Karen's Perspective

What are we learning in this economy that will protect us in any economy?

1. Save more than you spend.
2. Don’t expect the good times to last forever.
3. Watch for emerging opportunities that will work if the market changes.
4. Don’t put all of your eggs into one basket.
5. Be flexible and ready to change direction.
6. Have more than one exit strategy in your business.
7. History tends to repeat itself – watch for trends that have happened before.
8. Be aware of areas you can improve.
9. You have a lot of competition. Be better than your competition in something. Do what you do best even better.

Investing in Real estate

1. Buy only when it’s profitable from day one – have equity immediately, downturns won’t hurt.
2. Have multiple streams of income: rentals, flips, owner financed deals, bank financed.
3. Always be reading and studying the market, mortgage and regulatory changes.
4. Have many ways to sell: straight sell, owner financed sell, lease-to-own, rental – make sure you can make money no matter how it sells.
5. Pay attention to history – many markets are cyclical.
6. How are you, or can you be, better than your competition?
7. Marketing, branding, customer service. You must stand out in the crowd.
8. There aren’t many spendable dollars today. Why will people spend theirs with you?

Offer training and information that the public needs. Find a need. Fill it. What do you have to work with?

What would you add to this list?

I know everyone really wants to believe the housing market is going to get better in 2010. I know we’ve all had enough of the gloom and doom, but it appears we have to brace ourselves for more of the same, at best.

We’re so used to turning the channel when we get bored with what’s on. We expect to drive up to the window and have our food ready. We swallow a pill in anticipation of instant headache relief.

But, from the looks of this graph, we’re going to be in this one for a while. It’s better to know ahead of time to be prepared. Stop spending. Save what you can, when you can. Scale back, downsize, reuse, recycle.

The real estate market will come back strong. It always does. We’ll just have to be patient a while longer.

So, what’s the good news?  There’s never been a better time to invest in real estate.

If you live in the Triad area of North Carolina, we’d love to help you with your investing.  Check out our Triad Master Mind. It’s a great group of local investors and we’re all working together to help each other profit through real estate.

Don’t wait to invest, invest and wait!  Huge returns will be there to reap in your future.

Happy investing!

1. Nevada – in the third quarter of 2009, more than one in every 20 Nevada households went into foreclosure.
2. Florida – had unrealistic appreciation for the last 4 years.
3. California – claims many toxic loans to non-English speaking buyers.
4. Arizona – is severely overbuilt – over 80,000 vacant homes in Phoenix alone.
5. Idaho – unable to sustain their 20% appreciation every year from 2003-2006 combined with the current economy.
6. Michigan – automotive related job losses.
7. Illinois – received the third largest volume of foreclosure notices in the US
8. Utah – in 2009, more than 42% of their sub-prime loans adjusted, the national average was 27.8%
9. Maryland – officials are blaming exotic loans and balloon mortgages
10. New Jersey

These state all had unsustainably high home prices and many buyers who really couldn’t afford the houses they were purchasing — most with toxic mortgages — followed by downturn-related unemployment. It was the perfect storm for a real estate collapse.

Unfortunately, foreclosures are not letting up.  RealtyTrac reports more than 300,000 U.S. properties received a foreclosure filing in November 2009 for the ninth straight month.

Did you know you can get a free energy audit for your home? Have you had yours yet?

I had mine today. Fabulous experience and.. free gifts!

Duke Energy will come to your home and do a FREE energy audit. Just call Duke Energy to schedule your appointment. I had to wait almost 3 months for mine but it’s no big deal to wait, right?

My audit took less than an hour. The inspector started by sitting at his laptop where my account was already pulled up. He knew my energy usage history. Then he asked questions about our energy needs and habits such as how many people live in the home, what temperature we keep the thermostat in the winter (68*) and what temperature in the summer (74*), do we wash in cold, warm or hot water. (cold)

Then he made a tour of the property beginning in the attic crawl space where he looked at insulation and duct work. He checked the hot water heater for age and efficiency, checked windows, fireplace openings, heat ducts, vents and insulation in the attic as well as under the house. He checked the heating unit for age and efficiency.

When his inspection was complete, he sat down to share his findings and make suggestions. Everything was entered into our account through his computer. Our home has recently been renovated so it’s pretty efficient already. My biggest problem is an open 4′ x 5′ fireplace where our heat is pouring out through the chimney. I will definitely be getting a glass door for that space.

Then, the goodies. Duke Energy sends a box with all sorts of goodies.  First thing out of the box was a  wonderful energy efficient shower head for for our shower. It has adjustable spray and is manufactured by Earth. Best part? It cuts water usage in the shower from as much as 3 gallons per minute down to only 1 1/2 gallons per minute. Sweet!

One of my favorite things in the box was a low flow Kitchen Faucet Aerator. It has swivel and a lever for flow control and produces either a single stream or a spray. Again, reduces water flow from 3 gallons per minute to only 1 1/2 gallons per minute.

Next, a Needle Spray Bathroom Faucet Aerator which reduces flow again to, you guessed it, 1 1/2 gallons per minute. With all of these flow control devices, you still get fantastic water pressure while conserving water and energy. How does it save energy? Your hot water heater doesn’t work as much because you’re using less hot water.

I got a roll of Adhesive-backed Weather stripping which I will probably put around the pull-down door to the attic. There’s some air leakage there. And Switch and Outlet Energy Seals to stop drafts from coming in through the plug outlets. Put your hand by your plug outlets, especially on exterior walls, to see if you feel cold air coming in. I bought a bag of outlet plug covers at the Dollar Store and put them in all of our outlets that don’t have cords in them. You know the kind I mean? The ones you put in when baby proofing your home so children don’t stick their fingers in the plug openings? My kids are grown but I use the covers now to stop any air flow.

And, finally, 3 compact fluorescent light bulbs. We should all be using those by now.  He also left a booklet, Energy Savers, Tips on Saving Energy & Money at Home.

Pretty great gift from the energy company, huh?  If you don’t live in an area serviced by Duke Energy, check with your energy company to see if they’re offering a similar program.

Sales of new and existing homes in the Triad rose 15.5% in the fourth quarter of 2009.  That sounds like a huge increase to me. Must mean it had really tanked before!

Increase in sales the last quarter of 2009 is credited to the low interest rates and the government tax incentive to buyers. The tax incentive was scheduled to end in November so many people who were planning to buy stepped up their efforts to take advantage of that incentive.

This is the first “year-over-year” increase in three years, meaning the first time there has been an increase in sales one quarter compared to the same quarter the previous year. The last year-over-year quarterly increase came in fourth quarter 2006 when sales reached 3,495.

Alamance, Guilford and Forsyth counties had 2,248 sales the last quarter of 2009 compared to 1,946 the same quarter in 2008.   Looking back to 2006, its an increase, but still an increase over a very lean 2008.

According to Market Opportunity data, in the fourth quarter, 73.6 percent of new and existing home sales were below $200,000. That, again, shows that much of the traffic was from buyers wanting to take advantage of the $8000 first time home buyer tax credit.

The median selling price fell to $146,000. And,sales for the entire year were still down considerably. For all of 2009, there were only 8,586 sales, a 20.5 percent decline compared to 10,804 in 2008.

Now that the tax incentive is ending in April, will housing prices tank again?

Prices could drop to new lows since people who would normally have bought in 2010 may have already purchased to get the tax incentive. We used to see that when we were in commissioned sales; if you had a big sale one month, the next month sales were practically non-existent. We knew that those big sale months simply stole from future sales as they encouraged people to buy sooner.

Guess we’ll have to wait until December to know for sure!