"...and that is why I succeed".

Here's a powerful 30-second testimony!

Frog Kissing! Just Do It!

There is SO MUCH opportunity right now, it's a riot! Auctions and REO purchases are all the rage as I write this. Short sales are happening, too, but the universal theme on those is, "you've got to have a lot of those in the pipeline" to make up for the losers --- and the only "buyers" are end-users.

As for the auctions, the banks are just now (July 2008) loosening up the terms of their reserves (here in So. CAL) to effect actual investment grade deals.

That all said, if one doesn't know their farm, they won't recognize a deal, unless it was SO obvious a blind person would trip over it ---- and then they would be self-doubting and suspicious anyway.

You know, that's the theme of the real estate business.

There's just no short-cuts other than knowing your farm.

That's why 95% of the would-be investors are scared to pull the trigger. They don't know if they're shooting at a good deal, or shooting themselves in the foot.

Nevertheless, sifting through a bunch of crap is still the name of the game. I'll call this "Frog Kissing". It takes time and money to "frog kiss", or wade through a ton of responses from even highly refined and tailored direct mail prospects. It's just the law.

We've got to expect that we'll kiss a bunch of liver-spotted, warty reptilian organisms before we finally discover the prince/princess!

Even then, turning the frog into a prince, isn't just a matter of kissing the thing. No. The devil's in the details.

Meanwhile frog kissing is what we do as investors. That's why RE is so profitable, too. Very few people want to spend the time, energy, and money doing that.

The squeamish, lame, and/or lazy won't do the spade work required to find those green, slippery buggers. What's worse is the newbie frog kissers get things backward. They look for princes/princesses instead of the frogs. We don't really find the princes/princesses by looking for princes or princesses. No. We can only find the "royal gems" by looking first for the frogs, and well, "kissing them" first.

That is, looking first for "problems". Or better; recognizing problem properties or owners with problems. Then analyzing the numbers (comps, repairs, etc.); making offers; waiting for counter offers; being patient; and finally being willing to "unsuccessfully" negotiate a deal --- over and over again. That last part is important. The impatient investor often is unwilling to "lose" a deal, and then puts himself in a weak position, or worse --- "marry" the frog.

Meanwhile, the impatient investor thinks by insisting on bargaining that the frog will by sheer force become that prince of a deal. Wrong!

Frogs don't become princes because we're desperate and settle. Frogs show themselves as princes when we care less than the "frog" sellers do. That means that we search patiently for the frog that will become a prince only by making many, many profitable offers in the first place; by knowing our farms better than anyone else, and being willing to kiss as many frogs as it takes for the princes to appear! That's always just a lot of plain ol' frog lips to wade through, huh?

So be patient, know your farm, make lots of "profitable" offers, care less than the frog sellers when negotiating, and eventually one of the frogs you kiss will turn out to be your Prince.

Great RE Website (Plus some)

This is what happens when two investors get together at a theme park!

Agents work for themselves, not us!

There's just something about relying on agents as a professional investor that goes against my grain.

I suppose it's just the fact that the agent has a different objective than I do. They want a "closing". I want a "deal".

Agents "have" to have a closing to pay their bills and overhead.

I don't "have" to have squat.

Frankly, to put our opposing objectives into relief, if I don't insist on only buying "deals", I'll only have "squat" in the end.

Recently I interviewed a professional (full time) real estate agent that I'll call Pedro, that was listing a short sale property. The acreage had a stick built home on it, and at roughly $80k an acre, it seems like a great price --- not wholesale, but a good price for an end-user.

After talking to Pedro for a bit, I realized that even though this agent was open and frank about his feelings regarding the market, I had to pause and remember I was not only talking to Pedro ---- I was talking to a Pedro. Yes and this Pedro was quite persuasive informing me that I shouldn't wait until the market bottomed out before I bought, but should realize that a bargain now, held on for many years, would prove a decent investment --- especially if I had "staying power".

Well yes, this might be true enough, but my objectives are not to rely on my staying power, just so that I can survive until the next rebound. I want only juicy deals that I can profit from today (regardless of my staying power thank you).

So, what's the Pedro thing anyway, one asks. Here's the story...

Once upon a time there was a feisty US Marshall chasing two stage coach Banditos that had robbed the stage of it's gold.

While capturing and handcuffing the robbers, the Marshal realized the thieves spoke no English. The Marshall was helpless to find out where they hid the gold without a translator. So he dragged the scoundrels into town and found a man called Pedro to translate. When Pedro found out why the Marshall needed his help, Pedro smiled and happily obliged.

Meanwhile, the Marshall was waving his six-shooter at the thieves heads demanding to know where they hid the gold, and threatening to blow their heads off if they didn't tell him what he wanted to know.

Pedro translated exactly what the Marshall requested to the two thieves saying, "If you don't tell the Marshall where you hid the gold, the Marshall says he'll shoot both of you in the head!" They looked at the Marshal waving the pistol back and forth just waiting to shoot them. Fearful the Marshal had a trigger-finger they gave in and explained to Pedro that they had buried the chest of gold under the Oak tree at the Three Forks river bend.

Desperate, the Marshall demanded to know what the bandits said. Pedro turned to the Marshall and replied, "They said, 'Go ahead and shoot!'"

The Dead Cat Bounce? Specu-tard vs. Specu-vestor

This article was forwarded to me and I think it's a good reminder and warning to avoid following the lead of impatient amateurs, and specu-tards in this current market. The definition between that of a "specu-vestor" and a "specu-tard" is market timing!

Also, I want to provide a link here to the real estate timing expert of all time, Robert Campbell ("Timing the Real Estate Market"), who has a popular web site (I get nothing financially out of this referral, expect a warm and confident feeling that you'll benefit as much as I have from his book) that you might consider.

What's more Robert's book and information will help more of us avoid making the mistake of interpreting a "dead cat bounce" as a full-on RE rebound.

Robert Campbell's Webpage

What do you think?