Volunteer Project Update

We just completed our community service project this past Saturday, rehabbing a local home here in San Jose – mainly working on the exterior of the property. We painted the house, cleaned, and did some landscaping as well as removing a ton of junk from the property. A barbeque following the project which was fun, and it felt good to provide this service to a little old lady in our community.

We did this rehab in concert with Rebuilding Together who help people to rehab their homes, as opposed to Habitat for Humanity who build new homes. Rebuilding Together focus on older, disabled residents who really need the help. Thank you to all of the volunteers and to our sponsors - Richard Smith & Associates, and Howard Bloom from Intero Real Estate. We hope this is the first of many such projects.

BEFORE

AFTER

LENDER STATUS

The banking melt-down continues as we see that homeowners aren’t the only ones struggling with loans taken out in the past few years. From 6/2005- 6/2007 the region's top 10 mortgage lenders made 176,451 purchase, refinance, and home equity loans in the Sacramento area. Here is the latest on those finnciual institutions according to DataQuick Information Systems:

Countrywide Financial Corp.
· Former Rank #1
· $7.7 Billion in loans.
· Status: Countrywide imploded this year, purchased by B of A – they are retiring the name as it has been tarnished.
· Has been sued by four states over its lending practices - CA, FL, Illinois & Washington

Wells Fargo
· Former Rank #2
· $6.5 billion in loans
· Status: RBC Capital maintained an outperform rating on Wells Fargo stock saying they are like to survive the downturn better than their peers

WAMU
· Former Rank #4
· $4.6 billion in loans
· Investors have rushed for the exits even though the banks have issued statements saying it is adequately capitalized. Share prices fell from $42.90 to $4.99 last Thursday Wall St. analysts suggests the institution is troubled because of its exposure to failed mortgages.

Golden 1 Credit Union
· Former Rank: Unknown
· $1.2 billion in loans
· The Sacramento based statewide credit union says conservative practices helped steer clear of loan problems that other competitors are experiencing.

World Savings Bank
· Unknown
· $2.9 billion
· Bought by Wachovia Bank in May, and the CEO Ken Thompson referred to it during a annual shareholders meeting as a “bad acquisition”. He resigned in June...

Make sure you are in an FDIC insured institution, and that your funds are covered. $100,000 per individual, $200,000 per couple. There were a ton on Indy Mac customers who had lost money due because they did not keep this fact in mind.

JACK MILLER coming to the SJREI

I attended the Jack Miller & Peter Fortunado seminar in Reno a couple of weeks ago - it was very informative and there were lots of seasoned investors to network with which made it even more enjoyable. These two have been around for multiple cycles and have a good solid approach to teaching without the fluff, and no upselling. It was well worth attending.

Jack is 79 years old, and has done every creative deal imaginable in real estate - the seminar was chock-a-block with insights including the fact that Jack has done 500 plus deals with only one traditional loan in all of those transactions. We also got clarification on the fact that sales numbers are up because foreclosures are now being included in the numbers as sales. There are opportunities that we need to be gearing up for and increasing our creative financing knowledge is key with all of the banking meltdowns that are occuring around us.

Jack spends his summers in Reno, and winters in Florida - so before he leaves to hibernate in Florida this Fall we have secured him to come do a day seminar at the SJREI on Saturday, September 6th. This is really a coup for us as we have never had him present to our group before. Jack is old school with lots of great information to share; no product sales just content - so mark your calendars.

Options when things go wrong...

Options When things Go Wrong...Presented by : Attorney Shawn Parr
This is the topic of our meeting on Thursday night - I selected this subject because of the large number of people who are calling me, asking for advice and direction on how they should handle investment properties, and primary residences, that they are up-side down in. It really is a moral dilemma as well as a financial one - should one continue to pay a $5,000 mortgage and eventually file for bankruptcy by taking the high road? Or should one walk away once they decipher that they are in over their head, and they will be ruined financially if they continue to make the payments with borrowed money or by accumulating additional debt.

These are difficult situations to navigate and every circumstance is different and has it own special nuances. For me it really highlights how tenuous real estate investing is - when it is good it is very, very good but when it is bad it is horrid! A couple of years ago novice investors were making $100k with very little effort or strategy involved - those days are gone and real estate is not the hot topic it once was with people bragging about the huge equity gains in short periods or time.

The current market is confounding - financial markets gone awry, gas prices skyrocketing, the economy slowing down, and real estate inventories climbing at a pretty rapid pace, yet multiple offers are common and houses are certainly not being given away by the banks. But hang in there our day is coming - for those with cash give it 12-24 months and opportunities will present themselves, and those who have educated themselves and are poised to act will be able to create some nice gains and long-term wealth with good solid investments. Having patience is the difficult part right now...

The Art of the Deal

I am attending a seminar -"The Art of the Deal" in Reno this weekend with Jack Miller and Peter Fortunato presenting - two of the more creative minds in real estate investing will share how to create profits through the use of seller involved concepts (AKA creative financing) that will enable investors to buy, sell, manage, and trade properties without cash or credit. I have not seen them present before, but most of the heavy hitters that I know including many of our speakers have been trained by these guys. It is $330 for SJREI members to attend-not a sizable sum for three days training - it should be worth the time. I will update you with a post next week on how it goes.

Click here for Flyer

People spend thousands of dollars on seminars and do not use the information or are subjected to other "sales presentation" at the seminars which is all about increasing gross revenues. A lot of investors that I know are attending this one, so in addition to valuable information being shared at the seminar, it will be a great opportunity to network. I often find the information that I learn from other attendees is sometimes more useful than the actual presentation...Be leery of spending large sums of money on real estate education - there is lots of great material available at your local library.