Financial Strategies by Bill Roberts

Fair Isaac: Fair Or Unfair?

Fri, 10 Oct 2008 13:01:33 -0500

Fair Isaac: Fair Or Unfair? By Bill Roberts

The Fair Isaac company rates everybody's credit.

They do it for the banks and mortgage companies.

It is called your FICO score. FICO stands for Fair Isaac COrporation.

Because of the turmoil in our economy many people are seeing their credit scores plummet.

Is that fair?

The banks can't manage their own affairs. A lot of them are BANKRUPT. Many more are in big trouble. They aren't credit worthy yet they have gotten over a TRILLION DOLLARS of credit from us. The U.S. Government (that's us) has bailed them out.

It is time for them (the banks) to ease up on credit requirements to get things going again.

Who are they to demand better credit from us in order to borrow money than they themselves have? Their credit stinks.

Such Arrogance

It is time that we demand Fair Isaac to shut down FICO.

If we are going to "forgive and forget" that the banks are not credit worthy, then they should do the same for us.

Our economy needs credit in order to function. We need to be able to buy cars, refrigerators, and houses. We need credit. We all need credit, not just those with 700 credit scores.

Those arrogant bastards will only lend to you if your credit is unblemished even though they themselves don't have unblemished credit.

America needs fairness in credit. We don't nee (or want) Fair Isaac.

Our credit mess wasn't caused by people buying houses without a good credit score.

Our credit mess is the result of our financial institutions behaving very badly and not taking into account what would happen if real estate prices fell.

Well, real estate prices did fall, and as they fell the housing speculators (the flippers) couldn't maintain their investments. They needed prices to go up in order for them to get back their purchase price, their holding costs, their transactions costs, and everything else that they paid.

When prices went down they couldn't get their money back. They bailed out of the market. Prices went down some more.

People who had bought on the upswing found themselves UPSIDE DOWN. They owed more than their house was worth.

As their adjustable rate mortgages (ARMs) reset or recast they found themselves unable (or unwilling) to make their payments. So they bailed out of their houses too.

Foreclosures were rampant. Prices were in FREE FALL.

Everybody has been affected by this situation.

See my posts:

Are Foreclosures Good For America? Part 4

Are Foreclosures Good For America? Part 3

Are Foreclosures Good For America? Part 2

Are Foreclosures Good For America?

Now it is the time to turn this around.

Easy Credit

What we need is EASY CREDIT, not tight credit.

If we can lend a TRILLION DOLLARS to the unworthy bankers without checking their credit, then they can lend to us without checking our credit.

Fair Is Fair

And to be fair we need to do away with FICO scores.

Fair Isaac is UNFAIR. They are paid by the lenders to rate our credit. These same lenders who can't keep their own credit good are asking us to have exemplary credit in order to borrow some of this money that we lent them IN SPITE of their credit.

Think about it, Is This Fair?

Our economy really needs to turn around. The manufacturing sector needs to go back to work. People need to buy cars, appliances, and other things. They need credit. They need EASY CREDIT.

The housing market needs to be stabilized. People need to be able to buy a house. They need mortgages. They need EASY MORTGAGES.

Wipe the Slate Clean

Let's start over. If the jobs come back then people can pay their mortgages. Give them a chance. Don't judge them by what has happened over the last three years.

Let's Look Ahead

Wouldn't it make more sense to let them buy a house without qualifying than it does to BULLDOZE that house because it has been foreclosed and there is nobody to sell it to? Talk about stupidity.

Everybody deserves a second chance. We gave the bankers a second chance. Now we need them to give us a second chance.

No more FICO scores. EASY CREDIT for everybody. Let's get America moving!

Bailout Reprise

Sun, 05 Oct 2008 18:30:52 -0500

Bailout Reprise by Bill Roberts

This was inspired by my conversations with Jan Wood on her blog. You can read the run up to this here.

Duncan Hunter is MY Congressman. I live in his district. I am very disappointed in him. He is retiring this year. His son, also named Duncan Hunter is running for his seat. Early in the primary campaign Bill Cherry had a quiz on his blog that "matched" the respondent with the candidate that most closely reflected their values. Duncan Hunter was my closest match.

As a matter-of-fact 4 of the 5 Congress people in San Diego County voted against the bill. The only vote in favor was by the most liberal Democrat (Susan Davis) here. It is very demoralizing for me that I seem to be on the opposite side of this issue, but I believe that I am right.

I personally don't give a hoot what happens to the banks, but I do care what happens to us (all of us) and I think that the foreclosure problem needs to be dealt with summarily. If we applied some of the ideas that the conservatives advocated the banks would continue foreclosing on non-performing loans and continuing to fail as a consequence. Workouts would not be an option. Foreclosures are disastrous to our economy.

When I say I don't care about the banks I want to clarify that. I do care about the S&Ls. If the bill had passed the first time around WaMu and Wachovia might have survived. We need more thrifts not less. We need to decentralize mortgage financing. We don't need fewer financial center mega-banks controlling every aspect of our daily lives.

I just hope that the "protections" for homeowners written into the bill will cause Treasury to rewrite these non-performing loans so that more people can keep their homes. It isn't a question of "do they deserve to be helped." A foreclosed house hurts all of us.

Even though I believe in some libertarian ideas, I don't like Libertarians because they put consistency above common sense. Even a Christian Scientist needs to go to a doctor if they've had a traumatic injury. We need to be practical and pragmatic. Save the patient first, and then work on the philosophical things.

Most of the Republicans that voted for the rescue plan put "Country First." Even Newt Gingrich, who was initially against the bill, spoke in its favor because we had to do something quickly and this is what was available. Maybe if we had had the luxury of time we could have come up with something more agreeable.

I hope all is well with you. We will come through this.

Bill Roberts

Are Foreclosures Good For America? Part 4

Tue, 30 Sep 2008 11:26:15 -0500

Are Foreclosures Good For America? Part 4 by Bill Roberts

Everyday there are more mortgage defaults filed. The banks are suffering. Congress can't get their act together. A solution seems to be elusive.

The Secretary of the Treasury went up the hill to ask Congress for 700 Billion dollars to solve the problem.

Congress said NO.

But we still need a solution so here is my contribution to the discussion:

We need a new Resolution Trust Corporation, but this time with a different imprimatur: SAVE THE HOUSE, not sell the house.

It is clear Congress doesn't want to give the $700B to Hank Paulson but the crisis still needs to be dealt with.

It is also clear the people don't want to bail out Wall Street, which is how the media has characterized this rescue plan.

But buying mortgages from banks at 50 cents on the dollar is hardly a bailout. The banks have been duly chastised and punished. What more do you want?

If a new RTC gets your mortgage for 50 cents on the dollar then they could "restructure" the loan to more fully reflect the actual value of your house. They could "convert" your mortgage to a thirty year fixed at an attractive interest rate. Maybe then you would be willing to make the payments.

The RTC could also make all these loans FULLY ASSUMABLE. That would help you to be able to sell your house, if that is what you want to do.

All in all, a new RTC could bring stability to the housing market which would have a positive impact on the entire economy.

We Win!

When all is said and done and the final accounting of the cost of this program is determined, we will find that it actually paid us to do this rather than cost us.

Bank failures would stop or slow way down, foreclosures would almost disappear altogether, home values would stabilize, property tax revenues would return to normal, and Federal tax revenues would increase with a "rising tide" of economic activity.

And the new RTC would probably make a small profit.

"Are Foreclosures Good For America? Part 2"

"Are Foreclosures Good For America?"

Are Foreclosures Good For America? Part 3

Thu, 25 Sep 2008 21:47:32 -0500

Are Foreclosures Good For America? Part 3 by Bill Roberts

Until now banks had three options for under-performing loans:

Workout a modification
Accept a short sale
Foreclose

I would be very interested to hear how successful homeowners have been in obtaining a loan modification. It seems that if they were in default the lender's customer service representative can't or won't talk to them. They will only accept "full" payments. By the time the Loss Mitigation Department gets involved, the borrower owes six payments or more and they can't really see a way out. On the other hand, if they aren't in default the lender has no incentive to modify their loan. Is this a catch-22 or what?

And I hear a lot of agents complaining that they can't get a short sale approved.

Foreclosures are at all time high with many more to come. It seems that this is the option of choice for most lenders.

It could be that there are very good reasons for the bank opting to foreclose rather than choosing to do a workout or approve a short sale:

It is the "way we have always dealt" with defaulted loans
Nobody wants to accept responsibility for accepting a short sale
The Mortgage Insurance Company won't pay unless the loan is foreclosed
The borrower wasn't insistent enough
The servicing agent wasn't the owner of the mortgage
It was easier for the servicing agent to foreclose
Bankers are a bunch of arrogant jerks

Maybe you know a few more reasons.

New Rules

Well the rules have just been changed. The Federal Rescue Plan will move these loans out of the control of the banks and loan servicers and into the bailiwick of the Secretary of the Treasury. The program will require that a workout and/or a restructuring of the loan be performed. The emphasis will be keeping the homeowners in their homes and collecting money, not on foreclosing.

The terms of the act approved by Congress will require that the homeowners are treated fairly. Nobody benefits from a lot of foreclosures. In order to accomplish this the loan may need to be restructured to reflect a lower interest rate, a reduction in the amount owed, or forgiveness of payments missed. Maybe all of these will be necessary.

In the final analysis, most of these mortgages will be repaid, the neighborhoods will be more stable, real estate values will "heal," and the country will be better off. And Treasury will get our money back, maybe even a little more than we "advanced."

We Win

Maybe we "saved" the banks, but in reality we saved ourselves.

Are Foreclosures Good For America? Part 2

Fri, 19 Sep 2008 16:31:58 -0500

Are Foreclosures Good For America? Part 2 by Bill Roberts

The whole mortgage mess can be laid at the feet of Alan Greenspan and his zero interest rates which caused a huge run up in real estate prices, but it was swamped by the tidal wave of foreclosures brought on by accelerating price decreases when the rates went back up.

We all remember the Hay Days of the real estate market in 2002 through 2005. Interest rates were coming down on a daily basis. House prices were going up by the minute. Sellers were getting multiple offers on their homes with the lowest being the asking price. Home buyers were primarily concerned with how much they would have to pay each month, not the purchase price. As rates came down they could afford to pay higher prices.

Speculators saw what was happening. They realized that they could make an offer on anything and probably be able to sell it again even before it closed escrow. They could "flip" the house and make a fast, easy profit with no effort and no risk. Lenders facilitated this process by making 100% loans to these flippers. After all, there was no risk!

Then the party ended. The Fed began their program of raising interest rates. Home buyers could no longer pay higher prices for homes. The market leveled off.

Speculators could no longer buy something with any assurance of being able to sell it at a profit. They were now faced with trying to cover their transaction costs (both in and out) plus their holding costs (interest and maintenance) out of the difference between purchase price and sales price. With a flat market this just wasn't possible anymore.

The flippers bailed out of the market. This caused a surplus of inventory. It was just a matter of supply and demand. Prices had to come down. And down they came. Faster and faster they came down as more and more property was put on the market.

Unintended Consequences

Congress wanted easier loans to extend home ownership. It is Public Policy that everyone should be able to own their own home. Expanding home ownership was the goal, but they didn't take into account what would happen if these people saw their situation as hopeless and stupid when they found that they owed more than their house was worth. Some just walked away, some tried to "sell short," and others waited until they were foreclosed. The dream of home ownership was extinguished for many people and some will never get it back.

It's the flippers that shouldn't have been in the market, not the first-time home buyers. We sucked them in and then blamed them for buying what they couldn't afford. Many here have called them undeserving and say that they shouldn't have been allowed to buy a home anyway. What a bunch of arrogant crap.

Now we are all paying the price

Bank foreclosures are threatening to totally destroy our whole financial market. Banks that foreclose are finding themselves bankrupt because of the foreclosures.

What if there were no foreclosures?

If we look very hard at this issue we can see that foreclosing on somebody's home is destructive to all involved. We now have a homeless family, a vacant house, and a weakened bank.

First we need to deal with the homeless family. We don't want them living on the streets or in our parks, do we? If they couldn't make their mortgage payments they probably can't pay rent either. Maybe they can afford to pay rent but the landlords don't want to rent to them because the credit is not good. In any event we are going to need to step in and help them. Maybe we will have to put them into subsidized housing (section 8) or otherwise assist.

Secondly, we have the problem of the foreclosed house. It is an "attractive nuisance" that invites crime. Vandals come in and strip the house of everything of value. Other criminals come in to do drug deals or "shoot up." And then there are the squatters who move in. All of this activity has a tremendously negative impact on the neighborhood.

Finally, we are faced with the problem of the banks which are dropping like flies. Every foreclosure depletes some of their capital. Once enough capital is depleted the bank examiners are forced to declare the bank bankrupt and take it over. Who is next? Will it be your bank? Will you lose something if your bank is taken over? Are you getting the credit you need or want or has that credit dried up? Would your business be better if more people could get credit?

Something to Think About

Our irresponsible foreclosure policy has hurt everybody. And it hasn't done what it was designed to do. It has not protected those that provided the credit to purchase those homes.

If we had just left them in their home everything would have been better.

I hope we learn something by this. I hope that the foreclosure rules are changed before the next down market.

Are Foreclosures Good For America?

Sun, 14 Sep 2008 16:53:29 -0500

Are Foreclosures Good For America? by Bill Roberts

A lot has been written about our financial crisis: How it started; Who is to blame; And how much has it cost us.

But I think that this entire discussion has missed the main point: Was it necessary?

Let's look at the foreclosure process: If you borrow money to buy something and then you don't repay, the lender can come and get what you bought. Their loan to you creates a lien on the purchased thing, whether a car, a couch, or a house.

If you stop making your car payments the bank will send someone out in the middle of the night to repossess your car. The bank doesn't really want your car; they just want to be repaid. If they repossess a few cars they don't get hurt too badly and it sends a message to the rest of us: DON'T MESS WITH THE BANK. Their bite is worse than their bark.

Well, this same principle applies to mortgages. If you don't make your house payments they will repossess (foreclose) your house. But here the comparison fails. We already know not to fool with the bank. We know what they can do.

But when the bank repossesses real estate that loan which was carried on their books as an asset becomes a charge against capital. If they repossess enough houses they will consume all their capital.

Bank examiners and the agencies they represent require banks to have "sufficient" capital in order to stay in business.

When a bank's capital falls below a certain point the examiners will declare that the bank has "failed" and they will take it over.

We've had a lot of bank failures during this crisis.

When banks insist on making so many foreclosures it is almost as if they are "biting off their nose to spite their face." Don't they realize that they are flirting with disaster? The bank examiners aren't going to give them a pass.

They say it is their right and their obligation to repossess your house. OK, but is it working for them or against them"

Is it working for us?

What would our economy and our real estate market look like if we hadn't had any foreclosures?

If you live in a neighborhood that has suffered from many foreclosures, how do you feel? Do you feel safe? Are there vandals out there stripping those houses while they sit vacant? Has your property value declined because of these foreclosures? Have more of your neighbors just given up because they owed more than their house was worth. Are these vacant houses nuisances? Are they attracting "homeless" people who squat there? Has crime increased in your neighborhood?

If we had it to do over would we prefer NOT to allow the banks to foreclose? We do have it to do over. Everything is cyclical and we shall see this again. Maybe not exactly the same but close enough.

I have more to say about this subject but I would like to hear what you think before I go on. Please feel free to disagree.

See Are Foreclosures Good For America? Part 2

My Sincere Apologies

Mon, 08 Sep 2008 19:10:50 -0500

My Sincere Apologies by Bill Roberts

I have been MIA for about six months. Rather than bore you with the trite details I just want to say I'm sorry for my neglect of so many good friends here on ActiveRain.

To those that called and left messages, thank you very much. I will call you back as soon as I can.

I see that there have been a few changes around here. It will undoubtedly take me a while to get back up to speed. Please feel free to offer your criticisms and advice.

We are now in the midst of a hotly disputed political campaign and in the middle of very interesting economic times. Opportunities are everywhere, both for investment and conversation.

I just posted a little political "viewpoint" and I'm working on an economic essay. Freddie and Fannie make for great discussions, don't you think?

I turned "65" while I was gone. My favorite subject of Baby Boomer Retirement Planning is squarely on my mind. I hope I can persuade a few of you to take up this banner. Most "Boomers" have a very simple retirement plan: work ‘til they drop. It doesn't have to be that way!

High Time For Change

Mon, 08 Sep 2008 18:25:59 -0500

High Time For Change by Bill Roberts

It's high time for change in Washington and John McCain offers that change.

Don't fool yourself into thinking that Obama represents change. He really represents more of the same - TAX AND SPEND.

Our economy and our very existence are at stake.

What will Obama do for us, or should I say do to us?

He will increase employee taxes. He says he won't raise taxes on the middle class but what do you think that will be? Social Security and Medicare taxes are already very high and he wants to make them higher. So much for a middle class tax cut.
He will increase taxes on the job creators (small business owners and entrepreneurs).
And if you are lucky enough to make more than $250,000 expect him to take a big chunk of it away from you.
He doesn't want to drill for oil. He thinks that we will save enough oil by simply inflating our tires so we won't need it. If anything is simple, it is Obama. We need that oil and we need the money that we are currently sending to people that don't like us and want to hurt us.
He thinks that erecting barriers to trade will protect jobs in the rust belt. Who is he trying to kid? Those jobs are gone. We need new jobs, new skills, and greater participation by everybody. In stead of trade barriers we need trade incentives to sell our products all over the world. We need to fight the EU and Asia with their own tactics. Do you think Airbus could sell a single air plane if they weren't subsidized by the EU?
Obama wants to talk to the extremists that are trying to kill us. The longer we talk the more time they have to get ready for their next strike. Haven't we talked enough already?

The more I see and hear about Obama the more I see the same old thing: tax and spend and surrender. After all, some faceless bureaucrat in Washington knows what is best for you.

Let's get real! We want and need REAL CHANGE.

John McCain offered real change when he selected Sarah Palin as his running mate. Thank God for the real people that make up our frontier. We do have a chance to survive.

A couple of months ago I wasn't so sure. Now I am full of HOPE. And I hope you are too.

Vote for change in Washington. Send McCain and Palin in there to clean things up.

Don't Go To Jail, Collect Your $200

Tue, 25 Mar 2008 10:56:49 -0500

Don't Go To Jail, Collect Your $200 by Bill Roberts

I received an email the other day from an ActiveRain member asking about using his Self-Directed IRA to buy a house that he could "rent" to his son. I want to respond to this by saying that a Self-Directed IRA should be your very best investment vehicle for providing for your retirement BUT you need to follow the rules.

You may invest in just about anything from within your IRA but there are specific things that you CANNOT do:

Prohibited transaction. A prohibited transaction is any direct or indirect:

Sale or exchange, or leasing of any property between a plan and a disqualified person; or a transfer of real or personal property by a disqualified person to a plan where the property is subject to a mortgage or similar lien placed on the property by the disqualified person within 10 years prior to the transfer, or the property transferred is subject to a mortgage or similar lien which the plan assumes.
Lending of money or other extension of credit between a plan and a disqualified person.
Furnishing of goods, services, or facilities between a plan and a disqualified person.
Transfer to, or use by or for the benefit of, a disqualified person of income or assets of a plan.
Act by a disqualified person who is a fiduciary whereby he or she deals with the income or assets of a plan in his or her own interest or account.
Receipt of any consideration for his or her own personal account by any disqualified person who is a fiduciary from any party dealing with the plan connected with a transaction involving the income or assets of the plan.

Exemptions. See sections 4975(d), 4975(f)(6)(B)(ii), and 4975(f)(6)(B)(iii) for specific exemptions to prohibited transactions. Also see section 4975(c)(2) for certain other transactions or classes of transactions that may become exempt.

And just for the record, a Disqualified Person is:

Disqualified person. A disqualified person is any person who is:

A fiduciary.
A person providing services to the plan.
An employer, any of whose employees are covered by the plan.
An employee organization, any of whose members are covered by the plan.
Any direct or indirect owner of 50% or more of:

The combined voting power of all classes of stock entitled to vote, or the total value of shares of all classes of stock of a corporation,
The capital interest or the profits interest of a partnership,
The beneficial interest of a trust or unincorporated enterprise in a, b, or c, which is an employer or an employee organization described in 3 or 4 above. A limited liability company should be treated as a corporation, or a partnership, depending on how the organization is treated for federal tax purposes.

A member of the family of any individual described in 1, 2, 3, or 5. A member of a family is the spouse, ancestor, lineal descendant, and any spouse of a lineal descendant.
A corporation, partnership, or trust or estate of which (or in which) any direct or indirect owner holds 50% or more of the interest described in 5a, 5b, or 5c of such entity. For purposes of 7, the beneficial interest of the trust or estate is owned directly or indirectly, or held by persons described in 1 through 5.
An officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10% or more shareholder or highly compensated employee (earning 10% or more of the yearly wages of an employer) of a person described in 3, 4, 5, or 7.
A 10% or more (in capital or profits) partner or joint venturer of a person described in 3, 4, 5, or 7.
Any disqualified person, as described in 1 through 9 above, who is a disqualified person with respect to any plan to which a section 501(c)(22) trust applies, that is permitted to make payments under section 4223 of the Employee Retirement Income Security Act (ERISA).

And if you fail to comply then the IRS has a special plan for you:

Line 16. Section 4965-Prohibited Tax Shelter Transactions. For tax years ending after May 17, 2006, if an entity manager of a tax-exempt entity approves or otherwise causes the entity to be a party to a prohibited tax shelter transaction during the year and knows or has reason to know that the transaction is a prohibited tax shelter transaction, then the entity manager must pay the excise tax under section 4965(b)(2).

For purposes of section 4965, plan entities are:

Qualified pension, profit-sharing, and stock bonus plans described in section 401(a);
Annuity plans described in section 403(a);
Annuity contracts described in section 403(b);
Qualified tuition programs described in section 529;
Retirement plans described in section 457(b) maintained by a governmental employer;
Individual retirement accounts within the meaning of section 408(a);
Individual retirement annuities within the meaning of section 408(b);
Archer medical savings accounts (MSAs) within the meaning of section 220(d);
Coverdell education savings accounts described in section 530; and
Health savings accounts within the meaning of section 223(d).

An entity manager is the person who approves or otherwise causes the entity to be a party to a prohibited tax shelter transaction.

The excise tax under section 4965(a)(2) is $20,000 for each approval or other act causing the organization to be a party to a prohibited tax shelter transaction.

A prohibited tax shelter transaction is:

A Listed transaction within the meaning of section 6707A(c)(2). Listed transactions are reportable transactions that are the same as, or substantially similar to, any transactions that have been specifically identified by the Secretary as a tax avoidance transaction for purposes of section 6011.
A prohibited reportable transaction is:

a. Any confidential transaction within the meaning of Regulations section 1.6011-4(b)(3); or

b. Any transaction with contractual protection within the meaning of Regulations section 1.6011-4(b)(4).

If this is too much to deal with then you really need an "advisor" for your taxes and investments. Shift the responsibility to an "expert" so that you maximize your returns without jeopardizing your future. A good CPA or Attorney with specific tax knowledge is worth his (or her) weight in gold. And a good retirement investment advisor is also indispensable.

Most of this information is directly from the IRS website. I hope you noticed the penalty for engaging in a prohibited transaction. They will assess you an "excise" tax of $20,000 per violation. You may read that as a fine in addition to disallowing the investment in your plan, which could have even more devastating consequences.

BE VERY CAREFUL WITH SELF-DIRECTED IRA INVESTMENTS.

Because if you are not you will not pass GO, you will not collect $200, and you may very well go directly to jail.

Timing the Market

Mon, 03 Mar 2008 11:20:42 -0600

Timing the Market by Bill Roberts

Qualcomm is a local high tech company here in San Diego. Owning their stock has made quite few of their employees and other local people Millionaires. I figured that everybody could understand making money this way. You simply bought Qualcomm stock in the beginning and sold it after the price went up (way up).

Last Friday it closed at $42.39 per share. Back in March of '03 you could have bought some Qualcomm stock for around $15.00. Now my question to you is, "Would it really have mattered to you if you had paid $14.50 or even $15.50? Sure, you want to make as much as you can, but if you had tried to "time the market" to buy it at $14.50 you might have missed it completely and had to pay upwards of $20.00 per share if you wanted in.

My advice to you is to buy when you can. Don't worry about picking up every nickel off the table. Just get what you can. You would have gotten nearly 300% growth in the share price. Why be greedy?

The Real Estate Market

Now here in San Diego we have a "soft" real estate market. Prices are off their highs by 30% or more in some areas. Some people think that there is a little more room for prices to drop.

If you want to invest in San Diego real estate now is a good time to get in. Because it is a "soft" market the buyer has an edge when negotiating with the seller. Good deals and good terms can be had. Maybe the market will fall another 15% before it starts back up. Then again, maybe not.

What is for sure is that ten years from now the prices are going to be considerably higher. How much higher is simply conjecture, but certain facts need to be reckoned with:

More people will want to live here in ten years;
The dollar will be worth considerably less in ten years; Room for growth will become more scarce;
Labor and materials for construction will be more expensive;
And there is no indication that government is going to make development in the region any easier.

All of these factors considered together make for a very complicated analysis, but a reasonable person could conclude that prices will be up 200% to 400% in the next ten years.

Now Is The Time

Is it really going to matter if you pay 5% or 10% too much now? Trying to "time the market" could cost you the opportunity to get in at this "buy point." Ten years from now you will be glad you bought now.

Call Bill Roberts (619) 244-4610 for any real estate questions you may have.

Memories Or Just Getting Old

Fri, 29 Feb 2008 11:39:12 -0600

Memories Or Just Getting Old by Bill Roberts

My wife was off work today and she wanted to watch Rachael Ray. OK, I like to cook so I used to watch her on Food Network all the time so I said "sure, let's watch her."

Lara Spencer, another of my "faves" from the old days on Good Morning America was doing her regular visit with RR. During Lara's segment Frankie Valli came on. OMG is he short. I couldn't believe he was Rachael's size and shorter than Lara. Well, his height didn't matter when I was listening to him and The Four Seasons on the radio.

I was happy to see him and I was expecting to hear him sing. Guess what. He didn't sing so I went to YouTube to satisfy my desire to hear The Four Seasons. If you want to remember those days too I have embedded a couple of their hits.

So let's hear it for The Jersey Boys...

If you want any more you gotta sing it yourself

Money, Money Everywhere

Wed, 27 Feb 2008 18:27:41 -0600

Money, Money Everywhere by Bill Roberts

Every newscast talks about the economy, the mortgage meltdown, and what the government is doing about it.

I'm sure that by now you realize that the housing crisis was brought on by the Fed's actions vis-à-vis interest rates. They (specifically Greenspan and Bernanke) destabilized the mortgage market, the housing market in general, and the very economy by reducing rates to zero and then sharply raising the rates back to a normal level. This kind of action does not take place in a vacuum. These guys torpedoed us. Anybody making excuses for them is in denial of the truth.

As for inflation, we've been on that path since Roosevelt "established" the value of an ounce of gold at thirty-five dollars, up from it value of twenty dollars the day before. Instant inflation. Then came WWII which was very expensive. To pay for it the U.S. floated a lot of bonds. So as not to have to pay them back, the government inflated the currency some more. Now over 75 years later, this process is too ingrained to expect change. The dollar will just keep getting worth less until its worthless.

But we can learn from history and prosper. Germany during the Weimar Republic suffered horrible inflation. The mark went from being a respected currency to nothing. Towards the end it took bushel baskets full of high denomination marks to buy a loaf of bread.

But the people were able to pay off their mortgages with these devalued marks. The banks took the hit. Every cloud has a silver lining.

What did you learn?

So what is the lesson? The more you owe and pay back with devalued dollars, the more you will make. Money buried in the backyard is going to depreciate. Money leveraged in real estate is going to yield huge returns. This might be called "Mortgage Planning" or just common sense. Take advantage of this. We know what's coming. It's not like it is going to be a surprise.

Call Bill Roberts (619) 244-4610 if you want to position yourself to benefit from the coming inflation.

The Big Money Mystery of 2008

Wed, 27 Feb 2008 12:45:47 -0600

The Big Money Mystery of 2008 by Bill Roberts

Everybody has an opinion about the Mortgage Meltdown. Everybody has a suggestion about how to "fix" it or prevent another occurrence.

I have my doubts about all this.

My friend Bill Archambault writes extensively about all aspects of the mortgage industry. If you don't know him or read his blog, you should.

He recently posted about Why Are We Calling Lenders Predatory

This started as a comment on that post.

After "analyzing" the lending process Bill suggests that part of the problem is the federally mandated Truth in Lending disclosure (the TIL).

You can't legislate against stupidity. And disclosures only help the brokers and lenders by limiting their liability. Who can possibly read and understand an inch thick sheaf of contracts, addenda, and disclosures?

The real problem is that all these loans were made with the general thought that the market would continue to go up. Ask anybody if they would have done what they did if they had known that the bottom was about to fall out of the market.

The TIL is a worthless document anyway because the loan terms and costs aren't set until it is ready to fund. The final HUD-1 is the only disclosure that reflects reality and it comes a little too late for most people to make any changes in their plans.

The loan products that were sold were created with the idea that there were unlimited funds available and they (The Wall Street types) wanted/needed to make their product "competitive" in order to sell it.

Why?

So the real question is "why did the market tank?" We need to look at the doings of the Federal Reserve in driving interest rates down and then driving then back up.

Also, was there a conspiracy to "transfer" wealth from other countries (the buyers of the "sliced and diced" mortgage backed securities also known as derivatives (Collateralized Mortgage Obligations (CMO's)) to the good old U.S. of A? Because that IS what happened. A lot of money was lost by European and Middle East investors. Where did it go? And yes, it is a zero sum game. That money ended up in our economy. Interesting.

This "event" will capture the imagination of economists and financial writers for a long time to come. All we can do is live through it.

Not Again! A Real Estate Market Update

Wed, 27 Feb 2008 11:18:27 -0600

Not Again! A Real Estate Market Update by Bill Roberts

This morning on the CBS Early Show Mark Zandy, the Chief Economist for Moody's economy.com said that he expects another 10% decline in real estate values over the next twelve months.

Why are they doing this? Haven't they fueled this market decline enough? Since markets are basically driven by psychological factors they are the problem. The mass media provides the information that most people use to make their decisions. If that information is faulty, then their decisions will probably also be faulty.

These so-called experts have a responsibility to all of us to stop spreading these negative opinions. After all, they are only opinions. TV allows them to promulgate these ideas to the general public. The public responds to this kind of "information." Their response makes the pronouncement correct. A self-fulfilling prophesy.

There is a lot of anecdotal evidence that we have reached a bottom, or are very close to it.

It is our duty to counter these TV "experts." We can't let them call the tune.

Watch this:

Spiderwick Chronicles - Not Really A Review

Mon, 25 Feb 2008 11:46:54 -0600

Spiderwick Chronicles - Not Really A Review by Bill Roberts

Yesterday we went to see Spiderwick Chronicles. It is a Nickelodeon production so I thought it must be "kid friendly." It just goes to show how out-of-touch I am. The special effects were great. It is a combination of "live" actors and animation. I don't know how they do it but it's great. It was kind of like a Harry Potter movie, which is why Irene wanted to see it. It scared her, so I was satisfied.

When all was said and done it turned out to be a CHICK FLICK. It just goes to show you that you can't judge a movie by its poster or trailer.

I would say its worth going to see, but leave the youngest at home. It's too scary for them (I think).

All's well that ends well, I suppose.

Hey Super Agent What Do You Want?

Sat, 23 Feb 2008 14:34:57 -0600

Hey Super Agent What Do You Want? by Bill Roberts

Lenn Harley recently posted HOW TO SUCCEED IN REAL ESTATE SALES. GET REINTERMEDIATED . It was "Featured" so you may have read it. If you haven't read it you should.

I read and then commented on her post:

Lenn, As we take back the business, we will probably have to deal with our pricing for our services. Technology allows a "Super Agent" to handle many more clients than the old ways in the old days. Competition should drive the price of services down.

02/20/2008 06:38 PM

by Bill Roberts - "Baby Boomer" Retirement Planning

She responded:

Bill Roberts. You wrote:

"Technology allows a "Super Agent" to handle many more clients than the old ways in the old days"

What technology is going to permit agents to handle more clients???

Where can I buy a robot that is licensed to drive buyers around from house to house. What robot will attend the home inspection? What robot is going to review the GFE and HUD-1 for the Super Agent??

Technology permits the Super Agent to communicate with more prospects, but once the agent/buyer/seller relationship exists, it's the "hands on" transaction management that makes for good business.

Technology helps with record keeping but that's about all.

02/21/2008 06:34 AM

by Homefinders, Real Estate in MD & VA, Lenn Harley, Broker, New & Resale Homes

I just had to come back:

Lenn, I hope you are still here because we have unfinished business. I said technology will allow the "Super Agent" to handle a lot more clients. You disputed that.

Well, I too have been around for a while. I remember spending lots of time doing open houses, door knocking, and driving "suspects" around in my car for days on end.

After I finally sold them something (maybe even one of my listings because I did double end deals back then) I had to manually manage the transaction starting with going to the escrow company to open the escrow, calling the title company to order the pre-lim, and everything else I had to do.

I could only handle so many deals.

Now the buyers usually do their homework before they contact an agent. They know the neighborhood they want, the schools involved, the price range, etc. When they contact you, the Super Agent, you will "qualify them" and then show them three houses, write an offer which you will get accepted (maybe with one or two counters) and then hand off the deal to your transaction coordinator who will utilize a Transaction Management System to open escrow, open title, order insurance, order inspections, order disclosures. In short do all the scut work the agent used to have to do.

In the mean time, you (the Super Agent) have moved on to the next client who is ready to buy, having done all their homework.

This Super Agent (you) can handle many more transactions than in the old days doing it the old way.

Bill Roberts

BTW Don't be surprised if this comment turns into a full-blown post. For that I thank you.

02/23/2008 01:38 PM

by Bill Roberts - "Baby Boomer" Retirement Planning

If you still haven't read the full post please do so. The comments and inter-play is well worth your time.

So my question is: Hey Super Agent What Do You Want?

How much am I going to have to pay you for your services?

Respectfully submitted,

Bill Roberts

Suspend "Due On Sale," Fix The Problem

Fri, 22 Feb 2008 16:27:10 -0600

Suspend "Due On Sale," Fix The Problem by Bill Roberts

Back in the good ol' days when we could buy property subject to the existing financing and there was nothing the bank could do about it, anybody could buy real estate. Qualifying wasn't an issue.

If a seller was "in trouble" it was easy to get them out of trouble by simply selling the property "subject to" or with an AITD (an all inclusive trust deed or "wrap-around mortgage).

Then, in their infinite wisdom (or pressure from the banks) Congress enacted the Garn-St. Germaine Act in 1982. See The Don'ts Of Due On Sale Clause.

We Need Change

I think it is time to right this wrong and repeal the Depository Institutions Act of 1982.

A lot of sellers could sell, and a lot of buyers could buy if they were able to take advantage of buying subject to the existing financing. The banks would benefit because foreclosures would be way down. Every pre-foreclosure property would be a candidate for this type of sale.

Right now you can buy "subject to" but you are taking the chance that the bank may accelerate the loan (call it due and payable because of the alienation of the title). If the buyer can't qualify why would he take this risk? If qualification wasn't an issue, but only making the payments was the issue, think how easy it would be for this crisis to end. There are lots of people that would be willing to buy this way because they don't have good credit even though they can "afford" to make the payments. These buyers would increase demand, bringing it into equilibrium with supply. The real estate market would "firm up" over night.

Do Your Part

If our elected officials realized that this solution was available and how popular it would be, maybe they will repeal the Garn-St Germaine Act. Tell them you want CHANGE. Meaningful change, not just empty rhetoric.

This "election cycle" is the perfect time to bring about meaningful change to our business. Let's make these changes be positive and pro=active rather than negative and reactive. We offer solutions!

What This Country Needs Is A Good 5% Home Loan

Tue, 19 Feb 2008 10:54:26 -0600

What This Country Needs Is A Good 5% Home Loan by Bill Roberts

Here we are in the middle of a mortgage meltdown and a presidential campaign.

What good can come from all this?

One of the things that has really bugged me is all the negative comments made about people that couldn't qualify legitimately or afford the houses that they bought during the hot market of a couple of years ago. Why do you feel that these people are undeserving of sharing the American dream?

I would like to see them all get home loans.

Maybe we can come up with a new mortgage product that is even easier to get than a sub-prime stated income loan.

My thesis: Everybody deserves to own their own home. I don't care if their credit sucks or they don't make enough money or any other qualifying criteria.

Everybody needs a place to live. They deserve to own that place. To deny them that right is tantamount to slavery.

You want them to qualify? Why? If they are paying rent then they could make mortgage payments, can't they?
It is as simple as that. But what if they miss a payment or two? Is it the end of the world? What's the big deal? Just "add" the missed payments to the balance due and they will pay it off eventually.

No Foreclosures

This No Qualifying Loan must also be exempt from foreclosure without special judicial supervision. The public good is served by preserving this home ownership, not preserving some bank's unnecessary profits...

The security for the loan is the home, but not by foreclosing it, but rather by the owner maintaining it. Over time the home owner will eventually pay off the mortgage, but nobody is going to care how long it takes.

So why should banks make this obviously bad loan to an unqualified borrower?

To effect this public policy of universal home ownership
It's not their money anyway

To understand this concept we need to examine just how money comes to exist in the first place. Banks re-lend "money" that is deposited to their account according to reserve requirements established by the Federal Reserve Bank when the "Fed" buys or sells treasury bills and bonds. Some people refer to this as "managing liquidity" but in reality what they are doing is "creating" money out of thin air. So just how much profit do they deserve on this new (free) money?

There is also the multiplier effect by re-lending the deposits of their customers. Almost all money "exists" as an entry in a bank's accounts as opposed to currency. Then they (the bank) can lend a percentage of that deposit to someone else which will end up in another bank account. And so on and so on. Every time they do this they are creating new money.

FHA?

I think that home ownership for everybody is a higher good than a little more money for some bank or banks. The Federal Government can provide for these loans by "issuing" bonds. The Federal Reserve Bank can "buy" those bonds. This could be a new FHA product backed by government bonds. The whole country will have a stake in seeing to it that home ownership is enjoyed by everybody that wants to participate.

The "upside" is that it would be good for the economy. There is no "downside." What candidate is going to pick this up and run with it?

What Do You Do During A Recession?

Mon, 11 Feb 2008 12:21:30 -0600

What Do You Do During A Recession? By Bill Roberts

For the most part economic activity slows down during a recession. That is actually the definition of a recession: two successive quarters of decreased economic activity. There are various technical descriptions but this is good enough for our purposes.

Recessions always lead to recoveries, usually about 18 months later.

So what do you do during the recession? Save your money? Get ready to "pounce" once the recovery is announced? Sleep? Or do you take positive action?

Whatever you might want to do once the recovery starts, you would be better off doing it while the recession lurks. During a recession everything is cheaper. Everything!

If you are thinking about starting a business, then you will be able to get a better deal on the premises your business will need. Financing terms will be lower. Supplies and inventories can be had at major discounts. Advertising should cost less. Any construction you need to accomplish can be done for significantly less money than will be the case after the recovery.

If you thinking about investing in real estate, prices, selection, and financing costs are all better during the recession than after the recovery.

And what if you want to build? With nothing selling, building during a recession is just plain crazy, or is it?

If you decided today you wanted to build something and you got started right away to accomplish that then you should finish your project just about the time the recovery begins. You will have reaped all the benefits of the recession. You will have been able to complete your project on time and for lower costs. Most of the construction bottlenecks just aren't present. Supplies are available when you need them. Sub-contractors are anxious to work. Inspectors aren't over burdened with work. Even the local building department is able to get right to your application.

Now your project is complete and here comes the recovery. How sweet it is!

Prices - Up Or Down?

Fri, 08 Feb 2008 14:27:06 -0600

Prices - Up Or Down? By Bill Roberts

There is a lot of talk these days on pricing of real estate. Most of it is wrong.

There is no "magic number" for what a property is worth. That number is arrived at by a meeting of the minds of the buyer and seller, maybe with a little help from his real estate agent.

When prices were going up double-digit percentages each year it wasn't because they were necessarily correct, but rather because a buyer was willing to pay that price. Now it seems that buyers aren't even willing to pay as much as they did last year.

So what is the right price? Maybe a little historical perspective is called for. In the mid nineties a nice house in Bay Park (San Diego) with a view of Mission Bay could be had for less than $200,000.00. San Diego is a growing area. The two main contributing factors to increases in price level are inflation plus the increased demand of a growing area. It is safe to use a factor of 8% compounded annually for this area. That would make an average house in Bay Park to be valued at approximately $550,000.00.

The trouble comes in when you throw in those "crazy" years of speculation and low interest rates. Now we are seeing million dollar valuations in Bay Park. Some of it is due to property improvements (highest and best use) and new construction but over-all the price increases can't be justified. If sellers aren't willing to come down in their asking prices then the market will be flat until the real value overtakes the speculative value. And it will in just a few short years.

If I wanted to buy a house in Bay Park right now I would compute how much I would be willing to pay based on historical data (the cost per square foot in 1995), improvements to the property, and its desirability to me.

It seems to me that having an objective way of looking at prices is far superior to just taking a position that prices are too high. Maybe they are and maybe they're not.

How to Find Land

Fri, 08 Feb 2008 12:03:06 -0600

How to Find Land By Bill Roberts

Man has always had the urge to find new lands. It is what led to the discovery of the New World. It is what pushed us west from the Eastern Seaboard.

But just because all the land has been discovered doesn't mean that our thirst for new lands has been quenched. On the contrary, we seem even more inspired to find a piece of land that satisfies certain hungers within.

I'm one of those land pioneers. I like nothing more than going out into the sticks looking for that elusive parcel which will satisfy a hunger deep within me.

Let me first say that I do this as part of my job. I help people make retirement plans. I utilize land to maximize their returns on their retirement funds. See my post on Land Banking for a fuller explanation.

So how do I go about finding those special parcels? In the first place I believe that all land is good. "I never met a lot I didn't like."

But we want something special for our retirement account. We are planning on retiring in ten years, so we want something that will appreciate significantly in that time frame.

For a long term hold we could buy marginal land. It will appreciate, but probably not enough in the next ten years to work for us. We need something that will grow significantly over the next ten years. We need good land.

Finding Good Land

OK, how do we do that? Well, I'll tell you what I do. I read everything I can get my hands on regarding TRENDS in the real estate market. I want to get there first before the land rush begins.

Then I drive around my target area. I get a "feel" for how development is going to happen. It ain't rocket science but it is scientific.

Growth "happens" along arteries (roads, rivers, etc.) and near population centers, so I'm particularly interested in land in close proximity to these arteries and centers.

A Word About Prices

I have no preconceived ideas about value. Once I find an area that I'm interested in I begin to "educate" myself on land values there. Remember, real estate prices are very subjective. It is a matter of what everybody thinks rather than some absolute yardstick.

The local people already "know" what I have just discovered. This area is going to grow. They have factored that in to their prices. I need to determine if I can live with these prices. I'm anticipating growth. After that growth the land will have a certain value (based on what it can be used for and what the NOI will be for that use). I will pay a bit of a premium for good land but I'm not going to give them all my profits from owning this land.

Avoid Grief

Generally speaking, I will pay the asking price if it is reasonable. If it's not reasonable I may try one offer at the right price, but if it is rejected or countered I move on. I don't want to deal with unreasonable people. It just leads to grief.

If you are ready to incorporate land into your retirement plan or if you would like more information on getting started in land investment for retirement planning, call Bill Roberts (619) 244-4610.

Happy Super Bowl Sunday

Sun, 03 Feb 2008 11:48:03 -0600

Happy Super Bowl Sunday by Bill Roberts

Today is a National Holiday. We celebrate this day by our own choosing. Nobody has to tell us what to do today or what to watch on TV.

I'll be watching the game. I don't particularly care which team wins. I don't have a dog in this fight. But the spectacle can't be ignored.

It was revealed today that Super Bowl Sunday is now the leader in calorie consumption by Americans of all the days of the year including Thanksgiving Day. I don't know about that, but I'm sure it's the biggest "junk food" consumption day.

PepsiCola will be honoring this day with a SILENT commercial. We don't care, we'll still eat Doritos and wash ‘em down with Pepsi. At least I will. You can drink whatever you have a taste for.

Watch and enjoy the game. Watch and enjoy the Half-time show (you never know what you might see). And watch and enjoy all the Super Expensive commercials.

I'll respond to comments, maybe blog, and visit your posts TOMORROW.

How Low Can You Go?

Thu, 31 Jan 2008 18:29:28 -0600

How Low Can You Go? By Bill Roberts

I've been hearing a lot of criticism of the NAR's campaign that now is a good time to buy real estate. It seems that these self-professed experts on economics and the real estate markets think that this campaign reflects badly on Realtor's® because they say the market is still heading south.

I'd like to know what makes them so expert on the actions of markets. Did they sell houses when the market was higher? Why did they do that if they are experts on real estate economics? Didn't they know the prices were going to come down? After all they are experts, aren't they?

It's a scientific fact that most markets are more psychological than rational. There will be a reason "why" markets turn, but it is usually something that probably shouldn't have been the cause at all. And then they continue in their new direction until some reason appears to "cause" a change in direction.

The same thing is true of our various real estate markets. They are not rational in the short term. In the long term they go up. So I guess we are talking ONLY about the short term.

In The Mood

If the market isn't rational in the short term, what does it respond to? Well. I guess it responds to the "mood" of the people. What affects the mood of the people? For the most part they get their mood from the media. They tell you that you are going to have a bad day and sure enough you have a bad day.

If you want this bad mood to change then somebody has to tell you that you are going to have a good day.

Our business is real estate. It is a good business. It is an honorable profession. I believe that everybody benefits from a good real estate market.

I believe in the old adage that a rising tide lifts all boats. I want the tide to come back in.

The National Association of Realtors® is playing my tune.

Maybe your tune is something else, in which case I need to ask, "How low can you go?"

Elements of Retirement Planning

Wed, 30 Jan 2008 15:09:28 -0600

Elements of Retirement Planning by retirement planning specialist Bill Roberts

If you are not yet retired (and maybe even if you are) there are things you need to know about planning for that (dreaded) day when you quit working (at your regular job).

Is it going to be a walk in the park? Or a part-time job at Wal-Mart greeting new arrivals?

Maybe you would like to have enough time (and money) to play golf, visit the grand kids, see Yosemite, do a little sailing, or just putter in the garden. That's what your parents did, so why not you?

Well, there are a lot of reasons, starting with the high cost of living, and ending with a very small social security check.

Something needs to fill the gap. That's where retirement planning comes in. It is not only your God given right to plan your own retirement, it is your duty. So you better get started.

Getting Started

Successful retirement planning includes several elements:

Asset allocation
Tax planning
Mortgage planning
Savings
Leverage
Compound interest
Goal setting
Commitment
Legal preparation
Investment vehicles

The Recipe

What we want to do is pour all these things into a bowl and mix them up. It's kind of like baking a cake. Too much of one thing and not enough of another and the cake won't bake up the way we want it to. You also need to know what goes in first and what goes in last. Then it all has to bake a while. Raw batter in a bowl is not a cake.

I would start with a few tools: A yellow pad, a box of pencils, a calculator (a financial calculator if you have one), your checking account statements (every page of every month for the last few years), your last couple of tax returns, and possibly your letter from Social Security telling you how much you can expect to receive when you retire. If you have other assets you will want to know about those too.

Goal Setting

Setting your goal simply means establishing your needs when the great day comes. How much will you need to maintain your lifestyle, and how much more will you need for all those things you plan on doing in your golden years? See Fun With Ken and Barbie

The rest of our goal setting is about HOW we are going to go about getting that money.

Commitment

Now that we have set our goal, we need to commit to getting there. It is not enough to know what we have to do. We actually have to do it. Your commitment will have to include SAVINGS.

Legal Preparation and Tax Planning

I don't want to say that this is a chicken or egg thing but it is. Which comes first hardly matters because they both do. You are going to need a full set of legal documents from a durable power of attorney for health care to an Inter-vivos family trust and a few things in between. See Baby Boomer Retirement Planning 2 (a series)

Then you need to know the tax consequences of what you have just done, and how you want to utilize tax law to build your retirement nest egg.

All in all, you don't want to face this without a good attorney and a good accountant. If you don't have one then ask for a recommendation.

Mortgage Planning and Asset Allocation

Here is where the fun begins. We are talking about "growing" your assets up to a level that will sustain your goals which you have already set. Don't despair. All things are possible, even retirement.

Your mortgage planner will help you attain your goal utilizing financing, not just savings. A traditional financial planner can help you "manage" those monies you already have, but a good creative mortgage planner/real estate broker can help you grow your retirement accounts through LEVERAGE and COMPOUND INTEREST, using other people's money. This is the really fun stuff.

Compare

Compare that $100,000.00 that you already have invested in a mutual fund, ETF, or other Money Market account growing at 8% compounded annually

year	Beginning Balance	Ending Balance

1	$ 100,000.00	$ 108,000.00
2	$ 108,000.00	$ 116,640.00
3	$ 116,640.00	$ 125,971.20
4	$ 125,971.20	$ 136,048.90
5	$ 136,048.90	$ 146,932.81
6	$ 146,932.81	$ 158,687.43
7	$ 158,687.43	$ 171,382.43
8	$ 171,382.43	$ 185,093.02
9	$ 185,093.02	$ 199,900.46
10	$ 199,900.46	$ 215,892.50

to that same $100,000.00 invested in a leveraged real estate investment growing at only 5% but on the entire property value, not just your 25% down payment investment:

year	Beginning Balance	Ending Balance

1	$ 100,000.00	$ 120,000.00
2	$ 120,000.00	$ 144,000.00
3	$ 144,000.00	$ 172,800.00
4	$ 172,800.00	$ 207,360.00
5	$ 207,360.00	$ 248,832.00
6	$ 248,832.00	$ 298,598.40
7	$ 298,598.40	$ 358,318.08
8	$ 358,318.08	$ 429,981.70
9	$ 429,981.70	$ 515,978.04
10	$ 515,978.04	$ 619,173.64

You almost tripled your retirement account balance after ten years by one simple change. But that isn't the only change you should make. Your planner will help you establish workable goals and give you strategies for achieving those goals, including:

Annual contributions to your IRA, 401(k), or Defined Benefit Plan utilizing money you are now giving to Uncle Sam in taxes
Trading up to a larger property
Using your house as a bank
Land Banking
Creating Wealth Through Use Change
Investing in TICs, LLCs, and Tax Certificates

Your planner will help you to utilize different investment vehicles to both maximize your return and to protect your capital. It won't do you any good to amass several millions only to lose it to a judgment. See If You Buy Investment Real Estate What's The Most You Can Lose?

If you are ready to begin this process then call Bill Roberts at (619) 244-4610.

Lying In America

Tue, 29 Jan 2008 10:33:50 -0600

Lying In America by Bill Roberts

It would seem that lying is not acceptable in America. Look what happened to Martha Stewart. When they couldn't ‘get" her for insider trading, they got her for lying to a federal investigator.

But what about when the police lie? The other night on the CBS show 48 Hour Mystery story about the Tankleff murders the lead detective stated it was OK to coerce a confession by lying to the suspect. Watch his interview.

Do we even know if the Federal investigators lied to Martha Stewart? Do we care?

And what about former President Bill Clinton? Wasn't he convicted of lying to the court? What happened to him? Oh well.

Hypocrisy is alive and well in the good ol' U.S. of A.

Right now in California we are in the final week before our primary. The political advertising is everywhere. But what about the truth? Where is it?

We have a series of propositions on the ballot, 94 through 97. They are about allowing four Indian casinos to expand their number of slots and a few other things. This will make them more competitive with Las Vegas.

What will it do for California if we allow this expansion? Well, for one thing, it will triple our anticipated revenue from the four casinos involved. We should get more than $100,000,000 per year for the next twenty years. And the casinos have agreed to "share" with the tribes and bands that don't have casinos to provide better health care, education, and housing. It seems like a Win-Win scenario.

But a certain Las Vegas casino owner and two race track owners take exception to these propositions. That's OK, they have a right to. But the advertising campaign they are running is specious at best. They say that the other Indians are against it when in fact only two tribes are against it (and they have casinos) while 70 tribes are for it. They say that the casinos will "decide" how much to pay California, but the truth is that the bills call for fully audited statements from the casinos. They say it won't help California schools. But the 9 Billion Dollars California expects to get over the next two decades will go into the general fund and education gets some of its money from the general fund (in addition to direct allocations from property taxes).

I think that politicians, government employees, police, and political "activists" need to be truthful. We can't stand this "double" standard. Enough of the lying. Stop the hypocrisy.

If you don't want me to lie, don't lie to me.

Vote YES ON 94, 95, 96, and 97. It's good for California.