chris guldi

 

Real Estate News & Commentary by Chris McLaughlin, March 19, 2009
http://www.shortsalesriches.com/welcome.html

——–

“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live on Thursday night at
8:30 PM ET, 5:30 PM PST:

 

https://www2.gotomeeting.com/register/995947853

 

Why would I do that for no charge?  Because
I want a chance to tell you about the other
high-income opportunity, too.

 

And I can’t do it in an email.

 

But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early.  See if there’re any spots
left:

https://www2.gotomeeting.com/register/995947853
———
Floods of money:  Recovery or inflation?

 

The Federal Reserve was widely expected to hold the short-term bank lending rate at between zero and 0.25 percent, so it came as no surprise when it did.  The decision to dump money into the economy to try to buy us out of the recession was only slightly more surprising, but the amount — $1.2 trillion — took everyone by surprise.  Hoping to lower mortgages rates and consumer debt, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

 

Market reaction

The immediate market reaction was good:  the Dow bounced 90 points, the S&P soared, and all market indicators were generally positive.  Government bond prices leaped too, since mortgage rates will be going down even further than before.  If, and it’s a great big if, this can help stabilize credit markets and get us all spending, the economy may start to climb out of recession this year.  But is there a catch?  You bet.

 

 Inflation

Some economists — the ones with more than 10 minutes training in economics 101 — say the $3.9 Trillion slated for the budget can’t help but create galloping inflation the minute the economy starts to recover.  In fact, inflation may not even wait for the recovery; the dollar took an immediate tumble against other major currencies with the Fed announcement.  The Wall Street Journal’s Judy Shelton doesn’t mince words:  “How can capitalism find its footing when the monetary foundation is shifting with each new government bailout — each new infusion of deficit-financed government expenditure?  American families deserve better than to be punished by wasteful public spending and ruinous inflation.”

 

More free eco-cash

So you didn’t qualify for freebies from the mortgage bailout?  Cheer up — Washington is on a spending spree, and you can get up to $19,000 in upgrades to your house.  Expanded tax incentives in 2009 and 2010 for energy-efficient and renewable-energy home improvements include $1,500 in tax credits for qualifying windows, doors, insulation, roofs, heating and cooling equipment, water heaters, and even wood and pellet stoves. You’ll get a tax credit of 30% with no upper limit through 2016 for installing qualifying solar technology, small wind-energy systems, or geothermal-well systems.

 

AIG again

The House will vote today on a bill to levy a 90 percent tax on bonuses paid to employees with family incomes above $250,000, who work at companies that have received at least $5 billion in government bailout money.  Edward Liddy, brought in last year by the government to run AIG, told a House subcommittee Wednesday that the company was contractually obligated to pay the bonuses but added that many of them had already returned part of all of the bonuses.  The saga continues.

 

Now on to our real estate investing education section …

 

Fast Facts About the Stimulus Bail-Out

 

Short sale investors are likely to encounter clients that want to hold out for a big fat government paycheck rather than walk away from a home. After all, the media is filled with reports about big checks, bail-outs and “free money.”   Of course, scams and other fraudulent schemes abound making it tough to educate consumers about the facts versus fiction of the stimulus plan. Here to help is a quick primer about the proposed bail-out:

 

Fact: In order to refinance homeowners must be up to date on their current mortgage yet still demonstrate that they are “at risk” of facing foreclosure. The government anticipates up to 4 million households will fall into this delicate balancing act in order to qualify for funds…and it’s not limited to just owner occupied homes.

 

Fact: Mortgage modification clauses are much more difficult to obtain. Homeowners will have to satisfy the following stipulations in order to qualify:

 

Second lien holders must agree to waive or write-off obligations.

 

The home must be worth 80 to 105 percent of the current mortgage.

 

The primary lien holder must agree to modify principle, extend the duration of the loan and/or reduce interest rates to as little as 2 percent…or a combination of all of the above.

 

The homeowner must agree to credit counseling if they have extensive household debt in addition to high mortgage obligations.

 

Homes must be the primary residence and currently occupied. Homes cannot be vacant, in need of extensive repairs or otherwise hindered.

 

Up to $1,000 annual incentive payments will be made for up to five years – but only if the homeowner isn’t late on payments.

 

A new inspection may be required as well as the following documents:

Recent tax return and 2 to 4 recent pay stubs. Self-employed borrowers will need copies of quarterly estimated tax returns and prior year return.

 

Copies of all bank statements.

 

Proof of income from Social Security, alimony, child support or other income that you intend to use for the purpose of qualifying.

 

Current mortgage and liens including second mortgages.

 

Completed copies of Form 4506-T…a Request for Transcript of a Tax Return.

 

Completed copies of Form 1126 – a Borrower Financial Information form.

 

Proof or documentation of hardship, job loss, or other factors that may have influenced your current financial situation.

 

See you at the top!

 

 

 

 

Chris McLaughlin

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

 

P.S.

 

Don’t miss out webinar this coming Thursday night at 8:30 PM ET, 5:30 PM PST:

 

https://www2.gotomeeting.com/register/995947853

 

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.reomillionaireclub.com 
http://www.sixfigurebpo.com *************************************************
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

*************************************************

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

     * On twitter: http://twitter.com/mclaughlinchris
     * On facebook: http://www.facebook.com/addfriend.php?id=709199143

—

Real Estate News & Commentary by Chris McLaughlin, March 13, 2009
http://www.shortsalesriches.com/welcome.html

——–

“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live on Saturday at
3:00 PM ET, NOON PM PST:

https://www2.gotomeeting.com/register/295232483

Why would I do that for no charge?  Because
I want a chance to tell you about the other
high-income opportunity, too.

And I can’t do it in an email.

But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early.  See if there’re any spots
left:

https://www2.gotomeeting.com/register/295232483
———
First a letter from its CEO led the financials higher this week, but now Citigroup’s Chairman, Richard Parsons, said that the banking behemoth would not need additional capital from the government.  “Citi is actually one of the better capitalized banks in the world,” he noted.  When asked by Reuters whether he believed the US government would attempt to nationalize the bank, Parsons retorted: “I don’t think the administration is heading in that direction…but I have a lot of confidence in the future viability and strength of a privately held Citi.”

The Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending March 6^th indicated a 11.6% increase compared with the prior week for the total composite index, which includes both refinancing and purchase.  The Refinance Index was up 13.5% to 3470.7 while the Purchase Index increased 7.1% to 253.3.

The association also reported today that the weak economy and credit crunch have led to increases in commercial mortgage delinquencies for the last quarter of 2008.   “As expected, the weakening economy continues to take a toll on the performance of commercial and multifamily mortgages,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.  “But counter to the popular urban myth, commercial and multifamily mortgages are actually performing better than just about every other type of loan. Of more than 35,000 commercial/multifamily mortgages held by life insurance companies, only 33 loans were delinquent at the end of 2008, and commercial/multifamily mortgages ended 2008 as some of the best performing loans held by commercial banks and thrifts.”

Now on to our real estate investing education section …

$10,000 Homes – Gold Mine or Money Pit?

Recent figures from the Department of Housing and Urban Development reflect the startling trend of sub $10,000 homes in the Detroit market; investors, first-time home buyers and others seeking to preserve buying power or reduce out of pocket expenses are flocking to purchase a cash only home for pennies on the dollar but are homes that cost less than a used car a gold mine or money pit? It depends on who you ask and why they are buying. 

Those Likely to Benefit

There are those that are likely to benefit from purchasing an ultra-low cost home including:

Retirees & Low Income Baby Boomers. Those on a fixed income like Social Security, Disability payments or a small pension plan may very well benefit from purchasing a low cost home for $10,000 or less. Assuming the home is in decent condition, the super small mortgage or cash only purchase may put them back on track to taking care of one of the most pressing problems facing many retirees; affordable housing. With the average cost of a 1 bedroom apartment in excess of $450 per month nationwide, the total cost of the home could pay for itself in two years or less.  Baby Boomers with low incomes or even less savings would also benefit from buying now to protect their purchasing power especially should inflation take place in later years.

SOME Short Sale Investors. Unlike many areas of the nation where ultra-low cost homes are in need of extensive repairs, real estate agents report many of the homes in Detroit neighborhoods are actually in good condition and sold for 5 or even 10 times the current asking price as little as three years ago.

While it might seem obvious that the original buyers failed to make ends meet, don’t assume there isn’t room for big profits for new investors. A property that failed to cash flow at $50,000 to $100,000 might have plenty of room for profit at only $10,000. But before you run out to buy up entire blocks of Detroit real estate have a plan of action; unemployment is high, property taxes are major considerations and resale values could remain depressed in the area for some time to come.

Those Likely to Loose

Not everyone is likely to benefit from buying low priced homes in Detroit or elsewhere throughout the nation including those desiring to buy a first home and trade-up over time. While an ultra-low cost home may still appreciate substantially in value, the original starting price is so low that it could negatively impact your ability to afford a new home for years to come.

Even if the cost of the home quadrupled in value, it would still only provide a down payment in many markets across the nation. Worse, the proportional cost of taxes, insurance, PMI and other fees are higher as a proportional basis for sub-$10,000 homes. Likewise, the maintenance and repairs – especially for those purchasing multiple homes – is likely to be higher over time. Finally, be sure to consider the opportunity cost of purchasing an ultra-low cost home instead of a higher priced home with today’s low interest rates.

See you at the top!

Chris McLaughlin

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

P.S.

The Recession Proof Real Estate Investing webinar is this Saturday at 3:00 PM ET, NOON PM PST.  Don’t miss out … click here:

https://www2.gotomeeting.com/register/295232483

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.reomillionaireclub.com 
http://www.sixfigurebpo.com *************************************************
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

*************************************************

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

     * On twitter: http://twitter.com/mclaughlinchris
     * On facebook: http://www.facebook.com/addfriend.php?id=709199143

—

 Real Estate News & Commentary by Chris McLaughlin, February 10, 2009
http://www.shortsalesriches.com/welcome.html

—-

“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 6 spots left for
tonight’s webinar that begins at 8:30 PM ET, 5:30 PST.
Go and grab one of these last openings NOW, or miss out.

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

—-
The Wall Street Journal reported today that banks will receive what doctors commonly refer to as a “stress test” before receiving additional money.  The short of it: if you aren’t healthy enough to lend, you might not receive any more government aid.  We’re not going to do surgery on a patient that won’t wake up.  Treasury Secretary Timothy Geithner said: “We want their balance sheets cleaner, and stronger. And we are going to help this process by providing a new program of capital support for those institutions that need it.”  But banks need to start lending, else they won’t be getting additional help, since “every dollar of assistance preserves or generates lending capital above the level that would have been possible in the absence of government support,” noted Geithner.

At least the new Treasury Secretary is more sensitive to public perception than his predecessor.  The “Troubled Asset Relief Program” will now get a nice fluffy new name: the “Financial Stability Plan.”  Ahh, I feel better already, don’t you??

Well, until I just continued reading the WSJ article, where it noted that RBC Capital Markets research shows that over 1,000 banks could go under in the next few years, which is triple its prior estimate.  But guess what?  Many of them should absolutely fail.   That’s how capitalism works, folks.  If a bank took unnecessary risk, and leveraged itself with bad assets, at some point the markets have to correct themselves and those that were in trouble need to be punished for being dumb, and those that made the right moves should be rewarded with increased market share in loans and deposits.  If not, then you simply create a moral hazard again where companies take unnecessary risk because they know Uncle Sam will come and bail them out again.

Meanwhile, last night there was a press conference that sobered up anyone sitting around drinking a few beers.  They got a douse of frank talk from President Barack Obama.  In a televised address, the new President did little to calm fears; rather he talked of the “profound economic emergency” our country faces.  The President that normally talks of hope was clearly tightening his message to the critics of his economic stimulus plan: “The plan is not perfect. No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans,” he said.

Actually, Mr. President, many in the real estate trenches that have been living this recession and feeling the pain think that the House Democratic plan does little to stimulate housing demand and is full of so much pork that it could feed every human being on Earth with bacon from now until the end of time.  But the Senate plan, which at least includes at $15,000 tax credit for home buyers, will make some headway even if we want to waste billions on silly projects like putting new grass on the National Mall.   So what I can say with complete confidence is that if you don’t fix housing, you’re blowing billions of dollars trying to keep people employed who will just be out of work once the pork runs out.  Fix Housing First! ‘Nuf said.

Now, on to our real estate investing section…

What’s Better – Short Sales or Gold?

Historically gold has served as a store of value throughout most of history so it should come as no surprise it is a favorite among contrarian investors and those seeking a safety “hedge” against both inflation and deflationary pressures…but does gold really measure up to its reputation? Before putting their hard earned money into the hands of an ETF or placing big orders for bullion, short sale investors and others seeking real returns on their money would do well to evaluate the actual numbers – not just the hype. Let’s begin by examining a few facts:

During the last bout of major inflation, the average price of gold went from $41 per ounce in 1971 to over $610 in 1980 before reaching a high of $875 per ounce. Today, gold is selling for approximately $900 per ounce…a mere 50 percent increase in 29 years. Adjusted for inflation gold would need to be selling for $2,000 to $2,500 per ounce in order to reach its former high’s…clearly, not a solid investment for those seeking “safe” returns. On the other hand, in 1971 the average home sold for roughly $28,000. By 1980 the average selling price increased to roughly $75,000 and by 2006 the average American home was selling for over $240,000. Despite the recent downturn in the real estate market, homes are still selling (on average) for over $180,000.

To provide some perspective, in 1980 it required approximately 85 to 122 ounces of gold to purchase the average home in the United States whereas today you would need 200+ ounces of gold to purchase the average discounted home. Additionally, gold provides zero tax advantages when holding and depending upon the form, may be lost, stolen or require additional storage fees. On the other hand, real estate provides favorable tax advantages and may generate additional cash flow through rentals, leasing or sales of raw materials and assets included in the purchase price of the property.

Further complicating the issue is the advent of ETF’s (Exchange Traded Funds)  or other paper-backed gold proxies. Unlike taking physical possessions of gold, the use of ETF’s, gold stock and other substitutes may allow investors to take advantage of leveraging to increase profits while eliminating much of the storage issues surrounding gold however, the resulting “I.O.U.” negates much of the “safety” surrounding gold as an investment hedge. Real estate provides investors and opportunity to use leverage while taking physical possession of an actual tangible assets – not merely some type of I.O.U.. Even experts agree the amount of physical gold is nowhere near the sums required to fulfill even a fraction of the obligations currently outstanding; hence, the disparate trading between physical sales of gold versus paper gold sales in the recent months.

In summation, investors searching for tangible assets with real rates of return would do well to turn to short sales above gold especially during uncertain economic times.

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 8 hours:

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

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com/welcome.html
http://www.youtube.com/shortsalesriches
*************************************************
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
*************************************************

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

 —