michael sterios asked:


The Bank of England has slashed the Base Rate in previous months to an all time low. The reasoning behind this was to alleviate some pressure on current home owners and to help rejuvenate the financial economy hoping the banks would begin to lend money again. It is still too early to tell if the drastic measures of the Bank of England were necessary, but the short term effect show okay results.

For those individuals that have a variable, or floating, rate mortgage, the reduction in base rate will increase their cash flow significantly. If you have a £500,000 mortgage and were paying 1% above the Base Rate, your mortgage payment in September 2008 would have been £2997. In June 2009, your mortgage payment would be £1,725. The change in base rate will save you £1,272 per month in mortgage payments.

The Bank of England was hoping that the savings in mortgages would help consumers spend the saved money in other areas, such as the automobile industry or the retail industry. Unfortunately, statistics have not shown a considerable increase as of yet. Most experts believe that it is because people are concerned about the future and are saving their money. Unfortunately, the low base rate means that savings accounts are paying practically nothing in the way of interest.

While the base rate has helped those on a variable rate, it has made those people with a fixed rate mortgage look into remortgaging their property. Fixed rate mortgages, while safer in a time of rising rates, are not nearly as attractive looking right now, in this time of decline. As mentioned previously, with a savings of potentially over £1,000 per month, it is worth it for those on a fixed rate mortgage to seriously consider looking into remortgaging.

It is an uncertain time and the economy is still struggling, but no one knows how low the Bank of England is willing to cut the Base Rate. As of June 2009, it can not go much lower. Even more caution is given to thinking about when the Bank of England will raise rates. This is more concerning to individuals with variable rate mortgages. The unknown nature of the rates market is what makes it so frustrating, yet so exciting.

Once the rates begin to rise, more people will want to obtain a fixed rate mortgage, so that their mortgage payments do not start to increase every month. It is knowing when to make the change that is the big gamble. If you make it too early, you lose out on taking advantage of extremely low rates. If you make the switch too late, your fixed rate will be higher.

Currently the low base rate is affecting the remortgage area of the UK mortgage market the most. It is allowing those on a fixed rate to take advantage of a lower variable rate. Until banks begin to lend significant amounts in the consumer market arena, the effect on new mortgages will not be seen.



Wilma

Sean Flanagan asked:


If you want to truly succeed as a real estate investor, you need to disregard the majority of the marketing advice being promoted by the “I can teach you to walk on water overnight” guru real estate investor crowd. If you really want to reach the real estate investing Promised Land, you’re going to have to quit worshiping at the altar of the guru investors. They’re very good at marketing themselves and their overpriced, ineffective real estate investing courses, but if you want to really launch your career into the stratosphere you’re going to have to find a better way.

I’m not saying the gurus completely miss the boat; they’re just going about it the wrong way. For instance, some of the guru investors have correctly identified direct mail as a way to reach motivated sellers. Unfortunately, in their quest to profit off of their naïve students, many of them have cut corners and broken a cardinal rule of marketing: Stand out from the crowd.

Imagine for a moment that you’re a distressed homeowner. You’re stuck with a mortgage you can’t afford or you own a home that needs repairs you can’t make. You walk to your mailbox to retrieve your mail and mixed in with a stack of bills, late notices, high rate credit card offers and solicitations from cash advance companies are two small postcards. Here’s what the first one says:

“Behind on your mortgage payment?

We can help!

Call 1-800-555-5555”

Not very inspiring, is it? How likely would you be to give that postcard more than a passing glance before pitching it in the trash? Now look at the second postcard.

“Is your banker offering to swing by your place with his pickup truck this weekend to help you move? If late payments or other problems have you between a rock and a hard place, we can help. And we can do it now. Call 1-800-555-5555 to find out how we can throw you a life jacket and save you from drowning.”

If both of these postcards are fighting for your attention, which one is more likely to grab your attention? That’s right – the second one. Now for the million dollar question: Do you know why the second postcard would be more effective? In short, it’s more interesting, original, and compelling. Thousands of real estate investors are wasting their hard-earned money on marketing strategies that just don’t work. The concept of a postcard is effective, but the message is broken and needs to be replaced with something fresh, compelling, and attention grabbing.

I’m not suggesting that you should necessarily use the exact message that is on this postcard. What I’m saying is that you need to develop your own original message that will cut through the clutter and capture the attention of your prospect. If the message on your postcard is identical to the message on every other postcard that shows up in their mailbox it’s going to be ignored. You’ll be wasting your time and your money.

The same holds true when mailing letters to distressed homeowners. The average real estate investor seems to think that if John Q. Homeowner can’t make his payments and is facing foreclosure, that the instant your letter shows up in his mailbox, he’s going to drop to his knees, raise his hands in the air, and thank God for sending you his way.

Newsflash: That’s simply not going to happen. The average homeowner facing this situation typically handles it the way they do when they begin seeing signs that their marriage is headed south. They pretend there’s nothing wrong while they silently worry. Doing nothing is easier than taking action, and as long as they do nothing there’s a chance that things could miraculously turn around at the last second.

Your letter has to hit him (or her) between the eyes and grab their attention. It can’t be a generic one OF a million letters. Your piece also can’t be all about you, your experience, or how great you (think) you are. What it has to do is get their attention by making an emotional connection and showing them in no uncertain terms that there’s a benefit to them in calling you. In short, your letter is essentially a sales letter, but you can’t make them feel as if they’re being sold.

Can you do this? Can you effectively cut through the clutter and in the span of one or two pages demonstrate your expertise and your willingness to help them while making it worth their while? If you can, you’re ahead of all the other form-letters that fill their mailbox.

If you can’t, you need to find a way.

Either learn how to write an effective letter or postcard or hire someone who can. Your future as a real estate investor is riding on your ability to make a connection and demonstrate the benefits to them of working with you to solve their problems.

Get creative in the way you use direct mail in real estate investing. Otherwise you’ll be just as creatively challenged as the guru real estate investor you’ve been listening to. The only difference will that he or she will have all your money – and you’ll be no closer to closing a real estate deal. Don’t let that happen. Take control of your life and your future or you’ll be the best failed real estate investor at your next REIA meeting.

That would be a tragedy.



Peter