"I don't know" - Posted by Tony Colella

Real Estate Investing Retail
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Posted by Greg Meade on November 29, 2010 at 06:38:14:

do you remember when my crew was breaking down your first doublewide move I asked you to stake your lot so my toter driver could spot the home where you wanted it ? and instead of staking your 4 corners you put a single stake in the middle of your lot? LMAO. Robert was Spanish speaking you were in Tampa I was in Ocala but we gotter done!

Good stuff…on this site 6 months ago someone (Tony?) asked what would we do if we had 100K to invest today and I said I would give it to you to invest in creative financing. After all what is the name of this site???

That is still my position…I know you are on to something Cole I am also out there in the trenches look to profit from the macros going on. an invesor group here bought a mall in Orlando for 22% of outstanding mortgasge and has a Pennys and Macys anchor. There are many, many deals out there and some require small amounts of out of pocket. Cash is king right now as you know…we are about to see the largest trnsfer of wealth any of us have ever seen.

I want a few bucks to fall my way,

Greg

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“I don’t know” - Posted by Tony Colella

Posted by Tony Colella on November 24, 2010 at 10:51:22:

There is much speculation about the economy and the devaluation of the dollar these days. There are many different theories espoused about how to address different trends and future events.

Many times we reflect back upon past recessions and the great depression to see if we can garner some nugget of information that will lead us to safety now. Some among us are treading water, some are sinking, some are prospering and some are wondering what the heck to do.

Some seek to capitalize on cycles in different asset classes, others hold true to their long term investments. Each has arguments that are sound, just and appealing but can they all be right or all be wrong?

These are confusing times and because there is so much in transition in the macro economy there are fewer easy or obvious answers for me at least. I find that I go to bed most nights signing off with the words ?I don?t know? ringing in my head.

I have learned that ideas I would never have considered before are being acted upon by people I greatly respect. They have made a mindshift that is foreign to me when first discussed but as time and conversation progress the ideas don?t seem as odd after all. I am not certain I agree or will act upon them for my family but I can see the reasoning behind their decisions.

Sometimes I wonder if I am not acting the part of the lemming and they the leader. Other times I wonder if I should do anything and simply ?be still.? I must admit, I have never found it easy to ?be still? (as my mother will no doubt attest to).

Even within my own niche I find a mindshift necessary to be certain I am not missing opportunity or holding fast to outdated methods. Without open discussions with you here and with people I know and respect I do not believe I can expose myself enough to finally go to sleep at night and say ?Yes, I finally know!?

I leave this post with only the question of ?what mindshift are you facing now?? Let?s open up the discussions so we can all learn.

Tony Colella

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Re: “I don’t know” - Posted by Bernd Hanak

Posted by Bernd Hanak on November 26, 2010 at 13:12:24:

Tony, your writings are always intriguing and complicated enough to make a simple response seem inadequate. On the other hand, if one has devised a satisfactory philosophy for oneself, it is nearly impossible to prescribe a general approach for somebody else without relying on concepts and on the common, immutable laws of nature. Dr. B?s analytical mind numerically summarizes practical concepts that can aid all of us to stay on keel. (Steve, thanks for your number six. My impatience needs constant hobbling.)
Some ideas I believe I do know:
At any time, a human being faces two powerful adversaries that limit his pursuit of happiness: his monarch and himself. Naturally, awareness and vigilance are the operative words.
The experience of life- long general prosperity-- that is, the absence of calamity that might threaten one?s life and property-- can mesmerize a large population into a false sense of security. Should adversity rear its ugly head, those same people will point their finger at a foreign culprit and besiege the monarch to do ?something?. The monarch will oblige, curtailing the individual?s liberties while promising more imaginary security. Hope-ium will be the preferred drug of the citizen. It is his vote that endorses a degenerating system.
When a system ? biological, mechanical, financial- economical, or social-- experiences a breakdown of a fundamentally integral component, it ceases to function as designed. Unless the reinstallation of original, quality components is possible, the system has to be completely redesigned or land in a cemetery. Our socio-economic system is malfunctioning. The problem is systemic.
To compare previous recessions or the Great Depression with the present or with anticipated events may be fallacious. The present socio-economic condition is the product of a long- term incremental accumulation of legislated depletion and degradation of this country?s founding principles and of classical capitalism. The progression of our present system will cause its own demise without any foreign assistance.
If the collapse of the present system is practically a ?fait accompli,? then a renaissance is also a given. The actual timing of events cannot be known, except by the witch doctors and self- proclaimed clairvoyants.
As we are slowly emerging from the eye of the storm and steadily approaching the most destructive side of the proverbial hurricane, we have to focus on ourselves, on the preservation of our wealth. Others? preparations and solutions are designed for their circumstances and perceptions, which we must recognize as different from our situation, and which might not be germane for us. We must be ?positively selfish.?
The common concern about the coming inflation or deflation is actually a moot point. During the entire known history of mankind, the monarchs, their advisors, and their enforcers have never chosen a deflationary exit because it would portend public revolution and the end of the ruling elite?s jobs. They may believe that they are royalty, but they are also individuals with selfish goals, governed by self-preservation. Inflation and devaluation of currency have historically been the choice of monarchs and emperors? for the good of the nation and the people.? Tangible assets, precious metals, income producing investments have stood the test of time.
This is what I do know. This is what I have and will act upon.

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Re: “I don’t know” - Posted by Tarheel T

Posted by Tarheel T on November 26, 2010 at 07:58:28:

Tony,

I don’t know either.

You are right there are alot of theories out there about what will happen next. One guy saying to do this and someone equally qualified saying the opposite. It makes one think they might be missing out if they don’t grasp to one theory or another.

And it is really weird that there are so many forces contradicting each other. We are currently supposedly closer to being in a deflationary economy than the opposite. However, how do we account for the rise in commodities and the falling $ ? That should be inflationary in the future. As well, how is the massive $ printing needed for the government’s new QE program going to impact the economy in the years ahead?

Technically we are out of the recession, and depression is not in the cards. Will we have a double dip? I doubt it with all of the govrnment’s stimulus.

With all this uncertainty, I am just focusing on what I CAN control, looking at this as a 5 year period to slowly let bargains come to me and trying to make your referenced landlord friendly repairs. I don’t see any need to abandon what we have been doing, and what your land home book is about(except that financing is harder now).

I will recommend another book, Maggie Maher’s “Bull”.
It discusses the economic forces which are making commodities surge without producing inflation.

Tracy

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WOW! I didn’t know you had… - Posted by Greg Meade

Posted by Greg Meade on November 24, 2010 at 18:51:33:

a lot of MY same thoughts Tony. LOL I tell you I heard from Cole Haynesin the Spring and he was going great guns in tampa flipping REO’s (foreclosures)and a typical closing check was $8,500. Hewas quickly deluged with posters that said there was DOS clauses, No assumption loans. etc. He went on to tell a poster to google and ask how it can be done versus what keeps me from flipping foreclosed Cole is early twentys and very cool. I set his first D/W on land he bought on a credit card…he made 40K or so on the deal. WOW!

Doimg LD’s is a great idea now and while people are at it ask if the MHP is for sale…a truly good deal WILL be funded.

I am rambling Tony and I feel your pain…we are asked for advice and I cringe to give any right now…my business plan is broken and I refuse to advise until it is fixed. Banks in FL ARE allowing assumptions (modifications)and waiving DOS clauses.
Nothing is off the table…a frieng that was 644 days behind on mortgage got a 1% 20 year loan and moved BACK IN his home.It is crazy now in FL I am bidding on malls (L/O). All they can say is no…over 500 malls nationwide are at least 4 months behind in payments I’ve googled and it is so.

Happy Thanksgiving Tony we have a lot to be grateful 4 today, eh?

Greg Meade

I

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Re: “I don’t know” - Posted by Tony Colella

Posted by Tony Colella on November 27, 2010 at 09:45:08:

Bernd,

A most imformative post, thank you. I would like to focus on your concluding sentences.

“Tangible assets, precious metals, income producing investments have stood the test of time. This is what I do know. This is what I have and will act upon.”

In particular I would like to focus on the tangible assets you mention.

I am assuming your “income producing investments” include the land/home properties you have mentioned. I suppose these might also be included in “tangible assets” but as they were mentioned separately I have to suspect that you have more assets in mind.

I also wanted to mention that investors who are of like mind with what you wrote are also hesitant to invest in income producing realty to some degree for fear of the devaluation of property to come.

My speculation on this topic would lead me to believe that if the property cash flows well, using our “checkbook analysis” which nearly always forces us to buy at a discount, will protect us to some degree. Yes real estate may decrease in value and rents may decrease but if they are still producing and are not sold out of necesssity during that second drop then are they not still of value?

Income will have to come from somewhere as no man is a complete financial island. No matter how self sufficient we seek to become we will always need some income or asset to exchange for goods and services.

Buying low and selling high in the precious metals arena may provide capital (lump sum leg of the stool) and the holding of such assets may provide a growth in net worth (a second leg of the stool) or perhaps “protect” is a more appropriate term.

What additional “tangible assets” and income can we recommend?

I would classify tools and the knowledge of how to use them along with ever increasing self-sufficiency to be the greatest assets but I am no doubt overlooking what you may be including so please correct and add as you see fit!

Thanks,

Tony

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A MUST READ!!! - Posted by Scott St.Aubin

Posted by Scott St.Aubin on November 27, 2010 at 24:16:19:

Folks, I have basically taken myself “off grid” and don’t check the site much anymore. But kudos to Tony for keeping interest and conversation up on the site, he has single handedly held the load in my opinion.

Bernd, That is by far the best most succinct post on what is happening to this country I have read ever! Reading Bernd’s posts are like verbal orgasms at times, but once digested the meaning is incredible. I NEVER fail to read one of his posts, his knowledge and history alone are priceless(sorry bernd not calling you old),but He has inspired alot of my current philosophies. In some ways I believe my current mindset has surpassed his in pessimism for our future trends as a nation(if that is good or bad remains to be seen), Yet I look to his wisdom and knowledge with an open mind. Mainly I just wanted to give credit where credit is due. Thank you Bernd! and Tony.
ScottS(NC)

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Re: WOW! I didn’t know you had… - Posted by Cole Haynes

Posted by Cole Haynes on November 29, 2010 at 01:40:34:

Hey Greg and everyone!

Just happened to jump on the board today and saw this post. I actually just got back from my honeymoon today and I got married on the 20th. It
has been an exciting fews weeks for me!!

As far as business goes it has been a humbling few years…

I am in the same boat with everyone else on the mobile home front. I absolutely love mobile homes on land and on rented lots, but making money
off of them is getting harder and harder in my area.

I have been spending all of my time learning about the in’s and out’s of creative financing for the last 18 months and this is an exciting
niche for me. By creative financing I am referring to lease/options, sub2, and contract for deed type stuff.

I am absolutely blown away by the current market. Like Greg said, I am a young guy, 24. When I first started buying homes a few years ago I
had a conversation with Greg about securing loans and the importance of private/hard money. He stressed paying hard/private money lenders on
time.

I have LIVED by that conversation we had and for the last 3 years I have been the dream payment for my hard money guys each month while
everyone else in our market walked away. I have been paying hard money lenders on 4 L/H deals that are breaking even, at BEST! The entire time
I was confident I could refinance after several months of on-time payments. I was wrong…

I have found it impossible to refinance any of the homes over the last 12 months! These homes are all interest only at 14% interest. Even
though I still have equity in them today and have 24+ months of on time payments, I get laughed at when I look to refinance.

At the same time my (NEW!)wife and just purchased a small 3/2 home with no problem at 4.5% over 30 years fixed, and my wife just started her
new teaching career 2 weeks prior to closing!

What I have learned is pretty simple and has been said many many times here:

*Money was easy to make 3 or 4+ years ago.
*Today, I am working 16 hour days, 6 days a week to learn my market and build my company. Making less than I did in years prior.
*I too have stopped giving advice.
*There is opportunity everywhere. We have to keep adapting to this market.

“I don’t know” is something I am saying everyday too.

Nice to see people are still active on this board! Tony and Scott’s book was actually the first RE book I purchased after DOW and a month
after reading those 2 books I dropped out of college and purchased my first lot for a land home deal. I have been having a blast ever since!

I am very grateful for this board and everyone who gives their time and knowledge here!!

Hope you all had a great Thanksgiving!

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Think and Rethink, Learn and Relearn - Posted by Auctioneer

Posted by Auctioneer on November 25, 2010 at 09:27:08:

I think Tony summed up many things and very well said I might add. One of the reasons I’ve only recently revisited this forum is because I need new ideas. Many times I find that new ideas are really not new but were ideas not acted upon before for reasons as simple as I didn’t have the time when business was booming or as complicated as the crazy idea is not so crazy now.

I am very fortunate to have diversified my holdings and my businesses. I am surprised how little or never anyone speaks of the last major reccession of the late 80’s early 90’s. What did we learn? It was largely driven by the S&L crisis which is vey much the same type of wall street coruption driving this one. And it will happen again as history tells us it is part of the necessary economic cycle.

The best answer is Learn, Learn, Learn all you can from this experience and from others in different markets and niches. Think and Rethink about how to remain relevant in these times.

This is easy for me to say and I feel for those that are not so fortunate, but above all remain positive, learn from the pain of losing a property, job or whatever and decide how you will do things differently.

I had a thriving construction business which is now all but mothballed. I hear other builders say things like “it will never be the same”. My answer is “no it won’t be the same but it will be different and maybe even better depending on the decisions we make for ourselves now”.

Personally, I am betting on inflation and affordable housing to be in short supply as we come out of this recession. What are you betting on? What decisions can you make now to benefit from what the future holds?

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Re: “I don’t know” - Posted by Bernd Hanak

Posted by Bernd Hanak on November 28, 2010 at 21:34:24:

Tony, it is somewhat novel and certainly interesting to read your post that formulates the question and also supplies a reasonable answer. It is like a complete thought pattern in print. When I think of tangible assets besides the ones already mentioned, I am inclined to think of a farmer who anticipates a problematic future and believes that he cannot rely on bank credit. He knows that his farm is a living organism with never- ending work and requirements to survive, regardless of the situation of urban society. He needs seeds and fertilizer for his fields. Feed and medicine for his animals. Building materials to maintain the farm?s infrastructure, vehicles, machinery, spare parts for their maintenance. He needs energy, fuels for the operation of the equipment. A good farmer plans for several years in the future. I like to think that he would try to store as much as possible of the supplies that he requires for the next few years. He knows that we are on a downward slope of easy fossil fuel extraction. Price escalations of materials that require oil for their production are prevalent. He also believes that if he can outlast the pending catastrophe, in the aftermath his produce will be in high demand with the commensurate high profits. Affordable housing is also a primary. Anybody who has spent a night exposed to the elements during inclement weather will attest to that. I am betting on my homes and slowly store bargained priced supplies for good, general maintenance.
Precious metals are money in a savings account, preserving the money?s purchasing power. They are not to be sold until we identify a common mania in their acquisition. Then and only then will they offer the cash, regardless of the fiat currency, to pay off any debt for nominally pennies on the dollar, and/ or provide us with the ability to cherry pick bargains as we increase our net worth.
We have to acknowledge that we expect a worldwide, systemic financial, economic collapse, not nuclear annihilation or even an additional war, although that has been an option of the governments in the past, to divert the attention of the populace. Our buildings, infrastructure, our homes are not going to disappear. The demand for attractive, affordable housing can only increase. Our knowledge, our experience will remain intact. All we are trying to accomplish is to bridge the pending crises and come out on the other side smelling like a rose

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Re: A MUST READ!!! - Posted by Bernd Hanak

Posted by Bernd Hanak on November 28, 2010 at 09:51:23:

We enthusiastically all agree that Tony deserves all the kudos for keeping this site alive singlehandedly. Fortunately, his friends, Dr.B., and Shawn actively support his extraordinary efforts. Tony reminds me of the key employee of a company whose absence would determine the fate of the organization. Such a person does not need a job but needs to invest his yeoman efforts in his own enterprise.
Also, I sincerely thank you for the undeserved compliment. I know that I never had an original thought; everything I think I know, I learned from others. From you I learned that, among other things, a nice single-wide, compared to a double, both on land, has people preferring the latter every time. I am building a small, successful business on that concept; the business, I am convinced, will weather any crisis, and even better, it does not seem to have any competition. For that I am indebted you. Also, one of these days, let?s speculate about the renaissance of this country.

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Re: WOW! I didn’t know you had… - Posted by Tony Colella

Posted by Tony Colella on December 01, 2010 at 07:00:16:

Cole,

Congrats on your marriage!

It is also good to see you are still busy creating and adapting your business.

Tony