webLOGfor.US

I received an email last week about my article Honest Company or Scammers – You decide. I've removed the name from the email and reprinted it below with permission.

I was so glad to read this blog on Joanne Pearce. I have been searching for info of any kind for months. I have a house for sale and it has been on the market for over a year. I received an offer from Chi Rho Investments in March that was a great offer. I spoke with 2 different people. Eric and Joanne Pearce. The said they originally were Pearce Enterprises. I was trying to get them to give me any info that I could check their validity. They said they were not able to give out that info but they were on public record in the state of Florida so I could find out that way. I spoke with the bbb and could find nothing. I spoke with the chamber of commerce. nothing. I spoke with the board of realtors. No one had heard of this company. When I questioned them and said I would love to do business with them if I could find just one piece of positive evidence about the people or company they withdrew the offer. I was glad. 2 weeks ago I was contacted again about the same house which is still for sale. This time it was Matthew Pearce and Ann Tate from RidgeCrest Ventures . A Florida Company. The offer was very good and I have until Sept 7 to let them know if I want to move on to the next step. I received a second notice yesterday from Ridgecrest wanting to know if I had any questions about the offer. This time it was signed by Joann Pearce. How in the world can we get this company investigated? I have some computer knowledge but not enough for this. Thanks for your help.

One thing I can say is that I am sure this person did their due diligence on the company and people involved.  From the horror stories I've read, the person would have ended up very sorry if they chose to do business with these people.  When someone has a house sitting empty they will tend to jump at any offer that comes around.  Luckily this person had the sense to try and find out more about the company and people before moving into a business relationship with them.  I wonder if Ann Tate is the same person as Joanne Pearce, Helen Pearce, Helen Joanne Pearce…

Looking around the net I was able to find one blog by Darby Johnson that had Ann Tate and RidgeCrest Ventures in it.  I left a comment on the blog asking the blog owner to contact me about their dealings with Ann Tate and RidgeCrest Ventures.  If I hear back from him I will let everyone know.

web log for us – those that follow through with the due diligence on all business dealings.

    Marketing your rental property to the right people is key when you have a vacancy.  Simply put, a vacant unit equates directly to lost profit.  Targeted marketing for your rental unit is something most landlords don't think about when advertising their property.  Consider the advertising process your first chance to properly screen the potential tenant.  Your advertising is useless if it doesn't find its way to the people that you want to rent your vacant property.  

    Failing to market your rental property correctly can lead to a cascading effect ending, ultimately, in failure of the business and loss of the property.  If your marketing is bringing in the wrong kind of tenants then you will only find the best of the worst.  Simply choosing the best of the pool is not a good thing if the pool is not the one you want to be in.  For example, if you do not accept Section 8 tenants then marketing your property with flyers that happens to be near a Public Housing Office or Public Housing in general is not a good idea.  You may get some potential tenants who are not on public assistance but the majority of contact you will get will be from those who are in the program.  

    Simply put, what is the most effective way of marketing and what should you think of when marketing your property?  I will list these in the order of what I believe to be most effective to least effective in terms of bang for the buck.

"For Rent" Sign on Property:

• This is the easiest route to go.  It is very effective in marketing because you reach multiple streams of potential tenants.  This form of advertising covers both geographic and referral methods.  Other tenants/neighbors will see the "for Rent" sign and may tell a friend.  Those driving around a specific neighborhood looking for rentals will see the sign and call.  It's a win/win situation in this way.  Consider that most people will be looking for a new place during the weekend.  The addition of a couple of helium balloons to the sign on a Friday or Saturday morning will increase its effectiveness considerably.  As with all good things, there are some cons to this.  If you have neighbors who do not like you or that the unit is a rental they may remove the sign.  Combat this by keeping good relationships with the neighbors.  Another con is that you draw attention to the property and the fact that it may be vacant.  Would be squatters and/or thieves can be on the lookout for this.

Referrals:

• This is another easy route to go.  If you are a good landlord, others will want to recommend you to their friends.  Ask your existing tenants and the neighbors around your property if they know anyone looking for a place to live.  Give some basic information on the rental property like monthly rent and your pets policy.  This will aid in the referral of good potential tenants.  Offer an incentive if you rent to the person they referred.  Depending on the rents you collect this could be anywhere from $50 to $200.  Here you get to reach your target audience by considering that like minded people are friends.  If a neighbor from around the corner who lives like a slob recommends someone, chances are his recommendation won't be the cleanest person around.  Some of the pros to this method are the fact that the new tenant should get along well with at least some of the neighbors if he/she was recommended by a well liked neighbor.  It is also a cheap method considering the cost of the vacant unit.  One of the cons to this method is that you may offend a neighbor/tenant if you do not choose the person they recommend.  Remember, don't give out any details of the credit reports, etc if a someone questions why you didn't choose the person they recommended.  Just a simple sorry, there was a more qualified applicant is all that is really needed.

Neighborhood Flyers:

• Neighborhood Flyers are a great way to attract potential tenants.  This is one of the better ways to target your rental property to specific groups.  If you are looking for a more mature person as a tenant, putting up flyers in some of the Community Groups that cater to seniors will help you out.   Looking for someone just starting out with their family?  Community centers that have programs for expectant mothers can help out.  If you are part of the Section 8 program posting your flyers around some existing public housing or at bus stops near the public housing office should get you in touch with the potential tenants you are looking for.  One thing to remember with flyers is to make them as professional looking as possible.  If you aren't good with a computer or graphics, it may be best to take a trip to a Kinko's with some photographs and have them help you with the design.  Always remember to put photographs as a picture is worth a thousand words.  Yeah I know, what a cliche, but it's true.  This method can be as inexpensive or expensive as you want depending on how many fliers you post.  Some places you may want to post are churches, grocery stores, housing offices, Community offices, Bus/Train stops, public buildings, etc.  

Newspaper Advertisements:

• For these I look for local papers.  In Northeast Philadelphia I'm lucky enough to have 2 papers that cover the target area so for me this is more of a geographic targeting for my rental advertisements.  If you only have a single paper that covers the entire city you will have less specific targeting available to you unless the newspaper splits the advertisements into geographic areas.  This method can be the most expensive but also generate a lot of calls.  You are limited in the amount of information you can place in a newspaper ad so be sure to use your abbreviations well.  I've compiled a list of abbreviations for Real Estate Ads here.  Unless you are willing to spend a great amount of money you also will not get a picture listed.  With this be prepared as you will need to do a lot phone work before setting appointments.  Some of the pros of this method are the large readership and wide circulation of your advertisement.  

Craiglist:

• While I have not had a good amount of success with Craigslist for advertising my rental property, I have spoken with others who swear by it.  I may just be too fickle in my screening.  I've had a few good bites but nothing come to fruition.  For that reason it is at the bottom of my list.  However because of the price (FREE) it is one that should always be used.  You are allowed to post photographs and use full descriptions.  You get great exposure for some target audiences but remember, if you are targeting seniors or underprivileged you may not get the response you are looking for.  Only those who are computer savvy or have access to computers will see your rental advertisement.

Honorable mention: Business Website:

• I'm giving an honorable mention to having your own website.  You can control much more with this than anything else.  You can refer to it in all your rental advertisements.  With your real estate website make sure you you are giving new information.  Too many times I will see rental websites that have the exact same information as you have in your flyer/Craigslist ad.  If people are going to your website they have most likely seen you flyer or the outside of the property.  Here you want to give them more.  Entice them into realizing your property is the place they want to live.  Websites can be very inexpensive.  GoDaddy offer domain name registration for around $9.oo (US) and you can get web hosting packages from one of the many resellers for less than $5.00 per month.

    As with all things, remember to pre-screen and screen your potential tenants very well.  Proper screening can help with stopping no shows or wasted appointments with people who do not qualify.

web log for us – those that like to do things correctly from the start

    "It is with great sadness that American Home has had to take this action which involves so many dedicated employees," Chief Executive Michael Strauss said in a statement.

    Those words echo true for the nearly 7,000 employees that will be laid off today from American Home Mortgage.  AHM has been rocked by creditors who have lost faith in their business.  AHM's business is ALT-A loans.  Alt-A loans are loans to people with less than perfect credit.  These people usually have credit scored from 600 to 660.  This accounts for around 40% of the United States.  

    A couple days ago I spoke of the impact that the failing mortgage industry will have long term.  I want to reiterate that here.  The impact of this companies fall, and others like it, will hit home to almost every American.

    These 7,000 people are now unemployed.  With the latest report that job growth is weaker than expected these people can expect longer time away from the job market than in recent history.  You must also take into account the investors who will lose money on the AHM closure.  The average Joe will feel that harder than the larger pocketed investors.  

    I don't consider myself a naysayer.  There is a positive in all of this.  Those investors who have all their ducks in a row have good times coming.  If you have the cash available to purchase you will make out in the coming 18 months.  If you have your cash tied up in investment equity, I would try to leverage it out now as the standards for lending are going to tighten up severely.

web log for us – those that can keep an eye on the future to leverage it to our favor

    Many people are poo-pooing the mortgage fallout.  Everyone is concentrating on the effects of these subprime loans and how the rate reset will affect scores of people.  You can see my personal feeling on the matter in this post.  Barring that, I am not here to discuss the issue of the mortgage fallout and its impact on the loan holders, originators, etc.  I am here to discuss the further implications of the problem to the Average Joe (or Jane).

    The most recent casualty is American Home Mortgage.  They have been unable to make $300 million in loans on Monday and missed another $500 million they were scheduled to make on Tuesday.  Their stock price has fallen over 90 percent from its 52 week high of $32.77.  the chances are pretty good that this company will either go bankrupt or materially restructure.  Either way it will leave little value to any shareholders.

    You may be considering AHM just another casualty of the subprime meltdown, but they aren't.  American Home Mortgage held a roughly 2.5 percent share of the U.S mortgage market.  They dealt with "Alt-A" mortgages which while not prime, were not subprime either.  These types of mortgages fall in between the two.  These are people with roughly a 600 to 660 FICO score.  We're not talking deadbeats here.  These are people with either a few blemishes on their credit history or are carrying somewhere around a 50 percent debt load.  The people in this range are roughly 40 percent of the United States.

    This cascading effect will affect everyone.  Those who have invested directly or indirectly in mortgage backed securities will lose.   Those who have invested in the companies that originate these loans will lose.  If you have 401k or mutual fund investments, check to see if you will be affected by this financial crisis.  If you are invested in any REIT's real estate prices will be falling.

    Looking further into the issue, many Average Joe’s and Jane’s will be affected as well.  Without originators to make loans to the Alt-A crowd, more homes will sit on the market longer.  Greater inventory with fewer buyers will not be good for the market.  Prices will fall.  People who can get prime loans will be unable to move or get the asking price for their current home.

    As a Real Estate Investor get your money lined up now.  If you have a lot of equity tied up in any properties that you think you would need in the near future you may want to pull it out.  Loan standards will shoot through the roof and some investors may get caught up in the tightening.  Housing prices will be falling.  Look for the deals that are out there and remember the number one rule with investing in real estate.  Make your profit when you buy…..get the property for well below market value.

    As with everything, the Real Estate market is cyclical.  Things will turn around, but I believe that it will go down quite a bit more and many more people will get hurt before it starts getting better. 

web log for us – those that plan for the future to capitalize on it