With all the news about the alleged fraud committed by Trump University, and how it ripped off unsuspecting victims, I wonder if any modern day journalists know that the Real Estate Investing Seminar industry was around long before Trump. And it remains alive and well today, doing exactly the same thing Trump is accused of. But if all you know is what you read and see on the news, you’d think he was the first and last.
If you listen to local radio while driving around Austin, or watch much TV, you’ve seen and heard the real estate investing seminar ads. At least 2 big Real Estate Investing seminars that I know of have come through Austin this year already, promising that you’ll learn how to become a real estate investor.
I think another one will be here next week. Do a Google search for “real estate investing seminar Austin”, then click on images in the results, and you’ll see something similar to the screen shown here. And you’ll see plenty of paid ads meant to capture your interest and take your money.
Should you attend a real estate investing seminar? Probably not.
I won’t claim that all real estate investment industry education is bogus. In fact, I purchased the Carlton Sheets video tape and workbook series for a few hundred dollars in the early 1990s. I was a sucker too (or was I?). More on that and how it actually helped me in a minute. Read more …
Sylvia and I started Crossland Real Estate in Jan 1993, and remained independent until we sold our property management portfolio in 2004 and “retired” for a year. We didn’t actually formally retire … more of a sabbatical … as we were still in our 40s with kids 9 and 12. But we did take a year off from active real estate “production”.
We weren’t sure whether we wanted to remain in real estate forever or not. I started a telecom services company and dabbled in Business Brokerage, both of which were interesting pursuits worthy of a full effort, and which I could have succeeded at doing, but after some time off from the daily real estate routine, something happened… The phone rang. It was Real Estate. It wanted us back.
Sometimes distance from something brings perspective and a renewed appreciation of it.
So, in 2005, we decided to return to real estate full time, but also to operate under the Keller Williams Realty brand. We’d operated as a “mom and pop” independent real estate Brokerage for over a decade, and wanted to see what it was like to be part a big office Brokerage.
Not just big, but the biggest single location real estate office in the world (currently 800+ agents operate out of our SW Austin location). The “KW Mother Ship”. Talk about going from one extreme to the other!
It went well. We consistently ranked in the “Top 5” Teams. We joined the leadership team, felt a “part of”, and our business thrived. We grew as professionals. We drank the “KW Kool-Aid” as some would say. And it tasted good.
But after 4 years, we left, to become independent again. Ostensibly, to slow down and work less, to focus more on Listings and to grow the Property Management side of the business, both of which we accomplished. But something was still missing.
It’s the start of 2016 and already I’ve received a few inquiries from my investor clients wondering whether they should hold on to their rental property, or sell this year. It’s a conversation I have multiple times with multiple clients each year, and it’s a question Sylvia and I sometimes ask ourselves about our own rental property. Especially given the appreciation gains of the past 5 years in Austin. So this article will walk through some of the questions you might ask yourself when contemplating whether to sell your real estate asset, based on how I look at the question with my own rental properties.
The first questions to ask yourself are:
1) Do you need the money? and
2) What will you do with the money?
I normally don’t make it past those two questions, because the answers for me are are “no” and “I don’t know”.
For most, the equity would simply go into almost zero-interest savings or CD accounts, or into the stock market. Having just watched The Big Short, watched my Mutual Fund IRAs tread water last year, and then take a dive the first week of 2016, I’m pretty OK with leaving my real estate alone.
But if you have a defined purpose for the money, such as purchasing your retirement home, or funding a child’s college costs, those reasons can make sense. Using it to fund lifestyle adventures, like buying a boat or an RV, would be a bad idea though, in my opinion. Unless it’s part of an overall “next chapter” of retirement, and it’s time to spend that money. Read more …
In an increasingly “unaffordable” Austin, it occurs to me that many of us could live way cheaper if we could just get along and live in extended family groups or roommate groups. I’ll use my own family as an example to explore this CRAZY idea for curing Austin’s affordability problem.
Sylvia and I live in a home in SW Austin with a $3,000/mo mortgage. Our utilities average $250/mo for everything, plus yard care of $80 per month, and of course repairs and maintenance as needed. We intentionally downsized to this home from Westlake, because we want to live more “affordably” and we no longer needed to live in Westlake Eanes ISD after our girls graduated high school.
My mom, in her 70’s, lives three blocks away in a home I purchased as investment (but for her to live in). I charge her $1,200/mo rent (market rent would be $2,000, my payment/cost is $1,800/mo), and her utility bills average about $180/mo, plus lawn care. I cover the repairs and maintenance.
Sylvia’s brother lives in an efficiency apartment in Hyde Park, which is $1,000/mo, plus about $100/mo utilities.
My oldest daughter graduated college this year, has a salary job, and is living at home still for now, but plans to get her own place after the new year (and after saving some money first – smart move). A modest place would cost her $1,000/mo to live alone, or $800 if she pairs up with a roommate or two. But let’s call it $1,000/mo for a 1/1 to keep the math simple, plus $100 utilities.
My youngest daughter is a freshman in college, and I’m paying for a dorm room, so she doesn’t necessarily count in the equation, except for the fact that I’m paying for two places for her currently – her college dorm and her room at home for visits and during summer. So I’ll ignore the dorm costs and count her as living at home still.
So, in summary, we have mine and Sylvia’s 3 bedroom house, my mom’s 3 bedroom house, my brother-in-law’s no-bedroom efficiency apartment, my older daughter’s future 1 bedroom apartment.
That’s a total of 8 sleeping spaces, 6 bathrooms, 4 kitchens, 4 utility bills for 6 people and 5 cars. Total monthly outlay for mortgages + rents is $6,800, utilities $630, yard care $150, plus repairs and maintenance for two separate houses. Grand total $7,580/mo for 6 people with 5 cars. More about vehicle expenses later.
What if I just bought a 5 bedroom 3 bath house and we all lived together?
I attended the Presentation in Austin this week announcing the Beta rollout of Realtor.com’s new Agent Profiles. Austin is the only city in the US with this live, though it will soon also be turned on in the state of Rhode Island.
Though not fully baked, I’ve set up my profile. The “Sold Listing are not yet populating, but should be on the map by mid October. There will also be a Team Profile. Here is what it will look like when viewing a map of Sold Listings in Austin.
Pretty cool, right? Are Realtors happy about this? Many are not. The Realtor online forums are ablaze with ignorant complainers, moaning and griping about this, and how it’s “unfair” to populate Realtor profiles or Sold Maps with actual closed sales because it makes the Newbies and part timers look bad.
Those of you agents complaining are missing some important data points. Namely, consumers want this. That is a settled question, supported by research and surveys of consumers. Realtor Reviews are here, whether we like it or not.
It was gross neglegence when the real estate industry fought online listings back in the late 1990s/early 2000s. It was the height of stupidity to do so. The void was instead filled by portals. Thus we have the useless but popular Zillow.
Zillow is not consumer-friendly. It exists for one purpose only, to sell advertising space to Realtors so they can appear next to listings they know nothing about. That does not create an informed consumer, nor connect a consumer to a “good” agent in their area, nor is it supposed to. Zillow is NOT consumer friendly. But consumers like the entertainment value Zillow. It’s fun to surf and look at houses.
Realtor.com can be way better for the serious consumer though, as its data comes directly from MLS feeds, and now instead of finding an “Advertiser” agent, you’ll be able to quickly rule in those agents who are actually active and relevant in the area in which you live or wish to live. Read more …
About a year ago, Sept 2014, during a violent Austin thunder storm, a rental property I personally own in SW Austin was struck by lightening and caught fire in the attic.
As the thunderous flash of light, noise and immediate smoke jolted the tenant out of bed at 2:30AM, he quickly realized that he was standing in water. The home was flooding, and also on fire, simultaneously.
Wow! Wake up!! His elderly mother was visiting and he was able to get her and his son out quickly as the house filled with smoke. Then he called 911. Then me.
I showed up around 3:15AM, sloshed through about 18 inches of water at my driveway, as about 6 firetrucks were on the scene. It was an apocalyptic scene, like out of a movie. But everyone was ok, and the fire was contained to mostly the attic and three bedrooms. But the home was rendered uninhabitable.
Of course the tenant had to move out, insurance got involved, and a year later I’m just now getting ready to re-rent the home. Insurance only paid 4 months of lost rent, and denied my appeal for more, not accepting my explanations of why the job took longer. So, as it stands, I’m out of pocket 8 months rent ($12K) and about $8K more after insurance deductibles and other snafus that I won’t go into. Plus whatever continued vacancy loss I incur until I place a new tenant. Read more …