When is it a Good Time to Buy?

by Lance Kettler

In the real estate market there are a few rules of thumb to determine if it is a good time to buy.  One factor is the current interest rate.  At this moment in time the interest rate is at a near historic low. 

Another factor is supply and demand.  It’s widely acknowledged that if there is more supply than demand that prices will go down or can be negotiated down.  Right now we have a buyer’s market, there are significantly more homes available than there are buyers.  As a consequence, sellers have to work harder and concede more in order to win a buyer’s bid. 

One important factor to potential real estate investors is the rent to own ratio.  If the cost of renting is the same price to purchase or even higher investors usually consider it time to buy. 

In our local market we are seeing the cost of renting quickly approaching the cost to purchase.  And in the REO market the cost to purchase in many cases is already significantly lower than the cost to rent. 

Why is this so important?  If you are renting right now and could be spending the same or less to be building equity then you would be smart to purchase.  If you already own a home and are considering purchasing investment property you want to make sure that you can occupy your rental property.  By owning a mortgage that makes the monthly payment less than the market rental value you are ensuring that you will rent your property and that you will make a profit.

By all criteria now appears to be a good time to buy real estate, while it is an excellent time to purchase REO.

Rescuing Value

Rescuing Value

by Lance Kettler

One of the things that I am most passionate about in my life is animal rescue.  I have a great fondness for all animals and I am without any doubt that dogs truly are man’s best friend.  If you’ve taken the time to look at the Kettler Kares section of my website you know that helping our furry friends is one of my life’s missions.  Whenever I am at a rescue center or adoption event I am overwhelmed with joy when I see a canine friend adopted by a loving and caring owner.  Sometimes the animals have seen some rough times.  They aren’t quite themselves, they’re unkempt at best, injured at worst.  But it is always amazing to me how different they look after a bath and a little TLC.  The transformations are amazing.

A dear friend recently pointed out that my love of REO property is similar to my love of dog rescue.  I hadn’t ever thought of it quite in that way before.  But upon closer examination I definitely see what she means.  I love looking at an empty house and looking beyond the neglect to see all of the possibilities.  I love matching a home to a prospective buyer and knowing that there is a mutually beneficial relationship about to bloom.  I love driving by months later and seeing the home happily occupied, the lawn trimmed and flowers in the flower box. I derive great satisfaction out of seeing things of great value that have been overlooked restored to their rightful place of happiness and respect.

If you have a loving home and would be happy to welcome a furry friend into your life, make sure that you check out Kettler Kares for suggestions as to where you can adopt a pet in need of a home.  If you are interested in purchasing an REO property, savings tens if not hundreds of thousands of dollars while at the same time building equity please contact my office so I can show you the homes available for adoption.

 

Could’ve, Would’ve, Should’ve

By Lance Kettler

Is there anything you wish you’d done, but didn’t?  What about right now?  Is there anything that you are doing that you think you might beat yourself up about in 20 years time?  I’m more interested in what you aren’t doing.  What aren’t you doing right now that is going to lead to a Could’ve, Would’ve, Should’ve moment in your future? 

Nobody can look into a crystal ball and tell the future, so I don’t even try. But what about looking back?  There are lots of lessons to be learned from the past.  Everyone seems to be talking about the recession these days, are we in a recession, are we not in a recession?  The funny thing about a recession is that by definition in can only be called a recession after the fact.  We can only see true recessions in the past never in the present.

What can we gain by looking at recessions in the past?  First the reassurance that recessions happen, they are survivable and they pass.  We can also see that recessions are the period of time before a period of growth.  It isn’t a coincidence that millionaires are made in recessions.  A smart investor who is willing to shop for bargains can certainly find them in times of economic strife.  Then when times improve the investor finds themselves holding property that is valued at significantly more than they paid for it.  This is how millionaires are made, its called buy low, sell high. 

As you’ve probably heard, prices are low now.  In the REO market they are even lower.  I have clients who are purchasing property for 20-30% below market value.  Even by today’s standards they have a valuable property and as the market rebounds their investment is going to grow.  You can make the same choice or sometime in the future you could be saying I Could’ve, Would’ve, Should’ve.  The choice is yours.

 

Reo Treasure

By Lance Kettler

Do you like to hunt for treasure?  Some people like to hunt for antiques.  Some people like to find bargains on EBay. Others like to hunt for real estate bargains and treasures.  I have to admit I love to hunt for treasure. 

REO treasure comes in all different sizes and neighborhoods.  Not everyone is interested in looking for treasure and sometimes the treasure is somewhat hidden.  Some people walk into a home and are unhappy if they see flaws.

For me it depends on the flaw.  For instance if I view a home that has multiple repair issues, a hole in the wall, a missing lighting fixture, a damaged counter top, I don’t think, “What a shame.” I literally hear a cash register singing “Chu-Ching” because I know that although these are minor repairs and easily fixable they are going to force the seller to lower the price significantly.

Of course there are some flaws that I do say “What a shame.” If a repair is so extensive that it means that a home will not be able to be lived in for a significant amount of time, or if the repair is so expensive in nature that not even a concession on the seller’s part makes the sale worthwhile, then the home cannot be viewed as treasure.  Treasure is only treasure when the value can be seen with only a minimal amount of polishing.

The good news is that there is more treasure available right now that at any other time in our lifetimes.  If you are a serious treasure hunter, you don’t want to miss this opportunity.  Give me a call and let me welcome you to the hunt!

 

Buying In your own Backyard” Part 1

When you become interested in buying real estate beyond that of a primary residence, you might be lured into investing into an out state rental property or a second home.

DON’T DO IT!!!

I had breakfast recently with a friend who told me he had invested in four houses/condos, all out of state within the past two months.   He had attended a seminar of a self proclaimed guru who prescribed some formula that was going to make him and his wife rich in real estate.

To make a long story short, One of the properties my friend bought was a townhouse in Florida.  So far so good, except as they tried to rent out the unit, the market tanked and the builder could not unload his inventory.  The builder today still owns over 50% of the 300 homes that were built and they are all vacant.

Imaging having 150 homes in your real estate portfolio and that they are all vacant, burning the biggest hole in your  line profit game.  My friend has a property manager who for the past five months cannot rent out his unit. Now he will have the competition of the builder, who is a desperate move will hold on to the units and rent them until the market regains strenth.  Sounds like a huge REO debacle in the making. I know I should have been a psychic.