Herman School of Business
Ignorance is NOT Bliss...
Talking heads are explaining to us why we should be happy that we are working to keep people in their houses with a bail out knowing that the formulas being used will result in 47 percent of those we save failing on the second round. HUH?
In other words people who should never have been given illegal, crookedly prepared loans will be saved with a newly minted loan based on the premise that it will save them…and yet projections show that even on the newly minted false loans…half will still default!
This is your Government at work. Please vote out every elected official supporting this idiotic stuff.
I am not ranting so that you will see the doomsday ahead. I am telling you the truth about how we are now conducting business. You can not put your head in the sand and ignore reality anymore. The readers of this blog are smarter than that. If we know the conditions under which we conduct our business, we can make better decisions and thrive despite the behavior of others.
Some people eat fast food every day and suffer incredible health effects…but we don’t all do that. Some people drink and drive killing others and sometimes themselves, but we don’t all do that. There are people who still smoke and that costs us all a fortune in health care costs even though we don’t smoke. Bad business practices affect us all even when we practice good behavior.
Knowledge is what gives you an edge. To run a small business, to start a small business, or to be an investor in small business is the way to stay ahead of the bad behavior specialists. Get yourself some knowledge because opportunities will soon get even better in real estate as reality sets in that with a ten percent vacant housing rate…bargains will be plentiful as soon as bankers realize to own a vacant house is a disaster and they will eventually be “giving them away” once the government tells them it is OK to confess the truth about their loan portfolios. Bargains are coming.
If you have bad credit fix it now so you can play in the coming boom of buying houses for less than the cost of the materials to build them. I have seen listings of 3 bedroom houses with 1.5 baths in Florida within a few miles of the beach…for fifty thousand dollars! Hold off…soon you can get that one for forty thousand dollars. Right now there are more empty properties than people who live there, meaning you can’t even rent them out yet. And owning an empty house is not the answer because kids are breaking in and partying, destroying your empty house. Wait until people actually want to start living in that area and buy as many houses as you can and become a landlord.
But that will only work when rents cover your mortgage. Buy a fifty thousand dollar house and rent it out for four hundred dollars per month. That is almost a ten percent gain annually, with a full payback of your investment in eleven years. Any appreciation in value once we re-stabilize housing is a bonus. When the house doubles in five years to a value of one hundred thousand you will have made one hundred percent on your investment and be getting higher rents by then, further increasing your return.
By the Fall of 2009 you should become a real estate player. Get ready for that now.
- Posted: 19 February 2009
- Comments: 0
- Category: Running a business
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