Master of None?

I've been doing this crazy real estate thing for 20 years now [am I that old? :-) ]
and I remember being told to find my "niche". The general argument was that you pick one thing and you do it well.

Today I am questioning that philosophy.

My business started off being a loan officer for my friends' brothers' company. I was 25 and married and had a 6 year old to take care of and the flexibility was wonderful. I could take care of my high maintenance child and take very good care of my clients.

After 5 years, the brother changed his business model and eliminated my job - so, I went out on my own [I was a broker by then]. My clients followed me and referred me to all their friends and I found I could make it on my own.

Along the way, I became friends with my clients and they felt comfortable enough to come to me when they had financial or real estate questions. The next thing I knew, they were asking me to represent them on their buys and sells. Then they wanted to buy a bar or their business needed more warehouse space or they needed to buy a office building.

Our kids grew up and moved away and we were all looking for cash flow for retirement. So, we started moving our equity into investments that had a monthly return that we could count on. It's been a joint venture all along the way and it's made for a wonderful life.

So, perhaps you can say I found my "niche". I specialize in people. Good people that I take good care of. Good people that I like and that like me right back.

Yesterday I called a client and got the machine. "hey nutball how you doing?, this is Rebekah" when I heard him pick up the line and say "I knew it was you at Nutball"

Hug Your Realtor Today

I woke up this morning to a voice mail from a Realtor friend that is getting out of the business and moving away. It's almost like, there is so much invested in looking good that when things aren't good they have to move away to save their delicate self worth.

It's tough out there. Most Realtors are feeling the effects of this market. The scary part of that is I remember the Realtors that killed themselves during the dot bomb. So, reach out and touch someone.

The greatest of these is love.

New Tenants

I have a vacancy right now so I was showing a rental to perspective renters this week.

As we wandered through the house, we chatted about the house and what was going on in their lives. Turns out, they had purchased a house a couple years ago. They loved the house, put all their money into updating it and landscaping. They figured they would be there forever.

A year or so in, they were visiting friends in Tahoe and wondered if they could buy a second home. It was at this time that they pulled out their mortgage papers to figure out what they owed on their home. After reviewing the loan statements, they realized they were in a negatively amortized loan AND it would re-adjust within the next few months - raising their monthly payments to over $4000/mo.

These are very responsible parents of teenagers. They have perfect credit and have stable long term jobs. It took them a few months to reconcile their disappointment and consider their options but, they were able to put their home on the market and are currently in contract with expectations of closing by the end of May.

These people relied on their Realtor and Lender and didn't know enough about the process to know the questions to ask.

Frankly, it pissed me off. I have been to signoffs where I read and explained the loan to my clients, they weren't getting what they thought, and we extended escrow to work it out. I've also been to signings where I explained, it wasn't what they thought and they chose to close anyway. Either way it's the clients' decision but, it pisses me off that someone that is working as my agent sells me a book of goods so that they get paid.

I understand that I don't get paid unless we close but, I need to feel like I am helping my clients - first and foremost. I have been in this profession for 20 years and I have clients from 20 years ago. What I don't have is clients that are losing their homes because I didn't review their loan docs.

Before this I thought these people in crappy loans were just stupid or lazy or deserved their fate, somehow. I believe in caveat emptor and personal responsibility. I also believe in full disclosure and taking care of your clients.

Do you know someone that is in a crappy loan? How did they get there and where did the system break down?

Why The Worst May Be Over

I found this article interesting because it has some compelling arguments for economic recovery.

Also because, just like a depressed Seattle-ite in March that hasn't seen the sun for 8.67 months, I am dying for a little sunlight and cheer to break through all the grey economic overcast.

Change = Opportunity

I love times of change. I've watched my clients leverage themselves into some amazing deals.

If you make the right decisions now, you'll reap the rewards within the next 5 years. Two years ago a buyer couldn't buy anything because they were outbid on everything that looked attractive. I had clients with 30% down, excellent financials and Letters of Credit from SIVB - that couldn't buy anything!!

Today, the buyer with the cash is queen.

What are the chances that San Jose Home Prices Will Be Lower In Two Years?

About 51%, according to the PMI group report.

I found it interesting that Dallas Fort Worth had a less than 1% risk while Riverside came in at the top with a 93% probability of lower home values in two years.

Profiting From The Market Misery

I love a down market. All this uncertainty has property values dropping faster than a womanizer drops a date that says the "L" word.

The statistical figures are starting to show some significant drops - in the 20-30%ranges - and I don't see daylight yet.

I like this NNN leased investment. It's got a lease guaranteed by CVS corporate. It's 2.3M and returns a 12.58 cap rate. Unheard of only 2 years ago!

Or 48 units in Los Gatos for $12.22M, net income of $568,277 and 4.61 cap. based on actual rents. Just a year ago we were seeing 3-4 caps based on proforma rents.

So, there are a lot of investment opportunities in the market. It hasn't been this great a time to buy since 1993-1994! If I only would have kept the house I bought in 1993, in willow glen, for $172K.....