The Perfect Storm

July 11th, 2022 by admin No comments »

As you can see, there are 2 stages that follow one after another that lead to the creation of a Perfect Storm and opportunity to purchase real estate at incredible values – The Housing Speculation or Run-Up phase and the Market Collapse. We will examine each of these phases so you are more informed on what has led us to this perfect point in time to invest in real estate.

But first, we need to examine the most important issue a real estate investor must evaluate when choosing where and when to purchase a real estate investment – LOCATION.

Underlying Market Strength

I’m sure you’ve heard the age-old adage, “location, location, location”. I have a different spin on this saying. Mine goes more like, “location, timing, cash-flow”. Nevertheless, location is still number one on the list. If the underlying market is not strong with potential for rental and value increases in the future, then what’s the point of investing in the first place?

First, let’s look at Metropolitan Phoenix as a whole for location. Why the heck would you want to buy property in the middle of the desert?
Even though our market is severely depressed right now, Phoenix has shown remarkable resiliency and long term value appreciation for a number of reasons:

(1) Climate – People want to live here because of the warm, sunny weather. It is why snow-birds come in flocks for the winter and to retire. We all know that the baby boomers are reaching retirement age.
(2) Affordability – Phoenix is one of the most affordable places to live in the US. While this statistic took a temporary hit during the last boom, we have fallen back down to being extremely attractive to business based on real estate values, labor pool and overall cost of living. This will continue to attract business, labor and retirees to the area for the long term.
(3) Standard of Living – very high. Ease of commuting, and a fresh young, vibrant city leads people to want to live here.

These factors have led to the remarkable positive population growth Metro Phoenix has experience for the past 50 years. Even during times of economic hardship, people still continue to move here at a remarkable pace. This puts pressure on the housing market and inevitably leads to appreciation.

After deciding that Phoenix is the right spot to invest in real estate, your next task it to pick a sub-market within the metro region that makes the most investment sense. Some of the most important factors include:

(1) Area of greatest price declines
(2) Proximity to employment
(3) Proximity to amenities
(4) Quality of area
(5) Strength of rental market/values

These will be discussed later in this report and a qualified real estate professional can assist you in selecting sub-markets to invest in that match these criteria.

The Residential Housing Value Run-up

Phoenix real estate has always appreciated at a steady pace with the exception of a few massive run-ups in value followed by sharp declines. The decline of the late 1980s was briefly reviewed above. So what has caused the latest mass-speculation and run-up in values between 2003 and 2006?

Well there were a few culprits that acted together to create this latest debacle.

(1) Underlying Market Strength – As stated above, Metro Phoenix has inherent underlying market strength. That is what got the ball rolling and led to the mass speculation for 3+ years.

(2) Cheap Credit – Interest rates came down to unheard of levels making it easier to buy more assets with less money.

(3) Overabundance of Credit – It started in the late 1990s when Bill Clinton passed legislation freeing up credit to allow more people to buy homes – the sub-prime mortgage market was created. People that really shouldn’t have been buying homes in the first place were not only buying homes, but purchasing larger properties than they could afford. As credit loosened and values started to increase, a run on equity lines of credit and refinancing freed up the equity in people’s homes and allowed them to spend ‘invisible’ equity in the consumer markets on durable goods and services. This created the economic boom that we all experienced in the early to mid-2000s. The result: even homeowners that bought early in the boom and saw their property values increase 50-100% over a 5-6 year period had little to no equity left in their homes by the end of this appreciation cycle as they leached it all out through equity lines of credit and other borrowing methods.

Optimizing Your Logistics and Distribution

June 24th, 2022 by admin No comments »

Undeniably, the most crucial role of a company following the production is the distribution and logistics of the final goods so that they reach the end consumers at the right time. Clearly, logistics and delivery both have an unmatched role to play in the performance of the business. Hence, a steadfast and seamless mechanism for your goods distribution will ensure that your customers are satisfied with you. While the system of logistics and distribution varies with companies depending on the kind of products they deal in, optimizing it means following some discrete approach. However, here are discussed some easy and tacit ways to simplify distribution operations to make sure customers get a satisfying service.

Resource efficient packaging

Most of the times, courier and delivery services companies deploy a uniform packaging system, irrespective of what they are distributing. Many times, we see a simple consumer good, which is not as fragile as an electronic item, arriving with layers of packaging. So, you need to make sure that your packaging do not become excessive and as per the product nature from you logistics service provider. This way not only wastes will be reduced but also the costs of packing.

Bring forth new delivery options

Just not the products but there are many things that matter in delivery like the weight, dimension, nature or type of product, or whether it needs cold storage. While all this have a huge impact on the customers’ satisfaction and state of the product when it will arrive at them, you need to find out whether you own delivery system have options to take care of all the aspects well.

Turning on automated processes for delivery

Another way you can assure that your delivery systems are fulfilling all expectations of customers is automation. Tracking of delivery route, time and vehicles/driver details, will help customers relax back while their orders are out for delivery. This further reduces the random calls and inquiries from the customers regarding their products.

Picking a logistics and delivery partner

The most befitting way to streamline your logistics and delivery mechanism is joining hands with a full-fledged delivery and courier services company who will help you through and out. From special handling of the products to warehousing management, products packaging to dispatch, doorstep deliveries to customers services, they will be in charge of all.

You need to realize that the logistics role is hard and it is that significant part of your business, which can hold back your customers providing them right delivery facilities. Whichever business you are into, just make sure your logistics support is well optimized and automated to get your products aptly to your end customers.