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Wednesday, April 25, 2007

Home Buying Has Changed

If you are one of those many agents or brokers who don't really believe that the Internet is "the way" in real estate today, perhaps the following data compiled and presented by Leslie Appleton-Young, Chief Economist and Vice President of the California Association of Realtors® (CAR®) in her analysis of the Real Estate Market in California for 2006 will get your attention.

If you believe that the Internet is the single most important factor in your future success, here's your continuing proof that you are correct. Ms. Appleton-Young and CAR® have compiled data of such import and enlightenment that I felt some of it should be shared with you. Pages 62 - 82 of the study compare some distinctions between Internet vs. Traditional buyers and the findings are powerful. These charts show the undeniable trends and the clear preferences consumers have for the Internet approach to buying a home: since the year 2000, virtually every preference that used to favor the traditional approach has been turned upside down and the Internet approach is now overwhelmingly favored. This report is unequivocal evidence that if you are not on the Internet bandwagon and if you can't be found by people searching for homes on the Internet, you are completely "missing the boat" in the real estate business.

Here are just a few of the report's findings:

92% of Internet buyers found their agent on a web site; 63% found them through an Internet search engine; 0% of Internet buyers found their agent through brochures, flyers, yard signs or mailers to their home (does this tell you to spend more on Internet marketing and less on print?);

In 2000, 28% of people said that they used the Internet as an important part of their home-buying and selection process. In 2006, 70% said they did;

86% of home buyers started using the Internet as part of their process BEFORE they started looking for a specific home;the other 14% did after they started looking, but BEFORE they contacted a real estate agent; that means that 100% of buyers surveyed started looking at homes first, agents second. When you combine that finding with the already existing one that fully 81% of Internet buyers stay with the first real estate agent they choose to contact, you can see a powerful case for being able to have consumers find you, first;

Internet buyers spent an average of 4.8 weeks doing research before contacting an agent; traditional buyers only 1.7 weeks. That means an Internet buyer is better prepared and twice+ as less likely to waste your time;

Internet buyers bought a home on average after spending 2.2 weeks looking for a home with an agent; traditional buyers spent an average of 7.1 weeks; How high would your productivity be if you could spend 2/3 of the time you now spend previewing with clients and could dedicate it to selling and marketing, instead?

Internet buyers previewed an average of 6.7 homes with their agent (they had already eliminated ones they did not wish to see), traditional buyers previewed 15.4 homes; an average of just under nine fewer wasted showings per customer;

Only 3% of all Internet connections available at the primary computer used for the home-buying process were dial-up: Internet home buyers and searchers are not sticking with dial-up, just as they are not sticking with traditional methods;

The approximate distance between previous residence and new residence for traditional buyers was 25 miles; for Internet buyers, it was 242 miles (you can sell anywhere compared to traditional ways);

Number of agents an internet buyer interviewed, on the median: 1; Traditional buyers? 3. (Why would you want fewer auditions and more certain retentions?)

69% of Internet buyers said response time was extremely important.83% of those buyers chose email as their favored communication method with their agent. 0% chose "in person." (The Internet is the new "office visit.")

Internet buyers were more satisfied with their agents: 4.3 to 3.3 for traditional buyers, on a scale of 5 where 5 is "surpassed expectations."

35% of traditional agents listed "faster response time from my agent" as the one thing they would change, if they could, about their experience; Internet buyers? 0%!

Internet buyers were far more satisfied in every important researched category of satisfaction than traditional buyers were; when asked the number one reason for satisfaction with their agent, 91% of Internet buyers said that satisfaction was because their agent "was always quick to respond." Traditional buyers? Their number one reason was "worked hard on my behalf", chosen by 62% of them, leading us to conclude that traditional buyers did not find their agents "quick to respond."

And, ladies and gentlemen (a little drum roll, here, please), 97% of Internet buyers said they would use the same agent again. Traditional buyers? 50%. (Twice as likely to be satisfied and twice as likely to give a referral, wouldn't you think?)

I'm not an economist, (I don't even play one on TV), but it seems to me that these data show clearly that:

Agents who sell via the Internet do not get as bogged down in unproductive chauffeuring to preview homes as traditional agents do;

Agents who utilize online marketing and have Internet buyers are more liked, more highly regarded, more likely to have a repeat sale with the client,

Agents selling to Internet buyers are likely to work only 2.2 weeks with a buyer before selling a property (vs. 7.1 weeks traditionally);

Agents committed to online marketing may be able to expand their market area to an average 242 mile radius of their location and remain effective due to online communication; people find you on the Internet, call you or email you, and use you to help them find a home in an area they may not know.

The money you may spend on brochures, ads, newspaper ads, and the like should be reconsidered and placed into Internet Marketing.

So, unless you are in a state of denial about the Internet's importance to real estate transactions, you need to do several things in your planning for this year, at minimum, if you want to be on the right side of these statistics.

You need to take most of the money you are spending on newspaper ads, brochures, glossy marketing pieces, etc., and invest it in your Online Marketing. Chances are good that you cannot possibly wisely spend all those dollars online; consider those savings as your bonus this year. It will be tough not seeing your comforting listings in the paper, but think of all the money you'll be saving! (And as more fuel for that fire, consider this: Ms. Appleton-Young's data also show that over 70% of people 65 and older read a daily newspaper, but only 35% of 24 year olds do. PRINT IS DEAD TO THIS GENERATION OF HOMEBUYERS!)

You need your own website showing your properties and you. You can get a very good one free. What are you waiting for?

Just having a website or a page on your franchise site won't cut it; you must be able to be found by people searching for homes in your considerably larger e-neighborhood. The Internet is a really big place and chances are that you and your site may be lost in its hugeness. (Click here to find out if your site can be found and how to make it found http://TheBlackwaterCG.onelanding.com.)

You must be permanently committed to "Thinking Internet." I have heard many agents say "I don't get that involved with Online Marketing; I've been successful the traditional way for 15 years." I offer those of you saying that now two things: my sincere congratulations on your past success and my sincere empathy for the frustration you will suffer as the curve gets further out in front of you. The report told us that in 2006, 63% of Internet buyers (who comprise 70-85% of all buyers today) find their agent on the Internet. We believe that within the next two years, this number will approach 90%. While this CAR® study does not report on every State in the Union, it does report on what is happening in America's biggest and most influential real estate market. No matter where you are, these data and trends are coming at you. You must get on board or you will be literally run over and left behind. Internet selling is the way, and within our lifetimes, the statistics will continue to favor online marketing of real estate in even greater proportions.

We at Blackwater and our affiliated companies, Compass Internet Systems and Web Reporter Tool, talk to agents from Martha's Vineyard to Hawaii, Maine to Florida, Texas to Canada and everywhere in between on a daily basis. That will never make us as well-informed as Ms. Appleton-Young, but I believe it gives us a good perspective on trends in this area, and here's what we think: all over the country, agents and brokers are showing interest in, adopting, and pouring their time, effort and money into online marketing on a scale that was unimagined only two years ago. That makes us certain that every professional real estate sales person who wants to stay in this business must adapt to Darwin's Law on its most brutal terms: Adapt, or die. In listing and selling terms, that means that you must make the effort to make the Internet make money for you, for soon, that is where it all will be made. Go to a search engine, enter your city, state and the words "Real Estate" or "Homes for Sale" or any other combination that describes what you do. Then hit "Search." Are you one of the ten people listed on the page? Based on the statistics you just read, if you are not that means there is a certainty that the searcher will not buy a home from you, but from one of the people on that list of ten; after all: "92% found their agent on the Internet; 63% of them used a search engine." 63% of 92% of all Internet buyers means that there's a 57% chance you are out of luck.

After years of evolution in the way we do things, the pace of that evolution is increasing. This is the time to get with the wave, this is not the time to miss it. As Eugene L. Meyer, former Washington Post writer and editor recently stated in an online article: "Search Engine Placement is Mission Critical (for Real Estate)." I'd put it another way: "Internet Marketing is the future of real estate sales." It's up to you: Stay where you're comfortable with Traditional buyers, or move the cheese and learn how to get more Internet buyers. In the long run, there will be fewer and fewer traditional buyers for you to pursue, but more and more Internet buyers. It seems plain where you need to be going!

Thanks to Leslie Appleton-Young, Chief Economist and Vice President of the California Association of Realtors® (lesliea@car.org) for producing this information and being so cooperative in permitting its publication, and thanks also to Andy Alexander of Shorewood Realtors in El Segundo, CA for bringing this study to my attention (www.andy-alexander.com). It was the excitement in Andy's virtual epiphany that got me onto this report; because - as he put it: "I just realized I must do better in my Online Marketing because that's where all the buyers are."

Tuesday, April 24, 2007

Training & Education for Real Estate Professionals

Listed below are a few of the thousands of courses listed at our affiliate website, RETrainingCenter.com.

These courses change weekly, so please check back often.
Select from the list below to find new or best-selling courses to earn your Designation or License, or take Continuing Education and Professional Development courses.

Real Estate Sales Training
How To Present Price & Get Your Listings Sold In Today's Market
Big Book of Real Estate Ads: 1001 Ads That Sell, 3rd Edition
The Home Sellers Seminar Kit
Objection Handling Training Program
Swanepoel TRENDS Report 2007
Getting Financing & Developing Land
Run Your Own Seminar Kit: Seminars For First-Time Home Buyers
Buyer Presentation Book CD
The Complete Pre-Listing System: Get in, Get Out, Get the Listing!
How to Create and Deliver a Dynamic Listing Presentation
FSBO Marketing System
The Complete Buyer's Agent Toolkit
Top Dogs Commercial Real Estate Training Program
Cash Flow Analyzer Pro
Commercial Pro

Business Planning / Administration
The Procedures Manual For Agents CD
The Policies, Procedures, & Personnel Forms Manual
Systems That Work!: The Administrative Process
Systems That Work!: The Post-Sale Process
30 Million Dollar Marketing System
Business Planning For The Real Estate Owner, Manager, & Team Builder
Buyer Presentation Book CD
Floor Time Scheduling System
Real Estate Contracts Handbook (CD-ROM)
I-9 Form Mistakes & Omissions: The Right Way to Verify I-9 Eligibility

Agent Recruiting
Agent Recruiting Kit CD
Recruiting The Experienced Agent
The Total Recruiting System (On CD's)
Recruiting Letter Library
The Complete Recruiter
23 Tips For The Recruiting Manager
Global Trends And Strategies For Recruiters (CD)

Mortgage Training
Basic Loan Processor Seminar
Loan Officer Boot Camp Seminar
Loan Officer Success Training
Loan Officer Boot Camp
Compliance Issues For Real Estate Lending
Lead Generation Package For Mortgage Professionals
Basic Processor Training
Conventional Basic Processor (CD-rom)
Conventional Intermediate Processor (CD-rom)
Conventional Advanced Processor (CD-rom)
Advanced Processor Seminar
Training System for New Originators
Conventional Basic Loan Officer (CD-rom)
Conventional Intermediate Loan Officer (CD-rom)
Conventional Advanced Loan Officer (CD-rom)
The Complete Mortgage Marketing Kit

Real Estate Conferences & Events
Real Estate Mastery Summit
STAR POWER Annual Training Conference
Recruiting Network Conference 2007
Walter Sanford’s Titan Training Seminar
The National Employee Benefits Summit
Top Dogs! Commercial Real Estate Training Seminar
The Real Estate Recruiters Retreat
RISMedia / Real Estate Magazine Leadership Conference

Don't see what you need here? Then
CLICK HERE to find other courses, or search below.

Monday, April 16, 2007

News Feed

Buying Real Estate When It's Not For Sale

OK RE Agent...think out of the box and try this tactic below...

But remind yourself, deswpite what an investor may tell you or what they may learn in their group meetings, the agent is worth every cent they're paid....starting with the fact that it won't take a week to write an offer, it will take less than an hour for one!

And secondly, third party negotiations minimizes seller emotions ---- confronted with a buyer face to face instead, a seller and buyer could get at each others throats and this is not the outcome anyone wants...

So read on....BUT REMEMBER, an investor needs a buyers agent whether they know it or not! (I just wonder, an investor with that mentality, are they going to operate on themselves should they ever need surgury or are they going to seek someone who practices their profession on a daily basis)?

--------------------------------

Buying real estate can start with a look in the newspaper, a visit to a broker, or a search online. These are all good ways to find your next investment property. You're looking at the same properties as every other investor, of course, so it's not always easy to beat the competition to a great buy.

A better way to find good real estate investments is to look for properties that aren't yet for sale, and make an offer. I bought my first home this way. I put an ad in the paper stating what I was looking for, and soon had a call from an old couple that had been thinking about selling. I bought their place at a good price, and they saved a broker's commission.

Buying investment real estate that isn't for sale starts with a three step search process. First decide what you are looking for. Single family rentals or apartment buildings? Then start looking for properties that fit your criteria. Then contact the owners.

Buying Real Estate From Non-Sellers

Don't limit yourself to "fixer-uppers" or other "problem" properties that seem more likely to have owners willing to sell. Many owners of investment real estate have thought of selling, so you can start with almost any building you like. You never know beforehand if or why a landlord is ready to call it quits. You find out by asking.

Tact is necessary here. Call the owner and tell him you're an investor, not a broker. Let him know that you like what you see. Tell him you can have an offer ready in a week if he's interested. If he's not interested, thank him politely and hang up, but send him your card or a letter. Many investors have bought from owners that changed their minds.

If there is some interest, explain that you are an investor, so your offer will have to be based on your return on investment. This means you'll need to see the books. Specifically, you'll need to see the rent roll, listing the units and what they rent for, plus current occupancy, and operating expenses for the last year.

Have a confidentiality agreement ready before you call. Let the owner know that you'll sign it and deliver it to him before you see the books. He may not want to let the tenants know he's thinking of selling, so inspecting the units may have to wait until you make an offer. Just make an acceptable inspection a contingency in the offer.

Why is buy investment properties this way? No competition and no sales commission means you may get a better price. Also, instead of waiting for that perfect property to be listed for sale, you just find it now. Why wait until it's for sale before buying real estate?


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About the Author: Steve Gillman has invested real estate for years. See a photo of a beautiful house he and his wife bought for $17,500 on his home page, or go straight to the section on Investing In Real Estate: http://www.HousesUnderFiftyThousand.com

Wednesday, April 4, 2007

Why Web Visitors Are Impatient

The real reason website users are so damn impatient is not that they have such short attention spans, it's because most websites are designed to meet perceived company objectives, rather than audience needs.

How To Drive Traffíc Away From Your Website

Let's take a look at some of the reasons why your website visitors may be leaving your website before they've had a chance to hear what you have to say; or to put it another way, if you want to drive traffíc AWAY faster than you attract it, here are some of the things you should do.

1. Give Web-visitors Too Many Options and Choices

Social scientist and Swarthmore College professor, Barry Schwartz, has coined the phrase, "the paradox of choice." His studies have concluded the more choice you give people, the less likely they are to make a decision. Some choice is good, but too much choice creates confusion: it's a case of diminishing marginal utility.

A well designed website explains, directs, guides, and focuses visitor attention on the things that are of real benefit to your visitors and to your company.

Every business provides a variety of products, services, and information to their customers, but these things are not all of equal importance. Your website is a place to focus attention on your core marketing message, not a place to provide a shopping líst of everything you are able to do and every product or service you may be able to offër.

2. Give Web Visitors Too Much Information To Process

Architect, author, and information designer, Richard Saul Wurman, in his book, 'Information Anxiety' talks about, "the ever-widening gap between what we understand and what we think we should understand."

Good website design is about more than technology and aesthetics; it's about deciding what information needs to be presented and what information needs to be left out. If you are truly an expert in your field, you should know what information is important to your customers in order for them to make a decision. Too much information is like too much choice, it confuses rather than clarifies. Focus on delivering meaningful content or risk having your visitors hit the exit button.

3. Give Web Visitors Too Much Non-relevant Content

The only thing worse than overloading your website with more information than visitors can absorb is confusing them with useless and non-relevant content.

Non-relevant content is content that doesn't advance your major purpose: to deliver your marketing message in an informative, engaging, entertaining, and memorable manner. If it isn't relevant, dump it.

4. Give Web Visitors Too Many Irritating Distractions

Websites should be designed to direct visitors to the information they want and that information should be the content you want to deliver.

You cannot sell someone a product or service they do not want. A real prospect is one that needs the same information you want to provide; the art of salës is directing potential clients to relevant information, and presenting it in a way that visitors see your product or service as fulfilling their needs.

On the surface, third-party advertisements and banners may seem like a good way to make some extra cäsh from your traffíc, but these ads become so distracting, visitors either get fed-up or clíck on one of the links that takes them away from your site. Whatever few bucks you earn from these ads, you are loosing by chasing real customers away; this of course assumes you are a real business with something legitímate to sell and not a website that's an excuse to deliver advertisements.

Other nonsense like favorite links and silly fluff-content merely distracts visitors from investigating your site to find what they are looking for.

5. Give Web Visitors Too Many Red Flags

Website visitors are constantly looking for red flags that tell them that the site they are visiting should be skipped as soon as possible.

If you want to make sure visitors won't deal with you make sure you don't provide any contact information: no contact names, no telephone numbers, and no mailing address is a sure sign that you won't look after any problems that arise from a website transaction.

Your website must be designed to build trust and foster a relationship, not scare people away.

6. Give Web Visitors Too Many Decisions To Make

How many decisions do you demand from your visitors in order for them to do business with you?
Take for example the seemingly simple task of purchasing a new television. Do you purchase the inexpensive but old tube technology, the newer Plasma technology, or the LCD technology? How about all the various features to choose from like picture-in-picture, commercial skip-timers, and on and on? All you really want to do is relax with your spouse and enjoy a good movie - is that on a VSH, DVD, Blu-ray, or HD-DVD?

7. Give Web Visitors Too Many Stumbling Blocks

Do you make people go through the order processing system before they can find out how much something costs, or do you demand potential customers read a ridiculous amount of small print legalese that only a lawyer could understand?

If you want to drive traffíc away from your site make sure you build in as many stumbling blocks as possible.

8. Give Web Visitors Too Many Forms To Fill-in

Do you attract your visitors with special offers or free white papers and then demand that they fill-out complex forms, surveys, and questionnaires before you give them access to what they came for? If you do, you are probably losing a lot of people you attracted, and you are guaranteeing that your next email promotion will end up in the trash.

9. Give Web Visitors Incomprehensible Page Layouts

Good design, proper page layout, consistent navigation, and well organized information architecture that promotes serendipity, helps visitors find what they're looking for and provides a pleasant, efficient and rewarding experience for the website visitor.

Website designs that rely on technology, databases, and search engine optimization rather than focused content, coherent organization, articulate presentation, and a memorable, rewarding experience are designs designed to chase traffíc away.

10. Give Web Visitors Too Many Confusing Instructions

One of the most frustrating experiences website visitors encounter is confusing instructions and incoherent explanations of how your product or service works or how to order what you are selling.

11. Give Web Visitors Too Many Reason To Clíck-out

If you really are determined to fail, make sure you provide website visitors with as many reasons as possible to leave your site: irrelevant links to your favorite sites, links to your suppliers because you're too cheap to put their information on your own site, or any combination of the reasons mentioned above, all contribute to driving traffíc away from your site.

Tuesday, April 3, 2007

Real Estate Problem Solver

Introduction

There are many areas one can invest in. Since I was 15 years old I have looked for the fastest, most effective way to accumulate a lot of wealth, with the least amount of risk. I am now 58. While looking for this road to truth, I spent a lot of time in the school of hard knocks. The school of hard knocks is a very interesting but painful school to attend. It is also the most expensive way to learn something, but when you graduate you have a PHD in what to do and not do with your time and money. The schools I attended were: Investing in businesses as a silent partner, owning my own businesses, working for another family member-in my case my father, buying publicly traded stocks and securities, penny mining stocks, commodity trading, investing in gold and silver, real estate private lending, real estate development, real estate remodeling, buying foreclosure properties. I also worked as a real estate problem solver/matchmaker, bringing business owners together with business buyers, and matching up real estate owners with real estate buyers.

Writing about all of these activities would take an encyclopedia, so we will limit this essay to the kinds of situations you can run across in the real estate school of hard knocks. I will present my solution with the given situation. There are more than one possible solution and I invite you to come up with other possible solutions as you read. If you get some value from my experiences that will hopefully lower your tuition to the real estate school of hard knocks. Feel free to e-mail me your comments, alternate solution or stories. Do, please, let me know that it is all right for me to publish them.

My Real Estate Philosophy

As a way of introducing myself, I thought you might find what lessons I have learned, after all these years of real estate, interesting. Buy real estate instead of stocks, bonds, mutual funds, or commodities. When you pick a winner in one of these non-real estate areas you can make 5-10 times your money. When you are wrong, in one of these non-real estate areas, you can actually loose up to 90% of your money. In real estate, if you are not greedy-not trying to get rich quick-in one year, you can make 100 times your money, on the upside. The downside risk is only based on how well you looked at all the possibilities ahead of time. If you did, the downside risk is reduced to only the holding time to fix a mistake. If you rush in and do not explore all the possibilities of a business venture, you can actually loose 100% of your money. In my mind an upside of 100 times profit is better than 10 times profit.

My philosophy on real estate ownership has changed in the last 15 years. I used to think that selling at the top of the market was the smart move and buying in the crash. Now I feel that buying when prices are down is still a smart move but never selling is the way to go. In order to hold on to a property in a down market you require proper planning to survive the crash. This I call a back door or emergency plan. This is have a plan and knowing what you will do if everything goes wrong with you original plan. When you have a backup plan, you rarely need it. This is the basis of my philosophy. With this understanding, you might more clearly see why I did what I did in these situations.

The Stories and article:

The area of real estate investing is one of the most complex because it is a combination of law and real estate. It is one of the most interesting because fortunes are made and lost in this area, and the numbers are so enormous. Lastly it is an area where crooks can make a lot of money and many times get away with it. Following are some stories (case histories) I have dealt with and some articles I have written on the subject of fraud in real estate. Finally, I have included an article on the basics of foreclosures and real estate in general, for your interest. I hope you enjoy them.

The Stories:

Story #1:
It was early March 2000 and I received a call from Kevin. He said that he had heard about me from some mutual friends. He wanted to speculate in buying HUD houses (Properties that the Government had foreclosed on). He wanted to buy them, fix them up and then sell them at a profit. He had heard that I had bought many foreclosures in the 1970’s and 80’s and he was hoping I could advise him. We met for lunch and he told me his life story. The important part of this conversation is that he had bought a boarded up 14 unit apartment building in downtown San Bernardino, across the street, from one of the roughest high schools in California.

By the end of the meeting, I had figured out that he had overpaid about $75,000 for the building, he had already wasted $200,000 trying to remodel it, and it was still $100,000 away from being finished. He had bought it 1.5 years ago and a large part of his costs was the interest on all his loans, related to this project. He was now broke, and in deep trouble, but in his mind, the badly needed money was coming.

It is interesting to note where he got the money to invest in this project. 4 years earlier he was given money to buy an apartment building by his father. He was given enough money that he only needed a very small $150,000 real estate loan to purchase a building in Pasadena that cost him a total of $525,000. In order to buy the San Bernardino rehab project, he first refinanced the first trust deed on the Pasadena building and jumped the loan balance to $385,000. When that money was gone he borrowed $74,000 as a second Trust Deed on both the Pasadena and San Bernardino properties. By the way, that loan cost him 15% interest and $15,000 in up front fees to get the money. Before we parted, I told him that he made a very expense mistake in buying San Bernardino. I explained that from the day he bought the building it was a sure bet that the project would fail. I then had to tell him that I would not lend him any money on San Bernardino, to save his butt.

Over the next 2 months I received periodic phone calls, telling me the progress of the fund raising. One of those updates I was told that the existing 2nd Trust Deed lender was saying that he might give Kevin the added $100,000 he needed to finish the project. At the same time, Kevin also believed he had found a bank that might refinance all the loans of San Bernardino. The difficulty with the bank loan was that the appraisal fee was $3,000, and it had to be paid in advance, even to just apply for the loan. Again Kevin asked me for money. Again I refused to put more good money down his black hole.

Then one morning I got a call from Kevin, “If I don’t make the $2,000 payment to the 2nd trust deed holder, he will start foreclosure in 2 days. Kevin also told me “The 2nd trust deed lender said that he would buy the Pasadena apartment building for what I had paid for it, 4 years ago, $525,000.” The offer had a stipulation to it. Kevin had to bring the loan current first. In my mind, if Kevin could bring the loan current, why would he even bother to sell the property for a wholesale price? I couldn’t believe what I was hearing.

After hearing all of this I decide that it is time I stop saying no and help. What Kevin thought he wanted was a real estate loan for a lot of money. The truth is, that money was not the solution to his problem. The problem had to be different than what Kevin believed, which is why the problem persisted. The real situation was not more borrowing. More borrowing meant more money down the drain.

Experience has taught me, “If the problem was what Kevin thought it was, it wouldn’t be a problem.” What does this phrase mean? A businessman has a financial set back. He thinks that with some short term funding he can recover from the set back and return to the top. After looking around, our businessman will usually find the money, but strangely enough the problem doesn’t resolve. If the problem did correct itself, then the businessman was right about what the problem was, and the problem would be gone. Usually the money doesn’t help, but the businessman doesn’t understand that. He doesn’t realize that the problem wasn’t money in the first place. If it were, the problem would now be gone. Lets continue the explanation. The last money borrowed is now gone and the problem persists, so our businessman goes out to find more money to solve the problem that didn’t solve with the money he borrowed, the first time. What happens the second time? The same thing. The money is used up and still the problem continues.

Our businessman is working on the wrong problem. The problem is not money, or the problem would have been gone. Kevin thought the problem was money. It wasn’t. He had already poured $300,000 into the San Bernardino building, on top of the $209,000 1st Trust Deed loan that came about when he bought the building. Before he was finished, he spent over $500,000 in a building that needs $100,000 to finish, but was only worth $475,000, after it was finished.

What could I do? Use what the good lord gave me. 30 years of experience, on the subject of getting out of problems that I created when I was young and inexperienced. Here was the war strategy. I got Kevin to agree to turn over total management of the two properties to me. Knowing that I was managing the property and working on what I believed was the correct problem, I felt comfortable about loaning money on this deal. If I can’t trust myself to solve this problem, whom can I trust? I started by loaning Kevin $25,000 to make needed repairs to the Pasadena building, pay the property taxes and to bring the first and second loans current on the Pasadena property only. Nothing was to be spent at this time, on the San Bernardino building.

Now that I controlled the Pasadena apartment building, I discovered what repairs the building needed. The list was so long it took one man three months, full time, to fully handle it. I then did a very detailed market study and determined what the market would pay in rents. I asked the tenants for a list of everything they wanted done in their apartments to be happy. I then did everything the tenants requested and I then raised their rents 30%. After the building was full, I raised the rents another 15%. The value of the building went up and I received an offer for $725,000. This was $200,000 more than its value 6 months earlier. I put it into escrow, and then I realized that I could raise the rents some more. I raised the rents again in escrow and forced the buyer to pay another $25,000 for the building. Bringing the price to $750,000. That $225,000 profit was needed to help cover the money being lost in San Bernardino.

Author’s Note: The escrow fell through and the building was kept until this update, December 5, 2004. The building is now in escrow for $1,583,000

What did I do about San Bernardino? I contacted the seller/lender and asked him if he would like me to pull the security guard out of the building and let him have it back in foreclosure. He didn’t want it back, even though he pretended that he was willing to do that. He offered me $25,000 in incentives to get me to personally lend the money necessary for the completion of the building, so he wouldn’t have to take it back. For 3 months he tried to get me to put money into the building, with the idea that once I put my money in I wouldn’t walk away from it. The real story was that I wouldn’t put a dime into that black hole until I figured out how to make it recover at least $100,000 of Kevin’s lost money. I asked for a $70,000 discount on the note, and offered to pay him off. We negotiated for two months. Just when I was ready to finish the deal, the seller sold his note to someone else for only a $30,000 discount. I was not able to make the money I wanted because now the new note holder wanted 100% of interest and principal due. This threw a monkey wrench into my negotiating. All this time, I had a buyer standing in the wings to buy the building from Kevin while I was negotiating. I was then forced to sell the property to this buyer and Kevin recovered only a little bit of his investment. The lender and I were both playing a high stakes poker game. I lost this round. If I could have gotten the payoff reduced, Kevin would received a large hunk of money from an “as is” sale. This is what I call playing “Craps” on a very big Monopoly board.

Author’s Note: The buyer, thinking he was going to put $125,000 to finish the remodeling, notified me, after one year, that he had spent $300,000 to finish the building. The apartment building values were increasing rapidly during this time period, so Kevin’s project was increasing in value at the same time the buyer was going deeper and deeper into construction costs. The buyer made out all right in the end. If the market had died, he would have lost $200,000 on this building after Kevin had already lost a fortune. It’s all about timing, isn’t it?

Kevin learned that money alone was not the answer to his problems; he needed a Genie, to turn his turkey into a swan.

Story #2
Janet is the daughter of one of my oldest and wealthiest friends and clients. We have been doing real estate deals together since 1975. Janet and her husband started buying distressed real estate in Phoenix Arizona in 1994, which was 8 years ago when it was the thing to do. It was now Dec 2000. The market appears to be slowing down and did after September 11, 2001. Janet had been continually borrowing money from her father, whenever things got too difficult. She later sold everything in Phoenix and bought property in Northern California. Then in 1999, one year before I was brought in, she started buying real estate in Kansas City. One day Janet’s father called me and asked for my help. He had loaned his daughter $200,000 and felt that everything she owned was upside down. (Loans more than the market value.). This was further complicated by the fact that if she sold her properties, to pay off her father, the capital gains taxes would eat up any cash, from the sale. On top of all this, Janet kept asking for more money to keep up the payments on the properties that had a negative cash flow and didn’t have enough rental income.

He hired me to help his daughter and agreed to pay my fee. I would work with this 40 years old kid, to get her to return her fathers $200,000 and make herself totally debt free. Janet and I met. She was brilliant. She did know what she was doing, as far as picking good real estate deals. She owned, at the time of our meeting, 10 properties located in 2 different states, and there was $500,000 in equity. If we could get it out, before her father had a stroke things would be great. Janet agreed to the arrangement, happily, if I would be her adviser, not his. Her father agreed to fund whatever money was requested as long as I approved it. Also I had to be the one to ask Janet’s father for the money, since the upset between the farther and daughter was getting unbearable.

This is what we did. A list of needed repairs was created for each of the 11 properties. Bids were received and the work ordered to be done within 30 days. This was not to take months. It had to be done immediately so we could go to step two. Step 2 was to put on the market all of the expensive Northern California property. To my disbelief, Janet wanted to move her family, to a new city, in the middle of all this and her father agreed to let her do it. She had found an old run down house that she felt was undervalued. That meant that her old residence was put into the group of properties to sell. Sell is what we planned to do. Everything was to be put on the market, and sold at the best price to be gotten, but sold regardless. The property in Kansas was to be repaired and fully rented. The properties that could be sold at what we thought was full retail, were also put on the market. The plan was that when everything was sold, the father would get paid off; the loans on the remaining properties would be paid off and the balance of the cash would be put into the bank. Since all of the Kansas deals appear to be a good investment, Janet could now continue to buy more Kansas property, (she had only been spending $25,000 on each deal) but for all cash. The rents coming in would generate enough income for her family to live on without having to ask for money from dad or touching her investment nest egg. That was the plan.

I forgot one last thing. Because many of the properties had been bought years ago on a 1031 exchanges (tax-free exchange), the capital gain tax was going to eat up the cash proceeds. That was one of the traps Janet fell into. She felt she couldn’t sell without buying a replacement. Of course by not liquidating before starting anew, she would never get out of debt with her real estate lenders or her father. The solution, for this problem was simpler than one would think.

First, the father did a 1031 exchange with Janet for one of the big profit houses. The father sold Janet his personal residences for no money down. Now Janet rented her father the house he lives in. So much for capital gains tax on the $150,000 profit in that one big sale. The second big profit was in the house Janet currently lived in. That was tax-free under the current laws. Since the other houses sold had smaller profits, it was decided that the business decision to get out of debt was more important than avoiding paying any taxes.

Author’s Note: That was the plan. So what happened? Janet decided she didn’t want to sell the junk in Kansas and fired me. She refused to pay her father back and as of December 2004 he had not seen a dime. Father has deducted what she owes him from her inheritance, which will be put into a trust administered by her brother for the benefit of the grandchildren. Real estate in California skyrocketed after 9/11/01 terrorist attack and her properties all doubled in value.

Summary: Everyone thinks that his or her problem is not confrontable and therefore unsolvable. I have found that someone other than myself can solve my un-confrontable problems in 10 min and I can do the same for them. It is not a question of being smarter, or more experienced, though experience helps a lot when coming up with easy solutions, quickly. It is really that we all are willing to confront someone else’s problems much easier than our own. When we are willing to confront our own problem head-on, solutions begin to appear miraculously. What I do is help people take their mountains and turn them into molehills. The molehills are then flattened with ease.

The Real Estate Fraud Articles:

These articles were published individually at different times. Here they appear all together, as parts 1, 2 and 3.

Fraud in real estate, are you being victimized? (Part I)

Rip off artists appear in all shapes and sexes. They usually are nice looking, well dressed and very smooth talkers. They, in conversation, tell you about a financial killing they made, or are in the middle of closing. Then they change the subject. A really smooth talker never asks or suggests you invest. They wait until you beg and plead with them to let you in on their great deal. At this point you are HAD. That means, " your goose is cooked and you are invited to the feast, because you are the main course." The logical question is how do you know, before you lose your money that you are going to be ripped off? The answer is independent research, and lots of it.

1) Find a friend, or a friend's friend who is an "expert" in the specific field of investment you are considering. Ask lots of questions and listen to him. Ask him or her how to make sure you are protected. In the years, 1990 to 1995, eight people I know paid the same real estate trainer over $5,000 each to show them how to buy real estate for "NO MONEY DOWN." The trainer claimed she got results. Not one of the students, all of who got to know each other, after years of trying, ever bought a property for "No Money Down."

Recently the same trainer is offering to get her students 100% financing on real estate, even with bad credit. The MARK (the name for a con artist's pigeon) thinks he is paying for an education. The education is that you are $5,000 poorer and you have the name of a loan company that will charge you 8.5% on a 1st Mtg. and 11% on a 2nd mtg. I will tell you how to find such a lender yourself and it will only cost you a phone call.

2) See an attorney or an accountant to review the deal, especially the paperwork. I have seen contracts that if you just read it yourself, word for word and think about what it said you would run like a wolf is chasing you. He is. One simple real estate contract allowed the con man to take the money out of the joint account before he did the repair work. He took the money and never did any work. Never release money until you have everyone's signature on the paperwork and your adviser has read the whole contract, word for word. If you cannot afford an attorney, do not do the deal. It is better to not make a profit than to loose what you already have. "A fool and his money are soon parted." Don't be the fool.

3) Get to know this person. Who are his friends? Who does he work with? What information does the real estate commissioner or the "Better Business Bureau." have on him or her? Ask for the names of people who have already invested with the "con artist", made their profit, and are out of the deal. Do not ask anyone who has gotten in but hasn't gotten out yet. Multi-level people love to have you talk to people that have just entered the group, just before you have.

One of smoothest people around was a securities investment adviser in Santa Barbara. He got hundreds of people to invest with him because hundreds of people had already invested with him. None of them did the level of homework they should have. The few people, who did do independent research, smelled a rat and didn't invest. Many of his investors have lost their whole life's savings; the rest just lost a lot of money, but will recover. If you think I am trying to scare you, then you are absolutely right. "Money should come in rapidly and be spent very slowly.

Fraud in real estate, are you being victimized? (Part II)

The phone range and Peter was on the other end of the line. "Willard, I have a friend of mine that has a real estate problem." I said, "Send him over." Two hours later, Jerry sat in front of me terribly upset. Three years earlier, he had been talked into buying a 4 unit building in partnership with Smooth Talker, a knowledgeable, smooth talking real estate salesman. Smooth Talker offered to find the property, arrange the financing, manage the building and even put up the down payment. Jerry was told that all he had to do was use his perfect credit to qualify for the loan and then sit back, wait seven years and the money would come rolling in.

Smooth Talker also promised that the two of them would do more deals and Jerry would make over $100,000. What Jerry did not know and would not figure out until 3 years later, was that Smooth Talker had no intention of splitting anything and Jerry could kiss his perfect credit goodbye! 3 years ago, Smooth Talker had Jerry and two other buyers, buy three buildings, located on one street. The buildings cost $150,000 each. Smooth Talker put up $1,500 down payment for each property, while at the same time, telling the buyers that he was putting in $12,000.00 for each. There was an unexplained difference of $10,500 each.

Smooth Talker also collected a $9,000 Real Estate commission on each. Smooth Talker also agreed to take the building in as-is condition, with no inspections and without requiring the seller to make any repairs. There were, unknown to Jerry $10,000 worth of air-conditioning as well as other work that needed to be done on the building.

Smooth Talker had those other two buyers borrow from the Federal Government a remodeling loan of $48,000 to make the needed repairs. When those other two buyers each got their loans, Smooth Talker took all the money and said he spent it on Jerry's building. Let me clarify that. Smooth Talker stole the money from the other two investors, telling them he used it on Jerry's building. That is still stealing. My research later showed that he did almost no repairs to any of the buildings, and what little repairs he did have done, were not even paid for.

Smooth Talker cheated the poor workers out of their pay. No one could ever understand what he was doing. He even collected rent, pocketing any cash. When the buyers wanted an accounting. Smooth Talker wouldn't even supply it. When I came on the scene and demanded, as a matter of law, an accounting of what was received and spent. Smooth Talker didn't have any proof of what happen to all the money.

Jerry wanted out of the partnership but Smooth Talker didn't want the building sold; but he did want to make sure he got his due, if it was. He gave me a statement showing that he had put in $34,000 (which was not true) into the building and wanted that before any split of profits. This would have left Jerry receiving $5,000 and Smooth Talker making $46,400 on the whole deal.

To avoid being in this kind of a situation, I advice the following, before doing any sort of real estate deal; a) Evaluate your risk. What is your downside? Have a real estate expert study the deal. b) Set up operating and reporting guidelines with your partners. Put everything in clear English. c) Have everything reviewed by an attorney or an accountant. d) Choose your people partners with care.

Fraud in real estate, are you being victimized? (Part III)

Jonathan's Story: Jonathan had the sadist story I ever heard. You decide how the story turns out. It was 1997 and I received a call from Jonathan. He had received my letter asking if he wanted to sell his business any time soon. He asked me to come out and see him. Jonathan was 81 years old. He owned a woodworking factory that had been going for 40 years. He also owned two commercial factory buildings and had a beautiful residence that was debt free.

His wife, Janet, also 81, was the sweetest woman I ever met. They were both healthy and they loved each other dearly. They had no children or grandchildren. Janet had nieces and nephews on her side of the family. Jonathan had no living relatives of any kind. When I met Jonathan I adopted him. Sounds like the perfect picture, doesn't it. It was until 5 years ago.

Jonathan received a letter from Nigeria explaining that if he would front them some cash to pay off some government officials, they would pay him millions of dollars out of what the government owed them. You may have heard this story. It has been on 60 minutes. In fact Jonathan had heard this story; the problem was that he thought that his contact was different. They showed him legal documents, had Nigerian attorneys certify the validity of them and they did everything else necessary to con a rich old man into believing that his ship had come in.

Over the next 3 years, Jonathan stopped paying his real estate loans, borrowed on his factory equipment, ran up $500,000 in credit card charges and cleaned out his wife's separate bank account, all without telling her anything. Every payment to Nigeria was supposed to be the last one, and Jonathan was hooked. When I found Jonathan he couldn't raise what he thought was the last $10,000 necessary to finish the deal. His creditors were getting very upset and were ready to sue him.

As terrible as this sounds, Jonathan was the 3rd person that I have met in the last 10 years that has been stung by this scam. I cried. I know that at least $500,000 was sent. Jonathan thinks he sent closer to $1 Million. Jonathan decided that it was fate that sent me to him. He may be right. By the way my company name is Kismet Real Estate Investments, Inc. Kismet means Fate, Destiny, Karma, etc in Turkish, Indian, and Arabic. Time was very short, we had work to do and fast.

His wife knew nothing of what was happening, and I had to get Jonathan to tell her that they had gone from being millionaires to destitute in one conversation. Jonathan told his wife the truth. She forgave him. (Now that's love.) Her one concern was that she didn't want to loose her home. We were but a few weeks away from the creditors coming down on his business and her mortgage free house. In one clean swallow, they would put her into bankruptcy, a one-bedroom apartment and living on social security, which would have actually killed her. How much can one take at that age?

I went to work. First I promised Janet that no one would take her house away from her. She needed to trust ME, a total stranger, to not put the nail in the coffin. I do not know if I could have made the decision she had to make. We put her house in an irrevocable trust for her family when she died. That meant she had to give up ownership of her house, to me, a total stranger, in order to continue to live in it the rest of her life. Next we sold his two buildings to an investor who would work with us. The loans on the two buildings were equal to the market value at that time.

We then found a buyer for the worse of the two buildings and made a deal with the Small Business Administration, to lower the interest rate and payments on the remaining building. Those payments are about 30% of current market rents today. By making those very low payments, the lender who is on the building and the business equipment was happy. The result of all this was that Jonathan was able to keep his factory running and make just enough to pay his current living expenses.

Then the creditors, eight of them, started suing Jonathan, one after the other. Each tried to take the assets of the business. There was nothing to take. Some tried to go after the commercial buildings. That failed as they had been sold. One tried to go after the house. I arranged for someone friendlier than the bank to buy the bank's judgment at a discount and hold it until it doesn't make any difference. The bankruptcy attorney said we would never get away with what we were doing. He said that Jonathan needed to file Bankruptcy. Jonathan decided that he trusted my ability more than the attorney's advice. It has been 3 years now and all is quiet on the northern front. Jonathan and Janet are now 84 years old, still healthy, and still in love.

Everyone thinks that his or her problem is un-confrontable and therefore unsolvable. I have found that someone other then myself can solve my un-confrontable problems in 10 min and I can do the same for them. It is not a question of being smarter, or more experienced, though experience helps a lot to come up with easy solutions quickly. It is really that we all are willing to confront someone else's problems much easier than our own.

When we are willing to confront our own problem head on, solutions begin to appear miraculously. What I do is help people take their mountains and turn them into molehills. The molehills are then flattened with ease.

Foreclosure; the basic procedure:

In order for foreclosure to occur in California, there are certain basic things that have to take place. How this works, in the case of a Deed of Trust, called a ‘Non Judicial Foreclosure,’ goes like this - with regard to the time line.

The borrower (property owner) does not make the monthly payment to the person or institution that he or she borrowed money from. Technically, a default occurs the moment the first payment is missed. However, for practical purposes, most lenders do not really start the foreclosure proceedings until after the third payment is missed. A few only wait until the second payment is missed, but this is rare.

The procedure, once started, is continued on through to the end unless the property owner stops it by bringing the loan current (bringing it current means to make all back payments owed to the lender).

· Day 1 - A notice of default is recorded.

· Within 10 business days - The Notice of Default (NOD) is posted on the property, mailed to the property owner and published in a countywide newspaper.

· After 3 months - A sale date can be set for the property to be sold, in order to repay the lender their money. The Notice of Sale (NOS) is also posted on the property, mailed to the property owner and published 3 times in a countywide newspaper. The publications are one week apart, announcing the public auction.

· The recording of the notice of sale must be done at least 21 days before the sale date. A notice of sale is sometimes sent to the I.R.S, if necessary - it is not in all cases.

· 7 days before sale date, if this is a court action, the 7-day rule may apply.

· 5 business days before the sale date - The right of the property owner to re-instate the loan (bring the loan current) expires.

· Sales Date - the trustee, for the benefit of the lender to recover his or her money, sells Property to the highest bidder at a public auction.

Should we Buy, Sell or Hold real estate in this Market?

It has been said, “Buy land, they aren’t making any more of it.” It is really a true statement. Of course there is a lot of land to be had, some very very cheap. Other land like beachfront is very limited and over the years gets even scarcer. I have a book in my library written in 1964. It talks about buying California land. It makes reference to the expansion of Los Angeles into the surrounding neighborhoods, as would be expected.

It also talks about land prices in the desert and other outlying areas where city expansion even today has not happened. Funny, land that was never going to be useful for anything for at least 100 years was selling in 1964 for $40 per acre and is today dirt-cheap worthless land for $200 per acre. Even junk real estate has gone up 500% in 38 years.

So lets look at the question: Is real estate a “buy and hold” investment or a “buy and sell” investment. First I would like to investigate why people have actually lost money buying real estate. We are not talking about “no profit” or “breaking even” owning real estate, we are talking about actually losing money. Let me tell you a story of where I actually lost money, and a lot of it. In 1987 to 1989, the real estate market went up double in 3 years, much as it has been doing in between 2000 and 2002.

I bought 2 houses in rent control West Hollywood, with the idea of building 9 condominiums. Expected profit was to be $1 Million. The market turned south in 1990 and stayed that way until 1995, when it began to go up 5% per year. I lost that property which today would have made me $2-3 Million. Why did I loose it, when if I would have held it for 10 years, I would have been much richer than if I would have been able to build and sell those condos in 1990?

The mortgage payments on the houses totaled $6,600 per month, including taxes and insurance. The market rents were $4,500 per month, which I couldn’t get because West Hollywood rent control would not allow me to raise the rent, even when a tenant moved out. I was locked in to $3,200 rent which meant I was loosing $3,400 per month or $40,800 per year. Since I needed to hold the property for 10 years, which was 2000 before getting a great price for the property or the build condos, I needed to have the ability to put $408,000 cash into the property. This was after paying $700,000 for the property in 1990. I didn’t have the staying power at the time.

Real estate investors usually do not just buy one property at a time. They tend to own many. I have owned up to 30 properties at one time. I know people who have owned and managed 100 houses or 100 units at one time. It is not being able to support the negative cash flow that can wipe out everything you worked years for. If you understand this, and do not get excited by big profits and greed, you will avoid these kind of deals.

In hindsight, if you think this was not a good risk, you would be correct. At the time it appeared that the condos would be built and sold within 18 months and my partners and I would be $1 million richer. Things are not always as they seem in real estate. Of course if you had a mortgage payment of $2,000 and rent of $2000 including taxes and insurance. You would never have this problem. Or would you?

I know it appears that rents would never go down, but in real estate recessions they do. We never believe that our loan payment will go up but they do also. If you have an adjustable rate loan, maybe with a 6 month teaser rate, you will find your payments going up $150.00 per month every year and it doesn’t take more than a few years before the yearly increase gets expense to support, especially while property values are flat or dropping.

When buying property to hold, these risks must be taken into consideration so that you are not surprised by them but are in fact fully prepared for these eventualities. When people buy at the top of the market they always tell me they are in for the long run. But in fact they usually sell out at the bottom, after being hit real hard by the negative cash flow.

On the other hand, people who buy in bad markets, get increasing rents, decreasing interest rates and appreciating property values guaranteeing the investor success. By the time the market peaks out this investor is making 100% profit on the appreciation, double the rent needed to pay the mortgage and the ability to support the property for another 10 years if the market drops and the investor has not sold. Risk free, at this point, unless the investor borrows all his equity out to buy two more deals.

The bargain buyer is in the exact same situation as the top of the market buyer, except he owns 3 houses, not one. I had four friends who, in the late 1970’s, did this exact thing. They each owned 10-30 properties. One of them owned only beachfront Malibu properties. The result was the same for all of them. By the bottom of the market in 1983, all of them had lost everything. Two of the four also got divorced in those 3 years because of the financial stress from a falling market.

Lessons to learn: First, do not think you are smarter than the people who passed this way before you; you’re not. Second, markets never go up forever, have not performed as if they will. Third, if you are not prepared for the worst, it will kill you. If you are prepared, it will only hurt a little. You will survive and come away much richer in the end.





About the Author: Willard Michlin is an Investor, Business Broker, California Real Estate Broker, Accountant, Financial Distress Consultant, Well known Public speaker and Administrative/Business Consultant. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at broker@kismetbusinessbrokers.com See other article by Willard at http://www.kismetgroup.com

When AdSense Goes AWOL

No matter how hard you work to optimize your page, there are going to be times when Google just can’t figure out which AdSense ad to deliver, so it defaults to delivering a PSA (Public Service Ad) instead.

Now I don’t have any problem with charities, but I give to the ones that I choose to give to. Since I don’t have a non-profit license of my own, the goal of my web site is to make money and I depend on Google AdSense revenues to help pay my bills. Someday I want it to fund my retirement as well, so I can’t afford to have non-revenue PSAs showing up on my site.

The good news is the Google understands the human’s basic greedy nature, so it provides us with an alternative to donating our precious web real estate to charitable organizations. That alternative is known as AdSense Alternate Ads.

As strange as it seems, this feature allows you to let Google competitors into your site. Don’t worry, Google is allowing it with their eyes wide open. They even tell you how to set up the alternate ad code to work on your site and they let you do it right in your AdSense control panel.

Once you add the code to your site, Google will pull ads from whatever service you defined rather than serve a PSA. Google will do that even if those ads are coming from Yahoo, or Overture, or your grandmother’s attic.

This goes a long way towards ensuring that you never lose an opportunity to monetize a visitor’s time spent on your site. How nice it is of Google to gives us that opportunity.

Who do you choose?

Ah, now that’s the big question. Most people head straight for Overture or Yahoo, but there are other fish in the sea worth considering. In fact, some of these fish make their living almost solely by serving replacement ads for PSAs. Run this
search on Google and you’ll have plenty of options to choose from.

Why bother?

Sometimes Google doesn’t have any ads in its inventory to match your site’s keywords. Sometimes Google gets confused and can’t figure out which ads to deliver, so it grabs a PSA ad.

Google also has a not-so-readily-available list of what it calls “stop words”. When the Google AdSense spiders detect these words on your page they automatically trigger PSAs. Some of the more commonly known words include severe profanity (think: George Carlin’s 7 Words You Can’t Say on T.V), as well as other words which may very be quite legitimate for your site such as pharmaceutical, drugs, death, dying, abortion, and the list goes on and on. At least we THINK that it goes on and on but no one really knows for sure outside of a trusted few Google staffers.

But no matter what the reason, you don’t want non-revenue ads running on your site. There’s no excuse when Google makes it so easy to keep the revenue flowing.





About the Author: Diane provides marketing and internet profit tips.
For more Google AdSense tips, visit

http://www.adsense.deeljeabiz.com

Email : deeljeabiz@gmail.com

Marketing - Is It The End All Of Business?

Marketing, as we all recognize, is a key, vital area of any business. Its function is to ensure that your products or services are in the public eye, sought after and then purchased. Proper marketing can “make a company” and if done improperly can, “break a company”.

Your organization, with its staff of one or ten thousand people, may be doing a great job of marketing but still be failing in other key areas. Marketing is vital, yet it is only one of twenty-one key areas of every business!

A business needs to manage all of its twenty-one departments, not just marketing or sales. For example, if you bring in a lot of business, yet aren’t prepared to deliver, the business will still fail. Or if you bring in lots of business and produce lots of products and then have weak quality control, your business will fail eventually.

The Lincoln Continental and Cadillac were neck and neck in sales in the 1950’s. Ford Motor Company rushed to be the first of the two companies to come out with power windows. The new model was released in such a rush, that they had not gotten the bugs out of the power windows.

Every owner had trouble. The dealers were recalling every one of the cars as a result. Many long time Ford customers never bought a Lincoln or a Ford again. Only, 40 years later are people buying Lincolns in large numbers again. Cadillac throughout the 60’s became the American Luxury Sedan with no competition domestically for over a decade.

When you understand all the components of you business, then you can be analyze it in much the same way that a doctor does when he gives you a full body examination. Whether you are a one-man show or have a very large staff, your company still has these 21 key areas within its seven major divisions. Each of these key areas needs to be functioning well.

There are a series of steps one goes through to do a business check up. Among the first things normally done in analyzing a business is to establish what the ideal business picture is for your business. Next, you need to determine what your short and long term goals are for the business. Then in depths study of your business (all 21 departments) is done, as it now exist. This study would then be compared to the ideal business picture. In doing this, one can pinpoint the exact key areas that need to be addressed immediately to make the actual scene look more like your ideal scene. These areas are typically the one’s that are ‘driving you crazy’ and stressing you out.

Once these areas are pinpointed, an Action Program can then be worked out and executed. An Action Program has steps that address and handle the trouble areas found. Your existing staff may do these program steps or you may elect to bring in specialists to assist in their implementation. The goal is to be in greater control over all the key areas of your business. An Action Program generated in this way and effectively executed, immediately starts relieving stress in a business.

By this time, I guess you might be asking the question: So what are these seven divisions and 21 departments? Here is a brief overview of what’s involved in a business and the areas that would need to be fully analyzed in creating an effective Action Plan for your business. Each of the seven main divisions of a business further breaks down into 3 departments, to give you a total of 21 departments in a business.

1) The Establishment Division: This division deals with personnel, communications and business ethics. Regarding personnel, we are talking about hiring, handling and basically managing personnel so that there are enough of them to do the work of the company and to ensure that they are properly allocated. Communications deals with handling the mail in and out, internal dispatches and making sure that the company keeps communicating with its customers, vendors etc and that letters from customers are not stuck in desk draws and remain unanswered.

Business ethics deals with ensuring that customers are fairly dealt with and that personnel are actually being productive on their jobs and not being a drain on the company while a few carry the entire load. Sort of like a friendly traffic cop that just makes sure that the personnel are actually doing things that are supposed to be done. The whole concept of this division is one of building the basics. Get the staff in, make sure they are trained on the basics of their job and are on their jobs, ensures that communication is taking place and that the personnel is doing what they are supposed to be doing.

2) The Sales and Marketing Division: This division deals with promotion/marketing, publications and repeat business. Promotion and marketing pieces are designed and disseminated from this area. Brochures, information packets, catalogues, newsletters and anything to get your existing clients to give you repeat business is here. Books and literature, which support your services or products, are sold here. Contacting repeat customers and making further sales is also found here. Most companies have a “gold mine” within their existing customer lists. You can typically get business from an existing client at one-fifth the cost of developing a new client. Continued contact with your existing customer base is done in this division.

3) The Finance Division: This division handles income, disbursements and financial records. The financial matters, records, assets and materiel of the company are its main functions. It is responsible for making sure that less money is spent than came in. It is this division’s responsibility to remain solvent and never (and we mean never) spend more than it makes. This division budget‘s all expenditures, including major purchases of real estate, so the company runs on internal finance. Part of budgeting is doing income planning. Budgeting also includes a required contribution to your untouchable cash reserves, which is only used as a last resort and preferably never.

Reserve accounts are funded to set aside money for payment-in-full purchases. Budgeting, properly done, ensures that a business is able to pay for everything it needs, with few exceptions. This division naturally handles payroll and banking and keep exact track of all financial and accounting records. The main objective of this area is to track and record every penny; from the instant it enters the company to the moment it leaves.

4) The Production Division: This division develops the services or products you sell. The delivery of services, scheduling, preparing and delivery is done in this area. This is where manufacturing plans, schedules and produces their products. This Division is all about creating and delivering the products and / or services that you are selling to your customers.

5) The Quality Control Division: This division sees that every product or service leaving the organization is of high quality. Customers are listened to here. Their praise, as well as their complaints are noted and paid attention to. Whenever complaints are found, they are addressed to create 100% customer satisfaction. The business area(s) involved with customer complaints are addressed and corrected quickly so integrity of services and products are maintained 100%. Most companies do not have adequate quality control. In every major failed company in history, failure was from a lack of Quality Control!

How is it that during the later part of the twentieth century a relatively small country, Japan (with no real natural resources) was able to take major portions of business away from the biggest automobile manufacturers in the world? Answer: The big guys were not listening to their customers and they had a terrible reputation for quality control. Have you ever heard the expression, ‘Fix Or Repair Daily’? Look over the first letter of each word, F O R D! There are countless examples of ‘used to be’ businesses all around us. Ford is still around, but poor quality control almost buried them.

6) The Public Division: This area delivers introductory services and products to the broad public. Information nights, mixers, and introductory lectures about some aspect of your business can all be done here. Introductory newsletters or a web site is formed around this division’s products and services. The entire objective of this division and its departments is to attract new people to your services or products. It’s all about getting out there and letting prospective people know about your services and products. This includes finding new distribution channels for the companies’ products and /or services. The basic idea is that this division brings them in and sells them initial products and services and then the Sales and Marketing division keeps them buying more and more products and / or services, into the future.

7) The Executive Division: This is the top management division. This division coordinates and supervises the activities of the company. It makes sure the company runs well, produces its products profitably and delivers its products and services to individuals and the community in abundant high quality. This is where long term planning strategy gets done for existing and new ideas. The company’s legal requirement are addressed and kept up to date and in place. The executives are ensuring good public relations are kept in as an integral part of staying in tune with the community. Additionally, senior executives meet regularly to address the financial solvency, income planning and productivity of the company. This division also ensures that it is kept well versed on the business market the company is operating in, generating policies for the company and its personnel to operate on and generally run the company in a coordinated manner.

Here’s a challenge for you. I bet that you cannot find a single aspect of any business that does not easily fit into one of these 7 major divisions as described above. If you find one, call me – I’d like to talk to you!



About the Author: Willard Michlin is an Administrative/Business Consultant, Private Investor, Business Broker, California Real Estate Broker, Accountant, Financial Distress Consultant, and Well-known Public speaker. He can be contacted at his Ventura, California office by calling 805-529-9854 or by e-mail at kismetrei@earthlink.net. See other article by Willard at http://www.kismetbusinessbrokers.com

Personal Contacts: The Key to Successful Networking

When the word "networking" is used, we tend to think of upwardly mobile college graduates with a bursting day timer in hand chatting up the competition at business meetings, conventions, or workshops.

The average blue/pink/white collar worker disconnects, feeling that they could never be that pushy, don't know enough people to even start the attempt, and that the method only works in competitive business environments.

Wrong!

While networking can, and often does, follow such a scenario, the concept is much broader than that. The premise is that most people find a job through someone they know. It may be a direct referral or, more likely, indirectly hearing about an opening that seems suitable.

Procedurally, networking could not be simpler: contact everyone you know to see if they have any firsthand knowledge about job opportunities. Then contact all the people they know.

Obtain referrals to other people from everyone you contact and in a short period of time, you will have a veritable army of people working with you to find the right position.

An organized approach to this time-demanding but highly effective technique is discussed in depth in my workbook "The Wolf at the Door: An Unemployment Survival Manual" (Authorhouse, 2003). Contact lists in various categories are provided as well as schedules for follow up and strategies for maintaining the strength and commitment of your lists.

For now, let's look at the different levels of networks you can develop.

1. Sizzling Contacts. These are the people you know personally. They include your family, friends, former coworkers, and acquaintances: your barber, your mailman, your doctor, your real estate agent, the guys you see at the golf course, the women at your club, your children's teachers, other PTA parents - anyone with whom you have regular contact.

Often, you need go no further. How many of us obtained our first job through our family or their friends? It is a common occurrence. Look for a moment at ethnic groups and how they operate.

Most new immigrants find a position through personal contacts. Hispanics are famous for bringing in their brothers, cousins, and nephews when there is an opening.

Most companies who hire mainly Spanish-speaking labor never advertise. All they have to do is tell their employees that they need more workers and the next day dozens of assorted relatives show up and they can make their selection.

There are large ethnic communities in different parts of the country: Vietnamese, Armenian, Indian, Korean, Chinese, Irish, Portuguese, Samoan, and Filipino. In almost every group, initial job search is strictly word-of-mouth. Later, as individuals, many workers become culturally assimilated and move into more mainstream jobs but the core of the group, especially those with poor English skills, tend to remain within their original subculture.

There are, for example, airlines whose entire ramp staff at some airports are Pacific Islanders, manufacturing companies where the usual language on the production floor is Portuguese, and supermarkets where the workers (and customers) are overwhelmingly Korean.

Contrast the successful employment rate of these groups with, for example, African-Americans who are very loosely tied to their communities. Until recent attempts by Church and civic organizations, networking was almost non-existent in African-American culture and a consistently double-digit unemployment rate directly reflected that lack of connectivity.

2. Warm Contacts. From everyone you seek out while you are making personal contacts, you try to obtain the names and contact numbers of people they know and if you can use their names as a source of referral. If all the people you directly know, literally dozens, give you a few names to call, you may have well over a hundred names within a few days. Frequently the first and second level contacts are all that is required. Someone you touch will know of something suitable somewhere.


3. Tepid and Cold Contacts. If you are really unfortunate, your circle of social acquaintances is very limited, your geographic area has devastating economic blight, your have negative or limiting personal aspects (prison record, disabilities, a very poor work record), then you may need to expand an extra level or two. Secondary referrals have some potential but the more tenuous the link between you and your friends and the target person, the less effort to help you is likely to be encountered.

When you have exhausted all of your contact lists, unlikely but possible, you are left with the standard job search techniques (classifieds, internet, job fairs, agencies) or cold calling. Cold calls, whether by telephone or, preferably, in person, require you to call or walk into an employer without any introduction, and with no knowledge of any openings.

You are likely to receive many negative responses to your queries but sometimes you just happen to time it perfectly and there is a newly available position that suits you.

While the chances are sobering, you can still feel proud that you are out in the world, taking positive actions for yourself, rather than withdrawing into the sanctuary of home where the odds against success become astronomical.

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About the Author: Virginia Bola operated a rehabilitation company for 20 years, developing innovative job search techniques for disabled workers, while serving as a respected Vocational Expert in Administrative, Civil and Workers' Compensation Courts. Author of an interactive and emotionally supportive workbook, The Wolf at the Door: An Unemployment Survival Manual, and a monthly ezine, The Worker's Edge, she can be reached at
http://www.virginiabola.com