In this era of opportunity for the real estate investors it is important that you develop a healthy understanding of your local REIA (real estate investor association), fellow investors, and your business.

There is no better place to find such a large number of real estate investor in which to network and construct deals with than at the meetings and events of your local REIA. Business without a REIA would make it more difficult for investors to develop because these REIAs provide the links necessary for fledgling investors to start off wholesaling, for seasoned investors to rehab and lease option, and for those with properties to run them by other investors who have a buyer’s list. Another benefit of the REIAs are their vendors, they support the club and offer services such as legal, accounting, consulting but the real gem here is that these vendors are at the very least familiar with our line of business!

There are a lot of good lawyers out there, but even the best lawyers don’t know everything, the lawyers that show up at your local REIAs are the lawyers you are looking for because they have an understanding of what you are trying to do, what your business really is! Without this source you would end up spending and wasting a lot of time chasing lame referrals and making cold calls from the yellow pages to firms that don’t really have a vested interest in maintaining the kind of reputation that the lawyers at your REIA does. This spans most services and vendors you find at REIA events, take advantage of this convenience. All things considered professionals who can meet the needs of the real estate investor can be difficult to find without a REIA and a professional that is aware of the nuances of real estate investing will always be able to meet your needs better than one that doesn’t assuming everything else is equal.

Now at these REIAs you will see plenty of investors pitching their deals to each other, broadcasting their haves and their wants, and learning the same lessons as you are. Some may view fellow investors as competition as they may be the ones who are sending in offers to some of the same properties as you are, but this should be a very minimal concern and is easily made up for if you consider this idea of ‘half competition .‘

Half Competition – Where your competition isn’t strictly competition but still competition in some manner of speaking.

As investors it takes two to tango, every seller needs a buyer and buyer needs a seller and everyone will sooner or later end up in this split. We are all competing in the same pool of properties where we’re making our offers for the lowest acceptable price from motivated sellers, banks, what have you. A majority of the investors in this field are looking to either wholesale to another investor to let the other investor do what they will with it.

On the other side of the coin all investors need to have an evolving buyer’s list, not should have, they NEED to have. The more investors as a whole put their feelers out there for to keep their buyer’s list health and the more investors push for investor discounts as a whole with motivated sellers the healthier our business environment is... stocked with opportunity for those willing to get in the mix and contribute. So your ‘competition’ is just as much your allies if not more than they are your ‘competition.

Your business may work if you choose to do everything yourself in a vacuum by buying properties at a discount, running the rehab project yourself, and then attempting to retail it yourself but for most this is an inefficient model when you begin to consider all the advantages that collaborating with your fellow investors has to offer.

Here is an article from the Associated Press “Retail Sales rise unexpectedly in January”. Really? Unexpectedly? Really? How can this be unexpected? Oh yeah, silly me, the Economic Recovery Bill hasn’t passed yet, so in theory, this cannot be possible. However, it is what it is and it has happened. So what is really going on here? Simple, the economy is beginning to recover on its own. Yes, I said “On its own.” I know for some people it is hard to believe, but it is true.

Let’s take a look at what has happened over the last year and put the pieces of the puzzle together. The two biggest factors were gas prices and house prices. These are the two biggest items that drives a person’s day to day life. When light crude oil prices reached record levels in 2008 at almost $150 a barrel, gas prices were around $4.00 a gallon or higher. At the same time, real estate values were plummeting at record levels and no one could sell or refinance without taking a hit.

Foreclosures reached historic levels in 2008 and prices started dropping fast as these properties either went through foreclosure or loan modifications. While everyone expects even more foreclosures over the next couple of years, that is to be expected as that always happens after a boom, which we went through one of the largest and fastest booms in history.

Since gas prices dropped and real estate values plummeted around the country, credit became tuff to come by and everyone was forced to re-budget themselves personally and in business if they ran a business or were self employed. This credit crunch made it difficult to spend extra money in December for Christmas. However, that is also around the time that the credit markets began to free up. And I don’t believe it had to do with 2008 TARP bailout bill as much as it had to do with everyone being forced to re-budget themselves and their businesses. Once that happened, it took a couple of months for the financial industry to clean their books up as well and begin extending credit again. The 2008 TARP funds may have helped quicken this recovery, but the recovery would have happened on its own, as it always has in the past.

As in any recovery, there will be tough times ahead, but if we don’t face them, we cannot fully recover. People still need to create new budgets and companies still need to restructure. But the sooner we all face the facts, the sooner we can get back to a normal life.

Geithner unveiled their plan to aggressively combat the so called worst crisis in seven decades. They are saying that their plan of over $1 trillion dollars is designed to get the frozen credit markets functioning again. See their full plan outlined at Yahoo News.

Let’s break this down using common sense. I know, for some people I will need to explain common sense. Common sense simple means that we look at the facts and come to a reasonable conclusion based on the most likely outcomes. There is also one other item that needs to be looked at if we are using common sense, and that is the desired goals of the planners and whether or not they have been disclosed. However, the advantage of common sense is that we can actually discover the desired goals of the planners if we properly apply common sense.

The Obama administration wants to push down our thoughts a $1 trillion dollar social engineering program and they are disguising it as an Economic Recovery Package. So let’s look at the facts. First of all, most of the spending in this pork package will not start until 2010 and the spending plan is designed to end in 2019. Does that sound like and emergency recovery package designed to free up our credit markets right now? Using common sense, the answer is no. How much of this plan is designed to help the credit markets, as far as we can tell, there is nothing in his plan that directly helps the credit markets.

While all of this sounds good, what makes this so important that if we don’t pass it right now, the world will come to an end? There is nothing in here that will start immediately and nothing in here directly address the economic problems. Common sense tells us that they need something to help the banks with their non-performing assets. That is where the partnership comes into play. If this is truly an economic recovery plan, then the Obama administration needs the Private Sector for the recovery, thereby allowing the economic recovery plan to pass and make the public believe that the recovery was part of the spending bill, when common sense tells us otherwise.

Let’s take a quick look at what is really happening in the markets right now. They only spent the 1st half of the $700 billion TARP funds that the Bush Administration passed back in October. They still have the other $350 billion dollars waiting to be spent. Most banks want to start lending but they are being pressured from two different governmental agencies. The housing and finance committee is pushing the banks to start lending, and the banks are saying that they can and want to. However, the regulators are telling the banks that they need to raise an additional 2% percent of cash from depositors in relation to the banks overall assets. So while the banks want to lend they have been given stricter regulations which is temporarily preventing them from doing so. While 2% may not sound like a lot, it is when you consider that the reason consumers are not saving money right now is because the credit is temporarily frozen forcing people to spend more money now to live on rather than save money in the banks.

The funny thing is that even though the regulators have imposed stricter requirements on the banks, people are just now starting to get caught up and putting their money into the banks and the banks are finally being able to start lending again. That is why I believe that the Obama administration wants this so called economic recovery package passed as quickly as possible. They are using fear tactics to push it through congress so that it passes before the markets can fully recover, at which time, the Obama administration will be able to take credit for the recovery. However, if the so called economic recovery package doesn’t pass quickly and the credit markets begin to recover on their own, then the Obama administration will not be able to get their massive social engineering bill passed.

My proposal is to let the private sector do what they have already been doing, fixing the markets. We don’t need to partner with the government to make this work. However, the government needs to partner with us to get their social engineering plan in place. Take if from experience, partnerships almost never work out the way they were intended to. We were never meant to partner with the government, the government was supposed to support us and work for us, not the other way around.

Yet again, leave it up to the government to demonstrate their ability to legally create a double standard. In many if not most states, it is illegal for investors to buy a property from someone in Foreclosure and then rent it or sell it back to the homeowner. This type of transaction is called Equity Stripping when a nongovernmental investor does it, but according to Freddie Mac, it must be considered compassionate.

According to the Finance and Commerce legal paper in Minneapolis, MN, Freddie Mac announced a new policy that would allow some borrowers the ability to stay in their properties after the foreclosure process if they can demonstrate the financial ability to make a rental payment. Freddie Mac s reasoning is that it is better for overall property values and neighborhoods if the properties were occupied rather than vacant.

While that may seem like a worthy goal, it is simply illegal for the rest of us to do the exact same thing, so we now have a new competitor in the real estate market, Government. And besides, if they had a clue, they would realize that by keeping the previous homeowners in the property as renters, would result in a lower overall property value and it will take much longer for investors to purchase the property and do the necessary renovations on the property that would significantly increase property values and the overall neighborhood values.

Fortunately I do not think this will make up a huge portion of the foreclosure market, but it will impact a certain percentage of it. One of the side benefits that I do think merits consideration is the investor properties that are foreclosed on. In those properties, there usually is already a tenant in place and they will have the ability to stay there and rent from Freddie Mac. I think that is a good thing since the renter was not the one responsible for the foreclosure in the first place.