My Charlotte Properties

The Stress Balance

2011-03-07T07:59:00.001-08:00

I think I'm finally starting to take a day of rest each week, to turn my mind off to real estate (mostly), and enjoying a relaxing day of down-time.

A career in real estate is littered with moments of relaxing freedom, but counterbalanced by the occasional 80 hour 7 day weeks. In spite of this, there is control, the long weeks are only long if I choose them to be. I think I'm liking this.

The biggest challenge I have dealt with is trying to battle the constant possibility of burnout. In most idle moments, my mind begins to scream that I am not doing enough, that I need to do more marketing, organizing, or networking. I think I am starting to gain control of these outbursts and its good. I am learning that planning is the key, if I don't plan rest into my schedule, I will burnout.

The Power of Mortgage Rates

2010-07-09T07:47:00.001-07:00

In light of the record low interest rates, I wanted to show the real power of buying a house with a low rate. For this example I will look at a $200,000 mortgage in two distinct time periods, with the only variable being the interest rate (insuarance, PMI, fees, taxes, etc. are not included in this example).

In August of 2008, the average 30 yr FRM rate was 7.00% (hsh.com), with a $200,000 mortgage (P & I only), your monthly payments would be $1,331 and you would pay a total of $279,016 in interest over the life of the mortgage. Yesterday the average 30 yr FRM was reported to be 4.57%, with a $200,000 mortgage (P & I only), your monthly payments would be $1,022, and you would pay a total of $167,816 in interest over the life of the loan.

Just by having a few points lower interest rate, you would be saving over $111,000 in interest over the life of the loan, and hundreds per month on your payment. To look at it another way, for the same P & I monthly payment of $1,331, you could have a $200,000 mortgage at 7.00% or a $260,000 mortgage at 4.57%.

If you also factor in the incredible buyers market we are now in, what you can buy for $260,000 today would not even compare to what you could buy for $200,000 2 years ago. I have recently been helping many buyers who understand the power of these low rates, and I hope that this example will educate others so they might not have any regrets when interest rates start to climb again.

Motivation in The Face of Stagnation

2010-06-25T07:47:00.001-07:00

In a career that is almost entirely dependent on self-motivation, it can become very easy to slide into stagnation, even to the point of accepting mediocrity. I have come to realize that if I don't make myself aware of this and attack it head on, I will have no choice but to circum to it.

Developing simple and successful habits is one of the best ways I have found to combat mediocrity. Things like waking up early, exercising, scheduling, and planning down-time are vital to continued success. I am amazed at the difference in the amount of work I complete on days that I wake up after 8 and before 8. I also find that when I donâ€™t purposefully schedule time for marketing, phone calls, and down-time, I feel overwhelmed and pressured.

I know I need to purposefully and continually develop these habits, since success only comes from a continued pursuit of right living, and the alternative of mediocrity is simply not an option.

The work/rest balance

2010-03-12T07:05:00.001-08:00

Lately I have doing far too much of the former. The tax credit is coming to an end and people are starting to pile in to try and qualify. I felt like I had a good handle on the balance between work and down-time, but now I have been starting to ask myself, at what point to I start telling people no?

Don't get me wrong, I'm certainly in no position to complain, and this steady increase in business is certainly an undeserved blessing, but my dilemma still persists. I find that when I work too long, I can quickly develop a sense of bitterness and unimportance to anything that is not work related, but swinging to the other extreme, of pure slothfulness is just as debilitating. What ever happened to the good ol' 40 hour work week?

I guess at the end of the day, there is no quick fix to the dilemma, its all about consistently striving for that balance. Work is needed, but if we put it above all else, we will soon realize that our life has been wasted in the endless pursuit.

Instability

2010-02-09T07:04:00.001-08:00

I think about the definition of instability, how it always denotes a negative meaning, in both personalities, jobs, and life in general. I have been realizing lately, however, that there really is value in it.

As a Realtor, my job could easily be the definition of instability at work, especially in this economy. Many of my clients have been pursuing foreclosures, and recently about one quarter of all those on the market have been littered with liens. I have also seen clients loose their jobs or get relocated while we were under contract, causing their financing to fall through.

I think because of this instability, I have grown stronger, both in the way I live my life and in the way I run my business. Instability forces growth, but I also think it creates a unique sense of excitement. Each day is unique and filled with the opportunity for stress and worry, but with each new crazy situation, I get two new leads. At the end of every day I can't help but say that God is good.

Vintage 2009

2009-12-31T13:54:00.001-08:00

The year is about to end, as is the decade. Looking back, all I can do is smile. Life has certainly been good so far and I'm excited to see it continue to get better!

This last year I was privileged with buying and rehabbing two homes here in Charlotte. I certainly felt the stressed at times, but I think I've learned a little better about how to deal with it.

As a real estate broker during one of the worst real estate downturns of all time, I truly feel blessed to have a continued stream of business. I even surpassed my 2009 goal for clients. With most economists and industry experts forecasting an improving economy for 2010, as well as the extended first time buyer's tax credit, I'm thinking 2010 is going to be a great year!

The Luxury Homes of Yesterday

2009-10-30T13:11:00.001-07:00

I was walking through a home yesterday while on a property tour and I was really taken back. The home was built in the 70s, but the remarkable thing, besides being in great shape, was the original features it had.

It was clear that this home was the crème de la crème when it was built. When I first walked in the front door, there was a brick half-wall about waste-height which was built in as a planter. I walked through the huge family room and past the full wall brick fireplace, and around the corner in the kitchen, I noticed the built in com system and am/fm radio control center, with signal to each room. The home had 2 porches and ornate metal and wood work all over the place. Even the window sills were made out of exotic tile. Today it is nothing more than an average home in an average neighborhood, but I couldn't help to think what life used to be like in this place of yesterday's luxury.

Busy Freedom

2009-10-19T06:22:00.001-07:00

A career in real estate is littered with moments of relaxing freedom, but counterbalanced by the occasional 80 hour 7 day weeks. In spite of this, there is abundant control, the long weeks are only long if I choose them to be. I think I'm liking this.

The biggest challenge I have dealt with is trying to battle the constant possibility of burnout. In most idle moments, my mind begins to scream that I am not doing enough, that I need to do more marketing, organizing, or networking. I think I am starting to gain control of these outbursts and its good...

Today's construction style

2009-09-18T15:04:00.001-07:00

I was with some clients this morning as they began the process of collecting and evaluating contractors bids and I was reminded of the almost 30 year style and design consistency of homes built in Charlotte. Transcending neighborhoods and socio-economic lines, most all homes built between 1950-1980 in Charlotte are comprised of one story brick homes with hardwood flooring, and 3 bedrooms and 1 ½ bath. I think it is remarkable how many homes are similar. As with the style of the day, the homes also have rooms that are more enclosed, with a narrow hallway down the center of the house and usually only two small doorways into the kitchen.
The primary style of houses today is almost entirely opposite, with varying exterior colors, and materials, and interiors consisting of large, open living areas, flowing kitchen and dining rooms, and bedrooms surrounding the living spaces, as opposed from separate from them.
The clients this morning raised an interesting perspective. Should they really start knocking down walls and conforming the style of the old home to today’s modern feel, when in a couple years, styles and trends will again change? Will design and construction trends go back to more enclosed rooms and living spaces, or will today’s style remain - something to think about.

The real estate buying process

2009-08-31T14:57:00.000-07:00

What may seem like the most daunting task of your life is often a relatively straightforward process, if it is approached from the proper vantage point. From the time a client begins searching for a home to the day they close, usually involves about 2-3 months, and this time can either be smooth and enjoyable, or painful. The two most significant obstacles during this time are the loan underwriting, and the inspections and appraisals.

Securing a mortgage has certainly become more difficult since the recent economic downturn, but it is still a relatively easy process if you have sufficient income. Typically it involves a "two step" process of, first, getting pre-approved, than full application and appraisal, once a house is found and secured under contract.

While the home is under contract and the underwriting is in process, the inspections (pest, structural, mechanical, survey, radon, etc.) will prove to be either the solidifier, or deal killer. This is where an initial visual inspection by the realtor and client is crucial, since, if the inspections show significant problems and the contract is terminated, the inspection funds are non-refundable.

Depending mostly on the parties involved, the home buying process is often a relatively smooth and even enjoyable journey, but just like anything else in life, the keys to success are knowledge and planning.

I posted some tips regarding what to look for as you begin to search for your new home.

Finding just the right home

4 Months in the Belmont Rehab

2009-08-24T14:00:00.001-07:00

I went over to the house this morning to finish some joint compounding in the bathroom and I see that some of the new sheetrock I put up is moldy. The leak is apparently coming from what I thought my dad and I had already repaired, an exhaust pipe coming from the waste plumbing in the back of the house. I added another layer of roofing tar hoping that will be enough.

It has been almost 4 months of going to the house about 3-4 times each week and I gotta say, it’s starting to wear me down. I know that in any endeavor, whether that be a new job, project, home, or even relationship, reality starts to sink in and the novelty of it all is gone after a few months. Now it’s just a matter of mentally pushing through. I continue to see the finished project and I continue to feel as though it is so far out of reach with each new problem that arises.

I think I just need a little break from it all. In the end, it will be more than worth it. On another bright note, my real estate career is really taking off!

Offer fail due to FHA financing

2009-08-11T15:07:00.001-07:00

After about 6 property tours searching for a very specific type of home, one of my clients finally fell in love, however during the property search, the home was put under contract. A few days later the contract fell through and I notified her that the house was back on the market. Needless to say, she was excited. We were informed that there was already one other offer on the table, so we put in an offer for full price. The next day, the listing agent called me and informed me that the seller had decided to go with the other home offer, due to the fact that the buyer was able to have a conventional loan, even though we offered a higher price.

This is just another example of the challenges with buying property using an FHA mortgage as opposed to Conventional. Using FHA may save on fees, but it certainly makes for a much more challenging home buying process.

The perils of the FHA 203k loan program

2009-07-17T19:03:00.001-07:00

I have recently been hearing many people rave about the incredible program put out by the government, commonly called the FHA 203k loan. It essentially allows for repair money to be wrapped up into a new buyer’s mortgage. Here is an excerpt describing the loan from HUD’s website;

“…When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan.”

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

My most recent client, who just closed on a home in Plaza Midwood, pursued this loan and we were both shocked at how bad this program was. To start with the contractors that are chosen to do the work are withheld 10% of their invoice until all work on the house is complete, with the rational that there is a reserve for the homeowner. The 203k consultant must come and inspect each time a new section or project is complete (with the homeowner having to pay them each time). Perhaps the most outrageous aspect of this program is what we experienced in regards to the consultants estimate. He quoted the repairs (what my client would be forced to borrow) at just a few hundred dollars over the amount for which he would be paid the highest amount possible. Even after we got the seller to make some of the repairs, the consultant would not remove those specific quotes from the estimate. We quickly decided to change loans to a standard FHA loan, with my client planning to borrow about half of the quoted repair costs privately, since that is all it would really take to make the needed repairs, but we still had to pay the consultant for his outrageous estimate. I would strongly suggest that anyone looking to buy a home, stay away from the 203k program.

Why I started selling homes...

2009-07-07T12:47:00.001-07:00

In perhaps one of the most unusual housing markets of all time and on the eve of achieving my MBA, I launched my career into high risk, often unstable Real Estate brokerage. Some might look from the outside in and wonder why I would chose such a risky path, and one which did not even remotely require my Masters of Business, which took me the past 6 years to achieve. For me, however, the decision was clear and natural. I have always been around real estate transactions as that is what my parents have always done, and often times as a child, my family would take trips through neighborhoods just to look at homes and search for real estate deals.

Owning a contracting business in undergrad allowed me to see the rehab side of things, how homes are built, what can go wrong, and how to fix almost every aspect of a house. In graduate school I learned the in depth processes of real estate valuation and investment analysis. Upon graduating, I was working as a Realtor in the new homes sector for about 6 months and personally owned 2 investment homes of my own, so I will repeat once again. The decision to enter general brokerage in the often times risky industry of Real Estate was actually very natural and clear.

I am confident this is the path God has directed me too, especially given the recent success that I have been seeing. At this point, I love the work and I love helping people make what often times is the biggest decision of their lives.

Should I buy a home or should I rent?

2009-07-01T08:20:00.000-07:00

One of the truest statements I hear people say is "I'm sick of throwing money away by renting." Renting certainly has its place in certain circumstances, such as those with very damaged credit or singles only interested in one bedroom apartments or even studio apartments. For the majority of people, however, home ownership has some incredible advantages over renting.

Owning real estate offers three powerful and distinct advantages over renting (specifically in regards to mortgages vs. monthly rent). The first being that a portion of each monthly payment is principle, whereby homeowners are essentially putting money in savings by increasing their equity and decreasing their debt in their property. The second advantage of a mortgage is that all of the interest portion of the payment each month is tax deductible, unlike monthly rent which provides no tax advantage. The third and sometimes most powerful advantage of owning properties is the appreciation factor. Studies have proven (one study in particular looks at a 400 year time span in Europe) that over time, real estate increases in value an average of 4% per year, whereas inflation has historically increased at an average of less than 3% per year. If you owned a $200,000 house, you would essentially be building $2,000 per year in real dollar wealth.

To really understand this, lets look at a beginning mortgage payment of $1,000 per month vs. a rent payment of $1,000 per month. Lets say that for a given month of the mortgage the principle portion of the payment is $100 and the interest is $900, that is like $100 each month is going directly into savings. The $900 portion of the payment can be deducted from your income taxes, so if you were in a 25% tax bracket, you would be saving $225 per month off your income taxes. For appreciation, if we use the $200,000 house example, our wealth will be increasing at $2,000 per year (with inflation factored in), that would be $166.70 per month. If you add all these up, you would basically be putting $491.70 in your pocket each time you made a $1,000 mortgage payment. You would be putting $0 in your pocket each time you made your $1,000 rent payment.

Charlotte's Belmont Community

2009-06-22T13:37:00.001-07:00

Since investing in a home in the community, and having gone to church there as well, I have become very close to the community of Belmont. Not to be confused with the Town of Belmont in Gaston County, it is located just outside Charlotte's Center City and the I-277 loop, bordering 1st ward to the east, and Villa Heights to the west. The community is currently undergoing a revitalization much similar to other rebirths that took place in Wilmore, Wesley Heights, and Elizabeth.

There have been several new mixed income housing projects completed in the past few years, perhaps the most extravagant being Seigle Point, which sits right on the up and coming Sugar Creek Greenway. In 2003 the city put into place the "Belmont Revitalization Plan" which included several million dollars in infrastructure grants, and low interest subsidies for private commercial and residential revitalization of the area. Real Estate prices in the area have been on a steady incline over the past decade, and don't show any signs of slowing down anytime soon, Belmont's future is certainly looking bright!

Housing may be recovering, and fast

2009-06-15T14:34:00.000-07:00

Real Estate markets have certainly seen one of the greatest downturns in history, in regards to dollar value decline, but like any other commodity or market item, real estate too has its highs and lows. By many indicators, its seems that we are in the low and actually starting to see an increase in values, as evidenced by the following three major factors;

* The inventory of unsold homes is coming down rapidly from the peak levels of last year. Hovnanian has even sited shortages in some previously saturated markets.
* Housing affordability has improved dramatically from its all-time low levels in recent years.
* Buyers are emerging and markets are “clearing” in some of the hardest-hit areas, like Phoenix, Sacramento and Las Vegas, and it seems clear that these buyers are much more than hurt investors looking to make back what they lost from the downturn.

It is certainly possible that the apparent bottom we are now in may prove to be the eye of the housing hurricane when all is said and done. Yet, it would certainly be a mistake to dismiss the improvements that we have been seeing. Too many observers are busy looking in at the past rather than focusing on the reality in front of them.

Information from Yahoo! Finance http://ping.fm/v6Q86

1,014 New Jobs Announced in Charlotte

2009-06-11T13:42:00.000-07:00

Many will look at this economic downturn we are now in and see nothing but negatives. My philosophy has always been to look for what is good about any particular situation.

Neighborhood Assistance Corp., a Boston based non-profit organization just announced their plans for expansion in East Charlotte. They are planning on adding over 1,000 jobs over the next 5 years. I would certainly call this good news and will most certainly help home values in the East Side of Charlotte.