How To Get Paid Big Dollars And Work Where You Want And When You Want AND RETIRE EARLY

By Ted Thomas

This Will Knock Your Socks Off!

 2 Distinct Investment Opportunities

#1 Tax Lien Certificates – One of the Safest Investments In America Today!

When it comes to real estate investing, there is much to be learned and a lot of money to be made. The prudent investor knows that it is impossible to learn about all facets of real estate investing at once and instead focuses on a certain kind of purchase or investment, works to make the investment profitable, before moving on.  One of the most unknown but highly profitable types of real estate investments is investing in tax lien certificates.

Purchasing a tax lien certificate is a fantastic way to build wealth and generate revenue.  This investment vehicle is a very real way in today’s economy to work towards financial independence.  However, you must know what happens when you purchase a tax lien certificate and how it works in order to be successful. Never jump into a real estate investment opportunity without proper education.

A tax lien certificate is offered by a local county government who is looking to collect on delinquent property taxes.  The certificate, when it is offered, becomes the first lien on the property and gives you, the investor, the opportunity to collect on the tax payments that are owed.

First, it is good to work in tax lien certificates if you do not have a lot of working capital to invest.  This is also a great investment tool if you are looking for a guaranteed return on your initial investment. The returns on tax lien certificates can be up to 16%, 18%, even 36%.  A tax lien certificate is typically a solid addition to any investment portfolio. Tax lien investments are one of the safest investments found in America today.

In order to purchase a tax lien certificate, as an investor you must find out the terms and conditions of the public tax auction in the county where you are interested in doing business.  Keep in mind, tax lien terms and conditions vary widely by county and state, so in order for you to be properly educated over bids, interest rates, terms, collection, and other matters, you must know what the county government requires. This may sound tricky but with the proper training it’s actually quite easy and extremely profitable. This business can be done online from anywhere including your kitchen table or home office.

This is a passive investment, perfect for the newcomers to real estate investing. Once you get a tax lien certificate you just sit back and wait for the profit check to come in the mail.

#2 Properties for Pennies – Mortgage Free

Tax deeds or tax defaulted properties are sold in about half the states in the US. Many times you can buy these properties for low prices because a great value because you are bidding on the property at a tax deed auction.

Here’s the simplified version of how tax deed sales work. Each homeowner must pay their real estate tax to the local government jurisdictions.  When a homeowner does not pay their county mandated taxes on their property, the county will confiscate the property and offer it for sale at a government tax defaulted property auction for only back delinquent taxes.  The county must do this because the county must pay for important services like local police, fire, schools and infrastructure, without the tax money they cannot do this and the local government would be in a world of trouble.

During a tax deed auction, property is usually sold for starting bid back tax plus any fees, interest charges, and court costs. Property taxes are only a small percentage of the market value and because of this investors who purchase a tax deed buy the full property rights for just pennies on the dollar.

A tax deed sale must be announced publicly and by law and in most instances are sold to the highest bidder.  When you are the winner at a tax deed auction you actually own the property and you own full legal rights to the property that very same day without any mortgages, liens or deeds of trust.

Of course this is a real estate investment and with any investment there can be risks.  It is important to become educated and always do your own due diligence before purchasing at the tax deed sale to minimize your risk.

You’ll want to make sure you research the property values before bidding on any tax deed property.

There are many ways to locate tax lien certificate auctions and tax defaulted property auctions. You can search Google, go directly to the local county government websites or call local county government offices. Having experience on your side can make a big difference in the amount of time it takes to get off and running in this investment opportunity. Ted Thomas and his team have been teaching investors how to do this business for over twenty-five years. Ted Thomas has helped thousands of students become successful tax lien and deed investors.

 

Ted Thomas

Ted Thomas is a Florida-based author and publisher who specializes in tax lien certificate and tax defaulted property investments. Visitors to his website www.tedthomas.com will find 3 must see FREE instructional videos. No credit card required. The video lessons will give you information about government tax defaulted real estate which is sold at public auctions starting bid back taxes which could be 10 cents to 20 cents on the dollar. You’ll also learn the secrets of tax lien certificates which generate returns of 16%, 18%, up to 36%. Go to www.tedthomas.com for more information.

Kathy’s 2019 Housing Forecast

By Kathy Fettke, Co-CEO of the Real Wealth Network

Welcome to my 2019 Housing Forecast! I’ve been doing these predictions for many years starting well before the housing crisis, when loans were easy and home prices only went “up.”

I was a mortgage broker back then, and knew something was very wrong in the lending world. I couldn’t understand how it made sense that I was able to give a loan to just about anyone… and I got my answer in2008 when the housing market crashed.

Since then, it’s become my passion to understand the politics behind economics, so that I’m never caught off guard again. Please note:these thoughts are my opinions only. and not to be construed as financial advice.

My theory on the housing market boils down to these three factors:

Real estate values are tied to jobs.

Jobs are tied to the economy.

The economy is tied to Federal Reserve policy and government regulations.

That’s a very simplified version of the housing market machine, but decisions by the Federal Reserve and the government can have a torpedo-like impact on real estate. So if you take a  close look at what’s happening with the central bank and government policy, you might get a clue as to what is coming.

The Federal Reserve

The Federal Reserve attempts to regulate the economy by controlling the money supply. When there’s more money flowing, prices tend to increase. When there’s less liquidity, less money circulating, prices tend to decline. One of the ways the Fed controls the circulation of money is by raising or lowering the overnight lending rates –basically what it costs banks to borrow money and lend it out.

The Fed lowered these short-term interest rates to near zero levels after the Great Recession, in an attempt to jumpstart a flat-lined economy. It also bought bonds to keep interest rates low, and launched quantitative easing programs that essentially created money “out of thin air” for circulation.

It worked! With trillions of new, freshly minted dollars circulating, the economy came back to life, and a decade later, is booming.

But, a boom can also lead to a bubble, and bubbles burst. So the Fed regulates booms by lowering interest rates. One sign of an overheated economy is runaway inflation, so the Federal Reserve set 2% inflation as a benchmark for raising rates. Inflation hit that 2% mark in 2015, so the Fed began to reverse it’s easy money policies by raising rates.  Since then, the Fed has raised rates nine times, including four rate hikes in 2018 alone.

This attempt to slow things down also worked!

It’s not surprising. Higher rates make everything more expensive, which can curb borrowing and spending. This effectively pulls the throttle on the economy and slows down inflation.

Plus, there may be another reason why the Fed has been steadily raising rates. The economy has been booming for a decade now, and many economists believe it’s now near its peak. Some are predicting a recession by 2020. One of the Federal Reserve’s arsenals for turning around a recession is to lower interest rates. But if rates are already low, the Fed has nowhere to go. It has to go up first so it can go down again in the future. Therefore, some say the Fed has been raising rates so that they can lower rates again next year.

Mortgage Rates

Higher short-term interest rates makes it more expensive to buy cars,take out equity loans, and use credit cards. They also make variable-rate mortgages higher, but they do not have a direct influence on long-term mortgage rates. In fact, in December when the Fed raised rates for the 4th time, long-term mortgage rates actually went down. Why?

Long-term rates follow the bond market more closely than the Fed Fund rate. When investors are confident, they invest in the stock market. When they are fearful, they seek the safety of bonds — specifically the 10-year Treasury note. Those same investors tend to flock to the safety of mortgage-backed securities. When more investors are buying, prices decline. So when there’s more fear in the market, long-term interest rates tend to soften.

The Fed’s December rate hike rattled the stock market, sending anxious investors to the safety of bonds. As a result, stocks took a sharp nose dive in December. More purchasers of bonds and mortgage-backed securities effectively lowered long-term mortgage rates. This could help boosts home sales in the Spring.

The Federal Government

When it comes to the federal government, we’ve seen major policy changes that are influencing the housing market. Several are contained in the massive tax reform package that cut taxes and changed the rules for deductions. By lowering the corporate tax rate to 21%, businesses have more money to reinvest and expand their workforce, which puts more people back to work.

One of the biggest benefits for real estate investors is the new pass-through rule that allows people with LLCs and similar business operations to take a 20% deduction. So there are big benefits for all those Mom and Pop landlords who operate as LLCs. The new rules also preserve the highly-prized 1031 exchange, which was at risk of being eliminated. The new Opportunity Zone tax break program is also part of that tax package.

Homeowners didn’t make out as well. They lost deductions for things like vacation homes and large mortgage payments, making homeownership, for some people, more expensive.

Low Unemployment

As I mentioned, those tax cuts were designed to lower the unemployment rate, which is now so low that it’s actually unhealthy for the economy. The data shows that we have more open positions than people looking for jobs. When there’s a shortage of workers, employers have to pay more. That extra expense is then passed on to consumers in the form of higher prices which contribute to inflation. If we start seeing higher prices, the Fed will be inclined to raise those short-term interest rates, which can also trigger other repercussions, like that stock market volatility.

What we need is workforce growth right now — not job growth. And this is a critical element for today’s economy because our workforce is actually shrinking. The U.S. birthrate has dropped to a 30-year low and continues to fall. Baby Boomers will be retiring in massive numbers, leaving more open positions in their wake. And there’s the debate over immigration, and the value of immigrants for jobs like farming and construction.

Economic and Housing Repercussions

So here are some of my predictions for 2019:

The GDP will slow down to around 2% from 3%, as the effects of those tax cuts wear off. High housing prices and interest rates could also help slow growth, along with trade tensions, domestic politics, and the current pullback by China. But, I don’t think we’ll see a recession, this year.

Unemployment will rise slightly due to a changing workforce that includes less corporate dollars for new jobs. An unemployment rate of4 to 6% is considered healthy, so a slightly higher jobless rate could be good for our economy.

Mortgage rates will remain relatively low. The Fed is expected to hold off on rate hikes during the first half of the year as it reassesses the economy. If we see another rate hike or two, it probably won’t take place until later this year.

Consumer debt will increase because it’s now more expensive to borrow money.

Demand for rentals will remain strong because homeownership has gotten more expensive.

Return to Normal Gains

We’ve been so spoiled over the last 10 years by double-digit gains. Investors need to start expecting more normal returns. Syndications will go back to 6% preferred returns, with an equity kicker on the back end that would bring the IRR to just over 10%. Unless you find that home run — like our development in Costa Rica, where we got the land cheap and received entitlements quickly such that we were able to get our glamping resort up and running, effectively lowering holding costs. We are expecting investors to receive an 18% return on that one. But these types of deals will be fewer and further between.

If you’re expecting another 2008 housing meltdown where you can pick up properties for pennies on the dollar, you may be waiting a long time.

There is No “One” Housing Market

We also have to remember that the national housing market isn’t just “one” housing market. Instead, it’s made up of thousands of diverse housing markets. The key to higher returns is finding emerging markets — those with job and population growth, but with real estate values still below their peak. These types of areas give investors both cash flow today and a strong chance of appreciation in the future — a win/win, whether a recession is coming or not.

What happens when we do get hit by another housing recession?

We have to remember, today’s housing scenario is very different than in 2008. Back then, loan underwriting was loose. Today, it’s still very tight. This time, most homeowners have equity in their home. Back then, they did not. Today, homeowners are locked into historically low interest rates. It would be much more expensive to sell or to rent, so they will hold onto their homes. Plus, Airbnb wasn’t prominent in 2008. Today, people can rent out rooms in order to make house payments.  That brings me to my 7th and final prediction:

The housing market will remain on solid ground although price growth will be slower.

The recent slide in mortgage rates is corresponding to more activity from home buyers. That’s an indication that by keeping interest rates about where they are now, the housing market will thrive. We may see some turmoil at the high end of the housing market due to things like the tax law and stock market gyrations, but the housing market as a whole will likely see growth in more affordable markets.

The trick is to find the right markets. Real estate investors want to be in growth markets. And there are several good markets where that makes sense. The Real Wealth Network has identified 15 markets that can provide a good return on your investment. Some are better for appreciation. Others are better for cash flow. We have more information about those markets at our website www.realwealthnetwork.com

 

Kathy Fettke

Kathy Fettke is Co-CEO of Real Wealth Network and best selling author of Retire Rich with Rentals. She is an active real estate investor, licensed real estate agent, and former mortgage broker, specializing in helping people build multi-million dollar real estate portfolios that generate passive monthly cash flow for life.

With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal. She was also named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row.

Kathy hosts two podcasts, The Real Wealth Show and Real Estate News for Investors — both top ten podcasts on iTunes with listeners in 27 different countries. Her company, Real Wealth Network, offers free resources and cutting edge education for beginning and experienced real estate investors. Kathy is passionate about teaching others how to create “real wealth,” which she defines as having both the time and the money to live life on your terms.

 

 

TERICA KINDRED: This Girl is ON FIRE!

By Karen A. Walker

For Terica Kindred it’s not about real estate. It’s not even about money.  For her, it’s all about freedom. Real freedom—the kind you can own…. and share.

Girl On Fire

She bought her first property, a four-plex, at age 20. By age 23, Terica Kindred owned 10 rental properties. By 24 she was a millionaire.

But it wasn’t smooth sailing from there.

At age 30, Terica lost 1.2 million, thanks to what she pithily refers to as “big drama.” Misplaced trust in a construction manager whom she realized, too late, was over his head in his responsibilities, triggered a serious loss of her own funds.

Yes, that was devastating.

But, ultimately, no worries. She’s got this. Terica has a broad view of living, and it includes ongoing learning, serving, growing and always improving.

For Terica, when you hit the wall, it’s a learning opportunity. Dust off your feet, learn from your mistakes, head in a new direction, and move on.

In a nutshell, Terica and Nike share the same motto: JUST DO IT.

Start

Born and raised in south central Los Angeles, Terica earned a computer science degree from the University of California, Irvine.

Entrepreneurial to the core, while in college she and more than 20 student colleagues developed an early computer game for mobile phones. They were going gangbusters, things were starting to take off and eventually the project needed Venture Capital (VC) funds to grow. It was an exhilarating journey… and then, suddenly, it died.  VC funders at the time just couldn’t imagine anyone playing games on their mobile phones. Yes, really!

The short-sightedness of deep-pocket investors was a significant learning moment for Terica. Lack of funding was a limitation.  Depending on someone else for funding could destabilize the trajectory of a project, or even of a life, her life.

 No Limits

Terica wanted no part of funding limitations in the future, so when the opportunity to work for Deloitte in Orange County, California, opened up, she took it. It was a good company and a good job in the field of tech solutions. But her dream was bigger than any corporation could hold.

That’s when real estate became a passion.

“I’m a landlord’s daughter,” says Kindred when asked what sparked her interest in real estate.

“I love freedom, and real estate was an easy way to get that. I quit my job before I turned 30 and earned enough residual income to cover my life using real estate. I love that!”

Although she grew up around real estate, she admits her father has a different approach from hers.  She focuses on flipping, and she’s become an expert at thoroughly having done and understanding every aspect of the business, including construction, managing costs and delivering what buyers want. Her father sighs. As she explains, “my father is a buy and hold guy. He thinks what I do is crazy!”

Most people, however, wouldn’t agree with her father. Instead, they might say she’s a positive force to be respected. No stopping her. Full steam ahead, getting wiser and better every day.

Her mother would agree on this last point, calling her daughter “unstoppable” and even becoming her first investor, with ongoing investing as she sees fit. The pursuit of freedom, it seems, is contagious.

Proof is in results

Terica’s acquired-by-doing expertise in identifying and flipping properties in more affordable locations than her native California, has paid off.  Big Time.

She first focused on building a strong passive income to replace and exceed her corporate income.  Flipping properties prudentially enabled her to cull profits to purchase rental properties that paid a monthly, residual income and provided significant tax breaks.

Terica also employed her computer science and internet marketing savvy to grow her business in ways most real estate entrepreneurs never consider, let alone master.

Moonlighting in real estate while holding down a steady job, Kindred was able to quit her job as soon as she was earning more in passive real estate income than in her corporate paycheck. It’s a strategy she advises to others.

No slowing down

In 2010 she relocated to Atlanta and hasn’t looked back since. Nor has she slowed down.

Amid increasing real estate deals and new ventures, Terica managed to convince her then-boyfriend, Jasen, who had lost his job at the time, to stop looking for a new job and to instead join her on the freedom path. He was stunned…at first. Then he took a deeper look and decided to test it out.

Turned out, Jasen liked the adventure and the profitable results. He became an integral part of the business, and of Terica’s life. They were married more than a year ago and welcomed their first child the end of last year.  Talk about adventures!

Full Circle, Giving Back

Now less than 10 years after quitting her corporate job, Terica’s third book, My Freedom Blueprint, is hot off the press.  She considers the book, and her system, a gift she’d like to share with others.

Not surprisingly, Terica penned the book while pregnant. For her it was fairly easy writing since she continues to follow and live what she advises to others.

MyFreedomBlueprint.com conveys the gist of Terica’s real estate investing strategy and options.  It includes strategies for buying, fixing and flipping properties, investing in high-yield, low-taxed income properties, lending funds to other investors for double-digit returns, wholesaling properties for quick cash and much more.

None of it evokes cheesy gimmicks or impossible promises.  Quite the opposite.

Terica’s newest venture – My Freedom Blueprint – aims to build a mutually profitable community of vetted, trusted investors who can and will help each other achieve their own freedom dreams.

For Terica, ultimately, it’s still all about freedom!

To learn more or to reach Terica, go to MyFreedomBlueprint.com.

 

Karen A. Walker is a seasoned, award-nominated journalist with a passion for real estate.

Communicating with the Executor: Tips for Working Your Probate Leads

By Kristine Gentry, Ph.D.

While many real estate investors say probate leads are one of their best lead sources, there are still many real estate investors who are reluctant to get started in this business. One of the common concerns we hear from potential probate investors is that they are unsure of how to communicate with the executor or personal representative. As a refresher, probate leads are potential seller clients who inherit properties. They are often highly motivated to sell the inherited property for a variety of reasons.

If concern regarding how to communicate with the executor is holding you back, read on for some tips compiled from the experience of expert probate investors.

The first step is to determine your contact strategy.

We recommend mailing a formal letter as your initial point of contact, followed by similar letters or postcards every other month. The letter should be sympathetic. The reader has most likely recently lost a loved one and is in the middle of a very difficult time in his/her life. We recommend acknowledging the loss and the stress of being an executor. The letter should be reflective of you and your style but focused on the recipient. That is, if you are very formal, your letter should reflect that. However, if your style is more casual and laidback, it is alright to reflect that too. You do not want to present something that you are not in your mailings. Your message should reflect that you are here to help during this difficult time. Highlight that you can make the selling of a house easy, fast, and relatively painless.

The second step is to have a conversation with the executor.

Ideally, the executor will initiate the phone call after receiving your mailer. However, if you are not getting return calls, you may want to make phone calls yourself. They key to these calls is to be prepared to listen. You will want to let the executor do most of the talking and only guide the conversation with your questions. Many executors are in a particularly tough time in their life, and they need someone to talk to. If you can listen, you are providing something the executor needs, and you are on your way to developing the rapport that will be necessary to move this potential transaction forward.

The third step is to continue to build that relationship with the executor.

Understand the unique situation of the executor and determine if you are able to offer assistance in any way. Often times the executor does not live near the house. Offering to run by and check on the house, pick up the newspaper, or even mow the yard can be a huge help to the executor.

Once you have built a rapport with the Executor, you are well on your way to determining if this property is of interest to you, and you can proceed as you would with any other opportunity.

Persistence is Key

In the scenario outlined above, you have contacted the executor and have the opportunity to build a relationship. It takes time and persistence to actually be in this position. You will not receive a call from many of your leads. They simply are not interested in your help for a variety of reasons. However, if you continue to work the leads and are continually adding new leads to your pipeline, you will have success.

Having access to leads on a regular basis means that you will be able to find success in probate real estate investing.  With time, patience and a carefully thought out business plan, you can be sure that having these leads will make an enormous difference in your ability to purchase homes and other properties at a favorable price. The key to success in probate is making sure you buy leads from a high-quality and trusted provider. Then, you must reach out to the executors and continue to do so for a minimum of six months. This allows you time to truly work probates and to patiently await those executors who do not want to sell immediately.

Simplify Your Business

Are you looking for a reliable lead source for all of your probate investment needs?  The experts at US Probate Leads offer the highest quality leads available on the market today.  Our certified lead specialists visit nearly every courthouse in the United States, constantly evaluating new probate filings and making those available to our investors.  In addition to our premium lead service, we also offer services that can keep you informed on the newest trends in the market. We can also assist you with your mailers to help you easily reach out to executors. Contact our office today to learn more about our lead service, mailing service, and e-books.

Kristine Gentry, Ph.D.

VP of Innovation

US Probate Leads

Web Site: www.usprobateleads.com

 

 

Interest Rate and Home Price Swings

By Rick Tobin

Historically, the #1 reason why home prices generally rise, remain flat, or fall is directly related to the latest 30-year fixed mortgage rates. This is true because the vast majority of home buyers need third-party funds from banks, credit unions, or mortgage professionals to purchase and sell their homes to new buyers who also usually need bank financing to cash the seller out.

Over the past 10 years, a very high percentage of mortgage loans used to acquire residential (one-to-four unit) properties have originated, directly or indirectly, from some form of government-owned, -backed, or -insured money, such as FHA (Federal Housing Administration), VA (U.S. Department of Veterans Affairs), USDA (U.S. Department of Agriculture for more rural properties), Fannie Mae, Ginnie Mac, and Freddie Mac in both the primary and secondary markets. Most of these same government-assisted mortgage programs allow buyers to purchase properties with as little as no money down to just 3.5% down payments. Many times, the seller and family members can credit the most or all of the closing costs or down payment requirements so that the buyer really has no money invested in the property.

To the buyer, the most important part of the purchase deal is related to qualifying for a very low 30-year fixed mortgage rate and an affordable monthly payment. When the interest rates are too high, then fewer buyers can qualify for properties. During these higher rate time periods, home prices typically stay neutral or fall in price as seen during past periods of deflation like back in the mid-1970s. As such, almost all “boom” (positive) or “bust” (negative) housing cycles are directly related to low or high rates of interest, so they tend to correlate or go hand-in-hand with one another.

Interest Rate History: 1971 – 2018

Between 1971 and 2018, 30-year fixed-rate mortgages have ranged between a low of 3.31% in 2012 to a high of 18.63% in 1981. Fixed-rate mortgages are still hovering near historical lows at present and in recent years. An estimated 60%+ of mortgage holders are paying fixed-rates on their residential owner-occupied properties somewhere within the 3.00% and 4.90% rate ranges as of 2015, per data released by Freddie Mac.

During this same 47-year timespan (1971 – 2018), the average 30-year fixed-rate mortgage was near 8.08%. This rate is almost double the average 30-year fixed-rate mortgage loan between 2010 and 2019. Because the ease of qualification and the affordability of mortgage loans is typically the most important factor behind a booming or busting housing market, the more recent 3% to 5% rate ranges over the past 10 years has helped fuel a stronger housing market with rapid appreciation rates as well.

Most often, owner-occupants are using some type of a government-backed or insured mortgage loan and / or secondary market investor to purchase their properties. These loans include FHA, VA, Fannie Mae, and Freddie Mac. The typical down payment ranges used to purchase these properties are very likely to average somewhere within the 0% to 3.5% down payment range. Many times, the seller provides a credit towards most of the closing costs and / or another family member assists with the down payment as a gift of some sort.

If so, a very high percentage of owner-occupied home buyers have purchased their homes with little to no money down out of their own pocket prior to qualifying for tax-deductible mortgage payments that were less than a nearby apartment to lease. Additionally, these same homeowners have boosted their overall net worth after the vast majority of residential properties have appreciated at significant annual percentage rates. In some cases, homes have double in value in less than five to seven years due to the combination of affordable mortgage loans, easier mortgage underwriting approval processes, and increasing demand for properties to purchase.

Source: Freddie Mac’s Primary Mortgage Market Survey (PMMS)

The Consumer Debt Anchor

With home mortgages, the primary collateral for the loan balance is the home itself. In the event of a future default, the lender can file a foreclosure notice and take the property back several months later. With automobile loans, the car dealership or current lender servicing the loan can repossess the car.

Homeowners often refinance their non-deductible consumer debt that generally have shorter terms, much higher interest rates, and no tax benefits most often into newer cash-out refinance mortgage loans that reduce their monthly debt obligations. While this can be wise for many property owners, it may be a bit risky for other property owners if they leverage their homes too much.

With credit cards, lenders don’t have any real collateral to protect their financial interests, which is why the interest rates can easily be double-digits about 10%, 20%, or 30% in annual rates and fees, regardless of any national usury laws that were meant to protect borrowers from being charged “unnecessarily and unfairly high rates and fees” as usury laws were originally designed to do when first drafted.

Zero Hedge has reported that 50% of Americans don’t have access to even $400 cash for an emergency situation. Some tenants pay upwards of 50% to 60% of their income on rent. A past 2017 study by Northwestern Mutual noted the following details in regard to the lack of cash and high credit card balances for upwards of 50% of young and older Americans today:

* 50% of Baby Boomers have basically no retirement savings.

* 50% of Americans (excluding mortgage balances) have outstanding debt balances (credit cards, etc.) of more than $25,000.

* The average American with debt has credit card balances of $37,000, and an annual income of just $30,000.

* Over 45% of consumers spend up to 50% of their monthly income on debt repayments that are typically near minimum monthly payments.

Rising Global Debt

According to a report released by IIF (Institute of International Finance) Global Debt Monitor, debt rose to a whopping $246 trillion in the 1st quarter of 2019. In just the first three months of 2019, global debt increased by a staggering $3 trillion dollar amount. The rate of global debt far outpaced the rate of economic growth in the same first quarter of 2019 as the total debt/GDP (Gross Domestic Product) ratio rose to 320%.

The same IIF Global Debt Monitor report for Q1 2019 noted that the debt by sector as a percentage of GDP as follows:

  • Households: 59.8%
  • Non-financial corporates: 91.4%
  • Government: 87.2%
  • Financial corporates: 80.8%

Rate Cuts and Negative Yields

As of 2019, there’s reportedly an estimated $13.64 trillion dollars worldwide that generates negative yields or returns for the investors who hold government or corporate bonds. This same $13.64 trillion dollar number represents approximately 25% of all sovereign or corporate bond debt worldwide.

On July 31, 2019, the Federal Reserve announced that they cut short-term rates 0.25% (a quarter point). Their new target range for its overnight lending rate is now somewhere within the 2% to 2.25% rate range. This is 25 basis points lower than their last Fed meeting decision reached on June 19th. This was the first rate cut since the start of the financial recession (or depression) in almost 11 years ago dating back to December 2008.

There are three additional Federal Reserve two-day meeting dates scheduled for 2019 that include:

  • September 17-18
  • October 29-30
  • December 10-11

It’s fairly likely that the Fed will cut rates one or more times at these remaining 2019 meeting dates. If so, short and long-term borrowing costs may move downward and become more affordable for consumers and homeowners. If this happens, then it may be a boost to the housing and financial markets for so long as the economy stabilizes in other sectors as well such as international trade, consumer spending and the retail sector, government deficit spending levels, and other economic factors or trends.

We shall see what happens between now and year-end in 2019 and beyond.

 

Rick Tobin

Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.

Is It Honest to Use A Land Trust?

By Randy Hughes, Mr. Land Trust

I have been using Land Trusts for over 40 years in my real estate business, but every now and then someone will challenge me as to the purpose and “honesty” in using a Land Trust to hold title to real estate investments. Let’s clear the air.

Recently I was talking to a real estate investment club owner about speaking to his club regarding land trusts. He said, “We do not believe in using Land Trusts because they are dishonest.” He then went on to explain how someone had come to his club and spoke about Land Trusts and that led him to believe that the use of a Land Trust was for deception and taking advantage of people.

I told him that I was sorry that he had been misinformed about Land Trusts and that he should reconsider their use and benefits. I went on to review with the club owner why it is important to NOT have your name in the public records as owner of real property:

1. A group of investors may be purchasing several properties for a special purpose and it may be that the desired result can be best accomplished if the objective is not made public.

2. Co-owners might desire that the interest of each beneficiary must be kept private.

3. An individual owner might not want to be hassled with inquiries regarding the property.

4. A real estate investor might not want his competitors to copy his acquisition techniques.

5. Real estate investors do not want their tenants to know they are the “owner” of the property (helps with day-to-day management and lease renewal negotiations).

6. Co-beneficiaries want to know that a lien or judgment or divorce of one beneficiary will not affect the title to the property.

7. Successor Beneficiaries avoid probate and out of state Beneficiaries can avoid probate in multiple states and other legal issues upon death of the Primary Beneficiary. This creates a smooth transition of succession.

8. A group of heirs can inherit a property held in a land trust with ease of management (by a Director) and no need for a partnership agreement or a partnership tax return

9. Co-operative housing corporations may elect to hold title to their land and buildings in a land trust. They could then issue beneficial shares to their residents in place of stock certificates-simplifying control and record keeping.

10. When a Trustee of a Land Trust signs the mortgage (that gets recorded in the county court house records) the debt will not show on the borrower’s (the Beneficiary) credit report.

Land Trusts have been used by American citizens for over 100 years for good reasons. There are many legitimate reasons to use a Land Trust for privacy and asset protection. No one will protect your assets like YOU will. Learn all you can now because “old and cold” matters. Ever since 9/11 it gets harder every year to be private and protect your assets. Do it now! Don’t delay!

I encourage you to learn more by going to my FREE online training at: www.landtrustwebinar.com/411  and text “reasons” to 206-203-2005 for my free booklet, “Reasons to Use a Land Trust.” You can also reach me the old fashion way by calling me at 866-696-7347 (I actually answer my own phone unlike most other businesses in America today).