Thank you for listening to which some means business and tennis lesson for joining us this Saturday morning we appreciate taken timeout your Saturday scheduled to join us and he whether us. Today we'd like to talk about real estate and more specifically investment real estate. I'm investing in rental properties and flipping bouncer resale which of course. As a very popular trend going on in that in our area around here I believe in but we have a special guests and our first segment today that really is an authority. An expert in this field retirement doctor Stanley long offer. Who's the founding director of the W issue center for real estate and it's a Stephen Al Clark chair real estate and finance in the Barton school of business. And Wichita State doctor Stan thank you for being here today well thank you very much it's my pleasure to join our fight card that doctor absolutely is that what everybody at the school project doctor stand doctor Al whatever works fine all right great. Well we sure appreciate you being here getting up early on Saturday morning and joining us. And give us some details on your expanding role at Wichita State University I know that I she'd do a lot of things over there and I know that your focuses of course on the real estate and you have a big a report that you do every year in which we'd sure like to talk about that but I would give us a snapshot if you would of of all the things that your directing over at Wichita State sure well I'm a professor. In the business school at Wichita State and we have one of the only four year degree programs in real estate in the region the only wanted to -- -- Kansas and so I oversee that program and teach a lot of the real estate courses including real estate investments development. General introduction to real estate real estate finance and so forth but in addition I'm the director of the center for real -- which is an outreach center to try and really bridged the divide between what we do with the university in terms of our teaching -- our research and the professional community and so through the center for real estate we provide research services and analysis for real estate professionals and for government officials and the general public about what's going on in real estate markets around the region one of the real advances we've had here recently was an expanded new website that we unveiled just last year and on that website we now provide a lot of data and two graphs and analysis of real estate markets not just Wichita but every major market in the state and so we'd really encourage people to to look at that website when they're trying to analyze and understand what's going on in real estate markets. If you're listening or following along today waiting courage to do that right now. You can go to that website and check out some of the details it's a real estate dot Wichita dot edu right that's right if you put into a search engine Wichita State real estate our website will be one of the first ones that comes up as well we really try and serve the community at Wichita State's by taking the expertise that we have is researchers and as teachers who are really spending a lot of time developing a deep understanding of our different areas of expertise. A part of our role is to then be able to communicate that and serve the community at large by answering questions in dealing with issues that are related to our particular field so that's just a great resource for entrepreneurs and people that are just interest and real estate that's amazing that we have that right here in which Todd take advantage and it's the only regents school in the state of Kansas where we have that while OK I know recently every year you do an annual report and and I'm unclear I don't actually -- if it's a links for Kansas is that or is it just for which taller we'd do an annual housing forecast for the state of Kansas as a whole and for every metropolitan area in the states are doing one for Kansas City Lawrence Manhattan to peak at and Wichita and the which our report we've been doing for I think eleven years now so it's been a long long time that we've been doing that report and I think it's well received and provides good information that people are able to use both in their personal life and in the professional lives always enjoy when that comes out and looking and it trying to just get a little bit of a snapshot of what's happening. And what you see is going to happen this kind of and advance like stadium in your project a little bit what you think's gonna happen for the rest of the year right that's right it comes out every October and we project through the end of the following yours are forecast that's out right now projects to the end of 2017. All right can you give us some of the highlights in the current report that's out. Sure how weak forecast that existing home sales are going to continue on us on a steady run they've they've been on a nice steady upward track now for about six years and we're expecting that to continue through 2017. We expect increase of another four to 5% in home sales activity what's more exciting is that we're really beginning to see some real strong at home price appreciation and so the homes that are out there for a number of years we had on prices that were just flat they just didn't move anywhere and over the last couple of years we've seen some more solid appreciation and were forecasting over the next two years annual appreciation rates in the range of about 4%. We forecast a little bit higher rates for the end of 2016. And we haven't seen the final figures come in for that yet about for 2017. Now we're forecasting if appreciation of about 3.5 percent. Is that forecast isn't the same number of regardless of the price range in the home or is it different for different price points as I'd like to tell my students that's a really good question because sometimes people look at aggregate numbers on the housing market and may think all homes in Wichita have appreciated by four and a half percent so my house is appreciated by four and a half percent and that's just not the case. No one owns the average Wichita home and so when we project what's the average appreciation in the market it's taking a lot of different appreciation rates that happened from some homes that lose value some homes that gain a lot of value and it averages those numbers out across the entire market but that really brings up a point that I really like to emphasize is that while you can get some broad market indicators from our website if you want specific information about your house and your neighborhood that's when you really need to work with the practicing real estate professionals whether it's a realtor or whether it's ever appraiser. To get specific information about what's going on in your neighborhood and with your particular home in that neighborhood. It's always interesting to me with some viral state buddies that that I talked here and sell advertising to you know they tell me about the different numbers of homes that Celanese different price ranges like homes between 75 and 200 7550. In and homes over 200 or over 300 and and how many are on the market and and how many months suppliers there and just an amazing and interesting to me if I can be broken down. In such a specific way in and I guess it would just follow suit that. Homes and those price ranges in the similar conditions but have different price appraisals and increases. Yeah it's it's really interesting to see what's been happening in the market broadly. We've had a very very tight market where the inventory of homes available for sale has not kept pace with these sales that have occurred and so as a result we see this strong price appreciation it's begin to take hold again nevertheless. That's very different depending on what segment of the market you're in if you look at homes that are in this 100 to say 200000 dollar price range which is really the bread and butter of the market that's where. Them the most desirable homes in the nice neighborhoods that are affordable and a lot of people are interested in that segment of the market is incredibly tight right now there's just not a lot of inventory and so when those homes are being listed for sale they are often selling very quickly a matter of days with multiple offers. On the other hand sometimes homes that are more expensive in the upper price ranges are homes that are in some of the lower price ranges those may have some different dynamics that are going on and again that's why it's really important talked to a professional when you're thinking about either buying a homer putting your home on the market to really know given what I'm looking for given what I have how do we best position and and work. Through the market with that given the current market conditions. It is interesting to me a couple of months ago I knew about a house that and offered been put it in and they put the offering for 101000 more than asking price still didn't get the house nobody else bit more right one of the things that's very much the case for buyers right now is that. If you're interested in buying you have to come in prepared and that means you need to come in with the ability to demonstrate. That you will be able to get the financing you need to Mitchell be able to close the deal and buyers that are willing to accept fewer conditions of the sale buyers to come in with a pre qualification letter where they've said yes I've been approved for my lender so I know I can get the loan those are buyers they're gonna have a better chance of getting their homes they want when they make the offer. The other thing that I hear from realtors is you just have to be prepared to move quickly buyers need to come in and make an offer immediately if they see on the they like if they wait it's very likely going to be gone. My begun we're talking with doctor stand long offer he is with the going to be issues center for real estate. He's our special guest in the studio today. Tell us all about the the severe really good segment for you know lean and and it kept some of the details on. You can follow along online as well at real estate dot which Todd dot edu and and lots of information there that will be helpful to you fury and looking at changing era her home status doctor Stan I know a lot of people are interested in real state to flip homes and get rental properties has kind of a retirement strategy what is that true you think. Well I think it's people are certainly interested in real estate you know you always see the late night infomercials things about how you can get rich in and no work at all and that I think sometimes that's a wow misleading. Owning rental real estate is a lot of work that it can be a great way to build wealth and so if you're willing to do the work in your willing to put the time into it then it it can be a fantastic cast supplemental income for a lot of people. So somebody is kind of has an entrepreneurial spirit and they'd like to do a project on her own and try to act and have a good outcome like that financially where they can. Make a few dollars and be a part of something and make them put their fingerprints on would you suggest real estate as a viable option. Well again I I love real estate and I think it's a great way to earn income and to build wealth overtime. But you have to be prepared for all the work involved and if you're gonna be a small property owner first of all you have to do a lot of research to make sure that you're really buying the right property. A one of the true isms of real estate is that you make all of your money that day you buy the property and by that we mean if you overpay for the property if you pay too much on the front end no matter how nice the property is it will always be a lousy investment on the other hand if you pay the right price for it even a typical property can be great investment so do your research up front and know what's the right price to pay and then be willing to walk away if you can't get the property for depression need. There's really lots of variables aren't there like the neighborhood the purchase price Immelt worked that it needs and then what kind of ran sic can't command and what kind of vacancy rate you can expect on that and so it takes a lot of research up front to really know whether or not that property is going to be good investment and then on this back end of it you have to be prepared to do the work because you're either gonna hire somebody is a property manager and you're going to hire people to do the maintenance in the work on the property or you're gonna do it yourself and either way you're eating a spend money here you're gonna spend a lot of time and that's can eat into. The returns that you get on that investment you have to be prepared for that. Are there any guidelines that you feel comfortable wins. For example like to somebody's gonna buy a home to Flint archery and and they look at the neighborhood and assess some of comparable values that are out there worth homes that have sold recently. Deserved a purse range of percentage that they should by the homeland are tried inviting him like 35%. Of the price it might bring later are 50%. Yet there's not really hits a single rule of thumb for what this is the price you have to get for property in order to make it a good investment you really have to look at what your long term strategy with the investment are you going to hold that are you planning on selling it in the future what kind of additional money we have to put into it and then once again what sort of rents are you going to be able to get out of it if you're owning it long term so I take this look more complex than just trying to have a quick simple rule of thumb. Are our talk on doctor Stan long offer with they don't issue center for real estate he's given us and get advice on flipping properties are buying properties to Iran if you'd like to go to their web site and follow along he can taken out of real estate bout which stopped dot edu and then they'll have some great information therefore if let's shift gears a little bit. And just talk about that may be as a retirement strategy. And and that I hope this is not unfair question if it is just this will move on to the next and that. Who would have been better for somebody to you try and make say double payments on their current home and pay it off and then have their retirement with without any expenses or would be better to try to take and save up 30% each year to you and pick up around property and get back gone I mean if you're comparing the two strategies is there one you think would have an edge over the other. Well loud that's a really good question as well because Ian you're you're what you're really trading office are you building your overall asset base and building the number of properties that you own. Generally when the Fed makes really strong fast moves with the interest rates it's when they are seeing an economy that's really going gangbusters and looking like it's overheating that really hasn't been on the horizon on the other hand. I think it's been really really good to see the Fed begin to move interest rates we've been an end than usual in an extraordinary situation with the low low interest rates. That quite frankly isn't healthy for the overall economy and were better off if we're in a situation where were back to more normal interest rates. A right there you have a doctor stand longer offer with the real estate school over at the Barton school of business at Wichita State University we're so glad to have him in the studio today doctor Sam thank you for being with us thank you for having me.