Louisville KY Real Estate: Want To Hear Something New?

Yes, my panties are in a bunch over the mortgage mess. It's something that is in the news all the time. It affects our business. But hey, I'm getting a little tired of writing about it so much. Can't help it. If you want to hear something different, do me a favor and email me or leave a comment as to what you want to hear about. Or else I'll just jaw-jaw about it some more...Thanks.

Louisville KY Real Estate: What Happens in Cleveland Stays in Cleveland? Only if They Can't Get Loot From Lenders

Ahhh yes...who doesn't remember with fondness the first time they saw the motion picture classic Godzilla -vs- King Kong?



Well, in case you didn't see it the first time, you can see it played out in real life up in Cleveland, Ohio. As kind of reported by MSNBC, in one corner is a whole slew of evil lenders backed by the power of L.O.O.T. In the other corner is the power of the local government. The Cleveland folks are honked-off because the city is getting stuck with costs of boarding up, demolishing, etc. houses that have been foreclosed on, etc. (at least until they can find some unsuspecting investor/buyer to pin it on...but even that strategy can't work so well anymore since there are fewer investors). They also don't cotton to the declining property values that are the result of too many houses for sale and not enough buyers. That is bad for property tax revenue. They are suing based on a public nuisance law, you know the one that says if a home owner moves out of a house and it causes problems, the people who lent the purchase money should pay (?!?!?).



But never fear! Old Milton Friedman was right: when government gets too much power, corporate interests focus on getting involved with it. One-stop-shopping, don't you know. Again, humongo multi-national lenders will not be deterred by the minimal power the city government can wield. They will have their lawyers quash this attempt. If it starts getting a little too popular, they will exert influence at the federal level, rather than playing "whack-a-mole" with every small-medium-large city government in the nation.



So, in the final analysis Godzilla -vs- Kitty might be the better movie comparison:

PS: Mayor Jackson of Cleveland was quoted as saying "We have to hold accountable those who are responsible" (as he presented his reasons for suing lenders).

Does this include people who signed promises to pay loans back but didn't? How about the big institutional investors who wanted to buy C and D paper to theoretically pump up the return on Grandpa's retirement account? Does this include the Federal Government who encouraged lenders to make home ownership available to people who weren't likely to repay the loans? Does this include real estate/mortgage salespeople/brokers who helped people believe they could get into these homes they really couldn't afford? Or is accountability just for those mega-lenders with really deep pockets who offered the crummy loans whom we think we have at least some chance of getting loot from? Just wondering.

Louisville KY Real Estate: Alert The Media: I Have Something Nice to Say

Well, I just read the article in the Louisville Communist-Journal about the new program to get info to folks in default on their mortgages (here). Overall, it sounds OK. They have folks on phones explaining to defaulting homeowners about what their options are. Can't argue much with that.

I wonder if they also explain that when you sign a contract there CAN be unwanted consequences for non-performance?

OK, I guess that last part wasn't very nice.

Did Coffey Count Chickens Too Soon?

OK, I just read the Senate Republicans blocked the Democrats' effort to add $40 billion to the tax rebate. Did I jump the gun? Time will tell.

2/11/2008 Update on the Update: The McConnell amendment included the veterans, food stamps, etc. I guess I was right...Forget about the counting chickens too soon stuff

Dave's Crystal Ball Is Working

Today's Communist-Journal had a story (however, I had to go here to find it online) today about the Senate adding $40 billion (that's 40,000 millions of dollars) to the economic stimulus flap doodle tax rebate. Not to sound all Rush Limbaugh-y, but I told you so. Has anyone else thought that if they can afford a rebate, maybe they took too much to begin with? Nawwww, it's only money. We have lots of paper and ink, so we can always just make more. I even heard Congress is thinking of changing the name of the Department of the Treasury to The Department of Printing. Gives a whole new meaning to the phrase "freedom of the press", doesn't it?

Be Safe Out There

"Always bet on black."

-Wesley Snipes, noted economist

Well, in the big picture, I think the economy will bounce back. It's a safe bet we won't stay in the red forever. It will take longer than it should because both major political parties will race to proove that they are the most generous by giving away taxpayer money in order to get votes during this upcoming election.

My feeling is that from here on out, it might do us well to do things like not use leverage like crazy. And as a corrollary of that, focus on cashflow first, then things like taxes and equity build up. Get properties (like these)that lots of decent tenants would want to live in. Maintain those properties. Go for making more money on each rental instead of haveing alot of rentals, each of which makes you about $10 a month. Remember; the goal is to make alot of money, NOT just to be able to say you have a lot of properties.