We already knew that Houston was a great place to live and work, and now Kiplinger agrees! Reasons for the Bayou City’s top ranking include our rapid job growth, low cost of living, and fine arts outlets.

On a (possibly) related note: the market perked up this weekend! We negotiated several contracts and received a ton of calls on Saturday and Sunday. Now is THE time to list! Catch the ’summer rush’!

A great article on the past, present, & future of Houston:

http://american.com/archive/2008/march-april-magazine-contents/lone-star-rising

“Over the past decade, Houston, Phoenix, and Dallas each have matched the employment growth of New York, Boston, San Francisco, and the Silicon Valley area combined. One of the most powerful weapons of opportunity cities in this contest is the growing divergence in costs between them and “superstar” cities. The latter clearly provide somewhat higher wages to professional, financial, and engineering workers. Yet for most people, the vast differences in the cost of living and real estate prices allows professionals working in Phoenix, Charlotte, or Houston to enjoy a considerably higher standard of living.

Over time, these cost differences, as well as the associated continuing shift in employment opportunities, has begun to alter one of the most critical indicators of future economic growth: the flow of educated labor. Indeed, since the late 1990s there has been a rising outflow of workers with postsecondary education from increasingly expensive cities like Boston, New York, and San Francisco and a parallel shift toward more family-friendly, modestly priced metropolitan areas. “

Over the next few months, we will be rolling out neighborhood-based websites containing blogs, community message boards, neighborhood history, homes for sale, and recent sale data.

We feel these organic-type sites will provide a good place for neighbors to chat about issues, promote events, and at the same time solidify us as authorities on these communities.

If you read the newspapers and watch TV, the economy is headed down the wrong track. If you work in Houston real estate and don’t pay attention to the media…. you’d never know!

January 2008 has started off strong for most agents I know (myself included). The recent rate cut by the Fed has allowed clients to get in the upper 4%’s on 15 year notes, and low 5%’s on 30-year notes! I personally will be re-fi’ing a higher rate 2nd lien that I have, and should save several hundred dollars a month!

Although the market is strong, the foreclosure wave brought about by subprime lending continues to roll. The difference for Houston is that people here are taking advantage of this chance to get good deals & purchase investment property! Our market never “bubbled” like so many states (CA!), so the prices are stable and in many cases increasing!

If you want to take advantage of this market, and help pad your retirement, talk to one of our investment real estate experts about purchasing some single-family or multi-family income property.

There are quite a few good deals available right not for folks seeking rental property.  These are all fairly rapidly appreciating areas, and areas in which builders will be seeking lots within the next few years.  The rental cashflow may be light, but appreciation is the upside here.  Contact me or anyone here at the CityLife team if you’re in the market.

Aside from the usual hoilday slowdown, the Houston housing market continues to click along. The out-of-state investor business should continue to pick up, but Realtors need to be wary of these folks. I don’t know how many California “investors” have called to ask me to send them investment-grade listings. When I send them a Buyer’s Rep Agreement first, I never hear back! Basically these guys are looking for every Realtor in town to show them a listing, and then they’ll hire an agent who will kick them back almost all of the commission. NEVER WORK WITHOUT A BUYER’S REP. EVER. NEVER EVER.

Anyway, coming back from that tangent…….

I continue to be optimistic about the future of our market. While prices in inner-loop and inner-beltway properties continue to climb, we are nowhere near a ‘bubble’. I know it has been said over and over again, but Houston is one of the most affordable cities in America. People are moving here from all over the country, because they can live in the best parts of the city for the price of a Los Angeles or Boston middle-class suburb.

This website needs no introduction. Just watch & smile. And take the tedst.

www.tedtruitt.com

I am a big buyer of real estate & investing books. My uncle (who is an investor that I work with on a daily basis) told me a long time ago that: “if you get one good idea from a book, or tape, or seminar…. it was worth the money”. I wholeheartedly agree!

The bookshelf behind my office desk is filled with real estate sales books, real estate investor biographies, and ‘millionaire’ books. I have to admit that most of the books from the latter category are full of crap, and many just regurgitate the same information. In almost every book, however, I find one little nugget that makes the $24.95 worthwhile.

You know the Carleton Sheets tapes? Yes, I own a few. No, I don’t buy into most of what he says. But…. YES…. there are many things that Carleton brings up that make me think. And THAT’s what makes it worthwhile. You have to get that seed planted in your head and work the problem while you’re driving. While you’re lying in bed. While you’re jogging. I find that my best ideas all come from a ’seed’ that germinates while I’m doing something mindless.

I have taken the advice of my web guru and moved my blog to WordPress.  The move is mostly so I can point my DNS servers from blog.citylifebrokers.com to citylifeblog.wordpress.com.  WordPress also seems to offer more customization options.  Blogger was easy to use…. it just wasn’t powerful enough for me.

You may have noticed that I moved some posts over here.  I have not been very faithful with updating my blog, and I only moved the ones I thought were worthwhile.

I plan on blogging more this year, so stay tuned!

When figuring out the ARV of your rehabs, there’s a little more to it than applying the highest price per foot (PPF) comp. As I mentioned in another post, there are some unscrupulous wholesaling companies that trick a lot of first-time investors by using that method. There are several other considerations:

1. What’s the most important thing in real estate? LOCATION. If your property has a less favorable location than the highest comp, you’ve gotta figure out what the discount is. For a really bad location it may be 20% or more. (And expect a longer sales time)
2. Average square footage of comparable sales is another big factor. Appraisers talk about conformity, and your property must come close to conforming to the neighborhood norms. A general rule is that smaller square footage properties tend to bring a higher PPF (trending UP towards the median prices) while larger-than-average properties will bring a smaller PPF (trending DOWN towards the median prices). I usually tell folks that +/- 200 sq ft of the average you are safe with the simple math.
3. This is another one that falls under conformity. If all the properties have a garage, and yours doesn’t….. you gotta discount. If all the homes are 4 bedroom while yours is a 3, you gotta discount! Any feature found in the “average” home in your area that yours is lacking must be accounted for! Conversely, you cannot always give credit for extra or unusual features. The best example of this is a swimming pool. I have people tell me all the time that they spent $20,000 on their new pool, so their house should be worth an extra $20K. Pools are a funny thing, and should probably be covered in another post….. but the short answer is that many people see them as a liability (financially and legally) and do NOT want one. The only instance that you would give a pool any real value is if the average house has a pool. This applies to other things such as hot tubs, really high-end appliances, extravangant mouldings, etc
4. Aesthetics. Here in Houston a majority of the homes were built during the post-war 1950’s boom. While most of these one-story ranch style homes are attractive, this is also the era that produced what is now called the “Mid-Century Modern”. Also called “contemporary” homes, these elevations featured flat or low-pitched roofs, unusual stonework, globular light fixtures, and all the cutting-edge technology of the day! IN GENERAL, these houses are not as desirable as the ranches, and typically do not bring top dollar. There is a contingent of Mid-Cen fans out there, and lots of them restore these homes to their original George Jetson-like 1950’s ‘charm’. One neighborhood where these houses are common is Glenbrook Valley. Click here to visit the neighborhood website to get a taste of this era of home.

There are exceptions to any rule, and it only takes one buyer that falls in love with the house to make your deal great! The question is, when figuring out what you can pay for a house…. do you want to gamble on that one buyer coming along?

I hope these few tips will help you avoid some of the pitfalls in estimating your ARV or in pricing your investment properties!