——
Are you a Realtor looking to make serious money in 2009?  The Holy Grail of REO is coming to an end, as the last of 50 Seven Figure REO Wealth Building Systems will be sold this weekend.  The other 450+ systems flew off the shelves this week. The product was developed by Chris Guldi, one of the TOP REO Agents in 2008 with GCI from foreclosures over $1.5MM.  If you want his secret list of asset managers and tricks to making more money than ever in real estate, go here now to be among the final 50 to listen to Chris LIVE on Saturday at 5 PM ET:

https://www2.gotomeeting.com/register/693464027

——

There was a little bit of news that dampened the New Years’ good spirits today, as the Labor Department reported that the nation’s unemployment rate is now 7.2%, the highest level in 16 years.  For the full year in 2008, there was a net loss of 2.6 million jobs.  And the news is expected to worsen, as a lot of companies that put off layoffs due to the December holidays are now in full-blown layoff mode.   In another sign that incomes are dropping, corporate America also reduced the American workforces’ hours to an average of 33.3 hours, the lowest level since records began on the subject in 1964.   President elect Barack Obama stated that “Today’s jobs report only underscores the need to move with a sense of urgency and common purpose.”

Now on to real estate investor education …

New Year’s Resolutions for the Short Sales Investor

Admit it. Your New Year’s resolutions look a lot like last year’s list don’t they? If you are like most people then near the top of your list is “get in shape” followed by some type of ambiguous financial goals. The trouble with most New Year’s resolutions is they fail to energize, motivate – or even make sense. When was the last time you REALLY got excited about cutting back or doing without? Rather than emphasize the negative, it’s time to create a realistic list of positive goals designed to make a lasting difference in your life. Here are some more tips designed to transform wishful thinking into reality for the coming year.

1. Write it Down. Researchers have discovered the mere action of taking the time to write it down increases the odds of actually putting the plan to work.
2. Tell it to Others. Commit to the plan of action by making it known to others; whether in person, via telephone or simply as part of an online discussion. Let others know of your goals.
3. Be Specific. Get into the nitty-gritty details; duration, specific amounts, locations or other pertinent information should be spelled out in as much detail as possible.
4. Measure Continuously. Set a schedule to measure progress on a continuous – and frequent basis.
5. Work toward it Daily. Make it a regular part of your routine to do at least one item toward your goal on a daily basis throughout 2009.
6. Dare to Dream. Don’t discount your own dreams or ability to profit…it is what excites and motivates people to take action. While the rest of America is sitting on the side-lines while the greatest buying opportunity of a generation sits in front of them, those who dare to dream of a better life are capitalizing upon it.
7. Get a Mentor. It is important to banish negativity from your vocabulary and personal goal’s; while a healthy dose of constructive criticism is always warranted – that is quite different from negativity. Constructive criticism is born of information and experience while negativity stems from fear. Surround yourself with knowledgeable professionals who are successful in the short sales field rather than those to fearful to take action.
8. Educate Yourself. Information and education are key to growing in any field. In fact, common wisdom holds it takes a minimum of 1,000 hours to become fully informed about any given topic. To put this into perspective, 1,000 hours is the equivalent of 25 weeks of full-time work. Fortunately, you don’t need to start from scratch. Benefit from the wisdom of others that have gone before you and customize it to your own situation.
9. Invest in Success. Perhaps one of the biggest mistakes most real estate investors make is failure to invest in success. Whether it is your time, money or simply opportunity cost required to put short sales real estate to work – the fact is you must make up your mind to invest in your own success before anyone else will follow.

Cram-Downs Could Hurt

If some members of Congress have their way, one aspect of the foreclosure prevention plan formerly shunned by lawmakers may be revived. It could spell bad news for banks should it come to pass: mortgage cram-downs. Essentially, the legislation would allow judges the right to rewrite a mortgage in order to make it more affordable to the current homeowner. While initially that may appear to be a good idea, critics point to several potential pitfalls:

1. Increased losses among banks. Currently, loan modifications among homeowners demonstrate dismal rates; in fact, nearly half are already falling behind. Critics point to a worsening of the current housing crisis that could spread on for years rather than putting the worst behind us and getting on with the future by selling the homes to those willing and able to make them profitable.
2. Restructuring may increase long-term competitive interest rates. By allowing a judicial mortgage modification on a “per case basis” there is fear it could slow the long term recovery of the housing market by driving prevailing market rates higher. Banks will no longer be able to justify mortgages on individual risk and will be required to offset losses in much the same manner as healthcare increases rates to compensate for write-off’s.
3. Decreased lender incentives. Currently many banks are willing and able to negotiate new terms based upon individual situations but federal oversight could standardize what is/isn’t expected.
4. Increased down payments. If passed, reform measures are also likely to increase the down payment requirements, PMI and other associated costs of obtaining a new mortgage in addition to the increased long term interest rates. Once individual assessments are not able to be adequately measured and predicted, lenders will be forced to compensate by adjusting all rates to the potential risk of under-writing less qualified individuals and homeowners.
5. Negative Incentives. To date, most mortgage modification programs have worked with current homeowners to restructure the interest rate, duration and other terms of the mortgage without impacting the principle owed. Increasingly, cram-down advocates are calling for the ability to totally re-write both the terms and principle amount of the mortgage owned creating the potential for a negative incentive.  Because of this potential problem, advocates are also urging Congress to consider implementing more aggressive bankruptcy reform measures aimed to prevent both foreclosures and associated bankruptcy proceedings.

——–

See you at the top!

Chris McLaughlin
http://www.shortsalesriches.com/blog

P.S.:

My good friend Mike Collins is dead serious about
this “Get the People Educated” mission he’s on.

He promised you hard-core real estate investment videos
to jump start your 2009.

https://rehablist.infusionsoft.com/go/smash/NJur1

P.P.S.:

Are you a Realtor looking to make serious money in 2009?  The Holy Grail of REO is coming to an end, as the last of 50 Seven Figure REO Wealth Building Systems will be sold this weekend.  The other 450+ systems flew off the shelves this week. The product was developed by Chris Guldi, one of the TOP REO Agents in 2008 with GCI from foreclosures over $1.5MM.  If you want his secret list of asset managers and tricks to making more money than ever in real estate, go here now to be among the final 50 to listen to Chris LIVE on Saturday at 5 PM ET:

https://www2.gotomeeting.com/register/693464027

——
Yes, Virginia … there is a Santa Claus!  And he loves to represent buyers in foreclosure and make a ton of money.  So check out this amazing youtube video…Santa definitely showed up in Tennessee this year, early!  You have to see this!!

http://www.youtube.com/watch?v=XTvvi311YDg

and then make sure you register for our upcoming Recession Proof Investing webinar!  There are 17 slots available, first come first serve:

https://www2.gotomeeting.com/register/732240980

——

The National Association of Realtors reported that existing home sales dropped 8.6% to 4.49 million in November, from a revised rate of 4.91 million in October.  This represents a 10.6% decline below the 5.02 million in November 2007.  Lawrence Yun, NAR chief economist, expected the decline. “The quickly deteriorating conditions in the job market, stock market, and consumer confidence in October and November have knocked down home sales to another level. We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001,” he said.

“It is, therefore, imperative to provide incentives for homebuyers to get back into the market. It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline – impediments remain for some buyers with good credit,” Yun said.

The Associated Press reported late yesterday that Representative Barney Frank, the Chair of the House Financial Services Committee, wants the final $300 billion installment released before President-elect Obama takes office.  Frank is looking to stiffen disclosure related to lending for banks that received TARP money that seem to be hoarding the money now.  In addition, Frank wants to allocate about $24 billion to back FDIC Chair Shelia Blair’s plan to encourage more lenders to modify loans.  And finally, Frank is supporting using government money, along with Fannie Mae and Freddie Mac, to buy down long term 30-year mortgage rates to 4.5% or below, an effort widely seen as stimulating housing demand.

Frank’s buy-down effort is certainly good news for most real estate investors and Realtors.  And if comes on the heels on a shocking statistic about the failed government-backed loan modification called “Hope for Homeowners.”  This ridiculous program, which I’ve spent many an e-mail lambasting in the past, was supposed to help at least 400,000 homeowners.  Guess how many have bothered to even apply when it was launched on October 1^st?

312.

No, that’s not a typo.

Three hundred and twelve.

What a joke!  At some point the government is going to figure out that the key to solving the foreclosure crisis doesn’t rest solely with the supply side of the equation – they MUST stimulate demand with goodies like tax credits, accelerated depreciation, low interest rates, and government-backed loans.  Once you have demand, then guess what happens?   Prices begin to not only stabilize … but move up!  And when prices move up, less people go into foreclosure, and less people walk away from homes that are under equity.

Ok, enough of my soapbox.  You get the picture!  The Hope for Homeowners Program is truly hopeless.  Let’s hope they start focusing on where the focus needs to be: encouraging new buyers of homes and investment properties!

Setting Up for a New Year: Maintenance and Repair Index

This year make it a priority to set-up your books and other financial record-keeping to run smoothly and on auto-pilot. One useful measure is the maintenance and repair index. This shows how much maintenance and repair was required for each direct hour of labor invested.  It is an excellent alternative measure for short sale investors or real estate agents who need to track productive hours in relation to a given property. As every real estate investor knows, the 80-20 rule applies to real estate just as it does any other business situation; roughly 80 percent of your profit will come from 20 percent of your clients or holdings while 80 percent of your problems will come from only 20 percent of your holdings. Reducing those time-consuming properties and increasing those profitable properties is the key to building wealth.

How to Measure

Computing the Maintenance and Repair index is easy;

Maintenance and repair hours/Total direct labor hours = MRI

Example

Let’s assume you have two properties called A and B.

Maintenance and repairs for property A = 20. Total direct labor hours = 100. Total MRI = 20.

Maintenance and repairs for property B = 60. Total direct labor hours = 94. Total MRI = 60.

Obviously property B requires extensively more time for upkeep, maintenance and repairs. By calculating the MRI then assigning a dollar value to invested hourly time required, you can assure a reasonable return on time and opportunity cost while avoiding or eliminating poor performers.

How to Use

At least once per year, every short sale investor and real estate agent should take stock in their best and worst performers then cut the bottom 10 percent. Yes, it can be frightening to eliminate clients or inventory during tough economic times but the reality is you need to work smarter – not harder –when times are tough. Think of it this way, you only have x hours in any given day so they must be the most product possible. Clients or holdings that require unusual amounts of time, energy or maintenance actually detract from your full potential by causing you to miss other more profitable endeavors.  By continually maximizing your efficiency and reducing expenses –both in terms of time and money – you will be better positioned to take advantage of new opportunities as they arise.

See you at the top!

Chris McLaughlin
http://www.shortsalesriches.com/blog

P.S.:   Don’t miss our webinar tonight, Tuesday, at 9 PM EST!  We’re holding this Recession Proof Real Estate Investing webinar once again on a weekend to accommodate all those who are unable to join us at night!  Click here, there are only 17 spots available:

https://www2.gotomeeting.com/register/732240980