Investing in Real Estate

During the real estate boom everyone was flipping houses. Aunt Edna, the Priest, and the high school quarterback would form an investment team, purchase a home, make some minor repairs, and sell it for a profit. The flipping boom was fueled by cable TV shows like "Flip that House." And for the most part these amateur investors did well too. However, as the boom ends, is this realistic anymore? Is flipping even a good strategy at all anymore?

Well, here's my opinion on real estate investing. Take or leave it, but I think it makes sense.

1.) Never count on appreciation when investing. If you are going to put a number to appreciation I think 3% annual appreciation is a good, safe average.
2.) Plan on holding your real estate investment long term. Even if you don't hold it long term, be prepared to.
3.) You have to make the deal going in. It has to be a bargain property at the time of purchase.
4.) Flipping is not a good investment strategy. Usually you are counting on appreciation and a strong real estate market to carry you - that's not smart. Plus. you've got your real estate fees, title fees, escrow fees, capital gains, excise tax, and other fees that eat into your profits.
5.) Single family homes are not a good bet. Why? A single family home is either 100% vacant or 100% full. Multifamily homes spread your risk over multiple units. You can usually purchase up to a fourplex with a residential loan.
6.) Commercial buildings are where most successful real estate investors usually go. This is not to say you have to start out with commercial buildings, but they're a good goal.
7.) Think about your tax burden. How can you use your investments as a tax advantage, not disadvantage.
8.) Are you a real estate investor or is it a hobby? If its a hobby, be sure you have the time, energy, knowledge, and finances to support what you're doing.
9.) Put your heads together. Investing is always done better in teams then solo. It spreads the risk, and you'll gain knowledge from your partners. On the other hand, be careful about investing with friends and family. Deals can go bad, and people can get hurt. Be prepared.
10.) Have fun. Real Estate investing should be a bit of an adventure, so have some fun doing it!


Best of luck to you real estate investors... much success in your future ventures!

It looks like Seattle and Tacoma are still winners

Washington State appears to be bucking nationwide real estate trends by reporting double digit appreciation for 2006. It appears the market may remain strong even into 2007. Check out this CNN Money Report. This report is not alone. The NWMLS (The MLS system serving the Seattle- Tacoma area) is reporting that sales in August were higher than those in July. What is going on here? I guess only time will tell.

Why is it so busy?

Despite today's Seattle Times Article about the softening of the Real Estate market, this has been the busiest week in my real estate career. Perhaps the fall weather has gotten the sun hungry Washington residents "back to business." Maybe its that kids are back in school and parents finally have 2 minutes to call on a listed property. I'm not sure. However, I do know that I have shown over 50 listings to buyers in the last 2 weeks, listed 4 homes, and closed 2 deals... I am beat. I can't complain though, business is business, and I would rather be busy then slow.

Real Estate Bullies

This is a follow up to my previous blogs. If you are a real estate consumer, please forgive the minutiae of Real Estate Politics. Anyhow, please find a great article from Morgan of Real Estate Webmasters regarding the use of the term MLS on websites. I also encourage you to look at the REW forum in which this topic was discussed at length. On the forum, I am 4PercentRealtor.

Much Love to all, and may equity, fairness, and the little guy prevail!

Morgan's Blog: NWMLS threatens fines on its own Realtor
REW Forum: NWMLS threatens fines on Directory Listings

The Multiple Listing Nazis

NOTE: THIS POST IS DIRECTED TOWARD MY FELLOW REALTORS:

If you notice I did not use the word "service" in my heading. That is because a particular Multiple Listing "Company" in the Washington area.... dare I call it the "Northwest" area of Washington has now told all agents to remove their logo, and the abbreviation generally accepted as representing Multiple Listing "Companies," from their websites.

It is the author's opinion that this Multiple Listing Company has overstepped its bounds. First, since when does one particular MLS own the rights to the term MLS? Has anyone seen any proof that this term is copyrighted? Secondly the legal bullies at this particular service have demanded, yea threatened, fines, legal action, blah blah blah, if I do not remove their precious terms from my website. Moreover they demanded that to me that I remove the term from another website in which I have no control (www.realestatewebmasters.com). WHAT NERVE!!!

It is the authors opinion that this service is tightening its control out of fear. As websites begin to offer national MLS databases, and Craigslist and Google Base give the consumer more control over Real Estate Listings, the MLS responds by tightening the rules. MARK MY WORDS THIS TIGHTENING OF THE RULES OUT OF FEAR WILL ULTIMATELY MAKE THE TRADITIONAL MLS OBSOLETE!

I don't ususally rant and rave on this blog... but as you can tell... this one miffs me pretty good!

View my website cleansed from the term MLS... Tacoma Real Estate