Comments by Patch of The Builder's Blocks
There are all sorts of seminars on “real estate” investing educating people to look at things from the investment perspective and they are great for building wealth and that is part of getting in a position to be able to build or remodel in the future. But what about today - the opportunities that exist in the marketplace today for people to actually make their dreams reality whether building a new home or remodeling their existing one. These are the times that people should be shoring up their homes, looking for the right deals to maybe get into that right home because interest rates are at historic lows and historically we know the market is going to turn around. So why wait until it does?
Smart investors learn to manage the cycles by buying low and selling high. The same is true in real estate as it is in the stock market. You capitalize on conditions when the market is low. And that is where we are right now. And again, if you look at history it tells us it is going to cycle the same way. That is what we have - an economy of cycles and the smart investors work those cycles to their advantage. So why not do the same when it comes to investing into our own home?
Consider this: Let's say you are in a home that today is worth $200,000 and that is down by 40% compared to 2 years ago. Let's say you still have $50,000 in equity. If you were to sell that home and to take that $50,000 (plus $10,000 for your 20% - example only) and invest that into a home that today is worth $300,000, you might find that based on today's interest rates your payment may not be much more than it is today. And then if the economy does as it historically always has and bounces back up to conditions of two years ago, theoretically you could pick up another $166,667 in equity (40% recovered on $200,000 versus 40% recovered on $300,000) and more than make up for your loss between 2008 and 2010. That is the way investors think. It is a matter of mind-set. Your loss today is on paper, so work with it so that when things turn around you are in an even better position.
I am not a financial person and I am not in real estate and there may very well be some other costs in here, in fact that almost goes without saying but the point still stands - the percentages just may be slightly different but you get the point. We are talking about paper losses and we are talking about relative gains. Common sense tells me that overall this makes good sense. So talk to a professional and at least explore the possibilities because you may just find that an opportunity exists to take your standard of living up another notch.
Tuesday, October 26, 2010
Wednesday, October 20, 2010
Knowing Your Market
by Jeff Gustafson, iMpro, LLC
What is the market you are targeting? How does that market think? What are they looking for? What do they want from a contractor? To do things the same today as yesterday and to expect to still get results may not be effective. In difficult markets like this you have to think beyond what you have done in the past. The market is stagnant to say the least. Many people are waiting to see what happens before committing to anything and confidence is running very low. Does this mean we just bury our heads and wait till things turn around? I guess if you have compiled a tidy nest egg and don't have a lot of obligations you can do that. But I don't know many people that necessarily live within their means. Most people adjust upward with their success. So to maintain your standard of living you have to either find a way to turn things around or you find something else to do.
Let's talk about your market. Do you know who buys your product and why? Is there something that you do that is unique that attracts certain people to your product as opposed to someone else? Don't answer that with what you think but answer that with what you know. Talk to your clients and get honest feedback. The idea is to then see if there are some patterns to what they say. If they exist, look at who selected you and look at their age, their income, their lifestyle, their professions...anything you can glean that will give you a clue as to what sort of person seems to like what you do. That is a great start. If you know the sort of people that seem to prefer your work, your product, then you can work toward marketing to other people that fall within that same demographic/psycho-graphic. This sort of approach helps you to define what your market is and how best to approach it.
Don't get fooled by thinking that the world is your market. That doesn't work in anything. We have all heard the phrase "a jack of all trades - a master of none" and that is where you fall when you think the world is your market. It is best to find that niche where you best fit - where there is plenty of opportunity and then put your efforts into that niche so that you claim that piece of turf - You become that "master" within the niche.
What is the market you are targeting? How does that market think? What are they looking for? What do they want from a contractor? To do things the same today as yesterday and to expect to still get results may not be effective. In difficult markets like this you have to think beyond what you have done in the past. The market is stagnant to say the least. Many people are waiting to see what happens before committing to anything and confidence is running very low. Does this mean we just bury our heads and wait till things turn around? I guess if you have compiled a tidy nest egg and don't have a lot of obligations you can do that. But I don't know many people that necessarily live within their means. Most people adjust upward with their success. So to maintain your standard of living you have to either find a way to turn things around or you find something else to do.
Let's talk about your market. Do you know who buys your product and why? Is there something that you do that is unique that attracts certain people to your product as opposed to someone else? Don't answer that with what you think but answer that with what you know. Talk to your clients and get honest feedback. The idea is to then see if there are some patterns to what they say. If they exist, look at who selected you and look at their age, their income, their lifestyle, their professions...anything you can glean that will give you a clue as to what sort of person seems to like what you do. That is a great start. If you know the sort of people that seem to prefer your work, your product, then you can work toward marketing to other people that fall within that same demographic/psycho-graphic. This sort of approach helps you to define what your market is and how best to approach it.
Don't get fooled by thinking that the world is your market. That doesn't work in anything. We have all heard the phrase "a jack of all trades - a master of none" and that is where you fall when you think the world is your market. It is best to find that niche where you best fit - where there is plenty of opportunity and then put your efforts into that niche so that you claim that piece of turf - You become that "master" within the niche.
Monday, October 18, 2010
The Pony in the Poop
There is no doubt that today's economic conditions has caused many of us to think differently about how we go about business. Doing the same old things of the past just will not get it done. It is like looking at a new pay plan each year: you know the company budgets "X%" for sales so the challenge is to see how it is distributed and then develop a game plan to work within it to get the most of it.
Yes, economic conditions today present even more of a challenge because it has not only caused us to think differently but in many cases what we have done in the past has to be completely thrown out the door. We truthfully have to sort of reinvent ourselves and/or our business.
But interestingly, that isn't all bad. It keeps us on our toes, keeps things fresh and forces us to pay a bit more attention to the business itself rather than just going through the motions each day. And, it should wise us up a bit to make sure that we are not only constantly planning but that we are also putting a few dollars away for next time.
Is the market going to turn around? Absolutely! This is America and we always do. Now it doesn't just happen. We have do our part but that is what we do. We make the adjustments, we find new solutions, we get a bit creative...we find "the pony in the poop. "
My only concern today is not what is happening in our industry, it is what is happening outside of it. If congress continues to spend like it has been then we have bigger issues to be concerned about. People still need homes. People still have hopes and dreams. And, the people of this country are not going to let things get too out of control. Fortunately for all of us there are new elections to change things every 2 years and that is the safeguard we have to keep the people in control. I know we all wonder at times if that truly is the case but it is. Most Americans don't want to give up the freedoms and opportunities that we all share. We are still the beacon of hope to much of the world.
Let's talk about the opportunities. Today's market reminds me of a time just about 1969 when the price of gasoline was somewhere around $.30 a gallon and you could get 3 pounds of ground beef for a dollar. I had just graduated from college and took off for Europe for 6 months to see the world. My wife and I lived on less than $2.50 a day for both of us for transportation, food and lodging. Now it was a different world where you could stay in Youth Hostels for a buck and get a continental breakfast and a hot meal at night and then pick up the pack-sack and catch the next ride. But I still imagine things are somewhat similar although the price of gasoline and ground beef have gone up. But if at that time, we had thought to invest, to take that gamble, to buy that home...we would have most likely made a fortune in the coming 10 to 20 years. Many people did and I see today as another one of those "times of opportunity".
Great home deals are available; interest rates are at 50 year lows; builders are giving excellent incentives...the time is ripe to take advantage of what is available.
Now builders know this. But what is missing is "buyers knowing this". And not just a few buyers but more buyers since it takes larger numbers to finally get to those that will do something. So how do you do that? Hang on to your seat...that is what we are about to explore.
For information on the Builder's Blocks, check it out here.
Yes, economic conditions today present even more of a challenge because it has not only caused us to think differently but in many cases what we have done in the past has to be completely thrown out the door. We truthfully have to sort of reinvent ourselves and/or our business.
But interestingly, that isn't all bad. It keeps us on our toes, keeps things fresh and forces us to pay a bit more attention to the business itself rather than just going through the motions each day. And, it should wise us up a bit to make sure that we are not only constantly planning but that we are also putting a few dollars away for next time.
Is the market going to turn around? Absolutely! This is America and we always do. Now it doesn't just happen. We have do our part but that is what we do. We make the adjustments, we find new solutions, we get a bit creative...we find "the pony in the poop. "
My only concern today is not what is happening in our industry, it is what is happening outside of it. If congress continues to spend like it has been then we have bigger issues to be concerned about. People still need homes. People still have hopes and dreams. And, the people of this country are not going to let things get too out of control. Fortunately for all of us there are new elections to change things every 2 years and that is the safeguard we have to keep the people in control. I know we all wonder at times if that truly is the case but it is. Most Americans don't want to give up the freedoms and opportunities that we all share. We are still the beacon of hope to much of the world.
Let's talk about the opportunities. Today's market reminds me of a time just about 1969 when the price of gasoline was somewhere around $.30 a gallon and you could get 3 pounds of ground beef for a dollar. I had just graduated from college and took off for Europe for 6 months to see the world. My wife and I lived on less than $2.50 a day for both of us for transportation, food and lodging. Now it was a different world where you could stay in Youth Hostels for a buck and get a continental breakfast and a hot meal at night and then pick up the pack-sack and catch the next ride. But I still imagine things are somewhat similar although the price of gasoline and ground beef have gone up. But if at that time, we had thought to invest, to take that gamble, to buy that home...we would have most likely made a fortune in the coming 10 to 20 years. Many people did and I see today as another one of those "times of opportunity".
Great home deals are available; interest rates are at 50 year lows; builders are giving excellent incentives...the time is ripe to take advantage of what is available.
Now builders know this. But what is missing is "buyers knowing this". And not just a few buyers but more buyers since it takes larger numbers to finally get to those that will do something. So how do you do that? Hang on to your seat...that is what we are about to explore.
For information on the Builder's Blocks, check it out here.
Subscribe to:
Posts (Atom)