This is just one little gem that I found in Alan Brymer’s new eBook “The Stinky Market“.
Chock Full of Gems
In truth Alan’s book is full of little and big gems that make it an absolute “must-read” for every real estate investor.
The book was created as an answer to real challenges that face every investor who is confronted with a changing market. Adjustments have to be made, but how and who to ask? Real Estate Investment education is by and large too amateurish to equip the student for sailing the business boat through a tough storm.
No matter who you listen to - TODAY start to focus on business-building tactics. Build a real estate business that is a true business and stands alone. Don’t just create a job for yourself. And don’t mix your personal wealth and finances with your business.
Robert Shemin, the #1 best selling author of “How Come This Idiot Is Rich And I’m Not?” has contributed the forword - and he’s also in a most valuable bonus (like a free dowload needs a bonus…)
“FREE” Download
You may think “what’s the catch” every time you see or hear the word FREE. So let me fill you in on the catch. Alan’s eBook is truly free. All you have to do is give him your information (name , email etc.), and you can immediately unsubscribe from his list after you get the download. So it’s really free.
BUT: The book is a series of interviews. As such it’s an interesting read, but as you sit in front of your computer screen, or - if you like to print eBooks out - in your favorite armchair reading, you may feel that LISTENING to these interviews would actually be a lot cooler. You could use your iPod wherever you go - working out, driving in your car etc.
How is that a “catch”? Well, the catch is you CAN actually have the audio files of the interviews. But you’ll have to pay for them. And a special offer to get them right after you download the eBook will only be there for you to see one time. I thought I warn you of that catch so you can make up your mind right now - go for the truly free eBook and read all the information, or go for the audio…
OK, now go download the eBook right now. Robert Shemin’s bonus will go away after 11/14 and who knows if the eBook will actually remain free. Discover your gems and start adjusting and building your real estate business.
1 response so far ↓
1 Phil Collins // Nov 18, 2008 at 11:55 am
These are the opinions of Robert Sheridan, a Chicago-area real estate broker and developer.
TODAY’S MARKET
November 10, 2008
Fasten Your Seat Belts
From where we sit, it looks like it’s going to be a tough ride for the economy well into 2010—or later. It may not be a recession for all of that time. It may just feel like it. Either way, it’s not good news for anyone.
Here are the main culprits causing many of the hardships:
1. Foreclosures
• They’re already greater than almost all projections and they’re continuing. Here’s the problem: foreclosures depress prices; as prices fall, more homes go “under water” (in other words, the house is worth less than the mortgage). That fact alone has the potential to further increase foreclosures. In general, lenders have been behind the curve in their willingness to reduce the principal on existing home mortgages and amend those mortgages, thereby avoiding foreclosures and keeping the present owners in their homes and making monthly mortgage payments. A federal program is needed. The recently enacted plan (which is voluntary) will probably not work.
• Foreclosures drive down prices. Lower prices mean:
– More houses are now “under water.”
– The value of CMO (collateralized mortgage obligation) bonds drop further, causing more bondholder write-downs.
– Would-be buyers continue to sit on the sidelines because they believe prices will go lower—and so far they have been right.
• Based on the imbalance between sellers (more of them) and buyers (fewer of them), it will take lower prices—10-20% (depending on the market)—before supply and demand starts to even out. The risk now, as I see it, is that prices could fall even further because of the general state of the economy, lack of credit and the foreclosure issue.
2. The Credit Crunch
• The changes Congress made to the original Paulson proposal (outrageously arrogant and plagued by conflict-of-interest potential) to permit the Treasury to make capital investments in banks was a dramatic improvement over the first proposal. Unfortunately, even with the injection of significant taxpayer cash to the major banks, it’s not going to help soon. The banks will sit on the cash. They will lend, eventually, but eventually means that many small- and medium-sized companies will go bankrupt in the interim. We may see record-breaking bankruptcies with a sharp increase in unemployment. My guess: Unemployment will be in the 8-10% range.
• This is not exactly an environment in which to encourage home-buying, despite a return to affordable prices. Further, mortgages are still very hard to obtain. From reckless lending, with little or no down-payments required, we’ve now swung to a climate in which almost any excuse to NOT make a mortgage loan is good enough to say: NO. If the lender will make the mortgage loan, down-payment requirements are way up—20-40%. Tough.
• Need a jumbo loan (more than $417,000 in most markets)? Nearly impossible. If available, they’re very pricey with very high down payments required.
• Sanity (as well as fear) has returned to lenders. An 80%-of-loan-to-value mortgage used to be considered “normal and safe.” But not today, if the lender thinks prices are still falling. If prices drop another 10%, what was an 80% loan becomes an 89% loan. If prices drop 20%, what was an 80% loan becomes a 100% loan and lenders are not wading into those waters any time soon.
3. The Economy
• It’s amazing that some are still questioning whether we are in a recession. You know the saying “if it walks like a duck, and quacks like a duck…”.? Well, it applies to recessions, too. The real question is not whether we will have a recession, but how severe and long. My bet? Very severe and long. And that’s a best-case scenario.
• Because of bold action by the Fed, hopefully we will have avoided a depression, however, not everyone is convinced of that. I am somewhat amazed to hear financially savvy people ask: Is a depression just a bad recession? No. Not even close. A depression is like a vortex; it’s hard to stop the decline and therefore they last a long time. Today our unemployment rate is about 6.1%. In the Great Depression it was 25%! Consider of the implications of that statistic alone.
• It’s an incredible stroke of good luck that Ben Bernanke is Chairman of the Fed. In many quarters he is considered one of the outstanding students and economic authorities of the Great Depression, which is one reason why the Fed has moved with such bold and fast action.
4. Deleverging
• Six months ago a friend with a very long and successful track record as a stock portfolio manager, Neal Seltzer, asked: What did we learn from the LTCM (Long Term Capital Management) crisis (ten years ago) and their 30:1 leverage? His answer: Nothing! We, and our economy, will now pay the price for the 30+ times leverage ratio of the investment banks such as Bear Stearns, Merrill Lynch, Morgan Stanley, et. al.—the unregulated part of our banking system. What will that leverage shrink to? My guess: A good bit under 20 times capital. Businesses will suffer. The consumer (already tapped out before this recent crisis) will suffer. Deleveraging will be a pall on the economy and growth for several years.
Going Forward
All of this will make for a difficult period measured in years, not months, because of:
1. Falling housing prices, driven in part by a record-breaking number of foreclosures.
2. Major contraction of credit, including a near-freeze on credit for now, but and continuing very tight for months to come. How many months? Who knows? It This will take its toll on small- and medium-sized companies and the consumer. A period of very high bankruptcies lies ahead, causing big increases in unemployment.
3. A difficult economy. We are in one of the more difficult post-WWII recessions. It will be longer rather than shorter. No quick fix is likely.
4. Deleveraging will make for a sounder financial system, but it will be painful getting there. It will take several years. Clearly, this will prolong the recession and flatten the recovery.
It bears repeating: Fasten your seat belts.
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