Equity Transfer

Equity, until it is liquefied, has little tangible worth. We still believe that "no money down" house buying is a myth but sometimes" equity transfer" can be as good or better. Here is a summary of a transaction we did last year where homeowners moved their equity from their "personal residence into investment property and eliminated their house payment in the process! It went something like this: Anne and Will had a house with a mortgage of $81,000 and a payment of $851. The Realtors (that would be us) found 6 duplexes for $554,000. We then worked out the following proposal. Assuming that their home would appraise for $245,000, they could refinance it, pay off the old mortgage and $10,000 of personal debt, and end up with cash of$101,000 (80% refinance). The new house payment would be $1663. They would apply for a first mortgage on the duplexes for $404,000 from a local lender. This payment would be $3242 (PITI). Finally they would ask the seller to carry a second mortgage of $80,000 with a payment of$643. Wow that's a new total payment of $5548. Here's the good news. Will and Anne have just purchased 12 units with a good rental history (3.8% vacancy) with rents of $6000 to make that payment. Do the math and remember that old house payment of $851 disappeared in the refinance of the personal residence!
Magic? Well not quite. This may seem like a complex transaction, but most of the details were worked out by the Realtors. On the bottom line, Will and Anne's family cash flow has improved by some $800, (the old house payment); they are now building equity in two properties, their tax picture has improved and they haven't spent a dime out of pocket. They have simply "transferred equity".
Scott Mikel & Associates is an independent broker in Clark Count. You can reach them at 360-816-8800. Where customer service is more than lip service.

Do Ya Think?

Buy now! Interest rates may never be this low again!

Yesterday’s mail brought an “exclusive” offer to receive a book on the MIKEL family history. The slick marketing company obviously spent a lot of his client’s money trying to get me to buy, not just a book, but also the “World Book of Mikel.” WOW! Was I impressed? In fact, I was so impressed I asked several of my contemporaries here at the office if they wanted a copy, too (hoping for a quantify discount). No takers. Perhaps they don’t realize that there are only 868 households worldwide with the MIKEL name. In fact, one of these agents offered me a book on his family name. And I thought this was an exclusive offer! At the end of this not-so-exclusive offer I was reminded that since extra copies cannot be printed after the publishing date, I was to remember to “place my order today.”

That was last Friday and I didn’t order so I may never know about those other 867 households. (I already know about my brother and daughter.) …Oh well.

For the rest of the morning I decided to watch for all of the things that would happen to me if I didn’t do something. In all forms of media, the marketing technique of creating urgency exists, from cars to mattresses, and, I’m sorry to say, real estate. (I’ll bet you are surprised.) My point is this (You were hoping there was one.): when you decide to buy real estate, whether it is a personal residence or an investment property, beware. Establish a relationship with a Realtor you trust before you buy. Then listen to his/her advice. The urgency may or may not exist and, unless you are in the real estate market everyday you may not know.

The final thing I noticed on this subject was in the Columbian. Do you know that mortgage interest rates are at the lowest in six months! Then I had a thought … Naaaah, I would never stoop that low.

“Sam” and Scott Mikel are Brokers and owners of Scott Mikel & Associates Realtors. For honest advice and a new kind of customer service, contact them at scott@agentmikel.com

Around the Office

One of our tag lines is experience the difference. From the minute you walk in the door you will know we are serious about this one too. Our office is in a 100 year old house that has been lovingly restored in arts and crafts tradition, yet with all the convinces and technology you would expect to find in the most modern real estate office. Title people, lenders, real estate agents from other companies, customers and clients all comment on the friendly, homey atmosphere and often come just to hang out. Even if you have no real estate business, we invite you to drop by and have cup of coffee or whatever, you will see what we mean.

How To Start A Real Estate Company

Greetings from Scott & Sam,

You'd better make an offer if you’re going to buy that place she said, or somebody else will get it. My mouth dropped but I knew that my inescapable logic had finally hit pay dirt. I had been talking about retirement for some time now you see -- well not actually retiring but talking about talking about retiring. Sam was just starting to warm up to the idea and I had been pressing for some time so we decided to take a long weekend in the motor home to contemplate the idea.

As we headed out of town we passed a little old house on Franklin Street that was for sale. I had noticed it before, but this time it just seemed to jump out at me. I think it was the sticker across the sign that said “Commercial” so I said to Princess “we should buy that place and start our own real estate office." She sweetly assured me that I had lost my mind and that we were going away to make retirement plans. Now we were headed nowhere in particular and I figured I had a lot of convincing to do so I just pointed the rig south.

The conversation on the road to Salem was mostly consumed with me running scenarios up the flag pole why a new business and retiring had the remotest thing to do with each other. She wasn’t buying the connection and told me to perish the thought. By the time we got to Eugene things had gotten pretty quiet in the passenger seat. There are a lot of benefits I insisted as I craftily tied together our exit plan from real estate to starting a new business from zero.

As the mileposts flew by I continued to assault this non sequitur from as many angles as I could think of and just when I thought this trip was going to end up in San Francisco it seemed like Sam was convinced or just was too tired to continue the discussion. (This is often how life decisions are made in the Mikel family.) We camped in Florence Oregon at Honeyman State Park http://www.oregonstateparks.org/images/pdf/honeyman_full.pdf and by morning she was figuring out where she wanted to put her desk. The rest is-- as they say-- history.

Well, we named the place Scott Mikel & Associates, catchy don’t ya think? www.agentmikel.com

We opened in June with Carrie and Lori our two Buyers Assistants (and Skwish the Mini Cooper of course) and since have added Heather our Office Manager and Tina a wonderful agent we worked with at Prudential. We plan an eventual “build out” of 11 people in this office. It has been a total blast, and Princess has never been happier though a bit leery of long weekends in the motor home.
In the mean time Toni (daughter) decided that she was not to be outdone by dad and opened her own real estate business in Portland. Something about the fruit not falling too far from the tree? (Dad is beaming of course.)

Aside from starting a real new real estate business, and finishing the remodel on the house, things in the Mikel family have been quiet as usual this year.
I did find out one thing about Sam. It takes 186 miles to get from no to yes on the larger life decisions. With the new plan we should retire somewhere around 2019.
Have a Merry Christmas; come by and see us sometime -- the coffee is always on at 1516 Franklin St.

We thank our customers and friends for their overwhelming support as God continues to watch over his stupid children.
Love and Peace,
Scott & Sam