Boomer’s Blog

A huge, largely underestimated and under-reported glut of foreclosed, real estate owned (REO) inventory is clogging up the U.S. housing market, and the majority of doesn’t seem to appear on the MLS. The size of this “ghost inventory” is unknown, but its effects cold be chilling for cash-strapped lenders. What does this mean to real estate investors? Tons of cash if you know how to buy right and stay on top of the real estate marketing curve.

Inventories, Foreclosure Filings Skyrocket
In November, the National Association of Realtors (NAR) reported an 11.2-month inventory of existing homes on the market, up from a 10.3-month in October. But now it seems those sky-high numbers statistics could continue rising dramatically, which is likely to lower home sales prices, and slow overall U.S. economic recovery.

Foreclosure filings were reported on 2.3 million U.S. properties in 2008, and an 81 percent hike from 2007, and a whopping 225 percent surge from 2006, according to RealtyTrac’s U.S. Foreclosure Market Report released in mid-January.

These inventory and foreclosure statistics are interesting enough to raise a few eyebrows among hungry real estate investors. But when RealtyTrac compared NAR’s MLS data with its foreclosure data they raised more than a few eyebrows: they raised the question of whether a vast “ghost inventory” is lingering in REO lender clutches, and if so, is it poised to deliver another hard blow to the U.S. housing market?

Piecing together the “Ghost Inventory” Puzzle
RealtyTrac recently examined the MLS listings in four states, including California, Maryland, Florida and Wisconsin, and found that they contained only a third of the foreclosures it has in its database. Research and analysis by Mr. Mortgage points to an even more widespread problem. There are several possible reasons for this apparent disparity and none of them are good for lenders.

At a minimum, preliminary data suggest that only one-third of foreclosures are reaching the MLS database, and it’s entirely likely that this is a conservative estimate.

The value of REO property on the books of FDIC-insured banks at the end of the Q3  rose 21 percent from the previous quarter, to $23 billion. That total represents a 134 percent increase over last year, according to the latest quarterly report released by the FDIC.

Since there is no reliable way to track these data and existing systems are likely overwhelmed by the high volumes of foreclosures working their way through the system, all we have at this point are estimates as to the number of houses that are haunting  REO’s “ghost” or “shadow”  inventory, as it also is coming to be known.

According to CNNMoney, current U.S. housing market declines are likely to sharpen dramatically as a result of this situation because so many foreclosed homes are lingering in bank possession without representation in the MLS.  Regardless of how the government and lenders approach the problem, averting a tidal wave of foreclosures appears to be impossible.

What’s the Holdup?
What could explain this Grand Canyon-sized gap between the numbers of foreclosures that are recorded vs. the number that has appeared on the MLS? Here are a few explanations that immediately come to mind:

• Inventories of foreclosed and REO properties has grown so fast and in such high volumes that the banks can’t keep up with processing demands, which could delay the MLS listing process.
• Federal and state government attempts to slow the foreclosure tide and Fannie Mae and Freddie Mac’s holiday moratoria on foreclosures are contributing to MLS listing delays for many of these properties.
• Because it’s taking longer to process the foreclosures, the REO properties are getting vandalized or suffering natural damage as a result of what’s becoming long-term neglect. Getting these properties on the MLS is further delayed while banks grapple with making necessary repairs.
• It’s also possible that lenders are lagging in submitting these distressed property listings to the MLS in hopes of deferring their losses as long as possible in hopes of protecting their institutions from insolubility.
• Many of these REO properties might already be listed as short sales.

What does the Ghost Inventory Mean to Your Business?
REO housing inventories are expected to shatter more records in 2009 as more of them hit the market and banks continue their struggle to stay afloat. These market conditions are ideal for real estate investors who deploy sound purchasing strategies and stay on top of the game with effective real estate marketing.

For a quick  video detailing how and why this “ghost inventory” is likely to unleash a mighty wave of foreclosure inventory on the U.S. Housing market, check out this Mr. Mortgage interview on CNBC’s Faber Report.

SalesTeamLive Tows Your REI Bottom Line
As housing markets evolve, so must your marketing strategies. If you want your business to thrive, especially in a challenging economic landscape, you’ve got to set your priorities. If marketing doesn’t top your list, you’re cramping your growth and potential for profits in this business.
If you’re looking for cost-effective strategies that are designed to conquer today’s markets and build a stronger future for this business, SalesTeamLive’s Done-for-You marketing campaigns deliver results you can bank on.

To learn how you can leverage quick-fire market developments such as the REO “Ghost Inventory” to generate tons of cash for your real estate investing business, check out SalesTeamLive or call us directly at 1-877-STL1 (that’s 877-438-7851).

Historians may beg to differ on this point, but I’ve found solid evidence that outsourcing can be traced directly back to the Guinness Book of World Records’ vote for the World’s Greatest Salesman: Joe Girard. (I relate these facts with utmost respect for Mr. Ferriss.)

Joe sold 13,001 cars between 1963 and 1978 at a Detroit Chevy dealership. At that time Chevy ruled the automotive industry, and if you’ve ever seen a 1963 Chevy Corvette Stingray, you might think they did a pretty good job of selling themselves. To help put the time frame and scope of Joe’s astounding sales record in perspective, I’ve found an awesome 1963 TV ad for Chevy’s amazing winking automobile:

Embrace Change and Follow Through

Joe’s venture into auto sales, ironically enough, began after a failed real estate venture left him broke and with a family to feed. Joe had no experience in auto sales, but convinced the dealership’s owner to give him a shot — and a tiny space to work while he learned the ropes. He got fired from this gig for being too “aggressive” and didn’t give up. He moved on to the next position he would hold for the rest of his automotive sales career.

Joe still holds the all-time record for car and truck sales in one year: 1,420 vehicles! In one day alone, he once sold 18 vehicles.  According to the Automotive Hall of Fame, at a time when only 5 percent of dealerships in the U.S. sold 1,000 cars per year. Girard was averaging that amount each year by himself!

How Did He Do It?!
As his success grew, Joe began outsourcing his busywork by hiring staff (on his own dime) to handle the busywork, like filling out forms and getting clients qualified for their purchases. He was willing to spend a relative pittance of his own money so he would be free to focus on closing the deals.  Joe’s keen attention to the details that make a difference doesn’t stop there.

Joe also sent practically every person he ever met 13 cards per year: He sent one monthly and another at Christmas because he knew that the competition would most likely to be stewing over their eggnog than following up on leads. (Does this remind you of that stack of yellow real estate postcards you’ve been meaning to get in the mail?)

Real Estate Investors: It’s 11 O’clock, Do You Know Where Your Leads Are?
To learn how to apply these principals to your real estate investing business and make the most of your business by improving your real estate marketing, check out my new article: “10 Reasons Why Your Real Estate Marketing Should Go Postal.”

Since a lot of real estate investors I talk to have a shared gap in salesmanship skills, I wanted to include a little something extra here to get my members on the right track to improving their real estate marketing and sales skills on-the-fly.

Now in his 80s, Joe still lives in Michigan and though he has long since retired from auto sales, his rules of success continue to inspire us all.  I’m re-printing them from Joe’s Web site below in hopes that my fellow real estate investors will get as much out of them as I have:
Joe Girard’s 13 Rules of Success

1. HAVE A POSITIVE ATTITUDE: Hang around with positive people, stay away from crybabies and complainers, because they will pull you down to their level.  If something isn’t going right in your life, keep it to yourself, no one wants to hear your problems, make people believe you are having a wonderful time.
2. ORGANIZE YOUR LIFE: Keep an appointment book so that you don’t have to use the words that sicken me: “I FORGOT.”  At the end of each day, meditate upon what you did or did not do, so you can become stronger for tomorrow.  Plan your work for the next day.  If you know where you are going you will get there.  If you don’t, you are LOST!
3. WORK WHEN YOU WORK: Don’t take long lunch hours, and only eat with people who can help your cause, not with other salespeople.  Do not sneak out of work early, if you do you are a LOSER.
4. OBSERVE GIRARD’S NO-NOs: No smoking or chewing tobacco, no gum, no colognes, no profanity, no dirty jokes, no alcohol breath, and men should not wear earrings at work.  Turn off cell phones - they’re irritating.  The biggest killer of them all is NOT BEING ON TIME.
5. DRESS THE PART: what kind of people are you dealing with.  If you are selling to blue collar workers, don’t wear $500 suits and expensive shoes, jewelry or watches (it’s a big distraction).  Wear it on your own time, not when you’re working - clothes can turn people off.
6. ALWAYS LISTEN:  People can tell if you’re not listening.  The longer you listen, the more obligated people will feel towards you.  The more you listen, the more likely a customer is going to do business with you.  Listening shows that you care.  “The mouth should only be used for eating - keep your mouth shut!”  Silence is Golden.
7. SMILE FREELY:  A smile increases your face value.  If people would smile more, your customers would feel better and want to do business with you, plus it’s great for your health!
8. RETURN ALL PHONE CALLS & EMAILS: Not returning calls or emails are a way to lose customers and friends.  Return your calls and emails as soon as possible.  If you don’t, that’s a good way to burn a bridge!
9. TELL THE TRUTH: If you get caught in a lie even once, you will always be a liar.  Even if you tell the truth for the rest of your life, you won’t be trusted or believed, consider yourself DEAD.
10. DON’T OVERCHARGE: If you do, and the customer compares your deal with somebody else, you have lost him.  Take a little and leave a little; Joe only worked on a small profit, but he was heavy on volume, averaging six retail automobile sales a day.  Word of mouth got around that YOU CAN’T BEAT JOE GIRARD’S PRICE.
11. STAND IN FRONT OF YOUR PRODUCT OR SERVICES (not behind them):  The most important thing to do for your customer is SERVICE them, and they will do business with you over and over again. This is what made JOE #1 IN THE WORLD.
12. LOCK UP EVERY SALE: After you have closed the sale, ask your customers why they bought from you - if they tell you why, they are reinforcing their trust in you.  Therefore no more buyers’ remorse, MEANING NO MORE CANCELLATIONS.
13. REWARD YOURSELF: Treat yourself well for all the smart work you have done; YOU DESERVE IT!

Make the Most of Your Resources

Are you interested in making the most out of your real estate investing business without breaking the bank? When you join GaryBoomershine.com you get all the tips and tricks you need to maximize your real estate ROI.  Join us and you’ll be amazed to learn about how the little details that can make all the difference in your real estate business can be simple and cost-effective to implement.

Becoming a member is easy. Please sign in using the yellow fields at the right side of this page or on the main page at GaryBoomershine.com.

A lot of real estate investors with  short sales and pre-foreclosure backgrounds are used to dealing with incredibly motivated sellers, but today’s best deals are those with equity. Do you have the “right stuff” to angle these deals like a real estate professional?

Five High-Equity Markets Show You the Money
There are five major real estate market segments that offer investors the greatest opportunities to access equity. Homeowners in each of these segments have mindsets that real estate investors must understand  in order to successfully negotiate a deal.

Additional information about how to tap these markets is covered in greater detail in my article: “Pounce on High-equity Real Estate Markets for Maximum ROI.”  (Follow this link to ArticleBase for instant access to this story.)

1. Equity: Bigger is Better: Find homeowners with 40 percent to 100 percent equity. U.S. Census Bureau data reveal that property owners in this arena currently control one-third of all single-family homes. Often, they’re near or at retirement age, are empty nesters and are looking to downsize.
2. Adjustable Rate Mortgages with Equity: Homeowners with adjustable rate mortgages (ARMs) and equity  usually had an ARM for three years or more before they opt to sell. If they owe less than 70 percent on the loan relative to the house’s value, these homeowners may be looking to execute their own exit strategies while they still have equity - - and before their ARMs re-set.
3. Wholesale Real Estate: Properties in this segment are typically old enough to drink legally and tend to have cosmetic and deferred maintenance challenges. In this category, homes with loans at approximately  70 of a property’s value are great targets for real estate investors seeming to max their real estate ROI
4. Multiple Family Units with Equity: Here, concentrate  on sellers with at least two rental units and a maximum loan-to-value of 70 percent or less to buy, hold or flip income properties. These sellers likely are motivated to sell by ongoing tenant and maintenance hassles. They also may be amenable to financing your purchase if they can defer capital gains taxes and rake in some cash flow through you instead of dealing with rent collection.
5. Out-of-Towners: Absentee homeowners are easily identifiable because their mailing address on public record is different from their property address. Property owners in this segment often are disgruntled landlords with single-family homes or multi-unit properties.

Negotiating with High-Equity Sellers

Making deals happen with these property owners often requires more enhanced real estate marketing. Keep in mind that since they have equity, they’re not as likely to have the motivation of a distressed property owner. Though you may have to mail multiple real estate postcards to property owners in this group, you should be aware of local market changes in their areas.

Many of my clients at SalesTeamLive are reporting an across-the-board boost in high-equity homeowner willingness to deal. We can attribute this shift to the ailing economy, stock market and retirement fund losses, and cost-of-living and healthcare price hikes. Many are deciding that downsizing now is the safest way to preserve their standards of living — and their real estate nest eggs.

Someone who says no in June may have a totally different attitude come March,  when their homes still haven’t sold and they see comp prices dropping around them. This is especially true in a post-hot market where owners are facing the grim realities the market just won’t support the price they had set in their heads six months ago.

The trick is to be persistent and keep in touch. And however you communicate with high-equity homeowners, be sure to make a good impression. These days more than ever, your real estate investment business depends on it!

One Best Practice Your Mother Probably Told You About
Sending out personalized thank you cards to folks after your presentation isn’t just the polite thing to do. It’s a best practice to reinforce your professionalism, presence and status as a problem solver for your prospects.

Be resilient and implement best practices to be successful in tapping these real estate markets. Suddenly, you may find your focus shifting from what the best color is for a real estate marketing postcard to how to handle the incredibly high volume of calls you’re receiving.

It takes only a few seconds to change the way that you view your real estate business — and the world. For more best practices and strategies that rock your real estate world, sign into GaryBoomershine.com using the yellow fields on the right side of this page or on the GaryBoomershine.com main page.

A recent conversation with my friend Dan Doran reminded me of the quintessential real estate movie of all time: “Glengarry Glen Ross.” For those who are too young (or too old) to remember it, the 1992 movie was based on a Pulitzer Prize-winning play written by David Mamet.

In 1984, when Mamet wrote about a cut-throat, all-male real estate sales team working out of a dingy office and living on watered down booze and stale Chinese takeout, fallout from the “worst recession since the 1930s” gripped the United States economy — and the American psyche.

In many ways, the social, economic and political climate that led Mamet to write “Glengarry Glen Ross” easily can be compared to the many crises we’re currently seeing in the news– and in some of our financial accounts. Then, like now, banks were closing, the Fed was accused of sleeping at the wheel, unemployment rates soared, corporate corruption littered the headlines and real estate was in a major downturn.

The “World of Men” depicted in the movie includes Alan Arkin, Alec Baldwin, Ed Harris, Jack Lemmon, Al Pacino and Kevin Spacey. The focus was on their ability to close on real estate deals as though their lives depended on it. And indeed, they did.

When I first saw this movie, I was a little green in the business and it blew me away. Nearly two decades later, I’m still drawing upon its bare-knuckles illumination of real estate marketing and sales in the trenches.

There’s one classic scene that captures the essence of the real estate deal in a way that no other real estate boot camp, course, book video or coaching call can touch. And thanks to YouTube, I can offer it to you here. Please, only watch it if you’re not offended by a little salty language. (And by that, I mean a seemingly endless string of obscenities peppered with awesome wisdom on the fundamentals of survival in the real estate business.)

WARNING: This Clip Contains Obscene Language — Even By Today’s Standards.

(According to one source, actors in the movie deploy approximately 150 F-Bombs and 50 S-Bombs.) Please only view it if you’ll not be offended by the wanton use of words that beg for a bleep — or possibly if you have teenagers living in your house.

As Blake (played by Alec Baldwin) so vividly illustrates in the clip, the keys to success in the real estate can be distilled into two mnemonics:

AIDA

• A - Attention
• I - Interest
• D - Decision
• A - Action

ABC

• A - Always
• B - Be
• C - Closing

They’re deceptively simple to read, but can be brutal to implement because in real estate, as in life, the devil is in the details.

In my next post, I’ll take a candid look of one of the mission critical details that 99 percent of all real estate investors overlook in our real estate marketing. There’s one simple quick and inexpensive action you cantake to increase your income by $100,000 or more this year. Can you guess what it is?  Stay tuned and find out.

And while you’re here, be sure to become a member of GaryBoomershine.com. Just sign in using the yellow fields on the right side of this page, or on the main page at GaryBoomershine.com and you’ll get all the information you need to conquer tough markets, fly above your competition’s radar and meet your real estate investment strategic goals for 2009 and beyond.

Bloomberg had some interesting news about real estate investors earlier this month. “As the U.S. housing recession enters its fourth year, there’s no sign of a recovery because speculators account for most of the rise in sales.”

What is Recovery?

This got me thinking: How do they define recovery? In terms of the housing market, how will recovery ultimately be measured? Price stabilization? Fewer foreclosures?  More accessible home loans? More reasonable terms? Housing Inventories that don’t match the number burgers served by McDonalds?

Though some of us may look great in tights and a cape — members of or proud and independent profession are ill-equipped to go back in time and undo the havoc that has been unleashed on or economy by unbridled Wall Street greed and Main Street folly, but at least we’re doing or part to clean up the mess.

According to a National Association of Realtors (NAR) report released at the end of 2008, there were 4.2 million homes on the market in November, falling from a record peak of 4.6 million in July. What does Bloomberg call that? A death rattle?

The REI Light at the End of the Tunnel

Most signs of recovery seem to relate back to confidence in the market. If real estate investors are out there in the trenches, securing financing and taking chances on houses that the mainstream has written off as blight, aren’t we leaders on the road to recovery?

According to the FDIC, half of all U.S. purchases in November were foreclosures, and at the end of Q3, banks owned a record $11.5 billion of repossessed homes.  What do these data tell us?

Can Our Efforts Turn the Tide?

While much of the nation is sitting on the couch, watching the news and wondering why their credit cards suddenly stopped working, and lenders continue panhandling  Congress for their next financial bottle of Night Train, we’re out there in droves,sweating real bullets, replacing miles of copper wire that’s been gutted from abandoned (bank-owned) properties, finding homes for abandoned pets, painting, landscaping and committing other wanton acts of rehabbiness.

These efforts aren’t just entrepreneurial wizardry, they’re American in spirit. And it’s going to take a lot more of where that came from in every every economic sector to get this train back on the tracks.

If We Can’t Spur Recovery, How Can We Trigger the Next Crash?!

While the media may be slightly more reluctant than banks to give credit where it is due heading into 2009 with a fresh, new federal administration, this Bloomberg article does raise an interesting point about our mighty force in the rapidly evolving housing market.

Robert Shiller, father of the popular Case-Shiller real estate price index and current Yale University professor told Bloomberg: “You don’t have [the market] in strong hands, you have flippers. These speculators are preventing the market from crashing now, and when they get out, it could fall again.”

Is it just me, or is it ironic that the same article that prematurely credits us for the next crash gives us none when it comes to setting the recovery wheels in motion? Read the article for yourself and let me know what you think.

Join Us @ GaryBoomershine.com

Stay tuned for tips on using Google for free and effective online lead generation, a step-by-step guide for finding the best probate real estate deals in your market … and how A&E TV network’s “Flip this House” star Than Merrill just added REI Spy to his already illustrious resume.

Be the First to Know

Sign up either here or on the main page at GaryBoomershine.com and you’ll get the best this industry has to offer in real estate news, real estate marketing, real estate training systems, and all the creative real estate ideas that drive success in this business. Members also get exclusive access to compelling multimedia content and jaw-dropping discounts!

In the Chinese Zodiac, 2008 is regarded as the “Year of the Rat.” Those who bet on Wall Street are likely to agree. Some pundits however, and a great many more investors are recounting the most stellar mistakes of the year with a rueful cringe. Perhaps we’ll all fare better in 2009. This Chinese “Year of the Ox” is aptly named for the heavy load we’ll likely be carrying in our nation’s journey toward economic recovery.

Here are some of the more memorable blunders of the year, many of which are reported in Fortune’s “21 Dumbest Moments in Business 2008.”

1. Apple’s “Think and Glow Rich” App for Entrepreneurs: The geniuses at Apple have made a silk purse out of a dismal economy with the iPhone and its affordable interactive applications and games.  Most iphone apps cost around $5 and many are about as useful to enterprise as pet rocks. But this story may as well be torn from a chapter on psychic ability from Napoleon Hill’s century-old capitalist manifesto: “Think and Grow Rich.” Apparently, a stealth developer penetrated Apple’s channels with an application called “I am Rich” that sold at Apple’s store for $999.99. Eight users apparently bought the app, which produced nothing more than a glowing ruby-red image on their screens before Apple caught on to the hoax pulled the plug on their idreams.
2. Hopeless for Homeowners: In July, Congress passed a $300 billion “housing rescue plan” aimed at preventing an estimated 300,000 foreclosures when the plan took effect in October. Fortune reports that a mere 321 applications to the “Hope for Homeowners” program have been completed. And the Department of Housing and Urban Development says that the costly program has so far produced zero loan workouts.
3. Don’t Point that Bazooka at Me: When Mortgage servicing giants Fannie Mae and Freddie Mac hit the pavement in July, Treasury Secretary Henry Paulson convinced Congress that a federal funding boost would fix the problem. “If you’ve got a squirt gun in your pocket, you may have to take it out,” Paulson told them. “If you’ve got a bazooka and people know you’ve got it, you may not have to take it out.” Although lawmakers bought into the metaphor, in September, massive declines led the Treasury Department. Now the gun is pointed at American taxpayers.
4. The Man Who Would Be King: Treasury Secretary Henry Paulson’s three-page, $700 billion economic bail-out plan for Wall Street that included less transparency than former mafia kingpin John Gotti’s tax returns.
5. The Primetime Bailout Bonanza: Congressional debate and subsequent beleaguered approval of Paulson’s plan was a circus sideshow of its own. The 450-page final bill they approved contained more sugar and lard than a Paula Deen fruitcake. While the plan did a miraculous job of preserving Paulson’s ambiguity about how the money would be spent, provisions extending tax breaks for toy arrows and wool products are among the few aspects of the Bail-out that were comprehensible to the peanut gallery.
6. Real Estate Entrepreneurs Succumb to Fear: Amid the softening economy, and crises on Wall Street, many real estate investors lost their shirts in 2008 for one simple reason: They failed to execute strategies that are calibrated to meet the changing demands of today’s markets. Too often, when the entrepreneurial belt gets tightened, real estate marketing is the first budgetary item for cutbacks when it should be the last. Without consistent and effective real estate marketing, the “Big Picture” fades and even potentially profitable businesses wither up and die.

See the “Big Picture” that Includes Your Thriving Real Estate Business

At GaryBoomershine.com, our focus is on delivering the the most timely real estate news, resources, tools and systems that build stronger real estate investment decisions and boost your bottom line. Armed with these tools, yor “Big Picture” always is in high-definition.

Sign up either here or on the main page at GaryBoomershine.com and you’ll get the best this industry has to offer in real estate news, real estate marketing, real estate training systems, and all the creative real estate ideas that drive success in this business. Members also get exclusive access to compelling multimedia content and jaw-dropping discounts!

Beat Your Competition & Make Tons of Cash in 2009!

Join Dan Doran and me Tonight at 9:00 p.m. EST or Thurs. at 1:00 p.m. EST & Discover What’s Working in the New Year!

Help Us Cast Off the Old & Ring in the New Year with Cutting-Edge REI Strategies, Tools and Tips!

Do you have trouble sticking to your New Year’s resolutions? It’s not your fault! Even in the Information Age, it’s easy to get lost in the challenge of generating the volume of real estate marketing leads that it takes to tackle inclement markets and build a business that can withstand any storm.

Recalibrate your Business for Today’s Markets
So many tend to over think, overanalyze, and procrastinate when it comes to getting the marketing out. Especially these days, when being your own boss is more costly than ever, marketing often the first item to suffer when the going gets tough. But letting your real estate marketing slide can touch off a downward spiral that could kill your profit potential in the New Year.

Are your real estate marketing efforts in tune with your business goals for 2009? Take this quiz and discover where you may be falling short. Answer these five questions with a quick “yes” or “no” to determine if you’re achieving maximum returns on your real estate marketing (ROI).

1.    What’s your real estate marketing’s return on investment (ROI)?

2.    Can you measure the success of your real estate marketing in dollars and cents?

3.    Do you know what REI strategies will work best in 2009?

4.    Is it a strain to make your marketing budget’s ends meet?

5.    Are you afraid that profits may be out of reach for your business in the New Year?

Where Do You Stand?
Each “Yes” answer is a red flag that it’s time to concentrate your efforts on proven strategies designed to conquer today’s markets. This is the only way to generate a tremendous volume of leads that’ll withstand the tests of father time and mother market conditions.

At some point in our careers, most of us learn the hard way that the work, cash and headaches it takes to independently handle our real estate marketing can be crushing to the entrepreneurial spirit as well as to the bank account. It doesn’t have to be that way!

Nix Frustration and Waste in your Business
Someone needs to cut through all the static and talk about the straight facts & emerging strategies that’ll shelter your business in 2009 — and beyond. So, in response to GaryBoomershine.com member requests for info on how to build stronger and leaner creative RE businesses in the New Year, I’ve arranged an online event that’ll change the way you think about how your business does business.

If you’re like most real estate investors, you’re probably finding that what was working last year — or even six months ago is stalling out in today’s markets. This is change we can believe in for certain, but what’s really working for real estate investors heading into the New Year? Tune in Wednesday and find out!

Finally! A New Year’s Resolution that’s Easy to Keep
If your New Year’s resolution is to reach for greater success and growth in your business in 2009, join me and industry luminary Dan Doran Tonight, Dec. 17, at 9:00 p.m. EST. If you can’t attend tonight’s Webinar, I’m posting a replay on Thursday at 1:00 p.m. EST. Space is limited, so if would like to join us, claim your spot ASAP.

Hoping to stabilize free-falling home prices in foreclosure-plagued neighborhoods and stimulate sluggish housing markets, the White House has announced that for one year only, the Federal Housing Administration will suspend its anti-flipping policy which requires a 90-day waiting period for foreclosure sales. At the same time, it’s extending government-backed mortgage insurance to a larger group of foreclosure buyers.

Rehab this Foreclosure Flip
Though a positive step towards resuscitating stagnant real estate markets, these homes still have to be sold to owner-occupants, and many flippers may find that this policy change is of little help to their businesses. To meet FHA guidelines requiring that homes be “safe, secure and sound,” many of these real estate owned (REO) homes likely will require more extensive rehabbing than they would probably receive if the FHA were not involved.

Homeowners who can’t afford their mortgage payments probably don’t keep up with maintenance. And there is an increasing prevalence of disgruntled and distressed homeowners vandalizing their homes when they’re forced out by foreclosure. Though real estate investors with a knack for rehabbing may see some benefits through this change, it seems unlikely that it’ll have the far-reaching impact on high-foreclosure real estate markets that the Fed is hoping for.

REI to the Rescue
What irks me is that this waiting period foolishness was implemented five years ago specifically to curtail opportunities for working real estate investors to make money in real estate by flipping houses for a living. Now that the economy is a wreck and the current selling season is not stopping the bleeding, who does the government call upon to get the markets moving again? Real estate investors, do you hear your phones ringing? Here is how the FHA rationalizes its flip flop on this issue:

” . . . FHA currently prohibits insuring a mortgage on a home owned by the seller for less than 90 days. This prohibition is intended to prevent property ‘flipping,’ a predatory practice that strips a home of its equity before being quickly resold at an inflated price to an unsuspecting buyer. FHA’s new policy will permit the immediate sale of foreclosed properties to legitimate borrowers wishing to use FHA-insured financing.”

Will the Real Equity Strippers Please Stand Up?
What exactly did the lenders accomplish with their business practices? The Mortgage Bankers Association’s (MBA’s) Q1 report highlights the sixth straight record-shattering quarter of home loans entering foreclosure. The MBA’s seasonally adjusted total delinquency rate is the highest recorded by the association since 1979: Nearly 3 million home loans, or 6.4 percent, are missing at least one payment, while approximately 737,000 are three months or more past due on their payments. These numbers all but promise that foreclosure rates will continue to rise.

According to the MBA, 1.1 million homes, or 2.5 percent of all loans serviced by the association’s members currently are in foreclosure. That’s up from the 2 percent of loans, or about 938,000 homes, that were in foreclosure at the end of 2007. The report also shows that 448,000 homes, or about 1 percent of loans members serviced, entered foreclosure during Q1. In Q4 2007, 382,000 homes reportedly entered foreclosure.

Foreclosure Epidemic Spreads Beyond Subprime Loans
These aren’t just the subprime adjustable rate mortgages (ARMs) we’ve heard so much about. Foreclosure among all loan types is on the rise. Here is a quick breakdown, according to Jay Brinkmann, MBA’s Vice President for Research and Economics:

• While subprime ARMs represent 6 percent of the loans outstanding, they represented 39 percent of the foreclosures started during Q1.
• Prime ARMs represent 15 percent of the loans outstanding, but 23 percent of the foreclosures started.
• Among the 516,000 foreclosures started during the Q1, subprime ARM loans made up 195,000 and prime ARM loans made for 117,000.
• The hike in prime ARM foreclosures exceeded subprime ARM foreclosures with increases of 29,000 and 20,000 respectively over the previous quarter.

Who Takes the Prize?
Though our industry will see some benefits from the FHA’s temporary suspension of the 90-day waiting period for foreclosure sales, is it really going to put a dent in markets where REO inventories are growing while prices hit the pavement? We may never know for sure because REO sales are rarely tracked.

In a recent press release, Brian Montgomery, assistant secretary for the FHA commissioner says, “A glut of foreclosed and abandoned homes harms neighborhoods, frustrates homebuyers and delays a community’s recovery. The action we take today will allow homebuyers to purchase these homes in much greater numbers and ease the excess supply of unsold homes in neighborhoods across the country.”

Too Little, too Late?
So while Federal officials have finally noticed that the effects of the foreclosure epidemic aren’t limited to Wall Street — and the buyers — who really should have known better, some loaded questions remain on the table:

• How far is this temporary FHA policy shift really going to go to get troubled real estate markets moving?
• Will the capital FHA offers buyers raise the bottom for declining markets?
• Will this policy have any impact in getting REO lenders to speed up their response times?
• If the fed needs real estate investors to come in and clean up after the lenders and help them move their REO, equity-free, dead weight, are we still engaging in a “predatory practice” ?

How will this temporary change in FHA policy make a difference in the way you invest in real estate? Please drop me a line and let me know what you think. Also, if you’re interested in learning more about the REI news and developments that affect your business, don’t forget to sign up for my “What’s Working & What’s New” monthly report on GaryBoomershine.com.

Remember the TV show “Get Smart!“about the bumbling spy who always got his man (and sometimes his woman) from the 1960s? There’s a remake slated for summer release as I type this. I read a great article in Wired magazine recently about what the CIA learned from the TV show. I was stunned to learn that the U.S. government drew inspiration from the show to create their own “cones of silence.”

After reading this article, I realized that I drew inspiration, at a very young age, from Smart’s reliance on Agent 13 (the spy who always seemed to be staked out in a U.S. Mail box) for stellar job performance. This may be what got me started in the business of targeted real estate marketing via direct U.S. mail with SalesTeamLive.

Soon, I started thinking about what real estate investors could learn from Maxwell Smart and what some of my friends might say if I asked them.

I imagine that:

• Sales Masters Richard Roop and Dan Doran might tout the spy’s expert negotiations skills and convince the evil enemy Kaos to lighten up, change sides and make a fortune doing it.
• Virtual Wholesaling Pro Cris Chico might say that he, like Maxwell Smart found his niche and is sticking to it.
• Total Market Master Ken Wade likely would likely give Smart kudos for always doing his research and never underestimating the cyclical nature of his enemies.
• I suspect that EasyHUD’s Chris Daigle could singlehandedly conquer the entire Kaos network using his Twitter-enabled shoe phone.
• Teamwork Lead System’s Andy Proper learned to take out a Craigslist ad for assasin bird dogs to handle his super spy assignments, then head for his pristine Hawaiian beach hide-out until the mission is complete.

Action-Packed Feature Stories This Week
What do you think? Or more importantly, what have you learned from Agent 86 that’s helped you to build your real estate business? For more details about what some of my friends have learned from Maxwell Smart, visit my Resources page. Look action-packed new features on Dan Doran, Richard Roop and more in store for you coming soon!

Please Join Us Now for“What’s Working and What’s New”
If you haven’t yet signed up for my “What’s Working and What’s New” free monthly REI report, please sign up ASAP to receive the latest issue this week. It’s easy and we promise to keep your data confidential, Just use the yellow field on the sight side of this page or on my GaryBoomershine.com home page. I think you’ll love the story on how the major lenders are streamlining the short sale process for stealth real estate investors. And as always, I promise to never share your info with anyone. Ever!

A unit of Countrywide Financial Corp. has filed a foreclosure action against Ed McMahon, an ailing 85 year-old TV personality who has been trying to sell his expansive Beverly Hills home for the past two years.

In his heyday, McMahon, was the consummate late night TV sidekick who spent much of his career by original Tonight Show host Johnny Carson’s side. McMahon also hosted the Star Search variety show which foreshadowed American Idol’s incendiary popularity. Still, many remember him for putting Publishers Clearing House (PCH) on the map with his charismatic TV commercials where the Prize Patrol ambushes unsuspecting families with drive-by sweepstakes fortunes.

The Wall Street Journal reports that ReconTrust, an arm of Countrywide Financial, filed a default notice on a $4.8 million Countrywide loan backed by Mr. McMahon’s home in late February. Official documents show that, at the time of the foreclosure filing, McMahon had racked up $644,000 in overdue payments on that loan.

Public records also show that in February, McMahon had a separate home-equity debt with Countrywide of up to $300,000 tied to the same property. It has not yet been revealed whether Countrywide still owns McMahon’s home loan, or is pursuing the debt for real estate investors who may have acquired it.

McMahon first listed his expansive Beverly Hills estate in 2006 for $7.7 million. After a few price drops in the interim, the property currently is listed with Christie’s Great Estates for $5.75 million.

Since breaking his neck in a bad fall on his possibly cursed property last year, McMahon has suffered through a lengthy recovery and has been unable to work. A spokesman for the healing celebrity says McMahon has been in fruitful negotiations with the lender and is optimistic that he’ll be able to work out a deal to avoid foreclosure.