I am sure many of you read the article by Catherine Reagor in the Rupublic today. If not, click here. Marshall Vest, a UofA economist, Jay Butler, ASU real estate analyst, and RL Brown of the Phoenix Housing Market Letter were asked a number of tough questions and Catherine reported their answers.
If you went online to AZCentral.com you saw several hundred posts from mostly angry people. It always amazes me how few people comment on the content of the post verses rant about "stuff."
Enough of my ranting though. The article made several good points and gave some hidden tips for those experiencing the problems associated with the market. Let me outline a few items I saw.
1. All tended to feel that most of today's real estate problems could have been alleviated had lenders and builders not been so anxious to approve buyers for loans that were outside of their financial comfort zone. Likewise, if more buyers has shown restraint and looked at the long term implications of the loans they were accepting, less would be in trouble today.
2. A true real estate investor is a well educated, highly capitalized person who has a game plan and the knowledge to execute it.
3. We are still not out of the woods. However, there are areas that will fair better than others both on a National scale and a local one. Some areas in Greater Phoenix are doing fairly well while others are in the tank.
Let's just look at those three ideas and see what we can learn and how we can be better prepared for the future.
1. Many homeowners accepted unwise loans. As with anything, knowledge is power. If you are going to apply for another home loan or refinance, get a second opinion from someone with great expertise. People often ask us why we send so many people to Judy Giel at First Horizon Home Loans. It's simple, she is first an advisor and she doesn't try to "sell" people loans. She teaches people about the short and long term implications of different products and works very hard to keep them financially safe. You need an advocate on your side... find one before you apply for your next loan.
2. I know several people who jumped into the investment game. Some sought counsel, studied books and articles on the subject and laid out the groundwork for successful investing. They made hundreds of thousands and still have it. Others ignored advise and jumped in ill-prepared. Most of them are in bankruptcy. Like anything, real estate investing takes knowledge and preparation. If you are planning on taking advantage of the current low-home prices, do your homework first. Feel free to contact us for a list of items a successful landlord/investor needs to know before making the plunge.
3. Since we are not out of the woods, planning is key. If you are in financial trouble, gather the troops to help. Too many people put their head in the sand until it is too late. Get help putting together a budget and game plan. Perhaps someone at your church or job can help with this. Don't be embarrassed asking for aid, people generally like helping others in trouble. Judy Giel, the lender we discussed above would be happy to help you look at your loan options. She really is a caring woman with great knowledge. Get a second job, sell your toys, and hunker in. If you are in trouble, you can often get out by simply making smart changes. Get your family in on the project. Kids can mow lawns, babysit and would be honored to help with a family crisis if asked.
