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.
Jul 11, 2007
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.....
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