LIVING OFF DIVIDENDS & PASSIVE INCOME

Went to a real estate meeting last night. The speaker was Ward Hannigan a local san diego investor who cleaned up the town during the last 2 RE recessions buying foreclosures. He thinks during the next downturn[which is going to hit in the next few years] he’s doing to make more money than he’s made totally during the last 24 in the foreclosure business.

He’s very much the contrarian investor. What is contrarian investing? It means you have the guts to go against the crowd [and popular sentiment] and do exactly the opposite. You sell when others are ecstatic and a you buy when others are fearful and have given up hope. Why does this work? Because people are usually wrong when they all put their heads together. A great book on the psychology of the common investor is Extraordinary Popular Delusions & the Madness of Crowds. It explains the feeding frenzies that have occured over the past few hundred years. [you get the weird feeling its describing the stock market craze and crash of 2000].

He says in a few years, when most people have given up on investing in Socal, it’ll be time to buy. You’ll need a lot of cash to pay for homes at auctions but you’ll need to buy them at 65-70% of the then FMV [Fair Market Value].

Here are some of his tips in no particular order.

• Stick to entry-level housing in core urban areas. Stay away from remote areas.
• Don’t buy condo’s, except in Downtown San Diego.
• Don’t buy office Buildings
• Buy on the 4th postponment of an auction[weeds out the less motivated investors]
• Get several cashiers checks in various amounts.
• Ask for the TSG when you win at an auction[Trustee's Sale Guarantee].
• If you doing pre-foreclosure buying, postpone the foreclosure by filing chapter 13

As an exercise he said those of you that were really interested should go down to the local court to find out how to file Chapter 13. Infact, as a motivational tool, he promised lunch to anyone who could prove that they went down to the office today. So during my lunch break I headed downtown to find out how to file chapter 13! After spending 15 minutes getting into the courthouse[had to go through the scanner and remove my belt and shoes], I find out there’s a seperate Bankrupcy court. After spending another 15 minutes wandering around, I finally found it. No, I did NOT stop to ask for directions to bankrupcy court! Funnily enough, it was absolutely empty! Didn’t think warranted its own building [which was quite pretty]. Maybe filing bankrupcy a seasonal thing

The clerk asked me if I wanted the forms for emergency chapter 13 filing. I was amazed at her prescience. My next thought was “wow, do I look like such a loser?”, but then she asked if I was part of a class. Aha! Several other people had shown up before I did. Anyway I said no I put on a face like I was hurt she was making fun of me! I found it it takes about 10 mins to file, once you filled up the couple of pages and it costs $274. “Thats it?” I asked incredulously?

So for a few pages of paperwork and a few hundred bucks I could get my creditors off my back for a while [& ruin my credit for the next decade]! Awesome! Don’t you just love this country! Of course I’m being facetitious. Chapter 13 is just a reorganization of debt. You have to pay back a lot of it over the next 3-5 years.

If you found this post helpful, consider donating to my coffee fund!

Related Posts

• Common Sense Advice For Investing In The Stock Market Given the poor performance of the stock market in 2008, its time to go back to the investment basics and make sure you don't forget the important stuff. 1. Only invest in companies that pay a decent dividend (at least 3%) and that have a long history of increasing their......
• How To Buy New Houses At A Discount The past week has been terrible for stockholders of sub-prime lenders. Today a major home builder, Toll Brothers reported that its net profit fell nearly 70% in the 1st quarter. There's a major slow-down in many markets across the country. Inventory is piling up and home prices are dropping. However,......
• Is It Time To Buy Real Estate? Over the past few weeks, several of friends have asked me if its a good time to buy a house now that real estate prices have bottomed. Encouraged by the media, everyone seems to think that home prices have bottomed out and the recovery is about to begin. Even Jim......

Related Websites

• Weakon 120: Intro to Economics Economics is a social science, like history, communications, or psychology.  For the most part their concern is with humans and how they interact with each other.  Those that study economics can cover a wide range of specialties.  From Steven Levitt's fascination with the implications of naming your child "Shatisha" to......
• Stock Market Myths That Won't Die If you invest in the stock market (or are thinking of getting back in the market), be sure you are basing your investment decisions on sound logic and reasoning. In particular, don't automatically accept certain "facts" about stock market investing that are more mythical than true. The Wall Street Journal......
• 3 Facts about Coin Proof Sets or Coin Mint Sets Anyone who is getting into the world of coin collecting needs to know some information about proof sets and coin mint sets. This is because these types of coin sets can be very valuable in some cases. By having a basic understanding of coin mint sets you will be better......

[All content is copyright of Living Off Dividends & Passive Income]

Random Posts

• September 29, 2007 -- How Traders Make 28% Returns In A Day
• May 10, 2007 -- Paris Hilton Gets A Nude Sculpture
• February 7, 2008 -- January’s Online Income Grows 36.92%
• August 22, 2006 -- How To Invest Like A Billionaire
• March 11, 2007 -- Be Like Slim
• November 17, 2006 -- Private Equity Funds on the Rise
• May 26, 2006 -- My Blog Has Doubled In Value

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.