My wife forwarded an email to me - labeled: Your best "defense" against a bad economy... - Even though I am not sure what she means ...I think I should just accept it as she only wants to share the wisdom - Stay Focused - Make More/Spend Less
Most people are beginning to realize that this "economy thing" might be worse than we think.
My best guess (and this is only my opinion) is that we could be in for years of harder times.
What's the best way to protect yourself?
Well, there are two basic strategies to follow when situations like this come up:
1) Make more
2) Spend less
I recommend that you do BOTH.
The ULTIMATE way to do better in life is to continually get more out of the effort you're already putting in.
To work SMARTER.
Sure, we can all work a little harder, but you can't work THAT much harder. The "big gains"
in life come from figuring out how to get more done in less time, and with less effort.
I've spent about 15 years studying business, and over 10 of those years specifically trying to figure out how to manage myself and my time in the best way - so that I get the MOST I possibly can from the time and work I do put in.
My experience has been that I can get SO much more done than I ever thought possible, if I just know HOW.
When I ask people individually and in groups:
"Do you think you're working at 100%
efficiency?"
...almost EVERYONE says:
"No."
We all know that we're not working at our own "peak efficiency" - we know that we could be getting more done with the SAME time and effort invested... we just don't know how to:
1) Stop doing the things that are unproductive
2) Stop the interruptions and distractions
3) Stay focused on the things that matter
If you're reading this right now, and you're WITH me on this - and you KNOW that you could be (and SHOULD be) getting a lot more done, considering how much you work, then I highly recommend that you try out my Wake Up Productive 90-day Time Management and Productivity training program.
Our first class is a smash hit, and we're going to open ONE more class this year.
Registration is TODAY only, and will be open for 12 hours.
My guarantee is simple: I'll help you double your productivity in 90 days, or you don't pay.
I KNOW that this program will open your eyes and help you increase your personal success and productivity - and it will help you create the BEST "protection" against a potentially bad coming economy.
The details of the program are here, so go and register TODAY, before we close down for the rest of the year:
I recently got an email from my cousin working at Goodyear in China ...it summarizes all of the actions that led to our Current World-wide Financial Crisis. I was AMAZED to learn John McCain tried to tell Congress about this financial crisis back in 2005. ...but, the mainstream media networks don't inform us (the American people) what really went on. I was surprised to learn about how much this problem was caused by the Democrats (including people involved with Sen. Obama); and now, the same Democratic leaders just passed the $700 billion bailout plan.
The following is a condensation of a series from Investor's Business Daily explaining 'What Caused the Loan Crisis':
1977: Pres. Jimmy Carter signs into Law the Community Reinvestment Act the foundation and cornerstone for the impending disaster.. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The publicized premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc. The Results: Statistics bear out that it did not help.
How did the government get so deeply involved in the housing market? Answer: Bill Clinton wanted it that way.
1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stock-holding few.
1993: Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.
1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy, which broadened the CRA in ways congress never intended.
1995: Congress, about to change from a Democrat majority to Republican. Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.
1997 - 1999: Clinton, bypassing Republicans in Congress, enlisted Andrew Cuomo, then Secretary of Housing and Urban Dev elopement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.
With incentives in place, banks poured billions in loans into poor communities, often 'no doc', 'no income', requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats.
384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.
Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.
1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. 'We manage our political risk with the same intensity that we manage our credit and interest rate risks,' Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.
2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the 'special status'. Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish. 'We think that the statements evidence a contempt for the nation's housing and mortgage markets' Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.
2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep.Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.
2003: Bush proposes what the NY Times called 'the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.' Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.
2005: Then Fed chairman Alan Greenspan warns Congress: 'We are placing the total financial system at substantial risk'. Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, 'If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole'. Sen. Harry Reid accused the GOP ;of trying to 'cripple the ability of Fannie and Freddie to carry out their mission of expanding home ownership' The bill went nowhere.
2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, subprime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.
2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats' talking points about this being a 'Republican' disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $750 billion!
Yes, Everyone can invest in real estate. But, are you making money in today's real estate market?
Beginning/Novice Investors sometime get caught by the emotional Buying decision: "When do they pull the trigger and jump in?"
Some good and successful investors have complained that novice investors have created a problem in today's market by bidding too high on a number of properties (...these same good investors move on to the next deal; but say, they'll be back in about a year or two, to buy the property after it goes to foreclosure). I am just wondering if the record number of people who have lost money with real estate are these the same novice investors.
Not to tick off the good investors (they have duplicated success over time) ...relying on their systems to evaluate properties; keep them on track; stay in their niche; etc. ...they've said: it's just a numbers game. One of our best borrowers: Ben Maxwell/Birch Billiter at Dovetail Homes ...are even looking at expanding their success by allowing novice investors to partner with them on new deals.
Today's market has weeded out the border line investors; they were not too healthly financially, too heavy with properties, etc. Recent tightening of the credit market made it very difficult for these investors to re-finance properties and lower their debt service ...they have had to liquidate assets just to survive & have cash.
What determines who makes a profit in real estate? Or, how can you avoid losing money? Are the successful investors good; or, just dumb lucky?
Here at Castle Commercial Mortgage, after we review the loan application, purchase contract, repair estimates, appraisal, credit report, personal financial, etc. - we hold a loan interview: asking the question: What makes you confident - you will be successful (you can make money) on this property in today's market conditions? ...not one of our borrowers has said: Dumb Luck. Of course, if they did say: "Dumb Luck" we would NOT Approve the loan.
But, I say DUMB LUCK has made some people a lot of easy money ...that is: anyone investing in an appreciating market is more likely to make money. Its making money by being in the right place at the right time.
This is where the Macro-Economics behind the investment takes over: low supply/high demand; good economy (plenty of good paying jobs - job growth); and a good outlook for the next 5 to 10 years. I think the DNC and news media may highlight over the next couple of weeks: Colorado's western slope and the Energy Sector jobs.
I'll say it here first: a Hot Real Estate Spot in Colorado: is on the western slope; Battlement Mesa / Parachute, Colorado.
In Battlement Mesa/Parachute area; Garfield County has granted a record number of drilling permits in 2008; there has been high job growth; good paying jobs; low supply of houses & high demand by seeing Motel 6 & Holiday Inn Express being booked solid at night. Looking at the Glenwood Springs newspaper: The Post Independent - there were only 3 houses for sale in Battlement Mesa & 3 houses in Parachute. We are estimating, if energy prices stay above $100/barrel, the economy on the western slope will continue to grow for the next 5 to 10 years.
We are completing 2 new homes in Battlement Mesa, and have seen the local sub-contractors break for lunch @ 11:30am ...saying if they waited until 12noon for lunch - it would be two hours long. I'll have to tell you a couple of stories in the next couple of postings - to share their expertise, etc.
Net/Net, investing in Garfield County's real estate is an indirect way to investing in the energy sector. ... are you feeling lucky? Ready to pull the trigger to BUY?
Join Steve Hickox Tomorrow - June 20, 2008 at the Country Inn and Suites - 4343 Airport Way (I-70 & Pena Blvd.), Denver, CO from 10am-11am
Steve Hickox will be talking about investing in Trailer Parks & how to use 1031 exchanges. It promises to be a GREAT & Educational seminar.
In case you did not know, Steve Hickox
is the President of 1031x.com and Castle United ...he enjoys speaking with real estate investors about a variety of real estate subjects. Steve explained that at 1031x.com and Castle United, we give you lots of FREE information ...hoping that you will use us to do your 1031 exchange, etc.
Much of the same FREE advise is also available on the 1031x.com's web-site: www.1031x.com
1031x.com acts as Qualified Intermediary under section 1031 of the IRC. The company now has a ten year track record of successful growth. During that time, 1031x.com has safely handled hundreds of millions of dollars for its exchange needs.
I recently talked with Ben Dorland - from Your Castle Real Estate. We were looking over a map for real estate investing in the Denver metro area ...and Ben said he also has it for the Front Range. This quarterly map is a quick reference with a variety of RE statistics on a neighborhood basis - % of foreclosures; average sale price; % of appreciation/depreciation; # of sold homes. It's a great starting point to begin targeting/analyzing your real estate investing in the Denver metro area.
Ben is the president of the DAC (Denver Athletic Club) Real Estate Club. The club meets on a monthly basis to network, hear local real estate experts talk about their expertise, and have some fun. Ben has provided free seminars and tours, informational maps, investment opportunities to many investors not from the Denver area. Ben also hosts various radio programs and classes for the beginning investor to the experienced investor.
Q: Why did you join Your Castle Real Estate?
A: I have been an investor for almost four years. I read about a free investor workshop that they were promoting and went to check it out. It was very helpful and I started working with one of the great agents at the company. That agent showed me all of the tools that Your Castle has created to find great deals. After I saw those tools it was a very easy choice to hang my real estate license with Your Castle Real Estate.
Q: What does Your Castle Real Estate do/services they provide? ...Denver (and Front Range?) Home Price Change Maps.
A: Your Castle Real Estate is a unique organization because we get very detailed information and data, process that data in our customized tools, and then present them to our investors and retail clients in very easy to understand mediums. We host free monthly investment seminars in the metro Denver area. These seminars describe the data we are pulling from the various research institutes we are partners with as well as cities and counties on the real estate trends throughout the area. We then relate that current data with the historical trends that we have seen over the past 30 years and show our investors where the opportunities are at. Another way we relay this information is through our maps. We track information quarterly on the different neighborhoods in the metro Denver area. Our maps are somewhat of a heat map that describes total number of sales, percentage of foreclosures or short sales in that particular area, the average price in the specific areas, and the percentage change from the previous quarter. This visual representation helps us decide where to guide our investors to get the best bang for the buck. Another Tool I use is our very own Comparative Market Analysis Tool. This allows us to make a determination on the equity position on a particular property within seconds rather than using the traditional methods. This tool has a track record of being very accurate, much more accurate than some of the tools out on the web. We have many other classes and property investment tours that we sponsor as well. These are only a few advantages I have over my competition in finding properties and getting my investors the best ROI.
Q: Who's your target audience/niche?
A: My target audience is primarily investors or anyone that is looking for a property in the Metro Denver area that has a great equity position. Everyone loves a great deal!!!
Q: What is your advice/opinion on the Denver metro housing market?
A: The Denver metro housing market varies by each geographical area. It also depends on whether you are selling or buying. With that being said, I believe that if you are a real estate investor or are thinking about investing in the Denver market, now is the time to jump in. We have been tracking different indicators on when we think we will be at the "bottom" of the market. We will never know when that will happen but we do know that Days on Market is getting shorter, job growth is continuing to grow in metro Denver, and the inventory in certain areas of Denver is not keeping up with demand. So, that tells me that we are at a wonderful time to buy investment properties. We do have some fix and flip areas, however the exit strategy to realize maximum returns would be a 2 - 5 year hold and cash flow your rental. I have many rentals myself and this strategy is working great. The vacancy rate is very low and it is a wonderful time to be a landlord. I do realize that being a landlord is not for everyone, we have exit strategies for those folks as well. In closing, I have heard many people throughout the years say to me, "if only I invested in Denver houses back in the 80's". According to the statistics we are in a slump that is larger than the eighties and we expect a BIG rebound. If you have been saying that since the eighties, now is the time to redeem yourself.
Ben Maxwell from FnH Properties will be our guest.
Ben Maxwell is co-founder and manager of Lighthouse Investment Group, LLC which was incorporated in 2004 to build and renovated residential properties in the Denver Metropolitan area. A licensed general contractor, Ben manages all aspects of construction, including the development of financial models for every project, budgeting and accounting, and on-site management. A second-generation builder, Ben began his career in construction in 1994. He has been involved in new home construction and remodeling in the Denver area since 2000, when he started Maxwell & Associates Construction. He now runs Lighthouse and has recently started a new venture, FnH Properties, aimed at fixing and holding property for short and long term benefits.
To Listen and join in on the 'live' broadcast - click on: http://www.castlerockradio.com/ on Tuesday November 20, 2007 between 9am - 10am MST.
The Radio Show is FREE...and the phone call is FREE #888-321-7234.
Dana Veitch from Castle Oil and Gas will be our guest.
Dana Veitch is from an oil and gas family dating back to the early 20th century in Oklahoma. Mr. Veitch has been employed in the oil and gas business since 1979, negotiating deals totaling over $1 Billion to date in mergers and acquisitions. This M&A experience came from working for major and independent oil and gas companies including ARCO, Phillips Petroleum, Chevron USA, Petro-Lewis and Anadarko.
In the Fall of 2005, Mr. Veitch created Castle Oil and Gas - to specialize in 1031 exchanges into the oil and gas business. To Date, Castle Oil and Gas has assisted in exchanging over $3M of real estate sales into oil and gas producing properties.
To Listen and join in on the 'live' broadcast - click on: http://www.castlerockradio.com on Tuesday November 6, 2007 between 9am - 10am MST.
The Radio Show is FREE...and the phone call is FREE #888-321-7234.
Please call the show to share a Sad Story, a Happy Story, a Success Story or any Real Estate story - dial #888-321-7234
On the 10/30/2007 broadcast - Steve Hickox welcomed this week's guest: Kevin Forsgren from Owner2Owner (a For Sale By Owner - FSBO marketing company).
Steve Hickox began the show by first telling a real estate story ...as a young lawyer living in Northwest Denver back in the late 1980's and early 1990's - he did 8 to 10 Fix & Flip deals ...and every real estate deal he would sell the property by himself (not having a broker to represent him).
After buying and fixing the property up, Steve wanted to try to sell the property by himself. He figured he could simplify the sales process by just having a hand-made sign out in from of his property (usually a 2'x4' piece of plywood - painted White) with the big letters: FOR SALE ...and his phone number and Steve's Asking Price. That was all of Steve's marketing efforts. Steve smiles when he said - That was before the internet and other techniques realtors use today in their marketing plans.
However, the basic principals are still sound and remain the same - how to find motivated buyers and quickly negotiate the price to see the real market conditions. Steve figures anyone actively looking would see his sign in front of the property and would call him.
Steve would qualify the potential buyer in less than their 30 minute negotiation ...and had a legitimate offer. He figured, if cutting out the middle person/people
...no faxing back and forth offer/counter offer/acceptance/contracts
...going through filters from talking through two Realtors (Seller & Buyer) just to get a simple answer from the buyer; Remember: Time Kills Deals
...if one can reason, meeting and talking directly with a potential buyer across a coffee table - you can read their body language, ask to confirm your understanding of their concerns and want to speed up the sales process.
Steve said: Doing real estate without a realtor can be done ...the seller just keeps the commission as additional profit in the deal. He figures one can keep 2-4%. Out of the 8 to 10 properties, Steve never lost money on any real estate investment deal.
Sure, it sound scary at first; to sell your home without a realtor ...but it just stems from a lack of knowing/experience going through a real estate transaction. In Colorado, there are certain standard documents that need to be signed and who may handle the majority of the process.
Steve welcomed Kevin Forsgren from Owner2Owner to the show - and talk about the real estate market in Colorado.
Kevin can relate to Steve's real estate story - having lived in Oregon (moving 3 times) and now in the Denver Metro area. Each place, Kevin had bought a home with little to no equity in it. Because his job kept changing within the company, Kevin needed to relocate and had only a short amount of time to sell his home and move.
Today's Denver real estate market is similar, Kevin said. A number of friends and neighbors are first time home buyers with a mortgage that were financed at 100% or up to 105% of their purchase price. Even with the recent news showing that Denver is #1 in the nation for home value increase.
Steve acknowledged, we have seen in the past (like back in the 80's in the Denver market), the sellers would come to the closing with a check in hand and pay the difference of their mortgage & realtor commission after sale proceeds are applied.
Kevin's new marketing company (Owner2Owner) will walk these sellers/homeowners through the real estate process; by providing them with a professional FOR SALE sign with a brochure box & a home flyer; you can list and post pictures of your house on their web-site and be in their monthly magazine that will be available in 15 Wal-mart stores and 5 Safeway's.
Plus, Kevin will provide you with the legal forms necessary to complete a real estate transaction and host a monthly seminar with real estate professionals (i.e. title company & mortgage broker/lender) ...people that will help you complete the deal.
This is aimed at the Do It Yourself (DIY) homeowners ...that do not have the money to pay a realtor to sell their home in the Denver metro area; ...or, people that do not want depend on their broker to sell their biggest asset (their home).
Kevin has seen and heard all too often, the stories of Realtors only seeing the home-owners to get their listing and only at the closing. Some Realtors don't return phone calls promptly ...or give feed back to the home-owners as to #'s and comments from open houses. These Sellers/Home-owners wonder about where a Realtor's loyalty is ...always asking to lower the price & taking potential buyers to other listings. In short, it is hard to re-build the trust between Sellers and a GOOD Realtor if there is just one of these bad experiences with a Bad Realtor.
Steve had asked: Have you (Kevin) gone through some formal training for this? No, just the real life experience of selling my homes a number of times. Again, we are here to help with the Marketing of a Property for a Do It Yourselfer (DIY). After seeing it the first, second or third time, you start seeing the critical basic steps and get through the FEAR Factor of not knowing.
Steve went through his basic residential real estate plan - how to sell real estate:
•1) Putting the House in a good SHOW Condition (clean, decoration, not cluttered, all the fixes complete - new paint job, new carpet, landscaping, etc.)
•2) Pricing the Property Correctly ...residential properties use recent comparison sales (aka comps) in your neighborhood of similar sq.ft & style home.
•3) Need to Find Qualified Buyers
•4) Correct Contracts to use ...some standard forms can be used in Colorado
Kevin figures his savings is over $29,000 from the commissions by selling his home himself.
Owner2Owner never charges a commission; just operates on a flat fee basis.
Owner2Owner's monthly magazine is not a new idea ...in fact, you may have seen similar magazine in the Denver Metro Area. We know the magazines sell houses because there a number of big realtors continue to put them out there. But many of these same magazines tend not to be updated quickly. FSBO magazines are available in other real estate markets - but none in the Denver area.
Our first caller asked: "Do you offer help Pricing the Home?"
Yes, Owner2Owner can help you find recent sale comparisons (comps) in your area. It is then up to you to make the final decision on what to price your house - Asking/Listing Price.
Another caller asked: "If you sell your home by yourself, what happens if a realtor come in with a buyer?"
No problem! The buyer's realtor does get their FULL commission. ...here again, we want to create a WIN / WIN situation. Whether a buyer or their Realtor makes an offer, we want you (as the Seller) to consider anything and every offers.
Does Owner2Owner recommend an Appraiser?
No, Owner2Owner does not work with any specific appraiser. Keep in mind, a typical residential appraisal will cost between $300-$350 per house in Colorado. The appraisal is usually requested and directed by the buyer's lender.
It does not hurt to have an appraisal done, to review independent sale comps and market conditions that are used to determine the market value of your property. In the appraisals details are some other interesting details (i.e. value of different features - attached garage; finished basement; covered porch, city water & sewer, etc.). You may get a better sense of what your market price should be from an appraisal.
Another caller asked: "Does Owner2Owner offer classes: how to sell real estate by yourself?"
Yes - Owner2Owner offers a seminar that go through a number these topics; marketing & advertising ...and the seminar will have a number of experts that cover areas like Real Estate Law; a person from a national title company talking about title & escrow and what the title company will/should do; a mortgage broker that will talk about financing programs and pre-qualifying your buyer.
An emailed question: "How do you advise/handle buyers making low-ball offers?"
Any offer that comes in, the Seller/Home-owner can make the decision to Accept, Reject or make a Counter-Offer. The nice thing about talking directly with a potential buyer, is you start the negotiating process ...you can ask them what is their thought process to come to that figure.
Owner2Owner FOR SALE signs has room to put your Asking Price - addressing the question - How Much? ...it allows many potential buyers to start pre-qualifying themselves and makes any call a serious buyer/offer. Keep in mind, your Asking/Listing Price is not always what some buyers will offer to pay. They will want to negotiate for a better deal - so, there will be DOWNWARD pressure on your Asking/Listing Price. Some Sellers/Home-owners deal with this by putting the word: "FIRM" on their FOR SALE sign.
Another caller asked: "I live in a small secluded area, away from all the metro area traffic and stuff. How does this program help me?"
Like all properties, you house has some features that would be attractive to someone else. Whether that is getting away from the big developments, congested streets or row-houses; there are some people that may want that same dream house. Owner2Owner's web-site has space for you to not only list these special features, but directions - how to find your house. The web-site is the gem of our program ...most magazines or just that; but our program includes an internet presence, being Wal-mart & Safeway, and you can sign up for our seminars.
Kevin made the offer - for the FIRST 35 Home-owners that sign up to the Owner2Owner program ...it will be done RISK FREE. Contact Owner2Owner for more information call 720-212-9150; or go to their web-site: http://www.forsalebyowner2owner.com/
For investors that like the idea of being in Real Estate without the exposure to one single property, management, etc. ...we have a Cash-Flow investment opportunity with Castle Commercial Mortgage Co. We are growing our pool of private funds from $7M to $30M ...the investment is personally guaranteed, has a fixed rate of return and is backed by Colorado Real Estate. Minimum Investment is $50k. For more information, please call Castle United at 866-901-9455 (and ask for Steve, Chris or Tom).
Many thanks to Amber, Jamie, Milissa and Dana for calling Steve's radio show.
"The Real Estate Story Hour" - is broadcast LIVE on Tuesday mornings (9am-10am MST) - on Castle Rock Radio ...you can listen or calling the show with your real estate story and questions- 888-321-7234;
Our contact info. show sponsors; bio and how you can listen to past shows is below.
Until next time - We wish you much success, hope you make millions. We would also like to help you achieve it!
Steve Hickox - Real Estate Attorney in Denver, CO; seasoned Real Estate Investor (Fix & Flips); President of Castle United - including 1031x.com and Castle Commercial Mortgage Co. graduate from University of Colorado & law degree from Colorado State University.
Please call the show to share a Sad Story, a Happy Story, a Success Story or any Real Estate story - dial #888-321-7234
On the 10/23/2007 broadcast - Steve Hickox welcomed this week's guest: Aristotle Karas with AJ Karas Auctioneers
As I was waiting for yesterday's World Series game to begin, I thought of checking out Clint Hurdle's interview on http://www.espn.com/ Question after question, Clint patiently answered each reporter; he was straight and to the point. When pressed by another reporter to talk about his personal life, Clint said he did not want to take anything away from the accomplishments of the Colorado Rockies in the World Series. But, got into some details of his family and talk about how special his daughter - Mattie is to him. Clint said: "when Mattie has a Good Day - everyone has a Good Day."
I really admired someone that tells it like it is - a straight shooter - and more importantly, does not shy away from anything; living and dealing with things bigger than just the day to day work or grind. I think that's why Mr. Hurdle is more than just successful as the Manager of this year's Colorado Rockies. GO ROCKIES!!!
I think the same is true with the people in Real Estate today. The GOOD Real Estate professionals that are round today, are not in this business just for the good times (to make the most money they can) - like the mass amount of real estate people in 2003-2005 when prices were rising; and, in some market areas by double digits (CA, Phoenix, Dallas, etc.). It seemed everyone was working in or was buying Real Estate. Many doubled or tripled their money in that market.
But, today's Real Estate market is totally different - it is not easy. Some prices have dropped significantly, others areas the market values are staying the same; Day On the Market (DOM) have increased; while agents are courting slow decision-making buyers; and many brokers, closers, processors, etc. have jumped off the Real Estate band-wagon by changing jobs or have been laid off and found new careers. Again, the Real Professionals are ones sticking around in today's lean market. Their motivation and success is being measured more by developing relationships; constantly learning and listening to both buyers and sellers; finding alternative solutions and serving more than just the buyers/sellers.
One such alternative solution is the growth of Real Estate Auctions. I will admit, when somebody says Auctions ...I immediately think of eBay. You may have seen a television commercial ...when the announcer says as a woman puts down the ornate vase "It's better when you WIN IT on eBay!" There is an excitement about auctions, engaging a number of buyers, competing against one another to get the prize. ...and the seller is usually smiling even wider at every bid.
I even had one of my neighbors telling me of jewelry and their new car, she bought it off eBay ...and it saved her thousands of dollars. Even though she is a real estate agent, she thought the next thing for eBay is selling houses.
But before you go to eBay - my un-scientific research shows eBay had just over 5,200 listings under Real Estate ...versus 1.7M of Collectibles; 1M+ Jewelry items; 435k of Computers & Networking ...Real Estate was at the bottom of the total list of categories on eBay - Why? In short, Real Estate Buyers are not on looking eBay for their homes. Plus, it is not easy to sell your Real Estate on eBay.
This leads into our guest this week - Aristotle Karas of AJ Karas Auctioneers. AJ Karas specialize in Real Estate Auctions. Even though you and I may see just 30-60 minutes of the actual auction and marvel at how smooth the operation went, the things we missed include assisting bidders, marketing, event planning & scheduling, and the other minutia.
Aristotle Karas and Steve Hickox started the show talking about everyone in Denver being excited to watch the Colorado Rockies play in the World Series. Even though Steve is from the New England area ...he is a Rockies Fan. Aristotle grew up in Cripple Creek and lived a number of years in Pagosa Springs - knowing more about geology and rock formations ...but he too is a HUGE Rockies Fan. If you want more information or need to contact Aristotle or AJ Karas Auctioneer - either phone: 877-612-8494 or click on: http://www.ajkaras.com/
Real Estate Auctions is simply real estate in reverse - Aristotle said. It is putting buyers and sellers together. But, the auction is where everything is done before hand - title, inspection, etc. The only missing pieces are the name of the buyer and the price. Aristotle and his wife: Janelle had in March 2002 attended a real estate auction in California; they were amazed at the process - so much so, they both jumped in with both feet. By June 2002, AJ Karas sold property at auction exclusively.
Steve commented: An auction is really when you have a motivated buy and a motivated seller ...and you end up at the true market value of the property. He proceeded to ask about the whole process - How do you qualify your buyers?
Aristotle pointed out; Each buyer would need to bring a Cashiers Check to the auction in the amount of: $10k ...this gives them the right to bid on the property (either getting a number or their name). The buyers would also have either a personal check or certified funds if they are the highest bidder - the check would then be written for 10% of the SOLD Price. Then, the buyer will determine how long they want to go to close the deal - get their financing in place, etc. There are times when the buyer of the property may close in the next day or two if they have everything in place.
Prior to the sale, all of the other details are taken care of: Title Work, Inspection, etc. Aristotle, when on to say, we deal with the entire minutia - so at the auction, it seems like clockwork - everything goes smoothly. What people don't see though - us going door to door, to the neighbors houses; letting them know about the property; and when it is going to auction. This gives the neighbors a chance to buy the property before the auction date.
Our first caller asked: Can Auctions be used with 1031 exchanges?
Aristotle said: Real Estate Auctions work GREAT with 1031 exchanges. However Steve wanted to make it clear, the problem with 1031 exchange is identifying replacement properties in the 45 days and only having 3 properties to list. There is also the possibility of not getting the successful bid and owning the property.
The Real Estate Auction we are talking about (done for the seller) is different than a Bank Auction where the property has gone into foreclosure and; as in Colorado, the auction is held at the Public Trustee's office.
The whole auction process may take as little as 10-15 minutes or for higher end homes: 30-60 minutes. Aristotle had mentioned, the interesting part of the auction process is, you never know who will have the winning bid. It may be the first one at the auction, or could be the late arrival that walks up and puts a bid that is above anybody else.
Our second caller's question: Do the total funds need to be available at the auction?
For Aristotle's Real Estate Auction, the first thing is having qualified buyers ...which I described the process earlier - $10k cashiers check and then having a personal check for 10% of the purchase price. The property will need to close in the next 30 days; otherwise the winning bidder will forfeit their 10% of funds. So, financing is up to the Winning Bidder.
That is different in Bank Distressed Property Auctions - yes, total funds are needed at the time of the sale; after the auction. This is due to a bank owning a property and want the funds immediately.
To see a LIVE Real Estate Auction - come out on Nov. 10, 2007 (11:07am MST) at the Sheraton Denver West; 360 Union Blvd., Lakewood, CO - AJ Karas will be Auctioning a number of timeshares/Vacation Ownership at Rams Horn Village Resort (located in one mile from downtown Estes Park, CO and one mile from the Rocky Mountain National Park). Many people know Rams Horn Village (one of the RCI Gold Crown resorts) is on seven beautiful acres and a perfect family getaway for a weekend in the fall, winter, spring or more during the summer.
Rams Horn Village has many amenities - like an outdoor heated pool; 3 outdoor hot tubs and a children's playground; looking out your window, you are able to see Longs Peak and the Continental Divide. Inside Rocky Mountain National Park, besides the scenic drive - plan to do some wildlife watching, take a great hike, fishing, or horseback riding. It is a marvelous place to rest and relax after spending the day inside the National Park.
People can preview the Rams Horn Resort on November 3rd from 1:07pm-3:07pm - Rams Horn Village is located at 1565 Colorado Highway 66, Estes Park, CO or for more information about this auction - please contact AJ Karas Auctioneer directly by either phone: 877-612-8494 or click on: http://www.ajkaras.com/
Aristotle's favorite real estate story was about an auction of a lavender farm just outside of Taos NM. It was a rental property, lavender farm and had water rights to the river running through the middle of the property
In the end, the WINNING Bid came from a person that lived on 1 mile away. Aristotle reasoned, they decided to buy the property because with the auction - it gave them a deadline to make a decision. They had already been using the water rights; and a new buyer would mean - they would have to make a new contract for those water rights.
Steve briefly announced Castle Commercial Mortgage is looking for new investors - people that could benefit from having an indirect investment in Real Estate without the fluctuations in the market. It is more of a Cash-Flow investment; backed by Colorado Real Estate. The minimum investment is $50k. For more information, please call us (Steve, Chris or Tom) at Castle United 866-901-9455
Many thanks to Denise, and Kelly for calling Steve's radio show - Excellent questions.
Please join us on Tuesday mornings (9am-10am MST) - listening to "The Real Estate Story Hour" or calling the show with your questions and stories- 888-321-7234;
Below is our contact info. show sponsors; bio and how you can listen to past shows.
Until next time - We wish you much success & like to help you achieve it!
Steve Hickox - Real Estate Attorney in Denver, CO; seasoned Real Estate Investor (Fix & Flips); President of Castle United - including 1031x.com and Castle Commercial Mortgage Co. graduate from University of Colorado & law degree from Colorado State University.
Please call the show to share a Sad Story, a Happy Story, a Success Story or any Real Estate story - dial #888-321-7234
On the 9/18/2007 broadcast - Steve Hickox welcomed this week's guest: Jason Clark - Account Executive with CMG Financial Services - Home Ownership Accelerator mortgage
The whole real estate and mortgage industry has dramatically changed over the last 12 months. Remember the good times in Real Estate & mortgages in 2004-2006 ...allowing people to not only buying their own home - but also have a mortgage for them to have lower payments. For some, owning a home was living the American Dream. The mortgage industry followed by developing some Creative mortgage products and increased their markets (i.e. Option Arms, No Down-payment, Alt-A, Sub-prime, etc.). Everything worked GREAT in a good & increasing market; that is as long as real estate prices were appreciating.
But, "When It Rains, It Pours!" As soon as something went wrong ...everything started to come apart ...like, increasing numbers of defaulting loans to banks, foreclosures, valuation fraud, lenders imploding and closing their doors, lay offs from title companies & lenders, etc.
Listening to the mainstream media/news it was the various mortgage products to blame for the real estate market. Reporters asked Alan Greenspan his opinion of the whole real estate industry. Is this a bad time to buy real estate?
National politics is coming to the front stage in 2008, did you want the President, or the candidates like Fred, Barrack, John, Hillary, Rudy or Milt to allow the federal government to bail out the bad management decisions of big companies that went after market share and dramatic growth - loosening their underwriting guidelines for stated income borrowers (i.e. Countrywide, )? Are they promising to funnel taxpayer dollars to bail out people who wanted the Variable Rate Loans to buy the $500k home that they could not afford before? The foreclosure is just the real estate market correcting itself.
If today is a BUYERS MARKET in Real Estate - then logically, NOW is a Good Time to BUY! ...and there is a GOOD Solution as the NEW Mortgage Revolution begins - The Home Ownership Accelerator mortgage ...I'll get off my soap-box now and introduce Jason Clark - as this week's guest on ‘The Real Estate Story Hour.'
Jason Clark - an Account Executive from CMG Financial Services (a wholesale mortgage lender) and Steve Hickox started the show talking about Financial Discipline and the American Dream - owning your own home free and clear.
Our first caller asked: Has a brother (in WA state) who owns a rental home and wants to sell the property to his renter. He doesn't want to do an owner carry - just wants to cash out. However, the renters can not qualify for a loan. Do you have any options for them?
Steve had said that, he likes the brother's situation; having a good renter that is taking care of the property. There are so many times that's not the case. However, Steve pointed out the first thing to consider is some Credit repair/credit enhancement. It's going to take some time, but will get them moving forward to show they have financial discipline.
Dealing with a good mortgage broker that is a professional, to qualify them for a mortgage will understand their circumstances and know where to go for a good solution ...so, the suggestion for the brother is to be patient; reminding all of us to live below our means.
Jason concurred; saying that right now, everyone should first pay attention to your own credit. It is one step in being financially disciplined. Another step is not maxing out your credit cards while living paycheck to paycheck. When you create some savings, or have equity in your home instead of just making your monthly interest payment, it leads into good things. Shows your financial discipline, have positive cash flow, etc.
Steve also pointed out another option is to find a Co-signer for the loan.
Jason talked about the Home Ownership Accelerator mortgage (HOA for short) ...uses the money that sits in your checking or savings account (earning little interest at best) and pays down the principal amount of your mortgage. Using your positive cash flow, the HOA usually can pay off (compared to) a 30 year fixed-rate mortgage in about half the time. There's no special software, no outside management/fees or second mortgage is not needed.
Why would anyone use their entire checking/savings or entire paycheck to pay down the principal amount of your mortgage? What about the other monthly bills - credit cards, groceries, etc.? With the HOA, you have access to the equity in your house on a 24/7 basis by having unlimited checks and a ATM/Debit card ...the HOA is the only mortgage product we know of that allows you to gain back the money you just paid 1 day, a week, 5 weeks, etc. up to 90% of the value of your primary or secondary home. ...and it is all back by GMAC Bank - one of the nations Biggest Financial Institutions. Again, the HOA mortgage product is ONLY for people that have positive cash flow and the financial discipline to be their own bank.
The HOA has NO Minimum balance ...it is used as a sweep account - moving money from one account to the other as needed. If there is a positive balance in the checking account, it is moved over to pay down the mortgage. When you write a check or use the ATM - the money gets swept over from your mortgage account ...it's that simple.
The hardest question to answer is: What is the HOA monthly payment? There is no set monthly payment because it is based on your cash flow/financial discipline and account balance. If you want to check out our 5 minute video to explain this further - go to http://www.homeownershipaccelerator.net/
Steve did the same thing like the HOA a number of years ago for buying Fix & Flip properties, using a Home Equity Line of Credit (HELOC) as a second mortgage on his home. Anytime Steve would have some cash, or get people paying him their rent money, he would pay down the HELOC. But the down side of Steve's HELOC was having to re-apply every year; strict re-payment schedule and additional fees each year of the loan. The HOA is a 30 year line of credit and is not tied to a set repayment schedule.
The HOA works for three kinds of people with Positive Cash Flow:
•1) pay off the house as fast as possible (any kind of professional)
•2) investor ...(i.e. real estate, stock market, and business owners)
•3) reverse mortgage ...HOA allows a person before the age 62 to do a reverse mortgage
HOA is a Variable Rate mortgage product. It is tied to the 1 month LIBOR index - which is historically 1 to 2% under the Prime Rate. Currently, the Prime Rate is at:7.75 and LIBOR Rate is:5.5121 as of 10/1/2007 ...but with the news that the Fed Rate Cut could be up to ½ pt - Jason is thinking the 1 month LIBOR rate could be under 5% by the end of the year. HOA has a lifetime cap of 5 pts ...but the important thing is not to compare rate side by side with the Prime Rate - because the great thing about the HOA's benefit is using your cash flow to pay down principal first - and that dramatically effects the amount of interest you pay in the lifetime of the loan.
To really see the difference of how much interest you can SAVE using the HOA versus a 30 year fixed-rate mortgage - we have an loan simulator at: http://www.homeownershipaccelerator.net/
For more information about the Home Ownership Accelerator mortgage - you can contact either Castle United at: 866-901-9455 or visit the HOA web-site: http://www.homeownershipaccelerator.net/ to either watch the 5 minute video of how the HOA works; or, the loan simulator. Afterwards, you may want to JOIN the NEW Mortgage Revolution.
Our second caller's question: If I have a daughter going to college next year and we are thinking about buying a rental property in the town, is this a good time to buy real estate?
Great Question - Steve explained that college towns don't suffer the same volatility as the rest of the real estate market w/seasonal demand by students ...but this is also a good and practical lesson for the college student - to see and experience all of the things a rental property does ...cash flow, property management, collecting the rent, improvements/repairs, etc. Keep in mind, today's real estate is a buyers market ... finding the right deal - being patient & shopping are key to finding pretty good deals.
Steve asked Jason if people are considering this option - buy a second home, if that qualifies for the Home Ownership Accelerator mortgage? Unfortunately, Jason pointed out that in this case, it would be an investment property and is not eligible. The HOA can be put it on either their primary home or a second home. If you wanted to put the HOA on your primary home to finance the purchase of this investment property, that is possible and OK.
Steve talked about a Castle Commercial Mortgage - looking for new capital - contribute - for commercial loans: Fix & Flip loans and small construction loans - looking for people that want a higher rate of return - all mortgages/loans are made in Colorado.
Our third caller asked about Ski/Resort properties - Any Thoughts?
Steve said: Our analysis shows Colorado's western slope market due to the Oil & Gas development for at least the next 10-15 years (as long as the energy prices stay where they currently are) is a good appreciating real estate market. Ski/Resort properties tend to positively appreciate despite what the rest of national real estate market is doing; and are in constant demand from foreign investors (out of state) ...wanting a vacation home or rental property. However, Steve's hesitation is to these resort properties are hard to have them cash flow from seasonal rentals and property management fees.
Steve took some time to talk about Castle Commercial Mortgage - being a private money lender in Colorado; specializing in Fix & Flip Loans and small construction loans. Castle Commercial Mortgage is growing their pool of private funds and now has a cash-flow investment opportunity.
The minimum investment with Castle Commercial Mortgage is $50,000 ...liquidity? - with a demand letter, we can accommodate the request almost immediately - but the terms are current set at 30 days. For those people interested in investing in Colorado Real Estate, do not want the hassle of maintaining a property, nor want to look for renters, or have the ups and downs of the real estate market - this may work for you. Please call Castle United at: 866-901-9455 for more information about becoming one of Castle Commercial Mortgage's investors.
Many thanks to Julie, Denise, Milissa, Katie and Chris for your questions and funny real estate stories.
Listen and call the show with your questions or a Real Estate Story. Below is other some contact info of the show sponsors, bio and how to listen to past shows.
Until next time - We wish you much success & like to help you achieve it!
Steve Hickox - Real Estate Attorney in Denver, CO; seasoned Real Estate Investor (Fix & Flips); President of Castle United - including 1031x.com and Castle Commercial Mortgage Co. graduate from University of Colorado & law degree from Colorado State University.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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