Happy Holidays 12/15/09
Happy Thanksgiving 11/01/09
IRPOA Updates 9/29/09
Upcoming Events 9/14/09
Remembering 25 Years 6/22/09
Report
on our Lobby Day in Springfield 3/4/09
Heros
Are Made Over Turbulent Times 12/17/08
Are
You Missing Out? 11/06/08
Buy It Right, and Be Prepared to Hold It 10/3/08
Lessons
from the 1980’s Cycle 8/9/08
Good Deal? - 4/23/08
The Courage to Continue - 2/28/08
Take Time to Celebrate the Good Things - 11/9/07
Financial Freedom 9/5/07
Sifting the Wheat from the Chaff - 8/7/07
Learn To Adapt
- April 07
Patience - January 2007
Why Are Some
Folks Wildly Successful While Others Fail? - November 1,
2006
Easy Goal
Setting – January 2006
“Wasn’t it just Christmas a few minutes ago?” I read this in a facebook post from my sister. This dramatic reminder of the fleeting nature of time speaks to us. We need to make sure that we are taking time for the important things in life – whatever that means to each of us.
The holidays are a great example of this. It used to be that the holiday season offered a break from the hectic pace of life. These days many of us set ourselves up for failure. We have established traditions and expectations that are just unrealistic. Instead of taking a holiday – a break – from our normal life, we make the fun and traditions into extra work. Slow it down, eliminate the parts that don’t matter, and enjoy your holidays.
Look forward to seeing you in the New Year.
Dear CCIA Members and Friends,
It's that time of year when most of us start taking inventory of the things in our lives that we are grateful for. Hopefully you have much to be thankful for, and many great family and friends to share your blessings with. Over the twenty-five years that I've been focusing on the education and networking needs of CCIA members, I have seem many real estate investors grow and "graduate". Many have come, learned, prospered, and retired. I always love hearing their stories. Having the opportunity to make a positive difference in peoples' lives is one of the things that I am very thankful for.
Today, as we approach Thanksgiving, I'd like to talk a little "turkey" with you. While turkeys are tasty birds, the term is also associated with human "turkeys" and the saying - "It's difficult to soar like an eagle when you are surrounded by turkeys"!
Do you spend your time associating with "turkeys"? Negative people? People who doubt you can reach your goals? People who doubt that real estate is the way to get ahead? Are you beginning to think they may be right? These people are holding you back!
Find the positive thinkers in your life and spend your time with them. Share your dreams, your goals and your ideas. These folks will encourage you to take the necessary steps to be successful. Find people that can motivate you, encourage you, help you excel and make you feel good about yourself. If you're trying to be a successful real estate investor, a good place to look for like-minded, positive individuals is your local real estate investor group - that's us!
Look in the mirror. Do you see a "turkey" or an eagle? Do you need an attitude adjustment? All of us do at times! Do you encourage your spouse, your children, your business partners and your friends to dream, set goals and achieve? Or are you holding them back? Our ability to achieve depends in large part on our attitude and our sense of self-worth. If you believe, you can achieve! Flip the switch and think positive. It's a great time to be a real estate investor.
Another thing I'm thankful for this year is our current real estate market. The drop in prices over the past few years is creating a market filled with opportunity. The biggest opportunity that I see with falling prices is that more properties make sense. More properties in better areas will cover their expenses and give you a return on your investment. You can more easily find properties that can be rehabbed and sold - or leased at a profit. Your focus needs to be on finding properties that make sense. Is my cash flow better off if I buy it? Is my bank account better off if I buy it? Be grateful for our current market. Gratitude helps you shift your focus from problems, frustrations, and worry to the things you should be focusing on - the things you want to spend your energy on.
Many of my most successful friends are avid readers. There are many wonderful books on success, motivation and mindset. It is no accident that these folks are positive and successful. They work hard and plan for success by setting goals and knowing they are going to achieve them. You can too!
Have a great holiday, eat your turkey and make up your mind to soar with the eagles. I'll see you at the next CCIA meeting.
Dear CCIA members and friends,
The Illinois Legislature is about to start its Fall Veto Session. It seems an appropriate time to update you on the legislative activity from 2009 at the State Level. As an organization CCIA was a founding member of the Illinois Rental Property Owners Association (IRPOA). We pay dues to belong to IRPOA and participate in any and all ways we can to support the legislative efforts of this organization. I was the founding President, and remain active with the Board as NE Regional Vice President, and well as taking an active role on the Political Action Committee (PAC). The legislative role of IRPOA is crucial to maintaining, and hopefully eventually improving the legal environment for landlords and investors in Illinois.
IRPOA’s PAC works in conjunction with its lobbyist, Consulting 4 Biz, to identify legislation that would impact property owners, landlords, investors, and developers of residential rental housing. Proposed legislation is read, discussed, and monitored. If it starts moving through the process and poses a threat, we will put out a call for action to our members. We typically ask our membership to contact their legislators to ask them to defeat a particular bill, or to support it. Occasionally we will ask for support in getting a bill changed.
In addition, IRPOA also proposes legislation. The expense of getting legislation drawn up and introduced can be considerable, so we have only introduced a few bills so far, and out of those only a couple have been passed.
One of IRPOA’s other functions is to keep its membership informed about new laws. That is the purpose of the 2009 legislative summary. There are some new laws that you need to be aware of. If you would like to read any of the new laws in its entirety, they can be found at http://www.ilga.gov using the Bill number or the Public Act number.
Donations to IRPOA’s Lobbyist Fund and PAC are always welcome and needed. Please send them to:
IRPOA 811 E Rollins Rd Round Lake Beach, IL 60073
Thank you for your help.
Sincerely,
M. Jane Garvey
President, Chicago Creative Investors Association
NE Reg. VP Illinois Rental Property Owners Association
Click here for the 2009 Legislative Summary - Just Updated!
Upcoming Events 9/14/09
Dear CCIA Members and Friends,
We still have a few events coming that there is still time to take advantage of.
Hope to see you soon!
Jane Garvey
Saturday, 9/26/09 — IRPOA Special Event
Self Storage Investing — All Day Workshop with Scott Meyers
Scott is the nation’s leading Self Storage Educator. Like all other real estate investments, self storage shares the same attractive qualities as residential rentals, apartments, retail strip centers, office buildings, and industrial properties. Those include leverage (borrowed money), tax advantages, passive income, personal control (being your own boss), and appreciation. In this all day event, Scott will show you how he owns and manages thousands of self storage units all remotely with the aid of the internet and self service kiosks. Find out how he does it and how you can duplicate it to create your own income stream. For more information and to register for this event, go to IRPOA’s website: http://www.irpoa.org/Self%20Storage.htm Indicate you are an IRPOA member and create your own password. And, be sure to indicate you are a CCIA member! Details: 9AM-5PM, Northern Illinois University Naperville Campus Auditorium, $45/per person (before September 12th).
Saturday, 10/10/09 — CCIA Special Event
Private Lending 101 — All Day Workshop by Don DeRosa
Want to know even more about private money? At this all day workshop, Don will cover it all in detail. Ask questions and get real time answers.
Details:Saturday, 10/10/09 -- 8:30am to 5pm (Includes Breakfast) -- Holiday Inn, Itasca, IL.
Early Bird Discount: $69.00 per person – (Current CCIA members get $20 discount: Only$49.00 per person!). A $10 late registration fee will be applied to all registrations received after 10/5/09.
Registration: Call 630-858-4663 or print the downloadable form on our Website: http://www.cciainfo.com and fax it to us at: 630-858-4357.
Remembering 25 Years 6/22/09
Dear CCIA Members and Friends,
Amazing how the time has flown past. At the time we started the Chicago Creative Investors Association back in June 1984, I’m sure a 25th anniversary was as far from everyone else’s minds as it was ours. We just needed a positive supportive environment where we could meet, learn and discuss real estate investing with people who were excited about the business. The time was brutal – unbelievable interest rates, lots of people losing their jobs, and the economy in turmoil. It was vital to be around people who had a plan and were working it.
Twenty-five years later we are still here, still working hard to provide the education, motivation, and networking you have come to count on. A few dozen of our original members are still actively participating, and others check in from time to time from retirement. It is gratifying to see the successes. And, that positive supportive environment is as important to our members now as it was 25 years ago.
Many of you have helped over the years by speaking on panels, providing expert advice, helping check people in, website design and maintenance, writing articles, carrying boxes, transporting speakers, putting together the power point presentations, running the meetings, offering advice and ideas, helping with the charity events, monitoring legislation, calling your legislators, providing door prizes, telling friends and fellow investors about meetings, and countless other roles I may not even be aware of. In the meantime we have seen thousands of investors and would be investors come through the doors. I would like to think that we have been instrumental in helping everyone who has come, even if it was just helping some decide that real estate wasn’t the financial vehicle for them.
I would like to acknowledge some folks of special importance. Marc Goodfriend, my late husband, was a key figure in getting all of this off the ground. Some of our long time members can tell you what a privilege it was to know him. I would also like to express my gratitude to Dr. Albert Lowry who gave us a jumpstart by sending his Chicago area students to us for the first several years. They may have been beginners, but they were all enthusiastic. We benefited greatly by being the local answer folks for Carleton Sheets as well. When my sister came to visit, she dubbed the nonstop phone calls as “Jane’s free consulting service”. Many others like John T. Reed have been immensely helpful by keeping us in touch with the national press. Closer to home, Wes Bishop has volunteered his time and ideas for as long as I can remember. Without his help and support I am pretty sure CCIA would not have made the 25-year point. There are others who have been there through thick and thin to help whenever and wherever they could. We are extremely grateful for all of your help.
Marc and I had just quit our jobs as Loyola Professors when we started CCIA. Being educators at heart we spent countless hours writing books, articles, courses, and teaching. Then there are the stories I could tell of the years Marc and I spent on the national circuit as gurus. Much time was also spent helping to launch National REIA and serving on their Board of Directors and as their newsletter editor. When statewide legislation started to be a problem we refocused our attention. Years of monitoring and fighting legislation via Illinois Rental Property Owners Association have followed. Somehow, none of this was in the plan when we started CCIA, but it has all come with the territory. If you are going to run a responsible organization, you need to take care of the needs of the people that belong.
CCIA has helped a number of speakers launch their careers. Of special note was Jeffrey Taylor, (aka Mr. Landlord). CCIA was the first real estate association to welcome Jeffrey to its stage. He has since developed his newsletter and website into one of the most trusted sources for landlord advice in the country.
Most of the speakers you see at CCIA have well-established national reputations as experts in their chosen niche. You have also seen some of the local areas most knowledgeable folks specializing in topics that demand some local expertise. A few years ago one of our members suggested the tagline “Bringing Chicagoland the most brilliant minds and ideas in real estate for over 25 years.”
Here’s to our members. It is through you and with your support that we have been able to provide all of this for the real estate investing community of Chicago for the past 25 years.
Thank you!
M. Jane Garvey
Report on our
Lobby Day in Springfield 3/4/09
Dear CCIA Members and friends,
Thank you to all who attended the 2nd IPROA Lobby
Day in Springfield on March 4th. The day began with a brief overview of the
legislative process and information on bills of interest to IRPOA under consideration
in the House and Senate. The overwhelming majority of the attendees experienced
extremely effective meetings with their legislators. Members enjoyed a wrap-up
briefing by Senator Bill Brady, R-44th District. We greatly enjoyed the day
with the 40 members who were in attendance!
Opposed by IRPOA, SB1352 introduced by Senator Viverito was postponed in the
Senate Local Government Committee. This bill amends the Counties Code and the
Illinois Municipal Code. It provides that the county board of any county may
license and regulate landlords, as defined by the county board, within the
unincorporated areas of that county. As well as providing that the corporate
authorities of any municipality may license and regulate landlords, as defined
by the corporate authorities of the municipality, within that municipality.
SB1596 was heard in the Senate Judiciary Committee on March 4th. Government
Relations Chair, Paul Arena, did a fabulous job testifying on this piece of
legislation; however, due to opposition of the bill and outstanding questions
by the committee members, the bill was held in committee.
SB1597 was held in committee this week and will be heard in the Senate Consumer
Protection committee next week. Representative Chapin Rose's companion bill,
HB2679, was assigned to the House Public Utilities Committee and is posted
to be heard on March 10th.
HB4086 introduced by Dan Brady Amends the Security Deposit Interest Act. Provides
that the lessor shall, within 30 days after the end of each 12 month rental
period, pay to the lessee any interest, by cash or credit to be applied to
rent due, except when: (1) the lessee has signed an agreement with the lessor
that the interest may be held in an account with the original security deposit,
provided that interest shall accrue on the entire balance held for the lessee,
including the original deposit and any interest previously accrued; or (2)
the lessee is in default under the terms of the lease (instead of only when
the lessee is in default under the terms of the lease). This bill is currently
posted in the House Judiciary I - Civil Law Committee..
HB3934 introduced by Representative LaShawn Ford amends the Criminal Code of
1961 and enhances the penalty for theft by one class higher if the offender
falsely poses as a landlord or agent or employee of the landlord and obtains
a rent payment or a security deposit from a tenant. This bill currently sits
in the House Judiciary II - Criminal Law Committee.
HB936 (Representative Naomi Jakobsson) passed out of the House Judiciary I
- Civil Law committee by one vote moves onto second reading in the House.
Prepared by Debbie Broadfield, Lobbyist, IRPOA, Consulting4Biz, Inc.
The IRPOA invites CCIA
Members to check the latest Lobbyist Briefings.
Click
Here
(Use ID: irpoa
Password: lobby)
Jane Garvey
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of Page
Heroes are
made over turbulent times 12/17/08
Dear CCIA Members and friends,
“May you live in interesting times”, often referred to euphemistically
as the Chinese curse, is reputed to be the English translation of an ancient
Chinese proverb and curse.
As I was looking up this phrase to see what the origin was, I came across another
translation that claims the Chinese proverb of origin is not a curse, but is
really translated as: “Heroes are made over turbulent times.” Let’s
look at life this way, and adapt our way to success rather than giving up our
dreams.
There is no doubt that the economic and political turbulence that we are experiencing
requires changes in how we do things. Your job as a real estate investor requires
retooling. Rather than reacting to what is happening in the market, you need
to be forward thinking.
The real estate market has always had a reputation of being slow to react to
economic turmoil. Those of you in the trenches might think you are seeing a
market that is fast moving. I have seen average asking prices in a town home
community drop by 10% in a matter of a few weeks. One person lowers the price,
and the rest follow suit. Is that indicative of the values in that community,
or is it the “sale of the day”? At any one time, there are probably
only 3% or less of the properties in a community on sale. In a severely depressed
market, the folks that are trying to sell are banks, and people who have to
sell – at any price. Would the other people in the community agree that
their property has that same value? Probably not! They are entrenched in home
ownership, with a mortgage, and payments to make. If a homeowner doesn’t
need to move or sell, they do not need to participate in the “sale of
the day.”
If you are willing and able to buy, you can take advantage of the sale.
My advice, as I have been telling you for years, be prepared
to hold it. This means you need to buy at a price and
terms that will allow a positive cash
flow. If you don’t meet the criteria to borrow from an institutional
lender, learn how to borrow elsewhere. The seller is always my first choice.
One of the great things about seller financing is that there are almost no
rules. You can be as creative as you need to be to make things work.
If your tools are rusty, a CCIA meeting or workshop is a great place to get
them sharpened. I know that some of you are finding the teleseminars and webinars
so much more convenient. The reality is, if that is the choice you are making,
you are missing out on the friendships and connections you make at CCIA meetings.
Meetings are so much more that just the speakers. They are a place to meet,
exchange experiences and ideas, get questions answered, make connections, and
get your batteries recharged. I started CCIA almost 25 years ago, because it
was tough to be in this business without regularly plugging in to the network.
Over the years, it has proved very beneficial to all of us that have stayed
involved. Please join us and become one of the regulars.
Jane Garvey
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Are You
Missing Out? 11/06/08
Dear CCIA
Members and friends,
I just finished reading an Associated Press article that
talked about how Americans have been cutting back. The results
for the third quarter were in, showing that “disposable
income” fell at an annual rate of 8.7%. Along with
it came a serious cutback in spending.
I put the words “disposable income” in quotes
to call your attention to it. This is an extremely poor
choice of words, which our government, press, and financial
institutions use on a regular basis. I choose to use the
words discretionary income. You should too. If you use the
right words, your subconscious will help you treat your
income and your money with the respect it deserves.
On to some serious matters… It is no secret that our
country has some big time economic problems. It is also
no secret that it is causing havoc on Wall Street, and in
the banking industry. There are plenty of Americans who
have cutback on spending because they have lost their jobs,
their homes, or their confidence that they will have more
money coming in to replace what they spend. We are living
in troubled times.
As a real estate investor with just under 30 years in the
business, I have seen many ups and downs in the market and
in the economy. When buyers are scarce, those that need
to sell discount their prices to attract the few buyers
that are available. There can be some incredible bargains.
That is today’s market. There are some incredible
bargains.
Now, I know some of you are scared. Some of you think you
need to sell. Some of you are still stuck with flips you
have finished and not sold. Some of you are frozen in place
with fear. Rather than needing to sell, you need to get
creative. Here are a few ideas to get your brain cells energized.
Find a renter (or shared housing situation) that can pay
enough to pay the bills. Find someone that will make up
the negative cash flow for you for the next 3 years in exchange
for a percentage of the ownership, or an option to buy in
the future.
Example: Let’s say that you have a house with payments
of $1800 per month that will rent for $1500. You have $60,000
in equity tied up in it. Let’s say that you can find
someone that would be willing to give you $300 per month
($3600 per year) for the next 3 years for 25% of the ownership.
Is that a good deal for them? Is that a good deal for you?
Is it better than giving the house back to the bank, or
selling it into this market? That is for you to answer.
If you need money now, take an upfront fee to get into the
deal. If you need a monthly positive, give them a larger
share of the ownership for a larger monthly payment.
I will tell you that the real estate
market we are currently in is one of the best I have ever
seen for buyers. I am not going to tell you that it is at
its bottom – but the numbers are starting to make
sense on more and more properties. And, there are tenants
in bigger numbers, reasonable interest rates for those that
can borrow, and the riff raff is out of the way. Even the
CCIA meetings are getting down to the serious investors
who know their stuff. I love teaching people how to invest,
but I would rather discuss strategy with those that get
it. If you are staying home, licking your wounds, or figuring
that the party is over – boy are you missing out.
Pam and I have been discussing what we can add to our programs
that would be of benefit to those who come on time for the
meetings. In October, I took some time in the early part
of the meeting to talk about my experiences with private
lenders. It was well received by those in attendance. I
think it took some of the mystery out of it. We will find
another hot topic for November. If you have something you
would like us to discuss, please let us know. We are working
hard to meet your needs, and keep you informed and on top
of your game.
Remember… mark your calendars for November 16th and
December 14th and join us for the CCIA meetings.
Happy Real Estating,
Jane Garvey
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Top of Page
Buy
It Right, and Be Prepared to Hold It October
3, 2008
Dear CCIA Members and Friends,
The market is in turmoil. Every day
there is new news - much of it grim. We have all been hearing
it – the real estate market has caused the problem.
Don’t believe it for a minute, but the result of this
perception is that lots of people are afraid of real estate.
There is fresh evidence all around us that real estate prices
can go down.
As investors, it is our job to seize
opportunities. They are readily available today. A few years
ago, every Tom, Dick, and Harry was buying, and it was hard
to find a deal that made sense. Today, Tom, Dick, and Harry
are running for cover. The average man on the street is
thinking real estate is cheap, but too scary. The lack of
buyers has caused an abundant supply of properties on the
market. Some folks, like banks, need to sell their property.
The price on distressed property is coming down.
Make sure that the property you are
buying represents opportunity for gain. We don’t just
want to take over other people’s problems and make
them our own. You need to have the means to hold until the
market improves. That typically means buying right so that
you get a positive cash flow when the property is rented.
There are other opportunities as well, but the basic rule
needs to be:
– buy it right, and be prepared
to hold it.
I have been telling the members who
show up for the beginning session at CCIA meetings that
we need to evaluate property differently in today’s
market. If you are planning to do a rehab, you may find
2-4 months down stream, when you are trying to sell the
property that the ARV isn’t what you thought it would
be. That is because “solds” are older data,
and in a falling market they show higher values than today’s
buyer will pay. Asking prices take on more relevance in
this type of market. Used in conjunction with market time,
you can get a better picture of what is happening. But even
“asking prices” still do not do a good job of
predicting future value. What you need to look at is the
price the property can support as a rental (if rehabbed).
Use that as your “after repaired value” and
you will be looking at a deal that makes sense, and will
have options when you finish the rehab.
The other oddity of this market is
the cheap, but hard to get money. The wise investors I know
are getting busy utilizing creative financing tools. It
is a great time for that.
We will continue to offer you opportunities
to retool and take advantage of this market. Please join
us at our meetings this fall. And, if you get a chance,
take advantage of some of the other educational and networking
opportunities we have lined up.
See you soon,
Jane Garvey
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Lessons
from the 1980’s Cycle 8/9/08
Dear CCIA Members and friends,
“Nothing is selling!” Have
you heard this statement lately? Well, frankly, it isn’t
true. Sales activity is slower than it was a few years ago,
but properties are still selling. In any market, there are
people whose life circumstances dictate a move. And, there
are at least a few people who recognize that it is a good
time to buy now that prices have come down and interest
rates are still low. Between these two groups, there is
a market for property. In addition to buyers, there are
renters. The rental market is healthier than it has been
in quite a while.
Ideal buying conditions, and ideal
renting conditions, yet I still hear investors singing the
blues. They have a variety of reasons for their distress.
But, what they need to do is wake up, and smell the roses.
There are opportunities in every market, and this one offers
lots of opportunities for investors.
I want to tell you a little story from
my past, in the hopes that you can learn some lessons from
the past, and apply them to the present.
Back in fall of 1979 my husband and
I bought a lakefront condo for $56,810. It was our first
purchase. We were just getting out of graduate school and
taking teaching jobs at Loyola. Moving from student housing,
and student stipends, we had very little money, and needed
a place to live. We found this condo, and structured a deal
with a $10 down payment. The purchase price was no deal,
but the financing was something we could afford.
We rehabbed the condo and lived in
it for a few years, and then kept it as a rental when we
moved out in 1983. It had appreciated a little, but interest
rates in the early 1980’s were 12% - $17% and up,
so the market was slow. By about 1987, the condo’s
value had climbed to $75,000. I was still renting it out
when the tax reform act precipitated the savings and loan
crisis. In the midst of that disaster, a number of condos
in the same building went on the market for $22,000. They
were bank owned foreclosures. I grumbled about it at the
time for two reasons. Now I had new competitors in my rental
market that had lower costs than I did. And, the value of
my property had just suffered a dramatic loss. But, despite
the fact that I owed more than the property was worth, the
tenant kept paying rent, and I kept making payments. Property
values quickly jumped back to pre-S&L Crisis levels.
It is now 2008, and a tenant is still paying rent to me
on this same condo. I have only a vague idea of value, but
it is something like $145,000.
What did I learn from this? First,
I made a major mistake. I should have bought the other condos.
Second, time heals most wounds in real estate. Third, changes
in market value don’t really matter much when you
are holding something as a rental. Fourth, distressed property
sales only have a temporary effect on values. Most homeowners
won’t sell for less than they owe, unless life circumstances
force a move.
Happy bargain hunting! – Jane Garvey
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Good Deal? 4/23/08
As spring moves into the Chicagoland
area, there is always an optimism that comes with it. New
growth, new energy, and new hopes and dreams for the season
ahead. In most years, buyers and renters start looking for
new places to live. And, in most years, prices see a bit
of a boost with the new activity.
As we have been discussing at CCIA
meetings, and in previous messages, the market has shifted
here and around the country. You don’t have to listen
to much in the way of financial news to hear about tightening
standards on lending, skyrocketing foreclosure rates, and
really dismal news surrounding inflation, cost of gasoline
and other goods. It can get downright depressing to listen
to the evening news.
Yet, in this market there are still
deals, and some investors are doing quite well. What can
you do to increase your chances of success in this market?
Make good deals. That is obviously
sound advice in any market. In this market, you need to
carefully examine the various things that make up the deal
and make sure that they make sense. If they don’t,
move on to the next one.
The biggest problem investors were
having a few years ago was finding a good deal. The market
was flooded with buyers paying too much. These days, the
biggest problem I am hearing about is investors that are
“stuck” with property that they can’t
move. And, in addition, many no longer know what a “good
deal” means.
So, how do you avoid being “stuck”
with property? You plan in advance. Make sure that you are
buying right. Ideally, you will control the property first
– find your “exit”, and then implement
it. Control could mean buy, but in a market like we have
today, a contingent contract, an option, or other creative
techniques make more sense. If you are trying to buy rental
property, make sure that you have a quality tenant signed
before you close. If you are wholesaling property, control
the property, and find the buyer before you remove your
contingencies. If you are buying property to rehab, make
sure that you buy it cheap enough that you will be able
to offer the property at a bargain price to move it quickly.
Price: I am hearing agents and others
talk about what a tremendous bargain a property is because
it sold for $X two years ago, and you can get it for only
80% of $X now. Is this relevant? I would contend that the
answer is not totally. You may use it as an early stage
screening device, but the value of a property changes due
to many things, not just time.
Condition: Is the condition the same,
or are you now looking at a beat up property that was in
pristine shape two years ago? Or, on the other hand, did
someone buy the property, fix it up, and is now desperate
to get rid of it because they are out of cash to carry it.
One could be an awful deal, and the other might be a good
one.
Terms: Was the sale value two years
ago based on easily available low priced financing? If today’s
price is based on an all cash purchase, and cash is not
as readily available, the value of the property is less.
Location: In a swiftly moving market,
property will sell more easily, even if the location is
not ideal. In a slow moving market, this property is more
difficult to sell or rent. I would suggest that you carefully
check out the location before buying.
Prepare in Advance for Problems: Make
sure you have several exit strategies, and the funding sources
to go the distance. Be prepared to rent, seller finance,
trade, or get creative in other ways if you can’t
sell the property. Or, if the opportunity exists to control
the property without owning it, do so.
Pull out the Stops on your Marketing:
A sign in the yard may be all it takes to move a property
in good times. Today, you better have the sign in the yard,
the flyers on the street, listings at all of the websites,
and even an MLS listing. In addition to all of that, take
the extra step of making your property more attractive than
the competition. If you have the best place on the market,
it is priced at the best price, and it is advertised everywhere
so that people are aware of it – if anything sells
or rents it will be your property.
Keep your eye out for bargains.
Desperate times make desperate sellers, which make for phenomenal
opportunities. This market is all about having the right
tools. Through our CCIA meetings, we continue to “bring
you the most brilliant minds and ideas in real estate”.
Please join us, and stay on top of your game.
See you there,
Jane Garvey
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The Courage to Continue - 2/28/08
In honor of our market, a few words
of wisdom from a great coach. “When the going gets
tough, the tough get going.” Vince Lombardi
Is it tough going in your niche these
days? Well, get going. Someone has moved your cheese. For
those of you that haven’t read the book “Who
Moved the Cheese” – this phrase just means that
the game has changed. There is still plenty of opportunity;
it just requires “retooling”, or rethinking
your strategies.
In the past, I have talked about the
insanity of real estate investors all working in the same
niche. At the time I was mostly speaking of the pre-foreclosure
market. When the average homeowner in foreclosure was getting
dozens and dozens of letters from investors with all sorts
of offers, it was hard to stand out from the crowd. That
was the niche of the moment. All sorts of other niches were
left untouched. A few years ago a friend was trying to sell
a house and started musing about how to get on the foreclosure
list (without actually defaulting) so that he could get
the attention of all the investors that were trying to climb
all over each other to buy pre-foreclosure property.
When there is too much competition
for something, the price goes up. It goes back to the simple
economic principles of supply and demand. Ideally you want
to be a buyer in a market with plenty of product and few
buyers. And, you want to be a seller in a market with scarce
products and few sellers.
How can we do both of these in the
same market? We can’t – but one of the beautiful
things about real estate is that it is made up of many submarkets.
So, we can buy products in market segments (or niches) where
there is scarce competition, and we can position our finished
product for a market segment where the products are scarce.
The possibilities are endless.
Adaptive reuse is a great example of
this. Apartments weren’t renting a few years ago,
but condos were selling. Investors bought apartments and
sold condos. Industrial space wasn’t renting or selling,
so it was redeveloped into residential space as lofts. Apartments
weren’t renting, so investors redeveloped them into
senior housing. Strip motels went out of fashion, so investors
redeveloped them into office rentals. And the list goes
on and on.
Then there is a reworking of a product
on economic terms. Buyers are looking for the most bang
for their buck. If you can figure out ways to keep the payment
affordable you can appeal to a larger segment of the market.
Buying down the interest rate for the buyer is one technique
used by developers to stimulate interest in new single-family
home developments. Condo developers started guaranteeing
rents and pre-paying association fees for investors as their
market turned soft. The possibilities again are endless.
Are you adapting? As the market shifts,
you need to adapt, and keep learning and adapting.
We are currently witnessing the fall-out
that happens when people don’t take the time to learn
the business.
I am seeing more and more investors
with vacant property. Some of it is freshly rehabbed, and
ready to go. Some of them are trying to sell it for less
than they paid for it. The problem – they haven’t
adapted to the market. They have one exit strategy, and
that’s it. And, they are paying to get out. Some of
them are making the bank pay to let them out.
Well, if you are one of them, it is
time to reeducate yourself on real estate investing. The
days of do anything, no matter how stupid and the market
will rescue you – are pretty much over. It is time
to learn more about the business. If you have the right
tools you, and have developed your network you can do well
in this and any market.
“Success is not final; failure
is not fatal; it is the courage to continue that counts.”
Winston Churchill
Let us help you get educated and stay
at the top of your game. We are continuing to bring the
most brilliant minds and ideas in real estate to the CCIA
meetings and workshops in 2008.
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Take Time to Celebrate the Good Things...11/9/07
Dear CCIA Members and Friends...
We are quickly approaching the holiday
of Thanksgiving. I think most of us appreciate this holiday
as a time to celebrate the good things, events, and people
in our lives. This is something we need to be doing on a
regular basis, rather than once a year. It is critical to
our success and wellbeing.
I talk to many people with many problems
on a daily basis. Many of their problems are financial,
(too little money, or too much money and no idea where to
safely invest it). Others have people problems (tenants
not paying rent, spouses, co-workers, and children driving
you nuts). Others have health problems. As a natural part
of life, we all have problems from time to time.
One interesting thing I have noticed,
is that those people who switch their thinking from their
problems to their blessings, fairly quickly return to a
peaceful state. This process gives you a chance to put the
problems in perspective. We all operate more productively
when we can focus on the things that are working well for
us. And being more productive allows us to address our problems.
So, learn to thought shift. This process
helps you to get back on track. When you get the tenant’s
check back from the bank marked NSF, acknowledge that this
is disgusting, but then shift to thinking about someone
that loves you, or the deal you are doing that is going
right. Some of us struggle to find good things to be thankful
for when we are having problems. An easy way around this
is to keep a list of good things handy. Your list can include:
people who love you, great memories, happy times or moments,
pets, children, grandchildren, an upcoming holiday or vacation,
etc. Even if you struggle to find something that is currently
going right in your life, they are there if you look at
the basics. You are breathing. The sun is shining and warming
you. You have clothes to wear. Hopefully you have food to
eat. We are so blessed to be living in a country filled
with opportunity. We can all be thankful for something.
Have a wonderful month of November,
and a Happy Thanksgiving. Hope to see you at the November
18th meeting where we will learn how to make our rehabs
work better.
Happy investing!
Jane Garvey
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Financial Freedom, 9/5/07
With the financial markets in
turmoil, tighter lending practices, troubled lenders occasionally
failing to wire the money for closings, and new restrictive
laws, the real estate market is a new and interesting place.
How are you dealing in it? Do you know where the opportunities
are? Every market has them. I still believe that a diverse
marketplace like Chicago always has market segments going
up, market segments that are stagnant, and market segments
going down. You need to ferret out the opportunities.
Many
folks sit on the sidelines during market shifts. Are you
one of them? Is it lack of knowledge that allows your fears
to take over and paralyze you? If so, it is important that
you start taking advantage of the programs we are offering.
CCIA is here to provide education, motivation, and networking
opportunities that assist you in meeting and exceeding your
goals. We have been here for 24 years, through all kinds
of market shifts. Last fall, I decided that we would make
a shift in our programming to address the changing market
and the changing legal climate in Illinois. We made the
shift, intending to make you aware of the new and rare opportunities
that this market has for you. But in the process, it pulled
us away from programming that focuses on the quick turn
riches that many investors are still seeking. Of course
you can still make money on quick turns, and distressed
property buys. But, you may be missing out on the opportunity
of the decade if that is your sole focus.
Financial freedom comes from finding
a way to generate long-term cash flow that allows you to
pay your expenses with a minimal amount of effort. Many
of us have chosen real estate as a route to that dream.
I will contend that the goal is to find properties to hold
long term, and to find tenants that can and will pay them
off for us. In the Chicago market, this is often difficult.
Today’s market offers a rare opportunity. There are
lots of owners who need to sell, and relatively few buyers
(it is a buyer’s market). Prices have dropped in many
areas, but particularly for distressed sellers. Interest
rates are still near historical lows. We are in an economy
with plentiful jobs. The restrictions in the credit markets
have many would be homeowners moving back into the rental
market. This new pool of tenants may have dinged credit,
but on the rebound from their attempt at homeownership,
they often make great long-term tenants.
Interest rates are still reasonable.
But, lenders have tightened the purse strings. This leaves
many investors in the lurch. If you need to borrow money
to buy property, you should be honing your seller financing
tools. We have been providing programs that address a variety
of these techniques. Or, start looking for money partners,
who have the credit to easily borrow, or have the money
to pay for the deals you find and manage. Either technique
will allow you to use leverage to build your long-term wealth.
Please join us at our meetings as we
address the relevant topics for dealing in today’s
market. Don’t miss out on this great time for investors.
Jane Garvey
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Sifting the Wheat from the Chaff -
8/7/07
Lately, it seems my email box and answering
machine are overflowing with pitches from “experts”
marketing themselves as the newest and/or the greatest...
follow their advice and become a bizillionaire! Their advice
ranges from investing in condos or preconstruction projects
in one of the many overbuilt markets, becoming the next
multi-level marketing genius, buying foreclosures using
illegal techniques, etc., etc., etc. This influx of “experts”
is so rapid that we are starting to make jokes about “the
guru de jour”.
This is causing a real problem for investors, would be investors,
and the CCIA.
All of these new "experts" want access to the
CCIA members. Many of them are people that I hope you never
meet. Some of them find other groups who will bring them
in, or they find another way to get to the folks in our
market. Some even decide to form their own group. I really
worry about the folks that are unknowingly being dragged
into these schemes. The power of the internet gives anyone
and everyone the ability to look like a well established
legitimate company, or a genius investor, just because they
can develop a grand looking website. The influx of “new
experts”, promoters, meetings, webinars, and teleseminars
brings lots of opportunities, but there are lots of scams
out there too.
* How can CCIA continue to differentiate itself from
these folks,
and continue to be the place people come for their advice?
* And, how can we effectively check these people and
companies out
and make sure that our members are getting sound advice?
As the leader of CCIA, I will continue to try to sift the
wheat from the chaff as I have been doing for 24+ years.
We're not perfect, but we try everything within our power
to bring you reliable, expert advice on real estate investing.
When I choose a speaker for the CCIA, I talk to people that
have dealt with them, I talk to others in their local market
about their business practices, and I do some background
checking on their products and ideas. Whenever possible,
I go listen to them, or talk to trusted people who have.
Our goal is to bring you the most brilliant minds and ideas
in real estate -- and we will continue to do that. However,
on occasion, even we can be fooled by an expert that has
changed business direction and flips topics on us, giving
us no time to investigate their expertise in that field.
Just because someone is an established expert at one thing,
if they get out of their field of expertise they can be
ignorant. Please be careful. Always take the time to do
your own background research and be sure that the content
of their material is appropriate for you and your business
circumstances.
Here are some things you can do for yourselves as you are
bombarded with "expert" advice coming at you from
many directions:
Google searches – if you can’t
find any reference on someone in a Google search, other
than their own website – don’t be their first
victim. Please don’t take this the wrong way. Everyone
has to start somewhere. Real estate experts need to start
somewhere too. When they do, the normal routes are writing
articles, giving talks, and finding knowledgeable connected
people to “introduce” them to the market. As
the internet has developed, people have started to skip
all of the routes that usually sift out the folks with bad
or dangerous advice. The new “experts” have
gone right to market – and hence the customer is the
one that needs to be able to decide whether the advice is
useful, meaningful, and legal.
www.johntreed.com - guru rating service
– this is an interesting website that John T Reed
has established that talks about many of the guru’s.
If someone is on the list with a bad rating, read the review
and use caution. If someone doesn’t even make the
list it probably means they are relatively new to the guru
business. In Reed’s latest newsletter he gives the
details of a court case where guru John Stephanchik was
ordered to pay his customers $17.8 million dollars in refunds.
Ask experts you know for an opinion.
If you have already established that someone is an expert
on one topic, they may be a good source of advice for a
referral on a different topic. They may recognize a name
and be able to tell you if someone has a good reputation
and appropriate expertise.
Out of area experts – check with
a group in their area to find out what they are like, etc.
There is an old saying, you have to be 100 miles from home
to be considered an expert. Another old saying – familiarity
breeds contempt. If the locals think the guy is okay, that
is a good start. Then you need to look at how the advice
translates to your area. Does it violate local laws?
Check the guarantee -- The CCIA insists
that our speakers offer a guarantee. And, we go beyond that.
We collect the money and keep it until the guarantee time
is up. This way, if you have a problem, we get involved
and make it right.
I wish you the best with your real
estate investing and hope to see you soon at one of our
meetings.
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Learn To Adapt - April
07
No money, no brains, no credit, no
work, no way! You have to put something in to get something
out. I know this is not a popular concept, but it is the
flat-out truth. We need to invest something to make something.
And, as the market shifts, successful real estate investing
will require different skills than it has the last 5 or
6 years.
I have been hearing from more and more
distressed sellers that bought properties as investments.
They did a rehab and can’t find an end user. They
bought a pre-construction deal in Florida, and the builder
owned properties are now selling for less than they paid.
The stories vary, but the bottom line is the same. They
are stuck. They had only one exit strategy. It is time for
them to learn creative ways to sell property, or for you
to learn creative ways to buy property and help them out
of their situations.
In early March, I taught a course on
dealing with our changing market. Many of the folks that
attended have been in the business for years, like I have.
We have dealt with markets with 17% interest rates where
home sales were at a standstill. We have witnessed values
of condos dropping by 50% or more. We are still here. Why?
Because we have learned to adapt to changes in market conditions.
You will need to learn as well if you intend to continue
to invest long term.
How can you learn to adapt? Learn
is the key word! Expand your skill set to include strategies
that allow control without ownership - options, lease/options,
contingent contracts, etc. Learn creative finance techniques
and how to use seller financing to buy and sell. Make sure
that any purchases you make have multiple exit strategies.
Look to folks that have successfully navigated the choppy
waters of change before for advice.
CCIA programs will help you to
address the changing market and the need to add new techniques
and strategies to your tool belt. Watch our main meetings,
and special events as we program to help you in coming months.
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Patience - January 2007
Over the last several years, I have
watched several of our members take the final steps towards
retirement. I have observed some things that I thought I’d
pass along.
Patience. This virtue is all too uncommon
in society today. It is one of the keys to long-term success
in real estate investing. The folks I know that have achieved
their long-term goals have been patient. They had staying
power.
A common thread among popular investment
techniques in the last few years has been instant riches
and fast cash. Bird dogs – get paid quick, never needing
to own any property. Flip the contract – another version
of the same thing – although a little more involved,
and a little more legal. Pre-construction deals –
buy before it’s built and sell as the builder finishes
the subdivision. Never get your hands dirty. Get in, get
out. Speed is everything. This is right in line with society’s
need for instant gratification.
Most long time investors will tell
you that the worst mistake they ever made in their investing
career is selling a property. I think a far worse mistake
is never buying one in the first place. The techniques,
I mentioned above, are not as much investment techniques
as they are jobs. If you quit finding deals, the income
stops. If the market changes so that properties are not
easy to sell, you are laid-off without unemployment insurance.
Long-term investments with positive
cash flow are the primary goal of most seasoned investors.
Property management is a fundamental skill needed to maintain
the integrity of the property and keep it financially on
track. The last few years have been tough on many landlords.
Rents have been down and it has been difficult to find qualified
tenants. Despite a tough market, the folks who learn good
property management skills tend to have fewer vacancies
because they have learned techniques that help with retention.
They have also learned to make sure that their property
is well kept. A well-kept property will attract the better
tenants in tough times.
An ideal investment plan is,
and always has been, to buy with a focus on the long-term
benefits. Short-term deals may still be useful for short
term cash, but building a portfolio that pays for itself
and provides a steady long-term income is of utmost importance.
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Why Are Some Folks Wildly Successful
While Others Fail? - November 1, 2006
We all know them. The wildly successful
folks who seem to work less and make more than all of the
rest of us put together. They make it look easy. Why them,
and not everyone?
Are you successful? The reality is,
we all are. But what we are successful at is what we have
been focusing on, limited by what we believe we can do.
Spend some time dreaming about your ideal life. The wildly
successful people dream big. So should you. Then, make up
your mind that your dream can be reality. You deserve it.
You can achieve it. You can have whatever you want. This
is the way the world works. Believe it, and you can achieve
it.
Set an action plan to get there,
one step at a time. Your plan can take you there as fast
as you are willing to go. Wildly successful people let nothing
stand in their way. Jettison your baggage and take off on
your journey. Set backs can’t stop you, other people
can’t stop you, the only thing that can stop you is
you. Along the way you will come across obstacles, and occasionally
need resources that you don’t have. Have faith. The
obstacles can’t stop you – unless you let them.
The resources will be there if you expect them to be. That
is the way life works. All you need is to know your destination,
and to have a plan, the focus, and the follow through to
get there.
Example #1: My sister is a continuous
source of inspiration for me. Mary was born with many gifts.
She has a Harvard degree (in the freshman yearbook next
to Bill Gates), a Masters in Health Administration and a
great job. But, she has challenges in life that would destroy
many people. Mary has 3 children. When the children were
1, 3, and 8 years old, her husband decided to leave and
sued for alimony. Two of the 3 children have fairly severe
disabilities. They will need support for life. Mary’s
husband bailed because he couldn’t deal with it. Mary
made up her mind that she would need to build up adequate
resources to provide for her children. She continued to
raise the family in the house she had occupied before the
divorce, just outside San Francisco. She fought off her
ex-husband’s demand that she support him as well (he
has a law degree and should be capable of helping himself).
Then she hired help to care for the kids and intensified
her focus on work and investments. She is now a Vice President
of the largest HMO in the country. She owns rental property,
and other investments. She watches her spending carefully
– but still treats herself every once in a while.
Thirteen years later she is well on her way to her goal.
Example #2: At my first real estate
seminar I met a newbie named Bob. Bob was divorced and living
in his Mom’s garage. He taught 2nd grade in the public
school system. Bob wanted to be able to comfortably retire
from his job in 15 years, and be able to afford a 2nd home
where he could fish. His drive to achieve his goal kept
Bob minimizing his expenses by living in the garage. He
built a portfolio of rental houses with the tenants handling
the maintenance, He is now retired, happily fishing in Wisconsin,
and living in a normal house with a steady monthly income
from his rentals.
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Easy Goal Setting – January
2006
I hope you’ve had a very happy
holiday season, and got to spend some “down”
time with family and friends. I also hope you have a happy,
healthy, and prosperous New Year. Take the step now to reserve
the times to attend the CCIA meetings in your 2006 calendar.
We are meeting the 3rd Sunday of every month (except March,
April, and June – which are all the 4th Sundays).
The times are 6-9PM. Our website www.ccia-info.com will
have more details about topics and location as time progresses.
I recently came across something that
has helped me in the goal setting process, and I thought
I would share it with you. It is a time of year that many
folks set goals, and almost everyone is talking about it.
I have struggled with this for years, knowing that it was
the right thing to do to stay on track, but often having
a hard time figuring out what I wanted. This process helped
with that, in fact made it easy. In addition, if you have
no problem setting goals, you still may be able to enhance
them using this process. This will make it more likely that
you get what you want in life.
Steps for Easy Goal Setting
1. List 7 things you really like about
your life and your present circumstances.
2. List 7 things that you wish were different in your life.
3. List 7 things you want in your life.
The neat thing about doing these 3
exercises, in order, is that it gets you into a mode of
appreciation to start with. By listing the things that are
going right, your brain starts thinking about the things
that make you happy and satisfied. Following this with things
that you would like to change, still has you doing an assessment
of the present. I found it very easy to transition from
this into the future, moving on to the things that I want.
4. Modify the 3rd list – the
7 things you want, into well-formed goals.
Conditions of a Well-Formed Goal
1. Be positive.
2. State it in the present tense.
Statements like, “I want to lose weight”, need
to be modified. It is a negative statement, and it is in
the future. It would be better to state the goal as “I
am living a lifestyle that will allow me to reach my ideal
weight.”
3. Make it something that you are in control of, so that
you can personally make
the shift.
Setting a goal to become an NBA Basketball star when you
are 5’4” tall, 250# and 53 years old is a prescription
for failure. It is also inappropriate to set a goal for
how your spouse is going to act, or even your kids. You
need to be in control. You could instead set goals for your
behavior that may result in a chance in their behavior.
Your success needs to be tied to your behavior, not theirs.
4. Know what needs to change in order for you to achieve
the goal.
5. Make the goal measurable so that you will know when you
succeed.
6. Make your choice of goals something that you find worthwhile.
Please accept my best wishes
for living the life of your dreams throughout the New Year
and beyond.
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