Archive for March, 2009

There is something you can do…

Thursday, March 26th, 2009

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Rex Houze, in his newsletter Leadership Insights www.improve-results.com

asks, "Is there anybody left in the country who doesn’t know that things are bad right now? Really bad. And going to get worse. Much worse. We’re all going down with the sinking ship. All of us. At least, that’s what the media wants us to believe. They’re sellers of the sensational and peddlers of panic."

"But there is something you can do…"

  • Believe, while others are doubting.
    • Plan, while others are playing.
      •  Study, while others are sleeping.
        • Decide, while others are delaying.
          • Prepare, while others are daydreaming.
            • Begin, while others are procrastinating.
              • Work, while others are wishing.
                • Listen, while others are talking.
                  • Smile, while others are pouting.
                    • Commend, while others are criticizing.
                      • Persist, while others are quitting.

"William Arthur Ward wrote these words many years ago, but they are especially significant right now."

“Ladies and gents, it’s time to buy a house”

Friday, March 20th, 2009

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Quoted from thestreet.com: ‘ "Ladies and gents, it’s time to buy a house," Jim Cramer told the viewers of his "Mad Money" TV show Wednesday.

He said his prediction last year that a bottom in housing is coming in just 105 days from now is looking better and better by the day.

Cramer again sang the praises of Federal Reserve Chairman Ben Bernanke for not only adopting many of the ideas Cramer has been preaching, but also setting up what he called a pending economic explosion.

He said with the Fed’s announcements today, Bernanke has single-handedly created the 4% mortgage rate that Cramer said would be needed to stabilize home prices and stop home price deflation.

Cramer also commended the Fed’s new loan programs that will help hedge funds buy up the now not-so-toxic mortgage backed securities. He said that these moves, along with the reinstatement on the uptick rule, and new mark-to-market accounting rules, are exactly what the banks, the markets, and the economy needs.

Cramer said he doesn’t care if these moves hurt the dollar, saying that a weaker dollar actually helps U.S. businesses compete in the global marketplace. He said it’s far better for the Fed to do too much, than too little.’

 Link to the entire article:

 http://www.thestreet.com/story/10474212/1/cramers-mad-money-recap-bernankes-fabulous-move.html?cm_ven=GOOGLEN

Is the Fear leaving your market?

Tuesday, March 17th, 2009

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We received this from a franchisee in response to our question about the market. This franchisee asked to remain anonymous, so we will respect the request.

His last paragraph includes a profound and exciting observation: "We are definitely seeing the fear leave the market."

What will happen when fear leaves the market? What will happen when fear leaves your franchise? This reminds me of a quote from Who Moved My Cheese: "What would you do If you weren’t afraid?"

Here is the note from the franchisee:

I just wanted to write all of you to let you know how we are doing.

  •  We are stronger today than we have been in 14 months.
  • We have reduced our overhead in the last 8 months by 20k per month.
  • We are spending 5k with HVA per month and we are sending 6500 dig lead letters per month.
  • Our buys have become much more profitable.
  • We have learned how to successfully rehab profitably (3 week turn around).
  • We have a waiting list of investors wanting to buy our wholesale deals (when priced right)
  • We have put our last 4 retail deals under contract in 35 days or less.
  • We sold 4 houses in the last 2 weeks. (81k net) plus we are assigning a house on Thursday for $6k.
  • This will be our most profitable 1st quarter ever.
  • We have paid down 42k in debt so far this year.
  • Our buys are down (we are working on that), but profit per deal is way up.
  • I feel very positive about the business and so do my employees and partner.

 We are definitely seeing the fear leave the market. In the last 2 weeks I have had three investors come to us looking for houses, two have 250k and one has 500k to spend. The interesting part is that two have never bought investment property before and one has not bought in 3 years.

 

What do you see happening in the market?

Friday, March 13th, 2009

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I had several recent calls with franchisees that have been surprisingly upbeat about the market. Paul Parker in Denver said they are having trouble buying because there are so many investors coming out bidding on properties. He said it is almost like a "frenzy." Rickey Williams reports that the inventory of houses on the market in Houston has actually dropped over 6% in the last year. Nick Cifaldi, in Philadelphia, said he has had a good 6 weeks, though there are still challenges. Even Minas Litos said there are parts of the area surrounding Gary Indiana that are showing life.

Then I had a conversation with Mike Blatney, the manager of our REO department. He reports that activity across the country has definitely increased. "We have received multiple offers on 3 different properties in the last two days. I do not remember that ever happening." Mike went on to explain that he believes investors are seeing that there is a "window of opportunity" and that many are afraid they may miss it! (He also shared how we have put over a third of our REO properties under contract. We closed more in the last month than we have in the last 5 months combined!)

So, what do you see happening in your market?

And, Why do you think the activity is picking up? Is it:

  • The normal increase we see every spring?
  • Are investors beginning to see that the bottom is near, and it is time to jump in?
  • Is it the stimulous package, and the $8,000 tax incentive?
  • Maybe some combination of all three?

The Importance of Adversity

Wednesday, March 11th, 2009

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We have had a lot of challenges these last few weeks. Then, as if we did not have enough challenges, we had an email meltdown.

The evening before the email meltdown, I read a chapter in a book our Sunday school class is reading on adversity. (I would recommend the book – One Month to Live by Kerry and Chris Shook.) This chapter is on the importance of adversity. They explain how most of what we learn is a direct result of adversity. Without adversity, we do not progress. Adversity also strengthens our faith.

This is easy to watch in our kids. How they learn to deal with adversity will have a lot to do with their success in the future. If they receive a bad grade, do they blame the teacher? Or spend extra time studying? When the coach doesn’t play them, do they respond by practicing even harder?

Sometimes it is not as easy to see in ourselves. When we have a challenge like we did on the email issue, we have to learn from our mistakes, and find a solution for the future.

These challenging times will make us stronger as a company. Here are some of the "opportunities" for us to grow as a result of our adversity:

  • As a company, we are reviewing all our critical services to make sure we do not let the franchises down like we did with the email. 
  • We have had to focus on what we do well, and how we can best serve the franchise.
  • What is it we do that does not create value, and how can we stop doing these things?
  • Can we become more "franchise friendly?" When times are good, the "my way or the highway" mentality has a tendancy to sneak in. When we are struggling, we are much more appreciative of the franchisees we have.

 How do you respond to adversity?

The market we are in will create a lot of challenges. Those that learn to deal with the adversity will come out stronger in the end. 

The TX Legislative Summit – A Warmup for Day On The Hill

Sunday, March 8th, 2009

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The Texas Legislative Summit last week seems to have been a resounding success.

Though it is not official yet, the feedback is that SB 354, which would be very detrimental to Texas franchisees, is  not going anywhere in it’s current form.

This meeting did emphasize the importance of participating in our legislative process. It is vital we help educate our legislators on issues important to our industry.

It also showed how important HomeVestors of America is to this process. I want to thank the HVA team that participated: Suzanne and Rick Edson, Mike Hambright, Peter Pesoli and Mike Blatney. Our team was split in different groups so we could have the greatest impact.

The feedback we received is that this bill is only the first of many that will be introduced in state legislatures and congress over the next few months. Now more than ever, it is important we be involved.

The next opportunity you have to participate in the process is the National REIA Day on the Hill April 22-23. Make plans now to attend. Every Ad Council should send at least one representative!

Why we do what we do!

Friday, March 6th, 2009

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Our franchisees have a tremendous impact on the people, and the neighborhoods we serve. Tim Risley, with Front Door Properties, sent this email from one of his customers:

Good morning Tim,

I  want to thank you for all that you have done. I know you went far above and beyond to make things as easy for me as you could. It was such a breath of fresh air working with someone that I felt I could trust, given the situation with my "family". You had to listen to so much crap and still didn’t run in the other direction!

I also want to share with you…I think I had mentioned to you, yet another brother that lives just around the corner from the house you bought from me, we haven’t talked in probably a year, and he called me the other night to thank me for evicting (names removed) from the property!

He said the neighbors are so happy to have them gone, it looks like you’ll be a hero in the neighborhood!

Thanks again!

Kathee

Texas Legislative Summit

Tuesday, March 3rd, 2009

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Tonight began the Texas Legislative Summit. 

As sponsor of the event, HomeVestors is playing a key role in helping defeat potential harmful legislation to our industry in Texas (SB 354).

After the opening session, I joined the two key lobbyists and the National President of REIA on an appointment with one of the most influential senators in Texas and the chair of four key committees, Senator John Carona. Senator Carona was very supportive, and gave us several suggestions.

At the end of the meeting, he turned to me and asked, "How is HomeVestors?"

Later, the president of one of the largest independant real estate groups took me aside and asked about the company. He explained how "We all need HomeVestors."

I want to thank the franchisees who are attending this event, and Mike Blatney from our staff. As the only national company, HomeVestors has a key role in protecting our industry.