2/24/13: Ask The Guys – Credit and Credibility

Another exciting episode of Ask The Guys!

Some of the most common questions we pull out of our email grab bag have to do with getting started in real estate with very little money.  Makes sense.  After all, how popular have all the “No Money Down” seminars been over the years?

So while we answer a variety of questions in this episode, as often happens, a theme emerges.  In this case, it’s credit and credibility.

In the studio for another hour of powerful pontifications:

  • Your incredibly credible host, Robert Helms
  • The no-credit co-host, Russell Gray

Whether you’re starting out or starting over, if you’re short on financial resources, it’s important to leverage your knowledge, relationships and potential.  Because to attract the money you need to get in the game, people need a reason to believe that you’re a good investment.

So lesson #1: People invest in people first and deals second.

Of course, after you’ve been investing for awhile, you’ll be faced with questions of “optimization”.  And just what is optimization you ask?  Glad you asked!

As the value of your property changes, so does your loan-to-value ratio.  That is, you have more or less equity.

Now that some of the bargain properties purchase in the depths of the recession are beginning to appreciate, some lucky investors find themselves in proud possession of positive equity.  Remember ypositive equity?  Ahh…those were the days – which are apparently coming back!

Anyway, optimization is about keeping your equity productive.  It’s too big a topic for a blog, which is why we devote quite a bit of time to this topic in our amazing book Equity Happens (humility is for pansies).

For now, suffice it to say that debt and equity aren’t idle items on your balance sheet, but important assets (yes, debt can be an asset) to be proactively managed.  So we talk a bit about debt and equity optimization in response to a couple of listeners questions.  Yes, sometimes we answer questions you didn’t know to ask.  What can we say?  It’s a gift.

And finally, what Q&A session would be complete without some discussion of due diligence?  So when listener Jill asks about this topic, which is especially important to long distance investors, we use the opportunity to wax on about this often overlooked topic.

All in all, this is yet another powerfully practical episode (in our once again not-so-humble opinion) of the Ask The Guys series.

Listen Now:

  • Want more? Sign up for The Real Estate Guysfree newsletter
  • Don’t miss an episode of The Real Estate Guys™ radio show! Subscribe to the free podcast
  •  Stay connected with The Real Estate Guys™ on Facebook!

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!

2/17/13: Clues in the News – The Market is Speaking…Are You Listening?

In this age of information overload, sometimes it’s hard to sift though the noise and find nuggets of news that matter.  But do not fear,  The Real Estate Guys™ are here!

In this episode, we delve into recent headlines and glean insights into where the market is headed and how you can position yourself to build and protect your real estate empire.  Good stuff!

In the studio, magnifying glasses in hand:

  • Your Sherlock Host, Robert Helms
  • Your Watson the news, Russell Gray

As much as we like professionally prepared real estate market reports, whether from the National Association of Realtors, the Census Bureau, the Bureau of Labor Statistics, or any number of market research firms, the challenge with most of this data is that it’s historical.  In some cases, it’s actually stale, or worse, irrelevant.

On the other hand, by definition, “news” is current.  What’s missing from the news is the big picture.  Today’s news is just a point on the curve.  However, when you monitor the headlines on a daily basis like we do (we know, get a life), trends begin to emerge.

So, if you’ve been listening to The Real Estate Guys™ radio show for any length of time, you know that ever since the financial crisis, in addition monitoring home builder and consumer confidence, changes in rents, vacancies, selling prices, foreclosures, etc., we’ve been watching (like a hawk) the Fed (interest rates, bond market activity, easing), the Government Sponsored Enterprises (“GSE’s” like Fannie and Freddie), and the mortgage industry.

Why?

Because the real estate market imploded not because people stopped wanting properties, but because the funding mechanisms that delivered purchasing power to Main Street (via the mortgage backed securities market, mortgage bankers and brokers) stopped working.

Think about that.

If real estate values imploded when leverage was taken OUT of the market, what happens to values when leverage returns?  And are there clues in the news about leverage coming back into the market?  After all, who wants to invest AFTER the prices have run back up?

As you’ll discover in this episode, the news is in fact reporting signs of leverage and rising prices creeping back into real estate.  Of course, this is no shock.  It’s what the Fed, the banks and government have been trying to do for nearly five years.  If they could fix the bob market, it probably would have happened a lot sooner, but that’s a different discussion. 😉

Now think about this:  If you, like us, wish you’d have been paying closer attention to the clues leading up to implosion (like our friend Peter Schiff did), isn’t it a good idea to watch the headlines for hints of the next explosion?  We think so.

So put on your detective cap and tune in for an exciting exposition of current headlines – and consider how you might adjust your investment decisions based on the clues in the news.

Listen Now:

  • Want more? Sign up for The Real Estate Guysfree newsletter
  • Don’t miss an episode of The Real Estate Guys™ radio show! Subscribe to the free podcast
  •  Stay connected with The Real Estate Guys™ on Facebook!

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!

2/10/13: Musical Chairs – Profiting from Demographic Shifts

Shift happens.  When it comes to demographics, sometimes those shifts affect supply and demand.

As an investor, if you get on the right side of supply and demand, you can make a lot of money.

Sitting in the musical chairs in The Real Estate Guys™ mobile studio:

  • Your host and radio show front man, Robert Helms
  • Your shifty-but-happy-to-have-a-chair co-host, Russell Gray
  • Returning special guest and top international broker, John Turley

When you make your living selling real estate on a tiny little island in the Caribbean, it’s hard to climb into the upper echelon of worldwide top producers for one of the biggest real estate franchises in the world.

But John Turley has done it.  And in a big way!  In the huge worldwide RE/Max franchise, Big John is in the top 3 of all international brokers.  All from a tiny island in the Caribbean.

How?  And why should you care?

Whether you’re an investor or a real estate broker, the message is that when people move it creates demand for real estate.  If you’re there first, then you can profit when all that purchasing power shows up.  Hey, it’s working for John and it can work for you, too.

What John Turley discovered is that the baby boomers (you know, that HUGE demographic of people who’ve powered wave after wave of business profit as they move through the stages of life) are facing an interesting dilemma as they approach their golden retirement years…

There aren’t enough desirable retirement destinations to go around.

So if you’re the purveyor of such things (as a landlord, developer, flipper or broker), you have an amazing opportunity to ride the wave.

Here’s the good news:  Though the race is on, the boomers are only on the front end of their shift into retirement.  Most don’t yet realize the shortage that’s coming.  This means there’s still plenty of time to get in on the action.

But don’t wait too long.  Because when the music stops, there might not be enough chairs for everyone.  And those that are available will probably be expensive.  That means the earlier you get in, the better chance you have of singing a happy tune down the road.

So listen in and discover how demographic shifts affect your opportunities in real estate.

Listen Now:

  • Want more? Sign up for The Real Estate Guysfree newsletter
  • Don’t miss an episode of The Real Estate Guys™ radio show! Subscribe to the free podcast
  •  Stay connected with The Real Estate Guys™ on Facebook!

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!

2/3/13: Searching the Globe for Real Estate, Banking and Privacy

Being homeless isn’t something most investors aspire to.  Then again, it depends on your definition of homeless.

In this episode, we visit with a man who is a self-described “perpetual traveler”.  As such, he doesn’t really identify with any particular country.  He’s what you might call a sovereign man.

What does that have to do with real estate investing?  That’s what we wanted to know!

Planted behind the microphones under The Real Estate Guys™ cone of silence:

  • Your perpetual host, Robert Helms
  • Our special guest and sovereign man, Simon Black

Many investors buy property wherever that happen to live.  It’s a great strategy if you’re in a great market.  But what if you’re not?

We say, “Live where you want to live, but invest where the numbers make sense.”  Then again, there may be more to your investing choices than simply return on investment.  Some markets make sense for other reasons.

Some investors are concerned (and rightly so) about things like privacy, asset protection, personal security and lifestyle.  And in a rapidly changing world, there’s a lot to think about!

Now you may be a raving fan of big government, deficit spending, and ever-increasing regulation.  Or you may think that all of that is a short path to economic and societal collapse.  We’re not here to debate the right or wrong of what’s going on. We just want to understand the possible outcomes and put ourselves in the best position to survive and thrive.

Regardless of your feelings about the the size and scope of government, it seems quite obvious that government is getting bigger and more expensive throughout much of world, and certainly in the United States.

So who in the world is Simon Black?

Simon Black (not his real name) is a kind of mystery man.  He claims to have a background in military intelligence who eventually came to distrust the U.S. government he enlisted to serve.  Interesting….but so what?

As a result of his experiences in government, Simon decided to step back and look at world dynamics from something other than a U.S. centric point of view. To gain this perspective, he began to study, travel, explore, invest and muse.  We discovered him through reading several of his many musings.

We always find conspiracy theories interesting, but they aren’t really easy to invest in. And we’re not saying Simon is a conspiracy theorist, but he certainly does question some of the motives behind ever-growing governments.

Nonetheless, some of Simon’s observations about the economic and political happenings around the world translate directly into things like population growth, demographic shifts and land use.

Land use!  Okay, NOW it starts to get interesting.  After all, we are The Real Estate Guys!

We like real estate because it serves essential human needs.  This means, for the right real estate, people will pay to use it.  Duh, right?

The key then is to identify what makes a chunk of dirt “right” for what and for whom.  Ahhhh…now it gets a little tougher.

Obviously, in a society where people and the economy are growing, real estate investing is easy.  Just buy anything people can live or work in.

But what happens when that wave of prosperity recedes?  Detroit used to be the United States’ wealthiest city.  California used to be a compelling reason to “Go west, young man” because it was a low cost land of opportunity.  Not today.

The point is that things change.  And the pace of change today is greater than at any other time in history.  This means it’s important to pay attention to what’s going on.  You don’t want to get left behind…or worse, trampled.

So we set up a secret meeting with Simon Black to find out what his world travels have taught him.  It may well be a perspective you’ve never heard before.  We think you’re going to be intrigued at the very least.  And who knows, you may just be enlightened into a whole new style of real estate investing!

We’ve long been enamored of diversifying into global markets.  Stock and bond investors have been doing it, so why shouldn’t real estate investors?

And while we know that income property is valued by the income it produces, we’ve also learned that sometime it isn’t what sits on top of the land that makes it valuable.  Sometimes, it’s what comes out of it.  Just ask Jed Clampett (that’s a reference to The Beverly Hillbillies, in case that got by you younger folks).

Simon sees a whole new opportunity, and it isn’t about oil.  But we don’t want to spoil it for you, so take a listen.  And as you do, think about how many people share Simon’s concerns about privacy, private property rights; less dependence on big, easily controlled and disrupted institutions and supply chains.

You may or not look at the world the way Simon Black does.  And banks, governments and multinational corporations may continue to be the dominant economic and political forces they are for many decades to come.  If so, how does it harm you to have a modest Plan B in place?

And if these big institutions struggle, wouldn’t it be nice to have at least a little bit of independence and anonymity?  History tells us that when major institutions that the masses depend on for their essentials falter, the resources of the prudent often come under attack.  You may not be able to avoid that forever, but why be the low hanging fruit?

Since real estate is a fundamental component of human survival and prosperity, doesn’t it make sense to have some of it in a variety of places – perhaps a little off the beaten path?

Think about it as you listen to our interview with international sovereign man of mystery, Simon Black.

Listen Now:

  • Want more? Sign up for The Real Estate Guysfree newsletter
  • Don’t miss an episode of The Real Estate Guys™ radio show! Subscribe to the free podcast
  •  Stay connected with The Real Estate Guys™ on Facebook!

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!