Wednesday, October 31, 2007
Great News From Economist on the Charlotte Region
The Charlotte Observer ran a very promising news article this morning (October 31st). Obviously a lot of people, investors included, continue to wonder what effect all of the different economic events will have on the market where they invest. Well, it was nice this morning to read the headline: "This Time Good News Expected" The article discusses different parts of the Country and the impact that the Mortgage fallout has had on those markets and Wachovia Bank's Senior Economist, Mark Vitner, had this to say: "Everyone's readily aware that the market is crashing nationwide," he said, "but in Charlotte it's holding up really well." Another Chief Economist at Wachovia, John Silvia, quotes:"If you're in the Rust Belt, it's bleak...if you're in Charlotte...things look pretty good" The article also discusses the fact that the unemployment rate in our region was DOWN versus an increase in most markets. This article provides more great news for investors here in the Charlotte Region, however Mark Vitner with Wachovia did offer a strong bit of advice that I think should really be regarded by investors "on the fence" about their next investment or making their first investment, he states: "My message is take advantage of the low rtes," Vitner says. "What the Fed giveth, they can takey away." This is the advice of the Senior Economist for one of the top banks in the Nation and the World for that matter. Click here to get your investments moving in the right direction and take advantage of these low rates today: www.carolinainvestmentproperty.com
Friday, October 26, 2007
Third Quarter Charlotte Economic Report
Here is an exciting report just released from the Charlotte Economic Department.
Third Quarter 2007 Charlotte/Mecklenburg New and Expanded Business Report
Since Charlotte was named the second best city for entrepreneurs by Entrepreneur Magazine in September 2006, the city has continued to meet the criteria of its well-deserved ranking. The number of new and expanding firms continues to grow each quarter, many represented by small business owners. As the numbers consistently show, Charlotte's climate for business is versatile, attracting both large and small business alike.
Third quarter numbers were steady, keeping pace with the development Charlotte continues to experience. Employment figures and investment dollars were both on the higher end where growth in firms and square feet stayed constant. A total of 308 new or expanding firms resulted in 4,664 new jobs. Investment totaled $783 million giving way to a total of more than 6.1 million square feet of new space.
The first nine months of 2007 trumped those of 2006 with all figures except investment dollars increasing significantly. Total employment amounted to 11,233 new jobs created by 898 firms. Total investment was over $1.8 billion dollars, adding 19.9 million square feet of new space. This is the highest figure for employment in the last seven years and a record breaker for new square footage at the nine-month mark.
The aforementioned increases can be attributed to several different projects of note this quarter. The Shaw Group Inc. expanded its facility, announcing intentions to hire 1,000 new employees. LPL Financial Services, Inc. also expanded in the Charlotte area with plans to hire 100 new personnel. The most influential project was the expansion of Carolinas HealthCare, most notably the Levine Children's Hospital. Total investment in the expansion project was $440 million adding 1 million new square feet. Not included in the figures this quarter but worthy of mention are the 171,460-square-foot FBI Charlotte Field Office Complex on Microsoft Way and the $50 million 4,000-space parking deck on Wilkinson Blvd being built by the Charlotte/Douglas International Airport.
Third Quarter 2007 Charlotte/Mecklenburg New and Expanded Business Report
Since Charlotte was named the second best city for entrepreneurs by Entrepreneur Magazine in September 2006, the city has continued to meet the criteria of its well-deserved ranking. The number of new and expanding firms continues to grow each quarter, many represented by small business owners. As the numbers consistently show, Charlotte's climate for business is versatile, attracting both large and small business alike.
Third quarter numbers were steady, keeping pace with the development Charlotte continues to experience. Employment figures and investment dollars were both on the higher end where growth in firms and square feet stayed constant. A total of 308 new or expanding firms resulted in 4,664 new jobs. Investment totaled $783 million giving way to a total of more than 6.1 million square feet of new space.
The first nine months of 2007 trumped those of 2006 with all figures except investment dollars increasing significantly. Total employment amounted to 11,233 new jobs created by 898 firms. Total investment was over $1.8 billion dollars, adding 19.9 million square feet of new space. This is the highest figure for employment in the last seven years and a record breaker for new square footage at the nine-month mark.
The aforementioned increases can be attributed to several different projects of note this quarter. The Shaw Group Inc. expanded its facility, announcing intentions to hire 1,000 new employees. LPL Financial Services, Inc. also expanded in the Charlotte area with plans to hire 100 new personnel. The most influential project was the expansion of Carolinas HealthCare, most notably the Levine Children's Hospital. Total investment in the expansion project was $440 million adding 1 million new square feet. Not included in the figures this quarter but worthy of mention are the 171,460-square-foot FBI Charlotte Field Office Complex on Microsoft Way and the $50 million 4,000-space parking deck on Wilkinson Blvd being built by the Charlotte/Douglas International Airport.
Thursday, October 25, 2007
Tenants and How to Manage Them
As many of you venture into acquiring rental properties, you'll be dealing with tenants either directly or indirectly (if you use the services of a property mgmt co). In either case, you'll be an integral part of the tenant-landlord relationship. That's why I thought you'd appreciate the below article. It's an interesting perspective on this business relationship.
Many thanks as always to Ivanna Campbell of my team that found this very insightful article for us to send out to you via our BLOG.
The article was written by an investor and has been been published at many Real Estate Investment Associations/Clubs across the country.
Tenants Are Not Your Customers
As investors, property managers, and landlords, we should understand the legal position of our role as landlords and the role of tenants. In addition to the legal definition part, we’re actually running a business. Our objective with our investment properties is to increase our wealth, cash flow and quality of life. It doesn’t matter if your business is small or large, it’s still a business.
Business Relationship
Here’s your challenge. From a business relationship standpoint, are your tenants customers? Seriously, think about it for a moment. Many landlords and experts say our tenants are our customers. Most retail establishments have slogans “The customer is always right.” Do you really want to adopt a slogan “Tenants are always right”? Hmm... did you hesitate a minute here on this one? Can you etch in stone or really think and believe tenants are always right?
Don’t pull the trigger yet on your mental knee-jerk reaction to these comments. If you operate a retail store, you’re at the mercy of your customers and the customer is always right slogan can apply. You must get them in the door to buy. If you operated a flower shop, would each customer have to fill out an application and sign an agreement? If you operated a stop and rob food mart, would your customers have to fill out an application and sign an agreement to buy beer, smokes, or lottery tickets?
Don’t get me wrong, there are businesses requiring customers to fill out applications and agreements such as rental car companies, loan companies, credit cards, and more. The point to understand is the wide range or scope of the word “customer”. There are cash-paying, no-agreement, always right customers one end all the way to the other extreme of qualifying customers after an application process. As far as the business relationship definition, try this on for size.
Tenants are Not Your Customers.
Try this mindset:
Your Tenants are Employees!
Think of them and treat them as highly valued employees. This should be a good thing. At the national conference mentioned earlier, the landlord who couldn’t accept this idea of tenants being employees vividly displayed his attitude that customers are more valuable than employees. Wow! What a horrible boss and leader.
Thinking of your tenants as your employees may generate a tremendous amount of very intense and emotional opinions. Your range of reaction to this comment is based on your experiences of the word “employee”. It’s great! Use it to your benefit. A very similar concept might be Dr. Stephen Covey’s paradigm shift of the position or role of boss vs. leader. If you are a boss and follow the stereotype role of boss as a dictator and the person who simply announces things to do, we can all grasp the tremendous amount of negative vibes associated with this kind of behavior.
On the other hand, if the “boss” has behavior more in line with a “leader”, the boss becomes more of a role model, a positive, respected, and friendly person. I’m not an expert on all of this stuff, but I’ve attended several courses on this subject and learned how to put these ideas and concepts into my real estate business. We can apply many of the same ideas in our world of real estate investing and dealing with tenants.
Keep an open mind here. Don’t fight or challenge this thought-provoking brainstorming session. On the surface, I’ll admit tenants are customers because we provide a product and/or service for a fee and they pay for it; however, how can you make it better, more profitable, more efficient? Here’s the education challenge. Instead of the typical landlord-tenant relationship, let’s make a relationship change to employer and employee. With your tenants becoming your employees, you become their “leader”. Interesting? Employees should be viewed as a great asset. Good employees enable your business to be profitable and should make your life easier, not harder. Try this exercise. Read the following statements and see if you can substitute the word “tenant” for the word “employee”.
You should have a good relationship with good employees.
Good employees are valuable.
Exceptional employees should be rewarded for outstanding performance.
Employees have responsibilities.
Employees are expected to perform satisfactorily or suffer the consequences for poor performance.
An employee who is a bad apple, can ruin the good apples.
Allowing one employee to remain with poor performance can bring down performance and attitudes of good employees.
Not treating all employees the same is not fair.
Employee appreciation programs promote good performance, loyalty, productivity, and profit.
Employee’s length of service should be a guideline of additional benefits to employees promoting employee retention.
Outstanding or exceptional community service or personal achievements by employees or their immediate family members should be recognized.
Employees with poor performance should be dealt with in a fair, consistent manner, including termination.
Just like above, substitute the word “property manager” for the word “employer” and “tenant” for “employee”.
Employer should be responsive to employees concerns.
Employer should be a leader, not a boss.
Employer has responsibilities along with consequences.
Got the idea? This attitude kind of opens a new attitude in dealing with tenants. Good, effective communication among responsible parties sets the stage for great results. I assume you really want to have the lifestyle of the successful real estate investor as played out on the infomercials on late night TV. Once again, it doesn’t matter if you have one or two investment properties or hundreds, this paradigm shift of thinking of tenants as highly prized valuable employees should really get you some long overdue results as seen on those infomercials.
Don’t keep this focus on tenants only. Spread it around. How about your own help? Office staff and maintenance staff should be treated as highly valuable employees. Your furnace person, electrician, plumber, roofer, lawn service provider, painter, carpet installer, carpenter, and so on. Here is an absolutely powerful and cheap way to reward your employees. Most investors I know have had a job or still have a job today. For those of you who are “unemployable”, go back with me for a moment to the days of punching the clock.
Think of the holiday season. From Thanksgiving to the end of the year, what happened to those folks (including myself) who have jobs in government or the corporate world? Holiday parties and more holiday parties were offered for the unit I worked for along with invitations to holiday parties for all of the other districts. It was almost a competition atmosphere about who could throw the most extravagant holiday party. The bragging rights for the best holiday bash usually went to the police district who had live entertainment, a dance floor, a huge hall, plenty of food, booze, beer, and even limousines! Sounds great doesn’t it?
Switch gears with me here for a moment. While I worked my full time job as a police officer and observed all of the free holiday events for me and my wife, I happened to hit the pause button and reflect on the holiday happenings of those who are valuable to me in my real estate investments. Remember my furnace person, electrician, plumber, garage killer, etc.? Most of these folks have mom and pop operations. (that’s why we use them because they are usually cheaper than the ones who have the full page ads in the yellow pages) What are they doing during the holidays and where are they going? Do they get invitations to any holiday bashes? I guess some do if their spouse has a job somewhere.
Here is what I do every year for my vendors, contractors, resident managers, and those who are an integral part to my real estate business. For the last several years I reserve the banquet room at a nice local Mexican restaurant for the Saturday before Christmas. We mail homemade full page simple invitations to the 8th Annual Vista Holiday Bash from 6pm to 10pm. They can bring their spouse or significant other. This banquet room also has a very small bar and we include an open bar as part of this annual holiday event. We’ve never had any issues of anyone abusing the open bar. In fact, my experience is just the opposite. These folks are not used to the extravagant holiday bashes and are very, very appreciative of this event to benefit them for free. In fact, every year they try to pay the bartender for their drink and are amazed when the bartender waives his hand and says “no charge”.
The restaurant has a “buffet style” of presenting the food on a portable steam table. Nothing fancy, pick and choose what you want and how much. From tortilla chips and hot cheese dip to beans, chicken, beef, and soft flour tortillas along with several vegetables and sauces. This covers almost every food tastes including vegetarians making me politically correct again. Good music, fun, food, and drink set the stage for these folks to network and have a good time. I usually take the floor around 7pm or so and introduce each and every vendor by name along with their product or service and a little light hearted humorous story on each person. This is powerful. I’m fortunate to have a garage killer who has outrageous stories and he usually grows into the center of attention before all is over.
These folks come from all backgrounds and dress accordingly. My electrician starts talking about this annual event in June of each year and said his wife really looks forward to it, even though she’s not much fun (his words, not mine). Okay, now the bad news. This annual event cost approximately $600 total. That’s right, room, food, booze, and tip for the waiter and bartender. Believe it or not, this is a nice restaurant just two blocks from my office.
The rewards and paybacks can’t be measured. Guess where I am on their list of valued customers. I’m willing to bet I am probably at the top of their list. I might not be the biggest, but I am probably one of their best. We’ve had a rash of horrible storms and tornadoes recently and guess where my tree guy put me on the list of next in line? I didn’t even have to call him. He called me asking where to go first! In addition to the great business relationship this kind of event promotes, it makes me feel like a million bucks to see the wonderful feeling of appreciation and value of the skills, trades, and workmanship of these folks. Several vendors told me no one has ever done this before. This is a great way to let those who make your business successful know that you really appreciate them, their work, and relationship. Not only doing a good job for you, they are a walking, talking billboard for your business – by referring tenants, sellers, loan customers, etc.
Work on this one now and start planning for your own event for this holiday season. I’d like to hear how your event works for you. Here is a helpful list of those to consider. Invite your banker(s), furnace person, electrician, plumber, carpenter, lawn service, resident manager(s), office manager, bookkeeper, CPA, attorney(s), siding and gutter person, tree service, pest control, roofer, insurance agent, highly valued real estate agent, auto mechanic, Section 8 inspector(s), helpful service clerk(s) at local hardware store, paint store, supply house, newspaper for your classified ads, your painter, garage killer, trash/junk hauler, and the person who lets you place your dumpster in their rear parking lot for free.
This is just a small list to assist you in identifying those who might be important links in your strong real estate chain. So remember, good employees are a good thing and make your life easier and more profitable.
Many thanks as always to Ivanna Campbell of my team that found this very insightful article for us to send out to you via our BLOG.
The article was written by an investor and has been been published at many Real Estate Investment Associations/Clubs across the country.
Tenants Are Not Your Customers
As investors, property managers, and landlords, we should understand the legal position of our role as landlords and the role of tenants. In addition to the legal definition part, we’re actually running a business. Our objective with our investment properties is to increase our wealth, cash flow and quality of life. It doesn’t matter if your business is small or large, it’s still a business.
Business Relationship
Here’s your challenge. From a business relationship standpoint, are your tenants customers? Seriously, think about it for a moment. Many landlords and experts say our tenants are our customers. Most retail establishments have slogans “The customer is always right.” Do you really want to adopt a slogan “Tenants are always right”? Hmm... did you hesitate a minute here on this one? Can you etch in stone or really think and believe tenants are always right?
Don’t pull the trigger yet on your mental knee-jerk reaction to these comments. If you operate a retail store, you’re at the mercy of your customers and the customer is always right slogan can apply. You must get them in the door to buy. If you operated a flower shop, would each customer have to fill out an application and sign an agreement? If you operated a stop and rob food mart, would your customers have to fill out an application and sign an agreement to buy beer, smokes, or lottery tickets?
Don’t get me wrong, there are businesses requiring customers to fill out applications and agreements such as rental car companies, loan companies, credit cards, and more. The point to understand is the wide range or scope of the word “customer”. There are cash-paying, no-agreement, always right customers one end all the way to the other extreme of qualifying customers after an application process. As far as the business relationship definition, try this on for size.
Tenants are Not Your Customers.
Try this mindset:
Your Tenants are Employees!
Think of them and treat them as highly valued employees. This should be a good thing. At the national conference mentioned earlier, the landlord who couldn’t accept this idea of tenants being employees vividly displayed his attitude that customers are more valuable than employees. Wow! What a horrible boss and leader.
Thinking of your tenants as your employees may generate a tremendous amount of very intense and emotional opinions. Your range of reaction to this comment is based on your experiences of the word “employee”. It’s great! Use it to your benefit. A very similar concept might be Dr. Stephen Covey’s paradigm shift of the position or role of boss vs. leader. If you are a boss and follow the stereotype role of boss as a dictator and the person who simply announces things to do, we can all grasp the tremendous amount of negative vibes associated with this kind of behavior.
On the other hand, if the “boss” has behavior more in line with a “leader”, the boss becomes more of a role model, a positive, respected, and friendly person. I’m not an expert on all of this stuff, but I’ve attended several courses on this subject and learned how to put these ideas and concepts into my real estate business. We can apply many of the same ideas in our world of real estate investing and dealing with tenants.
Keep an open mind here. Don’t fight or challenge this thought-provoking brainstorming session. On the surface, I’ll admit tenants are customers because we provide a product and/or service for a fee and they pay for it; however, how can you make it better, more profitable, more efficient? Here’s the education challenge. Instead of the typical landlord-tenant relationship, let’s make a relationship change to employer and employee. With your tenants becoming your employees, you become their “leader”. Interesting? Employees should be viewed as a great asset. Good employees enable your business to be profitable and should make your life easier, not harder. Try this exercise. Read the following statements and see if you can substitute the word “tenant” for the word “employee”.
You should have a good relationship with good employees.
Good employees are valuable.
Exceptional employees should be rewarded for outstanding performance.
Employees have responsibilities.
Employees are expected to perform satisfactorily or suffer the consequences for poor performance.
An employee who is a bad apple, can ruin the good apples.
Allowing one employee to remain with poor performance can bring down performance and attitudes of good employees.
Not treating all employees the same is not fair.
Employee appreciation programs promote good performance, loyalty, productivity, and profit.
Employee’s length of service should be a guideline of additional benefits to employees promoting employee retention.
Outstanding or exceptional community service or personal achievements by employees or their immediate family members should be recognized.
Employees with poor performance should be dealt with in a fair, consistent manner, including termination.
Just like above, substitute the word “property manager” for the word “employer” and “tenant” for “employee”.
Employer should be responsive to employees concerns.
Employer should be a leader, not a boss.
Employer has responsibilities along with consequences.
Got the idea? This attitude kind of opens a new attitude in dealing with tenants. Good, effective communication among responsible parties sets the stage for great results. I assume you really want to have the lifestyle of the successful real estate investor as played out on the infomercials on late night TV. Once again, it doesn’t matter if you have one or two investment properties or hundreds, this paradigm shift of thinking of tenants as highly prized valuable employees should really get you some long overdue results as seen on those infomercials.
Don’t keep this focus on tenants only. Spread it around. How about your own help? Office staff and maintenance staff should be treated as highly valuable employees. Your furnace person, electrician, plumber, roofer, lawn service provider, painter, carpet installer, carpenter, and so on. Here is an absolutely powerful and cheap way to reward your employees. Most investors I know have had a job or still have a job today. For those of you who are “unemployable”, go back with me for a moment to the days of punching the clock.
Think of the holiday season. From Thanksgiving to the end of the year, what happened to those folks (including myself) who have jobs in government or the corporate world? Holiday parties and more holiday parties were offered for the unit I worked for along with invitations to holiday parties for all of the other districts. It was almost a competition atmosphere about who could throw the most extravagant holiday party. The bragging rights for the best holiday bash usually went to the police district who had live entertainment, a dance floor, a huge hall, plenty of food, booze, beer, and even limousines! Sounds great doesn’t it?
Switch gears with me here for a moment. While I worked my full time job as a police officer and observed all of the free holiday events for me and my wife, I happened to hit the pause button and reflect on the holiday happenings of those who are valuable to me in my real estate investments. Remember my furnace person, electrician, plumber, garage killer, etc.? Most of these folks have mom and pop operations. (that’s why we use them because they are usually cheaper than the ones who have the full page ads in the yellow pages) What are they doing during the holidays and where are they going? Do they get invitations to any holiday bashes? I guess some do if their spouse has a job somewhere.
Here is what I do every year for my vendors, contractors, resident managers, and those who are an integral part to my real estate business. For the last several years I reserve the banquet room at a nice local Mexican restaurant for the Saturday before Christmas. We mail homemade full page simple invitations to the 8th Annual Vista Holiday Bash from 6pm to 10pm. They can bring their spouse or significant other. This banquet room also has a very small bar and we include an open bar as part of this annual holiday event. We’ve never had any issues of anyone abusing the open bar. In fact, my experience is just the opposite. These folks are not used to the extravagant holiday bashes and are very, very appreciative of this event to benefit them for free. In fact, every year they try to pay the bartender for their drink and are amazed when the bartender waives his hand and says “no charge”.
The restaurant has a “buffet style” of presenting the food on a portable steam table. Nothing fancy, pick and choose what you want and how much. From tortilla chips and hot cheese dip to beans, chicken, beef, and soft flour tortillas along with several vegetables and sauces. This covers almost every food tastes including vegetarians making me politically correct again. Good music, fun, food, and drink set the stage for these folks to network and have a good time. I usually take the floor around 7pm or so and introduce each and every vendor by name along with their product or service and a little light hearted humorous story on each person. This is powerful. I’m fortunate to have a garage killer who has outrageous stories and he usually grows into the center of attention before all is over.
These folks come from all backgrounds and dress accordingly. My electrician starts talking about this annual event in June of each year and said his wife really looks forward to it, even though she’s not much fun (his words, not mine). Okay, now the bad news. This annual event cost approximately $600 total. That’s right, room, food, booze, and tip for the waiter and bartender. Believe it or not, this is a nice restaurant just two blocks from my office.
The rewards and paybacks can’t be measured. Guess where I am on their list of valued customers. I’m willing to bet I am probably at the top of their list. I might not be the biggest, but I am probably one of their best. We’ve had a rash of horrible storms and tornadoes recently and guess where my tree guy put me on the list of next in line? I didn’t even have to call him. He called me asking where to go first! In addition to the great business relationship this kind of event promotes, it makes me feel like a million bucks to see the wonderful feeling of appreciation and value of the skills, trades, and workmanship of these folks. Several vendors told me no one has ever done this before. This is a great way to let those who make your business successful know that you really appreciate them, their work, and relationship. Not only doing a good job for you, they are a walking, talking billboard for your business – by referring tenants, sellers, loan customers, etc.
Work on this one now and start planning for your own event for this holiday season. I’d like to hear how your event works for you. Here is a helpful list of those to consider. Invite your banker(s), furnace person, electrician, plumber, carpenter, lawn service, resident manager(s), office manager, bookkeeper, CPA, attorney(s), siding and gutter person, tree service, pest control, roofer, insurance agent, highly valued real estate agent, auto mechanic, Section 8 inspector(s), helpful service clerk(s) at local hardware store, paint store, supply house, newspaper for your classified ads, your painter, garage killer, trash/junk hauler, and the person who lets you place your dumpster in their rear parking lot for free.
This is just a small list to assist you in identifying those who might be important links in your strong real estate chain. So remember, good employees are a good thing and make your life easier and more profitable.
Saturday, October 20, 2007
Concord and Kannapolis Set to Explode in Growth...Value
Wow, Kannapolis and Concord, hold on to your seats....and home values! I had the fortune of attending the Bio Tech Conference held at the University of North Carolina at Charlotte and was able to hear the top Civic Leaders and Scientists and Business Professionals from around the Region and some of the US speak about the growing Bio Tech Center being built by Mr. Murdock in Kannapolis. This complex is being hailed as the "Cathedral of Science" and is a testament to what can be accomplished when the Region and State back a project 100% mixed with the determination and passion of a self made Billionaire. I attended this meeting with a good friend: Taylor Barden with Morgan Stanley and we were amazed at the incredible development that is occurring here in our region. Here are just a few highlights:
Here is the web site, http://www.ncresearchcampus.net/. It is a massive place, expected to employ ~5000 research, scientist, doctors (the majority of these initial jobs will be at a Doctorate level....and a Doctorate PAY LEVEL which is excellent news for this portion of the market and obviously housing values for our investors and ~30,000 other jobs that will be all different levels of skill/pay and many of these new jobs will be a tremendous boost to an already healthy rental market. Kannapolis now is just a town of 40,000. David Murdoch is spending $1B plus adding another $100M to start a Biotech Venture Fund. It is simply incredible to hear about the different Universities taking place and their very amibitious plans for different types of projects including creating/designing better foods/crops, cellular research, and many more.
Here's what's planned;
• Kannapolis government center
• Town Hall
• A municipal library that will provide interconnectivity among the major research universities throughout the state
• A 350-acre mixed use development in downtown Kannapolis – 25 miles north of Charlotte
• An $80 million, state-of-the-art, 311,000-square-foot Core Laboratory now under construction and estimated to be complete by December 2007
• 1 million square feet of office and lab space for lease
• 350,000 square feet of retail and commercial space for lease
• Experimental greenhouse facilities available for lease
• Over 700 residences, including townhomes, apartments and single-family homes
• A golf course designed by pro golfer Davis Love located less than 3 miles from the campus
• A 1,000 seat auditorium
• A 125-room hotel
• A world-class wellness center
• A retail area that will include shops, restaurants and a movie theater
This is GREAT news for our Region and GREAT news for investors as this is yet another major drawing point for outside business, economic drivers, and overall improvement of our region.
Here is the web site, http://www.ncresearchcampus.net/. It is a massive place, expected to employ ~5000 research, scientist, doctors (the majority of these initial jobs will be at a Doctorate level....and a Doctorate PAY LEVEL which is excellent news for this portion of the market and obviously housing values for our investors and ~30,000 other jobs that will be all different levels of skill/pay and many of these new jobs will be a tremendous boost to an already healthy rental market. Kannapolis now is just a town of 40,000. David Murdoch is spending $1B plus adding another $100M to start a Biotech Venture Fund. It is simply incredible to hear about the different Universities taking place and their very amibitious plans for different types of projects including creating/designing better foods/crops, cellular research, and many more.
Here's what's planned;
• Kannapolis government center
• Town Hall
• A municipal library that will provide interconnectivity among the major research universities throughout the state
• A 350-acre mixed use development in downtown Kannapolis – 25 miles north of Charlotte
• An $80 million, state-of-the-art, 311,000-square-foot Core Laboratory now under construction and estimated to be complete by December 2007
• 1 million square feet of office and lab space for lease
• 350,000 square feet of retail and commercial space for lease
• Experimental greenhouse facilities available for lease
• Over 700 residences, including townhomes, apartments and single-family homes
• A golf course designed by pro golfer Davis Love located less than 3 miles from the campus
• A 1,000 seat auditorium
• A 125-room hotel
• A world-class wellness center
• A retail area that will include shops, restaurants and a movie theater
This is GREAT news for our Region and GREAT news for investors as this is yet another major drawing point for outside business, economic drivers, and overall improvement of our region.
Thursday, October 11, 2007
Second Half of Why to Invest In Real Estate
As promised, here is "the rest of the story"...
3. Appreciation
The third main benefit from owning rental property is appreciation. Not all debt is bad debt. In fact, real estate debt is great because the asset (property) is appreciating, or gaining in value, while you own it. Your property may not appreciate at 10%, or even 5% every year, but over time real estate has historically been one of the surest ways to generate wealth. There is no reason to believe that conventional wisdom will change in the Charlotte market. This is the area where most real estate investors build their long-term wealth. They buy the properties, and then hold them, allowing them to gain in value as they do.
Another quick example: say you buy two rental homes totaling $400,000. Now let’s say those two homes appreciate 5% over 10 years. You now have homes that are worth $651,557.85. You have made $251,557 in equity by simply buying the houses and holding onto them.
4. Paying down debt over time.
The last benefit from owning rental property is achieved through the paying down of the principal balance on your mortgages. The rent you receive from your tenants will go towards paying those mortgages. Most of that money goes toward interest the bank charges you, however, some will go toward paying down the debt you owe. Over time you will build equity through paying down the loans as well.
However, you can see with the previous example at #3, if you merely pay interest only on your loans, you will still gain considerable equity. In fact, the majority of your equity you build will be through appreciation, not through paying down the loan. For this reason, we are firm believers in doing interest only types of loans. It allows you to cash flow more, so you are putting more money in your pocket now. What’s more, the home appreciates at the same rate regardless of if you are paying $1,000 a month, interest only, or $1,800 a month, principal and interest. Cash flow is a wonderful thing that will allow you to continue buying properties.
What kind of real estate investing?
There are countless people out there who are looking for that one in a million, get-rich-quick type of property. They want to find a property at $80,000 below market value. As a result, they make multiple offers on multiple properties. The end result: no properties purchased, a mountain of frustration, and of course, no benefits gained.
While we are always searching for properties that are priced below market value to put you into a good equity position from day one, some great investment properties are available in the Charlotte market at or very near true market value.
As investors, we need to leave ourselves open to the true benefits of owning investment property: cash flow, depreciation, appreciation, and principal pay down. The investor that focuses only on equity purchases will miss out on MANY fantastic investment properties. If a homes true market value is $175,000, and it is priced at or near that but it is in a great area for future appreciation, let’s focus on the financing to figure out how we can get that home cash flowing for you. Forget the get rich quick approach. It simply isn’t the best way to build substantial wealth long term.
FIX AND FLIP?
This is an area of real estate that has a huge potential. But first you should focus on long term wealth generation through buying and holding….building your investment portfolio and long term net worth.
The bottom line is if you invest in real estate, not only are you paying less tax, you’re building your net worth, and giving yourself and your family more financial freedom. As an active investor, you make money in a passive way. Go on vacation with your family, you’re still making money. Take the night off and see a movie, you’re still making money. Investing in real estate puts your money to work for you, by creating revenue streams and building wealth for the future.
Remember, today’s first time investors are the millionaires of tomorrow!
For more information: ClickHere
3. Appreciation
The third main benefit from owning rental property is appreciation. Not all debt is bad debt. In fact, real estate debt is great because the asset (property) is appreciating, or gaining in value, while you own it. Your property may not appreciate at 10%, or even 5% every year, but over time real estate has historically been one of the surest ways to generate wealth. There is no reason to believe that conventional wisdom will change in the Charlotte market. This is the area where most real estate investors build their long-term wealth. They buy the properties, and then hold them, allowing them to gain in value as they do.
Another quick example: say you buy two rental homes totaling $400,000. Now let’s say those two homes appreciate 5% over 10 years. You now have homes that are worth $651,557.85. You have made $251,557 in equity by simply buying the houses and holding onto them.
4. Paying down debt over time.
The last benefit from owning rental property is achieved through the paying down of the principal balance on your mortgages. The rent you receive from your tenants will go towards paying those mortgages. Most of that money goes toward interest the bank charges you, however, some will go toward paying down the debt you owe. Over time you will build equity through paying down the loans as well.
However, you can see with the previous example at #3, if you merely pay interest only on your loans, you will still gain considerable equity. In fact, the majority of your equity you build will be through appreciation, not through paying down the loan. For this reason, we are firm believers in doing interest only types of loans. It allows you to cash flow more, so you are putting more money in your pocket now. What’s more, the home appreciates at the same rate regardless of if you are paying $1,000 a month, interest only, or $1,800 a month, principal and interest. Cash flow is a wonderful thing that will allow you to continue buying properties.
What kind of real estate investing?
There are countless people out there who are looking for that one in a million, get-rich-quick type of property. They want to find a property at $80,000 below market value. As a result, they make multiple offers on multiple properties. The end result: no properties purchased, a mountain of frustration, and of course, no benefits gained.
While we are always searching for properties that are priced below market value to put you into a good equity position from day one, some great investment properties are available in the Charlotte market at or very near true market value.
As investors, we need to leave ourselves open to the true benefits of owning investment property: cash flow, depreciation, appreciation, and principal pay down. The investor that focuses only on equity purchases will miss out on MANY fantastic investment properties. If a homes true market value is $175,000, and it is priced at or near that but it is in a great area for future appreciation, let’s focus on the financing to figure out how we can get that home cash flowing for you. Forget the get rich quick approach. It simply isn’t the best way to build substantial wealth long term.
FIX AND FLIP?
This is an area of real estate that has a huge potential. But first you should focus on long term wealth generation through buying and holding….building your investment portfolio and long term net worth.
The bottom line is if you invest in real estate, not only are you paying less tax, you’re building your net worth, and giving yourself and your family more financial freedom. As an active investor, you make money in a passive way. Go on vacation with your family, you’re still making money. Take the night off and see a movie, you’re still making money. Investing in real estate puts your money to work for you, by creating revenue streams and building wealth for the future.
Remember, today’s first time investors are the millionaires of tomorrow!
For more information: ClickHere
Wednesday, October 10, 2007
Why is buying rental property such a great investment?
Why is buying rental property such a great investment?
There are four primary reasons that real estate is a great investment.
1. Cash Flow
Cash flow is defined as the money that you have left over after you have received rent from a tenant and paid mortgages, taxes, and insurance. The tenant pays you rent, and that money pays off these items, known collectively as PITI (Principal, Interest, Taxes, and Insurance). Whatever is left over goes into your pocket……that is cash flow.
2. Depreciation
Though many people buy rental property for cash flow, the real benefits that will build your net worth lie elsewhere. The second main benefit of buying rental property is the tax shelter that it creates for you. The IRS allows you to depreciate investment property over 27.5 years. In other words, you can take this depreciation expense against your active income from your job.
For example:Let’s say that you buy a $100,000 rental property. The IRS lets you depreciate the building, not the land. Generally speaking, 85% of the purchase price is used to determine the building’s value. In this example, the IRS lets you depreciate $85,000 (the house) over 27.5 years. This is equal to $3,090 per year that you can take as a depreciation expense against your active income. If you make $80,000 in income from your job, you can subtract this $3,090, which gives you $76,910. This is the income that you pay tax on, $76,910, not $80,000 (which you actually made.) You can see how by buying this one rental property, you have reduced your taxable income significantly. If you buy two houses of the same value, this number doubles, three, triples, etc.
We hope you're having a great week and appreciate your support. Many thanks to Ivanna for "breaking down" everything for us in this blog....stay tuned for the second half of this blog tomorrow.
There are four primary reasons that real estate is a great investment.
1. Cash Flow
Cash flow is defined as the money that you have left over after you have received rent from a tenant and paid mortgages, taxes, and insurance. The tenant pays you rent, and that money pays off these items, known collectively as PITI (Principal, Interest, Taxes, and Insurance). Whatever is left over goes into your pocket……that is cash flow.
2. Depreciation
Though many people buy rental property for cash flow, the real benefits that will build your net worth lie elsewhere. The second main benefit of buying rental property is the tax shelter that it creates for you. The IRS allows you to depreciate investment property over 27.5 years. In other words, you can take this depreciation expense against your active income from your job.
For example:Let’s say that you buy a $100,000 rental property. The IRS lets you depreciate the building, not the land. Generally speaking, 85% of the purchase price is used to determine the building’s value. In this example, the IRS lets you depreciate $85,000 (the house) over 27.5 years. This is equal to $3,090 per year that you can take as a depreciation expense against your active income. If you make $80,000 in income from your job, you can subtract this $3,090, which gives you $76,910. This is the income that you pay tax on, $76,910, not $80,000 (which you actually made.) You can see how by buying this one rental property, you have reduced your taxable income significantly. If you buy two houses of the same value, this number doubles, three, triples, etc.
We hope you're having a great week and appreciate your support. Many thanks to Ivanna for "breaking down" everything for us in this blog....stay tuned for the second half of this blog tomorrow.
Saturday, October 6, 2007
Some Wholesaling Tips
Some advice on wholesaling. Have you ever driven down the street and seen all of those "we buy houses" or "1800BuyKwik" signs on the side of the road? Attached to telephone poles and stuck on stakes in some front yards? Well, often wholesalers may consider those the "competition"....well stop and think: many of those people want to BUY properties and so they may also be BUYERS for your investments, NOT competition. Keep their numbers and call them and see what their buying criteris is and keep a record of it for your next investment that you come across and need to find a buyer for.
What about driving through town and seeing a property with a "Sheriff's Eviction" sign on the front door AND a "For Rent" sign in the front yard? You might think oh well, it's for rent and no big deal, well it could be eviction #3 in the last year and these owners are tied of being landlords and this might be the opportunity you have been looking for to secure a property at a great option price.
Best Investing to you!
What about driving through town and seeing a property with a "Sheriff's Eviction" sign on the front door AND a "For Rent" sign in the front yard? You might think oh well, it's for rent and no big deal, well it could be eviction #3 in the last year and these owners are tied of being landlords and this might be the opportunity you have been looking for to secure a property at a great option price.
Best Investing to you!
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