February 2010 Unemployment Rate Holds

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here’s an article I found titled, “Jobs report shows unemployment unchanged,” by David Goldman…

This article is great. It has a chart that shows the number of jobs lost monthly since January 2009 to present. I’m not sure why the author is attributing the better than expected jobs numbers to the big snow storms last month. I would think that something like a blizzard would be a negative on businesses and prompt more lay offs. Whatever though.

The important part to take away from this article is really that unemployment stayed unchanged from last month at 9.7%.

I love it! If you’ve been following my articles you know my theory on how the economy is going to start taking strides forward if the unemployment rate holds and improves a little in the next few months! By the unemployment rate not getting worse, I think it’s still supporting my hypothesis that the unemployment rate has peaked in this recession. Check this out… I gathered this info from the Bureau of Labor Statistics to create a chart I can update each month to better illustrate the historical trends of this recession’s unemployment rate.

I started this chart at the beginning of 2007 because that’s when we as real estate investors started seeing our own recession start to get ramped up. I guess the recession by definition didn’t get going until about the beginning of 2008. As you can see the unemployment rate consistently increased for two years (2008 – 2010).

Now we’re creating a nice peak right at the 10% area. The “9 per. Mov. Avg.” is just a 270 day moving average I tossed in there because it’s pretty cool to see that our unemployment rate just crossed under it. So it’s awesome to see that we broke through that floor.

Anyway, here’s my silly little hypothesis:

Get about 3 to 5 more months of the unemployment rate holding or dropping and the recovery will be 100% full force back on! Why? The media & the Government will start to make a big deal out of it’s kinda good news (only kinda good because the unemployment rate will still be over 9% most likely at that time). We’ll see everyone start to believe that the recessionary times are over, and businesses will start rocking again.

My guess is that the unemployment rate will drop from the then maybe 9.4%ish to about 7.5% by the end of 2011. The basis for the 7.5% rate guess-timation is that in our last recession it took about 24 months to gain about 50% back of the recession’s unemployment rate original run up. History has a tendency to repeat itself.

This recession’s unemployment rate curve’s slope is similar to that of the prior recession when it was increasing rapidly. This recession was just over a longer period of time so the unemployment rate increased at a similar velocity but over a longer period of time (making this a much worse recession for unemployment than back in 2001).

About half of the original run-up in unemployment rate is roughly 2.5%…..so it makes sense to think that we could be looking at a 10% – 2.5% = 7.5% unemployment rate in December 2011 and then of course possibly we’d go all the way down to 5% in December 2013. No – it’s not very scientific, and Yes – it’s a blind guess, but here’s for taking a stab at it anyway.

What are you’re guess-timations?

Do you think that an improving economy over the next 4 years will be good for private money recruiting or bad?

Let’s hear it!!

Obama $1.5 Billion Housing Plan Needs More Explanation

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here’s an article I found with a video that announces President Obama’s plan to spend $1.5 billion on a new housing aid program…

The MSNBC article has a video of President Obama’s Feb. 19 speech at a town hall in Henderson, Nevada. The event was really a campaign push for Dem. Senate Majority Leader Harry Reid who is behind in the polls for the pivotal Nevada 2010 senator race. Obama’s speech paid Reid lots of compliments for his work in Congress, talks at length about the economy, touches on health care, education, green energy and announces a $1.5 billion housing aid program.

Of course, the housing aid program is what I’m interested in researching.

$1.5 Billion In Housing Aid… What Does That Mean To Investors?

The MSNBC article doesn’t do a very good of a job detailing the $1.5 billion housing aid program so that’s why I also am highlighting the Business Week article (it does a little bit better anyway). It’s probably best to understand the A-Z for this news story by watching the MSNBC video and then reading the Business Week article.

The problem for me is that even after I did, I think I only understood about the A-K of what this program is doing, unfortunately. The news applies most directly to those who live or invest in real estate in California, Florida, Nevada, Arizona and Michigan (the leading indicator states).  These are the states that are said to have been hit hardest by the housing bubble bursting. The idea is to target the worst of the worst areas and help them out first and foremost.

Okay, so after reading these couple of articles and watching the video a few times………umm, I’m still a little in the dark about exactly what they are going to do with the $1.5 billion. The best I can find in the info I’ve researched are two comments that stick out a bit, but they are mostly just clues… I think.

1. In Obama’s speech he said, “…and that’s why we’re buying up vacant homes and converting then into affordable housing.”
2. In the Business Week article Diana Farrell, deputy director of the White House National Economic Council, says “The aid is intended, in part, to test programs that reduce principal or extinguish second mortgages where borrowers owe more than their homes are worth.”

Is the government really going to start buying vacant homes?

Did Congress get together and decide, Ah Ha!!! Here’s how we make some $!! Let’s become real estate investors and start buying the cheapest houses out there! Yeah, yeah yeah! We can get the public’s buy in because we’ll say that we’re creating jobs for contractors to fix them up and boost realtors and loan officer’s production! Then we can sell the houses and earn BIG PROFITS!! Yippie!! LOL!

I doubt that’s what President Obama meant but what if that’s part of their plan a little bit? Could the US Government be your competition buying the short sale deal you’ve been working on right out from underneath ya? Again, I don’t think that’s the case, but dang if it doesn’t sound like it from the speech. I’m not serious exactly; just a little humor.

Diana Farrell, on the other hand, notes that the program will help folks that are upside down on their mortgages. Reading in between the lines I guess that by eliminating second mortgages or lowing mortgage balances in general will thus lower monthly payments. Lower payments on a mortgage will help some people avoid foreclosure.

That’s great if you have a job with an income that allows a borrower to make regular payments. Hello? The unemployment rate is still about 10%!! I guess I’m a bit skeptical about where this money is going right now because I can’t seem to understand exactly how the relief is getting handed out.

Housing Plan Questions…

Let’s start by asking the questions…. so who qualifies for this one and exactly what should one expect if they get approved?

Wouldn’t it would be great if there was one central location that anyone could contact, tell a specialist on the recovery act, stimulus stuff, tax incentives & credits, etc. what their situations are and then let the specialist look though all the cool recovery & stimulus stuff out there and in an instant, “poof” it’s in place for ya?

I guess if I had it my way, I’d just make the $1.5 billion available as private money that real estate investors could grab up at a really low interest rate (i.e. 1%)!

We’d be out there pulling down the funds and rejuvenating whole neighborhoods left and right! Then again, it’s kind of small potatoes. Why pay so much attention to this anyway I guess? There was something like 2.3 million houses that entered into some stage of foreclosure in 2008.

$1.5 billion is only the equivalent of 10,000 $150K homes anyway.

In Summary

To sum it up… as real estate investors we should all have our pulse on not only the real estate market… but other factors that can affect our businesses such as new goverment regulations or bills like this one.  I only see more and more of this type of action happening as elections in 2010 draw closer to sway public opinion that the voters are being “helped out” by the government… and this “help” could mean competition for real estate investors in the short sale market (short term competition), but it could also open up a whole new market for savvy investors that we don’t even know about yet.

 

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How to Get Private Money for Your REI Deals in 7 Days FLAT

Just opened my email box to another killer testimonial this morning …

You’ve gotta check this out. This dude bought our Private Money Blueprint (PMBP) on Feb 18th … and within 7 days, locked up $100K in private money. And not only that, he got 3 referrals!

Check out the screen shot of his email …

Did you notice that his lender told him, “Let’s start with $100,000 and if it looks good, we’ll go big time.”

How about that!

This is another example of real world every day people getting private money in today’s market.

Happy Private Money Getting!

Patrick & Trevor
The Private Money Blueprint Team

** These private money results are not typical. The “average” person doesn’t take any action, and therefore, gets no private money.

All Eyes on the Job Market

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here’s an article I found which is all about the job market and other economic news…

This coming week is packed full of big economics news with the “main event” coming on Friday when we get our February job’s report.  This article is great because it lays out the economic indicator news that’s to be reported each day of this week.  It also has a little nugget of info about what’s going on with Greece and their financial mess.

How’s this for great news!!!

On the upside, the fourth-quarter reporting period has been positive, with earnings jumping 201% from a year earlier and 16% from a year earlier without the financial sector. Last week’s revision to fourth-quarter GDP growth was better than expected, with the economy rising at a 5.9% annualized rate, the fastest pace in six years (Twin).

Even if the expert’s expectations for the reports this week are mixed; we’ve had something to be pretty happy about.

I’m still hoping that we’ll keep the unemployment rate under last month’s figures.  If you look at the chart (below) of the past decade there is certainly a peak that’s forming right now.

I’m still super hopeful that this next round of unemployment numbers comes in lower than last month’s 9.7%.  If bit by bit, the unemployment rate keeps trickling down (even if it’s just a 10th of a percent each month), this marginally good news COULD go from something only economics geeks like me blab about to mainstream excitement.

Let’s say over the next 90 days the unemployment rate keeps falling (even by the slightest of margins), the media will probably take hold of it and do what they do best; make mountains out of mole hills!  I hope this all comes to pass because I could easily see the media reporting this “GREAT NEWS” (well, not really considering the unemployment rate would probably still be over 9%), and pound it into all our recovery hungry heads that the recession is over and it’s time to get back to spending!

Think about it, it would likely drive consumer confidence and we’d see recovery on both the consumer side and business side. Maybe it’s a bit artificial, but the spending could drive more job creation and drive us right on out of the current struggles.

As soon as this happens, we as investors will be happy to see mortgage applications increase, nudging housing demand back a little, thus increasing home values a bit.  Interest rates would start to go back up a hair (but not necessarily for private money loans because we are independent of the dang banks, of course), banks would get a bit more profitable (great for Wall St.) and then POOF….we’re really truly on the road to recovery in the real estate market.

One other thing to note about my little hypothesis is that in this recovery relay race, we’d finally take the baton back from the government and they would be able to slowly retreat from all these expensive stimuli packages.

What do you think?

Private Money On Demand Training – Private Money Through Public Records

So, you think you’ve tapped out your “warm market” and are already networking like crazy? (the reason we say “think” is because theres always new networks and “circles of influence” you can tap… ALWAYS).

Well… how about finding private lenders in YOUR MARKET who are ALREADY PRIVATE LENDERS for other real estate investors?  That’s what the PMBP P.M.O.D. Training and “Swipe and Destroy” Methods are all about.

In the training below you’ll learn:

• How to use the public records to find active private lenders in your area
• What to search for in the public records to bring the lenders from “behind the curtain”
• What to do (and NOT to do) to contact these lenders to stay SEC compliant
• What one “clearinghouse website” to go to find your public records online (this is a cool tip)
• How to build credibility w/ your private lending prospect
• How to “covertly” get lenders into your program by getting them on your cash buyers list
• … and more cool actionable stuff.

Private Money Power Persuasion Phrases that Convert Prospects to Lenders

Wouldn’t it be incredible if you could make a few simple changes in how you communicate your private money lending program and double even triple your conversion rate?

Heck yeah it would!

Well, I’m about to tell you – what took me years to learn through trial and error and countless hours of study in sales, marketing, psychology, persuasion, communication – 3 word-for-word “private money getting” power persuasion phrases … phrases that immediately disarm your prospect, gather needed information, and put you in the most powerful negotiating position possible: the reluctant role.

While these power persuasion phrases may sound simple, do not mistake associating simplicity with small value.

Remember as Albert Einstein said,

“Everything should be made as simple as possible, but not simpler.”

Or as Leonardo Da Vinci put it,

“Simplicity is the ultimate sophistication.”

Put these simple private money lending power persuasion phrases to work for you … and start getting the private money, the cash you need for your deals.

Private Money Lending Power Persuasion Phrases

Watch the video below …

That was a small clip from my private money getting presentation I did recently at Josh Brown and Lou Castillo’s event. I’ll be releasing more private money videos soon … so stay tuned!

Put your questions, comments, and feedback in the comment area … and let me know how I can help.

Happy Private Money Getting!

~ Patrick

P.S. Want more great private money getting videos? Click Here to Subscribe NOW!

5 Best Real Estate Markets for 2010

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here’s an article I found that will show you 5 markets you may want to look at in 2010.

Okay, with 2009 behind us… it’s time to start looking at 2010 and how we can all kick some more butt in the real estate market. With our forecasts… getting private money for real estate in 2010 should be about as plentiful as it was in 2009, so don’t hesitate to shoot us a message if you have any questions on that front anytime.

Okay, according to a recent article at the MSN Real Estate site… most of the major real estate markets in the U.S. will still be down in 2010… but, they’ve forecasted these 5 markets below to be the top 5 real estate markets in 2010 as determined by forecasted appreciation rates:

The top 5 cities for home prices

1. Tacoma, Wash. (+2.44%)
2. Memphis, Tenn. (+0.99%)
3. Pittsburgh (+0.89%)
4. Charleston, S.C. (+0.18%)
5. Seattle (-0.50%)

These five markets are culled from data on Moody’s Economy.com and based on the largest 100 metro areas.  There are a few other really great points in the article in addition to the “top 5 markets” that you’ll want to take 2 minutes to check out.

I’m a fan of this article because it raises a few great points of interest and is in line with my personal philosophy of how 2010 should play out.

Scherzer writes (and I feel strongly that this is also the case), that “even though there are government stimuli in place (tax credit) and low interest rates (which help stabilize the market’s values) the leading factor that’s going to lead to increasing home values is a turn around in the labor markets first and foremost. “

The article lists their potential top 5 cities for the housing market in 2010.  A leading factor used to determine the values includes looking at the labor market & the economies of the listed cities.

She includes some great statistical content about 2008, 2009 and probable 2010 foreclosures and also how they may relate to ARM mortgages making their first adjustments.  Don’t miss the link for RealtyTrac and all the foreclosure listings (http://www.foreclosurelistings.com/).  If you don’t know about this website, you should check it out ASAP!

Note that if you are in the business of buying foreclosures, this article notes an expected increase from 3.2 million foreclosures in 2009 to 4 million in 2010! As we know, one of the smartest ways to buy real estate is by using private money.

If this is your business, I think it would be smart to be aggressive recruiting funds now to take advantage of this next huge round of “low hanging fruit” to buy this year.  There’s some great free articles and resources here on this blog under the “Private Money Articles” section that you can refer too.

So, whether you’re investing in one of those 5 markets or not… it doesn’t really matter.  There’s deals everywhere and there’s buyers everywhere… just clarify your strategy in whatever real estate market you’re in and get ready for 2010 and the continued wave of sub prime and Alt A foreclosures (and the wave of commercial foreclosures starting to pile up too).

- Tim

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Are You Making These Common Private Money Getting Mistakes?

Hopefully, you either haven’t yet made or never will make these private money getting mistakes.

One of the best ways to learn something new, is to learn what NOT to do. In this instance, mistakes to avoid.

Learn from these common private money getting mistakes so that you get private money for your deals safer, easier, and faster.

3 Private Money Getting Mistakes You Must Avoid

1) Advertising Directly for Investors Without Registering with the SEC

Here’s an example of how NOT to advertise to get private money:

Investors Wanted!

10% Returns Backed By Real Estate

Guaranteed!

Contact us at xxx-xxxx

If you were to run an ad like this in your local newspaper, that would be considered a general solicitation. And without registering with the SEC, that could land you in some big time trouble.

Here are a couple tips …

Never, and I mean never, say that an investment is guaranteed. That could get you in major hot water with the SEC … not where you want to be. Like Benjamin Franklin said, “Nothing is certain but death and taxes.”

I recommend that your primary strategy for finding private money leads is to network at REIA meetings, chamber of commerce, rotary, small business associations, BNI, and other similar organizations.

But, for those of you who still want to advertise, here’s how to structure your ad so that you stay SEC compliant.

Position your ad as if you’re teaching how to become a private lender rather than directly offering an investment. For instance …

Learn How to Make Great Returns

Backed by Real Estate

Contact us at xxx-xxxx

That would not be considered a general solicitation.

2) Presenting a Specific Deal During the First Appointment

The private money getting process we teach our Private Money Blueprint students entails getting a prospect into a formal appointment and presenting your private lender PowerPoint presentation.

During the presentation, rather than presenting a specific deal, go over general terms for your private lending program.

You see, it’s much easier for someone to object to a characteristic of a specific deal than to an ongoing investment program.

If you present a deal at this point, your prospect may not have the required funds, may not like the property, may not be able to meet the time frame needed to fund the deal.

However, once you sell someone on your investment program and you find out exactly what range of funds they have, time frame available, expectations from a good investment opportunity, etc., you can transition to passing specific deals by him or her; deals that match the information you already elicited.

3) Telling Instead of Selling

To get private money, it’s not about you telling a prospect about you, about your company, about your real estate investing strategy, about your private lending program.

True, that’s part of it. But only part.

You’re selling an idea; an idea of how to make a good return on investment dollars. And the best way to sell that idea, believe it or not, is by asking good questions; the type of questions that elicit information about your prospect’s pains and goals.

Here are some good examples of questions to ask when borrowing private money.

Making mistakes in the private money game can cost you dearly. By steering clear of these 3 common mistakes, you’ll be on your way to getting private money safer, easier, and faster …

Happy Private Money Getting!

If you guys and gals have any questions, put ‘em in the comment area.

- Patrick & Trevor

7 Tips For Buying A House In A Down Market

by Tim Krulia – Private Money Blueprint CFO

As part of our quest here at PMBP to give you the single best resource on the financial aspects of growing your real estate investing business (aka, we help people find private money quickly, easily, and abundantly)… here’s an article I found that will help you sharpen up on buying in a down market.

The article is a “basic” buy in a down market summary… but, it goes to show one extra thing that I’ll summarize it here for ya to save you some time

Basic… But Profound Tips To Buying In A Down Market (or any market for that matter)

This fantastic (simple but true) article brings up some dynamite points to remember when searching for your next deal… in ANY real estate market. While I’m not going to go over the whole article and all “7 Tips” for you (you can check out the full article over at Investopedia).. I’ll go over a couple of the ones that are more noteworthy for us investors.

Do Your Homework Upfront… It Saves You Hardwork On The Back

The article says to, “#1 Do your Homework!”

For me, the bulk of my time when acquiring a new property is in the due diligence phase.

Before I buy, I want to see the comparable sales of neighboring properties.  (we have a great 75 minute full tutorial in our PMBP members area for our students on A-Z analyzing deals and finding comparables… good stuff. If you’re not a member… learn how to become one here).

On the MLS you can look at the houses that sold with similar sizes and characteristics of your target property.  You need to check out the MLS’s pictures of the interior and exterior of the comparable properties because there is a strong likelihood you’ll want to renovate your acquisition to meet the standard of the neighborhood.  Also, the pictures (and a drive by) will show you what “style” of house it is.  “Style” can mean a big price difference between two houses that are otherwise pretty much the same #’s wise.

Housing Styles In Brief

For instance, in our part of the country people really like “Craftsman” and “Ranch” style homes (as bread and butter homes that sell fast).  So, those will be more popular and get a bit higher price… then lets say… a Victorian may in our area with the same basic house specs.  So, learn what styles are the most popular in your area… because they’ll need to go into your comparables analysis.

Here’s a cool article that does a run down of “housing styles” so you can save that for future reference.

Crunch The Numbers

Before you make an offer, for heaven sakes crunch the numbers first!  Know what your profits and ROIs are going to be as a worst case scenario for the different exit strategies you have in mind for the property.  Always have a maximum amount you are willing to pay for the property and if you can’t get it for that number…….walk away, don’t look back and find the next deal.

Once you can get to a point in your business where all of your property acquisitions are 100% #’s based (no emotion) and you set specific buying criteria that you MUST meet or you walk… you’re life will be much easier and you’ll never have to agonize over negotiations.  If you hit your number… awesome… it’s a deal. If you don’t, no biggie… onto the next one.

Get Your Ducks In A Row

The article’s second bullet point is to “Get Your Ducks in a Row!”  If you are following the Private Money Blue Print course, you are already going to be in great shape to have the cash you need to POUNCE on the smokin’ hot deals the second they pop up.

Great deals tend to have a short shelf life.  If you have your financing solution ready, you’ll be light years ahead of your REI competitors to win the super deals that you may have otherwise lost using SLOW traditional methods of money getting like using banks that can take 30 days to close a deal (IF you can even get qualified with a bank at all)!!

So, that was a quick short primer on buying… especially in a down market.  The rest of the article on Investopedia goes over it a bit more… but I just wanted to highlight the “#’s” side of it since that’s what my position is in our real estate division.

So, enjoy… let me know your comments below!

- Tim

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How to Use Facebook and Twitter to Get More Private Money

Ok, I know what you’re thinking …

“Yeah right Patrick. Anyone who thinks they can use Facebook and Twitter to get private money is full of crap.”

… and I don’t blame ya.

I thought social media marketing – using Facebook and Twitter to generate leads for business – was just a bunch of hype too. I thought it was a complete waste of time.

But, that didn’t stop me from testing these new marketing platforms out for myself. And I’m sure glad I did.

Check out the video below to learn how to use Facebook and Twitter to get more private money for your real estate deals …

Good stuff, ehhh?

If you’d like to connect with Trevor and I, here are our links …

Friend Patrick on Facebook

Friend Trevor on Facebook

Follow Patrick on Twitter

Follow Trevor on Twitter

And if you’d like to do a little social networking while you’re over here, put your Facebook and Twitter links in the comment area below.

Let us know how we can help you guys and gals out …

Happy Investing!

- Patrick & Trevor

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