Interview with Real Estate Investor Corey. We discuss the current market for investing in residential and commercial properties. Corey goes into detail about the recent collapse in real estate an what he expects to come in the next few years. He goes into detail how investors were hurt, even in moderately collapsed markets and how there is little upside long term in playing the real estate game.

Duration : 0:10:7

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Interview with Real Estate Investor Corey. We discuss the current market for investing in residential and commercial properties. Corey goes into detail about the recent collapse in real estate an what he expects to come in the next few years. He goes into detail how investors were hurt, even in moderately collapsed markets and how there is little upside long term in playing the real estate game.

Corey’s Strategy Moving Forward
http://www.directorslive.com/video/2724/Investor-Explains-Investment-Strategy-in-Downward-Real-Estate-Spiral

Duration : 0:8:11

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Aug. 10 (Bloomberg) — The collapse in commercial real estate is preventing Federal Reserve Chairman Ben S. Bernanke from declaring the economy and financial markets are healed.

Property values have fallen 35 percent since October 2007, according to Moodys Investors Service. Thats making it tough for owners to refinance almost $165 billion of mortgages for skyscrapers, shopping malls and hotels this year, pressuring companies such as Maguire Properties Inc., the largest office landlord in downtown Los Angeles, to put buildings up for sale.

Negative Fundamental

Demand for commercial space comes from employment and the income generated by that employment, said University of Pennsylvania Professor Joseph Gyourko, director of the Wharton Schools Samuel Zell and Robert Lurie Real Estate Center in Philadelphia. Mounting job losses are a really significant negative fundamental, signaling that conditions are going to be tough for the industry for a while, he said.

That may spill over into mounting losses at some banks. Forty-seven percent of loans at the 7,000-plus smaller U.S. lenders are in commercial real estate, compared with 17 percent for the biggest banks, according to New York-based Goldman Sachs Group Inc.

Duration : 0:5:57

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May 23, 2008. The existing home sales came out today with an average loss of $1500 per month for the median US Home price over the last year. Most people have no conception how this is impacting their lives. If you had $200,000 in equity last year, you just lost 7% of your equity. In California, it was probably more. If you had sold your house last year and moved into a rental, you would have zero cost for living in the rental. If you had moved into 2 specific real estate purchases, you could have increased your capital and retained your mortgage deduction. You would actually be further ahead.
Losses in home equity will accelerate for the next year. If you become underwater in your present equity, you could be stuck in your present property for many years or have to come up with substantial separation money to preserve your credit rating.
The foreclosure bailout proposed by the congress is just window dressing in order to forestall a panic. What is going to happen is that this will only delay the panic, not forestall it. If you read the fine print, the lender has to agree to provisions of the bill. How likely is that?
What you see happening in the market today is that 25% of the sales are due to sale of foreclosed homes. Because of the banks holding back inventory, there are at least 4 bids for every sale.This will change shortly.
The subprime loans that are supposed to reset this summer,means that the house are really going to be back on the market by June 2009. The logic goes like this. The notice of reset for August 2008 have already gone out. In August , the owner of the subprime loan is going to do his/her best to make the payments. He will get a 2 or 3 job in some cases. Maybe his wife will too. In any case, the owner uses up his savings and cannot make the payments. This takes 2 months, on average.
The owner realizes it is impossible to continue and finally stops making the payment. His savings are exhausted, and now he has to acquire money to be able to move.He needs the mortgage payment to restore his savings, so he can move. Minimum average move is going to cost $5000 or more.
The lender now starts the foreclosure process. Sometimes the lender takes more than 6 months to prosecute the foreclosure.
Then there is another month or 2 in which to prepare the property for sale.

So, let’s see how this all adds up. 2 + 6 + 2 = 10. 10 months from August 2008 is June 2009.
So the majority of the resets will not even hit the market until June 2009. And the average length of time to sell this property will be 11 months, if not longer. So the minimum time for the market to hit the bottom will be after May 2010.
The average price decline, here in California, will be more than $2000 per month. If you invest in property today, you will lose almost all of your equity.

What no says today, is that the property that has an equity line of credit will also reset to a higher interest rate once the property falls below 110% of the initial loan amount. This is a huge overhang to the market, and could make these loans now subject to default.Who knows where this will end?
Based on this scenario, what is the best way to make money in real estate today?
Sell any real estate that you have, even into today’s declining market. Then wait for the turn in the market to buy back, better than ever. That time is more than 2 years away.
July 27, 2008 update:
As I write this, the senate just passed the foreclosure help bill. The immediate effect is to raise the interest rates on homes. Why? Because the lenders will now have to calculate how they are going to get a reasonable return on their money that they lend. They now have to include the cost of taking a writedown on their loan if the buyer defaults. The net effect of higher rates means that the price of the house has to go down if the buyer cannot increase his payment. In Stockton Calif., 1 house in 25 is now in foreclosure.

Duration : 0:3:0

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What I learned today will have devastating ramification for the real estate marketing and in turn the entire financial and stock market and the broader economy as a whole.

If true…our real estate fate is seal. There will be more housing and real estate foreclosure carnage ahead. The road is long.

Prepare yourself and protect your family from this coming economic catastrophe.

PLEASE RATE, LINK, SHARE and SPREAD the word so others can learn about the real nature of our real estate and economic crisis. Don’t be a sponge to the talking heads that spew only that which benefits them and their bosses. Wake up!
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From L.A Times:

Bulk of bank-owned homes aren’t even on the market yet
“Banks to unleash flood of REOs” at Inman News looks at the effect of foreclosures on the housing market this year:

Inventories of unsold homes are likely to swell in coming months as lenders begin to push a growing backlog of repossessed homes up for sale — often in communities already awash in distressed properties….

Because it can take weeks or months for lenders to put repossessed homes on the market, the impact of real estate-owned (REO) properties on inventories lags behind foreclosures. Government efforts to recapitalize banks through the Troubled Asset Relief Program (TARP) and other bailout measures may also have taken some of the heat off of lenders to unload REO properties at fire-sale prices.

But with the emphasis of TARP and other government relief efforts now expected to shift to creating jobs, helping troubled borrowers avoid foreclosure and providing incentives for home buyers, lenders could soon unleash a torrent of real-estate owned, or “REO” properties — even in markets already flooded with an oversupply of homes for sale.

“It’s almost like a tsunami — you can see it coming and you know it’s going to hit but you can’t get out of the way,” said Ann Stickel, vice president of affiliated services with Sarasota, Fla.-based brokerage Michael Saunders & Co.

So how many bank-owned properties aren’t even on the Multiple Listing Service yet? RealtyTrac senior vice president Rick Sharga puts the number at 75%. That’s a lot of houses.

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Tags: “The dollar collapse” “housing crisis” “financial crisis” subprime hyperinflation inflation economy “economic collapse” “stock market” “stock market collapse” “real estate” fed “federal reserve” money “fiat money” gold silver commodities housing bubble 2009 2008 downfall investing for sale training agent agency selling subprime Peter Schiff Jim Rogers Gerald Celente Alex Jones Ben Bernanke

Duration : 0:7:54

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