Just because a person can afford a house doesn’t mean that they want to buy one; and just because a person wants to buy a house doesn’t mean that he or she can afford one. It’s up to the seller or salesperson to ascertain the financial capacity and degree of motivation of a prospective buyer before spending any time trying to meet their needs.
Continue reading “Qualifying the Prospect As To Need & Financial Capacity”
In the 1890s, the head of the U.S. Patent office suggested that, since all the really valuable ideas had already been conceived, the U.S. Patent Office be shut down. After that time, the airplane, nuclear power, radio and television, computer, internet, etc. were all invented. In the world of real estate and finance, new concepts are being used all the time; and old concepts are now being revisited.
At the top of the list as to why people think the house market has crashed is that the media says so. What has anything in the main stream media got to do with you? The stock market and the gold market are world-wide markets, so people in that sector have to keep an eye on all the things that are happening world wide to be able to buy and sell at the right price and at the right time. In contrast, the single-family house market is a local market that depends upon a national credit base.
For the past few years, there has been a trend for people to invest in houses far from their home stomping grounds They are usually lured by purported rents that are high relative to the money invested. What I find most interesting is that they take this plunge with far less due diligence or negotiation that they would use if they bought a house where they live. As a result, there are hosts of unhappy people who are stuck with houses that are either being handled by indifferent property managers, or that are sitting vacant, not being managed at all. Now these same investors can’t understand why they are having a hard time selling to recover their investment.
In the stock market they've learned how to strip the income off of bonds, which they call 'strips', selling them to investors who want income; and to leave the gain in the bonds in derivatives called 'scores' for those who want capital gains. Somehow, both types of investors pay less for what they get because they aren't being forced to buy something they don't want. We can do the same thing with real estate notes.
There are many financial artifices that effectively convert compound to simple interest. One such technique is to structure a series of annual Notes secured by a single mortgage. Each will contain an agreed upon interest rate, but each will become effective and start earning interest in a sequential time period.
Continue reading “Converting Compound Interest To Simple Interest”
I saw a study a few months ago that predicted that between 2000 and 2020, some 50 million Americans were going to relocate from North to South of the 38 parallel on a line roughly between Raligh/Durham, N.C. and Santa Barbara, California. There will be some exceptions to the rule, but the older cities such as Boston, New York, Phildelphia, Pittsburg, Cleveland, Cincinatti, Chicago, and Detroit will be hit hard. This will be the greatest migration in history; even greater than when the new world was discovered, and it will have profound effects on everyone.
In a previous post I mentioned having lost money investing out of my own area. One time I counted up all the places I’d tried to money and it turns out that I’ve invested in over half the various states in addition to two foreign countries. Most of these deals either made very little money, or lost money. On the other hand, I have also divided my time between Florida and Nevada and made money in both places.
Continue reading “If You Want to Change Locations, Do It Carefully And Slowly”
A few months ago I was riding between LA and Reno on a Southwest flight listening to the occupants of the seat behind me talk about real estate. The "old pro" who had been investing for a year was initiating the neophyte in the adjoining seat in the rites of real estate investment. She took pains to reveal that she had just returned from her condo in "Vegas" and was on her way to her place in Hawaii. She’d been able to quit her job as a beautician and retire on the money that she had been able to "pull out tax free" from her houses.
Continue reading “Beware of Being Lured By Promises of Easy Money”
This Blog is being written after my 40 anniversary of my departure from the U.S. Air Force after 20 years as an enlisted man. I thoroughly enjoyed my Air Force career and have no regrets, but it was pretty low-paid work. My vaunted retirement pension that I started collecting at age 37 was $249.51 per month.
Continue reading “If You’ll Give Yourself Time, You Can Create A Wonderful Life”
