The future of Real Estate

Business, Government, Investment, Money, real estate, , , , ,

Many people are wondering if Real Estate will bounce back.   Well the answer must be “OF COURSE”.

It is all supply and demand.  The run up in 2002-2005 was simply due to huge demand.  This demand was caused mostly by very cheap lending rates and how easy it was to get loans.  During this time millions of people purchased their first house.  Another factor was the reduction of the value of the dollar.  Something can go up in price while keeping a steady value when the value of the currency it is measured in falls.  This is also what happened in the 2000-2006 years.

So what caused prices to go down in 2007?  Well supply and demand again.  In many places developers were very excited about the prices going up so they ramped up production to record levels. (Increase supply) Next came a credit crunch, and the cheap money and the easy money left the system.  This made most people not able to qualify to get the house they wanted.  (Lower Demand).   To make matters worse many people felt they were at the top and that it would be a good time to sell so they listed their house for sale.  (Increase Supply).  Then in many places like Phoenix, there was a huge crackdown on illegal aliens.  Tens of thousands left their houses, many did not sell they simply just left.  Most were renters and left their lease, making the landlord have issues. (Reduced demand, increased supply).   Some people were used to the easy credit and have been living well beyond their means for years now, and when that stopped they could not pay their bills, and that included their house and they could not sell or refinance so they were foreclosed on.  (Lower demand for ownership, higher demand for rentals.  Higher supply of homes)   So with all of these things working together there was no reason for prices to not go down.

So where do we go from here, Well prices must go back up.  Builders stopped most building in mid 2007, and most places have many more people moving there than houses being built.  (Decrease Supply)  Well the credit crunch seems to be letting up, more deals are getting approved, mostly with government support.  (Increase Demand)  The lower prices are making people think twice about selling now, and many houses are coming off the market and turned into rentals.  (Lower supply for ownership, higher supply for rentals)  The illegal alien mess will not be resolved any time soon but most the people who are going to move already have.  The number of loans that have payments that reset soon is going down, also the government is making new rules to help these people keep their houses, which will result in less foreclosures.

In 1974 the median home price was 32,000.
In 1984 the median home price was 72,400 (a 126% gain in 10 years)
In 1994) the median home price was 107,200 (a 48% gain in 10 years or 235% in 20 years)
In 2004) the median home price was 185,200 (a 72% gain in 10 years or 478% gain in 30 years)

During this same time the size of houses increased from less than 900 square feet to well over 1700 on average.

So it is now a great time to invest, everything is on sale due to these supply/demand factors.  But where do you invest?

There are a few underlying economic facts to consider when picking the location of your investment.  First you want to be in a place that is growing, meaning more people are moving there than moving out.  Then you want to see how many vacant houses are on the market.   If you look at a city with 50,000 vacant houses but 10,000 people move there each month (These are the numbers for Phoenix) you can see that soon the houses will be full.   A city like Detroit is not good because people are leaving, there is no growth.  You need growth for demand, and demand vs supply sets the price of real estate.

Thanks for reading, please subscribe and post a comment on this subject.

The value of financial education is huge.

Business, concepts, Entrepreneurship, Inspiration, Investment, Marketing, Money, , , , , , , , , , , ,

It is said you never really know what you don’t know. It is not until you learn something that you really understand the value of the thing you just learned. Some things are very valuable and other have little value. For example if you get a little education on real estate investing and how it REALLY works, (Not always what you see on the TV) it will rock your world.

On the other hand I went to a 4 year university and at the end of it all I felt that I could have learned much more on my own. I am still glad I went for the social side of it all. Too many people spend their whole life in the rat race, it is like a giant treadmill, you only earn enough to get current on your bills, and if you ever make more you tend to spend more.

There are many bloggers, most much more popular than I am, that tell the masses how to save their meager earnings, and how to find deals so that they can spend less. But you really can only save so much. Even if you could save 50% of your earnings you still would take years to really get ahead. What they miss usually is that it is MUCH easier to increase your earnings than reduce spending. It takes a different kind of education, a type that most people do now learn. One nugget of info can change your life. It is much easier to live below your means if you increase you means. You do need to control costs, but spend more time increasing income than controlling costs and you will be ahead in the long run.

There is another blog, by a successful guy who gets this, I highly suggest you read his blog. It is called 7Million7Years. He recently wrote a blog about home equity, and that you should not put all your net worth into it. Read it here

Are you ready to learn how to take your investing, and your thoughts to the next level, well the next step is get educated. Read books by Robert Kiyosaki, Donald Trump, Douglas Andrew and Ric Edelman. I have found them to have the best books on real financial advise. Most of the others really give the WRONG advise. I don’t know what they are thinking sometimes.

If you are interested in real estate investing (Which you should be) my company, Capital Active, sponsors events where we teach people, for FREE, how to get started and how to be successful right from the start. If you are interested in an upcoming event sign up here.

Thanks and have a great day, leave a comment please.

Choose Your 5 Faves Wisely, it will change your life.

Business, concepts, Entrepreneurship, Investment, , , , , , ,

I have heard for years, before T|Mobile even existed, that the 5 (Adult) people that you spend the most time with will shape your life.  You will become like them in most every way.  The amount of money that you earn will be near the average of these people, your ethics will be similar to the ones they have, your hobbies will start to match them and in many ways you will reflect these people in your life.

For me I have two people who I spend a lot of time with at this time, my wife and my business partner.  But beyond that the people are always changing.  And this is the key, when I decide who to spend time with I am REALLY deciding who I want to be.  Do I want to be like my friend who is a great speaker, a multi-millionaire, great to his family and a great all around guy….well of course I do.  Do I really want to be like the people who don’t care, who just do the minimum in life, and have bad things in their life……well no I don’t.   My problem in my life, I hate to admit, is that many times I spend time with the second type of person.  I don’t really know why I do this, it is not in line with my goals but yet I find myself in this position.  Maybe it is because when I am with them I am the one who knows everything, I am the one who is in charge.  When I am with successful people it often points out my flaws and challenges me, logically this is what I want but often emotionally it is hard to handle after a while.  For a few years there I strayed off course.  I seem to have done this a few times in my life.  I imagine where I would be if I did better, if I was bold enough to do everything that I imagine.

So how does this relate to business, well your personal development is the KEY to your success in life and therefore your success in business.  You choose who are your 5 Faves, and that choice determines you whole life.  Choose wisely.

Safari on windows!

Business, Computers, , , , , , , , , , , , ,

Wow, for once I am shocked and impressed by something in this industry. Mac just released Safari for Windows today. (Click here to get it) I was not keeping track and did not know it was coming, but shortly after midnight it came on saying that I could get it. I quickly installed it, and tested it out on my PC. The graphics look about the same but slightly better. I think they up the color setting on everything, and I like it. It seems to load as fast or faster. I will have to learn how to make some changes to it that I like to have but I will give it a good try.

This is a good idea that was a decade in the making. When you use it you feel like you are using a mac. I am a PC guy but I do see how this will get many new customers for Mac. I already see their market share increasing due to the tragic and predictable failure of Microsoft Vista. (Click here to see a survey of how big a failure vista really is)

I also downloaded FireFox on the day it came out, it was not so great at first but as IE got worse FireFox got better. For most of 2007 I used Ubuntu as my OS but I finally had to break down and go back to Windows on my main computer, but I did not go back to IE. I miss many things about Ubuntu, it is a much better OS but there are a few programs I need that simply don’t exist yet in the Linux world.

Thanks mac for raising the bar. I hope Microsoft either steps up or fades away soon.

They are watching you, and keeping track of your wrongs (Unless you pay!)

Business, concepts, Entrepreneurship, Marketing, , , , , , , , , , , , , ,

What if an organization existed that kept a database on everyone. They would listen to whatever the general public says about other people, and they would record that information and save it in a database. Anyone can go and complain about anyone they like. The more people you meet the higher the chance you will have that someone will have a problem with you. Now what if they made that database available online, for anyone to search and look things up. Then they went a step farther and they would advertise on TV and on the radio the existence of their database, telling you that before you have a relationship with this other person you could look up what other people had to say about this person. They would also encourage you to report any complaints you have about others. You would be considered guilty of whatever action people have complained against you until you prove that you are innocent.

Of course they would not keep this database, and advertise for free, they would need to make money some how, so what if they let people become members of their organization, and a member would be allowed to ‘dispute’ anything in their own personal record and have it removed very easily. To be far they would have to establish a process for non members to dispute things, but of course these disputes would be given much lower priority. Also a member would be given a badge that they could show off the fact they were a paying member. If members paid a bit of extra money they even would be allowed to post this fact on their web page. The organization would advertise that you can only trust people that are members, even though membership is fairly meaningless, it only means you paid them off.

If such a thing existed would you be upset? Would you be outraged? Would you demand that the government do something about it? Would you see it as blackmail?

Well guess what, this organization DOES exist. It is called the Better Business Bureau and that have been doing exactly what I have described for almost 100 years. They pretend that they are there to protect people, that they keep detailed records on businesses but I have seen it first hand, that as soon as you pay them to become a member everything bad goes away with ease, and it is very hard to deal with them if you are not a member.

Also you have no idea what percent of people are unhappy with the company. Who is worse the small business with 10 customers and 5 of them complain or the large company with 10,000 customers where 50 complain? Well according to the BBB the larger one is worse. There are always crazy people who you can never resolve a problem with, we all know them, and companies are punished for having them as customers, even if only .1% of their customers have a bad experience they could have a horrible rating. The company across the way with 10% of their customer having problems pays the BBB off and gets away free. This is a horrable system.

So what can you do about this unfair, blackmail organization? As a customer do not trust them, do not use the BBB to handle your dispute, do not look up your vendors in their database and when you see someone who is saying they are a member, feel sorry for the delusion they live in. If you own a business or have influence in one please don’t become a member, do not give them money, and respond to complaints filed with them.

I am not mad at them, I have no problem with them personally, I just feel that such an organization should not be allowed to exist in our modern society. Maybe if they made some changes, and provided more information, including positive information it would be more useful, and also made it easier to dispute claims against you. But as of now there are many much better and more accurate information sources for those looking to find out about those they plan to do business with. Here are some examples of companies that many people consider to be horrible, but they have perfect ratings with the BBB because they pay, even though there are a huge number of complaints about them. Just read what some people had to say about these companies.
Frys Electronics: Vegas Midway auto team: Phoenix Best Buy (over 12000 complaints) ( I just love how most of the complains on these members are “Administratively closed” something only members can have done.)

Is having a budget really a good idea for you?

Business, concepts, Entrepreneurship, Money, , , , , , ,

I hear people all over the place talking about having a budget.   They say you have to plan how you will spend your money.  For wage earners who trade their time for money, and usually trade the same amount of time and thus earn the same money at a predictable level a budget sounds like a good idea.  BUT not everyone is like this, there are us entrepreneurs out there, people who trade effort or ideas for money.  If you are one of the 5% that really wants to be successful in life you need to follow a totally different set of rules, and listening to the people who are in the other mindset will only distract you and give you wrong ideas.

For this 5% a budget is silly. I don’t know how much gas I will use, or how much I may spend on eating out.  The thing is I hope I spend A LOT on gas because almost all of my driving is for business, and the more I drive then that must mean the more I made in sales that month.  The same goes for restaurants, I would love to take a lot of customers out to eat, each time I do I make about $1,000 on average.

So what are we to do in this position?  First FORGET the budgeting idea.  For the things you must buy, find the best deals and be frugal.  When deciding if you are going to do something don’t only look at the cost of the activity, like budget people do, look at the income opportunity.  In January we were planning on going to Vegas for 4 days for the CES convention, a few people questioned us if this was in the budget or not, of course it was not because we don’t have a budget, but going to this event made many changes in our business that have more than paid for the trip.

I read a blog today about a guy who suggests you cut your cable to basic to save the $200 or so per year it costs extra, and also to watch much less TV.  I agree with not watching mindless TV, but I can point to many times where I have seen something on TV that inspired me to do something different, and this action resulted in a large profit for our company.

So many people ignore the dollars, hanging there to be picked because they are so busy picking up the pennies on the floor.   The thing is that MANY people will spend 10 hours in a week, comparison shopping, looking for deals, going to 5 grocery stores to get the best deals but almost all of them spend NO TIME at all trying to find new ways to earn money.  One idea that can earn you money can be worth ALL the ideas you have to save money, yet 90% of the blogs out there on money are about how to save money.   This just shows you the wrong financial thinking that most people have.

Back to basics, going door to door.

Business, Entrepreneurship, Inspiration, Marketing, , , , ,

Back to basics, going door to door.

 

We have decided that we need a few more customers.  One of the most effective way we have found to get customers is very old fashioned, low tech but it works.  Tomorrow we are going to visit some nice office buildings, ones that contain businesses that match our target market, ones with 10-20 users.  We are going to start out by going to a mixer for our local chamber of commerce.  These businesses are large enough to generate volume for our company but small enough that they don’t have their own IT departments.  Tomorrow will be a long day, last time we did this we got one large customer that accounted for half of our sales last month. 

 

Sometimes you just gotta get back to basics sometimes in this modern age.  We are used to our websites, our blogs, our IM’s, our text messaging and all out other high tech stuff but sometimes the best thing to do is get out and see people face to face.  Need to boost sales, try getting back to basics, and meet someone in person.

Emerald Computers, a short history from a business POV

Business, concepts, Entrepreneurship, Investment, Marketing, Money, ,

I started a computer company in 1998, and thought I knew it all but I quickly learned so much more. I moved that store a few doors down and this time designed in the way I wanted all future stores to be like. I created systems for doing everything. Then I set out on opening more stores. By then it was 2004 and the market for computers was crashing, the wars by the big companies erased all the profits in the industry. By 2005 we were back to one store. By the end of 2007 we decided that the retail storefront was not the way to go. We moved to a much lower rent area, and just serve corporate and online customers, the ones with the best profits. The wars are over and the profits are back in the computer industry, and with our reduced cost, decade of experience we are ready to explode. All we need now is a capital infusion to get us to the next level. Even if we only get .5% of the US market that is still huge.

Now we are looking for investors.  People who can see the vision and are willing to go there with us.  They will, of course, share in our success.

Freedom in the modern age.

Business, concepts, Government, Inspiration, The World, , , , , , , , , , , , , , , ,

Well I have never talked on here about entertainment before but here is one that is good.  If you do or do not know there was a show called Jericho.  Last night was the last episode of it.  It was a really great, well written show.  It lost some people because for a while it went a bit slow, and most shows with arc don’t last once you miss a episode or too and the network changed it’s time slot at a very critical time in the development of the show.  (Arc is when a show is a story from one episode to the next so you have to watch them in order to understand fully what is going on.)  Basically they did not give it the chance they should have and it failed.   It was canceled after the first season, but the largest fan outcry in TV history made them bring it back.  They did so with little advertising and fanfare, and had a second season of only 7 episodes that mostly concluded the entire story.

The reason this show was special is because it touched on subject that are almost never talked about on TV in this way.  Maybe it made some of the corporate people unhappy with the direction it was going.

WHAT FOLLOWS IS A SPOILER.

Basically the story goes like this.  There are bombs that go off and destroy the 23 largest cities in the US except New York.  Communication and power stop.  Food runs out and people in rural Kansas start fighting to survive.  Well equipped mercenaries raid towns and take all the resources and kill many people.  At some point a goverment is put in place.  The old US has the east, TX is independent and the west forms a new nation.  The nation formed in the west is totally controled and financed by a huge mega corporation, the same one that ran the war in Iraq for the US and hired all the mercanires that the US used worldwide before the attack.  The corporation quickly takes part of everything.  They take away freedom, they surround each town with checkpoints so that only products that say can get in or out.  They rush a new constitution that takes away all the power of the people and gives it to the corporation.  Everything is unfair but they have all the resources and power.  Soon the people start to revolt, and by the end of the show all the viewers are calling for revolution.  The last episode is the start of this revolution with Texas shooting down airplanes from this new western nation.

Much of the show focused on the trap of giving corporations too much control of the government, which in turn takes rights away from the people.  This is something that is happening right now in the United States.  There are so many ways that our freedom has been taken.  The government is fairly corrupt.  They spend way too much, and take way too much.  They also spend so much more than they take in.   Who said the federal goverment should secure travel?  Who said they should put so much control on what we eat?  Who said that the government should run the school system in such a poor way?  We tax people so unevenly but yet the government mails out billions of dollars in checks.  The show Jericho showed how this line of thinking will only result in loss of freedom, and at some point the people will revolt.

If you told anyone 20 years ago the things that are going on in this nation right now they would have said you are crazy, that could never happen.  That is way overstepping the role of government.  I guess they are doing it just slow enough that most people don’t notice.   The education system has failed the public by creating the dumbest population this nation has ever had.

People in our nation now expect to carry ID everywhere, go through government checkpoints to travel.  It took me over a year to have our federal government allow my wife to enter the nation, they have no right to say who I can and can’t marry.  People expect to give a personal ID number every time they talk business on the phone.  People expect their information, privacy, and rights to be disrespected.   Most of them are so miseducated that they simply believe what they are told by the media, they have no idea how to think for themselves.

If it goes much farther down this path I will really start to fear for the future success of my country, the United States of America.  Most of the nation and the decisions are totally out of the control of the people, and most of the people disagree with many of the decisions.  Most people think we are not to be the world police, they think we spend way too much and should not carry debt.  Everyone I know thinks the tax system is crazy and needs to be replaced, but yet every year it gets more complex.  When will the craziness end.   Maybe only with revolution.

Cheer up, the nation depends on it.

Business, Inspiration, Investment, Money, , , ,

We are not really in a recession or a depression…  What we are in is a crisis of consumer confidence.   Let me explain, when people think that things may be bad they stop spending and that thinking CAUSES things to be bad.  It is funny, over 70% of the people think the economy is in trouble but also over 70% of people said that they personally were doing as good or better than 2 years ago.

The reason they think this way is because they hear the stories from the media, the hear what is going on with their unlucky friends, and the belive the hype.  In reality most every measure of corporate profits is UP, and many other measures are also up.  The GDP will be up this year, exports are way up.  Things are looking up in many ways, so stop being so down, tune out the negative media and cheer up.  When you do this everything will get better, spending will go up, sales will go up and, yes, even housing prices will go up again.

Start today, go buy something.  If you are one of the 70% that are doing fine, then do your civic duty and shop, shop like you did two years ago.  If you want a computer go to Emerald Computers this month and get $50 off by using coupon code march50.

Anyway cheer up.  It will make you feel better, and help our economy grow.