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I’d like to be of some help! I’m not comfortable sitting on the sidelines, waiting for the President and Congress to do something. That is, they have already done something, several things, some of which look promising. But surely they are not the only ones who can have an effect on the economy!
As I have been thinking about it, it seems there are a few areas where an ordinary citizen might be of help. Certainly, we can keep up the payments on our houses, finding a way to make extra money if needed, and aggressively pursuing refinancing if the loan is variable and escalating treacherously. Depending on the size and layout of your house, you could get one or more roommates. Even housing a young person who will help with babysitting could be advantageous to both the young person and the family. Rent in exchange for half-time child care? Cutting those child care costs could help with the mortgage. Let’s get creative and use some of that American ingenuity we seem to have let go dormant.
During World War II, Eleanor Roosevelt annoyed the Department of Agriculture by planting a large garden on the White House lawn, and encouraging all Americans to plant one as well. (The USDA was apparently concerned that this would harm the food industry.) The people responded. Their grocery buying was limited by severe shortages and rationing, and the Victory Gardens they planted kept everyone in nutritious food. According to Living History Farm, “The result of victory gardening? The US Department of Agriculture estimates that more than 20 million victory gardens were planted. Fruit and vegetables harvested in these home and community plots was estimated to be 9-10 million tons, an amount equal to all commercial production of fresh vegetables.” Some organizations advocate reviving the Victory Gardens program to promote sustainability, improve nutrition, and perhaps even make a dent on the junk food obesity crisis. I’m not the only one promoting this outlandish idea. This blog focuses on more than food, but on sustainable living on earth. Much food for thought!
What about job loss? Well, of course hunting for a job is the first priority. There’s help that is offered by the state or former employer, such as perfecting the resume, learning new skills, and being as open-minded and flexible as possible can help a person connect with a new job..
It’s not uncommon for people who lose their jobs to finally start that business they always wanted to start. This can be a very good idea, if carried out thoughtfully and carefully. Investing the last of the grocery money in ventures or educational programs with limited promise is not thoughtful! Seek help from the Small Business Administration, SCORE (Senior Corps of Retired Executives), and the library have ample resources. So does the internet, of course, but sometimes it’s harder to evaluate something on the net, whereas the SBA is unlikely to run a scam on you!
If we are not unemployed, what can we do? It would help the economy if we all went out and spent money on new stuff, whether durable goods, restaurant meals, teeth-whitening – almost anything. And this idea is not new, but it’s important: when we do buy, we should buy locally, and buy American-made, when we can.
While it would be helpful for us to do more spending, it’s not a very good idea unless one has a whole lot of discretionary income. Saving more, not spending, is the wisest course for us right now. Investing, if there are discretionary funds, and building a business so that it could support more jobs, would be great.
If I weren’t involved in real estate, I might be buying things at tag sales to sell on eBay, learning new computer skills at home or at a free class at the library, doing volunteer work where my community had been hit the hardest (the schools may need our help, the poor certainly need our help, and I’m sure there are some services in your community that have recently been cut and could benefit from volunteer help.
This post needs help! Do you have any ideas about individuals or groups taking action to improve the economy?
I have an offer in on a multi. The owner has some complicated blanket mortgage (a mortgage that covers multiple properties) and my offer is lower than the amount he has financed on this property – its share of the blanket mortgage. So they’ve asked for extra time. I think that means my offer is going to be accepted, right? Or we’d be negotiating for a higher price. So waiting on the multi.
A partner and I are going to look at a vacant, bank-owned house tomorrow. How bad will it be? Something we want to rehab and sell to a first-time buyer with that snazzy new $8000 tax credit? Or leave the rehab to someone else, and flip it quick to a wholesale buyer. Dizzying!
A full course for commercial real estate investing arrived in the mail. This is the bad part: I can’t really remember ordering it. Could it have been free? Under $100? Full refund guarantee? Trying to find out now. I don’t think I need any more “niches.” Maybe I even need fewer. This is the kind of fool you are after listening to a “free, information-packed webinar” late at night. The hype escalates and your emotions are out of control. I am going to stop listening to them! I stopped listening through to the end, when the sales pitch starts in earnest, but I think I have to give them up altogether!
So many of us are vulnerable to high-pressure advertising. I can feel it in my body when it starts to work on me. I have to set rules for myself, stay tough, and remember that these things always look better during the pitch than when you open the box at home.
Hype-filled “educational” sales pitches aside, this is better than work, these days. At work I’m looking over budget cuts and wrestling with the likelihood of more layoffs. Still working on budget cuts before July 1. More cuts will come with the beginning of the new fiscal year, on July 1. Will the President’s stimulus package reach our corner of the human services world? We are not shovel-ready.
It doesn’t look like I’m in danger of getting laid off in this round. But I have to continue to build my alternative. Even if I don’t lose this job, I still have to take back my retirement savings!
I’m not the only one postponing retirement. I found some not very startling news tidbits on a blog about reverse mortgages: lots of people 45 and older have postponed retirement. And a really sad story about a young professional laid off, his unemployment benefits soon to end, on another blog that describes the ripple effects of just one layoff. This young couple must scrimp, missing visits with her family, putting off having a child, and hope dwindles as the weeks grind on.
The discomfort is rumbling through the blogosphere; it somehow feels more personal than all those TV news stories. Is is just an accident that I have this urge to fight back, to take back what – well, it feels like taking back what the stock market has taken from me? Mostly it seems like luck. I decided years ago that the stock market couldn’t be trusted with all of my money, and that I would have more control over it if I invested it in real estate. Sure wish I had invested more in RE in the past 5 years! But I have the good luck to have some assets left, to have some understanding of how real estate works, and to recognize a good buying time when I see it.
The anxiety is with me every day, though. At church there is discussion of the canvass, of the opportunity to give instead of hunkering down and pinching pennies. Giving during a time of need and uncertainty can be very freeing. I can give freely when I feel confident that this is going to work. But the anxiety lives in me. Every encounter is a chance to “network;” to tell someone what I am doing, partly with the hope that they might become interested in joining me and investing too.
And every day at the computer there is more information to take in. Another house that seems vacant, an owner to hunt down. An offer made on an 8-unit apartment building, setting off the process that involves endless paperwork and more anxiety. I have to revise my P & L – seems since I last wrote it (February 1), there’s a little more L(oss) and a little less P(rofit). I can’t wait for this all to start to produce something! It’s too discouraging to keep watching my assets shrink.
Anxiety, late at night, eating away at the sleep I need and the tranquility I crave. Shared by so many of us, young couples, those who had hoped to retire soon, and whole communities devastated by dominance of a dying industry. Anxiety we share. Can we pull together to combat the fear, instead of living with it in our own separate worlds?
The work of finding wholesale deals in real estate, a perennial favorite among starting investors, involves finding vacant houses, and tracking down the owners. This should be as simple as finding the name and address in the tax assessor’s list, and sending a letter. It appears that it’s rarely that simple! Maybe the towns and counties don’t keep their internet listings updated, or maybe the location (or identity) of the owners is really pretty uncertain. This is usually the case, I’ve found, with estates. If there were only distant relatives, or the relatives lived far away, these houses seem to languish in probate and fall into neglect and disrepair. Very sad, but said to warm the heart of a true wholesaler, who buys these properties and renovates them to sell.
An investor can gather a (flock? pack?) of “bird dogs,” those who will track down the vacant houses (and sometimes track down the owners). Finding the owners sometimes seems nearly impossible, and using a skip trace service or a private detective becomes the last resort. Didn’t know real estate was so filled with intrigue and adventure, did you?
I have too many irons in the fire – I am making offers on 8-family properties in a nearby town, managing a (herd?) of bird dogs, planning partnerships with other investors, and gathering interested friends who might want to get involved. I am not recruiting anyone; it’s not my style and it’s really not necessary. When people ask what I’m up to, I tell them. When they ask why, I say I already own a couple of rental properties, and since the stock market ate my retirement and real estate is on a half-price sale, it seems like the only logical step. Generally, people want to hear more!
Many of my friends are nearing retirement age, too, and have watched their mutual funds sink into the deep, dark murky waters that have been undisturbed for years now. A sense of paralysis settles on your shoulders. Should I sell? Now? When it’s at its lowest? That doesn’t make much sense. However, I have sold much of mine, and put the leftover cash into a self-directed IRA. Shrunken though this nest egg may be, it can now invest in real estate. I know how to make money in real estate. I make money from my other properties and I bought near the top of the market! I just hope I’m not too cocky. What if I lose money this way, too? I’ll be working for another decade or two. Or laid off.
The swings between worried concern and confident forging ahead aren’t as pronounced as they were earlier. Now I am a little less exuberant about real estate, which is a good thing! Last week’s plummetting Dow keeps the other voice close by, the one that says it’s going to keep going down until there’s nothing left. I’m withdrawing more soon for this 8-family. Forge ahead.
It’s not unusual for me. I get involved in something, and I throw myself into it. I think it serves to distract from whatever’s not working right in other aspects of life.
In the past 2 years, it was stringing beads. I made beautiful necklaces, earrings, wore different ones every day, sold some to friends and at craft shows, hung them in the bedroom like artwork. Some of them are like artwork. Before that, it was cake decorating. I think this was to keep a connection with my daughter, who was becoming a pastry chef (although, is not very interested in cake decorating). I took classes for 12 weeks. I gained 14 pounds.
I’ve been absorbed in real estate before. I bought rental property. I read everything I could get my hands on about landlording and investment. I searched for multifamily houses for months. After I bought and rehabbed a two-family, and bought a single-family, I got very busy at work and didn’t have time to pursue it.
Luckily for me, my retirement funds shrank and my patience for working for many more years shrank as well. The economy also, and my chances to remain employed – all shrinking. This is lucky because I am so easily, happily, and readily obsessed with hunting for real estate. I really love it. And the more involved I get, the more types of property I’ll consider, and the more people I meet who might want to be involved.
Too bad I don’t get enough sleep. Too many properties to be searched online! I can turn off the computer, though, put on a training CD, and be lulled to sleep by quiet discussion of purchasing land and reselling it at below-market prices!
Moving into real estate investment feels so much better than work right now. This is the main issue at work: I lack confidence that things will be okay. (Not so in my real estate ventures.) In a recent memo to the staff, I wrote that the changes being implemented did not include layoffs, but of course, that could change any time after July 1st. Or, for that matter, any time before July 1st. This, my friends, is a lack of confidence. And the changes being implemented feel as though they will cut the heart out of the program. Maybe they won’t, but it sure feels that way.
One of my colleagues was fed up with the bitter complaining and negative attitudes of so many of the people around us. “They act like they are the only ones. The whole state budget is shrinking, and it’s not just our jobs, our state, or our country. The whole world is suffering through this recession.” Her husband is a financial planner, laying awake nights.
I’m not the only one with a crisis of confidence; some economists say that a lack of confidence creates and continues the recession in our economy. When consumers regain confidence, they’ll start buying above and beyond their basic needs. It’s probably more complicated than that. Are the bankers and the well-paid failing investment bankers lacking in confidence?
The confidence issue is buzzing on the blogs. Standard economic theory, for example, or this example. It’s personal, too – blogging is so personal – like this, this letter to Santa, or this list of friends, all job-seeking and uncertain.
I’ve been gaining in confidence, though, in my real estate ventures. Much of what one reads in real estate fills you with a sense of confidence, certainty, and well-being. Frank Kern’s sales system is very explicit about this – he calls this part of it “seductive selling.” Strictly speaking, Kern’s specialty is not real estate, but internet marketing. But feeling good and confident is the focus in many sales materials, and goodness knows there is plenty of pitching in most of what one reads about real estate. I am easily seduced; I’ve purchased a few more of these expensive real estate “home study courses” than I really need.
But that confidence is short-lived. Good sales techniques, no doubt, but not life-altering. I am gaining in confidence because the work I’ve put into this is starting to pay off. Potential investment partners turn up from idle conversation I made at a party, at a medical appointment, in the neighborhood. I am not using a practiced “elevator speech.” I’m just letting people know what I’m doing. As a close friend (who is an incredible salesman) told me, “I’ve found it doesn’t take a lot of persuasion to get people interested in making money.”
Potential partners with experience, particularly experience that I lack, flood the meeting room at the real estate investment association (REIA). After a few REIA meetings I find it’s easier to talk about what I want to do, probably because I know a little bit more about what I want to do. Especially useful are the “speed-networking” meetings, modeled after “speed-dating.” This is so much fun it almost makes one want to try speed-dating.
Confidence builds when I mention what I’m doing and someone’s eyes light up, so I say a little more and they listen really closely, and then I ask them to call me if they’re interested. I find deals, and there are more than I can invest in, so I have this problem of choosing among them. This works for me because I can’t ever promise huge returns or make exaggerated claims. Maybe if I were playing a salesperson in a play. But I can talk with enthusiasm about something that excites me. Real estate is on a 40 – 50% off sale! Who wouldn’t be excited?
(Not everything for sale is 40 or 50% off. You still have to hunt down and inspect carefully and triple-check your numbers before you buy!) I’m not good at “seductive selling” – I told you! But I can let some confidence show.
Surely this is a piece of luck. An experienced birddog (a birddog spots likely leads for a real estate investor), who brings in a house or two a day, and all I have to do is . . .
What am I supposed to do again? Oh, yes, track down the owner. Contact the owner. Ask if they would like to sell. Make ridiculously low offers. We are supposed to do lots and lots of these.
It’s still daunting! Yet I know the steps, and I have one experienced birddog delivering the goods, and a bunch of others willing to try. I have some potential buyers collected – sure could use some more! If you want to buy great wholesale deals in Massachusetts, just go to realhousesbuysell.com and check it out. No spam will come your way.
Unfortunately, I’ve subscribed to bunches of newsletters, email lists, and assorted junk mail and the new offers, new ideas, new webinars that come in are hard to turn down! Each one sounds better than the last. I have determined to stick to the methods I’ve chosen. Pick something and see if it works. If you pick something new every month, none of them will work! But there’s a danger of it if you are at all vulnerable to “listen to this free presentation and learn about how we do [an incredibly lucrative easy method]! No mention until the end that it’s $1,400 to really learn how to do it, and that’s with $2,000 in free bonuses and half off the regular price!
Sigh. Working quietly as a psychologist wasn’t all that much like this. I was the salesperson, using a gently persuasive approach to sell people on themselves. To instill a sense of being worthwhile, of rightfully taking up space on the earth and breathing the oxygen. No hard sell – it would have been spurned immediately.
Now I must resist the hard sell and focus! I do believe I may be becoming a wholesaler!
Here’s another blogger determined to make lemonade from our present economic lemons. I wonder how many hope to find what we need in entrepreurship. In response to the bottom dropping from the stock market, it makes a certain sort of sense. Oh, and then there are all those who have lost a job. With no new jobs on the horizon, starting a business can be a long-delayed dream. Or just a necessity.
But long live optimism!
After I placed an ad on Craigslist.org, I checked 3 or 4 hours later and I had 5 “bird dogs,” that is, people willing to spot vacant houses, take pictures, and get paid for it. One of the people is a property inspector! Probably knows more about this than I do.
Does this mean in a few days I’ll be posting pictures of houses? It all seems faster than I imagined. I expected a few weeks to get ready! I suppose if I don’t start, it’ll never happen.
I also got leads, possible partners, connections, joint venture potential – an entire evening of intense networking at the Massachusetts Real Estate Investors Association (Mass REIA). Modeled after “Speed Dating,” the REIA’s Speed Networking event is exhausting, incredibly helpful, and an awful lot of fun. And thank goodness. Even though the birddog ad in Craigslist got surprising results, much of this process is plodding and painstaking, making it hard to really launch into real estate investment. Painstaking, plodding, with bursts of fun, and, it is hoped, positive financial results.
I bought a program called One Day Dough with iFlip (Camerondirect.com) and built and advertised the birddog list tonight! I’ve also made an offer on an 8-family property. Sadly, the owner has listed it with a residential real estate agent (over 4 apartments makes it a commercial property). The agent knows nothing about commercial property – it’s almost embarrassing, because she doesn’t know what she doesn’t know. It might make this deal impossible. She insisted that before they would negotiate a price, I needed a “pre-approval” letter from the bank. This is standard practice now in residential real estate, but not in commercial lending.
Commercial lending decisions are made basically on the basis of the building: will it return enough money to pay the mortgage, plus a little more? Residential lending decisions are made on the basis of the borrower: income, assets, and credit. Commercial lenders do pay attention to the borrower, but not just income, assets, and credit. They also look at the borrower’s business experience, or landlording experience. And they’re not in the habit of “pre-approving” the borrower because it’s the deal that gets approved, not the borrower. And to analyze the deal they need the agreed sales price, and a boatload of information on the building’s expenses and income.
Finally I emailed my agent an irate note explaining all this (again), and included a link to a clear explanation of commercial lending. He forwarded it to the seller’s agent, which startled me, but apparently not as much as it startled her. He received an apologetic, almost fawning email, and the beginning of a trickle of information. And a counter-offer, countering my offer that was made a couple of weeks ago.
Enough ranting. Good night!
