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Lou Brown:
Hello everyone and welcome back to another Street Smart installment of our Group Q and A, and I’m very excited to report to you as we do a bimonthly basis what the market is doing and right now the market is tumbling. According to the Associated Press, Standard and Poor has reported that home prices tumbled by record amount. Yeah baby. This is good news. A wildly watched housing index released Tuesday showed home prices dropping by the sharpest rate ever in the second quarter. Standard and Poor’s Case US National Home Price Index tumbled a record 15.4% during the quarter from the same period a year ago. The monthly indexes also clocked in record declines. The 20 City Index fell by 15.9% in June compared with a year ago, the largest drop since its inception in 2000. The 10 City Index plunged 17%, its biggest decline in its 21 year history. No city in the Case 20 City Index saw year over year price gains in June, the third straight month that happened. However, the rate of single family home price declines slowed from May to June, a possible silver lining. The index creators said, “While this is no national turn around in residential real estate prices, it is possible that we are seeing some regions struggling to come back which has resulted in some moderation in price declines at the national level”, said David M. Blitzer, Chairman of the Index Committee at Standard and Poor’s.
Lou Brown:
Good day everyone and welcome back to another installment of our Street Smart Group Q and A where you have the questions and hopefully I have the answers. With 30 years experience I can guarantee you I have a good shot at it. To update you on the current market as I usually do on these Group Q and A calls let me just say hooray, hooray, the government has taken over fanny may and Freddy Mack. These were already ___(27) governmental agencies and over the years the government who had originated these corporations passed them on to private enterprise and remained in some limited amount of control over those two institutions. The government created these two institutions in order to have a free flow of money from the financial markets to back up people giving mortgages. So, it was the thing that created a tremendous housing boon in this country where it was difficult to get mortgages but when they created a back up buying unit to take those mortgages off the originators hands it created a tremendous growth in housing in this country. Now the government has taken them back and the government says wait a minute these private enterprise folks did the wrong thing. Which we all know they did. They bought mortgages they should not have bought. They allowed lenders to do all kinds of strange and exotic lending that they should not have done.
Lou:
Hi everyone. Welcome back to another installment of our group Q and A. Where you have the questions and I’ve got the answers. We’re going to have a great time today. We’ve got a lot of great questions. I want to start with _____.14. He’s got a question that I was going to cover in preview and I’m going to go ahead and read his question and give you the answers based on current market conditions. We got a lot of questions. This particular time about market conditions, so let’s do spend some time on this.
Lou Brown:
Hello everybody and welcome back to another installment of the Street Smart group Q and A. Where you have sent me some really interesting questions over the last couple weeks and I’m including those in today’s recording. I’d like to take this opportunity to always update you on my thoughts on today’s economy and how we fit into it. It’s been very interesting over the last few days that the government gets it as far as I’m concerned. They understand that today’s economy is so critical based on people’s psychologies. If you think about it psychology is really such a big part of the fear factor. What was the psychology of the big growth in real estate that oh I’ll go ahead and invest in real estate now and I’ll get some of this huge appreciation that’s going on. If you recognize how I teach you, we do not buy on appreciation; we do not sell on appreciation. Our whole game is based on a long term strategy and either making money today on a quick turn flip or long term on a hold. So we don’t look so much at future appreciation and big swings in the market. We just say slow and steady at the helm. Because the helm is really where the risk is and it’s also where the rewards are long term.
Lou:
Hello everyone and welcome back to another installment of our Street Smart Q & A where you have sent me a ton of questions that I’m excited to answer all of them for you. Before we get started, let me just recap what’s happened over the last couple of weeks in our economy, and tell you that I think a lot of things are on hold right now waiting for the elections. I don’t think it’s really going to make a difference who gets elected in terms of things turning around. I just think that a lot of things are on hold.
Lou Brown:
Hello everyone and welcome to another Street Smart Group Q and A where you send in a number of questions that I plan to get to today, but first I wanted to update you on the latest that I’ve heard on the neighborhood stabilization program. You know it’s amazing what our government is doing right now to try to stabilize the incredible housing market, and I say incredible because it’s great for us. We’ve got so much opportunity to put folks in homes and give them an opportunity to someday own that home with our program. Remember that our program really provides that, rather than just being landlords we give people an opportunity to someday own that home and as a result of our rent to own and owner finance programs it really attracts a whole different group of people with a whole different mindset. Better quality folks that are willing to buy properties in better neighborhoods. They’re willing to give us money down. They’re willing to take properties in as in condition and do work in order to earn credits. They’re willing to stick with us. They’re willing to make payments on time. They’re willing to take better care of their property and all these things come as a result of your offering a program that is desperately needed in today’s economy.
Question:
I’m in the middle of buying property that we intend on flipping. The house has an above-ground pool and it’s three-quarters full of stagnant water. What’s the best way to empty the pool so we can demo the pool?
Question:
Let’s start off with a management question this time and we hear from John Meddle, and John says: How is a promissory note for a lease option structured? For example, a $2000 note at 15% interest:
A: Would it be all due as a sum at the end of the length of the note, or would monthly payments be made?
B: Is it amortized?
Or,
C: How about a larger promissory note?
Answer:
Question:
What do you say to mortgage companies like Auquin when you know what the BPO came in at, and the mortgage tells you a different amount. On a deal I was doing with Auquin I knew for a fact that the BPO came in at $49,900, right where I wanted it to, and Aquin it came in at $81,000.
Question:
The reason for this note is to inquire how to handle this wonderful situation I have pending. We have a $269,000.00 house currently in the owner financing rent to owner category. We have an interested couple with $15,000.00 to put down and able to pay $1,500.00 per month. As you can see, the down payment fits our program perfectly and the $1,500.00 payment is about $500.00 to little to actually cover the payment on the underlying loan. Please advise how you would structure this one-year deal.
The couple Charles Sr. plans to cash out within 6 to 9 months once their credit issues are resolved. I was told that their son Charles Jr. has crummy credit and it has ended up on Charles Sr.’s credit report. Can credit wiz help straighten this out?
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