The most creative post of the year

Google Answers is so great and makes Yahoo Answers look so insignifigant. Take a look at how many ways you can legally make 3,000 a month off of a 30,000 a year investment.

http://answers.google.com/answers/threadview?id=535096

Online Poker
Trading Currencies
Flipping Homes
& So much more.

Investment Idea: San Diego Condos

Where to look:

San Diego Condos in the Gaslamp/Downtown.

I have a hunch that downtown San Diego condos are a great place to start looking to make big bets. Many people are bearish on the San Diego housing market and they are justified to an extent. But what is causing this sentiment? Lost jobs? Stagnant growth? Poor weather or government? Interest rates on mortgages? Well they are higher but relatively very low, historically. Is San Diego less desirable today than yesterday?

To the contrary the Gaslamp district is getting better and more attractive. Job growth is healthy. Do the research! It was voted 5th best big city to live in.

No my friends the correction or cheapening of downtown condos is due to excess supply and low demand which comes from an increase of supply or overbuilding by zealous developers. Watch this market. Look for a comfortable bottom or create a comfortable bottom with low ball offers and snatch up these bargain priced condos while you can. Sit out for at least 3 months and study and get ready to pounce on adjustable rate mortgages adjusting upward and an uptick in defaults. This is my theory:

There was an extreme pendulum to the positive in condo prices from 2002-2005. Now that same pendulum is swinging negative due to oversupply, not new land on the beach being built or major job losses. In the next 18 months we will witness the pendulum come back to where the market price should really be, a market derived medium with mid 7 interest rates and personal income growth.

Ex. 2BD 2BA condo at 1100 sq ft.

Peak: $535K in 2005
Predicted Lows Sellers will accept: $365-405K late 2006
TRUE MARKET PRICE: $450-$470K Early 2008

Whether I am right or wrong you have to respect the fact that I have an opinion. Also this assumes no major event changes things such as a 9/11, an earthquake or stock market collapse. Or an event like the Fed cutting rates back down to 1%. If one of this events happens all bets should be off. Stalk this very unique market and prepare to pounce.

700k homes on 70k income

As an avid reader of Fatwallet, I came across an interesting post yesterday. The discussion centered around the brave or stupid owners of $700,000 homes with income in the neighborhood of $70,000 for the entire household.

Read the post here:

Reading post after post one would believe that mortgage interest rates are going to rise to 11% before 2007! My goodness give me a break. You can predict the short term economic future with great success, but you can't predict intangibles. You can't predict the unpredictable. Who could predict $3.20 gas prices five years ago? Who could predict 9/11 five years ago? Who could predict Krispy Kreme tanking in the manner it did? You can not predict the future, but you can make beats that have odds behind them. Listening to media and mass market commentary are like playing the slot machine, the odds belong to the house not you.

And if you are going to bet, do not play the nickel slot machines. Skip the slots if you can. But at least bet using $1 or if you can $5 limits. The jackpots are bigger and the payouts are too. If you lose, you should have gained a costly education as opposed to cry about losing $100.

Propser.com

Not a bad idea if you ask me. Not a great implementation strategy either. More of an eeehh!

At Propser.com, the founders describe themselves as the online market place for people to people lending. I thought about this idea a while ago but lacked the interest or the real know how to implement it but the site is now up and running. Long story short, many lenders/people can lend to 1 borrower an amount of money not exceeding 25K, all while reviewing the perspective borrowers credit worthiness and group affiliation for an agreed upon interest rate. However I see business slowing down for this company for one specific reason. Savings rates. When potential lenders have the opportunity to make 5%+ guaranteed in a savings or money market accounts, why would they risk their funds to make up to 8% with a person that may or may not pay them back?

Pop Quiz Should you:

A. Lend $300 to Joey Tuffguy, with a C+ credit score, for "business supplies" to make a potential 8% per annum?
B. Place $300 in a big bank of the US savings account and make a sure 4.75 per annum?

In other words savings rates are too good to enter into a lending situation with a stranger that may or may not pan out. I saw one borrower asking $600 to pay his rent, with a poor credit rating, whhoooaaa!

Plans for prosperous improvements:

When this site begins to offer bigger loans, from more informed and risk tolerant lenders, for borrowers/people in bigger payout businesses such as house flippers that need 120 day loans, then the potential for success will increase. Higher interest can be charged and there is a more win/win potential.

Housing Bubble Ready to pop? Not for me!

I had a revelation today and it is really simple. For those of you in real estate for the investment of it, whether you flip, buy and hold, get cash flow or a combination of the two I have some advise for you. In Real Estate as in life you have two choices.

A. You can wait for the RE market to correct itself.

or

B. You can increase your income and correct the RE market.


Ask John Mackey how much his life would change if gas went to $7 a gallon. Ask Angelo Mozilo, if he takes his kids to the movies only on matinee times. Do you think that if Toll Brothers sold their homes for 1.67 million instead of 1.71, their bottom line will be in the red?

My advice to you is learn to earn more and "mass media econmoic concerns" will not concern you. Sometimes the most basic concepts are the hardest ones to grasp!

Orange County Real, Estate

Ok, they made me an offer I could not refuse. Recently I was offered a sweet commission to do SEO for a small remodeling company in Orange County, California. The company, a small remodeling firm that thrives on sales derived from phone calls. As the money starts coming in and organic page rank begins to take place, I plan on sharing the keys to my success and even the website so that you can follow. But lets just start by saying, I started a quick blog by the name of www.orangecountycabinets.net , a couple of other legitimate tricks, keyword campaigns and link exchanges that work on increasing page rank and whalah, here comes the calls.

The deal I cut? I guranteed the owner 25 phone calls per month. If I hit my mark each month, I get paid $300 per phone call. To ensure a low budget but effective quality control, I ordered a cell phone whose number is only for people that find his website via the internet. Keep your fingers crossed and send me any SEO tips you have learned along the way. I thank Thumb's SEO and NYC Money for giving me a great start a few months ago.

Hey what happened to Thumb?

Option Arms: Investors Should Know

It's been a long time.... I shouldn't have left you..... without a tight beat to step to.....

- Timbaland & Aaliyah

Negative Amortization Loans

I dont know about you but all I have ever heard about Option Arms is well, negative. I am not here to convince you to go out and get a negative amortization loan for a real estate investment but for those of you that dont know how they work I want to give you a macro look at the investment. The Wall Street Journal had a great article covering this. Think of it this way and very simply:

If the deferred interest is less than the appreciation of the home, you win.

If the deferred interest is more than the appreciation of the home, you lose.

However the greatest benefit to a negative amortization loan is the cash flow of the loan. I could spend the next several minutes explaining why so many investors exploit this great loan. But if you dont take the time to work out the numbers, then how will you ever know if the loan is bad or not? I urge you to study this loan, its good and its bad.

Key Secrets to make the ARM a great investment

1. Never buy an investment that doesn't cash flow.
2. Buy your property in an appreciating neighborhood. If the appreciation is at least 3% a year, a real act of "nature" would have to occur in order for one to not make money with this loan. Regardless of rate hikes.
3. Make an interest only payment once a year, and pay the min payment the other eleven.
4. Set a limit interest rate. Of course if you get in at a 6.2% interest rate, and rates are rocketing upward, make a limit according to your return projections.
5. This loan works best on cash flowing apartment buildings.


Love it or hate it, the option arm is here to stay and many investors take advantage of it.

Judith Levine's: Not Buying It, Part I

I was recently approached by an industry insider who sent me a copy of the book, Not Buying It: My Year without Shopping, by Judith Levine. I just started reading the book and I will write a full review to come in Part II. This woman conducted, by choice, a social experiment of buying nothing for an entire year beyond necessities such as food, basic toiletries and pre 1980 utilities, no wI-FI baby! This is interesting, considering that so many Personal Financial Blogs serve to teach people how to either save money, make money, show off the many they have made and even still what they intend to do with the money they plan to make.

Could I go an entire year without purchasing consumer products such as my iPod, cell phone or custom made English spread collar shirts! Of course I could. I have friends that cant go a day without a cell phone, let alone a year. Its all about mentality, but it is also an extreme luxury to be able to do so. But even more importantly, this goes against my Hummer sized consumerism which I would use to become even more efficient. Below you will find a list of my Hummer Size Wish List.

My Consumerism Wish List:

1. $7.00 gasoline. I did an entire post on this one.
2. Increased sales tax: Money to go to schools and police only
3. More organic/natural foods: Government to subsidize production. Less chemicals and preservatives in the food. Better Food equals less medical cost in the long run. Better health at the root of the problem not maintenance at the end.
4. More public space fees: Parks, Beaches, Lakes, Forrest? That will be $9 please! At least they will be cleaner and less crowded. Unless you have special pass
5. Driver License Minimum Age: 19. Sorry that's the rules, but hey you cant afford the gas anyway!
6. Cell phone rates, double. Too many cell phones being used for to little productive reasons. Lets raise the rates!
7. Movie Makeover: More features at the movie. Two for Mission Impossible 3: $25, 2 shrimp pastas $40: , and a foot massage $90, getting it all done in 2 hours, priceless!

What a world!

Online Fashion Consulting

The web has offered the consumer masses so many wonderful advancements to use such as email, e-commerce, databases, information, VOIP phones and the like but there are so many areas, where it still comes up short. Suppose your business if prepared perishable food. How and why would someone buy your cookies online when they can't see, taste or touch them? There are always early adapters and those that like to try new things, but getting the flood gates open to masses for such specialized businesses are difficult to do on the web. And the list does not stop with just perishable foods, what about service related businesses like landscaping, plumbing, legal and tutoring? The web has a cruel way of making the smallest 2 person outfit look like a legitimate deal, and who is to say that is a bad thing, except when my basement gets flooded and I need someone with real experience that wont turn a $200 problem into a $3500 headache.

This brings me to the world of online fashion. Its not hard to drop $25 on a Guess t-shirt, because we all know that an XL will turn into a L over time and we dont expect more than 3 high fashion wearings of any one t-shirt anyway. But when attempting to buy a 2 piece business suit without first trying it on, there in lies a problem. A picture of a model in the suit just wont lead me to spending $400 because I like the color.

Yet, this presents an opportunity to use the web for a service that is information rich and needs live pictures to be really beneficial. Imagine trying to learn how to play basketball with just words and graphics, no video of live players. I have a consultant that is in the fashion industry. Even moved from L.A. to NYC to be closer to the action. I am in talks with him to start his own website that is full of content such as tying ties, fashion trends, color selection, every modern man's basic needs and updated fashion tips. He currently blogs but has little time or motivation to take it too seriously. And no knock to the Queer Eye, but not every guy dressed fashionably has an allergy to women. The guy knows fashion well. However, what we have proposed is making sure that we can exploit the web for all it is currently capable of. For this reason the site will be rich with video content, not just diagrams and text of tying a tie, for example.

The only issue we are having is the one of considering how the site will generate revenue. Should it come from advertising such as Google Adsense? This may take away from the image he is going after. Should the site get money from referrals to request service? This may help but there is not much one on one help he can do for people in Wyoming as he lives in NYC. The most lucrative opportunity which I would like to strive for is the intellectual property/celebrity play. Give quality information away for free, in an effort to get a following and sign a deal for professional distribution/exposure. Why not package a quarterly fashion consulting DVD for a big name retailer, or a regional luxury car dealer, or as an online sales promotion. Do you have any ideas?

Apartment Buildings: Big Boy Investing!

RE for the Big Boys
For anyone interested in making real money, you must consider buying apartment buildings in great cities. All day everyday, if you are reading this blog, you have probably heard all the scary news of how the housing market will burst. Bust or boom the greatest investment in real estate has to be commercial real estate. Commercial apartment buildings (5+ units) to be exact. These investments are ones I consider to be bubble proof but not fool proof. Remember the two most important rules of buying real estate.

Investment Rules
1. You make money when you purchase, not when you sell!
2. The greater the barrier to entry(inventory, location, price), the greater opportunity for making money. That's why Los Angeles, San Diego, New York and Boston are so expensive. Anyone can buy in Texas, but that means that anyone can also develop there too. More competition means less scarcity. Less land means greater demand. Simple econ 101!

Personal Case Study
I found a great little 5 unit apartment building in Los Angeles. The cost is $865,000 for 5 one bedroom units that all come with a loft. When purchasing an apartment building the barrier to entry is gigantic for the average person. Think of it, in order to purchase you need at least 20% down payment. There has to be a reason why getting admission to this party is so difficult. The answer has to be, because of just how very lucrative it is. I recommend these high barrier to entry markets only because home prices may or may not go down, but one thing nearly every investor can agree on is that rents are very, very low! Nearly 2.5 to 1 when compared to mortgages of like kind properties.

The Math
This apartment building is great because it presents a condo conversion opportunity. The market will stand selling these units for $300K when you can purchase each unit for $173K. You add about $30K to each unit for upgrades and conversion costs and you can do the math. A nearly $500K payday. I am searching for a lender that is willing to give better finance terms on the LTV, but I'll end this posting by saying the big boys own commercial real estate in tough to get into areas.

Tips (use loopnet.com)

• Commercial Real Estate is difficult to get into, but also lucrative. Consider partnering up. It is better to make 25% of $100, then 100% of $10.
• In high barrier markets, remember to negotiate. Make money on the buy not the sell, this will sustain a price correction.
  
• Consider your exit strategy before you enter. Income, condo conversion, flip.
  

Work the math on a deal I know very well. Address: 7120 S. La Cienega, Inglewood CA 90302. Use Zillow.com, (does not work), price paid was $535K about 9 months ago. Use $54K for fix up and holding cost, while rents more than cover the new note. See current listing price on loopnet.com here. Not bad huh?

$1,000,000 follow up to Deymond Lashley

You have to love the internet, the blogosphere especially. I received a very colorful reply to my what makes one rich rant of a couple of days ago. In the response Deymond Lashley goes on to tear apart my entire posting as being less than critically thought.

Deymond goes on to say, "Don't quit your day job, unless it involves critical thinking (not your strong suit). "

Ok to be honest I often soften blows from my truest opinion because i feel that if I were to say what I really felt, I would offend too many people and be deemed too radical. Well Deymond, congratulations you have caused me to come out of my shell and I dedicate this to you:

Rich in 2006:

1. Owning a mortgage(home) does not make you rich. I dont care how much equity you have in the home, unless that money is working for you, all you have is a cash flow from your pocket into the bankers pocket.

2. Petty salaries does not make you rich in 2006. No matter if you do it by yourself or with a partner, making $150K a year does not make you rich. Dont even mention your salary until you cross $175K by yourself and have your company afford you a housing and car allowance.

3. Savings of $350K or less does not qualify you as rich. Money in the bank, is the same as money in the tank.

4. The legal definition for wealth "and these definitions are outdated"

1. a natural person who has individual net worth, or joint net worth with the personÂ’s spouse, that exceeds $1 million
   
2. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;
   

How do I define wealth? Simply, speaking from a purely financial standpoint, when you have the means to leave your everyday life tomorrow, without making any apologies or preparationss to do so and settle in another country for more than a year, then you are rich. This means you don't need to sell your house, it will just be. You don't need to cash in your 401K, that money was for your grandkids graduation gift. You don't have to sell your business, it will run with or without you. Until you have the capacity to do these things, you are not rich in America you are simply above average.

The overall point I am trying to stress is stop thinking of wealth as the number, $1,000,000. Think past that mental roadblock. For years it had given me problems until I begin to study wealth and lifestyles. $1,000,000 is a number, don't think of it as a goal, think bigger or at least more quantifiable. We are often limited to our own minds. I hope this helps.

For Profit Idea: iElderCare

Business Type: Elder Care for the 21st century

Estimated Start Up: $Varies - $5K- $25K

Where: Local markets at first, with potential for national or regional growth.

Concept: Many families are seperated from their aging parents because of many reasons such as a new job on a different side of the country. Nursing homes and In home nurses are not always needed and can often be very expensive. What if that parent is fairly active, by senior standards, but needs help with errands, prescriptions, meal preparation and household cleaning? No nursing degree needed, just common sense, basic first aid training, basic domestic skills and some certifications that can be obtained over time such as CPR and the like.

So this has probably been done many times, what makes this idea different?

Now add to this technology components such as ability to record these meetings between the new age" go-fer" and the loved ones to the people that are footing the bill. Such as the use of real time web cams, online to do list, digital video and or pictures, mp3 recorded conversations for quality control, video conferencing with the family. Very simple technology that is not currently exploited in this field.

Service
Essentially this service would contain common task such as grocery shopping, light cleaning, food preparation, prescription assistance, doctor visits, cell phone tutorials, new product purchases and other tasks completed as requested by the elderly person that does not need a full time nurse, but rather a 3 hour per day for 4 days a week assistant.


Users:
1. People priced out of the full time elderly care and nursing homes
2. Fairly active seniors that need minor assistance
3. Family concerned but geographically unable to visit as often
4. Lonely seniors

Compensation:
1. Pricing models vary depending on services and areas, but read this clip from a CNBC article,

In fact, the U. S. General Accounting Office says that nearly 40% of people age 65 now will spend some time in a nursing home. The federal Health Care Financing Administration projects that spending on nursing home care will rise from about $94.1 billion now to $125 billion a year by the end of 2005 and $330 billion by 2030.

The average annual cost of a private nursing home is now about $55,000, or $150 per day -- with many facilities in large cities costing more than $65,000 a year. Those costs can add up quickly, and Medicare does NOT cover them -- except for a few days in a skilled nursing facility after a hospital st

$1,000,000 and still not enough?!

What defines someone as being rich in 2006? For simplicity's sake, lets focus on financials and skip the intangible gifts of health, wisdom, family and the like. I dont skip these things lightly, rather I am speaking from a money, asset and income point of view.

Scenarios

Does income make one rich? If so, who amongst these people are rich:

1. A 30 year old man who brings home $10,000 a month and has $7500 a month in expenses. After all this person is making $120K a year.

2. A 42 year old woman who lives at home with her parents to trim expenses, pays no rent and makes $3200 a month from wages. No rent, good public transportation...good life?

3. What about the twenty something couple with no kids, bringing home $7500 a month in income? No kids, own a home, 1 cat, 1 dog and perfect health.

4. A young professional entertainer, making $350K a year. Has celebrity and access to the finer things in life, at least the things capitalism tells us are finer.

I submit to you that while all of the above situations are favorable in their own light, none of them are rich. I honestly believe people in general, investors or even money smart people lack basic financial intelligence. So many new investors and people working for their money constantly think that making $1,000,000, will change their life. Think of this, average household salaries in Los Angeles is in the 40k's. A person making 40K a month does not even clear 1/2 of a million, yet because they have not hit the magic million dollar mark, they are not considered rich? This person makes what the average person makes in a year in one month. Yet, we get stuck on the concept of 1,000,000 dollars.

I have said it before and I stand by it today. A million dollars is not what it used to be. There are cars that cost more than that. In fact you should not be able to call yourself rich with a 1 million in the bank as 10 million is the new million. But on the flip side we must shift our thinking from wanting to be rich, to that of having our needs taken care of and the ability to exercise our wants. Let go of $1,000,000 and start thinking one of two ways, think like a billionaire or think about being happy; A million dollars is so lukewarm.

Conclusion

Mentality makes one rich.

For Profit Idea: Zillow.com

Have you tried zillow yet? If not I suggest you do and before you head there, let me first tell you about the site. The site describes itself as, Zillow.com is an online real estate service dedicated to helping you get an edge in real estate by providing you with valuable tools and information. The site I must say I love it. There have been many critics of the site because they proclaim that the Zestimate, or quick home price appraisals are typically not accurate. Read the L.A. Times article:

But for those math geeks that want precise numbers, hire a freaking real estate appraiser and quit complaining. These are probably the same people that argue about the difference between their Toyota Camry and the Lexus ES 300 is leather seats. Ok, lets see how many heads turn in your Camry. Or lets see where the valet parks their Camry in relation to the Lexus, but I digress.

The current tools of looking up taxes, historical purchase prices and utilizing google mapping technology is great in and of itself. Oh what short memories people have. Do you realize what a difficult process each of these features would have been 7 ears ago? However I do have an idea that would solve the critics complaints and add stickiness to the site, upping its resell price. It would require a quick login, which would establish users for future sell, like MySpace, Skype and every other hot web site.

Business Improvement Idea:

Zillow should add a "Ziki" sub price option to its homes zestimates. Ziki, is another way of saying wiki, but with a Z, as Zillow does, in which users could add their knowledge of not a specific house, they already have that capability, but rather a specific neighborhood or zip code. Once lets say 5 ziki prices are collected, they would begin to appear under the Zestimate. This would afford the site to have more up to date numbers than it currently does. The site can not be all things to all people, but I love it and can't wait to see what the sites of tomorrow will bring.

At Larrin's for Profit Ideas, we dont make a lot of the products you buy, we make a lot of the products you buy better.

Why we should blame ourselves, for broke friends!

In life its so easy to compare ourselves to our friends, classmates, co-workers, people at church or even people we see on tv. Please don't act like I am the only one. I am going to give you a quick quiz, if you are guilty of any of these then this post is for you. If not, then read the follow up.

Quiz

1. Have you ever compared the car you are driving to the car of someone in your social circle and said, a. my car is better, b. if i lived at home with my parents, my car would be better or c. she is 8 years older then me so when I get to be her age my car will be better.
2. Have you ever watched a lifestyle show like Cribs and said, so and so's house is not as big as celebrity #5, therefore he is a poser?
3. Have you ever talked about a buddy for buying a knock off accessory? "That was a fake Coach bag, I would never!"
4. Have you ever said to yourself that if I had the money that friend #3 had, I would have turn that $100K into a million six times over.

Lesson
The point i want to make here is this. Its not enough to just stop comparing yourself to your friends and colleagues. The next level of higher thinking deals with creating a plan that will broaden the spotlight to not just you but to your loved ones as well. Any person of any real substance, will do their best to succeed so that they can bring their loved ones with them. Any person worthy of being labeled a friend, should desire that their success is not complete, until they have set their friends up as well.

Real Life Examples: I was a classmate in college with a guy named Todd Ramasar, agent to an all star NBA player. They were friends/teammates in college. It was not enough for this player to get an NBA contract and buy his friend a car, he made this guy his agent.

I have another friend whose brother plays for the Denver Broncos. How easy would it be for this guy to buy his sibling what she wanted and tell her to never worry about a thing. Instead he offered her an opportunity to manage one of his business ventures.

What about the nepotism in politics, like the Bush Cheney relationship. What about the Bush-bush relationship? Think about almost any internet startup, the co-founders of Google, what about the Walton family of Wal-Mart fame. Dont you understand it is lonely at the top, so its necessary to bring your friends with you.

In conclusion I will leave you with this point. Becoming successful as an individual is the equivalent of getting to second base in baseball. You are in a good position to score, but until you get your friends to score as well, you have failed to realize your potential in life. The next time you at your friend's shortcomings you should see your shortcomings as well, because if you were in a position to bring her up, would that not be the best?

Progress

Its been a while but focus is a bastard to complete. Not to mention doing taxes the legal way, while attempting to squeeze every penny from every legal business expense. But nevertheless I am making good progress on my money making ventures. Recently started a small consulting service in which I hire skilled professionals on a contract basis. This is going well, but I have my eyes set on two really big targets. As I have said in the past, I have given up on trying to make a couple hundred more a month and set my sights on bigger fish. In the coming days I ll post some of my victories.

2006, things to think about

I have one goal on my mind. One new years resolution. One thing I want to change about my life and quickly. What is it? Passive income. How can I get it, like yesterday? Passive means, once the system is in place, the money just comes on in like a royalty check. What can I do to make this happen? I have a few ideas, and owning a vending machine aint one of them. Neither is owning stocks, as that would be portfolio income, can you say Kiyosaki? I hope to detail my path in 2006 to get passive income in 2006, enough to take on my monthly bills. I will win, I will attain my goal. I will start with a milestone of $1500 and I am giving myself 90 days to do it. Follow me as I write about my progress. If you have any ideas dont be stingy, share the wealth!