We've Moved...

All Future (and past) posts Can Now Be Found at Our New Address:
http://www.TheRealinvestor.com

We've Moved...

All Future (and past) posts Can Now Be Found at Our New Address:
http://www.TheRealinvestor.com

An "Open Letter..."

There are many people out there who read this blog, or come to the real estate club meetings who think they "know my story".

Truthfully, most (that is those who bothered to research it, that is) know about 1/3 to 1/2 of "my story". That is the part that starts right before the events of 9/11, when I attended my very first National Real Estate investor conference in Atlanta in April of 2001, got my first deal done in June of 2001 and then had to make the grueling decision of "what do I do next" in September of 2001, when my aviation business went "tube-side".

There is another part of the story that begins well before 9/11, it is my "commercial real estate story", and it began in the Spring of 1984, when I had a chance to spend a day with a man named James W. Rouse, who directly influenced my career decision when I found out I had been admitted to graduate school (MBA Program) and decided then and there to pursue a "career" in real estate. That decision took me to Northern Virginia (by way of Stamford, CT) to become the #2 Employee at Lansdowne, VA (Xerox' multi-million dollar project on the Potomac River) and then to the Oliver Carr Co., where I had a chance to see up-close and personal how the richest people (at the time) in DC (no I wont name, names, but you can guess) became even richer by co-investing in commercial real estate in Downtown DC with someone who truly knew what he was doing (Oliver Carr and his sons). This opportunity was cut short with the severe down turn in the commercial real estate market in the late 1980's, but it ushered in my first opportunity to go from Employee ( "An E") to partner/business owner (a "B" in Robert Kiyosaki's world) and ultimately partner with one of the savviest real estate investors in the Northern Virginia/Washington, DC Region. A man named Marc Fried (FCI Companies), to whom I owe a tremendous debt of gratitude because he "bothered" to take me under his wing and share with me the wisdom it took him over 40 years to accumulate. At the time I was not ready to act on it, but the seeds had already been planted.

After stumbling around doing my own "entrepreneurial thing", including winning the rights to manage the private jet facility at Reagan/National Airport (DCA) and loosing a boatload of money on my own dot.com "bomb", in 2000, I was ready to hear what Mr. Fried and Mr. Carr and Mr. Rouse had long before attempted to teach me, which is best summed up in one sentence: "How to Get Rich In America, When No One Has Handed it To You!" And with those seeds, which were planted many years prior starting to spring to life, it was time to stop being an employee, and a consultant and a "spectator" and get into the game of real estate investing.

So, why do I know bother to share this with anyone who cares enough to read it?

True Confession Time.

I had actually planned on only sharing this information at next week's Conference, but in fairness to those who have sent me emails, or have called asking: "WHERE IS NEXT YEAR's CONFERENCE GOING TO BE - IF NOT IN BALTIMORE??"

The answer is - There is not going to be a conference next year.

At least, not one that I, or my team is responsible for putting together.

Please do not get me wrong. I love the event, and enjoy meeting with and talking to those who participate.
I also DO NOT believe the BOTTOM HAS DROPPED OUT of the real estate market and now is the time to RUSH INTO (or BACK INTO) the stock market.

FAR FROM IT.

The bottom line is that planning an event like the conference taking place next week takes a HUGE amount of resources, and patience and people. The planning started in March of this year.

At the same time, I HAVE NEVER SEEN A BETTER OPPORTUNITY FOR SERIOUS (MINDED) REAL ESTATE INVESTORS THAN NOW!

Again, if you have read my bio (http://www.WeGetThingsDone.com) you know the world I come out of with regards to my perspective on this real estate investing thing. Specifically, from 1993-1999 I watched a lot of people GET RICH BUYING INTO DISTRESSED REAL ESTATE SITUATIONS. A lot of people! From 1993-1995, we served as ASSET MANAGERS for the a Federal Agency call the RTC (Resolution Trust Corporation) - it was the Federal agency responsible for disposing of the assets from insolvent Savings and Loans. It achieved its purpose of "putting itself out of business" several years early by hiring companies like ours to "WORK OUT" bad loans. In effect, we sat across the table from the people who today are called SHORT SALE Negotiators. and during this period (1993-95) I watched people across the table from us get FILTHY STINKING RICH through their ability to negotiate us to the point that they could borrow money, even in a bad real estate market and then hold onto these positive cash-flowing properties until the markets recovered and in the process their holdings became worth 10-20 times what they acquired them for in less than 7 years. Stupid me, we then went from working for the RTC to doing the same thing (albeit on a bigger scale) with HUD, where we worked out several Billion (yes with a "B") dollars worth of loans for HUD's multifamily properties.

So, in the span of 6-7 years I watch guys like Barry Sternlich (Owner of Sheraton, Westin and "W" Hotels) buy a small portfolio of hotels with 100% borrowed money from the RTC, Joe Roberts (owner of several high profile office buildings in Downtown DC and Arlington, VA) go from Government Contractor to multi-millionaire and Gary Silversmith (owner of the Presidential Yacht Sequoa) go from government employee to real estate mogul specializing in turning around distressed "brown field" properties, as well as many others get stupid, stinking filthy rich. Something that, in my opinion, only happens when there are dramatic changes in a marketplace and those who can't hold on start dumping properties. This type of situation only happens every few years. It happened in the late 80's/early 90's, and it happened in the mid-70's and is the principal reason Donald Trump is a Billionaire today. Those who read the "Art of the Deal", or any of George Ross' books knows that Trump's very first deal was the turn-around of the financially distressed Commodore Hotel. Along with that deal he also negotiated (or more accurately, George Ross negotiated) the purchase of the PENN CENTRAL Rail yards. Today those rail yards are worth multiple billions of dollars, and of course, Trump put close to none of his own money up to acquire it.

I was not there to see how Trump did it, although I know the man who knows the whole story. But I was there to see Joe Roberts, and Gary Silversmith and Barry Sternlich take advantage of "Blips" in the marketplace, which brings me back to the purpose of this "Open Letter".

In short, I have not seen a buying opportunity for real estate investors RIGHT NOW, since the early 1990's, but this time, I AIN'T SITTING ON THE SIDELINES, OR HELPING OTHER WHILE MAKING PEANUTS!

So I come to the fork in the road:

Devote all the resources of our small enterprise for 2-3 months out of the year to coordinate and promote an event that will help others "get into the game" and hopefully make money -OR - Focus those same resources towards getting rich doing real estate for myself. What would you do...?

Don't want to appear "selfish", but the reality is that door of opportunity has now swung "wide-open" and will probably close as quickly. Please don't get me wrong, there is never a "bad time" to make money in real estate, but the opportunities to make "stupid money" like what is taking place now, tend to only come along avery 7-10 years. The last time real estate buying opportunities (particularly using OPM) looked this good, I was a "hired gun", but not ready to be a "player". Like many of you, I have children to clothe and feed and pay college tuition checks for. But I also have dreams of being a bigger player in this business and to make them come true you need a cooperating market, like the one that is shaping up right now.

I have really enjoyed being a part of this annual event and hope and pray for those who have come out in the past, that it was meaningful.

For those who are coming out next week - you have made the right choice. There has never been a better time to be in this business. The speakers and educators who are coming are coming for a reason. Bring cards, bring note pads, but most of all -"COME READY". As it was in the late 1990's, a bunch of folks are going to get the inside scoop on how to take advantage of a market in turmoil and go on to become very wealthy, while others (3-5 years from now) stand around going "What Happened??"

Sherman Ragland - Thank You For Reading...
p.s. - the end of the conference, does not mean the end of the blog. In fact, I will be sharing exactly what we do have planned for next year (and why) during my session on Day #2 - The A-Z Blueprint...

"Never Ceases to Amaze Me..."

As we get closer to next week's conference in Baltimore next week (http://www.TrumpStrategiesBaltimore.com) I continue to get a trickle of unsolicited emails from people telling me their reasons for NOT coming to the event this year.

The numbers are insignificant, but what is amazing to me is that they are unsolicited and the feebleness of the reasoning.

I have not problem putting this in the blog, because based on what I am reading, I know these folks are not readers of my blog.

There were three I received this week. Essentially they all said the same thing, which goes something like this: "the reason I'm not coming is because of all the emphasis on Prince George's County... I live in Fairfax and I don't see why there is so much emphasis on PG and Baltimore!" Duh, maybe its because in both these locations making money from real estate activities is like shooting fish in a barrel, provided you pay attention!

Pay attention as in read the blog posts and listen to the radio shows that talk about things economic data, job relocation and of course - transit. Both Prince George's and Baltimore City are severely under valued versus the rest of the region. I could take the next three months worth of blogs in telling the story "why". But "why" is no longer important, the more important story is that this is changing and changing rapidly.

Prince George's has more METRO stations than any other jurisdiction, other than the actual city of DC, and up until 12 months ago they were undeveloped with no serious plans for future development. Today, Prince George's still has more stations (save DC), and more planned, but almost everyone of them has either activity going, or starting within the next 18 months. And if you have paid attention to all the other METRO stations in the system, everyone of them has been a catalyst to strong economic development activity and price appreciation for investors - EVERYONE OF THEM.

Prince George's has (after two other strike outs) finally selected a Superintendent (excuse me CEO) of the Public School System who within 2 months on the job has already done more (positively) then his two predecessors, and by all indications will bring the system closer to par with Fairfax and Montgomery County over the next 5-7 years. And most importantly, the jobs are coming to Prince George's and Baltimore in huge numbers.

An increasing job base, an improving school and public safety record and a real commitment to improve public infrastructure in an under valued market smells like serious opportunity to me. But what do I know, I've only been in the DC area since 1968 and continue to be amazed that down the street from my parents "$28,000 house" in Wheaton they are now selling $700,000 "brownstones...

Clearly the people who wrote these emails came from folks who never bothered to listen to the interviews with the folks from Prince George's: http://audio.federalnewsradio.com/weekends/ritr/RITR_03_18_2006.wma?sidelines=1
-or- the two leading economists in the region Stephen Fuller and Anirban Basu http://audio.federalnewsradio.com/weekends/ritr/RITR_02_18_2006.wma?sidelines=1

The other email I got was equally "interesting". This person shared with me, again unsolicited, that he was going out of town to a 4-day event on making money in real estate in Florida. He lives 15 minutes from the hotel where this year's event is taking place. I fully expect to get a phone call in a few weeks asking how the event in Baltimore went, and more than likely another call six months from now asking "when the next in-town session will be...", so he can learn how to then apply what he learned about Florida real estate to opportunities 30 -45 minutes from his house.

I am quite confident he never saw my blog post about Acres of Diamonds, or my reference to this critically important short speech by H. Russell Conwell, the Founder of Temple University: http://www.americanrhetoric.com/speeches/rconwellacresofdiamonds.htm

I guess it's true what they say: "In the middle of a ocean of opportunity some folks will still not be able to find the water".

Sherman Ragland - Thank You For Reading...

"Sick..."

If you think you can stomach it:
http://www.realinvestors.com/content/view/283/35/



Sherman Ragland - Thank You For Reading*
* and watching...

"Worth Hearing Again..."

This afternoon I was preparing material for the upcoming Conference (http://www.TrumpStrategiesBaltimore.com) and needed to confirm some a comment made by one of my guests earlier this Summer on the radio show.

If you missed this one when it aired in July, all I can say is that her story is worth hearing again...

Note: if you cut and paste the link below into your browser, it will download a Real Audio or Windows Media File.
This is the Audio File from the July 22, 2006 Real Investor's Talk Radio Show.

http://audio.federalnewsradio.com/weekends/ritr/RITR_07_22_2006.wma?sidelines=1

ALTERNATE: You can also see the profile and click on the link to the show at:
http://www.realinvestors.com/content/blogsection/7/64/8/8/
And scroll down to the Show for July 22, 2006 and click on the link to listen from the site.

Sherman Ragland - Thanks for Reading...
... and Listening, too ;)

"The Strangest Secret..."

A survey was done of convicted pedophiles and sexual predators starting the with question: "What happened - how did you get here?" The common answer amongst the majority who would cooperate with the survey team would shock you!

The common theme was as follows: "One day I just thought about it, just a thought ...at first I was ashamed... soon the thought came back and I did not fight it ...then it became all I thought about..."

What is most disturbing about the mind of a deviant, is that it is not at all different from the mind of someone who is not. In fact, the part of the answer about, "it became all I thought about..." is exactly the same response given in a similar survey of Olympic Gold Medal Winners!

It is ture! Ultimately, WE ALL give into the things we think about. This is as true for things which are Beautiful and good as it is for the most dark and sinister acts in the world. And it is true of the hectic, unfocused mind that ultimately achieves nothing notable in life.

In his landmark motivational tape in 1956, Earl Nightingale described the secret to human motivation in a speech called, "The Strangest Secret". Because Nightingale was heading out of town on a trip, he paid to have his speech recorded on an LP record so it could be played to a small audience of insurance salesmen that he was responsible for training. This record became so popular amongst business people that it went on to win a GOLD RECORD, unheard of for recordings of a speech. It is the basis for all modern day motivational programs, and yet today so few people have ever heard of either Earl Nightingale, or his speech.

A few years ago I had the wonderful opportunity to speak with Earl's Widow. She shared with me that Earl Nightingale was born in Los Angeles, California in 1921 at the start of the Great Depression. By 1933, his father had left him, his mother and two brothers at a time when millions were unemployed and starving. Earl’s mother worked in a sewing factory to provide for her three sons, living in Tent City on the waterfront in Long Beach, California.

Diana went on to say that while being poor didn’t seem to bother most of the other kids, it bothered Earl, and he wanted to know why they were so poor, while others, he observed, appeared to be so rich. Why some people were so miserable, while others, so happy. Simply, "What made people turn out the way they do". Knowing the answer to this question was Earl's "Passion", and once he found the answer, it then became his life's work to share it for all who would listen and choose to act on the answer.

Earl's work can be summed up in once sentence: "We Become What We Think About!"

The mind does not have the ability to separate what we are from what we focus on.

Knowing this is both liberating and fear inspiring, for if we think focus on succeeding in a certain area of life, we will become successful at it. But the mind does not care if success is in areas that benefit ourselves and our families and the greater good, or if what we focus in is based in lust and addiction. THE MIND DOES NOT CARE. It moves towards what we tell it is important, and it knows what is important from what we put into it on a regular and consistent basis.

THEREFORE, if we truly want to be successful in anything, we must feed our mind information and inspiration on the tasks we seek to accomplish.

So, now let me ask a very revealing (if not painfully so) question: What is in your car stereo?? What is in your iPOD?? What is playing on your television?? What Will you be glancing at just before you go to bed tonight??

If it has nothing to do with real estate investing, then don't be surprised if six months from now, you are in the same place you said you "hated!" Anything, and everything in life have a price. Some you pay the price up front in a large sum, and some you pay for over time, and some (unfortunately) you do not even realize you are buying, until the bill shows up. Such as spending your every waking moment working for someone else, and doing nothing to move past that situation on "your time", then getting the pink slip, or worse, retiring and having to move in with your children and then wondering "where the time went" when you could still make a difference in the world and in your bank account. Now I realize that making a difference in the world and having money in the bank are not necessarily the same thing. But then again, please show me where the honor is in having to move in with your kids because you never planned for retirement and ran out of money? Bottom line: in the country and society we live in, it takes money to survive, it takes money to provide, and once you have it, if you decide to give it all away - that's your business!

More important than money is the time G-D gives you. You can spend it watching re-runs of "I Love Lucy", Gilligan's Island or Bernie Mac, or at the bar, or reading magazines that wont put a dime in your bank account. Or you can reorient your thinking and reorder your steps now knowing that what you feed your mind has a greater impact on what you achieve in life then who your mom and dad are.

If it is true, that "We Become What We Think About", then it is time we took control by changing our thinking. The best way to do this is to make the decision to put things into our head that will help us "GET AHEAD". We can do this by listening to information that will help us succeed rather than the "Oldies 101" stuff. As my mom use to say: "Smokey Robinson has his money, you have yours to get!"

Turn off the re-runs on TV and turn on the "Step-by-Step" DVD's.

Turn off the radio and put on the "21 Day's to..." CD's

Put away the novel and pull out the "How To..." books.

The reality is that you do not need an extra 24 hours in the week to become a successful investor, you simply need to take better advantage of the 24 given every day by making the decision to feed your mind good stuff instead of mental "junk food".

Sherman Ragland - Thank you for Reading...

p.s. If you would like to get a copy of Earl Nightingale's "Strangest Secret", drop me an email.

p.s.s. If you have not already signed-up, nearly all of the BUS TOUR seats are SOLD-OUT for this year's National Real Estate Investor's Conference Featuring: Donald Trump's Mentor of 30+ Years, Mr. George H. Ross. http://www.TrumpStrategiesBaltimore.com

The "Obvious Answers..."

No one said real estate investing was "easy". o.k., please let me rephrase this, no one other than a handful of midnight snake-oil salesmen on cable TV said real estate investing was "easy".

But the longer I am at this, the more I also realize that real estate investing does not need to be complicated. In fact, one of the real beauties of real estate versus any other type of investing is that real estate is very predictable. I can honestly say this is not true of the stock market, or the commodities market, or gold, oil futures or beanie babies.

But there are some simple rules of thumb that impact real estate, and the more time you dedicate to studying this business, the more "Obvious" the answers become...

Obvious Answer #1: If interest rates are heading down, the ownership of single family houses becomes more attractive to more people. If interest rates are heading up, the less attractive ownership of single family houses. HOWEVER, everyone who has a job, must have someplace to live. Therefore, if people are not leaving the country, then when interest rates go up, fewer people will be able to buy and therefore will be forced to rent. If you believe that interest rates going up is a trend, then you probably want to consider using one of the ten (11 if you are in Maryland) strategies discussed in earlier blog posts that emphasize "mid-term to long-term" ownership of real estate, rather than strategies that require that you sell to end user home buyers;

Obvious Answer #2: Housing Follows Jobs.
All things being equal, most people would prefer to live within a 35-45 minute commute of their job. If the wages are high and the work "meaningful", this might go to 45-50 minutes. The shorter the commute time in most cases the better. On the coasts, if the transportation system is good, then mass transit is just as good as getting into a car in terms of the work-job time line, however, most people prefer driving and driving alone - if they can get away with it. Therefore, find a good (solid), growing job market and you will automatically find a good real estate market. The more volatile the job market, the more volatile the real estate market, the more stable the job market, the more stable the real estate market. YES, you can have both a stable and growing job market: e.g. Washington, DC metropolitan region. Job growth is outstanding, and there is little to zero chance the underlying economic engine (the Federal Government) will either go out of business, or "Offshore" the work performed (stop laughing) here. Further, if the predictions of half the Federal workforce retiring in the next ten years prove to be true, the Fed's will simply outsource the work to contractors with stipulations that most of the work be performed in close proximity (or accessible by METRO) to the government HQ building. DC is both growing and "Stable". Other cities (most work is done in cities, or just outside) have their own particular issues with regard to growth and stability. Philadelphia has one of the highest concentrations of Universities and teaching hospitals. Its job market is very stable, with moderate growth. Detroit is shrinking due to the Offshoring and Downsizing of the automobile industry, while many cities are like Baltimore - in transition. Good Jobs = Good Real Estate.

Obvious Answer #3: Retail Follows Rooftops.
Most cities want good retail, and for good reason. A city gets identity directly from the quality of its retail establishments. This why the DC government has for years passed laws to foster the same type of retail in downtown DC as is found on Rodeo Drive - Unfortunately, you can not legislate retail. Contrary to the wishes of some elected officials and city economic development advocates, retail developers do not build buildings to have them sit empty. In the retail arena it is the retailers who decide where they are going to go, when the time is right to open a center and who they want as their neighbors. Yes! some retailers have enough "clout" as to tell a developer who else can and can not come into a shopping center, whether the center be a mega-mall, or a simple strip-center. The number one thing retailers look at is called a "demographic" analysis based on drive times. In other words within a 7-10 minute drive, how many people that fit the profile of my "best buyers" live near your proposed location. (Hint: if you want a decent store near where you live, next time you go across town to go shopping and they ask for your zip code, give it to them!). If you have a good demographic, you have the opportunity to capture good retail. As an investor, if you can find opportunities to invest in good areas JUST before the good retail comes, you have an opportunity for a windfall. Case in point, there is strong data to indicate that houses in Bowie Maryland increased by an extra 10-15% in value during the first 18 months that the Bowie Town Center opened. As with residences within short drives of Tyson's Corner and Rodeo Drive, when the good retail comes, it puts a place on the map.

Obvious Answer #4: You Can Never Escape Supply Vs. Demand.
Right now there is a lot of wringing of hands over the news on housing. It does not matter, unless you work for a large national homebuilder. Almost every large (national) homebuilder last week announced that it was cutting back production, and of course what they did not announce, but is sure to follow is that they will also be laying off their employees. However, just because the big-boys are laying folks off does not mean that your particular slice of Heaven on earth, has now become the other place. Most investors are working deals and markets where the big boys aren't. Big boys work on scale, meaning they do well where they an roll out a large number of their product. It is not economical for many of the large builders to come into markets where many real estate investors make deals. So should you be concerned by what the paper says - probably not (see also #5 below), because your strategies should be based on the supply and demand factors where you are. If you go to the local housing authority and ask the question: "If I sign up today, how long will it take for me to get into a house on a housing voucher (Section 8) ?", and they say: "The list is closed until next year, then you will have to enter the lottery to get a voucher", then you are probably in a market where the demand for houses in the Section 8 program is far above the supply. The fact that you have "uncovered" an opportunity to either invest in properties to rent to people with Section 8 vouchers, or wholesale (f/k/a "Flip houses") to investors who want to rent to people with Section 8 vouchers has absolutely nothing to do with what you read in the paper this morning about Beazer or Toll Brothers "cutting back". Real estate is local, and you can never escape supply vs. demand. Regardless of what is happening in the national news, it is the supply and demand factors in your niche and in your back-yard that matter.

Obvious Answer #5: If it is in the Paper - its either half true or a complete lie.
Last week the national media blurted all across the airwaves that the National Association of Realtors(R) had announced that home prices were falling! Unfortunately, they only chose to report the first two sentences of the actual press release sent out by NAR. What the major media failed to state was that the National Association of Realtors(R) was predicting a temporary dip in prices and the press release went on to say that 2006 would be the 3rd Best Real Estate Market in HISTORY! Sorry, truth does not sell as many papers as "DOOM AND GLOOM". (You can read the actual release yourself at: http://www.realtor.org/PublicAffairsWeb.nsf/Pages/SeptemberForecast07?OpenDocument ) Bottom line: Reporters (most of whom do not own their own home, much less any investment real estate) are in the business of making news, and you my friend are in the business of making money - you have to be smarter then letting your investment decisions come from what you only read in the paper. If you see a story, make the time to dig a little and get the details. If it is reported that the National Association of Realtors said, "...", then make the time to go to their website (http://www.realtor.org) and see the ENTIRE press release for yourself. Most importantly remember, what is happening on the national scene may, or may not have any direct impact on what you are doing. Having said that, TRENDS are important. If the trend is that interest rates are going up, then rethink any strategies you may be using that rely on having low interest rates, or for that matter could take advantage on people not being able to afford the same house, in the same way as last year. Now might be the time to dust off that course you bought a couple of years ago on "How to Sell Houses On Lease Option" as you may find people who can't get the same loan rate as last year, but still want to own a home. Or now many be a great time to redo your marketing to target sellers (most of whom do read the major media) and emphasize that they may be sitting on their house for an additional 90-120 days as the real estate markets slow. Take what the major media says about real estate with a grain of salt and do your own homework, but don't expect that people who may be selling their homes have done the same.

Sherman Ragland - Thank you for Reading...