With all of the doom and gloom surrounding the real estate market, I asked some of our Income for Life Wealth Coaches to send me a few recent Income for Life case studies. Boy was I blown away... I profiled many of these investment case studies in November's Income for Life newsletter. In studying these investments, I noted one major similarity. I explained this similarity in the newsletter. I thought I would include one of these case studies for everyone today on the blog. Why you might ask? To prove that it is more profitable to invest in real estate today than it was a year or two ago.
In addition, the tenant/buyer paid them $7,500 upfront before moving into the home. This income is pure cash-flow! As a member, we show you collect large, upfront payments from your tenants before they move into your property. Their total monthly house payment on this property is $1,570 per month and their monthly rental income is $2,100 per month providing James and Margaret with $530 of monthly positive cash-flow! Jim and Margaret acquired this Income for Life investment property in June of 2008. To be fair, this is an exceptional deal and I'm jealous of these members. This property was identified by our Income for Life Wealth Coach, Bob Mangat, and his fast paced team. Deals like this aren't everywhere. It takes an experienced coach to flesh out opportunities like this one. The point of this post is to show you that there are many great investment opportunities available today. We've all heard of Warren Buffett's saying: "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." Now is the time to be greedy with your real estate investing. There is more opportunity today to build wealth in the real estate market than I've ever seen. I show this in detail in November's Income for Life newsletter. I also examine a specific real estate investment and how I was going to turn it into an $8,000 monthly cash-flow machine. This will be a very valuable lesson for our members. If you're not a member, you can apply right now at: http://www.iflapplication.com/. If your membership application is accepted in time, you'll be able to get your hands on November's newsletter and some great investment properties in your area! Rob Minton |
Alabama Gulf Coast Real Estate Market News
Wednesday, October 22, 2008
An Income for Life Case Study
Friday, October 10, 2008
How will you know when it's the bottom?
If you're ready to buy now, visit us online at www.GulfShoresValue.com
Monday, August 25, 2008
Where is the Bottom of the Real Estate Market?
In simple terms, Baldwin County inventory has far exceeded consumer demand since October 2005, when it hit double digits (10.6 months) for the first time since March 2003. Moving forward under current market conditions, at least three consecutive months below 8.5 months of supply could provide a sign that the market is beginning to move back to equilibrium.
One of the most interesting aspects of I/S is the way it indicates the top and bottom of the market cycles. For example, in January 2008 Baldwin County’s I/S was 41.1 months. This is the highest I/S has been since stats have been kept here (20 years). Baldwin County had the bottom of its real estate market in January 2008. However, Baldwin County is still in a strong buyers’ market situation, and you can still get a good deal. Baldwin County is moving towards equilibrium with I/S being at 23.0 months in June 2008.
Do you remember the summers of 2004 and 2005? The I/S was under 5 and properties were flying off the market, we had bidder wars on a regular basis and it didn’t matter how much you listed a property for…it was certain to sell. Notice how the numbers changed after Ivan (Sept 2004) and Katrina (Aug 2005).
Friday, July 18, 2008
Trump Sells Palm Beach Investment Property
Have you heard the news? Trump sold one of his real estate investments in Palm Beach, Florida for around $95 million! Believe it or not, this investment was a single family home. I remember reading about this investment a few years ago. Trump purchased this home out of foreclosure for around $41 million. There was actually a great story behind the purchase, but I'll have to share this with you in another post. Here is a video from msnbc.com about the sale... It's impossible to determine Trump's exact profit. However, I would have to think that he made at least $35 million on one single family home investment. I factored in around $20 million in carrying costs and improvements during his ownership. This would bring his total investment to around $60 million. I thought the Florida market was terrible... Rob Minton |
Have you heard of the S&P/Case-Shiller Index? It's the widely accepted and oft-referenced statisitical tool that keeps telling us what every American knows by now -- that real estate prices have dropped. The index was developed by an economist from Welleley College, Karl Case, and an economist from Yale College, Robert Shiller. Their method of taking recent sale prices of homes and comparing those prices to previous sales prices has become the "go-to" source for media reporting the real estate story. You've probably read at least an article or two that had the phrase "according to the S&P/Case-Shiller Index ..." somewhere in it. What you've probably not read is that one of the Index's creators, Case, believes home prices might be near bottom. In this outstanding piece on Smartmoney.com, Case notes that the decline of new housing starts has been extremely dramatic -- only 975,000 in April of this year compared to 2.27 million in the peak of January, 2006. Meaning inventory is dropping drastically. According to the Smartmoney.com story, Case commented:
So the guy who created the index that every reporter seems to point to as proof the sky is falling is saying that things are looking up. But have you read that anywhere? Probably not. Have you read that the Case-Shiller Index, which in March reported price declines in 18 of the 20 major markets it encompasses, showed price INCREASES in eight of the 20 markets in its recently released April report? Probably not. Have you read that the Index is also showing a slowing down of price declines? Or that the sheer volume of homes that fall into the subprime housing category -- which makes up only 10 percent of the total U.S. housing stock -- is skewing down home prices? Probably not. Why haven't you read those things? Because the media are not reporting those things. I used to believe that the whole liberal media bias thing was a myth. But recently I've been paying closer attention and, especially now that the presidential election year is in full swing, what is reported depends on the source of the reporting. There seems to be political agendas involved. Or news outlets just want to report bad news because those are the headlines that sell papers or get clicks. There is a great quote in the Smartmoney story by S&P/Case Shiller Index Committee Chairman David Blitzer, who seems to explain why you've never heard any of the good news:
So don't wait for the evening news or the daily newspaper or MSN.com to tell you things are getting better. Pay attention to your local market. Study the statistics. Watch the trends. Because if you want good news, unfortunately you'll have to find it yourself. Mike Sivula |
Friday, June 27, 2008
Bloody enough for a billion
"Buy when there's blood in the streets." It's a phrase we've all heard, an old Wall Street adage attributed to Baron de Rothschild, quoted often by other expert investor types and mentioned before on this blog. It refers to buying during market lows, when fear has scared off others and huge discounts are to be had. It's a phrase that fits the current real estate markets in many parts of the United States. And while the recent data suggests that falling prices are finally starting to boost home sales, it's probably safe to say that the "blood" left on the streets - and everywhere elese, it seems - by the real estate bubble's burst and the subprime mortgage meltdown has scared off some would-be buyers. But savvy investors aren't queasy about blood. And the latest news of a huge real estate play by a group of investors comes to us from one of the bloodiest of the bloody states: Florida. The news? According to one Florida newspaper, a London real estate group is raising $1 billion to purchase luxury homes in Florida. The asset management group's plan is to buy bank-owned homes and hold them for as long as 10 years. A billion dollars worth of homes. The name for the project is the Florida Prime Residentail Opportunity Fund. Did you catch that? They put the word "opportunity" in the name. And they are committing a billion dollars to this opportunity. I know $1 billion isn't going to buy as much property in Florida as it would here in Cleveland, but it's still a lot of homes. It's a substantial investment. And it's going to have a substantial payoff. Yes, there are "experts" guessing that home prices in some areas of the biggest run-ups during the real estate boom might see declines for two or more years. So the initial investment of $1 billion could drop in value before recovering. But the plan is not to flip these properties, as other buyers of distressed homes are trying to do. The FPROF strategy is buy and hold for maybe a decade. It's an investment, not speculation. And it's an investment in an asset - ocean-front land in a sunny coastal state - that is scarce. It's an investment into an asset that has always been in demand and always appreciated at a high rate (before the bubble burst) relative to the rest of the country. In the two years prior to the real estate market crashing there, prices in the Miami area increased 50 percent. In two years! Do you think this group cares if the market has hit bottom yet? With a 10-year plan, does it matter? And if it doesn't matter to investors with a billion dollars in the game, why does the "bottom" seem to matter to so many others? People with $1 billion to invest know what they're doing. And this group of Brits are teaching us a lesson: A bargain is a bargain, and the biggest bargains are apparently found where it's bloodiest. Mike Sivula - Income for Life Cleveland |
Friday, June 20, 2008
Time of the Season
I don't know how many of you are going to remember this song by The Zombies, Time Of The Season but it has shuffled its way into my life quite a bit lately. Every time I hear this song it reminds me to be thankful for the current market conditions. Times like these are to be seized. It truly is the time of the season for real estate investors. Are you a real estate investor? Or are you just 'really interested in real estate'? This is the question I ask new investors when they come into my office. Why? Because real real estate investors make things happen. They don't hesitate. They don't kick tires. They assess deals quickly and they take action. Massive action. It is a proven model. |
Tuesday, June 17, 2008
Are you stuck in a rut?
Do you ever find yourself struggling to complete a task you know must get done but hate doing so? Have you every thought you could be accomplishing so much more in your Real Estate Investing business but seem to have hit a ceiling? We'll your not the only one! Like many others I too have continually bumped my head against this ceiling and struggle at certain tasks for no particular reason. Over the years I have searched for every remedy possible usually looking how to improve myself for the solution. Not sure if you've delved into the self improvement section at your local book store but let me tell you its massive! Not only that but the one common theme throughout these books is how to fix or improve upon your weaknesses. Obviously, this makes perfect sense, or does it? Recently I read a book called Strengths Finder 2.0 by Tom Rath and my outlook on self improvement has completely changed. I used to believe I had to turn my weaknesses into my strengths. This I have found by trial and error is complete folly. Have I been able through hard work and dedication to improve upon those weaknesses, Yes! Are they now my strengths and do I enjoy doing them, absolutely not! So what is the difference with this book? Simple, the whole goals is to identify your strengths and improve upon those. The simple fact is we are a whole lot happier and productive when we spend our time doing the things were are good at and those we enjoy! This does not mean you can ignore those things you are not good at but if you can properly identify your strengths you can outsource your weaknesses! So if your head hurts like mine from repeated bumps against an all to low ceiling, you need to jump over to Amazon.com and get Strengths Finder 2.0 by Tom Rath. Bill Ross Income For Life Phoenix www.TheRealEstatePilot.com |
Tuesday, May 06, 2008
It's Not as Bad as You Think
Posted: 06 May 2008 11:57 AM CDT Finally, somebody has come out and said what's needed to be said for some time now. The media is overhyping the supposed crash of the national housing market. Here's an article that says two housing data providers acknowledge the statistics are skewed. There are anomalies that are "overstating the degree to which the vast majority of Americans' home values have declined in the past year." In other words, it's not as bad as we're being led to believe. Yes, the national median home price has dropped. But, as one economist in the article points out, that's like saying the national average temperature is 57 degrees. You don't decide if you need an umbrella by watching a national weather forecast. You look out the window where you live. It's the same thing with real estate, but that kind of fact requires work by local journalists and doesn't provide the sexy, sky-is-falling headlines. Another article says that perhaps only five states are actually in a housing recession. The analysis done for this story points out that the areas of the country that avoided the huge run-up in prices have avoided any huge price downturns. Nearly half, 73, of the 150 U.S. markets used in a leading price index are still showing price gains. But if you told that to the average American, they'd look at you in disbelief. If the national weather forecast metaphor wasn't enough for you, let me throw this analogy out there, investor to investor: I see the housing market right now as being a lot like the dot.com stock fiasco we saw in the late 1990s. In that case, we saw a huge, lightning-fast run-up of inflated prices that, in reality, couldn't really be supported. The dot.com stocks, and the mutual funds buoyed primarily by the dot.coms, came crashing to earth in a fiery wreck. The people who had their money tied up in the dot.coms were badly burned. But you know what? The blue chip stocks -- the tried and true players with real value behind them -- did not go belly up. The Microsofts, the General Electrics, the Sonys of the world stuck around and remained good buys. True, they didn't enjoy the super-fast explosion in stock price of the dot.coms, but they didn't suffer the same crash-and-burn fate, either. Just like most of the local markets that make up the U.S. housing landscape, they are still around and going strong today. They were great investments 10 years ago, five years ago, two years ago, and they are great investments now. And there's good news even for the markets with the worst bad news. The difference between the dot.coms and the exponentially growing housing markets of the past few years is that people need places to live, and there is still population and job growth in many of those markets. So, unlike the dot.com stocks, even the markets that had the biggest booms and busts will recover. You'll never read it in the papers or see it on CNN, because doom and gloom sells, but real estate was, is and continues to be a great investment. Mike Sivula, CPA |
Wednesday, April 16, 2008
Has the real estate market bottomed out yet?
“I’m waiting for home prices to fall more. Interest rates are going down. Please call me when the market hits the bottom.”
"Hello, This is your call."
Can I predict the future? No! But I called the market top in October, 2005 (not the exact top, but pretty darn close). How can I do this? By watching the shift in market indicators and their derivatives, you can peak behind the curtain and stay out of trouble.
Truthfully, no one knows exactly where the bottom is, but we will all know once it has passed. By then, it will be too late. Remember, the masses are always wrong at market tops and bottoms. So, the plan to follow the masses is a guaranteed loser. . .
It is an exciting time and a time of great opportunity. I think we will see a bottom to the market in 2008, a stabilizing of the market in 2009 and a move up in values in 2010. I could be wrong, but that is what I am seeing...but the time to take action is now, with rates slowly climbing."
Interest Rates are rising but still historically low
Everyone is focused on the news – The Fed lowered the Fed Funds Rate. The misinformed masses believe that 30 yr fixed mortgages are falling because of this. They are dead wrong.
The following chart is from http://www.bankrate.com/
For weeks, I’ve been warning my clients that interest rates are a huge factor in the affordability of a home and they are at historical lows. We’ve seen a nearly ¾ percent increase in interest rates in just six weeks. That sounds innocent enough.
But this ¾ percent rise in interest rates translates to nearly a 15% increase in your mortgage payment. Your $1400/mo mortgage payment just became $1610/mo.
While everyone is focused on trying to find the exact bottom of home prices, they’ve lost
sight that a whole years worth of declines can be wiped out in a few weeks – by a seemingly small shift in interest rates. It took all of 2006 for home prices to drop 12% in Baldwin County, but in just six weeks that advantage to buyers was entirely erased by the interest rate increase.
Many buyers who are looking at prices could be priced out of the market by a rise in interest rates. Remember it is home price plus interest rate that determines your house payment and affordability.
Now let’s take a look at the big picture
Interest rates were over 14% in 1981. Look how many years rates stayed above 6%. We have seen a gradual rise in interest rates since 2003. The risk of rising interest rates looms large when you look at this historical graph. And because interest rates are so low now – a small shift could have a big impact (as a percentage increase in your house payment).
We sincerely hope you don’t miss this unique window-of-time to obtain your affordable home. Keep in mind that Tami Roberts and her team at MyFavoriteAgent.com know where the nicest bank-owned homes are and how to buy them for the lowest possible price. Visit us online at http://www.myfavoriteagent.com/ or http://www.gulfshoresvalue.com/
By Tami Roberts, Broker & Author
Disclaimer: While no one knows the exact bottom of the market in real-time. We are presenting the facts as we see them. We will all clearly see the bottom, a few years after the fact. But how does that help you? The opinion is ours and we want to share our thoughts with you. This is not a guarantee that the market will behave as we believe it will.
Hello Tami and All, Tom From Canada Here...
Posted: 16 Apr 2008 04:47 PM CDT
Every time I travel down from Toronto to the U.S. I pick up a new reason why the U.S. economy rocks. This time I was in Nashville, Tennessee, for a Dan Kennedy marketing whiz bang super conference and the mall next door had the best shopping I've ever seen. Now there's 2 things you should know about me: 1. I hate shopping. 2. I hate malls. Big time. But here's what had me in awe and made me actually want to go back several times during our stay. There were tons of people in there shopping. There were tons of people get massages. There was a line-up at the Tony Roma's rib joint. There were people walking around with bags of freshly purchased stuff in their hands. There were boats rolling out of the Bass Pro Shop. There was money flying every where it seemed. There was a guy lying down in the middle of the mall who had paid to have his teeth whitened and some laser beam thingy was stuck in his mouth. And there was even a lady PAYING good money to breath in oxygen from a tank. Just think, last time I checked you could get a whiff of the stuff for free but someone was paying to have little hoses stuck up her nose. Nuts, but I almost paid to do it myself (just for the photo opp I swear!). So why I am sharing this with you? Because to a big city Canadian (the Toronto area has about 5 million people so don't get me started about how we're small time up here ok) this little town of Nashville seemed to be ignoring CNN. People were spending money like it was going out of style. From watching your news up in Canada we all believe you guys are hiding at home stashing cash under your mattresses. And then my wife runs into a Realtor who explains she can't keep up with business. She's dealing with a lot of foreclosures but she's busy with people snapping them up. Her bank can't keep up with her apparently. The next day I fly back home and turn on CNN. And I hear all the negative stuff the Lou Dubbs or Dobbs or whoever is spitting out and it seems like the sky is falling. But what I just witnessed doesn't match what I'm hearing coming from good old Lou's mouth. And then I got thinking....maybe my perspective, being from out of the country, is making this more clear to me. Why is the U.S. media opposed with broadcasting fear/doubt/uncertainty to you guys? And they're airwaves reach us so everyone up hear basically thinks things are falling apart in your neck of the woods. But then I flash back to my Nashville experience and it doesn't add up. Us Canucks are looking at the U.S. real estate like it's a blue light sale at K-mart (now I'm really dating myself). Now... I've been around long enough to know that spending a few hours in a mall doesn't give me a degree in macro economics. My father lost a lot of money on a flip during the heavy real estate crash and recession in the early 90's....so I've seen a few horror stories up close. But from my perspective there are obviously pockets in the U.S. where things have turned. And I'm sure their are communities that are still suffering. But to paint everything with the broad strokes that CNN seems to be using can be misleading. Real Estate is a game that is different community-by-community and street-by-street. You need to find the people in your neighborhood that are the local experts. This is the time people like Trump make big money! My money says he's out there buying right now, not selling. So the next the talking CNN heads get you dizzy about what is or isn't happening maybe it's time to start ignoring them and doing your own research. Time to look out for #1 by being your own news source. Hit the streets, find the investors in your area making money right now. Here's something I bet CNN doesn't report... Ready for it. It's good. Real good. I always hear how the Canadian economy is solid and moving along really well. Which it is. The new found hunger for oil in Alberta and corn in Saskatchewan is doing wonders for us up here. But you know what. Even while our economy is humming along very well do you know which country has a LOWER unemployment rate than us? Guess. The U.S. Funny eh? Bet CNN isn't reporting that little gem. From my understanding the rates are calculated with slight differences but it's definitely an interesting little note, don't ya think? Amazing how interesting details are often ignored. If you guys wait too long to figure this out all your neighbors will be Canadians who picked up some great deals on prime real estate. And trust me, you don't want to be surrounded by us all day...you'll have to listen as we explain how we invented the telephone, baseball, basketball and hockey...and how our Canadian Loonie (dollar) is on par with your buck. Not fun I'm sure. Is it perfect smooth sailing ahead, no, never has been, never will be. Does the U.S. have to adjust to a rapidly changing global economy, yes. Is this the time to pick up some good U.S. real estate investments? My magic 8 ball says "affirmative". Will the masses follow this advice? No. More reason for you to do your homework and plow ahead. Until next time... |
Friday, April 11, 2008
Rob Minton Interviews Income for Life Member Julie O'Neil
Rob Minton Interviews Income for Life Member Julie O'Neil Posted: 11 Apr 2008 09:25 AM CDT Late last week, we shot an impromptu video interview with Julie O'Neil. Julie is an Income for Life Member in Cleveland, Ohio. The video was taken at one of Julie's Income for Life investment properties. We also took a video tour of the home. I plan to have that video for you next week. The interview was filmed by Mark Koesnter, who works with the Cleveland Income for Life Center. The video tour of the home was filmed by me! I include this information, because we are not professional videographers! I know what you're going to say after watching the videos - "Don't quit your day job!" While videoing the home, I almost fell down the steps. I think you'll be able to hear it in my voice. Watch for it next week! Here is the first part of the video for you to watch now: If you are not a member and would like to apply for membership, click here. Stay tuned for the video tour of the home next week! Rob Minton |
Friday, March 28, 2008
Has the real estate market bottomed out yet?
out? It’s one ratio:
Inventory : Sales
Inventory is the number of houses offered for sale at any given
time. real estate brokers will have an accurate count of the total
inventory of houses on the market at any time. They can also
give comparisons of this month’s inventory to last month, and a
year ago. That gives you the general trend for the inventory
supply.
Sales figures are the actual number of houses sold. Again, real
estate brokers compile this information, and make it available.
They will also be able to provide comparable figures to a month
ago, or a year ago.
The significance of the Inventory:Sales ratio is:
- Inventories will grow when buyers diminish. That is, when
news gets out prices are at their peak, many house owners
will rush into the marketplace, to sell at the highest prices
possible. Therefore, the top of the cycle is marked by a
sudden influx of inventory. - Within 6-months to a year, fewer sales and increasing
inventories will drive prices down. It will now become a buyer’s
market, as people desperate to sell attempt to get out. At this
stage, the inventory will peak. - With a falling market, many house owners will withdraw their
houses. Inventories will begin to shrink. prices will now
stabilize gradually, and there will be buyers entering the
market to take advantage of the opportunities. - At the bottom of the market, prices start moving up again and
sales increase as buyers snap up houses before their prices
go up again.
the market is falling.
Excert from
BUY, RENT & HOLD
How to Make Money in a
‘‘Cold’’ Real Estate Market
BY ROBERT IRWIN
Tami Roberts
P.S. If you would like a copy of the complete book summary, subscribe to my Daily Foreclosure Report for Baldwin County at http://www.gulfshoresvalue.com/
Wednesday, March 19, 2008
Yesterday's interest rate cut is good news for real estate investors
Yesterday's interest rate cut is good news for real estate investors Posted: 19 Mar 2008 07:13 AM CDT From a real estate investors perspective, the news here in the States continues to get better and better. Yesterday, the Fed declared another interest rate cut, dropping the short-term interest rate three quarters of a percent. This rate drop spurred one of the largest single day gains in the stock market. Here is a quote from Chicago Tribune.com about the rate cut: Bank of America economist Mickey Levy predicted that the Fed will reduce its key interest rate to as low as 1.5 percent before stopping. Lower Fed rates will have a positive impact on adjustable-rate loans, such as home-equity lines of credit, and will add money to the pockets of some consumers. But people with bank certificates of deposit are likely to see lower returns on their savings after they mature. I underlined the important sentence in the quote above. Yesterday's rate cut may mean lower loan payments for investors with adjustable rate mortgages. In other words, as interest rates decrease, the cash flow from our real estate investments increases. Here is another quote on the impact of the interest rate cut from CNN Money.com: The Fed began a series of cuts to its key interest rate last September, taking the rate to 2.25%, from 5.25%. ARM borrowers may get help. There is more of a connection between Fed rate cuts and short-term and adjustable rate mortgages (ARMs). In fact, homeowners with ARM loans could see lower rates from further interest rate cuts. Adjustable rate mortgages are pegged to a number of different indexes, including the one-year Treasury yield and the international Libor, or London Interbank Offered Rate, which tend to move with the Fed funds rate. With Tuesday's rate cut, the cumulative effect of the Fed cuts could entirely offset what would have been a significant rate reset for many homeowners. For instance, a borrower with an adjustable rate of 4.5% could have faced a rate reset up to 7.5% before the Fed started cutting rates in September. Before the rate cuts, that homeowner would have seen an increase of $370 in monthly payments on a $200,000 loan. But after Tuesday that rate could reset only a little higher. And for some, the rate might not go up at all - and may actually drop - according to Greg McBride of Bankrate.com. "The Fed rate cuts far are more significant to [borrowers with ARMs] in terms of staving off delinquencies on loans," he said. Many home sellers have their homes listed for sale because they are concerned about looming large interest rate increases on their adjustable rate mortgages. With this interest rate cut, these sellers may not need to sell their homes. This could eventually reduce the inventory of homes listed for sale. This is good news for the real estate market. Investors thinking of buying property may need to consider taking action now. Rob Minton |
Billionaire Bachelors
The tough part about listening to Brian's story was that he feels whipped and needs a rest. He's tired and just wants everyone to leave him alone. But, you know and I know, his dreams won't disappear or go away even if he puts them on hold or the back burner.
Brian may not even realize that his story is typical of the Billionaire Bachelors featured in the recent Forbes.com story. It's a common theme among billionaires to build up a fortune and then lose it, some more than once. Brian may not even realize yet that he will build his empire again. He'll do it with more experience, savvy and he'll do it in half the time it took the first time around.
After watching the little video clip from Forbes.com on Bachelor Billionaires, the fact that there are only 1125 billionaires worldwide surprised me. I don't know what number I would have guessed, but this number seems so low -- but it's also a number that makes becoming a billionaire seem more attainable. According to Forbes, 110 billionaires are bachelor. Does anyone know how many billionaires are women?
Check out the video for yourself:
http://www.forbes.com/video/?video=fvn/billionaires/mm_billies031208
p.s. Brian, if you read this....please feel free to write your comments.
Wednesday, March 12, 2008
Investing lessons from Mr. Brooks
Investing lessons from Mr. Brooks Posted: 12 Mar 2008 12:58 PM CDT A few months ago, I watched the movie "Mr. Brooks." Kevin Costner stars in the movie as Mr. Brooks. He is a successful business man that has a split personality. One personality is the perfect husband, father and business man. The other is a serial killer. Here is the official trailer from the movie: The movie was OK. It wasn't my favorite, but I enjoyed it. In one of the scenes, Mr. Brooks tells someone that he owns a cemetery. When asked why he owns a cemetery, Mr. Brooks responds by saying something like: "I only invest in things people can't do without." When I heard this, I paused the movie and made a note. For Mr. Brooks, this meant cemeteries and water. Obviously this was a movie, but Mr. Brook's theory on investing has stuck with me. I think it makes a lot of sense to follow this philosophy with our investments. Why you might ask? Simply because investments into things people can't do without tend to be stable investments with long-term growth. What are some things people can't live without? Here are some of my thoughts... 1) Oil (At least for now...) 2) Food and water 3) A place to live 4) Utilities 5) Medicine and medical treatment I'm sure you probably can think of a few more items, but you probably would agree with at least these five, right? Well, if Mr. Brook's investment theory is valid, which investment of the five can you invest in yourself? Well, probably all of them. And maybe you should invest into all of them. Which of the five investments can you completely control ? Only number 3 - a place to live. When I write control, I mean own enough of the investment to influence the management of the investment. Yes, some billionaire could probably purchase enough stock to gain control of an oil company, or a pharmaceutical company, but you and I can't. In fact, one billionaire, Warren Buffet, prefers to invest into companies which he can control. Control allows you to increase the income of the investment and decrease the expenses. Control builds wealth. For the average investor looking for control, the only true investment choice meeting Mr. Brook's theory is real estate. In the monthly Income for Life newsletter, I include several strategies you can use to increase the income from your properties. I just recorded the IFL Audio Series CD for April and the topic was "How to Maximize Profits through Effective Property Management." If you owned shares of stock in an oil company, would you be able to increase the company's income? Probably not. If you owned a single family home, would you be able to incease the rental income. Probably so. Could you decrease the expenses through effective property management? By golly, you could. Real estate might be down now in the States, but guess what? People will always need a place to live. The population continues to grow. This means that real estate is a great long-term investment. I would suggest that you ponder Mr. Brook's investment theory. It does seem to make a lot of cents! Rob Minton |
Monday, March 10, 2008
The Easiest Money I Make Every Month!!!!
The Easiest Money I Make Every Month!!!!! Posted: 10 Mar 2008 11:37 AM CDT Alot is being said about the current real estate market, especially through the media. It seems that you can't turn on a TV, listen to the radio, or glance through a newspaper without seeing some sort of terrifying statistic about the real estate market. Now while many have their opinions, especially those who sell them for a living. I still think many people are looking past some of the true benefits about real estate investing, and long term ownership in real estate. I stubbled across a quote that was in one of the recent Income for Life monthly member newsletters and it reads as follows: " In almost any community, anywhere in the world, the richest people are almost invariably the landlords the people who own property and rent it out to others. Landlording is probably the world's second oldest profession and certainly the most lucrative. Properly managed, a good piece of income property is the closest thing you will ever find to a real live, self propelled, self generating money machine." Mike and Irene Milkin From their book titled: "How to Buy & Manage Rental Properties" This is a pretty powerful quote and I have it sitting on my desk to remind me of WHY I am a Wealth Coach and WHY real estate is my chosen path to riches. Last week I had to go and pick up a rent check from one of my tenants, they were late and I wanted to make sure that I could the check, deposit it, and send it in to the bank. One of my newer office assistants was with me, as we where out running errands together. After I ran into my tennants house and picked up the check, my assistant started asking me about the property, the location, etc. She also asked to see the check that I had just picked up. I could tell that her wheels were turning as I explainded that I had purchased the property for $352,000 about 18 months ago and was getting ready to sell it for $410,000 in six months. As I showed her the $3,050 check that I had just picked up from my tenant, I could see the light bulb go off in her head about the power of leverage that offers. She said, "Preston, you just picked up a check for more than my take home pay. You are paying me $40,000 a year and I don't even net $3,050 on a monthly basis. I have to work forty to fifty hours a week to earn my income, and you just picker up a check in about 45 minutes that is more than I take home each month. That is ridiculous, I am in the wrong business." And that she is... And that moment it also dawned on me that that is the true power of real estate, being able to not only leverage yourself time wise, but also financially. Those add to be a powerfull combination. Preston Letts Income for Life Chicago Region |