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Sensationalism is everywhere and it's hard to know what's real, anymore. The economy is tanking, the marketing noise is deafening, and you just don't know what tomorrow will hold. This site is dedicated to a no-hype retelling of what's working for me in real estate, business, and life. Welcome.

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Archive for January, 2009


Is Now The Time For Getting Started in Real Estate Investing?

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The bloom is off the rose.  The real estate market is in the tank.  Foreclosures are popping up all over, real estate values are down, and you can’t find a house that will cash flow.

So Real Estate Investing Sucks!  

Or does it?

If you bought property in the last few years (say 2005 – 2008), you might be thinking that real estate investing is no fun, you got sold a bill of goods by a guru, and you have no idea how you’re going to make money on your properties.

It’s easy to get impatient, especially if the current market downturn has treated your real estate portfolio to a royal trouncing.  This might be a good time to bear in mind the adage: Don’t wait to buy real estate, buy real estate and wait!

Of course, it’s no fun to get rolled by a downturn in the market.  If you want to avoid that happening again, and use the market to your advantage next time, I suggest you learn to take a look at market cycles and understand how they work.

However, even if you bought at the exact wrong time, don’t give up on real estate investing.

Look at the current disaster of a market as a great opportunity to get started in real estate investing (again!).

A lot of investors make money by being contrarian.

When people are fleeing the markets, they buy in.

That’s exactly what’s happening right now, so this might be a great time for getting started in real estate investing if that’s what’s going on in your neck of the woods.

Even if it’s not going on in your area, it’s going on SOMEWHERE – find out where and invest there!

However, you definitely want to make sure that you can afford to buy property before you invest.

What should you look for in your deals if you’re getting started in real estate investing right now?

1) Appreciation Potential.  image

Generally speaking, appreciation is your largest profit center when you buy property.  It beats out the other 3 profit centers (cash flow, debt reduction, and tax savings) pretty handily in markets where it is utilized.  The challenge is that generally speaking high-appreciation market places (like California, Florida, Manhattan, Seattle, etc.) tend to have expensive property and it’s hard to find cash flowing deals there.

However, there are some great markets in Texas and other southern states where property still cash flows and goes up in value all the time.  As you explore the markets you want to invest in, consider the potential for property appreciation over the next five years.  You don’t want to bank on this appreciation, since it’s not a sure thing, but markets do have cycles, and if you can buy and sell at the right time, you stand to drastically increase your profit.

2) Price or Terms.  A good price means 80% of the “market value” of the home or less.  The more volatile/flat/falling your market place is, the LOWER I would insist on getting the price in order for the investment to make sense.  Good terms are things like buying the property with a lease option or subject to the existing financing so you can get in with little/none of your own money and credit.  (For information about investing with your IRA or getting private investors who want to do so, check out my IRA Real Estate Investing Series at

3) Cash Flow.  What is cash flow?  In many markets around the country, this is an elusive beast.  It seems that here in Seattle you have to put 40-50% down on a property in order for it to cash flow.  In other areas of the country, you can break even month-to-month even when a building is 100% financed.

Personally, I like for a property to be able to cover all of its own expenses, including vacancies and repairs.  This is easier to say, than to actually find these deals, but here’s the situation:  What if you are doing well financially right now and want to make an investment?  That’s great, even if the property has negative cash flow, you earn enough that you can feed it, right?  So, no problem.  However, what happens if you lose your job, get sick, or become disabled?  You may no longer have the disposable income you need to feed your alligator (alligator is a nickname for property with negative cash flow) each month.  If you have equity you could sell your property, but you may not want to do that, especially if the market is depressed when your financially emergency hits, like it is right now.

For those reasons, I like to see a property make a good rate of return from its cash flow without my having to feed it each month.  If you live in an area where negative cash flow properties are the norm because property values are so high, you can consider your options.

  • Use a higher down payment to get your mortgage payments down.
  • Have a large emergency reserve fund to cover the negative cash flow on the property for several years, so you’ll be safe in the event of a loss of income.
  • Invest in another part of the country.  Personally, this is what I do…

If Your Personal Finances Allow It, Consider This A Great Time To Get Started In Real Estate Investing

Raw beginner or experienced pro, don’t let the current market conditions rattle you.  Interest rates are low, buyers are scarce and sellers are motivated.  Don’t worry about putting together a “power team” or spending too much time creating your perfect entity.  Now’s the time to go out and take action!

Talk to real estate agents (like me!), call FSBO’s and FRBO’s from the newspaper, get a mentor if you need one, and start taking action – a little bit every day – that will move you in the direction of your goals.


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Although I’m not the biggest fan of Suze Orman, it’s hard for me to pass up the opportunity to read some well thought-out financial tips from a nationally recognized advisor.   If you haven’t heard, you can download Suze’s latest 2009 book for free from Oprah’s website until Thursday, January 15 at midnight.  You can also buy it for $10 at

Suze Orman’s Advice on Saving For College

Since I have been working on setting up baby Blake’s college savings recently, I skipped to page 160 to read her chapter about college savings.  It was focused primarily on “What to do about college now that your college savings tanked when the stock market took a dive…” There was a lot of discussion about loan options and financial aid that didn’t really interest me.

What did interest me was the following few points – my personal takeaways from the chapter:

  1. Keep your child’s college savings 100% invested in stocks until your child is 14 years old.  Between the ages of 14 and 17, gradually divest until none of the portfolio is in stocks.  – My husband and I have talked about this one, he feels that 100% in stocks is still too risky.  My rule of thumb is: Don’t put anything in the stock market that you can’t afford to keep there for at least 5 years.  With that in mind, I might start shifting the portfolio balance toward bonds/cash a little earlier than this.
  2. Use a 529 Plan.  She mentioned Coverdell plans, but 529’s were the emphasis.
  3. Don’t get a private loan for college under any circumstances.
  4. Save for your retirement first and THEN put away an appropriate amount for your child’s savings.  Don’t put your child’s college savings ahead of your own retirement, in terms of saving priority.
  5. Visit to get more information on saving for college.

I actually did visit this website, which had a handy-dandy college-savings calculator.  It told me that I should be putting away $602/month for my child’s college savings.  Not far off from the $641/month I calculated on my recent article on financial planning for college.


A lot of the advice in the book seems to be working under the assumption that you have been negatively affected by the recent stock market crash and are experiencing job loss, panic selling, getting behind on your house payments, going through a personal credit crunch, or experiencing other problems with your finances right now.  It’s pretty much a back-to-basics tome coming from a conservative, “the sky’s not falling, but you do need to be safe” perspective, encouraging you to pay off your credit cards and make sure you have health insurance.

This may be timely for some families, but I did not find it especially relevant or inspirational.  However, it’s free, so I can’t complain.  Thanks, Suze!  Be sure to pick up your free copy and let me know what you think!




Vulnerable Time For Charities, Donate Time and Money to the Ones You Support

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When the economy’s down, non-profits suffer. 

When we talk about wealth building, our money, our spending plans, and retirement savings, we very often forget to mention a tiny little thing called CHARITABLE GIVING.  For some, this is really a small or non-existent part of their budget.  For others, it’s a lynch pin.  Many people believe that they should give 10% of their income to their church in the form of a tithe.  Many who don’t believe that feel that they are “off the hook” and not “required” to give, so they don’t.

Overall, though, Americans are fairly generous givers, and many of us enjoy the feeling of satisfaction that comes from supporting groups that we believe in, religious or not, with our time, talents and money.

However, when the economy is down, giving suffers, too.  Many of us take the position that charity begins at home, and when we’re forced to pare down discretionary spending, spending on our charities is often one of the line items found on the cutting room floor.

I recently had the opportunity to mastermind with the pastor at my church about this phenomenon and what could be done about it.  I warned her ahead of time that as a business owner, I was coming in with my “sales and marketing” hat on and looking at this thing as an entrepreneur.  She concluded that was an entirely appropriate approach, since the church really is a small independent enterprise very much like a business.  It just doesn’t happen to sell a product or service.

Ways For Churches To Make and Save Money In A Down Economy

We decided that the church could do a couple of things to increase its bottom line:

  1. Increase income by increasing membership
  2. Increase income by increasing donations contributed by each member
  3. Decrease expenses by cutting programs
  4. Decrease expenses by using “sweat equity” and volunteer labor from people who would be in a better position to donate time than money.

In the course of our discussion, I was also able to draw upon research I had done on fundraising for a speech to college students I delivered in Chicago last year.  In my research I discovered that many people become involved in charities through their friends and associates (personal invitation/referral) and that many people chose to volunteer their time first, before contributing significant amount of money to a cause.

Therefore, in our situation, we decided that action steps would include:

  1. Surveying members to see how the church was meeting their needs and how it could improve it’s service offerings to members and participants.  (This would let us see which programs were most and least valued, as we decide whether anything would need to be expanded or cut).
  2. Educating members to the financial challenges facing the church and asking them if they are personally willing to do anything (volunteering, giving more money) to help ameliorate the problem.  This will help us get a better sense of what resources will or will not be available to us in the upcoming year (Revenue forecasting).
  3. Adjusting our social events to incorporate more education about church programs and educational activities.  This will allow us to consistently draw uninvolved members more deeply and consistently into church activities, and help visiting members and friends become aware of what type of programs they will be able to take part in, should they become a member of the church.

At our church it is very important to us that people not feel hounded for money or that they are being “sold” on giving cash whenever they come.  This probably applies to most business customers too.  If you say you want to have a relationship with your customers, you need to find ways to have conversations with them that don’t involve pushing them into buying your next product or service.  Instead, focus on providing good old-fashioned value, human interest, referrals FOR THEM, etc. when you talk to them, and they will be much more likely to view you as a friend than a salesman.  People enjoy doing business with friends, they only do business with salesmen when they have to.

Re-Visit Your Value Proposition

So, we are re-embracing our mission of providing meaningful spiritual experiences, community support, and family-friendly activities to make sure that our congregation continues to have its needs met in full without being pressured to give financially.  In this way, we hope to re-inspire and re-excite people about the idea of giving, as they always do, in a way that is respectful and appropriate for them.



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A Day In The Life of A Small Business Owner

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Ok, I think I’m back – again.

Ben and I both got a viral pink-eye infection that seemed to be accompanied by a pretty severe cold.  Blake was spared.  It makes us very grateful for the invention of Kleenex, Tylenol and indoor heating.  Every time I get sick, I wonder what it must have been like for the pioneers and other people who didn’t know what they would have, if it would kill them, how it spread or how to get better.

So, in 2009 I am very thankful for HEALTH!

Today is “peek over my shoulder” day.   Here’s a list of some of the things on my To-Do List:

  1. Write a series of 5 posts (2 already completed) on investing in real estate with your self-directed IRA.  This will be posted on our commercial real estate investing blog.
  2. Interview Real Estate Brokers – still have 2 on my list to meet for the first time and 2 to follow up with.
  3. Do real estate coaching for some single-family home investors.
  4. Put up some affiliate marketing ads on some of my other web sites.  Have been doing this to generate some extra cash flow.  I wrote 10 articles recently, one featuring a little pitch for a dog training manual and have garnered 1 sale so far – $68.
  5. Review test results from Google Analytics… I am comparing two sales letters for my how to knit dog sweaters ebook.  If one is clearly more successful than the other, I can improve my conversion rate.  I already get plenty of traffic.
  6. Meet with bookkeeper and property manager to write quarterly investor updates for some of our commercial properties.
  7. Read The Long Tail by Chris Anderson.  I recently got a copy of this after learning more about long tail and small business.
  8. Deposit rent checks and pursue collections from my tenants.

It’s not exciting – but it’s real, it’s honest, it’s transparent.  There will probably also be a nap and lunch thrown in there somewhere.

I’ll try to make it more sexy next time.  Maybe I’ll sip margaritas, have a party by the pool, or go sky diving, but the truth is moving forward is about small steps every day.  It’s also about FOCUS – something I need to work on a little more. 😉  But that’s for another post.



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About Emily Cressey

Emily Cressey is a real estate investor and licensed real estate agent living in Seattle, Washington. After graduating Phi Beta Kappa with an Economics degree from UNC-Chapel Hill (Go Tarheels!) her focus has been on building business for cash flow and investing in real estate for wealth. If you have questions about real estate investing, personal finance, or would like some flat-rate, affordable advice on one of these topics. Please fill in the Contact form.