2019: The Year of the Learner

I just read an interesting blog called the “Future of Learning” off the Medium blog site by Niklas Göke.

The point of his essay is that learning itself is a skill and the person who can learn how to learn will be “exactly the person an unpredictable world needs.”

He and Emilie Wapnick both suggest that if you can learn to learn across multiple domains, you can then specialize faster when you choose to do so or remain a generalist, standing out against the world of specialists.  So what do they advise?

Don’t change if you are a generalist, don’t narrow your focus to get ahead in your career.

Challenge yourself to grasp concepts of broad variety, like microbiology, auto repair, knitting, and aerospace.

Learn the difference between what is important and what is unimportant and combine many bits of information into a broad picture of the world. (Yuval Noah Harari)

What will the skill of learning get you? Well, if the knowledge you learn in a university education only lasts 5 years and companies rise and fall all around us very quickly, learning to learn will help you become what Emilie Wapnick calls a “Multipotentialite.” These are people who can synthesize ideas, innovate, rapidly learn, stay flexible, stand out from the specialists, and be adaptable.

In an unpredictable world with many complex problems and to much information, being a person who can be receptive to multiple perspectives and hold them in your head all at once, keep an open mind, one that allows new information in and allows the picture of reality to evolve and become coherent will be very valuable in the future.

So in 2019, Let’s all vow to be learners. Keep an open mind, build a real picture in your mind, and invest in it.

books on bookshelves

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Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

 

 

 

 

 

 

That Shiny Top Matters

Texture and Color

Even if you don’t cook, but you are interested in successfully fixing and reselling a home as an investment, you need to develop a passion, or at least an interest, in countertops. It seems to be the first thing everyone wants to change in their house or in one they are looking at to buy. Either it is not the right material, it is not the right color, or there is just not enough of it. When it comes to kitchen countertops, the lumber yard has almost as many choices as the cereal isle in the grocery store. There are the different materials themselves; and then beyond that, there are textures and colors that add to the variety.

Dusting and Resale

I wonder why the kitchen counter has become such a focal point. I have my own ideas. First, I think it has to do with cleanliness. Cracks and porous materials can hide bacteria. But I also think it has to do with visual deprivation, a response to the minimalist approach to decorating.

When I was a child, I loved to walk across the unfenced backyards behind my grandparents’ house to the house of a little old lady who lived on the corner. She always let me in to admire her china dog collection. The house was full of more than dogs from all over the world though. It was filled with beautiful objects in ceramic, plaster, iron, wood, glass, and cotton thread. There were figurines of dogs and birds, glass fronted cabinets of vases, crystal, salt cellars, pitchers, and salt and pepper shakers in all shapes and colors. There were heavy door stops shaped like sheep or bears and small dollied tables.

All these wonderful things needed to be dusted. I think that is why the maximal style of furnishing bit the dust; too much dusting.

A Focal Point in Open Concept

Cleaning is much easier when there is less to work around. But, maybe it is because we have become visually deprived by this turn in furnishing fashion that we focus so much attention on the kitchen counter. In many open-concept homes, the kitchen is the center of the living area. The cook wants to be a part of the action, and so the kitchen is exposed. It is not the couple of added on rooms behind a wall off the dining room like it was in my grandma’s day. As the kitchen counter surely is a useful area, the minimalist can take pleasure in its expanse and beauty and still not have “too many things,” just one beautiful thing in the middle of everything to look at and display.

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The kitchen counter even made the Wall Street Journal this week. In an article by Robyn A. Friedman on December 26.

“Quartz is All the Rage”

The variety of countertop materials has grown like the number of cereals in the cereal isle at the grocer since 1960. Formica laminate is not the only choice any longer. There is granite, quartz, agate, glass, wood, and for those with a more industrial taste, stainless steel.

“Quartz is all the rage now,” Bill Feinberg of Allied Kitchen and Bath, tells Ms. Friedman. Quartz is an engineered stone that has the look and feel of natural stone and comes in all colors, even white. It resists scratches and stains and never needs to be sealed because it is nonporous. It costs about $50.0 to $100.00 a square foot, including installation.

Granite is found all over the world and comes in many colors with interesting vein patterns. There are many finishes to choose from including, polished, honed, leathered. It is pre-sealed for durability. The price for granite is $50.00 to $75.00 a square foot installed.

Glass is available in many thicknesses and colors. It is nonporous, can be backlit, and display a work of art between its layers. However, it will chip and crack if you drop the canning pressure cooker on it. Glass costs $200.00 to $300.00 a square foot installed.

Agate slabs are a work of art all by themselves and they are semiprecious. Agate can be backlit as well. An agate countertop will cost you $300.00 to $500.00 a square foot installed.

Butcher Block is also available in many kinds of wood from unfinished European Walnut to Ash and Birch. Wood offers warmth and natural beauty. It can be unfinished, oiled, or stained. For the price of a sheet, see your call hardware store.

Topping it Off

Whether your own tastes follows the minimalist or the maximalist anyone in the business of remodeling a house for resale, needs to keep their ear to the ground about what is the latest in kitchen counter fashion. You need to take an interest in the kitchen counter and the choice of and cost of the materials used to top it.

Reference: Friedman, R. A. Countertops Limited Only by Your Budget and Imagination. WSJ December 26, 2018.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

 

Downtown by the River

If you watch much of the show “Buying Alaska,” you will be very familiar with the phrase, “It has a view.” In Alaska, it is all about mountains, glaciers, and sometimes a lake, but in many cities the desired view involves an urban river. According to an article in the Wall Street Journal, “The Latest Housing Hotspot Is Downtown and by the River.” I think that San Antonio already knows this.

“Urban Energy and Natural Beauty”

Ceclie Rohwedder, (WSJ, December 6, 2018) writes about couples in Minneapolis, Washington DC, and Omaha trading in their country homes for homes in remodeled power plants and other industrial buildings in downtown areas along urban rivers, buildings that have been turned into modern condos. What does their new home offer, she asks? “Urban energy and natural beauty” one couple says.

I must agree. Watching a river is like watching a fire, its mesmerizing. But it is interesting and beautiful too with boats, birds, and fishermen. And those old buildings left over after industry has moved on, I have often looked at them, the old brick warehouses and mills that sit along the elevated freeways of our cities, the ones with the fading billboards high up on one corner, and vacant windows. What is the architecture like, I’d wonder? They look so sturdy. They are not going to come down soon, but who is going to use them.

Americans Just want to Live Downtown

Well the city planners, developers, and investors are way ahead of me. They are turning these behemoths into housing with a view, housing near culture and sports arenas, and water. Young professionals and retirees alike, it seems, crave community and walkability along with a touch of nature. And Americans overall (this year anyway) want to live downtown. An urban riverfront close to downtown offers work, culture, and play.

These are the areas that are drawing people to look at the old and want to make something new out of it. It is the buying and the fixing up of the building that is the investment. But investors are doing this all over the country and people are buying.

So, even if you are not up for buying and remodeling the old paper mill down by the river, when you are looking for a house to buy as a fix-n-flip investment, do not forget to scout around in these riverfront areas of your town. There, in the shadows of the big buildings, might be some smaller projects, homes or shops, more to your liking.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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Merry Christmas Eve

Today is Christmas Eve. Have a wonderful time with your family and friends. Be at peace and be thankful. Make Christmas cookies if you haven’t already.  If you have, eat them and share them with the neighbors. Drink hot chocolate and wine. Work a jig saw puzzle. Make a paper maché ornament for next year. Think about Christ, God who came as a delicate baby to redeem us. Be a wise man today or a wise woman. Take a gift to someone today. And I wish you many blessings in this holiday season.

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Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

 

 

Cold Storage 101 or −101°

Looking into the future, where should you put your money or your efforts if you are looking for a commercial real estate project that can offer decent returns. Perhaps you should think about one of the things we Americans, and people and animals everywhere, really need, food.  According to Esther Fung, WSJ, the best performing real estate investment trusts this year are in the area of food storage —cold food storage.

Right now, according to Rick Romano, head of PGIM’s global real estate securities, “cold storage is about as defensive an investment strategy as it gets.” American Realty Trust, the only publicly traded cold storage real estate investment trust, has risen 50% since the start of the year.

He also says that only 2% of groceries are bought online, but as people work longer hours and avoid long commutes and extra trips to the grocery store, that number could rise.  If it goes up to 5% or 10%, he suggests, there will be a continued demand for cold storage facilities in densely populated urban areas.

Cost of Building or Remodeling for Cold Storage

Cold storage might be a very good investment for an investor interested in commercial real estate construction or a commercial fix-and-flip project.

I know there are cold storage facilities operating near me, near the train warehouse area, because I have a friend who went to work there and in a cold storage facility, even the office space is a cool 40°.

According to Joshua Everage at A-N-C- cold storage, investment management firm JLL says the “cost of building a new cold storage facility is $150 to $170 per square foot, compared to $50 to $60 dollars a square foot for regular warehouse construction.  Most cold storage facilities are new builds, but you can expand or upgrade existing warehouse space at a cost of $60.00 to $70.00 a square foot. That is about 40% of the cost of building a new facility from the ground up. ”

−Everage also says that when you are looking at costs, consider the usual items, like location, but also the unique requirements of a cold storage facility, the freezing equipment.  Do you need a unit that can flash freeze product like fish, or a chiller? There is a difference in cost.  Also consider the height of the docks, the height of the building itself, exterior and interior wall finishes, and plumbing requirements. For a free cold storage construction guide, visit http://www.anccold.com/blog/cold-storage-construction-cost and download a guide.

For help coming up with a lender or someone willing to tackle the project, call me. I’m based in Austin, but I can meet you where you are at, in Dallas, Houston, or San Antonio.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

References:

Everage, J. 2017. Cold Storage Construction Cost Per Square Foot. Blog, at http://www.anccold.com/blog

Fung, E. WSJ, December 2018, Real-Estate Stocks Beating S&P 500 for First Time Since 2015. https://www.wsj.com/articles/real-estate-stocks-beating-s-p-500-for-first-time-since-2015-11545134402

 

Smile: It’s Winter

In case you thought Winter started the week before Thanksgiving when we had our first snow storm, or at the lowest point the stock market hit this month,  I’m here to set you right.  Winter starts today. Today, December 21st, is the Winter Solstice and it is the shortest day and longest night of the year.

At the North Pole, the sun never rises on this day.

This is not the coldest day of the year.  The northern hemisphere will continue to get colder until the days get long enough again to have a warming effect.

So get ready to celebrate the days getting longer from now on until that longest day, the summer solstice, arrives in June.  See http://www.holidayinsights.com

Happy Winter Solstice.

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

ball ball shaped blur bubble

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What is $358.00?

Answer: Price per square foot for a luxury home in TX.

It is true that you can put a price tag on anything, well maybe not everything, but you certainly can put one on a luxury home. According to the 2018 Texas Luxury Home Sales Report by the Texas Association of Realtors (TAR), the median price for a Texas luxury home  remains unchanged at $1.35 million.

Houses priced over $1 million dollars are considered “luxury” and 5,123 of them sold across the state of Texas from October 2017 to November 2018, up 11.5% from the previous year. The average price per square foot for a luxury home was $358.00. This is up 2.5% from the first ten months of 2017. A median house in Texas carried an average price tag of $128.00 per square foot.

From January to October 2018 the average time a luxury home spent on the market in Texas was 94 days, a decrease of four days from the same timeframe in 2017. It makes sense that the bigger price would lead to a longer time on the market because there are few buyers who can afford the higher price and it takes longer to get a big loan.

For comparison, here are some statistics courtesy of Realtor.com.

Austin-Round Rock, TX, Median Price $350,000. Days on the Market, 65.

Dallas-Fort Worth – Arlignton, TX Median price $335,000. Days on the Market, 58

Houston-The Woodlands-Sugar Land, TZ – Median Price $350,000. Days on the Market, 65.

Killeen-Temple, TX, Median Price $200,000. Days on the Market, 68

San Antonio-New Braunfels, TX – Median Price $285,000. Days on the Market, 66.

For more on luxury houses, read “Livin’ Large: Texas’ Robust Luxury Home Market,” a Tierra Grande article by Real Estate Center Senior Data Analyst Joshua Roberson. https://www.recenter.tamu.edu/news/newstalk-texas/?Item=21652.Read more at Texas Association of REALTORS

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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A Boost for the Credit Score

News from Wall Street Journal reporter Anna Maria Andriotis this week tells us that the major credit reporting companies will soon be adding data from consumers’ utility and phone bill paying history to their credit reports. This is a move that she says will likely boost the credit scores of millions of people and increase traditional loan approvals. According to Andriotis, Experian will start factoring in this payment information early next year.

Consumers who have low or no scores because they have no history of borrowing and subprime borrowers whose scores are currently lower than what some lenders require will likely see their credit scores go up.

Some of these changes are coming about because of pressure the banks themselves have placed on the credit reporting industry and its regulators because they want to make more loans.

To make this work, people will have to opt into the new program and link the bank accounts they use to pay their phone and utility bills to Experian, allowing the company to track their monthly payments.

The credit score shows a borrower’s ability to responsibly use and pay off credit cards and loans, and in the future other types of bills.

The five factors that are most important in determining a credit score according to Thad Merrill are

an individual’s payment history,

the amount of outstanding balances,

length of credit history,

the types of accounts, and

the number of recent credit inquiries.

Factoring in utility and phone bill payment histories will help with at least the length of credit history.

If you are interested in borrowing for real estate investment, hard money lenders offer alternatives to those who have bad credit. They can also offer faster access to financing with less stringent eligibility requirements. However, investors may pay a higher interest rate over a shorter period. Hard money lenders are semi-institutional lenders who are not required to adhere to the policies and regulations that are required of banks. These requirements really tightened up after the 2008 financial crisis. If  traditional lenders are looking to lend more money, it might be because they think the good economy “still has room to run.”

Good economy or bad economy,  it is always a good idea to improve your credit score, particularly if you want to invest in real estate.  A good credit score opens up more financing options and will speed up the loan approval process, and you won’t miss out on that great deal.

Patrick@InvestorsLendingSource.com

512-213-2271

access adult blur business

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Reference: Andriotis, AnnaMaria, WSJ December 18th, Want a Better Credit Score? Soon, Your Cellphone Bill Could Help.

 

 

A Job: Still A Good Investment

The U. S. Bureau of Labor Statistics offers projections that can help you choose where to focus your education and experience if you are looking for a job during the decade 2016 to 2026. Although fast growing, the two top growing careers on the list (Solar photovoltaic installers &

Wind turbine service technicians) are pretty specialized, so there are not a lot of people in these jobs. However, according to the Bureau of Labor, the number of jobs in the areas of solar and wind power will double by 2016 demonstrating the increased interest in alternative energy.

Five of the top ten fastest growing careers are in health care. This make sense because our population in the US is growing older. As the baby boomer generation (those born between 1946 and 1964) grows older, they will not only leave the work force, but require more health-related services. Some of the careers that projected to grow by 2016 include

Home health aides

Personal care aides

Physicians assistants

Nurse practitioners

Physical Therapist assistants

The other two careers that are fast growing are related to the needs of the science, technology, engineering, and math community are include

Statisticians

Software developers, applications

Mathematicians.

What does all this data mean to you? Well if you are looking for a job, Houston is a good place to look and if you are looking for a particular type of job your outlook for finding a job is good if you are looking in the top ten fastest growing occupations.

I read once in a book on money, that the best investment is “a good job.”

Patrick@InvestorsLendingSource.com

512-213-2271

Austin, Texas

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New metropolitan area employment data for November 2018 are scheduled to be released on Friday, December 21, 2018 at 10:00 am (ET)

U.S. Department of Labor, 2018

Doing the Math: Purchase, Rehab, Refinance, Cash Out

The markets have been extremely volatile lately and they say the anxiety meter has shot up to screaming level.  However, according to Caleb Silver, Editor-in-Chief, Investopedia is not predicting a major market decline.  And, whether the market is up or down, I am here to help you find ways to put your money into other types of ventures, like fix-n-flip real estate projects big or small. It works like this:

  • You Purchase
  • You Rehab
  • You Refinance
  • You Cash Out

Silver also says in his daily e-mail that “Seasoned investors have learned to moderate their expectations and build their portfolios to endure all kinds of markets.  It takes discipline and a lot of learning to do that well, and even the best of them still get their faces ripped off now and again (a technical expression for suffering massive losses). Still, having unreasonable expectations is the first step to setting yourself up for disappointment.”

Ah yes, setting yourself up for disappointment: I remember Christmas mornings when I was a child as a time of too much expectation.  By the time Christmas morning came around, my expectations were sky high and no matter what great present my parents or Santa Claus brought me, I was going to be disappointed because nothing could live up to the fantasy in my head.  So, the day was never as much fun as it should have been.

I’d say that Silver (good name for an investment geek) is trying to warn us . He says that Vanguard (a massive money manager) recently surveyed its customers and found that their expectations were way off from its own market predictions. Vanguard found that the average retail investor expects stock to return more than 10% a year on average and people with their money in pension funds expect 7.5% average annual returns.  Unfortunately, Vanguard expects a 4.6% return on stocks.

So put in your time studying so that you can put your money to good use making more money for you.  Think about your options and don’t freak out. As Silver says, “When the Anxiety Index picks up, volatility tends to follow.”  But as Friday’s Investopedia headline read  “REMAIN RATIONAL.” (see investopedia.com)

Here is a rational option to study:

Purchase, Rehab, Refinance, and Cash Out of a Multi-Family Building

Loan Requirements

  • Min 5 units
  • Loan Amounts – $250,000 – $5,000,000
  • Interest Only – 2yr Term
  • 1st Lien Position Only
  • No Prepayment Penalties
  • Up to 80% for Purchase and Rehab
  • Up to 70% for Refinance and Rehab
  • 55% for Cash Out

Borrower

  • Min FICO 670
  • Full Recourse
  • DSCR / Occupancy – No requirements while being rehabbed
  • Min Liquidity of 9mo of debt service + 20% of rehab budget

Appraisal Requirements

All loans require a full appraisal with internal property pictures and dated within 120 days of loan origination.

Lending Areas

All major metro areas and small market areas nationwide.  Non-lending areas include rural and high-risk areas.

Patrick@InvestorsLendingSource.com

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