"IF A WINDOW OF OPPORTUNITY APPEARS, DON'T PULL DOWN THE SHADE." Tom Peters.
On Wednesday, the Fed announced that over the course of 2009, they will purchase an additional $750 Billion of Mortgage Backed Securities, as well as $300 Billion in long-term Treasuries, primarily to help shore up the housing market and keep home loan rates low. On the announcement, Bonds exploded higher, leaving Bond prices within whiskers of the best levels ever.
However, it's important to understand that while their actions may keep a lid on rates moving higher, they may not cause them to move lower. While we know there is little inflation at the present time, the chatter of future inflation could have a negative impact on Bonds and home loan rates, or at least stifle any improvements.
Although the media is already spinning it differently, this may not be a time to stay on the fence, hoping and waiting for lower rates and/or lower real estate prices. Home loan rates remain within inches of all-time historic lows, but may not necessarily move significantly lower based on this purchasing plan - waiting is a very risky move.
More good news last week, as Housing Starts for February came in better than expected and actually increased for the first time in eight months. In addition, Fed Chairman Bernanke stated the recession should end in 2009 and that he is confident of the long-term outlook for the US economy.
Also, an update on Mark-to-Market - the accounting rule which has had a devastating impact on the financial markets - which we have discussed many times, including in last week's issue. The Financial Accounting Standards Board (FASB) agreed that it will propose to allow companies to use more "leeway" in applying the accounting rules they use to value their assets, and planned a final vote for April 2nd. If this rule change is approved, it could result in better first-quarter financial statements for companies that have been affected by this rule. Stocks have been moving higher lately in the hopes that Mark-to-Market will be fixed, and a resolution could help Stocks further improve.
So what are you going to do with your Cash? Leverage into cheap priced Real Estate or buy Stocks?
If it is Real Estate call me.
Keith
310-391-0821
BTW If you need a referral to a Stock person send me a note.
Gary with Wealth Pinnacle is a very good guy to know.
Tuesday, March 24, 2009
Tuesday, February 24, 2009
LA City politics. No on Mesure B
At election time I allow myself to make recommendations. I feel that the City/State/Federal regulations and taxes affect your and my real estate and are therefore fair game for this blog.
Often the best vote is NO on many things. It only should be Made Law or funded for the public good IF it is overwhelmingly agreed on as needed and worth it.
So that said, please see these two links. After reviewing them, you too will agree Measure B should get a NO vote.
The Cover Up Continues
http://www.citywatchla.com/content/view/2034/
and
Union Members: Solar Plan Not Cost Efficient
http://www.citywatchla.com/content/view/2035/
Often the best vote is NO on many things. It only should be Made Law or funded for the public good IF it is overwhelmingly agreed on as needed and worth it.
So that said, please see these two links. After reviewing them, you too will agree Measure B should get a NO vote.
The Cover Up Continues
http://www.citywatchla.com/content/view/2034/
and
Union Members: Solar Plan Not Cost Efficient
http://www.citywatchla.com/content/view/2035/
Saturday, February 21, 2009
OK so Real Estate has gone down some in the market.
I work in a different market place for investments than what is commonly referred to as "The Market" that usually means a stock market trading a piece of paper that represents an interest in some company or asset. When I deal with Investment Properties we are dealing with an asset that you get a real title too.
Compared to the over valued paper being peddled by wall street for the last few years, Income Real Estate is rather secure.
Yesterday in the LA Times Business section...
http://www.latimes.com/business/la-fi-commre20-2009feb20,0,4393076.story
This story says Commercial Properties are down 15 %
and that Apartment Buildings are down 11.5 %
in the nationwide averages.
Not bad compared with all that stock market stuff.
Just read your last 401 K report and compare the amount you are down. Then think about how much you are diversified if it is all with a Fidelity account or E-Trade. No matter how much it is spread around in the stock market it is still the stock market. Some of your net worth needs to be in a performing real asset like an apartment building if you want a secure long range future.
With today's prices now in a bit of a "Market Dip" it may be possible for you to use your cash to pick up a sound investment for your future. If you are not retiring in the next 2-3 years Income Property should be in your portfolio.
Call me to review the options.
Keith Lambert
310-391-0821
Compared to the over valued paper being peddled by wall street for the last few years, Income Real Estate is rather secure.
Yesterday in the LA Times Business section...
http://www.latimes.com/business/la-fi-commre20-2009feb20,0,4393076.story
This story says Commercial Properties are down 15 %
and that Apartment Buildings are down 11.5 %
in the nationwide averages.
Not bad compared with all that stock market stuff.
Just read your last 401 K report and compare the amount you are down. Then think about how much you are diversified if it is all with a Fidelity account or E-Trade. No matter how much it is spread around in the stock market it is still the stock market. Some of your net worth needs to be in a performing real asset like an apartment building if you want a secure long range future.
With today's prices now in a bit of a "Market Dip" it may be possible for you to use your cash to pick up a sound investment for your future. If you are not retiring in the next 2-3 years Income Property should be in your portfolio.
Call me to review the options.
Keith Lambert
310-391-0821
Monday, February 09, 2009
What makes a good starter investment property?
On Sunday I toured several properties with clients looking for a starter investment property. We looked at sites Downtown, Midtown, and Mid-Wilshire.
8 units or 6 units or 4 units all with good strong rent rolls that bring in a healthy revenue stream. 8 units with dilapidated conditions. 6 units in good condition in so so area. 4 units in a sweet area in clean condition.
All three have the potential to work. All three have pluses and minuses. The key is what will keep the revenue up best in a market where rents are sagging? Which one will a lender be more likely to give you better terms and easily fund. (Lending is very important today, more later) Which one will give the best appreciation down the road? And be easier to sell?
At some point one must move out of your starter property and roll into a bigger better apartment building. Hope is that the 1031 exchange will then produce real income for reaching your financial goals.
Keeping those goals in sight is important when weighing the questions above.
Keith L.
*hit Comments to weigh in on what is most important to you.
Revenue flow/lender marketability/manageability/appreciation/resale-ability
8 units or 6 units or 4 units all with good strong rent rolls that bring in a healthy revenue stream. 8 units with dilapidated conditions. 6 units in good condition in so so area. 4 units in a sweet area in clean condition.
All three have the potential to work. All three have pluses and minuses. The key is what will keep the revenue up best in a market where rents are sagging? Which one will a lender be more likely to give you better terms and easily fund. (Lending is very important today, more later) Which one will give the best appreciation down the road? And be easier to sell?
At some point one must move out of your starter property and roll into a bigger better apartment building. Hope is that the 1031 exchange will then produce real income for reaching your financial goals.
Keeping those goals in sight is important when weighing the questions above.
Keith L.
*hit Comments to weigh in on what is most important to you.
Revenue flow/lender marketability/manageability/appreciation/resale-ability
Tuesday, January 27, 2009
New LII Listing on Clubhouse Ave - 6 Units
Venice area of Los Angeles. 6 Units and good incomes.
More on the http://www.lambertinc.com/forsale.php page.
Call if you want my help to make an offer.
Keith Lambert
310-391-0821
We are looking for a crystal ball now and then
Economists Predict Recession's End
As posted by Austin Kilgore | 01.23.09
http://www.dsnews.com/index.php/home/news_story/2459
And as my friends in the Brokerage and Lending field have heard me say "Once the lenders have finished crapping their shorts they need to get back to making loans again." But then today's LA Times has a story about one of the stalwarts of the local area multi-family lending business, First Federal Bank of CA, was stopped from making new loans.
This decision is in response to regulators demands. They have stopped making loans. What are those Regulators thinking??? This is a stronger institution. And almost all multi-family borrowers are paying the loans. Multi-family apartment buildings are Not purchased by speculative fly by night flippers who over leveraged and got upside down.
Sometimes I scratch my head. Most often when government regulations collide with the reality of what they actually accomplish.
If the government is spending 700 Billion to keep the banks lending... Why are they forcing our local bank to stop making loans?
Who sends the complaint letter to Obama?
All will work out. I hope the economists above have the reading right. So if you can get a loan. Now is not to far off from the bottom if 2010 is the start of the ride back up.
Keith L.
www.REList.net
As posted by Austin Kilgore | 01.23.09
The country's recession is the longest and deepest in 60 years, but it will rebound in 2009, according to two economists at the Comerica Bank Economic Forecast Conference in Santa Clara, California.
Comerica Bank's chief economist Dana Johnson told approximately 600 Silicon Valley business leaders, “We should see at least a 6 percent increase in gross domestic product in the third quarter. I don't think it's at all a stretch to say that once the economy picks up steam, it will be really impressive.”
Another economist at the conference, Stanford University's John B. Shoven, agreed, but said he believes the rebound will happen in the fourth quarter of 2009.
He added as soon as investors realize the economy will strengthen in 2010, “the stock market could start to rally in the second quarter,” several months ahead of the recovery.
They both credited the economic stimulus actions taken by the U.S. Government from preventing disaster.
Johnson said, “We came within an eyelash of a catastrophic failure of our financial system.”
The economists said while President Barack Obama has surrounded himself with a strong team of economic advisors, the government won't be able to do much to prevent the unemployment rate increasing to 9 percent by mid-year.
However, Johnson said, “The federal fiscal stimulus headed our way beginning this spring...will do an enormous amount to get this economy going.”
http://www.dsnews.com/index.php/home/news_story/2459
And as my friends in the Brokerage and Lending field have heard me say "Once the lenders have finished crapping their shorts they need to get back to making loans again." But then today's LA Times has a story about one of the stalwarts of the local area multi-family lending business, First Federal Bank of CA, was stopped from making new loans.
This decision is in response to regulators demands. They have stopped making loans. What are those Regulators thinking??? This is a stronger institution. And almost all multi-family borrowers are paying the loans. Multi-family apartment buildings are Not purchased by speculative fly by night flippers who over leveraged and got upside down.
Sometimes I scratch my head. Most often when government regulations collide with the reality of what they actually accomplish.
If the government is spending 700 Billion to keep the banks lending... Why are they forcing our local bank to stop making loans?
Who sends the complaint letter to Obama?
All will work out. I hope the economists above have the reading right. So if you can get a loan. Now is not to far off from the bottom if 2010 is the start of the ride back up.
Keith L.
www.REList.net
For Rent - 2 bedroom 1 bath at Santa Monica Beach
FYI for anyone looking for a cool beach side pad...
http://www.postlets.com/rts/1695620
For rent for $ 2,900 per month. Good space. Right at the beach.
See the link for photos and map.
Keith <"><
http://www.postlets.com/rts/1695620
For rent for $ 2,900 per month. Good space. Right at the beach.
See the link for photos and map.
Keith <"><
Monday, January 26, 2009
The Markets and Lending this week.
The Financial situation This Week
Inflation chatter could come around again this week, as the Fed will be holding their regularly scheduled meetings on Tuesday and Wednesday, with their Policy Statement and decision regarding the Fed Funds Rate coming on Wednesday. Remember, the Fed made history last month when they slashed the Fed Funds Rate by .75% to the lowest target range in history of 0% to .25%. The chart below shows an interesting history of the Fed Funds Rate since 1955.
Other potential market movers include Friday's Gross Domestic Product (GDP) Report. GDP is the broadest measure of economic activity, and given the state of our economy, a negative report might not be too much of a surprise. In addition, Thursday's Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc) will give us a read on consumer and business consumption and buying behavior. We'll also get a look at the housing market this week with Monday's Existing Home Sales Report and Thursday's New Home Sales Report.
Remember: Inflation is the arch enemy of Bonds and home loan rates, and even the mention of it can have negative ramifications.
I recall the early 1980's and the high interest rates. That was very hard time to be buyer. And a miserable time to be a seller. So why is it hard to be a buyer or a Seller today? Because the lending sector has not gotten back on the horse yet. They have to pick themselves up and dust off and get back in the saddle. The funding of loans is still the crux of the financial turbulence we are struggling to overcome.
The Heat is On for Mortgages.
Homes are on sale, sellers are motivated, and interest rates are at historic lows...but may not stay that way, which means it makes sense to get moving on that home purchase or refinance you've been contemplating. But if you (as one of my clients) are among the smart individuals who are going ahead and taking advantage of the low home loan rates to be had right now, there are a few things to be aware of.
With interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.
Sound crazy? No crazier than when you go to buy that hot new vehicle...only to find that there is no price negotiation. In fact, you wind up lucky to just pay the sticker price, as the demand usually allows the Dealer to add a markup to the price. And you don't get the car right away; you have to wait on a list for your turn to come up.
Right now, home loans are like that hot new car - but with the timer ticking on interest rates locks, there are a few things you can do to protect yourself.
First, longer lock in time frames than might normally have been considered are a necessity, to ensure that the file has time to be processed, underwritten, approved and closed in time to protect the rate lock in this extremely volatile climate. And that longer, safer lock-in period may be a bit more costly - but it's money well spent. Overall, the mind set here should not be one of greed. Don't try to squeeze every last drop out of rates. If you are within a quarter percent of the lowest rates offered in the history of this country, you did very well. And rates always shoot up higher at a much faster pace than when then dip lower. So if the savings or opportunity make sense - grab it.
Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.
Finally, be aware that it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Giant mortgage buyers Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning that even credit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fees by Fannie and Freddie. And based on the way lenders have changed their rate sheets over time, there is now very little "premium pricing", which used to allow options for fees like these, points or other closing costs to be covered in return for a slightly higher interest rate.
Right now is still an excellent time to act, before the great low rates of today get away from us. But let's be smart - get started right away on your Loan Approval process.
Keep in mind that the Pre-Approval for an Income Property needs the property info as well to be part of the package. Therefore it is a matching of the property financial porforma and the buyer financials AND of the lender package. The non-conforming type property is currently extremely hard pressed to find a lender at all.
Call me to review what is working as a good investment in the West Los Angeles areas.
Keith Lambert
310-391-0821
Inflation chatter could come around again this week, as the Fed will be holding their regularly scheduled meetings on Tuesday and Wednesday, with their Policy Statement and decision regarding the Fed Funds Rate coming on Wednesday. Remember, the Fed made history last month when they slashed the Fed Funds Rate by .75% to the lowest target range in history of 0% to .25%. The chart below shows an interesting history of the Fed Funds Rate since 1955.
Other potential market movers include Friday's Gross Domestic Product (GDP) Report. GDP is the broadest measure of economic activity, and given the state of our economy, a negative report might not be too much of a surprise. In addition, Thursday's Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc) will give us a read on consumer and business consumption and buying behavior. We'll also get a look at the housing market this week with Monday's Existing Home Sales Report and Thursday's New Home Sales Report.
Remember: Inflation is the arch enemy of Bonds and home loan rates, and even the mention of it can have negative ramifications.
I recall the early 1980's and the high interest rates. That was very hard time to be buyer. And a miserable time to be a seller. So why is it hard to be a buyer or a Seller today? Because the lending sector has not gotten back on the horse yet. They have to pick themselves up and dust off and get back in the saddle. The funding of loans is still the crux of the financial turbulence we are struggling to overcome.
The Heat is On for Mortgages.
Homes are on sale, sellers are motivated, and interest rates are at historic lows...but may not stay that way, which means it makes sense to get moving on that home purchase or refinance you've been contemplating. But if you (as one of my clients) are among the smart individuals who are going ahead and taking advantage of the low home loan rates to be had right now, there are a few things to be aware of.
With interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.
Sound crazy? No crazier than when you go to buy that hot new vehicle...only to find that there is no price negotiation. In fact, you wind up lucky to just pay the sticker price, as the demand usually allows the Dealer to add a markup to the price. And you don't get the car right away; you have to wait on a list for your turn to come up.
Right now, home loans are like that hot new car - but with the timer ticking on interest rates locks, there are a few things you can do to protect yourself.
First, longer lock in time frames than might normally have been considered are a necessity, to ensure that the file has time to be processed, underwritten, approved and closed in time to protect the rate lock in this extremely volatile climate. And that longer, safer lock-in period may be a bit more costly - but it's money well spent. Overall, the mind set here should not be one of greed. Don't try to squeeze every last drop out of rates. If you are within a quarter percent of the lowest rates offered in the history of this country, you did very well. And rates always shoot up higher at a much faster pace than when then dip lower. So if the savings or opportunity make sense - grab it.
Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.
Finally, be aware that it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Giant mortgage buyers Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning that even credit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fees by Fannie and Freddie. And based on the way lenders have changed their rate sheets over time, there is now very little "premium pricing", which used to allow options for fees like these, points or other closing costs to be covered in return for a slightly higher interest rate.
Right now is still an excellent time to act, before the great low rates of today get away from us. But let's be smart - get started right away on your Loan Approval process.
Keep in mind that the Pre-Approval for an Income Property needs the property info as well to be part of the package. Therefore it is a matching of the property financial porforma and the buyer financials AND of the lender package. The non-conforming type property is currently extremely hard pressed to find a lender at all.
Call me to review what is working as a good investment in the West Los Angeles areas.
Keith Lambert
310-391-0821
Monday, January 19, 2009
New season is emerging!
The Seasons Change. The President Changes. (Tomorrow!) So this quote is on point:
"LIVE EACH SEASON AS IT PASSES." Henry David Thoreau.
In the Markets: Last week saw the start of earnings season for the fourth quarter of 2008, and this is likely to be one earnings season everyone hopes passes quickly.
The beleaguered banking sector was in the spotlight throughout the week, as Citigroup reported an $8.29 Billion loss, completing its worst year ever since its inception in 1812. Bank of America also lost $1.79 Billion in the fourth quarter, making 2008 the bank's first yearly loss in 17 years. And the news extended overseas as Deutsche Bank, which is Germany's largest bank, warned of a fourth-quarter loss of $6.3 Billion.
There were a few bright spots to note during the week, however, as JP Morgan Chase surprised the market with an earnings report that beat expectations...it's been awhile since a financial Stock actually surprised to the good side! In addition, Bank of America received a lifeline of $138 Billion from the government's $700 Billion rescue fund to help absorb their purchase of Merrill Lynch.
And in inflation - or lack thereof - headlines, the Consumer Price Index for 2008 was reported the lowest since 1954, indicating that inflation is definitely not a threat at this time.
Lending it the part that needs to be resurrected in time to keep the wheels of commerce and the real estate industry moving ahead. They have changed many of the systems in recent months to enable the resale of loans to happen in new more scrutinized fashion. But that also has other troubles for the not so standard property. If it does not fit the forms and the standard check boxes of the new resellers marketing program, it will not qualify for a loan and therefore further depress the real estate market with unsellable inventory clogging the marketplace.
As I learn more on the lending situation I will post the details. Remember, while Bonds and home loan rates are still at historic levels, there will be some volatile changes due to the many variables affecting the markets.
For now, lenders are requiring serious cash for your down payment on a home or income property. No lender wants to see a property go upside down on a further drop in value. But likewise for the Contrarian among us it may be a good time to pick up a cheap deal.
Glad to be of help.
Kieth
www.REList.net
"LIVE EACH SEASON AS IT PASSES." Henry David Thoreau.
In the Markets: Last week saw the start of earnings season for the fourth quarter of 2008, and this is likely to be one earnings season everyone hopes passes quickly.
The beleaguered banking sector was in the spotlight throughout the week, as Citigroup reported an $8.29 Billion loss, completing its worst year ever since its inception in 1812. Bank of America also lost $1.79 Billion in the fourth quarter, making 2008 the bank's first yearly loss in 17 years. And the news extended overseas as Deutsche Bank, which is Germany's largest bank, warned of a fourth-quarter loss of $6.3 Billion.
There were a few bright spots to note during the week, however, as JP Morgan Chase surprised the market with an earnings report that beat expectations...it's been awhile since a financial Stock actually surprised to the good side! In addition, Bank of America received a lifeline of $138 Billion from the government's $700 Billion rescue fund to help absorb their purchase of Merrill Lynch.
And in inflation - or lack thereof - headlines, the Consumer Price Index for 2008 was reported the lowest since 1954, indicating that inflation is definitely not a threat at this time.
Lending it the part that needs to be resurrected in time to keep the wheels of commerce and the real estate industry moving ahead. They have changed many of the systems in recent months to enable the resale of loans to happen in new more scrutinized fashion. But that also has other troubles for the not so standard property. If it does not fit the forms and the standard check boxes of the new resellers marketing program, it will not qualify for a loan and therefore further depress the real estate market with unsellable inventory clogging the marketplace.
As I learn more on the lending situation I will post the details. Remember, while Bonds and home loan rates are still at historic levels, there will be some volatile changes due to the many variables affecting the markets.
For now, lenders are requiring serious cash for your down payment on a home or income property. No lender wants to see a property go upside down on a further drop in value. But likewise for the Contrarian among us it may be a good time to pick up a cheap deal.
Glad to be of help.
Kieth
www.REList.net
Monday, January 12, 2009
New LII Listing on Keystone - 11 Units
Lambert Investments has a new listing at 3623 Keystone Ave.
A basic Palms neighborhood apartment building. Built in 1960. 11 units. 6 one bedrooms and 5 bachelors. With a very good gross annual income of $111,884.
Mellow apartment lined street.
Very clean area. Easy to rent. Strong west side demand.
This is why it is a good long term investment opportunity.
Call me if you want an agent to help you buy this property.
Keith L.
310-391-0821
A basic Palms neighborhood apartment building. Built in 1960. 11 units. 6 one bedrooms and 5 bachelors. With a very good gross annual income of $111,884.
Mellow apartment lined street.
Very clean area. Easy to rent. Strong west side demand.
This is why it is a good long term investment opportunity.
Call me if you want an agent to help you buy this property.
Keith L.
310-391-0821
Wednesday, January 07, 2009
Tuesday Broker Caravan
Wow. On Tuesday Jan 6the the number of brokers open houses was abysmal. Very few.
There is inventory. But maybe there is just few new ones. The few that were open I had ether seen or were dogs that I could not recommend anyone buy.
I wonder if other agents felt the same or if they were all out of town getting some runs on the slopes?
IMHO Keith L.
There is inventory. But maybe there is just few new ones. The few that were open I had ether seen or were dogs that I could not recommend anyone buy.
I wonder if other agents felt the same or if they were all out of town getting some runs on the slopes?
IMHO Keith L.
Wednesday, December 24, 2008
Take a differing path to wealth. Question the Social Norm.
Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are even incapable of forming such opinions. - Albert Einstein
No mater how I try to explain it ... A stock broker or trader will not understand or "get" what I'm talking about when I say that there is to0 much money in the stock markets chasing to few companies of value. Over capitalized to the extreme. Maybe it is prejudices of the stock market environment or mentality.
Then to compound that failure to get it... The companies that do not pay the owners (no stock dividends paid out now or ever) are (in my opinion) a loosing cause to own. As if to say that if the business does not pay it's owners then why own them. And the Stock guy says "because I can sell the stock for more money in the future." AND I contend that the fact that there is a Next Bigger Fool does not make the company that valuable.
I feel that an asset needs to have a value and a cash flow that leads to the values. If the overhead, weather it be salary for overpaid executives in jets or the costs of a plumber for an apartment building, gets to high then there is little or no profit that year. But if you get the costs down and still get the revenues (rents) then you make money and the owners (or stockholders) get their share.
If a company is "Public" and investors buy those stocks to hold, why does it seem ok for them to pay employees more then they owners? Executive salaries that include stock and perks and golden whatnot's. And the Boards allow this?!? The general populous of America has been duped. We watch "Who Wants to be a Millionaire" and dream of the stock market carrying us off into retirement bliss.
Surprise! It was a House of Cards. House built on Sand.
If you want real security you really need a foundation that stays put. Buy some real Estate that is income producing like an apartment building and treat your tenants well AND they will pay you every month on the first.
If you want my help, call me, I'll show you how to make it pencil out.
Keith L.
Sunday, December 21, 2008
Planning for the future L A City and LAX
In the news:
Palmdale... Are you kidding. All those homes out there are struggling the worst for the economic downturn. The big push never produced the Intercontinental airport.
Orange County had the chance to turn the old base into a good airport.
Long Beach is trying to take some traffic but pilots are forced to do wild maneuvers on takeoff and shut down early in the evening so not to disturb residents to much.
So the LAX situation will remain a divisive point for those who live near it. In Westchester. But for the rest of us Angelinos we are thankful to have one of the best sources of travel into and out of the states on our back doorstep.
The LAX Airport is a vital part of the Los Angeles economy. Needed and used by a lot of business. From international shipping to Hollywood movie stars. And all the other vacationers into and out of Los Angeles and the USA in general.
We are over 40 million passengers and the holiday travel blitz is upon us. Thank goodness the fuel charges are down. Thank goodness those Controllers in the towers keep the pilots sorted out and traffic smoothly flowing into and out of LA. Keep bringing those tourists to Disneyland and Universal Studios and Venice Beach.
Even if we were supposed to get some relief from a neighboring city, it is nice to have all that business helping this local economy. And our Real Estate values. And our rent rolls in our many rental apartment buildings.
It is the Season to be Thankful. I am thankful for LAX and it's big industrious infusion to the Los Angeles economy.
Keith Lambert
www.REList.net
LAWA/City of LA celebrated its first 40 millionth passenger of the year. The 40 million number is significant because after the 40 millionth passenger of the year was reached, the overflow was supposed to be handled by Palmdale Intercontinental Airport
Palmdale... Are you kidding. All those homes out there are struggling the worst for the economic downturn. The big push never produced the Intercontinental airport.
Orange County had the chance to turn the old base into a good airport.
Long Beach is trying to take some traffic but pilots are forced to do wild maneuvers on takeoff and shut down early in the evening so not to disturb residents to much.
So the LAX situation will remain a divisive point for those who live near it. In Westchester. But for the rest of us Angelinos we are thankful to have one of the best sources of travel into and out of the states on our back doorstep.
The LAX Airport is a vital part of the Los Angeles economy. Needed and used by a lot of business. From international shipping to Hollywood movie stars. And all the other vacationers into and out of Los Angeles and the USA in general.
We are over 40 million passengers and the holiday travel blitz is upon us. Thank goodness the fuel charges are down. Thank goodness those Controllers in the towers keep the pilots sorted out and traffic smoothly flowing into and out of LA. Keep bringing those tourists to Disneyland and Universal Studios and Venice Beach.
Even if we were supposed to get some relief from a neighboring city, it is nice to have all that business helping this local economy. And our Real Estate values. And our rent rolls in our many rental apartment buildings.
It is the Season to be Thankful. I am thankful for LAX and it's big industrious infusion to the Los Angeles economy.
Keith Lambert
www.REList.net
Friday, December 19, 2008
Will our American Business' Leaders ever learn?
I found a very good bit that really sums it up. We have produced bad results over and over again by making same mistakes over and over.
Part of that Garbage in get Garbage out type thing. Pay people to produce the wrong result and get the worst case end result. Over and Over and Over again. Planing and thinking must change to be 3 and 5 year and even to 10 year best results. Or go buy some Lotto tickets and try to win on the really short term. With longer goals and better real planning We can be better than the offshore businesses. But if we are only interested in the next quarterly result... Same old bad decisions to get paid.
See http://blogs.bnet.com/ceo/?p=1576 "When Will We Ever Learn?"
It is short and covers the topic well. BNet is good stuff.
Keith L.
Part of that Garbage in get Garbage out type thing. Pay people to produce the wrong result and get the worst case end result. Over and Over and Over again. Planing and thinking must change to be 3 and 5 year and even to 10 year best results. Or go buy some Lotto tickets and try to win on the really short term. With longer goals and better real planning We can be better than the offshore businesses. But if we are only interested in the next quarterly result... Same old bad decisions to get paid.
See http://blogs.bnet.com/ceo/?p=1576 "When Will We Ever Learn?"
It is short and covers the topic well. BNet is good stuff.
Keith L.
Tuesday, December 16, 2008
Better loans available ?
Bonds and home loan rates spent last week testing their previous best levels of 2008, and finally rallied on Friday to reach their best levels not just of 2008 but of the last five years. Stocks, meanwhile, were under pressure throughout the week waiting to see whether Congress would approve emergency loans for GM and Chrysler. While the House of Representatives approved the measure Wednesday evening, the Senate rejected the $14 billion bailout for the US automakers on Thursday evening, citing a lack of wage concessions by the United Auto Workers (UAW). Friday, the White House announced that the government may be willing to use Troubled Assets Relief Program (TARP) funds to prevent an immediate collapse of the auto industry. One thing we can be sure of in this matter is that the volatility for both Stocks and Bonds will continue while this issue remains unresolved.
There were other important happenings in Washington to note last week. Five members of the House Financial Services Committee are sponsoring a bill that would force the SEC to reinstate the uptick rule. The uptick rule is a former rule established by the SEC that requires every short sale transaction to be entered at a price that is higher than the price of the previous trade. So what would the reinstatement of the uptick rule mean for Bonds and home loan rates? The reinstatement of the uptick rule would do a lot to quiet the excessive volatility in both Stocks and Bonds.
In other important news to note last week, the Retail Sales report for November showed that retail sales fell for a fifth straight month. Meanwhile, Initial Jobless Claims reached their highest level in 26 years. Both of these reports are indicative of the current economic climate, and given the events of the week in Washington, they had minimal impact on Bonds and home loan rates.
As mentioned above, Bonds and home loan rates rallied Friday afternoon to reach their best levels of the year. As a result, they ended the week .25 percent better than where they began. There may be an opportunity for you to reduce your home loan payments if you were looking to Refinance.
Let me know if you need a referral to a great Loan Broker who can get you the best rates.
Keith
310-391-0821
There were other important happenings in Washington to note last week. Five members of the House Financial Services Committee are sponsoring a bill that would force the SEC to reinstate the uptick rule. The uptick rule is a former rule established by the SEC that requires every short sale transaction to be entered at a price that is higher than the price of the previous trade. So what would the reinstatement of the uptick rule mean for Bonds and home loan rates? The reinstatement of the uptick rule would do a lot to quiet the excessive volatility in both Stocks and Bonds.
In other important news to note last week, the Retail Sales report for November showed that retail sales fell for a fifth straight month. Meanwhile, Initial Jobless Claims reached their highest level in 26 years. Both of these reports are indicative of the current economic climate, and given the events of the week in Washington, they had minimal impact on Bonds and home loan rates.
As mentioned above, Bonds and home loan rates rallied Friday afternoon to reach their best levels of the year. As a result, they ended the week .25 percent better than where they began. There may be an opportunity for you to reduce your home loan payments if you were looking to Refinance.
Let me know if you need a referral to a great Loan Broker who can get you the best rates.
Keith
310-391-0821
Tuesday, December 09, 2008
Market Forces... Moving for the better on some fronts
The Fed has indicated that they would like to be a buyer of Mortgage Bonds, which has resulted in attractive, lower rates right now. But as stated above, the trading environment is extremely volatile, and opportunities to capitalize on lower rates that make sense should be taken advantage of. There have been recent rumors of interest rates being brought down towards 4.5% by the Treasury. This irresponsible release included no definitive plan, no indication of who might qualify, or what the restrictions would be. Like many other recent legislative "solutions", the restrictions might be very tight, with income limits set very low, and as a result, helping very few people. Remember, it may make sense for you to act now, and take advantage of current historically low rates...with the possibility of refinancing should rates decline further.
In other news to note from last week, the Bank of England and the European Central Bank both cut their key benchmark interest rates in an effort to revive their sagging economies. The reduction in rates was expected as part of a global coordinated effort, and our Fed is widely expected to cut its benchmark rate during its meeting on December 16. While a cut by the Fed often causes home loan rates to rise - because a Fed rate cut can lead to inflation, which is the arch enemy of Bonds and home loan rates - the deflationary environment we are currently in may prevent home loan rates from worsening significantly after the Fed cut. This is going to bode well for all those apartment building loans tied to the LIBOR rates. Personally I'm Loving this.
Bonds and home loan rates tested their best levels of 2008 throughout last week, but could not improve beyond them. As a result, Bonds and home loan rates ended the week slightly worse than where they began... even in the midst of rumors of rates declining as mentioned above.
GAS PRICES SURE HIT A RECORD EARLIER THIS YEAR, BUT NOW THAT THEY HAVE IMPROVED! I have seen multiple stations here in Los Angeles with all 3 prices under $2.00. I did not think I would see these prices again in my lifetime. I thought for sure that once the consumer public had gotten used to $3.00 plus gas that it would never come down.
So what market forces are making me feel better today? Gas at a reasonable price & the loans on some apartment buildings some clients have are about to become cheaper and more affordable for their operating budgets. (and I manage some of those)
Those are very good things.
Think of all the handymen and service guys like plumbers who service apartments and homes all across America... Cheaper gas means they may afford better holiday gifts for their kids and wives this month!
Very good things.
Keith L.
In other news to note from last week, the Bank of England and the European Central Bank both cut their key benchmark interest rates in an effort to revive their sagging economies. The reduction in rates was expected as part of a global coordinated effort, and our Fed is widely expected to cut its benchmark rate during its meeting on December 16. While a cut by the Fed often causes home loan rates to rise - because a Fed rate cut can lead to inflation, which is the arch enemy of Bonds and home loan rates - the deflationary environment we are currently in may prevent home loan rates from worsening significantly after the Fed cut. This is going to bode well for all those apartment building loans tied to the LIBOR rates. Personally I'm Loving this.
Bonds and home loan rates tested their best levels of 2008 throughout last week, but could not improve beyond them. As a result, Bonds and home loan rates ended the week slightly worse than where they began... even in the midst of rumors of rates declining as mentioned above.
GAS PRICES SURE HIT A RECORD EARLIER THIS YEAR, BUT NOW THAT THEY HAVE IMPROVED! I have seen multiple stations here in Los Angeles with all 3 prices under $2.00. I did not think I would see these prices again in my lifetime. I thought for sure that once the consumer public had gotten used to $3.00 plus gas that it would never come down.
So what market forces are making me feel better today? Gas at a reasonable price & the loans on some apartment buildings some clients have are about to become cheaper and more affordable for their operating budgets. (and I manage some of those)
Those are very good things.
Think of all the handymen and service guys like plumbers who service apartments and homes all across America... Cheaper gas means they may afford better holiday gifts for their kids and wives this month!
Very good things.
Keith L.
Thursday, December 04, 2008
Hot news on the market conditions today… See these story headlines!
Treasury mulls plan to lower mortgage rates to 4.5%
Move would help homeowners and buyers with good credit, but would do little for troubled borrowers
http://money.cnn.com/2008/12/03/news/economy/treasury_mortgage_rates/index.htm?postversion=2008120319
How long will the recession last?
Longer than past downturns, and Wall Street's meltdown will slow the recovery…
http://money.cnn.com/2008/12/03/news/economy/karydakis.recession.fortune/index.htm
The details include:
So a Gradual Recovery is what to expect. Do not look for a specific marker to show you the bottom of the market. There will not be one. Pull your Cash together and let’s buy you an income producing property.
Call me to review your financial options in dependable Los Angeles residential income properties.
Keith Lambert
310-391-0821
www.REList.net
Move would help homeowners and buyers with good credit, but would do little for troubled borrowers
http://money.cnn.com/2008/12/03/news/economy/treasury_mortgage_rates/index.htm?postversion=2008120319
How long will the recession last?
Longer than past downturns, and Wall Street's meltdown will slow the recovery…
http://money.cnn.com/2008/12/03/news/economy/karydakis.recession.fortune/index.htm
The details include:
…the fact that the recession is now already 12 months old, and clearly not approaching its trough yet, raises the distinct prospect that it will exceed the length of the 1973-75 and 1981-82 recessions (both at 16 months), making it the longest since the Great Depression (43 months, from August 1929 to March 1933). The crowd fond of making comparisons to the Great Depression will be quick to declare some kind of victory on this one.
Second, the prediction that this recession may end around the middle of 2009 is not unreasonable, but even if accurate it disguises the critical question: What kind of a recovery is likely to follow? The answer is: probably a gradual one, unlike the more typical (but not universal) pattern of the economy coming out of most past recessions roaring ahead, propelled by pent-up consumer demand.
The healing process of a deeply wounded banking system, that has already led to nearly $1 trillion of write-downs, will act as a weight around the neck of any economic recovery in the latter part of 2009. Banks will likely continue the slow process of recapitalization and cleaning up…
So a Gradual Recovery is what to expect. Do not look for a specific marker to show you the bottom of the market. There will not be one. Pull your Cash together and let’s buy you an income producing property.
Call me to review your financial options in dependable Los Angeles residential income properties.
Keith Lambert
310-391-0821
www.REList.net
Tuesday, November 25, 2008
Looking to move $ where? When? How Long?
"THE IMPORTANT THING IN THIS WORLD IS NOT SO MUCH WHERE WE STAND, AS IN WHAT DIRECTION WE ARE MOVING." Oliver Wendell Holmes.
And what direction is our economy moving?
After years of being concerned about inflation, the Fed is now concerned about deflation. So what exactly is deflation? Deflation is when prices drop, which generally is due to lack of demand, and therefore lack of pricing power. With the economy slowing down, we are hearing economists forecast that we may be in for a deflationary recession. In a deflationary environment, investors flee into fixed instruments like Bonds, because the fixed payment received would actually buy them more goods and services over time as prices decline.
So what does this mean for home loan rates? Remember, home loan rates improve as Bond pricing moves higher - and more demand for Bonds would mean higher prices for Bonds. In the spring of 2003, when Alan Greenspan uttered the "D" word, deflation, Bonds rallied 400bp in just a few weeks, bringing a significant drop in home loan rates. Of course, the economy is different right now, but as more money may be headed towards Bonds in a deflationary environment, we could again see a significant improvement in home loan rates down the road.
On the inflation front, last week's Producer Price Index indicated that wholesale inflation plummeted last month - by the most since records began in 1947 - largely due to declines in energy prices. In addition, the Consumer Price Index showed that inflation at the consumer level fell by a record 1.0%, thanks again to lower costs of energy.
When it comes to the direction the economy is heading, the week did end with some hopeful news. Federal Reserve President Jeffrey Lacker said that an economic recovery could begin in 2009 as low interest rates, low energy prices, and less drag from the housing sector may shore up spending. In the meantime, Bonds and home loan rates spent much of last week trading near a key level of technical support called the 200-Day Moving Average, finally moving and staying above this level on Friday. As a result, Bonds and home loan rates ended the week unchanged to slightly better than where they began.
Secure Rents make investing in Apartment buildings, in the best areas of Los Angeles, a great option if you have the cash. If you do not want to just keep it in cash and want to get in on the Buyers Market we are in. And definitely if you are thinking to hold longer then 5 years, you really will do well in this market.
IMHO Keith L.
310-391-0821
Keith @ LambertInc. com
(remove spaces to use above email)
And what direction is our economy moving?
After years of being concerned about inflation, the Fed is now concerned about deflation. So what exactly is deflation? Deflation is when prices drop, which generally is due to lack of demand, and therefore lack of pricing power. With the economy slowing down, we are hearing economists forecast that we may be in for a deflationary recession. In a deflationary environment, investors flee into fixed instruments like Bonds, because the fixed payment received would actually buy them more goods and services over time as prices decline.
So what does this mean for home loan rates? Remember, home loan rates improve as Bond pricing moves higher - and more demand for Bonds would mean higher prices for Bonds. In the spring of 2003, when Alan Greenspan uttered the "D" word, deflation, Bonds rallied 400bp in just a few weeks, bringing a significant drop in home loan rates. Of course, the economy is different right now, but as more money may be headed towards Bonds in a deflationary environment, we could again see a significant improvement in home loan rates down the road.
On the inflation front, last week's Producer Price Index indicated that wholesale inflation plummeted last month - by the most since records began in 1947 - largely due to declines in energy prices. In addition, the Consumer Price Index showed that inflation at the consumer level fell by a record 1.0%, thanks again to lower costs of energy.
When it comes to the direction the economy is heading, the week did end with some hopeful news. Federal Reserve President Jeffrey Lacker said that an economic recovery could begin in 2009 as low interest rates, low energy prices, and less drag from the housing sector may shore up spending. In the meantime, Bonds and home loan rates spent much of last week trading near a key level of technical support called the 200-Day Moving Average, finally moving and staying above this level on Friday. As a result, Bonds and home loan rates ended the week unchanged to slightly better than where they began.
Secure Rents make investing in Apartment buildings, in the best areas of Los Angeles, a great option if you have the cash. If you do not want to just keep it in cash and want to get in on the Buyers Market we are in. And definitely if you are thinking to hold longer then 5 years, you really will do well in this market.
IMHO Keith L.
310-391-0821
Keith @ LambertInc. com
(remove spaces to use above email)
Tuesday, November 18, 2008
Uncertainty or are we going to go shopping?
“NOBODY LIKES THE BRINGER OF BAD NEWS."
- Ancient Greek playwright Sophocles.
Last week was far from quiet as financial markets reacted to several pieces of bad economic news brought throughout the week.
The week began with the news that Circuit City filed for Chapter 11 Bankruptcy, and will be closing 150 stores - and this in advance of the holiday season, when most retailers make a larger portion of their profits for the year. Department store Nordstrom reported its growth rate is down 16%, where they were expecting an increase of 10%. Poor economic reports from Best Buy and Macy's followed a few days later, as well as lower future earnings guidance from Wal-Mart and Intel. As if the headlines of the week weren't enough, Friday's Retail Sales report showed that overall retail sales fell for the fourth straight month and plunged to their worst level since record keeping began in 1992. Looks like a pretty dismal holiday shopping season ahead...probably the worst that retailers will have seen in a long, long time.
In addition, there was bad news for the automobile industry as Deutsche Bank downgraded shares of General Motors from hold to sell, giving a price target of $0...yes, $0. As a result, General Motors stock fell below $3 for the first time since April 13, 1943. Interestingly enough, the automaker was not even making cars at that time but producing only military equipment for WWII.
And the bad news continued on the job front as well, as the Initial Jobless Claims report revealed the highest number of first time unemployment claim since 2001. In addition, Continuing Jobless Claims reached their highest level in 25 years. Remember, poor economic news and a weak labor market usually cause Bonds and home loan rates to improve. This is because fewer jobs and lower confidence about keeping or finding work causes people to spend less. In turn, businesses and retailers lose pricing power, and this is a cycle that keeps inflation - the arch enemy of Bonds and home loan rates - at low levels, especially if oil remains near present reasonable prices.
However, despite all the bad economic news of the week, Bonds and home loan rates were unable to make significant improvements this week
So what do we make of all this? Just look at the big adverts from a very famous local version of "The Donald" with big color adverts in the Sunday LA Times on multiple pages saying "I'm Buying" and looking to make a few big deals while he has cash and most do not.
Yes there is uncertainty. But there is certainly more to be made in the Income Property realm of investing than in today's stock market.
IMHO Keith Lambert
310-391-0821
- Ancient Greek playwright Sophocles.
Last week was far from quiet as financial markets reacted to several pieces of bad economic news brought throughout the week.
The week began with the news that Circuit City filed for Chapter 11 Bankruptcy, and will be closing 150 stores - and this in advance of the holiday season, when most retailers make a larger portion of their profits for the year. Department store Nordstrom reported its growth rate is down 16%, where they were expecting an increase of 10%. Poor economic reports from Best Buy and Macy's followed a few days later, as well as lower future earnings guidance from Wal-Mart and Intel. As if the headlines of the week weren't enough, Friday's Retail Sales report showed that overall retail sales fell for the fourth straight month and plunged to their worst level since record keeping began in 1992. Looks like a pretty dismal holiday shopping season ahead...probably the worst that retailers will have seen in a long, long time.
In addition, there was bad news for the automobile industry as Deutsche Bank downgraded shares of General Motors from hold to sell, giving a price target of $0...yes, $0. As a result, General Motors stock fell below $3 for the first time since April 13, 1943. Interestingly enough, the automaker was not even making cars at that time but producing only military equipment for WWII.
And the bad news continued on the job front as well, as the Initial Jobless Claims report revealed the highest number of first time unemployment claim since 2001. In addition, Continuing Jobless Claims reached their highest level in 25 years. Remember, poor economic news and a weak labor market usually cause Bonds and home loan rates to improve. This is because fewer jobs and lower confidence about keeping or finding work causes people to spend less. In turn, businesses and retailers lose pricing power, and this is a cycle that keeps inflation - the arch enemy of Bonds and home loan rates - at low levels, especially if oil remains near present reasonable prices.
However, despite all the bad economic news of the week, Bonds and home loan rates were unable to make significant improvements this week
So what do we make of all this? Just look at the big adverts from a very famous local version of "The Donald" with big color adverts in the Sunday LA Times on multiple pages saying "I'm Buying" and looking to make a few big deals while he has cash and most do not.
Yes there is uncertainty. But there is certainly more to be made in the Income Property realm of investing than in today's stock market.
IMHO Keith Lambert
310-391-0821
Monday, November 03, 2008
The market just before election time...
“TAKE TIME TO DELIBERATE; BUT WHEN THE TIME FOR ACTION ARRIVES… STOP THINKING AND GO IN.”
- Napoleon Bonaparte.
Taking action after deliberating was exactly what the Fed did last week, when they cut the Fed Funds Rate by .50%, lowering it to 1.00%.
Why did the Fed take action last week, after it had already lowered the Fed Funds Rate by .50% on October 8 in a coordinated effort with other central banks? To continue to help ease the credit crisis, and prevent a long and severe global recession. In fact, several foreign central banks followed the Fed's lead again last week, with Hong Kong cutting their lending rate by .50%, Taiwan cutting by .25%, and Japan cutting by .20%. This is important because cuts by other nations help stabilize the US Dollar, which typically loses ground after our Fed cuts rates, because of the lower yield offered comparatively offered in the US. Another interesting point to note: since oil is Dollar denominated, the price per barrel typically jumps after our Fed cuts rates, because of the decline in the value of the Dollar. The cuts by other central banks should keep oil…and gas prices, in turn…from skyrocketing again.
Another reason the Fed took action: The Fed’s statement discounted threats of inflation, saying that slowing economic growth should lower inflation pressures over time, but added that downside risks to economic growth remain. And last week’s negative Gross Domestic Product reading is confirmation that things have slowed quite a bit. Although experts have speculated that the US may already be in a recession, the first hardcore signs appeared when the Third Quarter Advance GDP report showed that consumer spending declined at the fastest pace in 28 years. The report also reflected the largest quarterly decline since the end of the last recession in 2001.
So what did all of this mean for Bonds and home loan rates last week? After worsening early in the week, Bonds and home loan rates attempted to stabilize by week end. And while it was a treat that Bonds did bounce off an important level of technical support, home loan rates still ended the week nearly .125-.25% worse than where they began.
Very few income properties are on the REO (Real Estate Owned by a bank) lists. Unless you go to areas like Henderson NV or Plamdale or Chula Vista where the rental of units has a very low revenue base. If the rents drop so that you can not make the mortgage... and/or the buyer is unsophisticated (or corrupt)giving a investment property back to the bank is very rare.
Amateur speculation in the single family home rental market is another matter.
Time will tell. Sound Investing in positive cash flowing income properties is what I recommend. Loan rates are good now. But for how much longer?
So to whoever wins the White House tomorrow, may God bless his political advisers with some great insight and clear vision.
Because of the down economy I am making a strong recommendation that you vote NO on any bond item on the ballot tomorrow. We do not have the excess state/county/city revenues to handle more debt now.
My 2 cents.
Keith L.
www.REList.net
- Napoleon Bonaparte.
Taking action after deliberating was exactly what the Fed did last week, when they cut the Fed Funds Rate by .50%, lowering it to 1.00%.
Why did the Fed take action last week, after it had already lowered the Fed Funds Rate by .50% on October 8 in a coordinated effort with other central banks? To continue to help ease the credit crisis, and prevent a long and severe global recession. In fact, several foreign central banks followed the Fed's lead again last week, with Hong Kong cutting their lending rate by .50%, Taiwan cutting by .25%, and Japan cutting by .20%. This is important because cuts by other nations help stabilize the US Dollar, which typically loses ground after our Fed cuts rates, because of the lower yield offered comparatively offered in the US. Another interesting point to note: since oil is Dollar denominated, the price per barrel typically jumps after our Fed cuts rates, because of the decline in the value of the Dollar. The cuts by other central banks should keep oil…and gas prices, in turn…from skyrocketing again.
Another reason the Fed took action: The Fed’s statement discounted threats of inflation, saying that slowing economic growth should lower inflation pressures over time, but added that downside risks to economic growth remain. And last week’s negative Gross Domestic Product reading is confirmation that things have slowed quite a bit. Although experts have speculated that the US may already be in a recession, the first hardcore signs appeared when the Third Quarter Advance GDP report showed that consumer spending declined at the fastest pace in 28 years. The report also reflected the largest quarterly decline since the end of the last recession in 2001.
So what did all of this mean for Bonds and home loan rates last week? After worsening early in the week, Bonds and home loan rates attempted to stabilize by week end. And while it was a treat that Bonds did bounce off an important level of technical support, home loan rates still ended the week nearly .125-.25% worse than where they began.
Very few income properties are on the REO (Real Estate Owned by a bank) lists. Unless you go to areas like Henderson NV or Plamdale or Chula Vista where the rental of units has a very low revenue base. If the rents drop so that you can not make the mortgage... and/or the buyer is unsophisticated (or corrupt)giving a investment property back to the bank is very rare.
Amateur speculation in the single family home rental market is another matter.
Time will tell. Sound Investing in positive cash flowing income properties is what I recommend. Loan rates are good now. But for how much longer?
So to whoever wins the White House tomorrow, may God bless his political advisers with some great insight and clear vision.
Because of the down economy I am making a strong recommendation that you vote NO on any bond item on the ballot tomorrow. We do not have the excess state/county/city revenues to handle more debt now.
My 2 cents.
Keith L.
www.REList.net
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