Minnesota Real Estate Investors Association, Inc.

I know you have heard about Land Trusts and you know that you should be using them. But I know you and you haven’t gotten around to using them yet. You believe that Land Trusts are too complicated and you just haven’t had time to learn and completely understand them, but you will get around to it one of these days.

Trusts have been around for centuries and there are tools that the rich use regularly to protect their assets. Land Trusts are a very special type of Trust that was created to protect your real estate investments, whether you are a landlord who holds real estate for the long term or a wholesaler flipper who only owns the property for 5 minutes.

There are several reasons why people use Land Trusts, but the most important one to me is the Privacy. No one knows what I currently own or what I have owned in the past and that is comforting to me to know that no one will ever be able to find all my assets if they get the bug to sue me for any frivolous reasons. 
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Let me start out by saying that I generally try and stay away from political comments. I prefer to stay on topic and discuss the facts, but this time I have no choice but to comment on politics. This latest round of political games has my blood boiling and I can’t hold back any longer.

Congress just passed another $1 billion dollar emergency homeowners relief fund. You can read all about it on MarketWatch, here is the link: www.marketwatch.com.

Were shall I start?

I guess I will start out with the phrase “emergency homeowners relief”. Emergency, really??? The emergency was almost two years ago when they pasted the TARP funds to help, if you remember, homeowners and bail out the banks and financial institutions, but once the TARP funds were approved by congress, they decided it would be better to just buy stocks in the companies they chose to keep solvent. It didn’t seem to be that much of an emergency to congress in 2008, otherwise they would have spent that money on what they told us was the reason in the first place to pass the TARP funds. I think the only reason it is an emergency right now, is because the midterm elections are in 4 months.

So now that we understand the congressional definition of an “Emergency” we can then start to talk about the facts. They are as follows:  
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Real Estate Investing requires us to maintain a buyers list, seller leads, and other various prospects. Now that more investors are using the internet for real estate marketing investors need a way to maintain those lists in efficiently and effectively. This is where Auto Responders come into play...

When you are taking your real estate marketing online you will ultimately be obtaining emails that need to be catered to in certain ways. In fact, there are two major elements to any auto responder: On the one hand you have the auto responder itself which is a program that sends out a series of emails to a lead. This works particularly well for following up with seller leads leads because the actual content doesn't require any updating. On the other hand we have the broadcaster which sends out one single email blast to a list. This comes in particularly handy with buyers and investors that you will be updating with the most current content.

Finding quality information on using auto responders can be a daunting task. So what we have to together in this post is a list of recommended readings the will give you a great foundation for learning how to use auto responders.

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It probably won’t work for you if you still think that it won’t. I used to think that for a few years because I wasted a lot of money on direct mail marketing a few years ago, so I stopped direct mail and migrated to online advertising and that worked for a while. But the pendulum has swung back again and I am now getting some good results from direct mail marketing again.

My response rates are still low, but the responses I am getting are better quality leads than I have been receiving from online advertising and fishing through the MLS. I started a couple marketing campaign s a couple of months ago, with little to no results. But I just started hitting the same list a second time and in the past week, I have received 4 good leads. One I have an offer in on a free and clear property, one the seller is still stuck in fantasy land and the other has two rental properties that need short sales, but the numbers look good enough to try them. 
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In the 11th inning, the House of Representatives finally passed the closing date extension to September 30th for the first time homebuyer’s $8,000 tax credit. This is good news as an expected 180,000 transaction that were successfully signed and finalized by the April 30th deadline that supposed to close by June 30th, didn’t close.

There are many reasons why these transactions are taking so long, but the primary reason is because the most of those transactions are short sales and getting to the closing table with short sales can be a headache to say the least. But now they have an additional 90 days to rap them up and close by September 30th. 
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Many Real Estate Investors start out rehabbing properties to resell for a profit. Many of these investors eventually migrate to wholesaling or become landlords, but some become experts and just keep on rehabbing. Most rehabbers build a system and once they have it fine tuned, don’t deviate from that system. If they build a system rehabbing rental properties for landlords or for first time home buyers, then that is what they always do, because it works for them.

However, a few rehabbers make the leap from rehabbing properties in low to middle income neighborhoods to rehabbing properties in upper middle class to affluent neighborhoods. But very few move beyond that and take the step to rehabbing extremely expensive houses. And even fewer are true visionaries.

A close friend of mine, which many of you already know, Robyn Thompson, the Queen of Rehabs started out rehabbing multi-families in firs time home buyer neighborhoods in Connecticut. She then took a huge leap in faith in herself and her abilities and now rehabs multi-million dollar mansions in Florida. That is something that I hear a lot of people say is too big of a rehab, and to those people I say, you are just not thinking big enough. 
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Look at the drop starting on May 1st. This graph should be all you need to realize that the first time home buyers tax credit drove a lot of sales at the moment, but they would be sales that were pulled forward. In other words, if the tax credit wasn’t there, the sales would probably still have happened, but they would have been spread out over time rather than pushed back into April.

First of all, the banks are short staffed, so they can’t file NOD (Notice of Defaults) and complete the foreclosure process as fast as new borrowers are falling into default. The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics. That is the first part to Shadow Inventory.

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This has also created other problems. I had a closing that kept getting pushed back because FHA hadn’t review the file to release the funds because they were so backed up. We finally closed last week and from talking to the buyers at the closing, they just wanted to close before they lost the credit, but it wouldn’t have stopped them from buying, they just bought now rather then this summer when they originally planned on moving.

You may have heard this term thrown around lately, but what the heck is it? Shadow Inventory is basically inventory that hasn’t made it to the market yet. There are several components to Shadow Inventory.

First of all, the banks are short staffed, so they can’t file NOD (Notice of Defaults) and complete the foreclosure process as fast as new borrowers are falling into default. The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics. That is the first part to “Shadow Inventory”.

Secondly, a lot of lenders that are taking properties back through the foreclosure process are supposedly holding on to them through holding companies and not releasing them to the market. Their reasoning is actually a valid one. They are afraid that if they release too much inventory to soon, housing values could plummet. And I agree with that assumption, but I am one who prefers to rip the band aid off quickly.

I have heard and read, but n
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According to the EPA: “Common renovation activities like sanding, cutting, and demolition can create hazardous lead, dust, and chips by disturbing lead-based paint, which can be harmful to adults and children.” Just in case you were stuck in the stone age, the EPA thought we needed to be reminded of this fact.

EPA:
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To protect against this risk, on April 22, 2008, EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning. Under the rule, beginning in April 2010, “contractors performing renovation, repair, and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.”

After April 22, 2010, property owners who perform these projects in pre-1978 rental housing or space rented by child-care facilities must be certified and follow the lead-safe work practices required by EPA's Renovation, Repair and Remodeling rule. To become certified, property owners must submit an application for firm certification and fee payment to the EPA. The EPA began processing applications on October 22, 2009. Afterwards, the agency will have up to 90 days after receiving a complete request for certification to approve or disapprove the application.
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Only mere hours ago we all saw live the Dow drop near 1,000 points in a startling amount of time. As I’m writing this the market has “recovered” but such volatility will not leave the minds of those who have their savings and IRAs in a stock portfolio that is certainly showing more red than they are accustomed to. To think that such a small country like Greece can trigger such waves because of the liquidity has compromised the integrity of the stock market and the following stories, finger pointing and possible domino effect that may be looming will leave these investors looking for a safe haven.

Suddenly the idea of investing into private money secured by real estate is looking a lot better
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