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How Deferment of Mortgage Payments May Affect Borrowers in the Long Run

By Edward Brown

When Congress passed Section 4021 of the CARES Act in response to the effects of COVID-19, their intent was to help borrowers who were having problems making their mortgage payments. Little did Congress realize that they were potentially setting up borrowers for trouble in the future when it comes to credit worthiness as assessed by the lending community.

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According to Mark Hanf, president of Pacific Private Money, “Section 4021 of the CARES Act contained a regulation that loan servicers “shall report the credit obligation or account for those participating in forbearance as current”. In other words, those participating in a forbearance program should not see their credit scores drop. However, there is a loophole that allows lenders to discover whether or not a borrower is actually making payments. It is the “comments” section of a credit report. The CARES Act does not mention the comments section of credit reports, and that’s where forbearance notations are going.” What borrowers are not being told is that any reference in a credit report to forbearance can be a Scarlet Letter for an applicant seeking a new mortgage, according to Kathleen Howley in an article she wrote in early May 2020.

According to Hanf, within a week of Howley’s article, his company received a loan request from a home buyer who was denied credit from a major bank for just this very situation. Although the bank sees the existing mortgage as “current” the forbearance has let the world know via the comment section that this borrower has requested a deferment. The major bank involved would most likely not deny the loan on its face due to the deferment, as this would violate the law; however, banks are notorious for coming up with a myriad of reasons for denying a loan and still stay within the guidelines set out for them.

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Conventional lenders desire to have plain vanilla borrowers who pay back loans in a timely manner. When a borrower changes terms of the loan by requesting principal forgiveness or other aspects of the loan, the lenders generally do not usually extend credit again to these borrowers and can negatively affect the borrower’s ability to borrow again from unrelated lenders. Such is the case back during the Great Recession wherein some borrowers took advantage of the economic climate by asking their lender to reduce the principal of their loan [total forgiveness rather than just a deferment]. The borrowers may have gotten a reprieve, but the long-term effects may have been more drastic. Similarly, to when a borrower files bankruptcy. The borrower may get out of paying creditors, but their ability to borrow in the future is usually severely hampered.

In one case, back in 2009, during the heart of the Great Recession, one banker tells a story of how a wealthy borrower first asked for a principal loan reduction of $500,000 because his collateralized real estate had decreased and his request was granted. But, when this borrower was faced with the prospects of having this reduction reported on his credit report or the fact that he would have to inform any new lender that he requested a principal reduction [as this question is usually on bank applications], he voluntarily requested that the $500,000 abatement be reinstated. He decided his ability to borrow in the future was worth more than the $500,000 principal reduction.

Borrowers will have to decide if requesting deferments is worth the risk of potential future lending restrictions based upon the lender desire to lend to borrowers who choose to defer mortgage payments when the opportunity arises. Whoever said, “there’s no free lunch” must have been talking about these very situations.


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Edward Brown

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.

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Vacation Rental Investment Opportunities

By Rick Tobin

In 2019, the travel and tourism sector represented 10.4% of the global GDP (Gross Domestic Product), including vacation rental properties. Over the past 12 years back when the best known vacation rental company named Airbnb was formed in San Francisco, each consecutive year for vacation rentals had record growth. However, the current 2020 year has experienced some significant economic challenges related to the global pandemic designation that slowed down travel tremendously.

airbnb-3399753_1280Airbnb is the best known vacation rental company in the world because it’s the largest. However, there are many other popular vacation space rental brands under the names of HomeAway, VRBO, Booking Holdings, Trivago, Booking.com, Homestay, and TripAdvisor.

Vacation rental ownership can become either a part-time or full-time career for property owners if they are consistent with their marketing efforts, treat their guests fairly, and have affordable monthly mortgage payments and maintenance expenses. With today’s record low mortgage rates, many property owners may be able to refinance and reduce their mortgage rate by 2% or 3% while increasing their net cash flow by $500 or $600 per month, depending upon their loan amount.

Let’s take a look below at some of the latest vacation rental data trends:

Vacation Rental Properties, Income, & User Numbers

  • Worldwide, an estimated $57.669 billion (USD) was generated in 2019.
  • The projected number of vacation rental users was over 297 million.
  • According to the National Association of Realtors (NAR), 30% of vacation rental or second-home property homeowners also leased them as short-term rentals in 2018.
  • The NAR reported that 32% of investment homeowners were likely to lease them as short-term rentals.
  • Of the nine million second homes in the US, approximately 44% were professionally managed and upwards of 25% to 35% were rented out, per Hostfully.
  • There are more than 23,000 vacation rental companies across the nation.
  • As per VRM Intel, 45% of investment property buyers purchased their property with the intent to generate some rental income instead of just “fixing and flipping” or holding long-term for price appreciation.
  • It’s projected by Statista that the number of vacation rental users may surpass 57 million by 2023.
  • The average revenue per user (ARPU) reached $438.49, according to Statista.
  • Vacation rental income comprises about 24% of the average owner’s total overall annual income, per VRMA.
  • VRBO estimates that 29% of vacation properties are owned by more than one person.
  • Approximately 63% of investors and 52% of vacation property buyers purchased a detached single-family home with a median size of 1,500 square feet, according to VRM Intel.

Airbnb Statistics

  • businessman-2682712_1280In the US, there are more than 660,000 host properties.
  • Since the formation of Airbnb in 2008, there have been over 500 million Airbnb stays.
  • There are more than seven million listings in over 220 countries and regions.
  • There are 150 million users worldwide.
  • There were over 100,000 host cities worldwide as of January 2020.
  • Each night, there are over 2 million people staying at Airbnb rentals worldwide.
  • On average, six guests check into an Airbnb every single second.

Top 10 Profitable Airbnb Regions

Surprisingly, many of the most profitable Airbnb areas were located outside of a major tourist hub, crowded metropolitan region like in New York City, or in scenic coastal regions, according to an analysis by the investment property exchange company IPX 1031. This is partly because the host’s property maintenance and mortgage costs are generally more reasonable than in pricier metropolitan regions.

In 2019, the Top 10 cities for highest profit margins for property hosts included:

#1 – Moreno Valley, California: $33,720 annual profit
#2 – Virginia Beach, Virginia: $32,208 annual profit
#3 – Pasadena, Texas: $29,988 annual profit
#4 – Garden Grove, California: $29,772 annual profit
#5 – Fremont, California: $26,700 annual profit
#6 – Grand Prairie, Texas: $24,432 annual profit
#7 – Columbus, Georgia: $23,820 annual profit
#8 – Oxnard, California: $23,256 annual profit
#9 – Orlando, Florida: $22,020 annual profit
#10 – Shreveport, Louisiana: $19,992 annual profit

Top Airbnb Destinations for Summer

beach-1838501_1280In the summer of 2019, the top Airbnb destinations in the entire nation for the peak travel season were ranked as follows:

#1 – Los Angeles
#2 – San Diego
#3 – Phoenix
#4 – San Francisco
#5 – New York City

In San Diego, Airbnb reported that there were 345,000 guests that generated upwards of $79 million in revenue for the property hosts. For the smaller neighborhood regions in San Diego County, the most popular areas for Airbnb travelers included:

#1 – Pacific Beach
#2 – Mission Beach
#3 – East Village
#4 – North Park
#5 – Ocean Beach

The Global Pandemic’s Effect on Tourism and Investments

In February and March 2020, the Dow Jones stock index experienced eight of the 10 worst all-time trading days in history due to investor fears about the coronavirus pandemic. Between February 12th when the Dow peaked at 29,551.42 on February 12th and March 23rd when the Dow plummeted to a low of 18,213.65, the Dow lost 38% of its overall percentage value in just over five weeks. However, stock prices have been moving much higher through the end of June as the Dow Jones had the best quarter since 1987 and the S&P 500 index had the most positive quarter in 22 years.

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Unfortunately, the travel and tourism industry has been hit hard during the first half of 2020 due to so many hotel, motel, theme park, and transportation restrictions or complete shutdowns. For many vacation rental owners, they have seen their income fall to lower levels than in previous years. If so, the loss of rental income has inspired some vacation property owners to think about either selling or refinancing their property to generate much needed cash or to hopefully improve their monthly net cash flow.

Surprisingly, real estate continued to have much more positive news than perhaps any other investment sector during the 1st half of 2020. Specifically, the fact that 30-year mortgage rates reached all-time record lows in the month of June was probably the primary reason why as some rates hovered somewhere in the mid-2% rate range. By comparison, the 30-year fixed mortgage rate hit a whopping 18.63% in October 1981.

profits-1953616_1280Other positive first half of 2020 trends for real estate and mortgages included:

  • Mortgage application numbers reached 11 year highs.
  • Home purchase applications also rose to 11 year highs while home inventory remains low.
  • Suburban home market regions are expected to hit record boom sales highs because so many people want out of crowded metropolitan regions while realizing that they can work from home.
  • US home prices rose for the 9th consecutive month in April, per Case-Shiller.
  • Prices of the most affordable third of US homes increased 5.5% during the 2nd quarter, per Redfin.

In the second half of 2020 and beyond, more people will likely be very eager to start traveling again after being restricted from travel for much of 2020. As a result, the revenue streams for vacation rental hosts may continue back towards historic highs if the annual positive data trends continue like they have over the past 12 years.


 

Rick-Tobin-Professional-Pic-sharperRick 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.

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VA and FHA Mortgages & the Housing Boom (Part 2)

Military Experience Eligibility for VA Loans

How does a retired or active military personnel member qualify for a VA loan based upon their military experience?

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* An earlier discharge date for a service-connected disability may still qualify you.
** Officers who separated from service after 10/16/81 may be eligible.

For more details, please visit The U.S. Department of Veteran Affairs’ website to learn about VA mortgage loan eligibility benefits:
https://www.va.gov/housing-assistance/home-loans/eligibility/

Once an active or retired military person meets the minimum qualifying guidelines, he or she will be given a Certificate of Eligibility that’s issued by the Department of Veteran Affairs. The VA mortgage loan applicant will then send a copy of the VA Certificate of Eligibility (VA Form 26-1880) to their mortgage broker or banker. For VA loan applicants who do not have a copy, they may complete a form entitled Request for a Certificate of Eligibility (Fillable) that’s linked here:
https://www.vba.va.gov/pubs/forms/VBA-26-1880-ARE.pdf

The Evolution of VA and FHA Loans

veterans-day-4653841_1280Near the end of World War II, the VA home loan program was created in 1944 as part of the original Servicemen’s Readjustment Act that’s also referred to as the GI Bill of Rights. The VA loan benefits were signed into law by President Franklin D. Roosevelt. A portion of each funded VA mortgage loan was guaranteed by the federal government in the event that the VA borrower later defaulted on the loan and lost the home in foreclosure. This way, each bank that funded the 100% loan for qualifying VA borrowers had much less financial risk.

Specifically, there were two types of government-backed or insured mortgage loans that stimulated the housing market and helped the U.S. economy prosper and rise up out of the previous negative Great Depression (1929 – 1939) years – VA and FHA (Federal Housing Administration) loans. These more flexible residential mortgage loans were part of President Roosevelt’s New Deal plan and the National Housing Act of 1934 that were designed to create more jobs and boost home values and the economy once again.

Since 1934, FHA has insured over 34 million home mortgages nationwide. As per the U.S. Department of Housing and Urban Development (HUD), FHA has active insurance on over 8 million single-family mortgages. In total for both residential and commercial real estate properties, FHA’s insurance portfolio exceeds $1.3 trillion.

To learn more about the Federal Housing Administration (FHA), please visit HUD’s website:
https://www.hud.gov/program_offices/housing/fhahistory#:~:text=Congress%20created%20the%20Federal%20Housing,workers%20had%20lost%20their%20jobs.

VA and FHA Loans for Buyers, Sellers, and Owners

calculator-723925_1280The main difference between FHA and VA is that the government insures a portion of the FHA loan while guaranteeing a portion of a funded VA loan. The vast majority of home loans funded nationwide over the past 10 years, directly or indirectly, were either government-backed (VA) or insured (FHA) and/or purchased in the secondary markets by other government-sponsored or federal entities named Fannie Mae, Freddie Mac, or Ginnie Mae.

FHA loans allow borrowers to qualify with 3.5% down on average (96.5% LTV) with lower FICO credit score options near 580 and easier overall underwriting allowances. FHA also allows seller credits and gifts from family members toward down payments that can effectively make a purchase loan become near 100% LTV also. However, borrowers will have to pay an additional monthly insurance premium along with their mortgage payment that can reach a few hundred dollars per month, depending upon the borrower’s FICO credit score, loan amount, debt-to-income (DTI) ratios, and LTV (loan-to-value). There are more flexible FHA Streamline refinance programs available as well that are similar to the VA Streamline.

For qualified VA borrowers, there is perhaps no better mortgage loan option available while FHA loans might be the second best option for high LTV loans. This is especially true as 30-year fixed mortgage rates continue to hover at or near all-time record lows while making many mortgage payments more affordable than rent even when the home is financed up to 100% of the purchase price.

To date, VA and FHA have guaranteed or insured over 58 million mortgages for homeowners. Home sellers should welcome any VA or FHA buyer prospect who has a pre-approval letter from a mortgage lender. This is because the lender is prepared to provide up to 96.5% LTV for FHA or up to 100% LTV for a VA loan. Amazingly, both FHA and VA loans can close in a few weeks or less due to expedited online application processing options.


 

Rick-Tobin-Professional-Pic-sharperRick 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.

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VA and FHA Mortgages & the Housing Boom (Part 1)

By Rick Tobin

The most flexible and easiest qualifying mortgage loan product in America is the VA (US Department of Veteran Affairs) mortgage loan. Between 1944 and 1966, approximately 20% of all single-family homes built or purchased were financed by the VA home loan program for active military or retired veterans of World War II (1939 – 1945) or the Korean War (1950 – 1953). From 1944 through 1993, the VA mortgage loan program guaranteed almost 14 million home loans. By 2013, the VA had guaranteed over 20 million loans. As of 2019 in the VA’s 75th anniversary year, VA had surpassed 24 million loan guarantees for borrowers.

investment-4737118_1280Did you know that there are 100% LTV (loan-to-value) mortgage loans available to qualifying active or retired military personnel up to $1.5 million dollars for owner-occupied homes as of 2020? Yes, a qualifying VA mortgage applicant has the option to purchase a home priced as high as $1.5 million with no money down. These 100% LTV loans have no additional monthly mortgage insurance payment requirements like required for most other mortgages with a loan-to-value range above 80% of the purchase price or appraised value.

VA Loan Guidelines

Purchase

Mortgage loan underwriting guidelines are subject to change and may have some exception allowances for mortgage borrower applicants due to factors such as credit scores, income, job history, debt-to-income ratios, and property types. However, these are common VA loan terms or guidelines that were available as of June 2020:

  • No money down up to $1.5 million for owner-occupied borrowers (not second homes or investment properties)
  • Historically, a debt-to-income ratio of up to 41% DTI* was typical for VA borrowers. However, some VA loan programs allow up to 60% DTI or higher
  • No monthly mortgage insurance premium requirements
  • FICO credit scores as low as 620

* Debt-to-income ratio (DTI) = Borrower’s proposed mortgage payment plus monthly consumer debt obligations that are divided by monthly income. A borrower with $2,500 in monthly debt payments and $5,000 in monthly gross income (before taxes) will have a 50% debt-to-income ratio ($2,500 / $5,000 = 50%).

VA Loan Refinance

percent-226357_1280For existing VA mortgage borrowers under newer 2020 rules, VA borrowers can pull cash out of their property up to 100% of their property value. For example, a homeowner with an existing $250,000 mortgage loan secured by a property valued at $500,000 could apply for a new $500,000 cash-out loan that gets them upwards of $250,000 additional cash-out that they could use to pay off credit cards, student loans, automobile loans, business debts, or use the funds to make new property or stock investments.

A mortgage borrower in a non-VA loan can refinance from a conventional bank loan or an FHA loan with costly monthly insurance premium (MIP) payments into a new VA loan if one or more of the borrowers has VA eligibility.

Another easier qualifying VA refinance loan option is generally referred to as a “VA Streamline” (IRRRL – Interest Rate Reduction Refinance Loan). With some non-credit qualifying VA Streamline loan programs (subject to change), the borrower’s application process includes:

  • No minimum credit score
  • No appraisal required
  • Primary and non-owner occupied properties may be allowed
  • Must be current on existing mortgage loan about to be paid off
  • Manufactured homes attached to the foundation may be eligible

To learn more details about qualifying for VA refinance loans, here is a link to VA Pamphlet 26-7, Revised, Chapter 6: Refinancing Loans

https://www.benefits.va.gov/WARMS/docs/admin26/pamphlet/pam26_7/Chg_17_ch_5.pdf


 

Rick-Tobin-Professional-Pic-sharperRick 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.

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Why now is the time to start a policy

By Gabby Darroch

It really burns my biscuits when I hear people say, “I don’t want to start a policy yet because of the Coronavirus. I am not sure where the economy is going to go.”

corona-5081311_1280And the reason why this gets me so heated is no secret. Let’s be honest. Many people are making decisions out of fear right now. And fear-based decision-making is just about the worst thing you can do in an already difficult situation.

But this difficult situation is more reason than ever to start a policy because you’re right, you don’t know where the economy is going to go. On the contrary, did you know where the economy was going to go before? No, and you will never be able to predict this.

Things happen. We have windfalls and downfalls. Raises and demotions. We buy things and we also sell things. There are pandemics; We are healthy. Terrorists attack; Our country is safe and secure. We have Republican Presidents; We have Democratic Presidents.

My point is, you never EVER know what is going to happen. You can’t predict the future. So why do you want someone else controlling your own financial life?

Now more than ever, this is why you want to start a policy.

This is why you want to take control of your financial wealth. Because you don’t know what’s going to happen.

mailbox-2607174_1280Do you really want to be sitting by your mailbox waiting for:

  • your stimulus check to arrive;
  • the government to take care of you;
  • your pension to kick in;
  • social security to supply you with income; or
  • your 401(k)/IRA/qualified plan/mutual fund to save you?

Is that working for you?

How many people do you know that are out there at retirement age that are working when they should be enjoying their life? Are they working because they really want to be working? Because they just want something to do? Or are they doing it because they have to do it for survival because their qualified plan, their 401k, their IRA, their pension won’t save them? And the government didn’t take care of them like they thought they were going to.

It’s time to wake up.

businessman-4279253_1280It is time to take control of your own financial life. Quit making excuses. You are the one that can take control. And what better way to do it than to put your money in an environment where you have guaranteed tax free growth, where you pay the tax ONE time on your money at the lowest possible rate and now you have it into a vehicle, into a machine, into an environment, where you have guaranteed growth, and the government is completely out of your hair.

And not only is it going to create wealth for you while you’re living, but it’s also going to create multi-generational wealth for your spouse, your children, your grandchildren, and future generations to come.

Come on ladies and gentlemen. Get on board. Now is the best time to start your banking policy!

Why do you think we’re so busy here at The Money Multiplier? It’s because people are sick and tired of all that’s going on with their money. They are tired of the bloodbath in the stock market. And they don’t know what’s going to happen with Real Estate.

Next time you think, “Oh no! Are we at the peak or are we in another recession or depression? What’s going to happen?” stop yourself and remember, you have a policy, so your money, your financial future, is safe. That is, if you take action now. Eliminate all those worries in your life by taking control of your own financial wealth.

If not you, then who?

businessman-4914044_1280If you’re not going to take care of yourself then who will? YOU need to make the decision right now.

The wealth train is moving down the track. And it’s going to stop at your station. Are you going to let it pass you by? Are you going to watch it head on down the track? Or are you going to hop on board and take the wealth train to the promised land where YOU own and control your financial life and future.

To learn more or get started, please visit www.TheMoneyMultiplier.com . Scroll to the very bottom and click on “Member Area.” Then, watch the presentation that appears on the next page.

When you’re ready to get started on creating your financial legacy or if you have more questions, please email us at info@themoneymultiplier.com, or give us a call at 386-456-9335, and one of our mentors will be in touch with you.

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Prepare for the Coming Greed Pandemic

Protecting Your Assets Is MORE Relevant Post-COVID-19

By Randy Hughes

If you wondered about your need for privacy and asset protection before the Pandemic, it will be critical for you and real estate investors like you post-Pandemic.

gdpr-4095257_1280The effects of the epidemic will be felt for years, not only financially but legally. If you have put off creating an asset protection plan, now would be a great time to start.

We have long known, as real estate investors, we are more inclined to be sued than most other occupations. Why? Because the average American assumes that ALL real estate investors are RICH! Therefore, we are good targets for frivolous lawsuits.

People with cash in the bank and no hard assets are not good targets for lawsuits because, unlike real estate, cash can disappear quickly . . . and buildings cannot. Furthermore, unlike deeds and liens, bank account balances are not available through public records.

Until you have been pursued by a contingency fee lawyer (and his or her deadbeat client), you might not feel the need to protect your assets. But, if you are going to stay in this game long-term, it is just a matter of time before the wolves will be at your door.

moon-4908100_1280The paradox of our careers is the more successful we become, the more of a “target” we are for the nefarious characters in our society. These characters do not want to work hard (like us) to become wealthy. They prefer the “easy route” via our dubious legal system.

I spoke 33 times last year to real estate investment groups around the nation. I stressed the need to get titles to real estate out of personal names and into Land Trusts for privacy, asset protection, and estate planning purposes.

In almost every gathering, someone asked the question, “Why do I need to protect my assets, won’t insurance take care of any claims?” My standard response was, “I believe in insurance and think you should buy all you can stand, but DO NOT RELY ON IT EXCLUSIVELY!

Insurance should be only one-leg of your asset protection stool. Why? Let me give you a recent example!

When the pandemic first arrived in America and almost every business was shut down, I called my neighborly insurance agent. Here is how our conversation went: “Hi Bob, I am calling because after 40+ years of paying you a premium for “business interruption” insurance, I need to make a claim.” Bob responded, “Sorry, but pandemics are excluded!” My response was, “Really? Forty years of premiums and now I AM NOT COVERED?

It is folly to rely solely on insurance to protect you when you need it the most.

As an aside, please read your policies. You will find LOTS of exclusions and often you are not even covered for “defense costs.” In other words, you can go broke just defending yourself (read: legal fees) from a legal challenge in which you are totally innocent.

lawyer-3268430_1280What is a real estate investor’s first line of defense? DO NOT OWN PROPERTY IN YOUR NAME! I have been preaching this to my fellow real estate investors for more than 40 years. I have been a full-time real estate investor for 50 years, and early in my career I discovered the benefits of using a Trust to hold title to my investments. I have written about the benefits extensively in this publication and many others.

Some people “get it” and many do not. They live in a dream world assuming that THEY will somehow be spared the sorrow and expense of a frivolous lawsuit (or worse yet, an attack by an irate tenant on them or their family at their personal residence). Consequently, they risk years of hard work and their family’s safety and financial security because they are too lazy to fill out a few papers.

I can lead a horse to water, but . . .

What is YOUR net worth, worth? Is it worthy of protection? How much of a price have you paid for it in sweat and tears? Are your family’s safety and security important to you? Perhaps you spend hours each week watching sports? Would it make sense to spend a little bit of your valuable time learning how to create a trust to hold title to your investments? The answer is obvious, you just need to do it and DO IT NOW!

output-5045168_1280What does this rant have to do with the pandemic? Plenty. Contingency lawyers and their deadbeat clients will be developing new and creative ways to find someone to sue because of the virus and its effects on tenants, businesses, and anyone with assets they covet.

If you can believe there are elements of our society that will walk in front of a car to eventually receive a “paycheck,” then you can also believe that it is time for YOU to get OFF the title of all of your real estate investments (and NEVER buy property in your name again!). Use a trust, you will be glad you did!

Several times a year I hear from people who have heard me speak or students who did not act on what they learned from me. They tell me they failed to take my recommendation, and now they regret it.

Don’t be one of those people.


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Randy Hughes, Mr. Land Trust

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-fashioned way by calling me at 217-355-1281. (I actually answer my own phone unlike most other businesses in America today!)

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How to THRIVE in Real Estate in the Time of the CORONAVIRUS (Part 2)

By Victoria Kennedy, CEO of Atlas Real Estate

Coronavirus Action Steps:

1) OVER COMMUNICATE WITH CLIENTS

contact-us-4193523_1280(Do not wait and put this off… if they reach out to you, it is too late.)

  • If you have less than 20 clients, call them individually and check in with how they are doing and how their family is. If you have more than 20 clients, send out an email blast with a video encouraging them and coming from a place of support as well as authority. Your clients are relying on you to be the calm in the storm.
  • Let them know which SOLUTIONS you are coming up with to serve them during this time.
  • EDUCATE them on how interest rates have never been lower and now is the BEST time to buy a home.

2) CREATE RESOURCES FOR YOUR CLIENTS

  • E-mail them personalized videos on the current state of the market in your community.
  • Instead of meeting clients for coffee, meet them over a video Zoom call and them mail them a $10 Starbucks gift card!
  • Conduct open houses via live stream and make it an event! You can have buyers join in, comment, like, and ask you questions about the home.
  • Send a bottle of hand sanitizer as a little ‘thank-you’ gift to your clients; it will give them a chuckle and will make you instantly memorable.

3) TIME TO GO ON THE OFFENSE

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  • If you haven’t started running paid ads to get appointments with potential clients, NOW is the time (Ads are going to be on sale… take advantage!)
  • If you aren’t shifting your marketing message around everything going on and are running the same cold email campaigns/ads/DM messages, shift them to align with the conversation going on.
  • Build a brand new offer that helps local businesses around everything happening and push it hard! We at Atlas Real Estate have already created brand new campaigns addressing this situation and we are offering engagement campaigns for our agents to establish YOU as the authority and expert in your community.
  • Most importantly, NOW IS THE TIME to step up as a Realtor and INNOVATE your product/service so that it is a SOLUTION to all of the problems your clients are facing.

I know that’s a TON of info and there’s so much more…

So if you want help executing on all of the above, we have the resources available for you to:

  • Establish yourself as the expert and authority in your community
  • Be the voice of calm and assurance to the buyers that need to hear your message the most
  • Get your current clients to stay and recommend you to their family and friends by staying top of mind and relevant
  • How to reach out and ease your current and past clients on why now is the best time to buy
  • Stay ahead of the curve by doing live streamed open houses and online meetups

adult-blur-boss-business-288477And don’t forget…

Chaos = Opportunity (for those who provide solutions + clarity).

Some Realtors will NOT have solutions.

Some Realtors will NOT have clarity.

And they will fall.

But for the select few, who act now.

Who seek clarity.

Who create solutions.

You will end up growing massively.

Buyers need assurance and a leader in their community more than ever.

They are just as nervous about this situation as you, and they need your help.

It is your time to step up as a Realtor.

It is time for you to step up as a leader.

It is your time to dominate.

You’ve got this.

Reach out to us if you are ready to dominate and THRIVE in your real estate business this 2020.


Atlas -Victoria_Kennedy small

Victoria Kennedy

CEO of Atlas Real Estate

victoria@goatlasdigital.com 

(561) 529-9077

www.goatlasrealestate.com

Nominated as a 2020 Brand Ambassador for Inman, Victoria Kennedy is a well-respected authority in Real Estate marketing. She is the CEO of Atlas Real Estate, a lead generation agency that is committed to providing more leads and closings for Real Estate professionals.

She is a highly in demand speaker on all things digital marketing, and has helped many clients boost their visibility and revenue. Because of her expertise in real estate, she has been a trusted speaker and contributor to such organizations as the National Association of Real Estate Brokers, Inman News, and Yahoo Finance.

In addition to running a successful marketing agency, she also has given talks, workshops, and has worked as a trusted consultant for Realties, Title Companies, Investors, and top producing agents. She has been featured in over 175 publications and podcasts both nationally and internationally.

In addition to her marketing expertise, Victoria is a #1 selling classical-crossover singer and has sung with the likes of Andrea Bocelli, as well as toured all over Europe with her music.

She is excited to share with you the power of her Closing Maximization Method and how it can exponentially grow your business.

Find out more here: goatlasrealestate.com


Atlas Real Estate

Here at Atlas Real Estate, we are all about connecting motivated buyers and sellers to top producing agents nationwide.

We guarantee you will get a set amount of exclusive leads a month coming out of your personal Facebook page to brand you as the agent or your money back.

We will call, text, and email every lead for you and connect you with serious buyers and sellers. We will continue to nurture each lead for up to 12 months so whenever they are ready to buy or sell, you are the agent they call.

We will qualify all your leads and set appointments for you so all you have to do is show up to meetings with serious buyers and sellers. We will provide you with proven scripts and sales techniques so you can close more leads and exponentially grow your business.

Give us a call today to get the EXACT marketing strategy that is bringing our Realtors an additional 2-4 closings a month!

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How to THRIVE in Real Estate in the Time of the CORONAVIRUS (Part 1)

By Victoria Kennedy, CEO of Atlas Real Estate

In times of uncertainty, the person who brings the most clarity adds the most value. I know you’re getting the questions about the coronavirus and what I wanted to do today is share with you some talking points that you can share with your clients that’ll help you be the calm in the storm.

We are going to give you a list of the top 5 things you need to know in order to not only make it through this pandemic, but to thrive.

During this time of global panic and fear, we are faced with a very important choice.

covid-19-5065427 smalla) We can all choose to give in to the fear, panic, and stress. To pull away and give up. To act irrationally and out of emotion.

Or on the other hand…

b) we can all choose to come together. To build community. To create. To innovate and come up with amazing solutions. To educate ourselves and become informed. To use this as an opportunity for us all to grow not only in business but also as human beings and as a greater collective.


We hope this guide will help you to be seen as the expert in your community and to bring goodwill and calm amongst your friends and family.

Now is the very best time to buy a home, and we are actively working to make sure that our agents are best positioned in their market to speak to the buyers who need to hear it the most.

We are so proud to establish Atlas Real Estate as the brand that agents can trust and rely on in times of uncertainty. We are here to provide the very best service for our agents as we come from a place of service, love, and dedication to our clients and our community.

Thank you to all our past, present, and future agents for being a part of that vision. ̟

Let’s get this!!!

The Top 5 Things to Do in Order to Thrive in Real Estate in the Time of the Coronavirus

colorful-4043715_12801. GO ALL IN

Many agents ask us about the pandemic and advertising. Should they hold o until the economy stabilizes? Sadly, most agents are just sitting around hoarding their money like it’s toilet paper. Do you know what the agents who will not only survive but THRIVE in this time do? You guessed it. They GO ALL IN.

Why do this?

The biggest reason is everyone else is turning o ads or scaling back. That means, you have the means to corner the market, with higher visibility and drastically lower cost per acquisition.

Also, more people will be home, bored, and surfing social media for hours on end. Whose ads are they going to see? Not your scared competitors who are “waiting for the storm to pass.” No. They are seeing YOUR ads. You are the agent they call.

This is the best time to EVER be running ads. People are home from work and glued to their phones. Easily closed deals are happening all day long.

2. Be the Authority

tie-690084_1280If we look back to the time in 2000 when we had the dot com boom and bust, that was really the catalyst of the rotation of money coming out of the stock market and into real estate. That’s what led to the boom that we saw. This is the time where the agent who adds the most value really has a unique opportunity. You see, when we have chaos and when you bring clarity, you have the opportunity to set the table for gaining market share, for gaining the trust of your clients, and moving from a place where people know and like you to them actually trusting you.

3. See the Economy as Working FOR Your Buyers

When we look at volatility in the stock market, typically what happens is, we see an Exodus of money coming out of the stock market. People just get tired of riding the rollercoaster. When that happens, then we’ll see that money rotate somewhere. Money doesn’t typically sit on the sidelines long. It wants to look for yield. It wants to look for opportunity. Historically, that money has moved into hard assets.

One of the biggest hard asset classes is real estate. So it would make sense that when we’re looking at this, as the money rotates out of the stock market, that money will be looking for yield in real estate. Bringing real estate in more demand. We’ve already got a market that has strong demand. It could be now we get gas on the re that we already have.

4. Leverage these Historically Low Interest Rates

We have historically low interest rates. I have no doubt in my mind that there will be some point in the next ve years where people will look back and say, “I cannot believe that I could’ve gotten a 30 year xed rate mortgage at this time in the 2%+ range!” It’s unbelievable to think how cheap money is right now. Now, if we were in a situation where everything was normal and we had these rates, it would be a boom for real estate. If you add in the fact that we’ve got these interest rates where they are, and we also have money rotating out of the stock market, that means that right now this is a recipe for a boom and for us to see some growth in our real estate market.

5. The Stimulus Package

dollar-1443244_1280The federal government just approved 2.5 billion dollars’ worth of a stimulus package. Now the stimulus package money typically takes time for it to really leak out into the economy, typically in the six month time period. So what does this mean? This means by summer the money will begin to stimulate the economy in full effect, just in time for the summer boom for real estate. Right now is an opportunity for us to add value to our clients by being that person that brings facts to the table, not just hearsay, that person that looks on the long term benefits for their clients, not just the short term. You see, when you add value to your clients, those relationships grow deeper and your business begins to build. This is a unique opportunity.

Are we concerned about these things? We’re concerned and we’re being diligent, but we’re not fearful. You see, when we look at what’s to come into the near future in the real estate market, and especially looking at how all of this will play out over the next three to five years, we can really set the table for a really good time in the market. Once we walk through what we’re walking through right now, I hope this gives you the opportunity to share some things with your clients that helps you grow your business.

If you’re at a place where you’re looking for the opportunity to grow your business, please don’t hesitate to reach out. We’d love to help take care of you and your business.


Atlas -Victoria_Kennedy small

Victoria Kennedy

CEO of Atlas Real Estate

victoria@goatlasdigital.com

(561) 529-9077

www.goatlasrealestate.com

Nominated as a 2020 Brand Ambassador for Inman, Victoria Kennedy is a well-respected authority in Real Estate marketing. She is the CEO of Atlas Real Estate, a lead generation agency that is committed to providing more leads and closings for Real Estate professionals.

She is a highly in demand speaker on all things digital marketing, and has helped many clients boost their visibility and revenue. Because of her expertise in real estate, she has been a trusted speaker and contributor to such organizations as the National Association of Real Estate Brokers, Inman News, and Yahoo Finance.

In addition to running a successful marketing agency, she also has given talks, workshops, and has worked as a trusted consultant for Realties, Title Companies, Investors, and top producing agents. She has been featured in over 175 publications and podcasts both nationally and internationally.

In addition to her marketing expertise, Victoria is a #1 selling classical-crossover singer and has sung with the likes of Andrea Bocelli, as well as toured all over Europe with her music.

She is excited to share with you the power of her Closing Maximization Method and how it can exponentially grow your business.

Find out more here: goatlasrealestate.com


Atlas Real Estate

Here at Atlas Real Estate, we are all about connecting motivated buyers and sellers to top producing agents nationwide.

We guarantee you will get a set amount of exclusive leads a month coming out of your personal Facebook page to brand you as the agent or your money back.

We will call, text, and email every lead for you and connect you with serious buyers and sellers. We will continue to nurture each lead for up to 12 months so whenever they are ready to buy or sell, you are the agent they call.

We will qualify all your leads and set appointments for you so all you have to do is show up to meetings with serious buyers and sellers. We will provide you with proven scripts and sales techniques so you can close more leads and exponentially grow your business.

Give us a call today to get the EXACT marketing strategy that is bringing our Realtors an additional 2-4 closings a month!

virus-5115044small

Could the Corona Virus provide the next Boon for Private Mortgage Lending?

By Edward Brown

The Corona Virus had all but shut down conventional lending in late March 2020 and most of April 2020. Although it now appears that many banks have loosened up, they are far behind in applications due to the shelter in place restrictions and lack of certainty in the market.

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This situation may provide a boon to the private lending industry as it has done at times over the past 30 years; however, a cautionary tale might ensue should the perceived lockdown last for a few more months. The main reason is that a prolonged economic decline can produce long lasting effects that may take years to recover, especially in certain markets such as restaurants, retail, and any place where people gather. Different economic interruptions have occurred over the past 30 years that, for the private lender, with foresight, fared better than just before the downturn in the market.

In the mid 1980s to the mid 1990s, the Savings and Loan crisis shuttered many real estate lending institutions. Almost one out of three Savings and Loans failed from 1986 to 1995. It was the most significant collapse since the Great Depression. According to author, Kimberly Amadeo, “In the 1970s, stagflation combined low economic growth with high inflation. The Federal Reserve raised interest rates to end double-digit inflation. That caused a recession in 1980.

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Stagflation and slow growth devastated S&Ls. Their enabling legislation set caps on the interest rates for deposits and loans. Depositors found higher returns in other banks. At the same time, slow growth and the recession reduced the number of families applying for mortgages. The S&Ls were stuck with a dwindling portfolio of low-interest mortgages as their only income source.

The situation worsened in the 1980s. Money market accounts became popular. They offered higher interest rates on savings without the insurance. When depositors switched, it depleted the banks’ source of funds. S&L banks asked Congress to remove the low-interest rate restrictions. The Carter administration allowed S&Ls to raise interest rates on savings deposits. It also increased the insurance level from $40,000 to $100,000 per depositor.

By 1982, S&Ls were losing $4 billion a year. It was a significant reversal of the industry’s profit of $781 million in 1980.

Between 1982 and 1985, S&L assets increased by 56%. Legislators in California, Texas, and Florida passed laws allowing their S&Ls to invest in speculative real estate.

Amongst scandalous activity such as putting pressure on the Federal Home Loan Banking Board to overlook suspicious activity, the crisis pushed states like Texas into a recession. When bad land investments were auctioned off, real estate prices collapsed.”

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In addition to the simple laws of supply and demand where the supply of money available for real estate purchases decreased due to the number of S&Ls closing, other conventional lending institutions became skittish and backed off; even for the more conservative loans.

Enter the private real estate lender. For those who could think outside the box and use some creative thinking, loans were made that, in one person’s opinion “was like shooting fish in a barrel.”

An example of this was a loan I was privy to that, to this day, I cannot believe a conventional lender did not make; the property was in the financial district of San Francisco and was considered a prime office building. The building was 80% occupied and had tremendous positive cash flow from long term, stable tenants. The buyer was getting a severe discount because the son who was given authority by his father accidentally accepted an almost insulting low-ball offer. Although the father tried to correct the mistake, the buyer refused to change the contract and threatened to sue for specific performance.

By all accounts, the buyer needed a loan of 20% LTV. Unfortunately [or fortunately, depending on which side of the table you are], the banks were acting like a deer in headlights and would not commit to a loan; thus, the buyer had to turn to hard money [as it was called in those days]. The terms were 14% and 10 points for a three year loan with a one year minimum guarantee of interest. Although the buyer was not happy with the terms, he knew he was going to make a fortune on the building and be able to refinance once the economy got back to somewhat normal.

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Then, in the late 1990s, we experienced the Dot Com bubble and burst. During the 1990s, more people were getting use to the World Wide Web. At the same time, a decline in interest rates increased the availability of capital. Add to that the Taxpayer Relief Act of 1997, which lowered capital gains tax. These combinations made more people willing to make more speculative investments. Many investors wanted to ride the gravy train to invest at any valuation. Venture capital was easy to raise and fueled many companies that never had made a profit and probably never would.

In early 2000, the Fed raised interest rates, leading to stock market volatility. At the same time, Japan entered a recession. In April 2000, a judge ruled that Microsoft was guilty of monopolization and violation of the Sherman Antitrust Act. This led to a 15% decline in the shares of Microsoft. On the same day of the judge’s ruling, Bloomberg News published a widely read article that stated, “It’s time, at last, to pay attention to the numbers.” Within two weeks of that article, the NASDAQ had dropped 25%. Many investors sold stocks just before April 15th in order to pay for gains they had realized from sales in 1999.

This compounded the decline of the NASDAQ. In addition, investor confidence was further eroded by several accounting scandals and the resulting bankruptcies that ensued. This spiral downward turned Dot Dom to Dot Bomb as it was known.

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Although the Dot Bomb era was not real estate related, confidence in the economy was shaken. Soon thereafter, the September 11th attacks occurred and many borrowers were once again faced with conventional lenders who pulled back on their lending, not matter the asset or the strength of the borrower.

Again, enter the private real estate lender. During this period, real estate had not severely declined; maybe because the decline was more specific to the Internet rather than a global real estate credit crunch. People still had jobs and made their mortgage payments for the most part. The supply of housing had not kept up with demand, so prices stayed relatively stable. However, whenever there is perceived uncertainty, banks typically pull back and usually to an extreme wherein even the most conservative of loans is not made. The private real estate lender was given the ability to lend very conservatively at the same time as commanding a higher rate of interest than was normally attained in a more stable economy.

The next time the banks curtailed lending occurred during the Great Recession in 2008. This time, real estate was specifically cited as a major contributor due to the credit bubble and subsequent mortgage meltdown. Real estate prices fell precipitously, and although real estate declined in value, there were ample opportunities for private real estate lenders.

Many private lenders were curtailing their guidelines regarding LTVs, but they were making loans based on the then new, lower values and making a good living. For example, Mark Hanf, president of Pacific Private Money, started his business in 2008. Normally, one would have thought starting a lending business in 2008 was the wrong time, but Pacific Private Money flourished, as they made loans to borrowers in need at conservative, newer, LTVs, and no client lost money during the continued decline through 2012 due to conservative underwriting.

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Up next, the Corona Virus; although the pandemic has substantially hurt the economy regarding sales/profits, the underlying economic picture was strong prior to the virus, and there is compelling reason to think that it can be strong again after restrictions are lifted, as the various restrictions were created by governments rather than economic forces and can be undone when governments decide to disseminate them; especially if a lockdown is only for a few months rather than years. So far, real estate has not shown signs of collapsing. Sellers are unwilling to unload their properties at depressed prices.

Buyers still exist. Transactions are still being completed even if they are hampered by social distancing and more people working remotely. However, the banks are doing what they always seem to do during unsettling times; they pull back. They have less manpower via closed offices and less employees able to accomplish what is takes to make loans. This, again, gives the private lender the ability to provide the oft needed financing for borrowers. Interest rates have gone up for these borrowers even when the Fed has reduced interest rates. Less capital in the markets to lend means the demand for capital will raise the price for that capital. As long as the conventional lenders have basically stepped aside from real estate lending, the private lender should have the same opportunities that existed during the S&L Crises, the Dot Bomb Crisis, and the Great Recession.

Of course, nobody knows how long the virus will be around and how long governments will intervene rather than let the virus run its course on its own. A long, protracted shutdown would severely affect every economic situation, but it always seems that the best time to invest/lend on real estate is during the darkest hour. The old adage of buy low, sell high seems to work better than buy high and hope it goes higher.

Even if we do not know how long an economic decline lasts, conservative underwriting can help weather tumultuous times.

As many investors claim, the time you make money is when you buy, not when you sell.


Edward Brown

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns.

Remote Working

Remote Working Trend to Grow Further After COVID-19

By David Mashian

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As we deal with the COVID-19 pandemic remote working is one of the new trends that has been ignited, and it looks like it will be here to stay after this crisis passes. Working remote is the new normal, as far as this quarantine period goes, and it will be a new work option offered employees going forward. In fact, Indeed, the online job board, has created a remote working category for employers and job seekers alike. Companies seeking to tightly manage costs are realizing the cost benefits of a remote workforce, and the trend looks likely that past on-site employees will be shifted to permanent remote positions.

An unexpected consequence is that some of this remote work will be shifted out of state or offshore, where labor is cheaper. A business owner I know was resisting putting his employees to remote work positions, but soon realized that he can also shift a lot of his expensive domestic labor abroad and save costs. Unfortunately, this will have a negative impact for local or domestic jobs.

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On a positive note, people having to live in expensive parts of the country will be able to move elsewhere, save costs, improve their quality of life and keep their job. The Location Premium that employees pay, such as people who work in Silicon Valley tech jobs to be in Silicon Valley, will be mitigated by employees who work remote. In fact, this bodes well for an improvement in quality of life for many people who choose to work remote or go out of state to cheaper areas of the country. Similarly, this will help lessen crowding and traffic in big cities.

Doing meetings virtually has gone up dramatically, and companies like ZOOM, GoToMeeting and others are taking off. Even Google added virtual meetings to its suite of services. I am hearing that busy executives like these online meetings because it saves them time travelling by plane or car, and that they get more done as a result of the time savings. My executive friends say that once their lease on their office ends, they will not be renewing their lease having tasted the benefits of working remote. They like the savings of rent, parking, gas and time.

IMPACT ON REAL ESTATE

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Given the increase of remote working, it is easy to conceive that many companies will start to reduce their office space after COVID-19, so office properties will be directly impacted. I personally have seen tenants moving out of their offices during this pandemic. The flip side to this is that many remote workers will likely want to have flexibility for a workspace of their own, other than their home, so executive office companies should benefit. Companies as We Work, Regus and others will likely be able to take advantage of this shift in the marketplace by getting better locations, and lower pricing. Other contenders include incubator spaces for business and technology startups. Similarly, office property owners will need to rethink what amenities they offer to attract and keep tenants, such as dining, coffee shop, gym, shared space, outdoor meeting space, or even convert buildings to mixed use.

Bottom line, in this crisis, opportunity also looms, and the old players and roles will shift. Accepting the situation and adapting to it by implementing creative vision will bring wealth and success to those who take the risk.


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David Mashian

David Mashian is the founder and CEO for MoneyMac Loans. David started MoneyMac because he personally experienced and realized that small businesses and entrepreneurs could not qualify for loans under the traditional bank lending standards. MoneyMac is a nationwide lender dedicated to providing investment real estate loans for residential 1-4, multi-family, mixed-use and commercial properties. David provides asset-based investment property loans give financing for tough to qualify borrowers, including W-2 employees, self-employed entrepreneurs and small business owners. MoneyMac focuses on the property’s value and the borrower’s credit, without using bank statements or tax returns.

David is a proven real estate industry leader, who has helped many companies transform their business goals to reality. He has a high degree of real estate experience and expertise spanning from real estate finance, brokerage, sales, leasing, brokerage management, and franchising of real estate brokerage companies. Using his wide base of connections to brokers, investors and industry leaders, David has put together many deals for joint ventures, debt & equity raises, acquisitions, and real estate sales. David graduated from the University of California, Los Angeles, and teaches Real Estate Principles at the University of California, Irvine.