Lawrence E. Stone  – Santa Clara County Assessor (South Bay/Sunnvale Speaker – March 1)

San Jose Magazine named him one of Silicon Valley’s 100 most powerful leaders. Pulitzer Prize winning author and Washington Post reporter, Haynes Johnson described Larry Stone in his best selling book, Sleepwalking Through History, as “bright, articulate; an American rarity, a proven political success in a time of political failure.” Longtime San Jose Mercury columnist Scott Herhold said Stone is one of the top 25 most powerful leaders in San Jose, and the third most powerful elected official. He was first elected in 1994 and overwhelmingly reelected four more times.

He has been a financial manager on Wall Street and was a founder of two successful Bay Area real estate investment and development firms. He also served 16 years as a council member and mayor of Sunnyvale during the period the city earned an international reputation for effectiveness and became a model for President Clinton and Vice President Gore’s efforts to reform the federal bureaucracy. President Clinton said, “The National Performance Review was modeled in part upon the remarkable reinvention efforts pioneered by the City of Sunnyvale, where Larry Stone served as mayor.”

As County Assessor, Stone has overseen remarkable improvements to streamline the operations of his office, eliminate backlogs, and achieve higher levels of public service, all while consistently operating substantially under budget. The State Board of Equalization acknowledged his office as one of the best-managed assessors’ operations in California.

Larry Stone also has been an active and effective civic leader in many fields ranging from the arts, to education, to the environment.

**Details on the East Bay speaker – TBA – Please check back soon

East Bay Meeting Agenda

• 6:15 – 6:45  Get Informed/Educated/Motivated with Geraldine’s Pre-Meeting Presentation
• 6:45 – 7:00 Facilitated Networking Exercise
• 7:00 – Intro with Geraldine
• 7:30 – Keynote Speaker(s)

South Bay Meeting Agenda

• 6:00 – 6:30 Get Informed/Educated/Motivated with Geraldine’s Pre-Meeting Presentation
• 6:30 – 7:00 Facilitated Networking Exercise
• 7:00 – Market Update / Marketing Minute / Intro
• 7:30 – Keynote Speaker(s)

 Hyatt Place, Dublin

Domain Hotel, Sunnyvale

Scott Sambucci is a sales professional, an entrepreneur, and data geek. After several years in the publishing and educational software industry with Pearson plc, Scott moved to Silicon Valley with Aplia, a software company purchased by Cengage Learning (formerly Thomson Education). Following his work with Aplia, he founded and operated consulting firm Economic Information Services bridging investment capital and business opportunities in Central Asia.

Scott is part-time faculty member at California State University-East Bay and Saint Leo University in the areas of Entrepreneurship, Strategic Management, and Economics, and has previously taught undergraduate and graduate courses in Finance at the University of San Francisco.

He holds a BA in History from Winthrop University, an MBA from the Fuqua School of Business at Duke University, and an MA in International Economics from the University of San Francisco. Scott is a frequent author on the How’s the Market? blog and his personal blog which focuses on the financial market and business strategy

At February’s East and South BayMeetings, Scott Sambucci will cover the following:

• Capita per inventory – this is the topic I examined in the article
• Rentership society? Homeownership rates are down from their bubble peaks, rental rates are up.  What does this mean for investors
• Population and employment dynamics – effects on home prices (i.e. closing of Solyndra)
• Is there an REO stigma?  Price differences between REO listings and “traditional” listings

East Bay Schedule of Events

• 6:15 – 6:45  Geraldine
• 6:45 – 7:00 Facilitated Networking Exercise
• 7:00 – Intro with Geraldine
• 7:30 – Keynote Speaker(s)

South Bay Schedule of Events

• 6:00 - 6:30 Geraldine
• 6:30 – 7:00 Facilitated Networking Exercise
• 7:00 – Market Update / Marketing Minute / Intro
• 7:30  –  Keynote Speaker(s)

Hyatt Place, Dublin

 Domain Hotel, Sunnyvale

Geraldine will be interviewing Joe Cucchiara, host of Real Estate 360, an engaging radio show covering anything and everything real estate. Joe is an inspirational and spirited entrepreneur who is on the pulse of what is going on right now in the market.  Joe has been sought out as a mortgage expert by the media and is a regular guest speaker on Rob Black and Your Money on KRON 4 as well as Rob Black’s radio program on KDOW. His commitment to the development of lasting trust based relationship sand his drive for success are unstoppable and contagious.

Our second interview will be with Pradeep Gandhi, one of our members. Pradeep worked at Cisco Systems for several years and just recently took the leap and left the corporate world so that he could pursue real estate investing full time. Pradeep will share details on his journey from corporate executive to full time real estate investing, and we discuss a few of the several transactions that he completed in 2011. Be prepared to be inspired with this compelling, informative story.

At our Christmas luncheon, we briefly interviewed Don Smallie, “SJREI Member of the Year”, and the feedback we received was that you wanted more details, so Don Smallie will be our third interview and you will hear his full story! Don began investing in 1990 and had over 200 doors. He soon went from a net worth of over $6million to minus -$1,500,000. He is now on track to pay off his entire debt and be at break even net worth by Jan 1,2012 without having to file bankruptcy! Don has bought at least 60 houses at courthouse steps in last 2 years.

East Bay Schedule of Events

• 6:15 – “Highest & Best Use of Time” Presentation by Geraldine Barry
• 7:00 – Geraldine / Intro
• 7:30 – Keynote Speaker(s)

South Bay Schedule of Events

• 6:00 – 7:00 Highest & Best Use of Time with Geraldine Barry
• 7:00 – Market Update / Marketing Minute
• 7:30 Intro / Followed by Keynote Speaker(s)

 Hyatt Place, Dublin

Domain Hotel, Sunnyvale

by Scott Sambucci

What if everything you thought about housing affordability was wrong?

Traditional housing affordability indices by the National Association of Realtors (NAR), the US Census, and the National Association of Home Builders (NAHB) calculate “affordability” as a measure of home prices relative to median income. For example, NAR’s calculations are “Based on a 25% qualifying ratio for monthly housing expense to gross monthly income with a 20% down payment.” Of the 225 metros ranked by NAHB, Carson City ranks 6^th nationally. Phoenix is 51^st and Las Vegas is 59^th, while Washington DC is 176^th, the San Francisco-Bay Area is 224^th, and New York is 225^th.  

And all of these measures are flat wrong. 

“Capita per Inventory” – a calculation of how many people (capita) there are for each available home for sale (inventory) – is a truer supply and demand measure, determining the amount of demand relative to available housing supply. 

Here in the San Francisco bay area, we here it all the time: “How can anyone afford a house in Palo Alto with a median price easily over $1,500,000?”  Except that it is not anyone who has to be able to afford a house in Palo Alto, but fewer than 60 households because that’s how many homes are for sale right now in Palo Alto.   As long there are enough people with incomes able to support a million dollar home in Palo Alto, it very quickly becomes “affordable.”  With Apple, Facebook, Zynga, and the rest of the booming Silicon Valley tech companies, there are plenty of available buyers out there at these prices.

Examining five Bay Area cities for the week ending 11/11/11, the “Capita per Inventory” numbers are startling, and explain everything about home prices in these markets.

Moreover, the home price data set since January 2007 reveals an 87% correlation on “Capita per Inventory” to home prices — as “Capita per Inventory” changes, so do home prices. The fewer the number of people per available home for sale, the lower the local market’s price becomes.

Stockton and Sacramento, where available housing inventory is relatively high, require significant in-migration or local demand (thousands of people) to clear the local market’s inventory, while more desirous towns like Palo Alto and Davis need about a hundred people to snap up the available inventory. Think Stockton and Sacramento measure poorly? Capita per Inventory in Carson City is 205, while Las Vegas measures at 106.

This concept applies more broadly to metros and regions.  The Bay Area, Washington DC, and New York, while they have their own local market variances, are considered more expensive and thus “unaffordable” by traditional methods. However, their Capita per Inventory measures relatively high compared to lower-priced markets like Phoenix and Las Vegas, considered by traditional measures to be “more affordable.”

Finally, Capita per Inventory has implications for municipalities and city planning policies. Zoning restrictions, school districts, and tax laws, if implemented effectively, can directly support home prices by restricting housing supply and increasing the demand to live in their towns.

Inflation-adjusted median incomes are flat to down since the recession, and the pundits talk in circular arguments — housing won’t recover until we solve unemployment, but we can’t solve unemployment until we solve housing.  That’s true in a national sense, but for the savvy investor crunching the right numbers, there are plenty of opportunities to find local markets where demand will always be relatively strong.

So when you’re at dinner and you hear – “Palo Alto is so expensive, but it’s a great time to buy in Sacramento – houses are cheap! I should buy two or three and rent them out!,” take five minutes and explain Capita per Inventory. Their nest egg will thank you for it.

(Note: Altos Research is a market analytics firm and does not provide investment advisory services. This article should not be construed as specific investment advice to buy or sell properties.  Consult your local real estate professional before making any real estate investment decisions.)

Scott Sambucci is the Chief Operating Officer with Altos Research – working daily with capital markets and fixed income clients to develop predictive models and applications using real-time housing market analytics and leading indicators.  He’s written numerous white papers on the topics of residential housing valuation and market trends. He also serves as an adjunct professor in the areas of Finance, Economics, and International Business.

An Interview with Douglas G. Duncan, Ph.D., Vice President and Chief Economist for Fannie Mae

by Geraldine Barry

Ger: At a recent debate, all the Republican candidates felt the only thing that would help housing was fixing the economy. Do you think improving the economy and lowering unemployment will do much to change the fact that 25% of homeowners with a mortgage are upside down? 

Doug: If we get an improving economy and growing employment (both big “if’s” at this point) it will help. Job growth begets income growth which begets household formation which begets housing demand both owned and rental which will put upward pressure on prices which will reduce the number of households underwater IN THOSE AREAS WITH JOB GROWTH.

Ger: Is it possible that having such a large percentage of homeowners over burdened by mortgage debt is part of the problem with the economy? And if so won’t we need to fix housing in order to fix the economy? 

Doug: Fixing the economy and fixing housing are closely correlated and somewhat causal. Housing supports a host of supply industries so it has a bigger impact than a lot of other sectors. However, small business has to see future sales and profit growth potential before they start hiring. At present that is being forestalled by recession-level consumer pessimism and related business pessimism about the direction of the economy. Until there is a reduction in expected future taxes and regulatory burden, don’t expect strong growth.

Ger: How has the performance of Fannie and Freddie’s mortgage debt compared to those of privately securitized loans? And in terms of vintages where did the problems occur first… in Fannie and Freddie debt, or private securitized debt?

Doug: Investors treat GSE debt as though it has the full faith and credit of the U.S. Government. With current Federal Reserve purchase activity levels, they are rational to do so. This applies particularly to short term funding. Longer term funding is effected by perceptions of what will ultimately be done with the two entities from a policy perspective. The mortgage market problems appeared first in private label securities, one reason the private securitization market has yet to re-emerge. Fannie and Freddie did not cause the crisis…it had a number of parents. They did contribute to the magnitude of the crisis.

Ger: If we do at some point come to the conclusion that we have to deal with negative equity, what do you think would be the best way to do it, with the fewest unintended consequences? 

Doug: It is not perfectly clear what the net impact of a principal write-down would be. Clearly loans modified to reduce monthly payments perform better in proportion to the degree of the payment reduction. Therefore, reduction of principal component of the monthly payment would contribute. However, the saving to the borrower is a loss to the investor. Whether the probability of default and cost of that default is offset by a reduction in those two items is the question. It is not clear that the net social measurement is positive.

Ger: How do you see the relationship between the general U.S. economy and international markets, particularly problems in Europe (primarily Greece and Italy) impacting the U.S. Is the U.S. on a similar track to Greece, or is our size and our resilience as a nation something that will help us out of this dilemma? 

Doug: The U.S. is clearly on a fiscal path that could lead to a Greek type problem in the long run. The public grasps this which is part of the reason for the current ferment in the body politic. If we make the politically difficult decisions rapidly we can rapidly return to a growth path taking us into a strong economic future. The appropriate actions are not hard to understand.

The US economy will be affected by Europe’s problems through trade relationships and financial market connections. Bad things in European economic sectors have downside effects in the US.

Ger: What are your thoughts on China? Should we be concerned that they will become a more dominant force economically particularly as they hold a lot of our debt? 

Doug: China has potential as a long term trading partner and has many more difficult problems than we do, so I don’t fear them. They are a communist country with a growing middle class that may well increase pressure for more political freedom. As a result of the one child policy, they also have a rapidly aging population with no social safety net and a shrinking relative workforce to support the older population. Also they have reached close to the end of their ability to invest and must shift to consumption which means wage increases which will reduce their competitive advantage in labor costs and shift some advantage back to the U.S. (if we install growth oriented policies). They can’t sell off their U.S. debt without potentially adversely effecting their own income statement, so I don’t fear rapid liquidation of their U.S. holdings.

Ger: Is this current negative economic situation beneficial in any way - what lesson has been learned from this economy? 

Doug: It would never be a good thing to have 9 percent unemployment from either a human or resource utilization perspective. It is not clear that we have seen the kind of response in the policy would that would indicate lessons learned. The most important lesson is that leverage has both benefits and costs. We had far greater leverage in our economy than was healthy and the downside has been painful. The evidence that there is serious attention to leverage reduction is hard to come by. In fact, we have codified in law the existence of institutions which are too big to fail and the first test of the regulatory apparatus that was to oversee them led to a regulatory failure (MF Global’s bankruptcy). We undertook massive government spending ostensibly to spur economic growth and it failed. Many policymakers are still in denial of that fact. Prosperity is a hard-won result of nurturing a stable private sector with growth prospects and that lesson will hopefully be relearned and implemented.

Ger: What positive signs to you see in terms of the U.S. and growth down the road?

Doug: The public has gotten the attention of the government and is in ferment over the country’s debt, both current and future. If the public can overwhelm the special interests (some of which are themselves) and get control of the entitlements, this is still the biggest economy in the world by a factor of 4 and the best entrepreneurial talent in the world so the prospects for the future are undiminished. Unbridled entitlement growth and the belief that the government creates wealth are the legacy of Europe which the public is watching melt before their eyes. I believe that is why 77% of the people in our survey say the economy is heading in the wrong direction.

Ger: What do you like most about your job as Chief Economist for Fannie Mae? It is probably a very stressful position.

Doug: I have a great staff and enjoy coming to work with them every day. I like real estate. Everyone lives in some sort of building, and most work in some sort of building, and the buildings sit on land and always will. Almost all real estate is financed at some time. That means I am a part of everyone’s life every day and that is energizing. I love going out and speaking with the public; particularly the question and answer portion. Americans are great people and the most generous in the world.

Ger: Your favorite things to do to de-stress? 

Doug: I love to read (history and biography) and listen to music (jazz and blues) although time for those is precious to come by. I also love to work outside physically having grown up on a farm and working in an office. I have been known to take a glass of pinot noir from time to time.

Ger: What are your 2 or 3 most favorite sources for business news? 

Doug: Wall Street Journal, Sunday New York Times, Forbes Magazine, various other print media including the web. No television.

Ger: The best business or economy book you have read this year? 

Doug: Rivers of Gold: The Rise of the Spanish Empire, from Columbus to Magellan by Hugh Thomas. I also read P.J. O’Rourke’s book on Adam Smith, On The Wealth of Nations. The Bible also has a lot of good advice on business conduct.

How to audit proof your tax return?
Who are the IRS targeting right now for audits? “Real estate professionals” beware
Learning to live with the new tax laws – understanding what is relevant and pertinent to you
What real estate investors need to know as they set systems in place to organize data collection
Tax benefits to owning real estate – the specifics

For over 30 years, Richard Smith & Associates has employed Enrolled Agents and CPA’s to solve your IRS tax problems.  We also prepare Individual, Corporations, Trusts, Partnerships and LLC tax returns.  Real Estate Tax consulting is our specialty and we will work together to achieve the best tax strategy that the law allows.  We also offer personalized individual business strategy sessions, and estate planning consultations that will reduce both current and future taxes. As real estate investors ourselves we are always on the cutting edge of new tax laws to ensure that we minimize your taxes and maximize your return on investment.

The second half of our meeting will include an interview with Investor, Paul Gupta.

Paul started researching real estate in 2007 and made his first investment in 2008.
He will discuss pros/cons of di”worse”ification, real estate as a financial asset category, and, as an overlooked entrepreneurship opportunity.

He will also tell you where to get good Mexican food in Stockton, the best farmers market (Saveur Magazine-rated!), and what the gang sign for the Norteños is.

In his other life, Paul runs a business intelligence company, Metricmine which specializes in helping companies manage and visualize lots of data.

 Meeting Agenda

• 6:15 – 6:45  Get Informed/Educated/Motivated with Geraldine’s Pre-Meeting Presentation
• 6:45 – 7:00 Facilitated Networking Exercise
• 7:00 – Intro with Geraldine
• 7:30 – Keynote Speaker(s)

By Aaron Norris

Apparently, there’s now a magic wand pricy consultants can wave over my website to make it the go-to site for every potential customer in my industry. I have been inundated by offers of thousands of impressions, 100,000 subscribers, and top spots in Google by outside vendors selling their over-the-top marketing promises. I would love to hand over these responsibilities to another company, but know respectable search placement takes testing, measurement, and effort … followed by even more testing, measurement and effort. Why on earth would I let someone experience that for me? (I know, I’m sick.)

In all seriousness, I think too many small businesses get duped into paying for something they don’t need and don’t understand. If you’re venturing into the world of online advertising, it takes many forms and there are certain things you need to be aware of.

Online Ads

Impressions: An impression is the measurement of how many times something is viewed. Let’s pretend you’re reading this article on the fabulous SJREI blog. That counts as one impression. Let’s further pretend you love it so much, you come back to the blog and read it again in a week. That’s two impressions. Let’s go crazy now and say you loved it so much that you forwarded it to your friend Susan and she reads it. Three impressions.

Unique Hits/Unique Impressions: This takes impressions to the next level by getting rid of duplicate data. In the scenario above, you loved the article so much you read it twice. But, if we’re measuring only unique hits, it only counts once (but I still appreciate your enthusiasm). Tossing out one of these duplicate views gives us two unique hits or unique impressions.

Clicks: Clicks are literally the user engaging with your online ad, link, or media with their mouse. Let’s continue with our example and say in the article I’ve strategically linked to The Norris Group site. You’re in a rush so don’t click on my hyperlink. However, your friend Susan loves the article, but knows very little about The Norris Group. So she decides to click on the hyperlink within the article. She’s instantly transported off of SJREI’s site and starts enjoying the content of The Norris Group. Our math up to this point: three impressions of the article, two unique impressions (you and Susan), and one click.

Conversion: A conversion is when the consumer performs a pre-set goal you’ve defined. This is much more sophisticated than a click and way beyond that of an impression. Let’s say on The Norris Group’s site, I’m measuring the amount of time a user stays on the site and the number of requests they make for information about trust deed investments. If a user is on our website for more than twenty minutes, I am going to assume they fell asleep at the keyboard or they are engaging in some of our rich media (radio, blog, videos, etc.). I also count a conversion if a user fills out an application to receive more information about our trust deed investments.

Back to Hypothetical Land: Susan clicks over from SJREI to The Norris Group and stumbles upon our videos on trust deed investing. She spends 20 minutes going through the material and then notices a link to download a free e-book about trust deeds. She registers quickly online and receives the information in her email.

Susan has just given me two conversions! And all from one click. That’s pretty impressive.

Keep in mind Susan isn’t a customer yet. I’m measuring defined actions I think she’ll take on her way to becoming a customer. This allows me to later look at how much money I’m spending on different routes of advertising to see which one makes more sense. Furthermore, for you savvy CPAs and finance folks, I’m really cost accounting and figuring out what my cost-per-conversion is and comparing not only to other online ads but also my other routes of advertising.

Don’t Be A Sucker

Sharing an embarrassing example of my own will illustrate why this kind of conversion tracking is so important:

Several years ago I ran an event and was overjoyed when a national real-estate-specific cable show agreed to run an ad on their website for $3,000 and an agreement to make them sponsors of the event. I was told they had 300,000 unique hits every month and the usual advertising rate was over $6,000 per month. What a deal!

I created the artwork and submitted it anticipating that this website would create not only thousands of unique hits, but potentially hundreds of clicks. Even if it only had a 0.1% conversion rate, it was going to be a big success — that’s 300 conversions that would surely generate business.

Let’s take a minute to do the math. If I were to achieve a one tenth of a percent conversion, 300 conversions would cost me $10 per conversion ($3,000 paid/300 conversions).

After three months of running my ad on the site, I received three clicks. Yeah, you read that correctly. Three measly clicks. Zero new business.

Admittedly, I made a few amateurish mistakes. I assumed that:

1. Large impressions would equate to some reasonable number of conversions
2. Nationally-known media is better than local
3. Industry-specific, niche media will generate more interaction

Boy was I wrong. Lessoned learned. I could have done a few simple things before I signed on the dotted line to protect myself:

1. Ask the site salesperson for referrals and overall happiness of current advertisers
2. Follow up by calling on advertisers currently appearing on the site
3. Really look at the website and see if the audience is who I’m trying to attract

I’ve actually fallen for the large impression argument more than once. The second time was on a site that generated three million unique views and it didn’t fair much better than this embarrassing example. Bigger doesn’t necessarily mean better. Always be asking: Who is my target audience? Be very specific and be able to target and deliver your content to the right audience. Think about industry, location, age, lifestyle, and even how likely your customer is to show up wherever you advertise.

Just because a site has a national brand behind it doesn’t mean it will create a ton of business. One fanatic about your company or brand will be far more effective than a generic ad on a semi-industry-related site. Choose your media outlets wisely and consider engaging your current customers first. Work from the inside and move out.

Even with industry-specific media, make sure it’s reaching your target audience. The Norris Group doesn’t advertise in many magazines because we’re not national and few magazines have the ability to only deliver in specific markets. I’d rather spend my budget target-marketing to specific locales or creating great content that will spread throughout the web naturally … and for free.

In Intimate Detail: Memphis, TN

An Interview with Chris Clothier

by Geraldine Barry

I am delighted to have the opportunity to interview Chris Clothier, Vice President of MemphisInvest.com, the largest real estate investment firm in the Mid-South and the largest, private property seller in West Tennessee. As an experienced investor and someone who lives and works in Memphis, Chris’ take on this market is very well grounded.  Please enjoy our interview.

Q: How would you summarize the Memphis housing market today?  

The investment market is very good, but like any city with a lot of opportunity, there is also a lot of opportunity for mistakes.  There are some very risky pockets of the city where property can be picked up for the cost of a small used car and that is not where we our company operates.  We are concentrating on the outskirts of the city in some of the suburbs and in newer parts of the city.  Prices in these areas are hovering around mid 1990 values and represent a great opportunity for investors who want to earn a solid return while eliminating as much risk as possible.

Q: Why is the Memphis a market to consider investing in?  It is certainly not a city that comes to mind first for investment.

First of all, we love being considered the sleepy little city on the edge of the Mississippi river and it certainly allows us to play up our “Southern Charm.”  But savvy real estate investors know that many in the U.S. business community consider Memphis a first choice city for business and investment.  Because of its central location in the country, low cost of living, and commitment by both government and civic leaders to promote the city’s amenities and cultural value, Memphis is thriving and growing.  As the 17^th largest metropolitan area in the country, Memphis was recently chosen by two international companies as the location for their new world headquarters and the only location outside of Japan to house a heavy generator manufacturing plant.  Why does this matter?  Memphis is the distribution hub of the U.S. and is home to five Fortune 500 companies, nine Fortune 1000 companies and these distinctions mean jobs.  Add all of these important considerations to the fact that cost of housing is 22% below national average and you get a market that has a low cost of entry for a real estate investor and a huge upside for growth of capital and return on investment.

Q: How do the employment numbers look currently?

We are hovering right around the national unemployment levels with fewer long-term unemployed and a real struggle for younger people to find work.  That being said, local companies announced 5,000 new jobs in the first half of the year and the local government has been working hard to attract more businesses and more jobs. 

Q: I discovered recently that 48% of the population in Memphis rent?   Why is this significant and how do you view it – is that a positive or negative thing?

I view it as an absolute positive due to the mindset that is already present with prospective tenants.  The number is a little bit skewed because it takes into account some neighborhoods and parts of the city where every property is a rental.  As I stated earlier, we have developed our business model by working in the outer sections of the city and the suburbs and the neighborhoods where we manage portfolios for our investors are made up of mostly owner occupied homes.  Still, the mindset in Memphis is that it is ok to rent.  The negative stigma that may be present in other cities is not here. 

Q: How are rents trending?

Within our company, rents have been trending up as a whole and much of that is attributed to the neighborhoods that we are investing in.  During an audit of properties rented in August, we found that 37 of the 53 rental contracts closed during the month were on properties already in the portfolio.  Of those properties, 65% saw an increase in rent from the previous contract, 25% remained the same and 10% decreased.  This shows how rents and rental trends need to be tracked all the way down to the street location and not just by zip code or neighborhood.

Q: How are investors making money in the Memphis market right now?

We are concentrating on nicer homes and middle class to upper middle class neighborhoods.  So the properties and areas we start with for investors are more desirable.  From there, we are huge believers in reducing deferred maintenance and how big those savings can be for a long-term investment.  So we spend a lot more time and money on the renovation of an investment property.  Our investors are attracted to these two unique messages from our company – invest in better properties, with more extensive renovations.  Our investors find this essential to their ability to make money in this market.

Q: What have you learned from the recent financial and reversal of fortune in the housing market?

Do not take anyone else’s opinions on faith!  Regardless of who you are dealing with or how good the marketing, an investor’s own curiosity and willingness to ask questions may be the best tool an investor has for long-term success.  There are some fantastic opportunities in today’s investment market, but investors have to protect themselves and do business with whom they feel a connection.  This is long-term wealth we are looking to build and that cannot be done with outrageous claims of high returns or fast fixes. 

Q: What three things would you share with people who want to become investors or expand their investment portfolio? 

1. Surround yourself with the highest caliber people you can find.  The advice investors receive right now will directly impact their net worth in the very near future.
2. Seek the advice of those you surround yourself with on how to structure your investments protect your resources.  Wealth is built by being able to use capital in such a way that it is protected and working for you at the same time.  So do not operate in the dark – seek advice!
3. Investigate markets outside of your own.  If you do not live in a market with affordable price points or high rates of return, there are opportunities and efficiencies that did not exist in similar past real estate markets.  You can find quality partners today who cater to investors from out of the area like MemphisInvest.com.

I really enjoyed the SJREI seminar and the speakers had a lot of good information to share. It was nice to get advice from real estate professionals who have been in the industry for years, even decades, and for them to share with us their experiences. –Daniel Gouw

Jump Start–before you JUMP IN to Real Estate Investing

You can spend thousands of dollars and hundreds of hours and still have gaps in your knowledge about real estate investing. For a solid grounding in the fundamentals look no further than SJREI Association’s JumpStart program. We bring you a solid curriculum designed both for the novice real estate investor and for investors ready to tune-up on the latest legal, financial, and practical knowledge necessary for successful investing.

EXPERT INSTRUCTION

With experienced instructors guiding a fast-paced day, you?l gain knowledge needed to jump start your real estate investing!

LEARN

• The top 10 types of investments and how to determine which is right for you
• How to find money to do your deal
• How to research and find investment properties
• The critical factors to evaluating a deal
• The essential members of your support team and their functions
• The pros and cons of different legal entities: LLCs, Corporations, and Partnerships
• When to call on a tax specialist and tax implications of the various investing strategies
• Managing your assets for cash flow and long term gain
• Exit strategies for when you need cash for new investments or to fund a long deserved vacation

Other day-long seminars cost $1,000 to $3,000?nd then end up being no more than a pitch to sell real estate, books, or CDs. This day of pure EDUCATION brings together experts in their fields at a low cost to you, and provides an opportunity to network with both the experts and other attendees.

Before You Leap Into Investing, JumpStart Your Education!

For more information, call 408-264-3198

Instructors Include*:

Jeffrey Hare, Risk Management

Nancy Chillag, Legal Entities

Jeb Henley, Investment Types

Lori Greymont, Funding Sources

Richard Smith, Tax Issues

Tom Wilson, Finding Investment Properties

Lamarr Baxter, IRA Investing

Vernon Williams, Insurance

Presentors Subject to Change*

Great Savings you won’t want to miss:

EARLY BIRD SPECIALS*

Register on or before April 1st and receive a $20 discount

OR

Two people registering together can attend for $298 total, which is just $149 each!

COMBO PACKAGE*

One year’s Membership plus admission to JumpStart for $349! This is the best deal becuase annual membership to SJREI alone is $225. This package reduces Jumpstart admission to just $124!!

*These promotions are only valid until April 1st.  REGISTER EARLY TO TAKE ADVANTAGE!  Do not wait – the January 28th JumpStart Program was SOLD OUT!