Ceiling Fans

Archive for December, 2009

I’ve been living in my house for like 5 months now, and the ceiling fans were installed after we moved in. The three Ceiling Fans are Hampton Bay. We don’t really use the ones in my room and my mom’s room that much but my brother’s room is hot (even in winter because we live in FL) so he always runs the fan. Obviously when he’s at school he turns it off and there was no concern but now that my cousin is using my room me an my older brother (who would be using my room) are in my little brother’s room. As a result the room is always occupied by one of us and it is too hot, no matter how cold we put the A/C so we always have to run the fan. I know that really good fans can run 24/7 but I don’t know if Hampton Bay ceiling fan motors can handle that. So far my brother’s fan has been running on High/Middle speed for almost 2 weeks non- stop and I’m afraid it burns out. It is a fairly new fan and works perfectly fine, I just want to make sure it won’t break. Can we keep it running for that long?

Hampton Bay makes good fans. Running ti 24/7 it should last about 6 -10 years. When they start to wear out they don’t (burn out) they get noisy. I wouldn’t worry the things aren’t supper expensive and pay for themselves in energy savings.

Real estate investors can be broken down into three categories with the distinctions between them based on the length of time the property is held. On the short end, you’ve got flippers. These guys look for properties on the cheap, maybe put some money into fixing them up and then selling for a profit. For the most part, they have no intention of renting the property out and work as quickly as possible to complete the deal. This category represents a lot of the people chasing foreclosures and probate sales. From the lending perspective, their biggest motivators are low down payments and NO prepayment penalties. They’ll even pay exorbitant Subprime interest rates to put these deals together without penalties.

Next up, you’ve got speculators. These guys look for quickly appreciating markets. The idea is to get in, buy a bunch of properties, keep them for 3 to 5 years and then move on to the next booming market. For that length of time, they have to rent out their properties but are not particularly interested in paying down the principle balance on the mortgage. In fact, if they’re confident in the appreciation potential, they may be willing to accept negative amortization loans in order to keep the cash flow on their properties positive.

The last category is investors. These guys try to accumulate a portfolio of properties and have the rental income pay down the principle balance over time. The idea, obviously, is to own a number of properties outright or with minimal mortgages and enjoy positive cash flow on each. From the lending perspective, these investors are looking for longer term loan products like intermediate ARMs or 30-year fixed mortgages. Clearly, a property with a 30-year fixed mortgage and a sustainable cash flow will eventually be paid off, leaving just the property taxes and insurance behind.

So, let’s talk about each of these a bit more. A lot of flippers do this stuff full time. In terms of underwriting, it makes it a lot easier if they’ve got a real job. But if they don’t, they don’t have a verifiable source of income either. Of course, if they’ve done it for more than two years, we can say they’re self-employed and get the loan done that way. But if they’re new at the game - and many of them are - we almost always have to use a No Doc program. That’s the lowest level of documentation and the pricing reflects the increased risk.

Meanwhile, if we say they’re self-employed, they obviously have an investment property as well as a primary residence - and maybe more than one - all without any rental income. So they’re supporting two houses. That means we’d have to show a VERY high income to fit within debt ratio limitations. The moral to the story is the vast majority of these deals end up in Subprime programs because it’s easier to get approvals, particularly for low or no down payment programs.

Now, the question is: does it matter? Well, not really because you’re only planning to keep the property for a few months anyway, so the monthly payment isn’t that important. Yes, the payment may be big but you only have to make three or four of them (hopefully) before you can get out. It’s just another cost of doing business. By the way, I’m not saying A-paper and Alt-A programs are impossible for these types of deals. They’re just harder to qualify for.

What about the speculators? People buying for 3 to 5 years. Well, the negative amortization Option ARMs are extremely popular. I’m not a big fan of Option ARMs because they’re risky and largely misunderstood by those who get into them. The big attraction the low initial monthly payment but that’s balanced by the resulting negative amortization and an interest rate that’s variable from the very first month.

Anyway, they do have advantages for speculative real estate investors because they make it more possible to have positive cash flow on investment properties. So we should really take a moment or two to fully understand how they work. First and foremost, the initial payment is an artificially low payment. In many cases, it’s based on a 1% interest rate but that definition is based more on marketing than reality. Fact is; the minimum payment is less than the accrued interest so the mortgage balance goes up every single month.

This minimum payment doesn’t stay the same forever. It’s fixed for the first 12 months and after that, it increases by 7.5%. Then it’s fixed for another 12 months and increases by another 7.5%. The minimum payment increases by 7.5% each year for the first seven years OR until the loan balance has reached its ceiling. Depending on the program, these loans can grow to either 110% or 125% of the original loan balance. Actually, the ones that can go as high as 125% are becoming increasingly rare. Most will only allow you to go as high as 110%. Anyway, once you’ve reach that ceiling, the loan starts amortizing right away - and that means a BIG payment shock at that point.

For obvious reasons, these loan programs are only justified if the real estate market is appreciating FASTER than the loan is growing. Although it depends on where interest rates go, most of these loan programs grow by 2% or 3% each year if you only make the minimum payment. So if the real estate market is appreciating faster than that, you’re still building equity. If not, you’re losing money every month. That’s the scary part. If it ever comes to that, you actually SAVE money by selling today - unless you’re okay making the larger interest only payment. And don’t forget the interest rates on these programs are variable so the interest only payment can be different each and every month.

But we also have to keep in mind that these loan programs will only go as high as 95% financing. In fact, on investment properties, some lenders won’t even go that high. Depends on the lender. Also, the 95% financing is generally split into two separate loans. The 1% start rate loan usually only applies to the first 75%. The 20% second mortgage makes up the difference and is usually a fully amortizing loan with a much higher interest rate. Sometimes, you can do an 80/15 but most are 75/20s. So that means you have to come up with at least 5% down payment to qualify for one of these loans. That makes it more difficult to buy more and more, unless you continuously refinance and take cash out of other properties.

The speculative investors who use these programs are trying to keep their properties cash positive, or as close to cash positive as possible. But as we discussed a moment ago, the payments rise by 7.5% each year. After three or four years, the payment will be 24% or 33% higher (respectively) than it was at the beginning. If the market is still appreciating strong at that point, the investor may want to keep the property for another three or four years and refinance into another identical loan product, bringing the payment back down to the initial 1% point again. Doing so would increase the negative amortization but it may also keep the cash flow positive on that property.

You have to understand how underwriters evaluate investment properties. It really doesn’t matter how much equity you have. They only look at the cash flow impact of owning it. And you can show that impact in one of two ways. You can show lease agreements on the properties but the underwriters will always take the monthly rental figure and mark it down by 25% to account for periodic vacancies. It’s called the occupancy factor and most loan programs give you credit for 75% of the rental income listed on lease agreements. Incidentally, many Subprime programs will give you 90% or even 100% of such rental income - another example of easier Subprime guidelines.

The other way to show the cash flow impact is with the Schedule E of your federal tax return. That schedule details the income you make from rental properties but you clearly have an incentive to reduce that income as much as possible to limit your tax liability. Meanwhile, for underwriting, you want to show as much income as possible. So there’s a conflict there. Point is, there are disadvantages with both methods and you should usually look at both options to see which one will calculate the highest.

Each time you have a property that’s got negative cash flow, you have to show more income to squeeze into the same debt-to-income limitations for the next loan. It makes sense. If you’re subsidizing a property with your own income, it represents a monthly expense just like a car payment. So each time you add another property you have to subsidize, you have to show more income to qualify for the next loan. Depending on how much you’re subsidizing, you will quickly be claiming more income than you actually earn and will eventually be considered unreasonable by underwriters.

If a speculator wants to continue accumulating properties in hot markets, one of his or her top priorities is staying cash positive, or as close to it as possible. That priority exists for long-term investors as well but so does the repayment of the mortgage balance. As a result, these investors tend to consider more factors than just annual real estate appreciation. Appreciation is attractive but so is a healthy rental market, and the rental market depends on the types of jobs available in the local area and the health of the local economy.

There are plenty of companies that study this type of information and provide various reports and ratios to help identify healthy markets. I’m sure you could go to Google and find a lot of such offerings. I recently read an article that chose Charleston SC, Jacksonville FL and Austin TX as particularly attractive markets for long-term real estate investments. All three cities have diversified economies, good wages and affordable housing. Anyway, the motivation is clearly different then speculators or flippers. Long-term investors want a stable market where they can cover an amortizing loan payment - that’s principle AND interest - with the rental income from the property.

Now, a well planned real estate investment strategy may involve more than one type of investment. For example, a long-term investor may buy a property in a hot market using a negative amortization loan and keep the property for only three or four years. After realizing some appreciation, the investor may sell the property and use the profits to pay down a mortgage on a different property in a more stable market. Perhaps the reduced mortgage balance will bring that property from a cash negative situation to a cash positive one. For the right investor, this strategy can work well even for flipped properties.

There are plenty of promoters encouraging people to take these profits and leverage them even further into more and more properties. Many of these promoters encourage negative amortization on all their properties. That’s where I have to disagree. That would’ve been fine four years ago but I just don’t believe the real estate market will continue to appreciate the way it has in recent years. Given the current market conditions, I don’t believe it makes sense to expose yourself to that much risk. If real estate goes sideways, these loans erode your equity and add volatility to the market.

There’s always a balance. That balance will definitely be different for a sophisticated investor than it will be for an average homeowner but that doesn’t mean you have to stretch it to the absolute limit. At the end of the day, the ideal situation remains; owning properties free and clear and collecting monthly rent payments on each.

Patrick Schwerdtfeger
http://www.articlesbase.com/finance-articles/financing-strategies-for-investors-110561.html

There is a new kind of candle in town - the vegetable, soy and beeswax candle - and many people do not know how to burn it correctly.  If the candle is not burned properly you will find the scent does not last as long and the candle may stop burning for you much sooner than you would like.

Most people are aware that when a paraffin candle is burned and it melts too fast, this usually means it is a low quality candle.  The best paraffin candles are those that are very hard and they would then burn slowly.  Vegetable and soy candles are very different.  They immediately liquefy and this is not a bad thing.  This is the way they are meant to burn.  Vegetable and soy candles actually burn slower and cooler than paraffin candles and may last longer.  Beeswax added to the mix assists with improving the length of time the candle burns and also helps to hold the scent until the end of the jar. 

Burn your votives in a thin tight glass votive holder.  The reason for this is that when the top half of the candle liquefies as it is burning the wax will not be able to spread out.  If the votive holder is too wide and there is a lot of space between the candle and the votive holder, the candle wax will slip down through that space and the candle will stop burning sooner than it needs to.

It is important as well that you use votive holders that are not made of very thick glass or have metal on them.  The thick glass or metal will become too hot and this will affect the way the vegetable and/or soy candle burns.  It might possibly put the candle out permanently.

Do not burn a candle more than 3 or 4 hours at a time otherwise the performance of the candle may decrease.  I know this is the hardest rule to follow.  As well do not leave them unattended.  Sometimes an unknown draft might cause one of the two wicks to stop burning.  When this happens and the uneven burning goes too long, the candle frequently will not re-light.  With vegetable, soy and beeswax candles, you can still salvage the candle by putting the jar in an enclosed bag and gently tapping the glass with a knife until the glass comes off.  Remove all the glass, break up the candle and put it into a simmer pot.  It comes off very easily which you would not be able to do with a paraffin candle jar.

The candle flame height should be between ½ inch and ¾ inch – no more.  If your flame is higher than ¾ inch you will need to either trim the wick or blow the candle out and start over at a later time.

If your candle flame is too low and you are not getting a complete wax pool, you can poor out some of the wax pool to allow the flame size to increase and burn hotter and thus, more completely.  A little wax left on the inside of the jar as the candle burns down is really ideal because that means the candle is not burning too hot.  Vegetable, soy and beeswax candles liquefy which provides that 90% of the wax is actually burned.  This differs as to the paraffin candles which sometimes burn right down the middle of the jar with large amounts of wax still left in the jar.

Note that the wicks do NOT burn down with the candle – they MUST be trimmed.  The wicks are the single most important aspect to any candle and they MUST be maintained and trimmed when necessary because all parts of the candle get absorbed and released through the wick!!  The best wicks are the candles that have cotton wicks.

Consider the air currents in your room.  You can have a candle burning 4 feet away from you and not smell it although others coming into the room will smell it immediately.  You could have it in another spot where the currents in the room spread the smell right over the area where you are sitting.  Spend some time finding the right spot in each room for your candles.  The scent will then linger even until the next day and travel to other rooms in the house while it is burning if you find the best spot.  Drafts in a room that are created from Ceiling Fans, high-traffic areas or counter/floor fans can and will change the performance.  Sometimes for good benefits and sometimes not.  For best results do not burn the candles in areas where there are strong drafts. 

Everyone’s nose is different.  You will find that you will prefer different scents to another person.  What most people do not realize is that one person may not smell the same scent the same way either.  I have found that candles containing vanilla smell weak too me.  Yet others tell me the vanilla scent is out of this world.  Sometimes as well certain scents such as Lavender tend to be very strong naturally so they actually give off more scent. 

Those sensitive to different smells will find that some smells give them a headache and others do not.  If you love candles but find that you get headaches from them, try a more natural candle and experiment with the different scents.  Allergic reactions could also affect the eyes or throat and you will find that experimenting will again help you to find smells that do not bother you.  Vegetable, soy and beeswax candles are made from natural resources and therefore are less toxic than some other candles.

Vegetable, soy and beeswax candles have “low soot” or are about 90% soot-free.  This makes them “green” products that are safer for you, your family and your pets. 

The scent in vegetable soy and beeswax candles is usually stronger because this blend tends to hold the scent well. 

Try using a Simmer Pot.  Simmer pots allow for the candle to be burned under a bulb.  This type of burner is safer since no flame is used.  Be sure to pick an electric simmer pot since if you need to burn a candle underneath the burner then you are defeating the purpose of the safety factor.  Simmer pots are normally have a broad cup for the wax which helps spread the scent around more. 

Clean out the simmer pot by pouring out the wax into a garbage bag and using a Kleenex to clean out the bowl.  The vegetable, soy, beeswax candles clean up with soap and water.  If the wax is accidentally spilled, you will be able to wash it up easily.

Have fun burning your candles!!!!  For more advice and information on various candle products attend Hollyscents a view the line of candle products and natural bath products.

Holly Crosgrey
http://www.articlesbase.com/accessories-articles/how-to-burn-a-vegetable-soy-and-beeswax-candle-for-the-most-effective-long-lasting-scent-673517.html