Yes! (Well this time anyway.) Why? Mortgage rates follow the bond market, not short term interest rates. Mortgage rates are also influenced by inflation concerns.
http://www.bankrate.com/nltrack/news/mtga/Dec1307_mortgage_analysisa1.asp?ec_id=brmint_ns_mortgage_20071213
So do rate cuts affect mortgage rates? Sometimes....
Dec 13, 2007
Theft or Adverse Possession?
http://www.landgrabber.org/
Heard about the family in Boulder, CO who lost 34% of a property they were planning to build on to adverse possession? Check it out!
Heard about the family in Boulder, CO who lost 34% of a property they were planning to build on to adverse possession? Check it out!
Dec 11, 2007
Enough Already!
Log onto msn.com or yahoo.com or espn.go.com.... After clicking on an article or two, you'll notice that there are mortgage ads. 4.65%
Wow!
The aids fail to tell you that this requires either negative amortization or a rate buy down. These products may be the right fit for a very select few borrowers. However, for 99% of the population, its not reality!
It's a teaser!
It's shady advertising.
If a company tries to earn your business by advertising a rate you don't qualify for, is that really someone that you want to trust with the financing of your greatest asset, your home?
Wow!
The aids fail to tell you that this requires either negative amortization or a rate buy down. These products may be the right fit for a very select few borrowers. However, for 99% of the population, its not reality!
It's a teaser!
It's shady advertising.
If a company tries to earn your business by advertising a rate you don't qualify for, is that really someone that you want to trust with the financing of your greatest asset, your home?
So Proud....
I had the chance to catch up with one of my friends at a wedding this past weekend. Soon, we were discussing their first home purchase. They had been shopping and shopping and shopping...
The found the one and made an offer.
The seller refused to budge.
The moment of truth.... Should they:
1) Take the deal. Afterall, they love the house!
2) Walk away.
WALK AWAY! The great news is.... they did! There are too many homes on the market to let the seller control the transaction. It's a buyers' market and buyers who allow sellers to control the transaction may find themselves singing the upside down blues!
The found the one and made an offer.
The seller refused to budge.
The moment of truth.... Should they:
1) Take the deal. Afterall, they love the house!
2) Walk away.
WALK AWAY! The great news is.... they did! There are too many homes on the market to let the seller control the transaction. It's a buyers' market and buyers who allow sellers to control the transaction may find themselves singing the upside down blues!
Dec 3, 2007
Merry Christmas Adjustable Rate Mortgage Holders!
United States Treasury Secretary Henry Paulson is extremely optimistic that many of the big players in the mortgage industry are going to go to work for thousands of homeowners.
A deal is in the works to extend the lower introductory rate on fixed rate mortgages for 1 - 7 years. My bet is that when it is all said and done, we'll be looking at 3 years.
This is phenomenal news! If it goes through, it will be the government's greatest achievement in alleviating the mortgage meltdown!
http://hosted.ap.org/dynamic/stories/M/MORTGAGE_CRISIS?SITE=CODER&SECTION=BUSINESS&TEMPLATE=DEFAULT#
A deal is in the works to extend the lower introductory rate on fixed rate mortgages for 1 - 7 years. My bet is that when it is all said and done, we'll be looking at 3 years.
This is phenomenal news! If it goes through, it will be the government's greatest achievement in alleviating the mortgage meltdown!
http://hosted.ap.org/dynamic/stories/M/MORTGAGE_CRISIS?SITE=CODER&SECTION=BUSINESS&TEMPLATE=DEFAULT#
Sunny Skies Ahead?
Probably not. However, here is a little hope that Colorado will be one of the first states to recover from the mortgage crisis.
http://www.rockymountainnews.com/news/2007/dec/01/states-foreclosure-rate-drops-to-no-7-in-nation/
http://www.rockymountainnews.com/news/2007/dec/01/states-foreclosure-rate-drops-to-no-7-in-nation/
Nov 28, 2007
Problems...
The real estate industry is going nuts. We all see the news, read the horror stories and witness giants such as CITI and Countrywide scramble while their stock prices tumble and tumble and tumble...
Rust Belt city mayors recently met to discuss the mortgage mess. With all of the media hype, government officials are calling for changes. They are calling for help. The question is... will help arrive?
I hope not. Here is why. The mortgage mess is due to a few factors.
1. Lack of Consumer Education. Borrowers were told two things:
-Your credit will improve. This is true IF you embrace responsible spending.
-Your home will appreciate. Long term, this is always true. Short term, there are no guarantees. This is especially true for borrowers who didn't treat their home as an investment.
2. Greed.
-Wall Street was getting rich. Can you imagine 1% of hundreds of billions of dollars? -Brokers. While Wall Street was getting fatter than fat, individual mortgage brokers seized the opportunity to gouge clients on their loans.
-While 1% of hundreds of billions is hard to imagine, a $10,000 profit on a single closing hits a little closer to home.
3. Government -A president who wants to increase home ownership (Great principle, but the means to this end has proven errant).
-Greenspan. The jury is still out, BUT interest rate cuts made unaffordable homes, very affordable (for the time being).
Looking for solutions? Check out the next post.
Rust Belt city mayors recently met to discuss the mortgage mess. With all of the media hype, government officials are calling for changes. They are calling for help. The question is... will help arrive?
I hope not. Here is why. The mortgage mess is due to a few factors.
1. Lack of Consumer Education. Borrowers were told two things:
-Your credit will improve. This is true IF you embrace responsible spending.
-Your home will appreciate. Long term, this is always true. Short term, there are no guarantees. This is especially true for borrowers who didn't treat their home as an investment.
2. Greed.
-Wall Street was getting rich. Can you imagine 1% of hundreds of billions of dollars? -Brokers. While Wall Street was getting fatter than fat, individual mortgage brokers seized the opportunity to gouge clients on their loans.
-While 1% of hundreds of billions is hard to imagine, a $10,000 profit on a single closing hits a little closer to home.
3. Government -A president who wants to increase home ownership (Great principle, but the means to this end has proven errant).
-Greenspan. The jury is still out, BUT interest rate cuts made unaffordable homes, very affordable (for the time being).
Looking for solutions? Check out the next post.
Solutions....
Heads up... This post doesn't present a warm and fuzzy outlook filled with easy solutions. Most problems aren't solved the easy way.
First of all, let's start with solutions that are flat out wrong.
1 - Wall Street. Just take a peek at Citi & Countrywide stock prices. Tell me how bad any investor wants back in.
2 - Expanded Underwriting.
1. The reason this entire mess exists is a lack of underwriting standards. Essentially, people who do not qualify for loans received them.
Wall Street learned its lesson. It's done.
So should the government jump in and take on all of these bad loans? NO WAY!
I completely agree with the government expanding FHA standards to some extent. For example, people who were never late on their mortgage prior to the rate adjusting deserve to refinance. However, everyone does not deserve to get bailed out!
So what is the answer?
TIME! There is a ton of inventory on the market. There are too many builders. There are too many borrowers who simply can not afford their home. There is a lot of downward pressure on the housing market. We are not in a short term market. It's a buy and hold market.
My advice to you.
Get off of craigslist. Start working with a qualified Realtor. Make them show you some comparable sales. You can get a great deal. Buy the cheapest house in the best neighborhood and reap the rewards!
First of all, let's start with solutions that are flat out wrong.
1 - Wall Street. Just take a peek at Citi & Countrywide stock prices. Tell me how bad any investor wants back in.
2 - Expanded Underwriting.
1. The reason this entire mess exists is a lack of underwriting standards. Essentially, people who do not qualify for loans received them.
Wall Street learned its lesson. It's done.
So should the government jump in and take on all of these bad loans? NO WAY!
I completely agree with the government expanding FHA standards to some extent. For example, people who were never late on their mortgage prior to the rate adjusting deserve to refinance. However, everyone does not deserve to get bailed out!
So what is the answer?
TIME! There is a ton of inventory on the market. There are too many builders. There are too many borrowers who simply can not afford their home. There is a lot of downward pressure on the housing market. We are not in a short term market. It's a buy and hold market.
My advice to you.
Get off of craigslist. Start working with a qualified Realtor. Make them show you some comparable sales. You can get a great deal. Buy the cheapest house in the best neighborhood and reap the rewards!
Nov 14, 2007
Why Not?
I was chatting with a friend from home a few weeks ago. Soon, we started talking about mortgages. Here is his scenario.
30 year fixed loan
90% financing
Low interest rate
This young lad has made some pretty wise decisions! After all, he is planning on living in this home for a long time. He is in the right loan product and he is locked in at a competitive interest rate which will save him thousands of dollars over the life of his loan.
Problem: He is putting every spare dollar towards paying off his mortgage as soon as possible.
Question: Why is this a problem? Won't this save him even more money in interest paid?
Answer! Before paying down your mortgage, take some time to evaluate your overall financial situation.
1 - Do you have any other debt that carries a higher interest rate? (i.e. auto, personal loans, credit card debt)
2 - Do you have at least enough money in the bank to cover 6 months of expenses?
3 - Are you on pace to retire at the income level you desire?
For those who are not carrying extra debt, have substantial savings and are investing for retirement.... go ahead and pay that mortgage down.
For the rest of us.... don't do it!
When you pay towards a fixed rate mortgage, you lose liquidity. In other words, that money is no longer yours and you can no longer access those funds.
What will happen if you lose an income or encounter unforeseen expenses and find yourself unable to make your mortgage payment? Will the bank give you a credit for the extra payments that you have made?
Nope. The bank will begin the foreclosure process. Not only would you lose your home, but you'd lose all of those extra payments as well. Yikes!
Don't fear! With a little education and a little bit of discipline, you can build some reserves, save for your retirement and pay down your mortgage early!
30 year fixed loan
90% financing
Low interest rate
This young lad has made some pretty wise decisions! After all, he is planning on living in this home for a long time. He is in the right loan product and he is locked in at a competitive interest rate which will save him thousands of dollars over the life of his loan.
Problem: He is putting every spare dollar towards paying off his mortgage as soon as possible.
Question: Why is this a problem? Won't this save him even more money in interest paid?
Answer! Before paying down your mortgage, take some time to evaluate your overall financial situation.
1 - Do you have any other debt that carries a higher interest rate? (i.e. auto, personal loans, credit card debt)
2 - Do you have at least enough money in the bank to cover 6 months of expenses?
3 - Are you on pace to retire at the income level you desire?
For those who are not carrying extra debt, have substantial savings and are investing for retirement.... go ahead and pay that mortgage down.
For the rest of us.... don't do it!
When you pay towards a fixed rate mortgage, you lose liquidity. In other words, that money is no longer yours and you can no longer access those funds.
What will happen if you lose an income or encounter unforeseen expenses and find yourself unable to make your mortgage payment? Will the bank give you a credit for the extra payments that you have made?
Nope. The bank will begin the foreclosure process. Not only would you lose your home, but you'd lose all of those extra payments as well. Yikes!
Don't fear! With a little education and a little bit of discipline, you can build some reserves, save for your retirement and pay down your mortgage early!
Nov 12, 2007
Where on Earth?
Greetings!
I apologize for disappearing. I can't believe it's been so long since my last post! A couple of updates....
1 - I'm officially a married man.
2 -I just returned from beautiful Cabo San Lucas
It is good to be back and I'm excited to get back in the swing of things. I hope you have all been doing well.
I apologize for disappearing. I can't believe it's been so long since my last post! A couple of updates....
1 - I'm officially a married man.
2 -I just returned from beautiful Cabo San Lucas
It is good to be back and I'm excited to get back in the swing of things. I hope you have all been doing well.
Oct 17, 2007
Would You Like to Own a Home?
I think it's fair to say that everyone would like to own their own home. It's the American Dream after all!
Oftentimes, sacrifices must be made to own a home. Most people will do whatever it takes. Others will not.
I think people need to take time to honestly and realistically analyze their financial goals as they prepare to buy a home.
1 - Budget. Don't fit your budget to the home. Find a home that fits your budget. Of course the more expensive home is nicer. As you battle to pay the bills every month, find yourself behind on taxes, fighting with your spouse and spread so thin that you can't afford to go out for a nice meal, you will despise this nice home and long for affordability....
2 - Stability. If you have no idea which state you will live in 6 months down the road.... don't buy a house unless you plan on renting it out. Have a stable job? Lead a pretty stable life? It might be time to buy!
3 - Prioritize. For fun, please rank the following in order of importance:
1. New Rims
2. $8,000 Birthday Party
3. Brand New Car
4. A Home
This seems like a big joke, but it's really not. Sitting in the office today, we were chatting about the most mind boggling reasons we have seen to NOT buy a home... Numbers 1 - 3 were our finalists.
My definition of "hood rich":
My rims are 20" and spinning. I partied like Keith Richards for my 25th birthday. Oh, by the way.... those rims are on my new Beemer!
If you're earning huge money, have a balanced portfolio of investments and are on track to meet your long term financial goals, I could care less if you are blowing some cash. It's play money for you!
Prioritize. Create goals. Build a realistic game plan to obtain those goals.
Would you like to own a home or are you on your way to home ownership?
Oftentimes, sacrifices must be made to own a home. Most people will do whatever it takes. Others will not.
I think people need to take time to honestly and realistically analyze their financial goals as they prepare to buy a home.
1 - Budget. Don't fit your budget to the home. Find a home that fits your budget. Of course the more expensive home is nicer. As you battle to pay the bills every month, find yourself behind on taxes, fighting with your spouse and spread so thin that you can't afford to go out for a nice meal, you will despise this nice home and long for affordability....
2 - Stability. If you have no idea which state you will live in 6 months down the road.... don't buy a house unless you plan on renting it out. Have a stable job? Lead a pretty stable life? It might be time to buy!
3 - Prioritize. For fun, please rank the following in order of importance:
1. New Rims
2. $8,000 Birthday Party
3. Brand New Car
4. A Home
This seems like a big joke, but it's really not. Sitting in the office today, we were chatting about the most mind boggling reasons we have seen to NOT buy a home... Numbers 1 - 3 were our finalists.
My definition of "hood rich":
My rims are 20" and spinning. I partied like Keith Richards for my 25th birthday. Oh, by the way.... those rims are on my new Beemer!
If you're earning huge money, have a balanced portfolio of investments and are on track to meet your long term financial goals, I could care less if you are blowing some cash. It's play money for you!
Prioritize. Create goals. Build a realistic game plan to obtain those goals.
Would you like to own a home or are you on your way to home ownership?
Oct 11, 2007
No Cost Loans!!
Yesterday morning, a tv ad caught my attention. 'America's Home Lender' was advertising 'No Cost' loans!
No administrative fee.
No processing fee.
No credit fee.
No title insurance fee.
No recording fee.
No appraisal fee.
This is incredible! This sounds too good to be true!
'No Cost' loans are a great product, but they aren't no cost. (If something sounds too good to be true, it is.)
Below, I'm going to explain how a 'No Cost' loan works.
Appraisal, processing, credit, title insurance, recording and other fees are paid out of a couple of potential sources.
1 - Equity. If the pay off for your current loan is $200,000 but your new loan amount is $207,000, can you guess where the cost of the loan is? You guessed it... EQUITY!
....That being said, if you don't have/want to bring in $7,000 in order to close your loan, this is a good deal, BUT it is not a true no cost loan!
2 - Interest Rate Premium. The higher the interest rate, the more the bank pays mortgage professionals. By raising the interest rate a point or two, there can be more than enough $$ to cover the costs of fees which make it possible to bring no money into closing! Once again, this is not a true no cost loan, BUT it could be the right move for someone who doesn't plan on staying in their home long term, doesn't have $$ to bring to closing or is willing to refinance again in a few years.
Folks, mortgages are expensive. Addictions to refinancing regularly quickly eat up all of your equity (and sanity). Get into a fixed rate mortgage, make an extra payment occasionally (after you put some reserves into your savings account) and give the market an opportunity to provide you with some equity!
Wishing you all a wealth of real estate finance knowledge!
No administrative fee.
No processing fee.
No credit fee.
No title insurance fee.
No recording fee.
No appraisal fee.
This is incredible! This sounds too good to be true!
'No Cost' loans are a great product, but they aren't no cost. (If something sounds too good to be true, it is.)
Below, I'm going to explain how a 'No Cost' loan works.
Appraisal, processing, credit, title insurance, recording and other fees are paid out of a couple of potential sources.
1 - Equity. If the pay off for your current loan is $200,000 but your new loan amount is $207,000, can you guess where the cost of the loan is? You guessed it... EQUITY!
....That being said, if you don't have/want to bring in $7,000 in order to close your loan, this is a good deal, BUT it is not a true no cost loan!
2 - Interest Rate Premium. The higher the interest rate, the more the bank pays mortgage professionals. By raising the interest rate a point or two, there can be more than enough $$ to cover the costs of fees which make it possible to bring no money into closing! Once again, this is not a true no cost loan, BUT it could be the right move for someone who doesn't plan on staying in their home long term, doesn't have $$ to bring to closing or is willing to refinance again in a few years.
Folks, mortgages are expensive. Addictions to refinancing regularly quickly eat up all of your equity (and sanity). Get into a fixed rate mortgage, make an extra payment occasionally (after you put some reserves into your savings account) and give the market an opportunity to provide you with some equity!
Wishing you all a wealth of real estate finance knowledge!
Oct 8, 2007
MSNBC Agrees
Here is a recent article concerning new build homes. I've already written a blog on the topic. For more info, check out this link http://www.msnbc.msn.com/id/21151323/ and scroll down my blog to find 'Don't Buy New Homes.'
Can you imagine buying a home with an adjustable rate mortgage at the peak of the boom with hopes of double digit appreciation only to find yourself $25 - $50,000 upside down only two years later?
These people are left with two difficult choices:
1 - Eat the adjusting payments
2 - Lose the home to foreclosure
Horrible. Horrible. Horrible....
Can you imagine buying a home with an adjustable rate mortgage at the peak of the boom with hopes of double digit appreciation only to find yourself $25 - $50,000 upside down only two years later?
These people are left with two difficult choices:
1 - Eat the adjusting payments
2 - Lose the home to foreclosure
Horrible. Horrible. Horrible....
Sep 28, 2007
Housing Recovery! Housing Recovery?
“Fresh evidence suggests the Denver-area housing market may be in the early stages of recovery, even as the national housing market faces an even bigger slump.”
“Housing is a bargain in the Denver area compared with many other places,” states Mike Foster, director of land acquisitions for Century Communities.
“Denver is a low-risk market. It will be easier for companies to relocate to our market than to relocate to other markets,” continues Foster.
“Is it all roses in the Denver marketplace? No. But it is not as bad as all of the doom-and-gloom talk either,” affirms real estate agent Gary Bauer.
I’m not ready to stand here and guarantee that the Denver market will recover in the next 6 months. I’m not ready to promise double digit appreciation. There are too many houses on the market and the real estate finance industry is still finding itself. Basically, there are too many unknowns. However, the future doesn’t appear to be all doom and gloom. There is hope!
“Not long ago, Denver was the most expensive housing market ‘anywhere in the U.S. without a beach.’ But because the Denver-area housing market has been flat for so many years, it will recover faster than other areas that, until recently, saw a huge run-up in prices.”
-“Home Prices Hint at Turn.” Rocky Mountain News Business 2. 9/27/07
“Housing is a bargain in the Denver area compared with many other places,” states Mike Foster, director of land acquisitions for Century Communities.
“Denver is a low-risk market. It will be easier for companies to relocate to our market than to relocate to other markets,” continues Foster.
“Is it all roses in the Denver marketplace? No. But it is not as bad as all of the doom-and-gloom talk either,” affirms real estate agent Gary Bauer.
I’m not ready to stand here and guarantee that the Denver market will recover in the next 6 months. I’m not ready to promise double digit appreciation. There are too many houses on the market and the real estate finance industry is still finding itself. Basically, there are too many unknowns. However, the future doesn’t appear to be all doom and gloom. There is hope!
“Not long ago, Denver was the most expensive housing market ‘anywhere in the U.S. without a beach.’ But because the Denver-area housing market has been flat for so many years, it will recover faster than other areas that, until recently, saw a huge run-up in prices.”
-“Home Prices Hint at Turn.” Rocky Mountain News Business 2. 9/27/07
Sep 27, 2007
Who Cares?
"You just need to treat every deal like it might close."
"I can't."
Tuesday, two loans died. I had to make two difficult phone calls to good people who need to refinance.
"I'm sorry. I can't help you refinance right now." I proceeded to try and help provide a plan of action that will allow them to refinance as soon as possible, but the ugly truth is that they are stuck in adjustable rate mortgages that are adjusting. They are going to have to scrimp and save to pay their bills each month.
I was sick.
1 - I saw a few thousand dollars in commissions slip away.
2 - I couldn't help my clients.
I'm not going to pretend like my clients welfare is my only concern. Not true. I have bills to pay. I have my own mortgage to worry about. Loans are my income!
I'm also not going to act like my dissapointment and heartache were reserved for my checking account alone. It flat out sucks being in a position where you have to tell someone that their payments are going to continue to go up and there is nothing that I (or anyone else) can do about it. Bottom Line: We're dealing with peoples' homes here! There is a lot on the line!
Yesterday, I asked a client not to lose any sleep at night. We are working out some credit issues for him. I truly hope he slept well.
I didn't. I laid in bed trying to think of different scenarios and how to make this refinance a reality. Afterall, shouldn't you trust your home loan with someone who will lease sleep at night over your financing, so you don't have to?
I take great pride in caring a lot about every deal and more importantly, about caring about my clients' financial well being. Some days, I'm sleepless. Some days, I feel sick. Some days, I get to shake hands with satisfied clients who have either bought a home or saved hundreds on their mortgage. Those days keep me coming back and are the reason I love my job.
"I can't."
Tuesday, two loans died. I had to make two difficult phone calls to good people who need to refinance.
"I'm sorry. I can't help you refinance right now." I proceeded to try and help provide a plan of action that will allow them to refinance as soon as possible, but the ugly truth is that they are stuck in adjustable rate mortgages that are adjusting. They are going to have to scrimp and save to pay their bills each month.
I was sick.
1 - I saw a few thousand dollars in commissions slip away.
2 - I couldn't help my clients.
I'm not going to pretend like my clients welfare is my only concern. Not true. I have bills to pay. I have my own mortgage to worry about. Loans are my income!
I'm also not going to act like my dissapointment and heartache were reserved for my checking account alone. It flat out sucks being in a position where you have to tell someone that their payments are going to continue to go up and there is nothing that I (or anyone else) can do about it. Bottom Line: We're dealing with peoples' homes here! There is a lot on the line!
Yesterday, I asked a client not to lose any sleep at night. We are working out some credit issues for him. I truly hope he slept well.
I didn't. I laid in bed trying to think of different scenarios and how to make this refinance a reality. Afterall, shouldn't you trust your home loan with someone who will lease sleep at night over your financing, so you don't have to?
I take great pride in caring a lot about every deal and more importantly, about caring about my clients' financial well being. Some days, I'm sleepless. Some days, I feel sick. Some days, I get to shake hands with satisfied clients who have either bought a home or saved hundreds on their mortgage. Those days keep me coming back and are the reason I love my job.
Sep 26, 2007
Winners & Losers...
In all markets, there are always winners and losers. It doesn’t matter if you are vested in stocks, commodities, precious metals or real estate.
**Note: If you own a home, you are a real estate investor!
Right now, the real estate industry is taking a beating due to a credit crunch (% of people with access to financing) and huge inventories (foreclosures + new developments).
Losers: Those who have adjustable rate mortgages in declining neighborhoods.
Why? They can’t refinance! This is horrible. I’ve encountered numerous files where the borrower has done everything right. They pay their bills and take care of the property. Unfortunately, their neighbors lack the same commitment and/or resources. Their homes have been foreclosed upon and driven down prices. Ugh…
Losers: Those who wish to sell their home.
Why? Their house may not be worth what they paid for it, they may have lost out on profits that existed a couple of years ago, it will likely take much longer to sell and there are fewer eligible buyers! Ugh…
Winners: Those who are preparing to buy their first home!
Why? Over the long term, homes will appreciate. Treat your home like an investment! Use a competent agent who will provide good comparables!
Winners: Long term real estate investors!
Why? Fewer eligible buyers + thousands with foreclosure damaged credit + huge home inventory = Higher rents and more cash flow potential properties! Once again, you must buy right!
Losers, don’t lose hope (or sleep). Maybe you can rent out your current residence or even do a lease to own! Maybe, you’ll just have to sit tight for a couple of years while the market recovers. There is hope & a light at the end of the tunnel!
**Note: If you own a home, you are a real estate investor!
Right now, the real estate industry is taking a beating due to a credit crunch (% of people with access to financing) and huge inventories (foreclosures + new developments).
Losers: Those who have adjustable rate mortgages in declining neighborhoods.
Why? They can’t refinance! This is horrible. I’ve encountered numerous files where the borrower has done everything right. They pay their bills and take care of the property. Unfortunately, their neighbors lack the same commitment and/or resources. Their homes have been foreclosed upon and driven down prices. Ugh…
Losers: Those who wish to sell their home.
Why? Their house may not be worth what they paid for it, they may have lost out on profits that existed a couple of years ago, it will likely take much longer to sell and there are fewer eligible buyers! Ugh…
Winners: Those who are preparing to buy their first home!
Why? Over the long term, homes will appreciate. Treat your home like an investment! Use a competent agent who will provide good comparables!
Winners: Long term real estate investors!
Why? Fewer eligible buyers + thousands with foreclosure damaged credit + huge home inventory = Higher rents and more cash flow potential properties! Once again, you must buy right!
Losers, don’t lose hope (or sleep). Maybe you can rent out your current residence or even do a lease to own! Maybe, you’ll just have to sit tight for a couple of years while the market recovers. There is hope & a light at the end of the tunnel!
Hold Your Horses!
Reminder: We want our clients to be informed & educated!
The fed cut short term rates by a half point last week. That means lower interest rates for real estate finance, right? Not so fast! Rates for a 30 year fixed actually inched up slightly over the last week. Check out this article from bankrate.com to learn a bit more.
http://bankrate.com/brm/news/mortgages/20070920_rate_cut_affect_mortgages_a1.asp
History says that the chances of rates following after a rate cut are close to 50/50!
“There is zero causation between mortgage rates and the Fed reducing its target for the federal funds rate,” says Dan Dowling, president of United Mortgage Capital Group.
Why?
· Mortgage rates fluctuate based upon investor predictions concerning long-term inflation.
· Mortgage rates react to market forces. For example, prior to the short term rate cut, rates had dropped from 6.82% to 6.32% over the past 8 weeks!
The fed cut short term rates by a half point last week. That means lower interest rates for real estate finance, right? Not so fast! Rates for a 30 year fixed actually inched up slightly over the last week. Check out this article from bankrate.com to learn a bit more.
http://bankrate.com/brm/news/mortgages/20070920_rate_cut_affect_mortgages_a1.asp
History says that the chances of rates following after a rate cut are close to 50/50!
“There is zero causation between mortgage rates and the Fed reducing its target for the federal funds rate,” says Dan Dowling, president of United Mortgage Capital Group.
Why?
· Mortgage rates fluctuate based upon investor predictions concerning long-term inflation.
· Mortgage rates react to market forces. For example, prior to the short term rate cut, rates had dropped from 6.82% to 6.32% over the past 8 weeks!
Sep 18, 2007
Quote of the Day
"Somewhere along the path to and from irrational pessimism, this real estate bust may deliver the place you've been looking for."
**Time Magazine, 9/14/7 http://www.time.com/time/magazine/article/0,9171,1661682,00.html
**Time Magazine, 9/14/7 http://www.time.com/time/magazine/article/0,9171,1661682,00.html
Time for a Recession?
“Detroit, Cleveland and some smaller Rust Belt cities are experiencing a traditional bust, in which economic woes spread to housing. In San Diego, the housing decline seems to be a self-generated phenomenon, the product of too-high prices and too-crazy lending practices.”
Basically, there are a lot of reasons that the housing industry is struggling. Economic woes obviously go hand in hand with housing woes. People without jobs are going to struggle to make their payments. No shocking revelations here….
The big question is “Will housing woes result in an economic recession?”
Housing prices have dropped 3.2% nationally during the past 12 months. Over 36,000 in the mortgage industry have dissipated over the course of the past year. “46% of new jobs between 2001 and 2006 in the US were credited to real estate, residential construction and other housing related Labor Department jobs.”
Managing director of the Economic Cycle Research Institute, Lakshman Achuthan, says, “Having a jobs report come in negative does not mean that a recession has started.” The risk, however, is there.
Time for some personal insight… I don’t believe a full blown recession is at hand. Inflation looks to be stable which could me a rate cut in the very near future. The federal government is becoming actively involved as government backed programs are loosening up a bit and providing relief for some distressed homeowners.
Bottom line: There are a lot of bad loans out there that are going to keep a large inventory on the market BUT builders are pulling out, government backed programs are expanding and Wall Street seems to be settling down a little bit. Not all subprime loans are destined for foreclosure. Most subprime borrowers do pay their mortgage and do know the terms of this mortgage. I’m proud to be one of them.
**Statistics and other information drawn from Time Magazine 9/24/07.
http://www.time.com/time/magazine/article/0,9171,1661682,00.html
Basically, there are a lot of reasons that the housing industry is struggling. Economic woes obviously go hand in hand with housing woes. People without jobs are going to struggle to make their payments. No shocking revelations here….
The big question is “Will housing woes result in an economic recession?”
Housing prices have dropped 3.2% nationally during the past 12 months. Over 36,000 in the mortgage industry have dissipated over the course of the past year. “46% of new jobs between 2001 and 2006 in the US were credited to real estate, residential construction and other housing related Labor Department jobs.”
Managing director of the Economic Cycle Research Institute, Lakshman Achuthan, says, “Having a jobs report come in negative does not mean that a recession has started.” The risk, however, is there.
Time for some personal insight… I don’t believe a full blown recession is at hand. Inflation looks to be stable which could me a rate cut in the very near future. The federal government is becoming actively involved as government backed programs are loosening up a bit and providing relief for some distressed homeowners.
Bottom line: There are a lot of bad loans out there that are going to keep a large inventory on the market BUT builders are pulling out, government backed programs are expanding and Wall Street seems to be settling down a little bit. Not all subprime loans are destined for foreclosure. Most subprime borrowers do pay their mortgage and do know the terms of this mortgage. I’m proud to be one of them.
**Statistics and other information drawn from Time Magazine 9/24/07.
http://www.time.com/time/magazine/article/0,9171,1661682,00.html
Sep 4, 2007
Slimeball?
I recently shot an email off to a realtor whose client may be interested in our condo. Mid e-mail I stopped and asked myself what I was doing and why. Am I doing this for the buyer or for myself?
The honest answer is that I'm selling this condo for myself (and Tanna). Why? This was a business investment. I've put a ton of time, taken a lot of risk and worked like crazy to complete this project.
-My time is worth money. If I contracted this project out, it would have tripled my costs!
-This is an investment and I need to be see a return on this investment!
The fact that someone else will be able to buy their first home is nice. It makes me feel good to help make that a reality, but that is not why I bought a house and completely remodeled it!
So... am I a slimeball?
Absolutely not. This is a win-win situation. No one has ever told me that the condo is over priced! It's a fair deal and I truly believe the new owner will be stepping into some equity.
I win. I sell my condo and make a little bit of money for my efforts.
They win. They are homeowners stepping into a fully remodeled condo in an established neighborhood with instant equity!
The honest answer is that I'm selling this condo for myself (and Tanna). Why? This was a business investment. I've put a ton of time, taken a lot of risk and worked like crazy to complete this project.
-My time is worth money. If I contracted this project out, it would have tripled my costs!
-This is an investment and I need to be see a return on this investment!
The fact that someone else will be able to buy their first home is nice. It makes me feel good to help make that a reality, but that is not why I bought a house and completely remodeled it!
So... am I a slimeball?
Absolutely not. This is a win-win situation. No one has ever told me that the condo is over priced! It's a fair deal and I truly believe the new owner will be stepping into some equity.
I win. I sell my condo and make a little bit of money for my efforts.
They win. They are homeowners stepping into a fully remodeled condo in an established neighborhood with instant equity!
Aug 29, 2007
Real Estate's Fault Line
There is plenty of blame to pass around concerning who is at fault for the real estate bust that is making headlines almost every day in major publications, nightly news and coffee shop chit chat.
I’m going to boldly be a complete pansy and just spread the blame around to everyone.
· Consumers: Know the terms of your loan! Can you afford the monthly payments? Is your loan going to adjust? If so, when? What is the margin? What is the cap? Know your worst case scenario!
· Mortgage Brokers: Keep your buyer’s interests and welfare the number one priority! Very simple. Ask some questions. Educate buyers on loan products. Be a resource!
· Wall Street: Don’t demand loans that aren’t proven performers!!
Whoa! How on earth does Wall Street fit into the mix? Here is how the loan process works.
1. Loan officers take loan applications and send them in to mortgage companies/banks which underwrite (review) the file & fund the loan. At this point, the consumer has closed on their home and the loan process is completed, right?
2. Not even close! Most banks are not portfolio lenders. In other words, most banks bundle millions/billions of dollars in loans sell them as mortgage-backed securities.
3. At this time, the new owner of the mortgage can use the securities as collateral to issue bonds for financing other deals! Homeowners pay the interest that covers interest.
4. These securities are rated by risk groups (tranches) for investors. Riskier loans pay more.
Now you can really see where the demand for risky loans came from. A LOT of people made a ton of money. Mortgage brokers, banks and Wall Street Investors.
The problem occurred when homeowners were unable to make payments for various reasons. Suddenly, the money needed to pay bond interest is not there! At this point Wall Street starts slamming doors closed. Mortgage companies have no one to sell their loans to and lack the capital to hold onto billions upon billions of dollars in mortgages. Doors close! Companies disappear over night.
People who were eligible for loans 9 months ago can’t even come close to qualifying today. What does this mean for Denver??
We have a huge inventory of homes on the market right now. We have fewer eligible buyers. The worst is not over in the housing market! We’re looking at a couple more years of slow real estate.
Time Magazine recently did a nice article on Denver real estate. Check it out.
http://www.time.com/time/magazine/article/0,9171,1653635,00.html
I’m going to boldly be a complete pansy and just spread the blame around to everyone.
· Consumers: Know the terms of your loan! Can you afford the monthly payments? Is your loan going to adjust? If so, when? What is the margin? What is the cap? Know your worst case scenario!
· Mortgage Brokers: Keep your buyer’s interests and welfare the number one priority! Very simple. Ask some questions. Educate buyers on loan products. Be a resource!
· Wall Street: Don’t demand loans that aren’t proven performers!!
Whoa! How on earth does Wall Street fit into the mix? Here is how the loan process works.
1. Loan officers take loan applications and send them in to mortgage companies/banks which underwrite (review) the file & fund the loan. At this point, the consumer has closed on their home and the loan process is completed, right?
2. Not even close! Most banks are not portfolio lenders. In other words, most banks bundle millions/billions of dollars in loans sell them as mortgage-backed securities.
3. At this time, the new owner of the mortgage can use the securities as collateral to issue bonds for financing other deals! Homeowners pay the interest that covers interest.
4. These securities are rated by risk groups (tranches) for investors. Riskier loans pay more.
Now you can really see where the demand for risky loans came from. A LOT of people made a ton of money. Mortgage brokers, banks and Wall Street Investors.
The problem occurred when homeowners were unable to make payments for various reasons. Suddenly, the money needed to pay bond interest is not there! At this point Wall Street starts slamming doors closed. Mortgage companies have no one to sell their loans to and lack the capital to hold onto billions upon billions of dollars in mortgages. Doors close! Companies disappear over night.
People who were eligible for loans 9 months ago can’t even come close to qualifying today. What does this mean for Denver??
We have a huge inventory of homes on the market right now. We have fewer eligible buyers. The worst is not over in the housing market! We’re looking at a couple more years of slow real estate.
Time Magazine recently did a nice article on Denver real estate. Check it out.
http://www.time.com/time/magazine/article/0,9171,1653635,00.html
Aug 24, 2007
Hate Your Neighbor?
I can think of a couple of good reasons to really dislike your neighbor.
1 - Sold on the fact that the development would take off, you purchased in the first phase. The development tanked and your neighbor bought the same house 8 months later for $50,000 less. That hurts & leads to an awkward conversation at the next barbeque.
"I love your house! Did you guys get in when the builder was slashing prices and giving away upgrades as incentives?"
"No. We paid $50,000 more and didn't get jack squat for upgrades. I'm going to go grab a drink (perhaps a shot or five) right now."
The good news is, you really don't have to harbor the anger towards your immediate neighbor for long. Why?
2 - From your porch, you can see a new development being built. That's great right? The area is taking off!! Long term, that may be true. If you want to sell your house in the next five years a different picture is painted. You will be competing against new builds! In other words, you were $50,000 upside down to start with and now you might be $70,000 upside down because in order to sell, you'll have to beat the prices of new homes!!
Bottom line, new home sales are up, but prices are not. The market remains in turmoil. More houses + Fewer buyers = Struggling housing market
http://articles.moneycentral.msn.com/Investing/Dispatch/070824markets.aspx
1 - Sold on the fact that the development would take off, you purchased in the first phase. The development tanked and your neighbor bought the same house 8 months later for $50,000 less. That hurts & leads to an awkward conversation at the next barbeque.
"I love your house! Did you guys get in when the builder was slashing prices and giving away upgrades as incentives?"
"No. We paid $50,000 more and didn't get jack squat for upgrades. I'm going to go grab a drink (perhaps a shot or five) right now."
The good news is, you really don't have to harbor the anger towards your immediate neighbor for long. Why?
2 - From your porch, you can see a new development being built. That's great right? The area is taking off!! Long term, that may be true. If you want to sell your house in the next five years a different picture is painted. You will be competing against new builds! In other words, you were $50,000 upside down to start with and now you might be $70,000 upside down because in order to sell, you'll have to beat the prices of new homes!!
Bottom line, new home sales are up, but prices are not. The market remains in turmoil. More houses + Fewer buyers = Struggling housing market
http://articles.moneycentral.msn.com/Investing/Dispatch/070824markets.aspx
Aug 23, 2007
Don't Buy New Homes!!!
I'm going to write a book on this. I can't emphasize it enough in today's market!!
DON'T BUY NEW HOMES in NEW DEVELOPMENTS where there is a LARGE INVENTORY!!
You have scrimped and saved.
You've budgeted.
You've hunted.
You've found your dream home!!
It's brand new!
It's in the perfect location!
It's brand new!
It has stainless steel appliances!
It has beautiful brushed nickel fixtures!
It's brand new!
It could be one of the worst investments you make. It is without a doubt, a very risky investment!
Folks, your home is one of your biggest investments! Treat your home as an INVESTMENT!
You don't have to be purchasing a fix and flip, rental or commercial property to be a real estate investor! Your home is the biggest and most important real estate investment 99% of American's will purchase!
The next article will detail some of the reasons to avoid new construction and the risks associated with it. Below, is a link to a horror story I have heard all too many times. The story of a new home, a new homeowner and the upside down blues.
http://www.bankrate.com/nltrack/news/real-estate/20070812_adviser_new_home_price_cuts_a1.asp?ec_id=brmint_ns_mortgage_20070823
DON'T BUY NEW HOMES in NEW DEVELOPMENTS where there is a LARGE INVENTORY!!
You have scrimped and saved.
You've budgeted.
You've hunted.
You've found your dream home!!
It's brand new!
It's in the perfect location!
It's brand new!
It has stainless steel appliances!
It has beautiful brushed nickel fixtures!
It's brand new!
It could be one of the worst investments you make. It is without a doubt, a very risky investment!
Folks, your home is one of your biggest investments! Treat your home as an INVESTMENT!
You don't have to be purchasing a fix and flip, rental or commercial property to be a real estate investor! Your home is the biggest and most important real estate investment 99% of American's will purchase!
The next article will detail some of the reasons to avoid new construction and the risks associated with it. Below, is a link to a horror story I have heard all too many times. The story of a new home, a new homeowner and the upside down blues.
http://www.bankrate.com/nltrack/news/real-estate/20070812_adviser_new_home_price_cuts_a1.asp?ec_id=brmint_ns_mortgage_20070823
Aug 22, 2007
Not Ugly for All...
I spend a great deal of my time working with people in the mortgage industry. It's easy to get caught up in the headlines and horror stories of lender upon lender shutting their doors.
One company paid for happy hour and as it ended they sent text messages to all of their employees announcing that they didn't have a job anymore.... Ouch.
I firmly believe that the mortgage and real estate industry faces a couple of challenging years ahead as loan programs reemerge and real estate inventories dissipate.
Sometimes, I forget about the people who all of these market woes will provide a tremendous opportunity!
1 - 1st time buyers.
IF you know you're going to stay in the property for a few years.
2 - Investors
IF you are ready to deal with renters and all the hassles associated for the next four or five years and have some cash reserves.
One company paid for happy hour and as it ended they sent text messages to all of their employees announcing that they didn't have a job anymore.... Ouch.
I firmly believe that the mortgage and real estate industry faces a couple of challenging years ahead as loan programs reemerge and real estate inventories dissipate.
Sometimes, I forget about the people who all of these market woes will provide a tremendous opportunity!
1 - 1st time buyers.
IF you know you're going to stay in the property for a few years.
2 - Investors
IF you are ready to deal with renters and all the hassles associated for the next four or five years and have some cash reserves.
Another One Bites the Dust....
Accredited Home Lenders is the newest lender to all but close its doors.
They are laying off 1,600 of their 2,600 workers.
They are closing their retail doors.
They are cutting back wholesale loan products.
In other words, there are enough people left to answer the phones and tell mortgage brokers that they can not do any loan that isn't conforming.
I spoke with a sales rep for a mortgage company about a file. His rates were a little off so I'm taking the loan someplace else. I jokingly said,
"Do me a favor and stay in business. You'll be the only ones left and nobody will care what your rates are!"
"I'm scared. I've already got my resume ready in case we shut our doors," he replied.
Bottom Line: The mortgage business is scary. We're facing a couple of difficult years.
http://biz.yahoo.com/ap/070822/accredited_home_lenders_restructuring.html?.v=2
They are laying off 1,600 of their 2,600 workers.
They are closing their retail doors.
They are cutting back wholesale loan products.
In other words, there are enough people left to answer the phones and tell mortgage brokers that they can not do any loan that isn't conforming.
I spoke with a sales rep for a mortgage company about a file. His rates were a little off so I'm taking the loan someplace else. I jokingly said,
"Do me a favor and stay in business. You'll be the only ones left and nobody will care what your rates are!"
"I'm scared. I've already got my resume ready in case we shut our doors," he replied.
Bottom Line: The mortgage business is scary. We're facing a couple of difficult years.
http://biz.yahoo.com/ap/070822/accredited_home_lenders_restructuring.html?.v=2
Aug 20, 2007
If You Think Michael Vick Has It Bad.....
It could be worse...
Today, Capital One closed a subsidiary, GreenPoint Mortgage. For the 1,900 people who just lost their jobs, Michael Vick's guilty plea is neither here nor there.
The mortgage and real estate industry are in deep trouble and it continues to get deeper. The ingredients are creating a perfect storm of sorts in real estate.
1- House inventories are high which is putting a lot of downward pressure on the market.
2- Loan programs are disappearing. 1st time buyers can no longer buy and those wishing to sell their homes and move up are unable to do so.
The next couple of years are going to be challenging.
http://online.wsj.com/article/SB118764159728403271.html?mod=MKTW
Today, Capital One closed a subsidiary, GreenPoint Mortgage. For the 1,900 people who just lost their jobs, Michael Vick's guilty plea is neither here nor there.
The mortgage and real estate industry are in deep trouble and it continues to get deeper. The ingredients are creating a perfect storm of sorts in real estate.
1- House inventories are high which is putting a lot of downward pressure on the market.
2- Loan programs are disappearing. 1st time buyers can no longer buy and those wishing to sell their homes and move up are unable to do so.
The next couple of years are going to be challenging.
http://online.wsj.com/article/SB118764159728403271.html?mod=MKTW
Aug 13, 2007
Who On Earth is Buying???
Some interesting facts (all statistics national):
- 36% of home buyers are 1st timers this year - down from 40% last year
- 22% of all buyers are single women - 9% are single men
- Homes are on the market for an average of 6 weeks
Some disheartening statistics (all statistics courtesy of Matt Hanna):
- My condo has been on the market for 5 weeks.
- It's still for sale!
Some statistics of hope (courtesy of real estate agents):
- My condo is priced right according to feedback from agents who have shown the property.
- 36% of home buyers are 1st timers this year - down from 40% last year
- 22% of all buyers are single women - 9% are single men
- Homes are on the market for an average of 6 weeks
Some disheartening statistics (all statistics courtesy of Matt Hanna):
- My condo has been on the market for 5 weeks.
- It's still for sale!
Some statistics of hope (courtesy of real estate agents):
- My condo is priced right according to feedback from agents who have shown the property.
Aug 9, 2007
Credit Meltdown?
I'm not a Wall Street expert. I'm a mortgage broker! My primary concern on a daily basis is rates! I want to get the best rates possible for my clients. Essentially, I utilize the bond market to try and get my clients the best rate.
I'm not a financial genius, but I have seen the subprime mortgage industry all but disappear over the past 8 months. There has been considerable concern. Sensationalists speak of financial mayhem in the stock market because of these poorly performing loans. Other sensationalists imply that everything is just fine. (I hate to admit it, but these are typically people in the mortgage and real estate industry.)
I think the truth is somewhere in the middle.
Are subprime loans a mess? ABSOLUTELY!
Are subprime mortgages and easy credit going to destroy the world? I highly doubt it. While the mortgage sector is seeing drastic changes which are affecting the rest of the financial world, one must keep in mind that subprime mortgages are a very limited product within the entire U.S. economy.
Subprime mortgages may affect the stock market to a lesser degree.
We're not talking about the end of the world here folks!
I'm not a financial genius, but I have seen the subprime mortgage industry all but disappear over the past 8 months. There has been considerable concern. Sensationalists speak of financial mayhem in the stock market because of these poorly performing loans. Other sensationalists imply that everything is just fine. (I hate to admit it, but these are typically people in the mortgage and real estate industry.)
I think the truth is somewhere in the middle.
Are subprime loans a mess? ABSOLUTELY!
Are subprime mortgages and easy credit going to destroy the world? I highly doubt it. While the mortgage sector is seeing drastic changes which are affecting the rest of the financial world, one must keep in mind that subprime mortgages are a very limited product within the entire U.S. economy.
Subprime mortgages may affect the stock market to a lesser degree.
We're not talking about the end of the world here folks!
Aug 8, 2007
Par for the Course?
I don't know why, but I'm a big fan of sports analogies. Perhaps it is because sports are relevant to me and so sports analogies are a little bit more relevant.... Who knows. Whatever the reason, here we go.
The game of golf is horrible. I love it, but I spend at least half of the round flat out ticked off. The worst part of the game is the simple fact that I alone am responsible for my plight...
I think the terms "What was that?" and "Are you kidding me?" are a couple of my favorite golf phrases. (I must confess, at times there are some four letter words that sneak into the mix along with occasional mistreatment of my golf clubs, but I try and keep those to myself...)
I think its interesting how scoring well works. It doesn't take any great shots. It takes consistency.
We came across a par three. It was about 220 to the pin. I smoked my tee shot and rolled onto the green. My first thought... "Par!"
Wrong... As it turns out my 25 foot putt had about 4 feet of right to left break in it. I blew my first put way past the hole. I faced a 13 footer for par and left it short about 4 feet. I pushed my bogey put about an inch left. I took a 5!
Seeing opportunities to score well explode before your eyes is tough.
Scoring well takes the complete package. It doesn't take any great shots. It requires consistent play and wise course management.
If my business were a golf game, I can't help but wonder how I would be scoring...
The game of golf is horrible. I love it, but I spend at least half of the round flat out ticked off. The worst part of the game is the simple fact that I alone am responsible for my plight...
I think the terms "What was that?" and "Are you kidding me?" are a couple of my favorite golf phrases. (I must confess, at times there are some four letter words that sneak into the mix along with occasional mistreatment of my golf clubs, but I try and keep those to myself...)
I think its interesting how scoring well works. It doesn't take any great shots. It takes consistency.
We came across a par three. It was about 220 to the pin. I smoked my tee shot and rolled onto the green. My first thought... "Par!"
Wrong... As it turns out my 25 foot putt had about 4 feet of right to left break in it. I blew my first put way past the hole. I faced a 13 footer for par and left it short about 4 feet. I pushed my bogey put about an inch left. I took a 5!
Seeing opportunities to score well explode before your eyes is tough.
Scoring well takes the complete package. It doesn't take any great shots. It requires consistent play and wise course management.
If my business were a golf game, I can't help but wonder how I would be scoring...
Golfing in The Dark
This morning I had the opportunity go and play little bit of golf with the managing broker of a real estate company, mortgage broker and a very successful real estate investor. Here is what I learned....
1 - 5:30 am is too early. Obvious, but true.
2 - Golf scores do not equal business savvy.
3- I'm horrible. 3 putts are bad, but what on earth is a 4 putt?
I also took some time to watch these very successful businessmen. Here are some of the things I noticed...
1 - Their phones started ringing about 7 a.m. and didn't stop. (I thought about texting Tanna just to ask her to call me so I could feel a little bit more important.)
2 - They play golf before sunrise because they don't have time during the day.
3 - Much of their business is built on relationships and contacts.
4 - Both men talked about putting the kids to bed last night and then finishing up their workday on the computer returning emails and preparing for the next day.
Lesson Learned:
These guys are loaded living in million dollar homes. They are successful. They are not content! They work hard. They work long hours. They put in the time and energy required to be successful! Self employment offers great opportunities and freedoms, but it comes at a price. Forget the 9 - 5 with 15 minute breaks and hour lunches! Pay the price!
1 - 5:30 am is too early. Obvious, but true.
2 - Golf scores do not equal business savvy.
3- I'm horrible. 3 putts are bad, but what on earth is a 4 putt?
I also took some time to watch these very successful businessmen. Here are some of the things I noticed...
1 - Their phones started ringing about 7 a.m. and didn't stop. (I thought about texting Tanna just to ask her to call me so I could feel a little bit more important.)
2 - They play golf before sunrise because they don't have time during the day.
3 - Much of their business is built on relationships and contacts.
4 - Both men talked about putting the kids to bed last night and then finishing up their workday on the computer returning emails and preparing for the next day.
Lesson Learned:
These guys are loaded living in million dollar homes. They are successful. They are not content! They work hard. They work long hours. They put in the time and energy required to be successful! Self employment offers great opportunities and freedoms, but it comes at a price. Forget the 9 - 5 with 15 minute breaks and hour lunches! Pay the price!
Jul 11, 2007
What a Mess!
http://realestate.msn.com/buying/Article_busweek.aspx?cp-documentid=5084782>1=10233
I didn't finish reading this article but it talks about people who are leaving foreclosures in horrible condition that may include human and animal feces, pets without food or drink, flooding, mold, etc....
People facing foreclosure don't care any more, but are foreclosures causing people to trash their homes? Since its the mortgage industry's fault that there are record numbers of foreclosures, one can logically assume that the mortgage industry is responsible for suffering pets and destroyed properties.
I don't think so.
These are probably the same people who have trashed every apartment or house they have ever lived in. Lax lending standards allowed them to buy a home they probably shouldn't have and now everyone is paying the price. This time, its the bank and new owner. In the past, it was landlords who were stuck with all of these bills.
Don't blame foreclosures. Blame the people who lack the character or common decency to take care of their animals and property. You don't have to be rich to give your pet away. You don't have to be rich to take care of your property.
I didn't finish reading this article but it talks about people who are leaving foreclosures in horrible condition that may include human and animal feces, pets without food or drink, flooding, mold, etc....
People facing foreclosure don't care any more, but are foreclosures causing people to trash their homes? Since its the mortgage industry's fault that there are record numbers of foreclosures, one can logically assume that the mortgage industry is responsible for suffering pets and destroyed properties.
I don't think so.
These are probably the same people who have trashed every apartment or house they have ever lived in. Lax lending standards allowed them to buy a home they probably shouldn't have and now everyone is paying the price. This time, its the bank and new owner. In the past, it was landlords who were stuck with all of these bills.
Don't blame foreclosures. Blame the people who lack the character or common decency to take care of their animals and property. You don't have to be rich to give your pet away. You don't have to be rich to take care of your property.
It's Not the Shoes!
(I want to preface this article. I'm not a great basketball player. Barely above average and far from great.)
On the way home from work today, I saw an open court. I happened to have a ball in the back seat so I stopped and shot around. I don't suppose I looked like much of a basketball player in running shoes, khaki shorts and a polo. It was a beautiful day and I hadn't played in a few months so I thought I would seize the carp or whatever.
I don't think I'm the only one who didn't think that I looked like a basketball player. A younger kid (later found out he was 19) approached me with a big smile and said, “Wanna hoop?”
“Sure,” I replied.
As the game progressed, a few things were evident.
On the way home from work today, I saw an open court. I happened to have a ball in the back seat so I stopped and shot around. I don't suppose I looked like much of a basketball player in running shoes, khaki shorts and a polo. It was a beautiful day and I hadn't played in a few months so I thought I would seize the carp or whatever.
I don't think I'm the only one who didn't think that I looked like a basketball player. A younger kid (later found out he was 19) approached me with a big smile and said, “Wanna hoop?”
“Sure,” I replied.
As the game progressed, a few things were evident.
- I'm fat and out of shape. I was dying out there playing half court 1 on 1. I need to get on the treadmill!
- I was a lot better than he was.
After winning three games, I was literally laying on the court. We were talking and the excuses began to pour like rain.
“I didn't have my shoes.”
“I haven't played in a couple of weeks.”
“I usually play against poor competition.”
“I usually don't play 1 on 1.”
If I had played in the past few months, was wearing basketball shoes or felt that I was actually a decent 1 on 1 player, these excuses could have carried a little bit more weight. (Frankly, even if the excuses were legit, I was too tired to care.)
Driving home, I took some time to think and reflect. Here are some of my thoughts:
- What excuses hold me back?
- I'm exhausted.
- Am I looking for reasons not to succeed or am I proactively searching out success?
- I'm exhausted.
- Do I have a plan/goals?
- Am I making these goals a reality?
I would encourage anyone looking to buy a home or invest in real estate to answer a couple of these thoughts and questions. I'm a big believer in personal check ups. If I don't have a direction/purpose/goal, I find myself getting by rather than getting ahead.
Jul 9, 2007
Quotes to Consider
"He that is taught only by himself has a fool for a master."
- Ben Johnson
All investors are learning all the time. Each project is unique.
Get in touch with seasoned investors who are not only capable of providing you with insights and wisdom, but want to see you succeed!
- Ben Johnson
All investors are learning all the time. Each project is unique.
Get in touch with seasoned investors who are not only capable of providing you with insights and wisdom, but want to see you succeed!
Motivation! (or not)
I do not believe that easy money exists. I believe that hard work, determination and wise business decisions will lead to wealth.
When I think about the weeks after I purchased my first home, it was all an exciting blur. I was up by 7:00 Saturday morning energized and ready to conquer my flip! During the work day, I would take all of my spare time and invest it preparing long lists of items to be purchased and tasks to be completed. I didn't need any annual, semi-annual, weekly, or monthly goals.
It was fun!
I want to take a moment to emphasize was. After 4 months, my enthusiasm and funds were quickly disappearing. Dragging myself out of bed to go work on the &*$# house was not easy. Did I hate every minute of it? No, not at all. Were there days when the frustration was all I could bear? Absolutely.
Frankly, I didn't have many options. I didn't have the money to hire out contractors and wasn't in a position to take even an afternoon off from work. I had a choice to make.
1 - Give up on the flip. No one would have really blamed me. After all, I was a novice carpenter learning on the fly. We could have sold the property to a wholesaler and probably got out even.
2 - Dig deep and find a way to finish. Frankly, this was my only option. Here's why.
Goals provide urgency. This summer I will sell my first condo and reinvest all of that money into my next project. This fall I will sell my second condo and reinvest the profits into a larger residence.
I will grow my business as I come into contact with the right people who will help the company succeed. I'm planning on a minimum of six flips in 2008 and want to be doing 12 in 2009.
Emotions don't get in the way. I don't feel like going to work. That doesn't matter. What matters is whether or not I went to work. I can promise you that some days you will feel like being on the site working. Those days are great! I guarantee you that there will be days when you don't feel like getting after it. These can be the most rewarding days! The can build strength, character, persistence and help to instill a relentless work ethic!
This article isn't to serve as a pat on the back (Lie: I'm really proud of completing flip #1.). It's also to encourage you to think about your goals within real estate and your personality. What motivates you? What drives you? What is going to separate you from the pack and make you successful?
When I think about the weeks after I purchased my first home, it was all an exciting blur. I was up by 7:00 Saturday morning energized and ready to conquer my flip! During the work day, I would take all of my spare time and invest it preparing long lists of items to be purchased and tasks to be completed. I didn't need any annual, semi-annual, weekly, or monthly goals.
It was fun!
I want to take a moment to emphasize was. After 4 months, my enthusiasm and funds were quickly disappearing. Dragging myself out of bed to go work on the &*$# house was not easy. Did I hate every minute of it? No, not at all. Were there days when the frustration was all I could bear? Absolutely.
Frankly, I didn't have many options. I didn't have the money to hire out contractors and wasn't in a position to take even an afternoon off from work. I had a choice to make.
1 - Give up on the flip. No one would have really blamed me. After all, I was a novice carpenter learning on the fly. We could have sold the property to a wholesaler and probably got out even.
2 - Dig deep and find a way to finish. Frankly, this was my only option. Here's why.
Goals provide urgency. This summer I will sell my first condo and reinvest all of that money into my next project. This fall I will sell my second condo and reinvest the profits into a larger residence.
I will grow my business as I come into contact with the right people who will help the company succeed. I'm planning on a minimum of six flips in 2008 and want to be doing 12 in 2009.
Emotions don't get in the way. I don't feel like going to work. That doesn't matter. What matters is whether or not I went to work. I can promise you that some days you will feel like being on the site working. Those days are great! I guarantee you that there will be days when you don't feel like getting after it. These can be the most rewarding days! The can build strength, character, persistence and help to instill a relentless work ethic!
This article isn't to serve as a pat on the back (Lie: I'm really proud of completing flip #1.). It's also to encourage you to think about your goals within real estate and your personality. What motivates you? What drives you? What is going to separate you from the pack and make you successful?
Jul 6, 2007
Where did I go???
Sorry I haven't had any posts lately. Things have been a little bit nuts between mortgages and the open house. I am also recently engaged! (July 3) Tanna & I are busy calling friends and family to let them know the exciting news. We're also busy planning a November wedding.
I'll get back on the ball shortly!!
I'll get back on the ball shortly!!
Jul 2, 2007
Open House
We've done it!
Completing the remodel is one of my proudest accomplishments. I can't believe its done & can't wait to sell the place.
I'm physically, mentally and emotionally exhausted.
Now, the hard part... sit & wait for the market to tell me what my place is worth!
Completing the remodel is one of my proudest accomplishments. I can't believe its done & can't wait to sell the place.
I'm physically, mentally and emotionally exhausted.
Now, the hard part... sit & wait for the market to tell me what my place is worth!
Jun 29, 2007
Accountability
I'm working on some loans right now for an investor who owns over 15 properties and has been working within the real estate/ development industry for over 20 years. He has never missed a payment. He has over a million dollars in the bank.
His loans were just canned because of the Colorado legislature.
Why??
Foreclosures have been blowing up. The government has to step in to protect its constituents right?
I disagree.
The loans that the lender canned were sophisticated loans that required no income disclosure.
(If you want to know exactly why the no income loan fits borrowers who retain many properties, please contact me. Basically, those who own & rent real estate have an extremely high overhead because the mortgage payments are so high.)
Anyway.... back to the task at hand.
1.) Should mortgage broker's be licensed?
-Absolutely. You, as a consumer, have a right to know that the person handling your mortgage is not a criminal.
2.) Should consumers enter mortgage agreements with caution?
-Yes! If your mortgage broker isn't willing to tell you how much money they are making or let you know that your loan terms are changing minutes before closing, get out! Work with someone who can provide references. Work with someone who deserves your trust and has your prosperity in mind.
3.) Should the legislature determine which loans are acceptible for consumers?
- No! Borrowers need to take responsibility and understand the exact terms of their loan. When I speak with borrowers, the most important question I ask is, "What is your worst case scenario?" I work with investors, first time home buyers and everyone in between. Their needs are different. The loans that fit these needs are different.
The bottom line:
Don't trust anyone with your financial future. Ask the hard questions, understand your worst case scenario. Make wise investments that will build wealth! There will always be scum looking to kill it off of some poor sucker. Work with people who are honest and deserve your trust. Am I the richest loan officer you'll meet? Absolutely not. Will I do everything in my power to help my customers achieve wealth? Yes!
His loans were just canned because of the Colorado legislature.
Why??
Foreclosures have been blowing up. The government has to step in to protect its constituents right?
I disagree.
The loans that the lender canned were sophisticated loans that required no income disclosure.
(If you want to know exactly why the no income loan fits borrowers who retain many properties, please contact me. Basically, those who own & rent real estate have an extremely high overhead because the mortgage payments are so high.)
Anyway.... back to the task at hand.
1.) Should mortgage broker's be licensed?
-Absolutely. You, as a consumer, have a right to know that the person handling your mortgage is not a criminal.
2.) Should consumers enter mortgage agreements with caution?
-Yes! If your mortgage broker isn't willing to tell you how much money they are making or let you know that your loan terms are changing minutes before closing, get out! Work with someone who can provide references. Work with someone who deserves your trust and has your prosperity in mind.
3.) Should the legislature determine which loans are acceptible for consumers?
- No! Borrowers need to take responsibility and understand the exact terms of their loan. When I speak with borrowers, the most important question I ask is, "What is your worst case scenario?" I work with investors, first time home buyers and everyone in between. Their needs are different. The loans that fit these needs are different.
The bottom line:
Don't trust anyone with your financial future. Ask the hard questions, understand your worst case scenario. Make wise investments that will build wealth! There will always be scum looking to kill it off of some poor sucker. Work with people who are honest and deserve your trust. Am I the richest loan officer you'll meet? Absolutely not. Will I do everything in my power to help my customers achieve wealth? Yes!
Jun 27, 2007
Own Your Future!
Check out this article.
http://www.denverpost.com/specialreports/ci_4421584
So basically, an elderly couple on fixed income with escalating medical bills was encouraged to obtain an option arm loan.
What is an option arm?
-Basically, an option arm is an adjustable rate mortgage with payment options. You can pay interest, amortization or the minimum payment which is actually less than your interest rate. In other words, every month you make the minimum payment, you owe more on your house then you did before. When you owe 110 - 115% of your homes value.... hasta luego minimum payment and hello amortizing loan.
Is the option arm evil?
-Yes and no. It's definitely not for everyone.
Who is it for and why?
-Frankly, right now I wouldn't encourage anyone to take on an option arm. If short term interest rates were very low (i.e. 3%), the market was seeing strong appreciation (i.e. 5%) and the borrower is financially capable of making drastically larger payments should the negative amortization cap hit.
In other words, I only recommend this loan under certain circumstances for savvy knowledgeable investors who understand exactly what the loan entails.
Whose is to blame in the case of this article?
-No one likes to blame consumers (especially senior citizens on fixed income) for trusting a mortgage broker and not asking enough questions. That being said, consumers absolutely must understand the intricacies of their mortgage and always know their worst case scenario! If you are in a loan and don't know your worst case scenario, you need to find out and fast.
-Mortgage brokers looking out for their checkbook are also to blame. Few consumers understand loans. Brokers need to understand this and take on the responsibility to educate their customers. Broker - client relationships must be a win -win. The broker pays his bills and the consumer has the loan that best fits their needs.
-Regulation basically doesn't exist. The government could eliminate more exotic loans.
My two cents....
1. Consumers, take responsibility for your financial future. Be an informed client. Ask for references. No matter what kind of government regulation exists, there will always be brokers looking for maximum commissions with minimal regard for their clients.
2. Brokers, put yourselves in the shoes of the consumer. Make sure they are informed. Ask questions to make sure that this loan best meets their needs.
3. Regulation needs to exist. I believe broker licensing is the most important step. More disclosures that borrowers don't read won't help. Eliminating option arms will not fix the problem.
The Bottom Line:
Work to become an educated and informed client with a reputable broker whose priority is your prosperity!
http://www.denverpost.com/specialreports/ci_4421584
So basically, an elderly couple on fixed income with escalating medical bills was encouraged to obtain an option arm loan.
What is an option arm?
-Basically, an option arm is an adjustable rate mortgage with payment options. You can pay interest, amortization or the minimum payment which is actually less than your interest rate. In other words, every month you make the minimum payment, you owe more on your house then you did before. When you owe 110 - 115% of your homes value.... hasta luego minimum payment and hello amortizing loan.
Is the option arm evil?
-Yes and no. It's definitely not for everyone.
Who is it for and why?
-Frankly, right now I wouldn't encourage anyone to take on an option arm. If short term interest rates were very low (i.e. 3%), the market was seeing strong appreciation (i.e. 5%) and the borrower is financially capable of making drastically larger payments should the negative amortization cap hit.
In other words, I only recommend this loan under certain circumstances for savvy knowledgeable investors who understand exactly what the loan entails.
Whose is to blame in the case of this article?
-No one likes to blame consumers (especially senior citizens on fixed income) for trusting a mortgage broker and not asking enough questions. That being said, consumers absolutely must understand the intricacies of their mortgage and always know their worst case scenario! If you are in a loan and don't know your worst case scenario, you need to find out and fast.
-Mortgage brokers looking out for their checkbook are also to blame. Few consumers understand loans. Brokers need to understand this and take on the responsibility to educate their customers. Broker - client relationships must be a win -win. The broker pays his bills and the consumer has the loan that best fits their needs.
-Regulation basically doesn't exist. The government could eliminate more exotic loans.
My two cents....
1. Consumers, take responsibility for your financial future. Be an informed client. Ask for references. No matter what kind of government regulation exists, there will always be brokers looking for maximum commissions with minimal regard for their clients.
2. Brokers, put yourselves in the shoes of the consumer. Make sure they are informed. Ask questions to make sure that this loan best meets their needs.
3. Regulation needs to exist. I believe broker licensing is the most important step. More disclosures that borrowers don't read won't help. Eliminating option arms will not fix the problem.
The Bottom Line:
Work to become an educated and informed client with a reputable broker whose priority is your prosperity!
Jun 25, 2007
Most Important Number
Not your birthday.
Not the significant other's birthday.
Not your anniversary.
Not your income.
Not your checking account.
The most important number you will encounter is your credit score.
I have no idea why they don't require a high school or college course on credit. Here is an article posted by Bankrate concerning the costs of poor credit.
http://www.bankrate.com/nltrack/news/Financial_Literacy/June07_credit_scores_value_a1.asp?ec_id=brmint_ns_cc_20070625&s=1&caret=36c
If you have any questions about building credit or repairing damaged credit, feel free to contact me.
No cost.
No obligation.
Free advice that can empower your financial security.
Not the significant other's birthday.
Not your anniversary.
Not your income.
Not your checking account.
The most important number you will encounter is your credit score.
I have no idea why they don't require a high school or college course on credit. Here is an article posted by Bankrate concerning the costs of poor credit.
http://www.bankrate.com/nltrack/news/Financial_Literacy/June07_credit_scores_value_a1.asp?ec_id=brmint_ns_cc_20070625&s=1&caret=36c
If you have any questions about building credit or repairing damaged credit, feel free to contact me.
No cost.
No obligation.
Free advice that can empower your financial security.
Panic in the Streets!
Subprime mortgages are dead.
Foreclosures are at all time highs.
Home sales continue to fall.
What on earth am I doing in real estate?
I believe that a great value is still a great value.
-Are they easy to find? No.
-Are they easy money? Absolutely not.
-Do they exist? Yes!
The real estate market is cyclical. It will turn around. When? I don't know. I do think Denver will start to pick up within the next 2 years. For renters or those who want to own a rental, now is a great time to get involved in residential real estate.
Foreclosures are at all time highs.
Home sales continue to fall.
What on earth am I doing in real estate?
I believe that a great value is still a great value.
-Are they easy to find? No.
-Are they easy money? Absolutely not.
-Do they exist? Yes!
The real estate market is cyclical. It will turn around. When? I don't know. I do think Denver will start to pick up within the next 2 years. For renters or those who want to own a rental, now is a great time to get involved in residential real estate.
Jun 21, 2007
Balls or Stupidity?
Sometimes I wonder which category I fall into when it comes into real estate investing.
We often times work with investors who want to start investing in real estate. My estimate is that less than 10% of these qualified and motivated leads actually follow through.
(Let me define qualified: 1- Good Credit 2- Good Employment 3- Strong assets whether in the form of equity, cash, stocks, retirement, etc...)
Today, a general contractor with over $250,000 in the bank bailed on a property and lost over $5,000 in earnest money. What?? This is the most qualified flipper I've ever seen!
Back to balls vs. IQ....
It probably takes a little bit of both.
-I've never met anyone who has told me that making money in real estate is easy. It's just not. -I've never had anyone tell me that nothing unexpected popped up along the way. Stuff happens.
-I've never met anyone who stayed on both their budget and timeline with their first flip.
This is the reality. Flipping real estate offers the highest risk and highest returns in the industry. It's not for everybody and that's okay.
Before you jump into flipping, you have to be 100% dedicated and willing to put everything you've got into the project.
It takes balls.
It might take a small dose of stupidity.
Dig it?
We often times work with investors who want to start investing in real estate. My estimate is that less than 10% of these qualified and motivated leads actually follow through.
(Let me define qualified: 1- Good Credit 2- Good Employment 3- Strong assets whether in the form of equity, cash, stocks, retirement, etc...)
Today, a general contractor with over $250,000 in the bank bailed on a property and lost over $5,000 in earnest money. What?? This is the most qualified flipper I've ever seen!
Back to balls vs. IQ....
It probably takes a little bit of both.
-I've never met anyone who has told me that making money in real estate is easy. It's just not. -I've never had anyone tell me that nothing unexpected popped up along the way. Stuff happens.
-I've never met anyone who stayed on both their budget and timeline with their first flip.
This is the reality. Flipping real estate offers the highest risk and highest returns in the industry. It's not for everybody and that's okay.
Before you jump into flipping, you have to be 100% dedicated and willing to put everything you've got into the project.
It takes balls.
It might take a small dose of stupidity.
Dig it?
Jun 20, 2007
Conversation
I was in the bank today chatting with a personal banker. The banker really envied me. Why?
1 - I have a few business accounts. I guess this makes it look like I'm running numerous businesses which seems to imply that I'm making a ton of money. Why else would someone need so many accounts? Answer: Record keeping. Running all of my flips, mortgages and rental through different accounts makes record keeping much easier.
2 - I am self employed. I get to set my own schedule and take as much time as I want to off! Not so fast.... I work evenings and weekends. I have to provide my own health insurance and I have no benefits. If you're looking for an 8-5 Monday - Friday with great benefits and 2 weeks of vacation, forget self employment. If your looking for 60 hours a week, working 6 days a week and no certainty of a paycheck..... look into self employment. (For the record, I love being self employed and never plan on working an 8 - 5 in a corporate environment.)
3 - Real estate investor = rich, right? I hope so. I'm far from rich right now. Hopefully, after a few sound investments, I'll see some big numbers in all of those bank accounts.
1 - I have a few business accounts. I guess this makes it look like I'm running numerous businesses which seems to imply that I'm making a ton of money. Why else would someone need so many accounts? Answer: Record keeping. Running all of my flips, mortgages and rental through different accounts makes record keeping much easier.
2 - I am self employed. I get to set my own schedule and take as much time as I want to off! Not so fast.... I work evenings and weekends. I have to provide my own health insurance and I have no benefits. If you're looking for an 8-5 Monday - Friday with great benefits and 2 weeks of vacation, forget self employment. If your looking for 60 hours a week, working 6 days a week and no certainty of a paycheck..... look into self employment. (For the record, I love being self employed and never plan on working an 8 - 5 in a corporate environment.)
3 - Real estate investor = rich, right? I hope so. I'm far from rich right now. Hopefully, after a few sound investments, I'll see some big numbers in all of those bank accounts.
Jun 19, 2007
Mortgage Broker Licensing!
Colorado is one of the last states to implement licensing standards for mortgage brokers.
Members of the mortgage industry are somewhat split concerning licensing.
My opinion - Licensing is great for our industry. It provides accountability. It will eliminate uneducated and unqualified brokers.
That being said, regulation will not transform every broker into a vehicle working for the borrower's interests. Always work with a trustworthy reputable broker who can provide references!
Check out http://www.dora.state.co.us/real-estate/mortgage/legislation.htm
Members of the mortgage industry are somewhat split concerning licensing.
My opinion - Licensing is great for our industry. It provides accountability. It will eliminate uneducated and unqualified brokers.
That being said, regulation will not transform every broker into a vehicle working for the borrower's interests. Always work with a trustworthy reputable broker who can provide references!
Check out http://www.dora.state.co.us/real-estate/mortgage/legislation.htm
Jun 18, 2007
Burnt Out...
We missed our open house deadline that we'd set for Saturday. Disappointing to say the least. The house will be done in the next day or two, but that means a couple more long nights and a couple more days in carrying costs. Most importantly, it means I won't see any cash!
How important are deadlines?
In this case, I decided to blow my deadline rather than contract out some of the remaining work. My carrying costs are so low that financially, I'm way better off taking a couple of extra days to do the work myself.
Almost there...........
How important are deadlines?
In this case, I decided to blow my deadline rather than contract out some of the remaining work. My carrying costs are so low that financially, I'm way better off taking a couple of extra days to do the work myself.
Almost there...........
Jun 15, 2007
Deadline...
I have an open house. My property is being listed tomorrow. One problem...
It's not done!
I'm looking at a couple of long days. In less than 38 hours, the open house is happening.
I have 38 hours to tile, grout, install lighting, paint, install new electrical outlets, switches, a microwave..... The list goes on and on. After working for over 16 hours today, tomorrow looks like another 15 hours minimum.
Time for some honesty....
I'm tired. Exhausted. I have too many 'irons on the fire' so to speak.
I love it. I love the pressure. I love the deadlines. I love the volatility and risk involved.
Like many of you, I don't want to work for someone else. I want to do my own thing. My thing is real estate.
I believe I'm willing to pay the price. I'm willing to put in the time. I'm willing to take the risk. I'm going to give this all of my energy. The upside is just too good to pass up.
37:30 and counting.....
It's not done!
I'm looking at a couple of long days. In less than 38 hours, the open house is happening.
I have 38 hours to tile, grout, install lighting, paint, install new electrical outlets, switches, a microwave..... The list goes on and on. After working for over 16 hours today, tomorrow looks like another 15 hours minimum.
Time for some honesty....
I'm tired. Exhausted. I have too many 'irons on the fire' so to speak.
I love it. I love the pressure. I love the deadlines. I love the volatility and risk involved.
Like many of you, I don't want to work for someone else. I want to do my own thing. My thing is real estate.
I believe I'm willing to pay the price. I'm willing to put in the time. I'm willing to take the risk. I'm going to give this all of my energy. The upside is just too good to pass up.
37:30 and counting.....
Jun 14, 2007
Final 48....
Just over 48 hours from now is the open house deadline. I've got a detailed plan laying out everything that needs to be done. It's going to be nuts. Not much sleep, lots of stress. Tons of "finishing touches."
I'll try to keep everyone up to date, but no promises. Wish me luck!
I'll try to keep everyone up to date, but no promises. Wish me luck!
Jun 13, 2007
Ouch....
I'm not referring to my back after 8 hours of laying tile yesterday... I wish I was.
"Colorado came in second with one foreclosure filing for every 290 households, which was 2.3 times the national average. Colorado's foreclosure activity, at 6,231 foreclosure filings in May, rose 9 percent from the previous month and was an increase of more than 50 percent from May 2006" (Source: CNBC http://www.cnbc.com/id/19193611)
OUCH!
What does this mean for homebuyers, homewners and investors?
"Colorado came in second with one foreclosure filing for every 290 households, which was 2.3 times the national average. Colorado's foreclosure activity, at 6,231 foreclosure filings in May, rose 9 percent from the previous month and was an increase of more than 50 percent from May 2006" (Source: CNBC http://www.cnbc.com/id/19193611)
OUCH!
What does this mean for homebuyers, homewners and investors?
- Homeowners - Foreclosures drive market prices down, making it more difficult to sell & move up or to refinance.
- Homebuyers - Lenders have cut back first time buyer programs, but if you can qualify there are a ton of good deals out there.
- Investors - Get off of this foreclosure mindset. Will your investments probably be foreclosures? Yes. 1 of every 290 houses is in foreclosure! Does this automatically mean you're getting a great deal? No way! Look for great deals. Who cares if the property is owned by a bank or private seller?
Jun 12, 2007
What Am I Worth?
I asked my mom and she said that I'm priceless.
I asked my girlfriend and she said it depended on the day.... she was serious.
I'm not going to ask my friends because I don't think I'll like what I hear back.
The question?
"What am I worth?"
As this question pertains to real estate and specifically fix ups, this is an important question to consider and answer. Why?
I asked my girlfriend and she said it depended on the day.... she was serious.
I'm not going to ask my friends because I don't think I'll like what I hear back.
The question?
"What am I worth?"
As this question pertains to real estate and specifically fix ups, this is an important question to consider and answer. Why?
- You need to know what your skills are worth. Am I in over my head? Would I be better off (time, money, quality) to hire this particular task out?
- You need to know what your time is worth. Let's say you do (insert job) by yourself. It takes four full days to complete. Did you save money? It depends. Here is an example:
Carrying costs per day (Payment, Interest) - $50.00
Cost of professional labor - $500.00
$50 x 4 = $200 so you saved $300 right? Not so fast. If you would have hired a professional, you could have spent four days working on other tasks. In other words -
$50 interest x 8 days = $400. Now you only saved $100.00.
I don't think its worth $100 to carry the house for another week. When working with real estate, GET IN, GET OUT, GET PAID.
Big Day......
Today is going to be a long and hopefully rewarding day. I need to finish tiling counter tops and install travertine tile throughout the kitchen and walkway. 4 days until the open house. Can't wait!
Predictions:
-I won't be able to stand up straight for at least 36 hours.
-I'll sleep like a baby tonight.
-I'll celebrate completion with at least 2 beers.
Predictions:
-I won't be able to stand up straight for at least 36 hours.
-I'll sleep like a baby tonight.
-I'll celebrate completion with at least 2 beers.
Jun 11, 2007
Marketing!
Here is the deal. I haven't listed my property yet. I'd really like to sell without involving realtors as it costs me 6% of the sales price and I have plenty of experience dealing with real estate contracts. Here is what I'm doing so far....
Open House Special
-Pricing over 5% under market value for open house
-Distributing flyers with pertinent information to local real estate agents and offices.
-Advertising on Craig's List.
I'd be open to hearing any suggestions.... matt.d.hanna@gmail.com 720.236.9695
Open House Special
-Pricing over 5% under market value for open house
-Distributing flyers with pertinent information to local real estate agents and offices.
-Advertising on Craig's List.
I'd be open to hearing any suggestions.... matt.d.hanna@gmail.com 720.236.9695
Open House
Saturday, I'm hosting an open house for a property I've flipped. I'm excited for a couple of rea$on$.
First of all, I'm tired of working on this place every waking moment for the past couple of months. I'm tired of putting in 25 hours a weekend fixing the place up on top of evenings and afternoons I was able to skip out of the office. I want to go golfing, camping, fishing, bobbing for apples.... whatever. Now that I've complained, there is also a tremendous feeling of satisfaction. I've completely remodeled a house. I'm proud of my work. I would buy this place.
**Sidenote: When this townhome was purchased, Tanna hated it. It was ugly, cramped and smelled. I told Tanna that she was the barameter for this project. She needed to love it when we finished. She loves it.
Most importantly, I'm excited to make some money. Afterall, that's why I'm investing. It's not a service project. That being said, I truly believe that this is a win-win situation. I will price the property under market value to ensure a quick sale and the buyer will step into some instant equity.
Wish me luck...
First of all, I'm tired of working on this place every waking moment for the past couple of months. I'm tired of putting in 25 hours a weekend fixing the place up on top of evenings and afternoons I was able to skip out of the office. I want to go golfing, camping, fishing, bobbing for apples.... whatever. Now that I've complained, there is also a tremendous feeling of satisfaction. I've completely remodeled a house. I'm proud of my work. I would buy this place.
**Sidenote: When this townhome was purchased, Tanna hated it. It was ugly, cramped and smelled. I told Tanna that she was the barameter for this project. She needed to love it when we finished. She loves it.
Most importantly, I'm excited to make some money. Afterall, that's why I'm investing. It's not a service project. That being said, I truly believe that this is a win-win situation. I will price the property under market value to ensure a quick sale and the buyer will step into some instant equity.
Wish me luck...
Here We Go....
After several months, I'm finally online and ready to rock. The website is in the process of being finalized. I've got a bunch of articles written and ready to post. I look forward to getting some feedback and making this site a resource for you.
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