Vernon Foster Management & Rentals

Rental Units For Sale

"Property Management is all we do... Nothing else!... Well, almost..."

Thinking of Professional Management? Go to Info below.
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What's new -or- What's been updated?
Resources for currently represented Owners.

Dateline - April 25,  2017
Update Info: Topics various
Lenoir County Tax Values.
You should have received NOTICE from Lenoir County regarding the revaluation. In the vast majority, assessed values were reduced anywhere from 5 to 25 percent of prior valuation. You likely observed the reduction in value was on the "improvement" and not the land. Commercial valuations were not as lucky. As a rule, if the assessed value is no more than 10% above (perceived) market value, it's not worth arguing. Remember, income producing property is valued based upon Income/Expense, not comparables. The Senoir Appraiser for Lenoir County is Markum Wheatley. He too is an investor/landlord just like you. Therefore, it does make good sense he can be reasonable in considering any challenge of tax valuation which is presented in the proper manner. The time period to mount a challenge is ending. I did randomly look at several Owner's values and did not see any that were worth the argument.
IMPORTANT: If you have a listed Property which has suffered loss, the value may NOT reflect the diminished value. An example of diminished value would be significant fire or flood damage which has not been repaire AND will not be repaired or otherwise contemplated.
The new valuations DO affect this current tax year, but is not retroactive to 2016 or earlier.
Information as to how to mount a challenge of value was sent to you from Lenoir County Tax Office late March.

Rental Investor Forecast-Kinston/Lenoir County.
You own Rental Income Producing Property in Kinston/Lenoir County... You are exactly where you need to be with all or a portion of your investments.
LENOIR COUNTY... in particular Kinston within the ETJ, remains a "Rental Town". Families and Individuals have to have SHELTER (If you don't, you are homeless!) You have heard me speak of Maslow's Hierarchy (click the hyper-link for explanation). Along with FOOD and FUEL, everyone has to have SHELTER.
If you are interested in expanding your rental base or you are contemplating adding rentals as an income vehicle, we need to talk! EMAIL me and include subject as "Rental Investment".

Archives follow...

Atlantic Hurricane Season. How's your Hazard Insurance doing?
Quick Reminders:

1. VFMR does NOT require you carry Hazard Insurance on your Investment Property. But, it would be playing "Russian Roulette" to not have (at the very least) NCJUA coverage. We ONLY require you carry Liability Coverage (by your personal homeowner's policy or Business Liability Coverage).

2. You cannot bind hazard insurance in less than 30-days. So, if Lenoir County is threatened with a significant storm and your coverage is lapsed or non-existant and the threat is less than 30-days away, you are out of luck. You can only hope Kinston/Lenoir County does not get hit with a Fran, Floyd or Irene level storm. BUT, an Atlantic Hurricane for this area is like termites... Not a question of if, only a question of when.

3. Liability Insurance... This is required. If you have changed insurance carriers or any other sort of change, send this information to VFMR.

4. "Why did I not receive funds this month?" The answer to that question and many more are contained within your Month-Ending Statement. Before you raise concern, please be sure you have reviewed your Statement as well as any attached Owner Note or Paid Invoice... But, if you still have a question after having reviewed your emailed Statement, do feel free to call or email your question.

5. CENTRAL AIR CONDITIONING. R-22 is being rationed and the cost/pound is rising EVERYDAY. If your Property has the older R-22 freon, start putting back sufficient funds for the inevitable. As of 2019, NO R-22 refrigerant will be available.

IF you saw this coming, wouldn't it have been a great "score" to have bought 600 pounds of the stuff... You would be looking at a return of astronomical proportions!

6. DIRECT DEBIT for Rental Receivables.

Updates pending.

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Dateline - June 21, 2016
Ready for Professional Management?
VFMR is ready for you. Here's what the Property Manager considers:
1. VFMR manages 'Rent-Ready' Properties. If your Property is needing significant repairs or renovations, please know VFMR manages tenable Properties only. If your Property is occupied/rented, it likely meets or exceeds minimum requirements established by regulatory folks such as the local PHA, State and/or Federal regs. If it's minor "touch-ups", we can handle it or, at the very least, advise you. Let's do it!
2. "My current Tenant is a problem." Okay... In 31-years as a professional Manager, I've been presented with more than a few problem tenancies. You might think you have to "clean up the mess" before you can hire VFMR. In most cases, that is not the true as VFMR is a seasoned Risk Management Agency. If the Tenant is the problem, you are exactly where you need to be. Waiting for the problem to be solved BEFORE bringing VFMR on-board is contrary to what VFMR can and will do for you. Let's do it!
3. "I have a broker managing my Property, but I am not happy." There is a LOT that goes into ethical, legal and professional Property Management. First of all, someone who manages real property for another (in North Carolina) must hold a valid Real Estate Broker's License. But, there's more to it than just the licensure. I could fill page after page of all the intricacies and details. BUT, you want your rental cash flow and without a bunch of problems or other concerns. Count VFMR in on that! We want EXACTLY what you want. Let's do it!
4. "VFMR already manages a lot of Property for many Investors. Are you sure you have the resources, energy and time for my Property?" Heck yes! VFMR is kinda like the Marine Corps recruiting matra: VFMR is always "looking for a few good (Investor/Owners)". Let's do it!
5. "Okay. Nice words and pitch, Vernon. Can you deliver?" That's simple. If you want both accountability and reliability in a Property Manager. You are exactly where you need to be. There is no other place, person or entity in this service area that can truly say it and mean it. Let's do it!
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Dateline - October 18, 2015.
Owner's Trading Post... Ready to acquire more? Looking to trade? Time to par down a fixed asset?.
There has been discussions and planning for this Investor Tool. As with any initial "build" (some call these types of things Testing in Beta, you input and suggestions will be appreciated!
So how do you decide? What makes a Property desirable to the Investor? (YOU!)
1. Use Your Formula. There are more than a few ways to determine viability of a rental asset. Cash-On-Cash; Gross Rent Multiplier; Capitalization... General Rule of Thumb - Requirement for a positive cash flow. You cannot use losses from a passive income generator (Rental Property) to reduce Adjusted Gross Income.
2. Are you under 50-years old? [You ask yourself, "Why does Vernon ask that?"] If you own traditional IRAs, you are making practically nothing on that money! Consider establishing a self-directed Real Estate IRA. A few Investors represented by VFMR have done just that... Remember, everyone needs a roof over their head; otherwise, they are homeless! Using the right acquisition formula, and professional management to keep you freed-up from the nuts and bolts so as to make more $$ elsewhere, converting a portion of your retirement portfolio into a Self-Directed Real Estate IRA can make a big and positive difference. Check it out.
3. Owner's Trading Post... Yes, I do have several Investors who are interested in entertaining a sale of certain real estate assets. Let's cut to the chase... Here is a current listing of FOR SALE Listings directed at Investors (Please remember, I don't do traditional List/Sale for Owner-Occupant market... I deal with folks that either make money or want to make money.)
Kinston City Council offers Lease to the Texas Rangers (MLB) farm league program to commence with the 2017 Baseball season. The deal is pending approval by the Carolina League who governs the "who and where" of professional baseball in the Carolinas.
Lenoir Community College announces expansion of its robotics program (aimed at providing educational base for manufacturing jobs using computer programming skills, i.e. - Robotics).
Rumors of Business announcements exist... We are told there will (hopefully) be an annoucement of a new manufacturing placement in Lenoir County... We are also told the Dupont Sonora Plant is nearing completion of a major facility expansion which should add a few more jobs to the local economy.
Kinston/Lenoir County needs meaningful jobs to bring in both capital and resurgence of value to the local service area. One or both of the latter means greater value for the Investment Property Owner's holdings as well as a renewed opportunity to command higher rents. As changes occur, you can look for your Property Manager to react accordingly for your interests.
Disclaimer: I am not a CPA nor do I have degrees in accountancy. Since the Federal Tax Code is more than a few volumes thick, you should already be using a good and aggressive Certified Public Accountant to plan ways to safely save your hard-earned money by avoiding needless taxes.
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Dateline - July 24, 2015
Single-Property Accounts with an Owner Reserve.
 There have been several instances where there was an imminent need for funds, e. g. - Tenant failed to pay the rental which required Superior Court Filing Fee and Sheriff's Service Fee. In those instances where there was no escrow, your Agent had previously been able to advance that Owner Account by a transaction called "Due Agent" (Agent took its own funds and deposited those into the Trust Account covering the expense... which was repaid by the Tenant curing Breach/Paying the fee, collected from the "former" Tenant's Security Deposit or repaid upon direct request to the Owner). That practice has been abolished by the Real Estate Commission as a form of co-mingling (the mixing of personal/company funds with Trust funds). As much as we consider that type of transaction to be kosher, it just cannot be conducted.
An email was sent in June to all Owners of single-property accounts stating $200.00 would be held in escrow (an Owner Reserve) so as to meet any immediate/eminent issue which required funds. Now, one might simply say, "Hey, if you need some funds for this-or-that, just send me an email or give me a call." Sounds simple, right? Wrong. :( The need is always "right now". It is impossible to hold up the entire calendar while an Owner sends the necessary funds.
The Owner Reserve is just that... Owner funds held for emergency/gotta-do-it-now situations.
Generally speaking, this DOES NOT apply to an Owner Account where there are multiple Properties being managed by VFMR (as there is normally an available cash flow if an urgent need arose).
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Dateline - July 24, 2015.
Market Conditions for Kinston/Lenoir County Service area.
There appears to be some movement to positive announcements of recent. You may have seen this news...
Kinston City Council offers Lease to the Texas Rangers (MLB) farm league program to commence with the 2017 Baseball season. The deal is pending approval by the Carolina League who governs the "who and where" of professional baseball in the Carolinas.
Lenoir Community College announces expansion of its robotics program (aimed at providing educational base for manufacturing jobs using computer programming skills, i.e. - Robotics).
Rumors of Business announcements exist... We are told there will (hopefully) be an annoucement of a new manufacturing placement in Lenoir County... We are also told the Dupont Sonora Plant is nearing completion of a major facility expansion which should add a few more jobs to the local economy.
Kinston/Lenoir County needs meaningful jobs to bring in both capital and resurgence of value to the local service area. One or both of the latter means greater value for the Investment Property Owner's holdings as well as a renewed opportunity to command higher rents. As changes occur, you can look for your Property Manager to react accordingly for your interests.

Dateline - July 24, 2015.

"What can I do or What should I NOT do?."
There is alway a good answer to an investment strategy. We are all familiar with "Buy Low. Sell High" plan... It's a good one, albeit a rather simplistic approach that applies mainly to liquid assets (cash, common stocks, etc). But, it does not adapt well when it comes to real estate investments. Here's a quick take on several scenarios:
1. Property is held "in fee" (don't owe a bank). Stay put! You are in the "catbird's seat". If you cash out in this market climate, you will most certainly be on the losing end of an investor sale... But for argument's sake, you decide "What the heck, I'll just take the loss". If you take the likely net proceeds and invest it in a non-real estate vehicle, what kind of return would you likely get? 4% 7%? Maybe 9%? The odds are extremely good, your return would be significantly LESS than providing a rental housing. Hey, remember... Kinston's leaseholds are 66% rental! Kinston is a rental leasehold community. THAT is very good for you.
2. Cash Flow is positive (green). Same thoughts apply, even if you owe a bank a monthly payment. If the investment is "working", best to remain in the game.
3. Someone writes you a letter "I'm buying houses/rentals, call me". You can send me the letter and I'll respond for you... Your Property is an actively managed leasehold. But, if this interests you, reasonable value (to you) is very likely not available from this type of solicitation. I do know of a few folks who are taking the "shotgun" approach in Kinston and Lenoir County... What I mean by "shotgun" approach is: If you put out enough hooks with worms, a fish will likely bite. The "hooks and worms" are cheap to this type of speculator as the only thing it takes is a little time searching tax records for absentee ownership, a First Class postage stamp, copier (reasonable quality so the letter looks personal) and someone to answer the phone. I will say it, but in a different way... The ONLY reason to sell a Property held "in fee" or otherwise showing a profit should be characterized by the word "catastrophic" (the Owner/Seller has to have money at any cost... which will always result in a very poor return).
4. The Tenant says "Can I buy my house?" Your answer would be either "yes" or "no". What do they say? Anything is for sale if the price is right. We have this issue covered in our agreement... The Property is not for sale, but if the Tenant approaches my office with this question, I will certainly let you know. If the Tenant were to contact you directly (which should not happen, but...) do not discuss any potential terms or other particulars. I am your Property Manager and I am a licensed Broker... The Laws and Rules governing real estate contracts do not preclude a private Owner selling his or her leasehold(s) without Broker representation. But, there are State Statutes which do govern real estate transactions which can be unknown or misunderstood by non-licensees. Regardless of the situation, I represent your interests and anything outside of the normal monthly management... You should not hesitate one-minute. Call me.
5. Property is not producing a positive cash flow. Okay... On face, this is not good. There is not a simple answer. Yes, a "green" cash flow is the goal. Your CPA may be telling you, "Hey, your Schedule C Property/Properties are doing well!"! Sometimes, the negative cash flow works... But, a good Certified Public Accountant is the best judge for the performance of your estate (Tax Laws are in constant flux, so even if you think your investment portfolio is too small to justify a CPA's fee, think again). The question begs, "What do we do to get from 'red' to 'green'"? Generally speaking, vacancy loss and/or expenses would be where to look. If you are looking at an average that would be a deficit, you and I need to talk. I've been working with investors since 1984... Do the math. That's over 30-years. If I have not acquired a reasonable amount of knowledge beneficial to your decisions, I've been on another planet.
...These are a few topics I wanted to share... if you have some other items or ideas you think would be good to discuss and impart, let me know... I will try to get some good information your way each quarter.
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Dateline - July 24, 2015.
Some "To Do's" for you.
What do you see in your mailbox near the end of August? Answer: Lenoir County Tax Invoice. Someone once said, "If you ain't spent it, you made it." So, let's talk about saving a few dollars which means increasing your bottom-line.
If you are local to eastern NC, Monday evening, June 1... If you were watching 9 On Your Side, you may have seen Angie Foster and myself addressing the Lenoir County Board of Commissioners. The Reporter did not catch my words when I directly addressed Mike Jarman, the County Manager... Mike had given a verbal report to the Commissioners the previous week that Property Tax revenue was "flat". As I have observed declining values since mid-2008, the market values continued a downward spiral for the following 5-years. Historically, Property Tax values (that is before 2008) have usually been below market value. What happened pursuant to the mortgage melt-down and recession was a hard and deep reversal of that old axiom.
So, what did Vernon say to the County Manager and Commissioners? "Property Tax values are down. If we do the math, it has the potential to be a significant loss to the City and County." I can get more detailed, but anyone (that's YOU!) has the right to present a challenge to the Valuation placed by the County. How? Value is determined by one of two methods: Comparable sales -or- Income Approach. But, the basis for the challenge must be from sales 2 to 3 years PRIOR to the current (2015) year. The valuation of your Property was established BEFORE 2008 (unless you have already lodged a challenge years prior). 2015 is the revaluation year. In 2012, values had been "tanking" since mid-2008. If you assume a loss of vlaue by, say 25%, this will add up. For example, your rental leasehold has a Tax Value of $100,000 prior to 2008, and it LOST value by the 25%, that's $25,000 that you reasonably not pay be assessed taxes. Tax rate is $1.49/hundred value for City+County. That comes to $372.50 net tax. That's $372.50 you can use against other operating expenses. Otherwise, that's $372.50 just tossed to the 4-winds! Again, if you don't spend it, you've made it! Right?
The latter is an example of what you could do to improve your bottom-line... In some cases, that savings could be more... or it could be less.
Now, if you are interested in a possible reduction in your rental property tax expense, you can do it by the INCOME APPROACH or (if they can be found), good and proper comparable sales of similar investment property. I'm willing to bet that over 80% of the rentals managed by my office would qualify for some degree of reduction in tax basis. My thought... Anything over 10% is worth the effort.
Let me know if you have questions, I'll be glad to answer them.
HAZARD & LIABILITY INSURANCES. Our Agreement does not require you to own any hazard insurance (against fire, wind, rain, etc). It does require you to own General Liability Insurance (against Clicker, Clacker & Cloak suing you because the Tenant's friend tripped over a tree root in the yard of the rental property). Both are important because you want to protect your investment as well as your own personal estate. Regarding the latter, Lawyers go "after the deepest pocket". Ask yourself: "If that tree root ended up in a Judgment for $500,000 against my estate...". I don't have to finish that thought. It would be horrible. This does not happen often (Thank Goodness!). But, it's kind of like termites in the Southeastern US: It is not a question of "if", but it is a matter of "when". Hint: That's why it is a very good idea to have a Termite Bond on your rental structures. When it becomes visible, a lot a damage has already been inflicted. Sorry... got side-tracked by termites!
Back to insurance... Most Owners have got their insurance Agents "trained" :)... Each renewal period, they have their Insurance Agents fax or email to my office a CERTIFICATE OF INSURANCE or written verification of liability coverage through the Owner's Primary residence homeowner's policy. Either one is acceptible. Neither is not... So, just call your Insurance Agent and verify your Liablility Coverage and extend that coverage to VERNON FOSTER MANAGEMENT & RENTALS, L.L.C. Your Insurance Agent gets its commission with your renewal... Let them do a bit of leg-work for you with this item.
More later... I've kind of gone a bit overboard, but that's me!
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Shopping for a Property Manager? You've come to the right place!  
Archive 12/28/2014.
Why do you need a Property Manager?
Two primary reasons: 1. Resources; and 2. Time.
* Resources. V F M R is not just Vernon Foster. Vernon's a pretty big deal, but add to the equation: Full-time/Knowledgeable Staff; Hand picked and seasoned repair vendors (at prices the individual cannot command); "Insider" contacts and influence; Dynamic exposure for your investment property; A committment to constant and positive improvements in the management of your Property; over 60-years of combined Property Management experience and knowledge; accessibility (You have a question or need? We are available to you.); Risk Management approach and more...
* Time. What is your time worth? What does it cost you to self-manage or be affiliated with a "mixed agenda" service (remember, V F M R does not sell insurance, provide investment counceling (except when it comes to your property), build houses or run a typical List/Sell brokerage. Also, consider your "emotional equity" which can and does come into play dealing with Tenant issues. V F M R will free up your time for other productive endeavors.
Consider This. For the period of September 2013 to March 2014, VFMR has procured (leased) over $30,000 in monthly gross rents for its Owners. This equates to "bankable" investment value of over $363,000 (Annual Gross Rent Role). The numbers speak volumes... this is just a two-quarter "run", folks. Vernon Foster and VFMR want you to work with you. Email or Call Vernon. He's glad to answer your questions and excited for the opportunity.
NEED TO KNOW. It is important for you to know, Property Management is a full-time endeavour. This is the reason for the above statement. Collecting and accounting to you for the rents due you is just a single-facet of the mission. There are more: Availability of the Manager and its Staff to both Owner and Tenant Tenant's confidence in the Manager and its Staff Constant and proactive revision of management methods and toold Maintaining, nurturing and adding positive relationshiips with any and all who affect the mission - City of Kinston Customer Services, offices of Clerk of Court and specifice Judges, the Sheriff and Police Departments and its key contacts, Repair Vendors as true assets,North Carolina Real Estate Commission Legal Staff, the Tenants themselves, and more Property Manager's personal observations for each and every rental Property Property Manager's personal contact with the Tenants Anticipating needs and potential risk of the physical leaseholds as well as laws, rules and regulations affecting risk Streamlining of the information flow between all of the above Understanding of the Manager that the success of the mission goes WELL beyond any idea of "9-5".
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Archive 12/28/2014.
"We are not a 'sales agent' office."
Successful management offices "stay the course". If a manager is looking at profit centers unrelated to your needs, I consider this to be a conflict of interest. Your needs and those of your tenancies could take a back seat to a particular Broker's goals. The dedicated management office is to care for its Owners and their Tenants. Those interests must be first -and- last. Property Management is a service-oriented profession. So, Vernon Foster Management & Rentals, LLC "VFMR" is dedicated to "just you". IF there will be any brokerage activity, it will be directly related to the needs and goals of investment property, i.e. - 1031 exchange, acquisition of new rental property by an Owner, divesting of existing rental property, Contract for Purchase in a management relationship. One other way to assess my reasoning, a typical Sales Agent office that "side-lines" some rentals would "water down" the ability to effectively manage... worse yet, not very experienced with the risk-management required of a seasoned Property Manager.
When you call, we know why
We do not have line-extentions saying "Press 1 for sales, 2 for insurance, 3 for 'Tom, Dick or Harry'." You do get "
VFMR... Vernon Foster Management & Rentals".
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Archive 12/28/2014.
Each Owner's approach to their rental leaseholds varies. Some folks check "every 'i' and cross every 't'", while others take more of a "cash" approach to the investment. As your Property Manager, I will assume the latter. Too little information is a problem... Too much information is never a problem. Strategic planning is important. Older structures do require more attention and planning for future needs. Protecting the viability of the structure as an income producing tool does allude to that dreaded word "expenses". It is inevitable that paint peels and components wear. I will be periodically communincating with each Owner as to scheduling and planning. This will reduce costs in the long-run. Asset Management is not in the managers written job description, but "Vernon Foster" is telling you now. it just got added!
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Archive 12/28/2014.
A lot of contractors and associated repair services "love" to "hookup" with a management company, for obvious reasons. There are specific requirements of ANY such vendor dispatched to rental property, some of which are: Vendor's Business Liability Insurance coverages, guarantee of reduced or very competitive pricing, observation and initiative as an additional layer of risk management, "go when I say go", Contractor's warranty of the finished job, and more. As the vast majoirty of our Owners utilitze this service, do know there is a strict cap on this manager's discretionary actions. You pay this management company not one extra penny for this service. It is both prudent and reasonable to allow coverage for "normal and necessary". But, if ever you have a question regarding any repair or its cost, I want to hear from you.
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Archive 12/28/2014.
Okay,. by my own volition, I am the best! But, being "top dog" requires continuous learning and committment to the mission. Add to that, your comments, observations, suggestions are needed to gauge the current efforts as well as make good modifications..... Tenants are u;tilized in the same fashion. So, periodically let me know. Also, I will be sending you emails with ideas for your feed-back.
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Archive 12/28/2013.
Older formats have been "Month Activity Only". If there was any "linkage" such as a balance carried forward for a capital repair, an Owner would have to literally lay statements side-by-side to see the progression. The new format will not only show the month-only, but a Year-To-Date running ledger will be included. You will be able to take "the quick look" as well as "dig the numbers".
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Archive 05/01/2012.
I am really excited to be able to provide this serivce. The servicing bank (Yadkin Bank, Winterville, NC) has been really proactive in setting up ACH. The availability of funds (for the owner) are now PDQ... no "snail mail" delay as well as faster access to deposited funds. Most of the larger banks will be "same day", but you can check with your bank for their specific policy as to "funds availability". Your Statement will also have attached any invoices for repairs. Those invoices will be the scanned image. I suggest you make a folder on your computer and name it "MONTHLY STATEMENTS". If something ever happens to your computer files, not to worry as I will have the identical file archived on my end.
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