Weekly Real Estate Kick-Off

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So here’s what the start to your week should look like:

  1. NOW – sign up for Greg Clement’s informational SIMS Webinar tonight at 9pm EDT.
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  3. TONIGHT – Sign on to the SIMS Webinar at 9pm and get ready to have your socks knocked off!
  4. NOON TUESDAY – Secure your copy of SIMS through this special link to get my INCREDIBLE BONUSES for FREE!

I’ve created TWO special bonus packages to help you get the absolute MOST out of SIMS and make more money, give you more freedom and let you enjoy life more than ever – make sure you check them out now!

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July 12, 2010 - This Week’s Topics:

  • Tax Credit Deadline to Close Extended
  • Fannie Mae Trying to Stop Jingle Mail
  • Inmates Receive $9M in Tax Credits
  • Housing Double-Dip Underway
  • Office Vacancy Rate at 17-Yr. High
  • Good School Districts Influence Housing Values
  • Overcoming Procrastination

Tax Credit Deadline to Close Extended

Homebuyers who took advantage of the tax credit program late in the game are getting a little relief, as the deadline to close on a house was pushed back to September 30. New legislation gives home buyers an extra 3 months to complete their purchases and still receive the $8000 tax credit. This extension only applies to those who already have signed contracts – not those just starting the process. The National Association of Realtors estimates that about 180,000 buyers needed this tax deadline extension. A lot of holdups were the result of the mortgage approval process. Lenders were flooded with buyers rushing to close before the original deadline. Without the extension, some buyers would have just walked away from their deals – going so far as to include clauses in their contracts to let them out of the deal if they didn’t close by June 30.

Fannie Mae Trying to Stop Jingle Mail

Fannie Mae is trying to convince troubled homeowners to find alternatives to foreclosure by banning those who just walk away from getting new loans for seven years. The new policy targets those who have the capacity to make some payment arrangements but just refuse to do so. Fannie Mae is trying to deter strategic defaults, which have become increasingly common where homeowners are “underwater.” They will also seek legal action in places where the law allows, in an attempt to recoup their outstanding mortgage debt. Freddie Mac is watching this new Fannie Mae policy closely to see if changes would be needed to their current five-year wait time. Fannie Mae holds that homeowners who make a good faith effort to resolve their mortgage situation will be eligible for new loans in a shorter period of time.

Inmates Receive $9M in Tax Credits

Here’s one for the “You’ve Got to be Kidding” file. A government investigation last week found that nearly 1,300 prison inmates wrongly received more than $9 million in homebuyer tax credits, despite being locked up when they claimed to have bought a home. It gets better… 241 of those inmates are serving life sentences. All totaled, more than 14,100 taxpayers wrongly received nearly $26.7 million in tax credits, designed to boost the country’s housing markets. Some taxpayers received credit for homes purchased before the tax credit program started. In other cases, multiple taxpayers used the same home to claim multiple credits. One home was used by 67 taxpayers to claim credits! As you can imagine, the IRS is working on getting the money back, promising “swift and appropriate enforcement actions.” They claim to have aggressively enforced the tax credit, blocking 400,000 questionable claims and opening 150+ investigations. So how did the inmates slip past the watchful eye of the IRS? The IRS does not keep up-to-date records of who is in prison, and prisons are not required to provide that information to the IRS, although many do so voluntarily. Ironically the IRS also discovered 87 of their own employees improperly claiming the credit.

Housing Double-Dip Underway

A second dip in housing is underway – stalling the recovery that began in early 2009. Zillow is preparing to release numbers that shows a 1.7% decline in home values nationally for the first five months of the year. The numbers vary across the country – with some cities showing rising home values (San Diego, LA, Boston), while others show a decline (Las Vegas, Miami). Sources like Radar Logic, which tracks home values based on transactions, reports that while they have seen a slight increase in home values, it’s most likely due to the spring season and the tax buyer credit program. Analysts at Goldman Sachs are anticipating a fall in housing values of 3%, with cities like Las Vegas, Portland and Seattle the hardest hit due to rising mortgage delinquencies and high home vacancy rates. With inflation at 2%, any decline in home values is apparent to home owners. Barclays Capital estimates that as many as 500,000 homes are in the hands of lenders. Eleven million mortgages are currently delinquent.

Office Vacancy Rate at 17-Yr. High

The office vacancy rate in the US rose to a 17-year high in the second quarter as the dampened economic recovery reduces the demand for corporate tenants. The rate is up from 16% the previous year. Effective rent, or the amount tenants actually pay landlords, fell 5.7% from the previous year. Private employers made fewer hires in June than predicted, and payrolls fell for the first time this year due to a drop in census workers. The amount of new office space created was also at a low point – with only 7.7 million square feet completed, one of the lowest amounts since 1999. Office vacancies increased in 49 of 82 cities tracked by Reis, Inc.

Good School Districts Influence Housing Values

Schools have a huge impact on housing values.” Words directly from a real estate agent’s mouth. We’ve long known this to be true, but today it’s felt more than ever by parents who are house hunting in neighborhoods that lie within a good school district. It’s a buyer’s market, sure, but that’s not always the case for parents looking to relocate to a specific neighborhood with a great school system. For them, the bargains are hard to come by and few and far between. “Areas with exceptional schools tend to hold their value better than the market overall,” explains the president of a real estate data analysis company. While house prices in those much sought-after areas may have fallen, they still command a premium compared to the rest of the area, just outside of the school district. Areas with good schools tend to be more affluent and less susceptible to the sub-prime mortgage mess, resulting in fewer foreclosures. Plus, homes in those areas tend to sell faster. The bottom line? Parents who will do virtually anything to live in a certain school district for their children, whether it means paying more for a house, settling for a smaller house or increasing their own commute to work.

Overcoming Procrastination

We all do it… we all procrastinate at some point. But here are some good tips I came across and wanted to share with you about how to overcome procrastination and become more productive each and every day:

1.    Get yourself to show up... just get started.

2.    Go through the motions...  (It's amazing what happens when you just get warmed up and DOING!)

3.    Do it imperfectly (write a draft, take a stab at it, don't worry if it isn't perfect.  In fact, set out to do it imperfectly so you lower the pressure on yourself.)

4.    Do it now!  Do it now! Do it now!

5.    Get an "accountability partner" for your business.

6.    Use your mastermind group and make a realistic commitment.

7.    Set a cool reward for yourself when you reach a goal.

8.    Make it a game (I will sometimes set a countdown timer going and see how much of project X I can finish in 30 minutes.)

9.    Get clear on what you are really afraid of... accept that possibility and get on with your life.

10.    Develop your integrity to the place that when you speak it, you do it... learn to become more committed to your integrity than to your comfort zone

Hope your week is filled with real estate investing success.

Until next time… ~Josh

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