Strategy

I recently have been reminded of something a friend of mine told me years ago; however, it didn't make an impression on me until just a few days ago. I can't quote him exactly, but what he basically said was . . . "It is not how much you take in, but how much you take home."

A business is never sitting still. They are living breathing things, that are either growing or dieing. However, a business should not grow at the expense of making money. For instance a business that brings in $1 Million per year in revenue that translates to $200,000 per year in net profit is MUCH better than a business that brings in $10 Million per year in revenue and also has $200,000 in net profit.

The lesson: As you scale your business, make sure your not just doing more work to bring home the same amount of money.

Real Estate Prices in Birmingham

Real estate prices in the Birmingham metro area have climbed by an average of $20K over the last 6 months. What could be causing this? I believe three things:

1. Lack of inventory - Soon 6 months worth of foreclosures that were postponed due to the foreclosure moratorium will hit the market.
2. $8K tax credit - As much as I hate to say it, the tax credit seems to be moving some houses.
3. Seasonal spike - People, home sales spike EVERY year around this time.

Watch out for falling prices.

Section 8 Article in Birmingham News

Interesting article today's Birmingham News about the Birmingham Housing Authority. You can read it for yourself here:

http://www.al.com/news/birminghamnews/metro.ssf?/base/news/1247559344314050.xml&coll=2

It doesn't tell you too much about how these new payment standards are going to work. I'll keep you updated as I find out information.

MW

What Happened?!?

As lending continues to tighten, the opportunities to capitalize continue to increase in the single-family sector of Birmingham real estate. I was recently on a phone call with a potential investor and we discussed the fact that as the real estate market continues to worsen and as the ability to find financing continues to get harder and harder it really weeds out a tremendous amount of competition. Therefore, those with money, or those that have access to money, currently have a competitive advantage. It is almost like the “Perfect Storm” for those that have money and a good management company . . . as deals begin to flow in from the 6 month foreclosure moratorium. Stay tuned; like the famous saying goes, “Some will make it happen, some will watch it happen and some will wonder what happened.” I’d suggest now is the time to make it happen. I just don’t want to look back two years from now and say, “I wish I’d worked harder and bought more.” I don’t plan on that happening.

If you have the cash, but need some guidance, team up with someone . . . I’d love to help!

Beware . . . Foreclosure Tsunami

What does 6 months of deferred foreclosures look like? We are about to find out. From October of last year until April of this year, our administration placed a moratorium on foreclosures. Now in their infinite wisdom, we have thousands of foreclosures that will hit the market here in Birmingham. Who is prepared for it? At Golden Key we have been building the only Ark we know of that we believe will float the middle market of single family homes. We are looking for partners who would like to leverage what we have learned over the last five years and the platform we have built for purchasing houses. Someone will profit from the oncoming challenge ahead. Will it be you?

Golden Key

Check out our piece we just created using SlideShare:

Golden Key

View more Microsoft Word documents from Matthew Whitaker.

Problems = Opportunity

“The greatest problems present the greatest opportunities.” – Tina Seelig, Stanford University

A new foreclosure starts every 13 seconds . . . that equals out to 6,500 per day, according to the Center for Responsible Lending.

I was listening to a podcast on my IPod today when Tina Seelig from Stanford University, who teaches entrepreneurship, made the first statement. It reminded me of how BIG the housing problem really is (13 seconds). If that is true, then we must believe there is equally as BIG of an opportunity for people to take advantage of the problem. I believe it is unfortunate that people have been foreclosed on over the past three years, when they never should have been given a loan in the first place. However, out of the folly of the banks, we ought to take advantage of the abundant opportunity they created.