Three waves in the next Real Estate market shift

The next Real Estate market shift is Imminent.

What will this market shift look like?

The next real estate market shift in the residential sector will come in three different waves, so PREPARE yourself now.

The first wave will be people losing their houses after their forbearance has ended through the beginning of the foreclosure process.

With homeowners losing their jobs or being furloughed, their income has been reduced or eliminated because of the Covid19 pandemic.

The second wave will be a huge increase in the number of foreclosures being called out on the courthouse steps of each county in America.  These “call outs” are religiously done on the first Tuesday of each month.

The third wave will be vacant homes all throughout the country.  These homes have now been foreclosed upon and now sit empty.  Drive through any neighborhood USA and you will see home after beautiful home just sitting empty.  This third wave will be where many folks will finally try to “catch up” and at this point, it will already be almost too late.

What can we do now to prepare for these imminent waves?

Wave 1 of 3

Wave one will be people desperately trying to stop the foreclosure of their property. Initially there will be noticeable signage all over town saying “I stop foreclosures”. These organizations (or investors) can and do prevent and stop foreclosures through a process called “Subject to”.

Let’s explain how it works in a little more detail:

The homeowner falls behind with his mortgage and cannot catch up and the homeowner starts receiving strongly written letters indicating foreclosure is imminent.  These organizations then catch the arrearage payments for the homeowner and take possession of the home through a Quit Claim Deed.  Many times the investor may allow the homeowner to remain in the property and assist with making improvements on the property during that time.

Once the improvements are completed, the investor will usually rent the property out. This prevents the foreclosure on the home and maintains the homeowners mortgage payment history from negative impact that a foreclosure would cause.

Wave 2 of 3

The second wave is what is called the actual foreclosure process.   For example, in the state of Georgia from start to finish is approximately eight months.  Basically, from the time that the first mortgage payment is missed to the property being foreclosed on the courthouse steps is a very long and arduous eight months. The attorney that processes the (foreclosure) closing on the property represents the mortgage company that has been defaulted upon. It is normally a sixteen (16) step process to go through all the way through to the courthouse steps. There are two possible outcomes if the homeowner has not filed for bankruptcy during the foreclosure process or caught up the arrears mortgage payments prior to the foreclosure. If the homeowner has not done one of those two things then the property will be “called out” on the county courthouse steps that next first Tuesday of the month.

The “called out” process will end in one of two ways.  Either the property is purchased by the highest bidder on the courthouse steps or nobody bids high enough to satisfy the mortgage company and the mortgage company keeps it, which takes us to the third wave.

Wave 3 of 3

What happens if the property is not or does not change hands at the foreclosure process on the courthouse steps?  If the property is not sold on the courthouse steps then the mortgage company or lender keeps the property and puts it on the market for sale. This is what the general public typically sees or talks about or remembers when they think of the foreclosure crisis. Houses all over town in every subdivision with for sale signs that are vacant (and most of the time in disrepair) and end up selling below the values of typical houses in that subdivision which lowers values and equity for homeowners within that same subdivision.

If you’re an investor in residential real estate you can take advantage in these investments in either of the three waves mentioned:

Obtaining property through Wave 1:

After catching up the arearage you then obtain ownership through a Quit Claim Deed.  This is typically called the “subject to” process.

Obtaining property through Wave 2:

When the mortgage company or lender presents the property at the courthouse steps, which is typically called the “call out”, you bring either cashiers checks or cash.  You then obtain ownership through a Quit Claim Deed.

Obtaining property through Wave 3:

Obviously, the final way to obtain the ownership is when the foreclosure has actually occured and you can then buy the property directly from an REO (Real Estate Owned) agent.  This is the listing agent that represents the mortgage company or lender.

 

These three ways are exactly how investors made a lot of money during the last foreclosure crisis. Obviously, we are hopeful that we could have sustained the booming real estate market that we have all experienced prior to Covid19, however it doesn’t look good at this point.

Either prepare yourself for these three waves or depend on our expertise to get you through it.

Either as an investor or a current homeowner.  Being educated in the forefront of a crisis is the key to getting through it successfully.

Reggie Moon

Broker of Eclipse USA Realty

404-Eclipse

Can you use your Life Insurance in your Retirement Plan?

Can someone use their life insurance in their retirement plan?

Let’s first explore what retirement looks like these days.  For clarification, the main difference between a strictly unemployed person and a retiree:  Someone in retirement currently has some type of income.  This retirement usually comes in one of two different ways:

  1. Either a pension or some type of investment like a 401k or IRA.
  2. Government funds such as Social Security.
  3. Saving a lump sum of money and withdrawing from it regularly, such as an inheritance or an annuity.

For the example below, let’s assume you don’t have a pension from your company nor a 401k or IRA. In this scenario, your retirement would be 100% dependent on your savings.

The amount you require to successfully retire is dependent on two main factors:

  1. The annual income that you desire during your retirement years.
  2. The length of time you desire to have that income aka as RETIREMENT YEARS.

To keep things simple, say you want to retire at 65 years old with the same retirement income per year as your pre-retirement income per year – $50,000. According to the World Bank, the average life expectancy in the US is 79 (as of 2015).¹ Let’s round it up and call it 80 for our example which means we should plan for income for a minimum of 15 years. (For our purposes here we’re going to disregard the impact of inflation and taxes to keep our math simple.) With that in mind, this would be the minimum amount we would need saved up by age 60:

$50,000 x 15 years = $750,000

There it is: to retire with a $50,000 annual income for 15 years, you’d need to save $750,000. The next challenge is to figure out how to get to that number (if you’re not already there) the most efficient way you can. The more time you have, the easier it can be to get to that number since you have more time for contributions and account growth.

If this number seems daunting to you, you’re not alone. The mean savings amount for American families with members between 56-61 is $163,577² – nearly half a million dollars off our theoretical retirement number. Using these actual savings numbers, even if you decided to live a thriftier lifestyle of $20,000 or $30,000 per year, that would mean you could retire for 8-9 years max!

One option that you could consider is a tool that you don’t normally consider when preparing for retirement.  Your life insurance policy.

One of the benefits of a permanent life insurance policy is the ability to accrue “cash value”.  In its simplest form, the cash value within a policy is the balance remaining after a portion of a premium payment is applied to insurance costs.  It is this feature that provides a few different uses for life insurance in retirement. The cash-value account grows over time and can be withdrawn as a source of income as long as the withdrawal amounts don’t exceed the amount paid in premiums.

Another option is to borrow from the cash value.  Think of it as a loan you are getting form your future self.  Technically, you’re not required to pay it back, although it will accrue interest and ultimately the loan amount will be deducted from the death benefit  (which is the amount paid to your family upon your death).

This brings up another discussion point:  Term Life Insurance.  This is life insurance that does NOT provide a cash value option, does not have a withdrawal or borrow opportunity but it DOES provide a death benefit coverage for your beneficiary(ies).  If your term policy is close to expiring or you only have a term policy through your employer, you need to obtain a new illustration to see what the cost might be in your retirement years and even IF you can qualify at that point.  Weighing out the cost now for your current self, versus the cost your future self could pay has to be considered now.

All of this information may be hard to hear for the first time, but it is the first real step to preparing for your retirement.  Knowing your number gives you an idea where you want to go.  After that, It’s figuring out a path to that destination.  If retirement is one of the goals you’d like to pursue, let’s get together and figure out a course to get you there — no math degree required!

Sources:
¹ “Life expectancy at birth, total (years).” The World Bank, 2018, http://bit.ly/2I8w4gk.
² Elkins, Kathleen. “Here’s how much the average family in their 50s has saved for retirement.” CNBC, 4.21.2017, http://cnb.cx/2FX0Ckx.

₃  Investopedia. Do You Need Insurance After Your Retire? Tim Parker. January 7, 2016.

 

Why Eclipse Financial Services

Eclipse Financial Services

Hi, my name is Reggie Moon.  My wife Sindy and I own a Real Estate Company on the Southside of Atlanta, Georgia.  Three years ago we added financial services to what we do for a very simple reason. Two out of one hundred people are going to buy a house this year, two! Out of those same one hundred people there are eighty five of them that are in for the biggest financial train wreck that has been seen for generations. So if you are in the business of helping people like we are, would it be better to JUST change folks address or change their financial trajectory?  I go with the latter.

Then who are going align with to help folks?    An entrepreneur that has done it maybe NEVER or one that has built not just one but two multi-billion-dollar market-cap financial services companies. We aligned with Hubert Humphrey with Hegemon Group International.    He originally built Primerica Financial Services and World Financial Group.  So if you are going to align with someone then why not go with someone who has already successfully done it.

If you do more than just change a family’s address then give me a call to discuss.  Reggie Moon, Eclipse USA Realty and Eclipse Financial Services.

Call or click 404-Eclipse(325-4773) www.404Eclipse.com

 

 

 

Budgeting Like a Boss

When it comes to creating your own monthly budget, sometimes planning is easier than the practice. Keeping track of finances can be tricky, but, with a few guidelines and time, you can take charge of your bank account once and for all.

Adopt a weekly allowance
Parents offer their children an allowance to teach them about saving money, and the same principles can be applied to your own spending as an adult. Set aside a specific amount for treats and other nonessential expenditures, and vow that once the money is gone, extras can wait until next week.Avoid eating your meals out

Planning out your meals for the week and grocery shopping ahead of time may seem like a pain, but it can help you save money in the long run. Eating out at restaurants and fast food places adds up significantly over time. Just remember to be cautious at the grocery store or warehouse store to avoid temptation buys.Consider saving to be a payment to yourself

Adding to your savings account after each paycheck is just as important as paying any other bill, so treat it as such. Choose a set amount to put away from each paycheck you receive and, before you know it, the number in your savings account will be something you can be proud of.

Save all of your receipts

Keeping receipts is a great way to see your spending in action. Sometimes it’s difficult to remember how much a cup of coffee a day or a take-out meal each week adds up by the end of the month, but putting your receipts in a secure spot and adding up the amounts can help prevent you from overspending.