How to Find Killer Deals, Grow Amazingly Wealthy and Rule The World in 7 Easy Steps.

How to Find Killer Deals, Grow Amazingly Wealthy and Rule The World in 7 Easy Steps.

You’ve heard this pitch before, right? How many seminars and webinars have you attended? How many books and tapes have you purchased? How many pushy telemarketers have you patiently listened to? They all promise a 6 or 7 figure income, almost guaranteed, if you just follow our simple program which can be yours for a paltry fee payable in 6 affordable installments. I remember my irritatingly perceptive teen age daughter remarking to me, “Dad, the people getting rich are the ones selling you those books and CDs.”  Ouch! From the mouth of babes…

So why do we keep looking? Is it an image from a magazine, tall dark ruggedly handsome man in a tux walking casually across the runway from his Mazerati to his private jet, while beautiful women steal furtive, longing glances?  Hello! Don’t let someone else’s marketing define your dreams.

Wouldn't it be better to be happy and productive, get Joey through college, take care of the important people in your life and still have enough to retire in freedom and comfort? This is your life! Enjoy the journey, but pay attention!

Here are 7 steps that will bring you closer to your goals:

1. Silence the inner critic.
   You know the critic I mean. Those negative thoughts that leap to the forefront of our consciousness every time something doesn’t go as planned. Whether those thoughts tell you that you are stupid, weak, ugly, unlovable or incompetent, they all boil down to, “You’re not good enough, so why try?” They can be paralyzing.
   Recognize these thoughts for what they are. They probably started out as a misguided attempt at self-motivation, but can develop into a debilitating, self-punishing habit. Don’t feel obligated to play back the same negative thoughts and emotions like an old tape loop, over and over, whenever you are not perfect.
   Once you recognize that these thoughts are just an auto responder from the sub-conscious, it puts things in better perspective. Think of those negative thoughts as optional. You don’t have to hit the playback button every time. Honestly, would you ever use the words ugly, stupid or incompetent on a co-worker or a loved one? Why are you using them on yourself? Give yourself a break. None of us are perfect. Settle for being excellent.
   
2. Take action..
   I remember many years ago when I was managing several departments in a software company that was being constantly reorganized, my new boss told me to take a “Ready, fire, aim” approach to my job. I was horrified. It might work for Dick Cheney, but not for me. I was sure you were supposed to plan carefully, take all aspects into consideration, and then judiciously make your best decision.
   Looking back, I get the point.. Take action. Test the waters. Get in the game. Move ahead. You can adjust your course as you gain experience.
   You don’t gain experience unless you participate. Nothing gets done without action.
3. Educate yourself.
   Don’t stop after 1 seminar or 1 book. Keep reading. Keep talking. Keep listening.  Find other people with similar objectives. Find a mentor. Who is already doing what you want to do? Study them. Be an apprentice if you can. Ask questions. Think about what makes sense and what doesn't. Ask more questions. Learn from doing.
4. Be part of a team.
   No matter how good you are, you can’t do it all. We all have strengths and weaknesses. Focus. Do what you do best. Ally with people who have complementary strengths. Find strategic partners that are good at their job and that treat you well. Avoid anyone that makes you feel “less than.” Keep your ego in check and lead, follow or get out of the way, as the situation demands.
5.  Be persistent.
   You will make mistakes. You will have setbacks. Things will take longer and cost more than you plan. People that you trust will mislead you. Guaranteed. So get over it and get on with it. Nothing is more important than persistence. Talent is not. There are too many unhappy, unsuccessful people with talent. Intelligence is not. Brilliance is often blinding. Education alone is inadequate. The world is filled with educated derelicts. If you get knocked down nine times, get up ten. Persistence almost guarantees success.
6. Treat others well.
   Be fair, courteous, generous and loving. Courtesy costs nothing.  A smile or a thank you note can make someone’s day. Don’t give away the farm, but if you possibly can, make sure that people who help you are rewarded. You may need their help again. Love is a funny word. Human beings are social animals, hard wired to bond with each other. Love is the glue.  Don’t over analyze. Just go with it.
7. Focus on the journey.Every adventure begins with an unlikely hero. In your story, that would be you. It isn’t the pot of gold at the end of the rainbow that makes you successful. The real reward is the person you have become during the journey. If you silence your inner critic, if you move yourself to action, if you are constantly learning and surrounding yourself with good people and if you are doing these things persistently, you are already successful. The outward rewards will be almost anti-climactic. The real reward is the person you have become. This journey, your day to day existence, is really all you have.  Stay alert. Avoid getting trapped in mindless routine. You have one life. Live it like you mean it.
   
   Mike Young is a Broker Associate working at Thunderbird Real Estate
   (831) 234-1545
   License 00952966
   mike@MikeYoungProperties.com

Short Sale Buyer’s Guide

Short Sale Buyer’s Guide

“As we head into the winter of 2013-14, I believe that short sales are an especially good opportunity to buy at below market, if you can find short sales to buy.”  - Mike

Definition:

A short sale occurs when the total net proceeds from the sale are insufficient to pay all the debt secured by that property. (most commonly, the mortgages) Example, The home has a mortgage of $650,000, but in today’s market the highest offer the sellers gets is $550,000. The bank agrees to be paid back “short” and lets the sale go through.

Drawbacks for buyers:

You have to wait…and wait…and then wait some more. Don’t make an offer on a short sale unless you are prepared to wait 6 months or more before you own the property.

At the end of the wait, the price can change. Since the bank is not being paid in full, they have to approve the price and other terms of the sale. You don’t really know for sure what you are paying till you have the approval letter in your hand. However, if the bank changes the price, you can walk away or counter offer. There is no penalty to you.

Benefits for buyers:

Sometimes you can get a ridiculously good deal. The banks can be very inconsistent in their valuations, both high and low.  If they come back high, you can always walk away.   If they agree with your price, you say, “Thank you very much,” and put that money in your pocket.

The wait period works for you in an appreciating market. While the bank spends months processing the short sale, you have the property tied up with no risk and no "skin in the game." You can often get the property at last year's prices. 

There is also typically less competition for short sales and you may find yourself in the running for properties that would be out of your reach as a “normal sale.”

How to proceed

Use an experienced short sale agent. You need a savvy agent in your corner.  I have been involved with roughly 40 short sales over the last 6 years, usually on the seller side.  Believe me, they are definitely more complicated.

Offer strategy is important. Your agent must communicate to sellers’ agent that you are flexible and on their side. Sellers and their agents are under extreme pressure, dealing with a complicated, sometimes random, bureaucratic process with foreclosure staring them in the face. As long as you are getting a good deal, let them know you will do everything you can to make their job easier. 

Are you following me here? Price is not the seller’s primary concern. They just want an offer the bank will approve so they can get on with their life. The sellers get nothing, regardless of the price. 

If you need to pay for a month or 2 back HOA dues or a short sale negotiation fee or any other random item the short sale bank won’t approve, let the seller’s agent know you are open to that, as long as your bottom line still works for you. Again, you need an experienced agent to figure out the lowest price the bank is likely to accept. Low purchase price is where you make your money.

What to expect

60 to 90 days after your offer is submitted you will usually have an answer in the form of the approval letter which spells out the terms of the sale. Wait time is over and hurry up mode begins.  Most often they want you to close the deal in 30 days or less. At this point it becomes more like a regular sale. You usually have 17 days to do your inspections and get your loan approved. During this initial 17 days, after the approval letter is issued, you can back out with no penalty. Most short sales are approved at the offer price, but you never know till you get that approval letter.

Happy hunting! Do not hesitate to contact me if you have any questions.

Mike Young - Thunderbird Real Estate
Realtor, Broker Associate, MBA, SFR, CDPE, HAFA
(831) 234-1545
License 00952966
mike@MikeYoungProperties.com

Are we at the bottom?

I would like to say that everything will get better soon, but have to advise caution. What concerns me most is the number of mortgages in default and the high rate of unemployment.

Right now more than 10% of all mortgage loans are delinquent, meaning more than 30 days late. In addition to that, 4.5% are already in some stage of foreclosure. This indicates a strong stream of foreclosures for at least 2 - 3 years. These 9 - 13 million foreclosed homes will sold on the open market over the next 3-5 years and will tend to depress prices. (National numbers)

Nationally we have lost 8,400,000 jobs since 2008. Even if the recession is technically over the recovery will take years. Todays Job Report showed 200,000 new jobs in April. That is great news, but if you do the math it will take 42 months with a very optimistic 200,000 new jobs a month every month, to get back to 2008 levels of employment.

But... this doesn't automatically mean prices will continue to go down. Prices have been pretty stable in this area for the last year or so in spite of record foreclosures and very high unemployment. It is an election year, we will see more government programs trying to deal with our problems. There is at least some recovery in jobs. My prediction is the market will hobble along about where it is now for a couple years.

Right now, the $500,000 and under market looks strong. Houses in this range sell quickly for the most part. You could even argue that prices have increased slightly at the very bottom from a year ago. Prices over a million are very soft. Supply is much greater than demand. Look for these prices to continue to slide for at least the next 6 months maybe year. My theory is that sellers in this price range may have been waiting for 1 to 2 years for conditions to improve before selling, but sooner or later they have to sell. We are also seeing more foreclosures and short sales creeping into the high dollar ranges.

I think San Lorenzo Valley, Watsonville and Salinas are good buys right now just because prices there dropped 60% and more. I think you will have a little appreciation bounce. I see both conservative investors paying cash and holding the property for rental cash flow and first time buyers that can afford to own for the first time in decades.

I would be careful buying in Santa Cruz with appreciation in mind, especially in the over $600K range. Remember also that property flaws get magnified in this intensely competitive market. If the view is not pleasant, if there is road noise, if the house doesn't have curb appeal, if there is work that needs to be done it makes it really hard to sell. Buyers expect big discounts.

Everybody has an opinion, this is just my two cents worth. Real Estate is still a great investment in the long term. Wherever there is a downturn there will eventually be an upturn. Just be mindful that cash flow is critical. That is your bridge to the next upturn.

The Underwater Homeowner's Dilemma:

Should I Stay or Should I go?

One out of three homes in California is worth less than the mortgage. We face tough decisions as we come to grips with the worst recession since the 1930s and the housing market at the center of it. Even though foreclosures destroy credit scores many borrowers are considering walking away from their homes. (A short sale may help, see below) It’s a difficult decision. It’s an upside down world. Confusion, anger and denial prevent many from moving forward.

The blame game doesn’t help the situation. Mortgage lenders, the government and borrowers all bear some responsibility. But that is old news. This article is about being proactive. We need to let go of the past, get our eyes off the rear view mirror and on the road ahead.

If you are struggling to make your mortgage payments, watching your reserves dwindle, maybe even borrowing from family or using credit cards to stay current, you need a plan right now.

There are lots of headlines about loan modifications, but unfortunately they only work for a small percentage of homeowners. Even if you are one of the few who qualify, it may not help. 42% of loan modifications offer less than a 10% payment reduction. Only 10% offer any principal reduction. The exception may be Wachovia. (Contact me for more information on Wachovia)

If your mortgage is more than 125% of the value of your home it is in your best interest to investigate a short sale now. (A short sale means selling for less than what is owed on the mortgage.) If you hang on to the house, you hang on to the debt. It will take you 5 to 10 years of paying that over value debt to get back to zero equity. It makes much more financial sense to push the reset button. Sell short now, rent a home and buy again in two years. You reduce your housing costs immediately. You get rid of the crushing debt. You may be able to buy again in two years. Prices will still be relatively low.

Over the past 2 ½ years I have guided many sellers through successful short sales. I won’t lie. It is a pain. It may take 6 months or more to complete the process, but if you can’t afford to stay it is definitely the way to go. There is a much softer hit to your credit score vs. the whammy of foreclosure, consult tax and legal advisors to verify. You avoid the publicity of your home being sold on the court house steps. You have more control of the timing, allowing a more graceful exit. In some cases, the bank will give you moving expenses. The bottom line is you move forward.

Here’s the plan:

1. Consult expert legal and tax advisors. (Contact me for references)

2. Call me to find out how much your home is worth today.

3. If you owe less than 125% of your homes market value, if you want to stay in the home and if you have income to support a mortgage payment that is 80% of what you pay now, pursue a loan modification with your lender.

4. If you owe more than 125% of your home’s value, have income loss, been denied a loan mod, loan mod isn’t helping enough, job loss, divorce, or medical bills it may be time to consider a short sale. Call me to discuss your personal situation.

5. Avoid foreclosure at all costs!

Caution! Short sales are not for everyone. Seek legal and tax advice before proceeding with any options discussed above.

Next weeks topic: "Anatomy of a Short Sale"

Mike Young is a Realtor, MBA and Broker Associate at Thunderbird Real Estate in Capitola, specializing in listing and selling distressed properties in Santa Cruz and Monterey Counties. For questions or more information go to www.mikeyoungproperties.com or contact Mike directly at (831) 234-1545 or mike@mikeyoungproperties.com