Today’s blog is more about attitude than real estate, however, it is all intertwined.  The advent of Facebook has really changed things exponentially.  Before I get to that, I want to say something about a friend of mine.

This friend sold a company a few years ago and became a multi-millionaire.  He lives in my farm area (this is a geographical area that I work as a real estate agent) and I have known his family for 8 years now. 

He first called me to pick my brain about real estate and then told me he liked my marketing and my low key style.  Since then, I have helped him lease and buy real estate very successfully.

The other day, we were discussing rental properties and his attitude amazed me.  i told him about a specific property and that if we could get it for $550,000, we would not be stealing it, but it would still be around 6% under the market value.  he told me that was fine and that his father once told him: “Leave a little for the next guy!”

I have since saved that saying on my phone to remind me the leave a little for the next guy.  What does this mean? Well, in real estate it means, take the deal because you will have some extra equity when the market comes back.  However, I like what it means in the bigger picture.  It means be magnanimous like John Rockefeller - remember how he would give people a dime when he met them?  In 1900 a dime was like getting $69 today!

Today, people and governments are trying to find any way to either make or save money.  Unbelievably, California is thinking of legalizing marijuana because it will bring in more money.  What?  Money is not the answer; attitude is.  Have you really looked at what is available at the grocery store today?  Have you noticed the prices?  The basic needs like eggs, broccoli, apples, are very inexpensive and those are the foods we should be eating anyway. 

In 1998, I was still coaching high school baseball and making a transition to real estate.  I was 220 pounds with about 12% body fat and really strong.  I ate every 3 hours and cooked my own meals and took 2 steps at a time. 

Think about where you “were” 12 years ago.  How are you measuring it?  By how much you had in the bank?  By how much your house has gone up?  Take the measurement at a human level.  Think about your habits.  Did you eat more healthy?  Was your attitude more positive?

I think it is time to turn ourselves around by changing our outlook.

Last Friday, I took a day trip to Catalina Island and rented a small boat and anchored it in a little cove and swam around and explored.  The water was 71 degrees and crystal clear.  On the way back, I saw Dolphin jumping out of the water, birds singing, lizards basking in the sun.  Do you know that this happens each and everyday?

“Leave a little for the next guy!”

Now, if you are serious about living and or investing in the greatest area on Earth, go to www.MichaelDunn.com and click on the Search MLS banner and you will see some great opportunities.

Mike

George Steinbrenner and Real Estate!

A few weeks ago an amazing man, John Wooden, passed away and I was really impressed by what people had to say about him.  Not a single person had anything harsh or derogatory to say about him.  I found this very unusual because there is always someone who has a negative word. 

On Tuesday morning, George Steinbrenner passed away and the memorials were slightly different, but very surprising to me.  I found that George Steinbrenner was an amazing philantrophist in addition to a successful capitalist businessman.

It made me think about how I would be remembered.  I started thinking of how i have treated people.  Have I given to my community?  Have I treated my girlfriends the right way?  Have I worked to my potential?  Have I smiled at people who needed to see a smile? Have I called my parents enough?

By asking these questions of myself, I realized that Steinbrenner transcended baseball and was a supremely loyal man and owner.  Despite an amazing competitiveness, Steinbrenner managed to contribute to society and help others become successful.

 This brings us to Real Estate.  I have asked myself if I am helping others enough with their needs.  I recently research my past clients and noticed that none of them are in financial hardship, or forced to do a short sale.  I am proud of that.  I remember asking my clients at the time they bought the property, “are you sure you can afford this if either the market or your job goes South?”.  This was important to me in many ways.  Foremost, was the future.  I am here to help others for the long-term, not to get a fast buck and spend it just as fast.

As a result, I look for deals in both regular real estate and foreclosures . . . for the long-term.  I think all of us should play Monopoly again and really analyze what we are doing.

Speaking of Monopoly, go to www.NorthwoodPointeIrvine.com and http://www.michaeldunn.com/real_estate/searchMLS.asp and see how you can not only find a great home for your family, but a great investment for the future.

Happy investing.

Mike

Microsoft Bing is a new search engine by Mircrosoft that has been aorund for over a year now and ranks as a top 20 search on the internet.  It is alos testimony to the constant effort by Mircrosoft to maintain a presence not only on the internet, but also as a powerful corporation.

I have been in the real estate business for 12 years as a sales person, for 10 years as an owner and for 6 years as an investor and 3 years a sa foreclosure investor.  I am constantlky looking for ways to get more creative to not only help my career, but also to help others create opportunities to increase their net worth.

In todays’s market it is still fair to buy a ‘regular” property; you will still get a good deal.  If you wish to get a better deal, you can submit on a short sale or an REO (aka bank owned) property.  The best deals are foreclosures, but you have to pay all cash.

 Send me an e-mail because I noticed in the past 2 weeks, banks are releasing more foreclosures, especially in the upper end market.

Mike

Biggest Defaulters on Mortgages Are the Rich

By DAVID STREITFELD

Published: July 8, 2010

LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

Enlarge This Image

Peter DaSilva for The New York Times

A home in foreclosure in Los Altos, Calif., a city where the median home price is $1.5 million.

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Enlarge This Image

Peter DaSilva for The New York Times

A foreclosed house in Los Altos, Calif., where five such homes were recently set for an auction.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”

The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago — like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely.

In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties.

“I’ve never seen the wealthy hit like this before,” Mr. Lowman said. “They made their plans based on the best of all possible scenarios — that their incomes would continue to grow, that real estate would never drop. Not many had a plan B.”

The defaulting owners, he said, often remain as long as they can. “They’re in denial,” he said.

Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.

At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.

At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.

Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.

Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.

In a recent column on Freddie Mac’s Web site, the company’s executive vice president, Don Bisenius, acknowledged that walking away “might well be a good decision for certain borrowers” but argues that those who do it are trashing their communities.

The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default.

The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent.

With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans.

“Those with high net worth have other resources to lean on if they get in trouble,” said Mr. Khater, the analyst. “If they’re going delinquent faster than anyone else, that tells me they are doing so willingly.”

Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006.

“I just decided to let it go, give it back to the bank,” he told the celebrity gossip TV show “TMZ.” “I just didn’t feel like it was a good investment.”

The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults.

“They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest,” Mr. White said.

The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process.

In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick.

In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008.

The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two.

The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch.

But this is still Silicon Valley, where failure can always be considered a prelude to success.

In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing.

His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called “the global meltdown,” the man, a technology entrepreneur, said he quit making his $9,000 monthly payments.

“I’m going to be downsizing,” he said.

The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. “I’m a businessman,” he explained. “I have to be upbeat.”

 

Miss USA Rima Fakih and Real Estate!

The Miss USA contest was held on Sunday in Las Vegas and we have a new winner!

What does this have to do with Real Estate?  Well, actually quite a bit with this last Miss USA contest.  Here is why:

Rima Fakih, the new Miss USA, was walking down the stage when she slipped; did not fall but had a noticeable slip.  The real estate correlation is this:  I have had a few people tell me with they shy away from buying rental properties because they have heard bad things about tenants.  Well, if Rima Fakih knew she was going to stumble on national television, but she would win the contest, do you think she would still enter Miss USA contest?

Let me put it this way, if you knew you would have a tenant miss 2 months worth of rent over a 10 year period and the rent would cover your mortgage and in 10 years your property value would double, would you still buy the property?

YES, YES and YES you would!!!

The news today was all about Rima Fakih stumbling on her way to the win.  There is so much drama and negativity around even when someone wins.  The media has to dress everything up. 

When is the last time we saw a special news flash stating a property owner has been getting $500 per month positive cash flow and after 7 years, the value doubled?  We see more on the news about topless dancers.  Remember, real estate is not sexy or flashy, it is just consistent.  And in today’s economy, there is nothing sexier than consistency.

I wish I could convince all of you of what I know and have experienced, but many look at the “magic pills” instead of the steady healthy diet.

Including, if you are serious about investing, go to www.MichaelDunn.com  and do some research.

Mike

This is a rare Blog combination today, but they all have one thing in common . . . FLEXIBILITY!

Microsoft has been a very innovative and flexible company thru the years; always pushing the envelope and stretching to new regions in mind and software.  Evangeline Lily, one of the starts of “Lost” on television has a unique character of flexibility in her approach to life and as an actress.

In this current real estate market, flexibility is the key to not only survival, but it is the key to gaining financial freedom when the market turns around.  Be assured, the market will turn around. 

Just like Bill Gates looking for the next innovation, Evangeline Lilly looking for her next challenge, real estate offers you the same potential.  When the market drops, more opportunities begin to rise such as foreclosure flips, short sales, and regular equity sales that are more motivated to drop their price.

The key is to keep your mind open and learn what the trends are and also not to stray from the gold standard . . . location!

Speaking of location, you cannot do much better than www.NorthwoodPointeIrvine.com , www.ThePelicanEstates.com and www.MichaelDunn.com ; these three sites will answer any question you may have.

Happy investing,

Mike

 

Space Shuttle, Mike Brown and Real Estate!

Atlantis Space Shuttle got delayed but will be launched at 2 PM today on Friday, May 14, 2010. The space shuttle Atlantis blasted off from the Kennedy Space Center in Florida on Friday.

This space shuttle will replace the space shuttle Challenger. The average cost to launch a space shuttle is about $450 million. We forget about the Space Shuttle;e program sometimes because we have been so used to seeing them take off.  Remember when we watched the first one?  Ok, if your under 30, you may not remember, but still it was exciting.

The Cleveland Cavaliers could have used some of the Space Shuttles rocket fuel last night.  As a result, they will be firing their coach and go into a state of flux.

What does this have to do with real estate? You see the property taxes collected on real estate has helped pay for the Space Shuttle Program and the Cleveland Cavaliers collapse in the second round of the playoffs has a lot to do with making the right decisions.

To me, being a veteran of the real estate industry, I see things rather simply.  You buy a house that you can afford and just keep living a healthy lifestyle.  I know it sounds so ridiculously simple, but it works.  The main ingredient is being patient.  This is a centuries old virtue, yet due to this current economic crisis, will hopefully make a comeback as the number one character trait replacing greed!

I spoke to a builder a few weeks ago whop went thru the recession of the 1990s and he said he wished he would have rented out his vacant properties because when the market came back, he would have tripled his value.  Instead, he sold every thing really cheap to just get out of debt.

While it is always best to not get into debt in the first place, if you are in debt, be sure to analyze your options.  taking a few hundred dollars a month loss in exchange for a potentially $200,000 profit in 5 years, is a smart decision.  We as human beings, have a tendency to only look short term and as such we make wrong decisions.

Go to www.NorthwoodPointeIrvine.com and see what a good decision you will make if you invest there.

 Mike

 

Pandora Radio and Real Estate!

Pandora is an automated music recommendation service and custodian of the Music Genome Project. Users enter a song or artist that they enjoy, and the service responds by playing selections that are musically similar. Users provide feedback on approval or disapproval of individual songs, which Pandora takes into account for future selections.

While listening, users are offered the ability to buy the songs or albums at various online retailers. Over 400 different musical attributes are considered when selecting the next song. These 400 attributes are combined into larger groups called focus traits. There are 2,000 focus traits. Examples of these are rhythm syncopation, key tonality, vocal harmonies and displayed instrumental proficiency.

Modern technology is amazing, yet we still need human beings and a human connection to make sales.  Here is a prime example:  On Sunday, I met a family with 3 children looking to rent a house in Northwood Pointe.  We met at the property and after seeing the floor plan, they liked it ans asked about the neighborhood and specifically, the street the house was on.  I told them there were 17 children on the street ages 3 thru 16.  I found out what sports the two boys liked and told them about 3 children that are also involved with baseball.  The daughter loves to swim, so I told her about the Northwood Flash Swim team. They also asked me about the demographics; I explained to them that by law I cannot say definitely, so I showed them all the surnames for the owners.

I also told them to come back around 6PM, to get better idea of the neighbors.  They came back and loved the street and signed a lease agreement.

Just like your local police officer, it really helps to have an agent who keeps up with the happenings in the neighborhood.  On more than one occasion, I knocked on doors in an unknown neighborhood to get a feel for the community.  That is something Google, will not be able to detect.  The iPhone does not have the Special Agent Dunn App!

Well, I am off to another training session to work on my next mission, Operation: Swift Sale!

www.MichaelDunn.com and www.NorthwoodPointeIrvine.com

Mike

Mothers Day is this weekend and while we are all rushing out to buy flowers, take our Moms to lunch, we must remember that it much more than just thanking our moms with a one day attention.

What we should do is go thru our photo albums and look at pictures of us in our diapers, or crawling around on the grass, or wearing our first suit and tie.

We should also go thru our photo albums and look at our first large investment.  Yes, that’s right, amid the Christmas or Hanukkah pictures, playing baseball in the yard and washing our cars, sits a large boxy like structure that not only gives us shelter from the rain, cold, sun and wind, it also gives us future financial freedom.

Like our mothers, this structure will be there for us thru tough times and its love will be unconditional . . . if and only if, we treat it with respect and love.

www.MichaelDunn.com and www.NorthwoodPointeIrvine.com are the two best places to start another portfolio. 

Here are a few samples:

1. $1.2M to $2M: 20 Canyonwood, 9 New Dawn, 36 Clear Creek, 7 Photinia

2. $1M to $1.2M: TBA - 5 beds, 3 baths, 3,100 square feet, TBA 5 beds, 3.5 baths, 3,500 square feet, 3 car garage.

3. $800,000 to $1M: 91 Shadywood, 62 Montrose, 8 Rosslyn, TBA - 4 beds, 3 baths, 2,500 square feet.

4. $600,000 to $800,000: 138 Trellis, TBA 4 beds, 3 baths, 2,200 square feet.

5. $200,000 to $600,000: Send me an e-mail for this weeks trustee sales info; you can get 20% under market but you must pay ALL CASH.

Mike

You probably know what the Dow Jones Index is, but to refresh your memory . . .

The Dow Jones Industrial Average is generally what people refer to when they talk about how “the market” is doing. (That or the S&P 500, most likely.)The DJIA is a price-weighted group of 30 prominent stocks, including Johnson & Johnson, Wal-Mart, GE, ExxonMobil, and Coca-Cola.

The DJIA is a benchmark group of stocks maintained and reviewed by the editors of The Wall Street Journal. Changes to the component stocks are rare. A member stock, according to Dow Jones, has “an excellent reputation, demonstrates sustained growth, is of interest to a large number of investors, and accurately represents the sector(s) covered by the average.”

Charles H. Dow launched the DJIA in 1896 to help investors see long-term trends in the market, instead of just daily fluctuations. Watching the performance of this basket of leading stocks today gives investors a sense of how the overall market is faring and offers a point of comparison for the performance of their own stocks. Certain index funds or exchange-traded funds mimic the Dow’s performance by buying pieces of each of the member stocks.

What does this mean to you and real estate?  Well, in general, the better the Dow does, the better we as an overall economy perform.  However, real estate is quite different.  As an example, if I were a foreclosure flipper, I would be doing very well right now.  If I were a long term investor, I would be buying low, renting out my properties and holding them for 5 years when the market returns.  here is the key question, what is YOUR Dow Jones?

For you it may be your savings account, your ROTH IRA or your CD.  For me it is my real estate portfolio . . . and it should be for you too.  I know, I can hear you.  “Mike, what are you talking about?  Tne real estate market is still correcting and there are more foreclosures coming.”  yes, you are correct, however, do you want to be the person reading the paper, or the one who is making the news?

To be honest, I can help you in whatever you want.  if you are looking to buy a foreclosure, I can buy it for you at the courthouse steps.  if you want a bank owned home, I am a preferred broker for One West Bank.  If you want a good deal on an non-California investment property, I can get it for you.  if you want a straight deal in the best family neighborhood in the nation, I can get it for you.

To start, go to www.NorthwoodPointeIrvine.com and www.MichaelDunn.comto see what is out there and if you are serious, call me to discuss further.

Mike