Jan. - March 2013
REAL ESTATE 2013:
INVESTORS JUMP BACK IN 12 EXPERT PREDICTIONS FOR 2013 • RISE OF TRULIA • 49ERS’ STADIUM Jan. - March 2013 REI VOICE
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SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
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TABLE OF CONTENTS An a lysi s
In Intimate Detail: Trulia Publisher, Geraldine Barry, asks Pete Flint about the genesis and rise of Trulia as one of the fastest growing go-to sites for real estate.
California Forecast 2013: More of the Same, but for a Black Swan
Adv i c e
Sean O’Toole, President of ForeclosureRadar. com, and REI Voice’s favorite numbers geek, shares his nuanced 2013 real estate forecast. Sunny or Stormy? You’ll have to read to find out.
B asi cs
Planning Your Business for Your Best New Year “A business plan’s value is in the process of creating it, not the plan itself,” says Tom Wilson, former hightech exec. and current real estate entrepreneur. Mr. Wilson illustrates how a solid business plan provides a road map for growth and success.
Fast, Five-Step Investment Plan
O p ini o n
Realize time is running out to get in at the bottom of the real estate market? Got a cocktail napkin left over from New Year’s Eve? Investment Broker, Jeb Henley, shows how to map out your 2013 investment plan in five quick steps.
2013: A Year of Certain Uncertainty
Jason Hartman’s Economic Predictions and Perspectives for 2013 Author and Investment Advisor, Jason Hartman, says that federal tax rates and interest rates are the two factors most likely to have a profound effect on 2013. Nevertheless, Mr. Hartman remains bullish on real estate.
Inside the 49ers Stadium Deal How the little city of Santa Clara wrested the 49ers away from namesake San Francisco and landed a world class stadium without bankrupting city coffers. Publisher Geraldine Barry dissects this really big deal.
Marketing and Mobile in 2013 Do y o u h a v e a s m a r t p h o n e o r t a b l e t (Ap ple, An d roid , or Win dows 8)? Yo u ’ v e j u s t p r o v e d A a r o n N o r r i s , social media expert , is on the right path . He explains why he’s focusing on mobile and why you should care.
Lori Greymont, CEO of Summit Assets Group, predicts another year of uncertainty…except when it comes to buying for cash-flow. Ms. Greymont maintains it’s certainly the best play in real estate.
2013 Market Predictions from Trusted Prognosticators We polled the smartest people in the local, state, and national real estate markets. For the first time in several years, the bulls out-number the bears 10 to none.
to Thrive 22 Words By: Tuigim, Ger 11 CALENDAR 21 INVESTOR RESOURCES
Jan. - March 2013 REI VOICE
PUB LIS HER’ S NOTE
REI Voice™ Magazine A publication of SJREI Association™
It’s been an exciting year at SJREI with much accomplished in terms of growth, and a renewed interest in real estate, not just locally but nationally. Opportunities abound, companies are going public at a renewed rate, and the Bay Area has been a driver for much of the job growth nationally.
Geraldine Barry Publisher, President of SJREI Association
The economic downturn provided many valuable lessons. We now understand the significance of over-leveraging, and the importance of being keenly aware of red flags in the housing market. We realize that cycles are inevitable, and large jumps in appreciation are never guaranteed. Real estate is not a get rich quick scheme, but can be used wisely, strategically, to build wealth long term. How do we make progress on that journey? Start by reviewing the enclosed predictions for 2013. This issue features opinions from economist, Alex Villacorta from Clear Capital, to market timing expert, Bruce Norris. We also include articles from several of our acclaimed speakers from Real Estate Expo Silicon Valley. As publisher, I have the opportunity to feed my fascination with entrepreneurs by interviewing some of the most successful business builders around. In this issue, you’ll find my interview with Pete Flint—the CEO of the newly public Trulia. I also spoke with one of my favorite entrepreneurial politicians, Santa Clara Mayor Jamie Matthews. Okay I’m biased, but the strategy and execution Matthews and others used to secure the new 49ers stadium (the largest commercial deal in California) is fascinating. Thank you to our SJREI community and REI Voice readers for your continuing support and trust. Our community is what differentiates us. Most of the memorable events that happen in our lives involve others. I am proud to be leading this organization. Each one of you is a valued member of our community. Thank you for your support this year. Many blessings to you and your families for a productive and successful 2013! From Ger’s Bookshelf: Suggested Reading
As you know I love books, especially non-fiction, and I routinely share insights from my latest read with our SJREI community. There is no shortage of great new books, so I put together my top 10 books for this year. If you could make one change in your life that would make it more meaningful, and make you a more interesting person to be around, simply read more!
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1. Flow: The Psychology of Optimal Experience by Mihaly Csikszentmihalyi 2. How to Build a Real Estate Empire by Marcel Arsenault, John Hamilton, Ben Leeds, & Gerald Marcil 3. Flourish: A Visionary New Understanding of Happiness and Well-being by Martin E.P. Seligman 4. Good Self, Bad Self: Transforming Your Worst Qualities into Your Biggest Assets by Judy Smith 5. Learned Optimism: How to Change Your Mind and Your Life by Martin E.P. Seligman 6. The 15 Invaluable Laws of Growth: Live Them and Reach Your Potential by John C. Maxwell 7. Drive: The Surprising Truth About What Motivates Us by Daniel Pink 8. Switch: How to Change Things When Change is Hard by Chip Heath & Dan Heath 9. The Power of Habit: Why we do what we do in life and business by Charles Duhigg 10. Good to Great: Why Some Companies Make the Leap...and Others Don’t by Jim Collins
Publisher Geraldine Barry | 408-264-3198 Geraldine@SJREI.org
Editor-in-Chief Susan Hare | 408-391-8068 Susan@REIVoice.com
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REI Voice™ is a publication of SJREI Association™ www.SJREI.org Reproduction or use of any editorial or graphic is prohibited. To request reprints or reprint rights, contact Info@REIVoice.com. REI Voice Magazine c/o SJREI Association 4309 Sayoko Circle San Jose, CA 95136 www.REIVoice.com SJREI Association and REI Voice Magazine make no representations or warranties regarding the content, accuracy, or validity of the advertisements or of the articles contained herein. All persons should exercise due diligence and consult with legal and tax professionals before making any investment decisions.
Copyright © 2013 SJREI Association. All rights reserved.
Jan. - March 2013 REI VOICE
In Intimate Detail: An Interview with Pete Flint of Trulia by Geraldine Barry
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This issue we decided to explore online territory of one of the fastest growing real estate websites. Please enjoy our interview with Pete Flint, CEO of the newly public Trulia. Ger: Describe the inspiration for Trulia. Pete: When I moved to the U.S. in 2003 from the U.K., I needed to find a place to live. I went to the Internet to try to look for information to help me in my home search. I was shocked I couldn’t find information about neighborhoods, properties, and communities I should move to. There was clearly a need for a website with information to help people like me make the right kind of decisions around housing. I vowed to start a company to help me solve that problem, which was finding the right place to live. Ger: During one of the worst economic downturns in years —where the housing market was hammered—you were able to start and establish a company, and ultimately take it public. How did you view that crisis, and how did the economy motivate or impact your progress? Pete: When you start a company in a downturn, you have to be extremely focused and efficient. We’ve always had to analyze our business and make smart decisions with limited resources. As we’ve grown, we’ve tried to keep that focus to make sure we make decisions that are right for the long-term growth of the business and for our customers. Ger: What niche does Trulia fill in the market place today and how have your services changed over the years? Pete: Trulia helps consumers find information that goes beyond just homes for sale. We’re focused on providing the inside scoop on real estate—information consumers can’t get anywhere else. Over the years, we’ve built the largest online real estate community and we continue to expand the information we provide to help consumers answer important questions like,
“How far will my commute be?” and “What is crime like in this neighborhood?” We’ve also expanded our offerings for real estate professionals, creating more tools for agents to build their brand, demonstrate their expertise and connect with the buyers, sellers and renters who are searching trulia.com for information. Recently, we’ve expanded those offerings onto mobile to help agents meet buyers and sellers on the go, as well as manage their business when they are out of the office. Ger: What three things do you attribute to Trulia being embraced in the market place? Pete: First, We are a top destination for consumers because we are delivering the inside scoop on properties, place and professionals. Second, With Trulia becoming the top real estate destination, it’s where agents and brokers want to be, and we are delivering a great ROI to them on their advertising. Third, our agent apps are delivering opportunities for agents to: • Be productive on the go • Collaborate with other agents • Market and connect with consumers Ger: How have you navigated the mobile app segment and been able to monetize that? Why is that such a growth opportunity? Pete: Mobile is still in the very early stages but it is literally transforming the real estate industry, allowing agents to be more productive when they are out in the field and empowering consumers to find properties and connect with agents on the go. We’ve gone from 3 apps to 13 apps in the last year and we’ve seen an explosion in our mobile traffic, with mobile visitors increasing 129% year-over-year. Earlier this year, we introduced mobile ads to help agents reach consum-
ers who are searching for homes on their mobile devices. This has quickly become the fastest growing part of our business as agents seek to reach buyers who looking for properties on their mobile devices and we’ll continue to focus on mobile growth for the company. Ger: Describe the subscription based component of your business model? Pete: More than 25 million consumers come to Trulia each month to look for homes. We offer free and subscription products to help real estate professionals reach transaction-ready consumers, expand their brand, and enhance their online presence. Ger: How has technology impacted the real estate business? Do you still think it is a people business? How do the two converge? Pete: Real estate is absolutely still a people business. Every day we make thousands of con nections between the buyers, sellers, and renters searching our site with real estate pro fessionals who can help them complete their transactions. Technology has made it easier for consumers to gather information they need to make their moving decisions. On Trulia, users can learn about agents, neighborhoods, schools, crime, commute times and even ask the local com munity questions about what it ’s like to live in a neighborhood. They can use this information to make educated choices about the place they want to live, and about the professionals they want to hire to help them through the home buying, selling and renting process. Ger: Do you think your ability to move quickly and identify opportunities in the market place has
contributed to your success? Pete: Absolutely, mobile is a great example. Mobile technology is evolving very quickly and we recognized that real estate is inherently mobile — consumers are using mobile to find properties when they are physically in the neighborhoods they are interested in. We’re able to quickly connect them with real estate professionals who can show them these homes. For real estate professionals, they spend a significant portion of their day out of the office. Last year, we launched the Trulia for Agents mobile app just for real estate pros to help them boost their productivity and respond to leads quickly while they are on the go. Ger: Who is indispensable to you in terms of strategy team members (not names) in being visionary? Pete: We have a very diverse staff at Trulia that is instrumental to our overall growth strategy. We’ve built a world-class senior management team, we’ve hired some of the brightest engineers, developers and designers in Silicon Valley, and we have a very talented team of industry experts who help guide our product and support decisions. This combination enables us to create world-class technology tools that benefit consumers and real estate pros. Ger: You are a husband and father - how do you create balance outside of building a company which can be all consuming? Pete: It’s definitely not easy but we’ve always tried to balance the needs of home, health and business at Trulia. Everybody needs downtime in order to operate at peak performance. Being a dad just changes how that downtime is spent, and it’s awesome.
Jan. - March 2013 REI VOICE
PLANNING YOUR BUSINESS FOR YOUR BEST NEW YEAR “WOULD YOU TELL ME WHICH WAY I OUGHT TO GO FROM HERE?” ASKED ALICE. “THAT DEPENDS A GOOD DEAL ON WHERE YOU WANT TO GET,” SAID THE CAT. “I REALLY DON’T CARE WHERE,” REPLIED ALICE. “THEN IT DOESN’T MUCH MATTER WHICH WAY YOU GO,” SAID THE CAT. —from Alice’s Adventures in Wonderland by Lewis Carroll Tom Wilson is a thirty five year real estate veteran who has executed over $100M and 1,800 units of real estate investments. After thirty years of managing some of Silicon Valley’s pioneering technology companies, Mr. Wilson put his business and management experience toward fulltime investing. One of his companies, Wilson Investment Properties, offers high quality, highcash flow, fully rehabbed and leased properties to other investors.
By Tom Wilson
e all know it would be better to decide more specifically where we want to go and how to get there, however, our day to day tasks seem to push that good idea to sometime later. Let’s use the catylist of the New Year to make that sometime be now. If you are planning or have a small business, you aren’t alone and you are very important. There are about 27 million small businesses in the US and they are responsible for over half of the GDP and 64% of all new jobs. Unfortunately about half of new businesses fail within 5 years. Better planning would have saved many of these endeavors. You don’t have to be raising venture capital for a major start up in Silicon Valley to benefit from a business plan. You probably have many great ideas that would be more likely to become realized if you thought it through and put them to paper. The most important concept is the importance of having all of the legs of the table in your plan. For example, I cannot tell you how many engineers I have encountered over the years that were angry because a company made money from their idea. They failed to grasp that a product idea will remain only an idea until it is developed, coupled, and executed with financing, management, marketing, and all of the other critical elements before it has the potential of real value and success. A business plan’s value is primarily in the process of creating it, not the end plan (except for presenting to lenders and partners). A written plan doesn’t have to be long to have value. Let’s step through the planning elements that will result in a thorough plan that is most likely to get your business off to the right start or move your current business to greater success. The Big Picture; Mission and Vision Statements. State your product or service,
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market, size, location and business approach. What will your company look like in three years? This is your elevator pitch to state what you are. Products & Services. Define your product or service in detail. What are the features and benefits that will make it unique from your competition? What are your price targets? How much volume and growth are you planning? Also state what your future products and services are. Market Analysis. Research and give an overview of your market sector. What are its characteristics and what direction is it going? What is your specific target market and demographics? Who are your competitors and what are the pros and cons of their products and business? Marketing. Describe how will you brand and advertise your business. What are your marketing and sales channels? What promotions and incentives will you give to your customers and partners? Strategy. State the strengths and weaknesses of your products and/or services and your company. If you need to develop your product or service how will you do that? Describe the business opportunity that you will capitalize on and your market positioning. Define your biggest threats and how you will defend against them. State your business exit options. Operations. Give the details for your organization structure, legal entity, key personnel, partners, equipment and facilities. Detail how you will manage the production and processing of the business. Give a timeline and the human and material resources needed to execute your start-up and growth. Financials. Now it is time to get quantitative. State your precise sales, profit and cash flow objectives over time. Define your financing and capital requirements and what your metrics will be, that is, your accounting methods and tools, and your measurements
of performance. And lastly, create financial scenarios for the best case, worst case, and likely plans and how you will address each if they occur. Now is the time to prepare for variations from the goal, not when you are emotionally in the hot seat. Tom’s Top Ten Tips for Building a Better Business 1. Write your business plan for a lay person, not a specialist in your industry. Keep it simple. Never outsource your business plan. 2. Create a Board of Directors. It doesn’t have to be formal. Utilize mentors, peers, and friends. 3. Secure employees, partners, and resources with direct experience in your area of business, even if they have had failures. 4. Use focus groups to test ideas (get some friends together for a focus party). 5. More businesses fail for negative cash flow than for lack of profit. Manage cash flow and capital very carefully. 6. Most financial goals take twice as long and use twice as much capital as forecasted. Plan for the potential. 7. Passion, persistence, and hard work = over half of success. 8. Be Persistence: Many successful Silicon Valley high-tech companies took a long time to get financing and partners to believe in them. 9. Talk to Your Competition! You’d be amazed at what ego will prompt your competitors to tell you. Start off with a compliment and share something about your business. Sharing information is usually a win-win. 10. Keep honing your business. You don’t have to do it all yourself: network, use mastermind groups, and delegate. Contact Tom Wilson at 408-867-1867 firstname.lastname@example.org
SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
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Inside the 49ers Stadium Deal By Geraldine Barry Santa Clara, a small city located between San Jose, the 10th largest city in the country, and Sunnyvale a dominant force in the Silicon Valley tech comGeraldine munity, fought to claim Barry its space as something Publisher, more than a bit player in President the very competitive enviof SJREI ronment of major league Association sports. A home stadium for the San Francisco 49ers was hanging in the balance. When an opportunity presented itself Santa Clara city leaders quietly, strategically pulled together a plan to outsmart the bigger, better, richer, infinitely more prestigious City of San
Francisco. This is the story of how the little guy prevailed, and was completely underestimated in the process, pulling off a coup! One clear fall day in 2006, Patricia Mahan, former mayor of Santa Clara, Councilmember Kevin Moore and a group of civic leaders met with decision makers from the San Francisco 49er’s for a trip on the Sky Tower Ride at the Great America Theme Park. At stake was the perspective home of the championship team. In 2006, the future of the San Francisco 49er’s remained uncertain. The only certainty was that the team needed out of the cold, old, and ill-equipped Candlestick park. The 49er’s organization had struggled for 10 years with the City of San Francisco to locate a site for a new stadium. The city’s only suggestion was
the “historically blighted” Hunters Point, which the 49ers never considered a viable option. The site required significant toxic cleanup, and was surrounded by incompatible development. The 49ers were looking for alternatives when the Santa Clara City Council, said, “Come check us out.” An amusement park might not be the first place that comes to mind as a location for hammering out a multi-million dollar deal. However, the City believed that once the 49ers bought into their vision, clearly visible from that perspective, everything else would fall into place. Up on the nearly 200 foot high Sky Tower Ride they went. The heart of Silicon Valley spread out before them. To the east was a vacant parcel large enough to accommodate a new stadium and the auxiliary
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businesses it would require. To the south and west, over two million people, many already 49er fans, hungered for a local team. From their bird’s-eye-view, they saw major freeways and a light rail system ready to accommodate lots of traffic. They could visualize parking for the potential 70,000 vehicles required to host a Super Bowl, easily assessable to the proposed stadium site. Most important, they discovered that they shared Santa Clara’s results-oriented attitude. The willingness to do whatever it took to bring the 49ers to Santa Clara enticed all concerned. So began the journey to the 49ers new home, an endeavor that is jaw-dropping in magnitude. The vision established on the Sky Ride was put before the voters, Measure J, a measure once passed allowed the City of Santa Clara to lease land to a newly established entity the Stadium Authority. This entity was tasked with constructing a new football stadium where the 49ers would be the primary tenant. This private/public entity was formed to ensure that in a worst-case scenario, the entity would take the financial hit, not the city or taxpayers. The City of Santa Clara enjoys a high level of public trust that city leaders have diligently cultivated over the years - a relationship that ensured that Santa Clara voters approved Measure J easily. This successful outcome was strategically accomplished through hundreds of meetings from living rooms to town hall settings with all key players participating - John & Jeff York from the 49ers, city leaders and council members including current Santa Clara Mayor Jamie Matthews. The message they shared was how this project benefited, not only one city, but the region as a whole, and the community embraced that vision; thereby was approved through Measure J the 49ers plan to build a $937 million stadium in their city. Let the work begin. The stadium site, which had long been vacant - its primary use a shooting range for local law enforcement is now a bee hive of activity.
A deal was hammered out, between both parties, agreeing that local labor be used exclusively for the project. Thus ensuring the highest quality labor force ahead of all the other large, local projects on the horizon such as the Apple Spaceship and Bart. “By entering into labor contracts with the Stadium Authority we locked up high quality labor, and ensured no work stoppages providing both sides (labor & 49ers) the security that helps garner high performance and commitment.” Mayor Matthews said. Builders Turner/Devon were given an incentive by the Stadium Authority of $5 million dollar for meeting the opening deadline, and fines reaching as high as $ 20 million for missing the mark. The stadium when completed is set to be the greenest, most sustainable stadium ever built in the U.S, featuring solar panels, green roofs, and sustainable renewable materials. One hundred per cent American steel is being used on the project. “We re-opened several steel mills so the steel could be milled on U.S. soil, and we hit our goal of one hundred per cent U.S. manufacturing,” Matthews said. “Five of the largest cranes in the world outside of Dubai were brought in simplify the process of handling the steel, ensuring that it was not double handled, and could be set in place directly upon delivery to the site.” How is the project coming along? It is 20% complete on track and on budget to hit its original schedule - opening season 2014. Another bright spot is that the stadium, even as it is under-construction, is a contender to host the Super Bowl 2016. The collaborative nature that permeated the relationships in securing the stadium deal is again evident in the partnership Santa Clara forged with the city of San Francisco. A Super Bowl would benefit a region, not just a city, so in order to maximize the opportunity and work toward another successful outcome both cities are working together to make that a reality. “The economic activity generated by
a single Super Bowl game exceeds other major professional sport championships, including a 7 game world series. In most years, both Super Bowl teams come from somewhere else so virtually everyone attending the game is a visitor. This is much better for hotels and restaurants.” County Assessor, Larry Stone said. “Since the game is played in Santa Clara, that city will receive major economic activity and benefit. My guess is every hotel room from San Francisco to San Jose will be booked solid. The Super Bowl may be just one game, but the events and festivities go on for almost a week. While we would all love to see the 49ers play in the Super Bowl here in 2016 or 2017, the chances are not that great. The NFL and local businesses particularly hotels, restaurants and tourist attractions don’t want that to happen either.” This is a win for the whole region - no metropolitan area is complete without a major league team, so why not the worldrenowned Silicon Valley? What an outcome from a Sky ride at Great America to a new stadium, and potentially hosting a Super Bowl. “We believed from the beginning this could become a reality despite several roadblocks. Securing the 49er stadium in Santa Clara, took teamwork, coordination, and focus. It is a great story in terms of collaboration between multiple parties, and a clear vision of how that empty parking lot could become a site for a stadium that beautifully, and naturally fit into this community. No one person, or group, can claim responsibility for this OUTCOME. It truly required a sustained effort and courage of an entire community and its leadership – it was the greatest of team efforts.” Matthews said. No one could have predicted this triumphant outcome when the talks began - in 2014, this stadium will be a reality. The City of Santa Clara and its council members did indeed pull off a coup!
Contact Geraldine Barry at 408264-3198 or Geraldine@SJREI.org
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Jan. - March 2013 REI VOICE
2013 MARKET PREDICTIONS Trusted trend followers share their views on the local, state, and national real estate market
Geraldine Barry, President, SJREI Association
2012 was the year Silicon Valley, and the Bay Area, started to lead the national economic recovery. It has been an eventful year with foreclosures rates falling rapidly, appraisals coming in short, cash buyers emerging in droves, and inventory shortages driving prices upward. “Is now a good time to buy real estate?” is the question most asked of me as President of SJREI Association. With inflation on the horizon, interest rates at historic lows, affordability rates at all-time highs, and home prices still well below replacement values in most areas, how can one go wrong? I have the pleasure of hosting many real estate experts each year as guest speakers at our association and as publisher of REI Voice Magazine, I asked these trend followers for their predictions on the local, state, and national real estate market for 2013.
Nanci Klein, Deputy Director of the Office of Economic Development, City of San Jose In Brief: San Jose is an excellent choice for residential and commercial investment
Working in the City of San Jose I have the privilege of assisting many developers, brokers, tenants and bankers. The majority of these investors see continued positive growth over the next six months. Overall national growth will be limited, but the tech savvy companies in Silicon Valley will out-perform the national standard. The Technology sector induces growth in a wide variety of related industries and as a result the Silicon Valley tide will continue to rise. Many point to greater liquidity, banks are lending more to tech companies and small business of all types. Some experts are more cautious, pointing to growing concerns regarding tightening pension funds. In the City of San Jose specifically, the Census Bureau has identified San Jose as the City with the lowest vacancy rate in the nation as a result the residential market remains strong in San Jose. The relatively strong job market and pent-up demand for housing continues to drive a strong multifamily housing market. Single-family homes are appreciating in most of San Jose’s neighborhoods. On the broader development front, more than $1B in investments in industrial, office R&D, retail and housing projects are moving through the pipeline here in San Jose. Examples of development include: Samsung’s North American R&D headquarters, Ellis 600,000 square feet of office R&D, Hitachi retail at 400,000 square feet. The Brookings Institute’s
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recent study on manufacturing, found San Jose to have the greatest cluster of advanced manufacturing in the nation, innovation and new product introduction remain key to driving innovation to commercialization. San Jose has land yet to develop and lower cost real estate. We are the most diverse city in the nation and the talent here is unparalleled. San Jose continues to be an excellent choice for investment.
Larry Stone, County Assessor of Santa Clara In Brief: Silicon Valley real estate remains strong.
It is an unpredictable endeavor to ask the Assessor to predict the future, and for a good reason. The Assessor is the sole elected official responsible for determining the assessed value of all real and business property based upon actual transactions that occur in the marketplace. The Assessor’s job is to follow the market, not make the market. So while I do not make predictions, I do follow market trends closely—something I have done for 40 years in the real estate investment and development business. The Bay Area is experiencing a robust but still fragile recovery, led in large part by the success of the hightechnology sector. Silicon Valley’s recovery was triggered, in part, by a hot IPO market with an average of one new
IPO every day. This infusion of capital triggered a strong demand for office and R&D space and apartments, combined with a rapid decline in Silicon Valley unemployment. The Bay Area accounted for over half of California’s job growth, and a startling 20% of job gains in the entire nation during a three-month period last summer. Growth, however, was tempered by a sluggish residential housing market well behind the “hot” commercial sector. Fifty-three percent of all condominiums and 27 percent of all single family homes are currently assessed below their original purchase price. In 2013, the Silicon Valley commercial market is unlikely to sustain the same rate of growth that it experienced in 2011 and 2012, especially if the third quarter of 2012 is any indication. There has been a dramatic decline in IPOs, with less than one offering every 67 days. While Silicon Valley’s “heat wave” may have broken, plenty of warm days lay ahead…certainly good weather for investing in Silicon Valley real estate.
Anna Maria Valenzula, President, Santa Clara Valley Women’s Council of Realtors In Brief: In Silicon Valley, more motivated traditional sellers , alleviated underwater homeowners ,
FROM OUR TRUSTED PROGNOSTICATORS
and additional inventory in the marketplace.
As we enter 2013 we will continue to see an overall optimistic and upward trend for most real estate markets, especially Silicon Valley. Prices will continue to rise, due to the supply and demand theory, and interest rates most likely will hold steady. In fact, we may even see them come down a little more, which would continue to make buying a home a very solid investment for first-time buyers, move-up buyers, and investors. The top 3 things to keep an eye out for in 2013: Move-up Buyers. Current homeowners with equity looking to move-up, and maybe even lower their mortgage payments by doing so, because of the low interest rates. With the stability of the market that we are seeing, many current homeowners may be willing to take that leap. Short Sale Relief. With some of the recent HAFA changes which allow homeowners to sell their upsidedown home without having to miss payments and many lenders now reporting to credit agencies “PAID AS AGREED—PAID IN FULL”, many home-owners who wanted to sell but did not want to damage their credit may see the light and decide the window of opportunity has opened up for them. Interest Rates. Can they get any lower? If so, or even if they stay close to where they are today, watch out because as more homes come on the market, more buyers will be in line waiting to buy, this includes home sellers who will be ready to move up or move down.
Investor Market. This important segment will continue to be prominent in Silicon Valley.
Bruce Norris, President, The Norris Group In Brief: Significant price inflation in California.
What will December 2013 look like for California real estate? My best guess is that California will have significant price inflation. Prices could escalate so strongly that we will think we are in 2004 instead of 2013. The question is why? There are three basic reasons. Policy decisions have made for record low inventory levels. In many areas, there’s one month of inventory. Inside of that one month of inventory are very few REOs and a lot of short sales that may or may not really be available to buy and close anytime soon. The properties that would normally be purchased by owner occupants are being snapped up by billion-dollar hedge funds. These hedge funds, unlike the smaller investor types are keeping all of the properties as rentals. There’s a little inventory for sale by “normal sellers with equity,” but, right on cue they are getting the idea their property just might be worth more than the last sale. With the absence of inventory, prices will escalate. The return of the former-owner foreclosed on in 2008 and 2009. The numbers of trustee sales in those years were staggering. As a percentage of
whatever had happened in the past, 2008 and 2009 will go down in history as the California Real Estate Collapse of all time. The numbers differ across the state but the percentages are similar. In San Bernardino, the numbers of forecloses exceeded the number of sales in 2008 and 2009. Fast forward to 2012 and you now have those same people ready and capable of buying a home again. FHA will make a loan to a buyer who lost their home via foreclosure after three years. The buyers have become aware that their house payment would be less than their rent. Interest rates being at all-time lows allow for price increases to happen at minimal monthly cost. Get ready for California’s median price to go up 20% in California in 2013.
Adiel Gorel, President & CEO of ICG Real Estate Investments In Brief: Massive hedge funds scrambling for houses, extremely low interest rates, and shrinking inventories
The most compelling states for 2013 are Florida, Nevada, Arizona and California. There are enough expert opinions in this publication about California so I will zero in the other three states. Arizona, and especially the Phoenix area, has been booming. In the past year home prices have gone up as much as 30% in some areas, according to the WP Carey School of Business at ASU. The Phoenix area has also added 55,700 non-farm jobs
between July 2011 and July 2012. It is now ranked 4th in the nation for job growth. Hedge funds have entered real estate markets with billions to spend. The massive demand, coupled with declining foreclosure numbers, have created price appreciation in many markets. In Florida, the Orlando area has seen appreciation of about 15% in the past year, and in Tampa, Blackstone has entered the SFH market armed with $1B dedicated the to Tampa market alone. Jacksonville is showing a modest upswing of about 10% for the past year, with more strength looming as shipping traffic increases in 2014 from the enlarged Panama Canal (the anticipation alone is already creating economic development). Las Vegas, Nevada, is experiencing acute shortages in the good residential areas due to similar supply-demand pressures. Inventory in all these metro areas is at a 4-year low and sometimes is just a couple of months’ worth. 2013 promises to continue the trend: massive hedge funds scrambling for houses, extremely low interest rates, and shrinking inventories. My prediction for 2013 for these three states is continued price appreciation and inventory shortages. Longer term we will no doubt see strong inflation and perhaps a secondary recession due to the overall economy, but the next year promises to be strong in these markets. Since there is still a possibility to buy well under bare construction costs in most of these markets, investors should take advantage sooner rather than later.
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Alex Villacorta, Ph.D., Director, Research and Analytics, Clear Capital In Brief: Continued recovery and plentiful opportunity
The backdrop heading into 2013 is solid. Yearly price gains of 4.6% through November 2012 have been fueled by strong housing fundamentals. We expect the recovery to continue to unfold into 2013, and forecast national home price growth of 2.6% for the year. The good news is, it’s no longer a question of whether or not housing has turned the corner, but rather which market will be the next Phoenix. The First-in First-out recovery, as seen in Phoenix and covered in many of our past HDI Market Reports, will continue to drive gains in 2013. Hard hit markets primed for a breakout will likely see improvements in REO saturation as a precursor. REO saturation in Phoenix is now down to just 20.0%, a major improvement over 2009 when more than one in two homes sold as an REO. Sizable discounts in this hard hit market also played a role, given that the REO-to-rental investment class re-
ally got the ball rolling. Early growth, falling REO saturation, and notable discounts are keys to recovery. Of the metros slated to see the strongest growth in 2013, Sacramento and Las Vegas stand out as having strong potential to be the next Phoenix. Yet peripheral risks are in no short supply. Uncertainty in congress could set housing back. Looking abroad, Europe’s continued turmoil could also shake the market. If we get past these challenges unscathed, phase two of the recovery will rely on non-investor homebuyers jumping back into the game. The next phase of the recovery hinges on the strength of the middle class. We’ll need to ultimately see unemployment fall and stagnant wages rise before housing’s sprint turns into a marathon.
John Wilhoit, Author, Multifamily Owner, and Asset Manager In Brief: Get Apartment, keep apartment. No small task.
In early 2012, Marcus & Millichap Research Service stated the
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following in The Outlook National Apartment Index, “Beyond 2012, supply will become a more serious concern for some... markets.” The housing shortage is already underway and most acutely in multifamily. New construction housing starts have hovered around 600,000 each year for several years. Just to keep pace with nominal population growth, the U.S. needs over 1,000,000 new homes built each year. Multiply this construction shortfall by five years and the gap begins to become obvious. From Des Moines to Detroit vacancy rates are less than five percent. Supply is simply so far below the mountain of financial and demographic forces that shortages are occurring now. Financial. Although mortgage rates are at historic lows few people can qualify for a new home loan. This fact keeps potential new home owners as renters longer. And while multifamily construction starts have jumped from 40,000 in 2011 to over 100,000 in 2012 it is not enough to offset current and pending demand. Still,
only top shelf general contractors and owners can garner construction loans. This leaves the vast majority of mid-tier builders on the sidelines able to start construction on only a fraction of their former capacity. Demographics. The slightest uptick in GDP (Gross Domestic Product) positively affects household formation. And while the big news is that the birth rate in the U.S. has dropped we continue to grow our population from in-migration. Bottom line is that renters will pay more in rent and have fewer choices when looking. If you are a renter consider negotiating a two-year lease. If you are an apartment owner track renewals closely to implement timely rental increases.
Kathy Fettke, CEO, Real Wealth Network In Brief: More exciting commercial deals, lucrative notes from hedge funds.
One of my business partners
walked into a national bank’s REO commercial division last month to help them liquidate properties. Instead of the orderly offices he had visited in 2006, he found rooms stacked with boxes. As he looked through them for opportunities, he found fully-entitled commercial land outside of Tampa that sold for $6.5M in 2008. He asked what they would take for it, and the asset manager shrugged. “$500,000?” He made an offer for $370,000, which they accepted. At Real Wealth Network, we expect to see more exciting commercial deals in 2013 as banks begin to unload properties that they don’t know what to do with. Real estate investors who do know will benefit tremendously. It seems banks have figured out what to do with single-family homes. They’ve been selling in bulk to hedge funds who will take almost anything with a 6% cap rate. As a result, REO inventories have shrunk to about half of what they were. Prices will likely continue to rise as buyers compete over the limited inventory left behind. Banks are also dumping non-performing notes to hedge funds for pennies on the dollar, giving them the job of
either modifying the loans or foreclosing. Buying those notes from the hedge funds could be extremely lucrative, which is one of the strategies we will be focusing on at Real Wealth Network in 2013. If the hedge funds get tired of real estate and move on to another asset classes, we could see another glut in the housing market as they dump their holdings. But there seems to be a big enough appetite from first-time home buyers, domestic and foreign investors to gobble it up. All in all, it should be another exciting and profitable year!
Lamarr Baxter, Account Manager, Accuplan Benefits Services In Brief: Negotiations over mortgage interest deduction have potential to tank real estate market.
Despite other areas of the economy lagging from the 2008 economic downturn, real estate in most regions of the U.S. is making a strong comeback. Property values and rents are rising. Bank REO inventories are down to 2007-2008 levels. In
some parts of the U.S., inventory for investors are very scarce. As a result of the robo-signing litigation settlement, banks have been moving full speed ahead on foreclosures. In addition, banks are moving inventory in bulk in the form of REO’s and Defaulted Mortgages to large investment groups and hedge funds. One of the reasons many say prices are rising so quickly is due to the acquisition of bulk portfolios from lenders by the hedge funds. Due to the limited inventory, some smaller investors are forced to pay close to market value or have been eliminated from the industry due to their inability to compete. New threats to the housing market may yet come out of Washington, D. C. The negotiations for a balanced budget plan are likely to include the reduction or elimination of the mortgage interest deduction. If this occurs, it will deal a directed blow to the housing recovery. Part of the reason many people remain in their homes with underwater mortgages is due to the fact that they can write off a portion of the mortgage interest. Taking away such a benefit may have many walking away from their homes in droves, thus tanking the house market again.
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Stephan Piscano, CEO, ListedBy.com In Brief: 2013 could be your last opportunity to realize huge returns on investment properties.
We started telling all of our partners, clients and investors at the end of 2011, that 2012 would be the last opportunity to see deals like we had been seeing for the last 3 years, and I personally told all those close to me that we would look back at 2012 and ask, “How much did we capitalize on it?” I believe that Interest rates remaining low, combined with lack of inventory, combined with the potential for rapid inflation will cause the market to continue to rise in 2013 and beyond. There will still be exceptional investment opportunities. It will be several years before the market is fully recovered but this year could be your last opportunity for a while to capitalize on the unreal 23% ROI type of investment properties for a while. Investors will start seeing more types of real estate investments take place such as owner-carry-financing, due to the millions of Americans that have damaged credit but still may have solid income or in some cases even be multi-millionaires who are tired of buying everything cash and want leverage. ■
ATLANTA Projected ROI 33% Cash Flow $2,456
DALLAS Projected ROI 35% Cash Flow $5,294
MEMPHIS Projected ROI 29% Cash Flow $3,101 Jan. - March 2013 REI VOICE
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2013: WHAT DOES THE FUTURE HOLD? By Lori Greymont
Lori Greymont is CEO of Summit Assets Group. She offers educational presentations around the U.S., trains and mentors people new to purchasing distressed assets and coaches on creative financing techniques. Her company sells single Turnkey Cash Flow Investment properties.
Painfully slow economic recovery. Shadow Inventory. Natural disasters like Hurricane Sandy. Fiscal Cliff. What does 2013 hold? More of the same—certain uncertainty! While we don’t know all that will happen in 2013, reviewing where things stood at the end of 2012 will give us some good insights to use for making wise decisions. We know that home prices reached the bottom during first quarter of 2012 and that prices have increased about 5% since then. As with any market, you can only call the bottom when you look back at it. Barclays predicts prices will increase another 4% in 2013. Not only are prices going up, so is sales volume. Approximately 4.5 million homes were sold in 2012, still off from the historic high of 7 million homes, but up significantly from 2011. So, the trend lines for real estate are moving in the right direction. We know that it has been several years since builders added new inventory to meet the demand. REO inventory has been slow to be released because banks are just now working on the foreclosures after the foreclosure moratorium ended. The foreclosure process will be slow and backed up for many months to come. There won’t be a glut of inventory hitting the street as some people fear. We know that hedge funds are in the market buying houses for the cash flow. They plan to securitize the rents— sound familiar? In most markets of the U.S., homes can still be purchased for less than the cost to rebuild, which means we are far from a bubble. We also know that with low interest rates and low pricing, we are at historic rates of affordability. All of these factors indicate that we are in a recovery. But, the recovery will be a jagged see-saw recovery. Historically, investing in real estate has been both the safest and most profitable investment. Some people will argue that after the recent turmoil, real estate investing is neither safe nor profitable. I don’t agree. First, let’s take real estate speculation off the table (that is, buying
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for rapid appreciation). This discussion is about real estate investing. That is, buying properties based on the fundamentals. Second, while the “price” of houses has dropped, the value of owning property has not. Consider this example: Let’s say I purchased a house five years ago for $100,000, all cash. I then rented the house for $1,100/ month. Basically, I have an asset that is creating a monthly dividend. This dividend payout is not based on the price of the home, but on the agreement with the person living there. However, if that same $100,000 was invested in a stock that lost 25% of its value, my dividend (if any) would also be adjusted downward. Back to the house: if comps start selling for $75,000, then in a sense, my house is worth less then when I purchased it. Even if its estimated price dropped to $0, as long as I didn’t sell, I wouldn’t lose. The true value of the house is its ability to generate cash flow regardless and separate from its potential selling price. Price is what you pay, but value is what you get. Lastly, until we see banks loosen their lending practices and prices return to the
cost to build, we really won’t see much of an economic recovery. When builders start building enough homes to meet demand, we will see the job creation needed to create a job-led economic recovery. Many people feel that we are experiencing an investor-led housing recovery because small and large investors are out buying everything they can. But actually, we have an inventory-led recovery. What I mean is that the banks are releasing an amount of homes that meets the demand of the market place. This is causing the market to see price increases. Whether planned or accidental, the banks actually deserve some credit for the growth we are seeing. My advice for wise investing in 2013 is to determine if adding cash flow properties to your portfolio fits your investment goals. If it does, then do your research. Determine what markets you want to buy in and decide if you want to do the whole purchase-rehab-rent process yourself, or if you want to work a professional firm that creates turnkey investments. Turnkey purveyors know how to find quality properties in good neighborhoods, that when properly rehabbed, create desirable rentals. There is a science and art to this process. But, you can do it yourself if you have the time, education and skill to pull all the key players together. You should be buying properties that will return 1-2% of monthly rent to purchase price. For example if you can get $800/ month in rent, then you should pay no more than $80,000 (less rehab costs) for the property. Before you select a turnkey purveyor, interview them, seek references and make sure they have years of real estate investing experience. I always say if a person doesn’t have a “loss” story, they haven’t been investing long enough. So, ask them what has worked and what hasn’t. Then, make a plan to take action either with a turnkey purveyor or on your own. Without the action, your goal will quickly become a missed opportunity to invest at the bottom of the market. Contact Lori Greymont at 888-298-0652 or Lori@SummitAssetsGroup.com
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ECONOMIC PREDICTIONS & PERSPECTIVES FOR 2013 There are two imminent factors that will have a profound effect on 2013, depending on how they are addressed by the administration and congress. These two key factors are the federal tax rates and interest rates, not to mention monetary policy (read inflation). The way in which these problems are addressed (or not addressed, as the case may be) will have dramatic repercussions in 2013 and beyond.
debt against “packaged commodities” (income properties) has historically been one of the best hedges against inflation, since the loan, which is effectively “outsourced” to a tenant, is paid back with dollars that are perpetually de-valued by inflation. I coined the phase “inflation induced debt destruction” to explain this. It can be especially powerful for investors who purchase income properties since the rent revenues will be pushed up by inflation while their mortgage payment remains fixed.
Federal Tax Rates
Impact to Income Properties
The Bush era tax policy is set to expire in the beginning of 2013, which will increase ordinary income taxes, social security taxes, dividends and capital gains taxes. In addition to this, there are new health care taxes being added that will increase the tax burden of high-income producers even further. This adds up to a reduction in the net proceeds from producing and investing because of higher taxation. Capital formation, economic production and investment are the primary drivers of sustained growth, so it is highly likely that the economy will fall back into recession if the currently scheduled tax increases occur at the beginning of 2013. The current balance of power in Washington all but guarantees that tax rates will increase in one manner or another in 2013. This will have the effect of constraining growth by reducing the rate of return that is earned by investors and entrepreneurs through increased taxation.
The current political and economic environment is most certainly disappointing to many entrepreneurs and businesspeople. The prospect of reduced economic growth, less affluence (more renters), and higher inflation (commodity price increases and debt destruction) are not particularly appealing to people who are trying to run a business. However, the current situation is also the “Mother of all Opportunities” for income property investors. The combination of suppressed prices from reduced affluence, historically low interest rates, future inflation, and an increasing population of renters from foreclosure and Gen Y creates an opportunity of epic proportions. By locking-in today’s low interest rates on quality income properties, in diverse markets, the impending wave of future renters will serve to propel investors toward wealth and affluence. The reality is that income property may be one of the few remaining avenues to create wealth that is accessible to average citizens. Achieving wealth through the financial markets or through business ventures frequently requires knowledge, untold dedication and large amounts of capital. On balance, the prospects for 2013 are growing increasingly dim for many people in the general population, but remain bright for those with the willingness to take intelligent, informed action and acquire housing assets that have universal need.
By Jason Hartman
Jason Hartman is the creator of “The Complete Solution for Real Estate Investors.” He has helped thousands of people acquire wealth creating real estate for over 20 years. Mr. Hartman has authored 11 books and hosts one of the most popular investing podcasts, The Creating Wealth Show, with nearly 300 episodes where he and celebrity thoughtleaders provide unique insights and opportunities .
The current era of historically low interest rates is being perpetuated by the Federal Reserve in an attempt to bolster the economy through easier lending. The recent trend of “quantitative easing” is expected to continue into the foreseeable future. Since politicians will not want to spark another recession, it is likely that the artificially low rates will continue for as long as the scheme can be sustained. This will ultimately drive increased, sustained inflation. The advantage to investors is the opportunity to lock-in historically low interest rates on borrowed capital. Long-term fixed
Contact Jason Hartman at www.JasonHartman.com or call 714-820-4200
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CALIFORNIA FORECAST 2013:
More of the Same, but for a Black Swan By Sean O’Toole
Sean O’Toole is Founder & CEO of ForeclosureRadar. com, the only company that tracks every foreclosure in California with daily updates on all foreclosure auctions. Prior to ForeclosureRadar Mr. O’Toole spent 15 years building and launching software companies before entering the foreclosure business in 2002 where he has successfully bought and sold more than 150 foreclosure properties.
For 2013, we largely expect the continuation of a housing recovery in California, with solid sales volumes and price increases throughout much of the state. Demand will remain strong thanks to low interest rates and affordability. Housing supply will remain constrained, largely due to foreclosure intervention. Prices will rise, though likely at a slower pace. But unlike 2012, we expect sales volume will decline due to further decreases in supply. Demand will remain relatively strong, despite structural issues. The Federal Reserve is clearly committed to monetary-stimulus programs that will keep mortgage interest rates at or near record lows. Low interest rates have and will continue to positively impact demand. In many parts of California, rents remain higher than payments, despite recent price increases, making housing attractive both to buyers and investors. This positive impact on demand may be offset by further price increases. Supply will remain tight, with the inventory of homes for sale at record lows. Government intervention will continue to play a huge role in the foreclosure market. The National Mortgage Settlement Program, the Home Affordable Modification Program (HAMP), and the California Homeowner Bill of Rights legislation that goes into effect on January 1, 2013, will all continue to put downward pressure on foreclosures and foreclosure inventory. Foreclosures have been a significant source of supply since 2008, and these continued declines will hurt sales volume in 2013, likely dropping foreclosure supply to half the level seen in 2012. Similar to the impact on demand, the hunkering down of homeowners with equity, and the inability of underwater homeowners to sell, except through short sale, will negatively impact supply. Housing prices will rise, but increases will be constrained. Continued demand, combined with the continued constraint of supply, should result in prices continuing
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to rise throughout 2013, though likely more moderately than in 2012. The risk of a black swan event should not be overlooked. The term “black swan” comes from the book Fooled by Randomness by Nassim Taleb. The idea is that rare, unexpected, events are actually the norm, and should be expected. Today we face a number of risks that no one, including us, expects will happen. We summarize some of these here because we believe Mr. Taleb is right, and we should always prepare for the unexpected. The U. S. economy will remain tough, regardless of the outcome of debt reduction negotiations in congress; and much of the current political posturing is less about any real attempt to resolve the issue, and more about making sure the other party takes the blame for what’s ahead. The Middle East continues to be highly volatile. A crisis there could send fuel prices skyrocketing; and any U.S. involvement would also result in new spending and debt
that the country can little afford. Resulting impacts to the economy, and possibly interest rates, would not be favorable to housing. The Eurozone debt crisis continues to make headlines. In this interconnected world, it would be unwise to think that further problems there could not impact us here. Despite the risks, government intervention, higher taxes, and the other issues that keep us up at night, we remain relatively bullish on the housing market for 2013. We have little doubt that fewer people will be underwater by the end of the year, and that housing will have proven a relatively safer investment than entrusting your money elsewhere. And no, there will still not be a wave of foreclosures. Contact Sean O’Toole at ForeclosureRadar.com Editors Note: The complete version of Mr. O’Toole’s article can be found on-line at REIVoice.com.
FAST STEP INVESTMENT PLAN By Jeb Henley
Jeb Henley is a Real Estate Broker and investor with over 35 years’ experience with both residential and commercial properties. Mr. Henley has been investing, selling and exchanging real estate since 1975 in both California and across the United States. As a Broker, Mr. Henley works with strategic partners and affiliates to locate solid real estate values for his investor clients.
A year ago I said “Act Now.” The good news is you can still invest in Real Estate, at GREAT prices. Here are 5 Action Steps to take for success in 2013! 1. Listen to Geraldine Barry, who says: “Write out your goals!” Decide “WHAT” you want your portfolio to look like; Cash Flow, Appreciation, Residential, and/or Commercial. Decide and write it down. 2. Decide “WHERE” you want to invest: California, Arizona or Texas. One suggestion is to keep property management simple by selecting easy access locations that offer direct flights. Single location property management portfolios are easier to run. 3. Decide “WHEN” and act on your plan. If you want to buy in January, get your due diligence done in December and be ready to act! All markets have limited inventory, which does NOT mean good value. It’s important to get your research done early. 4. “HOW” Should you buy? This will be a personal decision. All cash is best—if you have a lot of cash. My suggestion is to get loans now. The rates are low and a 30% down payment is a safe loan to value ratio. 5. “HOW MANY” to buy? If you have five houses, the rental income from four houses will cover one vacancy cost per month. Try to assemble five houses or condo groups in strong markets. If you have five houses in one city you can fly there once a year and visit the management. Make sure it is a city you want to visit. Contact Jeb Henley at 831-419-4200 email@example.com
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Marketing and Mobile in 2013 By Aaron Norris Just as soon as we marketing nerds think we’ve finally completed all the necessary optimizing and planning and mastered all the communication channels we need, out rolls the next greatest gadget or software. Then, it’s back to the drawing board for more testing, tweaking, and torture. I’m forecasting lots of testing and tweaking in 2013 for mobile, but hope this article helps relieve the torture for you. First, 2012 was the year that Realtors discovered and ruined Facebook. If they haven’t ruined it for you yet, don’t worry, in 2013 they’ll burn out on Facebook and ruin LinkedIn. Before I get any nasty letters, I’m partly teasing. I continue to be invited to meaningless groups, tagged in ridiculous pictures, and friended by individuals who have no intent to add value to my life. They are all conveniently blocked, black listed, and ignored. However, it still surprises me to see people completely unaware of the HARM social media can do when treated like direct mail or newspaper ads. It’s push, push, push and there’s so much missed opportunity to pull in a potential customer or business opportunity. Enough venting! In 2013, I’m going to work on mobile. Yes, the mobile issue isn’t a new one but cost has come down enough to make a strategic move
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into the space and we continue to see increased levels of mobile visitors. Remember, especially for beginners, when it comes to social media tools, your content created on these sites is already mobile friendly (there’s an app for that). If you’re flying solo with no one to help you with social media or marketing, take a good look at your target audience, decide what you want to accomplish, decide how you want your relationship with your audience to change, and finally, select the most appropriate social media channel to reach that group. It’s the old P.O.S.T. method (people, objectives, strategy, and technology). For individuals taking it to the next level, you can no longer ignore mobile if you’re email marketing and/or strategically driving people to your website(s). Nielsen reported in March that 50% of all mobile phones in the U.S. are now smart phones. A Return Path statistic reports that 88% of those users check email on their mobile devices daily. Long gone are the days of just yapping it up with grandma on the phone. We’re now checking email, scheduling our lives, ordering tickets, price checking, texting, and checking out real estate for sale near us. We also point at and laugh at those who still use clamshell or bar phones. Unfortunately, smart phones aren’t the only mobile technology issue. PEW
Research released its numbers in October saying tablets continue to grow in popularity, landing in the hands of 18% of U.S. adults (up from 11% in 2011). For those of us heavily into web marketing, that means we have to mindfully optimize the user experience for both the tablet and the smart phone. Developing these “breaking points” in web design can get expensive. I would only suggest going down this road if you are heavily engaged in online marketing and your analytics point to a decent mobile audience already landing on your site. As far as email marketing for smart phone and tablets, many of the most popular email services like Mail Chimp and Constant Contact offer great mobile-optimized templates that are fairly plug and play. If you want to be fancy, it isn’t too hard to find a designer on sites like odesk.com or elance.com that can whip up a template for you in a hurry and for relatively cheap. Bottom line: Do your research before spending time and treasure on optimization for mobile. And never forget to explore offline ways of getting your brand (personal or business) out there, including direct mail, events, and actually using your phone to call a client— voice to voice. Contact Aaron Norris at @aaronnorris on Twitter
Aaron Norris is Vice President of the Norris Group where he is responsible for business development and production of TNG’s award winning radio show, events, and educational seminars. Mr. Norris is also principal at Palisoul, Norris, + Conroy, a marketing and strategy team based in Southern California and hosts the marketing and business podcast, The Cocktail Party Statement.
Investor Resources Accounting Michael Gray, CPA 408-918-3162 firstname.lastname@example.org www.realestateinvestingtax.com Richard Smith, Enrolled Agent 408-446-5551 email@example.com www.richardsmithtax.com
Attorneys Chillag & Associates, P.C. Nancy A. Chillag 650-321-6796 firstname.lastname@example.org www.chillag.com Jeffrey B. Hare, APC 408-279-3555 email@example.com www.jeffreyhare.com
Banking Apartment Bank 877-442-4003 Apartmentcustomer firstname.lastname@example.org www.apartmentbank.com
Home Improvement HD Suppy Remodel and Repair Lillian Duong 408-330-0934 Lillian.Duong@hdsupply.com www.hdsrr.com
Insurance Brighton Financial Group Vernon Williams 408-931-6582 email@example.com www.farmersagent. com/vwilliams
IRA Accuplan Benefits Services Lamarr Baxter 916-708-0235 firstname.lastname@example.org www.accuplan.net The Entrust Group Gary Kowalski 916-509-7271 email@example.com www.theentrustgroup.com IRA Services Trust Company Michael McNair 650-593-2221 www.iraservices.com
Mortgage Brokers Joe Cucchiara Mortgage Planner/ Branch Manager 408-342-3755 firstname.lastname@example.org Michael Ryan, Mortgage Broker and Banker DRE License # 01090891 NMLS # 295351 408-986-1798 email@example.com
Private Financing Socotra Capital Jeff Simmons 916-617-2047 firstname.lastname@example.org www.socotracapital.com
Property Services Thrasher Termite & Pest Control Inc. Janet Thrasher 408-354-9944 email@example.com www.thrashertermite.com
Real Estate Agents CSR Real Estate Service Stuart Baeriswyl DRE License # 01807909 408-373-6766 firstname.lastname@example.org www.customerservicereality.com
Real Estate Investments Capital Blueprints Kevin Kaczmarek email@example.com www.capitalblueprints.com Equity Transitions Jeb T. Henley DRE License # 00608973 831-419-4200 firstname.lastname@example.org www.equitytransitions.com
Lone Oak Fund Stephan Kachani 310-826-2888 Stephan@loneoakfund.com www.loneoakfund.com Memphis Invest Chris Clothier 877-773-9998 email@example.com www.memphisinvest.com Real Estate Structured Sales Kevin Kaaha 408-821- 4131 firstname.lastname@example.org www.ressale.com RealWealth Network Kathy Fettke 888-RW-NETWORK email@example.com www.realwealthnetwork.com Summit Assets Group Lori Greymont 888-298-0652 firstname.lastname@example.org www.summitassetsgroup.com The Norris Group Bruce Norris DRE # 01219911 951-780-5856 email@example.com www.thenorrisgroup.com Wilson Investment Properties Tom Wilson 408-867-1867 firstname.lastname@example.org www.tomwilsonproperties.com
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Short Sales Nick of Time Results Team Natalie Knowlton Matt Cassell 831-402-5107 email@example.com firstname.lastname@example.org www.nickoftimeresultsteam.com
Training & Education Real Estate 360 Joe Cucchiara KDOW 1220 AM www.re360radio.com
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Jason Hartman Platinum Properties Investor Network 714-820-4200 email@example.com www.jasonhartman.com
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Listed By Stephan Piscano 530-668-4040 firstname.lastname@example.org www.listedby.com
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Marketing / Internet
Jeb T. Henley, Investment Broker Equity Growth Specialist 35 Years Experience Equity Transitions Inc.
JebHenley@gmail.com Los Gatos Ca. Investment Broker #00608973 Jan. - March 2013 REI VOICE
Tuigim,* Ger R
by Geraldine Barry
eal estate investing requires a total commitment to learning and to executing on certain fundamentals. When the market goes down, work hard on your business, on your knowledge base, and on improving yourself and your skill set. Learn strategies for acquisition, occupancy, developing high achieving team members, and assessing opportunities with vision and thoughtfulness. Then, creatively determine how best to proceed. When the market starts to turn around, which is what is happening now, most of the competition is gone. This is the time to implement what you have learned to move forward quickly to dramatically increase your results. These real estate cycles create opportunities that provide the potential for massive increases in wealth, starting simply with education, focus, and hard work. Most investors make a mistake, lose money, and become discouraged. Turn this around—look upon failure as market testing: “I tested this, it did not work.” Analyze the results, learn the lesson, and quickly move onto the next thing. Be entrepreneurial— move deftly and make an impression, move forward, never giving up. There is a learning curve, and nothing happens in a straight line—business is not like academia—it’s not as forgiving. If you own a business, your results are evident for the world to see. Keeping that in mind, work only on things that create results. Warren Buffet said, “When it’s time to act on a good opportunity, don’t blink, the time is now.” An dtuigeann tú?
Tuigim (pronounced tigg-im) is the traditional Gaelic answer to the question, “An dtuigeann tú?” (Do you understand me?)” Tuigim means “I understand,” “I got it,” “I follow,” “I’m with you…,” and is the answer Geraldine Barry, native of the Emerald Isle, most loves to hear.
Geraldine Barry is founder and president of SJREI Association, the premier educational and networking association for real estate investors in the Bay area. Under Geraldine’s leadership SJREI has grown from a half-dozen investors to a vibrant two chapter organization with over 400 investors attending monthly meetings. SJREI won the Award for Excellence from the National REIA (Real Estate Investors Association) in several categories in 2010. As an avid investor herself, Geraldine has interviewed multiple real estate pros, many of whom have been guests of SJREI. In addition to leading SJREI, Geraldine is a regular guest on the nationally broadcasted NTDTV, publisher of the award winning publication REI Voice Magazine, and producer of the much acclaimed annual Real Estate Investment Expo Silicon Valley. As a serial entrepreneur, Geraldine is also a principal in Miles/Barry Contract Furniture serving corporations in the Silicon Valley. Additionally, she coaches business principals and CEO’s, guiding them in becoming more productive in less time in their leadership positions, helping them identify their core strengths, focusing on those to achieve their vision, and delegating effectively. Geraldine resides in Silicon Valley, and is the proud mother of Colin & Claire, her two children.
22 REI VOICE Jan. - March 2013
Trust deeds allow me to make consistent returns without the volatility of the stock market. I like knowing that the cash is coming in every month and that my investment is secured by the property. Desert Hot Springs, CA Appraised Value: $67,000 Loan Amount: $40,000 Loan to Value: 59.7% To Investor: $300 mo. Rent: $1,050 2 bed, 2 bath, 1,120 s.f.
Rancho Cucamonga, CA Appraised Value: $295,000 Loan Amount: $177,000 Loan to Value: 60% To Investor: $1327.50 mo. Rent: $1,875 4 bed, 2 bath, 1,641 s.f.
Bloomington, CA Appraised Value: $115,000 Loan Amount: $69,000 Loan to Value: 60% To Investor: $517.50 mo. Rent: $1,400 2 bed, 1 bath, 640 s.f.
Compton, CA Appraised Value: $232,000 Loan Amount: $140,000 Loan to Value: 60.43% To Investor: $1,050 mo. Rent: $2,000 3 bed, 1 bath, 1,027 s.f.
Taft, CA Appraised Value: $85,000 Loan Amount: $52,000 Loan to Value: 61.18% To Investor: $390 mo. Rent: $1,050 3 bed, 1 bath, 1,661 s.f.
Lancaster, CA Appraised Value: $87,000 Loan Amount: $52,000 Loan to Value: 59.77% To Investor: $390 mo. Rent: $1,200 3 bed, 2 bath, 1,340 s.f.
earn 9% with
trust deeds Tired of wild ﬂuctuations in the stock market? Want checks instead of bills? Think trust deed investing. Let’s face it, not everyone has the time or expertise necessary to be a full-time real estate investor. But trust deeds, secured by cashflowing California real estate, offers a stress free and passive way to incorporate real estate into your portfolio without the hassle of managing properties yourself. The Norris Group offers: • 9% return
• Direct deposit
• 1st trust deeds only
• Ideal investment for retirement accounts (IRAs)
• No pooling • 8-year term • 65% LTV max • Cash-ﬂowing properties only
• Over 100 years of Combined experience
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Ca l i for n ia Depa r tment of R ea l E st ate R ea l E st ate Broker, Br uce Nor r is Fi na ncia l Group I nc . DBA T he Nor r is Group DR E License 01219 911 w w w.T NGtr u stdeed s.com • 951.78 0.5856
Ca li fo r n i a D e pa r t m e nt of Rea l Es t a te, Rea l Es t a te B r oke r B r uc e No r r i s Fi n a nc i a l G r ou p I nc., DBA Th e No r r i s G r ou p DRE LicVOICE e n s e 01219 24 REI Jan.911 - March 2013 REIVoice-10.5x11.75.indd 1
w w w.TNGt rustdeeds.com 9 51.78 0. 5 8 5 6 12/4/2012 2:30:54 PM
Sound Opinion--Wise Decisions: Voice fo the Profitable Real Estate Investor. Real Estate market predictions 2013, Santa Clara 49ers Stadium,...