Rat Race Escapes

Come to the NWCREI Meeting 11/10 at 6:30 in Leominster!

noreply@blogger.com (Rat Race Escapes) — Tue, 09 Nov 2010 17:48:00 +0000

NWCREI Meeting at Chopsticks Restaurant in Leominster 11/10 at 6:30

Cashflow game Saturday 11/13 at 5PM in Leominster!

noreply@blogger.com (Rat Race Escapes) — Tue, 09 Nov 2010 17:46:00 +0000

Cashflow game in Leominster Saturday 11/13 at 5.
Click the link for details and to RSVP

Cashflow game today in Fitchburg!

noreply@blogger.com (Rat Race Escapes) — Sat, 23 Oct 2010 15:59:00 +0000

Come and bring a friend. Click the link below, RSVP and let us know if you want pizza by 4PM. Robert Kiyosaki, author of "Rich Dad Poor Dad", created this powerful financial education tool but it's up to you to take advantage of it.

Why do you want to be there? How about learning about money and investing in a fun environment? How about associating with people with a common future? How about networking with the people doing what you want to do?

All of those are great reasons to attend and it's worked for me. I've met partners and found deals for real estate investing through Cashflow games. I've found clients, customers and business partners for my other businesses. You could too!

See you there! Playing Cashflow 101 and Cashflow 202.
Cashflow game today in Fitchburg!

Foreclosures, reversals, consolidations and what's next!

noreply@blogger.com (Rat Race Escapes) — Sat, 02 Oct 2010 15:18:00 +0000

First we received word that some banks were halting foreclosures to conduct internal audits for their improprieties while suspending foreclosure evictions. Now there's word that at least a second bank improperly seized homes and may reverse foreclosures. These reversals would also reverse sales, sometimes multiple sales.

Reuters reports that GMAC has halted foreclosure evictions in 23 states and in a December 2009 deposition, a GMAC official admitted to signing thousands of foreclosure documents without checking accuracy. Add to that JPMorgan Chase telling CNBC that it will delay 56,000 foreclosures. Mortgage consultant Mark Hanson told CNBC, 'as of right now this is a policy and procedure issue until proven otherwise, but never underestimate mid-term electioneering,' says mortgage consultant Mark Hanson. 'If this does go to the next level (i.e. national foreclosure moratorium, fear that hundreds of thousands of foreclosures have been performed illegally, etc.), the unintended negative consequences on the mortgage market, MBS investors, banks' balance sheets and ultimately the housing market will be significant.' http://pittsburghlive.com/x/pittsburghtrib/business/s_701546.html

Wow. Let that sink in.

Mortgage services and banks are overwhelmed. I happen to think that is their fault but they are. Also, they were treating mortgage documents like the were bearer notes, i.e. who ever possessed them last was the owner of the note. Not so fast. In Massachusetts, law requires that the borrower always know who the lender is. In Massachusetts, that's defined as filling with the Registry of Deeds that you hold the note. Apparently New York sees it the same way as they have rescinded foreclosures for the same reason. I'm curious how many other states are doing this to (please feel free to comment and let me know!).

Add to that that JPMorgan Chase foreclosures of Washington Mutual mortgages may all be invalid. Why you ask? Because despite repeated statements that the deal has been finalized, it actually still hasn't apparently according to the FDIC and could be extended further. What does that mean? It means JPMorgan Chase doesn't own it. They've transferred the assets but the don't own it! That means if they've misstated who is the holder of the note, it's invalid, in at least two states and probably a lot more. Can you make an omelet with eggs that haven't been made?
http://stopforeclosurefraud.com/2010/08/17/could-wamu-jpmorgan-foreclosures-be-invalid/

There will likely be a number of long-term effects from all of this depending on how it plays out. As I see it, these are:

1) Investors will be scared to buy REOs (bank owned real estate) for fear that the bank acted improperly and will take it back, even if it's already been sold! Imagine if you bought an REO, renovated and wholesaled to another investor who sold it to an end buyer. That's four sales that get undone. Let's assume that I made $50,000 on the sale after spending $25,000 in repairs and have reinvested or otherwise spent that money and I don't have $50,000 in liquid assets. Do I get back the $25,000 or is that just gifted to the previous property owner whose bank acted improperly? Buyer's title insurance will be critical in this case but I think there are still unanswered questions that a lawyer would need to answer.

2) Housing prices will continue to drop. There will be fear in the marketplace over thousands of properties not yet on the market. Uncertainty is a killer! Scared or confused people do nothing.

3) Banks will post greater loses and we'll see more failures. Imagine the additional legal fees, property taxes, reimbursements, etc. Plus non-recoverable expenses like realtor commissions, appraisal fees, etc. Will the banks have to reimburse the new owners who acted in good faith and paid fees associated with an acquisition that's taken away because the bank rescinded the sale?

4) State and federal courts will be tied up for years. The ambulance chasers will move on in a big way to real estate foreclosures. Heck, I've already seen ads by them.

Let me know what you think!

http://myemail.constantcontact.com/Fall-is-here--NWCREI-October-2010-Meeting.html?soid=1101502609872&aid=zQ8YsQtOTVk

noreply@blogger.com (Rat Race Escapes) — Wed, 29 Sep 2010 17:57:00 +0000

The next NWCREI meeting is coming up in Leominster! Network, bring questions. You might find a partner, deal or power team member. Just buy dinner from the restaurant!

http://myemail.constantcontact.com/Fall-is-here--NWCREI-October-2010-Meeting.html?soid=1101502609872&aid=zQ8YsQtOTVk

Summer's over and so is the break! Come to the NWCREI meeting in Leominster tonight!

noreply@blogger.com (Rat Race Escapes) — Wed, 08 Sep 2010 20:08:00 +0000

Join us at 6:30 in Leominster at Chopsticks Restaurant. What it cost to come? The price of your dinner. It's time to network and do some deals. Bring your questions! See you there!

http://myemail.constantcontact.com/Summer-s-over--NWCREI-September-2010-Meeting.html?soid=1101502609872&aid=I9iNK_7kqmw&share=fblike

Matt Ridley: When ideas have sex | Video on TED.com

noreply@blogger.com (Rat Race Escapes) — Thu, 15 Jul 2010 16:07:00 +0000

Matt Ridley: When ideas have sex | Video on TED.com
I think this really shows, without directly addressing it, that mastermind groups, Cashflow games and networking really advances us and what we done. Live in a vacuum at your peril!

Enjoy!

Check out Rich Dad World and Powerpack!

noreply@blogger.com (Rat Race Escapes) — Thu, 01 Oct 2009 20:57:00 +0000

Powerful tool for Rich Dad followers. Check it out!
Share With a Friend | Rich Dad PowerPack

Shared via AddThis

Experian stops selling FICO scores to consumers

noreply@blogger.com (Rat Race Escapes) — Wed, 18 Feb 2009 13:51:00 +0000

On February 9, 2009, Experian stopped selling consumers their own score. They will of course continue selling them to creditors. Apparently, we as consumers no longer have access to FICO scores at all from them. The sell Vantage and Plus scores, which aren't the same as FICO scores.

FICO score are the ones that matter; they are what lenders use. It's not clear what, other than score, you'll have access to when you apply for a loan.

There is a serious drawback for consumers here: you have to have a pull on your credit now to get a real score and you still may not have access to the information in your file. That makes it very difficult if not impossible to correct errors. It also makes it nearly impossible to enforce your rights under the fair credit laws and I suspect that that is the reason why Experian went this route.

We have the right to see the reports on which the scores are based but currently not the scores. I think we should. One of the things I find to be sleazy about this industry is that they don't have to show you what they share with lenders.

How will you get the money for a down payment in this real estate market?

noreply@blogger.com (Rat Race Escapes) — Fri, 13 Feb 2009 20:37:00 +0000

Think about this question for a moment. Really think about it.

Many people are interested in investing in real estate now because prices are the lowest they've been in years. But did you know that you need more cash/equity now to do the deal than you did at the height of the boom?

It's true! For example 3 years ago, I bought two properties one month apart for a combined purchase price of $1.09M. After closing, I actually had about $30K IN MY POCKET! I was only required to have 30 days reserves and the cash out counted towards it and exceeded the amount required. Talk about easy access to money! And you only needed about a 650 credit score, sometimes less.

Today, those same properties would still be about the same price because of location but today, I'd need at least $273K cash for just the down payment plus nearly $80K in reserves. That's not what I'd call ideal especially when you'll need at least a 740 score. And we ain't talking about no stinkin' Plus score! You need a real FICO score. You can get all 3 real bureau scores at that link. A Plus score, which is what most sites give you is a sham. It's not what the bureaus and it's designed to blow sunshine you know where! There's a reason they cost so little. You should alway know what your score is BEFORE applying with a mortgage broker. Aside from looking like a novice, you a decidedly unprepared because you don't know what to expect. Buying real estate is a business and if you aren't prepared to spend a little under $50 to be better prepared, you are in the wrong business! Besides, how much did you spend on mentoring or a boot camp and you still weren't prepared?

3 years ago, you also could sometimes refinance a newly purchased property THE SAME DAY or within 6 months! Ask me how I know!

Let's take a representative bank-owned 3-family property in Fitchburg or Worcester today that only needs minimal work. Okay, so you are probably looking at $120K to buy and $20K for repairs or perhaps $60K to buy and $100K for repairs. If it's a typical property with 2 or 3 bedrooms, active sales comps put this at about $200K after repaired value (ARV). Your best case scenario for purchase is likely to be on a $120K purchase, about $30K down plus another $20K in repairs? Where will you get $50K? Where will you get the additional $20K reserves? 3 years ago, you could have bought that property when it was in a little better shape for $300K and only needed about $15K to buy it.

So let's look at sources of money for down payment. Without getting too creative, you have to look to yourself.

Do you own stock? It's harder today to borrow against a stock portfolio than 3 years ago. Unless you've lived under a rock, you've watched the value of companies listed on the New York Stock Exchange loose what, about $50 Trillion in value?

Next typical source, cash you've got locked away in a savings account. Most people in America now don't have cash savings.

Instead they credit card debt. 3 years ago, it was pretty easy to throw a down payment on a credit card. Ask me how I know! Try that now with the average credit score down over 100 points, amount owed up, limits reduced and interest rates up on cards.

Next source private or hard money. There are fewer players for this since many people have lost a lot of money recently but they are still out there. I still have some private money available to me. Just not as many. Many people are scared and have gone into bunker mentality so unless you have experience, you may have a harder time getting private or hard money and you can expect higher interest rates.

So where does that leave you? There are still options. One is working with partners. I do it. It gives you options and the ability to do more deals. That's a good thing.

And there is another way. It requires some effort on your part and maybe that scares away a lot of people. If they don't think sourcing, financing, buying or managing real estate, much less screening tenants, contractors, your power team, etc., is work, they are deluding themselves but I see that too.

What's the other way, the Plan B? Robert Kiyosaki talks about it in "Rich Dad Poor Dad", "The Cashflow Quadrant" and "The Business School for People who like Helping People" and "Before You Quit Your Job". Cashflow 202 includes it as A BUSINESS. As a matter of fact, he suggests you do it for 1-2 years before starting or buying a business because you'll learn a lot of skills that will help you in business (including as a real estate investor). You'll have little or no overhead and generate massive tax breaks. And you just might make a fair amount of money that will help you achieve your real estate goals. You certainly learn more about business and marketing than you ever will in a bootcamp. You'll increase your knowledge in a way that useful for investing, you won't spend huge amounts of time, and you won't let someone else determine what you are worth by a paycheck. Indeed, you find something that has unlimited income potential, allows you to help people, get you out of the Rat Race sooner and fund or help fund your real estate investments. You even have the ability to grow something that will pay you even if you never want to get out of bed in the morning!

What am I talking about? Network marketing. Many people think it's bad. Indeed, there have been some bad companies out there, some with business models that are illegal, have bad reps, etc. The majority a good, solid companies, have people involved with integrity. You can make a substantial amount of money and help other people do the same. Oh yea, and self-fund your deals. If you think like a business owner and treat it like the million dollar business opportunity that it is.

Network marketing is business ownership with low expenses. If you have ever owned a business, you are used to having expenses. I know I've spent millions reinvesting over the past 10 years on just one of my businesses. You also meet hundreds of potential power team members that can directly affect your real estate business. That alone should get your attention.

I was alway down on network marketing before. But I've found a couple I really like. I focus on one of them. There's no pills, potions or lotions. No investory. I wouldn't try to give you a hair cut in a blog post and I won't try to explain the business in one. You can talk to me if you'd like to know more. I even have a 6 year old girl (obviously she's not working the business!) I'm working with that's in a position to make money and I expect she will make several hundred dollars THIS MONTH. So talk to me if you are interested. You'll learn about yourself, improve yourself, learn valuable lessons that will help your real estate business and perhaps fund your deals. My business is exploding and I'll can help you do the same if you have work ethic.

You know how to reach me.

network marketing, cashflow 202, robert kiyosaki, rich dad poor dad, real estate, funding, business, marketing, down payment

Great post on marketing by a Worcester County business owner

noreply@blogger.com (Rat Race Escapes) — Wed, 28 Jan 2009 17:44:00 +0000

Laura Briere is someone I've come across because of posts we both belong to the Rich Dad Followers group on LinkedIn. If you aren't a member, you should be (it's free) and if you do join, connect with me!

Anyway, anyone who follows anything to do with Robert Kiyosaki want to own a business, real estate and or other investments. That means you should be marketing (hear that real estate investors?!?). Check out Laura's post below. I'm going to invite her to join us for a game.

Robert Kiyosaki Knows His Marketing | Vision Advertising

Robert Kiyosaki, Laura Briere, LinkedIn, social networking, real estate, investing, business, marketing

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18.2% drop in home prices and it's not getting improving!

noreply@blogger.com (Rat Race Escapes) — Tue, 27 Jan 2009 14:49:00 +0000

No brake on home-price free fall in Case-Shiller index - Jan. 27, 2009

For the 12 month period ending November 30, 2008, the Case-Shiller Home Price Index shows a drop nationwide of 18.2%. Since mid-2006, it's fallen 25.1%.

Don't expect this to change anytime soon.

Flood of foreclosures: It's worse than you think - Jan. 23, 2009

Banks are slow to foreclose and list right now. The supply of homes is roughly double what is currently listed. Make sure you have enough margin in you calculations or will cash flow!

Additionally, more people are out of work.
Bloody Monday: Over 71,400 jobs lost - Jan. 26, 2009

Plan B (or C, D, E or F) is even more now than ever. Real estate is a good plan B; I obviously think so or I would be involved. You still should be looking at other ways of making money.

Curious? Email Lee or give him a call!

Home prices, foreclosure, REO, bank owned, unemployment, Plan B

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Our Nightmare Before Christmas

noreply@blogger.com (Rat Race Escapes) — Wed, 31 Dec 2008 19:09:00 +0000

Forwarded by Danielle Rocheford

Our Nightmare Before Christmas

(or Unitil Utilities Suck)

Twas two weeks before Christmas and all through the town
it rained and it froze and the trees all fell down.
The wires that were strung on utility poles
snapped like a twig and the houses all froze.

We got our selves nestled all snug in our bed
while visions of warmer days danced in our head,
and me in my thermals and Pa in his cap
stayed huddled together for a bone chilling nap.

The moon on the ice made a crystalline glow
and we thought to ourselves, just how long can this go?
When what to our wondering eyes did appear
but our son with some coffee and donuts and cheer.

We could see our white breath in the darkness above
and deep under the covers I searched for my love.
His feet, they were frozen and so was his head ---
made me think to myself that he just might be dead.

The days passed so slowly, we must be insane
as we waited and wondered and called out by name
"On Thursday, on Friday, on Saturday (shit!)
on Sunday, on Monday, on Tuesday (please quit!)
on Wednesday, and Thursday and Friday (oh dread!)
the kerosene fumes must have gone to our head.

To add to the pleasure of winter's delight
two snowstorms came by - 18 inches of white.
The snowing and blowing made things bad to worse
and we prayed to the heavens our pipes wouldn't burst.

Pa's eyes now were sunken, his expression --- not merry,
his cheeks had a pallor, his nose like a cherry.
The odd little smile on his face wasn't fun
and he often was mumbling "go get my gun".

Then a rap on the door, and the fireman said,
"Are you sick, are you sane, and is anyone dead?
There's a shelter, there's warmth, you can come if you're able,
we have showers and kindness and food on the table" ---
and we looked at each other and thought --- "what the heck?"
yeah ... eleven days later you FINALLY check!

On night number twelve we heard the faint roar
of a convoy of trucks and we ran to the door.
To the top of the poles, to the stretch of the cable ---
please bring us your power just as fast as you' re able!

They spoke not a word, but went straight to their work
and the power came on with a hum and a jerk.
They heard us exclaim, as they drove out of sight ---
MERRY CHRISTMAS TO ALL!
WE HAVE HEAT! WE HAVE LIGHT!

Fanny Mae and Freddie Mac Halt Foreclosures!

noreply@blogger.com (Rat Race Escapes) — Fri, 21 Nov 2008 04:20:00 +0000

Wow! Fannie Mae and Freddie Mac have ordered their services to halt foreclosures and evictions between November 26th and January 9th. There are qualifications to meet and it's designed to allow a rescue plan time to work.

Get more details

Be a patriot. Vote.

noreply@blogger.com (Rat Race Escapes) — Tue, 04 Nov 2008 00:10:00 +0000

Tomorrow, November 4, 2008, is the day where you get show that you are a patriot.

It's all well and good when people show flags on their car, despite being an improper display of flag etiquette. I'm not talking about any silly criticisms of wearing (or not wearing) a flag lapel pin. I'm talking about the single most important duty of a citizen in a democracy.

I'm talking about going to your polling place to vote. Naturally, I'd prefer that you vote for the party and candidates that I support. More importantly, I want you to vote.

I've heard all sorts of responses leading up to election day this year, just like in years past. Some are diehard supporters of one candidate or the other, some hold their nose and some refuse to vote claiming that it doesn't matter.

If you think it doesn't matter, then don't whine about how bad things are while you endanger the foundation of democracy. You claim to care so much yet show me that you care so little.

Pay attention, really learn about the issues, make your choice and engage others in discussion. Show yourself and others that you value living in a free country. Participate and take your duty seriously. We are all responsible for what happens in this land.

Vote. If you are local and don't have a way to get there, call me. I'll drive you there, even if you vote differently than I do.

State issues in Massachusetts on the ballot

noreply@blogger.com (Rat Race Escapes) — Mon, 03 Nov 2008 23:45:00 +0000

Tomorrow, statewide in Massachusetts, there are 3 ballot questions. They are elimination of the state income tax, decriminalization of small amounts of marijuana and elimination of dog racing.

Here's where I stand. No on 1, yes on 2 and 3.

Question 1: I think, I hope, that the selfish insanity of libertarianism is finally starting to taper of. Question 1 is a libertarian ideal. What will happen if state income taxes are eliminated? Local aid with be eliminated and towns will have to replace that revenue from somewhere. Where you might ask? Property owners. Mitt Romney's revenue cuts about 6 years ago caused property taxes to go up roughly $2B, even though reducing $50 per person less would have meant not police fire fighter or teacher layoffs and it would have meant that people would have died. Local aid was slashed as a result and property taxes went up.

Question 2: I don't like pot and I'm allergic to it. But it is absurd to to lock so many people up in jail, hurt their chances for jobs and education, etc. for using or possessing small amounts of marijuana. Nobody is going to buy it and use it because it's a minor infraction now. And really, it's banned because of hemp, which got lumped in because of the cotton trust which is absurd too.

We have the highest rate of incarceration in the world, much of it because of minimum mandatory sentencing over what should be petty drug offenses. We're building more prisons than schools. Let's help stop this nonsense.

Question 3: Dog racing should be banned. It's true; I love dogs. I like them better than most people. Dog racing has cruel and inhumane conditions and for that reason, it needs to end.

Cashflow at La Tazza

noreply@blogger.com (Rat Race Escapes) — Mon, 13 Oct 2008 13:05:00 +0000

We had a great game of Cashflow 202 Saturday night, October 11th at La Tazza, in downtown Leominster. James, Dan, Marria and myself played. Anita McHugh dropped by for a while before she had to take off.

Lee got out of the Rat Race first, about an hour into playing, followed a few turns later by James, then Dan and Marria. James won first thanks to striking oil with the Russian oil deal. These things happen in life; you have to be willing to take a risk. In real life, this sort of thing would be open to qualified investors (anyone in the Fast Track is) because of risk and in James' case, it would not have negatively impacted him if it had not succeeded. We continued playing and I was able to buy another business on the next turn or two which put me over the $50K per month increase in cash flow and I already had two dreams. We called the game at this point because it was still early and Dan had a long ride home. We didn't actually start until 7PM or so and we were done by 9:30PM. Now that was a fast, focused game and we ate dinner while we played.

In this game, we all played the business manager but started with different starting portfolios. I started with a small amount of cash and a smallish stock portfolio. Initially, I had not been able to buy any real estate on my own (not enough money and I didn't go heavily into debt) but I was able to partner profitably. I also was able short and option stock and sold my initial portfolio after a while without the companies failing. That allowed me to progess slowly in passive income and generate over $500K. I wasn't negatively affected by a bad economic outlook and diminished rents. Then, with lots of cash on hand, I was able to buy a lot of junk bonds with a conservative yield that but me out of the Rat Race and on to the fast track. I never was able to lend privately to the Rat Race as all had sufficient cash.

I stayed and talked with Stephanie, the owner, and patrons of La Tazza until just after midnight. I like the place and really enjoyed the political discussion. It also was good for another reason because I was given a strong lead for a potential deal. I'm not saying this to brag but. I'm saying this to share what this experience shows: if you are in the market for (insert item here), TELL PEOPLE! I don't care if it's a laundromat, real estate, a boat, some particular year and model car, etc. People know people you don't or they may have what you are looking for and may need to sell it. You don't know what their situation is or what the situation is for someone they know. This is what networking is all about.

He's #1!

noreply@blogger.com (Rat Race Escapes) — Sun, 12 Oct 2008 13:01:00 +0000

Warren Buffett has has once again become the wealthiest individual because of market volatility and shrewd buys. Would you believe his networth INCREASED by $8B last month?

Click and learn more.

Wow! Forwarded by Danielle.

What a mess

noreply@blogger.com (Rat Race Escapes) — Thu, 09 Oct 2008 18:54:00 +0000

I've been delinquent the past few months in posting. I've been quite busy, what with some of my business ventures (including a couple of new ones), real estate and the real estate investment clubs. There's a lot of fodder for blog posts over the past few months. From more bank collapses including Fannie Mae and Freddie Mac, insurance company implosions including AIG, foreclosures skyrocketing, etc. But keep reading because you'll find what finally motivated me to blog today when I've already get about 18 hours of work in the next 5-1/2 hours.

I'm pretty much sick and tired of hearing mortgage brokers lay the blame squarely at the feet of borrowers. Let's face it: there are (or were) a lot of bad brokers that coached borrowers and in some cases outright misled them. There were also borrowers that went along knowing full well that they were lying and could. The borrower knew it, the broker (and originator) knew it, the bank knew it.

Even the insurers knew it. AIG was "insuring" these loans that everybody in all financial sectors knew were fundamentally unsound.

Then they were put together with other loans of all grades into a great big pot. Then, like apples that you wouldn't eat because they look bad and are on their way out but when pureed you don't know the difference when made into apple sauce and sugar is added, they got sliced and diced into little pieces sold to investors as a sanitized product that had supposedly reduced the risk. Then they paid the companies to rate the new securities. Just like banks that had their preferred property appraisers that were compromised (think the investigations in NY and CA into inflated appraisals pushing people into jumbo mortgages or sub-prime products by collusion), the ratings were inflated (and unregulated). To further wash these bad mortgages, these securities were sliced and diced again in new securities, and rerated even higher!

What investors doesn't want some of their assets in AAA rated securities that pay a rate of about 8%? For those wondering, that AAA rating is supposed to mean that there's about as little risk as there could possibly be.

Ever since falling out of the last real estate bubble in the early-mid '90's, government has wanted to increase home ownership. That's good for everybody including real estate investors and government because, lets face it, prices go up and so does tax revenue in a world of increasing value. So let's just drop that partisan political nonesense. Republicans have been trying to blame Bill Clinton, Democrats, Congress, etc. In other words, it's that nebulous "them". Democrats have been trying to blame "them", corporate greed, Republicans, Congress, George W. Bush, etc. And they are all right and all wrong.

It's US as in America that got us into this mess. And it's US that need to get us out of it.

The big popping sound and then the rushing air going by as the vacuum is drawn pulling down home prices, wages, tax revenues, stock values. Oh, yes, and inflation is being drawn up by forces like running the printing presses and massive government spending.

Let's face it. The country turned more socially and fiscally conservative starting with the election of Ronald Reagan and culminating with the election of George W. Bush. Everyone agrees that taxes were high. But over the last 8 years, the Congress and President have pursued a cowardly tax policy. Lot's of Libertarians with a big L joined the Republican party because the figured out that they were going nowhere as big L Libertarians.

Yes, that's what I said. Cowardly.

Why do I say they are cowards? We let's see. We had a huge deficit and we were finally paying it down and paying it down quickly. But we had an enormous crushing debt load still. So instead of maybe making a small cut to taxes and still paying down your debt, a big one was instituted. What happened is the equivalent to you or me having huge debt (that we have to pay for) and deciding that we don't need 1/4 of our income. Now we are upside down and paying out more than we take in. You can think of it as quitting your job or being laid off and living on your credit cards. Sounds good when we talk about tax cuts but it's really like losing your job but you still have the same expenses. Oh, just stop eating or heating your home. Now you won't be spending as much! Especially if you don't spend on you spouse or kids!

Then throw in a very unpopular war and try to lower taxes again! This is the first war in American history where taxes were lowered in wartime! Too bad the government doesn't act like we are at war! Except of course for spying on us. Think of it as now you've been laid off but you just decided to double your expenses and you just naively think you'll borrow and let your heirs pay for it!

Isn't that the opposite of what we are trying to do?

Fast forward to bank failures, insurance giants failing, etc., because of their bad decisions. Their leaders got paid upwards of $100 Million per year and justified it by saying look how much we made the company and shareholders! Of course, shareholders would and should have received a bigger piece but that's a different story. Basically, they took the money and ran. Now we see that there was widespread fraud.

There have only been about 6% of sub-prime foreclosures and 3% of prime. That shouldn't bring down the financial situation. Except that the securities were weaker than advertised and how do you break them up and get the mortgages out.

Yea, the free marketeers now want a socialist answer. Not that I think that's necessarily bad, but the same people that wanted no regulation want the government to fix it. Call it what it is. It's nationalizing these businesses and essentially these industries. So what do we call it something else when it happens here? Or right, because America doesn't have refugees either, just evacuees like after Katrina. Anywhere else, we'd be calling them refugees.

If I were in Congress, I probably would have voted for the bailout/rescue/nationalization. Then I've have gone to the john and puked.

So who suffers the most? Sure investors do. Sure the government does because there won't be as money to spend (oh, wait, I forgot about the aforementioned printing presses). We do, the tax payers. We'd suffer if these businesses failed and we'll suffer with the bailout. Which would be worse, we won't know. But the bad fiscal, monetary and tax policy, especially over the past 8 years allowed for a death blow.

Why do I think we are in this mess? Greed? Incompetence? Greed? Fraud? False populism? Vote pandering ($600 tax rebate and a bigger deficit)? You bet. But they are symptoms.

It's deregulation, my friends (oh, great, now I sound like John McCain). It started under Reagen, continued under Bush the Elder, accelerated under Bill Clinton and reached it's peak under Bush the Younger and a Republican party that controlled Congress and could deregulate (or defund enforcement which amounted to a cynical way to achieve the same result--see they don't do a good job anyway inspecting/regulating, see?) yet couldn't pass a budget.

A number of real protections (that's what regulations are for) were put into place because of widespread fraud, misrepresentation and a believe that too many people were speculating on stocks among other things that led the Black Friday in 1929. Through the 1930's, these regulations came into effect for insurance, banking, stock markets, etc., etc. Fast forward and we're back to where we were. Just like in the '30's, massive foreclosures, growing unemployment, inflation, etc.

I've said all of that and now I don't feel any better. I might feel worse.

So why did I post? Because an act of compassion and humanity. The Cook County, Illinois, Sheriff announced today that he will not evict people living in multi-family housing that are being evicted because the owner is losing the property. He won't put them on the street.

I'm in the market for these types of property so why am I posting?

Because he's right. He's right from a humanitarian aspect. It's also pretty dumb sometimes when banks evict when they've got paying tenants and I see it every day. Property rots like overripe fruit when it's vacant.

Here in Massachusetts, the Senate in the Spring passed this provision. The State House hasn't taken it up and we are a largely progressive state.

This is a social justice issue. Screw the money. There will be a lot of people on the streets, families, kids, the elderly. Call your state rep. here in MA and ask why they never passed Senate Bill 2664 / House Bill 4734.

Read the act.

It allows for eviction for cause, like non-payment of rent; the tenant violated the lease/tenancy; the tenant is a nuisance, causing damage or interfering with other tenants; being used or permitting to be used for illegal activities; they've refused reasonable requests for access by foreclosing owner for repairs or improvements required by law. It's pretty reasonable.

The act would sunset end of year 2013 and evictions that happen illegally carry reasonable fines.

This should be passed.

If you are in a different state

Kiyosaki predicted collapse of Goldman Sachs and Lehman Brothers

noreply@blogger.com (Rat Race Escapes) — Thu, 09 Oct 2008 18:15:00 +0000

Indeed he did! Watch and find out.

Also, check out his new post on Yahoo Finance.

Both from an email earlier today for the Rich Dad Company to Insiders.

Some great stuff

noreply@blogger.com (Rat Race Escapes) — Sun, 28 Sep 2008 18:20:00 +0000

Several big items of interest or just good fun. All forwarded by Danielle Rocheford. Thanks!

This guy shorted sub-prime and it made him a billionaire with a B! Click and learn more!

Here's a Powerpoint presentation that pretty much gives a few minute description of the hows and whys of the real estate / mortgage debacle. Laugh, it's funny. Then cry, because is isn't. Don't know who created it buts it's brilliant.

Indy Mac Bank Fails!

noreply@blogger.com (Rat Race Escapes) — Sat, 12 Jul 2008 03:44:00 +0000

Federal regulators took over Indy Mac today. Check out the story! Less banks and less money in the capital markets means more money necessary for investors from private sources!

June 2008 Games

noreply@blogger.com (Rat Race Escapes) — Fri, 13 Jun 2008 16:05:00 +0000

The next games for the Twin Cities Rich Dads and Moms Cashflow club are
this Saturday, June 14, 2008 in Leominster, MA and June 12, 2008
in Leominster, MA.

We'll have a speaker on January 12 talking about building wealth for families.

To find out more, visit our website and sign-up for the newsletter at the bottom of the page.

Number of mortgage brokers may be dropping by 80%!

noreply@blogger.com (Rat Race Escapes) — Fri, 13 Jun 2008 16:00:00 +0000

Wow.

The mortgage business has been hard for many mortgage professionals as the real estate market has cools from a flippers dream or from the idea that just owning a home makes you rich. I've seen many many mortgage originators and brokers go into other lines of work and honestly who could blame them?

With Massachusetts adding the requirement of licensing, the number is now being seen as falling as much as 80% from the height of the real estate boom when mortgage brokers made easy money and lots of people entered the field. This comes from the Massachusetts Mortgage Bankers Association.

Read the article from the Boston Business Journal! Thanks go to Danielle Rocheford for forwarding the article to me.

There is likely a silver lining in this for the mortgage brokers that stick. They will have far less competition and the ones that stay should have a lot more business I'd guess.

REOs Open! a big success!

noreply@blogger.com (Rat Race Escapes) — Fri, 30 May 2008 12:08:00 +0000

The first REOs Open! for Worcester Real Estate Investors and the Northern Worcester County Real Estate Investors was a success! With 8 people in attendance, including Jeff Landry and Tina Miller of J.A. Landry Carpentry. Jeff is not only carpenter but he's also a general contractor. Jeff and Tina helped with ballpark repair prices on each property that helped with analysis. Jeff and Tina are both board members of the Northern Worcester County Landlord Association.

We visited 4 properties, 3 in Leominster and 1 in Fitchburg. 2 properties were SFH and 2 were multi-families. There was a lot of interest in the 3-family REO in Fitchburg. It's not currently listed and needed some repairs and some asbestos remediation in the basement. The Duplex in Leominster was the worst house in a great neighborhood. The lot value alone is more than the current price!

We analyzed the Fitchburg property to determine what the likely repair costs would be, carrying costs, etc., what the maximum amount that could profitably offered if performing the full repairs and remediation as well as will a more modest rehab. In other word, what needed to be done to know how the property would perform. We also discussed the types of financing that would be available and the cash down requirements for those loan products. So a lot of information was discussed and shared!

The next REOs Open in Gardner is tentatively scheduled for June 22nd. Check your mailboxes! We look forward to another successful outing.