Monthly Archives: February 2014

This Should be Sobering……..

Recently I’ve been reading articles about the large number of foreign investors spending billions of dollars buying real estate in the United States. Some of the articles are simply stating facts and others are obviously written to stir up emotion about all of “our land” selling off to foreigners. I enjoy reading the user comments following these articles because they usually represent part of the reason the articles are true in the first place. The comments are usually full of outrage of “How can we allow this sort of thing?”

Personally, I’m grateful that foreigners can buy U.S. soil. Otherwise my Grandparents who all arrived from various places around Europe could not have got their start here. But besides that, there are a couple of reasons why I do believe there is a sobering message in these articles and it’s not what you might think.

Back in the early part of the real estate crash beginning in 2007, we got very busy buying residential real estate. I believe we bought 5 homes in 2007 and, for us, a record 19 properties in 2008. We continued to buy every year through 2012 with 2013 being the first year we had not bought any new properties since we began in 2003. The article that got me thinking about this was a recent one that said that the early years of the crash were largely supported by mom and pop investors who were stabilizing the market by buying the excess glut of foreclosures hitting the market at unprecedented rates. It was said that these small investors probably saved the market from complete melt down by simply stepping in and not only lowering the vacant house inventory, but also making that inventory immediately available in the rental market. Very quickly, foreign buyers began getting in on the action along with huge corporate investors who are able to buy properties in blocks of over 1,000 units at a time. Still, the small investor keeps plugging away, increasing their holdings by two or three properties per year building a portfolio of really good investments for themselves.

So where is the problem? In these articles, there is an emphasis on the “foreign” buyers somehow being bad for our country. The fact that foreign buyers are finding the U.S. a good market to invest in should be an indication that we are still a good investment option. One of my conclusions to those complaining about foreign investors buying up the U.S. is “The reason they are buying it is partly because we are NOT!” As fast as we are buying, there’s still more out there and someone is going to buy it. If we don’t someone will. Why not the Chinese, or Canadians, or anyone else for that matter. Incidentally, Canada accounted for nearly a fourth of all international sales, followed by China at 9% and India, Mexico and Britain each with a 7% share. Together, these five countries accounted for 53% of the transactions.

Here’s the “Sobering” part! One of the articles stated that while foreign investment into U.S. properties is at its highest, U.S. consumer debt as a ratio to income is also at it’s highest point ever. So while our foreign counterparts are finding America to be the land of opportunity, we as a society, have become more consumer and debt oriented than we have ever been in history. So much so that not only can we not afford to invest in real estate as an investment, many cannot even afford to own a home for themselves. Ironically, as more foreign investors purchase more and more real estate, some may even find themselves renting from not just “out of state” landlords but possible “out of country” landlords. The irony being that consumer behavior is more likely the culprit rather than “foreign” investors.

Double Down on tragedy. – To make matters even worse is a “kick ’em when they’re down” new federal law called “Dodd-Frank” which I just recently learned about that went into effect this past January. It is designed to “protect” homebuyers who are purchasing homes on private contracts from owner finance sellers. In effect, it places all of the same financing qualification requirements on a home buyer using private financing as a bank would require. Sounds good, but, the reason most un-qualified buyers resort to private financing is because most owner finance “sellers” are willing to overlook bad credit, or lower income/debt ratios than what banks do. The whole law is designed to place the burden of determining whether a buyer can actually “afford” what they are buying onto the seller. As if an adult can’t figure out for themselves whether they can afford a particular home. Now, facing penalties (pretty stiff ones too) owner finance sellers cannot risk selling to buyers with marginal qualifications. Thus removing the possibility of home ownership for even more people.

I began to wonder, “Have we reached a point where we are moving towards becoming a peasant society within our own country?”

The other day I was called by a prospective renter inquiring about one of my properties. It’s one of my “lowest end” properties. It’s nice, but very small and designed for a fixed income tenant. Of course I have to provide all the utilities and cable T.V. in the price or no one would be interested. At $550 for everything, it’s as low as I can go without operating in the red. The prospect told me he was trying to figure out if he could afford it with a take home pay of $250 every two weeks…………….. ( I shake my head in amazement)

We are choosing to spend more than we earn. We are relying on the government to insure that someone else determine for us whether we can afford what we are buying. ie: Dodd-Frank. We can’t figure out if we can afford a $550 “all inclusive” rent on $500 wages. We complain when foreigners are buying “our” real estate when we can’t hope to buy it ourselves because of our self inflicted consumer debt. Even if we don’t have “excessive” debt, we aren’t willing to invest into real estate assets ourselves because of the “riskiness” of it.

If this is our “best” we need to just shut up about “foreign investors”. At least they are taking advantage of the opportunities we are ignoring.

One Year Blog Update

I’ve been doing the “Blog income” thing for one full year now and have decided that it’s not what I expected, but its kind of better than I expected. The amazing thing I’ve discovered with it is that like any other passive source of income, once it’s established, it keeps producing whether you put much time into it or not. In the full year since starting I have received income EVERY WEEK! They pay out on Friday and I have received payment notices every single Friday.

Here’s the one part that gets people hung up that don’t decide to give it a try. What exactly do I do to make money? Well there’s one thing you do…….I put it in a short video:

When you do what I’ve explained here, It works.

If you are curious about the video I’m talking about, Here it is: Blog Income Video

It really is pretty simple!

Is Reality TV Killing Our Dreams?

A thought struck me today in the form of a comment I saw regarding our up-coming tree house project. For years, I sat in front of the TV watching shows on cabins, remodeling houses, wood working shops and the like. I noticed during those years that I would cycle in and out of two emotions. One was that of wishing I could somehow personally enjoy the experiences I was watching but could not quite figure out how to do it because it required the risk of stepping outside the boundaries of my skills and/or comfort zone to pursue. The other emotion was that of frustration. After so long of looking and watching, not experiencing first hand, I would become frustrated with my “dream” of the first hand experience. Out of that frustration, I would mentally throw in the towel and return to the mundane life of working, earning a living and going through the motions of living!

Don’t get me wrong, there is noting wrong with that. It’s just that in a weird way, I would find myself living my own day to day reality, but I found myself living my dreams vicariously through a few reality TV shows. The things I dreamed about but never would have the courage to step out and actually “DO”! In addition to that, 20 years ago the reality TV was nothing compared to what it is today.

Today, I can watch “Gold Rush” if I want to experience the dream of prospecting for gold. (or any number of other related shows) I can watch “Survivor” if I fantasize about surviving on a deserted island somewhere. I can watch “The Amazing Race” if I want to be a globe trotter around the world traveler. I can watch “Wild Alaska” if I want to experience the Alaska frontier. And so on. There are  hundreds of subjects and experiences I could live through reality TV. In “Reality” I’m sick of them all! While a few are informative, most are deeply embedded with drama to give the viewer and emotional connection to the show, the characters or the experience keeping them returning again and again to get their emotional and experience “Fix”. I’m not sure that American Idol is designed to give entertainment or to draw in all those hundreds of thousands, perhaps millions of people who secretly desire to become performers for the benefit of the shows ratings and popularity. In a small way, I think the viewers temporarily satisfy their dreams, at least emotionally, by watching these shows.

Back to my story. When we decided to step out and pursue our dreams of real estate investing, it also enabled me to live other dreams as well. I loved renovating houses and improving them. I also entered into a pursuit of learning and experiencing wealth creation through the RE investing and through that of running a business. My woodworking passion was also given an outlet. Most importantly, my biggest dream was to learn to escape the confines of a routine job. After successfully engaging in all these initial goals, I found we were then able to pursue some of the ones we had fantasized about (the ones we never dared to believe we could actually experience) These were the dreams of owning resorts, cabins and recreational properties. Running them as a business without the constant pressure to require them to perform financially to earn a living from. We can run them for fun!

On to the Tree Houses

tree houseNow we have been inspired to build a tree house resort. I’ve been encouraged by countless people I should watch the TV show “Treehouse Masters” and I finally have had a chance to watch it. It is inspiring to me and has given me valuable information most would overlook. The show is designed to entertain and provide an emotional connection. Sadly, I believe this “emotional connection” does satisfy the desire to have the tree house experience and kind of short circuits the potential real dream a viewer may have of having an awesome tree house experience.

This is the nature of Reality TV and I honestly believe it is the reason for their popularity. For those who do not have the resources or courage to pursue their deepest dreams and desires, Reality TV becomes the outlet for those restricted emotions. The cycle deludes the dream by providing  small emotional highs that temporarily satisfy passion, even though no real action towards the dream was achieved. The final tragedy is that the fulfillment potential of the dream is actually killed off by the cheap emotional substitute.

I will continue to watch Treehouse Masters because it is inspiring and is a great reference to the process, but will NEVER be a replacement for the dream. Besides I also enjoy the entertaining characters of the show.

If you would like to follow along with the progress of our Tree house Resort, go to “Sleeping In Trees” and subscribe to the updates.

If you want to follow our current Family Retreat cabin project you can do so at “Creating the Family Retreat” and also at our website at Cross Timbers Cabins or on Facebook at Cross Timbers Cabin Rentals.

See You In The Trees!


P.S. – the tree house you see in the picture is not ours, it is just a good example of an attractive tree house that I found and it gives us ideas of what we would like to build.

Defining Your Life

me n shelley on the beach 3We spent this past week soaking up sun, walking in the sand and swimming in the sea. This has become an annual event for us sometime after the weather turns cold and before Spring starts to warm things back up. As we began posting all the new pictures, I realized that we tend to highlight our highs and lows probably more than we should. Most of us don’t live in the realm of our highs, neither do we dwell too long in our lows. For us, highs are usually vacations and road trips and gatherings with good friends and family. Lows (at least this year) have consist of broken water pipes. It seems like every time we turned around there was another one. Sometimes just from old age and more recently from freezing in below zero weather.

Those highs and lows don’t define who we are. Those things generally lie in the fringe area of our lives. All the things in between those highs and lows make up who we really are and therefore define who we are. Those things are what we do that get little or no attention or recognition. Most of us work, we play, we spend our free time involved with the things we enjoy doing. I think we can define ourselves mostly by what we do during the 80% of the year when we are not on vacation or battling problems.

In some ways, the 80% of our routine will dictate what our life will look like in the future. A few years ago, I thought it might be time to change how our life would be defined. If I’ve discovered one thing, it’s that life can define you, or you can define your life. Choosing to press yourself forward into a new definition of who you are takes planning, purpose and work. Still, when you choose a path for yourself, it’s still beats life choosing the path for you.