Bunk, BUnk, BUNk, BUNK

A comment on Where' the Bottom of the Burbank Real Estate Market ?

I don't believe you can apply the principles of technical analysis to home purchases! Nor do I believe you can apply them to small (1 to 4 unit) investment properties in a tough market.

No one likes to crunch numbers more than I do. Many years ago as an expatriate banker I got to learn from the best. I joined Michigan's CCIM Marketing Group as a canadate for a CCIM, but a year later I was not making sales. I learned to prove that no property was ever worth anything! There was always suppose to be a better deal somewhere. Our analyses were numerically perfect, scientifically sound, tax and legally correct, but utterly worthless! We weren't selling and we were protecting our clients out of less than mythical profits!

The problem with statical analyses of home values is that there is no consideration of function and no consideration of mandatory alterative cost, if you don't buy you still have to live somewhere! Homes are deferent! If the house in question could rent for $2,150 / month, but you could live in something smaller say a $1,150 rental, is the cost of the home $2,150 / month or is it $1,000 / month? Lenders will be concerned about comparable and variable markets, but they don't have to have some place to live. The more you're leveraged the more concerned the lender is in protecting the value. Provided you don't exceed financable values, analyses of a home's value is flavourous.

Analyses of small non-owner occupied rentals is also of limited value! The problem with applying CCIM type technical analyses to small investment properties is that your investor will miss so many profitable opportunities looking for the elusive if not extent perfect investment.

There is an alterative! Do the Doable! Learn to sell a 2% return. About a year after I got involved with the CCIMs I was introduced to another group. This new group's members could hardly balance their own checkbooks, but few of them had to! They knew how to sell a 2% return! How do you sell a 2% return? Find a person making only 1% and double his money!

Most people can't get the ideal or even reasonable return in today's market, but they can make a profit! Let those who over analyses every opportunity laugh at our investors as they go by, on the way to make deposits at the bank. It's much better to do the doable than procrastinate.

Bill

William J Archambault Jr

The Real Estate Investment