Defaulting Homeowners: Fannie Mae Gets Tough Finally

Fannie Mae is taking some strategic mortgage defaults’ to the wood shed and it’s probably about time. What’s next in this volatile market?

Defaulting homeowners are getting more than a slap on the wrist from Fannie Mae.

Fannie is taking them to the wood shed, so to speak and it is probably about time.

Borrowers who are walking away and could have paid the mortgage will be held accountable for their actions.

Punishment:  They won’t be able to get future insured mortgages.

Get tough politics? Common sense, if you’re asking.

However, another sticky point arises.  How can the government really determine who could have paid vs who didn’t?

It gets curiouser and curiouser as Alice would have said.

Read Fannie Mae get tough on ‘strategic mortgage defaults’

Sales Tax on Real Estate Sales? Say It Isn’t So!

There is a rumor being reported by the Washington Post that there will be a sales tax on real estate sales beginning in 2013. We hope this isn’t true, but with the craziness epidemic it probably is.

There is a rumor being reported by the Washington Post that there will be a sales tax on real estate sales beginning in 2013.

Of course, those of us worth  less than $200,000 don’t have a thing to supposedly be worried about.   Those of us over $200,000 do have something to worry about.

So what’s happening?

The money will be going for the new ever so complicated health care system.   And it isn’t being called a sales tax, you see.  It is really a Medicare tax, as if that will make any difference to the taxpayer. 

I just love this quote:

“Of course, the Washington area has experienced dramatic appreciation in real estate (at least in recent years), so some homeowners may be hit with this new tax. But the large profit that has been made should offset the nominal tax that has to be paid.”

Funny, how some people believe taxes can be offset.  It’s also funny how property taxes that we’re paying in Davidson County, TN  have not been off set.  They’re coming straight out of our profits.

Anyway, read Fact or fiction? The health-care law and real estate tax

Landlord Is Allegedly Almost Killed By Tenant with Horns

Tenant with horns almost runs over landlord. Bad tenants are out there and here are ways we can protect ourselves.

A Tulsa landlord was in danger of being almost allegedly killed by a tenant.  This tenant is easy to spot because he has cosmetically altered devil horns on his head, according to the news source The Smoking Gun.

Note: I’m not making this up. 

This has been a difficult year for all of us and I don’t have to remind us to be careful when renting out our properties.  Needless to say this is one of the strangest cases I have come across.  The lesson here is not to get someone like this tenant with horns mad at you. 

Read Smoking Gun Tenant with Horns

 In recent days, I have emphasized proper due diligence.  Your prospective tenants need to be truthful while filling out your applications.  Also, you want to make sure the person has enough take home income to pay the rent.  Translation: That is the income they actually pocket.  Robert Shemin is very big on that point in his excellent book Secrets of a Millionarie Landlord.

It absolutely amazes me concerning some of the stories I have had to listen to while interviewing prospective tenants this summer.  Some credit summaries are so bad they’re almost unbelievable. 

We have also had people who have tried to sneak in without filling out our paperwork.  The economy is not good  right now and some people are getting desperate, but that doesn’t mean you have to take in anything the cat drags in.  You still need to conduct your business like a business.

You need to stay on top of what is going on with your properties.  This almost Tulsa tragedy is a good example.

Note: I debated about showing you the picture of the tenant featured on Smoking Gun and decided not to.  Just go to Smoking Gun and see it.

Why We Invest In Real Estate

The Bernie Madoff book, Too Good to Be True gives an answer on why we invest in real estate. Madoff could not get to our money.

Why do we invest in real estate?

Why do we work as landlords guarding and caring for our properties?

Why do we put up with all the problems such as getting rid of bad tenants, keeping deadbeats out, complaining tenants and floods?

Why do we keep on persevering  even in spite of having a bad year like 2010?

Recently, I read the fascinating bestseller Bernie Madoff book, Too Good To Be True by Erin Arvedlund.

I mention it because it is an excellent  step by step guide on how to lose your fortune.

But I’ll summarize.   Some very smart wealthy people broke the first rule of investing.  They handed their golden eggs and geese over to a fox thief.

So what does that have to do with our real estate investing? Continue reading “Why We Invest In Real Estate”