Kwame J. Granderson has a multi-million dollar real estate portfolio and is a seasoned wealth-building consultant who has helped thousands of “ordinary” citizens achieve financial security. He regularly conducts free informational seminars throughout Southern California, and has established a strong presence in the real estate community for his safe, yet effective, real estate investment strategies focused on the single family housing market.
With a mission to help educate consumers on the important elements of real estate transactions, Mr. Granderson recently created the Real Estate Smart Guides: Homebuyer Series. Whether you’re a first time homebuyer or a seasoned investor, the Real Estate Smart Guides: Homebuyer Series was designed to clearly explain everything from qualifying for a loan to structuring the right insurance policy. This series will help people become comfortable with real estate terms, explain mortgage options, and make them aware of many of the pitfalls homeowners face when signing documents that they don’t understand.
Mr. Granderson has dedicated his life to vision, innovation and hard work –a consistency which is evidenced by his educational achievements. In addition to completing Harvard Law School with honors, Mr. Granderson earned his undergraduate degree from UCLA with a degree in English and graduated with top honors. He also attended Harvard Business School and the John F. Kennedy School of Government. Mr. Granderson is a member of the California State Bar and is licensed by The State of California Department of Real Estate and The Florida Department of real estate.
8/18/10
7/18/10
Ever wonder how investors are making money in today's market?
Many successful real estate investors follow a strategy for each opportunity that exists in every cycle of the real estate market. It just so happens, many of them are raising capital and producing profit using various methods found in the Art of Control.
Today
1. The real estate market is flooded with foreclosures and as a result home prices have dropped dramatically.
2. With the right tools, information resources, and knowledge anyone can learn how to raise capital using the Art of Control System.
3. The system inlcudes everything you need to structure your own real estate deals, find and acquire below market property, produce profit, and split returns with your money partners.
Today
1. The real estate market is flooded with foreclosures and as a result home prices have dropped dramatically.
2. With the right tools, information resources, and knowledge anyone can learn how to raise capital using the Art of Control System.
3. The system inlcudes everything you need to structure your own real estate deals, find and acquire below market property, produce profit, and split returns with your money partners.
Home Prices Surge
The California Association of Realtors' (C.A.R.) most recent market data indicates a rather surprising price rebound in home prices despite continuing mortgage defaults and foreclosures. The figures for May 2010 show an increase of 23.2% in the median home price when compared with the same period last year. "Home sales posted their third largest increase on record for May, due in part to first-time homebuyers who timed the open and close of escrow in order to capitalize on both the federal and state tax credits," commented C.A.R. President Steve Goodard.
The median price of an existing, single-family detached home in California in May 2009 was $263,440. As of May 2010 it was $324,430. Goodard attributes this jump in part to the lower than average Unsold Inventory Index. The Unsold Inventory Index historically runs about 7 months, meaning it would take about 7 months at the current rate of transactions to absorb all of the property on the market. Currently the Unsold Inventory Index is at 4.6 months.
When this index drops significantly below 7 months it means that houses are not sitting on the market very long and sellers can afford to demand more for their properties. The median number of days on market for a single-family home was 39.8 days in May 2010 as compared to the historical average of about 53 days. A 39.8 days-on-market average is a pretty hot buying environment.
Most of this heat, however, was caused by the homebuyer tax credits. Generous tax credits obviously are not sustainable over the long term. So, the current data makes it difficult to diagnose the real health of the California housing market. How many days would property really sit on the market with no incentives? How much inventory would really be building?
This staggering year-over-year appreciation can also be attributed to the fact that thirty year fixed rate mortgages are still below 5% making mortgage payments extremely affordable.
Seems to me that what we are witnessing is something akin to the initial bounce of a ball dropped from a significant height. The market fell so far so fast that one would expect an initial surge in prices as homebuyers jumped on the opportunity to buy a home in California for $263,440 with an $8,000 tax credit representing approximately 3% of the purchase price. Keep in mind that the tax credit , which in many instances was combined with a credit from the seller, constituted most of the downpayment.
More reliable market data will emerge as the tax credit stimulus is removed from the market.
The median price of an existing, single-family detached home in California in May 2009 was $263,440. As of May 2010 it was $324,430. Goodard attributes this jump in part to the lower than average Unsold Inventory Index. The Unsold Inventory Index historically runs about 7 months, meaning it would take about 7 months at the current rate of transactions to absorb all of the property on the market. Currently the Unsold Inventory Index is at 4.6 months.
When this index drops significantly below 7 months it means that houses are not sitting on the market very long and sellers can afford to demand more for their properties. The median number of days on market for a single-family home was 39.8 days in May 2010 as compared to the historical average of about 53 days. A 39.8 days-on-market average is a pretty hot buying environment.
Most of this heat, however, was caused by the homebuyer tax credits. Generous tax credits obviously are not sustainable over the long term. So, the current data makes it difficult to diagnose the real health of the California housing market. How many days would property really sit on the market with no incentives? How much inventory would really be building?
This staggering year-over-year appreciation can also be attributed to the fact that thirty year fixed rate mortgages are still below 5% making mortgage payments extremely affordable.
Seems to me that what we are witnessing is something akin to the initial bounce of a ball dropped from a significant height. The market fell so far so fast that one would expect an initial surge in prices as homebuyers jumped on the opportunity to buy a home in California for $263,440 with an $8,000 tax credit representing approximately 3% of the purchase price. Keep in mind that the tax credit , which in many instances was combined with a credit from the seller, constituted most of the downpayment.
More reliable market data will emerge as the tax credit stimulus is removed from the market.
7/15/10
7/13/10
Art of Control Boot Camp
We'd like to invite you to our new one day boot camp.
Raising Capital and Structuring Real Estate Deals on Saturday, July 17, 2010
8:30am - 4:30pm
You'll Learn How to:
· Identify Unique Sources for Raising Capital
· Structure Real Estate Deals in New and Effective Ways
· Exercise Control without Ownership
· Earn Maximum Returns without using Your Own Credit or Capital
Kwame J. Granderson, J.D., author of "The Art of Control: Business Principles and Legal Concepts" and "Thinking in the Millions", will present a one day boot camp focusing on raising capital and unique ways to structure real estate investment deals.
Special Guest Speaker Leonard Manriquez, CEO of Commercial Asset Management will cover various topics on the facilitation, liquidation, and selling of commercial real estate
properties.
What Others are Saying
"I don't think I've ever learned more in one day ever in my life."
"Most incredible knowledge and presentation, explanations and articulation was extraordinary."
"I left last night completely empowered and confident in my potential for success in this area."
"I will be talking about this and implementing it for my lifetime."
"Incredible A-Z. You truly are presenting the tools needed to succeed."
Location and Registration Info
Saturday, July 17, 2010
8:30am - 4:30pm
1074 PARK VIEW DRIVE, SUITE 201, COVINA, CA 91724
Regular Price $299
Special Discounted Price Only $99
Call Fernanda to Register (310) 714-7045 or
email info@theartofcontrol.com
Kwame J. Granderson
Raising Capital and Structuring Real Estate Deals on Saturday, July 17, 2010
8:30am - 4:30pm
You'll Learn How to:
· Identify Unique Sources for Raising Capital
· Structure Real Estate Deals in New and Effective Ways
· Exercise Control without Ownership
· Earn Maximum Returns without using Your Own Credit or Capital
Kwame J. Granderson, J.D., author of "The Art of Control: Business Principles and Legal Concepts" and "Thinking in the Millions", will present a one day boot camp focusing on raising capital and unique ways to structure real estate investment deals.
Special Guest Speaker Leonard Manriquez, CEO of Commercial Asset Management will cover various topics on the facilitation, liquidation, and selling of commercial real estate
properties.
What Others are Saying
"I don't think I've ever learned more in one day ever in my life."
"Most incredible knowledge and presentation, explanations and articulation was extraordinary."
"I left last night completely empowered and confident in my potential for success in this area."
"I will be talking about this and implementing it for my lifetime."
"Incredible A-Z. You truly are presenting the tools needed to succeed."
Location and Registration Info
Saturday, July 17, 2010
8:30am - 4:30pm
1074 PARK VIEW DRIVE, SUITE 201, COVINA, CA 91724
Regular Price $299
Special Discounted Price Only $99
Call Fernanda to Register (310) 714-7045 or
email info@theartofcontrol.com
Kwame J. Granderson
7/11/10
The Infamous Shadow Inventory
The Infamous Shadow Inventory
This title sounds like I am writing about merchandise that was hijacked in Gotham City while Batman was taking his cape to the dry cleaners, but unfortunately it's not fiction. It's very real and pretty serious. Shadow inventory is the combination of bad loans sitting on lender balance sheets as well as real estate foreclosed on by lenders that have not been put back on the market. It's referred to as shadow inventory because it is not quite inventory on the market in the traditional sense of an REO listing on the multiple listing services, but it casts an ominous shadow over the market because of its potential to become such inventory. Its shadowy nature also results from the fact that it defies precise analysis and assessment because the lenders are not entirely forthcoming about how much of this stuff they have on their books.
SNL Financial estimates that the foreclosed properties portion of the shadow inventory held by lenders is approximately $41.5 billion. That's up from $36.9 billion at the end of 2009. Properties in various stages of the foreclosure process but not actually owned by the lender totals $78.6 billion which also represents an increase from last year of 9%.
If all foreclosure activity ceased today, the current shadow inventory would take 3-4 years to clear out. The long tail of the shadow inventory suggests a slow protracted recovery, but the bigger concern would be the problem of dumping. If lenders began for any reason dumping significant quantities of their REO's on the market in a short period of time they could further destabilize the market. By dumping, I mean listing massive numbers of houses on the multiple listing services simultaneously with REO listing agents. Such a flood of REO listings would cause prices to drop even further and cause ordinary listings to sit longer.
I have attended several panel discussions that included bank executives and bank economists as part of the panel. Consistently the consensus has been that lenders will not dump their shadow inventory on the market because it would erode the stability of their remaining portfolio even more. That clearly would be the rational position but we have seen some pretty irrational things happen in this market. As of right now it appears that the shadow inventory is building. Hopefully, the lenders can continue to absorb it without having to take drastic measures, as they have done up to this point. Otherwise we may be pointing a searchlight rigged with a symbol of a bat into the evening sky.
This title sounds like I am writing about merchandise that was hijacked in Gotham City while Batman was taking his cape to the dry cleaners, but unfortunately it's not fiction. It's very real and pretty serious. Shadow inventory is the combination of bad loans sitting on lender balance sheets as well as real estate foreclosed on by lenders that have not been put back on the market. It's referred to as shadow inventory because it is not quite inventory on the market in the traditional sense of an REO listing on the multiple listing services, but it casts an ominous shadow over the market because of its potential to become such inventory. Its shadowy nature also results from the fact that it defies precise analysis and assessment because the lenders are not entirely forthcoming about how much of this stuff they have on their books.
SNL Financial estimates that the foreclosed properties portion of the shadow inventory held by lenders is approximately $41.5 billion. That's up from $36.9 billion at the end of 2009. Properties in various stages of the foreclosure process but not actually owned by the lender totals $78.6 billion which also represents an increase from last year of 9%.
If all foreclosure activity ceased today, the current shadow inventory would take 3-4 years to clear out. The long tail of the shadow inventory suggests a slow protracted recovery, but the bigger concern would be the problem of dumping. If lenders began for any reason dumping significant quantities of their REO's on the market in a short period of time they could further destabilize the market. By dumping, I mean listing massive numbers of houses on the multiple listing services simultaneously with REO listing agents. Such a flood of REO listings would cause prices to drop even further and cause ordinary listings to sit longer.
I have attended several panel discussions that included bank executives and bank economists as part of the panel. Consistently the consensus has been that lenders will not dump their shadow inventory on the market because it would erode the stability of their remaining portfolio even more. That clearly would be the rational position but we have seen some pretty irrational things happen in this market. As of right now it appears that the shadow inventory is building. Hopefully, the lenders can continue to absorb it without having to take drastic measures, as they have done up to this point. Otherwise we may be pointing a searchlight rigged with a symbol of a bat into the evening sky.
Home is Home
For decades American families have defined progress as a bigger home. Home builders accommodated this desire for more space and more bedrooms by acquiring land outside of major metropolitan areas and erecting suburbia. Homes went from 1500 sq. ft., to 1800, to 2100 and finally the average size of single-family homes completed in the United States peaked at 2,521 square feet in 2007. That's a big house relative to houses built 30 years ago. Along with more square footage came additional bedrooms and bathrooms. The proportion of single-family homes with three bedrooms increased from 49% to 53% between 2005 and 2009 according to National Association of Home Builders Chief Economist David Crowe.
These additional bedrooms didn't necessarily accommodate more children, instead they often became home offices. The justification, of course, being that the internet and other advances in technology allow more professionals to work from home. Eventually, home offices became a standard selling point whether the prospective homebuyer worked from home or not. New homeowners demanded islands in their appliance filled kitchens even when nobody in the family really enjoyed cooking. Instead, these islands became staging areas for Chinese takeout as individual family members gobbled down their food standing up.
The housing crisis halted this trend towards ever increasing home size in two ways. First, first time homebuyers are being held to much stricter underwriting standards. In other words, they are being limited to buying only what they can actually afford. Second, homebuyers looking to trade up to a bigger home have a lot less equity to work with. They are no longer in a position to come in with huge down payments to bring the mortgage payments down to a more affordable level.
These two factors combined to compel prospective homebuyers to revisit what really matters in a home. How many bedrooms are really necessary for a comfortable lifestyle? How big does a kitchen need to be to prepare a meal for the average American family?
At least for now, it seems that we should regard ourselves as among the fortunate if we can simply afford the house we are currently in, regardless of the size.
These additional bedrooms didn't necessarily accommodate more children, instead they often became home offices. The justification, of course, being that the internet and other advances in technology allow more professionals to work from home. Eventually, home offices became a standard selling point whether the prospective homebuyer worked from home or not. New homeowners demanded islands in their appliance filled kitchens even when nobody in the family really enjoyed cooking. Instead, these islands became staging areas for Chinese takeout as individual family members gobbled down their food standing up.
The housing crisis halted this trend towards ever increasing home size in two ways. First, first time homebuyers are being held to much stricter underwriting standards. In other words, they are being limited to buying only what they can actually afford. Second, homebuyers looking to trade up to a bigger home have a lot less equity to work with. They are no longer in a position to come in with huge down payments to bring the mortgage payments down to a more affordable level.
These two factors combined to compel prospective homebuyers to revisit what really matters in a home. How many bedrooms are really necessary for a comfortable lifestyle? How big does a kitchen need to be to prepare a meal for the average American family?
At least for now, it seems that we should regard ourselves as among the fortunate if we can simply afford the house we are currently in, regardless of the size.
7/10/10
Honda
Honda Wants Your Love
I attended a private dinner hosted by a wealthy Japanese businessman to foster increased cultural awareness between the Japanese and American business communities. For several years, this businessman had hosted this wonderful event at a private club in Los Angeles, but this evening was to be the last as he had decided to retire to Japan and spend more time traveling for pleasure with his wife. To round off what was an absolutely delightful evening, a senior executive from the Honda Corporation was invited to give a brief talk on the subject of Honda's phenomenal growth from a third rate automotive company 30 years ago to an automotive powerhouse. The presentation offered so many valuable insights into Honda's corporate culture that every business school in the country would probably benefit from the lessons he shared. But one point struck a deeper cord for me than I expected at the outset of the evening. The speaker explained that at Honda they take a three day egalitarian retreat where both senior and lower level managers are invited to discuss every aspect of the company business philosophy and corporate vision.
What I found particularly fascinating was that one of the more important topics discussed at these retreats is the topic of love, more specifically, the nature of love. At first blush, the idea of a group of Japanese businessmen sitting in a steam room discussing the nature of love might elicit a chuckle until you recall that out of these retreats came a business model that in about 40 years transformed a small automotive company into a multinational automotive juggernaut that has now surpassed Nissan in Japan and Chrysler in the United States.
The reason so much of the retreat is devoted to the nature of love is because they have discovered that if you understand what makes a person love their car you know what your research and development focus should be. Soichiro Honda, the founder of Honda Motor Company, was a self-taught engineer who dropped out of school to take an apprenticeship at an automobile servicing company. In 1946 after World War II he founded the Honda Technical Research Institute and shortly thereafter founded Honda Motor Company. Because he is an engineer by training, forward thinking research and development has always been a key to Honda's success and profitability. During the speech we were told that this line of inquiry allows Honda to envision what customers will want in car 5, 10, even 20 years from now. And here's the key-the retreat doesn't work unless you really debate what love really means. This is not some fluff exercise until you get to the real business at hand.
When I say debate, I mean screaming matches that leave people really pissed off at the end of day one. When I say debate, I mean people not being able to sit next to each other day two because they are still trying to cool down from day one. But by day three they gained insights that changed the lives of millions. According to the speaker, when he presented to American automotive executives at the big three automakers and asked what American consumers might want 10 years from now the rooms invariably went silent.
I attended a private dinner hosted by a wealthy Japanese businessman to foster increased cultural awareness between the Japanese and American business communities. For several years, this businessman had hosted this wonderful event at a private club in Los Angeles, but this evening was to be the last as he had decided to retire to Japan and spend more time traveling for pleasure with his wife. To round off what was an absolutely delightful evening, a senior executive from the Honda Corporation was invited to give a brief talk on the subject of Honda's phenomenal growth from a third rate automotive company 30 years ago to an automotive powerhouse. The presentation offered so many valuable insights into Honda's corporate culture that every business school in the country would probably benefit from the lessons he shared. But one point struck a deeper cord for me than I expected at the outset of the evening. The speaker explained that at Honda they take a three day egalitarian retreat where both senior and lower level managers are invited to discuss every aspect of the company business philosophy and corporate vision.
What I found particularly fascinating was that one of the more important topics discussed at these retreats is the topic of love, more specifically, the nature of love. At first blush, the idea of a group of Japanese businessmen sitting in a steam room discussing the nature of love might elicit a chuckle until you recall that out of these retreats came a business model that in about 40 years transformed a small automotive company into a multinational automotive juggernaut that has now surpassed Nissan in Japan and Chrysler in the United States.
The reason so much of the retreat is devoted to the nature of love is because they have discovered that if you understand what makes a person love their car you know what your research and development focus should be. Soichiro Honda, the founder of Honda Motor Company, was a self-taught engineer who dropped out of school to take an apprenticeship at an automobile servicing company. In 1946 after World War II he founded the Honda Technical Research Institute and shortly thereafter founded Honda Motor Company. Because he is an engineer by training, forward thinking research and development has always been a key to Honda's success and profitability. During the speech we were told that this line of inquiry allows Honda to envision what customers will want in car 5, 10, even 20 years from now. And here's the key-the retreat doesn't work unless you really debate what love really means. This is not some fluff exercise until you get to the real business at hand.
When I say debate, I mean screaming matches that leave people really pissed off at the end of day one. When I say debate, I mean people not being able to sit next to each other day two because they are still trying to cool down from day one. But by day three they gained insights that changed the lives of millions. According to the speaker, when he presented to American automotive executives at the big three automakers and asked what American consumers might want 10 years from now the rooms invariably went silent.
Market Update
Market Update
Notices of default filed in the first quarter (Q1) of this year are clearly down from the same period last year according to ForeclosureRadar.com.
Number of Notice of Default (NODs) Filings; Q1 2009 - Q1 2010
January
2009: 40,580
2010: 25,904
February
2009: 49,799
2010: 31,309
March
2009: 58,623
2010: 33,139
This meaningful decline in filings suggests that maybe the worst is behind us. Since banks are not consistently filing notices of default for every loan that is actually in default, it is too early to breathe a sigh of relief. In addition, some economists are still predicting another possible waive of defaults. In short, we are not out of the woods. Nevertheless, if this trend continues it could indicate stabilization in delinquency in the housing markets which bodes well for an overall market turn-around.
Considering there's an improvement in delinquency, the worsening of home values creates a mixed message. Still, it's an overall improvement.
Kwame Granderson
Notices of default filed in the first quarter (Q1) of this year are clearly down from the same period last year according to ForeclosureRadar.com.
Number of Notice of Default (NODs) Filings; Q1 2009 - Q1 2010
January
2009: 40,580
2010: 25,904
February
2009: 49,799
2010: 31,309
March
2009: 58,623
2010: 33,139
This meaningful decline in filings suggests that maybe the worst is behind us. Since banks are not consistently filing notices of default for every loan that is actually in default, it is too early to breathe a sigh of relief. In addition, some economists are still predicting another possible waive of defaults. In short, we are not out of the woods. Nevertheless, if this trend continues it could indicate stabilization in delinquency in the housing markets which bodes well for an overall market turn-around.
Considering there's an improvement in delinquency, the worsening of home values creates a mixed message. Still, it's an overall improvement.
Kwame Granderson
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