Are You Ready? The Property Cycle In Action!
Awesome! Exciting and really fantastic…or is it?
I guess this will all depend on how you’re structured for the upcoming blood bath. We have seen this kind of banking crises before…the late eighties with the saving and loans bailout in the USA and the early nineties in the UK. The property systems, method and techniques employed by the traditionalists will now unravel as they were not designed to survive in this new playing field. American home loans are normally non recourse which means when values drop they can simply hand them back to the bank and the bank takes the hit, but not so in the commonwealth countries.
Fact! One in 6 Americans now owe more debt on their homes than the underlying value of the property
Fact! Many borrowed the initial purchase deposit from their 401k fund (personal super) and did so knowing they had to pay the money back to the fund at above market interest rates so now have no asset , no super but a lifetime debt that needs to be paid out.
Fact! The only cash in the bank the average American has… is next weeks pay cheque.
Fact! We aren’t a lot smarter…our banks have encouraged loan defaulters (which is triple the normal numbers)to access their super by simply signing a hardship letter. The banks receive their monthly payments for a few more months until the super is bled dry, the bank then takes the property in the end and attempts to now of load these in a depressed market.
FYI …Most banks have now instructed agents they can no longer advertise properties as mortgagee sales as this is depressing prices so you need to look at the contract the agent has and see who the seller is.
Whilst I’m on a roll…be aware the banks do margin calls on property I recently had a major bank pay a visit and inform me they no longer feel comfortable about the property market and anybody who owns over a few properties they are having them reduce the debt down to a new level based on what they believe properties are now worth or will be worth…BANKS CAN DO THIS AND DO THIS!
The entrepreneurs will stay in the market will adopt and survive but it won’t be by accepting advice from the traditionalists on how they should grow their portfolio.
Tomorrows property millionaires will be created in this market!
P.S The last scene of Mel Gibsons Lethal Weapon 2 was filmed in a half built housing estate left over from the last US bank bust!
Did you know you can buy property without a bank? See PROOF RickOtton.com
Processing your request, Please wait....
