Distressed Real Estate Times changes to the various editions

1st edition 67 pages
2nd edition 108 pages
3rd edition 164 pages

New material added to the 2009 THIRD edition compared to the 2008 SECOND edition

• How lack of vacation home liquidity can force you to sell a good property at a bad price or enable you to get a bargain at a good price
• Using crude timing to avoid getting caught in a vacation home liquidity trap
• The American Recovery and Reinvestment Act of 2009
• More on short sales
• Detailed account of my son's 5 month search and REO home purchase 12/08 in Fairfield, CA

New 54 page chapter: “2008-2009 Developments” including:

Big picture insights obtained at my wife’s 2008 Harvard MBA reunion which occurred during the stock market crash

Mortgage default insurance (credit default swaps)

Selling short (betting on prices going down) as opposed to short sales

Hedging

Comparison of current policies with New Deal in Great Depression

Inflation concerns and protections from inflation

Treasury Inflation Protected Securities

TARP

Countercyclicality

Ascendancy of the income approach to appraisal in current market

Chances of another Depression and protections from it

Socialism is a matter of degree—we are moving in that direction

Case-Shiller and OFHEO home stats

History of maximum tax rates and triggering income levels in light of Obama tax rate proposals

Going off the tax and utility grids as inflation and tax protection

Prospects for federal rent control because of economy and Democrat control

The new buy-and-bail syndrome

Junior lenders who are ostensibly wiped out refusing to agree to short sales unless they get paid to do so

New deposit insurance limits

FHA in CA again after decades of absence due to high prices and low limits

Subprime hurting homeowners associations

Areas in where values have gone up

Housing and Economic Recovery Act of 2008

The New New Deal

Lack of move-up buyers hurting middle price ranges

The Housing and Economic Recovery Act of 2008

Foreclosure OREO purchase

The need to avoid making things worse by flailing

'Stimulus' package

Opportunity in the current labor market to upgrade your employees

Depression lessons learned for real estate investing

Self-storage not much affected

Deflation dangers and how to protect from them

Worst case scenarios

1981, not 1932

40 times monthly gross (prices have been in the 150 to 250 times monthly gross range for decades) rental houses in one major city’s suburbs

False bottom?

Trump project folds

and more...

New material previously added to the 2008 SECOND edition compared to the 1991 FIRST edition

• Implications of Alan Greenspan’s “froth” market
• Lack of rational behavior by the market
• Danger of outbidding idiots
• Self-inflicted Ponzi “Schemes”
• Investors buying properties sight unseen
• Extreme optimism by inexperienced investors
• Dangers of trying to predict the bottom of the market
• Danger of assuming distress always means bargains
• Leper properties
• Properties sold using legal notices
• Evergreen strategies
• Mistake of assuming recent past in near future
• Hard times make you grumpy
• Comparisons with the Great Depression
• Don’t use current trouble as excuse to wait
• The gravitational pull of net operating income on values
• The gravitational pull of substitutability on values
• Rudimentary risk management techniques
• Using temporal diversity over time to spread risk
• Analysis of the business cycle
• The emotions of the different parts of the business cycle
• Comparison of real estate to stocks
• The essential nature of real estate investment
• The lack of control compared to your own business
• The point of maximum irrational exuberance
• The point of minimum popularity of real estate investment
• The always-higher-values myth
• Properties that stay down in value forever
• The generic real estate related financial market scandal story
• The subprime crisis and panics
• Subprime foreclosures
• $4 billion profit made by two guys selling subprime short
• Mortgage Forgiveness Debt Relief Act of 2007
• Original Issue Discount Rules, also known as Imputed Interest Rules
• Acquisition of two apartment complexes in Texas in 1983
• Deeding the complexes in lieu of foreclosure back to the lenders
• Criminal law against equity skimming
• Need to avoid blank check clauses
• Ceiling on personal liability clause
• Property management while waiting for foreclosure
• O.J.’s pension and homestead asset protection
• Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
• “Perfect Storm” perspective
• Edward Novak’s pre-foreclosure approach
• Legislative backlash against foreclosure “rescue” scams
• RealtyTrac foreclosure stats
• Lenders setting lower opening bids at foreclosure auctions
• Need for instant insurance and new locks when buy foreclosures
• Lenders not cutting prices on OREOs enough
• Illegal bid chilling
• Need to verify accuracy of foreclosure abstract services
• Litigating accusation that you are foreclosure rescue scammer
• East Coast perspective on foreclosures
• Check for discount lien release (short sale)
• Removal of the Resolution Trust Corporation chapter as a result of demise of the RTC
• Larry Loftis tax lien certificate investing approach
• New chapter on short sales