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Tuesday, June 12, 2007

Tax relief may work against real estate vultures

Tax relief may work against real estate vultures

mhaggman@MiamiHerald.com

For two years Magdiel Guillemi watched the condominium towers go up across South Florida and waited for his chance to buy in. Now the 25-year-old aluminum company executive thinks his time has arrived.

With the housing market stuck in slow motion, more and more condos nearing completion, and many jittery preconstruction buyers wanting out as closing day approaches, Guillemi's betting he'll be able to buy at steep discounts. Then he hopes to sell for a profit, just as flippers did when the market was on the way up a few years ago.

Call it the contrarian view of real estate investing. While the market appears stone-cold to many individual buyers and sellers, others -- the so-called vulture investors -- see opportunity.

Guillemi says he's already finding bargains but he wants to act fast: The Florida Legislature starts a special session this week to consider lowering property taxes -- a move he thinks could spur renewed buying activity and endanger the low-cost deals he's scouting.

''If they cut taxes that will motivate individual buyers,'' said Guillemi, who plans to start buying in the next few weeks. ``And I want to get in before they do. I don't want to be left with the crumbs.''

Large investor groups and hedge funds are also scouring the region for bulk deals at bargain prices.

At the height of the 2001-2005 housing boom, it seemed everyone was getting into real estate, hoping for fat profits. But a separate class of speculators sat out during those frenetic days, betting the market would be bid to unsustainable heights yet still hold long-term value.

Their gambit: Buy on the dip and ride the market up.

The question for these investors is when to buy. Many observers say the market hasn't yet hit bottom, others say the time is right.

But for the vulture investors, who have pooled cash and waited for their big chance to score from a market correction, this week's special session brings a twist. It's spurring some like Guillemi to accelerate their plans and others are hoping legislators don't accomplish much.

Peter Zalewski, a former journalist who a year ago started condovultures.com -- a company that helps buyers find bargains in a downturn, said he fears decisive action in Tallahassee will provide a jolt that could potentially undermine his plans.

''There is an urgency that is being created by the legislative issue,'' Zalewski said. ``If they resolve the property tax issue, the market will get some medical attention. We don't want that, we want to bleed out the market some more.''

Of course, few will feel badly if vulture investors' prospects evaporate. Home builders, brokers and many homeowners hope Zalewski's thinking that a cut in property taxes will give the region's anemic housing market a shot in the arm is right. The Latin Builders Association and Builders Association of South Florida are both pressuring leaders in Tallahassee for sharp cuts.

But not everyone is convinced a property tax cut in Tallahassee will cure the housing markets ills. Among the other issues the market must work through are:

• A giant oversupply of homes: more than 76,000 were listed for sale in April in Broward and Miami-Dade counties compared to some 50,000 a year ago. Over the next 18 months about 20,000 new condo units are expected to come onto the market in Miami-Dade County alone, possibly spiking unsold inventory as those units are put back on the market for resale.

• Insurance rates have not come down. Condo associations and individual homeowners are still grappling with hefty premiums.

BIG BUYERS

Analyst Jack McCabe, who is advising large vulture investors on bulk deals, said big investment groups aren't as worried about tax rates as individuals -- saying such costs can be spread out across big buyers' portfolios.

Last week McCabe announced the completion of the first market-corrected deal he's worked on since the slowdown began. While short on specifics, McCabe said a multibillion-dollar private investment fund bought a substantial block of newly built condominiums from a publicly-held home builder in Florida. His investor client, he said, was chosen because of its ``ability to close quickly in an all-cash transaction, noncontingent on financing.''

Currently, he said the market is too sick to recover from a tax reduction alone. A big property tax cut may reignite buying now, he said, but would effectively create a false bottom.

''Meaningful reduction will slow down the correction cycle but the correction is still inevitable,'' said the Deerfield Beach analyst, who has warned for some time about too much construction going up too fast. ''The market is so sick it will take a while to cure this,'' he said. ``This is not a head cold, it is more like pneumonia.''

But such doomsayers also believe the market is poised for brighter days ahead. McCabe says that barring calamitous hurricanes, the market will have righted itself by 2010 -- just as the first baby boomers turn 65.

''No one is more bullish on Florida long-term than me,'' McCabe said.

It's such thinking that prompted corporate raider Carl Icahn to announce last week that he would continue efforts to buy Bonita Springs-based WCI Communities. And Zalewski spent last week showing property in South Florida and Central Florida to two investor groups, one from Michigan and another from Colorado.

DEEP DISCOUNT

Guillemi, meanwhile, is focusing on a unit at the Brickell on the River condo in Miami. He said the owner bought it for $341,000 and is trying to sell for $280,000.

''The seller has two other properties under foreclosure and is having trouble making mortgage payments,'' said Guillemi, operations director of FDS Aluminum in Pompano Beach. ``I'm trying to pick it up for $260,000.''

So with an eye on the special session in Tallahassee, he's ready to move now. ''With tax reform you will have two things pushing people into the market: lower prices and lower taxes,'' Guillemi said. ``I'm not going to wait. Of course, you have to be smart about it. There is a lot out there and you can't get married to the first girl you see.''

 
Posted at 2:41:31 PM
 
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Updated: Friday, March 22, 2019


Septic or Sewer: Whats the Difference?

All of these functions >

1. Sewer system

2. Septic system

Sewer systems are different than a septic system because one >

Why Many Homeowners >

A sewer system requires no maintenance, but youll need to pay monthly fees for using the system. Local governments allow the homeowner to hook up the local sewer system, which will ensure all of your waste is gone forever.

Youll pay monthly, but you never have to worry about septic system costs and repairs.

Sewers can become clogged and they may backup over-time. This happens when neighbors and others in the community are flushing wet wipes or pouring grease down their drains. When major blockages occur, everyone is impacted.

You may not pay for the unclogging upfront, but your fees may rise to cover the expenditures.

Why Homeowners are Moving Back to Septic Systems

A septic system is your own system, and this is a tank system thats often able to hold 1,000 gallons of water. The three-layer system connects to the home, and the system is placed in the ground on the homes property.

Often seen as an eco-friendly option, you wont pay monthly fees to use your septic system.

Clogging of the system is also your fault. If the system becomes clogged, this is due to your actions: i.e. youre flushing items that cannot breakdown in the system.

Septic systems can be costly to install, and all of the maintenance and repair fees must be paid by the homeowner.

But "sewer betterment" fees are often imposed on homeowners, with some fees being in the 10,000 range. This may include fees for installation and repairs. When these fees are considered, this is often higher than the cost to install a septic system on the land.

Septic systems do need to be pumped, and this can cost 200 - 300 every 3 ndash; 5 years.

Concrete tanks can last 40 years with proper maintenance, while steel tanks have a lifespan of 15 ndash; 20 years.

"Septic systems should be inspected and pumped a minimum of once every three to four years. You may not be experiencing any problems now, but a full septic tank may allow unwanted solids to flow into the drain field, which is the part of the system that consists of a distribution box and a series of connected pipe," explains Apollo Drain.

Septic systems also offer the benefit of being able to build a home in a remote area, which may not have a sewer system connection close by. But when sewer systems are close to the home, theyre often chosen because they can handle large amounts of waste at a time. During storm periods where heavy rains occur, sewer systems are able to handle the water with much greater ease than a septic system.

nbsp;


> Full Story

How to DIY Abstract Art

Yes, you can scour the internet for abstract art in every color, shape, and size, and yoursquo;ll pay a pretty penny for a lot of it. Or, you can D-I-Y your A-R-T. Itrsquo;s easier than you think to create something that looks like you dropped some serious cash to dress up your walls, and you might even have a good time while yoursquo;re at it. Here are a few ideas to get your juices flowing.

Create dimension

Ever see those abstract paintings that have texture and dimension and wonder how they got such a layered look? This tutorial uses a clever trick to approximate the look of ldquo;elevated brush or painting-knife strokesrdquo;: tissue paper Who ever thought an item you use to blow your nose could be so beautifully useful.

Get the right tools

Yoursquo;ll need a canvas, some paint, and at least one paintbrush, obviously, to make your art. But incorporating some other tools can give it a unique, professional look. Drywall spatulas give this painting nbsp;its textural flair without the brush strokes. Varying the usage and pressure of the spatulas and paint brush allow you to create as muchmdash;or as littlemdash;texture as you want.

Pass the alcohol

The alcohol inks, to be exact. If you havenrsquo;t heard of this before, itrsquo;s about to become your favorite craft item. ldquo;Alcohol inks are an acid-free, highly-pigmented, and fast drying medium to be used on non-porous surfaces,rdquo; said Create for Less.

While the finished product of this abstract art looks complicated, itrsquo;s actually a simply process, and one that creates cool-looking art that can be done and hung in a matter of minutes. Watch the tutorial to see how easy it is, but beware: Yoursquo;re dealing with fire here, so, if yoursquo;re accident prone, you might want a chaperone.

And more alcohol

Using rubbing alcohol to blur the lines helps create the ldquo;splash effectrdquo; on this painting. It looks like fluffy clouds to us. One thing is for sure: No one will ever know you did this yourself

Go all Jackson Pollock

Your masterpiece may not end up in the Museum of Modern Art MoMA, but itrsquo;ll sure become the centerpiece of your space Get your splatter on and create a piece yoursquo;ll love.nbsp;This tutorial shows you how. It also shows you how to create your own canvas, but, unless yoursquo;re super keen on this part of the DIY experience, you can save yourself some time and hassle, and maybe even an injury, by picking up a finished, framed canvas at a store like JOANNs, Michaels, or Hobby Lobby.

Dont restrict yourself to just paint

Canrsquo;t find the perfect shade for your art? Tint it yourself This dreamy abstract painting is part paint, part food coloring

Think outside the lines

Animal print is the inspiration for this spotted art. Black and gray paint on a white background keeps it neutral, and the gold-sprayed framed provide a pop. Do like the artist and use watercolors to ldquo;vary the depth of the spots to make it look more natural.rdquo;

Make it fancy

A little touch of metallic takes this art to the next level. This cool painting uses golf leaf, but you can also experiment with metallic paint if yoursquo;d rather.


> Full Story

Kitchen Cabinets: Paint em Yourself or Pay the Big Bucks?

Preparation is key when painting your cabinets, and the number of steps yoursquo;ll need to follow to achieve a quality finish can seem impossible. Yoursquo;ll want to remove the doors, drawer fronts, and hardware. Fill in any holes and smooth out any gouges. Degrease, sand, vacuum, wipe, sand some more, vacuum some more, wipe some more. And maybe then yoursquo;ll finally be ready for primingmdash;but not painting on the actual color, because that comes after priming.

Frankly, every step is important, and if you miss one, you could end up with a result yoursquo;re unhappy with, or a finish that doesnrsquo;t hold up. If yoursquo;re the type who isnrsquo;t likely to finish what yoursquo;ve started, perhaps you shouldnrsquo;t embark on this paint-your-own adventure. Your old, dated cabinets are still better than half-old-and-dated, half-done cabinets. But if you still want to go for it, at least be prepared for a few realities:

Yoursquo;re never going to get a look as good as the professionals

You may come close, and you may fool your friends, but therersquo;s a reason you pay professionals a couple to several thousand dollars for something verging on perfection.

Your arms will hate you

Which is not such a bad thing, really. You can skip a few ldquo;arm daysrdquo; at the gym if you really put your effort into it.

Yoursquo;ll never want to look at another piece of sandpaper again

Get ready for hand cramps. Thatrsquo;s how you know yoursquo;re doing it right. Sanding is critical to achieving the look you want and making sure the paint sticks.

ldquo;Sand all surfaces with the grain using 100-grit paper. To make sure no bits of dust mar the finish, vacuum the cabinets inside and out, then rub them down with a tack cloth to catch any debris that the vacuum misses,rdquo; said painting contractor John Dee on This Old House. ldquo;Hand sanding is the best technique on oak because you can push the paper into the open grain, which a power sander or sanding block will miss."

The dust is NEVER-ENDING

Refer back to all that sanding. Seriously. This is not a job for any old vacuum. You can rent an industrial vacuum at Home Depot, and itrsquo;s a good idea to also have a smaller vacuum with crevice tools and more rags for wiping and cleanup than you ever imagined needing for anything.

You need a system for keeping track of every door, drawer, and piece of hardware

Sounds easy, but one mistake and yoursquo;re in a world of hurt. If you donrsquo;t label every single door and drawer correctly, theyrsquo;ll get mixed up and they wonrsquo;t fit correctly. While yoursquo;re at it, donrsquo;t forget to label your hinges and handles, too.

ldquo;I read a dozen blogs that said to label my hinges so that they would all go back in the same places,rdquo; said Cori George of Hey, Letrsquo;s Make Stuff. ldquo;But I figured all the hinges were the same, so why spend the time? Huge mistake. The hinges had worn in specific ways in the last two decades and a half, so that after they were painted and I was putting the bathroom back together, none of the hinges worked quite right. I ended up sort of forcing everything into place, and while the doors work, they donrsquo;t work as well as they would have if Irsquo;d labeled them.rdquo;

There will be smudges. And maybe even an errant hair.

Yeah, it happens. Just remember to breathe as yoursquo;re redoing the same cabinet door for the fourth time.

The fumes are horrible

Speaking of breathinghellip;it wonrsquo;t be easy, depending on what kind of product you use.

When someone else is doing your cabinets, you can escape the fumes by gathering the family in a different part of the house for the couple of days of painting, or, even better, check into a hotel and take a little staycation. The DIY version means yoursquo;re all up in those fumes for however long it takes to get your cabinets done, which is likely longer than what the pros can accomplish. The degreaser yoursquo;ll likely need to use to get your cabinets cleaned up before applying any primer or paint is stinky, and certain kinds of paint are no better.

ldquo;In truth, oil primer and paint adhere the best and give the longest-lasting results on cabinets, but because of VOCs, oil is outlawed in many states,rdquo; said Albert Ridge of Ridge Painting in NYC on Remodelista. ldquo;A good alternative is water-soluble waterborne paint, such as Benjamin Moorersquo;s Advance, which is something like a latex-oil combo. But note that it dries quickly, so itrsquo;s wise to add an extender that allows you to the time to get a nice finish without brush marks. And if yoursquo;re painting something plasticky or otherwise hard to paint, Stix is a good primer to know about.rdquo;

The good tools are a worthwhile splurge

Professional painters typically want to spray cabinets because the finish comes out so smooth, although some do prefer the control a brush can bring. No matter which option you go with, you want the best tools you can afford. Paint Sprayer magazine tested a number of options, and the top-ranked sprayer is only 129mdash;a small price to pay for a smooth finish. You do want to make sure you practice ahead of time if yoursquo;re going this route. Poor spraying technique could result in an uneven finish or lots of drips.


> Full Story



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