Hanh's Blog

Investment Banks Fail and its Impact on You and I

Hanh Brown (Investors Lounge Online) — Wed, 17 Sep 2008 04:17:38 -0500

Contributed by Elliot, Alan, John, and Brad.

As recent as this past weekend and in Monday's (Sept 15th, 2008) news, it seems the American population is fueled by two sets of demographics, those involved with the economic fate of the nation and others with little or no financial know-how with exception to maybe managing their 401k, credit card debt or mortgage needs.

For most American people the week started just any other, waking up to their first morning cup of Joe or sitting in bumper-to-bumper traffic, working for the weekend all over again. They weren't looking at the headlines thinking we are heading for harder times or a Great Depression because great financial institutions and banks are in trouble, folding under; many were despaired over the remnants of Hurricane Ike and its path of destruction or possibly the oil crunch and fueling their cars of the week's commute. No such financial news is lost on the majority of Americans. Wall Street sometimes is just a fabled place, another Main Street in America, a film by Oliver Stone starring Michael Douglas, not a place that decides the interest rate or the spare change to be saved. No, Monday was just another day.

For those professionals who make their bread and butter, take home the bacon to fry it up in a pan, for those who work in the financial district, this last weekend and Monday present historical markers of a changing tide. No longer will the federal government step in to save huge, once prosperous financial giants as the giants fall from grace or banks continue to fail and securities trading allows firms to unload; things will only get worse before they get better? This could have amazing fallout where whole industries stop existing and thousands lose their jobs. In an economy already ailing from a failing mortgage industry, what can happen? Is this just another symptom or source of the problem? What now will happen to our economic future? Hell there is no guarantee but this is scary.

One cannot begin to feel the sky is falling; the beginning of Armageddon is upon us?

Tried and true models of business and mostly success are no longer the winners? We are headed to uncertain times. This may sound like dire straits? We have a been through worse, hell our financial ways of life were under attack seven years ago on 9/11 and we bounced back, didn't we? Truth be told, these are tough times for so many people and there is no telling if things will come out clean in the wash.

For starters, the year-end for investors and Wall Street is going to be like a roller coaster. What does not make matter any better is the election. Many are waiting to see the results of an historical neck and neck race. No telling who will be in office come January and this is somewhat disconcerting because after years of poor leadership someone with innovative ideas and proactive abilities is needed. There is going to be much drama in the weeks to come on Wall Street. You are going to see a lot of negative action as people sell and ditch underperformers in hopes of breaking even. The stocks just aren't going to be able to trade higher. I mean if you've got the money to invest, you should go with strong stocks and get them for cheap. Still for many people in need of cash and now, this is the time to exit and bow out gracefully.

Many may be concerned about their brokerage accounts. If you carry a Merrill Lynch credit card, have an AIG insurance policy, or a Lehman Brothers brokerage account; there is not much cause for worry. It is a changing of the guard, no longer will you be doing business with someone you were familiar with. Lehman accounts are safe but you also have the option of moving to another firm. Bank of America bought Merrill Lynch like Countrywide before them and it is my prediction the BFA will soon own the world if not every financial holding from Wall Street to Market Street in San Francisco. So if you have a Merrill account you will soon be under that umbrella. AIG, we will have to watch and see. It is uncertain but if they go under, you will be with a different service provider. Ironically in this sue-happy society of ours, you will have a fight on your hands if you want to go after your broker for investing your funds inappropriately.

Many people are thinking JACKPOT! Still if you have any debt such as credit cards, mortgages or another loans, you still have to pay on them. You will still owe money to the new firms and they will exercise the right to collect the debt if you fail to repay.

There may be good news to come out of this for the future of debt. It may be really tough to get a loan or a refi right this moment because all risk is being judged during a very risky time but in the coming months and years, things are going to turn around, I think. For one, interest rates are likely to go down again to historic levels, opening doors to consumer lending but also consumer spending, or a thriving economy. You know that for banks at any time, credit cards, lines of credit and auto loans are big money makers but these vehicles of industry will pave the way back to a more healthy economic status.

Continued ... http://www.investorsloungeonline.com/blogs/Investment-Banks-Fail-and-its-Impact-on-You-and-I.html

Does Your Head Spin As You Try To Figure Out What Is Going on With The Economy? How this has affect agents, brokers, buyers, seller, you and me.

Hanh Brown (Investors Lounge Online) — Thu, 17 Jul 2008 05:59:58 -0500

Contributed by Brad, John, Nick, and Hanh from http://www.investorsloungeonline.com/

Subprime. Collateralized Debt Obligations. Liquidity. These are not uncommon words now a days. Every so often you hear them out of the mouths of people you wouldn't expect.

Everyone knows we're in a recession, the stock market plummets every time the price of a barrel of oil goes up. We are feeling the sticker shock, every time we go to the market, the gas station. For months people in Washington have been struggling to find ways to help the economy bounce back from these difficult times.

As if they had their heads in the clouds, or something, they couldn't see this coming? What happened to the booming economy? The housing boom? The bubble has burst and the average American is left to sweep the pieces under the carpet?

Many can blame the financial burden of fighting an ancient religious war or sticking our nose where it needn't be-let them figure it out right? But we've had a score to settle since 9/11 and this score has taken the focus from areas of the economy we should have been watching like a hawk.

The housing market, the boom of the late 1990s into this new millennium has caused people to become too comfortable. Even the banks grew more flexible, bent the rules for some that would be considered very high-risk. Interest rates were the lowest since post-World War II; FHA loans opened the doors to homeownership and other banks created a specialty niche for sub-prime customers.

Many homebuyers needed "no down payment" or less than the traditional 20 percent. This created a buyer's paradise, no longer were people hindered by less than perfect credit. Still what were banks and large mortgage companies thinking, that this boom would never end? Maybe they were too busy making profits hand over fist to care about the future and if such practices would have negative repercussions.

By the summer of 2003 the Federal Reserve had lowered the interest rate to 1 percent, which is practically unheard of and while the interest rates on various credit lines were higher, this move changed everything as far as momentum in the marketplace. Mortgage rates were a bargain compared to years before. This resulted in a refinance boom. Homeowners could not call their mortgage company fast enough. This caused banks to rethink further how loans are underwritten and funded.

It is like a double edged sword because on one hand there is a segment of the market that has been historically underserved and considered high-risk; on the other hand there are people who have maintained a prime credit rating and scrimped, saved to put a sizeable down payment on a home. What did not help matters was President Bush's Homeownership Initiative, which encouraged mortgage companies like Countrywide to write loans to risky customers. Still this action touched upon a segment of communities that were ethnic, diverse and always considered renters. Mortgage companies worked the notion of the American Dream with these people.

Another thing that was happening at the time was a somewhat illegal action called "Flipping." With the home values rising at an astronomical rate, everyone believed they could get rich quick by playing real life Monopoly. Not only did you see people buying homes for the sake of building wealth but also buying investment properties. Many people would buy homes in need of renovation in up and coming areas, in hopes of profiting from buying in the first place. What ended up happening in many cases was that people did not think about other intrinsic fees associated with buying home. They thought all they would have to do is pay the mortgage, not taking into account rising taxes, water bills and other maintenance.

This was the era of anyone being able to get a loan. This spawned hybrid loan products when before there was typically only the fixed rate mortgage, now there was the adjusted rate mortgage, or ARM, which many homebuyers did not understand, they just wanted the loan. The idea was give an at risk borrower an ARM and this would allow them to build healthy credit with hopes of refinancing into a fixed rate later before their existing rate adjusted to a much higher interest category.

To compound the logical thinking of this, it made sense because the home was only destined to appreciate in value, so banks were willing to lend up to 110 percent because the home or collateral would be worth more than that in a few years. This also worked to close doors for some homebuyers in areas where the living wage did not catch up to the housing value. This is why you see so many people leaving California because the housing is so outrageously expensive or the commute is too long. Still mortgage companies and banks were not thinking about the average American; they were too busy making money but this could not have happened without Wall Street.

How Wall Street Profited

Such riskier loans required a new way of pooling them in the market place. Banks and mortgage companies would sell them off to big pension funds, private equity firms, mutual funds, foreign investors and any other investors looking to profit from the housing boom.

This only opened the marketplace to complex, risky maneuvers and gone was a simpler time. In fact many borrowers did not understand exactly how any of this worked. In the good old days, one would visit their local bank where a relationship was established with the manager and a mortgage would be taken out. Still the logic behind the new system of collateralized debt obligations or CDOs is that by categorizing hundreds or thousands of mortgages together, the nature of the risk diminishes. Really what was thought at that time was the loss from nonpayment or foreclosure would be minimal.

Still one needed to be proactive in how well the investments were performing. For instance, one could start to see a trend toward a foreclosure situation. Let's say that if in one group of mortgages of about 1,000 homes, 40 of them are not paying on time. It is thought that this is not too bad because the 960 paying on time and the profit made there, allows one a return on investment despite the losses on 40 loans.

It is not the best-case scenario but a winning one for this example. It is when the numbers are upside down that one would start to see a loss and higher rate of foreclosure. What this created at the time was a safe investment in sub-prime paper dealings. It seemed brilliant really because it was a win-win situation for so many. For those once considered risky and underserved, the banks and mortgage companies were now able to offer them an option and meanwhile, investors on Wall Street turned a profit. Banks and mortgage companies got a good investment rating, leading people to buy their stock.

Still this behavior in the marketplace could not go on forever and wise investors, economic forecasters and business strategists should have seen a wave of change coming. The ARM loans started to reset at astronomical higher rates than when the homeowner took out the loan. Sometimes it was a matter of a few interest points but more often a matter of more than five, sometimes ten points. People started to default on their homes leading to Wall Street feeling less confident in the market.

Next two very important things happened that many feel even today and scares some into thinking a new Great Depression is upon us.

First banks were no longer flexible and tighten their lending practices, essentially closing down the sub-prime market. This had a nasty effect on that segment of the population relying on such loans for buying a home. I mean many can say that the banks finally wised up that what they were doing was wrong. It was wrong for them to give loans out to people that had not demonstrated an ability to pay on time just for the sake of financial gain. This all seemed to snowball as recently as winter of 2007.

Second, without loans for buying homes, the housing market stalled. While many would say, it became a buyer's market; the truth was that not many could afford the existing inventory. Two out of four homes may be on the market, but people cannot seem to sell them because many of the buyers are no longer qualified. Wall Street also continued to suffer as the values set on the new system of selling high-risk loans depreciated as people started defaulting payments.

These investments were on books everywhere and as a result many companies that seemed strong and profitable, no longer had any worth. Many went out of business or continue to fail, leading to a change in business practices. As more and more bundles declined in value, the banks made fewer loans, as they grew wary of under performance. This in turn also made it more difficult for people to get other loans for automobiles, even credit cards. No longer was sub-prime booming. This changed the lending capacity for so many banks but also has decreased consumer spending especially if people with blemished credit cannot get further credit advancements. It is a terrible time to live with a credit score less than 650 because this climate makes it all the more harder to re-establish good credit lines.

Who really hurts, the bottom line, the truth of the matter is the average middle class, working class person and the family owned business. A mom and pop company who years ago had a good working relationship with their local bank will find less credit options for expansion because of what has happened with the housing boom. On the other side of the coin, larger conglomerates are finding it harder to assess their assets for acquisition of weaker companies in need of merger.

Many can argue that the Federal government has not done enough to help this situation rebound. The Federal Reserve has taken steps as recent as fall of 2007 to make it more affordable for people to borrow. The interest rate has not fluctuated much but still this has allowed banks a more direct relationship with the Fed. What is curious about the situation is that people are just really paranoid and lack confidence in anything right now. Even powerhouses like Bear Stearns are being questioned, people are pulling money out of the stock market and hiding it under their mattresses. Freddie and Fannie are in trouble and I think as much as people cry "Recession, recession" there are signs of Depression within the economy no one really wants to admit. When banks start to fail, that's when people need to definitely worry.

As mentioned earlier, the housing market is in recovery. Housing prices have dropped a little bit. There seems to be an abundance of homes on the market rather due to foreclosure or people wanting to downsize, the market is still in a state of crisis. As much as the Realtor Association wants everyone to believe that a home builds personal wealth, there is no guarantee. What happens to people who are still trying to afford too much home? Or the at-risk consumers? Lenders have changed the criteria for borrowing and as a result there are less buyers. It is ironic because at times like these, of course, people will want the stability of a home. Maybe in the near future as housing prices continue to fall, there will be more action but one must remember there are other forces at work predicting the economy: war and politics being highly important right now. I think many are waiting to see the outcome of the Presidential elections in November.

Also it must be remembered how far reaching the burst of the bubble has been. It has affected whole job markets. Anyone having to do with the lending process has suffered, not only loss of income but displacement within the workforce. No longer are real estate agencies hiring, there are not many loan officer positions anymore but also one cannot forget the homebuilders and other craftsmen are a part of the full picture. Places like Home Depot and Lowe's have seen a decrease in home improvement projects and people are hesitant to purchase big-ticket appliances. And this makes perfect sense if homes are worth less, why invest any more?

Recession Watch

Well in a nutshell, that's the 411 on the housing market and the world of Wall Street. No wonder we're talking about a full-scale recession hitting all parts of the economy because after reading this, one can see a definite relationship. The economy is such a touchy subject because it is like the death of an important family member; no one can believe the good days are gone.

It is extremely difficult for the American consumer to remain confident when everywhere you turn the price of everything has increased a nickel, a dime and even a quarter over night. It is down right scary because so many are working at the same wage rate. Even so, many are unemployed, under-employed or working at home because the job market cannot pay them what their education warrants. These are terrible times. So how can one get past this bad feeling? Work harder at saving and maintaining their greatest asset: home and family. This feels like a no-win situation as home values continue to fall. People feel down in the dumps so they spend less and try not to use credit cards. What really hurts is that many are needing credit now to buy perishable items like food and gas.

There is no doubt we are in recession and possibly heading toward a depression. The Bush Administration has lacked authority in addressing when the recession began but many are comparing this present situation with that of the late 1970s. People's fears are ruling their pocket books and this is why we see an economic downturn but what about the failure of so many financial institutions? How do you label that? It just seems unfair that the rich seem to get richer and the poor suffer. It is the working middle class that bears the brunt the most. There is no doubt, there needs to be a change, some sort of economic stimulus and not in the form a $300 check but some real down and dirty work to save ourselves.

What is your take on the economy .. love to hear your thoughts.

Try Out a Service to Let You List and Syndicate

Hanh Brown (Investors Lounge Online) — Tue, 10 Jun 2008 08:12:48 -0500

To Agents, Brokers, Investors, Property Managers, Landlords, and anyone that has a property that you are trying to sell/rent. Please visit http://www.investorsloungeonline.com/ and try out our service for free. We offer our members to list properties, create a single property website once and then have them posted on leading online marketplaces (i.e Trulia, Zillow, OODLE, etc).

Each property becomes its own complete Property Website! Input the property details yourself, and it becomes its own website! You can have UNLIMITED property websites. We also offer an HTML flyer for you to post on sites like Craigslist and eBay. Dramatically increase the visibility of all of your listings in no time!

We are adding a feature to enable the buyer/lead to make offer on your listings. Yes, this service is free for awhile. You can link videos, virtual tour, etc for free as well, features that you would have to pay on other sites. We would like to hear your feedback and please use it while it is ALL for FREE.

Pay Per Click (PPC) vs Natural Search .. Which One Should You Use?

Hanh Brown (Investors Lounge Online) — Wed, 28 May 2008 13:37:58 -0500

A high, "natural" or organic site ranking is imperative to your site's success. There is another option, however, to increase site traffic: paid per click ads. Let's look at how these forms of advertisement differ from one-another.

Surf to google.com and search for something of interest-chances are, you'll see relevant, natural results on the left. Look to your right, and you'll see paid searches as well. Visibility, here, is the first difference between natural and paid search results.

Which results "pop" out to you the most? Most viewers have the distinction and tradition of reading left-to-right, and chances are, you just did. An individual accustomed to this tradition will therefore always read natural searches first.

Web sites build reputation just as brick-and-mortar businesses; and as any entrepreneur will tell you, reputation requires repetition-often a lengthy process. Search results are no different; here, paid advertisements have the clear advantage.

Natural searches usually take months to years to reach the first page of search results (depending on how completive your keyword search is). This is no guarantee either; as previously discussed, your site's quality of content is crucial. With paid advertisements, months compress to mere days; and as they say, time is money. If you're just starting out, both ads are essential, but a paid search is more practical in the short-run.

In addition, today's market place is more informed than ever, and most have developed a keen sense of trust concerning web sites. As a rule of thumb, a high "natural" search result will seem trust worthier than paid searches due to reputation.

As we've seen, paid ads tend to produce quicker results at a higher price-and receiving a top search result is no different. It is often very difficult to earn a high "organic" rating. At a high enough bid, it can be easy to gain a top paid result.

We've looked at the aesthetics, rapidity, trust, difficulty and costs, but the fundamental question remains: which produces a greater traffic volume? With "organic" search results, receiving a greater traffic volume is a function of the quality of the site; namely, the positioning of keywords. Both types have the potential of producing high traffic volumes, but paid ads tend to produce a more reliable volume in the short-run.

You may be apprehensive about the cost of PPC ads, but if you're just starting out, this may be the only way to generate a decent level of traffic to your site. PPC ads allow a business' site time to evolve into a "natural" search powerhouse, allowing a sufficient traffic volume to sustain your business.

PPC ads generate moderate to high traffic at moderate to high costs-typically $1500 to $3000 a month; in the short-run, this is most likely a necessary expense. A "natural" search result normally generates low to moderate traffic at a very low cost.

You may need to outsource site development as business increases. Outsourcing SEO begins at about $1500 per month for the first few months but increase to $10,000 or more, dependant on the size of your website and competition for key words. In the end, natural search results are more cost effective, lowering average costs per sale and help to ensure a sustainable business.

Though a combination of a good natural ranking and paid search results are largely desirable, there are instances where paid searches should not be used.

Firstly, breaking even may be difficult if the price of products is too low, or if traffic is through an affiliate's site.
Secondly, PPC will not be cost-effective if your landing pages aren't yet optimized for a high conversion rate; I recommend split-testing software for accuracy.
Finally, do not use PPC services if your site already has a high natural ranking; increased PPC traffic does not guarantee an increase in sales.
If you're considering using PPC ads to boost short-term sales, experience is expressive; it will take several weeks to tweak key words for optimal ad effectiveness.

When you are starting out, do both, PPC and natural search, for at least two to three months, to really gather enough data to determine its success.

Best of luck!

For blogs like these, please visit http://investorsloungeonline.com/

Affordability of Rental Housing ... is Alarming!

Hanh Brown (Investors Lounge Online) — Tue, 27 May 2008 09:18:31 -0500

News about millions of homeowners losing their homes to foreclosure have been all over the news lately, but the outlook for renters is also alarming. According to a study by the National Low Income Housing Coalition, even rental housing is too expensive for the vast majority of working Americans.

The problem isn't just affecting high-priced urban markets but is happening around the country, but virtually everywhere in the country. The conventional wisdom says housing in rural areas is more affordable than in metro areas, but the coalition's report found otherwise. The coalition's study, called "Out of Reach 2007-2008", found that no state could assure a full-time minimum wage earner access to affordable rental housing even in non-metro areas. Further, the report says that no minimum wage worker could afford rental housing and even workers making significantly more than the minimum are paying more than half of their wages toward rent.

The Department of Housing and Urban Development estimates 30 percent of income to be the "fair market rent" (FMR) for an apartment a given area, and a worker making the median wage for most areas is paying a lot more than a third of his or her income. More than 9 million renter households paid 50 percent or more of their income for housing in 2006. That leaves less money to be used on insurance, food, and other necessities for these folks, who are mostly (98 percent) classified as low-income.

The study asked how much a family in a given community would have to earn to be able to afford a modest apartment. The answer was determined by comparing the "Housing Wage" in each area with the local wage and income for the residents of those communities. The Housing Wage is defined as the full-time hourly wage one would need to earn in order to pay that fair market rent for an apartment in each area.

The coalition reported that a full-time worker would have to work 52 weeks a year with no unpaid days off at $17.32 a year to afford a $900 two-bedroom apartment in the average housing market. With the current national minimum wage set at $5.85, it's obvious that a household containing even two full-time workers making minimum wage will struggle to pay the rent. The minimum wage will rise to $7.25 next July, but even with the increase, the report shows that there is no county in the entire nation where a single person can work 40 hours per week at minimum wage and afford a one-bedroom apartment at the going rate.

The picture is a little less grim for the many workers who are making a higher wage, with the average hourly wage across the nation coming in around $16.00. However, the average hourly income of renters is only $13.94, and that typical renter would have to work 50 hours a week with no unpaid time off to afford the average rental unit.

Of course, these are just averages. The "Housing Wage" differs from area to area, ranging from $11.88 in Iowa to more than $23 an hour in California and New York. The affordability of housing varies not just by average income from state to state but also depends on the interplay between wages and rental rates. For instance, a renter in Alabama may only be making the minimum wage of $5.85 an hour, but his salary will still cover more of the cost of housing than a renter in the highest-priced market, Stamford-Norwalk, Connecticut. A worker in that area of Connecticut making $7.65 will be spending more of his or her income on housing than the minimum wage worker in Alabama because the price of housing in Stamford-Norwalk is so much higher than the per-unit price of housing in Alabama.

Though low cost and subsidized rental housing is available in some areas, the units are often falling apart and unsafe. In addition, the units that are in decent shape are sometimes unavailable to the lower income workers, because the apartments are being occupied by households whose income is significantly higher. Additionally, each year, a percentage of the subsidized housing disappears when the units are converted to condominiums or become uninhabitable because of neglect.

The bottom line? No minimum wage earner in the U.S. today with a full-time job can expect to find a decent rental unit he or she can afford, and even workers making significantly more than the minimum are struggling to make the rent and still afford food and other necessities.

For a complete list of state Housing Wages can be found at http://www.nlihc.org/orr/orr2008/housingwagemap.pdf.

How Google Page Ranks Affect Your Website?

Hanh Brown (Investors Lounge Online) — Thu, 22 May 2008 09:38:34 -0500

How Google Page Ranks Affect Your Website
It's true that only members of Google's inner circle understand the full intricacies of the Page Rank (PR) system. However, you don't have to be part of that elite group to acquire a sense of what PR is all about and where it fits into your efforts to boost traffic to your site. The following questions and answers provide an overview - in layperson's language - that should enable you to do just that.

What is Page Rank?

Quite simply, it is a numeric value that represents the importance of a web page. It's of vital significance to everyone who derives business from a web site because it is one of the key factors that determines a page's ranking in Google's search results. Google bases the Page Rank (PR) concept on the assumption that when one page links to another page, it is effectively casting a vote for the other page. Consequently, these "votes" can increase a page's importance and boost its Page Rank. More importantly, the prestige (i.e. PR) of the linking page influences how valuable its "vote", or link, will be. Both the number of links and the ranks of the linking pages are used to calculate your web page's Page Rank.

How important is it, and why?
To understand the significance of Page Rank, let's look at how Google originally explained it

‘The heart of our software is PageRank, a system for ranking web page' that provide' the basis for all of our web search tools."

In other words, it's an essential part of how Google determines which sites rank highest in its search results. Their explanation continues:

"PageRank relies on the uniquely democratic nature of the web by using its vast link structure as an indicator of an individual page's value." In essence, Google interprets a link from page A to page B as a vote, by page A, for page B. . . Votes cast by pages that are themselves "important" weigh more heavily and help to make other pages "important."

he higher a site's PageRank, the more quickly it will show up when you conduct a search - and the more likely you are to open it when you see it. Of course, high-ranking pages mean nothing to you if they don't match your query. So, Google combines PageRank with sophisticated text-matching techniques to find pages that are both important and relevant to your search. It doesn't just count the number of times your search term appears on a page; it examines all aspects of the page's content (and the content of the pages linking to it) to determine the best matches for your query.

How essential is a high Page Rank to my site's success?
This is an excellent question, because many experts believe that as -Google has grown and evolved, PR may no longer be the most important determinant of how sites show up in searches. Current theories about PR range from that it's been abandoned, downgraded, modified, superseded, that it's a publicity stunt, and all the way through to it still being the same as always. Some see conspiracies in PR, others take Google's explanation of it at face value.
So what and who should we believe? My personal opinion (and I've stated this previously) is that Page Rank is still a factor to watch - but that it's not the be all and end all of getting your website on the receiving end of lots of traffic from Google.

Here are a couple of experiences that lead me to this conclusion:

You could have a site/blogs with Page Ranks of 6 and 7 (i.e., impressively high) and still receive little traffic from Google.
A couple of PR updates could change your website/blogs from PR of 0 to a PR of 6 Without any significant change in traffic before or after the update.

I consequently believe that PR is not the primary factor in your site's Search Engine Results Page rankings, or SERPs, and that an increase in PR doesn't automatically produce a direct and proportionate increase in traffic.

Wait a minute, what are SERPs? Are they more important than Page Rank?
Search Engine Results Page rankings (SERPs) refers to the listing of web pages returned by a search engine in response to a keyword query. It's obvious that your site's PR is going to play a big part in its SERPs, but as just stated, I consider it just one factor that Google looks at when they determine your blog's SERPs. I also believe that the day we see an update to our PRs is not necessarily the day that Google first determines them or the day the new PR starts to affect our SERPs. Many sources argue that the day we see a change in PR publicly in Google toolbars (and other tools) is actually days (or even weeks) after Google has worked out our PR and has taken into account the effect of this on our SERPs, although some see it the other way around and say that PR takes a few weeks to have an impact upon SERPs).

Another important factor in determining SERPs is the number of backlinks (i.e., links from other sites and from within your own sites) point to your domain. In fact, my research and experience seems to indicate that backlinks seem to have a more direct impact upon traffic levels than PR.

Another theory that many ‘experts' have about Page Rank is that it could be more important in how powerful a site is with its outbound links. ie if my blog links to your blog and it has a page rank of 2, that link does your blog less value than if my blog with a page rank of 7 links to it. This makes sense to me and I've seen a number of people try and ‘prove' it - none convincingly - but it seems to resonate with my experiences.

So what's your current thinking on how site owners/bloggers should view Page Rank?
Primarily, as an indication of how important Google thinks their sites are. I can't see Google keeping the PR system going if it wasn't of value to them; their PR updates, which come every couple of months, use up significant energy and resources. I doubt they'd do that just to keep us believing they still used it.
However, I keep an eye on my blog's page ranks because I look to them to show me if I'm on the right track to improving quality. Higher quality, rather than higher Page Rank, should eventually lead to more traffic but it's important to understand the distinction.

PR is also important to me because it also helps me monetize my business. If you have a blog with a high PR and you are using to sell text links to other site's operators, one of the few ways to judge the worth of a site for such purposes is Google's PR. And of course, it's a big plus for the prestige and reputation for your site to be highly ranked.

I'm sure that as Google continues to learn from traffic patterns on the web, Page Rank will adapt and evolve, as will other metrics of assessing a site's value. However, the importance of understanding how it fits into your marketing strategy is unlikely to change.

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ARE THERE ANY BENEFITS TO DIRECTORY SUBMISSION ??

Hanh Brown (Investors Lounge Online) — Thu, 10 Apr 2008 10:19:07 -0500

When you launch your website what is the first thing you look for? Search engine visibility, right? With zillions of businesses crowding the website, it occasions no surprise that each business is competing for high rankings in search engines that are considered important.

For those trying to promote their websites would be aware of the importance of inbound links in pushing up their website ranking. This is especially significant in the keyword markets where competition has become intense. The math is simple: without a sizeable number of inbound links your site cannot possibly make it to the top 10 in Google or Yahoo! Let's face it, the greater number of backlinks you have, the higher the chances of being well-placed in the search engine results' pages or SERPs.

Website designers strongly advocate using the services of a professional directory submitter who would know how to get your site listed in the important search engines within just a few days instead of a few weeks. What is more, a directory submission service would know the exact words to use while fashioning the words for your website, words that would enhance its chances of acceptance.

I would like to emphasize that with professionally handled directory submissions you are able to increase your chances of being visited by search engine robots. ‘Robots' in cyber language is a term used for programs which gather web pages for the purposes of indexing. The gathering activity is also variously termed as ‘spidering' and ‘crawling'.

When you hand over your website or websites to a professional directory submitter, you may be sure that they will build keyword relevancy. This will help optimize your website to the fullest extent possible. A professional directory submitter would look at the title tag very carefully for keyword relevancy and density. It is important to include relevant keywords and tags that people will be looking for as this will improve your pagerank and heighten website visibility at the same time.

During directory submissions, you are definitely well-advised to use a website title that is keyword-focused.

Obviously, the benefits associated with website optimization are not restricted to the keyword-driven markets alone. It helps you in your branding efforts as well. When you use your business name in the anchor text, you are consciously building brand awareness as well as brand image. Given the widening expanse of the internet market, a lot of directory submitters prefer to use anchor text which is keyword-focused at the same time. This exercise manages to kill three birds with one stone. You get your link, keyword relevancy, and brand building and brand image all in one single throw.

We just created a Directory Submission for Real Estate Professionals to help manage your website in a way that includes contextual links which works to your advantage by enhancing your website's visibility. We also submit our site to "paid" and "free" directory which will snowball to benefit your submission on our site, as well.

And did I say this cost hundreds of dollars ..... NO, this service is for free.

April '08 Update On The Lounge

Hanh Brown (Investors Lounge Online) — Mon, 07 Apr 2008 17:17:35 -0500

I would like to share with you some news and upcoming activities in the Lounge.

We migrated to a VPS (virtual private server), bringing you better performance, flexibility, security and scalability. We now share the server bandwidth with 50 (or so) domains as apposed to before we shared with 800 domains. You should now be able to upload the site and navigate faster then before. This migration was not seamless; there were roadblocks, i.e., lost of data, broken links, etc. They are now fixed and we are on our way. Thank goodness for the technologies and conveniences it brings, but it also comes with learning and setbacks.

Price and Terms for Speedier Service - FREE

As you may know (or not), we are a team of RE Investors, RE Agents, Electrical Engineers, Technologists and Webmasters. Our team has been working hard to bring you tools and technologies to better market your business.

I think most of us share a common denominator and that is "how do we maximize exposure of our listings?" InvestorsLoungeOnline now offers our members property listings, and then your listings will get exposure automatically via the most popular classifieds sites and real estate portals (Google Base, Trulia, Zillow, Oodle, Local.com, Vast, Lycos, and CityCribs). This syndication will multiply your listings' exposure and the combined traffic viewing of your listings; will amount to be in the millions per month.

Price and Terms for Syndication - Unlimited and FREE

To increase visibility online is the core of every online business marketing strategy. Driving traffic to your website and getting noticed by search engines takes a lot of time and effort. Links play a major role in determining your ranking position on search engines. One simple way to obtain back links is to submit your link to directories. Our online directory provides links to your sites categorized under relevant topics. By submitting to a directory under a particular category, you allow the search engine to categorize your site under a relevant topic. We actively submit our site to "free" and "paid" directories on the web so you can benefit from our SEO campaign. Please find your niche (professional) in one of our directories, and then submit your site to improve your search engine rankings.

Price and Terms for Directory Submission - Unlimited and FREE

We are learning a lot to bring you tools and technologies; however there is a great deal to do alone and we need your help. We would like to ask you to complete your profile; please include a picture and "about yourself" and blog about the suggested topics below. Blogs provide direct communication; a way for you to profess what you know in your industry, to speak directly, openly and honestly to our members (also gives you an increased presence on major search engines, like Yahoo! and Google). Blogging gives you the opportunity to promote your brand and company as well.

Suggested topics (not limited to) we would like to ask you to blog about are below:

Pulse of the Economy, Creative buying and selling strategies, Current Market in Your State, Mortgage, Preforeclosure, Foreclosure, Internet Marketing, Search Engine Optimization (SEO), Wholesaling, 1031 exchanges, Commercial real estate, IRA investing, Landlording, Lease Options, Mobile Homes, No money down, Owner financing, Rehabbing, Tax liens, or simply a "Lessons Learn" in your profession.

Price and Terms for Sharing Your Knowledge - Priceless

We are also looking for someone to moderate and take lead in our forum... perhaps generate some thought provoking questions. Please let us know if you can help.

Meantime, we can work on bringing you tools and technologies. Do you want to know what else we are working on?

There are a few projects in the works. To name a few, you will have your own Single Property Flyer optimized for maximum exposure (SEO). For investors that want to analayze your property to determine cash flow, cap rate, cash on cash, internal rate of return, gross rent multiplier, resale value, you can use our portfolio analysis tool. We believe technolgy should work for people and not the other way around.

Price and Terms for Tools and Technologies - Unlimited and FREE

If you have suggestions of what you want to see on the Lounge, please let us know. We are open to learn and hear from you!

Remember to complete your profile and share with us what you know.

My journey and the outcome on this rehab was contrary to what I intended.

Hanh Brown (Investors Lounge Online) — Tue, 04 Mar 2008 09:36:08 -0600

My plans for my first rehab on a REO property that I bought, was to turn the property over quickly. simply because I wanted to build some cushion. My journey and the outcome on this rehab was contrary to what I intended.

I needed to get the cash immediately rather than later. I believe I bought right, 55 to 60% of the after repair value, family friendly neighborhood, great schools systems, etc. I figured whether the market was rising or falling, it should not play a great impact (except for how long it will take for me to resell the property). So, the question is, how long could I really afford to hold on to this property?

The rehab with the contractors went fairly well. (I've not yet had a rehab that has gone perfectly smooth). Fairly well, is the best of my experience in working with contractors.

I thought I wanted to be prepared and market this property (for sale and for rent to own) about 2 to 3 weeks before it was done.

I received lots of interest for this beautiful piece of property that I was very proud of the transformation that it had undergone.

First lead - professor at a local university; he is only here for a window of time with his wife, who is a student at the university as well. The family wanted to rent for a while before they are sure if they want to stay in the area. I asked about his credit .. (perhaps not in nice tone as I should of .. he seemed to be put of by that). The lesson I learn here is not all renters are credit impaired, (although, a good percentage of them are), I need to address all folks with the same level of professionalism, as apposed to them in desperate need of my house. At the end of journey, he was the one I wish I would have rented to!
Second lead - Gentlelemen going through bankruptcy with his house in foreclosure; he has below 550 credit score, etc. He could not give me any deposit down. Hmmm.
Third lead - Gentlemen offered a low ball offer on this piece of property that I was very proud of. Had this been an "as is property", I may consider his offer. But did you not see this is a fully rehabbed model house!!! He also wanted concessions in closing cost! He did not have any pre approved loan information! The nerve!
Fourth, fifth, sixth .. leads were all flakey. They were not all serious.
A family drove by this house while I was tidying up wanted to see the inside of the house. They loved it and wanted to sign the lease agreement right then. Their "story" was that they went back to their country for three months to help an elder sick parent, and their loan got sold to another lender while they were gone. The automatic payment did not get set up properly, so when they came back, they discovered all this foreclosure statements in the mail, (since the new lender did not receive payments for three months). They claim they had to sell their house to a friend to get some money and to not go in foreclosure. To make the story short .. we signed the lease agreement .. later I discovered, their checks bounced, and that their house never was sold to anyone (through title search); it had gone to foreclosure due to their own delinquent which was transpired from their falling and bankruptcy of their restaurant. This was the preview of the next 10 to 11 months ... Oh no .. I had to evict them, because I had to pay for the months their checks bounced .. and now the house is sitting empty!
One gentleman wanted to do a land contract (seller finance) to get the tax benefits but only could put down 2% percent of the purchase price .. this would not even cover first month's rent and sec. deposit. It is amazing how people want all the benefits .. newly remodeled home, tax breaks, and is not financially equipped to belong in this neighborhood!
There is an end to this saga! A family whose husband lost his job and with a wife who is working with adequate income to live in this neighborhood. They have bad credit as a result of a divorce and late medical bills. They have 3 children and are sincerely working hard to get their feet back up .. the house is theirs!

So, how long could I really afford to hold on to this property? Until the right tenant with the right credentials come along .. even if it means I had to pay holding cost. My personal experience is paying for holding cost (when the house is empty) is less problematic that dealing with tenants living in your house and not paying rent!

So now, I can use this property (it has equity despite of the falling market) as collateral. Perhaps I can use the rental income for my retirement years, or just pass it down to my kids. Or it could be used for their tuition for their college. Once this property is "free and clear," I have passive income from rents paid that gives me income even when I am asleep.

Every one has a certain style and some important questions to ask your self are

Do I need additional income now or in the future?
Am I in a high-income tax bracket that would be adversely affected by more income now?
Does my local real estate market present opportunities to acquire bargains, yet still command high rents that would cover my expenses if I need to hold on to the properties?
Do I have other income or savings that I could tap into in case my rental properties become vacant or need major repairs?
Is the local real estate market rising or falling at this time?
Does bringing in income now or later fit into my short-term and long-term financial goals?

Most investors start out flipping houses, and then gradually work into managing rental houses or becoming involved in larger, more complex real estate projects. Some people don't have the temperament to deal with tenants and the headaches that come with rental properties. Some look for side income by flipping. Others want to quit their jobs and make flipping houses their full-time business.

What is your style?

Isn't this extreme!

Hanh Brown (Investors Lounge Online) — Thu, 28 Feb 2008 12:37:20 -0600

I would like to share my experience with doing short sales. I have been successful with my marketing technique and have gotten a crazy number of leads over the past months. Let's say, out of a 100 leads I've gotten, 70% percent were candidates for a short sale. While the other 20% percent I would not even touch because they are not in my areas of interest, the extensive rehab, and lack of cash flow. The other 10% of the leads had their houses free and clear... possible wholesaling. So I have put my efforts in negotiating with the bank to do these short sales. What I've found out is not what I anticipated going into this. I thought I would get an unresponsive banker/BPO! But instead I got a motivated seller, in some cases, a motivated banker (BPO), but no where to be found, a motivated and a pre approved buyer.

Well, perhaps, the days of zero-down mortgages, which helped to fuel the real estate boom, are coming to an end! Those same mortgages have helped many buyers who lacked savings become homeowners in the past few years. But now, zero-down mortgages are seen as a risky lending practice as defaults rise and housing prices fall. So I guess the reduced pool of potential buyers will lead to further erosion of home prices! Wow a vicious circle!

Do you blame the lenders to be skittish and don't want to make a loan on a property whose value might fall in a matter of months, leaving the homeowner owing more than the home is worth. In the past couple of years, lenders got pretty loose with their money; now, they are retightening their standards, but isn't this extreme?

You have a lot of people who would buy right now because the prices are declining. They know it's a great time to buy, but they don't have the money.

Internet marketing, SEO, Real estate investment - http://www.investorsloungeonline.com/

Hanh Brown (Investors Lounge Online) — Tue, 26 Feb 2008 08:20:23 -0600

Please come and introduce yourself ! We love to meet you and learn more about your interest!

Investors Lounge Online is a networking community where like-minded people gain knowledge, share ideas, information, and resources and help each other achieve financial success through real estate related investments.

Our mission is to offer such sophisticated, powerful, useful, practical, and state of the art real estate investing online site that readers would continue to come back and recommend our site to other fellow investors.

Below is a list of services we offer

Browse through 700+ Free Real Estate Investing Articles
Browse through hundreds of free Real Estate Investing Articles to increase your investment education. Topics include creative real estate, wholesaling, rehabbing, asset protection, mobile homes ,1031 exchanges, hard money lenders, commercial real estate, IRA investing, landlording, lease options, no money down, owner financing, tax liens, and more.
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We'll provide you an Online Business Management System that not only pre-screens and pre-negotiates your prospects, but also totally automates your real estate business so you can work far less and earn much more! You'll get a "buy" and "sell" site for a fraction of the price of what is out there!
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Look through our suggested real estate investing products to increase your real estate knowledge and learn more about no down payment, rent to own, negotiating, passive income, creating cash flow, property management, and more.
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Apply for a hard money or conventional loans and be matched with the best interest rate and terms for your needs. With online lenders, you can get mortgage and loan quotes from the comfort of your home without ever visiting a local bank branch.
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If you are an Accountant, Appraiser, Commercial Broker, Contractors/ Handyman, Investment Club, Mortgage Broker, Note Buyer, realtors, Rehab Money lender, Title Company, Venture Capital, Wholesaler/ Rehabber, sign up to be on our site as a vendor and network with fellow readers who may be looking for you to be on their power team. This enables investors to make contacts anywhere in the country to conduct business.
Locate a REIA in Your Area
Surf through the most current real estate investment club list to find local real estate investors near you.
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Don't have a website, use ours to place your investment properties! Advertise your property right now and get instant worldwide exposure for your Property Listing - 24 hours a day, 7 days a week! . Since your page is accessible directly from Investors Lounge Online, you will automatically be able to take advantage of our search engine "spider friendly" technology to bring traffic to your property GLOBALLY.
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Calculate real estate cap rate, yield, gross rent margin, cash flow (before & after tax), rate of return, and much more. Estimate the impact of changes in market assumptions such as property appreciation rates, vacancy rates, rent, and expenses. You can download your property analysis reports in PDF format for easy saving, printing, and sharing.
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