Your Education in Real Estate Marketing
Archives: Daily Issues
Issue #2096
- WEALTHY: 3 lessons you must learn if you want to make money in real estate (Dave Lindahl)
- HEALTHY: Chocolate lovers, prepare to be delighted (Jon Herring)
- WISE: Bill Beattie on the aim of education
ALSO IN THIS ISSUE:
- The legal mumbo-jumbo and birdfeed that protects Internet marketers (Michael Masterson)
- Messy people are more creative, right? (Bob Bly)
- It’s Fun to Know… about the future of grocery shopping
- Add "quiescent" to your vocabulary
Revealed: Probably The Biggest Red Herring in History!
While the World’s Been Stock Watching (and losing!), The Elite Quietly Play a Different Game with Different Rules…
Feeling cheated and disillusioned by the stock market? Sure, you may have made a good trade here… but then lost on another. The people dutifully pour their hard-earned cash into investment banks to put into the stock market for them… and those investment banks gladly oblige, for a fat fee… which they invest somewhere else! I’m no conspiracy theorist, but in my opinion the stock market is really a diversion for the masses… a distraction from where the BIG and consistent money is made… in the world’s money mountain. And when I say “Money Mountain”, I speak quite literally… the BIGGEST mountain of money on the planet. Click here to read more…
"The aim of education should be to teach us rather how to think, than what to think – rather to improve our minds, so as to enable us to think for ourselves, than to load the memory with thoughts of other men."
Bill Beattie
Your Education in Real Estate Marketing: Bubbles, Cycles, and Hype
By Dave Lindahl
Real estate, just like all other markets, has market cycles. (A market cycle is just a measurable "up and down.") When you understand the factors that contribute to these trends, buying investment property can be easy. And you can give yourself a pretty good education simply by reading articles in print and/or online publications. But first you have to know what it means when they use certain numbers.
Here’s an example of what I’m talking about…
In June, on CNNmoney.com, Rob Kelley wrote that mortgage rates had hit a 10-month high. He went on to explain that 6.53 percent was the highest that the 30-year fixed-rate mortgage had been since August 2006.
But what do those numbers mean? Just knowing that a number is high or low doesn’t paint the whole picture. Numbers are always part of a bigger picture. If you know how they fit together, you can win as a real estate investor.
To help you understand how numbers fit together to affect a market cycle, I have three lessons to teach you.
Lesson #1: Many factors are involved in the creation of a market cycle.
What’s high today was low at another time. Always ask yourself, "What else is going on, and how does this affect the area in which I’m investing?"
When mortgage interest rates were at 12 percent, 15 percent, or 17 percent, mortgage products had different terms and features. Lots of deals went on with private money. A real estate investor could assume a mortgage, because loans for real estate investing looked much different than they do now – and banks wanted to hang onto those high interest rate loans.
These days, loan assumption is rare, and real estate investors might get more deals that are subject to a type of investing that leaves the existing mortgage on the property without making the investor liable for the loan.
Single-family residential interest rates are part of all of the equations, but the sales of other industries factor in, too. Lumber prices affect new home construction. Unemployment rates affect home buying. How the U.S. dollar compares to other currencies also impacts the housing market.
While it may be exciting to read that interest rates are high, always remember that newspapers (and online news venues) are in the business of selling news, not educating the public. They will hype the information to make it exciting.
The 10-month window Kelley refers to in his CNNmoney.com article isn’t a very long period of time. And 6.53 percent for a 30-year fixed-rate mortgage, while higher than at some points in the last decade or so, is still pretty low compared to decades past.
Kelley states that home prices and mortgage rates are closely related. When mortgage rates go up, home prices tend to drop. Some market analysts call the current drop in the real estate market a real estate bubble – meaning that the "good times" bubble has popped.
But, again, that isn’t the whole picture.
Lesson #2: Not all geographic regions will have ups and downs at the same time.
Certainly, the Federal government influences interest rates – but remember Lesson #1: There are other factors involved. Yes, higher mortgage rates will tend to lower home prices. But if a specific geographic area has an employment boom, with lots of new jobs being created, those higher mortgage rates won’t figure as heavily in the home-buying market.
Lesson #3: When the single-family home buying situation looks bleak, investing in commercial real estate opens lots of other doors.
Commercial real estate can be anything from multi-family residential properties (five or more units in an apartment building) to warehouses, office buildings, strip malls, and more.
Lenders treat these kinds of properties much differently than they do single-family and smaller multi-unit properties (of two to four units). So once you start investing in commercial real estate, you could have access to more money to invest with.
If, for example, you’re good at finding good commercial deals, you may find that more potential backers will be interested in investing with you. Mortgage products change. And your place in the investing picture changes.
Here’s how:
With commercial real estate, especially with multi-family apartment buildings, you have a lot more control over your investment. You can raise your NOI (Net Operating Income) more easily (by raising rents or adding coin-op laundry facilities, vending machines, etc. to the property). And when you raise the NOI, the value of your property rises with it.
Best of all, when you can control the value of your property, you gain a degree of independence from real estate trends. You can’t bypass all the large factors – unemployment, the Fed raising interest rates, too much of one type of property on the market. But you can control your property in your local area.
Being able to control your investment is your bonus lesson. The more parts of your investment you can control, the wealthier you’ll be!
[Ed. Note: Dave Lindahl went from an $800 net worth to a passive income of hundreds of thousands of dollars and a multimillion-dollar net worth in less than five years. He did it by becoming the "Apartment House King." Today, his portfolio has over 3,100 units. Dave will be giving an exclusive one-day training event this fall to teach exactly how he did it, how he continues to grow his portfolio by more than 100 units a month (!), and how you can follow the same path in today's market. To learn more about this extraordinary event before it sells out, click here.]
The #1 Thing to Transform Your Health in 5 Minutes a Week
How much is your health is worth to you? What would you do with boundless energy to pursue your most important goals? What would it be worth to always maintain your ideal weight? What would you pay to avoid cancer or a fatal heart attack?
I’m sure you’ll agree… there is no price you can put on your health. But the good news is that learning what it takes to attain total health is absolutely FREE! And it can be easier than you ever thought possible. Take just two minutes to learn how you can take complete control of your health and fitness today!
Dear Michael Masterson: "What say you on the legal-ease of ‘owning the customer’?"
"Your inspiration is motivating. I’ve decided to boost my income by selling info-products over the Web, and have come across one I believe has what it takes. The audience is the small-business owner (25 million and counting); the product is a mailed marketing kit.
"However, when the product is drop-shipped from the ‘home office,’ how do I ensure my customer’s contact info doesn’t line the pockets of the home office list-keeper?
"What say you, MM, on the legal-ease of ‘owning the customer’?"
- Tia Dobi
Los Angeles, CA
Tia has been inspired to start a direct-mail marketing business selling information products to small-business owners. She has apparently figured out most of what she needs to do (presumably by reading ETR and buying some of our info-products), but now she wants to protect her new business’s most valuable asset: the names and e-mail addresses of her customers.
If I understand her question, Tia is asking, "What’s to stop the service bureau that is either processing the orders or shipping out the products from keeping my customers’ names and then selling other products to them?"
The answer is a combination of standard legal mumbo-jumbo and birdfeed.
The legal mumbo-jumbo is the boilerplate that is standard on all contracts with vendors. It states what everyone in the industry knows – that customer names cannot be stolen.
The birdfeed is "seeds." Seeds are names that you plant in your customer file. If anyone – a vendor or a competitor – mails to your file without permission and without paying you, you will know, because the seed (it could be you, your Aunt Tillie, or your marketing assistant) will receive the unauthorized mailing.
In practice, list stealing is rare. Not because of the legal sanctions but because once word gets out that a direct-mail company is stealing names, nobody will do business with them again.
- Michael Masterson
[Ed. Note: Have a question for Michael Masterson? Write to him at AskMichael@ETRfeedback.com.]
Are People Impressed by Your Messy Desk?
By Bob Bly
Do you keep your desk deliberately messy to impress others – to convey the image that you are busy, productive, and important?
If so, stop. A study by the University of Texas found that people with messy offices are less efficient, less organized, and less imaginative than people with clean desks.
Career consultant Penelope Trunk notes: "A messy desk sends the message that you cannot handle your position, and that assignments and important papers will go into a pile and never come out."
Trunk concludes: "Even if you get every project done well, the perception will be that you don’t."
(Source: "Words from Woody")
[Ed. Note: Master copywriter and best-selling author Bob Bly is the editor of ETR's ETR's Direct Marketing Masters Edition. a program to help you start your own successful direct-mail business. Sign up for Bob's free monthly e-zine, The Direct Response Letter, and get more than $100 in free bonuses.]
A Delicious Solution for High Blood Pressure
By Jon Herring
ETR’s investment director, Andrew Gordon has been catching some grief around the office lately. You see, Andy suffers a crippling addition and yesterday he was going from office to office looking for a fix. Andy is a chocoholic, and if he doesn’t have a little piece of chocolate in the afternoon, he becomes grumpy, his work begins to suffer. He has also been known to root around the office until he finds something to satisfy his craving.
I’m making light of the situation, of course. But the good news is that Andy’s “addiction” is good for him. Not only is dark chocolate rich in anti-oxidants, but a recent study, published in the Journal of the American Medical Association, shows that eating just a small amount of dark chocolate can be as effective at lowering blood pressure as making major dietary changes. And it is certainly an easier regimen to maintain.
German researchers at the University Hospital of Cologne divided 44 adults with early-stage hypertension into two groups. The subjects ate 6.3 grams of either dark chocolate or white chocolate each day. While the dark chocolate contained about 30 mg of beneficial polyphenols (from cocoa), the white chocolate contained none.
The subjects who consumed the dark chocolate experienced an average systolic blood pressure reduction of 2.9 mm Hg and diastolic BP reduction of 1.9 mm Hg. Furthermore, the percentage of the test subjects who were clinically diagnosed with hypertension dropped from 86 percent to 68 percent. And these improvements were made without any changes in body weight, blood lipids, or blood sugar levels. Those who ate the white chocolate saw no changes.
The polyphenols in cocoa work as vasodilators, helping the blood vessels to relax and become more flexible, and thus reduce the pressure inside. And it takes a surprisingly small amount to have an effect.
So if you love chocolate, take heart. But stick to dark chocolate. Milk chocolate has very little cocoa and too much sugar. You can also buy organic powdered cocoa at most health food stores. I often mix a teaspoon or two into my coffee, or I mix it in milk and add a teaspoon of erythritol for a tasty and healthful chocolate drink.
It’s Fun to Know: The Future of Grocery Shopping
Supermarkets across the country (which have encouraged customers to use self-checkout lanes for years) are beginning to implement a new time-saving technology that is common in Europe. You’ll be able to scan items with your own personal scanner before bagging them yourself and putting them in your cart. Pay at a terminal at the front of the store, and you’re on your way.
(Source: Associated Press)
Do You Have What It Takes – and I Mean Really Have What It Takes – to Make It? In the Next 30 Days You Could Be Telling Your Boss to Take a Long Walk Off a Short Pier!
The leeches won’t stop till you drop.
Look, I’m sure you’ve felt it before… no matter how much you make it seems someone always has their hand in your pocket.
Your boss, the IRS, even your credit card companies, they’re all taking turns at your wallet.
If you’ve finally reached your boiling point and would love to stop these leeches from sucking you dry then you owe it to yourself to read on… But only if you’re serious about getting out of the daily grind. This isn’t for the faint of heart.
- Patrick Coffey
Word to the Wise: Quiescent
"Quiescent" (kwy-ES-unt) – from the Latin for "rest" – is inactivity; a state of repose.
Example (as used by Jawaharlal Nehru in The Discovery of India): "Have we had our day and are we… just carrying on after the manner of the aged, quiescent, devitalized, uncreative, desiring peace and sleep above all else?"
[Ed. Note: Become a more persuasive writer and speaker ... build your self-confidence and intellect ... increase your attractiveness to others ... just by spending 10 VERY enjoyable minutes a day with ETR's new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007
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