May 24 Del Mar Hilton
I know your first reaction (as is mine) is always to say "Well don't they know if they don't take this - they'll get nothing?" The short answer is - yes they know - and NO, they don't care. It is a well planned out process of delays, distraction, and deliberate misinformation designed to take legitimate deals to the brink so that they can get the parties involved to agree to anything within their means.
We are all very emotionally invested in this process and hanging by a thread, while they (the banks) seem to just fritter away the day playing stupid. Again, they are not stupid. When this technique no longer works for them, they will change it. In the meantime, in their eyes anyway, it works. There will be last second surprises that will have to be addressed. They may ask for a promissory note from the seller, they may ask the agents to give up a little commission, they may refuse to pay this close cost or that.
The decisionmakers spend 75% of their time in meetings justifying why they took 10 cents on the dollar or whatever. If they can squeeze just one more drop of blood out of that turnip, they are heroes and slapping each other on the back.
That is the reality of it. I have a minimum of 20 of these things going at all times. Some lenders are better than others. Countrywide is the worst by far, with Chase (WAMU) being the next worst. The others have their moments.
There are quite a few agents and investors out there claiming to be short sale experts, claiming minimum trouble low stress deals. The reality is, the majority of all short sale attempts by agents end up in foreclosure. It's not because of paperwork, or because of lack of buyers. It is because the last mile is the toughest and people always lose their heads. Agents, buyers, homeowners, etc. They just can't take the anxiety and they snap. Recognize this and be prepared for it.
Brinksmanship is a HUGE part of this business. Try not to get involved emotionally. And don't do the business if you can't handle frustration and anxiety - if you take it personally. You will make mistakes. Admit them, learn from them, and work hard. It takes a bulldog to do this business!
Saturday, July 18, 2009
Friday, July 17, 2009
Investor Bulletin - Watch your Back!
My thoughts on Steve Dexter's talk Tuesday night at SDCIA (San Diego Creative Investors).
First, let me set the mood. Attendance seemed down, though I have not been at SDCIA for a couple of meetings. Ryan Broley can probably speak better on a trend there. Haves and Wants seemed subdued too. Bill Tan told me after the meeting that people had complained to him that he was being too negative in his preparation remarks so he tried to be more upbeat. And as for Steve the speaker, he commands the audience with his down home style and booming voice like no other.
As for what he said - well, he thinks it is going to be ugly. He has the usual set of charts showing the subprime and option arm mortgage tops and resets, and a lot of new data which all confirm the same thing. Unemployment is going up, consumer spending is minimal, and the national and state deficits are so far out of control it is scary.
Once of my favorite things he talked about was rail car loadings and shippings - a stat he says he just picked up from Warren Buffet. They are the lowest since the depression (i think - or maybe it was the 70's) Anyway this is an indicator of domestic economics and it is not good.
So things are bad. What can we do?
He says it is a good time to buy. Prices are down, may go lower. But you can cash flow in CA again. A good plan would be to buy 10, hold for a while till prices go back up, then sell 5 and have the others free and clear. Lather, rinse, repeat. The high end market is in trouble for a while. There is no fair priced money out there (except for hard $) for mortgages except the government. FHA, Fannie and Freddie. VA too. And those loans -(starting to be used widely about 18 months ago) are not performing well. Steve suggests you talk to everyone you know about arranging private financing. Partner with a money partner and you can score big.
Finally, Steve paints the picture as he sees it. He does not claim to be sure he is right, but most seasoned investors who have been around for more than a couple of cycles, agree with the overall premise. He urges us to be wary of the government statistics (optimistic to a fault) It is a good time to buy, the recovery (both housing and economic) is a long way off, and southern CA is the place to buy. He has been immersed in the trends and numbers of the housing market for over a decade, and has a solid feel for where we are which he presents well. Watch your pennies, stick with Real Estate but diversify a little. Watch whom you listen to - stick with the old pro's like John Schaub and Jack Fullerton, and build a portfolio because that is the best way to earn money. Mailbox money.
I concur.
Richard Worcester
Geneva Real Estate & Investments
78Homes.com | ShortSaleGroup.com
1450 N Santa Fe #C-162
Vista, CA 92083
Sales | Development | Management
Ph: 760.208.2845 | Fx: 760.454.2956
email: Rich@78Homes.com
California DRE License #00919559
California General Contractor License #874711
First, let me set the mood. Attendance seemed down, though I have not been at SDCIA for a couple of meetings. Ryan Broley can probably speak better on a trend there. Haves and Wants seemed subdued too. Bill Tan told me after the meeting that people had complained to him that he was being too negative in his preparation remarks so he tried to be more upbeat. And as for Steve the speaker, he commands the audience with his down home style and booming voice like no other.
As for what he said - well, he thinks it is going to be ugly. He has the usual set of charts showing the subprime and option arm mortgage tops and resets, and a lot of new data which all confirm the same thing. Unemployment is going up, consumer spending is minimal, and the national and state deficits are so far out of control it is scary.
Once of my favorite things he talked about was rail car loadings and shippings - a stat he says he just picked up from Warren Buffet. They are the lowest since the depression (i think - or maybe it was the 70's) Anyway this is an indicator of domestic economics and it is not good.
So things are bad. What can we do?
He says it is a good time to buy. Prices are down, may go lower. But you can cash flow in CA again. A good plan would be to buy 10, hold for a while till prices go back up, then sell 5 and have the others free and clear. Lather, rinse, repeat. The high end market is in trouble for a while. There is no fair priced money out there (except for hard $) for mortgages except the government. FHA, Fannie and Freddie. VA too. And those loans -(starting to be used widely about 18 months ago) are not performing well. Steve suggests you talk to everyone you know about arranging private financing. Partner with a money partner and you can score big.
Finally, Steve paints the picture as he sees it. He does not claim to be sure he is right, but most seasoned investors who have been around for more than a couple of cycles, agree with the overall premise. He urges us to be wary of the government statistics (optimistic to a fault) It is a good time to buy, the recovery (both housing and economic) is a long way off, and southern CA is the place to buy. He has been immersed in the trends and numbers of the housing market for over a decade, and has a solid feel for where we are which he presents well. Watch your pennies, stick with Real Estate but diversify a little. Watch whom you listen to - stick with the old pro's like John Schaub and Jack Fullerton, and build a portfolio because that is the best way to earn money. Mailbox money.
I concur.
Richard Worcester
Geneva Real Estate & Investments
78Homes.com | ShortSaleGroup.com
1450 N Santa Fe #C-162
Vista, CA 92083
Sales | Development | Management
Ph: 760.208.2845 | Fx: 760.454.2956
email: Rich@78Homes.com
California DRE License #00919559
California General Contractor License #874711
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