Real Estate Investing Blog

Did you know that 46 out of the world’s 691 billionaires made their fortunes in the real estate industry? Well, according to Forbes magazine’s 2005 annual list of “The World’s Richest People,” this elite group have quite a bit in common between their habits, lifestyles, and business styles. Here are some unifying qualities shared by America’s richest real estate moguls.

1. Go commercial. Billionaires who make their fortunes in real estate don’t do it in residential. They are moguls with an empire of owned and operated office buildings, shopping centers, apartment complexes, and luxury hotels. That strategy works particularly well for “America’s richest landlord,” 73-year-old Newport Beach Resident Donald Bren, the wealthiest man in American real estate. This self-made millionaire, with a net worth of $4.3 billion, made much of his money as chairman of The Irvine Company, a privately held real estate investment company known for creating balanced, sustainable, quality communities like the 93,000-acre Irvine Ranch in Orange County. Finished plots sell for more than $1 million an acre. The ranch also has 400 office buildings, 35 shopping centers, 80 apartment complexes and 2 luxury hotels. Bren is 6th wealthiest real estate billionaire and the 122nd richest man in the world. He is also one of real estate’s great philanthropists.

2. Do more than invest. Making big money in real estate goes beyond buying property and waiting for it to appreciate in value. It’s all about improvements. John Sobrato of Sobrato Development Companies calls Atherton, home, but he made his fortune in Silicon Valley – for more than 40 years, Sobrato’s SDC has developed real estate in Silicon Valley – specializing in facilities for high tech and R&D companies. Another self-made man, he began in 1953 with one of the first “tilt-up” buildings in Santa Clara County. Sobrato, who owns and manages the buildings it constructs and maintains single tenant occupancy, boasts a portfolio of $1.5 billion. His assets include land throughout Silicon Valley, San Jose, Fremont, Newark and Santa Clara and he has developed in excess of 7,000 rental units.

3. Be able to see the property for what it could be. Just because you buy a shopping complex doesn’t mean that’s the highest and best use of the property. Know the local zoning codes and be open to the possibilities…Los Angelino Ed Roski did just that. Roski is the founder of Majestic Realty, the largest commercial builder in Los Angeles, boasting an office, retail and industrial portfolio totaling more than 55 million square feet. The USC grad with a net worth of $1.1 billion saw the highest and best use of the formerly blighted area near the convention center and built the Staples Center with Philip Anschutz. Roski is also a minority owner of the Lakers and the Kings. Headquartered in City of Industry, Majestic Realty also has offices in Atlanta, Dallas, Denver, and Las Vegas – where they have a 400-acre business park and 3 million square feet of casinos.

4. Be tenacious and relentless. Billionaires don’t let obstacles or pitfalls keep them from achieving their goals. Newport Beach billionaire George Argyros is the grandson of Greek immigrants. Argyros began by running a Palm Springs grocery. He graduated to buying and selling corner lots at busy intersections for gas stations. Turned to apartments in 1968. Today, as part of Arnel & Affiliates, Argyros manages apartments and commercial properties in southern California. He has a net worth of $1.2 billion.

5. Have a thick skin. People can be resentful and jealous of successful people. Don’t let criticism of your work deter you from your goals. Consider Red Emmerson – the second wealthiest real estate titan in California. Emmerson is the largest private forestland holder in North America – assets include 1.52 million acres in Northern California, timberland stretching more than 350 miles from Mount Shasta to Yosemite National Park. For the last 20 years, while other logging companies retrenched or relocated, Emmerson, and his company – Sierra Pacific Industries – quietly grew into the second-largest private landowner in the United States. Needless to say, Sierra Pacific is a darling of environmental groups.

6. Have superior information. If you do more research than your competitors, you’ll have an advantage in any transaction. Self-made billionaire Carl Berg was a loan processor before investing in Silicon Valley commercial real estate with John Sobrato in the 1960s. He struck out on own, forming Mission West Properties, a real estate investment trust (REIT) in Silicon Valley. Berg owns a controlling stake in the REIT, which focuses on single-tenant research and development and office properties in Silicon Valley. Mission West now owns and manages more than 100 properties, major tenants include Microsoft and Apple Computer. Currently, the Atherton-based businessman boasts a portfolio of $1.2 billion.

7. Don’t accept the cards you’re dealt. Forbes notes that while one-third of the world’s 46 billionaires who make their money in real estate inherited and then grew their fortunes, two-thirds are self-made. Stockton-based A.G. Spanos Companies are known for building, managing, and selling multi-family housing units; constructing master-planned communities, and developing land. Although California based, they have expanded to build more than 100,000 apartments in 18 states since 1960. A.G. Spanos Companies have also developed top-class office space in San Joaquin County. Alex Spanos, owner of the NFL’s San Diego Chargers, operates the company with his sons Dean (president and CEO) and Michael Spanos (EVP). Spanos, whose net worth is $1.1 billion has pledged $200 million to San Diego for a new stadium for their football team.

8. Live in California. Of the 21 U.S. billionaires who made their fortune in real estate, more than one-third live in Atherton, Los Angeles, Newport Beach, Palo Alto, or Stockton.

9. Get, and stay, married. Of the 43 real estate billionaires whose marital status is known, according to Forbes, 37 are married, while only three are divorced and three are widowed.

10. Go back to school. Of the 26 real estate billionaires whose educational attainments are known, 20 have a college degree or higher. Five made it on high school diplomas, and one is a high-school dropout. John Arrillaga is a big donor to alma mater Stanford University. Arrillaga + Richard Peery are two of 2 of Silicon Valley’s biggest commercial landlords. In the 1960s, they converted farmland into pricey office space. Peery and Arrillaga are lifelong business partners who avoid debt, and the media. Each has net worth of $1 billion.”

The Globe and Mail has done a great job telling the story of the collapse of the Sub Prime Mortgage market. You can read the whole story here or hang out here for my summary.

When the real estate market in the US was extremely hot a few short years ago. People were getting loans to buy homes with no documentation, less than stellar credit, financing more than the purchase price, qualifying for the loan based on a discounted teaser rate and investors were buying these loans up like they were going out of style. They were betting that the market would never cool off and home values would continue to rise, probably using the old adage ” they are not making any more real estate”. However what they failed to realize is that some of these people could not afford to continue making payments.

Reality set in last year when investors started to loose interest in buying ABCP from lenders whose pools of mortgages presented too high a risk. This combined with adjustable rate mortgages resetting to higher limits forcing people into foreclosure, created the perfect storm in the real estate market. People were loosing their homes, investors were loosing the shirts and those on the sidelines were unable to get in the game as sub prime and prime lenders were dropping like flies.

The end result is that the consumer has fewer options available to them for financing their home. However the strange part of it is that there is a silver lining. The lenders with questionable lending practices are now gone and homes that were out of the reach of some people are becoming a possibility. So do your home work and consult an investment advisor like my friend Steve Cox.
before investing your hard earned money and when you buy your house make sure you leave your self room to live as well.

Cheers,

Pat

Buying a fixer upper property requires that you hire a real estate investor that is quite knowledgeable about inspecting fixer upper property. You see, home inspectors alert buyers about problem areas in a house and its systems, before you buy. In essence, they act as your insurance that you’re making a well informed and good investment decision. In this article, we will discuss what things home inspectors evaluate when viewing fixer uppers.

First of all, the inspector will evaluate the property for defects on the outside of the house. That is, he will evaluate the fixer upper property for structural problems like foundation cracks or roof leaks. Either way, he will evaluate the “soundness” of the home.

Second, the inspector will examine the fixer upper’s windows, patio, deck and doors of the fixer upper property. He will also evaluate the sidewalk, driveway and other outside areas to make sure that there are no visible defects.

Third, the inspector will check the inside of the fixer upper property. This includes evaluating appliances, walls, sinks, ventilation and cooling units, countertops, etc to make sure that there are no defects and that everything is in working order.

Fourth, the inspector will check the property’s crawl space and basement areas. He will look for signs of water leakage, mold, mildew and other defects. If any problems are discovered, he will make note of them on the report.

Fifth, he will evaluate the fixer upper property’s electrical system and wiring. He will ensure that the property is properly grounded and that there are no unsafe wiring exposed that could cause problems.

Sixth, he will next check the plumbing of the fixer upper to make sure that the pipes are functioning properly and that there is adequate water flow and pressure. He will also check all fixtures, drains and toilets for proper drainage.

Seventh, he will check the heating and conditioning systems of the fixer upper to ensure that units are allowing for adequate air flow throughout the house.

Lastly, he will check the fixer upper for evidence of any pests, like ants, roaches, or mice. He may also look for wood-destroying insects, like termites. Note: In some instances, it may be a good idea to hire a separate person to complete a more thorough investigation if any suspicious activity is suspected.

In the aftermath of the U.S. housing bust, one California woman recently sued her real estate agent for fraud, blaming him for getting her into a home with an inflated price. The woman claimed that other comparable homes in the area were selling for much less, but the agent concealed the information from her in order to collect a hefty commission on the higher sale price.

Unfortunately, this is not an exceptional tale from the now-past housing boom. With home prices appreciating at light speed in many areas of the country, greed took over for not only real estate agents, but homebuyers, speculators, mortgage lenders, home appraisers, and Wall Street investors. The traditional rules that guided the home-buying process were tossed out the window as people on all sides of the deal saw ways to get rich quick.

So whose fault is it? Who created the mortgage mess and is there still a place for ethics in the real estate market? The answer is varied and complicated, but two things are clear. One is that many different participants share the blame for the housing crash. The other is that the real estate scene can only properly function with the ethical cooperation of all involved.

Where does the guilt start? Let’s begin with speculators. Several years ago, investors across the country started pouring money into homes in order to fix them up, rent them out, or sell them for greater profits. This led to a buying frenzy as people heard tales of the financial killing that was to be made from flipping houses. The result was an abundance of homebuyers. Homebuilders stepped up to the plate by overbuilding in many areas to capitalize on the housing frenzy.

As homes were being bought up after only minutes and hours of being on the market, the prices started to increase. Increased demand equals scarcity and higher prices, right? At that point average homebuyers started to have difficulty getting into the market as their incomes were not growing as quickly as were home prices. In order to get around this, many lied to their mortgage lenders, claiming higher salaries and greater assets.

Banks and mortgage lenders were willing to go along with the fraud because home prices were escalating so quickly that most buyers would be able to refinance or take out home equity loans with ease if they needed more cash to pay for the mortgage. Largely forgotten were the time-honored requirements of 20 percent down payments and good credit reports. Lenders created and pushed creative financing programs that included little or no down payments, risky adjustable interest rate plans, and plenty of no-income documentation loans.

Borrowers gobbled up these loans like crazy, barely pausing to read the fine print or find out how much they would be paying for their mortgage after the initial low interest period.

And of course real estate agents and housing appraisers got in on the act. They inflated appraisals to make more commission money and steered buyers into homes that were not worth as much as they were selling for.

Don’t forget Wall Street. Investors across the country and the world invested billions into these risky loans because they seemed like a sure bet with the housing market on fire. With more investors, demand for these loans increased, causing many lenders to guide borrowers into exotic mortgages even when they were not a good fit.

The result is that millions of homeowners are facing high resetting interest rates and payments, hundreds and thousands of homes are in foreclosure and default, and the stock market has plummeted with the related losses.

Rebalancing has already begun in the real estate market with lenders reverting back to strict standards of good credit and large down payments. Borrowers now have to wait and save instead of diving into huge purchases and stock investors have started looking elsewhere for safer ventures. The process will likely take several years to complete and many have suffered and will suffer financial ruin in the mean time. Only ethical and wise behavior on the part of all involved can save the market from another devastating crash.

Let’s face it. This planet is in a crisis. Don’t let anyone tell you otherwise. To create the energy we needed to sustain our modern comforts, we’ve polluted our atmosphere with countless gasses that will eventually warm the planet. A major part of this is the energy we squander heating and cooling our homes which is produced using fuels that emit greenhouse gasses. The solution is simple. Build homes that use less energy.

Earthen homes are at the top of the list. These are also known by the name of earth ships. Problem is that a majority of the living area on an earth ship is subterranean and doesn’t meet many fire codes for egress as I understand.

One other is the chord wood house. This is also an excellent choice and I don’t believe there are many downsides to this method except it’s walls are nothing but firewood logs cut to length and put together with mortar like a brick house. I say it’s a downside because we really need to save as many trees as possible. No, I’m not a tree hugger sorta guy, I just know that trees are the one element of nature that, if left alive, will scrub many of the bad gasses out of our atmosphere.

So then we come to building homes out of bales of rice or wheat straw. The straw is something we have been actually throwing away as waste in this country for years. Yet when put together as wall units, produce a very high restivity factor of R-39 to R-52 with a wall thickness of 14 to 16 inches. Wow, the common house built in America today using standard building methods is generally R-13 to R-19. R or resistivity is a number measuring a material’s resistance to heat flow. R stands for resistance. Anyway, there is over double the difference in how much heating and cooling these walls can contain. Less energy used, less greenhouse gasses spilled into the atmosphere.

Once the walls are up, then the home is wrapped with a fabric that allows moisture to exit but not enter the walls and then is covered in about one inch of cement. These structures are as beautiful as they are functional. Even better is that only 20% or so of the structure is lumber so trees are saved. The cost is probably 50% less than standard construction methods and they last for ages. There are straw bale buildings in my area of Tennessee that have withstood the elements for well over a century.

Realtors are supposed to have a fiduciary relationship with buyers or sellers of real estate. They are sworn to uphold this capacity and work in the best interest of either the buyer or the seller. That is to place the best interest of the buyer or seller first, above their best interest.

Interestingly, the National Association of Realtors (NAR) choose to fight the government long and hard to prevent other brokers from modernizing the sales system through some new marketing capabilities of the Internet.

The Multiple Listing Service was built upon the premise that Agents and brokers would cooperate and have equal access to sell one another’s inventory.

In the proposed settlement between the Dept. of Justice vs. The National Association of Realtors, President Richard Gaylord recently announced, “the settlement affirms the value of Multiple Listing Services as a tool of broker-to-broker cooperation.” But this is exactly one of the reasons why the Department of Justice (at the expense of the American public) had to file an antitrust lawsuit against the National Association of Realtors in the first place. The NAR was blocking the equal opportunity use of the MLS system by virtual office (Internet) brokers. They were not letting every broker use the tools Mr. Gaylord claims are of such value to share broker-to-broker.
Mr. Gaylord is taking credit for bring about the very change that he and the NAR were trying to stop and had to be forced to allow. It seems rather hypocritical to run an organization and system, that functions on member cooperation, to then only turn around and prevent this same cooperation. Then for the sake of public relations, the NAR claims victory over the government when it was the government that actually had to force them into this cooperation. And at a cost of how many thousands of dollars out of the taxpayers pockets for them to attempt to do business in a self-serving fashion.

Who’s kidding whom?

The National Association of Realtors took money away from the taxpayers of this country in order to protect their own pocketbooks and then, they want to look like the good guys when they loose the fight. This proposed settlement will bring about change to enable competition, perhaps resulting in lower commission rates and this is what the fight was truly over, the NAR wanted to keep commission rates higher. Not helping the consumers as Mr. Gaylord had the Audacity to announce. This is a conflict of interest. The National Association of Realtor’s interest above all others.

It is sad to see the MLS has become such a dinosaur but with this attitude it is small wonder why. They survive because they are the giant but so was Tyrannosaurus Rex. Instead of embracing the capabilities of the Internet they have once again spent years and the taxpayers money being greedy obstructionists to advancement. It seems they have been so bust fighting the inclusion of others that they lost sight in their own system.

Each year, Siesta Key is a destination that tourists and local residents flock because of the breathtaking natural beauty of the place. Especially if you are the type of person who enjoys the scenery of fine white beaches, then you will surely fall in love and be captivated with Siesta Key.

You will definitely love the sunrises and sunsets that you will see in the place. Needless to say, it won’t be long until you realize that Siesta Key is definitely the perfect place for you and your loved ones.

Furthermore, Siesta Key also has a lot of different amenities and establishments to offer for many different types of people. Whether if you are the type of person who wants to have a great time and enjoy some night life activities or you are someone who is simply looking for a nice fine dining restaurant to go to, you can be sure that you will have several options when you are at Siesta Key.

For instance, you will also find the Sara Sand in Siesta Key. It is a place that is located at the heart of the city and it provides a variety of choices for people when it comes to restaurants, malls, markets, art galleries, entertainment centers and many other establishments that will surely meet your interest.

People who may be considering the idea of staying for good in the place may be interested to learn more information about Siesta Key real estate. As you will eventually discover when you do your research, there really are a lot of available properties that you can purchase in the place at any given time of the year- from condominiums that face the gulf front, to attractive apartments and villas that are near the beautiful sea sceneries.

In most cases, people truly agree that Siesta Key real estate is an offer that they should immediately jump in to since it is one chance to live in a place that offers a lot and yet a place that is peaceful enough to live in.

Without a question, Siesta Key is truly an ideal place to choose when it comes to picking a place to reside in. In there, you will have the chance not just to explore the beauty of nature but to enjoy and experience it for the rest of your life. At the same time, the technology in the place is actually more than sufficient so you can easily get connected with people from other places. Not to mention, there are also a lot of business opportunities in Siesta Key real estate market if you are thinking about putting up one in there. Just keep in mind that there are a lot of local residents and tourists that go there frequently. That automatically translates to “good opportunities to earn” for people who have entrepreneurial eyes.

http://www.siestakeyrealestate.com – Siesta Key Real Estate

Nude real estate is something that few people know even exists. But the nude real estate market is far more advanced than many would think. There are places in the world that focus on nude real estate and nude life to the point that the clothing optional lifestyle is a given and not something that draws more attention than any other lifestyle.

Working in the Nude

With the huge rise of work from home jobs, the nude communities across the United States are seeing growth in exponential numbers. The workers hired from home do not have to curtail their dress to the business market. On the contrary, they can work from the comfort of their bedrooms in no clothes at all. Brings a new light to outsourcing, huh?

Even though nudists have the greatest opportunity for working in the nude from home, there are places that allow workers to practice their clothing optional lifestyle. Many of these businesses are located within nudist resort communities or nude real estate communities.

Living in the Nude

While living in a fine piece of nude real estate may seem like a pleasure for many people, the lifestyle does lend some people to feel as though they may be choosing a life that alienates them from the rest of the world. For this reason, many pieces of nude real estate are actually located within close proximity to a nudist resort. This way, those who wish to live the nude lifestyle can maintain a more accepted lifestyle on a daily basis and still take part in the nudist lifestyle on weekends and holidays.

The future may hold a huge island of people who truly believe clothing is a taboo. But, until this part of the world is born, the nudist in search of nude real estate will need to look for a community close enough to a nudist resort to give them the option of spending their free time in the nude while saving a few dollars on the high cost of nudist living.

The choice may seem outrageous, but living in a nude real estate community is a choice many people are searching for. In Tampa alone, the Paradise Lakes community and the Cabanas Resort are two of the openly nude real estate options available for living less bound by the clothing necessary lifestyle.

Of all of the legal agreements that you will have to go over in your lifetime, a real estate development agreement is one of the longest and one of the most complicated. Many of the other forms we’ve looked at here are short; usually one or two pages and they can be filled out and read over in only a few minutes. With a real estate development agreement, you will likely need hours to wade through one of these dense, 10-50 page documents. Let’s take a look at what a real estate development agreement is and why they are so lengthy.

A real estate development agreement is just that, an agreement to develop a parcel of land for personal or commercial use. The agreement can be between an individual and a construction company, a commercial builder and a city or town, a city and town and a retail business or other combinations of the above. Some real estate development agreements between large companies like Wal-Mart and a city or between a company that will be dealing with hazardous chemicals, like a gas station and a city, can be extremely long as they need to cover any eventuality that could arise during building or later on if there is an accident.

The typical real estate development agreement starts off with simple definitions of who is involved with the agreement, the date and where the piece of property that is scheduled for development is. The agreement will also spell out the municipality that is in charge of overseeing the development. The next part of the contract is often the “Witnessed” section that lists all of the necessary steps the builder has had to complete up to this point to have the development agreement approved by the city. The city will make sure that the area you’ve chosen to build on is properly zoned for the type of building you intend to do and they will also check that you’ve submitted a development plan, which is different than this agreement, to the city in advance of this form. Once those steps are met, the meat of the contract is spelled out.

The first section is the definitions that simply spell out what each term used in the contract refers to. For example, the city or builder will likely define what “total cost” means so it can be used throughout the contract. If it is a simple home building contract, there will only be two or three definitions, if the contract is for commercial property, there could be dozens.

Next, the development plan sketches out the project. This section is often short and simply lays down the ground rules of the build, such as the time frame, property limits and so on. The improvements section can be quite long as it outlines all of the improvements this development will do with the city like improving sewer lines that it hooks up to.

The final sections of the contract go over deadlines for building and things like landscaping rules, parking rules and what rules are in place for further building on that parcel of land. Overall, a real estate development agreement is often as complicated as your plan is: simple for homes, complicated for commercial properties.

Last night, as our dog Bram was drooling over Dave eating crackers and cheese, my Mom said:

If we all could focus on making money like dogs focus on food we would all be millionaires by the time we turned five.

Ok, five years old is a stretch but my Mom is definitely onto something. When you make something your focus, even just for an hour, how much do you accomplish? In this day and age of blackberries and iPhones, very few people focus on any one thing for long. So, think of the power of actually giving your biggest goal one hour of 100% attention every day. What if you focused an hour a day on building real estate wealth?

This means that you would spend one complete hour every single day with the sole goal of building your real estate wealth. What would you do with that hour if you are just starting out? Here are some ideas:

• Before you do anything – figure out what your goals are! How can you focus your way to real estate wealth if you haven’t defined what that wealth is, or how you want to achieve it?
• Read a book about real estate investing. There are some great books out there that will help you learn the basics. If you are Canadian, I highly recommend you read Making Money in Real Estate by Douglas Grey.
• Research property values in your target area (and if you don’t have a target area, then you should be researching potential areas looking for places where there is going to be some positive changes to the economy or the housing market).
• Research real estate agents and property managers for your target area, and start making calls to find people that you would be comfortable working with.
• Speak to a mortgage broker to get a handle on your financial situation, and what you can qualify for in an investment.
• Visit open houses in your target area.
• Start researching rental rates in your target area by reading newspapers, checking craigslist and other rental websites.

I am sure you can think of so many more things to do to move yourself towards your goal! With an hour a day, you will be surprised and impressed with how far you’ve come after just one month. But how to find that hour a day?Here are some of my favourite blog posts along the lines of this subject. Search for them in google and read them for inspiration and motivation!

• Tim Ferriss – one of my favourite blogs – specifically read 4 Hour Work Week Blog: 9 Habits to Stop Now: Once you read this I am pretty sure you will find several ways to get an hour out of your day. For me, it’s checking my email MUCH less!
• Rock Your Day – Lots of posts on getting up really early to rock your day. Always great content in this blog. Read: Rock Your Day: Catch Yourself Making Excuses and then do Something About it.
• Early to Rise – Daily newsletter which I have been reading for over four years now. Early to Rise is FULL of great ideas for making money, being healthy and maximizing your potential in whatever you want to do. Read: Early to Rise: 3 Steps to Success. Anyway – it’s now time for me to focus my way to Real Estate Wealth. Or, is it time to take Bram for a walk? I think Bram is telling me it is walk time… well I will focus after I walk the dog…