Journal
Connecting People - Educating Investors Government Helps Your Retail Buyer... Chuck McCay, Broker/Investor...................3 Silicon Valley 2010 Real Estate at a Glance Jason Lee, Broker.........................................4 Buying Fundamentals Stuart Baeriswyl, Broker/Investor...............6 REO Business & IRA Dollars Lori Greymont, Investor/Entrepreneur........8 Business Entities for CA Investors Anthony F. Earle, Attorney.........................10 IRA’s and Real Estate Investing Jeb Hendley, Senior Investment Broker.....11 Selecting the Best Investments Tom Wilson, Owner/Investor.....................12 Reselling REO’s via Online Auctions Jesse Loomis,VP Bid4Assets.....................15 Putting Lipstick On A Pig! David Beck, CFP........................................16 Mortgage Loans - Is a Thaw Coming? Michael Ryan, Mortgage Broker................17 Paying a $20k note can be “Great News” Natalie Knowlton, Short Sale Expert.........18 Until You have your first Million... John Schaub, Investor/Author....................20 Real Estate Professionals and the IRS Richard Smith, Enrolled Agent..................23
Vol. IV
www.SJREI.net
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Deals in the Shadows Bruce Norris President The Norris Group
T
he Obama Administration continues to push measures to stem the tide of foreclosures. There has been a slight shift in language in 2010, however. The new emphasis is on “unavoidable” foreclosures which include investors, speculators, million dollar homes, those that have defaulted on vacation homes, and borrowers incapable of making payments. Instead, the current Administration has decided to “focus on providing responsible homeowners opportunities to obtain a modification or to refinance and prevent avoidable foreclosures and, when necessary, must facilitate the transition to a more sustainable housing situation.” Looking back on the original HAMP language, the target audience hasn’t changed. Neither has the fact
that the program is completely voluntary. These are the exact same reasons HAMP failed to gain momentum when it was first released in 2009. While new financial incentives exist for banks to cooperate, little data exists to prove long-term success and sustainability of this program and much is at stake considering the state of the economy and new regulations coming at the industry from all angles. Executives from “Too Big to Fail” banks including Bank of America, JP Morgan, Citigroup, and Wells Fargo testified in front of the House Financial Services Committee hearing in mid-April collectively saying that permanent loan modification was not the answer nor was it the only option. Fairness, contract sanctity, and our lending future were reasons cited not to participate in principal right downs. (Continued on Page 9)
Until you have your first Million, it’s all about Focus! John Schaub
W
hen you begin real estate investing and are starting with few assets, you don’t want to diversify. Instead, you want to focus and become as good as you can in a certain area of real estate. If you are into houses, become the best buyer and manager in your town. If you are buying quality properties at wholesale prices, with owner financing and then renting to tenants that take care of your properties, you will have a successful program.
Diversification can come in several forms. First, it can come in the way you finance your purchases. Most of us agree that buying with owner financing on great terms is the best way to go. In a downturn, buyers who purchased with owner financing survive, as their “banks” are people who will renegotiate terms so that they can keep the property. Rarely do sellers want to repossess a property they sold on terms. Real banks will only renegotiate if you are broke or have no other resources. An investor with net worth and some money in the bank is not a candidate for a short sale or a loan renegotiation with a commercial banker. (Continued on page 20)