Hello, my name is Dee, and I am an Associate Broker at Cheney Realty, Inc. in Cheney, Washington (home of Eastern Washington University and 15 miles from Spokane). I work with serious buyers in my hometown of Cheney, WA and I help qualified investors buy properties throughout the Spokane area.  My phone number is (509) 235-6191. I am also an ePro, RSPS, and TRC. I am also an Electrical Engineer. A passion of mine for many years has been real estate investing.

If you are looking for foreclosures , there is a list here.  This list is current as of January 27, 2010.

All Cheney stick built home listings can be viewed at www.buycheney.com.

I have been a real estate investor since 1988 and have bought and sold several million dollars of residential rental income units of my own.  I want to encourage others to invest in real estate. I truly believe that it is an excellent way to build up your net worth. Please contact me if you are ready to  buy and put my experience to work for you.  Click on any of the price ranges under the Categories heading on the left to see listings.

Anyone who says stocks appreciate more than real estate is usually ignoring the possibility of earning rental income, and the benefit of leverage using long term relatively inexpensive fixed rate loans that are not available for stocks. Just ask your parents if they made more profit from stocks or from real estate. And consider the following (note that I did this calculation last year):

Present Value of each $100,000 invested 10 Years Ago:

In the Dow Jones Industrials————————————————–$102,357

In the Dow Jones Industrials using Margin—————————–$17,214

In the NASDAQ———————————————————————-$91,501

As a downpayment on Spokane rental property (80% LTV)—$464,889

As a downpayment on Spokane rental property (90% LTV)—$685,505

This includes real estate transaction fees, assumes that you put 20% down (for 80% LTV) or 10% down (for 90% LTV), had an 8% interest rate, a loan amortized over 30 years, had breakeven (zero) cash flow on average over the 10 years, and that you sold the real estate after 10 years.  You can see my calculations here.   Note that I am assuming breakeven on average over 10 years. That means you could have been negative cash flow for the first five years, had a rent increase, then been positive for the last five years. With rent increases over the 10 years, you may well have had positive cash flow instead of break-even cash flow, meaning an even higher rate of return on the rental property.   Of course, past performance is no guarantee of future performance.  You will have to make your own educated guess as to whether prices and rents are likely to increase over the next 10 years.

Many buyers are fearful that now is not a good time to buy, it is better to wait.  These buyers are reacting to national news media that focuses on particularly bad news in California, Nevada and Miami, markets that are more speculative than our market.  The fact is, market timing is extremely difficult.  Appreciation can happen when you least expect it.  By the time you hear about a big value spike in the news, it has already happened and you have missed out.  Over the long run, cost of materials and labor goes up, cost of construction goes up, salaries go up, and real estate values go up.  It is often best to be greedy when the masses are fearful, and be fearful when the masses are greedy.

Warren Buffet has mentioned the possibility of a return to 70s style inflation, due to the massive increase in the money supply.  In inflationary times, hard assets like real estate, oil, and gold tend to rise in value relative to paper money.  Only with real estate can you get a low rate 30 year fixed mortgage to leverage the asset.  The U.S. is one of the only countries in the world where you can fix a rate for 30 years and there is no guarantee that such programs will be around forever.

The links on the right to FHFA (was OFHEO), PMI, and WSU lead to excellent research that may help you reach your own conclusions about the direction of the market.  I also like localmarketmonitor.com for predictions.  I personally believe that slow and steady, coupled with a focus on rental income potential, is a better strategy than trying to time the market.  Over a long time period, like 10 years, the price of materials tend to go up with inflation, which puts upward pressure on real estate values.  Values may not always go up in a straight line.  There may be periods of stagnating values (often accompanied by cash flow from rental income), followed by periods of rapid appreciation (often accompanied by zero or negative cash flow).  And, yes, values can and do sometimes go down as they are doing now in our area.  But by holding long term, one can increase the possibility of capturing at least part of an appreciation cycle.   If the rent is sufficient, and your interest is fixed for 30 years, you can wait out downturns in the market.

A big advantage of real estate over stocks is that it is possible to buy real estate at less than market price during any type of market.  Another advantage is that there is the option to add value through improvements and landscaping. These advantages are simply not available with stocks.  With real estate, you can generate rental income. With stocks, you get a tiny dividend, if you are lucky.

With leverage, a small amount of appreciation in real estate means an incredible rate of return.  I am convinced that real estate is the best way a regular person can rapidly increase net worth using low cost leverage.

If you read an article that suggests that stocks are better than real estate, take a look at the advertisers in the magazine.  Odds are that they are mutual funds, stock brokers, and other Wall Street players.  A financial magazine is not going to run an article that could hurt the sales of its advertisers.  Wall Street has a strong vested interest in keeping money in stocks and in retirement funds.  My goal is to get as many people as possible to see that rental income real estate performs better than stocks over the long run when you use the low cost fixed rate loans available only for housing.  This is before even considering tax advantages such as the depreciation deductions.  I am fighting against a strong and powerful Wall Street marketing machine.  But I am convinced that what I am saying is true.

My belief is that the best way to initially screen rental income properties is to look at the monthly rent it would generate on the open market versus purchase price. That will give you an idea of the sort of rental yield or cap rate that it will provide, which you can then compare with other properties of similar age, condition, and location.  You can read more about this concept at www.duplexGEG.com.

Interest rates are now still close to historically low values and it may be a good time to lock in a low rate for 30 years.  Who knows where interest rates will be in a year or two.   Some of us remember the 14% interest rates during the 70s.  The way the government is printing money left and right, inflation may be just around the corner.

If you are curious about real estate but not quite yet ready to make offers and get your feet wet, I suggest that you buy and read “The Millionaire Real Estate Investor” by Gary Keller.  It is an excellent book that I recommend to everyone who is interested in real estate investing.  Anyone can make money in rental real estate using a long term buy and hold strategy.  Will you be one of them?  You have to be willing to tune out the naysayers and take responsibility for your own future.

If you are looking for foreclosures, please be aware that foreclosures typically need at least some work, often need a lot of work, and very few are move-in ready.  Foreclosures are sold “as-is.” If you want something that is in move-in condition, you should not be looking at foreclosures.

Also be aware that there are also some good bargains that are non-foreclosures placed on the MLS.  Properties that are priced lower than they are worth are snapped up quickly.  You need to be ready and willing to act quickly when you spot a bargain, so have a pre-approval letter ready.  I encourage you to contact me and specify what sort of house and area you are interested in.

If you would like to have new foreclosures and/or fixers emailed to you as them come up, please hire me (sign buyer’s broker agreement) and send me your preapproval letter and requirements–the area, price range, size (number of bedrooms and bathrooms), year built, and type of property of interest (foreclosure, fixer, any), or you can just request all Spokane foreclosure listings.  Foreclosure sellers always require preapproval letters before they will consider offers.  There is no point even looking until after you have obtained preapproval from a bank.

Everything is negotiable, so don’t let a high price prevent you from making a reasonable offer.  I give clients comps so they can make sensible offers.

It is my sincere hope that you will find this information to be useful. If you appreciate the work I’ve done for you, please hire me next time you are ready to buy or sell and please refer me, and this site, to your friends and family.

Please also check out the links under the word “Blogroll.” These are carefully selected external websites that I believe are very useful to real estate investors.

You can contact me by sending a message to malhotraspokane at gmail dot com.

Thanks for reading.

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