The holiday season and the 1st Quarter of the New Year

The holiday season! As soon as the frightening Halloween night is over, the holiday mode seems to kick into high gear:

-          Should we cook a turkey this year, or have dinner with friends and family?

-          Should we have turkey at home, or should we order a turkey?

-          How about a deep fried turkey?”

-          What stores are having the best sales in December?  

-          Which are the new toys and gadgets?

And the planning goes on and on. Many spend much more time planning their holidays and vacations than they do planning for their business! Do you know that the best time to plan for your business is right now during the holiday season? Think about it; it’s almost too late to increase your income for the year in December. With 6 weeks left in the year, and between Thanksgiving and Christmas being almost 3 weeks of holidays, there isn’t much time to generate a lot of revenue. (especially when sellers and title companies are on vacation and short staffed, closings will be delayed). Could someone make a huge chunk of money in this amount of time? Sure. And I know many that have done it. But why wait for the last 6 weeks to make this big push for extra income when you had all year? This doesn’t mean that you should stop working, but it does mean to start planning the first quarter of next year. Especially if you want a fast start in the beginning of the new year.

But why not wait until January to do your goals and planning? When you consider that by the time you do your goals and planning, and then start to implement the things you want to do, this could easily take the 2 or 3 weeks (in January). And by the time the income starts to come in, it may be February or even March. And isn’t the end of March the end of the first quarter of the year? Now you only have 9 months left to reach your goals for that year! Before long we’re feeling as though the year is going by too fast and we’re running out of time again.   

So have a happy holiday season, and start planning for your business NOW!

MAKE IT a Great Day!

Dennis

It’s hard to stay Positive in a Negative world!

Now that the elections are over, hopefully we can focus on the nations economy. There have been so many unusual things happening in the last 12 to 18 months that it’s hard to know what to expect next. Just consider: the economy, banks closing, insurance companies struggling, subprime meltdown, houses are selling slower, difficulty in qualifying for loans, increase in foreclosures, gas prices reaching almost $4 a galloon, Hurricane Ike, auto dealerships going bankrupt, major retailers closing (Circuit City and others …..) Is there room for more depressing news?  

Whether it be talking to the neighbors, reading the newspaper or watching the news on T.V., everything around us is negative. Just imagine what it would be like if the people we spend most of our time with are negative minded!

It’s very important to be surrounded by positive people during these uncertain times. Successful people don’t have time to be around negativity! Whether it be the media or people that you know, you need to decide with whom and how you want to spend your time with. I suggest that you go to networking events, social events, club meetings and other venues to surround yourself with like minded, successful, positive people. Better yet, start identifying successful people in all walks of life, not just real estate, and take them to lunch and start spending more time with these folks. “The best way to build your business, is to help someone else build theirs…”

MAKE IT a great day!

Dennis

Marketing Makes Money

In real estate, as in any other business, marketing is a key to keep the business going and growing. At first, when we’re getting started in the investment business, we start our marketing campaign slowly until we figure out what’s working and what’s not, and don’t get into too much marketing expenses until the cash flow starts coming in. I recommend beginner investors to focus on marketing that’s free or very inexpensive, so that we can do a lot of it at minimal expense. Then as business starts to grow and the marketing budget increases, we can do more diverse marketing that will be more expensive.

I’ve seen some investors that are extremely eager to get their business started, and they spend a lot of money on a marketing campaign, and yes, the phones ring like crazy, but they don’t know what a good deal looks like, and they miss good opportunities by not knowing how to recognize a deal yet. So their money goes to waste. Sometimes they don’t have the system set up to handle the call volume, or they can’t return the callers phone call because they’re not set up for the volume, and again they waste money.

As you learn about marketing you should also continue learning the many strategies in real estate investing. You’ll be able to maximize each call when you can recognize a good deal, and pass, on the marginal or no deals. This will save you a lot of time to talk to sellers that do want to do business with you.

Sometimes the marketing works so well that investors will stop marketing because they can not handle the volume. And this is a huge mistake! If you’re getting an overwhelming response, you need to increase what you’re doing and get some help! Not cut back or stop the marketing. Sometimes it takes a while for marketing to start getting good results, and when it’s working, you don’t want to slow it down.

Another important issue is that when times are tough, financially, the first thought is to cut on the marketing expenses. However, cutting back on marketing will also cut back your cash flow. So you may want to cut back on what’s not working as well, but keep or increase what is working.

If you had a restaurant that had the best food and the best prices and outstanding service, but no one knew about your restaurant, how long could you stay in business with no cash flow?  You will always have to have marketing for your business. When you have tracked the results of your campaign and know the cost required to obtain a new customer, you’ll realize that the right marketing makes money!

MAKE it a great day!

Dennis

Are we there yet?

Are you on track to achieving your 2008 goals?

We’re at the midway point in the year, and time is going by Fast! How are you doing with the goals you set at the beginning of 2008? As you know, it takes time to get things done in real estate. If you were selling cars, you could get paid the same day or the same week. But when selling houses, it could take several months or longer. A faster way to generate cash in real estate is by wholesaling properties. Usually you can get your wholesale fee within 30 days or less of getting a house under contract. But most real estate transactions will take much longer. Especially if you’re going to rehab the property before you sell it.

What all of this means is that we need to run our real estate business in 90 day cycles, because it takes time to “get paid”. So if one of your goals was to make $50,000 or $100,000 in real estate this year, you now have less than 6 months to achieve your goal. We’re at half time and there are 2 quarters left to “play”. Actually, you have Less than 6 months. You have july, August & September (3rd Quarter) and October, November & December (4th Quarter). Out of the 6 months remaining, with July going by fast, and consider that the last 2 weeks in November are “holiday time”, as well as the last 2 weeks in December, and all of a sudden we have 5 months, not 6 months left to achieve our yearly goals! 

So it’s time to review your 2008 goals, go over the action plans on how to accomplish them,  focus like a laser beam, and work on your goals with passion every day!

To Your Success,

     Dennis Arocho

Hard Money Lending is Getting Tighter!

That’s right!  It used to be real easy to get a hard money loan, but those times are long gone.  It was just a year ago that you could get financed as long as you met the 70% hard money formula (there are 2 different 70% formulas). But not anymore!

Some hard money lenders have made changes to their programs. Some will only lend a maximum of 65% LTV, while others are 50% to 60% LTV. Some HML will only fund the purchase of the property, and the borrower needs to repair the property with their own money, credit cards, credit lines or private money. This will keep the HML lending between 40% to 55% or so on a property, which makes it much safer for thr HML.

Because there are less rehabbers borrowing hard money, some HML are buying junkers and rehabbibg them themselves! From the HML point of view, if you’re foreclosing on some of the loans made, and you end up with the property and then have to sell it anyway, why not buy the house and rehab it and then sell it. It saves them the foreclosure process and HML already know the rehab business and make more profit.

When the market changes, you need to change how you do business. Have you heard this before? Hard Money Lenders know this, and hopefully you understand the importance of investing with multiple strategies, and not investing “just one way”.

Dennis Arocho, R2S

MAKE IT a great day!