john stumpf

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

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“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
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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:

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Can one letter make a difference?

That’s what it seemed like today. Positive words weren’t coming from our President or members of Congress, and yesterday’s interview with Warren Buffett, where the billionaire told everyone that our economy had fallen off a cliff, certainly spooked many investors. But Citigroup CEO Vikram Pandit sought to give his employees some good news about his battered company.

“I am most encouraged with the strength of our business so far in 2009. In fact, we are profitable through the first two months of 2009 and are having our best quarter-to-date performance since the third quarter of 2007. In January and February alone, our revenues excluding externally disclosed marks were $19 billion,” wrote Pandit. The CEO further stated that its capital strength remained strong and that any “stress test” performed by the government should confirm that. The stress test is likely to take into consideration tangible common equity; Pandit notes that Citigroup has $81 billion in common equity and its tangible common equity ratio stands at 11.9%.

And a few more eyebrows were raised today about the CEO compensation for Wells Fargo’s John Stumpf. Wells Fargo took $25 billion from the Troubled Asset Relief Program but awarded its CEO Sumpf $13.8 million in compensation. This comes on the heels of an investigation by New York Attorney General into the bonuses paid to Merrill Lynch executives’ prior to the company’s sale to Bank of America.

Now on to our real estate investing education section …

Numbers to Know – Personal Debt to Personal Assets Ratio

As short sale investors seek funding to purchase distressed and below market value properties, one important number to know is one’s own personal debt to personal assets ratio. Lenders and banks of all sizes are increasingly cracking down on marginal buyers so prepare to put your best foot forward by making it easy to lenders to like what they see.

The Personal Debt to Personal Assets ratio is easy to calculate and puts a positive spin on many small buyers just breaking into short sale investing. By providing a quick ratio that summarizes the total debt to total asset value, the bank is able to determine how much of your assets are financed versus equity positions. This can also be very useful for seasoned investors that have large equity positions but still carry large loans.

How to Compute

To calculate the personal debt to personal asset ratio simply tally up the total of your personal debt then divide by the total of your personal assets. The final number will be the ratio. For example, let’s assume you hold a current mortgage plus other debt in the amount of $250,000 with a household income of $50,000.

Based strictly upon your debt to income ratio you could be considered a marginal buyer. On the other hand, if you held other assets free and clear in the amount of $750,000 then the personal debt to asset ratio would show $250,000/$750,000 or only 33 percent rage. That means for every .34 cents in debt you owe, you have assets of $1 available. The lower the ratio the better since it shows an alternative source of potential collateral above and beyond that of the real estate in question.

How to Use

Use the personal debt to personal asset ratio rather than debt to income ratio if you have high equity positions, own valuable assets or real estate outright, have low income levels (for example, a fixed retirement income or variable self-employment income) but desire the ability to demonstrate ample assets to secure funding to purchase short sale property. Avoid this ratio is you are already over your head in debt or have a very high income which may be better reflected in the debt to income ratio instead.

How Do You Measure Up?

.80+ = Find another measure…this doesn’t present you in the best light

.60 to .79 = A tough sale to prospective bankers without an extremely compelling deal in today’s climate

.40 t0 .59 = Do-Able once you find the right lender. You are in a solid position with enough equity to cover the new loan even if the value dropped to zero (a highly unlikely proposition).

.20 to .39 = Strong position.

0 to .19 = Expect the royal treatment as lenders scurry to secure a gold-mine like you for their portfolio.

Make sure you sign up for tonight’s webinar at 8:30 PM ET, 5:30 PM PST. Do so my clicking here:

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See you at the top!

Chris McLaughlin

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

P.S.

Don’t miss this great video testimonial about short sale coaching:

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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…

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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

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

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Mid-Day Market News & Commentary by Chris McLaughlin, December 11, 2008
http://www.shortsalesriches.com/welcome.html

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Are you ready to crack the law of the lid? Are you ready to get serious about your business and wealth heading into 2009? If so, you have to go now and watch Nathan’s youtube video! Leave some comments on it …this is AMAZING to watch, and all TRUE:

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After you’ve watched it go here and learn how to make serious money in a recession:

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Financial markets were a bit jittery in early morning trading as new unemployment claims jumped to 575,000, much larger than the 525,000 that was expected by Wall Street analysts. This is the largest level of jobless claims since 1982 and represents a 26 year high. The government attributed the unusual jump to administrative catch-up after the Thanksgiving holiday but the 26 year high is what it is … a sign of the financial times.

Mastercard’s SpendingPulse, a division that monitors consumer spending habits, reported that overall retail sale (excluding cars) dropped 5.5% to 295.3 billion in the month of November. Meanwhile, the Wall Street Journal reported America’s Research Group/UBS found in a study of 1,000 people that 40.1% of those surveyed said they would spend less this holiday season that last.

And there’s some good news for Realtors and investors. The CEO of Wells Fargo, John Stumpf, spoke at the Goldman Sachs U.S. Financial Services Conference and was optimistic about real estate sales. “We’re not at the end,” he said. “My suspicion is there is some more to go. But we’re starting to see some early signs that maybe we’ve reached the bottom in housing or close to it.” Stumpf noted multiple bidders have come out to make offers on foreclosed properties.

Now on to real estate investing information …

The Magic Money Formula

Don’t worry; we aren’t suddenly promoting some financial equivalent of snake oil that promises an overnight cure to all your financial woes. Instead, we are revisiting a formula first popularized by Dale Carnegie and recreating it for short sale investors.

One of the most difficult things many new to short sale and foreclosure investing encounter is the fear or inability to effectively communicate with potential sellers, banks and other stakeholders. Fortunately, it is easy to improve your communication skills with just a few simple steps.

Step One: Engage. It is important to engage your listener rather than informing them. While education is important, it also has a tendency to put people on the defensive if used too soon. Instead, tell your listener an interesting story that demonstrates the main point of your conversation. Be sure to use the word “because.” Research has shown people are twice as willing to do what is requested of them when the speaker simply provides a reason…in fact, even a bad reason will suffice although a good reason is even more effective.

Step Two: Direct. The next step is to outline what action needs to be taken. Use the K.I.S.S. approach (Keep it Simply Stupid) and be sure not to overwhelm your listener. Focus on the main objective or point of action needed and be as specific as possible without pushy. Most important of all, don’t assume your listener knows of understands your needs. Even other professionals may inadvertently forget or simply not put a priority on your plan of action if not specifically requested to do so.

Step Three: Benefit. The final step is to clarify how the listener will benefit as a result of your plan of action. Make sure you spell out all the benefits in detail beginning and ending with a big benefit. This part of the conversation should be all about “them” – not you. Don’t be afraid or apologetic about making a profit; after all, that is a reasonable expectation for a business transaction; instead, demonstrate that this is a win-win situation for all parties involved.

If your short sale investments are not as strong as they could be or if you find yourself hesitating before negotiations, try this formula for yourself. It’s deceptively simple yet effective.

See you at the top!

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

P.P.S.: Interested in making a bundle of cash without having to do any of the work? If you can click the SEND button on your computer and introduce others to Short Sales Riches, you can earn thousands of dollars in one month! One affiliate was paid over $12,000 last month alone! All the information to sign up as an affiliate is right here:

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The Magic Money Formula for Short Sales … As Unemployment Hits 26 Year High

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