I Survived Real Estate 2012
On October 19, 2012, The Norris Group proudly presented I Survived Real Estate 2012. An expert line-up of industry experts joined Bruce Norris to discuss perplexing industry trends, head-scratching legislation, and the outlook for real estate in the coming year. Over $77,000 was raised to benefit Make a Wish and St. Jude Children’s Research Hospital. This event would not have been possible without the generous help of the following platinum partners: ForeclosureRadar, the San Diego Creative Real Estate Investors Association, the Investors Workshops, Invest Club for Women, San Jose Real Estate Investors Association, Frye Wyles, MVT Productions, and White House Catering. Lean more about the panel and how to attend at isurvivedrealestate.com.
Aaron Norris opened the evening telling the story about his mother, Marsha Norris. In 2004 while working the night shift in New York City, he received a phone call informing him that her cancer had spread to the bones. In that moment, the reason he was in New York City did not even matter anymore. About five months later, he was back in California. For six years, he had the greatest honor of being there by her side for someone who was such an amazing woman. Aaron said at times it still does not seem real, and the word helpless does a horrible job at describing how it feels to watch somebody that you love struggle with something cruel and unforgiving.
Aaron looks forward to I Survived Real Estate every year as he gets to see many of his favorite people all in one room. Aaron said he gets to be a fly on the wall for some brilliant conversation, but this night for once he did not feel so helpless. That night they were all making a difference, and they raised over $76,000 for charity. This year they had an opportunity to help two important charities. With the focus still on cancer, children were the spotlight for this year’s event. The first person to speak was Sarah Pizzaruso with Make a Wish to share with everyone their mission and what everyone helped them accomplish. They showed a video about one child whose wish was to meet a football team. He was presented with being able to come to the coliseum to meet with the USC Trojans. He had a wonderful day; way above what his parents expected would happen.
Sarah spoke about Make a Wish and how they grant wishes for children with life-threatening medical conditions. Their mission is to enrich the human experience with hope, strength, and joy. It seems pretty obvious that granting a child’s wish would give their wish kids hope, strength, and joy. However, the surprising part is how that mission extends well beyond their wish kids. A few months ago they met five-year old McClain, who was battling a rare blood disease. Despite a recent bone marrow transplant, he faces years of treatment. Being a huge football fan, McClain’s simple wish was to play football in a real football stadium with real football players. He wanted to yell “Hike, hike, hike” and throw the ball to a real football player. He had one rule for them: it had to be for a red team. McClain spent over an hour running plays on the field at the LA coliseum tackling and yelling “hike, hike, hike” before the game. He toured the press box, conducted the Trojan marching band and the school’s fight song at half time, and he met the Song Girls. Sarah knew as his wish was being planned how it might change this little football fan’s life, but she was not prepared for the ripple effect.
Sarah got to spend the day with McClain’s parents, and they told her it was rare that McClain leaves his dad’s side most of the time. He is shy, a little tentative, and about half the size of kids his own age. However, that day dad was challenged to keep up with McClain as he ran around chasing his new teammates. Sarah realized then that the wish did not just give McClain hope, strength, and joy; but it gave the same thing to his parents. Now, as they continue to tell stories about that day Sarah has noticed something even more amazing. It was not even just the family that received a wish that day; it was also the players, the coaches on the team, the volunteers who helped put it together, the band, the Song Girls, and the crowd in the stadium. McClain’s wish left everyone filled with hope, strength, and joy. This is the power of Make a Wish, and this year their chapter will grant 335 wishes like McClain’s for kids from Orange County and the Inland Empire. That is one every 26 hours. They will also assist with over 400 wishes for kids who visit them from all over the world to see sites like Disneyland or to meet their favorite celebrity. Unfortunately, according to the Center for Disease Control, they are currently reaching only about half of the eligible children in the area. Thanks to the support of the people at I Survived Real Estate, they will help them reach their goal to make sure that every kid facing a life-threatening medical condition will have the opportunity to live out their one truest wish and make memories just like McClain’s. With the help of friends like the Norris Group and those at the event, Make a Wish can help turn life-threatening illnesses into life-affirming triumphs.
The next person to speak was Lainie Strouse with St. Jude Children’s Research Hospital. They began by showing a video about a child, Braden, who wants whatever he doesn’t have at the moment, but as soon as he has it he doesn’t want it anymore. He is so playful and so goofy at some point, but if he doesn’t get what he wants he has a little attitude. However, the person on the video said if she was going through what he was, she would have an attitude too. His cancer was the last thing his parents had on their mind. There was a chance he could be blind, and that was why he could not focus on anything. Before they had considered him blind, but today the hospital has helped him so much. He can pick things off the ground, and even if he drops a Cheerio he will walk over and pick it up off the ground to eat it. It was amazing and not something anyone thought was going to happen. It is a possibility until he is five that he could lose both eyes. Whether he has his eyes or not, he will make the best of his life. He is so active, so engaged with his environment, and so curious that the people at St. Jude’s want to foster this and encourage it. This is a child, a family, and a life. There is more to life than his disease, and St. Jude’s is the best place possible. They save lives, and one day they will find the cure for cancer. That day is not today; there is still a work in progress. As long as cancer is here, there needs to be people researching it and finding new ways to help our children.
Lainie said no matter how many times she sees the videos, meets the patients, and sees the families; she is always moved and cries. She thanked every single person in the room at I Survived Real Estate because they were making their work possible. Every individual donation that comes to them is used to help children like Braden. It takes $1.8 million a day to run the hospital, and that is just the one hospital featured on the video. They do coordinate their work with all the local hospitals. Many of their children are too old to travel, so they create protocol specifically for each child. That involves the Genome Project.
This project is where they can create care for each individual patient and create their own medications on site. Many of these medications are not available through normal pharmaceutical companies. They do not create them because they are too expensive, and they create medications that children can take since they cannot take the same medications that adults take. They cover flights for the patients to come to St. Jude if they need to come to the hospital in Memphis. They cover groceries for families so they can eat together as a family. They don’t just treat the illness, they treat the patient, the family, and they care for them as a whole. The type of things that happen to a family when one of their children is ill is unimaginable, both the suffering and the pain that happens to the parents, the other children, the relatives, and what it does to those families is something Lainie said she hopes no one in the room ever has to experience. What St. Jude does is they try to make the experience as positive as possible to take away the fear; and the patients do not have to pay one dollar for their treatment. All of the money raised goes to pay for the treatments so the patients do not ever have to worry about the bills and therefore don’t have to worry about going bankrupt over their care.
Acute leukemia is the most common form of childhood cancer. Fifty years ago there was a 4% rate of survival. Today, that rate is 94%. It used to be a death sentence to have cancer or sickle cell as a child. Treatments are being developed now for sickle cell, and it can now be cured with bone marrow transplants. They are currently working on the first proton beam in the world that can target cancer cells without killing the surrounding cells. This will now give them the ability to kill brain tumors that were previously inoperable. This is all from donations from people at I Survived Real Estate and others, so hopefully we will never have to go through this personally or lose our mothers or fathers to cancer. We hope to never have to see any more beautiful children suffering with these life threatening illnesses. The Norris Group was awarded a plaque commemorating a child’s wish who they adopted. The girl was from Riverside and wished to have a fancy dinner.
The host of the evening, Bruce Norris, is an active investor, a hard money lender, and a real estate educator with over 30 years of experience and over 2,000 transactions under his belt. He is best known for California real estate market timing and someone whom Aaron has the privilege of calling “Pops.” Bruce started by thanking Marsha for raising “one heck of a family.” He continued saying that he had recently read in the paper about policies, and these policies sometimes reflect the things that we fear. The article said that the latest numbers in the housing market have not convinced economist Gary Shilling, a long-time housing bearer, to change his cold forecast. He still holds his prediction that home prices will fall 20% more. He dismissed the talk that the market has bottomed. Bruce actually said he begs to differ. For Bruce, it really comes from practical market observance. His son Greg is in charge of buying and has outdone him by an awfully large margin. They are usually dealing with something like 50 properties at a time, which gives you a pretty good feel of what is going on in the market. All of a sudden, we started noticing progressively more and more offers and quicker marketing time. None of the charts that he normally followed would have told him that they were going to have price increases. When it started happening in reality, he started thinking about what was going on that was different this time. Some of the decisions that are being made, such as to bulk sale REOs since the market will not absorb them or considering eminent domain, are not necessary.
The audience at I Survived Real Estate was a very special group of friends and fellow investors who would love the chance to get to receive financing or buy some properties to clean up and make them rentals. Bruce showed a picture of a dilapidated, run-down house and told how their basic business model was to take that house and turn it into something beautiful. He showed a real example of a home that was worth $356,000 at the top of the market. Unfortunately, they bought it for less than that at $64,000. They put $35,000 into it and kept it as a rental. However, the problem for California real estate is across the street somebody may owe $356 grand on that house. Everything you have seen over the last 4-5 years has been an attempt to solve that problem. Bruce’s goal that night was to talk about both ways they could solve the problem dealing with getting prices to escalate and/or having the debt forgiven.
Bruce began to notice some strange things happening in one chart that showed a progression of delinquencies. In this chart, the delinquencies progressed but the foreclosures did not. You would think that usually there is a correlation. This correlation, however, was broken about halfway through 2008. Had it been followed normally, we would end up having a very different peak of the foreclosures. Instead of 0.8%, we would end up with 3 ½% of the market. Whatever was in the MLS would be a multiple of at least four. This could be really scary when looking at the following charts that Bruce showed. Bruce showed a chart of the unsold index in San Bernardino, and what happened was everybody tried to sell after the prices started to falter, then they could not sell and foreclosures went up a little, which was shown on the following chart. This chart was a reaction to what they did foreclose on, but it could have been four times as high if they had foreclosed on everybody who was delinquent. You could imagine what would have happened to prices since it was bad enough as it was.
Since 2008 when it peaked, it has gradually gone down. Bruce said as he tried to figure out what was going on, one of the things he concentrated on specifically was the aggressive stance we had in foreclosing on people has actually turned out to be a big asset in 2012 and will be in 2013 and 2014. He did not figure this out until he started getting much more demand for his product than he thought was possible. Our median price in California went down to $245 and came down from $594. It is now at $343, so we are considerably off the bottom. The reason that is significant is if you look at our price history, in 2000 we were at about $240. When you start mimicking a year in the past, you also can match it with debt that was owed on the property values at the time, which is significant. Bruce showed another chart of debt, and if you start looking at the year 2000 on the bottom and you go straight up, you will see that when a real estate property was only worth $245 we owed $11 trillion on it. At the time in 2000 we only owed about $5 trillion, and this is a bit of a problem. You have a lot of debt you don’t know what to do with, and you wonder if you can forgive it all.
To find out more, tune in next week for I Survived Real Estate 2012, part 2. The Norris Group would like to thank their gold sponsors for supporting the event: Adrenaline Athletics, California Property Solvers, Coldwell Banker Pioneer Real Estate, Elite Auctions, For Investors By Investors, In a Day Development, Inland Empire Investors Forum, Inland Valley Association of Realtors, Investor Experts, Inc., Keller Williams of Corona, Keystone CPA, Las Brisas Escrow, Leivas Associates, Mike Cantu, Northern California Real Estate Investors Association, Northern San Diego Real Estate Investors Association, Personal Real Estate Magazine, Pilot Limo, Realty 411 Magazine, Real Wealth Network, Rick and LeaAnne Rossiter, Southwest Riverside County Association of Realtors, Jon Risinger Photography, Sonoca Corporation, Spinnaker Loans, uDirect IRA, Wilson Investment Properties, Tony Alvarez, Westin South Coast Plaza, and Winning in Tough Times, LLC. See isurvivedrealestate.com for the video from the live event.
For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.
Tags: Aaron Norris, bruce norris, foreclosure, Gary Shilling, Genome Project, Gold Sponsors, i survived real estate 2012, industry trends, Lainie Strouse, make a wish, Nixon Library, Platinum Sponsors, real estate outlook, reo, Sarah Pizzaruso, St. Jude Childrens Research Hospital, the norris group