Real Estate Blog - Rental Properties: There was a time...

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Rental Properties: There was a time...

Recently, I was asked by someone that had contacted me why it is a good time to buy rental and income properties. The real question is "Why would you not buy a property with the current selection, price adjustments, and financing available?"

Five years ago there was a lack of rental properties and we really had to hustle to find the right ones for purchase.

Three years ago there were many in my area that were overpriced and overbuilt creating a saturated situation, and even if the supply would have been less dense in some areas, the price was still high.

A year to two years ago adjustments started to emerge. A lot of properties were coming on the market, and a lot more followed, and continue to follow. Some landlords shoe stringed because of heavy debt, second and third mortgages realized that they should, and needed to sell.

To this day the rates are great, the selection is good, and the prices are realistic.

So I ask you. "With all these variables in your favor, and if you can and want to buy property, why would you not buy a property at the current time?"

The time to buy property is now.

Tom Braatz and Glenn Shong

If you have thought of buying a home you really should get your buyer package now. Just give us an email and we will get one out to you. See you at closing! When you are looking for two Brokers that know Real Estate, and live and breath it as well, just pick up the phone and call Tom Braatz or Glenn Shong. If you would like one of our custom Seller or Buyer Home packages, or one of our Real Estate tool kits feel free to call or email us as well. We are passionate about what we do, and we enjoy working in Real Estate that everyday is another amazing journey;we have both enjoyed it for years, and everyday we wake up it is with more enthusiasm as the previous day.

Let's roll up our sleeves, get a game plan, and make your dreams come true! It is time to buy that home.

tom@tombraatz.com tombraatz@remax.net www.activerain.com/tommybraatz www.LinkedIn.com www.ecademy.com www.tombraatz.com www.buyingvip.com 262-377-1459 www.naymz.com www.zoominfo.com www.facebook.com www.plaxo.com www.trulia.com commercial real estate powered by www.xceligent.com www.perfectnetworker.com www.realtownblog.com www.loopnet.com www.konnects.com www.twitter.com www.congoo.com www.connectture.com www.myhomevaluesource.com and more.

We want to be your Realtor, and I look forward to seeing you at your closing

Posted by Tom Braatz, Waukesha County Real Estate,WI on 11/17/2008 03:18 PM

Comments (14)

rental properties, income properties, waukesha county rental property, commercial rental property, tom braatz real estate investment

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14 Comments on Rental Properties: There was a time...

NOV

2008

Good motivation info. Recommend backing it up with projected numbers. For example, in my area the median home price is $256,000, which equates to ~ $1,900 a month mortgage payement. Factor in property management fees of 10% you need to rent the home for $2090/month to generate income assuming no money down, and no tax benefits...... and on and on.

In WA state we are just hitting that point where you can put 20% down, and make money. The ROI is still <10% though.

Agree, still a great time to buy rentals, just do your due diligence.

Tom - I agree. This is definitely a great time to buy. If anyone has ever considered investing in real estate in the past, now is the perfect time to begin - prices and interest rates are great! :)

Marty

I didn't project numbers in this post because of all the numbers of properties and programs and more involved. Operating Data, performing Data is always calculated with vacancy allowances, cost recovery, and more. Tax benefits, appreciation, and more can far outweigh the cash flow. Few million dollar properties are no money down, and even if the seller participates he still is going to leverage it to get his money back. The reason in this case, as if you were buying a home is that no interest rate or program or down payment is involved. The position they take of equity and possibly starkering (reference IRS section code 1031) into another property changes the picture, How they make money as an entity,if it is a package, and more applicable items.

Since I do whole businesses in SBA it would not be appropriate to tell someone how much they will make if they can't run a business. The same applies to a large multi; 8,24,60 or whatever number of units. When someone sits done after we have a property in mind we run another CFAT and APOD, and sometimes an ACLS.

This is a totally different ballgame than a home being sold where you tell someone they can buy a home with X amount down, the interest rate, the payment amount and more. Often, we even factor in the sellers holding a note in the form of a second and secure it to collateral as a home.

The rate of returns varies per property, and not so much area.

If someone is interested in a property I have listed they get a APOD or CFAT. A Business they sign for the P & Ls, the Wisconsin sales receipt for tax, last 3 years of Schedule C and E, and more. From there any phase 1, possibly 2, and other items that need to be addressed. At that point they should take it to an accountant and make their determination; I will not guarantee performance of a property. If it were a home it would different, and a lot of factors would not necessarilycome into play. However, this is not pinpointing a specific property,rate,program, or portfolio. Management fees varies as well from on site to off site. They can be anywhere from 6-10 here.

Sincerely

Tom Braatz

Sincerely

Tom Braatz

Debi

It really is a great time to buy a rental.

Sincerely

Tom Braatz

Tom,

It definitely sounds like the perfect time to be investing in multi-family and commercial buildings and I know if I were in the market to buy, you'd be the one I'd be contacting. Your knowledge in this field is astronomical and I know you'd always do the best thing for your clients.....

Hey Tombo.... The only obstacle...is finding the money! Gotta have the right connections....

NOV

2008

It must be a good time, because in our area, you cannot find any listed for sale, with so many renting now, seems as no owners are selling.

if you can put enough down payment to get yourself cash flow break even , then this is the time to start building a real estate portfolio

Thanks for the compliment

Tom

Joan

Money is a very real obstacle.

Tombo

James

I only wish I would have a bigger war chest of money.

Sincerely

Tom Braatz

Mary

Finding the good ones are hard

Sincerely

tom Braatz

NOV

2008

I've been telling my investors with money to buy, buy, buy, all these people who are being foreclosed on have to have some place to live, It might as well be your rental property!

Todd

Someone can buy, and have ready made tenants.

Sincerely

Tom Braatz

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