House #1 Listing Changes and Marketing

House #1
I talked to my wife about the lack of offers on House #1, and we decided to drop the price of both the sale and lease listings. I sent my RE agent an email earlier with the changes. The new sale amount is roughly $3k less than FMV and the lease amount is about $50 less. Hopefully this will start getting more buyers in the door as the market in the area seems to be slowed rather bit. I'll be taking a much needed vacation next week, and one of the things I plan to do is go to House #1 and remulch the tree and plant beds, mow, weed eat, water the greenery, and spot clean the inside. I'm also thinking of having an open house on the property to generate more traffic.

Marketing
Last week, I purchased William Tingle's The Ultimate Sub2 Guidebook. I've always been interested in doing Sub2's since they seem like one of the best models in this venture as far as out-of-pocket expenses. I spent last weekend and every night this week reading the book, and I have to say it's one of the best investments I made. With shipping it came to $242, and I think it was well worth the price. He gives a good, detailed, step-by-step approach to doing Sub2's - complete with all the forms you will ever need.

I've also decided to tweek my marketing - or should I say, I've decided to DO some marketing. My only stab at marketing thus far has been laying out a few bandit signs. I've gotten several calls, one lead, but no deals. The other day, I decided to start researching the county records more for out-of-state owners with vacant properties, recently or soon-to-be divorced homeowners, and people that are delinquent on taxes, but haven't had their properties auctioned yet by the county. My preliminary pass at this has already yielded a good prospect. I sent the homeowner a letter yesterday, and we'll see what happens. I realize direct mail only yeilds about 1-3%, so my chances at this ONE letter are slim to none, but it's a start.

When I'm off next week, I'll have more time to do more research. Two things I plan to do are: go to a local sherrif's (i.e., tax sale) auction and go to the courthouse and start digging for information.

Google Earth

This isn't directly related to REI, but it's services could be handy in seeing what a property (and the area around it) looks like. Download Google Earth and take it for a spin. Just enter a location and the app will show a satellite view of the location/area. You can zoom in and out. Of course, not every location is in the database, but most of the places are. One thing I like about it is the pan-n-zoom effect it has. Enter a location (stret address, city, state, and zip) and after it finds the location enter a new location several miles away. The app will automatically zoom out and "fly over" the area in-between locatoins, and then zoom into the new location. Awesome!

Sign Police

Ugh. I just got a call from the city administration office in the area I put up some of my bandit signs last weekend. Luckily, I just let the call go through, and they left a message saying to call a certain number - yeah right! I only put up three signs in that area, and debated Sunday whether to pick them up or not. I decided to leave them, and I guess someone in their department spotted one of them on Monday or Tuesday. The lady didn't give her name or where she worked, but I did a reverse phone lookup (curtousy of WhitePages.com) and found the number she called from (which was the same number she wanted me to call back) was listed under the city's administration office. I guess I'll go out this evening - when all the city offices are closed - and take the signs down (if they aren't already). No, I don't plan to call her back, either. :-/

WAHOO! First Lead!

I got a call this morning on my cell phone from a guy who said he saw my bandit sign. I was a nervous wreck at the beginning of the call, but settled down and was rather proud of how I handled the call in the end. He said he just wants out of his property, and is not looking to make a profit at all ... yip-ee! I asked him why he wanted to get rid of it, but he wouldn't give me a definate reason, only to say he didn't want to continue paying for the house. He said he is up to date on his payments, insurance, taxes, etc., and would gladly just sign over the lein to the property. Here are the financials I got from him:

House: 1997, ~1100sf, 3/2
Owes: $86,000
ARV: ???
Repairs: Very minor (missing tile in bathroom, bowed board in back siding). New A/C unit and W/H (two years ago).

He said he believes the house is worth $110k-$115k, but doesn't have the time nor inclination to list with a RE agent, which had me a bit suspicious. I was at work and I told him I would run some numbers and give him a call this evening. I told him if by chance it didn't work for me would he have a problem if I assigned the deal to someone else, and he said "Not at all."

I'm excited about the lead, but I need to do my due diligence on this one. He said there are no other leins on the house besides the mortgage, and he just doesn't want to pay the mortgage anymore. I'm a little suspicious because he claims there are no other leins, he's not behind on anything, has a fair amount of equity (according to him), and just wants out with no profit. I know the area very well, and it isn't a hot area at all, so I understand him saying the house would probably sit a while if it were on the market (at full price).

Busy Weekend

Bandit Signs and a Thief
I decided on Friday that I would get up early - VERY early - on Saturday to put up some more signs. So, on Saturday morning, I get up at 5:00am, grab a Mountain Dew, and start on my adventure. I first had to nail the signs to stakes. After doing about 10 of them, I headed out. At this point it was about 5:20am. Of the three signs I put out the weekend before, only one was still up. I managed to put 9 of the 10 new one up (one stake actually broke in half as I was pounding it in the ground), and decided to go to House #1 to water the trees and plants. While at House #1, I checked up on what, if anything, my RE agent had done. Sure enough, she updated the yard sign and the flyers, so that was inspiring. I left House #1 a short time later and returned back home. At this point it was about 8:00am.

About 2:00pm that same day, I had to run a couple of errands, so I decided to check out if one of the signs I put up was still there. It wasn't. This was the same location as a sign I put up the previous weekend and it had disappeared later in the afternoon as well. ARGH! Twice in two weeks, so I doubt I put anymore there again even though it's a nice spot. Coincidentally, I went by the place again on late Sunday and noticed two other bandit signs - one for moving and another for something else - in almost the same spot as I had my sign. This morning while driving into work, they were both gone as well. So I'm guessing someone in that immediate area has made it a point to keep the area clean of "roadside spam".

Any Leads?
Later Saturday afternoon, I noticed that I had gotten two phone calls. I suspect these people called when I was outside with my wife and daughter in my daughter's little pool. Neither person left a message, though, so I figured they weren't motivated enough (probably retailers, curiosity seekers, or other investors). On Sunday, I got another call from one of the same people as on Saturday. This time I was able to answer it. I kept saying "Hello?" but they wouldn't answer me. I could hear a TV in the background with a sports show on, so I knew they were still on the line. After a few moments of not getting an answer, I hung up.

BTW, everytime I go out now, I put the magnetic car signs my wife gave me for my birthday on my car. Sunday was actually the first day I did this as I haven't had time to wash my car until then. I had to go to a local store to pick up a few things that day. When I parked, I got out of the car and proceeded to enter the store, when a lady was yelling "Sir!" to get my attention. Turns out she was an employee of the store, and was looking for a place to rent. You better believe my adrenaline was racing after hearing those words. Unfortunately, the more she talked, the more I realized House #1 wasn't for her. She was looking for a farmhouse in the country - a place she can put a garden and chicken coop and other "farm" stuff on. I told her I didn't know of anything off hand, but I asked her for her name and information in case I find anything. I also gave her my name and number, and asked her if she knew of anyone that needed to sell their house to give me a call and I would pay her a $250 referrel fee if I close. Her eyes lit up when I said that and she asked "Are you serious?", to which I said "I certainly am." I just wish I had a business card to give her. Instead I just wrote my info on a piece of paper.

Non-returned Emails
I know I've ranted on here upteen times before about the lack of professionalism I've experienced in this industry. And the unprofessionalism just continues.

Last Wednesday, I decided to email a CPA my mortgage broker referred me to. Supposedly, he is a RE investor himself, and understands where we "come from." I thought this would be a great addition to my team. Well, here it is the following Monday, and I still haven't heard back from him. Granted, I could be jumping the gun as he could be out on vacation or whatnot, so I'll give him a while longer before passing judgement.

A second recent incident involves a RE agent, however. You'd think that these people would be overjoyed to answer emails from people who are interested in a property they have listed. I found a commerical property early last week online, I emailed the listing agent some questions regarding the financials of the property (nothing too personal). Again, it's Monday morning and I've gotten nothing from him. In this case, if the agent is out on vacation, he should have either allowed an assistant to read his email or have the email forwarded (or, thirdly, change the contact email address in the online ad). How inconceivable. Now he coould have lost a potential buyer.

Coincidentally, this same hting happened to me and my wife a few years back when we were looking for some land to build a house. We found a nice parcel of land, and my wife called the listing agent to get some info. The agent didn't have the info handy, but said she'd call us back. A couple weeks went by and nothing. My wife called the agent back and the agent said she had "forgotten". Huh?!?! My wife was so steamed about this, she went around the agent and talked to the seller herself to tell her what had happened. The seller was outraged to say the least. Within a couple of hours, the listing agent called my wife back and was very rude to her. My wife told her she had no other choice but to let the seller know what type of incompetent agent she was using, and told the agent that if she wasn't careful, she would be reported to the Texas Association of Realtors and the Texas Real Estate Commission for her rude behavior. The agent became a puppy after that and the whole matter was dropped. We decided afterward not to pursue the property.

To Refi or Not Refi - That is the Question

The answer? Refi.

Well, as of yesterday, I have been the proud owner of a second house (edit: for two months now) - House #1. I had hoped that this house would have gotten at least a few offers by now, but nothing. My agent keeps telling me it's overpriced - not technically, but market-wise - and I may be in denial. My thinking, though, has turned from one of a retail flip mentality to more of a Buy-and-Hold one. Thus, I'm not as concerned about lowering the price and getting this thing sold as I was at the beginning. As I've stated upteen times in my blog, I really like this property and would like to keep it in my inventory as a rental. I'll still leave it on the market with it's current price/terms, but I'm more focued on getting a renter or T/B in it than an owner.

Of course this new approach means I'll have to think about refinancing the property. Even if I didn't want to refi to pull cash out, I still have to refinance to get better terms. As it is, I have two loans - an 80% IO loan and a 20% short-term loan. The good thing is both carry NO prepay penalty, so I can refi without worrying about additional backend costs associated with the loans. I talked to my wife briefly about it last night, and she "sort of" agreed. (I say 'sort of' because it's hard to guage what she thinks and what she says at times about this house.) She asked if I would use the same broker who financed the original loans, and I told her "probably". There are several reasons why I would go back to him:

1. I've already built a reporte with him. This will make it easier to finance properties in the future. He has my file. He knows my situation as an investor.
2. He has given me a couple of leads. Sure, they didn't pan out, but the fact that I have another avenue open is positive. Yeah, I might find someone else who can do the same thing better, but I wonder if it would be worth the hassle of trying to find one who MAY be better at the beginning.
3. Building a relationship can possibly get me better deals in the future with him. This is just a guess on my part, but after I bring in a few deals, I'm sure he'll begin to notice he has a steady client. And what's the first rule in business? Never lose repeat customers. (Okay, maybe it's not THE first rule, but it's certainly up there.) As many investors say, almost everything is negotiable. Having repeat business with him could very possibly give me leverage to reduce a few expenses when financing deals.
4. He is very easy to converse with. I know sounds cliche, but he is a very nice, down-to-earth guy who is very good at what he does.

I'll call or write him today to start the ball rolling.

Again, the main reason for refinancing is to get better terms on the loans, since I plan to hold htis property long term. However, I also plan to pull some cash out when I refi to pay off the expenses incurred with this deal, if nothing else. I also plan to put aside some funds for holding costs (just in case) and for future deals.

I plan to swing by the property today to see if my RE agent made any additions to the fliers and sign (i.e., reduced the sale price and added references to it being for lease). I hate getting the cattle prod out, but sometimes it has to be done.

BTW, at first I had thought about getting a property management company to oversee the landlord duties of the house (if it gets rented out), but have decided to do it myself - at least initially. If it becomes too much of a pain, I'll reconsider a PM company. But I figure for one property that's already in good shape (it was built in 2002), there shouldn't be too many foreseeable promblems with it (knock on wood). Plus it will give me experience on dealing with tenants up front and experiencing the day-to-day operations of a landlord.

Broker Sends Another Deal

I got an email from my mortgage broker about another deal. It sounds VERY promising, but I don't have the reserve funds needed at this time. If anyone is interested, send me an email and I'll try to get more info. Here is the deal as I understand it ...

An investor closed on two 4-plexes this past January. He has now been approached with an opportunity to participate in a hi-tech start-up, and wants to unload the two 4-plexes. He is asking $345k. When he bought them in January, they were appraised at $355k. Ther is one vacancy in the 8 units, but the seller will guarentee rent for the first four months. They currently rent for $3600 each. A 100% stated loan with a FICO of 680+, 6 mos. PITI reserves, and 2+ years of steady employment would result in a PITI of ~$3,100.

Bandit Signs, My Agent, and Sub2 Course

Bandit Signs
Saturday morning, I went out and placed three of my new bandit signs in pretty good locations. One place in particular is a "funnel" for numerous housing subdivisions, so I thought I'd get a call from there at least. Come Monday morning, and I got -0- calls. But I know this is a numbers games, I have to be persistent in this endeavor. Instead of picking up the signs Sunday night (so the code enforcement people wouldn't call me), I decided to just do it on the way into work Monday morning. Lo-n-behold when I get to the sign in the "funnel" location, it's gone! I'm not sure exactly when the person took it, but that could be a reason why I didn't get any calls. And, yes, it really ticked me off. I was thinking afterwards of some way to deter people from stealing the signs, but only came up with one: put molasses/syrup on the stake, so when they lift it up out of the ground, they are covered with sticky goo. There is also an old, faded commercial sign in the same vicinity. I'm thinking I could try and attach one of my signs to the bottom of it, since you can't read the commercial sign anyway. I'll put it out on Friday evening, and pick it up on my way to work Monday.

RE Agent
After putting the signs up Saturday morning, I went to House #1 to mow, weed eat, water the trees/plants, and check out things. This time I took the time to check out progress my RE agent had done. If you recall, I lowered the price on the house from $140k to $138k, and put it for lease, also. Well, there were a few fliers in the "For Sale" sign box, and they all the original fliers stipulating a $140,000 price! ARGH! Of course, being the originals, they also didn't mention anything about it being "For Lease". Also, the sign itself still says "For Sale" with no mention of it being for lease. And it's been two weeks now since I made these changes!!!

The first thing I did when I got home is email my RE agent to tell her about these "oversights" and to correct the problem ASAP as I could be losing customers (probably not a lot, but one never knows). I am really pissed that I'm having to do everyone's work for them on this house. From the HOA PM company to my agent. Needless to say this will be the last time I use her. She's been an asset in submitting offers for me and giving me advise, but her inactions on this house has pretty much given me a bad taste.

Sub2 Course
Besides the bandit signs and magnetic car signs, my wife also gave me 4 books on REI. I skimmed through all of them over the weekend, and decided that two of them were rehash of stuff I already knew and/or from books/courses I already have. So, I told my wife she could take them back to B&N for a credit. In lieu of those two books, I asked her instead of she could purchase me William Tingle's The "ULTIMATE" Sub2 Guidebook. I've heard that dollar-for-dollar this is the most accurate, most fact-filled, most easy-to-read course on buying properties Subject-to. Since most of my future deals will probably involve getting properties this way, I thought it best to get a course that explains how to do it in detail. My wife didn't seem to like the $227 sticker price, but I think I've convinced her that it's the best thing for our venture. ;-)

Surprise!

Yesterday was my birthday. I wasn't expecting much of anything except maybe some clothes and probably a gift card to Barnes & Noble, or something. Well, I got home from work, and my wife surprised me with four new books on REI, 100 "We Buy Houses" signs (complete with stakes), and two magnetic "We Buy Houses" car signs. I guess if there was any doubt that she doesn't want me to pursue this venture, I can pretty much ignore it now. What was interesting is a sudden bolt of a apprehension went through me when I saw the signs. I've been procrastinating for months now on getting some signs and having motivated sellers call me, but I've always found one excuse after another why I haven't done it - which I now know was just fear taking over me. Now I have no more excuses.

More Ramblings on House #1

After work yesterday, I stopped by the city offices where House #1 is located to setup sewer services before they start penalizing me by shutting my water off. I was somewhat stunned at the amount I will have to pay for not even making use of the system. I had to pay a $100 deposit just to get my account set up. Then, I must pay $40/month whether I use it or not. $40/month! In my city, they put the sewer, garbage, and water all on one bill, and it's usually around $50-$55/month total. It's highway robbery what they are doing as I doubt I'll flush anything down the whole time I have the property in my name. ARGH!

I also realized yesterday that House #1 has been shown a whopping THREE times since it's been on the market. This Saturday will be 5 weeks since its been on the market, so that translates to <1 showing per week. My RE agent's marketing of this property consists of putting it on the MLS, putting it in a monthly circular, and a couple of other things. I've been extremely busy at home and work these last few weeks, but I'm going to start my own marketing campaign to get this thing shown more. I plan to put up some bandit and directional signs, put balloons on the yard sign, market as much as I can at Craig's List, and maybe even put an ad in the local free circulars. This is getting ridiculous.

I went out to the property a couple of days ago to water the trees and bushes. We're going on 15-16 days now with no rain and temps >90. Today is supposed to reach almost 100. I figured I better give them a good soaking, because the 7-day forecast shows absolutely no percipitation. I also plan to go out there after work today and mow the front and sides again (and just part of the back).

A Reminder of Why I'm Doing This

Over the past week, I've had the "fun" JOB of having to recover data on a server of ours. I wear different hats where I work, and one of them is the lab administrator. Essentially, I'm the guy everyone in the organization comes to if there is an issue with any of the equipment in the computer lab. And this is but one of many duties I have. Well, it turns out about a little over a week ago, our main server in the lab started going weird. Files were coming up missing, links were broke, and so on. Without going into all the boring details, this problem required that I work extended hours trying to resolve the issue. It's only Thursday morning, and I'm only a couple of hours away from working 40 hours for the week with another two days (at least) in the work week to go. The problem is about as fixed as it can be, so I can't really do much else. Therefore, I'm hoping the boss doesn't have me stay in order to become a miracle worker. The whole time I'm working on the problem, I keep thinking of how much more time I would have, and how much less stress I would have, if I already were at the point of working fulltime as an REI.

Yesterday (Wednesday), I came into work around 6:30am and stayed until about 6:00pm (wihtout any breaks mind you). When I left work and was driving home, I was switching between radio stations. I happened on one that was playing Already Gone by The Eagles. I've always liked The Eagles and this song in particular. Ironically, towards the end of the song, there is a part that goes ...

So often times it happens that we live our lives in chains
And we never even know we have the key

I thought to myself "how true". Most of us do live our lives in bondage, yet it is we who hold the key to release ourselves from servitude.

Managing the Management Company

I could scream about all the incompetence I've experienced dealing with House #1. I wrote in my blog back in mid-May about the Property Management company for the HOA in the housing subdivision my property is located in. To recap, I called them for the By Laws & Covenants (i.e., Deed Restrictions) for the particular subdivision. I was told to email some lady there, which I did twice. I then had to follow up with several phone calls, and still got nothing. I finally had enough, and went by their office yesterday to speak with someone in person. The lady there kept saying I should have got it at closing, which I kept telling her I didn't (note: it's as if she didn't want to give me a copy , since I should already have one). She said she didn't have a copy available, but would make one and send it to my address. I specifically had her write down my PERSONAL address and not the address of House #1. Let's see if they can get it right this time.

And this is a property management company mind you. :-(

Networking is Good

I received an email from my mortgage borker this morning. He also CC'd a few other people, so it wasn't just directly to me. Seems he has two people who want to buy a house, but they can't qualify for a loan, and are wanting to do a lease/purchase. The first is a single woman whose mother stole her identity (nice, huh?) and ruined her credit. She is now in the process of getting her credit cleaned up, but can't qualify for a 100% loan. She has an excellent rental record and would like to lease a home with a period of 24 months, while her credit is re-established, and then requalify to purchase the home. The second person is a man and wife who are having a hard time getting a loan, because they cannot satisfy the lender's documentation of income. They would like to do a lease/purchase in order to build more equity and/or provide better documentation to the lender.

Both of these sound like excellent lease/purchase candidates. The main thing to note is that I would have never gotten these leads if it weren't for the power of networking. I'm kind of leaning towards the first person, but I emailed my contact back and asked him some more questions on each. We'll see how it goes.

ARGH - More utilities

I got home yesterday to find a piece of mail from the city where house #1 is located. In my city (which is different), the water, sewer, and garbage is all on one bill. Evidentally, in the city where house #1 is located, the water is handled by a MUD (Municipal Utility District) and the sewer is handled by the city. So, I get a notice from the city that I need to pay them a deposit of $100 for sewer, or they will have the water shut off (they have a deal with the MUD to do this). I still haven't started the gas service, either, because ... I don't need it. If I go to rent/lease this place out, though, I'll need to have everything working (but not necessarily in my name).

Possibility

I came across another multi-family unit that may have some potential, although, all I've done do far is see some scant details and no photo. It was tax assessed this year for $80k, but had a tax assessed value of $120k the year before. The details don't mention any substantial repairs, but that seems like a huge drop-off to me for nothing to have happened to it. I actually saw this property a few weeks back on the MLS for $75k and thought it could be a nice buy, but never persued it. Now the price has dropped another $10k, so it has really whetted my appetite. I sent the listing agent an email requesting more info, but got back an message stating the recepients mailbox is full! Argh! Don't these people know how to manage their email accounts? :-)

More on Sub2 and Property Feedback

Sub2
I chatted a little more with the investor who wants to flip me the Sub2, and it may not be such a bad deal after all, if things go according to his plans. He mentioned that the owners are getting a divorce and just want out. Unfortunately, they got a 100% loan a few years back, so they have VERY little equity in the house. The investor said he was going to give them two options: an all-cash deal, or a take over payments deal. The all-cash deal would equate to buying the house at 75% FMV. This would be lower than if the owners were to sell through a Realtor, but time is of the essence. The owners would then have to make up the difference. In the second option, the owners would give the investor the property with the current loan in place, but also give him 6 months of carrying costs, which would equate to roughly $12,000. To me, this would be the better option since it relieves the owners of the obligation, and is about the same as going through a Realtor, but they have the benifit of closing quickly. The investor said he had an appointment with the people over the weekend, and would let me know how it went. We'll see.

Property Feedback
Well, house #1 was shown for the 3rd time recently, and the feedback wasn't too promising. The Realtor said the interior and exterior were "average", but the prospective buyers thought it was priced well above market. Granted, it's probably $500-$1,000 over market, but I don't think it's "well above" market by any means.

Lease Listing and a Sub2

Lease Listing
After discussing the lease listing agreement for the upteenth time with my wife, we decided to go ahead with it. I didn't like some of the clauses, but we have so much going on right now with other things, we don't have the time to deal with it any more. The contract is only for three months, so if nothing pans out between now and then, maybe we'll be in better shape to deal with leasing it ourselves.

I put in some stipulations such as pet restrictions, security/pet deposits, and even have the tenant paying the first $50 in repairs, however, that's going to be for non-major appliances only, such as light bulbs, smoke alarm batteries, air filter, etc. - just routine maintenance stuff.

Sub2
I got an email from a local investor who wanted to pass along a possible Sub2 my way. I told him that the numbers would have to work, but I'd be more than willing to take it on. He sent a reply with the figures, and I just don't see it working for me. The PITI is almost $1,700/month, which would be hard, if not impossible, to pay. The owners are willing to just walk away with a loan balance of about $176k on a house that's tax assessed at $179k. He had a good exit strategy, but this house is probably out of my league right now. Perhaps if I unload my current property or lease it out, I'd be more willing to take the chance on this one, but it's just too much right now.

I sent him a reply stating that it sounded good, but I probably wouldn't be able to do it. I told him if he had a retail buyer/leasee lined up already, I would go for it and pay him a nice finder's fee, but I wouldn't take it without one right now. I also thanked him and asked him for his investing criteria in case I find something for him later. I haven't gotten a reply back yet.

A Raise

I found out today that I got a raise at my JOB. My manager has hinted to us over the last several months that salary raises would be as rare as hen's teeth (actually, that's my saying). I was really shocked I got one, since I work side-by-side with people who have Ph.D.'s, and, thus, severely educationally-challenged only having a BS (hmmmm - BS?). The computer industry is still recovering from the dot-com bust, but working in a large corporation lessens the blow a little when it comes to things such as salary raises. Our company just went through a personnel cut not too long ago, so everyone pretty much thought it would be yet another skip year for raises/bonuses. While I'm shocked I got a raise, it only translates to mere peanuts per month once Uncles Sam, my 401k, FICA, and everyone else and their brother gets there dibs first. I just can't wait until my "raises" come in the form of new property acquisitions, mortgage paydowns, asset depreciation, property appreciation, etc. :-)

House #1 - A Rental?

My wife and I had some serious discussions recently about leasing House #1 out, and I have been trading emails with my RE agent about it. She sent me some updated rental comps, and the median price would give me positive cashflow. I still don't favor some of the stipulations in the Lease Agreement, but I may just go forward with it. I would still need to find a PM to deal with the day-to-day stuff as neither my wife nor I are very landlord-savvy. Even adding in a vacancy factor of one month plus 8% for a PM, the property would still cashflow positive. Of course, the big plus with leasing/renting is the fact that you are building equity with debt paydown and appreciation. I figure I can refi and pull some cash out to pay off my recovery costs to date and a have a little for holding costs until a tenant is secured.

Very Interesting Article

I was browsing the Austin-American Statesman's Sunday paper yesterday, and lo-n-behold on the front cover was an article about housing trends and the "bubble". The story goes on to say how many areas in the country (particularly California, Florida, and the Northeast) are experiencing unsustainable appreciation rates, while Central Texas has been pretty much stagnant the last few years. The premise of the story is how Central Texas will is primed to be the next big RE appreciation magnet, because of its lower-than-normal housing prices.

The graph they used, for example, shows the median housing price in the U.S. to be $203,800. In the Austin/Round Rock region, the median price is $158,300. Also noteworthy was this:

In fact, some economists predict that prices [in the Central Texas region] are headed up.

If the region's job growth continues to improve "I think you're probably going to see a 5% to 7% price increase for the next couple of years," said Mark Nash, a Chicago-based real estate broker and author. "Once the word is out that you're coming out of the flatline of appreciation, you'll have a lot of people jumping into the market, which will accelerate the price increas."

The word already is out for investors looking to snap up property in a market in which prices are poised to rise.

Very interesting news and something I've been saying myself. The dot-com bust hit this region hard in 2000-2001, and we still haven't fully recovered. Forecasts for business growth for this year and next has been very positive, which will help boost sales of houses and increase prices.

I know there are several ustin-area REI's who read my blog, and this is very good news for us. With the ever-increasing amount of foreclosures in Texas, and, specifically, this area, coupled with this bit of good news, the future looks promising indeed.