1. The Future Trends of Real Estate Lynchburg VA October 19, 2011

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3. My Goal is to Inspire and Educate 10 Million People by January 1, 2015

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5. Invest in your future.

6. 3 Keys to Success 1. Your Mindset 2. Your Skill-set 3. Your Actions 1. Your Mindset 2. Your Skill-set 3. Your Actions

7. Housing Market and Economic Outlook Lawrence Yun, Ph.D. Chief Economist NATIONAL ASSOCIATION OF REALTORS® Greenbrier Resort, WV September 11, 2011

8. U.S. Annual Existing Home Sales

9. Monthly Existing Home Sales Tax Credit Impact

10. State and Local Government Jobs (600,000 job cuts over 3 years)

11. Federal Government Jobs (110,000 job gains over 3 years)

12. No interest Rate Hike till 2013!

13. CPI Inflation Rising (% change from one year ago) Social Security COLA forecast to rise 3.5% in 2011 Workers Wage to rise by 1.7% in 2011

14. U.S. Housing Starts Housing Starts in thousands

15. Newly Built Home Inventory (40 year lows) In thousands

16. Improving Factors for Higher Home Sales Job Creation (though slowly) Stock market recovery from 2008 Rising rents and large pool of qualified renters Buyers want distressed properties … at deep discounts International buyers cashing in on the weakened dollar Smart money chasing real estate

17. Financial Asset at $45 trillion … Good Recovery from 2008 Source: Federal Reserve

18. Housing Equity Down (funds for small business owners) Source: Federal Reserve

19. CPI Apartment Rent

20. Home Price vs Rent (index = 100 in 1980)

21. Serious Delinquent Mortgages … Mostly Borrowers prior to 2009 (90+ days late or in foreclosure process) In 2010, there were 1.5 million distressed sales … need to wait 2.7 years

22. Distress Sales: 30% to 40% of Transactions Will Remain Significant for Next 2 years

23. Very Low Default among Recent Homebuyers Fannie and Freddie Backed Mortgage Loan Performance Fannie Mae Vintage Cumulative Default Rate after 18 months 20023.1% 20032.5% 20044.6% 20054.8% 200611.6% 200728.7% 200812.6% 20091.2% Freddie Mac Vintage Cumulative Default Rate after 18 months 20022.7% 20031.2% 20042.0% 20051.8% 20066.0% 200722.3% 200813.7% 20091.1% Source: Federal Housing Finance Agency

24. Smart Money Buying Real Estate 2011 - 35% of all sales CASH! Investors want quick deals Investors cannot get mortgage Some do not want to bother with appraisals Financial asset recovery helping with cash

25. Hedge against future inflation Hedge against future housing shortage? Empty nesters downsizing and using leftover cash for kids’ home Upper-end market beginning to move Smart Money Buying Real Estate

26. Real Estate as Inflation Hedge? (single-family home price in blue vs CPI in red) Good inflation hedge in the past

27. Broad Inflationary Pressure Indicator% change from one year ago Consumer Price Index3.6% Producer Price Index (Finished Product)7.2% Producer Price Index (Intermediate Product) 11.8% Producer Price Index (Crude Product)22.2% Dow Jones Commodity Spot Price Index38.1% Gold PriceAround Record High Price

28. Consumer Confidence Index (Predicts Presidential Election Outcomes)

29. Average Credit Score for Loan Origination Normal20092010If Fannie720761762720 Freddie720757758720 FHA650682698660 15% to 20% Higher Sales

30. Real Estate Baseline Outlook GDP 1.5% to 2.5% next 2 years 1.0 - 1.5 million annual job additions Mortgage Rates rising 4.7% 2011 5.5% in 2012 Not that important compared to underwriting standards

31. Home sales slight increases next two years Home values – steady and slow growth 2 years critical source of small business start-up funds Commercial vacancy rates falling Real Estate Baseline Outlook

32. www.FHFA.gov

35. Lynchburg VA Appreciation

36. 2011 Actual Depreciation Lynchburg VA 4.1%

37. Average 10 Year Appreciation for Lynchburg VA is 4.3% per year

38. Lynchburg VA homes have appreciated 43% over the last 10 Years!

39. www.PMI-US.com/ECON

41. Economic Real Estate Trends over the next 24 Months Affordability index 100 = 1995 Affordability Level Appreciation Index –Appreciation projected for next 24 Months

42. 99.9% Chance of Depreciation! Less than.1% Chance of Appreciation!

43. Score of 100 = 1995 Housing Affordability

44. <1% Chance of Depreciation! 99% Chance of Appreciation! <1% Chance of Depreciation! 99% Chance of Appreciation!

45. Score of 100 = 1995 Housing Affordability

46. 2010 Market Risk Index Lynchburg VA 42.3% Chance of Depreciation 57.7% Chance of Appreciation!

47. 2011 Market Risk Index Lynchburg VA 27.4% Chance of Depreciation 72.6% Chance of Appreciation! 27.4% Chance of Depreciation 72.6% Chance of Appreciation!

48. 2010 - 2nd Quarter Lynchburg VA PMI U.S. Market Risk Index Affordability Index = 143 (100 = 1995 Affordability)

49. 2011 - 2nd Quarter Lynchburg VA PMI U.S. Market Risk Index Affordability Index = 169.7 (100 = 1995 Affordability)

50. Lynchburg 11 Year Sales

51. Absorption Rates

52. “There are only a certain number of houses that will sell in any given period of time. Would you like to see the ODDS of your house being one of them?

53. Absorption Rate 12 homes sold in the last 12 months means that the market will absorb 1 per month If there are 10 on the market there is a 10 month supply

54. A 6 month supply is a balanced market!

55. Housing Market Flow New Listings Sold Houses Best Value Shown & Offers Made Shown but No Offers Not Being Shown Stagnant Mass

56. We become so protective about the price of our home we may harm ourselves in the process! They can be just like a dog protecting a bone…

58. Learn how to calculate Absorption Rate! Audio CD Available

59. Absorption Rate - Lynchburg VA

61. Lynchburg VA # Closed in last 12 months1,764 ÷ 12 = Average Monthly Sales 147 Active homes TODAY 1,883 ÷ Average Monthly Sales (1,883 ÷ 147) = Months Supply 12.8 Is it a Buyers or Sellers Market?

62. Lynchburg VA 6 Month Market Trend # Closed in last 6 months1,029 ÷ 6 = Average Monthly Sales 172 Active homes TODAY 1,883 ÷ Average Monthly Sales (1,883 ÷ 172) = Months Supply 11 Is it a Buyer’s or a Seller’s Market?

63. Lynchburg VA 3 Month Market Trend # Closed in last 3 months505 ÷ 3 = Average Monthly Sales 168 Active homes TODAY 1,883 ÷ Average Monthly Sales (1,883 ÷ 168) = Months Supply 11.2 Is it a Buyer’s or a Seller’s Market?

64. Lynchburg VA 6 Month Odds of your House Selling # Closed in last 6 months 1,029 ÷ Closed + Active + Exp + WD = 3,590 Odds of Your House Selling in 6 Months = 29%

65. As long as… NO OTHER HOUSES ENTER THE MARKET!!

66. Bedford County, VA # Closed in last 12 months 482 ÷ 12 = Average Monthly Sales 40 Active homes TODAY 512 ÷ Average Monthly Sales (512 ÷ 40) = Months Supply 12.8 Is it a Buyers or Sellers Market?

67. Bedford County, VA 6 Month Market Trend # Closed in last 6 months 293 ÷ 6 = Average Monthly Sales 49 Active homes TODAY 512 ÷ Average Monthly Sales (512 ÷ 49) = Months Supply 10.5 Is it a Buyer’s or a Seller’s Market?

68. Bedford County, VA 3 Month Market Trend # Closed in last 3 months 162 ÷ 3 = Average Monthly Sales 54 Active homes TODAY 512 ÷ Average Monthly Sales (512 ÷ 54) = Months Supply 9.5 Is it a Buyer’s or a Seller’s Market?

69. Bedford County, VA 6 Month Odds of your House Selling # Closed in last 6 months 293 ÷ Closed + Active + Exp + WD = 976 Odds of Your House Selling in 6 Months = 30%

70. As long as… NO OTHER HOUSES ENTER THE MARKET!!

71. Forest (24551) # Closed in last 12 months244 ÷ 12 = Average Monthly Sales 20 Active homes TODAY 229 ÷ Average Monthly Sales (229 ÷ 20) = Months Supply 11.5 Is it a Buyers or Sellers Market?

72. Forest (24551) 6 Month Market Trend # Closed in last 6 months146 ÷ 6 = Average Monthly Sales 24 Active homes TODAY 229 ÷ Average Monthly Sales(229 ÷ 24) = Months Supply 9.5 Is it a Buyer’s or a Seller’s Market?

73. Forest (24551) 3 Month Market Trend # Closed in last 3 months78 ÷ 3 = Average Monthly Sales 26 Active homes TODAY 229 ÷ Average Monthly Sales (229 ÷ 26) = Months Supply 8.8 Is it a Buyer’s or a Seller’s Market?

74. Forest (24551) 6 Month Odds of your House Selling # Closed in last 6 months 146 ÷ Closed + Active + Exp + WD = 457 Odds of Your House Selling 32%

75. As long as… NO OTHER HOUSES ENTER THE MARKET!!

78. Census.gov Lynchburg VA Housing Source: U.S. Census

79. Return on Investment Dow S&P Nasdaq Lynchburg VA Residential Housing Jan 1, 2000 – May 31, 2011 MSN Money.com, IHS Global Insights

80. “If you don’t own a home, buy one. If you own one home, buy another one. If you own two homes, buy a third. And, lend your relatives the money to buy a home.” John Paulson 9/27/2010

81. How Money Works 7 Financial Lessons I Learned Working in the Garden with My Mother Zan Monroe

82. Building wealth is like growing a garden. It is simple…but it takes time!

83. Lesson # 7 “Real Estate is the only REAL Investment.”

84. When is the Best Time to Plant a Shade Tree?

85. Real Estate Investment Questions Do you own a home? Has it been a good investment? What would my net worth be like if I owned 10 of them? What would your lifestyle be like if they were all free and clear?

86. Assets vs. Liabilities Assets put money into your pocket Liabilities take money out of your pocket

87. If you could invest $1,000 and make $10,000… How much would you invest?

88. Investment pyramid

89. 4 Returns on Real Estate Investments 1. Rental Income 2. Debt Reduction 3. Appreciation 4. Depreciation –Tax Savings

90. Purchase Investment Property Paid in full

91. Creating Wealth Time Living Expenses Income Investment

92. Wealth = Income Producing Net Worth 1.Build your personal income 2.Keep your personal spending low 3.Keep 80-90% of your investments in income producing assets 4.Rented Houses, Townhouses and Condos

93. Real Estate Financial Independence Strategy Buy quality break even or positive cash flow properties with 20-25% down Have the tenants pay off the debt Your Goal is to own rental properties free and clear Appreciation is a Bonus!! Buy quality break even or positive cash flow properties with 20-25% down Have the tenants pay off the debt Your Goal is to own rental properties free and clear Appreciation is a Bonus!!

94. Residential Rental property paid for is the most powerful investment available No risk No Debt Appreciation Depreciation Income Producing

95. Real Estate Investment Choices Employees are W-2 workers – Self Directed IRA REALTORS are 1099 Workers – Profit Sharing Plan

96. Self Directed Individual Retirement (IRA)

98. When is the second best time to plant a shade tree?

99. Join us tomorrow for Ninja Selling! 8:30am 99

100. Invest in your future.

101. Free Downloadable Information