Real Estate – Karen's Perspective

Is This a Good Time to Buy Real Estate? YES! Here’s Why:

I’ve had several book signings lately (please check out The Essential Handbook for Buying a Home) and the first question most people ask always fascinates me: “is this a good time to buy real estate?” Or, I hear, “oh, real estate. This isn’t the time to be buying real estate.”

I blame the media for this kind of ignorance. It’s not stupidity, simply mis-information. Actually, this is a FABULOUS time to buy real estate and, if you aren’t buying, you WILL be kicking yourself 10 years from now.

Real estate is cyclical. Values go down from time to time, but they always come back up. In fact, unlike stocks that can go all the way down to ZERO value (and companies simply cease to exist), real estate goes down but never to zero. Even in “blighted” areas that are filled with crime, the land itself always maintains value and will be worth more in the future.

Why? For one thing, no more real estate is being made. For another, the population continues to grow and, therefore, the need/demand for available real estate continues to increase.

But, that’s an even bigger picture.

12 / 28 / 2011
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Return on Investments – Stocks vs. Real Estate

The above is a graph published in November, 2011 by MSN Money.

In case you didn’t already know, I love real estate. But why do I pick real estate over stocks? A number of reasons including:

Leverage - If you have $100,000, you can buy $100,000 worth of stocks. Or, in real estate, you can leverage your money meaning, if you have $100,000, you can put 10% down ($10,000) on ten $100,000 houses and have control over $1 million worth of real estate. You have mortgages on those properties, yes, but put in a tenant and they’re the ones who pay those mortgages over time for you.
Discount - Real estate can be purchased at a discount, especially in our current economy. There are properties, in any economy, that can be purchased at significant discounts off true market value. Stocks cannot be purchased at less than their current market rate.

12 / 08 / 2011
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Message to Congress on Small Home Mortgage Foreclosures

“Those who cannot remember the past are condemned to repeat it.” George Santayana

Read this Message from Franklin D. Roosevelt to Congress. American Presidency Project, April 13, 1933. We have been here before..

To the Congress:

“As further and urgently necessary step in the program to promote economic recovery, I ask the Congress for legislation to protect small home owners from foreclosure and to relieve them of a portion of the burden of excessive interest and principal payments incurred during the period of higher values and higher earning power.

Implicit in the legislation which I am suggesting to you is a declaration of national policy. This policy is that the broad interests of the Nation require that special safeguards should be thrown around home ownership as a guarantee of social and economic stability, and that to protect home owners from inequitable enforced liquidation in a time of general distress is a proper concern of the Government.

11 / 30 / 2011
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Trulia Crime Map

Trulia has this amazing crime map created by Movity. Check it out!

11 / 18 / 2011
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Foreclosures – More Profitable Than Loan Modifications?

photo by peternamara1

I first posted this article on November 10, 2009. I just came across it again and, unfortunately, it still seems completely relevant. I would love your feedback to know if you think any of this has changed over the past two years.

Have you worked on a loan modification or a workout with your lender in an attempt to avoid foreclosure? Have you faxed pages and pages of information only to have them tell you they haven’t received it, or that you faxed them to the wrong number, or that you faxed the wrong documents??

Have you gone through the modification process but been denied without a clear explanation as to why? Have you received incompetence and indifference from your lender?

If you’ve jumped though all of their hoops only to come out frustrated with no work out, you’re not alone.

In the last year, Consumer Affairs has received hundreds of complaints from consumers who said they followed loan modification instructions, faxing requested documents repeatedly, only to have their applications disappear.

11 / 16 / 2011
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Unique Ways to Sell a Home

Ferdinand Cheval Palace - France

In case you haven’t noticed, there are a lot of homes for sale right now. How are you going to get yours noticed? How are you going to get yours sold?

In today’s market, it will take more than painting the walls and trimming the bushes to get noticed, to stand out, to make your home memorable. Dropping the price is something everyone’s doing. What can you do that other sellers aren’t? What can you add that’s different?

Here are some ideas I’ve tried:

11 / 03 / 2011
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How We Determine What We Can Offer on a Property

As an investor, I immediately explain to the seller that I won’t be able to pay as much for their property as an end user (someone who will purchase and live in it) because I need to be able to, over time, make a profit. They understand that. If they’re still interested in what I have to say, I continue on with what I can offer and why.

To determine what we can pay to purchase, we start with what it will cost us to sell at a later date, then we work our way back to today’s offer price. Selling numbers are EXTREMELY important to know before you buy.

Asking Price:
We determine what we will ask for the property when we sell by using online sites which gather information from county records. These sites show recent sales prices in the area. We prefer sales from the last 6 months and within ½ mile from the subject property.

Buyers Discount:
It’s very rare, in today’s market, for a buyer to offer full asking price. Nationally, the discount from listing price (market value) to selling price is 5-7%. We subtract this number from our predicted asking price.

11 / 02 / 2011
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Our Real Estate Economy is Rebounding

Guest Post

Thanks for this article to Jim William, real estate investor and coach of the Triad Mastermind group for real estate investors here in the Triad of North Carolina:

Here are some random thoughts about the past 90-120 days of our own team’s activity.

What we have seen in every area of our business is GROWTH. We have recently experienced more profitable activity than in the past three years. Prices are stabilizing and we see median priced homes, $100k-$200k, being sold, rented or rent-to-owned in lightening time. Add to that the fact that our tenants are paying more consistently than ever!

While some activity is seasonal, some of it shows signs of the end of the down cycle. I expect an overall flat lining for another year or so, then an upward trend with a slight bounce at first, followed by a more steady strong climb within the next three to four years.

It’s important that you be in the real estate game NOW before this growth takes place because, when the climb happens, wealth will develop easily through Automatic Appreciation.

10 / 25 / 2011
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Best / Worst Rehab Choices for the Money

Many of our students ask, “what should I do to this property to get the most return for my investment?”

Great question! And, before you begin any rehab on a property you plan to sell, investigate the return you can expect versus the amount you’ll spend to do the work.

For example, if you plan to spend $40,000 adding a sunroom, would you still do it if it would only raise your property value $15,000?

1. Upkeep. Probably the best advice for the least money is – keep up the property while you live in it. So many sellers go all out fixing broken cabinet doors, cracked windows, exterior paint, replacing blinds, etc. when they plan to move. Really? Why let your house deteriorate in the first place? Keeping your home in top condition allows you to love it while you’re there, keeps upkeep costs low and spread out and, when you decide to sell, it’s practically ready “as is.”

10 / 17 / 2011
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How Do You Get Started in the Real Estate Industry?

A friend from In Good Measure sent me a list of great questions. I decided to include our Q&A here.

Give a 2-3 sentence introduction about yourself:
My name is Karen Rittenhouse and I’m a full-time real estate investor. Over the past few years, I have bought and sold over 150 single family homes. I am not a real estate agent; all of the deals I do are my own. I also coach and train others how to buy and sell properties for profit!

How did you get started in the field of real estate and real estate investing?

I studied how the wealthy made their money. Over 95% made it through real estate: railroad tycoons made it from the land the rails lie on; Hearst Publishing owes their family fortune to the fact that William Randolph Hearst bought up the coast of California during the Great Depression; McDonalds owns more real estate than the Catholic Church. If you want true wealth, own real estate.