Merry Christmas to all

It's Christmas once again. A time to reflect on one's faith if you are Christian, and a time to reflect on life's wonder if you are of other faiths.

Here's the in-law side of the family, back in Virginia, where once again we are poised to travel the always unfriendly skies in search of some respite, good ol' family cooking, and perhaps some snow to top off the holiday.

My wife Beth's parents are growing older (and what, we're not?), and each year it seems we grow closer to each other because we have learned this past year at least one, and perhaps many more things about each other. For my part, this has been year of seeing how dignity is confirmed in a person's life. Both Beth's parents are suffering from some serious medical problems, and yet it is with grace and total giving that they spend their time with us.

Just remember it's Christmas TIME. Money and status will pass, but each moment we allocate to those we love gift wraps a little bit more of ourselves to that person.

May your Christmas TIME be with those you love.

You have to ask for help

I met with some clients today that I can help. Boy, if I only had the time to tell you all the stories about the clients I didn't meet, simply because they didn't ask for help!

You may be one of these folks, or almost for certain you know someone. Someone who is renting, getting further behind in the financial world because they are seemingly unable to save and grow wealth through real estate. Someone who wishes they could buy a home, but who just simply doesn't know or won't ask for help.

If you are reading this, and if you are someone who dreams of a home, but just doesn't see the possibility coming your way soon......call.

If you are reading this, and if you know why folks who want a home, dream of a home and potentially could have a home, don't ask.....call.

And if you are reading this, and if you know HOW to get the word out.....call. Perhaps it's the way we are deluged with financial information, scams, etc., that keeps away those who would benefit most.

Equity sharing is not a common term among real estate folks, and I think the reason for that is simply one of lack of knowledge on their part. So, if like myself you always want to at least KNOW the limits of your capabilities either as a buyer, seller or real estate person, please comment on what you want to know about this concept.

It's hardly an EOD

I took a young couple out looking for homes today. First time we had met, and our initial introduction had been through my web site and a couple of emails.

In the course of our meeting I engaged in my usual convivial chatter, finding out in small snippets where they were from, what they were dreaming, and of course, what they "did for a living." Now an old philosopher, Soren Kierkegaard, once wrote "if you label me, you negate me", and being not quite that old, but old enough to remember and revere the 60's, I always ask "what do you do" hoping it creates something that really takes me to the core of that person, not just to the superficial meaning of his or her life as labeled by a job.

So today I asked "what do you both do?" She said, "I'm ex-military, and he's still on active duty."

"What branch?", I asked.

"I was in the Air Force", she said, "and he's in the Marines."

We're here in Oceanside, California, home of Camp Pendleton, and some of the finest young men and women in the whole world. I myself served as a Marine many years ago, but continue to find that meeting and interacting with young service people always makes me glad I live in the San Diego area where so many opportunities arise to do so.

"What do you do in the Marines?", I asked.

"EOD's,", he said.

I'm looking at him, and he's a young guy who clearly loves his gal, his country, and is not a big talker like me. So I ask him, "EOD's....what are they?"

"Explosive Ordinance Devices," he says. "You know, when they set the roadside bombs, me and my unit find them and neutralize them. We make it safe for the rest of the guys."

"Been to Iraq yet?", I asked. "Three tours," he says, and again he's taking his girl's hand and
concentrating on her.

He's not even looking straight at me, and I think I sense he's reluctant to make it sound like anything he does is important. After all, I have my Realtor's badge on, my head filled with facts about the market and all the homes I'm going to show them. It's clear he's looking at me as though I am important.

Well, for today, and to once again remind all of us, Real Estate, is NOT AN EOD!! It's a job, and it's a job some of us do well, love, and that can make a difference, but one that nonetheless "labels" us. I want to say that the next time someone meets me and engages in small talk, including asking "what do you do", I'll say something really honest, really revealing, and perhaps really dangerous. I'll say, "I met a Marine who did EOD removal.....do you know what that is?".....and then talk about this young man and young woman until the subject changes to why what THEY do make what WE do possible.

Equity Share 301

Why is Equity Sharing such a powerful tool, and why does the light from it reach so far beyond our entrenched way of buying and selling homes? Now we're about to reach deep into the passion I have about this subject, so please allow me to be both subjective and objective while answering this.


At its heart, buying a home is a two-way transaction. It's classic HAVE/WANT economics. The bank "has" money, and we "want" a home. So let's set up some guidelines, put up some fences around the playing field, and let the game begin. This is a game, however, that limits the players by virtue of the guidelines and fences that were erected by the banks and financial institutions. These rules have a history, with a universal, almost numbing set of qualifications. We are lemmings running to the clift edge, not knowing why, numbed by marketing from real estate companies and banks, all of whom seem to be driving in the same lane, to the same destination, with the same old ideas.


What if the way we were taught to buy and sell real estate is flawed? Not flawed so that it never works, or even often works, but that it doesn't always work. And IF we were to make a small change to the rules, i.e. adding a player or two to the game, we could greatly increase the number of successful players.


This happened to me a couple of years ago because of a simple card game of Hearts. You see, I love to play this game. It's a combination of good card playing, strategy and a little bit of balderdash. So what happens when you love the game, but the only player in your universe with whom you can go head to head is just simply better! Better, brighter, quicker, more experienced in the realm of cards. So much better that your game never even gets better. You play with hopes of getting some great or lucky cards, and yet you know you will eventually be bested by a superior player.


What happens, however, if I log onto a Hearts gaming site on the internet? Whoa!!! What happens now is that I can choose to play against players of different levels of experience. I can play, learn and prosper. I can be challenged, and be a challenge. You see, with the introduction of multiple players, the game is considerably more interesting to me, and what is germaine to this conversation, the game is now able to be won by me. I CAN succeed. I CAN compete. I CAN belong. I CAN............buy that house I've always wanted.


Equity Sharing, with the addition of an investor and a real estate attorney who will draft occupancy agreements, turns a game for some into a game for all. Equity Sharing, by turning a single lane highway into a 2, 3 or4 lane freeway, makes the path to home ownership uniquely accessable. Equity Sharing, with multiple players sharing responsibilty, reduces the risk of playing out of your league. Equity Sharing, which Marilyn Sullivan, the leading authority on the subject, defines as "people who jointly buy property and share ownership," is THE single most effective way for members of the real estate community, and for potential buyers and sellers, to significantly broaden their ability to own or sell property.


Here are a couple of powerful concepts that encompass the potential of Equity Sharing.

• Equity Sharing offers the POSSIBILITY of success when all other doors have closed.


• Equity Sharing may actually cost less than buying or selling in the traditionally financed manner since any additional costs are offset by friendlier and more generous terms.


• Equity Sharing for sellers can be a much more effective and potentially secure way for sellers to finance the sale of their home (as opposed to seller carrybacks).


• Equity Sharing isn't new, just underutilized.


• Equity Sharing is perhaps the most sociologically friendly real estate concept, allowing particpation in a black and white world by those whose philosophies encompass sharing as a mainstay.

Heed the call for this tested and effective way of buying and selling your next home. Equity Sharing has something for everyone to ponder, and in many situations is just "the ticket" (as Jon Lovell used to say on SNL) for success.

Equity Share 201

Okay, so we know that Equity Sharing is a proven and very effective way of both buying and selling real estate. Instead of just having a bank and a buyer and/or seller involved in the transaction, we will introduce an "investor" into the mix. In doing so the responsibilities are "shared" thus opening the door to possibilities that didn't exist before. But who are the people, and in what circumstances, that will benefit most from Equity Sharing? Here are some of the groups, and the reasoning behind utilizing Equity Sharing for each of them.



First time home buyer with no downpayment. Let's face it, the median price of a home in San Diego is $500,000. That means that if a first time home buyer wants to buy with a fixed rate in the traditional manner, they would have to have 20% downpayment, or $100,000. Practically no first time buyer has that kind of cash for a downpayment. And that leads to attempting to purchase the home with zero down. Once that path is chosen, then the zero downpayment option leads to loan packages with adjustable rates, teaser rates, prepayment penalties, and let's not forget, another $100,000 of actual loan to pay for each and every month. This is a recipe for enormous risk, and it seems to me that the enormous increase in the value of homes during the past 5 years has only exacerbated this.



Divorced and forced to sell your home. Often in a divorce the husband and wife are forced to sell the home so that the equity in the home can be split. Let's say, for example, that a couples' home is worth $500,000, and that they bought the home for $200,000 about 10 years ago. The husband is leaving, and he wants his share (50%) of the value of the equity in the home ($300,000). Where then, does the wife get the 50% or $150,000 to pay to him, and is there any way to do it so that the wife and perhaps the children don't have to be displaced from the home, their friends and their school? With Equity Sharing the answer is "yes." An outside investor is found who is willing to help refinance the home, pay the husband his $150,000, and become a partner with the occupier (wife and children in this example). Generally the wife will continue payments, and after a prescribed period of time of lets say 5-7 years, the investor and the occupier have a written agreement that allows the occupier to buy the home.



Co-ownership. Sometimes it just makes sense to "go in with a friend." This can be a very attractive situation for buyers who have "almost enough money", but not quite enough. Rather than enter into an agreement haphazardly, Equity Sharing creates an occupancy agreement, crafted by attorneys, that outlines ALL the legal and financial aspects of a purchase so that both parties can occupy and enjoy the benefits of home ownership. Additionally, there are times when even well heeled buyers may wish to participate in purchasing vacation property with others. Here again Equity Sharing is THE way to go.



Investors. What Equity Sharing provides is a proven, risk reduced method of investing in the highly tax advantaged real estate market. When you participate in an Equity Sharing agreement with an occupier as above your investment buys you a willing and commited partner, reduced cash flow constraints, and most of the tax benefits that accrue to investment property ownership. And the Equity Sharing agreement gives you the best opportunity to insure that in all market conditions your investment will produce an ROI that is planned out from the very beginning.



Sellers. Do you want to sell and move now, and realize that with all the homes for sale now, many of which are troubled with financial difficulties, that your home may not even be seen? Do you have equity in your home that you want to use either for the purchase of another home, retirement or other purposes? If so, then with Equity Sharing you can potentially sell right now for the price you want, access much of the equity you would from a standard sale, and also maintain an interest in your current property that fully protects you, is taxed advantaged, and from which you will derive further income from later.



These are but a few of the scenarios in which Equity Sharing benefits buyers and sellers. But in our next Equity Sharing 301 session, I'll explain why this methodology not only benefits, it also outshines and outperforms the way we have come to believe is the only way to buy and sell.

Equity Sharing 101

What is Equity Sharing?

Simply put, it is the process of EXPANDING on what we have been lulled into accepting as the only way to finance property. Rather than purchasing a home with two involved parties, i.e. the bank and yourself, a 3rd party becomes involved. In the process of doing so, the burdens of qualifying, coming up with a downpayment and making monthly mortgage, tax and insurance payments are RADICALLY REDUCED.

What this means is that more folks can buy, those who buy won't have to hock all their belongings and income just to pay the mortgage, and investors who likewise have "gone it alone" will now have a much lower risk real estate investment profile.

Yes, Virginia, there is a downside, and that downside is that the investor perhaps won't make 20% ROI, but rather 10%, and the occupier of the home won't necessarily see a profit of $200,000 in 5 years, but perhaps only $100,000. You see, SHARING makes sense when parties want to cooperate to bring common sense to purchasing and selling real estate.

Equity Sharing is, and rightfully should be, a mainstay in the playing field of any potential seller or buyer of real estate. In Equity Sharing 201 we'll talk about who can benefit from this approach.

See the Pyramids along the Nile

My wife and I just got back from our tenth anniversary cruise/get out of Dodge/cabin fever trip to the Mediterranean. A welcome time off of some two plus weeks, with a start in Athens, cruise and trips to Olympia, Corfu, Egypt, Santorini, Mykonos, Ephesus and Istanbul. All-in-all a splendid time (with a splendid woman may I add), and now I am back with a renewed spirit of dedication to the concepts of Buy Half a House.



Perhaps I'll spend just a little time on the trip itself. A voyage in and of itself is an exercise is seeing much and seeing too little. Look at the pyramids above. I did, and I also embarked on the ritual of taking photographs to document this wondrous feat of engineering and cultural commitment. But the photos are lifeless, puny, out of proportion and ill-suited to depict how they really look when one is able to stand at their bases. Indeed, you can see them, but what you see is a pixel rather than the full picture. Egypt and the pyramids, you see, are grand and magnificent, and what can be captured by even the miracle of the human eye is insufficient to wholly circumscribe the experience. These standards by which the ancients honored and memorialized their culture are spectacular and awe inspiring, and yet today they can help us to appreciate not only their own times, but our times as well.

For instance, look at real estate. Did you ever ponder real estate from 40,000 feet out your airplane window? Wonder how there could be so much, yet so much crowding? Wonder how we've come to live in pockets? Wonder how our cities compare to those of South America, Europe, or even, for example, Egypt? And if you have, then perhaps you can see that our ways of living and building and buying and occupying are so very cultural and sociological. We have invented the rules by which we will build and occupy, and we are entrenched in this methodology so much so that to deviate seems anachronistic, enigmatic or even alien to our sensibilities. In a word, our ways here in the USA are not the ways of much of the world, and this was illuminated once more to me through a simple trip to shake out the cobwebs.



Buy Half a House. Yes, right now, check out the web site, references and literature that calls us to look at our real estate structure and rethink, retool and remake our way of financing, buying and selling property.

Perhaps what struck me most after traveling to Egypt was the Biblical phrase that suggests that we "build our house on a rock, not on the sand....." The rockbed of our society here in the US has always been family, community and common values. Buy Half A House implores us to go back to our roots, share our resources, prosper through community, while all the time celebrating our individual desire to "own a piece of land." Maybe some sand got kicked in our face with becoming obsessed with making money off our homes instead of making lives in our homes. Let's go back and explore the rock. Let's Buy Half A House.

Why the name “Buy Half A House?”

What’s in a name, you ask? Well in this case, a lot. You see, home ownership for most of us, read anyone other than an investor, is a singularly personal and oft times private affair. After all, the king, his queen and heirs have to stake out a castle that best befits their goals, their needs and also their ego. And if I’ve gone back too far in history, then the analogy might be best expressed with a look back to the wild, wild west. “Pulling yourself up by your bootstraps” is an American rite of passage known by all of us, and in the case of home ownership, I believe a passage taken too far. Let me explain.

It’s nice to be a straight A student, get a full ride to Harvard, and get that fabulous college education without bankrupting the parents. But it doesn’t happen, does it? No, instead most college students borrow from the Feds, seek out scholarships, work part-time, and occasionally get a fairly hefty handout from mom and dad as well. It’s a team effort from the start, and practically the ONLY way to make it happen.

Do you know any college wrestlers? It’s a sport for the individual, and not a communal sport like basketball, football, soccer or baseball. Because we seem to operate best in a group setting like a team, the majority of sports we play are team sports. (Golf being the notable exception). Team athletics allow average players to perform above average feats, all the while teaching skills that carry over to all other aspects of life.

Why not home ownership then? Why do we have a built in resistance to corporate (group) ownership of a home when in so many other areas of our life groups make such good sense?

The Buy Half A House name signifies a change in the way we ought to think about home ownership. It says “think about the power of the group”. It says “think about whether all or nothing is the sensible way to proceed.” It says “share”, don’ hoard. It says “think”, don’t react.

Hopefully as Buy Half A House with its vision of equity sharing ownership takes flight, many of you will become advocates for this way of owning and prospering in the buying and selling of homes. Hopefully Buy Half A House will create traction with all of us who understand the power of cooperation, the spirit of sharing, and the lessons of team play.

There’s a lot in this name.

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Working with the dregs

There's an old Frank Sinatra song that has a wonderful line "...from the brim to the dregs. It poured sweet and clear. It was a very good year...."

With great wine, tasting from the brim, or first portion, is a sweet affair. The flavors that arise aren't an accident. They arise because the wine maker's experience, education and love of the art and science of winemaking are at stake. In a word, the artisan's work is on display, and at first taste, it's either great or not so.

The dregs are what remain at the bottom of the barrel. Not much to taste from. Not much to brag about. In fact, in the Bible Jesus's first miracle is the changing of the water into wine. The miracle does not go unnoticed by the members of the party, and they remark that usually the host will serve good wine first, and then (after inebriation sets in) offer up wine of lesser quality later. Jesus actually serves the best wine later. But I digress.

I'm writing to you today because the business of real estate too often causes one to drink from the dregs, and not from the brim. This is so often the case because unlike the experience and education of the wine maker, real estate agents don't often seem to have or place the care for their own knowledge at a level as high as the wine maker. In short, poor preparation, poor education, and lack of experience make many real estate agents poor wine makers.

In the world of Equity Sharing, and more broadly in the world of real estate finance that stretches the comfort zone of many real estate agents and lenders, I'm coming quickly to see that the lack of education about Equity Sharing, and experience with Equity Sharing, is leaving clients poorly represented. After all, if you COULD buy the property, but your real estate agent only knows one of the many paths that open up that possibility, then you are severely at a disadvantage. Sure, every one talks fixed rates, adjustable loans, option ARMS, etc., but how many real estate agents know lease options, owner carry back, Equity Sharing, Tenant-in-Common, along with HOW and WHY these doors should be opened?

I asked a listing agent on behalf of my buyer if she would ask the seller to entertain a lease with an option to buy. I explained why my buyer needed this, and how I thought it could benefit both parties. On the other end of the phone, this response: "I don't know anything about lease options, and my client (the seller) wouldn't be interested."

Did you hear me put down the keyboard and scream? Assuming you've got a seller who wants to sell, a buyer who wants to buy, a listing agent that wants to sell, a selling agent that wants to buy, then this conversation just put all four parties deep down into the barrel of failure. It's working with the dregs, and these kind of experiences are leaving a bad taste in my mouth.

Perhaps with participation by professionals and Realtors who care about wine making. Perhaps with participation by thinking men and women who care about the clients they serve. Perhaps with the willingness to share some thoughts across the lines of the "box"; well, perhaps this blog and its ideas will age well and taste fine.

Righting the ship

In sailing, if overexhuberance takes hold of you one particularly fine, windswept day, and you haul in the sheets just so, the vessel that had been skimming you through the ocean at seemingly effortless speed will suddenly turn on you like a bad piece of fruit on a warm day. You have to pay attention, says every good sailor, to the vessel and conditions under which you are sailing. So it is with the real estate market. Oh, for some years we were swept away with exhuberance over rising prices, endless streams of buyers, and sunny horizons each and every day. Last year the sea began to push back a little, the swells increased, winds flailed the mainsail, and we seemed to be coming to the end of a great day of sailing.

Well, it's been about a year now, and I think it's about time to head up on deck, ease the sheets somewhat, and realize that the ship has righted itself once again. Funny thing about sailing. If you oversteer, overtrim, overdo almost any aspect of sailing, you'll slow the boat, piss off the crew, and ultimately ruin what otherwise would have been sheer pleasure. So now that the buyers have taken over the helm, trimmed in the seller's sheets so far that the vessel stalled out, and practically begged the ocean of naysayers to swamp the boat, we find that cooler deck hands have taken back the ship like Captain Morgan and his men.

Yup, the ship otherwise know as the real estate market, is righting itself once again. A sail boat will right itself time and time again, if only the crew will loose the sheets, take their hands off the wheel, and let the ballast, sails and design take over. Now, coming into the late winter, early fall of 2006, buyers have begun to let go of their overexhuberant demands, ease back into realistic offers, and the sea of sellers seem to be willing to calm their expectations enough to make the voyage once again safe and profitable for all.

So, take care all of you who want to steer the real estate market into ruin. It's a sailboat, stupid, not a power boat! Eventually, the wind, waves and design of great sailing ships always right themselves and bring home their crews safely.

Make ready the mooring lines. The market is back in port, crew and owners happy, ready to do business.

Theme for Buy Half A House

Here's the initial blog that I hope will set the tone for the important messages to come. Indeed these writings, from me, my colleagues and from all of you, are a reminder that participation in a new idea is fraught with danger, with unbridled enthusiasm, and with the hope that the ideas and musings of thoughtful souls will actually make a difference.

This is the theme for this blog. It follows from years of experience, experiences and experimental living this good life we all have. Think on this one phrase, and then stop back and participate more fully.

"A single raindrop seldom thinks itself to be the cause of the flood."