Obtaining Financial Freedom Through Real Estate

Source: RISMedia

Linda McKissack and her husband were $600,000 in debt when they made a real estate decision that turned their lives around. Today, the McKissack Realty Group sells over $60 million and over 300 properties each year. McKissack says their biggest success is not their property sales; it’s how they learned to generate over $250,000 a year in passive income and achieve financial freedom through real estate.

Linda McKissack is an entrepreneur, REALTOR®, and the author of “HOLD: How to Find, Buy and Rent Houses for Wealth.” She’s also a trainer and speaker whose greatest passion is helping others achieve their maximum potential. She’s created five successful businesses and is an owner/investor in numerous residential and commercial properties.

Her message to agents everywhere: “You don’t have to live paycheck to paycheck. Learn how to obtain financial freedom through real estate.”

Using lessons from her book, McKissack explains how to start investing and earning money even when you have no money.

“If you don’t design your life, something or someone else will,” McKissack said. “Keep this question in front of you: ‘What would happen if today the financial resources of your business totally disappeared?’ It happened to us; it happened to people in Houston, in Florida, in Puerto Rico with the hurricanes. What are you going to do when it happens to you?”

Drowning in Debt
“I was 23 years old and I didn’t know what the word ‘economy’ meant,” McKissack said. “In the ’80s the economy was built around savings and loans, oil and gas and real estate, and it all crashed.”

McKissack’s husband shut down his Dallas nightclub, and four years later they were $600,000 in debt. He asked for her help digging out of debt, and said his mentor once told him the way to make a lot of money fast was in real estate.

“I’m sure he meant invest in real estate, buy real estate,” McKissack said, “not put your wife to work selling real estate, but sell is what I did.” McKissack took a job in real estate sales, and Jim went to work in her office. They restructured their debt with a simple goal: getting back into the black.

It was a good decision, but it took time to see the wisdom in it. “I made $3,000 that first year, but it cost me $15,000 to $17,000 to make that first $3,000. Fast forward to today and our team closes over 200 transactions a year and $60 million in volume. Today we run as a standalone business.”

McKissack’s first real estate investment came in 1991. They had no cash, a lot of debt to pay off and weak credit, and the only real estate they owned was the house they lived in, which had a big mortgage.

“We found a property the seller wanted to sell fast, without listing it. They asked if we knew of an investor who would purchase the home. We knew it was a good deal, even though the house needed repairs. We formed a partnership with our builder who put up money and got a loan. We located the property and put our commission into the deal. He did the repairs. We flipped the property for $15,000 profit and we were off to success.”

What investing taught McKissack was how to beat the REALTOR® dilemma. “The REALTOR® dilemma is the day you sell your last house is the day you make your last dollar. I used to think if I just sold 50 more houses, those 50 houses would solve all my problems. We keep thinking 50 or 100 or 200 houses are going to solve all our cash problems, but it’s not. Cash flow is not the answer. If you follow the statistics, if we don’t do anything different; most of us will die broke or dependent on the government, family, or friends.”

Not wanting to rely on others for their financial security is what started the couple down the road to financial freedom with HOLD.

Creating Financial Freedom With HOLD
HOLD is a long-term real estate investment strategy to which every real estate investor should aspire,” said McKissack. “Be an investor, not a speculator. We bought our first property while we were still $600,000 in debt. We now own over 100 single family properties. There are a lot of people who have money they want to invest, but they don’t have the expertise to do it.”

Going 50/50 is a definite option, especially using the HOLD strategy. The HOLD strategy is simple:

  1. Find the right property for the right terms and at the right price.
  1. Analyze – Make sure you have an offer in which the numbers and terms make sense. Do your due diligence on market values, rents, home prices and appreciations to limit your risks.
  1. Buy an investment property where you make money going in. If your numbers are right, you’ll make money on the margin and get a positive cash flow from the start. Don’t buy a property hoping it will become a good deal. Buy it because it’s a good deal to begin with.
  1. Manage a property until it’s paid for or you have a large amount of equity to leverage. Learn to run your investment properties like a business.
  1. Grow your way to wealth and financial freedom. If one investment can bring you $2,000 a month, imagine the income from 10, 20 or 100 properties.

If you’re actually flipping houses (buy and sell), you’re just creating more cash flow. What you need is an investment. Our HOLD formula for wealth-building:

  • Buy property at 10 percent or more below market value.
  • Put at least a 20 percent or more down payment on the property.
  • Be at a 70 percent loan-to-value ratio or less so you’re not over-leveraged.
  • Cash flow should be a minimum of $200 per month after PITI and management on a 15-year amortization.
  • Buy a newer home (15 years or newer) if possible.
  • Buy a 3-4-bedroom brick or stucco (if possible).
  • Buy homes in stable or appreciating neighborhoods.

7 Rules of HOLD Real Estate Investing

  1. Be an investor, not a speculator.
  2. Cash flow is king.
  3. It isn’t personal, and the numbers matter most. Don’t get attached to the house or people.
  4. Learn the magic of leverage.
  5. Cultivate relationships with other investors and people involved in real estate investing.
  6. Keep learning from others.
  7. Give to others and share your information, wealth, and knowledge.

By purchasing 20 single family rental properties that each generated $1,000 cash flow per month, and completing those purchases in five years, with each property financed on a 15-year note with at least 20 percent down payment, the McKissacks were able to keep investing in additional properties.

The HOLD strategy isn’t a get-rich-quick scheme, but a long, slow process that involves learning how to build and sustain a strong team and how to run your real estate career as a business, not a job. These and more tips and information on building passive income are in a recent webinar featuring McKissack. Learn more about the team-building cycle, including how to hire great people who can take you greater financial and business success, by listening to the entire webinar.

For more information, please visit connect.homes.com.

Existing Home Sales Flounder in August

Source: RISMedia


Existing-home sales floundered in August, posting higher than one year prior but lower than in July, the National Association of REALTORS® (NAR) reports.

Existing-home sales totaled 5.35 million, a 1.7 percent decrease from July but a 0.2 percent increase from one year prior. Inventory decreased 2.1 percent to 1.88 million, 6.5 percent below one year prior.

“Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales,” says Lawrence Yun, chief economist at NAR. “What’s ailing the housing market, and continues to weigh on overall sales, is the inadequate levels of available inventory and the upward pressure it’s putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale.”

Inventory is currently at a 4.2-month supply. Existing homes averaged 30 days on market in August, six less days than one year prior. All told, 51 percent of homes sold in August were on the market for less than one month.

The metropolitan areas with the fewest days on market in August, according to data from realtor.com®, were San Jose-Sunnyvale-Santa Clara, Calif. (29 days); Seattle-Tacoma-Bellevue, Wash. (30 days); Vallejo-Fairfield, Calif. (31 days); and San Francisco-Oakland-Hayward, Calif., and Salt Lake City, Utah (both 32 days).

The median existing-home price for all types of houses (single-family, condo, co-op and townhome) was $253,500, a 5.6 percent increase from one year prior. The median price for a single-family existing home was $255,500, while the median price for an existing condo was $237,600.

“Market conditions continue to be stressful and challenging for both prospective first-time buyers and homeowners looking to trade up,” Yun says. “The ongoing rise in home prices is straining the budgets of some of these would-be buyers, and what is available for sale is moving off the market quickly because supply remains minimal in the lower- and mid-price ranges.”

Single-family existing-home sales came in at 4.74 million in August, a 2.1 percent decrease from 4.84 million in July, but a 0.4 percent increase from 4.72 million one year prior. Existing-condo and co-op sales came in at 610,000, a 1.7 percent increase from July, but a 1.6 percent decrease from one year prior.

Twenty percent of existing-home sales in August were all-cash, with 15 percent by individual investors. Four percent were distressed.

The Midwest and Northeast saw positive activity in August, with existing-home sales rising 2.4 percent to 1.28 million in the Midwest, with a median price of $200,500, and 10.8 percent to 720,000 in the Northeast, with a median price of $289,500. Existing-home sales in the South and West fell, 5.7 percent to 2.15 million in the South, with a median price of $220,400, and 4.8 percent to 1.20 million in the West, with a median price of $374,700.

“Some of the South region’s decline in closings can be attributed to the devastation Hurricane Harvey caused to the Greater Houston area,” says Yun. “Sales will be impacted the rest of the year in Houston, as well as in the most severely affected areas in Florida from Hurricane Irma; however, nearly all of the lost activity will likely show up in 2018.”

First-time homebuyers comprised 31 percent of existing-home sales in August, a decrease from 33 percent in July.

Overall, the housing market is on a continuing path to recovery—but its progress is threatened by recently proposed tax reform.

“Consumers are smart and know that any attempt to cap or limit the deductibility of mortgage interest is essentially a tax on homeownership and the middle class,” Brown says. “A studycommissioned by NAR found that under some tax reform proposals, many homeowners with adjusted gross incomes between $50,000 and $200,000 would see an average tax increase of $815, along with home values shrinking by an average of more than 10 percent. An even steeper decline would be seen in areas with higher property and state income taxes. Congress must keep homeowners in mind as it looks towards tax reform this year.”

REALTORS®: Home Staging Cuts Time on Market

Source: RISMedia


Home staging offers a distinct advantage for sellers: a speedy sale.

Sixty-two percent of sellers’ agents believe staging a home cuts down the time it spends on-market, with the majority believing it “greatly” reduces the window, according to the new 2017 Profile of Home Staging from the National Association of REALTORS® (NAR). Seventy-seven percent of buyers’ agents believe staging a home helps buyers envision themselves living in it, and 40 percent believe it prompts buyers who first saw the home online to visit it in person.

2017 Home Staging Report (PRNewsfoto/National Association of Realtors)

2017 Home Staging Report (PRNewsfoto/National Association of Realtors)

Staging can also have a positive effect on home value. Thirty-one percent of buyers’ agents and 29 percent of sellers’ agents believe it adds anywhere from 1 to 5 percent, while 13 percent of buyers’ agents believe 6 to 10 percent and 21 percent of sellers’ agents believe 8 to 10 percent. The cost of staging is often fronted by the seller or sellers’ agent.

Buyers’ agents caution, however, that staging is only beneficial if the home is staged to appeal to general, not specific, preferences. Most buyers’ and sellers’ agents believe the living room is a key space to stage, as well as the kitchen, the master bedroom and the yard. They also believe decluttering, depersonalizing and a deep clean—beyond staging—are essential for a show-ready home.

Thirty-eight percent of sellers’ agents stage all of their listings before placing them on the market, while 14 percent only stage listings that require it. A near-even 37 percent do not stage their listings at all.

“REALTORS® know how important it is for buyers to be able to picture themselves living in a home and, according to NAR’s most recent report, staging a home makes that process much easier for potential buyers,” says NAR President Bill Brown. “While all real estate is local, and many factors play into what a home is worth and how much buyers are willing to pay for it, staging can be the extra step sellers take to help sell their home more quickly and for a higher dollar value.”

To our friends! We wanted to share with you information we recently discovered that we feel would be of interest to you and possibly save you a lot of money!

Insurance companies will pay for wildlife damages and for their safe removal! So, if you should ever have wildlife get under your house or in your attic space and then tear up the insulation or do other damage, call your insurance company and see if they can help you with the cost of repairing the damages before you call a repairman.

It just might save you hundreds of dollars out of your own pocket! Also, most insurance consider animal damage to your home to be an “Act of God”, meaning you are not at fault, and therefore your claim will not cause your future premiums to increase. Ask your insurance agent now.

Typical “Summer Slowdown” May Mean Opportunities For Frustrated House Hunters

Source: NWMLS

KIRKLAND, Washington (July 6, 2017) – For frustrated house hunters, there’s hope: the volume of new
listings added to inventory during June (13,658) was the highest total for any single month since May
2008 (14,176 new listings), according to the latest statistics from Northwest Multiple Listing Service.
“This time of year we see more new listings coming on the market than pending sales, and June didn’t
disappoint,” stated J. Lennox Scott, chairman and CEO of John L. Scott.

Noting the pace of sales is slowing and the number of multiple offers is moderating, broker Gary O’Leyar
suggested a summer breather is under way (as anticipated), which could yield “the season for a successful
purchase” for weary shoppers. O’Leyar, the designated broker/owner at Berkshire Hathaway
HomeServices Signature Properties, said this mid-summer real estate market “seems to be following a
fairly typical seasonal cycle” even though inventory is significantly lower than a year ago.

Northwest MLS director George Moorhead also commented on the “typical summer slowdown,” but said
it is more noticeable in outlying areas. “The hot core areas are still quite active as buyers vie for a new
home.” He also detected a slight increase in the time it is taking to market a home, and reported some
cooling off in the luxury market, saying prices may be reaching a plateau.

For many brokers, rising prices are an ongoing concern, with one industry leader describing the ever-
increasing prices as “startling.”

While the number of new listings was up about 7 percent year-over-year, total inventory lagged. Brokers
reported 14,482 active listings of single family homes and condos at the end of June, which is down 14
percent from twelve months ago when would-be buyers could choose from 16,838 listings. Compared to
the previous month, however, inventory jumped up 16 percent (12,481 vs. 14,482).

System-wide there was just over 1.4 months of inventory, but the supply varied across the 23 counties in
the MLS market area. King County continued to have the tightest inventory, with less than a month of
supply (0.84). Six other counties reported less than two months of supply (Cowlitz, Douglas, Kitsap,
Pierce, Snohomish, and Thurston). In general, four-to-six months is considered to be a balanced market.
“Inventory continues to go lower as prices continue to climb in Kitsap County, leaving us with about 1.5
months of supply and home prices that are up more than 12 percent from a year ago,” said MLS director
Frank Wilson, branch managing broker at John L. Scott in Poulsbo.

“Unlike a normal market for buyers, today’s market is not about the current inventory, rather it’s about
inventory that is coming on the market,” Wilson commented. “The real story is the increased number of
homes that will become available next month, and the month after.” He recommends buyers work out a
success strategy with their real estate professional before even looking at their first house.

8 Ways to Make Your Backyard a Summer Paradise

Source: Sage Singleton/RISMedia

Summer is the season to be outdoors. It’s the perfect time for backyard barbecues, neighborhood socials, and late-night evenings on the patio. You don’t need to travel to a luxurious and exotic location to enjoy spending time outdoors. Make your own backyard a summer paradise with these eight simple suggestions.

Inspect and update wooden decks

To make your backyard a summer haven, take some time to inspect and update your deck. Wooden patios and decks can be warped by cold weather, so you’ll want to replace loose or missing slats as needed. Sand, stain, and seal your deck once you’ve made sure it’s structurally sound. If you have a stone patio, check for missing pieces and update as needed. Once this is complete, you’ll have a shiny and appealing deck you can decorate with patio furniture—creating a relaxing sitting area for summertime.

Purchase patio furniture and essentials

Once you have a designated patio or deck space, you’ll want to add some patio furniture so you can sit down, mingle with friends and family, and relax. Consider purchasing weatherproof patio furniture that is both comfortable and durable. Patio furniture can be exposed to harsh, seasonal weather, so you’ll want to make sure it lasts for years.

Get the basics including some lounge chairs, an umbrella, a hammock, and an outdoor table so you can enjoy meals or games outside. In addition to patio furniture, you may want to buy or build an outdoor fire pit. It’s a simple feature that adds so much to your backyard. Sit around the fire and socialize, roast marshmallows or even cook dinner on your own backyard fire place.

Add colorful cushions and pillows

You’ll want to add a splash of color to your patio so it’s eye-catching and sings of summertime. Buy some bright-colored, and comfortable throw pillows and cushions to spice up the furniture. The bright colors and fun patterns will entice people to sit down, relax, and enjoy your backyard paradise.

Get a rug for the patio

Consider adding a rug to the patio or deck area to make the space feel cozier. Outdoor rugs vary in material, size, and shape and are generally made to last in all types of weather. They make a great addition to your space, and can also protect your deck.

Install outdoor lighting

Nothing is more magical than twinkling lights against a royal-blue evening sky. Add strands of tea lights or other innovative lights to create a fairy-tale effect in your backyard. In addition to the decorative lighting, you’ll want to consider adding sensor or smart lights to your backyard for added security. Smart lights are a great way to ensure the backyard is lit—you can even control smart lights with your smart phone.

Make the backyard private

You may love your neighbors, but that doesn’t mean you want them always peeking into your backyard. Be creative when thinking of ways to ensure better backyard privacy. One easy way to create a private, secluded backyard paradise is to install a fence. Not only does it ensure privacy, but it is an essential safety measure. Install a strong, secure fence to create a private and safe backyard.

Update your landscaping

Landscaping can make or break your backyard. It’s essential to take time to update your landscaping to create an outdoor paradise. You don’t need extravagant plants or trees to make your backyard grand. Take some time to cut back unruly trees and bushes, pull the weeds, water and trim the lawn, and plant flowers around the yard. These simple updates will make a world of difference. You’ll have your own secret garden in no time!

Secure outdoor belongings

Once you’ve created a magical backyard space, you’ll want to take the necessary precautions to safeguard your belongings. Make sure your garden tools and supplies are in a locked shed—away from kids, pets, and burglars. Take time to assess the backyard for any security breaches. This will keep your family safe and protect your backyard, patio, and deck from major damages.

Summer is a wonderful time to relax and enjoy being outdoors. Update your own backyard and you’ll have access to a private paradise any time you want.

The Changing Face of Real Estate: Who’s Buying and What Are They Buying?

Source: Denise Lones, Real Estate ZebraBlog

The National Association of REALTORS has been studying home buyers and sellers by generation since 2013.  The Home Buyers and Sellers Generational Trends Report looks at both the differences and similarities of the generations.  The report also looks at how the generations affect the real estate industry.  This report is very important because it details who is increasing in numbers in the market and who is decreasing. This is critical information for builders, developers, real estate agents and remodelers.  Some of the highlights include the following:

  • The largest share of home buyers over the past four years has consistently been the Generation Y demographic (Millennials 36 years old and younger). They represent over 34% of all buyers in the market place.
  • The Millennials also had a large student debt burden. Over 46 percent of buyers in this demographic had student loan debt with a median loan balance of $25,000.
  • Buyers aged 37 to 51 also were burdened by student debt but a smaller number of this age group totaling 27 percent have student loan debt. Their student loan debt median balance is even higher than the Millennials at $30,000.
  • The buyers in the 52 to 61 year old age group were the buyers most likely to buy a multi-generational home.
  • Buyers in the 62 to 70 year old age group are the most likely to move out of their original area with more flexibility when choosing their new location to live. Many are moving closer to children or relatives and some are even choosing to move out of state.
  • The most important finding had to do with how these generations prefer to find their home and ALL generations said they preferred to work with a real estate agent. In an industry where everyone seems to want to take a piece of the real estate agents earning pie, this is great news.  Real estate agents are a very important part of the real estate transaction and buyers of all generations unanimously agree with that.

So the next time anyone tells you that real estate agents will soon be a thing of the past…ignore it!

The Best Is Yet To Come For Homebuyers

Source: RISMedia

It’s a seller’s market out there, and for homebuyers, the struggle this spring is real: few affordable options, and price growth that just won’t quit.

Another issue’s working against them, too: timing.

According to a recent analysis by Zillow, the best time for buyers isn’t spring, but summer—the end of summer, that is. Why? There’s more supply as the season winds down, specifically in August, and sellers who weren’t so lucky earlier on become anxious to unload, cutting prices before the weather changes and the school year starts.

In the analysis, August had more listings than any other month (8,000 more in L.A., for instance), and saw the highest share of listings with lowered prices. Comparing reductions over the spring and summer months:


“In such a competitive housing market, it’s easy for buyers to get frustrated when they are putting in multiple offers without success,” says Dr. Svenja Gudell, chief economist at Zillow. “Buyers who start their home search in the spring may still be looking months later—but for those who can wait it out, the end of summer will bring more favorable conditions. Homes that may have been overpriced earlier in the year are more likely to have a price reduction, and those listings passed over in earlier months may look better with a fresh perspective.”

For more information, please visit www.zillow.com.

Report: Homeownership Is More Than Just the Facts

Source: RISMedia

Homeownership is the epitome of the American Dream not only for its advantages as a financial asset, but also for its sociocultural value—in fact, most renters associate owning a home with the ultimate ideal, despite having some difficulty affording it.

A recent report by cost information website HowMuch.net reveals the goal is within reach—for some—and most are set on realizing it regardless of cost.

In a side-by-side analysis of monthly housing costs, the slimmest gaps between owning and renting are shown to be in the Rust Belt and the Southeast. Homeownership in West Virginia is the most easily achievable, requiring only $297 above and beyond the cost of renting. A home in Indiana, Arkansas, Florida and South Carolina is also relatively attainable.

Credit: “Buying vs. Renting a Home by State” by HowMuch.net

Many states favor renters expense-wise—the Garden State having the starkest contrast between renting and owning—but the intangible implications of homeownership, such as privacy and security, are outweighing cost barriers. The report cites recent Census data showing that although the homeownership rate is idling, owner household formation is occurring faster than renter household formation.

Still, the monthly cost of owning is, for many would-be homeowners, a non-issue. The report concludes:

That ideal vision of “home” is strong enough to convince over half of all Americans to stretch their budgets in search of the yard with white picket fences. In all, no amount of data can overcome the perfect image of the ideal home.

Source: HowMuch.net