The Hogue Group

For more information contact your Eco-Broker below.

Rick Hogue REALTOR, CDPE, EcoBroker
The Hogue Group
A Place to Hang Your Hat and Call Home
502-554-9428

http://www.louisvillekyhomefinder.com

So you feel like you want to invest but you are not sure where to start. I work with quite a few investors and all of them are buying now. the market may not be at the bottom so having several methods of investing will serve you the best. For the most part purchasing higher cost properties for flips may be the type investment you may have to hold for a while (12- 18 months) in order to reap the highest return. Also any flip should be worked from middle of the road to upper end on finishes, when it comes to getting the most for your money in returns.

Some of the investment properties on the market now should be considered as hands off, especially if you check for liens on them from city and state. Coming into Spring the prices will fall fast on empty investments as the city will be more apt to put someone out to mow the grass or board up windows and then put a lien on the property,

I found that two of my properties that I had listed were on what is known as Administrative Demolition. This comes about after countless times of the city or county fining the owner and not having any contact with them. In that instance the government came approach a property and level it to the ground and you still owe the fines!! Those properties have been taken off the list, but if you are working with out of town owners you need to check to be sure there are no problems with the property they want to list.

From 2005 to 2008 the boom got quite a few people into the investment market most paying the highest prices for property ever, or buying a what was thought to be really great deal with much higher tax assessments. The problem with this theory is that the investors depended on the market continuing to increase and leveraged their purchase price by borrowing on the properties to the point that the lender would allow them to. Sometimes allowing the investor to purchase 1 property and leverage to buy 3 more. Some of these investors did this to the point that every time they bought one of these properties they leveraged it multiple times. Not only that but some of the investors who were renting as is were not investing any of this capital back into the properties to make them better places to live. So now in 2011 many of those properties have gone into deterioration and are at points of major refurbishing required. Imagine the 10′s of thousands of homes that this has happened to across the nation. Imagine those homes that were abandoned that were broken into for the copper to be stolen so someone could make a few dollars and the continued demise of the properties comes about due to water damage or fire from copper pipe fittings on gas etc. Tack on the fact that the government has put out new rules on handling lead based paint, Radon, disposal of asbestos materials and so on.

Now in comes the new investor of 2010 and 11, wanting to invest and make lots of money. I can honestly say to you, “Move slowly grasshopper, buy slowly and sell quickly.” Have multiple plans for moving your property. Rental, Rent to own, lease option, or flip. I have one client that is purchasing a very much less than perfect duplex for about 8500. His plan is to renovate with new roofs, central air, furnaces, hot water heaters, kitchens, bathrooms, paint, soffets, windows, about 20k in repairs. Seems like lots of money for a low end property, but think of it this way on cash flow, each unit is a 3 bedroom 1 or 2 bath unit. Each will rent for 700 per month. That is equal to 16800.00 per year and say that you put one fourth of that back each year for repairs. That would mean that within 27 months you have cash flowed the cost out of the unit. This makes this a wise decision and one you would definetly want to go ahead with. Where else can you have cashflow on that investment in less than that?

Be cautious on your investments, do not over-extend yourself, keep your investments to no more than you can afford to loose.

Next month I will talk about getting the best deals on contractors, appliances and much more.

For all of your needs whether investing, buying a new home, selling and moving up, The Hogue Group with Keller Williams Louisville East can aid you in your quest.

Rick Hogue REALTOR
The Hogue Group
A Place to Hang Your Hat and Call Home
http://www.louisvillekyhomefinder.com

What is in your home is very important to keep track of. Not only for insurance purposes but also for being able to keep track of what you put in each room and potentially who gave it to you.

New insurances require you to have an inventory of the items you have if you are carrying replacement cost insurance. By taking inventory of your home, you can maximize your insurance benefits, facility theft recovery, aid to moving and storage, enhance your estate planning, and create peace of mind.

There are different approaches to making your list. You can write everything down in a notebook, for example. Or you can take pictures, writing information on the back of the photos or putting information on your computer. If you have a video camera, you can walk through your house filming and describing the contents at the same time. If you have a a personal computer, you can download free software that makes creating and keeping a home inventory easy at www.KnowYourStuff.org.

Keep receipts when they are available and note the cost for the item, when you bought it and information about the make and model.

Expensive items like jewelry and art work may need to be insured separately. Ask your insurance agent whether you need a floater for your homeowners policy.

A notebook listing inventory by item, description, when/where bought, make/model numberStore a copy of your inventory in a safe place outside of your home—with a friend or in a safe deposit box. (If your inventory is electronic, store it on a disk.) That way you’ll be sure to have something to give your insurance representative if your home is damaged. Also, whenever you make a significant purchase, remember to add the information to your inventory while the details are fresh in your mind.

Don’t forget as you receive more in your home to update your inventory.

So the market on homes in your area is bad. Homes are selling for rates as far back as 2000. And you bought your home in 2003. This does not mean you are losing money if you sell it for less than what you originally bought it for.**

Currently a home bought in 2003 for 150,000 may have a value of 125,000. However when you look at the house that was a 250,000 home you can see a difference in price where it will sell for 212,500. Difference being 37,500. You as an upgrade buyer sold your home and bought a new home and saved an additional 12,500.00.

I welcome you to come to my site and do a free market analysis of your area to see how it is doing. It will give you an overview of properties and what they are selling for. Then do another for the area you want to move into. You will most probably be amazed that the houses you thought would cost much more are now more reasonably priced.

Look to trade up or even contact me to talk about becoming an investor. There are many resources out there and many of them cost but to talk to me only costs your time, and hopefully a listing on your home or a purchase contract on a new piece of property.

Well you know by now that the stimulus package has passed and unlike my last post  which was really upbeat about it was kind of a shortfall from what we hoped for. The tax credit ended up being $8000.00 for first time home buyers but that is someone who has not owned for 3 years. One of the other things to notice is that if the property is held 3 years, no repayment is required.

I think this will really effect those first time buyers who are looking in the 120 to 190K range but will still be a help for those in a higher purchase bracket.

My next post will be some time during the Keller Williams Family Reunion that I am currently attending in Orlando, Florida. I am looking forward to all of the courses and informaiton overload that will occur during this 5 days. Look for more notes after I digest some of the information and look for special tips and tricks on how to get your home in the best selling order without costing a fortune.

Buyers will be seeing some of my notes on how to generate your dream home by making some of my check off lists. More info is available by emailing me at info@propertybyrick.com.

Till next time.

So today the Senate voted to allow for the stimulus package to be put into operation and to boost the sagging credit market. Now onwards to the House and much debate and possible passage by the 16th of the month.

The way it is currently written is that if you purchase a home you will be given 10% of the purchase price up to a maximum of $15,000.00 on the next home purchase. In my humble opinion this will mostly effect those home buyers purchasing homes in the 300k and lower market. Think about it. at 300k 15,000 is 5%  ($1612.85 per month P&I at 5.47%) for a loan downpayment meaning someone who has a home that sells for 200k with 30% equity will have a 20% down on the 300k home, all expenses for closing, and some money left over to help with small changes such as paint and wallpaper on a new home. Not only that but they also would not have to pay mortgage insurance on the place thus keeping their monthly payments lower due to a smaller escrow payment each month. So now you have two houses that were in play that have now changed hands and the 200k house could use the 15,000 to put 10% down and still have enough to pay for closing and potential small changes in paint and landscaping.

So if the other portion goes through with a fixed rate of 4% mortgage refinances will be rampant. Look for much higher closing costs on these refinances but in the long run it could really save money to consumers. The same not from above now becomes $1360.63 per month P&I. A $252.22 per month savings or in a family of 4 approximately 1.5 weeks of groceries. Or the owner could take the cash and pay 2 extra payments per year which would reduce the time of the loan from 30 to approximately 17 years.

This could mean a surge of buying on the market of houses for primary residence for the next 6 to 12 months.

I have mixed feelings about the stimulus package as I am sure many of you do as well. One thing to take in to consideration on the unemployment skyrocket for January is that all of the extra Christmas help was also let go in January which is a normal thing. The numbers did go up substantially but we must consider the seasonal help lose in the mix too. The stimulus package is great for the real estate industry and for the banking industry but what is it doing for the manufacturing  and retail systems in place now without them jobs are mcuh shorter.

Enough for now, time to sleep.

Winter has definitely rolled in. 3 inches of snow on Monday night and Ice storm on Tuesday. Time to hit the phones and ring in the year with more listings and appointments to view homes for the weekend. According to the National Real Estate Association new home starts were down for another month during the month of December. What does that mean to you? Part of our inventory is from homes on spec and homes for inventory. As these numbers dimenish so do the inventory amounts. When the inventory lowers the prices of homes begin to stabilize and potentially go up. Call me today so we can look at the potential for your home in this market and what your next home will look like. To get a current market analysis for your home click here.