Secret Of The Rich... Revealed!!

Lets start with a non-fiction story.

There is a man who walks his 2 dogs twice a day; once in the morning and once in the afternoon. This man seems to be an ordinary man in his early 60's with a home not too far from where I used to live. As I drive off to work in the morning, I would see him walk his dog and waive at me with a friendly smile. He lives in a decent size home and drives a not-so-expensive vehicle.  I've always wondered what he did for a living.  The emphasis is on "did" because I assume he is already retired. It took me about a year before I learned more about him.  About 3 years from living in the same street with him, he decided to hire me to sell one of his income (rental) property.  At this point, I got to know him much, much better.  I learned that he works from home as a trader of stocks and bonds.  I learned that he buys and sells stocks in hundreds of thousands of shares. I can't tell you guys more on his techniques (It is a secret), but my neighbor who walks his dogs twice a day is actually a multi-multi-millionaire.  From then on, I've enjoyed the conversations we had with regards to stocks, bonds, and mutual funds.  I've also enjoyed the life lessons he has shared with me on how he was able to accumulate great wealth. 

When I was in college studying Business and Psychology, I have always wondered how the rich become wealthy.  Do the rich really have any secret on how they accumulate wealth?   Is there a magic bullet where once you pull the trigger you will see instant result?  are often the questions that formulate in my mind.  

During the past 11 years, I've met many other millionaires like my neighbor because of Real Estate.  Some millionaire homes that I actually sold are valued at a million or more.  Because of selling millionaire homes, I was able to achieve the prestigious Certified Luxury Home Marketing Specialist designation in Real Estate.  I also became a member of the Millionaire Guild in Luxury Marketing.  I became the youngest Broker in the whole of Nevada, Las Vegas and Reno, ( I was 30) when I achieve this milestone.  There were also only 26 in the whole Nevada who received the Million Dollar Guild designation, and I was one of them. 

  What made my case a little different is that I own my own real estate company. No big franchises were backing me up to help sell my services.  Many times when I was marketing luxury homes, the owner would say "Never heard of your Company."  But through sheer will and salesmanship, I was able to convince some of them to give me a shot.  It was during these times that I learned a lot on how my clients accumulate great wealth.  They shared with me some of the secrets that made them become who they are today.  Although I would need to write a book to tell each and every lessons I learned from them, I decided to just share a few important tidbits on creating wealth (So you buy the book once it is released ;-).   Lets move on to 5 Secrets of the Rich.



Secret Of The Rich #1 :

THE RICH "OWNS" THEIR OWN BUSINESS

Duh!! Some of you might say.  Well, hear me out on this.  Are there not successful business owners? answer is YES.  Are there not so rich business owners, still the anwer is "YES."  So, what make millionaire business owners, well, Millionaires?  The answer is Passion to be #1 for their Business!!  Millionaire business owners that I've met have a system of positive, forming habits that they created to make their business grow.  They tinker with it, change it, and even reconstruct their system of doing business until it provide the results they have been looking for.  Even when they are already successful, they keep on working at their business system.  Some have called  this business system as "leverage." I've not talked to a millionaire that wasn't passionate to be the best on the Business that he/she is doing. 

Secret of the Rich #2:

THE RICH ARE NOT AFRAID TO TALK ABOUT "MONEY"

 

What I mean on this is the rich talk alot about their company, their business acquisitions, their investments, their network and net worth, and their vacations.  We are not talking about salaries, hourly pay, savings, and commissions.  To them, those talks are reserved for the middle-class and the not-so-middle class. To the Rich, Money is a subject as openly discussed as how everyone else would talk about the news or the weather.  If you talk to the Rich about news and current events, their mind will shut down and find another person they can talk to.  This is an over generalization on my part, but I hope you get my drift.

Secret of the Rich #3:

THE RICH BELIEVES IN PASSIVE INCOME

What is Passive Income to the Rich?  It is Income earned while they sleep, play golf, go on vacation, or eat dinner at an expensive restaurant.  Most middle class, and not-so-middle class people earn by working for a job, salary, or commission.  The Rich learned to earn by way of dividends, Cash Flow, Residuals, and Profits.  Did you see the difference?  The language of the rich is as different as their language of income.  The Rich clients that I served believed that working for a job, salary, or commission pay will never make anyone rich.  By the way, our Farmers Insurance Agency and my Moringa Health Network business provides money and teaching into the passive income territory.  If you are interested in joining me or  knowing more about earning business passive income, you may contact my office anytime or visit me at http://www.psychologyofselling.biz/.

Secret of the Rich  #4: 

THE SELF, NOT THE PRODUCT, MAKES THEM RICH.

A Rich person does not necessarily become rich because of a product they serve; they become rich because they "ARE THE PRODUCT" that get served.   Still confuse?  The rich are rich today because they have invested valuable time and energy in making themselves the ultimate product.  The rich people I met and become friends with are positive, enthusiastic, and has a student mentality to know how they can improve themselves. They read books, attend seminars, and talk with other rich people.  They don't stop because they are rich, but rather they keep going because they are rich.  The success of the product or service they deliver become successful because they find their perspective of themselves as successful. 

Secret of the Rich #5:  

THE RICH FAIL MORE TIMES THAN THE AVERAGE PERSON, BUT THEY COME BACK EVEN RICHER. 

Believe it or not, many rich person I've talked to lost a good portion of their wealth at one point, but they bounced back stronger.  As the saying goes, "The Bigger They Are, The Harder They Fall" does imply to the rich. However, that saying is incomplete.  The Rich has the saying "The Bigger They Are, The Harder They Fall, But We Rich Guys Become Even Richer After" best describe them more.  You see, the rich hate the word "Comfortable."  To them, this word kills the need to be Rich.  So, they take risk more than the middle-class person, fail, learn, then become more rich.  While others see the negative side of them losing wealth, they see themselves as going through the changes to create more wealth.

So, here are just a few fundamental differences on what makes a Rich person wealthy.  Of course, each millionaire have different ways on how they accumulate wealth, but the fundamentals on these 5 things are pretty much universal.  So, If you decide to become "less Comfortable" in pursuit of becoming rich, don't worry.  The path you are taking will bring positive result as long as you decide it will be.  Just Remember the Rich-Old Saying, "The Bigger They Are, The Harder They Fall, But We Rich Guys Become Even Richer After."

P.S. If you are interested in learning and starting your own passive income business, I do offer 2 business opportunity through our Farmers Insurance Producer Program and our Moringa Health Network Business Opportunity.  Farmers Insurance Producer Program are good for the Reno/Sparks Nevada Market, while my Moringa Health Network is good worldwide. My Office can be reached at 775-786-7778.  You can also email me at erwinsigua@yahoo.com "By working together, we attain more for each others business."---- Erwin

Money Success or Failure? Which Road are you on?

"You Can Do Anything If You Believe It."  Now, isn't this the case for everyone? 

As an Entrepreneur who owns and manages multiple businesses, I better believe this statement is true.  As they say, Entrepreneurs are the eternal optimist, we believe that we can achieve anything. But what about the naysayers who believe that timing, the economy, the market, the job, or the family situation are the real determining factor on what the best we can do at the time being? Well, I say to this "BULL CRAP!!"

During my Moringa Health Network Seminar, I've asked candidates "If money was not a factor in your everyday decisions, how would you see your life turn out today?"  One of the candidates says he would probably be circling the globe visiting exotic locations. Another sees spending more time with his family on vacations, while another see herself as able to create a non-profit organization for disabled children as long as her needs are met.  After this question, I would ask them what they believe the dollar amount it would take for them to meet this  "Money-not-a-factor" question. Most would respond it would take at least $150,000.00 dollars to create this freedom. 

Now I know some of you may agree on this, while others will not.  Some of you may already be making more than this money figure and say this is not enough, or "Yes" it is enough.  But the point I am getting at during these sales training is why not reach for the stars and say One million, Two Million, 20 Million, or more? Why not "COMMIT" to "THINK BIG"? 

The consolation prize on this kind of thinking?  You may not reach the stars, but you may hit the moon on the way up!

You may say, "Nah it is impossible to make this much." Well, according to many millionaires it is very much possible. Millionaires believed it can be done, so it is done.  You may also say, "I don't know many people making this much in my career, profession, or job."  Then I would suggest to find a different career, profession, or job path to fulfill the dream you have set for yourself and not sell yourself short on what you decided to achieve for yourself.  You may say, "I am happy on what I do, and I enjoy going to work" If you are, good for you. This shows me that you probably have a great boss or employment career that will always be there for you.  Just make sure your Boss, or employment career will have as much of a commitment to you as well and will "NEVER" change the situation you are currently in.

I've raised this issue on my seminars to make people understand that you can be who or whatever you want to be if you believe in it.  If you are having problems paying the bills on time, not able to buy that nice car you have always wanted, the nice purse that matched your shoes, or take the kids to a Disney Cruise whenever you want, then the reason to do more is right in front of you.  I believe you need to take actions and don't settle to the current condition you are in.  Believe you can do it then take action on it. No excuses, justification, or complaints why it is not possible in the vey near future. 

In my Insurance Sales and Moringa health Network Seminars, I make people understand the value of financial "Self-Worth."  If you cost analyze yourself, would you consider yourself worth $50,000 (like what your job says), or do you cost yourself as "PRICELESS" (what your Mom always say =) ).  Your dreams, your needs, your wants are all a part of your "Self-Worth."  Don't sell yourself cheap. 

Now you may ask, "WHAT IF I FAIL?" My answer to this, failure and success are a part of any journey you take.  It is in learning of failure that we succeed. Failure makes you successful in the end. 

It is actually not as hard to figure this out.  The road to Success and Failure is actually the same path, but the difference is whether you decide to stop once you hit FAILURE Dr or keep moving to arrive at SUCCESS Blvd.

One of the success book I've read talked about a man attended a wealth seminar. Before the seminar, he saw one of the presenter and asked him a very important question.  He said, "How can you help me with my finances since I am currently earning $800,000.00 a year?" The presenter asked him "How long have you been earning this income?" The man said, "I've been earning this for at least 5 years now"  The presenter than said, "Great for you, now may I ask, what has been keeping you stuck at about $800,000.00 every year for at least 5 years and not earning more?"  With this question, the man had no answer.  He then went inside the auditorium excited to learn the answer. After the Wealth Seminar, he was so happy on what he learned that day.  He came to the wealth seminar because he felt he could always do more but needed a new direction to take.  In his opinion, he has a "Self-Worth" of not just $800,000.00, but in the Millions. From what I have read, the author of this book did say he accumulated more wealth afterwards. 

My message to you at this point; Everything always reveal itself in due time as long as you "Commit" to It, and "Think Big." Dream on what Success for you looks like, but follow through with action, purpose, and urgency.  You Are A Money Sucess, as long as you believe in it. You know what to do as long as you don't let "BULL CRAP!!" get in the way.   

Again, "You may not reach the stars, but you may hit the moon on the way up!!"

Do You Want To Be Rich!! Now What??

Easier Said than Done!

According to Forbes.Com, there are approximately 1,011 billionaires around the world this year. Most people will never have the chance to see themselves part of the multi-billion dollar crowd such as Bill Gates, Donald Trump, and Carlos Slim Helu (Richest Man In The World).   

Furthermore, this year the World's Billionaires have an average net worth of $3.5 billion, up $500 million in 12 months. Americans account for 40% of the world's billionaires, down from 45% a year ago. The U.S. commands 38% of the collective $3.6 trillion net worth of the world's richest, down from 44% a year ago.

Now, what does this actually say? Its clear that billionaires in the U.S. are quietly slipping while the rest of the world are slowly gaining grounds.  Now, I did not check if there are more millionaires in the U.S. this year than years prior, but I do hope that it is increasing not decreasing. 

So, do you plan to be financially rich?  Do you plan to have enough income before retirement that make you live the rest of your life free of money problems? 

Donald Trump considers Rich as a state of mind.  That as long as you see, feel, and believe yourself as being rich, you are rich.  Robert Kiyosaki, author of Rich Dad Poor Dad believes that if you have enough passive income paying for your cost of living, than you are financially free. Clearly, many millionaires and billionaires have different perspective of what the definition of the word "Rich" really is. 

So, How do we do this?  How do we become financially Independent and be considered Rich?

Well here are a few advices from Already Rich People...

1. Robert Kiyosaki: "The richest people in the world build networks; everyone else is trained to look for work."

2. Donald Trump: Start a business. "Think Big" when you do.

3. Warren Buffett: The world’s most successful investor once said that "The secret of becoming rich was to be greedy when others are fearful and very fearful when others are greedy."

Also, The power of compounding interest goes a long way.

4. Bill Gates, Founder Microsoft: "Start your own company and believe that it has the opportunity to change the world." He started Microsoft with the belief that the company would not stop until every home and office desk had a personal computer.

5.  Andrew Carnegie: "Aim for the highest."

6.  J. Paul Getty: "You must take risks, both with your own money or with borrowed money. Risk taking is essential to business growth." 

7. Steve Jobs, Founder of Apple: I was worth about over a million dollars when I was twenty-three and over ten million dollars when I was twenty-four, and over a hundred million dollars when I was twenty-five and it wasn't that important because I never did it for the money.”

As you can see, every single person on this list became Billionaires and Millionaires by operating their own business.  

Now is it too late?  No, I don't believe it is ever too late to start exploring the world of business. Just Ask Col. Sanders of Kentucky Fried Chicken.  He was in his 70's before someone took notice of his chicken recipe and then becoming a millionaire. I believe that each one of us have the ability, the courage, and the tenacity to confront our biggest fear of "Taking Risk" to follow our dreams of becoming wealthy.   Now what is the alternative, well, not to be rich or wealthy.  Nothing is wrong with that, I assume.  But, since we only have 1 Life to live, isn't it reasonable to go swing for the fence? Isn't it justifiable to agree with Donald Trump when he said "Think Big, since you are thinking anyway." 

Remember, "Your Future depends on what you do now."

Sponsored by Moringa Health Network.  To know more, on how to start your own business with us, contact Erwin Sigua at 775-786-7778. 

The Real Estate Market Will Crash.... Again!!

Now don't get me wrong, most people know me as a forever optimist.  Optimist to the point of waking up everyday singing and telling myself that the Real Estate market is bound to change.  In my opinion, 2008 was a correction, 2009 was a realization, and 2010 was suppose to be the year when things should bottom out and get better.   Here we are, 2011, and prices are still going south.  From the the look of it, we are still not out of the woods.  

There are many signs out there that points to the direction of another Real Estate Crash.  Here are a few:

1. Within the last 2 weeks, CNN has posted blogs of experts stating that we are about to see a double dip housing price correction within this year.  The average price of home are now comparable to 2009 when the price of home hit its all time low since the Real Estate buble burst.

2. MSN.com articles and blogs has predicted that there will be at least 1 million foreclosure that will occur this year.  This adds to the 1.3 million shadow inventory (homes about to be foreclosed) that is currently being held by the banks.  Real Estate experts predicted that it would take 3 to 5 years before the current toxic inventory be wiped away from the banks books.

3. Bank owned and REO homes are often priced 10% to 30% below market value.  With 50% of of the U.S. homes REO servicer  listed by banks such as Wells Fargo, Chase, and Bank Of America, home market value will continue to drop.  With a very large foreclosure inventory, their goal is to let go of homes as fast and efficient as they can (big goof-off are the Robo-signers they hired who foreclosed homes illegally). 

4. Sub Prime Mortgages are no longer the only reason people foreclose on homes; it is now because of lack of jobs, economy downturn, people believing home values are no longer there ( Strategic defaulter: the new in thing with people with good jobs), and divorce.  I've had far too many homes I listed last year with divorce and unemployment written all over therm.

Now where does all of this lead us.  Well, The Great Depression did not completely turn around until the 1950's.  Small Recessions in the 90's and early 2000's may have lasted only 2 or 3 quarters, but the impact lingered at least a couple of years.  There have been talks within the Real Estate profession that this may last 5 to 7 years. But the truth is, nobody really knows.  People were hoping for a "V" shaped recovery where we go down hard and bounce right back.  Others hope we have a more "U" shaped recover where we stay along the bottom for a while and then slowly recover.  The worst we can possibly go for is a "W" shaped Real Estate recovery.  This means we go down hard, go up, then go down hard again. 

I am not a prognosticator of Real Estate, but I do follow Real Estate trends rather carefully since this is one of the businesses I am currently invested in.  Now is the downturn good or bad? Well, It depends who you ask. Investors, buyers, apartment renters, and big developers may approve the downturn as a way to invest and make more money in the future in real estate. The cash flow that they can generate plus the low mortgage rates suites them just fine.  Now, sellers, positive equity owners, mortgage re-financiers, and home owners in general may not like what is going on. Losing value on homes means they are at risk to be "underwater" (loan greater than market value) in the near future.  If underwater homeowners decided to sell their home, their credit will get hit through a short sale. IRS sometimes step in to collect for deficiencies (only on deficiency states) on a short sale which leads homeowners to opt for bankruptcy if the home does not sell and nears foreclosure.  More on this subject on later article.  Such a vicious cycle we currently live in. 

In a nutshell, we may or may not experience another Real Estate Market Crash.  However, if the banking system and other government programs do not start helping current homeowners with their current mortgages, we may see a flood of foreclosure greater than what we have seen. But as I currently look around, the Dam is slowly breaking..

6 Good Reasons why you need to get paid everyday like the Rich!!

Have you ever questioned yourself why you need to live within your means?  Have most financial planner and institution talked about how you should live with the word "budget" in mind?   Are you being paid hourly or a salary that you receive every 2 weeks or monthly?  Than you are definitely not alone.

Most people in the U.S. work as an employee or as self-employed individual.  Whether government entities, huge corporations, private businesses, or the service sectors, we almost have to wait days, weeks, and months in order for us to get paid.  The word "Budget" thus become an important part of our vocabulary as we go through our everyday life.  Now imagine your world where you are receiving a check, bank credit, or cash money at the end of the day, everyday, that is equivalent to what you would normally receive with a paycheck at the end of 2 weeks.  Also imagine if this income everyday that you receive grows, and grows as time passes on.  Now you may ask youself, is this really possible?

I would say to you "Yes" this is possible, but it generally would not involve a person being an employee, salary, or self-employed.  Now there are exceptions such as rich salaried positions such as a CEO of a multi-million dollar company, or highly paid athletes such as Lebron James. You get my drift right?  Most middle-class Americans will probably not fall into this highly paid positions.  Getting back, how do we attain getting paid everyday like the rich does? 

By starting your own business.  

You may ask, What if I fail?  Isn't starting a business risky and expensive?  I would say to this it depends.  A start-up lawn cutting business require more time than money and you may get paid everyday on it.  You may start-up your own franchise business which requires royalties, initial buy-in, and monthly dues that tend to be quite expensive.  So, It does vary depending on the startup business you have your eye on. You may also join a direct business models such as MLM (Multi-Level Marketing) and receive business skills and guidance from members. This form of business require buy-in memberships with product to sell thereafter. Again, whatever you decide on, decide on something atleast.

Why do we need to start our own business?  I'll give you a few 5 good reasons.

1. Time: After a few short years growing your own business, you can buy your own time to spend with whatever you decide to spend it on.
2. Control:  Boss, Managers, Supervisors will be a thing of the past. Sorry, IRS is still on your back even as business owners. However, many tax benefits are enjoyed by the rich not seen by middle class americans.
3. Money: Getting paid everyday beats getting paid once a week, every 2 weeks, monthly, or even yearly.
4. Inflation: As Inflation keeps going up, prices of goods follow. With today's economy, salary hourly wages, and comissions keeps going down, thust inflation affects our dollar spending capacity.
5. No more "budget":  What!! is this real!! No sorry, the rich still do have a budget in mind. however, I would assume it looks much different from yours and mine.  Their budget possibly does not necessarily deal with the everyday "house budget" rather they deal with business operational, asset, liability budget.  So in essence, yeah!.. no more focus on "house budget."
6. Experience: Once you taste earning income everyday, you will never go back to your old job and career no matter what the setback you will experience with owning your own business. 

Again, being in business is not for everyone.  However, for those who does try to swim in this vast and competitive world, the payout in the long run is worth the risk. I believe not owning or controlling your own destiny is alot riskier than any business you may have a chance to develop for yourself.  So, try one out, your future may depend on it.

6 salesman "SECRETS" on selling anything...

                                                           Isn't This A Great First Impression!

With so many literature and personal opinions on how to sell for success, if you ask 10 salespeople they  probably will tell you 10 different things what has worked for them.  However, there are 6 irrefutable "secrets" that salesman would probably hold dear to on how they sell for success. 

Top 6 Countdown....

Number 6:  First Impression goes a long way!

Proper attire, proper store look, proper posture, a nice car are some (not all) key elements on how to sell anything. Imagine the product releases by Apple such as the Iphone and Ipad; doesn't the marketing advertisement, the store, the salesman, the atmophere, the excitement of each product release provide a key first impression on whether you will purchase what they offer the next time around?  With long lines on each product releases by Apple, I definitely believe many have fallen on the company's first impression.

Number 5:  "Product Over Price; No... PRICE over Product"

Now this may be a little controversial to some, but may not be for others.  Many salesman would like to believe that the service they render should validate the price they offer or the price offered by the company they work for.  But in reality, especially in this economy, most consumers are looking for a deal they can agree on or a deal their spouse can agree with.  A salesman's job is to bridge the gap between what the consumer wants and what his company needs. 

Number 4:  Option 1 is good, Option 2 is better, Option 3 is the best....

Most Salesman will not give you just 1 option when trying to sell you a product or service even though that is what you came in for to look at.  In most cases, a salesman's "secret" is to provide atleast 3 options to show you but no more than 5.  More than 5 options creates confusion.  What you will notice is that the option that he would steer you on is the option that may probably land him the most money.  Time is money; the less time a salesman work on a deal, the more money he can make. Again, not every salesman may do this, but please understand that salesman are there to work and try to earn the most money to bring home for himself, his family, and for his livelihood. 

Number 3:  A salesman will make sure you "Need" the product, not just "Want" it. 

A good salesman usually profile you by asking questions about your work, family, and activities.  Armed with that knowledge, a salesman would try to provide examples on how the product works or relate to the customers everyday life. 

Number 2 :  If you call a salesman's office about a product, he or she will make sure to have your personal contact information before you hang up.

Have you ever given your cell phone number, email address, or even your work number to a store and the salesman on the other end said they will check it and will get back to you on it?  This is one of the oldest trick in the book.  In any case, the salesman probably know the product you were looking for have been sold or they do not know what the status is of the product.  By asking your contact info, they can put you on their client list for other products they can offer you at that time.  They can even show their boss the accumulated contact info's they have to prove they have been working very hard for the company. 

Number 1:  A successful salesman #1 motto is "Honesty is the Best Policy"

Believe it or not, most successful salespeople have good hearts and honest on what they sell.  Now the term "successful" is what I am referring to here.  By my definition, these are the people that have stayed with the business for a number of years and have developed a good clientele. By being honest, referrals become easy to come by and product description doesn't change from one customer to another (promotes trust).  Now, is being Honest an actual "secret" or is it a trait?  The truth of the matter is, it is both.  If used wisely, the saying "Honesty is the Best Policy" maybe the greatest secret on selling anything.

More to come on the Psychology of Selling....

Strategic Default? Should You Do It?

I recently talked with a very good friend of mine who I listed a property almost 2 years ago. My friend and his wife are both top tier professionals who make a good living with great income.  Back then I remember how the wife was scared to lose her credit because the home will go through a short sale procedure. The husband urged his wife that this is a smart move financially they are planning to do. Right at their kitchen table I asked them for the reason of selling the property. Their response was that since the home has been underwater (loan greater than home value) for quite some time now, they would rather let it go now, save, rent, and then buy another home within the next few years. Sadly, they were my first Strategic Foreclosure clients.  Since then, many more individuals passed through my company with the thought of letting their home go now and buy another home later at a much lower price. 

My Question is, if you are a homeowner, should you do it too?

Now of course, everyone has different situations that will undoubtedly provide a different response to this question.  But as a Real Estate agent, let me shed some light on what I have seen to those who chose or not choose to do so. 

The Definitely-make-financial-sense-to-do-so indviduals:
I've had a few people that sold homes with me that fit this category.  Many of them are underwater by atleast $100,000 dollars of negative (this is Nevada you know!) equity and in their financial sense it is just plain smart to let go of something with no value.  The questions comes to being, "Why would I keep paying the bank for $300,000 when my home is only worth $150,000."  It is definitely hard to argue with this reasoning especially when you consider that most mortgage payments actually double in value once every payment is calculated.  The $300,000 loan amount after 30-years of payment is actually closer to $600,000 with interest, taxes, and insurance. It sure is hard to argue thier logic if we are plainly talking dollars and cents. 

The I-Love-Our-home-and-too-much-memory-on-this home-individuals:
Now, I believe that most people who jumped in to buy their home typically did not do it for investment purposes. Most of my clients decided that it was time for them to achieve the American Dream of owning a home.  Families, friends, kids, and memories are put into play for years on the home that people bought.  For good or for bad, I do know quite a few people in this category.  Many are emotionally attached with their home plus the promise and obligation to keep paying a debt in their belief is the right thing to do.  The thought of not paying or the thought of a foreclosure under their name seems too stressful and outright embarassing.  And again, the thought of losing a home that their daughter and sons grew up in is too much to bare.   

Now as I have said earlier, different circumstances give different results in a family's decision to do strategic foreclosure. I may never convince one or the other individual for merits of their decisions.  But i do want to share with you this; Strategic Foreclosure is definitely rising.

According to the Las Vegas Sun In Southern Nevada, The 2,591 sales of single-family homes in February were 3.3 percent higher than January and 8.4 percent higher than February 2010, the Greater Las Vegas Association of Realtors reported today. The median price of those homes was $128,000. While up 2.4 percent or $3,000 from January, the price fell 5.7 percent from February 2010.
That downward trend may not stop soon. The median price of new listings was $134,900 in February, up 1.4 percent from January but 10 percent below where it was in February 2010.


According to Reno Gazzette Journal, Washoe County reported 383 sales of existing single-family homes in February, up 6 percent from January and 13 percent from February 2010.

"February was the highest volume in unit sales for a month of February in the history of the MLS," RSAR president Sherrie Cartinella said in a statement.

Median sales price, however, continued its up-and-down trek toward bottom. Washoe County's median price for existing single-family homes was $161,000, up a percent from January but down 5 percent from February last year.

Of course the reason for these increase sales does not necessarily mean an increase in Strategic Foreclosure; but I definitely do feel it contributed to it.  2007 brought about the sub-prime mortgage mess that brought down the biggest banks and wall street institutions and almost totally crash the U.S. economy.  2011 is 5 years from 2007 that last saw the 5-year arm note. The problem I see in this is how would homeowners who have maturing 5-year arm note refinance with negative equity home values?  Most, if not all banks would probably not refinance homes with this situation in Nevada and anywhere else in the United States.  Guess what, many homes who took a 5-year Arm (again for Adjustable Rate Mortgages) will soon face increases in mortgage payments while looking at a bleak U.S. economy.  I know a few people who asked for extensions and have been denied by their loan servicing company.  A work-out for a loan modification was a choice, and many lost their credit score during the process.  With No credit score, an underwater home value, and an increase in mortgage payment, their choice now become to keep on paying, short sale, or do strategic foreclosure and save money until their home is taken by the bank.  A cycle of distress that no one should be in, in my opinion. 

In conclusion, I believe the reason why we still have a downward price trend in both northern and southern Nevada is because there are way too many bank owned forclosed homes entering the real estate market than those who are able to buy.  The shadow inventory (homes that are delinquent, in pre-foreclosure, auctioned, REO) are rapidly increasing which further decrease the price of homes when they are released.  And I bet 1,000.00 many of those homes were let go by teachers, businessmen, doctors, lawyers, retail store owners who decided that it is best to walk away now from the huge house debt and buy themselves the same type of home for a much lower price.

The scary thing is, if Strategic Foreclosure becomes a trend on why people walk away from their home, this could cause a second wave of financial disaster in the US.  Our leaders better find more ways to work with people in keeping their home to avoid a mass exodus of people opting for Strategic Foreclosure.  Lets not repeat the start of 2007. Only time will tell.