Melvin Feller owns and is the founder/CEO of Melvin Feller Business group. He operates in Dallas Texas. A former sailor and proud supporter of our vets, Melvin now concentrates on business and his love of seeing people become successful in all areas of life. He is an avid Christian and knows all things are possible in Christ! He has been a domestic violence survivor in his marriage and divorce to Tina and more importantly a cancer survivor.
Melvin Feller Discusses Who Makes Money in Real Estate
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Melvin Feller Discusses Who Makes Money in Real Estate
Melvin
Feller Business Group in Dallas Texas and Lawton Oklahoma. Our mission
is to call and equip a generation of Christian entrepreneurs to do
business as ministry. We provide workshops and resources that help
companies discover how to do business God’s way and provide a positive
outreach as the director. When the heart of a business is service rather
than self it can be transformed into a fruitful business ministry
earning a profit and being of service to the community and their
customers. Melvin Feller also owns Melvin Feller Ministries. Melvin Feller is currently pursuing another graduate degree in business organizations. Who Makes Money in Real Estate by Melvin Feller
Lets explore the fascinating question: Who does make money in real estate, and how do they do it?
The
specific type of property we’ll focus on in this article concerns
residential real estate. It won’t come as earthshaking news to you when
most people say that they bought a house in order to live in it.
Basically, they chose it because they liked it.
Not
all of them do, however. And therein lies a key distinction. Many
bought the house not because they were fond of it, but because they
hoped you would be. It was purchased for resale. We’ll call the first
group “nesters,” the second “investors.”
What
makes residential real estate different from, say, common stocks is
this: There’s no such thing as a nester in stocks. People don’t buy a
stock certificate for personal use. It’s too small to serve as a blanket
and doesn’t taste very good. It’s also not much fun to look at for
long. That forces them to think about its resale value even before they
buy it.
Some
people try to apply objective criteria quite consciously, whereas
others operate more intuitively. They’re convinced it will appreciate in
value, so they make the leap. As often as not they fall on their faces
but at least they knew what they were doing — or thought they did.
But
in buying a house to live in, personal and investment
aspects — subjective and objective criteria — are being mixed. Under the
circumstances, nesters might have been expected to do less well than
average. As one complained: “I think I let my heart instead of my head
guide me in picking this place.” Who Makes Money in Real Estate by Melvin Feller
People
who are buying houses they intend as their principal place of residence
tend to pick properties that are distributed somewhat randomly. Price,
the nature of the neighborhood, practical considerations, such as
commuting distance to work and the quality of local schools, are
deciding factors.
On
the other hand, the pattern of purchases made by those who label
themselves as deliberate investors, and who are buying the house for
resale, is anything but scattered. In fact, the houses they choose tend
to be clustered in zones that had been classified as “hot investment
areas.” These are towns and streets that have allegedly been targeted
for such things as urban renewal, a new shopping center, an industrial
park or are in the path of a major new highway.
A
reason nesters typically reap a greater profit is the length of time
they hold on to the house. The median holding period is almost six
years, versus a little under three years for investors. Commission costs
and taxes, even at capital gains rates, tell only part of the story of
reduced profits. A far more significant factor is that investors
repeatedly wound up selling too soon.
There
are two conclusions to be drawn from the data. The first is that,
thanks to persistently high rates of inflation, investors have looked
everywhere to find something of value that will keep pace with the
progressive erosion in the purchasing power of their money. The result
is that the number of home buyers who now give as their number one
reason for purchasing a home, “it’s a good investment,” has nearly
tripled in the past two decades, from 26% to 76%.
The
second conclusion is that personal judgment is worth more in real
estate than anyone has previously imagined. Let me qualify this a bit:
You can’t just say, “I love the place, I’ll take it.” There are some
hardheaded considerations and technical details that have to be
carefully attended to. Yet the bottom line remains the same: If you buy a
house because you like it, there will be other people who subsequently
will like it too. If you buy it simply because you think it’s a great
investment, you’ll probably be paying a premium for it. Who Makes Money in Real Estate by Melvin Feller
So
make all the computations you want on your calculator. But don’t for a
moment discount your fondness for a house when it comes to buying. It’s
certainly not true where stocks and bonds are concerned, but buying a
house you like strictly for personal reasons increases significantly the
chances that you’ll do well when you eventually have to sell it. Melvin
Feller Business Consultant, Business Owner, Melvin Feller ministries
and Graduate Student Candidate in Business OrganizationMelvin Feller Business Consultants Ministries Group in Texas and Oklahoma.
Melvin Feller founded Melvin Feller Business Consultants Group and
Melvin Feller Ministries in the 1970s to help individuals and
organizations achieve their specific Victory. Victory as defined by the
individual or organization are achieving strategic objectives, exceeding
goals, getting results or desired outcomes and a positive outreach with
grace and as a ministries. He has extensive experience assisting
businesses achieve top and bottom line results. He has broad practical
experience creating WINNERS in many organizations and industries. He has
hands-on experience in executive leadership, operations, logistics,
sales, program management, organizational development, training, and
customer service. He has coached teams to achieve results in strategic
planning, business development, organizational design, sales, and
customer response and business process improvement. He has prepared and
presented many workshops nationally and internationally.
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