Keith and Kinsey's Real Estate Update


Our Blog Has Moved
August 13, 2013, 1:08 pm
Filed under: Uncategorized

Hello all,

I just wanted to let our followers know that with the development of our new website our blog has become part of the website. Please follow us at our new location: http://www.keithandkinsey.com/category/blog/



New Brokerage – Great Rock Realty
March 23, 2013, 6:09 pm
Filed under: Business, Real Estate | Tags: , , ,

Great Rock Logo TallWe’ve been slacking on blog posting lately. That is because we’ve been swamped! I think the last 6 weeks have been our busiest ever, and in addition to that we started our own real estate brokerage. I (Keith) made the transition to Great Rock Realty 5 or 6 weeks ago in to get things started. Kinsey just transferred her license over on Friday.

Great Rock Realty is now officially open and ready for business! In fact, we’ve already got two properties under contract as Great Rock Realty. Our website isn’t quite done yet, but it should be ready in a couple more weeks.

Our clients probably won’t notice much of a change with this move since we’ve always been fairly independent, even while working other brokers. Our goal with the new business is to provide the same great service, help more buyers and sellers, donate more money to charity, and eventually bring on other quality agents to do the same.

You will continue to see our personal branding as Keith and Kinsey Real Estate. This has become our recognizable personal brand. Great Rock Realty will just replace the roll that Keller Williams had played for us in the past. So, don’t be surprised to see both logos on signs around town.

We will continue our charity program with 10% of our commissions going to the charity of our clients choice. As we add agents and grow our new business, we will also donate 10% of Great Rock Realty profits to charity.

It’s been a lot of work to get things set up, and we are excited and looking forward to this new challenge and adventure. Thanks to all of our clients, family, and friends who have been very supportive in this move.

On a side note… 6 weeks until the baby is expected! :) We’ve got lots to get done!



Are We Transitioning to a Seller Market?
March 8, 2013, 11:15 am
Filed under: Real Estate, Uncategorized | Tags: , , ,

February really started to get active in the Madison area housing markets. It’s a little premature to say, but there are 6 things that lead me to believe the market is shifting.

  • Real estate agents, home inspectors, and mortgage lenders all seem to be swamped.
  • 4 out of the last 5 deals we’ve worked on have been multiple offer situations.
  • Our 2 most recent listings had accepted offers within a week of going on the market.
  • Sellers are becoming a little more firm with negotiations because of the amount of showing activity they’ve been getting.
  • It’s getting hard to find good inventory in some areas.
  • Many properties our buyers request showings on have accepted offers already.

What do you think? Is it becoming a seller’s market? Or is this just spring activity coming early or fear that interest rates will rise?



Real Estate Tax Deductions
February 17, 2013, 8:15 pm
Filed under: Income Property, Real Estate

It’s that time of year again… Tax time. I know, I cringe when I think about it too. Real estate is one of the most tax favored assets in the United States. If you’re a home owner or rental property owner, don’t forget to take advantage of all the tax deductions available to you. The following are real estate related items that are usually deductible.

Home Owner Tax Deductions

  • Mortgage Interest: Interest paid on your mortgage is deductible, if the balance is under $1million ($500,000 if married filing separately).
  • Points or Loan Origination Fees: If you bought a home in 2011 check your closing statement for points or origination fees, these may be deductible.
  • Property Taxes: Real estate taxes excluding itemized charges such as trash collection or improvement assessments are deductible.
  • Mortgage Insurance (PMI): If you pay mortgage insurance premiums and your adjusted gross income is less than $109,000 ($54,500 if married filing separately) these premiums are deductible.
  • Capital Gains Exclusion: If you sold a property that was your primary residence for 2 out of the last 5 years, your profits are excluded from capital gains taxes (up to $500,000 married filing joint).

Rental Property Deductions

In addition to the items above, income properties offer even more deductions.

  • Rental Expenses: There’s a whole slew of things listed on IRS Schedule E that are tax deductable for rental properties. These items are pretty self explanatory and include; advertising, cleaning and maintenance, insurance, legal and other professional fees, management fees, supplies, and utilities.
  • Depreciation: Our tax system allows you to claim depreciation on improved portions of your income properties (the building, not the land). This is generally done on a 27.5 year schedule. Note; you do have to reclaim that depreciation when you sell, unless you do a 1031 exchange.
  • Auto and Travel: Most small rental property owners use their personal vehicles for business purposes and can claim the standard mileage rate as a deduction for their rental related travels.
  • Home Office Expense: If your rental business office is in  your home, you may qualify for the home office deduction. This would allow you to deduct a portion of the expenses related to your home (insurance, repairs, utilities).

I hope this information helps you recognize a few ways you could save on your taxes. However, you should always check with your tax adviser before claiming any of these items. I am not a tax professional, and I am not intending to give tax advice.



Purging Properties – Ditch the Non Performers
January 17, 2013, 11:45 am
Filed under: Income Property | Tags: , , , ,

Real Estate Investors are generally optimistic, hardworking, entrepreneurial people. They have the belief that they can do anything, can overcome any challenge, and never give up. These are all great traits to have. Although, there’s one problem with this mindset… Sometimes you don’t realize when a deal has gone bad.

I recommend reviewing the profit and loss of your rental properties monthly or at least once per quarter. If you are in the flip business I hope you’re paying weekly (maybe even daily) attention to your project budget. Last year, after looking at our big picture, we sold our two worst performing rentals. It was a very freeing feeling to ditch the two worst performing properties as they were creating the most stress. It also helped us turn our focus back in the right direction.

The first rental was my former personal residence. It was never intended to be a rental. It just happened to turn into a rental after I met my wife. This property was slightly better than breaking even (the rent covered the mortgage, insurance, and taxes). Although, there wasn’t much left over after paying PITI (principle, interest, taxes, and insurance). This isn’t how I like properties to perform, though. This property was fairly high maintenance. In the long run after factoring in maintenance and rental turn over vacancy, it would have been negative cash flow. So, we sold it. You can read more about this property in our Better Than Renting post.

The second property was our Indianapolis rental house. By the numbers (rent vs payment) it should have been the best performing property we had. However, this one was a nightmare. You can read more about this one in our posts Lesson Learned – No More Long Distance Landlording and Why I Fired My Property Manager. Too make a long story short though… My property manager was horrible, my tenants were horrible. I couldn’t keep a good handle on the place from a distance, it was a daily stress, and I held on too long trying to make it work. So, that one went bye bye too.

My point is if you have properties that aren’t working out the way you would expect, analyze the situation, and seriously think about if they are worth keeping. Look at it from a sunk cost analysis perspective. Ask yourself, if I didn’t already own this property, would I buy it again for what it’s currently worth. If the answer is no, sell it. Consider that getting rid of the non-performers can free up resources, time, energy, and focus for other things that are more important. Sometimes you have to ditch that “I can do it” mentality, swallow your pride, and realize it didn’t work out the way you thought it would. You’ll feel the relief by doing so! You will also regain your focus.



Choosing a Lender
January 9, 2013, 11:37 am
Filed under: Real Estate | Tags: , , , , , ,

Your lender will be one of the most important people involved in your real estate transaction choosing them wisely is important. Just like agents, not all people within one organization operate the same. One loan officer at your bank may be horrible to work with and another may be great.

I always suggest people start looking for a lender one of two ways:

  • Ask you real estate agent who they recommend? Realtors have worked with many different lenders, and they know who has done a good job in the past and who hasn’t.
  • Ask your friends who they recommend? Your friends, family, or coworkers who have been through the buying process may have worked with somebody they really liked (or didn’t like).

So, how do you know if this lender will be good to work with? Here’s a few things to look for and pay attention to when talking to a lender:

  • Responsiveness is a key necessity in a lender. I’ve worked with lenders who wouldn’t respond to their clients questions for 4 or 5 days. This makes the buyer feel extremely insecure and freaked out through the home buying process. Find someone who responds at least within 24 hours when you call or email them.
  • Knowledge is another must have trait of a good lender. There’s a million different loan programs out there, but after talking through your situation, your lender should be able to give you guidance on what loan program best meets your needs.
  • Honesty is extremely important too. Of course it’s tough to tell if somebody is being honest with you in the first conversation you have with them. Although, your lender should be able to give you general guidelines about closing costs, fees, and rates. If you ask them questions about these things and you start to get the used car salesman vibe, run away. No offense to car salesmen, but you know what I mean.
  • Deadlines within your real estate contract must be met by your lender. So, you want somebody that is prompt and organized to meet these deadlines. Usually if they fit all of the characteristics above, they’ll come through with your deadlines. Of course, there can be snags in underwriting that aren’t your lenders fault, but a good lender will advise of those potential snags ahead of time.
  • Local lenders tend to be better to work with. It usually feels like somebody cares more about what you need, when you can actually sit down face to face. People get loans all the time without ever meeting their lender, but it’s good to know you have the option. It’s much nicer not dealing with a national call center.

Lastly, there’s the question of should you go with a broker or a bank lender. There is definitely a place for both.

  • Bank (and credit union) lenders are usually great to work with for somebody who is in a strong financial position to buy, and they often have the best fees and rates. Shop around for the best rates and fees.
  • Mortgage Brokers on the other hand are great at figuring out how to get the deal done if somebody is border line on a loan. They have a full arsenal of loan options available to them, and can sometimes make loans work that bank lenders can’t. Their fees and rates can sometimes be a bit higher, but if you’re not willing to shop around, they do the shopping for you potentially saving time and money.

In summary, there’s a lot to think about when choosing a lender, but take your time, ask for referrals and make a good choice.  If you are in the Madison area, there are some great lenders that we recommend on our web page.



Setting Your Goals For 2013
December 30, 2012, 9:34 pm
Filed under: Business, Life | Tags: , , , , ,

Well, here we are at the end of another year! It’s a great time to look forward to the coming year and think about what you would like to accomplish in 2013. It’s also a great time to look back and see how you did on your 2012 goals.

If you aren’t a goal setter, I encourage you to try it. Goals are a great way to improve your life. The difficulty is most people don’t set goals in a way that force them to stick to them. Most people just have some rough ideas in their head of things they want to accomplish, and most of the time they never follow through. There are 5 key things that will help you follow through with your goals:

  1. Write it down. Without your goals in writing, they will simply slip away as ideas and dreams.
  2. Have someone hold you accountable. If you have a friend or family member that knows your goals ask them to check in on you occasionally to see how you are doing.
  3. Make it measurable. Without a way to measure your goal you don’t know when you achieved it. This is the difference between saying I want to lose weight, and I want to lose 10 lbs. The 10 lbs gives you something to go by.
  4. Give it a timeline. Without a date to achieve something by, you’re not pushed to make it happen. To add to item 3, you might say, I’m going to lose 10 lbs by the end of March.
  5. It must be realistic. Make goals that push you a bit, but make them realistic. For example if you are starting up a new side business, maybe making a $30,000 profit in your first year is achievable, but making a million is not. Setting an impossible goal will just end in discouragement.

If you read our year end summary you already know that we had many great accomplishments in 2012 and we met and exceeded most of our 2012 goals. There are only two goals that I failed at. One was running a half marathon, though I got close with an 11 mile run. The other was the number of volunteer or charity events we wanted to participate in. I could make lots of excuses like a foot pain that’s been driving me nuts, or just the simple lack of time due to moving, building a house, and a busy business.  …but in reality, it’s more just lack of planning and focus in those two areas, and that I can only blame on myself.

I’ll be honest, I’m having a bit of a hard time coming up with goals for 2013.  The main reason for this is because we have a baby on the way. I know this will drastically change our lives and time commitments. My primary goal is to be a great Dad and husband, but that’s a little hard to measure or put a timeline on (if anyone has ideas on that let me know).  So, I’m setting some goals in other areas of my life that I think are realistic and achievable, yet challenging with a new baby to come. Here’s a few:

  • Get my real estate broker’s license - This is a step above a licensed agent.  Every agent must work under a broker’s supervision. Ultimately this could lead to starting our own brokerage, we’ll see.
  • Match our sales volume of 2012 - We had a phenomenal 2012 with sales up 149% over 2011 (even though our goal was 25%).  So, I’ll be happy just to match last year!
  • Stay (get) fit - I’ll admit I was pretty up and down with my workouts in 2012. There were some weeks where I just never made it to the gym and others that I kicked some butt. So, I’m going to allow myself some up and down but shoot for an overall average. So, we’ll say run 200 miles for the year, and workout 100 times a year. That’s an average of 2 workouts a week and 3.8 miles per week.
  • Charity events –Whether it’s Salvation Army bell ringing, a day working on a Habitat for Humanity house, or a charity run, our goal is to participate in 8 events that benefit charities. This one we failed at last year (I think we did 5 or 6), but we’ll try to make it happen this year.

Post in the comments a few of your goals, and we’ll try to help hold you accountable! Have a great new year! Bring on 2013!




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