Wednesday, August 31, 2005

Investing Without Fear - Thinking Without Fear

THINK WITHOUT FEAR
Source: Milliaonaire Real Estate Investor by Gary Keller
Intersestingly enough, one of the big obstacles for most people who want to Think Action is that they set out actually to take action, they cannot Think Without Fear. They start to move forward, stumble into some obstacles, and find themselves paralyzed into inaction by the specter of failure. And then fear of failure itself becomes our primary fear. It can be arresting. It can stop anyone in their tracks. When you begin to focus on the fear of fairure, you're cooked. When you can't see the possibilities for and the potential rewards of success because the fear of fairure has blinded you, it is time to stop for a moment and reflect.

If you are a possibility thinker, that means you believe you can do this - it is possible. But to "do something." You'll have to take action. If you take action, you will most certainly make some mistakes or fall short of the initial progress you'd hope for. To rephase the popular bumper sticker: SETBACKS HAPPEN.

The good news is that setbacks along the way do not represent total failure and should never get in your way unless you allow them. Think progress, these momentary setbacks can even represent positives, such as learning opportunities. So never let failure freeze you into inaction - very little good can happen when you're not acting at all.

Ironically, for some people fear of failure actually motivates them to take decisive action that's a good thing. It can never be a part of their Big why. Many high achievers have reached for their potential simply because they could not tolerate the thought of the alternative.

Look, we all have our share of failed attempts. It is really a matter of how we view them. Failed attempts are not a failure, so never fear the attempt itself. And keep trying! Charles Kettering warns us of this when he writes, "The only time you can't afford to fail is the last time you try."

Having a Big Why will help you focus on what the Millionaire Real Estate Investor usally has going for him - the power and motivation that comes when you're greatest fear is not reaching your goal. This allows him to slough off setbacks as they go without ever losing his faith or his momentum. He fears ultimate fairure but is indomitable in the face of intermittent failure. Top investor's persevere through the "failures along the way" so that they do not fail at the end of the day.
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Tuesday, August 30, 2005

Why Invest in Real Estate?

Why Invest in Real Estate?

Source: Real Estate Riches - Dolf De Roos, Ph.D.
Why property is so much better than other investments?
  • You do not need much of the purchase price in cash to buy a property.
  • You can buy many more dollars' woth of property more than you are paying for.
  • You can massively increase the value of a property without spending much money.
  • You do not need to sell a property to reap the benefits of any growth.
  • You do not need to sell a property to reap the benefits of any growth.
  • You do not need to monitor your properties from the moment to moment like a hawk.
  • Property prices tend to increase relatively smoothly and consistently.
  • The fluctuations of any one property relative to the national average are very low.
  • It is incredibly simple to do better than the national average for property.
  • It is the simplest, most reliable, and most consistent vechicle known to convert even a little financial intelligence into a lot of cold, hard cash....
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Monday, August 29, 2005

The Four Stages of Growth on The Path to a Million

The Four Stages of Growth on The Path to a Million
Source: The Millionaire Real Estate Investor by Gary Keller
The path of the millionaire Real Estate Investor is a progression through four stages. First, you must learn to THINK a Million (think like a millionaire Real Estate Investor) before you make your first move. How you think matters. Whether this strikes you as a cliche' or as a timeless truth, my experience has taught me that the bigger I think, the more I can accomplish. I've learned that what I hold in my mind is what shows up in my life. Learning to think like a millionaire Real Estate Investor will give you the greatest chance of becoming one.

The next step is to BUY a Million, in which you'll get a through understanding of the best models for investing in real estate and, more fundamentally, an understanding of money: the ways it is made and the ways it is lost. The goal is to equip you with the working models you need to purchase investment properties with the market value of a million dollars or more. Believe it or not, this is not the huge leap you might imagine, and many investors reach this mark long before they ever expected they would. Buy a Million is about the fundamentals of acuiring properties, holding them, and in some cases selling them. Buy a Million applies the power of Criteria, Terms, and Network to launch your career in investing.

After you Buy a Million, you'll set your sights on having an equity position of a million dollars or more in your properties. We call this stage OWN a Million. This is when you will realize that the investing you have done has blossomed into a bona fide business. With that transformation come a set of issues specific to that level of ownership. Acquiring properties through credit potentially becomes more difficult, cash flow with asset or equity buildup. It may involve selling, tradingup, or exchanging. It certainly involves understanding the surprisingly simple realities of tax and ownership entity issues. The good news is that by now understanding these issues from the beginning you can plan from them.

The last stage of growth for a Millionaire Real Estate Investor is RECEIVE a Million. Think of it as the summit, a place where only the best have gone. Receive a Million is when you are in a position to receive an annual income of a million dollars from your investments. Pivotal to this stage is that your investment business de designed so that you can choose to get out of the- day-today work and enjoy the benefits of what you've created. Although you can step out at any point along the way, it is my hope that you will set your sights on a big goal...

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Velocity of Money

Velocity of Money

Source: Rich Dad's, Robert Kiyosaki
Professional investor's who want to accelerate retirns understand the benefits of using other peoples money (OPM). The common source is the banks' or other investors' money and both want to accelerate the velocity of their money. They do not leave the money parked on the table.

The professional investor follows the following formula:
  1. Invest money into an assett.
  2. Get the original investment money back.
  3. But keep control of the original asset.
  4. Move money into a new asset.
  5. Get investment money back.
  6. Repeat the process.
This process is called the velocity of money. Financial institutions understand how important it is to expand their money supply in order to increase their earning power. Most investors do not realize they too can expand their own money supply and thereby expand their earning power. Financial institutions do this by making their money move. The more times a dollar moves, the greater the money supply and the greater their earning power of that dollar.

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Wednesday, August 24, 2005

2005 Profile of Second-Home Buyers

2005 Profile of Second-Home Buyers
Source: National Association of Realtors

REPORT HIGHLIGHTS
The Reasons for Purchasing a Second-Home Vary Greatly Common Motives include the desire for a vacation getaway, rental income, and increased portfollio diversification. But the ways in which second-home buyers search and purchase that additional property vary less. The overwhelming majority of second-home buyers use a real estate professional to assist them in their purchase. Second-home buyers are, by definition, experienced home purchasers, so they reconize the advantages of using a real estate professional for their home purchase.

Second-home buyers can be divided generally into two groups - those who purchase investment properties and those who purchase vacation homes. There are numerious differances between these two groups of second-home buyers. Vacation-home buyers typically spend more on their purchase than do investment-home buyers. Vacation-home buyers raely rent out their vacation homes to others. Investment buyers are typically younger and more affluent than vacation-home purchasers. Investment-home buyers often seek properties in a location that is relatively close to their primary residence and typically do not use their second homes personally. Regardless of whether their second-home purchase was a vacation or an investment home, nearly all second-home buyers consider these properties to be good investments.

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Profile of Second Home Buyer Profile of Second Home Buyer Profile of Second Home Buyer Profile of Second Home Buyer Profile of Second Home Buyer Profile of Second Home Buyer Profile of Second Home Buyer Profile of Second Home Buyer Profile of Secon Home Buyer


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Wednesday, August 10, 2005

National Real Estate Investment Club

National Real Estate Investment Club
We have designed the perfect Real Estate Investment Club; one that is built by Real Estate Investors for Real Estate Investors.
  • No Meetings
  • No Boundries
  • No Dues/Fees/Zero Cost to You
  • No BS
"Once you are an insider, you will have access to the same pre-screened,
outstanding Pre-Constructionreal estate investment opportunities we do."

We have the advantage of numbers, industry networking & insider experience. As a group acting as one, a "band of brothers" we move into a project in the prelaunch "stealth Phase", by working with and many times co-developers in unique pre-construction projects with solids fundimentals. In a typical 5 phase project release our group will be in, out and counting our profits before anyone even knew we were there. That's what we like to call "Real Opportunity for Real Investors?"

If this sounds like something you would be interested in, contact us to discuss if it makes sense to work together. Call 407-876-5771 or Email info@BuyVacationCondos.com
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Thursday, July 28, 2005

How to Start Investing for Financial Independence - Part 3

How to Start Investing for Financial Independence Part 3;
Turning Semi-Pro
By Dr. Chris Anderson
This is the third article in a series of how to take a new investor, and turn their working capital from $15,000 to a nest egg of over $400,000 in six years. More importantly, we show how this same individual can use this to become financially independent, semi-pro investor taht derives the bulk of their future income from their investment portfolio.

In the first two articles (1) & (2), we showed how using only 3 simple, ordinary investments, the investor grew their capital base to over $192,000 after 4 years! How did they do that? Simple, they put their money in Harm's Way to have it start working for them rather than their banker. In addition, they employed the concept of leverage in a responsible, but aggressive manner.

In my dealings with people all around the country, I find that there is one major denominator for many in the 30-60 age bracket, they would love to find a safe way to leave their current source of icome and have time to pursue interests closer to their heart. They have little passion to continue in their current profession until their golden years where they hope that their savings, their 401K's, and their social security will be enough. Instead, I find that most people are interested in becoming what I call semi-pro investor where much of the person's income is now tied to their investing ability. However, I also find that for most people, investing is not their ultimate goal but just a tool to finance some dream they have had on the back burner for years.

In case you think this is all theory and the stuff od informercials, this is exactly what I did at the age of 40 "retiring" from waht many people considered to be an excellent job on the graduate engineering faculty of the University of Florida. Over a period of several years, and a heck of a lot of mistakes, I was able to rely on a pool of assets and continuing investments to step out as a semi-pro investor who could then spend my time creating investments (to creat money) and creating financial educational material (my passion).

Defore we can even talk about financial independence, we need a frame of reference to see how much investment return might be needed to support our investor who is now going to turn into a semi-pro investor. Suppose that this investor decides that they need $75,000/Year to "break even" with their current lifestyle. That is, they can support their current lifestyle with that amount of money coming in but yet they are not adding to their net worth. For sake of argument, let's say this produces $60,000 per yaer after tax. For you, you may need 2X this amount, or 1/2 this amount but that does not change the underlying concepts.

With their current $192,000 in working capital, can this investor "retire" and become semi-pro? Maybe but it could be a little risky. Since tax has already been paid on this working capital, the investor KNOWS that they can support over 3 years with NO OTHER INCOME! i.e, $192,000/$60,000 > 3 years. For many people, that is HUGE revelation that within 4 years, starting with $15,000, thay have created something that can lrt them be job free for 3 years. Not bad but still a little scary in my opinion if the goal is to chuck the job permanently.

To avoid depleting their original capital, the investor would need to produce $75,000/$192,000, or 39% per year returns. As we have shown, this is quite possible but would make for some sleepless nights. Suppose now that the investor decides that they should go through one more round of investing to further grow their capital base. They know that with another 2 years od strong investment returns behind them, they could really make it into the big time and be able to "retire" to the semi-pro status with complete confidence.

Using smart leverage (see previous articles (1) & (2), suppose now that the investor manages to produce a modest, 150% gain over the next two years, or $288,000. They accomplish this objective by making 2, diverse investments in condos that are located in completely different states. after long term, capital gains treatment, this produces $244,800 now giving the investor a working capital base of over $430,000!; All of this started from a investment of $15,000 only 6 years ago.

Ignoring the effect of inflation for simplicity purposes, this investor has now accumulated enough cash to support themselves, with zero addittional income, for about 7 years. Hower, it is extremely unlikely that for someone that has successfully navigated themselves to this point can produce at LEAST a 20% return on their working capital. Basically, they have now acquired the skill set, and the required capital, to be a semi-pro investor. At that return level, the investor now has all the income they need.

There is another effect that people often ignore. When the semi-pro investor leaves their current occupation, there is a ton of hours that can be applied to whatever they choose. It has been my observation that for people with working capital of less than 2 million dollars, it does take much time to generate their semi-pro investments. Invariably, I find that people have another activity that they always wanted to do., like starting a business, be an author, artist, fishing guide, or what ever that produces revenue as well. This further reduces income requirements.

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Thursday, July 21, 2005

Florida Real Estate Exploding for 15+ More Years?

Florida Real Estate Exploding for 15+ More Years?
By Chris Anderson, PhD
YEEHAW!!!!!! The South will rise again! Can't you just imagine the Dukes of Hazard boys sitting on the hood of their car (the General Lee) grinning in front of a For Sale sign in their yard? Well, they should be smiling with the prices in the South, and especially in Florida. But will this Florida real estate trend continue? That is the $1000,000 question.

We hust recently taught a class at the Learning Annex in NYC about investing in Florida real estate. As I was preparing for this class, I was just constantly shocked by some of the facts that I was gathering.... and I live in Florida and have done so most of my life. So the question becomes "is this just an over blown Florida real estate bubble or is this something taht is likely to last?"

Let me give you an example of just how wild Florida real estate has become. Recently, somebody just made a purchase the LARGEST track of land that has been purchased in Florida since 1965, some crazy dude named Walt Disney purchased 30,000 acres in a relatively unknown place (at the time) called Orlando. At the time, the locals who sold their land went laughing all the way to the bank about this guy.

This recent Florida real estate purchase, however, was 28,000 acres at a price of $30,000/Acre. No big deal right? Wrong!!! This land was purchased around YEEHAW Junction, Florida! Ever head of it? Most people have not. Yeehaw Junction is off of the Florida Turnpike in Osceola County. This is one of those places that you could drive through 10 times and still not have noticed it.

If you are like most people, then you would have to assume that big groups are buying these large tracts of land with the intent of rapidly developing them and selling them during this crazy real estate market. Nothing could be further from the truth. What these groups know is that the population of Florida is expected to increase by 35,000 people, per month for the next 30 years. So month, after month, after month, you have people pouring into the state. So if you are one of the big Florida Real Estate groups with tons of money in your pockets these days, what would you do? Buy land in cash and sit on it for years --- also refered to as "land banking."

Now if you are familiar with the Florida real estate of yesteryaer, you would have to assume that most of this population growth is from fixed, low income, retirees that are coming into the state. Wrong again. Today, and in the foreseeable future, you actually have very wealthy individuals coming into the state, possibly for the long term retiremant. The difference is they have lots of money, are willing to spend it, and are accustomed to nice lifestyles.

Whenever there is money flowing, then you obviously create business opportunities and job growth. As a consequence, many locations in Florida are exploding within the 20 - 40 year old age group. With this kind of real world demand floating around, the opportunities are endless for savvy Florida real estate investors.

Of course, you can not just bluindly make investment choices, especially if you live outside of the state. Some areas have become investor dominated and could be a bit scary in the shorter time scale. Over the longer time scale however, the future looks very bright, especially in the area of land investments and affordable housing.

In the Learning Annex class in NYC, my suggestion to investors interested in Florida real estate is to either learn how they can use preconstruction investing to easily make investments in Florida or else move and get involved in more active styles. For preconstruction investing, the trick is to 1) find an emergind area poised to explode, 2) find a project within that area that is high demand and is in preconstruction, 3) ride the appreciation curve while you may or may not even own (yet) the property. People have made money by the boatload over the past fews years doing exactly that and "aw shucks, we only have another 15+ years to go before it runs out".

Now do you want the really good news? This is not limited to Florida real estate! In our group, we are making multible investments in many locales all being driven by the baby boomer shift and its far reaching impacts. In my opinion, if you want real estate investing to be a major factor in your financial future, learn what the baby boomers want and then buy in front of them.

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Monday, July 11, 2005

Developer Services - Investor Club Multiple Sales

Developer services
Investor Club Multiple Sales

BuyVacationCondos.com & LANDDepo.com offers complete real estate and marketing services. Because of our proven track record of success, we are often contacted by developers throughout the South Eastern United States regarding Consulting and Marketing services for PRE Construction real estate projects. Our expertise includes Residential: Condominiums, Homes, Town Homes, Developmental Land and Home-Sites.

We have become a referral network resource which can offer a wide range of services that assist both developers and project managers.

Investor Club Multiple Sales:
Our investor club and network of affilate members can assist you with the sale of your project. This will ensure meeting your lenders pre-sale requirements and facilitate the construction process on an expedited basis.

We can be your turn-key marketing and consulting resource. Our assistance can be available if you are just starting out or merely looking for an outlet for unsold inventory? The level of participation can be scaled to fit your current and future needs. You decide...

Areas of Assistance: Developing, Consulting or Evaluation - with an emphasis on marketability, overall profitability and project feasibility.
  • Advertising and marketing expenses
  • Pricing structure and inventory roll out phasing
  • Overall project image analysis, buyer tarket profiling, product packaging, market plan and competitive market analysis
  • Product floor plans, various features and ammenities
  • Promotional programs and materials
We give your project an extensive internet presense, substantial needed exposure and of course explosive unit sales. If you feel we can be of assistance to you? Please contact us to discuss how our experience and network contacts can be used to your benefit. Why not put us to the test? Additional information and the initial consultation is at no cost on your part.

Meet the Team

Contact us at 407-876-5771 or email to info@BuyVacationCondos.com



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Thursday, July 07, 2005

How to Start Investing for Financial Independence, Part 2

How to Start Investing for Financial Independence, Part 2
By Chris Anderson, PhD
Last week we started a mini-part series about how to go from beginning investor to being "financilly independent" in a steady and predictable way. Many, many people want to overly complicate this process so let's recap that discussion.

The bottom line steps that I suggested in the last week article (Click here for Article) was :
  1. Look for an opportunity that will return at least 150% in 2 yrs or less;
  2. Be mentally and finacially prepared if the investment does not work out;
  3. Have VERY good reasons why you don't think you will lose money.....You may not make as much as expected, but you would rather not lose money at this stage.
  4. Be patient. This single result should not either make or break you but it is crucial to a longer term plan.
I gave an example where a hypothetical person had gone through this process and ended up with a profit of $43,000 (before taxes) and $36,000 of after tax profit. When this profit was combined with their original investment, they now had around $55,000 of operating capital for step 2.

Before we get to step 2, let's take a step back. For a lot of people, if I told them that somebody made $43,000 on a quick investment, they would think these people had "struck it rich". Kind of like winning the lottery, right? NO! In the grand scheme of things, this investment will do very littleto impact their financial independence. That is, it will take discipline to now use these profits to go into the next investment, and then use those new profits to go into the 3rd investment, ect. So, in our opinion, the first investment was merely a stepping stone towards a much bigger objective.

In step 2, most savvy investors will now realize they have just been given some monopoly money, or money that was not originally theors, to work with. In the investment and trading world, this is referred to as the "markets money; i.e., money that you got from the market that you can now use to generate revenues above and beyond what was possible with your original investment. Quality traders can use this concept to produce huge % returns in a year while risking no more than 10% of their original portfolio.

So let's say the investor now decides to repeat the process and buy two preconstruction lots in a differant development. In the two years since the first investment was made, suppose now that property has escalated. In addition, the investor finds a good deal on two more lots and each is $250,000 to purchase.

Now, the investors visit their check list to see if this makes sinse:
  1. Look for an opportunity that will return at least 150% in 2 years ofr less --yes, they have reason to believe this will occur for their down payment amount;
  2. Be mentally and financially prepared if the investment does not work out --yes, they don't think it will happen but if they lose their entire 10% down payment, they are ok with this.
  3. Have VERY good reasons why you don't think you will lose money..... You may not make as much as expected but you would rather not lose money at this stage -- They have done their due diligence and feel strongly about the investment.
  4. Be patient. This single result should not either make or break you but it is crucial to a longer term plan-- they are not swinging for the fences but rather patiently using the previous market's money to increase their investment.
Well, like the other investment, suppose this one works out in their favor. In their two year holding period, the lots experienced a 35% increase in price. Not bad. They were hoping for more since they knew some places had that kind of increase in a few months but they are not complaining. After closing costs, the investor had about $55,000 invested and netted a total of $162,000 after expenses. Of course their silent partner, Uncle Sam, wanted their cut so now they are left with a $137,700 in profits and $192,700 in working capital. Not too bad after only 4 years.

Now let's ask the question are they finacilly free? Well, I doubt it. The investor could probably now survive for 2-3 years on the nest egg but only if they did not reinvest it. However, if the family and friends find out about this gain, then they will think the investor is now "rich" and living like the Vanderbilts..... For anybody that has made it to Step 2, you know they are far from rich because now they want to invest to go to Step 3 and this will likely consume most of thir money. Frequently you will find people in the $0.5 - $2Miillion dollar net worth in this category where they are doing great on paper but they don't have ant more "extra" money to spend than they did a few years ago. After Step 3-4 however, this can change dramatically.

Before we conclude this week's article, let's talk about a very common and deadly mistake. In the language of Texas Hold'em poker, it is the ALL IN mentality. Frequently, after a first success, people now feel bulletproof and decide they want this process to go faster. they leverage everything they have and take on as much risk as the banks will allow them. If things work out for them, they explode their wealth with that step. However, if something slips up, they are in trouble.

Most people believe nothing like that can happen to them they are too smart. I mean everybody knows that real estate does not go down, Right? I know a gentlemen who is extremely smart, extremely business savvy, and grew his net worth to well over a BILLION dollars. Within a few yaers of that mark, his net worth was NEGATIVE and had to declare bankruptcy because of real estate. The process of building wealth in a controlled fashion over 6-10 years is so straight forward that I cannot see taking those kind of risks to make it happen in a much shorter time frame.

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Wednesday, July 06, 2005

Economists say Boom Continues


Economists say Boom Continues
Annual report: "Double-digit explosive is on the way."
March 2, 2005
By Terry Calhoun
News Editor
Every year UNC-Wilmington economist Claude Farrell and Woody Hall come to Southport and forcast booming growth for the year ahead.
Every year, thay are right.

Tuesday morning, the duo told area business and civic leaders assembled under the auspices of the Brunswick Community College Small Business Center that retail sales grew in the county by 10.5 percent, pushing their way back over the $1,billion mark after a breif sales slump in 2002.

As far as the overall economy goes - what the pair call the Local GDP (Gross Domestic Product) - the first half of 2004 was the strongest recorded since they began tracking the local economy in 1893.

In the near term, Farrell and Hall predict the trend to continue if the area stays relatively storm-free. we expect Brunswick and Pender counties to exceed the near-term forcast for the region.

For the region, which includes relatively lagging New Hanover County, the economist predict 9.5 percent overall growth in 2005. In Brunswick County, they expect double-digit growth, and expect double-digit growth to continue over the long term, at least for ten years.

"Believe me it's on the way. Now is the time to get on board and make a lot of money in the future," Farrell told the heavily business-oriented audience at the event cosponsored by the Southport-oak Island Area Chamber of Commerce. He promised new multimillionares would be created amoung those who get in before land values further escalate.

To no one's surprise, Farrell said the single most imoportant factor fueling economic growth was population growth.

He reported Brunswick County's July, 2004, population at 83,787, up from 73,143 in Census 2000.

"Our long-run forcasts of local GDP rely primarily on expected population growth. Our major economic expansions here in the 1980's and even moreso in the 1990s were driven over time by surges in population growth," Farrell said. He said that growth was largely driven by the region's linkage to the upstate and beyond as I-40 was completed.

Since the mid-1980s the Wilmington area economy growth rate tripled the national average, he said.

Farrell and Hall claim their year-to-year forcasts issued since 1985 have been accurate within one standard deviation 98.44 percent of the time.

"A plain-words example of what this means is that if we forecasted 3.5 percent growth that the actual growth was somewhere between three and four percent," said Farrell.

Their biggest variance came in 2001 when they understandably failed to predict the post-September 11 recession.

Variables which are plugged into the economic model to produce forecasts include retail sales, employment and unemployment rates, building permits and airport traffic.

"Our long-run forecast is for the local economy, at a minimum, to double in size over the next ten years. W e expect the Brubswick and Pender county economies to grow even more rapidly over that time period with each more than tripling in size."

Farrell recalled that population in the three-county area grew by 37 percent from 1990 to 2000.

Pender and Brunswick counties will be the fifth and sixth fastest-growing counties in the state with population growth rates in excess of 28 percent, wwhile New Hanover County's population is forcast to grow 23 percent, in each case by 2010.

Why growth is coming so fast
"What will be the primary catalyst for this growth?" posed ?Farrell.

"The southern part of Hanover County will continue to expand outward from the Monkey Junction area toward Carolina Beach. Brunswick County is expanding rapidly across the river from New Hanover County and along the beach communities and surrounding areas," he said.

Farrell admitted he is part of the migration, saying he had lived in both New Hanover and Pender Counties and was now looking for a home in Brunswick County.

"Growth is being partially fueled by a readily available county water system in many areas," he said. "This has allowed development to occur where it would otherwise not have been possible."

Who are the newcomers?
But Farrell said supply of housing would be meaningless without demand. So, where are the people moving from who are moving to Brunswick County?

"First are those households living in New Hanover County who desire a less crowed and less hectic lifestyle," he said. "The second source is coming from retirees moving to the area to enjoy the many golf courses and family-oriented beaches found in Brunswick County."

Farrell pointed out that "really nice smaller homes" 15 minutes away from the beaches and greens were still available in the $150,000 range.

"You won't recognize Leland in ten years," he said.

But other housing alternatives available.

"You can still get right on the beach or golf course, he added. There's something housing-wise for everybody."

"Commercial building will absolutely blow through the roof," said Farrell.

Farrell said Pender County would see even faster growth as the bypass from Porter's Neck to Brunswick County develops.

"In reality, the bypass needs to only allow those in Southern Pender and New Hanover to access I-40 and Market Street to alleviate the current traffic quagmire at Ogden. This part should be done by the end of 2005 or mid-2006 at the latest.

Only the lack of water lines prevents explosive growth in Pender County now, said Farrell.

"Brunswick County, in contrast, already has undeveloped land with water available. The completion of the U.S. Highway 17 bypass should have an explosive impact and, in fact, development is already occuring in anticipation of the completion of it," Farrell said.

Farrell said he is "very confident" that his forcast is correct after 25 years of living in the region and studying its economic trends.

"The impact the bypass is having and will have on Pender and Brunswick counties cannot be overstated," he said. "Double-digit explosive growth is on the way. Get ready for a lengthy and continious economic ride up."


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Monday, July 04, 2005

Brunswick County, NC is Red Hot


Red Hot Real Estate rides a rising wave
Boomers look to area, fueling "phenomenal" sales growth
Article published April 26, 2005 by Bonnie Eksten

Is real estate hot in Southeastern North Carolina? you could say

Jim Wallace, president of Intercoastal Realty in Wilmington, said his company's business is up 99 percent this quarter compared with first quarter 2004.

"And, last year was a good year," Mr. Wallace said.

The natural picture is writ large in Southeastern North Carolina. Brunwisk and Hanover counties are experiencing no letup in housing demand. According to N.C. Association of Realtors, housing sales were up 23 percent in Brunswick County in March.

New Hanover County saw even more impressive 36 percent gain.

Paul Martienz, a broker with Laney Real Estate, said he believes many people shopping for homes are investing in the housing market because the instability of the stock market "scared them off"

Beach communities, in particular, he said, is seeing phonomenal growth.

Property on Kure Beach has risen as much as 100 percent in the past year, Mr. Martinez said.

Mr. Wallace, just back from a meeting with brokers from other parts of the United States, said the surge in housing sales in coastal areas is happening from Spocane, Wash.,to Portland, Maine. He said that the housing market in Naples, Fla., is robust - in spite of being hit repeatly by huricanes last year.

Boomers, the first of who turn 60 next year, are gravitating toward the coast, Mr. Wallace said. They want to get in on the market before they retire.

Wilmington is now on the map. It's no longer a secret that is a really good place to live, he said.

And that has been reflected in the run-up in housing sales and prices in this area. Brunswick County's March house sales totaled $70 million, up 40 percent over the same month last year. Average price was $284,476.

New Hanover County (numbers also include part of Pender County) also gained bragging rights. March house sales totaled $185.5 million, an impressive 56 percent gain over March, 2004 numbers. Average price was $232,853.

Mr. Wallace said it is unusual for sellers to get multible offers. A finite amount of beach and waterfront property helps fuel the market.

"When it's gone it's gone, Mr. Wallace said.

He expects the market will level off eventually, but no one can say definitively when that will happen.

George Laney, president of Laney Real Estate and president of the Willington Regional Association of Realtors, said growth in this area is playing catch-up after the hurricane years in the late 1990's when the real estate market was fairly level.

Brunswick real estate, he said is growing so fast because parts of the county are only minutes from downtown Wilmington.

"How many places in Wilmington can you say you're only five minutes from downtown, He asked.

Brunswick County, he said is "right accross the bridge." When PPD moves it's coporate offices downtown, workers might find Brunswick attractive - taxes are lower and the commute to work may be shorter.

Living five minutes from work is a great selling point, Mr. Laney said. Both Mr. Laney and Mr. Wallace said the real estate market is not experiencing a bubble.

"People are putting more money down on homes and their debt service is historically low," Mr, Laney said.

Mr. Wallace said this is the type of market that makes you "pinch yourself and think "this is phenomental growth." It's pretty incredible."
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Tuesday, June 28, 2005

Coastal Carolina Information

Coastal Carolina Information
Brunswick County is ranked # 1 in all the Carolinas fior price appreciation. We have seen prices in selective developers communities increase around 35% each year, over the last few years. Sales volume has increased in the range of 55% over last year. The luxury high-end, Second Home Market in this area is absolutly red hot. In fact, escapehomes.com ranks it Top 5 for the entire United States as the second home location of choice. Based on current prices, area historical data and future trends, we think the area has a lot of upside potential and is currently undervalued.

The Chairman's Top Investment Picks

"When the Chairman Speaks - Investor's listen..."
The Chairman's Top Picks are a culmination of BuyVacationCondos.com & LANDDepo.com to bring our clients the very best overall opportunities throughout the entire South East USA. With an ideal focus on the migration of the 42% share of 80 million Baby-Boomers coming to this same region, this creats an enviroment that rewards both the investor and Second Home / Vacation Property buyer.

Brunswick County:
 Baby Boomer - Second Home:
 Investor Information:
Free Investor Reports
Counties: Brunswick, Pender & New Hanover

Areas: South Port Real Estate, Holden Beach Real Estate, Oak Island Real Estate, Caswell Beach Real Estate, Bald Head Island Real Estate, Sunset Beach Real Estate, Calabash Beach Real Estate, Saint James Real Estate & Ocean Isle Real Estate.


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Sunday, June 26, 2005

How to Start Investing For Financial Independence, Part 1


How to Start Investing for Financial Independence, Part (1)
By Chris Anderson, PhD
Today, I am going to start a mini-part series about how to go from beginning investor to being "finacially independent" in a steady and predictable way. At our website, we get tons of emails about how do I start, how do I start with little $'s, ect., ect., ect. If you are saking this question, congradulations because you are ahead of most. All of us have been there at some point.

I must warn you.... What I am about to share with you for free is what "gurus" across the nation charge thousands of dollars for in weedend seminars. the "secrets" revealed are going to seem pretty simple because quite frankly, there is no real secrets. The methods used have been done for centuries and there is no reason to complicate them. Let's apply these principles to see how fast someone might become financially independent without beeting the farm.

Realize that everybody has wildly different starting points and different financial goals. For this series of articles, we assume that an individual has access to at least $15,000 liquid capital (or home equity) to start, is at least breaking even with their current income verses expenses, and has decent credit to obtain financing. Not there yet?.... See the footnote below.

To start, what you need is to make your money grow while keeping your current income stream, and current expense level in place. I can't say this more plainly.....To change your financial path, you have to use your money and your time to grow additional income streams that increase wealth. There is many ways to do this but we are going to use investing in real estate as an example.

Now for beginners, here is really bad news.....As an investor, you reap rewards by putting your money in HARMS WAY. You do everything in your power to minimize your risk but bottom line is that real investors money by taking CONTROLLED risks. As investors get better, they learn how to make fantastic investment returns doing things that all their friends and relatives think is crazy.....However, they know exactly what risks they are taking are why those risks are small in comparison to the potential rewards.

One reason people really like real estate is leverage; i.e, you can purchase an expensive property using 0-20% of your own money while financing the rest. So if you put 10% down for example, and then the property goes up by 20%, you have made 200% return (ignoring expenses, taxes, ect. for simplicity). Of course this works in reverse...If the property drops by 20%, you have lost not only your original investment but have to come up with another 10% as well.....Ouch!

For someone begginning, here is what I would suggest:
  1. Look for an opportunity that will return at least 150% in 2 years or less;
  2. Be mentally and financially prepared if the investment does not work out;
  3. Have VERY good reasons why you don't think you will lose money....You may not make as much as expected, but you would rather not lose money at this stage.
  4. Be patient. This single result should not either make or break you, but is crucial to a longer term plan.
In our Mastermind Group, we are bringing out a land project (see related article Land Investing that appears to meet these criterions (each investor has to decide for themselves). So let's say the purchase price is $150,000, with 10% down and another $3,500 in closing costs. With good credit, then the financing obtained would make the land payments for 2 years while waiting for growth.

Now let's say after you did your analysis, looked at what had happened in the past, looked at why you thought more and more people would want this property, ect., you decided that you think this property will average 20%/Yr escalation over the next 2 years. MORE IMPORTANTLY, you decide that barring a major meltdown in the market, you think there is little chance that you can't at least break even after 2 years.

So if you end up being right about growth, then you might make a tidy $43,000 (before taxes) or so after everything is considered. After long term capital gains at 15% let's say, then you just picked up about $36,000 of the "market's money". That is money that if you take a loss on the next investment will not be nearly as painful as if you lost your original money. When you combine this with your original investment amount, you now have around $55,000 of operating capital for step 2.

Realistically, you cannot predict how much you will make from the investment. When I invest, I try to establish in my mind what is reasonable. Frequently, I have been surprised to the positive and made much more than expected. Sometimes I have made less. The key being to put yourself at low risk situation where you have a strong reason to believe the market will go in your favor.

To accomplish this first step, let's look at what you really had to do:
  1. Had to be willing to put $'s in harm's way;
  2. Had to educate yourself enough to evaluate the risk and opportunity;
  3. Had to find the opportunity or be in a position to have the opportunity presented to tem;
  4. Had to act.
I would liike to comment on the education side. As a former professor, I have seen very smart people spend 1,000's of hours and 10,000's of thousands of dollars educating themselves to "earn a living"; this is a great move in many cases. On the other side, I have seen very smart people who want investing to be a major source of income but will not spend any time or money educating themselves.

To me, this is a recipe for disaster. By the time we finish this series, you will see that with very few simple steps, implimented over time, many people will put 100's of thousands of dollars at risk but know almost nothing about what they are doing. If you chose the path of making your investment dollars grow steadily with time, I hope this does not end up describing you.

** Footnote: If you are not yet at that level, here is what I suggest. First, read michael Masterson's book called "Automatic Wealth". This is an excellent book on how to rapidly change your financial position while staying employed. Next, I would read Van Tharp's new book called "Safe Paths to Financial Freedom". Van uses a very differnt thought process from may and so adds a great deal of rounding. Like anything else, you will not agree with everything written in these books but they provide some great thought processes. When you have some capital and are cash flow positive, them come back and revisit this article.


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Friday, June 24, 2005

Real Estate Investor Buyer Restrictions



Investor Obstacles
A dozen of the nations home builders were polled recently about their efforts to curtail investor activity in their development
  • 82 percent said they would sell only to owner-occupants.
  • 64 percent do not allow buyers to resell the house before they've actually taken possession through closing.
  • 55 percent bar resale of the house in the first year.
  • 36 percent prohibit renting in the first year.
Source: National Association of Home Builders
Speculators Beware

In a move to protect their profits and the market, home builders are waving a new sign: For sale -- but not to speculators.

By Jack Snyder - Orlando Sentinal Staff Writer
June 24, 2005
  • Provisions that force the original buyer to close on the deal.
  • Barring sales or rentals in the first year.
  • Price escalation clauses in which some rising materials and labor costs can be added to the home price.
"First and formost, we want to sell to owner-occupants," Bass said
The company also requires that if the buyer sells in the first year, he must sell the house back to the builder at the original price. The company also includes an escalator clause in which up to 10% of the purchase price can be added before the closing to account for labor and material prices. Said Derrek Sutton COO of Nicholson Homes Inc.

However, the Central Florida housing market is expected to remain strong.

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Thursday, June 23, 2005

The Lot Game (Golf Course Real Estate)

The Lot Game
Issue Date: 2004 Premier Properties Guide, Posted on: 10/26/2004
by Scott Kauffman
  • Even as the U.S. economy sputters and spurts, golf course real estate has remained a white-hot investment and shows little sign of cooling
  • Indeed, at a time when many people are increasingly down on the dow, a growing number of Americans are going to golf as a safe and smart place to invest in one's future. And wisely so, if a recent report by the Golg Research Group bears out. It finds that, during the recent recession when the real estate market has been American economy's saving grace, golf course real estate has done extrodinarily well for both builders and buyers.
  • Golf course real estate has outperformed the overall real estate market by 20 percent over the past five years, and the average price of a fairway home is now 2.5 times higher than the national average of all homes.
  • "Of course the overall real estate market has done marvelously," Hegarty adds, "but golf course real estate has done even more marvelously."
  • That's one reason golf course communities are so treasured. Besides the many first rate, resort style ameneties being offered these days, and the security and value that goes with living in a gated enclave, the vast acreage of open space is probably the primary selling point at many golf course developments - reflected by the fact that more than 50 percent of golf course homeowners don't even play golf.
  • "That's the reason golf course homes go up in value," says John Reed, a longtime golf course developer in Hilton Head and Bluffton, S.C., whose Reed, Rowe and Zinn team is currently involved with the Berkeley Hall and Hampton Hall developments. "When you put a nice golf course in a community, it's a stamp that says (the developer) contributed 200 acres to green space and open space, and has invested to this space. Even if you're not golfer, you'll enjoy this value. It's an investment that diversities their portfolio and gives them a lifestyle option."
  • The Concession is Daves' initial foray into golf development business, and he's extremely optimistic about the demand for lots and memberships at this private club. Says Daves: "When investors knew Jack wanted to buy a home, it made it easy for others because he's made a lot of people a lot of money over the years"
  • "And we Americans love our games, and golf is the perfect game. Men and wemon can play it, and it's the only sport where you can play with professionals. Then of course there's the natural beauty. People love green grass and trees. It's got so much going for it."
  • "In the near term, every indication is there is more depth and breadth to this buyer's market than anyone anticipated," says Randy Lyon of the Ginn Co., who has been previously involved with such acclaimed projects as Isleworth and Lake Nona in the Orlando Area, "nothing to me indicates this is a bubble"
  • Geoffredo says with a smile "I can't argue with success"
The Lot Game
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Friday, June 17, 2005

Second - Home Buyer Market Profile

Sunny Second Home-Market
2005 Profile of Second Home Buyers
(May 12,2005) -- The near term outlook for the second-home market is strong, but there are reasons to be concerned down the road, said David Lereah, cheif economist for the NATIONAL ASSOCIATION OF REALTORS, at NAR's Resort Real Estate Committee meeting on Wednesday in Washington, D.C.

The meeting was part of the 2005 REALTORS Midyaer Legislative Meetings & Trade Expo, being held May 9-14.

"For the next five to 10 years, this is a very healty marketplace," Lereah said. "By and large, the second-home market is healthyier than the primary-home market."

Second homes accounted for 36 percent od all residential transactions in 2004, with 23 percent purchased for investment purposes and 13 percent for vacation residences, according to NAR's 2005 Profile of Second-Home Buyers.

Fueling the second-home market are baby boomers taking advantage of equity built up in their primary rsidences; strong demand from foreign buyers; and easier financing availbility. However, Lereah said loose lending pratices and speculative buying could dampen demand for these properties in the future.

Lereah presented these additional highlights from NAR's second-home survey:
  • The typical vacation-home buyer is 55 years old with a total household income of $71,000. Investment-property homebuyers have a median age of 47 years with a typical household income of $85,700.
  • The median distance between a vacation-home buyer's primary residence and second home is 49 miles, compared with 18 miles for investment-property purchasers.
  • The majority od second-home-owning households--71 percent od vacation-home buyers and 59 percent of investment-property purchasers--have no children under 18 living at home.
  • 83 percent of vacation-home buyers and 84 percent of investment-property purchasers used a real estate pratitioner in their search and purchase.
To reflect the increasing importance of second homes in all areas of the country, the committee has asked the NAR Board of Directors to approve a name change for the committee, to the Resort and Second Home Committee and Forum.
--Chuch Paustain, REALTOR Magazine Online
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Thursday, June 16, 2005

Is 100%+ Annual ROI Possible with Low Risk Investments?



Is 100% Annual Return On Investment Possible With Low Risk Land Investments?

By Chris Anderson, PhD

Unlike many People, I have a very broad definition of preconstruction investing which can be summarized as follows:

Preconstruction investing is the pursuit of real estate projects that offer the opportunity to ride rapidly increasing prices without the need to put tenants in place to defray costs. Since no tenets are involved, this opens the possibility to making investments in locals that are far removed from where you live.
If you adopt this point of view, then a whole world of "alternative" preconstruction investments opens up to you. Today, we are going to look at one specific type of investment: investing in developing land projects where baby boomers might want to retire or own a second home.

Before we get into specifics, let's talk about what all investors want:
  • Low Risk
  • Good investment returns; and
  • Minimal use of their capital
Quite frankly, these 3 reasons are what got me into preconstruction real estate in the first place. Now let's see how these might be achieved on a purchase of investment land that we believe to be VERY desireable to boomers.

Suppose we are considering the purchase of a piece of property for speculation of future returns. If, like me, you believe in the impact of the baby boomers, then you will do 3 things to control your risk:
  1. Carefully select a land project where you are solidly convinced that baby boomers will want to possess it at any costs;
  2. Make sure that you believe that baby boomers will be AWARE of this project in the future due to somebody's marketing; and
  3. Manage your finances and investment portfollio so that if you are wrong and you do not a loss, it is not catastropic to you.
For the time being, let's assume that you have met these conditions on a project and now you are ready to analyze your returms and your use of capital.

Now we have to resort to hard analysis. Let's look at the following ASSUMPTIONS:

  1. The land project is assumed to increase at least 25%/YR in price;
  2. We plan on holding the land for 2 yrs and then resell.
  3. $200,000 purchase price with $5,000 in closing costs.
Let's take a look at three cases in a spreadsheet format to how things might turn out under this scenario.

Case 1: 10% down payment, interest only, all payments made by BUYER.
Case 2: 10% down payment, interest only, all payments made by SELLER.
Case 3: 5% down payment, interest only, all payments made by SELLER.

Cases 2 and 3 reququire a bit of explanation. There are some early stage land projects available where the developer will take a percentage of your purchase price and escrow an amount that will make your payments for a period of time ----typically 2 years. This means that during your 2 year hold, you would only pay taxes and association fees. To enter this in the spread sheet, we just show 0% rate during the holding period.

If you scroll down, you can review the performance of each case. It may surprise you that even under case 1 , where you paid in a total of $48,600 out of pocket, you still see a return on investment of 127%! That equates to 51% annual return on investment. Compare that to what your friendly banker is giving you in your CD.

For many investors, beginning or not, they would prefer not to have to put in that much money so let's look at Case 2 where the developer has escrowed 2 year worth of payments. In this case, we invest a total of $29,000 with a total, out the door profit before taxes of $81,625 thus providing a total return of 281%. If you then extend that to case 3, where only 2% down is required, then the return goes off the charts.

The biggest variable here is our assumed appreciation rate: we choose 25%. Of course this depends on the general market, the local market, the project, ect. and NOBODY can predict this going forward. So what happens as the assumed level goes from -5%/YR to 50%/YRwhich hopefully will be a good bracket. The chart shows the results.

In the very near future, there will be some opportunities on "preconstruction" land similar to what is described here! If this type of investment may be of interest to you, then your job becomes deciding these 3 factors:
  • Is it low risk for YOU?
  • Is it good investment returns for YOU?
  • Is it an acceptable use of YOUR capital?
To assist, we will try to present enough information about the project/local for you to assess your own risk and projected growth rates: what you assume may be quite different from what I assume and that is ok. To assist with the other pieces, we have provided a copy of the spreadsheet used iin this article so you can make your own assumptions and analysis. Click Here to get the spreadsheet at no cost.



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Saturday, June 11, 2005

Top 10 Real Estate Markets

New Second Index Revels Top Real Estate Markets
EscapeHomes.com begins tracking market trends of vacation, investment and retirement home buying. Based on over 200,000 searches, The Second Home Market Index charts the nations ten most popular second home destinations.

The results are based on more than 200,000 property searched made on the EscapeHomes.com website, during the month of February, 2005

  1. Mrytle Beach, SC
  2. South Padre Islland, TX
  3. Naples, FL
  4. Holden Beach, NC
  5. Ocean City, NJ
  6. Las Vegas, NV
  7. San Diego, CA
  8. Park City, UT
  9. Orlando, FL
  10. Sante Fa, NM

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Where Boomers want to Retire?

USA SNAPSHOTS
A look at statistics that shape the nation

Where Boomers want to retire?

About half of Boomers (born 1946 - 64) think they'll move to another house when they retire; 22% want to go to a new state. Where Boomers say they want to live in retirement:
  1. 42% South East USA
  2. 23% Mountain Central
  3. 9% Pacific
  4. 6% West South Central
  5. 6% West North central
  6. 5% East North Central
  7. 5% East South Central
  8. 4% New England
  9. 2% Middle Atlantic
Source Del Webb, By Anne R Carevano

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