Top 10

Ugh... Still in the top 10.

Good news is we aren't #1.

1. Detroit 4.9%
2. Stockton, Cal 4.86%
3. Vegas 4.2%
4. Riverside 3.8%
5. Sacramento 3.2%

9. Denver 2.6%

These of course are 2007 foreclosure statistice provided courtesy of Realty Trac. The US Average is a 1% foreclosure rate.

There is no doubt its a buyers market. Plan on living in to your place for 5 years or keeping it as a rental property.

Happy Dance!

On the 15th, Tanna & I sold our first investment property. We bought at the right price, didn't overdue the rehab process and successfully sold the property for a property in a very difficult real estate market. We put $8,000 into the property and made almost $10,000 in profits. Tell me where else anyone can see that kind of return on their money?

It was a peice of cake... Or not.

I will say that I just passed real estate investing 101. However, it was NOT easy. It was one of the most challenging and rewarding tasks that I've ever taken on.

I feel like a giant gorilla just climbed down off of my shoulders...

Some advice for those of you considering real estate investments:

• It won't sell tomorrow. Plan on hanging onto the property for 5 years. That being said, do enough updating so the property can be rented out. Wait until the market starts to take off before 'flipping' the property & putting it on the market.
• How long is your snorkel? Know your worst case scenario. If the property goes vacant or unexpected expenses pop up what is going to happen? Will you find yourself calling relatives and friends to stay out of foreclosure? Don't get in over your head!
• Get past appreciation. You make money buying at the right price and cash flowing. If you are banking on appreciation, you're going to need to hold onto the property for a long, long time.
• Get the right loan product. The right loan will help you meet your goals and maximize the return on your investment. There is no 'one size fits all' loan. Get the right loan for your needs.

I'm not an investment expert (yet). I believe that I am on my way. Wishing you all phenomenal returns on your real estate investments in 2008.

Would You Like to Own a Home?

I think it's fair to say that everyone would like to own their own home. It's the American Dream after all!

Oftentimes, sacrifices must be made to own a home. Most people will do whatever it takes. Others will not.

I think people need to take time to honestly and realistically analyze their financial goals as they prepare to buy a home.

1 - Budget. Don't fit your budget to the home. Find a home that fits your budget. Of course the more expensive home is nicer. As you battle to pay the bills every month, find yourself behind on taxes, fighting with your spouse and spread so thin that you can't afford to go out for a nice meal, you will despise this nice home and long for affordability....

2 - Stability. If you have no idea which state you will live in 6 months down the road.... don't buy a house unless you plan on renting it out. Have a stable job? Lead a pretty stable life? It might be time to buy!

3 - Prioritize. For fun, please rank the following in order of importance:

1. New Rims
2. $8,000 Birthday Party
3. Brand New Car
4. A Home

This seems like a big joke, but it's really not. Sitting in the office today, we were chatting about the most mind boggling reasons we have seen to NOT buy a home... Numbers 1 - 3 were our finalists.

My definition of "hood rich":
My rims are 20" and spinning. I partied like Keith Richards for my 25th birthday. Oh, by the way.... those rims are on my new Beemer!

If you're earning huge money, have a balanced portfolio of investments and are on track to meet your long term financial goals, I could care less if you are blowing some cash. It's play money for you!

Prioritize. Create goals. Build a realistic game plan to obtain those goals.

Would you like to own a home or are you on your way to home ownership?

Slimeball?

I recently shot an email off to a realtor whose client may be interested in our condo. Mid e-mail I stopped and asked myself what I was doing and why. Am I doing this for the buyer or for myself?

The honest answer is that I'm selling this condo for myself (and Tanna). Why? This was a business investment. I've put a ton of time, taken a lot of risk and worked like crazy to complete this project.
-My time is worth money. If I contracted this project out, it would have tripled my costs!
-This is an investment and I need to be see a return on this investment!

The fact that someone else will be able to buy their first home is nice. It makes me feel good to help make that a reality, but that is not why I bought a house and completely remodeled it!

So... am I a slimeball?

Absolutely not. This is a win-win situation. No one has ever told me that the condo is over priced! It's a fair deal and I truly believe the new owner will be stepping into some equity.

I win. I sell my condo and make a little bit of money for my efforts.

They win. They are homeowners stepping into a fully remodeled condo in an established neighborhood with instant equity!

Conversation

I was in the bank today chatting with a personal banker. The banker really envied me. Why?

1 - I have a few business accounts. I guess this makes it look like I'm running numerous businesses which seems to imply that I'm making a ton of money. Why else would someone need so many accounts? Answer: Record keeping. Running all of my flips, mortgages and rental through different accounts makes record keeping much easier.

2 - I am self employed. I get to set my own schedule and take as much time as I want to off! Not so fast.... I work evenings and weekends. I have to provide my own health insurance and I have no benefits. If you're looking for an 8-5 Monday - Friday with great benefits and 2 weeks of vacation, forget self employment. If your looking for 60 hours a week, working 6 days a week and no certainty of a paycheck..... look into self employment. (For the record, I love being self employed and never plan on working an 8 - 5 in a corporate environment.)

3 - Real estate investor = rich, right? I hope so. I'm far from rich right now. Hopefully, after a few sound investments, I'll see some big numbers in all of those bank accounts.