Team Updates

Hey Dad, what's the best time of year to buy a house? That's a question that gets asked a lot. Yeah. It doesn't really matter. Meaning in the sense that it's kind of like planting a tree when's the best time to plant a tree, well 20 years ago, next best time is now. When it comes to buying, it's important a lot of times people get really caught up in like okay I'm pre approved, I'm ready to go and they get so excited they just want to jump right in and buy something right away and that's a lot of times where you see houses getting bid up a lot because people are so excited and they're like I  finally found my dream house or it's exactly what I've been looking for and they will pay more for it. It's really important to be patient and that doesn't matter what time of year it is, it's having that that patience to find the right place, make sure you're paying the right price because it's easy in real estate to make money as prices go up but it's also easy to lose money if you make a bad buy, overpay, have construction problems or problems within the house it can really cost you a lot of money because especially as first time home buyers are usually I'm going to say 5% down or 10% down if you don't have a lot of equity in your house like you know say you're buying a $300,000 house and you save $15,000 over the last couple years, great wonderful, but now you get in there and now you find out that you have to replace your roof and that's going to cost $15,000 well you just spent the last two years saving that how are you supposed to come up with $15,000 right? So you can really get into a lot of trouble quickly if you're not making smart decisions and taking your time and looking. Absolutely. Has there ever been a house for you that you personally bought that lost money or wasn't a good deal? Yes. Yeah? Can you tell me about that? Yeah, a couple times most houses make money just be cause real estate is pretty easy you know your numbers going into it. Sometimes the market doesn't react the way you think it's going to. We usually are really good at planning for the worst case scenario so the one we lost money on was a condo that we bought for $150,000, we thought we could do a quick cosmetics on it and sell it for about  $180,000, $190,000

and it ended up that we had to do more work to it than we thought so we ran in the over budget on the expenses and then when it came time to sell it we sold for $10,000 less than we thought we would so we pretty much broke even on it but we didn't didn't make anything so it was a lot of work. Another one we made money on it, it was another condo, we bought it for $160,000 we thought we could sell it for around $240,000 and we could have made good money on it because the renovation cost was about $25,000 which means we're in for about $185,000, $190,000 but then they had a special assessment come in on it for about $7,000 so that made the margin thinner and then we ended up carrying it longer than we anticipated and because we had it on a line of credit it was costing us about  $1500 a month to carry it so the carrying cost kind of killed the profit that we were going to make on so same thing basically walked away with zero. Yeah. So good lessons but again the reason why we didn't lose a lot of money because we went in with our eyes open knowing that okay in a worst case scenario that this is how bad it could be right and we've had other ones where it's been best case scenarios where you know what we expect we had a house where we thought we could sell for $220,000 but the renovation took longer which is like which is not good but again went along with the worst case scenario of how long it takes so paying more for holding costs but the market went up such that when we looked at I was like wait we can actually get at one point I was like oh we can get $250,000 for this house now we can get $260,000 and then it ended up getting bid up to $280,000 Wow. You know so that's how you can get those upside surprises too which is pretty cool. That's so amazing. Yeah. Yeah and to only you've been in real estate for over 25 years and to only have two houses where you've broken even I would say it's pretty good success. Thanks! No that's really good, that's super cool actually. Well it is pretty easy because you know the numbers going in yeah the only surprises that you made get is holding it longer, renovations taking longer or costing more for renovations but if you do it enough your numbers get tighter on what can be your worst case scenarios and that's always been the thing. If you buy this house what's the worst case scenario and can I live with that worst case scenario and if you can't live with it you don't have to buy it, go buy another one. Yeah. I love that, that's super cool.

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