Real Estate and Reality State

I have been involved in the real estate industry for over 21 years. It is the most rewarding and the most frustrating career that you could possibly be involved with. You must have the empathy required to help people into a family home and at the same time help them sell their property.

The two words I used here was HOME and PROPERTY, why? Well when purchasers are seeking a home it is an emotion decision and when they are selling their home you need to take that emotion away so hence it is a property. Don't get me wrong it is an emotional decision to sell any family home but what we are trying to do here is put the emotion on the new purchase and take away the emotion from selling.

I will be honest I found it difficult to deal with families and the fluctuations in market values, especially in the past three years with the global market crashing. The problem is everyone wants a bargain but for some reason their property is worth more to them.

So I decided along time ago to step away from the family home property market and concentrate on the investor market.

Well when I was 22 years old I had 80 properies which were purchased from a mortgagee on foreclosure sale, no money down yes 100% finance. It was easy 20 years ago as in New Zealand we could see from the previous 80 years, historically that property values compounded at 10% per annum, so hence doubled in value every 8 to 10 years. This was awesome as 100% finance or leveraging on the day worked out at 50% leveraging in 8 to 10 years time.

I specialised in Leasehold, it was basically land that was owned by church groups or The Anglican Trust Board that was purchased by them in the late 1800's. They would give a legal title to the lower socio econimic individuals to allow them to rub elbows with the rich and go to better schools and be part of the church. You owned the leasehold tenure and paid them ground rent at say 1 pound per annum for the next 21 years. Every twenty one years they would review the rent at 6% of the land value and fix it for the next twenty one years.

So here is where it got interesting, I had a large leasehold association (a group of leasehold owners) nearly all retired that were not happy about the rent reviews. They actually didn't have a case as they had it sweet for the previous twenty one years, where the ground rents were between $1,000 and $1,800 per annum each per title and where about to go to the new market rent of 6% of the new land value yes $28.000 to $45,000 per annum.

At around this time I knew it was a problem, so I got a a double page spread from a local news paper just launching itself. I created a big headline

THE LEASEHOLD DILEMMA

DO YOU OWN A LEASHOLD PROPERTY AND DO YOU HAVE A PROBLEM?

I then had an 0800TERRENCE phone number so they could all call me to tell me their problems. The phone went nuts. I had every single property in the leasehold sector under my control. With 100% vendor paid advertising it cost me nothing to advertise. The commission for selling them was awesome. I started a campaign and did open homes to get investors there all at the same time.

My selling point was:
IF YOU COULD STEAL THIS PROPERTY TODAY WHAT WOULD YOU PAY FOR IT?

THE VENDOR HAS A PROBLEM, THEY DON'T KNOW WHAT IT IS WORTH CAN YOU HELP THEM?

I had people come to me at the open homes and say

NOBODY WANTS LEASEHOLD, WHO WOULD BUY IT?

I would say - the funny thing is someblody already owns it so thats not a problem, what would you pay? They would say I would have to steal it to want to own it. So I let them steal it. It was in their mind, buyer perception.

I educated all my vendors on how I would get offers for them and that it was a problem and that I need investors to believe it was a bargain.

All the vendors agreed and I won a lot of respect and referrals.

I made close to $45,000 per month for four years in commission between 1998 to 2002.

Don't you just love hearing these success stories. I helped them with their problem by creating a problem which solved the problem.

http://terrycuthbert.com