Hello members I wanted to pass along this article from the Federal Reserve Bank of New York.

 

"Flip This House": Investor Speculation and the Housing Bubble"

 The recent financial crisis-the worst in eighty years-had its origins in the enormous increase and subsequent collapse in housing prices during the 2000s. While the housing bubble has been the subject of intense public debate and research, no single answer has emerged to explain why prices rose so fast and fell so precipitously. In this post, we present new findings from our recent New York Fed study that uses unique data to suggest that real estate "investors"-borrowers who use financial leverage in the form of mortgage credit to purchase multiple residential properties-played a previously unrecognized, but very important, role. These investors likely helped push prices up during 2004-06; but when prices turned down in early 2006, they defaulted in large numbers and thereby contributed importantly to the intensity of the housing cycle's downward leg. Read complete story below. Paul

http://libertystreeteconomics.newyorkfed.org/2011/12/flip-this-house-investor-speculation-and-the-housing-bubble.html

 

Tags: bank, business, BUYING, federal reserve, homes, HOUSE, investor, IRS, Licensed, market, money, real estate investor, Realtor, time

You might be as surprised as I was when I started doing some research on Reverse Mortgage defaults. See, I was working with one of the attorneys I do some consulting with and he was upset that the mortgage holder of one of his clients that had a reverse mortgage would not do a short sale. I explained to him that they are backed by the Government so they were going to get all of their funds so a short sale was not in their best interest

But he said my client was in default on her loan as she has not paid taxes and insurance in years and was in “technical default”. Here was the reason not to do a short sale. If the bank agreed to the short sale, they would lose the funds they had already paid in taxes etc. But if they foreclosed, the government would cover those losses. So then I googled Reverse Mortgage defaults and there was no shortage of information available. This is the first one I saw, and here is the link so you can read all about it.

HUD Issues Reverse Mortgage Default Guidance

http://portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2011/HUDNo.11-001

According to the Government about 30,000 reverse mortgages (or about 5% of the total) are in technical default.

Florida leads the country in terms of the number of defaults, with nearly 8% of the U.S. total, according to the CredAbility Group, a nonprofit consumer-credit counseling service based in Atlanta

Reverse-mortgage defaults generally have more than doubled during the past two years, as cash-strapped homeowners have fallen behind in paying the insurance, taxes and other household-upkeep expenses required by their loan terms, said Sue Hunt, CredAbility’s director of reverse-mortgage counseling.

This is a major issue for Florida as our property values have plummeted and continue to drop monthly in most areas. As seniors get older, medical bills continue to rise and money may be in short supply. What will they do pay property taxes or buy their prescription or food? This has the potential to be a major issue for the families of parents that have reverse mortgages. Will family members pay back taxes and insurance and deferred maintenance on property that is under water (and may be a home no one wants)? And the final thought: are we willing to put grandma out on the street for not being able to pay her taxes?

Tags: Atlanta, attorney, attorneys, bank, CASH, client, consumer credit counseling, consumer credit counseling service, country, credability, credit, credit counseling service, default, director, Face, family, Florida, food, foreclosed, foreclosure, government, GROUP, home, HOUSE, hud, information, insurance, interest, IRS, loan, maintenance, media advisories, medical bills, money, mortgage, mortgage default, mortgage defaults, mortgage holder, mortgages, nonprofit consumer, number, owner, Permanent, prescription, Property, property taxes, property values, rent, reverse mortgage, reverse mortgages, sale, seniors, short sale, Tax, taxes, U.S., upkeep expenses, value

No one is saying anything about the people that refinanced their homes and took cash out to buy cars, vacations, and flat screens TV’s pay off their credit cards etc. Add that to people buying deals and flipping them and making 50k on them over night because people thought this was going to last forever. And our politicians made money hand over fist as well. GSE guaranteed the loans so the tax payers were on the hook and banks played the game and gave our politicians millions in campaign dollars for the guarantees and to turn the other cheek. Greed was the biggest factor in the housing market. There is plenty of blame to pass around. And as for home loan being refinanced or modified the program was never meant to succeed. It was only red meet for the underwater homeowners and the special interest groups trying to get them approved “it’s all about the money” congress gave them money to do the work” ACORN” and other groups got millions of taxpayer monies. Congress and FDIC agreed to pay banks for their losses so way agree to a modification of a loan.  Now you add the shadow inventory and the market keeps dropping. The only way to turn this around is to get the shadow inventory on the market and let the bottom fall out. Then you can start to get the market on track. But remember GREED is the reason we are in this mess. And every one is guilty of it!!!

Tags: acorn, anything, banks, BUYING, campaign, campaign dollars, CASH, Congres, Congress, credit, FDIC, greed, guarantees, home, homes, Housing, housing market, interest, inventory, loans, modification, money, money congress, owner, people, program, special interest groups, Tax, taxpayer, taxpayer monies, vacation

Since the Real Estate crash pundits from all over have been saying that the new norm is less home ownership and more people renting. The financial gurus have also started saying there is no financial gain in the long run to home ownership. See what happens when the markets drop: people’s homes go underwater and foreclosures sky rocket.

I want to take a few lines of this newsletter to rehash some of the issues of our present foreclosure market. 1) A large portion of the homes that are being foreclosed were sold to investors with 100% financing. Why do you think the hardest hit states are Florida, Arizona, Nevada and California? Another large portion consists of people who had no business buying homes. They got 100% financing with no credit and no incentive to make payments. 2) Wall Street wanted to make their fees so all they (seemingly) required was that the people be breathing in order to get a loan. They knew the FED would back them when the BS hit the fan.

All that and here we are today with people, and even the President, saying we need to rethink home ownership and the mortgage tax deduction.

I disagree with the premise that a community is no better off with a high ownership rate than one with a low ownership rate. Common sense will tell anyone that this doesn’t ring true. A community depends on stability of its people to thrive and continue to make the quality of life better for everyone. In a community with high rental housing people always come and go. The job market is always in flux because people keep moving. They have no ties to the community. As an example, the house next to me is a rental and in the last 18 months they have had 4 different tenants.

This causes a domino effect. The local schools have trouble keeping teachers because enrollment changes so much from year to year. Vital services such as police and fire are always in flux because of the unstable population. Rental homes are never taken care of like homes that are owned by the people living in them. Yes, I know that’s not always the case but in general you can tell a rental from a home that is owned.

Now don’t get me wrong, I own rental property so I’m not against it. There will always be some people who don’t want to be or are not meant to be home owners and who need someone else to take on that responsibility. Unfortunately, that was part of the problem with the real estate mess we have now. The people in the house never really took ownership; most looked at it as a rental with benefits.

One of the problems I see in the future is that people who only rent will always be paying someone to have a place to live, even as they get older. If this isn’t possible, they may have to move in with the kids. Not a pleasant situation in many cases. As investors we need to figure out the best way to position ourselves to provide a service, and make a living.

As I’m writing this piece I have the TV news on. The anchorwoman is talking about how the housing market is continuing to decline and more people will be going into foreclosure. And isn’t it a shame that all these people are losing their homes and the equity they thought they were going to have at retirement. (Equity that, by the way, was highly inflated, but that wasn’t part of the conversation) Wouldn’t they be better off renting? Next some economist came on and gave all the reasons why it’s better to rent.(I was trying to write them down; I plan on using some of them the next time I talk to a potential tenant, the guy was pretty convincing!)

I believe as investors we can insert ourselves into this conversation and let people know we’re the experts and can help them with their choices. By doing this you can position yourself to make money with renters and people that want to buy. Now you’re the expert in both areas. You’re meeting the needs of people who want to own, but aren’t sure what they need to buy a home in the current economy. And you’re helping people who don’t want the responsibility of home ownership. One thing I would do if you’re going to buy single family rentals is buy them in areas that have high owner occupancy. These homes will have a higher value and will be more desirable rentals.

I found this list of homeownership by countries on the Internet. As you can see the U.S. is not even close to the top of the list. I got this from a Google search so you can get more info if you like.

Showing latest available data.

Rank   Countries    Amount  # 1   Ireland: 83%    # 2   Italy: 78%    = 3   Australia: 69%    = 3   United Kingdom: 69%    = 5   Canada: 67%    = 5   Finland: 67%    = 7   United States: 65%    = 7   Belgium: 65%    = 9   Japan: 60%    = 9   Sweden: 60%    # 11   France: 54%    # 12   Denmark: 53%    # 13   Netherlands: 49%    # 14   Germany: 43%      Weighted average:    

 

Home ownership is still important to the country as a whole. As an investor, though, you need to be in both the rental business and the find, fix, and sell programs. Be pro active and get involved in the market and in the conversation.

 Paul J Da Costa is a Real Estate Consulant.

Can Be Reached at 941-716-2597

E-Mail paul@pauljdacosta.com

www.pauljdacosta.com

Tags: business, BUYING, California, common sense, consulant, country, credit, domino effect, economy, equity, estate crash, financial gain, financial gurus, Florida, foreclosed, foreclosure, foreclosure market, foreclosures, Happen, home, home ownership, homes, HOUSE, Housing, housing market, investor, investors, IRA, job, large portion, local schools, market, money, mortgage, mortgage tax deduction, owner, pauljdacosta, people, Property, quality of life, rate, Real Estate, retirement, single family, sold, Tax, wall street

Ok, I know what you’re thinking: Yeah, Paul, everyone says that every New Year and they go right on doing the same things they did last year. And I would say you’re right on with that and the key is …they keep doing the same thing year after year and expect a different result. According to Albert Einstein, that’s the definition of Insanity! Sound familiar? You might even say this is you?

I work with numerous Realtors and Investors and the one overriding theme I keep hearing is the economy is so bad and there’s no money and no one is buying anything. The only problem with that is it’s not true. Yes, finding financing is harder but homes are being bought with bank financing. Investors are buying homes with investor loans. And Realtors are selling homes! Just check those facts with the National Association of Realtors.

I know one investor in my REIA group who has bought 20 properties this year, fixed them up and sold every one with bank financing. Other investors have bought homes with bank financing with 30% down. I have bought 2 homes in the last 4 months with bank financing.

As for Realtors, I am working with one husband and wife team on their marketing program. They had sold a home to a couple from Philadelphia and within 3 weeks they sold another home to a friend of the first sale. So we put together a 3 step mailer to people in their area along with an 800 number to call for more information. They sent out info on the area and as I am writing this they have sold 6 more houses.

Now they are doing the same marketing plan to the surrounding areas and are getting great results. Other agents I know are marketing to the Midwest about all the great deals in Southwest Florida.

I am working on a multi-level marketing program with web sites and a multi-step marketing campaign to California telling people how great it is in Florida: great weather, no income tax, and some of the most beautiful beaches anywhere. I’m using the same program ‘selling’ the Atlanta area.

I also have 5 education seminars scheduled for myself this year. If you plan on succeeding you must keep learning. How many education events have you already scheduled? You should plan at least one on marketing.

The way I see it, everyone has 2 choices: do the same thing as last year then sit around and complain that all the dark forces are against them, or decide to change their mindset and business plans. 2011 depends more on you than any outside factors. I encourage you to look at the things that worked well for you in 2010 and do it again, and to always look for new opportunities to succeed.

Change the people you hang around with if they are negative and surround yourself with positive forward thinkers.

I am available for one on one coaching and help with your marketing. And I will be doing a couple of master mind programs again this year. Call me at 941-716-2597 for more information.

Good Luck and make 2011 your best year yet!! 

1181 South Sumter Blvd Suite 301                      

North Port, Florida 34287                                                          

941-716-2597                                                                            

Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

Paul is available for select speaking engagements and can be reached at 941-716-2597

www.pauljdacosta.com

paul@pauljdacosta.com

Tags: agent, albert einstein, Association, Atlanta, atlanta area, bank, bank financing, beaches, business, BUYING, California, coach, coaching, cost, courage, deal, definition of insanity, economy, education, educator, Florida, Georgia, GOOD, great deals, hearing, home, homes, HOUSE, houses, husband and wife, income, income tax, information, Insanity, investor, investor loans, investors, IRS, Licensed, loans, market, marketing, marketing campaign, marketing plan, marketing program, master mind, midwest, money, multi level marketing, National, national association of realtors, national speaker, new year, pauljdacosta, people, Philadelphia, Port, problem, real, Real Estate, real estate investor, Realtor, realtors, REIA, rent, sale, sellingâ, site, sold, South Sumter, southwest florida, Tax, weather

This weekend I held another “Real Estate For The Next Decade” education day in Atlanta. We had a packed house of Realtors and investors. Guest speakers included experts in Real Estate Law, Taxation, and using self directed IRA’s in Real Estate. We also heard from a mortgage specialist from Bank Of America talking about the FHA Rehab loan. I spent time on exit strategies and my Three Tier System on property location, as well as on marketing.

All the attendees agreed that the information definitely pertained to their business, and said they really wanted to start using it. But the overriding complaint from the members was, “I’m so tired now and don’t have time to do things I need to do, how on earth can I do this stuff as well??” After hearing about 10 people say the same thing I knew too many of them were working in their business and not on it.

So I started asking the group some questions and we (speakers) were all were surprised at how many of these people were doing everything in their business. To give you an example: out of 32 Real Estate investors only 2 were using a property management company. The biggest concern for the rest was the cost of using a company, and of having someone other than themselves or their own people handle the repairs. I explained to the group that those costs were minimal if you just consider the costs involved in answering all those phone calls about exploding toilets or broken windows, then doing the repair job yourself. This is working in your business. I asked how many people needed money to buy more homes. They all raised their hands. Well, you can’t raise money if you’re fixing toilets. Raising money is working on your business.

Let’s handle the issues of cost.  All said the property managers’ fees were too high. Most property managers charge 8% of the rent so if you have a rent at $ 650 their fee is $ 52.00. This is nothing in the big picture of your business. They handle all the calls and the issues with tenants who don’t pay. You can negotiate that they also handle all evictions at their cost, and I do this. If you’re doing it, how much does it cost you in hard cash, not to mention your time and that’s worth a lot. And in most states you have to go in front of a judge. They look at property managers as just doing their job but an investor is seen as just a greedy slumlord trying to throw this poor person out just because they did not pay rent. Some get all self righteous and benevolent, and tell the tenant they can have 60 days to move out and there’s nothing you as the corrupt landlord can do about it. Yep, they do it and you know it’s true. So now did you save yourself any money?  Nope, just gave yourself more aggravation. And how can you take time to go to court if you have to answer the phone all the time?

Most of the investors thought you must use the property management fee schedule or else. I explained that’s not true and you can set your fees by the number of properties they handle for you. Also if you use a handy man you can have the property manager call that person first. In case of emergencies if your guy doesn’t answer then they can call their guy.

Some of the Realtors felt they could not work any harder and adding more would send them over the top. Their biggest hurdle was paperwork. They said they spent hours for each listing and sale. I then asked if they had someone in their office whom they could pay to handle that for them. Most said yes but did not want to pay the $ 295.00 fee. I asked them how much was their time worth per hour and what the value of a customer was. None could answer these questions. I also asked them if they had to pay the person up front or when the property sells? They all said when it sells. With this information we figured out an option where they might work a deal with the person for a professional discount, if they gave this person all their business. And if they don’t have to pay until the property closes it won’t affect the cash flow now. How many more listings or sales could they get if they were working on their business not in it?

And the last thing that was a complete surprise to me: most do their own taxes! I was stunned! One investor had 30 houses and does his own taxes because he said his accountant charges $ 1000.00 to do them and he thought that was outrageous. I was laughing because I thought he was too cheap! Imagine having 30 rentals with all those deductions and IRS tax laws and loopholes. He’s complaining about a $ 1000.00:  GOD help him if he gets audited!  Folks, there are many things you can skimp on. But for your business to be successful you have to do what you do best- work ON it, not IN it. There are many people who can handle paperwork, reception duties, repair duties, taxes. But only YOU know what it takes to make YOUR business go where you want it.

  1181 South Sumter Blvd Suite 301                       695 Mansell Road – Suite 120

                North Port, Florida 34287                                                           Roswell, GA  30076

                 941-716-2597                                                                             678-287-4800

 Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

Paul is available for select speaking engagements and can be reached at 941-716-2597

www.pauljdacosta.com

 

Tags: accountant, America, Atlanta, attendees, bank, bank of america, big picture, broken windows, business, CASH, cost, customer, deal, Decade, discount, education, example, exit, exit strategies, fha, Georgia, GROUP, guest speakers, hearing, home, HOUSE, houses, information, investor, investors, IRA, IRAâ, IRS, job, judge, landlord, Law, Letâ, Licensed, Management, manager, market, marketing, money, mortgage, mortgage specialist, national speaker, next decade, people, person, phone calls, professional, Property, property location, property management company, property managers, raising money, rate, real, Real Estate, real estate investor, real estate investors, Realtor, realtors, rehab, rehab loan, rent, rental, repair, repair job, sale, self directed ira, slumlord, Tax, taxation, taxes, tier system, time, toilets, value

(Secure and Fair Enforcement for Mortgage Licensing Act of 2008)

According to the HUD interpretation of the SAFE Act anyone who sells any single family house or 1-4 units and does not live in it as their primary residence, and who wants to offer the buyers the benefits of a seller carryback note is a potential criminal who needs to be watched, regulated, licensed and taxed. This despite the fact that “seller financing,” “seller carrybacks,” “seller-held notes” or any other synonym doesn’t appear anywhere in the Act — Source the paper source

 

 

These property sellers have to have government approval via licensing before they hold a note or even discuss terms of a note with a buyer who is not a member of their immediate family.  If they are not licensed they will be fined.  If they don’t pay they will go to jail. Source the paper source

 

Ok, now that I have your attention we can move forward.

 

We investors and realtors must pay attention to all the laws that are changing in our business daily and the SAFE Act is a great example of this. I have scoured the internet and have spent time with both of my lawyers to make sure I am following the rules.

You need to know that it’s not as bad as it looks. Some people are making it sound like the end of seller carrybacks or seller held notes.  But only the rules have changed and you need to adjust to them, period.

You can find copies of the SAFE Act on the ‘net so I’m not going to talk in detail about it here. Basically the Act is designed to protect consumers from getting loans they can never pay back or from not understanding what they are signing. So the feds have come up with this Act which requires testing and designates who can talk about mortgages and who can discuss terms of the loans. This is where seller carrybacks or seller financing comes into effect.

I want to look at this as an investor first and then as a realtor. As an investor who has used owner financing, I find it’s a good way to sell property and to improve your bottom line. There are a couple ways this could be done. The first is investors loaning money to other investors so they can buy property and the second is investors holding seller carry backs to the end user.

Investors loaning money to investors, according to both my attorneys, is not as a big of a problem as loaning to an end user. But they made the point of saying the investor lender must have on file all the requirements for a standard 30 year fixed mortgage. Yes, that means you need an up to date credit report, a complete mortgage application with documentation and proof of income, and proof the buyers can pay the loan back. And you need to be careful of interest and points charged as well. You must supply a good faith HUD and all required disclosures.  If you use these tools and consult an attorney, follow all the laws and use proper disclosure you should be ok.

Now if you are an investor selling to an end user you have a different set of requirements and you need to take heed. You are the one who has a “BIG TARGET ON YOUR BACK” if you continue to offer owner financing like in the past. At that time some investors just took their buyers’ deposit, gave them a loan with a high interest rate and waited for them to default on payments. Then they would take the house back and sell it again and again with the same deals. I think you’ll agree with me that those days are over, and good riddance.

The law states that you must be a licensed mortgage broker to offer and discuss terms of a mortgage. It doesn’t say you can’t offer owner financing, it says you must have a mortgage license and they (Buyer) must be able to pay for the loan.

So you need to hook up with a local mortgage broker who will handle all the requirements to meet the law. They will need to do a complete mortgage application, as already mentioned. Debt to income ratios need to be in line with standard FHA guidelines. Loan to value ratios should be the same as FHA.  In my opinion it’s going to be hard for the government to say you misrepresented your loan or cheated someone if you used all the same guidelines as FHA. And the loan should be a fixed 30 year with no points or pre-payment penalties. Very important that you own the property free and clear or pay it off when you offer the loan to the new buyer. None of this ‘wrap-around mortgage’ or ‘subject to’ stuff. If you do business that way, then you default and the end user ends up losing the home you’re going to jail quick, fast and in a hurry. Bottom line is that Congress and the banking industry think of us as parasites taking advantage of people and needing to be watched carefully. They’re more than ready to make an example of someone so use your brain.

As Realtors we have special issues to deal with relating to this law and we need to be careful we know all the facts. A good many realtors are unaware of the law or have not taken the time to look it up. Each state has different views and different interpretations. So first thing is to call your local board and get the most up to date information they have. Spend some time on BING and GOOGLE. As a realtor you cannot negotiate a mortgage without a mortgage license. This causes us a potential problem when we are helping our seller and buyer to negotiate a contract and the seller wants to offer financing. The issue here: is this their primary residence (and how long have they lived there -Check for IRS rules here) or are they an investor. Every state will be a little different here but you must know the Federal Law states that a Licensed Mortgage Broker can discuss terms.

My Real Estate attorney says that if he had a Real Estate license the first thing he would do is double the E and O insurance and triple the malpractice insurance.

We Realtors must make sure we do a good job for our clients and steer clear of any part of the seller financing option if there is one. I also think that each broker office needs a disclaimer form that states the law and how they need to proceed with owner financing. I would interview at least 3 mortgage brokers/lenders and find out if they will be offering loan services for owner financing. I would also look up private lenders and get their information so you can offer them to your sellers and buyers.

To summarize: New financing laws and regulations are being put in place frequently and rapidly. We must keep up with them, pay attention to those that affect our clients and our business and make sure we are doing the right thing and also protecting our selves and offices.

Over time the heavy hand of the government will loosen its grip and we will get a clearer understanding of what we can and cannot do. But in the mean time you need to be very careful how you operate your business.

 

 

 

                    

 

Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

 

Paul is available for select speaking engagements and can be reached at

941-716-2597

                                 paul@pauljdacosta.com

Real Estate investor

 

Ok, now that I have your attention we can move forward.

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Tags: advantage, application, attorney, bank, banking, bottom line, broker, business, buyer, charge, Congress, consumers, contract, credit, Debt, dedt to income, default, deposit, disclosure, documentation, Federal, feds, fha, government, government approval, home, HOUSE, hud, hud safe act, income, industry, insurance, interest, investor, investors, IRS, lawyers, lender, Licensed, loan safe act, loan to value, loans, malpractice, money, mortgage, mortgage safe act, mortgages, owner, paper source, Property, property sellers, real estate investor, Realtor, realtors, rent, safe act, seller, seller carryback note, seller financing, single family, Tax, time, value

 

 

Real Estate is my full time occupation. I run my business like the big corporations do:  I have a full time Accountant and a Lawyer whom I consult with on a regular basis. I have a Productivity Coach though my Keller Williams office who helps me keep on track and make sure my goals are realistic and attainable.  I depend on experts in these fields to help me become an expert in my own field.

Working with Realtors and Investors from all over the world I find that we naturally move to only associate with members of our own profession and talk about issues that only relate to our industry.  While this may be comfortable, it won’t allow you to grow either yourself or your business to its maximum potential. This is the limitation of an in-house mastermind group. 

If a realtor even knows what a mastermind group is, most likely they belong to one sponsored by their office. My office has a group that is run by our productivity coach. She does a great job, but all the participants are realtors. There may only be 4 or 5 who attend and they are not committed to the group because it’s FREE and there are no other obligations.

This is why, for the serious career person, I highly recommend joining an outside group that has a mix of businesses. Generally you must commit for a year and the cost can run from a few hundred dollars to several thousand. This depends on the group, what its goals are and how many days the sessions run.

I belong to 3 mastermind groups. The group I run requires members to commit for 6 months at $ 300.00/month .Sessions are held once a month for 10 hours. Currently the participants range from a local doctor to a pest control service owner who catches raccoons for a living. It is limited to 6 people so each person has plenty of time to tell us about their business progress from the last time we met:  what’s working, what’s not, and did they do what they said they were going to do at the last meeting. Oh, by the way, this is a tough love group: members have to follow through with what they say they’ll do or be prepared to catch hell.

One of the other groups I belong to meets for 3 full days from 8 AM to 10 PM three times a year. We commit for 1year and pay the moderator SIX THOUSAND DOLLARS. I might add that the moderator is one of the country’s most sought after business coaches. We have 16 people in this group. Occupations vary from doctors and dentists to realtors to an auto repair shop owner to internet marketers. Some of these businesses are making millions a year (and 2 do over 50 million each!) so we are diverse. And, though all have different issues that need to be handled, all have the same goals: 1) have more free time 2) make more money 3) retire.

The big advantage of this group is all the experience of the other participants on all issues that may affect my business. As an example, one member has over 100 employees so he always has challenges and can give good feedback on how to hire and deal with employees. Another member deals with consultants and directly with the public and has the same issues as Realtors do:  people not making appointments, people not understanding the market place, competitors undercutting the price or flat out not being honest. See, Realtors are not the only ones facing these problems. Members get to learn from these people and how they are doing it in their business. Many times group members can move these ideas to their own businesses with only a few tweaks.

 I know that you’re thinking Real Estate is different from healthcare, or manufacturing, but I’m here to tell you it’s not. We all face the same problems: how do I get someone to pay for a house I have listed or how do I get the seller to take my buyers offer. In the end we are still selling something regardless of what it is. And I hear all the time “we can’t get financing for our houses”. Well guess what, we’re not alone. The owner of the 60 million dollar /year business lost his line of credit for no reason other than the banker telling him it’s the economy and there’s nothing they can do for him. And this with a twenty year track record of excellent payments. Sounds like our business.

When he told us how he was able to find some financing, we all worked to give him other ideas. We all help each other on marketing and our marketing pieces. We make commitments to each other and we hold each other accountable: if you don’t meet those commitments there are consequences. And there are other perks that can’t be assigned a monetary value.  You build great friendships. Your career network expands. In my case some of these people have recommend me to their circle of influence. I have had the privilege to speak to their groups and in some cases actually find investors. But the knowledge and help implementing systems and programs to help make my business better and more profitable is PRICELESS.  

If you would like more info on mastermind groups, getting into one or starting your own call me at 941-716-2597.

 

Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

Paul is available for select speaking engagements and can be reached at 941-716-2597

        Real Estate Education       paul@pauljdacosta.com

 

 

 

 

 

 

Tags: bank, bankers, business, business people, coach, consulant, GROUP, lending, manufactoring, marketing, master mind, master mind groups, mastermind, mastermind group, money, people, private money, productivity coach, real, Realtor, realtors, retire

 …BECAUSE THEY EQUATE ‘BUSY’ WITH ‘WORKING’!!! How many times have you heard someone say, “I’m just so busy I hardly ever get things done at all, much less on time”?   Most people think being busy is the same as working and it’s NOT.  It’s not even close! Studies show that we spend only 20% of our time on things that produce results (i.e. working), while 80% of our time is spent on things that produce little or no results.   Other studies show every time you get dragged into “Got-A-Minute Meetings” it takes between 15 to 30 minutes to get back to what you were working on. If this happens 6 times a day to you that’s 3 hours a day wasted. You’ve got to find ways to get that time back, and make it productive.   If this is your goal, I highly recommend you read the following books first as they will give you a good foundation. 1) Dan Kennedy NO BS Time Management For Entrepreneurs 2) Dan Kennedy NO BS Ruthless Management of People & Profits   I have to warn you though; these books get to the bottom line, and are definitely not warm and fuzzy.   I got these books because I realized I was spending more and more time on emails, phone calls and other people than I was on things important to me. I was getting over 175 calls per day and 600 or more E-Mails and I was quickly losing sight of the significant things like my family and business.   After reading these two books I worked out a series of steps to fix the situation.   First I kept track of every call that came in. I wrote the name, call time and I set up system to measure the call: 1- Business; 2- Personal; 3- BS. (If you have a person who takes forever to explain something, even if it’s a business call, you must place it in the BS category).   I figured out how much time of the call was spent in each area. If you do this for three months you will be amazed how much of your time gets wasted.   Here are my findings on my TOP FIVE offenders. ( I won’t use their names; I want to protect the guilty). Remember, you must be ruthless. It’s your time, your money and your life.   Time Bandits sorted by offence, May 2010 Subject #1: 62 calls average call 28 minutes. (1) 4 minutes (2) 2 minutes (3) 22 Minutes Subject #2: 48 calls average call 31 minutes. (1) 1 minute (3) 30 minute Subject #3: 38 calls average call 25 minutes. (2) 25 minutes Subject #4: 20 Calls average call 21 minutes (1) 8 minutes (2) 8 minutes (3) 5 minutes Subject#5: 17 Calls average call 16 minutes (1) 1 minute (3) 15 minutes   I found the best people on the phone are the people that charge you for their time (Attorneys, CPA’s etc). Hard to admit this but the lawyers were the best at it. They got to the point fast and were off the phone. So big kudos for the lawyers.   My family times were not counted and never will be. My babies know they can call and talk any time and for as long as they want. All others, forget it.   You now get the idea of how much of your time people waste. And how much of it is costing you money and lost productivity . Next I started to make changes. It took some people time to get on board but they are now following the ‘Da Costa time management program’.   First I changed my voice mail message asking them to leave their question and reason for the call so I can have an answer when I call them back. If they only leave a “call when you can” message I DO NOT RETURN THE CALL. Do this a few times and they get the hint. Also if they are in the top 15 time bandits I usually let the call go to voice mail first and I deal with it on my time.   When I do answer or return a call, I make it a point to say how much time I can take. Once I hit that time limit I end the call politely and go on to the next call or back to work on the next project.   I also set up certain times throughout the day to return calls. First I had 4 times at 30 minutes each, now I am down to 2 call times at 20 minutes each.   With E-Mail I’ve stopped filling out forms for free stuff, or forms that someone sends me, if I haven’t asked for them. If someone sends me an E-Mail that has something to do with my business or my personal life I always thank them but I make it quick. I also only answer e-mails that truly need to be answered. You can see this will take courage on your part to be ruthless with your time but the payoffs are well worth it.   Here are my results: Since I have controlled my calls (both dialed and received) I have been able to reduce my cell minutes from 5000 per month to 2500 saving $175.00 per month or $ 2100.00 a year. That alone has been worth the effort.   My productivity has doubled. I am getting more done in half the time. I also find time for myself now and time for the family. I love to read, and am now getting to read a book a week. If you’re having a hard time getting things done you need to read both the books I suggested and follow the plan. You will see the rewards quickly.   Final thought on this subject: I was in Ohio for the Dan Kennedy Wealth Days. He focused a lot on time and people management, and the bottom line is this: You have to work with difficult people some of the time. But you can limit your exposure to them since they are a drag on your business and your time. And if you have toxic people in your business and personal life you MUST AT ALL COSTS GET RID OF THEM. These people will ruin your business and suck the energy right out of you. And they will think they are doing you a favor spreading their negativity to you.   One of the members of my Real Estate group started keeping track of her time and how she was using it. She was shocked to find she was spending 2 hours a day just on Face Book and Twitter. (How much time do you spend on just these two time bandits?) She also found she was spending more than 3 hours answering E-Mails and voice mails throughout the day. So between the Face Book and other time bandits she wastes 5 hours of the work day on low productivity activities. You can bet she’ll be making some changes! How about you?   Tags: 30 minutes, A-Minute, amp, area, Bandits, BECAUSE, bottom line, business, business call, BUSYâ, call time, category, charge, courage, CPA, Dan Kennedy, deal, e mail, EQUATE, GOOD, good foundation, Happen, idea, IRS, life, losing sight, Management, May, Meetingsâ, minute, minute meetings, money, person, phone calls, productivity, profits, question, real, Real Estate, real estate group, Ruthless, show, significant things, situation, style, Subject, system, thatâ, three months, time, time management, track, Turn, two books, WORKINGâ

This is the Million Dollar Question. Recently at my Mastermind meeting this was the hot topic and some people got pretty riled up defending their view on the subject.

Some members felt that all that was needed was to check comps and rental rates or number of sales in the area and you were good to go. Others felt you needed to do complete demographic and area evaluations on every property. I think you need to be somewhere in between depending on where you’re investing.

So let’s look at these areas.

Your local market: You live in the area, work and play there, so you should have a good grasp of what’s going on. How many foreclosures and job losses? Are there government issues? What areas are hot and which ones you should stay clear of? If you don’t know then you need to get busy studying and find out.

Long distance investing: I know lots of investors who live in one area and only invest in other places. I understand that as I am not interested in investing in my home town till the tax, insurance and job situations gets handled, and the local government becomes pro business instead of anti everything.  So investing in other areas is my preferred option. Here is how I go about it.

One of the first things I do is use my 3 Tier Property Evaluation system for a quick assessment. If it doesn’t pass this test I don’t waste any more time on it. If it passes I move to the next level. I get all the available information on the area from the City Chamber, volunteer groups, non profits and the internet. I check the net for stories about crime, taxes and city politics looking for signs the community may be changing for the good or bad. I also search for information from the State on that area and the surrounding area. Most larger areas have some type of business journal and the information there is invaluable. Example: the Atlanta area has The Atlanta Business Chronicle which is an important resource that all investors in the state of Georgia should be reading. It keeps you up to date on which companies are moving in, which are leaving, how many jobs are being created or lost, and the amount of money being spent in the area. I also get back issues of the major newspapers, including local papers. Two areas I always look through are the business section and the help wanted ads for real jobs. Real jobs are professional positions, not just commission type jobs or work from home selling this MLM or stuffing envelopes. The federal Government has lots of very good information about most metropolitan areas in the country so use that resource as well.

Next I contact the president or director of the Chamber of Commerce to arrange a meeting. In some areas that is quite impossible: for example, in Atlanta area the Chamber won’t even talk to you. But one of their sales reps or community specialists almost always will. Be straightforward and tell them you’re thinking of investing in the area and trying to get a good feel for the community. Another person who always has good insight is the local banker. Make it a point to meet with one. A great place to stop for information is the local board of Realtors. They have facts and figures on the market that I want to look at and usually they will help.

After all that if I decide I want to move forward I set up interviews with 5 realtors. I always disclose that I am an investor and a licensed Realtor as well and will be purchasing property to rehab and sell or for long term hold. I give them the area I am interested in and ask them for all the information I will need to make an educated decision. I never tell them what I want, I let them bring what they think is important. I always meet in a public place like Starbucks; can’t go wrong with a cup of joe.

All this might sound like a lot, but I can do all of the above in 2 days and 6 or 7 hours on the net. Small price to pay when you’re investing 100’s of thousands of dollars.

Of the members of my mastermind group only one thought my due diligence was correct; all the others thought it was too in-depth and wasted too much time. But, consider this: the person who agreed with me owns commercial property and SFR all over the U.S.

In the final analysis, you’re responsible for doing your own due diligence. How in depth you go depends on the area and how much you know about it. You need to do enough to know that your investment is protected. Only you can decide how much that is.

 Paul J Da Costa

Is a licensed Realtor in Georgia. He is a Real Estate investor, educator, and national speaker.

Paul is available for select speaking engagements and can be reached at

                            941-716-259                              

  www.pauljdacosta.com  

paul@pauljdacosta.com

 

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