My name is Kevin Gleason. I have been a commercial real estate broker since 1986. Over that time I have sold numerous commercial properties, encompassing apartments, shopping centers, office buildings and single-tenant net-leased properties. The clients and customers I have served have two things in common:
They have all built wealth through investing in real estate and not one of them did it over night.
Typically they started out with a small property, say a four family apartment. After a few years, as the property appreciated, they refinanced and pulled cash out and used it to buy another. Thus began a pattern of investing that over ten to twenty years built a portfolio of properties worth millions.
Some were hands-on and on a part-time basis or with a spouse or partner managed the properties themselves. This for the most part consisted of renting apartments to qualified tenants, providing those tenants with a quality residence, and collecting rent checks every month. Simple bookkeeping, consisting of bill paying and record keeping took a couple hours a month. On occasion they might paint an apartment or cut the grass or plant flowers. They could enhance the attractiveness of their property in whatever way they chose, and the benefit was attracting better tenants, increasing the rent more often, and controlling to a large extent their wealth creation.
Other investors hire a management company to perform those tasks for a fee based on the total collected rent. The more rental income the manager generates, the greater their fee. This arrangement provides an incentive for them to keep the property full.
Either approach takes the investor to the same place - financial security, and over time, a valuable portfolio of real estate.
This approach to becoming rich hasn’t changed since I started in this business. It goes on everyday, everywhere, and creates the same result. Slow and steady wins this race, and careful and responsible investing in real property will never let you down.
Call me if you are thinking about embarking on the slow boat to wealth creation known as real estate investment. All you need is access to credit, a work ethic and the patience to see it through.
Kevin Gleason
Realty Dynamics
(414) 870-5363
kevin@realty-dynamics.com
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Some people think that signing on a broker to help them buy real estate is unnecessary. They can get the assistance needed from any realtor free and without obligation. Some people wonder: Why pay for something you can get for free; why obligate yourself? Some skeptics even think it’s just a tactic real estate agents use to try to secure an opportunity to earn a commission.
Here are a few facts -
#1 - A buyer very rarely pays for the service of a Buyer’s Agent. At Realty Dynamics we’ve never asked to be paid by a buyer client. Call us; we’d be glad to give you the details. #2 - A buyer cannot get the services available under a Buyer’s Agency from any realtor ever! The heart of a buyer’s agency relationship is that the agent represents the buyer. Without a Buyer’s Agent relationship, you can get assistance, but not representation. #3 - With a Buyer’s Agent there is no obligation to buy, only an agreement to having a knowledgeable broker working for you.
There is a BIG difference and when making a BIG purchase, we hope you’ll take the time to learn about this valuable option for buyers.
Click Here for a Printable Explaination About Buyer’s Agency
Click here for a related post on Buyer’s Agency from RealtyTrack.com
Copyright © 2008 Gohlke & Associates, LLC - All rights reserved
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That’s right! If you buy a first home worth $200,000 and put 10% down, then get a mortgage at 6% interest, with mortgage insurance and typical monthly property tax escrow, your total monthly payment will be about $1,450. If you left a $950 per month rental unit to do that, it would cost your $200 a month more - right?
Sure, we we’re told in school that $1,450 - $950 = $500, but that was math, not “real estate math”! When you use “real estate math” then $1,450 - $950 really does equal about $200 (plus or minus a nickel). Here’s why - with “real estate math” three things change the formula:
First, some of the money you give to the bank each month actually goes right back into your “other pocket”, if you will - it goes toward reducing your debt. More money saved - less money owed; it’s pretty much the same thing.
Second, with a home you get to take your property taxes and mortgage interest as deductions when you do your income tax return. The exact amount of tax savings is a question for your tax preparer, but its a big reason why home ownership has always been the thing to do - put another way, Uncle Sam actually can be a nice guy when it comes to taxes, honest!
Third, although right now real estate prices in Wisconsin are pretty flat (ok, maybe even a little down in places), overall, historically property values go up on average something like about 3% a year.
Call us if you’d like to know more. We like to help 1st time home buyers. This is an unusually great time to buy your 1st home.
Copyright © 2008 Gohlke & Associates, LLC - All rights reserved
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The Greater Milwaukee Association of Realtors sent us a special announcement this past Wednesday, July 23rd. We thought we’d pass it on -
The Federal Reserve adopted rules last week to prevent unfair or deceptive practices by lenders and to protect home buyers from the kind of loans that drove many into foreclosure. The new rules apply to all lenders and not just to banks supervised by the Fed. Some of the new rules require lenders to escrow money to pay taxes and insurance for risky borrowers, document borrower’s income before a loan is issued, limit and—in some cases—ban prepayment penalties, prohibit lenders from making a loan without considering a borrower’s ability to repay a home loan from sources other than the home’s value, and require mortgage advertising to contain information about rates, monthly payments, and other features of the loan. Most of the rules are expected to take effect Oct. 1, 2009. Escrow requirements won’t go into effect until April 1, 2010. The rules do not apply to home equity lines of credit, construction loans, bridge loans, or reverse mortgage loans.
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Highlights from a July 14, 2008 article in Realty Times - “Washington Report: Foreclosure Facts of LIfe?” by Kenneth R. Harney
The article is an overview of a recent speech by Treasury Secretary Henry Paulson given to an FDIC housing conference. Labeled as, ” blunt, tough love comments about the home foreclosure crisis and the real estate market …” by the author, here are a few highlights …
In addition to saying that the federal government’s clean-up role can only be limited, the author goes onto say that, “Paulson also used his speech to punch holes in the widely-accepted perception — fostered by media coverage — that the housing market is in deep trouble nationwide.”
Paulson said, “We need to recognize that there is not a national housing market,” and further Paulson noted that just four states: California, Florida, Arizona and Nevada — accounted for one quarter of all mortgages nationwide, but 42% of foreclosure filings last quarter. Adding Michigan, Indiana and Ohio, these seven states — all by themselves — have accounted for over half of all foreclosure filings this year.” [Highlighting is ours].
We’re beginning to feel that more and more people here in Wisconsin are starting to get tired of the unending bad national real estate news. If you haven’t noticed, we’ve been tired of it for some time. That’s why we look to find news that debunks this “national real estate market”.
Look around our site … there’s all kinds of credible sources that are saying the same thing - real estate here is in pretty good shape. The fact is this market is producing some unusual opportunities and you’ll see plenty of that around here too.
Click here for a related article on our local real estate market
We are looking for agents to help us with our growing business. We offer high commission splits, low monthly fees, flex hours - and work from home if you’d like. We need self motivated and self managed individuals to join our team.
We encourage you to take the time to review our WEB 2.0 website and give us a call we’d like to hear from you. We have leads for you. No mandatory agent tours or floor time.
Join our growing team - the real estate biz is alive and well at Realty Dynamics!
Click here to send us an email. Let’s talk!
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Wisconsin’s Use Value of Land
The Wisconsin Court of Appeals recently issued an unpublished opinion in Thomas v. Pringle (Case No. 2006AP697) that could impact anyone involved in the sale or development of agricultural land. The key issue in this case was whether a seller/developer has a duty to disclose a “potential” real estate tax penalty under Wisconsin’s Use-Value Law to a prospective buyer.
Background
Wisconsin’s Use-Value Law assesses property based upon its agricultural value rather than its fair market value. Under the law, a penalty is imposed whenever agricultural land is converted to a different use. Also, the Use-Value Law requires sellers to notify the buyer of three things: (1) that the land has been assessed as agricultural land under the Use-Value Law; (2) whether the seller has been assessed a penalty; and (3) if so, whether the penalty has been deferred. See Wis. Stat. § 74.485(7). In 2002, the WRA Real Estate Condition Report forms were updated to include this notification requirement.
The Wisconsin Realtors Association (WRA) recently posted an article about changes in the law regarding the use-value of land.
Click here to read the article
Capital Gains Rates
The maximum federal tax rate on capital gains is 15%, whereas wage income is taxed at 35%. Then Wisconsin income taxes are added on top of that - up to an additional 6.75%. A total of over 40%. In all the dreaded capital gains tax that haunts many a new investor is in fact a bargain compared to the bit Uncle Sam takes out of our earned income.
Remember, capital gains requires that you hold a property for 12 months or more before selling and that it was held for productive use (i.e., as a rental, not a long-term fix and flip).
Special Exemption for Principal Residence
If you sell your residence, the first $250,000 is exempt from gain or $500,000 if you are married. This requires that the residence was used as such for two of the last five years.
1031 Exchanges
Under IRC Sec 1031, you can roll your profits from a rental property into more real estate and defer paying taxes altogether. Your tax basis rolls into the next property.
Source: “Reduce Your Taxes by Investing in Real Estate” by William Bronchick, JD
Click here for more information about new IRS rules regarding 1031 exchanges and capital gains.
We encourage you to consult with a tax professional to develop the best tax strategies for your personal circumstances.
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When you look around our website and blog, it doesn’t take long to find posts about very interesting properties, recent deals and talk about the opportunities that this market is offering. We know that there are real deals “right here, right now” as we like to say. We’ve seen them - been inside them; checked them with our 350 point inspection. We’ve done a few ‘deals’ ourselves and we’re anxious to do more!
But we find it a bit troubling that some websites create a sense that there are many deals that need nothing more than your wallet to turn them into dreams come true! We read an article yesterday on INAM.COM and we liked a few things they had to say -
“. . . The practice of mixing pre-foreclosure properties with listings of for-sale properties by major listings sites like Yahoo Real Estate and Trulia is misleading to consumers and damages the credibility of the sites that allow it, according to a company that’s in the business of supplying similar information itself.”
The article goes on to talk briefly about Foreclosures.com and RealtyTrac.com (two companies that supply foreclosure information) and later continues . . .
“Property searches conducted by Inman News show both sites provide information that could help consumers understand that the pre-foreclosure properties are not “listings,” and that the dollar figures displayed with each are not asking prices. But there does appear to be potential for confusion. . . .
. . . If home buyers don’t realize that none of the properties retrieved by this particular search [done on Yahoo] are actually for-sale listings, they might be further confused by the generic form used by Yahoo Real Estate to present details about each home, which states they are “offered by” RealtyTrac.”
The article also goes on to talk about Trulia.com for similar practices. Our thanks to Inam News for there viewpoint.
There are so many deals! When is “great” good enough?
Questions? Call us. We’re RealtyTrac reps.
We are looking for rehabers. We have expertise to:
- Find the best properties to rehab
- Analyze the financial dynamics
- Assist you with scoping and costing work
- Market and sell properties quickly
Call and learn about our services.
You might be surprised at the opportunities! Click here to see just a sampling of the opportunities right here, right now!
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Right now there is an unusual opportunity to purchase properties at sub-value prices. The depressed residential home market has created a greater inventory of distressed properties than usual. In addition to an increase in bank owned or REO properties, government owned inventories have increased also.
It is widely known that subprime lending practices in recent years have resulted in a dramatic increase of foreclosed properties. The resulting high REO inventories have encouraged aggressive pricing and greater flexibility in negotiations by loss mitigation departments of many mortgage lenders. But the increase in opportunity to purchase properties at sub-value prices is being fueled by other factors as well.
More conventional sellers are finding it very difficult to sell. High inventory levels have lengthened the average days to sell, and for some that can mean holding a property beyond a point that is practical or even affordable. When that point approaches or has past, owners may become highly motivated. Those who are selling because of a divorce, relocation or estate liquidation are more likely to find themselves in these circumstances. Homes they need to sell are more often not in the best marketable condition as owners selling for these reasons often have not had the interest, time or money to spruce up their property before putting them on the market.
Further adding to high inventories is the fact some would-be buyers are taking a “wait and see” attitude. Our aggressive low resale pricing strategy addresses this group of buyers. We have developed a complete system to find, evaluate and purchase properties and then either wholesale or rehab and resell them.
Our mission is simple: we are focused on creating the maximum annualized return on investment while minimizing risks. Our strategy has been developed with the understanding that the speed of execution influences return on investment far more than a few dollars saved in costs or added in final sell price.
If you’re looking to take advantage of the investment opportunities in today’s real estate market we invite you to learn more about our disciplined systems approach to capturing real estate profits. If you’re interested click here to send us an email.
Copyright © 2008 Gohlke & Associates, LLC - All rights reserved
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