BloodhoundBlog

There’s always something to howl about.

Author: Al Lorenz (page 2 of 3)

Realtor, Media Mogul

February 17, 2010

Fraudulus: Money for Nothing, Tax Credits for free!

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Realtor, Media Mogul

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Incredibly, the IRS cannot do a lot to stop you, or anybody, from cashing in on the stimulus tax credits.

According to the Treasury Inspector General for Tax Administration, the IRS is “unable to verify eligibility for the majority of Recovery Act benefits at the time a tax return is filed.” That doesn’t mean they can’t audit you, but only a small portion of filers are audited.  If audited, you would have to correct any mistakes and you might face penalties.

Understand that the IRS prefers that you file electronically for efficiency reasons.  They rely on taxpayers to provide accurate information.

For example, the inspector general recommended that the IRS require taxpayers to provide documentation to verify first-time homebuyer credit claims, but the IRS said no. Such a requirement, officials said, “would be burdensome and would potentially exclude as many as 2 million taxpayers from electronically filing.”

It wasn’t until the Worker, Homeownership and Business Assistance Act of 2009 was signed into law on Nov. 6 that additional documentation was required for the credit and the IRS was given additional authority with respect to returns that did not include that documentation.

Moreover, the IRS did not have math error authority – meaning that officials are not authorized to check calculations – to stop payment of erroneous credit claims. In essence, the IRS relied on taxpayers to be honest, didn’t require hard documentation and could not check the math on certain credits.

That same article quoted above has a sidebar titled “Getting money you don’t deserve.” It goes through a hypothetical scenario of how the First Time Homebuyer Tax Credit can be scammed for extra benefits.  The limitations of e-filing do not allow the IRS to transfer paper documentation to electronic format.  So, there is a level of trust in the system.  There is a level of trust in the system that the 73,799 taxpayers who are suspected of not correctly claiming the tax credit as of last July do not justify.  Those suspected incorrect claims may total $504 million.

Expect more news of fraud as this version of the Homebuyer Tax Credit, and other stimulus credits, wind down Read more

January 28, 2010

Oregon voters tell High Earners and Businesses to GET OUT! Where will they go?

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Realtor, Media Mogul

Author website

All the election news last week was not as rosy as Massachusetts.  Oregon voters approved two measures that invite businesses and high wage earners to move out of Oregon.

Voters approved an increase in the minimum excise tax paid by every business from $10 each year to $150, a 1500% increase.  Excise tax rates were also increased for all gross revenue classes.  They also raised the corporate income tax from 6.6% to 7.9% on earnings over $250,000.

If you are an Oregon resident who makes over $125,000, if you’re single, or $250,000 if you file jointly, your income tax rate just increased from 9% to 10.8%.  If you earn over $250,000 and are single or a joint filer of over $500,000 your rate increased from 9% to 11%.

In other news from the Northwest of interest to those in North Carolina, the Washington State Democrats are telling Boeing to leave.  They aren’t going to let little things like agreements that they already made stand in their way.

Boeing spokesman Bernard Choi said the bill “would take away our ability to run our business” and says the company has met all the detailed conditions in the 2003 tax agreement. – Q13

For those of you from Oregon and Washington reading this, Texas is one of 5 states with no income tax.

Real Estate professionals in Idaho, Texas or elsewhere where the disenfranchised Oregon and Washington achievers might move may find the Northwest a productive place to look, as well as California, for buyers of high end homes.  Personally, I’ve lived in Texas before and don’t rule it out in the future.

January 12, 2010

Is it time to consider creating some of your own Inventory?

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Realtor, Media Mogul

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I really like real estate.  I like the way it is such an integral part of wealth creation.  I like it so much, I can’t help but play with it.  For me, that means buying properties and doing something productive with them.  But, I don’t like real estate so much that I want to lose money for the privilege of playing with it.

I am also in a tiny market.  In 2009, there were only 125 sales of homes in the whole Lake Chelan area.  There were just 2 sales of commercial properties all year! There are about 100 agents and even with just the top few making most of the sales.  I would have to do virtually every transaction in the area to make the income I desire.  So, generally I make far more from the profits on what I develop than I do from selling other people’s properties.

That is one of the reasons that I run my own real estate agency.  I am virtually unemployable at other brokerages because my cost to pay a point or two to a broker on all the sales of inventory I created on my own would be more than I would make in commission selling other folks properties.

But, last year I didn’t create a single new parcel, home or business.  The footing just felt too unsure.  That means I have a few properties I’ve just been sitting on.  There’s not much profit in that.  So, I’ve been rethinking how to make money with those bits of real estate and found some opportunities are out there.  For me, it is time to get some projects moving.

The opportunity is as easy as taking something that isn’t doing anything and making it turn some profit.  For example, I have a bit under 10 acres along a highway and across from a large boat launching facility I had originally purchased to do some commercial development on.  Today, it just doesn’t make sense and I don’t expect it to for several, or many, more years.

But, rather than being insane and spending millions on commercial improvements that nobody would want Read more

December 11, 2009

Fuel for the AT&T / iPhone versus Verizon / Droid debate

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Realtor, Media Mogul

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The Verizon versus AT&T debate has come up lately particularly with the introduction of the Droid.  I don’t even use a smart-phone yet, but I am married to someone who has been an expert in the network side since before the first portable phones were brief case phones converted from car-phones.

So, I came across this article that has further thoughts on the AT&T / I-Phone versus Verizon / Droid for network performance and coverage.  I think he may be on to something in that he supposes the I-Phone has created a higher expectation for AT&T.  It sounds plausible to me.

I’m imagining U-Stream on 4G already…

October 29, 2009

With help like this…

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Realtor, Media Mogul

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Robert Worthington is right.  Do you want to know how right he is?  According to Goldman Sachs, who ought to know about government intervention, the feds interventions into the housing have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.

The government over the past year has slowed the pace of foreclosures through moratoria and the drive to modify mortgage terms to keep more borrowers in their homes. It also has pumped up demand for housing by giving tax credits to many first-time home buyers and by driving down mortgage interest rates. As a result, home prices in some areas have risen in recent months, particularly for homes that appeal to investors and first-time buyers. Bidding wars for the more attractive bank-owned homes have become common.

But these artificial props won’t last forever and may have created a false bottom in the market. “The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.” – WSJ

If they’re right, rather than a healthy market heading into 2011, what do you think we might actually have?  We could be looking at falling home prices, rising interest rates and a government whose currency is faltering.  Does it sound like a double dip?  Will you be happy that the functions of the market were tampered with once you realize the misery has been extended, for years? Remember to say thanks to the NAR, thanks to the NAHB, thanks to the Feds and most of all, thanks to us realtors who supported the larceny.  But, at least you may have universal access to a health care waiting list.

October 14, 2009

Why the Housing Bubble hit some areas harder than others.

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Realtor, Media Mogul

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I don’t know if you’re familiar with Randall O’Toole from the Cato Institute, but he’s much better reading than Lawrence Yun.  I was just acquainted with one of his latest works entitled How Urban Planners Caused the Housing Bubble.

If you’re in real estate, it is a must read.  I live in a strict Growth Management state from a public planning perspective.  As a freedom loving individual, it is frustrating.  But this analysis not only talks about the costs of planning, but the volatility it introduces into the market and why.  It compares different policies of various states.

The correlation between planning practices and pricing volatility is uncanny!  Fed policy, the Community Reinvestment Act and other hair brained political practices can’t explain the phenomenon without the inclusion of growth managment into the equation.  The costs for growth managment are also staggering!  For real estate nerds, it is required reading!

October 7, 2009

Big Brother attempts to control Bloggers

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Realtor, Media Mogul

Author website

The Federal Trade Commission, in the name of protecting America’s consumers, released new guidelines on Monday requiring bloggers and social media users disclose paid endorsements starting December 1, 2009.

The regulations are being described as unnecessary, too vague, totalitarian and a digital double standard since they don’t apply to traditional media at TheAtlanticWire.com.

After December 1, be careful out there when you blog about a listing or even the latest software product that you run across that you want to share.

As usual, there is always an opportunity.   Does someone want to come up with the shortest legal disclosure for use with the 140 character limit on twitter?  Oh yeah, I received no monetary  compensation for this post on my review of the FTC’s new requirements.

September 29, 2009

Do Today’s home prices reflect their market value?

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Realtor, Media Mogul

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Can you really look at a buyer today and tell them that they are buying their home at a good price?  Sure, you can tell them how the price they are paying compares to what folks have been paying the last few months, or few years.  But that doesn’t mean that what you are seeing is the true market price!  The actual market price can’t be determined without a free market.  Right now, we have anything but a free and stable market in real estate.

Take the government’s free ice cream housing promotion, also known as the Homebuyer Tax Credit.  The issue I’m concerned about isn’t that it is going to cost taxpayers about 15 billion dollars if it is allowed to expire on November 30.  Nor is the issue that it has cost $43,500 that we, our children and grandchildren will somehow have to pay for each new buyer attracted into the program according to the NAR numbers.  The issue is it has artificially increased the value of homes in the market by $8000 and that will end on November 30th, or sometime.

So, that $250,000 home your client just bought and put a mortgage on is really only worth $242,000 when that market distortion is removed.  With an FHA loan, and a program to use the tax credit for a down payment, guess who is already upside down in their purchase?  Does this sound anything like the too recent past?

Our tax code is already heavily skewed towards home ownership.  With our government’s current spending spree and their desire to raise taxes, could the sacred mortgage interest tax deduction eventually be reduced?

While that is probably not the immediate threat, the current rulers prefer government solutions to allowing the private market to function.  Be it FHA or State Housing Programs for low income borrowers, a monetary policy of rock bottom interest rates and the mortgage interest deduction the programs and the proposals coming forth further distort the market.

This makes the biggest risk in a real estate investment strategy or even a home purchase predicting the future changes in artificial supports to the market Read more

September 5, 2009

The Government takeover of Real Estate is well underway

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Realtor, Media Mogul

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Earlier, there was a discussion of the possibility of a government takeover of real estate brokerages. We had a bit of a lively discussion about the possibility of a governmental takeover of real estate brokerages.  But I’m here to tell you, it will never happen because in the end, the government will have no need for brokerages.

The government takeover of all real estate is already pretty far along.  Growth management, shorelines management, local municipalities, county, state and federal regulations have all taken unprecedented freedoms from landowners and redistributed them to government in the name of the “public.”  Many cities’ zoning codes are in the process of not only defining what uses to allow for land in their jurisdictions but they are implementing design standards that strictly control how such structures must look.  In the county that I live, government already owns 88% of all the land and that percentage is increasing.

Oppressive property taxes in many areas are themselves rent on the land from the government who believes itself to be the true owner.  Don’t pay those taxes and you quickly find out who really owns the land.  Generally based on assessed valuation, property taxes in periods of increasing value are a tax on an unrealized gain to the property title holder who is then taxed on the gain, as both a capital gain and an excise tax, when it is realized.

You may remember a Supreme Court ruling in Kelo vs. City of New London in 2005 that greatly expanded eminent domain to include seizure of privately owned property for redevelopment and resale to other, more politically favored, private owners or developers!  Since that ruling governments can, and have, taken private lands for any reason, including simply selling them to preferred private owners.

The drumbeat continues.  The new Secretary of Housing and Urban Development is using Fair Housing laws as justification for new requirements he is placing on cities and developments to provide diversity of housing to obtain a “fully integrated society.”  “New Urbanism” and “Smart Growth” are simply terms for the latest planning fads of social engineering under the guise of “public” Read more

August 12, 2009

Am I being Paranoid about what the NAR is calling the “Recovery?”

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Realtor, Media Mogul

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Our helpful friends at the NAR have apparently sent out press releases about the increase in home sales in the second quarter being a sign of a “recovery.”

I saw this on MSN today (yes, I look at MSN):

WASHINGTON – U.S. home sales grew in the second quarter in 39 states, another sign that the ailing housing market is finally coming to life.

Total quarterly sales rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million, from 4.58 million in the first quarter, but were still about 3 percent below a year ago, the National Association of Realtors said Wednesday. – MSN Home sales grew in second quarter in 39 states

Don’t get me wrong, I’m all for a recovery.  I would love to see a recovery.  Did I mention that really strong sales would be great?  The issue for me is that sales that are still 3% below a year ago doesn”t look like a recovery to me.

Yes, sales are higher than the first quarter of 2009.  However, around here, second quarter sales are always higher than first quarter sales.  I would wager that third quarter sales will be above second quarter sales, as always, too.  But that doesn’t mean they will be above the third quarter of last year.

Help me here, what am I missing?  With help like this from the NAR, it’s no wonder folks don’t trust Realtors.

August 10, 2009

It is time for a new Civil Rights Movement

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Realtor, Media Mogul

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After seeing all the fuss over Doug Quance’s post about A Governmental Takeover of Real Estate Brokerages, I thought a more thorough answer from my perspective to his question might be appropriate.  Last week, a couple of sentences from a superb article by Yaron Brook at the Ayn Rand Center literally twisted at my thoughts.  The sentences are:

  • Rights, as the Founders conceived them, are not claims to economic goods, but to freedoms of action.
  • The rights of some cannot require the coercion and sacrifice of others.

Those sentences are basic premises of the Constitution, of human dignity and of what freedom and liberty are based on.

But apply those thoughts to the current maelstrom swirling about health care, and one’s “right” to health care has a wholly different meaning.  In Mr. Brook’s own eloquence:

The solution to this ongoing crisis is to recognize that the very idea of a “right” to health care is a perversion. There can be no such thing as a “right” to products or services created by the effort of others, and this most definitely includes medical products and services. Rights, as the Founders conceived them, are not claims to economic goods, but to freedoms of action.

You are free to see a doctor and pay him for his services–no one may forcibly prevent you from doing so. But you do not have a “right” to force the doctor to treat you without charge or to force others to pay for your treatment. The rights of some cannot require the coercion and sacrifice of others.

Real and lasting solutions to our health care problems require a rejection of the entitlement mentality in favor of a proper conception of rights. This would provide the moral basis for breaking the regulatory chains stifling the medical industry; for lifting the tax and regulatory incentives fueling our dysfunctional, employer-based insurance system; for inaugurating a gradual phase-out of all government health care programs, especially Medicare and Medicaid; and for restoring a true free market in medical care. – http://www.aynrand.org

Our entire national debate Read more

July 31, 2009

In search of better, faster, linkier Craigslist Ads

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Realtor, Media Mogul

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I still get quite a bit of activity from Craigslist ads. I have been using Postlets, because it puts listings a bunch of different places, and adding a bit of html before and after their code with links to the individual property site, my blogs and my real estate site.

Even though Postlets doesn’t put links in the Craigslist ads, I wanted links! So, since I’m lazy about coding and not very fluent in html, I did a draft post in WordPress with the things I wanted to say and link to and put three lines above the Postlets ad with links to the individual property site, my blog and my real estate home page, clicked to have it shown in html and pasted it in above and below the postlets ad. It looks like this. With 20 or so of these running, I get a noticeable bump in google search results and traffic. No problems with being flagged or having the ads yanked.

But, I’m thinking I can do more.

Craigslist is a more time consuming than I would like because the ads expire every week. I want to automate the process where I can create a template that I can prepare quickly, much like the custom page creation for each property can be automated using Engenu.

So, I took the source code for a property page from Engenu and pasted it into a Craigslist ad to see what would happen. I found out right away that only 30,000 characters were allowed in the post description (the place I can paste in html code). Since the file I tried was 11,000 lines of code, I found that limit pretty quickly. I wanted to see what would come up and I at least found how many characters are allowed. 30,000 characters of code is enough that I should be able to do something better.

Then, I finally searched BHB for Craigslist and found Greg’s post on CL from last year. The comment string is pretty important on that post. After reading those, I was ready to experiment with making a new .html template Read more

July 1, 2009

Follow me on this; I hope Cap & Trade passes for all our sakes!

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Realtor, Media Mogul

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american-flagDo I really want the Cap & Trade lunacy, its huge loss of freedoms and destruction that will be wrought to the economy, including the real estate industry?  No, not really.  But I think it might be better than the alternative.

Because WHAT I WANT is for Americans to WAKE UP!  I think Cap & Trade, HR 2454, may be just the ticket.

Surely, this will wake people up to what is happening!  Skyrocketing energy costs, tax hikes, economic stagnation or worse and the nanny state in places it should never have been considered.  Won’t that be enough to wake folks up?

I’m very concerned about what it might take to get the public to finally understand.  Has public education wrought us a feckless population that has turned off their brains and are simply cannon fodder for smooth talking thieving politicians?  Has that been the end game all along?  There aren’t too many places left in the world to go where capitalism is still valued.  When the U.S.A. is taking a more socialist stance than the People’s Republic of China on economic intervention, I have to wonder how folks have lost appreciation for why America is great.

So, back to Cap & Trade, or “Clean Energy” or whatever con they’re calling it.  You see, I figure Cap and Trade can be made to go away pretty quickly.  Sure, it will set us back and cost us just like the still to be spent stimulus money will cost us.  Call it tuition for the American public whose memory is so far gone they can’t even remember back to Jimmy Carter.  Again I digress, but that lesson was good enough to get us Ronald Reagan at the time.

What won’t be so easy to make go away is nationalized health care.  I don’t think the lobbies that would support keeping Cap & Trade in place would be anything like the uproar that would occur if Nationalized Health Care, if it happens, has to be reduced or dismantled.  So, I would rather have the populace figure out what a bad deal this whole socialist thing is with energy than Read more

May 27, 2009

Some listings are extra FUN!

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Sometimes, out here in more rural America, we have properties to sell that you can’t just drive up to in the Lexus and click off the security system to show.  I usually have a property or two a year that are a bit more challenging and immensely more fun to work with and show.

Saturday, I took a several hours to view a new listing.  In that time, I only saw bits of it.  This particular property is pretty big,  1 mile by ½ mile for 346 acres.  It has 16 individual tax parcels and is mostly undeveloped.  It is surrounded by forest and has over 2000 feet of elevation change across it.  It does have power, a well and amenities.  Access to part of it is via a dirt road.  Other parts also have dirt roads that go near or into the property.  While this property is spectacular wilderness, it only takes 20 minutes to get to the edge of it from town or my own home.  This is a fun property!

I was reminded of a conversation at Unchained one evening about good real estate agent cars.  While I can often use a sedan, maneuvering around boulders on a narrow road cut into the side of a cliff just isn’t what a Lexus is made for!  Things are a bit less civilized on a listing like this!  I’ve used SUVs, pickups,  jeeps, ORVs and even snowmobiles to show my most fun listings.  No worries though, I’ve never seen nor heard dueling banjos at any of these remote properties.

joe-creek-northwest-from-top-of-parcel-p

Part of the fun in selling one of these ranch or acreage types of properties is to figure out the best way to show it to clients and explain how to show it to other agents.  I also like to be able to talk to clients before a showing and make sure they have an expectation on what we’ll be doing.  If they have height concerns, I might avoid a narrow path cut into a cliff and just show that part from the bottom of the hill.  If we’re hiking, I try to make Read more

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