Direct Communication with Your Actual Lender

When your loan is kept in-house, you never have to worry about your debt being sold to a third-party servicer. You maintain a direct line of communication with the people who actually approved your financing. This transparency eliminates the frustration of “lost in translation” messages that often occur when dealing with large, disconnected loan providers who outsource their customer service.

The Security of an FDIC-Insured Bank

Partnering with an FDIC-insured bank provides an essential layer of institutional safety for your investment strategy. Unlike independent mortgage companies, we are held to rigorous federal standards of stability and capitalization. This means your non-recourse loan is backed by a regulated institution that prioritizes long-term financial health over quick profits from selling off loan packages to secondary markets.

Faster Decisions and Streamlined Processing

In-house lending means in-house decision-making. Because we don’t have to wait for external investors or secondary market aggregators to sign off on your file, we can move at the speed of your real estate deal. This streamlined approach allows us to be more responsive than other loan providers, ensuring your IRA doesn’t miss out on a competitive property due to bureaucratic delays.

Flexible Solutions for Non-Recourse Needs

Non-recourse lending is a specialized niche that requires a deep understanding of IRS regulations. By maintaining our own portfolio, we have the flexibility to tailor solutions to your specific investment goals. Whether you are purchasing a single-family rental or a commercial warehouse, our in-house team has the expertise to structure financing that protects your IRA’s tax-advantaged status effectively.

The decision of where to secure your financing is just as important as the property you choose to buy. First Western Federal Savings Bank offers the unique combination of specialized expertise and the unwavering stability of a portfolio lender. Contact us to experience how our in-house approach provides the peace of mind and professional service your retirement portfolio deserves.

The post The Advantages of Keeping Loans In-House: What it Means for Non-Recourse Borrowers appeared first on First Western Federal Savings Bank.

Read through these key points to consider before diving into this investment strategy and contact us for more personalized direction!

Limited Recourse

Unlike traditional loans, IRA non-recourse loans limit the lender’s ability to go after your personal assets if you default. However, this also means that the lender (First Western Federal Savings Bank, for example), can only seize the property itself in case of default, putting your retirement savings at risk.

High Interest Rates

Non-recourse loans can come with higher interest rates compared to conventional loans due to the increased risk for the lender. Be sure to factor in these higher costs when evaluating the potential returns on your real estate investment.

Property Valuation Risks

Since non-recourse financing is based on the value of the property rather than your creditworthiness, getting an accurate appraisal is crucial. Overestimating the property value can lead to higher loan-to-value ratios and potential financial strain in the future.

Prohibited Transactions

Using IRA funds to invest in real estate through our non-recourse loans in South Dakota comes with strict rules and regulations. Engaging in prohibited transactions, such as personally benefiting from the property before retirement age, can result in hefty penalties from the IRS.

Find Your Path With First Western Federal Savings Bank

Before pursuing an IRA non-recourse loan for real estate investment, it’s essential to consult with our team to fully understand the risks and implications involved. Conduct thorough research, weigh the potential returns against the risks, and ensure compliance with IRS regulations to make sound investment decisions for your retirement portfolio. Get started with First Western Federal Savings Bank now!

Contact Us Now

The post Risks and Considerations of Using IRA Non-Recourse Loans appeared first on First Western Federal Savings Bank.

Read on as we delve into the details of these approaches and highlight the key differences between the two. Learn more about your IRA options with us today!

Self-Directed IRAs

A self-directed IRA allows account holders to have greater control over their investment choices. Unlike traditional IRAs, which limit investments to stocks, bonds, and mutual funds, a self-directed IRA gives you the chance to invest in real estate, precious metals, private equity, and more. This flexibility empowers you to diversify your retirement portfolios beyond the stock market.

IRA Non-Recourse Loans

An IRA non-recourse loan through First Western Federal Savings Bank, however, is a unique financing option that allows individuals to leverage their IRA funds to invest in real estate. Unlike traditional financing, non-recourse loans are structured so that the lender’s only recourse in the event of default is the collateral itself (i.e., the property being purchased). This means that the borrower’s other assets are protected, providing a level of security for IRA investors seeking to use leverage.

What Makes Them Different?

One of the primary distinctions between self-directed IRAs and non-recourse loans in South Dakota is the investment strategy employed. While the former focuses on expanding investment options across various asset classes, the latter specifically enables real estate investments through leverage. Additionally, the risk profiles of these approaches differ, with self-directed IRAs offering more diversification but potentially higher volatility, and non-recourse loans providing leverage benefits but with associated risks.

Plan Ahead With First Western Federal Savings Bank

By carefully assessing your financial goals, risk tolerance, and investment preferences, you can determine which approach aligns best with your retirement strategy and take proactive steps toward building a robust portfolio for the future. Contact First Western Federal Savings Bank now in Rapid City to learn more about our non-recourse loans in South Dakota. 

Let’s Discuss Your Options

The post IRA Non-Recourse Loans & Self-Directed IRAs: What You Need to Know appeared first on First Western Federal Savings Bank.

While this may seem dramatic, it could be very true. No one knows for certain what life, or the market for that matter, will be like post-pandemic, so directly adapting to the challenges will help you more than you think in the log-run. Keep reading to find out how you can prepare your property for renters this summer and in the coming year. If you’re interested in investing in real estate, speak with a non-recourse loan lender at First Western Federal Savings Bank today. We look forward to working with you.

Improve Your Curb Appeal

People are discouraged from leaving their homes and interacting with others, unless it’s at a distance of six feet, of course. Because of this, potential renters are not going to showings or tours of houses, but they are driving by the properties and inspecting them from a safe distance. To help improve your chances of getting tenants, you will need to understand curb appeal. We’ve talked about why curb appeal is so important before,  but making your property stand out matters now more than ever. Curb appeal is made up of the features and design elements of your property and its landscaping that makes its first impression on you. 

If your home, or your property, looks like every other piece of property in the neighborhood, then it doesn’t stand out, and it’s going to be overlooked. You may be limited with what you can do, but here are some things that deserve some consideration if you want to make your house remarkable. 

• Repair or replace the roof. Get it inspected and make sure there are no small problems that could be big problems later down the road. The roof is easily one of the most important aspects of the home because it shelters your tenants from the outside elements. 
• Re-landscape if you need to. The landscaping doesn’t have to be elaborate, but even simple changes like edging the lawn, adding flower beds, having lush and well-kept bushes and tall shade trees can help. The concept of a yard is part of the American Dream and is well-incorporated into the idea of home. It entices people. 
• A well-kept exterior that is in good shape will further the appeal of the property to potential renters. The windows should be clean and in good shape, there shouldn’t be any chipped or peeling paint, and debris like moss, bird droppings, and dirt should be cleaned off. 

Make Sure There are Plenty of Videos and Photos On the Listing

Open houses and personal showings are not available during this time, but it doesn’t mean that you can’t show potential renters what they’re missing out on. Pictures, videos, 3D tours, and digital showings will help potential renters get a better understanding of the property they’re interested in. Taking advantage of digital media and getting creative with technology will give you leverage in the current state of events, giving you the exposure you need and keeping you competitive. 

It is imperative that you hire a professional photographer and invest in high-tech devices that give prospective tenants a good idea of what they’re getting into. You’ll most likely have to include pictures or videos of specific appliances and features of the property, working closely with those who are interested in closing to give them the full idea of the home. 

Price Your Property Right

Pricing your property right is something that cannot be emphasized enough, because nothing will kill a deal faster than an overpriced property, and an owner that won’t budge on the price. Get the help of a real estate agent to help you price your property appropriately in terms of cost by square foot. Don’t let your ego play a part in setting a price, but you can have some say in setting it. You want to choose an attractive price that is going to keep the property competitive, but remember that especially during these times, you shouldn’t set your expectations too high.

Be willing and open to discuss price changes and compromise with the renter if you need too. Many buyers and renters are looking for a deal right now due to the state of the economy, and will turn elsewhere if you are unwilling to meet them halfway in their requests. Be as accommodating as you can be when discussing the price and be mindful that now isn’t the time to drive a hard bargain, but have a price in the back of your head that you don’t want to go below. 

By partnering with a non-recourse loan lender, you can use your IRA to start investing in real estate, if you haven’t already. This is a great way to make a passive income if you plan on renting out your new properties or selling them later. Remember that investing in property will not always yield a high return on your investment — you will need to invest in the right property to ensure that you have interested renters and buyers. To discover the potential yourself, contact First Western Federal Savings Bank. We have helped hundred invest in real estate, and we’d like to help you too! Speak with a non-recourse loan lender today to learn more. 

The post Tips for Getting Renters This Season appeared first on First Western Federal Savings Bank.

Before we begin, we would like to clarify a couple of terms for full comprehension. 

• Liquidity – Liquidity refers to how easily assets can be converted into cash — how quickly you can get your money whenever you need it. It could be your emergency savings account, or simply the cash that you can access in case of unforeseen happenings or financial setbacks. 
• Self-Directed IRA – A self-directed IRA is a type of traditional or Roth IRA, allowing you to save for retirement on a tax-advantaged basis, but has the same IRA contribution limits. 
• 401(k) – This is a retirement savings plan that is sponsored by an employer. It lets workers save and invest a piece of their paycheck before taxes are taken out. Taxes on your 401(k) aren’t paid until the money is withdrawn from the account.

Bolstering Your IRA and 401(k) Funds

For self-directed IRA investors, now is the time, if there ever was a time, to have some extra liquidity and available funds in those accounts. Whether that is for present and future RMD’s, funds for repairs on those rental properties that need work, or money for non-recourse loan payments when tenants have little to pay, it is critical to have liquidity in the retirement accounts. As a non-recourse lender, we require liquid reserves to be there for just such times. In addition to being one of our requirements, we also recommend available funds as a part of your long-term investment strategy, as well as your short-term strategy. Having liquidity and available funds to sustain whatever you are facing next is paramount to surviving the coming months/years. So just how can you bolster your retirement accounts liquidity? Here are a few ideas:

Make Annual Contributions

The tax code allows for annual contribution to IRAs and Solo 401(k)’s up to the current limits. According to the IRS, for 2019 and 2020, your total contributions to all of your traditional and Roth IRAs cannot be more than $6,000, and if you are aged 50 or older, then the limit is $7,000. Further, your annual contribution cannot be more than your taxable compensation for the year, if your compensation was less than this dollar limit. Each type of account has its own limits, from a  base of $6,000 per year in Traditional IRAs up to a much greater amount in Solo 401(k)’s. You can, up until April 15th on a normal year, make contributions for 2019, and in 2020 if you have earned income this year that qualifies. Speak with your advisor or your custodian if you need to further understand what your limits are. 

Keep Cash or Liquid Assets In Your IRA or 401(k) Instead of Investing Them Further or Liquidating Them

If you own rental property inside the IRA or 401(k) and have a good tenant(s) that pay on time, keep extra cash or liquid assets in that account rather than investing that money in other illiquid assets. This keeps you safe in times of financial hardship or uncertainty at least until there is some clarity in the economy or in your personal finances. If it is all in one place, you can keep track of it, use it if you need to, and continue growing it. Your 401(k) is designed to hold your money until you retire.While liquidating these funds prior to retirement is completely feasible, some Internal Revenue Service penalties will reduce the value of your asset. The IRS considers 59 ½ the minimum retirement age for liquidating your assets, and should you liquidate your assets before then, you may be hit with a 10 percent early withdrawal penalty. 

There are exceptions, however, in choosing to withdraw assets from your 401(k). In the case that you are leaving your job, and are 55 or older, you will not be assessed with the 10 percent early withdrawal penalty. IF you are facing financial hardship, you are also able to withdraw money from your 401(k). However, this is a loan, and you will need to pay this money back via payroll dedication.  

Transfer From Other Retirement Accounts

Before moving forward with moving assets from other retirement accounts, check with your current self-directed custodian. If you have another IRA elsewhere besides your self-directed account, there is a possibility that you will be able to transfer funds from another IRA to your self-directed IRA or 401(k) — as long as the account qualifies to do so. Typically, this is not a taxable event. There are three ways you can move assets from one eligible retirement plan to another:

• Transfer – During a transfer, you can move your assets directly from one eligible retirement plan to another without ever taking control of the assets. However, transfers are limited to the same type of retirement plan, like IRA to IRA, or 401(k) to a 401(k).
• Direct Rollover – A direct rollover is a trustee-to-trustee transaction, and does not have the same kind of restrictions as a transfer, as you can rollover assets from a 401(k) to an IRA. The transaction is tax-free, but for each direct rollover, the IRA or plan provider will report the transaction to the IRS.
• Indirect Rollover – In an indirect rollover, you withdraw the money, taking control of assets and then deposit the money into another eligible retirement plan. An Indirect rollover is tax-free, but only if the assets are transferred to another plan within 60 days. 

Make Excess Contributions

There is a provision in the IRS Tax Code under Publication 590 that allows for, under certain circumstances, excess contributions over and above the regular limits set by the IRS. There are tax penalties for doing so, but you should check with your accountant or financial advisor to see what the implications are for contributing more than the normal annual limits. 

Loan the Self-Directed IRA Funds

There is a provision in the Department of Labor (DOL) Bulletin #80-26 that allows the IRA owner to lend his or her IRA funds when liquidity problems arise within the IRA, which could contribute to a foreclosure on a non-recourse loan if loan payments are not made timely. As stressed before, it is recommended to refer to DOL Bulletin #80-26 as well as your custodian for advice on this matter before making any decisions. 
These are some common strategies that can help your individual retirement account weather times of uncertainty. Just like you personally should have a buffer of liquid funds for emergencies and unexpected expenses, your IRA should have a liquid buffer as well. Speak with your advisor or custodian about how to bolster your accounts liquidity. If you are interested in a non-recourse loan, then speak with a lender today.

The post Bolstering the Funds in Your IRA/Solo 401(k) and Maintaining Liquidity in Challenging Times appeared first on First Western Federal Savings Bank.

But how do you get the most out of your investments? Once you’ve purchased a property, you can maximize your investments by investing in the house itself. But don’t just start remodeling the house with abandon. We’ve found that some projects have a higher return on their investments than others. To help guide you in your next projects, we’ve assembled this quick-hitting guide on the home remodeling projects that have the best ROI.

Why Remodel a Home You Can’t Live In?

When you use an IRA non-recourse loan to purchase a property, it legally cannot be your primary residence. That means that many people use their non-recourse loan to purchase rental properties or vacation homes. Some might be hesitant to invest in a home that they can’t live in, but by remodeling some spaces and places in the property, they can still get value out of it. 

Indeed, by remodeling your rental or vacation properties, you’ll enjoy a variety of benefits. First, you’ll attract more potential renters or vacationers to your properties. New fixtures presented through modern styles are always in demand, and your newly remodeled spaces can offer just that. The increased attention your properties get means you can be more selective in who you offer the spaces too as well. You’ll get a more reliable tenant in your properties. Additionally, you can ask for higher rents for these places. You’ll find that you’re making more money in the long-term by remodeling your investment properties.

As an added benefit, when you’re ready to sell your investment property, you’ll find that you’ll get better offers, even in areas with competitive markets. 

How Much Should You Invest in Home Remodeling?

We’d all love to be in a situation where we have an unlimited budget to completely reimagine our investment properties. The fact is, however, most of us are working with a fairly strict budget and want to get the most out of each dollar we spend. So how do you budget accordingly?

First, let’s take a look at how much the average remodel might cost. HomeAdvisor has found that the average cost of a home renovation or remodel projects is about $18,000 for a home with 1,000 square feet. This cost quickly jumps to the $36,000 range as the square footage of the home expands from 3,000 to 4,000. There is a lot that accounts for these ranges of prices, the age of the home being chief among them. Older homes simply require more work to bring them up to modern standards for necessities like plumbing and electricity. Generally, you can expect to spend about $100 to $200 per square foot of space you’re remodeling or renovating.

Another way to think about how to budget for your remodeling project is to look at the value of the property itself. Experts suggest that you shouldn’t invest more than 10 to 15 of the value of the home on a single room. For example, if you want to remodel the kitchen of a property worth $200,000, you don’t want your budget to exceed $30,000.

Which Space Should You Remodel First?

The short answer to this question is, of course, “it depends.” The longer answer is that you’ll have to balance subjective and objective information to make that decision. For instance, subjectively, some rooms might simply look dated and need a refresh. Objectively, other rooms might need new fixtures like sinks or toilets. You’ll also have to think about your budget. If you’re remodeling multiple rooms, create a priority list and go from there.

Remodel These Things for the Best ROI

Now we know why you should remodel and how to budget for it, so let’s explore the projects that will help you earn the most.

Doors and Entryways

Turn on any home improvement show on any channel and you’ll see that they spend countless hours pouring over paint chips for accent walls in living rooms. What you won’t see is any thought put into the doors and entryways. This is surprising since your doors and entryways are a great way to get money back on your investments. 

So why are doors so valuable? It’s all about presentation and protection. Modern home designs, for the most part, have made the garage door an integral part of the front of the home. That means it’s often the first thing that renters and buyers see when they first visit the home. Similarly, the front door is a symbolic focal point for your buyers and renters. Having updated doors is a great way to catch their eye and draw their interest. Additionally, new doors are more secure than old doors. In particular, steel doors are an easy way to protect your home.

The ROI for new doors is remarkable. The 2019 Cost Vs. Value Report found that replacing the front door with an updated steel door has a 74.9% ROI. Even better is replacing the garage door, which fetches a 90.1% ROI. Investing in these can open the door to other remodeling projects.

Bathrooms

A remodeled bathroom should be on nearly every project list. As Americans spend less money on luxuries like trips to the spa or salon, they’re spending more time pampering themselves in their bathrooms at home instead. 

Remodeling the bathroom can be as complicated or as simple as you want it to be, but the more you put in the more you get out. For instance, a basic remodel would be to simply replace the fixtures with updated examples, give the room a new coat of paint, and call it done. Something as simple as this will net you a 60.2% ROI. A respectable return but one that can be improved by investing a little bit more. Adding an addition on to the bathroom and remodeling more fixtures and features can add up quickly. An addition also nets a 60.6% ROI, and an upscale nets a 67.2% ROI.

While these projects may have great returns, unless you’re a gifted carpenter, you might need to partner with a local contractor to finish projects like these. Typically, you’ll find that you have the skills to do simple remodel projects like replacing tubs and toilets and even installing new tile and vanities.

Patios and Decks

People love spending time in their backyards. From birthdays to BBQs to simple relaxing evenings, your renters and tenants will spend time in the backyard, so why not invest in it?

A redesigned patio space creates a welcoming and useful area that can be enjoyed year-round. The inclusion of features like a fire pit provides a natural gathering point, and comfy seats can entice people to spend more time outside. If fire pits aren’t an option for you, you can use other features like bars, water features, or even something as classic as an outdoor rug with a table and chairs. When you remodel your patio, consider putting down flagstone, or another high-end material. When covered by something like a pergola, you’ll have an inviting space that will offer a 55.2% ROI.

If your investment property doesn’t already have a patio, this might be a great chance to put in a new deck. Decks can be added to nearly any story of your home, which can create some great elevated social spaces. In many cases, property owners are treating their decks as outdoor living spaces, connecting their indoor spaces with sliding glass doors. Adding a deck nets different results depending on the type of material used. For instance, wood is a timeless choice and has a 75.6% ROI. Composite decking is a little more affordable way to construct a great looking deck and still leads to great results, an ROI of 69.1%.

The Kitchen

Besides bedrooms, most people spend the majority of their time in the kitchen. They’re natural gathering spaces, after all. With fewer people spending money to go out to eat, investing in the kitchen is an obvious alternative. 

Adding modern fixtures and appliances to your kitchen ensures that you have a workspace that highlights form as much as function. It’s also a great way to attract buyers, renters, and more to your property. To get the most out of this remodel, make sure the appliances are your main focus. Replace them with new energy-efficient models. You’ll save money over the lifespan of the appliance that way. Next, take a look at cabinet faces and replace them with new panels and stylish hardware. Countertops should come next, followed by flooring, wall coverings, and paint. Even simple remodels like new cabinet faces and a new range can result in an 80.1% ROI.

New Siding

There’s no denying that most remodeling projects take place inside the home, but some of the exterior projects are just as, if not more so, important. Like your doors and entryways, the siding on your home helps to establish the first impression that visitors and renters get of the property. Worn out and weathered siding can turn off potential renters even if the interior has been refreshed. 

You can expect to pay about $16,000 for 1,250 square feet of siding. While that might sound like a lot, those costs are tempered a little bit when you realize that it could lead to a 75.6% ROI. It’s a smart idea to replace your entryways at the same time as the siding for a total makeover of the exterior of the property.

Master Suite

Everyone wants to feel safe and relaxed in their home, whether they own it, rent it, or are simply staying for a vacation. One of the best ways to create that feeling is to add or expand the master suite in the property. An addition to the home can be added to the side of the building or to the top in some cases. As you make this addition, consider the living space of the bedroom, but also include features like a master bathroom and walk-in closets. 

While this is certainly one of the more costly remodeling options, a master suite addition is an attractive feature to include on any investment property. It’s not uncommon to see an ROI of 59.4% on master suite addition projects.

Invest in Real Estate Today

Invest in your financial success and work with First Western Federal Savings Bank. Our non-recourse loans work with your self-directed IRA to help you purchase and invest in real estate. 

With more than 40 years of experience, our knowledgeable lenders can help you make smart borrowing decisions. Contact our non-recourse loan lenders today to find out more and to schedule a consultation.

The post The Home Remodeling Projects With The Best ROI appeared first on First Western Federal Savings Bank.

Getting Your Real Estate License Takes Time

The idea of a real estate license is attractive for some until they realize the amount of work that goes into it. Depending on where in the United States you live, you’ll have to take one or more courses in order to prepare for at least two exams. The first exam is over federal laws, and the second covers your state’s housing laws. All of these courses and exams incur their own costs. 

Once you’ve passed these exams and have been granted your license, you’ll be expected to take continuing education courses to keep up-to-date on the latest changes in laws and regulations in your state. On average, you can expect to pay about $1,500 annually to maintain your real estate license.

But You Get Access to More Resources

While the costs of getting your real estate license might deter some, others recognize that the tools and resources they get in return are more than worth it. Once you’re licensed, you can partner with a local real estate agency and your local Board of Realtors. Between these two groups, you’ll likely be able to access things like discounts, continuing education classes, and other tools.

While these resources may not be directly related to your investment opportunities, they can help you get a greater understanding of the real estate industry as a whole. Having more skills and tools at your disposal can help you make smarter investments using your IRA non-recourse loan. 

With these resources come more chances to network as well. Having a real estate license means you’ll meet individuals who are selling a high volume of properties every year. You can work with them to improve your skills, sharpen your investment strategies, and more. Networking can also lead to more opportunities to invest that you would not have had previously. Some of this networking will come from the brokerage you’re working with, but the rest might come from industry professionals you meet while taking your courses or closing deals.

You’ll Need to Disclose Your Agent Status

Once you’ve acquired a real estate license, you have to share this information with anyone that you’re working on a deal with. This prevents you from knowingly taking advantage of a potential seller. In some cases, investors feel that this disclosure hurts their chances at making a sale or purchase and could keep them from making as much money on their investments. They fear that sellers will recognize that an investor’s offer is probably below their asking price or what the market says it’s worth. 

However, others view their license as an advantage. Having the status of being a real estate agent could actually help to establish trust in potential clients. Sellers might feel more comfortable agreeing to a price knowing that you have a firm background in the real estate market. 

You Get a Connection to the MLS

The Multiple Listing Service is an incredibly valuable tool for real estate agents and investors alike. This system is the fastest way to see available properties on the market and can introduce you to deals and opportunities that you might not otherwise have access to. This system gathers all of the listings posted by brokerage firms in your area and across the country. 

Not only do you have more real estate listings to page through, but you also have historical data about the value of a property that can offer you insights into how you might invest in that property. You’ll be able to see how much the house was sold for in the past and how quickly it sold. You can use this information to compare between similar properties in similar areas. 

While the MLS is undoubtedly a powerful tool, it’s not as much of an advantage as it used to be. With resources like Redfin, Zillow, Trulia, and even Craigslist, sellers are getting their listing out in front of more buyers than ever before. Not only that, but services like these even offer insights into the sales history of a property as well.

You Could Make More Or Pay More

Having a real estate license means regular fees to maintain the license, as well as annual fees to use some of the industry-related resources like the MLS. Additionally, you might have to pay a fee to your broker in the form of a percentage of your commission. For those looking to use real estate as an investment into their IRA, these fees might deter them from getting their license. 

For others, these fees are minimal when compared to the chance for increased profits on sales. Some real estate investors use their real estate license to continue to make an income while they wait for an investment property to be remodeled or for a deal to close.

Partner With Our Non-Recourse Lenders Today

For more than 40 years, First Western Federal Savings Bank has been connecting people with the resources they need to make smart investment decisions. Our lenders offer IRA non-recourse loans that can help you reach your financial and retirement goals. Using these funds, you can invest in properties that you can use as rentals, vacation homes, and more. 

By using an IRA non-recourse loan, you’ll enjoy tax-deffered, or even tax-free appreciation and income from your managed assets. Contact our lenders today to find out more about our lending options and how we can help you start investing in real estate today!

The post Is It Worth Getting Your Real Estate License? appeared first on First Western Federal Savings Bank.

Even the most detail-oriented cleaners sometimes miss a spot though, and the last thing you want is for your new tenants to find your previous tenant’s mess. Before you lease out your property to a new family, make sure you double check these commonly missed spots.

Your Light Switches

In some ways, your light switches are the unsung heroes of your home. Used almost every day without fail, your light switches quickly accumulate dirt and debris. While we may not recognize this at first glance, careful inspection will reveal packed-in grime in the smallest details of the switches. As you clean the room, make sure the last step is to clean out your light switches by scrubbing the switch itself and the base plate using a disinfectant product. With just a little effort, you’ll notice the entire switch itself brightens and becomes one shade lighter.

Your Washing Machine

If your rental property comes equipped with a washing machine, it’s important that you clear this out before the next tenant moves in. It might seem strange that you have to clean something that is designed to clean other things, but washing machines are breeding ground for mold, mildew, and bacteria. When they are not allowed to air out after a load of laundry, washing machines can quickly develop mold. This means that your laundry comes out smelling like dirty gym socks even after a few rinses with soap.

Fortunately, cleaning your washing machine is a fairly simple process. By using some baking soda and vinegar or a specialty product, you can clean out your washer and enjoy fresh and clean loads of laundry again.

The Area Behind the Toilet

Perhaps because they are the most visible part of the fixture, many people are simply content to wipe down the tank and scrub out the bowl of their toilet. This is usually enough to pass the “10-foot rule” of inspection for visitors, but potential residents will be carefully inspecting the cleanliness of the bathroom. The area behind your toilet is notorious for accumulating dirt, dust, hair, and other matter. You’d be surprised how quickly the appearance of your bathroom changes by simply wiping down this area with a mop or sponge and a little bit of cleaning soap.

The Spaces Near Your Appliances

The size and design of most appliances throughout your home means that they are often tucked in the corners, nooks, or designated spaces. As such, the area around your appliances is generally overlooked by departing residents. To make sure that your kitchens and laundry rooms are free from piles of leftover food, hair, and dust, make sure you pull your appliances away from the walls and thoroughly clean these areas. It’s not uncommon to find that there is a pile of trash under a refrigerator. Under stoves and cooking ranges, you’re likely to find crumbs and grease. Simply cleaning up these spaces is a great way to care for the kitchen as a whole, making it a more pleasant space to spend time in.

The Tops of Doors, Frames, and Baseboards

When your residents move out of the space, they’re very likely to wipe down doorknobs and even the sides of doors to remove any signs of fingerprints or dirt. Often, however, the cleaning activities for your doors ends there. The tops of your doors and the frames quickly develop a layer of dirt and dust, and if it’s left unclaimed, it can quickly become an eyesore. A damp cloth with a little bit of cleaning agent on it is all it takes to quickly clear away the dirt and debris on your door tops and frames.

Additionally, it’s easy to forget about the condition of your baseboards when you’re worried about your hardwood or carpeted floors. However, your baseboards suffer from the same wear and tear as your floors do, often displaying marks from shoes, the movement of furniture, and more. To remove scuff marks, use a cleaning product and a soft cloth to wipe it away. You’ll notice that the built up grime and dirt lifts easily. Chips, cracks, and dings from furniture will need to be addressed with either paint or a refinishing product.

We Make Investing in Rental Properties Easy

At First Western Federal Savings Bank, we serve as one of the nation’s leading non-recourse loan lenders. With more than 40 years of experience, we’ve helped individuals just like you get the funding they need to start investing in rental properties. Find out more about our IRA non-recourse loans and contact us today to start your application.

The post Don’t Miss These Spots When Cleaning Your Rental Property appeared first on First Western Federal Savings Bank.

To help separate the wheat from the chaff of the renters market, here are a few things you should look for when finding tenants for your rental property.

They’re Good Communicators

It’s very likely that your first interaction with the potential renter will be through text message, email, or phone call. Good renters will be clear about why they’re contacting you and will have detailed questions ready to ask you from the very beginning of your communication. Not only will they clearly outline what they want from you and why they’re interested in your property, but they will also be polite in asking these questions. After all, respect is a two-way street and if your renter shows that they are respectful of your time and your energy early on in the rental process, this is a good sign that they will continue this pattern of respect throughout their term of occupancy in your rental property.

They Can Provide a Rental History

A rental history is essentially a resume for your potential tenant. When you ask for rental history, it allows you to look at how the potential renter has treated properties in the past. When you ask an applicant for rental history, ask for information about why they’re relocating and where they’re moving from. Be sure you also ask for contact information for at least the last two places they lived or two previous landlords. Asking for the contact information for two landlords is like a small insurance policy. If the applicant has been difficult to work with in the past, the most recent landlord may lie and make them sound better than they are in order to get them to move out more quickly. Calling another landlord is a great way to get a more honest opinion of the renter.

During your conversations with both landlords, ask about things like the renter’s timeliness with rent, how well they maintained the property while they stayed there, and how frequently they communicated with the landlord. The answers to these questions can inform how your experience might pass out should you choose to work with these renters.

They Have the Right Income Level

The common line of thinking is that your potential renter should make at least three times the cost of rent every month. You can confirm this by asking for pay stubs from your rental applicants.

But income isn’t the only financial factor to consider. While some applicants may make three times the rent each month, other dents may prevent them from using those funds as they need. If you’re worried about an applicant’s ability to pay rent on time, it might be worth pulling a credit report. Large amounts of debt could mean that your applicant will struggle to make rent a part of their monthly budget.

A Clean Criminal Record

Many landlords have made a background check a regular part of their responsibilities before approving a rental application. The lack of a Criminal Record is usually a good sign the applicant will not cause you any problems. However, if the applicant volunteers their criminal history, this may be a sign that they’re making an effort to improve their standing and situation. As we mentioned above, this is a sign they have good communication skills.

They Have Long Term Plans to Lease the Unit

A year-long lease is a flexible option for a lot of renters, but isn’t always the best for you. It can be difficult to find new renters in an unoccupied space means no revenue for that period. If possible, ask the applicant how long they plan on staying in the unit or if they have plans to stay in the area for a long period of time. Asking a potential tenant about their willingness to renew their lease even before they signed the agreement may not be a natural part of your conversation, but if the tenant expresses an interest in staying in the area for a while, you might make a point of asking them. Generally, applicants who are interested in staying in the property for multiple years are more invested in taking care of the property. After all, they want a comfortable place to live and you want a well-maintained rental property.

They’re Prompt about Filing and Returning Paperwork

Once you find an ideal candidate, you can start the application process. Candidates who are quick to return applications, provide the information necessary for background checks, and can provide pay stubs and references are the kinds of tenants you want for your rental property. It shows that they’re serious about the rental process, and will be responsive to your requests and needs in the future. It’s also a good sign that they will be prompt with rent and will not be a hassle in the future.

Of course, they can only be prompt in the responses if you provide them suitable time frames. Offer realistic expectations and clear dates on when you need paperwork, checks, and more from them and make sure you follow up on your end as well.

Start Investing in a Rental Property Today

When you work with First Western Federal Savings Bank, you’ll enjoy the benefits of our more than 40 years of experience. As a non-recourse loan lender, we take pride in our honest approach toward buying and investing in real estate.

To find out more about our IRA non-recourse loans that can help you achieve your retirement financial goals, explore resources. When you’re ready to start the lending process, connect with us today and fill out your application.

The post What Makes An Ideal Renter? appeared first on First Western Federal Savings Bank.

In a past blog post, we outlined 11 features to look for investment properties. While those features do a great job outlining which properties may make a smart investment, you also have to consider the curb appeal of the property itself. On paper, the property might make perfect sense for investment, but if your potential buyer or renter doesn’t find the home appealing and doesn’t share your sense of what works on paper, your investment may flop.

Since 2008, First Western Federal Savings Bank has helped hundreds invest into real estate. That means we have a strong sense of which homes have curb appeal that draws buyers and which do not. Let’s explore this often subjective topic and apply some objective factors to it.

What Is Curb Appeal and Why Does It Matter

if you watched any real estate or home remodeling show, you very likely heard the term “curb appeal” thrown around. Even if you don’t have a hard-and-fast definition for it, you probably already have a sense of what it is. Consider this: you are driving through a neighborhood that seems well put together and see that all homes share a common aesthetic. Suddenly, you notice one home in particular that stands out. This home that caught your attention very likely has high curb appeal. On the other hand, you’re driving through the neighborhood just one block over and one home seems to draw your gaze like a train wreck; this home probably lacks any sense of curb appeal.

At its most basic, curb appeal is made up of the features and design elements of your home and its landscaping that make its first impression on you. No singular feature or element of a home makes it stand out. It’s the balance of all these features together that makes a home appealing to passersby and potential buyers or renters.

For those new to the realm of real estate investing, curb appeal may not be a factor that they consider. However, it’s a factor that you simply cannot afford to ignore. The fact is, people want to rent or buy homes that are nice to look at and offer comfortable living. If the properties that you’re investing in lack these feelings and features, and you will struggle to rent or sell them.

What Lends a Property Curb Appeal

An easy way to think about curb appeal is by thinking of your favorite piece of music. It’s that gentle balance of different instruments, rhythms, and cords that make it interesting or meaningful to you. And like no two songs are ever quite the same, no two homes will ever share the same sense of curb appeal. Even in neighborhoods with “cookie-cutter homes” with identical houses on identical lots, there will be some homes that stand out. But what of the things that make these houses remarkable? It’s often a combination of these elements:

The Roof

Yes, it can be difficult to inspect the roof from the curb; however, it’s something that potential homebuyers or renters do keep in mind when they’re shopping for a home. If shingles are peeling away, or tiles have come loose and fallen off, this is an immediate red flag to potential buyers or renters. While these are seemingly small problems, it could be symptomatic of a much larger issue, raising concerns about the integrity of the roof. In the same vein, large branches should be cleared away from the roofline to minimize the potential for damage.

Attractive Landscaping

It’s a well-known fact in the real estate world that attractive landscaping always earns a higher price tag for a home. It’s not uncommon for homes with nice landscaping to see their sale price increase anywhere from 5–12%. But attractive landscaping doesn’t necessarily mean it has to be elaborate landscaping. Simple changes like edging the lawn and flower beds, having lush well-kept bushes, and tall shade trees. Naturally, a carefully manicured lawn clear of leaves and other debris can also help your landscape look brighter and more put together.

A Well-Kept Exterior

Even if the roof is in good shape and the landscaping was done by an expert, a home with a dirty or damaged exterior is an immediate way to lose potential buyers and renters. If the home or building has chipped and peeling paint or is covered in debris like moss, bird droppings, and dirt, these distractions will draw your potential buyer’s eye. Similarly, the cleanliness of your windows also adds to the perception of the exterior of the home. Make sure that the windows are free from water spots and haze.

Lighting on the Home

For those who are seriously interested in renting or purchasing the property from you, they may drive past the home at different times of the day to see what it looks like in different lighting conditions. The most perceptive of them will be examining your exterior light fixtures. If these exterior lights do not work, it’s very likely that the potential buyer or renter will not be able to see or find your home at night. Additionally, damaged fixtures can impact their perception of the property even when they see them during the day.

Get the IRA Non-Recourse Loan You Need Today

Establishing the curb appeal of the home can be challenging, but getting the funding you need to purchase at home doesn’t have to be. At First Western Federal Savings Bank, we’re ready to help you apply for and receive the loan you need to start investing in real estate. As a top non-recourse loan lender with more than 40 years of experience, you can trust our knowledge and experience to ensure that you get the loan that’s right for you. Contact us today to find out more about our IRA non-recourse loans and then apply now.

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