Ad-Free Blog from Doug Crowe

7 Secrets to Selling a Property Today

Doug Crowe — Sun, 05 Jul 2009 12:01:26 -0700

IF YOU'RE LOOKING TO sell your home in a matter of days rather than months, you might want to take some tips from 32-year-old Mona Ross Berman.

To get her Washington, D.C., townhouse ready for sale, the interior designer went through every room, sweating the details. She rearranged furniture, added sophisticated coffee-table books and strategically placed vases and throw pillows to create a cozy environment. She then organized every closet to showcase her ample storage space. Finally, she removed all personal items, including her wedding photos, so potential buyers wouldn't associate the house with someone else. She made the property ‘Q-tip' clean (meaning that every nook, cranny, and air conditioning vent was cleaned and polished. "I think that if you can get a home to show well, it can get you [better results] than it really should," Berman says. Her strategy worked. Within four days of placing her property on the market, she had five offers in hand.

Long gone are the days when you can simply throw some cookie dough into the oven and get an offer for your house. Thanks to the Internet, home buyers are more sophisticated and demanding than ever before. Over 80% of buyers now pre-screen their selections, neighborhood, and pricing online before viewing a property. Your ability to convey the property through words, pictures, and value are imperative. At a bare minimum, would-be sellers need to dispose of clutter and make any necessary repairs. But to really make a property stand out from the crowd and sell quickly, sellers might need to do the following.

1. Hire an Interior Designer
A well-decorated home will sell faster and for more money than one that looks frumpy. That's why more and more sellers are hiring interior designers to do everything from rearrange furniture and paint walls a neutral color to rent artwork. This service, known as "staging," can cost anywhere from a few hundred dollars for a small job to several thousand dollars for high-end properties, says Patricia Dugan, a realtor with The Corcoran Group.

Experts across the country agree that the investment is worthwhile for most properties. According to recent data from Coldwell Banker, staged homes in the San Francisco Bay area spent just 25.3 days on the market and sold at the asking price, while "non-staged" homes languished on the market for 48.2 days and sold for 2% below the asking price.

2. Hire an Organizer
A lovely décor will get you only so far. To really get the buyers chomping at the bit, you need to highlight your home's storage space as well. That means everything should be clean and organized - closets, bathroom vanities, the garage and basement. It might sound trivial, but your home's sale really could rest on whether your linen closets can comfortably store your towels.

If you identify more with Oscar Madison of "The Odd Couple" than with Felix Unger, it might make sense to hire a professional organizer for $75 to $100 an hour. This is especially helpful for those who've lived in their homes for many years and don't know how to dig themselves out of the mess. Some organizers will even help run a yard sale that could end up paying for their services. If you're not sure how to find this type of service, ask your realtor. Most have a list of pros at their fingertips. As with all of these "extra" services mentioned, don't be cheap. You are probably selling a property worth hundreds of thousands of dollars! Trying to save a few hundred could easily cost you a sale and add months to your payments!

3. Hire a Photographer
Up to 74% of home buyers start their search online, according to the National Association of Realtors. Indeed, the Web has become such an important marketing tool that all the realtors we spoke with encourage their clients to hire a professional photographer, which can cost as little as $100, for their online snapshots. Think of it this way: If someone doesn't like how your home looks on the Web, he or she won't bother to make an appointment to see the property in person. Is that a risk you're willing to take?

While putting photographs online isn't exactly new, there are some emerging trends. Six years ago it was OK to have one outside shot of the house, says Tara Rogers, director of marketing for Real Living, a Columbus, Ohio-based real-estate firm. Now, some potential buyers want to see up to a 10-picture slideshow detailing multiple rooms before they commit to a walk-through, she says. Dare to post small, grainy pictures, and risk little foot traffic in your home.

4. Try Marketing Gimmicks
Despite impressive national home-sale figures, some local markets are starting to soften. For example, homes in the western suburbs of Boston are languishing on the market for 90 days and more after previously selling in just 15 to 30, says Nelson Zide, co-owner of ERA Key Realty Services, a Framingham, Mass.-based real-estate brokerage. Zide recently started implementing marketing gimmicks to increase the number of potential buyers to walk through his clients' homes. "I haven't done this in 12 or 13 years," he says.

What strategies does he use? Rather than slash the asking price, he might encourage condo owners, for example, to pay the maintenance fees for a full year, or ask home owners to provide buyers with a cash rebate that's marketed as a decorating allowance. Nine times out of 10, such gimmicks cost less than it would to drop the asking price enough to attract a buyer with a smaller budget, says Zide. It's just one more way to get a potential buyer excited about your home.

5. Hold Open Houses
The benefits of an open house are debatable. Industry experts agree that they tend to benefit realtors more than home owners. (After all, it's a great way for realtors to get new clients.) But that doesn't mean that they can't work. The key is to hold them at various times of the day and week so that folks with busy schedules can squeeze in a viewing. Real Living's Rogers says her company's agents make sure to schedule open houses on Saturdays, as well as in the evenings so people can stop by after work.

Another technique more people are implementing is to hold open houses at the time of day when their house shows the best. If you have a beautiful garden, show it off during the morning before the flowers start to wilt. If you have a stunning view of the sunset, make sure people get to see the late-afternoon light. In other words, if there's one thing that you love most about your home, be sure to share it with potential buyers.

6. Price it right
Most people have over-inflated views of their homes value. Be honest. Check with RECENT comparable sales. When properties were appreciating at double-digits in 2004 and 2005, you could get away with pricing yourself a bit high. Those days are gone. Take a reality check and see what the real market will bear. If you need to sell fast, you should be prepared to give up a bit of equity for a faster sale.

7. Treat it like a Business
With average home prices in the mid $200's it is curious that many realtors and homeowners, for that matter, take the subject of sales and marketing so casually. Many privately held small businesses have revenues that are in the mid to high six figures and they spend WAY more dollars to generate that revenue than the average realtor. But it's not just the money. Doug Crowe, author and speaker said, "It is more about the attitude. When you treat your property like a business, you are now open to hundreds of more marketing tactics and strategies than conventional home owners aren't doing." He cites strategies such as cross promotions, highly focused networking, and industry-specific referrals as strategies that 99% of home sellers don't even consider. In a recent case, one of his homes sold in less than a day because he hyped up the property and location at a church. The "mystery house" rumor was flying for a full 3 weeks before it even hit the market. "The buzz about this deal was so strong, we had a ‘stalker' come by the house before it was ready to sell and offer $30,000 more than what a realtor said it would sell for," quipped Crowe.

Sure, we all know the market is soft or downright depressed. However, it is not at a standstill. Only those home sellers who are standing still are not getting their houses sold. The aggressive, creative, patient and honest sellers are the ones who are moving property. Price it right, be hugely aggressive, and don't dismiss any idea that will bring in one additional buyer. After all, that one new prospect may be the future owner of that property.

dcrowe@themayanislands.com
630-890-3998

UNLIMITED Money for your deals

Doug Crowe — Sat, 27 Jun 2009 08:13:13 -0700

A common challenge to investing in real estate is not having enough cash to act quickly to take advantage of the deals you find. I would like to introduce you to a funding source from which you could easily and quickly draw upon funds to finance your investments. The Private Bank Concept is simple yet overlooked by many. For many investors, they simply have asked friends and family to invest in their deals. The professional method of raising money from other "cash rich" investors can be uncomfortable. However, most of these investors need and want safe, healthy returns on their money. YOU can be the opportunity they have been waiting for.

Recent estimates place over $4 trillion within IRAs, 401(k)s and other qualified programs across the country. These funds can become available to you through the utilization of self-directed IRAs and the proper application of these funds to profitable real estate deals. In fact, when you pass through all the hoops, IRA funds can be used for many different investments. The only challenge is an investment must pass the "tests" set forth by the government and not violate a few rules such as:

1. No management of the fund can be performed by the owner of that fund or his/her immediate family.
2. No personal guarantee can be placed on any IRA fund. Most loans are not qualified for IRA investing.
3. Profits from the IRA must stay in the IRA. To avoid penalties, distributions need to abide by IRA guidelines.

The "private bank" concept is borrowing money from an individual's IRA (not a financial institution) for investments. For example, an investor can borrow money from someone else's IRA to complete an investment and pay the IRA back an amount of interest that is agreed upon in advance. Since IRAs are an exempt entity, interest earned on the money loaned is tax-free or tax-deferred depending on your type of IRA.

Lending institutions, insurance companies and venture capitalists have been using similar concepts to raise money for years. By utilizing self-directed IRAs, you can apply this concept to your investments, allowing you to become more profitable and stay ahead of the competition.

Create Your Own "Private Bank" in 3 Easy Steps
The following is a real estate Private Bank example, but this concept can be utilized with other investments such as notes, tax liens, and private placements.

1. Find an investment property and negotiate a 75% or less loan-to-value ratio to give your investors safety for their investment. Build in enough gross profit to pay your investors an attractive rate of return. Remember, it's not the cost of money, but the availability of it, that is important. Finally, leave yourself enough time, through a contingency clause, to find your investors.

2.Present the deal to potential investors, including friends, family, business acquaintances and local professionals (e.g., doctors, lawyers, and business owners). It is important that you offer an attractive rate of return and explain the security they have in the transaction by offering them the first lien on the property. Remind your potential investors that, in addition, their returns will be able to grow in a tax-deferred or tax-free environment, depending on which type of IRA they have. Be sure to under promise and over deliver on everything you say. Utilizing their funds once is good. Having availability to their funds over and over again is brilliant!

3. Now that you have the investment and investors in mind, the final step is to open an Equity self-directed IRA for each investor.

Once your investors have established their accounts, and the particulars of the investment have been agreed upon, you are ready to utilize these funds for your investing strategy.

"Private Bank" Advantages

· Allows you to participate in more deals

· More deals = More profits

· You are able to offer cash for investments to receive deep discounts

· Beat out your competition

• Free up personal money for personal needs

What You Avoid by Creating Your Own "Private Bank"

· Lengthy committee approvals

· Bureaucratic red tape

· Potential credit risks

• Tying up your personal funds

For more details on earning double digit returns on your money (IRA or otherwise) contact Doug Crowe at dcrowe@themayanislands.com.

Swiss Banking Secrecy Laws EVAPORATING!

Doug Crowe — Sat, 27 Jun 2009 08:10:04 -0700

Switzerland and the United States have agreed on a new Tax Information Exchange (TIA) Agreement, a further erosion of offshore banking secrecy. The new agreement will allow the U.S. greater access to banking records regarding Americans with Swiss accounts. Americans who have relied on offshore secrecy to avoid getting caught by the IRS need to re-examine their strategy. IRS guidelines require citizens to pay taxes on all their worldwide income.

Many issues remain about the agreement: whether it will be narrowly tailored to requests regarding specific people, or more general fishing expeditions, like the ‘John Doe' summons the United States is presently seeking to enforce against UBS. It is also not known whether the new TIA will only be prospective, or whether it will require disclosure of past accounts. The agreement will be subject to public referendum in Switzerland, where challenges to traditional banking secrecy have met with vigorous defense.

Another open issue is whether the new agreement will result in the IRS dropping its litigation against UBS, demanding the disclosure of 52,000 accounts. The Swiss have indicated that the new agreement will effectively settle that case, while American officials state that the litigation will continue and the IRS will pursue disclosure of the offshore accounts.

In light of these events, Americans with non-compliant offshore accounts should consider voluntary disclosure before the IRS discovers their accounts. The IRS is offering a sort of amnesty to taxpayers who voluntarily come forward before they are discovered. The IRS' Voluntary Disclosure Program offers reduced penalties and a promise of no criminal prosecution. This program expires in less than three months and will not apply to taxpayers once the IRS gets their names.

Pre-emptive disclosure can be made by qualified legal counsel, experienced in offshore compliance and IRS negotiations. A qualified law firm can approach the IRS on your behalf, demonstrate proper current compliance and negotiate to avoid criminal prosecution and reduce fines and penalties for past non-compliance. Although fines and penalties may be significant, they pale before the consequences of an IRS criminal prosecution.

Smart investors have always complied with the IRS regulations and used the proper loopholes to legally pay as little as possible. Solutions include not moving your money back and forth offshore which is a huge red flag, but to simply grow it offshore in real estate and then leave the equity there. If no liquidation of assets occurs, then no income is derived and no tax consequences occur.

Specializing in legally reducing your taxes is actually quite simple, once you become a worldwide citizen. The country of Belize, a tax haven that CONTINUES to respect the privacy of its bank account holders is one of my favorite places to invest in ocean front real estate. For details, contact me at dcrowe@themayanislands.com.

Investor Assessment: Credit & Attitude

Doug Crowe — Wed, 24 Jun 2009 09:11:31 -0700

This assessment is designed to assist the investor in analyzing not only their current situation, but help in determining what path they can take towards moving yourself towards financial freedom. The questions, scoring, and analysis are subjective in nature.

Circle ONE number for each line. Rank yourself based on where you think you are today. Be frank with your answers. Everyone's credit, cash and experience level increases as they move forward. Nobody starts with a home run and $1 million in the bank. Your score will increase in the very near future.

Credit Score 599 or less 600-620 620-679 680-700 700+

Credit Score 1 2 3 4 5

Cash <$1000 $1000-$10,000 $10,000-$50,000 $50,000+

Cash 1 2 3 4 5

Credit lines <$10K $10k-$50K $50K-$100K $100K+

Credit Lines 1 2 3 4 5

Confidence 1 2 3 4 5

Credibility 1 2 3 4 5

Belief in Yourself 1 2 3 4 5

Education 1 2 3 4 5

Experience 1 2 3 4 5

Creativity 1 2 3 4 5

Credibility w/others 1 2 3 4 5

TOTAL ____________

Rankings:
5-30 You are a beginning investor...nearly everyone started here.

31-40 You have a great head start. Continue to build your network & knowledge

41-49 You have high confidence. Be careful of being too comfortable.

50 Your overconfidence is amazing. Why are you even here?

The world of real estate can be exciting, profitable, controllable, and yes, even a little frightening! What you are about to hear, see, and experience you might have heard before. Or perhaps one or two of the ideas, tricks, and strategies might be brand new to you. In either case, you will find that if your mind is open to learning, you will always learn something. If you are skeptical, that is fine. A healthy dose of skepticism is important! Without it, your loses could outpace your gains!

Our purpose with this worksheet is to give you some new insight, ideas, thoughts, or some inspiration to accomplish what YOU want. You are encouraged to keep your skeptical mind active and aware, but staying open-minded will allow you to learn something valuable.

For most of us, the idea of a better life is on our minds quite often. If you've ever thought about a nicer home, owning your car without a payment, or a vacation in the tropics without worrying about money, you are not alone.

If you are already at a point in your life where you are "comfortable" but simply want to lock in a solid retirement plan, or push the limits of your financial status, then welcome...real estate, as a vehicle, has accomplished this and more for many people.

In order to change ANYTHING in your life, including finances, you must not only make different decisions, but you must change the way you think. Your personal beliefs about money, real estate, the market, and your capabilities are based on your personal background, personality, life's experiences, and dozens of other major influencers in your past.

"A person who learns how to change can create their own destiny. All others are doomed to a life controlled by others."

-Doug Crowe

Take CHARGE of those things which influence your thinking, behaviors and actions. Associate with like-minded, successful, and responsible people. They can make a significant difference in not only how you think about money, real estate and wealth, but the association you develop will bring to you more opportunities for finding deals, associates, and financing.

When you look for what could go wrong with a deal, you will always find something. When we say to ourselves, "I need more education before I make my first offer" we forget that TRUE education comes from applying what we learn, not the raw knowledge itself. Of course, it is important to know the basics. It would not be prudent to go out and expect to make money in real estate after simply reading one book in an afternoon. Expecting to become a millionaire in a weekend is ridiculous.

However, the bigger danger lies in substituting an excess amount technical knowledge for practical knowledge. Go to any real estate investment club and you will meet people who have attended 2 or more boot camps, have read a dozen or so books, and have been deluded themselves into thinking they are investors. They may have been "thinking" about investing for 2 or more years and have yet to get out and make an offer. If this is you, don't despair, however. ALL investors, no matter what their experience, had an "incubation" period where they absorbed knowledge before going out into the marketplace. This period can be anywhere from a month to a year or more. This does NOT mean that you are doomed to become a seminar junkie. But after a while, it becomes painfully clear that more technical knowledge is not the answer. The REAL problem is our fear.

Conquering your fear

If you think you are alone in this dilemma, think again. With over 1 million investors in the United States, there is not a single one who didn't show concern, worry, and doubt over his/her first deal. Everyone has doubts. Your mission is to conquer those doubts by reducing or eliminating as many risk factors as you can. This is easily accomplished with the following basics:

Due your due diligence. Nothing compares to crunching your numbers 2 or 3 times, and then running them past a more experienced investor.
Have a plan "B." When markets or financing changes, you need a back up plan. Without a backup plan, your are opening yourself up to risk. If you can't sell your rehab, you better be ready to rent it. If you don't have the financial cushion to be a landlord, you better get one BEFORE you start the rehab.
Take action. The paralysis of analysis is the single biggest killer of wealth in this country. Due diligence is important, but without action, it is a wasted exercise.
Be accountable. Even Michael Jordan had a coach. Putting your plan into action all by yourself is foolish. Plan your business thoughtfully. Think big. Take small steps and get moving! Counseling with successful people will save you millions.

Successful people got where they are because they think and act differently than unsuccessful people. Their attitudes, actions, beliefs, and even their friends are different. There are people (even relatives!) who always look at what could go wrong, instead of who look at what could go right. When you have a mentor who believes in you and encourages you to grow, change, get out of your "comfort zone" and go for it, you will definitely experience new opportunities. The risk will always be there. How we manage that risk is a critical component. It is important to perform due diligence and "crunch the numbers" on your opportunities. But all too often, we look back on all the opportunities we missed, instead of reaching out and working towards those that lie ahead.

The 8 Biggest Mistakes in Offshore Real Estate...and How to Avoid them!

Doug Crowe — Wed, 16 Jul 2008 21:19:06 -0700

It doesn't matter if you are a broker, agent, loan officer or an investor, what you DON'T know exceeds that which you DO know when it comes to investing outside of the United States. For most people, this "unknown" is enough of a hindrance to prevent us from enjoying the tremendous upside of investing abroad.

If you have watched the real estate markets for more than a dozen years, you've seen ups and downs before, of course. Why is it then, that THIS particular downturn seems different? Is it the rapiddecline of values? Was it the news that Fannie Mae and Freddie Mac were in trouble? Even the most optimistic agent or investor understands that the majority of potential buyers currently suffer from a "deer in the headlights" approach to real estate. Many investors and Realtors are frozen with fear and indecision regarding how to clearly capitalize and thrive in the current market.

Some savvy investors saw this downturn coming years ago. Many did not. Those that did already made the shift in their strategy, marketing, sales and investments to use the slump to their benefit.

You can too.

We all start with the premise of not understanding enough about foreign markets in order to make a decision. Therefore, the ONLY decision you can make right now is to the decision to learn about how, where, and why to invest abroad. The fears most people have are normal, but they do not have to prevent you from expanding your reach, diversifying your portfolio, and earning tremendous returns for yourself and your referrals.

Investing offshore can dramatically accelerate your retirement plans and give you the opportunity for a tax-haven previously known only to the ultra-wealthy.

There are several KEY factors that one should consider to set themselves up not only to survive this market, but to thrive big time.

A. When one area of the world has a slowing economy, often there are areas which thrive in relation to it. (weakening US dollar, etc.)

B. Ultra wealthy investors don't participate in the financial markets the same way the average person does. They don't necessarily "cheat" but they do set their own rules.

C. Fear and ignorance of IRS rules keeps most people from even learning how offshore investing/banking/finance works.

Nearly half of ALL equity funds are not marketed in the United States. The stringent rules of the SEC have made it too expensive for many companies, funds, and securities to be marketed in the USA. Most people are unaware that there are savings accounts available with double digit returns in other countries. US citizens are unaware because those banks are not allowed to advertise in the USA.

When it comes to investing in real estate beyond the borders of the USA, these same issues are compounded by fear, lack of knowledge of foreign exchange rates, governments, culture and language.

When one opens their mind up to the possibility of investing in foreign markets, these limitations begin to fade away. Once the limitations are gone, the opportunities are sure to keep you awake at night with excitement! The possibilities of secure wealth, lifestyle, and a reduced tax-burden are enough for anyone to "get in the game," learn all they can, and get started!

Here are the 8 things to INSIST upon when it comes to investing abroad:

1. Government. After speaking with hundreds of investors, the question of banana republics and dictatorships comes up a lot. When you preview property in a foreign land, check out the history. How did it become a republic? Who was in charge before? What legacy did the previous government leave behind? No matter who is in charge now, there are ALWAYS people and power centers left from previous administrations. Be sure to work with countries with a long history of stability.

2. Tax Haven.It is important to not only work with democratic governments, but ones that are friendly...very friendly to foreign investors (That's you!). In the USA, if a banker does not disclose private information to the authorities upon request, they can be prosecuted. In tax-haven friendly countries, the opposite is true. If a banker reveals private information to the authorities, the BANKER can be prosecuted! A low or non-existent tax rate for foreign investors is preferred. Any lack of banking privacy is a non-starter. For example, in November 2001, the Cayman Islands concluded a tax information exchange agreement (TIEA) with the U.S. that provides for exchange of information relating to U.S. federal income tax.

3. Land Ownership. US land owners take for granted the idea of property rights. Even countries based on English common law don't have the same protection that we take for granted. Visiting the Turks and Caicos, I found that deeds are the responsibility of the crown and not supervised by a third party. A US-based title insurance company is best for security, peace of mind, and reduces the learning curve. Mexico, for example, requires a foreigner to co-own property with a domestic person or entity. Yuk!

Equally important, does the developer "own" the land? Not only on title, but what about encumbrances? Select developments where the land is paid for, that way, any delays in development won't compound the developers' finances.

4. Team. A project is only as solid as the team behind it. When it comes to getting permits, title, surveys, and entitlements, does your project have a manager who is local? Do they have an inside track on the national, regional and local regulations? Does the project manager have friends in the government? Is the developer perceived as a foreigner or a local? Are they using local labor? Is the master plan designed by professionals? Are there any sales? Analyzing the team is as important as understanding the project and you must know WHO you are dealing with.

5. Language & Culture. Going offshore means you WILL be experiencing a new culture. The only way to become comfortable is to understand that culture, accept the differences and embrace the common elements. With regards to language, be sure you speak it. Using a translator is inefficient and dangerous. Contracts not written in a language you understand is like playing with fire. Even if the contract is bi-lingual, in a court of law, the dominant language is the one that will prevail.

6. On-site Visit. In order to truly understand a project and the opportunity, an on-site visit is a must. As an investor, I would never trust an agent who had not taken his time and money to travel to the project and "put their feet in the sand." As an investor, it is a great tax-deductible trip...and gives you first hand knowledge of the area, people and project.

7. High-end usage. Many investors start out with affordable housing rentals as their entry into the market. It appears less expensive, but management headaches are going to be high. When investing abroad, it makes sense to cater to people of high net worth. They travel more, sale prices and rents are higher, and the wealthy are immune to economic swings. With proper management in place, upper-end properties are safer and more lucrative.

8. Location. Yes, the old adage, "Location, location, location" is still true when investing in other countries. Understanding values, appreciation, and market demand is very similar to what we do when performing due diligence in the states. For an extra layer of comfort, be sure to invest in properties that not only have great locations but have stellar locations! When investing in tropical areas, be sure to check out the neighbors. The Caribbean is known for having beautiful resorts residing next to dilapidated shacks. Proximity to activities, shopping, and services is important, so be careful if you find that perfect private island getaway! If it is too far from civilization or any amenities, demand could be weak.

BONUS:

If you truly want to make a TON of money in this marketplace, you need to invest in it yourself. Nothing compares to the credibility of being an owner AND an agent. By owning a part of the project yourself, you set yourself apart from all other agents/ Your referral commissions can increase exponentially when you have not only taken the time to learn about a project, but have the confidence to invest in it yourself.

I love my country and like having more than one child, I have learned to love other countries as well. Foreign real estate investment and ownership has more...more growth, more tax advantages and more lifestyle. Now is the VERY BEST TIME to learn more, and take action!

For more information, details or questions, contact me at
dcrowe@themayanislands.com or call 1-630-890-3998.

New Investment Fund Targets Foreclosures

Doug Crowe — Fri, 11 Jul 2008 23:03:38 -0700

Vulture funds, as the name suggests, swoop in and buy bankrupt companies and then sell them with a profit in mind.

Now a similar investment fund here recently formed to target distressed or foreclosed properties - whose numbers continue to rise each month.

Northbrook-based Hilco Residential Partners LLC is a new residential real estate investment fund chartered to purchase residential homes, mortgages and unsold developer assets directly from lenders. The group debuted recently as a joint venture between Hilco Real Estate LLC and Real Estate Principal Solutions LLC. One partner will buy and the other will market the properties to sell.

Hilco intends to buy foreclosed homes from individuals, lenders and builders, such as Warrenville-based Neumann Homes, a home builder that filed for bankruptcy late last year.

Lenders and developers are not generally the best equipped to manage properties, so it might make sense for them to sell assets to a firm that specializes in managing the properties over a longer period, said Robert Korajczyk, a finance professor at Northwestern University.

"In essence, these firms are providing liquidity to lenders and developers," said Korajczyk. "The lenders can now use that capital to make further loans rather than having nonperforming properties on their balance sheets."

Unlike other investment funds focused on acquiring distressed mortgages and unsold developer assets, Hilco Residential Partners has an infrastructure that enables the fund to acquire, locally manage and market properties on a national basis, said Hilco Real Estate Vice President Navin Nagrani.

"We've been talking to a large number of lender s about their situations," Nagrani said.

The types of properties that Hilco is targeting are: single-family and multifamily properties, condos and senior housing; closeout units in a residential development, to provide immediate liquidity for the builder; and nonperforming notes on single-family and multifamily projects, including 90 percent or more completed projects. This aims to free lender capital and relieve reserve requirement pressures, said Nagrani.

"There are an incredible number of lenders out there that are struggling with assets that aren't performing," he said.

Nagrani declined to say how much money his new group has available for such purchases. But he's already acting as an adviser to two large home builders, Neumann Homes and Levitt & Sons in Florida.

Few such investment funds in the Midwest are capable of buying entire property portfolios, such as Hilco's new group. "Very few firms can pull this off," said Doug Crowe, director of Lombard-based Springboard Group, a real-estate investor education academy. "It takes a high level of investing."

NOTE: I spoke with Anna (journalist for this article) and contributed to the content. She was surprised to hear of the term, "vulture fund." While it might not be a flattering image, vultures are part of nature...they clean up the mess and get rid of the rotting corpses.

This analogy couldn't be better. As the mortgage and housing issues escalate, we need reputable money funds to go and pick the bones of the bloated corpses of greed. Don't worry about the market, I say. the opportunists will quickly take care of the foreclosures. The only downside is the recent news about Fannie Mae and Freddie Mac being in trouble.

A government bailout is a sure thing if they bleed any more. In the end, the taxpayers simply take it...in the end!

What Book Are You Reading Right Now?

Doug Crowe — Tue, 08 Jul 2008 11:34:12 -0700

It has been said that who we are is largely determined by the people we associate with and the books we read. Activerain has proven to be a valuable and popular portal for our community. In addition to our connections locally, our online community is pretty robust. What about the books you read? What is your favorite? How did it influence you and why?

I am listing a few of my favorite books here, along with author and ISBN number. Each of these books has had a direct, measurable and significant influence on my business, personal, and social life. I am adding a few comments after some of the books, others are good, but I didn't want to spoil the ending!

Seriously, I could write an entire article on each one, professing the millions I've made because of the information or the incredibly rich relationships I've created because of how it impacted my life. In any case, I hope you make the time to pick up one or two of these, give it a read and equally important, pass it on to your child or someone else...a book on the shelf is useless.

How to Win Friends & Influence People Dale Carnegie 0-671-72365-0

This book helped to shape my personality at an early age. I went from being a shy, nerdy guy to the high school homecoming king! Thanks Mr. Carnegie!

Endless Referrals Bob Burg 0-07-008942-6

If you only have time to read 2 books, make sure this is one of them. I have had Bob come out and speak to my group, and I can honestly tell you, his stuff works! When I was in the wireless business, I cold called for 3 weeks. After reading his book, I was the #2 salesman at the company for 3 YEARS! (Without making another cold call the rest of my life)

How to Have Confidence
& Power in Dealing w/People Les Giblin 0-13-410671-7

If you or someone you know is ever a bit insecure in negotiations, public speaking or just needs a boost, this is a terrific, older book.

You Were Born Rich Bob Proctor 0-9656264-1-5

Maybe out of print....check www.half.com it is the predecessor for "The Secret" LOVE IT!

The Magic of Thinking Big David Schwartz 0-671-64678-8

A must for anyone. This book can do more to create prosperity consciousness than any other book I've read. A terrific book that you and your kids simply must read at least once.

High Probability Selling Werth & Ruben 0-9631550-3-2

If you are a salesperson who appreciates fresh ideas, this is it! So many sales books are written at a time where advertising actually worked! Networking, connections and creating the proper environment are so much more important than "closing techniques." Give this to your sales staff and watch your numbers soar.

Think & Grow Rich Napoleon Hill 0-87980444-0

A classic. The secret is in the title!

Rich Dad, Poor Dad Robert Kiyosaki 0-96438561-9

I've interviewed Robert on my radio show a few times. His stuff isn't loaded with detail, but is a good, fresh perspective on common misconceptions and beliefs about finance, money, and business.

Cashflow Quadrant Robert Kiyosaki 0-9643856-2-7

A good follow up to his first book.

The Millionaire Next Door Thomas Stanley 0-671-01520-6

Not the easiest read, but the concepts are important (especially if you have teenagers!)

How to Negotiate Successfully in Real Estate Tony Hoffman 0-671-49775-8

Spin Selling Neil Rachham 0-07-051113-6

How to Manage Residential Properties John T. Reed 0-939224-25-9

How to Manage Real Estate Successfully-in Your Spare Time Albert J. Lowry 0-671-24829-4

Landlording Leigh Robinson 0-932956-16-5

Nothing Down for the 90s Robert G. Allen 0-671-72558-0

Tips & Traps When Selling a Home Robert Irwin 0-07-141830-X

How to Make Big Money in Real Estate Tyler G. Hicks 0-7352-0116-1

Fix It and Flip It Hamilton & Hamilton 0-07-142148-3

Real Estate Loopholes Kennedy & Sutton 0-446-69135-6

Why Aren't You Your Own Boss? Edwards & Economy 0-7615-1537-2

Nickerson's No-Risk Way to Real Estate Fortunes William Nickerson 0-671-55143-4

Personality Plus Florence Littauer 0-8007-5445-X

106 Mortgage Secrets All Home Buyers Must Learn Gary W. Eldred 0-471-26395-8

There are dozens and dozens of other books that I have read, applied and truly enjoyed. I hope you pick one of these up at your library or bookstore this week.

Doug Crowe
www.dougcrowe.com

"To Know and Not to Do, is Not to Know"
-Anonymous

Offshore Can be Safer than Onshore

Doug Crowe — Thu, 03 Jul 2008 13:03:56 -0700

In my 22 years as a real estate investor, I have seen residential, commercial, industrial, mixed-use, and hospitality products rise, fall, slide sideways and return healthy returns for the investors. The United States and the real estate market that supports our economy is the foundation for the majority of wealth in the world.

Until now...

The dark clouds on the horizon are nothing new if you are over the age of 40. You've already seen a recession or two, a couple of wars, and lines at gas pumps. What makes 2008 different? Won't we recover in a few years like always? Isn't the current decline of the housing market, stock market and increased job loss part of the cycle our economic professors told us about?

Micro and Macro economics aside, there are looming megatrends which are making predictions of a typical recovery harder to predict. History repeats itself. When you study the Roman, British, and Chinese empires, one has to admit that the USA is clearly losing its status as the dominant economic superpower. The meteoric rise of China and India, will overwhelm our spending and investing for the next hundred years. The United States has set itself on a course of self destruction largely due to our short sighted behavior, lack of savings, dependence on credit, and isolationist attitude.

I love Americans. I love my country. When you travel the world, however, you see that the rest of the world is growing, thriving, and expanding, while the USA staggers around and assumes that we'll grow out of our slump like have during all previous recessions.

This time is different.

With the exponential increase in energy costs, the price of nearly everything is increasing. Coupling inflation (Wow, we haven't been afraid of that for a while!) with our credit markets and the expansion of China and India delineates our power, prestige, control, and ability to recover. China will dominate the world economy in our lifetime.

The value of our own dollar has crashed over 40% in the past 5 years.
As of 2005, over 21% of our GDP was in the financial service segment.
Housing values have dropped 5-30% across our nation.
Foreclosures are higher than they were during the great depression.
Blah, blah, blah....

Other areas of the world are seeing tremendous growth. Nearly 50% of all equities are NOT US-based. In fact, since they don't register with the SEC, you will never even know about them. You see, there are strict laws about marketing monetary instruments to U.S. citizens...if it doesn't pass approval, you can't know about it. Ever hear of a 14% CD? I'm not talking about 1980, but right now? They are available, just not to US citizens. You have to be a "world" citizen to know about them.

Do you know of countries where the real estate has appreciated 36% in the past couple of years? "World" citizens know of areas where the economies are MORE stable than those in the USA and have STRICTER banking regulations that actually make their investments safer. Remember the Savings and Loan bail out of the 80's? People with $100K or less in their accounts were insured. But, if you had more than that, you lost-big time.

There are hundreds of opportunities in as many counties that are flourishing and whose economic base has not been hijacked by misguided governments and financial corporations. Unfortunately, seeking these out takes more than a casual look on the internet. Worse, your financial advisor is not ALLOWED to even know about these opportunities.

In the coming months, as I travel the world, I will be sharing these with you in the only format I can...a travel log. By sharing with you my currency trading platform (That gives me 5-12% ROI PER MONTH!), international CD's in the double digits, and other offshore investments, you will discover that the world is getting smaller, and it's high time we all wake up and become wise to what is happening beyond our borders.

There is nothing scary about investing internationally. The main hurdles will be getting over the fears that our own government and entrenched financial institutions have placed upon us. It is up to you to seek out the truth...not from advertisers, but from the very individuals who are living the dream. I will be introducing you to my friends; friends who have Swiss bank accounts, trade currencies safely, and invest in countries where the currency is strong, and the real estate values are growing. Stay tuned and keep your eyes open.

Doug Crowe
www.dougcrowe.com

How to Interview a Realtor

Doug Crowe — Wed, 02 Jul 2008 07:57:08 -0700

By Doug Crowe
www.dougcrowe.com

Before talking to Realtors, its best to know what YOU want. Make sure you have established a CLEAR goal of the type of property you are looking for, the geographic area you are targeting (based on your customer needs) and the price range. You are positioning yourself as a professional. In order to get OTHER professionals to want to work with you, you must portray an image of experience and confidence (even if you are just starting). So often, we hear of Realtors qualifying the buyers. This is understandable, of course, because they need to be sure to bring a qualified buyer to the table. If they did not, they would certainly waste precious time showing the wrong properties to the wrong people. Therefore, we need to take care of this phase rather quickly. From the outset, you must establish that you are NOT a typical buyer. Within the first few moments of the conversation, the best tactic to employ is to answer the qualification question BEFORE it comes up. It makes total sense to talk to the BROKER, first. The owner/manager/broker of the office knows all of the agents and is best suited to assist you in connecting you with the RIGHT agent. The largest numbers of agents are ideally suited to work with the typical home-buyer and NOT an investor. You must do everything in your power to avoid wasting your time talking to agents who are not trained, nor have the aptitude to deal with the investor mindset. Here are a couple of tactful and powerful phrases you can use:

"Mr. Broker, my team is purchasing about a property or two each month for our portfolio. We pay all cash, and our contracts will never contain a mortgage contingency. With that in mind, we also expect to purchase somewhat below retail price, which agent would you recommend for us?" "Mr. Broker, my business relies upon buying fixer-uppers and selling them within a few months. In order to do this, I am looking for an agent who can help me find those handyman specials, and has the ability to sell them for me. The only possible challenge is that we work fast, and need to have our agent match our pace. Qualification is not an issue, as all of our offers will be 100% cash without any mortgage contingency. Which agent would you recommend for our needs?"

Let them know that you are a serious buyer and that any time they invest with you will not be wasted, as long as they are professional and can provide you with excellent, quality investments.

Here are a few "pointed" questions:

How long have you been a Realtor?
Do you work with other investors?
What do you like about working with investors?
Other than the MLS, what methods do you use to find properties?
I am going to focus on an investment strategy that allows me to establish some instant equity by buying properties strictly from motivated or distressed sellers-do you work with such sellers?
What type of profits/deals have you been able to achieve for your other investors?
How many investors do you work with?
Do you have any references from investor/buyers?
Do any of these investors rehab properties?
Do they also re-list the homes with you or your office after the rehab is completed?
Are you an active investor?
- If yes, are you in the buying mode right now?
- If yes, how do separate what you buy from what you bring to your other investors?
- If not, where would you invest right now? Why?
If we enjoy working together, what would I have to do to get my name at the top of your investor list?
It sounds as though we can make a bunch of money working together, let's set a time to meet so we can discuss our mutual goals in person, would next Tuesday at 2 PM work?

By being upfront, engaging, and cordial, you will not only develop rapport and respect, but you will eventually build long-lasting relationships that are a vital part of your financial future as a real estate investor. Using Realtors doesn't cost you money-it saves you money.

Doug Crowe
www.dougcrowe.com

Financial Health: What are your symptoms?

Doug Crowe — Wed, 02 Jul 2008 07:50:34 -0700

By Doug Crowe
www.dougcrowe.com

Money, credit, and living...it seems that there are seasons in our lives where there is often more debt than income. This can create stress, anger, indecision, and sometimes poor decisions. If you find yourself in a situation where there is more debt than income, you may be headed for trouble. It is never too late to fix some of your challenges. However, time is NOT on your side. The more you do to attack the situation early on, the better for you in the long run. Take a look at the three stages of financial trouble, assess where you are and take ACTION NOW!

The checklist below will help you to take an unemotional look at where you are and where you are headed. Financial challenges are a major cause of stress, divorce, and heartache. Your situation, while unique to you, is not uncommon. Millions of Americans are one or two paychecks away from bankruptcy and the skyrocketing foreclosure rate is at its highest point since the great depression.

While these statistics might not shed any light on YOUR living needs for today, the following checklist and action steps might help to delay or even cure your financial woes. Remember, above all else, you cannot solve a permanent problem with a temporary solution. All financial struggles relate around three simple issues:

· Income (How much you earn or bring in)

· Expenses (What do you spend and how do you manage those expenditures)

· Credit (Your ability to borrow and REPAY your obligations)

INCOME
How much you earn is often viewed upon as a decision by an employer. You can ask for a raise, work more hours, but for most people, "the man" determines how much you earn, where you live, what kind of car you drive, and where you vacation (If at all). For many people, this is simply an accepted fact of life. For others with an entrepreneurial personality, they have more control over their income. If an entrepreneur wants to earn more money, they can do more work, roll out a new product, or otherwise try to affect the level of their income. They are called entrepreneurs because with this variable income stream comes risk. Employees normally don't have the risk of wide swings of income, and with that security comes limitations on income. Sales professionals who work for companies also share the risk/reward curve of entrepreneurs and have a greater degree of control for their income.If you are an employee, you should continually ask yourself WHAT you can do to get a raise, promotion, or get more hours in to create more income for yourself. There are many books on this subject and it behooves most people to reflect and review their job and career at least on an annual basis. Taking control of your income can be frustrating, liberating, or downright exhilarating. The operative phrase is "taking control." Without control, you will always be at the whim of the economy, the company or your boss.

EXPENSES
When it comes to expenses, studies have shown that most people do not have a formal or even an informal budget that they live by. Most Americans simply spend what they earn (or for many, they spend MORE than they earn!). The attached budget should be filled out by anyone who wants to get a handle on their expenses. By tracking ALL of your expenditures, you can find areas for savings. Many people use their budget skills as a hobby. Clipping coupons and shopping for bargains not only makes fiscal sense, but it can be fun, too!Use the budget process to understand your spending habits and take ACTION on what habits you can modify, replace, or cancel. Not knowing where you are is a fatal mistake most people make when trying to affect any change in their financial health. Just as it is impossible to plan a trip without a starting point, planning to create and stick to a budget is fruitless without an honest evaluation of where you are today.

CREDIT
The largest "double edged sword" on this list is your credit. For those people who have mastered their credit, they can live a bountiful life by paying off consumer debt and carefully employing asset-based debt. Knowing the difference and being judicious with both of these instruments can easily make or break a family fortune. Simply stated, consumer debt is any debt that used borrowed funds to purchase items that are expendable or depreciate in value. This includes food, rent, vacations, consumer goods, automobiles, utilities, etc. When a person borrows money for an asset that depreciates or disappears, depending on the rate they are being charged, end up paying 1.5 to 2.5 the value of the goods or services. Look at any financial statement on a car loan and you can easily see how that $20,000 vehicle cost you over $40,000 during the life of the loan. With items that are consumed, the price is infinitely higher. Cut back or eliminate all debt associated with consumables or any item that depreciates in value. From a pure mathematical point of view, it can save you hundreds of thousands of dollars.

PHASE I
"Financially I'm not feeling very well"
Symptoms

No savings
Living paycheck to paycheck
Using one credit card to pay off another one
Credit scores have dropped recently
Large unexpected expense arose

PHASE II
"Financially I'm very ill"
Symptoms

I'm late with a rent or mortgage payment more than 30 days
I have recently had service (phone, utilities, other) turned off temporarily
All my credit sources are tapped out (credit cards at maximum)
Credit scores are so low, I cannot establish new credit lines
Large lapses in income

PHASE III
"My finances are on life support"
Symptoms

Notice of default or behind on payments 3 months or longer
Feelings of hopelessness
Thoughts of drastic solutions (lottery, arson, etc.)
Illogical denial of the situation

Treatment & Cures
Save some amount of money each month. Start with $10 and lock it away. Do this every month and develop a HABIT of saving some amount of money. While the amount may not affect your situation immediately, the habit can. Next year increase that amount by $10 more dollars and before you know it, you will have a savings account worth thousands of dollars.

When living paycheck to paycheck, people find the strategies of savings and budgeting extremely difficult. By developing the savings habit, you will be forced to give up $10 of expenditures. The choice of that sacrifice will be yours. It could be 2 packs of cigarettes, a lunch or taking a walk once a week instead of driving a car. The effect will be small, financially, but the habit of reducing your expenditures will become one of control. Your first few months may be painful, but eventually, you will embrace the habit and use it as a force to grow your financial intelligence. Earning a raise, maneuvering for a promotion or getting new training for a new position will also help to set you up for an increase in pay, of course. However, most Americans spend every increase they get, so be sure to develop the budget, start the savings plan, and manage the expenses before and during your journey to increasing your income.

Paying off credit card debt should be a crucial goal for everyone. When that debt is associated with consumables or depreciating assets, the objective should be to:

Restructure high-interest debt to low-interest debt
Pay off that debt entirely
Use a debit card OR develop the habit of paying off your cards EVERY month
If you are unable to develop either habit in #3, you should lock away your cards and use them only for emergencies

Understanding and improving your credit scores takes time, patience and perseverance. Prompt payment is a sure way to keep your scores high and your ability to borrow healthy. If you think you will have to be late with any payments, the best time to notify the creditors is BEFORE you are late. Often times, creditors can defer payments for you. But, they almost never do this after the fact. Open communication and responsible, honest communication is the key to success.

Improving your scores can be done over time. Visit the following sites and get a FREE credit report from each of the three agencies; www.experian.com, www.transunion.com and www.equifax.com. Get help from your banker, accountant, or other trusted advisor to understand and interpret what is on there. The key to improving your scores is to get the bad information off of your report. Check for inaccuracies, old data, and wrong addresses. Identity theft is rampant nowadays and reviewing your history is important. You can dispute any bad or negative information to the bureaus. The fair credit reporting act states that a creditor must respond to your inquiry and prove the information is valid within 30 days. A clever trick often used by consumers is to dispute EVERY piece of bad information the day after Thanksgiving. Since the 30 day period between Thanksgiving and Christmas has many people taking time off, and the postal service often slows, many negative items on reports get deleted simply because the creditors can't respond in a timely fashion.

When it comes to the psychology of financial trouble and foreclosure the devastation can be tremendous. A majority of divorces occur because of financial issues and the tension caused by these woes spill over into nearly all areas of life. Most experienced business owners will tell you that life is not about the ups and downs, but how you manage the frequency and pace of change. It is never a matter of "if" a challenge will show up...it will. All that matters is the attitude and plan you have in order to cope with those issues. Ask anyone who has recovered from cancer about financial stress and they'll tell you, "I thought I had problems when I lost my house, but when I recovered from a major illness, my perspective changed and nothing else seemed as important anymore." Indeed, money comes and goes. Fortunes are made, squandered, and created again. Your situation may be bad and it may get worse. The fact remains that as long as you have your health, you can ALWAYS recover financially. Over 70% of self-made millionaires in this country have been broke at least once in their life. Their ability to recover and THRIVE in the face of adversity is the ammunition they use to win the financial battles in their life. The book, "How to stop worrying and start living" by Dale Carnegie has been credited with changing and pacifying the anxiety of millions of people.

In summary, prevention is the best cure for any illness (financial or physical). Below are the steps you need to take to prevent, treat, and cure your financial illness forever.

Start a savings program TODAY. It doesn't matter how much. Start with any amount and stick to it. Increase it each year and NEVER touch the account.
Create a plan to increase your income. Train for a better job, become invaluable at work, work more hours, start a part-time business, and continually strive to earn more. You are worth more than you are paid by most employers-it is up to you to become difficult to replace.
Budget your household. Use the household budgetizer to understand WHERE you are and where all that money goes. You cannot plan a trip to financial prosperity if you don't know where you are today.
Cut back on unnecessary expenses. Use the budgetizer as a game! Have fun saving money and use your financial goals of savings to help you in other areas of your life (health, environment, etc.)
Be proactive in your communication. Don't let bills slip by without contacting your creditors. It doesn't guarantee they will be any more pleasant, but you'll feel better knowing you were professional, responsible, and polite. Ask for help if you need it.
Restructure bad debt. Transfer balances of high interest cards to low interest cards. Start and stick to a plan of reducing and eliminating all consumer debt forever.
Monitor and improve your credit scores. Contact the bureaus and initiate a credit repair program right away.
Read about success. Every month read a story of someone overcoming adversity. It will not only inspire you, but you may get an idea that you can use to make lemonades out of the lemons in your life!

Doug Crowe