Real Estate Investment 101- It's Not as Complicated as You May Think!

by Dan Jensen
Relocation Services Director - Equity Northwest Properties Group

This is a follow up to the May 30th post on Real Estate Investment.

I thought it might be useful to debunk some of the myths out there in the market place about complexity issues, need for huge financial reserves, "but the market is saturated with investors" issues, etc. By providing a short and simple overview of some of the investing strategies and processes within Real Estate, I'm hoping to stir your thinking and perhaps open doors of possibility as well! (Check back over the coming 3 Fridays)

When someone says, "real estate investor", what comes to your mind? Are you thinking Daddy Big Bucks finding great deals on huge commercial office buildings (are you thinking 'The Donald' about now?), or are you thinking about that little 87 year old lady you met last month who methodically purchased small rentable houses over 40 years of her lifetime and has been very comfortable financially for the last 20+ years living on the rents her tenants pay her every month?

Or maybe your thinking went right to the tanned fellow in jeans and work shirt who just finished remodeling that "fixer" he bought a month ago and who is about to 'flip' that property for a nice profit as a reward for his work?

There's no question that each of the above represents real estate investment. These and many other scenarios begin to describe the variety of paths you could choose to follow if you ever decided you'd like to invest in real estate. This is an especially important time to be thinking about such things, as we are highly likely to see a return to higher inflation rates in the USA, and real estate has traditionally been one of the most powerful protections against general economy inflationary cycles.

But most who think about investing in real estate don't ever put their thoughts into action. Lack of money is one concern. Not knowing a good deal from a "great" one is another concern. Carving out the time to do any kind of research and investing is another barrier for many.

Let's break it down in the days ahead and see if we can move beyond these "barriers" to RE investing.

Here's 3 pieces I'll be detailing in the weeks ahead...

1.) You CAN invest in real estate with VERY LITTLE MONEY in your bank account

2.) You CAN accumulate a strong RE portfolio, increasing your net worth steadily, over time.

3.) You CAN "Buy Low & Sell Higher", turning fixer properties into nicely remodeled properties. It helps if you're handy, but even if you're not, you can still invest in this way and make it pay.

Next Friday, I'll describe 2 tools that allow you to invest in real estate with VERY LITTLE MONEY.

Check back then, and as always... give us a call if you have questions. We love to help!

Have a great Father's Day weekend!

The Value of a View

by Rod Sager
originally posted on Real Estate with Realtor Rod 5/16/2014

Norwood Street, Camas, WA

A view is perhaps the most subjective part of evaluating real estate. What is it worth? In high end real estate a view is not just appreciated, it is often expected. View lots can easily command premiums in the 200% range. The problem with a view is that it may not be a 'forever' view. If one were to pay a handsome price for a property based on a wonderful view; they would be most displeased if that view were eroded years later. Trees can grow up and block a view. A neighbor can build in front of the view.

359th Avenue, Washougal, WA

The value in the view is subject to the person buying the property. I happen to value views very high. I like a good view. Other buyers may not be so inclined. If a view is something highly valued by a buyer, then that buyer should exercise caution to be certain the view will last.

Homes that are perched out on a cliff or bluff are likely to have a lasting view. Homes set on large parcels with allot of space in front of the view will also likely be able to control the fate of the view. Waterfront properties tend to keep the view indefinitely as well.

Ammeter Road, Washougal, WA

Buyers should not pay a large premium for a view that is easily corrupted. If a neighboring property owner has the authority to plant big trees or build a large structure that will block the view, then that view's arbitrary value is greatly reduced.

A view is also subject to its own 'greatness'. Is the view a peek-a-boo view? Is it seasonal only? Is the view out a obscure bathroom window? Or is it a grand panorama placed conveniently in front of a large living room picture window? All of these factor into the value an appraiser might place on the 'view' a property offers. An appraisers opinion of the view's value may not align with the buyer's idea. If the buyer is borrowing money for that home; the appraiser's opinion becomes a Gospel truth.

500 Broadway, Vancouver, WA

Urban views in high rise condos are often fleeting. The city may approve a taller high-rise right in front of an existing high-rise. The view shown here on the relatively low, 5th floor of 500 Broadway, Offers a straight shot right up Broadway. Since it is unlikely the city will ever approve a building in the middle of the street, this view is at least partially protected.

There are many views here in Clark County, Washington that are suspect at best. Yes they offer a beautiful vista across the river into that other state...Oregon. But often there are young trees that will soon grow mature or another subdivision that may go in soon. Buyers willing to pony up big bucks for a view need to be sure the view is going to endure.

Buyers should understand that short of deeded protections in the land in front of a properties "view". There are no guarantees that any view will always be there. Buyers should consider the likelihood that the particular view they are buying is going to be a 'forever' view. The view below looks across four acres that is owned by the view holder. This is a fairly protected view.

Bear Prairie, Washougal, WA