New Kitchen - Granite - Stainless
 
BEFORE
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Added French Door
BEFORE
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Investments? I don't think I can? For many years, I thought that investing in property was for those who had a TON of extra cash lying around. How would I, on my modest income, buy an investment property? Here's the simple, correct way of looking at investments. Something I had to figure out by DOING...lol. SHRINK YOUR FOCUS. When I first started looking into investment properties, I started right at the top; single family homes. I started here because that's what I was familiar with. I lived in a house, so it only made sense to look at similar homes. I soon found they were WAY to expensive to make any sense, and I was forced to stop in my tracks. I was going about it ALL WRONG. First, think small. On the current market you can purchase a 2 bedroom, 2 bath condo in a nicer complex for under $50,000. Yesss, you have HOA (condo) fee's to factor into your numbers, but they're simply another part of the money crunch. Focus on one thing at a time; how much can you afford to spend on the purchase? Second, look at EVERY purchase from the perspective of WHO CAN AFFORD IT. What type of money would the tenants need to make to comfortably move in? If you purchase a 4 bedroom, 3 bath, $400,000.00 home, you're catering to the very well off tenant, or buyer. This narrows your client pool. However, lets say you buy a $50,000.00 condo. You fix it up and rent it to winter tenants (like I do), or young couples on a limited income. Your client pool just got a bit larger. You now have an opportunity to attract a huge client base, increasing the odds that your INVESTMENT will provide a return. My first investment property was a 1 bedroom, 1 bath 630 SqFt condo, in a complex built in the mid 1980's. The inside was original, and needed updating. I ended up buying it for $32,000.00, and invested another $15,000.00 in the renovation. I gutted the inside, added a french door to open the space, and installed a top-notch kitchen (cabinets, granite, crown molding, high-end fixtures). The bathroom was treated in the same manner. My goal? To bring the condo up to my standards, and to a standard that would justify my goal rent. I also looked at the property as a possible “retirement property” for myself and wife. Often I would ask myself one simple question. If I was paying $1,500.00 per month for a 1 bedroom, 1 bath condo, what would I demand? My answer? It better ooze class from the minute I opened the door. I also crunched the numbers in this VERY, simple way... $1,500.00 divided by 30 (days) equaled $50.00 a night. First, where could my clients even rent an AVERAGE hotel room for $50.00 a night? Second, how much would I pay a night for my condo? If more than $50.00 a night, I was on target. The result? I was able to get my full rent amount, and hit every financial goal. It took more than a great condo to get to this favorable result. It takes effective marketing. I took detailed photos, shot a HOSTED VIDEO of the interior pointing out WHY the client should stay there, and a Facebook fan-page devoted to everything in-between... If your clients can't SEE THE VALUE, they will go somewhere else. In my case, I wanted to show WHY my clients “needed” to pick my unit. I knew that renting ANY UNIT sight unseen was stressful. I would feel the same way. However, if they rented my unit, I knew they wouldn't be disappointed. Every upgrade had been made. I was able to express the advantages of renting my unit, at my desired rent. Less expensive properties can be ideal investments, if you take the time, and hire the right agent. Focus on the TYPE of client you're looking to attract, and imagine yourself as those clients during the process. If you spend a penny, expect 2 back in return. It's an investment, which means it provides a RETURN. Yet Another Example: I spent $400.00 (and of course the time to install) on crown molding. Another $200.00 for 4” baseboards. $3,000.00 stainless steel package. $1,500.00 on 18” tile floors; they look nice and are easy to clean. Important when you're on vacation. $600.00 on a french door. It opened the space, and gave the interior a look that wasn't available elsewhere in the complex. It made my unit unique. Simply, I felt my $1,500.00 a month clients would expect a classy look, so I strove to provide it. Again, if you spend a dollar, that dollar should make you 2 in return. I've been able to rent my condo solid through the winter, and every client has been 100% happy. 2013 is already booked. If you offer a solid value, everyone wins. Buying an investment now, while the market is challenging, is going to pay for itself over time. It's about finding the right property, at the right price, making the right improvements, with the right terms. If you're thinking it's time to look into investing, please give me a call. It takes little time to figure out what your options are, and besides, it's also fun..! |
Property as an Investment? I can't, right?
Arizona Market Recovering?
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Arizona Market Recovering? Many times I read the local newspaper so I don't forget how to read...lol. Occasionally there's an article that catches my eye. Today it happened.  The Headline: VALLEY REAL ESTATE AGENTS HAVE GROWING OPTIMISM If you would like to read the actual article, I've included a copy (just click on image). In a nut-shell the reporter contacted Bob Bemis (ARMLS CEO) who heads up our MLS (multiple listing service). According to Bemis they contact agents who have represented a buyer/seller in the last year, and ask them if they're confident in the housing market. Points are assigned, and a number emerges. In January 2012 the number was 87. 100 is a perfect score. In February 2011 it was 57. Do I agree? I do, and here's my perspective. First, and few personal observations. If an agent sold a home between February 2011 and January 2012, they're going to have a perky outlook... Most likely they sold little the year before, so any sale after a long dry spell, can do wonders for the spirit. I see it this way, and as you might have figured out, I'm all about breaking things down so I can easily understand. I'll even use Arizona in my analogy. You're in the middle of the desert, it's 115 degrees during the day, and you have zero water. After walking 10 miles looking for help, you start to feel your throat tightening, and you've stopped sweating. While not a doctor, you know you're in serious trouble. As you sit down, giving up, you catch a glimmer off something just out of view. Crawling, you discover a muddy puddle. Enough water, you think, to last several days. It suddenly appears you might survive until help arrives. You're outlook? Pretty damn good...lol. If it takes longer than a few days to be found? Well, you'll worry about that when you start sucking on the damp sand... I'm half joking, but I think you get my point. Studies based on "perspectives" are hard to trust. Here are the facts, and I've seen this trend myself. If you're thinking about selling your home, and it's a straight forward sale (not a short sale/foreclosure) you're in high demand. Those buying in todays market understand what's involved in buying a distressed home. Many buyers find it worth while to spend a bit more, to not subject themselves to the process. This drives up home prices, and creates demand. Oh, and new home sales are at record lows (40 year record lows), so buying new isn't an option. Foreclosures and Short Sales aren't going to go away, and some think they will increase over the next 12 months. Some buyers will rethink the hassle, and purchase. Demand for the "easy purchase" homes will go down, and home values might stall. Also, if more sellers decide to sell, home values will be effected. Supply and demand. THE BOTTOM LINE? It's a good time to sell. It's better than 12 months ago, 2 years ago, or even 3 years ago. It's also a great time to buy. If you're looking to get into something a bit nicer, increasing prices won't just effect your home. The one you want will increase as well.
Shelve all the unrealistic expectations, get your home on the market, and make your move. Hey, I'll help you with it...lol.
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Market TRUTHS..!
 Every time I talk with a new client about selling their home, I get the same comment, "Todd, my home just isn't worth what is was four (4) years ago, so why would I want to put it on the market?" or, "So I put my home on the market, there's no way I'm going to get what it's worth." Here's a good one, and one of my favorites, "In 5 years the market is BOUND to recover a bit. I'll sell then." I pride myself is calling it straight, so here are my comments... First... Yes, your home ISN'T worth what it was four (4) years ago. Would it have been great to sell your home for TWICE what you paid? Of course... For the 10 minutes after you sign the paperwork, you would be feeling amazing...! REALITY BREAK MOMENT In the home frenzy between 2002-2007 you might have been able to sell your $100k (original cost) home for $330k. I fall into into this category. If I had sold (lured by the money), I could have pocketed a TON of cash. Paid off some loans, bought some toys, cleaned up any lingering credit cards. Hey, I could have started over in many ways. I would have also been looking for another home... So here am, looking for another home. Surprise, Surprise... All the homes I'm now interested in purchasing have also tripled in price. I wouldn't have been alone. This happened a LOT..! Homeowners sold, only to find that the homes they could "afford" (based on their income), weren't AS NICE... The only thing that basically stayed the same? Everyone's INCOME...! Yes, the banks were a bit loose with money back then. I could have wiggled my way into a loan for the $600k home, but my payment would have TRIPLED..! All the money I "made" on selling my home (what was left), would have went right back into the home I purchased. The difference? Well, my new home was pretty much what I sold, only with a higher mortgage...!  TODAY'S MARKET Your home is now worth $180k, much lower than the market highs. However, the home you're looking at (you know, the one above) is now selling for $300k (maybe less if bank owned). You crunch the numbers, and "low and behold" you can actually afford to make the move. Some (Not many, since my clients are the smartest in Phoenix) of my clients loose focus on what goes into buying a home. It comes down to basically the following points...
Questions 1-5 are important, but those are FACTS of buying ANY home. Number six (6) is the MOST IMPORTANT. Number six (6) is DIRECTLY related to how much you're spending. The price of the home you're buying. Your TOP DOLLAR... If you focus on your home, and not the home you're interested in, you're going to make a HUGE mistake..! Yes, we all hope the market recovers. But when it does, the home you're looking at is going to head up in price too... It'll become more expensive, and possibly out of your budget. So, is it a good time to sell, even if you're home isn't worth what it was back in 2007? Yes, because everyone took the SAME hit, making your dream home now affordable. |
What are the DIFFERENCES between Agents?
What are the DIFFERENCES between Agents?
 When I sat down, during a semi quiet moment at home, and told my wife about my idea for this article, I was unsure what type of reaction I would receive. I was greeted with a simple smirk. My wife lives outside of real estate. I joke she has a "real job". Set hours. A desk, around other people. Lunch breaks. Set hours. You know, a "real job." So she's always looking at my ideas from a slightly different point of view. While she's more than versed on why I'm "different", she thought the article wouldn't come off as something unbiased... With this burning at my brain, I'm going to give it a shot. You locate an Agent. Maybe it's a friend, or friend of a friend. A referral. Simply, you hire an Agent to do one simple thing. Sell your house, or find you one. Maybe you've been doing some research online, and have found it pretty easy to locate properties, or compare yours, to others on the market. It was "Easy", so as long as your Agent is breathing, they'll do... HUGE MISTAKE Is it HARD to locate something for sale online? Nope. Is it tough to open the door, allowing you to walk through? Nope. Tough to point out the number of bedrooms? Baths? NOPE..! Honestly, there are times leading up to the negotiation phase that I want to simple melt into the walls...lol. My clients know what they like. Typically they explain it pretty clear, making my job easy. Everything leading up to the actual "negotiation" phase is more time consuming, than work. Now to my point... Real Estate Agents have a LOT in common with Sports Agents... I get a strange look every time I explain it this way, but I feel it fits, perfectly. A Sports Agent represents an athlete who has a set talent. His/her job? To market that talent against all the other talent on the market. Oh, and to negotiate the best deal possible. If you're selling your home, your "Agents" job is to market & point out all the POSITIVES. Like a Sports Agent, your home needs to appear "Special", or one of a kind. How is your home going to make the buyer happy? More happy than the house down the street. Highest priced? Well, your Agent better show the buyer WHY! Want a tip? No one is going to part with their hard earned money unless they SEE A REASON TO SPEND MORE..! Like the baseball player that hit 40 home runs, the Agent better point out that he can also catch... What if there's an issue? Well, the Agent better understand how to down-play the negative, and up-play the positive. If you hire an average Agent, well, expect an average result. You'll get less for your home, or sticking to the sports analogy, you'll get a smaller contract... My "Job" as your Agent is to market your home like it's a Super Star. The only way you do that, is to NEVER do "anything" like everyone else. If you have a great pool, then it's my job to show that pool off. Your pool should equal dollar signs. You don't accomplish this by simply taking a photo. Even a SUPER nice photo... The 50 thousand dollar kitchen? MONEY..! If your Agent simply does what everyone else does, how is that going to make your home "Special"? How can your Agent expect to get top dollar? A Sports Agent might have a great prospect, but if he doesn't show how high, far, fast, accurate their client is, there's no HUGE contract out there for average...! My job is to PLAINLY SHOW why your home is a BETTER fit than EVERYTHING else out there. Why your home is going to make the buyer "Happier" than the other homes they've seen... ONLY YOUR home can have this effect. Oh, and here's WHY..! OK, you're on the other side. You've found a home you like, and you WANT IT. My job is to "expose" how this home is simply one of many, and to push for the best deal possible. What if you find a home that "is" the best of the best. The Agent representing the home (yes, the home. No one buys the homeowner...), understands he/she has a winner. Coming to a compromise is an art form. It's a talent. Expressing how an agreement benefits BOTH SIDES doesn't just happen... I HONESTLY understand that every client is different, and that there isn't a single script. I hope you give me a chance to show you how I do business. VERY FEW Agents are alike... |
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