WIAcademy EducateBlog

It’s a great day for internet and e-mail users – one of the world’s top spammers has been arrested. This is not directly connected to real estate investing, but spam affects every e-mail users, and I just can’t resist commenting on it.

An article on techshout.com opened with this:

A man who ironically has the distinction of being one of the world’s most prolific spammers has been arrested and in fact U.S. authorities went on to say that computer users across the internet did observe a drop in the amount of junk e-mail.

Robert Alan Soloway, 27, has been indicted on 35 federal felony counts, including identity theft and money laundering. U.S. Attorney Jeff Sullivan said this is the first time federal prosecutors have used identity theft statutes to indict someone for taking over someone else’s internet domain name. Sullivan said Soloway is responsible for millions of spam e-mails. If convicted as charged, Soloway faces a maximum of more than 65 years in prison (without internet access, we hope) and a fine of $250,000.

Congratulations to the diligent investigators and prosecutors.

Jackie

Posted 09:33 AM | Permalink | Comments (0)

The Life and Health Insurance Foundation for Education (LIFE) recently released some interesting statistics on disability. LIFE commissioned a study to analyze disability trends in the United States. In looking at the results, LIFE points out that it’s important to keep in mind that this study examines the individually insured population, which is more affluent and healthier than the population at large. What that means is that the risk of disability is even higher among the general population, a finding supported in other research studies.

Some key points:

• The probability of a white-collar worker becoming disabled for at least 90 days between the ages of 35 and 65 is 27% for men and 31% for women, compared to 29% for men and 34% for women in the 1970s and 1980s.

• A 35-year-old male whose job involves hazardous work with heavy manual labor has a 51% chance of becoming disabled for at least 90 days between the ages of 35 and 65. A 35-year-old male in a skilled clerical or skilled technical position has a 33% chance of becoming disabled for at least 90 days between the ages of 35 and 65.

What will happen to your real estate investing business if you are unable to run it for a few weeks, a few months, or longer? Who will manage your properties and take care of administrative tasks?

There are two key points to consider: 1) Who will do the work you can’t do? And 2) How will you cover the costs associated with hiring someone to do your work and replace lost revenue?

Putting together a plan that addresses who will actually perform the tasks you do will depend on the size of your operation and your particular resources. This is something you should discuss with your business associates and family members.

Covering the costs can be addressed at least in part through disability insurance. Talk to your insurance agent about your various options for disability coverage, including policies that pay you personally, policies that pay your company, and even policies that will pay your business overhead costs if you (as the owner) are unable to work in your business.

Don’t let an accident or illness wipe out everything you’ve worked hard to accomplish.

Jackie

Posted 09:53 AM | Permalink | Comments (0)

According to a recently released Administrative Office of the U.S. Courts study, "baby boomers", Americans age 55+ , are filing bankruptcy at a faster rate than the rest of the population and predictions are that this will continue to increase as the baby boomers grow older.

The median age for bankruptcy petitioners in 1994 was 37.7, in 2002 it increased to 41.4 years. The study also concluded that Chapter 7 petitions are becoming more prevalent for older filers. Between 1994 and 2002, the percentage of filers opting for Chapter 7 (liquidation), as opposed to Chapter 13 (reorganization), proceedings increased 87.1%.

Posted 02:08 PM | Permalink | Comments (0)

I recently received a news release about 60 cats abandoned at a foreclosed house. The release said that an evicted man walked away from his home in the East End of Cincinnati, Ohio, not telling anyone about the 60 or more cats and kittens trapped inside without food, water or medical attention. When the animals were discovered, the bank and sheriff’s office began working with local animal rescue groups and members of the community to save the cats, get them into shelters, and prevent them from escaping into the neighborhood when the house was cleared of its contents in preparation for rehabbing and sale.

This sad situation could have been prevented if the homeowner had asked for help from local rescue organizations when he realized he would not be able to keep his home, rather than just walking away and leaving the neglected cats for someone to accidentally discover.

Our foreclosure investing training emphasizes putting together win-win deals and whenever possible helping homeowners avoid foreclosure through strategies such a short sales and other preforeclosure investing techniques. If you are working with a seller in foreclosure who has pets, point out the importance of making the care and safety of those pets a part of the seller’s plan for coping with the foreclosure.

For more details on the Cincinnati situation, visit www.foreclosurecats.org.

Jackie

Posted 08:46 AM | Permalink | Comments (0)

I recently received a note from the PR agency for Matcor, Inc., a company involved in corrosion engineering, warning that 80 percent of balconies on multi-story condos in Florida are “infected” by corrosion.

The message continued: “While the symptoms of corrosion (brownish rust stains and cracking concrete) are an eye sore, the real problem is that it is weakening the structure and putting lives at risk. Imagine residents stepping out onto their balcony and falling. Maybe the fall would take out other balconies below it, and more lives with it.”

Is this a scare or a serious problem? I don’t know. But if you’re investing in high-rise apartments or condos, especially ones located in coastal areas, you may want to do some additional research and be sure you do your due diligence before buying.

Jackie

Posted 08:54 AM | Permalink | Comments (0)

CompleteLandlord.com recently surveyed 300 residential landlords about tenant complaints. The responses: 59 percent reported tenant complaints remained the same; 33 percent said complaints had decreased in the past 12 months; and 8 percent reported an increase in complaints over the past year.

Landlords indicate the most frequent tenant complaints were:

• 44% plumbing
• 33% heat or air conditioning
• 23% maintenance problems inside the apartment
• 19% other tenants too loud/disruptive
• 17% problems with appliances
• 15% maintenance problems on exterior of building
• 10% rents too high

According to landlords, 93 percent of tenant complaints were addressed in less than one week. Of that, 37 percent were addressed within 24 hours.

Posted 02:39 PM | Permalink | Comments (0)

If you buy a property with less than 20 percent down, many lenders require that you also purchase private mortgage insurance (PMI). Do not confuse this with mortgage life insurance (click to see my earlier post on that topic), which you should think carefully about buying.

PMI is the promise of a private insurer to repay your lender if you default on the loan. It’s a contract between your lender and the insurance company for which you pay the premiums. And the monthly PMI premiums can make a significant difference in the amount of your total mortgage payment.

Depending on the specific terms of the PMI contract, if you default on the loan, the lender can collect 20-25 percent of the total outstanding loan from the PMI insurer and then foreclosure on the property. Or the PMI insurer can pay off the entire loan and gain title to your property. Either way, you and your family are not protected—the lender is the entity that is protected with PMI.

Most lenders that require PMI also have provisions in their contracts for when the coverage can be dropped—typically after the loan is a certain age or the loan-to-value ratio reaches a certain point.

If you are required to buy PMI coverage, understand that this will not protect you from the consequences of defaulting on your loan or pay off your loan in the event of your death or disability. Read the contract carefully and make a note to follow up and get the insurance canceled when your lender allows.

Jackie

Posted 04:46 PM | Permalink | Comments (0)

Some enterprising students at the University of Central Florida are preparing to launch a new magazine targeted to their local rent-to-own real estate market. The students won a university-sponsored contest and walked away with $5,000 and a year at UCF’s Technology Incubator to get their publication up and running.

The two undergraduate students came up with the idea, they said, as a resource for people who may not qualify for mortgage loans under traditional criteria but who want to buy their own home.

Some thoughts: If you have an interest in publishing as well as real estate, you may want to consider launching a similar publication in your own market. And if you haven’t take lease option advanced training, perhaps now is the time.

Click here to read more about the contest and other winners.

Jackie

Posted 03:59 PM | Permalink | Comments (0)

It’s common for lenders to require that a borrower purchase life insurance that will repay the loan in the event the borrower dies. This is not unreasonable, but be cautious if you are urged to purchase mortgage life insurance.

With mortgage life insurance, you pay a fixed premium for decreasing term life insurance. In other words, you will pay a certain amount per year for a policy that will pay off the balance of the loan, which is decreasing every time you make a payment.

Most borrowers will find that it’s far less expensive to buy a traditional term life policy and collaterally assign it to the lender than it is to buy mortgage life insurance, especially through the lender.

If the lender does not require insurance to collateralize the loan but you want to have it to protect your family or as part of a partnership agreement, shop around for the best deal.

Jackie

Posted 02:09 PM | Permalink | Comments (0)