Hey! Where's my Money?

Every morning about four minutes before the class bell rang signaling the start of class, young Anthony would quietly place a bright red apple on the edge of Miss Topp's desk. He has been doing that with a shy smile ever since the first day of school in Early September. On that first fall day of school  Miss Topp was pleased but not that surprised. Many first day children brought her a little gift on first day.  The second day, Anthony was the only child that brought her a gift - another red apple. This continued day after day until Miss Topp began to look forward to little Anthony walking past her desk, eyes staring down at his shoes and quietly setting down the fruit, always on the same spot. In fact Miss Topp's desk always looked the same. Blotter in the center, a ceramic cup to the left jammed with large black pencils, a pencil sharpener attached to the front left corner for students to  use, and of course Anthony's apple on the front right corner.  That is until after the afternoon break when the apple would disappear. Miss Topp got into the habit of eating the apple during the daily break when the children were at recess. This apple treat became Miss Topp's daily routine. She no longer brought a snack from home. She didn't have to. Anthony's apple was as reliable as that afternoon break. It always happened.

Anthony bringing an apple was as routine to Miss Topp as Hank always being the last kid in the class to quiet down, or Maria Arnaboldi always getting the top score in any test, or Stephen raising his hand first for any question she threw at the class.  She grew to expect it, she habitualized it and it became her norm.

One windy March morning as Miss Tipp sat at her desk a few minutes before the bell, she looked up at saw Anthony sitting at his desk. Something was wrong. She wasn't quite sure what.  The she looked around - and no apple! 

"Hey, what's going on here?"  she thought,  "Where's my apple?" Miss Topp asked Anthony.

"I didn't bring one," was Anthony's only reply.

"But I count on that apple every day. You have been bringing me an apple in for months now.  I will have no snack today, will I?

"I know Miss Topp. 

I know you were expecting perhaps a joke or at least a well defined lesson in real estate.  But the moral of the story is you can't count on external events that you do not control and do not participate in and do not even understand. It is human nature to behave like Miss Topp. It's not bad, or unethical. It's natural.

I was watching a special on Bernie Madhoff last night.  All these people were getting these great returns on money that they entrusted to Madhoff. They didn't ask any questions as to why, or how, or how long.  But when it stopped coming they screamed:  "Where's my money?

 I know we are told that Bernie was a crook and he lied and misrepresented the facts and he certainly wasn't a little Anthony. But most of the investors getting 20% returns were not asking a lot questions, were they?

The real estate market was booming years ago and prices were rocketing to the stratosphere and most of us were happy with this. When it stopped we asked "What happened to our money?" We forgot to ask, "Why is it skyrocketing, how long will it skyrocket, and what can I do about it?"

The money we access with our credit cards is so easy to use.  I pull up to the gas station, run my card through the machine, and pump and go.  But what if all of a sudden the card is not accepted because the bank backing it has no cash and shuts down my credit?  I'm gonna say "Hey!  Where's my money?"

I had a very large unsecured credit line with the bank.  Two years ago I called to make sure it was still there. It was.  Two weeks later I wrote a check on the line to cover payroll.  It bounced.  "Hey!  Where's my money?"

In today's economic environment we can take nothing for granted. For example, I have been selling a least one house every week lately and  I am gaining more and more clients looking for bargain houses to buy.  Many of these new clients are late.  I got a call from a good friend yesterday. He said, "Gregg, my cousin wants to buy a home in South Fort Myers, three bedroom, two bath, with a pool for under $250,000. I read in the paper where house prices are at a new median low of under $100,000 ($88,000 actually)"

I let Andy know that homes like this where he wanted to buy are around $400,000 now.  "Hey - he said what happened?"  I told him about Sallie looking for a house in SW Cape for under $75,000. The lowest one I found this week was $79,000.. "Hey what happened?"

While many folks are sitting on the side line houses are selling. They are selling at a rate that is more rapid than in any time in Lee County's history. Yes prices are lower, but they are without a doubt on the upswing. Not everywhere, not every house, not every price point.  The median price is down because cheaper houses are selling now, more expensive, larger houses are not - so the median price is down.

The messages I am trying to get to my clients are these:

•1.      This is no long term norm.

•2.      Dig deep into the trends; ask how, how long, and why.

•3.      Yesterday is well, yesterday's news.  Figure out where we are gong tomorrow.

•4.      You and you alone are responsible for your own success.

•5.      Find out where the apple is coming from.

By the way, Anthony got five years after being convicted for apple laundering.  Miss Topp now brings her own afternoon snack.

When I am looking at investment opportunities in fixer upper homes I look at the following:

1. Good Bones.  The house has to have a solid base, something to work with; I call it good bones, as in: " This house is old, but it has good bones."  The home has  a good layout and was built with quality.
2. Fixable Problems.  I love fixable problems like a bad smell or broken windows or no air-conditioning. I can fix those things. I can't fix a bad location or a small lot.
3. Location.  You might think this is easy, but sometimes it is not as obvious as just a good neighborhood. It should be close to schools, transportation and medical services. Look into transportation and shopping, city services and infrastructure and roads.
4. Height of the tie beams.  Some older homes have low ceilings and in particular low tie beams. I look for homes that if they do not have the high ceilings, at least have tie beams that are high enough for me to raise the roof and put in taller sliders.
5. Support. The neighborhood must support my plans for renovation, not just price, but appearance. I want to make sure I conform to the area.
6. Everyman's house.  I am not out to make a design or fashion statement. I want a house that will appeal to the broadest market. I have heard time and time again about a house that does not sell, "But there is a special someone that will appreciate the uniqueness of this home".  Let them say that about someone else's home, not one that I am tying to fix up and sell or rent.
7. My Sweet Spot. I like to go with what I know, where I know it.. A home might be a fantastic deal, but if I am not personally familiar with the area and it is not close to what I call my "sweet spot",  I will not buy it.
8. Know how to get out before you get in. You have heard it many times: You make money when you buy, not when you sell. It is true that you decide what you are going to pay, someone else decides what they will pay you.   Don't wait until you own the property before you figure how you are going to make money on it. Figure that out FIRST.

There are enough homes on the market to day that you should not have to compromise on any of your criteria. Wait until you find the opportunity that meets them all. If you need help setting up your criteria and your objectives, call me, I would be happy to sit down with you and help you.  Gregg  800-439-1580 extension 52 GFOUS@MARKETAMERICAREALTY.COM

1. Focus        On the task at hand, the ball, the next step. Narrow your territory, your efforts, your to do list.
2. It's only called work if you would rather be doing something else.     If you spend too much time working, change what you do.
3. Answer the question you want to answer, not the one that is asked.     Don't let others drive your discussion, stay on track and make your presentation.
4. It's about the relationship.     It's not about price or product its about the relationship.
5. If you see it, get it now, from where you are.     Don't wait for a better position, time or place. 
6. You can't skip the basics.    There are short cuts to the goal but he fall is just as short. Refine your basics and they will become a second nature to you.  habitualize them
7. Write a list.     Let your ideas gel on paper. Work your list every day.
8. Most people die in bed.    Get out of bed. It's a very unsafe place.   No great philosophy here, you gotta get outta bed to make things happen.
9. Don't hate. Just refuse to like.  Hate takes energy away from good things. Indifference takes no effort.
10.  What a great country!     Bailouts, taxes, etc., It is still the best place in the world.

This morning while I was reading the morning paper I had the TV on.  The Fountainhead, by Ayn Rand was playing on Turner Classic Movies. The antagonist to Howard Rourk, Ellsworth Touhy, meets Rourk by chance at a construction site. For most of the book Touhy has been out to destroy Rourk, the protagonist of the novel and the representation of Rand's philosophy.  Touhy is anxious to hear what Rourk has to say:
 
            "So tell me Rourk. Tell me what you think of me." Asks Touhy.
            "But I don't think of you." Rourk offers as he walks away.
 
Whenever I hear one of my kids or friends say:  "I hate such and such, I always respond with, "Don't hate, just refuse to like, it takes much less energy." 
I had never made the connection with my sentiment to Ayn Rand until this morning.
 
Not sure what this has to do with Real estate, but I needed to get it out my brain and onto paper so the rest of this stuff can come out.  Enjoy.

How to Buy an REO

Pre-Qualified or Pre Approved?     

If you are thinking of asking us to help you find an REO home to buy ( A home already foreclosed on by the bank.) Please let us help you get pre approved for the money you need to borrow.   The difference between a pre-qualification letter and a pre-approval is almost a great as the difference between cash and a loan. 
A pre-qualification letter can be obtained very easily and normally only requires a phone interview. Because of this, sellers have begun to ignore pre-qualification letters and insist on pre-approval letters.
A pre-approval letter is only obtained after at thorough examination of your finances - just as would happen if you were actually applying for a loan, which in this case, indeed you are.  You will need all your financial records, tax returns, bank statements, social security cards, and financial history and credit scores. - Probably in duplicate! 
We can help you get pre approval - talk to us.    

Here are Market America Realty and Investments, Inc. in addition to our traditional sales division, we are dealing with foreclosed homes. We take over the property for the bank, secure the property, do a BPO ( A formal Broker Price Opinion), order repairs, and supervise putting the home on the market. ( Here is our Asset Managment Page)

The process is interesting really. At 5PM one day I may get an order to start working on 123 Main Street, for example. I receive documents that indicate the bank as taken over owner ship of the house by email.  I pull all the information I can about the house off the County tax site and see if there were any old MLS listings for the house. ( This gives me inside pictures and listing history.  Then I go to the house that evening and determine if it is vacant. If it is, I gain access to the home, survey the home for damage and existence of appliances etc,. I take pictures, change the locks and walk around the neighborhood to learn what I can about he area and the surrounding houses. The next day I put the utilities in my name. I then spend about two hours doing the BPO - comparing this home to three homes that sold and three that are on the market that compete with it.  I suggest a lisint and sales price to the bank.  All this information is sent to the bank within 24 hours of my getting the order - 48 hours at the latest.

Once they get my information, the bank orders a BPO from someone else to get another opinion on the value of the  home.  In the meantime if there is work that needs to be done on the home I order bids from contractors to do things like, replace windows, fix the well, replace the air compressor, or other major repairs.

In my report I suggest a listing price to the bank. The banks wants a sale within 30 days, so the price will generally be pretty attractive.  I will give them two prices. One for "AS IS" one for the home repaired. Without exception I have been able to sell all my REO homes "AS IS"  - this is quicker for the bank and generally a better deal for the buyer.

I keep a short list of emails of people looking for certain homes and they are put on alert when I know I have one coming up.  I have, for example, one coming up in Lehigh that I think will hit the MLS at about $50,000. I may have three offers by the time I get price approval from the bank. The contact will be executed normally with in three days of listing.

  By the way...the only foreclosed homes you can tour are the ones that have already sold or are priced high enough to stay on the market long enough for a tour. Think about it.  Gregg 

Foreclosures, Chinese Drywall, Commercial Real Estate
 
 
"Because it was made that way"
 
I grew up in a suburb of New York City, in a town where we knew all the kids in school and especially knew the when a "new kid" moved in. But it is was suburbia, not a farming town, so when one of our neighbors decided to house a pony in a small fenced area in their back yard, they caused quite a stir. Harrington Park's shady streets and wide variety of stately homes and blue collar asbestos tiled modest houses were more a place for black labs and poodles than for ponies. But this era was unburdened by a bunch of town ordinances while there was no exact law against ponies, there was a law against farm animals. Brooklyn raised Seymour Russo and his concentration camp survivor wife Carmen were just as determined to keep "Sandy" as they were determined to love their cherished young son Alan and Carmen's aging mother who survived the camps with her daughter Carmen.  
 
Carmen didn't make it out of the horrors of a death camp to be told what pet she was allowed to have, and Seymour, well, Seymour was a horse lover and he loved his Carmen.  I became a frequent visitor to the Russo home, first drawn by the pony, then more to sit down with Carmen and Seymour and their stories and unique outlook on life.  Carmen was always feeding me; not just with the steady onslaught of leftovers and freshly prepared cakes and snacks, but with her philosophies molded by her experiences. Experiences to me that was exciting as they were frightening. Seymour was city raised in Brooklyn, worked shoeing horses and his rough and tumble outlook and lack of schooling were just as foreign to me as Carmen's Jewishness  and Nazi experiences were. As a young kid their differences from each other where not obvious to me; it was how different they were from me that made them the same.
 
Carmen worked in Manhattan, spoke German, and sold dental equipment. Seymour spoke Brooklyn-ese, never went to high school and was a blacksmith. Carmen quoted philosophers, Seymour knew how to make things. Carmen cooked, Seymour ate. Carmen planned, Seymour reacted.
 
Carmen taught me many lessons, but her overriding obsession with her own rights were the most prominent. Perhaps born from the fact that the Nazi's took all of her rights, she was determined not to let the town of Harrington Park infringe on her right to let her son have a pet pony. She and Seymour eventually prevailed, by the way, and Sandy lived a long life in Harrington Park, becoming a star attraction for many kids growing up in the area.
 
It was from Carmen's influence that I built my strong stance on individual rights and indeed private property rights, and it was from Seymour that I took a few kernels of street born wisdom that stick with me today. I remember Seymour teaching me how to make a bridle with a rope. (Seymour was to later help me buy my first and only horse when I was 14 - without my parents' knowledge or permission I might add, but I will leave that for a chapter in the book).
 
I was looking at the rope, made of three twisted braids of intertwined strands.  I took the three strands apart at the end of the rope and was left with curly cue coils of hemp in my hand. If I wound them back together they stayed together. It was like they wanted  to be wound together as rope.
 
"Why does this hemp stay curled like this?" perhaps forgetting I was talking to Seymour and not Carmen.
 
Seymour, intent on some other task at hand, quickly responded, "Because it was made that way.  Hand me that brass buckle."
 
I was to learn years later when I was a manufacturer's rep that there is indeed a principle if not in engineering, certainly in manufacturing, that "things" actually "remember" how they were made. It was explained to me by a scientist at one of my suppliers that molecules actually can be oriented and "remember" that orientation, and properly motivated by heat or some other influence will return to that state.  Seymour didn't need to learn this, he already knew it.
 
So next time one of your kids or grandkids asks a question that can be answered with "Because that's the way it was made", don't feel guilty about not taking the time for a long explanation. You might be giving him a basis for his future outlook on life!
 
Foreclosures
 
Talk to any real estate agent here in Lee County and they will tell you that they are swamped with buyers of foreclosed properties. We handle two to three a week here at  Market America Realty and Investments, Inc. (If you want to get on my notification list and bid on the bank owned homes before they hit the MLS, email me at GFous@MarketAmericaRealty.com).
 
But how long will this continue?  The low interest rates lately have been forestalling a train  wreck that some believe is inevitable. That train wreck is the maturing of the famed "Option ARMS". The last adjustment did not cause much a problem seeing the interest rates are still low (MBA FORECAST HERE), but most of the Option ARMS were made in the markets with the greatest decrease in housing values, the sub-prime Option ARMS adjusted in two years - and this adjustment greatly contributed to the current foreclosure in lower priced homes.  But the prime ARMS were mostly five year adjustments.  This means that beginning as early as late this year we will see another surge in foreclosures - peaking in perhaps late 2010.  (A good article about this HERE)
 
Chinese Drywall
 
In my years a manufactures rep I tried to get plastic film produced for me in China. I spent one month traveling to manufacturing towns in China looking for sources for plastic film for the Christmas tree industry.  I learned a thing of two about manufacturing specifications, and product liability.  I'll  give you my conclusion first - the Chinese manufacturer is not to blame and I believe the attorneys will have a very tough time finding a "deep pocket" to recover money from. Sure there will be a lot of people to file claims against, but expect this one to be tied up in courts for the next few decades. Meanwhile home owners and builders scramble repair the problem.
 
To understand this situation you have to understand how manufacturing is brought to China. I know, because I did it.
 
Manufacturers probably began to look for lower cost production over seas. They went to China, sold some older  rebuilt equipment or in some cases a new turn key factory to a communist village and helped that village build a plant. Some other entrepreneurs (or the same ones) gave that plant a specification to which they should make the product they would buy. The specification listed all the parameters that the product needed to meet - color, hardness, particle size, tensile strength, shear, maybe even printability. They may have even listed potential suppliers of raw material (along with the comment - or equivalent). In many cases the buyers of the finished product needed to send in quality control equipment or the very least testing standards against which these standards were measured.
 
For example; "white" is not a specification.  How do you measure white?  Is there a range? How broad is it?  How much product will you accept outside that range? Can you afford zero tolerance for defect? Even simple things like length of a drywall board is subject to interpretation.
 
Eight feet long: measured how? Is eight feet plus or minus ¼ inch okay?  At what humidity level to we measure the board? (Boards grow with moisture content) If we measure at 50% relative humidity and we ship to Florida with 100% relative humidity will the board grow?
 
I'm betting that no where in the specification was there a sulfur content or odor spec for drywall boards. It simply never turned up before.  I am also guessing that the plant that manufactured the board was full of employees that had never seen or used a gypsum drywall board. If there was an odor in the manufacturing plant these employees would have no idea if this was normal or not.  (It has also been reported that the odor does not show up until the boards get into high humidity areas like Florida)
 
If a purchaser was to return boards and want a credit for them because the boards were out of specification, the first thing that the manufacturer would do is QC the product and determine if the product met the specification signed off on by the purchaser.  
 
On the off chance there was a violation of specification we are presented with another problem: the manufacturer's responsibility is limited to the replacing the out of spec material. This is why there is an incoming Quality Control department testing "to spec" of incoming materials. Because once the manufacturer adds value to the item, it is HIS responsibility.
 
I have seen homes built with drywall that is somehow contaminating the air, turning the copper air-conditioning coils black, harming the chrome on the faucets, and making an unsavory odor in the home.
 
To rebuild these homes - tear the drywall out and replace it - will cost about $35/square foot.  For perspective on this cost, there are 1500 square foot homes in Lehigh and Cape Coral that cost less than $100/square foot to build new. There is a theory that is being tested now that the sulfur out-gasing is caused by bacteria, and that by killing the bacteria it will permanently stop the problem. This will cost about $14/square foot and require emptying the house for 30 days. I expect to hear about the results of these tests by the end of July. The $14/square foot, by the way, includes an underwriting fee by a national insurance agency guaranteeing the fix to be permanent.
 
I believe the Chinese drywall problem is fixable, for a price, and I have put together a team buying these homes, mostly already owned by banks that are ill equipped to deal with them and need to unload them.
 
What's a home owner to do that has a home with the effected drywall?  Work with the builder to fix the problem. The large reputable builders that have reputations to uphold are standing by their work - they figure that they will sort the economics out later. The folks that are in trouble are the ones who can't find the builder of their home or he is too small to be able to back up his work.
 
(For background on the Chinese drywall problem click here)
 
 
Commercial Real Estate
 
The commercial real estate market is just beginning to see banks take back properties promised in mortgages. This lag in commercial foreclosures is the lull before the storm. Commercial borrowers are often required to have interest reserves to carry them through the project construction and subsequent lease out time. In some cases interest payments are made years in advance.
 
These periods are now over and banks, as reluctant as they are to own property are have become unwilling owners of vacant commercial buildings with carrying costs for taxes, utilities, and insurance.
 
Here folks are the opportunities. But it takes what I call patient money. Buildings are not leasing - either retail or office.  The strategy however, is to be the low cost landlord when the tenants do return. There is also the opportunity to take these tenants from higher cost buildings that need to charge higher rents and put hem in your buildings at a great savings to them.
 
If we can buy commercial buildings low enough, we can rent them out at lower rents and fill them first.
 
I am also seeing commercial land available at prices that are only  20 to 40% what they were three years ago. For example,  I just listed a prime corner across from Walmart on Route 41 at $8.00 per square foot. This was $20/sf just a few years ago

Gail and I are spending the weekend in Boca Grande. Boca Grande is the only part of Lee County, Florida that can only be accessed by driving through another county  -unless you arrive by boat.   
We drove.  
If you visit Florida, Boca Grande must be on your "must see list". It is as different from the rest of Florida as Key West is, but in all the good ways. The Florida we have come to know as over built with cookie cutter concrete block on slab homes does not  exist in Boca Grande, and it never will.  Once you pay the four dollar toll to the private bridge owner for the privilege of visiting the island you will feel your blood pressure sink as your anticipations rise.    

The north side of the Island is a shelling Mecca while the south end is the Tarpon Fishing capital of the world.

Boca Grande wasn't always just for the rich and famous. The railroad once bisected this island and just as the spine of Boca Grande's famous Tarpon ran down the center of his body from head to toe, the railroad went from entry bridge on the north end all the way to the lighthouse on the south, The south side of the island is where you will find the picturesque lighthouse and was home of the  phosphate docks and current site of the "World's Richest Tarpon Tournament".   

Historically this town was about shipping phosphate and fishing. The railroad is now paved over and is now a golf cart highway of sorts as the local residents and tourist alike abandoned their cars  for the more quiet and ubiquitous golf cart - most of which have never seen a set of clubs.  The mansions are best viewed by boat;  after all it's about the water.

 
Gail loves it when we come here because my cell phone only works sporadically and internet connection is iffy.   I can actually relax.  Her brother Jake and I left around 6 AM for a half day of fishing;  First an hour to cast for bait on the flats off Bokeelia then to Turtle Bay for snook, snapper, and trout.  We came home at around noon with one keeper trout. (We accomplished a great deal of fishing and very little catching).  
Jake and Janice have a condo at the Silver King, actually it's the condo that inspired Gail and I to buy at Harbour Isle years ago in Fort Myers. The condo has a balcony on the first floor that looks out over the boat slips. You can actually have a conversation from condo to boat without raising your voice. Jake and Janice's home is  right down the street from the Famous Gasparilla Inn and its exclusive golf course. (The Bushes vacation here  and when they come, they stay at the Gasparilla Inn and G. W. goes Tarpon fishing.)  
Whenever we approach the condo by boat we idle past Boca Grande Isle houses on the right and the golf course on the left.  Gail and I have been coming here for 12 years and have never taken the time to look at the homes in Boca Grande Isles from the land.  

We took the golf cart and did so yesterday afternoon.  The gate house was empty and we were able to enter without incident.  The homes were almost as impressive from the road as they are from the water. It seems that front yards groomed like a putting green are the standard in Boca Grande Isles, as are manicured lush landscaping and luxury cars.

 We saw perhaps a half dozen homes for sale (There are a total of about 60 homes, perhaps more). Remarkably we saw five homes being built or rebuilt. This is something that we do not see very often on the main land in today's market.   There was no open house for us to snoop around in, but it was a pleasant tour.
 

Later that evening we had the chance to talk with a local Realtor about the Boca Grande real estate market. Prices are substantially down  (Houses in Boca Grande Isles are down to almost $3,000,000 ) but since most homeowners here count Boca Grande as a second or indeed a third home, many are choosing simply to not sell in  this down market. There are some relative bargains, but not to the extent of what we see on the main land. 

 
In Lee County, prices on the highest end are still falling. But let me talk about this a bit.  To put this in perspective, let's talk about the low end where prices are rising. Our office sold four houses this week. Every one of them went to contract at a price higher than the ask price we had post5ed on teh MLS  (I have a alink below for two more houses re recived orders on this week).  The ask price on these homes was established by using the closed sale prices of similar homes and setting the price based on this. 

The report that the pricing is based on takes us about two hours to compile. We generate a very detailed price analysis that take's into consideration many factors like total square footage, age, number of rooms, yard size, condition, appliances, etc. We also look at how long each of these homes was on the market. The analysis is very scientific and has little room for fudging.  If you would like to see a sample report, please call me and I will get you one. (You can see a blank one HERE) These reports are done for an institution as the customer (the bank).

 
The conclusion of the report, in effect, says this:  Based on previous sales over the last three months this house will sell for X Dollars.  The report also will give three examples of other homes that are ON THE MARKET. These prices are not entered into the calculation but are presented as a way to gauge competition. No where in this report is there a place to write down the emotional side of a sale or an expression similar to, "This is what I paid for the house so this is what I need to get".   
Houses priced in this manner, if the data is gathered and analyzed correctly, will, in today's market, sell for higher that asking price. This means prices are rising: The sales price is HIGHER than previous sales or similar homes.  I expect this to continue.  

On the other hand, houses that are priced not on the market but more on emotion, are selling for less than asking price.  Pretty simple. I have been saying for years that what one pays for something has absolutely no bearing on what it should be sold for. Very often I hear, after we do this lengthy report on value, "Yes but...."

 
We all think these reports apply to other people's house, not ours.  I am asked, "Have you seen the new kitchen drapes?";  "Have you seen our yard, we have a view of the preserve, those houses do not?" "What about the imported tile in the bathroom?"  

Ok fine. Even true, but these factors will make your house perhaps sell a bit quicker, but not raise the price.

Sales prices are rising at the low end and are lower than ask on the higher end.

In between?  It's a little bit of both. Most agents feel we have hit bottom.  For sure the inventory of the choicest homes is being depleted. If you are selling a  3/2 with a pool in a good location, your selling price is up from three or even two months ago.  What should you do?  If you are looking to buy - you need to be looking to buy now, because your selection is ether dwindling, or your prices will be going up. If you want to buy at the high end, make your deals now while you still can.

Commercial Opportunities.
The commercial market is changing. There are many reasons for this and most of those reasons have to do with the residential market.  But the residentail efect took some time.  There was a lag.

 What makes the commercial different is that when developers borrow money for a project, they also borrow interest reserves.  These reserves normally are scheduled to run out coincident with the original business plans forecast for when the project would be leased up or sold out. The forecasts were, of course, inaccurate,  and now that the reserves are gone  - the projects are in trouble. The banks are also  turning their attention to the current market values of these projects, based on the depressed rental rates, and rather that increase the lending reserves to make up for the lending requirements on these assets that have decreased in value, they are trying to clear their books of these assets.

All this means there are wonderful deals on commercial property.

I was lamenting with a friend of mine that owns a number of self storage facilities and has done quite well.  Joe Newman, like so many savy investors, sees opportunities when vacancies are down.  "Everyone wanted to buy when the storage units were  full.   Now that they are at 60% occupancy (This is the average for Lee County right now) no one wants to buy. Ridiculous. This is THE time to buy - when prices are down, rents are down and vacancies are up - listen to Joe!.

 
This phenomenon is similar to stock market "investors" buying when a stock in hot, buying on good news instead of bad.   When the local real estate market was hot, commercial corners were swelling for $20/sf.  I can now sell them to you at under $8.00 (See my point NINE on the top ten mistakes investors make - on the side bar.)  

The trick is to find financing. Banks like 100% occupancy, not 60%.

I have a few self storage deals and commercial properties with seller financing. If you are interested in these, please give me a call.  We are getting good deals financed and putting together seller financed deals with the right buyers.

 
Call me. 
 
As always, call me with questions or comments:  800-439-1580 ext 52 or email me at GFous@marketamericarealty.com

Gregg

  Shrink, Grow or Die   

I have used this expression for years. I kind of assumed I heard it someplace, but I just did a Google search on the expression and did not turn up any sage advisors quote. No matter. Maybe someone will quote me some day.
 
In today's market we have to react, to adapt, and to survive. Implicit in my shrink, grow, or die saying is that if you stay the same you will perish.  
 
I have owned and run executive suites for years. I now am in The Dean Executive Center downtown on Dean Street in Fort Myers. In executive suites we see many transitional companies: those that are growing or shrinking. In executive suites turnover is high for just that reason.  But the suites are an exciting place to be; surrounded by entrepreneurs and producers.
 
It is not rare for me to show up at the office at some ungodly hour and find two other midnight candle burners. Some of these people could work at home, but then they would not get the benefit of the energy that exists by being around other like minded entrepreneurs.
 
Remember a single fireplace log soon burns out.
 
If you need a boost in your business and want to join us. Give me a call.
 
Gregg