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Nov 102010
I read this article and immediately thought I should share it with my students:
from http://www.housingwire.com
Predictions for the fourth quarter housing market continue to dim as Zillow’s third quarter market report released Wednesday suggests further house price depreciation through the end of the year.September home prices depreciated 0.4% from August and 4.3% from one year a go to a national average of $179,900, according to the report. This is the 17th consecutive quarter of home price declines.
Zillow reported that nearly two-thirds (64.2%) of homes in the U.S. lost value between the third quarter of 2009 and the third quarter of 2010, and 27.3% of home sold in September were sold for a loss.
On Tuesday Foresight Analytics said residential, commercial, and construction loan delinquencies are excepted to rise.
Delaware witnessed the most home price depreciation since 2009, down 18.5% to $174,700 in September 2010. California’s home prices appreciated since 2009, up 1.9% to $337,200.
Approximately one in every 1,000 mortgaged homes in the U.S. was liquidated in September, according to Zillow, marking the highest liquidation rate the firm has recorded since it started tracking data in 1996.
The firm sees the liquidation rate remaining elevated because of an increase in negative equity rates. According to the report, the negative equity rate during the third quarter was 23.2%, up from 22.5% in the second quarter.
Foreclosure resales reached a near-peak level in September accounting for 20.1% of all sales made during the month. The peak percentage of sales attributable to foreclosure resales was in March 2009 at 20.5%.
Zillow said the firm doesn’t expect home prices to hit rock bottom until the first half of 2011, but concluded that “the length and severity of the current turndown is fast approaching the length and depth of the Depression-era.”
Zillow data is based on real-time mortgage quotes from lenders registered with the company. The third quarter report is available on their website and includes interactive charts and graphs broken down by state and by metropolitan statistical area.
Do you think that YOUR market is about to bottom out? Are you going to miss out of this phase of the cycle and struggle to catch up when everyone else is already investing and is enjoying the appreciation of their properties when the market enters the buyers phase 1 & 2?
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Most people are of the view that starting new business during recession is a bad idea. However, it’s not always true. There is always a hope of successful new business even during the time of recession.
Starting a business is possible and a very good idea, even during recession. However, one needs to be careful. If you have a day job, stick to it while starting a new business. Don’t leave the job for risks of failure are always there. Once your new business starts yielding positive results, you can divert your attention towards the business and slowly and gradually divert your complete emphasis. Even if no results are generated by new business, there can be many reasons for that. It may be a problem with your business idea or product. Or it could be due to the reason that economy is slow and people are holding their earnings. You should always know the right reasons, especially during recession.
Challenges are always there. Even during normal economic conditions, it is difficult to develop a business. Worrying about recession and taking extra stress is nothing but a waste of your efforts that you should give to your business. In fact, there are some businesses that do even better in recession as compared to normal conditions. Also, there are businesses on which recession has no effect for they deal in products and services that people can’t live without or that people don’t leave no matter what. Collection agency, discount and coupon marketing are some businesses that do great during recession.
Even if you’re not starting new business during recession, you can always prepare yourself for a better time. Recession is the best time for that. Following are three activities you can indulge in, in order to deal with recession.
Network with the Right People:
You should start meeting and networking with people who may be useful at the time when you’ll start your business. Finding potential employees during recession is very easy because a lot of people get jobless due to downsizing. If you get a chance, meet with entrepreneurs in order to learn how they manage their business during recession.
Purchase Useful Products:
During recession, a lot of products are available at low prices. So purchase the products that you may need in future. This will not only save a lot of cost, but will also make your idea of new business seem truer than ever. In this manner, you will be ready for the business right after the situations get better.
Learn More:
Since economic activities are slow during recession, you get a lot of free time. The challenge is to use it in an optimum manner. During recession, you should explore your business idea. You should get as much information as you can. Study your industry and the competition. You should keep a sharp eye on your competitors. They are likely to lose business during recession. You should be quick to grab that business.
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Nov 082010
Here is an interesting article from cnn.com about a great game to play with your family and teach your kids about entrepreneurship, Monopoly!
East Longmeadow, Massachusetts (CNN) — Even as remnants of a recession leave the nation’s real-estate market in a lurch, machines crank out millions of tiny hotels and houses at a factory in western Massachusetts.
Motors whir and plastic packs of brightly colored bills slide down conveyor belts.
This is where Monopoly is made. The popular board game, which began during the Great Depression, turns 75 this year.
Alma Ocampo has helped make the game for 25 of those years at the Hasbro games factory in East Longmeadow, Massachusetts.
“I work on the Monopoly line…It’s being part of history,” she says, as she flips through a pack of the game’s famous fake money.
Show us your Mr. Moneybags costumes
More than 6 billion game pieces in the shape of green houses and 2.25 billion red hotels have been made since 1935, Hasbro says. Saturday marks 75 years since the patent was acquired for the board game.
And as people passed go, collected $200 and got out of jail for free for three quarters of a century, more than 275 million games were sold worldwide, according to the company.
“Life is just too hectic now. It moves at a pace that we’re not used to,” says Gary Brennan, Hasbro’s vice president of manufacturing. “This slows it down a little bit, the perfect family game.”
But even Monopoly has changed with the times. The original tokens of a lantern, purse and rocking horse were removed from the game in the early 1950s and replaced by the dog, horse and rider and wheelbarrow.
In the 1970s, a Braille edition of the game was created for the visually impaired. And in 1978, the Neiman Marcus Christmas catalog offered a chocolate version of the game for $600.
In the 1980s, before the world Monopoly tournament in London, England, artist and jeweler Sidney Mobell decided to make a new version of the game — using solid gold, diamonds, emeralds, rubies and sapphires.
“It took a lot of work. It took me a year from start to finish to go ahead and do this set,” said Mobell, 84, who was 9 years old when he played the game for the first time.
Show us your Monopoly games
“I played with family. I played with my mother, my father, my sister, my brother, my cousins. We all played Monopoly, and everyone was trying to win…. the most important thing, let’s face it, in our lives, was to win Monopoly.”
Now his version of the game, valued at $2 million, is on display at the Museum of American Finance in New York.
“This gives an opportunity to showcase a beautiful item like this, a game that’s symbolic to America, popularized during the Great Depression, during the 1930s, during those tough economic times. Again, we’re facing tough economic times in this country,” museum president David Cowen noted when the exhibit opened in October.
Twenty-first century players may be pinching their pennies, but they’re finding new ways to hone their Monopoly skills.
A partnership between Hasbro and Google for an online version of the game last year had 1.4 million registered players, and the company released an Apple iPhone application in February.
When was the last time you played a game of monopoly? How would you compare it to your investment choices today? Celebrating 75 years now, Monopoly was creating during the great depression, a time where the most millionaires were made in America. Will you be able to say that you are one of the “new rich” after this recession?
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Oct 282010
Real Estate investing is a cutthroat market which can pay handsome rewards provided you have accurate information, quality data and are able to work diligently enough to make sure you have left no bases uncovered.
Surprises in real estate cost money and a seasoned investor puts in due diligence in his work to make sure that the element of surprise is taken out of his investment decisions.
There are two barriers most new real estate investors must overcome. The first is time! Time and timing always work against you because there is never enough in order to do what you need to do which means that in order to do it and do it right you need to be creative with how you spend your time and really strict with your time management. The second barrier is not having a marketing program that will fit into your busy lifestyle… an effective marketing program that uncovers motivated sellers, but takes just minutes a week to execute.
As a seasoned investor who has been involved in the market long enough to see it through several different cycles of boom and bust I am often asked in the courses I run what is it that those who attend them get as a result.
Potential real estate investors who take our courses benefit from:
* A personalized service
* In-depth market expertise
* Real knowledge of your target market
* Detailed analysis of the real estate scene
Using my own experience and expertise and having learned from mistakes I made the hard way I make sure that the material you go through and the information I give you is the kind of thing I would have loved to have had myself when I was starting out in my career, before I made my first million dollars. I know for a fact that had I had that kind of information I would have made my money much faster and would have been able to spend more time enjoying the things I love doing.
My courses cover everything from how to leverage multi-family dwellings in order to make your dream of financial independence come true to how to put together a real estate investment Syndicate in order to close deals with other people’s money and still make money of your own.
In my courses there are no surprises. No mix ups. No losses. You learn the best way to risk-assess and risk-manage your real estate investment strategy and then you learn how as a real estate investor you can minimize the risks involved and maximize the rewards.
With minimum to zero risk there is no loss. Just gain.
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Getting help with investing is easier than you might think. In fact, if you already work with a realtor or mortgage broker, you may already know how to work with the other specialists who can help with your real estate investing.
But real estate investing is much more than finding and buying the property. There’s more to do once the deal is completed – and you may own the property for months, and more often for years. Certainly you don’t want another job, or obligation in your life. That’s why real estate investing is so appealing to begin with! So to get that free time and passive income you dreamed of in the beginning of your real estate investing career, get help with investing: outsource your work.
Here are 3 tips for you to use to successfully outsource those daily, weekly and monthly tasks associated with real estate investing that are better done by someone else.
(In fact, if you do these 3 things, you’ll have more time to buy property, more time to spend with your family or on vacation, and more money!)
The first tip is: expand your geographic investing area by outsourcing. I’ll share the details of this in tip #2, but first I want you to consider this: there are only 24 hours in a day. We all have plenty to do to manage our own lives.
If you have a family, wouldn’t it be great if your real estate investing allowed you to spend more time together? If you have a job that you can’t stand, wouldn’t it be great if you could leave it, never to work for anyone else again? By outsourcing work of all kinds, you can gain precious time to do what you want to do – whether it’s work or play.
You’re the CEO of your company. CEOs don’t do the work – they hire it all done. Your job is to oversee it all, to manage your real estate investing portfolio (not to fill out landlord forms, chase tenants, mow lawns and collect rents!)
Besides, your most important job will be taking checks to the bank! (Never outsource this task!)
The second tip is: hire specialists for all aspects and all phases of the work. Here’s a list of specialists you can outsource to. Are you an active investor, or doing the research to become one? Don’t be surprised if this list saves you over 20 hours a week (or more) in activities you’re currently doing yourself! How much bigger could your portfolio be if you hired:
o Real estate broker with ARM and/or CPM designations
o Birddog
o Municipal employees
The real estate broker (or agent) with ARM (Accredited Residential Manager) and/or CPM (Certified Property Manager) designations is essential to your real estate investing success. Not only does this real estate professional find you properties to invest in, but he or she is also your property manager.
An ARM or CPM Realtor is educated. It takes many hours of continuing education to achieve these designations – five classes and tests for each designation! They know their stuff!
While they’re busy managing your tenants (so you don’t have to) you can spend your time as you like. And they’re experienced at this work. Let them collect rents, hire maintenance work done and do the day to day management of your properties.
Find an ARM or CPM Realtor at http://www.irem.org At that site, you’ll find members from different cities all over the country, allowing you to invest in properties in many different markets! And that kind of diversification is just smart.
If you’re just starting, and working only one market area, hire what’s known as a birddog. That’s a person who scopes out buildings for you. You pay a finders fee, and your birddog does all the leg work. Imagine a person (or a group of people!) bringing you potential investments!
Birddogs work best with single family properties, but if structured properly, you can do very, very well.
The last group is municipal employees. You won’t actually hire these folks, but they’ll be partners in your quest for wealth. Here’s how: rather than going to the courthouses of all the towns and counties you’re interested in, get help with investing with this group of under-appreciated people! Always remember that a little goodwill goes a long way. Treat these folks with respect. Get lists of out of town property owners and start a letter-writing campaign to build your real estate investing portfolio.
Now, here’s where it gets really good. The third tip is: use real estate investor courses to learn fast and learn right. By learning from the experiences of others, you can learn in a fraction of the time it took to develop the knowledge your investing teacher took to get there. That’s like outsourcing your learning!
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This article will focus upon the pros and cons of looking at listed versus unlisted deals. The title to this article is very misleading in some ways because you can find great deals that are listed in you can find great deals that are not listed. It is not whether a deal is listed or unlisted that makes it a good deal but rather your knowledge of the market and recognition whether a deal meets the criteria you have set forth to define a good versus a bad opportunity.
Listed deals often will have a great deal more competition for them as there are many buyers who are aware of a property being sold. With the current economic climate, this can result in overpaying for a property based upon the competition for the properties. That is the major con when looking at listed deals. The benefit of looking at listed deals is that all of the necessary information should be available so that you have the quality information you need to make a good decision. Expectations can be on the same level of both for the seller and the buyer. The seller often will be aware of the time it will take for the buyer to do his or her due diligence due to the broker setting expectations upfront.
Unlisted deals often will have less competition for the deal. This can allow you to potentially buy at a lower price than if the property were conventionally marketed. Struggles can come out when looking at an unlisted deal though because often times there can be a lack of good quality information. If there is a family partnership and the general partner dies without telling any of the limited partners where in the information is, how will you be able to find this information?
The smaller partnerships often will also have different expectations related to time. You can take a great deal of time to do due diligence and many individuals do not realize that this day. If someone has owned a 100 unit building for 60 years, he or she may not realize how much time it takes these days to look at and look over what the deal is good or not. The brokers who bring you unlisted deals often times can be very hard to find. These brokers may work out of their homes or keep a low profile so that they are hard to find. These brokers may not provide as much professional guidance as would happen normally with a listed deal. This can also allow you to overpay for a property.
This article should have given you a sense of the pros and cons of both the listed and unlisted properties. The market for commercial real estate is very hot right now so is very easy to overpay for both listed and unlisted properties. You must be aware of your niche and criteria so that you can recognize whether a deal is good or bad. A deal is either good or bad no matter if it is listed or not listed.
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We all know that a person’s body language sends subliminal signals. But did you realize that an apartment building also has it’s own subtle body language? It does. And you want to control these signals. Otherwise your building could be sending the wrong message.
Today I’m going to recommend some fast, easy and cheap maintenance fixes that should never go ignored because if you let these minor issues linger it suggests to your tenants that you’re not committed to your property. And if you aren’t respectful of the building, why should your tenants be?
Lets start with first impressions. One the first areas tenants regularly connect with is the row of mailboxes. If there are rusty hinges, scratches, dented or missing doors, broken locks, and graffiti that belongs in a back alley, it sends a message that your building in is decline. Keep this area looking first class.
There is probably a maintenance area for every letter of the alphabet. Among the easiest areas to maintain, that also have the biggest impact, are the five L’s: Locks, lights, landscaping, litter and laundry.
Keep locks in perfect working order and immediately replace burnt out lights. No excuses. Regular maintenance can protect your tenants and avert crime. This shields you from another L word: lawsuits.
Landscaping and litter are two standard maintenance areas that can go downhill fast if you let them slide. Be sure garbage is collected frequently. You do not want litter blowing around from overflowing trash reciprocals. You may need extra pickups at the end of the month when tenants move.
And lastly, if your complex has a laundry, this communal area needs to be a source of pride, not problems and complaints.
Three of the biggest “P” issues are pressure washing, paint, and plumbing.
Pressure washing and painting are preventive maintenance. Your best-spent maintenance dollars will be on prevention. You not only will keep bigger repair issues at bay, you also get a huge dollar return on your investment.
Pressure washing can be like detailing a car… it makes a dramatic improvement. And if it’s part of your regular maintenance, it extends the life of other areas like paint. Thus it saves you money in the long run.
Painting is maintenance that makes you money… and you have got to love that. The ROI on a gallon of paint can be 100 times its cost because the market value of your spruced-up building dramatically improves. Plus, fresh paint gives you visual justification to raise rents. Just a puny $5 per month increase in rent can add up to $20,000 or more to the market value of your building depending on the number of units.
Plumbing, of course, is the great fear of investors who are new to owning rental apartments. They envision fixing toilets at midnight. Many plumbing issues are caused by tenant misuse. The best way to stop tenants from clogging drains is to educate them on what can be flushed down the toilet and what can be put down the garbage disposal. Give tenants a pamphlet. I know that sounds academic, but if you take it seriously, so will they.
Tenants are going to talk about your building. It will either be a reason for them to boast or a reason to bitch. My experience continually proves that if you give them a reason to boast it will ultimately boost your bottom line.
Don’t rest on your laurels and let maintenance issues slide. A good reputation can be easy to maintain but one of the most difficult things to repair once broken. Just because you do not personally deal with tenants doesn’t mean you should skirt making immediate repairs. When maintenance issues occur, a quick response is always your best P.R.
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When you start your own business, it is a first step towards the control and monitoring of the money you earn. Anyone wanting to be an entrepreneur will have concern and apprehension of the risks and fear it involves. The fear is the outcome of the inexperience and the changing condition of the market. Hence to overcome such barriers, we need to learn from certain strong principles which will defy the uncertainty revolving the entrepreneurism.
Explore the Business
Whichever business you pursue, it is very necessary to study the whole market, examining the strength, weakness, opportunities and threats before you actually start your business. In addition, draw out the competitor’s map to be aware of the related and different business operating in the market. Analyze what are the factors which are in their favor or not in their favor. It gives you an overview of what the market has to offer to the business. Moreover, try to devise a unique selling proposition of your business to differentiate yourself from the rest. All in all, make a complete business plan for your venture in order to give yourself a better idea of how to penetrate the market and win the potential customers.
Requirement of Start-up Fund
The fund for the new venture can be obtained from the bank or the cooperative society. Business plan will enable you to get the fund much easily. In addition, the savings in your account could also play a vital role in the start-up capital. However, do have a careful monitoring of the expenses you do. You do not want to run out of funds at the start.
Identify an appropriate location for your venture
The start of any business requires a promising location. Factors like good infrastructure, availability of cheap labor, presence of suppliers, and the basic necessities such as water, electricity and fuel are extremely important to look for before starting your business. These factors determine the survival of the business.
Availability of labor and motivating them
Labor is the asset for any business. The nature of the business determines the right quantity of staff. Moreover, the right policies need to be implemented in order to keep the motivation and morale of the employees as high as possible. It includes the financial as well as the non financial benefits which benefits the employees. All in all, it is the motivation which paves the way for the business to increase its output and eventually its profit.
Embrace the basic of account and book keeping
The basic fundamentals of accounting have to be present in order to run the business. Things like receipts, payment voucher, journals and cashbook play a major role in the business. Hence, it is necessary to know how they are dealt and recorded.
Advertisement and Promotion
It is a saying that a good advertisement is a good product. The importance can be judged from this statement. It informs, persuades and retains the potential customers. It can be in print, electronic or in radio form. It has a separate budget which needs to be monitored accordingly. Hence, though it is an expensive department, but the return it provides, keeping in mind it is the effective advertisement, is huge.
Note: Overall, it is the commitment, dedication, honesty and sincerity to both the employees and the customers which increase the success factor for the business.
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