Millennials and first-time homebuyers are spending a lot more on renovations

That’s a positive for confidence in the housing market, according to the annual Houzz & Home Survey on residential remodeling.

“It’s a pretty strong reflection of the housing market condition,” Nino Sitchinava, principal economist at Houzz, told CNBC. “The home renovation market has mostly recovered, and is in line with the prerecession peak.”

Still, those 55 and older continue to outspend millennials, nearly three times as much. Overall, homeowners who renovated last year spent an average of $60,400, about in line with the $59,800 on average in 2015, showed the survey from Houzz, an online platform for home renovation and design.

More at http://www.cnbc.com/2017/05/04/millennials-and-first-time-homebuyers-spend-lots-more-on-renovations-survey.html

What would you do if I handed you 75k on Dec. 15th 2017?

Let’s agree that the last two weeks of the year not much work gets done unless you are working in retail.

Most of us are out shopping, visiting with family & friends or even headed out of town for a quick vacation.

Let’s say you were handed a check for $75,000.00 on December 15th, 2017.

What would you do?

Would you take a nice vacation or donate to your favorite charity?

Pay down some debt, or put down a deposit on a rental property?

Maybe all of the above?

Whatever your plans, an extra 75k will come in handy – especially at the end of the year.

Let me let you in on a little secret. A 75k check doesn’t have to exist in your imagination. It’s very possible and can be a reality in our business.

Real estate is one of the few professions that will allow you to make “chunks” of money. Sometimes those chunks can be life changing.

Very few people can work overtime between now and the end of the year and have it add up to an extra 75k. Not without sacrificing time with family and friends and maybe even killing themselves in the process.

But in our business, with a little bit of extra work, 75k is very much within your grasp.

No matter where you are in your career, you can probably make a few tweaks here and there and have them add up to some nice extra checks by the end of the year.

It doesn’t have to stop at 75k either. You are allowed to go much higher. Or lower I suppose. Choose an amount that would make a difference to you.

After nearly two decades in this business I know one thing – WE ALL HAVE OUR NUMBER.

Write your number down and bring it with you to the May WREIA meeting tomorrow night.  Then listen for the tactics that you can put into action.

Tomorrow at our May WREIA meeting in Bethesda we are going to go over tactics that you can act upon immediately so you can “bank some extra coin” by the end of the year.

Excited?

I am SUPER excited for tomorrow night.

I hope you join us tomorrow night (May 8th) at WREIA. We will open the doors for you at 6:30.

Bring your friends, your wholesale deals, and join us for some networking, education and expand your belief that other people are out here in the DC area making money in real estate.

*********

Interested in a seat or a WREIA Membership?

Save a few dollars and reserve your seat early.

Tremendous Savings and Additional
“Members Only” Perks for WREIA Members

*********

FOCUS and make 2017 a great year for your business!

Let me know how I can help you,

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

P.S. If you missed it you can find more details and a video about the May WREIA meeting inside the Mickey Mouse article posted here.

DC’s demand for multi-million-dollar condos grows – WTOP LINK

Two of the 10 most expensive homes sold in the D.C. area in March were condos.

Does that surprise you?

Not long ago, when I thought of luxury condos, it was just over 2,000 square feet of “feels like a home” with some additional amenities all maintained by someone else.  They sold well to the D.C. weekenders, or their counterparts, the DC work-weekers.

Today – that has all flipped around.  The luxury condo market in DC today has an opening and some out of town condo developers are moving in to provide the product.   Some of these condos are 5,000 square feet or more, and may include 5 or more bedrooms.

These are hardly your college age condos.  These are for the “entertainers” who want a place to mingle with their contemporaries.

Have you noticed a change going on in the DC area over the last few years?

We have always had an Embassy Row, and our local universities attract more international students than ever before.

Some of those international students have decided to stay.  And so have their deep pockets.  Many are opting for the condo life, and perhaps we see their relatives joining them.

You will find an interesting few facts about the recent luxury sales taking place in the DC area on WTOP here.

Just don’t be surprised when you see the 6,100 square foot condo priced at just under $10 million.  It could be yours for a monthly payment of $41,854/mo according to Trulia.

DC’s demand for multi-million-dollar condos grows

“Small business optimism is soaring.” – Article LINK

Re: “Small business optimism is soaring.”

As a small business owner, we all know it’s important to keep an eye on the little things.

In our last article, we pointed out how Walt Disney kept an eye on his bottom line by looking at his new mouse character who went on to become Mickey Mouse. He noticed that if he cut the number of fingers to only three, it would save him millions over time in saved animation expense.

To produce a short 6 and a half minute film took over 45,000 separate drawings. Disney was on to something when he paid attention to the small “two finger” details.

In our business of renovating homes, the small details will add up as well.

In a recent article posted on USA Today there was an interesting comment:

“Despite the generally favorable environment, small businesses face new hurdles that are increasing their costs. Fifty-one percent of those surveyed said the prices they pay for materials and equipment are higher than last year because of rising commodity costs.”

It got me to thinking.

If costs are increasing, where can we save money on a renovation and still maintain a great product when we attempt to list or lease the property?

Here are three money saving tips on renovating a home.

  1. Keep the pipes where they are whenever possible.  Moving water, sewer and gas pipes is an expensive process. You have to patch the old holes, create new access points. Many times, “easy” moves creates other change orders that will never return to your bottom line.
  2. Bigger is not always better. Unless your project was built before 1970, many times the size of a kitchen or bathroom is just fine. Additional counter space is useful, but when you buy the extra granite, you realize another additional expense that may not have been included in your initial budget.
  3. Instead of opening up an entire room, create a pass through instead. The small room will suddenly seem larger and most of the time structural issues will remain a non-issue. A good contractor can help keep you within local building guidelines when it comes to opening walls.
    These three simple tips could save you anywhere from 10-30 thousand dollars in additional contractor and material expenses on a single project.

Keep in mind, every home is different. Know your markets.

A row house in DC built in 1937 is very different from a townhouse in Fairfax built in 1987.

The DC row house probably needs everything opened up – maybe even down to the studs – and completely rebuilt.

The townhouse in Fairfax probably just needs new appliances, carpet and paint. It’s probably time to look at the roof and other exterior items. At the end of the day, the expense of opening walls and taking a 1987 townhouse “down to the studs” is unlikely to ever find its way to your bottom line.

There is a fine line between being cheap and being thrifty. Cheap can get you into trouble. Thrifty on the other hand, can put a few more dollars in your pocket at the end of your project.

As our economy continues to improve keep an eye on your bottom line.

Never stop learning.

Re-build safe.

If you want more tips like these, make plans to join us at our WREIA meeting this coming Monday, May 8th.

We are going to show you not only how to save money – no matter where you are in your career – but also how you can bring in income of 75k (or more) by the end of the year.

Some of our seasoned members will bring in 75k or more in May. But they also know if they can uncover another 75k in “side hustle”, it comes in handy at the end of the year.

Aspiring renovators might like to know how to make their first 75k over the next 7 months. We have you covered too.

Make plans to join us on May 8th. You will walk away with a personalized game plan and strategies you can pick and choose from that most appeal to you and your business.

Bring your questions, bring your wholesale deals and bring a friend.

See you on Monday May 8th!

*********

Interested in a seat or a WREIA Membership?

Save a few dollars and reserve your seat early.

Tremendous Savings and Additional
“Members Only” Perks for WREIA Members

*********

FOCUS and make 2017 a great year for your business!

Let me know how I can help you,
John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

P.S.  Are you interested in a lender or construction partner for your project? Yes, we do partnerships! We lend to and partner with people all over the DC area. Call the office and lets set up a time to talk through or walk through your project.

Why Does Mickey Mouse Only Have Three Fingers and A Thumb?

So, why does Mickey only have three fingers and a thumb?

Disney said that this was both an artistic and financial decision, explaining “Artistically five digits are too many for a mouse. His hand would look like a bunch of bananas. Financially, not having an extra finger in each of 45,000 drawings that make up a six and one-half minute short has saved the Studio millions.”

Little things, done over and over, add up.  True in every industry, including animation.

And including our business.

Great video right?  It was raining, it was cold and it was windy.  None of which was going to stop us from getting it done.

We all know that if we wait for the sun to come out, things might not get done.  Ideal conditions for this video?  Certainly not.  Just do it. No excuses.

Let me tell you, when you end the day with a long list of things you accomplished, it’s a good thing.   It’s a much better feeling than procrastinating and putting things off until tomorrow.  Right?

At WREIA this month we are going to talk about the Three Things you can focus on to make an additional 75k (or more) by the end of the year.

It doesn’t matter where you are in your career.  Making 75k over the next 7 months is very, very doable.

But – you have to FOCUS.

Don’t get distracted by too many vacations.  You can let months slip away and the year will be gone before you know it.

The sun might not come out for a few days. Don’t get discouraged.  Focus and get your next step done today.  Just keep moving.

Don’t let your lack of knowledge get in the way.  Sometimes the best way forward is just blindly taking the first step.  If you hit a wall, start looking for a door, or a window, or do whatever you have to do to keep going.   (Lack of knowledge is the silliest excuse possible in 2017.)

If there is anything I’ve learned in this business it’s this – Nature rewards action.  If you have questions.  Ask.  I’m right here.

Don’t make excuses for why you can’t make it to WREIA this month.  We are all busy.  Unless you protect your time, and block off two hours to be with other successful investors each month, you will find something else to do.  Someone or some thing will come in and steal your “You” time from you.

Block off Monday evening – May 8th – right now.  Plan to be with us.  Reserve your seat at this link. 

Get focused and get moving.

Let’s make 2017 a great year for you and your business!

John

P.S.  So what does WREIA have to do with Mickey Mouse hands?  Did you miss it?  Little things, like procrastinating, making excuses or missing WREIA once or twice, start to add up.

Discipline yourself to invest in time for yourself.  How many other places can you go in the DC area where you will surround yourself with other investors who will genuinely want you to succeed and applaud you for your success?

Know Your Enemy – Sun Tzu

Re: Know Your Enemy

Wondering why most investors are having trouble finding properties to fix and flip?

Competition?  Sure.

But look a little closer.

It’s not just you and me competing against each other.

Look a little closer still.

 

We are both competing against the banks/hedge funds and private companies.

But the banks are selling properties.  How are we competing against them?

Because they are not leaving anything on the table for us as rehabbers to make money when we renovate and flip a property.

Let me explain.   It might help to take a quick peek at the foreclosure page we have posted on our WREIA site.

The numbers don’t lie – but they will creep up on you.

The abundance of distressed properties in some form of foreclosure are in the low to middle price range.  100-200k is common across the country.  In our area it skews slightly higher.

But here is something interesting. Retail home prices across the country are dropping – slightly.  But the prices the banks are getting from distressed sales are steady.


So – who is getting squeezed here?  You the investor!

When you have a tighter margin to deal with, combined with falling prices – watch out – someone is about to get burned.  Don’t let it be you.

History tells me the banks will make out fine.  Especially if we let them get away with this nonsense of pricing the distressed homes too high, especially with their marginal renovations.

It’s especially tempting for us here in the DC area.  MD is near the top of the nationwide leader-board when it comes to foreclosures.

So what can you do to protect yourself?

1.  Don’t think it’s a deal just because it’s a foreclosure.  Most of the margin has been squeezed out for investors.  (Your mileage may vary.)

2. Be careful if you are investing in these heavy foreclosure areas.  Know the inventory.  When banks dump these properties on the retail market, prices drop.  Economics 101.

3. Be smart and don’t over-renovate.  I see new investors putting tons of upgrades into homes in neighborhoods where the bank inventory is their competition.   For the first time home buyer if they can save 50k and buy a bank renovated property with new paint and carpet only – they will be happy.

Lastly – put a good team together.  People that know the local markets.  Odds are pretty good that a “mentor” from a high priced coaching system sitting at a desk in Ohio or Utah doesn’t know the difference between Capitol Heights and Capitol Hill.  They certainly are going to have a hard time helping you on a street level basis.

Our guest speaker at WREIA this Monday night knows the local market.  She is a mortgage pro at a local bank and has been an investor as well for a number of years.

Some of us think of business as going into war.  Every day you face an enemy.  As Sun Tzu points out – you need to know your enemy and know yourself.

If you need help understanding the money end of this business, and how specific mortgages can help sell your properties faster – join us Monday at WREIA.  Your going to learn or be reminded of a few things.

It’s not 2007 any more and some of us need a refresher to fully understand the 2017 market.  Knowledge is power in this business.  Sun Tzu would agree. 

It helps tremendously to have a local mortgage pro on your team who understands mortgages but also knows what it’s like to be an investor in the DC area.

Are you just getting started?  Or maybe you need financing for your 4th rental property?  Either way, April 10th will be a good night for you to come out and get an insiders perspective on lending in DC and the surrounding areas.
Bring your financing questions, bring your wholesale deals and bring a friend.
See you on Monday!

*********

Let me know how I can help you make it happen,
John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder
P.S.  Interested in a lender or construction partner for your project?  Yes, we do partnerships.  We lend to and partner with people all over the DC area.  Call the office and lets set up a time to talk through or walk through your project.