Christopher McClatchey

Get this! I attended a meeting today in Brevard County Florida. The County Government set forth their program to distribute the Federal Stimulus Money. The mandate from HUD is that the money must be spent in designated areas where there are a lot of Foreclosures. The County intends to buy 61 REOs. Here's the kicker. The County isn't buying them for themselves, they are buying them for investors.

Here's how it works. The Investors/Contractors submit an application. If they are approved and meet the criteria they will have a chance to bid on properties identified by the County. There are some HUD guidelines but nothing too stringent. The County will then provide all of the money to the Investor at closing to purchase the property AND will also reimburse the investor for all repairs Plus a 15% developers fee. The 15% Developer's fee is based on the total acquisition cost plus repairs. So if the house cost $70,000 and the repairs cost $30,000, the Investor can collect a $15,000 fee.

That's right, the investor gets ownership of the house, gets the repairs paid for and can charge a 15% fee for doing this. The only catch is that the investor has to rent the home to low income tenants for a designated period of time. If the rehab project costs less than $25,000.00 the period of time is 10 years. If the rehab costs between $25,000 - $35,000 the period of time is 20 years and if the cost of rehab is over $35,000.00 the period of time is 30 years. In the meantime he gets to collect and keep the rent on a free and clear house and also has all of the tax breaks for owning the home as well. After the expiration of that time, the investor is free to do what he wants with his free and clear property the government bought him.

Isn't America Grand!!!!

Chris McClatchey

THM Investments, LLC

Saw this in an email.
Thought I'd share.

Subj: LOUISIANA LAND TITLE

THIS IS HOW RIDICULOUS BUYING PROPERTY CAN BE. AND IN A RARE TURN OF EVENTS, YOU GOTTA LOVE THIS LAWYER!

Louisiana Land Title
Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years.

With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership.

Here's the story on one attorney on an issue with FHA (on behalf of a client):

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.

(Actual reply):

"Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin."

Annoyed, the lawyer responded as follows:

(Actual response):

"Your letter regarding title in Case No..189156 has been received. I note that you wish to have title extended further than the 194 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana wa s purchased by the United States from France, in 1803 the year of origin identified in our application.

For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus's expedition. Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana .. God, therefore, would be the owner of origin and His origins date back, to before the beginning of time, the world as we know it and the FHA. I hope you find God's original claim to be satisfactory.

Now, may we have our damn loan?"


The loan was approved.

Hello Everyone,

I Just wanted to remind everyone that the Attitudes of Wealth Focus Group is again meeting this Thursday, June 11th at 6:30 p.m. We are meeting at the Veterans Memorial Center behind Merritt Square Mall. This group focuses on the habits, systems, mindsets and attitudes of the ultra successful. As many of you know, one of the ideas for the group is to bring in speakers who are successful in other industries and apply different techniques to real estate investing.

This month we are privileged to have Mary Ann Hagerty as our Guest Speaker. Mary Ann was (and is) a stay at home mother of four daughters. She and her husband of 24 years have owned several businesses over the years, including a pest control business, a roofing company and a home inspection company. But it wasn't until they found the Network Marketing Industry that their success took off.

In 1999 they were introduced to Team National and in 2000 they matched a Six Figure Real Estate income part time their first year with Team National!! Today, their team and their income continues to grow and the exciting part is .... "We're just getting started!!" Mary Ann is going to talk about her success in Network Marketing and will share:

-An industry overview ~ Why Direct Sales and Network Marketing

-Why Team National ~ We're Different!! A system that WORKS!!

-Her Personal Growth and Journey ~ Living a life of significance!

She is a fabulous speaker and an even more fabulous person. Come and share her secrets and tecniques of success. Looking forward to seeing you Thursday!

Chris McClatchey

Housing Market Realty

Details of FHA's $8K downpayment advance released information was recently sent to me. I am passing it along to anyone who needs the information. Thanks

Chris McClatchey

Housing Market Realty

WASHINGTON - May 29, 2009 - The U.S. Department of Housing and Urban Development (HUD) released more details today about its program to help first-time homebuyers use a tax credit as part of a downpayment.

HUD announced the program on May 12 at the National Association of Realtors® Housing Summit. In the interim, HUD posted an announcement and then immediately took it down, leading to speculation that the program would be pulled. In response, HUD said the rules had simply not been finalized, and the original announcement had been posted in error.

"We've been eager for word from the federal government since the new FHA downpayment assistance plan was announced, and even more so after the program details were first published and then quickly pulled," says John Sebree, FAR vice president of public policy. "Luckily, that turns out to be a minor setback and there will be a federal downpayment program to complement the $30 million we were successful in securing in the Florida budget."

The most significant change involves the amount of downpayment required by qualified first-time homebuyers. FHA mortgages require a 3.5 percent downpayment, and the $8,000 tax credit cannot be used to override that requirement. Once the 3.5 percent downpayment requirement has been met, however, the tax credit can be applied20to additional costs, including a higher downpayment, paying points to lower the mortgage rate, and/or closing costs. Lenders will treat the tax credit money as a second lien on the home until it's paid back.

"Mortgage industry leaders have indicated that this type of product may not be immediately available to consumers," says Sebree. Since lenders will oversee the tax credit loan, they must create internal programs to handle the process.

Lenders have some flexibility on payback requirements for the upfront loan of the tax credit, though HUD also created rules to protect homebuyers from onerous terms.

I recently lost an investment deal over $500.00. Looking back on the negotiations, I realized I have become accustomed to the low prices this market has afforded. A few months back I wrote a blog about a home our company had listed for $89,000.00 and we made a short sale offer of $58,000.00. The bank turned it down and through the REO process we were able to buy the home for $17,000.00. We recently finished the rehab for $13,000.00 and now have a completely redone home for $30,000.00 that will rent for $850 - $900.

The property I recently lost was the home right next door. It was the same investor who lost the property, the same lender, and the same REO agent. We put our offer of $17,000.00 in for the 2nd property. It worked once right? The REO agent came back and said there was another offer and we were in a highest and best. Again, same situation as before. This time however, we did up our offer to $17,500.00, but not a penny more. Well the other offer came in at $18,000.00 and we were out.

My current reflection on this situation is this: Really what is the difference b/t a $17,500.00 and a full price offer of $19,500.00. $2000.00 right! Yes, but this is a long term hold. Divide that over the 10-15 years we are going to hold it and it is minimal. Don't get me wrong, I don't like to pay more than a seller is willing to take, but it I am getting $850 in rent and my mortgage payment goes up $7 a month because of the extra $2k in our offer, does it really matter? I think not.

I know, I'm bringing everyone into my misery, but I truly believe that just as alot of people in real estate lost perspective in the boom, some of us are starting to lose perspective in this downturn. I for one am trying not to let that happen. ....again.

Chris McClatchey

Housing Market Realty