Joseph Luca

There is so much news coverage of famous people's lives - much of it none of our business, and none of it of any interest to me personally, that it is refreshing to read that someone who has made a substantial amount of money (hundreds of millions of dollars), doing something positive to help others.

Mr. Pitt visited New Orleans shortly after Hurricane Katrina and was so shocked by what he saw he resolved to do whatever he could to help them rebuild. Mr. Pitt founded the Make It Right (MIR) organization (http://www.makeitrightnola.org/) to aid victims of Hurricane Katrina, specifically in the Lower 9th Ward of New Orleans, LA. The project offers residents the opportunity to rebuild affordable duplexes while striving to to recreate and nurture the unique culture and spirit of the Lower 9th Ward which symbolizes the soul of New Orleans; Mr. Pitt understood the importance of the Lower 9th Ward to the city of New Orleans. Mr. Pitt chose to work with Global Green to sponsor an archtecture competition to generate ideas about rebuilding sustainably. Mr. Pitt has put his money, time and energy on the line to help rebuild the Lower 9th Ward in a manner that restores its spirit, energy and culture.

Mr. Pitt is not "A Developer"; he is a "regular" (wealthy, heart-throb) guy that brought the resources (including his own money) together to make a positive impact on a community, a city and a state. However, that is not all he has done; he has set an example that we as a people, a nation, and a culture can develop and redevelop houses, buildings and cities in a maner that is not devoid of local culture, style and flair. We do not have to develop these homogenized "Lifestyle Centers", residential developments, and shopping malls, that have the same "feel" no matter where they are located.

It is a shame that there are not more "regular" people in Hollywood willing to dedicate some money, time and effort to make such a positive impact.

This past week I took one of the Continuing Education courses necessary to maintain one's Real Estate License in RI. The subject of one of the courses was Mortgage Finance for First Time Home Buyers. Being the type of guy who enjoys keeping up on current events, and most things political, I am well aware of the $8,000 Tax Credit for first time home buyers put forth as part of the President's stimulus package. I've had my reservations about this from a fiscal perspective, but I think it will stimulate things in the short run because it will get more people to buy a house. These buyers then have to hire movers, buy furniture, curtains etc, which all serve to stimulate the economy. That being said, I was presented with a hypothesis from a mortgage broker that I had not even considered prior to taking this class. This broker has observed that a significant portion of the home buyers who have been utilizing the $8,000 Tax Credit in order to qualify for a mortgage, have a financial profile similar to the sub prime home buyers of recent history who, collectively, some professionals feel had a contributory role in the current financial collapse.

My question is: Do you agree? In your professional experience, since the Tax Credit was implemented, have you observed some similarities between the "typical" sub prime home buyer and the "Tax Credit" home buyer who would not otherwise qualify for a mortgage if it were not for the Tax Credit of $8,000? I have not personally had much experience with first time home buyers this year so I do not feel justified in making a call. This is an intriguing hypothesis and I am curious to hear all of your input.

Until next time be well and be wealthy!

Here are some interesting facts.

The U.S. census bureau estimates:

•1. There are approximately 79 million Baby Boomers in the United States today.

•2. Boomers today represent 28% of the U.S. population.

•3. There are now more than 33 million Americans 65 or older, representing nearly 13 percent of the population.

•4. About 7,918 people are turning 60 everyday. That amounts to 330 every hour.

•5. The number of baby boomers living in 2030 is projected to be about 57.8 million; 54.9 percent would be female.

Bearing this in mind, have you thought about, or have you already commenced, marketing your business or services to this growing market segment? While today's economy is adjusting and many business models are failing or contracting, some businesses focusing on the "Boomers" are growing at a 40% clip annually; and this is expected to continue for another 30 years!

Whether it is senior housing, assisted living, reverse mortgages, medical alert devices, or skilled nursing services, all of these are capitalizing on the aging Boomers.

In recent years I have seen more and more developments, residential and commercial, designed and constructed to cater to the future needs of this aging population. It may be access and egress, personal saftey issues, proximity to medical services or other recreational amenities but more and more developments are targeting Boomers.

In the retail industry we can look at the increase in sales of two big ticket items, Harley Davidson Motorcycles and Motorhomes/RV's, as two segments of that have experienced increases in sales from at least partly attributed to Boomers. Smaller ticket items are medical alert devices, pill dispensers and hearing aides. Combined, these are billions dollars of sales, wouldn't it be nice to have a part of it? Share your thoughts on marketing to this demographic.

Be well and be wealthy.

In these times of political, economic and financial "change", real estate investors, brokers and even home buyers need to adapt to new lending guidelines and property values in order to maximize ROI, cash flow and/or "home for the dollar". One option is to purchase property "subject to" the existing mortgage; assuming the payments and perhaps additional consideration for the Seller or even Buyer. Buying a property in this manner presents an opportunity for the Buyer to get into a property with little or no money down and for the Seller to get out from under a property that is consuming him/her. However, there is also potential liability for the Buyer and the Seller. The Seller still is ultimately responsible for the loan. The Buyer may not have adequate cash reserves to weather vacancy, tax obligations or property maintenance issues. This all assumes that the loan is not "called" by the Lender; many loans have a "Due On Sale" clause.

That being said, in this economic climate many professionals have observed that as long as the payments are being made a bank is not about to foreclose on a property unless it is necessary. It is usually easier when the change in ownership invloves a corporate entity (LLC for example) and not the actual property, which is the case if it is owned personally. Conservative judgement dictates that transactions of this type require the assistance of legal counsel for both buyer and seller. I encourage you to send me your thoughts, experiences, commentary and questions.

Be well and wealthy!

It sees that every week the headlines are dedicated to the dire financial condition of our national, state and municipal economies, the President has told us it is going to get worse, and the stock markets around the world swing from 200 point drops to 200 point gains almost daily; what's a real estate broker/investor/entrepreneur to do to secure a paycheck and not have to go broke? Many of us are looking for alternative methods of getting deals closed. This may mean private lending (hard money,) private investors (individuals who want more than a 2-3% return on their cash,) joint venture arrangements, buying "subject to an existing mortgage" or other creative mechanisms. We have found that banks are taking a lot longer to commit to a deal are requiring substantially larger down payments (up to 40% on the commercial side) when providing financing. When it comes to properties that they own or may soon own (short sale situations) the staff is either so overwhelmed with work that they cannot get back to you in a timely manner or, they make mistakes which take a substantial amount of time to rectify prior to Closing. What this means for the brokers is it takes longer to get paid or deals may die; buyers may lose financing as the economy deteriorates and lenders change criteria, sellers can lose the property to foreclosure, the property may be vandalized or damaged by mother nature.

All of this dicates that the small business person/investor has to be creative to maintain cash flow and their standard of living. What are you doing to stimulate your economic situation?