Monthly Archives: September 2008

September 15, 2008 · 5:10 am

Real Estate Investing For Retirement

 

 

 

 

 

 

 

 

For me and my situation, real estate investing has always been for retirement.  I never bought a piece of real estate thinking I’d be able to turn it over in a few short months or years and make a killing.  And maybe because I’m a REALTOR I never really thought about real estate investing as a profession.

No, for me and most of my clients real estate investing is for the long term.  It’s a place to invest some capital and then let the beauty of time take over.  With each passing day our lives get shorter.  Aging is part of the natural process.  Just as surely is the possibility of running out of money in retirement if you did no planning at all.

What will your retirement look like?  Social Security is a big part of the equation for most people.  Will it still be funded for us 43 year olds?  Then there are the 401k’s, IRA’s and if you are really, really lucky a pension.  Equity in your primary residence can be a huge benefit as well.

Real estate investing doesn’t have to be flipping or owning 27 rental properties.  Sit down.  Do some math.  Look at what owning two, four or maybe even five properties can do for your economic situation down the road. 

I think you will find that even in these “troubled times” real estate investing done passively will long term still crush other investment vehicles.  And still allow you to do what you do and to spend the rest of the time with your family.  Real estate investments don’t have to be your life.  But they can help you supplement it. 

Go ahead.  Create a Retirement Worth Having.

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Filed under Real Estate Investing, Retirement Worth Having

September 11, 2008 · 8:04 am

I Remember

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Filed under Uncategorized

September 10, 2008 · 7:23 am

Tenants and Teenagers

I’m currently raising two teenagers.  And I’m currently managing six tenants.  The behavior patterns, by in large, are very similar.  I’m constantly tested.  I constantly have to examine the underlying motivations to the current actions.  I have to have set rules and then enforce them.

Are you worried about whether you could own and manage real estate investment property?  Well, if you have raised, or are raising, teenagers then you can manage rental property.  Trust me.

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Filed under Property Management

September 9, 2008 · 9:27 am

This Much I Know

There is a lot I do not know.  Physics, for one.  Macro-economics is another.  (I am one of the few real estate bloggers that will tell you that, I’ll bet.)  But I do know my checkbook.  I know the hurt I see families going through with their struggling in this economy.  I know real estate agents and mortgage officers around the country that have disappeared and I have no idea where they are or how they are doing.

I know Kansas City is suffering but not nearly to the extent of so many other cities and their economies.  And I know that the whole Freddie/Fannie thing is causing indecision with people that really should not be indecisive at this moment.

I know, and I truly believe this, that fortunes in the next real estate market are being made now. 

This post is not put out for the marginal buyers of real estate investment property.  In this economy if you do not have proper reserves and a proper down payment you need to conserve liquid assets until you do.  Do not gamble on appreciation or quick re-sales.

This post is addressed to those of you I’ve spoken with in the last 30-60 days sitting on the sidelines with heavy assets.  You know who you are.  $80,000 to invest.  $100,000 to invest.  $120,000 to invest.  Plus reserves in retirement accounts and great equity in your primary homes.  You should be in this real estate market. 

To some of you I’ve mathematically shown you how you will benefit.  Even IF Kansas City suffered a 10% down fall over the next year or two you would still come out ahead, way ahead, in any 8-10 year scenario.  And I cannot think of a time ever that Kansas City has suffered that kind of decline.  And I really don’t imagine it happening now in the areas I would invest in real estate in Kansas City.  Market fundamentals should tell you the same thing.

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Filed under Personal Real Estate Opinions

September 7, 2008 · 2:56 pm

Well, So Much For The Soft Landing

US Government takes over mortgage giants

Fannie, Freddie: The biggest losers

What rescue means for mortgage rates

Let me just say that tomorrows riches are being made today.  No.  I’m not kidding.  If you have cash, healthy credit and the smarts to buy on proper fundamentals now is the time to move. 

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Filed under Worth Reading

September 5, 2008 · 1:05 pm

Good News & Not So Good News

“Residential real estate conditions weakened or remained soft in all Districts, except Kansas City, which reported a modest increase in sales since the last report.”

The quote from above comes from Money & Markets.  It’s worth the read. 

The positive is KC gets an “atta boy.”  The bad news is the rest of the author’s opinion.  As always, I believe a glass half full can also be viewd as half empty.  So you decide.

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Filed under Kansas City Real Estate, Worth Reading

September 3, 2008 · 7:14 am

Proper Fundamentals Trump Economy When Buying Your Rental Property

There has been quite a discussion over at BawldGuy as to the shape and direction of the economy.  Jeff maintains that the recovery is starting or at least poised to.  At least one experienced real estate investor and one investment banker disagree thinking we are at least one to two years away.  Both point to evidence supporting their suppositions.  Both sides making excellent points.  (Make sure to read the comments!)

I’m not here to sit in judgement.  But does it remind you a little of the upcoming elections?  So much of the way you behave has to do with the way you see the world. 

Getting back to the BawldGuy discussion the thing that seemed to be relatively ignored by the Bears of the argument (not saying they are Bears…merely that their arguments are Bearish) is that you can still buy real estate investment  property that makes sense with 10% down or 20% down.  But you absolutely have to work your numbers backwards.

“However, even at 50 percent off, he could not find anything that would pencil out when he worked backwards from what tenants could afford to pay.”

Obviously, if you work your numbers from either 10% or 20% down (heck, 50% down) and after your taxes, insurance, property management, reserves, repairs, etc. the numbers do not reflect what a tenant will be willing to pay for that rental property then you are not buying on proper fundamentals.

If you do buy on proper fundamentals then whether the economy has a short burst of appreciation, a long term stagnation or even a short term deflation you are going to be okay.  Because that property will pay for itself in good times and bad. 

This doesn’t have to be rocket science, people.  We all agree that over the long term real estate is a fantastic investment.  So why are we arguing over 6-24 months? 

The Answer:  Because from where I sit, in Kansas City, we’ve been relatively insulated.  Yes, we’ve experienced a slow down in all areas of real estate like everyone else.  But deflation in the neighborhood of 50%?  Thank God, no.  If we had, maybe I’d sound more Bearish.  🙂

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Filed under Misc. Real Estate, Personal Real Estate Opinions