Couple Forecloses On Bank of America

Foreclosure is not a fun process.

Losing your house for any reason is a stressful, disheartening experience. And banks are notoriously difficult to deal with. Mainly because they’re not really interested in working out a deal with you. Especially if you have equity in your house.

That being said, I’m greatly amused by people who get the better end of the foreclosure process, especially when it comes to Bank of America. (I’m not a big fan of Bank of America – I have my reasons…)

Bank of America filed for foreclosure on a house in Florida, about six months ago. The strange thing was that the homeowners, Mr & Mrs. Nyergers, owned their home free and clear. They had bought their house with cash. They had never had a mortgage on it.

In court the judge found the bank wrongfully tried to foreclose on them. Basically he said BofA was trying to scam them out of their home, and ordered the bank to pay their legal fees.

So how did the couple end up foreclosing on the bank?
After more than 5 months of the judge’s ruling, the bank still hadn’t paid the legal fees, and the homeowner’s attorney did exactly what the bank tried to do to the homeowners. He seized the bank’s assets.

According to CBS, the attorney said, “They’ve ignored our calls, ignored our letters, legally this is the next step to get my clients compensated.”

Sheriff’s deputies, movers, and the Nyergers’ attorney went to the bank and foreclosed on it. The attorney gave instructions to to remove desks, computers, copiers, filing cabinets and any cash in the teller’s drawers.
After about an hour of being locked out of the bank, the bank manager handed the attorney a check for the legal fees.

“As a foreclosure defense attorney this is sweet justice” said Allen.

The unfortunate sad part is that bank errors like this are quite common.

The couple’s foreclosure attorney said he sees happen a lot in court, because banks didn’t investigate the foreclosure and it becomes a lengthy and expensive battle for the homeowner.

At least this story had a happy ending.

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Proper awareness on Credit use

The credit score plays a vital role in your financial life, so you should be aware of your credit ratings. As you know to qualify for any kind of loan or credit card and even to get a better job it depends on how good credit score you have.

The credit bureaus collect your credit report from the creditors with whom you have different accounts and how you make the payments to them. The numerical scores are created for you depending on the information passed by the creditors. This score is called FICO score and the FICO score plays an important role in your life as whether you want to buy land or a cell phone.


Credit reports and credit scores both are considered very important like credit report is viewed as a mark sheet and credit scores are looked as higher ranks. If you have high ranks it said that you have good credit report. Anybody having credit score more than 600 is considered to have good credit ratings.

In order to obtain reliable mortgage rates, it is very much necessary to have good credit scores. To obtain home loans banks are giving special preference to persons FICO score due to the global recession. Due to excellent credit score you will have an opportunity to secure maximum capital only in interest.

It is always the good credit rating that helps you to get lower rates on insurance, say for instance your credit ratings are thoroughly viewed by auto and the most of the health insurance companies so that they can make the best of it by obtaining the premium on insurance. Most of the time people hardly report case against their policy when the have high credit score, whenever the customers gets reasonable rate on their life, health or auto insurance they get the reward.

Employment opportunities have a great impact only if the credit ratings are good enough. In order to make you good enough regarding money it is the duty of the employers to thoroughly check your past history specially your credit report. So it is very obvious customers having a good credit scores will be treated in a special manner rather than those having bad credit score.

Credit scores play an important role in your daily life. It is very true that if you have a good credit score then you are bound to lead a good life. However it is also important to constantly have a look on your credit because it changes at times and new information is always added.

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$20,000 Month is Not Too Big

Getting started I had a goal of making $20,000 a month. That’s all I focused on: How could I make $20,000 a month? I listened to all the courses and read all of the books talking about the mythical $20,000 months in real estate and yet it wasn’t happening for me. In fact, what was happening was month after month of a big fat zero, nothing, nada. So of course I became cynical. This isn’t for real. You can’t really make $20,000 a month in real estate. Plus, even if I do it once, is it going to take forever to do it again? Arrrgggh! I can’t handle that.

Then I discovered the real secret and with it came not just $20,000 months, but $30,000; $50,000; $80,000; even $100,000 months in REAL ESTATE! Month after month. What do you know it was true after all. It wasn’t just a pack of lies that a bunch of conspirators had formulated just to frustrate me.

Now I’m on the other side and I watch so many others going to what seems much be some kind of rite of initiation of something, They have the same dreams and aspirations as I did. They face the same frustration. And they are becoming just as cynical. Is that you?

Let me help you out and reveal the secret that I took so long to discover. Unfortunately you’re going to be as disappointed as Dorothy when the true “wizard” of Oz was revealed behind the curtain.

OK, here’s the big secret. Are you ready? Here you go…
Don’t focus on the dollars.
That’s right. That’s it. That’s the big secret that will change your financial future if you follow the advice.
Well, maybe I should clarify a little bit so it has a deeper meaning and you’ll start to see me as the wise sage…or should I say “wizard”?

You see, when you focus on the dollars…like $20,000 a month…you have no way to make it happen. Frustrating right. It’s too big.

I learned that you eat an elephant one bite at a time. So let’s approach this the same way. Let’s break it down. If you want to make $20,000 a month, how many deals per month do you need to do? Well, you should be able to make $10,000 a deal, so that means you need two deals. OK, that already sounds a lot better than $20,000, but how do we get 2 deals?

Well. it takes about 20 leads for every 1 deal. So to do 2 deals you need 40 leads a month. If we break that down further, that’s 1.3 leads per day. Now there’s your focus. Focus on driving in 1.3 leads each and every day. The rest will happen on its own. If you’re not averaging 1.3 leads per day, ask yourself what else do I need to do to get more leads. And let’s define a lead: it is a prospect who is responding to your marketing.

To get your business to take off and soar and make you as much money as you want focus only on lead generation. Never be satisfied with the number of leads you’re getting. Always ask “How can I drive in more leads?” If you focus on leads, $20,000 months will seem like child’s play and you’ll call me the Wizard.

Expect abundance!

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Private Lender Demand Hits Record Levels

There has always been a huge demand for private lenders amongst real estate investors, but the demand has hit record levels as more traditional lending sources continue ot dry up.

I know that there is still some confusion as to exactly what a private lender is so let me explain it here. A private lender is just that: a private individual who is willing to make real estate loans. Their goal is to earn higher than market interest rates on their money with a safe, secured real estate loan. The difference between them and a hard money lender (HML)  is that the HML is in the business of making real estate loans to investors and typically charge higher rates, they charge points; and they loan to anyone who meets their criteria.

Any savvy investor realizes that the true profit margins come from leverage. Leverage a small amount of your own money to purchase large amounts of real estate. As the traditional sources of leveraged loans dries up, investors are turning more and more to private lenders for their financing needs. The secret here as an investor is to not let your private lender realize how much demand is in the marketplace. How do you accomplish that? By treating your lending well and never force them to go out shopping for a new borrower. Keep their money in use. Don’t let it sit for long periods of inactivity. Provide them plenty of safeguards: title insurance; hazard insurance; and a reasonable Loan-To-Value (LTV) ratio (70% or less of the ARV).

If you don’t currently have a portfolio of private lenders you need to build one as soon as possible. You don’t find them in the yellow pages or on Google. They are every day individuals who currently have their money invested in low yield vehicles like CDs or IRAs. The advantage you offer is a much higher interest rate yet with  the security of real estate. With the demand for these lenders continuing to increase, you need to build a relationship with potential lenders as soon as possible before someone else beats you to it. Once you have them, treat them like gold because they literally are like gold.

For those of you who have money invested in low yield vehicles like an IRA you definitely need to consider the profitable world or private loans. Most people don’t realize that the IRS allows you to make real estate loans with your IRA if you have a Self Directed IRA. If you don’t it’s easy to rollover your current IRA to a self directed one with a company like Equity Trust (www.TrustETC.com). Once you have a self directed IRA and start making real estate loans, you’ll easily earn 4-5 times the interest you’re currently earning in your regular IRA.

Whether you’re an investor borrowing private funds; or an individual making real estate loans you will profit from the experience. That’s the definition of any good deal, right? When both sides win!
Expect abundance,

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Housing Market Has Many Hurdles

Although parts of the U.S. economy have shown some signs of recovery, the housing market remains in a slump in some areas. Federal Reserve Chairman Ben Bernanke has a plan to help the housing market. Bernanke’s plan includes modifying more mortgages and making the buying process more streamlined.


Declining home prices: the good and bad
The plan has received criticism from those who don’t believe it will work well for the overall housing market. With high unemployment and recently tighter credit standards, the bottom third of buyers are still unable to apply for mortgages. Even though it’s a buyer’s market and home prices are very low, many are still unable to get a home.

March home prices were at the lowest level since March 2003. With the decline of home prices, many people have decided to keep their current home, which has kept folks from moving to growing areas. Since people are feeling the pinch of the housing market, many consumers are spending less, which accounts for about 70 percent of economic activity.


Fewer first-time buyers
Another hurdle the housing industry is trying to jump over is less first-time buyers. In healthy economic times, first-time home buyers account for more than 50 percent of sales. Currently, the percent of home sales from first-time home buyers is down to about 35 percent, according to Total Mortgage Services. There currently is no program for first time home buyers like there was in 2008, when the First-Time Homebuyer Credit was in effect.


Why are would-be buyers staying away?
With many Americans juggling credit card debt and student loans, the added guidelines of having larger down payments and stricter lending rules are keeping would-be buyers at bay.


HARP qualification, a slow go
There is also the concern of keeping people in the house in which they live. The Obama administration and federal regulators are trying to give struggling homeowners reprieve by permanently modifying their loans. Unfortunately, the administration has only been able to modify about 600,000 loans to date.


Will economic growth continue?
The current report from the government shows the growth of the economy at an annual rate of 1.8 percent in the first three months of the year. According to analysts, it isn’t expected to grow any faster. Without economic growth, Bernanke’s plan to speed up the removal of foreclosures might not be enough to give life to the housing market.



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Common Mistakes Real Estate Investing Novices Make

Real estate investing is becoming more popular nowadays despite the recession. Investors are snapping up properties in hope of selling them for a higher amount in the future. Even those who have day jobs are trying wholesaling and flipping houses. After all, television shows made it appear fun and simple, not to mention, very profitable.

Novices in the real estate investing world though should be wary. There are some mistakes you must avoid as they could give you a bad start in the business. Worse, they could force you to quit and give up your dream of making a fortune through wholesaling and flipping houses.

The first costly mistake is not doing your homework. If your Math teacher in third grade forgave you for not completing your assignment because you had fever, real estate investment isn't as compassionate. A lot of novices, spurred and inspired by how easy television shows make investing appear easy, jump into the pit without arming themselves with the right knowledge. As one seasoned wholesaler said, information always beats money in getting deals done.

Learn to read. Browse magazines about real estate in general. Go online and visit web sites like REIwired.com to learn more about the tricks of the trade. REIwired.com offers premium and accurate content for members so be sure to create a log-in account. You'll find very helpful videos, audio files, and articles at REIwired.com.

The second one is missing estimates by a mile. Forgive yourself if you spent $1,000 more than your repair budget in your first flip. You will hit and miss these targets as you go along. But, to avoid missing far too often and literally paying the consequence, leave 'estimating jobs' to experts ' at least while you're still learning. Hire a professional house inspector in your first few flips to make sure the repair costs are accurate. Once you get the hang of it, you can start inspecting and estimating on your own. Avoid these two mistakes and you'll surely be off to a decent start in your real estate investing career.


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Investing In Real Estate, How Do I Get Rich?

Fundamentally, you have three ways to make money when purchasing investment property. The first is to lease the property for an indefinite period at rents that exceed the cost of holding the asset. The second is to purchase the property with the intent of renovating it to substantially increase the value and selling it quickly.

The third is to find properties that need to be liquidated quickly at a substantial sacrifice to equity. An investor can acquire these properties and immediately sell them for a substantial profit.

Essentially, these three concepts have made more millionaires than any other type of venture in human history. Having said that, why aren't you creating your wealth with real estate? For many, it is fear; for others it is lack of capital. However, for all, it is merely a lack of understanding. People buy and sell real estate with no money down all of the time, and real estate has always been a much safer investment than the stock market.

So how do you get started?
The first step is always education. Start reading books about real estate investments. Go the book store or library and learn the fundamentals. You don't need to be an expert, but you must understand the process. Find a realtor that works with investment properties and ask questions. Do the same for mortgage brokers and banks. Sit down with a loan officer or mortgage broker and determine how you would finance an investment. Ask questions and find real estate and finance professionals that can help protect your interests as you learn.

The next step? ... Find the properties.
With the aid of the real estate professionals, determine the best type of investment for your lifestyle, financial position, and risk profile. After you determined best type of property to maximize your return, begin searching for your investment. For this, the internet has become an invaluable, time saving, tool. Search for potential investments at sites like freeForclosureSearch.com (http://www.foreclosurefreesearch.com/index.cfm?rsp=2428) or Reals.com (http://www.reals.com) In addition, you can look through your local paper, visit county the county recorder, and call on the resources of your network to find the opportunity.

But how do I recognize the opportunity when I find it?
Valuing a potential investment is not as difficult as it may seem. For investors looking to receive a return for charging rents, evaluation software such as IP Ware (http://www.freetrainer.com) aids in finding the maximum return on investment. For investors that are looking to renovate and re-sell, comparable values of the surrounding area can be a good foundation. Finally, for those that are looking for people that must sell at a substantial sacrifice, mortgage lenders, tax records, and financing groups can be a significant source of information.

Investing in real estate is a simple process. It is merely a matter of locating a potentially good investment. Determining how to best leverage that investment. Then using your resources and relationships to minimize your risk, and maximize your return. There is a myriad of resources available to beginning real estate investors. Isn't it time you took advantage of the opportunities in real estate and started building your wealth?


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Mortgages and Negative Equity

Not so long ago the rules of buying a property were clearly defined. Mortgage banks set some pretty strong criteria which had to be strictly adhered to and there were no room for negotiation. Equity of a minimum of thirty percent was required on a property, and if you didn't have the thirty percent, you saved harder till you did. In the case of young couples who were buying their first home, it was fairly common practice for the bride's parents to pay a fairly large chunk of the deposit, with the groom's parents adding a little, and the young couple making up the balance. Sound idyllic? It was. For the simple reason, that then, which means up to fifteen years ago, property prices were realistic and an average family could afford to pay out the relatively small sums of money required to make the equity required to purchase a property.

However, as the property boom began to take of in the mid nineteen nineties, and property prices began to rise, it became increasingly difficult for buyers to raise the money required for equity. So what did the banks do? So anxious were they to sell mortgages and earn interest that they began to relax their restrictions on equity minimums. Fuelled by the seemingly never ending property boom, every year they demanded a little less equity, Not only that, the banks, so hungry were they to lend money and earn interest, were less than stringent in doing physical valuations on the properties that they were lending against. It seemed that no matter the state of the property, it would always rise in value. This was true, at least on paper, till the sub-prime mortgage crisis fell upon the World in the summer of 2007.

When the bubble burst, home owners were forced to wake up to the reality that their property values had dropped by ten per cent almost overnight and the predictions were that they could fall to as far as twenty five percent within the next few years. For veteran home owners, who had bought properties twenty or even ten years ago, and invested reasonable equities and seen their property rise to double in value, whilst it was upsetting it was by no means a disaster. Also for people who purchased a property five years ago or after, and had placed little or no equity into the property the situation is not easy, but is liveable with, at least in the short term. The people who appear to be hardest hit or those who bought properties in the early 2000s. Those who placed equity of between five to fifteen percent of the value of the property when they bought it.

Today their property is worth ten percent less, which means that they have lost whatever appreciation on the property value they earned, and are starting to dig into their equity. With property values continuing to fall the equation is that they will have lost all their equity and will actually owe more on their mortgage than the property is worth.

That is a classic case of negative equity and how innocent people who wanted to own their own properties and invested reasonable sums of their own probably hard earned money to do see the danger of having their equity wiped out. The best advice you can give to these people is to hang in, not to panic and in time their property value will return, and their equity will be saved. In may take time, but it will happen.

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Negotiating the Real Estate Contract

Negotiating the Real Estate Contract

There is no "one size fits all" strategy of negotiating a real estate contract. Negotiation is the process of communication back and forth in order to reach a joint agreement. Many of our clients have been very experienced negotiators, and we have learned a great deal from them, as well as from books on the subject. We would like to share some of our thoughts on negotiating with you:

What do we want to achieve in a negotiation?
The best negotiators bring an attitude of high expectations to the table. They are hard on the problem and soft on the people. Letting the seller know what you need, in a clear and reasoned way, is the first step toward getting it. We try to keep all of these goals in mind:

Enable you to move into your new home. Obtain the lowest possible price for the property. Close within an acceptable time frame. Solve any repair issues fairly. Have no title, survey or loan problems, or solve any that do arise. Develop a good working relationship with the seller. Have no future problems after closing.

Is a cooperative or combative approach more effective?
Our experience shows that the cooperative style is the most effective and efficient way to complete a transaction. Professional negotiators usually try to preserve the relationship between the parties, and work together to resolve problems. The goal is not to reach an impasse in which neither the seller's nor the buyer's needs are met. Buyers sometimes submit a letter to the seller describing why their house is not worth what they are asking, pointing out deficiencies, etc. This almost always backfires, and starts the negotiation off with a defensive seller. It is best to anchor your price to the marketplace, while remaining very complimentary of their home.

How do you work with a combative strategy by a seller or agent?
The combative style is sometimes encountered. This strategy includes: negative comments, emotional statements, table pounding, threats to walk out, ego involvement, and stated positioning. Creative solutions and trade offs are not as likely to be found in this environment. Working with a combative style negotiator requires a considered approach:

Do not respond emotionally. An angry or defensive response will escalate the negotiation into a no-win battle. Do not argue. Arguing usually positions them more strongly and drags the negotiation process off course.
Do not ignore their arguments or statements. Listen carefully, but do not accept or reject. Firmly anchor pricing and other terms to outside data. Show that the price has not been chosen arbitrarily. Reduce misunderstanding by following up with written summaries of discussions. Do not allow hazy or unclear proposals to stand. Offer some "wins" on some of the terms. Face saving is very important.

Look for ways to meet their underlying interests.
Remember that they may have a beautiful home that satisfies the buyer's goals.

Is every point in the contact negotiable?
Yes. However, one of the most effective means of coming to an agreement is to rely on consistent standards or norms when possible. For example, it is common practice for the seller to pay for the title policy and for the buyer to pay survey cost. Using accepted standards prevents buyer and seller from haggling over every point. Working within the accepted "norms" for our area helps to legitimize offers, and focus the negotiation on just a few points. On the other hand, all the points in an offer can be used to help structure the deal. They offer trade-off opportunities for both parties to get what they want from the negotiation.

The value of trust in a negotiation
The value of trust in a negotiation cannot be overstated. Most people are fair minded and reasonable. They respond well to respectful treatment and to having their concerns heard. If the seller feels that the buyer and agent are acting with integrity, their attitude will be much more cooperative. Contract negotiation is a sensitive area, and anxiety can be high. The buyers may have had an unpleasant past experience with buying a home. The seller may be under pressure, with future plans at stake. Acting with integrity does not mean that all "cards have to be put on the table." It is not proper to discuss personal issues that affect the buyer, such as your financial ability or urgency to move in. It is valuable to develop rapport because trust increases your leverage. Here are ways:

• Listen and understand what the seller has to say.
• Express appreciation for the seller's home, gardens, decorating.
• Respond within a reasonable time to counter offers.
• Reassure the seller of your ability to close.
• Reveal some personal information about yourselves.

Finding common ground with the seller can be a very powerful tool in the event of multiple offers. I can think of several instances in which sellers selected their contract for very personal reasons. (The family reminded them of themselves when they moved in with young children years before. Or, they were both of the same religion. Or, the new owners would care for their gardens.)

Understanding your leverage
The more we can find out about the seller's needs, the better chance we have to find solutions to negotiation hurdles. We will be able to offer information or concessions that appeal to the seller's deepest concerns. Obviously, if the house has been on the market for 300 days, you have a lot more leverage than you would with a brand new listing. If their time frame is immediate, and you can meet it, you have some leverage. If they have multiple offers, you have very little leverage!

How much under list price should you offer?
Buyers usually offer less than list price, unless it is a strong sellers market. There is no standard percentage "under list price" that can be used. A market analysis will show recent sales for the neighborhood, which is the best way to establish the offer price.

It is usually counter-productive to offer so low that the seller will automatically reject the offer. This will set a negative tone, and may result in an emotional response from the seller.

What if we have a multiple offer situation?
Occasionally the seller receives more than one offer on their property. The Austin Board of REALTORS® has a policy that allows two options: disclosure to all parties that multiple offers have been received, or disclosure to no one that there are multiple offers. We prefer disclosure to all parties. However, the listing agent and seller will make the decision as to how they will handle offers. By simply disclosing that there are multiple offers, they are not "shopping" your contract. Shopping occurs when the seller discloses the terms of an offer to induce a buyer to submit a better offer. This can result in major distrust of the process by the parties, and the likelihood of loss of the buyers.

Usually the procedure is to notify each party that multiple offers have been received. Each party is then given the opportunity to raise or adjust his offer by a certain time. After that time, the seller is free to review all offers and choose one to work with. They are not obligated to choose the "first" offer that came in. The selected offer may be countered, or accepted as is.

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Real estate auction action - Buying a home at auction

Due in part to the popularity of the U. S. Department of Housing and Urban Development (HUD)'s home auction program, more potential homebuyers than ever are buying homes at auction. Homes for auction aren't limited to just HUD, however. Many government entities auction homes for payment of back taxes, and some homeowners even auction their homes on eBay.com!

Homebuyers considering buying a home at auction should take some steps in advance to help them with their bid price, and even whether to bid at all on a specific home. There will always be a degree of risk when buying a home this way, but with a little diligence, potential homebuyers could save a lot of money buying in this manner.

Before the auction, you should have your financing arranged, and have enough cash on hand or in your bank account to cover a deposit on your purchase. You need to check the features, location, condition, and ownership history first. Afterwards, be sure to learn what the property is worth by looking at sales of comparable properties in the same area. Compare homes with the same number of rooms is possible, but be sure to allow for price differences due to pools, decks, carpeting, window treatments, etc.

At the auction itself, resist the temptation to get into a personal bidding war, just "to beat out the other guy".

Have a set price limit and stick to it. Other houses will come along, and you don't have to win the first auction that comes your way.

You should know that the price of a home at auction is typically the loan balance (if foreclosed), plus any back taxes owed, plus legal fees and other expenses in foreclosing the property. This will typically be the opening bid amount, and the price will go up from there. Even so, it's possible to get a great deal in an auctioned house, with a little research and planning first.

Also, know that you probably won't be able to get an inspection, and are buying the home "as is". If you can't do any needed repair work yourself, or can't hire it done within your budget, you may not end up getting such a bargain in the end.

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Real Estate Development Marketing - A Specialist Article For

Real Estate Development Marketing!

When do you start?

As soon as you open your 'baby blue eyes' every morning!

"The Easy Part of Property Development is Spending Money" ... "Marketing Is What Gets It Back + A Bit More For Profit."

Anyone can spend money. It takes a good manager to spend it at a predetermined rate in line with a planned 'cash flow.'

So this topic is very important. People think Development Marketing is all about putting an advert in the paper, designing a brochure and following up the agents ... I don't think so folks!!

Marketing starts before you buy the land.

The location of the land impacts on marketing. Is it a desirable address? Is it in a prestigue location? What market sector of the buying public are you aiming for? Does the site have local prominence? Does the land have quality houses around it?

All of these questions impact on your marketing plan, the home designs you select, the costings and untimate sales prices.

So if marketing starts with the land selection, it logically then goes on to the design stage. Assuming you don't want to just copy something you've seen another developer has done, you need market knowledge.

You need maket knowledge of the exact standard of product you are competing against in the market now. Remember you won't be producing yours for another 12 months or so and you'll want to improve on what is being produced today, so you have a market difference. An 'Edge.'

Marketing is no more than the presentation of your finished product to the buying public in the most favourable light, highlighting all the benefits your home has over the competition.

One kind of marketing style that is a failure as far as I am concerned is the one that is based on the "Numbers Comparison." I am sure you've seen the on site project boards.

Our house has 5 of these, and 6 of those ... when that guy's house only has 4 of these and 3 of those. The potential buyer will eventually want to know these things, but "Right Now" they want to know "How They Feel" about living in the place, on your Road, in this neighborhood.

Understand this: People SELL for Money ... People BUY with Emotion.

If they don't feel good in your place, it does not matter if you give then 12 of these and 20 of those ... OK?
I have always DEVELOPED and MARKETED on the basis of appealing to the human senses of See - Feel - Touch - Smell & Sound.

I transfer all those into my designs, because I am designing and building for 'Humans Beings' and human beings buy with emotions ... and if I do my work well, I'll make a profit.

So as a buyer, if a house looks good when I drive up to inspect it, I am favouable disposed to buy before I open the garden gate.

When my feet touch the pathway/ entrance foyer and see the lovely landscaping my desire to buy is enhanced.
As I enter the house and feel the ambience of the house envelop me I respond in a positive way to buy, if I feel emotionally comfortable in the space.

When I smell all the new house smells, it translates into 'fresh' 'clean' 'new' and who doesn't want to buy fresh new things.

When I close the door of the house I enjoy hearing the sound of silence, which is conducive to rest and recuperation after a hard days work.

Think about how you respond to each house you inspect as you go about gaining market knowledge. Do you see, it does not matter how many 'bibs & bobs' the place has ... if they don't feel emotionally comfortable in the place, they won't BUY!

Can you see why this is my number one topic?

So naturally I write about it a great deal in Residential Developmemnt Made Easy.

So now you have some idea why marketing starts as soon as you open your 'baby blue eyes' every morning ... marketing is a direct reflection of who you are and how you expresss yourself in creating beautiful livable space FOR HUMAN BEINGS.

The 'by-product' happens to be 'money.' And if you do it very well, it happens to be 'Lots of Money.


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Aon Benfield Achieves Flat to Decreasing Pricing on U.S. Reinsurance Programs for Clients, According to June and July 1 Renewals Report

Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation (NYSE: AON), today releases its Reinsurance Market Outlook – June & July 2011 Reinsurance Renewals Update report, which highlights the trends witnessed during both the June 1 and July 1 reinsurance renewals periods.

The report reveals that the renewals brought meaningful rate changes to regions affected by the significant catastrophe events of the first quarter, including the March 11 earthquake and tsunami in Japan, and the February 22 earthquake and aftershocks in New Zealand.

However, while the market and other reinsurance intermediaries reported price increases of up to 15 percent in less- or non-affected areas, Aon Benfield achieved rates of flat to -5 percent for its clients. On U.S. programs with co-broking arrangements, reinsurance pricing at renewal was significantly less favorable on average compared to those accounts where Aon Benfield acted as sole broker.

The different outcomes are a result of Aon Benfield's extensive analytical work into catastrophe events and their financial implications, and the strength of its advocacy in the reinsurance markets on behalf of its clients.

Key observations during the June and July renewals periods include:
June 1 catastrophe renewals consisted mainly of Florida and New Zealand programs – the pricing of Florida renewals was flat to -5 percent for Aon Benfield clients, which was directly in-line with the firm's guidance published April 1. New Zealand renewals pricing at June 1 increased more than 100 percent due to the large and still uncertain losses from the series of events in Christchurch.Florida accounts where clients opted for co-broking services averaged increases of 10 percent. Clients where Aon Benfield served as sole broker averaged decreases of 7.5 percent.  July 1 catastrophe renewals consisted mainly of national U.S. insurers, Australian insurers and those Japanese insurers that had extended their April 1 programs by three months.  The trends of June 1 continued into July with Aon Benfield achieving pricing of flat to -5 percent for its U.S. insurer clients, which was again directly in line with the firm's guidance published April 1.  Japanese programs renewed with price increases ranging from 30 to 50 percent.  Australian insurers' price increases ranged from 15 to 70 percent.Included in the results are certain anomalies – for example, reinsurers were not willing to reward insurers that cut exposure in key catastrophe zones with rate decreases that matched the pace of the decreasing exposures.  Reinsurers, however, were willing to increase pricing at a rate lower than the pace of growing catastrophe exposures for insurers that wrote more business. These anomalies were more noticeable in programs requiring significant capacity.

Bryon Ehrhart, chairman of Aon Benfield Analytics, said: "There was real debate in the approach to the June and July renewals periods about whether western European and U.S. insurers should pay more for their catastrophe capacity due to the significant loss activity seen in countries such as New Zealand, Australia and Japan. Based on our extensive analytical work, and the work we have undertaken on the ground in affected regions to achieve the most comprehensive perspective on the losses, we believed that these insurers should not pay more, and we were the sole voice advocating this position on behalf of our clients. By focusing on the facts, the capital position of the reinsurance industry, and not the emotion stirred in the market, we were able to navigate through a turbulent period and achieve differentiating client results."

Aon Benfield forecasts that pricing of U.S. property catastrophe renewals for the remainder of the year will be flat, assuming no additional occurrences of substantial insured and reinsured catastrophe losses.

The firm notes that the reinsurance market for renewals for the remainder of the year will be more sensitive to additional losses than last year given reinsured loss experience in 2011 to date.

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McCann Realty Increases Portfolio in Houston, Texas, Acquires Estancia at Shadowlake Apartments

McCann Realty Partners, LLC ("McCann") announced the acquisition of Estancia at Shadowlake in Houston, Texas.  The 324-unit, garden-style community located in the Alief/Westchase submarket of metropolitan Houston was built in 2005 and will be managed by Pegasus Residential, LLC.  The acquisition was funded in part by a seven-year Freddie Mac fixed rate loan with a rate of 4.42 percent originated by Wells Fargo Multifamily Capital.

"Estancia at Shadowlake is a Class A suburban garden community in an improving Houston submarket with the immediate opportunity to increase economic occupancy and cash flow," said McCann's Chief Investment Officer Brand Inlow.

"We see Houston as a good market that is getting better every quarter from very strong in-migration and job growth.  While the market will see new supply by the second half of 2012, there is very little new supply over the next 12 months," said John McCann of McCann Realty Partners.  "We liked the value we saw in Estancia at Shadowlake, which we acquired well below replacement cost with attractive Freddie Mac debt and the prospect for solid rent growth."

McCann is currently seeking apartment acquisitions in the Mid-Atlantic, Southeast and Texas. For more information, please contact Brand Inlow, Chief Investment Officer, at (804) 290-8870.

Formed in October 2004, McCann Realty Partners and its principals have decades of diverse experience in the apartment business. MRP teams with institutional capital sources to acquire, develop and manage garden apartment communities in the Southeast, Southwest and adjacent regions. By leveraging industry relationships developed during the past 40 years, MRP has demonstrated its ability to access capital and locate, finance and close apartment deals. The Company is in the market continuously to acquire both Class A and value-add apartment communities of 150 units or more.

Since inception, MRP has acquired 17 apartment communities totaling more than 4,100 units in transactions valued at approximately $325 million. The Company also develops apartment communities in Texas.  It is currently building in suburban Houston and is scheduled to start another community in north Dallas in the fall.

Wells Fargo & Company has integrated nationwide commercial real estate banking, capital markets, and advisory services into a single platform that includes lending, syndications, debt placement, equity raising and underwriting, M&A and servicing. Wells Fargo was ranked as the nation's largest commercial real estate lender and servicer by the Mortgage Bankers Association for 2010. Wells Fargo was named the largest issuer of preferred stock REIT equity and the largest domestic REIT and real estate bookrunner by Thompson Financial in 2010, as well as the most active brokerage of large commercial real estate sales in 2010 by Real Estate Alert.


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Energy Stocks Heat Up

Recently back from a trip to the Middle East, Casey Research Energy Division Chief Investment Strategist Marin Katusa shares some of his best energy investment opportunities. In this exclusive interview with The Energy Report, he explains why this is a good time to pick up uranium and geothermal stocks.


The Energy Report: As the Chief Investment Strategist for the Energy Division of Casey Research, you follow the whole range of energy segments and investments for your company. There have been quite a few changes on both the political and economic fronts since you spoke with The Energy Report last November. Can you bring us up to date on opportunities in your coverage area—petroleum, natural gas, uranium and geothermal?


Marin Katusa: When looking at the energy sector, one must start with petroleum, as that alone is a very large sector. Brent Crude is currently trading at a premium to WTI (West Texas Intermediate), mainly because of a political instability premium based on what's happening in the Middle East. Speculators have propped up the prices because of the amount of demand required from Europe, which comes from the Middle East. The WTI price has lagged as the differentials increased since February because of the Middle East turmoil.

That said, in the last three weeks you've seen a significant pullback on the petroleum sector market-wide, in the spot price of the oil and equities in both big caps and the juniors. The main reasons are the weak economy and the U.S. Energy Information Administration report stating, "$100+ per barrel (bbl.) oil is just too much of a burden in this fragile economy." That brings out the speculators, which comprises a 20%-25% premium in petroleum. Another reason for a big drop in the price of oil is that the United States is leading an international effort to release 60 million barrels (MMbbl.) of crude reserves to world markets.


TER: Natural gas is a little different story, isn't it?


MK: Natural gas is a very localized market. If you look at North America, because of the success of the unconventional technologies, mainly shale fracking, the companies are a victim of their own success. Because these unconventional explorers have been so successful in finding unconventional sources of gas, there is a glut of gas. But that, too, shall pass as the cure for low prices is low prices. It's just going to take some time—more time than most investors are willing to wait. We wrote a report a couple of years ago called, "The Hidden U.S. Supply of Gas." It shined a light on the thousands of uncompleted wells that are drilled, but not completed and could be tapped into the pipeline structure in 72 hours if they were viable. You're going to see sideways gas for the next 6-12 months in North America, and over the next 3 months you could see petroleum sideways to down.


TER: How about uranium in light of Fukushima?


MK: The uranium sector had a big fall, obviously, since the Fukushima disaster. Ironically, mainly by fluke, about 2.5 weeks before Fukushima, in our newsletter and on TV, we came out with a "take profits" opinion on the uranium sector mainly because we went very bullish on it eight months before. I think when this whole cloud has settled down, you're going to see some really interesting buying opportunities in a few very select uranium companies.

The uranium companies you want to stick with are the lowest cost producers with no debt and explorers with tangible, real deposits that are very high-grade in areas of developed infrastructure (a pro-uranium mining culture helps) with defined resources within the NI 43-101 standard that look like take-out targets. You want to stay away from the early stage exploration projects in areas that lack infrastructure. The smart money is staying away from those types of projects. In my opinion, those projects are going to go sideways to down because explorers will always need to raise money to explore.

It's a fact that the U.S. is the largest consumer of uranium, but the country only produces about 8% of that domestically. It purchases the rest. So there's still plenty of existing demand. The uranium story isn't dead, but an investor has to be much more careful in choosing investments. I'd also stay away from thorium. It's shocking how many emails I get about thorium. We've written about all the reasons to stay away from thorium quite a bit in our Casey Energy Report.

Back to uranium, you've got Germany, where Chancellor Angela Merkel just said, "We're going away from nuclear power" and the Japanese are saying the same. But you've got the RISC countries—Russia, India, South Korea, and China—and they're going nowhere. They're going to stick with the uranium demand that they have, and it will increase (they will be building nuclear plants fueled with uranium, not thorium).


TER: And what about geothermal?


MK: Now, the geothermals have taken a significant hit back, even though the current PPAs (power purchase agreements) provide significant profits. The actual public companies have taken a big fall following the Ram Power Corp. (TSX:RPG) disaster where they missed their wells and had cost overruns. Geothermal is currently a contrarian investment opportunity where these geothermal companies are trading at a fraction of what they were a year ago. I just wrote an article called "The Valley of Darkness" comparing the current geothermal sector to the copper sector in late 2008.


TER: So you think oil prices will be sideways in the next year because the market can't sustain these kinds of prices. Is that correct?


MK: If the Arab Spring does shift—and the key here is whether Saudi Arabia falls—you will see $150-$200/bbl. oil overnight. If something were to happen to the flow from the massive Ghawar oil field in Saudi Arabia, that would result in the single largest increase in oil prices the world has ever seen. Otherwise, oil is sideways to down. My point is that we really are on the edge of chaos. Saudi Arabia is very important to keeping oil below $150/bbl.


TER: You mentioned the possibility of opening up fracked natural gas wells. Is that going to go crazy any time soon?


MK: A moratorium exists on a lot of new shale gas wells due to concerns about water supplies. We did a report a few years ago where we talked about how an unconventional well uses between 2 and 5 million gallons of water, of that you get back roughly half. The Marcellus Shale, the Utica Shale, the Paris Basin—all of these basins have moratoriums on them because some people are worried about polluting the water table. The fracking occurs many thousands of meters below the water table so I think it is a misplaced fear, but you're dealing with politicians and NGO groups, so you aren't really dealing with facts or science. If these groups are successful, further moratoriums could be imposed, but it would be a crying shame if these moratoriums extended into the Haynesville Shale in Louisiana or the Eagle Ford Shale in Texas. I don't suspect we will see this happen, but if it did, you would see a significant pop in the price of domestic natural gas.


TER: Going to nuclear now, despite the Fukushima disaster, nuclear power is here to stay. How much effect is the current controversy over nuclear safety going to have on new plant development currently in the works?


MK: Global demand will be affected by countries such as Germany and Japan. They still have existing plants; remember they're going to be operating until 2022, in the case of Germany. A lot of this is political lip service; they're giving the people what they want to hear now. What are the Germans going to replace that production with?


TER: Well, maybe they think they can do it with solar?


MK: I don't think so. They're importing nuclear energy across the border from France. So, this is just political lip service. The politicians just want to stay in power long enough to get their juicy pensions. They don't care about—or even if they did care, they aren't able to find—real solutions, that is why they are politicians. I believe that before 2022 rolls around, the Germans will rethink their nuclear position. But remember, you have more than 20 nuclear plants being built in China; you've got South Korea, Russia and India looking to develop. So let's just imagine that Germany and Japan do close down, whatever they shut down is going to be replaced by growth in other countries.


TER: Who will benefit from continued demand for uranium? Which uranium stocks do you think are going to continue to be attractive under the current scenarios?


MK: Let's start with Uranium Energy Corp (NYSE.A:UEC), one of the lowest cost producers in the world. It has been a big win for our subscribers a few times, and it is a new producer led by Amir Adnani, who is in our "Ten bagger" club—a club for companies that delivered 1000+% gains for our subscribers.
I also like Denison Mines Corp. (TSX:DML; NYSE.A:DNN) a lot. It has production in the U.S. and access to a mill in the Athabasca Basin, which hosts one of the highest grade uranium projects on the planet. They made a major discovery at their Phoenix deposit—a very, very high-grade deposit. So, that's a blend of low-cost production and high-grade deposits. We have a lot of technical research on both of these companies on our website at www.caseyresearch.com , as we've been to their projects, and our subscribers have done well on both of these companies.

If you want a higher risk story, we like Hathor Exploration Ltd. (TSX.V:HAT). We have had that in our portfolio for many years and they've made a great discovery of a high-grade deposit. So those are the three that we have in our Casey Energy Report that we follow.


TER: Any new developments with those companies?


MK: Uranium Energy Corp. has hit the numbers that they gave the public regarding production costs and are actually lower than originally stated—less than $18/lb. The company is growing production to 1 Mlb. annually. It's very important to know that yes, the spot price of uranium has taken a big hit, but the spot market price is still north of $50/lb., and the long term price trades north of $70/lb. The netback—the differential between what the selling price and the production costs—are still very impressive profits.


TER: Any other juniors you think have merit at this point?


MK: In our Energy Confidential, we really like Fission Energy Corp., which is adjacent to the Hathor deposit. The play there is that we believe that Hathor will buy out Fission so that they can have a large consolidated resource. At that point, we think Hathor will have over 60 Mlb. of very high-grade uranium. From there we believe the play would be that Denison will buy out the combined Hathor and Fission company.

The ultimate end game in the Athabasca Basin, we believe, would involve BHP Billiton Ltd.. There's good potential that they want access into the Athabasca Basin, and the only way that they can do that would be through access to a mill. It's very difficult to get the permits to build a mill in the Athabasca Basin. Either it buys out Cameco Corp., which is not going to happen; or the big French uranium company AREVA (PAR:CEI), sells an interest, which is not going to happen; or it buys Denison Mines, which owns a percentage of an operating mill.

So the key to the play there for the juniors like Hathor and Fission is to be bought out by a larger company. That's why we like Fission, it has good management that discovered a very good project.


TER: The geothermal sector is obviously quite a bit smaller than the other energy sectors, but people are taking another look there also. There seems to be a lot of potential out there, but it's not so easy to capitalize on it. What's going on with the companies that you follow there?


MK: In our Energy Opportunities Newsletter, we follow Ormat Technologies Inc. (NYSE:ORA), the world's largest, pure-play geothermal company. If you want lower risk, you probably want to stick with Ormat. If you've got an appetite for a higher risk junior, we think Alterra Power Corp. (TSX:AXY), which is Ross Beaty's deal, is a good play. It's the old Magma Energy merged with Plutonic Power Corp. Alterra just received $70M+ cash from the sale of a portion of their Iceland asset. They're very sound; they make money. It's one of the few junior companies that can stay afloat because it actually makes money. It has a sustaining business and Ross Beaty has done a great job building that. Don't ever count out Ross Beaty, the guy is a legend. In time, he will build AXY into a winner. Investors have to be patient; the geothermal sector right now isn't the place for fast money.

Ram Power seems to be fixing itself up here. It fell on its knees when founder and President Hezy Ram left after missing targets and cost overruns. The company has restructured the management, refinanced it and so far the results look promising. It still has to build up its San Jacinto plant and the geysers seem to be going on track. So, time will tell with Ram. It's been very disappointing, but so far, it seems like they're headed in the right direction.

Nevada Geothermal Power Inc. (TSX.V:NGP; OTCBB:NGLPF) has built the largest geothermal plant in the U.S. in the last decade. The company just bought out some Iceland assets in California. The geysers and the joint venture with Ormat on the Crump Geyser property in Oregon is moving as expected. So, all of these companies are doing the right things now, except the market is not reflecting it because no one really cares about it. It's the unloved energy sector. The companies are cheap, but their time will come. We don't know when it will happen, but because it is such a small sector, there are only a handful of companies, so when it does get attention these stocks are going to trade up multiples from where they are today.


TER: Years ago I visited the Geysers geothermal production facilities northeast of San Francisco. Who owns that now?


MK: I believe you are talking about the facilities about 100m northeast of San Francisco that are owned by Calpine Corp. (NYSE:CPN). The geysers are the largest group of geothermal plants in the world and Calpine has some good assets and production, but geothermal production is a very small percentage of Calpine's overall electricity production. Their main electricity plants are natural gas. It's a very large company; they've done very well, and they've got a good portfolio of geothermal assets.


TER: So, that's not a clean geothermal play by any means.


MK: No, and that's why we've avoided Calpine. If you want exposure to the geothermal sector, that's not the one you want to be in.


TER: Are there any other companies you would like to bring up at this point that you think our readers should be looking at?


MK: I think in general you want to stick with management teams that are proven; they've done it before; they're heavily invested in the companies themselves and they have a focus factor. One of my favorite companies right now is a company called East West Petroleum Corp. (TSX.V:EW). The company just signed a massive deal in Romania with a large energy company called NIS, which is more than half owned by the Russian gas company Gazprom. NIS is going to drill 12 wells on their unconventional gas assets in Romania, which is over US$50M worth of exploration on EW 100%-owned assets over the next 24 months. The company also signed a deal in India with three of the four largest Indian energy companies and has a deal in the Middle East with one of the largest independent oil producers, Kuwait Energy Corp. You want to stick with a company whose management team can attract a major company and use the major company's money to develop the assets that they own. It's kind of like the joint venture model in mining, the OPM, where you use other people's money. East West is a company we really like, and own a lot of shares.

Another one we really like is Niko Resources Ltd. (TSX:NKO). It's a much larger company, but we believe in the next 12-18 months they're going to have a lot of news coming out on their drill programs. In this market, it's time to pick your favorite stocks and be patient; put in your stink bids and see if you get a hit. Unfortunately, the company has recently gotten itself into some trouble that will cost it about CASD$10M-CAD$12M in fines. That's very disappointing, but the assets sure look good.


TER: Yes, it's summertime and nobody cares about the market.


MK: It's also the time to be accumulating your favorite stocks on sale. Buy on fear; sell on greed.


TER: Do you have any other thoughts you would like to leave with our readers?


MK: I think the reality of the sector is, regardless of what happens with the equities in the near term, if you're patient, the solid companies will grow their assets and either produce higher cash flows or get bought out by a major who needs to replace reserves. So, just because the market right now has a lot of negative sentiment, we look at this as a buying opportunity to pick up more shares of your favorite companies. They're on sale right now. Fortune favors the bold. Just make sure you do your homework and control your emotions. Don't let the fluctuations in the stock price take a toll in your personal life. Don't invest more than you can afford to lose. Juniors stocks are risky, but if invested in the right management teams, the risk is definitely worth the potential rewards.


TER: That's certainly true. Thanks for taking time out of your busy schedule to talk with us today. We appreciate your thoughts and input and hopefully our readers will also find them useful.


MK: Thanks for the opportunity.
Investment Analyst Marin Katusa is the senior editor of Casey's Energy Report, Casey's Energy Opportunities and Casey's Energy Confidential. He left a successful teaching career to pursue what has proven an equally successful—and far more lucrative—career analyzing and investing in junior resource companies. With a stock pick record of 19 winners in a row—a 100% success rate last year—Marin's insightful research has made his subscribers a great deal of money. Using his advanced mathematical skills, he created a diagnostic resource market tool that analyzes and compares hundreds of investment variables. Through his own investments and his work with the Casey team, Marin has established a network of relationships with many of the key players in the junior resource sector in Vancouver. In addition, he is a member of the Vancouver Angel Forum, where he and his colleagues evaluate early seed investment opportunities. Marin also manages a portfolio of international real estate projects.


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Top 5 Must-Read Money Books

Knowledge is power. If you’re reading this blog, then chances are you serious about the journey to financial freedom. Fortunately, lots of incredible books have been written by people who have walked this path, and their combined wisdom and insights can help us navigate this path. I have read hundreds of books over the last few years ranging in topic from entrepreneurship, personal finance, economics, and trading. Here I provide a list of 5 really good books that deal with the topic of money.


Rich Dad Poor Dad by Robert Kiyosaki
This book is not necessarily very advanced in its information, but does provide great insights for people just beginning on the journey to financial independence. Basically, Kiyosaki communicates the primary differences between people who accumulate liabilities and those who accumulate assets. Asset accumulation is truly the path of wealth creation. Getting that principle fixed in one’s mind is reason enough to read this book. He also talks about business specifics such as how a company can access business cash advances and other forms of credit.


The Four Hour Workweek by Timothy Ferriss
This is one of my all-time favorites. Ferriss was a young entrepreneur making tons of cash, but draining away his life and energy, as he slaved away 80 hours per week. After several years of this crazy lifestyle, he reached the end of his rope. He abruptly decided to cut relationship with his most problematic, time-consuming clients, automate as much of his business as possible, and travel the world. He did it, and his business started making more money than ever, increasing his net working capital. After he traveled the world for over a year, managing his company from remote locations, he came back to the States and wrote this book, which details how he did it. He also discusses how you can start your company with or without business cash advances. It’s inspiring, practical, and informative.


Fooled By Randomness by Nassim Taleb
Now, this book is not necessarily about money, per se, but I feel that it is essential reading for anyone interested in success, specifically financial or business success. Taleb spent his life as a quantitative trader on Wall Street, and he watched countless people rise and fall, financially. In this book, he communicates his ideas of how much of a role randomness plays in our lives, and how to approach life from a risk/reward perspective. Again, this is not necessarily the most practical book, but just check the reviews on Amazon, and you will see that it’s worth reading.


Think & Grow Rich by Napoleon Hill
When it comes to finding true, financial independence, writing out a very clear, detailed plan concerning how you will do this is essential. Hill’s book has been a classic for over 70 years. In it, he offers readers incredible insights into how they can formulate a plan for the accumulation of riches. Hill was charged by Andrew Carnegie in the early 20th century to interview the richest, most successful people in America in order to identify common characteristics. Hill noticed that nearly every person he interviewed had grasped hold of the power of intentional thought, planning, and other tools. In Think & Grow Rich, he communicates his findings in compelling fashion.


Your Money Or Your Life by Vicki Robin
This book is utterly practical. Robin communicates a 9 step plan that involves taking a retrospective look at how you have managed finances in the past, how you are managing them currently, and the books ends with specific, practical advice on how to proceed and write out a plan for financial success. She also discusses how to find your net working capital each month. This book has helped inspire thousands of people to begin on their journey to financial freedom, but the beauty of this book is that it is not simply inspirational with no substance—the practical steps and guidance are extremely effective.

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Minor Metals Investing Ups and Downs

The critical metals space is shifting. In this exclusive interview with The Critical Metals Report, Dr. David Trueman, a consulting geologist, points to opportunities in global mining, processing and recycling of "-um" metals for growing electronic applications.


The Critical Metals Report: You started your geological career as a smelter mechanic in Thompson, Manitoba in 1962 before moving into academia, government, industry and latterly, consulting. The New York Times, the U.S. Government and investors have suddenly woken up to the importance of critical metals—minor, strategic and rare earth elements—for everything from miniaturization of motors to high-powered magnets for alternative energy and military applications. Has your background given you a deeper understanding of the explosion of interest in these materials?


David Trueman: Every geologist should have some metallurgy background in the same way geologists should spend time in mining—to see what's involved in the winning of metals. In the otherwise small business of rare metals, it is important to be conversant with all the processing steps, from exploration to markets.


TCMR: Many of these "-um" metals that you refer to are not well known to the typical lay person. But the products they are used in—cell phones, miniature motors and computer chips—comprise almost everything that plugs in. One area that hasn't had as much attention is minor metals. I believe you call them smokestack metals or refinery metals. What is the investment potential for this class of metals?


DT: We have moved into an electronic and a green age. The upside investment potential is large, but as specialized as some of the metals themselves. Some of these metals are mined, concentrated and purified through chemical processes. Others, such as some of the electronic metals, are recovered from smokestack emissions before refining. In some ways, their winning seems counter-intuitive.


TCMR: Are these metals usually mined as a pure play or could we get all of these metals through recycling or as byproducts of other mining process?


DT: Some of these metals, such as tantalum or zirconium, could be considered pure plays. They are concentrated, perhaps taken into solution, refined or separated and end up being used in near pure form. Others, such as tellurium, germanium and indium—what I call the smokestack metals—may occur with copper, zinc, lead, and tin deposits where the base metal is the primary product. These minor metals occur in very small, parts per million (ppm), amounts and they're recovered as byproducts, demand and price permitting. Gallium, a different example, is recovered as a byproduct of aluminum processing. It's very much in demand, but to get exposure to gallium, you would have to invest in an aluminum company. Quite a different investment from that in a junior miner. There is not a lot of leverage.


TCMR: If demand for gallium were to skyrocket, wouldn't aluminum companies become much more valuable?


DT: You would think it would report to the bottom-line, but in the bigger picture it's probably a very minor component. If you were to find a gallium pure play company you'd have quite a bit of leverage. There are juniors out there that have gallium deposits containing hundreds of ppm gallium. In contrast, the bauxite ores that gallium is extracted from may run 10, 12 or 14 ppm gallium levels.


TCMR: What is gallium used for?


DT: Gallium is used in gallium arsenide computer chips and solar cells. It has also been looked at as a substitute for mercury in dental fillings. Gallium, like mercury, is liquid at room temperature. It can be used for improved thermometers, providing a wider temperature range than a mercury device. But the application is limited because the supply is so limited. About 25 years ago, I received a phone call from an engineer looking for 40 tons of gallium. In his naivety, he was asking for 3.5 years of the world's gallium supply. It would have stressed the price enormously.


TCMR: In addition to gallium, what are some of these other minor metals that have interesting technology applications?


DT: Indium is a good one. Its first usage 100 years ago was to depress alloy solidification temperatures—or eutectic point—in lead crankshaft bearings for example. Today, it is in demand for applications such as mobile phone touch screens, video displays and phosphors in light-emitting diodes.


TCMR: Are there any primary indium mines? I know of some indium-silver mines in South America, but are there any pure indium juniors out there?


DT: There are no primary indium producers. A large supply of indium comes from treating zinc ores and tin ores. If a company were to find a silver or zinc deposit with indium or germanium in it and ship the ore to a smelter, it might even be penalized for the minor metal contents, let alone receive compensation. The processing could be considered metallurgically bothersome rather than a credit. These are things that would certainly have to be addressed by a junior mining company in valuing an ore.


TCMR: You would think that the presence of a substance such as indium, which is used in all these high-tech devices, would add a lot of value to a junior mining company's asset mix.


DT: Yes, it would certainly add significantly to a junior mining company's revenue stream; it would really leverage the value of the ore deposit if the ore can be processed and those metals recovered. As demand goes up, more pressure will be applied for a credit on those contained metals if the ore were to be toll processed or custom treated. Historically, there has been only one primary gallium-germanium mine that I am aware of and it treated its own ore with solvent extraction processing.


TCMR: Are indium, germanium, gallium and tellurium similar in their chemical composition and applications?


DT: I like to call these electronic metals. Their chemistry is different as they are different elements, but they all do similar good things to computer chips and solar cells. Their functions aren't new. One of Einstein's hobbies was playing around with photo emissive devices. However, they've just come into their own in the past two decades or so. About 20 years ago, the price of gallium was running around $400/kilo and germanium was $200/kilo. Ten years ago, someone developed a faster computer chip using germanium and the price immediately flip-flopped. Germanium took off but gallium halved in price.


TCMR: We haven't heard much about these minor metals as investment plays. Is it because they are required in such small amounts that companies are able to acquire them readily through byproduct processing? Are there supply and demand issues?


DT: Until very recently, no one in the end-use arena knew anything about them. Those in the manufacturing sector deal with many of them on a daily basis. At the moment, indium and germanium are in equilibrium. Gallium is always verging on being stressed and tellurium is a big problem at the moment. Historically, tellurium has occurred in quantities of about 1oz. of tellurium:1oz. of gold. Gold is pretty rare, and in fact there is no primary tellurium production and most is recovered from base metal processing.


TCMR: What is tellurium used for?


DT: Tellurium is used in solar panels and solar cells because of higher efficiencies over other technologies.


TCMR: What are some of the other interesting metals for investors?


DT: I think hafnium is one to watch. Hafnium was largely considered a contaminant until recently. For decades hafnium was recovered and used exclusively by the U.S. Navy in nuclear submarines and aircraft carriers for reactor shielding. It has now found its way into computer chips and superconductors. Hafnium occurs naturally at about 1or 2 ppm hafnium:98 ppm in zirconium minerals. Hundreds of thousands of tons of zirconium are processed in the world each year, but the amount of hafnium produced would be in the 10s of tons/year.


TCMR: How can investors track minor metals prices when none of them are traded on the London Metal Exchange? How do investors get a sense of the supply and demand dynamics?


DT: That is difficult. Even using the most liberal rare metal definitions, for many, their annual consumption may be about 100 tons or less, per year. So, these commodities are traded as you or I might buy or sell a house or car. We agree on a price and that price may or may not be posted. So, it's very difficult to find out what deals are taking place and hence, the value of the transaction. You could start with things like the U.S. Geological Survey Commodity Reports. The historical prices going back a few years are fairly accurate. For current data, there are publications like Metal Pages or Asia Metals where price changes are noted daily.


TCMR: What is your advice for investing in tantalum or niobium juniors? Are these metals impacted by demand from electronic devices?


DT: Tantalum, for example, has the highest dielectric constant of all of the elements. That allows its use in electronic capacitor miniaturization. It's a valuable metal, about 40 percent of which is consumed in electronics. We've been watching the price rise from $30/lb. to several hundred dollars over the past year as sources of supply from African countries are being cut by legislation against conflict sources. Interesting things are happening in the tantalum business as a result. On the other hand, niobium, which also has a high dielectric constant, is much more susceptible to temperature ranges so it isn't suitable for many military or automotive uses. It is also much more readily available.


TCMR: What tantalum and niobium companies are interesting?


DT: More than 80% of the world's niobium has come from the Araxá Deposit in Brazil. More recently about 70% of the world's tantalum was coming from the Greenbushes and Wodgina deposits in Australia. That is changing.

The tantalum business is in turmoil as new supplies are being identified in Africa, although some of that may become contraband material or what's called blood tantalum. Small mining companies are popping up in Mozambique, Tanzania, Australia and Brazil. It's an interesting field and a myriad of small players offer exposure to a tantalum pure play. At the same time, large, low grade tantalum mines have been having, or are having problems coming on line.

Perhaps the best source of information on tantalum and niobium, and a good place for a new investor to look, is the Tantalum Information Center.


TCMR: Is there a chain of custody so electronics manufacturers can mark some of these minor metals to ensure that they are produced in a humane matter?


DT: It is an important issue. Tantalum is often a byproduct of tin smelting. We have been seeing tantalum—or tin concentrates—coming out of Africa being smelted in Thailand or Malaysia and losing its fingerprint. The source is erased, if you will. From there it could enter the tantalum markets, be put into capacitors and sold to computer manufacturers.


TCMR: Are HP, Dell and Microsoft concerned about the human rights implications on behalf of customers?


DT: Yes. Computer manufacturers and other electronic suppliers are actively supporting NGOs such as the Electronic Industry Citizenship Coalition (EICC) and the Global e-Sustainability Initiative (GeSI) to ensure that electronic metals are not coming from conflict sources.

Another problem is that because of the small annual tonnages, prices can be manipulated. As far back as 1980, tantalum prices were run up artificially from $12 to $110 before collapsing. Rumors of a shortage for Nokia phones and Sony PlayStations in 2000 drove the price of tantalum ballistic. We're now seeing perhaps as much as 40% of the supply of tantalum being squelched by the identification or tagging of contraband tantalum concentrates—and the price of tantalum is starting to reflect that.


TCMR: Of all these minor metals—indium, germanium, tantalum and gallium—which ones do you think have the most investor opportunity?


DT: All of them. We are competing with China for all of these metals. They would rather sell you a finished flat screen television than the metals to make your own. They are going to be major consumers of all of these metals.


TCMR: Are they using these materials in manufacturing products for their own use or for export or both?


DT: Both for internal consumption and for export purposes. I think all of these metals have a terrific demand upside coming. We're just getting started, if you will, in the electronic age. Miniaturization or substitution are perhaps threats to an investor. Certainly, substitution could blindside investors in a lot of these metals. Nanotechnology may also cut volumes required.


TCMR: Well, one thing that we are sure of is that the consumer demand for the latest, greatest gadget is insatiable.


DT: Which brings up recycling. Consumers want the latest handheld device and throw away the old ones. Recycling is certainly green and laudable, but it's not without its hazards. Companies entering into, or entertaining recycling should be aware that some of these electronic devices may contain beryllium alloys or, for example cobalt samarium alloys. We are all familiar with silicosis, or asbestosis, but few are aware of berylliosis or cobalt-related diseases that could arise through lack of precautions.


TCMR: Aren't the Chinese and Indians doing a lot of recycling, possibly using child labor? Even though we aren't recycling inhumanely, aren't we shipping most of our recycled electronic products to third-world countries for processing?


DT: Yes we are. When I visited China for the first time in 1983, it was the largest ship-breaking nation in the world. They were doing it solely to recover the copper in wiring. I think that role has now gone to India and they are exposed, for example, to asbestos from insulation. There are reports of recycling of those castoff e-devices, but I don't think, outside of scrap from the original manufacturing stages, that any of it is re-entering the markets. Most of the research I encounter for recycling of the more exotic metals is conducted in Japan. Elsewhere, I have seen large tonnages of stockpiled neodymium iron boron and cobalt samarium alloys that would cost more to ship to a recycling facility and process, than the value of the contained metals that would be recovered.


TCMR: So, do you see a potential business opportunity for a company in North America to get seriously into the electronic recycling business?


DT: Yes. I think there is a terrific opportunity there. It is a business that will grow.


TCMR: You've given us a lot to think about. Thank you very much for your time and your thoughts.
Dr. David Trueman started his geological career as a smelter mechanic in Thompson, Manitoba in 1962, the year Inco blew in its new converters. In the intervening 49 years, Dave has spent time in academia, government and industry—the last 37 years specializing in the "rare metals" field.

Dr. Trueman's interest in rare metals stemmed from examination of geological structural controls of granitic pegmatites and in 1977 he joined Tantalum Mining Corp. of Canada (TANCO) which at that time was producing about 70% of the world's newly won tantalum. He entered the junior mining sector in 1983 and the rare metals have since taken him through the Arctic in Canada, Greenland, the US and Russia, to Australia, Namibia, South Africa, India, the People's Republic of China, Brazil, Saudi Arabia, Spain, France, Wales, Denmark, Germany and throughout North America. His work has focused on beryllium, tantalum, niobium, lithium, rubidium, cesium, the lanthanide and rare earth elements, indium, gallium, germanium, tellurium, zirconium, hafnium, chromium, vanadium and titanium.


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Six Super Art Investment Tips

1. Know what to expect
In recent times fine art has gained popularity as a hedge against the volatile fluctuations that have plagued the more mainstream financial markets such as the stock market.  The fact that fine art is a tangible object and can be traded for money in any currency also appeals to investors who have large amounts of money in intangible products and markets that use virtual or electronic market places.  As well as the financial benefits associated with the purchase of art as an investment, there is also the enjoyment you will get from purchasing and owning a piece of fantastic fine art, which is why it is important to purchase something that you actually like.

If you are expecting to score large and fast profits from investing in fine art then fine art is not the investment for you. If, however, you are looking for a long term investment in a tangible object that can be enjoyable, educational AND potentially profitable if approached in the right way, fine art is definitely something you should consider investing in.  Before you whip out the credit card there are some things you need to know about the art market and art investment. 

First of all, the nature of the art market means that art investment needs to be approached as a long term investment that will usually require a minimum holding period of seven to ten years – but be prepared to sell sooner if market conditions are favourable. 

Secondly, the cost of selling fine art tends to be quite high so one needs to factor in those costs when deciding whether to sell or not. 

Thirdly, it is extremely important to remember that fine art should be approached as a way of diversifying an investment portfolio and should form part of a balanced portfolio.


2. Buy the best you can afford
When it comes to deciding what to buy it is important to remember that when purchasing art as an investment you should always purchase the best that you can afford.  This means that it is better to purchase a really excellent drawing or limited edition print than to purchase a mediocre painting. At the end of the day, a top quality original work on paper or limited edition print will always be more desirable than a mediocre painting.  It is also extremely important to purchase something that you would actually be happy to live with should the value of the work of art you have purchased fail to increase in value or, in a worst case scenario, go down in value.  If have purchased something you like and it does go down in value, at least you can still enjoy the work of art.

There is really no minimum amount of money that one needs to spend to invest in art, however, the more money you spend, the more options you will have, and the more likely the work/s you are buying will increase in value.  Limited edition prints or photographs by emerging artists can be purchased for as little as a few hundred pounds, but stand much less chance of increasing in value than a ten thousand pound drawing by a well known artist.  Essentially, the more you spend, the less risky the investment, and the greater the chance of receiving a higher return.  The more well known blue chip artists who have plenty of art historical and curatorial backing are going to be a much safer investment, but will also be require a considerably higher outlay to begin with.  Less well known emerging artists who are at the beginning of their career require a much smaller initial investment, but are also a much more risky investment as they do not have a proven track record.  To be honest, anyone can “invest” in art as long as they have extremely low expectations, but to stand a chance of actually seeing a proper worthwhile return on your investment I would suggest a minimum figure of ten thousand pounds.  The reason I suggest ten thousand pounds is that ten thousand pounds will buy a good quality photograph, drawing or limited edition print by a desirable artist.


3. Get involved
The best way to find out where, when and what to buy is to get to know people who are involved in the fine art world.  Go to gallery openings, visit museums, attend auctions and art fairs, befriend curators and engage with artists.  Not only will you get advice from these art market insiders, you are also likely to get opportunities to purchase works from sources that would normally not be available to the average art buyer. 

Getting to know collectors and the artists they support can open the door to an artist’s studio where you may be able to purchase a work of art directly from the artist for less than you would pay in a gallery or at auction; befriending a curator or gallerist might get you access to works that are not usually made available to the general public; getting to know an auction house representative is a good way of finding out what the current trends are and which artists are worth investing in.  There is no doubt that the most successful art investors are those who are able to use the knowledge and expertise of other people to make informed, rational and justifiable decisions.


4. Think outside the box
If you have a limited income that would not allow a ten thousand pound investment then you may have to look outside the box to find something worth purchasing.  Artists often experiment with a range of different mediums even though they may be particularly well known for one medium in particular.  By thinking outside the box and looking at alternative mediums that an artist may have worked in, one can find some interesting and highly desirable works of art by well known artists for relatively small sums of money.  For instance, did you know that Picasso produced quite a number of limited edition ceramic objects that can be purchased for as little as a few hundred pounds? Picasso ceramic works are particularly desirable and present a rather interesting alternative for those who have a more limited budget.


5. Buy from a reputable source
Auction houses, galleries and art fairs are the best sources of investment quality fine art.  Although it may be tempting to just jump on ebay, the high number of fake and fraudulent works of art sold online make going to a reputable dealer who will guarantee the authenticity of what you are buying well worth the extra effort.  That is not to say that I would never recommend purchasing works of art online.  If you are going to purchase online you need to make sure that you are purchasing from a reliable source that has an excellent reputation and will provide a written guarantee of authenticity.  Regardless of whether you are purchasing from a dealer or online, it is well worth getting the opinion of a few experts before deciding what to purchase and where to purchase from.


6. Build a collection
Once you have purchased your first piece of fine art it is likely that you will be bitten by the bug and want to buy more.  By building a collection based around a particular theme, movement, artist or medium, you can develop a certain level of expertise and knowledge that will help make future purchases much easier.  Developing a collection is an enjoyable and rewarding process that also encourages a certain amount of discipline and connoisseurship that will help you make more rational and justifiable decisions – decisions that are more likely to result in the purchase of works that will increase in value.


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"Keep living like a college student" and other tips for your 20s

In his book Personal Finance in Your 20s for Dummies, best-selling author and award-winning columnist Eric Tyson explains what a twentysomething needs to know about personal finance. He covers such topics as developing a budget, reducing debt, making informed investment decisions, and getting an early start on saving.

We recently had the opportunity to interview Mr. Tyson, who shares some of the same saving and investing philosophies.


Eric Tyson: Some challenges are specific to the current economic environment. The unemployment rate for the United States right now is quite high. It's especially high among younger people—which is typically what happens in a recession, but this time it's even more severe. And the costs of goods and services keep rising. College, of course, is increasingly expensive. Today, a lot of kids are graduating from college with larger debts than previous generations. For those reasons and others, there are some unique financial challenges that exist today.

Over the years, it's become obvious that the principles of sound personal-financial management apply to everyone—regardless of marital status, ethnicity, race, or gender. Yet there's something unique about folks just getting out of college and entering the working world for the first time. This seems especially true for the generation coming up now that's been so indoctrinated into the world of technology and online access.


Eric Tyson: It depends on what kind of debt we're talking about. If you've accumulated high-cost consumer debt, like on a credit card, you absolutely, positively want to get rid of that debt as quickly as you possibly can.

If you've taken on debt for college, in my view, that's good debt. It's generally available at a relatively low interest rate. So paying that off over time per the terms of the loan is a reasonable thing to do.


Eric Tyson: I think one of the most important things for a person to do is to take a look at where they're currently spending their money. Get out your checkbook, your online banking information, your credit card statement—anything that will help you document where you're spending money in a typical month. And that's where the rubber begins to hit the road for most people, because you can figure out in which of these areas you're most willing to make a reduction.

When I graduated from business school, a professor who knew I wanted to become an entrepreneur gave me this advice: "Keep living like a college student." Think back to when you were in college: You had roommates to share the rent, and you probably weren't spending a lot of money. There's no reason you can't maintain the positive aspects of that lifestyle in your 20s. You need to fight the temptation you may feel from your peer group to get an expensive apartment (or car), live in the nicest part of the city, and spend all the money that you're earning. Doing that is really foolish, probably going to restrict the options you have open to you in the future, and most likely going to handicap your ability to save and invest money.


Eric Tyson: For most people, saving for retirement in your 20s is probably not very enticing. What I found a more powerful motivator for most folks is when they realize how much of their employment income is being siphoned off in taxes. You don't think of retirement savings accounts as tax-reduction accounts, but in many cases, your contributions are not taxed at either the federal or state level. So for every $1,000 you can contribute into these accounts, you may be able to save yourself hundreds of dollars in taxes. None of us enjoys paying taxes, and if you can reduce your tax bill by contributing to a retirement savings account, somehow the idea of putting money away for the distant future becomes more appealing.

It also makes sense to start saving money in your 20s because you've got many decades ahead of you where that money can compound and grow. And the nice thing about retirement accounts is that the investment earnings are sheltered from taxation, which is another bonus.


Eric Tyson: Many people have access to retirement savings plans through their employers, and those plans typically offer diversified mutual funds, so that can be a useful way to go. Investing in index funds is a way to get broad diversification and keep your costs low. Keeping your investment costs down can enhance and improve your returns over time, which makes sense because those investment costs are deducted from your returns.

You also need to make saving a priority. It should be the first thing that you do. Ideally you should be contributing to an investment plan or retirement account automatically. That way it's deducted from your paycheck, so you don't even have to think about it. It's not something where you wait until the end of the month and then see if there's money left over. I like people to save first and then manage what's left, because then you're forcing yourself to truly live within your means. Now over time, you may have to play with the savings percentage that you're trying to target. I would encourage people to start off with a modest amount and then, if they're able to, build it up over time. Rather than saying, I want to save 15% of my income, start with maybe 5%. If you're comfortable doing that for several months, then you can begin to increase that number. It's also a good idea to take advantage of any matching contributions your employer may offer.


Eric Tyson: People of all ages, but especially younger people, may at times feel a little bit overwhelmed dealing with financial decisions. I think the key is to educate yourself and then begin to develop a to-do list. Don't expect that you're going to finish that to-do list tomorrow or next week or even next month. It might take you a number of months to really optimize your financial situation. The good news is that once you're able to do that, it really shouldn't take a lot of time in the future. Also, it's important to develop and continue to enhance your investment IQ. Saving money and living within your means is great, but if you don't know how to invest your money, you could be making easily avoidable mistakes.

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