The PIN Magazine March 2016

March 2016 Vol. 03 | Issue 3

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52 Building

Message to Industry: AIRBNB Is here to Stay 16 Spotlight: Sacramento, California 20 Real Estate Focs on Manhattan: NYC, New York 24 Want to Become a Landlord?

YOU

14 Defeat of “Prop F” Sends

10 The How and Why of African American Buying Power

MORTGAGE

ECONOMICS

TECHNOLOGY

REAL ESTATE

Issue...

OUR COVER

In This

28 Michael Krein, Phd.

Personal Savings for the Dream Home

58 Technologies Helping Agents Connect with Modern-Day Consumers

54 You Can Afford the Mortgage But Not The Downpayment?

From the

Editor...

Esteemed Readers, As March rolls in and warmth returns to the air, I cannot help but be optimistic for the future. After celebrating a prosperous Black History Month I feel more connected with my community and my nation as a whole. Uniting as one nation, not just blacks and whites, will be what makes this great country grow in power and prosperity.

Neck deep in presidential primaries, change is on the way and one can only hope that the right candidate for this nation is chosen. Senator Bernie Sanders pulled out a win that no one expected in New Hampshire. Former Secretary of State Hillary Clinton found success in Iowa by .3% against Senator Bernie Sanders. As always, Donald Trump is in the lead for the Republican party. One wonders if a businessman such as Trump will have us all fired before he brings prosperity to the nation. Politics continues to heat up across the nation and we eagerly await the results. Get out and vote!

Gas prices are falling slowly but surely, so be sure to save your extra cash. Now is the best time to look to the future and get ready to fulfill your dreams, but to do that you will need to

have a steady life at home. Without some extra money in your savings account that security will be compromised.

Be sure to check out the article within this magazine about building your personal savings to enhance your life.

Feel free to peruse the various articles about increasing home values through solar panels, the latest in real estate legislature, and the economic buying power of African Americans. This is what is going on now, not in the past or the future. Live in the now and start working hard for tomorrow!

In this issue of The Power Is Now Magazine Michael Krein, Phd., is featured for his accomplishments in this nation in real estate and for his growing software, RIO Genesis. I hope that readers will take his story to heart and feel inspired to take their lives into their hands. The Power Is Now!

Eric Lawrence Frazier M.B.A Editor-in-Chief

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The How and Why of African American Buying Power

M

uch news has been made in recent years about the impact of the various United States races on the economy, especially in the years following the recession.

In the midst of this news has been the impact of the African American buying power. While racial tensions are high in the United States, comparisons are often done with regards to income disparities, disparities in treatment in justice systems, and education attainment.

In 2014, black buying power surpassed $1.1 trillion, putting African Americans in control of the second largest minority market. The largest is Hispanics, of course. Since 2000, black buying power has increased some 86 percent. It accounts for 8.7 percent of the nation’s total. However, what is leading to this increase amongst a race that is less than fifteen percent of the nation’s population and is often cited as having the lowest household income?

The African American buying power is often overlooked in many ways. Rather than to say black buying power is overlooked, it is often assumed to be on the lower end of the scale due to the socioeconomic systems ingrained in the structure of the United States. However, with regards to African Americans, it is quite the opposite. Interestingly enough, African American buying power is increasing.

The State of the African American Consumer Report, which was released in 2014, does some explaining as to why this increase in buying power for blacks is occurring. The study focuses on spending, media habits, and consumer trends of African Americans. The 2014 report found part of the reason for the increase in buying power was in part due to an increase in the amount of African American going to college. The most recent figures show that the number of degree

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earners increased to forty-four percent for black men and to fifty-three percent for black women. Furthermore, there has also been an increase in African American households earning $75,000 or higher – a rate that has increased by sixtyfour percent. This is a faster rate than any other race in the nation.

population. However, African American buying power is often overlooked – overlooked in a big way. Statistics show that African Americans make more shopping trips than all other races. However, this group also spends a smaller amount of money per trip. It is

interesting to know that African Americans in the upper income brackets tend to spend three hundred percent more in upper scale grocers – more than any other group in higher incomes.

African Americans also use more than twice the amount of cellular phone minutes,

The demographic of African Americans is younger with more education and higher incomes than many would be led to believe by the media.

While many figures show the average African American household income nationwide to be in the $30,000s, many figures are now showing this figure to be a little under $48,000. What also must be taken into consideration is that African American consumers are growing in population – growing at a pace that is greater than the other parts of the population, by thirty percent.

What is most astounding about African American consumers as a whole is that if they were their own country, they would be the sixteenth largest nation in the world.

That is a lot of buying power for race which is only fifteen percent of the United States

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compared to whites anyway. Blacks are shown to use almost 1,300 minutes per months. This is more than twice how much whites use, which is a little over 600 minutes.

tend to spend more on electronics, utilities, groceries, footwear. They spend a lot less on new cars, alcohol, entertainment, health care, and pensions.”

The African American population is without a doubt younger than a lot of other demographics, which could factor into the increasing buying power as younger people tend to be less frugal with their money compared to older parts of the population. Cheryl Pearson McNeil, who is a senior vice president at Nielsen, is quoted as saying, “The black population is young, hip and highly influential. We are growing sixty-four percent faster than the general market.”

An increase in black-owned businesses is also considered to be a factor in the increase in African American buying power. However, many analyzers are not fooled by these numbers.

After all, they are figures which often lack real depth on the actual effect on African American prosperity. African Americans are considered the biggest spenders in the nation, yet often rank the lowest in median household income. These kinds of statistics often leave readers with an ideal that this group may not be as disadvantaged While African American buying power is economically as many would believe. These increasing and is definitely a force in the United numbers really only reflect African American States economy, it gets little attention from spending habits, not power. many companies. Statistics show that companies spend some $75 million per year on marketing. A professor of business in Syracuse, Dr. Boyce However, only three percent of these marketing Watkins is known for talking about black wealth. efforts are seen in African American publications. In response to the increase in African Americans “If you want to market to those groups, then you buying power, he is not surprised by the results should know what particular groups buy your of these kinds of studies. “Unfortunately, when stuff,” Noel King is quoted as saying. King is a African-Americans make money, we spend it. We reporter for Marketplace’s Wealth and Poverty don’t use it to invest or produce,” he is quoted desk. King goes on to talk about the perceived as saying, “When we get our tax refund, we go spending habits of African Americans. “Blacks straight to the store.”

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DEFEAT OF “PROP F” SENDS MESSAGE TO INDUSTRY: AIRBNB IS HERE TO STAY Although it was founded back in 2008, Airbnb has really taken off in the last few years. The online platform allows homeowners to list their properties – which can be single rooms, a suite of rooms, apartments, or even entire houses – for rent using the Airbnb website. The concept is not entirely new. Websites like VBRO and HomeAway have been around for years. Yet Airbnb has found a way to reach the masses and today offers 1.5 million listings in more than 190 countries.

regulations in place, and hotel owners are miffed because Airbnb owners aren’t subject to the same taxes that are applied to the hotel industry.

That is why all eyes were on San Francisco this past November as voters went to vote yay or nay on Proposition F, a ballot initiative that had the potential to dismantle Airbnb.

Prop F, otherwise known as the “Airbnb Initiative” was a measure put before voters in an effort to restrict private, short-term housing rentals. The Travelers love the service because they can details included: often find a place to stay at a lower cost than in a hotel, and Airbnb listings allow many travelers • Private, short-term rentals would be capped at to “live like a local” compared to a more sterile 75 nights per years; hotel environment. Homeowners love using • Provisions would require the owners of the platform because it can help them generate private rentals to pay hotel taxes and abide relatively passive income while they’re away. In by the same city codes that regulate the hotel some of the most expensive real estate markets industry ; like New York and San Francisco, renting out a • Rental hosts and “housing platforms” would property on Airbnb can help chip away at costly be required to provide quarterly guest and mortgages. For instance, a typical three bed, two revenue reports; bath home in Santa Barbara generates upwards of • The use of “in-law” units for short-term $400 per night when listed on Airbnb. rentals would be prohibited; and • New regulations would take effect regarding Not everyone is loving Airbnb, though. Cities and privacy, peace and quiet. towns have concerns over safety given the lack of

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The fact that Prop F was defeated in San Prop F would allow for both city government and private Francisco sets the stage for the defeat of citizens to initiate lawsuits against property owners similar challenges in other communities. found in violation of these regulations. Steep fines would There is also concern that converting apartment be imposed on anyone who did rentals in to short-term rentals will only restrict not abide by the new city law, upwards of $1,000 the local housing stock even further, thereby per day for each non-compliant rental listing. driving up costs that are already exorbitantly high Websites like Airbnb, HomeAway and VBRO, (the median rent for a one-bedroom apartment companies with rental listings nationally and now hovers around $4,000/month). internationally, stood the most to lose and faced millions of dollars in fines under the proposed The fate of Airbnb (in San Francisco, at least) was regulations. up to voters to decide once and for all.

Advocates of Prop F urged that with housing as expensive as it already is in San Francisco, more regulations were needed to keep long-term rental units intact for the welfare of residents. A Telegraph Hill resident told the L.A. Times that she voted “yes” on Prop F because she fears short-term rentals are wreaking havoc on the community: “I’ve seen it in my neighborhood – people have been evicted from [their units], and they’re no longer long-term rentals,” she said.

“Now they’re hotels, and we hear people go up and down and up and down with their roller bags all the time.”

In an election that saw more than $8 million in campaign dollars spent on behalf of Airbnb alone, Prop F was defeated 55% to 45%.

The defeat of Prop F sent a signal to the real estate industry: Airbnb is here to stay. The fact that Prop F was defeated in San Francisco sets the stage for the defeat of similar challenges in other communities. Love it or hate it, the tech capital of the U.S. organized to remind the nation of our constitutional property rights which may be regulated, but cannot be taken away.

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Spotlight:

Sacramento, California Not too big. Not too little. That is how some have described Sacramento, California. The state’s capital city is home to just under 500,000 residents, making it the sixth-largest city in California. Its real estate market is in line with those trends—home are not too expensive, but they are not cheap either.

themselves under water coming out of the Great Recession and have decided to hang on to their properties until they recoup value. This, combined with a lack of new construction, has contributed to a significantly constrained market.

Would-be potential homebuyers are increasingly finding themselves squeezed out.

“Just a few years ago, in the depths of the housing crash, a family earning the region’s median income could have afforded the majority of homes on the Sacramento market,” writes Hudson Sangree for the Sacramento Bee. “But many of those houses were snatched up and turned into rentals by investors.” Available inventory for sale was down nine percent Yet as many have noted, Sacramento (unlike between August 2014 and August 2015 alone. so many other California neighborhoods) has traditionally been a middle-income community Compounding matters is the reality that wages where residents of modest means could own have stagnated for workers in the Sacramento a home. A number of homeowners found region, unlike the wages earned by peers in Compared to Los Angeles or San Francisco, Sacramento actually seems like a bargain.

According to online real estate platform Tulia. com, the median sales price for a home is $246,000 in Sacramento, which equates to an average $180 per square foot. Median rents hover just under $1,400 per month.

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places like Silicon Valley. Simply, housing seven, eight offers above the asking price because values continue to climb in Sacramento but the average property is still so affordable: a purchasing power has not followed suit.

3-bedroom, 2-bathroom house goes for just $225,000.

On a positive note, it seems there are fewer institutional investors are buying property in Luxury homebuyers will likely turn to Sierra Sacramento compared to years past. Now, it’s Oaks and Sierra Oaks Vista, two neighborhoods mostly small scale developers and home flippers that are growing wildly popular with the region’s who purchased below market value and are now doctors, lawyers and politicians. “They’re just re-listing the newly-renovated properties. The waiting for something to come on the market,” Sacramento Business Journal reports that the says Kim Pacini-Haruch, who has several clients resale of homes below $350,000 has dropped by with multi-million dollar budgets looking in 25 percent over the past year, while inventory these neighborhoods. “They’re even willing to of luxury homes priced at $750,000 or more has buy a tear-down and build something new.” increased by 17 percent.

The location is great given how close it is to downtown, but still offers exclusivity.

With fewer investors prodding around, Sacramento’s home buyers and sellers can Just like Sacramento as a city more generally, expect the market to finally stabilize. Indeed, the real estate market continues to prove that a recent Urban Land Institute report predicts Sacramento has something to offer everybody. the capital region’s development will trail Some homes aren’t too big. Some aren’t too other Western cities in 2016. Of the report’s 75 little. The challenge faced by the region now “markets to watch,” Sacramento came in at 61st is ensuring there is enough inventory for and underperformed other California metros. everybody.

The report went on to suggest that in 2016, most of the region’s new construction (if any) would likely take place in the suburbs—despite a broader national trend and developer interest in building walkable, mixed-use projects in downtown centers.

Neighborhoods to keep an eye on include Elk Grove, a former bedroom community that has its own little downtown center, and West Sacramento. “West Sac,” as some call it, is benefiting from its location just across the river from downtown Sacramento, which has experienced a tremendous building boom in recent years including a new arena. Homes in West Sac’s Broderick neighborhood often fetch

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REAL ESTATE FOCUS ON MANHATTAN,

NYC, NEW YORK If there is one thing about Manhattan, New York City, New York of which anyone can be certain, it’s that if you can make it there, you can make it anywhere. The famous lyrics from Frank Sinatra’s iconic song, “New York, New York” may not have been specifically referring to the high cost of living there, but it is easy to make the correlation. According to the Council for Community and Economic Research, the cost of living in New York City is double the national average and that doesn’t include some of the highest state and local income taxes in the nation. Truly, if you are financially able to live in Manhattan, you could afford to live just about anywhere in the U.S.

What is the Cost of Living in Manhattan?

Renting

Buying

If you are thinking of living in Manhattan, then you have to first consider the cost of housing, because the average rent for a two bedroom apartment is nearly equal to the entire monthly paycheck of the average American worker. You could rent a two bedroom apartment in the metro area for about $1,638, but if you want to be

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closer to the action in Manhattan, it will set you back $3,895 according to the 2015 Citi Habitat Market Report.

At those rates, you may want to consider buying rather than renting, except, according to SmartAsset, the average home value in Manhattan is nearly $850,000. But, if you were willing to brave the commute into Manhattan, the National Association of Realtors says the average home price in the greater metro area

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for $455,500. Even if you can qualify for the mortgage, you would still have to be approved by board of the condo or co-op building, and their requirements can be far stricter than banks.

Speaking of co-op and condo, you have to factor in monthly fees for maintenance and amenities, which could run as high as $600 a month

Driving

your car to work, it could cost you more than $500 to store it, unless you want to play chicken with the meter maids by parking it on the street.

That could wind up being more expensive. It’s probably best not to own a car in Manhattan. A transit pass would set you back a $115 a month.

Food You have to eat, but it will cost you about 35% more in Manhattan if you plan to cook at home. If you eat out, you will pay, on average, 60% more for a moderately expensive dining experience.

Even a meal at McDonalds can be as much as 25% higher than what you used to paying.

Entertainment

When factoring the high cost of living in Manhattan, many people wouldn’t think transportation is the second highest expense.

But, when you consider the cost of maintain, insuring, fueling and storing your car, the expenses can run as high as $1,500 a month.

Manhattanites pay the highest insurance rates in the country, and even if you don’t plan to drive

This is one of the bright spots of affordability in Manhattan. Setting the very expensive Broadway theater entertainment aside, Manhattan is a stage offering nearly unlimited opportunities to take in entertainment at no cost. From street corners or parks where musicians ply their trade, to the multitude of cheap and charming bars offering entertainment along with a meal or a drink, there is no shortage of low cost entertainment.

Just watching the world go by while sitting at a sidewalk café is enough entertainment for most people.

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Why Would Anyone Pay that Much to Live in Manhattan?

Upper East Side one night having Burmese dumplings, and in Flushing the next night eating the best Chinese cuisine in the country.

If you travel to Manhattan, you have probably seen the ubiquitous logo “I Love New York.” Of course, the locals would never be caught dead wearing it on a t-shirt, but that is truly how they feel. As Huey Lewis sang in his song, “Where else can you do a half a million things all at a quarter to 3?” That is what attracts people to Manhattan.

All the Culture You Could Ever Want

Unquestionably Manhattan is a cultural powerhouse. Whether you are into art, films, book readings, concerts, or a combination of everything, there is a never-ending availability of cultural experiences. No other place in the world packs in the number of cultural venues – more than 700 galleries, 1,500 parks, 600 Eat Whatever You Want Whenever You Want With more than 8,000 sit-down restaurants, nightlife venues, and dozens of the top museums fantastic delis, and hundreds of food trucks, you in the world. can eat anything you want at any time. Also, as an added perk, most restaurants in Manhattan The Bottom Line will deliver.

FindTheHome.com analyzed the data for the greater metro area of New York City and Travel the World determined it would require a minimum takeThere is no place richer in diversity than home income of $170,000 to live comfortably.

Manhattan. In fact, if you want to travel the world, You would probably have to pad that by another you never have to leave the city limits. Each of $25,000 considering the cost of renting in the distinct neighborhoods in Manhattan offer a Manhattan. If you can come with that, and you unique experience in culture, dining, shopping, are willing to live small (apartments are no entertainment, and most can be reached by nearly as big as the ones back home), living in subway and a short walk. You could be in the Manhattan would be an amazing experience.

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Frazier Group Realty, Inc. As you venture into the World of Real Estate, we can help you put the pieces together and Naviagate you into Home Ownership

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Frazier Group Realty is the right place. Our Navigators are available to give you personalized service and answer any questions you may have. You can call, email or visit us and we will be there ready to help you every step of the way. Wether you are a first time home buyer or an experienced real estate investor, here at Frazier Group Realty you gain useful information about how to choose the “right” property, and everything involved in making an informed decision in today’s real estate market.

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3739 6th Street, Riverside, CA 92501 Office: (951) 686-5261 Fax: (951) 686-5264 www.fraziergrouprealty.com

Our Cover

Michael Krein, Phd. Everyone talks – Few people do!

Now make something happen!

Eric Frazier, host of The Power Is Now Radio, was eager to interview Michael Krein, Phd., on The Power Is Now Radio about Michael’s rise to success and his latest endeavor, RIO Genesis.

REO Brokers Association since its inception. Members of the National REO Brokers Association specialize in the disposition and sale of bank-owned properties.

Michael Krein is also the former owner of Nevada Real Estate Services, and over the past twentyfive years he has personally listed and/or sold in excess of 25,000 single family homes, many of which were properties owned by various financial institutions from around the country. He is a well-known expert in the real estate and finance field and a noted speaker in the topics of real estate, foreclosures, bank-owned properties, and HUD properties.

Michael Krein, Ph.D., is the CEO of RIO Software Solutions, the parent company and provider of the RIO Genesis software platform.

It was Dr. Krein’s thirty years of experience in the real estate brokerage and default servicing industry that led to the creation of the RIO Genesis system, whereby his ideas and management systems were incorporated and designed into a comprehensive and userfriendly software system for both general and default real estate As you can see, Dr. Krein has companies and their affiliate a variety of qualifications and partners. a surplus of experience. He is a well-rounded professional that Dr. Krein has also served as is currently focusing on his RIO the President of the National Genesis software platform. We

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OUR COVER

We at the Power Is Now Inc. are excited to work closely with Dr. Krein and RIO Genesis on The Power Is Now Radio to bring our listeners and readers the most up to date information.

consuming and expensive at times. By offering this streamlining tool, he brings exceptional new options for your business and even a new business model if necessary. This is all about giving you the tools for success. Efficiency is Lately, his focus has been on RIO Genesis here to stay with RIO Genesis. and growing this user-friendly software. The software itself offers solutions to both real estate It is easy to see how RIO Genesis evolved out agents and real estate brokers. For agents, the of Dr. Michael Krein’s professional philosophy, RIO Professional subdivision of RIO Genesis “Everyone talks – Few people do! Now make manages contacts, team agents, staff, and something happen!” This software does it all, transactions from anywhere. This tool will keep making you a leader who acts now and builds even the most unorganized real estate agent put success for you and your team. Dr. Krein is together and ready to buy and sell properties. someone that The Power Is Now is proud to feature in our magazine, hoping that other real For brokers, the RIO Office Complete is an estate professionals will take inspiration as we all-inclusive package that includes a business have from his success in building this company. management system that is designed to allow We once again thank Dr. Krein for taking the you to take control of your office. Automating, time to interview and to be featured in The branding, and managing tools come with this Power Is Now Magazine. We look forward package to grow your brokerage into all that you to speaking with him again about the leaps dream it can be. and bounds that RIO Genesis will make.

Please visit Michael Krein’s website at RIO Genesis is also affordable and secure. https://riogenesis.com/index.php to get started Dr. Krein understands better than anyone that now. Your business will thank you! running a business in real estate can be time

HELOC-AGEDDON or “the easiest listing you will ever get!”

From our infamous “let’s kick the can down the road” government comes the next fiasco in the still “not really recovered” housing market. This is another ignored aspect of the housing bubble that is now a late arrival to the party, and will result in a lot of great listing opportunities for agents and brokers who understand what they are and where to find them.

as refi’s and/or second mortgages to folks using their homes as ATM machines during the housing bubble. Some new types of loans were also created during that time to get people into homes which under normal financing parameters they would never qualify for. In other words, they couldn’t really afford them… Big surprise right?

Even though it doesn’t really matter – all any of us as agents and brokers ever really want is another saleable listing anyway – where it come from is usually irrelevant. As long we get a listing and a sale we are usually a pretty happy bunch.

There were several variations but the basic premise was this – as buyers were qualified for loans based on income in relation to payment – the payment terms were manipulated to allow people to qualify. Typically this was done by giving the buyer a first at normal market rate and terms – 30 year fixed amortizing, while simultaneously issuing a second loan as a HELOC format - Typically interest only for ten years on the second which could have been anywhere from 10% to 40% of the purchase price.

Here is the next big wave of listing opportunities.

The good news is not only that there are going be plenty of them – they are easy to find as well!

We are calling this HELOC-ageddon, which is basically when all of the HELOC loans issued from 2004-2007 hit their ten-year resets.

But now comes the real problem. Most of these Some basic background: Aside from HELOCs loans have started to “reset” - meaning that these (Home Equity Lines of Credit) that were issued loans (HELOC) portion which had usually been

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on a low “teaser” rate and interest only payment Can you say “Strategic Default”? are now resetting to much higher interest rates and fully amortizing payments.

Within six months of many of these resets, default rates were already being reported at close In other words - massive payment shocks for to 10% - which due to the time delays really people who could barely afford the original means that a large portion of these folks never lower payment to begin with. Also keep in mind even made another payment once their payment that there has been no real wage growth in this amount increased. country for over 12 years and many of these people are now earning even less now than they We have another massive wave of strategic were when they got the loans and now we are defaults and short sale listings coming. The good going to drastically increase their payments too? news is that these “eventual” sellers are easy to In some case the payment shock has been quite locate and solicit. Also given the nature of these severe with some borrower’s total payment loans and the entities holding them – the short nearly doubling. sale negotiation will also be much easier than It gets worse – there are nearly three and a half million of these loans out there (probably more as reporting is a bit sketchy on these loans) many of which are considered seriously underwater.

“Seriously underwater” is another funny term as it is generally acknowledged to be 125% plus loan to value. The reality is that anyone with less than about 10% equity (90% LTV) is also “underwater” when costs of sale are included in the equation.

ever before.

There you have it – likely over 3,000,000 homes that will have to be sold in the next few years with very easily identifiable criteria. In other words – it is very easy to locate who has these loans and contact them about handling their short sales. Great prospects!

For more details about this current market shift and massive listing opportunity – there is a complete free video lesson with details on how There is obviously a bit more to this but from to identify, contact, and list these properties at our standpoint as brokers and agents you have www.freeBrokerschool.com millions of homeowners here in this country whose homes are seriously underwater and with the housing appreciation rates starting to level out – likely will never have any equity or ever get caught up in the near future.

To add insult to injury – not only do they still owe more than their home is worth but now their payments are drastically increasing – in some cases doubling from the original payment that they could barely afford to begin with!

By Michael Krein What are most homeowners in this situation now going to do?

Air date March 3rd, 2016 Click here

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www.thepowerisnow.com

$300,000 per Year on “One Hour per Day” Listing System This truly is the most amazing listing system ever created, because it actually works and it is easy to do. Unfortunately, it’s rarely taught anymore, and the people who DO still use it likely won’t share it. As Mike Krein is now a “retired” broker and no longer competes with anyone he is giving it away for free! There’s a script and a method, along with tips and tricks for success. What is it?

before with the technology we have at our fingertips to stay organized and focused. It truly only requires one hour per day.

The Problem with Other Systems Automated listing leads fall short for one big reason: no personal contact. Take a look:

Commit to one hour per day!

system for obtaining listing leads. Calling still leads the No one has yet created a pack when it comes to success. comprehensive, automated Follow up is easier than ever

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• Social Media: Difficult to do at volume, no personal contact, low results.

• Mailing Programs (farming): Long term, expensive, no personal contact, low results.

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• Social Networking: You do have personal contact with this method, but it is limited by time and the number of social contacts (real friendships) you can maintain. So, it may be all personal contact, but it isn’t scalable.

anyone can do anything for only an hour - so anyone can do it, and let’s face the fact that it’s still the best way to get listings, for a variety of reasons.

The Best and Most Effective System

• Rejection - Getting flatout rejected is hard on a person’s self-esteem.

• Mentally Draining Cold calling for hours is exhausting.

• Low Conversion - It can be very discouraging.

• Ego - Thinking that it’s beneath you. It’s not. Get over it, and get your agents There is a complete and free over it. video lesson that teaches this system step by step at: www.freebrokerschool.com What About This One

We first need to eliminate the main impediments to “cold calling”:

Hour a Day Thing?

The best and most effective system is: Personal Contact at Volume. That’s another way of saying “COLD CALLING”.

I know, I know! Cold calling sucks. But you know what?

Cold calling works, and it doesn’t have to suck if you do it this way. It can be hard to convince yourself and your agents to do this, however this system is actually easy and relatively painless – and

By targeting the right audience and utilizing the right scripts with very high conversion rates, you can cut down dramatically on time required and a steady supply of good listing leads can be generated with only one hour per day of calling. But I am getting ahead of myself – these are not really “listing leads” in the traditional sense, yet this will still result in a tremendous amount of listings taken. That is what makes this system so much fun!

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You can also reduce rejection and ego-bruising which is usually what prevents most agents from using this.

Now you are probably saying to yourself – great – another cold calling script… well I have news for you- it is not really about the script. It is about the system itself and why it works so well. The script and call are only the most efficient contact point. There is a lot more to this and it also happens to be the easiest listing system ever that doesn’t even require strong listing skills so it’s great for new agents as well.

Take a look – you will be pleasantly surprised!

By Michael Krein Air date March 10th, 2016 Click here

www.thepowerisnow.com

Any Agent - 100+ Transactions per Year!

Sound impossible? It isn’t.

Leveraging technology; shifts in buyer behavior, and methodology is the key. Anyone can now do 100 transactions per year as a buyer’s agent! - Now more than ever. Don’t believe me? I’ll break it down for you.

What’s going on in the industry that makes this possible?

Time per transaction decreased significantly.

homes on-line, but will now physically “view” only 8-10 homes before they purchase.

These are the buyers that you should focus on and allocate your time and resources to.

More importantly, these buyers now make up over 55% of the market and that percentage is still increasing!

The “direct contact” time that requires an agent has become has minimal; it’s a quarter of what it used to be.

management, transaction management, E-Signatures, Showing time invested per paperless, and other real estate transaction with these types of technologies, processing time buyers is now only six to eight can now be under ten hours per hours. transaction as well.

Buyers utilizing the internet are now finding their own homes more often than not. Agents no longer need to show 40-50 homes before a buyer makes a decision. The savvy internet With automated lead generation, buyer may look at 100’s of lead incubation, follow-up With tech savvy buyers now march 2016

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The new buyer

The agent’s new role:

The empowered buyer now runs the show. No longer is an agent the buyer’s primary source of information on a house, the area, the schools, the neighborhood, financing, and the tax situation.

The agent who says, “I have to find a house for my buyer” is the agent who is working with the wrong buyers or simply not understanding what their role now is. Why? Because the buyer you want to work with is going to find their own house. A recent statistic states that 55% of recent buyers found the home they eventually bought themselves on-line.

So, what’s the agent doing for the buyer in today’s real estate market? Your agents are now facilitators and coordinators, not salespeople.

Your agent’s value to a buyer is now as a person who can connect them to the right people along the path to owning the home they’ve already chosen. For example, who can help them get the best deal possible on a loan? Who knows the home inspectors? What the buyer needs is someone who can keep the transaction moving along and will follow up with them quickly and efficiently.

The agent who clings to “we’ve always done it this way” and rejects internet leads as a waste of time is not the one who can achieve this much The modern buyer: volume. The agent who stays out of the way, and instead chooses to be a qualified resource of the • Pulls their own credit report. modern buyer is the agent who can achieve the • Has very likely prequalified for a loan.

• Begins looking online for a house on average 100+ transactions per year.

8 ½ months before they actually make a purchase.

The Broker’s New Role: • Knows what their price range is and what they The 100 transaction per year agent can afford, and can calculate their payments.

• Knows the market and what is available - The agent who can accomplish 100 transactions they have already educated themselves. per year is the agent that actually wants to be a • When that buyer contacts you, they may be 100+ transaction per year agent. It’s that simple. at any stage in the process from 8 months out to ready to buy that day.

The financial “comfort zone” agent isn’t your • Because this buyer will likely find their own best candidate. In addition to nudging them out home, what they are choosing instead is of their financial comfort zone, it requires the which agent they will utilize to get it. The agents to understand the fundamental industry last agent they contacted or the agent who changes occurring, and for them to embrace has the listing is no longer the default choice. technology. Your 100+ transaction agent must • The modern buyer may contact 16-18 realtors be willing to change the way they do things. before they buy a house. What will make them choose you?

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the eventual “sale” is made with one of your agents.

• Teach your agents to stay out of the buyer’s decision process. Agents must understand their new role as a facilitator and transaction manager, not a salesperson! I can’t stress this enough. Your agents will take the lead from you. Teach them their role as a buyer’s agent, and they will achieve that end.

As far as new technology goes, it’s also on you to teach them the why. Showing them how is a start, but it won’t work unless they understand why they have to adapt. So, tighten the ship.

Make your brokerage office more nimble, with a business model based on the future, not the past. Recruit agents who are willing and able to shift with the changes in buyer behavior and emerging technologies. Not every agent will be a 100+ transaction per year performer, as that kind of production level will still involve a lifestyle choice, but by adapting this model even your average agent’s production can be immediately improved by 50-100%.

No stagnation allowed. The two greatest impediments to an agent’s success are still Obviously, there is quite a bit more to this story, ignorance and ego. This is what they really need for a complete lesson on how all of this works to overcome. and how to implement this for yourself as an agent or for your entire office, there is complete What they will need from you video lesson available on-line for free at: www.freebrokerschool.com You will have to do for the agents what they won’t do for themselves. Teach your agents the changes in the market and buyer behavior.

Other tasks you need to do to make this happen include: • Lead Generation - Do it for them. With automated systems available for this task, you will keep your agents productively “Showing & Selling” • Lead Incubation (Follow-up) - By implementing automated systems, buyers can be “held on to” during the 8 month period that they are “looking on-line” so that

march 2016

By Michael Krein

Air date March 17th, 2016 Click here

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40% of All Real Estate Transactions Involve a Senior

How can you get more of these deals?

The most profitable segment in the retail real estate market isn’t first time home buyers. The “fattest” segment - where you can make the most money is actually retirees and seniors.

This is by far the largest individual segment of real estate transactions in the United States, and proportionally - it is still growing as more and more of the “baby boomers” hit retirement age. Everyone knows it’s there, but no one has really focused on how to specifically tap into this market. They should. Let’s take a look at some statistics: • • • •

and their unique needs and requirements will set you apart from other agents in your market and can easily make you a real estate superstar.

Understanding who your client is and what their needs are:

What we can conclude from the above is that between the ages of 65 and 85, we spend our assets. Unfortunately this can place us in a vulnerable position, particularly in the arena of long-term care. It’s estimated that 84% of all Americans 80 years and older receive some Over 10,000 Americans turn 65 years old form of long-term care, and yet most aren’t every day. saving enough to cover the costs. This reality Over 7% of them will sell (list) their home in jeopardizes the “legacy” we plan on leaving our their 65th year. heirs.

Many will also purchase another home. (downsize) Who are the downsizers?

By age 85, 79% are renting. That means they have sold their property.

They are generally the people who are retired,

or are approaching retirement, and are living Having an understanding of this market segment in their “trade-up” house. These homes are march 2016

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larger and more expensive on average, as it’s where they raised their families. This makes for fantastic listing inventory. The equity in their homes is generally quite high. These are not short-sales, and a healthy-sized portion of these sales will be double-deals. They not only want to sell their present home, but will usually buy something else. (downsize) This next purchase has a very high likelihood of being a cash deal.

understand where they are in terms of decision making for their future. Housing concerns are a vital part of longer-term questions about their financial, legal and physical stability and quality of life in their later years. These are a sampling of their concerns:

These two scenarios lead to a few unintended consequences. Staying in your current home puts you in a situation where it’s more costly to modify your home than it is to buy a new one. Attempting home modifications limits you in terms of new buyers; generally they don’t want this type of house. New construction can be more cost-effective and more aesthetically pleasing, meaning you’re happier in a new home with less stress.

• Will we outlive our money?

• Can we increase our cash flow while in retirement?

• Should we take the same risks with our money?

• Do we need annuitize our life (Take out monthly stipends?)

• Family dynamics: Are our adult children contributing or costing us? Do they live with us?

Paying cash to purchase a downsize home has a few crucial disadvantages as well:

Legal Concerns:

Housing concerns:

• Pay cash, or finance? (Approximately 40% What is “dead equity?” pay cash.)

• Quality of life? (social life, climate, activities, Dead equity is an unappreciated asset that etc.) doesn’t take advantage of low-risk growth. • Lower property taxes?

There are two types related to housing: • Do you want parents or adults kids nearby?

Who pays their expenses?

• Staying in current home.

• Paying cash to purchase a retirement home. Financial Concerns:

• • • • •

• Is our estate protected? (Issues such as Does not increase cash flow living trusts, powers of attorney, advanced Counts on appreciation to fund vital decisions healthcare directives?)

Loses out on investments • Are we protected against elder abuse?

Loses out on tax-free strategies • Are we able to leave a legacy?

Creates a path to financial decline!

What are the people in this segment’s concerns?

In order to serve this segment effectively, you have to know what their concerns are and

Health Care Concerns

• Will a new home purchase meet physical and cognitive needs?

• How should I plan for long term care?

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The Power is Now has dedicated an entire show just on this topic at: thepowerisnow.com/real-estate-success-month/ There is also a complete free lesson on how to tap into this market at: www.FreeBrokerschool.com Another good source for obtaining listings and sales in this market segment can be found by affiliating with life planning companies. The use of life planning companies is on the rise. Their target market is exactly the same people that we have been discussing, and they specialize in real estate downsizing and estate planning for retirees and seniors. They manage the entire process, from trusts and wills to estates, financial planning and reverse mortgages. Some of these life planning companies are also building agent networks to handle the real estate transaction portion of their business group for clients. RIO Genesis has signed one of these companies, LaterLife, to deal with the real estate segment of this process for them - the listing assignments and buyer referrals. (With no referral fees!) It functions very similar to a relocation transaction.

Note: There is an excellent and inexpensive online course available at www.laterlife.us that will teach you a great deal about these consumers, their needs, wants, and concerns, so that you can more effectively work with them.

So, how do we tap into this market?

Thankfully, we live in the internet age where virtually all data is available for us to research and identify these types of prospects so that a highly targeted custom marketing campaign can be inexpensively implemented.

By Michael Krein

Air date April 14th, 2016 Click here march 2016

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Technology is Changing the Real Estate Industry

Will you change with it or become irrelevant?

Remember when a real estate agent was the only way to find a home? Buyers and sellers relied solely on word of mouth or signs on bus stop benches, or randomly picked one out of the door hangers or flyers left on your porch to find someone to represent their interests. Once they haphazardly found an agent, buyers and sellers relied on that individual completely, to find them homes, a mortgage broker, bring them buyers, and give them area information, school information, and all the other facts and details necessary for buying and selling real estate.

• 90% of buyers search the internet for homes.

• 55% of buyers now find their own home that they eventually buy, and that number is rising.

• Fewer than 15% of sellers relist with their previous agent.

Technology and the internet have changed the market entirely. They have changed how we do business, and how consumers behave, think, feel about and buy real estate. With the changes in buyer and seller behavior, agents need to change as well.

This is not how we do it anymore. That is a bygone era of the real estate industry. Just like Portrait of a Failed Agent we no longer use rotary phones, today’s buyers and sellers no longer rely solely on their agent What does an agent who is about to be trampled for information. Some facts about today’s buyers by technology and have their income circle the and sellers: drain look like? A failed agent is one who refuses to adjust to the changing market and understand march 2016

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come to you already having found their home on the internet. Your job is to make sure they buy it from you. The new buyer doesn’t need or want you to find their home. What they want from you, their agent, is access to the information that will help them get the home they’ve already chosen.

This changes everything. Truly, agents are more like order takers and transaction processors in this market. I realize I just ticked off many of you with that statement, but it’s the truth. Your buyer is looking for someone to write up the home they’ve already chosen and then to help them to actually own it. This is the trick for marketing now: get control of the buyer early in the search process, and get them to come through your portal for access to information they are looking for. When they are ready to buy the house they have found themselves, they call you to do it.

IDX portals are excellent for this. This is where you leverage technology in your favor. The buyer is getting information from your portal, and you are backing up and reinforcing the information they receive. You, the agent, are not there to find them a house, you are there to get them the house. Your goal is still to get the phone to ring, but your role to the buyer is different. Back in the good old days, agents would prospect for buyers. Shift your mindset. Stop prospecting and start marketing for buyers.

how they can leverage these changes to get a larger piece of the new pie. The failed agent invests in the wrong marketing venues such as home magazines, newspapers, and listing advertisements. This agent also ignores the fact that real estate consumers have researched the market and found their homes on the internet by the time they contact them. This agent clings to Portrait of Today’s Successful Agent the idea that they are the sole person who can find their buyer a home, or sell a home using old In today’s market, you need to be an expert real marketing tools. This agent has a pretty big ego estate consultant, and you can use technology to think the changes in the market won’t affect for that. Today’s successful agent is using the them. internet for leads, not wasting time and effort “researching the market” and showing 50-60 Chasing relevance and never quite catching it houses per transaction. Successful agents are is sad. Don’t be this agent. You’ll go broke. Set using integrated technology systems to market your ego down and embrace the new market. to the buyers who are savvy enough to use technology to find their homes themselves. Be What’s the New Market, Anyway? the agent who assists this process by providing the tools needed to empower the buyer.

The market is composed of buyers who have

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aren’t working anymore. A good system will include automated marketing tools aimed at today’s buyer.

• Your website is a marketing tool. Make it visually interesting, easy to navigate, and preferably integrated with your CRM. • Business Management.

Transaction management, document management, and digital signatures are the key to successfully keeping the transaction moving along and compliant. Integrated email and scheduling to keep on top of communications and appointments are important to managing transactions, as well.

• Paperless document storage is important as well. The amount of paperwork required for real estate transactions has grown tremendously in recent years. A “cloud” based solution for document storage that is easily accessible online can save you in the case of a problem complaint, or lawsuit arise.

• Online offer submission and management.

A system where all offers from the buyer or selling agents is tracked, logged, and How? managed. This saves hours of time and dramatically reduces liability and potential Change is hard. Embrace it anyway. Here’s what lawsuits. you need to get the new technology to work for • Mobile Solutions. Are your agents sitting you in the market: around their desks anymore, using their office phones? Or are they working on the go • Up-to-date software. How old is the system via their cell phones and tablets? You want you’re using now? The newer and more a flexible technology solution that can work updated, the more the program can do for reliably wherever it’s needed. you, and subsequently your buyers and sellers.

• Integrated CRM (Customer Relationship The More All-in-One the Better Manager) module. It should include lead generation, lead management, and lead Having all of these pieces in one integrated incubation. system eliminates the multiple opportunities for • A note about lead incubation: this is marketing, transactions, buyers, and business where many agents fall down. Technology to fall through the cracks. Which agent are you with the capability to help you with follow going to be: the failed agent or the successful up will give you an edge. agent? It’s up to you. Embrace the new market • Marketing Tools. Remember, the old ways and the new tools, and be the successful agent. march 2016

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Find out more about the changing face of real estate brokerages and the changes in buyer behavior with Free Broker School videos: The Changing Face of Real Estate Brokerages Real Estate Changes in Buyer Behavior Get more information in Dr. Krein’s Technology Report (PDF) here: http://freebrokerschool.com/download/RIOGtechreport-bleed-20151021-finallow.pdf

By Michael Krein

Air date April 4th, 2016 Click here

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Failure through Prayer!

“The real myth of the 100 transaction per year agent”

by Michael Krein

For all of us that endured hardcore Christian Sunday School (usually Protestant) in our formative years, this story will be incredibly familiar as most of us have heard it dozens of times. If you were not as “blessed” as we with such an upbringing – and are unfamiliar with the story - here it is: A mighty hurricane came over the land bringing torrential rains and floods. A lone man is sitting on his front porch watching the flood waters rise. The local police come by in a motorboat and offer to take the man to safety. “No, thank you,” says the man, “I’m trusting in the Lord.”

The rains continue and the flood waters keep rising, until the man has to hurry to the second floor to avoid drowning.

Two men in a fishing boat come by heading to higher ground when they see the man trapped in the second floor of his house.

“Come on” they yell. “Get in the boat with us” “No, thank you,” says the man, “I’m trusting in the Lord.”

Still more rains comes and the water rises even higher finally forcing the man out on to the top of his roof.

A helicopter spots him on his roof and comes to his rescue lowering a rope for him to grab onto. The man waives them off yelling - “No, thank you I’m trusting in the Lord.”

Finally the water rises even higher sweeping the man away to drown and die.

When the man arrives in heaven he rushes to see God. The man asks God, “Why didn’t you save me?” “What do you mean?’’ replies God, “I sent you two boats and a helicopter.”

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I truly believe that God really does answer all of family’s futures, and in the parable above – to our our prayers. Whether he sends us boat, or a raft, or very lives! a helicopter, if it is a real problem, a real solution will be provided.

I am not an expert on your life, your family, your relationships, your heath, or any of the other But how many of us are actually listening? myriad issues and problems that you may be struggling with.

And is it just about listening and paying attention when our prayers are answered?

I am, however, an expert in the real estate business and this is what we are here to talk about.

Sometimes I think we just don’t like the answer that we get and therefore choose to ignore it. Let’s go back to the initial story of the man on We rationalize rejecting an answer that we don’t the roof. Many of you are in the same position like with denial. Since we didn’t like the answer, with your careers. You are struggling, enough we prefer to believe that God didn’t answer our deals aren’t closing, bills are piling up, you are prayers. just trying to survive and life seems be getting tougher and tougher every moment. Keeping with In our hearts we know this is not true, but as we the illustration, the flood waters are rising. Now, get caught up in the things we need and want for it may not exactly be your life at stake (although it ourselves and our families, we fall into this trap. sometimes feels like it is), but the welfare of your family and loved ones that you need to provide As I have grown older and hopefully a bit wiser, for is at risk.

I have also come to realize the most important answer of all: Sometimes God just says, “No.” There are plenty of boats and helicopters being offered to you – but you are just not taking them.

Looking back on my life, I can now see in I have been in the unique position of having met retrospect that some of the things that I had and worked with many of the top producing agents wished and prayed for really weren’t in my best and brokers in the United States for many years interest at all. Had I actually gotten what I had now. I have also met and worked with some of the asked for, my life would certainly not be what it is lowest producing (failing) agents and brokers as now and would have definitely been a lot worse. well. There are some major differences between Thankfully God, unlike some parents nowadays, them. knows how to say, “No.” Prayer is certainly a contributing factor, as it goes Obviously everything stated previously applies to hand in hand with both faith in God and a belief all aspects of everyone’s lives, to our health, to in oneself. our welfare, to our relationships, to ours and our The Power Is Now MAGAZINE | 47

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But it is not prayer itself that creates the difference. There are plenty of boats and helicopters being It is however, how one listens and pays attention offered to everyone, but in the realm of real estate to the answers. success, our boats and helicopters come in the form of: When we talk about the 100+ transaction per year agents and the most successful brokers, many of New Tools, New Technology, New Training, & the ones I know are in fact quite religious and New Knowledge for that matter “Godly.” They do pray regularly and many will rightfully attribute their success to Take advantage of them – the top producers do.

God. Take a new course, enroll in a coaching program, However, I have met just as many struggling create new marketing materials, invest in the new agents and brokers that are just as religious, and technology, maybe change to a more supportive also pray regularly, yet somehow success still broker, or a more modern office. There are so seems to elude them. many boats and helicopters out there for you. So, get in one, already!

The real difference is in listening and paying attention to the answers.

If you are not being as successful as you need (or wish) to be, then something needs to change. Isn’t There are plenty of boats and helicopters being that what we are really praying for when we pray offered to everyone – but it’s the top producers for success? We are praying for “change.” We who are taking them. want our circumstances to change from failure to success. That’s a very definite and distinct Going back to the initial story and the man on “change.” the roof, I had always wondered what he was waiting for. Was he waiting for God himself to Why are there still so many agents doing over 100 reach down from the heavens and pluck him from transactions a year – even in “this market”? What the roof and deliver him directly to heaven? If so, do they know that you don’t? What do they have perhaps he got his wish, because he did in fact that you do not? Are they just praying harder? end up in heaven! Of course he was also dead.

When talking with “failing” and/or lowThe real estate business has changed dramatically producing agents, there is always some excuse, over the last several years. What worked for us all and as unbelievable as this may sound, I have ten years ago, or for that matter even two years actually heard a lot of these agents blame God. ago, simply will not work now. The market and the It’s either “God doesn’t love me” or their failure real estate business have changed. The question is “God’s Will,” or, “This just isn’t God’s path for you need to ask yourself is: “Have I changed?” me.”

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Worse, yet, they are angry at God for someone else’s success, as in: “God loves them better” or “God takes care of them.” Trust me I have heard it all, either excuses for their own failure or a manufactured reason why someone else is successful and they are not. There are always excuses, but I have always been amazed at how often these excuses somehow involve God. I have even often heard these same things said of me. “Things just always work out for Mike.”

No they don’t actually and I have had more than my share of failures. The reality is that I just kept trying and worked my ass off, just like most of the other top-producing brokers in the industry.

got “three” miracles – in the form of two boats and a helicopter!)

Are many of us waiting for the wrong kind of miracle when we pray for success?

Have we all seen too many Charlton Heston movies? Do we expect God’s answers to come in the form of a Hollywood lighting strike from the heavens? Or a burning bush?

Let’s hope not, because if God answered all our prayers in that fashion we would all be burnt to a crisp every time we prayed.

So is it just “hard work” that makes someone God does answer your prayers for success. So pay a top-producer and a 100+ transaction per year attention. You are constantly being sent “boats” agent? and “helicopters.”

Strangely, it’s really not. Granted, it is certainly a contributing factor, but I know hundreds, if not thousands of real estate agents who work incredibly hard and still struggle. I also know quite a few top-producing agents and extremely successful brokers who are out on the golf course by noon every day!

Going back to our original parable and the topic here of “failure through prayer,” it is not about God failing to answer our prayers it is about us failing to listen to his answers!

Our business has never been as much about “working hard” as it has been about “working smart.” The principle at the center of “Working Smart” is about paying attention, knowing what is really going on around you, and changing your course accordingly. It is also very much about “faith.” This includes; not only having faith in God, but also having faith in yourself, in the person God made you to be.

I first heard the story of the man and the flood nearly 45 years ago as a child in Sunday School, and I am amazed at how often I still think about that man on the roof and what he was thinking and feeling as he prayed. What “kind” of miracle was he waiting for? (Let’s remember that he actually

Editor’s note: If you would like to learn more about how to succeed in the real estate business, the author has an entire series of free coaching and educational videos called “Broker School” available at: www.riogenesis.com

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YOU

Building Personal Savings

FOR THE DREAM HOME T

he biggest hurdle when moving from renting to owning your own home is saving the money for a down payment.

Saving up enough money to purchase a home takes dedication, sacrifice, and a clear plan.

The average price of a home in the US is roughly $224,000 (Sale Price of Existing Home). Prices have been rising steadily and a home today will cost you about $20,000 more than this time last year. Down payments vary based on your lender and can be anywhere from 3-20% so on a typical home you are looking at anywhere from about $7,000 to $45,000.

The amount required for a down payment varies for many reasons. If you have less than stellar credit you may be required to put more money down. VA loans tend to require less money down. Do know that the more you can put down the better terms you can get on your mortgage.

Once you have determined how much money you need to save here are some simple steps you can take to reach your goal.

1. Make a budget: Resources

such as You Need a Budget (You Need A Budget) or Mint (mint.com) help you quickly and easily put together a budget. Allocate every dollar you make to a category or to saving for your down payment. Seeing where all of your money goes will help you make decisions for the next step.

2. Trim costs: Now that you have a budget

you make coffee at home instead of buying it every day? Do you like to buy lots of new clothes? Do you pay for parking at work when you could take public transit instead?

Consider going on a spending fast and only buy essentials for a couple of months.

3. Set up a savings account just for your down payment: All of the money

you are saving for your down payment needs to go into its own bank account. Keeping it separate will allow you to watch it grow but will also prevent you from accidentally spending it if it is in your checking account of lumped in with other savings.

4. Make your savings automatic:

Speaking of savings account, set up an automatic monthly or weekly withdrawal to your special down payment savings account. Have it coincide with when you receive your paycheck, so it happens before you have the chance to spend the money on other things. When you don’t have to think about it and do it every month you will save yourself so much time.

5. Save any and all windfalls:

Most people receive some extra money each year whether it is a gift, work bonus, or tax return.

Make a commitment to yourself to put aside any extra funds you receive towards your down payment. These small lump sums will help your savings grow even faster.

look at where you are wasting money. Can

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YOU

6. Downsize:

Take a look at your car and current rental home. Can you downsize either or both? Moving to a smaller apartment or buying an older car with no payments can reduce your expenses significantly.

Money, while it will not bring you happiness, will alleviate stress in your life if you have enough of it to provide a roof over your family’s head. Living paycheck to paycheck is both stressful and unfortunately necessary for many in the U.S; however, putting away even the smallest amount of money could make the difference in your life. Even if you are having difficulty saving for a down payment on a home, The Power Is Now is here to help. I stumbled across the most amazing program called the Sapphire Lending Program. It allows one of my clients to get a mortgage without having the money for the down payment. It is the way to get your foot in the door and jump into the successful world of homeownership.

Do it now, because the power is now!

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?

REAL ESTATE

You can Afford the MORTGAGE but not the DOWN PAYMENT How to Use the Sapphire Program to Pay Your Down Payment and Closing Costs

F

or many parts of the country prospective home buyers have been beset by a couple of diverging trends since the economic and the housing recovery began. First, although the job market has been recovering, incomes have not been rising, and in some areas wages have been falling. Second, in some markets housing prices have been increasing much faster than income growth which has, once again, have put housing affordability outside the range of many families.

In the current environment, there are a growing number of families who might otherwise have sufficient income to make a mortgage payment, but who have had difficulty saving enough for a down payment and closing costs. That is where the Sapphire Program comes in. The Sapphire Program is a down payment assistance program created by the National Homebuyers Fund to assist families and individuals who can afford a mortgage, but do not have the resources for the down payment and closing costs.

How the Sapphire Program Works

3% and 5% grant is the loan interest rate, which is higher on the 5% grant.

The grant can be used for the down payment, closing costs, prepaid items, or earnest money, but it has to be fully utilized. None of the grant money can be returned to the borrower.

What are the Outstanding Features of the Sapphire Program There are several differences in terms of the qualifying criteria that make the Sapphire Program stand out from other down payment assistance programs.

First, when applying for an FHA loan, borrowers can qualify with a debt-to-income ratio of up to 56.9%, which really opens the program up to borrowers who could not qualify under the stricter requirements of conventional financing.

Second, borrowers can qualify under the Sapphire Program with a credit score as low as Homebuyers who meet the eligibility 620 as the middle score of the lowest scoring requirements can apply for an FHA or VA loan borrower. through the Sapphire program. Upon approval, they can receive a grant for 3% or 5% of the total Third, the income qualification is based on 1st lien loan amount. The difference between a qualifying repayment income, not household

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income. This helps families with multiple income sources keep within the income limit which is 115% of Area Median Income (AMI) for the county in which they live. So, for example, if both spouses work, and they plan on having Grandma live with them; even though Grandma will contribute to the mortgage payment, her income is not considered a part of qualifying income because she is not going on the loan.

Fourth, if the loan is a FHA or VA 30-year fixed, the allowable loan-to-value (LTV) is 96.50%.

So, for a loan of $200,000, the loan amount could be as high as 193,000. The borrower would have to come up with just $7,000 for the down payment, which could be provided through a Sapphire Grant.

How Does the Sapphire Program Work in Practice?

Get More Information from the Expert To find out more about this extraordinary program, you should visit the expert. Located in Riverside, California, but serving a nationwide constituency, the Power of Now, Inc. is a multimedia company and real estate sales and lending firm that specializes in real estate education for consumers and real estate professionals. The education is disseminated through online podcasts and video conferences offered nationwide on www.thepowerisnow. com.

Here is an example of how the Sapphire Program Eric Lawrence Frazier M.B.A, is the founder, can help a couple pay for the down payment and President, and CEO and he is a leading authority on the Sapphire Program. Eric applies his all closing costs: extensive experience in educating consumers A couple applies for a 30-year, fixed-rate FHA through his online podcasts and radio show mortgage on a home selling for $200,000. They which can be viewed on the website. Currently, would have to come up with $7,000 for the down Eric is featured in a podcast and a recording payment and additional money for closing costs. of his radio show discussing the particulars A grant of 5% of the first mortgage loan amount of the Sapphire Program, and can be found at would bring $9,650. If the costs exceed the http://www.thepowerisnow.com/the-sapphiregrant, the couple could negotiate with the seller program-buyers-and-sellers-club-2/. Feel free to to contribute a percentage to close the gap. Or, join The Power Is Now for our live broadcast! they could receive a small gift from their parents.

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JUMBO LOANS WITH 10% DOWN

NEW!

FREE mortgage app for your cell phone!

Click Here

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GREAT RATES! CLOSE FAST!

Loan Amounts up to $3 Million! * No monthly PMI Fixed-rate and ARM options are available Eligible for primary, secondary and investment properties Name: Eric Lawrence Frazier MBA CA BRE # 01143484 | NMLS # 461807 Website: www.thepowerisnow.com E-mail: eric.frazier@thepowerisnow.com Direct: 714-475-8629 O: 800-261-1634 x 703 F: 800-261-1634

* Restrictions may apply.

Frazier, Eric, Lawrence is a CA Mortgage Brokerage Licensed by the State of CA BRE 01143484 and is not affiliated with any state or federal agency. Frazier, Eric Lawrence is also licensed by NMLS# 1273606 - www.nmlsconsumeraccess.org. Frazier, Eric, Lawrence is an equal housing lender. Our corporate office is located at: 3739 6th Street Riverside, CA 92501. Telephone and Fax: 800-261-1634 Eric Lawrence Frazier, MBA is a Licensed Loan Originator NMLS# 461807. This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states.

TECHNOLOGY

Technologies Helping Agents Connect with Modern-Day Consumers The days of buying or selling a home through local newspapers is long gone! In fact, the way people are buying and selling today looks much different than it did even just five years ago.

Buyers and sellers are more tech-savvy than ever, and real estate brokers are finding that fewer people want to spend valuable face time with their agents.

Given these realities, it is more important than ever for agents to be up-to-speed on new technologies, and understand how these technologies can improve their business. Below are a few of our favorites.

• Doorsteps:

This online workspace is a fantastic platform for both buyers and agents. It is ideal for an agent working with prospective buyers who are just starting to consider purchasing a home, and who may still have 12 to 18 months to go before pulling the trigger. The site guides buyers through the home buying process, allows them to search listings and provides educational resources. It provides checklists and allows for buyers to easily check in with their agent if they have questions.

Meanwhile, agents have found Doorsteps to be a valuable tool to keep track of buyer’s activity. Agents can set up custom pages and profiles, and then invite clients to join their dashboard. Doing so will provide the

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agent with the buyer’s full demographic profile, family and financial background and information about their likes, needs and wants in a property. It will log how often the buyer checks in to the workspace which provides agents with a sense of how serious a client is about home buying and their timeline for doing so. It also provides easy to use inapp messaging to allow buyers to ask agents questions about specific topics, homes, etc. and the agent can respond accordingly.

• Periscope: Often clients will want to attend

an open house but then…life gets in the way!

Similar to the video function on Snapchat, Periscope allows agents to host virtual tours, create automated listing videos and create professionally produced videos to give remote buyers a better idea of the subject property.

Listing agents have also found this to be a valuable tool by posting videos just a few minutes before an open house official begins, thereby providing a sneak peak to buyers and other agents in an effort to inspire them to attend. Viewers have access to the video for 24 hours, starting immediately after the broadcast ends and then the video disappears.

Unlike Snapchat, Periscope allows users to save their broadcasts as videos and publish them to other platforms like Facebook.

• SpeakingPhoto:

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They say a picture is

TECHNOLOGY

worth a thousand words, but sometimes words are necessary.

That’s why so many agents love SpeakingPhoto, an app that allows them to produce 30-second voiceovers of photos on their mobile device. Agents can easily explain to clients what they are seeing in the photo and can point out specific features if need be. Recordings are saved and can then be shared with clients via text or email, and can be uploaded to social media platforms like Facebook to disseminate with a broader audience. Users can compile up to eight recordings at a time to build a slideshow for a client. Premium users can invite clients to a private gallery where they can view and comment on what they’re seeing. This is a highly-effective tool that tech-savvy real estate professionals are using to highlight important information that clients may otherwise miss, and which a traditional MLS

listing may not convey.

While most agents would certainly prefer buyers and sellers meet with them face-to-face, or tour a property in person, the reality is that modern day consumers are busier than ever and are often unwilling to commit the time to do so.

Today’s most successful agents will tell you that technology is only going to continue changing the nature of the industry—either jump on the high-tech train now or you’ll be left behind in the future.

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