The Death of Real Estate Investing, by Susan Lassiter-Lyons

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Some Follow-Up Comments to a Brilliant Blog Post By Susan Lassiter-Lyons

Attention Ben Bernanke and the U.S. Treasury:  In a recent blog post called The Death of Real Estate Investing, Susan Lassiter-Lyons has brought up a very important issue.Unless the Fed and the Treasury develops some sort of financing mechanism to help investors and speculators buy real estate using high-leverage mortgage financing at favorable rates, this meltdown in real estate values is going to continue. And its not inflation that keeps Ben Bernanke up at night ... its crushing deflation.In my recent book, The Reverse Multiplier Effect - When Crushing Deflation Destroys America, our banks get scared and stop lending.  Over a trillion dollars in annual payments on existing loans kept flowing back to the banks, but the banks stopped rolling over their interest receipts into new loans.Since the multiplier effect today is around 20, and since the multiplier effect works in reverse, the money supply of the United States started to disappear.  Homes fell over 70% in value, and the banks started foreclosing on most of the homes in the United States.Well, folks, I fear the scenario that I described in my book may be coming true.  The book was written in early 2007, when gas prices were $2 per gallon.  I predicted $6  gas and a complete real estate estate meltdown, even more dire than that of today, by the year 2010.Fortunately Ben Bernanke and the Fed are very aware of the dangers of deflation.  By propping up Citibank, Countrywide, Bear Stearns, and now Fannie Mae and Freddie Mac, Ben Bernanke has done a masterful job of preserving our institutions.  We are probably in a great depression right now, and Americans will probably have to endure a precipitous decline in their standard of living over the next 15 years.  Ben Bernanke can only do so much.But Mr. Bernanke, if you're out there, please pay attention to Susan Lassiter-Lyons brilliant blog post.  If you want to save your banks by stopping the decline in real estate values, the country will need non-owner and commercial financing.  It's wealthy investors who have the incentive and the courage to buy foreclosed properties in a declining market.  It is these wealthy investors who have the dough to make timely payments on these new mortgages.  They just need some leverage and a reasonable interest rate. 9 application/xml false Death of Real Estate Investing George Blackburne Susan Lassiter-Lyons The Death of Real Estate Investing, by Susan Lassiter-Lyons Check out Susan's outstanding article. http://mortgagesecretsbook.com/blog/the-death-of-real-estate-investing/ Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0) 127.0.0.1 127.0.0.1 johngaudio 67.190.87.246 false true false false true 198508 false false true false false false true 209025 Resource 198508 173239 78860 1216046658514 1216078986135 Controlled The Death of Real Estate Investing

Questions

Where can we get a copy of the book?  and why do you predict a 15 year turn around?  That seems very excessive.  Also,  I would love to hear any comments you have on the current state of our industry and or why with default rates still at or below 1.5% on CMBS loans (accounding to an article in Commercial Mortgage Insight) we are so affected by the subprime industry meltdown.  10 application/xml false Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 6.0; Comcast Install 1.0; SLCC1; .NET CLR 2.0.50727; Media Center PC 5.0; .NET CLR 3.0.04506; .NET CLR 1.1.4322) 127.0.0.1 127.0.0.1 68.60.62.153 false true false false true 209339 Resource 198508 173239 78860 1216413405311 1216652711619 Controlled Is it Really That Bad, George?

On my bookshelf I see "The Great Depression of 1990" by Dr. Ravi Batra, Copyright 1985. Isn't this perceived crisis just the latest in a long series of misperceived crises over the last twenty five years?

by John GaudioAccording to <a title="Bits of " href="http://www.finaxyz.com/adages.htm" target="_blank">Finaxyz</a>,'Economists are good at predicting recessions. They've predicted eight of the last three.  -- there is no shortage of "professional" cynics all to trigger-happy to forecast doom and gloom.'I sometimes think the markets are more contests of popularity and popular opinion than anything else.  We succeed as individuals because we choose to succeed.  When we believe there is no hope, we stop trying, and when we stop trying, we fail.Tell me, George, and anyone else who has a good answer, what can we as individuals and private organizations do to succeed and prosper in this market?  I wasn't ready to throw in the towel in 1985, and I'm not ready to do it today!  10 application/xml false Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0) 127.0.0.1 127.0.0.1 johngaudio 67.190.87.246 false true false false true 209343 Resource 198508 173239 78860 1216416722042 1216652651143 Controlled "Americans will probably have to endure a precipitous decline in their standard of living over the next 15 years..."

George:While I agree with all your points on the incentives required to turn this mess around, there's no data to suggest the standards of living for Americans will fall sharply. In fact, the only evidence I could find indicates precisely the opposite is likely even during serious financial debacles such as the last round of bank failures (the 80's) and even the great depression. As great as that depression was, living standards actually improved - there were fewer homicides in the 20 years spanning before and after the depression, fewer infant deaths per capita, and a far higher ratio of high school and college graduates per capita. Medical care, life span, transportation, personal savings, and wealth accumulation are up every decade since the turn of the first millennium.While your financial points are probably spot on, you need not attempt to scare me with misleading claims about living standards; it undermines your point. Besides, you had me at "Unless the Fed and the Treasury develops some sort of financing mechanism to help investors and speculators buy real estate ...". ;-)But I digress - isn't all the fuss about bank failures being blown a little out of perspective? In the 80's (I think) we had more than 500 banks fail in one year, and more than 1750 were on the edge. How many banks is the Fed showing in the "likely to fail" category this year and next?  I heard it was no more than 200 [tops] for the next two years. This is a very small fraction of the almost 10,000 banks that are insured under the FDIC. And, doesn't a normal year have 30 to 50 failed banks? I'd love to see a post that compares the 80's bank failures to the current "crisis". Is it really as bad as everyone says, is it worse, or is it more political and media hype? I'm no financial genius, but the data indicates (as usual) that much of the problem is media hype.I digress further - all of our investments are real estate (at the moment), and things (from my perspective) are pretty rosy. Our home is up an average of 18% per year for the last 10 years and more than 21% this year. All our condo holdings are in the 25% plus category for the last five years. As such, we're planning on more real investments, not less. Am I ignorant, or just pleasantly dumb? ;-)Love your blog... but I also love <a href="http://books.google.com/books?id=LkQPOSXMUscC&dq=freakonomics&pg=PP1&ots=4oMlD1osGX&sig=--FS4ipIT4g3DhIeAipCgDRRrBA&hl=en&sa=X&oi=book_result&resnum=1&ct=result">Freakonomics</a>. 10 application/xml false Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0) 127.0.0.1 127.0.0.1 johngaudio 67.190.87.246 false true false false true 209438 Resource 198508 173239 1071 1216650292496 1216676904703 Controlled Book Availability for George Blackburne's Reverse Multiplier Effect

Reverse Multiplier Effect is available at Amazon.com.

I've seen George's book on Amazon: Paperback<a title="George Blackburne's Reverse Multiplier Effect is available in paperback." href="http://www.amazon.com/Reverse-Multiplier-Effect-Crushing-Deflation/dp/0615175392/ref=sr_1_1?ie=UTF8&s=books&qid=1216653946&sr=8-1">http://www.amazon.com/Reverse-Multiplier-Effect-Crushing-Deflation/dp/0615175392/ref=sr_1_1?ie=UTF8&s=books&qid=1216653946&sr=8-1</a> </a />Digital<a title="George Blackburne's Reverse Multiplier Effect can be downloaded as well." href="http://www.amazon.com/Reverse-Multiplier-Effect-Crushing-Deflation/dp/B0014W6QT2/ref=sr_1_2?ie=UTF8&s=books&qid=1216653946&sr=8-2" target="_blank">http://www.amazon.com/Reverse-Multiplier-Effect-Crushing-Deflation/dp/B0014W6QT2/ref=sr_1_2?ie=UTF8&s=books&qid=1216653946&sr=8-2 </a> It's a pretty good read. Fast to get through, and will leave you wondering whether you should buy that next latte or sink the money into your mortgage. 10 application/xml false George Blackburne Reverse Multiplier Effect Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0) 127.0.0.1 127.0.0.1 johngaudio 67.190.87.246 false true false false true 209536 Resource 198508 173239 173239 1216777840236 1216777840236 Controlled hard money lending

First of all I want to make sure that you're all familiar with the term Hard Money. <div>Hard Money is Money Loaned to you by private investors, these private investors can be from anywhere but normally the Hard Money lenders would want to work within their own state, so if you're from California than you want to find an investor in California. </div><div>So what type of Hard money loans the Hard Money Lenders will do?</div><div> </div><div>The First type of Hard Money Loans lenders are offering is Construction Hard Money Loan.</div><div>In construction Hard Money Loan the Hard Money Lender will loan the borrower the money in stages, example: You own a land in Los Angeles California, on that Land you want to build a house, you have the Plans approved by the city of Los Angeles and you're all ready to go, now you need a Hard Money Loan because it will be easier to qualify and get the money you need for the construction.</div><div>You will call a Hard Money Lender and give your information, the approved plans, your financials, your budgets for the construction(you can get it from your contractor), then lets say the Hard money Lender agrees to Loan you the money you need, but the way the Hard Money Lender will Loan you the money is by stages, and the stages are:</div><div>When your Contractor will finish the foundation, the contractor will get paid after inspection that is done by the Hard Money Lender $10,000 for the foundation work. Than when your electrician finishes the electricity in the house, than the electrician will get paid after inspection done by the Hard Money Lender another $7000.</div><div>You understand the concept?</div><div>Everybody by the completion of the construction will get paid by the Hard Money Lender.</div><div>Why the Hard Money Lender do that?</div><div>Because he want to have control of the money, private investors know the risks they're taking but they're still willing to take these risks only if they have 100% control of the money.<script></script> </div><div> </div><div>Why Hard Money Lender will choose to Loan money to Investors and not Homeowners?</div><div> </div><div>This is a very good question that a lot of people should know the answer for.</div><div>The Hard money Lenders wouldn't want to have to take a homeowner out from his home because he didn't make the payments, but with investors it's different, it's 100% business and that's what the Hard money Lenders want- Business.</div><div>What type of properties Hard money Lenders will Loan money on?</div><div>A Hard money Lender will Loan money to many type of properties: Single Family Residents, Condos, Townhouses, Apartment Buildings, Hotels, Motels, Office Buildings, Shopping Centers and many others.</div><div>What hard money Lenders don't like, it's Land. It will be very hard to find a Hard Money Lender that will Loan you money on a Land, and the reason is because there is no income to Lands, maybe you can get a Hard money Loan on a Golf Course or maybe a Land that you about to develop something on, but raw Land- Forget about it.</div><div>Today Hard money Lenders Loan more money to Commercial Real Estate investors rather then to residential investors and the reason is Less risk.</div><div>Today the Residential market is not going up, Values of Homes are actually going down by more than 30%, and every day more foreclosures are coming out on the market, so the Hard money Lenders are smart enough not to participate in taking risks with homeowners.</div><div>Commercial Real Estate is still very competitive, investors are still buying properties, remodel properties and build new properties.</div><div>The Commercial Real Estate market is still alive just like it was in the residential market 3 years ago, and Hard money Lenders are still in the game, and now they're busy more than ever because the Banks don't Loan money that easy to borrowers.</div><div>So it's Commercial Properties rather than residential properties, and Construction Loans.</div><script></script><div>Good Luck</div> 10 application/xml true Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1; Mozilla/4.0 (compatible; MSIE 6.0; Windows NT 5.1; SV1) ) 127.0.0.1 127.0.0.1 76.93.89.11 false true false false true 78777 blog blogsite/CLoans/web