Archive for July, 2009

Cash Flow is King When Investing in Real Estate

Cash_flow_King You have heard Cash is King but how about Cash Flow is King.

If you are thinking about investing in real estate make sure you have cash.

After cash make sure your investment will give you cash back.

How much Cash should you invest is up to you but make sure what ever amount you invest you will earn a percentage of your money back each month in positive cash flow.

This is typically called Cash-On Cash Return. If you invest $100,000 and can earn back $10 K back each year your Cash-On-Cash return is 10%. This example would be a pretty good investment and should be compared to other returns like CD’s, Money Market Accounts, Stock Market, Savings Accounts, Bonds, where you can earn a return on your invested cash.

Since Real Estate is not as liquid as other investments your return should be higher. If after your analysis you will make less than other investments you should reject buying real estate.

Written by Jack Lewitz | Discussion: No Comments »

Top 5 Reason You should not hide from your lender.

Coming_out_of_the_closetTop 5 Reasons You Should not Hide from Your lender

1. The problem will not go away.

2. Your lender does not want to own your Home.

3. There is a solution to your problem other than Foreclosure

4. Your credit can be repaired.

5.You can be helped only if you want to be helped.

“Yes it is safe to come out from hiding”

Written by Jack Lewitz | Discussion: No Comments »

Illinois Bank Losses Cost FDIC A Pretty Penny

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Illinois Bank Losses Cost FDIC a Pretty Penny.

The Top 12 Illinois Bank Failures of 2009 report from Chicago Tribune:

Bank Name Location Total Assets Estimate FDIC Insured Loss Insured Loss % of Banks Total Assets
Founders Bank Worth $963,000 $189,000 20%
Strategic Capital Champaign $547,000 $173000 32%
Citizens National Macomb $439,000 $106,000 24%
National Bank of Commerce Berkeley $420,000 $97,000 23%
Corn Belt Bank and Trust Pittsfield $260,000 $100,000 38%
Heritage Community Glenwood $235,000 $42,000 18%
Bank of Lincolnwood Lincolnwood $214,000 $83,000 39%
1st National Bank Danville $166,000 $24,000 14%
Rock River Oregon $77,000 $28,000 36%
John Warner Clinton $70,000 $10,000 14%
Elizabeth State Elizabeth $56,000 $11,000 20%
Totals $3,483,000 $869,000 25%

These 12 Illinois Bank lost a total of $869 Million Dollars this year or 25% of total bank assets a little under $3.5 billion.

All of this money was insured by FDIC.

FDIC total Losses on a National Level are estimated to be $12.7 Billion with $42 Billion in total Bank Assets.

Written by Jack Lewitz | Discussion: 1 Comment »

If I Had X-Ray Vision Like Superman “What Would I See?”

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If I had X-Ray Vision Like Superman “What would I see behind closed Doors?”

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Loss Mitigators playing with Paper Airplanes?

How many times have you had re-fax a file because the Loss Mitigator says they never received it?

tiddlywinks Bankers trying to manipulate figures on the final HUD-1 Statement?

Or Investors just  playing a game of Risk ?                               risk-game-of-global-domination

Written by Jack Lewitz | Discussion: No Comments »

Verdict Still Out on Number of Loans Being Modified

Understanding Mortgages

The results of the Home  Affordable Modification Program (HAMP) which the administration has reported will help prevent foreclosure for  9 million people will be coming out in July 2009.

The HAMP program began in April and  HAMP data will be evaluated after a borrower completes a three-month loan modification trial period.  It will be interesting to see the number of people actually being helped under this program.

Written by Jack Lewitz | Discussion: No Comments »

Foreclosure News Briefs

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Chicago Crain reports   Antoin “Tony ” Rezko , the controversial fundraiser for Barak Obama and Governor Blagoyavich, home is to be auctioned off in Wilmette as part of a foreclosure lawsuit by Lasalle Bank (aka Bank of America).

The home is 8,400 SF and the loan balance is $5.15 million dollars. The auction is to take place on August 10, 2009.  Local realtors estimate the true market value of the home to be between $3-4 million dollars.

Chicago Crains reports that former Bulls Star Eddie Curry is in foreclosure on his $3.7 million dollar mansion in Burr Ridge. This was the same home the former Bulls Center was bound and robbed in 2007.

Also in the News, Plymouth Consultants, Inc. a  British Virgin Islands Investment Co. has filed a lien on a home in Highland Park for $12 million dollars.  The 7,000 SF home was described as a “lakefront mansion”  was used as collateral for the loan.

Written by Jack Lewitz | Discussion: No Comments »

Is Your Local MLS behind the 8 Ball When Dealing with Short Sales?

3552347555_111d70af06 Is your local MLS behind the eight(8) ball when it comes to Short Sales?

Mine is and here is why!!

According to my local MLS, all signed contract between buyer and seller  must be shown as “Under Contract”.

Here is the problem. Short Sales are not your  typical sales between buyer and seller.

Short Sales  are contingent upon the “Approval” from a third party “The Bank”.    This “Approval” can often take between 3 -4 months.

So what does this mean for the Seller. It means taking the property off the market  for 3-4 months, getting fewer showings and this can affect the outcome of a Short Sale. 

In my opinion I think my MLS board is behind the 8 ball when it comes to understanding how Short Sales work. In Short Sales your orginal buyer often is not your final buyer but if you take it off the market  in order to comply with the board rules you are missing crucial marketing time for the property.

I wish the MLS would change the rules or modify the rules when dealing with Short Sales because as a Listing broker my fudiciary relationhip is with the Seller, not the bank. And as a Listing Broker I want the bank to approve a short  sale for my seller.

Written by Jack Lewitz | Discussion: 1 Comment »

Who Do You Believe?

277_cartoon_bank_bailout_hurwitt_small_overThe New York Times announced that JP Morgan Chase has reported $2.7 billion dollar profit this second quarter even though we are in the midst of the worst economic downturn in decades.

Meanwhile in a Chicago Crains article,  Realty track  was quoted reporting a 32 % increase in foreclosure filings in Illinois. In Illinois, 10,796 households received a foreclosure notice in June, or one in every 486 households.

Based on these two different article, who are we to believe? Are the banks getting better and or are more homeowners loosing their homes to foreclosure?

One would believe a little bit of both.

Certain  big banks and JP Morgan Chase is one of the biggest, has benefited from the stimulus plan and while reporting some profits is not totally out of the woods as some experts are predicting.

There are not only bad debts on the books of the bank but if the economy continues to slump and unemployment continues to rise as some experts predict the current health of the banks will be in question.

As I have said in the number 1 problem that we are about to face is the rise in unemployment. As more people loose their jobs more homes will be foreclosed by banks and therefore threaten the banks balance sheets.

Written by Jack Lewitz | Discussion: No Comments »

Putting the Pieces of A Puzzle together..

iStock_000005894355XSmallDeciding what to do next about your home is like putting the pieces to a puzzle together.

Sometimes you don’t know where to start.  When doing a puzzle, I always start to look for end pieces and work my into the middle.

Sometimes I get stuck and start all over. Sometimes I try to make two piece try to fit when they don’t.

Recently I heard of two separate families  trying to solve the puzzle to their home problems by doing a loan modification on one corner of the puzzle and trying to fit a Short sale piece right next to it in the same puzzle.

Doing Loan Modifications and Short Sales together is like forcing two pieces in a puzzle that just won’t fit.

In the end  up with an incomplete puzzle.

Written by Jack Lewitz | Discussion: No Comments »

Who’s on First?

[youtube]http://www.youtube.com/watch?v=wfmvkO5x6Ng[/youtube]

I am reminded of the comedy routine “Who’s on First” by Abbot and Costello when dealing with the banks on Short Sales.

Today is the second time I have heard from people who say they have submitted a Short Sale package to the bank and they bank has denied ever receiving the package.

When you call the bank make sure they know “Who You Are” and “What the Purpose of the Call is about”
and “Why You are following Up with Them”.

Finally Make sure the bank is not confused as like our friends
Abbott and Costello.

Written by Jack Lewitz | Discussion: 2 Comments »

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