According to the Wall Street Journal, the company was betting on “a continued economic recovery with a complex web of trades tied to the values of corporate bonds.”

They “bet” wrong and now have a little minus sign in front of $2,000.000,000.00 and counting. That’s right – they could lose another billion or so by the time the positions are closed.

You can read more details at http://online.wsj.com/article/SB10001424052702304070304577396511420792008.html

JP Morgan’s losses have no effect on me or my net worth.  Most of you know that I quit “investing” in the stock market years ago and have made a nice living investing in real estate instead.  In fact, todays news is just more evidence to me that I do not want to depend on these “Wall Street Guys” to provide for my families future.

Why do some people work for 30 or 40 years and then hand over their life savings to someone they don’t know, to invest in companies they don’t understand, so those companies can trade “complex derivatives” and maybe lose a couple billion on one bad bet?  I will never have a clear answer to that question.

But this may surprise you – I have tremendous respect for Jamie Dimon, the current chairman, president and chief executive of JPMorgan Chase.

As Ben Franklin said “Energy and persistence conquer all things.”

Jamie Dimon epitomizes that quote.  He delivers the good news, and the bad news, and keeps on going.

This month at our WREIA meeting, (which is May 21st) we are going to talk about getting started and restarted in 2012.

***

Mark Your Calendar for May 21st – The May WREIA Meeting
Getting Started or Restarted In 2012
5 Major Challenges Influencing Today’s Market That Didn’t Exist in 2005

***

The common theme running through my notes for WREIA is PERSISTENCE. Jamie Dimon has an enormous amount of persistence, and so should you.  You must have the ability to keep going, even when you face obstacles.

Times have changed – pretty dramatically -  since 2005.  There are many new challenges that you face in this business, or any business.  If you choose to quit when you hit small bumps in the road, you simply will not make it to the finish line. Jamie Dimon didn’t resign with his announcement yesterday.  He didn’t quit.  Instead, he also suggested that it might even make his business more difficult.  Then – he got up today, and kept going.

Don’t be afraid to make mistakes.  Inevitably you will.  I still do, and will continue to make mistakes.  How you react to those mistakes will make a huge difference at your finish line.

We work every day to to give you the skills, tools, and access to the people you need to avoid mistakes and be successful.  If there is something I can help with, let me know.

Ok, it’s Friday, and it looks like it is going to be a beautiful weekend here in the DC area – make sure you take time to enjoy it.

….. and take some time to celebrate Mother’s Day!

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

Find video updates on the Profitable Property Channel at
 http://www.youtube.com/ProfitableProperty

There is a great article in Readers Digest about “saving” money on a bathroom makeover.

In the article, the author claims to do a $25,000 makeover for less than three thousand dollars.  I frequently read about “designers” that make these types of claims.

Would you approve a budget of $25,000 to remodel a bathroom in one of your investment properties?  Now, we aren’t talking a high end property – just your regular run-of-the-mill single family home in the DC Metro area.

Why on earth would you ever spend $25,000 to remodel a bathroom?!

I usually budget 3-5k to completely remodel a bath.  There are many factors such as the property location, size, features, and other expectations that the retail buyer may have that will influence how far you should go with the upgrades.

For instance, a Jacuzzi tub costs more than a regular tub.  We all know that, right?  But other features like a towel warmer, or extra storage space may be expected by someone touring your property.  If you don’t have some of those features, your property may be passed over.

***
Mark Your Calendar for May 21st – The May WREIA Meeting
Getting Started or Restarted In 2012
5 Major Challenges Influencing Today’s Market That Didn’t Exist in 2005   
***

Over the years, I have heard many reasons why someone who previewed one of our listed properties, ultimately decided to purchase another house.  Sometimes the reason they pass over my property seems trivial.  Regardless of how trivial you think the reason is, you should always pay attention to the feedback.

For instance, if your buyer is working 80 hours a week, the one luxury they may really look forward to is coming home one night a week, to spend time relaxing in their home spa – complete with a Jacuzzi tub.

You shouldn’t  underestimate the power of “relaxation” when promoting your property.  The price difference is only a few hundred dollars, but the faster sale often makes this upgrade a smart additional investment.

In other areas, safety may be a major concern.  In this case, a home alarm system may pay off well for you.  Maybe you could offer to pay for the next year of security service with any full price offer? How about two years of service?

You can find exactly what the designer did in the Readers Digest article at http://www.rd.com/slideshows/budget-bathroom-makeovers/

Saving money is great.  But, sometimes you save money by spending it on the features that your retail buyer will appreciate.

Enjoy!

Oh, and let me know how I can help you,

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

Find video updates on the Profitable Property Channel at

http://www.youtube.com/ProfitableProperty

I still enjoy 60 Minutes, and a comment stood out during last nights piece about the various European recessions.

If you missed it last night you can watch the video below, or read the interview here.

There are very big concerns for the United States recovery, if Europe is unable to get their various economies moving again.

Getting various countries economies going again is a big undertaking.  10 European countries are in a recession, and some countries like Spain have 23 percent unemployment.  This organized effort is even more challenging when – at one time or another -  many of these countries have been at war with each over the last 1,000 years or more.

One comment by a London financial analyst kept my attention – “….if it’s uncharted waters, then that makes a lot of people very nervous. ”

Why did it keep my attention?  Because when I hear statements like that, I know someone is making a profit.  When people get confused, or scared, there is opportunity.  Some people take advantage of the situation, and can harm companies or people  even more, while others see an opportunity to help.

That is exactly the case with Bankruptcy here in Maryland, DC and Virginia.   It’s fairly easy for you to find people or companies in various stages of bankruptcy, and from there, you have a choice.

Do you want to help a company or person, or will you look into the situation just for your own personal gain?  Entire industries exist on both sides.  Some “vulture funds” exist just to carve up companies and sell the pieces.  Other companies exist that are “turnaround” specialists and they help companies become profitable again.

We are going to be talking about Bankruptcy at our Washington REIA meeting next Monday.

Think about the content in the video above. We will use some of the comments in the video as a backdrop for our conversation  Monday night.   The issues happening on a global scale are also taking place on a local level right in our backyard.   When we finish Monday night, you will have the opportunity to be a “vulture” in some cases, or you can help people move on and get a fresh start.

The 60 Minutes segment makes the motto of the Maryland Districts Bankruptcy Court even more relevant to Monday night and our discussion at WREIA – “To promote social and economic order by reconciling the opportunity of debtors to a fresh start with the right of creditors to be paid.”

Bouncing Checks.

Late Payments.

Creditor Phone Calls.

Loan Defaults.

Finally, when some people or companies “want a fresh start” – they file bankruptcy.

Last year the total number of personal bankruptcy filings was just over 1.4 Million.

Are you driving past the properties listed in a bankruptcy because you don’t even know they exist?

Probably.  I have seen filings that have included huge office building right here in Rockville, and very likely – homes in your neighborhood.  But since there isn’t a sign in the yard, or it wasn’t in the MLS many people don’t know about them.

There were over 25 THOUSAND filings here in MD last year.  How many did you know about?  How many of your foreclosure leads turned into bankruptcy filings?

Would you like to know more about how to work within the courts and sometimes pick up properties at a discount – because you are the only person making an offer?

Because of the robo-signing mess, bankruptcy filings took a small dip last year.  Be careful – because I think the road ahead is bumpy.   One person I talked with described it best when he said “This is uncharted territory.”

Keep an eye out for some email and video we will post over the next week, and then join us on Monday, April 16th for our next Washington REIA meeting.

At our April WREIA meeting, there will be no guest speakers.  Nothing to buy.  No class to enroll in.  It’s going to be me talking about how I make small and large profits from browsing through bankruptcy filings. When I see something I like, I make an offer. You can too.

I am willing to predict this is going to be a big part of my business in late 2012 right on through 2013.  Join us on April 16th and find out why.

Take some time to recharge and relax. It’s a great time of year to spend some time back outside and enjoy the outdoors.  Just don’t forget the allergy medications….. the tree outside the office has so much pollen, every breeze creates a huge dust cloud!

Have a great weekend!

And as always, let me know how I can help with your real estate investing here in the DC area.

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

Find video updates on the Profitable Property Channel at
http://www.youtube.com/ProfitableProperty

Most of you know that I am a big fan of the Self Directed IRA.  So is one of our presidential candidates, Mitt Romney.   Gov. Romney has accumulated between $20 and $100 million dollars in his IRA.

Now most of us are not going to be the CEO of a hedge fund, but all of us can play by the same rules that Gov. Romney plays by, and have our Self Directed IRA grow tax deferred.

But -

I bet if he had to do it all over again today, he would choose a Roth Self Directed IRA.

Stay with me here – that one word, makes a HUGE difference.

When Gov. Romney cashes out of his IRA – he will have to pay taxes on those disbursements.  Specifically, he will be paying regular ordinary income taxes.  Today, that rate can be 30% or higher.

If you had the chance to create a retirement account today – you could eventually cash out and not pay taxes on those disbursements.  But only, if you chose a Roth IRA.

When I have this conversation with most people, they just don’t quite understand.

To live in this country, we have to pay taxes.  Some people would say the taxes are too high, some would say they are too low.  Whatever your opinion, let’s agree that we all benefit from a host of programs run by our local, state, or federal governments.

The government will get paid – that is certain.  But, when it comes to your IRA, you have a choice.  You can choose to tuck your savings in an IRA, and DEFER your taxes until you start getting paid (disbursements) from your account in your retirement years.  At that point you will pay income tax, at ordinary income tax rates.

Or…..

We have another option using a Roth IRA.  We can pay income taxes TODAY, and when we cash out in our retirement years, it doesn’t matter what the income tax rate will be.  We can grab those disbursements – or get paid – TAX FREE.

Tax free feels good.  My Roth account and I are going to cash out some day, and I don’t care how high the feds take those income tax rates – my account is going to continue to GROW tax free, and also PAY ME tax free.

Mr. Romney will be paying ordinary income taxes when he decides to start taking his disbursements – and I thank him for his kind service to our country.

Now – at this point in our conversation, most people start to see the difference a Roth IRA can make in your retirement planning.  The best estate planner out there cannot tell you what your tax rate will be when you retire.  The best they can do is “guess-timate”.

When I retire, I know the tax rate on my Roth Self Directed IRA disbursements.  ZERO.

Jack Kiley, the guest speaker at our January WREIA meeting, met with me and talked about the Self Directed Roth IRA at his office a few weeks ago.

You can find some of the conversation at http://www.youtube.com/watch?v=o_l-BXxItiw

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If you are interested in attending the Self Directed IRA networking event, you can save $50.  Use the promo code WASH at   http://www.midatlanticira.com/

***

The reason I wish I could have attended this event early in my career? Because this is a networking event too.  If you have retirement funds to invest, you will have a chance to meet contractors and other investors who are looking for projects to fund.  If you have projects, you will have a chance to meet other investors who are looking to make investments using their Self Directed IRA.

When I was getting started, I could find a project, but I needed capital.  Some of you have capital, and just needs to find the projects.  Some of you need to get a little more education about the Self Directed IRA before you decide to get started.

Whatever your situation, if you want to network with other successful investors who are working hard here in the DC area – join us on Saturday.

Let me know how I can help you,

The second habit of highly effective people is to “Begin with the end in mind.”  In other words, you should know where you are going to finish.

When you buy a property, and plan to renovate it, are you disciplined in your approach?  Or do you spend a few minutes looking for the lowest price home in a community, make an offer and hope for the best?

Today, there are stories everywhere about people who have had it rough over the last few years.   Bud Matthews in North Carolina has been asking Suntrust bank to stop the foreclosure on his business headquarters building for months.  He has not missed a payment in over 10 years, but Suntrust Bank has called his loan.

Bud Matthews decided to fight back and has now hired an attorney to help keep his business going.  If you attended WREIA last month, you heard some other similar stories here in the DC area.  To read the rest of Bud Matthews story visit http://www.newsobserver.com/2012/03/11/1919843/entrepreneurs-scramble-as-banks.html

We want you to understand where you are going with your real estate business.  Most of us who attend WREIA each month either have, or have the desire to buy, renovate and sell a home.

When you finish the hard work of renovating the property, who will buy the home?  How will they finance the property?  How much is their down payment?  How much will YOU make as a profit for you hard work?

If you know the answer to these questions – FROM THE BEGINNING – you will have a much higher level of success in this business.

For instance – let’t talk about the note business for a moment.  Specifically, the commercial non-performing note business.  Following is a brief piece from MarketWatch:

“According to the latest Ernst & Young US nonperforming loan (NPL) survey, At the crossroads: Ernst & Young 2012 real estate nonperforming loan investor survey, investors could also see more opportunities to acquire commercial real estate debt instruments in the year ahead. Despite improvements in bank earnings and declining loan loss reserves, the sheer volume of US commercial real estate loans maturing in the next five years — estimated to be close to US$ 1 trillion — could put pressure on US banks to step up their efforts to strategically sell some of the more than US$100 billion in NPLs, currently on their books.”  You can find the article in it’s entirety at http://www.marketwatch.com/story/ernst-young-investors-eye-four-more-years-of-distressed-real-estate-debt-opportunities-2012-03-12

The numbers boggle my mind.  $1 TRILLION in commercial real estate loans will be maturing in the next 5 years.  And already, there are $100 Billion  in non-performing loans.

Could you work with a small bank and purchase (at a discount) a few small commercial loans?  Could you re-structure those loans and keep another small business afloat, like Bud Matthews we talked about above?

This month at Washington REIA we are going to have a few people who work on the front lines of the residential home financing business. They originate loans for retail homeowners and for investors.  Join us for one night and learn where the business is, and who you should be targeting in the retail market. The loan market is still a challenge, but when you have the right mix of properties, home-buyers and price, business is getting done.

Begin with the end in mind.   Know who will purchase your renovated home. Know how they will finance it.  Most importantly, know how much their down payment will be.  Very few deals are going to a closing table without the right mix of these “ingredients”.

In The Seven Habits of Highly Effective People “Begin with the end in mind” is habit #2.

Habit #1 is “Be Proactive”.  Register now at http://mar2012-wreia-dcpi.eventbrite.com and join us on Monday at WREIA. Learn where the financing business is headed, and learn first hand where retail homes are being sold.

And as always, let me know how I can help with your real estate investing here in the DC area.

See you on March 19th,

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

Remember we will be at a new location in 2012 – The Womans Club of Bethesda.  All the location and registration details are below.

Find video updates on the Profitable Property Channel at
http://www.youtube.com/ProfitableProperty

http://www.facebook.com/profitableproperty

Register early for the March 19th WREIA meeting online, and skip the registration line!

You will also find the registration link at http://mar2012-wreia-dcpi.eventbrite.com

I like to keep an eye on the real estate market in California.  The trends in California tend to forecast the larger trends across the country.  Right now, across the state, HALF of all real estate transactions are distressed sales.

You can find more on the California market at http://www.marketwatch.com/story/california-pending-home-sales-higher-in-january-short-sales-rise-to-highest-level-in-three-years-car-reports-2012-02-23

Banks havent exactly been easy to deal with  – which is why the largest banks agreed to a $25 Billion penalty, or settlement, last week.

A few days ago, USA Today had an article recapping the incentive programs banks are starting to offer homeowners to cooperate in a short sale.  You can find the article at  http://www.usatoday.com/money/economy/housing/story/2012-02-19/lenders-allow-more-short-sales/53157246/1

Right now, there is a public frustration across the country with the big banks. No one likes to see this type of mistreatment of “customers”  who are on the edge of foreclosure and are looking for any options that may be available.

But how do you work with people who are frustrated, or scared, and don’t know what to do with their property?

I talk about working with these homeowners in the video we just released at  http://youtu.be/82U6lKDU8VY

Some people really are “mad as hornets”, while others are intimidated and giving up out of frustration and sometimes despair.

As we said in our last email – there are estimates that over 4 Million people are still at some risk of immediate foreclosure, and closer to 11 million more are underwater on their mortgages.

If you INCREASE YOUR KNOWLEDGE of the options that are available to this very large market, and give them some guidance, you will INCREASE YOUR BUSINESS this year.

Join us on Monday at Washington REIA as we invite attorneys from a local law firm to visit with us and discuss some of the foreclosure defense strategies they are using to assist homeowners in their struggle.

You will hear about actual cases that homeowners have won locally, and other cases that are working through the appeals process.

Monday night learn how you can increase your business by helping homeowners who are upset, but don’t know how to proceed.

If you need to increase your business this year, go where the market is.  Our  market is frustrated, angry and maybe scared. Even here in the DC area homeowners are holding properties that are underwater – and they simply need someone to give them options.

Let’s give homeowners who may be facing foreclosure what they need most – guidance  – and work with them to suggest legal alternatives to foreclosure that are in their best interest.  And as always, let me know if I can help with your real estate investing here in the DC area.

See you on Monday!

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

Remember – we will be at our new location – The Womans Club of Bethesda.  Location and registration details are below.  Register online and save time!

Find more video updates on the Profitable Property Channel at
http://www.youtube.com/ProfitableProperty

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Register early for the Feb. 27th WREIA meeting online, and skip the registration line!

You will find the registration link at http://feb2012-wreia-cc.eventbrite.com