DA-TOPIC 3 – Artists Can Be Chronic Under Earners

Typically as artists we are either not valued by family, or maybe our parents were creative and we learned bad habits from them or we have the “them vs us” thing, or maybe we’ve never been around anyone who has paid for art so we don’t know how to price our work.  There are many contributing factors to the general result that often times as artists we are chronic under earners.
AND,
As artists our creativity isn’t limited to one avenue but rather that it expresses itself in all facets of our lives.  But when that creativity is applied to our money and finances it can sometimes get us into trouble.

Marjie A. recalls, “A speaker at a DA meeting once said ‘if I looked in my check book and I had checks then I believed I had money’.”  DA says don’t do unsecured debt like student loans or credit card debt – when you do you are betting against your own future.

“Being an honest straightforward person has really served me well.”  Marjie said, “And that means being honest with myself.”

A powerful tool within Debtors Anonymous is the Pressure Relief Group or PRG.  In the beginning, your PRG acts as a guide, helping you set up a spending plan, look at cash flow, listing expenses, outlining how income & expenses relate to each other and identifying your financial goals.  When you are comfortable with your plan your PRG acts as a support system helping you keep the financial promises you’ve made to yourself and helping stay on track.

In Marjie’s first PRG group, a person on my team said ”You’re an artist.  I don’t know why you’re doing this (non-art job). You should correct your financial difficulties with your art”.  That simple question started a shift in my thinking.  Some of the best advice I ever received was from a fellow DA member, he said, “When looking for work, I get up in the morning & I promise myself 3 things I’m going to do that day.  Once those 3 things are done then I’m done.  First decide what your ideal job looks like; how many hours, what your space looks like, include the money you want to make. This can be done even if you are not clear about the field or any other specifics.

“As I worked with this approach”, Marjie said, “I began to realize that if I ask the universe for what I want it brings it – I just need to stop asking for what I don’t want.”  This will be the topic of our next blog series.  Manifesting what you DO want in your life.

Until then, feel free to call (303-726-1051) or shoot me an email with any questions you may have.

Wishing you ever expanding financial well-being,

DA Topic 2 – How’d you do on the Quiz?

If you missed the first installment, take a few minutes to take the quiz

15 Questions – Are You a Compulsive Debtor?
http://www.debtorsanonymous.org/help/questions.htm


TYPES OF DEBT
Unsecured Debt
An unsecured debt is money that you have borrowed that does not have any specific collateral attached to it. Credit cards are one example of an unsecured debt. A signature loan is another example. The bank or lender can sue you if you fail to make payments and garnish your wages as recourse on the loan.

Secured Debt
A secured debt is a debt that has collateral that stands for the money. A mortgage, a home equity line or a car loan are all examples of secured debt.

GOOD DEBT vs BAD DEBT
Good Debt
Some of your debt might be considered an investment. You’re probably thinking, “How can anything as bad as debt be considered an investment!”  If you took on the debt to purchase something that will increase in value and can contribute to your overall financial health, then it’s very possible that debt is a good one.

For example, a home purchase can be considered to be a good debt. Since homes usually appreciate in value, the mortgage loan you take out to pay for the home is an investment.  Another example of a good debt is a student loan taken out to finance a college education. Earning a college degree usually means that you’ll make more money over your lifetime.

Bad Debt
Just like there is good debt, there are some bad debts too. When you use debt to finance things that can be consumed. This is the kind of debt that creates an unhealthy financial situation. Credit card debt is often considered bad debt because of the nature of items that credit cards are used to purchase. You should never accumulate debt to purchase everyday items like clothes or food. If you use a credit card for these types of purchases, you should pay the balance in full each month.

Debt used to finance a vacation is bad debt. Even though it might help you feel better and be more productive once you return, a vacation does not appreciate in value.  Don’t use credit to pay for a vacation and especially don’t use it to pay for a vacation you can’t afford.

To learn more: http://www.debtorsanonymous.org/help/steps.htm

Feel like debt is eating you alive?

Debtors Anonymous –
                              A Potential Path to Debt-Free Lifestyle?

Often times Marjie would walk after meetings with a fellow non-debtor and talk.  One such night he said,

 “These people are some of the brightest & most creative people I’ve ever met.  Far brighter & more creative than those who go to other 12-Step programs – then they come up with schemes like taking a minimum-wage job and believe this will solve their financial problems.  But there is a disconnect between the reality of their situations.  They are not lazy or indifferent… its part of their brain’s wiring.”

As Creatives, we are naturally very hard workers and optimistic at heart, sometimes in ways that do not best serve us.  Debt is a huge “ball and chain” hindering most of us.  Check out the national debt clock at www.usdebtclock.org/

In the spirit of INFORMATION IS POWER – I recently had the great pleasure of interviewing Marjie A.  A current Board member of Denver Art Students League, glass artist, sculptor, Custom Kitchen Designer and for six years, Chair of the National Board of Trustees of Debtors Anonymous.

What is DA?
The web site says, "Debtors Anonymous is a fellowship of men and women who share their experience, strength and hope with each other that they may solve their common problem and help others to recover from compulsive debting.”

Modeled after other 12-step programs  http://www.debtorsanonymous.org/help/steps.htm

John Henderson, the founder, grew up in Philly, moved to NYC, and ultimately became highly successful in the advertising biz, he’s largely recognized in the field for creating the term “lifestyle”.  He enjoyed all of the financial success that kind of career brings but he was having difficulty with money.  He was making good money but never seemed to have enough. So he set out to create what ultimately has become Debtors Anonymous.

Marjie believes (and I agree), “Our society is very schizoid about artists. On one hand, when you tell someone you’re an artist they’re excited but they immediately switch into an excuse, “Oh I can’t afford to buy…” or they go off about how their grandmother was a painter.  Or there are the organizations with missions “to assist Artists” and then expect the artists to donate their work for free to the raise money that they use to help the artists they serve.

Debt too often stands between the artist and our vision of prosperity.

So we’ve got a general public who claim to love art and artists but won’t/can’t/doesn’t buy art.  We’ve got organizations dedicated to support artists and then turn around and asks artists to donate their work to raise money.  And finally we’ve got artists and Creatives who believe in their own potential prosperity but don’t know how to make that vision of wealth a reality.

In this series we’ll be looking at Debtor’s Anonymous and some of the solutions DA offers.  We’ll explore potential remedies for compulsive spending, take a look at different types of debt and expose the crippling effects of a continuing attachment to the Starving Artist Archetype.

Want to know about your spending patterns?  Take this quiz!

15 Questions – Are You a Compulsive Debtor?
http://www.debtorsanonymous.org/help/questions.htm

Until next time - To learn more: http://www.debtorsanonymous.org/help/steps.htm

HOW TO PREPARE A WINNING TWO-MINUTE PITCH

Recently I had the opportunity to go to a “Pitch Party” hosted by Count Me In, as part of their “Make Mine a Million $ Business” program. http://makemineamillion.org/events.  I was so inspired I jumped up and (without any preparation) took a stab at my Two-Minute Pitch on Thriving Artist Alliance.  It was a powerful experience and I got some great feedback from the generous ladies in attendance.  Count Me In says “If you can’t tell it, you can’t sell it.”  And I agree! 

As Creatives we are sales people (like it or not).  So I want to encourage you to develop your own “pitch” – often called your “elevator speech”.   Here are the tips from the “Make Mine a Million $Business” event I attended:

Your elevator pitch is a quick, powerful exercise that will help you clarify where you want your business to go and the steps you’ll take to get there.  With a commanding pitch, you tell the story of your business in a w ay that is concise, magnetic & highly effective!

ITEMS TO INCLUDE IN YOUR PITCH:

·      Your name, business name, location(s), years in business

·      Business mission and product or service

·      Target market or customer

·      Number and type of employees (full time, part-time, consultants)

·      Current and projected revenues

·      Plans for scaling your business

TIPS FOR PREPARING YOUR PITCH:

·      Let the judges and audience see your personality

·      Remember, you are informing, entertaining, and marketing

·      Show you passion (don’t just say you are passionate)

·      If humor works for you and your business, use it

·      Use confident language such as “We are,” “We do,” and “I will”

Write it out.  Practice it. Get an accountability partner to practice with.  And then next time someone asks you what you do you are going to know just want to say.  

The 4 Stages Of Wealth Building As A Homeowner

One of the primary objectives of owning a home is to let the home appreciate over time and become a pillar of a family’s financial strength.

But before we can discuss “wealth”, we need to identify the stages to get there.

Stage 1

Having “Emergency Cash” is the first stage. It’s having $5-7,000 liquid for life’s inconveniences (the boiler breaking down, the car needing work, etc). When faced with the inevitable challenges that arise, many people are forced to run to their credit cards to make it through. They become stuck with high interest rate, non-tax deductible borrowing.

Stage 2

The second stage is the elimination of “Bad Debt”. We define “Bad Debt” as any debt whose interest is not tax deductible. Obviously, those high interest rate credit cards must be the first to go. But we also want to divest ourselves of the borrowing associated with car loans, boat loans, student loans, and personal loans because it typically can be done cheaper.

Stage 3

Shockingly, when you arrive at stage three, you will be considered in the Top 5% of Americans in terms of financial security. Stage three is accomplished when you have 3-6 months of your total expenses in reserves. The average homeowner (who is logically financially better off than the non-homeowner) has less than one month’s expenses in reserve! When life shows them more than a minor inconvenience (like a job loss, an illness/disability, or worse), most people are in a panic situation. With 3-6 month’s reserves, you will have time to weigh options and make better choices.

Stage 4

True financial security is attained when you become “Debt Free”. But not without debt. We consider our clients “Debt Free” when they have enough liquid assets to pay off whatever mortgage they have outstanding. Wealth building almost requires utilizing the tax benefits of having a mortgage in combination with strategies that utilize The 3 Miracles of Money…

The 3 Miracles of Money

1.       Compound Interest – The impact of money left to grow upon itself can be dramatic. If you had $1 on Monday and you could double it every day ($2 on Tuesday, $4 on Wednesday, etc.), by the end of 20 days, you would have $1,048,576.00!!! Now, you can’t double your cash every day, not even every year, but the concept holds true…..compounding interest is a good thing!

2.      Tax Free Growth – The ability to accumulate assets without giving Uncle Sam a third of it (in the form of Federal and State Income Taxes) is how the $1 became $1 million. If the growth was taxed at 33% ($1 on Monday gave you $1.67 on Tuesday – instead of $2- and so on), your $1 would only grow to $28,466.20 after 20 days!!! THAT IS NOT A TYPO! You would have “lost” over $1 million.

3.      Leverage and Arbitrage – If you can put up a minimum of cash and take title to a significant asset (like a down payment on a home….the smaller the down payment the better), you can leverage that cash investment to large returns. At the same time, if you can take the cash that you don’t bury in home equity and effectuate a spread between your “after tax cost of money” (mortgage payment) and your investment options (hopefully, in a tax free environment), you can gain the exponential growth that creates wealth.

Special thanks to Dave Cook for providing this information.  

Want to know more about home ownership?  Call me, Laura at 303-726-1051.

Earn While You Learn

Investing in real estate is one of the most powerful ways to earn money while you learn how to make more money.  When you consider the cost of higher education today and then factor in the chances of gainful employment once you’ve completed that $40,000+ education the amount needed to get into real estate investing begins to look pretty sweet.  Our current success story, Matt A. saw the opportunity and jumped on it.  His journey was not all roses.  I asked Matt what he came up against and what he learned from the bumps in his investing road.

"In addition to what you can get out of books like Your Castle Real Estate’s “Investor’s Guide” & Gary Keller’s “Millionaire RE Investor”, I’ve learned several things that don’t come in the books.  How to listen to my gut, who I need on my team and when to listen to them, the importance of controlling fix-up costs & remaining flexible, and the one that saved my butt - having multiple exit strategies.

“The first several months were about learning how to look at property – first on paper and then while walking through the houses.  Looking at property on paper can be deceiving.  The pictures often times make the homes look really nice.  But then we’d get to the house and realize it was a total shambles.  Pictures can lie.  You had told me I’d need to look at 100 homes on paper & then go see 10 to write one offer.  It’s tricky because there are so many variables.   But after seeing several dozen properties those variables became less intimidating & more familiar.

"The biggie is location.  But I found that even in the less desirable areas there can be pockets that are great.  With my first three deals we were in three different areas: North Aurora, Montebello & South Denver.  Each area had its own set of influencing factors.  Now I know that it’s important (at least in my case) to choose an area and learn all I can about it: avg. price point, quality of schools, acceptable level of fix-up.  And perhaps the most important – do the inspections before you close!”

Ah Yes, I remember.  Would you like to share that story?

“Sure.  We’d just closed on the 3^rd flip and one of those “too good to pass up” deals came to our attention.  It was back in the east Denver/north Aurora area that I really liked, a 2 bed/1 bath for $70K.  I knew the area was running low on properties under $100K and we’d had some down time between a couple of the earlier deals which I didn’t want to do again.  Having my money sit in the bank wasn’t getting me any closer to my goal.  If we wanted the house we needed to close in 48 hours to save the house from its foreclosure sale.  So I jumped on it.  The comps were showing resale in the $140K range.  That’s $70K in wiggle room – how could I loose, right?

“So we closed Tennyson on a Tuesday & bought Willow on Thursday.  Then we did the sewer scope.  (insert the sounds of fate here- “dun, dun, dun, dun” in a descending scale)  And of course it was trashed so I had to replace it to the tune of $5000.  Then we decided it really needed a garage - $11,000.  By the time we got it fixed & back on the market it was mere days before the tax credit expired and I had little room to reduce the price and still make some money on the deal. 

"We had the house on the market for 6 months with very few showings when you and other investors I know started talking about keeping the place as a rental, re-financing to pull out equity and picking up a couple of other rental properties.  This was the “remain flexible & multiple exit strategies” lessons in practice and it lead to my best buy to date."

We’ll save that story for the next Success Stories installment.  In the meantime, if you’d like a FREE copy of the Your Castle Real Estate “Investor Guide” give me a call – 303-726-1051 or shoot me an email at ludmilla303@msn.com

Finding the Right Real Estate Agent for Investing

Building Your Real Estate Investing Team

“Where no counsel is, the people fall; but in the multitude of counselors there is safety.”
                        -- Proverbs, 11:14

“The important thing to recognize is that it takes a team, and the team ought to get credit for the wins and the losses. Successes have many fathers, failures have none.”
                       -- Philip Caldwell

The most successful people always have a great team helping them.  You’ll need to find a Mortgage Broker, Real Estate Agent, Inspector, Appraiser, Insurance Broker, Contractor and CPA.  You may also need the support of an Attorney and a Property Manager.  Today my focus is on finding the right real estate agent.

To begin, the two most important members of your team will be your mortgage broker and your real estate agent.  Outstanding residential mortgage brokers and real estate agents rarely achieve even modest success with investors.  Insist on full-time professionals that specialize in working with investors so you can maximize your track record of success.

Interview and Check References when searching for a real estate agent

Bear in mind that the perfect agent with A+ answers on every question likely does not exist, and if they do, they will be so busy that they might not have time for more clients. Be willing to compromise. It’s rare that you can find the 100% perfect agent.  The search and thought process for investments should be highly numbers-driven - residential agents are mainly focused on the emotional appeal of a home and how well it fits their client's lifestyle.

Here are some sample questions:
  - Are you a Full Time Real Estate Agent or do you do other things? If so, what else do you do?
  - How many transactions did you complete in the last twelve months?
  - Tell me about the mix of clients – what types of clients did you work with and what sorts of deals did you do?
  - Do you work on a team? If you are sick or on vacation, who will be helping me?
  - What happens if I’m not satisfied? Can I get out of the contract? How long is the contract?
  - Describe the investment you are considering. What properties do you suggest I consider? What have you seen other investors like me do? What specific returns did they achieve?
  - How would we work together? What is your “Process”?
  - Could I get some references of two or three investors you have recently assisted?
Call them up and ask them …
     • How comfortable they were working with the agent?
     • How knowledgeable did seem?
     • How responsive they were in answering questions and returning phone calls?
     • What did not work for you in the relationship?

I encourage you to interview a few real estate agents before making a final decision to sign a buyer’s agency contract.  Make sure you have a clause to cancel if you are not satisfied.  Commit to working with one agent after your due diligence period so they will bring you the best deals.  Non-committal buyers only see left-over deals after preferred clients have picked over them.

If you are thinking about investing in real estate I recommend “The 2011 Guide To Colorado Real Estate Investing” by Lon Welsh. For your FREE copy give me a call (303-726-1051).

Musician investor turns $23K into $150K!

And $1330 in monthly passive income in just 3 short years.

I first met Matt 3 years ago in one of our favorite watering holes, Herb’s at 22nd & Larimer. At the time he was drumming in a band, and he & his wife were expecting their first child. He shared his goal of wanting to invest in real estate. Since then Matt has done 9 deals and now owns 4 homes with over $15O,000 in equity and monthly cash flow of $1330 over & above expenses. Over the next few days I’m going to be sharing Matt’s success story of how he went from that modest start to increasing his holdings by more than six fold and creating a revenue stream that allows him greater freedom with his music, more quality time with his family and an improved vision of what is possible for his financial future.

Matt begins his story by sharing, “There was a kind of ‘perfect storm’ of happenings that lit a fire under me to do something. I looked at the other guys in the band and realized that, though they were older than me & had been making a living with their music, not one of them had any financial security. With our first child on the way I knew if my story was going to be different I had to do something. Back in college I saw a late-night commercial with Carlton Sheets - you know the no money-down real estate investing stuff? So the real estate bug had been swimming around in my head since then. And when I met you & Thriving Artist Alliance. I knew it was time to take the leap toward creating a better financial future for my family.

“I had read Robert Kiyosaki’s “Rich Dad Poor Dad” so I knew the difference between being “broke” & being “poor”. Poor is a mindset that is difficult to change. Broke just means you don’t have any money. That you CAN change.

“My wife & I had managed to save $23,000 so that’s what we started with. The original plan was to do fix-n-flips to build up enough cash to buy a rental property outright and then repeat the cycle again & again fining & flipping, until we’d built a portfolio of 10 rental properties that would cash flow $300/mo each giving us $3000/mo in passive income.”

Having been with Matt every step of the way I can tell you his journey wasn’t perfectly smooth. He faced more than his fair share of challenges & unexpected obstacles. What has made Matt successful, as a real estate investor, is his steadfast commitment to his long-term goal and his willingness to learn from his mistakes.

Intrigued or want more information? Give me a call: 303-726-1051

Stay tuned for more of Matt's story in the coming days.

He said, "People like you have destroyed art."

He said, “People like you have destroyed art. Art is not a career, it’s a calling."

An absolutely fascinating gauntlet has been tossed!

Continuing on from, “Art is not a career, it’s a calling.” he said “Its not a game, the game is the illusion that makes everybody want to make money instead of connecting with their ‘true nature’ which has nothing to do with money. I say any ‘artist’ that wants to make money should go get a job & work for a living.”

Having been the proverbial fly-on-the-wall during this recent actual conversation, I want to know what you, dear Reader, think? Would Martha Graham have been a greater dancer had she performed in obscurity and poverty? Does the amount of money a scientist makes somehow degrade her discoveries? Andy Warhol, Andrew Wyeth, Picasso, Peter Max – is their work lessened because they experienced financial success during their lifetimes?

Why do I want to know what you think? Because I feel these comments define the very heart of why the Starving Artist archetype has such devastating power over us. I see no reason why making art and simultaneously making a decent or even a stellar living are at odds.

The idea that, “artists that want to make money should go get a job & work for a living” is also puzzling to me. Is making art somehow not a job? True, making art for a living is more entrepreneurial than working a “9-5”. Successful entrepreneurs, in any field, work harder & longer hours, they take on more risk and in return often times make better a living than their salaried counterparts. Why should this not also be true for artists?

The Starving Artist archetype has a powerful hold over Creatives and as long as we allow this kind of opinion to go unchallenged it will continue to thwart our financial success. So here’s your chance to speak out against such out dated and reactionary opinion. Let me hear from you.

Does making a living from making art automatically disqualify the maker from artist status? Does remaining poor while creating automatically make the creator a “legitimate” artist? Is being an artist, creating everyday, showing and selling your art not a job?

The Creative Compact

For all you pessimists out there who believe our country has lost its edge and its position as a global leader, Richard Florida, author of “Rise of the Creative Class”, has a proposal that outlines our nation’s path back to the role of respected world leader.

Florida is calling for a new Creative Compact – a Creative Economy analog to the great social compact of the 1930’s, 40s & 50s, which expanded and accelerated the Industrial Economy and led to the great golden age of prosperity.

During that time, the Industrial Society was spurred into existence by a new social compact known as the New Deal which brought capital and labor closer together, by encouraging the development of mass production unions, linking wage increases to productivity gains, by improving health and safety in the workplace, and by creating social security for older people and basic social welfare service for the truly needy.

Florida’s paper suggests that we need a new social pact, attuned to the demands of the Creative Economy. He offers 10 principles as the starting point for a much needed national and global conversation.

#1. Every Human Being is Creative
#2. Encourage Entrepreneurship across the Board
#3. Expand Innovation
#4. A Social Agenda for Creativity
#5. Restructure Education for Creativity
#6. The University as Creative Hub
#7. Make Every Community a Creative Community
#8. Leverage the Local
#9. Recommit to Openness and Diversity
#10. A Global Agenda

By devoting its energy to this kind of effort to spread the benefits of the creative economy across the globe, the United States can reclaim its status as a truly open and free society and lead the world and its people in becoming a more prosperous and less divided place. More importantly, it can reassert itself as a risk-taking society, one which encourages entrepreneurship and experimentation by caring for its people and providing for their basic security – physical, social, political, and economic.

If you’d like to read the full paper go to:
http://www.creativeclass.com/article_library/search.php?searchKeywords=creative+compact

THE MORALITY OF SHORT SALES

Is walking away from a million dollar + home, when you’re $250,000 upside-down immoral or simply a business deal that didn’t work?

This question was put to the group of professionals attending the Real Estate Trends class at last week’s Stewart Title Success Summit, and the ensuing discussion was spirited to say the least. I love to hear what you think!

Here’s the scenario:

A family buys a beautiful new home in 2006 for $1.5M. Remember, at that point in time it was still possible to get financing based on stated income and without putting any money down. But for our purposes here let’s say the homeowner does have some skin in the game - say they put 5% down or $75,000. They move in and live happily paying the monthly mortgage as promised. Now fast forward to today.

We are well into the recession, the mortgage market has gone through some violent and not-so-violent revolution, home prices have gone down, as have interest rates. The $1.5M home is now worth much less, maybe as much as $250,000 less and if the family were in a “have to sell” situation they would be putting their home on in a glutted market with 7 years of competing inventory. They are paying a mortgage based on the $1.5M price and looking at homes down the street or around the corner that are selling at today’s depreciated prices and in a lending market with amazingly low interest rates.

So, Mr. $1.5M homeowner looks at his asset sheet and says, “Wow, I’ve got a liability here. I’m paying on a $1.5M mortgage but the house is only worth $1.25M. I could get a better interest rate, protect my credit, and fix my asset sheet. All I have to do is give this house back to the bank, let them do the short sale, and I’ll go buy that beautiful place around the corner. Oh, and by the way Mr. Banker, would you give me a loan on my new place?

This scenario is actually happening and the number of times it happens is promising to grow in numbers for the next 2-5 years depending on how one looks at the statistics.

I’m guessing that many of us can see our way to why a short sale can be a welcome relief and justifiable to the homeowner who was put into an adjustable rate mortgage on a home in the under $200K range and are now dealing with an 8% or higher interest rate. Or we feel OK with it if the homeowner lost their job, or had a medical crisis that clobbered their savings, or lost their equity in an ugly divorce or, . . .

So, does a higher price point, more generous income stream, and the ability to buy a new home at a better price and interest rate make a difference?

The other side to consider is this. The purchase of a home and the agreement to repay a mortgage is, at its heart, a business deal. At its essence, the agreement looks like this - the home-buyer says: “Bank, if you lend me the money to buy this home, I agree to pay you (fill in the blank) amount for this period of time, at this rate. And if I don’t pay you, you have the right to take control of the property in the way you see fit.”

So again I ask, the question, “Is walking away from a million dollar + home, when you’re $250,000 upside-down immoral or simply a business deal that didn’t work?”

I stand with my Managing Broker, Charles Roberts, who initially posed the question in the session last week – I’m not particularly interested in passing judgment. I’m much more fascinated by the fact that this conversation is even taking place and what it means for our society in the future.

Its Official – Denver’s Real Estate Market has Hit Bottom!

This statement is accurate for homes priced in the under $350K range. How do we know this? The numbers tell us. Several factors play into the rally. Low interest rates, the First Time Home Buyer Tax Credit, pent up demand among Sellers, and a shift in the composition of distressed property sales to name a few.

REO volume, after strong gains for four years, is running at 2007 levels so far this year. REO volume, Jan-July, declined 31% between 2008 and 2009 and in June of 2008 hit an all time high of 1300 bank owned closings. As of Q1 2009 that number has plummeted to just above 600. Short Sales are on the rise from a low in January of 2008 of about 95 up to just under 400 in July 2009.

This recent run-up in foreclosures and short sales mirrors Denver’s last foreclosure boom. Last time (which peaked in 1988 at 3.8% of Denver homes in foreclosure), it took four years to fully recover from the foreclosure hangover. This time the peak came in 2008 at 3.5%.

And even though overall sales volume is still down, average detached-single-family property discounts have been trending up (2.7% discount) for regular homes, but have declined dramatically (-.5% discount) in recent months for foreclosure properties. REO homes under $185K are increasingly selling at a premium, not a discount, if they are under contract in less than 5 days (selling at premium of 8.5%). Intense competition and multiple bids are driving up prices. A strong sign that we are have hit the bottom and are on the rise.

What’s next for home prices? Our Guesses for 2009:
• Higher price points will have more REO activity
• Inexpensive homes under $200K will appreciate
• Mid-Priced homes $200-$350K have much less REO activity, sales volume has held steady in many areas and might continue in 2009
• Near-Luxury homes $350-$1MM with more than 12 months of inventory is a Strong Buyers market and prices will come under pressure for the few sellers that must sell
• Luxury homes ($1MM+) is a train wreck with over 60 months of inventory this will be the last segment to recover.

I Walk the Line

“Papa bought this house when I was four years old. I’m sure that crack was there when we moved in. I’ve never even thought about it before because its been that way since I can remember.” . . . Forty years of family life in a single place - home. Birthday gatherings, Christmas mornings, BBQ’s, high school proms, Sunday suppers, running through the garden, building forts, sobs of sadness, screams of laughter. Into this hallowed space enters a buyer.

“Does this crack indicate structural issues? Why are all the window sills a different type of marble? We can always just tear it out and open this up. This will need to be dealt with.” The potential new owners of the home, for this brief and unique moment, the time between first seeing their new home and the moment they move in to begin building a life there, see 2 worlds – the one that has been and the one that will be. “We instantly saw entertaining guests well into the evening in a setting by which all who enter will undoubtedly be enchanted . . . the sweet home and all the land on which it sits feels hidden away from all the rest of the world. . . magical . . . like a retreat . . . just waiting for us.”

As an agent, I walk a fine line; on one side: working to stay present to the world of the Seller – attached yet needing to move on – on the other side: the world of the Buyer – desirous to own a new home yet cautious lest they take on more than can be comfortably handled. Buying and selling a home is an enormous financial transaction, one that takes skill, knowledge and great attention to detail. It is also a powerful emotional transition.

As artists our personal space is tremendously important. For performers home provides sanctuary from the public nature of our lives. For painters it may be the inspiration that fills canvases. For a musician the structure may be the sound proofing necessary to record our latest opus. For the writer it may provide a room of one’s own to ponder our thoughts. For a filmmaker it may contain the dark corner to view our work.

Home means something different to each individual or couple with whom I work and there are always at least two sides to every story, two sides of the line. One is letting go; the other is taking hold, stepping into the future. I am grateful to be walking that line between past and future. Many thanks to those of you who have invited me into your process. And for those of you who are considering making a transition I would be honored to walk the line with you.

“I think the most significant work we ever do,
in the whole world, in our whole life,
is done within the four walls of our own home.”
Stephen R. Covey

Ponies are Driving the Market

OK so, Weds is my blog day and I always look forward to spending a few minutes writing. This morning began like any other Weds – I brought my computer into my art studio, got comfortable and began to put down some ideas to share. But it didn’t come so easy today and the results of my efforts were rather dry but informative so I figured what the heck, I can’t be brilliant every time.

But when I went to upload my entry I discovered my internet connection was kaput. Now that wouldn’t normally be any big deal but on top of the sewer back up, the hailstorm, the basement flood, my assistant quitting, 2 deals falling through it was the proverbial straw!

To my rescue came my wonderful biz partner, Lil, who encouraged me to shift my perspective by telling me a story that I want to share with you:

There was a psychiatrist doing a study on tolerance levels and how individuals respond to adversity. For his experiment he filled a large room 4 feet deep with horse manure and then invited various people to enter the room. Every single person who entered the room was filled with disgust - except one young boy. When the boy entered and immediately began diving and building, rolling around, making snowmen and building wacky structures. After an hour or so the boy finished playing and exited the room. The psychiatrist was fascinated by the boy’s reaction and wanting to understand why his reaction was so different asked the boy, “So talk to me. What were you thinking in there?” The boy’s response . . . “With that much horse shit I figured there had to be a pony in there somewhere!”

Thanks for the wisdom and the laugh Lil! And now on to the original blog entry.

Just the Facts! Real Estate Market Update

If you haven’t heard yet the Denver real estate market is shifting.

For the first time in years median home prices were a little higher in July 2009 at $229,900 than July 2008, at $229,200. The average home price Jan-July 2009 vs. the same period 2008 is down 6% compared to an 8% drop in the period Jan-May 2009. The price range from $200-$300K saw the most activity this July.

The drop in Denver single-family (DSF) unit volume, Jan-Jul 2009 vs. the same period in 2008 is down 18% compared to –21% Jan-May.

These numbers might not sound like anything to shout about but when we consider bank-owned properties under $185K we see the beginnings of a return to property selling at a premium.

For the DSF homes that sold in 5 days or less, the discount has been history since about Feb 2008. In July of this year these distressed properties sold at an 8.5% premium. Homes selling in 10-30 days the typical property started selling at a premium, not a discount, in August 2008 and that premium has grown to about a 3% average. Bank Owned or REO properties taking more than 30 days to sell continue to sell at a discount, but that discount is declining. Regular homes in the under %185K range are still selling at a modest discount of about 2% and this has been steady for a while.

When Disaster Strikes!

When disaster strikes – keep a cool head, ask lots of questions, bring in professionals, and use the ear of good friends. In the past 10 days my home has sustained damage from a record breaking hail storm, a sewer back up and a flash flood rain that left 3” of standing water in my basement and soaked the entire south end of my home in brackish water. Suffice it to say that the feelings I explored in last Weds’ blog came to roost in a big way.



As is true in most events like this, the power is not so much in what has already happened but in what one learns from the experience.

Keep a cool head! Take a deep breath and do your best to assess the situation for what it actually is. Take care to keep the emotional reactions and fears out of the decision process. Take time to learn what is really happening and learn what factors are actually feeding the process. And most important take time to make the money decisions.

Bring in professionals! After 2 days of investigation by men from the City of Lakewood’s Water & Sewer Department, A+ Handyman, and 3 different technicians from $99, Rooter (favorite support resources for my real estate business) we were able to piece together several contributing factors that had converged to leave me quite literally treading as fast as I could to keep my head above water.

Ask lots of questions! There truly are no stupid questions. And keep questioning until what you are hearing and seeing make full and complete sense to you. “Why” & “How” were particularly illuminating during this process. Why is the water coming up here? How is the water supposed to flow? Why do you think this is the answer? How do you know (fill in the blank)? Extensive questioning will:
1) gently guide the professionals to continue thinking until they get to the bottom of the issue,
2) add to your knowledge (granted you may never have wanted to know this stuff),
3) keep you and the professionals on the same side working together to fix the problem preventing the sometimes adversarial role that can arise,
4) empower you to stay engaged in solving the problem and distract your mind from spiraling into freak-out fear.

Use the ear of good friends! Saturday’s flood came on the eve of what was to be a party of 70 or so people celebrating their “Sexy”. My dear friends Nader, Pier, Dave, Laura & Rod, Leslie, Lil, Terry each pitched in to sweep out water, get the word out about canceling the party, listening when my head was not so cool, care for my clients while I dealt with contractors and offer words of comfort & encouragement. Thanks my dear ones. I am lucky to have you in my life.

It is my sincere hope that none of you face the calamities described here. If however, the gods decide differently, I or another talented real estate professional can be an invaluable resource for getting things back on track. So if you have need of a plumber, or are considering a renovation project, or are curious about how to suck a few hundred gallons of water out of your basement shoot me an email at la@thrivingartistalliance.com or give me a call 303-726-1051 – I can help.

A special thanks to Jim Forth at Bancroft Clover - Don’t get me wrong, I’m bummed I have to pay for the dig but your responsiveness was impressive.

Persist without exception

My life is so full of marvelous things that at times I am overwhelmed with gratitude and the joy it brings. But if I am to be honest with myself, I must also admit to experiencing days on which I am equally overwhelmed with stress, worry and even fear stemming from the 3 full-time jobs I am undertaking at the moment: mother to three growing boys, full-time real estate agent and the creation of a new and soon to be national enterprise - Thriving Artist Alliance. On those rare yet emotionally depleting days when I suffer these negative concerns I find comfort and strength in the words of Andy Andrews from his book "The Traveler's Gift: Seven Decisions to a Successful Life". The story follows protagonist, David Ponder, at what is perhaps the worst moment in his life. He encounters an angel who takes him back in time to visit with a variety of historical figures each of whom has important words of wisdom to share about a decision that was key in his/her life. David learns one important "decision" from each character that once made the decision will be the difference between misery or mastery.

The Buck Stops Here
I accept responsibility for my past. I control my thoughts. I control my emotions.
I am responsible for my success.
The buck stops here.

I Will Seek Wisdom
I will be a servant to others I will listen to the counsel of wise men.
I will choose my friends with care.
I will seek wisdom.

I Am a Person of Action
I am courageous. I am a leader. I seize this moment.
I choose Now.
I am a person of action.

I Have a Decided Heart
I will not wait. I am passionate about my vision for the future.
My course has been charted. My destiny is assured.
I have a decided heart.

Today I Will Choose to be Happy
I will greet each day with laughter. I will smile at every person I meet.
I am the possessor of a grateful spirit.
Today I will choose to be happy.

I Will Greet This Day with a Forgiving Spirit
I will forgive even those who do not ask for forgiveness. I will forgive those who criticize me unjustly. I will forgive myself.
I will greet this day with a forgiving spirit.

I Will Persist Without Exception
I will continue despite exhaustion. I will focus on results.
I am a person of great faith.
I will persist without exception.

I have written the Seven Decisions on my bathroom mirror in china marker so that I can read them every morning as I prepare for my day and every night as I prepare for sleep. Considering the difficulties we've faced recently with the dip in our economy, wars waging in several countries, unemployment on the rise . . . the list goes on and on, the ideas expressed in the 7 Decisions have helped me build a life of happiness, a business worth continuing to build and a future that thrills and excites me. I strongly recommend Andy's books. Perhaps there you too can find something of value. Check out Andy's web site: www.andyandrews.com