Laughter and aging

We don't stop laughing because we grow old; we grow old because we stop laughing.

"Move Over" Law video

In California, and 47 other states, the "Move-over" law became effective on January 1, 2010.

http://www.moveoveramerica.com/

This is one of the many new laws that went into effect this year. It shouldn't have been necessary but many drivers don't pay any attention to it. Please drive safely and follow the rules.

Ray Stevens on Taxes

Ray Stevens, the singer, sings a song about taxes. It's a hoot. Be sure to read the lyrics. It's called "If Ten Percent Is Good Enough for Jesus"


http://susie1114.com/10percentisgoodenough.html

Traffic Tickets Fines in effect 1/6/2010

Please drive carefully and obey the law, the fines are really steep now. Make sure you count to 3 at every stop sign and count to 6 when you are making a RIGHT TURN on RED LIGHT. No more "California Roll".

Traffic Tickets Fines - 1/6/2010 in effect

VC 12814.6 - Failure to obey license provisions. $214

VC 14600(A) - Failure to notify DMV of address change within 10 days. $214
            Note: The fine may be reduced with valid proof of correction.

VC 16028(A) - Failure to provide evidence of financial responsibility (insurance). $796
            Note: This fine may be reduced with proof of insurance on or after the violation date.

VC 21453(A) - Failure to stop at a red signal. $436

VC 22349-50 - Unsafe Speed, 1 to 15 miles over the limit. $214

VC 22349-50 - Unsafe Speed, 16 to 25 miles over the limit. $328

VC 22450 - Failure to stop at a stop sign... $214

VC 22454(A) - Passing a school bus with flashing red signals. $616

VC 23123(A) - Drive using wireless phone not hands free, First offense. $148

VC 23123(A) - Drive using wireless phone not hands free, For each subsequent offense. $256

VC 23123.5(A) - Drive while wireless device to send, read or write text. $148

VC 23124(B) 16 - Minor drive using wireless phone. $148

VC 22500(I) - Parking in a bus loading area. $976

VC 22507.8(A through C) - Violation of disabled parking provisions, first offense. $976

VC 22507.8(A through C) - Violation of disabled parking provisions, second offense. $1876

VC 26708(A) - Unlawful material on vehicle windows. $178

VC 27150(A and B) - Adequate muffler required. $178

VC 27315(D and E) - Mandatory use of seat belts. $148

VC 27360(A and B) - Mandatory use of child passenger restraints. $436
            Note: This fine may be reduced by completing a court authorized child seat diversion program.

VC 27400 - Headsets/Earplugs over both ears. $178

VC 27803 (A through C) - Motorcycle safety helmet requirements. $178

VC 34506.3 - Commercial Driver - Log book violation. $616

VC 4000(A) - No evidence of current registration.. $256
            Note: The fine may be reduced with valid proof of correction.

VC 4159 - Notify DMV of change of address within 10 days. $178
            Note: The fine may be reduced with valid proof of correction.

VC 5200 - Display of license plates. $178
            Note: The fine may be reduced with valid proof of correction.

VC 9400 (A through C) - Commercial weight fees due. $178
            Note: The fine may be reduced with valid proof of correction.

The price of everything has gone up!

Real Wealth Expo this weekend Jan 22-24th. It's FREE

I'm doing a exchanging/cowboy auction workshop at the Real Wealth Expo at the Scottish Rite Center ( http://www.realwealthinvestor.com/real-wealth-expo-2010/?RM) this Friday evening (not Saturday like I told everyone until today) from 6-9 PM, Saturday afternoon a part of a panel with Bruce Norris & others and providing counseling to participants at a "Pro/Help Desk throughout Saturday.

Here's the schedule of events/speakers: http://expo-video.s3.amazonaws.com/Schedule%20RWE%20San%20Diego%201.17.10.pdf

Bring valuable stuff that you don't want or need & participate in the Cowboy Auction Friday evening!

Stay safe & dry till then!

Some Predictions for 2010

Some Predictions for 2010 according to David Goldberg, home-building analyst for UBS, a global financial services firm.

"... the government is going to do everything in its power to protect home prices...In the end; we believe that concerns about higher rates and declining mortgage market liquidity won't amount to much. In our opinion, the government continually made it clear that it is working to limit further home price declines given the serious ramifications these declines would have for both consumers and lenders."
Yes, the government will continue to do everything to maintain home prices. Higher interest rates are coming. Banks & the financial system are the base for our country's economy. The mortgage market's liquidity is the basis for much of our past prosperity & is a function of risk & reward. If investors see reduced risk & sufficient reward, they will bring their funds to the marketplace.

"Although we forecast that as many as 7 million foreclosures are likely to occur over the next several years, we believe the pace at which these homes will come to the market will be consistent with current levels. As such, the concerns around the negative impacts of rising inventory levels are overdone."
I hope that foreclosures will be allowed to come to the market faster than they are currently. They're coming at a level that is maintaining the price however they are strangling the marketplace. There are so many jobs & industries associated with real estate: building (construction & Home Depot, et al), lending (banks, mortgage bankers, loan officers, appraisers, et al), sales (real estate agents, escrow, title, et al), insurance, all of the associated industries (property management, tools suppliers, et al) and all of the employees of those industries as well as the clothing and materials they all require.

"An improvement in unemployment is the single most important predictor for the longer term health of the housing market - only by focusing on this variable can we truly understand the timing for a recovery."
So true. I wish our government would turn to restoring and improving our country's infrastructure rather than giving money and resources away. That would create a lot of jobs and actually produce tangible end products.

"Given the limited amount of high quality, finished lots coming to market, we expect the builders to increasingly consider purchasing undeveloped parcels, which represent a greater value.
Don't see this at least for a couple of years. We have millions of foreclosed on properties which need to be recycled before building new ones are feasible. It makes better sense for the lenders that take back raw land to improve them & offer them to builders.





"The longer term outlook for housing will increasingly dominate investors focus toward the end of 2010." 

Absolutely!


What ideas do you have? They may make a difference to us and to you!

Feds Suspend Anti-Flipping Rule

North County Times:

http://www.nctimes.com/business/article_d743162e-03d5-5ffd-af48-24717bd099f2.html

On Feb. 1, the Federal Housing Administration will place a one-year moratorium on its anti-flipping rule, which will allow buyers with FHA-backed loans to purchase homes that have been held for less than 90 days.

This is huge! Real estate investors will now be able to buy, fix up the properties quickly and sell them as soon as possible. It will make the properties available to FHA-qualified buyers in the lower-priced market. It also reduces the risk we investors incur in having a completely fixed up property and getting it vandalized before resale.

Record 3 million households hit with foreclosure in 2009

Another foreclosure article on CNNMoney.com

http://money.cnn.com/2010/01/14/real_estate/record_foreclosure_year/index.htm

The four states with the most foreclosure filings -- California, Florida, Arizona and Illinois -- accounted for a full 50% of the nation's properties receiving notices.

Nevada recorded the highest rate of foreclosures, at 10%, followed by Arizona, at 6.1%; Florida, 5.9%; and California, 4.75%.

But some states where foreclosure hit hard early are now faring better. Indiana foreclosures fell by 9.9%, Ohio by 10.5% and Rhode Island by 23.6%.

California, by far the most heavily populated in the union, posted the most filings with 632,573, up 20.8% from 2008. Golden State cities have also recorded some of the steepest declines in home prices, with values falling 50% or more in some Central Valley cities.

Cities Predicted to Post Gains Over Next 2 Years

These seven cities are expected to rise in price over the next two years according to CNNMoney.com:

San Francisco

Seattle

Pittsburgh

Rochester

Oakland

Memphis

Birmingham

Here's the link for the article:

http://money.cnn.com/galleries/2009/real_estate/0910/gallery.housing_price_forecast/index.html

Subject To question

I received a question from Paul about buying a property "subject to" the existing financing.

"I was talking to the neighbor about her situation and it occurred to me that she is a classic motivated seller. I still need to gather information about her loan/title, so I'm not sure yet if the numbers make sense. I think that a "subject-to" deal is the best option for me. Can you recommend some reading material or another resource where I can educate myself on "Subject-to" deals? My intention would be to hold the property long term as a rental. How do I deal with the bank if/when they eventually find out about the sale? Thank you."

Go to the library & look for any book on real estate financing. Look in the index to see if they discuss subject to. I would recommend any book by John Schaub, especially Building Wealth One House at a Time. Most of his books include & describe "subject to". There is a workshop on Jan. 30th. I know both instructors use subject to & seller financing to buy. (www.investorsworkshops.com, then click on events)

You just make an offer subject to any existing financing without formally assuming the loan. You have the moral responsibility to make the payments but not the legal because the loan is still in the name of the original borrower. I prefer to notify the lender on what I intend to do to get their formal blessing (in writing) because I want them to also allow a sale to another buyer after me. If I don't get the blessing, I still may do the deal however there is the possibility that the lender may call the loan due. Currently, I'm not worried about getting a loan called because I lenders have too many foreclosures and loans that are not paying.

When I take over a loan, I always improve the original borrower's credit score because I make the payments.

FEAR by Magi Bird, EMS Master

My very good friend, Magi Bird, wrote this. She's a very successful and experienced real estate broker and exchangor. She has trained and educated more equity marketing specialists (EMS, exchangors) than any other teacher in the country.

F.E.A.R.
by Magi Bird

In grade school I heard that fear was an acronym for "False Evidence Appearing Real". I also learned that Franklin Delano Roosevelt said "We have nothing to fear except fear itself." With the headlines screaming about inflation, foreclosures, gas prices, mortgage relief', bank failures, brokerage failures, bankruptcy, slowing sales, the declining dollar, falling home values and increasing unemployment, it seems a reasonable response to be afraid. When financially threatened it also seems appropriate to spend less, downsize, pay off bills, stay at home, cancel luxuries and vacations, stock up on food, turn off the air conditioner, hoard cash and do without. The result of this prudence: a contracting economy, job layoffs, business failures, bankruptcy, inflation, foreclosures, bank closings and more headlines.

STOP!

What has really happened? Five years of unprecedented low 30 year financing started everybody "investing" in real estate to make a quick buck. Money could be borrowed at 2% above the governments' published (but untrue) rate of inflation. House flipping became a National pastime and "I Buy Houses" became a bumper sticker. The entry of so many new "investors" to the real estate market created competition for the inventory and the law of Supply and Demand kicked in driving prices through the roof, detaching the economic value of the property from its price tag. The higher pricing created negative cash flows which consumed the discretionary earnings of the real estate "investor", who then had to sell under financial duress which dropped pricing. People stopped standing in line to reserve "to be built houses" they could flip at a profit without ever closing escrow. Builders with inventory in various stages of completion slashed prices to attract buyers, destroying the value of the homes families had just purchased. People who needed to resale were competing against builders and had to reduce pricing as well, resulting in negative equity holdings, walk always, short sales, foreclosures, bad loans, troubled banks and failures.

SO:

Is real estate a bad investment? Absolutely not! We are standing at the threshold of the greatest reshuffling of wealth that most of us will see in our lifetimes. When this cycle ends, which it will, the ones with the best real estate investment portfolios will be the big winners. Speculators, not investors, created the run up of pricing and investors will be the stabilizing element in the marketplace. If you do not know the difference between the two, do not buy any real estate until you do. In the world of investing, cash is King and cash flow is Queen Consort. Real estate must be purchased at terms that create a return on the capital you invested at regular intervals. That return may not exist at the time the real estate is purchased. The building may be vacant, in need of repairs, rezoning, restoration, completion or upgrading prior to it being rented. The income may be low or nonexistent due to the poor management practices of the previous owner. If this is the case you must be brutally honest in your self assessment. Do you have the skills, talent, time, tools, patience and experience to affect the required changes? Will you be a more capable manager than the previous owner? If not, do you have the additional capital and reserves to hire those services done for you and carry the property until completion and rent up? If there is any doubt in your mind, find a project or property that is up and running without deferred income or maintenance issues and pay a little more for it.

NOTICE:

I said that property must be purchased at TERMS that permit cash flow. The price is almost irrelevant because it never exists until I end the investment by selling. As long as the property produces cash flow, the principle of the loan is being reduced and the local population is growing, profit is inevitable. This is the jewel at the heart of real estate that you will find nowhere else. Even a hobo under a bridge needs a piece of turf to occupy for a period of time. Unlike vinyl records, land cannot be replaced by new technology. Shelter is needed by everyone, everywhere, at all times and the earth makes new turf very slowly. Real estate renovation, cash flow analysis and property management are not sexy or easy. They take study, effort, patience and practice. If someone tells you that it is easy, any fool can do it and it will make you rich overnight, beware. Real estate will, in fact, make you very rich, slowly.

NOW:

Is the time to buy real estate because sellers are competing for your money. You have opportunities to negotiate terms that will permit cash flow, in some cases without much down payment. In many cases sellers will carry a portion of the purchase price, scale payments to cash flow, share the risk, improve the property, guarantee the rents, include other assets, pay down interest rates or lease with option to buy. Avoid sexy properties. The market is pushed from the bottom, not pulled from the top. If you have to live in a million dollar house, buy it now for half that amount and bank payments for a year. Remember that your home is not an investment, it is overhead and every dollar put into it kills an investment dollar and all the earnings you could make on it. Do not be affected by a sales pitch and remember that headlines are the highest form of salesmanship. Disaster sells on the front page, don't be a buyer. Sound real estate investment principles have not changed but the penalty for ignoring them has come home to roost. Sharpen your pencil and take solid investment advice from people who have what you want. Today is your once-in-a-lifetime opportunity: never be stopped by F.E.A.R!

Winston Churchill said, "We will never, never, never give up!" Don’t you!

Magi Bird
EMSMaster, CEO,
magi@realtyequitymarketor.com

Free giveaways from SDCIA January speaker

Our speaker this Tuesday January 12th is Stephen Wilklow of the Maui Mastermind group. He has generously provided giveaways to our group again this year!

These are excellent materials developed by my friend David Finkel. My favorites so far are the ones on Time Mastery and forming a mastermind group.

Cut & paste the links into your internet browser to get them:

Business Owners Success Kit

You'll get:

• One Hour Video Training: How to Overcome the Greatest Challenge Every Entrepreneur Faces
• Special Report: How to Form and Run Your Own Mastermind Group
• 50-Minute Video Training: The Fundamentals of Time Mastery: How to Grow Your Business Without Working Longer Hours or Weekends
• Special Report: 35 Hidden Business Assets You Can Leverage to Grow Your Company
• 30-Minute Audio: Wealth Secrets from Maui Mastermind

http://www.mauimastermind.com/page/custom/predoibbsk

Free Biz Owner Ebook

You'll learn:

• The 3 levels of building a business
• 67 tactics to leverage your business assets and triple your cash flow
• The 10 biggest business blunders
• A 7-step game plan to better manage your business and financial assets.

http://www.mauimastermind.com/page/custom/MMBB 

The Maui Mastermind group have been very generous to our SDCIA members now and in the past. If you've received a Maui Millionaires book, please thank Stephen on Tuesday and David next month at their event at the Marriott Mission Valley on February 19-21.

Whatever you do, whether it's working for yourself or someone else, you're in business for yourself. And you need to learn how to successfully run you own business. 


See you Tuesday.