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October 13th, 2011 -- by admin
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Hey, what’s going on guys? What do you do when you see a family member becomes unemployed? Or about to invest foolishly in real estate? How do you respond when you know that he or she won’t be able to pay their bills? Let’s take a look at a few options you can consider to help your family members in trouble, without hurting yourself financially.
1. Give a cash gift.
Of course, this is the least effective because if someone is not financially responsible, giving him or her cash will actually be detrimental. That being said, if your loved one is having a short-term cash flow problem, decide how much you can afford to give, without putting yourself in financial jeopardy, and then either give the maximum amount you can afford all at once or perhaps give smaller gifts on a periodic or regular basis until the situation is resolved. Make sure it’s clearly understood that the money is a gift, not a loan to be repaid, so you don’t create an awkward situation for the gift recipient.
2. Make a personal loan.
Your family or friend may approach you and ask for a short-term loan. Talk frankly, clearly write out the terms of the loan on paper, and have both parties sign it. This helps both parties be clear on the financial arrangement they’re entering into.
3. Co-sign on a bank loan.
Before simply saying “yes” and essentially lending someone your good credit, it’s important to realize that there are legal and financial implications to co-signing on a loan. The most critical thing to understand is that you are legally binding yourself to repay the loan if the other borrower fails to do so. The lender can take legal action against you and require that you pay the full amount, even if you had an agreement between you and your family member that you would not have to make payments. This delinquent loan will also now affect your personal credit. So if your friend fails to make payments on the loan on time and in full the lender can report the negative account activity to the credit bureaus to file on your credit report which, in turn, can lower your credit score.
4. Create a budget and help create a bill-paying system.
Often, people in a financial crisis simply aren’t aware where their money is going. If you have experience using a budget to manage your own money, you may be able to help your family in creating and using a budget as well. To break the ice you may want to offer to show them your budget and your bill-paying system and explain to them how it helps you make financial decisions. As you work together to help them get a handle on their financial situation, the process will point out places where they can cut back on expenses or try to increase their income to better meet their financial obligations.
5. Provide employment.
If you’re not comfortable making a loan or giving a cash gift, consider hiring your friend to assist with needed tasks at an agreed-upon rate. This side job may go a long way towards helping them earn the money they need to pay their bills, and help you finish up any jobs that you’ve been putting off. Treat the arrangement like you would any other employee; spell out clearly the work that needs to be done, the deadlines and the rate of pay. Be sure to include a provision about how you’ll deal with poor or incomplete work.
6. Give non-cash financial assistance.
If you’re uncomfortable or unwilling to give your friend cash, consider giving non-cash financial assistance, such as gift cards or gift certificates. You’ll have more control over what your money will be used for and you can easily buy gift cards in varying amounts at most stores. Of course, he or she can always sell those and buy whatever he or she wants. But if that’s the case, he or she has more serious problems that you probably could not help with.
7. Prepay bills.
You may want to consider prepaying one or more regular bills for your friend to help them during their current financial crunch. Offering to do something, such as paying their car payment may help them avoid a short-term crisis and give them the little extra time they need to work out of their situation.
8. Help them find professional assistance and local resources.
You simply may not wish or be able to provide your family member with financial assistance or hands-on help. But you can still play a key role by helping them find local professionals that can steer them in the right direction. Consider referring them to a well known career counselor, welfare agency, credit and debt counselor, or even a lender who can provide short-term solutions.
Friends, family and money aren’t always a good mix. But, in tough economic times or when faced with unexpected emergencies, your loved ones may truly need your financial assistance. Before you commit to helping, be sure to think through what you can and can’t afford to do. Remember, if your own resources are limited, there are other meaningful, effective, and creative ways to help.
Stay tuned for more updates.
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Tags: 8 Ways To Help Family Members In Financial Trouble
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September 27th, 2011 -- by admin
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Hey what’s going on guys? As real estate affordability falls, rentals come up. Now would be a great time, especially in the Bay Area, to make some well deserved money. After all, you didn’t walk away from your multiple mortgages. You deserve it.
The following is courtesy of SFGate:
As the cost of maintaining your rental property rises over time, you may need to raise the rent you charge. But before you raise the rent, you will need to take several things into consideration.
First, do your tenants have a clause in their lease that ensures the rent will not be raised during the course of the term of the lease? If your lease agreement contains this clause, you will not be able to raise the rent amount for your property until the period of the lease has elapsed. This is also a concern for new landlords that have taken over ownership of existing rental property. You must honor the terms of the lease for your new tenants, even if the rent amount does not cover your expenses.
When the lease is up for renewal, you can try to negotiate a rental increase with your tenants. Some of them may be willing to pay more, but be prepared for some percentage of tenants to balk at the increase and maybe even move out. Be prepared for this eventuality by advertising to fill any vacancies.
You will need to provide your existing tenants with enough notice that a rent increase will be forthcoming. This usually means a 30-day notice, but may differ according to state or local law.
Some states and many cities have enacted rent-control measures to prevent landlords from overcharging their tenants. If your state or city has a rent-control law, you are limited in the amount of rent you may legally charge your tenants. Before getting embroiled in a legal battle, make sure that you are complying with all applicable rent-control laws.
You will also need to make sure that the local housing market will support your demands. Research other rental properties in your area before making your decision. If the majority of the properties are charging much less for rent, you probably will not be able to attract new tenants — or even retain your existing tenants.
Gradual rent increases generally go over better than large one-time increases. For example, you may need to raise the rent $100 per month to make a profit. However, a $100-a-month jump may frighten your existing tenants and keep new tenants away. Instead, try raising the rent just $25 per month for the first six months, and then another $25 for the remaining six months of the year. This may help reduce your vacancy rate and maintain your property’s profitability.
Do not be afraid to negotiate with a good tenant if they cannot meet your new rent amount. Good tenants can be hard to find, and you should be willing to bend a little to keep them. You may be able to trade services for the rental increase amount, such as lawn care or odd jobs on the property.
If you do decide to make an exception for a good tenant, you may open yourself up to accusations of favoritism. To protect yourself from such claims, document what the tenant has promised to do in exchange for a decrease in rent.
If your tenant does offer to provide services in exchange for a decrease in rent, make sure that they actually do provide the services. If you are an absentee landlord, this can be difficult to follow up on, and your tenant may be counting on this. Take the time to check on their work before letting them slide on their rent responsibilities.
Landlords that do allow a trade of services for rent must still need to claim the entire amount of the rent as income on their tax returns. For example, if you charge $500 a month in rent, but your tenant pays only $450 and mows the lawn, you must claim the entire $500 amount as income since you are receiving a service in exchange for that $50. But, you should be able to deduct the $50 as a property expense. Check with your tax advisor to clear up any tax issues before taking this step.
Stay tuned for more updates!
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Tags: Alex Leigh, Raising The Rent of Your Rental Properties
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September 27th, 2011 -- by admin
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Hey what’s going on guys? Just when it looked like we were getting better and then bam! it’s all going to go downhill again. That’s what happens when you use quick fixes on serious problems. I’m talking about the U.S. economy by the way.
The following is an article originally from SF Gate:
Sept. 27 (Bloomberg) — The U.S. may be entering another recession, according to Nouriel Roubini, co-founder and chairman of Roubini Global Economics LLC.
“The question is, will the recession be mild or severe?” Roubini said in a panel discussion today at the Bloomberg Dealmakers Summit in New York. “We are running out of policy bullets.”
The Conference Board today said that confidence among U.S. consumers stagnated in September near a two-year low as the share of households saying it was difficult to find a job climbed to the highest level in almost three decades. The reading signals hiring hasn’t improved after the world’s largest economy failed to create jobs in August and the unemployment rate held at 9.1 percent.
The debt crisis in Europe could be become “worse” than the collapse of Lehman Brothers Holdings Inc., Roubini said.
Roubini predicted a bubble in U.S. housing prices before the market peaked in 2006. His forecasts haven’t all been accurate. When the Standard & Poor’s 500 Index fell to a 12-year low on March 9, 2009, he said it probably would drop to 600 or lower by the end of that year. Instead, the U.S. equity benchmark gained 65 percent for the rest of 2009.
Remember, cash is king!
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Tags: Alex Leigh, Roubini Says, U.S. May Be Entering Another Recession
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September 19th, 2011 -- by admin
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Hey guys, here I am again giving you another thing of value. And of course, the thing comes in the form of information! Enjoy.
Courtesy of Associated Press
By DEREK KRAVITZ, AP Real Estate Writer
The U.S. homebuilders’ outlook worsened in September, as foreclosures and anxious buyers hurt construction and sales activity.
The National Association of Home Builders said Monday that its index of builder sentiment in September fell to 14 from 15. The index has been below 20 for all but one month during the past two years.
Any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the housing boom.
Last year, the number of people who bought new homes fell to its lowest level dating back nearly a half-century. Sales this year haven’t fared much better.
Builders are struggling to compete with foreclosures, which have made the price of re-sale homes more competitive. Many buyers are having difficulty obtaining loans or meeting higher down payment requirements. Low appraisals are scuttling some deals after contracts have been signed and some would-buyers who want to purchase a new home can’t sell their old one.
David Crowe, the group’s chief economist, said a weakening U.S. economy and high unemployment has made the short-term prospects for the homebuilding industry “fairly bleak.” The low indexes reflect “builders’ awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today’s uncertain economic climate.”
While new homes make up a small portion of sales, they have an outsize impact on the economy. The builders’ trade group says each new home built creates an average of three jobs for a year and generates about $90,000 in taxes.
Separate gauges of current single-family home sales and foot traffic of prospective buyers each fell two points, to 17 and 11, respectively.
An index of builders’ outlook in the Midwest rose one point to 11. In the Northeast and South, the index fell two points to 15 and in the West it fell three points to 12.
Diversify folks!
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Tags: Alex Leigh dot Net, US home builder outlook worsens in September
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July 1st, 2011 -- by admin
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Hey, what’s going on folks. Below is a reprint courtesy of SfGate of rigging foreclosure auctions. I want you to read it first before I tell you why I reprinted it.
Eight Bay Area real estate investors agreed to plead guilty to rigging foreclosure auctions in Alameda and Contra Costa counties, the Department of Justice said on Thursday. The investors’ actions suppressed competition for properties, keeping their prices noncompetitive, it said.
The felony charges, which result from a joint investigation by the Justice Department and the FBI, said the investors conspired to refrain from bidding against one another at public courthouse-steps auctions, which are the final stage in the foreclosure process. The investors then “would hold a secret, private auction at which each participant would bid,” the Justice Department said. The price difference between the public and private auctions “was the group’s illicit profit, and it was divided among the conspirators, often in cash.”
Foreclosures have multiplied with the housing downturn, creating a playing field for this type of activity. In California, lenders repossess homes that are in arrears on their mortgages by selling them at public auctions on county courthouse steps; hundreds of such auctions occur every weekday throughout the state. Many homes do not generate a bid and thus become the lender’s property; others are bid upon by real estate investors.
“While the country faces unprecedented home foreclosure rates, the collusion taking place at these auctions is artificially driving down foreclosed home prices and is lining the pockets of the colluding real estate investors,” said Christine Varney, assistant attorney general in charge of the Department of Justice’s antitrust division, in a statement.
Gina Talamona, a spokeswoman for the DOJ antitrust division, said the probe is ongoing.
“The antitrust division and FBI continue to investigate real estate foreclosure auctions and will continue to look at anticompetitive conduct” there, she said.
The investors were charged with various counts of bid rigging to obtain selected real estate, which carries maximum penalties of 10 years in prison and a $1 million fine, and mail fraud, which carries maximum penalties of 30 years in prison and a $1 million fine.
Charges were filed on Thursday in U.S. District Court for the Northern District of California in Oakland against Thomas Franciose of San Francisco, William Freeborn of Alamo, Robert Kramer of Oakland, Thomas Legault of Clayton, David Margen of Berkeley, Brian McKinzie of Hayward, Jaime Wong of Dublin, and Jorge Wong of San Leandro.
The actual pleas and sentencing would happen at a future date.
Franciose, Freeborn, Margen and Legault did not return calls for comment. Kramer declined to comment. McKinzie, Jaime Wong and Jorge Wong could not be reached.
Now, I did not show you this to show you how the rich are getting richer, or how shady these people were. This shows that there is still money to be made in real estate!
Now that these people are being brought to justice, perhaps this will scare the usual monopolies to ease up a bit to allow us laymen to get in on the action. If you have been saving those hard earned dollars, perhaps now is the time to become a slumlord – er, landlord!
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Tags: 8 in East Bay Admit to Rigging Foreclosure Auctions, ipm
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