All Forum Posts by: Carlton Ellis

Originally posted by Matthew Paetz:

I am curious as to what you all think. I am assuming I am not the only newbie interested in hearing everyone's opinion on gaining credibility.

I am fairly new to investing, and I am 25yrs old. I spend a lot of time with many other investors on a regular basis, and I want to know what some of the best ways are to gain respect among seasoned investors.

Real Estate is no different than any other buinsess. Say what you are going to do and do what you are going to say. Make sure you back up your words with actions. Doing the first deal is always the hardest but that is part of the learning process. In my way of thinking there are two parts of real estate one is the number crunching, legal, and knowing the particulars about what makes a good investment. The other part is the people side. How you manage your relationships with other investors, real estate agents, bankers, appraisers, contractors and other people you come into contact with is VITALY IMPORTANT. The caliber of those relationship is actually a form of advertising and whether you realize it or not is its own form of public relations.

Just treating people honestly and with courtesy, dignity and respect will open a lot of doors for you.

Originally posted by Patrick D.:

Hello everyone,

I am a newbie on this sight and fairly new to real estate investing.

With the dollar shrinking and the government spending at alarming rates, what does the future hold in real estate?

If our government does not stop this crazy spending, and cut the 12 trillion dollar deficit (it does not seem they are slowing down anytime soon) the dollar is going to be worthless and our country will be on the brink of bankruptcy.

Just looking for some thoughts on this in regards to real estate.

Look at this this way. A cheaper dollar compared to other currencies increases the demand for U.S products as they become relatively less expensive compared to other countries. On a short to medium term that's stimulative to the economy. It also makes real estate more attractive to foreign buyers. The medium to long term prognosis for the dollar is that it's doing to get cheaper unless the Fed substantially hikes interest rates. That is not likely to happen while the economy limps along.

Also the Federal goverment is strung out like a crack addict on money it receives from foreign buyers of U.S Bonds. At some point that is going to stop and when it goes that is going to be another financial crises for the U.S economy. Throw on the rising deficits and the U.S. economy is like a meat eating, alcholic, smoker. At some point your bad habits catch up with you. Unless drastic steps are taken by the government to right its fiscal house the future looks bleak. The problems is nobody has the guts or the political will to do the dirty work necessary to put the government's fiscal house in order.

Quite frankly the U.S public is for the most part totally unaware of just how bad things could get if these problems are not addressed.

Originally posted by Rich Weese:

Read article below

What a two faced secretive jerk. I haven't been a real fan of any of the recent Presidents, but obama makes me sicker every time I see or have his dribble come ount of his mouth. I've been out of country for a week, so maybe this has been posted earlier. It scares me to wonder how many "untransparent" deals this administration is involved in. I continue to believe the Illinois slime has moved into the back rooms of the White House as aides to obama.
Too many coincidences with this guy. Here is another one. obama appoints a new judge, Mattheson from utah. The NEXT day, obama invites Representative, Scott Mattheson to the White House to chat(one of blue dog dems, I believe. I guess just another "coincidence". I'm really tired of them and worried where he is truly taking the U.S. Rich


http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html

How many deals did the Bush Adminstration cut with Halliburton and it's subsidaries where Dick Cheney just happened to be the CEO before joining the Bush Adminstration?

At this stage of the game most polticians either Democratic or Republican are in the pockets of corporations.

The people that offshore drilling benefits are the companies doing the drilling. Oil is sold on an open international market. The major oil drilling companies are NOT hurting for money. There are plenty of international contracts out there right now and to be honest they are far more lucrative than any offshore projects off american coastal waters.

I'm going to make suggestion and it may sound harsh. But you might want to take some time and get a better understanding of real estate law, titles and deeds before you just jump in and start doing real estate transactions. The result of not knowing these things could be detrimental financially and have legal ramifications as well. Bigger Pockets is a great place to start but searching around the web and consulting with a real estate attorney are also advisable.

Originally posted by Nick G:

Come to Michigan we could use the tourism dollars....plus there are some nice spots up here!

I just moved to Michigan from Texas and this state is BEAUTIFUL. Michigan has a tremendous amount of scenic beauty from the coast along Lake Michigan to the Upper Penninsula. Michigan has the largest state forest system in the country and you are never too far from a natural body of water. Not to mention the many golf courses and festivals that take place in towns throughout the state during the summer. If you are going to sell the state then sell because it's a grogeous place to be especially if you enjoy the outdoors not because the state needs the money (Granted I know it does but that is not really a compellimg factor to get folks to come.)

A short sale doesn't necessarily completely get the homeowner off the hook in terms of paying off whatever is remaining on the original mortgage after a short sale. Below is a recent story on CNN.com:

As terrible as it is to lose your house to foreclosure, at least it's a relief to put your biggest financial headache behind you, right?

Wrong.

Former homeowners may still be on the hook if there's a difference between what they owed on their mortgage and what the bank could sell it for at auction. And these "deficiency judgments" are ticking time bombs that can explode years after borrowers lose their homes.

It can even happen to people who got their bank to approve them selling their home for less than it is worth.

Vanessa Corey, for example, short sold her Fredericksburg, Va., home in April 2008. She and her husband built the house in 2004, but setbacks, both personal (divorce) and professional (housing bust), made it impossible for the real estate agent to keep her home. So she negotiated the short sale and thought that was the end of it.

"My understanding was that the deficiency was negotiated away," she said. "Then, last November, I got a letter from a lawyer telling me I owed my lender $65,000. I had to declare bankruptcy. There was no way I could pay it."

Many homeowners are now in the same boat. And not just those who took out bigger loans than they could afford or who did so called "liar loans" where they didn't have to verify their income.

Because of falling home prices, borrowers who always paid their mortgage but who have run into unforeseen circumstances -- like unemployment or a job transfer -- can no longer sell their homes for what they owe. As a result, they are being forced to short sell or foreclose and are getting caught up in deficiency judgments.

"After the banks foreclose, it's very common now to have large deficiencies with houses not worth the balances owed," said Don Lampe, a North Carolina real estate attorney.

Lenders mostly declined comment. Although Corey's lender, BB&T did indicate it was pursuing more deficiency judgments.

"They follow the rise and fall of foreclosures," said the spokeswoman, who would not discuss Corey's account.

Can they come after you?

Whether banks can and will pursue deficiency judgments depends on many factors, including what state the borrower lives in and whether there's a second mortgage or other liens. But if borrowers ignore the possibility of deficiencies, it could haunt them.

"Once they have a judgment, they can pursue you anywhere," said Richard Zaretsky, a board-certified real estate attorney in West Palm Beach, Fla. "They can ask for financial records, have your wages garnished and, if you fail to respond, a judge can put you in jail."

In the case of foreclosure, lenders can pursue deficiencies in more than 30 states, including Florida, New York and Texas, according to the U.S. Foreclosure Network, an organization of mortgage law firms.

Some states, such as California, are "non-recourse" and don't allow deficiency judgments. But, even there, if the if the original loan was refinanced, some or all of it may be subject to claims.

Deficiency judgments on short sales and deeds-in-lieu can happen in many more places. In these cases, extinguishing the debt is often a matter of negotiating with the bank.

But even when lenders are willing, many borrowers may not be aware that they have to ask for release. So, if you are pursuing a short sale, be sure your attorney asks the bank to release you from any further obligation.

"People shouldn't have a false sense of security that a deficiency judgment may not be later sought," Zaretsky said.

He expects many will be filed over the next few years, based on the fact that banks have sold many of these accounts to collection agencies and other third parties, at discount.

"The parties who bought those notes wouldn't have paid money for them unless they had the intention of acting," Zaretsky said.

Ticking time bomb

What can be scary is that the judgments don't have to be obtained immediately. Lenders or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest.

It doesn't have to be a large amount of debt for a lender or collection agency to come after borrowers. Richard Varno and his wife short sold their Nashville home back in 2004 after he lost his job.

It wasn't until 2008, when the second lien holder asked him for $25,000, that he realized he still was liable.

"I told them, 'Hey, you guys released the title,'" he said. "As far as I know, I'm off the hook."

He wasn't. Releasing title does not necessarily end the debt. It's complicated because of variations in state law, but, generally, a mortgage has two parts: a pledge of collateral, represented by the home, and a promise to pay off the loan.

Lenders may release property liens in order to facilitate short sales without releasing borrowers from their obligations to pay under the promissory notes. The secured debt can convert to an unsecured one after the sale.

Zaretsky had one client who was so relieved to have arranged a short sale that he signed every paper his real estate agent shoved at him, even a confession that clearly stated he still owed the debt.

"He had no idea what he was doing," said Zaretsky. "All the lender had to do was go to court to convert the confession into a deficiency judgment."

Lenders are also very inconsistent. One of Zaretsky's short-sale clients was ready, willing and able to pay, but the bank did not even ask; another lender always reserves the right to pursue the deficiency.

Strategic defaults

Sometimes lenders go after borrowers walking away from their homes if they have other assets, according to Florida real estate attorney Larry Tolchinsky.

"Banks are pulling credit reports to see if it's a strategic default," he said. "If you're behind on all your other payments, you're okay. But if you're not, they'll come after you."

If borrowers have any doubts about their risks, they should seek legal advice. Or, at least, call non-profit organizations such as NeighborWorks for advice. According to Doug Robinson, a NeighborWorks spokesman, its counselors always try to negotiate away deficiencies when they facilitate short sales or deeds-in-lieu.

"We don't favor any short-sale contracts that leave any deficiency that can be pursued," he said.

Robinson himself knows what can happen. He paid off a deficiency after his own New Jersey house went through foreclosure 11 years ago.

Originally posted by David Breitzmann:

Hello digi-neighbors,

In this economy the top priority of the electorate is job creation. With my previous marketing consultation I found it interesting that when we are the entreprenuers at first opportunity, we outsource to reduce costs. This is certainly a stategic, cost-driven decision. Is it an affront when the marketing is pursued with such methods while simultaneously chiding the larger players in this downturn? Are not the two irrevocably linked?

When one has the opportunity to spur growth and money in the hands of domestic consume how is this opportunity negotiated? Marketing opportunities can be absorbed by those willing to work for an often reduced price.

Contextual example per my previous client:

You require thousands of entries in Excel and outsource to India for $50 per 40 hour week versus the domestic cost of $280
(@ $7 per hour)

The oustsourcing train has left the station and it's isn't going comming back. The first question any employee needs to ask themselves on an ongoing basis is "Does my job create value for my employers and how much value does it create". In today's economy job security is directly tied to value creation. Most poeple haven't been taught to think or look at their jobs like this. As soon as the job you perform fails to create or increase value for your employer you should consder your job at risk.

American companies compete with other companies on a global scale. The only way these companies are going to be able to remain competitive is to compete in terms of labor cost. Outsourcing is here to stay. The long term effects will be an economic restructuring similar to what this country faced in the 1980's with the manufacturing sector. Certain jobs just are not comming back and certain professions will no long pay the level of wages they used to.

Personally I've come to the conclusion that unless you are an extremely highly skilled individual or in an extremely high paying field being "employed" is basically a dead end where you are working to create wealth for others.

However if you going to be employed select a field that is economically viable and cannot be easily outsourced.

Originally posted by Richard Warren:

Originally posted by Jon Holdman:

Avoid HOAs. With an HOA a property is never paid for. An HOA can have input on every decision you make for a property.

While I agree with that statement, it isn't always easy. In the Las Vegas market it is extremely difficult to find homes without some type of HOA unless you are buying in very old areas. If you do have to buy with an HOA do some research first.

Some other rules of thumb:

You won't go broke making a profit.

Spend less than you make.


:cool:

I just moved from the Dallas area to Michigan. In the suburbs of Dallas where there are lots of properties in desirable neigborhoods, it's almost impossible to find a proeperty that does not have an HOA.

Originally posted by Releaf_OC:

J Lamar--great posts. I totally agree with you, I think what Financexaminer is missing here is that it is federally illegal for certain LICENSED people to give referral fees. .

I've been doing a lot of legal research into thre whole bird dog issue. As long as bird dogs doesn't represent himself as an agent or negiotiator for either buyer or seller at least here in Michigan it is not it is illegal to give an investor a lead. The key is how the business relationship between the property locator and the investor is structured. If you can structured a Joint Venture Agreement between the property locator and the investor then it isn't illegal at all. I've also done some research on RESPA. The laws behind RESPA and the completion of an HUD-1 are specifically designed to provide disclosure informaton pertaining to lenders, mortgage brokers and settlement services or title companies., And yes in some cases it is illegal for a referral fee arrangment between lenders, mortgage brokers and settlement services or title companies. If there is any business relationship such as a partnership, equity stake, referral arrangment etc. it has to be disclosed on the HUD-1 forms.

Originally posted by Rich Weese:

Interesting list. Not too many complaints from BPmembers about the list. That tends to make me think it must be pretty accurate, imo. We all have our favorites and we all tend to over value the areas we invest in... Rich

You got to be kidding. As much as I like BP for the valuable real estate insight is provides I would hardly call it a representitive sample of a cross section of America. I agree with another poster. Some of the criteria that makes a city "Miserable" are nebulous at best.The value of list such as this is more entertaining than informative.