Investor

Once you own a home you can afford (economic developments of the last few months forced me to qualify that), you’re ready to start building wealth.

Real estate investing is a long-term (again with the italics) strategy.  Speculators get burned when they try to time the real estate market through short-term strategies (e.g. “flipping”).

Don’t over think, and don’t try to outsmart a system that’s probably smarter than you. Just:

Buy the right property.

Buy it for the right price.

Hold it.

Remove your emotions from the equation.

 

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In The News

July 15, 2005 Leave a Comment

Here are a few interesting tidbits that are in the news this week:

NAR chief economist David Lereah remains bullish about the US real estate market predicting record sales again this year:

“Existing-home sales are expected to rise 2.8 percent to 6.97 million this year; last month, the association was expecting 6.89 million sales ; the record was 6.78 million in 2004″

This continued expansion of the market is largely a result of continuing low interest rates and low inventory.

In Missouri, full service brokerage companies won a victory over limited services companies with the signing of a new law preventing licensees from offering limited services for a reduced fee arrangement.

according to Missouri Governor Matt Blunt:

“These are reasonable expectations that any customer should have of a real estate broker in an exclusive broker’s agreement,” Blunt said. “Making these requirements law ensures the protection of those buying and selling a home.”

This victory is sure to spark similar legislation across the country so stay tuned.

Finally, Kiplinger’s Personal Finance Magazine has pinpointed the riskiest real estate markets. Is your town on the list?

I’m off to Oakbrook, Illinois for the Women’s Council of REALTORS’ Region II and Region III joint conference.

Have a great weekend!

Filed Under: Entrepreneur, Homeowner, Investor Tagged With: ,

Real Estate on TV

June 23, 2005 Leave a Comment

Want to buy a property, fix it up and sell it for a big profit?

Who doesn’t.

TLC’s new show Property Ladder proves that the theory of fix and flip is easier than the execution. Every show follows an investor(s) from purchase of the property through the renovation phase ending with the sale.

The show I watched followed 2 women as they spent their way from an initial projected $50,000 profit to an actual $18,000 profit. Their experience is a great example of what often happens in a renovation project-costs begin to creep up, major systems that appeared okay at closing need to be replaced and contractors delay, delay, delay.

So, if you’re thinking about getting into this admittedly lucrative niche of the investment market, this show is required watching.

Filed Under: Homeowner, Investor Tagged With: , , , ,

Tiny Bubbles

June 17, 2005 Leave a Comment

If you listen to the television, radio and stock market advisors you might think the real estate market is ready to crumble. The impending market correction is all anyone wants to talk about. But not me. I want to re-affirm my belief in real estate as a long-term investment vehicle, and I have NAR economist David Lereah on my side.

Lereah’s real estate outlook for May 2005 includes his prediction that existing home sales will fall only 1.2% this year, to 6.7 million sales from 6.78 million. In the same report, Lereah said that $20,000 invested in the S&P 500 in 1990 would have grown to $62,200 in 2004, while the same amount invested in residential real estate would have grown to $107,500.

The ability to leverage real estate and the favorable tax treatments associated with it contribute to its high returns.

To continue succeeding in the real estate investment market, have an up-to-date investment strategy. For a primer on real estate investing, read the book The Millionaire Real Estate Investor by Gary Keller. It contains concepts that we all understand, but don’t always execute, while providing a system for building wealth using real estate.

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GM Employee Discount?

June 9, 2005 1 Comment

Does anyone else find it ironic that GM is running ads offering everyone who buys a vehicle their employee discount while announcing plans to cut 25,000 jobs.

So, are we getting the discount that would have otherwise gone to those laid off workers?

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Getting Away

May 23, 2005 10 Comments

I’m off to Maui for a little R & R; that’s real estate and reef diving :-)

The last day at the office is always a challenge. There’s always one last thing that needs to get done before leaving.

That brings me to my blog entry. I’m assigning you some homework to do while I’m gone.

Step One:
Buy this book-The Millionaire Real Estate Investor

Step Two:
Read it cover to cover

Step Three:
Put it into practice and make a commitment to do one of the following before the end of the year:
1) Buy your first investment property
or
2) Increase your return on your existing property portfolio by 10%

Step Four:
Post your progress here

And yes, spelling counts.

Later this week, I’ll post the changes I’ve made since reading the book.

Aloha

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How Do You Score?

May 19, 2005 4 Comments

I’m talking about your FICO (Fair, Isaac & C0) that mysterious and powerful number which determines everything from the interest rate on your mortgage to the insurance premium on your house.

Your score is determined through a top-secret formula based on information collected by the three credit bureaus; Experion, TransUnion & Equifax. In the US, the average is score is 723.

Under the FACT Act amendment to the Fair Credit Reporting Act , you are entitled to one free credit report per year. Go here to request your free report .

Finally, if I haven’t yet convinced you to cut up your credit cards and start creating wealth, here are two great articles: this one on paying off debt versus investing and this one about a 12 step program to get out of debt and get rich.

Make it a goal for the second half of the year-stop charging and start creating.

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Where Does Your Cash Flow?

May 18, 2005 Leave a Comment

 

Remember this old cliche?
It’s not what you make; it’s what you keep.

How about this one?
I used to dream about the salary I’m starving on today.

Net worth has nothing to do with your annual income. It’s all about how you handle your cash flow.

Every month cash comes in and every month cash goes back out. Where is your cash going?

You must know where your cash is going before you can begin to build wealth. Are you spending your cash on “stuff” or on assets? Are you using credit cards to purchase the “stuff?”

Consumer debt, excluding mortgage loans, now stands at $1.4 trillion. Household debt is rising twice as fast as wages. The average household carries about $10,000 in debt and the average interest payment is $500 per month.

That’s $6,000 per year.  Going where?

If you put that $6,000 in a modest investment returning 5% per annum, you would earn $300 in income PLUS, you’d still have the $6,000. If you used the $6,000 to leverage into a property valued at $60,000 (yes, I know where would that property be? Humor me for the sake of the example) and, it appreciated 10% you would have made a return of 100% (10% increase on $60,000 = $6,000)

What’s the better use of your cash?

Easy right?

If it’s so easy why isn’t everyone doing it? If it’s so easy why is consumer debt rising?

Because we don’t like to be denied.

Denied of the short term stuff for the long term payoff.

I like a good shopping spree as much as the next woman but, I also know that every dollar I give to Nordstrom is a dollar I won’t have available when the next great investment comes along.

The key to making good choices is to control your cash. If you do use credit cards, pay them off in full every month.

While working on my quarterly cash flow and net worth,  I realized that I was spending over $100 a month on auto subscriptions that I wasn’t even using. That’s $1200 per year.

David Bach refers to this as the Latte Factor-he even trademarked the phrase. What are you spending money on that you don’t use, need or even remember? This is the easiest way to increase your cash flow.

For even more cash, limit your spending in the areas that can easily get out of control; dining out, travel & entertainment and clothing. Set a monthly budget and stick to it. As your cash flow increases, you can reward yourself with a nice CD or maybe a pretty mutual fund.

Just remember she who controls her cash, controls her future.

Filed Under: Entrepreneur, Investor Tagged With: , , ,

All Around the Town

March 30, 2005 Leave a Comment

Here’s what people are talking about in Las Vegas this week.

1) Tragedy struck a local news anchor over the Easter holiday.

2) We’re obsessed with new roads, traffic signals, etc. So it’s no surprise that these are the talk of the town.

3) The Nevada legislature is almost halfway through it’s mandated 120-day session and everyone’s talking about property taxes. Since property values have seen double digit increases for the past two years, property taxes have also increased. These increases are causing a burden to many residents especially those on a fixed income. The legislature is attempting to pass a law that will cap property tax increases until the next legislative session in 2007.

4) Speaking of property values, what’s happening in the Las Vegas market anyway? While some chicken littles are crying that the market is falling, the reality is closer to a plateau than a free fall. Prices are stable and inventory is increasing but, like any market, price the property right and it will sell.

5) What about the high rises? In case you haven’t heard (have you been under a rock?) Vegas is going vertical.  Today, there are 25 residential high-rise buildings pre-selling units. How many of these will actually come out of the ground remains to be seen. The newest and most prestigious address appears to be along Harmon Ave. Anchored by UNLV and The Hard Rock Hotel on the East end and The Palms (after a realignment connects Harmon to E. Flamingo) on the West side, Harmon has 7 high-end, high-rise residential projects on the books. In addition to the residential projects, Marriott and the “W” are building hotel projects, Alexis Park is getting a make-over and The Palmsis expanding to include condo-tels.

What does this mean to the Las Vegas real estate market?

It remains to be seen.

One thing I know is that skyrocketing land prices are forcing the builders to re-create our market. I for one, can’t wait to see how it all turns out.

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The Future of Radio?

February 10, 2005 3 Comments

Suddenly, everyone is talking about satellite radio.

Right now there are two companies providing subscriber based programming: XM Satellite Radio and Sirius Satellite Radio.

XM is the larger of the two with approximately 3 million subscribers. Last week they announced the addition of G. Gordon Liddyand Dr. Laura Schlesingerto their talk line-up.

Their rival, Sirius Satellite Radio, has about 1 million subscribers but they also have a not so secret weapon-Howard Stern, who will be moving to their line-up in January of 2006.

Sirius CEO Mel Karmazin has also been negotiating to offer their service through Apple to all those ipod owners.

Finally, there’s also been speculation about a merger between the two companies creating a monopoly in this growing industry.

Do we really need to pay for radio? I imagine that’s the same question that was asked when cable television first began to scrabble for subscribers and look what happened to them. I’ve no doubt that people will pay for quality as well as commercial and censorship free programming.

All this makes me wonder…is it time to invest (Sirius or XM) in this fledgling industry?

 

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Carly & Compaq & Catfights..Oh My!

February 9, 2005 Leave a Comment

The big news of the day is the forced resignation of Carly Fiorina, CEO and Chairman of Hewlett Packard. Fiorina, one of the most recognizable and highest ranking female executive in the corporate world, was the driving force behind the HP/Compaq merger 2 years ago.

The merger is most likely the reason for her departure but don’t feel too bad for Carly. She is leaving with a $21 million dollar severance package (golden parachute anyone?)

Her departure means the loss of a high profile role model for women in the corporate world. Still, I can’t quite decide if her firing is a sign of progress or a setback.

Equal treatment means that when you mess up, you fess up and pay the price.

Under Carly’s reign, stock prices dropped 63%. After the resignation announcement, the stock rose 6%. The big issue was the vision and future of HP. The merger with Compaq was supposed to create a company that could compete with Dell and IBM but, in reality, the combination of two low margin product lines (printers & pcs) hurt more than helped the bottom line.

With Carly’s departure,  Meg Whitman of e-bay is now the only woman CEO of a Fortune 500 Company.

Just one.

Despite all the studies about how women are unwilling to make the sacrifices necessary to nab the top spot, I find it hard to believe that we are completely at fault.

The system is rigged in favor of men. I’m not complaining, I’m just saying.

But, we are our own worse enemy.

More often then not, top female executives are fighting each other instead of helping each other. The atmosphere of scarcity creates the mindset of “her or I.” Author and former CNN executive Gail Evans addresses this phenomenon in her book She Wins, You Win.

Gail knows that

-if we stick together and believe, really believe, in the abundance of opportunities for women;

-if we help each other achieve our dreams; and

-if we cheer when one of us makes it to the corner office

we will change the corporate culture. Change the culture and we change the system.

I’m not crying about Carly’s ousting. I’m celebrating her 6-year term as the first woman to hold the posts of Chairman, CEO, & President of a major computer company (one of the 30 Dow Jones blue chips) and I’m looking forward to the day when her accomplishments won’t be thought of so far out of the ordinary.

Filed Under: Investor, Visionary Tagged With: , ,
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