Everyone knows that as interest rates rise, real estate prices drop.  It is only natural.  If the current interest rate is 4% on a $300,000 loan, the monthly PI (Principle & Interest) payment is $1,432.25.  If the interest rate goes up to 7% and the average buyer can only afford a monthly payment of $1,432.25, then the maximum amount they can borrow goes down to $215,277.40.

This is affectively what has happened over the past year and a half, so why have prices continued to climb?  That’s a great question and can be explained by the extremely low inventory levels.  The level of inventory has been so low for so long that the principles of supply and demand have caused prices to increase dramatically. 

In other words, if interest rates hadn’t risen so much so fast, the average loan balance may have risen to $565,000.  That is what the borrowers could afford based on the current average monthly PI payment of $2,700 and an interest rate of only 4%.

The following chart shows the affect interest rates have on a borrowers ability to pay over the past 18 months.

In the dynamic world of real estate investing, successful rehab projects require a meticulous approach that minimizes risks and maximizes returns. The key to achieving this lies in "bulletproofing" your rehabs – implementing strategies that ensure your projects are completed on time, within budget, and with maximum profitability. In this article, we will explore the six essential keys to success in rehabbing properties. By incorporating these principles into your projects, you can increase your chances of achieving guaranteed success.

Key 1: Understanding the Main Elements in Every Rehab

A thorough understanding of the main elements involved in a rehab project is crucial. From assessing structural integrity to identifying potential issues, this key emphasizes the importance of comprehensive property evaluation. By conducting detailed inspections and accurately identifying necessary repairs, you can establish a solid foundation for your rehab projects. Having a checklist is a must. Just like a pilot relies on a checklist before takeoff, investors should embrace this practice to ensure every crucial element is addressed.

A checklist serves as a valuable tool, helping you stay organized, minimize errors, and maximize efficiency throughout the rehab process.  

Key 2: Crafting a Well-Defined Scope   of Work
A well-defined scope of work serves as the backbone of every successful rehab project. It is the foundation upon which your vision is communicated ... Read More…

 Are You Working on the Wrong Things

By Barney Zick (Ron LeGrand)

There’s a common mistake I see students making repeatedly and it doesn’t seem to matter if they are new or been around awhile. That mistake is:

Doing Everything They Can to Feel Busy Except the Critical Things Required to Stay in Business.

It’s so easy to be busy. Anyone can do it and most people would say they’re very busy almost all the time.

“If I only had more time.”
“The days just aren’t long enough.”
“So much to do and so little time.”

A rat in a circular cage is busy running in circles but getting nowhere. Pretty soon he has a heart attack and dies. Being busy will not make you rich. In fact, it can have the opposite affect and prevent you from ever achieving wealth. Don’t get me wrong. Rich people are busy too. I’m very busy most of the time. Always something chasing my attention. An endless supply of things to work on that sucks up my time. 

The difference is I constantly and consciously work on…only those items I can’t delegate and are worthy of my attention.

Minutia is a deadly disease that steals away the most productive time of your life and robs you of the great things you could accomplish…if you only had time.

Well, I suppose I don’t have to tell you that we all have the same amount of time in a day and no bonus hours will ever be added. Rich people and poor people alike ... Read More…

Learn the Secrets to Creating A Wildly Profitable Business You Love That Runs On Autopilot

My Property has Sustained Water Damage, so the question is:
"Now what do I do?"
The First thing to do is answer these questions:
*Where did the water come from?
*What caused the water damage?
*Is the water damage covered?
*Do I have the right coverage?
*Do I have enough coverage?
These are the questions that hit us when water damage has occurred. It pays to be prepared!
*Did the water come from the outside into the property or did the water start inside the house and mover out of the stricture?
There are many avenues for water to sneak through, so let's examine some of them. The question of what constitutes  a water claim and what constitutes a flood claim creates a great deal of confusion among insureds. Water claims are submitted as flood claims and flood claims are submitted as water claims. Insureds may think "What's the difference and why should I be concerned?" There's a big difference between the two losses. Flood claims require their own policy, whereas water claims are covered under your hazard policy. 

"Wind caused a tree limb to break, which in turn broke my window or punctured a hole ij the roof. It was raining and water entered in through the window and soaked my flooring, ceiling and walls. Framing around the windows had been damaged by the tree limb and water"- This is technically Wind Damage, which is normally covered under your property policy but may have a separate deductible.

"I woke up to find that the storm last night had caused water to rise  and com ... Read More…

Partnerships

If you have everything you need to run your business, there’s probably no need for a partnership. A good partnership is created by finding someone that has a gift, talent, or resource that you don’t have. 

An example is maybe you are good at finding and acquiring great deals but you need a money partner. Or you are good at repairs but not good at managing tenants.

There’s a little more to consider when seeking a partner. I have had many partners in my real estate business and I have much experience to share that may be helpful in your future endeavors.

When you find someone that seems to be a good fit, check the court records for any civil suits or find out if they have any liens or judgements against them, Depending on how you plan to take title to property, you would not want anything to attach to your deals. Also do a google search to see if there is any bad publicity  present. You can’t believe everything on the internet but your customers and associates may see it and pre-judge your business.

I like to spend time with a potential partner by going to dinner,  meet at coffee shops or even a baseball game to get to know their character. Do they have good values or do they have a screw people attitude. Do they have a good work ethic or do they brag about being lazy. I always ask if they play golf because you really find out their true character on the golf course. I saw an interview with President George W. Bus ... Read More…

*Highlights from the Stimulus Bill of 12/20

Senator Portman (R-OH) worked hard to get a deal done on additional COVID-19 relief, and was a key negotiator on housing related issues, especially the Emergency Rental Assistance, detailed below. The bill passed with only a handful of Senators and several Congressmen opposing it. The bipartisan package authorizes a second round of PPP loans for the hardest hit small businesses, additional unemployment benefits, support for health care providers, additional funding for vaccine development and distribution, funding for testing and tracing, and funding for a litany of smaller programs.