**INCREDIBLE**

So you’re sick of the cash out refinancing?  So am I.  While it’s certainly worth it to utilize the bank’s money in these projects, it’s not always a fun process.  Our new construction financing program will blow you away.

Our new program is based on 80% of the END value and will be available up front.  I have 2 commercial banks that will allow you to finance my projects this way.  This program is limited to our projects.  Here are some details from one of the banks.  The loan functions like a construction loan and will provide your funds for rehab up front in the form of an escrow account.

It has taken me 10 years to establish the credibility to provide this program, but we have it in place, not only with one bank, but 2.  I couldn’t be more thrilled!!!

First Choice Bank (Cash Out Refinances) - 630-845-0500 Joe Cantu
Algood Mortgage (Cash Out Refinances) - 630-330-8000 Scott Algood
Earthmover Credit Union (No Cost Home Equity) - 630-966-2307 Stephanie Thompson
Park National (Home Equity Loans to 90%) - 847-428-3636 Jenny Wagner
Citizens Bank (Home Equity Loans 80 - 90%) - 630-585-9900 Althea Fogarty

The following contacts can be very helpful with refinancing investment property!

As you know, we’re always looking for new ideas to help our clients to build equity and wealth as quickly as possible. One of our fellow investors and licensees has uncovered an opportunity that can do so on our primary and investment residences. The software that he utilizes through a company called United First Financial has cut his time to pay down his primary mortgage and be debt free from 27 to 8.2 years. He will also save over $210,000 in interest by doing so.

Most importantly, he didn’t have to refinance his mortgage, his monthly payment didn’t change, and his household budget didn’t change at all. Sound too good to be true? He thought so too until he put the software to work for him last year and the results have been amazing!

We’ve attached a recent article published in Personal Real Estate Investor Magazine that praises this software and outlines how the concept works. You can also click the link provided to the UFirst home page that offers additional information.

If you’re interested in learning more about how to effectively leverage your existing income to kill the front loaded interest associated with home loans on your primary and investment properties, you should contact Marty Loughlin at 815-690-3810. His email is mloughlin530@yahoo.com.

www.unitedfirstfinancial.com

Investors are always struggling with finding banks who understand foreclosure investing.  My investors tend to have great success with Banks who understand my process.  The reason?  I spend countless hours meeting with banks and appraisers to explain our program.  After nearly 8 years in the business our track record speaks volumes.  At this point, we have banks competing for our business.  Currently we have several banks that will provide my investors a 90% home equity loan on investment property.  This program is VERY competitive in a VERY conservative market.  It’s important to understand our process and experience when working with banks and appraisers.  No matter how much success we display, appraisers tend to be conservative in order to protect themselves.  My front end research regarding comparables should more than justify our numbers.  In any market, good or bad, we do our homework on the front end to justify our values.  Every house we send out, will come with comparables homes that have sold recently.  Many appraisers will need to see these comps and consider them when preparing their appraisal.  Many appraisers will mistakenly provide comparables that were also sold in foreclosure.  This is an extremely common and a grossly inaccurate practice.  Appraisers need to consider the rehab that was done to the property.  They also MUST look at recent, sold comparables.  When these 2 things are considered, our process is very accurately displayed through the appraisal.  If you ever have an issue with an appraisal, call us!  We will fight on your behalf to defend our accurate values and assist you with the explanation of our values to the appraiser.  We can also refer you to appraisers who have experience with foreclosures.  If a retail (often conservative and inexperienced wtih foreclosure) appraiser is involved, the appraisal will inevitably be inaccurate.  I highly recommend using an appraiser with foreclosure experience.  Call us for the name and number anytime you are working to cash out refinance a property or obtain a home equity line.

I was contacted by Caroline Kim in response to the media frenzy surrounding foreclosures.  Check out the article here.

The article was great, but there are some miscommunications…I do not fault Carolin one bit however, as I do speak pretty fast and the interview must seem like a million numbers being thrown around.  I have not personally totalled 150 foreclosures, I sold 150 foreclosures in 2007.  I personally have owned up to 31 homes at once, which is quite a lot to manage.  Currently I own 15 homes, 5 of which are under contract for sale.  The final comment is perfectly accurate however…I don’t have a single stock, just cash and houses! 

Here is a great clip of Robert Kiyosaki (Authur of Rich Dad, Poor Dad) and Doug Crowe (founder of a successful real estate education and training program Springboard) discussing the value of holding real estate.  This is one of our basic principles and seems to be a common theme among successful real estate moguls.  I have been preaching the value of holding real estate since I started in 2000.  This is a great clip, enjoy.

What does another rate cut mean to investors? It means that the Fed is making a serious attempt to curb the struggling real estate market.  By lowering the fed funds target rate to 3.0%, the Fed has established a sincere effort to remedy their overzealous increases of the recent years.  The theory behind raising rates 17 consecutive times, was to hedge against inflation.  Inflation is extremely difficult to gage, and in all honesty, I have a hard time depending on the government to accurately gage inflation. In my opinion energy costs and gasoline are the major source of inflation in the country.  As we continue to see interest rates cut, this will ultimately help the US economy and will ease some of the “inflation” that the average Joe feels. 

I studied economics at the University of Illinois.  The theory or idea that increasing interest rates curbs inflation may be valid, but I have another perspective.  As rates go up, as they did from 2005 to 2006, this hurts the average American’s pocket book.  Think about it.  Credit card payments go up, home equity loan payments go up, and ultimately this cannibalizes the paychecks and pocket books of the American people.  I understand the theory, I really do. My argument here is that we (and the Federal Reserve Bank) need to examine rates and inflation in a different way. Inflation is defined as the increase in the price of some set of goods and services in a given economy over a period of time. It is measured as the percentage rate of change of a price index.[1] 

In my opinion, the price of milk, cars, food, etc. has not increased or “inflated” beyond a reasonable scope. The price of money however was “inflated” drastically from 2005 - 2006 and was kept artificially high in 2007.  By the 7th time rates were increased, I felt as though the Governmet/Fed was egregiously overreacting.  I predicted that this was a foolish move that would ultimately hurt the US economy.  Many made the same prediction.  Many people, as I do, feel that the Fed typically overreacts.  It’s just my opinion, but the fed funds rate cuts to 1%(post 9-11) was aggressive. With all the uncertainty post 9-11, I did feel that it was deemed as necessary and prudent. The increases in fed funds rate (and ultimately the prime rate) from 2005 - 2006 was excessive, to say the least. Economic growth has slowed, the “R” word is everywhere..and here we are cutting rates again.

So what does all of this mean to us as investors. This means that the softening economy has forced the Fed to lower rates, which will cost the average Joe and the average investor less to own their home.  Rates go down, prices tend to go up.  We’ll see if this happens.  It’s my opinion that 2008 will be a year full of incredible deals and incredible cash flow opportunities.  I’d suggest fixing your rates with Prime for the remainder of the year, for short term real estate transactions.  For your homes and your long term holds, I’d recommend locking in longer term products.  I have a 30 yr. interest only loan on my home.  Great product! The majority of my investment real estate is fixed at 7% until early 2009.  If you are investing in our program today, First Choice Bank, will fund your purchases at 90% with a prime (Currently 6%) floating product.

I have said this over and over again, “NOW IS THE TIME TO BUY”. Our average foreclosures is priced at $100,000. At 6% interest only, your payment will be $500/mo.  Add in your RE taxes and Insurance, and you’ll likely be around $750/mo.  Our average rents are $1,100.

With just 10 purchases, you could be cash flowing $3,500/mo.  This will likely take care of your personal mortgage and maybe even your car payments.   But Josh, What if Prime jumps back up?  Well that’s a great question.  We don’t know when rates will go up, but if you were to fix rates now you may pay a slight premium.  That being said, your cash flow situation will likely remain tremendous, as the mortgage crunch has forced first time home buyers to remain renters.  Take advantage now, the opportunities are abundant.

One of our goals here at Robert Anthony Real Estate is to protect our investors.  Through Series LLCs we are securing an incredible level of protection for our investors. Each property should be run like a separate business, each property’s expenses and income will flow through their respective bank account.  If you feel this is excessive, no need to worry, you can combine LLCs via quit claim deed if you would like.  The reason we are so adimate about utilizing Series LLCs is that this process provides an incredible level of protection for investors.  A wide variety of potential law suits may largley be covered by your home owner’s insurance policy. This is our first line of defense.  Our second line of defense is the Series LLC.  If you really want to protect yourself there is a 3rd recommendation that I could give you.

If you are having a roof installed, it’s always a good idea to have yourself added to the Roofing Contractor’s General Liability Policy AND their Workman’s Comp Insurance.  There is no cost to do this, (I just recently did this) and it provides another level of protection.  There are all sorts of ways that you can protect yourself, but in my opinion these 3 layers of protection, in conjunction, are nearly iron clad.

Nothing in this world is certain, but these 3 steps will be a tremendous way to indemnify yourself, and allow you to sleep easy at night. 

I often contrast my program to the “safe” or “easy” returns I hear about in the stock market.  I believe with just a few minutes of analysis, you will see that our program consistently outperforms the market, and basically all other investment opportunities. The key is that our properties require very little capital to start (consider our $0 down program) and within 60 - 90 days, all (or more than all) of our investor’s captial has been recaptured.  Through cash out refinances, our program largely leverages the bank’s money, which is paid for by our tenants.  With $0 of our own capital in a project, the return is infinite.  Real estate can generate cash flow, cash out, tax benefits, and equity.  Our program is designed to generate a variety of each of the aforementioned benefits.   Here’s what the market has done since December 1999.    

In December 1999 The Dow was 11,497 Today, January 2008 The Dow is 11,971  

In December 1999 the S&P  500 was 1,469 Today, January 2008 the S&P 500 is 1,310

http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=%24indu&CP=0&PT=10  

That’s basically a loss over, nearly 9 years.  Accounting for inflation, both indices have provided a terrible return.   You may have timed the market and gotten in and out at the right time, but it’s largely likely that you didn’t.  Most investors can not time the market.  

The median home price in January 1999 was $164,800 (Keep in mind my investors buy foreclosures, which average 30 - 50% under retail values)

The median home price in Nov 2007 is $239,100 (The homes my investors and I buy average $110,000 - Less than half the Chicago Metropolitan Average and again at 30 - 50% discounts to retail values)

http://www.census.gov/const/uspricemon.pdf  

Over the same period, the median home price in our market is up 45%.  The fact that we purchase homes at significant discounts, more than accounts for vacancies and maintenance.  Our program is proven, consistent and provides safe returns.  The only major drawback is the liquidity factor, which has a downside as well.  It’s true stocks are more liquid than real estate.  Liquidity may seem like a benefit, however it is this reason that stock “bubbles” burst, and real estate “bubbles” deflate.  The liquid nature of the markets induce panic and sell off which runs rampant in today’s markets. The median home price may fluctuate, but there is no camparison to the volitility of the stock market.  From the peak of 2007, the Dow is down nearly 2000 points (nearly 14%).     Remember, real estate does require some effort and my program is not designed to be “Get Rich Quick”, but when I woke up today and watched the market, I was glad that I have 2 types of assets: Cash and Houses.

I am pleased to announce our new 100% financing program.  I assure you this program will revolutionize the way we invest.  First Choice will continue to finance our initial purchases at 90% (First Lien), while a private funding company will allow my investors to borrow the remaining 10% (Second Lien).

This will basically work like a 90//10 loan.  Funds will need to be paid off via refinance or home equity loan within 90 - 120 days, well within our standard time frame.

I could not be more pleased with this program. There will be credit and income requirements, but they will be accomodating and facilitating for my investors.  The costs for the 100% financing will vary depending on credit.  Typical costs will be $1,400 - $1,900 for the additional 10%.  This is EXTREMELY competitive pricing for 100% financing on a foreclosure.  This is the most innovative program I have ever seen, in fact there is no other program like this in the business.  This program will allow you to purchase multiple properties, grow your portfolios faster and capitalize on Other People’s Money.  This program further distinguishes Robert Anthony Real Estate as the leader in foreclosure real estate. 100% financing is available to approved borrowers and is limited to our projects.  

I will be out of the office 12-5 to 12-18 due to my upcoming wedding, we will have office coverage for pending transactions and questions.  Thank you for a great 2007 and I look forward to seeing you all at our post holiday party in early 2008.

Happy Holidays!