Make a move: Three reasons to sell your home

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There is always competition when it comes to selling a house, no matter what time of the year it is. Some house owners, particularly those who have lived in the same house for many years, might not understand this specific market behavior. However, there are many circumstances that can justify the sale of the house:

Property upgrade or downgrade

Space matters to the people who purchase a home. Growing families might need to relocate to a larger house to live comfortably. On the other hand, couples with children who have moved out have to buy a smaller home, as they won’t have any use for all the space.

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Career change

A person’s job can sometimes require him or her to relocate to a different neighborhood, state, or sometimes a different country. Moving closer to the workplace can cut down transportation costs and travel time.

Lifestyle change

As people mature, they start to feel the urge to travel, pursue a hobby, or throw excess caution to the wind. They give in to the desire to explore and see the world. Meanwhile, health issues are also compelling reasons. Physical injuries or ailments like back and joint pains may make it difficult for some people to move around their current house. v Deciding to sell a home is a big decision, which shouldn’t be taken lightly. Whatever the reason, it is best to consult with a qualified real estate professional who can assist in crunching the numbers, so that the sale will be a good one.

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Equity Bank CEO Steve Liefschultz is a banking and real estate expert with over 30 years of experience in the industry. Read more about real estate topics by visiting this blog.

Amid spike elsewhere in US, Minneapolis rental prices going down

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Recent data from real estate company Zillow show that while rental rates have been rising at a steady rate for most of the US, the Twin Cities metro was one of the two major markets that saw decreases in rental rates. The other city that had a decrease in rental rate was Chicago. In January, rental prices increased a seasonally adjusted 3.3 percent compared to the same period a year ago.

The Great Recession had left many Americans with low incomes and difficulty in saving for down payment, and therefore unprepared for homeownership. Others, meanwhile, are just struggling with expensive housing. At the end of 2014, homeownership rate went down to 64 percent, which was the lowest level it has been at in 20 years.

With the job market improving, more millennials are expected to rent apartments. Developers, meanwhile, have started to respond to the increased demand and there has been a 24.5 percent increase in groundbreakings for apartment complexes.

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While rental prices increased for most of the country, the median price in Minneapolis went down 0.3 percent to about $1,500. Renters are reported to have been taking advantage of the fact that Minneapolis has deviated from the nationwide rental pricing trend. With the decrease in rental prices, people looking to rent can expect to find a robust market with several choices available.

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Steve Liefschultz is a banker, a real estate investor, and the owner of a real estate development and management company in Minnesota. For more news and updates on the Minnesota real estate market, follow this Facebook page.

Understanding Minneapolis’ business ecosystem

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For people with entrepreneurial dreams, the city of Minneapolis may just be one of the best places to start a business.

Minneapolis is known for its world-class urban assets. Its economic base is peppered with both big and small companies, and not to mention, a healthy workforce that can help startups achieve long-term growth in the industry.

However, despite foreseen advantages, the “Mill City” has some unique qualities that may affect the operation of a business. As a guide, below are some relevant facts to understand the city’s business climate better:

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Small businesses thrive in the city. According to Minneapolis’ Department of Community Planning and Economic Development (CPED), 19 Fortune 500 companies and several startups in the Russell 2000 Index are located in the lake city. The city, which is hailed as the new capital of the North, sees more than 70 companies launched every week.

High taxes are critical drivers in the city and the state’s current economic progress. Minnesota’s high government spending and high taxes are geared toward the diversification of the local economy. In effect, Minnesota has become the fifth fastest growing state economy and the 9th best state for business, according to Forbes.

Reliable workforce. Among the largest metros in the U.S., Minneapolis ranks as the fourth best city in the country with the most educated and experienced workers. In addition, the metro tops the lists of the “smartest people” (Travel + Leisure Magazine 2009 survey) and “America’s most literate cities (Central Connecticut State University 2013 study).

Boasting a healthy economy for various industries, Minneapolis is one of the best places for entrepreneurship. With proper guidance and strategy, it technically is an excellent ground for business opportunities.

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Steve Liefschultz, Equity Bank chairman and CEO, is a Minnesota-based banker and real estate expert. Like this Facebbok page for more business insights in the city of Minneapolis.

Real estate: Is it still a good investment choice for retirees?

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Some retirees dream of a home on a sunny part of the beach, while some want a multifamily building for investment purposes.

Unlike younger investors, retirees don't have time to waste in turning around a failed investment. Maintenance and repair of properties and unforeseen incidents like fires and hurricanes mean money out of pocket for retirees, as do unexpected vacancies and delinquent renters. In addition, real estate cannot be easily liquidated.

However, real estate investments provide monthly income from rent and dividends and can help retirees fund their lifestyles. Rents increase over time and offer tax advantages that can be a proportionate source of relief to the property owner.

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Real estate as an asset class is a good diversifier that effectively mitigates risk in well-rounded investment portfolios. Compared to company stocks that lose their value if the company files for bankruptcy, a property or real estate investment is a safer choice and has the potential to generate higher returns than the stock market.

When looking for a property to invest in, retirees should choose one that is likely to retain or increase its value, provide reliable income, and function as a good hedge against inflation.

Retirement isn't the time to actively seek get-rich schemes, so real estate investors at this age should tread carefully. Retirees interested in investing in real estate should research thoroughly and consult a financial advisor before making a commitment.

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Steve Liefschultz of Equity Bank is a seasoned real estate investor and banker. For related articles, subscribe to this blog.

House flipping tips for the newbie residential real estate investor

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“House flipping” has gained mainstream popularity thanks to the success of TV shows such as “Homes under the Hammer” and “Flipping Out.” Although these shows make it appear that house flipping is easy, it's not, and it is also, in fact, risky.

The following are some tips to help newbie residential real estate investors turn a profit on flipped houses.

Research 

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There's a reason most of those who are successful at flipping houses are the ones who have been in the real estate industry a long time. Flipping houses isn't just about finding a cheap house, fixing it, and selling it at a profit. Real estate investors eager to get into the house flipping craze should educate themselves on the ins and outs of their local real estate market, the intricacies of home equity lines of credit, mortgage loans and other home financing options, and the cost and effort involved in repairing and updating a home. All this information minimize risk and increases the chance of turning a profit.

Start only when financially ready 

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Flipping houses entails a lot of capital. Apart from the cost of acquiring a residential property, there are loan interest rates, property taxes, capital gains tax when selling above the purchase price, utilities,and renovation costs, not to mention advertising. Investors should factor all of these costs in the equation.

Look for quick-fix houses 

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The most flippable houses are those that don't need a lot of time or resources to get them ready for sale.

Houses with cosmetic defects such as chipped paint and pockmarked walls are relatively cheaper and easier to update and flip than homes with more extensive damage such as mold and plumbing issues. Many flippers are handy with a hammer themselves, and remodel their own for-sale properties to cut back on repair costs. Others are good at networking and have amassed a number of useful contacts in the plumbing, carpentry, electric, carpet-laying, and landscaping industries.

House flipping can be fun and rewarding, but real estate investors should be aware of the hard work and research it entails before pursuing it as a career.

For more articles and tips on investing in real estate, subscribe to this Steve Liefschultz of Equity Bank blog.

Diversifying your investment portfolio with commercial real estate assets

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A traditional real estate portfolio consists of investments made on personal real estate properties. Typically, investors are encouraged to place stocks on private assets because these are easier to maintain and control. Since these properties are mainly for personal use (that is, for someone to live in), there are less requirements and policies to consider after the initial down payment. This is generally good practice, but with the ever changing and fluctuating global market, many real estate advisors, such as Steve Liefschultz, suggest diversifying the portfolio to include commercial real estate assets.

By investing in commercial real estate, the investor significantly reduces any financial loss or risk that could be incurred in any market crisis. The secret to stable income from such investment lies in a well-balanced and maintained portfolio that is strong enough to counteract any type of fluctuation.

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Before anything else though, several main differences between commercial and residential properties have to be kept in mind. Some of these might be obvious, but the smart investor understands that calculated risks and judicious assessment assessment are always the plan. Here they are as compiled at Entrepreneur.com by Danielle Babb:

Commercial assets are valued differently. Commercial properties are sold based on their income from usable square footage.

Cash flow is greater. Commercial assets are normally leased to several tenants who help increase the yield per square foot than a standard single-family property.

Commercial leases are longer. This helps the investor’s cash flow since stability ensures a more balanced portfolio.

As with any investment, it is highly recommended that the investor do his or her research before buying anything. The legwork does not only include online studies but also actually talking to previous owners or managers, if possible. The personal stories of leases and their opinions on the specific property will prove priceless in the decision making.

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Steve Liefschultz of Equity Bank has helped hundreds of clients make better decisions regarding their real estate properties. For more information, please visit this website.