Investor Perspective :: FSBO's on the bleeding edge - 12/31/06 11:21 AM
Another post from an investor's perspective. 
The lexicon of marketing jagon came up with the "leading edge vs. bleeding edge" concept a few years ago.  The first guys out of the gate often get chewed up, while the fast-followers hop in once the market has been primed.  Anyone out there remember the Sony Betamax? 
In my area, current FSBO's are bleeding edge. 
When I drive by an FSBO I stop and write down the number.  Why?  Because it's unlikely that the house is in the MLS system.  So it doesn't matter if the seller is the best salesman/negotiator in the world, he's … (3 comments)

Real Estate Agents :: Five Myths about Investing in Real Estate - 12/27/06 11:08 PM
Real estate agents who deal with investors will encounter clients with all sorts of ideas - some of the ill-informed.  Here are a few that I've run into.
Myth #1:  You have to be a slave to your properties.
I find it interesting that one finds so many references in the popular press about the horrors of being a landlord.  Consider this blurb that appeared recently on the MSN finance page:   "...Just when you thought being a property magnate was going to be glamorous, that late night phone call from your tenant saying they have left the bath running and flooded the place … (2 comments)

Seasons Greetings :: from EquityScout.com - 12/25/06 06:27 PM
Happy holidays from our family to yours. 
Real estate agents are our livelihood at EquityScout.com.  I have not been a member of the ActiveRain community for long, but in the short time I've been around I've gotten a lot out of interacting with the professionals on this forum. 
I hope to see the posts slow down for a few days as we all enjoy the holiday season.  Looking forward to more good dialogue in 2007.
Regards,
Christopher Smith
EquityScout.com
 
 
 
... 
… (6 comments)

Real Estate Agents :: When should you train your customers, and when should they train you? - 12/23/06 04:53 PM

Many of the concepts of business are universal.  Fields as different as Real Estate and Medicine have more in common that you might think at first glance.  Take it from me - I have a foot in both camps. 
My wife is a physician - an obstetrician/gynecologyst - and over the past three years she's built a private practice in Katy Texas, a suburb of Houston.  I've spent a lot of time assisting her on the business side of things, and that's taught me a lot about the medical business: insurance, HMO's, hospital administration, and a thousand other topics. 
Medicine is … (18 comments)

Cooling markets :: A soft landing ahead...? - 12/20/06 11:18 PM
Global Insight today released it's analysis of data released by the Office of Federal Housing Enterprise Oversight (OFHEO), which covers both regional and national trends in residential real estate pricing. 
The main conclusion of the study is that the overall level of valuation is starting to ease nationwide.  Last quarter 66 metro areas were deemed "extremely overvalued", whereas this quarter only 63 are.  This largely is due to price declines in some high value markets - 76 of the 317 metro areas surveyed experienced price declines during the quarter.  Nationwide, the average rate of appreciation for the quarter was 0.86% - … (0 comments)

For Real Estate Agents :: 5 Types of Investors, and What to Do About It - 12/20/06 12:41 PM
This is the third in a four part series for Real Estate Agents on Dealing with Real Estate Investors.  In previous EquityScout posts I investigated what investors are looking for in a real estate agent and why real estate agents should care about investors.  Here's part three:  what kind of investors are out there and how do I deal with them?
Unfortunately, in my book there are six types of investors out there, and I like to work with even "fives" (has a nicer ring to it).  So I'm going to take the first type of investor out of the equation.  This … (14 comments)

Tag, I'm it...the meme game - 12/17/06 09:41 PM
Ok I got tagged in the meme-go-round.  If you are reading this chances are that you know what this means by now, but if not you can read the original post . 
So...for your reading enjoyment...five things you didn't know about me.
1)  I was a computer nerd early on, starting out with a TRS 80 and a Commodore Vic 20 (with tape drive!) when I was in middle school.  If you look at this photo and get a warm wave of nostalgia then you and I would get along. 
2)  I was an All American boxer in college and made it … (1 comments)

Real Estate Agents :: Why you should care about investors - 12/17/06 01:33 PM
Not too long ago I wrote a Five Tips for Realtors® post on What Real Estate Investors Look for in a Realtor.  This is a follow-on to those ideas, and I'll try to address the question of why should realtors care about what real estate investors look for in a realtor.  Or - more diplomatically put - why real estate investors make good customers...
Take these with a grain of salt - I'm an investor myself - but here are my thoughts:
1)  Real estate investors make up a niche market that needs a specialized set of skills from a real estate agent.  … (29 comments)

Avoiding Investor Burnout :: Part II - 12/15/06 10:27 PM
Avoiding burnout in investing. As promised here's the first of four principles I wanted to discuss:
Principle #1: Look before you leapMany real estate investing courses are just personal motivation seminars with a thin veneer of real estate education. These courses may serve some use if they cause you to take charge of your financial future, but you don't want to go charging into battle without the right tools. 
In the example I offered the other day the seller's primary mistake was that he underestimated the amount of effort that it would take to remodel the two properties. He nearly had the … (0 comments)

Avoiding investor burnout - 12/15/06 10:21 PM
According to census figures there are almost nine million single family rental property units in the United States, and more than twice as many units in multi-family units. The vast majority of these are owned by individual owners (as opposed to corporations). People like you. 
Another interesting figure is that of these owners, almost a third report that they would not buy property again.  Real estate is one of the most solid paths to building a sound economic future, but it's not for everyone. So - why so many burned-out landlords?  Well there are a lot of answers to that question, … (0 comments)

Real Estate Investment Software :: What's new at EquityScout.com - 12/13/06 09:24 PM
I've gotten a lot of comments from users of our Real Estate Investmetn Software, and our programmers have made the EquityScout real estate evaluation tool easier to use and more intuitive than ever.
EquityScout's Results Dashboard presents gives you a graphical, easy-to-understand view of your investment's potential financial performance. 
View Rate of Return to get a quick idea of the viability of the investment.  Does the return justify the risk? EquityScout categorizes the assumptions that may be contributing to a high or a low rate of return, and flags assumptions that may be out of line with the market. And as always, … (1 comments)

Another non-traditional player jumps into the MLS game - 12/12/06 04:39 PM
And not just any player.  Google has joined Zillow.com in the real estate fray. 
Lots of news recently on non-traditional players in the Real Estate Industry moving into waters that traditionally has been jealously guarded by the National Association of Realtors.  From the if you can't beat ‘em, join ‘em file: Google has just announced a partnership with the Houston Association of Realtors (HAR) to upload Multiple Listing Service (MLS) data for the Houston Area.  HAR runs http://www.har.com/, the excellent online database and one that I have some personal experience with as a Houston based real estate investor.  This is a … (3 comments)

Using Leverage - 12/11/06 01:38 PM
This is written primarily from the viewpoint of a real estate investor, but applies in certain cases to primary residences as well.  Note that your risk appetite/motivations for your primary residence are different from an investment property - so these concepts have to be applied appropriately.   Debt is Good. Sometimes:
A little debt is better than a lot of debt, right?  Well not always.  Debt does have a fundamental role in real estate investing, and having more of it can be a good thing. Building equity via property appreciation and watching your debt levels gradually decrease via principal payments can be comforting … (0 comments)

What Real Estate Investors look for in an agent... - 12/10/06 01:13 PM
I've dealt with real estate agents with both my "homebuyer hat" on and my "real estate investor" hat on. Each brings with it a unique set of expectations. 
Real estate investors represent a special group of clients for agents.  As the field gets crowed both with agents (10,000 new Realtors® every year!) and technological innovations, finding a niche will be important for agents who want to thrive as the market evolves. 
Following are five things that I, as an investor, tend to value in an agent.  This is just my opinion, but it's informed by feedback from lots of other investors.
1)  … (17 comments)

High value markets continue their run... - 12/10/06 10:57 AM
...but some are starting to cool. 
Recently Global Insight and the National City Corporation teamed up to publish a survey of regional housing market valuations.  Of the 317 metro areas evaluated:
219 (69%) showed a slowdown in appreciation over the past year (21%) showed outright declines in property values 79 (40%) qualified as extremely overvalued.  See the full study here.
The most overvalued metro areas were clustered on the west and east coasts with California and Florida dominating the top twenty.  Naples FL had the highest overvaluation at 101.5%, followed by Bend OR at 89.3% and Salinas CA at 79.4%.
At the other end … (5 comments)

Investing Guru of the week... - 12/10/06 10:43 AM
I'm signed up on a lot of real estate mailing lists - a good way to stay abreast of trends going on in the real estate community.  Every now and then a real beauty pops up in my mailbox - one that I have to memorialize in some way before I hit the delete key.         
Check out these quotes from a note I got today from a guy hosting real estate teleseminars (emphasis mine):      
-----------------
 "Hi Christopher, I want to make sure you get one of the few remaining open spots for my free upcoming teleseminar...
...If you for some reason feel … (2 comments)

Agent / Investors...? - 12/09/06 09:07 AM
 I'm interested in hearing from Real Estate Agents who are active investors.  Or, perhaps, those who have consciously decided not to be (conflict of interest, perhaps?)   
I have an agent that I know and trust and who I work with here in Houston.  She owns at least one investment property, but I wouldn't call her an active real estate investor.  I stick with her because of trust and our personal relationship (but increasingly I do things on my own when it's beneficial to do so.)
I notice that I don't seem to run into a lot of agents who are active real estate … (6 comments)

It was never a question of "if" but "when" - 12/07/06 09:59 AM

The new 300 pound gorilla, Zillow.com, has taken the logical next step.  Now you can go and post your home for free and get exposure to Zillow.com's massive customer base.  Interesting tag line:  It's FREE and anyone can do it.  Translation: you don't have to be a licensed real estate agent. 
Clearly, Zillow still has its problems, and the accuracy of its valuation algorithm has attracted lots of critics.  But one thing can't be denied: these guys have a lot of momentum and they know how to keep the public's ear. 
I saw a New Yorker cartoon the other day.  It … (39 comments)

Property Management schemes: buyer beware - 12/07/06 12:18 AM
More bad news from the ethics in real estate file...
WCNC in Charlotte reports on a local company that's being hammered with complaints from home buyers and sellers who claim they've been victimized by the company's unscrupulous practices. 
The victims allege that Charlotte Home Solutions defrauded customers in a rent-to-own scheme gone bad.  The ringleader - a guy called Bill Keaton. 
Evidently the scheme worked like this.  Keaton managed properties for homeowners, promising to find rent-to-own tenants and handle mortgage payments & taxes.  Owners were expecting their properties to be cared for, and tenants were expecting their rent payments to be going … (2 comments)

NYTimes.com :: A Slam Dunk in Houston Real Estate - 12/07/06 12:13 AM
Seems that we're always reading a story about some performer or athlete that has made millions of dollars over the course of his career only to squander it all.  Mike Tyson springs to mind. 
Now consider Hakeem Olajuwon. 
Olajuwon, a Nigerian émigré, played a long career with the NBA, leading his team to two championships in the process. 
And in the 10 years since hanging up his basketball shoes he's managed to earn as much money in real estate as he did during his 17 years with the NBA.  Olajuwon's strategy has been described as "unorthodox yet disciplined."  But no one can … (0 comments)

Is your investment/listing a teardown candidate? - 12/07/06 12:10 AM
Real estate investors who have built equity in investment properties in high value areas might want to consider teardown options before selling their property.  A builder might be your best buyer.
Teardowns.com links sellers, buyers and builders.  There are a few rules of thumb.  Upscale new construction can go for $200/square foot or more, meaning that a 3,000 square foot house would go for around $600,000.  Factoring in land and other expenses properties in the neighborhood would generally need to sell for north of $1,000,000 for the strategy to work. 
This narrows down the candidate list to certain regional areas, but in … (0 comments)

Comparing Mortgage Options... - 12/06/06 06:45 AM
A new article is posted in the Media Room that compares various mortgage options: fixed rate, interest only, balloons, and more. This is a handy reference for investors weighing the pros and cons of the various options being offered by banks and brokers. 
Check the Media Page regularly to see what's new. 
… (0 comments)

Option ARMs in the News - 12/06/06 06:44 AM
BusinessWeek recently ran an interesting article on Option ARM mortgages (also known as pick-a-payment, negative amortization mortgages, NegAms, deferred interest mortgages, and various other aliases).  There are variations on the theme, but these loans all offer flexibility, ultra-low initial payments, and lots of risk to go along with it.  Each month the borrower can select from a variety of payment options, but the lowest payment amounts are not enough to cover the interest on the loan - meaning - the outstanding principal actually goes up. 
Now with rates rising and property prices flattening in many parts of the country many homeowners … (0 comments)

Ethics in Real Estate Investing - 12/06/06 01:21 AM
From time to time I publish articles in magazines and journals on investing and markets.  Recently I had an article in the Houston Business Journal on Ethics and Real Estate Investing. 
This won't surprise anyone, but ours can be a slimy business.  But in my book, the good news is that good ethics isn't just morally right - it's also good business.  I can't reprint the article here (yeah, I wrote it - but once they publish it I don't own it anymore) but the general idea is that when it comes to real estate investing ethics should be approached from … (0 comments)

Original EquityScout.com Press Release - 12/06/06 01:14 AM
This was the original press released that EquityScout.com published upon launching the website.  You can see it here. 
ONLINE REAL ESTATE INVESTMENT SOFTWARE PROVIDES INVESTORS WITH TOOLS TO MAKE SMARTER, MORE PROFITABLE DECISIONS HOUSTON - Paladin Equity LLC announced the launch of EquityScout.com, a software provider that gives real estate investors at any level the tools they need to make smarter, more profitable decisions.   EquityScout.com's subscription-based online software enables investors to evaluate the potential risks and rewards of real estate investment opportunities.  The user enters assumptions - such as estimated property appreciation rates, financing options and property expenses - and the software … (1 comments)

Young Investor's Guide to Real Estate - 12/06/06 01:09 AM
I originally posted this article on EquityScout.com as a piece about Young Real Estate Investors... 
According to the National Association of Realtors, 39 percent of all homes bought last year where purchased by people aged 18 to 34.  It's widely understood that homeownership is the single most important element for building a sound financial foundation, so the proliferation of young buyers is an indication that more Americans taking responsibility for their financial future at an early age. 
Most of these homes were primary residences, but young buyers are making inroads into the world of real estate investing as well.  Real estate investment … (3 comments)

Buyer's Market? Seller's Market? - 12/05/06 10:52 PM
...according to the National Association of Realtors (NAR) maybe it's both...
On November 3rd the NAR took unprecedented step of taking out full page ads in news papers around the country, including the Wall Street Journal, USA Today, and the New York Times.  The ad declares in its boldface headline that "it's a great time to buy or sell a home."
So following this logic it would appear that it doesn't really matter if you're a buyer or
Read more at my Real Estate Investors Blog...
… (0 comments)

National Foreclosures up - 12/05/06 10:50 PM
RealtyTrends, the monthly newsletter from RealtyTrac.com, reports that foreclosures are up 17 percent in Q3 - 318,355 properties went into some form of foreclosure during the period.  This represents an increase of 17 percent over last quarter, and a year-on-year increase of 43 percent.
Foreclosure levels varied widely across regions, with Colorado, Nevada and Florida leading the pack.  Florida saw a 55% spike in foreclosures to lead
Read more at my Real Estate Investors Blog...
… (0 comments)

Ethics and Foreclosures - 12/05/06 10:47 PM
Continuing on the theme of ethics and real estate investing...
There was an interesting article published in the Chicago Tribune recently on foreclosures rescue services. 
Foreclosures offer a lot of opportunities for investors, and often investors can offer a service to distressed homeowners that is both profitable to the investor and benefits the homeowner.  But the real estate business being what it is, occasionally unscrupulous actors prey on unsophisticated victims in a way that casts a negative light on the ethics of the entire industry. 
The article was posted on the Creative Real Estate Online messageboard, a useful forum
Read more at my … (0 comments)

Bubble Trouble - 12/05/06 10:44 PM

I'm seeing rough waters on the horizon for some of the higher priced markets, but there are quite a few pundits out there predicting a full-on housing price Armageddon.  Sell your house now.  Stock up on spam, bottled water, and ammunition. 
Check out a few of these blogs that take a national perspective in the impending collapse...
The Housing Bubble Published by Ben Jones from Arizona.  Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
Bubble Meter:  A blog dedicated to the premise that there is a Housing Bubble in many locales in … (0 comments)

Marketing your property online...Photos matter! - 12/05/06 10:40 PM
Almost all buyers in the real estate market conduct some of their shopping online, whether they're FSBO's, bank owned foreclosures on MLS, or garden variety properties listed by realtors.  When buyers check out a potential investment they're basically looking for something not to like - a reason not to make the investment.  Your average buyer isn't going to see the diamond in the rough - they're not going to be able to look past an ugly photo.  If you're wholesaling to an investor (selling fast and cheap) this might not make much difference, but photos matter when you're selling to John … (0 comments)

 

Christopher Smith

Houston, TX

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