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2009 Making Some Changes. The Year of Taking Control of My RE Career.

01-02-09
Ed Wingfield II
Ed Wingfield II: Real Estate Agent in Aurora, CO
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  • Office: (303) 365-0050
  • Mobile: (720) 297-1910

For me, new years is always one of my favorite times of the year. It gives me a chance to reflect on the past year, take notice of what I did right and what I did wrong, what was effective and what was not effective, etc. New years always gives me the feeling of a fresh start, a chance to make things right, a chance to make this year better than the last. Every year around this time, that old saying always pops into my head, "Today is the first day of the rest of your life."

2009 is going to be the year of my business, the year to really take charge of my career. I got into real estate when I was a very young (18) while I was still in college. I sold real estate part time while I was in college and when I graduated from college the real estate market was booming. It didn't take much to make a good living selling real estate. If you treated your clients well, gave them the results and service they wanted and kept in contact after closing, it seemed that the business just kept rolling in. I spent minimal money on marketing and made a pretty good living just handing out my business cards. Well times have changed, to say the least.

My First Big Lesson In Real Estate

This economic/ real estate down turn has really impacted my career and has opened up my eyes to the fact that if I want to be successful in real estate (in the good times and bad) I must run it like a business. I must have a marketing/business plan for every year, I must track my leads/transactions, I must stick to the plan and I must spend money to make money.

Books

Over the last year I have probably read every real estate agent related book there is. 2009 is the year I start implementing those strategies. I have taken a long hard look at the real estate environment in my area and have finalized my business/marketing plan for this year. I am excited to get it going.

Spending Money

Something I have never done in my real estate career is spend money. Up until this point in my career, I have lived off of referrals and networking. Although networking will always be in my business plan and play a major part in building my business, I have decided that I need to start spending money. Almost all of the high producing agents I have spoke with as well as all the books I have read preach the fact that you must market yourself.

I am very excited about what 2009 has in store for me and my business.

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Fitzsimmons RE Trends: Pop Tops and Scrape 'n' Builds

12-30-08
Dano Keys
Dano Keys: Real Estate Agent in Denver, CO
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  • Office: (303) 962-4272 x455
  • Mobile: (720) 254-5308

Investing in Real Estate 9 - Scrapes, Pops and New Construction

This blog will discuss a type of real estate investment, scrapes, pops and new construction, in the Fitzsimmons area in Denver.

What this investment is: Purchasing a small home in an expensive neighborhood that may or may not need work. The home is bulldozed and a new home or duplex is put on the lot. Alternatively, the existing home is renovated and more square footage is added on. A pop-top is adding a second story to an existing home to add more square footage (commonly, a master bedroom suite).

Equity needed: Being able to document your income and your assets will be critical. For a commercial loan, your net worth should generally be at least as much as the loan you are seeking. The good news is that the commercial loan usually does not show up on your credit report, so it doesn't count towards the "four investment home limitation" from Fannie / Freddie.

Importance of credit: Essential. A 720 FICO is a must. A 740 would be better.

Importance of experience with contractors: Critical. If you have never done it before, start with an easier "paint and carpet" project to build your skills. The more sophisticated the project, the better your contractor management skills must be to make money. Not surprisingly, the simpler projects have lower profit margins than the complicated projects. Make sure you can take the time to really focus on the project. We run classes on how to do this from time to time. Go to http://www.yourcastle.org/events.cfm to see when the next session is.

Important of experience with property managers: Generally not important for this type of investment.

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Fitzsimmons RE Trends: Condo Conversions

12-30-08
Dano Keys
Dano Keys: Real Estate Agent in Denver, CO
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  • Office: (303) 962-4272 x455
  • Mobile: (720) 254-5308

Investing in Real Estate 8 - Condo Conversions

This blog will discuss a type of real estate investment, fix and flips, in the Fitzsimmons area in Denver.

What this investment is: A synthesis of the fix and flip and rental operations - purchasing an apartment building in a neighborhood dominated by owner occupants, then converting the building from apartment building to condominium. Often requires renovation of the units to meet the expectations of owner-occupant buyers in that area. Complex and time consuming, but has wonderful tax advantages compares to fix and flips and often has superior returns to all other asset classes. Ideally suited for the sophisticated investor with extensive experience.

Equity needed: Being able to document your income and your assets will be critical. For a commercial loan, your net worth should generally be at least as much as the loan you are seeking. The good news is that the commercial loan usually does not show up on your credit report, so it doesn't count towards the "four investment home limitation" from Fannie / Freddie.

Importance of credit: Essential. A 720 FICO is a must. A 740 would be better.

Importance of experience with contractors: Critical. If you have never done it before, start with an easier "paint and carpet" project to build your skills. The more sophisticated the project, the better your contractor management skills must be to make money. Not surprisingly, the simpler projects have lower profit margins than the complicated projects. Make sure you can take the time to really focus on the project. We run classes on how to do this from time to time. Go to http://www.yourcastle.org/events.cfm to see when the next session is.

Important of experience with property managers: Not important; the majority of our clients manage their own rentals when they get started. Ideally you will have started with some smaller investment rentals and built property management experience. Now, when you have to finally manage a property manager, it will be easy since you have done the job yourself in the past.

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Fitzsimmons RE Trends: Fix and Flip Investing

12-30-08
Dano Keys
Dano Keys: Real Estate Agent in Denver, CO
  • view my blog
  • Office: (303) 962-4272 x455
  • Mobile: (720) 254-5308

Investing in Real Estate 7 - Fix and Flips

This blog will discuss a type of real estate investment, fix and flips, in the Fitzsimmons area in Denver.

What this investment is: Purchasing a home that needs work. The scope can range from the basic "paint and carpet" to extensive overhauls to scraping a decrepit property and completely starting over. Usually does not involve tenants, and the objective is to get in and out of the property as quickly as possible. Great for beginners with the right skill sets or the willingness to learn.

Equity needed: With hard money loans (defined in next paragraph), potentially 0% and they'll finance the construction costs, too. Expect a LOT of strings to be attached. A small local lender might give you 75% of the purchase price and the renovation budget, and the terms will be a lot more pleasant than the hard money option. Or you can do 20% down and get a convention, non-owner occupied loan and pay for the renovation with cash or your Home Depot credit card.

Importance of credit: If you get a hard money loan, your credit will not matter as much. These are harder to find than they were last year. If you get a traditional loan, it'll be a non-owner occupant loan, credit score will be very important. A 720 FICO score would help a lot. Being able to document your income and your assets will be critical. A hard money lender will lend you money based on the value of the property you are purchasing. If the property is worth $200,000 and you are able to purchase it for $150,000, a Hard Money Lender will probably give you a loan regardless of your down payment or credit score. However, the fees and the interest rate will be much less desirable than more conventional forms of financing. Hard Money Lenders can usually close very quickly, and from the Sellers' point of view, you are purchasing with Cash.

Importance of experience with contractors: Critical. If you have never done it before, start with an easier "paint and carpet" project to build your skills. The more sophisticated the project, the better your contractor management skills must be to make money. Not surprisingly, the simpler projects have lower profit margins than the complicated projects. Make sure you can take the time to really focus on the project. We run classes on how to do this from time to time. Go to http://www.yourcastle.org/events.cfm to see when the next session is.

Important of experience with property managers: Not important.

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Fitzsimmons RE Trends: Lease Options

12-30-08
Dano Keys
Dano Keys: Real Estate Agent in Denver, CO
  • view my blog
  • Office: (303) 962-4272 x455
  • Mobile: (720) 254-5308

Investing in Real Estate 6 - Lease Options

This blog will discuss a type of real estate investment, lease options, in the Fitzsimmons area in Denver.

What this investment is: A lease option (L/O) is Acquiring control of a property (though not necessarily ownership), then leasing the property to a tenant. The lease is bundled with an option, so the tenant can (but does not have to) purchase the property for a given price within a given time frame. Again you are seeking a tenant for a property, but usually for a slightly longer term (12-18 months) and frequently (though not always) with the goal that the tenant purchase the property from you at the end of the lease. If you purchase the property, then it's an easier process; if you find a highly motivated seller to let you re-lease the property to another tenant, it can be a lot of work to set up. However, the re-lease method doesn't require any cash out of pocket and does not rely on your credit score, so it is appealing to many investors. Great for beginners with the right skills and attitude.

Equity needed: If you get seller financing, potentially just a few thousand dollars for your operating account. If you purchase the property, 10% down (best case); more likely 20% down.

Importance of credit: If you leverage seller carry, not important at all. If you purchase the property, credit is important. A 720 FICO score would help a lot. Being able to document your income and your assets will be critical.

Importance of experience with contractors: Some exposure would be helpful, but you are not likely to encounter construction projects any more difficult than you have maintaining your own personal residence.

Important of experience with property managers: Not important; the majority of our clients manage their own rentals when they get started. We run classes on how to do this from time to time. Go to http://www.yourcastle.org/events.cfm to see when the next session is.

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