Meet “The Market Owl”

I’d like to introduce you to Richard Preshern and his financial blog, Market Owl –  The heart of real estate is finance so its important to understand what’s going on in the world of banking and currency, especially in the age of ongoing world financial crisis. In particular, the “race to the bottom” with regards to world inflationary monetary policies.  Real estate, whether leveraged or unleveraged,  can offer some great protection against inflation but what I really want you to understand is why.  Richard is providing valuable information and analysis on both the reasons and the magnitude of the ongoing inflations.  His blog will help you understand and digest world events so you can hopefully make better financial decisions.

For anyone who may discount how important it is to understand the “how’s” and “why’s” of inflation, I’ll introduce you to this quote by the French philosopher Voltaire:

Paper money will always return to its intrinsic valuenothing.”

This single statement sums up the history of paper money throughout the ages. It always happens and history proves it. So, its not a question of “if” but a question of “when” and “how fast.”  Unfortunately, we’re living in a time of accelerating devaluations of money.

I’ve been following Richard’s blog for the past several months and he’s doing an incredible job not only posting great information and insightful interviews but also explaining events and dynamics to help his readership better understand what is happening in financial markets. And, he is doing it in a way that makes sense to people who are not in the financial industry.

Richard is married to one of my cousin’s so I know him personally. He is a currency trader in Chicago so his finger is as close to the pulse of world financial markets as it can get.  He is originally from Austria and is a native German speaker.  As a European living in America, his background gives him both perspective on world events, particularly in Europe, and the ability to listen and read to German news and publications natively. For anyone who has lived overseas, you know that news and events can be reported and interpreted quite differently depending on the lens through which they are seen, which includes both political and cultural biases. This attribute alone makes Richard’s analysis far more valuable than most.

I want to encourage you to subscribe to his blog, it will be well worth your time. Don’t be afraid to interact and ask questions, Richard is great at answering them. I can’t emphasize enough how valuable a resource he and is blog are. His most recent posting on Gold is particularly good.

Posted in Benefits to Your Clients, FHA 203k Loans, Real Estate Investing, Real Estate Sales Tips and Strategies, Risk Management, Uncategorized | Leave a comment

FHA 203k to VA Buying Strategy

I work with a lot of veterans and they all want to use their VA loan benefits.  I don’t blame them, its almost the best deal going (USDA RD loans are actually better [cheaper] because there is no funding fee).  But, I always want to help my fellow veterans take advantage of all the benefits of a 203k and create the best possible home for themselves and their families. One strategy I started using with my veterans is to use an FHA 203k loan to buy and create a beautiful home and then refi into a VA loan after six months to get rid of the mortgage insurance.  This strategy helps veterans get the best of both worlds.  Its always a good idea to crunch the numbers but I’m finding it to be a very good strategy since getting rid of the mortgage insurance more than makes up for the VA funding fee. If the veteran  has any disability and the funding fee is waived, its an even easier deal. Like any 203k transaction, the more distressed the home, the better the opportunity to use this strategy. The only downside is that if the veteran wants his or her down payment cash back, they will have to wait at least 12 months to do a cash out VA refi.

Posted in Benefits to Your Clients, Creative Financing, FHA 203k Loans, Real Estate Marketing, Real Estate Sales Tips and Strategies, The Market Multiplier System, Uncategorized, VA Loans | Tagged , , , , , , , , , , , , , , , , , | Leave a comment

The Psychology of Lead Conversion

In the Market Multiplier System, I teach a series of dialogues that help improve your business, many of which are centered on the FHA 203k. One of those dialogues is a lead conversion dialogue that begins with “Have you ever heard of an FHA 203k loan?” The answer is always “no” which gives you the opportunity to say “Its how I help my clients get the best possible home for the least amount of money. Is the something you would like to know more about?”  There is more dialogue but I wanted to give you the basic structure before showing you this email I received from a client.

I use the MMS dialogue on every single lead I generate and it works.  In the book I tell you about how leads respond but I received an email this week from a new lead and wanted to share it with you as living, authentic proof that what I’m teaching works the way I say it does.  This particular gentleman responded with an email almost exactly the way I explain it in the Market Mutiplier Book and I just couldn’t pass up the opportunity to share it with you.

“I have read over the FHA 203k loan. How come we do not hear about these types of programs from other agents? What I will do is look for a residental home instead. Will give you more information on what I am looking for.”

That response was textbook and a new client was born.

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The Daytime Carrier Landing

In my book, the Market Multiplier System, I talk about how important and powerful systems are for achieving the results you want. To explain just how powerful systems can be, I describe the system we use in the Navy to land all the jets on the aircraft carrier during each flight cycle – all without the pilots talking to one another.  I put together a short video to show what I describe in the book.



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Getting Married? Turn Your Registry Into A Down Payment!

Registering for a house might be a lofty aspiration for a wedding gift. However, being able to help newlyweds make the down payment on a dream home might be something your guests would really want to do. The Bridal Registry Account (FHA) is a gem that few are aware of and is a powerful program offered to aid newlyweds in the purchase of a home.

The intent of this program is to give couples planning to get married the opportunity to collect monetary gifts from friends and family for the specific purpose of making the down payment on a home. This program has been in place since 1996.

The idea is simple – You use an FHA loan in conjunction with your Bridal Registry Account. The down payment needed is still only  3.5% of the purchase price, or 3.5%  of the purchase price and renovation costs combined if using an FHA 203k loan. Putting together this 3.5% down payment is what the Bridal Registry Account is for.

Funds may be deposited by friends and relatives directly into the Bridal Registry Account or given by cash or check to the couples or individuals for deposit. This account will take the guesswork out of gift selection. These gifts can be given with the assurance that the donors are providing the couples or individuals with an opportunity to purchase their dream home.

Bridal couples or individuals are not obligated to use the money in the Bridal Registry Account for a down payment on a home. The couples or individuals control how the funds will be used, and if their plans change, they can simply withdraw the money and use it for something else.

Its a win/win for everyone! Your guests and loved ones get to help you buy a home without going through the difficulty of trying to find the perfect gift. What could be better than helping someone you care about buy a home? And, if the happy newlyweds use this to take advantage of the 203k program – they could really hit it out of the park and make their first home purchase together one the best personal and financial decisions they ever make.

I just learned about this loan from a business partner of mine today.  His info is below and he can lend in all 50 states.  Feel free to contact him if you have any questions about how to take advantage of this great program.

Scott Livingston
Professional Mortgage and Credit Consultant
“Many Years of Experience”
O-(540) 548-1591
C-(540) 809-4828

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The Real Estate Sales Funnel

Every sales process has a sales funnel. Whether you know what your sales funnel is or not, its still there and it needs to be managed. I apply the Market Multiplier System and the 203k to manage and influence my sales pipeline at nearly every step. The 203k is perfect for this because the 203k does what no other loan can do – it helps you deliver exactly what you client is looking for.  Here is a great video of a marketing company CEO explaining the difference between lead generation, which he calls demand generation, and lead management.

I cover the real estate sales funnel in my book and will be posting more information and free downloads about integrating the FHA 203k loan into your marketing.

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Loan For Earthquake Damage and Other Natural Disasters

I live about 30 miles away from the epicenter of the east coast earthquake we had this year. The epicenter was in Mineral, VA which is a relatively small town just north of Richmond, VA. Substantial damage was caused to homes by the earthquake but the Governor’s appeal for Federal Aid was denied so many homeowners are left with damaged homes and no way to fix them. Well, the FHA 203k loan can be used for exactly that purpose. The FHA 203k loan can not only be used to purchase a home but a homeowner can also refinance into an FHA 203k loan to make improvements, renovate, finish basements, add additions and yes, even make earthquake or other natural disaster repairs.

More recently, Hurricane Sandy has damaged or wiped out thousands of homes on the east coast. That market needs tools to help it recover and the FHA 203k is the perfect tool. In the extreme cases, a home buyer can use this loan to buy a home and rebuild even when only part of the original foundation is left!

The loan requirements are the same when refinancing into an FHA 203k and since the FHA 203k guidelines allows the homeowner to borrow up to 110% of the after repair appraisal value, the FHA 203k loan is perfect for repairing damage caused by natural disasters because even homeowner’s with little or no equity can take advantage of it.

Once again, the FHA 203k loan proves itself to be the magic wand of real estate, capable of making all sorts of problems go away.

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The Looming Housing Shortage

 I first heard the predictions for a housing shortage back in 2007 – in the heart of massive foreclosures and oversupply of housing.  The prediction back then was for the shortage to start in 5 years.  Well, it has started in my area – metro Washinton D.C.  I teach a class about the FHA 203k home renovation loan to Realtors throughout Northern Virginia and they all say the same thing – “inventory is down,” “we need more homes on the market.”
the link below is a report from George Mason University’s School of Public Policy Center for Regional Analysis titled “Housing the Region’s Future Workforce.” Feel free to read the whole report if you’re into report reading but if you just want the high points – all you need is the summary on the first 3 pages.  If you just want the final conclusion…  we’re facing a large housing shortage.
What does this mean for real estate?  Supply and demand rules the market so as demand speeds past supply, housing prices will go up.  They have already bounced back quite a bit in the last 18 months in the DC area as inventory as been reduced and that trend isn’t slowing.
I know many parts of the country are still hurting and hurting bad.  All real estate is local.  We even have areas within 90 minutes of my market in DC metro that haven’t had a home sold in 6 months! But, those markets will turn around too and when they do, you’ll need to know how to do a 203k renovation so you can get distressed homes sold.
My solution to the oversupply of distressed homes and now the current and future housing shortage is the same – The FHA 203k Home Renovation Loan.  Folks, if you don’t know how to buy a home this way, you are literally missing out on half the market.  It was the perfect tool to move inventory during a down market and it will be the perfect tool to help clients buy homes at affordable prices as the market changes again – which it will inevitably do in every market across the country.
Link to the full report:

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Gen Y and Face to Face

I read a great article this week in one of the Realtor trade magazines and it talked about how Gen Y was so native to technology that many of them never really developed the interpersonal skills most of us use everyday and take for granted.  Real Estate always has been and always will be a face to face business.  Many of our leads and clients will come from using technology but whether or not someone does business with us still comes down to whether they like us or not and whether they think we have the skills to help them.

So how does this relate to the Market Multiplier System?  Well, many of my clients are a generation younger than I am so they are using technology to the maximum extent possible.  The dialogues we use in the MMS are designed to differentiate us from the other real estate agents that our prospects are assuredly “talking” with.  Short, precise and specific phrases that translate unambiguously in burst technology venues like Twitter and texting.  For example, writing “has anyone told you about the 203k loan?” gets me a response nearly every single time.  ”Its the way I get my clients the best possible home for the least amount of money.  Would you like to know more?” is another winner that makes every prospect want to hear what I have to say.  Why?  Because it establishes a quantifiable benefit to working with me instead of another agent who says what every other agent says.  You have to say/text/email something different to stand out.  And, that something different needs to convey a benefit to the client that they can understand now, not six weeks into working with you.

Take your time and be patient but you want to try to get a face to face meeting sooner rather than later, even if its just to look at a few homes to get the prospects feet wet.  It will give you some time to break down the barriers and start to build your relationship.  I find my Gen Y clients much easier to communicate with and much more open to phone calls after our initial face to face meeting.

After that, its up to you to keep the personal touches going with your clients, even after the closing – rest assured, the other agents are doing it, especially if they are Gen Y and new to the business.  You’ll easily stand out in the crowd by keeping basic personal touches a part of your business.

Consider this, Michael Eisener, who took Disney from $1.5 Billion in revenue to $30.8 Billion in revenue from 1984 to 2004 wrote personal, hand written notes to 20 Disney customers every week.  It works.  Its easy.  And it will make you stand out.

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Another Beautiful Renovation is Complete!

The renovation is complete!  This house was turned into a beautiful home in just 30 days!  I can’t think of a single home buyer who after seeing these pictures would say “no thank you, I think I’ll just buy an average home and take whatever the seller is selling.”  You can deliver this level of quality for all of your clients when you use the Market Multiplier System and the FHA 203k loan.  It’s easy, its fun and it will propel you to a level well above your peers.  There is simply just not better way to buy – or sell – homes.  And that goes for this or any market.

Posted in Benefits to Your Clients, FHA 203k Loans, Real Estate Sales Tips and Strategies, Renovation Project Pictures, The Market Multiplier System | Tagged , , , , , , , , , , , , , , , | Leave a comment