As we’ve entered 2024, it’s a good time to look back on how the real estate market shaped up across the United States last year. 2023 was definitely a year where the real estate market had to adapt and show resilience. Even with different challenges, the industry proved to be quite strong and flexible, offering both hurdles and chances for buyers, sellers, and investors.

What Happened in the 2023 Real Estate Market:

1. Supply and Demand: The balance between supply and demand was a big deal in 2023. While lots of people wanted to buy homes, especially in the suburbs and rural areas, there weren’t enough homes available. This made buyers compete hard, driving up prices and making it a great time to sell in many places.
2. Remote Work: More and more people working from home changed what folks wanted in a home. People looked for places with more space, room for a home office, and access to nature. This made suburban and rural homes more popular, especially where living costs were lower and the quality of life was higher.
3. Affordability Issues: Even though mortgage rates were low, many people still found it hard to afford a home. Prices went up quickly, but wages didn’t keep pace. This made owning a home too expensive for some folks. People started looking for solutions like affordable housing programs and creative ways to finance homes.
4. City Renewal: While lots of folks were moving out to the suburbs, some cities worked hard to bring people and businesses back. They invested in things like better buildings, mixed-use areas, and fun stuff to do. These changes aimed to make city living more appealing and balanced between convenience and peacefulness.

Different Regions, Different Stories:

1. Sun Belt Boom: States like Florida, Texas, and Arizona saw a big increase in people and real estate activity. The nice weather, lower taxes, and business-friendly vibes attracted folks looking for a new start.
2. Coastal Challenges: Coastal areas faced special problems like rising sea levels and extreme weather. But despite these issues, the real estate markets there stayed strong. People and planners focused more on being ready for challenges and making coastal areas more sustainable.
3. Midwest Growth: The Midwest became a hot spot for affordable homes, stable jobs, and good living. Cities like Indianapolis, Columbus, and Minneapolis-St. Paul saw more people moving in and more investment happening.

What’s Next:

Looking ahead to 2024, the real estate market will keep changing. Demographics, economics, and society will all play a role. There will be chances for those who can adapt and take advantage of new trends. Whether you’re buying, selling, investing, or working in the industry, staying informed and flexible will be crucial.

In summary, 2023 was a year where the real estate market showed how strong and adaptable it could be. Despite challenges, it set the stage for more growth and innovation in the future.

Real estate investing, often known as one of the most lucrative wealth-building strategies, has captured the attention of both seasoned entrepreneurs and novice investors. With the potential for substantial returns and a variety of avenues to explore, investing in the world of real estate can be a long term reward. If you’re considering taking the plunge into real estate investing, here’s a guide to help you get started on the path to success.

Understanding the Basics

Before you jump headfirst into real estate investing, it’s crucial to build a strong foundation of knowledge. Real estate encompasses various investment strategies, including residential, commercial, industrial, and even raw land. Take the time to research and familiarize yourself with the different types of properties, market trends, and investment opportunities available in your area.

Setting Clear Goals

As with any venture, having a clear set of goals is essential. Are you looking for short-term gains through property flipping, or are you more interested in generating passive income through rental properties? Defining your objectives will guide your investment decisions and help you stay focused on your long-term vision.

Educating Yourself

Education is your most valuable asset in real estate investing. Read books, watch online courses, and learn from experienced investors. Understanding concepts like cash flow, property valuation, financing options, and risk management will empower you to make informed decisions. A great starter book is The Book on Rental Property Investing by Brandon Turner

Building a Solid Financial Foundation

Real estate investments require capital, and it’s important to assess your financial situation before diving in. Calculate your budget, including initial property costs, ongoing expenses, and potential renovation costs. Some investors choose to finance properties through mortgages, while others prefer all-cash purchases. Regardless of your approach, ensure that your financial foundation is strong and aligned with your goals.

Market Research

Conduct thorough market research to identify promising areas for investment. Look for neighborhoods with growth potential, low crime rates, good schools, and amenities that attract renters or buyers. Pay attention to historical price trends and future development plans that might impact property values.

Networking and Building Relationships

Networking within the real estate industry can open doors to valuable partnerships and opportunities. Attend local real estate investor meetups, join online forums, and connect with real estate agents, contractors, property managers, and other professionals. These connections can provide insights, advice, and potential leads.

Start Small and Diversify

While ambitious dreams are commendable, it’s often wise to start small and gradually expand your portfolio. Begin with a single property to gain experience and build confidence. As you become more comfortable, consider diversifying your investments across different property types or geographic locations to reduce risk.

Due Diligence

Thorough due diligence is crucial to successful real estate investing. Before finalizing any deal, research the property’s history, condition, and potential challenges. Engage professionals like inspectors, appraisers, and legal experts to ensure that you’re making an informed decision.

Property Management

If you’re venturing into rental properties, effective property management is key. Whether you choose to manage the properties yourself or hire a property management company, ensuring that your tenants have a positive experience can lead to higher occupancy rates and better returns.

Adapting and Evolving

The real estate market is dynamic, and successful investors need to adapt to changing conditions. Stay updated on market trends, economic shifts, and regulatory changes that could impact your investments. Flexibility and a willingness to adjust your strategies will be invaluable assets on your journey.

Final Thoughts

Starting up in real estate investing can be both exciting and profitable, but it’s important to approach it with dedication, education, and a well-thought-out plan. By understanding the basics, setting clear goals, building a strong financial foundation, conducting thorough market research, networking, and practicing due diligence, you’ll be well on your way to building a successful and sustainable real estate investment portfolio. Remember, patience and persistence are key virtues in this endeavor, and with time, effort, and informed decision-making, you can unlock the potential of real estate to create lasting wealth.

Real estate investing has been a hot topic in recent years, with many people jumping on the bandwagon to capitalize on the booming housing market. From TV shows to online courses, it seems like everyone is talking about the potential riches that can be achieved through real estate investing. But is it all just a fad? In this blog post, we will explore the pros and cons of real estate investing to determine if it’s a legitimate strategy or merely a trend.

The Hype Surrounding Real Estate Investing

It’s no secret that real estate has attracted significant attention and hype as an investment vehicle. Proponents of real estate investing include its potential for generating passive income, building wealth, and achieving financial freedom. With success stories of investors making massive profits through property flipping or rental income, it’s easy to see why so many people are enticed by the glory of real estate investing.

The Pros of Real Estate Investing

1. Tangible Asset: Unlike stocks or bonds, real estate provides investors with a tangible asset that they can physically see and touch. This sense of ownership can be comforting and appealing to many.
2. Cash Flow Potential: Rental properties can generate a steady stream of rental income, providing a consistent cash flow that can help cover mortgage payments and other expenses.
3. Appreciation: Historically, real estate has shown appreciation in value over time, making it an attractive long-term investment.
4. Diversification: Real estate investing allows investors to diversify their portfolio, reducing overall risk.

The Cons of Real Estate Investing

1. High Initial Investment: Purchasing real estate often requires a significant upfront investment, which can be a barrier for many potential investors.
2. Market Volatility: Like any investment, real estate markets can experience fluctuations, and the value of properties may not always increase.
3. Active Involvement: Managing rental properties can be time-consuming and requires active involvement in property maintenance and tenant management.
4. Liquidity Concerns: Real estate is generally less liquid than other investments like stocks, meaning it may take time to sell a property and convert it into cash.

While real estate investing has its advantages and has proven to be a successful wealth-building strategy for many, it is essential to approach it with caution and careful consideration. The housing market can be influenced by various factors, and what may be a lucrative investment today may not be the case tomorrow.

Investing in real estate should not be seen as a quick fix or a get-rich-quick scheme. Instead, it should be approached with a long-term perspective, understanding that it requires dedication, research, and a willingness to weather market changes.

Ultimately, real estate investing can be a valuable addition to an investment portfolio when approached with knowledge, dilligence, and a willingness to learn from other experienced investors. So, is real estate investing just a fad? The answer is likely not entirely. While it may experience ups and downs in popularity, real estate has been a tried-and-true investment strategy for many decades, and its potential as a long-term wealth-building tool should not be underestimated.

Did you just move or buy your first home? Furnishing your home is something that can often times be overlooked when you’re saving for your down payment and closing costs. When buying your first home you often times need all kinds of furniture. This can get pricey but depending on where you search you can find high quality furniture on a deal.

Second Hand

Buying second hand furniture can be difficult to find the right piece in great shape for the best price. However here are some tips to help you find the right furniture in second hand form.

• Facebook Marketplace – This is a great spot to quickly find many options, photos, descriptions, and prices without leaving your home. Often times sellers can be negotiable and can lead to a good deal. Typically you have to handle your own pick up and delivery but it can be a small price to pay for massive savings.
• Estate Sales – When someone has a house full of furniture and needs to sell it fast they often times bring an estate sale company in to handle this sale. Sometimes the items can be pricey but you can definitely find some good deals especially towards the end of the sale. This will take some time driving and walking through homes but so does furniture shopping.
• Garbage – In some neighborhoods owners may just throw furniture at the curb when they are done with it. It may be a used couch, dining table, etc. Picking this up for free and then even hiring a furniture repair/cleaning professional can make this item like new again. A few more steps in the process but the time can be worth the money you save.

Finding Deals at the Store

• Return Items – Often times a lot of furniture stores have a returned section. This can be furniture with a guarantee you will like it for a 30 day returned. If the past buyer did not like the item they would return which would then be sold on discount.
• Damaged Items – An example may be a couch is being delivered but the back gets a bit torn on a railing. The owners of the couch will send it back but it may be perfect for you if you’re putting the couch along the wall where no one will see the tear. This applies for appliances as well as scratch and dent areas. You can see large discounts on damaged furniture.

When shopping whether you need all new furniture or just something new for yourself consider these spots to look if you’re on a budget or don’t want to spend a ton of money on furniture.

When purchasing, remodeling, repairing, or upgrading a home you have many expenses. It is important to compare your price and your cost when making these decisions. Now, you may ask, “Aren’t price and cost the same thing?” My answer answer is yes and no.

Price vs. Cost

The way I view the price of an item or service is how much this is going to cost me in that moment. For example if you needed to purchase a new fridge the price may be $2,000 that one time. The way I view the cost of an item is how much is this going to cost me for the duration of this item or service. For example if you needed to purchase a new fridge I would also consider the estimated cost of how much it runs me monthly, what is the warranty, how long will this item last. No the price is $2,000 but the cost is $2,000 plus a $40 per month utility bill and an estimated repair 5 years down the road.

When comparing purchases I do recommend considering your cost. For example if you are debating between two fridges to purchase.

Fridge #1 – The price is $1,500 with a monthly utility bill of $60 and an estimated life span of 10 years.

Fridge #2 – The price is $2,000 with a monthly utility bill of $40 and an estimated life span of 10 years.

Now fridge #1 sounds appealing as right away it is 25% cheaper than the first fridge in that moment, however the question is what will this cost me over time? Obviously you can not predict repairs or how long the fridge will last but I think it is important to review the history the product has. Fridge #1 will cost $150 per year and Fridge #2 will cost $200 per year based on the life span and initial expense. Considering the utility bill as this is your monthly expense. On a yearly rate Fridge #1 will cost $720 and Fridge #2 will cost $480 to operate. Since a fridge is useless without keeping your items cold the efficiency is something to consider.

Fridge #1 – The cost is estimated at $870 per year

Fridge #2 – The cost is estimated at $680 per year

After considering the cost after purchase which Fridge would make more sense? Does it make sense to spend a bit more upfront to save over time?

Repairs/Updates/Remodels

This area takes a bit more of a thought process to make these decisions, however it is the same concept. When thinking price you’re thinking in this moment how much will it cost me. When thinking cost you’re thinking how much will this cost me over time.

Roof repair – Is it better to purchase a 15 year shingle at $5 per square foot or is it better to purchase a 30 year shingle at $8.50 per square foot?

Floor update – Is it better to lay down a laminate flooring for $4 per square foot that may last 7 years or is it better to lay down a hardwood flooring for $9 per square foot that may last 20 years.

This raises questions, how long will I live here? Is it worth it to me to pay more so the next person doesn’t have to pay? These are all valid questions and this is where trying to make these decisions can be difficult. I am not saying it is always better to think about your cost instead of your price.

Value in real estate

This is important for homeowners and investors to think about! If you plan on owning your property for a long time cost tends to be more effective. You do need to consider resale value as buyers often times take this into consideration as well. Put yourself in a buyers shoe, would you rather have a home full of lower quality items or would you rather have a home full of great updates? I can confidently say this does make a difference in the value and demand your property offers.

In a competitive market having quality upgrades and appliances make your home more desirable to buyers. Often times this results in multiple offers, bidding wars, and buyer paying more for your property. Sure, you can have a newer property with lower quality updates and still maximize a top dollar but it may not be as often. Even in a slow market you will still have the leverage. Buyers will often times seek out homes that have a roof with lots of life left, a furnace and A/C with a 10 year warranty remaining, or new windows with a 40 year warranty instead of the cheap ones off the clearance rack.

If you’re ever struggling on how to make a decision don’t be afraid to ask for advice from friends, family, and real estate professionals. You don’t have to do what they recommend but they may open your eyes to an alternative point of view making your decision easier.

Finding the right realtor to work with is a very important step of the process that can be easily overlooked. Below I have included some steps on how to seek out the right realtor for you.

1. Decide on what you’re real estate plans are

During this process you need to analyze what your next steps are. Are you looking to buy, sell, invest, rent, manage, etc? Where are you looking? What are you looking for? Realtors typically specialize in different areas of real estate. Some may focus on buying whereas others may only list properties. You also have agents that only do commercial or residential. So just because someone has a real estate license they may not be the best fit for you.

2. Reach out for referrals

Getting referrals from friends, family, co-workers, or neighbors can be a great place to start. Almost everyone knows someone in real estate whether it be a friend, family member, or past experience. Having a referral can hold more than a mutual relationship. Just because you know someone who knows someone in real estate it may not be the best fit. I do still recommend interviewing them to see if they are the right fit as I am big believer in working with people you know.

3. Interview your realtor

This is often skipped. I think it is very fair to interview your realtor however please be honest with them and let them know you are interviewing agents before you make a decision. You can ask questions about how they handle situations, their experiences, and even testimonials. Often times you can also utilize online sites to look at their past sales and reviews posted. They may have a personal site, use google, or a third party real estate site like Zillow or Redfin. Below is a list of some common questions other sellers or buyers may ask.

• How many homes have you listed/sold in the last 12 months?
• What hours do you work? If I call you at 7pm on a Thursday or 10am on a Sunday will you answer? If not, how long will it take to get a response?
• Why did you get into real estate? (knowing why can be a great insight)
• What do you look for in a client? (know their expectations of you. This is a relationship and works both ways)
• Where do you do most of your business?
• What area of real estate do you specialize in?

4. Make your decision

When making your decision let any other realtor you interviewed know you moved in another direction. Be honest with feedback and any reasoning. If you have no specifics and you just had a gut feeling it is okay to say that as well. Everyone is different and this is a big purchase/process so it is very important to work with someone you trust and feel confident in.

I provide real estate consulting for free. Click here to schedule a consultation. This could be to talk about your concerns, questions, or anything to do with real estate.

No, I am not cold. BRRRR is a type of real estate investing you can consider to build and grow a rental portfolio. BRRRR stands for Buy, Rehab, Refinance, Rent, and Repeat. This process does sound tedious however it is a great way to reuse your money to grow a portfolio quickly.

Buy

This process is always the most crucial just like any other investment. It is ideal you find a property that is in need of repairs and updates. These can be updates such as repainting the siding, renovating the kitchen and bathrooms, or putting in new floor and updating the systems in the home. No matter the work that is needed it is very important you find yourself a property you can get the best deal on. Sometimes with distressed properties you’re able to negotiate or get a better deal since the owner is possibly looking to sell and not deal with the rehab “headaches”.

Rehab

While rehabbing it is important to know where to spend your money. When I say where to spend your money I mean you don’t need top of the line appliances, flooring, doors, etc. in your rental property. For example if you were to replace the flooring. Would it make sense to put down the best flooring out there at $8 a square foot or do you need something that looks great and is durable for $4 a square foot? This goes for any update inside. Do you need a smart fridge for $4,500 or does a nice stainless steel fridge for $2,000 work? At the end of the day these would be nicer features however it does not change the rental value.

Refinance

During this step your goal is to refinance with the bank and withdrawing the money you spent on your rehab. Your property value will increase after you perform updates thus giving you the return on your money invested. For example, you purchase a property for $300,000 at %20 down so you’re borrowing $240,000. You invest $60,000 on updates but after the completion the property is now worth $400,000. Again you would go to refinance with a 20% down and you would be borrowing $320,000 while receiving $80,000 back. You invested a total of $120,000 between your first down payment and rehab costs but you received $80,000 back thus netting your investment amount to $40,000. That is a total cost investment of 13% to buy a property, rehab it, and now rent it for cash flow.

Rent

Now that you have a move-in ready property you put it up for rent. You can manage this yourself or hire a company to assist you with the rent valuation and tenant screening. I personally use Turbo Tenant as it is a free online software to market, screen tenants, collect rent, and manage your tenants/properties. Since you have a great property now it really should not be hard to find a great tenant as long as you do the proper screening.

Repeat

Now that you made an investment of $120,000 and it only cost you $40,000 you have that extra $80,000 to do it again. This is one of the great benefits to this investing process as you are able to leverage other peoples money to help you grow your real estate portfolio.

With summer here I know we all look forward to the BBQ’s, pool days, and getting a nice tan. Me personally I look forward to golf season, gardening, and spending time outside with my dog. Once the sun comes out my wife turns on the A/C and these are some things I check to make sure it is efficient. This will help save some money on your energy bill as well as maintain a cooler home throughout the day and evening.

Close your blinds

Keep your blinds closed during the day. Having the direct sun shining through your window will heat up your house. Block out curtains are best to keep the hot sun out but anything helps.

Adjust ceiling fans

Your ceiling fans may not be helping. Your ceiling fan spins in two directions which you set. Make sure when your fan is on it is pushing the air downward and not pulling upward. This will help in the winter for heating as well going the opposite way.

Open your windows

When it cools down at night don’t be afraid to open the windows and enjoy a fresh cool breeze.

Adjust your thermostat

Even adjusting your thermostat one degree higher can have a huge impact on your energy bill and you may not even notice a difference. You can try a schedule or a smart thermostat to change remotely. This can help you with not spending money to cool when you’re not home. Check out Smart Thermostats

Check your house vents

Since heat tends to rise you may experience an unbalanced temperature in your home. If you don’t have two systems sometimes you can feel a difference in temperature between your main level, upstairs, and even a basement. Since most basements are cool anyways you can consider closing your vents so you don’t cool this area. This can also help create better efficiency throughout your home pushing the cool air upstairs to help cool and balance your home temperature.

Solar Energy

Consider going solar. I think this can be a very nice feature if you plan on living in your home long term. This can be an expensive option for purchasing however in the long run I do believe you will save money over time. This also is a great way to help with the environment.

There are two main categories of real estate. One is residential and the other is commercial. I am going to breakdown all the options so you can better know what you’re looking to purchase or invest in.

Residential

The main goal with residential real estate is you are purchasing property to live in. You may be buying only land, land and the structure, or just the structure with no land. These properties are zoned for housing and you’re unable to utilize these for commercial use.

Single Family – When you purchase a single-family home you are buying the land and the structures erected on the land. Often times you do not have shared walls, shared spaces, or homeowner associations (HOA). A big pro to purchasing a single family home is you tend to have more space from neighbors and even a yard. You are responsible for the full maintenance of the property both inside and out.

Townhome – When you purchase a townhome you are buying the land and the structure erected on the land. Townhomes often have shared walls, shared spaces, and HOA’s. If you’re okay with not having your own outdoor space and following some general rules this can be a great option. Most of the time HOA’s maintain the exterior of the property. You do pay monthly dues but you don’t have to worry about mowing the lawn, shoveling, or replacing the roof. All HOA’s have different rules and regulations.

Condominium – When you purchase a condominium you are buying the structure only and no land. A good reference point is you own the “walls-in”. You do not own the exterior of the property, the land this is built on, or any shared common space. You have the same HOA’s as townhomes do but sometimes more rules and benefits. Typically condominiums are similar buildings to an apartment building. You may have access to a fitness center, pool, lobby, parking garage, and more. The biggest difference is you own your unit instead of renting.

Multi-Unit – When you purchase a multi-unit you are buying the structure and the land it is built on. Multi-unit properties have two to four addresses but never more than four. Once you exceed four units it is considered a commercial property which would change your financing and ownership options. Often times people invest in multi-unit properties since they are “mini-apartment buildings”. You have access to rent out two to four units or even live in one and rents out the others to help pay for the mortgage.

Co-Operative – These are rare. Often times this purchase option is located in a large city; New York, Chicago, L.A., etc. These are large apartment buildings that owners purchase a share in the corporation that owns the building along with the unit. When you own a share of the building you have a right to vote for board members and make decisions about what happens to the building.

Land – People buy land often times to build or construct their dream home on the lot. You are only buying land as there are no structures erected yet. When buying land it is important to do research about what you can build on the property prior to closing. You want to have a soil test, see if utilities can be connected, check zoning ordinances, and more.

Commercial

Commercial real estate can be defined as a property that is used for a business purpose rather than a living space.

Multi-Family 5+ – This references any building that has five or more apartments. No businesses are run out of this building as the sole purpose is for apartment units and renting them out.

Office, Business, Retail – This refers to a property thats purpose is to serve as a space for operating businesses. Whether it is a restaurant, doctors office, or clothing store these buildings do not have space for people to live in. It can be a stand alone structure with one business or it can be a large building with many floors, units, or different businesses conducting. Some businesses own the building they operate in while many rent.

Mixed Use – This is a mixed property that conducts for both business and personal living. These buildings will often times have space for a business to operate on street level with apartment units located above the business. These can be large buildings with 50+ units both business and personal living or it can be as small as two units with one of each.

Industrial/Manufacturing – This is a property designated for large industrial use. Typically it is less than 20% office space with the remainder used for warehouse storage, manufacturing, shipping, loading docks, etc.

Land – This is only land with the purpose of developing commercial property on it. Just like purchasing residential land you have a lot to process and check prior to closing. When purchasing land for commercial development you have many more boxes to check prior to closing.

There are many tips and tricks realtors can offer when you’re thinking about selling. There are many ways to maximize your properties value by doing minimal staging, cleaning, and preparing.

Maintaining a Clean Property

This includes both the interior and exterior of the property. These inexpensive tips can increase the demand and value of your sale. Often times netting in a better offer including a higher price and more favorable terms for you as the seller.

Exterior

You always hear people talk about great curb appeal. This is very crucial however as this is the first impression your home makes for any interested party touring in person. Other than the online photos this is the best way to get off on the right foot with prospective buyers. Having an under maintained exterior will give a sour taste to a buyer during the touring once inside. They will be looking for items inside that need care instead of looking at the property and potential space.

1. Make sure the lawn is cut and not outgrown
2. Don’t have dead trees, bushes, weeds, etc.
3. Don’t have gutters, siding, or window trim hanging
4. Consider power washing the driveway, sidewalks, and siding for a clean look

Interior

Now that your buyer is inside you want them to focus on the space and visualize themselves inside. Below is a list of the top distractions for potential buyers. Not everything inside has to be perfect but maintaining these small items can make a huge difference when showing your home.

1. Paint (You don’t want to have many marks, patches, or dirt on the walls or ceilings. Most paint can actually be washed with warm water and dish soap.)
2. Clean bathrooms/kitchen
3. Declutter (Better to have boxes/bins stacked than toys or personal items piled up in a corner.)
4. Dust ceiling fans, blinds, pictures frames, etc.
5. Clean windows to allow the best natural light. Most buyers tend to look out the windows during shows.

For more questions and details schedule time to speak with me for a free selling consultation.