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Thursday, August 13, 2009

At a closing Yesterday I was asked what difference a few years will make? From a real estate professional !!! I laughed myself out of the chair....

What Difference Does a Few Years Really Make?

For those that are young enough not to clearly remember the early 70's (I wasn't born untill 1974) a quick trip down memory lane can serve an important demonstrates what a difference a few years can make and why it is important to find passive sources of income early in life.

Bill Downey, an expert in commodities, recently published a quick spotlight that focused on prices as of August 15, 1971...just a few days short of 29 years from today.

Average cost of a new house was $25,250 versus $190,000 today (from a high of over $260,000 just two years ago). If you had purchased ten average priced BRAND NEW homes (with a mortgage payment of less than $275 each!), rented them out and allowed the mortgage to cover the expenses, today you would hold nearly $2 million dollars of real estate free and clear...and still be able to collect rents for as long as desired!

Average annual income was $10,600 versus $38,000 today. Notice, earning power has not kept pace with inflation. In fact, experts agree the average worker has lost purchasing power each and every year for nearly 30 years.

Average monthly rent $150 versus $820 today. Of course, rents for brand new homes would have been higher but imagine, even with a "high" mortgage of $275 for each house, you would still generate more monthly income from ten houses than the average employee working full-time...before paying off the mortgages!

Those of you who are older, take just a few minutes to imagine how different your life would be today if you had purchased a few average little homes 29 years ago. If you don't have at least 2 million dollars sitting safely in a retirement account while continuing to generate a monthly income, ask yourself why? On the other hand, those of you who are young should consider this...the United States entered a period of high inflation and rapidly escalating prices in the late 70's and early 80's yet it dwarfs the amount of spending taking place in the past six months of the current economic decline.

Money creation expands the supply of money and eventually leads to inflationary pressures - to date, that has been adjusted and dealt with but experts agree, the amount of new money creation currently in existence is unlike any in the history of the United States. If you make one investment in life then simply allow it to pay for itself, it could easily create a retirement income or source of revenue for you and your children well into the future....even as unemployment and actual wages shrink.

Anyone that had the foresight to invest in real estate during the early 70's would enjoy an additional $5,000 to $6,000 per month while having access to nearly $2 million dollars in their real estate portfolio. Instead, most Americans trusted their hard earned dollars to 401k accounts, savings bonds and other "trusted" sources that have left them high and dry when they needed it most. Here is a simple recipe for now, allow it to pay for itself and forget you even own it then reap the rewards in your old age. It's a time tested method that has led millions of average Americans just like you down the road to wealth. Consider this...the federal deficit is an estimated 2 Trillion for this year alone...with trillion dollar deficits projected for the next decade!

See you at the top!

Wednesday, August 5, 2009

The real deal on Bank owned Homes, REAL NUMBERS FOR REAL THOUGHTS!! Can anyone say SHADOW Inventory?

I had an interesting conversation today with my realtor in regards to homes marked TNAS (temporarily not available for show) and the real number of foreclosures really out there.

I see things for what they are and if someone asks me why I will explain to them WHY! There are tremendous amounts of bank owned homes saturating the market in eveyones neighborhood, I do not care what state you are in.

It is simple economics and psychology, if the general public really knew the numbers and the media told the truth, people would panic.

So instead of my own thoughts I have compiled a few brief statements from chief economist at Wells Fargo Securities, Zillow and Deutch Bank. Please read below

Housing inventory drops in July from a month earlier! Wow the market is recovering (Ha hahahahahah)

According to data compiled by ZipRealty, inventory of homes -- single-family homes, condominiums and town houses listed on local multiple-listing services -- in 28 major metropolitan areas dropped 2.5% in July from a month earlier. The inventory in July dropped 27% year-over-year.

The figures compiled by ZipRealty may not present the exact level of supply since half of foreclosed homes are not included on multiple-listing services at any given time on account of such homes awaiting repairs or being subject to litigation. Analysts say that the housing market is showing signs of stabilization, but a large supply of unsold homes could hit market recovery.

"The number of homes listed officially on the market, while still at historically high levels, might be only the tip of the iceberg," said Stan Humphries, chief economist at

Adam York, economist at Wells Fargo Securities, says that the number of homes that have not been listed for sale could be around 5 million. "That is still an extremely high number," said York. "Supply is and will continue to be one of the main obstacles to a housing market recovery in the year ahead."

Torsten Slok, senior economist at Deutsche Bank, says that foreclosures are creating a "shadow" inventory and "had it not been for foreclosures then the housing market would probably have recovered."