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

[gog8tors]

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

My friend and I were talking about something close to this. I wonder how many areas might be available for use as a retirement village. Particularly as a veterans community? I don't know if there is a veterans home/retirement area here in our area.

 

[Winchester]

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.

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)

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.

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.

What I'm getting at.....we have run out of the "2002 properties". Suitable inventory is extremely limited and when they come in the market they are getting at many as 15 offers within 24 hours. I understand what you are saying and it would be right on the money this time last year. But right now we have buyers who cannot find a suiteable property. We have never seen this happen before, even in the wild west days.

These properties will have to be sold, fixed up and either resold or made into rental properties. I'm sure the neighbors would prefer for them to be sold. The number of investors coming into this market has exploded since the first of the year. We will never see pricing like this ever again.

I do understand what you said about using depreciation to make your profit. And yes it is a 10+ year investment. Now we are seeing investors buying these $40K properties with a rehab loan, monthly payments after all is done in the $500 a month range and renting for $850+. Win win for everyone.

 

[Madea]

Quite frankly, all of these "investors" make me nervous.

 

[Winchester]

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

My friend and I were talking about something close to this. I wonder how many areas might be available for use as a retirement village. Particularly as a veterans community? I don't know if there is a veterans home/retirement area here in our area.

There's not a veterans type development that I know of but there are several "55+" communities in the County. They are pretty tough to get approved and have strict HOA's regulations. But this is all new construction. I don't think there is a zoning regulation that would allow this like there is for 55+ type communities.

 

[J.K. Rogers]

GoG8tors,

WOW! Great idea. Would it be legal to only allow one group (veterans) to buy into a community? I am guessing yes due to the 55+ communities. The VFW allows membership based on bringing proof of overseas duty.

Sincerely,

jk rogers

 

[lotstodo]

Quite frankly, all of these "investors" make me nervous.

A high concentration of small rental properties in one area can sometimes become a problem. Smyrna, Lithia Springs, and Powder Springs have had tremendous problems with this. The way Code Enforcement laws are written, it is extremely difficult to bring a subdivision back up once it starts to accumulate empty rental properties. Generally this problem is most prominent when an absentee corporation is the owner and manager.

Winchester, I wish you luck finding an investor, and I do agree that rental is probably the best way to sell it. There are companies that specialize in these sorts of projects, but they usually like to turn the properties within a year or so. Selling an investment property with a paying tenant is always a plus. You might look at that aspect of it.

Also, there are so many Federal agencies running around trying to shove money in peoples pockets to "fix" the housing problem, you may want to research what financing might be available for neighborhood redevelopment. I'd start with HUD. There will be a ton of hoops to jump through, but it might be something to look into.

 

[gog8tors]

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

My friend and I were talking about something close to this. I wonder how many areas might be available for use as a retirement village. Particularly as a veterans community? I don't know if there is a veterans home/retirement area here in our area.

There's not a veterans type development that I know of but there are several "55+" communities in the County. They are pretty tough to get approved and have strict HOA's regulations. But this is all new construction. I don't think there is a zoning regulation that would allow this like there is for 55+ type communities.

GoG8tors,

WOW! Great idea. Would it be legal to only allow one group (veterans) to buy into a community? I am guessing yes due to the 55+ communities. The VFW allows membership based on bringing proof of overseas duty.

Sincerely,

jk rogers

I know there aren't any veteran's communities. I was thinking if we start from scratch with ideas, we can go from there. There is "The Eagles Nest" at the VA, but what if we had something closer? There is a great need for veteran services closer then Decatur. We just have to figure out how to make it happen.

 

[Winchester]

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

My friend and I were talking about something close to this. I wonder how many areas might be available for use as a retirement village. Particularly as a veterans community? I don't know if there is a veterans home/retirement area here in our area.

There's not a veterans type development that I know of but there are several "55+" communities in the County. They are pretty tough to get approved and have strict HOA's regulations. But this is all new construction. I don't think there is a zoning regulation that would allow this like there is for 55+ type communities.

GoG8tors,

WOW! Great idea. Would it be legal to only allow one group (veterans) to buy into a community? I am guessing yes due to the 55+ communities. The VFW allows membership based on bringing proof of overseas duty.

Sincerely,

jk rogers

I know there aren't any veteran's communities. I was thinking if we start from scratch with ideas, we can go from there. There is "The Eagles Nest" at the VA, but what if we had something closer? There is a great need for veteran services closer then Decatur. We just have to figure out how to make it happen.

There would need to be legislative action to get this started. Currently there is not a statue that would allow this type of zoning. But it's possible, just like the 55+ communities were created.

 

[Winchester]

Quite frankly, all of these "investors" make me nervous.

A high concentration of small rental properties in one area can sometimes become a problem. Smyrna, Lithia Springs, and Powder Springs have had tremendous problems with this. The way Code Enforcement laws are written, it is extremely difficult to bring a subdivision back up once it starts to accumulate empty rental properties. Generally this problem is most prominent when an absentee corporation is the owner and manager.

Winchester, I wish you luck finding an investor, and I do agree that rental is probably the best way to sell it. There are companies that specialize in these sorts of projects, but they usually like to turn the properties within a year or so. Selling an investment property with a paying tenant is always a plus. You might look at that aspect of it.

Also, there are so many Federal agencies running around trying to shove money in peoples pockets to "fix" the housing problem, you may want to research what financing might be available for neighborhood redevelopment. I'd start with HUD. There will be a ton of hoops to jump through, but it might be something to look into.

If there is enough people interested, I'll do some research it out. But everything I have seen so far has been targeted at the inner city of Atlanta and select parts of Dekalb and Fulton Co. But my goal was to avoid any govt funding for many reasons.

 

[Winchester]

http://www.foxnews.com/us/2012/08/06/millionaire-buys-every-foreclosed-home-in-michigan-county-for-48-million/#ixzz22kxFtVWD



"Millionaire buys every foreclosed home in Michigan county for $4.8 million

MACOMB COUNTY, Mich. – A Michigan millionaire decided to go into the real estate business with a bang last week by buying every tax foreclosed property offered at a recent county auction.

MyFoxDetroit.com reports Bill McMachen, a businessman and former yacht dealer, paid about $4.8 billion for all 650 tax foreclosed properties at Macomb County's July 31 sale."...


I wanna win the the Lottery!

 

[LisaC]

What is the rental market in Paulding like? Are rental houses sitting empty because the market is flooded? Are the houses getting turned over quickly because people can't really to afford them? I honestly haven't noticed. :dunno

 

[Madea]

I've heard it is actually more expensive to rent right now than to own. Not sure how accurate that is.

 

[LisaC]

I've heard it is actually more expensive to rent right now than to own. Not sure how accurate that is.

From what Winchester is describing, that you may be right. If I can buy a house and have payments of $500 and rent it for $800, then ... :dunno

 

[Winchester]

What is the rental market in Paulding like? Are rental houses sitting empty because the market is flooded? Are the houses getting turned over quickly because people can't really to afford them? I honestly haven't noticed. :dunno

I don't know Lisa, Most rentals in this area do not use agents to list their properties and the ones that do pay so poorly I no longer work with rentals. Since they are not listed, there is no place to pull stats from.

 

[Winchester]

I've heard it is actually more expensive to rent right now than to own. Not sure how accurate that is.

From what Winchester is describing, that you may be right. If I can buy a house and have payments of $500 and rent it for $800, then ... :dunno

Yes, you can buy much cheaper then rent. Just closed on a "move-in ready" house on the south side of Paulding for $59,900 and a monthly payment of $450 I think. And only 3.5 % down with an FHA loan. There still are some 100% loans available for the West side of the County.