lawrence yun

Real Estate News & Commentary by Chris McLaughlin, February 25, 2009
http://www.shortsalesriches.com/welcome.html

—-
Recessions hit us all differently.  Al Capone
once complained that hard times forced him
to lay off 4 judges and 2 Congressmen.

Seriously, the results are always uneven in bad
times.  Most people lose money, but some actually
get rich.

But if you’re in the real estate business, then
you have one of two choices: feast or famine.

Both are available.  Which one have you chosen?
Click here to learn about our Recession Proof Real
Estate Investing webinar tonight:
https://www2.gotomeeting.com/register/628859068

–
The National Association of Realtors reported that existing home sales declined by 5.3% to a seasonally adjusted annual rate of 4.49 million units.   Some analysts believe buyers wanted to learn more about the incentives they might be given in the Obama stimulus package before making a purchase.  Lawrence Yun, NAR chief economist, said there was hesitation by some home buyers. “Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” he said. “The housing market will soon get a lift from very favorable buying conditions – not only from improved affordability, but also from the stimulus of an $8,000 first-time home buyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates.”

To rent or to buy?  That’s the question raised by the Wall Street Journal in an article today by Nick Timiraos.  The article notes that for the past 18 years after tax mortgage payments have averaged 26% more than rent payments, but with the decline in home prices that number has moved to 24%.  And if mortgage prices continue to drop to 4.5%, as many expect, the gap will close to just 14% more than rental payments.

And in some metro areas the rent gap is becoming a lot closer.  Between 1990 and 2008, Los Angeles mortgage payments used to average over 60% more than rent payments but now they are just 30% more than rent.  When adding in the mortgage interest deduction on one’s taxes that gap narrows even further. 

The Mortgage Bankers Association said that mortgage applications dropped last week by 15.1% to 743.5.  But the decline should be viewed in the context of the prior weeks’ surge in applications to 45.7%.  The four week moving average was up .4%. 

Now on to our real estate educational section …

Who You Goin to Call?

One of the most common complaints that keep short sale properties on the market is the lack of maintenance and/or outright vandalism taking place in vacant homes across the nation. While this is a very real concern, many of the problems are less costly and time consuming to repair than you might expect. Short sale investors searching for fast and affordable ways to makeover their latest purchase don’t need to spend a fortunate to increase curb appeal and demand a higher price; instead, they only need to pick up the phone to schedule the following fast and affordable help:

1. Call a Landscape Company. First impressions matter but overgrown hedges, dead flower beds and large dry patches scattered throughout the lawn are commonly encountered short sale problems. Rather than spend your hard earned time doing lawn maintenance, simply call a company to handle it all for you. Pay over the phone via credit card and remember, it is a tax write-off. Within a day or two you can transform even the worst landscape into a veritable Garden of Eden.
2. Call a Painter. Once the yard is taken care of it is time to invest in a few pails of paint. Both the interior and exterior will typically benefit from a fresh coat of clean, color neutral paint. Call a company to have it done for you – or if you only need a quick refresh, a handyman service often costs less than a professional paint company. Be sure to save the receipts for tax purposes. Those on an extra tight budget can purchase “oops” paints and either remix or get creative in the color scheme.
3. Call a Handyman. Every home has a few areas in need of attention; simply schedule a handyman to take care of those broken locks, sticky windows and other minor irritations that make a home appear old and uncared for. A handyman will also be able to assist in debris removal or other odd jobs that might remain.
4. Call a Cleaning Company. Make sure they are a full service cleaning company able to take care of the carpets, air ducts, tile and wood floors plus regular maid services all at once. Negotiate a big price break for having all work performed at one time and insist upon the use of non-toxic “green” cleaners that use the latest in enzymatic odor removal.  The cleaning company is also able to provide carpet repairs and other services to restore everything from unsightly grout to resealing the concrete around a pool. Ask for quotes before investing in replacements.

See you at the top!

Chris McLaughlin

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

P.S.

Don’t miss out on Thursday’s amazing webinar on Recession Proof Real Estate investing:

https://www2.gotomeeting.com/register/628859068

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.reomillionaireclub.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
—

Market News & Commentary by Chris McLaughlin, January 26, 2009
http://www.shortsalesriches.com/welcome.html

——
It really isn’t as difficult as you might think it is … but it all starts with TAKING ACTION.  If you want something that you never had, you need to do something that you’ve never done, right?  So forget all the negativity, and forget all the turmoil.  More millionaires are created during times like these than any other time … so are you ready to make it happen?  If so, be one of the 40 spots that we have left for our Tuesday webinar at 8:30 PM EST / 5:30 PM PST entitled “Recession Proof Real Estate Investing: How to Buy Property with no out of pocket costs!”

The link is right here, so jump on this now:

https://www2.gotomeeting.com/register/323668815

———

In real estate related market news today…

The National Association of Realtors reported that existing home sales jumped 6.5% to a seasonally adjusted annual rate of 4.74 million units in December versus November’s seasonally adjusted 4.45 million units.   The results are still 3.5% below the 4.91 million units in December 2007.   The year over year period was not as kind, however.

For all of 2008 there were 4,912,000 million existing home sales compared to 5,652,000 sales in 2007, a decline of 13.1%. 

Lawrence Yun, NAR chief economist, said home prices continue to drop. “It appears some buyers are taking advantage of much lower home prices,” he said. “The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions. Buyers will continue to have an edge over sellers for the foreseeable future.”

In other positive news, housing inventory dropped 11.7 percent to 3.68 million existing homes, representing a 9.3 month supply, which is down from an 11.2 month supply in November.   The national median home price in December was 175,400, which is 15.3% lower than December 2007’s $207,000.

And if you saw our blistering report on former Merrill Lynch CEO John Thain’s spending spree (he spent over $1.2 million on his office renovation last year), you’ll be glad to know that Mr. Thain stepped forward today and said he’ll personally pick up the tab.  Thain said it was a mistake “in light of the world we live in today” and that the renovations, which were incurred in early 2008, were “in a very different environment.”   Thain also said that the media was mistaken about Merrill Lynch’s bonuses, which he claims were 41% lower than 2007.

Now, on to our real estate investing section…

What’s Better – Silver or Short Sales?

When it comes to investing in alternatives designed to “hedge” your risk against the market, silver is a popular choice especially among many contrarian investors. Considered the “poor man’s” precious metal investment, silver has a long history of being used both as money and as an industrial metal. It’s also portable, easily liquidated and easy to store…but is it a solid investment? Given the choice, where would one rather invest their hard earned cash…short sales or silver? Let’s take a look and consider the evidence for and against each.

Common wisdom holds that both real estate and silver provide important protection against inflation…while it may be true that silver reached a high in excess of $50 (not adjusted for inflation) after the inflationary era of the 70’s, in large part it was due to a major move by the Hunt brothers in an attempt to dominate the market. Once that episode was put to rest via legislative intervention, silver experienced a continuous decline for the next 30 years…reaching a low of approximately $2.50 – NOT adjusted for inflation! Clearly, anyone holding silver and was forced to liquidate during that period of time would have lost money…in fact, silver recently reached a high of $21 during 2008 only to drop by over 40 percent just months later. However, silver requires no maintenance, upkeep, taxes or insurance to support so buyers can hold it for years without experiencing high transactions or holding fees.

On the other hand, real estate has also been considered a long term hedge against rising rates of inflation. While real estate does require maintenance, insurance and property taxes to be paid on an annual basis it is also possible to offset or support the property through income generating activities such as rentals – without having to liquidate the property itself. While real estate also experienced major gains during the inflationary era of the 70’s…and a corresponding drop in many areas of the nation during the early 80’s…the majority of real estate holdings held their own during the interim years.

To compare silver against short sales, let’s take a long term outlook of what would have happened to $100,000 invested into each during 1980…

Average price of silver in 1980 was $48 which would purchase 2,083 ounces of silver. Today, the price of silver…NOT adjusted for inflation…is $11.30. That same 2,083 ounces of silver would be worth $23,538. Adjusted for 29 years of inflation and the actual purchasing power would be substantially less. Clearly the silver investor would not be pleased by the ‘hedge’ provided by silver.

Now let’s take a look at $100,000 invested in real estate during 1980. The average cost of a brand new home was $68,700 so you could have purchased 1.5 new homes or approximately 2 average sized re-sale homes. Even accounting for the dramatic declines in housing prices experienced throughout 2008, the average cost of a home still stands at roughly $180,000 or nearly 3x’s the original selling price of a home. Take time to calculate the numbers for yourself; any way you work it, short sales come out on top. Decide for yourself which is the wisest path to profit for the coming years: silver or short sales? Remember, all that glitters isn’t gold or silver…sometimes it’s real estate.

 See you at the top!

Chris McLaughlin

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

P.S.: It really isn’t as difficult as you might think it is … but it all starts with TAKING ACTION.  If you want something that you never had, you need to do something that you’ve never done, right?  So forget all the negativity, and forget all the turmoil.  More millionaires are created during times like these than any other time … so are you ready to make it happen?  If so, be one of the 40 spots that we have left for our Tuesday webinar at 8:30 PM EST / 5:30 PM PST entitled “Recession Proof Real Estate Investing: How to Buy Property with no out of pocket costs!”

The link is right here, so jump on this now:

https://www2.gotomeeting.com/register/323668815

Copyright Loss Mitigation Institute 2009.

All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.sevenfigurereo.com (sold out!)
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 5 different
     offices, supporting nearly 500 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

 —

Mid-Day Market News & Commentary by Chris McLaughlin, December 23, 2008
http://www.shortsalesriches.com/welcome.html

——
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

Over 50% of Loan Modifications In Default Again

Mid-Day Market News & Commentary by Chris McLaughlin, December 9, 2008
http://www.shortsalesriches.com/welcome.html

——
Let’s be Frank!  Yes, Frank is a real client who made REAL money with the Short Sales Riches System … over $115,000 in one deal!  And he only had $30 in his bank account.  Think this can’t be true?  Find out for yourself!  We’re holding this again because of the tremendous demand that jammed up our servers last week … Right now there are only 8 spots left for tonight’s webinar:

Recession Proof Investing Webinar (Tuesday, 9 PM EST, 6  PM PST):

https://www2.gotomeeting.com/register/848641949

—–

Good news for Realtors and investors … Home sales in October weren’t off as much as expected.  The National Association of Realtors Pending Home Sales Index dropped .7 percent to 88.9 versus 89.5 in September.  Economists had been expecting a drop of 3.2 percent versus the .7 percent.  “Despite the turmoil in the economy, the overall level of pending home sales has been remarkably stable over the past year, holding in a generally narrow range,” said Lawrence Yun, the NAR’s chief economist.

And if you thought REOs and short sales would slow going into 2009, you better think again.   According to the Office of Comptroller of the Currency, which evaluated loan modifications made in the first half of 2008, 36% of borrowers had re-defaulted by being more than 30 days late.  Furthermore, after 6 months, the rate was 56%. 

What does this mean?  It means that there is a lot of legitimacy to the argument that the government should not throw good money after bad and provide loan guarantees for loan modifications; rather they should use that money to create jobs for new purchasers.  As Office of Thrift Supervision John Reich said:  “I do have a concern about money for loan modifications, particularly with such a high range of re-default.”  Reich further stated that “[f]ocusing on job creation is a better way to focus federal dollars than on a loan modification process may be only partially effective.”

All eyes were on Congress today as Fannie Mae and Freddie Mac officials defended their actions, or at least tried to spread the blame around for the current housing crisis.   But House Oversight and Government Reform Committee Chairman Henry Waxman (D., Calif.) said that” the CEOs of Fannie and Freddie made reckless bets that led to the downfall of their companies…[t]heir actions could cost taxpayers hundreds of billions of dollars.

“But it is a myth to say they were the originators of the subprime crisis. Fundamentally, they were following the market, not leading it,” he continued.

Now on to our real estate educational section…

Safe Money Moves for Unstable Economic Times

Searching for save money moves during these unstable economic times? Chances are you drive by one of the best investments every day; short sale real estate remains one of the best places to park your cash. Not convinced? Keep reading to find out why short sale investors are taking in more profits than ever despite the downturn in the economy.

1.     Inherent Value – Not an I.O.U….unlike other forms of paper-backed investments, real estate has an inherent value rather than simply an I.O.U. issued in exchange for debt. Stocks, bonds and other financial instruments are no better than the paper they are printed upon when the economy takes a turn for the worst. When confidence fails, there is little more you can do with them than use them as fuel for a fire. On the other hand, real estate provides shelter, food, entertainment, natural resources and more.

2.     Indexing “Hedge”. The media is beginning to talk about the possibility of devaluation of the dollar. Should this type of “worst case” scenario take place, all dollar denominated investments are likely to be impacted. Historically, tangible assets fair well during even the toughest economic times.

3.     Contrarian. Investing is a numbers game; by definition for there to be winners there must be losers. As harsh as it may sound, savvy short sale investors recognize this reality and take steps to protect the financial future of themselves and their family by buying when others are selling and selling when others are buying. Ask yourself – what is the real estate market doing right now?

4.     Diversify. Concerned about putting all your eggs into one basket? Short sale investors have a plethora of choices including types of property (single family rentals, condos, farm, timber, natural resource rich land, apartments, commercial, retail, office, fixer-uppers,), locations, amenities (age restricted, waterfront, luxury, golf etc) plus so much more. Rather than look outside of real estate, simply seek alternative forms of investment properties.

5.     Plan for Prosperity. Even during the worst economic era there were those who managed to make fortunes by realizing the potential in every situation. Today is no exception. Rather than follow the masses worrying whether or not the government will have enough money to bail-out their company or fund their beleaguered retirement account, take your financial future into your own hands by planning for prosperity. Find out how easy it can be to automate your short sales investments and build a prosperous financial future by joining in for one of our seminars.

More on Wednesday!

See you at the top!

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

P.S.:   Investors who truly leverage the power of Internet and “Web 2.O” strategies BEFORE everyone else jumps on the bandwagon will have an opportunity to set themselves up for a lifetime.  I’m not talking about you being able to do a few more deals this year… I’m talking about a complete lifestyle change.  We promise to blow your mind!  This Wednesday at 9 PM!  Implement “Web 2.0″ strategies in a way that will have a profound impact on your business.  Just register here today:

https://www1.gotomeeting.com/register/264492432