28 June 2009

Down on the Short Perhaps?

Stocks are down from the week of the 12th, are we witnessing a softening and return to short weeks ahead? The NASDAQ shows the best recovery overall.

3 months of strong buying in that fast money market has created some quantifiable results with the real estate market showing a pulse at the top of the 2nd Quarter.

Yet, sad to see mortgage rates bounce almost one percent recently, stinkin' banksters.

One real estate agent was telling me single family homes are down 50% directly from banks with almost easy qualifying, yet the bank is selling them in bulk of 25 and more at around $40k each, and that is in the Southern California area. Lots of inventory on hand, but no loans made on these, the bank wants to see cash / a balance somewhere. They will do no loans no matter what your leverage ( supposedly ).


Each of those could garner $1500-$2500 a month depending on the specific area, but either way, the ROI is attractive. Do the math if you know how... if not, here is your chance to contact me and ask that simple question.

If you want to cash flow long term, lease them in 1-5 year intervals. You'll have your cash back in about 2.5 years, and then on its quite the monthly flow, huh!? $37500 if you rent out 25 at $1500 ( low end estimation ), and that's not including down payments / collateral / other security.

If short term, you can lease for 1-2 years, then market to sell ( depending on market at that time ), or rent-to-own and qualify the renter to cash out, or mortgage a note to the new buyer ( no qualifying for them / you already qualified them ) and you cash out.

But for property acquired so cheaply, why would anyone sell a cash cow with that kind of ROI? Only so I'd say to acquire something with a better ROI and well leverage if necessary.

If kept long term from this point on, it can be leveraged sparingly to acquire other performing assets, but I advise to do so ever so lightly and with a short term out.

03 June 2009

Market Bottom is Realized, I Think


by author of SmartPeopleSmartMoney.com

Today's capitalism still has opportunity at all sides.

Today's capitalism you cannot see coming, but once you hear the news of its arrival, what will determine your success will be your ability to recognize the opportunity; your financial education.

You can "capitalize" on said opportunity only if preparedness ( yours ) is ready to act on the new information.

Real world example:

Yesterday I'm on a quasi date with a lovely younger woman, and I stop by the real estate kiosk at the mall ( she isn't that young, we were getting her eye glasses repaired ).

I'm perusing home prices in certain areas and sure enough, they have plummeted over 50% considering the median, and come to find out, a bulk purchase from the bank would constitute quite a discount: up to 85%!

This is unbelievable.

As for capitalism, it works with the above scenario.

There is a method allowed to buying at these low prices: in bulk. The catch is: you need to bring cash. No bank financing. But, if you want to buy a single house, your discount or "market" value will be a 20-40% discount from top of recent market, and this will be financed by the bank at today's interest rate, which has jumped almost one percent recently from 4.6 to 5.3 or something like that. The bank will be happy to lend on a singe home, no down, just sign and promise to pay in 30 days ( on excellent credit of course ).

So there you have it folks, capitalism for the consumer and investor.

This type of capitalism which pays you is not for the slow to act on new information, it is for the prepared and fearless investor.

This type of capitalism which lends to you ( if you have a job or other money making routine you need to be present to perform ) looks like economic slavery and the method or vehicle upon which the machine works ( debt service its properly called ).

So you see here the market being set by the balancing act of the FED and their interest rate financial weapon, the banks and their money lending programs targeted to certain market players and consumers, and the price, which has been deflated to get more borrowers into the web of debt or money machine... your new working class: recent immigrant / non educated folks just dropped out of high school, or folks who are not on a career or business path or other path.

Have cash will have more, and in debt will continue further in debt.

Any thoughts?

Your Financial Education Awaits You!