Archive for June, 2010

Just in time for Independence Day, a real estate consumer’s Declaration of Independence.

My friend and colleague Al Lorenz, who sells real estate and develops real property in Lake Chelan Washington wrote and posted this Real Estate Declaration of Independence.

Al and I are in complete agreement about these principles, so I’m delighted to share them with you:

Real Estate Declaration of Independence

We, the people who buy and sell real estate, hold these truths to be obvious:

  • We the people believe that information on real estate for sale should be readily accessible without surrendering our private information. We reject having to register on a web site in order to view listings in an area. We value our time and will contact a real estate professional when we are good and ready for their services.
  • We the people reject all policies of the National Association of Realtors that are not in the best interest of the real estate buying and selling public. Limiting our access to information, restricting our ability to a free and open market through regulation and limiting our market choices are all examples of policies we reject that are designed to line Realtors pockets at the expense of the public.
  • We the people reject “Dual Agency,” where a real estate agent has an inherent conflict of interest with his agency and fiduciary duties by attempting to represent both the buyer and seller in order to earn a larger commission on our transaction. If the agent is truly delivering value, both parties of a transaction have an equal right to that value without a conflict of interest and each party deserves their own agent in the transaction.
  • We the people reject the practice of real estate agents trying to “Buy the Listing” by telling a potential seller an above market price in an attempt to secure a listing. This practice costs sellers time and money while their home sits on the market as the agent waits for the seller to cut the price to where it should have been to start.
  • We the people reject the practice of real estate MLS systems that limit a home seller’s exposure to potential buyers in an attempt to control access to a market. A listing agent’s responsibility is to market a property to the best of their ability and limiting the exposure of our home costs us money.

We the people are independent in a country that still allows us to make market choices. We the people demand better service and will exercise our freedom of choice and only choose Real Estate Professionals who deliver better value.

In Arizona, a real estate licensee has a fiduciary duty to his client. That means that, when we decide to work together, I am obliged to put your interests ahead of all others, including my own. Too often, and much too deservedly, Realtors are perceived as being self-dealing, self-serving and self-absorbed. If you keep this Real Estate Declaration of Independence in mind, you’ll be better prepared to avoid that kind of agent.

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My kind of rental home investment in Avondale’s Coldwater Springs

I’ve been watching this house for months. I wanted to snag it for one of my investors when it was a short sale, but the bank foreclosed on it before I could get an offer in play.

I took pictures of the home when I was in it then. Since it was relisted as a lender-owned home, I’ve been back in to see how it’s holding up.

The home is the Lavender floorplan by Fulton Homes, three bedrooms and two baths in 1524 square feet. It’s a greatroom floorplan, so the common spaces are abundant. There is no space wasted on hallways, and the home feels open and bright everywhere.

Even better, it’s in Coldwater Springs, a subdivision I have loved since it was built. The Coldwater Springs Golf Course threads through the community, and the Collier School, grades K-8, is right in the middle of everything — a short bike trip from this home.

The home is listed at $87,500. Handyman Mark Deermer estimates that it will take around $8,000 to make the property rent-ready. Total entry cost would be $95,500. With anticipated rents of at least $950 a month, that puts this home at a Gross Rent Multiplier of 100 months, right where I want to be.

And that’s just one house. In the weeks since the tax-credit lapsed, inventories have come back strong. These kinds of houses — premium homes attractive to premium tenants — are being offered at breathtaking prices, with plenty of room for investors to show ample positive cash-flow. Meanwhile, lender Connie Moss can do investor loans at 5.75% or better with 25% down.

I talk to a lot of folks who say they want to invest in rental homes in Metropolitan Phoenix. Many follow through, but some people seem to sit on the sidelines, waiting for someone to pull them along. This I can’t do. I am very good at identifying properties that will rent profitably and stay rented. Mark Deermer can refurbish them so they are irresistible to tenants. But if you want to get in on a house like this, you need to assert yourself.

Shoot me an email or phone me at 602-740-7531 and I’ll help you line up a rental home like this one.

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