Is Carleton Sheets responsible for the housing bust?  The New York Times thinks so. On April 19, 2009 the New York Times wrote a piece on Carleton and for the life of me I’m trying to figure out the purpose of the article.
1.    He doesn’t run his infomercials
2.    His marketing in only out on the web
3.    He seems to have faded into the sunset

So what was the point?  If you read the article, it sounds like the housing blame lands square on him.  As I read the piece I could here the under tones of the towns people yelling “stone him” as they through tomatoes form afar.

Carleton didn’t tell the state of California to refinance their homes 125% of their value and then take that money and invest it in Pre-Construction condos in Las Vegas and New Construction Homes in NV, AZ and Utah.  Greed told California to go do that!  Not Sheets.

Carleton didn’t tell investors to buy houses with negative cash flow and “hope” for appreciation.  Greed did that!

David Hancock was quoted in the article “The truth is, some people take the information and use it and some people are simply lazy,” says Mr. Hancock, who has also appeared in Mr. Sheets’s infomercials. “It’s just like any diet or exercise book out there. They probably work, but how many people are willing to stick to them?”

I can give you the best techniques, the fastest solutions, brilliant advice but unless you go out and apply the information its worthless.  Were is the Accountability for ones own actions?  The New American Way Is To Blame Someone Else.

Please Tell Me Why Do We Quote John T Reed?
The genius in all of this is John T Reed.  He could be the smartest Real Estate Marketer ever.  He is smarter than every real estate guru, why?  He has learned how to use “Guru Reviews” (some of which are valid) to his advantage.  By writing about every “real estate guru” he has every keyword necessary to rank very high in all the search engines.  Its brilliant!  Did he tell the NY Times he has his own investing courses available for purchase on his website? Think about the traffic he got from a New York Times Article. Tons of website traffic = sales!!!!!

Is his stuff good?  I have no clue.  I haven’t seen any of his stuff so I can’t offer a review.

Why Do I Care?
I was his number one coach and he’s my friend.  I was with him for 10 years.  I have taught thousands of students how to invest in real estate.  I left Carleton in 2005 because I didn’t like how cost cutting depleted the talent pool and I wanted to control the quality of my own training.  In the 10 years I was with him, we changed the lives of those who went out and actually did the work.  Leave the man alone.   What do you think, did Carleton Sheets cause the housing collapse?  Leave me a comment or subscribe to this feed.

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20 years ago when I started my Real Estate Investing career, I did it because I wanted the “perceived” end result.  What I saw was Freedom, Money, Recognition and I’ll admit it, I saw a lot of pretty girls at the end of the rainbow.

Every entrepreneur has asked or will asked this question.  How do I get from where I’m at – to where I want?  The answer is simple.  It’s so simple, I’m going to ask you a question back.

Who are you spending your time with?

Look at the people in your life.  Look at the people in your life and ask yourself honestly what they do for me “emotionally”?  Are they on your emotional team or do they suck the life out of you?

I have a group of friends who are very successful, honest, decent, giving and there fun to be with and being with them makes me want to be a better person.  I’ll never tell them that because I’ll never live it down but it’s true.  Your life right now is the direct result of the people you spend your time with.

At the end of the day, look at everyone in your life and ask yourself, “Do They Help Me? Or Do The Hurt Me?  Today might be the best day to make some decisions.   What if your spouse it not on your emotional team, then what?

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Kind of……..
I read somewhere that housing affordability is the best it’s been in over 30 years.  People who couldn’t buy a home in California, South Florida, New York and other expensive city now can.  But, no one is buying.   Why?

Fear, media, global economical collapse, animals escaping zoo’s, venomous ducks, etc.

Now is the best time to upgrade into a large, newer, better home?  I’m telling you if you don’t do it now you might be kicking yourself in a few years.

Go out and find the home that you want – watch your numbers, don’t get crazy.  When this is all done I want your new home to be affordable.

Then sell your house using “owner financing” or lease option it.  The size of your buyers down payment will determine if you sell or lease option.  The larger the down payment, the more likely you will sell.  If your buyer has a smaller down payment then my advice would be to do a lease option.

There are a lot of different ways to work this deal – this is a sample possibility.

Your New Buyer
Look for someone who has bad credit, preferably bankrupt, why?  They have no debt and they can’t go bankrupt for many years in the future.

The Numbers – Sell The Old House For $200,00
Lets say that you owe $150,000 at 6% and your monthly payment is 899.00 principle and interest.  You sell your old home for $200,000.  You agree to a 10% down payment ($20,000) and you’ll finance the remaining $180,000 for your buyer at 8%.  This is called a wrap around mortgage or an all inclusive trust deed (AITD).

The Math
Your buyer owes you $180,000 at 8% interest with monthly payments of $1,320.80 principle and interest.  Each month your buyer pays you $1,320.80.  Because you left the old loan in place you would take $899.00 of the $1,320.80 and pay your old mortgage company.  That leaves you with $421.80 positive cash flow each month.   You are earning 8% on your $30,000 of equity (the other $20,000 you received in cash as the down payment) and you are earning 2% on the banks $150,000.  You are now doing a role reversal with the bank.  Instead of the bank taking your money and paying you 2% on a CD and loaning it out to me at 7% to buy a truck, you’re the one who is earning interest off of the bank’s money.

Protect Yourself
Make sure you qualify your buyer.  Look at their income, job and credit.  In California it take 111 days to foreclosure (each state is different so find out the time frame in your state) so I would council you to take $3,596.00 (4 months of payments) from the $20,000 you got at closing and set that aside so you can make the payments on the $150,000 loan if you had to foreclose on your buyer for nonpayment.

When it’s all said and done you get cash ($20,000) plus cash flow ($421.80).

If you wanted to add your cash flow of $421.80 to your new loan payment, you could have the new house paid down pretty quickly.

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For the record I love the Donald!  I think he’s wacky, funny, and smart, has great hair and builds fantastic buildings.  But last night on Larry King he left anyone who invests in real estate scratching his or her heads including yours truly.

The interview with Larry King was all over the place.  It ranged from politics, to taxes, the economy and real estate.

Speaking about real estate -  (Thanks to our friends at CNN)

King: You said that this is a good time to buy real estate. What about financing? What if you want to buy and you can’t get the mortgage?

Trump: Larry, this is a great time to buy real estate.

And as far as financing is concerned, the only financing you should be thinking about is seller financing. If the seller won’t give you financing, don’t do it, because the banks are not doing their job. They’re not providing financing for deals.

Donny please, the best deals right now are coming from Foreclosed Homes owned by banks. Go ahead and name one bank that provides “seller financing,” they don’t. So if your advice is to stay away from these deals where should we invest and what strategy should we use?  Most traditional sellers are upside down and these types of deals don’t make sense.

If this is the strategy taught in your seminars and coaching programs no one is going to make any money.  Right now you can get smoking deals from banks, you can still get bank financing, use hard money, convert your old 401K to a self directed IRA’s to make these deals happen.  If you buy the property the way I teach you, you’ll be into the deal at a low investment to value, which will allow you to “Sell” the deal-using seller financing.  Now you can sell a portion of your receivable income to retire your old debt.  This strategy that I teach allows you to create cash and cash flow as a lender without the headaches of being a landlord.

Mr. Trump if you would like me to teach you and your staff at Trump University this strategy please feel free to contract me through the comments below.  Someone from my office will contact you.

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An estimated 600,000 foreclosed homes owned by banks and mortgage lenders nationwide haven’t been resold or listed, according to a report from the San Francisco Chronicle.

This so-called “shadow inventory” could drive home prices much lower if unloaded on the market, and clearly distorts the inventory picture that appeared to be improving.

In California alone, estimates of shadow inventory range from 80,000 to 100,000 properties.

I think these numbers need to be published on a state by state basis.  Why, in the spirit of “Full Disclosure” its the right thing to do.  Don’t you agree?

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