The second habit of highly effective people is to “Begin with the end in mind.” In other words, you should know where you are going to finish.
When you buy a property, and plan to renovate it, are you disciplined in your approach? Or do you spend a few minutes looking for the lowest price home in a community, make an offer and hope for the best?
Today, there are stories everywhere about people who have had it rough over the last few years. Bud Matthews in North Carolina has been asking Suntrust bank to stop the foreclosure on his business headquarters building for months. He has not missed a payment in over 10 years, but Suntrust Bank has called his loan.
Bud Matthews decided to fight back and has now hired an attorney to help keep his business going. If you attended WREIA last month, you heard some other similar stories here in the DC area. To read the rest of Bud Matthews story visit http://www.newsobserver.com/2012/03/11/1919843/entrepreneurs-scramble-as-banks.html
We want you to understand where you are going with your real estate business. Most of us who attend WREIA each month either have, or have the desire to buy, renovate and sell a home.
When you finish the hard work of renovating the property, who will buy the home? How will they finance the property? How much is their down payment? How much will YOU make as a profit for you hard work?
If you know the answer to these questions – FROM THE BEGINNING – you will have a much higher level of success in this business.
For instance – let’t talk about the note business for a moment. Specifically, the commercial non-performing note business. Following is a brief piece from MarketWatch.
“According to the latest Ernst & Young US nonperforming loan (NPL) survey, At the crossroads: Ernst & Young 2012 real estate nonperforming loan investor survey, investors could also see more opportunities to acquire commercial real estate debt instruments in the year ahead. Despite improvements in bank earnings and declining loan loss reserves, the sheer volume of US commercial real estate loans maturing in the next five years — estimated to be close to US$ 1 trillion — could put pressure on US banks to step up their efforts to strategically sell some of the more than US$100 billion in NPLs, currently on their books.” You can find the article in it’s entirety at http://www.marketwatch.com/story/ernst-young-investors-eye-four-more-years-of-distressed-real-estate-debt-opportunities-2012-03-12
The numbers boggle my mind. $1 TRILLION in commercial real estate loans will be maturing in the next 5 years. And already, there are $100 Billion in non-performing loans.
Could you work with a small bank and purchase (at a discount) a few small commercial loans? Could you re-structure those loans and keep another small business afloat, like Bud Matthews we talked about above?
This month at Washington REIA we are going to have a few people who work on the front lines of the residential home financing business. They originate loans for retail homeowners and for investors. Join us for one night and learn where the business is, and who you should be targeting in the retail market. The loan market is still a challenge, but when you have the right mix of properties, home-buyers and price, business is getting done.
Begin with the end in mind. Know who will purchase your renovated home. Know how they will finance it. Most importantly, know how much their down payment will be. Very few deals are going to a closing table without the right mix of these “ingredients”.
In The Seven Habits of Highly Effective People “Begin with the end in mind” is habit #2.
Habit #1 is “Be Proactive”. Register now at http://mar2012-wreia-ws.eventbrite.com and join us on Monday at WREIA. Learn where the financing business is headed, and learn first hand where retail homes are being sold.
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And as always, let me know how I can help with your real estate investing here in the DC area.
See you on March 19th,
Washington REIA Network, President
Profitable Property, Founder
Find video updates on the Profitable Property Channel at
Register early for the March 19th WREIA meeting online, and skip the registration line!
You will also find the registration link at http://mar2012-wreia-ws.eventbrite.com