real estate investing: How many houses do you have? - 08/24/08 07:16 AM
The gaffe of the week goes to John McCain, when in an interview with Politico.com he was unable to remember how many houses he has.
Folks of all political stripes who read this blog will probably be willing to give Senator McCain a little slack on this one. We're real estate investors and we buy and sell properties. We might not have married a $100 million heiress like Senator McCain (or made $4 million off a lucrative book deal like Senator Obama, for that matter) but we can understand how LLC's and partnership purchases might turn a seemingly simple question into … (1 comments)

real estate investing: Smart investors are honest investors - 03/27/08 04:30 AM
Ethics in investing is a topic that I’m interested in. This is one that I’ve written about before, both in the press and here in this blog . It’s one that I don’t think gets enough airplay – but the lessons of ethics and investing are the subplot to many of the other ideas and strategies that I write about on this blog. Here are five discrete thoughts that have emerged from experiences that I’ve written about recently.
Honest investors are fearless investors: I have a lot of philosophical reasons for being honest, but I also have a practical one: I’m not clever … (0 comments)

real estate investing: Foundation problems might present an opportunity for Real Estate Investors - 02/10/08 12:44 AM
Plumbing, Foundation. Roof.  HVAC.  These are the big ticket items when you're doing a physical inspection on a potential investment property. 
Most investors are part timers.  Most of us are somewhat good with our hands and know something about houses (we all live in houses, don't we?)  So three of those items might not scare us too much when they arise.  We've all replaced a faucet or two.  We all do maintenance on our own AC systems.  Most of us have had a roof replaced. 
But sloping floors and crooked door frames will send us running for the hills.  But consider … (0 comments)

real estate investing: Real Estate Investors :: Five approaches to today's soft market - 02/07/08 01:19 AM
Here are some ideas to give your clients who investors wondering what they should do next.  Hold 'em?  Fold 'em?  Walk away?  Run?  Or double down, maybe...
Well lots has been written on how our current soft market is hitting homeowners. But it’s not so easy to find anyone addressing the issue that looms largest in the minds of most real estate investors: what should I do now?
There is no single right answer to that questions – it all depends on your local market, your appetite for risk, your view of the future, and the length of your runway - how long … (0 comments)

real estate investing: Real Estate Investsors :: Shop the two-for-one sales - 02/06/08 02:23 PM
A reader who goes by the handle “Max” made a comment the other day that got me thinking. There’s a concept in pop business theory called the Peter Principle which states that managers tend to get promoted to their point of incompetence – taking on bigger and bigger responsibilities until they eventually get to the point where they’re over their head. And this, ironically, is the point where they tend to stick.
In discussing the concept of leverage, where an investor builds a profitable portfolio of investment properties over the year by occasionally executing a 1031 exchange, the Peter Principle might … (1 comments)

real estate investing: Real Estate Investors :: What's next? - 02/06/08 01:57 PM

As investors we’re not out there spinning the roulette wheel; we’re looking at the underlying fundamentals and taking measured risks. That said, investors do need to take a view of the future in order to make decisions in real time – and BusinessWeek’s recent cover story gives the housing market a timely and even-handed overview.
You’ll see some of the boilerplate that you’ve read before, but pay attention to a reference to an influential paper written by Harvard economist Gregory Mankiw which back in 1989 predicted a precipitous decline in housing prices. The premise was that a shrinking body of first-time … (7 comments)

real estate investing: How passive real estate investors leave money on the table - 12/09/07 01:37 PM
In A Brief History of Time, Stephen Hawking refers to a publisher’s rule of thumb that states that every formula that a writer includes in a publications will cut his readership in half. Well real estate investing is based on relatively simple principles - especially next to the stuff that Hawking researches- but there are some RE investing concepts that can be communicated a bit more effectively aided by a few equations and numerical examples. So bear with me - with this post I'm going to crawl through some numbers and risk turning off a few readers...
I mentioned in a recent … (3 comments)

real estate investing: Are you a Landlord or an Immigration Agent? - 09/30/07 09:37 AM
As the presidential election approaches, the issue of immigration - primarily illegal immigration - will shift further into the spotlight.   This has implications for all of us, but it may have a particular relevance for buy-and-hold real estate investors. 
Across the nation local municipalities are attempting to enact legislation which would hold landlords responsible for verifying the legal status of their tenants, and would impose heavy penalites on any landlord found to be providing housing to an illegal immigrant.  From the landlord's point of view, this is a tough issue.  I live in a border state.  Regardless of your political affiliation it's … (0 comments)

real estate investing: Real Estate Investors :: Managing the Eviction Maze - 09/17/07 03:17 AM
Generally speaking, our housing laws were designed primarily to protect individuals and to regulate powerful interests.  That sounds like a reasonable proposition, but one day most long-term investors wake up and realize "hey...in the eyes of the government I'm the powerful interest!" 
So, Mr. Landlord, when you run into a problem with a tenant who doesn't pay or who trashes your property you might feel like the deck is stacked against you.  But if you're familiar with your local housing laws (which vary from state to state) and play by the rules you'll find that you can get through the eviction … (3 comments)

real estate investing: After all, real estate investing is all about money... - 08/10/07 04:14 AM
As an investor I spend a lot of time thinking about money, and I've found that my my ideas about the topic have shifted over time. Money, in my opinion, isn't the key to happiness.  However, being overwhelmed by it (or the lack of it, as the case may be) can very well be a key to unhappiness. In terms of importance you can compare money to oxygen: having lots and lots of it won’t necessarily make you happy, but when you don’t have enough it’s hard to think about anything else.
The concept of hedonism, in modern usage, is often associated with vice … (3 comments)

real estate investing: Real Estate Investors :: Time to buy? Ask yourself this question... - 08/02/07 07:07 AM
So, what do we do now…?
I've written posts on the folly of forecasting. A current case in point is the diverse buffet of predictions for the housing market, each one served up by an highly qualified expert running a complicated economic model.  Try Peter Schiff of Euro Pacific Capital who is predicting a fifty percent collapse in some overpriced markets. A bit more optimistic? Try out David Wyss from Standard and Poor’s who is predicting for a more modest 8% drop.  Or if you’re really in the market to buy then the expert you want to listen to is Lawrence Yun, … (5 comments)

real estate investing: Two roads to wealth :: which one will you pick? - 07/02/07 04:59 AM
I'm not a big fan of "get rich" tomes, something I discussed recently in my post on Kiyosaki's Rich Dad Poor Dad series.  But an exception is Stanley and Danko's excellent survey on wealthy Americans: The Millionaire Next Door. 
This isn't a new book but it reamins relevant as it has a lot of messages that Americans need to hear and internalize.  As a society we do a great job of consuming, but not such a great job of saving and investing - as our reliance on social security shows us. 
Stanley and Danko take a very different apporach to Kiyosaki … (1 comments)

real estate investing: Should "speculator" be a dirty word for real estate investors? - 06/23/07 11:40 AM
A while ago I wrote an entry here on active rain and on my real estate investing blog about the difference between a real estate investor and a real estate speculator.  My view is that either approach may be right for you, but the danger comes when you think you're doing one and you're actually doing the other. 
Some of the comments I got prompted me two write a few lines in defense of the real estate speculator.  Great investors from Warren Buffett to T. Boone Pickens have always focused on fundamentals, but they've also shown a willingness to take a … (4 comments)

real estate investing: The popular press mangles Real Estate Investing concepts :: USA Today - 06/12/07 03:58 PM
We all know that the popular press often gets it wrong.  It's been a while, though, since I've seen an example more egregious than the USA Today's recent article entitled Many Investors Feel Like Running Away by Matt Krantz. 
Taken in small doses the USA Today can be entertaining fluff (factoid, anyone?) - but don't be fooled, this is powerful fluff.  Powerful to the tune of 5.2 million readers per day.  That's a lot of eyeballs soaking up a lot of misinformation.  
From the perspective of the Real Estate Investor I've touched on the ways in which this article gets it … (3 comments)

real estate investing: Who else is writing about Investing, Personal Finance and Real Estate? - 05/29/07 04:17 AM
Blog Carnivals are a great source for discovering new voices discussing the topics that you care about. 
MoneySmartLife is hosting the Carnival of Personal Finance, and the EquityScout article on Real Estate Investing vs. Speculating was featured as an editor's choice.  Real-Real Estate Investing is hosting the Carnival of Real Estate Investing, and the EquityScout article on real estate investors working with Realtors took first place.   
(2 comments)

real estate investing: Investors vs. Speculators - which one are you? - 05/27/07 02:01 PM
There's a difference between real estate investing and real estate speculating.  Either may be the right approach for you, but trouble is headed your way when you think you're on one side of the fence but you're actually on the other.   
Real estate investors/speculators are showing up a lot in the popular media- which, generally speaking, isn't good news.  Check out the Florida couple who took out $750k in loans to buy three properties, backed by their combined $90k annual salary.  Seemed like a good idea at the time, I guess, but when the market turned south they were stuck with … (4 comments)

real estate investing: Establishing ground rules with your tenants - 05/07/07 03:03 PM
When it comes to managing someone’s behavior it’s usually easier to set the right rules from the beginning than it is to change change them once a habit has been established.  If  you've raised a child or tried to correct a bad golf swing then you'll know what I'm talking about. 
Landlords should bear this principle in mind when it comes to dealing with tenants. As a landlord  you are a service provider and the tenant is your client. Good tenants are an important component in your investment strategy. It’s important to realize that you have a leadership role in … (2 comments)

real estate investing: Why Real Estate should be part of any Investing Portfolio - 04/29/07 04:33 AM
Over the past two decades there has been a shift in the way that our society thinks about retirement planning.  A generation ago workers could depend on a steady pension to fund their quality of life after retirement, supplemented by Social Security. 
Today the situation is gradually changing.  Social Security is in trouble and Fortune 500 companies regularly make headlines by defaulting on their pension obligation.  The safety net that previous generations depended on is starting to look a bit frayed, and more responsibility is falling to the individual.
This is not necessarily a bad thing for those who are proactive … (3 comments)

real estate investing: Online resources for Real Estate Investors... - 04/26/07 09:21 AM
Here are some great online references for real estate investors and the agents who serve them.  Yeah you can do courses and seminars and read books till you're blue in the face, but there's nothing like learning by doing.  And here's some sites written by folks who are doing just that.
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I bought a duplex:  The title says it all 
My Real Estate Investing Venture:  One investor's adventure in the market
Successful Landlord Blog:  Investing from the Landlord's perspective
Creative Real Estate Online Forum:  Great forum for newbies and veterans alike
Tenant Tales:  You think you've seen wacky tenants?  Check this blog out
Shaun from Arizona's … (1 comments)

real estate investing: Stick to the facts in written communication - 04/09/07 06:49 AM
In 1894 Mark Twain admonished us As to the Adjective: When in doubt, strike it out.  This is good advice for English majors, but it's equally useful to real estate investors and agents who have to be persuasive in written communication. 
Negotiation is a key skill that real estate investors and agents have to master, and often we have to put our words in writing.  A tactic that I've committed myself to is the following:  I write what I have to, then I get a red pen and challenge all of the adjectives.  If a sentence that can stand on its … (6 comments)

 

Christopher Smith

Houston, TX

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