congressional budget office

 

Real Estate News & Commentary by Chris McLaughlin, March 23, 2009
http://www.shortsalesriches.com/welcome.html

——–

Brand New Investor Makes It Happen!  If you

missed the amazing testimonial from a newbie

real estate investor who made $51,000+ on her

first deal, go here now to watch this video:

 

http://www.youtube.com/shortsalesriches

 

Then grab a spot for yourself before they all

disappear in our no-cost, no-obligation
webinar right here live on Tuesday at 8:30 PM

ET, 5:30 PM PST:

 

https://www2.gotomeeting.com/register/982247811

———

Existing home sales rise 5.1%

 

The National Association of Realtors said that existing home sales rose in February to a seasonally adjusted annual rate of 4.72 million units, up 5.1% from a rate of 4.49 million in January, but down nearly 5% from levels a year ago.  Economists surveyed by Briefing.com were expecting existing home sales to decline to 4.45 million, so this is seen as a bit of good news.  The national median existing-home price is down 15.5% from last year, from $195,800 to $165,400.

 

Buying toxic assets

Treasury Secretary Tim Geithner announced a “Public-Private Investment Program” that will rely on the government’s $700 billion financial rescue fund, the Federal Reserve, and the Federal Deposit Insurance Corp., and private investors to buy $500 billion in so-called “toxic assets.”  If successful, the plan may expand to buy as much as $1 trillion.  The Dow reacted by opening up over 200 points today, in contrast to last time the Treasury attempted something like this.

 

Pricing toxic assets

While allowing these assets to sit on the banks’ book would drag out the crisis, a real problem everyone involved faces is what the assets are actually worth.  If the Treasury pays too little, the banks get burned, and if the Treasury pays too much, taxpayers get burned.  There is really no way to project the value of the assets until we find out how many of the component mortgages will be paid and how many will default.

 

Distrust of the Government

Ironically, fixing the AIG bonus problem with retroactive taxation (most of the bonuses will be taxed back under a Congressional bill) has created a far worse problem.  The “Public-Private Investment Program” calls for the involvement of private parties to partner with the Treasury, and the private sector is distrustful of a government that has been shown willing to retroactively break contracts it has already agreed to.

 

CBO finds more Trillions to lose

The Congressional Budget Office (controlled by Democrats) found that if the White House budget passes, the deficit would increase by $2.3 trillion more over ten years than the administration claims.  Entitlement spending on things that have nothing to do with stimulating the economy will increase by a whopping $1.1 trillion. In 2009 and 2010 alone, CBO estimates that the administration’s budget will increase spending by $347 billion more than the White House claims.  The Wall Street Journal’s editorial board is not amused, calling it “an express train to a European welfare state.”

 

Now on to our real estate investing education section …

 

A Series of Unfortunate Short Sale Events

 

So, you are finally taking your financial future into your own hands and have decided to invest in short sales. With a little planning, preparation and education you are likely to join the ranks of millions of other Americans that are taking advantage of the buying opportunity of a lifetime; low interest rates, dramatically reduce home sale prices and even a few tax incentives to sweeten the deal.  While short sales aren’t rocket science there are some common pitfalls that can turn a sure-fire deal into a series of unfortunate events.

 

The Bad Beginning – Working with sellers takes tact and a solid understanding of the system…a bit of psychology doesn’t hurt either. Remember, sellers are not always realistic (or many wouldn’t be in this situation in the first place) so don’t expect each and every one of them to recognize a good deal when it’s served to them on a silver platter.  In fact, some might become downright hostile and suspicious of your intentions or begrudge your attempt to make a profit from their misfortune. Put together a short sale package that appeals rather than repeals potential sellers.

 

The Wide Window – While many lenders are more than happy to entertain short sale offers others suddenly become fickle. Offers accepted are suddenly reject or additional stipulations placed on the closing. Rarely are these in the buyers best interest so learning ropes substantially increases the likelihood of a successful closing without the risk of last minute delays, properties being placed up for auction at the last moment and other increasingly common tactics.

 

The Miserable Mill – One of the caveats required for a successful short sale is the agreement of lenders including 2^nd mortgage holders. The further down the proverbial totem pole the lender is the more miserable they are likely to be at the prospect of a foreclosure.

 

The Slippery Slope – Sellers are signing purchase agreements with more than one buyer and then sending each to the mortgage holder for review in order to maximize their chances of receiving one valid contract. While this might initially appear like a good idea for sellers, it presents unique challenges to buyers.

 

The Grim Grotto – Properties are sold As Is but that doesn’t meant the underwriters are willing to let everything go without a second look. Insurance is also likely to get in on the act as well as the local property appraiser. In fact, it might seem like everyone has a grim opinion about your plans with a corresponding hoop they expect you to jump in order to finalize it.

 

The Penultimate Peril – Financing. Need we say more? This is where the rubber meets the road when it comes to running a successful short sales investment program.

 

The End – The good news is that the ShortSalesRiches.com system provides step-by-step instructions on how to deal with each and every situation you are likely to encounter and turn a negative into a positive. While other investors are struggling with one problem after another you will be closing deals and moving on to the next big profit. The difference is experience – we actually implement our own strategies rather than just write about them. See for yourself how easy it is to transform a series of unfortunate events into a pattern of success with our tools and information.

 

 

See you at the top!

 

 

Chris McLaughlin

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

 

P.S.

 

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

 

https://www2.gotomeeting.com/register/982247811

 

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

—-
“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 on tonight at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/896320431

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/896320431
—-
Mediocre.  Pathetic.  Lame.  These are just a few of the terms that came to my mind when I read over the details of the “stimulus bill” last night. The $789 billion at least cuts $100 billion of wasteful spending that would have otherwise been spent, but guess what?

It does little to address the real issue: HOUSING.

The $15,000 tax credit for ANY buyer of homes didn’t make it in the final package. The U.S. Senate tried, but the House of Representatives balked – too much other pork they need for their constituents I guess. The National Association of Realtors lobbyists didn’t muster enough political power to get it done.  What did get in the non-stimulus bill?

An $8,000 tax credit for first time home buyers that is now nonrefundable.  Right now a first time homebuyer gets a 7,500 tax credit that must be paid back over 15 years.  So this bill is an improvement over the last meager effort, but let’s face it folks: it isn’t going give us the shot in the arm that we need in this market.  Get ready for more short sales, more foreclosure, and declining home prices.

So, when they figure out how badly they’ve screwed this up, what we’ll see next is an effort to further reduce mortgage rates.  That’s nice and all, but what we’re finding is that even low interest rates aren’t getting folks off the fence.  Cash in their pocket will.  And that’s why the $15,000 tax credit would have been just the medicine we needed.  Shame, shame, shame on wasting almost a trillion dollars and not really addressing the real issue!

And what do the objective people say?  The Congressional Budget Office says that only 1.2 million to 3.6 million jobs will be added through 2010.   Obama’s number crunchers says 4 million.  If he’s wrong, and the lower end of the CBO office is correct, this is going to be the most expensive boondoggles ever.  Ugh. 

Now, on to our real estate investing section…

Living on $850 Per Month

Does this sound like an enticing scenario? If not, better start making some type of alternative plans for your financial future because left to the federal government’s best economic advisors, this is what the average American worker can expect to receive in the form of inflation adjusted Social Security retirement benefits.

To add insult to injury, the standard retirement age is expected to continue creeping upward from 65 years to the current 67 for younger workers and as late as 70 to 72 for future retiree’s.  Remember, although the dollar amount might eventually increase, the inflation adjust level is expected to remain at the equivalent of $850 in today’s earnings…now ask yourself, are you able to actually live on a mere $850 per month?

Not just for one or two months, not even for six months or a year…but actually live on $850 per month for whatever time you have remaining at retirement? Even if you somehow manage to keep working into your early 70’s (and we don’t know too many companies beating down a door to hire elderly workers for more than Walmart greeters or a few part-time baggers at the local grocer), how will you feed yourself, pay utilities, buy clothing, insurance, mortgage and property taxes on the equivalent of $850 per month? Remember, the average American now lives to their mid 80’s and experts believe medical advances could extend that to the 90’s or beyond. Hmmm, $850 a month for 15 to 25 years?

Buying a car, taking a vacation and eating out will become unaffordable luxuries for those attempting to maximize monthly benefits on a dwindling standard of living. So, how much will you need to set aside? In today’s current earning capacity, you would need over a half million dollars to generate an additional $25,000 to $35,000 income.

On the other hand, you can use leverage to purchase short sales real estate and easily double your retirement benefits with as little as one rental. Heck, splurge and purchase two and you might be able to afford a round of golf now and then. While you are at it, why not go ahead and pick up a half dozen or maybe a full baker’s dozen…flip for short term profits or hold until retirement to build a profitable real estate retirement that only kicks in once you need it. Allow tenants to pay the mortgage in full while you continue to work full-time without the headache and hassle of hunting down elusive part-time jobs over the years.

Instead of depending upon the government pension plan, take steps to secure your future with short sales with these simple to start steps:

1.      Calculate how much you would need to live comfortably into retirement. 

2.      Calculate how many remaining years you have until retirement age.

3.      Determine how many rentals you need to buy to reach your retirement goals.

4.      Finance each mortgage to be paid in full by retirement age (ie, fixed 15 year term, 20 year term, 30 year term etc…).

5.      Search for homes where rental rates will cover the cost of PITI for the mortgage term outlined above. Purchase enough homes to make up the difference between your government and private pension and additional funds required to provide the standard of living you can live with.

 

See you at the top!

 

Chris McLaughlin

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

P.S.

This week’s webinar replay is right here…

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

P.P.S:

Wow! This just ranked as the most watched real estate
investor training video ever in a single day!

It’s pretty obvious why once you see it . . .

https://commercial.infusionsoft.com/go/mmic/a181/

Check it out now.

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

 —