Tuesday, December 30th, 2008
Hypo Real Estate, a German commercial property lender has been rescued for a second time by the German government two months ago. The company will also slash more than 40 percent of its workforce and pull back from some business areas to keep from completely going under.
Staff numbers would fall from 1,800 to 1,000 in the next three years, HRE announced this last weekend. Strangely enough, some two-thirds of the jobs being lost are outside of Germany. At the same time, the Munich-based corporation warned that business conditions had declined in the current quarter and “significant extra burdens” were expected in its fourth-quarter results. It was also terminating the contracts of Markus Fell, Finance Chief, and Frank Lamby, responsible for all commercial real estate operations.
HRE attracted global attention in October, at the height of the financial market crisis, when it received a €50bn ($70bn) funding package, orchestrated by Berlin, after a €35bn lifeline proved inadequate. This is the same predicament large US banks find themselves in.
HRE had run into difficulties after failing to obtain sufficient short-term, unsecured financing to support its public sector lending arm. The company has been among the German financial institutions hardest hit by the financial turmoil because of its reliance on wholesale funding markets.
Monday, December 29th, 2008
For the uninitiated, a real estate broker is one (or a firm) who acts as mediator between sellers and buyers of real estate. They also market and put together deals. Hmm… If you are a good RE Broker, then chances are you are very affleunt and handle very exclusive accounts.
Or, you are a newbie who is trying to break into the real estate market by not actually purchasing any real estate.
It sounds to me that brokers do nothing outside of what an experienced RE investor can do on their own. So, why do we have brokers? When real estate companies wish to capitalize on fees and “add-ons”, they come up with things like brokerage, handling services and negotiation representation. All things that you will be charged for. And all things you can do yourself for nothing.
In this particular real estate market, we have a large supply and a lower demand, which is causing prices to drop. This also means brokers are out of work. Some brokers are trying to move devalued real estate. And some are trying to convince buyers to buy. Bottom line is without buyers and sellers and enough cash to support both, you have no real estate brokerage business.
Save some money and handle real estate yourself. Keep as many transactions in-house as possible. This includes locating properties, negotiating deals and representing yourself and/or company.
Let the brokers move their businesses to insurance.
-Richard – www.TheFlipBoard.com
Friday, December 26th, 2008
Most of you homeowners and investors probably paid a property tax installment in December. Now, if you think next year’s income might drop due to higher vacancy rates or cutbacks from jobs, it might be smart to make that second payment now if you itemize deductions on your taxes.
Why do this? So you can deduct it against this year’s income. If your job goes away next year that bill will be harder to pay and, on top of that, the deduction will be worth less.
It might even make sense to borrow a little to pay early. But run the numbers for your situation to be sure.
Wednesday, December 24th, 2008
Merry Christmas!
First, the bad news -
The nation’s labor market continued to worsen in recent weeks, with the unemployment lines stretching to the longest in 26 years, the Labor Department reported this morning. First-time applications for state unemployment benefits jumped by 30,000 to a seasonally adjusted 586,000 in the week ended Dec. 20, the government said, based on reports of actual filings at state offices around the nation. That’s the highest since November 1982!
Next, better news -
Fixed-rate mortgage rates fell again this week, with the 30-year fixed-rate mortgage setting another record low, at least since Freddie Mac began doing its weekly survey in the early 1970s. The 30-year averaged 5.14% for the week ending Dec. 24, down from last week’s 5.19% average, according to the survey, released on Wednesday. It was more than a full percentage point below its 6.17% average a year ago, and hasn’t been lower since Freddie started doing its rate survey in 1971.
And now the Good news -
With interest rates as low as they are, the numbers for your deals should be incredible! Sure, it will be harder to buy a property with no money down; however, if you structure the deal properly, you will see that returned to you in short fashion. In addition to agreeable rates, there should be a surplus of good renters out there! Depending on your location, there should be a line of qualified renters looking for a good place to stay at a reasonable price. This could be due to the large number of foreclosures, but it is what it is. Markets are cyclical and the Real Estate market is no different. People need shelter, regardless of whether they were victims of a foreclosure or not. It is up to you to provide this to them.
And don’t forget about the number of vacant properties just waiting for you to acquire and fix up and subsequently rent.
Good Luck!
Tuesday, December 23rd, 2008
I was reminded today of a post from a while ago that talked about increasing your credit rating. You can read it here. The reason for that quick run down memory lane was to remind me that if investors did not start cleaning up their credit, then they will find it almost impossible to get a bank to loan them money. It takes several months of on-time payments to build that reputation you, as an investor, will desperately need. And now that we are in a financial crisis, created and owned by the banks, institutions are looking for every possible reason NOT to lend investors money for Real Estate. Read the rest of this entry »
Sunday, December 21st, 2008
I had an idea this morning. How do I communicate to those who just don’t “get it”? Then it dawned on me. Tell a story or equate the concept to something they can relate to. I chose the latter of the two methods.
Most newbie investors have trouble truly visualizing what the Real Estate business is as well as how to make it successful. Based on the successes we have experienced, the best way to approach Real Estate is to think of yourself as printing money. Read the rest of this entry »
Saturday, December 20th, 2008
The weekend before Christmas 2008 is upon us! Beware! Streets will become crowded, retail prices lowered and people more obnoxious than ever. It’s time to jump into the fracas that is last minute Christmas shopping. Or better yet, go look at houses and build your business. It’s safer and a lot less stressful. Here’s a rhetorical one for ya… If we have been in a recession for a year now, then why are people literally breaking down doors at Wal-Mart to purchase things like TVs?
Instead of bowing to the gods of consumerism, we should be getting back to basics this holiday season. And those basics are family, God and country. Spend some quality time with your kids. Instead of cramming them in car and driving all over the place, sit down and read them a story. And if you do have to get out, go look at houses. You never know when you will find a good investment deal.
-Richard
Friday, December 19th, 2008
As an investor, especially in this market, people are always asking to be shown the ropes or for some advice. That is the fundamental purpose of TheFlipBoard.com. As most of you know, most amatuer advice is useless and wastes everybody’s time. Below is some real advice from individuals who have done it and are doing it. Ok, it’s from me and a good friend of mine who believes in Carlton Sheets’ system. But everything else is solely just my opinion.
I stick mostly with single-family homes but most of the techniques below will apply to multi-units as well. Read the rest of this entry »
Thursday, December 18th, 2008
Reading the news has become an exercise in how much bad news I can take before I feel the need to jump off a building or drink 100-proof alcohol until my tears become flammable. Read the rest of this entry »
Wednesday, December 17th, 2008
WASHINGTON – The Internal Revenue Service said Tuesday it will try to make it easier for homeowners in financial straits to refinance or sell their homes.
The plan announced by IRS Commissioner Doug Shulman would speed up a process where financially distressed homeowners may request that a federal tax lien be made secondary to liens by the lending institution that is refinancing or restructuring a loan. Read the rest of this entry »
