The Creating Wealth Show Blogcast

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CW Blogcast 79 -What’s the Home Buying “Freedom Threshold”? Jun 30, 2015

While everyone’s attention has been focused on the Millennials and their housing choices, it turns out that it may be those famous Baby Boomers who wield more influence in today’s housing market.

According to new article from the Bryan Ellis Investing Letter, research from Merrill Lynch reveals that the “magic age” for housing choices is not those post college years, but one much farther away: age 61. That’s the age when, according to Merrill lynch analysts, people really feel free to choose where they want to live. This “Freedom Threshold” comes at a time when people are able to let personal preferences and not job or family responsibilities dictate where and how they live.

That “golden age” defined by Merrill Lynch falls on the threshold of the traditional American retirement age, typically either 62 or 65. At that point, homeowners are looking ahead to a retirement that’s potentially another quarter century or more long, and they want it to be on their own terms.

The freedom to choose exactly where you want to live isn’t easily accomplished at other ages. Factors like jobs, family obligations and money drive those kinds of decisions at younger ages. For the Millennials born between the 1980s and 2000 or so, choices about housing are driven partly by choice – as a group, they tend to fear being trapped by owning a home when other parts of their lives are subject to great change. But those choices are also limited by economic necessity, such as having to relocate for work, facing limited job opportunities or struggling with student debt.

Fast forward a few years, and somewhat older individuals are making housing choices based on jobs and family. Buying a house and staying in it may not be a matter of personal preference, but of factors like proximity to well paying work, schools or other amenities. Once the nest is empty, these homeowners may feel free to make other choices, but with growing families and career demands those choices end up being postponed.

That, say the researchers at Merrill Lynch, brings us to that magic age of choice, 61. But what people do with the freedom that lies ahead is as varied as the individuals themselves. Some might opt to downsize, selling off a large family home once children are grown and gone in favor of a smaller place. Others might choose the opposite route, upsizing from a small house to a larger one that can accommodate visits from family and friends.

And still others opt out of the homeowner role entirely, choosing to rent a place that offers amenities and takes care of repairs and lawn maintenance. Moving into a mobile home, or hitting the road in an RV or living abroad for a part of the year also appeal to some.

Whatever housing choices these new retirees and near retirees make, they mean movement in the housing market – more movement than in other age groups. And since the Baby Boom generation is second only to the Millennals in size, that “magic age” for housing choices has the potential to drive significant changes in the US housing market – and create new opportunities for investors in rental real estate.

People now nearing that Freedom Threshold aren’t looking for “retirement” or “active living” communities. Only seven percent of those surveyed by Merrill Lynch wanted that kind of living arrangement. They want to live in vibrant, diverse communities close to the amenities they want, such as shopping, dining and entertainment.

Though age related services are somewhat important, such as proximity to health care and the opportunity to stay at home rather than move into assisted living facilities, that’s not as much of a priority for this age group as you might expect. They’re active, engaged and eager to enjoy life.

That’s a trend worth watching for income property investors. The choices made by those who now have the freedom to design their home life will affect the number and kind of homes available to buy as well as their prices. Those choices also open opportunities for investors who want to attract tenants of that age group to their rental properties.

While all eyes are on the Millennials, once again, the Baby Boomers are stealing the show. And investors willing to keep an eye on the changes they bring to the market can find new ways to build wealth through real estate, as Jason Hartman advises.

CW Blogcast 78 - Solving Real Estate’s “Millennials” Problem Jun 23, 2015

The Millennials have taken a lot of heat lately, criticized for poor work ethics, overdependence on technology and general lack of interest in notching up the traditional milestones of “adult” life. Now, as home sales continue to drop, market watchers are looking once again to the attitudes and behaviors of Millennials for explanations.

Millennials - those born between about 190 and 2000 – do account for 76 percent of first time homebuyers. But since as a group they’re postponing home buying and other major life decisions, their numbers aren’t doing much to change the overall slump in first time home purchases.

But according to new statistics reported by Real Estate Consulting, these young people aren’t saying “no” to home purchases as much as “not now.” And their reasons for doing so reflect not the much publicized slacker mindset, but a cautious one inspired by their parents’ struggle with tough economic times.

That wariness to commit to a long-term financial obligation combined with a changing social climate contributes to some of the stereotypes about Millennials’ preference for renting and budgeting for different needs than home buying. And because Millennials now make up the largest demographic group in the United States, second only to the famous Baby Boomers, investors in rental real estate may want to take a closer look at their reasons for doing so.

As just about everyone knows, one pressing problem for Millenials is the much publicized student loan debt. That burden, along with Millennials’ equally well-publicized struggles in the traditional workplace, creates the stereotype of the young college graduate forced to live at home with Mom and Dad while working at a low wage job.

But as Real Estate Consulting reports, that’s not the whole picture. In a culture where life spans are longer than ever and 60 is the new 40, Millennials are postponing all those so-called adult decisions to later points in their lives. They’re marrying later, and having children later too – if they have them at all. Jobs may take them to different places, so settling down can wait a while.

Behind some of those decisions is a very real fear of an uncertain future. Many in this generation have seen their parents and grandparents struggle through the last recession, with lost jobs, low wages, and an economic crash triggered by – what else? – the collapse of the housing market.

So it may not be too surprising that many Millennials see a house not as an investment or a step toward a more secure future, but as a millstone. Buy a home? What if you find a job in another city? What if a future spouse doesn’t like living there? What if you lose your job and can’t find another one to pay the mortgage? And what if you want to travel?

If fear is a factor driving the Millennial aversion to home buying, another, and potentially more important, one is simply shifting priorities. The world in which this generation came of age is simply a different one than that of their parents – not just financially, but culturally.

Not all Millennials are cash strapped and debt-burdened. They may have the ability to save for a down payment or manage a mortgage, but they’re choosing to put it toward other things such as technology and entertainment services. And they’re questioning the value of house payments when the same amount will cover a rental with amenities like pools, gyms and good location.

A good location too, means easy access to restaurants, shopping and work. Millennials as a group buy fewer cars than previous generations, partly because of debt, but also out of choice, so living close to those amenities is a major factor in choosing a place to live.

All these sometimes contradictory characteristics paint a picture of a generation that sees the world through a different lens than their parents do: cautiously optimistic, but also keenly aware that things can crash at any time. They may not reject the traditional model of adulthood outright, but they’re certainly taking it with a grain of salt.

That’s why Millennials can have such an impact on the world of real estate in general and home sales in particular. And for investors, understanding that impact and the reasons behind it can open doors for new opportunities to build wealth in rental real estate – as Jason Hartman advises.

CW Blogcast 77 - Where Are The First Time Home Buyers? Jun 16, 2015

The recovery from the much publicized housing crash of a few years ago may be hitting a wall, thanks to declining numbers of a group that’s essential to a robust housing market: first time home buyers.

Although the US housing market continues to show encouraging signs of emerging from the rubble of the 2008 collapse, its long term recovery depends on those first time buyers, who inject new life into the market not just by purchasing new and resale homes, but also by spending money after the purchase on a variety of consumer goods and services. Otherwise, the home buying and selling cycle becomes a closed loop that depends on existing homeowners making the move to sell their houses – and that’s slowing down too.

Overall, the number of US homeowners is at its lowest level in over two decades. And according to new figures reported by Business Insider, the number of first time buyers stands at just 29 percent, down from 40 percent in 1980. Although real estate professionals and market watchers cite a number of factors keeping people from buying their first home, the main reasons are both simple and hard to address: availability and affordability.

One sigh of a recovering housing market is the demand for homes to purchase, and in many areas of the country, demand is outstripping the inventory of available homes for purchase. That’s one reason for the steady rise in home prices – another sign of recovery.

But the scarcity of homes for purchase, along with those rising prices, mean that first time buyers can’t find homes that they can afford. The shortfall in available housing has its roots in the wave of foreclosures that followed the housing crash, which pushed millions of homeowners into foreclosure.

As those foreclosure proceedings crawled through the courts and financial institutions, the properties involved stayed off the market. The “foreclosure pipeline” cleared in fits and starts over the next few years, with some periods of higher inventory followed by shortfall.

The problem was complicated by the efforts of mortgage servicers and brokers holding title to those foreclosed properties. After the crash, institutions including government mortgage giant Fannie Mae and major banks auctioned off their foreclosure holdings quickly in batches to large domestic and foreign investment companies, which used them as rentals.

Those sales kept thousands of homes out of the hands of residential buyers as well as individual investors. What’s more, increasing numbers of existing homeowners, who might in past years have followed the typical pattern of buying a starter home and moving up to a bigger house as careers and finances matured, are opting to stay put.

These homeowners are choosing not to sell for a variety of reasons. Rising home prices may mean that a seller could lose money on a sale, thanks to changes in capital gains taxes and trends in home values. And current low interest rates make refinancing and holding onto an existing home a more attractive option than buying another one.

For those reasons, there’s a short supply of the lower priced starter homes most first time buyers can afford in the areas where they want to live.

Most first time buyers are younger, with a median age of around 30. They’re largely members of that cash strapped millennial generation that’s burdened with student debt and unsure about their employment future. They’re reluctant to take on the commitment of a mortgage and a permanent residence – and they’re putting off life steps like marriage and family.

For many, there are other hurdles too. Even though mortgage lending standards have loosened to encourage more first time buying, for those with heavy debt and uncertain finances, qualifying for a loan may be hard. And even if it’s possible to qualify, making that down payment requires resources they simply don’t have.

Another factor is location. Lower cost housing tends to be in less desirable areas, far from the city centers where work and social life take place – and potential home buyers may not want to take on long, expensive commutes in order to own a home.

The obstacles facing first time homebuyers aren’t limited to residential buyers. They also affect solo investors hoping to get started in income property investing. Equalizing access to housing and opening up more home for purchase may be a long term effort, but for now, the shortage of available homes to buy may keep the rental markets humming – and that’s good news for investors willing to diversify their holdings in multiple markets, the way Jason Hartman advises.

CW Blogcast 76 - What’s Behind the Housing Shortage? Jun 09, 2015

By a number of indicators, the US housing market is bouncing back after its massive collapse of 2008. But US homeowner rates are at near historic lows, with few first time buyers. Among the many factors contributing to those low rates are an often overlooked, but essential one: in many areas around the country, there’s a housing shortage: the supply of avaialble homes to buy is lower than the demand.

After the housing collapse put unprecedented numbers of homes into foreclosure and millions of homeowners into crisis, home prices have begun to rise, new regulations on the mortgage industry have reined in the reckless lending practices that contributed to the collapse and the recession that followed.

In the years that followed the collapse, the inventory of available houses for purchase ebbed and flowed, as foreclosures crawled through the legal system. And when they did, banks and other financial institutions often auctioned them off in batches to large domestic and foreign investment firms, without offering access to individual buyers and investors.

In some areas, too, the number of available homes to buy was affected by the “zombie: phenomenon: homes left abandoned by homeowners in trouble, but which hadn’t been formally foreclosed. Add to that a slow recovery for new home starts, and it’s easy to see how a chronic shortage of homes could shadow the nation’s recovery.

But there’s another, often overlooked reason for low inventories in many markets around the country: people who own homes now aren’t selling them – and that’s creating a bottleneck that cuts off first time buyers and high end sellers alike.

One aspect of the American dream of owning a home is the ”starter house.” In the traditional paradigm, young people save up enough to buy a modest first home – the starter where they’d begin raising children and creating a solid career.

Then, when things were looking up financially, they’d move up to a bigger, more lavish house. That pattern might repeat a time or two before retirement, when they’d once again begin contemplating either moving up again or downsizing into a more manageable empty nest.

But current economic conditions mean that that choice is less likely for many Americans. And, as a new article from Inman points out, understanding the dynamics behind the slowdown in selling is key to formulating predictions for the future of the housing supply and trends in home prices.

The rise in prices have an indirect effect of chilling home sales, One reason has to do with US capital gains tax laws, which underwent a major change in May 1997. Before then, if a homeowner sold a house for a profit, that profit was automatically subject to a whopping capital gains tax penalty. The only way to avoid the capital gains tax was to put the sale money into a property if equal or higher value within two years.

In 1997, though, that all changed, thanks to the Taxpayer Relief Act, which allowed for a one time tax exemption of up to $125,000 in capital gains. That meant that homeowners could sidestep the tax if they bought another house. But as prices rose, fewer could opt to move up to a pricier dwelling because their gains on their existing property would exceed the tax cap and therefore end up costing them money.

Low interest rates also play a role in keeping homeowners from selling. If owners have refinanced a home thanks to those historic low rates it’s less likely they’ll be willing to put the property up for sale and risk facing higher rates on a new purchase. Those values are still not at peak, so as they continue to climb, those homeowners won’t be interested in selling. /

What’s more, according to Inman, changing property valuations since the crash sent those values plummeting could play a role in keeping houses off the market. Homeowners may be holding on to their properties as they wait for home prices in their area to go up.

CW Blogcast 75 - Investing: 4 Trends For the Future Jun 04, 2015

Fifteen years can seem like a pretty long time – and the year 2030 sounds like a date from a science fiction novel. But the future is now – and, as a recent article from Business Insider reports, today’s emerging trends will shape the investing landscape of tomorrow.

According to Business Insider, KPMG, the international tax and financial advisory consortium, recently released a report detailing likely changes in the financial and investing fields over the next fifteen years, and their potential impact on the world of investing in all its forms. While many of KPMG’s predictions are directed to investment firms and financial advisers, investors in income property can find new opportunities by following the future too.

The research conducted by KMPG finds four factors that shape megatrends in investing – and in just about every industry: changes in demographics, technology, social behavior and the availability of resources. Those “big picture” shifts affect a variety of smaller changes that lay the groundwork for a very different investing landscape.

The seeds of those megatrends have already been planted. Trends shaping the investing world of today are only expected to accelerate heading into the next decade and beyond. Among them: changing dynamics in the provider-consumer relationship, increased use of mobile technology and social media, and psycho-technological innovations like virtual reality applications and gamification.

We’ve already seen how the Internet and social media have changed the way people buy real estate. It’s possible to find properties online and do the entire buying process without the need for any kind of real estate professional. Buyers and renters can search for properties anywhere, anytime, and innovations in virtual reality technology allow them to take customized virtual tours and even “try on” various décor and remodeling options.

The use of social media and online contacts also points to a shift in attitudes about doing business. In a world where fraud and scams are easier than ever, trust and authenticity are essential – and businesses and individuals who cultivate credibility and honesty stand out.

It’s also a world of increasing audience engagement, as buyers and sellers become more independent and willing to educate themselves rather than depending on advisers and other professionals to make their decisions for them. In fact, by 2030, some financial professions may all but disappear, their place taken by independent consumers with the tools to do the job themselves.

The investing world of the future is also likely to be far more mobile and global than ever, as technology puts people in touch from around the globe and transactions can be conducted with the click of a mouse or the keys of a smartphone.

The investing world of a few years from now will also be affected by changes in available resources. Current climate events like the ongoing severe drought in California will push development and real estate prices in new directions, and the current shortage of available homes for purchase could create major changes in who buys homes, and where.

The availability (or lack thereof) of energy sources also plays a role. The recent drop in oil production hit some oil dependent cities hard, and other changes in the supply of energy and other resources, combined with other economic and social factors, could mean major changes in real estate and other kinds of investments.

Changing demographics, along with changes in societal values, may also mean big shifts in how people buy, save and allot their resources. In fifteen years, today’s “millennials” will be approaching midlife – and they’re now the largest demographic group in the US. Their choices – and those of other generations too – are shaped by changing values about consumerism, the environment and other issues.

For investors, the world of 2030 may look a lot like the one of 2015, only much more so. It’s a future that belongs to those who are willing to take charge of their investments, stay flexible, and keep on learning – Jason Hartman’s keys for investing success for today and for tomorrow.

CW Blogcast 74 - Inflation: An Investor’s Friend? Jun 04, 2015

The specter of inflation strikes chills into the hearths of many consumers – even more than its cousin, deflation. But not all inflation is created equal – and for both the economy at large and for income property investors, some inflation can be a very good thing indeed.

Consumers fear inflation because to them it means higher prices for the goods they buy every day. In oth4er words, the dollar doesn’t go as far as it once did. And most people don’t give much thought to inflation’s opposite number, deflation, which economists and financial experts consider far worse.

Inflation is measured a number of different ways. The Consumer Price Index tracks how much it costs in a given period to buy a specific amount of tangible goods. Those figures are expressed in two different kinds of inflation – headline and core.

Headline inflation is the kind most of us worry about – the rate of inflation in prices for all kinds of goods, both those with relatively fixed prices such as clothing and “volatile” goods like energy and food, whose prices can change considerably due to a variety of shifting factors.

Core inflation, on the other hand, measures the costs of stable goods only. It doesn’t take into account the prices of those volatile goods, and some economists consider it a more accurate representation of actual inflation. Others argue that since core inflation numbers exclude food and fuel, those stats give a skewed impression of that actual inflation that hits American consumers and drives monetary policy.

There are other models for tracking inflation, too, and some financial experts are calling for more investment into using them. But these models only chart how much inflation is affecting consumer buying power and business prosperity. They don’t reveal the effects of inflation on individuals and the economy – or what to do about it.

Inflation has a variety of causes. According to a recent Business Insider article on the history of inflation for over a century, the US economy underwent cycles of severe inflation after the two World Wars, and has gone through a number of milder cycles of inflation and deflation since then. Severe deflation led to the Great Depression of the thirties and is associated with other tough economic times over the years.

That’s why the Federal Reserve has decided that a little inflation is better for the economy than none at all. And though it may seem like callous disregard for the every day consumer, the Fed aims to keep the economy in a slight state of inflation – ideally, around two percent a year.

That rate, as the Fed sees it, is just enough to keep prices and wages relatively high and prevent a slide into deflation and ultimately recession as prices fall and so do wages in the dreaded deflationary spiral. To do this, the Fed sets federal fund rates, the rates for bank-to-bank lending. While that doesn’t impact consumers directly, its effects trickle down in the form of rates for long-term loans – such as mortgages.

If some inflation benefits the economy as whole, it can also be a boon for investors in income property, since real estate can be a hedge against inflation. Rising prices can increase the real value of property over time, and that means higher resale values.

A positive inflation model assumes higher wages along with higher prices, so investors in rental real estate can charge higher rents. But the most significant benefit of inflation for investors is the lower “cost” of a mortgage.

If you purchase an investment property with a long term fixed rate mortgage, as Jason Hartman recommends, your mortgage payment will stay the same, but it takes less of a bite over time. Higher prices and higher rents make it easier for those rents to cover mortgage payments, and the real value of the debt goes down. That’s another reason to leverage the power of a mortgage for building wealth in rental real estate.

However it’s measured, inflation is a part of the financial landscape. But for income property investors and the economy as a whole, a little inflation may not be a dangerous thing.

CW Blogcast 73 - New Technology Promises Big Changes for Real Estate May 14, 2015

No more real estate agents? In the brave new world of real estate, agents, brokers and just about every other part of the traditional way of buying and selling property could be going the way of the dinosaur, thanks to innovations in virtual reality and artificial intelligence technologies.

Online access and social media have already brought big changes to the world of real estate. Most real estate agents and other professionals involved in real estate transactions do business online, and Internet listings bring buyers and sellers together from all over the world. Online listings can also feature photo galleries and virtual tours offering video walk throughs of properties up for sale.

Add to that the reach of social media. Buyers and sellers can connect on Facebook, get real time updates from their agents vie Twitter, and mobile devices let all parties stay connected all the time.

Those tools have already marginalized whole groups of real estate professionals, as buyers and sellers are more and more able to conduct business themselves. But as a recent Forbes article notes, the next generation of these technologies have the power to affect how the world does business in many ways. And the widespread application of VR and related technologies on the real estate market could end up not just marginalizing, but also virtually eliminating, these “middlemen (and women)” altogether.

The notion of the virtual home tour isn’t particularly new. A number of companies have been offering that kind of experience for some time, using video to capture detailed views of property up for sale. Prospective buyers can then contact sellers or their agents to go further.

But the next generation of virtual reality technology takes that concept to new heights. Thanks to new applications developed by Sony, Microsoft and a number of other heavy hitters in digital innovation, it’s now possible to virtually be present in a particular place – even if you’re hundreds of miles away.

New imaging technology also makes it possible to "try on” new hairstyles, glasses and even faces prior to plastic surgery. And within the next few years, applying that kind of technology to real estate could produce the ultimate in virtual home touring.

Applying VR technology to the world of real estate has the potential for bringing buyers and sellers together in ways that essentially eliminate the need for a third party such as a real estate agent or a broker. As they can now, prospective buyers would be able to browse home listings anytime, from their own homes – but thanks to sophisticated VR applications, they’d be able to ”visit" the property and see any parts of it that interests them, rather than view a pre-recorded video tour.

What’s more, the new generation of VR tech would allow them to customize their experience. Just as it’s now possible to upload a photo of yourself and preview new glasses and new noses, prospective homebuyers could upload images of their furniture or wall hangings to virtually try them out in the home under consideration.

They’d also be able to virtually paint the house, preview landscaping options and add features like a pool. With unlimited time and options to choose, potential buyers would learn more about the house and its potential than a physical tour with an agent could ever offer.

Many of those options are made possible by advances in artificial intelligence. AI technology gives us “smart” devices and apps of many kinds, from options to remember our passwords to simple recommendation technology that offers new choices based on a user’s previous purchases or selections.

Applied to virtual reality driven online real estate listings, the platform could offer browsers more listings based on their previous searches and customize them with a user’s preferred features. If someone’s ready to buy, the interface could allow users to place a bid, contact a seller, and conduct most pieces of the transaction without ever leaving the site.

With some aspects of the new tech already in place for other applications, the new world of real estate could arrive within the next couple of years. It may be premature to count out agents, brokers and mortgage managers completely. But the new world of virtual reality and AI technology has the potential to put control over the transaction in the hands of buyers and sellers and eliminate dependence on “experts” who may be incompetent or downright criminal. And that, as Jason Hartman says, is the cornerstone of smart investing.

CW Blogcast 72 - Renters Will Be Renters – Not Home Owners? May 07, 2015

Time was, renting an apartment – or maybe a house – was just a temporary arrangement until you saved up enough to buy your very own home. But for a growing number of today’s renters, that scenario just doesn’t appeal – and that trend has big implications for investors in rental real estate.

According to recent statistics reported by Business Insider, at the end of 2014, only 14.7 percent of tenants moving out of an apartment did so because they were buying a home. And in the years since the housing collapse of 2008, the percentage of renters moving out to buy a home of their own has stayed under 17 percent.

Those figures come at a time when the US homeownership rate overall is at its lowest point in over two decades – just 64 percent. And of those homeowners, only 29 percent are first time buyers – a group essential to the continued recovery of the housing market.

In the years since the housing crash, rental markets have surged even as home buying rates fall. To explain why, real estate professionals look once again to the millennials, those young people born between the mid 1980s to around 2000.

The average age of the first time homebuyer is around 30. In the traditional model of American adulthood, that would be the age at which a n individual has finished school, settled into a steady job, and is getting ready to marry and start a family. But in today’s volatile economy, that model just isn’t working for many new and recent college graduates.

Faced with student debt and an uncertain employment picture, many of these thirtysomethings fear being tied to the long-term commitment of a house. For many, job security is an issue. A recent college graduate may have to move across the country to start a career – or halfway around the world.

For others, debt and low income make getting a loan more difficult. Even though lending standards have loosened in an effort to encourage more new buyers, affording a down payment and convincing a bank that you’re mortgage material can be difficult.

But that’s assuming of course that there’s a house to be bought. The inventory of available houses for purchase remains low in many markets around the country, and that shortage is especially acute for “starter” homes that first time buyers can afford in areas they want to live in.

Established homeowners aren’t selling those homes and moving up to more lavish residences. Many are watching home prices rise in hopes of selling at the house’s peak value; others are enjoying good refinancing deals at low interest rates and don’t want to risk a capital gains penalty for selling.

For all those reasons and others besides, today’s renters just aren’t moving out of rental housing to a house they’ve bought. As Business Insider reports, a recent survey of reasons renters moved out of apartments found that the percentage of renters surveyed who did that peaked in 2004 – well before the housing crash of 2008.

Today, the numbers of renters leaving to buy a home continues to fall – lagging behind other reasons such as rent increases, job changes, and even evictions as reasons for leaving their current housing.

Most renters in the survey opted simply to move to another rental residence of some kind, either in the same or a different city. And those numbers don’t appear likely to change any time soon – a trend that worries real estate market watchers who fear that the continued slowdown in homeownership, especially among those prized first time buyers, could stall the housing recovery and by extension the economy as a whole.

But the low homeownership numbers and the reasons behind them continue to feed a flourishing rental market, where rents continue to rise and even rental housing in desirable areas becomes scarce. And even though some renters opted to move just because rents were rising too high in their current rental, they chose another rental, not a house carrying a mortgage payment that might be lower than rent.

In spite of the best efforts of the mortgage and housing industries to change them, the twin trends of low interest in home buying and the limited availability of homes to buy mean that renters will be renters – and for investors taking Jason Hartman’s advice on building wealth in real estate, that means a rich pool of tenants for the long term.

CW Blogcast 71 - Millennials Are Making Money In Real Estate Apr 30, 2015

The “Millennials” have been in the headlines a lot lately – and not for good reasons. Alternately criticized for their values and work ethic and pitied for their crushing load of student loan debt, this generation of new and recent college grads seems to be facing a bleak financial future. But a young real estate investor is proving that smart money management can pay off handsomely – even for those cash strapped millennials.

A recent article from NextShark profiles 27-year-old Brian Maida, who bought his first house two years after graduating from college. Now, with two properties under his belt, he's anticipating a comfortable retirement from his investments. His journey from income challenged new graduate to investor/entrepreneur demonstrates that you’re never too young to start investing.

Millennials – those born between about 1985 and 2005 – now make up the largest demographic group in the United States, eclipsing even their famous predecessors the Baby Boomers. By most accounts, they’re a generation in trouble, too.

New college graduates now leave school with an average of $10,000 in student loan debt. They struggle in a tight job market to find work in their fields, and many end up wither spending their entire working life paying off those debts or defaulting completely.

In the workplace, too, millennials struggle with a culture that’s often at odds with their values and lifestyles. Employers used to dealing with a more traditional kind of worker who understands and respects the formalities of the 9 to 5 world claim that their millennial-age employees don’t seem to get it. They see no reason for restrictive work hours and dress codes, and they prefer communicating electronically than in person.

It’s perhaps no wonder that the mainstream work and social culture despairs of the millennials. And many of them despair too, stuck living with family and friends to make ends meet and delaying traditional milestones like marriage, children and home purchases.

But that doesn’t have to be the case. Students are finding alternatives to taking out massive student loan debt to finance their education, such as using alternative avenues to get college coursework out of the way before enrolling, and taking advantage of free programs and scholarships instead of loans.

They’re turning to entrepreneurship rather than traditional employment, too, seeking funding from crowdsourcing, creating online companies that require little by way of physical resources, and attracting investors eager to back an innovative idea.

They’re also investing – and that’s what makes Brian Maida’s story an example of turning some of the stereotypical downsides of millennial life into a lucrative upside – and a model for others to follow.

As NextShark reports, the New Jersey native opted to live at home after graduating from college, like many of his peers. While that’s seen as an indication that the person in question simply can’t make it on their own, Maida put his time to good use, saving up enough to buy his first house. Then he leveraged that investment to buy his second property a few years later – and now, a few years shy of 30, he’s looking toward buying a third.

The takeaway for cash strapped millennials (and anyone hoping to build long term wealth from investing)? Trim expenses wherever possible, maintain a sensible budget and keep your credit clean. Careful saving can result in a down payment in a relatively short time – and once that first property is yours, its earning power can be leveraged for a mortgage to buy the next.

For new graduates who are struggling with college loan debt, the picture may be a little trickier, but not impossible. Loan defaults and late payments create a blight on credit scores, so it’s important to work with lenders and investigate restructuring and loan forgiveness options.

Millennials may be getting more than their share of bad press. But young investor Brian Maida shows that careful money management and a willingness to learn the ins and outs of the investing process can open doors for the start of a long-term career in rental real estate. And his strategies echo Jason Hartman’s essential advice to investors of any age: to get educated, stay in control of the process – and leverage the power of a mortgage’s “good debt” whenever possible.

CW Blogcast 70 - California’s Drought: Changing Real Estate? Apr 23, 2015

In the Gold Rush days, the slogan was “California or Bust!” But now, as the Golden State faces yet another year of its historic drought, “Leave California or Bust!” may become the new rallying cry for the people and enterprises facing a waterless future. And that, say real state experts, could change the US housing landscape forever.

The entire state of California is under drought conditions ranging from “abnormally dry” to “extraordinary drought,” which trumps even “extreme drought” in severity. The drought has been going on for so long that not even heavy rainfall has made a dent in the statewide shortfall.

If you live in greener climes, it may be tempting to dismiss the crisis as just California’s problem. It is partially self-inflicted: the state is home to over 1400 golf courses, which are draining aquifers faster than they can be replenished. The residents of Palm Springs alone use over 700 gallons of water per person per day. Fracking, Disneyland and the state’s love of water parks may be as much to blame as climate conditions.

But regardless of the causes, the effects of California’s drought ripple out into the rest of the country and the world. California is America’s little known agricultural breadbasket, responsible for providing over two-thirds of the country’s fruits and veggies, and nearly a hundred percent of its walnuts, pistachios and other nuts.

Those crops require a lot of water – nearly 5 gallons to bring a walnut to your table. Extended drought means fewer crops brought to market and at much higher prices, with shortages of staples like lettuce and tomatoes in some markets around the country.

In order to stay profitable, agriculture concerns and other businesses may have to seek out greener, wetter locations in order to stay profitable. Moving these businesses out of California and into less populated areas of the South and Midwest could lower costs and keep profits up for years to come.

And if major businesses and industries leave California, their workers will follow. Some real estate and environmental experts are predicting mass migrations out of California, not just by corporate entities but individuals too, driven by persistent shortages and skyrocketing water prices.

That, some fear, could trigger a real estate collapse in the Golden State that would affect housing prices and demand at all points of the spectrum, from low end inland communities to high priced luxury homes in places like the Bay area, Bel Air and Palm Springs.

Drought conditions driving people out of the state are likely to discourage new residents from moving in. Property values could plummet, even in the priciest markets. Some market watchers predict a massive wave of mortgage defaults and foreclosures similar to the situation that triggered the last big housing collapse back in 2008. California’s economy could crash, with repercussions not just for the state but also for the US economy as a whole, given the state’s high population and concentration of large corporations.

Crisis for some can mean opportunity for others. The Western states near California might not reap much benefit from a large-scale migration out of California, though. Those states - Arizona, New Mexico and Nevada in particular – have their own water problems to face, and they may face a fate similar to California’s in the not too distant future.

But California’s troubles could breathe new life into smaller markets in the South, East and Midwest as its businesses and residents shift eastward. As a recent article from The Natural News points out, California could lose up to two thirds of its population as its supply of sustainable water shrinks.

That could create both a housing crunch and a housing boom in other areas of the country, as limited supply meets increased demand. There’s already a shortage of available housing for purchase in some areas of the country, and prices are rising, making some real estate experts worry about the formation of another housing bubble that could collapse at some near future date.

The ‘California effect” could complicate that scenario as new migrants create more competition for available properties. But for investors who take Jason Hartman’s advice to diversify holdings in as many markets as possible, the coming demand could create new opportunities in the form of a bigger tenant pool and higher ROI on rental properties.

It’s too early to predict the actual outcomes of California’s stubborn drought. Still, savvy investors hoping to build wealth in real estate may find gold in the coming rush - away from those hills.

CW Blogcast 69 - The US Rental Market: Headed for a Slowdown? Mar 26, 2015

Is the red-hot rental market getting ready to cool down?

The US housing market continues to recover, fueled by promising numbers for employment and other consumer sectors. But major shifts in the housing landscape may be changing all that, as the balance tilts between renting and owning houses in 2015 and beyond.

The devastating crash of 2008 that left the housing sector in tatters and created conditions for dramatic changes in the way Americans choose and maintain places to live. When a combination of reckless lending and unprepared buyers led to large-scale mortgage defaults and foreclosures, the effects were felt throughout all aspects of the housing industry.

Among these effects: shortages of available houses to buy, tougher mortgage lending standards, and a boom in the rental market. Now, though, the consequences of all these things are tipping the balance in the housing market again – and that may mean changes in strategy for investors building a portfolio in rental income property.

Though the housing market began to recover in 2009 and beyond, home buying stayed relatively flat – but rental demand began to surge. A sluggish economy with an uncertain job outlook meant that homeownership was out of the question for many people. Not only that, in the aftermath of the housing crisis new lending standards imposed by the government made it more difficult to qualify for a mortgage.

What’s more, there were fewer houses available to buy. Construction of new dwellings ran behind demand, and exiting homes were either tied up in foreclosure proceedings or auctioned off in bulk to international investor consortiums. American home buying fell to its lowest levels in over two decades.

But for all these reasons and a few others the rental market was heating up. Those who couldn’t qualify for houses or who hose not to buy for reasons both personal and economic were seeking out rentals in markets across the country. And as demand increased so did rents.

But now, according to new data from the giant real-estate database Zillow and reports from other industry watchers, the rental market may be hitting its limits. In markets large and small, two trends may be responsible for the lowdown.

Rents have been steadily rising in the years after the crash, until in some markets they’re currently at or near record levels. That’s not just in high end high demand areas like Los Angeles and New York – it’s a trend in mid range and smaller markets too. And while local and state laws may put caps on the amount that landlords can raise rents in a given year, property owners can keep raising rents within those parameters.

In previous years, that might have been a self-defeating tactic for the landlord/entrepreneur who wanted to keep a property rented. Tenants could always choose to move rather than pay the increased rent.

But now, there’s a shortage of rental dwellings in many markets. The decline in homeownership and the increased demand for rental housing means that tenants are to an extent captive audiences, forced to pay whatever rent their landlord imposes because there’s no place to move.

That’s partly because of a surge in home buying by international investors with cash. In a move similar to the one that contributed to a shortage of homes for purchase after the housing crash, these groups are buying up single-family homes and complexes.

Though new stats reported by Zillow show that for many people, owning a home is half as expensive as renting, some renters who could buy a home are choosing not to – perhaps spooked by the specter of the housing collapse. Still others may be ready to take the plunge into home ownership – if they can meet down payment and credit requirements.

What does all this mean for investors working to build wealth in income property, as Jason Hartman recommends? The slowdown in home buying means more properties available for investors to purchase. And that means new opportunities to meet the continued demand for rental housing from a tenant pool that isn’t shrinking.

CW Blogcast 68 - Real Estate: The Only Private Investment? Mar 19, 2015

Time was, anybody who wanted a safe and anonymous hideaway for financial assets turned to offshore banking. Swiss bank accounts and offshore havens in places like the Cayman Islands allowed depositors both legal and not so legal a way to safeguard assets from risks of taxation or seizure by the home government. But as new and proposed laws threaten to eradicate that privacy, real estate investing remains the only really private way to safeguard assets abroad.

Offshore banking has always offered big benefits to foreign accountholders: privacy, security and access to other currencies and marketplaces. Until recently, account information was highly private.

But now, that privacy may be fast becoming a thing of the past. The Foreign Account tax Compliance Act, or FATCA, is a US law enacted in 2010 to require US citizens anywhere in the world to report any financial accounts held outside the US to the IRS. That’s reason enough for foreign account holder to worry – but FATCA goes much further.

In addition to requiring individuals to report all their accounts held in foreign banks, FATCA also requires foreign financial institutions to report information about accounts held by their US clients to the IRS as well.

The move makes it much harder for individuals to hide assets from taxation, and for businesses to use “shell corporations” to conceal revenue. Though the law has been widely criticized as an attack on financial privacy, between 2012 and 2014 FATCA was ratified by a long list of countries large and small, including the major players in offshore banking, Switzerland and the Cayman Islands.

FATCA has stirred controversy not just because of its potential attack on financial privacy, but also for what critics call “bullying” of other countries into compliance. What’s more, the law is seen as the next step toward a policy of stripping everyone of their right to financial privacy.

Those worries might not be so unfounded. The Organization for Economic Cooperation and Development (OECD) is an international economic coalition of 34 countries dedicated to supporting free markets and coordinating domestic and international policies affecting its member countries. In 2014, the OECD stepped into the arena with an even wider ranging version of FATCA: the Global Account Tax Compliance Act, which would ensure reciprocal sharing of tax and account information among all participating nations.

To date, representatives of 51 countries have signed off on GATCA, which affects citizens of any participating country with holdings in any other participating country, not just the US. And while worried citizens can still find places that haven’t signed off on either FATCA or GATCA for their money, that’s getting harder and harder to do.

The creators of both laws claim that they’re aimed at eliminating tax fraud and returning missing tax revenues to their rightful owner: the government. And, they say, individuals and corporations doing legitimate business abroad won’t be penalized. But whether an accountholder is using offshore financial institutions for purposes legal or illegal, the larger concern of loss of privacy remains.

As a recent article from International Man points out, these laws, along with recent disclosures about domestic spying and other government efforts to hack financial data, have essentially stripped everyone of privacy in their financial dealings, if those dealings involve money, stocks or other kinds of investment assets. But there’s one kind of asset that still offers the kind of privacy ad security formerly promised by Swiss bank accounts: real estate.

Foreign real estate remains the one kind of asset that allows investors to evade FATCA and the like. As Jason Hartman always advises, it’s a hard asset that appreciates over time – and ownership doesn’t have to be reported to tax authorities.

Income generated by the property does, however. And that’s a major consideration for investors hoping to generate wealth from their holdings. But used simply as an alternative to traditional bank accounts, ownership of foreign real estate by individuals is not reportable to the IRS. It also can’t be confiscated or frozen like a bank account.

Government efforts to breach the privacy of individual and business financial doings aren’t new, and they aren’t always legal either. But the increasing acceptance of the US-based FATCA and the OECD’s GATCA are making those efforts entirely legal on a global scale. For securing assets and holding onto privacy, foreign real estate may become the new offshore bank account

CW Blogcast 67 - For Successful Investing, Sweat the Small Stuff Mar 12, 2015

It’s often said that the devil is in the details. But for investors, attention to some things that may not seem so significant can make a big difference in long-term returns.

That’s the topic of a recent article and infographic from Visual Capitalist, which points out how very small tweaks to an investor’s mindset and strategies can yield more wealth. And it’s also what Jason Hartman has been saying all along: Invest early. Diversify your portfolio. Minimize risks. Keep expenses down.

Though these four simple keys apply to investors of all kinds, they’re especially relevant in the world of real estate, where it’s all too easy to fall into believing myths about investing or get swept away by enticing deals and promises of big money fast.

It’s commonly believed that investing is something done later in life, not an option for the young, or for those who don’t have a lot of resources ready to hand. But waiting to begin your investing career until you’re “old enough” or prepared enough can mean that you never begin investing at all. And since income property is an asset that increases wealth over time, investing early may be the bet way to lay a foundation for long-term wealth.

Investing early might mean setting your investing plan in motion at a young age by establishing good credit, setting aside money to cover investment related expenses and learning all you can about the process. Or it can mean taking that first step toward buying your initial investment property once you’re financially able to do so, rather than waiting for that next promotion at work, or the date of your retirement.

Diversifying your investment portfolio may not be a small thing, but putting the idea into your investing plan just might be. It may be tempting to put all your investing eggs into just one asset basket, but that can be risky if market conditions change.

It’s smarter to be open to buying properties in as many different markets as possible as a hedge against precisely that – being an “area agnostic” as Jason Hartman calls it: one who isn’t blindly attached to any one market but is open to promising investments wherever they might be.

Not only does a diverse portfolio offer a safety net in the event of a sudden crash, it also creates opportunities that wouldn’t necessarily be available in just one area: different tenant pools and economic conditions allow investors to rep profits in very different ways.

“Risk” doesn’t mean the same thing to everyone, and some investors are more risk accepting, or risk-averse, than others. There’s risk involved in every investment, of course. But investing success depends on avoiding needless risks and doing what you can to minimize the risks you do face.

Educating yourself is a basic way to do that – and it helps you stay in control of your investments. One needless risk many investors take is to leave their investing efforts to other people. While it’s important to get good advice from qualified people, the more you know, the better you’re able to evaluate that advice – and decide if those offering it are competent and honest.

Keeping the dollar signs out of your eyes is another way to minimize risk. Get rich quick promises and deals you must jump on immediately may be enticing but they carry great risks. Evaluating your tolerance for risk is something every investor should do – and so is resolving to avoid needless risks.

Keeping your expenses down is also key to investing success. Leveraging the power of debt is one way to do that. Using up all your savings to buy an “investment” property can end up being costly. Buying your investment properties with a fixed rate mortgage that’s covered by monthly rent payments reduces your risk and makes your own savings available for other uses.

Paying attention to other ways to cut expenses can also help boost your investing returns. Managing investments directly rather than paying management companies or property managers can keep money in your pocket – and so can getting multiple estimates for repair and maintenance work. Being mindful of ways to cut expenses is a small action that can boost investing returns.

Successful investors build wealth by taking both a long and a short view of the process. Some things may be out of your control – but the little things that make a difference are ones that any investor can do.

CW Blogcast 66 - Failed Policies Keep Renters Renting Mar 07, 2015

It’s practically a given in American society that owning a home is the key to stability and success. But although the US government has spent more than two decades drafting a variety of policies to create that “homeownership society,” the percentage of homeowners has hardly changed at all. And that’s good news for income property investors ready to reap the benefits of the shift to a “renter society.”

As a new article from The Washington Post points out, home ownership in the US has always represented more than just a possession. Staking out your own little plot of land was a key piece of the country’s frontier heritage. It represented steadiness and a commitment to the future. And those attitudes about homeownership morphed into the “American dream” of job, family and a secure future.

The “dream” was so important that in the years just after the Second World War, government loans and other kinds of subsidies made it possible for returning soldiers to buy homes and start the families that became the famous Baby Boomers. And in the years since then, the US has clung to that belief, creating policies to boost homeownership that not only haven’t worked, but also actually contributed directly to the crash that destroyed the housing market.

Recent statistics reveal that at the end of 2014, only 63.9 percent of Americans owned their own home. That’s the same rate charted in 1994. And as the Washington Post reports, those rates have gone up just one percentage point in 50 years, as shown by US census data.

Though homeownership has always held a special place in the American psyche, the years between 1995 and 2005 marked a particularly aggressive effort on the part of the US government to boost home buying and promote a homeownership society that would, in theory, promote economic stability and prosperity. More homeowners, it was believed, would improve lighted neighborhoods and bring stability to minority families.

Democrat Bill Clinton set a specific goal of raising the homeownership rate to 67.5 percent in 1995, and his successor George W. Bush went even further, aiming to create over 5 million new minority homeowners by 2010.

Those goals were boosted by aggressive federal policies that offered low lending rates, homeownership support programs and other kinds of subsidies designed to help those who in past years might never have qualified to buy a home. And it worked p for a while. By 2005, homeownership rates had jumped to 69 .1 percent.

Then came the crash. A combination of factors including aggressive homeownership policies, reckless lending and a troubled economy set many of these new homeowners up for failure. Unable to pay suddenly ballooning mortgage payments and keep up with fees, “marginal” homeowners fell into default and foreclosure by the millions – victims, in some ways, of the very policies aimed at helping them buy homes in the first place. Many of these former homeowners, their credit ratings tarnished by mortgage defaults, can’t expect to buy another home.

The aftermath of the push to get as many people as possible in their own homes has left fewer people in them than before. Although some of the stringent lending standards put in place after the crash have relaxed, people aren’t buying – and that means that the US may be shifting from a “homeownership society” to a renter’s culture.

That suggests a change in American attitudes toward renting, which in a society in love with homeownership has always carried a bit of a stigma. Renting is often seen as temporary, transitory and unstable – something you did on the way to buying your very own home.

But economic reality and shifting attitudes suggest that may be changing. As more and more people opt to rent long term either by choice or circumstance, the US may be headed toward a housing profile more like that of many European countries, where homeownership doesn’t convey any particular status or cultural worth.

And as Jason Hartman says, that’s good news for smart investors, who can expect to reap long-term returns from a growing pool of renters that shows no sign of shrinking.

CW Blogcast 65 - Internet Real Estate Sales: Changing the Game? Feb 26, 2015

Online real estate transactions now account for over half of all housing purchases in the US alone. The Web offers a place for buyers, sellers, agents and investors to do business that bypasses the traditional “brick and mortar” style of doing business – and it’s changing the game for all concerned in ways both good and bad.

The online world of real estate takes many forms. Only databases provide a place for agents to list their services and properties. Buyers can search by price, location, agency and more. These sites serve agents and brokers who make the initial contact with a prospective buyer through he online portal, but then the rest of the transaction takes place in the traditional way.

Those big online listing sites also serve a new breed – real estate agents, buyers and sellers that exist only online. The entire property transaction can take place electronically, without any parties ever meeting in the physical world.

Online transactions are fast and convenient. They can be conducted from anywhere in the world – an appealing prospect for investors interested in buying properties abroad or those who want to diversify their portfolio at home – a strategy Jason Hartman recommends.

But as a recent article from Business Insider reports, those very features are creating conflict between “brick and mortar” real estate agencies and those doing business purely online. The parties involved in the current conflict are UK_based OntheMarket and a host of competitors angry at the site’s success at poaching their clients with lower listing rates and more services.

While that might not seem like much oaf a concern to housing market watchers elsewhere in the world, it points up the fact that online real estate transactions continue to play a major role in both commercial and residential real estate purchases throughout the world. And because that’s true, all parties involved must learn how to navigate the ups and downs of this rapidly changing landscape.

The world of online real estate includes options as diverse as massive databases of properties and agents, auctions, agency and individual agent websites, and private transactions conducted directly between buyers and sellers through classified ads and even social media.

Transactions can be conducted completely online, or go offsite into the physical world after the initial contact is made. Title searches and many other aspects of closing a deal can be done online too – and thanks to social media all parties can stay in frequent, real time contact. Properties can change hands via online funds transfers to private accounts or sites like PayPal in virtually any currency – even Bitcoin.

But s the frustrated agents in the Business Insider piece point out, bypassing the tried and true system of buying and selling property comes with its own set of risks. Entities that exist only online can be legitimate –or not. They can vanish in a heartbeat, often after collecting large amounts of money from unsuspecting investors with dollar signs in their eyes. That’s what happened in a recent scam in which a bogus real estate investment company sold eager investors on a plan to buy up cheap houses in distressed Detroit – and then vanished, taking investors’ funds along.

Because the entire operation was conducted online, once it closed up shop, the investors who had been bilked had virtually no chance of getting their money back. The online world is home to other scammers, too. In a variation on the old “Nigerian prince” scheme, scammers post up heart-tugging ads about hardship and tragedy, begging for someone to sell them a property outside their country. Gullible investors put up money – and never see it again.

Listing scams also abound. Scammers snatch legitimate listings from the large databases and relist them under their own name, selling and re-selling the same property over and over again until someone catches on.

The new popularity of using Bitcoin for online transactions of all kinds – not just for real estate – also opens the door for scams. Bitcoin can be used for just about any transaction that both parties agree upon, and that includes buying and selling homes and other big-ticket items. It’s becoming increasingly favored for international transactions, especially when one or both parties hail from countries with unstable currencies.

But Bitcoin is anonymous and untraceable. If a deal goes bad there’s no recourse for either party. There’s no way to stop a check, trace a deposit, or do any of the things that can protect a transaction involving traditional currencies. And bypassing the safeguards of traditional process creates risk too.

While real estate professionals, buyers and sellers of the traditional variety may complain, but online property transactions are claiming an ever-bigger piece of the real estate pie. In this ever-changing world full of conveniences – and risks – it pays for investors to take Jason Hartman’s advice to stay informed – and in control. (Featured image: Flickr/mikhailchurykin)

Source:“Real Estwate Agents Are Waging War Against the Internet.” The Economist via Business Insider. businessinsider.com 20 Feb 2015

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CW Blogcast 64 - Would You Buy a House With Bitcoin? Feb 19, 2015

he Bitcoin has changed the way the world thinks about money, and its influence continues to grow. Since the first Bitcoin transaction took place 2009, the digital currency has been accepted by a steadily growing list of businesses, institutions and marketplaces – including real estate. And it’s a trend investors need to watch.

The Bitcoin was created in 2008 as an experiment in freeing financial transactions from the control of traditional institutions and regulations. Completely digital and totally unconnected with any kind of government agency or banking concern the Bitcoin promised to democratize money completely.

Developed out of a computer algorithm that dedicated geeks could use to ‘mine’ new coins, the Bitcoin can be used in any transaction two parties agree upon. There’s no way a government entity could interfere or track that transaction. Bitcoin can be bought and sold on several large exchanges operating around the world to make transactions of small and large amounts run smoothly.

From those early days, Bitcoin deals have gone mainstream. In world exchanges, Bitcoin stands alongside traditional currency heavy hitters such as the dollar, the euro and the yen, with values that fluctuate from lows of $20 to highs of over $200. Bitcoin can be used to buy cars, pay college tuition, build a website, get fertility treatments, travel – and now, buy and rent houses.

Bitcoin’s presence in the world’s real estate market has grown significantly since the creation of major Bitcoin exchanges that make it easier than ever to conduct business using the digital currency. It’s possible to buy and sell real estate entirely in Bitcoin – and even to pay your rent in Bitcoin too. To do this, all that’s necessary is two parties who agree to the deal.

Butcoin is especially attractive to investors who want to buy real estate in a foreign country. Most popular now in Asia, the use of Bitcoin in real estate transactions is spreading worldwide. The digital currency appeals to investors from countries whose official currencies are unstable or devalued, but Bitcoin transactions offer an upside – and some serious downsides as well – for investors everywhere.

Should you buy, sell, or even rent, investment property with Bitcoin? The very qualities that make the cybercurrency appealing also contribute to its iffy reputation among investors and money market watchers. The anonymity and lack of regulation over Bitcoin transactions made the digital currency a prime vehicle fro all kinds of illegal transactions, from drug dealing to money laundering. Many people are aware of Bitcoin’s connection to the online drug marketplace Silk Road, thanks to the widely publicized trial of its alleged founder in January 2015.

The Silk Road incident called attention to one of the main concerns about Bitcoin. Digital currency is independent of any issuing organization such as a country’s central bank or other large financial institution. While that keeps Bitcoin “free,” it also means that many of the safeguards surrounding traditional money just don’t apply.

In the US, the government can block certain transactions that break local or national laws. It can track transactions through bank accounts and other means. Using those paper trails it can prosecute suspected criminal activity – and compensate victims.

In a Bitcoin transaction, none of those safeguards apply – and if a deal goes sour, there may be little or no recourse for those involved. A recent case involving a Hong Kong based Bitcoin exchange resulted in the loss of over $300 million USD in a suspected Ponzi scheme – but investors had little recourse once the exchange closed its virtual doors.

The volatility of Bitcoin itself may also present some challenges for investors in big-ticket items like houses. Bitcoin trades in the international money markets like traditional currencies, and that means its value can fluctuate widely. The property you buy with Bitcoin today may sell for a drastically different amount later on.

CW Blogcast 63 - Real Estate - Still the Leading US Asset Feb 12, 2015

If you put your money on coffee and cattle in 2014, you might be smiling all the way to the bank. But if you backed crude oil and gas – well, not so much.

That’s the verdict from Business Insider’s recent charting of the performance of what it claims are all the major asset classes in the world. It’s a complex, visually striking chart that lays out, in shades of green and red, which assets showed a profit at the end of the year, and which didn’t. While the results are striking in some ways and strange in others, the chart is most notable for what it left out: that most stable and consistent of US asset classes – real estate.

Business Insider’s chart lists coffee as the most productive asset of the year, followed by cattle and a variety of foods, precious metals and other commodities, which makes for some strange rankings. Palladium performed better than cocoa, but sugar outdid platinum and soybean meal yielded worse returns than lean hogs.

High performers and low ones intersect at the boundary of orange juice and gold, and the chart predictably bottoms out with energy products such as oil and gas. But where is real estate? As Jason Hartman points out, real estate is no only a perennially desirable asset, it’s also one of the most protected, with a long list of tax breaks and exemptions that don’t obtain with any other kind of investment.

The housing crash of 2008 put real estate front and center in the public’s awareness. Millions of homeowners lost their homes due to foreclosure and loan defaults. The US real estate market struggled to recover, with massive numbers of homes stuck in the “foreclosure pipeline” and unavailable for sale. Houses were flipped and banks penalized for bad lending practices. Mortgage standards tightened. Economic conditions prevented hopeful homebuyers from getting a loan.

Through it all, though, smart investing in income property continued to yield returns – and as other assets such as precious metals and natural resources hit heir limits, opportunities in real estate continued, thanks to low interest rates and thriving local economies outside of the major real estate markets.

Real estate is always in demand. Everybody needs a place to live. And because conditions since the housing collapse have put homeownership out of the reach of many Americans, demand for rental is surging. Lending standards are tighter and so are constraints on budgets for things like down payments. People who might have bought a home in previous years are now forced to become long-term renters.

Add to that tenant pool the expanding numbers of people who choose to rent rather than buy homes, and it’s clear that current conditions are opening new opportunities for investors.

Tax laws are always changing, but even so, real estate remains the most tax-favored asset an investor can have. Depreciation, repairs, and ongoing maintenance are among the deductions a rental property owner can make. Some exemptions and deductions pertain to homeownership in general, while others are specific to investment property. In some situations, investors can even write off periods of vacancy when the property isn’t yielding a return.

What’s more, rental real estate will keep yielding returns for the life of the investment. With a mortgage paid by tenant rents, investors can keep their own money secure for other purposes. Risks are assumed by the lender, who can accommodate situations like natural disasters with loan grace periods and adjusted terms to help property owners get through a tough time.

The Us real estate market is many markets – and not all of them are created equal. Opportunities await Investors who can diversify their holdings into those mid range markets with opportunities for growth in thriving local economies. And those opportunities aren’t available with assets like precious metals, which have a limited potential for returns over the over the long term.

The 2014 overview of how major world assets performed makes for interesting reading. But without the heaviest hitting asset of them all – real estate – in the mix, the results may not mean much. For investors hoping to make long-term profits, income property trumps palladium and orange juice every time.

CW Blogcast 62 - Millennials: The “Renter” Generation? Feb 06, 2015

Coming your way: a new generation of (probably permanent) renters. It’s the millennials, making news once again for the basic contradiction of their lives: better educated than their parents, but simultaneously economically more disadvantaged. And because this generation is both the largest demographic and one of the poorest, their circumstances may mean new opportunities for income property investors.

According to census data reported in a recent article from The Atlantic, the median income for the nation’s youngest members of the workforce lags far behind that of their parents at similar ages and locations. On average, young working adults today earn $2000 less than their parents did.

That’s no surprise given the current economic climate and the large amount of student debt carried by many new and fairly recent college graduates – debt that will likely shadow them for the length of their professional lives. And that’s assuming that they’ll be able to enter the profession they trained for.

Securing solid employment is a challenge for this generation in an era of stagnant job growth and declining demand in key fields. And the picture is even worse for those without a college degree, since job options are even more limited. For college dropouts who ended up without a degree but still have student loans to pay off, things may be even worse.

Still, as the Atlantic points out, comparing today’s young workers with their parents at the same age may be like comparing the stereotypical apples and oranges. It’s a very different world in many ways. The country is a far more diverse place than it was thirty or forty years ago. Some of today’s young workers are the children of immigrant parents who earned very little. In an era of increasing globalization, jobs have been outsourced overseas and technology has made others obsolete. Four-year college degrees can’t always keep ahead of the curve in a fast moving world.

But all these change notwithstanding, by most standards, the millennials are struggling. And that struggle is clearly illustrated in the housing market. To save money, many underemployed young workers are still living with family. Others are sharing dwellings – and rent – with friends.

Of those twenty and thirtysomethings on their own, though, an overwhelming majority is renting dwellings that range from apartments to houses. Citing money concerns and lifestyles, they’re choosing to get married later and postpone having children. And unstable employment situations mean they might need to move to another city for work.

Along with millennial attitudes toward home buying, the housing landscape has changed dramatically since their parents’ day. The housing collapse and the recession that followed brought tighter standards for getting a mortgage, including higher down payments and credit scores. That made it more difficult for young workers with unstable employment to even qualify for a home loan.

Because those standards were actually preventing people from getting loans and buying homes, they’ve relaxed somewhat. The government has asked the Fair Isaac Corporation, purveyors of the famed FICO credit scoring system, to loosen their standards. And amendments to the Qualified Mortgage Rule that took effect in i2014 have relaxed the down payment requirements for some kinds of loans.

Those changes don’t seem to have affected millennials’ interest in home buying much. Another trend might: the surge in rents in many markets around the country. A recent study by online real estate giant Zillow found that on average, renters pay twice as much per month for housing than homeowners. Some industry watchers speculate that the sheer cost of renting could push millennials with the ability to make a down payment to take the plunge into homeownership.

But that depends on factors that, for now, seem to elude the grasp of many in this youngest generation of workers still struggling to find and keep well paying jobs. While their parents may have been able to opt in to the American dream of homeownership at a similar age, today’s millennials are postponing it, perhaps indefinitely.

CW Blogcast 61 - Single Moms Drive Shifts in Rental Housing Jan 29, 2015

More than half of American children live with a single mom. That’s the finding of a new study on the changing demographics of American culture – and those numbers, and the economic realities behind them, mean new challenges and opportunities for rental property investors.

The new findings by researchers from Princeton and Harvard aren’t really new. The trend toward single-mother households was first noted in studies dating from the 1960s. And while research into the impact of that rend focused mainly on the outcomes for children, the shift from the traditional two-parent household has implications for a multitude of other sectors – especially rental housing.

Early research into the growing number of households headed by unmarried women with children looked largely at inner-city households, mainly characterized by a black mother receiving public assistance. But as the new studies point out, that’s only one part of the single-mother profile. As home ownership stays out of reach for many struggling Americans, this kind of household is likely to play a major role in shaping the future of the growing rental market for years to come.

Single mother households take many forms, and the only thing they really have in common is that the sole support of the household is an unmarried mother of dependent children. But that mother might be an urban teenager struggling with poverty and a lack of education, a suburban college graduate left to cope after a sudden divorce, or a midlife professional woman who made the choice to have a child without a partner.

These households don’t fit the traditional picture of a solid American family. And for many of these single moms, that picture is completely out of reach. Varied profiles aside, single-mother households tend to be less affluent and less stable than those with two parents – and two incomes.

Single mothers may be struggling to make ends meet in the wake of a divorce or separation from the children’s father. They may have been forced to leave a violent home. They may be juggling a low paying job (or more than one), school and child care with little support. And buying a house may be a virtual impossibility – even with new lower down payments available on mortgages from government lenders like Fannie Mae, Freddie Mac and the Department of Housing and Urban Development.

These households aren’t the only ones feeling the economic pinch – and fueling the demand for rental hosing of all kinds. The pool of renters has seen dramatic growth in the years since the fabled housing collapse of 2008 as homeowners lost their houses to foreclosure. A downturn in employment meant that more people couldn’t qualify for loans or make mortgage payments.

And the shifting demographics of American society created new groups of people who just aren’t interested in home ownership: the millennials, who are struggling with student debt and postponing marriage, and retirees, who are selling homes in favor of smaller dwellings, greater mobility and access to amenities.

All these groups offer both challenges and opportunities for investors working to build wealth with rental properties. Recognizing just who these new renters are and what they want is a key to creating a stable base of long term tenants for a long term ROI.

How can investor/landlords accommodate the growing number of single-mom households? Like those other growing tenant groups the millennials and the seniors, single mothers look for safe housing near schools, daycares and public transportation. Though it’s against fair housing law to target – or shut out – any particular group, property owners can list kid friendly amenities and advertise rentals in appropriate places.

Because many of those households are headed by lower income, typically young mothers, some investors might want to consider working with HUD and other agencies on programs like Section 8 housing, which assures regular rent payment sand a steady stream of tenants. Section 8 waiting lists are long, sometimes taking years, as renters can remain on the rosters indefinitely.

Domestic violence accounts for a large percentage of single mothers forming their own households, too, and domestic violence advocacy services may work with landlords to help clients with move in expenses such as deposits and first and last months’ rent. Letting these agencies know that you’re willing to rent to their clients is another way to create an ongoing tenant stream.

The cultural landscape is constantly shifting. Investors who stay informed and diversify their holdings will be able to take advantage of those changing trends = and build wealth in the new year and beyond. (Featured image:Flickr/wonderworks)

CW Blogcast 60 - Do You Make These 4 Real Estate Investing Mistakes? Jun 20, 2013

Jason Hartman maintains that investing in income properties is not a difficult process. Where too many people go wrong is messing up the simple stuff. Today we’d like to point out a few common ways investors accidentally lay waste to their property portfolio and how it could be avoided.

1. Make a Plan: Just because you stumble across a great deal doesn’t mean you should pull the trigger immediately. The time to decide exactly how this new property fits into your larger investment scheme is BEFORE you buy it. Not after. Keep this bit of Hartman wisdom in mind: “A property must make financial sense the day you buy it.” Not some undefined number of years down the road.

2. Forget Get Rich Quick: The idea of getting rich quick is for gamblers, not investors. If you’re a gambler, head for Vegas. True real estate investors follow a methodical, conservative strategy that plays out over years, not months or days. That’s how you get rich. If you can’t wait 5 to 7 years for that first big refi, you’re in the wrong business.

3. Performing Your Own Brain Surgery: No surgeon (hopefully) would dive into such a delicate procedure without years of studying and training. It’s no different with real estate investing. If you think you can walk in with no previous experience and mop the floor with seasoned professionals, you might be in for a rude awakening. A great place to get up to speed on the most effective income property investing techniques is JasonHartman.com. With more than 300 episodes of The Creating Wealth Show podcast posted and almost 2000 blogs, there’s enough real estate knowledge available to make yourself a legitimate expert.

4. Unrealistic Cash Flow Expectations: If you plan to hold your properties and rent them out (a strategy we highly recommend), you’ve got to learn how to predict how much cash flow you’re going to need to cover maintenance expenses. Think of it like this. What if your new income property sits on the market for 3 or 4 months before you can rent it out? During that time you’ll be paying the mortgage, taxes, insurance, advertising costs, and possibly HOA fees. Unless you’re prepared for that negative initial cash flow, an asset can quickly become a liability.

These are just a few areas where the newbie investor can shoot himself or herself in the foot, and all are easily avoided. Perhaps the best advice we can offer is to not get in a hurry. Take your time because there’s always another great deal lurking just around the corner.

CW Blogcast 59 - Cash and Carry in the Housing Market Jun 19, 2013

Interest rates that continue to run low and rising prices make the housing market pretty hot right now. Banks are offering attractive mortgage packages, too. But, say some market watchers, it’s hotter still for buyers who can pay cash. To compete in the cash wars, what’s an investor to do?

Recent data crunched by DataQuick reveal that the number of homes bought with cash has been rising steadily over the last few years, with cash transactions accounting for as much as 30 percent of home sales in some major markets. The reasons?

Although hosing prices are rising, in many areas they’re remaining low enough to put a cash purchase within reach of many buyers. When home prices hit higher levels, that excludes most c buyers except those backed by large investment groups. Now, lower-cots homes, especially foreclosures, are available to residential homebuyers as well as startup investors.

Foreign buyers also account for a significant percentage of cash sales. Whether buying fur investment purposes or just to have a vacation home, well-off foreign buyers are finding American real estate a secure place to put their money. Cash ales bypass complicated financing issues and make for a quick sale.

Sellers love cash sales. The sale moves quickly without glitches related to financing and there’s no worry about defaulting on mortgage payments down the line. Given a choice of a buyer with cash in hand over a qualified buyer with a loan, many sellers opt for the cash, leaving the “typical” homebuyer locked out.

Where does the money come from? Some cash buyers are backed by third party financial groups or individuals. But, say real estate pros, still others have raided retirement accounts and investment portfolios, rolled over money from a previous home sale, or tapped into inheritances. Younger buyers may even turn to parents for a cash boost.

While cash sales are quick sales, cash buyers miss out on the benefits of using other people’s money and being able to “refi till you die,” as Jason Hartman says. They lose the tax breaks that come with long-term mortgages and lose leverage over the lifetime of the purchase. But Ilyce Glink, managing editor of the Equifax Finance Blog, points out that in many sales, cash is only a bargaining chi

Offering cash gets a buyer’s foot in the door and catches a seller’s attention, according to Glink. Ad once a buyer establishes the ability to back the purchase with cash; they can go out and get a traditional mortgage to actually carry the sale.

Used wisely, cash can offer a competitive edge in today’s housing market. But as Jason Hartman advises, mortgage debt can be a “good debt” that frees up that cash for other important needs.

CW Blogcast 58 - Some Threats to the Economy Are Out of This World Jun 18, 2013

The recent spate of natural disasters – superstorms, tornadoes, earthquakes and floods – has homeowners and property investors throughout the country checking their insurance policies and talking to their lenders about how to recover. But, as recent news reminds us, the biggest threat to the economy – not to mention a little thing like the planet – may come from space. And while there’s not much we can do about that, it’s a reminder to take the actions we can to protect assets and investments.

In 2013 alone, the Earth has been buzzed by several asteroids, one big enough to sport its own moon. Any of these could cause massive damage – and the worst-case scenario predicts worldwide climate change. That’s not a remote possibility, either: thanks to Russian dash cams, the world was able to see what a meteor strike looks like. And moon watchers in March 2013 might have seen the flare of an impact on the lunar surface.

More than that, though, the Sun’s latest geomagnetic storm cycle reminds us that massive solar flares can create widespread havoc on computer and navigation systems worldwide. That’s not just speculation, either. A recent article in the National Journal detailed one such storm, recent enough to be thoroughly recorded.

In 1859, fierce solar storms sent enough radiation into the Earth’s atmosphere and the planet itself that telegraphs ran off the energy output and the aurora borealis was visible as far south as the Caribbean. Those storms, say astronomers and weather watchers, are extreme and rare – but their existence is a stark reminder that in today’s interconnected world, where vital systems depend on sophisticated technology, the consequences could be far more severe.

Changes in the earth’s upper atmosphere also leave us vulnerable to space weather. Holes in the ozone layer open the way for harsh radiation to reach Earth’s surface, bringing harm to humans and other surface dwellers.

Any of these events have the potential to damage infrastructures the world over and cripple economies large and small. Experts point out that at this time, real solutions such as deflecting asteroid orbits or shielding the planet from space radiation remain in the realm of science fiction. But improved monitoring and detection of events like solar storms can help minimize the damage. And, they say, increased public awareness that we live in an active universe could encourage cooperation and more commitment to reducing human contributions such as greenhouse gases.

What’s an investor to do? The words of the old Serenity Prayer implore God’s help to accept what can’t be changed, change what can be changed – and for the wisdom to know the difference. That’s a point echoed by Jason Hartman’s key recommendations for income property investors: stay informed, keep control of your investments, and be proactive about protecting them.

We may not be able to duck am asteroid. But the possibility reminds smart investors to take Jason’s advice and review insurance policies, make needed repairs and learn from experts– ways to protect investments from whatever in the world might happen.

CW Blogcast 57 - Why do we say "Refi 'til ya die!"? May 14, 2013

We recently mentioned that the Platinum Properties Investor Network believes in a real estate strategy that is exactly opposite of flipping. We think that the strategy of buying and holding prudent rental properties over a long period of time offers tremendous advantages, one of which is the ability to refinance your loan mortgage time and time again.

“But wait,” you say. “I thought the goal was to pay off the mortgage.”

Not so fast. That’s what most people think - and that is not it at all. As you property gains value (typically doubling every seven years), you can refinance the loan for more than the original purchase price and use the additional money to re-invest in even more rental properties, thus increasing your portfolio by leaps and bounds as the years roll past.

The key to the whole thing is that the net proceeds are not taxed! The reason for this is that you are not required to pay taxes on loans. In a refinance situation, you are taking out a loan, not selling a property. Voila! No taxable event has occurred. Take the extra money and use it for living expenses so you don’t have to work. Take a vacation. Do whatever you want, though we think it’s a great idea to plow it right back into more income properties.

CW Blogcast 56 - The problem with flipping... May 13, 2013

If you’ve been a follower of Jason Hartman and Platinum Properties Investor Network's style of investing for any length of time, you know we don’t believe flipping properties is the best approach for creating wealth in real estate.

There are several reasons we think this way, but let’s consider a single one - taxes. Part of any investor’s success is the extent to which he manages to avoid paying taxes. Let’s make it clear we’re not encouraging illegal activity. What we do suggest is you take advantage of each and every method of legal avoidance the IRS presents you with. That’s why we were such fans of Go Zone investing.

And that’s why we don’t like flipping.

Unless you’ve been living under a rock on the far side of the moon, you’ve probably heard about flipping. This is where you find an under-priced house that needs a little renovation. You buy it, do the work, and immediately re-sell it for a little (or maybe a lot more) than what you paid.

The problem with flipping is you create TAXABLE events every time you sell. This takes money out of your profit margin. Yes, you could make some money but we don’t believe you’ll become wealthy this way. For true wealth generated by the best form of real estate investing ever, check out The Complete Solution for Real Estate Investors at www.JasonHartman.com.

CW Blogcast 55 - Why it's good to be a control freak. May 10, 2013

When it comes to your real estate investments, it’s good to be a control freak. This is not what talking head hosts will tell you on the cable financial shows. They want you to drink the Wall Street Kool-Aid and do your best zombie imitation as you follow the broker of your choice's advice down the hemlock-laced path.

The surest way to become a spectacular failure as an investor is to give up control of your portfolio to someone else. We’ve talked before about the three essential problems with this, especially when it comes to stocks, bonds, mutual funds, and the flat-out con game on The Street.

The first thing to do is get out of the aforementioned traditional investments. You will not get wealthy. You’ll be lucky to break even. It’s not a fair game. You will lose when you meddle with this incestuous brand of finance.

Here’s why you should be suspicious of your stock broker.

1. He might be a crook. Need we say more? You only have to take a quick glance at the headlines practically any day of the week to find the latest financial scandal.2. He might be incompetent. Once again, a slam dunk for our opinion. Lehman Brothers, AIG, and the list goes on.3. He might charge high administrative fees. Chances are, any major broker WILL charge administrative fees whether your portfolio goes up or down, and they likely won’t be small fees either.

So what’s an investor to do? Drop the stock market like a bad habit and review our free but unique rental property strategy documented onwww.JasonHartman.com. At Platinum Properties Investor Network, we’ll show you exactly how we’re making money in this economy.

CW Blogcast 54 - The greatest Ponzi Schemes ever. May 10, 2013

The term Ponzi Scheme, named for Italian-American, Charles Ponzi, back in 1920, describes an investment flim-flam that requires an ever-increasing volume of cash to stay afloat. The influx of new investor money is used to pay original investors and to line the pocket of the person that started the whole thing. The problem is, the model is destined to fail. Either the pool of suckers runs dry or the SEC figures out something illegal is going on, usually very late in the game.

Does the name Bernie Madoff ring a bell? He was recently jailed for his multi-billion dollar shell game that defrauded thousands of investors, many of them high-profile celebrities. But was that the greatest Ponzi Scheme of them all?

Not even close.

What about government financed entitlement programs like Social Security, Medicare, Medicaid, and propping up failed financial institutions? Aren’t these simply sanctioned Ponzi Schemes? You’ve got an ever-shrinking pool of tax paying workers making payments to an ever-increasing number (thanks to the Baby Boom generation) of benefit recipients. How long can that untenable model be sustained? At some point, don’t you have to cut benefits or raise taxes?

Not if you crank up the printing presses and produce more currency! That has been the political response for decades now and has directly led to the continually eroding purchasing power of our highly inflated dollar, a process which makes all Americans poorer unless…

You visit our website at www.JasonHartman.com to learn our unique strategy to profit from inflation.

CW Blogcast 53 - Destroyer of currencies. May 09, 2013

Here’s a question for you. Fill in the blank.

“My government is ___”

A. criminally stupid

B. criminally criminal

C. criminally insane

D. desperate

E. all of the above and then some

At Platinum Properties Investor Network, we would like to make a case for answer D. For quite some time now, it appears our politicians and others who contribute to economic policy have had their brains replaced with sawdust.

You’ve heard of inflation, right? It’s that nasty little superbug that trivializes the dollar and devalues almost every asset worth having. In case no one pointed it out to you before, inflation is the direct product of our current monetary system. Yep, we’re choosing to kill the dollar.

Perhaps you’ve noticed that federal government tends to promise everything to everyone and never reduces the amount of money going toward a program or bailout. What do they do to make up the shortfall when cash runs low? Why it’s easy, print more money! That way there will be enough to fund everything.

Do we even need to point out how monstrously shortsighted that way of thinking is? Every extra printed dollar that flows into the economy devalues the rest in circulation. When you have the same basic amount of goods and services available for purchase but, suddenly there are more dollars to buy them with, you get what we have now – increasingly worthless dollars and a poorer standard of living.

Unless, of course, there was some way to profit from inflation. As a matter of fact, there is. Surf over to www.JasonHartman.com and we’ll teach about it for free.

CW Blogcast 52 - Grow rich borrowing money. May 09, 2013

We know it sounds counter-intuitive to say you can get rich borrowing money during inflationary times but, if you’ll stick with us for a few minutes, we’ll show you how it makes perfect sense. Let’s start with a simple economic truth – the value of a dollar declines over time. In fact, it declines a whole lot.

In real terms of stuff you can buy, a dollar in 1972 has fallen all the way down to where it’s only worth .24 cents today. This is what is referred to as inflation. It attacks the value of your assets and devalues your money, savings, home equity, stocks, bonds, mutual funds…and your debt.

Did you catch that last one? It also decreases your DEBT! That means that if you acquired debt in the form of a mortgage is 1972, and kept refinancing it over the years, that mortgage is only worth a fraction of what it was when you took it out. Bad for the bank because they are on the short end of the stick. Good for you because, once again, in real terms of wealth that mortgage has gone down in value.

This is how you actually get paid to borrow money.

Now we’re not suggesting you run out and load up on silly consumer debt like new cars, fancy televisions, and expensive vacations. To profit from this debt strategy, you need to acquire long term, fixed rate, debt in the form of a mortgage tied to an income producing property.

It’s that simple. Well, to be honest, there are a few more details. Call us at 714-820-4200 and we’ll tell you how to get started.

CW Blogcast 51 - One life-changing idea. May 08, 2013

At Platinum Properties Investor Network, we don’t know any other way to do it than to keep beating the same drum – investing in Wall Street’s lies will lead to disappointment. That game is rigged to siphon your money a little at a time (or sometimes a lot at once) until you have nothing.

We know it’s hard to turn your back on the stock market. Your parents and grandparents probably invested in it also. The ultra-rich con men who run it, along with their willing accomplices in the media, have managed to make stock, bond, and mutual investing part of the fabric of our American lives.

There are many reasons you can’t trust today’s Wall Street, chief among them being that the market is now largely a non-dividend paying, speculator driven casino game. It will not make you rich. It will not build your retirement nest egg.

Here’s the life-changing idea: forget about Wall Street and embrace income property real estate investing. This form of investing has history on its side as a proven wealth creator for millions of middle-class families.

Have you ever thought of your mortgage as an asset? It is. Call us and we’ll tell you why.

Do you know how to invest in a way which profits from inflation? Call us and we’ll show you how.

Has anyone ever explained to you exactly which kind of debt is good and can make you rich without taking dangerous gambles? For answers to these questions and more, please visit our website at www.JasonHartman.com or call one of our expert financial counselors at 714-820-4200.

CW Blogcast 50 - Is pre-foreclosure an even better deal? May 08, 2013

These days, investors are poised like vultures in trees along the roadway, ready to dive on the next foreclosure hitting the market like roadkill on pavement. Do your homework and there’s no doubt you can find a heck of a deal investing in foreclosures but think one step ahead and you might get an even better deal by buying the property BEFORE it’s foreclosed upon.

This method of acquirement is known as a short sale or pre-foreclosure. The term “short sale” simply means the bank is ready to unload it, so they might accept an offer of less than the property is worth. Many times the owners are eager to go this route as well, anything to keep a foreclosure off their credit record.

Banks are willing to listen to pre-foreclosure offers because, face it, they don’t want to own this property. They’re not in the real estate business. They’re in the lending money business. How much of a discount might you expect? The answer varies but here is something to think about. Some estimates say it costs a bank about 18% to go through the foreclosure process. There are legal fees, court costs, inspections, appraisals, repairs, maintenance, and sales expenses. If you were to make an offer within that range (18% below appraised value) prior to the foreclosure process, you never know what they might say yes to.

Many times you can even arrange to lease the house back to the owner you just bought it from. They might not be too crazy about moving and this deal benefits everyone.

Something to think about.

CW Blogcast 49 - You're welcome. May 07, 2013

At some point, most of us realize that life is a gradual process of acquiring the knowledge necessary to stay alive and maybe make a little money along the way. Remember when Mom told you not to eat stuff off the sidewalk? There’s a reason for that – you could get very sick.

Or when Dad told you not to stand on the very highest rung of the ladder because it’s not safe, as he soon proved by going to the very top in a psychotic effort to clean the last leaf from the gutter – and promptly fell off?

Likewise, getting off to the wrong start with outdated or just plain wrong knowledge about investing can hamper your success forever if you don’t get it straightened out early. The following are four investment truisms you should learn sooner rather than later.

1. Don’t drink the Wall Street Kool-Aid of stocks, bonds, and mutual funds. Real estate is a much better investment, as has been historically proven.

2. Gold is not an investment. It’s just a different form of money that holds value better than paper currency.

3. Not just ANY real estate though. Income properties can make you wealthy when done correctly.

4. You don’t have to pay $5,000 for a fancy course to become an expert at this style of investing. You only need the foresight to visit the websitewww.JasonHartman.com and absorb the free resources found there.

Alrighty then. You can thank Jason Hartman and Platinum Properties Investor Network for giving you the tools to become very wealthy in a shorter time than you might think. This information is golden.

What are you going to do with it?

CW Blogcast 48 - Stocks are extinct assets. May 07, 2013

As you may know, we at Platinum Properties Investor Network believe that real estate, income properties specifically, are the premium investment asset in the world. It vexes us mightily to realize that millions of hard-working Americans are coming home from a day’s work to plop themselves down at the computer and see what their stocks have done that day.

We can already tell you the answer to that without even looking – up, down, sideways. Forward two steps, backwards two steps. It’s all over the place. What is this supposed to be? A retirement plan or a salsa dance? Hard to tell the difference.

The problem, as you may or may not have surmised, is that the stock market of today has fundamentally changed from the stock market of the 1940’s and 1950’s. Back then, dividends were the name of the game. A small investor could make regular investments in a blue chip company and, over the course of a lifetime, amass a comfortable retirement nest egg through dividends and appreciation.

These days, all joking aside, putting your money in the stock market is more like hitting the casino in Las Vegas. Dividends are paltry. The only people getting rich on Wall Street these days are the ones sitting across the table from you. You know who I’m talking about – brokers, advisors, bankers. They wave shiny brochures in your face with one hand while helping themselves to more cash from your pocket with the other.

This is no way to invest. You will exit this life a sad, frustrated soul if you continue to believe the lie. We’d like to introduce you to the truth about how to create life changing wealth no matter your age or experience level. Call our expert investment counselors at 714-820-4200 and prepare to look behind the curtain.

CW Blogcast 47 - Countdown to inflation. May 06, 2013

Like a broken record, we keep telling you that big-time inflation is just around the corner and now is the time to adjust your investment strategy. But why do we think inflation is coming? Okay, fair question. Here is the chain of economic events we see coming.

1. The natural consequence of our politicians “print more money no matter what” philosophy is increasing inflation. As prices go up, more investors will sell bonds in an attempt to preserve their wealth. This will place an upward pressure on bond yields as rock bottom interest rates for government treasuries will no longer be acceptable.

2. As treasury yields drift higher, the ripple effect will cause mortgage rates linked to a treasury index to move higher also. This will cause a rise in “real” real estate prices because, due to inflation, the same monthly payment will not buy the same amount of house.

3. Diminished purchasing power will stall the real estate market, sending prices and appreciation down, down, down.

Taking into account the chain of events we just described, it would be a bad time to buy into real estate then, in a general sense, at least. We have a pretty good idea that Platinum Properties Investor Network will still be able to find and recommend income properties that make financial sense the day you buy them BUT there’s no denying that it will be trickier to make a profit.

Higher interest rates will mean a higher mortgage payment and lower cash flow. The time to get in is now. Did you know that investing in long term, fixed-rate debt tied to a packaged commodity (like a rental house) can make you wealthy even in the face of inflation?

Call one of our expert investment counselors at 714-820-4200 to find out how.

CW Blogcast 46 - Platinum Properties Investor Network - more than a middleman. May 06, 2013

What’s to stop an interested income property investor from showing up at one of our heralded educational events, find out which markets we’re recommending, and head out to make your own connection with your own real estate agent?

The short answer is nothing. There is absolutely to stop anyone from doing that. It’s not illegal. It’s not immoral, and we won’t hate you for it.

We do, however, sort of cringe because we know a certain percentage of educational event attendees are doing just that. The problem is that even though we may say that Austin, Texas, is a great place to buy (which it is right now), we’re only talking about the macro market or the city. You can’t hope to be successful proceeding on that information alone. You have to drill down into the micro market, the neighborhood level, to find the sorts of income producing properties that will be spectacular additions to your investment portfolio.

Don’t think of us as the middleman. We’re not someone to be cut out of the picture. Our network is one of the most valuable resources you’re likely to find. In addition, it’s our business philosophy to always work on your behalf. Let’s face it, there are sharks in the real estate water. We work with brokers in our recommended local markets to get you the best deal available. We have clout because we send them lots of business. They don’t want to mess with you because they don’t want to lose us as a referral network.

Please visit www.JasonHartman.com and spend some time absorbing the free educational resources found there. They really can make you a sophisticated real estate investor in a short amount of time.

CW Blogcast 45 - Your own private bank. May 05, 2013

Ahh, your own private bank. Wouldn’t it be great? Working, well, uh, banker’s hours. Plenty of cash at hand when you’re ready to begin investing. At Platinum Properties Investor Network, we’d like to point out there is a private bank you can use for income property investing you might not have thought about.

It’s called your home.

Yep, the structure you live in. You’ve got equity in there, right? Our average customer comes to us with about $300,000 equity in their home but don’t get discouraged if you don’t have anywhere near that much. We’ll show you how to start small and, before long, you’ll be creating the kind of wealth with real estate you only dreamed about.

Here’s how to calculate the amount of equity you have. Let’s say you bought a house for $350,000 and you’ve paid $175,000 on a $300,000 loan. A recent appraisal puts your home’s worth at $500,000. To figure out how much equity you could take out, subtract the amount owed on the loan from the current appraised value like this:

$500,000 – $125,000 = $375,000

This is why we say “Refi ‘til ya die!” You can cash out that $375,000 and use it to make down payments on several different income properties. Assuming you put 20% down, you could control investment properties worth $1.5 million. In case you aren’t aware, inflation is reducing the real value of your equity as long as it sits in the house. Get it out! Put it to work.

Call one of our investment counselors if you have any questions at all. 714-820-4200.

CW Blogcast 44 - Don't believe the hype. May 05, 2013

If you’ve been interested in income property investing for any length of time, whether you’ve actually pulled the trigger and bought a property or not, you’ve likely run across the “No money down!” hucksters. They’ll show you pictures of happy couples relaxing on their favorite beach, living a life of frivolity and luxury on the income from their rentals.

Don’t get us wrong, you can create plenty of wealth using the income property approach but at Platinum Properties Investor Network, we feel it’s our duty to sprinkle a little truth dust on certain claims. In fact, an entire website called www.Infomercialscams.com has sprung up around the No Money Down concept. Go there to read stories of problems potential investors have run into while trying to buy a property without a down payment.

Can you really ask for a no interest one year note from the selling agent on their commission? Well…you can ASK. Get ready for the ensuing laughter.

All we’re saying is if it sounds too good to be true, it probably is. Don’t be enticed by testimonials, a pretty website, or intense sales letters designed to make you stop thinking with your brain.

We’re proud of our operation. From the very beginning, Jason Hartman based Platinum Properties Investor Network on honesty and integrity. We welcome all questions about how we make great returns with our own income property investments, and we’ll never charge you a cent for the education you can find at www.JasonHartman.com.

CW Blogcast 43 - When will we shut up about inflation? May 04, 2013

The answer to the question posed in the headline is “When hell freezes over” or, to put it more politely, “Never.” We feel pretty sure in making such a definitive statement because there is no logical way inflation will ever stop being a serious economic issue as long as our wrongheaded politicians think increasing the money supply is going to solve every problem.

How does the government cause inflation?

We love a good conspiracy theory as much as anyone but this time it’s straight forward. Money supply drives inflation for the overall economy. When the government increases the amount of money in circulation while, at the same time, the amount of goods and services remains flat or even decreases, you get what we’ve had for 40 years – a steadily weaker dollar and an annual inflation rate of 10%. Yeah, yeah, we know the government claims it’s only about 4% but that, friends, is a load of horse you know what.

The real problem with inflation is that it erodes the value of all dollar denominated assets like home equity, savings, CD’s. The great part is that liabilities like debt also has its value eroded. This is why we say have your assets denominated in physical things (like property and houses) and your liabilities denominated in debt.

Understand that last sentence, and you're halfway to rich already.

CW Blogcast 42 - The loan that can make you rich. May 04, 2013

Most of the time, we at Platinum Properties Investor Network would tell you that taking out a loan against your 401k retirement plan would be a bad idea. The reason is that the majority of people would waste the proceeds on the trappings of wealth – boats, cars, expensive vacations. If that describes what you would likely do with a 401k loan, you have our permission to skip the rest of this blog.

For those of you still with us, there is one situation where we think it’s a great idea to borrow against your retirement nest egg if you are absolutely certain you can follow the plan. The plan is to employ a prudent but uniquely effective real estate investment strategy. In short, we’re talking about income properties, which is when you buy single family residential homes and rent them out. In case you haven’t heard it before, this has been proven historically to be the best investment. It’s how the majority of wealthy Americans got that way.

But DON’T just run out and start buying up properties nilly willy. That could be worse than leaving your money in the stock market. Get an education first and do it right from the beginning. A good, free resource is the Creating Wealth podcast found at www.JasonHartman.com. Jason Hartman has devoted much, time, energy, and expense into making this a premium, no cost education for both savvy and first time real estate investors.

Try it. You might like it. It’s probably your best chance to get wealthy in this life.

CW Blogcast 41 - Why Warren Buffett makes money in stocks and you don't. May 03, 2013

Warren Buffett, the Sage of Omaha, seems like a kindly old gentleman when you see him on television but never forget the man got to where he is in life with an eagle eye constantly cocked for opportunity. Recent events in the stock market are a good lesson for why we say the average investor should run from Wall Street investments with all due speed.

Buffett, banks, and other elite investors are using the bodies of the middle class American to climb to even more wealth. How does it work? Here’s one example.

Due to the cycle of expansion and contraction of credit by major banks, we have major financial companies like AIG is serious distress. Their stock prices take a tumble and there seems to be a danger of bankruptcy. Then suddenly, like the knight on a white steed, Mr. Buffett steps in and says he will invest $10 billion in AIG. Shortly thereafter the government decides to plow $10 billion of bailout money into the company as well. The AIG ship has righted itself. Stock prices are recovering and average investors begin to take advantage of the resurgent AIG.

The sneaky part is this – Buffett is waiting for the hordes of middle America to begin buying so he can sell. He never said he was going to keep his $10 billion there. He’s just waiting for the prices to move upward so he can sell his stock back to you at a higher price.

See why the power elite make money with stock investing and you don’t?

CW Blogcast 40 - Will corporate credit make your wildest dreams come true? May 03, 2013

Spend any time with television or radio these days and you likely will hear the pitch that corporate credit is the answer to it all. World peace, hunger, nuclear proliferation, a veritable free flow of money that gushes into your pocket any time you want it to.

At this point, any thinking human with more than two brain cells to rub together should be a little suspicious. Is there anything in life that works like that? To this, we feel safe in saying “no.”

But there are some potential advantages to corporate credit, especially if your business plan involves short-term rehab projects. We’re doing some research into corporate credit and will get back to you with more in depth information later but, for now, here’s the thumbnail sketch.

The term “corporate credit” means that you create a legal business entity like an LLC or corporation and then apply for loans or a line of credit not through your personal identity but as that business organization. The upside is you could potentially obtain more money through this approach than you would personally.

The advertisements would have you believe it only takes a few months before $300,000 literally leaps into your hand. The truth is – probably not. Smaller community banks seem to be more likely to work with newly established corporations but the interest rates will be high. They want to develop a relationship with you but they’re not going to hand you the keys to the vault.

And remember this, default on one of these business loans and it WILL show up on your personal credit report.

CW Blogcast 39 - Break it down - foreclosure rehab. May 02, 2013

We talked earlier about the four critical areas of rehab when you’re considering a foreclosure purchase for your income property portfolio. It’s good to be at least somewhat aware of these four areas. After all, accurate estimates could be the key to profitability.

Most foreclosures recommended by Platinum Properties Investor Network are not going to have major trouble in these areas but it’s a good idea to at least be aware of the possibility.

Roof – The primary areas for concern are wood rot, termite damage, and loose shingles. Also check the ceiling for water stains, holes, or discolorations. This seemingly innocuous evidence could be hiding BIG problems underneath.

Structure – Walk around the outside of the property looking for cracks in the foundation or, worse, an entire portion of the house sagging. Structural problems can mean big bucks, maybe even into the tens of thousands of dollars to fix. It might be a deal killer.

Plumbing – Inside the house, look under the sinks in the kitchen and bathrooms. Once again, you’re checking for evidence of water damage. Outside, pay attention to large trees growing near the house. An intrusive root system could have you writing a large check for plumbing repairs in the future.

Electrical – Pay a good electrician to check out the house and consider it money well spent. Besides being potentially dangerous, there’s nothing more frustrating than a house with faulty wiring.

Slow down during your mad rush to buy a great foreclosure and make sure to thoroughly inspect all four of these areas during your preview of the property. As we’ve said before, it’s the attention paid to details like these that can make the difference between cash flow heaven and money pit purgatory.

Choose wisely.

CW Blogcast 38 - Don't miss these 4 areas when rehabbing foreclosures. May 02, 2013

Until recently, Platinum Properties Investor Network didn’t like to recommend foreclosures to our network. With the generally low quality of the selection, it was just too much of a risk to our reputation for finding excellent properties. But, for reasons you’re probably aware of, things have changed a little bit.

Much of our track record for success can be traced to our ability to quickly react to changing market conditions. We now take foreclosures into consideration and even recommend buying them to our clients in many of the 41 local markets around the country we specialize in. With newer model homes, ridiculously low prices, and the high quality brought about the national foreclosure meltdown, it would have been silly to stubbornly refuse to consider them.

But, even with newer foreclosure homes, some rehabbing is normally needed. Think of it like this - even if you spend $5,000 or $10,000 to bring your foreclosure property up to rental standards, it’s still a great deal.

The four critical areas to pay attention to when you’re during the walk-through research stage are:

1. Roof2. Structure3. Plumbing4. Electrical

These will be your biggest expenses and all require permits. You need accurate estimates! Next time, we’ll talk about each in more detail.

CW Blogcast 37 - More income property investing myths. May 01, 2013

Just when you thought we were done proving how easy it is to create wealth in real estate through income property investing, we’re back with three more reasons.

Reason #4 – “Realtors are a difficult bunch.”

This is very NOT true when you work with Platinum Properties Investor Network. Our local area managers are real estate agents who LOVE to work with you. If they don’t, we quit sending them business and, believe us, they want our business.

Reason #5 – “I might lose money.”Real estate is way safer than the stock market. It’s funny. The pattern we’ve noticed over more than two decades in this business is, the more you education you get, the less risky real estate is. It’s a calculated risk, one you can control much better than Wall Street.

Reason #6 – “I don’t know what to do.”You don’t need to know it all. You just need to know who to ask. Don’t let analysis paralysis get in the way of the rest of your life. It’s that important! Come to a Platinum Properties Investor Network seminar, then set up an appointment with one of our expert investment counselors and then do it. Pull the trigger. Buy your first property. We’ll hold your hand if needed and advise you every step of the way.

CW Blogcast 36 - Income property investing myths. May 01, 2013

Why aren’t more people investing in income properties when it’s the most lucrative, safest choice in history? Good question. Probably because people would rather watch television than improve their financial condition. Sure, everybody says they want to get rich but what are they actually doing about it besides flapping their gums?

Talking wistfully about something you have taken no action to achieve is called whining. Don’t go into the Green Parrot Bar in Key West with that attitude. It’s an official ‘no sniveling’ zone.

So let’s take a quick peek a some of the more common excuses people use to not get wealthy in real estate.

Reason #1 – “I don’t have enough cash.”Sorry. Not a legitimate reason. Find a great deal and cash will find you. Negotiate the purchase price! Take equity out of your home – it’s losing value by the day in there anyway! Have you looked into the sweet $5,000 down deal Platinum Properties Investor Network has arranged in Atlanta? Next!

Reason #2 – “I don’t have any time.”Sorry. Everybody’s got time. You need to prioritize. We’re talking about your financial future here. Surely, it’s more important than three hours of slumming in front of the television or computer. Toss the kids and spouse in the car on a Saturday afternoon and cruise the neighborhoods looking for ugly houses for sale.

Reason #3 – “Everyone says this stuff doesn’t work.”Everyone? Ask Donald Trump, Jason Hartman, or Steve Wynn. True, you’re probably getting a skewed perception of reality if your primary source of information is late night tv. This stuff does work when you do it right.

To learn how to do real estate the right way, check out www.JasonHartman.com for The Complete Solution For Real Estate Investors™

CW Blogcast 35 - Get serious about on-time rent. Apr 30, 2013

Many contracts say that rent is due on the 1st of each month but the late charge doesn’t kick in until the 10th. So it’s no big deal if the check arrives on the 5th, 6th, or even the 9th. Right? We hate to break the bad news but your leniency on rent is only going to encourage more delinquency. You've heard this before from us - human nature!

Maybe it’s time to get more serious about on-time meaning ON TIME! Here’s an idea crazy enough that it just might work. Don’t give them nine days of wiggle room. If the due date is the 1st, then apply a late charge on the 2nd, and don’t make it a paper tiger. Actually charge it and make them pay it.

This is your livelihood they’re screwing around with.

Tough? You bet, but it works! Of course, you don’t want to sneak this past them during the contract signing phase. Make a big deal about it. Communicate the rules clearly. Have them circle and initial the part of the contract that outlines rent payment dates and give them a separate document to take home.

Take serious and, more importantly, quick action on late payments. No excuses and no negotiations to catch up next Friday. If they say it’s in the mail, ask for a substitute check and send the other one back when it arrives. Another tactic is to have them agree beforehand that you may contact their “emergency” references in the event of a late payment. This is excellent payment stimulation.

Of course, if you invest in income properties the right way, like Jason Hartman and Platinum Properties Investor Network™ recommends, your property manager will be the one dealing with all this. Just make sure he has clear instructions on how to proceed.

CW Blogcast 34 - Too late to be a millionaire mobile park owner? Apr 30, 2013

If you were starting out in real estate investing today, which direction would you go? At Platinum Properties Investor Network™, we believe that income properties are a great way to start, but another alternative to consider is a mobile home park. When we say mobile home, we mean either a traditional trailer or manufactured home.

The voracious demand for affordable housing and financing is likely to keep the demand rising into the future. Some people consider a mobile home park the closest thing you’ll find to a gold mine. So, should you buy every one you come across? Probably not. You’ve got to have some standards but here are reasons we think this is an excellent strategy.

With environmental paranoia running at a fever pitch, it’s getting harder to develop a new park. Think zoning, environmental issues, inspectors – then once you’re ready to throw the gates open, you start out with 100% vacancy.

The positive side of this is it makes existing mobile home parks that much more valuable. Why do we call it a gold mine? First of all, you’ve got an income producing asset already in place while local and national bureaucrats (through excessive regulation) are working tirelessly to prevent any competition to enter the area. Does it get any better than this? Not hardly but you still need to do your proper research. Don’t snap up the first deal to come along. Our expert counselors will be glad to talk to you about the kind of investing that really works. Please call 714-820-4200.

CW Blogcast 33 - Are real estate seminars a rip-off? Apr 29, 2013

Not ALL real estate seminars are a rip-off but you can get taken to the tune of several thousand dollars without getting much actionable material in return if you’re not careful.

Here are a few things to watch out for:

1. Be wary of price extremes. Very cheap or very expensive seminars should be examined closely, although for different reasons. If the event is cheap or free, face it, there will be a hard sell involved. Getting people into a room is expensive, so the promoter has to sell something to make it worthwhile. Conversely, if the seminar is costly, $1,000 per day and up, you should expect follow-up training or substantial materials.

2. How many bodies in the room? If you’re paying $5,000 for a seminar/boot camp, you should expect a small class size. Otherwise, you will not be receiving the individual attention you might expect, and will likely be disappointed.

3. Can the guru teach? As all of us who have sat in a classroom at some point in our lives know, some people are just bad teachers. They may have the knowledge of the universe in their heads, but what good does it do if the class is face-down, snoozing in a pile of drool? Talk to other people who have attended the event or find a way to hear the speaker first. Can you learn from that voice?

Pay attention to the above and, chances are, you’ll pick a great seminar. As an education-oriented company, Platinum Properties Investor Network™ strongly encourages you to attend one of our monthly educational events, Creating Wealth in Today's Economy. Moderator Jason Hartman is both a highly successful income property investor and acclaimed public speaker. To learn more about how you can create abundant wealth in your life through real estate, call one of our expert investment counselors at 714-820-4200.

CW Blogcast 32 - Don't be tempted to buy real estate with cash. Apr 29, 2013

Your broker has turned you on to an incredible income property deal that will cash flow big time from the beginning because it’s already leased long term. You’re so excited you might pass out. There’s cash in the bank to cover the purchase. Pull the trigger?

Not quite that fast.

Despite antiquated conventional wisdom to the contrary, buying a property with cash is not something a savvy investor would do. The problem with buying on a cash basis is that you short circuit the benefit of a beautiful little concept called leverage. Pay attention. This could make a big difference in your life.

Let’s say you bought a property for cash for $100,000. One year later, the value has gone up to $110,000, so you sell it and bank a $10,000 profit on the deal. That works out to a 10% annual profit. Nice but not outstanding.

Now let’s do it using leverage. In this scenario, you put down $10,000 on the deal and finance the other $90,000 through the bank. When you sell it one later for $110,000, you have bumped up your profit to 100%! You reaped the same $10,000 profit on the sale but only had to use $10,000 of your money to do it. The real beauty is you don’t have to tie all your money up in one property. You could buy 10 properties with a $10,000 down payment on each. What if, one year later, they all went up an average of $10,000? That’s one hundred grand, buddy.

Imagine the possibilities.

CW Blogcast 31 - Get off the fence, investors. Apr 28, 2013

If you’re part of the crowd of millions tired of getting slapped around by Wall Street chicanery, it’s only natural to be hesitant about committing more money to alternative investments, especially when you’ve been brainwashed your whole life to believe stocks, bonds, and mutual funds are IT. There is no other investment class.

At Platinum Properties Investor Network™, we’re here to tell you real estate is not an alternative to the stock market. The word “alternative” implies the two concepts are generally on the same playing field when it comes to value.

Wrong!

Real estate, especially income property investing, has proven itself to be history’s best choice to earn the kind of return on your money that can make you independently wealthy. But people have been bitten hard by Wall Street lately and are hesitant to enter the fray. Remember this - real estate is not a boom and bust asset. Think of it as an infinite progression of waves. It’s never going to go away and stay gone. It can’t because one of the basic necessities of life is a shelter.

We can live without computers. We can live without box store discounts on everything under the sun but we can’t live without shelter. Now would be an excellent time to get off the fence and invest in income property. If you’re curious how to get started in this type of investing, go HERE for a free education and to listen toThe Creating Wealth Show with Jason Hartman.

CW Blogcast 30 - Free market? Not so much. Apr 28, 2013

On The Creating Wealth Show with Jason Hartman, recent guest Thomas Woods reflected upon the prevailing conventional wisdom which says the free market has failed, thus intervention by the federal government is necessary to right the ship of economy.

Nothing could be further from the truth. This economy cannot be blamed for the fiscal meltdown because there has been no free market in the United States since the early to mid 1920’s.

Think about it. Can any country which has a central bank manipulating interest rates truly call itself a free market? Our present troubles can be traced to previous fed chairman, Alan Greenspan, who made credit artificially easy and cheap. Woods pointed out that when a country’s monetary authority creates money out of thin air, tampers with the money supply, it tends to lead investors towards massive errors in judgment. People get reckless. It doesn’t help when they come to expect a bailout when their endeavors crash and burn.

The dot com boom of the late 1990’s was a perfect example. Wall Street and venture capitalists were throwing money by the fistfuls at any start up that tacked “com” after their name. A few survived and could actually be called good investments but most are nothing more than digital roadkill.

Something must be amiss. A recent release of the scale of economic freedom showed the US is in danger of falling out of the top 10. And the trend is worsening. China is moving towards freedom while we seem to be running away from it.

Whadya gonna do?

Why not check out our sister website Holistic Survival and learn how to protect the people, places, and profits you care about in uncertain times?

CW Blogcast 29 - Purchasing a property is S-I-M-P-L-E Apr 27, 2013

After the preliminary interview process of discovering the best investment strategy for you, it usually starts with a three way conference between your Platinum Properties Investor Network™ advisor, the local market agent in the area of your choice, and you. This is where we go over the particular properties available and you decide which one you want.

Now it’s time to get you pre-qualified for a loan. Lately, more times than not, we’ve seen clients using a lender in the local area where the property is located. The advantage is that the lender knows the local appraisers, contractors, and inspectors. This choice is not set in stone though. You should feel perfectly free to go with the lender of your choice or ask us to help you find one.

Once you have the pre-qualification letter in hand, the local agent will send you the contract. You read it, sign it, fill out a few auxiliary forms (shouldn’t take more than 20 minutes) and mail it back to the local agent with your earnest money. If you haven’t heard the term before, earnest money is nothing more than a good faith deposit that insures you don’t bail out of the contract at the last minute for a silly reason.

Earnest money ranges from $1,000 to $5,000 on most single family home transactions. At that point, it’s a simple matter of letting the deal take its course. Once your offer is accepted, inspections will be done, title search, etc. When closing day gets here, you sign on the dotted line and celebrate the fact you’re now an income property investor.

CW Blogcast 28 - It costs you nothing to use Platinum Properties Investor Network Apr 27, 2013

The look of incredulity usually pops up somewhere during the middle part of the process. We’ve been helping a client pick out a property, put them in touch with the local market specialist, we're working the phones and e-mail to help find the “deal” they’re looking for.

Then it sinks in. “We really don’t pay you anything for all this work you're doing?” The truth is, no, you really don’t. Which brings up the question of whether or not we’re in the charity business. Definitely not. We make money but not from nickel and diming the client to death.

As Founder and CEO Jason Hartman describes frequently, our business model as a referral service collects a fee from the agent in the local market where you decide to buy a property. Think of it from his point of view. He has a high volume and reliable source of qualified buyers from us. He doesn’t have to advertise locally, work the phones cold calling, or try to drum up business over the Internet. He’s glad to pay our fee for sending him buyers. Makes his life much easier.

An intended side effect of this arrangement is that our local agent is very responsive when a Platinum Properties Investor Network™ person, be it a client or staff member, has a problem. They do not want to do anything to screw up the goose that lays the golden egg. They will bend over backwards to fix the issue. There’s power in numbers and when you use our referral network the numbers have your back.

CW Blogcast 27 - Two little properties safer than one big one? Apr 26, 2013

One of the most frequent questions we get is why we recommend clients initially purchase one or two single family residential units in different geographical areas than a 10 or 20 unit apartment building located (obviously) in one spot.

This is a perfect example of what we mean by diversifying your portfolio and it is VERY important in the beginning of your income property investing career. On a recent edition of The Creating Wealth Show, Jason Hartman recounted an experience from the early days of Platinum Properties Investor Network™. South Carolina had been targeted by us as a great area for income property purchases. We don’t miss the mark very much but in this case the local market didn’t exactly take off as anticipated.

If you had put all your eggs in that particular basket in the form of a 10 unit apartment building, your cash flow situation might not make you happy until the market righted itself. But if you had purchased a single unit residential unit in South Carolina and another in one of our other suggested markets, you’d still be in great shape. The protective portfolio diversity of having properties in separate markets would have saved your bacon.

This also goes to show the value of realizing that there is no national housing market. Real estate, perhaps even more so than politics, is local. One area of the country can be in the tank while another is hotter than fire.

CW Blogcast 26 - Find the bottom of the cycle. Apr 26, 2013

You’re motivated to leave Wall Street investing for good and purchase an income property because, in a recent nightmare, you were visiting Bernie Madoff in prison to see if he had any hedge fund ideas. Good decision. Wall Street - bad. Income property - good. If you've been reading our blog, you already know the Platinum Properties Investor Network criteria for finding a good location.

Is it time to pull the trigger? Not so fast, Dirty Harry. There’s a little thing you should be aware of called timing. Even in the best of real estate markets there are cyclical swings. You want to time your purchase to get in as close to the bottom of the swing as possible. It just makes good sense. Why pay more for a property if you don’t have to? Plus you will be using the potential of leverage to it’s fullest.

Likewise, you want to be aware of the market cycle when it comes time to sell. While we discourage the practice of flipping (transaction costs and taxes can eat up your gains), there will likely come a time to sell your income property. Maybe your ready to do a 1031 Exchange and roll into a larger one. In any case, know where the market cycle is and try not to sell on a downswing. Once again, we’re just using plain sense here to maximize profit.

Wondering how to tell if the local market is swinging up or down? Call 714-820-4200 and ask us. We love to talk about it.

CW Blogcast 25 - Income property investing - find a good spot. Apr 25, 2013

Should you decide to buy a particular income property because it feels right, it’s located next to your favorite bar, or you’re just tired of looking? Umm, the answer to all three would be a loud, “No!” Why would you approach the most important part of the property investing paradigm with a seat-of-the-pants approach?

At Platinum Properties Investor Network, we’ve chunked it down into a standard and highly successful routine. The first thing is still the first thing. Location! Never underestimate the importance of a good location. Look at it from a macro and micro level. To decide whether a local market is one we can recommend, in good conscience, to our clients, we look at the best growth rates as reflected through economic data, diversity of industry, population trends, and other demographics.

Once we find a broad local market worthy of attention, it’s time to roll up the sleeves and start looking under rocks. This is the micro level of our research. We’ll screen to find a local connection – an area manager with knowledge and, more importantly, has already purchased property there and can show us that the numbers work.

Then, and only then, do we send an alert out to our network that an almost guaranteed moneymaker is ripe for purchase. Yes, you could do all this yourself. We just told you how. Or you could put our 20+ years in the industry to work for you for free. Call 714-820-4200.

CW Blogcast 24 - Only invest in assets you control. Apr 25, 2013

Have we pummeled you enough about the head lately regarding investing ONLY in things you control? Probably not, because it seems like there are still a few million crazies out there investing in Wall Street assets. Are they determined to lose their money? Let’s have a pop quiz. Investors who trusted the following people/companies were satisfied with the results – true or false?

A. EnronB. WorldComC. TycoD. HealthSouthE. Bernie Madoff

Our unofficial poll of absolutely no one related to any of these worldwide financial scandals returns a resounding “False!” And these are just recent examples. We could go on for pages but what is the point? Well, ladies and gentlemen, the point is that you are literally taking an extreme gamble when you give your money to a random Wall Street entity.

For example, Tyco was considered a blue chip company prior to the crash and burn to the tune of $450 million. What does this mean to the average investor? No one is innocent and your money is not safe unless you are in direct control of it. The few perpetrators who get busted might spend time in prison (maybe a long time) but that doesn’t help the investor who loses everything and will likely never recover a red cent.

Welcome to Wall Street. Keep both hands on your wallet.

CW Blogcast 23 - Non-dollar-based assets will rock your world. Apr 24, 2013

We’ve been talking a bit lately about how, in our humble opinion, the dollar is poised for a headfirst plummet off a very high cliff. When it does, get ready for the cloud of dust slowly rising up into the sky, just like in the Roadrunner cartoon when Wile E. Coyote makes yet another serious error in judgment.

It doesn’t take much pondering to arrive at the conclusion that a good place to be when the currency crashes is - drum roll please - OUT of that currency. You need hard, tangible assets. Like commodities? Yes, but probably not what you think. Running out to buy gold and silver is better than Wall Street stocks and bonds but you can still do much, much better if you turn to income property investing.

After all, what is a structure on land besides a collection of basic commodities like copper, wood, brick, etc? We call it Packaged Commodity Investing™ and this is one (perhaps the only way) to survive the coming fiat currency implosion with your wealth intact. Can you imagine actually being able to create wealth while others around you, especially those who stayed in stocks, are being turned into paupers overnight?

People will still need a place to sleep at night and you will own the pillows. This is how to position yourself to become wealthy in the future. Own something of real value, like real estate. Companies come and go with frightening regularity off the stock market indices. Terra firma beneath your feet? It’s probably going to stay.

CW Blogcast 22 - Why it's good to be a borrower in inflationary times. Apr 24, 2013

The worst person to be with inflation looming is the bank! The catbird seat is occupied by, you guessed it, the borrower. Why do we say this and are we just full of rotten beans when we do? No. It all comes down to purchasing power and the decreasing real value of the dollar over time.

Here’s a quick, and hopefully clear, example.

Today, in 2009, your banker loans you $1 million dollars to buy income property. From his perspective, your banker could also take that $1 million and buy one million candy bars at a buck apiece. Let’s also say inflation will be 10% the year after the candy bar purchase. This means the real world purchasing power of that $1 million will decrease by 10% during the coming year so that, at the end of 2010, the $1 million in 2009 dollars will only buy about 900,000 candy bars.

The real world result is that the banker loses purchasing power when he lends you money! It’s better to be a borrower because then it’s your mortgage debt that is losing real value as time passes. That's a good thing.

But don’t just run out willy-nilly and borrow for the sake of borrowing. You should only incur good debt attached to income producing property. If more people really understood what a great investment strategy this is, the banks would be in serious trouble.

CW Blogcast 21 - "We are out of money now." Apr 23, 2013

We don’t mean to scare you – well, actually we do. The words above were spoken by President Obama at a recent press conference. Ouch. Does that mean the U.S. economy is a car with a bone dry gasoline tank still rolling slightly from 233 years of inertia?

Maybe.

A better analogy might be the economy is a car with a bone dry gasoline tank still rolling slightly from 233 years of inertia heading off a cliff! What can we, as law-abiding citizens, expect when our government continues to bankrupt itself and devalue our currency? Seriously. The federal government is a Ponzi Scheme that makes Bernie Madoff look like a piker.

Here’s a glimpse into the future after the dollar collapses.

1. An explosion in prices as Americans scramble to buy basic necessities.

2. Sparse grocery shelves and long gas lines.

3. Failed businesses and a breakdown in commerce as long term transactions vanish due to worthless currency.

4. Rampant crime and unemployment.

5. Disappearing government services.

Sound like fun? What can you do to protect your wealth? The simple answer is to own income producing property. It’s the only investment liable to have any value when the fiat currency collapses. The time to act is now. There may still be time before the greenback dies as the major player on the global currency market. But there may be less time than you think. Wall Street is already coming apart at the seams from greed and incompetence. Make it a point to explore history’s best bet when it comes to investing. Platinum Properties Investor Network offers free educational services for any investor interested in weathering the coming storm. Check us out at http://www.JasonHartman.com.

CW Blogcast 20 - Maryland learns a hard lesson in fleecing the rich. Apr 23, 2013

Last year, politicians in Maryland could not figure out how to balance the state budget. As most good public servants do, they thought, “Instead of making tough choices for the amount of money we have, let’s squeeze the wealthy for more because they don’t really deserve it anyway.”

Presto! A brand new millionaire tax bracket was created with a top rate of 6.25%. And if you happened to be a millionaire with the misfortune of living in Baltimore or Bethesda, they’re going to toss more local income taxes on top of that to bring your rate as high as 9.45%.

The always prescient newspaper, The Baltimore Sun, predicted taxpayers would “grin and bear it.” One year later, the pundits and politicos are saying “Oopsie.” One third of millionaires have disappeared from the Maryland tax roles, some of whom moved out of state or re-designated themselves as residents of more tax friendly states where they might own a second home, like Florida, Delaware, or Virginia.

The end result is the state government in Annapolis has $100 million LESS to play with this year, rather than the $106 million additional booty they were counting on. With the millionaire exodus in full force, the burden of paying for bloated government falls squarely on the middle class.

Redistribution. It fails every time it’s tried.

CW Blogcast 19 - Direct control of your investments - exhibit A. Apr 22, 2013

Former NASDQ chairman, Bernie Madoff, will be spending the next 150 years in prison. Since he’s 71 right now, that means he’ll be a free man once again at age 221. Nobody’s feeling too sorry for The Ponzi King right now though. Even his sons refuse to talk to him. The scope and breadth of Madoff’s investment fraud is staggering.

To those who have been following Jason Hartman for any length of time, this really should come as no surprise. Any time you give up direct control of your investments, this could be the result.

We say this often but it bears repeating. When you invest on Wall Street, expect to find one day that:

1. You’re investing with a crook.2. You’re investing with an idiot.3. You’re paying huge management fees.

You might be extraordinarily unlucky and hit the mother lode – an idiotic crook who charges huge management fees. And even though you might think we’re beating this particular drum unnecessarily stridently, think of it like this. It’s your financial life at stake here. It’s your retirement and the economic health of your family for generations to come.

Bernie’s not the first or last schemer to tap into the ignorance of investors. Need a sure fire way to avoid losing everything to scandals like this? Don’t play the same game these pour souls were playing. Don’t turn your nest egg over to pie-in-the-sky promises. Stay in control of your investments. Always know what’s going on with them and, while we strongly suggest having a trusted financial advisor, don’t give them the reins to the stagecoach!

CW Blogcast 18 - Identity theft and finding the right tenant. Apr 22, 2013

It’s no secret identity theft is a booming business. This can have serious impact on you as an income property owner. It’s hard enough to find quality tenants without having to worry about whether they are actually who they say they are. I mean, what better way for chronically deadbeat renters to sneak into your property than claiming a whole new identity?

But don’t worry too much. Most of these characters aren’t the brightest bulbs on the circuit, so a checklist of diligent screening processes can nip most of the miscreants malfeasance in the bud. By spending a few dollars upfront in doing a proper tenant screening, you might avoid thousands in eviction proceedings.

What makes up a proper screening?

Criminal background check – do they have a history of drug use or domestic violence? Might be nice to know that up front.

Rental history – ask to see the previous month’s rent receipt rather than calling the last landlord. A checkered past of frequent moves might be a clue also.

Property managers need to use their natural detective skills and intuition. Look for people using their child’s social security number, a fake ID, fake driver’s license. Cross-check documents. Study pictures for race and age. Get an address history for the past 10 years and study it. These are just a few methods landlords and managers should make standard practice in order to latch onto the best tenants possible.

CW Blogcast 17 - More on the "national" housing market. Apr 21, 2013

Just read a funny analogy about the myth of a US housing market. It went something like this. Coming up with a national housing number is like a weatherman who combines weather conditions in Nome, Alaska and Key West, Florida to arrive at a national average temperature of 45 degrees. While technically correct, this is basically useless information.

So it is with trying to pin down nationwide trends in housing. Real estate markets are notoriously hyper-local. Averages simply have no meaning. As income property investors, we’re very aware of how you must drill down to the neighborhood level, even within good local areas, to begin to see a realistic picture of that particular housing market.

Some experts like to look at housing inventories to try to find the bottom of a decline. Believe it or not, we’re beginning to see some bottoming patterns in certain areas of the Western US. Jason mentioned this is regard to California on a recent Creating Wealth in Today’s Economy show, and we’re pretty sure he wouldn’t go out on that limb unless he was feeling it in his bones.

Tattoo this on your hand: DO NOT BUY IN CALIFORNIA. We’ll let you know if and when any local markets in Cali become good buys again. For now, let’s just watch and wait from an academic point of view as this turnaround transpires. Assuming, of course, the entire state doesn’t go bankrupt and de-rail everything.

CW Blogcast 16 - Jason loves his new iPhone application. Apr 21, 2013

The truth is Jason not only loves his iPhone but he really loves the fact that there is now a Property Tracker application to run on it. Longtime listeners have heard of Property Tracker before. It is Platinum Properties Investor Network’s software of choice for small to medium size income property investors.

We didn’t invent the thing but we sure do love it, especially now that it has been implemented to work with the swanky new iPhone. Simply put, this is the most powerful real estate analysis tool available for the iPhone. In real life terms, it means you don’t have to break out your laptop when you’re out running around comparing properties for your next portfolio purchase.

That’s right. Pull out this pocket-sized device, input the property information in four easy steps and you’re ready to go. Look at the first-year projection if you’re into flipping. Check out the multi-year projection if you want to buy and hold.

What else can you do?

• locate the property using Google Maps• Take a photo and store it with the property• E-mail a PDF file to clients or investment partners

The iPhone with Property Tracker is a serious tool that, once you try it, you won’t believe how you ever lived without it. It’s that good. You can find more information about the software in general and the iPhone application in particular at www.propertytracker.com.

CW Blogcast 15 - Don't get hit by the shrapnel of the "fatal conceit". Apr 20, 2013

The "fatal conceit" is an idea coined by Friedrich Hayek. It simply means that central planners working for the government tend to miraculously consider themselves free from sin and error. Nowhere is this more evident than in watching the present gang of do-gooders try to borrow their way out of a mess created primarily by, you guessed it, debt.

So while names like Obama, Bernanke, and Geithner fervently believe they can do a better job distributing capital than the free market, we occupy ringside seats at the circus and marvel at the size of reality blinders men like this must be wearing.

But how does an average, everyday Joe Citizen keep from getting hit by the economic shrapnel created by these financial sub-morons? If you want to get ahead despite their idiot machinations, you better start looking for an investment strategy that can profit from inflation. Profit from inflation? What kind of crazy talk is that?

Actually, it’s the kind of crazy talk that makes sense in today’s economy. Income property investing. Not just any kind of income property investing but the kind based on maintaining high levels of prudent debt so that you actually benefit from rising inflation. If there’s one thing you can rely on, it’s the fact that central planners do not know how to hold inflation in check for long. Now’s the time to position yourself for that day when the cat gets out of the bag yet again.

CW Blogcast 14 - Two stages of wealth creation. Apr 20, 2013

Buying real estate for investment purposes can seem like a big chunk of information to digest if you look at it all at once. Let’s break it down into more manageable bites. The simplest part is Stage 1. During this time your primary focus is to stock up on debt. You want lots and lots of debt attached to high-quality, fixed-rate, long-term, investment grade debt.

More specifically, you want this debt attached to packaged commodities, basic materials that are in high demand when used to construct structures like houses and apartment buildings. You want lots of this kind of debt because, when you invest in real estate the right way, debt is your asset. Debt is what will protect you from the ravages of inflation and, by the way, make you very wealthy as time goes by.

Now it’s time to enjoy increasing rents, appreciation, tax savings, and let our “Refi ‘Til Ya Die” strategy make you financially free. This part is Stage Two. See how simple this income property investing really is?When you buy real estate, the cost of the commodities used to build the structure is locked in until the house falls down. This could be 60 years or more. In the meantime, you’re refinancing every seven years and pulling out large chunks of equity from your investments. Let it replace your working income while you buy more real estate!

CW Blogcast 13 - The Reluctant Investor's Lament. Apr 19, 2013

Jason likes to close the monthly Creating Wealth in Today’s Economy seminar with a poem called The Reluctant Investor’s Lament. It was written in 1977, but still packs a wallop of powerful thoughts. Below is an abridged version for your reading pleasure.

“I hesitate to make a list, of all the countless deals I’ve missed;Bonanzas that were in my grip, I watched them through my fingers slip;

The windfalls which I should have bought, were lost because I over thoughtI thought of this, I thought of that, I could have sworn I smelled a rat;

And while I thought things over twice, another grabbed them at the price;It seems I always hesitate, then make up my mind when it’s much too late;

A very cautious man am I, and that is why I never buy;

When Tucson was cheap desert land, I could’ve had a heap of sand;When Phoenix was the place to buy, I thought the climate was much too dry;

“Invest in Dallas – That’s the spot!” But my sixth sense warned me I should not.The golden chances I had then, are lost and will not come again.

Today I cannot be enticed, for in 1977 everything is so overpriced.The deals of yesteryear are dead, the market’s soft and so’s my head.

At times a teardrop drowns my eye, for the deals I had but did not buy;And now life’s saddest words I pen, If only I’d invested then!"

Now get out there and pull the trigger on a deal!

CW Blogcast 12 - The easy way to get a loan modification. Apr 19, 2013

Every once in a while you hear a story that makes you go, “Hmm, how DOES something like that even happen?” It all goes back to the secondary mortgage market and the practice of banks and Wall Street firms buying and selling pools of mortgages – one loan was sold 39 times, according to Kim Nguyen, an acquaintance of Jason’s who practices law in southern California.

Nguyen recounted how he represented a client over a $650,000.00 loan that was being refinanced but ended up in foreclosure court. One of the regulations is the plaintiff must produce the original loan documents. Apparently, this mortgage had been shuttled between buyers so much they couldn’t find the original documents.

Guess what happens when a bank can’t prove in court they are the actual holder of the note? In this case, the judge waived the entire loan! Just like that, there was no more need to refinance because the loan didn’t exist anymore.

Can’t find the loan documents? Doesn’t inspire a lot of faith in the secondary mortgage (vulture) market system. Do stories like this make a difference in the practice? Not likely but one family left court very happy that day.

CW Blogcast 11 - Owners, make your property manager happy. Apr 18, 2013

You’ve bought your first income property and have a property manager in place. You can’t just turn off your cell phone and take a year-long yacht cruise to the South Pacific. There are some responsibilities you, the owner, still have. Here’s a quick list.

1. Interview the property manager BEFORE executing final purchase contract to discuss reasonable rental rates for that particular area and property.

2. Sign the property management agreement.

3. Discuss the marketing program with property manager and authorize any leasing concessions you are prepared to make.

4. Pay advertising, utilities, and other miscellaneous expenses until leased.

5. Review and approve repairs requested by property manager.

6. Don’t be a pest. Calling more than once a week places you in that category unless there are unusual circumstances.

7. Don’t go crazy placing restrictions on tenants. That’s an excellent way to insure your property stays empty longer and you miss out on a good renter. Of course, no one is ever going to be quite good enough. Get over it. You want that rent money, don’t you?

That’s not too hard, is it? Probably the best job you’ll ever have because it leaves plenty of time to ferret out even more great deals using Platinum Properties Investor Network’s proven strategies for creating wealth. Yes, this stuff really does work.

CW Blogcast 10 - They're melting in California Apr 18, 2013

As a California-based business, we offer the following commentary and wonder, “Why are we still here?”

Yes, it’s warm in California but we’re talking about a different kind of melting. On June 10, 2009, California Controller John Chiang had this to say about the Golden State’s economic future. “Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government.”

This could get ugly, folks. Unlike the federal government, California doesn’t have the option of printing its own fiat currency to postpone doomsday.

The big problem is there simply is not enough coming in over the transom from tax receipts to even begin straightening things up. Want to hear some real numbers? There has been a 39% drop in personal income tax receipts since last year. Add to that a 52% drop in corporate tax receipts and an 8% drop in sales tax receipts. These are some serious numbers.

What do you do? Leave the state seems to be the unanimous decision among many. One thing is for sure – we track and recommend income properties for investing in almost 40 local markets around the country. California will NOT be going on our good list any time soon.

CW Blogcast 9 - Income property arbitrage Apr 17, 2013

Let’s define arbitrage. Arbitrage is when an investor profits by exploiting small price differences between similar (or identical) financial instruments. Arbitrage occurs because of pricing inefficiencies in a market. These small price blips can add up to big money for the shrewd investor. Think George Soros – he made his fortune in the margins of the currency market.

But we don’t care about George. We’re here to talk about Double Inflation Arbitrage in the income property market. Here’s how that works.

You walk up to the bank and say, “Bank, I have proposition. I’m going to put down 20% of the purchase price for this property and you’re going to loan me the rest.” If you have a good credit record, there’s a fair chance they’ll say, “Okay.”

But now you’re left with the loan debt that must be paid back. Yes, real life can be irritating like that. But then you get the bright idea to rent your property out so that the tenant is the one actually paying the carrying costs of the mortgage, while that mortgage is losing real value from inflation. Bad for the bank. Good for your. That’s your first inflation benefit.

It gets even better. Historically, assets like properties have appreciated faster than the rate of inflation. Whammo, you’re benefiting from this also. Double Inflation Arbitrage. This is no fantasy. It works in real life. Use it to create life-changing wealth.

CW Blogcast 8 - How do WE make money? Apr 17, 2013

Maybe it’s been nibbling at the back of your brain – how do these people at Platinum Properties Investor Network make money anyway? They seem to be giving all the good information for free. We do give away a lot. It’s part of the business model. The first thing to understand is we’re not a traditional real estate company. Our focus is teaching people to invest the right way and then offering them quality opportunities via recommendations through our network.

Obviously, we make money through our own income property investments. We don’t just talk the talk. We’re out there buying the same properties in the same markets that you are. The process is an education in itself, an education which we gladly make available to you through podcasts, e-books, and our expert investment counselors.

We don’t make a lot of money when you buy one property. Like a restaurant, we rely on repeat business. To earn that repeat business, we do everything we can think of to make it so you’ll always want to buy your properties through us. It’s a symbiotic relationship. You make money, we make money, and the greatest form of investing ever invented, income property, keeps right on working.

At Platinum Properties Investor Network, we can show you how to expect 30% annual returns on your money. We figure that’s a pretty good reason to want to do business with us.

CW Blogcast 7 - What exactly does a property manager do? Apr 16, 2013

As you may know, we are BIG fans of property managers. The small percentage of monthly rent diverted to their wallets for services rendered could very well save you an aneurysm from handling tenant complaints. Trust us, whether you live next door to your investment or across the country, you DO want a good property manager.

What sorts of tasks will a property manager take off your plate? Here’s a quick overview.

1. Conduct property inspections and/or final walk though with builder.2. Advertise for tenants and conduct showings.3. Pre-screen applicants and present prospective tenants to owner.4. Coordinate vendors to prepare for tenants moving in.5. Turn on utilities for showings and transfer to tenant upon lease.6. Complete leasing agreement with tenant.7. Accept security deposits and hold in trust account for owner.8. Collect rent and provide check and statement to owner.9. Conduct property inspections as needed on behalf of owner.10. Schedule and monitor authorized repairs.11. Complete eviction process when necessary.

This is an incomplete list of the primary responsibilities of a property manager. In the real world, a good one will be worth his weight in gold. They are your eyes, ears, and caretaker of your investment. At Platinum Properties Investor Network, we can recommend excellent property managers who we have worked with and trust to manage our own properties. We’re real estate investors too, remember?

CW Blogcast 6 - A definition of "investment." Apr 16, 2013

You see the word “investment” tossed around quite often within these posts but what do we really mean when we refer to an investment? You likely have (correctly) ascertained we don’t consider anything sold on the Wall Street exchange an investment. Ditto for NASDAQ. Double ditto for treasuries or CD’s.

But what is an investment and why do we define it as that? Anything that does not produce income or rent is only speculation. Investing is not about speculation or gambling and it is not a get-rich-quick scheme. Do it the right way, like we teach at Platinum Properties Investor Network, and it’s almost guaranteed you won’t get rich quick – but the odds of you getting rich at all are much better.

What does “quick” mean anyway? Is seven years too long to wait to be able to quit working and live off the proceeds of your income property portfolio? Most people have enough equity resting in their home that could be put to work and to create a yearly income of nearly $67,000 within seven years. How many people do you know who have done that with stocks?

It’s not a sure bet but it’s the surest one in history. Look it up. If you’re putting your hard earned money into any other asset, you’re fighting history. Why do that? History almost always wins because, more times than not, it’s one big circle that always comes back around to repeat itself.

CW Blogcast 5 - Ditch the dollar during temporary deflation Apr 15, 2013

While it is our fervent belief that “inflationary times, they are a comin’ back”, there’s no denying that we are in a period of deflation right now. What does that mean? Prices are a little lower and the dollar is a little stronger. While this market condition might wander along for a couple of years, don’t kid yourself. It’s just the calm before the coming inflationary storm.

Is it time to sing praises to the economic geniuses guiding federal fiscal policy? No. Is it time to put on your happy hat because the Obama policy of hope has finally paid off? Not quite. Now is the time, while the dollar is still showing signs of life, to roll up your sleeves and get to work ditching dollar-based assets like home equity, stocks, savings accounts. There are probably readers out there replacing pacemaker batteries about now. Ditch your savings? Why, for heaven’s sake?

Because when inflation returns all those types of assets will be depreciating at about 10% per year due solely to inflation. For every $1,000 you have stuffed in the sorts of assets mentioned, you’re going to lose $100 in purchasing power each and every year.

How do you avoid this revolting development? Like we said, get out of the bad stuff and into income property investing. Use your money to leverage real estate loans and let the banker be the one to get flattened by inflation. From behind our crystal ball, this is the ONLY way to create wealth in the future.

CW Blogcast 4 - Does your property make sense or is it the village idiot? Apr 14, 2013

One of Jason’s favorite concepts regarding the search for suitable investment property is does it make sense the day you buy it? What exactly does he mean by this? It all relates to the idea of sustainable investing. By sustainable we mean that the metrics of the deal will insure the property can sustain itself through rental income cash flow and you won’t be forced to sell it at the wrong time.

The main reason people get themselves into trouble with real estate investing is they bought on speculation a property that never made financial sense and was a ticking time bomb waiting to go off from day one.

Why would you speculate when it’s so easy to determine if a particular property makes sense or not. The number one metric to look at is the Rent-To-Value (RV) ratio. In other words, compare the value of the property to the monthly rental income potential. The ideal RV ratio is .7 %. 5% is acceptable but 7% is better. It only takes simple math to figure out that the $200,000 property you’re pining for needs to generate $1,400 per month in rent to keep you out of trouble. If it doesn’t, don’t waste another moment thinking about buying it.

There’s plenty of property out there. Find another one.

If you knew nothing else about income property investing except how to use the RV ratio properly, you’d be head and shoulders above the majority of investors who take a blind swing at real estate.

CW Blogcast 3 - China needs concrete. You get rich. Apr 04, 2013

Did you know that house or apartment building sitting on your property is a packaged commodity? Think about it. What is a structure except a compilation of commodities like copper, wood, steel…and concrete. Low tech sticks and bricks, if you will, that contribute to how expensive or how cheap the price tag is. Despite frequent appearances to the contrary, the value of a property isn’t just a number plucked out of thin air. There are very simple forces at work behind the scenes driving the bus.

First, let’s realize that the overall value of a property should be divided into two components. There’s the land, and then there’s the improvement or structure. As prices rise these days, almost the entire gain is due to the rising prices of the basic commodities used to build the house.

Why are the prices rising? Because millions of Chinese families are reaching middle class status. Homes must be built because they have money to pay for them. When China needs more concrete, the demand drives the price higher for everyone else. Basic law of supply and demand.

Do you think China will suddenly decide to opt out of modern civilization? Probably not. Demand will only continue to increase. If you know the concept of packaged commodities is going to keep property values going up, what should you do?

Don’t know about you but we’re going to be buying rental properties.

CW Blogcast 2 - How does inflation devour debt? Apr 03, 2013

It seems counter-intuitive and the idea that debt is GREAT for the real estate investor is one of the hardest ideas to communicate to property investors who show up on our doorstep eager to learn the right way to invest in real estate.

There are plenty of wrong ways. Paying off your mortgage quickly is one of the worst ways! Please believe us when we say this. It’s much better to put as little of your own money into the property as possible and try to stretch that note out to 30 years or longer if you can. This is how you make your banker take the majority of the risk.

But exactly how does correctly structured debt get paid down by inflation?

First you should understand the idea of “real” value versus “nominal value. Nominal means that a one hundred dollar bill from 1950 and a one hundred dollar bill from 2009 are essentially the same. There might be a few minor cosmetic changes but, in the absence of inflation, you could (theoretically) go to sleep in 1950 with your hundred dollar bill, then wake up 59 years later and the buying power would be the same. You could buy the same amount of stuff now as then

But inflation rears its ugly head and devalues your money so that your 2009 spending spree with that Benjamin Franklin comes to a screeching stop very darn fast. Take that idea and spin it around. While inflation is bad for you if you hold cash, it actually works in your favor if you’re a borrower. In nominal terms, your loan balance is the same in 10 years as it is now. But in real terms, inflation has devalued the balance to the detriment of the banker and the benefit of you!

Rest now. We’ll talk more about it later.

CW Blogcast 1- Invest Like Jason's Mom Apr 03, 2013

Real estate investing is in Jason’s blood. His mom has been doing it a long time and recently retired with 13 properties owned free and clear (paid off). The properties are worth about $7 million and the rental income adds up to about $220,000 annually. At this point she has several options but let’s pretend like she has decided to take the equity out and invest it.

She could toss it into “safe” CD’s or mutual funds and, even if they returned 5% a year, she would earn $350,000. Not so fast! Got to pay taxes on that, which will be a mighty big chunk in that income bracket.

What else could she do? Hmm, what else COULD she do?

If she were to ask her son, who’s done pretty well for himself with a few innovative strategies, he might say, “Mom, haven’t you been paying attention? Refi ‘til ya die!” What this means is get that equity out of those 13 properties, where it’s wasting away with a chronic case of inflationitis, and use maximum prudent leverage to put it to work increasing her portfolio even more.

“But, I’m retired,” Mom might say, “and that sounds suspiciously like work.”

Nonsense. She’s still retired. Sign her name on a few forms, put property management in place, stay retired but keep building wealth with an automatic ATM running in the background we like to call real estate investing the right way. Come on, Mom. It’s Jason’s inheritance. Let’s make it a big one.

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