M. Nack’s Blog

Whether or not you realize it, as a licensed real estate agent, YOU are an entrepreneur. An excellent resource for entrepreneurs is Inc. Magazine. My latest copy just arrived in my mailbox.

 

The cover article is an interview of Jim Collins – author of Good To Great and Built To Last. What’s fascinating is that he is passionate about entrepreneurs and views those two books as being about entrepreneurship – even though the subject matter is huge, publicly traded companies.

 

The interview outlines some key evolutions through which entrepreneurship has progressed since 1979 – the year of Inc. Magazine’s first issue:

 

Entrepreneurship can learned:

Once perceived as a trait that one is born with, now it is understood that entrepreneurs can be taught, groomed and cultivated. Courses in business schools as well as an abundance of other resources – books, magazines, videos, mentor programs – attest to the truth that entrepreneurs are made, not born.

 

Entrepreneurship isn’t just for mavericks anymore:

The attitude in 1979 was that entrepreneurship was for mavericks. Entrepreneurs were crazy, creative people that weren’t quite normal. Today, not only are entrepreneurs socially acceptable, they are practically viewed as heroic!

 

Building a business used to be about building a better mousetrap:

Nowadays, entrepreneurship is about developing a better process. There are lots of better mousetraps and companies with a great process no longer focus on just one mousetrap – but keep adding more and more mousetraps as they come along. It is much more important today to create a better process that will produce MANY mousetraps over time.

 

Web 2.0 has created the phenomena of companies becoming movements:

According to Jim Collins, there are 3 stages to every business:

1.      Have a great idea.

2.      Build a business to implement that idea.

3.      Build a great company that can implement MANY great ideas.

However, some companies become something even bigger than themselves – they become a movement.

 

We all know it when we see it – customers that are raving product fans and tell all their friends about it. That is when a company becomes a movement.

 

So how do you go about creating “raving fans” for YOUR business?

 

1.      Your business is much bigger than you – and it is more than about “just making money”. You must think from your customer’s viewpoint – how can you best serve them? What do they need? How can you be of help?

2.      Determine who benefits most from what you are offering and identify a niche.

3.      You want to talk to your ideal prospect in THEIR language by creating an organic Unique Selling Proposition from the bottom up.

4.      Provide your ideal prospect with the valuable information they are looking for. This can be done quickly and for free if you utilize social media.

5.      Using social media tools such as Facebook or perhaps a blog, create a community. Create “excuses” for the members of your community to contact you directly.

6.      Once they “raise their hand” by communicating with you, move them to your private database. Continue strengthening your relationship with them by communicating to them as an “Insider”. Once your ideal prospect feels confident that you or the service you provide are “for real”, they will begin “spreading the word” for you and become your sales force!

 

Real estate has always been about the relationships. With focus and intention, today’s technological tools allows for faster community building. Be true to your vision to serve to the best of your professional ability; communicate that vision often. As sure as day follows night, you will find yourself at the center of a robust, business generating community of raving fans. 

For 3 quick tips on how to make YOUR business go viral, go to www.NewMarketLeaders.com and watch a free video now.

 

I had a conversation with my new teleseminar partners last night. We have been working really hard on a series of trainings on internet marketing and we’re really excited by the positive feedback we’re receiving. For an aging boomer such as myself to learn internet marketing strateiges - well, if I can do it…

Here’s the thing: no one adopts new strategies if the old ones are working. A quote from Abe Lincoln seems particularly pertinent to our current environment. (What a great nickname: “Honest Abe” - especially coming from Illinois - home of impeached governors.) He, of course, was talking about the Civil War and preserving the Union. Thank goodness Honest Abe realized he had to use a new strategy! 

    ”The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty. As our case is new, so we must think anew and act anew.”

That’s the position I find myself in: the lead generating strategies of the real estate boom are inadequate to the stormy present. I have been working REALLY hard for 2 years to generate the income I need to sustain myself. I’ve never been a stranger to hard work. But I would work and work and work and not generate adequate results. I finally came to the realization that I had hit a brick wall. Insanity is doing the same thing and expecting different results. If you’re in a hole, digging harder and faster will only get you in deeper.

Yes: doing calls, notes, pop-bys is a terrific way to connect with past clients. And it’s a spectacular way to incubate a lead (seems we get them 12-24 months out these days). And it’s not that our past clients don’t want to help. It’s just that they aren’t talking to anyone who is in a position to make a real estate decision. It was easy getting referrals when EVERYONE wanted to buy real estate - and as a consequence everyone wanted to sell. But the story is quite different these days.

Delving into these internet marketing strategies, I am beginning to realize that there IS an easier way!! It doesn’t have to be SO hard!! The way we did business in the “roaring 90’s” is inadequate for the stormy present. Just as “cold calling” was an awesome strategy for the 50’s and 60’s, “call, notes and pop-bys” was an amazing strategy for the 90’s. As our case is new, so we must think anew and act anew.

If you find yourself in a similar situation, find out what we’re doing on www.NewMarketLeaders.com. Come on in, the water is just fine!

“All Things With Exuberance!”
mary!

There is no question about it. We are a country in trouble. I don’t like giving Sarah Palin credit for much of anything - but her infamous interview with Katie Couric was right on point about one thing: it is all about job creation. Is Obama the new FDR? Is he going to put everyone back to work on WPA projects? Will Congress allow him to put us further into debt (or print more money) to make that bold move? Will we as a nation give them the authority to do so?

I was out showing property today. Every single property we looked at was in foreclosure - which has to do with the price point we were looking at. The final home we saw, the seller was still living there with his family. He pointed out the mold growing in his closets due to the need for a new roof, which he can’t afford. And why is this family in trouble? He lost his job and can’t find work. He had worked as a chef. He went from making $80,000/year to nada. No need to tell you about the restaurant industry and how it’s hurting.
  
And why were we looking at foreclosures? Because my buyer is afraid to over-spend. She lost $50,000 in the stock market before cashing in her mutual funds for T-Bills. Instead of $180,000, she now has $130,000. And she is afraid of losing her job at an architectural firm. No need to tell you about the real estate industry and all the affiliated industries that are tied to it.

Now take these stories and multiply them over and over and over and you have to know: it’s all about jobs.

For the majority of Americans.

But there is a bold reality that belongs to the elite few that dare. Gen X and Gen Y have already pointed the way. Dependence on Big Brother for job security is a notion that has been bankrupt for quite some time. And when you take an aging Baby Boomer like me, trying to find a job in these market conditions is not even an option. (I had a conversation with a head hunter about a month ago who informed me of that reality. There is such a thing as “too much experience”. Some political circles would call it “agism”.)

Necessity is the mother of invention. These are the times that demand we become creative, take responsibility for our own destinies, craft a bold new approach. The old strategies that worked 5-10 years ago are no longer effective. When the old strategies no longer work, we must look for new ones. I believe it was Einstein who said that insanity is doing the same things and expecting different results.

For me, this means exploring different options. Check out what I’m doing at: www.NewMarketLeaders.com

“All Things With Exuberance!”
mary! 

I was listening to a teleseminar last night on REO’s (bank owned real estate). The speaker, (who is an REO specialist and has been doing REO’s since 2000) cited a study done by Credit Suisse 1st quarter 2008 on foreclosure trends. In this study, they predict that 1 out of every 8 homes will end up in foreclosure in the next 5 years!

He went on to cite a pool of loans made by Washington Mutual made in July ‘07. Out of nearly 1800 loans, by Feb ‘08 - 7 months later - over 6% were 30 days delinquent, 4% were 60 days delinquent, 3-1/2% were 90 days delinquent, 12% were in foreclosure proceedings and 3-1/2% were already REO - meaning that the homeonwer never made a single payment on the loan! Nearly 30% of those loans are in trouble!

And are these “deadbeats”? The average credit score of these borrowers is 704. The average loan amount is $519,000. And are these 110% loans? NO!! The average loan to value on these loans is 77%!  The media’s perception that only inner-city, financially illiterate poor people are in trouble is a myth.

So what’s going on here? Because values have depreciated, the homeowner is unable to sell if they need to move (job transfer, divorce, death, marriage - you know, the things that people do in the process of living their lives.) They can’t refinance because they’re upside down - the loans they already have are more than the home is worth. In fact, the only thing they CAN do is walk away!

The speaker’s premise is that there IS a real estate boom - only it’s in REO’s!
 
So what are the implications for the average consumer? Well - as home sales go down, rentals go up. People need to live SOMEWHERE. For those that have cash to invest, now is the best time that I’ve seen in over 20 years to jump into the real estate investment game.

I’m sure that reading this, you are saying that prices MUST continue to drop. However, from my perspective - from being out pounding the pavement and kicking the bricks - it feels like we are already hovering very near the bottom. At least in the Chicago market. And this is all I do everyday:  eat, drink, breathe and sleep what’s going on in the industry. 

What I’m seeing is that - even in this market - when a property’s price hits ”the sweet spot” it is being sold in a matter of days. Why is that? How is that possible? Well, rents are rising - and in some areas they are rising dramatically! (A major shift from 3 years ago when landlords were desperate for renters.) If an investor is able to extract enough rent to cover expenses of ownership and realize a satisfactory ROI, then he’d be crazy NOT to buy.

This is not a market to do “flips” - or, as they say in the stock market, for the “momentum” investor. You must be prepared for a long term “buy and hold” position. Contact me if you want to look at some good candidates.

“All Things With Exuberance!”
mary!

Well, there isn’t a soul that I’ve spoken to that isn’t scared to death of what’s going on in the financial markets - as well they should be!!

For those who don’t panic and are prepared, there has never been a better time to fortify your financial fortress. Do you actually think for one minute that Barclays isn’t utterly ecstatic about the deal they made on purchasing Lehman Bros! This is the kind of market where fortunes are made or lost. It’s no time to run and hide. If you can keep your head about you while others all around you are losing theirs, you can truly lock in your future!

For sure, “cash is king” - and if you have access to cash, it’s how you are going to negotiate your best deals. If you can GET a mortgage, interest rates are at historic lows - 5-7/8% for 30 year fixed! For those for whom it is appropriate, now is the time to get rid of those adjustable and ”interest only” loans and lock in a fixed rate. It seems certain that interest rates aare going to climb. I’m guessing the window of opportunity on low interest rates closes Nov 4 - although with this week’s news, it may last a little longer.

It’s uncertain whether or not housing prices have yet hit bottom, but it seems fairly certain that we’re hovering there. The only way to know when the bottom is the bottom, of course, is when it no longer is. The only way to actually hit bottom is by just falling into it out of sheer luck. And, unlike stocks, real estate has real, inherent value. You can’t eat your stock certificate, but people will always need a place to live.

The past few months, I’ve been promoting a particularly unique investment opportunity to my clientele. The initial reaction has been “it seems too good to be true” and they back off from jumping onto it. But I have done my research and, like the Barclays purchase of Lehman Bros, this could be an opportunity to lock in your future wealth. Check it out at www.BuyersEquityFund.com and email my friend Marc@BuyersEquityFund.com to get all the info on it.

For those who own their home and want to pay off their mortgage in 1/2 the time, I have been promoting a very conservative mortgage acceleration program (No - this is NOT another MLM scheme) that my friend Neil@EquityExcel.com has available. You can check out the details on THAT program at http://mnack.eqxl101.hop.clickbank.net.

One of my mantras has always been, if you’re not “running with the herd”  - if you’re doing the opposite of what everyone else is, you’re probably not too far off the mark.

“All Things With Exuberance!”
mary!

A VERY hot “deal” that everyone is jumping onto these days is pre-foreclosure properties - also known as a “SHORT SALE”. There are a ton of seminars, speakers, and classes on how to ‘do’ a short sale. Here’s a news flash:

The only people making money on short sales are the ones selling the seminars!

Here’s what happens: for whatever reason, the homeowner can’t make his mortgage payments anymore. Ultimately, the bank will foreclose - but that’s a long, drawn out process that can take up to a year. In the meantime, the homeowner retains control of the property and can sell it at anytime.

The catch is, the homeowner owes the bank more than the property is worth. So, the bank has to agree to take less than what’s owed them before you can actually close the sale.

Doesn’t sound so tough, right? Think again! The banks are horribly understaffed. You never speak to the same person twice - and anyone you DO speak to is basically on a par with the kid working the McDonald’s counter. The only difference is that they’ve graduated - high school. They have no decision-making authority and they don’t even really “get” what’s going on. You’re dealing with a “bureaucracy” in the absolute worst sense of the word.

The situation is compounded if there are second mortgages or IRS liens on the property. Each layer just doubles the complexity of the deal.

Many times when an owner gets into a financial bind (maybe they’ve lost their job or have a major health problem) - the first thing they do is tap the equity in their home. So even if they’ve owned the home for many years, they’ve taken all the money out of it.

The lending environment up (until about 12 months ago) often let them do it. They’re hoping that once they find a new job, get their health back - whatever - they’ll be able to get caught up on their payments and keep their home.

Sadly, it rarely happens. They’ve taken on so much debt and have gotten so far behind that they can never catch up. Usually, their only recourse is to give the home back to the banks and file bankruptcy.

(There are lots of things they can do to re-negotiate with the bank if they actually DO find a new job or get their health back. For details on that see my article “Rescuing Your Home From Foreclosure”.)

Thanks to our weird economy, there are a TON of these out there. And there’s more of them everyday. A lot of them are “investors” that should have been afraid to buy 3-5 years ago who went ahead and bought anyway.

The point is you can easily spend 90 - 120 - maybe even 150 days! You handhold your offer all the way through the process (and trust me, the process is about as much fun as having a root canal) only to have it all blow up in your face. And for reasons that make absolutely no sense whatsoever. 

Trust me - you don’t want anything to do with a short sale!

A number of years ago, a movie came out called “Global Thermonuclear War Games”. The Big Computer (incorrectly) senses a nuclear threat to the US and prepares to launch nuclear missiles at Russia and start WWIII. No one can prevent what’s happening until they teach the computer that the only way to win the game is by not playing it in the first place. 

Maybe 3-5 years ago, short sales were a good opportunity. But no more…

For helpful hints on real estate investing, visit my website at www.mnack.com.
mary!

Over the past 5 years or so, I have noodled around with different notions on how to help my clients invest shrewdly yet prudently in real estate. Believe it or not, when the market was so hot, it was difficult to find a “good deal”. Apartment buildings were just ridiculous expensive. The prices at which they were selling had no basis in the amount of rents they were getting. That’s because condo developers seemed willing to buy them at any price. Yeah, the condo market was blistering. Even so, I don’t know how those guys made money. You know - the old “supply and demand” thing. Demand was high, but there was plenty of supply (as we now know). I suspect a lot of them lost their shirts - or maybe just their lenders did, since they probably financed 110% of the project and had themselves personally protected behind their “corporate veils”. But that’s another story for another day.

I have never wanted to be responsible for putting my clients into an investment that didn’t accomplish their goals. The idea, after all, is to not just sell them one property but many. That can only happen if they are successful in achieving their goals. With the down-turn in the economy, the deals are much easier to find. Yes, financing is harder to get - but cash is always king.

I have always maintained that if you’re going in the opposite direction of the herd, you’ll probably do just fine. People are afraid to jump into the market now - when they SHOULD have been afraid 2-3-5 years ago!! NOW they should be buying as much property as they can!! Prices (in Chicago) have rolled back at least to 2004 levels. With the Fannie Mae/Freddie Mac bail-out, interest rates may be coming down even lower. As I’ve already said, it’s an inverse formula: a 1% INcrease in interest rates translates into a 10% DEcrease in pricing to offset that increase. Vice versa - if rates come down another 1/2%, a purchaser can easily absorb a 5% price increase. Even if we aren’t at yet at the bottom of prices falling, it gives you plenty of buffer. The general consensus is that prices may drop another 1or 2%. Certainly not 5 or 10%!

I’m thinking we have about a 60 day window before interest rates start to climb. That window starts to close on election day.

To help my clients take advantage of current market conditions, I am instituting an “Income For Life” investment program. I will coach my clients all the way through from purchase to sale to assure their success. I am partnering with other financial service providers to create education forums in general financial literacy as well as specific real estate investing education. (We launch our first program on Thurs even, Oct 2. “News at 11″.) I’ve always loved “Rich Dad’s” materials.  However, when you put the book down, you don’t know where to begin or what to do. I want to remedy that. I want to move my clients from the theoretical to the practical achievement of their goals.

My current client base will serve as my “guinea pigs” as we refine the pieces of the program. And as such they will receive my services free. Once we have the kinks worked out, that will no longer be true. This is a program that can literally transform your life and be worth hundreds of thousands of dollars in passive income! If what I’m saying makes sense and you want to participate, I urge you contact me today!

“All Things With Exuberance!”
mary!

It is difficult to find any bright spots in the economic news these days. How does that Rudyard Kipling poem go? “If you can keep your head when all about you are losing theirs…” For those who don’t panic and are prepared, there has never been a better time to fortify your financial fortress. Interest rates are still at historic lows. Now is the time to lock in those fixed rate mortgages. It seems certain that interest rates can only climb. And, even though housing prices may not have yet hit bottom, it also seems certain that we’re hovering there. The only way to know when the bottom is the bottom, of course, is when it no longer is.

There is no such thing as a national real estate market, just as there is no such thing as a national weather forecast. According to the Case-Schiller index, home values in Chicago have “only” dropped 10% from May ‘07 to May ‘08. (Las Vegas and Florida are the hardest hit with nearly a 30% drop!) In some areas (Ravenswood Manor springs to mind), values have held steady if not climbed. The first rule of real estate remains: location, location, location.

Many buyers are afraid to jump into the market for fear of over-paying. But it is not a strategy well thought-out. If prices continue to fall, it is not probable they will fall as much as another 10% (at least not in Chicago!). Yet it seems certain that interest rates can only go higher. For every 1% increase in interest rates, prices must decline approximately 10% to offset the increase in payments. So waiting for prices to drop another 1% or 2% is a false “economy”.  It only ends up costing you more! For those who can “keep their head”, it’s a great time to buy!

“All Things With Exuberance!”
mary!