Re/max of Boulder

05/25/2017

When should I sell my house?

I get this question at least three times a week. It is frequently related to “are we in a bubble and is it close to bursting?” Many real estate professionals will go to the statistics: Average price trends, median price trends, year over year comparisons, days on market, inventory levels, and mortgage rates. And while the statistics are very good in getting a market pulse, they don’t directly address the when should I sell question.
I prefer personal drivers. Things that people want. Examples include: downsizing, moving closer to the grandkids, investing, addressing health issues, retirement funding, estate funding, risk avoidance, education funding. Among many others. Let’s take a quick look at these.
By downsizing I mean reducing mortgage, maintenance, utilities, taxes and insurance. Grandkids is self-explanatory. Investing is to balance your portfolio, to generate income or to change your risk profile. Addressing health issues is complex. From paying for coverage, to accommodate housing access and locating closer to needed services.
Retirement, estate and education funding are minor variations on a theme. Risk avoidance is the “I’m losing sleep trying to decide.” There is great fear in selling too soon and leaving money on the table and selling too late and losing perhaps substantial paper gains.
If you have any of these personal drivers, or one that I haven’t listed, call me and over a cup of coffee or a local craft beer we can analyze your individual situation and come up with suggestions to make your life better.
All the best
John
303-588-5295

05/25/2017

When should I buy my first house?

A couple of weeks ago I blogged about the reasons to want to sell your home. Today is the day to share some thoughts on buying your first home. There are a lot of good reasons to get moving now.

Prices are going up. Reuters has a nice article that explains why. (www.reuters.com/article/us-usa-economy-housing-idUSKBN18K1W7)

Financially, your mortgage, taxes, HOA fees, and insurance can frequently be the same as what you pay in rent. But rent makes your landlord wealthy, not you. Imagine saving money and building value in your home.

Gadzooks! You’ve looked already and you can’t afford the home you would like. Poor thing. Literally. Start with a place you can afford. Accept the tradeoffs. Just get in the market because in a few years time with your career doing well and your first home worth a lot more than you paid for it, then you can step up and get that master bath with the dual sinks, 5 foot shower, and soaking tub.

There’s more to it than money. Believe it or not, there is an emotional attachment to your home. When you get home, to your home, you feel better. You get to relax in an asset that belongs to you. Your life unveils in your home. You smile more. Trust me on this one.

The tax man cometh. But with a home you have a nice thing called Mortgage Interest Deduction. Don’t worry no tax reform bill will touch this deduction.

So there you have it: reasons to buy your first home right now. Make money, feel better and deduct it.

U.S. home resales fell from a more than 10-year high in April, weighed down by a chronic shortage of houses on the market that is keeping prices elevated and sidelining prospective buyers.

03/08/2017

Coming up with that down payment.

​http://www.boulderco.com/blog/plan-for-your-down-payment.html

When I talk with first time real estate buyers the number one reason they don’t buy a home of their own is the hurdle of the down payment. This article will exp...

02/10/2017

Be the first to know when your dream home hits the MLS.

02/06/2017

Here is an article I wrote about using real estate to create wealth.
I hope you enjoy.

Six Ways to Wealth

There are many ways to build wealth. From stocks and bonds, to collectibles to real estate to inheritance. Of these, real estate has the most appeal to me. Mainly because I don’t stand to inherit anything, I know nothing about collectibles and most of my stock and bond investments have putted along at 3-5% returns.
So real estate it is. And there are six ways to build wealth using real estate. Buckle up.
1. Buy and hold a home. Sounds pretty simple and it is simple. Your interest is deductible (yea) and over time your principal balance declines and your home appreciates in value. At some point in your life your home will represent one of the best investments you’ve ever made.
2. Buy and rent a home. It is not as daunting as it sounds. With the right amount of homework and the right location you can generate positive cash flow on a monthly basis. Don’t spend it, save it for the next rental property down payment. I know you don’t want to be a landlord. I get it. Today, however, there are many professional property management firms that will take care of all those landlord issues and still issue you a monthly check. And now you’re in a new game: depreciation, appreciation and rent inflation. Just be sure to create a reserve for unexpected repair and maintenance expenses.
3. Participate in a Real Estate Investment Group. I think this is the easiest of all. Write a check, deposit with a reputable firm. They take your money, combine it with many other people’s money and purchase income producing assets. And the SEC rules have changed recently so you don’t have to be an accredited investor to participate. There are limits on how much you can invest so check with your accountant or lawyer to verify.
4. Buy and flip a house. Thanks to HGTV, who makes it look real easy, many people believe this is a good real estate play. And it can be. You buy a house that needs work, invest thousands to fix it up and resell at an enormous profit. Well that’s the TV version anyway. I think you will find reality a bit different. If you don’t have rehab experience then work with someone who does. The older the house the larger the contingency should be. I converted a two family house into a single family. Guess what? I found out we had to mitigate the whole house for lead paint. Then asbestos and electrical. Oh and the asbestos was holding the furnace together. Once removed, I had to spring for a new furnace and convert from oil to natural gas. My contingency was shot after the lead paint. All the rest came out of my pocket. The result was fabulous and profitable but the journey was frightening
5. Buy a kiddie condo. This is a great idea if Lucy or Sam are headed off to college. Purchase a condo with 2 or 3 bedrooms. Have your child invite friends to live with them in their off-campus paradise. The rent received will offset some of your cost of ownership and you get the benefit of appreciation, potential tax benefits, and principal reduction. I wish I had known about this one years ago.
6. Buy and then short term rent ala airbnb or VRBO. Short term rents can be substantially higher than monthly lease rates. More income, possible appreciation, principal reduction, possible tax benefits what’s not to like. One downside is the cleaning and preparation between guest stays. You or your hired property manager must step in perhaps several times a month to make your place ready for the next occupant.

So pick one or two of these strategies, consult with a professional (I’m available) and start building your wealth.