Why we’re in this mess of a Real Estate recession?
By · CommentsI’ve watched enough “ups and downs” and heard enough about the “7 year cycle” of Real Estate so that after the 1985 peak which dropped to a 1991 trough, I was expecting an Up cycle to 1998.However as we learned the overheated market with it’s many perks continued until 2005. We are now supposed to be at the trough again. Interesting article in the Sunday Globe yesterday about the “Commissioner of Employment” who sees huge job growth right around the corner! Lately we’re faced with a ton of unqualified Tenants trying to rent from us in one town while the City next door has Tenants competing for rentals. Very interesting!
While talking to Robbie about this and advertising and upgrading units we spoke about the beginning of this mess and she came up with the most insightful explanation I’ve heard yet:
Clinton and our local reps wanted the HomeOwnership to increase from 60% to 80% and in doing this: “They took “A” Tenants and turned them into “F” Homeowners!”
What do you think? Mike
HOT CALL, huh?
One of my best Tenants sounded a little upset on that message so I called right back, asked the details, looked up the purchase receipt for the refrigerator (30 months old unfortunately), then planned to see it the next day. This was the second refrigerator that had done this at his apartment in the past 5 years. The first was still working fine in my cellar, as a spare when we cook a lot for the Holidays or parties.
Seemed fine to me. Cold enough for ice. So I called my buddy Paul, THE Appliance guy. “I’m too busy. Put a half gallon of ice cream in the freezer and two quarts of milk in the refrigerator spread apart. Check it in a couple of days. Any problem and the milk should be bad.”
Couple of days later, the ice cream “Fenway fruity something” was solid and the milk smelled fresh. So I called Paul again who’s impossible to get unless you call three of his numbers, leave messages and just happen to run into him! “Only reason for this is the door was left open (check the leg adjustments to make sure it’s slightly pitched back to close by itself) or he had the steak jammed up against the defrost plate in the back.” It seems the sensor comes on to defrost that plate on a cycle and continues until it’s warm however with all that steak up against it, the defrost may have continued until it was all (steak and other frozen food) defrosted!
I called the Tenant, told him the Appliance guy had checked it out with only those two solutions. He admitted it probably was jammed against that plate but had thrown an impromptu party with his friends and the thawed steak. So no big deal. However I had better get to Paul with some Dunkin Donut gift cards and a little cash or I may not be able to track him down, the next time I need him!
Do you have a network of folks that are available to help you? Mike
this just went out to our email list
Hey Mike,
Excellent meeting last Tuesday here’s a quick summary:
Heidi at Sherwin Williams paint, Northeast Nursery fenescue (grass) and a discount card, Attorney Rick Connor will review your Tenancy, Roberta on Taxes (April 15), Gerry – “Danger that’s electricity that powers your Sump pump for that water. I’m glad to check it out for you!”
Paint – Heidi was glad to speak to us, reviewing the latest pallette for us here in the Northeast. She mentioned Sherwin has an online service that can take your digital photos and change the colors, so you (or your spouse) will see what works, she’ll be glad to walk you through it. She can be reached at the Salem, MA store 978-741-0173 We’re also invited to their Grand Opening Saturday April 10th where all their paint will be 40% off! Raffles and refreshments also. See you there, Mike
Landscaping – Northeast Nursery’s Tom Spence and Penny reviewed the three finalists photos with suggestions for upgrading the landscape! Tom also taught us the difference in the feniscues- Tri-rye, Kentucky blue, etc, how they’re blended to make a Fenway seed that’s fast growing for soil stabilization and durability. He also gave us some discount cards. If you’re a current member send me a quick email and we’ll get one to you.
Attorney Rick Connor spent most of his time on the Security Deposit which he’s found to be most Landlords problems! He’s willing to spend an hour with you to review your Tenant documents and make sure you have everything you need for a Massachusetts Legal Tenancy which is a lot easier now before you have a conflict. For only $49.00 (that’s a huge savings & cheap “insurance”)
Taxes – Did you know you are 10 times more likely to be audited by the IRS when you file an extension versus April 1 through the 15th? Roberta’s busy now but she’s willing to work late to get you filed! Her cell is 781-258-5216 Might as well get it done now!
Danger – “With all the clean-up from the 50 year record setting rains” Gerry the Electrician who was at our last meeting and can be reached on his cell 617-538-5002 “people sometimes forget how well electricity and water mix. There’s no sense taking a chance with your sump pumps not being grounded. I’m glad (as a licensed electrician with many years experience) to look at your electrical system, make a recommendation and even upgrade you with Ground fault outlets or GFCI circuit breakers. It’s just not worth taking a chance and no amount of water damage can compare with you getting hurt, a lot of people depend on you. You can give me a quick call 617-538-5002 and get this resolved now.” Gerry
See you at the next midmonth April 16 and Home Inspections at our main meeting April 27, 2010.
Mike Hurney, Director MassRealEstate.net
PO Box 307, Marblehead, MA 01945, 781-639-8616 Mike@MassRealEstate.net
Doer vs Thinker
By · CommentsThe “Doer” vs the “Thinker”
by Phil Pustejovsky, Rich Dad instructor March 19
There were really two different types of investors there; the “Doers” and the “Thinkers”. When I asked the Doer type how their investing was going, they would say things like, “It’s OK, just closed on our 3rd deal in two months, made a little over $60,000 but we really need to get our act together and start really making some money.” That’s what it sounds like when you are talking to a “Doer”. Then, the “Thinkers” would answer something like this, “I’ve been reading and gathering information the last couple years, just want to make sure I have a firm foundation before getting started.” The problem with perpetual “thinkers” is that they don’t realize that action is the only way to truly create correct thinking. It’s not until you start taking action that your thoughts will become focused on the correct direction. For example, how could you really know what a seller is going to ask you until you actually talk to one? The bottom line is that if you are a perpetual “thinker”, it’s time for you to start “doing” or else you risk staying in the exact same place as you are now.
Want to try some “Doing” March 30, 2010 at our main meeting? Mike
Enough rain for you folks?
By · CommentsAfter the second day with no clearing ahead, I checked the sump pumps in several of my rentals. The first had flooded when we bought it, so we dug up the floor (mostly clay) then put gravel, a vapor barrier, a 4″ piping network pitched to a low point sump receiver, a 6″ concrete slab and a sump pump. Worked great until two days ago when the back yard flooded. Partly because of our pump, the next door neighbor and of course the storm. Note to self – replumb the sump to the street in front so the town storm drains handle our sump when the groundwater rises.
You folks have any “horror stories” from that Nor’easter? Mike
Low flow toilets that leak? March 10, 2010
By · CommentsI’ve got an Eljer “Low Flow” toilet in my half bath and one of my apartments. They were installed around 2002 and a Tenant happened to notice his ran all the time (thank you). I then noticed the other ran often.
I then tried the flapper repair kits from Eljer, SealMaster, Korky and WalRich. And two Plumbers, to no avail. Incidentally to test a toilet, place a dye pellet in the tank behind/above the seat base and see if it leaks into the bowl. Or you can shut off the supply below the toilet and see if the tank empties on it’s own. Caution sometimes these shut-offs will leak so have a wrench to tighten the valve packing should it leak.
Click – Tom the Plumber
We then successfuly replaced both toilets with a Kohler and an American Standard (because one toilet is a different size – 10″ which is the distance from the closet hold down bolts to the wall. Most toilets are 12″).
Both leaking toilets will be in the back of my pick-up for another day or two and unless someone can give me Eljer’s address to send them back to they’ll head for the dump! Mike
If you haven’t heard about the changes to the Credit Card Industry, check out this Federal Reserve Board site, WOW!
Sit down, for these new Credit card rules click here only one page
Remember Our President, Barack Obama told the Card Companies last year to regulate themselves or he would and there seemed to be some animosity there?
I noticed this in a recent card statement. My rate had gone up from 4.9% to 17.9% (before the Feb 22 deadline). When I called they pleasantly agreed to go back to the 4.9% rate. When something doesn’t sound right you ask? I did -
Why wouldn’t anyone go back to the low rate?
The pleasant voice said, “….because then we’ll “FREEZE” your card.”
huh?
“You can’t use it until you pay off the current balance once we go to that old low rate.” Ugh, I’ve been hearing stories from my peers and on Yahoo like:
Credit card theft is down because lately when a thief actually steals your card the balance is so high they can’t put much on it.
Most IDentity theft is corporate like the inside job at LTX where an IT guy made off with millions of card users information.
But I forgot about the card thing. I did opt for the “FREEZE” then went to use another card until that balance is down, say next month.
However as a Mortgage guy Click here it occurred to me that not everyone has other cards, that this is just the first step, (cards can go to 27.9%). Ultimately this will wreak havoc with one of your Primary indexes that mortgage companies use to qualify you for the best rates the – DTI (Debt-to-Income ratio!
If you’re looking to refinance or get a Purchase mortgage check with your Mortgage Person before paying off debt or making large purchases. They can usually tell you what the impact will be, I can if you’re looking at mortgages in Massachusetts You can Click here
Good luck, Mike
PS You can try using cash for a while ($50 or $100 from your ATM). That thing you just have to have as an “impulsive buy” may not look so good if you’ve got to pay an additional 17.9 or 27.9%
Analyzing YOUR Market
By · CommentsWhen the shows come to town and the Pixie Dusters “teach” you strategies to make a quick $5,000./week in Real Estate, I resent the fact that they avoid the basics!
In my course “How to Become a Real Estate Investor in 12 Easy Lessons” you’ve got to MASTER an Area and the Values. Basic! If not, you miss the deal. Like the Prince in Cinderella! At least at first. Do you want to go through your whole area with that “Glass Slipper”, now knowing you had the opportunity of a lifetime right in front of you? I don’t think so. There’s no need to. Understand the Market and Values. You’ll know it when you see it and can act on it!
At our monthly meeting we analyzed Peabody, MA and found THE area that was moving. From the MLS I found in the last 30 days, 61 Single Family Listings. Average List Price $366,409. Average Sale Price $252,944. Average Market Time 89.16 days
I believe this data is misleading because it is a compilation I use of Active & Sold property which helps me with my Comparable sales. I also use the most recent 90 days.
But it did help me make a point of where to act.
Of the 9 actual sales 8 were in the $169k – $319 Bracket.
My point was that you would be prudent to buy/fix-up/sell in that price category once you knew the values! Especially since there’s almost no activity above that bracket. In addition to longer Market times and Carrying costs are higher.
Need a Partner to help with your Real Estate Investing? In this market a mistake, like overpaying, takes a long, long time to correct. I’m glad to work with you and Easily help you through “How to Become a Real Estate Investor in 12 Easy Lessons!” Mike@MassRealEstate.net
Marketing 101
By · CommentsI illustrated this at our last Main meeting.
Some of our MassRealEstate.net Members have asked me for a Marketing segment (I invite you to comment).
Here is an example of an Insurance Agent crying about slow/lost business that sent out 10,000 full size postcards (44cents each vs 31 for standard postcards). He only got 5 responses and no business. I should have walked (no run) away when his insurance quote for half my policies was $3,000 over the existing. And he wasn’t available to attend our meeting Tuesday because he was helping his wife pack for the trip to Florida the following Friday.
What am I saying?
Mistake #1 He spent 13 cents/each too much for oversized Postcards.
#2 One contact with 10,000 people is not nearly as effective as 2,000 people, 5 times each and you spread your costs out.
#3 As he presented me with his overpriced quote, he should have reviewed WHY it was higher than my existing policies and prices. Maybe I’m not covered for something important that he could have shown me. Maybe Apples for Apples he is lower? He’ll never know now!
#4 As Emeril Lagasse says “Life just doesn’t hand you things. You have to get out there and make things happen.” Want more business? Get out there and speak to people. Present at our meetings. “Why bother?” ain’t gonna help you!
Mike