You Know What You Know,You Don't Know What You Don't Know

When asked about their childhood, most people respond about all of the difficulties they had or about how bad their parents were. I fall into that category as well. We all have stories to tell or situations that happened that molded us into to people that we are today.

My story mostly revolves around my parents. They cared about us kids and, although it may have been a little misguided at times, they did love us kids. I grew up in Niles, Michigan during the 70's and times were tough. The 5 of us were crammed into a small 800 or 900 sqft house. My parents were high school graduates, but really did not have a lot of skills. To date, I am the only one from my family to actually graduate from college. My mom worked at the JC Penney in Niles after Grants closed up, which was another retail store in the same location. After getting out of the Air Force, my dad worked in a factory called Clark Equipment in Buchanan until they started to move their operation down south somewhere. When that happened, it left my dad unemployed in a lousy job market with little knowledge of how to do anything other than the factory work he was just laid off from.

You Know What You Know

With the job market the way that it was, we were on Food Stamps and Welfare. I remember standing in Government Cheese lines with my parents (great tasting cheese by the way!) and I remember that we had Powdered Milk because we couldn't afford the real thing. Most of the time for dinner we would have fried bologna sandwiches, spaghetti or anything else that was inexpensive to make. Because of the money situation my family was in, I was in the free hot lunch program at school.

Growing up this way, it was all that I knew, it was all that my family knew. You struggled to pay bills and put food on the table. Good paying jobs were a myth when you grew up, and when you did have a job, you had to work hard at what ever it was in order to keep it. I knew that I didn't want this when I got older, but I had no idea how I would avoid it. You know What You Know, You Don't Know What You Don't Know.

You Don't Know What You Don't Know

As I got older and into high school I always tested out at high levels in math. The problem was, I had no idea how to enhance the way I studied. I was on my own. My parents knew nothing about the subjects I was taking, let alone the proper ways of studying. So, despite "testing out" well, I struggled at times. But I knew I needed to stick with school, even though it was VERY frustrating. When I saw successful people, they all seemed to have college degrees. So, I figured my goal should be to go to college and get a degree. "You have to go to college!" my parents would say. They were right, but I really had no idea why at the time. They wanted something better for me. I wanted something better for me too. I just didn't know what. You Don't Know What You Don't Know.

So, off to college I went. My grades in high school were average, something like a 2.6 GPA. The only money that I had was from the paper route that I delivered for the South Bend Tribune and from the part time job I had during my senior year. I saved and saved and saved. I had about $3,000, which was not nearly enough to pay for college. And, since my parents had no money to contribute but made just enough to disqualify me for certain types of aid, I applied for Student Loans and Pell Grants after being accepted to South Western Michigan College (SMC) in Dowagiac and meeting with financial aid counselors.

I had no idea what I was doing. I had no idea what I wanted to do. I felt that I had some good common sense in my thought process, and since it seemed that 90% of business decisions seemed like they were just good common sense, I decided business was what I should study. SMC made a lot of sense. They had an extension program with Ferris State's business program, so, I could get a 4 year degree and stay local so that I did not have to pay room and board like I would have to if I went away for college. I was still a little short on money for books and such, so I worked 2 jobs to make up the shortage while going to college full time. I remember one semester where I took 21 credit hours while working a 42 hour schedule between my 2 jobs. I would get up at 6 a.m. and go to bed at 2 a.m. Nothing but work, college, studies and trying to build a relationship with my then girlfriend and now wife Kimberly.

You Know What You Know, You Don't Know What You Don't Know

I know that, in part, I am where I am today because I knew I wanted something different than what I was used to as a kid. But I also know, that if it were not for programs like welfare, food stamps, pell grants and student loans, that I would not be where I am today. When you grow up in the kind poverty type of environment that I did, it is all you know. You know nothing else, because that is all that the people around you know. You Don't Know What You Don't Know.

When I hear political candidates talking about cutting these programs, or worse, eliminating these programs. It's upsetting.

It's upsetting because these programs enabled me to lift myself up.

It's upsetting because there are people out there that want what I now have and people are trying to stop them from getting it.

It's upsetting because these candidates might as well be saying to me "We wish you were still at that level of poverty you were at as a kid."

Maybe these candidates that are against these programs just don't care about people like me. Maybe they just Don't Know What They Don't Know, which is all the more reason that I will not be voting for them.

Think about who you are voting for, and what that person stands for, before casting your vote on election day.

My vote will be cast for people that are trying to help those less fortunate. I hope that's where your vote lands as well.

What Is Buying Power? Is Now The Right Time To Buy?

I get asked all the time "Is Now The Right Time To Buy?" or "Why Should I Buy Right Now" and in the past I have given a response similar to this:

"Now is a great time to buy because rates are low and prices are low. Historically, when rates are low, then prices are high. Or when rates are high, prices are low. So, this is truly a unique market in that you have the best of both."

Don't get me wrong, I think that is a fine answer to give, especially since it was the answer that I have been giving to people. And, to some people, I think that answer resonates. They get it. But to others, maybe not so much. So, today I thought I would take a different approach and really throw out an analysis as to if it is a good time to buy or not.

It is no secret that prices in real estate have taken a hit. According to numbers released from the NAR (National Association of REALTORS), at the end of 2009, the national median selling price of a home had reverted back to what they were in 2003. But since then, nationally our median selling price is up .7% this year and if you look just at Midwest numbers, that number grows to a 2.2% increase over last year.

So it appears that we have hit bottom on price and could be back on the incline again.

Now, let's look at interest rates.


Today I traced interest rates all the way back to 1963, I didn't feel the need to go back any further to prove my point. Since 1963 we are currently at our lowest point in mortgage interest rates which are currently at 4.375% as of this morning. As you can see by looking at this chart that I made, with only a couple of exceptions, interest rates go UP a lot faster then they go down. And since interest rates are in the low 4's, an area they have not been before, it would make sense that they may not be going down any further. Or at least not much further. It would also make sense, that interest rates will start to climb, even if it is by only 1/2% or by 1%.

So, why does this make a difference? After all, a low interest rate is a low interest rate, right?

True, but the low interest rate along with the low price effect something called buying power. People love to get the most for their money. And right now may very well be that time.

As you can see by this chart that I made, the payment stays pretty much the same throughout. But look at the interest rates and the buying power. As the interest rates go up, you cannot afford as much house. This was all based off of an original purchase price of $100,000. If the original purchase price were even higher, the difference would be even greater.

Now, take that prices are back at 2003 levels which means that $100,000 house today may have been a $115,000 house or more 3 years ago, and it is easy to see how great today's Buying Power actually is.

Hopefully that explains to you why the current real estate market IS the right time to buy, especially since prices and rates may start creeping back up again.

9 Tips For Buying A Foreclosed Home

1. Budget Carefully- Don’t let a small price tag lure you into a quick deal. Questions you should be asking yourself: Do you have the money for extensive repairs? If you plan to rehab the home and then rent it, can you afford the house if you don’t find a tenant?

I like to tell people to get a number in your head as to what you think it will cost to rehab, and then add 50% to it. There are always hidden problems that will need to be addressed. If you budget for that extra 50% and never use it, then its profit. Work backwards from what you think the house would be worth fixed up and start subtracting repairs, realtor fees, title work, taxes, and the purchase price etc. You might find that you will be upside down when it is all said and done.

2. See The house for yourself. Many investors have made mistakes by buying “sight unseen”. If you are an out of town investor, have someone from the area that you are wanting to buy in go out and take a bunch of pictures and give you a description of what they see.

3. Look at the neighborhood. Do your homework and check out crime rates and foreclosure rates in the neighborhood that you are looking to buy in. High crime and high foreclosure rates will make it difficult to recoup the cost of repairs due to falling home prices in that area. High crime rates may make it difficult to rent out.

4. How long has the house been empty? The longer a house sits, usually, the more damage there is. Vacant homes have a tendency to be vandalized, so check the walls and plumbing carefully. People like to break into vacant homes and take the copper plumbing.

5. Was it winterized? Do a very careful inspection of the plumbing and look for breaks and cracks before turning on the utilities. If the house has been winterized, when was the date? I’ve seen homes that were not winterized until March. By then, it may have been too late.

6. Look at the landscaping. Look for hanging braches on trees that are up against the roof, it could be concealing a roof or shingle problem. Look for grown up vegetation around the siding and base of the house. Vegetation holds in moisture making it a prime Termite area. Sometimes improper grading around the house can cause water problems if the house has a basement.

7. Have the home inspected. Expect a whole laundry list of things to show up, but what you are looking for are major defects. The big things that are going to cost lots and lots of money. Roofs, electrical, plumbing, foundation ,mold, furnace, AC, and well and septic if not on city water and sewer. A $300 to $500 investment in inspections can save you from making a huge mistake that could cost you thousands.

8. Consider buying a HUD home. The Department of Housing and Urban Development is sitting on 10’s of thousands of homes and usually sell at bargain prices. Local government and owner occupants get first shot at buying these, but if they pass on them, investors are allowed to bid on them. Investors account for about ½ of the HUD home purchases. HUD homes come with a property condition report, but still get an inspection of your own. Beware though, HUD homes usually have extensive damage to them but the trade off is a better price.

9. Don’t expect to profit from a quick sale. People that buy a home and put very little into it expecting a large payoff are generally fooling themselves and may find little profit and big headaches down the road.

St Joe County Absorption Rate

One of the things that I get asked a lot is "how much inventory is on the market?" One of the best ways to demonstrate this is to figure an "Absorption Rate."

To figure the current Absorption Rate, it really needs to be broken down in to different categories and areas. Afterall, the west side of South Bend is going to sell completely different then what Granger is going to sell. From there, you can break it down in to price range to get even a better, more accurate number.

To keep it simple on this post, I just broke it down in to price ranges and did not break it down in to areas. How these rates are figured, is I took the number of homes sold in a category for the last six months and divided by 6 to get an accurate monthly number. I then took the number of available listings in that category and divided by that monthly number. That gives you the number of months of "Available Inventory" that is currently on the market. These numbers are through the end of September.



You can also break these numbers down in to subdivisions if it suits the purpose of what you are trying to accomplish. If you are interested in knowing a particular area of St Joseph County, please shoot me an email at Barry@PrudentialOneRealty.com and I will try to get the numbers together for you. One thing to note though, if your house is really a $90,000 home and you see that it currently has 14.15 months of inventory, bumping it up to over $100,000 which has 10.22 months is not going to make your house sell faster. It will cause the opposite to happen. Over priced homes do nothing but sit on the side of the road in this market.

Where Was God On 9/11?

This is something that I found on another website called "Swap Meet Dave" so I cannot take credit for it. But it is a very nicely written piece:

Have you ever thought, "Where was God on 9/11 when the World Trade Center and the Pentagon were attacked?" Well, I know where my God was on the morning of September 11, 2001, and He was very busy!

He was discouraging people from taking those four flights. Together they could accommodate more than 1,000 passengers, yet there were only 266 aboard. He was on those four flights giving the terrified passengers the ability to stay calm. Not one of the people who was called by a loved one on one of the hijacked planes mentioned that passengers were panicked, nor was there any screaming in the background. And on one of the flights, God gave strength to the passengers to overcome the hijackers.

God was also busy creating obstacles to prevent people who worked in the WTC from getting to work on time. The work day had begun, more than 50,000 people worked in the two towers, yet only 20,000 were at their desks. On that beautiful morning, God created scores of unexpected traffic delays, subway delays, and commuter train delays. A PATH train packed with commuters was stopped at a signal just short of the WTC and was able to return to Jersey City. And far more meetings were scheduled elsewhere than was usual.

God held up each of the two mighty towers for a half hour so that the people on the lower floors could get out. And when He finally let go, He caused the towers to fall inward rather than to topple over, which would have killed so many more people. The foundations of six surrounding buildings were demolished by the fall of the towers, but God held them up for many hours until all the occupants were safely evacuated.

And when the WTC and Pentagon buildings went down, my God picked up almost 3,500 of His children and carried them to their home for all eternity. He also sat down and cried that 19 of His children could have so much hate in their hearts, that they did not choose him, but another god that doesn't exist, and now they are lost forever.

He sent people trained in dealing with earthly disasters to save those that were injured. And he sent in thousands of others to help in any way they were needed. And He brought people together across the world in a way that moved thousands to tears and hundreds of thousands to prayer—and caused millions to turn to the one true living God.

He still isn't finished. Every day He comforts those who lost loved ones. He is encouraging others to reach out to those who don't know Him or believe in Him. He is giving the leaders of our great nation the strength and conviction to do the right thing, to follow His will, not a popular poll.

So if anyone ever asks, "Where was your God on 9/11?" you can say, "He was everywhere! And, in fact, he is everywhere today and every day." Without a doubt, this was the worst catastrophe most of us have ever seen. I can't imagine getting through such a difficult time without God at my side. Without God, life would be hopeless.

Some More Thoughts...
As you might know, the head of one company survived 9/11 because he took his son to kindergarten.
Another fellow is alive because it was his turn to bring donuts.
Another lady was late because her alarm clock didn't go off on time.
One was late as a result of being stuck on the NJ Turnpike because of an auto accident.
One more survivor missed his bus.
One spilled food on her clothes and had to take time to change.
One's car wouldn’t start.
One went back to answer the telephone.
One had a child that dawdled and didn't get ready as soon as he should have.
One couldn't get a taxi.
The one that, struck me was the man who put on a new pair of shoes that morning,
went to work by his usual way but before he got there, he developed a blister on his foot.
So he stopped at a drugstore to buy a Band-Aid. That is why he is alive today.
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Now when I am stuck in traffic, miss an elevator, turn back to answer a ringing telephone...
all the little things that annoy me....
I think to myself, this is exactly where God wants me to be at this very moment.
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Next time your morning seems to be going wrong, the children are slow getting dressed, you can't seem to find the car keys, you hit every traffic light, don't get mad or frustrated; God is at work watching over you.
May God continue to bless you with all those annoying little things and may you remember their possible purpose.

Some Strange Quotes..........By A Muslim

"I Believe in the redemptive death and Resurrection of Jesus Christ"

"I think I have an ongoing conversation with God...I'm constantly asking myself questions about what I'm doing, why I am doing it"

"I believe that Jesus Christ died for my sins and that I am redeemed through him. That is a source of strength and sustenance on a daily basis. I know that I don't walk alone and I know that if I can get myself out of the way, that I can carry out in some small way what he intends. It means those sins, that I have on a fairly regular basis, hopefully will be washed away. It also means a sense of obligation to embrace not just words but through deeds the expectation that God has for us"

"What was intellectual and what was emotional joined, and the belief in the redemptive power of Jesus Christ, that he died for our sins. That through him, we could achieve eternal life-but also that through good works we could find order and meaning here on Earth and transcend our limits and our flaws and our foibles- I found that powerful"

"I found myself drawn-not just to work with the church, but to be in the church. It was through this service that I was brought to Christ"

"Kneeling beneath that cross on the South Side, I felt I heard God's spirit beckoning me. I submitted myself to HIS will, and dedicated myself to discovering HIS truth and carrying out HIS works."

"Let's make clear what the facts are: I am a Christian, I have been sworn in with a Bible. I Pledge Allegiance and lead the Pledge of Allegiance sometimes in the United States Senate when I'm presiding"

Those are all quotes from our current President, Barack Obama.

As part of President Obama's spiritual advisory panel, Rev. Joel Hunter said "He gets a devotional every day on his Blackberry and so I'm going through the Gospel of Mark with him." Hunter continues and says "months and months ago, he invited me to do daily devotionals and I just decided it would be more consistent to go through a Gospel with him so that I could talk about Jesus."

According to Fox News, a recent poll conducted by Pew Forum on Religion and Public Life earlier this month, showed that 18% say that President Obama is a Muslim. The article says that Obama IS a Christian, but when asked in the poll, only 34% of the respondents claimed that he is a Christian while 43% say they "do not know" what religion our President follows.

The President has said that he has NEVER been a Muslim. Like myself and many of you, The President has said that there was certainly a time where he had no belief structure, but he now believes in Jesus Christ. So why is there a question of what faith he follows? Is it because he has a "different" name? Is it because he is African American?

Most of us have had a time where we did not believe. Some of you reading might be in that category now. But for those of us that do believe, how would you feel if that large of a percentage questioned your faith?

I Have A New Favorite Baseball Player!

I can't hold it back any longer. I have a new favorite baseball player and his name is..........Johnny Damon.

After last season was over and the free agency period began, it seemed as though the Tigers were going to take a step back and throw in the towel on the season before it even began after trading away Curtis Granderson and Edwin Jackson and letting Placido Polanco go. It seemed as if they were in a payroll cutting mode.Then, just when I thought this was going to be a lost season, the competitive juices of Mike Illitch started flowing and he gave permission to sign a top notch closer in Jose Valverde along with an aging outfield veteran named Johnny Damon. Damon had been talking the Tigers up even when he was trying to negotiate a deal with the Yankees. At the time, I figured that he was just trying to leverage a position to get a better contract with the Yankees. And, maybe that was what he was trying to do, at least that is what sports writers were saying.

But the more I listened to him talk, the more I got the feeling that he did actually want to come to Detroit to play baseball. He seemed to know a lot about the city and the sports teams that play in Detroit, in particular, the Red Wings. Once again, people were saying that he was just saying the right things to get a contract or saying nice things because he wanted to leverage an offer from Detroit against other teams that he would rather play for.

Damon has always had kind of an odd reputation in baseball. After all, in Boston he nicknamed himself and some of the players as "The Idiots". So I was not sure what to expect with this signing other then they got a guy that could hit for a solid average but did not have a great reputation on defense. And, once again, that he was kind of kooky.

But as the season has progressed, I saw how when a young player like rookie Austin Jackson would make a mistake, he would be the first one to go up to that player to explain what just happened and why. And when he himself made a mistake, you could see him explaining what happened and why so that others wouldn't do the same. All while still professing his love for the city of Detroit, the Tigers and its fans. Still, the writers were saying "he's just a one year rental, he will be with another team next year, he's just doing this for next years contract."

As the yearly trading deadline approached, there were rumors flying around that the Tigers were going to trade him for a young prospect since the Tigers seemed to be out of playoff contention. When asked about the trade rumors, Damon said things like "I understand what the Tigers might have to do, but I still want to be here and if they do trade me, I would like sign with them again next year.....I love this team, my teammates, the city and the fans." Still, the writers were saying: "he's just saying the right things to not rock the boat, he would much rather be playing for a playoff spot."

Just this last week, the Tigers placed Damon on "Trade Waivers" which is something that every team does with almost every player on their roster. This time of year, the only way a player can be traded is to be placed on an option waiver system. If the player is claimed, then the Tigers can negotiate a trade with the team that claimed him. If they cannot negotiate a trade, then they can pull the player back off of the waiver wire. If no team claims the player, then the team can trade him to whatever team they want. When the Tigers signed Damon, they gave him a limited no-trade clause. There were 8 teams that he had to give the names of at the time of signing the contract that he could be traded to. It is unknown which 8 teams those are, but we now know that the Boston Red Sox were not one of those teams. Boston put in a waiver claim on Damon which meant that the Tigers either had to negotiate a trade with Boston or pull him back off of waivers. But Damon had veto power over the trade since Boston was one of the teams he did not want to be traded to.

Damon had 2 days to think about what he wanted to do. Instantly, he again talked about his love for the city of Detroit, the Tigers, the players and the fans and talked about how he did not want to leave. He again talked about how if he did accept the trade, that he wanted to re-sign with Detroit in the off season. Damon talked about how he understood what was going on and how Detroit might be able to get a good prospect to help out in the future.....but he really wasn't sure he wanted to go back to Boston. He talked to teammates and the front office. He was told by the players that they wanted him to stay. He was told by the front office that he should "do whatever his heart tells you to do". Damon chose to stay in Detroit and reject the trade. Again, Damon said "I love Detroit, my wife loves Detroit, I love the players, the front office and I love the fans." Again, the sports writers are saying; "If it were the Yankees that claimed him, he would be gone....or if it were the Rays that claimed him, he would be gone." They are also saying "He is just positioning himself for a contract next year."

Here is a crazy thought..................MAYBE HE LOVES DETROIT!!!!!

Maybe I am naive. Maybe I am just being a homer. But I believe him! I think he loves being a part of the Tigers organization. Maybe this is something new for the city of Detroit. A city that has been practically destroyed by the downfall of the economy. An area that is depressed beyond belief. Maybe it is hard to believe that someone could want to be a part of that. But maybe he sees hope. Maybe his heart is in a place where he wants to provide some relief to people in the form of entertainment on the baseball field. Maybe he appreciates the respect the front office shows him. Maybe he appreciates the owner that signed him to a contract when others would not. Maybe he likes wearing the "old English D". Is that really so hard to believe??

Well, he has made a believer out of me, and I hope he finishes the year out strong. I hope Detroit signs him in the off season. And if they don't, I will be cheering for him regardless of whatever team he is playing for. Maybe I will not cheer for that team, but I certainly will be cheering for Johnny Damon! In an era when people are grasping for loyalty and honesty, maybe we are actually seeing the real deal in Detroit right now and it is just hard to believe our eyes. I believe what I am seeing right now, and because of it, I have a new favorite player. Thank you Johnny Damon for wanting to be a Detroit Tiger.