I posted this article by Jack Miller on my blog today & thought some of you would be interested too.
What's the relevance of a creative financing seminar today? Why should anybody take a seminar to learn how to buy and sell property without using cash or credit?
Admittedly, today when credit is still cheap and available, there may be little need for such knowledge, but tomorrow, when you'llneed the information contained in this seminar, it will be too late. The seminar will be over and gone. So consider this seminar to be a form of financial survival insurance for you, whether you're a broker, a buyer, a seller, a long-term investor, or a private mortgage lender.
Let's put things into perspective: For the past decade or so, with interest rates at all time lows and mortgage money in plentiful supply, there has been no real need for "creative financing". In the current era, when "short sales" are all the rage and houses can be bought for mere fractions of their all time highs once mortgagors and sellers are willing to agree to huge discounts from original appraised values, there seems to be no place for seller financing. But this is illusionary:
Consider that in any kind of financial climate, neither buyer, lender,nor seller would be able to transact business without providers of cash, barter, or credit. Typically, when conventional institutional lenders have pulled back from the mortgage market, private lenders have rushed in to fill the void, but not today.
When politicians on every side can't wait to declare moratoriums on mortgage foreclosures, and borrowers are being squeezed by high taxes, energy, and insurance costs, private lenders are beginning to be reluctant to advance money to speculators and opportunists who would like to share in the huge discounts that the housing market is providing today.
Except for loans guaranteed directly or indirectly by the government, the credit markets are in complete disarray.
Every drop in interest rates engineered by the Federal Reserve is met by a corresponding drop in the value of the U.S. dollar on world markets; and a resulting increase in prices for most of what Americans buy. It is estimated that 50% of the increased price of gasoline is attributable to the decline of the world value of the U.S. Dollar.
When the Euro was first introduced, it traded at about 87 cents to the dollar; thus, the U.S. dollar would buy about115 Euros. I recently paid $1.68 per Euro. That's a 193% change in the exchange rate over that period. Saying it differently, in the European Common Market,which represents about 20 modern countries, the dollar will buy only 52 cents worth of food, lodging, transportation, etc. compared to what it would have bought just a few years ago.
The drop in the value of the dollar is reflected in the cost of almost all foreign-made products. Today, the most notable effect of this is the rising cost of gasoline. Tomorrow, as we continue to paper over massive debt problems with more debt, the impact of this could result in a dramatic rise in the cost of credit, or a collapse of the credit system.
Rising debt of the U.S. Government -mainly owed to China - that is being used to fight wars on two fronts while trying to deal with sub-prime loans is creating a looming credit crisis. The Bear Sterns bailout was the first of what could be continuing bailouts of the major players in the credit markets.
The inevitable result of this is that interest rates on money we borrow is going to have to rise enough to over come the loss of purchasing power of the dollars used to repay it. Despite this, for political reasons in this election year, America continues to run up massive debt that can only be repaid with taxes or inflation; both of which don't bode well for borrowers or lenders.
Learn everything you can about creative financing. Don't rely on institutional or private financing for your business.
What's the relevance of a creative financing seminar today? Why should anybody take a seminar to learn how to buy and sell property without using cash or credit?
Admittedly, today when credit is still cheap and available, there may be little need for such knowledge, but tomorrow, when you'llneed the information contained in this seminar, it will be too late. The seminar will be over and gone. So consider this seminar to be a form of financial survival insurance for you, whether you're a broker, a buyer, a seller, a long-term investor, or a private mortgage lender.
Let's put things into perspective: For the past decade or so, with interest rates at all time lows and mortgage money in plentiful supply, there has been no real need for "creative financing". In the current era, when "short sales" are all the rage and houses can be bought for mere fractions of their all time highs once mortgagors and sellers are willing to agree to huge discounts from original appraised values, there seems to be no place for seller financing. But this is illusionary:
Consider that in any kind of financial climate, neither buyer, lender,nor seller would be able to transact business without providers of cash, barter, or credit. Typically, when conventional institutional lenders have pulled back from the mortgage market, private lenders have rushed in to fill the void, but not today.
When politicians on every side can't wait to declare moratoriums on mortgage foreclosures, and borrowers are being squeezed by high taxes, energy, and insurance costs, private lenders are beginning to be reluctant to advance money to speculators and opportunists who would like to share in the huge discounts that the housing market is providing today.
Except for loans guaranteed directly or indirectly by the government, the credit markets are in complete disarray.
Every drop in interest rates engineered by the Federal Reserve is met by a corresponding drop in the value of the U.S. dollar on world markets; and a resulting increase in prices for most of what Americans buy. It is estimated that 50% of the increased price of gasoline is attributable to the decline of the world value of the U.S. Dollar.
When the Euro was first introduced, it traded at about 87 cents to the dollar; thus, the U.S. dollar would buy about115 Euros. I recently paid $1.68 per Euro. That's a 193% change in the exchange rate over that period. Saying it differently, in the European Common Market,which represents about 20 modern countries, the dollar will buy only 52 cents worth of food, lodging, transportation, etc. compared to what it would have bought just a few years ago.
The drop in the value of the dollar is reflected in the cost of almost all foreign-made products. Today, the most notable effect of this is the rising cost of gasoline. Tomorrow, as we continue to paper over massive debt problems with more debt, the impact of this could result in a dramatic rise in the cost of credit, or a collapse of the credit system.
Rising debt of the U.S. Government -mainly owed to China - that is being used to fight wars on two fronts while trying to deal with sub-prime loans is creating a looming credit crisis. The Bear Sterns bailout was the first of what could be continuing bailouts of the major players in the credit markets.
The inevitable result of this is that interest rates on money we borrow is going to have to rise enough to over come the loss of purchasing power of the dollars used to repay it. Despite this, for political reasons in this election year, America continues to run up massive debt that can only be repaid with taxes or inflation; both of which don't bode well for borrowers or lenders.
Learn everything you can about creative financing. Don't rely on institutional or private financing for your business.
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