Recession Proof Investment
In the last article we searched for a recession proof industry. I don’t know if we found one. I do know of a recession proof investment. As much as I love real estate as an investment vehicle, that even seems a little scary right now. Government bonds are fine if you don’t consider currency risk. Precious metals seem to be overpriced to me. If the economy gets better (surely it will someday), they will lose value.
Perhaps the best investment right now is to invest time and money in education. If one is careful what type of education one gets this should be a truly lasting asset with continuing high returns. The biggest challenge today would be to find a field of study that will not become obsolete. Any knowledge gained enriches ones enjoyment of life. Most of us now are looking for something to enrich our financial conditions. For me that points to real estate education.
There are many great designation programs available. Many people don’t feel prosperous enough to travel and take an expensive class. Maybe buying a book will help. It only counts if you read it. Also, one can do research into a subject online. Many of us have time and no money right now. Choosing a subject and researching it online is an excellent way to invest what is plentiful (time) and preserve what is scarce (money).
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, December 30, 2008
Monday, December 29, 2008
What is Recession Proof?
What is Recession Proof?
Before the current recession, there were quite a few industries that were considered recession proof. Food, energy, medical, even housing. “Everyone has to have food , clothing & shelter.”, right? The price of oil has dropped. Much of the recent spike in agriculture came for sugar and corn used in ethanol production. The prices in the grocery store don’t seem to have declined; but the farmers are hurting again.
Health care workers are doing ok. Health care providers are having a problem collecting bills. Laid off workers lose their health insurance; but they cannot be refused service for something life threatening. I will make no discussion on housing, even though that is how most of us make our living. Are we still making a living?
My wife is an architect. The architects have an expression for recession times. They consider themselves to be “self-unemployed”. Is that what some of the REALTORS are?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Before the current recession, there were quite a few industries that were considered recession proof. Food, energy, medical, even housing. “Everyone has to have food , clothing & shelter.”, right? The price of oil has dropped. Much of the recent spike in agriculture came for sugar and corn used in ethanol production. The prices in the grocery store don’t seem to have declined; but the farmers are hurting again.
Health care workers are doing ok. Health care providers are having a problem collecting bills. Laid off workers lose their health insurance; but they cannot be refused service for something life threatening. I will make no discussion on housing, even though that is how most of us make our living. Are we still making a living?
My wife is an architect. The architects have an expression for recession times. They consider themselves to be “self-unemployed”. Is that what some of the REALTORS are?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, December 26, 2008
Negativism & Bad News
Negativism & Bad News
The news has been so gloomy lately, I’ve just been expecting the whole world to come down around my ears; so when I felt something hit my ankles, I thought: My God it is even worse than I thought. When I got the courage up and looked down I realized it was only my pants. What on earth is the government up to now? Or maybe it’s the banks?
It is time to go back to the old basics. Don’t sweat the small stuff. -It’s all small stuff. Don Juan’s “man of power” knows that nothing really matters. He behaves as if everything does. Reality check…vacancy rates in the properties I manage are lower than they were last year at this time. Delinquencies are no better; but they are no worse. Neither my immediate family nor myself are sick. The greenhouse is doing well.
These are small things. They affect my life more than GDP per Capita or unemployment. I can sell all of my stocks and have a loss for my taxes. I can buy better stocks and just wait. Life is good…or at least good enough.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The news has been so gloomy lately, I’ve just been expecting the whole world to come down around my ears; so when I felt something hit my ankles, I thought: My God it is even worse than I thought. When I got the courage up and looked down I realized it was only my pants. What on earth is the government up to now? Or maybe it’s the banks?
It is time to go back to the old basics. Don’t sweat the small stuff. -It’s all small stuff. Don Juan’s “man of power” knows that nothing really matters. He behaves as if everything does. Reality check…vacancy rates in the properties I manage are lower than they were last year at this time. Delinquencies are no better; but they are no worse. Neither my immediate family nor myself are sick. The greenhouse is doing well.
These are small things. They affect my life more than GDP per Capita or unemployment. I can sell all of my stocks and have a loss for my taxes. I can buy better stocks and just wait. Life is good…or at least good enough.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Thursday, December 18, 2008
'Tis the Season
'Tis the Season
'Tis the season to not do business internationally. In the USA people are going to be working on the 25th. In many countries almost everything shuts down for the month of December. Most Latins celebrate 12 days of Christmas; but they have a getting ready and getting over period that extends until about January 6. Christmas is not the merchant’s bonanza elsewhere that it is here.
Outside of the USA, children and servants or employees receive a small gift from the parent or boss. The celebrations are the focus rather than the gifts. The celebrations are unbelievable. I had the wonderful experience of being in Brussels on St. Nicolas day. I just happened to be in the “Manikin Piss” square when the celebration started and the 4 societies of “Manikin Piss” competed to see who could do the most fantastic parade. This was like what I would imagine a medieval street carnival would be. I felt as if I had been transported to the middle ages.
Whatever religion or lack thereof you celebrate, I wish you much joy in this season and in the coming year.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
'Tis the season to not do business internationally. In the USA people are going to be working on the 25th. In many countries almost everything shuts down for the month of December. Most Latins celebrate 12 days of Christmas; but they have a getting ready and getting over period that extends until about January 6. Christmas is not the merchant’s bonanza elsewhere that it is here.
Outside of the USA, children and servants or employees receive a small gift from the parent or boss. The celebrations are the focus rather than the gifts. The celebrations are unbelievable. I had the wonderful experience of being in Brussels on St. Nicolas day. I just happened to be in the “Manikin Piss” square when the celebration started and the 4 societies of “Manikin Piss” competed to see who could do the most fantastic parade. This was like what I would imagine a medieval street carnival would be. I felt as if I had been transported to the middle ages.
Whatever religion or lack thereof you celebrate, I wish you much joy in this season and in the coming year.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, December 17, 2008
Benefits from Hard Times
Benefits from Hard Times
Polyanna is bound to be having 2nd thoughts if she is much exposed to the news. There are bound to be some lasting benefits from the current economic conditions. There are probably some short term benefits as well. Teachers and other public servants who have had to suffer with inferior wages at least can compare their lot favorably with people who are unemployed. Somehow being better off because someone else is worse off is not really all that great.
The auto manufacturers are bound to be happy to smash the unions. Public sympathy does not seem to be with the UAW right now. Think of this though. If their wages are reduced, what does this do to the general economy. The industrial bailout where everyone has to suffer a little may have some short term benefits. Long term everyone still loses. Metaphorically, our country is going into deeper debt to cover daily expenses. We could use the money obtained through this debt to buy assets like bridges, roads and schools. The money would put people to work.
Long term, we would be better off because we would at least have an asset to show for the crippling debt incurred. The asset may even help generate revenue to pay off the debt. It is similar to the choice between borrowing money to pay rent or borrowing money to buy a house.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Polyanna is bound to be having 2nd thoughts if she is much exposed to the news. There are bound to be some lasting benefits from the current economic conditions. There are probably some short term benefits as well. Teachers and other public servants who have had to suffer with inferior wages at least can compare their lot favorably with people who are unemployed. Somehow being better off because someone else is worse off is not really all that great.
The auto manufacturers are bound to be happy to smash the unions. Public sympathy does not seem to be with the UAW right now. Think of this though. If their wages are reduced, what does this do to the general economy. The industrial bailout where everyone has to suffer a little may have some short term benefits. Long term everyone still loses. Metaphorically, our country is going into deeper debt to cover daily expenses. We could use the money obtained through this debt to buy assets like bridges, roads and schools. The money would put people to work.
Long term, we would be better off because we would at least have an asset to show for the crippling debt incurred. The asset may even help generate revenue to pay off the debt. It is similar to the choice between borrowing money to pay rent or borrowing money to buy a house.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Monday, December 15, 2008
Market Bottoms
Market Bottoms
How does one know when the market has hit bottom? Maybe there will be a small surge. Take care. This could be the “dead cat bounce”. I think most of the markets are at or near their bottom. Some activity is taking place. Neither buyers nor sellers are negotiating the way they were even a month ago. People are counting the days until January 21st.
Market “fundamentals” are important. Faith is more important. Most of us believe that when the new administration comes in things will change for the better. Our beliefs, more that the actions of the new administration is what will change the market direction. For investors who have a definite strategy, based on property performance there has never been a better time to meet goals. Commercial real estate prices are finally in line with yields. Competing investments are yielding less. Vacancies reduce NOI (net operating income). This reduces the value of the property. It increases upside potential however.
Buying properties with high vacancy rates may seem scary right now. People with courage will probably make a lot of money. Concentrate on location. Physical conditions and leasing strategies can be fixed. Location will be critical as the economy bounces back. Cautious users know they cannot afford a bad location.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
How does one know when the market has hit bottom? Maybe there will be a small surge. Take care. This could be the “dead cat bounce”. I think most of the markets are at or near their bottom. Some activity is taking place. Neither buyers nor sellers are negotiating the way they were even a month ago. People are counting the days until January 21st.
Market “fundamentals” are important. Faith is more important. Most of us believe that when the new administration comes in things will change for the better. Our beliefs, more that the actions of the new administration is what will change the market direction. For investors who have a definite strategy, based on property performance there has never been a better time to meet goals. Commercial real estate prices are finally in line with yields. Competing investments are yielding less. Vacancies reduce NOI (net operating income). This reduces the value of the property. It increases upside potential however.
Buying properties with high vacancy rates may seem scary right now. People with courage will probably make a lot of money. Concentrate on location. Physical conditions and leasing strategies can be fixed. Location will be critical as the economy bounces back. Cautious users know they cannot afford a bad location.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Sunday, December 14, 2008
How Do You Know What to Pay?
How Do You Know What to Pay?
Yesterday, I visited my friend and neighbor Rick Stikeleather. He is one of the most successful small real estate investors I know. He also does brokerage and management. He buys the properties for income mostly; but when and area where he was heavily invested went through the gentrification process a few years ago he did sell the properties in that area.
I asked Rick, “Are you still buying?” He indicated that he was. I asked “How do you know what to pay?” He said, “I buy on the rent.” This is a really simple answer to a really complicated question. It summarizes the reason for his great success. Rick does not concentrate on how much the property will be worth next year or in five years. He concentrates on the return on his investment today. I can’t help but believe that in an uncertain environment this is the only valid approach.
The answer could be restated for homeowners or 2nd home buyers. What are the benefits you expect to receive? Are they worth the price? What are they worth to you? The answer to this question is more important than the actual market value. Market values go up and down. While benefits sometimes change, this is a much slower and less volatile aspect of property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Yesterday, I visited my friend and neighbor Rick Stikeleather. He is one of the most successful small real estate investors I know. He also does brokerage and management. He buys the properties for income mostly; but when and area where he was heavily invested went through the gentrification process a few years ago he did sell the properties in that area.
I asked Rick, “Are you still buying?” He indicated that he was. I asked “How do you know what to pay?” He said, “I buy on the rent.” This is a really simple answer to a really complicated question. It summarizes the reason for his great success. Rick does not concentrate on how much the property will be worth next year or in five years. He concentrates on the return on his investment today. I can’t help but believe that in an uncertain environment this is the only valid approach.
The answer could be restated for homeowners or 2nd home buyers. What are the benefits you expect to receive? Are they worth the price? What are they worth to you? The answer to this question is more important than the actual market value. Market values go up and down. While benefits sometimes change, this is a much slower and less volatile aspect of property.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, December 9, 2008
Does Barack Obama Read This Blog?
Does Barack Obama Read This Blog?
In the last posting, I suggest good old fashioned public works projects to put people back to work. It seems as if Barack Obama had the same idea. These projects are a stimulus package that always works and leaves a lasting legacy of public assets. There are still stone walls around Charlotte that were built by the WPA.
The Bush administration has been pretty generous. They set up a big $700 billion grab and then said, we are only going distribute ½ of the money to our buddies. We will leave the other half for the new administration to give to their buddies. I just can’t believe that Congress fell for that top down junk. If anything the measures they took will make things worse. They will certainly lead to more stratification of our society, which we definitely don’t need.
Roads bridges and schools benefit our country. Wars only benefit a few industries at the expense of the entire society. The tremendous projects that were planned for Iraq, many of them paid for and never built, would be very helpful here.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
In the last posting, I suggest good old fashioned public works projects to put people back to work. It seems as if Barack Obama had the same idea. These projects are a stimulus package that always works and leaves a lasting legacy of public assets. There are still stone walls around Charlotte that were built by the WPA.
The Bush administration has been pretty generous. They set up a big $700 billion grab and then said, we are only going distribute ½ of the money to our buddies. We will leave the other half for the new administration to give to their buddies. I just can’t believe that Congress fell for that top down junk. If anything the measures they took will make things worse. They will certainly lead to more stratification of our society, which we definitely don’t need.
Roads bridges and schools benefit our country. Wars only benefit a few industries at the expense of the entire society. The tremendous projects that were planned for Iraq, many of them paid for and never built, would be very helpful here.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Friday, December 5, 2008
What Happened to the Old Home Remedy
What Happened to the Old Home Remedy
The only benefit most of us get from the trickle down economic stimulus plans of the current administration is a warm damp feeling on the back of our necks. What happened to the old fashioned stimulus packages that always worked? Are they too old fashioned and unsophisticated? My dad always said that it never helped him when the Rockefellers got extra money; because he wasn’t smart enough to get it from him. When The working men got money he was smart enough to get some of it.
The roads and bridges throughout our country are in horrible condition and overcrowded. Those projects put people to work and stimulate the local and national economies. Commercial REALTORS® know that progress follows roads. Progress puts more people to work. The construction workers spend money at Walmart and the local restaurants and watering holes. The engineers spend money at Target, Sachs and the cheaper restaurants. These people buy homes and make mortgage payments. Usually their payments are on time.
Making jobs raises wages and income. Bailing out the auto industry or financial institutions requires that they cut jobs and reduce wages and benefits. How does this help the economy? The effect of the current bailout plans is only a further stratification of our society. The effect of new roads, schools and jobs would be growth in the economy and in the lifestyle of the people.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
The only benefit most of us get from the trickle down economic stimulus plans of the current administration is a warm damp feeling on the back of our necks. What happened to the old fashioned stimulus packages that always worked? Are they too old fashioned and unsophisticated? My dad always said that it never helped him when the Rockefellers got extra money; because he wasn’t smart enough to get it from him. When The working men got money he was smart enough to get some of it.
The roads and bridges throughout our country are in horrible condition and overcrowded. Those projects put people to work and stimulate the local and national economies. Commercial REALTORS® know that progress follows roads. Progress puts more people to work. The construction workers spend money at Walmart and the local restaurants and watering holes. The engineers spend money at Target, Sachs and the cheaper restaurants. These people buy homes and make mortgage payments. Usually their payments are on time.
Making jobs raises wages and income. Bailing out the auto industry or financial institutions requires that they cut jobs and reduce wages and benefits. How does this help the economy? The effect of the current bailout plans is only a further stratification of our society. The effect of new roads, schools and jobs would be growth in the economy and in the lifestyle of the people.
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Wednesday, December 3, 2008
The Time to Buy
The Time to Buy
Current events in Mumbai and Bangkok remind me of the old saying, “The time to buy is when the blood is in the streets.” I wonder how relevant that saying is today, when there is real blood in some streets and not just red ink. There are always people who have to sell right now for some reason or another. Unless there is a “seller’s market” these people will always present opportunities for bottom fishers. How many people in Bangkok or Mumbai will sell just because of the recent violence? How much lower price will they be willing to accept?
In areas where there is a prolonged conflict there are a lot of people who sell and leave regardless of the price they receive. In some of these markets the people just leave and abandon their property. We see this in Iraq and Sudan. Other people move into these homes and take them over, paying nothing. Sooner or later people come back and there is a big mess to straighten out. This is already happening in Baghdad.
What price will an investor pay in a case where the risk is so high. I used to go to seminars conducted by a man named Jimmy Napier. He taught us that if the yield is high enough, you can afford to lose your principal occasionally. How low does the price have to be for the yield to be that high?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Current events in Mumbai and Bangkok remind me of the old saying, “The time to buy is when the blood is in the streets.” I wonder how relevant that saying is today, when there is real blood in some streets and not just red ink. There are always people who have to sell right now for some reason or another. Unless there is a “seller’s market” these people will always present opportunities for bottom fishers. How many people in Bangkok or Mumbai will sell just because of the recent violence? How much lower price will they be willing to accept?
In areas where there is a prolonged conflict there are a lot of people who sell and leave regardless of the price they receive. In some of these markets the people just leave and abandon their property. We see this in Iraq and Sudan. Other people move into these homes and take them over, paying nothing. Sooner or later people come back and there is a big mess to straighten out. This is already happening in Baghdad.
What price will an investor pay in a case where the risk is so high. I used to go to seminars conducted by a man named Jimmy Napier. He taught us that if the yield is high enough, you can afford to lose your principal occasionally. How low does the price have to be for the yield to be that high?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Tuesday, December 2, 2008
Snow or No Snow
Snow or No Snow
Some Colorado ski resorts have between 14 and 17 inches of snow today. That is great for skiers and for the people who depend on that trade. I wonder how many people will spend the holiday season skiing. I wonder how many 2nd homes will be sold in these areas. This could be a really good time to get a great deal.
Of course for people who are not skiers this snow may just mean a hard time getting around. It is 42 degrees Fahrenheit in Charlotte this morning. That is not so bad; but it is wet and the cold goes straight to my bones. Do you think I am wishing for Mexico or Central America? You bet your sweet booty I am. What about people where it is snowing? Maybe some 2nd homes will be sold in warm places this season as well. This could be a really good time to get a great deal.
Every coin has 2 sides. Hopefully there will be a lot of sales. The retailers are getting a lot of traffic over the weekend. Perhaps the change of seasons, the holidays and the hopes for regime change in the USA will perk up the economy and get things rolling again. Do you think we have hit bottom yet?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
Some Colorado ski resorts have between 14 and 17 inches of snow today. That is great for skiers and for the people who depend on that trade. I wonder how many people will spend the holiday season skiing. I wonder how many 2nd homes will be sold in these areas. This could be a really good time to get a great deal.
Of course for people who are not skiers this snow may just mean a hard time getting around. It is 42 degrees Fahrenheit in Charlotte this morning. That is not so bad; but it is wet and the cold goes straight to my bones. Do you think I am wishing for Mexico or Central America? You bet your sweet booty I am. What about people where it is snowing? Maybe some 2nd homes will be sold in warm places this season as well. This could be a really good time to get a great deal.
Every coin has 2 sides. Hopefully there will be a lot of sales. The retailers are getting a lot of traffic over the weekend. Perhaps the change of seasons, the holidays and the hopes for regime change in the USA will perk up the economy and get things rolling again. Do you think we have hit bottom yet?
David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com
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