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Real Estate Brokerage & Property Management Blog

Here you will find the latest real estate endeavor stuff I engage in on a daily basis.

Thursday, July 30, 2009

Investment Analysis- Duplex


Hi Prospects & Friends,

I wanted to share with you all this duplex I drove by to see a couple of days ago. I'm waiting for the #'s to come down & will try to make an offer. If seller doesn't want to reduce listing price, then I will move on to the next property for my investment portfolio. I currently manage & own 7 investment properties & looking for 5 more to make a total of 12 to complete my investment portfolio, my deadline goal is to have the other 5 investment properties by 2014. I will starting explaining why I want this duplex to come down in price. First here are the #'s & details of the duplex:

Listing Price- $164,500
Contract Rent- $1,590/mth
Taxes- $230/mth
Maint Fee- $85/mth
Proposed Ins- $150/mth
Total Sq.ft. 2,770- Side 1 $795/mth, Side 2- $795/mth
Side 1- 3Br/2Ba- 1,385 sq.ft.
Side 2- 3Br/2Ba- 1,385 sq.ft.

After carefully applying my investment analysis I've come to the conclusion this property can still come down some more in list price to even give me a better opportunity. I will explain see below:

Rents are currently renting for $735/mth not $795 even though the current owner has signed lease contracts stating so. To apply my investment analysis rule to this property see analysis below:

Rents from owners current tenants are paying $795x2=$1,590-$465 (expenses)=$1,125
So $1,125x6.00/1000=$187,500 (6% interest rate)
$1,125x7.34/1000=$153,300 (8% interest rate).

So based on $1,590 rent ($795x2) range is $153,300-$187,500 this range is off because rents are not consumerate with the list price. This is where many people mess up I take it a step further see below:

Contract rents say $1,590, but current market rents say $1,470 ($735x2) so I will re-apply but work with my #'s see below:

Market rent is $1,470-$465=$1,005
So $1,005x6.00/1000=$167,500 (6% interest)
$1,005x7.34/1000=$$=136,900 (8% interest)

See how my range looks $136,900-$167,500? My range is saying I can offer as low as $136,500 or offer no more than $167,500. The current list price is $164,500, so it's falling in my range of $136,500-$167,500, but I like to keep watching people reduce the list price on a property that has great investment #'s like this one, because you can't loose! So fact is I based my range of $136,500-$167,500 on the market rent & not the contract rent to negotiate so I don't over pay, once property is bought it doesn't matter if rent is $1,590, why complain about someone paying you more in rent than market says? My investment analysis range of $136,500-$167,500 says two things:

1. I wont over pay for property currently listed @ $164,500
2. I based range on market rent which is $1,470/2 or $735/unit. So if tenants don't renew I know market rent is $735/unit & not $795/unit & when I list to lease I will always have enough rent to service the expenses @ the $735/unit because I made sure I didn't over pay from beginning to cause the mortgage to be over $1,005/mth.

I use my investment analysis equations on all my investment properties I analyze & if the #'s don't work I walk away & move to the next. Soon I will offer another helpful article about investment properties.

P.S. If decide to take notes on me navigate my ACHP on-line store to the right. The journals I have listed for sale are great for this, there only $12.99 & come with great colors. I've included a picture in this article of the journal also.

Wednesday, July 29, 2009

Get Rich Quick- Part 2



Hi Prospects & Friends,

I wrote an article prior to this one about no such thing as getting rich quick fast in real estate. Well let me re-inform you, you can earn wealth very quickly by having your investment analysis mastered along with the know where about tactics for when, where & how you want to earn your money. In this article I will give a story that is real & explain how wealth can be gained in this business. This is just one of the many stories I have, so take note on my articles because I sporadically post one. I mentioned awhile back in my "Foreclosure Trip" article I'm looking for a foreclosure in a nice subdivision that's gated. My job is to fix up the home & hold onto it for 2+ years then roll over into a bigger foreclosure until I reach my $1,000,000 house without paying $1,000,000. Please take note when I mentioned in the other "Get Rich Quick" article to hold your real estate for 8+ years, I was speaking only for investment properties. With a homestead if you live in your home for 2+ years you don't have to pay any capital gains taxes. Meaning here in Texas if your single you can keep up to $250,000 in gains & if married you can keep up to $500,000 in gains (so learn your limits for your state). This story will land anyone a real "Get Rich Quick" theory. I'm a living witness of House 1, because I went into the home to look at it to advance my investment thinking abilities. House 1 was listed as a foreclosure for $309,900 & sold for $305,000 March 2007 with only being 5 days on the market. The new owners for House 1 financed $274,500 for 30 years. House 2 was listed as a regular house on the market & sold for $380,000 May 2009 & they financed $304,000. Analyzing this situation yes "Getting Rich Quick" will happen with the abilities of mastering your niche. I'm still mastering my niche, but if it wasn't for me knowing (having my current skills) how to analyze subdivisions I wouldn't know how to pick up on these foreclosures doing this trend in certain exquisite subdivisions. There's only 70 homes in this gated subdivision & only 2 homes have sold as foreclosures in last 10 years. So this means not many foreclosures occur, & if they do you've got to act fast to be able to buy it. So what I've done is made a list of other subdivisions similar & are watching them like I've done this one, & when the time is right I will land my first exquisite foreclosure home which will build me wealthier to that $1,000,000 mansion without paying $1,000,000. If you've ever read "Millionaire Next Door" or haven't

buy it here http://astore.amazon.com/acohaprll-20 my post is actually a good example of this book. Back to post see below:

House 1- Sold as a foreclosure for $305,000 3/2007 & they financed $274,500 for 30 years.
sq.ft is 4,873

House 2- Sold as a regular home for $380,000 5/2009 & they financed $304,000 for 30 years.
sq.ft is 4,580

Price/sq.ft as of 5/2009 is $82.97 in this subdivision

House 1 explains how you can "Get Rich Quick" in real estate the real way. House 1 the owners only put down $30,500 but since 3/2007 they've earned $99,312 in equity & got back their down payment of $30,500 so their total equity is $129,812. House 2 the owners only put down $76,000 & have earned nothing since they put down $76,000 5/2009, what is wrong with this picture? House 2 will take longer to recoup their $76,000 down payment back, because the peak in the last decade for this subdivision is $425,000. The most House 2 will ever earn on their investment for profit is $45,000 ($425,000-$304,000=$121,000, but remember they put down $76,000 so they will only earn a max of $45,000 in profit for the trend in this subdivision)


House 1 is the "Get Rich Quick" winner!- Learn & educate yourself about money/assets. If House 2 people were asset smart they would not of put down $76,000 for their house. So even people with money aren't educated correctly on building wealth quick & preserving their liquid (cash). Stay tuned I will right a pamphlet about this & offer it for sale at my ACHP on-line store soon.

I write down my strategies in my task journals I'm selling over at ACHP on-line store. Click on link to right to see them. Enter the contest to win 1 for free for post below this one also.
HOUSE 1 IS THE RED HOUSE IN POST "THE FORECLOSURE"
HOUSE 2 IS THE HOUSE WITH TREES COVERING IT

Tuesday, July 28, 2009

~Free Journal Contest~


Hi Prospects & Friends,

This post is only for the ~Free Journal Contest~. Leave a comment below explaining what you will do with the journal & the winner will be the commenter who comments first with all the F, J and C letters somewhere in their comment name or with all the A, C and H letters somewhere in their comment name. Either group of letters can be anywhere in your comment name, but you have to be the first commenter above others who may have same group of letters to win! So if 10 people leave a comment & they all satisfy either the F, J & C or the A, C & H letters somewhere in their comment name, then the first person who commented first in the 10 qualifying group would win. The journal will be delivered as a gift to place where winner wants to receive it, & the winner will also have the opportunity to choose their color & journal style. Click on ~Free Journal Contest~ title above journal picture to be re-directed to journal styles of choice. I will tweet the winner on Twitter & remember if you don't win, continue to follow me on Twitter because I will sporadically continue to give a contest offering a free random product from my on-line store. Good Luck!


Thanks Much,


April

A.C.H.P., LLC New Products


Hi Prospects & Friends,

I wanted to inform you all I have launched some more products at my on-line store. The Travel Mug, Flip Mino & Flip MinoHD. Here is a glance of what the products look like. Click A. Colette Harris Properties, LLC On-line Store on right of my blog to see different designs/colors & to order. I look forward to continuing to endorse my products within my business empires globally.



Thanks,


April

Get Rich Quick

Hi Prospects & Friends,

I wanted to say something about this "Get Rich Quick" scenario with real estate. There is no such thing as getting rich quick in real estate. People who are selling you their books & cd's about getting rich quick are just fooling you into the metaphor ~Rich Quick~ phrase & hoping you buy into it, which many people are. I've been doing real estate since 1997 & know you need more than basic knowledge to earn any money with the real estate business. My philosophy is get your education, continue to advance your education & develop a niche mastered surrounding your education. Nothing in life is ~Quick~ you have to earn the results, if anything remember this:


~A true successful business entrepreneur isn't in business just to make money & get rich, that is actually the by-product from ones learning & experience. It is the mastering of ones skills & staying ahead of your competition that make you a true successful business entrepreneur~


Also if you can't analyze investment equations, advance your skills, know the tax laws or hold onto your real estate at least 8+ years, then choose another career. Leveraging your skills & continuing to advance them will get you wealthier with real estate & any other business you pursue.

Sunday, July 26, 2009

Business Text Messaging


Hi Prospects & Friends,


I wanted to share with you all how business texting has found it's way into my company A. Colette Harris Properties, LLC. permanently, & how valuable of a row it is to allow it. I manage tenants & with everyday company duties I handle, one would think a simple phone call would work. Well my conversing with my tenants has shifted from phone calls/emails to texting for repairs, to when was rent received & general questions about the rental property. I have adopted the texting, because many of the tenants work at companies where they can't use company email for personal use or restricted to making personal phone calls while at work. I get text messages throughout the day/night concerning questions the tenants may have or want to ask me. I reply quickly & get the needs of the tenant accomplished while their at work. For example I had a tenant text me last Friday, saying the bathroom sink has a leak & could a plumber come out to fix it? I texted tenant back asking what is causing the sink to leak, & tenant explained. I said I would have a plumber out Monday, & tenant texted back , "OK thanks". I would say about 5-8 texts were sent back & fourth with I & tenant to converse the repair problem. Another example is most of my tenants want texts with me saying "Received Rent" with the date included in text message. I get texts now from many of my tenants & have accepted it as part of my business & think it's a great business strategy to keep everyone happy I manage. This may not work for many of you who run businesses, & many of you may think I have adopted a un-professional communicating strategy. Well at first I thought I did, and wanted just the email/phone calls during normal business hours, but as I continue to grow the communicating continues to change with technology & people, & in my case I'm accepting the best strategy that works for my tenants. I always thought I would only received texts from family & friends, but now when my phone goes off, it will be a tenant texting me too. My rule for tenants is I will take texts until 10:00 p.m. Monday-Sunday after that the phone gets turned off.


P.S. Picture is 1 of my mouse pad designs offered for sale at ACHP online store. Check it out on right of my blog, along with the other stuff I have listed for sale within the ACHP online store site.

Saturday, July 25, 2009

"Cutting Out Middlemen"


Hi Prospects & Friends,


I wanted to quickly share with you all why it's important to cut out unnecessary middlemen in your business. Foremost it saves you money with your business & advances your brain by understanding the many complications why many businesses get cheated with not knowing how to research basic principles of the purpose of using middlemen. Many of you are wondering if you don't already know, "What is a Middleman"? My definition of a middleman is anyone who is costing you unnecessary money with your business (you can do yourself by using your brain & Internet). Anyone who runs a business even me, know you want to minimize your costs by most definitely choosing the best efficient way to go about saving money for your business situation. To reason this further, I wrote how I cut out my Accountant friend for the quarterly consulting I was doing by email, & how I didn't hire a stock broker by handling my own brokerage accounts in my blog. Read those articles they will explain the middlemen scenario I've approached today. If anything many of you are thinking many of the middlemen you use (banks, insurance agents, stock brokers, lawyers, etc.) you can't cut out & do yourself. In any case when you run across a business situation ask your self "Can I cut some of the duties this middleman is doing by doing myself to save money"? In any case you can for me see below:

1. I cut out the unnecessary consulting my accountant friend was going to charge me $80/quarter, by using the irs.gov for free.
2. I cut out hiring a individual stock broker by researching various stock stuff to manage my own brokerage accounts as I please I opened online by using Fidelity & leveraging their free service.
3. I cut out the company that was charging me a $35 fee to receive credit reports each time I got a prospect/tenant by getting myself setup through this same company to run my own credit reports when I approve tenants. I saved myself paying the $35 & at same time receive the $35 as income for my business since I'm the one running the credit now


I could go on and on about cutting out middlemen to save money, & what I've done to accomplish such, but it only works if your a serious business entrepreneur who is trying to save your business money. I speak the truth through my articles only because I experience this stuff in real business life. I've learned as I continue to grow, no one teaches you much about anything unless their benefiting first. Learn to benefit yourself first when it comes to saving business money with middlemen, & learn to also apply my rule you only benefit yourself second when it comes to your customers, they come first. Check with my online store on right side of my blog to see when I will offer a pamphlet about "Cutting out Middlemen Techniques"

P.S. Check out my journals in my ACHP online store. There great for writing down great stuff you learn throughout your journey. (They can be used for anything, I use them to log in my tasks I do daily with my business/personal life).