Real Estate & Relocation ^ Colorado

Irish Memories

Perspectives in Real Estate Investing

Investing in real estate is always a popular topic.  Everyday I get calls from would-be investors with good intentions but unreal expectations.  I thought a good way to learn about real estate investing in to chat with real live people who have a track record.  One couple who comes to mind is Rusty and Frances Wehner.  Here's what Rusty has to say about his real estate investing strategy. 

1. What attracted you to becoming a real estate investor?

       A: I believe Real Estate is one of the best investments to accomplish most financial goals.

                1.  For my wife and I, Real Estate is one of the best ways to safely accumulate wealth in any Investment planning. Real Estate gives you leverage, tax favored investing, and hopefully cash flow. Most importantly, Real Estate historically has been one of the best hedges against inflation. 

2.  My wife and I use real estate to in our Retirement planning  to hopefully accomplish financial independence.  We plan our Real estate holdings and the mortgages on the properties around  our future needs for cash and cash flow.  Real Estate can be one of the best forms of an “annuity” for retirement; Rents have historically kept up with inflation and the value of this “annuity” also historically increases in value.

3.  My wife and I have two kids and we have used Real Estate to save for their college needs.  When our kids where first born, we purchased a property and have used the cash flow and mortgage management to help save for educational needs.  When the time comes we can either use the cash flow, refinance the property and pull cash out, or sell the property for college.

4.  Most importantly, Real Estate is one of the last tax favored investments left for most people.

2. How long have you been investing in Real Estate?

Over 20 years.

3. What do you look for in an investment property?

My wife and I look for:

A.   Properties that we can  fix up and increase the going rents for increased cash flow.

B.  Properties that can be split and the parts sold off.

C.  Areas that have good rental demand.  Many of our rental are close to hospitals and schools.

4. Do you prefer to “fix and flip” or buy and hold?

We have done both, but we prefer to hold on to properties and use them as long term investments. Holding onto a property for one year gives you a long term capital gain vs ordinary income.  So many times we will find a “fix and flip” home and we fix it up and hold onto it for a year and then sell the home.

5. What advice can you give a novice investor?

Invest in a home for yourself first.  In owning a home you get a better understanding of what it takes to manage your properties and I think that management is a big part of a successful investment.  My first home was a duplex that I put 3% down, owner occupied, and I rented out and managed myself.  I still own this home 20 plus years later.

6. The Denver metro area has a surplus of homes on the market.  In your opinion is this a good time to invest in real estate?

Yes, I always think it is a good time to invest.  I look for properties in good stable areas. I pay a little bit more for them, my cash flow is not as good, but in the loan run it is these properties that will hold their value and make great investments.   In addition, I find that as interest rates have moved up, our rental market has firmed up.  I am finding that I can be pick and choose my tenants more than I could a year ago.

7. Can you give an idea of how much money, a first time investor should expect to invest?

That is always a loaded question. Each investor’s goals are different. You can invest almost nothing into a property, but then the cash flow may be a problem.  I always recommend that the first investment should be in a property that you live in. On an owner occupied property an investor will get the best rates, an investment that you can work on in your spare time, and great tax benefits when you sell it. 

~~~~~~~~~

Rusty & Frances, Thank you for taking the time to share with the readers of this blog your theories on investing.  The Wehners are involved not only in real estate investing but work helping others obtain home financing.  As Certified Mortgage Planning Specialists, they consult on mortgages that will best meet your financial needs.  Rusty and Frances can be reached at 303-601-5807 or 303-515-5756

Average Days on the Market Colorado

Real estate information and statistics is abundant on the web.  Just about anything you want to know can be found, IF you know how to search.

Today I checked my log files and discovered someone was searching for the term, "Average Days on Market Colorado."  Now as a Realtor I can immediately tell you this term is not something you will find defined as asked for.

The problem is the search is requesting a statistic for the entire state of Colorado.  Statistics are compiled by the MLS data.  There are many different MLS's in the state.

I am assuming the person searching is really wanting to know what the average days on market is for a specific area.  If this is the case, use the name of the area, not the state.  i.e. "days on market denver."

Each month I post the Denver Sales Statistics on my personal website.  You can learn more about what's happening in the real estate market there, including average metro denver prices, number of homes for sale, median sold prices and absorption rates for the Denver metro area.

Please note when we quote these statistics the area includes the counties of Arapahoe, Douglas, Jefferson, Elbert, Adams, Broomfield and parts of Boulder.