Stuck in a Lease and Wish You Could Buy?

Are you renting and stuck in a lease agreement and wish you could buy a house now? Don’t abandon your dream and wait! Interest rates are going to rise in 2022 and you will pay more for the same house if you wait! So here are three things you can do to buy NOW!

Check the fine print

Find your lease or rental contract and look for a section that talks about early termination. See if there are any fees or requirements for terminating the lease early. If the contract doesn’t say, or you don’t have a copy of the contract, then call your property manager or landlord and ask them directly! Some leases call for a fee or require you to pay two or three months rent in order to get out of your contract early. Find out! There may not be a financial penalty.

See if there is a waiting list

Right now, housing is in demand, and not just homes to buy. If you have a property management company managing the rental you live in, they may have a waiting list of people who would jump at the chance to take over your lease! Call and ask. If you deal directly with the landlord ask your landlord if he knows anyone who would want to take over your lease. If he or she does not, then ask for permission to advertise and look for people interested in taking over your lease. Depending on your area, you could advertise for free on Craigslist or Facebook Marketplace, or other online sites.

You won’t have two house payments at the same time

When you buy a house, there is a slight delay on paying your first mortgage payment! Let’s say you get an offer accepted on a home in February. It will take 30 days to close escrow. So then if you close escrow in March you won’t have a mortgage payment on your new house until April, or sometimes even May depending on several factors! We always advise our clients to give their 30 day notice to their landlord once we have passed about the halfway mark in our escrow and we see that everything is looking good to close. Because you won’t have a house payment for another month that gives you plenty of time to stay living in your rental, close escrow on the house you’re buying, and then take your time moving.

If you are currently renting and would love to buy a house before your lease term is up, reach out to us! We can help you!

Written by Kim Jacobi of the Jacobi Team of Century 21 in Chico

The Invisible Door

What’s bigger than the front door?

Answer: the Garage Door!

Most homes have driveways – or in some cases roadways – that lead to the garage. Some houses, of course, may not have a garage, they could have carports or nothing at all to protect the vehicles. But the majority have garages – and nearly all garages have doors.

The typical neighborhood home faces the street, with a driveway that connects the street to the garage. Unless the homeowner uses the garage for storage or as an extra occupied room, garages are used to shelter the family vehicles. And no matter what the garage space is actually used for, it still has a door that faces the street.

What’s interesting is that some garage doors are totally forgotten about in the preparation for selling a home. Which is a shame because garage doors can visually be nearly a third of the curb appeal. Also a garage door upgrade can add to the overall value of the home.

Let’s imagine that everything has been done in preparation for selling your home. The interior is sparkling clean and has been staged, ready for its first showing. The outside landscaping has been spruced up, the windows are all clean and sparkling and even the front door has been painted and fitted with new hardware.

Now walk out to the sidewalk and look at the front of the house as if you are a prospective buyer. What do you see? Is your home’s curb appeal appealing? Has anything been forgotten? Now take a look at the garage door.

* Does it need painting? Does it complement the design of your home’s overall architecture?
* Does it sag in its frame? Will it open all the way?
* Does it have an automatic opener? Does it work? Is it noisy when it opens?

To make your garage door fit the personality of your home and improve its salability consider bringing that garage door up to the standards of the rest of the home. Paint, repair or even consider replacing it. Buyers will notice it as soon as they pull up at the curb. And, if the garage door is meant to be opened and closed, they will want to see it in action during the home tour.

As with all other aspects of the home, let your garage door be one of the shining selling points. Read here an article showing some before and after examples of renovated garage doors.

The Jacobi Team can help you with all aspects of selling your home, from questions about staging the interior to tips about upgrading the exterior to improve the curb appeal. Contact The Jacobi Team today.

Pros and Cons of renting out a secondary unit

By Jeanne Sager | May 7, 2018 on Realtor.com

An in-law unit can be a major selling point when you’re buying a house. It’s the perfect guesthouse for short-term visits (your adult children coming for Christmas) or long-term stays (Grandma moving in with you). But what can you do with your in-law unit while it’s sitting empty? Some homeowners opt to rent it out.

Nothing sounds sweeter than extra monthly cash flow, but is it really that simple? Let’s dive into the pros and cons of renting out your in-law unit and what you can expect to deal with as a property manager.

What is an in-law unit?


To qualify as an in-law unit, this part of the house should have its own entrance, bathroom, and kitchen or kitchenette, says Stephanie Trevizo, a real estate agent and landlord in Los Angeles. If your home listing says it comes with an in-law unit, you should make sure it legally qualifies as one in your municipality. “This can usually be done by calling your local housing authority or city,” Trevizo says.

Benefits of renting out an in-law unit


As Trevizo points out, homeowners stand to make extra income with a space they’re not already using, and they can do so with relatively little intrusion on their everyday lives. Because of their separate entrance, in-law units offer homeowners privacy and a sense of distance from their renters, something that wouldn’t happen if you were renting out a room in your home.

In-law units are also attractive to renters, which can make it easier for you to find a tenant. Because an in-law unit is part of a home, it’s likely located in a community largely made up of single-family homes. “Some [renters] choose these types of units to get into certain school districts,” Trevizo notes. “The landlords tend to be more flexible than a management company at an apartment complex.” What’s more, if you’ve already furnished your in-law unit for visits from your guests, you have the advantage of being able to list it as a furnished unit for short-term rental on sites such as Airbnb or HomeAway.

Then again, the separate entrance and all-in-one amenities (e.g., private bathroom and kitchen) make most in-law units great for extended-stay rentals as well, says Rob Stephens, co-founder and general manager of Avalara MyLodgeTax, a company that provides lodging tax compliance solutions for property managers. If you know the unit will sit vacant for a while, an in-law unit can be turned into a more traditional rental, with long-term monthly or even yearly leases.

Click Here to see if there are any homes for sale in Chico with a mother-in-law unit!

Disadvantages of in-law unit rentals


Before renting out your in-law unit, you must ask yourself if you’re ready to deal with a tenant in your personal space. Separate entrance and bathroom aside, the tenant will still be living on your property, so you’re both certainly going to have some personal interaction at some point.

There are also a few other questions to consider, says Kimberly Smith, a broker with AvenueWest Global Franchise, in Denver. For example, will the tenants’ noise bother you or your noise bother them? Will you feel safe? Are you comfortable renting to someone with a pet? Do you have enough room for them to park their car, or will that require daily communication?

Because renting out an in-law unit is legally equivalent to renting out any other piece of property, you do need to follow the laws of your local municipality, Stephens says. In the case of a short-term rental such as an Airbnb, you may be required to collect occupancy taxes, register guests, and sometimes obtain a license from your local authorities.

“Requirements to register and the occupancy tax rate that needs to be collected vary by city, county, and state across the U.S.,” Stephens says. “In some areas, you may only need to complete one registration form and remit taxes to one tax agency. In other markets, there are usually three to four different registrations that need to be completed, which include some form of licensing with the separate city, county, and state agencies. In about half the markets across the U.S., you will need some form of business or rental license. In other markets, you simply need to register and pay the occupancy taxes, not obtain a license.”

In other words, you’ll need to check with the city, county, and state where your home is located before you decide to become a landlord, even if it’s for the short term.

Renting out your in-law unit could also have an effect on your homeowner insurance policy, so it’s important to call your insurance agent before you put up that rental ad. Because renting is defined as a business activity, your typical homeowner policy will not cover losses related to your rental, Stephens warns.

One final consideration, and this is a big one: the responsibility that comes with maintaining a property.

“This could mean late-night phone calls about problems the tenants are having with the home,” Trevizo warns.

As the property manager, you’ll be on the hook for a number of things, including collecting rent, setting lease terms, handling repairs and emergencies, dealing with security deposits, and filing taxes on the property.

“There is always the risk that you may have to evict a tenant, which could be costly and time-consuming,” Trevizo says.

From Emmett and Kim Jacobi of the Jacobi Team of Century 21 in Chico, CA:
If you are interested in purchasing a property you can rent out and have questions or want guidance in finding just the right property, then please reach out to us! We are full time real estate agents here in Butte County and serve not only the Chico area, but also Orland, Oroville, Durham, Paradise, Magalia, and Butte Valley. Also, we hope you stick around on our website and check out all that we have to offer here!

12 Hidden Renovation Costs That Can Sink Your Budget

Surprises happen. Shelling out cash on unexpected renovation costs isn’t completely avoidable — but there are plenty of hidden renovation costs you can prepare for.

Here are some of the surprising things that can set your wallet on fire during your next big project.

#1 Extra Muscle: $500


Even if you’re just clearing out the renovation space by moving boxes downstairs, you still might find yourself in need of a few strong hands.

“For the longest time, we thought we could clear out the space ourselves,” says Summer Sterling, who renovated her home’s entire top floor, including gutting the kitchen, updating two bathrooms, and vaulting a ceiling. She and her husband lived in the basement during the remodel. “Then we realized we have this gigantic furniture.” The Sterlings moved as much as they could beforehand, but the movers still cost about $500.

#2 Anxious Pups: $125 Per Week


Some pets have nerves of steel. Others cower at any unexpected noise or strangers. And construction zones are full of noisy strangers: dropping wrenches, hammering, or stomping through your home in metal-toed boots.

Monitor your dog to see how he handles the stress. If the answer is “not well,” prepare for a brief boarding — although you might find a mid-day dog walker or a short stay with Nana is soothing enough (and far less expensive).

Sterling and her husband adopted a new dog shortly before the remodel. “It was tough on our little guy,” she says. “He likes to sleep all the time.”

Their two pups doubled their time in doggie daycare — stressful for the dogs and the budget. But planning your work during your sitter’s down season can save you some cash.

#3 Dinners Out: $80 Per Week


Cooking without a kitchen challenges the best chefs — there’s a reason it’s a stalwart Top Chef challenge. Even if your kitchen remains intact during the reno, putting together a meal in a home filled with dust is no fun at all.

Sterling and her husband ate out or ordered take-out “at least three or four times a week,” she says.

Instead of single-handedly funding your favorite restaurant’s expansion, she recommends storing pre-prepped, microwaveable meals in a chest freezer. Or setting up a makeshift kitchen.

Want to know how much value upgrades will bring to your home? Reach out to us and we will send you a free report! Click here: https://listings.jacobiteam.com/idx/homevaluation

#4 Dumpster Fees: $400


Construction junk has to go somewhere. If you’re DIYing the remodel, dumpster fees might come as a surprise.

Expect to spend about $400 on your trash-mobile, but contractors can provide localized, ballpark dumpster estimates.

Once it’s in your driveway, save some extra cash by using the dumpster to ditch unwanted stuff accumulating around your house. Tired of those nasty old blinds? Say adieu, without paying extra disposal fees. Just leave room for the construction junk.

#5 Hotel Stays: $500


You’re determined to live at home during the reno, but if a contractor accidentally smashes through your bedroom wall or the noise gets too unbearable, you might find yourself packing up for a short stay in a nearby hotel.

You don’t need to book your staycation beforehand, but budgeting enough cash for a few days’ away will make the decision to abandon ship a bit less stressful. Or hole up with some friends — just make sure to bring wine and cover dinner as payment.

#6 Childcare: $175 Per Week


Checking your calendar, you realize demo day coincides with school inservice. You can’t have the adorable little rascals stomping through the dust — so off to the sitters they go. Great. Another $100 down the drain.

Keep a close eye on the calendar and pre-arrange playdates for their days off to keep your wallet in check. Or bring over Aunt Margie to keep the kids corralled (and entertained) in a spare bedroom.

#7 Labor Costs: $50 Per Hour


Delays, schedule changes, and unexpected surprises don’t just add time to the renovation — they mean paying more to the workers.

“Our labor costs wound up being much higher,” says Janet Heller, whose sink broke during a bathroom renovation — requiring multiple trips and two times the work from contractors and laborers.

Know each contractor’s hourly cost so when disaster strikes, you can budget appropriately.

#8 Professional Cleaning: $150


Your new kitchen features sparkling, brand-new marble and stunning oak cabinetry — but you can’t ignore the fine layer of sawdust covering everything.

“Construction dust is everywhere,” Sterling says. Allocate a few days for a top-to-bottom clean. Scrubbing everything yourself can save you some much-needed cash.

But if the mess is too daunting, consider hiring a service as a post-renovation treat. Even if they’re just handling the hard-to-reach spots, a little help will be more than welcome. Now all you have to do is go home, kick back, and heat up your very last frozen dinner.

#9 Office Space: $195 Per Month


Telecommuters have their own renovation challenges. How can you take a phone call with clients when a drill is whirring overhead?

“I work from home, but am unable to function with so much construction noise above me,” Sterling says. “There’s no privacy whatsoever.” But privacy doesn’t come cheap: A “flexible desk” at a co-working space can cost $195 per month — and more if you need a closed door.

Sterling leased a temporary office twice per week during the renovation and lowered costs by working out of coffee shops or a library as often as possible.

#10 Higher Utility Bills: 15%-20% Extra


Doors opening. Fans whirring. So many power tools. Is there anything in construction that doesn’t suck up energy?

“We’re living in a much smaller space, but the efficiency is terrible,” says Sterling, who spent about 15% to 20% more on electricity during the renovation. “The bloody contractors leave the windows open all the time.”

Don’t feel bad if you’re a bit of a nag. Unless the breeze is necessary (drying paint and new hardwood floors require ventilation), pop upstairs every evening to close the windows.

#11 Lawn Landscaping: $1,500


Did they really need to put their equipment on your beautiful Kentucky bluegrass? For some reason, renovating the interior can mean your lawn takes a beating that only a professional landscaper can repair.

Ask contractors beforehand if they plan on using your yard for staging, and place down tarps to protect the foliage. Or find alternative spots, like the attached garage or gravel driveway.

#12 Permits: $1,000


Before the first sledgehammer swings, sit down with your contractor (or city building department) for a detailed discussion of exactly what permits you need.

“Usually a contractor will include plans and permits,” says Charles Rinek, owner of custom home building company Rinek, Inc.

But make sure you know early on if they don’t, otherwise you’re in for a surprise. Sterling says she paid more than $1,800 in permit fees — causing major sticker shock, if you’re not expecting the bill.

Written by Jamie Wiebe, found on houselogic.com website

Hi from Emmett and Kim! We are a husband and wife real estate team here in Chico, CA with Century 21 Select Real Estate, Inc. If you have any questions about buying or selling a home please do not hesitate to reach out to us! We hope you stick around and explore our website. There is a lot of great info and you can search for homes for sale as well!

How to form a real estate LLC

What are the fundamental mistakes investors make when forming a real estate LLC?

Investing in real estate offers many lucrative advantages compared to other investment vehicles. On the other hand, it can also expose real estate investors to risks and pitfalls they never knew existed. That said, forming a real estate LLC (limited liability company) is one of the more important things investors can do to safeguard themselves from outside interference.

A real estate LLC is a corporate structure that aims to not only shield you from being sued if things go awry but protect your personal assets such as a home, personal bank account, or investments. By forming a real estate LLC, investors and their respected businesses will be viewed as two separate entities in the eyes of the corporate world, helping to protect them from being personally liable in case of debt or lawsuit from the business. Along with protection, a real estate LLC offers unique tax advantages to investors, as well as the flexibility to accommodate their growing business demands.

What Is A Real Estate LLC?


An LLC for real estate is an established legal entity that allows investors to purchase and own real estate in such a way that protects them from personal liability. This means that the investor buys and sells real estate, as well as conducts other business, in the name of the LLC, rather than as an individual. In case any outside entities or individuals make a claim, the individuals behind the entity can avoid personal liability. Also, property owners are allowed to establish individual LLCs for each separate property, meaning that they can avoid cross-liability between properties.

Real Estate LLC vs. Liability Insurance


If investors decide that the process of forming an LLC is not worth the protection it will provide if they were to face a lawsuit, they can choose to rely on liability insurance instead. Liability insurance is an affordable option, but these policies can be risky as they will include exceptions and limits to the protection they offer. Overall, LLCs are becoming increasingly popular due to the benefits they offer real estate investors.

Limit Personal Liability


One of the biggest benefits that LLCs offer investors is a limit to the personal vulnerability they would face if a lawsuit were raised against the property they own. For instance, if an investor personally owns a property, they would be named in the lawsuit, leaving their personal assets vulnerable in the legal proceedings of the case. However, if the property is owned by an LLC, investors can reduce their personal liability in a lawsuit. Instead of having to defend their personal assets, the liability of the case would fall on the LLC, creating a protective barrier between the investor and their personal property.

How To Set Up A Real Estate LLC In 6 Steps


Starting a real estate investment LLC has risen in popularity in the past decade, namely due to the unique benefits that cannot be ignored. Forming a real estate LLC is not difficult; rather, it is a matter of doing your research and getting organized. The following is a brief overview of the required steps, which can vary by state.

1. Research your state’s regulations on forming a LLC.

2. Pick out a business name and run a search to make sure it doesn’t already exist.

3. File an “Articles of Organization” document that can be found on your Secretary of State homepage.

4. Create an Operating Agreement for your LLC, which outlines how your entity will be organized and run.

5. Find out whether your state requires you to publish an intent to file through your local newspaper.

6. Obtain any necessary business licenses and permits, as well as apply for a tax identification number through the IRS.

Search for investment properties in Chico Click Here: Search

Step 1 Research Regulations


The formation of an LLC will vary slightly from state to state, with fees and regulations being subject to change. Most investors choose to incorporate within the state they conduct business, though some opt for areas with more “relaxed” business laws like Delaware or Nevada. Do note that if you have a physical presence or do business across states you will have to register a foreign LLC in each of these places. Selecting a state is entirely up to you, just be sure to research the process before actually getting started. All of this information will be available on your area’s Secretary of State website.

Step 2 Choose A Business Name


The right business name is more fundamental than you might think. Not only does it need to attract potential clients, but it must also be unique to register as an LLC. Write out a few potential options before going online to check their availability. One of the best tips to follow as you name your business is to avoid pigeonholing yourself. Starting an LLC is only the beginning of your real estate business, so choose a business name with potential. Once you have some candidates in mind, make sure they are not already taken. The most common reason LLC applications are rejected is because of problems with business names.

Step 3 File Your “Articles Of Organization”


The Articles of Organization for an LLC is essentially the blueprint of a business. It should state the company name, primary address, start date, business owners (called “members”), and a brief description of the business. As I mentioned above, the specificities can vary between states. With that in mind, make sure you include each of the required parts before submitting your Articles of Organization to the Secretary of State’s office. This is also the part of the process where business owners are required to pay any fees associated with starting an LLC. It may take a few weeks to hear back from their office, but if everything is submitted properly there should be no issues with approval.

Step 4 Create Your Operating Agreement


Not all states will require an operating agreement, though it is not a bad idea to create one as part of your business plan anyway. The states that do require one include California, Delaware, Maine, Missouri, and New York. While the other states have different rules, an operating agreement can actually come in handy no matter where you live. Essentially, it states how the business is divided among members and how decisions will be made within the company. Further, it can also describe what would happen in the event one member decided to leave the company. One of the biggest perks of starting an LLC is that it can offer protection from several negative situations. The same logic applies to an operating agreement: it protects business members by anticipating possible scenarios that could harm the business structure.

Step 5 Publish An Intent To File


There are only three states that require an intent to file: Arizona, Nebraska, and New York. What this means is if you are forming an LLC in one of these three states you are required to publish an ad in your local newspaper stating your intention to create an LLC in that state. Generally, investors will publish ads over three to six weeks in a newspaper. The newspaper will then send back an Affidavit of Publication, which will need to be submitted to the Secretary of State’s office.

Step 6 Obtain Licenses And Permits


A real estate investment LLC is typically not the only designation you will need to open your doors for business. Almost all states will have separate licenses and permits that are required before conducting business. These can include a general business license, sales tax permit, professional license, and more. Again, your questions on this part of the process can typically be answered with a little online research. I recommend starting with the U.S. Small Business Administration’s website and going from there.

5 Fundamental Mistakes To Avoid When Starting A Real Estate Investment LLC


While forming a real estate LLC is immensely important for protection, the beginning stages of setting it up can also be massively intimidating for beginners. Also, there are several common mistakes that investors make along the way. To better assist in understanding the complexity of a real estate LLC, the following outlines the biggest mistakes people need to avoid when forming an LLC:

1. Not starting the process of forming your LLC before pursuing new deals.

2. Selecting the wrong LLC structure for your business.

3. Commingling personal and business funds, or engaging in unethical practices.

4. Not consulting a professional on the best corporate and tax structures for your business.

5. Omitting the proper steps and due diligence recommended when forming an LLC.

Mistake 1 Waiting To Form Your LLC


The purpose of a real estate LLC is to legally separate yourself from the business. When first getting started, even if you haven’t completed a deal yet, it’s imperative you begin the necessary steps of forming a real estate LLC. This investment umbrella will supply investors with the real estate LLC benefits of asset protection and allow them to immediately reduce their taxable income with business-related expenses. The addition of a real estate LLC can also help to legitimize an investor’s business credibility, as this corporate structure will provide an element of professionalism and trust that other competitors won’t have.

Along with pulling the trigger early on an LLC, it’s also important for beginner investors to understand that LLCs are governed by individual state laws. This means that, depending on the state you registered your LLC in, the filing requirements and protection they offer will differ from state to state. For example, Nevada is a popular destination to establish a business LLC, as the state offers optimal asset protection laws.

Mistake 2 Ignoring Corporate Layers


Another mistake that investors commonly make when forming a real estate LLC is choosing the wrong LLC structure. As a result, investors may not be taking full advantage of all tax breaks available to them.

Generally speaking, LLCs are “pass-through” entities, which means owners pay taxes on the company’s profits through their own income tax filings. This basically allows investors to bypass corporate taxes, including double taxation. However, because there are many different investment options in real estate, from buy and hold, rentals, rehabs to wholesale, it’s important to note there are also subsidiaries of LLCs.

A real estate LLC subsidiary allows investors with diverse investments to spread their company’s assets across different business entities, helping to further reduce risk. This practice is pretty straight forward and similar to forming a real estate LLC. For more information, including rules for starting an LLC, investors are recommended to visit SBA.Org.

Mistake 3 Piercing The Corporate Veil


The primary benefit of forming a real estate LLC is the entity’s ability to provide distance between you and the business, while not relinquishing control.

Although forming a real estate LLC can provide an assortment of benefits, including liability protection, it can also be denied if mishandled. An LLC is simply the shell of a corporate structure, which means it will not be enough to avoid personal liability. For those that engage in fraudulent activity or most commonly co-mingling personal and business funds, this corporate shield can be shattered—leaving you vulnerable to liability. By co-mingling funds, it makes it extremely hard to prove that your LLC is, in fact, a separate entity from you. That said, the importance of separating business and personal finances is second to none, as this small side-step can breach the conditions of a real estate LLC.

Mistake 4 Not Hiring A Professional


There’s a time and place to do everything yourself as an investor, but not when it comes to the legal or tax segment of your business. The importance of consulting an attorney and a tax advisor is undeniable, as these experienced professionals will provide the best advice moving forward.

As a real estate entrepreneur, it’s important to remember that your skillset lies somewhere else. Although learning information on corporate structures and tax loopholes has its place, your time and effort are better spent in other departments of the business. Leaving it to a professional will allow you more time to concentrate on taking your business to the next level. With the right team and people in place, your real estate LLC will not only cement your position as a business, including full protection but put it in a position to achieve every tax benefit available.

Mistake 5 Lacking Due Diligence


Far and away the biggest mistake investors make when forming a real estate LLC is failing to conduct the necessary due diligence. While starting a business takes time, effort, and motivation to successfully achieve, it can all be erased (and more) without the appropriate legal structure in place. Taking the proper steps, including planning and precaution, is vital when starting your real estate career, but especially when forming a real estate LLC. Remember this important step encompasses both how you and your business will be taxed, but also how it will be protected in the case of legal issues. Taking the time now to understand the fundamentals of an LLC and how it applies to you and your business will put investors in the best position to succeed, both now and in the future.

FAQs About Real Estate LLCs


Due, in large part, to their complex nature, only seasoned business owners tend to understand the “ins and outs” of what LLCs are and how they are formed. Prospective investors, on the other hand, are often clueless about how these legal entities work. New investors aren’t awarded the luxury of years of experience, nor are the concepts at play easy for them to digest. As a result, far too many of today’s real estate investors learn about the legal structure of their own companies through trial and error, which is risky to say the least.

Instead of subjecting one of the most important aspects of any real estate business to unnecessary risk, investors are better off learning from their predecessors. Specifically, investors could benefit immensely from asking the right questions, not the least of which are outlined below:

Can You Buy Real Estate With An LLC?


Real estate companies structured under an LLC are allowed to buy real estate. In fact, LLCs afford investors one of the most versatile vehicles to shelter their taxes and protect their assets. With the help of an LLC, savvy business owners may even be allowed to keep more of the money they make when it comes time to file their taxes.

Why Should You Put Rental Property In An LLC?


Not only should rental properties be placed under an LLC, but each property in a respective portfolio should have its own separate LLC. Not only will filing as an LLC award investors with great tax benefits and asset protection, but each subsequent LLC will provide another layer of protection. Setting up an LLC for each property will “insulate” them from each other, effectively reducing risk.

What Is The Best State To Form A Real Estate LLC?


While the best state to form a real estate LLC is subjective and dependent on an investor’s personal aspirations, Nevada is a great place to set up a real estate LLC. In addition to awarding business owners the many benefits associated with today’s LLCs, those formed in Nevada are awarded an extra layer of protection. Specifically, Nevada allows LLCs to form what’s known as a “Series LLC.” According to LegalZoom, “The Series LLC allows for the erection of limited liability shields within the LLC. For example, a real estate LLC might hold several properties and set up a series LLC in a manner that prevents one property from being foreclosed upon to satisfy the debts of another property.”

Do You Have To Live In The Same State As Your LLC?


Real estate companies are pretty much free to set up an LLC in any state they choose, with a few exceptions. It is common for business owners to file in the state they currently work in to avoid confusing tax requirements, but sometimes it may be worth it to file in a different state. Take the state’s tax laws into consideration when deciding for yourself.

How Much Does It Cost To Form A Real Estate LLC?


The cost of forming a real estate LLC is contingent on the state it is filed in and the steps taken to form the entity. Individual state filing fees can vary dramatically but tend to range anywhere from $50 to $500. That price, however, is just the filing fee. Additional fees may be required for your own federal tax ID number, or in the event you hire a lawyer or use an online incorporation website.

Summary


Forming a real estate LLC is one of the most important steps an investor can undertake when getting started. It not only protects you and your personal assets, but it allows you to reap the tax benefits that you rightfully deserve. While the ability to generate sales and build your business is crucial to success, it is equally (if not more) important to keep it protected at all costs. Investors should remember this act pertains to not just your business, but your livelihood as well.

Disclaimer: Prospective business owners should consult a professional before forming a real estate LLC.

Written by JD Esajian and shared from fortunebuilders.com website

What Types of Home Inspections Can a Buyer Do?

There are lots of types of home inspections you can do when you are buying a house. In California, these inspections are generally done during escrow, and who pays for them is negotiable. No inspections are required when buying a home, unless you are getting a VA loan, then you will be required to get a pest inspection and a septic inspection, if applicable, and a well inspection, if applicable.

General Home Inspections

General home inspectors look for signs of damage and defects. They’ll often refer buyers to a specialist to investigate further and fully diagnose the problem when and if they spot something significant, or something that lies outside their scope of expertise.

A general home inspector might see evidence of wood damage and suggest that you call in a pest expert to find out what caused it. These specialists can provide you with different repair options and give you a sense of what the bill might be to remedy the situation.

Tip:

The costs of inspections are generally left to the buyer unless they’re required by an appraiser in order to get a loan.

Chimney Inspections

Some older chimneys don’t have flue liners, or the interior brickwork might be crumbling. A chimney inspector will detect these problems and can also make sure smoke is discharged properly and that the cap is in good repair. Cost: a mere $100 to $300 as of 2020.1

Electrical Inspections

A general home inspector might tell you that the electrical box is so old that it no longer complies with city code. An electrician can tell you the best brands for replacement and how much it will cost, among other disclosures.

Tip:

Be sure to check out the electrical panel and Google the model number to make sure it hasn’t been recalled.

Lead-Based Paint

The federal government banned the use of lead-based paint in 1978, but older homes-and even some built after 1978-can still contain it.2 You have a right to have the home tested for lead-based paint and to hire a certified lead abatement contractor to remove it.3

Search for homes in Chico between $400,000-$600,000. Click here: Search

Heating and Air Conditioning

A home inspector might measure the differential temperature reading from an air conditioner or a furnace as low, and recommend that the unit be inspected by an HVAC specialist to find out why. Most furnaces must be taken apart to determine the source of the malfunction.

Tip:

An HVAC specialist can tell you how much it will cost to fix the unit, or whether it needs to be replaced entirely.

Wood Damage

You’ll find wood-destroying critters in just about any part of the country, but they particularly thrive in warm climates. A pest inspection discloses not only the presence the likes of termites or powder post beetles, but it also identifies non-pest issues like dry rot. This type of inspection can cost as little as $50 or so as of 2020.4

Foundation Inspections

A home inspector can tell you if your home was built on a slab or a raised foundation and note suspicious cracks, but a foundation engineer can tell you if the home is sliding or the foundation is faulty. This type of inspection can run $300 to $1000 as of 2020.5

Pool and Spa Inspections

Pool and spa experts can offer an estimated life expectancy of the unit based on crucial key components such as the heater or spa blower. These specialists also check for leaks.

Tip:

Sometimes pools can be covered under home warranties for an additional cost.

Roof Inspections

Get your own roof certification on an older roof, even if the appraiser requires it and the seller won’t pay for it. Make sure the company is reputable and likely to be in business later if you should have to make a claim.

Sewer or Septic System

Get a sewer or septic tank inspection. Some older homes might not be connected to a sewer system. Modern inspection technology inserts a digital camera into the sewer line and pushes it through to the main line. Many sewer inspectors will even make movies of the process for you.

Soil Stability

Testing the soil is important if you’re buying a home on the side of a hill because you don’t want the home or any part of the hill sliding away during a severe rainstorm. Some areas also are prone to soil contamination.

Landscaping Inspections

The best way to determine if the trees and bushes on the property are healthy is to hire an arborist to inspect them.

Water Systems and Plumbing

A plumber can tell you if galvanized plumbing needs to be replaced. Some galvanized pipes are so clogged that you can barely fit the lead of a pencil through them.

Inspect the construction and find out the depth of the water table, including water sanitation, if the property has a well. This type of inspection will run about $165 as of 2020.6

Gases and Chemicals

A mitigation contractor can test for radon or methane gas and recommend ways to remove it. Qualified formaldehyde inspectors can also determine the presence of unacceptable levels of this colorless and flammable chemical, which is often used in building products. It’s been known to cause cancer in rats.

Tip:

A radon check can set you back as little as $10, if you purchase a home test kit.7

Asbestos Inspections


Contrary to popular belief, general home inspections don’t include tests for asbestos. The only way to tell if a material actually contains asbestos is to have it tested by taking a sample to a lab.

Tip:

Don’t rely on do-it-yourself home tests.

Mold Inspections

Mold is typical in residences in damp, humid climates, and it can trigger health problems even in healthy individuals. An inspector can test for its presence and determine what type of mold, if any, is present.

Document Inspections

Not all inspections are physical. Researching records can turn up significant information, too:

Square footage:


You might want to verify the square footage of your home because public records sometimes contain mistakes. Buyers or their lenders can hire an appraiser to provide this measurement.

Easements and encroachments:


Your owner’s title policy will disclose easements, but ask the title company to send you the actual easement documents from public records, too. You can also hire a surveyor to inspect and prepare an improvement location certificate (ILC), which will show any encroachments.

Lot size and boundaries:


A preliminary search for a title policy will give you a plat map, showing the boundaries and the size of the lot. Consider hiring a surveyor if you want this information verified. Don’t rely on fences to determine boundaries, but be warned. This type of survey can cost as much as $675 and as low as $346 as of 2020.

Permits and zoning:


Go to your city planning department and ask to see the permits on the home. Sometimes people remodel without permits. The zoning department can also tell you if running a home-based business is legal where the home is located.

If You’re Buying in an Area Prone to Disasters

You might want to add one more item to your inspection checklist if you’re buying in an area that has a history of severe weather events, such as flooding, hurricanes, or tornadoes. A disaster inspection can tell you if the property suffered any resulting damage and how well it’s likely to stand up to another such event.

BY ELIZABETH WEINTRAUB
Updated November 13, 2020
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.

About Us

What does a former Alaskan fisherman and a former music teacher have in common? Real Estate! Emmett and Kim teamed up in 2015 to form The Jacobi Team. Together they bring what one person alone could never do: the best qualities of two people, combined with leveraged time and focus, creating high quality, high success representation for buyers and sellers of real estate. Real Estate is not an easy career, so why do it? “Because we care about people and we love the uniqueness every person, and every property brings. We truly feel joy and satisfaction when we help someone.” -E and K

Featured Blog Post

How to know when this market will shift

By

In many parts of the United States, areas are experiencing a seller’s market: low inventory, high prices, lots of buyers= multiple offers. This kind of market is THE best time for a seller to sell. Why? Because home sellers can make the most money from selling, as well as have the most leverage for the […]

Contact Us

Emmett Jacobi, CADRE#01896904
Contact us by emailEmmettJacobi@gmail.com
Contact us by email 530-519-6333

Kim Jacobi, CADRE#01963545
Kim@JacobiTeam.com
Contact us by email 530-518-8453

1101 El Monte Ave Chico, CA 95928