Realtor Coaching & Training: Guard
Congrats to Harris Real Estate University Student John Brady for his exclusive interview in the New York Times.
You are about to read about how the ultra exclusive real estate markets are now being dramatically effected by the real estate crash/ housing depression. HREU Student John Brady has been warning his Hampton’s housing market for over 2 years that the tides were turning. 12 months ago John was prosecuted in his market for being overly pessimistic. The local real estate brokerages seemed to rally against him.
Now, John is being interviewed by The New York Times and other leading global news outlets because of his knowledge obtained at Harris Real Estate University. Even in this market there are opportunities. As a Realtor, you have to be willing to make the shift…like John did…and embrace what this market has to offer. There never has been and probably never will be another time when caring, competent and SKILLED agents have been so needed.
Remember this, Realtors….SKILLED Realtors are the only true hope for homeowners. Realtors are on the front lines of this housing war (to paraphrase Warren Buffet). We are the ones sitting across from troubled homeowners every day. Realtors must know how to do more than the traditional listing and selling of real estate. Your community needs you to embrace the shift, learn what is required and then get into action and make a difference.
This is a long article…but, worth reading…
ON OSBORNE AVENUE in the village of Southampton, a cozy cedar-sided house peeks out over a modest hedgerow, a coy signifier of means in this storied summer retreat of New York’s moneyed classes. A blue real estate broker’s sign is planted at the foot of the driveway: the house is up for sale for the fourth time in eight years. Its churning transaction history tells the tale of a dizzying decade. In 2001, it sold for $460,000; two years later, it went for $850,000; and in 2006, after a substantial renovation, it turned over again, fetching $1.65 million. The current owners of the house, a young Manhattan couple, moved on to bigger things after a couple of summers, purchasing a $4 million home south of the Montauk Highway, about a mile closer to the shore. They put the house on Osborne Avenue up for sale again, asking nearly $2.2 million — almost five times the property’s market value at the beginning of the decade.
The Osborne Avenue house hit the real estate market at the end of the summer of 2007, a season that can be said, with the benefit of retrospect, to have marked the sweaty height of a speculative fever. That was the summer that the average cost of a home in the Hamptons shattered the $2 million barrier, the one when Ron Baron, a mutual-fund manager, paid a record $103 million for a 40-acre oceanfront estate. At the time, there were already alarming signs of a downturn in the national housing market, as a crisis took shape in the subprime-mortgage sector and economists predicted a coming onslaught of foreclosures. But that didn’t cause much worry in the Hamptons. The bubble might be bursting off in Sun Belt subdivisions, but not in the playground of the Wall Street elite. Prices were propelled upward by a tautological justification: if you were rich enough to buy in the Hamptons, you were, by definition, a superior judge of the market.
Then came the dreary series of events that we can summarize, as Hamptons people do, by reciting a litany of names: Bear Stearns; Fannie and Freddie; Lehman; Madoff. Since the peak, as one horrific episode after another has unfolded, the area’s real estate market has mirrored Wall Street’s plunging fortunes. Average sale prices have declined by about 10 percent, but that only hints at the seriousness of the trouble, because hardly anything is moving. According to data collected by the Suffolk Research Service, a local real estate data company, the number of sales in 2008 fell by 25 percent in East Hampton, 39 percent in Bridgehampton, 45 percent in Southampton and 47 percent in Montauk. Things really collapsed during the fall. Investment bankers lost their jobs, corporate lawyers saw their client base vaporize and hedge-fund managers went from being hailed as geniuses to being hauled in front of Congressional committees. “Until the market improves or their mental state improves, they’re not buying anything,” says Herb Phillips, a veteran real estate agent who is also chairman of the Southampton town zoning board. “It’s dead.”
Winter is always a low time in the Hamptons: the restaurants are empty, the streets are free of cars and a cold wind whips in off the Atlantic. On a chilly Saturday in December, I visited the house on Osborne Avenue, which by that time had been on the market for more than a year. An open house was scheduled for noon, but when I got there shortly before 1 p.m., I found the place locked, its windows dark. After a moment, the sellers’ broker, Maryanne Robinson of Prudential Douglas Elliman, spotted me and popped out of a car idling nearby. She opened the house’s front door, pushing aside a stack of mail that had accumulated on the entryway floor, and showed me around. The décor was nautical, with mermaid posters hanging on the walls and a chandelier of cascading seashells.
“This is sort of like a Hamptons starter home,” Robinson said — just three bedrooms with an additional guest cottage out back. She told me that the owners had reduced their price considerably, to $1.85 million, but felt no urgency. In the Hamptons, she said, “we tend to see people that don’t really need to sell.”
Nonetheless, by the next week, the price of the Osborne Avenue house would be slashed another $50,000 — dropping it close to the owners’ probable break-even point once you figure in taxes, closing costs and accrued mortgage interest. (In a one-sentence e-mail message, the Manhattan couple declined to comment and requested that they not be named in this article.) In January, a plaintive note appeared on the page listing the home on the Elliman Web site: “Owner wants an offer at least $1,700,000 by Feb. 15.” That didn’t happen, so the price was cut again.
Reducing expectations — and even contemplating losses — has become routine for sellers. At the end of last summer, Joseph Gregory, the former president of Lehman Brothers, put his Bridgehampton mansion up for sale for $32.5 million; finding no takers, he is reportedly considering renting it out. Even John Paulson, the hedge-fund manager who made billions by betting against the housing bubble, seems to have timed his Hamptons moves poorly. Last year, after buying himself a new $41.3 million estate, he put his old place in Southampton — advertised as a 6,800-square-foot “cottage” — on the market for $19.5 million. He has since cut more than $5 million from his asking price.
A little later on the same day I visited Osborne Avenue, I went to another open house in the exclusive East Hampton neighborhood of Georgica. A five-bedroom home was selling for a little over $5 million. “Two years ago it was worth 6.5,” the owner, a chatty middle-aged woman, said as she took me through rooms filled with antiques and gilt-framed oil paintings of angels and cherubs. “But two years ago I wasn’t ready to leave my husband.” In fact, the house has been in and out of the foreclosure process — no longer an unknown phenomenon in the Hamptons. The situation hasn’t become as dire for the vast majority of sellers, but brokers say they have seen a distinct rise in the number that they delicately describe as “motivated.” When the rich run into financial trouble, the vacation home is often the first thing they try to unload.
With supply swelling and demand shriveling, those likely to take the hardest hit, industry players say, are the speculative developers who initiated projects at the peak of the boom. A final stop on my home tour took me to Captain’s Neck Lane, a street in Southampton that has been the address in recent summers of many hedge-fund managers, socialites and celebrities. The shingled mansion, hidden behind a wall of 25-foot cypress trees, was priced at $6.5 million after a series of reductions. “Everything in the Hamptons has all the new angles, and this house is full of them,” said Mary Denny, a sales associate then with Corcoran Group Real Estate. We walked up and down two staircases, through bare spacious rooms floored with walnut and a kitchen ablaze with white calacatta marble. Denny pointed out the five fireplaces, the 850-bottle wine cellar, the heated pool and Jacuzzi. “Everything in this house,” she said, “is so high quality, well done and priced to sell.”
BAD TIMING Catherine Lignelli’s first project, in Southampton,went on the market just as the economy began its downward spiral.
LATER ON, looking for another assessment, I called James McLauchlen, who runs a small realty firm a few blocks from the mansion on Captain’s Neck Lane. He told me he thought the house was attractive but wondered whether its hypothetical buyer had vanished like so much paper wealth. “The people who are playing in that league — their numbers have been dramatically reduced,” McLauchlen said. His family has been in Southampton real estate for three generations, and he watched with amazement over the course of the decade as home values increased at a rate of about 20 percent a year. “Everyone was kind of euphoric and happy-happy,” he said. “Some of the old-timers in the business were scratching their heads, thinking, What is going on?”
In years like 2006 and 2007, when Wall Street firms gave out record bonuses, the Hamptons were full of new millionaires. In time-honored fashion, the old guard groused about arrivistes who were filling their quaint villages with pumped-up new mansions. The place on Captain’s Neck Lane — 8,000 square feet configured onto a lot that’s seven-tenths of an acre — was emblematic of the trend. Now, as it sat empty, it looked like the vestige of another season.
Catherine Lignelli, a first-time developer, built the mansion, and if she misjudged the market it wasn’t because she misunderstood the newcomers’ appetites. She was from their world. Her husband, Jeff Lignelli, manages a hedge fund, and their primary residence is a 22nd-floor apartment on Central Park South. In January, she met me at the headquarters of Stonebrook Fund Management, her husband’s company, to talk about her entry into Hamptons real estate. Tall and blond, wearing a stylish tweed blazer, knee-high leather boots and a white cashmere scarf, Lignelli showed me into an office that overlooked Park Avenue. She told me that she had gotten into real estate because it was a career that she could pursue while raising her daughter, Alexa, who is not yet 2.
“My focus was quality and aesthetics for family and friends, and seamless entertaining,” she said. “Without sounding feminist, I think that as a mother, as a wife, I can lend a lot to the details of what it takes for effortless, organized living.”
Lignelli has a degree in fashion design. In previous jobs, she worked as a personal assistant to the jewelry designer David Yurman and the financier Steven Schonfeld, which sometimes required her to make excursions to the Hamptons, but it was only after she met her husband that she really got to know the place. Jeff Lignelli owned a summer home in Water Mill; he proposed to her in the Hamptons in May 2005. Catherine decided that she wanted to start working for herself. “Next to clothing, I think real estate is fascinating — to watch that concept on your napkin sketch become someone’s actual home,” she said. “Jeff was very excited about it. He loves the Hamptons so much.”
Jeff Lignelli, who manages a number of equity-oriented funds, averaged returns of better than 15 percent between 2003 and 2005, and like all hedge-fund managers, he charged high fees. Flush with cash, he and his fiancée drove around and prospected for development sites. Over the course of two months in late 2005 and early 2006, the Lignellis paid $1.9 million for a small ranch house on Captain’s Neck Lane, which was to make way for Catherine’s first project; $2.3 million for a modern five-bedroom in Water Mill, which they’re renting out for now; and $14.2 million for a beachfront mansion on Dune Road in Bridgehampton, which they use themselves.
The Lignellis’ wedding was held in July 2006. Invitations, engraved into shiny metal paperweights shaped liked beach pebbles, instructed guests to join them by the ocean in front of their Bridgehampton place, at sunset, in all-white attire. Meanwhile, construction had started on Captain’s Neck Lane. That summer, the real estate column in the magazine Hamptons Cottages and Gardens described activity along the street, lined with palatial structures for the eight-figure buyer, as “hotter than hot.” Catherine Lignelli appeared poised to reap a big profit. She threw herself into the design-and-construction process. “I’m very, very hands-on — every light, every piece of molding, every appliance,” she said. “My architect took my sketches and turned them into blueprints.”
By the time construction was completed last summer, Lignelli could see that the economy was headed for a downturn. Nonetheless, when asked if any aspect of the building project had surprised her, she replied, “I’m surprised it hasn’t sold.” What she didn’t see coming — what many did not see coming — was the degree to which the crisis in the rest of the country would affect people in her world. The boom’s beneficiaries had been flashing so much money that everyone assumed they were insulated from market swings. But it turned out that overleveraging wasn’t just a vice of subprime borrowers.
Hedge funds have been hard hit by the crash. Lignelli said people in her social circle had been “pulling the reins back.” Her own husband’s success, which created the personal wealth that underwrote her real estate investments, seems not to have been spared the general trend of reversal. (Jeff Lignelli declined to comment for this article.) Various public disclosures, including documents filed with the Securities and Exchange Commission, suggest that Stonebrook’s stock portfolio, historically concentrated in the tourism, home-building and retail sectors, has contracted significantly.
Catherine Lignelli said the fortunes of her husband’s hedge fund would have no effect on her personal enterprise, to which she expressed a deep commitment. “People think I married someone wealthy and, ‘Why not build a pretty house in the Hamptons?’ ” she said. “There is so much more to it than that. This is something that I’d like to do, probably forever.” Since finishing the house on Captain’s Neck Lane, she has lowered her price by $1.5 million but vowed that she wouldn’t budge from there, no matter how bad the market got. She said she simply couldn’t justify it, given the many millions she and her husband had spent to acquire the land and construct the house. “I feel hugely responsible for giving back something to the person that financed me,” she told me. “I would love to give my husband a smidge of a kiss of a profit.”
Lignelli has listed the property with two superstar brokers, Harald Grant of Sotheby’s International Realty and Gary DePersia of Corcoran. But if she doesn’t get that $6.5 million offer, she has a backup plan. “Come a certain point,” she said, “the decision will probably be made to go ahead and rent it.”
That might not be a bad option. Joseph Kazickas of Rosehip Partners, a real estate brokerage specializing in Hamptons rentals, said that as recently as last year, a property like the one on Captain’s Neck Lane might have fetched $300,000 for the summer. Of course, before a property can be rented, it has to be furnished — a considerable expense — and if every other thwarted seller happens to have the same idea, rental rates will be depressed by the abundance of supply. A Web site that Kazickas runs, hamptonsrentals.com, currently lists more than 500 properties available for the summer, a number he predicts will only grow as the turmoil on Wall Street continues.
If rents fall precipitously, a lot of homeowners are going to face unhappy choices. A buyer who took out a $2 million mortgage at the prevailing interest rates during the summer of 2007 would now face a monthly payment of about $13,000 — possible to swing on an investment-bank salary but not on an unemployment check. “It’s going to be very interesting to see what happens next summer,” said John Brady, a broker with Prudential Douglas Elliman. “All of these Wall Street guys who are being let off right now — the effect isn’t going to take place for months.”
Over the last year or so, Brady, an ambitious 31-year-old, has built a reputation for a previously unheard-of specialization: he represents financially distressed Hamptons homeowners. In a field in which brokers often belong to the same social class as those they cater to, or at least affect their manners, he is an anomaly.
Realtors, learn what John has learned and experience the success that John is experiencing. Start now by watching the FREE Agent Short Sale Secrets video and downloading your FREE Agent Short Sale Secrets book.
The son of a cop and a real estate agent, Brady grew up in the insular blue-collar part of the Hamptons that summer residents seldom see. When he was a teenager, his parents divorced, and his mother lost her home in Montauk to foreclosure. “I just remember we had to move, and that was it, end of story,” Brady told me. “Foreclosure, that’s how it works.”
MOST DAYS of the week, Brady drives around the Hamptons, ringing bells at homes that are in danger of foreclosure. He gets the addresses from mortgage-default notices publicly filed by lenders or from banks’ confidential lists of homeowners who are at least 30 days behind on their payments. (Lenders filed around 260 default notices, the first step in the legal process of foreclosure, against Hamptons property owners in 2008, according to PropertyShark.com, a research service. Brady says the bank list is about 1,000 names long.) To people who owe much more on their home than they’re likely to get by selling in today’s market, Brady suggests what’s known as a short sale, in which a bank accepts a sum smaller than the mortgage in lieu of a long and costly foreclosure.
One winter weekend afternoon, I accompanied Brady on his rounds. We met at the Prudential Douglas Elliman office in East Hampton, which was deathly quiet. He often speaks about his profession with contempt, calling other brokers “lazy” and worse. The way he sees it, most of them believed their own top-of-the-boom hype and can’t adjust now. “A lot of agents don’t know the truth of what’s going on,” he said. “They never do.”
Brady donned a heavy peacoat and picked up his “door-knocking kit,” which included a bag of dog treats and a can of pepper spray. (He says he’s never had to use the spray.) As we drove north, he told me that he got into real estate after a stint peddling credit cards door to door in Mexico, an experience he has found surprisingly useful.
Up near Three Mile Harbor, he pulled into a gravel driveway that led to a lodgelike modern home set on a densely wooded lot. “This looks nice,” Brady said as we looked around. “In-ground pool. Volleyball court.” When Brady knocked, no one answered. On our way back down the driveway, we noticed a sign: the house was on the market for $1.3 million. “A lot of people, they hear short selling and they assume it’s low-income, but it’s not true,” he said. “There’s people right now overfinanced in the eight digits.”
Agents, learn how to help people who MUST SELL and owe too much on their homes. Learn how to become your markets Short Sale Expert. HUGE demand for agents that have these skills. Watch the FREE Agent Short Sale Secrets video now…and grab your FREE Agent Short Sale Secrets book.
Although the rate of mortgage defaults, about 1 for every 160 households, ran slightly higher in the Hamptons than in New York City last year, according to an analysis compiled by PropertyShark, the percentage of homes that actually entered foreclosure remained considerably lower than that of other regional markets. Many local real estate professionals scoff at the notion that foreclosure could ever become a widespread phenomenon. Last May, Brady was interviewed on the Fox Business Network alongside Lori Barbaria, one of the area’s elite brokers. When Brady described knocking on the doors of imperiled homeowners, her face crinkled with a look of disgust. “I would never do that,” Barbaria told the host. She said she was “not feeling” a serious crash.
The optimists argue that the Hamptons should remain relatively untouched by the housing collapse because most buyers put up substantial equity, and some of the biggest deals were done in cash. However, even fully capitalized buyers often borrowed against their houses for tax purposes or other reasons, real estate professionals say, and those observers with a gloomier outlook suspect that many of those loans are currently in trouble, or will soon be. “It’s the kind of stuff that may not be hitting the public fan,” said James McLauchlen, who often does appraisals for banks.
Something similar happened after the 1987 stock-market crash. “I saw the dark days of ’88 through ’92,” says Dan Gualtieri, chief executive of the Hamptons Mortgage Corporation, “and it impacted a lot of people you wouldn’t have expected.” Reading the darkening forecasts, Elliman — which typically markets itself with glossy photographs of baronial estates — has recently started to advertise John Brady’s short-selling expertise in The East Hampton Star and other local newspapers.
We pulled up to another East Hampton house: an old place, cedar exterior, big front porch, right in the center of the village — a real find. A gray-haired man wearing shorts and a paint-splattered T-shirt answered the door and, after Brady’s introduction, invited us inside a comfortable home filled with books. His name was Patrick Stolmeier, and he was a builder who had hit hard times since construction work dried up. Sitting in the kitchen, he and Brady talked for an hour. Stolmeier was selling the house himself, asking $1.6 million — an open house was scheduled for the next day. Brady laid out his options. Stolmeier said he understood his predicament, but he couldn’t just give away the house. It represented his retirement.
“Eighty cents on the dollar would be great,” Stolmeier said, “if we’re talking about the 2005 price.”
There’s the crux of the problem. No one knows what anything is worth anymore. Herb Phillips, a real estate broker who has been around for almost 30 years, told me he’s using a simple formula to appraise the value of homes, taking their worth before the boom and figuring in a yearly rate of 7 percent appreciation. If you follow his logic, a home that sold for $450,000 in 2001 should be worth about $800,000 today — not a bad investment, unless you happened to pay $1.5 million for it in 2006. It’s quite possible, if Phillips is right, that a large percentage of the people who bought at the top of the market owe their banks more than their houses are worth. Until the market unfreezes, however, it’s impossible to really know any home’s value.
A couple of weeks after Brady visited him, I called Patrick Stolmeier to see how his open house had gone. “Absolutely nobody showed,” he said. Nonetheless, he remained hopeful that he would eventually sell the house and escape foreclosure — this was, after all, the Hamptons. “This still has the cachet of being the playground of the rich and famous,” he said. “It’s when the number of rich and famous dwindle that we’re suffering.”
Realtors, learn how to help the suffering homeowners in your market. Learn how to become a Short Sale Expert. What are you waiting for? Watch the FREE Agent Short Sale Secrets video and Grab your FREE Agent Short Sale Secrets book NOW.
Like most homeowners who default, Stolmeier blamed an unfortunate confluence of events for his inability to pay his mortgage. A veteran builder, he specializes in high-end construction, often incorporating ecologically sensitive technologies. He bought his house, on Cooper Lane, in 1988, for $270,000. Later, as a personal project, he started renovating a home in the Northwest Woods area of East Hampton. He refinanced his primary residence, borrowing $523,000, in part to create capital for the second project, but then he caught an unlucky break: he contracted Lyme disease. He started to have trouble paying his mortgages, despite adjustments to his payment plan. He was finally recovering from his health problems when the downturn came with a rush. He returned home from a vacation in August 2007 and discovered that three lucrative jobs had disappeared.
Before long, Stolmeier was unable to make the monthly payment on the mortgage for his Cooper Lane house. He and his mortgage servicer, Ocwen Financial Corporation, entered a long struggle over loan modifications. His life became consumed by a maddening series of phone calls invariably answered at an Ocwen call center in India. After many months of conflicting answers, Stolmeier thought he was close to a new loan modification in November. Then a process server surprised him on his driveway and served him with foreclosure papers filed on behalf of the holders of the mortgage-backed security into which his loan had been bundled. Paul Koches, Ocwen’s general counsel, said that the servicer had been patient but ultimately had to act in the interest of the bondholders. The legal action is delayed for now, but because the Cooper Lane house would be worth a sizable amount on the open market — probably a great deal more than Stolmeier owes — it makes more financial sense for the lender to foreclose than to accept an unfavorable change in payment terms. “It’s a delicate balance,” Koches said, “and not always an easy one to strike.”
Meanwhile, Stolmeier has been having similar problems with his uncompleted Northwest Woods house, where he was hoping to live when he retired. “Both of these houses represent a great percentage of the product of my adult life, and I can’t turn my back on that,” said Stolmeier, who is 60. “It took an awful lot of work for a blue-collar guy to buy these properties.”
John Brady said he thought that, in the end, Stolmeier would probably be able to settle his problems by selling the Cooper Lane house. “Really, all he needs to do is drop the price,” the broker said, “and he gets out.” Of course, this returns us to the case of the missing buyer — no matter how reasonable the price, if no one is making offers, you can’t sell.
Many Hamptons brokers talk optimistically about 2009, predicting a wave of bargain hunters. “Within the last month I’ve been approached by two hedge-fund guys — they asked me to keep on the lookout for advantageous buys,” said Gary DePersia, one broker who is trying to sell Catherine Lignelli’s mansion. If the buyers don’t return soon, however, the implications for the Hamptons market are sobering.
One blustery December morning, I went to the Southampton Town Hall to see what the future might hold if the doomsayers are to be believed. A home with a $1.5 million mortgage, and recently foreclosed, was going up for auction. As I waited for the proceeding to begin, I met the wife of the home’s owner, a real estate broker, who looked on sadly as a referee, Charles D’Onofrio III, read out the terms of the sale and asked, “Are there any bids?” The only other person on the steps, a representative of the bank, offered the token sum of $500.
“Sold,” the referee barked.
Later that morning, I went to see the foreclosed property. It was a classic Hamptons spec house, all shingles and bay windows, and it looked as if it had never been finished. The wind gusted through tall pines as I walked around the lot, which was littered with construction debris. The home was empty inside, except for a couple of chairs. Off the back deck, a swimming pool sat murky and neglected. Summer seemed a long way away.
While you are thinking about it….Watch the FREE Agent Short Sale Secrets video NOW and then Download your FREE Short Sale Book!
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Most major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOCs) – and I don’t want you to be caught off guard by this development. If you were planning on using your HELOC for spring home improvements or college tuition chances are the money has been–or will be–shut off.
You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value. Many of our students who do BPOs are reporting to us a dramatic increase in BPO requests from lenders for this reason.
From Countrywide..sent to borrowers before Countrywide Froze Helocs:
‘Important message about your loan: At Countrywide Home Loans we are committed to helping customers sustain homeownership. As part of the commitment, and in keeping with its sound risk-management and responsible lending practices, Countrywide Home Loan is reviewing and analyzing home equity lines of credit in its servicing portfolio.
As you know, home values in many areas of the country have declined. We believe that the decline in the value of your property, from its original appraised value at the time your loan was made is significant. In accordance with the terms of your Home Equity Credit Line Agreement and Disclosure Statement (Agreement), we have elected to suspend further draws against your account as of the Effective Date above.’
On Friday, the Los Angeles Times reported that Countrywide notified many homeowners they’ve lost their right to borrow against their credit lines:
‘ Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They’ve been told by their lender that they can no longer take money out on their credit lines because sinking home prices have left them with little or no equity.
Among the lenders taking such action is Countrywide Financial Corp., which sent 122,000 letters to customers last week telling them they could no longer borrow against their credit lines. In some cases, according to the company, the borrowers are now “upside down” — the total debt on the home exceeds the market value of the property.
Calabasas-based Countrywide, the nation’s largest mortgage lender, says it uses computer modeling that factors in changes in home prices to determine which customers will have their money tap shut off. ’
Will we see a Chase HELOC freeze, or a Bank of America HELOC Freeze? What will that do to the economy?
If there was any question that consumers were feeling the pinch before…just wait until they are told that their homes are worth LESS than what they owe. Or in the word of Coutrywide…’Significantly Less” Think that will have an effect on the economy..think this will make consumers feel more confident about housing?
Free Instant Free Download of Tim and Julie Harris’s 7 Part Agent Short Sale Secrets Crash Course www.AgentShortSaleSecrets.com. Instant Free Download.
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This was sent to me to post on our blog by Tim Rhode. Tim is a HREU
Superstar and if you would like to download his recent audio
interview click here;
http://www.harrisrealestateuniversity.com/interview_login.php
7 Cures For A Lean Purse
The secret is over 6,000 years old. It can be found in the seven
simple lessons contained in the pages of the book, “The Richest Man In
Babylon”, by George S. Clason.
This book is a classic and a must read for anyone who is committed to
attaining financial security. My copy of this book looks very tired.
I have personally read it at least 10 times and it has survived my
lending it to countless
friends and co-workers. The very easy-to-follow “Seven Cures for a
Lean Purse” are as relevant today as they were over 6,000 years ago
when Babylon was the financial center of the world. There, numerous
“common men” arose to financial greatness by learning and practicing
these laws. Read these “cures” and see how they relate to you and
your finances. Learn what you can do to provide future financial
security for yourself and your family.
Seven Cures for a Lean Purse
1. Start thy purse to fattening.
2. Control thy expenditures.
3. Make thy gold multiply.
4. Guard thy treasures from loss.
5. Make of thy dwelling a profitable investment.
6. Insure a future income.
7. Increase thy ability to earn.
1. Start Thy Purse to Fattening
This rule says you must pay yourself first, which means you must
arrange your budget to where your expenses don’t exceed 90% of your
income. The remaining 10% is yours to keep. This extra is to be used
for investments only, not to be dipped into for any reason. If you
are deeply in debt take half of the 10% and pay down debt and use the
other half towards investments.
2. Control Thy Expenditures
How is it that someone who makes $200,000 per year is often no
better off financially than when they earned $45,000 per year? It’s
because they spend $199,512 of it throughout the year, leaving little
or nothing towards their future. You must sit down and devise a
budget. List all of your living expenses, study them thoroughly, keep
what is necessary and cut out all non-necessary expenses which rob you
of the extra 10% you’ll need as seed money to provide for your
magnificent future.
3. Make Thy Gold Multiply
This piece of the puzzle is absolutely necessary in order to
gain future financial security. You must make every dollar you save a
soldier that works to compound itself over and over. This will
provide a future income from your investments that you can live off of
should you choose not to work.
4. Guard Thy Treasures From Loss
Your investments must be such that you don’t risk your valuable
principal (stock market from the years 2000-2002, ouch!). Therefore
you must start small, seek knowledge of investing from wise people,
and invest in what you know best (hey, how about real estate and
notes) before moving on to bigger investments.
5. Make of Thy Dwelling a Profitable Investment
There is a great sense of pride in owning your own home, eating
fruit of you own tree, and working in your garden. Make sure it’s a
good investment and not so lavish that you can’t live within the 90%
necessary to make this plan work.
6. Insure a Future Income
There is one certainty we can all (hopefully) count on, and that
is we are all aging. Therefore, it behooves us to set up this plan
early in life and stick to it while we are in our peak earning years.
That way we can provide for our future needs with the income we make
today. Even if you are not young, it is never too late to start on
this plan.
7. Increase Thy Ability to Earn
The ability to earn is the rocket fuel for this plan. You must
show more interest in your work, improve concentration on your tasks,
and have greater persistence in your efforts. Thus the seventh, and
final, cure for a lean purse is to cultivate your own powers, to study
and become wiser, and to constantly be working on your skills. In
doing these acts you’ll acquire confidence in yourself and you
abilities to achieve, which will naturally lead to more income,
helping to fund your magnificent future.
These are not easy times to accumulate wealth. However, no time ever
was. Today, as it was 6,000 years ago, it takes discipline to commit
long term to a plan like this. In commissioned sales with our
inconsistent earnings, it can be even harder. In my 17 years in the
real estate business, I’ve worked directly with approximately 1,000
agents in my market area of 75,000 people. Of those 1,000, I’ve seen
fewer than 30 who’ve committed to this type of plan and are either
well on their way, working only because they choose to, or are retired
and doing the things they’ve always dreamed of. I can’t understand
why more Realtors don’t take advantage of our knowledge of the market
and the inner workings of the business. We have opportunities to see
good buys first. It would be wise to jump on some of the good deals
that are put right in front of us on a daily basis. What you need is
a plan to be actively seeking these good deals.
It is entirely up to you. Take the time today to ensure your
magnificent future.
Tim Rhode
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