I love the American system of Capitalism, but it's hard to recognize that it still exists when the federal government is making sweeping interventions in the system. Not only meddling in bank and lending, but in mortgage re negotiations and bailouts. This is an odd political climate, maybe even a storm. It is early in the new administration, but I have very little confidence that spending obscene amounts of money that you don't have is a healthy formula.
This is a time to SAVE, but in light of the new federal money being thrown into the wind, you must consider inflation. What you save today, will not have the same value tomorrow. If you don't own a house, now is the time to look into real estate.
Real Estate is cyclical, but it's never without value. We've just come out of an unprecedented bubble, and if the FEDS don't meddle too much, prices are adjusting nicely. If you are a seller and you MUST sell your home for the best price, then these are still the basics:
* Condition of the property: Is the home clean, decorated nicely with just the right amount of furniture. Can the new owner move right in. Buyers in today’s market are not eager to buy a home that needs work.
* Marketing: Getting the listing out to as many internet sites as quickly as possible. Use photos.
* Price: Know what other properties are on the market in your price range, but more importantly, work with an agent or do some homework to determine the right price.
In this market, I'm going to add one more selling principal that doesn't apply in a sellers market. Depending on what you owe on your property, and the terms you have with your mortgage, you may want to get some professional advice on creative terms. You don't want to become an accidental landlord, but you don't want to take a big loss on your investment either. There isn't one right answer, but if the first three principals are not enough to secure the price you need, (notice it has nothing to do with the price you want), then contact me for some creative "terms" strategies.
If you are buying, how do you know if the price is right? Some experts think that the prices still haven't hit bottom. They think it might drop another 15%-30% or more? Check out this video from my HERO, Glenn Beck.
Remember the $100K line is adjusted for inflation.
You don't need a real estate expert to tell you that today's prices are still too high. Some would advise that our interest rates have never been better, and pricing is a combination of rates and principal. You want the right fixed rate that's sustainable for the length of time you are in the home. The average family today spends less than 10 years in a home and then trades UP. That wasn't always true. How many of your parents paid off their 30 year mortgage? If they experienced the great depression, there's a good chance that paying off their mortgage was at the top of their list. Will prices come back down to that average, should they? I have mixed feelings about that, because despite the rate of foreclosures today, there is a replacement value inherent in the price of a home. Raw materials and labor costs must be considered as well as availability. The value of the dollar, the leverage of a good lending rate, the cost of building and the global need for housing all impact prices.
The answer to the right price comes down to affordability, long term affordability. Regardless of what you paid for your primary home, if you can afford it, then you paid the right price. I'm going to emphasize however, long term. That's foreign to many of you, but that's because we've learned some bad habits, failed to adhere to good stewardship principals and we've got to raise our financial IQ a bit.
I think it's time that we took a serious look at good stewardship and placed value in our home again. If you lost your 100K job tomorrow, would you be able to maintain your lifestyle, including your mortgage for very long? Do you think that it could be replaced with a comparable income w/in a few months or even a year? Do you have some diversity in your income, or is it all from a single source? I wished Glenn would do an earning cycle through history as well as a mortgage cycle. I think you'll find that the chart would be similar. In the course of your life, from cradle to grave, you have very little time to accumulate wealth. If you only have a JOB, it's not going to happen at all. I believe in saving money, tithing and living within your means, but I would also encourage you to create some diversity in income sources. There has to be a balance between saving and investing, and Robert Kiyoski says it better than I do.
So, should you buy even though the housing market has not yet corrected itself?
1. Your income is diverse.
2. The price of the home falls within average rental rates for the area, (that means that your mortgage payment is comparable to current rental rates).
3. You could not build the same house for less with today's dollars.
If all this is true, then absolutely you should be looking to buy.
If you are not credit challenged, then I would suggest looking first at bank owned homes, and do some homework. These are sometimes referred to as REO or real estate owned, but the common denominator is that there is no other owner with equity in the house. Ask your realtor to look up both comparables, and transaction history of the property. The reason that's important is because it will help you decide on what to offer for the property. Banks are hurting, and knowing how much the bank got burned on the default, or not, will help you determine your opening offer. There are a few exceptions to being represented by an agent...but very few. In a bank owned situation there are times when working directly with the listing agent could be an advantage...but only if you have some experience with due diligence.
If you are credit challenged, then I would suggest looking at creative financing opportunities as well as for sale by owner. Your agent can help you evaluate the price and financing options. Not just because I am a Realtor, but you should always find a buyers real estate agent when you BUY a house. There is no cost to you, so find the agent first, let em know what you need and let them find you the perfect house.
Friday, February 27, 2009
Friday, July 25, 2008
Donny Deutsch
I love watching the Big Idea just for the questions and the guests. Not a lot of in-depth stuff, but he knows how to bring in big names and then I can look em up and get the back story.
If you miss the show, you can find highlights of the guests at the CNBC website.
OVERVIEW: Power meets power, every night on "The Big Idea with Donny Deutsch."
Donny Deutsch, the maverick CEO who built a multi-billion dollar advertising and media business, asks the fearless question of the most powerful people in business, entertainment and politics.
Whether it’s a one-on-one with Bill Gates, Howard Schultz, Harrison Ford or Donald Trump… "The Big Idea" celebrates the power brokers, trendsetters and stars who really make it happen.
-Source: CNBC’s The Big Idea Homepage
Wednesday, May 14, 2008
Bob Williamson - Horizon Software International
In 1970, at 24, Bob Williamson was in Atlanta, homeless, broke, addicted to heroin and methamphetamines. He was injured in a an auto accident and lying flat in his back he found God. He knew he was at the bottom with no schooling, a criminal record and very few prospects. He could either give up and die, or grab hold of God and turn his life around.
"I was either going to commit suicide, which several of my friends had done, or I was going turn my life around," says Williamson in an interview for Business Week this month. Bob is determined to be the best 'employee' when he lands a job with a paint company by being the first in and the last to leave. He becomes a paint expert and helps his company move into the computer age.
Like many entrepenuers, Bob experiments with improvements to his companies products and processes and has some success with his own line of paint for air brushes. By 1977, just 7 years after his "awakening", he has his own company of over 6000 art related items. Just as he's ready to take his company public, the IPO research uncovers his accounting firm has been embezzeling and he's facing bankruptcy. He spends the next 8 years working with his creditors to convince them to not sue and to give them progress reports. After his recovery, he sells all of the previous business assets and in 1992 forms Horizon International. Not on his paint formulas or past successes, but along the way, in order to manage his own companies and to avoid the accounting fiasco of his last business, he launches Horizon with his portfolio of software that had been developed in house, to help him run his own companies.
Read the whole story in Business Week
"I was either going to commit suicide, which several of my friends had done, or I was going turn my life around," says Williamson in an interview for Business Week this month. Bob is determined to be the best 'employee' when he lands a job with a paint company by being the first in and the last to leave. He becomes a paint expert and helps his company move into the computer age.
Like many entrepenuers, Bob experiments with improvements to his companies products and processes and has some success with his own line of paint for air brushes. By 1977, just 7 years after his "awakening", he has his own company of over 6000 art related items. Just as he's ready to take his company public, the IPO research uncovers his accounting firm has been embezzeling and he's facing bankruptcy. He spends the next 8 years working with his creditors to convince them to not sue and to give them progress reports. After his recovery, he sells all of the previous business assets and in 1992 forms Horizon International. Not on his paint formulas or past successes, but along the way, in order to manage his own companies and to avoid the accounting fiasco of his last business, he launches Horizon with his portfolio of software that had been developed in house, to help him run his own companies.
Read the whole story in Business Week
Friday, May 9, 2008
Forbes favorite Billionaires
According to Forbes' website, almost two-thirds of the world's billionaires made their fortunes from scratch. Fifty are college or high school dropouts. The most famous billionaire dropout is Bill Gates, founder of Microsoft, who left Harvard to sell software. Thirty years later he was given an honorary degree from his alma-mater. I guess the world of Academia still doesn't get it. Seems the horse without a cart can run faster and farther.
Other billionaires, such as Oprah Winfrey, made their fortunes against far greater odds. Born in rural Mississippi, she spent her early years living in poverty on her grandmother's farm. Wanting a way out, she moved to Wisconsin to be with her mother, but was sexually molested by her male relatives. At age 14, she reportedly gave birth to a premature baby who died. Only after moving to Nashville to be with her father did her luck finally start to turn. At the age of 19, she became the youngest person and the first African-American woman to anchor the news at Nashville's WTVF-TV. She then relocated to Baltimore's WJZ-TV to co-anchor the Six O'Clock News and later went on to become co-host of its local talk show, People Are Talking.
In 1984, Oprah moved to Chicago to host WLS-TV's morning talk show, AM Chicago, and the rest is history. Within two years, AM Chicago became the Oprah Winfrey show and went into national syndication and that's really when her Empire started. I say this because it's what sets Oprah apart from other hosts who are 'employed' by a network. Oprah saw the unprecedented success of her impact in the talk show arena, and became her own boss.
The Oprah Winfrey Show has remained the number one talk show for 22 consecutive seasons. Produced by her own production company, Harpo Productions, Inc.
Other billionaires, such as Oprah Winfrey, made their fortunes against far greater odds. Born in rural Mississippi, she spent her early years living in poverty on her grandmother's farm. Wanting a way out, she moved to Wisconsin to be with her mother, but was sexually molested by her male relatives. At age 14, she reportedly gave birth to a premature baby who died. Only after moving to Nashville to be with her father did her luck finally start to turn. At the age of 19, she became the youngest person and the first African-American woman to anchor the news at Nashville's WTVF-TV. She then relocated to Baltimore's WJZ-TV to co-anchor the Six O'Clock News and later went on to become co-host of its local talk show, People Are Talking.
In 1984, Oprah moved to Chicago to host WLS-TV's morning talk show, AM Chicago, and the rest is history. Within two years, AM Chicago became the Oprah Winfrey show and went into national syndication and that's really when her Empire started. I say this because it's what sets Oprah apart from other hosts who are 'employed' by a network. Oprah saw the unprecedented success of her impact in the talk show arena, and became her own boss.
The Oprah Winfrey Show has remained the number one talk show for 22 consecutive seasons. Produced by her own production company, Harpo Productions, Inc.
Thursday, May 8, 2008
Follow your heart
There is a universal truth to the notion that in life, love and career, you should 'follow your heart'. It seems a simple notion, but I'm amazed at how many people ignore their passions and gifts to settle for jobs they don't like, often hate, and sometimes aren't even good at.
I heard about a remarkable young man who has been following his dream since his youth. At first it sounded like his passion was just making money, but listen a little longer and you can hear in his stories that he seemed to be driven by the freedom that money could buy him. I think he was fascinated that he could have an idea, research a need, follow through and be successful. At age 9, Cameron Johnson started his first business, making greeting cards and party invitations on the computer he got for Christmas. Three years later, he was making $50,000 a year selling Beanie Babies on e-bay from his parents' garage. He saw opportunities around him and found a place for himself in every venture. If he never starts another business or earns another dime, he's going to be my poster child for empowering young people, anyone really, to just try.
Sometimes need and not passion drives people to success and innovation. Consider Margaret Rudkin, a young Connecticut housewife and mother of three. When she discovers one of her sons has an allergy to the preservatives and artificial ingredients in commercial breads she begins experimenting with baking her own preservative-free bread. The year was 1937 and the country was in a great Depression. She had no financial backing or experience, just the desire to create a loaf of bread that was delicious and contained only natural ingredients. Maybe you haven't heard of Margaret Rudkin, but does "Pepperidge Farm" sound familiar?
This is my first blog, but I hope we can be biz buds. I come from a family of artists and entrepenuers too. If you have any comments on my blogs, business ideas you need help with, or just want to share your experience, please stop by often. I'm going to look for inspirational stories to keep us moving and trying.
I heard about a remarkable young man who has been following his dream since his youth. At first it sounded like his passion was just making money, but listen a little longer and you can hear in his stories that he seemed to be driven by the freedom that money could buy him. I think he was fascinated that he could have an idea, research a need, follow through and be successful. At age 9, Cameron Johnson started his first business, making greeting cards and party invitations on the computer he got for Christmas. Three years later, he was making $50,000 a year selling Beanie Babies on e-bay from his parents' garage. He saw opportunities around him and found a place for himself in every venture. If he never starts another business or earns another dime, he's going to be my poster child for empowering young people, anyone really, to just try.
Sometimes need and not passion drives people to success and innovation. Consider Margaret Rudkin, a young Connecticut housewife and mother of three. When she discovers one of her sons has an allergy to the preservatives and artificial ingredients in commercial breads she begins experimenting with baking her own preservative-free bread. The year was 1937 and the country was in a great Depression. She had no financial backing or experience, just the desire to create a loaf of bread that was delicious and contained only natural ingredients. Maybe you haven't heard of Margaret Rudkin, but does "Pepperidge Farm" sound familiar?
This is my first blog, but I hope we can be biz buds. I come from a family of artists and entrepenuers too. If you have any comments on my blogs, business ideas you need help with, or just want to share your experience, please stop by often. I'm going to look for inspirational stories to keep us moving and trying.
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