and it is a fantastic resource for all kinds of property investors.
Dr. Schumacher, who donated 1-million dollars to refurbish the Hermosa Beach Pier, a city where he did lots of business, is the type of investment guru who advocated long term thinking and filled his book with loads of practical advice. With chapter sub-titles like The Genius of Being Goal Oriented, Real Estate as a Source of Income and Analyzing Growth Potential bring a wide range of topics for the ambitious investor.
In an effort encouraged by Dr. Schumacher's widow, Margaret, the successful protégé of her husband updated his time tested methods with information on laws, regulations, market conditions, economic news and the current downturn in market.
Here is Steve Dexter's February 1 article going under the banner of Economic News You Can Use .
Don't lose your swagger because times are temporarily tough. Don't be scared because you don't know what is going to happen next. What makes a market scary?
• Not knowing the real value of what you are buying
• Not knowing if you can sell it or rent it.
Not knowing the direction of the California economy is scary so that is what I am going to talk about.
California's attractions for higher end move ins are up 6%, at least the ones that use United Van Lines. Trends in van moves are often watched as a signal of managerial hiring. Those new employees typically get employer-paid relocations that include van services. And these kinds of people are typically homebuyers.
We have had some very tough times in California, but it is not as bad as you think...it never is. Are more people moving in than out of the state? Heck, yes but for those that espouse the jobs flying across the borders to the beautiful state of Nevada and to temperate Texas as being the downfall of California, I would ask them why we continue to get two out of three venture capital dollars while Texas gets one out of twenty.
Markets improve, and then recede. I see signs of improvement in my market and positive news nationwide. Rents are going up in areas where I hold properties and good tenants are becoming easier to find and keep. Also, I am lending money to wholesale buyers who are finding houses way below market. Joint venturing with the flippers is also good. With prices in Southern California so low, and rents rising in most areas, the cash on cash returns beat just about any other class of investment.
Orange County and San Diego were recently rated the top two recovering real estate markets in the country y Local Market Monitor and Veros. Now I don't totally believe in their methodology but it is nice to see them mentioned. Market bottoms are ALWAYS characterized with lots of false readings borne of hope and sideways price action. There is a SOCAL recovery brewing and it is not a matter of "if" but "when."
Things will improve; America will find its swagger. America is a great place, it really is. I read a piece by National Review editor Rich Lowry where he illuminates why America is so exceptional, that no one thought a constitutional government would succeed on such a grand scale to be a haven of liberty for the world's peoples or to amass great wealth spread it widely. I think it is amazing that we are the only nation to be founded upon ideas and not conquests, a" haven of liberty for the world's people, a nation that had wielded it immense economic and military power with benevolent hegemony."
Boeing's got swagger. A 1 Billion contract to make three satellites for the Mexican government will keep the production lines humming for years to come and help preserve high paying engineering jobs in Southern California. How is that for bad news?
Continuing the Bush tax cuts was a calamity adverted. My friend and Congressman Ed Royce (R-Fullerton) writes an article last month about how one of the largest tax increases on history was killed to provide individuals a "modicum of certainty" and small businesses a "pro-growth agenda." Capital gains would have gone to 20%, the top income tax bracket to 39.6% and your estate would have been taxed at 55%. Deadly to think that that over half of all your estate would go to the government. Your heirs would have to sell the house and everything you worked hard for all your life.
Some will say it is bad that the estate taxes were not increased. Properties in probate are an opportunity for some. Heirs that have to sell real estate to raise money to pay estate taxes are an easy problem that an enterprising investor can solve.
The American taxpayer got some swagger back, and so does California. Not all is dark for the Golden State as newly elected democrat Jerry Brown will lay down the law to a free-spending legislature. Business owners in Orange County think he is off to good start. Most think the chances are good that the Democrat-dominated legislature will approve tax cuts. But will the majority of voters approve the tax increases he wants?
Believe it or not, California led all states in construction employment growth. From October to November, 7800 positions were created according to the Associated General Contractors of America.
Northern Californians are feeling a lot better about their job prospects than Southern Californians. A survey by Citibank says that Orange County and San Jose County are the two counties in the state that show the highest job growth. Californians remain resilient about the future and cautiously optimistic about their job prospects.
Orange County is ranked 14th in US high tech jobs. With its highly educated workforce working at companies mostly started for laid off executives and engineers who worked in aerospace, Orange County excels on consumer electronic manufacturing, component fabrication, space and defense systems as well as photonics manufacturing. Higher incomes mean higher rents.
The unemployment rate for the college educated is only 5%...almost half of the national rate of 9.7%. Do we have not a jobless problem but just not enough educated workers problem?
Good news is what we need more because the negative case is so well laid out. It is always easy to be a back bencher and grouse about why things are so bad and likely to get worse. The true test of character is to carry in despite the bad news all around.
You must ACT NOW take advantage of the best buyers market in decades because recovery is just around the corner
DAVID SCHUMACHER, PhD , was an investor, magazine columnist and college instructor in the field of real estate. One of America's premier experts, he was also a multimillionaire property owner. He parlayed a modest investment into property holdings worth $20 million, including houses, condos and magnificent oceanfront apartment complexes in Southern California. He also authored The Buy & Hold Real Estate Strategy and Buy & Hold: 7 Steps to a Real Estate Fortune.
STEVE DEXTER is the president of National Capital Funding, based in Laguna Beach, California, and an expert commentator for CNN/Money, CBS Radio and Fox TV. He is the author of Real Estate Debt Can Make You Rich and Beat the Banks: How to Prosper from the Rising Wave of Bank Foreclosures. He teaches at several colleges in Southern California and is a guest instructor at Harvard Business School, Harvard Law School and their Graduate School of Design
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