The Creating Wealth Show Blogcast

Latest Episodes:

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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

Show notes

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.

Our TOPPODCAST Picks

Follow Us

Stay Connected

The Creating Wealth Show Blogcast

Related Podcasts

Links

Stay Connected