tiles for bathroom walls

The walls in your bathroom provide a unique opportunity to make a dramatic impression that sets the tone for your space. Choosing the right tiles and design can add visual interest, elevate your aesthetic and ensure your bathroom is easy to maintain.

The height of your bathroom tiles wall design is another important consideration. The ideal height depends on the room size and ceiling height, the style of tile, and how you plan to use your space. For example, a lower tile height can help make smaller rooms feel more open and less cramped, while a higher tile height can create a more dramatic and impactful effect.

Tiles come in a variety of shapes, sizes and styles, allowing you to experiment with patterns and layouts. However, it’s best to keep in mind that the more patterning you introduce, the busier your bathroom will look. If you opt for a busy pattern like herringbone or basket weave, consider using smaller tiles to keep the overall look balanced.

What are the key considerations when choosing tiles for bathroom walls?

Another way to add visual interest is by utilizing a contrasting grout. This is a great trick for creating a pop of color and drawing the eye around the space, and it’s especially effective with dark or muted colored tiles.

In addition to laying patterns, varying the texture of your wall tile can also make a big difference. A rougher texture will add dimension and depth to your space and can also add a sense of luxury, while a smooth finish can create a sleek, contemporary look. Rougher textures will require more frequent scrubbing, so be sure to consider this when making your decision.

Generally, it’s best to choose one style of tile and use it throughout your bathroom, with the exception of a feature wall or accent. This will create a cohesive look and make the room feel more spacious. However, you can still play with different shapes and sizes by using a mix of large and small tiles or combining busy patterns with classic shapes and solids.

One of the biggest challenges in designing a bathroom is finding the perfect balance between function and style. You want your bathroom to be practical and functional, but you don’t want it to look sterile or bland.

If you’re going with a neutral backdrop, don’t be afraid to incorporate some pops of color with accessories or a bolder tile pattern on an accent wall. Just be sure to balance out the design with other elements like countertops, fixtures and vanities, so you don’t overwhelm the space. The key to choosing the right tile for your bathroom is keeping in mind that it will be a reflection of your personal taste and style. Take your time when selecting your materials, and you’ll be rewarded with a beautiful bathroom that will stand the test of time.

The United States is officially in recession. What is a recession? A recession is a contraction of the business cycle or a general economic decline due to a significant drop in spending and other business activities. Most pundits and politicians will blame the Covid-19 crisis for the recession, but even before Covid-19, the proverbial handwriting was on the wall.

The United States had more than 120 months of economic growth, which was the longest expansion in modern history. Other indicators, such as the negative yield spread on Treasuries (long-term bonds with lower interest rates than short-term T notes), pointed to an imminent turnaround in the business cycle and an impending recession. The only real question was: when and how bad?

Then came Covid-19… If the cycle was to change anyway, Covid-19 acted as a huge and unexpected accelerator to make the recession much more immediate and severe.

Inevitably, during recessions, all classes of real estate, including residential homes and condominiums, will be negatively affected, as lower consumer spending and higher unemployment rates affect real estate prices and times to market.

Here are six costly mistakes sellers of homes and other real estate make during recessions and how to avoid them:

Mistake #1: This will pass and the real estate market will be hot again soon

The first thing to remember is that real estate cycles are much longer than general business cycles. Even if the general economy recovers, which it always does eventually, a typical real estate cycle takes 10-15 years. The cycle has four key stages: upper, declining, lower, and ascending.

Consider the last real estate cycle, which lasted approximately 14 years:

• 2006 – Prices reach the top
• 2006 to 2012 – Price decrease
• 2012 – Prices bottomed out (minimum)
• 2012 to 2019 – Price increase*
• 2020 – Prices reach the top
• 2020 to? – Price decrease

*NOTE: In 2016, the National Residential Real Estate Price Index reached its peak levels prior to the 2006 recession. The real estate market took 10 years to recover.

The way to avoid this mistake is to recognize that real estate cycles take years to run and plan accordingly. Also, no one knows for sure when prices will top or bottom until after the fact.

Mistake #2: Low interest rates will cause the economy and the housing market to recover

Between 2006 and 2011, interest rates (Fed Funds) were continuously cut by the Federal Reserve Board from a low 5% to almost 0%. However, that did not stop the real estate recession and the depreciation of property values.

To be sure, low interest rates made the economic downturn and housing recession less severe and saved some properties from foreclosure, but it still took a painful six years for the housing market to bottom out and then four more years for prices to return to their pre-recession levels.

Some markets had never fully recovered. For example, residential home prices in parts of California, Arizona, and Nevada are still below 2006 highs.

To avoid this mistake, one must realize that while low interest rates help stimulate the economy and the housing market, they do not cure them.

Mistake #3: I don’t need to sell right now, so I don’t care

If you don’t need to sell until the end of the cycle, which typically lasts more than ten years, then you won’t be as affected, especially if you have a strong capital position, limited mortgage debt, and solid liquid assets.

However, it is good to keep in mind that “life happens” and that professional or personal circumstances may change and we may have to sell the property before the recession takes its course.

Additionally, if a property has a mortgage on it and its value declines to the point of being “upside down,” meaning the mortgage loan balance exceeds the value of the property, then your options to sell, refinance, or even obtain an equity line of credit, will be significantly limited.

This does not mean that everyone should rush to sell their real estate if there is no need to, just keep in mind that circumstances can and often do change and ownership options will be affected so plan ahead. As a wise proverb says: “Dig your well before your thirst.”

Mistake #4: I’m selling, but I won’t sell below my “bottom line” price

This is a common and potentially very costly mistake. Generally speaking, every seller wants to sell at the highest price and every buyer wants to pay the lowest price. Thats nothing new. When selling real estate, most sellers want to hit a certain price and/or have a “bottom line.”

However, it is important to understand that the market does not care what the seller or their agent thinks the value of the property should be. Market value is a price that a willing and able buyer will pay when a property is offered on an open market for a reasonable period of time.

Overvaluing a property based on the Seller’s subjective value or what is sometimes called an “aspirational price,” especially in a declining market, is a sure first step to losing money. When a property remains on the market for an extended period of time, maintenance costs will continue to accumulate and the value of the property will depreciate in accordance with market conditions.

Additionally, properties with long time-to-market tend to become “stale” and attract fewer buyers. The solution is to honestly assess your sales goals, including your desired time frame, evaluate your property’s attributes and physical condition, analyze comparable sales and market conditions, and then decide on market-based pricing and marketing strategies.

Mistake #5: I will list my property for sale only with the Agent who promises the highest price

Real estate is a competitive business and real estate agents compete to list properties for sale that generate their sales commission income. It is not unusual for a Seller to interview multiple agents before signing an exclusive listing agreement and go with the agent who agrees to list the property at the highest price, often regardless of whether that price is based on the market.

Similar to Mistake #4, this mistake can be very detrimental to sellers as overpriced properties stay on the market for extended periods of time, costing sellers expenses like mortgage payments, property taxes, insurance, utilities, and maintenance.

Also, there is the “opportunity cost” as the equity is “frozen” and cannot be used anywhere else until the property is sold. However, the most expensive cost is the loss of property value as the real estate market deteriorates.

During the last recession, we have seen several cases where overpriced properties sat on the market for years and ended up selling for 25-40% below their initial fair market value.

The solution is to make sure your pricing strategy is based on the market, not empty promises or wishful thinking.

Mistake #6: I will list my property only with the Agent who charges the lowest commission

Real estate commission rates are negotiable and are not set by law. A commission typically represents the highest transaction expense in the sale of real estate and is typically split between the brokers and agents working on the transaction.

Some real estate agents offer discounted commissions to induce sellers to list their properties with them. But does paying a discounted commission ensure savings for the Seller? Not necessarily.

For example, if the final sale price is 5-10% below the property’s highest market value, which is not that unusual due to poor marketing, poor pricing strategy, and/or poor negotiation skills, it will easily wipe out any commission savings and, in fact, cost the seller tens of thousands of dollars in lost revenue.

The solution is to hire an agent who is a “trusted advisor”, not just a “seller”. A trusted advisor will take the time and effort to do the following: 1) Conduct a Needs Analysis – listen and understand your property’s needs and concerns; 2) Prepare a Property Analysis: Thoroughly evaluate your property and market conditions; 3) Execute Sales and Marketing Plan: prepare and implement a personalized sales and marketing plan for your property; and 4) Obtain optimal results: be your trusted advocate throughout the process and achieve the best possible result.

Finding such a real estate professional may not always be easy, but it is certainly worth the effort and will pay off in the end.

In conclusion, this article has outlined six costly mistakes real estate sellers make during recessions and how to avoid them. The first mistake is not understanding that real estate cycles are long and take years. The second mistake is the misconception that low interest rates alone will create a recovery. Another mistake is not realizing that circumstances can change and not planning ahead. Mistakes four, five, and six relevant to understanding market value, proper pricing, and selecting the right real estate professional.

By understanding and avoiding these mistakes, real estate sellers have a much better chance of minimizing the negative impact of a recession while selling their properties.

There has recently been a change to the standard process a bank would take to help a homeowner who was struggling with their mortgage payment.

Traditionally, in the past, a lender would only offer assistance to a borrower when their home loan became delinquent, a failure to pay the monthly loan payment for three or more consecutive months.

In a typical scenario like this, borrowers might be eligible for traditional loss mitigation methods if they’re lucky.

To clear up some terminology, let’s define loss mitigation as the process of working to stop or reduce any loss to the lender and borrower, in effect, damage control.

Under traditional foreclosure prevention guidelines, in order to receive assistance from a lender, a borrower would have to meet certain requirements.

One of the most important requirements is one where non-traditional methods offer some additional flexibility for struggling homeowners.

Under non-traditional methods, a homeowner does not have to default on their loan before they can receive assistance.

In the past, lenders told homeowners that they couldn’t offer any help until their loan was actually delinquent.

Another significant difference is the actual difficulty that caused the owner to be late. Under the traditional method, the borrower would have to return to work or have sufficient family income to receive assistance.

Under non-traditional foreclosure prevention methods, borrowers may receive a temporary grace period in the event they do not regain full employment.

Many lenders realized that certain occupations have a high probability of employment even though the borrower may be currently unemployed.

Of course, if there is always a downside.

The big problem with the relaxed guidelines is this…

Homeowners who are already in default on mortgage loans have priority over borrowers who are not in default. This results in a large number of both types of borrowers being left behind.

Despite being known as a soccer-loving nation on the world stage, the Republic of Peru, a Spanish-speaking country on the South American continent since the 1820s, has risen to Olympic glory thanks to its international shooters, who have collected a total of three medals in the Summer Games between 1948 and 1992. According to these results, unequivocally, the greatest Peruvian athlete is Edwin Vásquez Cam, Olympic gold medalist.

Edwin VasquezCamera

Edwin Vásquez Cam was born on July 28, 1922 in Lima, the capital of Peru. Encouraged by his father, who was a former shooter, he competed in various shooting contests in Lima and other Peruvian cities. Over the next several years, he spent several hours with his father, Mr. Gonzalo Vásquez, his trainer and best friend. In 1938 Edwin won a school championship, but that was just the beginning.

When Edwin was just 18 years old, he finished first in the Gildelmeister Cup, a traditional event in Lima, defeating many veteran athletes. Since then, Edwin’s ambition was to become one of the best shooters on Peruvian soil. The following year, he was crowned “best shooter” in a major contest. In the late 1940s, Edwin won a home Bolivarian Games gold after winning the continental tournaments.

With limited international experience, in 1948, Edwin Vásquez and his fellow athletes made a trip to compete in the United Kingdom Olympic Games. The South American delegation competed in seven sports: athletics, men’s basketball, boxing, cycling, fencing, shooting and weightlifting. In the British capital, on the other hand, nine shooters from Peru participated: Edwin, César Injoque, Raúl Valderrama, Wenceslao Salgado, Luis Mantilla, Froilán Tantalean, Enrique Mendizábal and the brothers Enrique and Guillermo Baldwin.

Peruvian champion Edwin Vásquez Cam became the first non-US/European shooter to win an Olympic title when he captured gold at the XIV Olympiad Games in London, the capital of the United Kingdom. On that day, August 2, 1948, surprisingly, the Swedish shooter Torsten Ullman was defeated by Mr. Vasquez Cam. A gold medalist at the 1936 Olympics and a four-time world champion (1933, 1935, 1937 and 1947), Ullman had been the favorite to win gold in the free pistol at the Olympic Shooting Championships, a sporting event traditionally dominated by the United States and Western Europe since its inclusion in the First Games in 1896.

Edwin won with 545 points, followed by the Swiss Rudolph Schnyder (silver medal) and Ullman (bronze), both with 539 points. It was a day of national pride not only for Peru but also for the continent. Following Vásquez’s victory, the country became one of the first five Latin American republics to win an Olympic gold medal in the 20th century, along with Cuba, Uruguay, Argentina and Mexico. But within a few years he was forgotten despite his status as an Olympic winner.

Peru did not win another Olympic medal until 1984 when Edwin Vásquez’s successor, Francisco – known as “Pancho” – Boza surprisingly finished runner-up at the Los Angeles Olympics. Prior to the international Games, he had been coached by Konrad Wirnhier, the 1972 Olympic gold medalist, in the Federal Republic of Germany.

Pan American Champion

Mr. Vásquez, by winning the world title in Great Britain, helped his country’s Olympic team win a gold medal at the 1951 Pan American Games in Buenos Aires, Argentina, a world-class competition in the Western Hemisphere. In addition to these awards, he also won many international competitions.

Despite being one of the highest profile athletes in Latin America and the Caribbean at the time, unfortunately Mr. Vásquez and other members of the Peruvian squad, including Julia Sánchez Deze (1951 Pan American gold medalist), did not they could go to Helsinki (Finland) to participate in the 1952 Olympics. For absurd reasons, the then Peruvian dictator Manuel Odría refused to send a national delegation to Scandinavia.

An unknown Olympic champion

Historically, Peruvian Olympic champion Edwin Vásquez is the only shooter from Latin America to have won an Olympic gold medal. In the last sixty years, the continent has sent some notable fencers to the international Games, but none of them have captured Olympic glory. From 1972 to 1984, Helmut Bellingrodt – Colombia’s most outstanding athlete in 1974 – won two silvers. Meanwhile, Mexico’s Olegario Vásquez, winning a gold medal at the 1975 Pan American Games and setting a new world record, failed to win Olympic competition at the 1976 Montreal Games. By 1988, Chile’s Alfonso de Iruarrizaga finished second in the Asian Olympiad. In the 25th Olympiad in 1992, the Peruvian athlete Juan Giha, whose coach Bruno Sarti did not go to Spain due to lack of resources, came in second place.

Despite being the greatest Peruvian Olympian in the history of sports in this country, Edwin Vásquez Cam, unfortunately, continues to be an unknown sports figure for millions of Peruvians. On March 9, 1993 he sadly passed away. Ironically, his death went largely unreported by the national media. In a country that hasn’t had an Olympic champion since 1948 and never world champions, he should be an important role model for the boys and girls of Peru, paving the way for a new generation of champions.

The real estate market thrives with many opportunities that give people a chance to earn. The portfolio is so diverse that there are plenty of investments to try as well.

Rental properties are among the most common real estate investments. This is as simple as buying the property and letting someone (tenant) rent it for a period determined by a contract. While the landlord (property owner) is responsible for maintenance and taxes owed, the tenant is required to pay the monthly rent.

The downside of this investment is that the owner will have to deal with irresponsible tenants. These people don’t give a damn and may end up damaging the property.

If you are not interested in this property investment, you can try the property investment group. It will allow you to buy apartment blocks, condo units, or even townhouses with a single company acting as the property manager. You keep ownership, usually documented in block and blank. The investment company collects the payments for you by keeping a portion of what the tenants pay for the monthly rent. In some cases, a portion is allocated to cover units that become vacant for short periods.

Another real estate investment is called flipping. In this method, you buy a property and hand it over to the next owner. It’s like buying and selling. In general, changing a property takes three to four months. You just have to be interested in properties that can be sold without having to modify them at all.

However, there are newer pinball machines that also shell out a small amount of money to make the properties they buy more attractive. Few renovations and improvements are made before looking for the next buyer. This buyer can be someone just looking for their new home or someone who is also a real estate flipper.

There are also real estate investors who take risks by financing people who have an overdue mortgage. Some do it in exchange for guarantees such as automobiles. Some take title deeds and return them to the owner when the debt has been paid.

Real estate is truly diverse. Many forms of investment are now available to those who are not only seeking refuge but also protection from the financial crisis.

If you are looking for real estate investments within your place, seeking the help of a real estate professional is a great leap towards this realization.

zenaida lorenzo

An interesting name, derived from Zenobia, queen of the wealthy city of Palmyra in the Arabian desert, and in Latin, a feminine form of “Zeus.” A powerful name, indeed, but quite an appropriate one for an incredibly self-taught woman, quite aptly described by the words “motivation” and “prosperity.” Zenaida was the number 1 earner in her home-based business in 2005, even though she didn’t start out with a silver spoon, she didn’t have the best education and, in general, she had a hard time living as she got older.

Zenaida began her life in an ethnic neighborhood, mainly Puerto Rican like Zenaida herself, in Dover, New Jersey. The family was so poor that she sometimes went hungry and she had to wear the same clothes to school more than once. It didn’t seem to matter then, as many of the families at her school had similar problems. Poverty was a way of life.

“Well-being was much better then,” recalls Zenaida. But she can still remember coming home to an empty closet sometimes. School excursions were out of the question, because there was no money for them. There was simply no money for anything, and often not enough for food.

But when he was around seven years old, he moved with his single mother and four siblings (later another child would be added) to another neighborhood, bordering on the Anglo part of town. The hardest part of that was that she would have to attend a fully Anglo-Saxon school, a place where it would be extremely difficult for her to fit in. She went from a school where the student body was 70-80% minority to a school where 95% of the kids were Caucasian. In the early 1970s, this was as different as night and day.

The school administrators had no experience with Hispanic children, for one thing, and to make matters worse, Zenaida was severely dyslexic, although no one seemed to notice. Her teachers told her mother: “Something is wrong with Zenaida”, which implies that the girl had a mental problem. The fact that her mother did not speak English and that there was no father in the house only exacerbated the problem.

Zenaida failed her first year at the new school, which was second grade. She continued to repeat the pattern in third, fourth, and fifth grade as well, with no one understanding what Zenaida’s problem really was. The girl was not only alienated from her classmates because of her race, but because she simply had no way to get help with her problems. Her mother kept pushing her forward because her mother just didn’t want her to fail. Zenaida’s mother was uneducated and did not understand the consequences of her decision.

However, dyslexia was not Zenaida’s only problem. She also suffered from ADHD: she suffered from attention deficit hyperactivity disorder, a condition that she didn’t even recognize when she was growing up. ADHD sends thoughts through the brain at high speeds, often compared to a game of ping-pong balls taking place inside a person’s head. What ADHD meant for Zenaida was that she was easily distracted and bored. Her hyperactivity only added to those problems, making it very difficult for her to sit still for any length of time.

At the age of 13, Zenaida not only went to school; she was working and paying rent for her mother. When she got to high school, she worked two jobs to help support the family.

But in high school, Zenaida began to blossom. Her artistic abilities came to the fore and she began designing her own clothes. She even won second place in the school arts competition. Then, in her senior year, Zenaida wanted to work in the area where she had found her only success: fashion design, and she tried to get into college. However, her grades were not good enough to go to the schools of her choice. She was functionally illiterate.

At that point, Zenaida left home for New York City and found a videotape of a very old book, one that inspired millions and continues to do so today: “Think and Grow Rich” by Napoleon Hill. Zenaida threw herself into the book, working very hard to understand her forceful principles of focus and persistence in the face of resistance. And at 21, she went back to college.

His first move was to run to the local Barnes & Noble and pick up a fifth grade reader because he intended to get a college degree. He began to notice how words were jumping on the page in front of him and it wasn’t until he shared his problem with his friends that he knew that his problem all along had been dyslexia. Zenaida persisted in learning from her, until she learned to read by herself.

At the age of 25, she got a job in sales for a bank card system and earned the most money two months in a row. Her self-esteem soared. In fact, she moved up high enough to get a job at a newspaper. She lied on her application and said that she had a liberal arts degree from the University of Puerto Rico, where she had moved and lived for a short time.

And her boyfriend kept helping her. Unbeknownst to her employer, her boyfriend at the time was writing all of her sales correspondence, then her boss began doing it for her as well. By the time she realized everything, Zenaida was important in the company and she was earning a lot of money for them.

But that was not the end of Zenaida’s career. She decided that she wanted to work for the world-renowned publisher Conde Nast and asked her boyfriend to help her get a job with the company. However, he told her, “I can’t keep writing to her clients.” In fact, he told her that she couldn’t get another job until she learned to read and write.

So, she went to work. She was determined to learn to read, no matter what. First, she bought two books on how to get higher SAT scores: Princeton Review Word Smart, Volumes 1 and 2. Her friend and her boss taught her how to speak properly without ghetto slang, and after work every night, Zenaida would take an index card and choose one word from each of the two Princeton books, beginning with the letter “A.” On the front of the card, she would spell the word, write its phonetic pronunciation, and on the back, its meaning.

Zenaida played with cards. She read a New York Times article every day, which took her about forty minutes. If she didn’t know a word included in the article, she would look it up in the dictionary and then add a card to it.

He got to the letter “P” before stopping his routine.

I finally had a functional literacy by the time I was 29 years old.

Zenaida reinforced her knowledge of history by going to the Museum of Modern Art every weekend. She bought audiotaped biographies of the artists, which like all good biographies, were based on the history of that person’s time, culture, politics, etc. She clung to every word.

And she thrived. Her accomplishments led her to do a commercial for then New York City Mayor Rudy Giuliani for the local center for disabilities. She also received a proclamation from Mayor Newman of Dover, New Jersey for teaching herself to read and for speaking to local high school students about dyslexia, using the theme “Anything Is Possible.”

Zenaida also came to excel in business. She was earning 6 figures a year, and at 34, she decided to go back to college and continue until she got an MBA. When she was sold her company in 2003, Zenaida was forced to take a 30% pay cut because there were no other jobs. Soon, she wasn’t living up to her obligations and she decided there had to be a better way. She started a home business. In 2005, after less than a year with her home business company, Zenaida was the top earner, with close to $1 million in sales.

Although Zenaida is an incredible inspiration and someone worthy of the people who follow her, she says, “When I was twenty years old, I was very angry. I looked at successful people and always thought that if I only knew how to read and had an education, I might have a chance to be as successful as them. Today I realize that the reason I am so successful is because of all the handicaps and disabilities I had to overcome. Today, I have full time and financial freedom. My goal is to empower others to see what is available to me. them and help them overcome their self-imposed limits.

If I had to follow someone to success in business or in life, Zenaida is without a doubt a woman to follow. She has helped many people succeed at the same level as herself. Today, she is eager to help more people live the life of financial freedom and become the best person she can be.

To transition from homeowner to successful pre-foreclosure or foreclosure investor, the first step is planning your transition. The key to success in real estate investing is to consistently make money. So even if you own only one asset at a time, you need a plan to choose the right investment property and make decisions about how to finance the property, your exit strategy, and whether to repair or remodel the property.

The great thing about pre-foreclosure investing and foreclosure is that you don’t necessarily have to pay for everything on your own. You can partner with other investors and, if you rent the property you buy, have your tenant not only cover loan repayments, but essentially buy the property on your behalf. Investing in prior foreclosures and foreclosures also allows you to take advantage of a number of exit options. “Home renovation,” for example, is the term used for investment deals that involve the purchase, repair, and subsequent sale of property for a profit.

Also, since you are targeting prior foreclosures and foreclosed properties, you can potentially get a significant discount on the retail value of the property you purchase. That is one of the main reasons why these types of properties are ideal for an owner who wants to start investing in property.

If you’re just starting to invest in real estate, you can take an approach where you pay off your current home and try to save enough to invest in another property. The downside to this approach is that it can take an inordinate amount of time. You do not have to wait! There are alternative ways to invest in pre-foreclosure and foreclosure properties that are simpler and faster.

If you want to start conservatively, you may decide to invest, for example, in a pre-foreclosure or foreclosure property that would make an ideal vacation home or second home. The continued demand for such properties makes them relatively easy to sell, allowing you to invest more in similar or other properties.

Renting out your existing home while you buy and move into a low-priced pre-foreclosure or foreclosure is another way to start investing before foreclosure and foreclosure. Yet another approach is to sell your family home so you have the money to invest in two or more pre-foreclosure properties or foreclosures, one of which you live in and the other(s) you monetize.

You can also take advantage of the increase in value of your family’s home (if applicable) by refinancing or taking out a second mortgage to invest in one or more properties.

These are just a few of the ways you can transition from homeowner to pre-foreclosure and foreclosure investor. In general, I recommend pre-foreclosure and foreclosure properties for someone starting out, as they can be purchased relatively cheaply and present less risk than many other types of real estate investment.

Where to look for the best deals to make money

I understand that this is a delicate moment and a sensitive subject. There are people all over the world who are suffering, and I am about to write an article on how we as investors can benefit. I want to start by saying that I truly feel compassion for everyone severely affected by this pandemic, and I do not want to dismiss that in any way. Having been through two previous market crashes, I know what kind of pressure this can cause. While I wish this didn’t happen, I don’t want to close my eyes to the fact that it could create opportunities for those who are prepared. I’ve thought about writing this article for weeks, but haven’t really been able to put anything together. The reason for my struggle is that I am primarily a residential real estate investor, and quite honestly, I don’t see an influx of opportunities in that type of product. With that being said, I think we will see some opportunities in other product types, and possibly residential going forward. This is what I think could happen as we get through this crisis.

OFFICE:

Office is likely to be the hardest hit asset class in real estate. With the recent shutdowns, most businesses occupying office space have sent their staff home to quarantine. I don’t have the statistics, but there is a high percentage of people who can work from home who are working from home. Offices are practically empty in most cities. So why would a company continue to pay rent when they are not using the office? Well… many are not. Businesses across the country have stopped paying rent on their office space, and most office building loans are from commercial banks with little flexibility in payment deferrals. There are moratoriums on foreclosures spread across the country that could be playing a role, but we are yet to see a wave of foreclosures. That could easily change. As we work through the government stimulus, which is helping office owners, and employers decide to reduce or eliminate office space, more and more office owners will face financial difficulties. Combine this with the decline in property values, and it will be a challenge for homeowners to keep up or refinance the debt. Personally, I’ll stay away from the office, but I think there’s going to be incredible value in the near future.

APARTMENTS:

Because this will be the most similar to residential, it’s an asset class that I understand much better. Behind the office, I think this area will be the most affected. I know this will turn me off, and many investors believe neighborhood retail is in trouble, but before you stop reading, let me explain. First, I am limiting this argument to class C apartments. Class C would be the lowest income buildings. The reason I think this is going to be affected more is because of the unemployment numbers. If you dig into the numbers, there is a sad discrepancy. The non-working American bears the brunt in hospitality and the minimum wage worker. As of today, most of them are making more money on unemployment than on the job, so we haven’t seen a big drop in rents paid. That will change at the end of July when the federal portion of unemployment stops unless the new stimulus plan passes and extends this deadline. The federal piece is $600 per week for everyone who is unemployed, regardless of how much they earned before losing their job. When that expires, unemployment payments will drop to close to 50% of previous earnings, which is not enough to support this demographic. In time, businesses will come back and people will regain the confidence to leave their homes and spend money, but while we wait for that, unemployment will continue to be a problem and paying rent for these kinds of apartments will be a problem. Two other areas that will be affected include small retail that has small restaurants as tenants, and self-storage. I think small retail stores could see a pretty big hit as their tenants struggle to get back into business (many won’t survive), but storage will do better. It’s common in tough times to see families consolidate, so I think it’s possible to see lower vacancy rates and higher rents with storage.

On the residential side, I don’t think we’ll see much change. I think everything stays the same, at least in the short term. I have written about my opinion on the impact of COVID-19 on housing and posted videos on our channel, so I won’t go into too much detail here. If you haven’t subscribed to our channel yet, please do. We hope to increase subscribers and you can help. Although I don’t expect much of an impact, there is a chance that we will see an increase in foreclosures in 18 to 24 months. Most non-jumbo loans are owned or guaranteed by the government. All loans in this category qualify for automatic forbearance, which I discussed last month. Those deals expire 12 months after they start and then it will take some time to determine which borrowers can get back on track and which can’t. My guess is that loan servicers will be much quicker with their foreclosures than they were in 2008, so I expect problem loans to make their way through the process quickly. Although this is a real possibility, I don’t think it’s likely. The services have a great deal of latitude to work with their borrowers after the forbearance expires, which should prevent many foreclosures. I also believe that our economy will recover for the most part at this point and unemployment will return to a manageable level. If I’m not mistaken, business as usual for residential investors. Although I am an optimist, my eyes are open to what is possible.

OWNER FINANCING:

I hear a lot about upcoming investment opportunities or other transfer of owner transactions. Although I believe that these opportunities are coming, I believe that it is much further down the line. I will discuss this in more detail next month.

Earnings and loses

Profits and losses are the main forces that govern a company’s cash flow. Smart business managers will keep an eye on both their profits and losses so that they can allocate their resources effectively to ensure that they have optimized their cash flows. For some businesses, optimized cash flow means enough money to pay expenses with a small amount of profit left over. For others, it is important to maximize profit returns to invest in the growth of the company.

maps

To truly understand business financing, it’s important to know how a business plans to earn its profits. A company that makes a profit through low margins and high volume will control different aspects of its balance sheet compared to a company that makes a profit by selling fewer items with a higher profit margin. Both are valid strategies for steady cash flows, but require different approaches to be managed effectively.

Bills

Managing expenses is a good way to increase profits without making additional sales. It can also be a way to maintain steady cash flow as sales revenue declines, if sales losses are offset by reduced expenses. A profit and loss statement is a way for a business to review its expenses divided into categories so that it can analyze its expenses more effectively, determining which costs will have the biggest impact on its cash flow.

Production costs

Production costs impact the financing of a business because they represent the costs incurred with each sale. These can be expenses such as the cost of raw materials or a sales commission for each item sold. The effect of production costs on cash flow can be reduced by looking to produce items more efficiently or by reducing the amount spent on each item.

Fixed costs

Fixed costs impact cash flows as a constant that remains unchanged regardless of the total number of sales. For one thing, a business will never be profitable if it doesn’t make enough money to cover its fixed costs. On the other hand, a business can increase its cash flow by making additional sales beyond the minimum required to cover its fixed costs.

Variable costs

Variable costs are difficult to account for when estimating a company’s future cash flows because they depend on the amount of sales and change based on sales volume. In some cases, variable costs could be bulk shipping fees that are eligible for a discount or paying employees who work overtime to meet customer demand. Variable costs can have unexpected effects on a company’s financing unless managers plan carefully.

frequent measurement

Frequently issuing a profit and loss statement is a good way for a business to track its financing and determine if it is taking the right steps to control its costs. Understanding and addressing your production costs, fixed costs, and variable costs is vital to any business, regardless of your desired profit margin. Reviewing the profit and loss statement monthly can help monitor these costs and identify expenses that can be reduced to stick to a profit model and maintain optimal cash flow.

The year 2017 was considered a breakthrough year for the real estate industry in India. After the Demonetization trilogy, GST and RERA, the sector was desperate. However, the indomitable spirit of Indian property developers has not waned in the least. They rose to the occasion and began to repackage the product, price, and promotion of their unsold home inventory. From a sales and marketing standpoint, they tried to go above and beyond to appease the demanding customer. Some of the initiatives that got attention were upselling the product, adding the service element to the product, dovetailing technology with homes, bundled deals with home financing. Property developers also tried superlative adjectives, spiced things up with Bollywood and sports celebrities backing various residential projects. Projects were renowned for international brands and innovative launches were executed in line with global best practices. Many developers even completed the micro-level infrastructure adjoining their projects and took on the government’s role of providing external and internal work. The government continued to follow a nonchalant approach to urban planning and infrastructure which further hurt customer sentiment. Many times, a homebuyer has gotten homes but without a drivable road leading to his home. While all this was going on, the government also tried to act together, albeit in the space of the snail. The Central Government announced RERA (Real Estate Regulation Law) and the states started its implementation in the third quarter of 2017. It pushed developers to speed up the completion of projects and a certain deadline date was announced. Many residential projects were completed in this rush of time, however the speed of sales did not match the speed of completion of these projects. Eventually, the implementation of RERA failed miserably in most states and failed to meet its goal of providing homebuyer transparency. Rather it deteriorated the confidence and hope of home buyers in the Indian real estate sector. The home buyer therefore further delayed home buying decisions and became comfortable being a “fence keeper.” Because of this dilemma, working capital problems have reached an untenable level for most homebuilders. Many times the monthly sales still didn’t match up to meet/clear even the lenders liability. The government came out with some momentum to announce the affordable housing policy and hoped that this could turn the tables for the customer and for developers. The intention was to ensure faster delivery at a good price for the client and, in turn, achieve good working capital for the developer. Many developers have branched out into this space, and many new entrants have also emerged in this space, including some companies. However, the product suffered greatly as these new affordable homes were too small and located in remote areas. Therefore, the affordable housing policy could not sustain buyer interest, after the initial euphoria.

So after all the hoopla of innovative marketing, government compliance, and regulation over the past few years, sales fell even further. Construction cost inflation created a double whammy for the industry. Construction costs took an upward trajectory, thanks to inflation in cement and steel prices. The regulator also continued its risk weighting on real estate. Therefore, the cost of financing real estate projects, especially on the residential side, continued in the range of 15% to 24% per year. With construction costs rising, sales drying up, the cost of borrowing rising, the homebuilder was pushed to the limit.

While all this was going on, the old mantra of “lower prices and sell more” was reborn. Residential home prices that were chasing Manhattan prices began their homeward journey. Homebuilders who followed this mantra created great success, breaking sales records while others continued to sweat. Sales velocity became the buzzword and everything else faded into the background. Some of the homebuilders began to understand the velocity of sales equation in a more pragmatic way. Instead of increasing pipeline and increasing sales activity, the focus shifted to win rate and shortening the sales cycle. Once the focus shifted from increasing sales activity to increasing win rate, sales velocity began to increase apace. Among the various developer associations, these blockbusters were initially derided as “black swan events” and developers were negatively labeled “outliers.” There was hallway talk that such developers are killing the industry. However, the lenders welcomed this step and are now preparing to further support these developers in such difficult times. There is now a sense of appreciation being seen among many quarters for these developers and the talk of the runner died a natural death. Many other developers in the last quarter of 2018 are expected to follow suit and focus on shortening the sales cycle and therefore increasing the velocity of sales. After all, nothing succeeds like success.

This article is written to appreciate the real estate entrepreneurs who answered the call to fix their prices and achieve faster sales velocity. This article is an attempt to encourage others to follow suit as well. That there be a sustainability in the prices for the home buyer. It is an important way to achieve reasonable growth in real estate business in India. Once this is achieved, the economy will start to favor developers again and there will be happier Sundays!

As they say, a fish always rises after hitting its head on the bottom of the sea. Therefore, it is time to rise up and act appropriately according to the changing landscape.

Disclaimer: The opinions presented in the article are the personal opinions of the author and not those of any organization/company. For any queries/comments/feedback, please write to [email protected]