Real Estate Investing

I’ve jumped on the living frugal bandwagon and am trying to live my life pinching pennies wherever I can.  I’ve gone to the energy efficient light bulbs.  I try to buy in bulk, although I really hate having stacks of too much stuff laying around.  We’ll use it eventually, though.  I read Being Frugal at least once or twice a week.  I’m also a fan of Brip Blap for their little tips and ideas.

Even with all the corners I’ve had to cut to make ends meet in these long, dry days as a Realtor, it was disconcerting to read today about home prices dropping 19 percent last month.  Deeply disturbing, in fact.  Since mortgage companies really are not working with home owners as they say they are, my advice is for homeowners to just sit tight if they can and pay that mortgage down before you think about selling.

Meanwhile we are penny pinching at my house.  In preparation for a yard sale this weekend, I went through some cabinets and closets and found several items of value.  I’m thinking all homes have these kinds of hidden treasures that you’ve forgotten about.  For a quick determination to see what something is worth, check it out on eBay.  While the amount may not be what you’d get at a Sotheby’s Auction, the eBay auctions will give you a great idea of what Mr. an Miss Everday will spend for something.

Start digging and you may also find old savings bonds that could be cashed in.  Additionally, every state has an unclaimed property division that holds unclaimed assets that the law requires banks and other financial institutions to turn in after so many years of no contact with the original owner.  From Business Week,

In addition, at the end of 2008, there was more than $32 billion in unclaimed money sitting in state treasury coffers across the country, according to Shane Osborn, treasurer of Nebraska and president of the National Association of Unclaimed Property Admimistrators (NAUPA), a nonprofit organization affiliated with the National Association of State Treasurers. Unclaimed property accrues from a wide range of sources, including final paychecks that employees never collected, abandoned bank accounts, stock and bond certificates put away in safe deposit boxes or hidden under floor boards in homes, consumer product rebate checks, and utility deposits. Some of the money will never find its match, such as unused gift certificates at retailers which aren’t required to keep records of who bought them. 

You can see if your name or your great grandpappy’s name is on the list through the state links provided by NAUPA here.  By the way, I used to work for this organization when I was affiliated with the National Association of State Treasurers and can vouch that it’s a great organization whose members strive to reunite owners with their property.

Good luck - I hope your penny pinching works and your search for unclaimed property uncovers a treasure trove!

Several days ago - before I disappeared for part of the week to attend my oldest daughter’s summer orientation for college - I caught this article from the New York Times and bookmarked it for readers here at Banks.com.   Financial writer Edmund Andrews wrote a riveting, heart-wrenching story about his personal credit crisis through a mortgage catastrophe.

Mr. Andrews found himself in a situation where he wanted to buy a home but because he was paying alimony and child support - and because his fiancee wasn’t yet working - he needed one of those *special* loans that dominated the 2005-06 buying years.

I thought I knew a lot about go-go mortgages. I had already written several articles about the explosive growth of liar’s loans, no-money-down loans, interest-only loans and other even more exotic mortgages. I had interviewed people with very modest incomes who had taken out big loans. Yet for all that, I was stunned at how much money people were willing to throw at me.

Mr. Andrews first found himself moving toward a “stated income” loan where he could declare what his income was with no paycheck receipts or tax returns produced as evidence of his earnings.   However, he quickly learned that his name was still on the mortgage being paid by his ex-wife so this plan put his debt to income ratio over the limit.

Bob didn’t get flustered. If Plan A didn’t work, he would simply move down another step on the ladder of credibility. Instead of “stating” my income without documenting it, I would take out a “no ratio” mortgage and not state my income at all. For the price of a slightly higher interest rate, American Home would verify my assets, but that was it. Because I wasn’t stating my income, I couldn’t have a debt-to-income ratio, and therefore, I couldn’t have too much debt. I could have had four other mortgages, and it wouldn’t have mattered. American Home was practically begging me to take the money.

Years later the family financial situation is sinking.  Mr. Andrews managed to save his marriage with his new bride, but they are bracing themselves for either foreclosure - or maybe they’ll be able to work with the lender to refinance.  For now they wait.  It’s been eight months since he made a mortgage payment.  Eight months without knowing what will happen would be torturous to me.  I can’t imagine how he and millions of others are feeling right now.

Go read Mr. Andrews full story. 

TLC has a great new home improvement show called DIY Disaster Rescue.  Right now it appears it can only be seen in Canada… or so one would think.  If you want to see how that big fancy yard with no privacy fence is fixed, you can watch online here.

Making a home improvement can sometimes only be as expensive as a few bags of mulch, some flowers, a can of paint, and some hard work.  Julie at Our Neck of the Woods had some before and after pictures showing the results of their new flower bed.  It looks great!  Here’s the before and after.

BEFORE

AFTER

Interestingly, more and more people think the skills needed for do-it-yourself projects are on the decline.  I can’t believe that people would actually be uncomfortable changing a lightbulb, but it might just be true, according to the site Home Improvement Quotes:

Only a quarter of us would be happy tackling some tiling compared with two-thirds of us happy to try a spot of wallpapering and three-quarters of us willing to wield a paintbrush. It’s no surprise that fewer than one in ten will attempt larger jobs like fitting a new bathroom or kitchen without some expert help. Many struggle with more simple home DIY / maintenance – the study showed that a fifth of us aren’t entirely confident when it comes to changing a light bulb. No matter how many other people we have with us.

I do feel entirely comfortable changing a light bulb so count me in the four-fifths of people who have that can-do attitude!