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Warren Buffet Digs Real Estate

Warren BuffetOur favorite 82-year old mid-western billionaire is sweet on real estate.  Whodathunkit?

Warren Buffet just branded “Berkshire Hathaway HomeServices.”  This new real estate franchise will be operational in 2013.

It looks like he’s positioning his new company front and center of the real estate recovery.

Get ready for the rocket ride!

Read more about it at the KCM Blog and Bloomberg.

Video

15-Year-Old Landlord Buys Second Rental House

Do you know a teenager that can’t find a job?

Meet 15-year-old Willow Tufano who created her own “shovel-ready” job.  She’s a landlord who just bought her second rental house with her partner/mother.

Thanks to the KCM Blog for passing on this inspiration.

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More Evidence of the Housing Recovery

Sherwin Williams Co. stock chartHow do stock market pro’s know the housing market is recovering?  They look at stocks like Sherwin Williams (SHW) because share prices of companies that offer housing-related goods and services are “on a tear.”

According to Jeff Clark who writes the “Market Notes” for Dr. Steve Sjuggerud’s Daily Wealth blog:

“As today’s chart shows, there’s a safer way to bet on the housing boom… Sherwin Williams (SHW) is one of the world’s largest paint and coating producers. The stock is in a “slow and steady” uptrend. Its share price has more than doubled in the last 12 months. And it just reached a new all-time high.”

As the housing market is recovering, some investors are buying real property and some investors are buying housing-related stocks.  It’s all good.

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Professionalism

house keyI ran into an old friend a few nights ago. His name is David Read and he’s the real estate broker that sold my son, Josh his first home.  It was a view condo.  Josh was 20 years old and I was a single mom going to school.

Dave treated us like we were special.

Josh made a bundle of money off of that first home.  He lived in it for a couple of years, then he rented it out for a couple of years, then he renovated it and moved back in, then he sold it for a $65,000.00 profit.

It’s doubtful that Josh could have “saved” $65,000.00 in the same time period.  Plus when you factor in the tax benefits and the benefits of having his tenants pay his mortgage down, Josh figures that he pretty much lived in the condo for free for the years that he lived there.

The experience also made Josh a believer, so I was able to recruit him as my real estate investment partner and that has worked out pretty good too!

Dave got Josh off to a great start in life, by helping him buy that first home.  And it wasn’t easy, because Josh was a 20 year old punk kid :), he was a commissioned salesman at Lifestyles 2000 Fitness at the time, and Dave had to work hard to find Josh that first loan.

Here’s what I learned from Dave’s professionalism and kindness:

1.  Show up at the close (or go over the HUDs in detail beforehand so your clients know what to expect when they sit down to sign hundreds of pages).

2.  Make your clients feel special.

3.  Solve problems.

Not necessarily in that order.

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Why should Real Estate Investors buy now?

Home Cost Chart

Thanks to our friends at the KCM Blog for this enlightenment.

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Fannie Mae Expands Investor Financing Options

Uncle Sam offering bailout dollarsHey real estate investors…have you ever wondered when your bailout would come along?  Well this may help out:

“Fannie Mae recently announced expansion of it’s Homepath Mortgage product that provides home buyers and investors financing for the purchase of Fannie Mae-owned properties.

The new product will allow eligible individual and LLC borrowers to finance up to 20 properties using the Homepath Mortgage.  NAR has long called for expansion of financing opportunities for investors as a way to increase the absorbtion of REO properties.  Fannie Mae will offer flexible lending terms and will not require appraisals of the properties.

Visit Homepath.com for more information on the program and participating lenders.”

Thanks to the National Association of Realtors for this heads-up and for their smart advocacy.

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How to Add an Extra $1 Million to Your Retirement Plan

chart: building wealth

“Make $1 million with 3 properties. Assumes the following for each property: a purchase price of $182,600, annual rent of $26,400 and annual expenses of $17,780.”

If you would like to add an extra $1 Million to your retirement plan, start today.  Buy one investment property:  a house, a duplex, a 4-plex, etc.  Just start.  Start with one.  Next year add another one.  Add another one on year three.

If you’re crazy like me, keep adding.

(I acquired 92 units because I have the greatest ever handymen, and I didn’t want them to find a new client.  I wanted to keep them busy.  They just kept renovating themselves out of a job as we added each new property…until we had/have almost no service requests.  True story.  My Mom finally asked me, “How many units are enough?”  I told her I never thought of it like that, I was just trying to keep Allen and Andy busy!)

The more units you acquire, the easier it gets.  You develop an “economy of scale” and your great helpers (handymen, landscapers, janitorial crew, bookkeeper, etc.) start to run like a watch.  I know you don’t believe me about this, yet.  But eventually you will.  (You can always hire the management out if you don’t find the game as exciting as I do.)

Interest rates are at an all time low.  Get out there, take a risk and add just one unit to your assets this year.  Then rinse and repeat next year.

Read the full CNN Money article here.

Happy investing, and happy retirement!

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“U.S. Housing is the Next Gold”

Chart: Gold vs Real Estate

Dr. Steve Sjuggerud says that real assets are better than gold now.  As real estate investors, we already know that.  But now the cat is out of the bag!  Read his blog post to get the scoop.

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Are we at the bottom yet?

Buy-at-the-bottomRead this interesting Barrons article from a real estate investor’s point of view.  Investors want to buy at the bottom and hold for the rocket ride.  We all suffer from that delicious fantasy.  We all have sad stories of buying too late and selling too soon.  But fantasy is “imagination unrestricted by reality.”  So, rub your eyes and pay close attention to all the recovery indicators in the real estate market.

Quotes

The Donald Loves Real Estate

The bottom line is I love real estate. I like it because I think you are going to have massive inflation at some point, and to me real estate is a much better hedge against inflation than gold, which you can't touch.

Donald Trump