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Well, I bought another house today!  I wanted to be done buying houses so I could get back to focusing on multi-units again, but there are just so many deals to be had right now!  Yesterday we found out about a few homes that had come back to a builder. This builder was offering a great incentive to get them resold as soon as possible.  They’re taking $75k off and paying $6,500 toward closing costs.  After looking at comps, there appears to be about $50k to $65k in equity comfortably, with possibly more due to the great location of the lot.  It backs up to a huge grassy park with mature trees.  These are the very last of 600 homes that have gone in over the last two years.  The builder is also paying 10% commission to the Realtor, which is great for us because my husband has his license. 

The house is in Goodyear, AZ which is about 10 minutes west of the new Cardinals stadium and the highest dollar development project ever undertaken in Arizona and about 10 minutes east of Buckeye, which is projected to grow to two million people over the next fifteen years or so.  There’s also a big Westcor mall going in about three miles away from the house, with Harkins theatres and Dillards already on board as anchors.  And, there is a proposed spring training baseball facility possibly going in nearby as well.  There’s a lot positive going on, not the least of which is the widening of the freeway to four lanes + carpool lane each way.  After stop and go traffic today at 2:00 pm, I quickly realized I’ll be using side streets until that project is done.  We have mountain views from the back of the house.  These mountains are three miles away and its my favorite hiking spot that I have to drive much further to get to now.

We’ve decided we’ll move into the house.  That way we can get in with zero down and the commission we get back from the purchase will be enough to cover backyard landscaping, window treatments, paint, and mortgage payments for a year.  Since we have enough equity right away, we’ll re-fi into a better loan shortly after closing.

We’re just coming up on two years in our current house, and we were just getting comfortable.  But the plan is to move every two years for a while so intellectually we always knew this was the plan.  For each of our primary residences, we’re planning to live in them for two years then rent them out for three, then sell.  We’ll take the capital gains tax free since we lived there two out of the last five years each time.  Now I just need to psyche myself up to pack everything up and settle in once again!

Welcome to the August 28, 2006 edition of Carnival of Real Estate.  What a great bunch of bloggers we have in participation!  Here are the submissions this week, in no particular order, except for my #1 pick being listed first:  

Kevin Kneupper presents How to Buy Real Estate in Costa Rica posted at Free the Drones Personal Finance Blog.  His information and links to other sources are so complete, this is why I’m voting this post my #1 pick for this week’s carnival!  This is the kind of information people pay money for, and it’s all neatly laid out for us here in the blogosphere.  Thanks Kevin! (more…)

Natalie has been busy looking for her next deal.  Let’s see what we can help with today… (more…)

At Lording the Land, there is an excellent post that breaks down a lease.  I still know some landlords that are operating with verbal leases.  Can you believe it? 

Just as important as the lease itself is making sure that your tenants understand it.  The landlord system that I’ve implemented with my property managers says that they must read the pertinent points of the lease out loud to the tenant at lease signing.  This is so powerful because you give your tenant double exposure and double retention regarding their agreement - through sight AND sound.  Most tenants don’t read the lease word for word when they sign it.  They just skim it over, which means they go into their residency unaware of some of what is expected of them.  Future problems should be expected in this case.

I’m also an advocate of amending your lease with a set of house rules.  This keeps the legal terms and conditions separate from the behavioral expectations.  You may spend some bucks and have an attorney draft or review a great lease, and once you do that you’re not likely to want to tinker with it much.  But if you keep your house rules off onto an addendum, you can add to and change these as situations arise and as you learn more about your market, building, and expenses. 

You can download a sample lease that you can use or pull ideas from HERE.

Biggerpockets makes a really good point about entrepreneurs benefitting from building routine into their day.  I have to agree!  I’ve worked at home most of my adult life and if you don’t build in structure, it’s just too easy to digress off into tangents and suddenly the day is over.  The freedom to do whatever, whenever is awesome, but the rewards of accomplishment are even greater!

On a related note, I’ve heard two schools of thought about getting things done:

• Make a list and do all the little/easy things first so you can feel a sense of accomplishment about checking items off the list.  This fuels your energy to keep going when you get to the hard tasks.
• Make a list and do the hard/long things first.  If you don’t you’ll spend all your time on relatively insignificant tasks and you’ll procrastinate the important things, pushing them further and further into the future.

I can go both ways with it.  I like to size up my complete list and then build in a block of time to get it all done.  Then maybe I’ll start with the quick and easy ones first just to get them out of the way.  They can be a distraction in and of themselves.  Then I can 100% focus on the hard things that need my full attention.

My friend Rick over at Landlord Shmandlord made a great point the other day about doing due diligence on properties in other cities.  You need to figure out where the bulk of landlords advertise and where the tenants are looking.

It’s really important to size up your prospect pool, know what the locals use to find places to live, and use these publications to comp rental rates for units like yours.  This will help you use more accurate numbers when evaluating the property, and will help you reduce vacancy loss after you own it.  Check it out.

It’s the classic debate among real estate investors and I hear it being discussed at almost every seminar I attend: is a license necessary? helpful? a waste of time? 

As investors, sometimes we like to use agents, sometimes we won’t use them, sometimes we like paying them, and sometimes we try to get creative with their commissions.  Couldn’t we sidetrack a lot of the busy-ness we get ourselves into if we just had our own license?  Wouldn’t it be great to have full access to the MLS and to score some commissions here and there?

In the past I never saw much use for having a license.  I had access to certain Realtors and I could get the information I needed any time.  After all, I didn’t like the idea of going to school, taking a test, and worrying about all the regulatory stuff and continuing education credits.  That was then, this is now. (more…)

The results of this week’s Carnival of Real Estate are in!

Thanks to Brownstoner for hosting this week, and for featuring one of my posts

If you have yet to check out the carnival, you must!  It’s a great collection of real estate thoughts from bloggers all over the country - each with his/her own view of the market, investing techniques, the industry, etc.  There is something at the carnival for everyone!

Looks like Natalie has a question today about renting to college students.  Let’s find out what she needs help with… (more…)

Last night I hosted a teleseminar with guest Teresa Luquette.  Teresa taught us many strategies that can help you grow your business to a 7 figure business - that is, one that earns over $1 mil per year.

One of the key strategies was to optimize the highest and best use of your time.  This is so true in real estate investing, and especially true in owning rental properties.  You can so easily get sucked into the world of busy-ness and one day you realize you’re not making a profit because you haven’t been minding your business.

Teresa went on to say that business owners should focus on, and frankly, ONLY spend their time on the 3 Ms:

• Marketing
• Management
• Money

As I apply this to my rental business, I’m doing ok.  My internet business… another story.  But in the rentals at least I can easily say I don’t do anything except the 3 Ms. (more…)