7 — Short Sales Riches Blog

Sage Bond Investor Says Mortgage Rates Headed to 4.5%

by Chris McLaughlin on February 9, 2009

Real Estate News & Commentary by Chris McLaughlin, February 9, 2009
http://www.shortsalesriches.com/welcome.html

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“How to Exploit a Little Known Flaw in the Bailout
Package for a Six-Figure Payday!” (But it’s only
good for the next 14 months…)

I don’t know why people haven’t caught on to this yet.
Because with this, you can forget fearing this recession,
and use it to your advantage instead!

I’ll show you how, and it’ won’t cost you a cent.

But there IS a catch – we fill up early, and there’s no
wait list. And at last count, we only had 30 spots left.
Go and grab one of these last openings NOW, or miss out.

https://www2.gotomeeting.com/register/202760525

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Warren Buffett is known as the Oracle of Omaha, but Pimco’s Bill Gross is known as the Sage of the Bond Market. His insight is typically accurate, and today he confirmed what many had been expecting: mortgage rates should be dropping to 4.5%. In an interview on CNBC, Gross noted: “I think at some point we’re going to see a 4.5 percent mortgage rate and the 10-year Treasury rate capped at some level…when the Fed comes in to buy Treasuries that will be a big day.”

And while we’re talking about low mortgage rates, anyone reading this newsletter needs to let their voice be heard when it comes to the non-stimulus package. It was chalk full of ridiculous spending items such as $700+ million in school lunches and $21 million to re-sod the National Mall in Washington. The Senate package will likely shed many of those dumb concepts, but one concept needs to remain: the $15,000 home buyer tax credit. This significant provision, which was developed in the Senate version, expands the current $7,500 tax credit and no longer requires that it only be used by first time home buyers – and it doesn’t have to be repaid to Uncle Sam (as is the current tax credit). This, coupled with low interest rates, would be just the stimulus that the housing industry needs to overcome the fear the media has spread throughout the industry. This is as close to a bailout as Main Street is ever going to get…and it is our turn, isn’t it?

Yes, Virginia, there is something called a profitable company … even in a recession! Just proof that when companies like Starbucks start heading in the wrong direction, those customers have to go somewhere. And so it was with McDonald’s today. The world’s largest burger franchise posted a same store sales increase of 7.1% So if you’re looking for recession-proof real estate investing, that exists too. Just join us for our webinar on Tuesday night at:

https://www2.gotomeeting.com/register/202760525

The big, bold, and exciting news conference today announcing the latest bank rescue plan was … well, NOT. That’s right. It got postponed. Treasury Secretary Timothy Giethner is now expected to unveil all the details this coming Tuesday at 11 AM, thereby allowing the focus to be on the US Senate as it puts the finishing touches on the economic stimulus package as it works its way through Congress. “We’re focused on working with Congress to pass an economic recovery bill so we can create the jobs and make the investments necessary to get our economy moving again,” said Isaac Baker, the Treasury Department spokesman.

Now, on to our real estate investing section…

Albert Einstein: “Never expect the people who caused a problem to solve it.”

Ahh, Einstein was truly a genius in more ways than one. Politicians and bankers are promising to “fix” the nation but we suspect most readers will be a bit more savvy than to believe more empty promises and false starts. Instead, it is more important than ever to create your own economic stimulus plan by the strategic use of short sales real estate.

Let’s compare what Big Brother has planned for your financial future with what you can create on your own when buying and selling short sales real estate.

Big Brothers Income Safety Net: Extending unemployment benefits. Hmmm, with average MONTHLY benefits averaging a mere $1,600 or less – prior to taking out taxes (and yes – it is taxable income!) this isn’t much of a safety net whatsoever. Should you be inclined to earn a little on the side; forget it, earnings will only decrease the amount of monthly stipend you receive up to a total of the same $1,600 per month.

Short Sales Income Safety Net: Let’s face it, $1,600 per month and more is chump change. You can easily earn 10’s that amount in only one short sales deal with the added benefit of capital gains taxation rather than earned income!

Big Brother’s Job Replacement Program: Do you know how to build bridges to nowhere? If not, better start learning how to dig ditches or carry heavy bundles because the federal government’s idea of job creation centers around the construction of roads, bridges and other infrastructure.

Short Sales Job Replacement Program: Keep your regular job or supplement your income without the use of heavy equipment and back-breaking labor. Buy tangible assets like real estate for income producing rentals, owner financed loans or re-sales with plenty of time to spare for those weekend welding classes.

Big Brothers Economic Recovery Plan: Coming soon to a collapsing economy near you…piles of freshly printed dollars. Whether you expect short term inflation, deflation or even outright depression…experts on all sides agree the long term outlook is likely to hold the prospect of inflation and short supplies of tangible assets.

Short Sales Economic Recovery Plan: Tangible assets in the form of affordable housing, real estate and raw materials able to keep pace with rising inflation, deflation or even outright economic collapse.

Big Brothers Tax Plan: Tax, Tax, Tax….earned income, unearned income, passive activity profits…you name it. In fact, if they can name it they will tax it – including those substandard unemployment benefits.

Short Sales Tax Plan: Take advantage of lower capital gains tax rates, depreciation and other write-offs.

See you at the top!

Chris McLaughlin

http://www.shortsalesriches.com/welcome.html

P.S.

This week’s webinar replay is right here…for the next 24 hours:

http://www.webinarwizards.com/custom/index.cfm?id=170879

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Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…

http://www.shortsalesriches.com/blog
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About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month

   * Long-time authority on real estate investing
      and rapid flipping of distressed homes. Owns
      portfolio of nearly 100 high-value, high-profit
     properties

    * Owner and Supervising Broker of one of Florida’s
     largest Real Estate firms, running 4 different
     offices, supporting nearly 450 agents, uniquely
     positioning him to help thousands of investors
     make money in the biggest market opportunity ever!

     * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
     in Real Estate Investing, Entrepreneurship, and
      Wealth Building

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What Jimmy Stewart says about short sales

by Chris McLaughlin on October 21, 2008

Mid-Day Market News & Commentary by Chris McLaughlin, October 21, 2008
http://www.shortsalesriches.com/welcome.html

The BEST fr’ee webinar that you’ll ever attend on real estate short sales & wealth building in this market:

Join us TONIGHT, Tuesday, October 21^th (Tuesday) at 9 PM EST, 6 PM PST to discuss real estate short sales and short sale investing:

https://www2.gotomeeting.com/register/196317932

There are only 20 spots left … log on now to claims yours!

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Stocks were mixed in early trading after the Federal Reserve announced that it will begin purchasing commercial paper, primarily owned by money market mutual funds, by establishing the Money Market Investor Funding Facility (MMIFF). The Fed is attempting to bring further liquidity to the markets. “Improved money market conditions will enhance the ability of banks and other financial intermediaries to accommodate the credit needs of businesses and households,” the Fed said in a statement.

In real estate and banking news, US Bancorp net profit dropped 47 percent to $576 million versus a profit of $1.10 billion in the year ago period. The Minneapolis-based lending institution reported earnings of 32 cents per share versus 47 cents per share in the year ago period.

The National Association of Realtors called on Congress recently to adopt its 4-point housing plan that included, among other things, expedited bank review of short sales and REOs. NAR further recommended that the government eliminate the requirement to pay back the $7,500 tax credit and to expand it to all buyers of primary residences, not just first time homebuyers. The Realtor association recommended that the government permanently prohibit banks from entering the real estate brokerage and management business.

Now on to our real estate investing educational section…

The Wonderful New World of Banking and Finance

“Something funny is happening down at the bank…”

Jimmy Stewart in It’s a Wonderful Life

Borrowing a line from Jimmy Stewart, short sale investors may have noticed something funny is happening down at the bank. It’s not your imagination…we are in new and totally unprecedented territory when it comes to banking and finance. Here is what you need to know about some of the major changes coming soon to a bank near you…and the implications for how you do business today and into the future.

1. Bank Closures. To date, only a handful of bank closures have taken place but experts expect more in the coming months. The average short sale investor shouldn’t have much to worry about when it comes to bank closures, nearly all of which involve small local banks. In fact, see our former article about stalking sick banks or how to buy FDIC real estate assets and use it as a buying opportunity. If you have a short sale pending, some other bank will buy that loan for pennies on the dollar and then mitigate it … so hang in there, but understand it might take more time.

2. Recapitalized/Nationalized Banks. Big banks dsileon’t fail…they are recapitalized (and some would argue nationalized) by the United States government. In fact, recapitalization and nationalization of banking and financial assets is taking place on a global level via government intervention and ‘bailouts’ designed to keep the economy going despite the most massive loss of wealth in the history of the modern world. Those investors that held paper-profits (stocks, bonds and other securities) have seen fortunes wiped away practically overnight. On the other hand, those holding tangible assets like real estate have a commodity with inherent – tangible value. So, wonder what recapitalization might mean to you as a short sale investor? Long wait times and less future inventory for one. Unlike banks which must show quarterly profits and report to shareholders, the government can (and has in the past) sit on its assets for years.

3. Silent Bank Runs. Although few media outlets have reported on the rash of silent bank runs, the problem persists just the same. For example, Wachovia recently reported $5 Billion dollars of withdrawals in one day – a hefty sum to be sure as depositors withdrew their savings in a flight for safety. Expect more of the same and continued volatility in the banking industry as former investment banks offset their balance sheets with consumer checking accounts and Joe Six-Pack begins stashing cash under the mattress in order to pay the bills. Until things stabilize it is a good idea to have more than one checking account in order to make sure deals go through without incident. No need to jeopardize a great opportunity because your account was frozen.

4. Getting short sales done. There is a lot of talk about what happens to short sales when the government comes in with a bunch of money. Folks, what happens is that they are more likely to get done! Right now some of these banks might not be properly staffed to even handle the amount of short sales coming down the pipe. Understand that FHA, a government program, actually has the most sensible approach to homeowners in distress and PAYS THEM to cooperate, up to $1,000, unlike the typical conventional lender. Why? Think about it … ever heard the term “cash for keys?” Once the bank owns the property they approach the person foreclosed upon and tells them they’ll pay them to move out willingly, as long as they leave the house in good condition. While I certainly don’t think the government usually “gets it,” in the case of FHA short sales they certainly get it more than those loss mitigators at other lenders…

7

Sage Bond Investor Says Mortgage Rates Headed to 4.5%

What Jimmy Stewart says about short sales

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