economic predictions – Hassle-Free Cashflow Investing

We are living through interesting times. If you’re thinking about investing in real estate (or anything for that matter) in a Seller’s market, it’s essential to change your investing strategy to respond to different investment cycles.

Amateur investors learn an investing trick that worked once and try using that same trick over and over in all market cycles. That’s like planting corn in your garden every single month of the year. Some months you’ll have a bumper crop and other months you’ll wonder why there is no corn growing in your frost-covered garden. Your mutual fund sales person will call that dollar cost averaging; I call it silly.

There are times for buying and there are times for selling and times for just holding on. Having invested through the last real estate cycle of boom and bust and boom again, I am currently investing a lot more conservatively than I was in 2003-2007. Although real estate is local and there will always be good deals to be found, in today’s market good deals are definitely getting harder and harder to find. That’s because we are in a Seller’s market. In a Seller’s market, amateur investors overpay for properties because they don’t see any other alternative.

Investing 101 – buy as much as you can during a BUYER’S market. My home building company was very aggressive about purchasing heavily discounted vacant lots during the down market. Now that the housing market is booming, we are building houses with the help of contractors like Ideal Construction LLC and selling more houses than ever.

Vacant lot prices have quadrupled from the market bottom making it extraordinarily difficult to find vacant lots to replenish our inventory for future development.

Investing 202 – don’t overpay for assets during a SELLER’S market. Most home builders are currently ‘overpaying’ for the small supply of lots on the market, because they only know one trick – building houses. They have to pay the high market prices for lots because that is the raw ingredient that makes their business run. Many home builders will ‘overpay’ for lots even if that means their profit margins virtually disappear. Because they only know one trick, it means ‘overpay’ for their raw ingredient of lots or go out of business because they have no more lots to develop.

If you’re thinking about buying real estate in a Seller’s market, think long and hard about that decision. Although I don’t think we are at the peak of the current real estate or stock uptrend, I do think we are currently well above where the next market bottom will be for both real estate and stocks. Of course, if you’re buying real estate for long term cashflow and positive arbitrage, it could still make sense to buy today because interest rates are still incredibly low. You could say that real estate is in a Seller’s market, but interest rates are still in a Buyer’s market. If you are buying ‘over priced’ real estate with ‘under priced’ financing and you are positively arbitraged you hold on for a very long time, you’ll probably do very well. (Positive arbitrage is when your CAP rate exceeds your interest rate)

Investing 303 – When equities are overpriced, sell equities and buy bonds. In most of today’s US real estate markets, real estate is now overpriced. Click here to read my blog article “How To Predict Real Estate Prices” to determine whether your real estate market is currently under or over priced. DON’T MISS THIS PROFESSIONAL INVESTOR HINT: I am currently selling most of my real estate portfolio, using the cash to buy mortgage notes, and will sit on the sideline collecting mortgage interest until the equity market / home prices crash. I plan to buy back into the real estate market at the next cycle low. I am currently buying precious metals as their price continues to drop, as well as farmland and timberland as an ultra-conservative hedge against hyper-inflation and a potential currency collapse. Market cycles are very long. It can be a decade or more from market bottom to market top and back down again. Amateur investors do not think far enough into the future. They plant corn seeds in summer expecting to harvest their corn crop in the middle of winter. Sometimes it just makes common sense to stop planting and wait for the proper season for planting to come along.

Investing 404 – Not all bonds are created equal. Mortgage notes are my personal choice of bonds. The only thing I own in my IRA is mortgage notes. A mortgage note (bond) is a promise to pay secured by a piece of real estate. If the borrower pays me as agreed, I am happy because I have earned a 10% interest rate with no tenants, no toilets, and no vacancy. If my borrower pays late I earn late fees in addition to mortgage interest and my ROI goes even higher. If I buy a corporate or government bond and they don’t pay, I can pretty much write off that investment as a total loss. If I buy a real estate mortgage note (bond) and the borrower doesn’t pay as agreed, I will do the happy dance of joy because I get to foreclose upon the real estate for pennies on the dollar. By restricting my original loan amount to 75% of the property value, I should make a higher return on my money by foreclosing on the borrower’s equity rather than getting paid as agreed. That’s what I call a win-win! If the price of real estate drops and I have to foreclose, I at least have the borrower’s 25% down payment equity as protection from loss. I also have title insurance to help protect my investment from fraud and/or sloppy paperwork.

I am currently focused on buying income producing mortgage notes in Dallas, Fort Worth, and San Antonio Texas. These three cities have excellent population growth, economic diversity, very affordable and stable housing prices, and the foreclosure laws are extremely favorable to lenders. I’ve been buying and brokering mortgage notes in those cities for about five years and I’ve developed an extremely strong system in the process.

Using the strength of my investor network (the same network that brought you to be reading this blog post today), I have developed a steady supply of mortgage note investment opportunities. I promise you won’t find mortgage note investments like these anywhere else, because these notes are specifically created by my team to fit my personal investment philosophy.

All of our mortgage notes:

(1) are in the foreclosure friendly state of Texas and the rapidly growing markets of Dallas, Fort Worth, and San Antonio.

(2) are secured by recently renovated, highly affordable, single family homes in class B neighborhoods near major employment centers.

(3) have strong borrowers with less than 45% debt to income ratio.

(4) are 1st position deeds of trust at ~75% loan to value.

(5) have mortgage payment comparable to the cost of renting the same property. If it is the same monthly payment to rent or own, the borrower has little economic incentive to default. If you do foreclose on a non-performing note, you can resell the property for cash or rent out the foreclosed property and generate about the same net operating income as you were getting from your note.

(6) are supported by a conditional buy back guarantee from Hassle-Free Cashflow Investing giving our investors peace of mind and a secondary source of repayment for their mortgage investment.

(7) are professionally serviced by a licensed and bonded mortgage servicing company.

(8) are self-directed IRA friendly. Our team can handle all of the compliance paperwork for you.

(9) are turnkey and hassle-free.

(10) have lender title insurance in place issued by Chicago Title Company and paid for by the borrower.

(11) have zero investor closing costs associated with the purchase price.

(12) are able to be purchased at a nominal discount below the face value of the note – usually about 99 cents on the dollar and the 10% annualized ROI would be improved if the borrower paid their note off early.

(13) have complete due diligence files available on the property, the loan, and borrower.

(14) are professionally underwritten by a licensed and insured residential mortgage loan originator (RLMO) to be “Frank Dodd compliant”.

(15) are secured by houses who have a minimum value of $75,000.

(16) are fully amortized over 15 years but can be resold for the amount of the unpaid balance at any time.

(17) have a bite sized purchase price between $60,000 – $120,000

If you would like to purchase high-yielding real estate notes secured by 1st position deeds of trust recorded against quality real estate in Dallas-Fort Worth, TX send us an email – David@HassleFreeCashflowInvesting.com or call 866-931-9149 ext 1

To request general information about mortgage note investing, you can read my free white paper – “CLICK HERE for Secrets of Hassle-Free Cashflow Lending” as well as watch this video “CLICK HERE for Investing and Tax Strategies for Mortgage Note Investors” and this video “CLICK HERE for Nuts and Bolts of Being a Private Lender.”

2014 Economic Predictions For Real Estate Investors

by professional investor David Campbell

A year ago I published my economic predictions for real estate investors in 2013 on my BLOG. It’s fun to go back in time and see how well my crystal ball worked. Click here to read my 2013 real estate investor economic predictions and with the benefit of hindsight see if you agree my predictions were pretty spot on.

My 2014 Economic Predictions are short and sweet:

“More Federal stimulus ahead causing malinvestment in localized asset bubbles”. I’ll say that again but in English this time. “People do stupid things with easy money and there is a lot of easy money floating around. So, when you get some of this easy money don’t be stupid with it!”

The current level of prosperity in the US is being fueled by the “wealth effect” which is fueled by massive government stimulus propping up asset prices (mostly the stock market and to a much lesser degree the housing market as well). The prosperity feels real from the standpoint that people are spending and earning money again. However, this is a game of musical chairs and you won’t want to be the last one standing. Economic stimulus through the printing press is like taking a drug that makes you feel great until the buzz wears off; then you have an economic hang-over worse than your original problem. I believe we are at the end of the economic hang-over created by the last boom and bust cycle and we are just ramping up the euphoric feeling of the current QE infinity inflationary cycle.

The following are my specific 2014 Economic Predictions for real estate investors :

Very few people are bold enough to make specific predictions because the more specific you are the easier it is to be wrong (and most people hate being wrong). Take these predictions with a grain of salt. Forward this email to your friends and use it as a conversation starter. You can use the dialogue to make up your own predictions for the year. I really want to hear your feedback about these 2014 Economic Predictions on my Facebook page. After you are done reading, come find me online https://www.facebook.com/cashflowinvesting

David Campbell’s 2014 Economic Predictions for Real Estate Investors

Real estate rents, wages, food, interest rates and energy prices will rise moderately in 2014.

Gold will trade $1150 – $1450 and silver will trade $18.50 – $23.00.

I predict 30 year owner occupied mortgage interest rates to go up to five percent by July and hover in the low fives through the end of the year. Commercial mortgage rates will be lower than residential mortgage rates because commercial banks will remain flooded with cash and have no one to lend it to.   Residential interest rates will creep up as the government withdraws stimulus from that part of the market in an effort to moderate housing price growth.

Wall Street funds that bought large portfolios of foreclosed homes will start to liquidate their single family holdings as a result of increasing adjustable rate mortgages (*many Wall Street investment funds bought houses with short term adjustable rate loans and those loans are either coming due or are looking at the probability of rising interest rates).   These Wall Street funds never intended to be permanent landlords (and they aren’t very good at it). With home prices up this is a good time for these funds to start cleaning up their portfolios by liquidating their most troublesome and most price inflated properties.   The release of this inventory will put a downward price pressure in those markets who had the highest rates of appreciation from the trough. I would be very cautious about buying into Las Vegas, Pheonix, San Francisco Bay and Southern California and if I already had a sizable profit tied to a property in one of those markets I would consider exchanging out of it.

I remain a huge fan of the Dallas-Fort Worth metro. I do have a personal bias for telling you about that market because I am building and selling rental houses in Dallas and Fort Worth, but there are a lot of other really smart people who are very bullish on Texas. Here’s a great video by the North Texas Economic Commission why the DFW economy is at the very beginning of a long term upwardly trending market.

I am also intrigued by Charlotte, Denver, Atlanta, Miami, Tampa, Washington DC metro, Portland, and Seattle but not nearly as much as I like Texas. I predict all of the major cities and small oil towns in Texas will have 6-10% housing price and rent increases along with lower rates of vacancy (6.5% vacancy or less).

Bit coin will get more media attention, but its pricing will become even MORE volatile such that only the blackmarket economy will really accept it for payment. Governments around the world will find a way to tax bitcoin.

Stock prices will become extremely volatile in 2014. Watch for heart wrenching price swings of 10-15% up and down in a given month. Stock traders will make record profits in 2014.   Stock investors will end the year sideways or down. If you aren’t sure about the difference between an investor and trader, here’s a great article for you.

The unemployment rate is much worse than the published numbers because many people who have expired off of unemployment benefits and have stopped looking for work or they have moved onto the rolls of Federal disability. States pay for unemployment benefits but the Fed pays for disability so cash strapped states are moving people off unemployment benefits and onto Federal disability benefits as a way of balancing their budgets.   Those on disability are not counted as unemployed.   Expect to see a jobless economic recovery. The gap between the affluent and the poor will widen because the affluent make money by owning assets which are inflating in price while the poor make money selling their time but there will be fewer and fewer jobs for unskilled workers as a result of increased environmental protection legislation and higher minimum wage laws. “The best way to help the poor is to not be one of them.” – Laing Hancock

2014 will be a prosperous year for many. Be careful not to sucked into speculative investments because fiat currency will be causing malinvestment everywhere. If you are looking for a fast read on how fiat currency manipulation leads to bad decision making I highly recommend reading “The Clipper Ship Strategy” and “Whatever Happened to Penny Candy” by Richard Maybury.

A mentor of mine once said, “There is no such thing as a good or bad economy” You can only be skilled or unskilled in your interaction with the economy.”

If you’d like to discover more ways how you can use your eight essential resources to get good at this economy, be sure to take advantage of the offer of a no-cost personal investment strategy consultation with me – David Campbell. It’s a powerful way to start off your year. https://my.timedriver.com/WBYTQ

Best regards

David Campbell

Real Estate Investing Strategist
Founder of Hassle-Free Cashflow Investing
Office: (866) 931-9149 Ext. 1

FREE Investor Strategy Consultation – Valued at $300

Are you looking for ideas of what to do with your business and investments. You have the opportunity to discuss your goals and financial strategies with millionaire investor David Campbell.

David Campbell is the Founder of Hassle-Free Cashflow Investing – an organization that helps real estate investors and business owners acquire wealth through turnkey real estate investments. David is the CEO of a investment real estate brokerage, development, and property management company with well over $100 million of real estate transactional experience. His professional background includes real estate development, apartments, condo-conversion, retail, and office.

You can schedule an investor strategy consultation with professional investor David using the below calendar link to book your FREE phone appointment. https://my.timedriver.com/WBYTQ

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