Welcome to Chez Cliff!

How many times have you encountered someone who said they were going to do something yet didn’t?  Let’s say that they were talking about buying a home.  Six months pass and they take no action.  Yet they keep insisting.  Another year goes by and still nothing.  Five years goes by, even six, and still nothing happens.

My question to you is:  How much time goes by before you stop believing them?  Are you still believing after 6 years?  When do you say "Enough is enough"?

At lunch the other day, someone asked me about the impending housing bubble burst.  My head hit the table, disgusted.

Did you know that the first articles to appear about the housing burst was back in 2000?  I’m curious as to how much longer people are going to lend credence to this theory.  The only thing that’s happened in the past 6 years is that housing prices have doubled.

I’ve given the bubble burst the attention I feel it deserves.  One post.

If you take a look at the data, not a news article, you can see the housing market trends.  The data itself doesn’t paint a picture of despair.  There’s not "panic in the streets".  Cream spinach will still be available at your local supermarket.  Don’t worry.

Someone sent me an article with "60% of new homes were bought using ARMs".  I wrote him back real quick and said, "Yes and that’s a drop of 22% from the month before yet housing sales increased from February to March." 

I have yet to receive a response.

Be leery of any news article that says "If everything
remains the same yet this one thing changes, it will be a disaster for
all!"  I have a news flash for them.  Nothing remains the same.  The
interest rates will go up.  But people get pay raises, pay off debts,
find new jobs . . .

Do the research and look at the raw data.  Look at the curves.  The trends show a slowing down period.  That’s it.  For long term data, this is normal for real estate.  It’s interesting to note the economists, who point this out, are never asked back for a follow-up interview.

Read.  If what this man says is true, it will bolster the housing market.

There’s that pesky "if" again . . .

One more thing before I stop with this topic.  Bubble Burst people are quick to compare statistics.  They match the statistics based on 1989, 1990 statistics.  That would almost be true if these people didn’t forget what really happened during the 1990’s that precipitated the last "housing burst".  What these people fail to realize is that it takes more than just a high interest rate to affect the housing market.

Below are the major news events that transpired during the 1990’s.  These greatly affected the price of real estate (especially in Southern California).  Next to that, I used my crystal ball and tried to think of similar events that would have to happen today to match those conditions from back in the 1990’s.

I stand with Kiyosaki on this one.  Even if there is a market correction, crash or burst, real investors make money when the market goes down.

When it works correctly, MLS.com is a great resource for finding properties.  Of course, I only look at the investment properties.  I still try to follow Kiyosaki’s rule: "Never assume debt unless someone is willing to pay you for it."

I ran across an 18 unit complex for $2.5 million.  The numbers quickly danced through my head.  With 20% down, the passive income would be definitely positive.  And observing the rents, they were under the market value for that area of Long Beach.  We’re talking 4 blocks away from the ocean.  Within the first year, raising the rents to normal levels would have produced an extra $2,500 in passive income.

My first thought was "I’m a long way from having $1M to put down on a property."

I dismissed the listing and moved on.

I recounted the details of this find to my mentor.  This was my attempt to demonstrate that there are good finds out there.  This demonstration was to bolster his belief that the real estate market is a good market to get into.

"Why didn’t you call me?" was his response.

Suddenly, I felt dumb.  The passive income from that property would have been more than sufficient for me to kiss my job good by.  It would have been a slam dunk for paying back the mentor on that property.  Within ten years I could have purchased the complex outright and retired nicely on $20,000 per month.

Within minutes, mls.com was in front of me.  The search was in earnest, but in vain.  Someone had already swooped that deal up.

I have to keep reminding myself that I’m working in a team environment.  In this game, I’m not alone.  The next time I find a deal like this, I’m at least going to raise my hand.

In tearing down the drywall, we couldn’t help but to notice the "creative carpentry" that the previous owners had done.  I’ve asked the handyman to install some extra studs in addition to the framing.

With the installation of the new studs, termite repellent is being used.  That stuff stinks!  The entire house smells like the inside of a toxic waste dump.  It turns the wood into an incredible hulk color.

Here’s a trivia fact for the next time you’re hanging out with friends.  Termites don’t like redwood.

I find myself in a difficult position with the handyman.  He’s a great guy, does great work.  But getting him motivated to work has become a full-time job.  If I’m present, he will work like a mad-man.  The instant I leave, he’s on break.  I’m having to visit the house several times a day to ensure that progress is being made.  I’m paying a lot of money to babysit someone.

My mentor, with our "project-to-be", has a guy he wants me to look at.  His guy supposedly is good and on time.

It’s nothing personal.  Just business.

Since moving into real estate, I’ve realized that I need to have reliable people that can make deadlines.  Especially when there are people lined up to do the work.  Each link in the chain is reliant upon the other.  If one is late, the others are postponed.  Postponement compounds the problem.

Framing in the door	Beaming with some to spare

If there are any contractors reading this, your schedule could be full and overflowing.  If you were (1) reliable and (2) remained on schedule.  If you’re not getting repeat customers, then you are failing in one of the two items.  It’s that easy.

I almost forgot to wish you all a happy weekend, whether you celebrate Easter or not.

Don’t be messing with Easter B.  Sound is required.