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“How to Exploit a Little Known Flaw in the Bailout
Package for a Six-Figure Payday!”  (But it’s only
good for the next 14 months…)

I don’t know why people haven’t caught on to this yet.
Because with this, you can forget fearing this recession,
and use it to your advantage instead! 

I’ll show you how, and it’ won’t cost you a cent. 

But there IS a catch – we fill up early, and there’s no
wait list.  And at last count, we only had 6 spots left for
tonight’s webinar that begins at 8:30 PM ET, 5:30 PST.
Go and grab one of these last openings NOW, or miss out.

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

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

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

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

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

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

Now, on to our real estate investing section…

What’s Better – Short Sales or Gold?

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

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

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

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

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

See you at the top!

Chris McLaughlin

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

P.S.

This week’s webinar replay is right here…for the next 8 hours:

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

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalescoach.com
http://www.shortsalesriches.com/welcome.html
http://www.youtube.com/shortsalesriches
*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…

http://www.shortsalesriches.com/blog
*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month

   * Long-time authority on real estate investing
      and rapid flipping of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties

    * Owner and Supervising Broker of one of Florida’s
     largest Real Estate firms, running 4 different
     offices, supporting nearly 450 agents, uniquely
     positioning him to help thousands of investors
     make money in the biggest market opportunity ever!

     * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building

 —

——
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.   Come to the amazing webinar on “Recession Proof Real Estate Investing” and learn the proven strategies to making wealth in 2009.  It all begins TONIGHT at 9 PM ET, 6 PM PST:

There are only 14 spots available, so jump on this now:

https://www2.gotomeeting.com/register/505377393

——

The news was a little grim today about the jobs market, as continuing jobless claims rose more than expected.  The Department of Labor reported that those who are continuing to claim unemployment rose by 101,000 to 4.61 million, which was well above most analysts’ expectation of 4.5 million.  It also marks the highest level of jobless claims since November 1982.

And President elect Barack Obama warned today that a “bad situation could become dramatically worse” if Congress does not approve his upcoming stimulus package.  But Obama did have some positive comments: “The very fact that this crisis is largely of our own making means that it is not beyond our ability to solve,” he stated.

Now on to our real estate educational section…

News You Need to Know for 2009 – FHA Short Sales Easier than Ever!

As if increased minimum wage laws and ultra-low interest rates weren’t good enough, short sale investors will be downright delirious to learn about changes to FHA laws set to begin in 2009. On December 24^th, 2008 the Department of Housing and Urban Development (HUD) released “Mortgage Letter 2008-43”….despite the inconspicuous title, this is a powerful boon to every short sale investor in the nation.

For those of you who somehow managed not to be engrossed by this less than climatic title, here are the major changes coming soon to a FHA/HUD foreclosure near you!

1. Elimination of the clause calling for 63 percent or greater property appraisal versus debt. Now properties can appraise at any value and still be eligible for the program.
2. Increased Net. Instead of the former 82 percent net based upon appraisal value the new limits will be 88 percent if sold with 30 days, 86 percent if sold within 60 days and 84 percent thereafter.
3. Increased Closing Costs on Short Sales. Although not a lot – FHA will now allow up to 1 percent of closing costs rather than the former zero.
4. Increased Seller Incentives. Again, although not a lot this will at least allow sellers a reasonable down payment toward a rental home by putting up to $1,000 in their pocket at closing.
5. Increased Lien Allocations. Junior liens up to $2,500 are now allowed – just one more tool that helps sweeten the pot for short sale investors interested in pursuing FHA/HUD homes.
6. Removal of Repair Limitations. This is one change that could potentially add up to thousands depending upon the required maintenance on the home. This opens the doors to many homes that would otherwise be ignored due to excessive damage.
7. Exceptions to Non-Owner Occupant Requirements. This is on a case by case basis but opens to the door to rental properties formerly excluded from the program.

To learn more or read the release for yourself visit: http://www.brokencredit.com/wp-content/uploads/2008/12/fha-pre-foreclosure-short-sale-guidelines.pdf

New Year’s Resolutions for the Short Sales Investor

Admit it. Your New Year’s resolutions look a lot like last year’s list don’t they? If you are like most people then near the top of your list is “get in shape” followed by some type of ambiguous financial goals. The trouble with most New Year’s resolutions is they fail to energize, motivate – or even make sense. When was the last time you REALLY got excited about cutting back or doing without? Rather than emphasize the negative, it’s time to create a realistic list of positive goals designed to make a lasting difference in your life. Here are some more tips designed to transform wishful thinking into reality for the coming year.

1. Write it Down. Researchers have discovered the mere action of taking the time to write it down increases the odds of actually putting the plan to work.
2. Tell it to Others. Commit to the plan of action by making it known to others; whether in person, via telephone or simply as part of an online discussion. Let others know of your goals.
3. Be Specific. Get into the nitty-gritty details; duration, specific amounts, locations or other pertinent information should be spelled out in as much detail as possible.
4. Measure Continuously. Set a schedule to measure progress on a continuous – and frequent basis.
5. Work toward it Daily. Make it a regular part of your routine to do at least one item toward your goal on a daily basis throughout 2009.
6. Dare to Dream. Don’t discount your own dreams or ability to profit…it is what excites and motivates people to take action. While the rest of America is sitting on the side-lines while the greatest buying opportunity of a generation sits in front of them, those who dare to dream of a better life are capitalizing upon it.
7. Get a Mentor. It is important to banish negativity from your vocabulary and personal goal’s; while a healthy dose of constructive criticism is always warranted – that is quite different from negativity. Constructive criticism is born of information and experience while negativity stems from fear. Surround yourself with knowledgeable professionals who are successful in the short sales field rather than those to fearful to take action.
8. Educate Yourself. Information and education are key to growing in any field. In fact, common wisdom holds it takes a minimum of 1,000 hours to become fully informed about any given topic. To put this into perspective, 1,000 hours is the equivalent of 25 weeks of full-time work. Fortunately, you don’t need to start from scratch. Benefit from the wisdom of others that have gone before you and customize it to your own situation.
9. Invest in Success. Perhaps one of the biggest mistakes most real estate investors make is failure to invest in success. Whether it is your time, money or simply opportunity cost required to put short sales real estate to work – the fact is you must make up your mind to invest in your own success before anyone else will follow.  Go here right NOW to register for our webinar TONIGHT  (Thursday) at 9 PM ET, 6 PM PST on Recession Proof Real Estate Investing:

https://www2.gotomeeting.com/register/505377393

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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 at 9 PM EST, 6 PM PST:

Only 14 spots left:

https://www2.gotomeeting.com/register/505377393

P.P.S.:

My good friend Mike Collins is dead serious about
this “Get the People Educated” mission he’s on.

He promised you hard-core real estate investment videos
to jump start your 2009.

Well, here’s the first installment – No cost and No catch. 
Just go and watch it.

https://rehablist.infusionsoft.com/go/smash/NJur1

P.P.P.S.: Did you see what happened to the Seven Figure REO product?  If you still MUST have this sold out and sought after product, there were 50 reserved to help make up for the webinar meltdown that occurred.  Go here now to learn how to get your hands on the Holy Grail of REO:

http://www.sevenfigurereo.com