Inside the Solar-Hydrogen House: No More Power Bills--Ever

Interesting article from Scientific American about a New Jersey man who has converted his house (and his car) to be completely self-sufficient in terms of energy. No more gas (natural or gasoline) or electric bills for him.

It's not cost-effective (yet) but gives us a working example of what can be done with today's energy-efficient technology.

"Mike Strizki has not paid an electric, oil or gas bill—nor has he spent a nickel to fill up his Mercury Sable—in nearly two years. Instead, the 51-year-old civil engineer makes all the fuel he needs using a system he built in the capacious garage of his home, which employs photovoltaic (PV) panels to turn sunlight into electricity that is harnessed in turn to extract hydrogen from tap water.

Although the device cost $500,000 to construct, and it is unlikely it will ever pay off financially (even with today's skyrocketing oil and gas prices), the civil engineer says it is priceless in terms of what it does buy: freedom from ever paying another heating or electric bill, not to mention keeping a lid on pollution, because water is its only by-product."

For the rest of the article, go here

Mortgage Insurance Changing for Investors

Courtesy of my friend Kim Pace at Sunshine Mortgage in Atlanta...

"Just to give you a heads up of what is coming July 14th with ONE of the larger Mortgage Insurance companies. This might be a sign that the rest will follow and I know how nobody likes to get caught with a major surprise.

Full Documentation Prime (A)

• Investment properties are no longer eligible for mortgage insurance.

This becomes effective July 14th. So if you have any investors that are looking at property you might to share this information with them.

This means borrowers (investors) will either have to put down 20% or arrange financing for 10%. This is not the only MI company but it is a big one."

Thanks, Kim!

Holding Property in an LLC Just Got Tougher

Tax Strategist, author, and real estate investor Diane Kennedy, has a new article about new changes from Freddie Mac that can have an impact on investors.

"Freddie Mac, one of the two largest underwriters of conforming loans on the secondary market, have changed their internal rules to state that they will no longer refinance a property that has been inside of a Limited Liability Company (LLC) for any time within the past 6 months."

You can read the full article here.

The good news is that there are other options. And as real estate investors, we either learn to get creative or our businesses suffer. Stay tuned for more developments....

A Great Idea But It Still Needs Work...

I came across a "new" site today that is trying to compete with Zillow, Trulia, and other sites that allow anyone to estimate the value of a property.

This one has added text-messaging capability, so you can send a text message with a property address to their site and within seconds, you'll be able to get the information they have on the property.

Sounds great, right?

The drawback is their "extensive databases" (quoted because that's what they say in the "About Us" page on their site) aren't so extensive after all, at least not yet.

I tried searching for several addresses and here's what I came up with:
- NO Estimated Value
- NO Value Range
- "-" for their Confidence Level (meaning the confidence they have in the accuracy of their estimated value)
- Incorrect map / satellite info. For example, I searched for one of my properties and the satellite image pointed out the house next door.
- Some outdated property information from county tax records (for houses that had additions built on but tax records still indicate the previous size). This one isn't Housefront's fault, but it goes to show that you still need to do your own due diligence and sometimes there just aren't any shortcuts to actually seeing the property.

Still, they did better than Lending Tree's Domania, who couldn't even find my personal residence, saying "We're sorry...
Please make sure you have entered the correct Zip code." (I tried 6 times)

I'm sure these sites will continue to get better as they build their databases and improve whatever algorithms they use to calculate an estimated value. But for now, they should definitely be taken with a grain of salt.

Landlord Tried for Renting to Illegal Immigrants

Here's an interesting article from Apartment Finance Today

The message is clear: be careful whom you rent to - and whom you hire as a property manager or apartment manager. The government is continuing to crack down on illegal immigration and this can impact real estate investors in a big way.

On June 23 in Lexington, KY, landlord William Jerry Hadden and his son Jamey are being tried in federal court, for charges of 24 counts each of harboring illegal aliens and encouraging illegal immigrants to remain in the country.

This precedent means that landlords all over the country can be charged under federal law for renting apartments to illegal immigrants.

Hadden could lose his properties (2 apartments totaling 165 units and worth about $5 million) in addition to facing jail time.

According to the Lexington Herald-Leader, this case seems to be the first time the federal government has tried to prosecute landlords for renting to illegal immigrants.

So for all you rental property owners, it looks like we all have to be more careful than ever in doing background checks or making sure that our property managers are doing background checks.

Abandoned Properties Are Next Wave of Subprime Mortgage Mess

I found an interesting article on HometownDekalb.com featuring Emory Law School's housing expert Frank Alexander.

"While Congress wrestles with how to ease the subprime mortgage crisis, housing expert Frank Alexander of Emory Law School is looking at what will happen in the future to neighborhoods with an overabundance of foreclosed and abandoned properties.

Alexander testified before a congressional subcommittee last week on how federal funds can be targeted to neighborhoods most affected by rising rates of vacant and abandoned properties. His testimony focused on which data best enable the federal government to target new funds to the neighborhoods most in need.

The proposed legislation is significant, says Alexander, because "it recognizes post-foreclosure REO (real estate owned by lenders) is a very different problem than the housing foreclosure crisis generally."

"Once foreclosures have occurred, the costs of vacant houses are borne by the adjoining property owners, the neighbors down the street, the surrounding community, the schools and the local governments," he says.

"A vacant house drives down the value of adjoining property within one-half mile by one to three percent. In addition, it is quickly vandalized, which drops the value further, calls to police and fire departments increase, and property tax revenues decline."

As revenues decline, the problem is exacerbated. "Every state in the country is facing deficits, along with many city and county governments," says Alexander. He predicts that as the foreclosed property inventory continues to grow over the coming months, federal legislation to deal with the issue will become increasingly important.

Alexander's testimony focused on H.R. 5818: Neighborhood Stabilization Act of 2008, which would allocate $15 billion to state and local governments hardest hit by the foreclosure crisis. The bill proposes that the communities most affected acquire and convert foreclosed properties into new productive uses, including affordable housing."

For the rest of the article, go here