Redistributing wealth through real estate. Las Vegas home owners wiped out

What is Fannie Mae doing with all their property that is not hitting the real estate market in Las Vegas and other hard hit cities?  In Las Vegas a lot of property is in limbo because of the anti robo signing laws that were passed in Nevada but many states are seeing hundreds of foreclosed home being sold in bulk to private companies.  Hundreds of properties are being sold at a time to large private investment companies with very favorable terms and small capital outlays.  These large companies are getting sweet deals with little up front capital investment. 

Here is an excerpt from a story I read today at Naked Capitalism. 

Fannie Mae sold 699 Florida properties, appraised at $81.5 million, for $12.3 million cash to San Diego based Pacifica Companies. In exchange, Pacifica must rent the homes, paying Fannie another $78.1 million from rental proceeds, but during that time Pacifica is allowed to keep a 20-percent management fee plus 10-percent of rental proceeds.

If that doesn’t sound like money for nothing, like the song goes, Fannie sweetened it by adding a trigger allowing Pacifica to keep 50-70 percent of rental proceeds, depending upon performance, after Fannie’s been “paid” (read: collected rent) amounting to $49.3 million.

Finally, adding insult and injury – to the American taxpayer and the former homeowner – Pacifica can eventually sell the houses and keep the proceeds or use them to pay off the expected rental income stream faster.

You can see how the public is not being able to bid on these properties and the small investor is getting left out in the cold.  Not only are we seeing the transfer of wealth out of the home owners hand, we are seeing it put into corporate hands without anyone else ever having a chance to buy property at such great terms.  The very vehicle for the small investor, real estate, has been taken away by real estate meltdown.  Now quasi government agencies are dictating this redistribution of wealth out of the hands of the common citizen and into the large investment companies.  The long term effect of the Wall Street grab to take away the last hope for the little guy, real estate investing, has now come full circle.  It is likely millions of properties taken back by Fannie Mae will end up in the hands of corporate America, who will become some of the nations largest land lords. 

It is hard to believe but it is actually happening.  Bank owned or repossessed homes have often been some of the best deals for new investors, small time investors to get started building their portfolio.  Now many of these properties are not evening seeing the market as they are sold in bulk to large companies at very favorable terms and interest rates. 

How long will this continue? Will it forever effect the real estate landscape and permanently be a massive redistribution of wealth?  It seems like the massive real estate meltdown has actually helped the rich get richer and the average and middle class citizen get poorer and poorer. 

READ MORE on Pacifica HERE

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Freddie Mac Preferred Punishing Banks To Helping Homeowners « Dealbreaker: Wall Street Insider – Financial News, Headlines, Commentary and Analysis – Hedge Funds, Private Equity, Banks

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Chris LaHaie Realtor
List with Chris
Prudential Americana Group,
Las Vegas, NV chrislahaierealestate@gmail.com

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Chris LaHaie RealtorList with Chris
Prudential Americana Group,
Las Vegas, NV
chrislahaierealestate@gmail.com
702-338-8526

Income Property Las Vegas: Income property and commercial financing

There are many things to consider when starting a venture into real estate investing.  Whether you are looking for real estate in Las Vegas or any state in the country, there are a few things anyone needs to understand before they begin.  One of the most important distinctions is the differences between residential financing and commercial financing.  Starting out with a 4 unit or less property will allow buyers to obtain favorable residential financing which most lenders have several options at their disposal. 
The game changes once you get to five units or more.  This type  of income property is considered commercial and commercial financing is necessary.  This can change the terms and the rates considerably and add substantial to your down payment costs.  It is also more difficult to qualify for 5 unit rental property if you have little or no experience in managing 4 unit or less real estate.  If you wish to jump right into the 5 unit and above real estate you will be best advised to look for seller financing.  If you have large down payment your search will go much easier but you can find ways around not having a bundle of cash.  It is not easy but it can be done.  It may take longer to find the right fit for you and the right property owner but motivates sellers are always out there waiting for the right buyer. 

Read the following article on income property financing by following the link below:

Income Property Las Vegas: Income property and commercial financing: If you are considering an investment in income property or a larger multi-unit property you need to have a sold business plan and strategy....

Consider It Sold Las Vegas: Short Sale? Yes or NO?

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 Is a short sale the prudent thing to do at this time in the housing crisis.  If you are in Las Vegas you might want to give it a second look.  The situation for real estate here may not change drastically for years.  It is still in  question as to real estate in Las Vegas is on the upswing.  We have seen temporary shifts up in price primarily due to the shrinking inventories and lack of traditional seller with equity.  Many people have no chance of selling their home in the next 10 years if they don't consider a short sale.  The following article from www.consideritsoldlasvegas.com gives more of the story: 

A short sale in Las Vegas? Is it reasonable to consider a short sale? Or can you wait until the real estate market catches up to your mortgage? These are all questions nearly every home owner is asking in Las Vegas. Some people have seen their property values drop nearly 60% and have little hope of ever getting back to break even. This is a heavy thought to carry every month when you are making your mortgage payment or shelling out bucks to do home repairs and maintenance. It is a reality that your house may have become an albatross around your neck. The once thought of sure thing has now become a major liability for most people living in Las Vegas. Selling a home in Las Vegas has now become a pipe dream for most people and the short sale is the only option.

It is unfortunate but it may be the smartest financial decision you ever make. Even if you have to rent for a few years before you could buy another home, you are likely to be saving. If you factor in the upkeep and repair costs and insurance costs it makes little sense to keep paying for a home that will never give you a dime. In the past owning a home was a sure way to plan for the future to prepare for retirement. Real estate was always the best and safest place to keep your money. We have seen that reality get set up side down recently. It is not clear if real estate will ever be the savior of our economy as it was for many years. The past few years have cost many families their entire life savings as well as their kids chance at college. People have tried hard to do the right thing and meet their obligations but the powers that be seem to have no interest in keeping the institutions with the money accountable for their actions. It is really time to make a business decision regarding such a personal investment.

This is extremely difficult but it is the only way out in many cases. The advice "cut your losses" never seemed to apply so well do a situation as it does to a home that is worth half of its mortgage. The morality argument can be thrown out the window. Making a sound business decision and moving on to better things is nothing more than being practical and wise. Tomorrow is a new day and a new opportunity to create the future. It may just take a short sale to give you that chance again.

Chris LaHaie Realtor
List with ChrisPrudential Americana Group,
Las Vegas, NV chrislahaierealestate@gmail.com

Is the economy a lost cause? - 1 - - MSN Money

Is the economy a lost cause? - 1 - - MSN Money

New research here from Northwestern University this is PDF file of a great paper! 

This is a very interesting theory and could mean we are in
 for a not so bright future.  I hope we are going to see technology improve the economy down the road but it seems for now it is not working to increase the standard of living in the country.  It may be creating jobs elsewhere and it may be that we have more new gadgets that are dropping in price but it is questionable as to whether or not we are progressing as a society.  Or have we just gotten used to unrealistic prosperity?  This research makes an interesting case for the "new normal" might not be so great. 

Imagine our economy right now if the people were not making money on the Internet or if the cell phone companies were not generating so much income just by selling data packages?  It seems as we have gotten into the information age we have become more efficient at getting things done more cheaply and with less people.  Also we have found ways to get labor for far less pay in other countries.  It is the way of free trade but also maybe just a product of the times and how things evolve. 

It is also interesting to see just how devastating the housing market collapse has been on the country.  the government took for granted the goose that was laying golden eggs for years.  They took their eye off the ball and let Wall Street kill the goose.  The housing market and industry was the only thing left that was keeping the country prosperous.  In typical fashion the politics of greed and self preservation caused the average American to get wiped out. 

We have lived with trust that our homes would not depreciate 50% and that we could count on this to help us through retirement.  We were lulled to sleep by the politicians and the magicians on Wall Street as they pillaged the last golden goose of the age.  With the housing market down and out, jobs can not recover.  There is no way to make up for all the construction, title, appraisal, realtor, handyman and mortgage banking jobs lost due to the housing crisis.  As we watch both parties pander as well as the can to either side, it is clear that neither party will likely do what is necessary to allow Americans to ever regain their trust in our financial institutions and our government. 

We know banks are getting a free ride and a bailout on top of a bailout when they are getting paid several times over for a toxic mortgages they have bestowed on the taxpayer.  It it time to figure out how to generate an income that is based in technology and the Internet.  It looks like the future of the jobs market will be weak for years and that wages will be down for a number of years.  It might become a necessity to have a home based business of some kind even if people are employed full time. 

We can only hope for better times ahead.  What I have seen so far this year and in politics it does not appear that anyone in Washington really gets it and likely the newly elected will follow the same path. 

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Wells Fargo Named In Multi-Million Dollar FHA Mortgage Fraud Lawsuit | FHA News and Views

Wells Fargo Named In Multi-Million Dollar FHA Mortgage Fraud Lawsuit | FHA News and Views

This looks to be a very interesting case.  See the full article at the link provided. 

Investment Property Insurance and what to cover.

I have been managing real estate investment property for many years.  I am a big believer in having the right insurance to cover your assets and to avoid major disaster.  However, there are things insurance will not normally cover that can cost you a small fortune.  Over the past 20 years the two things that stand out in my mind regarding insurance policy coverage are: Water damage and flood damage and Personal Liability issues.

Typically you will be covered for fire on your rental property but at times you may not be covered for water damage caused by flooding or by a leaking roof.  It is very important to read your coverage and confirm with your insurance agent before you relax and rest easy.  There are many ways for insurance companies to defend against payout when it comes to water damage or leaks so it is necessary to be very clear as to what will be covered in your rental property.  Ask your agent if you will be covered when a pipe breaks in the middle of winter during a tenant changeover.  Then make sure that your pipes can withstand a few cold nights in case the power or gas is ever shut off.  This is especially important if you are living out of town that is miles away from your unit.  Most people will swear they will never have power turned off at an apartment but when you have tenants in a property and they are responsible for the gas bill, things can happen.  In certain cold weather states it against the law to turn off gas during the coldest months of the year so they often decide to turn things off right before the cold weather date hits and if the tenants do not pay the bill, the power could be off for several days before you find out.  I cold snap could cause major damage to your copper pipes.  Typically pipes will not burst due to cold after just a day or two but it is important to be sure you are covered in case of emergency.

Your insurance agent may not be as concerned as to what is covered as you are and may not be clear about the details of your coverage if you do not ask the right questions and if you do not shop around to get the best deal.  Insurance agents have a huge incentive to just get you locked in and collect a premium because they know most people rarely change insurance and rarely make claims on rental policies for minor claims.  Protect yourself and your interests by being an informed consumer and know the details of your income property insurance policy. 

The other thing I have learned that is important is that if your tenant falsely accuses you of an assault your insurance typically does not cover any legal fees or cost necessary to defend against bogus and frivolous law suits.  If someone accuses you of an assault the insurance typically has an exclusion to this type of coverage.  So even if you are innocent and have not done anything wrong, the fact that someone has accused you of something means your insurance will not cover you in this matter.  Of course that is unless you pay extra in the beginning and get a special rider that will cover you against you get sued for assault by a disgruntled tenant or by someone trespassing on your property.

It seems more likely in Las Vegas I suppose because the over abundance of lawyers here and the fact that often people will decide to settle if they have any degree of guilt or any fault in the matter.  It can just be for $10,000 or $50,000 but there are lawyers who will work on a contingency basis and file suite against a landlord if they think they can get a quick and easy settlement.  If you are guilty of assault it may be in your best interest to hire a lawyer and work out a settlement but if you are not guilty and have not touched your tenant or harmed them in anyway then you need to fight this claim and not allow it to be settled.
I have dealt with a bogus claim recently and refused to even consider a settlement or even hire a lawyer.  The absurd case went on for nearly a year and it did cost me over $500 in order to answer the charges and to claim my innocence.  It was several hours of my time as well and a lot of aggravation wondering what would happen and how to get beyond something so silly.  It went as far as the mandatory arbitration hearing.  I was informed when I arrived at the hearing of the changes to the case.  Apparently the lawyer was informed by his clients to withdraw the case and not move forward toward a court date.  It was a big relief to know that the truth came out and that the plaintiff had not one shred of evidence to substantiate the claim.  It was a complete falsehood.  The plaintiff had filed an false police report and incurred several charges in the emergency to try and set up the ruse.  He even went as to far as to have the ambulance come to take him to the hospital for his alleged injuries.

I had never dreamed it would be necessary to have an insurance policy to cover me in case I was accused of an assault and battery.  I didn't realize that it didn't matter if I actually did anything or not and that if you are accused you have to pay to defend your good name and reputation.  After nearly 20 years of being a landlord and dealing with many wonderful tenants and a few bad ones, I learned just how low some people will go if they have an unwarranted feeling of entitlement.  However, I still believe real estate investment property is the best way to generate income and to plan for your retirement.  There are so many tax advantages when generating passive income.  Also real estate is the best vehicle to get started investing because you can often get in to a property with less than 10% of the total cost of the investment. 

Read more about using leverage to get started in Real Estate Investing Here at  Income Property Las Vegas and read the article Leverage and Investing

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Chris LaHaie Realtor
List with Chris
Prudential Americana Group, Las Vegas, NV
chrislahaierealestate@gmail.com

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Chris LaHaie Realtor
List with Chris
Prudential Americana Group,
Las Vegas, NV
chrislahaierealestate@gmail.com

Consider It Sold Las Vegas: Short Sale Still May Be Best Option in Las Vegas

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Chris LaHaie RealtorList with Chris
Prudential Americana Group,
Las Vegas, NV
chrislahaierealestate@gmail.com

Global Growth Slowing at wrong time

It is a reality that global growth is slowing and it could not be worse timing for the United States.  As the housing market struggles to recover in Nevada, AZ and CA, the job market is not growing strong enough.  If the overall world economy declines it could have devastating effects on the housing recovery in the US.  We are already seeing sales declining in CA and NV even though prices seem to be rising.  The problem is lack of inventory but if more people lose their jobs or stay unemployed for longer and longer the housing recovering could be stalled in its tracks. 

It appears as though Las Vegas is lagging behind everyone in terms of real estate recovery.  The recent stats from September show that the short sale and bank owned sales are still accounting for nearly 60% of sales in the city.  Traditional sales, also know as equity sellers, are on the rise but they still make up only 41% of the September monthly sales.  The big change has been in the increase in short sales.  The number is staggering and it is almost unbelievable.  Short sales in Las Vegas made up 45% of the real estate transactions in September 2012. 

It is amazing to see that nearly half of all monthly sales are short sales.  All of these people have given up on the hope that they will ever get back to even with their underwater home.  It is the best decision for most people and with the economy slowing world wide, it probably will become a better decisions for many more people.

The new solution for the government and the banks has been to encourage the short sale.  It really is not the best solution but it is a way to clear some of the bad mortgages off the books of the too big to fail banks while still not letting people think people are getting special treatment because their home is worth less than their mortgage.  So it seems politicians and government officials have worked a deal to allow the banks to get more money out of the people under the disguise of the short sale.  Several government programs will be supplementing bank losses on short sales and in turn the government is being less strict with banks when it pushes for stress tests. 

We need to get the housing recovery on stronger footing and the current solution is to allow people do a short sale.  It will help the market and the economy if we can clear out many more underwater homes, especially in Las Vegas, but it really may hurt the market as well because most people who short sale are not able to buy another home for several years.  The housing market has always been driven by people moving up or moving to a new place.  The American dream was to buy a house and build equity, use this equity to move into another larger home or home in different area.  Now as we have seen record sales last year in places like Las Vegas, we are running the risk of much lower sales. 

The high sales volume in 2011 was driven by the extreme low prices but as prices increase the demand from investors is sure to slow and their will be few move up buyers to fill the void.  Hopefully, we will see the economy start to grow more and then more buyers will be brought into the housing market as the abundance of underwater homes are cleared from the landscape. 

If you are considering a short sale or traditional sale in Las Vegas go to  www.consideritsoldlasvegas.com and get a free evaluation for your current situation. 

Mirabile Dictu! The Media Notices the Sucking Sound of Growth (What Little There Was) Leaving the Economy and Underplays IMF Malpractice « naked capitalism

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IMF Slashes Global Growth Forecasts - 24/7 Wall St.

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Chris LaHaie Realtor
Prudential Americana Group
Las Vegas, NV chrislahaierealestate@gmail.com

FHA Mortgage Insurance Premiums May Rise To 2.05%

 Mortgage insurance premiums may be on the rise rat and it will effect homeowner's monthly payment.  Even with interest rates as low as they are this will reduce the amount of home that can be purchased as borrower ratios are effected. 



FHA Mortgage Insurance Premiums May Rise To 2.05%

Chris LaHaie RealtorList with ChrisPrudential Americana Group, Las Vegas, NV chrislahaierealestate@gmail.com

Consider It Sold Las Vegas: Short sale of an underwater home

Consider It Sold Las Vegas: Short sale of an underwater home

Chris LaHaie Realtor
702-338-8526
List with Chris
Prudential Americana Group, Las Vegas, NV
chrislahaierealestate@gmail.com