How is the real estate market? Then and Now – The Ukiah Daily Journal

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As you might have guessed, coming up with material for these speakers every week can be tricky. This week, as I went through industry newsletters, emails from readers, and conversations with my realtors, I wondered how much has changed since I started in this business, and what if I had to do it again and again. again, I would choose the exact same business.

As a 19-year-old college student almost 50 years ago, when I was living on social security payments after my father’s death, I decided to buy a house as an investment. The purchase price was $ 18,000 and I was short of cash, so I offered $ 1,800 as a down payment and the seller agreed to carry $ 1,800 per second. My monthly mortgage payment would be $ 108 if the bank loaned me money to buy real estate.

So, I went to the bank to inquire about this loan. The loan officer did not ask me to prove that I could afford to pay $ 108 a month. He figured the rent I get would cover my mortgage. If he were doing a credit check, it would have required a quick call to the local credit bureau, since computers were not available to small businesses and the Internet had not yet been invented. I’m sure the credit bureau clerk didn’t have much to report because at 19 I didn’t live long enough to create a credit history. And yet the bank lent me money.

With little success behind me, I started looking for a second investment property to buy. This time I found the top retainer. I was still in college, which meant I had more time than money, so I figured I could fix it myself. The purchase price was $ 15,500, so the bank only loaned me $ 12,000 to buy the property, but they valued the property at $ 19,500 after the renovation and said they would refund the down payment upon completion of the renovation. True to their word, once I fixed all the problems, they gave me back my original cash investment.

Fast forward 45 years and banking regulations will prevent this loan from being issued. Plus, most lenders wouldn’t let me borrow a dime unless they were sure I could pay off my mortgage without collecting rent. Without a credit history and a noticeable income, today I would be hastily turned down. Plus, the idea of ​​a college student doing a major overhaul wouldn’t take off these days if I didn’t have a contractor’s license. Not to mention, the sales contracts for each property will be tens of pages long, unlike the contracts I signed, which were not even a whole page.

I learned two important lessons from those early days. Firstly, I am not a carpenter and never will be. Second, and more importantly, real estate is a fantastic business with great investment opportunities. I remember a real estate broker who was working in the city when I bought my first property here. He used to show potential buyers the houses for sale by flipping through his MLS folder (remember, no computers). He said: “Here is a nice house for 22 thousand dollars.” Then he said, “Gee, sorry, this MLS book is 2 years old. Let me get the current one. Oh look, the same property is actually worth $ 26,000. It looks like it would be a good investment. In fact, all these houses continue to rise in price. ” It was his gimmick, and it worked well for him.

In truth, real estate has been one of the best investments in the last 50 years. You can leverage your purchases, receive tax breaks on depreciation and capital gains, and collect enough to cover the cost of ownership. If you are interested in buying property to live in or rent out, I expect property to continue to be a great investment.

If you have any questions about property management or real estate, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you have an idea for a future column, please share it with me and if I use it, I will send you a $ 25 gift certificate to Schat’s Bakery. To view previous articles, visit www.selzerrealty.com and click “How’s the Market”.

Dick Seltzer is a real estate broker who has been in the business for over 45 years.

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