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| Landlord Newsletter October 2006 |
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The LPA Newsletter
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The difference between investing and speculating.
Everyone wants to get into the game. Real estate is the new darling topic at cocktail parties and from your hair dresser. People are quitting their jobs and running after real estate riches. This frenzy is being fueled by lenders who are giving anyone who can fog a mirror a loan- with no money invested. Loan requirements are being relaxed to Prozac-like standards. Teaser low rate and negative amortization loans are everywhere. Appraisers are appraising at way over market values. Why buy just one when you can get 5 and make even more money? After all, if my manicurist can do this, why can’t I?
What could possible go wrong?
After 20 years in this business, I can tell you what can go wrong. Everyone is saying that low interest rates are fueling the market and that when interest rates rise, that will be the end. In my opinion, interest rates don’t have to rise one bit for things to collapse. Millions of people have adjustable rate loans that are just starting to adjust. I just got an increase of $100 on a loan that I took over subject to. This is with interest rates at 5.5%. What do you think is going to happen when interest rate actually do rise? Fed chairman Greenspan has recently expressed his concerns about the loose credit requirements and has hinted that he will try to stop some of the excesses by reigning in some of the lender abuses.
The real estate market is flooded with newbees who are really speculators-not investors. These are people who are ruining it for the rest of us. They don’t bother to educate themselves. They depend on the advice of people who have ......
What The LPA says you should do and shouldn't do:
"I just paid a large unexpected tax bill. Now I need trauma counciling."
I know how that feels. I still can't sit normally, so I'll be lienient, but just this one time. - Steve, NY
"The rent is the last thing on my mind. I have more important problems right now."
She wouldn't elaborate and she wouldn't give me any indication of when the rent will be paid. I have no choice but to evict. - Dominic C., IL
"Why should I pay rent if I'm gonna buy the house next month?"
Who ever said the house was for sale? - Margo M., ME
"My son was supposed to pay you."
She said this each time we tried to collect after the rent was not paid by the 5th. Now it is the 25th and they are not responding to notices and even our attorney's letter. I even left a message stating that if they don't pay this week, they will have to pay the attorney's fee in order to stop the eviction, which will be in court the first week of October. - Mare M., Long Island, NY
"I can't pay the rent because things are really rough at work."
This was said as I was looking at their two brand new Ducati motorcycles in the parking lot. They moved out in the middle of the night a few days later to avoid eviction. - Leanne P., Rollinsford, NH
"I got 3 kids in college. What do ya want from me?"
I want the rent on time as agreed. Otherwise you can go live with your 3 kids at college. - Larry C., Connecticut
"I'm not giving half my paycheck to some stupid kid."
I just bought an already occupied three unit rental home, and the tenants in
one apartment seem to have a problem, not only with paying the rent, but
with the fact that I'm 24 as well. Hope they like getting evicted by "some
stupid kid" a little better. - Kendra F.,
"A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain." - Mark Twain
"Clothes make the man. Naked people have little or no influence on society." - Mark Twain
"What you cannot enforce, do not command." - Sophocles
"How much did your last tenant problem cost you?"
- John Nuzzolese
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