Musical Houses

Musical Houses Part 1
    More and more these days it seems we hear on the news about the housing “crisis”, while it is a crisis for so many, for some it is a way to become richer and richer. At the end of this correction, I believe we will see that once again, the losers are the tax payers, and our future generations, who will have to pick up the pieces.
Let’s analyze how this situation plays out. Through a little game I like to call “Musical Houses”.
    How can you play the game so that you can become richer, and hopefully pass some of it down to your descendants? Like it or not, future generations will be holding the bag of debt created by the crooks. I firmly believe that unless the banks and politicians take an active role in creating good will towards the people, (make no mistake there were a lot of crooked things that brought on the housing crisis of 2009 that are still lingering today, barring the illusive individuals that would be impossible to track down, the Banks and the Government had equally guilty roles) I believe the following series is how the next 5-10 years will play out. Investors will become richer, people will rebuild their financial situation, and the banks, being “too big to fail” will continue to get bail outs from our bankrupt government, and future generations will ultimately inherit this debt, because our generation will not live long enough to pay it back.
Let’s make believe were playing this game in Southern California. And we have 50,000 people playing, and there’s only 49,999 “Chairs”.
    Clarence and Julie are our homeowners that bought their house in 2008, life was good and they could easily afford the payments for the house that they bought for 399,000. In fact they paid 80,000.00 down, and their house was worth, according to the banks appraiser, it was worth 415,000. They thought they did really well because after all they had no knowledge of Real Estate, and the professionals all said it was a good deal. Even Barney Franks was on tv saying that Fannie and Freddie were doing just fine. Even Clarence and Julie knew Fannie and Freddie were major players in the Real Estate lending business, and after all they were guaranteed by the US Federal government, so who’s more credible than that?

    Fast forward to 2012: The southern California market has taken a beating for over three years now, unemployment is way up, and Clarence and Julie’s house is only worth 165,000. Clarence has recently been laid off and Julie had to take a job that pays way less than before. Clarence and Julie have contacted the mortgage company and explained that they cannot make the monthly payments, and that they’ve been responsible and listed their house for sale over a year and a half ago, but the only offers have been for 150-170,000.00 and they do not have the means to bring 145,000.00 plus Realtors fees to closing in order to take 2012 market value for their home. In the beginning the bank told them that they could not do anything for them because they were not behind on payments.Next their savings was depleted, and they could not make the payments. After being a couple months behind the bank decides now is the time to hear them, and maybe squeeze some more money out of them before the inevitable. The bank offers to allow Clarence and Julie to continue to make their payments at a slightly lower amount and make a second payment for the arrears, and they will put the remaining deficiency back on the principal at the end of the loan. Julie explains that they cannot make the payment as is, and certainly not make two payments that equal the original payment and more. The banks answer is that they will extend and olive branch to help them through their tough period, the bank will re-amortize their loan to 40 years and lower their payment, even though it isn’t much it will be more affordable than before, but that’s “all” they can do.
    Later, Clarence confides in a long time friend about how he feels cheated and that his “back is against the wall” even though he wants to honor his obligations, as he has always done. Clarence’s friend tells him about how another friend named James had been in his situation and what his friend, James finally did.
James did the math and considering this whole market and job situation was not totally his fault, and while being willing to come to a reasonable agreement with the bank, who should’ve seen the writing on the wall, and put the brakes on before the bubble popped, the bank was much more reluctant to admit any guilt whatsoever, and would hear of no such compromise.
    This had an effect on James’ outlook and attitude about right and wrong, and while he is a moral man and believes in following through with any obligation he has agreed to, he also knows that this whole situation he’s in, isn’t all his fault, and that causes him to lose any incentive to continue in this relationship, so he decides to “play the game”.
James had heard that there was a glut of foreclosures at the bank, and if he stopped making payments he would have a minimum of one year and possibly up to 48 months before the bank would even attempt to foreclose, so he began to play his game.
    Immediately James stopped making payments to the bank, and instead he began putting the same amount away for a “rainy day”. James continued to gather knowledge about “the game” and 13 months after his last payment to the bank, they sent him a “notice of acceleration” and that he had 60 days to catch up his payments, or his house would be foreclosed upon and he and his family would be evicted. The day came and passed, and the house was foreclosed, but the bank still had to evict them. By this time James knew that evictions were backed up 8 months, so he continued to play the game. He waited for his eviction letter, and 9 months later, that letter came in the mail. Continuing his next move, he goes to the court and prays for a stay, based on hardship, after all, his family has no place to go. The court obliged and gave him a 60 day stay, and by this time James already knew where he could get in to a nice owner financed house, it was priced a little higher than market but, he didn’t need a bank, and it was certainly a much better value than the house he currently resided in. Down payment was not a problem either, because he had been saving his house payments up for 24 months and still had 60 days to make a move. By this time he had saved up around 50,000.00, his game was looking to be in his favor at this point.
    With the knowledge of James’ story, Clarence and Julie decide to play the game of ”Musical Houses”, with the additional money they begin to accumulate due to their new free living arrangement, the clock is ticking, and they begin to create their strategy by learning the right questions to ask their attorney, and their CPA. They want the knowledge required to navigate the waters that lie ahead in this game. Knowing they are over 150,000 underwater on their house, so there is much to be gained by playing this game correctly.
…….
To be continued…

As the situation currently sits, there is a tremendous opportunity for investors at all levels to make lots of money, while homeowners, banks, and taxpayers get the short end.
If this story is interesting to you, I need help getting followers. Follow and share this blog, and follow me on twitter @pj_henry

    The reason for my blog is simple, to help as many people as I can. Ultimately by the end of this series, I will be engaged with the right people at the mortgage companies, where I will be able to bring back information to help solve some of the issues we face in the housing market, and hopefully some information that will actually help people that are underwater on their houses. Right now, the main real options are 1. Walk away and get foreclosed on, and Short sale, neither of which are ideal for the homeowner, or the bank.
Ideally, many opportunities will continue forward for investors, but homeowners will have more options and banks will be able to salvage much more of their shareholders money, which in turn will reduce the tax burden passed on to future generations.
If I get enough requests to continue this story, I will continue this series.
Please use this link to link back to this article:

http://mrpjhenry.blogspot.com/2012/03/musical-houses.html


P.J. Henry -Next Door Real Estate Mentor

How to make decisions for a happy Life.

I decided to write about this topic because of some recent events affecting someone very near and dear in my personal life, that are hard to watch. It is very comforting and satisfying to know that if an individual is true to their OWN value system, and makes well thought out decisions based on that system, they can greatly improve the level  enjoyment and happiness in their life, as well as the lives of the people that are most important to them.

The first thing I ask people to do is to define their list of core values. Your own personal value system is defined by what is the MOST valuable to YOU!

I ask someone to REALLY ponder what is the most important to them in life, to pick two things that are very important to them, things that make them happy just to imagine those things in their perfect state.

Example: 1. A wonderful fulfilling formal education, a career, that brings them all the money and                                          material things they desire.

               2. A loving spouse or partner to share their life with that loves them unconditionally and                                      would stand with them through any storm, trial or tribulation and still be there after the                                    dust settles, have children and spend every valuable minute of their little lives and not miss                                anything that they might later regret being absent for.

Now I say: If you could ONLY pick one of the two and the other opportunity would be erased from your life, and you could never ever have a chance to have the one you didn't choose, (don't choose lightly and don't dismiss the question by rambling on about some philosophy saying ..”I think you can have both ..blah, blah, blah…”) Just play along and answer the question and be confident about your answer…..

After they completed that task successfully I’d say: “Congratulations, you just defined ONE of your core values.Now, design your life and make well thought out decisions that are in line with that value, and you will automatically be happier in knowing that by focusing on the thing MOST important to YOU. You will be setting up your life in a way that will fulfill the very desires that you NEED in order to be happy and fulfilled."

Now make that tough decision a few more times with anything else you can dream up, and you will be well on your way to creating a list of you OWN core values.

See, what makes us happy in life is moving toward the things that are most important in life to US as individuals. The only person that can determine what those values are is YOU, as an individual. Some people confuse the good feeling that they get when they receive recognition and praise from others (especially from people they love and respect) as happiness. That good feeling is short lived if the things they do, are not in line with their own values. If a person  does things just because society (or the person/people they seek approval from) tells them it’s what they should be doing, that person will always be seeking recognition and approval from others in order to get their next feeling of perceived happiness. True happiness and inner peace comes when one takes action and makes decisions that are congruent with their OWN PERSONAL value system.

If you desire companionship, the people that will make you the happiest will naturally respect you more, and desire your company if you are honest and open about your motives.

The reason I used the example above is this. I see too many people, strictly because of society, their circle of influence, and a life of teaching of what's expected of them, make the wrong decision for themselves. After too much time has passed they are regretful and resentful of the life they chose to create. I will write more in depth about that topic in the near future.

This article is in no way saying that an individual should only be concerned with themselves and should  in no way compromise for the comfort or compassion for others, and to put one’s own desires above others at all cost, If that confuses you, self sacrifice is a whole other topic you should spend time studying.

One thing I will say on the topic of self sacrifice is this: Self sacrifice past a certain threshold only creates resentment, so reserve it for only the times that it is truly necessary in order to actually improve the life of someone else. In those rare occasions self sacrifice can be one of the most rewarding things a human being can experience.

I share these thought to help people feed their mind, and give them something to ponder.

Feel free to repost this if you think it could be beneficial to anyone. >

If you repost please link back to this page.

http://mrpjhenry.blogspot.com/2011/07/how-to-make-decisions-for-happy-life.html

Thanks for taking the time to read this and have a great week!

P.J. Henry
 
P.J. Henry -Next Door Real Estate Mentor

Learn this lesson the easy way, learn from MY mistake.

  This is probably common knowledge amongst most regular bloggers, but I learned a lesson that I really should have known already, being that I'm a pretty technical computer guy, but just like anything else there are red faced moments.

   I spent a pretty good amount of time typing Part TWO of  "MY First Mentor".   I typed it directly in to the form window on my blog...hit preview, and got an error saying that it had too many characters. So I thought I would just hit the "back button" and all would be well.  I was wrong!  After about an hour of puring through temp files and my Internet cache trying to locate all the words I had just written, I realized that it was lost !   >:-(
Even though I thought blogger was supposed to be backing up my "draft" to my surprise, it hadn't
,so  in the future I will always write in note pad or word then copy and paste.

LESSON TO ME, and others that may not have though of this:
Get in the habit of typing your work into something thats a little more permanent than a web browser, and use cut and paste BEFORE you  hit preview or publish.

My first Real Estate "Mentor"

Hi everybody,

     I'll start this blog by introducing my first real estate mentor.
I was married at age 18, and by the time I was 20, I had one child and another on the way.
We had one junky vehicle that  would barely run and used pawn shops to pay the rent. The house I lived in didn't have carpet or base boards, but it did have roaches and mice, and was located on the "wrong" side of the hi-way.

     My older brother had puchased a Carlton Sheets course, and I had "kind of" read it' and thought, "I can use some of this, and maybe find someone to sell me a house with nothing down." I started looking through the paper and for For Sale by Owner signs.  I believe I found an ad in the classifieds, and called. On the other end of the phone, was a nice sounding older gentleman, and I just talked with him a little while. I found out that this man was a landlord that owned several houses and some duplexes, and by the end of the conversation, he could see that I was someone that wanted better things in my life and was willing to work towards them.

     I haven't spoken with him in years, and If he is still alive, I don't know that he would want his full name in print so I'll just call him "Bob" ( His real first name is Bob by the way.)
   
     Bob and I met at his house that night, and he agreed to sell me a house, (in a much better neighborhood than the one I currently lived), as well as two sets of duplexes!  The duplexes were not so great, but they did have current renters. The way we structured the deal was, that I would pay for my house and both sets of duplexes all in one payment, and knowing that I did not have any cash reserves, if I had a vacancy in my new duplexes, he would help me out by reducing my payment while the unit was vacant. This was GREAT! I now had a better house, in a better neighborhood, I owned it so I didn't have to worry about landlord approval before making improvements to my new property, he didn't have to worry about repairs to the house, and I had some rental properties of my own!
   
     While not being a direct "Mentor" at the time, through this "deal" I learned some very powerful lessons about Real Estate Investing, because you see, Bob was an educated man, a college professor, and was experienced in Real Estate, and I was "Smart" but not experienced, or educated in Real Estate.

     I have nothing negative to say about Bob, because I think he is a good man with good intentions of helping me and getting a good deal for himself. After this deal, I did actually buy another house, with owner financing, in a better part of town, that was a huge piece, if you know what I mean,(that one turned out to be a real investment) BUT BECAUSE of the painful lessons I had learned on my first deal with Bob, I TOOK A LONG BREAK FROM REAL ESTATE INVESTING (I wish now that I hadn't taken that break).
I'll share the details and the lessons I learned, as well as the deals on my second, and real investment in my next blog.....

Have a great week!