Clay Pipes Decompose

A couple of months later we purchased another property.  In addition to the inspection, we ensured there was no cast iron.  We pressured tested the plumbing as well.  We brought the property into service condition.  Part of renovation involved installing a new tile floor.  Everything was great.  Tenants moved in and were happy, until the sewage started backing up into the bath tub. It seems that roots in the front yard had made their way deep into the clay system.  They were thin enough to allow water to flow during the home inspection and pass the pressure test (the roots were actually holding the system together).  Well when the toilet system was used as normal, paper and other material would get caught in the roots and clog.  The remedy was to tear out the plumbing from the city tap, across the lawn, rip up the new tile floor and into the bathroom.  The clay literally fell to pieces when the plumbers tried to lift it out.

Home Buying Solution

All Real Estate agents are not created equal.  There is much more to knowing the neighborhoods than just the school system and the location of the nearest hospital.    Some problems are buried deep and are not revealed by a routine home inspection.  In my particular instances, neighborhoods in West Tarrant County were constructed by builders who used cast iron.  Builders in East Tarrant County were using clay pipes at the same time.  Knowing where these issues are and how to detect them is huge when making a purchase decision. Most can be overcome but you have to know how to deal with them.

 Call Me or an Expert in Your Area

When you interview your prospective Real Estate Agent, make sure you do some digging on your own to ensure they really know the neighborhoods.  Renovating old houses can be fun and rewarding.  Many people want to be like Chip and Joanna Gaines in “Fixer Upper.”  Understand renovation is more than paint and kitchen remodels.  

Contact me for an appointment

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DFW Multi Family Listings under $1.5 Million

Latest DFW Multi Family Listings

Part of success as a real estate investor is being at the right place at the right time.  I have created custom searches for Dallas county and Tarrant county investment opportunities.  These lists are updated automatically several times a day and always show the current listings under 15 days old.

Custom Searches and automatic notification

My website was designed with your success in mind.  You can create multiple custom searches on the North Texas MLS and get automatic notification when a new listing meets your criteria.  There is not reason you should not be the first to know when that hot property hits the market.

Dallas County multi family listings under $1.5 Million

Tarrant County Multi family listings under $1.5 Million

 

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Section 179 Depreciation

Use Section 179 Tax Deduction on Your SUV

Section 179 Tax Deduction Overview

People complain about our tax system.   I actually like our system.  It favors those who know the section 179 vehiclerules.  My favorite tax rule can be found in IRC Section 179 tax deduction.  This section of tax code defines the accelerated deductions available for tangible personal property used for business use.  It is a great way for the government to help you purchase the capital equipment you need to run your business.  Section 179 is part of the stimulus package enacted in 2008 and it keeps getting extended.  You immediately can claim up to $25,000 deduction on a Section 179 qualifying vehicle.

Section 179 Limits

The yearly Section 179 tax deduction limit is $500,000 per year.  You may purchase up to $2,000,000 of qualifying property each year.  The bonus deprecation has been extended.  It is 50% in 2016 and 2017, 40% in 2018 and 30% in 2019.

Business Income Sources

1)     Net income or loss from your business

2)     Net income or loss from the spouses business

3)     Proceeds from the sale of assets from you and your spouse’s business

4)     Interest income from you and your spouse’s business

5)     Net income or loss of your rental property business

6)     Gains or losses from the sale of rental property which qualify for section 1231

7)     And finally, you and your spouse’s other W-2 earned income

That is a lot of income.   I purposefully saved the W-2 income for last.  It is the source of the most confusion (I must reiterate here that I always advise using a tax specialist.  I do not give tax advice.)

Married Tax Payers and Section 179

The IRS treats you and your partner as single taxpayer when you file jointly.  If you file separately, you must declare how you are going to account for the Section 179 deductions.

Section 179 Example

Your business has $10,000 income for the year and your spouse earned $75,000 in W-2 income.  You buy a qualifying SUV for $37,500.  Your total income is $85,000.  You deduct the maximum allowed $25,000 for the vehicle. You are under the $500,000 limit.  Your taxable income is now $60,000.  If you are in the 30% tax bracket, you just saved $7,500 in federal income taxes. 

Section 179 is a rule you definitely want to know, understand and use.  It will help save you tens of thousands of dollars in your business.  

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Do not miss out when I discuss the rules and game plan on how to make these deductions real in your life.

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