Monday, March 25, 2013

Celeb Marriage left Wife $4M in Debt

(This Story is Re-printed from MSN Money 3-25-13)

(This will happen to most people who earn large amounts of money in a short time. And, unfortunately, Celebrities who go from poor to rich (almost) overnight will spend that fast earned Income frivolously.  AND, they are just one of many groups of people who will do this and end up broke. I have been stating for a while now that a solid CRE income property could be a long term steady income.)

"After the bottom falls out of her lavish lifestyle, one woman learns to manage money responsibly -- for herself and her sons.

‘I will never forget the moment that my soon-to-be ex-husband and I sat in our mediator's office as he illustrated our finances on a chalkboard.’ - Author

"There really aren't any assets," he told us. But there was $4 million of debt -- from bad investments, lawsuits and failed business deals that I knew nothing about.
I left the room sobbing, feeling like I'd been punched in the stomach. How could I not have known that we owed so much? How -- over the 14 years that we'd been together, and through the birth of two sons -- had I been so unaware?

Financially blind -- over love

I met my ex-husband when I was just 25 years old. He walked into a New York City gallery where I was working, and I recognized him immediately: He was a famous comedian (I can't disclose his name for legal reasons) who was then at the peak of his career.

My life changed overnight: We went hot-air ballooning in Italy, on a safari in Africa and out every night in his limousine for extravagant dinners. You name it, we did it. And when he decided to move to Aspen a few years into our relationship, I gave up my job to join him.

But our romance had one caveat: I would never have a say in the finances. Since I believed we would be forever, it was never an issue. Plus, he didn't handle the money, either. His businesspeople did, while he spent whatever he pleased. He had monthly meetings with his business manager, who'd offer advice, but then my ex would just go down his own path. He refused to listen to anything about saving or budgeting, figuring that since he was earning the money, no one was going to tell him what to do with it.

We didn't marry for 12 years, but as soon as we did, things began to go south -- primarily because of finances.

My ex had extreme control issues around money that stemmed from a rough childhood. His parents were poor, and he helped to support them from a young age. Because of this, he always needed to "feel rich." For him, this meant eating out constantly and carrying around rolls of $100 bills. On a trip to Florence, he once took me into a high-end clothing store and said, "You have 15 minutes to get anything you want." I remember standing in the dressing room as a clerk threw clothing over the door for me to try on as fast as possible.

How we reached the breaking point

As my ex-husband got older, his career started to level off -- he was headlining fewer shows and bringing in less money. We'd scaled back the way we lived to some degree, but then the credit cards started being declined. I'd call our business manager and hear things like, "Hopefully there will be money next month."

After enough of these calls, I finally woke up to the fact that I was in my late 30s -- with two small children, no savings, no retirement plan and a husband whose career was clearly going downhill. I started to freak out and ask questions: How were we providing for our sons? Did we have retirement accounts? I broke the rule and insisted on being involved in our finances. Not only did he refuse to discuss it, but he also refused any kind of counseling.

When I left, he felt personally betrayed, which translated into a very contentious divorce. I got a minimal amount of child support, plus alimony for one year, since we were technically married for only two. There were no assets, and due to the unmanageable debt, both of us were urged to declare bankruptcy. Because California law splits a couple's assets and debts 50-50, I inherited a decade's worth of debt after just a little over a year of marriage. I remember my ex's creditors constantly calling before I filed, looking for payments I couldn't afford.

I went from a life of excess to saving every penny I earned from selling my own artwork. When my sons were bored, I said, "No movies, but we can make a cool fort out of cardboard boxes!"

At the same time, I was trying to recover from declaring bankruptcy. Luckily, I'd rented my new home before the filing went through. And thank goodness I also had a car because my destroyed credit made it impossible to get a loan or a credit card with a reasonable rate. I never wanted to use them again anyway. (My credit is now in the low 700's, and it took years to build back up to that number.)

Though I had a place to live, I had no resources to furnish it -- or replace all of the things that were full of memories from my marriage. I didn't want to sleep on the sheets we'd shared, but I couldn't afford to replace them. So I dyed them to make them look "new."

One day, I happened to dye a piece of suede, which turned out beautiful. I borrowed $100 from my parents, bought and dyed pieces of suede from the local leather shop, and then hand-stitched them together to make shawls. When a friend who owned a shop in a mall saw them, she said, "These aren't shawls -- you're making skirts, and I'd like two dozen for the store."

Before I knew it, I was dressing celebrities like Farrah Fawcett and Bonnie Raitt, and selling my creations in upmarket stores in major cities, the kind of boutiques I'd shopped in when I had money.

I quickly needed a larger space to run my business, so I took $10,000 from an art sale and borrowed another $10,000 from my parents. I knew nothing about managing a business, so I brought in a partner to handle the finances -- at least that's what I thought she'd do. It had taken me only three months to get "angel investor" funding -- and within 12, the money was gone. I was so busy with my creative role, on top of being a single mom, that I didn't pay close enough attention to what my partner was doing. It was clearly my mistake.

If I had to pick a low point, this was it. My marriage was over, my business had failed, and I was completely broke. There were weeks when I was so paralyzed with fear that I couldn't get out of bed. I couldn't figure out how I'd messed up my life so badly.
Looking back, I know exactly how it happened: My parents never taught me about money, and while I had graduated college, I hadn't been required to take business classes. But hitting bottom was actually a huge blessing because it made me realize something: With my life stripped down to nothing, I really had everything -- my sons, my health and myself. Eventually, with emotional support from my parents and friends, I began to forgive myself.

How I finally turned my life around

I had finally wised up. I was on a mission for financial stability. I got a job in marketing -- and got serious about budgeting.

I worked with an attorney to finally get my business accounts in order -- everything from contracts to trademarks and licensing deals. More importantly, he pushed me into taking a lot of it on myself, so that I could pursue projects as a fully engaged, responsible grown-up.

I also discovered the Women's Institute for Financial Education (WIFE). My CPA had recommended checking them out, and when I saw their slogan -- "A Man Is Not a Financial Plan" -- I had to know them.

Besides basics like budgeting, WIFE has taught me to plan for the future and depend on myself. I learned the hard way that you need to save, plan ahead and create a stable foundation in order to have the freedom to be entrepreneurial -- and successful.

Today, my approach to money today is on steroids. I love knowing where every cent is, and I'm proud of the way I educate my kids to be financially savvy. I now have emergency funds, insurance for the future and retirement accounts. Now, instead of avoiding bills, I actually get excited when my bank statements hit my inbox.

It's a long way from being $4 million in debt."

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: OR 702-501-9388!

Monday, March 18, 2013

Investing? Stocks or Real Estate? Who really knows?

In the past few months, I have watched Real Estate stocks going slightly up and it makes me wonder:  Where are these stocks really heading?

To me, investing in stocks has always been a losing proposition. I once had a substantial amount of money in mutual funds, bonds, stocks, etc. And, since that was about the time the economy took a dive, I lost basically 50% of the value.  I tried to wait for it to return, but, it only seemed to get to about 80% of the pre-crash value when I had to cash out for business operational purposes.

And, since, I really have never had an understand of how to invest in stocks, (I also did the e trade thing, too), I am very gun shy at going back into stocks again. To me, stocks have always had a reputation of being volatile. Their up and down value change -- even in good economic times -- makes this investment strategy too uneasy for me to stomach.

So, since my family's experience in Real Estate ownership goes all the way back to the Pilgrims, I feel more comfortable having my money invested in Real Estate. I will just say that real estate ownership has been well within my comfort zone for a long, long time.

And, since 2/3rd's of all US billionaires have made their billions in real estate, that's another reason why I feel the most comfortable in this industry.

So, when I read that Wall Street is buying stocks in Real Estate Companies, I got a little unnerved that Wall Street might screw the Real Estate market again. (The de-regulating of Wall Street was a bad idea!)

Also, recently, I have been researching various properties to acquire. A Local Realtor told me that residential investors are just buying up vacant Las Vegas SFR properties.  He said, these home investors are just buying them and they plan to just sit on them. He said they weren't even going to fix them up. They are going to wait for the Las Vegas Real Estate market to turn, then they plan to sell then as fixer uppers. Hmmm!

So, should you as an investor acquire stocks? OR, acquire a well located real estate property that is leased by a top national credit tenant in the form of a net leased income property that actually pays you cash once a month?

To be honest. either way you could lose.

Now, I consider myself an educated person. And even though I may be educated, stocks are still more like a 90/10 risk to me. (There is a 90% chance I will lose my money.)  Real Estate traditionally grows by +/-3% a year.

And since I know so much more about Real Estate than stocks, I know that I could earn a very good monthly income from real estate rather than a paper equity from stocks. So, to me even IF Real Estate was only a 50/50 risk, it is more inline and acceptable to me.  Especially, IF you own the real estate Free and Clear.

And, Real Estate has always had that tangible asset about it that you can touch and feel it to know it is real.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR 702-501-9388!

Sunday, March 17, 2013

UPDATE! Las Vegas Resort Casino Back on Market!

With Boyd Gaming selling their 87 acre Echelon parcel -- which I believe they could have gotten a lot more money for -- there are only two large Resort parcels remaining that has the ability to develop and/or build on to their sites.

So, those of you who are qualified and interested, one of the two Las Vegas Resort Casino Properties is developed and may be available later this year with a potential selling priced of +/- $500 Million-- according to my Resort contact. The other is H-2 Resort property that could be acquire at +/-$4 Million an acre.

So, IF you are qualified and interested in pursuing either Resort opportunity, you must sign the Non Circumvent, Confidentiality and Commission Agreement that is located at the Las Vegas Casino Information button in the right column.

Property details will NOT be offered to you unless you have signed the above form.

Also, IF these are too pricey for your company, there is a smaller local 'casino' property quietly available that will run you +/-$5 Million. Even though it is +/- 5,500 SF, it still has the "Unrestricted Gaming" entitlement  because of the grandfather clause. However, you will still need to provide qualifying information to move forward.

AND, lastly, there are still several "tavern" sports bar properties available that are NNN Investment properties!  Click on the PT's button to the right for details!

I appreciate you patience in this and hope to be able to bring you other Resort Properties in the next few months.

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR call me at 702-501-9388!

Friday, March 8, 2013

Real Estate Brokers who Claim Federal Loan Programs as Unsuccessful should NOT be working in Real Estate!

First off: I do NOT work in the Residential side of Real Estate.

Second: RE Brokers who do NOT understand the benefits of said Federal Loan Programs should NOT be in Real Estate!

There, I said it.

Lately, I have been annoyed by local Brokers/Agents who claim the 2008 economic collapse was from the unsuccessful Federal Loan Programs such as: Fannie Mae, Freddie Mac, FHA and VA Loans.

I am amazed at how uninformed said RE Brokers/Agents are of these programs that have and still do benefit their industry successfully over the years.

Fannie Mae was established in 1938 because there was no national standard for banks to lend. Each bank had their own loan guidelines; and they portfolio-ed ALL their loans from initial payment to the last. FDR realized that there was a need to free up this financial restriction on the banks so that they would have more money to make more loans to more borrowers, thus enabling the banks to make more money for their depositors and the bank itself.

So, IF the bank wrote a loan up to the Fannie Mas guidelines and once funded, the bank could then sell the loan to Fannie Mae. This would pay the bank off for the loan at a profit and the bank could make more loans.

AND, Fannie Mae would earn the interest from the loan by holding it over time so that allowed Fannie Mae to be (one of) the most profitable agencies of the Federal Government through the years. And, because banks were re-leaved of the portfolio part, IF the borrower did defaulted, it was then Fannie Mae's responsibility to foreclose. This aspect helped the Banks PR-wise because during the depression, it was the banks that were the bad guys! If a borrower defaulted, the local bank had the unfortunate duty to take property away from those borrowers - who were most likely depositors, too.

So, once the loan was Fannie Mae's responsibility, the bank was off the hook.

Freddie Mac, which was started in 1968, works with mortgage lenders to help people get lower housing costs and better access to home financing. Hmm! This sounds as if this benefits the bank or financial institution that funds the loan, and it helps the residential real estate industry, too, doesn't it? So, if there is a default, the Federal Government takes the risk. (Pst! Through the years, during 'normal' real estate times, Freddie Mac also made the Federal Government a profit! But, Pst! Don't tell anyone this. Especially a real estate agent broker! It's a secret.)

As for FHA, this loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments that are part of their portfolio. It also provided easier guidelines so that the bank or financial institution could make money funding the loan and IF there was a default, HUD guaranteed the loan for the lender. (Pst! This program also made the Federal Government and the lenders a profit! And, it helped RE agents/brokers make more money because the borrower could save money by putting a smaller amount of money down. But, please don't tell anyone this. It's a secret, too!)

Lastly, VA Loans are just as they sound. When WWII soldiers came home, there was a great appetite from these veteran soldiers to start a family and buy real estate. Since they had spent the previous years fighting tyranny in Europe, the Federal Government passed this loan program as part of the VA Benefits that allowed veterans to buy houses at "0" Down and their closing costs were limited. Hmm? This loan program was so successful, it was the primary reason for the successful boom that continued well into the late 1970's.

And, as you can see, these Federal Loan Programs essentially helped create the real estate industry.

So, IF you hear a RE Broker or Agent complaining about Federal Loan programs as unsuccessful; OR, that these loan programs caused the economic collapse in 2008, my suggestion to you is: find another, more informed broker or agent to help you buy or sell your real estate property. I strongly suggest this because a broker or agent who doesn't understand these programs that have not only benefited home buyers and sellers, but have helped brokers and agents alike make money through the years, they really and truly should NOT be working in real estate.

Well, that's my two cents! I am glad to help you understand loan programs that help all in the real estate industry. Now, let's put the blame for the 2008 economic collapse where it belongs: Wall Street!

For more Information about any Las Vegas Commercial Investment Real Estate Property, contact David Howes at: davidATdavidhowesDOTnet OR 702-501-9388!