Now Is the Time...

We got both of the houses that we purchased in the last month rehabbed and set to go. One already has a tenant in, I signed the lease agreement yesterday and the rent is $1575 - we paid $144k for the house so do the numbers that is not bad... Cashflow in CA .

We bought in Contra Costa County - I have had lots of questions regarding that. You have to come to the SJREI meetings for all the specifics. We completed the rehab in breakneck speed and the second house will be ready on Friday. I am doing a lease option on that - 99% sure at this point. The market is great right now for investors to start to dabble. It does not mean that the prices will not deteriorate further, but I am comfortable that these houses which sold for over $400k at the top of the market are a good buy. Additionally there is a great pool of tenants - people who have had to move for the following reasons:

1. Their landlord lost the house to foreclosure
2. The landlord lost him primary residence, and needed to move back into his rental
3. The landlord's family member lost their home and he needed to have them move into his rental
4. The owner occupant lost their home to foreclosure, and now need a rental
5. Section 8/ government assistance tenants looking to move up
6. Regular renters looking for a home that is nice and well situated

Interesting list - how things have changed this past couple of years. Craig's list is a great way to get tenants, and in this area potential tenants are very tech savvy and are always online.

Investor Tip of the Week:
Say you have a $150k in an IRA - you could buy a house for cash and have $1575 flowing into your account on a monthly basis - that sure beats the stock market and you don't need to freak out if you have a vacancy - you paid cash for the house, no mortgage due...just something to ponder. Make it a great week!

Possibilities Abound in CA...

It has been a busy couple of weeks – we closed on a house 10 days ago, and have already completed the rehab this past weekend. My husband, Stuart who is a meteorologist by training, got his Real Estate Broker’s license last year and he did the research and found these two properties. He put offers on approximately 50 to find 2, so it has been a lot of work but the payoff is there if you know what you want and you go for it.

I hosted an open house yesterday and it looks like we have some potential tenants. I need to run the credit and background checks. We are closing on a second house tomorrow, and hope to get started on that and get a tenant in there ASAP. Our tenant in Colorado bought our house, and so it motivated us to find some cash-flowing opportunities in CA – there are plenty of possibilities particularly now when a lot of people are running scared – those who are poised to take action will benefit long term. We bought both houses in the $135k to $145k and the rent is $1575. Nice houses in solid neighborhoods requiring no major fix-ups. Not bad…

The Uncertainty Continues...but you can thrive!

The government has revealed their plan to inject a $700 billion into the financial markets to stabilise things, unfortunately it will take several weeks to implement this plan, and essentially time before the markets are feeling the effects of that. This lack of certainty is creating havoc in the stock/financial markets across the world.

Lack of financing is causing problems in all areas - if there are no short term funds available for businesses of all sizes to cover day-to-day expenses - this is exacerbating the problem, and is contributing to a recession so the sooner we can loosen up those funds the better. Investors (not speculators) are not able to participate with the tightening credit markets - investors have historically helped to burn through these inventories. Let's hope those funds will be made available to all.

The huge sell off and declines in the the stock market highlight the emotion in the market place creating further instability. Fear is the predominant emotion right now with the economy and the stock market - fear & greed are not good guides. They often lead to the fall of markets because people act irrationally when fear is the primary motivator.

If you have made some mistakes recently with real estate or other investments here are a few important things to consider.

• Take responsibility: Own up to errors in judgement - if we don't take ownership of the problems that we create we cannot effectively move on from them.
• Don't dwell on past mistakes: Everyone has made mistakes and the the main thing following one is to determine how to logically navigate it to remain whole financially, or move forward and leave it behind.
• Learn the lesson involved: There is something to be learned from every setback. Very successful companies/ventures have oftentimes been born because of failure initially. Understanding why the failure occured is critical in order to ensure that the same mistake does not occur again.
• Educate yourself in the areas that you need more knowledge. Learn - hear what the experts are saying - reliable ones with a good track record. Read a book a week - you will soon become an expert and be your own best advisor.
• Stick with your core competencies: Know your strengths and work from your core competencies. We all have them - be familiar with your strengths, stick with what you know and are good at.
• Be creative and in action: There are always opportunities no matter what the market is doing - start a side business, buy an REO (real estate owned by banks) - create financial security for yourself and your family...you can do it!

International Reverbations for the Financial Markets...

I just returned from a trip home to Ireland to find the financial landscape is as uncertain here as it was there. It is a small world and indeed people wondered if the US encountered a downturn how/if that would impact world markets, and unfortunately now we can see that it definitely does. The financial markets are fragile worldwide - Ireland and England (and other European countries) have enjoyed tremendous growth for the last several years, and now things have come to a grinding halt.

The proposed bailout by the US government is about to be unveiled later this week, the first draft of which was rejected. As investors we need to monitor things closely and not get caught up in the predominant emotion which is fear. As author and philosopher:

Jim Rohn says "we all experience winters (financial, personal, social), they always come after a harvest. Some are short, others long...learn to think negatively when things are positive; learn to think positively when thing are negative. You'll be in better shape to survive your next winter."

This is the time to really stay close to the market to determine how you as a savvy investor can participate. Nearly three years ago now, we sold all of our properties in CA and that was the right move, we thought it at the time but there is always an element of doubt. In retrospect, it was perfect timing and all because we were privy to expert information that assisted us with making those decisions.

There is a strong contrarian element to real estate investing, and fear is the dominant emotion currently in the market place. When the bloom is off the rose professional investors pay serious attention. We have taken action ourselves by purchasing two houses recently, and are looking to find more deals that make sense. In November, we will host one of my favorite CA experts at the SJREI Association to here what he sees ahead for the market. Bruce is one of the people who predicted the downturn and warned us in advance of this crisis. Keep an eye on our website to hear Bruce at http://www.sjrei.net/ and hold on for the ride, and be prepared to act when something really makes sense financially...