The Path of Progress

They say buy in the path of progress.

This is the George Bush Turnpike as viewed eastbound from the Firewheel Parkway overpass. It is due to open Spring of 2011 and will extend to Interstate 30. You can already take it westbound past I-35 and then south to I-30 and I-20.
This extension puts North Garland, Sachse, Rowlett and East Garland squarely in the path of progress. It can reasonably be concluded that long term property values will be positively impacted.

Someone in California seems to agree with me.



In-N-Out is coming to Garland! Not Plano, McKinney or Southlake but little ole Garland. It seems there are plans to expand into Texas in a big way but the decision to put the first one in the Firewheel Mall would seem to support my point.
I have a particular fondness for In-N-Out as a double-double once saved my life in Las Vegas.

This is a good time to make the distinction between investing and speculation.
Investing is buying based on current conservative fundamentals.
Any future upside is strictly a bonus.
Speculating is buying based on something else happening, like the Tollway being diverted through Melissa or Cowboy Stadium being built in Fair Park, both of which did not happen.
Another word for speculating is gambling.
I am not a fan of gambling in Real Estate.
The stakes are usually pretty high.


Although my primary focus here is residential investing I must point out that right now is likely a historic alignment of low property values and low interest rates.
The last time we had a big Real Estate bust in the 80s interest rates were really high.
If are even slightly interested in exploring the current market let me know and I'll run a quick search. Sellers are super motivated right now.

I've always been curious but...

It seems to me that a lot of people think they might like to own some residential rental property. There are many good reasons top do this. An investment rental property has five distinct financial benefits

1.Equity Capture
This is a fancy way to say that if you buy at a discount you have already made some money on paper. While this may be the case it's important to realize it may be awhile before you liquify this captured equity.

2.Cash Flow
You buy the house, fix it up and find a tenant. They go to work everyday and at the end of the month they write you a check.
Done correctly, it will be for significantly more than whatever payment you may have on the property. This type of income just seems to make people happy.

3.Deductions
If you make more than $10 an hour you should, in my opinion, have a CPA. If you are going to add rental property to your portfolio they should be knowledgeable about this business. There are a lot of deductions than can be taken the most significant of which is probably mortgage interest. Even if you have the cash to buy a property it could very well be a better strategy to leverage it at today's historically low interest rates.

4.Appreciation
It will appreciate. Someday. Hopefully sooner than later.

5.Depreciation
Ask your CPA about this one. It's the best part.
With a few properties you can offset a significant amount of income.

If you are interested and would like to know more, like the best way to find discount properties, post a comment or email me.

Tell me the one about the purple toilet...

Welcome to the inaugural post of the soon to be famous Mike Perry blog. I have sent the link for this to about a thousand people so I should have at least three or four readers.
I will endeavor to inform and entertain.
Most of you know me from the Real Estate industry.
Some of you remember me from my days running a little place called Del Frisco's.
I'm reaching out to everyone to reconnect and rekindle.

So to get this started I'm going to share one of my all time favorite deals I did a couple of years ago. I bought this home in downtown Caddo Mills for a ridiculuosly low price. With out going into sordid detail here let's just say it was distressed.



The bonus was that it came equipped with this one of a kind designer throne. The whole house had been decorated in similar fashion by the "residents".





We just cleaned this place out and sold it as-is on the MLS for a tidy little profit.
I have a few more gems like this I"ll share from time to time.
This is the kind of thing you run into in the wholesale side of the business.

Wherever I go there always seems to be a lot of interest in real estate investing. I am here to tell you that it is not a get rich quick game. Like anything else there is a lot of hard work involved but there is a corresponding reward and the chance to hit an occasional big lick.
Right now, the market is prime for acquiring longer term hold rental property.
There are a lot of formulas you can use to analyze deals.
The hot one now is 50x rent.
It is literally possible to acquire, rehab and lease a decent suburban Dallas for 50 times what you can rent it for.

For Texas A&M grads that means if you rent it for $1000 you can buy it and be all in at $50k.
Somebody calculate what that would be as an annualized ROI.
I think it's a pretty high number.
Now, 50x rent is the upper limit and this time of investment is not very liquid so it's not for everyone.
If you want to hear more, let me know.
Going forward, we will cover other topics according to Mike including all types of renovation and repair, retail transaction tips and hints, appraisals, inspections, bank loans, hard money and more.
I might also share the occassional stolen recipe.