I have been saying this for a while - there is lots of money flowing outside the States currently experiencing the frenzy of the real estate bubble circa 2005 - instead of wringling our hands in despair on when this bubble will brust - why not figure out how to deal some houses to these guys? :-)
The California Real Estate Bubble Roars
April 2005 Archives
Check if you live here or may be you shoud be buying something here.
The Hot Zipcodes in Real Estate
Weak dollar and low mortgage interest rates make homes, businesses more attractive.
There's a new group of buyers in the U.S. real estate market: foreigners.
A weak dollar and relatively low mortgage rates have turned houses and other real property into the investment of choice for a growing number of people from other countries. Some see real estate as a better way to earn money than stocks or other securities, while others are interested in using the properties themselves.
Ana McColgan, of Donegal, Ireland, is in the market for a three-bedroom home in the metro Orlando area.
"We keep coming over there anyway, so I'd rather have it than pay for hotel rooms," said McColgan, who's married with two children. "Maybe we could rent it out to offset the cost of having it."
Lowerys USA, which specializes in helping British buyers find properties in central Florida, saw sales increase threefold last year to $15 million.
"There has been a tremendous sales binge going on here for about 15 months now," co-owner Roy Young said.
Historically, coastal areas have gotten the most attention from foreign investors; the East Coast was attractive to Europeans, while the West Coast appealed to investors from Asia. But the recent boom in foreign investment has included areas such as Atlanta, Chicago and Las Vegas, said Mark Levine, director of the Burns School of Real Estate and Construction Management at the University of Denver.
"We have seen this grow from coastal areas to major cities across the U.S," Levine said.
A favorable exchange rate has been a big factor in the increase. The dollar has fallen significantly over the past three years against the 12-nation euro and the British pound. This week, a euro has been worth about $1.30, and a pound about $1.90.
"There is a sense that the falling dollar does make U.S. real estate more attractive because, relatively speaking, homes are more affordable than they are in other countries," said Walter Molony, a spokesman for the National Association of Realtors.
The weak dollar played a role in Howard Gould's decision to purchase a four-bedroom, three-bathroom home in Kissimmee, near Walt Disney World, for $260,000 last September as a rental-home investment. The Briton wasn't deterred by three hurricanes that had passed recently through the region.
"We bought at what we thought to be a good exchange rate," said Gould, a director of a turnaround and management company in Leeds, England. "We chose Florida because we like it there. We thought property, at least in that particular area, would appreciate at a fast rate."
Mortgage rates are also a draw. While 30-year fixed rate mortgages hit an eight-month high of 6.04 percent at the end of March, they have retreated since then and are still quite low by historical standards.
And the Internet makes it easier for foreign investors to look for properties in the United States and then market them to potential renters. Gould, for instance, offers images of each room of his Florida home on a Web site, along with a calendar of which days the property is available.
In 2002, the last year figures were compiled, the leading countries of origin for foreign investors of U.S. property were Japan, Canada, Britain, Germany and the Netherlands.
After four record years, U.S. home sales are expected to cool off in 2005 as the mortgage rate creeps up.
What is this got to do with you? Everything if you are selling houses to homeowners! See how good or bad your metro area stacks up. I was impressed with Metro Detroit (my home) score! Not Bad at all.
Ever wondered why nothing gets “finished”? Dozens of things to do started and never finished? I get asked about this all the time - how come I can run two separate businesses, both very profitable, about to start a third one, work four days a week, take time off (4 5 day vacations plannned this year with the kiddies) and keep my sanity?
During my Apprentice dinnder last week, this question was asked of me by two of Apprentice group members - how do you do all this so fast and get everything done on time? I can tell you in all frankness it was not like this 15 months ago - actually it was major chaos in my life and business.
I was working long hours and dstill not getting the results that I wanted. After reading a good 7 books on Time Management and wasting good money on all kind of audio and video courses that are not really meant for somebody who is running his own businesses but more aimed toward corporate America types, i finally stumbled upon the anwere. A small $10 book that gives you plan to get your time in control - almost instantly.
I have given away at least 30 copies to my friends and coaching group members - with the advice of reading it, implementing it, and then going back to it again after six months and implementing some more. This is exactly what i have done since June last year with termendous results.
The book is Dan Kennedy’s No B.S. Time Management. Fair word of warning here if you are not ready to make some radical changes in your life style and you are not really serious about this time thing - dont waste your money. This is all strategy and action - not theory. I think it is a must for real estate investors - new or seasoned. Must read if you are wondering why your real estate plans are moving in slow motion.
Things have just been great at our real estate investment business. I think it was Jason who told me to delegate 5% of everything I do every month, end of 12 months i have delegated 60% of what i do. Great advice and it actually works. Nora thinks that I am a control freak when it comes to buying and selling foreclosures and I tend to think that I am detail oriented. I think we are both right about me - :-)
Good programs by Argent Mortgage. If you have somebody who wants to buy one of your foreclosures and you are having problem because of their bruised credit, tell your loan officer / mortgage guy to send them to Argent Mortgage.
Reason #4: You hang around losers too much - you become a loser! (Donald Trump, Apprentice Episode Last night talking to Alex who just lost the contest because of his two partners who have lost 6 times in a row).
Just came back from the my own Foreclosure Invesetor Apprentice 2005 dinner. Jeff and Lynn, my fearless Apprentice members from sunny California were missed!
Two and a half hours of intense mastermind session and one thing kept going on through my minds - i am privileged to be sitting with a group of future heavy hitters in real estate. I am sitting with winners because looking back on the last 5 years one thing is so evident to me know : you hang around losers - you become a loser.
I never got it right in the beginning. I mean who better to share your ambition then the people you know around you? Bad move buddy! The alternative truth is that your associations, the people who you hang around with all day will pretty much determine your future in all the terms possible and not just in money terms.
I was hanging around some pretty nice people. But the problem was they were all very laid back. Our conversations pretty much focused on complaining and moaning about our bosses, weekly struggles to pay our bills and overall discussing the bad news in the newspapers - layoffs, crime, the dour economy.
Yup! we were one happy bunch. Looking back I am astonished that i made out of that swamp of misery with my head intact. I am telling you very frankly - be very careful who you spend your time with. Now if you are not serious about really bringing in some serious money in real estate and you are happy in what you are making - then by all means continue what you are doing - apparently it is working out for you.
But for those of us out there who wont to make it in this world - the ones who surround us will determine our bank account. Think about it if all you hear all day is that real estate investment does not work, it is hard to find deals, it is impossible for somebody to just lend you money, there s no way you can deal this foreclosure in 30 days and so on, pretty soon you start doubting yourself. One month into this these doubts pretty much become your whole belief system.
Think I am kidding? Go grab a piece of paper and write down how many times when you expressed your desire to make it in buying and selling foreclosures in front of other people - somebody actually came up to you and admired you and gave you a pat on the back???
If you you really want to be success in this real estate investment business - find yourself couple of investors who are successful, call them up and take them to a cup of coffee at your neighborhood Starbucks!
Take them out - ask them what makes them tick? what is their typical day i like? what do they do on weekends? how many hours they work? what is their life ambitions? at what age do they see themselves retiring? do they see any big trends happening in real estate?
A Venti White Caramel Macchiato in Starbuck costs around $5. The return on your $5 is infinite. I spend two hours in Chicago in the company of a remarkable man who went from zero to $1.65 million take home in 8 years. Let me tell you that those minutes were priceless.
We are in it together - all of us and we are not like everyone else. Understand this because if we were like every one else, we would compromise with what we have and would not try to better our bank accounts and our lives.
You hang around with losers - you become a loser. Harsh? Yes! Not true? I don't think so!
Look around you - who do you know is really making it? Do you know anybody? And if you don't why are you not trying to find somebody as quickly as possible?
My Mistake #5: Wasting too much time researching the “best way” to make money in real estate.
Almost 60% of the emails coming to me – and I get a tremendous amount of email every day – usually ask my opinion about the best strategy or the easiest strategy to do real estate investment. Everybody wants to know what is the fastest route of success in real estate investment – preforeclosures, REO’s, rentals, apartment complexes, lease options, subject to deals, getting the deeds, short sales??? What? What? What?
I was in the same exact dilemma five years ago – I researched and printed stuff from the Internet till my Hewlett Packard LaserJet screamed mercy. I printed and read hundreds pages from forums and websites – some of them from guru’s and the other ones from regular real estate investors. Some of the advice was outright great – some of it was downright bad.
All I wanted was a clear cut consensus amongst the real life real estate investors out there who would be kind enough to tell me that here is the “one” best way to start in real estate investment. I wanted one answer – from everybody. And I wasted a long time researching this. It was much later I discover that I was suffering from paralysis of analysis. A bad state of mind where we know what needs to be done but we want to make sure that we know of every single option available out there before we make a move.
Big mistake – not only I wasted valuable time and good deals but I almost talked myself out of real estate investment couple of times due to sheer frustration. Looking back I cannot imagine what I could be doing today if I had not made the move back then – probably traveling 4 days a week, working 60 hours per week, seeing my kids on the weekend.
Here is the truth about the “right way” of doing real estate investment – it depends on you and your circumstances. The amount of money you can access, the kind of credit you have and most importantly the amount of time you can initially invest in your real estate investment business all determine one way or another what you can do.
Important thing is this – instead of researching this industry to death trying to find the best possible way to make money, start making money in one thing and then and only then start learning about what is available out there and slowly expand your business into it.
The reality is that all avenues in real estate, done right, are extremely profitable. The reason being is amount of leverage that could be applied in real estate is phenomenal. And when I say ‘leverage” I don’t mean just money but all kinds of leverage in real estate can make a fortune – using other peoples money, knowledge, resources, time – all fall into the category of “leverage”.
I get emails all the time where somebody challenges me to convince them that preforeclosures are better than REO’s – I don’t have to convince anybody – they are both great for their own reasons or better still they are both just means to an end.
Who cares whether I made $100,000 in the March 2005 in preforeclosures, lease options or selling REO’s??? When I go to my bank they don’t ask me where the money came from? I mean if that is your concern then may be you need to change your bank! J
Opportunity comes in all shape, form and sizes – some deals will make you a tremendous amounts of money, some will make average money and once in a while a deal will break-even for reasons outside your control. Thing to remember is that the people who are making money doing real estate spend more time “doing” it then just “reading” about it.
Start today and try to do one deal – that is all you need to worry about. There is enough time in the world to become the Apartment Goddess of wherever you live or may be you want the Loss Mitigation Officers of all major banks tremble at the mere mention of your name because you have become Mr. Short Sale in North America.
But you still have to do your “FIRST” deal!
So don’t do what I did. Which was to waste precious time doing nothing! 90 days over already in 2005, before we know it I will be wishing you Happy Thanksgiving! Think about what you can do today to have some brand spanking new money in your bank account by May 2005???
