Yippee!! School started for my kids this week and they sure are excited. New teachers, new classmates, new responsibilities and eager anticipation for the coming months. My youngest is excited that he gets to dissect a dead squid and stab the ink sack with something sharp. My oldest came home with 58 math problems the first day of school, so his excitement is already waning. Summer was sure terrific and our family had a lot of fun, but I like the beginning of the school year because the entire clan gets back into a routine and on a pretty strict (albeit hectic) schedule. Yes, things around the house are once again back to normal (whatever that is!). This time of year is great for my business routine as well. It’s natural that we all fall out of synch, or ‘off the wagon’ during the summer. You know what they say---All work and no play, etc. So take the time now to re-establish your daily ‘best business practices’. Begin by mapping out your day. This is called time blocking. You should already know tonight what you are doing during your work day tomorrow. Take 15 minutes at the end of each day to map out what you are going to do the following day, in increments of 15 to 60 minutes. Fill your calendar, hour by hour, with your tasks. Writing everything down is very important. You need to pace yourself correctly during the day, and if you don’t commit your itinerary to paper (virtual or the real stuff) you will continue to be scatter-brained. If you like, you can do your time-blocking in the morning when you get to the office. Close the door for ten or fifteen minutes and open up your calendar. ONLY your calendar. Do not open your e-mail yet! You know who you are! Map out your day, and then stick to it. Try blocking out your daily schedule for two weeks, and I promise it will change the way you perform at the office. Things will fall into place and your productivity will fly through the roof. Be sure to block out time for lunch, and a little recess to read the newspaper or surf the net. You need some Zen time during the day to keep your head on straight. My boys are establishing their new school routines this September. No more staying up late or week-night sleepovers. Let’s you and I get our office routines back on track as well so we can get our tasks completed more efficiently, giving us ample time to help the kids with their homework (my other job!).

FHA has done some positive things to help the housing market, most notably the $8,000 buyer’s credit. However, I do take issue with another program that was instituted recently and has hand-cuffed the ability of lenders and brokers to close loans quickly and effectively.

So isn’t it time to toss the whole HVCC idea out the window? Raise your hands if you like the process. Yes, that’s what I thought. No hands. Now raise your hands if you are selling a property, or trying to get your client a loan on a property, and the Home Valuation Code of Conduct has gotten on your last nerve. Yep, a room full of hands. Including me, my real estate agents, and my mortgage brokers. It seems that every sale we are making comes with an extra three or four weeks of stress, all caused by the HVCC rules, most notably the need for an Appraisal Management Company (AMC). And I promise we are selling properties at or under fair market value in order to sell quickly. In other words, the appraisals should be a slam dunk.

I don’t know about you, but when I sell properties to FHA-qualified buyers, it sure would be nice to hire my own appraiser instead of going through an AMC whose sole purpose (it seems) is to keep the entire appraisal process anonymous. This stonewalls the real estate agent and mortgage broker because now they are not allowed to speak with the appraiser and share what could possibly be vital information with regards to the value of the home in question. And watch out when your value comes in too low, because you cannot speak to the appraiser directly and get some good honest feedback. You can submit paperwork to contest the appraisal, but cannot actually speak to someone.

And it isn’t the appraisers fault at all. They are bound to these new rules as well. In fact, should they stray from the guidelines, their work-load may be drastically reduced because now the AMC’s control the project-flow to them. And that in itself makes for bad commerce. Appraisers have spent years building up relationships with lenders and mortgage brokers, and after the AMC’s came on board, those relationships have meant absolutely nothing. Now there are plenty of appraisers in re-building phases of their businesses. I always believe it is important to be in business with people and companies with whom you have developed long-lasting relationships. Like appraisers, lenders, agents, contractors, and the like. My business isn’t meant to be done with some anonymous company whose job (it seems) is to beat down the buyer, seller, and agent’s idea of value so the lending bank can make a more conservative loan or no loan at all. What a bunch of poppycock! (I’ve been waiting for weeks to use ‘poppycock’ in a sentence).

Let’s hope that some changes come quickly, so we can get our business back on track.

I teach a class every so often about how to structure deals with your private lenders. I do this because I believe that the only way to leverage yourself properly and sustain your business is to have an availability of funds greater than the number of properties you need to buy to keep your business model on track. That’s a mouthful, but the truth in that statement becomes more evident all the time.

Take it from me; you are going to eventually run out of your own money if you plan on having an investment business that thrives. If you just want to buy a property, flip it, and buy another, then you need not pay attention to this article (although the writing is spectacular!). However, if you are serious and want to see exponential growth as an investor, then listen closely....Go get as many private money lenders and partners as you can find!

News Flash: There is a TON of money out there to be borrowed. People have no idea where to put their investment dollars. Stock market? Yeah, that’s safe. Money markets? Sure, if you like less-than-one-percent return . Real Estate? Now we’re talking! My company routinely offers our lenders between 10 and 12 percent interest, and often we do equity splits as well! Where else is your Rich Cousin Bobby or your dentist going to find returns like that? I’ll wait while you try to answer.....still waiting.....Yep, I thought so. Stumped, aren’t you?

The deal is this: Because we buy our properties well below current market value (which is far below what their values were three years ago), we have an equity cushion of at least 25-30% in each project, thereby creating a very safe scenario for both lender and borrower. Then, we secure the loan with a Deed of Trust, which basically says that if we don’t pay back the loan, the lender can go after us and take the property. In short, we do everything we can to protect the money guy (or girl).

You have to be confident and know all the awesome selling points for you to have in your arsenal when you go search for money. My suggestion is that you begin with this mindset: You are offering something that is so beneficial to the potential lender that if she passes on the opportunity, she might as well bury the money in the backyard (hey—these days that’s not a bad second choice!). You see, I don’t beg people to borrow their money. The money comes to me because the opportunity speaks for itself.

And yes of course, if you are someone’s Rich Uncle Bobby, then take my advice and lend your money on some real estate. You can even use your IRA or 401K money and earn tax-deferred or (yes its true) Tax Free returns.

If you have any questions or comments about private money strategies, please call or write.

Are you enjoying the Olympics? I sure am. The athletes are incredible, full of grit and determination and perseverance. They face constant adversity and enormous challenges every step of the way in becoming world-class competitors. They don’t give up. The word ‘failure’ is not in their vocabulary.

How about you?

Do you have what it takes to win? Are you a ‘never-gonna-give-up’ type? If you are, then congratulations. You will not fail, because failure, by definition, can only happen when you quit. If you continue to push forward to succeed in whatever it is you are doing, whether it’s starting a real estate investment business, or becoming a star short-track speed skater a’ la Apolo Ohno, you can succeed if you never stop trying.

Ok so maybe you aren’t going to win a medal in Vancouver. But more than likely that isn’t your passion anyway. Your drive to succeed is based on other factors, desires that are a little more basic. Your goals probably have to do with making money, supporting yourself and your family, being independent and becoming financially free. These goals might not be as lofty as those of our American Olympic team members, but they are no less important. And the good news is that they are undeniably achievable.

Sure there are pitfalls along the way. You may start a business that never really gets off the ground. You thought it was a great idea and would be your ticket to independence. Well, guess what? Things don’t always work out as planned. So take a deep breath, do a reality check, strap on your skates, get back out there and do it again. If you quit, you have failed. If you keep at it, you can only succeed. Winners never quit and quitters never win, right?

It’s not that we don’t want to “Go For the Gold” in our lives. It’s just that we are generally too lazy to succeed. Let’s face it; being lazy is so darn easy! If reaching our goals was straight-forward and undemanding, everyone would do it!

Curtis Mayfield sang a song called “Keep on Keepin’ On”. Download that baby to your IPOD and listen to it when you start having ‘quitters’ thoughts creep into your head. The mantra of never giving up has to be part of your life, part of your day, part of your DNA. Otherwise it’s too easy to stop and say, “Oh well, I’ve given it a shot but it’s not happening quickly enough for me-- I’m outta here”. I hope that doesn’t sound familiar. If it does, then go watch the Olympics. You are sure to be inspired by the exceptional athletes and their awesome skills. They work extremely hard for their success, and they never stop reaching for their goals.

Please write me at dberens@roadrunner.com with any comments regarding this article, or your real estae business in general.

Dave

So my friend Mark, who we affectionately call ‘Caveman’, is (like a caveman) adapting and evolving all the time. He is a semi-famous voice-over artist who constantly thinks out of the box. He’s always looking for different streams of income to steady the feast-or-famine income fluctuations that occur when you are a freelance artist.

His latest incarnation is a cooking blog and website called “Caution: Caveman Cooking”. Nice name, great recipes, cool pictures. Go visit it and see if you agree. I especially enjoy the Panang Chicken.

“So Dave”, you ask, “we get the shameless plug thing, but how does this relate to real estate?” Well, as my 8-year old says when he solves a math problem, “Easy-Peazy”. The point is that Mark is always moving forward. He doesn’t sit on his keester and wait for life to come to him. He realizes there are more avenues open to him than just voiceovers and he jumps into new ideas all the time. He takes action and welcomes change.

In my business, I also open myself up to new strategies all the time. Truth be told, I could stretch my horizons a little more than I do. A good business grows continuously. It becomes more valuable because it is constantly blossoming. It changes by moving forward.

Change and growth can happen in the administration of the business. Maybe a simple idea, like implementing a new marketing campaign, will promote growth. Or you buy a new software program for lead tracking, thus enabling you to leverage your time. Larger ideas, like making the big jump from residential real estate to commercial real estate can take more thought and planning, but still the train keeps moving forward down the tracks, and that’s what counts.

Education plays an important role when embracing change in your business. You might attend a new workshop on seller-financing or learn how to stage a house. Whatever it is, you will see that as you reach out to learn a new skill, you will align yourself with individuals and groups that will help you get where you want to go.

Just be open to new methods and new strategies. Meditate about them. Go ahead. It’s fun! Listen, we all know that people in general are too close-minded and set in their ways (yes this means YOU, human!). All I ask is that you try a few new things once in a while. This counts for your personal life too, by the way. But that’s a whole ‘nother column.

Now go cook some of Caveman’s Juicy Beer Can Chicken and I’ll see you next time.