How to Flip a Minnesota Foreclosure in 2014

According to MSN Real Estate, home flipping—the act of buying a dilapidated house, renovating it and selling it for profit—is heating up again. After the housing bubble collapsed some four years ago, the flipping world came to a grinding halt. Though plenty of inexpensive homes were available on the market, including many foreclosures, the flat-lined real estate market made flipping a risky proposition.

Now, however, the number of foreclosures and short sales in Minneapolis has fallen dramatically. According to The Skinny, a little over 35 percent of all closed Minneapolis home sales in November 2012 were foreclosures or short sales. In November 2013, that number fell to a little over 22 percent. If you’re in the market for a foreclosure to flip, now’s the time to act.

The latest flipping trend in Minneapolis, which the Star Tribune recently reported, is purchasing and renovating homes in the upper end of the real estate market. With fewer foreclosures to choose from, some of your fellow flippers have turned to tackling these million-dollar rehab projects in hopes of turning a big profit.

Where to Start

Make sure that the foreclosed home you purchase is in a desirable neighborhood or community. Remember, with real estate, the old adage, “Location, location, location,” is almost always true. Do your research, especially if you are not familiar with a neighborhood. That home you’ve been looking at may seem like a real bargain because similar houses sitting just a few blocks away are selling for thousands more, but they may be in a different school district. Parents place high value on the schools their children will be attending, so the ones that service your neighborhood could significantly affect the price of your foreclosed property.

Don’t Skimp if You Purchase a High-End Property

With a high-end flip, you will typically be dealing with discerning buyers who expect quality, above all else, in their investment. If the foreclosed home you are planning to flip has cheap or dated carpeting, cabinets or countertops, replace those cosmetic areas with top quality items, such as hardwood floors and granite. The same holds true for your appliances.

Have a Dumpster on Site

Flipping generates a lot of trash and waste so have a dumpster on site so that all of your contractors will have a place to dispose of their rubbish quickly. Companies like Minneapolis Next Day Dumpsters rental, include the dumpster, delivery and pick-up all in their fee. Remember to ask your contractors to remove any waste removal costs from their estimates since you’ll be providing the dumpster on-site.

Stick to Your Timeline

While it’s not always possible to keep contractors on schedule, remember that the more time you spend on your flip, the less money you will be making in the long run. Each mortgage payment you have to pay cuts into any potential profit you stand to make.

This post provided by The Real Estate Guys™  guest contributor, Nettie Gomez

The Missing Piece to the Puzzle

We’re living in a world of great financial uncertainty. But inside all of that uncertainty are amazing opportunities.

People are worried about the finances todayThat’s really good news, because in an economy that isn’t creating many high paying jobs, with all kinds of queasy money distorting asset values and suppressing interest rates; plus rising costs of healthcare and other essential products and services, a lot of people could really use a great opportunity.

Maybe you’re one of them.

Coming out of The Great Recession (we know, we’re not really out yet…), the distribution system of money to Main Street was broken.

Because when the stewards of the economy, from the Eccles building (The Fed) to Wall Street to Washington DC, screwed it all up for Joe Citizen, the trust that holds all the machinery together was severely damaged.

So even though financial institutions are having a field day with cheap money in the Wall Street casinos, Mom & Pop investors are understandably nervous trying to navigate the resulting asset bubbles. (For insight into how scary paper assets are right now, click here)

GREAT!

Because now the near stranglehold that institutions had on Main Street assets has weakened.  So street level entrepreneurs have an opportunity to step in and serve the needs of savers in a way the institutions can’t.

YOU can be a part of it.  In fact, we’d argue that you NEED to be a part of it.

Big money just can’t do real estate the way small-time operators can.  Real estate doesn’t lend itself to mass production.  Every property, personality and deal is different.  And that inherent uniqueness creates huge inefficiencies that mega-money players can’t navigate.  And they shouldn’t.

Yet, bread and butter real estate…the kind that houses people and small businesses…is foundational to a civilized and productive society.  Otherwise, we go back to a world of nomadic hunter / gatherers.  Candidly, there’s a few super-models we wouldn’t mind seeing in a loin cloth, but for the most part a modern society is to be preferred. 😉

But if the institutions can’t really do basic real estate very well, that creates a real challenge for the good people who work hard, live within their means, and save money that they want to put to work.  Because if they can’t sit in their crib with their smartphone app and “invest”, they aren’t sure what to do.

Their problem is YOUR opportunity.

You’re doing all the stuff they don’t want to do (or if you’re not, you can be).

You’re already building a network and getting into the deal flow.  You’re out there looking at properties and finding the pockets of opportunity… right down to the street level.

You’re practicing and developing the fine art of creative deal making.  You’re willing to organize and oversee a re-hab project.

You’ve got property managers (or maybe you’re one of those crazy folks who actually manage your own properties) and you’re willing to deal with all the drama of tenants, toilets and termites.

In short, SAVERS NEED YOU.  And it’s more true now than ever before.

Think about it.  Savers can’t get any yield on bank savings.  Ditto on bonds.  And with no place for interest rates to go other than up, the principal value of bonds is fragile.  Meanwhile, stocks are arguably near a bubble.  Smart money is getting out before the bottom falls out again.  It’s a VERY SCARY time to be a paper asset investor.

But YOU can be the knight in shining armor.  You can show up with a REAL ASSET investing strategy.  You can help savers put their money to work in investments that have intrinsic value, produce income, benefit from (or at least hedge) a falling dollar and low interest rates.

It’s a PERFECT STORM of opportunity for you to become a syndicator.

Simply stated, a syndicator is someone who raises private money from investors and goes out and puts it to work.  It’s a serious business and a big responsibility.  But it isn’t overly complicated with the right education and professional advisors.

It’s something we think any real estate loving entrepreneur should be giving serious consideration to RIGHT NOW.  And of course, we have some resources to help you.

Here’s a couple of broadcasts we’ve done on the topic (look for the Listen Now button at the bottom of each post or search for episode title on iTunes):

Speaking of crowdfunding, attorney Mauricio Rauld has something on the topic in our Special Reports collection:

Here’s THE handbook on the subject, available in The Real Estate GuysRecommended Reading Bookstore:

And if you’re REALLY serious, we’d love to have you attend our Secrets of Successful Syndication seminar.  Click here for more info.

The great thing about syndication is you don’t have to have a ton of money.  You need to have time, intelligence, high integrity, and a strong work ethic.  With those, you can raise the funds, find the advisors, and make all the money you need by helping solve savers’ problems.

Right now, the market needs more good people to put money to work on Main Street, without funneling it through the institutional machinery.  That’s good for the the investors, it’s good for the community, and it can be very, very good to you.

1/26/14: From the Archive – Practicing Safe Syndication

Many people are seeing the big opportunity in raising private money to do more and bigger deals.

So we thought it would be a good idea to go into the Archives and dig up an episode we did with our friend and attorney Mauricio Rauld.  After all, we don’t want anyone getting into a syndicationally transmitted debacle.

Providing prudent policies for practicing safe syndication:

  • Your carefree host, Robert Helms
  • His cautious co-host, Russell Gray
  • Attorney and wet blanket, Mauricio Rauld, Esq.

Raising money from investors can be a great way to to fast track into full time real estate.  It’s an alternative to the typical “how-to-get-started-with-nothing-in-real-estate-investing” techniques such as wholesaling or bird-dogging.

Even better, it gives you a chance to build a portfolio of your own right from the beginning.  Wholesaling is about generating quick cash today.  But you need to keep finding new deals all the time.  So while it’s a great way to make fast money, it’s a treadmill of feast and famine.

Whereas (we just wanted to say that because it sounds kind of legal), building a portfolio of income producing properties and earning a recurring management fee can be a a way to earn money from a real estate portfolio that you build using investors’ money.

But this episode isn’t about convincing you that starting a fund or taking on partners is the best way to go.  It’s more about important things you need to be aware of once you decide to go down that path.

Many real estate investors don’t have much legal background.  So they go buy a few houses in their own name and rent them out.  After a while, they move up to apartment buildings or small strip centers.

At some point, hopefully sooner rather than later, asset protection and estate planning attorneys get involved.

Meanwhile, your friends and family see you doing well (or they read the papers and see real estate is doing well) and they want to get into a deal with you.

Great!

So you all put something into the deal and you’re elected to manage it.

Oops.

Here’s where it starts to get sticky…

(Remember, we’re just radio guys, not lawyers…so check with your own attorney…or call Mauricio…before you take any action on anything you find on the internet, including this blog)

If you take money into a deal where you’re in control of the deal, even if you’re not offering shares of an entity like an LLC or corporation, you might be offering a “security”.  And when you offer a security, there’s a few important things you need to be aware of.

First, all the the risks that you can reasonably be aware of need to be disclosed.

Next, you want to be very careful about “blue sky” (as in “there’s all sunshine in the forecast”) and other “forward looking” statements.  It’s a fine line between saying what you HOPE will happen and making a PROMISE that something will happen.  You might know what you mean, but if it’s stated the wrong the way and things go sideways, a plaintiff’s attorney can twist those words into a liability producing commitment that you failed to meet.

Also, when you’re conducting business on behalf of an entity, it’s important to always follow proper corporate formalities.  If you say or sign something in your own name, without properly putting all parties on notice that you’re functioning in the role of manager or officer of an entity, then you may have inadvertently created “a hole” (our nickname for the lawyers of financial predators) in your corporate veil.

That means EVERYTHING you own is potentially at risk.  Yikes!

Are we trying to scare you away from syndication?  Certainly not!

But we are trying to scare you into being sure you’re smart about it.  Just like when you took driver’s training in high school and had to watch all the movies about nasty car crashes.

Syndication is something people do safely all the time, just like driving cars.  But like cars, it’s a big responsibility and one you should take seriously.

Once you get some experience, you can operate your syndication business with great speed and skill.

So if you’re new to syndication or want to get started, listen in to this episode as attorney Mauricio Rauld shares important things you need to know about how to practice safe syndication.

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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!

1/19/14: Creating Power Partnerships – Finding and Becoming the Right Partner

Real estate investing is a business that often attracts loners and mavericks.  Freedom from bosses and co-workers is often as much the motivation for going full-time as is making gobs of money.

But we’ve noticed that many of the most successful investors we’ve met usually end up in partnerships, whether they are temporary of permanent.

So we thought it would be good to talk about our experiences and observations when it comes to putting together powerful business partnerships.

Partnering up in the studio to produce this powerful episode of The Real Estate Guys™ radio show:

  • Your howdy partner host, Robert Helms
  • His hoe-down co-host, Russell Gray

Power could be described as the ability to create motion.  Planes, trains and automobiles are powerful.  So are rockets, tanks and bulldozers.

People and animals can be powerful too.  Think about a strong man who can move heavy weights, or a big plow horse tearing up fallow ground.

But people are unique when it comes to power.  It’s more than brute force.  Sometimes people are powerful because they can make things happen through persuasion, planning or effective decision making.  These skills put other people in motion.  It’s why a CEO or national leader is powerful.

So when it comes to real estate investing…and really business in general…the ability to get things done with and through other people is powerful.  But sometimes it’s overwhelming or beyond the scope of one’s personal skills or resources.

That’s where having partners comes in.  The right partners can bring critical skills, perspectives, relationships and resources to any endeavor.

But the wrong partners can bring strife, distraction, confusion and chaos.  If you’ve ever been in or around a bad partnership, you know how awful it can be.  There’s still energy, it’s just not positive, organized and focused forward.

The same power that can launch a rocket into space can blow up a city block.  The difference is focus and control.  Ditto for a trained and harnessed horse or a bucking bronco.

So how do you make sure you get into positive, effective partnerships?

First, it’s important to have an alignment of mission, vision and values.  It sounds trite, but it’s not.

Your mission, vision and values are your guidance system.  They keep you focused and channeling your energy towards specific outcomes.

So it’s important when considering a partnership to spend time first just getting to know YOURSELF.  Then into having an HONEST conversation with your prospective partner.  Be careful to stay true to your MVV no matter how attractive the partner is.  No amount of money is worth hating who you look at it in the mirror every day when your brush your teeth.  There are lots of people in the world.  Take the time to find partners who share your MVV.

Next, you have to make sure you TRUST your partner and vice versa.  Keep in mind that trust is a two-sided coin.

One side of trust is ethics.  It’s critical that your partner is trustworthy.  Not perfect.  God didn’t make any perfect people.  But transparent enough that you know who and what you’re dealing with. You need to know that you’re partner is the same even when you’re not looking.  And that he or she has your back when things go sideways (as they always do).

The flip side of the coin is competency.  It’s great to have an honest, transparent partner.  But if he’s incompetent, then he’ll feel bad when he blows it.  But he’ll still do damage.

Conversely, a skillful, but unethical partner, will surgically separate you from your money…and maybe your relationships and reputation.

So make sure your partners are both ethical AND competent.

It’s also really important to play a fun game of “what if” with your prospective partner.  As in, “what if this or that happens?”.   While it isn’t possible to anticipate all the variables, it’s worth talking about how you’ll handle things when there are disagreements or unintended outcomes.

When you get to deciding how to put the deal together, try to be clear about what needs to be done, who’s going to do it, and how all the compensation will be handled.  Simply going through this process can often flush out potential problems way before there’s real risk involved.

If your prospective partner doesn’t value you or your contribution fairly, or isn’t willing to take on their fair share of risk and responsibility, you may want to think long and hard about that partnership.  If you’re already feeling it’s not fair in the planning stages, how will you feel when you have real blood, sweat, tears and cash going out?  Resentment will be your constant companion and that can kill the positive energy you need to be effective.

When you finally get through all the dating and you think it’s a match, then take the time to document the major deal points in an MOU (Memorandum of Understanding).  Some people think it’s an old-school badge of honor to do a handshake deal.  We think it’s better to get few bullet points down and make it clear about your Mission, Vision, Values; who’s contributing what and roles and responsibilities; how money will be handled and how decisions will be made.  And very importantly, how disagreements will get settled.

Usually (and remember, we’re just talk show hosts, not lawyers), you’ll want to form a legal entity.  Your tax and legal advisors can walk you through all of that, but your aforementioned MOU will help them create your entity’s Operating Agreement or By-Laws.  Having done the work up front with save you a TON in legal bills.

Sound like a lot of work?  It is.  But a few pounds of hard work on the front end can save you several tons of pain later.  It’s like the old carpenter’s adage: measure twice, cut once.  Like failed marriages, business divorces can be ugly and expensive.  They’re to be avoided.

Here’s the good news.  A great partnership can be worth a lot more than your partner’s weight in gold.  Even if he or she is chubby.

So how do you attract a great partner?  By being a good partner.  Be the kind of person a powerful partner would want to work with.  Work hard. Be honest.  Develop skills and valuable relationships.  Be attentive not only to your own needs, but the needs of others.

It’s really no different than in any kind of relationship.  And the right partner won’t expect you to be perfect.  Keep that in mind when you’re looking for and working with a partner.

People are package deals.  If you want all the good stuff, you’re probably going to have to accept some stuff that bugs you.  Just make sure those things aren’t deal breakers for you.

The best news is that when you get good at putting together power partnerships, you’ll find yourself doing more better, bigger and faster than you ever dreamed.  And you’ll find that your slice of a partnership pie is probably a lot bigger and better tasting than the tiny pie you would have if you went it alone.

So tune into this episode and discover how you can create power partnerships to do more faster!

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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!

1/12/14: Booms, Busts and Bubbles – Watching Market Cycles

As market mariners, we’re always watching the financial waves to know which way the wind is blowing and whether a swell is headed our way.

After discovering the painful price of myopia in 2008, we’re not only diligently watching the horizon, but we spend a lot more time talking to smart people from a variety of financial disciplines.  In fact, we talk to a really smart guy in this episode!

If you recall, there was a big wave of money that rolled into the stock market in the 90’s.  A big chunk was the savings of the baby boomers who were in the height of their asset building years.

Another big chunk came from the Fed as it provided the marketplace lots of liquidity (sound familiar?) to head off the Y2K “crisis” (remember that?).

Of course, before long the stock market…and especially the tech sector…was booming!

Eventually, the tech stock boom busted, and right on its heels came 9/11, and so the Fed pumped even MORE liquidity into the system.  But this time, investors who’d been burned by stocks, took all that cheap money and jumped into real estate indirectly (through mortgage backed securities) or directly (through individual properties).

Then…ka-BOOM…the MBS market imploded, real estate tanked, banks failed, and we had a crash of EPIC proportions.  In response, the Fed…you’ll never guess…pumped even MORE liquidity into the system.  And guess what?  Today, the stock market is at all time highs.

We’re detesting…er, detecting a pattern here.

So we want to know if the stock market is vulnerable to a crash.   And what can the stock market tell us about the future of real estate?

Since we’re not stock market experts (we can barely read the charts at the optometrist), we thought we’d call in someone who spends most of their time studying such things.

In the studio on location in sunny San Diego, which (contrary to Ron Burgundy’s dictionary) does not refer to a female whale’s anatomy:

  • The Captain of your broadcast boat, host Robert Helms
  • His First Mate (in a purely platonic way), co-host Russell Gray
  • Our stow-away guest from Dow Theory Letters, Matt Kerkhoff

In stock trading, and really any kind of trading, there are two kinds of analysis: fundamental and technical.  Another way to think of them are: logical and emotional.  One is about the business.  The other about the market.

With fundamental analysis, an investor looks at the company’s financial performance, competitive risks, sector dynamics, vulnerabilities, opportunities, the management team, etc.  In other words, it’s a LOGICAL assessment of the BUSINESS.

This is the way most real estate investors analyze properties.  Why?  Because most real estate investors are making LONG TERM investments.  Ditto for stock investors.

Traders, as opposed to investors, are usually looking to move in and out of positions quickly hoping to scrape a few basis points of profit out of each trade.  To do this, they try to exploit the irrational nature of market participants.

In other words, people aren’t always logical when making investments (ya think?).  Sometimes they get greedy and overpay.  Sometimes they get scared and sell too cheap.  And in today’s technologically driven world, some trading is done automatically by computers.

Big players have figured out they can trick the computers into buying or selling if prices can be pushed up or down temporarily.

Trading is not for the faint of heart.  Ironically, successful traders control their emotions and use logical analysis of the market’s emotional indicators to place their bets.  This reading of the moods of the market is called technical analysis.

One of the main tools of the trader are technical charts.  These charts show the ups and downs, trading volumes and “patterns”.  The patterns measure the predictable responses of market participants to various trading feedback (support, resistance, averages, etc.).

On our upcoming Investor Summit at Sea™, Rich Dad Paper Asset Advisor Andy Tanner will be helping us understand all of this and how it relates to real estate investing.

The point is that technical analysis doesn’t really consider the fundamentals.  So while fundamental analysis is about understanding the business issuing the stock, technical analysis is about understanding the market…that is, the PEOPLE trading the stock.  And there are both long term and short term patterns of behavior.

As any mortgage pro can tell you, when the stock market is up, so are interest rates.  When the stock market is down, interest rates drop.  As real estate investors using mortgages to control property and arbitrage cash flows, we care about interest rates.

Now you may be thinking, “If it’s true that interest rates rise when stocks do, then why are interest rates so low, while the stock market is so high?”

What a GREAT question.  We have such smart listeners.

So put a new battery in your thinking cap, and let’s take a moment to get our mind around this important concept.  Because when a market isn’t behaving is it should, it tells you that something might be amiss.  And if miss it, it can sneak up and bite you.

Here’s deal in simple terms:  When people sell stocks (equities), it’s because they are afraid of risk.  So they want to move to the front of the line (debt eats before equity) and buy debt (bonds).  Creditors (bond holders) get paid before equity (stock holders).  Are you with us so far?

Now, when more people sell something the price goes down.  So as people leave the stock market (sell), stock prices drop.  Conversely, when people enter the bond market (buy), bond prices rise.  Make sense?

Here’s the hardest part to track with.  So take a deep breath and we’ll do this together…

When bond prices go UP, bond yields (interest rates) go down.  Here’s why:  If you have a bond, it’s like a certificate of deposit…you loan your money to the bank, and they give you a promise to pay you back with interest.  Simple, right?

But with a bank CD, everything stays static because no one is trading the CD (that you can see).  So if you buy a $100,000 CD and it pays you 5% interest (good luck finding that, but it keeps the math simple), you get $5,000 per year in interest for loaning the money to the bank. Got it?

But what if you wanted to sell your CD to a private investor?

If the investor wanted to buy your CD and get 5%, he’d pay you $100,000.  But what if the investor wanted 10% yield on his investment?  Then, he’d only be willing to pay you $50,000.  Why?  Because the bank is only committed to pay $5,000 per year on the CD.

And if the investor (your buyer) insists on a 10% return on his money (he doesn’t care about yours) and he’s buying $5,000 a year in interest, he can only pay $50,000 for it because $50,000 x 10% is $5,000.  See?

bonds and yields have an inverse relationshipThis is an overly simplistic explanation of the inverse relationship between bond prices and bond yields, but it gives you the basic concept.

When bonds get bid DOWN (pay less for the same yield), yields (cash on cash return) go UP (as explained in our CD example). And the reverse is true (as we’ll show you in a moment).

Once you get it, you’ll go “duh”.  Until then, it’s a head-scratcher.

But it’s a very important principle…and based on the way people are piling into bonds even when yields (interest rates) have no where to go but up, we can tell many investors don’t get it.

So back to the stock and bond market…

When people get afraid and sell their stocks to buy bonds, the price of stocks falls (more sellers than buyers), while the price of bonds rises (more buyers than sellers), so interest rates go down as bond prices go up.  Huh?

It’s like this:  In the prior scenario, no one wanted your CD for $100,000.  You had to sell it at $50,000 to get the buyer because the market demanded a 10% yield.  But what if people were really scared, so they wanted the safety of the CD even if they have to pay MORE?  Remember, when you pay more ($) you get less (%).

Now, if someone were to offer you $200,000 for your $100,000 CD (you’d be happy!), and the CD paid $5,000 per year, what yield is your buyer willing to settle for?  Half what you’re getting.  So if you’re getting 5%, your buyer is only getting 2.5%.  Let’s check the math…

$200,000 invested / $5,000 annual yield = 2.5% rate of return.  Hey!  It worked!

Now with this basic understanding, why would interest rates be so low while stocks are so high? 

It seems that people are putting money into the stock market (bidding it up), but somebody is also buying bonds to keep them up too (bonds up means interest rates down).  Weird.

There are a couple of things going in, all of which are abnormal, and would be described as “distortions” by David Stockman, in his NY Times best-seller, The Great Deformation. (This and other great books on economics and investing can be found in The Real Estate GuysRecommended Reading Store.)

First, the Fed has been buying bonds like crazy through their Quantitative Easing program.  This artificially bids up bonds and pushes interest rates down,which is why they do it.  But all this extra bond buying is abnormal and distorts the market.  History says, QE leads to booms, bubbles and ultimately, a bust.

Also, you may have heard that many businesses have been borrowing at these low interest rates in order buy back their own stock.  This is also abnormal and drives up stock prices with money that would otherwise go into expanding the business.  No surprise then that stocks are going up, while employment and productivity aren’t.  Again….weird.  Usually, rising stock prices reflect a healthy and growing business climate.

Third, yield starved conservative investors and savers have been forced to buy stocks and accept substantial market risk…risks they normally wouldn’t take.  When people start putting money in places they wouldn’t, they’re prone to move it quickly if things look dicey.

All of these obvious distortions, and a whole host of lesser and sometimes unseen and unanticipated abnormalities, cause market emotions to run high.

There’s one group of people who are giddy with greed and pouring into stocks believing the party will last forever.  There’s another group of people who are reluctant participants and have their running shoes on and one eye on the exit.

Most people in the paper asset space don’t really know how to do real estate, nor do they want to.  It’s messy.  There isn’t all kinds of infrastructure to support stay at home real estate investing, they way there is with paper assets.  The closest thing are REITS (Real Estate Investment Trusts that are publicly traded).

But in deformed markets, people do things they wouldn’t normally do, in order to earn profits and/or avoid risks.

So, since you’ve read all the way down this lengthy post, here’s the pay off:  There’s a HUGE OPPORTUNITY for real estate investors to attract capital from frustrated investors trying to find a good yield with reasonable risk.  If you develop the knowledge, experience and relationships to buy and manage income producing real estate in a market like this, there’s BILLIONS of dollars looking for a home (pun intended). 🙂

But to talk with affluent investors about investing with you, you’ll need to know how to both explain the benefits of real estate as well as the risks of paper assets.  So even though you may not be a stock investor, it’s a good idea to understand how the stock, bond, commodities and real estate markets all interact.  This episode can help!

And if you like Matt Kerkhoff, come spend a week with Matt, along with Andy Tanner, Peter Schiff, Anthem Blanchard, Ken McElroy and the rest of our outstanding faculty on the 12th annual Investor Summit at Sea!  Meanwhile, enjoy listening to us talk with Matt about Booms, Busts and Bubbles!

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!

How Google Glass Could Revolutionize Real Estate Sales

As Google Glass prepares to move from testing into production, real estate agents and app designers are excited about its potential to revolutionize home buying. Trulia announced an early app in June, and other real estate websites such as Zillow soon followed. Just as the Internet revolutionized home selling by helping buyers view listings and get estimates, Google Glass enhances this capability by adding a portable, hands-free view and interface. Basically, anything a smartphone or tablet can do for real estate buying, Google Glass can do potentially better. (Photo by tedeytan via Flickr)

Viewing Local Listings

Current apps support home shopping using smartphones and tablets. One app category naturally suited to Google Glass is GPS-guided local listing displays.

Say you want a home with a certain number of rooms at an approximate price within a set distance of a specific zip code or GPS location. Existing apps let you browse databases of websites such as ForRent.com for homes matching your criteria.

Google Glass combines this with a hands-free view. Imagine you’re physically standing in a neighborhood you want to move to and Google Glass uses your GPS coordinates to project a display of all suitable listings within a set number of blocks. Alternately, instead of physically traveling to the location, you could enter a desired geo-position and get a virtual view. A worker preparing to relocate from the United States to a company branch in Mexico or China could look at properties without leaving his current residence.

Virtual Walk-Throughs

Another natural fit for Google Glass is apps providing virtual property walk-throughs. Multimedia virtual tour technology has been around as long as the Internet, and has produced sophisticated software integrating photos, slideshows and videos with social media into a complete digital marketing package. To this equation, Google Glass potentially adds virtual walk-throughs with a hands-free view that more closely approximates live touring.

Picturing Yourself in Your New House

A creative app designer could take virtual walk-throughs a step further by integrating animation. High Fidelity co-founder Ryan Downe has demonstrated how Google Glass can control an animated avatar representing the user. Substituting photography for animation, this can let real estate agents provide home buyers the experience of watching themselves walk through their new home, much as car salespeople offer buyers test drives.

Visualizing Your Future Home

This application of Google Glass can be expanded even further by applying virtual home design software such as the type home improvement chain Lowe’s uses to let property owners visualize how they want to improve their homes before buying supplies. A Google Glass real estate app could elevate such software to allow buyers the ability to visualize how they might use an existing property or build on undeveloped land.

Hands-free Communication with Agents and Lenders

Another category of apps Google Glass can support is those that facilitate unified communication between buyers and agents, or lenders. Existing apps let agents keep in touch with buyers through email contact lists and instant message notifications on their smartphones. Google Glass can leverage the same communications tools in a hands-free environment.

Guest post contributed by Michael Blackmon – Michael started building apps when he was in college. His clients are mostly in the outdoor industry, so he can travel to all the beautiful places in America. Every time he writes off travel expenses on his taxes he snickers.