5 Red Flags Home Buyers Should Take Note Of

As a veteran real estate professional working in Pittsburgh, Jason Cohen well-equipped to assess the risks and potential associated with a property. In this post, Jason Cohen uses his hard-won experience to highlight a few red flags that buyers should make note of when they tour a home.

With their new appliances, sleek countertops, and freshly-painted walls, remodeled houses are meant to impress. For a potential buyer conducting their first walk-through, the surface appeal of a touched-up house can be appealing; however, first-time buyers should avoid making a decision based off of aesthetic appeal. Unfortunately, a number of renovators choose to prioritize cheap cosmetic updates over more vital (and expensive) structural renovations – leaving the unaware buyer with the heavy financial burden of making expensive repairs. Don’t be pulled in by a flashy hack job – watch out for these warning signs when you walk through a home!

Cracks in the Walls

Contrary to what old horror movies might suggest, wall cracks aren’t par for course in old homes. Watch out for splits in brick walls, and makes sure to consult an expert if you think a wall fissure might be more than a cosmetic problem. Don’t take the issue lightly! Wall cracks can indicate severe structural issues and shouldn’t be left unchecked.

Old Roofing

The last thing a buyer wants to do after shelling out tens – or hundreds – of thousands of dollars on a home is sink even more resources into fixing its roof. When built well, roofs remain strong for roughly thirty years. When done incorrectly, they last for considerably less time and can demand as much as $30,000 to repair. Be proactive by enlisting the help of an expert to inspect the roof or asking to see the property’s inspection records.

Fresh Paint in an Old House

A fresh layer of paint usually isn’t something to worry about. However, if it seems as though a house hasn’t been fixed up beside a few patches of paint on the ceiling, beware! Some sellers attempt to cover up termite or water damage by painting over it. Make sure to ask the seller about any suspicious paint jobs before you proceed with the buy.

Water in the Basement

Properly maintained basements aren’t soggy. Moreover, buyers who see water in the basement should worry about more than cleaning on rainy days; according to home inspector William Kibbel, “The wettest crawlspaces (and basements) seem to be directly related to exterior drainage issues. Ground sloping towards the foundation, clogged or missing gutters, and downspouts not properly extended can all contribute to elevated moisture levels and even regular water intrusion.” If you have the funds and time to optimize a home’s exterior drainage problems, you should purchase the house. Otherwise, you may want to let the property go.

Uneven Flooring

Saggy flooring near a home’s bathrooms often indicates greater problems with the property’s plumbing system. Make sure to have an inspector check the plumbing, lest you find yourself with serious issues down the line!

Never, ever be afraid to ask questions. Buyers are entitled to the right to inspect potential purchases and ensure that they really are getting everything they pay for. Take walk-through inspections seriously, and don’t be fooled by a flashy renovation!

*Originally posted on JasonCohenPittsburgh.net

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Pros and Cons of Hosting on Airbnb

As a real estate professional who specializes in investment, Jason Cohen Pittsburgh founder Jason Cohen knows how valuable paying attention to market trends can be. Airbnb has had a significant impact on real estate markets across the country, including Jason Cohen’s home city of Pittsburgh. In this piece, Jason assess the pros and cons that hosts must weigh before listing their properties on the site.

The age of using Airbnb to crash on an inflatable mattress in someone’s spare room has come and gone. Now, guests expect a full-fledged experience: immaculate bedrooms, sleek kitchens, friendly hosts. Since its inception in 2oo6, Airbnb has taken the short-term rental market by storm. Currently valued at over $30 billion, the online company now stands as a formidable competitor against traditional brick-and-mortar hotels. Some hosts swear by the site as an infallible way to make money off of a well-placed properties; others complain about the time and effort maintaining an such a residence demands. More and more traditionally-minded real estate investors are beginning to ponder the question: should they opt into the Airbnb craze? The pros and cons of doing so are outlined below.

PRO
High Potential Returns

If Airbnb property owners are able to attract a steady stream of short term renters, they have the potential to net a high return on their investment. According to partners and Airbnb hosts James and Erin Carlson, a furnished and well-kept Airbnb property can bring in significantly more income than an unfinished long-term rental can in the same period of time. However, the pair does note that pricing and maintaining the property takes a considerable amount of research and time, as guests expect to pay less than hotel price for an equal – if not better – residential experience. If a property owner has the time and resources to maintain the property, however, the effort may well be worth the expense!

CON

Breaking even has become more difficult.

Airbnb has been up and running for over a decade – and in that time, has become somewhat less lucrative for hosts. According to findings published in the NYC-based real estate magazine The Real Deal, “In order to break even with the average annual rent for a long-term lease, an Airbnb host would have to rent an apartment on the home-sharing site for an average of 216 days, up from 194 days in 2012.” Those seeking to break into the Airbnb scene may find themselves struggling to attract the sheer volume of guests they need to keep the property profitable.

PRO

Hosts will hone their business skills.

Becoming a successful Airbnb host require business savvy – and those who don’t have it when they begin hosting will either hone their business skills or take their listing off of the site. For those who don’t mind the effort and risk, becoming an Airbnb host can be the perfect opportunity to develop a greater mind for business and investment strategy.

CON
Local and state laws can be difficult.

Always, always check local legislation before becoming a host. Some states have begun cracking down on short-term rental properties by imposing significant fines on hosts who either failed to file the proper paperwork or are ineligible to rent out their residences for short-term tenants.

Should you become an Airbnb host? It depends entirely on your circumstances. Take these points into consideration before you submit your property to the platform!

*Originally posted on JasonCohenPittsburgh.com

Taking the House: Tips From Jason Cohen on Winning a Real Estate Bidding War

Selling a home is an emotional decision, and sometimes money isn’t the deciding factor in which offer a buyer chooses. Think of it this way – would you prefer to sell to a buyer who offers a few thousand more and wants you to pack up your life in a day, or to his competitor, who offers less, but will give you a few weeks to say your goodbyes? Real estate is predominantly a seller’s market. Jason Cohen has found that in Pittsburgh, Pennsylvania and beyond, it’s become increasingly important for buyers to appeal to both the homeowner’s emotional and financial sensibilities. Prospective buyers need to strategize; they need to make the sellers like them more than their competition.

Be diligent

There are few qualities more off-putting than disorganization. Make a good impression by having your paperwork in order and showing the buyer that you understand the financial implications of the agreement. Prepare documentation that proves that you can afford the cost of closing, and have your mortgage papers, loan documents, and proof of credit ready for the seller’s inspection.

Cut out contingencies

Try not to irritate the seller by adding too many demands to your bid. You may want those cosmetic repairs on the porch finished by the time you move in, but the hassle involved might push the seller towards a lower and less demanding offer. Ask for the inspections and repairs you absolutely need, and no more. Try to be as flexible as possible and make the process less stressful for the seller; they will appreciate your thoughtfulness and think better of your bid.

Enter an escalation clause into your bid

Adding an escalation clause to your offer shows the seller that you intend to seriously participate if the sale comes to a bidding war. Essentially, the clause states that if other buyers drive the price over your initial bid, you will top their offer up to a certain amount. Escalation clauses can help convince sellers that choosing your offer makes financial sense; that said, you need to know your limits. Walk away if the escalation pushes the price beyond what you can afford.

Be sentimental

Appeal to the seller’s emotional side. Include a personal letter with your offer packet that details why purchasing their house matters to you. Build a personal case for why the seller should choose you over other, possibly more lucrative, offers. Money isn’t always the deciding factor in a sell – so be compelling, and convince the seller to like you!

Jason Cohen of Jason Cohen Pittsburgh can provide further guidance on any of the above items. Visit our website at jasoncohenpittsburgh.com for further details.

*Originally posted on JasonCohenPittsburgh.org

The Value of Research: A Pittsburgh Case Study

Jason Cohen was only two years out of college when he bought his first property in Pittsburgh. It wasn’t a luxurious place by any means, but it was what he could afford with the means left to him after student loans. He sunk what resources he had into performing the most necessary repairs and managed to breathe new life into the struggling building. Its value soared; newly determined after his success, Cohen set his eyes on the next project and invested his profits. After ten years of hard work, Jason owns commercial and residential properties throughout Pittsburgh. He began with limited means, but Jason now has the resources and experience to run multi-million dollar community projects.

His secret?  Research.

According to Cohen, who facilitates the real estate investment forum Jason Cohen Pittsburgh in his free time, research is the factor that makes or breaks a real estate venture. An enormous amount of pre-planning goes into rehabilitating a property for sale, and the success of the venture hinges on having reasonable profit and cost projections.

More and more investors are flocking to house flipping to make a profit; according to statistics provided by Trulia, a full 6% of homes bought in 2016 had been renovated for sale. However, the field does pose significant risks if investors have little experience. If you intend to break into the real estate industry as Jason Cohen did, please consider the following basic tips for real estate research.

Look into the expense of the house.

Houses cost money. Repairs cost money. As Mindy Jenson, community manager for Bigger Pockets commented for a U.S. News article: “Nobody is going to hand you a house for free, and you can’t go to Home Depot and [get] your supplies for free […] If you are using credit cards and have no money, you can get into trouble quickly.” Assess whether the house will require expensive repairs, and compare your expense projections to your budget. Sometimes, it’s best to be patient and move on from a house with too many liabilities in search for one that poses less of a risk.

Research the neighborhood.

Find out how much you’ll need to pay to renovate the house for sale, then assess how much you’ll likely get for it based on neighborhood averages. Remember, you can’t tack on an extra $10,000 to the price simply because you owe that much to your lenders. Figure out if you can afford to buy and renovate the home, then act accordingly.

Research lenders.

Financing a house is notoriously expensive. Spend time going over your borrowing options, and choose one that suits your needs. Don’t move forward with the first place you visit; take the time to check out all of your lending options and proceed as seems best.

*Originally posted on JasonCohenPittsburgh.org