Neuhaus Blog

July 13, 2021

Why This Isn’t Your Typical Summer Housing Market

Why This Isn’t Your Typical Summer Housing Market | MyKCM

In real estate, it’s normal to see ebbs and flows in the market. Typically, the summer months are slower-paced than the traditionally busy spring. But this isn’t a typical summer. As the economy rebounds and life is returning to normal, the real estate market is expected to have an unusually strong summer season.

Here’s how this summer is stacking up against the norm and what it means for you.Why This Isn’t Your Typical Summer Housing Market | MyKCM

Inventory is increasing.

According to the latest Existing Home Sales Report from the National Association of Realtors (NAR), inventory levels have been rising since February of this year. Looking at the graph below, there’s a clear upward trend, as shown in the green bars. Currently, there’s roughly a 2.5 months’ supply of homes for sale. And while inventory is trending up as more houses are coming to the market, it’s still much lower than several of the previous summers, as the orange bars indicate.Why This Isn’t Your Typical Summer Housing Market | MyKCMIf you’re looking to buy, some relief is on the way in the form of more homes coming to the market. Just remember, we still have less inventory than the norm, so be patient in your search.

If you’re thinking of selling, now is the time. Work with your agent to list your house before it has more competition on the market.

Time on the market is still shorter than normal.

Unlike the typical summer trend, time on the market is moving at the fastest speed we’ve seen since NAR started collecting this survey-based information in 2011. The most recent Realtors Confidence Index shows that the average home is on the market for just 17 days, as shown in green in the graph below. This means houses are selling at a much faster pace than a typical summer, which the orange bars represent.Why This Isn’t Your Typical Summer Housing Market | MyKCMIf you’re looking to buy, this means you need to be prepared to move fast. Brace for a quick pace and rely on your agent to stay in the know on the available homes in your area.

If you’re thinking of selling, data shows your house will likely sell quickly. If you’re worried about where you’ll go once your house sells, consider a newly built home as a good way to move up.

Price appreciation is still rising.

The last big factor making this an unusually strong market this summer is home price appreciation. According to the State House Price Index from the Federal Housing Finance Agency (FHFA), we’re currently experiencing double-digit house price appreciation and have an average of 12.6% appreciation across the country. The graph below uses data from NAR to show a more granular view of how prices have changed month-to-month over the past few years. The green bars show the current price appreciation we’re experiencing today. Our current levels are well above what we’ve seen in recent summers, shown by the orange bars.Why This Isn’t Your Typical Summer Housing Market | MyKCMIf you’re looking to buy, competition and bidding wars are driving prices up. Getting pre-approved can show the seller you’re serious and help you know what you can afford. Once you do, work with your agent to make a strong offer that stands out.

If you’re thinking of selling, seize this opportunity to use your additional equity from this price appreciation to power your next move.

Bottom Line

This isn’t a typical summer. Whether you’re buying or selling, let’s connect to talk about how you can capitalize on today’s market conditions to sell your house or find your dream home.

Posted in Home Buying
July 9, 2021

Your Home Equity Can Take You Places

Your Home Equity Can Take You Places [INFOGRAPHIC] | MyKCM

June 24, 2021

Demand for Vacation Homes Is Still Strong

Demand for Vacation Homes Is Still Strong | MyKCM

The pandemic created a tremendous interest in vacation homes across the country. Throughout the last year, many people purchased second homes as a safe getaway from the challenges of the health crisis. With many professionals working from home and many students taking classes remotely, it made sense to see a migration away from cities and into counties with more vacation destinations.

The 2021 Vacation Home Counties Report from the National Association of Realtors (NAR) shows that this increase in vacation home sales continues in 2021. The report examines sales in counties where “vacant seasonal, occasional, or recreational use housing account for at least 20% of the housing stock” and compares that data to the overall residential market.

Their findings show:

  • Vacation home sales rose by 16.4% to 310,600 in 2020, outpacing the 5.6% growth in total existing-home sales.
  • Vacation home sales are up 57.2% year-over-year during January-April 2021 compared to the 20% year-over-year change in total existing-home sales.
  • Home prices rose more in vacation home counties – the median existing price rose by 14.2% in vacation home counties, compared to 10.1% in non-vacation home counties.

This coincides with data released by Zelman & Associates on the increase in sales of second homes throughout the country last year.

As the data above shows, there is still high demand for second getaway homes in 2021 even as the pandemic winds down. While we may see a rise in second-home sellers as life returns to normal, ongoing low supply and high demand will continue to provide those sellers with a good return on their investment.

Bottom Line

If you’re one of the many people who purchased a vacation home during the pandemic, you’re likely wondering what this means for you. If you’re considering selling that home as life returns to normal, you have options. There are still plenty of buyers in the market. If, on the other hand, you want to keep your second home, enjoy it! Current market conditions show that it’s a good ongoing investment.

Jan. 8, 2021

New Year, New Home? Set Homeownership Goals Whether You’re Buying or Selling

The start of a new year always compels people to take a fresh look at their goals, from health and career to relationships and finance. But with historically low mortgage rates, increased home sales and price growth, and a tight housing inventory, the time is right to also make some homeownership resolutions for 2021.


Home buyers, is this the year you work to improve your credit score, pay down some debt, or save for a down payment? 


Home sellers, we’ve laid out plans for you to get top dollar for your property, including timing your home sale, making your property stand out from the crowd, and investing in your extra living space. 


And even if you’re staying put for awhile, homeowners, you can resolve to improve your status quo by evaluating your home budget, finalizing your home maintenance schedule, or maybe investing in a second property.


So no matter your homeownership status, we’ve got some ideas and advice for you to make this year your best one yet. Read on to learn more.





Resolution #1: Qualify for a better mortgage with a higher credit score.


Your credit report highlights your current debt, bill-paying history, and other key financial information. Importantly for your home-buying journey, it is also used by lenders and companies to calculate your credit score, which partly determines if you are qualified to obtain a mortgage. Therefore, before you start house-hunting, make sure your finances are in the best possible shape by checking your credit report from Equifax, Experian, and TransUnion (via You can also obtain your credit score for free from some banks and credit card companies.


Your credit score will be a number ranging from 300-850.1 Generally speaking, a credit score of 740 or higher is considered very good to excellent.2 If your FICO score drops below 740, you might need to work at boosting your score for a few months before you begin house-hunting. Ways to do this are to pay your bills on time every month, keep your credit card balances low, and avoid applying for new credit.



Resolution #2: Improve your credit health by paying down debt. 


Do you have student loans, credit card debt, or car payments tying up your income each month? That debt is hurting your “buying power,” or the amount of home you can afford. Not only is it money that you can't spend on your new home, but your debt-to-income ratio also affects your credit score, which we discussed above. The less debt you have, the higher your FICO score and the better mortgage you can obtain.


If you can, pay off some debt in its entiretylike a low balance on a credit card. Then apply that "extra" money you previously paid on that credit card to pay off bigger debt, like a car loan. Even if you can’t pay off all (or any) of your debt in full, reducing the balances of each account will help you qualify for the best possible mortgage terms.



Resolution #3: Create a financial safety net before applying for a mortgage. 


Don’t forget that buying a home requires some cash as well. A down payment is typically 7% of a home’s purchase price, and closing costs currently average $3,700.3,4 You’ll also need money for moving expenses and any initial maintenance tasks that might pop up. And as the pandemic taught us, you never know when an unforeseen event might cause a job loss, drop in income, or health scare, so having some liquid savings will ensure that you can still pay your mortgage if a crisis occurs.


Dedicate some effort to building up your reserves. Cut down on unnecessary expenses, and consider having a portion of each paycheck automatically deposited into your savings account to avoid the temptation to spend it.





Resolution #4: Decide on the right time to sell your home.


If you’re looking to maximize profit on the sale of your home, selling earlier in the year makes sense. Listing prices historically increase early in the year, peak in May, plateau through June, and decrease for the remainder of the year.5 And, according to the National Association of Realtors, “[w]ith both mortgage rates and the number of homes available for sale expected to remain relatively low, home prices are likely to continue to increase. [In] mid-January, home prices typically begin a quick ramp-up in a normal year.”5 


But sales price isn’t the only thing to consider. You might not be ready to sell your home yet because you don't want to uproot your kids during the school year or because you need to tackle some minor upgrades before placing your home on the market. 


This means that there is no one month or season that is the perfect time to sell your home. Instead, the right timeline for you takes into account factors such as when you’ll earn the highest profit, personal convenience, and whether your home is even ready to put on the market. A trusted real estate professional can talk you through your specific needs to clarify when to sell your home. 



Resolution #5: Boost your home’s resale value by making your property shine.


Housing inventory is at historic lows across the country, and that means the market is fiercely competitive.6 Selling your home in 2021 has the potential to net you a huge return right now, and you can maximize that amount with some simple fixes to make sure your property outshines your neighbors' for sale down the street. 


In your home, you might need to tackle a minor remodeling project, such as upgrading the flooring or adding a fresh coat of paint. According to the National Association of Realtors’ 2019 Remodeling Impact Report, simply refinishing existing hardwood floors recoups 100% of the cost at resale, and completely replacing it with new wood flooring recovers 106% of costs.7

Outside, you might consider improving your curb appeal by removing a dead bush, trimming a tree that blocks the front window, or power-washing your moldy driveway and sidewalks. In fact, real estate agents say cleaning the exterior of your house can add $10,000 to $15,000 to a home’s sale price.8 And according to a Virginia Tech study, improving a home’s landscaping may increase its value by 10 to 12%.9 


A good agent should provide custom-tailored suggestions to ensure your property pops inside and out. Ask us about our local insider secrets that will make your home stand out from others on the market.



Resolution #6: Invest in your “extra” living space to meet current buyers’ needs. 


Due to COVID-19, more people are staying at home to work, go to school, exercise, and stay entertained. And these lifestyle changes are showing up in home buyer preferences. For example, according to one study, buyers are looking more and more for homes with formal, outfitted home offices, private outdoor spaces, and updated kitchen appliances.10

So if you’ve got an underutilized room, consider turning it into an office, home gym, schoolroom, or multi-purpose room to meet current home buyer needs and attract better offers on your home. Got some underwhelming space outside? You could turn it into an outdoor entertainment area by adding a firepit, upgrading the patio furniture, or installing a grilling area. Be sure to consult with a local real estate professional before investing in a renovation, however, as each market’s buyers have different tastes.





Resolution #7: Evaluate your household budget to reflect financial changes.


After this past year, in particular, your financial picture may have changed. Maybe you were furloughed, had your hours reduced, or got a new job further from home. Perhaps you’ve kept the same job, but you’re now working remotely. A work-from-home arrangement could mean less money spent on gas, tolls, a professional wardrobe, and dining out for lunch. 


But this could also mean new (or increased) expenses now that you’re working at home, such as new tech-related purchases, faster Wi-Fi, and higher energy bills. January marks the perfect opportunity to update your income and expenses and review last year’s spending habits, tweaking as needed for 2021.


For more specific ideas, contact us for our free report "20 Ways to Save Money and Stretch Your Household Budget."



Resolution #8: Save money now (and earn more later) with a home maintenance plan. 


Having a schedule of regular home maintenance projects to tackle will save you money now and in the long-term. You’ll avoid some surprise “emergency fixes,” and when you’re ready to eventually sell your home, you’ll get higher offers from buyers who aren’t put off by overdue repairs.


Even if nothing necessarily needs fixing right now, you can lower your energy costs by maintaining and upgrading your home.  According to the U.S. Department of Energy, simple fixes add up: replace five most frequently used bulbs with ENERGY STAR ones to save $75/year; repair leaky faucets to save $35/year; replace older toilets with low-flow models to save $100/year; and seal air leaks to save $83-$166/year.11


For a breakdown of home maintenance projects to tackle throughout the year, contact us for our free report “House Care Calendar: A Seasonal Guide to Maintaining Your Home.”



Resolution #9: Invest in real estate for a better standard of living. 


Even if you don’t plan on leaving your current residence, real estate is a great way to improve your quality of life in 2021. 


Have cabin fever from the long quarantine? A vacation home in a getaway location you love lets you safely spread your wings. And if you have been looking for a second stream of income, an investment property might be your answer. Just be sure to consult with a real estate professional to get a realistic sense of a property’s true income potential.


Want more information on how a second property fits into your 2021 plans? Request our free report, "Move Up vs Second Home: Which One Is Right For You?"





Without a plan and a support system, 55% of Americans will break their new year’s resolutions.12 Whether you’re looking to buy, sell, or stay put in your home, it helps to connect with a trusted real estate agent to keep you motivated and on track.


As local market experts, we have the knowledge, experience, and networks to help you achieve your homeownership goals, whatever they may be. Reach out to us today for a free consultation and commit to a happy and prosperous new year.




  1. -
  2. Equifax -
  3. NerdWallet - 
  4. Zillow - 
  5. -
  6. Business Insider - 
  7. National Association of Realtors - 
  8. House Logic - 
  9. Virginia Cooperative Extension - 
  10. HomeLight -
  11. U.S. Department of Energy - 
  12. Ipsos - 
March 13, 2018

Redneck Riviera Vacation Rentals Can Make High Returns

Yes indeed, Austin is a young, hip, and fun town full of excitement and never

lacking something to do. But, Austin does lack something, a beach. Not just any

beach but one that looks like it was plucked from the Caribbean and located just

close enough that you could get there easily in a days drive. Has anyone figured

it out yet? This place does exist and many of you have either been there or have

heard of it. This mysterious place I am referring to is the panhandle of Florida

and more specifically South Walton Beach and the famous 30a communities.

Next, tell me what’s better than just visiting a gorgeous beach town? How about

the opportunity of owning a beach house or condo along 30a. In this blog post

I’m going to go over with you how you could potentially purchase an investment

property in one of the coastal towns of 30a and have it pay for most of your

mortgage and bills or even start making money right away.


For those of you that have visited towns like Rosemary Beach, Seaside, and

Grayton Beach you have probably noticed that it is necessary to make

reservations well in advance. The reason for this is not only because of its

immense beauty and lore but also because it attracts people from over a dozen

large US cities that can all drive there in less than 10 hours. As many have called

it before, The Redneck Riviera is mainly owned by absentee owners. This means

that most of the people that own condo units and houses that you may have even

stayed in are owned by people that don’t actually live there. There’s even a good

chance that a place you have stayed at may be owned by someone that lives

right in Austin. But my question to you is, why pay to visit 30a when you can have

other people pay you to visit there? Hopefully, this has you thinking so keep

reading because the juicy details are getting ready to be let out.

The first thing that you need to figure out is what are your goals. Are you

expecting a 10% return on investment per year, 5%, 2%, break even, or you

don’t mind putting some money back in each year. Next, you need to think about

how much money you would like to invest. Prices vary quite a bit on 30a

depending on how close to the beach, how large it is, if it’s a house, or if it’s a

condo.  Finally, you need to decide how much you and your family actually intend

on using it. This is sometimes the hardest question for many people to answer.

But, if you plan on using it three weeks each summer, That is going to take a bite

out of your gross rental income and bottom line.


The real estate and rental market in the towns of Seaside, Watercolor, Rosemary

Beach, Seagrove Beach and so on are much different than Panama City Beach

which is to the east and Destin which is to the west. Both Destin and Panama

City Beach both have lower prices on their real estate with sometimes higher

gross rental income compared to the price. But appreciate less than all of the

towns along 30A.  The reason for this is because Panama City Beach and Destin

are more “turn and burn“ type of rental vacation resort areas. Whereas, 30A is


set at a different pace. It doesn’t attract the party crowd as much, it is not as high

density, it does not allow high-rise condominiums or buildings (the height limit is

50 feet of any structure). 30A along with that’s well-known beach communities

are more exclusive and high end.


Hopefully, you now know a lot more about the 30A area AKA “The Redneck

Riviera“ then you did before you started reading. Maybe, you are even now

thinking about looking into a vacation rental/investment property of your own.

Some of the key points to remember is depending on the city/community you

purchase in (30A or Panama City Beach/Destin) Will affect what your purchase

price, Immediate return on investment, and long-term appreciation. Your property

at Rosemary Beach, Seacrest, Blue Mountain Beach and other 30a community

will appreciate the fastest, rent for higher per week but fewer weeks per year, and

be more sought after when the time comes to resell.


For more information about investing in South Walton Beach, Destin or Panama

City Beach contact 30a Local Properties real estate agent Danny Magagliano

directly at 850-830- 4747, visit Destin Property Expert or speak with Ed Neuhaus.

Danny Margagliano is a guest blogger and real estate expert for the Destin,

Florida area commonly referred to as 30A. If you are in the market for your first

home, a vacation home or retirement home in the Destin area, you can reach

Danny at 850-830- 4747.

Jan. 25, 2017

Tax Return? What are you going to buy?

It’s getting to be that time of year is starting to warm up, birds are returning to the area, the real estate market is starting to heat up, people are starting to talk about taxes…<record scratch>.  What? Why would you bring up taxes you ask?  Well, it’s because there are two certainties in life, death and taxes, and I don’t want to talk about death in this blog post.  I’ll save that for another post.  


So people are talking about taxes.  What does that matter to you?  Well, like a lot of people, you might be getting a tax return this year.  How much will it be, what will you use it for?  Well, that’s what I want to talk about.  Have you thought about using it towards purchasing a home?  “It won’t be enough to buy a home in Austin, have you seen the prices?”  Trust me, I get it...Austin is expensive, however, if you can put down 3.5% on a home, I can get you in one.  In fact, right now, for around $7600, I can put you in a brand new home.  (that’s the used car salesman pitch)


The truth is, $7600 is a lot of money, but if you’re thinking about buying a home in the Austin area, that's probably the lowest amount you're going to be able to put down.  On top of that, there are  typically closing costs, inspections and  other fees associated with buying a home.  We can provide homes, within minutes of downtown Austin, where you’ll avoid a majority of those other fees and only have to pay the downpayment.  If you can afford *$1626 a month, and *$7600 down, you can buy a 3 bedroom, 2 bath, 2 car garage home in Austin.  Get a roommate and cut that number in half.  Get two roommates and you could all be paying $523 a month...oh, and you’ll be building equity in the home by paying down the mortgage while property values increase over time.  


Bottom line, renting in Austin isn’t getting any cheaper so if you’ve been debating buying a home, let’s get the process started by talking about options.  No high pressure sales tactics or anything like that...just pure consultation.  

Contact us today to start the conversation.

* $7600 down and $1626 a month are based on a $217,000 purchase price with 3.5% down and a 4.25% interest rate...these numbers can vary based on credit, debt to income, etc.   

Posted in Home Buying
June 15, 2015

The tortoise wins every time

Every time I read the story of the tortoise and the hare, the tortoise wins. Every time. I mean duh, it is a book. Books end the same way every time. But this applies to more than just this books. In life most good things come to those who wait. Not waiting around and doing nothing, but purposefully taking small steps everyday to achieve an amazing end result.  For most people real estate investing is something other people do.  But with a few easy steps I can make everyone a real estate investor.  One small step at a time. The first thing to know about real estate investing is, the faster you get rich the faster you can loose it.  Everyone wants a get rich quick scheme, but very few of them really work.  I don't know a single millionaire who earned their millions over night.  I am sure they are our there, but I have never met them.  The richest people I know, did not become rich quickly.  It took most of them decades to make their first million.

Step 1: It's all about getting a good start

The single most important and simplest thing todo when investing in real estate is to own your own home.  This sounds like a no brainer right?  Or it should.  Would it surprise you to know that only 56% of the single family homes in Texas are owner occupied.(1)  That means almost half of the homes in the state are owned by someone other that the occupant.  So owning your home already puts you ahead of the game and on the path toward your financial future.  Did you know that home owners have an estimated net worth of 31 times that of renters.

Step 2: Thinking about the first big move

Everyone moves.  Most people do it about every 5 years.(2)  So lets assume you have been in your home that you owned for the last five years.  You have loved living their but it is time to move into something different.  The reason you are moving is not important, what you do with the house you are leaving is.  Most people think they should sell the house before they buy another one.  This is the most popular approach.  After all the equity you have in the house is now worth something you can use to buy the new house.  ok, yes that is true, but wait.  Let me show you what you are giving up. Lets take a look at what you own, and what it would take to buy it again as a rental property.  When you purchased your home there was a down payment on it, right?  Which could have been as little as 3.5%.  On a $200,000 house.  That is $7000.  Lets say for good measure it cost another $3,000 to close the deal.  You could have moved in for $10,000 tops.  On the other had if you went to buy the same $200,000 house as a rental home, you would need to put down 20%.  20% plus closing cost would be around $43,000.  $36,000 less if you purchased as an owner occupant.  And your rate is better too, but we will get to that in another post. So now (in year 5) we have an asset which is worth(3) $231,854.  If you spent $10,000 to buy it then you have made a 318% return.  On the flip side, if you had to put 20% or $43,000 down to buy the house that is now worth $231,854, you would only make a 74% return.  Which one do you want?  From that example you can see that purchasing investment properties as owner occupied is a great way to purchase them with little money out of pocket. So now that we own one, lets not let it go.

Step 3: Buying your next target property

Once we have decided not to sell the first home two things happen.  One we should realize that we need to save more for down payment, and second we need to make sure we can qualify for the extra debt.  In a perfect world you would be making enough money that owning two homes would be easy for you to qualify for.  But this might not be the case.  Buying your second investment property is the hardest one to qualify for.  Simply because you are now going to be a landlord and rely on the tenant to pay the mortgage.  Unfortunately, you don't have any experience doing this.  The banks are going to be a little hesitant to give you this first loan because you have no track record.  Typically they like to see that you have been a landlord for two years. Once you have down payment of 3.5% plus some extra money saved to pay for closing cost, moving, ect, it is time to buy the next house.  Lets say you are moving up to a $250,000 house.  A modest move up, after all the house you are leaving now is worth $231,854.   Again you are going to put down 3.5%.  Since you are buying as an owner occupant you get the benefit of the owners interest rate not the rate charged to investors which comes in handy if you can lock it in for 30 years.

Step 4: Get your move on already

Congrats on closing on your second investment property!  This is huge step from casual home owner to the big leagues of real estate investor.  Hopefully you will have tenants in your old house quickly who will be covering the cost of ownership.(4)  Plan on staying in your new house for 5 years.  Now that you know the process, start saving money now for the next down payment.

Step 5: Rinse and repeat

Lets fast forward to year 10.  Your have owned your first investment property for 10 years.  Five of which you lived in it and the other five you leased it out.  You originally paid $200,000 with $10,000 down.  Now it is worth about $269,000.  Your second property which you paid $250,000 with $12,000 down is worth about $290,000.  That is $109,000 return on a $22,000 investment in 10 years. We also got to take advantage of the tenant paying the mortgage on the first property for us.  This has also adds to our return on investment, but because there are too many variables we are just going to concentrate on the loan pay off balance.  If the loan on our first house was at 6% we will have $157,000 left to pay at the end of year 10.  And if house #2 has a loan of 5% we will still owe $221,536.  $378,536 in out standing debt.  If you subtract that from our properties value $559,000 - $378,538 = $180,464 in return on a $22,000 investment in 10 years. I know you are thinking, but wait, I am paying the mortgage to live in these houses for five years.  So I have really paid in more than the $22,000.  And you are correct, you have, but you had to live somewhere, so why not in a house.  It should have been the cheaper to live in a house you own than renting.   Plus there are huge tax benefits to owning homes.  For example you can deduct the mortgage interest off your taxes which could save you thousands on your taxes every year.  Again we are not including that to keep things simple.

What happens if you do this every five years?

The simple answer is your slowly growing very wealthy.  Look at the example below. We will purchase a new property every five years. The purchase of the new property will be of greater value than the last because most people upgrade not down grade.  We are also going to assume that we average 3% appreciation on the property value and that the properties cash flow once we move out.  Yes, it cost money to live in each of them for the first 5 years, but we have to live somewhere so we are going to negate that cost.

 Property 1Property 2Property 3Property 4Total Value
Purchase Price $200,000 $250,000 $325,000 $400,000 $1,175,000
Cost to purchase $10,000 $12,000 $35,000 $17,000 $74,000
30Y loan rate 6% 5% 7% 20%  
Loan $193,000 $241,250 $292,500 $368,000 $1,094,750
Y5 Value - loan balance $52,260 - - - $52,260
Y10 Value - loan balance $107,270 $68,282 - - $175,552
Y15 Value - loan balance $174,469 $139,742 $101,430 - $415,641
Y20 Value - loan balance $256,996 $225,722 $185,771 $78,919 $747,408
Y25 Value - loan balance $418,755 $329,425 $289,834 $157,883 $1,195,917
Y30 Value - loan balance $485,452 $454,817 $419,384 $255,929 $1,585,582

As you can see from the chart, after only 25 years you would be a millionaire, and it only gets better in year 30. We also made some mistakes along the way an put down too much money on property 3, and interest rates when we bought property 4 were sky high. We still managed to make a lot of money because time was on our side. The chart does not show us that in year 30 property one is paid off.  Mostly by the tenants I might add.  The rent generate from that property could go to pay down the debt on the other notes or it could just be funny money.  Either way, rent grows over time by 3-5%.  So if you were getting $1200/month on property one when you first started renting it, by year 30 you could be getting as much as $3000/month in rent.  Our chart does not take into account using this extra rent to payoff these notes early, but if that was done your net worth would by much greater in year 30. To view the full analysis of these properties click on the PDF's below. Please remember that each of these reports starts at the time of purchase. So property 3's year 1 is really year 15 in our timeline.


The slow way to make a ton of money with real estate investing and win every time is to follow these simple steps.

  1. Buy a house to live in
  2. 5 years later move into new house
  3. Keep old house and lease out.
  4. repeat as may times as your wife will let you.


June 19, 2014

Taking Great Real Estate Photos

Last year I wrote a post about cameras realtors should check out if they wanted to do take their own real estate photos.  (See it here ) Turns out many of you check out that post, and we have actually heard back from several people about the camera they purchased.  Purchasing a nice camera is just part of the story.  You also have to know how to pick your shots and make sure the light is correct.  After the photo is taken you still have to edit the photo to make it look it's best.  So I have narrowed the list down to a few easy steps to get the most out of real estate photos.

The Must Haves

First let me just say, having a nice camera like a Nikon D5200 DSLR or a Canon EOS 70D is not needed in today's world of real estate photography.  Most of the time and smart phone can take great photos.  I have included photos from my iPhone several times with great results.  The tips below will apply no matter what camera you are using.  The key is to learn how to use it. If you do go down the road of buying a DSLR I would suggest getting a wide angle lens.  I personally have been using the Nikon 5100 with a Tamron AF 10-24mm lens to get the wide angle shots. They sell this lens for Canon and Nikon so make sure you buy the right one.  I also use a large flash and a tripod.  Flash is not required but the tripod helps.

real estate photos

Tip to improve your real estate photos

  1. Take your time -  This seems like a no-brainer, but you can tell when photos are rushed.  I know most of the time we are at the house getting the listing agreement signed and we just step side for a few moments and take the photos while the sellers are filling out the disclosures.  Bad Idea.  Rushing the photos is dumb.  You are going to be stuck with them for a few weeks, so make them look good.  Make a special appointment if needed to make sure the house is clean and the lighting is best.
  2. Stage the photo - You may not have hired a stager for the whole house, but that does not mean that you should just leave everything where it is and take the real estate photos.  Pick up the toys, clothes, mail, dishes, or dog bowls to make the shot look clean.  If you make a special appointment to take the photos, hopefully, the owners have picked up the place.  If not you may need to help them.  Just last week I saw a photo in the MLS with a pair of handcuffs attached to a four post bed.  I bet the sellers don't want that plastered all over the internet.
  3. Make sure the light is right - Ok this one is hard.  Hard in that every camera has a different way of adjusting for the light.  In general, we want to make things as flat as possible.  So if the sun is blaring in the window and the lights are off in the room, the photo will look bad.  Ideally, you would be able to reduce the light from the window and make the rest of the room brighter.  We want a lot of light, but even light.  You can use a flash here if you want, or you can bring in extra lights to brighten the room.  Either would be a great way to make things look more natural.
  4. Make sure the camera is level - 7 out of 10 real estate photos I see in the MLS are crooked.  This is sometimes hard to realize because when we use wide angle lenses the image sometimes gets distorted.  It really can be an optical allusion.  To prevent this, #1 makes sure your camera is at eye level, and not too high or too low. #2 turn on the grid in the camera and make sure that a vertical part of the house, a corner, a door, a window lines up with one of the vertical lines.  The closer to the center vertical line the better.
  5. Don't shoot VERTICAL - I should not have to say this, but I see it all the time.  If you are using your phone to take the photos, make sure you shoot in the horizontal.  Uploading photos were taken in the vertical just waste a whole lot of space on the website that could otherwise be used for the photo.  Every single real estate website has a spot for real estate photos, and all of them are in the horizontal.  So why take pictures any other way.8809 Mountain Shadows
  6. Look at your shots after you take them - Since we now live in the world of digital photography it is now possible to look at every shot after we take it.  Take a photo and then look at it to make sure it looks great.  If not try it again.  I often take a photo just to check the lighting.  Then fix the lighting, and take another photo.  Once the lighting is fixed I look at the photo closely for anything unusual in the photo we could take out, like handcuff or underwear on the floor.  Then I shoot it again.  4, 5, even 6-8 times reshooting the same exact shot to make sure I have it looking as good as possible.  After all you can always delete the bad photos.
  7. Edit the photos - After all the shooting is done you have to edit the photos.  You should have taken way more than you are allowed to upload so the first step in editing is picking the best ones.  Once you have narrowed it down to 30-40 it is time to get out the photo editor.  Yep, you need a photo editor more than you need a good camera.  If you have an Apple Computer then you have iPhoto, if you have a windows machine you have something similar.  Either way, do yourself a favor and edit the photo to make sure #1 they are level, and #2 the image is enhanced as much as possible.  Most of these programs have a magic wand feature that will do most of this for you.  No real skill is needed.

Simple Right?

So I hope that helps.  Those are all easy steps you can take to improve your real estate photos.  I sure hope anyone can use these steps to take better photos.  While better cameras do take better photos, the user still has to have a basic set of skills to get the most out of them.  Remember a $10,000 camera does not know if it is taking a level photo, it is up to the photographer to get the shot.  Good luck with your real estate photos!

June 18, 2014

The slow motion moments - Reliving Fathers Day

Just the other day while I was sitting in church I was overcome with this feeling that I was not doing enough to create lasting memories of my life.  I don't really know why I started thinking about that, it was not the topic of the sermon, it just came over me.  I could not get it out of my head for the whole service.  I finally had to take out my phone and make a note to myself to remember to explore the idea later. 

After thinking about it for a few weeks I started to wonder.  If I had a documentary film crew with me every day of my life, what would they use for the slow motion replay?  It's a fun question to ask yourself when you get home from work.  "What did I do today that is worthy of reliving in slow motion?"  It may not be much, or it maybe everything.

Slowing it Down

For most of my life, I have been focused on the big picture.  Ask anyone who knows me, "I got plans".  How to get from here to there, and how to get there as fast as possible.  I know what I want to achieve and when I want to achieve it, and once I achieve it I'm moving on to something else.

What I have also realized is that no matter how fast or hard I work, some things just take the time to happen.  It's like God's way of saying "hey buddy, look up and take notice before it is all over".  After all, what's the point of getting to the end, if you did not have any great memories of how you got there.

Just this last weekend, on Fathers Day.  I told Lindsey that all I wanted to do for fathers day was to watch the US Open. Not a huge request. Just a little me time, with the world's best golfers.  No big deal.

Lindsey decided to run to errands with Caroline while leaving Greyson at home to take a nap.  As nap time approached, Greyson was not interested in going to bed.  I tried a few times to rock him to sleep, but nothing was working.  I was growing frustrated until finally, I gave up and took Greyson back downstairs to watch golf.   We watched golf for 5mins together with him on my chest and he was asleep.

After 45mins of holding Greyson, I tried to put him down on the couch.  Unfortunately, my technique was not great and he woke right up screaming.  As everyone knows screaming during golf is bad, especially at home on Fathers Day.  So I was back to holding him again.  And again he went back to sleep quickly.

So there I was holding Greyson, watching golf, and frustrated that I could not move on to the next thing.  The next thing, of course, being, watching golf without holding a baby.  I was missing the moment.  Probably the last fathers day Greyson or Caroline would sleep in my arms while watching golf.  I was missing all of it.  Too wrapped up in thinking about what I wanted to happen, and not living what was happening.

The Replay

Thanks to technology we can actually relive our lives in slow motion.  The Apple iPhone even allows you to edit your videos with slow motion effects right on the phone.  Unfortunately, the camera crew had the day off, so no one was around to capture the moment.  Just something I will have to remember.  That's probably why I am writing it down for all to read.  As the say, take the time to smell the roses.  It really helps you remember how sweet life is.

June 22, 2013

A property a year will make you a millionaire

After a lot of positive response from my post last week The tortoise wins every time I decided to see what other theories we could test out.  My business partner Stephen Smith suggested we look at something simple like a $100,000 property purchased every year for ten years.  At first, I thought that this would cost more money than my slow and steady approach of buying a new property every five years. But there are some added benefits to buying this way.  We will have to put more money down, but we will speed up the buying process which might make us a millionaire sooner than we expect. So here is the plan.  We buy a $100,000 home every January.  We put 20% down so we can avoid paying PMI.  Because we are "investors" our rate will be a little higher than if we were owner occupants.  For simplicity sake, we are going to assume that rent covers all carrying the cost of the loan, not a penny more or a penny less.  Yes, you will get more rent over time than you need, but that is a whole different post.  We will assume that these properties appreciate at an average rate of 3%(1)

Ready, set, go!

Year one is upon us and we buy our first rental property.  $20,000 down payment, loan of $80,000 rate of 6%. (we are going to use 6% for the rate every time just to keep things simple.)  After we close we have renters paying a little more than it really cost to own it, but for our math, we are going to assume that money is in savings never to be touched.  (well, unless we need a new roof, or AC, or foundation)  For all our calculations we will assume that the property is self-sustaining.


Year two and three go the same way.  Each year we are saving up $20,000 to buy a new property.  Sounds expensive I know.  If we have just purchased property #3 we now have put $60,000 into our investments.  Let us see how things look.

  • Property 1, is now worth, $106,090 and we have paid the loan down to 77,884.82.  A value of $28,205.18
  • Property 2, is now worth $103,000 and we have paid the loan down to 78,933.04.  A value of $24,066.96
  • We have paid in $60k for three properties and their combined value is now $309,030.  After we paid the debt on the property we will have a profit of $72,272.14

Years 3-7 go as planned.  We have just purchased our 7th property.  We have invested $140,000 in 7 years.  A very strong investment.  By now we have realized that each property is a little bit different part of town, as we had to move around a bit to keep to our criteria of $100,000 homes.  Also in real life rates would have changed a little.  Since it is hard to predict rates we are keeping ours in the example at 6%.  If your rates go up, rents will go up as well because fewer people will be able to buy homes, so it should all work out. Either way, we are keeping to our assumption that the properties more or less pay for themselves.  So where do we stand as we start year 7 with our seventy property?

  • Property 1, is now worth $119,405.23, loan balance is, 73,004.31, giving us a value of $46,400.92
  • Property 2, is now worth $115,927.41, loan balance is, 74,336.06, giving us a value of $41,591.35
  • Property 3, is now worth $112,550.88, loan balance is, 75,590.44, giving us a value of $46,960.44
  • Property 4, is now worth $109,272.70, loan balance is, 76,771.95 , giving us a value of $32,500.05
  • Property 5, is now worth $106,090.00, loan balance is, 77,884.82, giving us a value of $28,205.18
  • Property 6, is now worth $103,000.00, loan balance is, 78,933.04, giving us a value of $24,066.96
  • Property 7, we just purchased for $100,000,  Balance is $80,000, value is $20,000

After 6 full years and our 7th purchase, we have invested $140,000 in cash, we have $766,244 worth of real estate.  If we sell everything today and pay off all the loans we will have around $239,722 left.(2)  That is about a 12% ROI each year.  So we are doing ok.


It is now year 15.  We have purchased all ten properties as planned.  Investing some $200,000 in ten years.  A very impressive number if I do say so myself.  Retirement is getting closer every day.  So what do things look like now?  Well, we have had some fluctuation in the market.  Ups and downs on price and rate.  We have been able to dollar cost average the purchase of real estate.  When the market went down, we got to buy in a little nicer area, when the market was up we had to buy out-of-town.  But now we have 10 great properties and let's see how we are doing at the end of year 15.

  • Property 1, is now worth $155,796.74 loan balance is, 55,852.03, giving us a value of $99,944.71
  • Property 2, is now worth $151,258.97 loan balance is, 56,839.08, giving us a value of $94,419.89
  • Property 3, is now worth $146,853.37 loan balance is, 59,109.94, giving us a value of $87,743.43
  • Property 4, is now worth $142,576.09 loan balance is, 61,248.88, giving us a value of $81,327.21
  • Property 5, is now worth $138,423.39 loan balance is, 63,263.55, giving us a value of $75,159.84
  • Property 6, is now worth $134,391.64 loan balance is, 65,161.19, giving us a value of $69,230.45
  • Property 7, is now worth $130,477.32 loan balance is, 66,948.58, giving us a value of $63,528.74
  • Property 8, is now worth $126,677.01 loan balance is, 68,632.13, giving us a value of $58,044.88
  • Property 9, is now worth $122,987.39 loan balance is, 70,217.88, giving us a value of $52,769.51
  • Property 10, is now worth $119,405.23 loan balance is, 71,711.51, giving us a value of $47,693.72

That is $1,234,420.09 worth of real estate that we only paid $200,000 for.   Not bad.  Two other things are also happening that we are not taking into account.  One is by now your rents have increased by about 3% a year.  So most likely each of these properties is making you more money per month than you would need to cover the notes.  Since the notes are at a fixed rate, the largest part of your expenses is fixed.  Taxes will go up and down, and maintenance will also cost more now, but on average you will be making more money.  You can either be pocketing that money or, you could be using it to pay down the debt.  Either way, the increase in rent would have put your return much higher than I have calculated here.


You don't have to buy anything "special" or at a great price to make money in real estate. Sure those things help amplify the results, but nothing does more for real estate than time.  Time is the greatest creator of wealth in real estate.  The longer your time horizon the less critical it is to by the "right" property.  Making sure you buy a good rental property that will stand the test of time is job one.  Everything else is just a bonus.  


  1. If we pick the right properties we should do better than 3%, but because I don't like to oversell we will play it safe with 3%.
  2. I did not include real estate commission or closing fees because those vary from state to state, and we are not ready to sell just yet.