Wednesday, March 29, 2006
I feel like it is important to understand the psyche of the fed in order to know where future markets will take us. Overall, it seems like constant inflation is what occurs. The fed simply hides this from the public...this is what i am finding overall.The real question is "what do we do about it?"
I.E> what investments will protect us from the feds actions? So far, my gut always tells me in such environments, organic commodities make the most sense.
this means, raw earth like real estate, possible gold, timber and timberland.
these seem to be inflationary hedges as currency gets devalued over time compared to these things.
being a landlord will always be profitable it seems to me.
The Federal Reserve - Its Origins, History & Current Strategy
By: Wayne N. Krautkramer
Few perceive the truth about the Federal Reserve. Rare are those who know its origins. It is right in front of us, but our relative ignorance of economics and history is their protection. A quick history lesson is in order. On October 14, 1066, AD., King William I (the Conqueror) founded the English monarchy. The Corporation was created by William in 1067 AD. to facilitate trade, and assure the continuation of the wealth of the monarchy. The City of London's legal name is The Corporation of the City of London. The City of London has unique political and economic privileges that do not apply to Greater London, or anywhere else in the British realm. The "City" even has its own police force that is sovereign. The Bank of England was granted a royal charter on July 27, 1694, by William III to regularize the monarchy's finances. This scheme was invented by a Scot promoter named William Paterson. The scheme was to create a bank with a "fund for perpetual interest". Fractional reserve banking was created, along with the radical monetary concept of a "monopoly" bank which would create money for loans that would never be repaid. A perpetual money machine for the monarchy was born. The permanent National Debt was born. The Bank of England would finance the emerging empire from its headquarters in the City of London. Never again would the lack of money, or liquidity, hamper the British empire under normal economic conditions. Conveniently, the monarchy also controls the City of London. This assures that the heart of the economic machine will always be protected. The United States fought a hard and expensive war against England in 1776 to achieve sovereignty. That included the right to have her own currency, control her own tax policies, and the avoidance of involvement in the affairs of other nations. HistoryCentral.com > > War of 1812> United States Declares War on Great Britain The United States declared War on Great Britain on June 12, 1812. The war was declared as a result of long simmering disputes with Great Britian. The central dispute surrounded the impressment of American soldiers by the British. The British had previously attacked the USS Chesapeake and nearly caused a war two year earlier. In addition, disputes continued with Great Britain over the Northwest Territories and the border with Canada. Finally, the attempts of Great Britain to impose a blockade on France during the Napoleonic Wars was a constant source of conflict with the United States. The US did everything in their power to remove British influence and control from this continent. Again and again we defeated all attempts to allow our money to be controlled by a National (Central) bank. When Central banks were established, we abolished them. Times changed, and Thomas Woodrow Wilson was elected. The intellectual who wanted the League of Nations (the progenitor of the United Nations) was elected. Under his leadership, we received the Federal Reserve, and the Sixteenth Amendment (Income Tax) shackling us into slavery to the British Crown forever. In 1917, Wilson made the world safe for democracy by plunging the US into World War I On December 23, 1913, the Federal Reserve Act, also known as the Glass-Owen Bill, was passed. The Republican controlled Senate rammed the bill through when many members of the US Congress were home for the holiday. The President, Dr. Thomas Woodrow Wilson, signed it into law one hour after being passed by the Congress! Somebody very powerful really wanted this law passed. The Federal Reserve System is an independent central bank. Although the President of the United States appoints the chairman of the Fed, and this appointment is approved by the United States Senate, the decisions of the Fed do not have to be ratified by the President, or anyone else in the executive branch of the United States government. Buried in the legislation was the granting of total power over the monetary policies of all US banks. A very curious statement is found in the original 1913 law. SEC. 30. The right to amend, alter, or repeal this Act is hereby expressly reserved. Reserved expressly to whom, or what? No definition is provided. This is the entire Section 30 statement! "Curiouser and curiouser, cried Alice". Stock not held by member banks shall not be entitled to voting power. This clause guarantees that no outsider can justify buying shares in the Federal Reserve. "But wait! There's more!" Sec. 341 Second. To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law. The Federal Reserve was only given a corporate life of 20 years! Their time was up in 1933 Who was President at that time? Franklin. D. Roosevelt, of course. Somehow, the Federal Reserve's termination did not occur. Reader, do I have your attention yet? My research failed to find any reauthorization of the Federal Reserve Act of 1913, other than the tacit approval given by the Sarbanes-Oxley Act of 2002. No Senator or Representative in Congress shall be a member of the Federal Reserve Board or an officer or a director of a Federal reserve bank. No member of Congress is have access to the inner sanctum! Hello, what is this? Are they afraid that an American might come upon something untoward? 12 USC 3019 Federal reserve banks, including the capital stock and surplus therein, and the Income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate. People, I think we are a roll now. SEC. 25.Any national banking association possessing a capital and surplus of 1,000,000 dollars or more may file application with the Federal ReserveBoard, upon such conditions and under such regulations as may be prescribed by the said board, for the purpose of securing authority to establish branches in foreign countries or dependencies of theUnited States for the furtherance of the foreign commerce of the United States, and to act, if required to do so, as fiscal agents of the United States. Such application shall specify, in addition tothe name and capital of the banking association filing it, the place or places where the bankingoperations proposed are to be carried on, and the amount of capital set aside for the conduct of its foreign business. The Federal Reserve Board shall have power to approve or to reject such application if, in its judgment, the amount of capital proposed to be set aside for the conduct of foreign business is inadequate, or if for other reasons the granting of such application is deemed inexpedient. Wow, the US government has no formal control over the foreign operations of the Federal reserve banks! The Federal reserve banks are exempt from all taxation. These people are very independent. Independent of audits, independent of congressional supervision, and independent of the American voter. The Federal Reserve claims that nobody owns it – that it is an "independent entity within the government." The Federal Reserve is subject to laws such as the Freedom of Information Act and the Privacy Act which cover Federal agencies but not private corporations; yet Congress gave the Federal Reserve the autonomy to carry out its responsibilities insulated from political pressure. Each of the Fed's three parts – the Board of Governors, the regional Reserve banks, and the Federal Open Market Committee – operates independently of the federal government to carry out the Fed's core responsibilities. Once a member of the Board of Governors is appointed, he or she can be as independent as a U.S. Supreme Court judge, though the term is shorter. As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. (The Fed's financial independence arises because it is hugely profitable due to its ownership of government bonds. (It gives the government billions of dollars each year.) However, the Federal Reserve is subject to oversight by the Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. The only statements of ownership made by the Federal Reserve Board is an allusion to the twelve Federal district banks. This circle puts us back at the beginning, for no information is provided regarding the ownership of the twelve Federal district banks. However, a 1976 government study commissioned by the Federal Reserve Directors revealed the following: OWNERSHIP OF THE FEDERAL RESERVE Most Americans, if they know anything at all about the Federal Reserve, believe it is an agency of the United States Government. This article charts the true nature of the "National Bank." Chart 1 Source: ** Federal Reserve Directors: A Study of Corporate and Banking Influence ** - - Published 1976 Chart 1 reveals the linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn, Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control. George Bush presided over a minor change in the Federal Reserve Act. The Sarbanes-OxleyAct was passed in 2002. The American Congress failed again to deal with the Federal Reserve. Bush managed to keep all discussion and changes confined to some reporting requirements for financial institutions. Bush knows very well who he serves, and he really serves his master well. It's amazing how few grasped the significance of Alan Greenspan being knighted by the Queen of England! Greenspan was knighted on September 26, 2002. An obvious reward for preventing any real discussion, or change, of the Federal Reserve during the Sarbanes-Oxley Act debates. Had an American President been knighted, serious questions would have arisen. It was so each easier to reward her manager, Alan! Do you still believe that Alan Greenspan has the power of Dearth Vader? He is only a little man, faithfully serving his queen. The British Crown, or the British monarchy is the owner of the Federal Reserve. This is their real secret. The strategy of the Federal Reserve is their other secret. Again, it is right of front of us, but no one sees the obvious. The strategy of the Federal Reserve is to accumulate all the wealth through the very slow, but effective, technique of currency debasement. The monarchs of old used to shave or clip the coins as they passed through their treasuries. Now the process is more sanitary (no more clipping and scraping all those dirty coins). John Maynard Keynes clearly stated that at there is no more effective method of destroying a society than through currency debasement. The primary reason for its success is the inability of most people to understand that more is not necessarily better. A recent conversation highlighted Kenyes's observation. There is some agitation to raise the minimum wage in my state. I listened to a proponent of a higher minimum wage. I attempted to point out that an increase in a large number of people's income would only result in prices going up, along with the obvious tax increases. "What was I talking about?" was the response. I explained that some percentage of people might wind up dealing with tax bracket creep (increases), and all will have with the obligatory tax increases that follow from any price increase. If nothing else, the sales tax must go up because the prices have gone up. I was immediately informed that I was the most negative person they had ever talked to. The Federal Reserve will always debase the currency to take its cut, and guarantee that the government has a tax base available to feed its bureaucratic family. The government is a total slave of the Federal Reserve. For example, analyze the latest real estate boom. There will be a major boost in property taxes based on the new valuations. Many people will be surprised when they receive their new tax bill. This will guarantee more money for the government coffers. They know that people will do almost anything to keep their homes. What's another job or two per family? Besides, the extra job will provide more tax revenue for the government. This will require more day care, or baby-sitting services for many families, which create more income for the government. This will cause more meals to be eaten out, which creates more revenue for the government Meanwhile, prices will continue to go up, which creates more sales tax revenue for the government. Are you getting the point yet? Deflation is end of the government. The local, state, and federal government will all fail! This is the strategy of the Federal Reserve. The majority of the people will always believe that more is better. Knowing that, and now having a democracy ensconced in the US, it was time to feed and breed. Prices always go up, and everything is "Wunnerful, Wunnerful" Bring on the Champagne Lady. Alan runs the bubble machine. The illusion of money has destroyed most people since society (goverment) developed socialism. Democracy feeds on the illusion of something for nothing. As each demagogue promises more than his competition, the tax burden becomes oppressive. The monetary illusion serves to conceal the costs through currency debasement. This assures the complete destruction of the society that embraces this perversion. Any attempt to introduce logic into a dialogue will be defeated by claiming you're an elitist devoid of compassion. Envy, hate, and manipulated passions are the hallmark of democracies. While all this destruction is occurring, money diverted by the mechanism of currency debasement is constantly being transferred to the British Crown in the City of London. Any questions, gang? Free Markets For Free Men Wayne N. Krautkramer
I.E> what investments will protect us from the feds actions? So far, my gut always tells me in such environments, organic commodities make the most sense.
this means, raw earth like real estate, possible gold, timber and timberland.
these seem to be inflationary hedges as currency gets devalued over time compared to these things.
being a landlord will always be profitable it seems to me.
The Federal Reserve - Its Origins, History & Current Strategy
By: Wayne N. Krautkramer
Few perceive the truth about the Federal Reserve. Rare are those who know its origins. It is right in front of us, but our relative ignorance of economics and history is their protection. A quick history lesson is in order. On October 14, 1066, AD., King William I (the Conqueror) founded the English monarchy. The Corporation was created by William in 1067 AD. to facilitate trade, and assure the continuation of the wealth of the monarchy. The City of London's legal name is The Corporation of the City of London. The City of London has unique political and economic privileges that do not apply to Greater London, or anywhere else in the British realm. The "City" even has its own police force that is sovereign. The Bank of England was granted a royal charter on July 27, 1694, by William III to regularize the monarchy's finances. This scheme was invented by a Scot promoter named William Paterson. The scheme was to create a bank with a "fund for perpetual interest". Fractional reserve banking was created, along with the radical monetary concept of a "monopoly" bank which would create money for loans that would never be repaid. A perpetual money machine for the monarchy was born. The permanent National Debt was born. The Bank of England would finance the emerging empire from its headquarters in the City of London. Never again would the lack of money, or liquidity, hamper the British empire under normal economic conditions. Conveniently, the monarchy also controls the City of London. This assures that the heart of the economic machine will always be protected. The United States fought a hard and expensive war against England in 1776 to achieve sovereignty. That included the right to have her own currency, control her own tax policies, and the avoidance of involvement in the affairs of other nations. HistoryCentral.com > > War of 1812> United States Declares War on Great Britain The United States declared War on Great Britain on June 12, 1812. The war was declared as a result of long simmering disputes with Great Britian. The central dispute surrounded the impressment of American soldiers by the British. The British had previously attacked the USS Chesapeake and nearly caused a war two year earlier. In addition, disputes continued with Great Britain over the Northwest Territories and the border with Canada. Finally, the attempts of Great Britain to impose a blockade on France during the Napoleonic Wars was a constant source of conflict with the United States. The US did everything in their power to remove British influence and control from this continent. Again and again we defeated all attempts to allow our money to be controlled by a National (Central) bank. When Central banks were established, we abolished them. Times changed, and Thomas Woodrow Wilson was elected. The intellectual who wanted the League of Nations (the progenitor of the United Nations) was elected. Under his leadership, we received the Federal Reserve, and the Sixteenth Amendment (Income Tax) shackling us into slavery to the British Crown forever. In 1917, Wilson made the world safe for democracy by plunging the US into World War I On December 23, 1913, the Federal Reserve Act, also known as the Glass-Owen Bill, was passed. The Republican controlled Senate rammed the bill through when many members of the US Congress were home for the holiday. The President, Dr. Thomas Woodrow Wilson, signed it into law one hour after being passed by the Congress! Somebody very powerful really wanted this law passed. The Federal Reserve System is an independent central bank. Although the President of the United States appoints the chairman of the Fed, and this appointment is approved by the United States Senate, the decisions of the Fed do not have to be ratified by the President, or anyone else in the executive branch of the United States government. Buried in the legislation was the granting of total power over the monetary policies of all US banks. A very curious statement is found in the original 1913 law. SEC. 30. The right to amend, alter, or repeal this Act is hereby expressly reserved. Reserved expressly to whom, or what? No definition is provided. This is the entire Section 30 statement! "Curiouser and curiouser, cried Alice". Stock not held by member banks shall not be entitled to voting power. This clause guarantees that no outsider can justify buying shares in the Federal Reserve. "But wait! There's more!" Sec. 341 Second. To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law. The Federal Reserve was only given a corporate life of 20 years! Their time was up in 1933 Who was President at that time? Franklin. D. Roosevelt, of course. Somehow, the Federal Reserve's termination did not occur. Reader, do I have your attention yet? My research failed to find any reauthorization of the Federal Reserve Act of 1913, other than the tacit approval given by the Sarbanes-Oxley Act of 2002. No Senator or Representative in Congress shall be a member of the Federal Reserve Board or an officer or a director of a Federal reserve bank. No member of Congress is have access to the inner sanctum! Hello, what is this? Are they afraid that an American might come upon something untoward? 12 USC 3019 Federal reserve banks, including the capital stock and surplus therein, and the Income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate. People, I think we are a roll now. SEC. 25.Any national banking association possessing a capital and surplus of 1,000,000 dollars or more may file application with the Federal ReserveBoard, upon such conditions and under such regulations as may be prescribed by the said board, for the purpose of securing authority to establish branches in foreign countries or dependencies of theUnited States for the furtherance of the foreign commerce of the United States, and to act, if required to do so, as fiscal agents of the United States. Such application shall specify, in addition tothe name and capital of the banking association filing it, the place or places where the bankingoperations proposed are to be carried on, and the amount of capital set aside for the conduct of its foreign business. The Federal Reserve Board shall have power to approve or to reject such application if, in its judgment, the amount of capital proposed to be set aside for the conduct of foreign business is inadequate, or if for other reasons the granting of such application is deemed inexpedient. Wow, the US government has no formal control over the foreign operations of the Federal reserve banks! The Federal reserve banks are exempt from all taxation. These people are very independent. Independent of audits, independent of congressional supervision, and independent of the American voter. The Federal Reserve claims that nobody owns it – that it is an "independent entity within the government." The Federal Reserve is subject to laws such as the Freedom of Information Act and the Privacy Act which cover Federal agencies but not private corporations; yet Congress gave the Federal Reserve the autonomy to carry out its responsibilities insulated from political pressure. Each of the Fed's three parts – the Board of Governors, the regional Reserve banks, and the Federal Open Market Committee – operates independently of the federal government to carry out the Fed's core responsibilities. Once a member of the Board of Governors is appointed, he or she can be as independent as a U.S. Supreme Court judge, though the term is shorter. As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. (The Fed's financial independence arises because it is hugely profitable due to its ownership of government bonds. (It gives the government billions of dollars each year.) However, the Federal Reserve is subject to oversight by the Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. The only statements of ownership made by the Federal Reserve Board is an allusion to the twelve Federal district banks. This circle puts us back at the beginning, for no information is provided regarding the ownership of the twelve Federal district banks. However, a 1976 government study commissioned by the Federal Reserve Directors revealed the following: OWNERSHIP OF THE FEDERAL RESERVE Most Americans, if they know anything at all about the Federal Reserve, believe it is an agency of the United States Government. This article charts the true nature of the "National Bank." Chart 1 Source: ** Federal Reserve Directors: A Study of Corporate and Banking Influence ** - - Published 1976 Chart 1 reveals the linear connection between the Rothschilds and the Bank of England, and the London banking houses which ultimately control the Federal Reserve Banks through their stockholdings of bank stock and their subsidiary firms in New York. The two principal Rothschild representatives in New York, J. P. Morgan Co., and Kuhn, Loeb & Co. were the firms which set up the Jekyll Island Conference at which the Federal Reserve Act was drafted, who directed the subsequent successful campaign to have the plan enacted into law by Congress, and who purchased the controlling amounts of stock in the Federal Reserve Bank of New York in 1914. These firms had their principal officers appointed to the Federal Reserve Board of Governors and the Federal Advisory Council in 1914. In 1914 a few families (blood or business related) owning controlling stock in existing banks (such as in New York City) caused those banks to purchase controlling shares in the Federal Reserve regional banks. Examination of the charts and text in the House Banking Committee Staff Report of August, 1976 and the current stockholders list of the 12 regional Federal Reserve Banks show this same family control. George Bush presided over a minor change in the Federal Reserve Act. The Sarbanes-OxleyAct was passed in 2002. The American Congress failed again to deal with the Federal Reserve. Bush managed to keep all discussion and changes confined to some reporting requirements for financial institutions. Bush knows very well who he serves, and he really serves his master well. It's amazing how few grasped the significance of Alan Greenspan being knighted by the Queen of England! Greenspan was knighted on September 26, 2002. An obvious reward for preventing any real discussion, or change, of the Federal Reserve during the Sarbanes-Oxley Act debates. Had an American President been knighted, serious questions would have arisen. It was so each easier to reward her manager, Alan! Do you still believe that Alan Greenspan has the power of Dearth Vader? He is only a little man, faithfully serving his queen. The British Crown, or the British monarchy is the owner of the Federal Reserve. This is their real secret. The strategy of the Federal Reserve is their other secret. Again, it is right of front of us, but no one sees the obvious. The strategy of the Federal Reserve is to accumulate all the wealth through the very slow, but effective, technique of currency debasement. The monarchs of old used to shave or clip the coins as they passed through their treasuries. Now the process is more sanitary (no more clipping and scraping all those dirty coins). John Maynard Keynes clearly stated that at there is no more effective method of destroying a society than through currency debasement. The primary reason for its success is the inability of most people to understand that more is not necessarily better. A recent conversation highlighted Kenyes's observation. There is some agitation to raise the minimum wage in my state. I listened to a proponent of a higher minimum wage. I attempted to point out that an increase in a large number of people's income would only result in prices going up, along with the obvious tax increases. "What was I talking about?" was the response. I explained that some percentage of people might wind up dealing with tax bracket creep (increases), and all will have with the obligatory tax increases that follow from any price increase. If nothing else, the sales tax must go up because the prices have gone up. I was immediately informed that I was the most negative person they had ever talked to. The Federal Reserve will always debase the currency to take its cut, and guarantee that the government has a tax base available to feed its bureaucratic family. The government is a total slave of the Federal Reserve. For example, analyze the latest real estate boom. There will be a major boost in property taxes based on the new valuations. Many people will be surprised when they receive their new tax bill. This will guarantee more money for the government coffers. They know that people will do almost anything to keep their homes. What's another job or two per family? Besides, the extra job will provide more tax revenue for the government. This will require more day care, or baby-sitting services for many families, which create more income for the government. This will cause more meals to be eaten out, which creates more revenue for the government Meanwhile, prices will continue to go up, which creates more sales tax revenue for the government. Are you getting the point yet? Deflation is end of the government. The local, state, and federal government will all fail! This is the strategy of the Federal Reserve. The majority of the people will always believe that more is better. Knowing that, and now having a democracy ensconced in the US, it was time to feed and breed. Prices always go up, and everything is "Wunnerful, Wunnerful" Bring on the Champagne Lady. Alan runs the bubble machine. The illusion of money has destroyed most people since society (goverment) developed socialism. Democracy feeds on the illusion of something for nothing. As each demagogue promises more than his competition, the tax burden becomes oppressive. The monetary illusion serves to conceal the costs through currency debasement. This assures the complete destruction of the society that embraces this perversion. Any attempt to introduce logic into a dialogue will be defeated by claiming you're an elitist devoid of compassion. Envy, hate, and manipulated passions are the hallmark of democracies. While all this destruction is occurring, money diverted by the mechanism of currency debasement is constantly being transferred to the British Crown in the City of London. Any questions, gang? Free Markets For Free Men Wayne N. Krautkramer
article i like on credit repair to find clients
How To Do More Deals In Hot Markets By Offering Credit Repair
I don't know about where you live, but there is a _ _ _ _ load of competition in my area. ("boat load" . . . what were you thinking I meant?) There’s a bunch more real estate investors in my market than there was 2 years ago, 1 year ago, heck even 6 months ago!
I used to be one of the two or three obnoxious We Buy Houses ads in my local free Pennysaver newspaper (now I can't count them all), and bandit signs were as rare as honest politicians (now there’s a ton of them . . . bandit signs that is).
And the market is so hot here, that any reasonably priced deals whether advertised in the newspaper by FSBOs or entered on the MLS by agents, create an instant bidding war and are literally snapped up within hours.
Needless to say, we've had to get darned creative to find and get our disproportionately unfair share of the limited supply of real estate deals. Besides our superior intelligence and movie star looks, our real secret weapon has been offering the distressed seller credit repair or credit restoration services as it is sometimes called.
When talking to homeowners in pre-foreclosures, our sales pitch (oops . . . sales presentation) goes something like this:
"Mr and Mrs Seller, I understand that you've been going through a rough time these past months, but once things turn around, of course you will want to buy another house, get a new car, etc. Unfortunately, with the mess your credit is in right now that’s going to be pretty tough to do.
However Mr and Mrs Seller, I have a solution that no one else can offer you. If we do business together, at my expense, I will send you to a credit restoration service that will repair your credit. They can repair anyone's credit by deleting negative items from their credit report, even bankruptcies! I don't know how they do it, but these guys are good!
\n By repairing your credit, once again you will be able to get \napproved for a mortgage, a car loan, credit cards, qualify for lower interest \nrates and save thousands of dollars.\n The credit restoration services are worth at least { . . . insert \na dollar value here . . . }, and it\'s my way of helping you.\n Now, I just need your signature on a few real estate documents \nhere . . .\n Even though your cost for the credit repair services will only be \na few hundred dollars, I would suggest that you state a value of several \nthousand dollars . . . and in fact repairing their credit is worth thousands of \ndollars to the seller. Just consider how much money they will save because they \nqualify for significantly lower interest rates on loans as well as lower \npremiums for their car insurance. (Yes, auto insurance companies do partly \ncompute your premium based on your credit report!) The sellers should also know \nthat many employers now check prospective employees credit reports. (Yes again, \ngetting a job could partially depend on a person\'s credit report.)\n I can tell you from personal experience that offering to repair \nthe seller\'s credit will differentiate you from other real estate investors in \nyour market.\n Offering credit repair will also make it easier for you to find \nbuyers for your lease-option deals. While you may get some cash up front and a \nsmall monthly cash flow, the big payday for lease options is typically on the \nback end. But watch what happens when you offer credit repair:\n Do you think that your pool of prospective buyers might expand? \nCould you ask for a larger down payment? Could you add another $5,000, $10,000 \nor more to the sales price of the house?\n The answers to these questions are self evident.\n Well there you have it, you can do more deals in hot markets by \noffering credit repair to you sellers and buyers . . . come to think of it, this \ntip should make you more money in any market!!\n See ya at the bank . . .",1]
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By repairing your credit, once again you will be able to get approved for a mortgage, a car loan, credit cards, qualify for lower interest rates and save thousands of dollars.
The credit restoration services are worth at least { . . . insert a dollar value here . . . }, and it's my way of helping you.
Now, I just need your signature on a few real estate documents here . . .
Even though your cost for the credit repair services will only be a few hundred dollars, I would suggest that you state a value of several thousand dollars . . . and in fact repairing their credit is worth thousands of dollars to the seller. Just consider how much money they will save because they qualify for significantly lower interest rates on loans as well as lower premiums for their car insurance. (Yes, auto insurance companies do partly compute your premium based on your credit report!) The sellers should also know that many employers now check prospective employees credit reports. (Yes again, getting a job could partially depend on a person's credit report.)
I can tell you from personal experience that offering to repair the seller's credit will differentiate you from other real estate investors in your market.
Offering credit repair will also make it easier for you to find buyers for your lease-option deals. While you may get some cash up front and a small monthly cash flow, the big payday for lease options is typically on the back end. But watch what happens when you offer credit repair:
Do you think that your pool of prospective buyers might expand? Could you ask for a larger down payment? Could you add another $5,000, $10,000 or more to the sales price of the house?
The answers to these questions are self evident.
Well there you have it, you can do more deals in hot markets by offering credit repair to you sellers and buyers . . . come to think of it, this tip should make you more money in any market!!
See ya at the bank . . .
\nRick Kirschbrown, CreditRepairFoundation.com\n\n",0]
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Rick Kirschbrown, CreditRepairFoundation.com
How To Do More Deals In Hot Markets By Offering Credit Repair
I don't know about where you live, but there is a _ _ _ _ load of competition in my area. ("boat load" . . . what were you thinking I meant?) There’s a bunch more real estate investors in my market than there was 2 years ago, 1 year ago, heck even 6 months ago!
I used to be one of the two or three obnoxious We Buy Houses ads in my local free Pennysaver newspaper (now I can't count them all), and bandit signs were as rare as honest politicians (now there’s a ton of them . . . bandit signs that is).
And the market is so hot here, that any reasonably priced deals whether advertised in the newspaper by FSBOs or entered on the MLS by agents, create an instant bidding war and are literally snapped up within hours.
Needless to say, we've had to get darned creative to find and get our disproportionately unfair share of the limited supply of real estate deals. Besides our superior intelligence and movie star looks, our real secret weapon has been offering the distressed seller credit repair or credit restoration services as it is sometimes called.
When talking to homeowners in pre-foreclosures, our sales pitch (oops . . . sales presentation) goes something like this:
"Mr and Mrs Seller, I understand that you've been going through a rough time these past months, but once things turn around, of course you will want to buy another house, get a new car, etc. Unfortunately, with the mess your credit is in right now that’s going to be pretty tough to do.
However Mr and Mrs Seller, I have a solution that no one else can offer you. If we do business together, at my expense, I will send you to a credit restoration service that will repair your credit. They can repair anyone's credit by deleting negative items from their credit report, even bankruptcies! I don't know how they do it, but these guys are good!
\n By repairing your credit, once again you will be able to get \napproved for a mortgage, a car loan, credit cards, qualify for lower interest \nrates and save thousands of dollars.\n The credit restoration services are worth at least { . . . insert \na dollar value here . . . }, and it\'s my way of helping you.\n Now, I just need your signature on a few real estate documents \nhere . . .\n Even though your cost for the credit repair services will only be \na few hundred dollars, I would suggest that you state a value of several \nthousand dollars . . . and in fact repairing their credit is worth thousands of \ndollars to the seller. Just consider how much money they will save because they \nqualify for significantly lower interest rates on loans as well as lower \npremiums for their car insurance. (Yes, auto insurance companies do partly \ncompute your premium based on your credit report!) The sellers should also know \nthat many employers now check prospective employees credit reports. (Yes again, \ngetting a job could partially depend on a person\'s credit report.)\n I can tell you from personal experience that offering to repair \nthe seller\'s credit will differentiate you from other real estate investors in \nyour market.\n Offering credit repair will also make it easier for you to find \nbuyers for your lease-option deals. While you may get some cash up front and a \nsmall monthly cash flow, the big payday for lease options is typically on the \nback end. But watch what happens when you offer credit repair:\n Do you think that your pool of prospective buyers might expand? \nCould you ask for a larger down payment? Could you add another $5,000, $10,000 \nor more to the sales price of the house?\n The answers to these questions are self evident.\n Well there you have it, you can do more deals in hot markets by \noffering credit repair to you sellers and buyers . . . come to think of it, this \ntip should make you more money in any market!!\n See ya at the bank . . .",1]
);
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By repairing your credit, once again you will be able to get approved for a mortgage, a car loan, credit cards, qualify for lower interest rates and save thousands of dollars.
The credit restoration services are worth at least { . . . insert a dollar value here . . . }, and it's my way of helping you.
Now, I just need your signature on a few real estate documents here . . .
Even though your cost for the credit repair services will only be a few hundred dollars, I would suggest that you state a value of several thousand dollars . . . and in fact repairing their credit is worth thousands of dollars to the seller. Just consider how much money they will save because they qualify for significantly lower interest rates on loans as well as lower premiums for their car insurance. (Yes, auto insurance companies do partly compute your premium based on your credit report!) The sellers should also know that many employers now check prospective employees credit reports. (Yes again, getting a job could partially depend on a person's credit report.)
I can tell you from personal experience that offering to repair the seller's credit will differentiate you from other real estate investors in your market.
Offering credit repair will also make it easier for you to find buyers for your lease-option deals. While you may get some cash up front and a small monthly cash flow, the big payday for lease options is typically on the back end. But watch what happens when you offer credit repair:
Do you think that your pool of prospective buyers might expand? Could you ask for a larger down payment? Could you add another $5,000, $10,000 or more to the sales price of the house?
The answers to these questions are self evident.
Well there you have it, you can do more deals in hot markets by offering credit repair to you sellers and buyers . . . come to think of it, this tip should make you more money in any market!!
See ya at the bank . . .
\nRick Kirschbrown, CreditRepairFoundation.com\n\n",0]
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Rick Kirschbrown, CreditRepairFoundation.com
Tuesday, March 28, 2006
Michael Braga
Mortgage rates may rise even if Fed's rates don't
A lot of financial gurus are expecting the Federal Reserve to stop raising interest rates this year.If that happens, real estate agents say it would be good news for the real estate market. Mortgage rates would remain historically inexpensive and people will continue buying homes.But what happens if mortgage rates keep going up even if the Fed stops hiking the Fed funds rate, the rate it charges to banks for overnight deposits?When the Fed started raising interest rates back in June 2004, the rates charged on 30-year mortgages barely budged. While the Fed funds rate went up from 1 percent to 4.5 percent, the interest rate on 30-year mortgages hovered in the 5.5 percent to 6.35 percent range.The reason for the disconnect, experts say, is that banks don't control mortgage rates any more. Ever since the recession of the early 1990s, banks have sold off most of their mortgage loans to major secondary mortgage lenders -- Freddie Mac and Fannie Mae.These giant institutions package the loans into pools of mortgages, which are carved up and sold on public exchanges as securities called "collateralized mortgage obligations," or CMOs.CMOs are bought by buyers all over the world, and have become particularly attractive to Japanese and Chinese central bankers in recent years. That's because CMOs pay higher interest rates than the 10-year Treasury bills, which have traded in the 4 percent to 4.5 percent range.CMOs have also been regarded as fairly safe investments because default and prepayment rates of the underlying mortgages have been low.But if the real estate market continues to decline and the number of foreclosures increases, CMO customers might prefer to hold Treasury bills, which pay less but are backed by the full faith and credit of the United States government.If that happens, mortgage rates might have to keep rising to keep customers interested. And if mortgage rates keep going up, the real estate market will suffer.Mark Vitner, Wachovia Bank's senior economist, said such a scenario is not far-fetched."If the real estate market weakens and there are more credit problems or prepayments, CMOs will become more risky," he said.He thinks the appetite of foreign central banks for dollar-denominated assets such as CMOs will wane in coming years.But Vitner warned against painting a doomsday scenario."It's not like people should read your column and rush
Continued1 2 Next >>
. . and rush out to sell CMOs," he said. "You're right in terms of what's driving the market, but delinquency rates are still quite low and we have a long way to go before we get to a scenario where CMO buying decisions are impacted."Southeast Florida foreclosures on the riseThe number of foreclosure filings rose by more than 25 percent in Broward County in February compared with the previous month, says Default Research, a Mount Pleasant, Penn.-based research firm.Similar filings were up 17 percent in Palm Beach County and 15 percent in Miami-Dade during the same period.This is an indication that the real estate market has cooled and some buyers paid more for properties than they could afford, said Jack McCabe, a Deerfield Beach-based real estate analyst.He expects to see a further increase in foreclosures as the year progresses.So does Richard X. Bove, a banking analyst with Punk Ziegel & Co."There is a major problem with real estate in the U.S.," Bove said. "It is substantially overvalued."Bove is predicting a significant decline in housing prices of 12 to 15 percent this year."That will result in an increase in loan defaults," he said.Meshad buys landfrom Neil Mohamed HusaniDuring the past 15 months, Neil Mohamed Husani has completed eight multimillion-dollar real estate transactions.Six of them have been with his partners, Michael Tringali and Robert J. Martin. But two -- one in July and the other in September -- were with prominent Sarasota attorney John W. Meshad.Meshad made the purchases through his family's limited liability company, Lake Verna LLC, paying a total of $24.8 million for about 80 acres on State Road 70 in Manatee County.Meshad said Husani bought the same land from Cloverdale-4 LLC for $19.5 million at around the same time, flipping the properties for a $5.3 million profit.Husani originally tried to get the sellers to give him an extension on the closing so he could flip the properties immediately to Lake Verna, Meshad said. But the sellers didn't want him to do it that way."They made him close on their deal and then close on ours. So he had double the closing costs," Meshad said.
Mortgage rates may rise even if Fed's rates don't
A lot of financial gurus are expecting the Federal Reserve to stop raising interest rates this year.If that happens, real estate agents say it would be good news for the real estate market. Mortgage rates would remain historically inexpensive and people will continue buying homes.But what happens if mortgage rates keep going up even if the Fed stops hiking the Fed funds rate, the rate it charges to banks for overnight deposits?When the Fed started raising interest rates back in June 2004, the rates charged on 30-year mortgages barely budged. While the Fed funds rate went up from 1 percent to 4.5 percent, the interest rate on 30-year mortgages hovered in the 5.5 percent to 6.35 percent range.The reason for the disconnect, experts say, is that banks don't control mortgage rates any more. Ever since the recession of the early 1990s, banks have sold off most of their mortgage loans to major secondary mortgage lenders -- Freddie Mac and Fannie Mae.These giant institutions package the loans into pools of mortgages, which are carved up and sold on public exchanges as securities called "collateralized mortgage obligations," or CMOs.CMOs are bought by buyers all over the world, and have become particularly attractive to Japanese and Chinese central bankers in recent years. That's because CMOs pay higher interest rates than the 10-year Treasury bills, which have traded in the 4 percent to 4.5 percent range.CMOs have also been regarded as fairly safe investments because default and prepayment rates of the underlying mortgages have been low.But if the real estate market continues to decline and the number of foreclosures increases, CMO customers might prefer to hold Treasury bills, which pay less but are backed by the full faith and credit of the United States government.If that happens, mortgage rates might have to keep rising to keep customers interested. And if mortgage rates keep going up, the real estate market will suffer.Mark Vitner, Wachovia Bank's senior economist, said such a scenario is not far-fetched."If the real estate market weakens and there are more credit problems or prepayments, CMOs will become more risky," he said.He thinks the appetite of foreign central banks for dollar-denominated assets such as CMOs will wane in coming years.But Vitner warned against painting a doomsday scenario."It's not like people should read your column and rush
Continued1 2 Next >>
. . and rush out to sell CMOs," he said. "You're right in terms of what's driving the market, but delinquency rates are still quite low and we have a long way to go before we get to a scenario where CMO buying decisions are impacted."Southeast Florida foreclosures on the riseThe number of foreclosure filings rose by more than 25 percent in Broward County in February compared with the previous month, says Default Research, a Mount Pleasant, Penn.-based research firm.Similar filings were up 17 percent in Palm Beach County and 15 percent in Miami-Dade during the same period.This is an indication that the real estate market has cooled and some buyers paid more for properties than they could afford, said Jack McCabe, a Deerfield Beach-based real estate analyst.He expects to see a further increase in foreclosures as the year progresses.So does Richard X. Bove, a banking analyst with Punk Ziegel & Co."There is a major problem with real estate in the U.S.," Bove said. "It is substantially overvalued."Bove is predicting a significant decline in housing prices of 12 to 15 percent this year."That will result in an increase in loan defaults," he said.Meshad buys landfrom Neil Mohamed HusaniDuring the past 15 months, Neil Mohamed Husani has completed eight multimillion-dollar real estate transactions.Six of them have been with his partners, Michael Tringali and Robert J. Martin. But two -- one in July and the other in September -- were with prominent Sarasota attorney John W. Meshad.Meshad made the purchases through his family's limited liability company, Lake Verna LLC, paying a total of $24.8 million for about 80 acres on State Road 70 in Manatee County.Meshad said Husani bought the same land from Cloverdale-4 LLC for $19.5 million at around the same time, flipping the properties for a $5.3 million profit.Husani originally tried to get the sellers to give him an extension on the closing so he could flip the properties immediately to Lake Verna, Meshad said. But the sellers didn't want him to do it that way."They made him close on their deal and then close on ours. So he had double the closing costs," Meshad said.
Monday, March 27, 2006
How to Get the Rent on Time
Part 1
this is from robert cain...sounds pretty cool
The below is written by Robert Cain:
How would you like a way to get the rent on the first day of every month? Assuming that's when the rent is due, most landlords would. I had heard of the following technique several times, but had never tried it myself, and had never seen any evidence that it was effective.
Now I have the evidence. Subscriber Bill Rigdon swears by it. He says that ever since he instituted this program he has his rent on the due date come hell or high water.
He calls this technique the "prompt payment refund." It is simple. The landlord refunds fifty dollars of the rent if it is paid on the day it is due.
It is important to understand what this is not.
First, it is not a discount. The tenant does not pay you less rent because he paid it on time. Suppose the rent was $750 per month, and your prompt payment refund was $50. The tenant would pay you the full $750, then, when the check cleared, you would refund $50 to the tenant. Obviously, if the tenant paid cash, you could refund it on the spot.
Second, you don't need to charge a late fee. That is built in. The problem with a late fee is that in many states you cannot evict a tenant for nonpayment of rent for failure to pay the late fee.
Many landlords have resorted to using Section 8 because they know that their rent check will be mailed on the first of every month . But what happens if the first is on a Sunday or a holiday. The check won't be mailed for an extra day.
Bill says his rent is in his hands on the day it is due, no matter what day of the week it is.
He tried $25, and found that that amount wasn't enough of an incentive for the rent to get there on time. Fifty dollars seems to do the trick, though.
This program will not work with government assisted housing, but that doesn't bother Bill Ridgon: he doesn't rent to Section 8, anyway.
Part 1
this is from robert cain...sounds pretty cool
The below is written by Robert Cain:
How would you like a way to get the rent on the first day of every month? Assuming that's when the rent is due, most landlords would. I had heard of the following technique several times, but had never tried it myself, and had never seen any evidence that it was effective.
Now I have the evidence. Subscriber Bill Rigdon swears by it. He says that ever since he instituted this program he has his rent on the due date come hell or high water.
He calls this technique the "prompt payment refund." It is simple. The landlord refunds fifty dollars of the rent if it is paid on the day it is due.
It is important to understand what this is not.
First, it is not a discount. The tenant does not pay you less rent because he paid it on time. Suppose the rent was $750 per month, and your prompt payment refund was $50. The tenant would pay you the full $750, then, when the check cleared, you would refund $50 to the tenant. Obviously, if the tenant paid cash, you could refund it on the spot.
Second, you don't need to charge a late fee. That is built in. The problem with a late fee is that in many states you cannot evict a tenant for nonpayment of rent for failure to pay the late fee.
Many landlords have resorted to using Section 8 because they know that their rent check will be mailed on the first of every month . But what happens if the first is on a Sunday or a holiday. The check won't be mailed for an extra day.
Bill says his rent is in his hands on the day it is due, no matter what day of the week it is.
He tried $25, and found that that amount wasn't enough of an incentive for the rent to get there on time. Fifty dollars seems to do the trick, though.
This program will not work with government assisted housing, but that doesn't bother Bill Ridgon: he doesn't rent to Section 8, anyway.
It's true. Len Bias would have turned 40 today. "Wow!" says Danny Ainge.
Yeah, wow. It is more than 17 years since Len Bias's brief association with the Celtics, and he remains the greatest "what-if?" in team history. At least we saw Reggie Lewis play. Bias never played a game for the Celtics. He was a member of the organization for fewer than 48 hours, dying of a cocaine overdose in the wee small hours of June 19, hours after returning to Washington following a day in Boston as the Celtics' first pick in the 1986 draft. His death still reverberates in the team offices. Without any doubt, he would have directly affected the fortunes of the team well into the '90s, with predictable impact on the current situation.
Michael Wilbon of the Washington Post and ESPN covered Bias during his first two years at Maryland, and he goes even further. "His death changed the history of the NBA," Wilbon says. "Because then there are no Bad Boy Pistons, and who knows when the Bulls would have won? Bird and McHale would never have had to play all those minutes. The Celtics would have kept winning."
So Len Bias was that good?
"This is my 24th year at Duke," says coach Mike Krzyzewski, "and in that time there have been two opposing players who have really stood out: Michael Jordan and Len Bias. Len was an amazing athlete with great competitiveness. My feeling is that he would have been one of the top players in the NBA. He created things. People associate the term `playmaking' with point guards. But I consider a playmaker as someone who can do things others can't, the way Jordan did. Bias was like that. He could invent ways to score, and there was nothing you could do about it. No matter how you defended him, he could make a play."
"He was a can't-miss, big-time player who was going to the perfect team," says Celtics general manager Chris Wallace, then at the peak of his glory as editor of Blue Ribbon Magazine, the college basketball bible. "It was almost too good to be true."
Forget the "almost," says Indiana Pacers CEO Donnie Walsh, whose team used the fourth pick in the '86 draft to select Chuck Person. "The Celtics had just won a championship. They had Bird, McHale, Parish, and Walton. And now they were getting Len Bias? I remember thinking, `This is unfair.' "
A dynamite deal That "unfair" circumstance had come about because on Oct. 16, 1984, general manager Jan Volk had orchestrated a deal that sent guard Gerald Henderson to the Seattle SuperSonics for their '86 first-round draft pick. The idea was twofold: 1) Open up more playing time for Danny Ainge; and 2) Hope that the Sonics would deteriorate and ultimately provide the Celtics with a prime pick.
The Sonics could not have cooperated much better. They won 31 games in the 1985-86 season and finished second in the lottery. The Celtics, winners of 67 regular-season games and their 16th NBA title, would have the No. 2 pick in the draft.
The consensus two best players available were North Carolina center/forward Brad Daugherty, a 7-foot finesse player with a baby-fattish body, and Maryland's two-time ACC Player of the Year Bias, a 6-8, 225-pound forward with a Greek statue body.
Red Auerbach admits he only had eyes for Bias. "Oh, yeah, I definitely wanted him," Auerbach says. "Absolutely. Because he was a ballplayer. He could handle the ball, he could shoot it, and he was just what we needed."
"Remember that in 1986 Michael Jordan was not yet `Michael Jordan,' " says Volk. "And in scouting reports, it is customary to make player comparisons. Our basic report characterized Bias as a `Michael Jordan type who was bigger, with a better jump shot, but who didn't go to the basket as well.' "
Philadelphia had the first pick, but the 76ers were strangely ambivalent. "We never could get comfortable with that draft," says Pat Williams, who was then in his final days as the 76ers GM. "We thought Daugherty was soft. And Jack McMahon, our chief scout, didn't want Bias. I remember him saying, `There's just something about him I don't like.' And Jack just passed. Jack wasn't infallible, but he was pretty good, and I didn't usually question him on personnel matters."
The 76ers wound up trading the pick to Cleveland in exchange for Roy Hinson as part of a complete makeover that also included trading Moses Malone and other considerations for Jeff Ruland and Cliff Robinson. None of it worked out, because of injury. "It was the draft night from Hell," says Williams.
Was McMahon prescient? Was he on to something about Bias's nocturnal habits? We'll never know. He died in the late '80s without ever specifying his reservations about Bias.
Undeniable talent Few others had doubts about Bias. Daugherty sure didn't. "The one thing I always think about is how he elevated when he shot his jump shot," says the long-time Cavaliers center, now an ESPN college basketball analyst. "He elevated higher than anyone I've ever seen to get off that shot. Most people, Michael Jordan included, might shoot on the way up, but not Lenny. Every jump shot was released at the peak of his jump. He had a great mid-range game. He was deadly from 8 to 15 feet.
"I remember a game at our place when Joe Wolf started out on him, and he couldn't do anything. Then Coach [Dean] Smith tried [7-foot] Warren Martin. Next he asked me if I wanted to try. He just took me outside. I was 4 inches taller, and I couldn't get near that jumper."
"He was a physical specimen," says Johnny Dawkins, the Duke assistant who was a high school and college contemporary of Bias. "He had a very soft jumper, and he got up so high, no one could affect it. He would have been a terrific player in the NBA."
A couple of guys down at Storrs, Conn., remember Bias very well. On Jan. 21, 1985, George Blaney put a Holy Cross team on the floor against Maryland. "He had a presence about him, and a capacity for taking over," says Blaney, now an assistant at UConn. "He sort of disregarded good defense."
Thirteen months earlier, Jim Calhoun's Northeastern team had likewise played Maryland. "We were real good, but he took over the game," Calhoun says. "He was bigger, stronger, and quicker than anyone we had. He was one of those rare guys you looked at and said, `You know, he is going to be special.' "
Ainge had played with Bias in Marshfield during the summer of 1985, and he knew.
"He was perfect for us," says the Celtics' basketball chief. "I was never so excited. With Kevin, Robert, and Larry, he would give us the perfect rotation. I looked at it as a great fit for him and the franchise."
Larry Bird was similarly smitten, declaring that he was so fired up by the pick that he was going to come back early to work with the kid.
To people in D.C. (Bias was from nearby Landover, Md.), the idea of Bias joining the Celtics was downright sinful. "Out of all the guys I saw at that time," says ESPN's John Saunders, then a sportscaster at WMAR in Baltimore, "Michael Jordan was the gold standard. But I thought Bias had a chance to be in that category. I know I definitely never saw anyone improve as much as he did during his years at Maryland."
"I saw great players from both the ACC and Big East every night," says Wilbon. "Jordan. Ewing. Mullin. Sampson. Later on, David Robinson. But Bias was the most awesome collegiate player of that bunch. That jumper was so pure. I mean, Michael Jordan, at that time, would have killed for that jumper. And Bias was 2 1/2 inches taller."
Bias was not only a great prospect but also the perfect prospect for the team he was joining. He could have played behind both Bird and Kevin McHale, and Auerbach believes that partnership would have been maintained for many years.
"He would have enabled them to cut back on their minutes and would have extended their careers," says Dawkins. "Losing him set the Celtics back for at least a decade."
Fateful decision One "celebration party" changed all that. Bias chose to commemorate his new life by partying with cocaine, and it cost him his life.
Everyone has a story.
The Globe's John Powers was in Washington to do a story with Bias the next morning. He tried the house at 9:30 to confirm an 11 o'clock appointment, but the line was steadily busy. At 10, Powers's wife, Elaine, called. What was the name of the player you're there to interview? "Len Bias," he told her. "Did he call?"
"No," she answered. "He's dead. It was just on the radio."
Daugherty was at Raleigh-Durham Airport, preparing to board a flight to Boston, where he would be signing a joint Reebok deal with his friend, Bias. He refused to believe it when the first two people he encountered told him Bias was dead and didn't believe it until he called their mutual agent, Lee Fentress.
"I remember his exact words," Daugherty says. "He said, `It's God-awful. He's gone.' I never got on that plane."
Auerbach got a call from Bias's coach at Maryland, Lefty Driesell, at 4 in the morning. Volk got a call from a Channel 4 assignment editor at 6:15 in the morning. Ainge heard it when he stopped for gas en route to a morning round of golf.
No one ever will know just who Len Bias really was. Some say he led a masterful double life. Daugherty swears Bias wouldn't even join him for a beer, let alone shove cocaine up his nose. Driesell's words during a pre-draft radio interview are still eerie:
"Leonard's only vice is ice cream," Lefty insisted.
Others say he had both good and bad acquaintances and that he knew both nice girls and naughty girls. But the one thing everyone agrees on is that he sure could play basketball.
Assuming the binge that killed him was an aberration, he is the ghost that haunts the Celtics to this day. If he was just another junkie, well, what difference did it make? But if he was just a happy kid who made one horrible, fatal judgment, then the Celtics were deprived of the perfect bridge player to get them out of the '80s and into the '90s. At the least, give them the '87 title, and say that the 1988 Finals with LA would have been an epic.
"You put an athlete like him in with a Larry Bird," says Krzyzewski, "and he would have made use of all his abilities. Bird wouldn't have seen him as a threat; he would have seen him as a treasure."
Bias's death did more than disrupt the Celtics, says Coach K. It affected all those who love the game of basketball.
"It hurt our sport," Krzyzewski says. "Above and beyond the loss of life, we never got to see one of those truly great ones become great."
But Len Bias never got to see 23, let alone 40.
Yeah, wow. It is more than 17 years since Len Bias's brief association with the Celtics, and he remains the greatest "what-if?" in team history. At least we saw Reggie Lewis play. Bias never played a game for the Celtics. He was a member of the organization for fewer than 48 hours, dying of a cocaine overdose in the wee small hours of June 19, hours after returning to Washington following a day in Boston as the Celtics' first pick in the 1986 draft. His death still reverberates in the team offices. Without any doubt, he would have directly affected the fortunes of the team well into the '90s, with predictable impact on the current situation.
Michael Wilbon of the Washington Post and ESPN covered Bias during his first two years at Maryland, and he goes even further. "His death changed the history of the NBA," Wilbon says. "Because then there are no Bad Boy Pistons, and who knows when the Bulls would have won? Bird and McHale would never have had to play all those minutes. The Celtics would have kept winning."
So Len Bias was that good?
"This is my 24th year at Duke," says coach Mike Krzyzewski, "and in that time there have been two opposing players who have really stood out: Michael Jordan and Len Bias. Len was an amazing athlete with great competitiveness. My feeling is that he would have been one of the top players in the NBA. He created things. People associate the term `playmaking' with point guards. But I consider a playmaker as someone who can do things others can't, the way Jordan did. Bias was like that. He could invent ways to score, and there was nothing you could do about it. No matter how you defended him, he could make a play."
"He was a can't-miss, big-time player who was going to the perfect team," says Celtics general manager Chris Wallace, then at the peak of his glory as editor of Blue Ribbon Magazine, the college basketball bible. "It was almost too good to be true."
Forget the "almost," says Indiana Pacers CEO Donnie Walsh, whose team used the fourth pick in the '86 draft to select Chuck Person. "The Celtics had just won a championship. They had Bird, McHale, Parish, and Walton. And now they were getting Len Bias? I remember thinking, `This is unfair.' "
A dynamite deal That "unfair" circumstance had come about because on Oct. 16, 1984, general manager Jan Volk had orchestrated a deal that sent guard Gerald Henderson to the Seattle SuperSonics for their '86 first-round draft pick. The idea was twofold: 1) Open up more playing time for Danny Ainge; and 2) Hope that the Sonics would deteriorate and ultimately provide the Celtics with a prime pick.
The Sonics could not have cooperated much better. They won 31 games in the 1985-86 season and finished second in the lottery. The Celtics, winners of 67 regular-season games and their 16th NBA title, would have the No. 2 pick in the draft.
The consensus two best players available were North Carolina center/forward Brad Daugherty, a 7-foot finesse player with a baby-fattish body, and Maryland's two-time ACC Player of the Year Bias, a 6-8, 225-pound forward with a Greek statue body.
Red Auerbach admits he only had eyes for Bias. "Oh, yeah, I definitely wanted him," Auerbach says. "Absolutely. Because he was a ballplayer. He could handle the ball, he could shoot it, and he was just what we needed."
"Remember that in 1986 Michael Jordan was not yet `Michael Jordan,' " says Volk. "And in scouting reports, it is customary to make player comparisons. Our basic report characterized Bias as a `Michael Jordan type who was bigger, with a better jump shot, but who didn't go to the basket as well.' "
Philadelphia had the first pick, but the 76ers were strangely ambivalent. "We never could get comfortable with that draft," says Pat Williams, who was then in his final days as the 76ers GM. "We thought Daugherty was soft. And Jack McMahon, our chief scout, didn't want Bias. I remember him saying, `There's just something about him I don't like.' And Jack just passed. Jack wasn't infallible, but he was pretty good, and I didn't usually question him on personnel matters."
The 76ers wound up trading the pick to Cleveland in exchange for Roy Hinson as part of a complete makeover that also included trading Moses Malone and other considerations for Jeff Ruland and Cliff Robinson. None of it worked out, because of injury. "It was the draft night from Hell," says Williams.
Was McMahon prescient? Was he on to something about Bias's nocturnal habits? We'll never know. He died in the late '80s without ever specifying his reservations about Bias.
Undeniable talent Few others had doubts about Bias. Daugherty sure didn't. "The one thing I always think about is how he elevated when he shot his jump shot," says the long-time Cavaliers center, now an ESPN college basketball analyst. "He elevated higher than anyone I've ever seen to get off that shot. Most people, Michael Jordan included, might shoot on the way up, but not Lenny. Every jump shot was released at the peak of his jump. He had a great mid-range game. He was deadly from 8 to 15 feet.
"I remember a game at our place when Joe Wolf started out on him, and he couldn't do anything. Then Coach [Dean] Smith tried [7-foot] Warren Martin. Next he asked me if I wanted to try. He just took me outside. I was 4 inches taller, and I couldn't get near that jumper."
"He was a physical specimen," says Johnny Dawkins, the Duke assistant who was a high school and college contemporary of Bias. "He had a very soft jumper, and he got up so high, no one could affect it. He would have been a terrific player in the NBA."
A couple of guys down at Storrs, Conn., remember Bias very well. On Jan. 21, 1985, George Blaney put a Holy Cross team on the floor against Maryland. "He had a presence about him, and a capacity for taking over," says Blaney, now an assistant at UConn. "He sort of disregarded good defense."
Thirteen months earlier, Jim Calhoun's Northeastern team had likewise played Maryland. "We were real good, but he took over the game," Calhoun says. "He was bigger, stronger, and quicker than anyone we had. He was one of those rare guys you looked at and said, `You know, he is going to be special.' "
Ainge had played with Bias in Marshfield during the summer of 1985, and he knew.
"He was perfect for us," says the Celtics' basketball chief. "I was never so excited. With Kevin, Robert, and Larry, he would give us the perfect rotation. I looked at it as a great fit for him and the franchise."
Larry Bird was similarly smitten, declaring that he was so fired up by the pick that he was going to come back early to work with the kid.
To people in D.C. (Bias was from nearby Landover, Md.), the idea of Bias joining the Celtics was downright sinful. "Out of all the guys I saw at that time," says ESPN's John Saunders, then a sportscaster at WMAR in Baltimore, "Michael Jordan was the gold standard. But I thought Bias had a chance to be in that category. I know I definitely never saw anyone improve as much as he did during his years at Maryland."
"I saw great players from both the ACC and Big East every night," says Wilbon. "Jordan. Ewing. Mullin. Sampson. Later on, David Robinson. But Bias was the most awesome collegiate player of that bunch. That jumper was so pure. I mean, Michael Jordan, at that time, would have killed for that jumper. And Bias was 2 1/2 inches taller."
Bias was not only a great prospect but also the perfect prospect for the team he was joining. He could have played behind both Bird and Kevin McHale, and Auerbach believes that partnership would have been maintained for many years.
"He would have enabled them to cut back on their minutes and would have extended their careers," says Dawkins. "Losing him set the Celtics back for at least a decade."
Fateful decision One "celebration party" changed all that. Bias chose to commemorate his new life by partying with cocaine, and it cost him his life.
Everyone has a story.
The Globe's John Powers was in Washington to do a story with Bias the next morning. He tried the house at 9:30 to confirm an 11 o'clock appointment, but the line was steadily busy. At 10, Powers's wife, Elaine, called. What was the name of the player you're there to interview? "Len Bias," he told her. "Did he call?"
"No," she answered. "He's dead. It was just on the radio."
Daugherty was at Raleigh-Durham Airport, preparing to board a flight to Boston, where he would be signing a joint Reebok deal with his friend, Bias. He refused to believe it when the first two people he encountered told him Bias was dead and didn't believe it until he called their mutual agent, Lee Fentress.
"I remember his exact words," Daugherty says. "He said, `It's God-awful. He's gone.' I never got on that plane."
Auerbach got a call from Bias's coach at Maryland, Lefty Driesell, at 4 in the morning. Volk got a call from a Channel 4 assignment editor at 6:15 in the morning. Ainge heard it when he stopped for gas en route to a morning round of golf.
No one ever will know just who Len Bias really was. Some say he led a masterful double life. Daugherty swears Bias wouldn't even join him for a beer, let alone shove cocaine up his nose. Driesell's words during a pre-draft radio interview are still eerie:
"Leonard's only vice is ice cream," Lefty insisted.
Others say he had both good and bad acquaintances and that he knew both nice girls and naughty girls. But the one thing everyone agrees on is that he sure could play basketball.
Assuming the binge that killed him was an aberration, he is the ghost that haunts the Celtics to this day. If he was just another junkie, well, what difference did it make? But if he was just a happy kid who made one horrible, fatal judgment, then the Celtics were deprived of the perfect bridge player to get them out of the '80s and into the '90s. At the least, give them the '87 title, and say that the 1988 Finals with LA would have been an epic.
"You put an athlete like him in with a Larry Bird," says Krzyzewski, "and he would have made use of all his abilities. Bird wouldn't have seen him as a threat; he would have seen him as a treasure."
Bias's death did more than disrupt the Celtics, says Coach K. It affected all those who love the game of basketball.
"It hurt our sport," Krzyzewski says. "Above and beyond the loss of life, we never got to see one of those truly great ones become great."
But Len Bias never got to see 23, let alone 40.
Sunday, March 26, 2006
Dr. Maltz was a plastic surgeon and author of one of my favorite books, Pscychopsybernetics
I am an avid reader of success literature. I will share my favorites with you as I continue this blog. This book is absolutely divine. I will share other fav's with you as I continue to post. Here are some of Dr. Maltz's quotes below.p
Accept yourself as you are. Otherwise you will never see opportunity. You will not feel free to move toward it; you will feel you are not deserving. Maxwell Maltz
Close scrutiny will show that most "crisis situations" are opportunities to either advance, or stay where you are. Maxwell Maltz
For imagination sets the goal picture which our automatic mechanism works on. We act, or fail to act, not because of will, as is so commonly believed, but because of imagination.
Maltz
If you make friends with yourself you will never be alone.
Maxwell Maltz
It is an old psychological axiom that constant exposure to the object of fear immunizes against the fear. Maxwell Maltz
Low self-esteem is like driving through life with your hand-break on. Maxwell Maltz
Man maintains his balance, poise, and sense of security only as he is moving forward.
Maxwell Maltz Of all the traps and pitfalls in life, self-disesteem is the deadliest, and the hardest to overcome, for it is a pit designed and dug by our own hands, summed up in the phrase, "It's no use-I can't do it."
Maxwell Maltz
Often the difference between a successful man and a failure is not one's better abilities or ideas, but the courage that one has to bet on his ideas, to take a calculated risk, and to act.
Maxwell Maltz Our self image, strongly held, essentially determines what we become.
Maxwell Maltz People who say that life is not worthwhile are really saying that they themselves have no personal goals which are worthwhile. Get yourself a goal worth working for. Better still, get yourself a project. Always have something ahead of you to "look forward to" - to work for and hope for.
Maxwell Maltz Realizing that our actions, feelings and behaviour are the result of our own images and beliefs gives us the level that psychology has always needed for changing personality.
Maxwell Maltz Remember you will not always win. Some days, the most resourceful individual will taste defeat. But there is, in this case, always tomorrow - after you have done your best to achieve success today.
Maxwell Maltz Take the trouble to stop and think of the other person's feelings, his viewpoints, his desires and needs. Think more of what the other fellow wants, and how he must feel. Maxwell Maltz The "self-image" is the key to human personality and human behavior. Change the self image and you change the personality and the behavior.
Maxwell Maltz To change a habit, make a conscious decision, then act out the new behavior. Maxwell Maltz To think, when one is no longer young, when one is not yet old, that one is no longer young, that one is not yet old, that is perhaps something.
Maxwell Maltz We are built to conquer environment, solve problems, achieve goals, and we find no real satisfaction or happiness in life without obstacles to conquer and goals to achieve. Maxwell Maltz We are injured and hurt emotionally, Not so much by other people or what they say and don't say, But by our own attitude and our own response.
Maxwell Maltz We must have courage to bet on our ideas, to take the calculated risk, and to act. Everyday living requires courage if life is to be effective and bring happiness.
Maxwell Maltz You can do only one thing at a time. I simply tackle one problem and concentrate all efforts on what I am doing at the moment.
Maxwell Maltz You may live in an imperfect world but the frontiers are not closed and the doors are not all shut.
Maxwell Maltz
I am an avid reader of success literature. I will share my favorites with you as I continue this blog. This book is absolutely divine. I will share other fav's with you as I continue to post. Here are some of Dr. Maltz's quotes below.p
Accept yourself as you are. Otherwise you will never see opportunity. You will not feel free to move toward it; you will feel you are not deserving. Maxwell Maltz
Close scrutiny will show that most "crisis situations" are opportunities to either advance, or stay where you are. Maxwell Maltz
For imagination sets the goal picture which our automatic mechanism works on. We act, or fail to act, not because of will, as is so commonly believed, but because of imagination.
Maltz
If you make friends with yourself you will never be alone.
Maxwell Maltz
It is an old psychological axiom that constant exposure to the object of fear immunizes against the fear. Maxwell Maltz
Low self-esteem is like driving through life with your hand-break on. Maxwell Maltz
Man maintains his balance, poise, and sense of security only as he is moving forward.
Maxwell Maltz Of all the traps and pitfalls in life, self-disesteem is the deadliest, and the hardest to overcome, for it is a pit designed and dug by our own hands, summed up in the phrase, "It's no use-I can't do it."
Maxwell Maltz
Often the difference between a successful man and a failure is not one's better abilities or ideas, but the courage that one has to bet on his ideas, to take a calculated risk, and to act.
Maxwell Maltz Our self image, strongly held, essentially determines what we become.
Maxwell Maltz People who say that life is not worthwhile are really saying that they themselves have no personal goals which are worthwhile. Get yourself a goal worth working for. Better still, get yourself a project. Always have something ahead of you to "look forward to" - to work for and hope for.
Maxwell Maltz Realizing that our actions, feelings and behaviour are the result of our own images and beliefs gives us the level that psychology has always needed for changing personality.
Maxwell Maltz Remember you will not always win. Some days, the most resourceful individual will taste defeat. But there is, in this case, always tomorrow - after you have done your best to achieve success today.
Maxwell Maltz Take the trouble to stop and think of the other person's feelings, his viewpoints, his desires and needs. Think more of what the other fellow wants, and how he must feel. Maxwell Maltz The "self-image" is the key to human personality and human behavior. Change the self image and you change the personality and the behavior.
Maxwell Maltz To change a habit, make a conscious decision, then act out the new behavior. Maxwell Maltz To think, when one is no longer young, when one is not yet old, that one is no longer young, that one is not yet old, that is perhaps something.
Maxwell Maltz We are built to conquer environment, solve problems, achieve goals, and we find no real satisfaction or happiness in life without obstacles to conquer and goals to achieve. Maxwell Maltz We are injured and hurt emotionally, Not so much by other people or what they say and don't say, But by our own attitude and our own response.
Maxwell Maltz We must have courage to bet on our ideas, to take the calculated risk, and to act. Everyday living requires courage if life is to be effective and bring happiness.
Maxwell Maltz You can do only one thing at a time. I simply tackle one problem and concentrate all efforts on what I am doing at the moment.
Maxwell Maltz You may live in an imperfect world but the frontiers are not closed and the doors are not all shut.
Maxwell Maltz
To be a thorough investor, I believe it makes sense to understand investing in gold. This website was recommended to me by a neighbor who is a financial guru. His readings are quite vast and his recommendations have been excellent in terms of furthering my knowledge base.
below is the link to an excellent site he recommended to me.
http://www.gold-eagle.com/
below is the link to an excellent site he recommended to me.
http://www.gold-eagle.com/
Montana was comeback kingBy Larry SchwartzSpecial to ESPN.com
There's an old cartoon that shows everybody panicking, except for one guy, who is unruffled as he does his assigned task. In real life, that person is Joe Montana.
Joe Montana was MVP in three of his four Super Bowls, and led his team on The Drive in the other.
He possessed an almost mystical calmness in the midst of chaos, especially with the game on the line in the fourth quarter. While others saw turmoil and danger after the snap, Montana saw order and opportunity. He was Joe Cool, the unflappable king of the comeback.
Take the 1989 Super Bowl against the Cincinnati Bengals. The San Francisco 49ers were down by three points with 3:20 left when Montana spotted -- no, not an open receiver -- but a personality. "There, in the stands, standing near the exit ramp," Montana said to tackle Harris Barton. "Isn't that John Candy?" And then he led the 49ers 92 yards, throwing for the winning touchdown with 34 seconds left.
This was one of Montana's 31 fourth-quarters comeback in the NFL.
Montana was neither exceptionally fast nor tall nor did he have a bazooka for an arm. The man whom his high school quarterbacks coach said "was born to be a quarterback" won by wits and grace, style and reaction. It was if he saw the game in slow motion. Whether it was with Notre Dame or the 49ers, whether the game was played in an ice storm in Dallas or in the humidity of Miami, Montana was The Man in the fourth quarter.
"There have been, and will be, much better arms and legs and much better bodies on quarterbacks in the NFL," said former 49er teammate Randy Cross, "but if you have to win a game or score a touchdown or win a championship, the only guy to get is Joe Montana."
Sports Illustrated headlined a story on the fragile-looking quarterback as "The Ultimate Winner." Montana won four Super Bowls in four appearances and became the only player to earn the Roman numeral game's MVP three times (and the other contest was the game-winning drive).
In these four games, he put up Super numbers, completing 83-of-122 passes (68 percent) for 1,142 yards with 11 touchdowns and no interceptions. His quarterback rating was 127.8 (while nobody outside the Elias Sports Bureau knows how to compute this rating, or even what it means, it is known that 127.8 is a figure beyond that of mortal men).
He made the throw on the play that became known as The Catch. That's when a scrambling Montana, with three Cowboys closing in for the kill, lofted the ball in the end zone to Dwight Clark. The six-yard touchdown pass, with 51 seconds left, gave the 49ers a 28-27 victory over Dallas for the 1981 NFC championship.
"At his best, when Joe was in sync, he had an intuitive, instinctive nature rarely equaled by any athlete in any sport," said Bill Walsh, his San Francisco mentor and coach, said about the two-time NFL MVP.
As a redshirt junior at Notre Dame in 1977, after sitting out the previous season because of a separated shoulder, Montana took the Irish to a national championship. In his career he led them to five improbable fourth-quarter comebacks (deficits ranging from eight to 22 points).
The most dramatic of them was his last collegiate game, at the 1979 Cotton Bowl, when he fought hypothermia in the ice and wind in Dallas. After being fed bouillon during the second half to get his temperature back near normal, he led Notre Dame from a 34-12 deficit to a 35-34 victory in the final 7:37, throwing a perfect pass to Kris Haines for a touchdown with no time remaining.
"Joe was born to be a quarterback," said Jeff Petrucci, his high school quarterback coach. "You saw it in the midget leagues, in high school -- the electricity in the huddle when he was in there. How many people are there in the world, three billion? And how many guys are there who can do what he can do? Him, maybe (Dan) Marino on a good day. Perhaps God had a hand in this thing."
Montana had a quick setup, nifty glide to the outside, the ability to scramble but under control, buying time, looking for a receiver underneath. And this was when he still was in high school.
Montana's roots are in western Pennsylvania, the cradle of quarterbacks. Marino, Johnny Unitas, Johnny Lujack, Joe Namath, George Blanda, Jim Kelly and Terry Hanratty are from the area. All were tough, dedicated, hard workers and competitive. "We had a no-nonsense, blue-collar background," Unitas said.
Montana was born in New Eagle on June 11, 1956, the only child of Joe Sr. and Theresa, and raised in nearby Monongahela. The family lived in a two-story frame house in a middle-class neighborhood and Joe Sr. helped his son get involved with sports.
Young Joe played baseball (three perfect games in the Little League) and basketball (he was offered a scholarship to North Carolina State), but after becoming a Parade All-American quarterback as a high school senior, he followed his idol, Hanratty, to Notre Dame.
At one-time a seventh-string quarterback, he was still No. 3 when the 1977 season started. But in the third game, with once-beaten Notre Dame losing 24-14 to Purdue, The Comeback Kid came off the bench to throw for 154 yards and a touchdown in the final 11 minutes to lead the Irish to a 31-24 victory.
Coach Dan Devine finally saw the light and installed Montana as his starter. Notre Dame didn't lose again, and won the national title by defeating No. 1 Texas 38-10 in the Cotton Bowl.
After capping his collegiate career with the comeback against Houston the following January, Montana was selected by the 49ers in the third round of the 1979 draft, the No. 82 overall selection. Walsh brought him along slowly and it wasn't until late in his second season that Montana became the starter.
ZONE POLL
In 1981, the 6-foot-2, 195-pound Montana was in complete control of Walsh's West Coast offense, and he led he 49ers to a 13-3 record. They won the NFC title with The Catch, and defeated Cincinnati 26-21 in the Super Bowl.
Returning to the Super Bowl three years later against the Miami Dolphins, Montana upstaged Marino, who had thrown for a record 48 touchdowns. He passed for 331 yards and three touchdowns in a 38-16 San Francisco rout.
Montana suffered a ruptured disk throwing a pass in the 1986 opener and underwent two-hour back surgery. Doctors told him it might be better for his health if he gave up football. Two months later, he was back, throwing three touchdown passes to Jerry Rice. But the season ended the way it had began -- in pain. Montana was knocked out of a 49-3 playoff loss to the Giants when noseguard Jim Burt, a future teammate, buried his helmet under Montana's chin.
Three years later, Montana had another Super Bowl ring. After spotting Candy in the stands, Joe Cool smoothly hit eight-of-nine passes, with his 10-yard strike to John Taylor giving the 49ers a 20-16 victory in Miami.
The next season, under George Seifert, Montana took the 49ers to a 14-2 record. San Francisco won its postseason games by 28, 27 and 45 points (55-10 over Denver in the Super Bowl) and Montana completed 78 percent of his passes for 800 yards, 11 touchdowns (five against Denver) and no interceptions.
An elbow injury caused Montana to miss 1991 and further complications caused him to sit out until the final game of 1992. With Steve Young entrenched at quarterback, Montana was traded to Kansas City in 1993. He led the Chiefs into the playoffs in his two seasons with them before deciding that, at age 38, he was finally weary of the game.
There's an old cartoon that shows everybody panicking, except for one guy, who is unruffled as he does his assigned task. In real life, that person is Joe Montana.
Joe Montana was MVP in three of his four Super Bowls, and led his team on The Drive in the other.
He possessed an almost mystical calmness in the midst of chaos, especially with the game on the line in the fourth quarter. While others saw turmoil and danger after the snap, Montana saw order and opportunity. He was Joe Cool, the unflappable king of the comeback.
Take the 1989 Super Bowl against the Cincinnati Bengals. The San Francisco 49ers were down by three points with 3:20 left when Montana spotted -- no, not an open receiver -- but a personality. "There, in the stands, standing near the exit ramp," Montana said to tackle Harris Barton. "Isn't that John Candy?" And then he led the 49ers 92 yards, throwing for the winning touchdown with 34 seconds left.
This was one of Montana's 31 fourth-quarters comeback in the NFL.
Montana was neither exceptionally fast nor tall nor did he have a bazooka for an arm. The man whom his high school quarterbacks coach said "was born to be a quarterback" won by wits and grace, style and reaction. It was if he saw the game in slow motion. Whether it was with Notre Dame or the 49ers, whether the game was played in an ice storm in Dallas or in the humidity of Miami, Montana was The Man in the fourth quarter.
"There have been, and will be, much better arms and legs and much better bodies on quarterbacks in the NFL," said former 49er teammate Randy Cross, "but if you have to win a game or score a touchdown or win a championship, the only guy to get is Joe Montana."
Sports Illustrated headlined a story on the fragile-looking quarterback as "The Ultimate Winner." Montana won four Super Bowls in four appearances and became the only player to earn the Roman numeral game's MVP three times (and the other contest was the game-winning drive).
In these four games, he put up Super numbers, completing 83-of-122 passes (68 percent) for 1,142 yards with 11 touchdowns and no interceptions. His quarterback rating was 127.8 (while nobody outside the Elias Sports Bureau knows how to compute this rating, or even what it means, it is known that 127.8 is a figure beyond that of mortal men).
He made the throw on the play that became known as The Catch. That's when a scrambling Montana, with three Cowboys closing in for the kill, lofted the ball in the end zone to Dwight Clark. The six-yard touchdown pass, with 51 seconds left, gave the 49ers a 28-27 victory over Dallas for the 1981 NFC championship.
"At his best, when Joe was in sync, he had an intuitive, instinctive nature rarely equaled by any athlete in any sport," said Bill Walsh, his San Francisco mentor and coach, said about the two-time NFL MVP.
As a redshirt junior at Notre Dame in 1977, after sitting out the previous season because of a separated shoulder, Montana took the Irish to a national championship. In his career he led them to five improbable fourth-quarter comebacks (deficits ranging from eight to 22 points).
The most dramatic of them was his last collegiate game, at the 1979 Cotton Bowl, when he fought hypothermia in the ice and wind in Dallas. After being fed bouillon during the second half to get his temperature back near normal, he led Notre Dame from a 34-12 deficit to a 35-34 victory in the final 7:37, throwing a perfect pass to Kris Haines for a touchdown with no time remaining.
"Joe was born to be a quarterback," said Jeff Petrucci, his high school quarterback coach. "You saw it in the midget leagues, in high school -- the electricity in the huddle when he was in there. How many people are there in the world, three billion? And how many guys are there who can do what he can do? Him, maybe (Dan) Marino on a good day. Perhaps God had a hand in this thing."
Montana had a quick setup, nifty glide to the outside, the ability to scramble but under control, buying time, looking for a receiver underneath. And this was when he still was in high school.
Montana's roots are in western Pennsylvania, the cradle of quarterbacks. Marino, Johnny Unitas, Johnny Lujack, Joe Namath, George Blanda, Jim Kelly and Terry Hanratty are from the area. All were tough, dedicated, hard workers and competitive. "We had a no-nonsense, blue-collar background," Unitas said.
Montana was born in New Eagle on June 11, 1956, the only child of Joe Sr. and Theresa, and raised in nearby Monongahela. The family lived in a two-story frame house in a middle-class neighborhood and Joe Sr. helped his son get involved with sports.
Young Joe played baseball (three perfect games in the Little League) and basketball (he was offered a scholarship to North Carolina State), but after becoming a Parade All-American quarterback as a high school senior, he followed his idol, Hanratty, to Notre Dame.
At one-time a seventh-string quarterback, he was still No. 3 when the 1977 season started. But in the third game, with once-beaten Notre Dame losing 24-14 to Purdue, The Comeback Kid came off the bench to throw for 154 yards and a touchdown in the final 11 minutes to lead the Irish to a 31-24 victory.
Coach Dan Devine finally saw the light and installed Montana as his starter. Notre Dame didn't lose again, and won the national title by defeating No. 1 Texas 38-10 in the Cotton Bowl.
After capping his collegiate career with the comeback against Houston the following January, Montana was selected by the 49ers in the third round of the 1979 draft, the No. 82 overall selection. Walsh brought him along slowly and it wasn't until late in his second season that Montana became the starter.
ZONE POLL
In 1981, the 6-foot-2, 195-pound Montana was in complete control of Walsh's West Coast offense, and he led he 49ers to a 13-3 record. They won the NFC title with The Catch, and defeated Cincinnati 26-21 in the Super Bowl.
Returning to the Super Bowl three years later against the Miami Dolphins, Montana upstaged Marino, who had thrown for a record 48 touchdowns. He passed for 331 yards and three touchdowns in a 38-16 San Francisco rout.
Montana suffered a ruptured disk throwing a pass in the 1986 opener and underwent two-hour back surgery. Doctors told him it might be better for his health if he gave up football. Two months later, he was back, throwing three touchdown passes to Jerry Rice. But the season ended the way it had began -- in pain. Montana was knocked out of a 49-3 playoff loss to the Giants when noseguard Jim Burt, a future teammate, buried his helmet under Montana's chin.
Three years later, Montana had another Super Bowl ring. After spotting Candy in the stands, Joe Cool smoothly hit eight-of-nine passes, with his 10-yard strike to John Taylor giving the 49ers a 20-16 victory in Miami.
The next season, under George Seifert, Montana took the 49ers to a 14-2 record. San Francisco won its postseason games by 28, 27 and 45 points (55-10 over Denver in the Super Bowl) and Montana completed 78 percent of his passes for 800 yards, 11 touchdowns (five against Denver) and no interceptions.
An elbow injury caused Montana to miss 1991 and further complications caused him to sit out until the final game of 1992. With Steve Young entrenched at quarterback, Montana was traded to Kansas City in 1993. He led the Chiefs into the playoffs in his two seasons with them before deciding that, at age 38, he was finally weary of the game.
The great American condo glut
The number of available condos is at an all-time high -- and there aren't enough buyers to snatch them up. If you're staying put for the next five years, it could be the time to buy.By Melinda Fulmer
5 questions to ask before buying a condo
Home buyers rake in the perks
Why you'll pay more in rent this year
After several years of gung-ho development in south Florida, San Diego, Las Vegas and other major markets, the once-hot condo market is headed for a slump.
The national median price for existing condos rang in at $228,200 in the fourth quarter of 2005 -- a healthy 12.3% increase from a year ago, according to the National Association of Realtors. But in some of the most robust markets, where prices had soared in the past few years, appreciation slowed to a trickle:
Condos in Atlanta went up just 3.7% year over year in the fourth quarter of 2005.
Prices in San Diego bumped up just 1.7%.
And in seven markets studied by NAR, such as Virginia Beach, Va. and Toledo, Ohio, prices actually dipped, mirroring the rest of the housing market.
Agents and economists say they expect to see further erosion this year, as the housing market continues to cool. "There is reason to be concerned about the condo market right now," said Susan Wachter, professor of real estate and finance at the University of Pennsylvania's Wharton School. "There is an all-time high of inventory right now and it is disproportional to condo markets," she said.
Owners, builders feel the falloutSellers like John Robbins of Pompano Beach, Fla. say their properties are spending more time on the market. Two months ago, the securities trader listed his 2-bedroom unit for $220,000 -- $25,000 less than what a similar condo sold for six months ago. It's still on the market today. "I'm getting very little interest in it," said Robbins.
Condo developers say they have been forced to throw in perks such as paid closing costs or association fees, extra kitchen upgrades or free hardwood floors.
"I don't think there's a market out there in which developers are not offering some kind of incentives," said Arthur Nevid, managing director of Charlotte, N.C.-based Mountain Funding, which has financed $300 million condo projects in the U.S. over the last year. Mountain and many other lenders say they have ceased funding most condo projects and are backing away from some projects they had already committed to.
Some developers are even giving back the down payments or deposits paid by residents. At least four projects in Las Vegas, including the heavily advertised Icon Las Vegas, have been scrapped. "The reality is, is that the market has slowed," said Robert H. Hamrick, president and CEO of Coldwell Banker Premier Realty in Las Vegas, "and properties have stopped appreciating in value."
Too much, too fastThe condo boom started in most markets in 2003, after buyers snapped up much of the available condos on the market and sales and prices for condos were rising faster than in the rest of the housing market. That year, developers across the country started construction of 169,000 town homes and multi-family condo units, according to Census data, and sold 18,000 units of rental properties to condo converters, according to Real Capital Analytics in New York.
By 2005, new construction of town homes and condos had swelled 59% to 268,000 units, and 191,400 existing rental units were sold to converters -- 34% of all apartment units sold. In markets across Florida such as Orlando, Palm Beach and Tampa, the percentage of apartments sold for condos was much higher, 75%, 81% and 60%, respectively.
"There were places where we had new supply go up 300% in a couple of years," said Michael Carliner, economist with the National Association of Home Builders. "While there might have been a strong market initially, it's very hard to absorb that new supply."
1980s all over againThere hasn’t been a condo boom like this one, economists say, since the late 1980s when rising home prices and out-of-sight interest rates spurred developers to begin churning out a flood of condominiums. Many of these properties wound up back on the market, pushing prices down further.
Economists are concerned that this same pattern is repeating itself in markets such as Las Vegas, San Diego and Miami, where investors, rather than residents have bought many of the units.
And more condos are being added this year, analysts say, putting more pressure on prices. In San Diego, 5,217 condo units were built since 2001, and another 7,235 are under construction or approved, according to Centre City Development Corp.
Meanwhile, sales and prices in San Diego have peaked, agents say, and prices are beginning to head south. In the city's hot downtown area, condos' price-per-square-foot dropped .2% in last year's fourth quarter to $517, the first year-over-year drop since 2001, according to London Realty Group Advisors in San Diego. "It's probably dropped off even more since then," said company president Gary London.
Owners are now taking price cuts, or renting out their unit until the market improves. San Diego Realtor Cindy Davis is now leasing out a client's condo that has lingered on the market for 80 days. "I've told him now he's not going to get his price. Keeping it on the market and hoping for a miracle is stupid," she said.
Likewise, Hamrick said, prices have stalled in Las Vegas, and are poised to dip, should more units come back on the market.
Sleepier towns not immuneEven low-key Minneapolis, has been rocked by a condo boom that is threatening to go bust. Last year, 1,326 units sold in the area -- up from 557 the year before, according to the Minneapolis Area Association of Realtors. And there are currently 4,518 condos under construction or approved for downtown Minneapolis alone, said Mary Bujold, president of Minneapolis-based Maxfield Research.
Still many agents in Minneapolis believe their city’s luck will be different than such glitzy locales as Las Vegas and Miami. Residents, not investors, bought most of the properties here. And while sales have slowed, prices have not seen the spikes they have in other areas, making the market less susceptible to big price drops.
No question, "there are a lot of things to choose from," and units are spending longer on the market, said agent David Abele with Edina Realty. Still, he said, this year is still shaping up to be a personal best in terms of sales. "People are just being more careful and more conservative," with their purchases, he said.
Staying put? It's a great time to buyGiven the huge supply, agents say it might pay for sellers to hold properties off the market and let demand catch up. "This is not the time for a casual seller to place their product on the market," in Las Vegas, Hamrick said.
Nor is it time for investors to try to make a quick buck. Units that were increasing in value 30% to 40% annually for the past several years are now stalled. "If you think it was a risky idea to flip one, two years ago, it would be an insane idea now," the NAHB's Carliner said.
Conversely, buyers might want to study the market for a few months to see if prices dip further. That's what Robbins is planning. Once he sells his current condo, he says he will rent an apartment for six more months instead of quickly buying another unit. "By then hopefully it will be a buyers market," he said.
Good for the long termTo be sure, most agents say they believe condos are a good bet in the long run, if they are well located. "I'm not a big believer in the bubble bursting,” Realtor Davis said. "There's not much land here (in Southern California) and people still want to live here."
If developers pull back on new construction, and the economy and interest rates remain on course, the supply issue could correct itself in many markets in about a year, said the Wharton School's Wachter.
Longer term, Carliner thinks the percentage of baby boomers moving into retirement could also bode well for condos. Eighty percent of all condos in 2004 were owned by people 55 and up.
Ryan Higgins, for his part, was undeterred by declining condo prices. The 29-year-old broker and mortgage lender from Carlsbad, Calif., recently decided to buy a $585,000 three-bedroom condo in the chic La Costa area, despite seeing prices dip on many new projects. "Real estate is not a good short-term investment," he said. "Anyone could have made money in real estate in the last few years." Now, he said, you have to be patient, "buy in the right market and sustain some
The number of available condos is at an all-time high -- and there aren't enough buyers to snatch them up. If you're staying put for the next five years, it could be the time to buy.By Melinda Fulmer
5 questions to ask before buying a condo
Home buyers rake in the perks
Why you'll pay more in rent this year
After several years of gung-ho development in south Florida, San Diego, Las Vegas and other major markets, the once-hot condo market is headed for a slump.
The national median price for existing condos rang in at $228,200 in the fourth quarter of 2005 -- a healthy 12.3% increase from a year ago, according to the National Association of Realtors. But in some of the most robust markets, where prices had soared in the past few years, appreciation slowed to a trickle:
Condos in Atlanta went up just 3.7% year over year in the fourth quarter of 2005.
Prices in San Diego bumped up just 1.7%.
And in seven markets studied by NAR, such as Virginia Beach, Va. and Toledo, Ohio, prices actually dipped, mirroring the rest of the housing market.
Agents and economists say they expect to see further erosion this year, as the housing market continues to cool. "There is reason to be concerned about the condo market right now," said Susan Wachter, professor of real estate and finance at the University of Pennsylvania's Wharton School. "There is an all-time high of inventory right now and it is disproportional to condo markets," she said.
Owners, builders feel the falloutSellers like John Robbins of Pompano Beach, Fla. say their properties are spending more time on the market. Two months ago, the securities trader listed his 2-bedroom unit for $220,000 -- $25,000 less than what a similar condo sold for six months ago. It's still on the market today. "I'm getting very little interest in it," said Robbins.
Condo developers say they have been forced to throw in perks such as paid closing costs or association fees, extra kitchen upgrades or free hardwood floors.
"I don't think there's a market out there in which developers are not offering some kind of incentives," said Arthur Nevid, managing director of Charlotte, N.C.-based Mountain Funding, which has financed $300 million condo projects in the U.S. over the last year. Mountain and many other lenders say they have ceased funding most condo projects and are backing away from some projects they had already committed to.
Some developers are even giving back the down payments or deposits paid by residents. At least four projects in Las Vegas, including the heavily advertised Icon Las Vegas, have been scrapped. "The reality is, is that the market has slowed," said Robert H. Hamrick, president and CEO of Coldwell Banker Premier Realty in Las Vegas, "and properties have stopped appreciating in value."
Too much, too fastThe condo boom started in most markets in 2003, after buyers snapped up much of the available condos on the market and sales and prices for condos were rising faster than in the rest of the housing market. That year, developers across the country started construction of 169,000 town homes and multi-family condo units, according to Census data, and sold 18,000 units of rental properties to condo converters, according to Real Capital Analytics in New York.
By 2005, new construction of town homes and condos had swelled 59% to 268,000 units, and 191,400 existing rental units were sold to converters -- 34% of all apartment units sold. In markets across Florida such as Orlando, Palm Beach and Tampa, the percentage of apartments sold for condos was much higher, 75%, 81% and 60%, respectively.
"There were places where we had new supply go up 300% in a couple of years," said Michael Carliner, economist with the National Association of Home Builders. "While there might have been a strong market initially, it's very hard to absorb that new supply."
1980s all over againThere hasn’t been a condo boom like this one, economists say, since the late 1980s when rising home prices and out-of-sight interest rates spurred developers to begin churning out a flood of condominiums. Many of these properties wound up back on the market, pushing prices down further.
Economists are concerned that this same pattern is repeating itself in markets such as Las Vegas, San Diego and Miami, where investors, rather than residents have bought many of the units.
And more condos are being added this year, analysts say, putting more pressure on prices. In San Diego, 5,217 condo units were built since 2001, and another 7,235 are under construction or approved, according to Centre City Development Corp.
Meanwhile, sales and prices in San Diego have peaked, agents say, and prices are beginning to head south. In the city's hot downtown area, condos' price-per-square-foot dropped .2% in last year's fourth quarter to $517, the first year-over-year drop since 2001, according to London Realty Group Advisors in San Diego. "It's probably dropped off even more since then," said company president Gary London.
Owners are now taking price cuts, or renting out their unit until the market improves. San Diego Realtor Cindy Davis is now leasing out a client's condo that has lingered on the market for 80 days. "I've told him now he's not going to get his price. Keeping it on the market and hoping for a miracle is stupid," she said.
Likewise, Hamrick said, prices have stalled in Las Vegas, and are poised to dip, should more units come back on the market.
Sleepier towns not immuneEven low-key Minneapolis, has been rocked by a condo boom that is threatening to go bust. Last year, 1,326 units sold in the area -- up from 557 the year before, according to the Minneapolis Area Association of Realtors. And there are currently 4,518 condos under construction or approved for downtown Minneapolis alone, said Mary Bujold, president of Minneapolis-based Maxfield Research.
Still many agents in Minneapolis believe their city’s luck will be different than such glitzy locales as Las Vegas and Miami. Residents, not investors, bought most of the properties here. And while sales have slowed, prices have not seen the spikes they have in other areas, making the market less susceptible to big price drops.
No question, "there are a lot of things to choose from," and units are spending longer on the market, said agent David Abele with Edina Realty. Still, he said, this year is still shaping up to be a personal best in terms of sales. "People are just being more careful and more conservative," with their purchases, he said.
Staying put? It's a great time to buyGiven the huge supply, agents say it might pay for sellers to hold properties off the market and let demand catch up. "This is not the time for a casual seller to place their product on the market," in Las Vegas, Hamrick said.
Nor is it time for investors to try to make a quick buck. Units that were increasing in value 30% to 40% annually for the past several years are now stalled. "If you think it was a risky idea to flip one, two years ago, it would be an insane idea now," the NAHB's Carliner said.
Conversely, buyers might want to study the market for a few months to see if prices dip further. That's what Robbins is planning. Once he sells his current condo, he says he will rent an apartment for six more months instead of quickly buying another unit. "By then hopefully it will be a buyers market," he said.
Good for the long termTo be sure, most agents say they believe condos are a good bet in the long run, if they are well located. "I'm not a big believer in the bubble bursting,” Realtor Davis said. "There's not much land here (in Southern California) and people still want to live here."
If developers pull back on new construction, and the economy and interest rates remain on course, the supply issue could correct itself in many markets in about a year, said the Wharton School's Wachter.
Longer term, Carliner thinks the percentage of baby boomers moving into retirement could also bode well for condos. Eighty percent of all condos in 2004 were owned by people 55 and up.
Ryan Higgins, for his part, was undeterred by declining condo prices. The 29-year-old broker and mortgage lender from Carlsbad, Calif., recently decided to buy a $585,000 three-bedroom condo in the chic La Costa area, despite seeing prices dip on many new projects. "Real estate is not a good short-term investment," he said. "Anyone could have made money in real estate in the last few years." Now, he said, you have to be patient, "buy in the right market and sustain some
Saturday, March 25, 2006
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How to price property is seller's top challenge
CLICKS AND MORTAR COLUMNBy M. Anthony CarrMarch 17, 2006
Pricing property can be more art than science in today's market. New-home builders probably have the easiest time of it -- at least without shocking the buyers -- because everything is new. There are no bare areas in the carpet, fingerprints on the appliances, nicotine-stained ceiling tiles in the rec room, and definitely no cat and dog odors. With resale homes, the first weapon to use in the battle to sell the home is to price it correctly. The challenge for sellers is that in today's market, they can't expect to get the price that they might have gotten a year ago. The seller can still walk away with hundreds of thousands of dollars in gain, but perhaps not the absolute highest price ever in the community. Pricing is the key. There are only a few ways to price a home for sale. Sellers need to use the accepted modes of pricing and get over the fact that their house may not be worth as much as it was 12 months ago. The first model is probably the most popular -- the comparable. By pulling up only the sales of your particular model, a real estate agent can determine a trend price. In a slowing market, your particular model may only have three sales in the last year. Such a low number of houses selling does not really create a trend line, especially if the last sale was six months ago. If this is the case, you can create comparables across a few neighborhoods or even a whole ZIP code. Aspects of your home will be plugged into the comparable model: style of home -- split level, Colonial, rancher; number of levels; number of bedrooms and baths; extra rooms; year built; square footage. Then, the averages on these parameters are tabulated for a target price. Keep in mind that you should remove the highs and lows. Another way to price your home is to come up with a tax assessment model. This one takes a little bit more homework and data mining. It's tedious, but it can present one of the most accurate pictures of home values in your community. The first step is to pull up all the sales in the community in the last six to 12 months. Tabulate the sales price total (let's say it comes up to $10 million) and then tabulate the tax assessment total (our model will use $8 million). By dividing the sales total by the tax assessment you come up with a tax assessment-sales price ratio. In this case, the community ratio is 1.25. Multiply your tax assessment by the ratio figure, and it will determine your target asking price. For example, if your tax assessment is $250,000, multiply it by 1.25 and you'll arrive at $312,500 as a target asking price. Again, be careful to pull out the anomalies that represent overbuilt properties. The largest, biggest house in the community could affect your price, as well as the pre-foreclosure sale. You're looking for average prices with average situations for average results. If you have to use all these methods to arrive at a price, then your real estate professional should weigh in. The biggest challenge in pricing the home is a seller's level of greed. Sorry to be so blunt, but sellers always want more, regardless of the market condition. My advice is to get over it. Waiting around for the "right" buyer is just plain foolishness. If you're putting your home on the market, don't waste your time, the buyers' time and the agents' time with an unrealistic asking price. If your agent provides feedback from colleagues that your house is overpriced, move from denial into acceptance and price the house right. Remember, the goal here is not to price the property as high as possible, but to sell the house. Good luck. • M. Anthony Carr has written about real estate since 1989. He is the author of "Real Estate Investing Made Simple." Post questions or comments at his Web log (http://commonsenserealestate.blogspot.com).
CLICKS AND MORTAR COLUMNBy M. Anthony CarrMarch 17, 2006
Pricing property can be more art than science in today's market. New-home builders probably have the easiest time of it -- at least without shocking the buyers -- because everything is new. There are no bare areas in the carpet, fingerprints on the appliances, nicotine-stained ceiling tiles in the rec room, and definitely no cat and dog odors. With resale homes, the first weapon to use in the battle to sell the home is to price it correctly. The challenge for sellers is that in today's market, they can't expect to get the price that they might have gotten a year ago. The seller can still walk away with hundreds of thousands of dollars in gain, but perhaps not the absolute highest price ever in the community. Pricing is the key. There are only a few ways to price a home for sale. Sellers need to use the accepted modes of pricing and get over the fact that their house may not be worth as much as it was 12 months ago. The first model is probably the most popular -- the comparable. By pulling up only the sales of your particular model, a real estate agent can determine a trend price. In a slowing market, your particular model may only have three sales in the last year. Such a low number of houses selling does not really create a trend line, especially if the last sale was six months ago. If this is the case, you can create comparables across a few neighborhoods or even a whole ZIP code. Aspects of your home will be plugged into the comparable model: style of home -- split level, Colonial, rancher; number of levels; number of bedrooms and baths; extra rooms; year built; square footage. Then, the averages on these parameters are tabulated for a target price. Keep in mind that you should remove the highs and lows. Another way to price your home is to come up with a tax assessment model. This one takes a little bit more homework and data mining. It's tedious, but it can present one of the most accurate pictures of home values in your community. The first step is to pull up all the sales in the community in the last six to 12 months. Tabulate the sales price total (let's say it comes up to $10 million) and then tabulate the tax assessment total (our model will use $8 million). By dividing the sales total by the tax assessment you come up with a tax assessment-sales price ratio. In this case, the community ratio is 1.25. Multiply your tax assessment by the ratio figure, and it will determine your target asking price. For example, if your tax assessment is $250,000, multiply it by 1.25 and you'll arrive at $312,500 as a target asking price. Again, be careful to pull out the anomalies that represent overbuilt properties. The largest, biggest house in the community could affect your price, as well as the pre-foreclosure sale. You're looking for average prices with average situations for average results. If you have to use all these methods to arrive at a price, then your real estate professional should weigh in. The biggest challenge in pricing the home is a seller's level of greed. Sorry to be so blunt, but sellers always want more, regardless of the market condition. My advice is to get over it. Waiting around for the "right" buyer is just plain foolishness. If you're putting your home on the market, don't waste your time, the buyers' time and the agents' time with an unrealistic asking price. If your agent provides feedback from colleagues that your house is overpriced, move from denial into acceptance and price the house right. Remember, the goal here is not to price the property as high as possible, but to sell the house. Good luck. • M. Anthony Carr has written about real estate since 1989. He is the author of "Real Estate Investing Made Simple." Post questions or comments at his Web log (http://commonsenserealestate.blogspot.com).
Fishing for Hot Investments in A Cool Market
By Hans L. Wydler and Steven C. WydlerSpecial to The Washington PostSaturday, January 28, 2006; Page F01
As the frenzied local real estate market appears to be cooling down, we are being asked a lot whether real estate is still a good investment.
As real estate agents, we tell our clients that it can be, but the risk of making a poor investment is increasing because prices are high and there's no guarantee that returns will justify those prices. Now more than ever, an investor must understand the fundamentals and remember that evaluating an investment property is like peeling an onion: There are many layers, and if you do it wrong, you'll cry.
the frenzied local real estate market appears to be cooling down, we are being asked a lot whether real estate is still a good investment. One feature of real estate as an investment is that it is so easily leveraged. That means you can use borrowed money to increase the return on your......','Hans L. Wydler and Steven C. Wydler') ;
document.write( Your first step in evaluating a potential real estate investment should be to determine whether it fits your portfolio and financial plan. People tend to be at one extreme or the other: Either they have no real estate exposure or they are overexposed. A well-diversified portfolio should include some real estate, but not all real estate.
The next issue to consider is what type of real estate investment makes the most sense for you. There are many choices -- raw land, office buildings, warehouses, gas stations, apartment buildings, condominiums, real estate investment trusts, private syndications, etc. Each comes with its own risks, rewards and management challenges. But because many investors start with residential real estate, we will focus on residential real estate investments that generate rental income.
Realistically evaluating the finances of the individual property you are considering is the key to figuring out what might be a hot investment, even in a cooling market.
Understanding Leverage
One feature of real estate as an investment is that it is so easily leveraged. That means you can use borrowed money to increase the return on your capital. Investors can put in a relatively small amount of cash, perhaps 5 percent to 20 percent of the purchase price, and borrow the rest.
In a market that appreciates rapidly, as happened locally over recent years, investors have been able to achieve extraordinary returns on their capital, sometimes doubling their investment in a year or two. For example, consider the impact of leverage on a homeowner who bought a house with 10 percent down, kept it for two years, and then sold it for 20 percent more than he paid, after expenses. His return on invested capital wasn't 20 percent; it was 200 percent. That is, if the investor put $10,000 down on a $100,000 property and sold it for $120,000, the $10,000 would have tripled to $30,000 after paying off the $90,000 mortgage.
However, returns like that aren't guaranteed, and leverage can magnify losses. Using that same simple example, if the property sold for just $80,000, the $20,000 bath the investor would take isn't a 20 percent loss on the $10,000 investment. The entire investment would be lost, and the investor would have to pay another $10,000.
In contrast, with most unleveraged investments, you won't go in the hole: If you buy $1,000 in stock, you won't lose more than $1,000.
So how do you evaluate the odds on your real estate investment? It takes some math.
Building a Financial Model
To illustrate, here's an analysis of a hypothetical real estate investment.
Let's assume you want to own a small, multifamily rental property and find the following listing: "Four-unit apartment building in NW D.C. Strong rental history. Great potential for condo conversion. Charming building in historic neighborhood."
The seller is asking $1 million. He provides the following financial information. (All revenue and expense numbers are annual, from 2005.)
· Gross annual rent: $90,000
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· Utilities: $10,000
· Repairs and maintenance: $2,000
· Insurance: $3,000
· Taxes: $6,000
That means the property brings in $90,000 a year in rent, and expenses are $21,000. That means revenue minus expenses, known as net operating income, is $69,000.
Is this property a good investment? Let's take a look.
First, as with any investment, you must determine a way to evaluate the rough attractiveness of the investment before proceeding. For instance, in the stock market, many investors use the price-to-earnings ratio, or P/E. In real estate, investors often use the property's capitalization or "cap rate." This, too, measures how the price of a property relates to its earnings stream. The cap rate is calculated by dividing the net operating income by the purchase price. Because it is calculated without factoring in financing costs, the cap rate shows you the rate of return you would expect if you bought the property with all cash.
In this hypothetical example, if you relied only on the information provided by the seller, it would appear that this property's cap rate is 6.9 percent. In Washington, 6.9 percent is currently considered a good return for this type of property, though cap rates fluctuate over time. (An investor who will accept a lower cap rate will be willing to pay more for a property than one who insists on a higher return on the investment.) Historically, 6.9 percent is on the low side, but more on the implications shortly.
Remember that the seller's information is only a starting point. Your next task is to develop your assumptions and build your own financial model. Here are some basic due-diligence questions to consider.
· Are the rental income projections realistic? Check newspaper and Internet ads and visit similarly priced rental units. Ask to review existing lease agreements. Make sure that you can get the rents the seller is saying you can expect. Are there opportunities to raise rents? Are any rent-control laws in place?
· Are the operating costs realistic? Make sure the seller's list is comprehensive and accurate (utilities, repairs, maintenance, property management, insurance, trash, pest control, advertising, supplies, cleaning, etc.). Verify estimates with third parties whenever possible. Get the utility bills directly from the utility companies; call your own insurance company; check the tax records. As a general rule of thumb, you should reserve 10 percent of your revenue for repairs and maintenance.
· Are there any deferred maintenance items that need attention? When was the roof installed? How old are the building's major systems? How old are the kitchens and appliances? Often, these items are neglected in investment properties and can significantly add to the cost. You should also budget an annual capital reserve for unexpected items (depending on the property and the age of the components). Your lender may have a specific requirement, so check. Even if not required, you should build in a reserve of at least 4 percent of your revenue.
· Is there an allowance for a property manager? Even if you plan to manage the property, you should budget a management fee to compensate yourself for your time, in case you later decide to pay a management company and because if you ever sell, the buyer will account for that cost in his model. Lenders will factor in a management fee, usually between 6 percent and 8 percent of revenue for a small residential property.
· Are there reserves for vacancies? A lender in this market will typically factor in a 5 percent vacancy rate in a stable neighborhood.
Now you're ready to build your financial model. To keep things simple, we will build the model for only the first year. Typically, such calculations extend for three to five years.
Let's say that, to be conservative, you have assumed zero appreciation in the building's value. Also, you believe the seller's rent projections are accurate and there are no major deferred capital expenditures. However, you did note that there were no allowances for vacancy, capital reserves or a property manager, and you thought the reserve for repairs and maintenance was too low. So:
· Gross annual rent: $90,000
Vacancy allowance: $4,500 (5 percent)
Property manager: $5,400 (6 percent)
Utilities: $10,000
Insurance: $3,000
Capital reserve: $3,600 (4 percent)
Taxes: $6,000
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Using these more realistic expense figures, the property's net operating income would be $48,500 -- a big difference from the $69,000 you would have taken in under the more optimistic scenario.
With these changes, the projected financial performance has deteriorated significantly. The cap rate has dropped to 4.85 percent from the 6.9 percent suggested by the seller's math. Now, this property does not look as promising, but your analysis is still not complete.
Assess Your Risks
Next you must evaluate your financing options. How much leverage will the property bear, and what are the available terms of that debt?
Let's assume you are planning to put down 20 percent and finance the rest, and that you would like to break even on a cash-flow basis -- meaning you want the property to bring in enough profit to cover your financing costs. Given that you expect the property to generate $48,500, your only option is to try to secure an interest-only loan charging about 6 percent (6 percent times $800,000 is $48,000). In this mortgage market, that means that you would most likely be limited to a short-term adjustable-rate mortgage, thereby exposing yourself to interest rate risk later when the interest rate adjusts.
More troubling is that you have no margin for error. If your expenses are higher than projected, or your rental income drops, you will start bleeding cash.
Now, here's the scary part. Let's say your projections are off and your property's net operating income is only $40,000. That means you're paying $8,000 a year after debt service. You want to sell. However, based on a 4.85 percent cap rate, you would get about only $825,000 (i.e. net operating income divided by cap rate). After paying your closing costs, you are unlikely to be able to repay the full amount of your debt.
That's right: A few faulty assumptions about a property's operating performance could result in not only losing your entire investment but also having to bring additional cash to the table just to get out of the deal. Ouch!
Consider what would happen if five years from now, the going cap rate for these kinds of investment properties reverts toward its historical average and is at 8 percent. In other words, investors insist on paying a price that would result in an 8 percent return, rather than the lower return investors appear willing to accept today. Assuming no change in your net operating income over the intervening period, the property value would have plummeted to $500,000. Big Ouch!
Other Sources of Value
As scary as the above scenario is, this property still could be a good investment, but only if you can identify other sources of value. If you can, you should make assumptions about their impact on your investment and build that information into your financial model.
Generally, these sources of value fall into four groups: improvements, additional revenue opportunities, local catalysts and systemic shifts in the marketplace.Fishing for Hot Investments in A Cool Market
· Improvements include changes as simple as adding a new coat of paint or more involved projects such as a complete renovation. These changes should enable you to charge higher rents and get more money when you sell the property.
· Investors frequently overlook additional revenue opportunities . For example, perhaps you can add coin-operated laundry machines, charge for parking or sell advertising space on the side of the building. Alternatively, maybe you can change the building's use -- when permitted by local zoning laws -- making it a more profitable endeavor. Indeed, many local investors have made fortunes in the last several years by converting small rental apartment buildings into condominiums and selling them.
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In the aforementioned case, if you believe you could sell each unit for $400,000 as a condominium, then you would have $600,000 (four times $400,000 is $1.6 million, less the $1 million you paid for the property) to cover renovations, transfer, conversion and carrying costs and -- we hope -- profit.
· Local catalysts are changes in the area that could increase (or decrease) the value of the underlying property faster than the general market. For example, is a new Metro station opening or new commercial development coming to the area? On the flip side, is a major employer leaving? If so, that could decrease your property's value. Shrewd investors often start by identifying these positive catalysts and then limiting their search to nearby properties.
For instance, just in the District, there are extensive plans for new commercial development in Columbia Heights and near the Friendship Heights Metro station. And of course, the proposed new baseball stadium in Southeast has attracted flocks of real estate investors big and small who are betting that a stadium will be a positive local catalyst.
· Systemic shifts change the entire investment landscape in a city or nationwide. These shifts are sometimes obvious, with predictable consequences. For instance, the 1968 D.C. riots devastated neighborhoods and left commercial corridors traumatized for decades. More often, these shifts are somewhat obscure and their impact understood only in hindsight. If you can see a shift coming and understand its impact before the market does, you may be able to profit.
Recent examples of such systemic shifts include changes to the tax code. For example, the Tax Reform Act of 1986 contributed significantly to the decline of the real estate market in the late 1980s by making real estate a less desirable investment. Almost a decade later, the Taxpayer Relief Act of 1997 had the reverse effect and arguably has been one of the key drivers of the current real estate boom. That law enabled a single homeowner to exempt $250,000 in capital gains from the sale of a principal residence under certain conditions ($500,000 for married couples). The homeowner could theoretically repeat the process every two years, creating a strong incentive for individuals to speculate in the housing market.
Keep in mind there are other factors to consider when evaluating an investment property that are beyond the scope of this article. They include property condition, leases and contracts, title, zoning, rent-control laws, tenants' rights, tax implications, capital gains treatments, deferred depreciation expense and recapture rules, closing costs, historical and environmental easements. There are experts out there -- lawyers, lenders, accountants and real estate agents -- who may be able to help determine the right choice for you in this uncertain investing environment.
Steven C. Wydler and Hans L. Wydler are Long & Foster real estate agents who work together as the Wydler Brothers Realty Team. Steven, who is based in McLean, is a former transactional lawyer. Hans, based in Bethesda, has an MBA from Harvard Business School and more than 15 years of marketing experience. Both are real estate investors.
Repairs and maintenance: $9,000 (10 percent)
By Hans L. Wydler and Steven C. WydlerSpecial to The Washington PostSaturday, January 28, 2006; Page F01
As the frenzied local real estate market appears to be cooling down, we are being asked a lot whether real estate is still a good investment.
As real estate agents, we tell our clients that it can be, but the risk of making a poor investment is increasing because prices are high and there's no guarantee that returns will justify those prices. Now more than ever, an investor must understand the fundamentals and remember that evaluating an investment property is like peeling an onion: There are many layers, and if you do it wrong, you'll cry.
the frenzied local real estate market appears to be cooling down, we are being asked a lot whether real estate is still a good investment. One feature of real estate as an investment is that it is so easily leveraged. That means you can use borrowed money to increase the return on your......','Hans L. Wydler and Steven C. Wydler') ;
document.write( Your first step in evaluating a potential real estate investment should be to determine whether it fits your portfolio and financial plan. People tend to be at one extreme or the other: Either they have no real estate exposure or they are overexposed. A well-diversified portfolio should include some real estate, but not all real estate.
The next issue to consider is what type of real estate investment makes the most sense for you. There are many choices -- raw land, office buildings, warehouses, gas stations, apartment buildings, condominiums, real estate investment trusts, private syndications, etc. Each comes with its own risks, rewards and management challenges. But because many investors start with residential real estate, we will focus on residential real estate investments that generate rental income.
Realistically evaluating the finances of the individual property you are considering is the key to figuring out what might be a hot investment, even in a cooling market.
Understanding Leverage
One feature of real estate as an investment is that it is so easily leveraged. That means you can use borrowed money to increase the return on your capital. Investors can put in a relatively small amount of cash, perhaps 5 percent to 20 percent of the purchase price, and borrow the rest.
In a market that appreciates rapidly, as happened locally over recent years, investors have been able to achieve extraordinary returns on their capital, sometimes doubling their investment in a year or two. For example, consider the impact of leverage on a homeowner who bought a house with 10 percent down, kept it for two years, and then sold it for 20 percent more than he paid, after expenses. His return on invested capital wasn't 20 percent; it was 200 percent. That is, if the investor put $10,000 down on a $100,000 property and sold it for $120,000, the $10,000 would have tripled to $30,000 after paying off the $90,000 mortgage.
However, returns like that aren't guaranteed, and leverage can magnify losses. Using that same simple example, if the property sold for just $80,000, the $20,000 bath the investor would take isn't a 20 percent loss on the $10,000 investment. The entire investment would be lost, and the investor would have to pay another $10,000.
In contrast, with most unleveraged investments, you won't go in the hole: If you buy $1,000 in stock, you won't lose more than $1,000.
So how do you evaluate the odds on your real estate investment? It takes some math.
Building a Financial Model
To illustrate, here's an analysis of a hypothetical real estate investment.
Let's assume you want to own a small, multifamily rental property and find the following listing: "Four-unit apartment building in NW D.C. Strong rental history. Great potential for condo conversion. Charming building in historic neighborhood."
The seller is asking $1 million. He provides the following financial information. (All revenue and expense numbers are annual, from 2005.)
· Gross annual rent: $90,000
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· Utilities: $10,000
· Repairs and maintenance: $2,000
· Insurance: $3,000
· Taxes: $6,000
That means the property brings in $90,000 a year in rent, and expenses are $21,000. That means revenue minus expenses, known as net operating income, is $69,000.
Is this property a good investment? Let's take a look.
First, as with any investment, you must determine a way to evaluate the rough attractiveness of the investment before proceeding. For instance, in the stock market, many investors use the price-to-earnings ratio, or P/E. In real estate, investors often use the property's capitalization or "cap rate." This, too, measures how the price of a property relates to its earnings stream. The cap rate is calculated by dividing the net operating income by the purchase price. Because it is calculated without factoring in financing costs, the cap rate shows you the rate of return you would expect if you bought the property with all cash.
In this hypothetical example, if you relied only on the information provided by the seller, it would appear that this property's cap rate is 6.9 percent. In Washington, 6.9 percent is currently considered a good return for this type of property, though cap rates fluctuate over time. (An investor who will accept a lower cap rate will be willing to pay more for a property than one who insists on a higher return on the investment.) Historically, 6.9 percent is on the low side, but more on the implications shortly.
Remember that the seller's information is only a starting point. Your next task is to develop your assumptions and build your own financial model. Here are some basic due-diligence questions to consider.
· Are the rental income projections realistic? Check newspaper and Internet ads and visit similarly priced rental units. Ask to review existing lease agreements. Make sure that you can get the rents the seller is saying you can expect. Are there opportunities to raise rents? Are any rent-control laws in place?
· Are the operating costs realistic? Make sure the seller's list is comprehensive and accurate (utilities, repairs, maintenance, property management, insurance, trash, pest control, advertising, supplies, cleaning, etc.). Verify estimates with third parties whenever possible. Get the utility bills directly from the utility companies; call your own insurance company; check the tax records. As a general rule of thumb, you should reserve 10 percent of your revenue for repairs and maintenance.
· Are there any deferred maintenance items that need attention? When was the roof installed? How old are the building's major systems? How old are the kitchens and appliances? Often, these items are neglected in investment properties and can significantly add to the cost. You should also budget an annual capital reserve for unexpected items (depending on the property and the age of the components). Your lender may have a specific requirement, so check. Even if not required, you should build in a reserve of at least 4 percent of your revenue.
· Is there an allowance for a property manager? Even if you plan to manage the property, you should budget a management fee to compensate yourself for your time, in case you later decide to pay a management company and because if you ever sell, the buyer will account for that cost in his model. Lenders will factor in a management fee, usually between 6 percent and 8 percent of revenue for a small residential property.
· Are there reserves for vacancies? A lender in this market will typically factor in a 5 percent vacancy rate in a stable neighborhood.
Now you're ready to build your financial model. To keep things simple, we will build the model for only the first year. Typically, such calculations extend for three to five years.
Let's say that, to be conservative, you have assumed zero appreciation in the building's value. Also, you believe the seller's rent projections are accurate and there are no major deferred capital expenditures. However, you did note that there were no allowances for vacancy, capital reserves or a property manager, and you thought the reserve for repairs and maintenance was too low. So:
· Gross annual rent: $90,000
Vacancy allowance: $4,500 (5 percent)
Property manager: $5,400 (6 percent)
Utilities: $10,000
Insurance: $3,000
Capital reserve: $3,600 (4 percent)
Taxes: $6,000
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Using these more realistic expense figures, the property's net operating income would be $48,500 -- a big difference from the $69,000 you would have taken in under the more optimistic scenario.
With these changes, the projected financial performance has deteriorated significantly. The cap rate has dropped to 4.85 percent from the 6.9 percent suggested by the seller's math. Now, this property does not look as promising, but your analysis is still not complete.
Assess Your Risks
Next you must evaluate your financing options. How much leverage will the property bear, and what are the available terms of that debt?
Let's assume you are planning to put down 20 percent and finance the rest, and that you would like to break even on a cash-flow basis -- meaning you want the property to bring in enough profit to cover your financing costs. Given that you expect the property to generate $48,500, your only option is to try to secure an interest-only loan charging about 6 percent (6 percent times $800,000 is $48,000). In this mortgage market, that means that you would most likely be limited to a short-term adjustable-rate mortgage, thereby exposing yourself to interest rate risk later when the interest rate adjusts.
More troubling is that you have no margin for error. If your expenses are higher than projected, or your rental income drops, you will start bleeding cash.
Now, here's the scary part. Let's say your projections are off and your property's net operating income is only $40,000. That means you're paying $8,000 a year after debt service. You want to sell. However, based on a 4.85 percent cap rate, you would get about only $825,000 (i.e. net operating income divided by cap rate). After paying your closing costs, you are unlikely to be able to repay the full amount of your debt.
That's right: A few faulty assumptions about a property's operating performance could result in not only losing your entire investment but also having to bring additional cash to the table just to get out of the deal. Ouch!
Consider what would happen if five years from now, the going cap rate for these kinds of investment properties reverts toward its historical average and is at 8 percent. In other words, investors insist on paying a price that would result in an 8 percent return, rather than the lower return investors appear willing to accept today. Assuming no change in your net operating income over the intervening period, the property value would have plummeted to $500,000. Big Ouch!
Other Sources of Value
As scary as the above scenario is, this property still could be a good investment, but only if you can identify other sources of value. If you can, you should make assumptions about their impact on your investment and build that information into your financial model.
Generally, these sources of value fall into four groups: improvements, additional revenue opportunities, local catalysts and systemic shifts in the marketplace.Fishing for Hot Investments in A Cool Market
· Improvements include changes as simple as adding a new coat of paint or more involved projects such as a complete renovation. These changes should enable you to charge higher rents and get more money when you sell the property.
· Investors frequently overlook additional revenue opportunities . For example, perhaps you can add coin-operated laundry machines, charge for parking or sell advertising space on the side of the building. Alternatively, maybe you can change the building's use -- when permitted by local zoning laws -- making it a more profitable endeavor. Indeed, many local investors have made fortunes in the last several years by converting small rental apartment buildings into condominiums and selling them.
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In the aforementioned case, if you believe you could sell each unit for $400,000 as a condominium, then you would have $600,000 (four times $400,000 is $1.6 million, less the $1 million you paid for the property) to cover renovations, transfer, conversion and carrying costs and -- we hope -- profit.
· Local catalysts are changes in the area that could increase (or decrease) the value of the underlying property faster than the general market. For example, is a new Metro station opening or new commercial development coming to the area? On the flip side, is a major employer leaving? If so, that could decrease your property's value. Shrewd investors often start by identifying these positive catalysts and then limiting their search to nearby properties.
For instance, just in the District, there are extensive plans for new commercial development in Columbia Heights and near the Friendship Heights Metro station. And of course, the proposed new baseball stadium in Southeast has attracted flocks of real estate investors big and small who are betting that a stadium will be a positive local catalyst.
· Systemic shifts change the entire investment landscape in a city or nationwide. These shifts are sometimes obvious, with predictable consequences. For instance, the 1968 D.C. riots devastated neighborhoods and left commercial corridors traumatized for decades. More often, these shifts are somewhat obscure and their impact understood only in hindsight. If you can see a shift coming and understand its impact before the market does, you may be able to profit.
Recent examples of such systemic shifts include changes to the tax code. For example, the Tax Reform Act of 1986 contributed significantly to the decline of the real estate market in the late 1980s by making real estate a less desirable investment. Almost a decade later, the Taxpayer Relief Act of 1997 had the reverse effect and arguably has been one of the key drivers of the current real estate boom. That law enabled a single homeowner to exempt $250,000 in capital gains from the sale of a principal residence under certain conditions ($500,000 for married couples). The homeowner could theoretically repeat the process every two years, creating a strong incentive for individuals to speculate in the housing market.
Keep in mind there are other factors to consider when evaluating an investment property that are beyond the scope of this article. They include property condition, leases and contracts, title, zoning, rent-control laws, tenants' rights, tax implications, capital gains treatments, deferred depreciation expense and recapture rules, closing costs, historical and environmental easements. There are experts out there -- lawyers, lenders, accountants and real estate agents -- who may be able to help determine the right choice for you in this uncertain investing environment.
Steven C. Wydler and Hans L. Wydler are Long & Foster real estate agents who work together as the Wydler Brothers Realty Team. Steven, who is based in McLean, is a former transactional lawyer. Hans, based in Bethesda, has an MBA from Harvard Business School and more than 15 years of marketing experience. Both are real estate investors.
Repairs and maintenance: $9,000 (10 percent)
Source oil and gas
I guess the purpose of this blog is to be my intro to blogging and to see if i can provide myself and the world any useful info. I am looking at investing in oil and gas leases. Yes, i am insane.
I will always maintain real estate as my base level of investing, but I do want to diversify. I dont know if I will buy this one, yet it is worth a look.
private offering.
30 k per share.
gbr
I guess the purpose of this blog is to be my intro to blogging and to see if i can provide myself and the world any useful info. I am looking at investing in oil and gas leases. Yes, i am insane.
I will always maintain real estate as my base level of investing, but I do want to diversify. I dont know if I will buy this one, yet it is worth a look.
private offering.
30 k per share.
gbr
Rayonier
This is an exellent timber reit that i have been dollar cost averaging into. Ticker is ryn. Just look at their formidable chart. Overall, i dont like equities investing, but if i find pretty sure thing type stuff, i will place my cash there so i get a better return on my cash. Ryn seems to meet this standard. So far, i have only purchased about 5,000 dollars of it.
gbr
This is an exellent timber reit that i have been dollar cost averaging into. Ticker is ryn. Just look at their formidable chart. Overall, i dont like equities investing, but if i find pretty sure thing type stuff, i will place my cash there so i get a better return on my cash. Ryn seems to meet this standard. So far, i have only purchased about 5,000 dollars of it.
gbr
