Increasing Foreclosure Sales Mean EquityBuild Needs More Investors Submitted by Jerry Cohen on Fri, 02/26/2010 - 09:30 Foreclosure Sales Trends
Of the residential properties sold in the U.S. in 2009, one-fifth were foreclosure homes. In some areas, such as Merced, California, foreclosed homes were almost two-thirds of all homes purchased.

We’re now really feeling the fallout from the mortgage crisis. Even owners who have tried to ride out this devastating sub-prime wave have had to give in. This has left the residential housing market full of homes that went through foreclosure.

Now that the economy is stabilizing a bit, those foreclosed homes are being purchased in the thousands and at great bargains.

Who’s Buying These Foreclosures?
It’s more and more difficult for private owners to secure financing for new homes, and many owners have elected to rent, instead of own, to avoid the big-ticket repair items that can jump up and surprise a home owner.

So, who is picking up these great deals?

The answer is real estate investment companies like EquityBuild. Unfortunately, this leaves average investors out of the loop in a residential real estate market that has an unprecedented level of really great deals just waiting to be snapped up.

However, EquityBuild is leveling the playing field.

EquityBuild is Capitalizing
We’re pretty proud of the turnkey system we’ve developed. In the current market conditions, it’s really the only way that most average investors can take advantage of good deals on residential properties that can add double-digit returns to their portfolio.

We arrange for almost all of the money to be fronted, allowing our investors the opportunity to easily get into real estate investment. All our investors need is good credit, some equity, and consistent income.

If you have any questions about our system, you can read more about it or contact us for more information.

Mortgage Market Crisis Leads to Changes in Investment Real Estate Submitted by Jerry Cohen on Thu, 02/11/2010 - 09:03 Investment Real Estate Landscape Changes
The sub-prime collapse that led to that current “Great Recession” has forced legislators and administrators of financial institutions to rethink lending methods and make changes in laws and policies. These these changes have profoundly affected real estate investment.

Traditional lending agencies are tightening up their purse strings more than ever, making it more difficult for home owners and investors alike to receive a loan. As additional changes in the mortgage sector are rolled out, these traditional lenders will tighten the strings even further.

EquityBuild Helps Investors Take Advantage of Changes
Investors might have a negative outlook for the real estate investment market, However, for investors working with EquityBuild, this market is ripe for some amazing deals that will turn a significant profit.

EquityBuild is uniquely positioned to take advantage of the many great deals that are hitting the market right now. There has never been a better time to invest in real estate than right now.

As changes in the real estate investment business happen, EquityBuild will continue to stay ahead of the changes and ensure that your expectations are in harmony with current market conditions. Our turnkey investment opportunity will continue to be the best method for taking advantage of the outstanding opportunities in real estate investment. There is no training, no classes, mentors, DVDs, books, or experience necessary to take advantage of the EquityBuild Opportunity. Why not contact us today to find out more.

Immigration Fuels Increased Demand in Rental Housing Submitted by Jerry Cohen on Mon, 02/08/2010 - 11:13 Each year between 2005 and 2008, over 1 million people were granted permanent residence in the United States. In that four year span, 4 million new people were looking for housing in America. That’s a lot of pressure on the rental housing industry to provide new housing options.

History Attests to Immigration in Times of Hardship
In the early years of its history America was a bastion of freedom. It was the place everyone wanted to be because it was the one place where you could start over and, in your lifetime, create a quality life for you and your family.Unless your heritage is american indian, at some point, your ancestors sought the same chance for a better life that people are still seeking today. Irish immigrants came to America to escape the potato, western and northern europeans fled extreme poverty, and eastern europeans were dodging political oppression.Regardless, people came in droves to make a new home in America.

The Current Worldwide Economy
While the scale of immigration has changed, the fact that the people of the world look to America when hardships come is nothing new. In America, we’re feeling the effects of a recession. It can be extremely frustrating waiting for the economy to bounce back so we can stop cutting back and increase our standard of living a bit. However, we often forget that the global economy is feeling the same effects.While, in America, we may have to cut down on the number of times we eat out or cancel our gym membership in response to a struggling economy, in many countries cutting back means eating less than three meals a day or living on the street. Rather than put their families through such conditions people come to America where they can at least assure their family of food...and housing.

Rental Housing Answers Massive Immigration
For the keen investor, this influx of millions of people is a gold mine just waiting to be discovered. Every one of these families will need housing and none of them is in a position to own a home. So, they seek rental opportunities en masse.At EquityBuild we’re already positioned to supply quality housing for these new immigrants, and our turnkey opportunity makes it easy for you to be a part of offering people a better life while making a nice return for your investment.

Households in Transition Make Decision to Rent Submitted by Jerry Cohen on Thu, 02/04/2010 - 14:25 Life transitions are causing many people to choose renting over home ownership. In fact, many former home owners have chosen rental over ownership. Let’s look at some of the factors that have people flocking to home rental.

Loss of Employment
At the beginning of the current recession, in December of 2007, the unemployment rate was at a manageable 5%. Since that time unemployment has increased drastically. As of December of 2009, the unemployment rate in the U.S. has risen to 10%.As people lose their jobs, they find it more and more difficult to sustain home ownership. Often unemployed people can find a way to buy some time. They supplement their unemployment benefits with money from their savings accounts to make payments and repairs on their home. However, this situation can only last so long before they are forced to look at other alternatives.One alternative people are seeking is renting over home ownership. Renters can keep their regular payments at or below their former mortgage payments while avoiding major expenses like furnace replacement or roof repairs. This is very appealing to unemployed couples who are struggling to keep up with the bills.

Change in Marital Status
Fifty percent of 1st marriages in the United States end in divorce. The numbers get even higher for people who give marriage another shot. Sixty-seven percent of second marriages end in divorce and 74% of third marriages end in divorce.Each time a couple goes through a divorce it makes continued home ownership that much more difficult. Often, these divorced couples end up liquidating their home and splitting the proceeds from the sale. Half the proceeds are rarely enough for a down payment on a new home and living off one income or alimony is often not enough to cover mortgage payments and repairs.These newly single individuals turn to rental housing as, at the very least, a stop-gap measure for their housing needs.

Aging
You might be surprised to discover over 4.1 million households in the United States, with household heads at or over the age of 65, rent their home. Home rental is a logical choice for many seniors. As we age, our bodies become less able to deal with repairs or even accomplish tasks such as shoveling and lawn care that are a consistent part of home ownership. Renting often means that someone else will take care of the lawn, shovel the snow, clean the gutters, etc.This simplifies not only financial obligations for seniors, but also home care in general.

Benefitting From Changes in Housing
The rental market is changing at a rapid pace, and it has created some great opportunities for investors who are willing to get in front of the rising rental wave and ride it.

Quality Property Appraisals at Risk Submitted by Jerry Cohen on Wed, 01/27/2010 - 11:20 In May of 2009 a new Home Valuation Code of Conduct (HVCC) was adopted. The intent of the HVCC is a noble one. It was designed to keep lenders from influencing appraisal values via coercion. Unfortunately, there are so many holes in the code that there is a great deal of doubt as to whether the HVCC will ever accomplish what it set out to do.

The Home Valuation Code of Conduct

Originally, the HVCC had a noble intent.

Coercion has long been a problem for certified appraisers. While they are trying to do their job and accurately value a property, the lender is bent on making as much profit as possible (generally at the expense of the end consumer). As such, lenders often coerce appraisers into producing numbers that fit their model rather than numbers that are accurate.

This practice was exposed when Attorney General Andrew Cuomo subpoenaed Freddie Mac and Fannie Mae, but it has been going on for some time. The HVCC was created to remove such opportunities for coercion.

In an effort to eliminate this coercion, the HVCC attempted to set up guidelines that would accomplish several things.

The drafters of the HVCC wanted to minimize multiple requests for valuations, thus negating lenders’ attempts to get appraisers to “hit the right numbers.” They also acknowledged the need for impartial oversight. This oversight could only be impartial if the lending agents had no ownership of the valuation entity.

There is little doubt that the problem of coercion needs to be addressed, and the HVCC is indeed a noble attempt, but, as the saying goes, “the road to hell is paved with good intentions.”

Impact of HVCC on the Appraisal Process

If you haven’t yet read the HVCC, you can read the code in its entirety from the Appraisal Press’ website.

In short, the HVCC is intended to address the issues of lenders coercing appraisers into giving inaccurate appraisals. That’s all well and good and it sounds like an appraiser’s dream come true. No longer will lending agents be able to twist appraiser’s arms until they hit the right number.

That would be true if there weren’t some major flaws in the code that allow lenders to circumvent the system.

According to the HVCC independent appraisers will be required to have their appraisals go through an Appraisal Management Company (AMC). In doing so, the appraiser will lose 40% of their fees to the AMC. As a result, appraisers will either lose nearly half their income, or they will be forced to raise their prices.

The latter is, of course, the more likely scenario. Appraisers will have no choice but to raise their fees to cover the extra overhead. In the end, the buyer will be left with the extra expense and it’s the buyer that the code was supposed to be protecting in the first place.

Increased appraisal fees also drastically increase volatility. As appraisers raise their fees, AMCs are forced to import appraisers. These appraisers lack intimate knowledge of the local market, a necessary factor in accurately appraising properties.

In reality though, as the code is currently worded, it won’t be AMC fees that drive certified appraisers out of business. It will be the fact that appraisers are the ones incurring regulatory risk.

The governing authorities will be watching appraisers closely. On the other hand, Automated Valuation Models (AVM) or a Broker Price Opinions (BPO) won’t be scrutinized. This can only result in lending agents using AVMs and BPOs in lieu of certified appraisers. Valuations will continue to fall under the coercion of the lender. In addition, the accuracy the HVCC was hoping for will suffer as loans will be made based on models or the opinion of uncertified individuals.

How Are Real Estate Lobby Groups Trying to Impact This Approach

While the above glaring issues could be disastrous for the real estate industry, few are proposing that the HVCC be killed. However, major renovations are needed to create a workable version of the HVCC. As it currently stands there are too many loop holes for the code to have its intended effect. While the code targets lender tactics, the many gaps in the code allow lenders to continue their corrupt actions while the buyer and the appraiser end up getting caught in the cross fire.

Lobbyists are currently petitioning Congress rethink the HVCC and reword it into the airtight type of document that frees trained professionals to give accurate assessments of properties.

If they are successful and the HVCC gets a nice makeover, it could go a long way to ensuring integrity in the real estate industry.

Investing Doesn't Have to Be a Win-Lose Proposition Submitted by Jerry Cohen on Tue, 01/19/2010 - 14:33 In the world of paper investing, there is a winner and there is a loser. This is completely unsatisfactory in light of the fact that there are some great win-win investing options available.

Paper Investing and the Win-Lose Method

Invest in paper money and you quickly find out that there is always a loser in the mix. If you invest in stock in a company, you're betting that the market will go up. Of course, the person who sold you the stock is betting that it will go down. One thing is for sure in this scenario...

One of you will lose.

Actually, the winner in this great paper chase is also a loser in some sense. With paper investing comes great stress. Investors lose sleep over whether their investment will grow or their nest egg will collapse right before their eyes.

Why Real Estate Investing is a Win-Win Investment Strategy

For the Investor
Investing in rental real estate, on the other hand, gives us the best of both worlds.

The investor gets a solid return on their investment. This return comes, not just in equity built up, but in real-time profits that come from renting residential properties. The return an investor gets from rental properties is especially impressive in light of the stability of the investment. It's a combination you can't get in any other investment.

Plus, if the investor accepts section 8 housing vouchers, they can sleep much easier than their paper investor counterparts.

First, because section 8 housing is subsidized by the government. The greatly reduced portion of the rent payment that the tenant is sometimes responsible for makes it easier for the renter to pay and they're more likely to do it on time, and the government subsidy guarantees that the overwhelming majority of the rent will reach you on its due date.

Secondly, property owners are often concerned about tenants damaging their property. But with government subsidized housing, tenant damage or neglect is grounds for disqualification from the program. The risk of losing the subsidy that pays most or, in many cases, all of a tenant’s rent serves as an an enormous incentive to take proper care of your investment.  HUD wants to make sure tenants are keeping the property in good condition.

For the Renter
On the other side of this investment is the renter. In the middle of an economic downturn, when many are losing their jobs and their homes, investors are providing people with a comfortable home at a price they can afford even when their income has been drastically cut.

EB's Turnkey System of Investing

Unfortunately, many investors are unable to tap into such a great investment vehicle because they lack the resources to do so. Even if they have the capital to invest in a property, they often lack the knowledge to discern a good investment from a bad one and they lack the connections to get repairs done at a low enough cost to make any repairs or upgrades feasible.

That's why we're proud to have developed a system that relies only on an investor's good credit and minimal cash out of pocket. Compare that to any other investment class and you’ll clearly understand why real estate is a truly unique win/win investment!

What other class of investment affords you the opportunity to own a net cash flow producing asset bought almost entirely with other peoples’ money while at the same time providing quality housing for people desperate for an opportunity to house their families in a safe, clean and affordable home located in neighborhoods comprised of mostly homeowners? And, best of all, EquityBuild’s turnkey approach assures you the benefit of our more than a quarter century of experience while we do virtually everything! All you will ever be required to do is complete and sign some forms and call Fed Ex to pick them up.

If our turnkey system is new to you, you can read about this real estate investment opportunity here. We're constantly adding new properties and giving investors more opportunities to start their investment portfolio or grow their existing portfolio.

New Section 8 Housing Vouchers Means Huge Opportunity For EB Investors Submitted by Jerry Cohen on Thu, 01/14/2010 - 13:41 Recent economic conditions have pushed officials in Chicago to open up an additional 40,000 slots for section 8 housing. As a result, the need for qualified section 8 housing has exploded, giving investors a window of opportunity to add to their portfolios.

Sudden Chicago Housing Shortage Addressed
After 10 years of refusing to accept new section 8 housing applications, Chicago officials have opened up 40,000 new slots for applications. These 40,000 new families will be looking for qualified section 8 housing in a market that isn’t ready to meet such a demand.

It’s no secret that the economy continues to struggle. In some ways things have gotten better, but the economy is still standing on shaky legs. The return to economic strength is taking far too long for many families. In the face of such conditions an overwhelming number of families have been forced to seek housing help.

The number of families applying for help is increasing rapidly and this situation has forced Chicago officials to take drastic measures by opening a section 8 housing list that they had intended to keep closed.

Equity Build Helps Investors Fill the Housing Void
The spike in section 8 housing applications offers a great win-win situation for investors to start, or add to, their portfolios, which is why Equity Build has a strong buy recommendation for the Chicago market right now.

This new demand for section 8 housing offers investors a chance to add some great real estate investments to their portfolio. And, since the government subsidizes section 8 rents, it saves chasing down rent payments or covering them out-of-pocket.

The question regarding this hot Chicago market is not really whether there are good investment opportunities, but rather, how long will the window be open. Will the list close next quarter and remain closed for another 10 years? It’s hard to say.

Families Still Waiting on CHA, Section 8 Lists Submitted by Jerry Cohen on Fri, 10/02/2009 - 12:07 That's the title of yet another article about the desperate need for the sort of Section 8 housing that EquityBuild provides. Click here to read the whole thing.

Lessons Learned at a Financial Symposium Submitted by Jerry Cohen on Wed, 08/05/2009 - 15:44 I spent some days recently at the Agora Financial symposium in Vancouver, British Columbia. Besides the fact that Vancouver has great Asian food, I learned several things.

One thing I learned is that most of the big-name analysts who were there don't believe the market has bottomed. This includes, by the way, Doug Casey. As a result, most of their investment recommendations were "defensive."

Defensive investments involve, by definition, the basic necessities of life. These are the things that people don't cut back on -- even in hard times. They include metals, industrial commodities, agricultural products and energy.

Most folks don't think of housing when we think of necessities, but they clearly should. What is more essential than housing? I think the main reason that people don't think of real estate as an investment instrument is simply that there are so few ways to invest directly in managed properties -- the EquityBuild way.

Moreover, real estate differs from other necessities in that it is all local. When we talk corn or copper, there's one price. Real estate, however, varies radically by location. So you need to invest in the right area.

Properly located real estate has several unique qualities as an investment class that favorably distinguish it from virtually every other sector. Banks and mortgage companies continue to be willing to lend 75% or more of it's value.

There are many markets where it can be rented, producing real time, ongoing profits while the income pays off the loan. The result is that 75% or more of the asset value is purchased for the investor by someone else. It is also tax-advantaged in ways no other investment class is.

On top of that, demand for rental units is exploding in many, many markets around the country. Rents are rising while the cost of money and property is aberationally low.

Finally, residential real estate is the ultimate inflation hedge. If the combination of these features don't make real estate the investment to buy and now the time to buy it, I'll wait patiently until the analysts offer me a more compelling investment alternative. Until then, I'm in residential, rental real estate and I'm in with both feet and more excitement than I've had in a long, long time.

Businesses Move South During Downturn Submitted by Jerry Cohen on Sat, 06/13/2009 - 13:26 If you subscribe to the Wall Street Journal, you might want to check out an interesting article I read. Titled "Southern States Poach Businesses Amid Downturn," it confirms that the South is continuing to benefit from corporate migration out of the more expensive states.

The title is a little misleading, however, because California is one of the high-cost states that is losing businesses to the traditional South. Regardless, this continuing migration is a big part of the reason that housing markets in the South, where EquityBuild operates, remain strong.

EquityBuild Finance, LLC Formed Submitted by Jerry Cohen on Mon, 05/25/2009 - 20:22 Earlier this month, EquityBuild took steps to overcome a shortage of bridge financing funds brought on by frequent changes in Federal Reserve policies. This lack has been a hindrance to fulfilling a large backlog of orders.

We formed EquityBuild Finance, LLC and registered a $10 Million private placement memorandum with the SEC offering accredited investors the opportunity to realize guaranteed annual returns of 10-12% interest depending on the size and term of the investment. Investors' dollars are secured by the assets of the company which are cash and real estate secured first position notes lent exclusively to very well qualified individuals and against property with a minimum equity position of 30%.

The company is presently developing a web site along with the sales, marketing and administrative components. Talks are beginning with self directed IRA administrators in an effort to offer their clients the opportunity to invest some of their retirement funds for premium returns.

EquityBuild, Inc investors will enjoy faster bridge loan underwriting and will be working with a lender that has a rich understanding of their investment objectives and a new strategic partner in EquityBuild Finance ready to play and important role in order to facilitate those objectives.

Just a Word or Two Submitted by Jerry Cohen on Tue, 03/17/2009 - 14:42 I just got a nice note from a client on our waiting list reminding me that I've neglected this blog. The reason, frankly, is that EquityBuild is backlogged at the moment. We've been swamped with demand and I'm working overtime to bring new investment properties to market.

We've been scaling up operations to help investors and the renters who need places to raise their families. I'll bring you up to date on some of the details of our efforts soon.

Stimulus Bill Worrying Charities Submitted by Jerry Cohen on Sat, 02/28/2009 - 14:17 Unfortunately, many charitable organizations today are suffering. Not only have many of their contributors lost significant wealth from the fall in stock prices, the stimulus bill lowers tax deductions for charitable gifts. Here's one article on this problem.

Because our investment vehicle requires only good credit and no cash outlay, we think it could solve many ailing charities' problems. If you know of a charity hit by the lowered deduction limits, please have the administrator of that charity contact us.

I believe we can design a giving program that will more than compensate. We pride ourselves on the socially responsible component of our investment but would like to do more in these difficult times.

Demand for Rental Housing Assistance Up Submitted by Jerry Cohen on Sun, 02/22/2009 - 10:38 I've written in the past about the impact of the current housing and credit crisis on rental demand. Simply put, increased foreclosures create the need for more rental properties. This effects renters receiving housing assistance as well as renters who do not.

Read this if you would like to see some evidence that these predictions are coming to pass. Contact EquityBuild if you would like to provide homes for the increasing number of people who need them and invest in this growing market.

A Note on the Ramp-up Submitted by Jerry Cohen on Fri, 02/20/2009 - 12:19 For all those who are asking when they can expand or start their portfolios, the EquityBuild team is making good progress. We're bringing properties to market now and will increase that rate in the near future. Lenders are more interested than ever in our traditional value-based approach to investments.

I realize that a lot of people have experienced significant losses from stocks lately. Believe me, there is a way to more than recover. All you need is a history of responsible credit management and patience.

The Right Place at the Right Time Submitted by Jerry Cohen on Thu, 02/12/2009 - 10:31
An interesting thing has been happening that I thought you might be interested in. The profile of the average EquityBuild client has been changing quite a bit recently. In the past, most of our investors came to us because they didn't know much about real estate. Right now, the opposite is true.

Though the overall economy is hurting, excitement among traditional real estate investors seems to grow every day. The reason is that a lot of people are making a lot of money right now -- using real estate practices that have been used for generations. Now that the amateurs and speculators have been scared out of the business, paralyzed by uncertainty and confusion, the way is clear for those who really understand how to make money in real estate. And we're happy to have you as part of the EquityBuild team.

Better than Gold Submitted by Jerry Cohen on Mon, 02/02/2009 - 19:20 Yes, we've been busy; very, very busy, in fact. We've been close to overwhelmed lately as new investors join the EquityBuild team. With far more demand for investment properties than we can deliver at the moment, I've been concentrating on expanding our fulfillment division.

Part of the reason that we've been experiencing so much demand is that word is getting out. Most of our new clients are coming to us because they know somebody who has invested with EquityBuild. Another reason, I think, is the economy.

Unfortunately, a lot of people have lost a significant portion of their retirement funds because of the downturn in the stock market. They need to make up that loss but don't want to double down in the stock market.

Now, people are looking for real assets that can't be wiped out by the gyrations of panicked traders. Income properties outside the glamor locations hit by the housing price bubble provide that security. One investor told me that owning EquityBuild properties is better and safer even than owning gold.

"You can't buy gold using only your credit," he told me, "and then rent it to somebody else to get the money to make the payments. On top of that," he said, "there's the satisfaction that comes from providing quality homes in great neighborhoods to the working families hit hardest by this economic downturn. That's as golden as you can get."

I agree.

Community Banks Continue Providing Great Service Submitted by Jerry Cohen on Wed, 12/31/2008 - 14:43 I was just reading a post by Glenn Reynolds, one of the most-read bloggers around. He links a story talking about how difficult it is to get help refinancing now that interest rates are down.

I find this baffling. Not only are lending institutions lining up to give EquityBuild clients capitol, the smaller community banks we work with are great when it comes to refinancing. That's what happens when you have solid investments and work with traditional American banks instead of the Wall Street high-flyers.

After the first of the year, I'll have more information for you about brand new sources of mortgages for EquityBuild investors. And yes, the GO Zone tax shelter has been extended until the end of 2009. There is, I guess, an upside to the credit fiasco.

You will have noticed that the clock on the front page has been changed to reflect this. Income taxes may go up next year, but you can still give yourself a tax cut. My only question is, "Why wouldn't you?"

Why Demand for Rentals Will Go Up Submitted by Jerry Cohen on Tue, 12/23/2008 - 15:13 Here's a great article by Tony Crezcenzi at CNBC.com. Crezcenzi is one of the better financial analysts out there.

If you want to understand why this is a great time to invest in rental real estate properties, read it all.

How We Don't Do Business Submitted by Jerry Cohen on Mon, 12/22/2008 - 21:02 As recent investors know, EquityBuild has been scrambling to keep up with near constant changes in Fed lending guidelines. Fortunately, we've been able to do so -- largely because the community banks we deal with are so hardworking and creative.

It's amazing how well the "real economy" works. If you'd like to read a bit about the other economy and it's high-flying bankers, click here. Warning: it may anger you.

Home Sales in South Refuse to Slow Down Submitted by Jerry Cohen on Wed, 12/10/2008 - 18:37 According to the regional index, pending home sales in October rose by 7.8% in the South. This is down a trivial 0.7% given the state of the economy and the credit confusion.

So-called experts thought the slowing would be four times that. As I've said before, this is a great time to invest in income-producing real estate in the still-growing South.

Treasury mulls plan to lower mortgage rates to 4.5% Submitted by Jerry Cohen on Thu, 12/04/2008 - 12:16 This is just one more reason that now is a great time to start building your portfolio of investment real estate.

The Real Strength of Our Economy Submitted by Jerry Cohen on Sun, 11/23/2008 - 01:17 Here's more on the strength of community banks from the Banking Administration Institute -- the leading professional organization for the financial services industry. I'm sort of wondering why we aren't hearing about this in the media.

It's nice to get some confirmation from some professional banking group of what I'm seeing. It's the small community banks that EquityBuild works with that are making things work right now. Wall Street is paralyzed and the fed is changing the rules every day. Community banks, though, are coming through for EquityBuild's clients. Sometimes they have to jump through federal hoops, but that's what they'll do to help you build a portfolio of real wealth-building investment properties.

Why Are We Doing So Well? Submitted by Jerry Cohen on Thu, 11/20/2008 - 15:54 ... when the stock market is tanking and big financial companies are going out of business? A big part of the reason, as I've been saying is that we're dealing with community banks. Here's a great article I just ran into. And here's an excerpt.

”According to FDIC data, the failure rate among big banks (those with assets of $1 billion or more) is seven times greater than among small banks. Moreover, banks with less than $1 billion in assets—what are typically called community banks—are outperforming larger banks on most key measures, such as return on assets, charge-offs for bad loans, and net profit margin.”

Tips on Buying Foreclosures Submitted by Jerry Cohen on Tue, 11/18/2008 - 12:12 If you're thinking about buying foreclosures, you might read this article linked by the giant of the blogosphere Glenn Reynolds. As an alternative, you could allow us to find great deals, great financing, fix them up, get the best renters to pay your mortgages and manage the properties for you. Just a suggestion.

More on Community Banks Submitted by Jerry Cohen on Sat, 11/15/2008 - 13:25 Here's a really good interview with the CEO of a healthy community bank. His bank is exactly the sort of institution that we do business with.

We rely on and work closely with banks that engage in the low-risk traditional real estate lending that built our country. I think we're going to see a lot more investor interest in these healthy institutions in coming years.

Mortgage Rates at Historic Lows Submitted by Jerry Cohen on Sat, 11/08/2008 - 12:06 In this market, the greatest of all assets is a good credit history. If you've lived responsibly and within your means, EquityBuild can help you take advantage of incredibly beneficial fixed-rate mortgage rates.

Now is the ideal time to build a real estate portfolio that will yield phenomenal returns. Take the steps today that will provide real wealth for your future. If you wait until everybody else decides to act, you may very well find that you've missed your greatest opportunity.

More on the Paper Economy Submitted by Jerry Cohen on Wed, 11/05/2008 - 19:43 Here is an extremely hard-hitting take on the giant impersonal financial services industry. As I've said before, that's not the sort of financial institution that we at EquityBuild deal with. The banks we connect with our investors are local community institutions with their roots in the real economy.

The Financial Confusion Submitted by Jerry Cohen on Tue, 11/04/2008 - 19:49 Yes, the near daily and often contradictory mandates being handed down by the Fed are confusing. They have even had an impact even on local community banks that didn't get involved in the subprime market. Nevertheless, we are successfully steering our investors through the maze of new rules.

There have been some delays on loan closings but we're lucky to work with banks that want to help solve problems. Our ability to predict how each and every purchase will proceed is lessened, of course, but we're still solving all the problems of our investors who allow us to do so. In confusing times, I really believe you are better off depending on someone who knows the real estate and mortage business to help guide you to financial success and independence.

401(k)s To Be Abolished? Submitted by Jerry Cohen on Tue, 10/28/2008 - 22:16 House leaders are, according to this story, talking about doing away with the 401(k) tax breaks and replacing them with mandatory government run retirement accounts. If that turns out as well as congressional direction of Fannie Mae and Freddie Mac, you might want to consider some alternative retirement plans. Call me.

Hedge Fund Trader Thanks Stupid Traders Who Made Him Rich Submitted by Jerry Cohen on Tue, 10/21/2008 - 09:34 Here's word from inside the paper economy. A hedge fund trader retires and thanks the "stupid" investors who made him rich. Somehow, I doubt that they did as well.

If you would like to invest in the real economy through EquityBuild, where we make real money by providing real homes with loans from real community banks -- call me.

Another GO Zone Update Submitted by Jerry Cohen on Mon, 10/20/2008 - 23:52 In response to all the queries; No, I haven't got a tax lawyer to confirm yet that the GO Zone depreciation benefit has been extended until the end of 2009. On the other hand, an increasing number of reports indicates that this remarkable real estate investment tax shelter has, in fact, been pushed out. As soon as I know for sure, we'll change the countdown clock and provide links.

Real Banks Say No to Bailout Money Submitted by Jerry Cohen on Wed, 10/15/2008 - 11:32 Here's a great article that really shows the difference between the real economy and the paper economy. Like the banks that EquityBuild deals with, those cited in this article don't need or want to take part in this massive drain on the taxpayers.

Call us if you would like to participate in the traditional American economy and build real financial independence for yourself and your loved ones.

The Real Economy Vs. the Paper Economy Submitted by Jerry Cohen on Sat, 10/11/2008 - 19:43 I've been having e-mail conversations with several of you about all the people whose stock market portfolios have lost so much value in the current meltdown. One person told me about a relative, a hedge fund manager, who is making a fortune by betting against the U.S. economy. My response was to ask, "How can working people win in a system based on that sort of paper wealth?"

The answer, of course, is all around you. Look at all the people who have lost years of gains in their retirement accounts almost overnight.

We at EquityBuild, however, are part of the "real economy." We're not making as much money as the big hedge fund managers but we create real value; real homes for real people. Before, during and since the collapse of the sub-prime bubble, our investors have consistently and rather dramatically increased their net wealth -- every single one of them.
I'm very proud of our entire team as well as what they have done for our investors, and I just wanted to say so here.

The Flight to Quality Submitted by Jerry Cohen on Fri, 10/10/2008 - 18:50 In answer to all your questions. Yes, we're still arranging mortgage loans for holders of our real estate portfolios. Given the headlines, some folks find this surprising. They shouldn't.

Our investment strategy is as safe as they come. Local community banks are happy to loan money to buy income producing properties that are truly great values; and our homes are. Wall Street bet on a continually appreciating real estate market, and lost. EquityBuild has never played that game.

The real estate market could go down significantly, but your EquityBuild portfolio would continue to increase in value. It isn't a "get rich quick" scheme, but it will make you rich if you have a little patience and common sense. It's too bad Wall Street didn't seem to have either.

Bailout Cost $6,500 Per Family Submitted by Jerry Cohen on Wed, 10/08/2008 - 23:22 According to many estimates, the cost of the sub-prime rescue will cost each American family, on average, $6,500. Fortunately, Congress has provided an alternative way to help solve the housing crisis -- a depreciation allowance for creating housing for those who need it most. If you would rather invest in a profitable portfolio than pay taxes, we can help you do it.

Repair Your Retirement Submitted by Jerry Cohen on Tue, 10/07/2008 - 19:18 U.S. Rep. George Miller recently said, "Unlike Wall Street executives, America's families don't have a golden parachute to fall back on. It's clear that their retirement security may be one of the greatest casualties of this financial crisis." If this has happened to you, EquityBuild's real estate investment program may be just what you need to repair your retirement.

In fact, Peter Orszag, the head of the Congressional Budget Office, says Americans' retirement plans have lost as much as $2 trillion in the past 15 months. So we know a lot of people need to augment their savings. Using our turnkey investment program, a working couple using only their good credit could build a million dollar retirment in about 15 years. If you're interested, I urge you to contact me.

Still Waiting for GO Zone Benefit Confirmation Submitted by Jerry Cohen on Sun, 10/05/2008 - 14:18 I've been trying to confirm that the "Housing and Economic Recovery Act of 2008" does, in fact, extend the accelerated depreciation benefit until the end of 2009. I'm not a lawyer, but it certainly seems to be the case. And it couldn't come at a better time. It's looking more and more as if huge tax increases are on the way.

There is simply no other tax shelter instrument as powerful as the GO Zone benefit. What makes it particularly remarkable is that it requires no net cash payment with EquityBuild. Your rental properties' mortgages are paid by government housing authorities administering the federal rental voucher program, but you get enormous tax savings instantly.

If the GO Zone benefit has been extended, it will be easier than ever to protect yourself from high taxes. I've never known a better or more profitable time to get into real estate investing.

Breaking - GO Zone Depreciation Benefits Extended Submitted by Jerry Cohen on Wed, 10/01/2008 - 10:51 This is fantastic news for investors who haven't yet taken advantage of the most significant tax shelter in modern history. The "Housing and Economic Recovery Act of 2008" has just passed. All the details of the new law are not yet in but it does appear that the GO Zone depreciation benefits that allow investors to claim half their depreciation expenses in the first year of a property purchase has been extended until the end of 2009. All the rest of the GO Zone tax benefits seem to have been extended as well. This includes the ability to apply excess depreciation expenses backwards to recover taxes paid five years in the past.

As things clarify, I'll have more here. I can't provide you with a link to the newly passed bill yet because Library of Congress links expire after only a few minutes. For those who know how to use Thomas, click through here and search for "Housing and Economic Recovery Act of 2008"

Smaller Banks Thriving Submitted by Jerry Cohen on Fri, 09/26/2008 - 11:07 If you've ever seen the classic Jimmy Stewart film, "It's a Wonderful Life," you know something about the tradition of small, community banks in America. This article from the Washington Post points out that these same banks are doing better today than ever. That's why EquityBuild is able to provide mortgage loans to our clients even while huge, impersonal Wall Street firms stumble.

Smaller banks with roots deep within their communities are thriving. A big New York firm just doesn't have the ability to come into the Jackson market, for example, and actually look at the quality of a real estate investment. Our bankers know that the houses we rescue are fabulous homes worth much more than the money they are lending. They know because they can actually drive to these homes and see for themselves.

Local banks also know there's a long waiting list of federally subsidized renters lined up to live in our managed properties. These federally guaranteed rents more than cover the cost of ownership, so local banks are eager to have these financially solid mortgages in their portfolios. This is, in economic jargon, a "flight to quality." If you'd like to take that flight out of financial uncertainty to economic security and real wealth, we'd be more than happy to book you a ticket.

Hat tip to Instapundit.

Low Mortgage Rates Create Historic Opportunity Submitted by Jerry Cohen on Wed, 09/24/2008 - 08:06 The federal credit bailout is producing incredible bargains in the loan market. When home prices were high, we told overexcited real estate investors NOT to buy in overpriced markets. We said, "Wait until prices come down and then grab as many bargains as you can where rents are high enough to pay off your mortgage loans."

Well, now's the time. Not only are home prices great, the long term mortgage rates have created everything you need to make fortunes in the real estate market. It's not the "get rich quick" trap so many people fall into. That doesn't mean you can't get rich though. It just means you have to use your head instead of following the herd that created the housing bubble.

Buy low, sell high. You wouldn't think it would be that hard to understand, but it apparently is for too many people.

Ike Further Strains Rental Housing Supplies Submitted by Jerry Cohen on Sat, 09/20/2008 - 12:08 Real information is finally appearing about the incredible damage done in Texas by Hurricane Ike. Here are truly amazing USGA pictures. It's clear that one impact will be a worsening of the region's already serious shortage of affordable rental properties.

It will be years before all the homes damaged are repaired. Some, in fact, will never return to the housing market. Remember, there were many people hit by Ike who had moved to Texas following Katrina's destruction. The effects of Ike on rental markets will be felt all the way to Louisiana and Mississippi. Please give what you can to reputable charitable organizations such as the American Redcross.

New Low Mortgage Rates Present Remarkable Opportunities for Savvy Investors Submitted by Jerry Cohen on Wed, 09/17/2008 - 11:42 The media is full of stories today about the new low mortgage rates caused by confusion in the credit market. Many also refer to new tighter standards for those loans. These higher standards make sense for banks that want to avoid more bad loans. They're not an issue for us,though, because our investment is of such high quality.

All this combines to create enormous opportunities for smart investors who want to profit from the real estate market. The new low mortgage rates have fallen even as the demand for rental housing is increasing. I've never seen the fundamentals for income-based real estate investment better than they are now. Remember, if you wait for public opinion to change, you are following the same crowd that bought at the top of the housing bubble and sold after it crashed. Here's a couple of stories you can read for more information. Here and here.

Yes, We Can Still Arrange Mortgage Loans Submitted by Jerry Cohen on Tue, 09/16/2008 - 10:56 In response to all the questions I'm getting about the credit crisis and the disarray on Wall Street, the answer is "yes, we can still arrange mortgage loans for our qualified clients."

In fact, what has been going on for many months now has been a "flight to quality." That is, lenders have learned the hard way that it is a bad idea to base loans on the foolish notion that constantly rising prices will allow anybody to buy a house on credit and resell it at a profit. Nowadays, many lenders will only issue mortgages based on the very best balance sheets.

Because that's what we provide at EquityBuild, the lending institutions we work with continue to welcome and fund our clients. Remember, rent payments for EquityBuild homes come directly from the Federal Government's Section 8 rent subsidy program. Lenders often worry about the quality of renters when providing mortgages for income properties. In our case, they know the federal government is not going to go broke, so we have a real competitive advantage that you can use to accomplish all your financial goals.

Foreclosures May Not Be Bargains Submitted by Jerry Cohen on Mon, 09/15/2008 - 10:03 Recently, it seems that a lot of the visitors to this site are interested in a quick turnaround of properties. Though our standard portfolio is designed to build significant equity over a decade or more, EquityBuild can provide opportunities for those who want to sell newly rehabilitated properties quickly. In fact, I think that anytime you are buying a property, it should always be based on solid financial fundamentals. If for any reason your sale is delayed, it's always good to know that your property will pay for itself while you wait. That's the way it works with EquityBuild income-producing properties.

The last thing you want is to be stuck with mounting payments. Just to drive home that point, I'd like to link to a good piece I read recently at the Biggerpockets blog titled "Gambling at the Foreclosure Auction: High Stakes." The point is that foreclosures that look like bargains aren't always bargains, but the whole piece is worth reading here.

This Is the New Site Submitted by Jerry Cohen on Fri, 09/12/2008 - 09:50 In my first post here on the "non-beta" site, I'd like to thank the team at 2820 Design and HD Interactive. They've done a great job helping clarify what EquityBuild does. Now that we're "live," I'll try to take the time to post here on the blog a lot more regularly.

There's a lot going on right now. EquityBuild is expanding. We've been pretty close to capacity recently and we need to ramp up operations for several reasons.

One reason is that demand for our rental units by Section 8 voucher holders is higher than ever. The other is that the GO Zone tax benefit is winding down. and I'm getting indications that a lot of investors have decided they can't miss out on this remarkable tax shelter.

We love being able to provide homes for the deserving recipients of the federal housing programs while simultaneously giving major tax cuts and a fantastic real estate-based investment opportunity to our clients.

Federal Housing Administration Acts To Reduce Bad Housing Loans -- About Three Years Too Late Submitted by Jerry Cohen on Tue, 09/09/2008 - 11:48 Federal Housing Administration Acts To Reduce Bad Housing Loans -- About Three Years Too Late. Though there's scant news coverage at the moment, it has just gotten much more difficult for real estate investors to get mortgage funding. Here's one of the few stories I could find about it. This is due to actions by the Federal Housing Authority that have reduced loan guarantees from ten to four per individual. Fortunately, there is a way for smart investors to get around this problem and EquityBuild is leading the way offering a unique solution to the problems caused by this limitation.There's times, by the way, that I just scratch my head. Right now, we need every possible incentive for investors to buy homes. The subprime credit fiasco pushed more than a million new additional families into the rental market last year. Many are in desperate need of rental properties. Additionally, the housing industry desperately needs buyers to bolster a weak market that pulls the entire economy downward.

Desperate Need for Affordable Housing Submitted by Jerry Cohen on Mon, 09/08/2008 - 16:02 This article, titled "Renters find doors shut on affordable Section 8 housing," does a good job of presenting the impact that the shortage of rental units is having on HUD voucher recipients. As I’ve written before, the collapse of the housing bubble has driven more than a million more families into the rental market. Naturally, those on the low-income end are suffering most because of the rental housing shortage.

It really is a desperate situation for a lot of people who have the vouchers to help them put their lives together, but no homes for them to rent. We at EquityBuild could do more to help with this problem, if more people would sign up for our program.

Charity Program Heads Up Submitted by Jerry Cohen on Sun, 09/07/2008 - 13:20 As regular readers know, a big part of EquityBuild's "value proposition" is providing a socially responsible investment for people who want to know that their portfolios are providing for others as well as themselves. We do this by providing an extremely profitable portfolio that generates high-quality rent-subsidized housing for people who have been distressed by factors beyond their control. Recently, though, I've been talking to a number of clients who want to do even more for their communities. After consultation, I think we may have exactly the solution they want: a program that could be the most dramatic and effective charitable giving program available.
I'm not going to say too much about the program right now, mostly because I've still got to talk to tax and charity lawyers. We need to be very certain that this strategy is in accordance with existing laws. I will say, though, that it is based on the value of credit.

Progress Report on Official Launch Submitted by Jerry Cohen on Thu, 09/04/2008 - 01:37 I'm happy to report that we're closing in on the official launch for the new EquityBuild Website. This will continue to be the correct URL but the site itself should be much easier to navigate. We'll be implementing several important programs for our affiliate and charitable organizations at the time as well. The date at this point is not certain, but it looks like the first or second week of September.

I'm very happy to say we're working with one of the very best Web design firms around -- 2820 Design. This is a group that does far more than implement attractive Website design. They are the authorities when it comes to developing graphic solutions for Websites that present unique products and services. This description certainly applies to EquityBuild; as there is no other organization that provides our turnkey real estate-based investment portfolio.