Real Estate Warriors

Recently I was asked to speak at an investment club on the topic of foreclosures and purchasing properties at trustee auctions.  As always, the topic sparked great interest especially considering the abundance of opportunity in that particular niche.

Typically I will be approached by a number of people in the audience once my formal presentation is over.  I will field questions that sometimes people aren’t comfortable asking in front of the group, usually pertaining to a personal set of circumstances.  Perhaps a sign of the times, members of this group seemed to pepper me with  more questions about whether or not this was a smart time to invest and how to stay on track when outside influences often derail you.

It started me thinking that it’s really important to be a warrior when it comes to investing. In it’s purest sense being a warrior means engaging  aggressively or energetically in an activity or cause.  Success comes to those who approach their financial future in a similar fashion.

First let me say YES, now is a good time to be in real estate.  Any and all times are optimal for real estate investing with the right strategies and the proper research behind you.

As far as doing battle against negative influences and staying the course, here are a few pointers:

• Be Positive- Enjoy the challenges that the real estate market presents us with right now.  Opportunities abound if we look past the dismal headlines and bleak financial forecasting.  Keep a positive frame of mind by surrounding yourself with people of similar passion and purpose.  Find the hopeful signs to focus on such as the fact that in today’s economy small business owners are making a comeback.  Remember that there are plenty of markets in the U.S. that have seen healthy increases in value.  The markets that have seen drastic price drops are now offering investors an opportunity to enter with bargain-basement pricing.

• Success Is A Journey- Real estate is made up of a variety of steps all of which are important in their own right.  From the research to the acquisition to the rehab and so on, each step in the journey needs to be given attention.  Getting off track is part of human nature, but staying off track during any one of the steps in the process can equate to never attaining your profits.  You have to follow through with each step in order to reach your payday.  Think of it like driving to a favorite destination.  As you’re driving, you may come across a speed bump.  When you do, you slow down, go over the bump and continue on your way.  The same can be said of real estate investing.  You can’t let the speed bumps stop you from reaching your destination.

•Keep Your Eye On The Prize- Focus your energy on your personal motivating factors.  What are the things, places or people that drive you to succeed?  Keep reminders all around you of the dreams you have for yourself and your loved ones.  Whether it be a picture of the sports car you’ve always wanted or a photo of your favorite vacation spot, keep these visions fresh and in the forefront of your mind.

Now go suit up in your best battle armor and stake your claim.  There is no time like the present to become a real estate warrior and build your real estate empire.

The Urge to Purge!

One of the best parts about being an investor for so many years is the circle of influence I’ve built up throughout my career.  I’ve come to know some pretty incredible human beings, with passions as big as the night sky and an overflowing ocean of wisdom.

And with a circle of friends and business associates whose resumes can compete with some of the greatest minds and influences of our time, Ruth Pugh holds a special place all her own.  Ruth and her team at Century 21 rank among the top real estate offices in the entire country.  In 2005, Ruth Pugh’s Century 21 Award team lead the nation in both number of units sold and overall dollar volume.  They sold over 1,600 homes that year and did a whopping 539.5 million in sales volume.  Each year since that top-honor, her team has gone on to achieve amazing results.   It was no accident that I hand-picked Ruth and her team to be our premier listing office for our San Diego foreclosure acquisitions.  When you want the best results, you create the best team.

If you ask Ruth to what does she contribute her success?  She’ll gladly tell  you that it is one thing- positive thinking!

With Ruth, positive thinking is mandatory.  Beyond that it is also contagious.  You can’t help but be pumped up and optimistic when you are around Ruth.  In her office, she shouts positive affirmations at her agents.  And, each day she starts off with her 10-10 visualization list.  She says making this list everyday changed her life!  She begins each day with writing down 10 things she is thankful for and 10 things she wants to attract into her life.  She follows this up with writing down her intent for the day.  She says that the process of writing these things down, putting herself in a place of gratitude and focusing on the “potential” of the day helps her to realize her intents, day after day.  Whatever she commits to- comes true!

So I was a little caught off-guard when I recently received her Monday Morning Mojo email that she sends out to her friends, colleagues and clients every week.  Normally the subject and tone of the email begins on a positive note.  But the subject line of this email read “What Are You Going To Get Rid of in Your Life?”.  I was intrigued, as I always am by Ruth’s insights and so I read on.  By the time I was done, I thought to myself-  only someone as efficacious and determined as Ruth could put a positive spin on purging things in our life that simply don’t contribute to our overall success, prosperity and happiness.

Her insight helped me to realize that sometimes it’s not enough to focus on what you DO want, but you must also be willing to do the harder task of purging those things in your life that trip you up on your way to achieving your goals. Sometimes,  you need to muster up the “urge to purge”.

Here is her Ruth Pugh’s Monday Morning Mojo email for March 8th, shared with all of you with her permission.  Enjoy!

What are you going to get rid of in your life?

What are you going to stop doing in your job?

What are you going to give up?

Yes…you heard me right, what are you going to give up?

What bad habit, crap in your office, clutter at home, food in your cabinet, or unproductive thing in your schedule are you going to either get rid of or stop doing?  Because before you can start doing something good, something right, something that is going to get you what you want, you need to start by giving something up. Not only will it clear room for what you need to do to CRUSH IT, but usually the thing you need to give up is in conflict with your goal.

For example – you want to lose weight, but the cabinets are filled with cookies, Cheetos, crackers and other garbage. You need to get rid of the crap and fill the cabinet with healthy food so you can begin to achieve your desired weight.

You want to get organized and under control with your home life or at work, but when you walk in your house or office it looks like a bomb just went off. Grab a roll of garbage bags and if you don’t absolutely need it either throw it away, sell it on Craigslist, or donate it.

You want to finally start saving some money for the future, but you can’t seem to save a dime because you have NO extra money. But somehow you can find the money to hit Starbucks once or twice a day. Start with brewing your own cup of coffee instead. It will save you $25 – $50 a week or $1,250 – $2,500 a year depending on how frequently you go. Oh, and don’t forget the taxes you pay on each cup of coffee. So if you combine the cost of the coffee and taxes on each cup, that may be as much as $2,000 -$5,000 a year you could invest in your 401K or IRA instead, tax free! Invest $5,000 a year into your retirement account and if it earns a 10% return, that’s close to $300,000 in 20 years.

You want to get to the gym to get fit and healthy and feel good, but you are spending all of your time on Facebook playing Mafia Wars and Farmville games. Stop the Facebook game addiction and hit the gym instead!

Enough said. To get more of what you want, give it up. Get rid of it. Stop doing it.

~Ruth Pugh
Century 21 Award

Are You A Flea?

Some time ago I was told about a study done to test the limits of fleas.  As the story goes, a box was filled with fleas in an attempt to watch what they would do when placed in a large box.  They immediately started to leap about within the box.  Within a short period of time, they begin leaping to higher levels until they discovered they could leap out of the box seeking their goal, someone’s legs.  This was repeatedly done time-after-time.  The fleas quickly learned they could easily leap out of the box.

Then a clear sheet of glass was placed on top of the box. As the fleas attempted to leap out of the box you could hear them hit their heads against the bottom of the glass.  Jump, tick… jump, tick.  Within a short period of time the ticking stopped.  The fleas, tired of beating their heads against the glass ceiling stopped leaping as high.

After awhile the glass sheet was removed from the top of the box and when placed back into the box, all the fleas jumped about but never leaped out of the box!

The other day I was asked by a friend, “Chief, when is enough, enough?” My immediate knee-jerk answer was, and has always been, never!  But I knew that the simple single word “NEVER” was not a sufficient enough answer.

I have always found it strange that when it comes to money, people always seems to feel that there must be some limit, some glass sheet if you will. But I’ve always asked myself, do those same people ask others when enough is enough?  Does the marathon runner get asked when enough is enough?  How about the famous author excited about penning another great novel?  The artist about to paint another exquisite work of art?  The composer with yet another musical score in her head?  Or the doctor willing to save another life?

“Dr. Jones, when is enough, enough?  Just let this one die.”

Yet when it comes to money, somehow there seems to be “enough”.  No way!  I call B.S.!

If you have kids you never forget their first steps.  Can you imagine your child attempting to take their first few steps and then saying, “okay, that’s enough”?

Then they learn to run.  It’s the funniest darn thing to watch their first gawky attempts to run.  I call it flinging limbs!  But no, hold on, enough is enough.  No need to run.  You’ve tried it a few times and that should be adequate.  Here’s your sheet of glass.

Heaven forbid should your child even think about entering into the 50 yard dash… run a mile… join the cross country team… that’s clearly enough.  What?  You want to enter a marathon… are you crazy?  A triathlon is clearly out of the question.  And an Iron Man… well… you need to be institutionalized for such nonsense!

You need a much thicker sheet of glass.

Okay, Okay, you get my point.  Doesn’t this all sound ludicrous?  But wait, let’s look back at money for a moment.

For some reason society has placed an enormous glass sheet above those who strive to make more money. Well, here is a little insight…

It’s not about the money!

The people who ask the age-ol’ question, “when is enough, enough?”, don’t understand that the “money” is nothing more than the score card!

Let me ask you, how fun would the Olympics be without the time clock?  “Well ladies and gentlemen; we have another exciting winter Olympics to share with you.  The mens’ downhill.  We have several men going to sky at ridiculous speeds down a hill until they stop.  And, well, that’s it.  Medals will once again be handed out randomly to anyone that reaches the bottom.”

WHAT?!?!  Are you crazy?!  No clock?  No time element to determine who was fastest?  Without the clock, I don’t even know how fast they are going!

Ah, but when is enough, enough?  Never… IF, (and here comes the “if” ) , if the rest of your life has meaning.  To put it another way:  if your pursuit in any endeavor leaves a wake of destruction, then your pursuit of the gold, or gold metal, needs to be reassessed.

Everything in life has a score card. How well you are doing at work, how well last night’s dinner tasted, how this morning’s workout in the gym went, the conversation you shared with your child after school, to how much money you made this week.

For me as an investor, it’s really about the deals.  I get excited about seeking opportunity where others do not. To wake up and “get to” playing my game to its highest potential.  Like the Olympics, as a real estate fund manager the hurdles are different, the competition is intense and my clock is how fast my investment fund can turn properties for a profit. Ah, there is that clock element again.

My gold-silver-bronze are the profits we make for ourselves and our clients. Money, the simple score card, the reward for years of dedication, courage, focus and the relentless pursuit of success.  The best part you may ask?  As an investor, there are more than just three winners in the world!  Our investors win, homeowners win, the community wins, 100+ people who work for us win, their families win, and my family wins.  So why on earth should a limit be placed on success when so many people’s life’s are touched in a positive way?

Much like in school, life’s report card has more than one score, one grade.  We are being scored/graded in all areas of our lives.  Several “A”s and a few “B”s can all be overshadowed by that one fat ugly “F”.

One of life’s greatest challenges is the constant diligent strive to create for ourselves, and our families, an outstanding report card.  To insure all the areas of our life are being attended to.  The constant juggle of trying to keep a well-balanced report card.

Life’s greatest gifts and experiences exists beyond the box.  Remove the glass sheet of limitation, have the courage to leap beyond yesterday’s limits because there is never enough life to live.

Are Short Sales A Smart Play For Investors?

I read an article recently by a fairly experienced real estate agent who was touting Short Sales as the best way for investors to participate in the current market.  The basis for this belief was that short sales provide investors with a low risk way to insure against major changes in the condition (of the property) or in the market, while still retaining the choice to buy.  Hmmm…

I’m not going to knock short sales in general.  I won’t do that simply because I have been around real estate investing long enough to know that you can’t use generalities or broad strokes to determine if any one strategy is good or not good.  Theory doesn’t work in real estate investing; facts and numbers and research are what work to determine the best “play” in any given market and specifically within subsets of the market.

I actually do know quite a few people who have been successful with short sales in today’s market.  But here’s the caveat, most of the people I know who make a ton of money off short sales are the real estate agents who know how to work the system and get their short sales SOLD (and in turn earn their commissions).

As an investor, I have a few issues with pursuing short sales.  And a few problems with the proposition that short sales provide low risk and the ability to be in control.

First, the only way to be successful in real estate investing is if you buy at the right price and/or sell at the right price to make a profit.  If your money is not actively earning you a profit because you’re waiting around the 6 (on the extremely optimistic side) to 18 months (on the very realistic side) it takes to get a short sale done, then you are not aggressively participating in the real estate market. Your money is sitting idle somewhere.

In essence, you’re waiting around to see IF your offer will be accepted.  I do agree that this allows you to exercise control by electing not to go through with an offer if the condition of the property changes or the market continues to decline.  But, in the meantime, you could have been pursuing other deals that were purchased and sold for a profit or rented for cash flow.

What good does it do to minimize risk and be in control if you’re not earning money?

Second, there seems to be a perception that buying a property in a short sale means that you’re getting a wholesale price. This is the same perception that gets inexperienced investors in trouble when they get all giddy about buying properties at an auction house.  They get caught up in the frenzy and excitement of the bidding process and fail to realize they’ve just purchased a home at over 90% of its current market value.  I don’t know the exact number but I have heard that the properties sold at auction houses (not to be confused with properties sold at courthouse auctions) typically do go for well above 90 cents on the dollar.

Realistically, with a short sale you are paying less than what the current owner paid (thus the term short sale) but you are, more often than not, paying the full market price.  Now that may be okay based on your exit strategy, but if you’re flipping for profit and paying full retail then this would be a disaster in the making.

The other thing with short sales is that they can and do affect the overall market value of properties in the neighborhood.   So, if you are successful in getting a wholesale price accepted on the property you are purchasing,  you can bring down the value of the immediately surrounding properties.  If your objective is to flip, you may have just shot yourself in the foot.  You pay less now, but your neighborhood will have felt the negative effect of the price that you secured in your offer.  This is not necessarily a problem if you are using a hold strategy.  If you’re selling for a profit however,  you may have to wait longer for your value to bounce back.

I like any strategy that allows an investor to buy low and sell high. I’ve been fortunate enough to apply this strategy for over twenty years, through up and down markets and always come out making healthy profits.  The past year and a half we’ve been doing that through properties purchased at the courthouse steps.  We do a lot of research to ensure that we only walk away with properties that are secured at a low enough price point that we can turn a profit for our investors and ourselves.   And in comparison to short sales, we can be in and out with our money in less than 120 days, with a nice profit check in hand!  If we were doing short sales, we’d still be sitting around waiting to see if our offer was accepted and the deal was closed.  Heck, we can buy two properties and generate profits twice in the time it takes to do one short sale.

Short sales just don’t seem like a smart play to me if your objective is to make money as quick as you can in today’s market.    And I don’t know about you but I like my money just as fast as I like my cars!

Size Does Matter! (oh yeah!)

It’s an age-old debate.

We’ve all heard the rumblings in conversations we’ve taken part in or perhaps we’ve eavesdropped as others battled it out- “does size matter?”.    I’m here to tell you, first hand, that it does.

Now, before I offend anyone (and I have on occasion offended some who are faint of heart)- I’m talking about the size of our dreams and ambitions.  I think it’s pretty likely that many of us may be suffering from a temporary shrinking of our dreams because we’re feeling the squeeze of the economy.  We’re tightening our belts, scaling back our expenditures and doing away with a lot of the excesses we came to enjoy during the years of the abundance mentality.  But are we doing all of that to the detriment of the size of our dreams?

One of my favorite quotes is by James Allen who wrote the inspirational, self-help classic, As A Man Thinketh.  He very eloquently said:

Dream lofty dreams, and as you dream, so shall you become.

As someone who tends to be pretty frugal about spending my money, I’m certainly not encouraging anyone to go out and jump back in to the frivolous habits that helped create our credit crisis and the mortgage collapse.  I think a little frugality is what we Americans need in order to re-evaluate our belief systems about money.  In comparison to most societies, we tend to be over-indulgent and gluttonous.  We need balance when it comes to our spending power and our saving skills.  That’s an entirely different conversation.

What I am talking about now is reconnecting with our ability to dream and dream BIG!  If we scale down our dreams, we risk the chance of minimizing our potential and short-changing our accomplishments.  Dreaming big doesn’t hurt our savings accounts.  It doesn’t negatively affect our credit.  Dreaming big allows us to set new goals, soar to new heights and feel the sense of joy that comes when our dreams come true.

Here’s a few things that happened to me the other day that got me thinking about the size of my dreams.  It was one of those days when the convergence of several non-related conversations started me reflecting on the goals I was setting for myself and my family.  It was a little touch of serendipity because I ended the day with new, loftier aspirations for 2010.

·         Conversation #1 – My buddy Mark just finished building an amazing dream home in Hawaii.   But before moving in he was approached by “Hollywood” to see if he’d be interested in renting it out to the who’s who.  As it turns out, he is currently renting his place to Jennifer Aniston for a few weeks at an ungodly amount and has a movie producer wanting to lease it for 12 months for $800,000!

·         Conversation #2 – I’m in the gym with another buddy, David, who as a local jeweler has a real passion for creating amazing one-of-a-kind pieces for his clientele.  He tells me he is in escrow on several goldmines for $25,000,000.  Did I mention he already owns a few?  Oh, and he currently has $23,000,000 in inventory at his jewelry store!

·         Conversation #3 – Another friend, Sandy, comes over to have her son play with my son Rocket.  She’s just closed on a deal and is looking to purchase a CASTLE or CHATEAU in France or Italy.  Did I mention that is a 2^nd home?!?!  On top of that, she’s made an offer on a home in my neighborhood which is listed for $7,5000,000 (down from $9,500,000).

The common denominator for me in these three conversations was not the amount of money each person was making, but that none of them had set their sights low just to avoid disappointment.  Each of these three people is successful in their own right, but they are also ordinary people as well.  They  are, however, extra-ordinary in the size of their dreams.

Like I said, I walked away from each conversation one step closer to realizing that size does matter.  I will always keep a tight reign on the money I work hard to earn, but I will never allow myself to let headlines and meltdowns dwindle the size of my dreams.  I encourage everyone out there to GO BIG!

Go confidently in the direction of your dreams.
Live the life you’ve imagined.
~Henry David Thoreau

What’s Lady Gaga Have to Do With Real Estate?

What's Lady Gaga Have To Do With Real Estate?

Lately, my 8 year old daughter has me listening to Lady Gaga’s latest CD while we’re driving in the car.  I gotta admit that her music is kind of catchy!  Not exactly my style, I’m more of a guitar-driven rock-n-roller, but I find myself bopping my head along to Lady Gaga’s tunes.  “p-p-p poker face.”  And it started me thinking about the kind of people we admire in our lives.

We all have people that we hold in high esteem, some we know on a personal level while others we admire from afar.  I have people I respect for a whole myriad of reasons, from displays of personal kindness, incredible business acumen, or for being totally unique and committed to a set of goals and passions.  In the entertainment industry, I have always been a big fan of Madonna.  Not so much because of her music, but because of her incredible business sense and her ability to redefine herself on her own terms.  She is a chameleon who doesn’t appear to take NO for an answer.  It seems to me that Lady Gaga is much like Madonna in this regard.  She is incredibly unique, knows her key market and with her track record of recent hits- she is driven to succeed!  I don’t see her being likely to put her passions aside simply because someone else thinks her dreams are too lofty  or unattainable.

So exactly how does this road of thought lead me to real estate?  Well, I’ve been hearing lately from quite a few people who want to tell me (or should I say educate me!) on why real estate investing is a bad idea in today’s economic climate.  I’ve heard a whole host of reasons- from claims that we haven’t hit bottom yet when it comes to values declining or that it’s impossible to get a good deal at the foreclosure auctions because of competition driving up prices.

For me there are three important things that I  stay true to when it comes to investing in real estate- which for me has always been a strong passion (just like I am certain that music is for Madonna and Lady Gaga).

The first rule I stick to is that I never take NO for an answer.  If I am committed to a financial goal, I find a way to make it happen.  I might have to tweak things here or there, re-adjust my approach, but the point is that I make my dreams come true.  I don’t listen to nay-sayers and I don’t let others get in my way with their baseless “wisdom”.  Real estate is my way of making things happen for my family and no one is going to get in the way of me having the life I want for them.

Second, real estate investing is all about doing your homework and paying attention to the numbers. You can’t wait until after you buy a piece of property to determine your exit strategy.  You also shouldn’t go blindly into a market or a particular deal without doing your research or working with a team that can do it for you.

Third, I always make sure to be surrounded by like-minded people. A strong team of smart, driven, approachable people can make anything happen.  (I’d bet that Lady Gaga has a whole team of amazing people helping her catapult her career into the stratosphere).

We’ve been having such incredible success in the Las Vegas foreclosure market over the past year.  Our investors are singing a sweet tune with the returns we’ve been able to rack up through purchasing wholesale real estate at the courthouse auctions. Our principle approach is simple:  buy low, sell high!  History has shown this approach works and it’s working right now in markets like Las Vegas (and San Diego).  We do our research and then when we’re done, we go back and do even more research.  We know exactly what is going on in all aspects of the market.   Our investors trust their money to us because we provide results and we can illustrate this with our solid numbers.   Our team is made up of bright and highly-driven individuals, each with their own area of expertise.

So while we are closing one great deal after another, most people are missing out on the opportunities because they can’t stay connected to their passion to succeed.  Perhaps they lack the passion altogether.  Why are so many investors and/or potential investors so easily derailed by negativity and doomsday headlines?  While some people are looking for the hole in the boat (and subsequently drowning themselves), there’s another set of people who are out there achieving financial success (and waving from the shore).

So what does Lady Gaga have to do with real estate?  She offers us a good lesson in perseverance and passion and the importance of setting your sights on your dreams.

Incorporate these three basic rules and you can have your real estate profits soon sounding like music to your ears:

1. Don’t take NO for an answer.
2. Know your market (do your research)
   
3. Surround yourself with great people

If I ever meet up with Lady Gaga, it might just be as we laugh all the way to the bank and stroll by all the dream crushers who tried to educate us on why we wouldn’t succeed.  The nay-sayers won’t know what hit ‘em as we pass by them singing “can’t read my p-p-p poker face!”

We’re Not Bad Guys After All…

Investors often take a serious beating in terms of reputation- not unlike attorneys and car salesmen.  People like to point the finger at us and accuse us of being greedy and opportunistic.  (I say a small amount of hunger and a dose of opportunity can go a very long way so I’m not sure I consider those labels a bad thing).

There’s nothing wrong with wanting to make money.  Hell, there’s nothing wrong with wanting to make a ton of money.  But there are lessons to be learned by the meltdown we’ve been witnessing on the financial front and within the real estate market.  It reminds me of a warning that a fellow investor would share with the audiences he addressed, he would say “pigs get fat, hogs get slaughtered.”.  Just take a look at the level of destruction resulting from the insatiable level of greed displayed by Bernie Madoff.

So what is the lesson we should learn by the real estate collapse we’ve been witness to the past few years?  Perhaps what we should take note of is that in order to be successful we don’t need to constantly strive for that home-run real estate investment.  If we focus on sound research and decent returns, we can make a great living, one small deal at a time.

And the truth of the matter is that investors just might be the real bailout mechanism that the real market desperately needs to regain REAL momentum and solid footing.  None of the “band-aid” solutions the government has put together will truly help to turn this market around, in fact, they may simply prolong or worsen the problems.  Investors can and will rejuvenate the real estate market by, in part, moving inventory again.  Ask anyone homeowner who lives next to a vacant foreclosure property if they’d rather wait for the government (or the banks) to solve the escalating foreclosure epidemic or if they’d be happy for an investor to come along and either place a renter in the property OR flip the property to a prospective homeowner.   I don’t think the government or the banks are going to get the vote of confidence on that one.

According to a recent article in the Wall Street Journal, it appears that good ‘ole fashion flipping of properties “is back in fashion”.  (Wall Street Journal- December 09, 2009 | House Flipping Makes a Comeback ).  My point here is that it’s the investors who are out there helping to solve the foreclosure crisis by picking up homes at foreclosure auctions and generating some buzz back into the market.  We may have to do it one deal at a time, but we’re out there sparking a fire in the market again.  More times than not, investors are able to move the inventory much quicker than when the properties are left in the hands of the banks.  Idle inventory is helpful to no one!

While foreclosures continue to set records with all-time high filings, month after month, the opportunities abound.  So the next time you see someone moving into a previously vacant foreclosure property, you can stop and wonder if an investor was behind the sale (or rental).  Conditions will continue to favor the investor in a market like this one.  And it’s nice to know, from that perspective, we’re not bad guys after all.

Time is the currency of your life. How will you invest it?

STOP WASTING TIME!

As promised, I’m going to take a moment to place my twist on Stephen R. Covey – Stop Wasting Time! It’s worth a read again.

Imagine a large building that looks like a bank but is not. A brass marker on the front door reads: “Time for Sale.” All day long, people rush in and out of the building to purchase time. A man says, “Now I will buy the five years I need to prepare for a big promotion.” A woman says, “I wasted the last three years I had with my daughter; I will buy them back and make them more productive.” Each person leaves the building with what they desperately wanted: time to do the many things they had failed to do, or that they wanted to do. You stop one man, a business executive, and ask him, “What will you now do differently with your time than you have done before? How will you be more effective?” The man only returns a blank stare. He has no idea what he will do differently or how he will be more effective.

Time is the currency of your life. How will you invest it?

Take a moment to ask yourself, “What will you now do differently with your time than you have done before?” Investing today is FAR different from what it was just 2 years ago. Using the same strategies and investing with the same mindset is a sure formula for financial destruction. You have to think and invest differently in today’s economic storm to insure you preserve your assets, continue to grow your net worth and residual income.

Currently I haven’t seen a better opportunity than in the distressed real estate arena. Be it foreclosures, short sales, Trustee’s auction, REO or bulk REO. Right now, today, this moment, there are more deals than you and I can ever financial take advantage of. Distressed real estate which can be purchased and immediately resold for large and immediate profits.

Recently I was at the Trustee’s auction in Las Vegas and there were 923 foreclosed homes on the auctioneer’s chopping block… that day! 923 in ONE DAY. Routinely I see 300+ in San Diego, daily. While many are not worth purchasing, there are many worth purchasing. Simple single family homes with a true net profit of $40,000-$120,000 profit. Profits that can be realized in 120 days or less. So… “What will you now do differently with your time than you have done before?”
If you are not actively including distressed real estate into your investment portfolio… shame on you. If you have read this far, congratulations. Congratulations because by deciding to engage in distressed assets you will help insure your financial goals, aspirations and dreams. “How will you be more effective?”

As with most investments, there are two paths you can go down: One, you do it yourself; two, you associate with those in the know. While the concept of purchasing distressed assets such as homes at the court house steps sounds simple, the reality is it takes skill, resources, research and a gut feel which comes from years of real world experience. Either way, you have to decide to walk the journey of one of the two paths. Both paths lead to the same destination the questions is, “which is right for you?” Time is not your friend and the sooner you start the sooner you are going to realize your profits.

In my experience, right now, Trustee’s Auction is the fastest, surest way to quick profits. Here is a real example of a cheap little home we purchased at the Trustee’s Auction in Las Vegas and immediately sold: The home originally sold back in 2005 for $252,000 We purchased it in May for $71,100 (at the auction) Rehab expenses of $4,171 Sold for last week for $120,000 Net profit after expenses $22,329 While $22,329 isn’t going to retire you, it’s nothing to sneeze at. $20k return on a little more than a $70k investment is a hell of a rate of return in approximately 3 months! Best of all, it’s sale-able. If $20k per month isn’t suitable, then pick up 2 per month, 5 per month… or more. Unfortunately, there is no brass marker on the front door reading: “Time for Sale.”

The opportunity is NOW. The time is NOW. Your have to decide whether you are going to be like the mother in Mr. Covey’s story, “I wasted the last three years I had with my daughter; I will buy them back and make them more productive.” Life is not a practice session. You cannot buy back time. And you cannot achieve wealth just thinking about it. Time is the currency of your life.  Start NOW!

Invest wisely today,

Chief Denney

Stop Wasting Time!

Taking a month off and living in Paris has given me plenty of time to do those things that I may have been putting off for a rainy day.  And I don’t see many rainy days living in San Diego.

Today I was getting caught up on some of the reading material I’ve been meaning to get to for the past 6 months.  I came across this wonderfully insightful and powerful bit from Stephen R. Covey – “Stop Wasting Time!”

Imagine a large building that looks like a bank but is not.  A brass marker on the front door reads:  “Time for Sale.”  All day long, people rush in and out of the building to purchase time.  A man says, “Now I will buy the five years I need to prepare for a big promotion.”  A woman says, “I wasted the last three years I had with my daughter; I will buy them back and make them more productive.”  Each person leaves the building with what they desperately wanted:  time to do the many things they had failed to do, or that they wanted to do.

You stop one man, a business executive, and ask him, “What will you now do differently with your time than you have done before?  How will you be more effective?”  The man only returns a blank stare.  He has no idea what he will do differently or how he will be more effective.

Time is the currency of your life.
How will you invest it?

In financial terms I cannot think of a more appropriate, serendipitous, parable.  I’m constantly asked by investors my opinion on “what should they do?”.  “Should I invest now or later?”  “Should I take advantage of all the distressed opportunities I’m hearing about?” Or my favorite, “I’m going to wait for the bottom of the market!”

Let me ask you, “What will you now do differently with your time than you have done before?  How will you be more effective?”  What I can tell you is this…

Do Something!

The last time we as investors had this kind of opportunity was in 1989-1995.  If you didn’t take advantage of the down cycle then, it’s going to be a long time before you’re going to see it again!

NOW, is the time to invest.  NOW is the time to make a decision.  NOW is the time to build, rebuild or build upon your financial future.  NOW is the time to insure you have a retirement which greets you with a life of abundance and not scarcity.  Life does not afford you many “practice” sessions so you need to get it right.  Timing and taking decisive forward action are critical.

Tune in tomorrow as I take this wonderful piece of wisdom from Mr. Covey and place a financial twist on it.

Wishing you the best,

Chief Denney

Is the Economic Storm Almost Over?

One of the most common questions I get in the office is, “when is the market going to turn around?” It is without a doubt the most controversial topic these days. I’ve talked to people who I consider brilliant in terms of real estate and general economic common sense. And I have to tell you, the divide is as large as the Grand Canyon. Half stand firmly in their belief the market is going to turn around in 2009 and rebound and make great economic strides. While the other side continues to preach a more sobering reality. Each making strong points backed by economic this and economic that.

Because of the relationships I have, many of you call me at the office looking for my take on the market based on the discussions I’ve been privileged to have. Because with this one vital bit of information, you can confidently choose a direction to invest in. If the market is looking rosy, then out of your bag of tricks comes a set of buy and hold strategies. If the market is looking bleak, then another set of investment strategies can be deployed to insure your survival through these challenging times.

So what is the answer?

Who cares!

A buddy and business associate, Dave Stech, and I were having lunch the other day and he shared an epiphany he had regarding the market place. So while I have my own take on the market place and general economic outlook over the next 36 months, I have to give credit to Dave. Because Dave ever so eloquently summarized all this political rhetoric into a simple comment.

“It has nothing to do with

THE

economy, it has everything to do with

YOUR

economy”

Simply put… Brilliant. Who gives a damn about where the market is going because nobody knows! What I do know is that currently it’s crappy. So rather than engage in endless dialog and banter about what may be, what can be, what should be, focus on one thing…
How to make money NOW.

The only economy that matters to you is YOUR economy. Take a serious, and more importantly, honest look at YOUR current financial picture. If it looks like a train wreck, then get off your ass-ets and do something about it. Stop meditating and start motivating. Stop wasting time with wishful thinking, or exchanging wits with the witless. Take immediate action to change your financial picture. If that means, addressing some serious budget adjustments, do it. If it means jetousing debts and assets, do it. If it means restructuring, get cracking.

On the other hand, if your financial picture looks great, do something! You weren’t expecting that were you? If it looks great today, it might look crappy tomorrow. Or, it could look stellar in the near future. Sitting around enjoying your victories is NOT what your should be doing in this market. YOUR economy can be multiplied many times over by capitalizing on opportunity while others run fearful for the sidelines.

To quote Warren Buffet…

“While others are greedy, be fearful. While others are fearful, be greedy.”

While your competition is treading water searching for any piece of floatsome to clench onto for survival, opportunity abounds. Focus on YOUR economy and take immediate steps to make quantum leaps financially to secure your future.