BIG or SMALL

BIG or SMALL

First of all, I have been involved in Real Estate for many years.  I have created my business as well as other businesses off of investors.  This blog is concentrated on investing in Real Estate.  My goal is to give a wide variety of thoughts and plans and ideas as well as pros and cons in investing in Real Estate.

This article is going to be about SMALL sale PRICE vs. BIG sale PRICE.

So do I purchase a condo for 20k or a small run down house for 15k or do I purchase newer home for 200k or a newer home that needs work?  This really comes down to how you want to spend your money and how you want your investment to come back to you.  Of course  there are many thoughts on this and the results vary per purchase, but rule of thumb is  higher the price of house you purchase the longer it will take for you to recoup your money.  Also, the dollar figure has a potential to be higher, the longer you hold on to the property and the longer you rent it for.    To put things short.

In Dallas you can buy houses for as little as 15-20k and rent them out for as much as 750 a month.  This is a great return on a monthly basis; though do not expect to sell it for big cash in 10 years and retire on this investment.  Now of course if you have a bunch of these and know how to do the maintenance on them, you could live off this residual income. The idea is to recoup your investment in 2-3 years and have the freedom to sell whenever, knowing you have made money; no matter what you sell the property for.

Now if you buy a house for 150-200k and your mortgage payment is 1500 a month; you can typically rent it for 200-300 more than your mortgage payment.  Even if you rent it just to cover your PITI you can essentially break even on a monthly basis.  If you rent it for more than your payment, save this money for repairs and months you do not have a tenant. The advantage of this type of investing is that the tenant is paying for your house.  When you go and sell it, all the equity that has been created by your tenant becomes cash in hand.  So in  20 years (depending on how long your mortgage is set up for) when you want to retire you can sell the property and walk with all the cash. The idea of course is to sell it for much more than what you paid for it, though this depends on how long you keep it.  Even if the market continues to be steady, after 20 years the price will still increase; or at worst it will be the same.  Some argue that if it is the same, you have not gained a profit; though on the other hand you have still.  If the tenant pays the mortgage and your monthly investment is minimal, after 20-30 years the house will be free and clear, netting you all the cash from the sale, no matter what the sale price is. The disadvantage of investing in something like this is that first you are more than likely will be required to put down 20% when you  buy it and it does not make financial since to sell it within the first few years.  This is more of a long term investment (it takes an avg. of 8 years before PITI starts to really effect the Principal)

Comments on real life experiences and thoughts are always welcome..

Five Great things about Homeownership

On the fence about purchasing a home vs. rentals?

Take a look at what's in store when you decide to take the "leap"

1. Equity.Equity.Equity:
We all know that when you pay rent into a place that at the end of the day, you're money is not invested. Granted, it is becoming more popular for some apartment complexes to add a equity rider into the lease however, not many do this. By renting, your basically lining the landlords pocket. Sure, homebuying comes with heavy cost up front (closing cost, downpayments) but if you look into the future of your home, you will easily earn that money back overtime with equity that's put into your home. Historically, homes appreciate by about 4 to 6 percent a year.

2. Relationships:
People who rent typically sign year leases while others sign more temporary leases anywhere between 3-9 months. Gernerallly, renters tend to see their neighbors come and go these days which in turn make it difficult to build relationships and socialize. On the flip side, homeowners tend to have yards, clubhouses or community spots where those of the community are able to meet, greet, and get to know each other. Typically, neighbors seem to stay in their homes at least 5 years to regain their closing cost. In turn, there is more time to develop relationships. On another positive note, recent research has proven that people with healthy relationships have more happiness and incredibly less stress.

3. Predictability:
As long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years. You know that each year you'll need to pay for the gutters to be cleaned, and so on.

4. Ownership:
Homeownership means you "own" your home. And, this means you can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or almost anything you want to the home... that the HOA allows. The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the beige carpet, stock cabinets and bland white walls.

5. Great Deals:
It's a great time to buy. Interest rates are at historic lows. We're talking 4.0 percent instead of 6.0 or higher and this means HUGE savings!!

GET OUT OF THE CITY..

Nothing like living in style on the lake. Minutes away from the lake with over 2 acres, private pond, separate apartment to rent, huge 40x40 garage, fenced in yard, private drive, the list goes on. Come and see what relaxation is all about. Wrap around porch with views of the front and your pond.

Lawyers vs. Real Estate Agents

"My wife is an attorney, I don't need an agent"
"My best friend has a law degree, why do I need to hire an agent"
"I have bought many houses in my day, there is no reason to hire an agent"

I have heard them all. But if I said, that I work for free? Would you hire me? What if I said, I will represent you and provide you access to multiple attorneys for free? Would you hire me? What if I told you, I would save you money, protect your house from any loss and negotiate on your behalf, as well as do all the paperwork for free? Would you hire me then? Would you still say you don't need to hire a real estate agent? Well, okay, maybe you feel like you do not need an agent, but would you like one to do all the work for you and pay you for it? Still NO? Good, I do not want anyone to hire me, I want to hire them. What do I mean by this...buyers can not hire agents, that would mean that they are paid and are working for the buyer. All I want to do is work with you and consult with you and guide you in the right direction. (Can I hire someone as a buyer?...I promise I will pay you more than you pay me!)

I get frustrated when I here people say these things, because they are completely uneducated on what agents do and what benefit they provide and how much they cost. So I am going to explain things in a simple way.

1. Buyers do not pay anything to have representation.
2. Real Estate agents are paid from a listing agreement with the seller and the sellers agent, before a buyer even comes along.
- So, the thought that one is getting a better price because the seller is only paying one agent is false. That seller has already agreed to pay XXX amount. The only difference is that they are either paying two agents and splitting it 50/50 or they are paying ONE agent the entire amount. Again this amount is determined when the house is first listed on the market.
3. My buyers, as well most buyers when they use a real estate agent are not only represented by a Licensed agent, but are backed by errors and omission insurance and multiple attorney's. All of my contracts are review by an attorney. (Yes all of this is still free)
4.Real Estate agents are required to update and continue their education with a min. of 15 hours each year. These classes are to understand changes in contracts and real estate law. (which changes every year)
5. Real Estate agents are more qualified and more knowledgeable in the field of Real Estate, than attorneys are. Period. Oh, and they cost a whole lot less.

Now, do not get me wrong, if you work with a real estate agent and want to hire an attorney separate to review everything, well than sure, more power to you. I will however tell you that I have never had anyone question my team of real estate attorney's and hire their own.

I only have one question to leave with...

IF YOU GET A DWI.. DO YOU CALL A REAL ESTATE AGENT, WHAT ABOUT A CAR SALES MAN (they know all about cars)? NO, SO WHY WOULD YOU HIRE AN ATTORNEY TO DO A REAL ESTATE TRANSACTION?

2011...everything is going up

So we ask ourselves what is 2011 going to bring? I say it is going to bring wealth..though what is wealth and for whom is going to get wealthy? First gas prices are going higher and higher, everyday they increase .10 at a time. I wish I could increase my rates that much! Interest rates are getting higher...though have you seen them lately, they are still below 5%, so why are you not buying a house! The market is getting better, the amount of houses on the market is getting higher (allowing the buyers to have more choices) the amount of short sales is increasing and sellers are selling their houses. So if you want to keep up with the rest of the world and have a wealthy 2011, increase your sales, increase what you charge and go buy a house! (From me of course!)

SUPER BOWL RENTALS

Anyone going to the SuperBowl? Want to be close to the SuperBowl? Want to be part of the action?...Rent this house for the weekend and be right. Okay, so this month I am completely using this BLOG for advertisement for my listing.. but really I have 10 days to rent this house. Don't you want to rent it? Truly, lets think about this for a minute, why would you NOT want to be minutes away from JERRY's WORLD during the SUPERBOWL. It does not matter who is playing, even though GREENBAY is going to win, what matters is that YOU want to be CLOSE and you want a NICE place to stay during the weekend. YOU want to be play XBOX 360 with KINECT, Wii, PLAYSTATION 2 all weekend and drink and party and not worry about anything except how you are going to return the chair you stole from the stadium during the outrage after you realized that the STEELERS lost. Okay, seriously, I understand why would you pay to trash someone else's house during the largest party of the year, and during the something that happens minutes from you once in a lifetime....well...because even if you dont have tickets.. this is where EVERYONE is going to be. PLAYING pool all night and watching late night movies on the 55in TV's.--WHO cares, because it is SUPERBOWL weekend.
See this AMAZING house and opportunity below.

Video of the HOUSE you are going to stay IN during the SUPERBOWL.

NEW CREDIT SCORES

If you have ever looked at your credit score recently? Or the main question is have you looked at what is required now in order to buy a house? 640! Yep you read that correctly, all investors are now requiring 640 credit scores. ALL THREE credit scores higher than a 640. Now the government and Fannie Mae and Freddie Mac are still saying anyone above a 600; but does it really matter what the government says, if investors are not buying any loans with a purchaser who has less than a 640. So now lenders can not sell their loans to investors if they approve a buyer with a score below a 640. What does this mean in ENGLISH?
If you are looking to purchase a home, you must have great credit. Check your credit score before you even think about buying a home. I understand the housing market was bad, because everyone was approved. Just two years ago I was doing loans with 540 scores, but this is a dramatic change. Basically this is going to assure that if you are buying a house, than you WILL be able to afford it AND MAKE PAYMENTS and the banks are going to make sure of that. There are two things you can do to help yourself in this situation.

1. CALL JOHN PAYNE AT FIRST NATIONAL BANK. THEY ARE STILL DOING 620 SCORES

2. BUY CASH

and the number one thing you should NOT do is to pay someone to fix your score. If you want free advice and help, call a lender or myself. All the companies out there that say they can fix your credit for $XXXX are all there to make a quick buck and will stay around as long as they can while the requirements are high.

Johns number is :972-673-1909
My number is: 972-322-1717