Real Estate Investing in the Lehigh Valley

Peruvian Child with Brain Tumor needs help in Washington State

Jim Barbour (Markward Group) — Wed, 02 Jul 2008 08:04:14 -0500

Greetings everyone. Time is of the essence with this so I thought that this would be another good place to ask for help for this boy. My friend has spent a lot of time and money helping in Peru after the massive earthquake they had there. One of the friends he made is the Godfather of this child, and the only thing they need now is a safe and comfortable place for him to stay while in the US. The child's parents aren't allowed to travel with him, so he will be alone. If there is anyone in Washington near the hospital below that could offer this assistance, I would be happy to forward your information on to the organization.

If nothing else, please keep him in your prayers.

Thanks,

Jim

Message follows:

From: Romulo Fernandez [mailto:roferbaya@gmail.com]
Sent: Thursday, June 26, 2008 11:38 PM
To: Paul Breitfeld
Subject: Help needed

Dear Paul.

Before I mention the objective of this setter, I'd like to greet you and Jane, I hope you both are fine.

The objective of this letter is to ask you a very special favor. There is a 11 year old boy in Cusco in which head doctors have found a tumor, and they say it is not possible to be treated here in our country. His parents have tried everything is possible in Peru but they have been told that the boy is going to live only for six more months, because a biopsy could cause him death, however there is a chance of taking the boy to a hospital in the US (*) to be treated there where this hospital has offered a solution to this problem, it is a Human Organization that is making it possible, in fact they are going to afford the medical expenses, but we need a place where he can stay in this city.

I'd really appreciate it if you could do it since it is the only chance the boy has to continue living, it's the only opportunity to save his life.

Greetings,

Romulo Fernandez Baca

(*) The hospital is: WESTERN WASHINGTON CHAPTER HEALING - THE CHILDREN

The address is: 225 - Colby Avenue Suit 3

PMB 178 Everett, WA 98201 US

Sell Now Because Things Are Bad And Only Getting Worse!!

Jim Barbour (Markward Group) — Thu, 12 Jun 2008 09:03:33 -0500

Hello everyone. I hope that I got your attention, because I have some thoughts to offer, but first I must apologize for my absence here. Between business, preparing for my wedding in a couple of months, putting on a golf tourney fundraiser, and being Master of my Masonic Lodge, it really hasn't left much time for writing. However, I did want to get back here while I had a breather.

So, I thought that I'd write a state of the Valley Commercial Real Estate Market from my perspective. First, I'd like to say that this has been an interesting period due to so many variables being in play with the economy, jobs, gas prices, interest rates, etc. While I really don't see too much of a downturn in the economy as a whole, except for certain specific industries and areas, the talk in the press has been very negative with very little substances to their reporting. I believe that just being in the press convinced many people to just sit on the sidelines or take rash actions unfounded in reality. That said though, I have been seeing many businesses expand as well as starting up. The people doing this tend to have a strong capital position and didn't need to rely on loans and lines of credit. I have completed quite a few deals for retail leasing over the past few months and all of the owners have spoken about a continued strong demand for their products and services.

One thing that I haven't seen is as many investment properties coming on the market as I expected to see by now, although, the ones that are there are at higher cap rates than previously seen for the valley. This is a good thing for investors, and those that want to be successful in investing need to seek out these opportunities and not wait until the papers say things have turned around, because by then it will be too late, and they will be buying high to sell low instead of the opposite. This is why you need to be organized and ready to move when an opportunity shows itself.

This means that you need to have capital ready to invest, lines of credit, or know that you can get a loan for a property. Be 100% sure that your credit scores are accurate and kept at high levels. Be sure that you have discussed your plans with your accountant to get advice on your direction from a tax planning perspective, and have a good loan broker to complete the deal when it happens. The people who make money are the ones that are prepared to act when things are bad so that when things return to good, they will have made the most money. I know that it sounds crazy and opposite of most things you have heard in your life, but if you do your research, you will find that the people who are thought to be crazy in times like these are the ones who have long-term success.

So, I wish you the best and hope that you will take the time to do your homework and prepare to be successful. Be passionate in all you do and give thanks for all of the blessings you have received, because if you are reading this, it means you are blessed with the ability to read, think, and have access to a computer. It also means that you are blessed to have men and women that have volunteered for military service and are fighting to keep you and your country free! It is because of them that I have the freedom to write here and I thank them for there service and pray that God will keep them safe.

Till next time, I thank you for reading.

Actual Story of How Not to Own Investment Property

Jim Barbour (Markward Group) — Thu, 06 Mar 2008 14:01:50 -0600

Hello all. I just thought that now is a perfect opportunity to share with you. Recently, I was asked to give a price opinion on a property that is in pre-foreclosure. Without giving too much information, I'd like to relate what transpired, and use it as an example of what not to do.

The property is an 8 unit with a mix of 1,2, and 3 br/ 1 ba units. The current owner purchased it with only 1 vacancy for approximately $500K. Based on what I know at this time, the purchase price was probably in line with market values. At this time, there are 4 tenants with only 3 paying tenants, hence, the owner is in pre-foreclosure.

The owner is from out of town, and decided it was best to offer free rent to one of the tenants in return for doing the management and maintenance. This works out to be about 8.5% of 100% occupancy Gross Income. The building has at least some roof damage that appears to have been there for quite some time, and the landscaping is poor at best.

Now, let's examine values apples to apples. Under the current operation and with the current occupancy, there is a Gross Income of $33,000 and Net Operating Income of $18,350/Yr. If we use a simple capitalization rate of 10%, that would put the current value of the building at $183,500 and a negative cash flow.

Now, let's look at it if managed properly. At 100% occupancy, at fair market rents, the Gross Income would be $70,200/Yr. The yearly expenses not included in the current condition are Management Fee of 6%, Vacancy Rate of 5%, and reserves of 3% of the Gross Income. This leaves a net operating income of $51,722 / Yr. Using the same capitalization rate, this puts the value at $517,220 with a nice positive cash flow.

So, what does this show you? From a purely numbers perspective, you have a property that might be valued over $300,000 less than it should be. From an operational perspective, it tells the tale of what happens when you try to operate an investment property from out of town without using professionals to manage it. Not only does it cost you more in your cash flow, but it also significantly decreases the overall value of your property.

The above information just reinforces why I always preach about utilizing professionals when you are dealing with any business, which this is a business. They may cost you a bit upfront, but in the long run, they will help guide you to make your venture successful. Please, please, please heed my warnings on this. Otherwise, you will pay for it in the long run through loss of equity, negative cash flow, foreclosure, or bankruptcy.

As always, should you have any questions or comments, please feel free to leave them here or email me or call me directly at jbarbour@markwardgroup.com or 610-967-0538.

Thanks for stopping and have a great day,

Jim

Lehigh Valley Investment Property Current Conditions and Outlook

Jim Barbour (Markward Group) — Fri, 01 Feb 2008 12:50:00 -0600

Well it has been a while since I’ve written, so I thought it was about time to put in my 2-cents.

It has been a crazy time over the holidays with all of the market corrections. The market for retail lease space has been absolutely nuts with quite a few businesses opening up or expanding. Although the types of businesses have been varied, the majority of them have been food or entertainment related, there have been other sporting or even clothing stores that have started. This area isn’t my primary focus, but due to the demand, I have been quite involved.

Now, here’s some info on my area of investment properties. Even I have been a bit surprised at the significant shift within the Lehigh Valley Market. Many of the properties that have been on the market for quite some time have drastically changed their prices. More and more are adjusting to show cap rates of >10% as well as the new ones coming onto the market starting out at or above this cap rate. I fully expected the investment market to adjust, but not quite this quickly or to this level already.

As things continue to progress, the opportunities will continue to grow and for those that are ready to take advantage of them, they will have quite a selection. The people that bought when the market was hot without regards to returns are now finding themselves in over their heads and now need to dump unprofitable properties. This leaves a void to be filled by the qualified and experienced investor, or by those that are being guided by experienced investors.

My belief is that this correction will only serve to improve the rental market in the valley and increase returns to the smart investor. So, start shopping now and when an opportunity presents itself, be ready to jump on it without feeling bashful about asking for a discount.

If you are looking for someone to guide you in growing your portfolio or in getting started, please feel free to contact me either via email: jbarbour@markwardgroup.com or phone at 610-295-6119. Be sure to visit my company web for all of our listings at: http://www.markwardgroup.com.

Thanks, and as always love what you do and live with passion!!!

Jim

Success for You in 2008

Jim Barbour (Markward Group) — Wed, 26 Dec 2007 11:28:53 -0600

Hello everyone. I hope that you all had a Safe and Merry Christmas or any other Holiday you may have celebrated. There is still some time left before the new year begins, and if you haven't already done it, you need to make appointments with yourself to set and then review your various goals; personal, business, financial, etc. You really should be reviewing your goals at least monthly, if not weekly, to determine your progress, what new steps you need to take, etc.

I believe that the upcoming year is going to be a great year for real estate investors that know what they are doing. I say this, because I believe that we will be starting to see properties come on the market that were bought improperly. There were quite a few people who thought that real estate is a no lose proposition, and jumped in headfirst without properly analyzing their properties before buying. They thought that you can buy an investment property regardless of the numbers, hold it for a time, and then sell it for a profit. They did not understand the concept that you make your profit when you buy.

So, with all that said, you may be asking, "Where are all the properties?" My response to that is that I am beginning to see a few properties come on the market where the sellers are pressing to sell quickly, but they still aren't being priced reasonably. The longer they stay on the market, the more they will understand that the properties need to be priced based upon income and not on a ridiculous value based on speculation. During that time, others will be coming on the market priced to sell quickly and based on income/expenses.

Please remember that doing the opposite of public/press concensus is usually the winning strategy as long as you understand the reasoning behind the public opinion, and you don't blindly invest. Always remember to thoroughly evaluate any investment and utilize your advisors for their opinions.

Think Big, Grow Rich, and Live Your Life with Passion,

Jim Barbour
jbarbour@markwardgroup.com

610-967-0538 (Mobile)

Tis the Season?

Jim Barbour (Markward Group) — Tue, 04 Dec 2007 08:13:03 -0600

The neighborhood was bustling preparing for the season to come
But very few people knew it was offensive to some

How were they to know that when shopping for gifts at the mall
They weren't allowed to call them Christmas presents at all

Although they were Christians and it is the time of the year
They were told to be quiet and not wish Christmas Cheer

So thanks to the courts and the ACLU
I cannot say Merry Christmas to you

So, it is with much regret that I must say
Seasons Greetings to you. What a big load of hay!

Happy Thanksgiving - Be Safe and Focus on the Important Things in Life

Jim Barbour (Markward Group) — Wed, 21 Nov 2007 11:25:03 -0600

Hi everyone. I just wanted to take a minute to say thanks to everyone for stopping by my blog. I hope that you all have a very safe and enjoyable Thanksgiving holiday. For those going into the woods this weekend or next week as in PA, enjoy your time in the field and be sure to wear your orange!

Till I return after my excursion afield, live with passion and with an attitude of thanks.

Jim

Money, Credit, and Investing

Jim Barbour (Markward Group) — Mon, 19 Nov 2007 14:10:03 -0600

Greetings everyone. After a bit of a sabbatical here, I am back. I thought that I write a bit about money and credit. I'd like to start off by saying that if you have no extra money at the end of the month and no significant savings, you need to evaluate why. Is it due to some extraordinary life event such as a death, divorce, or some other unforeseen happening. If so, and you previously did have extra money, then this will not apply. However, if you are like so many others, you should evaluate your source(s) of revenue and your expenses to determine where you can cut back on your expenses and also how you can increase your income so that you have even as little as $2-300/month left over.

Chances are that if you are just breaking even each month, you have gotten yourself to that point by spending money that you don't have on things that don't matter and that you don't need. You buy these things using your credit cards. Now, I am not an advocate of eliminating your credit cards, etc. On the contrary, I am very much in favor of using them for things that do matter such as starting a business, etc. rather than buying trinkets such as boats, cars, etc.

Ultimately, what you want to have on your credit cards is 50% or less of the total available credit. By doing this, it will positively help your credit scores. You also want to be sure that you don't close any of your credit accounts. This is because the greater the age of an account, the more it helps your score.

You want to take the extra money you bring in monthly and apply it to your account with the lowest dollar amount required to get it below 50%. Once that account is below 50%, do the same to the next highest account, and so on. Once all of your accounts are below 50%, then you can start paying them off one at a time.

Once you are below 50% across the board, wait about a month or so to pull your FICO scores. You can do this at myfico.com. You also want to start setting aside money each and every month to build yourself a cushion as well as to begin building capital for investing. Please realize that this is a process, and as slow as it may seem, you need to remember how long it took you to get to this place.

During this process, you should begin searching for a real estate investment club local to you. This will help aid you in your learning process as well as put you in contact with other like minded individuals. You may also be able to find someone that you can partner with to increase the investments available to you. Just take your time, and be sure to do your homework as well as utilize professionals to assist you in moving forward. This includes attorneys, financial planners, etc.

This should be a good start for you, but for even more assistance, you should use a financial planner to help you lay out your plan of attack from the beginning. I went years without one, and now kick myself every time I think about it and the money that went out the window.

Till next time everyone,

Be happy and enjoy your life.

Real Estate Investing Knowledge

Jim Barbour (Markward Group) — Wed, 31 Oct 2007 07:41:02 -0500

Over the years, I have been asked by various people about where to find information about real estate investing. So, I thought that I'd make some recommendations on some books I have read through the years.

First, I think that you should explore the Rich Dad series of books, but more especially, Rich Dad Poor Dad, The Cashflow Quadrant, The ABC's of Real Estate Investing, and Retire Young Retire Rich. This entire series is extremely informative, but more importantly, they really get you to begin to shift your thought process from that of an employee. Even being a serial entrepreneur, they helped me continue my process of learning to live without wanting a paycheck. They also teach you how to creatively look at investments. You may find them at your bookstore, library, or online at www.richdad.com

Second is, "The Complete Guide to Real Estate Finance for Investment Properties by Steve Berges." This book really does a fantastic job of taking you through the process of buying investments properties from searching to evaluating to financing to closing as well as information about the various types of real estate investing that is available.

Last one I want to recommend right now is not really a real estate investment guide, but rather a personal improvement book. Now don't laugh at me, but I really have been motivated to do many of the things through the years and improved my life by using his Personal Power II tapes/cds. I bought the program probably 10 years ago, and have continued to pull out one or another of them for a particular topic every so often.

I hope that these give you a little guidance, and I look forward to any other comments and suggestions anyone else might have.

Thanks for visiting and HAVE A GREAT DAY!!!

Jim

Great Investment Property W/ Owner willing to hold paper

Jim Barbour (Markward Group) — Mon, 29 Oct 2007 12:24:52 -0500

Hey investors. I have an excellent lead for a 9-unit property with a 5k sf warehouse. It has a nice cap rate and the apartments are 100% rented. There is a good opportunity to increase cash flow during any turnover due to the rents being lower than market rate currently, and long-term the possibility of converting the warehouse to additional apartments.

If you are interested and would like to see the income/expense sheet, please email or call me at jbarbour@markwardgroup.com or my mobile at 610-967-0538.

Thanks and good hunting,

Jim

What is your Area of Expertise?

Jim Barbour (Markward Group) — Thu, 25 Oct 2007 14:38:25 -0500

Yesterday, I had a meeting with an owner of quite a few multi-unit investment properties. In our meeting, he told me how he can't see listing any of his properties with an agent ever again. This was due to a very negative experience he had with one who listed a property, didn't market it until the listing was about to expire, and then when he had a deal, almost caused the deal to fall apart due to the agent's inexperience.

I certainly understand agents wanting to get listings. However, I think that it does a huge disservice to the industry and agents as a whole when an agent takes a listing for a property type with which they are unfamiliar.

When a residential agent takes a listing for a commercial property (5 units and up is a commercial property) and has no experience with that type, they are going to get themselves in over their head. They will not have the knowledge of how to market the property, or the additional resources above and beyond the local MLS, and probably will not price the property correctly.

I believe that it is essential that all agents should specialize in a property type and should refer listings that don't fall in their area of specialty to another agent or partner with one whose specialty it is, preferably in their office, that is an expert in that property type. By doing so, the agent will make the owner more confident in that agent, and that owner will probably do business with that agent in the future for properties of their specialty. It is nice to try to be all things to all people, but in doing so you will not be able to give them the level of service and representation that they are paying for.

I will only take individual listings for investment properties. If I receive a request to list a retail space for lease, I will partner with another agent within Markward Group that is absolutely the best and has a vast network when it comes to the retail market; Derek Zerfass. Likewise, if I am asked to list a piece of property that has a potential for developing it, I will partner with Sean Murray who has that vast network of developers as well as the experience to look at a property and determine the potential.

Also, by becoming an expert in one field of real estate, you will establish your brand and will be the go-to person for that area. If you are a jack of all trades, your name will just be thrown amongst the thousands of other agents in your market.

So, become that expert in whatever field of real estate you choose, and become the go-to person in your market.

Oliver Goldsmith is quoted as saying:
To aim at excellence, our reputation, and friends, and all must be ventured; to aim at the average we run no risk and provide little service.

Live with passion!

Jim Barbour
Markward Group
Allentown, PA
610-967-0538
jbarbour@markwardgroup.com

Credit Scores and Investing - Are they important?

Jim Barbour (Markward Group) — Tue, 23 Oct 2007 08:35:26 -0500

O.K. I think that it's about time that we talk about this dirty little word; CREDIT. First of all, is it necessary for you to have a perfect credit score in order to get a mortgage? The easy answer is no. However, it is important to note that the lower your credit score, the higher your interest rate will be and vice versa. So, now you know what the impact will be on your investing, the next thing we need to look at is how to get your actual credit score.

There are a multitude of websites out there that allow you to view your current credit score, however, you need to be extremely careful that you are not viewing a score that isn't a FICO score. The FICO score is the one that the majority of lenders use to judge your creditworthiness. WWW.MYFICO.COM is one of the places that gives you your actual FICO score based on your Equifax Credit Report for about $10. Once you view your credit score, you should pull your credit report from all three major credit bureaus. You are allowed to view your credit report for free once a year from all three, and can easily be done at http://www.annualcreditreport.com/.
If you have a credit score below 700, you should evaluate your credit reports to see if there is any derogatory information on there that shouldn't be. If you find no errors, you can then look at the factors that are causing your credit score to be lower. Some of the major things are the opening of new accounts, high balances, closing accounts, late payments, and charge offs.

Let's look at these as a start.

Closing accounts: The older an account is, the more it will help your score. So, typically speaking, you shouldn't close any accounts. Even if you aren't planning on using them, you need to keep them and use them once a month or so and just pay it in full each month.

Opening accounts: Maybe I should also include inquiries here as well. If you are opening new accounts, you will also be getting new inquiries. These will be "hard" inquiries and will negatively affect your score the more there are. It will also show that you are adding more and more available credit, which in the long-term can be good, but short-term it will be a negative.

High Balances: This is where you are regularly keeping over 50% balance to your credit limit. Please remember that even if you are paying them off monthly, it will depend on when the company reports your credit balance. So, in reality, you should never use more than 50% on any one card.

Late Payments and Charge Offs: These two are what most people think of when their credit scores are low. While you really should be careful to pay on time and pay your debts in full, the older the activity is, the less it affects your score.

Now that you know some of the ins and outs, I would like you to think about what you can do to improve your score. If you are planning on getting into investing in real estate, it is time for you to meet with a mortgage broker to determine what your credit standing is, if you need to improve it, and how much of a mortgage you can qualify for.
Remember that your credit score is your financial report card. The banks don't care what grades you got in school. They only care what grades you are getting in your financial life.

Remember to live your life with passion, be grateful for what you have, and plan for your future. If you aren't passionate, make some down time to sit and think about what will make you passionate. If you think you have nothing to be grateful for, do the same thing and write down all of the things you have to be thankful for; they can be a loving wife, a roof over your head, food in your body, whatever. If you haven't planned for your future, take the time to do it. Where do you want to be and what do you want to do in 1,5, or 10 years? How will you achieve those goals?
Check back here soon and I will be discussing these topics as well.

Till then, be well!

Jim Barbour
Markward Group, Inc.
5925 Tilghman St #600
Allentown, PA 18104

610-967-0538
jbarbour@markwardgroup.com

The Real Estate Market is Hurting - What Should You Do? Buy!!!

Jim Barbour (Markward Group) — Thu, 18 Oct 2007 10:36:08 -0500

It seems to me that there is nothing but negative press out there regarding all types of real estate. In doing this, the press is doing its best to influence the real estate market in a downward trend rather than being impartial and reporting on actual numbers, true comparisons, etc. While I have my own opinions of the press and the poor job that most of them do on reporting in an unbiased manner, that is not important here.

I want investors, especially novice investors, to hear this loud and clear. You need to think from an opposing viewpoint. When the press is negative, and real estate prices are being depressed, you need to begin to buy. Don't get me wrong, I am not advocating you to buy any and everything you see or throw good sense out the window. However, it is during this time that some of the best deals will come on the market. They will typically come from novice investors that hear the negativity and buy (actually) sell into it. They will be nervous and anxious and even though they have a profitable property, they will think that it is too good to be true. There will also be those investors that are just ready to liquidate a property or properties and don't want to wait for the turn-around. So, they will be selling at the current market rates, which will be lower than they would have been even a year earlier.

It would be nice to be able to buy at the lowest point and sell at the highest, which is impossible to predict. All you can do is use the best information available, research the market, and ensure that any purchases you make are profitable now, not in the future.

If you haven't begun to look for your next, or first, property yet, you better get started! The people that think in opposites, do their homework, and buy properties that are profitable now, are the ones that will be successful in any market.

As is with all of my posts, these are only my opinions and should not be construed as legal or investment advice.

Thanks for reading and good luck in your hunt!

Jim

Hottest Real Estate Investing Program to Get Rich

Jim Barbour (Markward Group) — Wed, 17 Oct 2007 07:52:31 -0500

Got your attention, didn't I? Well, now that you're here, I'd like you to stay and read awhile.

I've been doing some thinking about why there are so many real estate gurus out there selling this program or that and why 90%+ of the people buy the programs but never do anything with them.
I would like to believe that the purpose of these gurus is a moral one in that they are trying to help people get out of there day to day lives of working for someone else and being under their control. Let's assume for a moment that they all are trying to help others by telling them how they did it. If they are, you would think that they would evaluate how many people never use their program, and determine why not. Once they had that information, they could modify the program or have other offerings that would allow more people to move forward and improve their lives.

While I am very much in favor of acquiring information that gives more alternatives for purchasing Real Estate, I am even more in favor of Real Estate Professionals taking the time to learn for themselves and then sharing that information with their clients or potential clients.
If you are someone that is currently an employee of any company or government office, and think that you have job security, you are sorely mistaken. The days of working for a company your entire life, retiring, and getting a pension are gone. It hit home with my mother working for West Penn Hospital as an RN for 39.5 years. 6 months before her scheduled retirement date, she was laid off, which in turn reduced the amount of pension she would receive.

Real Estate Investing is one path that can help you make the transition from employee to business owner. However, before you begin to make the transition to investor, business owner, or whatever, you need to take some time to think and ask yourself some questions.
What are your goals to allow you to retire? For example, what is the monthly cash flow you will need to allow you to keep the lifestyle you enjoy? Forget about Social Security. It won't be around, nor sure it be, in the current state.
What will make you happy? It isn't money in and of itself. Money isn't relevant to happiness. If you aren't happy now, having excessive amounts of money won't make you happy. It most likely will make you more depressed.
Are you willing to take the time to learn about this business, and find the right advisory team to help make you successful? No successful company is run by one person. It is always done by a team of people and advisors. This is no different in Real Estate.
Are you too scared to get started? If so, you need to determine why. Sometimes it is the naysayer's comments to you that it is too risky, takes too much time, requires you to be on-call 24 x 7, etc. Sometimes it is the lack of information or too much information. Rather than letting your fears consume you and prevent you from moving forward, why not find a successful investor that started with nothing and built a portfolio. Many of these people are easily accessible and extremely willing to talk about their successes and failures. Remember also that a failure is only a failure if you don't learn from it. A failure only shows you a way that doesn't work. Try again, but don't do it that way the next time.
There are other things to think about, but these will give you a start.

Check back again soon for suggestions or ideas on how to improve your life now.

Creativity and Real Estate Investing

Jim Barbour (Markward Group) — Mon, 15 Oct 2007 13:53:14 -0500

Many people don't think that these two words go together, unless they have watched the late-night no money down gurus. However, I believe that these two words should be intertwined, and I'll tell you why.

Let's say you have a property that is an excellent buy with a cap rate of 15%. The problem that you have is that even though you have excellent credit, you don't have enough cash reserves available to purchase the property. What do you do? Do you just walk away and say, "I wish I had the money?" That's exactly what many new investors would do, and there are many agents that would tell them to bide their time with patience until the right deal comes along. As an agent, wouldn't it be better to give your client an alternative where they might be able to acquire the property?

What are the alternatives, you ask? How about the seller holding a note? (I know that's a guru answer, but it works..) How about another funding source? Many mortgage brokers have investors that are willing to lend on non-standard real estate when banks or others are not. What about using equity from your home or another property as security? There are many other options available, and as an agent or investor, you should be aware of them and have resources you can turn to for answers.

How about creatively looking at a property? I believe that it is the person that is able to look at an 1800's style house in poor condition, but in a growing commercial area, and say, "why can't I convert that to a restaurant and apartments?" that will be successful in investing. It won't be the one, who looks at the house and says, "Who in their right mind would buy that house?" For that matter, what about a vacant piece of land? The successful investor look at a piece of land, decide if it can be improved, and see what the long-term highest and best use will be.

I guess what I am trying to say is that in order to be a successful investor; you really need to do your homework and understand the area. You also have to ensure that you aren't looking at an investment property the same way you would look at your home to purchase.

Think creatively and you will see a whole new world open up before your eyes. Remember that a coat of paint can increase the value of a property by thousands, but will only cost hundreds. Real estate value is unlocked by the eyes of the beholder.

Why the Lehigh Valley

Jim Barbour (Markward Group) — Thu, 11 Oct 2007 12:40:53 -0500

Compared to most of my acquaintances, I am new to the Lehigh Valley. I have been here about 8 years, while most of them have been here for generations. This is the longest I have lived anywhere other than where I grew up which was near Pittsburgh in a town called Monroeville where I was for 19 years.

I lived in Maryland for 5 years, Northern California for 2, Michigan for 1, and Minnesota for 2. Of all of these, the one that I enjoyed most was Minnesota more for the people and the outdoors things than anything else. However, none of them offered as much as the Lehigh Valley does.

When people hear Allentown, they think back to the song by Billy Joel. Prior to moving here, I was one of those people. Only because I had never been anywhere close. Since moving here, I have been finding more and more reasons to stay, even though it takes me from 3-6 hours to visit any of my family members.

Where other than the Lehigh Valley do you have entertainment of all sorts, unique and special venues such as the State Theater, skiing, fishing, hunting, boating, etc. within minutes of where you live? It's location is unique in that you only have to travel about 2 hours East to get to NYC, 2 hours south to get to D.C. and the Inner Harbor, 1 hour south to get to visit the Historic city of Philadelphia. Speaking of history, there are so many historical events, places, and people within this region that you could probably spend your whole life going from one to another and still never see or learn about them all.

As for your personal home, you have as many choices as you can imagine. If you like being in or close the city, there are nice, safe homes. If you like the countryside with a large property, but don't want to be too far away, there are many of them. I could just go on and on.

From an investor's perspective, there are just as many opportunities available. Regardless of whether you want an existing investment property or you want to develop your own from raw land, there are many deals to be had out there. While the previous market conditions did throw some property values out of sync and there are owners that are still reaching for the moon, if you know what and where to look for the well-priced properties, they can be had.

If you are ready to get started, give me a call or send me an email and we can explore the great opportunities that wait for you in the Lehigh Valley!

Real Estate Investing 101

Jim Barbour (Markward Group) — Tue, 09 Oct 2007 09:17:56 -0500

Every day on the radio, TV, papers, and magazine, I read and hear about this program or that for how to make millions in real estate with little time, no money, and no credit. As I have stated before, there are ways to accomplish this, but little time, especially when getting started, should not be one of the goals. I am not saying that it needs to be a full-time job. I am simply saying that in order to be successful in investing, it is necessary to first realize that this investing is a business and should be treated as such, and you are an entrepreneur and should act as such.

What this means is that you need to determine your goals with this business. Are you doing this to create cash flow to allow you to quit your job and invest full-time? Is it that you are planning for retirement and are looking to invest to create a portfolio of assets with a reasonable cash flow?

In other words, what you need to create is a business plan. It doesn't have to be a 45 page book. However, it should be clear about the strategy, your short and long term goals, who you are going to have as advisors, and what type of liquidity you need now and in the future.

Just like investing in the stock market, there have been people that have made millions when the market goes up, but when it goes belly-up they lose all their investments and maybe worse, they lose their personal lives as well. The key is to have as much information, as many resources (experts) as possible and alternative strategies to employ depending on the market conditions and any changes in your personal goals. It is possible to be successful in real estate investing when the market is going up, down, sideways, etc. This is not to say that you can never lose when you invest. What I am saying is that it is possible to minimize your risk exposure overall regardless of market conditions.

In order to succeed in anything, you need to plan, research, prepare, seek advice, and deploy. Once deployed, then you can examine your results and determine changes you need to make. Don't let yourself become mired in analysis paralysis, but also don't go pulling the trigger without planning or you may find yourself at the wrong end of that gun.

See you soon!

Live and do everything in your life with passion!

Emotions and Real Estate

Jim Barbour (Markward Group) — Wed, 03 Oct 2007 13:30:08 -0500

Here's the hot topic for Real Estate Professionals to be able to address regardless of whether the area of focus is Investment or Residential properties; Emotional Response.

OK. Let me first ask the question, "When is an emotional response to a purchase decision acceptable and when is it not?"

My opinion with residential purchases is where the buyer and family will be living in the property, and the agent has done their job of prequalifying and eliminating those properties that don't meet the financial status of the purchaser, a purchase decision will be made more from an emotional perspective rather than a rational or objective one.

An objective one would look at the long-term return on the property, work needed to be done, quality of the house, etc. while the emotional response is one that focuses on how the house looks now, the neighborhood, amenities, will the family be happy and comfortable in it, etc. Making a purchase solely based upon one or the other in this case probably isn't the best approach. I believe that a mixed approach taking all or most of these issues into account is the better way to go.

When it comes to the purchase of an investment property, any investment property, there actually should be no emotional response involved. Investing in Real Estate is a business and as such any buying decisions should be made solely on the merits of the return on investment, and if it makes business sense. If one allows himself to become emotionally involved in the buying process, that person then opens up the possibility of buying something that will end up losing them money. I believe that is why it is critical for the novice investor to never look at a property either by picture or in person until they have reviewed the financials to determine if the property meets or exceeds their investment goals.

As an agent for a novice investor, I believe it is my duty to fully understand the investor's criteria for success, their motivations, short and long - term goals, how adverse they are to risk, capital to invest, etc. before even presenting them with one property to review. It sounds like a very long process, however, I created a quick worksheet for myself to ensure that I get all of this information up front, and have found that it only takes a few minutes initially, and then gather any remaining information in follow-up conversations. Once I have that information, I can then present the financials for properties that make sense for their investment criteria, and if interested, then do a showing.

So, the bottom line is that I truly believe that emotions are a necessary part of purchasing real estate intended for personal use. However, they really have no place when purchasing for investment only. Although, I do want to clarify this a little bit. I do believe in using a gut check. What I mean is that when I am going to purchase an investment property, if I have a negative feeling that isn't necessarily supported by the numbers available, but is due to a feeling that I am not being given all the facts or valid facts, and I can't resolve it, I will walk away. I will not buy a property just because of the landscaping or because it is "quaint."

Funniest Occurrence on a Showing

Jim Barbour (Markward Group) — Wed, 03 Oct 2007 09:40:27 -0500

Sorry for being inactive again for a couple days. I've been doing a number of property tours, and I thought that I'd share a little incident that happened to my client and me on Monday while we were walking vacant properties.

We visited about 4 properties with no real problems other than some unexpected poison Ivy. The next property we visited was situated near a creek and surrounded by burms. We decided to explore the creek bed to look at the vegitation, and any evidence of recent flooding. While walking along, we looked upstream towards the nearest developments. Most of the area is overgrown with a lot of old growth trees, however, this is park land and there is an area with a couple of picnic tables.

Well, it just so happened that upon one of the tables was a couple that was getting back to nature, if you know what I mean. Even though we were not being quiet in the least while walking and talking, this couple was totally oblivious to us and kept right on going..

Thankfully my client was good-natured about this, as we wrapped up the tour having a good laugh about what we stumbled across.

So, I guess my question is this, "What is the funniest thing you have had happen while with a client?"

Allentown Revitalization - A New Hope?

Jim Barbour (Markward Group) — Thu, 27 Sep 2007 12:12:31 -0500

OK, maybe my age or love of Star Wars is showing here, but I do think that there is at least some relevance relating to good vs. evil. The good being the reversion to being a family oriented town with destinations suitable and safe for families, and the bad being the gangs and drug violence that seems to pervade the news stories about Allentown.

Last week, Louie Belletieri spoke at the dinner preceding my Lodge Meeting. What he related was a list of things that are being done to attract businesses back to Allentown, and to improve the ease with which people are able to come to town. He also made the statement that comparatively speaking, Allentown's crime rate is lower than the majority of other cities of similar size. He also stated that the majority of violent crimes are criminal on criminal such as gangs and drug dealers. While I haven't taken the time to research those statements, I would tend to believe it based on my experiences living in other areas.

He then went into the various programs that are being offered to businesses to attract them to open in Allentown. There are various grant programs up to $50,000 as well as low interest loan programs that can significantly reduce the capital expense of opening a business there. They are also trying to create somewhat of a restaurant row. The bus routes have now been moved off of the main street, Hamilton Street to a parallel street. This has moved a lot of the riff raff as well as the buses off the main drag. This makes it much easier to drive and park when going to center city.

I personally believe that the 2 remaining very important issues are an increased police presence to give the feeling of security and also hopefully to move the criminal element away from center city, and the other extremely critical issue is to get the taxes under control. Allentown evidently has not learned the lesson of other similar cities such as Pittsburgh where they taxed the businesses until they finally moved away. I don't believe in corporate welfare, but if they can't reduce the overall taxes quickly, and want to attract businesses, then they should be offering tax incentives and abatements. In our society, there will be a need for taxes, but they need to be reasonable and the monies spent for true government services such as fire and police.

If you need any more information on the Allentown programs, feel free to contact me via phone or email.

Thanks and have a great day!

Fishing for an Investment Property

Jim Barbour (Markward Group) — Wed, 26 Sep 2007 12:22:22 -0500

I guess this is somewhat of a follow up to one of my previous posts regarding taking care of yourself, but at the same time addresses interesting ways to advance your investments.

If you're an investor that also likes to fish, here's a fun idea. Go to Erie, PA and do some fishing for steelhead or one of the other excellent fish available there, and then use it as a business expense by purchasing investment properties there. I grew up spending my summers there fishing and working, and don't get back more than once a month now, but I do spend time researching the properties there and there are certainly some excellent opportunities waiting for you. This is especially true on the smaller 1-4 unit properties where it is not unheard of to have a cap rate of over 12%. There are also several property management companies that do a great job at a good price to take care of your properties when you go home.

Take some time to research what is out there, plan a trip, and schedule some showings. Once you've seen the properties and made an offer or two, get out to the lake or the bay and either fish from shore, or rent or charter a boat. The fishing there is fantastic with the real possibility of catching a record fish. Depending on time of year, there are Walleye, Steelhead, Lake Trout, Perch, Largemouth and Smallmouth Bass, Northern Pike, and Muskies to be had. An excellent resource for fishing reports is http://www.fisherie.com/. There are reports on there from both individuals as well as from the Charter Boat Captains and the Fish Commission.

I'll probably be heading up there this weekend, but if not, it will be very soon. Feel free to email me or put some comments here if you'd like any more information related to either of these subjects.

Also, if you're not from the PA area, I would imagine that there are similar opportunities in your state. So, take some time for yourself and for your investments and kill 2 birds with one stone.

As always, make sure that you use a tax professional to determine deductibility, etc. I am not a tax professional nor is this tax advice just my personal thoughts.

Physician Heal Thyself

Jim Barbour (Markward Group) — Tue, 25 Sep 2007 13:23:15 -0500

Sorry for the delay in posting this. It just got real hectic over the past few days.

Are you simply good at what you do, do just enough to get by, or are you great and getting better? Do you even know where you stand? It doesn't matter whether you are a real estate agent, entrepreneur, or leader of a non-profit. If you want to be successful, you need to be great and not just have "loyal" customers; they need to be "passionately loyal."

No matter your field, you need to take the time to determine what sets you apart from the competition. What unique piece of knowledge, experience, or resource do you have that your competitors don't? What additional service will you provide to them? If the only answers you can come up with are a low price and that you guarantee the best service for your customers, then you need to take a step back and truly determine your value proposition.

When it comes to knowledge, it is critical to remember that there is personal knowledge and there is collective knowledge. While it is good to have personal knowledge, and you must have some amount of personal knowledge, it is imperative that you have a team of people that you can use as resources for a variety of needs. Please note that these people don't have to be employees. They can be paid professionals, associates, or a number of other resources. You don't have to have all of the answers. You only need to know where you can get the answers.

How many books and magazines do you read or listen to each month? If you only read the local newspaper or maybe the WSJ, then you are doing a disservice to yourself and your clients. Before you say that you don't have the time to read, think about all of the different media sources you have available. You have books on tape/CD, MP3 players, cell phone, Internet feeds, and on and on. How long do you spend in the car each day? Why not get a book on CD and listen while you are riding around. Not to be crude, but how much time do you spend sitting on the toilet each day? The real reason you don't read books isn't that you don't have the time, it is because you have chosen not to allocate the time to that activity.

I could actually write a book on the various subjects I spoke about in here, and would enjoy discussing any questions or comments you might have to allow me a chance to get into more details. However, I really wanted to point out some very important factors when it comes to being successful in your endeavors. The biggest thing is that you get started in determining where you stand at this point, and continuously evaluate whether you are making progress, regressing, or just standing still. Remember that if you aren't progressing, then you are preparing to die. This is relative to both you professional and personal life.

Till next time, I hope that you have a great day and are passionate about EVERYTHING you do!

1600 sf Retail Space available in great Dorneyville Shopping Center

Jim Barbour (Markward Group) — Fri, 21 Sep 2007 13:21:41 -0500

I have an excellent retail location available in the Dorneyville Shopping center that has great vehicle counts, accessiblity, and visibility. It is a plain vanilla box and is ready for you to relocate, expand, or open your new retail venture. The price is negotiable and pretty agressive, and there are many options available to you. For a showing or more information, please be sure to call or email me.

Thanks,

Jim

610-967-0538 (Mobile)

Homeowners and Condo Association question

Jim Barbour (Markward Group) — Fri, 21 Sep 2007 12:22:18 -0500

Hi all. Just thought that I'd put this out there to everyone. Is there any resource available that would provide a list of either or both of these types of associations that exist in PA? I've been doing some research, but haven't been able to come up with a definitive source.

I'd appreciate any information that you might be able to provide.

Thanks,

Jim

Starting Late to Start Retirement ?

Jim Barbour (Markward Group) — Fri, 21 Sep 2007 08:37:41 -0500

If you are like many other boomers or even some of the early Gen X'ers (Believe it or not, I fall into this generation.) it is quite possible or more than likely probable, you haven't focused on having income once you retire. The former generation was typically brought up to believe you need to get a good job with a good company from which you will retire with a pension along with social security. Well, things have changed in today's corporate world, and those days of nice pensions have all but disappeared. On top of that, the social security system is in total shambles. Unless something drastic is done to correct it, it will not exist for very many years. If it does exist, you certainly will not receive enough from it to survive.

Not to be harsh, but my personal opinion is that our society is slowly but surely moving towards a socialist one in that it is up to the government to take care of every last one of our needs rather than being responsible for our own outcomes. See Hillary Care for one good example. I hope that we never get to that point, and actually expect that there would be a revolt of some sort if it got to that point.

That said, what can you do to ensure that you will have the means to survive after you can no longer work, or can't find gainful employment, or heaven forbid, you are permanently disabled? Today, most Americans couldn't survive a month if they were to lose their jobs or main source of income. If you're not in that situation, then congratulations to you on your planning and foresight!

For the most part, there are 3 primary ways to achieve the wealth you need for after you no longer have employment income.

First, you could start a business. With the low-cost resources that are available today, there are an infinite number of businesses you could start with very low investment. The key to this is to build a business that you control, but not run on a daily basis. If you're disabled and you are the only one who knows how the business runs, then your business will be dead. You want to be the one who controls the idea and the company, not the one doing the day-to-day work.

Secondly, you can utilize the stock market through long-term investments, options, etc. While I believe that you should utilize the markets as an investment strategy, this shouldn't be your sole investment for planning for retirement. I also believe that far too many people put thousands of dollars into investments here that they don't understand. If you are going to play the market, please take time to learn about the various strategies for investing. There are far too many ways to make money here and protecting your investment to just through money at it. DO YOUR RESEARCH!

Third, is to invest in real estate. While this is my specialty, I don't believe that it is or should be the only way to prepare for retiring. The thing about real estate is that it is one of the most leveraged investments you can make. As an easy example of this, let's say you have $1,000 to invest. You decide to invest it in the stock market, and you have a great year with your portfolio increasing 20%. You then sell it and have $1,200 in the bank. Not bad, but then following that you will have to pay capital gains tax on that money of at least 15% leaving you with about @$1,170. Before anyone yells at me, I know there are many other factors, etc. that will affect this, but this is a simple example.

O.K. now let's say that you take that same $1,000 and invest it by buying an investment property at $100,000 that you rent out, and after all of your expenses, you pocket $50/month or $600/year. At the end of the first year, the market has been growing slightly so that your property, if appraised, would have increased by 3% or resulting in a potential sale price of $103,000. So, by the end of that first year, you would have gained $3,000 as well as having $600 in your pocket from the rental profits. You will also have many tax advantages such as depreciation, expenses, etc. that will probably decrease your tax liability rather than increase it.

As I have said before, I am not a tax professional or an attorney. So, please use these examples for what they are; examples. This is not tax or legal advice only my opinions on ways to increase your cash flow and assets to prepare for retirement.

If you have contacted a real estate agent about investment properties, and that agent has not done an interview with you to determine your needs, goals, and plans, then you need to find another one that will provide these services to you to ensure that you don't end up being one of the jaded people that invested in real estate once and got burned.