Satori Alliance | Financial Counseling | Real Estate Investment Products | Financial Guidance Seminars

It has been my practice for the last 5+ years to do my best to advise and counsel real estate investors.  As market conditions have changed several times in that span, of course my advice has shifted as well.  My basic philosophy is Buy what you can afford while prices and rates are low, and this continues to be good advice.  After all:

• The number of people who need homes to live in is increasing
• The available supply of homes is finite and not expanding
• According to a US Census Bureau survey, home ownership is down nationwide (see details below)
• People who want to own remains constant
• The majority of buyers are first timers
• Affordability has drastically improved, while financing availability has deteriorated

If this is you, it is the perfect storm:

• You have at least $100,000 or as much as $2.5 million you want invested in real estate immediately
• You have a high tolerance for the risk of buying property across the country you have not and will never see
• You may or may not want to become a landlord, but a looking for fast turn-around and high ROI’s
• Owning 20 - 30 properties short term while they are sold does not frighten you
• You are an active investor who would hire a trusted adviser to oversee a 3-6 month project
• Recycling distressed property to return it to homeowners appeals to you
• Avoiding all complications by not securing financing appeals to you
• A portion of your investment capital can be at work for 3-5 years or longer

US Census Bureau Survey results:

“The homeownership rate declined in 2008 for the fourth straight year according to the Housing Vacancy Survey, conducted by the US Census Bureau in conjunction with the Current Population Survey.

The home ownership rate for 2008 was 67.8%, down from 68.1% in 2007.

By region, home ownership in 2008 was highest in the Midwest at 71.7%, followed by the South (69.9%), the Northeast (64.6%) and the West (63.0%).” - Home Ownership Rates

The major problem with these types of investments has not been investors who meet the milestones listed above, but the companies who secure the property have had 3 major drawbacks:

1. They could not acquire bulk REO or distress property below 60% of current value leaving insufficient margins for wholesalers or investors to implement a profitable exit strategy
2. They have not had a reliable or tested turn-key process that worked to dispose of the purchased property by their investors
3. They have not had a dependable relationship with suppliers to be able to acquire property on an ongoing basis at low discount prices.

Since the buyers are back in force and multiple offers on the lowest priced property is again common, there are now several companies with programs that have solved the 3 performance issues above.  But you won’t find them advertising or taking a high profile in any way.  They prefer to remain connected and committed to their long term, private referral sources, who seem to be able to supply them with all the business they need.

This is the best example “It’s not what you know but who”, and my strong advice is to protect those relationships that give you access to high ROI’s.

I heard it said at a sales meeting last night that people are downsizing in a way that takes them “Back to their roots” of family, close social gatherings, & needs type purchases instead of wants.  Further, that this is becoming a trend and a new way of life.

On the NBC Today Show a couple of days ago, there was a piece on the values of real estate.  One of the claims was that according to NAR (National Association of Realtors) the average home size desired now has dropped to a taste over 2,000 square feet, several hundred square fees less than just 1.5 years ago.

As I look around, I certainly do see examples of all this but how wide spread is it?  I am now working to build a larger consensus.

I’m working with an Intern who’s major is finance at a local university who put a 6 questions survey together to help answer the questions above in more detail.

Please take 5 minutes and answer these few questions; you may even win a prize for doing it.  Then after you do it, have others take it, he thinks we can get 1,000 responses in a very short while.  Right on Daniel!

The Financial Preferences Survey =  Click Here

Lets discuss your views too

Cheers. . .Danno

Ten Guaranteed Steps to living a life you love while Profiting From The Current Economic Conditions!

As we approach the end of yet another year, simple reflection makes a big difference in the quality of life.

 ONE

Take care of yourself - physically, mentally, & emotionally by taking care of those around you.  Surround yourself with positive energy and conversation.

TWO

Use the financial skills you’ve learned to budget, manage cash flow so you spend less than you earn, then save for reserves and your future.

THREE

Do not take yourself or your circumstances to seriously.  Live your life with the Mantra “This too shall pass” - Life happens in unavoidable cycles, expect it.

FOUR

Review all insurance and investments against your plan for their performance and make calculated sensible choices, not emotional, panic or fear driven reactions.

FIVE

Debt management - Acquire appreciating assets that generate income in excess of their cost - credit card balances paid in 30 days or don’t use them - Look for discounts to preserve cash then put that savings away.

SIX

Stay close to family & friends - every day make 5 people feel better after being with you than before - take the time to listen, then teach other how to feel as good as you do.

SEVEN

Be healthy - calories in, calories out.  Pay attention to your body when eating, not the emotional urge to eat.  Exercise to control fatigue, stress, and metabolism - Walk, talk, and breathe to reduce stress & eliminate illness - If you get flu shots, time to get them.

EIGHT

Keep a positive aspects or appreciation log, write in it several times daily.  You will discover you have a lot to be grateful for.

NINE

Without Integrity, nothing works.  Maintain a context for living your life that excites & empowers you and then every moment concentrate on living inside that framework.  Be whole and complete with yourself and others.  Do what you say by when you say you will - It makes all the difference.

TEN

Celebrate accomplishments both yours and others, large or small.  Teach and remind others to do the same.  Remember, an accomplishment is something you declare.  There are no rules, other than self imposed, for what an accomplishment is.

I know you’ve had this experience, we all have.  So let me share this heartbreak, a recent client experience, with you and then let’s see if we can make lemonade from lemons.

She walks in the house, slams the door crying heading for the kitchen where most conversations of importance begin or end.  “Well, that didn’t go well at all” she says reaching for a tissue to wipe away the tears from the pain and emotion.  “He just won’t listen to me, he won’t think outside his normal stubborn way of looking at us buying a home.”

She’s pregnant with their 2nd child and doesn’t yet know if it will be a brother or sister to their 21 month old son.  They live in an 1150 square foot patio home with two bedrooms and 1 bath, a nice enough neighborhood but too small for an expanding family, two dogs, a business and all the stuff they’ve saved over the years.  Their one car garage is filled with supplies, tools, and the belongings just mentioned.

He wanted to buy her their first home with a yard for the kids in a nice safe neighborhood and after considering the cost, the down payment, their qualifications, and his work, he just concluded that he is not ready to take this on the way he wants to do it.  This after 3 months of her looking at property to be able to recognize the right one when it came along.  This day it came along, and this day he got so scared and upset that she had to create some space to recover from the extreme fight they had.

Ok, what happened?  Always the best question to ask first to begin to sort out what’s next.  Lets look at 4 skills that will always produce a win win outcome.

INTEGRITY - We all understand that this at it’s most basic level is doing what you say you are going to do by the time you say you will do it.  It also include being responsible and accountable for the messes you make in life and then cleaning them up.  Integrity cannot be avoided and is the underlying assumption we all have as mature adults when dealing with anybody else.  But what about mistakes or when something happens - Yes, that too.  You are responsible for the life you live and it is created one moment at a time, one choice at a time.  To live a life of integrity takes rigorous discipline, self control, and determined actions.

EXISTENCE - This one is not so obvious but simple refers to structures in the present that keep something alive or going or on track.  Think “Existence Systems” or, considering life is a game, how do you know where you are, your progress, your accomplishments, your failures, what’s working or not, and how it’s going?  Life and all that’s possible live only in the conversations you create and speak in language, and just as it’s spoken, it then goes right out of existence until spoken again.  Budgets, profit and loss statements, and projects are examples of existence systems.

RELATIONSHIP - We are all related - period - the end!  Now assuming that’s true what do you do about or with this pillar of life?  The people in your life are all resources, that’s why you chose them, which you did.  I don’t believe life simply occurs in a random sequence of events with no purpose or order, we create it for ourselves moment by moment.  Your relationships with people become relevant when you know why you put them there.  They may be coaches for your game, owners of company’s who offer you work, affiliates for you business, or spouses with whom we want to share all the experiences of our life.  Are you good at relationships, that can be measured by how much you allow others to contribute to you.  Children are the best at being related, they give and accept without struggle or effort.

ENROLLMENT - This is the amazing ability we all have to pass on to another the passion, enthusiasm, and excitement of something we are committed to.  AND, we do this in a way that the person who is listening to us is so moved and inspired that they actually experience our passion and excitement.  I will go so far as to say that what you want in life is yours for the asking if you will only enroll enough people in that which you want.  The ethers of the universe will allign and product it for you, good or bad!

Back to our couple - This is an exercise best done by you for the sake of learning something for yourself.  Here’s a few questions to ask while you consider their situation:

1. Were they both playing the same game
2. Did they have a game plan and existence structure for winning the game
3. Who was being responsible for the outcome and how did it get to tears
4. Who was enrolling, who was enrolled and in what
5. How was the relationship used by him, by her
6. What can you see is the next most appropriate action for him, for her
7. What did you learn about yourself and what’s the next most empowering action you could take