Real Estate Article

We were looking for real estate partners because we were new to the Tucson area. We found that two identical houses here can be $50,000 apart in price if they are three blocks apart. Also, the styles are different from anything we had in Michigan, so it would be good to have some help figuring value and what buyers want.

At the Arizona Real Estate Investors Association meeting I announced that we had money to invest in fixer upper real estate, and we were looking for partners. The host wrote our names and phone number down on the overhead projector along with the others. About three days later we got a call.

Sam and Nikki were nice people, and we got along well when we met. Their offer had been accepted on a house. Looking at the comparison sales they had found, it seemed like a good buy. They had done rough estimates of the rehab and remodeling costs, and it looked like we could make some money. There would be a third couple involved, so the expected $75,000 profit would be split three ways. Agreeing in principle to the deal, we arranged to meet the other partners at the house after closing.

The new millennium has not been good to stocks, bonds, mutual funds and other financial investments.  Most investors have found that the best performing asset in their portfolio is their home.  Real estate has been a safe haven for investors with appreciation far outpacing other investments.  With the security and growing values of residential real estate, a growing number of home owners are now investing in a second home.  

There are a wide variety of reasons why people built or buy second homes.  City dwellers may want a home in the country for weekends and holidays.  Northern may want a home in the sun where they can golf year round; Southerners may want a home in the mountains close to a ski resort.  A large number of Baby Boomers are eyeing retirement and are building second homes anticipating it will become their main residence. 

Everyone has a property investment story, and in Western Canada the stories often have a pretty strong Whistler element.  Whistler has in the past offered spectacular payoffs for property investors.   You could in 1980 have bought a prime waterfront property on the lake in Whistler for $10,000.   Today the land alone would command $2m upwards, and other plots of land can sell for $3-4m.   Add a house and you could be looking at up to $20m (the ?ludicrous - price being asked for the Couloir? a ski-in, ski-out location on Whistler Mountain).  Prices have at least doubled in the last 5 years.  Talk to realtors in Whistler and you will invariably be told that there is still considerable upside.   Is there any mileage in buying in at these prices?