Playboy Model takes on a new Career in Real Estate

According to the Bloomberg article, a new career in real estate seems to be the choice of almost everyone who has experienced the continued appreciation levels of owning real estate.

Jamie Westenhiser, Playboy Enterprises Inc.'s Playmate of the Month for May, says her disrobing days are over. With house prices in her home of Fort Lauderdale, Florida, up 105 percent in the past five years, the 23-year-old model told the magazine she's embarking instead on a career in real estate.

Are you in a Risky Housing Market?

Could the price of your home fall in value and if so how much could you expect to lose? It may depend greatly on where you live and what your local market is like. Here are the 13 most risky real estate markets to be in right now.

Boston, New York City, Fort Lauderdale, Washington D.C., Detroit, Los Angeles, San Francisco, Sacramento, Providence, Minneapolis-St. Paul, Denver, Miami, and Tampa-St. Petersburg.

Here is the full article text on the 13 riskiest housing markets.

San Diego Median Home Price hit $593,000

It's hard to believe but if you want to live in San Diego, California, you can expect to pay well over half a million dollars to get an average home. This is just your run-of-the-mill type of house and it's going for a median price of $593,000 as of April 2005.

The median price of an existing home in San Diego County was $593,600 in April, slightly higher than the previous month and up 12.6 percent from a year ago, a real estate group reported today. The median home price in the region was $588,800 in March and $527,320 in April of last year, according to the California Association of Realtors. Home sales in San Diego were up 10.9 percent from March, but down 3.4 percent from April 2004, CAR reported.

Do you have what it takes to be a Real Estate Investor?

If you think you have what it takes to get started in real estate investing, you can start by think about these 6 general steps:

1. Are you really sure you want to do this?
A real-estate-investment program will consume large amounts of your time, subject you to considerable financial risk, force you to engage in the generally unpleasant task of dealing with tenants and maybe employees (some approaches to real estate investing do not involve tenants or employees), and saddle you with significant responsibilities. There are other ways to make a buck, you know. Is being a real estate investor just an abstract concept to you? Or do you really know what it's like to be a landlord (if you plan to own rental property)? If you do not know what it's really like, you'd better find out before you start down this road.

If you plan to invest in rental property, I suggest that you start by getting a job as a resident manager of an apartment building or as a property manager. That will give you a taste of the property-management aspects of owning rental property. There are also the deal-doing aspects of real estate. For that, you might get a job as a real estate agent. I did that for two years to learn about the business when I was 26. But since real estate agents are only paid on commission, you may want to take a salaried job in the business instead---for example: real-estate-brokerage secretary, real-estate attorney, title-company employee, or mortgage-company employee.

Guru Jane Garvey said I should add to this section that you must be sure both members of a married couple want to do this. She has been a real estate club leader in the Chicago area for 14 years and has seen many marital problems with couples where one spouse never bought into the plan to invest in real estate. In many couples, the husband takes the fun stuff---rehab and finding properties---and sticks his wife with the property management, leading to a revolt by the wife.

2. Are you suited to being a landlord?
Many people, maybe most, are fundamentally unsuited to deal with tenants and employees. To be a landlord, you must be able to stand nose-to-nose with a fellow adult---tenant or employee---and tell them "No," they cannot have what they are demanding. For landlords who cannot do that, rental properties are a disaster.

Signing your name on the dotted line for a deal involving hundreds of thousands of dollars, or more, is scary. Some people cannot handle it. When I was an agent, I saw a number of would-be home buyers and would-be home sellers get hysterical from their fears when they were trying to do a deal. If you are one of them, f'get about it.

3. If you still want to do this, set specific goals.
If after following the advice I described above you still want to invest in real estate, you need a specific goal. It should be written down and have three components:

* Specific net worth amount
* Loan-to-value ratio
* Specific date for reaching those goals

The typical real estate investor net-worth goal is a million dollars or some multiple thereof. I do not like that. It's probably too much. A million dollars is a nice round number. It's impressive, especially if you are relatively young when you attain it. If you are doing this to impress your friends, or trigger envy in your enemies, you don't need real estate investment information, you need to grow up. Truth to tell, neither your friends nor your enemies care how much money you have.

The proper way to set a financial goal is to work backwards. Money should not be an end in itself. Rather it is a means to an end. So step one in financial goal setting is to make a shopping list. What exactly do you plan to buy with the money you want to make? Most people want a nice home, reliable cars, a good education for their children, health insurance, and retirement. What does that cost? The nice house requires an annual income of about $50,000 to $150,000 depending upon where you live and how you define a nice house. College costs about $33,000 a year per child at most. Retirement costs relatively little if your home is free and clear. If you can afford the big expenses---house and college---you can afford the other stuff. Furthermore, the amount you need rises and falls according to the age of your kids. Do the numbers. That's how much you need.

When you do the numbers, you will probably find that you need less than a million dollars. Your goal should only be what you need. There should be no additional amount the only purpose of which is to inflate your ego. Why not? Because every dollar you add to your goal increases the risk and therefore increases chances that you will subject your family to financial disaster. It's altogether fitting and proper to take risks to achieve worthy goals. But risking your family's financial future for ego reasons is irresponsible.

Your ultimate loan-to-value ratio goal should be to own your properties free and clear. A good generic goal that should work for most investors would be to achieve a net worth of $750,000 in today's dollars, combined with an overall loan-to-value ratio of 0%, in twenty years.

4. Start studying real estate investment.
Once you have made an informed decision that you really want to invest in real estate in order to achieve sensible financial goals, it's time to narrow your focus and to study the details of the real estate niche or niches you choose. Most beginners seem to assume that there are thousands of dollars worth of worthwhile books and courses they can take. There are not. You can probably read all the good ones in a few months. Another book you must read is The Millionaire Next Door. It's not about real estate per se but it is definitely about the reality of becoming a millionaire, as opposed to the fantasy world described by the vast majority of real estate gurus.

The only worthwhile national course I know of is the CCIM course. The IREM and Appraisal Institute courses were marginal when I took them in the '70s. The Bar Association and accountants organizations usually offer books, loose-leaf services, and seminars on topics related to real estate. I generally recommend them if they pertain to the real estate niche or niches you have selected. Some local areas have good adult education courses and/or good real estate investors associations. Take the good local courses if there are any in your area and join a good club if there is one in your area.

Sorry to tell you this, but you will probably have to learn by self-taught on-the-job training. The demand for good real estate investment information far exceeds the supply. However, a large group of con men have come forward to part undiscerning fools from their money by promising to deliver good real-estate information, but instead delivering a mishmash of stuff that sounds good to the ignorant novice, but which would be laughed at by experienced investors.

What real estate books should you read? Most of my books have long lists of recommended books, periodicals, and courses in the back.

Find as many of the good real estate books as you can and give yourself six months, and no more, to read them. Then get your butt out into the market and start doing deals! Do not study real estate endlessly.

5. Do it!
I am sorry that the above course of action has not rid you of all fear about the real estate investing career upon which you are about to embark. Get used to it. That's an unavoidable part of real estate investment. When you are experienced, you will lose most of the irrational fears you had as a beginner, but you will always have plenty of rational fears to worry about. You have to learn to live with that uneasiness. It cannot be eliminated. There will always be quack real estate gurus who will lead you to believe they can make your fears go away. But they are the same as the quacks who claim to cure cancer. They want your money. They will take it if you are dumb enough to give it to them. But they cannot help you. They can only give you a false sense of security.

6. Do not draw over broad conclusions from early results.
You will probably have initial success or failure. Do not jump to any big conclusions based on the first five years. You need 10 to 15 years to really understand real estate. In shorter periods, you don't see enough of both the ups and downs. The real estate world is full of guys who had a bad experience at the start of their real estate investment careers and drew the erroneous conclusion that you cannot make money in real estate. It is also full of guys who came in at a good time and drew the conclusion that making money in real estate was easy.

It's neither easy nor impossible over the long run, but it often looks like easy or impossible over the short term. Don't get in it unless you are in it for the long run.

Real estate is a vast field with many exciting opportunities to achieve extraordinary financial goals. Like any other business, success in real estate investing takes diligence, persistence, and luck.

Arizona Average Home Price now a Quarter Million Dollars

It's hard to believe that the average median home price in Arizona has risen by 43% to a cool quarter million dollars. This is starting to price a lot of buyers out of the market. There also doesn't seem to be any slowing to how fast the home prices are rising. Investors are bidding the prices out of control. As explained in this Arizona Republic Article.

The record-setting resale housing market in metropolitan Phoenix hit another milestone last month when the price of a typical home rose to nearly $250,000. The actual median sales price was $249,900 in June. That's nearly a 43 percent increase from the median of $175,000 in the same month last year. Even with mortgage rates staying relatively low, Valley homes are becoming less affordable for typical buyers, Butler said. He said the resale affordability index was 86 in the second quarter of this year. A reading of 100 means that a household with the area's median income can afford a house at the current median price financed at prevailing mortgage rates. The index has taken a large swing downward since it hovered at 112 last year. There were 11,545 existing homes sold last month, below the record 11,665 set in June last year. Year-to-date, 58,035 existing homes changed hands, up from 48,220 at the same time a year earlier. A strong economy, job growth and housing investors are helping drive a market that also gets momentum from entry and move-up buyers not intimidated by rising prices.

America For Sale

Foreigners are buying up Armerican property like it is going out of style. With the weak dollar and high value of the euro, europeans and other foreign citizens are buying up American real estate. And why not since their investments are doing extremely well. Consider this recent article:

MIAMI – Earlier this year, real estate marketer Melissa Rubin took some South American clients to a party to promote a new condo that developers hoped to sell before a shovel hit the ground.

Even by Miami standards, the party was exotic. There were tigers, chimps, human flamethrowers, jumbo TVs, and the usual red-carpet food and drink. There was also a bikini-clad woman covered in chocolate. "If we take them to a party, it helps them get excited about the project," says Ms. Rubin of Platinum Properties International.

Indeed, developers are going all-out to charm their clients, and more and more those clients include the world's wealthy elite from such countries as Argentina, Mexico, Australia, and Germany. These foreign buyers, in fact, are one of the important reasons the housing bubble continues to grow in hot markets like Miami, New York, and Las Vegas. In many cases, they're taking advantage of the strong euro or trying to get their money into a dollar-denominated hiding place.

The result: In Miami, for one, some condo buildings have as much as two-thirds of their units owned by foreigners. Call it America for Sale.

"No question, foreigners are part of the bubble," says Stephen Wayner, first vice president at Bayview Financial Exchange Services LLC in Miami.

Although there are no numbers indicating how much foreigners are pouring into the United States to buy condos, there are some eye-opening anecdotal signs:

• In Las Vegas, wealthy foreign buyers - mostly from Mexico - have snapped up 12 percent of the condos at Icon, twin 48-story towers that are now almost sold out even though they won't start construction until next month.

• New York City real estate brokers estimate that up to 33 percent of new condos sold in the city are going to non-Americans, especially Europeans, who one broker describes as "very aggressive."

• Asian buyers are jumping in, too. Real estate agents are flying to Shanghai, Beijing, Bangkok, and Kuala Lumpur to talk up the property market. Recently, a large group of Korean finance, construction, insurance, and engineering executives conducted a "study tour" of southeast Florida real estate. They plan to return next April.

A bargain purchase

Part of the allure of American real estate is the cost. While some of the prices may seem high to Americans, to Europeans and others the real estate feels like a bargain, particularly when figured in euros or pounds sterling.

Miami has long had a history of attracting Latin American investment. The weather reminds Central and South Americans of home, and they've visited Miami's shops for years, lugging home everything from appliances to designer sneakers. In addition, Spanish may be the first language of south Florida instead of English. And the South American elite have long viewed the city as a safe place to stockpile dollar-denominated assets, whether it be in cash or real estate.

"Every planeload comes in with potential buyers," says Ronald Shuffield, president of Esslinger-Wooten-Maxwell Realtors in Coral Gables, which is also representing Met 3, a 74-story condo tower. "Almost every Latin American who buys a condominium here has in the back of their mind, 'That's my safe refuge. If I have to leave, that's where I can go.' "

What's also changed is the active selling of US real estate on foreign shores. Within the past month, Mr. Shuffield has sent brokers to Argentina and Spain for real estate trade shows. ("They are just like yacht trade shows," he says.) Recently, he had a broker in Mexico City meeting with people who might want to plunk down up to $2 million for a condo.

Recently, Rubin's partner rented a hotel suite in Caracas, Venezuela, to show floor plans to brokers and their clients. "He came back with lots of leads and sold a few," says Rubin, who tries to maintain a relationship with her foreign clients by sending birthday cards and calling them every six weeks to update them on the market.

The next wave of buyers might well be from Asia. Several new Miami condos have Asian names such as Mei, the mythical Chinese symbol for beauty.

This week, John Pinson, a real estate agent in Palm Beach and president of the International Real Estate Federation (FIABCI-USA), is traveling to China and Malaysia. He has also scheduled future trips to Hong Kong, Thailand, Japan, and India. "Some of the newest buyers are Vietnamese and Thais," he adds.

Marketing a 'buzz'

Whoever the prospective foreign buyers, marketers say it is important to create a "buzz." One way to do this is a launch party where no money exchanges hands. In Las Vegas, the Icon tower party featured a chocolate fountain and South American, Asian, and Californian cuisine. And, says Sarah Prinsloo, president of Related Prinsloo Realty Services in Las Vegas, there were foreign real estate brokers who speak English. So far, 12 percent of the units have been sold to Mexicans. "They are coming for second homes and an investment," says Ms. Prinsloo.

Fortune International, exclusive brokers for Avenue, two new towers in Miami, are even more successful at attracting foreign buyers. In four months, Fortune has sold almost one-third of the units to South Americans and another third to Europeans. The company has a large network of foreign brokers who help to line up potential customers. They also do major events, says Lucrecia Lindemann, the sales director, such as hot-air balloon rides and special lunches.

"I'm just back from Paris, and sales to the Jewish community there are good," says Ms. Lindemann. "And the Italians are coming here for security and personal reasons."

For many of the foreigners, it's been a beneficial purchase. Lindemann says in less than a year, prices on condos along Brickell Avenue, where her buildings are rising, have soared almost 75 percent.

"Everything here has been a good investment for them," she says.

Atherton California Real Estate

Atherton, California currently houses the most expensive real estate in the country and it's only going to go higher with Google employees cashing in their stock options. Currently the average per capita income in Atherton is well over $110,000.

The town's allure is enhanced by its exclusivity. Atherton has 2,500 homes and no more than 160 home sales a year, says Tom LeMieux, a real-estate agent here. Houses are often snapped up without going on the market at all. Bidding wars quickly escalate. Older homes can sell for $3.5 million, often as "tear-downs" to be razed to make room for new construction.

Across the country, new tales of real-estate froth are bubbling up every day. But Atherton is in a particular lather. The 4.6-square-mile enclave in the heart of Silicon Valley has the most expensive ZIP Code, 94027, in the nation, with a median home price of nearly $2.5 million in 2004, according to a recent survey by Forbes.com. Among the newly arrived Googlers' neighbors is the boss: Google CEO Eric Schmidt is an Atherton homeowner.

New Degrees in Real Estate

The W.P. Carey School of Business at Arizona State University plans to begin offering degree majors in Real Estate and Entrepreneurship by 2006. This is good news for a school that has just received over $50 million in funding. The article in AZ Central confirms that the new dean has big plans for the coming years.

New Record Set for Real Estate

A record has recently been set for the most expensive piece of real estate sold in the world and it resides in the Hamptons. A buyer paid 90 million for this 40 acre property as described in this article.

Would you live in a Mall?

A lot of residential homeowners and commercial development are seriously pondering the idea of including residential space along side or rather on top of retail and commercial space. This will maximize use of the land and the potential income it could derive. In an interesting article on this idea, it quickly becomes apparent that this will soon be a reality.

"Where you have density and income, and you have the opportunity to do a larger redevelopment or a ground-up development, I think it can make a lot of sense," he said. "If you just happen to have extra land and somebody else is putting up condos, that's a short-term prospective. I would be concerned if that took off in a major way." Most malls don't go beyond three levels because shoppers don't usually go above that, Sterrett said. Residential development lets mall owners get cash from higher floors. "Instead of doing two levels of retail and being limited to 100,000 square feet of additional retail," Sterrett said, "you could do 15 or 20 stories of multifamily. In fact, the higher floors are most desirable because of the views."