Excuses and Promises
I have not written for a while. I have had a very intense teaching and traveling schedule and a little bit of writer's block. I will write something tomorrow. It will not be about real estate. It will be about travel. I will be saying bad things about Orbitz and Lot Polish Airlines. Don't you love smut?
David Segrest
Friday, August 31, 2007
Government Immigration Policies and International Real Estate
Government Immigration Policies and International Real Estate
The real problem in immigration may be the lack of a clear policy as much as the policies themselves. Visa policies for visitors are as much of a problem as the restrictions on permanent residents. The attitude of the government, reflecting the attitude of many Americans, is fear driven. The politicians are afraid to lose their jobs. Many other Americans have a similar fear.
The real results of immigration could be very different with an intelligent immigration policy. The USA could be an economic retirement alternative for Europeans. This would spur the economy, increasing jobs without taking jobs. Skilled and better educated workers could fill serious science, mathematics, engineering and teaching jobs. The taxes and social security they pay would offset the problems that will be caused by the baby boomer bulge as we move through the “snake”.
Lower skilled workers would fill the jobs that undocumented workers fill now. If the legal pressures were removed they would not add to crime and social service problems. States have made it almost impossible for undocumented persons to get drivers’ licenses. This means they drive with no license and no insurance. Part time residents can only get licenses for limited periods of time. A person who spends 6 months out of the year here has to get a new license every time they come.
Tourism is discouraged by the policies of immigration and security. A valuable industry is losing a lot of revenue. This business is being driven elsewhere. The current stupid policies are a partial cause of our current economic slowdown. Complain to your elected officials.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
The real problem in immigration may be the lack of a clear policy as much as the policies themselves. Visa policies for visitors are as much of a problem as the restrictions on permanent residents. The attitude of the government, reflecting the attitude of many Americans, is fear driven. The politicians are afraid to lose their jobs. Many other Americans have a similar fear.
The real results of immigration could be very different with an intelligent immigration policy. The USA could be an economic retirement alternative for Europeans. This would spur the economy, increasing jobs without taking jobs. Skilled and better educated workers could fill serious science, mathematics, engineering and teaching jobs. The taxes and social security they pay would offset the problems that will be caused by the baby boomer bulge as we move through the “snake”.
Lower skilled workers would fill the jobs that undocumented workers fill now. If the legal pressures were removed they would not add to crime and social service problems. States have made it almost impossible for undocumented persons to get drivers’ licenses. This means they drive with no license and no insurance. Part time residents can only get licenses for limited periods of time. A person who spends 6 months out of the year here has to get a new license every time they come.
Tourism is discouraged by the policies of immigration and security. A valuable industry is losing a lot of revenue. This business is being driven elsewhere. The current stupid policies are a partial cause of our current economic slowdown. Complain to your elected officials.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Wednesday, August 22, 2007
Earning a living as and International Real Estate Broker
There are many ways to earn a living in International real estate. It is best to find one or two and stick with those. If the first choice does not work out, build on the experience you have gained and try something else.
Making a business plan: It is necessary to calculate the time and money needed for any endeavor before beginning. A good business plan can be a roadmap to success. A business plan starts with a mission statement. A mission statement for a broker who works with investment properties might read:
“ I assist in the formation of wealth by finding, evaluating and presenting properties that are appropriate for the portfolios of individuals or organizations.”
Once a mission statement has been developed a “break-even” cash flow level must be established. In a business plan for an individual agent the starting place is to determine minimum personal financial requirements. Then the fixed costs of operating the business are added. This gives us the total fixed cost of the enterprise.
The next step is to calculate the profit margin of each transaction or service that will be provided. In real estate this is the most difficult step. A person who has a history of a year or two in the business can use historical data. For a new agent, the only source of these numbers is to talk to experienced agents. These numbers will be different for everyone; so great care should be taken in the research for this step. Now an estimate could be made of the average transaction or service gross revenue. The profit margin can be applied and the number of transactions required to make the break-even income can be estimated.
Now the activities required to cause the transactions to occur must be listed and “closing ratios” must be established. Finally the amount of activity is determined that must be completed to make the “break-even” cash flow level. By examining the activity required the feasibility of the enterprise can be determined. If the enterprise is not feasible or if break even is all that can be expected, the entire process must be re-examined. It may be necessary to go all the way back to the mission statement.
Here is an example of the portion of the business plan discussed above. Please be aware that all of the numbers and assumptions are “plucked from the air”.
Minimum personal requirements (monthly) $ 2500
Fixed business expenses
Car $ 700
Supplies & Postage 200
Office expenses 800
Telephone 400
Travel 1200
Personal Advertising 200
Dues 200
Miscellaneous 200
3900
Break-even cash flow $ 6400
Because the mission statement states that properties will be found for investors, there will be no marketing costs for the individual transactions. It might even be assumed that it will not be necessary to look at every property that is offered and possibly not even all of the properties that are sold. Perhaps the cost percentage ratio of each transaction in this plan will be only 5%. Assuming that the average commission is $35,000. The net profit on each transaction is $33,250.
Since the break even of $6400 per month adds up to 76,800, 2.3 transactions per year are required to break even. If each investor buys a property every 3 years, 7 investors are needed. It will be considered that an investor will be considered “found” when the first property is purchased by them. A further assumption may be made that every year one investor will die, retire, or get out of the business. Also the assumption will be made that one out of every ten properties found will be suitable for one of our investors and one out of every 10 properties offered will be purchased.
This mission statement in the model requires two basic types of activities. One is finding and qualifying investors and the second is finding suitable properties. Another blog will discuss acomplishing these objectives.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
There are many ways to earn a living in International real estate. It is best to find one or two and stick with those. If the first choice does not work out, build on the experience you have gained and try something else.
Making a business plan: It is necessary to calculate the time and money needed for any endeavor before beginning. A good business plan can be a roadmap to success. A business plan starts with a mission statement. A mission statement for a broker who works with investment properties might read:
“ I assist in the formation of wealth by finding, evaluating and presenting properties that are appropriate for the portfolios of individuals or organizations.”
Once a mission statement has been developed a “break-even” cash flow level must be established. In a business plan for an individual agent the starting place is to determine minimum personal financial requirements. Then the fixed costs of operating the business are added. This gives us the total fixed cost of the enterprise.
The next step is to calculate the profit margin of each transaction or service that will be provided. In real estate this is the most difficult step. A person who has a history of a year or two in the business can use historical data. For a new agent, the only source of these numbers is to talk to experienced agents. These numbers will be different for everyone; so great care should be taken in the research for this step. Now an estimate could be made of the average transaction or service gross revenue. The profit margin can be applied and the number of transactions required to make the break-even income can be estimated.
Now the activities required to cause the transactions to occur must be listed and “closing ratios” must be established. Finally the amount of activity is determined that must be completed to make the “break-even” cash flow level. By examining the activity required the feasibility of the enterprise can be determined. If the enterprise is not feasible or if break even is all that can be expected, the entire process must be re-examined. It may be necessary to go all the way back to the mission statement.
Here is an example of the portion of the business plan discussed above. Please be aware that all of the numbers and assumptions are “plucked from the air”.
Minimum personal requirements (monthly) $ 2500
Fixed business expenses
Car $ 700
Supplies & Postage 200
Office expenses 800
Telephone 400
Travel 1200
Personal Advertising 200
Dues 200
Miscellaneous 200
3900
Break-even cash flow $ 6400
Because the mission statement states that properties will be found for investors, there will be no marketing costs for the individual transactions. It might even be assumed that it will not be necessary to look at every property that is offered and possibly not even all of the properties that are sold. Perhaps the cost percentage ratio of each transaction in this plan will be only 5%. Assuming that the average commission is $35,000. The net profit on each transaction is $33,250.
Since the break even of $6400 per month adds up to 76,800, 2.3 transactions per year are required to break even. If each investor buys a property every 3 years, 7 investors are needed. It will be considered that an investor will be considered “found” when the first property is purchased by them. A further assumption may be made that every year one investor will die, retire, or get out of the business. Also the assumption will be made that one out of every ten properties found will be suitable for one of our investors and one out of every 10 properties offered will be purchased.
This mission statement in the model requires two basic types of activities. One is finding and qualifying investors and the second is finding suitable properties. Another blog will discuss acomplishing these objectives.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Tuesday, August 21, 2007
Climate Change and International Real Estate
Climate Change and International Real Estate
As I write today the “Mayan Riviera” is being pounded by Hurricane Dean. This is a category 5 hurricane. The area just recovered from Hurricane Wilma. No one really knows if climate change is responsible for increased hurricane intensity or if it is just a cyclical thing. We do know that climates are changing. Climate change will have to affect land uses.
The variety of crops that are planted is already changing in England and many of the Scandinavian countries. Fish migrations are changing. As the polar ice packs break up, new areas will become habitable. Other areas may become less desirable. The Sahara desert was once a fertile plain. Some of the “improvements” that come with habitation are actually causing some of the problems.
Draining the swamps in Florida has affected the aquifer that supplies water to most of the southeast. The drought conditions cause seasonal wildfires. Channeling the Mississippi has increased the intensity and destructiveness of the floods. Many of the causes of climate change are irreversible. All that most of us can do is react. There are things we can do to reduce greenhouse emissions. The behavior changes that are needed to effect real change may cost more than we are willing to pay.
As people move to the wilderness to avoid overcrowding and pollution, the over crowding and pollution follows. Is climate change a “market landmark”? What will happen where? How can savvy investors benefit from the changes? What can we do personally to avoid destroying our habitat?
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
As I write today the “Mayan Riviera” is being pounded by Hurricane Dean. This is a category 5 hurricane. The area just recovered from Hurricane Wilma. No one really knows if climate change is responsible for increased hurricane intensity or if it is just a cyclical thing. We do know that climates are changing. Climate change will have to affect land uses.
The variety of crops that are planted is already changing in England and many of the Scandinavian countries. Fish migrations are changing. As the polar ice packs break up, new areas will become habitable. Other areas may become less desirable. The Sahara desert was once a fertile plain. Some of the “improvements” that come with habitation are actually causing some of the problems.
Draining the swamps in Florida has affected the aquifer that supplies water to most of the southeast. The drought conditions cause seasonal wildfires. Channeling the Mississippi has increased the intensity and destructiveness of the floods. Many of the causes of climate change are irreversible. All that most of us can do is react. There are things we can do to reduce greenhouse emissions. The behavior changes that are needed to effect real change may cost more than we are willing to pay.
As people move to the wilderness to avoid overcrowding and pollution, the over crowding and pollution follows. Is climate change a “market landmark”? What will happen where? How can savvy investors benefit from the changes? What can we do personally to avoid destroying our habitat?
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Monday, August 20, 2007
Panama Rising
Panama Rising
The construction cranes dominate the skyline of Panama City. Panama seems to be a perfect example of a country doing every thing right. Since the departure of Manuel Noriega and the return of the Panama Canal by the USA, the real estate industry in Panama has done almost nothing but prosper.
Panama made a serious commitment to good management of the resources they obtained in the Canal handover. They have either sold the properties at auction or given concessions to commercial interests providing jobs. In both cases generous tax holidays were offered. The economy got a kick-start from very low paying manufacturing jobs. As wages increased these jobs have moved on to be replaced by better jobs in banking, tourism and the high tech sector.
The retirement market, that once provided buyers for real estate, has been replaced by a thriving second home market. Compared with Costa Rica, the real estate is still cheap. The government guarantees title. The real estate agents are licensed and adhere to a code of ethics. This is a safe market. The environment is protected as well and some of the old problems are being cleaned up. There is still a little bit of corruption; but it is being rooted out. A government official wiped out a banyan swamp to develop the property; but he was caught and imprisoned.
If you are interested in Panama, I have excellent connections there and can introduce you to a competent real estate professional or developer.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
The construction cranes dominate the skyline of Panama City. Panama seems to be a perfect example of a country doing every thing right. Since the departure of Manuel Noriega and the return of the Panama Canal by the USA, the real estate industry in Panama has done almost nothing but prosper.
Panama made a serious commitment to good management of the resources they obtained in the Canal handover. They have either sold the properties at auction or given concessions to commercial interests providing jobs. In both cases generous tax holidays were offered. The economy got a kick-start from very low paying manufacturing jobs. As wages increased these jobs have moved on to be replaced by better jobs in banking, tourism and the high tech sector.
The retirement market, that once provided buyers for real estate, has been replaced by a thriving second home market. Compared with Costa Rica, the real estate is still cheap. The government guarantees title. The real estate agents are licensed and adhere to a code of ethics. This is a safe market. The environment is protected as well and some of the old problems are being cleaned up. There is still a little bit of corruption; but it is being rooted out. A government official wiped out a banyan swamp to develop the property; but he was caught and imprisoned.
If you are interested in Panama, I have excellent connections there and can introduce you to a competent real estate professional or developer.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Sunday, August 19, 2007
Real Estate Agents Around the World
Real Estate Agents around the World
Most countries and markets have some really professional practitioners in the real estate business. Finding them is usually the problem. In many countries the industry is totally unregulated; so bad actors don’t get punished or removed from the business. They continue sowing havoc throughout the local market.
The lack of regulation is the main problem. The buyers and sellers are also a large part of the problem. The buyers and sellers have no loyalty to the broker. The broker returns no loyalty to the buyer or seller. Every party looks out for their own self-interest only. No one really benefits. Markets need several things for the brokerage system to function well and provide actual benefits for the buyers and sellers.
The first is regulation and licensing. This is best done by government. In some places where government is unwilling to do the job. Trade associations try to fill the gap. A good example is AMPI in Mexico. They have a code of ethics and minimum membership requirements. This is better than no regulation at all; but it cannot compare with government regulation. Panama is an excellent example of regulation stimulating the market. Since they began licensing brokers, the real estate business and the brokerage business have both prospered.
The second thing is exclusive listings. When a broker cannot get an exclusive listing they have to keep the fact that the property is on the market a secret in order to be in the middle of the transaction. When “everyone” is responsible for marketing, “no-one” does it.
A multiple listing system, where all brokers share all listings is the next thing. Multiple listing systems and exclusive listings are like the chicken and the egg. Either is difficult without the other. Brokers sharing listings with universal offers of cooperation is the only way for the brokerage business to function efficiently and for the real estate markets to achieve their full potential.
Transparency is also a necessity. Unless the data on comparable sales is available, pricing and appraisals are just guess work.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Most countries and markets have some really professional practitioners in the real estate business. Finding them is usually the problem. In many countries the industry is totally unregulated; so bad actors don’t get punished or removed from the business. They continue sowing havoc throughout the local market.
The lack of regulation is the main problem. The buyers and sellers are also a large part of the problem. The buyers and sellers have no loyalty to the broker. The broker returns no loyalty to the buyer or seller. Every party looks out for their own self-interest only. No one really benefits. Markets need several things for the brokerage system to function well and provide actual benefits for the buyers and sellers.
The first is regulation and licensing. This is best done by government. In some places where government is unwilling to do the job. Trade associations try to fill the gap. A good example is AMPI in Mexico. They have a code of ethics and minimum membership requirements. This is better than no regulation at all; but it cannot compare with government regulation. Panama is an excellent example of regulation stimulating the market. Since they began licensing brokers, the real estate business and the brokerage business have both prospered.
The second thing is exclusive listings. When a broker cannot get an exclusive listing they have to keep the fact that the property is on the market a secret in order to be in the middle of the transaction. When “everyone” is responsible for marketing, “no-one” does it.
A multiple listing system, where all brokers share all listings is the next thing. Multiple listing systems and exclusive listings are like the chicken and the egg. Either is difficult without the other. Brokers sharing listings with universal offers of cooperation is the only way for the brokerage business to function efficiently and for the real estate markets to achieve their full potential.
Transparency is also a necessity. Unless the data on comparable sales is available, pricing and appraisals are just guess work.
David Segrest is a REALTOR in Charlotte, NC
David S. Segrest, CIPS, CCIM, TRC, CEA
david@segrestrealty.com
http://www.segrestrealty.com
Serving the world in the Carolinas, Serving the Carolinas in the World
Thursday, August 16, 2007
The Flat World and International Real Estate
The Flat World and International Real Estate
Ever since reading Thomas Friedman’s The World is Flat, the implications of globalization have had entirely new meanings. A short summary of the book is that because of advances in technology and attitudes, and because of events like the fall of the Berlin Wall, anyone can have and operated a multinational corporation from their bedroom.
The most exciting implication of this to me, is that the bedroom can be anywhere in the world. There may be a few deep valleys somewhere, where a satellite dish would not work and no other internet service is available; but for the most part any location will work for many businesses.
Some businesses of course are highly localized. These people lose the flexibility that globalization affords; but they also avoid much of the global competition. I really love real estate; because my local business has protection from globalization and increased demand from foreign buyers. My international business gives me personal portability. My hardest decision is “where do I want to be”. Where do you want to be?
Ever since reading Thomas Friedman’s The World is Flat, the implications of globalization have had entirely new meanings. A short summary of the book is that because of advances in technology and attitudes, and because of events like the fall of the Berlin Wall, anyone can have and operated a multinational corporation from their bedroom.
The most exciting implication of this to me, is that the bedroom can be anywhere in the world. There may be a few deep valleys somewhere, where a satellite dish would not work and no other internet service is available; but for the most part any location will work for many businesses.
Some businesses of course are highly localized. These people lose the flexibility that globalization affords; but they also avoid much of the global competition. I really love real estate; because my local business has protection from globalization and increased demand from foreign buyers. My international business gives me personal portability. My hardest decision is “where do I want to be”. Where do you want to be?
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