Banks Closing every week, Social Security is Underwater. The sky is falling what are we to do?

I will go over the News “Bad” as reporters always put it. But I will make humble “but sensible” suggestions for your review and hopefully call you to action.

Bank closures are making the news nearly every week with plenty more on the horizon.

Although very few people have ever lost money during a bank failure, extensive delays can still wreck havoc when attempting to close on a time sensitive purchase / or bulk transaction. Staying ahead of the bank closures is crucial. And fortunately, it's relatively simple to apply for a second account that serves as a "back-up" bank. Use these quick tips to implement this 15 minute resolution:

1. Select a Secondary Bank. Make sure it's not on the FDIC's list of questionable or failed banks by visiting http://www.fdic.gov/bank/individual/failed/banklist.html.
If you’re current bank is on the list...better open an account sooner rather than later to assure smooth processing of all transactions.

2. Rate the Bank. Just because a bank or lender isn't facing immediate failure doesn't mean they are healthy. Rate the bank by contacting one of the major bank rating entities below:

A.M. Best Company: http://www3.ambest.com/banks/default.asp
Bankrate, Inc.: http://www.bankrate.com/
BauerFinancial, Inc.: http://www.bauerfinancial.com/
Institutional Risk Analytics: http://www.institutionalriskanalytics.com
Weiss Ratings Inc.: http://www.weissratings.com

3. Sign-Up. In most cases you can open and fund the account online. Simply collect your current banking information, driver’s license and other pertinent documentation and allow yourself 15 minutes to establish a new account and transfer funds. Remember to remain below the FDIC insurance limits especially if opening a new account with the same bank or a subsidiary of the same bank.

4. Set-Up Automated Features. Banking shouldn't be something you need to invest time toward so be sure to set-up automatic deposits and payment features to keep the account active and in good standing. Now you are not only prepared should a "worst case" situation arise with your own bank but it's a simple way to keep an emergency funds in place for unexpected repairs or other needs.

Social Security underwater “They have been talking about it for years, now it finally here”

Social Security will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office. Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual. The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax. Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances. When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said yesterday.

Now that the banks that keep our money are failing and shutting there doors, the Federal Reserve that is suppose to pay us our retirement pension is underwater; what are we suppose to do? How will we ever survive?

If you can’t tell I am being sarcastic, it is times like these that really create true wealth.

“You can print money, manufacture diamonds, and people are a dime a dozen, but they'll always need land. It's the one thing they're not making any more of.”

I leave you with this "The failing bank systems and government organizations have never been the solution."

The solution comes in simple human needs. We as humans need necessities and those that provide these necessities are the Kings. Housing and shelter are at the top of the priority list.

And I have it starting at .20 cents on the dollar all across the United States. Just this week we have over 500 homes in inventory and more coming every day. But these homes are only for real cash buyers and financial partners.




Angel Investors

All of my frustration occurs when buyers puff out their chest and demand to dictate what the seller will give them and at what price point!

As a principal or DIRECT authorized principal representative, I will share this information with you. If you are an intermediary, don't bother to ask.

Principals, you've got to have and prove you've got deep pockets to play in this game. Take what you are given to start, then negotiate for what you want later.

I'm going to take a leap of faith and assume if you're here, you already know what the prchasing process is... BUT, if you don't or are foggy about the industry process and only way it will get done, I'll take a minute to give you some BG (BackGround) info.

Please bear in mind, I put this site together to educate. The instruments discussed should only be considered by those who have consulted with their financial advisor and fully understand these topics.

Right here, right now, let's dispell the internet myth that "...large REO tapes of up to $1b are readily available."

"So...show me what you've got in a tape. And Show me the Seller or LOA" "People like this are not buyers they are oxygen theives trust me ask two of my account executives that just wasted a whole week with a big group that did nothing but shop suppliers."

Ask yourself this: If you were the owner of a valuable asset, would you throw it out on the internet to see if anyone would buy it? I didn't think so.
And neither will any bank or servicer.

There exists a process or "protocol" which must be adhered to. If you don't yet know the rules or think you're someone special to which such rules don't apply, have fun wasting your time. Unless you're "hooked up" to the source as direct as possible, you're going to be involved in the most hellalcious exercise in futility of your life known as..."the daisy chain".
Or as my partner refers to it (TSI) "Three Stooges Investing"

There are a number of ways or methods in which to use these instruments to make money. Lots of money. Each instrument is a complex but easy to comprehend maze of intricacies. As you read through this information, you will have questions. Questions that I invite you to ask after following protocol.

REO: "Real Estate Owned". The liquidation of "Bulk" REO assets is typically handled by an "Asset Manager". Most times internally to the institution or servicer.

They will typically deliver a pool ($10 Million to $100+ Million) of properties at 55% to 80% (depending on area, even steeper discounts) of the true value including fees. While the pricing has been about that percentage, getting to the list of properties is another story. The reason the pools are elusive, is simply because they are purchased by well positioned investors before anyone "sees" the list.

Buyers must be ready to pull the trigger at a moment's notice on REO packages (1-2 hours max for commitment of LOI,12 hours for deposit into escrow to hold inventory)That means we need to have our buyer's educated and well prepared.

The REO process is extremely competitive so "newbie" buyers/investors to the game will have great difficulties in securing packages if they don't know "how" the deals work and are structured which is where I come in.

The buyer/signatory MUST be identified upfront on the initial note order form or letter of intent. The seller's must know "who" they are potentially doing business with from the start because of the U.S. Patriot Act so if we cannot get past this key buyer ID disclosure issue with involved buyers we cannot move forward.

Buyer ID is crucial and the first step as the seller will be to check their "watch lists” for certain organizations, names and parties that they are prohibited from doing business with under law. Secondary to that critical item is the new "internal" watch lists the banks have in place due to the unbelievable level of fraud occurring in the arena so the involved parties requesting product for purchase “MUST” be disclosed.


Realistic buyers are a must. We need to ensure we are working with buyers who clearly understand the current market and price points.

Much of the frustration occurs when large buyers with deep pockets puff out their chest and demand to get to the front of the line to dictate what the seller will give them and at what price point. They want high-end everything for little or nothing.

Yes, we are in a correcting real estate market but buyer's must be realistic. This type of attitude and behavior will not fly with the banks and selling sources. These types of buyers/investors will never secure product and will likely get themselves blacklisted.

This is one of the "hot" topics with bankers and private sellers right now. They are sick and tired of arrogant buyers, uneducated brokers and consultants.

Financial performance - last but not least is necessary. The buyer's MUST have their finances in order and be able to prove it.

Cash is king and cash buyer's trump buyer's that use credit. Hard money loans from shakey lending sources for newbie buyer's will not impress the sellers and will likely lessen the buyer's chance of securing a REO or notepool.

We all must remember at the end of the day the Seller decides "who" they will do business with period. They are trading trust deeds for cash and they choose who they will conduct business with. Unfortunately, the buyer's and involved parties are not in the driver's seat on this one as there are more buyer's than seller's right now. So let's all be clear on that...the seller's are in control.


NPN: "Non Performing Notes".

Very simply, these are individual or "pools" of residential or commercial mortgages. Once the borrower fails to meet the promise to pay on the note, the note becomes "non-performing". These instruments can be accessed via similar channels as REO portfolios.

Now for the "Catch 22"..."The" Protocol.

That's just it...there isn't just ONE protocol.

Each seller has their own.

Then the paperwork starts flying all over the place - everybody wants "to be protected".

My advice? Forewarn your clients ahead of time that each seller has their own legal department which means their own set of protocol. Which means thier own "Buyer Profile" form and their own "LOI". In addition, your buyer will need to "proof up".
Typically called a "POF" or proof of funds. A simple statement from the buyers financial institution indicating they do in fact have the required liquid funds to close the transaction. No account numbers necessary. If your deal gets this far, it will then be buyer and seller on the phone hammering out thier deal. So, just relax.

And speaking of the seller...
if you're trying to get next to them...It's like this... you have an exotic Italian car. The best mechanic in town is the only person you let service your car. In fact, every exotic car owner in town wants him to service their car.
This many clients keep him extremely busy. So busy in fact, they don't speak directly with him. They make an appointment with his assistant. The work gets done. Everybody's happy.

That's the game.

CA Partnership is filled all CA properties sold!
Nationwide partners being sought: Available 300+ Properties mixed states available / 300+ Non performing notes available




Angel Investors

SUNDAY MORNING COMMON SENSE! IF YOU DO NOT HAVE THE MONEY TO INVEST IN TODAYS MARKET, GO FIND SOMEONE THAT DOES...

Number of bank failures this year: 22 and counting

Last week, regulators closed 2 banks, bringing the number of bank failures to 22 so far this year. The banks which were shut down are Carson River Community Bank, based in Nevada, with $51.1 million in assets and $50 million in deposits as of Dec. 31 and Rainier Pacific Bank with $717.8 million in assets and $446.2 million in deposits as of Dec. 31. The Federal Deposit Insurance Corporation (FDIC), which insures up to $250,000 per account at member institutions, will take a hit of over $100 million on account of the 2 failures. FDIC says the number of troubled banks jumped to 702 in the fourth quarter from 552 in the earlier quarter. Nearly one in every three banks reported a loss in the latest quarter. Amid recession and a rise in delinquent loans, the pace of bank failures has been rising, from 25 in 2008, to 140 in 2009, and to 22 in just the first 2 months this year. Banks are likely to incur as much as $300 billion in losses on Commercial property loans in the near-term, according to a recent report by the Congressional Oversight Panel, the watchdog that monitors financial bailout. With the economy not showing any signs of sustained recovery, the FDIC’s insurance fund is expected to take a hit of over $100 billion in the next four years.

Construction spending falls 0.6%

According to the Commerce Department, construction spending in the U.S. fell for a third straight month by 0.6% to $884.13 billion in January; construction spending dropped 1.2% in December. Nonresidential buildings in the private sector dropped 0.9% in January, while state and local government construction dropped 0.7%. Federal construction spending rose 1.9% to a high of $30.68 billion in January, increasing for the fifth straight month. Spending on private home buildings rose 1.3%. While housing starts rose 2.8% in January from December, construction permits, an indicator of future projects, dropped 4.9%. New home construction which rebounded strongly in the third quarter of 2009 seems to have lost some momentum. The economy was pushed into its worst slump since 1930s on account of the housing collapse. “We haven’t really seen much improvement in housing,” said Michael Englund, chief economist at Action Economics. “Residential construction is still weak. On the non
-residential side, builders are hesitant to go along on new projects and banks are reluctant to provide the capital.”

HARP gets extension for 12 months

The Obama administration introduced the Home Affordable Refinance Program (HARP) last year to help about 4 to 5 million borrowers who have little or no equity in their homes. The program, administered by Fannie Mae and Freddie Mac, refinanced 190,180 mortgages in 2009 with loan-to-value between 80% and 125%. The program which was set to expire June this year has been extended by 12 months. Edward DeMarco, acting director of the Federal Housing Finance Agency, said the program has been extended to June 2011 in order to "support and promote market stability and to encourage lenders and other mortgage market participants to fully adopt the HARP program, including the implementation of the October 2009 expansion of loan-to-value ratios to 125%." Analysts have been critical of the program and say it has had a limited impact so far. "The overall volume last year was an embarrassingly small amount. I don't think it will make a big difference" to have the program extended, said Thomas Lawler, a housing consultant.

Bankruptcies drop in the U.S.

BankruptcyData.com says only 5 public companies filed for Chapter 11 or Chapter 7 bankruptcy protection in February, compared to 19 in the same period in 2009. In January, 12 public companies filed for bankruptcy while 11 public companies went under in December. Bankruptcies of large companies -- with more than $1 billion in assets -- have slowed down. In 2009 about 25% of the companies that filed for bankruptcy had assets over $1 billion while so far this year only 19% percent of the total 16 bankruptcy filings have had more than $1 billion in assets. The improved economic situation and buoyancy in capital markets are helping companies stay afloat. Analysts however warn that the scenario is not entirely rosy and more bankruptcies can be expected. "Last year was like a tsunami, but this next phase will be more like a rising tide; consistent and steady," said William Snyder, a managing partner with CRG Partners. Analysts feel capital restructuring can help companies only to a limited extent. In the long run, what really matters is operational efficiency. Alan Cohen, chairman of Abacus Advisors, a turnaround and restructuring firm, said: "You can correct a balance sheet by manipulating debt into equity, or reducing debt, but unless the entity focuses on improving operations, they're going to have a tough time."

Now after reviewing the short list of information I have provided you above, I will still point out what I feel is the obvious. People everyday waste my time with there buyers "brokers" all stating they can buy 100's of millions of dollars in real estate. Yet not one of them can follow simple instructions, proof up or come to the closing table.

So for Sundays discussion topic:

Parkinson's Law & REO Sales

Cyril Parkinson must have been an astute student of human behavior especially when it came to economic trends and traits; a British Civil service employee, Parkinson originally noted the tendency for bureaucracies to expand over time...an observation sure to be noticed by short sale / REO buyers waiting for approval from big banks. In fact, many of the Parkinson's observations seem to apply especially well to short sale / REO investments including:

"The demand upon a resource tends to expand to match the supply of the resource"

Think about "easy credit". Without easy credit and lax lending terms many people would not have bought homes they were unable to afford to begin with; it's also why modification programs simply won't work in the majority of situations. Despite decades of government intervention designed to make everyone a homeowner, the ratio of renters versus homeowners tends to remain the same over time. Essentially the current situation can be considered a correction back to the "mean."

"The amount of time in which one has to perform a task, is the amount of time it will take to complete that said task"

Again, how many last minute approvals have you encountered recently? While procrastination isn't limited to bankers or brokers, it's certainly alive and well in today's economic arena.

So, how can you use Parkinson's Law to your advantage? It's simple...

1. Expedite Deadlines...for yourself and others. Rather than wait until the last possible moment, start setting deadlines ahead of time for both yourself and others. This not only reduces stress but tends to put you back in control of sluggish situations and lagging negotiations.

2. Put a "product" back into productivity...rather than outline a "to-do" list, start measuring actual outcomes instead. For example, set a date to have all your social media marketing up and running then clearly define what it should consist of and look like. If you aren't able to get it done by a specified date, pull in the big guns and have it done for you; remember, the objective is to achieve a final outcome or goal rather than just "make busy work."

3. Calculate the value of your time...then hire out others to do at least the bottom 20% of the least profitable errands and chores. By consistently doing this on a regular basis it is possible to increase your personal productivity and hourly time value by well over 20 per annum.




Angel Investors

THE DEATH OF THE SINGLE FLIPPERS..LEADS TO THE BIRTH OF BULK BUYERS WITH ME !

I've heard of this all too often.

You have a A to B to C closing all lined up.
You (or hopefully your negotiator) has finally made it through the voice mail hell with B of A. And your gross profit spread is solid and definetly worth your time.

And then it happens. You begin to read the approval letter.

AWESOME! You think as you notice the deficiency judgment
is waived and some of the concessions you've asked for got
approved. And then you see it. As plain as day.

Item #10: "There are to be no transfers of property within
30 days of the closing of this transaction."

Hmm. Ok, you think. Let's forget about this purchase and move onto the next one, because you don't have the capital to hold it for 30 days or more.

The next day you come into the office and think...forget those Bank of America stiffs. Here's another purchase agreement from ASC. I'll get busy on that one. And then guess what happens?

The approval letter comes. And it says

"If the closing agent has any knowledge of any sale or transfer of property within 30 days of this transaction, closing agent must immediately notify lender prior to closing, funding, and/or recording."

“Damn”. Twice in one week!

Then you decide to finish up some of the purchase flips you've been working on, and you're excited to know that Wells Fargo recently relaxed its guidelines to allow financing for "C" buyers.

But then you read their guidelines and it sticks out like a sore thumb:

"Seller must be in title to the subject property."

Oh, that means same day deals can't happen, because at the time of underwriting you, the B investor, aren't on title.

Forget Wells Fargo you scream ...

The next day you wake up and think ... forget those stiffs at Wells Fargo, it is time for FHA. After all, these short sale gurus blew up your inbox with the good news that FHA 90 day seasoning had become a thing of the past.

Until you read the guidelines ... which state that the lender is required to assess, as one of the conditions of the 90 day waiver,whether:

"The seller holds title to the property."

Ouch!

Same day flips can't happen with FHA either.
It looks like there has to be a better way, right?

Well, there is...but only for a select few investors and there brokers!!

Drum Roll………………………

“Its called buying the properties in bulk from us!

No more Hasssles, guidelines, hoops or wasted time.

So "Qualify" your buyers "Proof Up" the funds and "contact us" today to get your future in bulk purchasing rolling today!




Angel Investors

Quick Trip Down Investment Memory Lane, But read the end because the inventory has never been better.

"Houses cost too much for the mass market. Today's average prices is...out of reach for two-thirds of all buyers". (1948 when the average cost of a home was $8,000).

"In California...it's not unusual to find families of average means buying $100,000 houses. I'm confident prices have passed their peak" (The Coming Real Estate Crash, 1980).

"Most economists agree...a home will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980's" (Money magazine, April 1986).

Think the days of getting rich from real estate are over? Better think again. Take a few minutes to explore real estate predictions from days gone by to see how history tends to repeat itself then get set to join the ranks of the rich by building a REO portfolio. The majority of self-made millionaires derived their wealth directly from real estate but even more importantly, when asked where they are putting funds today...the majority rank real estate as a top designation.

So, what drives the local market? It's a simple question but one which the majority of investors can't communicate when put on the spot.

1. Are basic jobs increasing or decreasing in the surrounding area? Remember, all real estate is local but even within any given town, there are areas of growth and blight. Keep an eye out for business or government building projects, new construction of hospitals or schools and other activities that lead to the need for shelter.

2. Recovery efforts.
Donald Trump has long been associated with the ability to transform undesirable properties into cash cows but the so-called secret of his success has less to do with strategy and more to do with outright courage than anything else. Plain and simple, Trump bought when others walked. Economic downturns tend to frighten away people at the very best time to buy. Position yourself to profit from the eventual recovery by buying right.

3. Migration.
Business and individuals tend to migrate from high cost areas to low cost areas. Follow the tax laws, energy expenses and other information to find out where tomorrow's hot growth areas are likely to spring up.

4. Quality of Life.
Beach-front property never goes out of style since it affords a very specific quality of life. Even the most hum-bug little cottage can fetch tens-of-thousands more than a comparable property located anywhere else due to the lifestyle issue. Properties that provide a lifestyle -not just a home- are likely to remain in high demand long after building styles change.

5. Cost.
No discussion of REO profits would be complete without mention of cost but price alone rarely determines the full potential of any property. Defining a "great buy" is much like beauty...it's in the eye of the beholder. Learn to see the value of every property in order to sell it successfully.

I have bulk REO Inventory available in many states for .50 cents on the dollar. Contact me today with POF (Proof of Funds) and have your REO Inventory within days!!!




Angel Investors

REFOCUS TIME, TIPS TO REMEMBER !!!

It is estimated over 95% of millionaires made their money from real estate. (REAL INVESTORS, BUYING AND SELLING)

On the other hand, the average Realtor / Broker earns less than $40,000 annually.

Why the discrepancy?

Obviously it's quite possible to make stellar returns from real estate yet each and every year plenty of people barely make ends meet even while working at it full-time. Yet research shows that success in real estate doesn't require full-time work, a large private income or many of the other trappings of success typically associated with wealth creation from other venues. In fact, plenty of part-time investors far outperform full time real estate associates each and every year.

Here are some quick tips:

1. Accept Success -
Seriously! Have you ever stopped to contemplate how easily most people accept failure or fate versus those that take responsibility for their own success? It's quite remarkable when you stop to think about it. Understand that everyone is capable of making a success from REO investments - but few people actually do so not because they are helpless but because they wait for help rather than forging their own path. When in doubt about what to do, first find a partner (ME) and then...simply do it.

2. Work at home when possible.
Set a schedule then stick to it. Don't allow distractions to clutter up your productive REO investing time. Hire childcare if needed, find a reputable and reliable virtual assistant and then focus time and energy on building the foundation for your REO empire by automating as much as possible.

3. Dump Dumb Rules.
Simplify your life and investing goals as much as possible. Sit down and think about how much time it takes you to argue / guide or demand things with your partners or employees about some minor situation versus finalizing a deal or making offers on upcoming REO's. Re-evaluate what rules and roles dominate your day then eliminate those that don't enhance your life. "IF THEY ARE COSTING YOU, NOT MAKING YOU MONEY THEN CUT THE CORD IMMEDIATELY"

4. Learn to say NO.
Stop apologizing and don't try to do it all yourself. It's not in your best interest (or that of your family and friends) to tackle more than you are able to deal with on a regular basis. Leave space for down-time as well as impromptu activities. REO investments are especially prone to last minute maneuvers where those that win aren't necessarily the most prepared but simply those in the right place at the right time ready to act with the right partners in place. (WHEN I SAY PARTNERS, GOOD CREDIT, MONEY IN THE BANK AND A WILLINGNESS TO FOLLOW DIRECTIONS....ANYONE WITHOUT THESE QUALITIES DO NOT EVEN WASTE YOUR TIME. "YOU KNOW WHO I AM TALKING ABOUT, THE GUY WITH 20 YEARS IN THE GAME AND NOT A POT TO PISS IN".)


5. List- Buy.
The more you list the more they buy and vice versa...the more you buy the more you have to list as a REO investor. It's a numbers game so take action and automated it as soon as possible. Increase your target marketing efforts on a regular basis; once you reach the desired number of homes, begin to switch your strategy to include more affluent clients.




Angel Investors

WHAT A WAY TO START OFF THE MONTH, AFTER THIS I NEED TO GET REFOCUSED

TARP and HAMP failed to halt foreclosures! (Really, did anyone really expect a government program to come through)

In his latest quarterly report to Congress, special inspector general Neil Barofsky said that the Troubled Asset Relief Program, or TARP, has failed to boost bank lending as well as halt the spread of foreclosures -- two key aims of the sprawling program. "Whether these goals can effectively be met through existing TARP programs is very much an open question at this time," Barofsky said in the report. Since Congress enacted TARP, lending to both consumers and businesses has continued to decline. Earlier this month, the Treasury Department reported that the 22 banks that got the most aid from the government's various bailout programs have actually cut their small business loan balances by $12.5 billion since April. "For those of you new to reading between the lines, this is the money that would typically be given to private entrepreneurs and business to reinvest and employee people"

The Obama administration did propose a joint program between the Treasury Department and the Small Business Administration in October to make capital cheaper for community banks that commit to increasing their small business lending, but three months later the government is still drafting guidelines for that initiative. Barofsky, whose office has been closely tracking the evolution of TARP, also criticized the Obama administration's Home Affordable Modification Program. Even as Treasury allocated $35.5 billion towards that foreclosure-prevention program as of the end of last year, only 66,500 homeowners have received permanent modifications, with another 787,200 homeowners in trial modifications. There is no sign that the rate of foreclosures is slowing down anytime soon.

OK Kids lets do the math to make sure everyone understands the numbers:

$35.5 Billion (9zeros) / 853,700 modifications (ya we believe these numbers) = $40,998.00 per mod.

PLEASE NOTE LESS THAN 10% OF ALL INITIAL MODIFICATIONS MAKE IT TO PERMANENT DUE TO FAILURE TO MEET OBLIGATIONS. LOOK AT THE NUMBERS AND SEE THE TRUTH 787,200 IN TRIAL ONLY 66,500 MADE IT LAST YEAR INTO PERMANENT

SO WHERE DID ALL THE MONEY GO? CAN YOU SAY GOVERMENT, BANKS AND THE EMPLOYEES

Earlier this month, RealtyTrac, the online marketer of foreclosed homes, reported that foreclosure filings surged to a record 3 million in 2009, up 21% from 2008.

There was at least one bit of good news from Barofsky's latest report however. He acknowledged that while the ultimate cost will still be "substantial" for American taxpayers, it will be less than originally estimated. (HEE HEE HEE, IF HE CALLS THIS GOOD NEWS I WOULD HATE TO SEE WHAT IS BAD NEWS)