I’ll tell you exactly what this bailout means for us as investors.

Think of the bank’s books in terms of a balance sheet. They have assets on the left (notes or mortgages they hold) and liabilities on the right (deposits that they’ve borrowed from you and me). So, if a note goes in to default or gets written down in value, and the liabilities stay the same, the bank has just lost value in their balance sheet. stink - huh? Well, then the government in their wisdom steps in and says, “we’ll protect those mortgages so you don’t have to write them down”. So great, but the banks still don’t have any money to lend. So the government again sticks their nose in to it and says “here’s so money”, but the banks are scared to lend. They’re happy to have the money, so they can pay the light bill, but they aren’t lending anymore than they were last month. This bailout is only going to delay the recovery of the housing market. It’s not going to do a thing for us the investor. it may help the retail buyer here and there, and it’ll help our tenants by easing up on the credit card crunch; however, it’s not going to do a thing to us investors. Banks are still reluctant to make loans. Then, what is making matters worse, is the short sale market has also dried right up. Has anyone who listens to this blog had a short sale approved since the 2nd week in October? The banks are not giving discounts b/c they just got their Christmas Bonus from Uncle Sam.

We need to take a wait and see attitude toward this economy. There are still fundamentals right now that will work in the Creative Real Estate world; however, if you’re unaware of the fundamentals that I pound the drum upon, then you’d better just go back to Piper Jaffray or Target Corp. or Accenture b/c you’ve not learned the lessons of 2007 yet. Debt is bad, get rid of it. Any loan that’s indexed should also go the way of the buffalo. If you do not heed my advice, you will go down. you will go down to china town. Get rid of those properties with indexed loans (or loan mod them to fixed rate loans) quickly.

more later.

p.s. I shwacked some phesants this weekend with my family and my dogs.  it was a great time.  See photos on my facebook page. 

p.s.s. if you’d like to sell your home quickly and easily for a fair price, please visit our website at http://LakesAreaHomeBuyers.com