Multiple real estate solutions…

Real Estate Investing is just like this blog by Dan Miller about finding multiple solutions to problems.

1. Can you find the solution here… by Dan Miller of 48 Days at http://48daysblog.wordpress.com/
Many years ago in an Indian village, a farmer had the misfortune of owing a large sum of money to the village moneylender. The old and ugly moneylender fancied the farmer’s beautiful daughter, so he proposed a bargain. He would forgive the farmer’s debt if he could marry his daughter. Both the farmer and his daughter were horrified by the proposal, but the cunning moneylender suggested that they let providence decide the matter. He told them that he would put a black pebble and a white pebble into an empty money bag. The girl would have to reach in and pick one pebble from the bag. If she picked the black pebble, she would become his wife and her father’s debt would be forgiven. If she picked the white pebble, she need not marry him and her father’s debt would still be forgiven. If she refused to pick a pebble, her father would be thrown into jail until the debt was paid.

They were standing on a pebble-strewn path in the farmer’s field. As they talked, the moneylender bent over to pick up two pebbles. The sharp-eyed girl noticed that he had picked up two black pebbles and put them into the bag. He then asked the girl to pick a pebble. Now, imagine that you were the girl standing in the field. What would you have done? If you had to advise her, what would you have told her?

Careful analysis would produce three possibilities: (1) The girl could refuse to take a pebble—but her father would then be thrown in jail. (2) The girl could pick a black pebble and sacrifice herself in order to save her father from debt and imprisonment. Or (3) The girl could pull out both black pebbles in the bag, expose the moneylender as a cheat, and likely incite his immediate revenge.

Take a moment to think through this story. I’ve used it with the hope that it will help you see alternate solutions beyond the obvious ones. The girl’s dilemma cannot be solved with traditional logical thinking.

You may be in a similar situation. You may be in a job you hate—but the pay is great. You think you have two choices: (1) You can stay in a job you hate. (2) You can leave the job but will then give up the great pay. Are these really all the options? Or you may not have a job right now. So you think either you must “find a job” or continue with no income? Could there maybe be other options?

Here is what the girl did. She put her hand into the money bag and drew out a pebble. Without looking at it, she fumbled and let it fall onto the pebble strewn path, where it immediately became lost among all the other pebbles. “Oh, how clumsy of me,” she said. “But never mind, if you look into the bag for the one that is left, you will be able to tell which pebble I picked.” Since the remaining pebble was black, it would have to be assumed that she had picked the white one. And since the moneylender dared not admit his dishonesty, the girl would have changed what seemed an impossible situation into an extremely advantageous one.

Now, how could you see more creative solutions for your situation? A couple of years ago I coached a very successful media executive who came to me with a dilemma. Because he was so respected, he had been given increasing responsibilities over the years. His current position had squeezed out all his family and community commitments. He was working seventy to eighty hours a week, but he had also become used to the $180,000 in annual pay. He was considering whether to just accept his lot in life or to quit his job, give up his salary, and seek a more balanced life.

I proposed another choice. Since he was valued, why not approach his superiors with a new solution? Delegate much of his workload to allow him to contribute in his strongest areas of competence. They readily agreed. He was able to go back to a forty-hour workweek with no decrease in compensation. He began playing the cello professionally again, volunteering in his son’s school, playing in occasional golf tournaments, and managing his church bookstore. Simply by asking for a less than obvious solution, he was able to move into a new season of true success.

Moral of the story: Most complex problems have multiple solutions, if only we attempt to think beyond the obvious choices. Practice coming up with 4 or 5 possibilities for any situation you’re facing and you will begin experiencing success that few people discover.

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This story and others are found in No More Mondays – with lots of new solutions to work issues. Use this coupon – NMMSPECIAL — for a $10.00 discount right now – we’ll send you the hardback book and also give you an immediate electronic copy. ($13 total)

By the way do you need a thinker working with you on your real estate problems if so call me at 512-689-6742.

Are you growing your business?

One of the things I want to do this year is grow my business. So I began looking for opportunities to invest and to put together another group investment or syndication. I found a small apartment complex in one of the communities close to my home base and decided to go and look at it b/c it was a screaming great deal! I had to drive a little while to get to it but not too far. This neighboring community is very different from my home base but If I invest again in this area I will have a little experience in the area and may be able to get better results then I did when I first went into the area. This particular property is a foreclosure that appears was just over leveraged and once the debt service became too much for the previous owners they gave it back to the bank. The bank has hired a out of town broker who co-brokered the deal with a local guy. The local broker is a good guy and understands this market very well. He met me at the property and showed me around. Luckily for the bank and for me if I buy it the property has a guy looking over it and keeping the copper from growing legs. “growing legs” means things just get up and walk off i.e. get stolen borrowed or otherwise disappear. There are very few worse things that can happen then your HVAC’s, copper pipes, and wires growing legs. To replace those things cost an arm and a leg. I wanted to talk a bunch of pictures of the property but after I got there my battery died in the blackberry! Luckily the broker also has a blackberry and had his car charger so he let me charge my phone! After walking thru the place I decided that it as in ok shape and needs some work but nothing I think I cant handle so I made an offer to buy it all cash with no contingencies!

I did not offer the asking price b/c the agent and I talked a little about what I think about the property and about where the market it for this type of property. I think that the bank will need to take a bath on it and if I am able to help them I will try to do my part. This property would not be a good deal for me but a great deal if I am able to fix the problems. If I am not then it could turn into just a good deal. If all I can do is just buy a good deal then I should stay at home b/c good deals are a dime a dozen. What makes this business great is finding the great deal! The hardest thing in the world is to NOT BUY A GOOD DEAL. Good deals come along all the time but a great deal! Those are rare and when you have the potential to bring one of those down you have to be ready! If you have used all of your gun powder (investment capital) on good deals then when a great deal comes along you can not kill it and bring it home to feed your family b/c you have been taking all of these good deals.

If I get a good response from the bank I am going to talk to the current lone resident manager who is looking after the place to make sure nothing grows legs. I need to know what he knows and what happened to the past ownership.

If I end up buying it I will create an entire case study of it and post it on my case study page. Otherwise I will just write about my experience and see what happens.

This property is what I call a dirty ugly, ultra low-income property! I don’t call things a slum b/c in my opinion you can own low-income property and run it like a decent place to live or you can become a slum landlord! The property becomes a slum b/c of ownership 1st and foremost. If ownership cares then management cares and if management cares then resident’s care if everyone cares the place can be for lower income people but still be a great community and a great investment.

What is a dirty ugly?

it is a property that is dirty and ugly.   Need an example see below.

Why would someone own this????