Decreasing your housing budget

Decreasing your housing budget may mean more money in your pocket.

That’s because housing is the single largest expense for most Americans. Reducing mortgage payments or rent by even a fraction can free up substantial cash flow.

The best part? You don’t have to move into a shack to make it happen. Here are a few strategies to increase cash flow by decreasing your housing costs.

Choose the suburbs over the city. On average, suburbanites save $9,000 per year on housing and child care when compared to city-dwellers. By and large, the money you may save on the cost of living in the suburbs can outweigh the added transportation expenses. It’s not a shift for everyone, but relocating further from the city might make sense financially, at least for the short-term.

Rent until you’re ready. It’s worth considering leasing a house or apartment until you’re financially positioned to buy a house. Even if a mortgage payment seems cheaper on paper than renting, ownership can come loaded with unforeseen expenses. Flooded basement? That’s on you. Broken furnace? Also on you. Renting isn’t necessarily a permanent long-term strategy, but it beats potentially going into debt covering surprise repairs that are beyond your budget.

Find a reliable roommate. Sharing the cost of housing can free up a significant portion of your cash flow, especially in expensive cities. In New York City, for instance, having a roommate can save you up to $15,500 every year. Just be sure you take on a roommate that doesn’t flake out when rent is due.

Rent out a room. If you’re a homeowner with room to spare, consider leasing space to a trusted friend. The extra income can offset the cost of mortgage payments and result in more cash flow going toward saving, investing, or even paying off the house faster.

Contact me if you’re interested in learning more about how budgeting fits into an overarching financial strategy. We can review your income and expenses and make a game plan for how you can stop spending like a sucker and start saving like the wealthy.

M.Amos

Returning to a ‘normal’ office structure

And nothing screams normal like the office. The messy desks, the long commute, the last-minute requests from your boss, even those boring meetings—they all may appear oddly comforting after a year spent at home.

But beware. The return to normal might start off exciting, but you may find that the novelty is wearing off before too long. You might rediscover certain things about the 9-to-5 life that drag you down.

If that’s where you find yourself, pay attention to your response to the ‘new norm’. It may mean that your work location isn’t the problem—it’s the job itself.

That’s because it doesn’t matter whether you work from home or in an office if your career is being stifled by your job. A toxic work dynamic or disadvantageous model will drain you even if you’re working from a beach in the tropics!

So if you go back to the office and nothing changes, it may be time to find a new opportunity, one that offers…

  • Unlimited potential for income growth
  • Flexibility of time and location
  • Control over your success

So as you go back to the office, keep your eyes open. If you’re still dissatisfied with your job, consider something else. Let’s explore opportunities for you to break the mold and pursue your own path.

M.Amos 2021

Are Americans going back to work?

It’s official—Americans aren’t going back to work.

Even though there were 10 million job openings in June of 2021.¹

If you’ve been out and about, you’ve seen firsthand that jobs aren’t getting filled.

You may have noticed the signs at your local grocery store. Or the longer wait at your favorite restaurant. Or slower service from businesses you depend on.

They all stem from the same source. Americans aren’t rushing back to work.

But why? The COVID-19 pandemic caused mass unemployment and havoc for millions of American families. Wouldn’t they want to start earning money again, ASAP?

It’s not the unemployment benefits holding them back. Those dried up months ago, and the numbers still haven’t budged.

And again, it’s not that there aren’t jobs. There are millions of opportunities out there!

Here’s an idea—many people have woken up to the fact that most jobs suck.

Most jobs leave you completely at the mercy of your boss. If they mismanage the business, your job’s in danger. If you want a bigger bonus, your job’s in danger. If another pandemic breaks out, your job’s in danger.

They give you no control over your hours, your income, your location, or your future.

Who would want to go back to that?

Instead, Americans are looking for a better opportunity. They want control of their future, their wealth, and their hours. They want to replace the insecurity of a 9 to 5 with more reliable sources of income.

If they see an opportunity that checks those boxes, they’ll be willing to re-enter the workforce.

Americans are looking for a better path. The million-dollar question is, who will provide it for them?

M.Amos

Millionaire Mindset

¹ “Many Americans aren’t going back to work, but it’s not for the reason you might expect,” Paul Brandus, MarketWatch Aug 14, 2021, https://www.marketwatch.com/story/many-americans-arent-going-back-to-work-but-its-not-for-the-reason-you-might-expect-11628772985
² “What states are ending federal unemployment benefits early? See who has cut the extra $300 a week,” Charisse Jones, USA Today, Jul 1, 2021, https://www.usatoday.com/story/money/2021/07/01/unemployment-benefits-covid-federal-aid-ending-early-many-states/7815341002/

 

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

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