Find a REO bank owned property

For those of you who missed the real estate bubble or just got priced out for whatever reason, you may want to think about buying a REO property. REO stands for "real estate owned" as in owned by the bank that loaned a debtor money to purchase the house. When the borrow stopped paying, the bank repossessed the house, and now it is listed with a regular real estate agent. The lucky break for the new buyer is this: Banks are not in the business of owning real estate, and further they need that cash to satisfy reserve requirements! Check out these links:

citimortgage

countrywide bank

bank of america

To give an example, I recently helped a friend find a REO prop owned by a local Maryland bank. She got a contract on the house for no joke 100K less than a comparable house in the same neighborhood. I am now wishing that I bought the place myself, and am sort of hoping her contract falls through!

Is Hillary Sabotaging the Election

So here is how I understand the current state of the Democrat's nomination process: Barack Obama has finished the show, there is no way possible (mathematically) for Hillary to take home the prize. So why is she still running? That seems the be the question everyone is trying to answer.

The popular opinion is what Hillary's camp is saying, which is "Hillary is the better candidate, more likely to defeat McCain in the General Election, and that the super delegates can still hand her the nomination." But what everyone knows is they won't.

So why is she still running? Here's another scenario: Hillary runs the democratic party into a divide (she is already doing it), Obama of course still gets the nomination, but the party is so split and its member so disillusioned, McCain pulls out a victory. Four more years of Bush policy, and Obama is a failure. So what does Hillary's camp do?

They keep campaigning, for four more years, Hillary get the nomination in 2012, and since we have had twelve years of Republicans, Hillary sails to an easy will in the general election!

I hope I'm wrong.

Go Chicken Little Go!

So what do we do now that the sky has finally fallen?

Work hard? Work differently? Keep going like we always have? One item I can confidently advise - save your cash. For one, you may need it. You may lose your job for circumstances beyond your control, and be caught with no income for a while. Two, if you don't lose your job, without cash you will lose some opportunities that have begun to pop up, and will continue to surface over at least the next year.

For example, in my lovely Charles Village neighborhood, there is currently a very large, 3 story, zoned for 3 units, right on a prime Saint Paul block, but does need some work, home for sale. It's been on the market for about 25 days, and sold a year ago for $410,000. Since then its been foreclosed on, and now the bank is trying to sell it for $299,000, and guess what, nobody's buying. I even looked at it.

The problem is the price. It's too high. Hello out there, the sky fell, didn't you see it? Apparently everyone else has.

There are other good "REO" deals right in my neighborhood (REO stands for Real Estate Owned, as in, real estate owned by a bank), and nobody is buying those either. The agents are practically begging buyers to come and take a look.

And it's not only real estate where I expect to see deals to be had over the next twelve months. I would look out for deals on all types of big ticket consumer goods, like cars, appliances, big screen televisions, and pool tables because all the fun expensive stuff will go on sale. It's sad, but ebay and craigslist will also see increased traffic, as people start to sell the big ticket consumer goods they bought when everyone else did, and now they're broke, just like everybody else. If you've got the cash, you'll get the deal.

This isn't only because the stock market is in the tank, or because of the increased difficultly in obtaining financing. These properties are sitting on the market because people are scared. They are scared of the uncertainty that lies ahead. They are scared of $5 gallons of gas, and $6 gallons of milk.

But I don't think the sky falling is anything to be afraid of. In fact, I think it is something to welcome. Go ahead, exhale, the party is taking a break. Now's the time to run to the bar and grab a drink, while the line is short, and if you have to go, go to the bathroom now, because pretty soon everybody will be back and you'll never get in!

Remember the last time the sky fell? The last time the party took a breather? It started in the very beginning of 2000, the Nasdaq bubble? Remember? Funny how the world has such a short memory.

I've said it before and so have many others: Get greedy when everyone else is scared.

Delayed Gratification

Some of my earliest and clearest memories are of visits to my father's parents' house. My grandfather had a club basement, complete with real oak panelled walls, a gas fireplace, a built-in couch with a large back-lit photo of Capri behind it, and a glass block bar with multi-colored lights inside. My grandmother liked to bake, and she was somewhat famous in their town for her pound cake. It was so good it'd make a grown man cry. Or at least beg.

She made the icing too, and it was just like fudge, only it was icing. I would eat large amounts of this cake whenever we had occasion to visit them. The cake part was good, better then I knew at the time, but for me, the real treat was the icing, which I would eat last.

I was born with the concept of delayed gratification. I always saved my best assets for another time, for a time when they would become more valuable, or more sweet.

I really never had to learn this behavior, or if I did, I taught myself, because I'm not too sure my parents ever learned it, at least not as well as me.

How do you teach this? I don't know that, but I am sure it can be learned. How many 'successful' friends do you have that you know didn't save a nickel a of that 100k they brought home last year? What did they do with it you ask? Maybe they can't answer that, but I can tell you: They devoured it, like a freshly killed animal they dragged back to their cave. They brought it through the darkness of the cave, over to where their families, friends, and other tribe members waited by the fire. Then together, they tore it apart, raw. Then it was all gone.

What is it worth if you don't save any of it? Lots, if you're only here for a moment. But you're not here for a moment. If fact, with modern science, you may be here for a very long time, longer than any previous generation. So get to it, go out and save, leave the leg, freeze it, save it for the winter, it will be cold, and you WILL be hungry!

"Be fearful when others are greedy, and be greedy only when others are fearful." Warren Buffett

Amen.

Hope for the Same

My first official tax season is coming to a close. I of course have a few clients who have yet to bring me their info, and some who have only brought me some info. For the year, I am going to get modernized with some software updates, and also get together a mailing for next year to current clients. I can also now begin to focus more energy to getting our home improvement business up and running.

I have one client who I've agreed to work with who really needs me to do the write-up work for throughout the year. She is one of those clients who went to art school but thinks they understand accounting anyway, seriously. It's going to turn her return into a nightmare. I have been coaching her somewhat on bookkeeping, but to date she insist on taking care of it herself. This is going to be tough, she is unreliable, but can pay the bill. Honestly, if she wasn't a close friend, I wouldn't be working with her. I guess I'll do my best, and hope for the same.

As far as working for myself, all I have to say is: its hard work and its scary, but dam it sure beats sitting in the office with the chumps! (Did I mention that, for now at least, I am still sitting in the office with the chumps?) I am, but I am working my way out, creating my own path. So for now I'll do my best, and hope for the same.

Crazy People Have Tax Returns, Too

Crazy people have tax returns, too, or so I have learned. Yesterday I had to turn away a return. Sorry, but I'm looking for good long term clients, and I am in a position to wait for them. It was a tough decision, I don't want to turn away work right now, but I realized that if I am not willing to turn away clients who I have no interest in working with, what is the point of being my own boss?

This week I think I have three individual returns to do, which should work out well. Not much work, but all good people, good long term clients.

I also have a plan to call a friend's father who is a CPA, retired from his full time job, and does returns during tax season, makes like 60k a year just doing that. I need some business guidance, some questions answered, maybe find out what kind of continuing education he participates in over the year.