The Collected Works of Author and Blogger Larry Roberts

Archive for January, 2015

As foreign investors need cash to solve domestic problems, they often dump real estate investments in prime US housing markets. Most people in California assume buyers from mainland China will provide an endless source of demand for high-end Coastal California real estate. Everyone knows China's real estate bubble is bursting, but most assume the contagion will be "contained" in China and won't spill over to the US. I think the faithful are wrong; when the Chinese real estate bubble bursts, Chinese owners will sell California real estate to solve their financial problems at home. When wealthy oligarchs and the nearly-wealthy who support them in exchange for government largess find themselves faced with tough times, rather than exporting their wealth to…[READ MORE]

Lenders avoid foreclosure to avoid recognizing losses on their bad loans. The new super priority liens threaten lender's ability to kick the can. Super Liens are liens that have priority over all other liens in the property record, and they can't be subordinated. Courts historically shun super liens because they have potential to disrupt real estate lending because lenders want assurance they're in first-lien position, meaning they are first in line to collect at foreclosure. When lenders know they must deal with super liens, such as property taxes, the often require impounds to ensure the payment subject to lien action is paid. In most states, property taxes and construction liens are the only two liens allowed by law to survive…[READ MORE]

Subsidies for affordable housing elevates many low wage earners into home ownership at the detriment of someone who makes more money. People who support affordable housing subsidies are well meaning: they want more people to have opportunity to become homeowners. However, by subsidizing affordable housing, they don't increase home ownership opportunities, they merely displace one group of potential owners in favor of another. The buyer on the bubble When I was younger, I used to watch the time trials at the Indianapolis 500. The drama of these time trials revolves around the driver in the 33rd spot in the field: the driver on the bubble. As each driver tries to earn a spot in the field, the driver on the…[READ MORE]

The 15-year amortizing mortgage holds the promise of increased equity and sustainable ownership for low-income borrowers, assuming they can finance enough to buy a house. Many in the lending industry think their work is like science that continually advances: It's not. It is far more akin to assembly line work where the same widgets are pumped out year after year. Generally, when lenders start to innovate, trouble is brewing because most innovations in lending either cause major losses at banks, or in their worst forms these innovations destabilize our financial system. The last significant advancement in lending was the widespread use of 30-year amortizing loans that came into favor after World War II. Prior to that time, home loans were…[READ MORE]

$3,000 minimum investment, $150,000 maximum investment, 25% anticipated cash returns, three to five year holding period, potential risk of 100% loss. Back before the housing market bottomed, I convinced a number of investors to put up about $2.5 million to buy distressed properties in Las Vegas. Since then many investors asked me about other investment opportunities, but until now I found nothing I thought was compelling, special, or unique. About a month ago I became aware of an unusual business opportunity in an emerging industry (you probably haven't heard of this before). My interest grew into serious research and the creation of the business investment opportunity I share with you today. Given my experience in real estate and on this…[READ MORE]

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