Enjoy a spectacular meal at the Backwoods Inn in Santa Clarita, California!

Located in the heart of the Santa Clarita Valley, sits the best steakhouse in town.

Backwoods Inn has been a favorite amongst the locals since 1968 and is still going strong.

The food at the Backwoods Inn is delectable and mouthwatering all rolled into one.

This amazing and yummy place is perfect for any occasion as well as hosting banquets!

While you are at the Backwoods Inn, why not enjoy a delicious cocktail to go with your delectable meal!

 Many famous patrons graced the Backwoods Inn with their presence such as Roy Rogers, Martin Landeau, James Earl Jones, Gene Hackman and many more!

For more information regarding the Backwoods Inn please visit the link below: http://www.backwoodsinn.com/index.html

What a great way to enjoy an evening!

CHEERS

Source: http://activerain.com/blogsview/2241423/-los-angeles-411-enjoy-a-fantastic-dinner-at-the-backwoods-inn-in-santa-clarita-california

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Expect to see more of this issue…

As the presidential election looms, the issue of immigration – particularly illegal immigration – will move into the spotlight.   This has implications for all Americans, but it may have a particular relevance for landlords. 

An article in today’s New York Times discusses the issue of local statues which impose penalties on landlords who rent to illegal immigrants.  In particular the article chronicles the story of Riverside, New Jersey, which is re-thinking legislation which it passed a year ago which criminalized employing or renting to an illegal immigrant.  The law has had the unintended consequence of driving away residents in large numbers, which has had an unexpectedly large impact on local businesses.  It appears that citizens who once lobbied for the law are now re-thinking their position. 

From the landlord’s point of view, this is a sticky issue.  I live in Texas, a border state.  Regardless of your political affiliation it’s obvious that illegal immigrants are firmly woven into the economic and social fabric of our society here.  I’m trying to imagine operating under legislation which requires me to ascertain an applicant’s legal status.  Is that SSN real or bogus?  How about the ID card that the applicant has provided?  Or the driver’s license?

There is an easy solution that many landlords will turn to: just don’t rent to anyone who seems "suspicious".  This, obviously, is a law that invites investors to turn to discriminatory practices. 

I’m not a policeman or a Immigration Service agent.  That’s not my job.  I’m a real estate investor, and part of being an investor is to offer safe, affordable housing – places where families want to create homes – and to do so profitably.  I’d strongly disapprove of a law that tries to turn me into a government enforcement agent. 

These are bad laws, and landlords should be vocal in their disapproval when they pop up locally. 

I’m interested in your opinion on this issue…

Source: http://www.equityscout.com/landlord-or-ins-agent

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I’ve stated in previous posts and articles that running the numbers and making sound assumptions about your potential investments is one of the keys to avoiding real estate investor burnout.  Real estate is a long term game and you can’t build a stable portfolio overnight.  This means you need some staying power, so if you end up packing it in after your first investment or two you’ll never get there.  

So in my view looking before you leap is the best way to keep your momentum as an investor, and that means having an idea about what to expect from an investment in terms of rate of return, cashflow and net present value.  

But analysis is like aspirin, or fine wine, or just about anything, for that matter.  A bit of it can make a big difference – but that doesn’t mean that a massive dose is a good idea.  More isn’t necessarily better.  

How do you strike the right balance?  Well that depends on the investor.  Personally, I’m an engineer by training and I love numbers; that’s why I ended up building this site.  I see the value in using a tool to catch all of those assumptions wrapping them into a cashflow projection.  Plus, I love to tinker.  But therein lies two danger – 1) becoming infatuated with the analysis and forgetting about the underlying uncertainties (no analysis is perfect) and 2) becoming infatuated with perfecting the analysis to the extent that you never get a deal done.  In other words: don’t get paralyzed.

Both of these problems happen…probably more than you’d think.  

So…how to avoid these issues?  Again, it depends on the investor and your personality type, but I’d suggest the following rules of thumb: 

• Remember: your analysis is based on your assumptions.  Unless you have a working crystal ball you’re never going to get it all right.  Your analysis will give you your base case.  When you get your results ask yourself “is this target a good result?  Does the potential reward justify the risks?”  if the answer is “yes” then drive on and figure out how to make the deal work – don’t spend time fine tuning.  
• Analysis is a process:  I worked for a while in strategic planning with a major corporation.  We spit out huge, detailed plans.  And we never followed them.  Is this a bad result?  Well, not necessarily – the planning process itself is hugely valuable.  It forces executives to examine their assumptions, communicate their goals, and crystallize their thinking.  The planning process helps organizations to articulate their vision and set their course, even if they don’t follow the resulting plans to the letter.  Real estate analysis is similar: running the numbers will force you to consider the big questions around vacancies, rental rates, repairs, and other risks that you might not consider before jumping into the investment.  
• Evaluate the sensitivities:  Don’t just look at the final “answer” – look at the sensitivities to understand how much risk you’re taking.  Ok, you’re forecasting a 5% appreciation rate…but what if it’s 3%?  Or 8%?  The EquityScout tornado diagrams will help you do this, but if you’re running spreadsheets you can do the same thing manually.  
• Be honest with yourself:  There are two camps that you want to stay out of – the overly conservative camp that kills every deal that comes along by handicapping them with excess costs, and the rose-colored-glasses camp that tweaks all the variables up until they get the result they want.  Nervous Nellies do no deals, and the Pollyannas do bad ones.  
• Remember: once you’ve made your bed you’re going to have to lie in it.  A single fortuitous event (a upgrade in the neighborhood) or misfortune (a mold infestation or a disastrous tenant) will radically impact the performance of your investment.  You’re still going to have a lot of uncertainty to manage once you make your investment; the purpose of the analysis is simply to ensure you’re pointed in the right direction before you pull the trigger.  

Source: http://www.equityscout.com/five-things-to-remember-w

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Well, this was certainly a long trip and very tiring.  But I will tell you it really makes one appreciate what we have here.

Everyone should do this just once, and I hope you all get a chance to.

The series:

http://www.youtube.com/watch?v=QaRLExAE36s http://www.youtube.com/watch?v=VAZZ0YJcQCY http://www.youtube.com/watch?v=CNBT8utxQds http://www.youtube.com/watch?v=n_rC7dq21kc http://www.youtube.com/watch?v=9povuLZCYcY http://www.youtube.com/watch?v=i3UlQ4-zmsI http://www.youtube.com/watch?v=tclBF11N-NE http://www.youtube.com/watch?v=r2LR6QNivD4 http://www.youtube.com/watch?v=vFSu6ayn_wQ http://www.youtube.com/watch?v=4RS6jpu1umo http://www.youtube.com/watch?v=X3d6DrSdoYI

Source: http://activerain.com/blogsview/3041192/last-stop-bangkok-back-in-civilization

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I wrote recently about how I was annoyed at USAA’s excessive fees for pre-approving a mortgage (fifty buck fee to fax me, their member of seventeen years, a mortgage pre-approval.)

Well I decided to give ‘em another chance.  I actually want to be a USAA customer.  I’ve been with them for seventeen years.  So now that I have a property under contract I gave them a call for a quote.

Yeah, they’ll quote me a rate.  But first I’d need to fill out an application for a $350 fee.  And if I don’t like the rate?  That’s fine - I could simply go with another lender and they’ll keep my $350.

What?

So unfortunately this is the second and last strike for USAA as a mortgage lender (this ain’t baseball).  Was hoping to be writing a happy post about how the company that serves our nation’s servicemen and women came through in the end, but unfortunately it wasn’t meant to be.  Oh well.   Looks like I’ll be going with Wells Fargo (who I’ve also done business with in the past, and who treats me like a repeat customer.)

Source: http://www.equityscout.com/usaa-strike-two

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I wrote a few days ago about the phantom bounce that some housing statistics may be implying.  The New York Times has followed up with an additional piece on the evolving condominium market, which might flag some opportunities for real estate investors.  

The condominium market is more vulnerable to large fluctuations in price because they disproportionately attract speculative investors, as opposed to single family homes.  Residential homebuyers tend to be less fickle – a property which is purchased as a home as opposed to an investment is less likely to be whipsawed by the market.  

That’s starting to show in some major metropolitan markets where condos used to be selling like hotcakes, but are now slowing down.  Buyers in some cases are forced to sell at a loss – or to rent them out at a rate that turns them into negative cashflow investments.  

This, undoubtedly, will turn out to be a blip in some areas, not a long term trend.  Nervy, contrarian investors can find bargains by jumping onboard when everyone else is headed to the lifeboats – and this current wave of woes was prompted by investors who did exactly the opposite: they broke ground when the market was white hot and development costs were through the roof.  

Check out these stats on the WashingtonDC area.  

Note:  the downturn at the tail end of the "condos sold" graph is in reality likely to be even more severe than the chart indicates, given that cancellations are probably not accounted for. 

Shoot me a note and let me know how your metro area is faring.   

Source: http://www.equityscout.com/rocky-ride-for-condoshows

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The Creative Real Estate (CRE) Online bulletin board is a good reference for real estate investors.  You’ll see all sorts of discussions there – relevant and irreverent.  It’s a fun place to hang out, and every now and then I get a new point of view that makes me look at things differently.  But in all things in life you have to be a discriminating consumer of information – especially the unfiltered stuff that you get on a public online forum. 

Also, be aware that the website sells courses (many costing hundreds of dollars) which I categorically don’t recommend – so don’t take this post as an endorsement of anything that they’re selling.  But make up your own mind, and I’d be interested in any feedback that anyone might have. 

Source: http://www.equityscout.com/check-out-the-creonline-bulliten-board

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I know you have heard about Land Trusts and you know that you should be using them. But I know you and you haven’t gotten around to using them yet. You believe that Land Trusts are too complicated and you just haven’t had time to learn and completely understand them, but you will get around to it one of these days.

Trusts have been around for centuries and there are tools that the rich use regularly to protect their assets. Land Trusts are a very special type of Trust that was created to protect your real estate investments, whether you are a landlord who holds real estate for the long term or a wholesaler flipper who only owns the property for 5 minutes.

There are several reasons why people use Land Trusts, but the most important one to me is the Privacy. No one knows what I currently own or what I have owned in the past and that is comforting to me to know that no one will ever be able to find all my assets if they get the bug to sue me for any frivolous reasons. 

My assets are protected, or shielded from discovery because I have taken the time to set up my business that way. However, Land Trusts only provide you with the asset protection and privacy you want if you set everything up that way in the beginning and continue to use them in the future. Land Trusts cannot help you if you have waited too long and then scramble to hide all your assets using Land Trusts at the first sign of trouble. If you suddenly transfer everything to Land Trusts, any lawyer will be able to find them and then petition a judge to have those transfers reversed and put back into your own name if the lawyer can convince a judge that you placed everything into Land Trusts to try and avoid a law suit.

As our economy and the real estate industry change, it will be more important today to start learning and implementing Land Trusts as part of your own privacy and asset protection program than it has ever been in the past. I urge you to stop procrastinating and start leaning and implementing Land Trusts right now!!!

Source: http://www.mikejacka.com/Blog/post/2010/08/09/Land-Trustse280a6-The-Real-Estate-Investors-Best-Friend!.aspx

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You can find some of the most amazing bargains at the Saugus Speedway Swap meet.  Even if you are a visitor to Southern California this is a great way to spend a day. Get there early to hunt through all the bargains, you can have yourself some breakfast while you are there or an early lunch.  It’s worth a trip to this swap meet.

Source: http://activerain.com/blogsview/2238524/-los-angeles-411-shop-for-bargains-at-the-saugus-speedway-swap-meet-in-santa-clarita-california

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Over the last few years we’ve been predicting records were going to be broken for years to come and that it would be a uniquely incredible environment for real estate investors. Today RealtyTrac issued a press release for the month of August that illustrates the fulfillment of this prediction in no uncertain terms.

Here are the key numbers to note:

• In August, 1 in 381 housing units received a foreclosure filing.
• RealtyTrac has seen 1.2 million repossessions so far in 2010.
• Before the housing bubble burst, in 2005 only 100,000 houses became REO’s.
• 95,364 property foreclosures in August, a historic record.
• An increase of 25% since the start of the 2010.
• In August, 96,469 homeowners receive a notice of default.
• 1% decline in the number of NOD’s filed in July.
• A 30% decline since August 2009 after a peak of 142,064 NOD’s issued in April 2009.

For a complete list of notable numbers you’ll find them all just above the comment section. Our initial prediction was that with the drastic turn in the economy. This would create a flood of opportunity for real estate investors based on the sheer volume of properties vulnerable to a declining economy. 

The numbers laid out in this release speaks volumes of what’s going on in the big picture. In understanding the big picture we have the opportunity to reverse engineer these trends in order shed light on our local markets. Being investors we always need to be mindful of market conditions themselves as they will dictate what we can and can’t offer.

There are some pretty telling numbers laid out by in this release, but Rick Sharga, Vice President of RealtyTrac, doesn’t mince words by saying,

“I don’t think it gets any better really until the end of 2013.”

It doesn’t take a rocket scientist to recognize that things are getting worse (unless you’re an investor, in which case is the exact opposite). But it does take some cajones to make a long term prediction to when things will get better.

However, the fact remains that we’re real estate investors and investors have their skills and understanding of the market, put them both to use, and generate a positive return.

Now let’s look at these numbers to get a sense of what’s going

Digging below the surface of the scale these records reflect there are two trends that stand out.

1. The rate of properties being taken back by the bank is increasing.
2. The rate in which Notice of Defaults are being is declining.

This may suggest that we’re reaching the bottom and things maybe turning around as the number of NOD’s and foreclosure filings that indicate the rate of origination for these troubled properties is winding down. But this simply isn’t case as Rick Sharga laments… but rather only the making of another twist in the housing saga called our market…

The Antagonists of the Housing Market

In any saga there comes a time where the protagonist looks back on what’s happened and then wonders what could have been. But for every saga there must be an antagonist to make things interesting and there have been 3 significant acts that have muddied up the waters… perhaps you can identify the antagonist.

1. Troubled Assets Relief Program aka “TARP”
2. Foreclosure Moratorium
3. First Time Homebuyer Tax Credit

We can only wonder what might have been, but in essence these were all nothing but short term stalling tactics used by the protagonist to buy them more time. TARP was meant to relieve pressure on the housing chunk of the finance market. The moratorium literally but a dam up in a river of foreclosures but was completely unsustainable, stall tactic?

Finally the First Time Home Owner Tax Credit comes in to shore up enough incentivized buyers to redirect the market upward. It only temporarily altered buying patterns and now that we find ourselves in record bank repossessions we can assume this isn’t what the antagonist had in mind.

But these are pretty much old news, except for the fact that the effects of these acts have been adjusted for by the market to create the current list of statistics. So what gives?

You Didn’t Think a Saga of this Magnitude had only 1 Antagonist did you?

When it comes to taking back a property it is up to the bank to file (unless there’s a moratorium) and even though the number of REO’s is breaking records time-and-again it sure doesn’t seem that way in the field. If you’ve noticed this when you’re checking the daily list of REO’s on the MLS and have experienced the same bewilderment you are not alone.

In What is the Real Estate Shadow Inventory I covered a topic that continues to gain attention, and rightfully so! Shadow inventory is the perpetration of antagonist #2 and this is their concern:

1. The buyer pool is too soft.
2. Softer the buyer pool then longer it takes to clear “distressed inventory.”
3. Longer it takes to clear the greater price pressure there is on the overall market.
4. An increase in price pressure increases the number of underwater properties in the market.
5. The more homes that are underwater correlates directly to the number of homes in danger of foreclosure.

To add one more point based on the Notice of Default trend is that there they are attempting to stem the tide into the pre-foreclosure pool. So not only are banks unsustainably holding REO shadow inventory, but now they are now widening the schism by shadowing the foreclosure process which is cuts into our pool of motivated sellers.

Point here is that the efforts of the antagonists to the housing saga will continue and the plot can only thicken as their unsustainable efforts erode. A knot has been created and we, as the protagonists, are the only ones micro enough with the skill sets to solve these problems. Locally we invest and work to remove all of the pins, one-by-one, that continue to hold down our big picture.

Appendx: Key Indicators

• In August, 1 in 381 housing units received a foreclosure filing.
• RealtyTrac has seen 1.2 million repossessions so far in 2010.
• 2009 saw just under 1 million repossessions.
• Before the housing bubble burst, in 2005 only 100,000 houses became REO’s.
• 95,364 property foreclosures in August, a historic record.
• 2% increase over May’s record of foreclosures.
• As well as a 3% increase over July foreclosures.
• An increase of 25% since the start of the 2010.
• In August, 96,469 homeowners receive a notice of default.
• 1% decline in the number of NOD’s filed in July.
• A 30% decline since August 2009 after a peak of 142,064 NOD’s issued in April 2009.
• Total foreclosure actions totaled 338,836 in August.
• An increase of 4% from July.
• Down 5% from August 2009.
• Auctions that were newly scheduled numbered 147,000 properties in August.
• Up 9% from July and the 2nd highest total since April 2005.

Let’s discuss this because it is only the tip of the iceberg… “What do these numbers tell you?“ “What’s your REO market like?” “What do you see happening next?”

Source: http://www.mikejacka.com/Blog/post/2010/09/16/A-record-number-of-US-homeowners-lost-houses-to-their-banks-in-August.aspx

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