Tuesday, February 26, 2008

Oh, Oh...Global Temps Dropping

Al Gore will have to return his Nobel Prize. The last 12 months have seen the largest one year drop in temperatures ever recorded, wiping out a century of supposed global warming.

Sunday, February 17, 2008

Oil Myths Debunked

Here's an interesting report on why the price of oil is so high (OPEC) and when we will run out of oil (never). One interesting tidbit I didn't know was that the Saudis are using only 9 of their 80 know oil fields. So don't buy into Hillary's rants about ExxonMobile's obscene profits. She's just another Chavez statist puking up communist garbage.

Where to get rich?

The laws of Supply and Demand really determine where you will get rich. The more people there are available to be your customers the more likely you can get rich. That is why a large proportion of rich people are located or do most of their business in the largest cities. The Internet has started to level the field in that it provides world wide access to large populations no matter where you live. However, for a person starting a business in a small town or buying real estate where the population is low this is no consolation. There are fewer customers in small towns or cities for your products or houses. Demand is low and potential for profit is low.

I watch a great deal of HGTV now and see lots of stories about how people make profits of $100k+ flipping houses (and selling them in days or weeks). Others just buy a house and in a few years reap over $100k in appreciation (and are often disgustingly disappointed because it wasn't $150k). This doesn't happen in Buffalo. There are few houses that sell for over $500k here and the demand for them is low. Most houses in this price range sit on the market for months or years. There is a house across the street that was for sale for $370k. It's a beautiful home of over 4000 sq ft in great shape. It was for sale for 2 years and now is off the market. I'm guessing the owner is going to let it go to the bank. So flipping a house here is a precarious venture. Long sales times and low profit margins can sink you. Plenty of supply and low demand.

One concept that is in demand here is a rent-to-own. Whenever I put up a RTO sign I get hundreds of calls. I can get higher than normal deposits and higher than normal rents and don't have to do maintenance on the properties.

One commenter on another post asked how I got into the same situation with real estate twice. The first time I had a dozen properties that were unrented and unrentable. I was literally paying people to occupy them so they would keep the heat on in the winter. Now I have all of my properties rented out (though I wanted to flip them) with a positive cash flow. Only one property has a negative cash flow and hopefully I will be able to rectify that soon. This is no where near my previous situation, just not what I had planned.

I don't think that I will get rich investing in real estate in Buffalo but it is possible since I have found a concept that has a high demand and few suppliers. This will be a slow process though since I have little cash to invest in more properties at the moment. I cannot use hard money lenders to buy properties since I cannot flip them quickly here and must wait on having conventional financing. Maybe an Internet business is the way to go from here but I haven't a clue what that would be.

A review of What's So Great About Christianity

Dinesh D'Souza has written a book "What's So Great About Christianity" which I had the pleasure of reading during the past week. For me it was an appealing book because it comes at Christianity from a logic and reason standpoint (I'm an engineer that used logic and reason for many years to discredit Christianity). There were many points he made that I was aware of but D'Souza puts it all together in one piece that I find quite compelling. I was raised as a Catholic, became an avid atheist for many years but continued to study spirituality and was hooked into New Age beliefs for some time. I started reading M. Scott Peck's works (author of The Road Less Traveled) and by the 4th book I came to agree with Peck that Christianity was the only true religion.

Here are some highlights from D'Souza's book:
  1. The conventional wisdom is that religion is declining. But the fact is that religious conversion is growing and Christianity is the fasting growing religion. Growth is mostly in the Southern hemisphere, but we see growth in mega-churches.

  2. Darwinists and atheists(usually one and the same) predict the demise of religious beliefs, but as Darwin wrote “The vigorous, the healthy and the happy survive”. Atheism offers only a depressing world view (your life is meaningless, you are no different than any other animal species and death is the end – you came from nothing and are going nowhere), while Christianity offers hope and meaning to life (You are a special creation of a good and all powerful God. You are created in His image with capacity to think, feel and worship that sets you above all other life forms. You differ from animals in degree and in kind. Your Creator loves you so much and so intensely desires your companionship and affection that He has a perfect plan for your life. In addition, God gave the life of his only son that you might spend eternity with Him.) Secular people are not reproducing in adequate numbers to survive, while those with religious beliefs are.

  3. The basis of Western Civilization is Christian ideals. The separation of Church and State is a religious idea that was first spoken by Christ (“Render unto Caesar that which is Caesars and to God that which is God's”) and further developed by Augustine in the “The City of God”. The basis of limited government, equal rights, religious tolerance found in the US Constitution were all Christian ideas.

  4. The Christian concept of human fallibility led to the elevation of the nuclear family, limited government, the rule of law and our cultural emphasis on the relief of suffering. The priority of romantic love in marriage developed out of Christianity. Capitalism and the basic rules of economics rose out of Christianity. No where is compassion for those suffering so emphasized as in the Christian religion.

  5. “All men are created equal” was a Christian idea. Though “democratic”, Greek and Roman cultures did not value the sanctity of life as Christianity does. Christianity elevated the place of women, was the first group to eliminate slavery, developed “just war” principles (you should not kill innocent civilians) and our concepts of individual freedom (derived from “free will”)

  6. Science was able to arise in civilization only because of Christianity's focus on reason as a basis of understanding God's creation. The highest discipline in Judaism and Islam is jurisprudence, while in Christianity it is theology. Theology is employed to understand the ways of God. Augustine first posited that God created time along with the universe (something only recently confirmed by scientists). Augustine argued that every series (e.g. the universe) must have a cause and that cause must stand outside of the series. Thus the universe had a creator, God, that stands outside of time and space. Psalm 13:1”The fool has said in his heart that there is no God”. Anselm's argument that God is “that than which no greater can be thought” offers an inductive proof of the existence of God. Neither Augustine nor Anselm appeal to supernatural revelation to prove God's existence.

  7. The greatest idea of modern science is faith that the universe is rational. All scientific discoveries have been developed from this faith. This is an idea Christians developed by envisioning the universe as following laws that embody the rationality of God the creator. The laws that govern the universe are written in the language of mathematics – a miraculous mystery. Institutions of higher learning developed out of Christianity (Oxford, Yale, Harvard & Dartmouth were all Christian universities). The first professional scientists can be traced to the Middle Ages and were Christians.

  8. Modern science points to a Creator rather than a purely naturalistic explanation. The “Big Bang” theory is a stunning confirmation of the Genesis story of creation. “In the beginning was the word...”. Neither time nor space existed before the singularity of the universes' beginning. The universe was created in a burst of light. God separated night from day later, i.e. the sun and planets were created at a later point. The creation of the universe was truly a miracle. The universe had a beginning and that beginning had a cause which we call God. The Creator used no laws to create the universe since the laws of physics were created with the universe, so the creator must be supernatural. There was no matter before the universe, so the creator must be non-physical(i.e. Spiritual). Since space and time are inside the universe the creator must be outside of space and time (i.e. Eternal). Since the universe was created out of nothing the creator must be omnipotent.

  9. Scientists claim that we are insignificant creatures in a vast universe and are nothing special. The Anthropic Principal proves that universe and all its laws are a conspiracy to produce human beings. Had any given law of physics differed by minutia amounts we would not exist (e.g. The gravitational constant or mass of the proton). It is not luck that we are here (the probability of all the laws of nature all lining up is astronomically small). The “multiple universe” theory explanation for the anthropic principal has no evidence. Using Occam's Razor you can deduce that we live in a Designer universe, that is a universe designed specifically for us.

  10. Paley's argued that by looking at a watch you would conclude that there was a watchmaker and thus we can look at the Universe and conclude that there is a Creator. Darwin's theory of natural selection does not disprove the need for a watchmaker. Evolution by natural selection explains a significant portion of how creatures are they way they are, but does not explain the beginning of life. How did the simple living cell come into being? There is no explanation for the complex formation of DNA and RNA in such cells. In addition, evolution cannot explain consciousness, rationality nor morality. Evolution offers no explanation for the creation of the universe nor its laws.

  11. Scientists believe that reason and evidence are the only way to understand the universe but Kant points out that our knowledge is limited by our 5 senses. Kant asks “how do we know that the reality that we see is reality itself?” Science provides only an illusion of reality – this is congruent with all the worlds religions. We don't know what we don't know.

  12. Scientific laws are not verifiable. No finite number of observations can be used to determine that the laws are true everywhere in the universe. Science properly understood cannot verify theories, it can merely falsify them. This leaves open the possibility of miracles.

  13. Life is full of gambles (who you marry, what field to study and job to take, where to invest...). So how should you gamble in regards to whether God exists or not? Pascal's Wager says that it is better to bet that there is a God than to wager that there is none. Reasonable people have faith because it is the smart bet. Doubt is the proper habit of mind for the religious believer. If we have faith in a God that does not exist what have we lost? If we reject God and are faced with an eternity without him (hell) than we have lost everything. If God were to reveal himself, He would force us to accept Him, defeating the free will He has given us to believe or not.

  14. Atheists condemn religion claiming that religion is responsible for most of the deaths the world has seen. But the facts are otherwise. Atheism has been responsible for over 100 million deaths in one century (Hitler, Mao, Stalin, Pol Pot), Christianity was responsible for 200,000 deaths over 20 centuries. Why? Atheists have no moral constraints, an ideology that sees man not god as the creator of values. “If God is not, everything is permitted”.

  15. Moral laws are both universal and objective. There are no known cultures that do not have some system of morality. Jews, Christian, Muslims, Hindus and Buddhists agree on a wide range of moral values. Morality is not relative since even relativists have a code of values that they espouse. Moral laws presume a moral lawgiver. Conscience is the voice of God within our souls.

  16. Are we just made of matter or is part of us spiritual? If we do not have a soul then we live in a deterministic universe and free will is an illusion. A materialistic view of the world makes us slaves to our genes controlling all of our actions and decisions, yet we can demonstrate that this is not so. Our inclination to live within a moral code is one such evidence. The “I” that we experience is outside of our material bodies and transcends time. We are free to chose not to follow our genetic programming.

  17. Marx said that “religion is the opium of the masses” but the opposite is true. Religion requires sacrifice, and promises damnation for failure to follow a moral code. How can this be an opiate? Atheism allows us to practice a hedonistic life without consequences and avoid accountability for our actions. Atheists use sensual pleasures to numb themselves to the nothingness of their purpose and existence and ultimate end. Atheism is the opiate of the morally corrupt.

  18. If God is good why do people suffer? No one can explain the existence of suffering or evil. However, religion offers hope to the despairing. Atheism offers nothing.

  19. All religions are not the same. Christianity holds that man, no matter how hard he tries cannot reach God, so God became man. Christians view that mans nature is the propensity to sin. We cannot redeem ourselves (Hinduism and Buddhism believe that we can through meditation, Islam and Judaism through following God's Law). Christians believe salvation is a gift from God that can be claimed by asking for it.

  20. Christ is the most influential figure in history. His words are unmatched in eloquence and are easily identified. We know he existed. There is historical evidence of his resurrection. His claims were remarkable. He did not claim to be a prophet but God Himself (“I and the Father are One”). Using Gods words for himself, “I Am”, he claimed to exist before Abraham. He forgave sins and the divine authority to interpret Scriptures.

  21. Christianity makes sense of who we are in the world. It integrates reason and faith. Christianity infuses us with a sense of purpose. Christianity offers a solution to the cosmic loneliness that we all suffer. It helps us cope with suffering and death. For Christians there is the life to come. Finally, Christianity helps us to become better persons that we want to be.

Wednesday, February 13, 2008

Hunkering Down

The past few months have not been too active for me in the real estate business. I spent November and December fighting pneumonia and this past week had surgery related to complications I am suffering from ulcerative colitis that I've had for the past year. Unable to sell any of my "flips", I now have everything rented. I was hoping to have a positive cash flow but due to the mortgage crisis have not been able to refinance the big rehab I did. I still am paying over $2200 per month on it and taking in only $1750 (which is a damn good rent in this area). Interest rates are low but banks are wary about doing investment property loans at the moment and looking for full documented loans. Unfortunately, I can't show a profit on my rentals. I have been working on my 2007 taxes the past few weeks and am in shock as to the extent of my loses last year. Despite my high salary I won't be paying any income taxes. In fact, I expect to get back all of the withheld taxes plus $3000 in child tax credits when I file. Certainly this was the worse year of my financial life.

So I am hunkered down trying to ride out this financial disaster. Not spending anything on real estate that is absolutely necessary. I've taken down my web site and stopped doing direct mail. Everything is at a standstill. Hopefully, the tenants will pay their rents on time and my cash flow will allow me to sustain my lifestyle until one of the lease-purchases excercises their option.