Real Estate Investment Demystified

Brace yourself, I am about to tell you something that may be shocking. Real estate is hot. Don’t believe it? What if I told you that real estate is a great investment to earn additional income, and it can be simple. How do I know this?  Because I have personally helped clients earn tens of thousands of dollars through real estate investments.  And no, I do not own a time machine and I did not travel back to 2005. 

With all the current opportunities, I ask myself why people are not taking advantage of these options. My goal is to briefly explain the process of investing in real estate so you can determine if this tool is the right option for your financial interests.

There are two primary reasons that investors typically do not choose real estate. First, they do not understand the true potential, and second, they feel that compared to stocks, bonds, annuities, etc., real estate is just too much trouble and too complicated. In my experience, real estate helps to diversify a portfolio and may give your investment dollars greater impact. This is true even in today’s uncertain housing market.

A real life example:

When you place $15,000 into most investments you receive $15,000 worth of investment. When you place $15,000 into real estate, however, you can receive $125,000 worth of investment. If that piece of real estate appreciates at 10%, you earned $12,500 in investment dollars as compared to $1,500 in investment dollars for your other investment. QUITE a DIFFERENCE!

The next question is what does it really mean to invest in real estate? Let’s look at another example.

I have a client; I'll call him Joe.  He takes the opportunities available through real estate to heart. Joe purchases foreclosed homes auctioned daily at the courthouse.  I receive a list each day of about 400 homes up for auction the following day.  Quite the inventory for making a bundle!!  After running comps on select properties, if I feel Joe can make a profit on a fix and flip, I recommend these properties to Joe. 

Joe has authorized an associate at the courthouse to place bids on these properties up to a certain amount.  If we are successful, we pay cash and receive the deed from the Trustee.  I have worked with Joe to secure a great team of trusted contractors. Joe sends his people out to do the necessary repairs and I list the house.  We usually make around $20,000 - $25,000 on each property within 90 days.  Not a bad return, huh?  We also offer financing for these properties, but keep in mind we are not in the lending business so you'll need to put 20% down and get it refinanced when you can. 

I hope this explains some of the mystery around investing in real estate. My goal is that you and your family are able to live your dream.  Let me know what you think and if you have questions or wonder if investing in real estate is an option for you, contact me.  

Dream Home Catchers Fun-tivities Guide

We are proud to announce the Dream Home Catchers Fun-tivities Guide. Below is a list of the best activities and resources for anyone living or visiting the Valley of the Sun! If you have any questions or would like more insight to living in the Phoenix make sure to give us a call.

http://www.cactusleague.com/

http://www.westgatecitycenter.com/

http://www.golfcoursewebpages.com/eastwestvalley.html

http://www.phoenixzoo.org/

http://www.suncityaz.org/

http://www.azcentral.com/community/peoria/

http://www.gpglcc.org/

http://www.jobingarena.com/

http://www.surpriseregionalchamber.com/

http://www.wnba.com/mercury/

http://www.phoenixmag.com/

Phoenix is a great place for families, couples nearing retirement or anyone looking for an active vibrant lifestyle! 

Baby Boomer City!

“Let’s cheer as the first of the baby boom generation, the healthiest, best-educated and wealthiest in the nation’s history, turn 65.  Celebrate their vitality and especially their variety -- a generation that spans the Beatles and Springsteen, that crusaded to end a war and stop the spread of nukes, that powered an explosion of new technology, fueled the feminist revolution and joined the battle for civil rights,” according to AARP, the American Association for Retired Persons.

Approaching retirement, Boomers are becoming seniors and are beginning to prepare for retirement and to move into active adult communities.  Sun City West, Arizona has taken notice of the arrival of the Baby Boomers with marketing plans geared toward them and the study of future social gathering places.  The community is prepared to change for this new generation of seniors. 

“Sun City West will transform itself due to the activities and social preferences of those just entering the “boomer generation“, says Jack Steiner, a member of the Boomer Club in Sun City West. “Those activities will be more vigorous and be totally different than what existed when Del Webb built this community“ 50 years ago. 

A Baby Boomer is someone born in the 20 years following World War II.  A lot of the boomer seniors are still working and Sun City West restaurants and retailers may have to accommodate these working golden agers by staying open a later than the usual 8 PM closing times. 

Baby boomers think (and sometimes act!) like they are still 30 years old and in order to appeal to more active seniors, the area will include additional nighttime  activities plus adding a few sports bars and or dance clubs within the walls so residents can continue acting the age the Boomers feel they are.  Boomers are not out to disrespect older seniors, just want to enjoy life as they have come to know it.  

Sun City West offers many amenities that would attract seniors of any generation including four community recreation and fitness centers, seven golf courses and a 30-lane bowling alley.   There are outdoor concerts most of the year and with this new rock generation arriving, you can be sure there will be some outstanding classic rock coming to town.  

For more info on Sun City West, visit: www.suncitywest.org or contact Kathleen McMullen, Dream Home Catchers, www.dreamhomecatchers.com, 623-512-8152.

Lofty Living In Phoenix

As a real estate agent I have always been fascinated with different life styles and types of housing. Since moving to Phoenix I have witnessed how the Phoenix metro area has changed and evolved. Many families have been drawn to the single family homes in Phoenix’s sprawling suburbs for the schools and parks. People entering retirement move into manageable smaller homes surrounded by activities and friends. Now as Phoenix continues to evolve we have seen urban dwellers drawing them today’s our emerging downtown.

Many of my clients from the East Coast are calling me and asking about Loft Living in Phoenix.  Lofts are popular on the East Coast, but are new to the Phoenix area and are mostly new construction.  These are not old warehouses or buildings that have been converted into lofts, but brand new loft style condos.  Most are centrally located in Phoenix and right by the light rail which makes the commute easy, either way. Phoenix Lofts are spacious with many amenities including private garages, ample storage, fitness centers, spas, pools, security.  Many include hardwood floors and stainless steel appliances.  They can be 1-3 levels in high rise buildings, penthouses, or those in smaller buildings above restaurants and offices.  Most all have excellent views.  Yard maintenance is a thing of the past and social and cultural opportunities are close by as are sporting events.  Restaurants, wine bars, theaters, and museums are all within walking distance.

What is even more interesting, is the urban dwellers that are being drawn to these downtown oasis. Baby Boomers and successful young people are excited about loft living and what city life has to offer them..  Loft Living is very popular in Phoenix, AZ and the developers can barely keep up with the building of these lofts.  If you would like to experience a true adventure in living, I would suggest you take a look at Loft Living in Phoenix.  It is a fast growing niche in the housing market and an attractive alternative to traditional housing. 

10 Reasons Why Renters Should Buy Real Estate Now!

Life is full of milestones.  As a real estate professional, one of my personal favorites is when people make the leap from renting an apartment to owning their own home. Achieving the America Dream marks a significant change in a person’s life. But with daily headlines blasting stories of lower property values, foreclosures and economic downturn, many people are taking a good hard look at their options before signing their name on the bottom line, as well they should.

Despite the headlines purchasing your own home is still a sound economic investment. I have always encouraged potential buyers to carefully consider all of their options before moving forward with purchasing a home. Now more than ever many people can significantly benefit from purchasing a home as compared to remaining in their rental.

Below are 10 reasons why you may want to consider purchasing a new home:

1. Save money: It may be less expensive to own than rent. Your mortgage payment may even be less than your monthly rent.  Even if your mortgage is higher, the tax benefits may outweigh the added expense.

2. Desirably: Trulia.com analyzed the largest 50 cities in America as to which are better to buy in versus rent in. They ranked Mesa #6 and Phoenix #8 as best areas to buy!

3. Affordability: Many buyers who could not afford to buy a home a few years ago can now afford to buy. The Greater Phoenix median purchase price level is close to what it was in the year 2000.

4. Interest rates are very low! Save money! The lower the interest rate the lower the monthly house payment.

5. Save on taxes: If a buyer itemizes on their federal tax return, they can deduct mortgage interest and property taxes. These tax deductions may mean it costs less to own your 1500 square foot house than to rent a 900 square foot apartment.

For example, if someone paid $12,000 in mortgage interest in a year and were at a 20% federal tax rate, they may receive up to a $2,400 annual tax deduction. (The buyer needs to see their accountant as to which is better for them: itemizing deductions versus taking the standard deduction before buying.)

6. Supply: A home buyer has so many choices – one-story or two; patio or backyard; Tuscan or southwestern.  The choices are endless.

7. Negotiating power: Since it is a buyer’s market, the seller often will pay many of the buyer’s closing costs and prepaid expenses.

8. If you previously owned and lost your home to a short sale or foreclosure you may still be able to buy again and don’t know it.

9. Home ownership means a place of your own and place to put your own stuff!  All of it – no more storage units.

10. Someday home prices will go up again!

At the end of the day, purchasing a home is a huge responsibility.  However many people stand to benefit from purchasing a home over renting. Consider the benefits and don’t be paralyzed by fear. See your Real Estate Professional for details and recommendations based on your personal circumstances.