Kelly, Candy, and Champion’s Linda Chase

I spent a minute or two at Champions School of Real Estate a couple weeks ago, crashing favored teacher Kelly Logsdon Rush’s stuffed-to-the-gill Real Estate Investment class. Why? She had two fabulous guest speakers: Mark Bloom, owner of NetWorth Realty (what they call a wholesaler, he has offices in 19 cities) and Rob Barney, owner of DHLC Investments, who has loaned more than $130 million to investors. It’s what they call hard money lending, meant for a quick turnaround.

I picked up some tips for us on how to scout for value properties — go to the foreclosure sales, drive neighborhoods looking for dilapidated homes, check the city’s list of code violation citations. A few years ago I was interviewed by one of the local stations, and I said you can find homes sometimes by looking for the wheelchair ramps. Man, did I get flack for that (“insensitive!”) but man, was I right. 

Kelly has been teaching this class at Champions for twelve years. She is also a seasoned, licensed agent with Ebby Halliday. And she really knows her stuff. 30 to 40 percent of her clients are investors, and the properties she is involved with market for less time, and fetch higher prices. She has been helping investors flip homes for more than 20 years, so you can see why she teaches it.  A few years ago, I needed to get my condo leased lest I bleed reams of cash, and Kelly got it occupied in about two weeks, covering everything from the lease to the pretty towels she hung in the kitchen.

Kelly’s three basic principles of real estate investment are: (more…)

Step right up Ladies and Gentlemen ...

Step right up Ladies and Gentlemen …

The circus almost never comes to town anymore, but mark your calendars for February. I received an invitation in the mail to attend Tarek and Christina El Moussa’s FREE “Flipping Dallas” real estate class.

I say “free” because they make sure to tell us how much we’re saving:

$147 for each ticket and another $510.97 for their whiz-bang “Quick Start Kit” that includes a FREE MP3 player ($49 iPod shuffle pictured but fine print says “promotional materials may vary in color, model and appearance” so who knows what MP3 player it’ll be), FREE CD containing “50 ways to Find Your Next Flip” and if you’re one of the first 100 attendees, you’re entered to win an iPad (five given out each quarter from the many, many classes full of rubes). A photograph of the booty also shows a book.

If you’re smart enough to spot the irony of giving someone an MP3 player and a CD, you likely don’t need this class. A smart promoter would have preloaded the CD onto the player or put the whole mess onto a memory stick … but I digress.

(more…)

With plenty of growth and a booming job market, Dallas is a great place for real estate investment.

With plenty of growth and a booming job market, Dallas is a great place for real estate investment. (Photo: Daxis on flickr)

For budding real estate investors, there are few markets as ripe for the picking as Dallas/Fort Worth. With hundreds of neighborhoods and communities to choose from, an ever-growing population, and lots of demand, you can’t find a much better area than this.

Are you looking to venture into the world of real estate investing? Here are just a few reasons you should look to Dallas first:

(more…)

kelly Logsdon Rush_one 001 rvsd 8x10_web sizeRemember Kelly Logsdon Rush? Teacher of the Year and my very first Real Estate teacher? Kelly is back with a somewhat regular little segment here on CandysDirt.com called “Ask The Teach”. I know a thing or two about real estate, but Kelly knows about five trillion things, so much, in fact, that she teaches RE at Champion School of Real Estate. So I asked if she would be our go-to, all-knowing Real Estate Oz. This week’s question comes from Brad Boswell at Supreme Lending. It’s aimed at the real estate professional, because Kelly teaches a whole class in investment real estate. In fact, she recently helped me remodel an investment property. She’s a great go-to source for questions on RE investments, tenant & landlord issues, managers, HOAs, commission splits, dual agency, consumer rights, you name it, you can Ask The Teach!

Question:  As a guest speaker in your Real Estate Finance Class, I’ve heard you mention many times that it’s a good idea for Realtors to work with Investors as part of their clientele.  What are the advantages of working with investors?                  

Great question Brad! But before answering, may I ask a question? How many Realtors do you know that would give up one-quarter of their income today without a whimper?   None…right? Well that is exactly how much business realtors are losing month after month, year in and year out if they ignore the investor client. According to the 2013 NAR Investment and Vacation Home Buyers Survey, 24 percent of all residential properties sold in the US were purchased by investors and 49 percent of those investors paid cash for the property… sweet! Today, the average buyer of a primary residence will live in the property 9 years before selling compared to 6 years in 2007.  Successful investors tend to buy and sell multiple properties over the course of a year and most often work with the same real estate professional on every one of those deals. The agent has the opportunity to earn commissions on both sides… the buy side and the sell side of the transaction or the buy side and the lease side. JUST DO THE MATH! The money is a great motivation, but there are other advantages of working with investors. One huge perk I personally appreciate is developing ongoing relationships with the investors. It’s also exciting and challenging collaborating on the property’s redesign, upgrades, choice of materials, color schemes and all the other necessary pieces of the of crazy puzzle we call the rehab process. It’s a great feeling of accomplishment to help the client achieve their rehab objectives and their profit goals for the project. So who are these Investors?  Well, you might be surprised. According to the Survey here are the characteristics of the investor client:

  • Your investor’s median age is 45.
  • Your investor’s median annual income is $85,700.
  • Your investor’s property is approximately 21 miles from their primary resident.

Wait there’s more:

  • 48% are two earner households.
  • 47% are likely to buy another investment property in the next two years.
  • 58% purchased detached single-family properties.
  • 29% of the properties were 1,000-1,500 square feet.
  • 47% purchased their property through a real estate agent.

Rule #1 if you want to work with investors: Understand the investor mindset!!! And understand that this is a significant chunk of the real estate consumer audience. What does that tell consumers? This is your buying competing!  PS: Brad, the student’s just love the class when you are a guest speaker.

Dallas Housing Prices Go up

According to the most recent report from CoreLogic, the Dallas-Plano-Irving MSA ranked seventh in year-over-year home price growth among the 100 statistical areas the firm measures in its Housing Price Index with a 9.4 percent increase in prices (excluding distressed sales) through the year ending in December 2013.

Houston, which ranked sixth, showed a 10.7 percent increase in prices YoY. Leading the pack was the East Los Angeles suburban MSA of Riverside-San Bernardino-Ontario, Calif.

CoreLogic’s report showed some pretty optimistic predictions for 2014, saying that home prices, excluding distressed sales, should rise 9.4 percent over the next year, or 10.2 percent overall. That’s a decline from 2013 numbers, which had 11 percent growth in home prices nationwide. Still, national housing prices are 18 percent below their August 2006 peak.

“Last year, home prices rose 11 percent, the highest rate of annual increase since 2005, and 10 states and the District of Columbia reached all-time price peaks,”said CoreLogic chief economist Dr. Mark Fleming. “We expect the rising prices to attract more sellers, unlocking this pent-up supply, which will have a moderating effect on prices in 2014.”

Goodness knows we could use some of that moderating effect in Dallas, where investors have bought up many of the homes usually purchased by first-time homebuyers, and the prices of single-family homes are keeping younger buyers out of the market.

Lance Armstrong Lake Austin

We knew 2013 was a banner year for Dallas Realtors as our market pulled itself up by its bootstraps and posted post-recession growth that amazed even the most seasoned brokers. But according to research from the Real Estate Center at Texas A&M University, the market posted year-over-year numbers that showed Texas flexing its economic muscles like never before.

Numbers are up across most demographics, with condo sales, luxury sales, and investment properties getting snatched up at record paces.

“The Texas real estate market showed strength in sales volume and price all year long and the fourth quarter was no exception,” said Texas Association of Realtors chairman Dan Hatfield. “We’ve now seen year-over-year increases in both sales volume and price every quarter for more than two years. This makes it clear – demand for Texas homes is strong and enduring.”

We agree, as the Texas tech industry continues to boom in Austin, pushing up prices and demand reminiscent of the Bay Area’s unfettered growth. High salaries and limited inventories — the statewide numbers show a precipitous drop to a 3.6-month supply of homes (6.5 is recommended for balance between supply and demand) — have resulted in huge price increases. But, as Candy pointed out, not all growth is good for everyone. As prices increase, housing affordability decreases, pushing out lower wage earners.

But Austin’s growth isn’t isolated, as every metropolitan area in Texas posted sales volume and price increases in the fourth quarter of 2013. According to the report, 60,998 single-family homes were sold in the state during the fourth quarter — 6.78 percent more than fourth quarter 2012. Median home prices increased 8.48 percent from fourth quarter 2012 to $172,600, and the average home price was a whopping $226,216 — up 8.88 percent from Q4 2012.

Real Estate Center economist Jim Gaines Ph.D. explained: “One thing that is notable about the price increases seen in the fourth quarter is that they are relatively consistent across the state. Those increases are being seen in markets of every size, not just in the largest Texas markets, so that indicates broad-based appreciation for Texas real estate.”

“Demand for Texas homes in 2014 should continue, but it’s possible that a shortage of inventory could inhibit sales volumes,” Gaines added. “The steady price increases we’ve seen recently should help alleviate that, enticing more sellers into the market, but buyers should continue to expect to compete for desirable properties.”

Interesting outlook for 2014. What do you think? Will the growth price-wise lure more sellers to the market?

sb10065161a-004

First-time homebuyers are finding it harder and harder to get into their dream home.

The National Association of Realtors said that first-time homebuyers make up only 28 percent of the national housing market in a Jan. 28 new story, the lowest number since the organization started measuring the demographic in 2008. According to the NAR, first-time homebuyers typically make up about 40 percent of the market, but several factors are keeping them from purchasing a home, including higher competition for lower priced properties, which are being swept up by investors at increasingly high rates.

Cash purchases accounted for 42.1 percent of all U.S. home sales in December, up from 38.1 percent in November, and up from 18 percent a year prior, according to RealtyTrac.

Tight credit is also preventing younger home buyers from qualifying for a mortgage to buy a home, as mortgage lenders require higher down payments. FHA loans, which many first-time home buyers turn to for the low downpayment requirements, have seen their market share decrease recently after an increase in premiums and fees this year made them less attractive to some.

However, Fannie Mae and Freddie Mac are lending more to first-time buyers, according to a report from Inside Mortgage Finance. The share of financing for first-time home buyers by the mortgage giants reached 19.5 percent in December, up from 14.1 percent a year prior.

Dallas agents have noticed this trend, too. Keller Williams Urban agent Britt Lopez says that in 2012 and 2013, first-time homebuyers made a huge impact on the market, coming off the fence to buy properties in the $300K to $400K range. In those two years, first-timers made up about 60 percent of her client base.

“I believe that the improvement in our basic economy here in Dallas has been the catalyst for the influx of ready, willing, and able buyers into the market,” Lopez added. “I also think that the interest rates and mortgage requirements play a huge part in the buying temperature. Potential buyers pay very close attention to the media regarding mortgage statistics and real estate prices. If a threat of rising rates and prices looks imminent then they will rush to buy now.”

On the other hand, some buyers have been squirrelling away, renting to save up for a down payment, waiting for the perfect time and perfect house to make the perfect investment. While planning is a great asset, sometimes buyers have missed out on deals by waiting too long.

“I believe that there are many buyers who have been ready for a while with their credit and down payment money, waiting for the most opportune time to buy. They watch and wait and pounce as soon as the right property comes available,” Lopez said. “The shortage of property has caused multiple offers to be much more common with many first-time buyers having to try for several homes before they get one.”

Kathy Murray has found that many first-time buyers have saved up for a considerable down payment — a must now that zero-down financing is more rare than a black rhino. Murray says she sees many first-time buyers with at least 20 percent down, but hasn’t closed on a first-time deal yet for 2014.

With new mortgage qualifications and increasing rates, it’s likely we’ll see fewer first-time buyers for the remainder of 2014. What do you think?

Gawker Hip AmericaGawker asks, “What is your city’s Williamsburg? What’s its hippest—or formerly hippest—or sometimes just youngest—neighborhood, the one with the art galleries and the boutiques and the lines for brunch? (And what, for that matter, is its Bushwick, or “Next Williamsburg”?) If you don’t know off the top of your head, don’t worry. We do, thanks to the collective knowledge of Gawker readers.”

Williamsburg is a cool Brooklyn neighborhood connected to the lower East Side of Manhattan by the Williamsburg Bridge that has moved from tenements to townhomes. The ‘hood has seen tremendous growth in the last ten years, far surpassing the image bestowed upon it from a book most of us read as children,  A Tree Grows in Brooklyn, about a young girl growing up in the tenements of Williamsburg. Recall the movie Serpico, starring Al Pacino? This, too, happened in Williamsburg. The area then became a hip mixture of Hispanics, gays, bikers, hippies and pot dealers — poor arty kids — until the last few years when the rich arty kids moved in.

But hey, urban gentrification happens.

So using their mapping etc. prowess, the Gawker folks asked and mapped out the next Williamsburgs in other U.S. cities. Oak Cliff is the current Williamsburg, Deep Ellum the Bushwick i.e. “poor arty kids” hood.

Oak Cliff 4 Deep Ellum 1
Deep Ellum 3 West Dallas 1
East Dallas 3
Bishop Arts 1
Denton 1
Expo Park

Oak Cliff, East Dallas, Bishop Arts, Denton and Expo Park, yes. Glad to see West Dallas in there, too! Great lines for brunch, great restaurants. But where is the Dallas Design District? I think it’s our Bushwick. It has a gritty past — I recall real estate developer Jim Lake showing me the bullets he found in the walls of buildings he bought and cleaned up.

Lake is a developer who first began investing in DD props in the 1990’s – his father helped pioneer Design District development, and Allan Knight was his first tenant. He found the bullets when he bought a dilapidated building off Irving Boulevard that had once housed young Korean girls in prostitution servitude AND their luggage.

In 2006 he told me the area was changing before our eyes. And guess what, it has. Jim Lake Companies helped rezone the district back in 2005 to allow residential use, and shortly after built Trinity Loft, which was up and almost fully leased by 2007. You can see the case study on the Lofts here:

Even the New York Times has taken notice of The Design District — see anything about Deep Ellum? 

Five years ago, you’d have been hard-pressed to find a cocktail-craving 30-something headed to a haute bar in Dallas’s design district, a once-industrial enclave centrally situated close to the Main Street district, near downtown. But now the design district is attracting new retailers, deep-pocketed developers and plenty of shoppers, thanks to a slew of buzz-worthy restaurants, chic stores and daring art galleries opening alongside brand-new apartments and lofts.

Agree or disagree?