——–

No money, no credit – but an honest desire to succeed? 

That’s all it takes to get into the lucrative business of

finding and reselling short sale properties.  We’ve had

people go from zero to six figures in less than six months! 

See if there’re any spots left for this webinar this

Tuesday at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/500640410

———

Housing messages mixed

The Obama administration keeps telling us things are looking up, but the real players in both the economy and real estate are all over the map in both results and predictions.  The National Association for Realtors has pulled together some of those confusing housing indicators from last week:

- The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, reported that home prices rose 0.7 percent from January to February 2009. 

- The February 2009 RPX Monthly Housing Market Report said home sales increased month over month in 22 of 25 key metropolitan statistical areas and 13 of these areas posted the largest gain in February 2009 since 2006.

- The National of Association of REALTORS® reported that existing home sales dropped in March 2009, and median prices fell 12 percent from a year earlier.

- First American CoreLogic announced that national housing prices declined 12.2 percent in February from a year earlier and have been in decline for 24 straight months.  It predicted that home prices would continue to decline through 2010.

Clarification or more mixed messages?

Just to keep up the confusion by trying to explain it, The National Association of Home Builders reported that production of single-family homes is unchanged, despite falling housing starts.  “Today’s numbers are right on target with NAHB’s forecast, which anticipates that housing starts will bottom out in the second quarter, after new-home sales have stabilized,” said NAHB Chief Economist David Crowe.  “Single-family starts remained virtually unchanged over the past three months, indicating that we are closing in on a bottom.  Multifamily starts – which tend to bounce around from month to month — were responsible for the decline in total starts as they readjusted following a substantial gain in February.”  But he warned, “A substantial recovery in housing of the kind that’s required to help get the national economy back on its feet will not happen until the logjam in acquisition, development and construction financing has been broken.

Swine Flu hits the market

World stocks tumbled after seven weeks of gains, and both oil and the euro fell on Monday as concerns intensified the spread of swine flu would hit the global economy.  Mexico seems to be the center of the outbreak, although cases have spread to countries around the world.  As many as 103 deaths in Mexico are thought to have been caused by swine flu, CNN reported.  In the United States, the largest number of cases has been reported in New York City.  “The swine flu seems to be one of those ‘Black Swan’ events that has caught the market by surprise.  This is a concern as to whether it might impact any potential…recovery chances,” said Martin Slaney, head of derivatives at GFT Global Markets.  The MSCI world equity index fell 0.7 percent.  The U.S. government plans to issue a travel warning later Monday urging Americans to avoid all “nonessential” trips to Mexico because of an outbreak of swine flu, a U.S. official said.

GM slashes jobs, debt, and dealerships

In its latest bid to stay out of bankruptcy, General Motors announced plans to drop Pontiac, cut 23,000 U.S. jobs by 2011, and slash 40% of its dealer network.  GM is also offering bondholders 225 shares of its stock for every $1,000 it owes the bondholders in principal.  GM’s first plan was turned down by President Obama’s auto industry task force in February, but this restructuring announcement goes much further. 

The company had announced many of the job cuts in February, but Monday’s news that GM would have about 38,000 hourly U.S. employees by 2011 represents an additional reduction of 7,000 to 8,000 jobs beyond what GM disclosed in its previous viability plan.  The Obama administration’s task force said today that the new plan “reflects the work GM has done since March 30 to chart a new path to financial viability,” but added that it “has made no final decision regarding the treatment of its current loan to GM or with respect to any future investments in the company.”  Not exactly a rousing endorsement, is it?

Wall Street Journal explodes at regulators

In perhaps its harshest language yet, the Wall Street Journal takes a crack at mismanagement by Paulson and Ben Bernanke.  Here’s how the article opens:  “The cavalier use of brute government force has become routine, but the emerging story of how Hank Paulson and Ben Bernanke forced CEO Ken Lewis to blow up Bank of America is still shocking. It’s a case study in the ways that panicky regulators have so often botched the bailout and made the financial crisis worse.  In the name of containing “systemic risk,” our regulators spread it. In order to keep Mr. Lewis quiet, they all but ordered him to deceive his own shareholders. And in the name of restoring financial confidence, they have so mistreated Bank of America that bank executives everywhere have concluded that neither Treasury nor the Federal Reserve can be trusted.”

Now on to our real estate investing education section…

Derivatives – The Next Shoe to Drop?

About the time short sale investors have started to grow weary of watching the evening news a new economic threat is beginning to rear its ugly head – derivatives. While most of the media has been content to talk about falling real estate prices (which are beginning to look good in comparison to other investment options), faltering currencies, corporate bankruptcies and bail-outs only the most fearless dare to mention what is on everyone’s mind…the dreaded derivative market.

To get a perspective on the situation consider these startling facts:

The total value of residential real estate in the United States is estimated to be roughly $10 Trillion.  

The annual GDP of the USA is roughly $15 Trillion.

The global GDP for the entire world is roughly $50 Trillion.

The total value of all real estate in the entire world is roughly $75 Trillion.

The derivative market is roughly $516 Trillion…excluding private transactions between non-reporting entities.

Obviously the problem is huge which is one reason big banks are eager to settle the real estate related problems as soon as possible in order to position themselves – with cash in hand – for the next stage of the economic playbook. By now there should be one burning question on the minds of every savvy short sale investor; “Which banks are heavily invested in derivatives?”…well, that is a good question and one in which we have an answer. In order of shock and awe are the derivative investments of some of the biggest names in the banking industry as of the end of 2008 as represented by a percentage of their risk based capital is as follows:

Wachovia: Approximately 53 percent

Bank of America: 194 percent

Citibank: 258 percent

JPMorgan Chase: 430 percent

HSBC: 595 percent

Scary isn’t it? This means that for every dollar of capital held by HSBC, they have nearly $6 of exposure to the derivative market however, all of these banks are above the suggested maximum of 25 percent exposure so at what point does it even matter? This type of scenario is what has many economic experts calling for the end of the historic strategy of buying and holding stocks, bonds and even dollar based currency for the foreseeable future as one bubble after another continues to burst.

Remember, the entire global GDP is only $50 trillion….which would not even be enough to “bail-out” Citibank alone should the derivative market collapse. Now ask yourself, where do you intend to park your hard earned money over the coming years? Stocks? Bonds? Currencies backed by governments forced to bail-out one bad investment after another?

How about putting it into the one tangible asset that provides the fundamentals required for a great return, flexible financing, long term tax breaks and a historical precedent unlike all others…real estate. The choice is yours – listen to the same media pundits that lead you down this path and believe the rhetoric about the market moving upward or cash out while you still can and invest in something safe for the long haul. Just remember, when the derivative shoe finally does drop…you heard it here first.

See you at the top!

Chris McLaughlin

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

P.S.

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

https://www2.gotomeeting.com/register/500640410

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

—

Market News & Commentary by Chris McLaughlin, January 16, 2009
http://www.shortsalesriches.com/welcome.html

——
This is your year, right??  Let’s make it happen!  Forget the headlines, 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 23 spots that we have left for our Saturday webinar at 4 PM EST and 1 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/783035902

———

Even before taking the oath of office President elect Barack Obama got what he wanted for Congress.  The US Senate voted yesterday to release the second half of the $700 billion TARP fund, and the incoming Obama group has planned to allocate between $50 and $100 billion toward foreclosure prevention.  In a positive sign for Realtors and investors looking for buyers, the new President’s team has signaled that stimulating buyer demand for homes is a priority, possibly by reducing interest rates even further is part of such a strategy.  We’ll have to wait for more information to come.

Bank of America announced its worst financial performance in 17 years today – they lost $2.39 billion.  Ouch!  The bank also announced that it would take on another $20 billion in TARP money.  Why?  Two words: Merrill Lynch.  As  Bank of America readies itself to buy the brokerage firm, the bank is discovering that the “mark to market” write downs, an accounting rule that requires Bank of America to write down assets to their existing market price, not the price that they might be worth if you took the time to sell them.  How does this accounting rule affect banks? 

Let me give you an example.  Let’s say Merrill Lynch has a billion worth of mortgage backed securities.  Let’s also say that 25% of those are now in default, but 75% of them are paying just fine and are on time.  You would think that the valuation of the securities would be $750 million or less, right?  Well, given how mad investors are with the rating agencies they just don’t want them on their balance sheets.  Period.  So what would be considered $750 million worth of good loans are now worth $100 million at today’s market value.  No one wants them: they are toxic at any price!

Now let’s assume the Merrill Lynch has to recognize these assets on their financials.  What used to be a billion is now $100 million in the current market.  So even though the securities would be worth a lot more than $100 million if they were to go through an orderly process of selling off the assets, the bank is required to report it based on what it is worth now—in an illiquid market.

Now understand that we got these new “mark to market” rules after the Enron scandal, and they do have validity, because without them banks can essentially lie about what their assets are.  But in this instance, when extraordinary circumstances have created tremendous illiquidity, many banks are frankly being forced to unfairly write down assets that will be worth much more than their current liquid valuation. 

If the new Congress wants to save some taxpayer money, they should modify the mark to market accounting rules to have an outside appraisal identify what they assets are really worth versus forcing banks to mark down assets that are viewed as toxic. 

Now on to our real estate education section…

Unemployment Claims Crashing Websites – Create Your Own “Safety Net”

As pink slips pile up, jobless claims have become so prevalent they are literally crashing websites and phone systems as workers rush to file unemployment claims. New York, Ohio and North Carolina were forced to shut systems down completely due to heavy volume; considering the average unemployment wages are less than $400 per week or roughly $1,600 per month (or less), one might wonder if there is a better way to create your own safety net.

As it turns out…there is! Short sales offer investors of any background the ability to take their financial future into their own hands rather than stand in line waiting for the government to provide minimal income replacement. It doesn’t require a lot of money, time or extensive training to create your own safety net with an income stream as high or low as desired.

In less time than you might spend on “hold” when applying for a Michigan unemployment benefits (average hold time of four hours according to some clients), you could be well on your way to submitting an offer on your first short sale transaction worth thousands – or even tens of thousands. With a straight 12 months of job losses, 2008 is shaping up to be the worst on record in over 50 years. 

Learn how to create your own safety net with these short sale related resolutions for the new year:

1.      Do it daily. Each and every day do something toward growing your short sale empire. It doesn’t need to be a lot but you should get into the mindset of profit and success.

2.      Try something new. Once you master a formula that works (like the one provided by ShortSalesRiches) then continue to refine it and add to your portfolio of tools and resources.

3.      Expand. Begin small then build a base by incorporating new areas, different types of real estate or other potentially profitable relationships.

4.      Educate. Never stop learning. Find a mentor and learn from others as you go along. Share your knowledge with others along the way.

5.      Add a subscription. Find a source of reliable, pertinent and up-to-date information like that provided by the ShortSalesRiches.com/blog to keep a pulse on the trends.

6.      Query like crazy. Set a personal “outreach goal” for the next month to revitalize and jump-start this year’s success.

7.      Embrace the Internet. Learn how to use it then stick to it. If you don’t have the time to dedicate to doing it all yourself then hire someone to help. It’s an investment in success.

8.      Don’t be fearful. During tough economic times there is a tendency for people to run for cover and settle for less – often much less – rather than bet on their own skills and tenacity.

9.      Get organized. Stop procrastinating and take the time needed to put everything in its place, set up the tools you need and start using them.

10.  Be a bit of a brag! Yes, when you have a success it is important to pat yourself on the back…just be selective. While you are making thousands or tens of thousands of dollars on short sales, don’t expect your unemployed brother in law to be thrilled for you. Instead, teach him how to join you in creating a long term safety net and life you love.

See you at the top!

Chris McLaughlin

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

P.S.: Be one of the 23 spots that we have left for our Saturday webinar at 4 PM EST and 1 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/783035902

—

——
You really can make a huge six figure income … even a 7 figure income … with no money out of your pocket in the deepest recession our country has ever faced.  How?  Just register now for our fr’ee webinar unveiling the strategies to use in this economy…all on Tuesday night at 9 PM ET: 

https://www2.gotomeeting.com/register/638209573

——

CNBC reported today that several private equity firms are circling the wagon to purchase IndyMac Bancorp, the huge bank that went belly up because of the subprime mess that is now run by the Federal Deposit Insurance Corporation (FDIC).  The prospective buyers include J.C. Flowers & Co., Dune Capital Management, and Paulson & Company.   In the small world of finance, IndyMac was founded in 1985 by Angelo Mozillo and David Loeb, who later went on to found Countrywide Financial, which is now owned by Bank of America.  Looks like the initial management team setup both companies for failure, huh?

And if you thought the housing mess was limited to just the United States, think again.  Reuters reported today that prices dropped 8.7% in England and Wales for 2008 and are expected to fall further. 

Now on to our real estate investing education section…

As 2008 draws to a close and short sale investors look to 2009 the question on everyone’s mind is whether or not the economy will continue its downward spiral or experience a recovery. Despite the considerable abundance of doom and gloom reporting in the media, there are a few bright spots that aren’t receiving the full attention deserved. Short sale investors searching for a silver lining in an otherwise cloudy economic environment would do well to focus on these current trends:

1. $40 per gallon oil and $1.65 per average gasoline. How low will it go and how long it will last is subject to debate but one thing is certain; those who rely upon gasoline and oil are experiencing a bit of much needed relief in the form of lower prices.

2. Low Mortgage Rates & Dropping LIBOR Rates. The cost of money is cheap – not just inexpensive but downright cheap. Make no mistake about it, real interest rates are the lowest in decades and make it less expensive than ever to borrow money to build a short sale empire. It is possible to buy more house for less money while simultaneously spending less on taxes and insurance. It’s a win-win-win situation for those with the courage to buy when others are selling.

3. Huge Fiscal Stimulus. Coming soon to a federal budget near you is a huge fiscal stimulus package destined to become one of the largest in history. Bridges, roads, hospitals, schools, utilities and other mega-projects are slated to spur the economic growth needed to jump-start the economy. Whether you believe the stimulus package will work or worsen the long term economy, one thing is certain; those workers will need affordable and convenient housing for long term projects. Short sale investors would do well to make a mental note of future road plans, schools and other large building projects in the target areas of interest. Whether you buy low and sell high or wait for the path of progress to reach you, it is a position of strength rather than weakness.

4. Long Term Lag-Times. The global decline in commodities and other tangible assets will eventually lead to long term shortages with tremendous upside profit potential for short sale investors. Remember, there is a lag time between the supply and demand which will result in high demand and low supply once the economy stabilizes. Everything from basic building materials to mineral rights, timber and even natural gas holdings will be impacted. Savvy short sale buyers would do well to realize the long term potential inherent in their holdings.

5. More Renters. Foreclosures aren’t over…in fact, due to legislative restrictions on the number of “bad loans” and tangible assets a bank may have on the books at any given point in time, the current bail-out simply provided the liquidity required for banks to prepare for the 2^nd stage of the growing mortgage meltdown. Most experts agree that what began as a sub-prime mess is expanding into ARM’s, low/no Doc loans and even prime mortgages in response to rising unemployment, falling stocks and bonds plus a plethora of other economic problems hit the average homeowner.

——–

See you at the top!

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

P.S.:

Are you ready to get 2009 rolling?  Then it is time to come to our LIVE “Recession Proof Real Estate Investing” webinar tomorrow night – Tuesday – at 9 PM ET:

https://www2.gotomeeting.com/register/638209573

P.S.S.:

Have you seen the hilarious “Short Sale Kid Gets a Holiday Haircut.”  Don’t miss this challenge issued by Nathan Jurewicz:
http://www.youtube.com/shortsalesriches

Mid-Day Market News & Commentary by Chris McLaughlin, October 20, 2008
http://www.shortsalesriches.com/welcome.html

The BEST fr’ee webinar that you’ll ever attend on real estate short sales & wealth building in this market:

Join us Tuesday, October 21^th (Tuesday) at 9 PM EST, 6 PM PST:

https://www2.gotomeeting.com/register/196317932

RSVP early as spaces are limited!

—-

You asked.  We delivered.

A comprehensive guide to short sale coaching that is incredibly affordable.  Choose between three short sales coaching plans that begin at less than $7 a day!  Visit us right now at http://www.shortsalescoach.com to jump start your bank account!

—–

The US financial markets were in positive territory around noon today.  The Dow Jones Industrial Average was up 136.44 to 8988.66 and the Nasdaq was up 11.22 to 1,722.51.   The S&P 500 was up 16.80 to 957.35.

Federal Reserve Chairman Ben Bernanke was grilled by members of Congress this morning before the House Budget Committee and signaled that more stimulus might be needed to keep the recession less severe.  “With the economy likely to be weak for several quarters, and with some risk of a protracted slowdown, consideration of a fiscal package by the Congress at this juncture seems appropriate,” Bernanke said.  The Fed Chairman said that consumers needed access to credit: “If the Congress proceeds with a fiscal package, it should consider including measures to help improve access to credit by consumers, home buyers, businesses and other borrowers.”

US Treasury Secretary Henry Paulson said that the equity stakes the US government has taken in banks “won’t cost taxpayers anything” and might also give taxpayers a nice return over time.  The former CEO of Goldman Sachs noted that the government will be receiving a reasonable return on its money and that the banks have a vested interest in paying the government back since the preferred dividend to the government increases over time. 

The CEO of Merrill Lynch, John Thain, indicated that the banking industry still has a rough road ahead.  “It is likely to take multiple years to repair the damage that has been done… This is not going to get better in three to six months,” he said.  Thain said the merger with Bank of America was still on track to close by the end of 2008.

Now on to our real estate investing educational section…

Why the Melt-Down isn’t Done and How Short Sales Might Save your Assets

Common investment wisdom goes something like this…buy a diversified basket of stocks, store a little away in savings and bonds then sit tight for 20, 30 or even 40 years and let the market work its magic. If the past several weeks haven’t demonstrated the folly of this strategy then perhaps it is time to take off the rose colored glasses and face the cold hard facts.

1.     For every winner in the market there must be a loser. Plain and simple – the money must come from somewhere. A lot of people “won” big money for many years and now the price must be paid. Beginning with the sub-prime mortgage crisis the Wall Street pundits proclaimed the worst was over only to meet the current liquidity and credit crisis head-on. Unfortunately, the biggest problem of all is still looming in the not so distant future. At 50x’s the size of the subprime mortgage mess, the credit derivative crisis is likely to dwarf everything else to date.

2.     Inflation isn’t just predictable – it is inevitable. The Fed has been printing money out of thin air for weeks; money that isn’t based upon production or the exchange of goods or services. Money that didn’t exist just weeks before. Money that will be difficult to repay with a rising rate of unemployment. Money that represents more debt.

3.     Risk has reared its ugly head. Although the market supposedly prices risk into the equation on a regular basis, the past few weeks have demonstrated how false that supposition really is; now that real risk has reared its ugly head banks don’t want to loan money and people are afraid to invest. Of course, the longer you hold a stock, bond or even insurance policy the greater the risk. Banks are going bankrupt. Insurance companies are getting bailed-out and trying to time the market only adds risk. On the other hand, buying real estate through short sales utilizes leverage while minimizing risk. You can sell right away, hold and rent, improve then resell or any combination in between.

4.     Boomers Want to Cash-Out. Think the stock market is due to a correction then things will get back to “normal”? The Baby Boomers want to cash-out their stocks and bonds in order to begin enjoying the good life and avoid unpleasant surprises like the stock market losing 20 percent in the first few weeks of October. The great sucking sound you hear is the sound of money leaving long term investments and being put into retirement and vacation homes, visits to the grandchildren and a lifestyle they love.

5.     Going Global. Capitalism has spread but foreigners are no longer as willing to support our standard of living here in the states at the risk of their own. In fact, they are becoming increasingly non-tolerant of bad debt, a falling dollar and low interest rates on the money they have been loaning us as a nation. Rising interest rates will only make our domestic problems more painful but we don’t dare play too hard or they may just cut our supply line entirely. Either way – the day has come where we must learn to share the wealth…even if it denominated in declining dollars. Get into hard assets while the getting is good. Chances are you will be glad you did for many years to come.

More on Tuesday…

See you at the top!

Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com

Phone: (800) 452-7627

P.S.: 

Interested in learning how to make over six digits a month flipping real estate short sales on autopilot? 

Join us Tuesday, October 21^th (Tuesday) at 9 PM EST, 6 PM PST:

https://www2.gotomeeting.com/register/196317932

RSVP early as spaces are limited!

P.P.S.: If you really want to get started building your wealth, then take action today! A journey of a thousand miles begins with a single step. Take that step right now by clicking here:

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

and clicking here:

http://www.shortsalescoach.com

Join us TONIGHT (Thursday) at 9 PM EST, 6 PM PST:

 https://www2.gotomeeting.com/register/945219328

RSVP early as spaces are limited!

—-

The Dow Jones Industrial Average made some positive movement forward today after new claims for jobless benefits came in lower than anticipated.  The U.S. Department of Labor said that unemployment insurance claims fell 16,000 to 461,000, which was below the general consensus of 475,000. 

U.S. Treasury Secretary Henry Paulson acknowledged missteps today in an interview with Fox news.  “We’re not proud of all the mistakes that were made by many different people, different parties, failures of our regulatory system, failures of market discipline that got us here,” Paulson said.  But the embattled former Goldman Sachs CEO sounded more confident about the future: “We will mitigate the impact on the real economy and we’ll get this financial system working again.”

The National Association of Homebuilders/Wells Fargo housing market index dropped 3 points to 14 in October, which was an all time low.  Last month the index was at 17, which was up from 16 in August.  Typically a rating of 50 or more indicates a positive environment; the index has been below 50 since May 2006.

Now on to our real estate investing system…

How to Find FDIC Real Estate for Sale

While many short sale investors tend to focus on local bank owned properties, don’t neglect FDIC asset auctions. Since fewer people are familiar with finding and buying FDIC owned assets, there tends to be less competition and thereby, lower prices. FDIC is often forced to assume the assets of individually failed banks; especially smaller entities which may not have been purchased or assumed by larger banking institutions.

Learn More

To find out about FDIC owned properties call 888.372.FDIC (3342), (800) 568-9161 or visit http://www2.fdic.gov/drrore/index.asp to perform a property search. FDIC properties are sold “as-is” by sealed bid. It is necessary to complete a “Purchaser Eligibility Certification” prior to submitting bids on certain properties- especially commercial or affordable housing units.  The FDIC updates the list of available properties on Monday so make a point of visiting weekly.

Big Bonus

One of the biggest “boons” to potential investors is the ability to obtain seller financing for the following types of properties:

·        Those selling for $500,000 or more.

·        Properties qualified as “affordable housing units”

·        Commercial and land properties of any price.

Rates are competitive and further reduce the need for bank financing – an especially attractive alternative for small investors trying to “move up” during a period of tightening lending standards.

To Participate

Each property will have a specific contact number to the broker or auction house required to find out more information. Remember, all FDIC properties are sold as-is so it is important to understand what repairs, back taxes or other costs may be involved. When submitting a bid package, it is possible to place a “low ball” offer for a property but keep in mind that the highest net bid typically is awarded the property. It is often a good idea to review prior property sales to get a basic idea of realistic prices as well as competition. If you have reason to suspect you may be the only bid, an aggressively low offer may become the basis for immediate equity.

More on Friday…

See you at the top!

Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com

Phone: (800) 452-7627

P.S.: 

Join us for our fr’ee Webinar this TONIGHT at 9 PM EST/ 6 PM PST that will reveal the Top 12 Strategies on Getting Rich with Short Sales:

https://www2.gotomeeting.com/register/945219328

P.P.S.: If you really want to get started building your wealth, then take action today! A journey of a thousand miles begins with a single step. Take that step right now by clicking here:

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

http://www.shortsalesriches.com/welcome.html
—–
The BEST fr’ee webinar that you’ll ever attend on short sales & wealth building in this market:
Join us this Thursday, October 16th, at 9 PM EST, 6 PM PST:
 https://www2.gotomeeting.com/register/945219328

RSVP early as spaces are limited!
—-

The banking industry as many realtors and real estate investors know it is gone.  It was replaced by Uncle Sam.  The U.S. government announced today that it would allocate $250 billion to purchase preferred stock in banks—and nine of the largest banks in the U.S. have agreed to such an equity sale.  The deal also came with strings attached to help calm the outrage over excess (perhaps the party at the St. Regis by AIG executives, to the tune of $400k, was a bit much??) on Wall Street: executive compensation and golden parachutes will be limited. 

The Wall Street Journal reported this morning that the following banks were a part of the plan:  Goldman Sachs, Morgan Stanley, J.P. Morgan Chase & Co., Bank of America, Citigroup, Wells Fargo, Bank of New York Mellon, and State Street Corp.   The Journal noted that the deal comes with a 5% dividend to the government that will increase to 9% after several years.  Fact check: a few weeks ago I would have received e-mails correcting me for calling Goldman Sachs and Morgan Stanley banks instead of investment banks…but they are banks now.

So what did King Henry say?

“Government owning a stake in any private U.S. company is objectionable to most Americans – me included,” U.S. Treasury Secretary Henry Paulson said. “Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable.”

Other pundits of the business world also weighed in on the latest government action.  Donald Trump, speaking to CNBC’s Squawk Box, said that but for the government intervention “We were headed for Great Depression No. 2.”  Trump liked the plan to inject capital into the banks as opposed to buying up all of the troubled assets: “It’s almost socialistic, but I like it, really like it,” he noted.

Now onto our real estate investing and education section…

Recession Proof Your Income with Short Sales

It’s official. The IMF (International Monetary Fund) has openly predicted a major global recession as being “highly likely.” If the idea of rising prices coupled with a falling dollar, economic uncertainty and a pink slip coming soon to cities near you doesn’t sound attractive then chances are you have already started your search for safety. Unlike millions of other Americans frantically looking for returns in all the wrong places, some savvy investors are learning how to use short sales to recession proof their income. 

Short Sales provide an alternative source of income. Although unemployment rates are rising, to quote a common cliché’ “You aint seen nothing yet.” The big bail-out and dramatically reduced lending standards between banks and major corporations has not trickled down to Main Street – yet.  Even companies with healthy balance sheets are likely o be negatively impacted by their trading partners or suppliers with less than stellar credit lines or other interruptions. Reduced demand and slumping sales are creating additional pressure likely to result in further cut-backs in coming months. The resulting picture is clear – pink slips, pay-cuts and frozen wages are expected while inflation continues to take a toll on individual budgets. Supplement your income and investments with short sales.

Individual Diversification. Short sales have the unique ability to act somewhat like a hybrid investment/business model. The use of leverage to build impressive equity positions coupled with great tax advantages mimics many of the advantages experienced by small business owners sans the need for inventory, labor and long term commitment to workers compensation etc… while the instant equity, appreciation and ability to maximize returns mimics the best of the investment world.  Additional advantages inherent in the holding of tangible assets further increase the individual level of diversification in a paper denominated world.

Flexibility. Perhaps the largest single benefit to be derived from short sales is the flexibility afforded through the purchase of various types of properties. Although most short sales center on single family residential properties, it is possible to purchase a wide variety of commercial, agricultural, retail, commercial or other types of land in addition to deriving benefit via a wide range of other activities including:

• Factoring

• Owner Financed Sales – all or partial.

• Rentals or Leasing – short or long term including
vacation, land lease, traditional rentals, etc..

• Farming, Agricultural, Timber, Mineral, Water or Other
natural resources.

• Business use or improvement then sale of business including property or just business while leasing back land/housing.
More on Wednesday…

See you at the top!
Chris McLaughlin, J.D., M.B.A.
web: http://www.shortsalesriches.com/welcome.html
e-mail: info@shortsalesriches.com
Phone: (800) 452-7627

P.S.: 
Join us for our fr’ee Webinar this coming Thursday at 9 PM EST/ 6 PM PST that will reveal the Top 12 Strategies on Getting Rich with Short Sales:
https://www2.gotomeeting.com/register/945219328
 
P.P.S.: If you really want to get started building your wealth, now that recognize that your 401(k) isn’t going to do it, what are you waiting for?  Take action today! A journey of a thousand miles begins with a single step. Take that step right now by clicking here:

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

 
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News & Commentary by Chris McLaughlin

http://www.shortsalesriches.com

What a week!  Aren’t we glad it is Friday?  If you thought as a Realtor or real estate investor you had a tough week, imagine if you worked at Lehman Brothers, AIG, or any number of major financial institutions.  It was truly a historic week.  And many are glad it is over.

But today was a better day than most this week.  Wall Street investors applauded US Treasury Secretary Henry “Bail ‘Em Out” Paulson after he announced yet another massive bail out initiative.  He’s bailed out Bear Stearns, Fannie Mae, Freddie Mac, and AIG.  And today Paulson announced that he would form a new entity similar to the Resolution Trust Corporation (during the S&L crisis in the late 80s) that would oversee the orderly liquidation of bad mortgage related debts.   This was by far the biggest move to date, as Paulson suggested that it would be “hundreds of billions of dollars.”  But specifics weren’t available, and Paulson plans to meet with members of Congress over the weekend to start shaping the plan.

What else happened?  Well, it looks like Securities & Exchange Commissioner Christopher Cox didn’t like hearing chuckles from all his friends that Presidential Candidate John McCain would fire him if elected President (I guess we know who Cox will vote for in November, huh?).  So Cox made a dramatic move today to show that the SEC is doing something: banning short sales of 799 financial stock.

“This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the Federal Reserve, the Treasury, and the Congress,” Cox said.  The ban went into effect immediately and expires at midnight on October 2, 2008.

NOTE: THIS HAS NOTHING TO DO WITH REALTOR AND INVESTORS NEGOTIATING A SHORT SALE, OR REDUCTION IN PRINCIPAL AMOUNT OWED ON A LOAN.

Let me make this very clear: this ban on short sales has nothing to do with real estate short sales that we’re primarily focused on.  PLEASE FORWARD THIS E-MAIL TO REALTORS AND INVESTORS YOU KNOW, AS THERE IS MASSIVE CONFUSION RIGHT NOW.  A short sale when it comes to the stock market is generally considered this: short sellers borrow stock in a company that they don’t actually own and then sell it, hoping that they can buy the stock back at a lower price and make a spread on the difference.  This leads to wild swings in a stock price, and perhaps an exaggerated movement—and such was the case this week when financial stocks plunged.

And a final note… As I was walking down the hallway, one of our realtors here, Alison Terry, grabbed me and said: “Hey Chris, doesn’t this meltdown on Wall Street mean that more people are going to be interested in real estate again?”  To which I responded that she needed to go to my blog, since I mentioned that earlier in the week.  Folks there is only so much gold someone can buy.  Americans aren’t stupid, they are incredibly smart.  They will begin moving more and more assets over to things they can touch and feel.  They can’t touch and feel stock in Morgan Stanley, but they can touch a foreclosure they bought on Morgan Street and Stanley Drive, right?

So, stay tune in for more commentary and announcements next week.  It has been a truly exciting and memorable week.  And real estate will be a huge beneficiary of all the events of late.

Chris McLaughlin

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

e-mail: info@shortsalesriches.com

phone: (800) 457-7627

P.S.: I’ve had some rave reviews about these e-mail updates I’ve decided to send out.  I hope you like them.  My mission?  To raise the level of financial awareness of Realtors and real estate investors.  Why?  If we really knew what was going on in this market, we all would be embracing short sales (real estate short sales) and gobbling up foreclosures.

P.P.S.: So you are welcome to post this content on your blog, as long as you provide attribution to www.shortsalesriches.com/blog as well.  And you are encouraged to forward this on to clients and friends who are interested in how the financial markets affect real estate.  They can get the 5 Traps to Short Sale as well as sign up for this e-mail blast by going to www.shortsalesriches.com

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Well you don’t have to worry about AIG bringing down the Dow Jones Industrial Average anymore…the Ritz cracker just ate AIG.  Yep, Kraft Foods will replace AIG in the Dow Jones next week.  We’ve gone from insurance to mac and cheese.  At least my 3 kids, all under the age of 4, will be happy.

And President Bush attempted to calm markets as well and indicated that the government bailouts of Fannie Mae, Freddie Mac, and AIG were essential to keep the economy sound. “These actions are necessary and important, and the markets are adjusting to them,” the President noted.

Adjusting? Panicking seems more like it, huh?

Washington Mutual continued to find itself a suitor today, but The Wall Street Journal reported that Citigroup didn’t want to get engaged just yet.  Morgan Stanley is rumored to have been thinking about dating and possibly proposing to Wachovia Bank, but a few Asian banks—and perhaps that Chinese government itself, might come to the rescue of the firm.

Politics took center stage today as well.  Republican Presidential candidate John McCain, seeking to put some distance between him and President Bush, said he would fire Securities and Exchange Commissioner Christopher Cox.  The chairman of the SEC serves at the appointment of the president and in my view has betrayed the public’s trust,” McCain stated. “If I were President today, I would fire him.”

How does this affect Main Street?  Well money markets are getting a little jittery these days.  These funds invest in short-term corporate and government bonds, but they have taken a hit as of late due to significant redemptions.  The Primary Fund RFIXX went below a benchmark of $1, which meant that if someone held money in these funds they would actually lost money, not make money.  The Primary Fund had around $40 billion in withdrawals since last Friday.  And Putnam Investments said it was now closing its $15 billion Prime  

What good news was out there?  In a move reminiscent of the Resolution Trust Corporation (remember the good ole’ days of the S&L Crisis), US Treasury Secretary Henry Paulson is developing up a plan to take the bad debts from banks and investment houses and package them up for an orderly sale.  That sent stocks higher today, with the Dow Jones finishing the day up over 400 points. 

So let’s get this straight.  Mom and Pop don’t have much money anymore, but what little money they do have is now losing money in what some folks thought was risk free, a money market fund, for the first time ever.  Major financial institutions like Morgan Stanley and AIG are teetering.  Credit has tightened beyond all recognition and the thought of getting a loan that isn’t government backed is laughable.

But I still here from some Realtors that foreclosures are just gonna be here for just another year.  Well, if you think they aren’t here for the next 3 years, in this economy with this type of financial turmoil, you might as well grab some of those Ritz crackers and have a pity party now, because it isn’t going to happen.

But it is the single biggest gift many of us will ever be given in our lifetime.  Wherever the public runs one way, I say run the other.  And I have made a lot of money because of it.  When a sink hole drained a local lake in my hometown, where all the fancy houses were located, I made a low ball offer on a house a few days later when everyone was freaking out thinking the lake would be a swamp.  As I type this, I’m staring over a beautiful lake with a magnificent view of the water.   The story is true, by the way… just Google the words “sinkhole McLaughlin buy dry sell high” for a funny story on it.

So remember … in this market, you can now buy low, and not sell high, but sell fast.  And that means less risk, less holding costs, and money in the bank.  But you have to do more than read this and agree … you need to take action, too.

I’m loving this market more and more each day.  The real estate market, that is.

Chris McLaughlin

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

e-mail: info@shortsalesriches.com

Phone: (800) 452-7627

P.S.: P.P.S.: Nathan just told me he will be closing 20 homes within the next 30 days.  Not bad for a kid that was home schooled with no formal education, huh?  All the guys with the fancy education work(ed) at Lehman, Bear Stearns, AIG, Fannie, Freddie, and other banks .. hmm… kinda ironic ain’t it?  Check his secrets out at: http://www.shortsalesriches.com/welcome

P.P.S.: Want to comment on this article?  Go to the blog!  It is located at http://www.shortsalesriches.com/blog.