Posted on July 12th, 2009 by Richard. Categories: For Investors, Real Estate Perspective
The idea is simple. Find a home that’s offered at lower than market price and needs some fixing-up…buy it…put some work into it…and flip it for a quick profit. With all the stories about foreclosure and bank repos, one would think there would be a ton of them out there that would work. The trouble is, there really are only a few homes that fit the correct model. A home might be offered at lower than market price, but typically when the cost of fix-up, holding and marketing costs are added, the real cost isn’t below what market price would be for the same home if it were in good condition. I used the word typically because every once in a while there is a home that is worth a closer look. The purchase price and cost of repairs would seemingly leave enough room to make a decent profit.
What a lot of would-be investors don’t figure in though are the incidental costs that come up. Example: a furnace that looked and ran good when it was first looked at, but when the home is being sold, an inspection from a buyer’s home inspector reveals a crack in the heat exchanger that requires the purchase of a new furnace for $3,000 in order to make the sale. Or, after rehab work is started, you realize that the main service drain for the plumbing needs to be replaced. “Uh oh… that wasn’t in my budget” Usually there are at least a few minor “surprises” and some moderate ones that change the amount that the initial fix-up budget didn’t include. The key is to know what you are doing and to analyse the property carefully. Experience helps.
Another area to consider is Holding Costs. While the home is owned until it is sold, the meter is running on things like home owners insurance, property taxes, interest on any borrowed funds, utilities, Home Owners Association dues while it is being marketed. One never knows for sure how long it will be until the home is sold, and these items will eat into the profit margin quickly. Everything must be thought out and included when analysing a property as a rehab/flipper candidate.
Every once in a great while there is a home that still looks good after close analysis. The challenge then is to beat all the other investors who are looking for the same thing. An investor must be diligent at watching the market for potential rehab candidates. After one is identified, they must not hesitate to look at it. Then they must be very good at analysing the property to see if it meets the investment criteria. Then submit a written offer in that is accepted before someone else does it. Again, experience helps…plus a little luck. I’ve assisted a number of investors through this process.
I make this sound difficult because it is. It’s very hard to do and be succesful at it. Difficult?… Definately. Impossible?… No.
Posted on July 11th, 2009 by Richard. Categories: Market Conditions, Real Estate Perspective
I think everyone will agree that it’s been challenging the last year or two. And although the climate is improving, it will still be challenging in the immediate future. This includes issues concerning the economy, environment and the political landscape to name a few. It’s just my opinion, but I believe we have a clear choice to make individually and also collectively. We either sit back and complain, and wish how things could be…or do something about it. It’s a choice to either step up…or to step down. Personally, I’m choosing the former one because stepping down goes backwards…goes nowhere.
Everyone has their own perspective on the economy. Mine faces the real estate industry. As I look at the real estate market and the economy, I suppose I could join the group that complains and whines about everything. But where does that lead? Nowhere…backwards. It goes against my grain to think negatively about anything generally and especially things like this. The positive choice is to move forward…step up and move forward. So that’s what I’m trying to do. Sometimes choices are small ones and sometimes they are important. But when any decision needs to be made, there is one direction that’s the negative choice, or one that’s a positive choice. You know inside yourself which one is which. The positive one isn’t always the easiest direction, but it’s the path with ‘heart’. The path with heart is always the best one in the end.
Collectively, if we all make the positive choice, we can move mountains.
Posted on July 9th, 2009 by Richard. Categories: Nature, Photo Flash
It’s that time of year finally. I can hardly wait after a winter and spring with nothing but “store bought” tomatoes. These are growing in my garden now along with several varieties of herbs and peppers. There are already some tomatoes that are about the size of baseballs and lots smaller too. I’m trying a new kind this year called Heirloom.They just looked very interesting with purples, greens and reds. So that will be fun to have those in a few weeks.
If you have a garden this year, send me a photo. I will be launching a “prettiest garden” contest soon. Haven’t figured out the prize yet but it will be something appropriate.
Posted on July 8th, 2009 by Richard. Categories: Just for Fun
I was remided that a unique moment in time is occurring soon. Today, a little past 12:30pm, the calendar and time synchronize to produce an interesting set of numbers. At 12:34:56 o’clock on July 8th, 2009 it will be 1,2,3,4,5,6,7,8,9. I’m sure everyone will feel a cold chill run up their back at that exact moment. I suppose I should run outside and shoot off some firecrackers, bang some pots or pans, or maybe if I’m in the car then I should honk the horn for a bit. This is something that only occurs every thousand years!
I’m the kind of person that goes for this kind of stuff though. Like in the car when the speedometer changes from 99,999 to 100,000…that’s a huge event for me. And then I got to thinking, this moment occurs again in every single time zone around the planet an hour apart…not just here in ours. So I guess it’s not really that special. Just another man-made event courtesy of our calendar and timing systems. The planet doesn’t really know what the time is. The calendar is just something someone made up to keep track of the number of times the earth has gone around the sun and number of times the earth has rotated on it’s axis. Time measures the speed at which the earth rotates.
Years from now I’m sure everyone will remember exactly where they were at that moment, when the clock ticks to this exact time, like President Kennedy’s assassination or the World Trade Center disaster. Then again probably not.
Posted on July 7th, 2009 by Richard. Categories: For Home Buyers, For Home Sellers
The sale of one of my listings closed today. What I hope for at final closing is that everything goes smoothly, that the mood is positive and everyone goes away happy. That’s exactly what happened today. It’s an important time in the lives of the Seller and Buyer. Both are ending a chapter and beginning another one, so you want things to begin or end on a happy note. The key is to get the details worked out well in advance so there’s no pressure on my clients or myself. It’s better than being uptight with lots of last minute loose ends to pull together. If I’ve done my job correctly, then there’s nothing left to do for me except show up, relax and smile.
It’s always interesting to me how every closing has it’s own personality. Most go very smoothly, but sometimes the sale can be a stressful time because of the circumstances. Maybe a job loss, or divorce, or settling an estate….so it’s not always easily done. But still, that’s what I try to do anyway. When a transaction closes, there are literally dozens of things that have to come together at the same time for the event. I do whatever is necessary to step through the process or supply the information needed to the Title Company who coordinates everything for closing.
And if all those details weren’t enough, there’s a new requirement that puts another demand on everyone. Now a Buyer can’t just show up at the closing with a Cashiers Check for their down payment. New laws that took effect July 1st require that these funds be wired to the closing instead if over $10,000. It just means that people have to get their money together a couple days earlier and make sure their bank wires the money with enough time to make it before closing. It’s just my own theory, but I think they changed that law because some of the government agencies just want to know exactly where the money is coming from for a closing. They can’t monitor checks as easily but can tell exactly where a wire comes from.
Oh well… just tell me what I need to do and I’ll get that done too. The sooner I do it, the sooner I can relax.
Posted on July 6th, 2009 by Richard. Categories: Downtown
If you feel like doing something a bit out of the ordinary, and a little romantic and fun, this may be just for you. Take a slow cruise in one of the horse drawn carriages for a ride through the central downtown area. Can you imagine… a moon lit summer evening, a comfortable seat in your regal looking carriage and the soft clip clop sound as your horse walks along.
I have always been a bit curious about the carriages so when I was downtown on foot not too long ago, I happened to talk with a carriage driver named Sky who works for Yellow Rose Carriages. Both he and his horse Riley were taking a short break near the Monument while waiting for their next fare. It doesn’t take much to tell that Sky has a genuine love and enthusiasm for what he does. Which is great because it’s a full time job for him. I always admire anyone who is working at something they love to do.
And if you watch Riley, he’s a natural at working the crowd…sort of the strong silent type…a really gentle animal. I studied Riley for a while from a short distance as people came up to him and he always brought out a smile from everyone. Sky told me about the lodging and care that Riley gets on a daily basis. It’s extensive. I know some people that don’t have it that good. He said Riley really enjoyed pulling the carriage and also it was good exercise for him. He’s a draft horse and helped him to stay in shape. It was sort of spooky though. Some of the time I was looking at Riley, I found myself having to resist the urge to ask him “Are you the Key Master”? I guess I have seen the movie Ghostbusters too many times.
As long as the weather permits, the carriages are available about every day of the year from mid-evening to 11 or 12 o’clock at night, with extended hours on the weekends.
Posted on July 5th, 2009 by Richard. Categories: Cuisine & Restaurants
Even if it’s not Sunday…there’s one place that serves a Sunday-style family dinner every day. Hollyhock Hill is one of those places that just never changes. The building, the decor, the menu…hasn’t essentially changed since they opened more than 75 years ago. They don’t have to. Their customers love it just the way it is. You can’t argue with the logic. If it isn’t broken, you don’t need to fix it.
If you are looking for fancy, upscale modern decor, then this is not the place. You feel much like you are entering someones home, and sitting down to eat in their dining room. If it’s exotic cuisine you are interested in, it’s not here either. They are famous especially for their traditional fried chicken dinners, including a big platters of chicken, bowls of mashed potatoes and vegetables and all the trimmings that everyone passes around the table just like you would at Grandmas house.
There really isn’t another restaurant like this one in the Indy area that I know of. One of few places left where you can have yesterday today. Located at 8110 N. College Ave.
