Winchester...are you ready to fix the real estate issues?

J

J.K. Rogers

Licensed Driver
Winchester,

I did not win the Senate seat last night. So what. We can still make things better. Are you in? I need the real estate community to forget the past and let's get together fixing the future. Blank sheet of paper.

Your Friend,

jk rogers
 
I'm Floored,

Within the next couple of days I am going to get with a website designer. We need to get maximum exposure to our real estate opportunities. My feeling is we need to get real estate experts...loan originators, real estate agents, attorneys, business people etc together and let's brainstorm everything that makes it difficult for people to buy real estate. Let's seek to eliminate distracting negative influencers, so that, we have the easiest, most efficient process in the country. Once we get that as competitive as possible let's ensure we disseminate as effectively as we can to get in front of as many people as possible.
I told Winchester we had 6,000 distressed properties. He advised me back, that we have 20,000 lots/homes available. (distressed and otherwise)

The key is building momentum. People are stuck in first gear. We have a blank sheet of paper. Let's
hit the HIGHWAY!


Sincerely,

jk rogers
 
I think the biggest thing preventing people from buying homes today is unemployment and underemployment.
 
I'm game! But we may want to talk before you get too deep into this. It's a monster of an issue that many of the problems are directly caused by the federal govt. and their over regulations.
 
I'm in as well. And I'm happy to say I voted for you, Jason.
 
Winchester said:
I'm game! But we may want to talk before you get too deep into this. It's a monster of an issue that many of the problems are directly caused by the federal govt. and their over regulations.
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C. Mark said:
I'm in as well. And I'm happy to say I voted for you, Jason.
Click to expand...

With these two amazing real estate guys helping, you can't go wrong!! :cheer1 :cheer1 :cheer1
 
C Mark,
Thanks for the Vote!

Winchester,


You are probably right about the Feds. With that said, what if we are the only folks that say we don't care and we push forward anyway. Then we will stand out across the country. My perspective is we can sit here and let people "shoot" (not literal) at us or we can get our gear and take some kind of action. When we move forward, even if is slowly, we will figure things out.

We have to have a plan. Right now we are a bottle floating around aimlessly in the ocean. Whose fault is that? Doesn't matter. Let's get the smartest people available and get going. What do we have to lose? Nothing but our property values!

Sincerely,

jk rogers
 
Jason, I can be reached at 770-324-6995 or mark@idealrealestateprofessionals.com
 
Just say when. Put together your questions and ideas and lets get together. There's lots that can be done on a local/state level but the biggest hurdles are with the federal regulations in the mortgage industry. It went from little to no oversite to over bearing micromanagement!

If you get some time, check into the Frank Dodd act from 2008 I think. Until it's repealed it will be an up hill battle.

Steve.Adkins@metrobrokers.com, 404-843-2500
 
I've been thinking about this for a few days now and one idea keeps coming to mind that can (and is) be done on a local level. And this can be a group effort of Hwyer's, we have the people to do it.

In short, forming a group (and create a business or corporation) of interested people with skills (and unskilled) in construction and the housing industry. Buy foreclosed properties in rough shape, rehad them and redell sell them for a profit...hopefully.

I know a few of yall have talked about doing something like this on your own. But by forming a group of like minded professionals (and laborers lol), the work can be completed quicker and cheaper, making for a greater chance of greater profit. Plus those who have businesses in the field can put some people to work and make a little money also.

Of course the devil is in the details. Some of the types of businesses we will need are real estate professionals :) (agents, attorneys, accounting and lenders), construction professionals (General Contractors, roofing, flooring, drywall, HVAC, electrical, plumbing, etc) and a host of non or semiskilled laborers for cleaning, painting, assistants, etc. But we will also need investors willing to flip the bill until we have enough sales to be self supporting.

There's a lot more to this but wanted to keep it short for now to see if there was any interest in this? Give me some feedback folks? Have a company related to the housing/construction industry? Tell me about what you do!
 
Winchester, I've done rehabs, dozens of them, and my feeling is that this isn't a market where you want to try and turn a house. If you don't do all the work yourself, and even if you do, you have a substantial outlay of cash over a significant period of time even in a good market. There is also no guarantee or even reasonable expectation that you will turn a profit on that investment, and every month on the market not only delays profit and hurts cash flow, but it costs you money.

IF I were to make an investment in distressed single family right now, I would seek out properties that require a minimum amount of cash to be used as rentals. The "profit" would be in the relatively low cost of money vs. the active rental market, and the tax advantages associated with rental housing. I would expect to hold these properties for at least 7-10 years.
 
LTD, when talking about tax advantages in rental housing, do you mean for the owner or renter? What kind of advantages?

Sorry for the hijack.
 
lotstodo said:
Winchester, I've done rehabs, dozens of them, and my feeling is that this isn't a market where you want to try and turn a house. If you don't do all the work yourself, and even if you do, you have a substantial outlay of cash over a significant period of time even in a good market. There is also no guarantee or even reasonable expectation that you will turn a profit on that investment, and every month on the market not only delays profit and hurts cash flow, but it costs you money.

IF I were to make an investment in distressed single family right now, I would seek out properties that require a minimum amount of cash to be used as rentals. The "profit" would be in the relatively low cost of money vs. the active rental market, and the tax advantages associated with rental housing. I would expect to hold these properties for at least 7-10 years.
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Yes, I agree 100%.
 
MrsB said:
LTD, when talking about tax advantages in rental housing, do you mean for the owner or renter? What kind of advantages?

Sorry for the hijack.
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Owner. You can write off the cost of simple repairs and normal business expenses in the year they were performed, you can write off some of the rehab at an accelerated depreciation, and you can depreciate the value of the home and the rest of the rehab over a longer period. The specific rules are quite complicated.

Here's a rule of thumb,and it doesn't apply in all situations. If you can purchase and rehab a property, and convert to long term financing after the rehab, and you can rent the property for 92% of your TOTAL monthly expenses, then you can show a long term profit. Now this is just a rule of thumb, so don't go out and loose your butt on rental property and blame me. 8)
 
lotstodo said:
Winchester, I've done rehabs, dozens of them, and my feeling is that this isn't a market where you want to try and turn a house. If you don't do all the work yourself, and even if you do, you have a substantial outlay of cash over a significant period of time even in a good market. There is also no guarantee or even reasonable expectation that you will turn a profit on that investment, and every month on the market not only delays profit and hurts cash flow, but it costs you money.

IF I were to make an investment in distressed single family right now, I would seek out properties that require a minimum amount of cash to be used as rentals. The "profit" would be in the relatively low cost of money vs. the active rental market, and the tax advantages associated with rental housing. I would expect to hold these properties for at least 7-10 years.
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You forget, this IS my industry. I fully understand what's going on and see what is happening and I have to beg the difference.

Buyers right now are swarming over "ready to move in" properties. Almost all are getting multiple offers, with a LOT of cash buyers bidding $5K to $8K over appraised value. That doesn't work for financed buyers but cash buyers don't have to play by same rules. The average time on market for a ready to move in property is now less then 2 weeks. We have a less then 3 months supply of under $100K houses right now...and dropping. Inventory is dropping and demand is raising. Out of the 20+ offers I've submitted this year, only one did not have multiple offers in 24 hours.

The market changed greatly around the end of the year and has continued to date. But what people are avoiding are properties needing some work first. These often sit for 120 to 150 days and then an investor buys them for half the listed price. I have seen some go for less the $40K and all they needed was plumbing repairs, paint and carpet. A few need some minor drywall work. They are then being rehabbed and resold for $60K to $70 with $10K to $15 worth of repairs.

I didn't talk about rental properties yet for a reason, just to keep it brief. But that is expected to remain the hottest part of the market for the next 5 years. Rates have been steadily going up for the last 9 months in all areas of the County. Last year the average was around $750 to $800 per month, now I'm seeing $850 to $900.

Investor buyers are now coming in from all over the Country. Last month one of our agents worked with a pilot out of Texas, closing on his 3rd property in this area. He already has 100+ in Texas and other states.

This is not going to be easy. No one is going to get rich off one deal. It's going to take a LOT of work and planning. It's not going to be for everyone and there will be risks. I'm just throwing the idea out there as a group can get more done then any individual. Not trying to talk anyone into to something either.
 
lotstodo said:
MrsB said:
LTD, when talking about tax advantages in rental housing, do you mean for the owner or renter? What kind of advantages?

Sorry for the hijack.
Click to expand...
Owner. You can write off the cost of simple repairs and normal business expenses in the year they were performed, you can write off some of the rehab at an accelerated depreciation, and you can depreciate the value of the home and the rest of the rehab over a longer period. The specific rules are quite complicated.

Here's a rule of thumb,and it doesn't apply in all situations. If you can purchase and rehab a property, and convert to long term financing after the rehab, and you can rent the property for 92% of your TOTAL monthly expenses, then you can show a long term profit. Now this is just a rule of thumb, so don't go out and loose your butt on rental property and blame me. 8)
Click to expand...

Now if you are renting at 92% of your monthly expense, how are you making any long term profit?

Most investors are currently renting for $200 to $300 above their monthly expense.

Just curious as I'm confused with your numbers.
 
Winchester said:
lotstodo said:
MrsB said:
LTD, when talking about tax advantages in rental housing, do you mean for the owner or renter? What kind of advantages?

Sorry for the hijack.
Click to expand...
Owner. You can write off the cost of simple repairs and normal business expenses in the year they were performed, you can write off some of the rehab at an accelerated depreciation, and you can depreciate the value of the home and the rest of the rehab over a longer period. The specific rules are quite complicated.

Here's a rule of thumb,and it doesn't apply in all situations. If you can purchase and rehab a property, and convert to long term financing after the rehab, and you can rent the property for 92% of your TOTAL monthly expenses, then you can show a long term profit. Now this is just a rule of thumb, so don't go out and loose your butt on rental property and blame me. 8)
Click to expand...

Now if you are renting at 92% of your monthly expense, how are you making any long term profit?

Most investors are currently renting for $200 to $300 above their monthly expense.

Just curious as I'm confused with your numbers.
Click to expand...
It is way to complicated to go into here Winston. But basically you have depreciation against profit that cuts your overall tax liability as well as appreciation of the home over the current cost of money. But if you don't hang on to the property to realize these gains, then you need to make a direct profit from rental income. Also keep in mind that your expenses will remain relatively flat over the 10 year period and your rental income will grow, historically at a rate above inflation.. 92% is the starting point for the first year's rental, and I may have not made that clear. It's a 7- 10 year plan.

Winston, I respect your expertise, but as an investor and former contractor who has actually done what you are talking about, I would not be on board with any sort of flipping scheme right now. The cost of new construction and remodeling is way above what existing homes in decent condition are selling for, and that is your competition. You simply can't pour 2012 dollars into a market that is selling at 2002 prices. It's a no win situation. As an investor, the only way to look at the current market is longer term.

BTW, I have bought vacation property this year and intend to hold on to it. I believe we are at a low point in prices, and took advantage. I look at it as an investment that pays extra dividends as a sweet place in the mountains to chillax.
 
There are multiple ways to be successful, (in my opinion). If people are made aware of what options are available we have STIMULATED the market. Ultimately, that is what I want to see. We get interest in the market, we inform the interested parties of the options that are available and they determine what path they want to go down. They will win, because, they get a ridiculous deal and you win, because, you get the clientele. WE ALL win, because, the buyers will need loan originators, agents, appraisers etc. Prices start to correct to a more reasonable level giving people more equity in their housing. Then they upgrade their flooring, carpet, decks etc. We combine this with an entrepreneurial plan and all of a sudden things have turned around. People are excited, not depressed and the momentum builds.

Keep up the brainstorming!

Sincerely,

jk rogers
 
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