10/28/12: Halloween Horror Stories – What Property Problems Can Teach Investors

We’re not sure if it’s part of a bigger plan, but have you noticed that Halloween precedes Thanksgiving (in the U.S.) which precedes Christmas?

Now we understand that some folks don’t like Halloween, while others don’t like Christmas; and of course, not everyone in the world celebrates Thanksgiving, which is really an American holiday.  But let all that go for a minute and consider this…

Halloween is a scary time when bad stuff happens.  Thanksgiving is a time of giving thanks.  And Christmas (in addition to its religious meaning) is a time of giving and receiving gifts.

So what?

Well, after going through a lot of scary stuff in our real estate investing careers (and watching lots of others too), we’ve found that the most useful reaction to difficulties is to be thankful.  Sounds crazy, we know.  But it’s true.  There’s something about gratitude that unleashes hope, energy and creativity – all of which are really helpful when dealing with crazy stuff.

And, we’ve noticed that something really amazing usually follows approaching life with an attitude of gratitude:  people are more willing to give you help.  Why?  We’re not sure, but we think it has something to so with you giving the gift of appreciation first.  It’s kind of like a gift exchange at Christmas.

So what does all this have to do with this year’s edition of Halloween Horror Stories?  Just another reminder that real estate investing isn’t always peaches and cream.  But when the inevitable bad stuff happens, there’s a lot you can do and learn if you approach the adversity with the right attitude.

We know.  It’s easier said than done.  That’s why we like to take this time each year and talk about the bad stuff.  We all get into real estate investing for the rental checks.  But sometimes, the properties deliver reality checks.  We’ve found talking about the experiences can be educational and therapeutic.

So listen in to another spooktacular session of Halloween Horror Stories with The Real Estate Guys™ and get some lessons.  But more importantly, take a few minutes to reflect back on some of our own horror stories and be thankful for the opportunity to learn.  Then take the gift of appreciation to the marketplace, share your knowledge, and see what amazing good gifts the world gives back to you!

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10/21/12: Property Possible – Repositioning Assets for Better Profits

Rehabbing is all the rage right now. The opportunity to snap up distressed properties, pretty them up and sell them for a quick profit has probably never been better, and lots of newbies and Mom & Pop investors have jumped on the bandwagon.  Heck, the opportunity is so good in single family homes that even big Wall Street private equity firms are gobbling up inventory in some of the markets most devastated by the financial crisis.

Now rapid fire rehabbing is hardly “passive investing”.  There’s certainly nothing “passive” about it – and one could argue that true “investing” is making the money do the work, not you.  So we contend that rehabbing is more of a business than an investment strategy.  But that’s beside the point.

If you decide to be in the business of forcing value into your properties, whatever property type you’re in to, then you’ll like this session because we have a couple of very experienced “turnaround” specialists on the microphones.

In the house for this episode of The Real Estate Guys™ radio show:

  • Possibly the finest host, Robert Helms
  • Your impossible co-host, Russell Gray
  • Hotel Impossible star and hotel turnaround expert, Anthony Melchiorri
  • General manager of the 21c Museum Hotels, Craig Greenberg

No matter what kind of income property you own, success is all about occupancy.  But if you think it’s hard work to turn over a tenancy every six months, try doing it every night!  That’s the challenge every hotel operator faces.

Now even if you aren’t in the hotel business and never plan to be, there are great lessons to be learned from those who are.  Because at the end of the day, when you pretty up a property, you do it to please another person: the home buyer or the tenant.  No one knows more about the importance of pleasing the customer than people in hospitality.

So lesson #1 is to be sure you prep the property properly to optimize it’s appeal to your target customer.  Of course, this pre-supposes that you are clear on who your target customer is, what they want and what they’re willing to pay for it.

If you’ve ever watched an episode of Hotel Impossible, you know that Anthony Melchiorri helps owners see their properties through the eyes of the customers.  What a powerful, but sadly overlooked concept!  Property owners often create a property that pleases them. Oops. They aren’t the customer!

You’ve probably also noticed that Anthony often discovers what the customer wants by talking to the staff.  Why?  Because when the customer expresses their need or dissatisfaction, the staff are the first ones to know.  So a wise owner listens carefully to the feedback from the staff to respond quickly and accurately to the needs and wants of the customer.

Do these concepts apply to other kinds of real estate investing?  Of course they do.

If you’re a fix and flipper, your real estate broker is a great source of information about what the market wants and what they’re willing to pay.  Doesn’t it make sense to listen to your broker?  Say yes because that’s the answer.  Yet, so many flippers go to the market with their own need, instead of focusing on the needs of the market.

News flash:  the market couldn’t care less about your need.  If you want to make money, you need to give the market what it wants.

Whether you rent our single family homes, apartments or office space, your property manager and leasing agents will tell you what the market wants.  Once again, it pays to listen.

“Well, that’s just common sense,” you might say.  Yes it is.  But have you ever known someone to buy a property in an area they don’t know and then go find a property manager to manage it?  It happens all the time.  Wouldn’t it be smarter to have the property manager tell you what kind of property, location, amenities, etc. is most in demand, and then go buy that?

You get the idea.  There’s a lot of real estate wisdom to be gleaned from the hospitality business.

And while our second guest isn’t as famous as Anthony, his story is every bit as enlightening.  Craig Greenberg takes old, dilapidated “historic” properties and adds a unique attraction to bring people and their money into the property.  It’s a fascinating study in creativity and one you can learn from.

So listen in as we talk to Anthony Melchiorri and Craig Greenberg and glean valuable lessons from their experiences in finding ways to extract more profit from problem properties.

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10/7/12: The Global Perspective – Where Investors Are Going and Why

Money is flowing around the globe, seeking opportunity and avoiding risk.  But where is it going and why?

We’re always fascinated by trying to figure out where the puck is going (a hockey quote by Wayne Gretsky) .  And (to horribly mix metaphors), sometimes you need to get a bird’s eye view to see the whole field.  But (to worsen the metaphoric catastrophe), if you want to ride the wave of capital flowing around the globe, you have to take time to study the trends.

Does all that sound like hard work?  It is!  But we’re here to help.

So for this episode of The Real Estate Guys™ radio show, host Robert Helms ditches co-host Russell Gray and flies solo to Orlando, Florida to attend the RE/MAX Encounter the Americas conference.  While there, he captures interesting interviews with three gentleman who are in great positions to offer valuable perspectives on the trends in global real estate.

Behind the microphones, but ahead of the puck, for this episode:

  • Your think globally, but drink locally (brewed beer, that is) host, Robert Helms
  • RE/MAX VP of International Business Development, Larry Oberly
  • RE/MAX VP of Latin America, Ricardo Cardenas

The RE/MAX Encounter the Americas conference brings together company leaders and agents from all over the world, with an emphasis on Latin America and the Caribbean.

And because RE/MAX is one of the biggest players in real estate brokerage, they have lots of data, both statistical and anecdotal.  So we’re excited to bring you the Cliff’s Notes from these high level execs.

 

Larry Oberly‘s job is to expand the RE/MAX network around the globe.  To decide where and how to get into various markets, he gathers data from professional associations, local agents and search patterns on RE/MAX websites.

Think about that.  Before people move or invest in a market, they start doing research.  And when they get serious, they start honing in on neighborhoods, properties and price points.  These days, almost all of that happens on the internet, providing valuable insight to a guy like Larry.

Now even though this conference is about the Americas, Larry has some very interesting comments about China.  It’s no secret that China has tons of money.  And some of that money is making its way into real estate in the Western Hemisphere.  What’s even more interesting is why.  But you’ll have to listen to Larry to get the answer. 😉

Next up is Ricardo Cardenas.  This interview is worth listening to just because Ricardo has the coolest Latin accent.  But of course, the big bonus is the insights Ricardo has to share about what’s happening in his part of the world.

Even though Brazil is part of the group of emerging growth economies known as the BRICs (Brazil, Russia, India, China), it isn’t the only strong economy in the south of the Western Hemisphere.  And as these nations make more money, more real estate business is being transacted with both domestic and foreign buyers.  In other words, people want to buy property there.

Ricardo shares some of the work being done to improve business systems, professional cooperation and standards of real estate brokerage practice.  Just as standardized hardware and software protocols have made computers more friendly and accessible to more people, so will increasingly standardized real estate practices attract more buyers and their money to these markets.

It’s all part of the critical infrastructure which facilitates the flow of capital to and from real estate markets along the international financial highway.  We watch it because it helps us anticipate where and how fast money will flow into a market.

Last, but certainly not least, Robert reconnects with John Turley, our good friend, 2013 Investor Summit at Sea™ faculty member, and top real estate broker in the country of Belize.  If you’ve been listening to the show for awhile, you know we’ve had John on before – and that The Real Estate Guys™ LOVE Belize.  In fact, John is a featured speaker on our Belize field trips.

Now John’s perspective on international real estate is a little different than Larry’s or Ricardo’s because John is focused on Belize.  And rather than a top down view, John is in the streets every day talking with real life home buyers, investors and developers about where they come from and why they’re interested in a place like Belize.  That’s how we got to know him.

As an American ex-pat who brought his family to Belize and set up shop in 2005, John has his personal perspectives to share.  But what’s really interesting is what he’s observed about what’s going on around him in his seven years and living working in Belize

For a market place that owes a big part of its revenue to tourism, you’d think the dour U.S. and European economies would have taken its toll on Belize real estate.  Not so.  We’re pleasantly surprised to find that values in the Belize real estate market never really tanked like they did in so many over-leveraged and over-built markets.

And as for tourism in Belize, John tells us that 2011 was a record year and that 2012 is outpacing 2011 by double digits. More, tourism to Belize is above the peaks of 2005 before the recession ever hit.  Very impressive – and consistent with the feedback we got from the Shared Ownership Conference interviews previously broadcast (Look for Getting a Slice of the Pie on our Listen page)

So big lesson:  be careful not to look at the world only through the filters of your own perspectives and paradigms.  How it is for you and where you are may not be indicative of what’s happening in other places.  That’s why we make it our mission to get around to these other places and learn how other people are seeing things.

But we know it’s hard for you to fly all over the place like we do, but no worries.  That’s why you have us.  Enjoy!

Listen Now:

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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources that help real estate investors succeed. Visit our Feedback page and tell us what you think!