Does it make economic sense to build a new, custom home?  That has been the key question the past few years for most home buyers in the greater Charlotte, NC and Lake Norman, NC markets.  The main reason was because there was and is so much inventory out there that it was hard to justify the new home price per square foot vs. existing inventory price per square foot.  On top of that, if you segment out the distressed inventory (short sale, foreclosures, REO’s, etc.), those price per square foot numbers were dropping the averages even more.   For the past few years I’ve told my clients that they were crazy to look at new construction with all the deals to be had out there.

That is until now.  I recently was out with some out of town clients looking at homes in the price range of $350k-$600k in the Lake Norman, NC area.  What we were very pleased to find out was that there were 2 or 3 home builders and developers offering to build brand new construction homes that were VERY competitive with even the distressed property pricing.  Perhaps these situations are derived from a distressed situation in itself, meaning that the developers and builders have been sitting on these lots forever and have come to realize that the only way to move the lot and get it off the books is to build on it and make a small margin on the construction.  Or, maybe they just realize its a great strategy in response to most buyer’s recent feedback in the industry on buying foreclosures.  We saw this in neighborhoods like Pebble Bay in Denver, NC and even The Point in Mooresville, NC.

What we are finding is that most buyers really can’t see past the “clean up” or “upfit” work needed in most distressed situations.  The result is a home run when they can purchase new construction for similar pricing.

Mike Moulton is President and head Broker at Bee Home Solutions, Inc. serving the greater Charlotte, NC real estate market.  704-885-0488.

Fully renovated ranch home with SELLER PAID CLOSING COSTS! Great new price at $79,995!  Excellent First Time Home Buyer Opportunity…and this home is MOVE IN READY!  How many houses on the market can you say that about in today’s market?  If you want a new home feel but with a mature homes’ landscape, this is the home for you!

You don’t want to miss this meticulously maintained home!  The owners went through extra time and steps to provide a beautiful home for the right buyer.  If you are looking in this price range you need to hop on this one quickly.   It’s the nicest in the neighborhood (Holly Hills) and in this price range.

• New double pane vinyl windows with lifetime warranty
• High efficiency HVAC installed 2009 with programmable thermostat
• New neutral carpet, vinyl, paint, and countertops
• New range and fridge (conveys) installed 2010
• Newer dishwasher, disposal, and hot water heater
• 1188 heated Sq ft, 3 bedroom, 1 bath, large closets, enormous utility room,
• Sun room (3 season),
• Brick fireplace,
• Vaulted ceiling in great room,
• Large fenced wooded back yard, patio, mature plantings
• Wired for cable and alarm system
• New gutters with leaf guard system
• Wooden blinds convey

The backyard is a bird watchers delight.

The Area: Close to a new county rec center, great new library, and a public golf course. There’s also a swim, tennis, and fishing club close by on Albemarle Road.  Shopping is convenient (Food Lion, Walmart, Target, Lowes hardware, Home Depot); there are some restaurants (Seafarer, Quiznos, Taco Bell, Subway, Chinese food); and several bank branches. A Park & Ride is nearby and the community is serviced by both express and local bus routes. A new hospital is being built not far away. It’s also very convenient to uptown, University, and to I485 .

Be sure to act fast as this one will not last long.  Call Mike Moulton at 704-885-0488 to schedule a showing.

Here are directions to the house.

From Harrisburg Road:
Turn onto Pence Road going west
Drive about 1.2 miles
Turn LEFT on Holly Hills Road
Drive about .5 miles
Turn RIGHT on Upas Lane
Turn LEFT on Mahogany Drive
Turn RIGHT on Judas Tree Lane
Turn RIGHT on Stem Court

From WT Harris Blvd:
Turn onto Hickory Grove Road going east
Drive 1.2 miles on Hickory Grove Road (turns into Pence Road)
Turn LEFT on Holly Hills Road
Drive about .5 miles
Turn RIGHT on Upas Lane
Turn LEFT on Mahogany Drive
Turn RIGHT on Judas Tree Lane
Turn RIGHT on Stem Court

Great deal @ $82,000, call now for a showing at 704-885-0488!

Checkout the video below:

If you missed last weeks video, then click this text: You Need To Sell Your House Quickly But Don’t Have Time To Put It On The Market

Be sure to stay tuned for next weeks’ video.  If you are in the market for a home in the greater charlotte, NC area and need some assistance, call our office at 704-885-0488.

Take care,

Mike

When To Sell and How

I speak with a number of investors and homeowners on a monthly basis. Recently, I have had a number of similar questions all pertaining around how to maximize return on their own homes or on investment properties (or both). My first question is always, “What is your ideal situation for your level of involvement through investing in real estate?” Do you want to hold for long term wealth? Do you want to buy it and quick turn it (a.k.a. flipping)? Do you want to buy it, redevelop the property, and resell it on the retail market? Would you like to be a private lender and provide capital at a fixed rate of return for projects that my company is doing? Answers to these questions are paramount to any one persons’ overall investment strategy. I believe that in the end a mixed strategy is the best approach. You can create your own mutual fund in real estate by implementing many of these strategies with the proper training and education/guidance. For most of my clients, I advise them to create some focus initially and choose one investment strategy to master (make it their commoditized product) then test other strategies to add into their portfolio as time goes on then grow from there.

The majority of the responses that I receive revolve around “flipping” a house through redeveloping it. When I use the term “redevelopment,” I’m simply stating a run down property is bought and restored back to its original condition (or updated) or better. The media has created numerous shows on television that create this perfect (or not-so-perfect) euphoria around “flipping” houses. It seems that the general public is enormously entertained by others faults, errors, or mistakes on these television programs. Or, they are amazed at how “easy” it is to buy a home, redevelop it, and resell it on the secondary market. My colleagues and I are always amazed at how poorly these shows perceive the actual costs involved in a house redevelopment project. They portray the costs involved are “acquisition price minus repairs = profit.” What we’ve always wondered is who is paying the holding costs (mortgage, insurance, utilities, etc.), sales agent fees (they all have open houses when they sell hosted by an agent), etc. to get this great profit? Quick turning real estate is a great platform for what I like to call “keeping the lights on” every month. It is cash now strategy that helps with daily operating costs. However, the downside is that you forgo the benefits of owning real estate over a longer period of time. Whether you take title to it, improve the property, or not, you also are subject to higher taxes on your profits because you have held the property for a short period or assigned the contract for a fee and you take the proceeds as income. Of course there are other advanced strategies around buying and selling properties short-term tax deferred in your self-directed IRA in real estate or through a 1031 tax exchange, but that is too large of a discussion for this article.

One of the time tested exit strategies in real estate is the buy and hold strategy. This is a very simple strategy in concept that also has its challenges along the way as well. Through utilizing this strategy, you simply buy properties that are in areas that can maintain a decent monthly rent and then manage (or pay to manage) them well over the period of ownership. The goal with this strategy is to minimize property vacancies and repairs and keep them occupied and the monthly rents coming in on-time. You can further optimize this strategy through buying the properties at discounts and/or in areas targeted for longer term redevelopment which can equal large appreciation over time. If you don’t require “cash now” so-to-speak, then what an opportunity over a period of 5, 10, 15, or 30 years to take advantage of property appreciation, depreciation, tax write-off’s, etc. all while someone else pays your mortgage off for you. Although the buy and hold strategy can be frustrating at times, if you hold for long periods of time you can ride the market and make out very well for yourself in the future. How can you relate this to your lifestyle? What if you bought a rental house every time that you had a child? What a great way to plan for college by assigning a profit and loss center to each of your children? This is truly a scaleable strategy. Imagine buying 5-10 properties this year and renting them for the next 20? How would your net worth and wealth reflect these actions?…Very well! My final thought on this strategy is to keep reminding yourself to treat this as a business and leave the emotions behind. Evictions, property damage, late payments, etc. are all aspects of the buy and hold rental strategy but business is business and just create a process to deal with each situation and work through them one by one and you will enjoy the benefits of long term property ownership.

When all is said and done you need to figure out what your personal financial goals are and what percentage of those goals will utilize real estate to achieve them. Do you want to own property or do you want to passively invest in real estate through companies like Bee Home Solutions, Inc. to earn a great, secured return? Do you want to rejuvenate properties and resell them on the retail market, or via lease options, or rejuvenate and hold them to rent in your portfolio? Of course there are limitless amounts of creative real estate investing and selling strategies that continue to expand off the basic ones that have been discussed in this article. I suggest that you start with the basics and build from there. The basic rule of thumb is to always know upfront what your exit strategy is before you invest in any property. Ready, Set….GO!

– Michael Moulton, Broker-in-Charge/Investor of Bee Home Solutions, Inc.

Disclaimer: The views and opinions expressed above are those of Michael Moulton and are not to be perceived as legal or accounting advice.

Mike also addresses our viewers that have been joking with me about the videos going over 1 minute in length.

Checkout the video below and be sure to tune in next week for the 1 Minute Real Estate Quick Tip by Mike Moulton

Please provide your comments to this blogpost with your thoughts!
Thanks

Mike

Also, if you are facing foreclosure in the greater Charlotte area feel free to visit our site at http://www.charlotteforeclosurechallenges.com to view an abundance of free resources to answer all of your questions.

Watch last weeks video on The Difference between buying a HUD, REO, or Short Sale Property here

Mike getting ready to kick some butt!

This past weekend a group of us ran in the 3rd Annual Marine Mud Corps Run at Belmont Abbey College in Belmont, NC.  It was a great time and its always good to help a charity.  My friends and I had brought 2 teams of 4 people each to endure the 5-5.5 mile course.  The course was filled with all sorts of different challenges including a number of calistenic stations, climbing over walls, crawling under tarps, running through a single track course through pricker and poison ivy filled woods, and my personal favorite which was crawling through 2-3 feet of a 150-200 ft mud pit.  Did I say crawling?  This also included push ups, running, and getting yelled at by a number of Marines as we did this.  Not only were we yelled at in the mud pits, but also throughout the entire course.  Let’s just call it “verbal encouragement”.

All in all it was a great morning last saturday.  My team (“The Swamp Donkeys”) pulled it together and we crossed the finish line together.  Note: If we didn’t finish together we probably would’ve been beaten to shreds on the spot.  Remember, the Marines “Never leave a man behind” and nor did we.  Checkout the pic below.  I was picking tiny grits of gravel out of my contact lenses the entire rest of that day!

Mike's Team Approaching The Finish Line

I urge you to google a marine corp mud run in your local area or join one of the few offered in the greater Charlotte, NC area. Here is the website of the event that we just did – Marine Corp Mud Run . To view more pictures of the event click here.

Take care, to your health.

Mike