"Finally!! Someone Who Gets it..."

Normally I ignore what mass (general) media has to say about real estate and real estate investing. When times are good they are too optimistic, and when times are normal, they are too pessimistic and when times are bad, they tend to say "nothing".

In addition, many reporters who cover real estate have little to no training on the subject. in general, they never went to business school, they never attended a single REIA meeting, they have never purchased an investment property, and most do not even own their own home - so who in the world made them the "EXPERT"???

Yes, there are exceptions to this "blanket condemnation", Jan Fox of Washington DC's WUSA-NEWS Channel 9 has been seen around town rehabbing houses and doing condo conversions, she's very sharp.

But for the most part, the general media consistently gets it WRONG when it comes to real estate, and real estate investing.

HOWEVER, the most recent copy of FORTUNE magazine has a cover story on real estate, in fact, it is called REAL ESTATE SURVIVAL GUIDE - SPECIAL 2006, "dun na na..." and I have to admit, I think they got it RIGHT!!

Specifically, the two stories by Shawn Tully (stully@fortunemail.com) and Ellen Florian Kratz are dead on correct. I particularly like the fact that Shawn highlights how important real estate has been to the overall economy because over the past several years people have been refinancing and pulling the equity out of their homes to buy stuff and keep the economy moving along. Any change in this factor could send chills not only through the real estate markets, but through the economy as a whole.

Hopefully, Chairman Bernake (http://www.federalreserve.gov/bios/) and the other members of the Federal Reserve are in sync with Shawn's comments and understand the dicey game that they play when they drive up interest rates too high in the hopes of "keeping inflation in check".

As an investor, I would be very excited about what FORTUNE and Tully and Kratz have to say. With more and more home owners "Spooked" about the real estate market in general, investors using "traditional" creative strategies such as Lease/Options and Subject-2 are going to have a Heck of a GOOD YEAR, as will wholesalers who "troll the MLS" for deals...

While on the other hand, Tully's words of caution for SPECULATORS need to be taken to heart: "...speculators who bought overpriced condos in hope of a quick killing are going to get hosed". He is 100% correct!! The same is true of Rehabbers and "Flippers" who bought based on "tomorrow's prices", which failed to materialize and "investors" doing Pre-construction deals in markets which are either over-built, or have poor job growth prospects.

Looking back on 2006, 18 months from now we will all be talking about real estate investing in terms of "The Worst of Times - The Best of Times", depending upon which real estate strategy you are using today. Reading this week's FORTUNE articles will assist in making sure you are on the "right side" of that discussion...

"Every Captain Knows, You Turn Into a Tidal Wave To Survive It..."

My wife and I went to see the new Poseidon (Adventure), and while the movie was quite lame, (o.k. it was not as good as the original and I'll leave it at that) it did point up a very important tactic for boats and for investors...

... You turn into a tidal wave. The reason the boat capsized is because the wave hit it on its side. Many years, grey hairs and pounds ago I use to crew, as in row. Crew boats are very stiff and sturdy, but they are also very light. Often times going down the Potomac, a ship would pass by and create a huge wake. If possible, you would put your oars out and simply buoy up and down with the wave. But when ever possible, the best strategy was to ride full force into the wave.

The real estate markets (across the country) are changing. In some cases, the market is just catching its breath, but in many cases it is a pause before the tidal wave comes crashing down, and if you are in a market that is about to come crashing down, you better start turning that boat into the wave and rowing like crazy.

Specifically, now more than ever you need to pay attention and respect to the fundamentals, like using MAO to calculate offers, and more importantly learning to use creative strategies at acquisition that will carry you through the coming changes to most markets.

Now is not a smart time to be paying "top dollar" and using "expensive money". If you are in the middle of a rehab project - get it done, and get it done in such a way that you are going to be the "best value" in the market, not attempting to set new high price records. If you are in the process of acquiring properties, think of ways you can purchase and get in "lite" as in with little to none of your money.

And if you really want to take advantage of the coming change, learn everything you can about foreclosures and short sales.

Historically, foreclosures in this country have hovered around 1% to 1.25%. In the state of Ohio alone, foreclosures have already surpassed 3%, and many parts of the country are about to follow. Most interesting is that the economy in most parts of the country is still "solid", so in most cases, the issue is not jobs, its interest rate (hikes) and too many properties on the market. The "too many properties on the market" issue will take care of itself - interest rates are a different story.

In future blog posts I'll talk about why foreclosures will skyrocket this year, but for now know this...

... A tidal wave is coming, start turning the boat - hard!

"Where I'd (probably) Be Without My Mom..."

Almost every successful person I know believes their mom to be special.

I know my mom is.

Many of you have heard my story of how when I graduated from high school and headed off to college a number of my friends got trips to Europe, or cars, or fancy stereos. My mom gave me a book. It was called the "Magic of Thinking Big" by David Schwartz. I got the better end of that deal.

My mom has always been my biggest fan and cheerleader, and most importantly, my biggest source of inspiration down the road of entrepreneurship. Even the name of my company "Tradewinds" was picked by my mom (one day I'll share the abysmal name I picked and the story behind all this).

There were a number of "magical" moments growing up with my mom, including her saving the day on many a paper and project by staying up with me long past midnight to "get it done" in time to hand in at 8:00 AM. I suppose this is where I get my "night owl" work habits. Not necessarily because of procrastination (although that was a factor), but because of the fun my mom and I had putting the thing together while "getting it done".

As real estate investors we often times say we do it because of the freedom it affords us. I think a main reason I do not work on Mondays is so I can have an entire day to spend with our youngest child - I get this from my mom. One year my mom pulled my older sister and me out of public school and home schooled us, I still remember that year as being the single best year of my life, and the greatest year of learning I have ever had.

As a parent, the most important thing we can give our children is our time. One of the reasons I fight to not over commit to things outside my home. Being a "success" in business and a complete failure at home is being a failure.

Money comes and goes, the time you spend with those you love, particularly your children, lasts more than a lifetime. If G-d puts you in a place of opportunity to care for someone younger than you, don't waste it by letting the world or others be the major influence in their life. As parents, grandparents, aunts/uncles, or guardians of young ones, the seeds you plant will bear fruit for years to come both in the lives of your children and their children's children.

I have great faith in the future of my kids and their children, as long as I continue to remember to share with them what my mom taught me both in words and deeds...

...So, where would I be without the love and attention of my mom - I don't even want to think about it.

Thank you mom. I love you, very much.

Happy Mother's Day.