Georgia REIA's Final Legislative Report 2007

GaREIA Lobbyist's Final Legislative Report for the 2007 Session of the Georgia General Assembly

Wednesday, June 27, 2007

RE: Legislative Report # 2007-13 [FINAL]

I can’t say for certain that the 2007 Session of the Georgia General Assembly was its longest, but I’d bet $103.00 on it—one dollar for each day. It was a year of breakthroughs, victories and setbacks for GaREIA. Most of all, our presence at the Capitol advanced—our ultimate goal for the next few years.

We were consulted on, and involved with, bills and resolutions more this year than last year, and last’s year’s participation was more than the year before that. We created and submitted our own bill to cure homeowners’ associations abuse of landlords, which soared, and then was grounded [we have another shot at it next session]. And, for the first time, concerning a study committee that was to take up three new lien law bills, GaREIA was appointed to an Advisory Committee—a seat at the table. The resolution didn’t make it before the Legislature adjourned at midnight of the 40th day [12:02 a.m. of the “41st” Legislative Day, if the truth be known, but, who’s counting?], but our appointment presents an opportunity to be involved in the three bills’ markups during the summer, autumn and 2008 Session.

On another front, one of our most worthwhile and successful projects is GaREIA’s Legislative Intern Program, which the organization initiated after the 2005 Session. This year’s intern, Anne Kuhns, a third-year student at Georgia State University Law School, did a remarkably good job. She’s bright, dependable, enthusiastic and always willing to help or to take on an additional chore. She also has a winning personality, and based upon the feedback I received from legislators and staff, people liked her a lot—a good reflection upon GaREIA. I like to think that the program is worthwhile for our interns also. One of the most favorite parts of my job is teaching young persons the politics, personalities, history, physical layout, strategies, tactics and nuances of the Georgia Legislature—as well as exposing a few skeletons in the closets under the Gold Dome. I strongly recommend that GaREIA continue this program.

All in all, a very good year, and, without question, one in which we advanced.
Here are “Selected Bills and Resolutions”—matters of particular importance to GaREIA, whether they passed or not. Following that is the very important “Leftover Bills and Resolutions.” Since we are in the middle of the 2007–2008 Term of the General Assembly, any bill or resolution that was introduced this year [except, of course, those that were passed, defeated or vetoed], remain active, or “leftover,” without having to be refiled.

SELECTED BILLS AND RESOLUTIONS.

House Bill 261. Property owners’ associations; covenants running with the land; changes to limitations on amendments.

This is the first bill that GaREIA has ever originated. It was designed to curb several abuses of landlords by homeowners’ associations that have cropped up and accelerated since homeowners’ associations rights were strengthened by laws passed in the mid-1990s. Most egregiously, current law allows an HOA to ban leasing in a subdivision after an investor buys rental property. As one lawmaker sympathetic to our cause said, “That’s changing the rules after the game has begun.” HB 261 would have restored the law to pre-1994 status, where protections were in place against this and other bad HOA practices.

What’s the hope for the future? Since we are in the middle of the 2007–2008 Term, HB 261 is still alive and can be taken up again next year. The time to prepare and plan for that is now because January, when the 2008 Session begins, is too late. I am very hopeful that GaREIA will continue this fight and its legislative presence. As I told one lawmaker who was sort of sitting on the fence on HB 261, “There are a lot more homeowners than homeowner association officers.” Another avenue for us to explore during the summer is negotiating with those law firms and HOA officers opposed to our bill to try and develop an alternative bill that everyone could live with.

A very hearty and sincere thanks to the many persons, both on and off the Legislative Committee, who worked on this bill.

Senate Bill 115. Residential/General Contractors; revise the licensure procedure. HB 224. State Licensing Board for Residential and General Contractors; change certain provisions.
This law has been on the books since 2004, O.C.G.A. §§ 43-41-1 through 43-41-17, and it will finally kick in on July 1, 2008. These two lengthy and convoluted bills make several changes to the 2004 law, much of it minor, housekeeping or clarifying. However, there are a couple of new provisions:

The 2004 law established two divisions, the “general contractor” and the “residential contractor.” This bill would permit the licensure’s governing board to create further divisions within the general contractor category based upon “financial criteria.”

“Specialty contractors”—e.g., electricians, plumbers, HVAC, telephone, gas, etc., workers [who have their own licensing boards]—would be exempt from this board for non-specialty work incidental to their specialty work where such incidental work does not exceed either $10,000.00 or 25% of the total value of the work—whichever is greater.

Work on the construction or installation of mobile homes is specifically excluded but installation of “industrialized buildings”—those structures constructed from prefabricated parts that are assembled at a worksite and then transported to and secured upon a separately laid foundation—are specifically included. Governor signed May 29th. Effective date: May 29, 2007.

NOTE: No item—except, of course, our HB 261—has generated more emails and calls to me than SB 215 and the entire licensing law. Accordingly, this summer I plan on writing a line-for-line, plain English, nonlegalese analysis of this law which will be sent out to all members, just as this final Legislative Report is being transmitted. At that point, we may find that GaREIA needs to include some amendments to the law in a 2008 Legislative Package.

SB 94. Dispossessory Proceedings; clarify the process for judgments by defaults.
This pro-landlord bill, which GaREIA supported, clarifies two things: 1. When a lease states that a certain fee is nonrefundable, it is not part of the security deposit and it is not included in that portion of Georgia’s landlord-tenant law dealing with security deposits; and 2. If a tenant doesn’t answer a dispossessory warrant, a writ of possession shall issue and—regardless of what Georgia procedural laws may apply to other areas of the law—in landlord-tenant cases, “[t]he court . . . shall not require any further evidence nor hold any hearings and the [landlord] shall be entitled to a verdict and judgment by default.” Governor signed May 24th. Effective date: July 1, 2007.

HB 35. Credit report agency; person request security freeze; provisions. HB 38. Credit report; place security freeze; provisions. HB 130. Identity theft; security freezes; definitions; provisions.

These three bills, of similar natures and language, would provide mechanisms for all consumers to control the distribution of their credit reports by credit reporting agencies, such as Equifax, both with regard to who gets the report or during what time period it is distributed or both. Nominal fees are required for some of this.

GaREIA supports the bills, but has problems with one provision: the turnaround time is too long from when prospective tenants direct an agency to distribute their reports to prospective landlords to when the agency has to send it out. We’ve been engaged in this battle for a while, with ups and downs—including an effort to sneak it, together with our problem language, into another bill on the late afternoon of the last day of the 2007 session.

Subcommittee meetings on these bills are to be scheduled during the summer and autumn.
Senate Resolution 636. Senate Comprehensive Lien Law Study Committee; create.

The importance to GaREIA of this resolution exceeds its subject matter. For the first time, an investors group in Georgia is among those interest groups that have been appointed to an advisory committee. This means that GaREIA from the beginning will sit at the table among Realtors, mortgage bankers, home builders, apartment owners, contractors and others to craft this legislation.

This resolution grows out of SBs 63, 64 and 65, three pending bills filed this year. SBs 63 and 65 would impose informational and accountability tasks upon a contractor hired by a single-family residence; failing to complete these tasks would invalidate liens. SB 64 simply provides an expedited way of dealing with liens that have been wrongly filed.

HB 380. Tax collectors and commissioners; bill or notice of mailing; change certain provisions.
This bill, dealing with penalties for overdue property taxes, provides that a new purchaser for the first year won’t have to pay a onetime 10% penalty or the 1% monthly interest until two months after the tax bill has been forwarded to him or her. Governor signed May 16th. Effective date: July 1, 2007.

SB 114. Real Estate Brokers; criminal convictions; terms/conditions of sentence; provide that certain time periods shall pass; application for licensure.

This bill covers a lot of ground. It increases administrative punishment for real estate appraisers who commit serious or multiple criminal. (During the legislative process, the “appraisers” provisions were appended to the original “brokers” language.) And, a former appraiser who let his or her classification lapse would have to renew it in five years to avoid starting the application process all over again; current laws gives them 10 years.
The bill also allow a Realtor, etc., to talk to the other party represented by another Realtor if the second Realtor doesn’t provide “negotiation services,” in other words, all the second Realtor does is place the property in a multiple service listing.

And, the bill also amends administrative punishment for licensees who commit serious or multiple criminal offenses; amends some continuing education requirements; and eases CE requirements for licensees currently serving in the armed forces. Governor signed May 24th. Effective date: July 1, 2007.

HB 128. State sales and use tax; certain school items; clothing; exemption.
This is this year’s annual tax-free holiday bill. October 4th–7th: energy efficient dishwashers, clothes washers, air conditioners, ceiling fans, fluorescent light bulbs, dehumidifiers, programmable thermostats, refrigerators, doors or windows. August 2nd–5th: includes personal computers, keyboards, PDAs, handheld computers, monitors, other peripheral devices, modems and nonrecreational software. Two rules: price cannot be over $1,500.00 each and the purchase is for noncommercial home or personal use. Governor signed May 18th. Effective date: May 18, 2007.

HB 136. Public policy; contract of insurance; indemnification; provisions.
In a nutshell, this bill would reverse longstanding law by forbidding subcontractors from indemnifying (almost always, by insurance) prime contractors against negligence. Or, as one Georgia appellate case put it, "Public policy is reluctant to cast the burden for negligent actions upon those who are not actually at fault.” [Of course, the prime contractor can always obtain his or her own insurance for their own mistakes]. Governor signed May 18th. Effective date: July 1, 2007.

HB 471. Local government; privately constructed water systems; requiring ownership transfer; prohibit.

This rural bill only applies to local governments and other entities like water-system authorities that are outside the City of Atlanta, the 16-county Metropolitan Atlanta area and many of the other larger cities in the state. It deals with privately constructed water or sewer systems that are not to be connected to a publicly-owned one. The bill forbids the local government or authority to require a transfer of ownership as a condition for issuance or approval of local permits. The bill has a sunset provision, January 1, 2009, so look for it to come up next year and the years after that. [See the following related bill—which applies to municipalities only.] Governor signed May 24th. Effective date: May 24, 2007.

HB 247. Local Government; water and sewer systems; change certain provisions.
Under current law, a city is authorized to charge a resident for the operation of the city’s water system, whether that particular resident uses it or not [i.e., the resident uses a well]. This bill would allow—under certain circumstances relating to the size of the city and other factors—such resident to opt out of paying for a service he or she isn’t using. Governor signed May 30th. Effective date: July 1, 2007.

HB 383. Georgia Condominium Act; define terms; provisions.

This complicated bill makes fundamental changes to condominium law, primarily as a result of the proliferation of multi-use [residence, retail, office, etc.] construction. First, under current law, where a city, county, etc., requires a certificate of occupancy, the condo contract must state that the seller is required to deliver the CO to the buyer before closing. This bill eliminates both the requirement for the contract and the delivery. The reason? By way of example: Developer plans to install Corian countertops in all residential units; Mr. & Mrs. Rich New-Condo-Owner want marble. Avoiding the pre-closing CO will eliminate the developer’s having to install the Corian before closing, just to have it ripped out for the marble installation after closing.
Second, existing law requires, with some exceptions, that all condominium owners share equally in assessments, pursuant to a predetermined formula. This bill, essentially, sets up residential and retail sub-categories to more specifically tailor payments to use.

Third, for new condos, the bill will excuse most common area assessments from the developer and from owners of unsold or unoccupied units for up to the first two years of the condo’s existence. Again, there are some exceptions. For example, if the cost of fire damage exceeds insurance coverage, these excused owners would have to contribute to that deficiency.
Finally, the bill provides that, in certain circumstances, horizontal construction of “phased-in” condos will be protected against local authorities’ zoning, etc., rules for traditional subdivisions. Governor signed May 29th. Effective date: July 1, 2007.

SB 246. Buildings; advisory committee on industrialized buildings; appointment/vacancies; change composition.

This bill deals with the regulation of prefab, formed or assembled parts of a building that, once brought to the final site for assembly, cannot be disassembled for inspection. Georgia law terms this “industrialized building”; this does not include mobile homes. SB 246 tweaks the membership of this construction industry’s 11-person governing board. Of most note to our membership, the existing “One member shall be from the industrialized building industry,” will now be “One member shall be from the residential industrialized building industry [emphasis supplied].” All 11 are appointed by the Georgia Commissioner of Community Affairs, currently Mike Beatty, from Jackson County, in the northeast part of the state. It would be good to have at least one or two of those board members as members of GaREIA. Governor signed May 18th. Effective date: July 1, 2007.

HB 30. Consolidated housing authorities; two or more municipalities; change certain provisions.
Under existing law, two or more cities are allowed to consolidate their housing authorities into one, called, not surprisingly, a “consolidated housing authority [CHA].” And, when they do, soon after that, the individual housing authorities of the included cities ceases to exist. HB 30 clarifies that, when the cities do this, the CHA can be a brand-new entity or just an existing one from one of the cities.

At first blush, this may not appear to be a matter of strong interest to GaREIA members. I include it only as a heads-up to our members interested in Marietta and Cobb County politics because its original author is Rep. Steve “Thunder” Tumlin, from Marietta [this bill started out as the unsuccessful HB 777, and was slipped into HB 30 by a Senate committee about a week before the session ended]. Tumlin was, from our perspective, on the bad side of the entire “Marietta v. landlords” debacle of the last couple of years and its continuing aftermath. I should add that, over the years, I have found Tumlin reasonable to work with and thoughtful. Governor signed May 18th. Effective date: July 1, 2007.

LEFTOVER BILLS AND A HOUSE RESOLUTION.

The following are in numerical order. The captions of items of particular importance to GaREIA are UPPERCASED. Notice is given at the end where a bill has passed one chamber, but not the other.

HOUSE BILLS

HB 121. CORPORATIONS; SUMMONS OF GARNISHMENT; CHANGE PROVISIONS. Authored by the chairman of House Judiciary Committee, this bill would slightly loosen the procedure for serving some garnishments upon a corporation.

HB 138. Construction contracts; required insurance coverage. This complicated bill would provide verifiability, accountability and consequences for obligations to timely obtain and pay for insurance required in construction contracts up and down the line.

HB 196. Consumer reporting agencies; identical report to consumer and creditor; require. This bill would require consumer credit reporting agencies to timely send to a consumer an identical copy of the consumer’s credit report that it sends to a potential creditor.

HB 292 AND SB 41. CIVIL PRACTICE; PROVIDE FOR SERVICE UPON PERSONS RESIDING IN GATED/SECURED COMMUNITIES; STATE-WIDE REGISTRATION OF PERMANENT PROCESS SERVERS. These bills, which started out virtually identical, would, for the first time in Georgia, specifically create procedures for the serving of a lawsuit in gated communities. They also would allow existing civilian process servers to be set up statewide. I was surprised that neither of these bills passed, and I strongly anticipate their being back next year.

HB 338. SHERIFF’S SERVICES; INCREASE FEES FOR SERVICE IN CIVIL CASES. This bill would have raised the sheriff’s fee for, among several other services, serving dispossessory warrants from the current $25.00 to $100.00. We played a major role in killing this bill, but, even after that, there was an 11th hour attempt to revive it on the last day of the session—which we also successfully jumped on. Watch out for this one next year.


HB 339. Tax executions; tax collectors and commissioners; collection of costs; provide. This bill would add, in effect, a collection fee to the cost of satisfying the execution.

HB 386. Superior court fees; instrument recordings; provide additional fees. This bill [which had SB 14 piggybacked on it] passed the House and Senate but was vetoed. The House part would have added nominal charges for the clerk to record deed, mortgage, etc., satisfactions, cancellations, releases and cross-indexes, to which the Governor did not object. But, the Senate part would have extended certain deadlines to recording costs and the finalization of a statewide “uniform automated information system for real and personal property records” from the already distant existing 2012 to 2014, and the Governor objected to this. “Extending a program that is not set to expire for another five years even further into the future,” his Constitutionally-mandated veto message said, “undermines the concept of a legislative sunset.” I’ll bet you we’ll see this bill back next year under another number, with the “2014” struck. Governor VETOED May 30th.

HB 422. Specialized land transactions; minimum amount for liens; provide. This bill would preclude a condo association from foreclosing on a unit for failure to pay assessments, fines and the costs of unit repair until the lien reaches $2,000.00.

HB 450. Sales and use tax; maintenance contracting; provisions. This bill would reduce sales tax liability on equipment for non-Georgian subcontractors doing maintenance or rehab work; it does not cover original construction.

HB 479. Abatement; county or municipal ordinances; unfit buildings; change certain provisions. This bill would add “graffiti” to the existing justifications for a Superior Court judge to order closing, repair or demolition of a dilapidated building, e.g., crack house, that is declared a nuisance. However, if the sole basis for concluding that the building is a nuisance is graffiti, only repair can be ordered.

HB 503. Georgia Asbestos Safety Act; contractors; revise certain provisions. A licensed asbestos-removal contractor contracts with a property owner or operator of a business or residential property to remove asbestos from the property. This bill would clarify that an employee of the owner or operator is not [also] an employee of the contractor.

HB 564. DEPOSIT ACCOUNT FRAUD; INSUFFICIENT FUNDS; STOP PAYMENT; INCLUDE ACT. GaREIA had a hand in drafting this bill, which eases the requirements for getting a bad check criminal warrant: 1. A landlord, who often gets a check in the mail or a drop box, wouldn’t have to “witness” the tenant’s signing it; 2. Under certain circumstances, a warrant could be issued for a “Stop Payment” check; and 3. The requirement that there be written or printed on the check the name, address and phone number or check cashing number of the payor would be eliminated for started checks.
HB 579. Landlord liens; definitions; provisions. Mr. Smith buys a mobile/manufactured home financed by Jones Bank and places it, as a tenant, on Mr. Doe’s property. After a year or so, Tenant Smith skips out, so Jones Bank is left to foreclose—whenever it gets around to it—and Owner Doe, after going through the nail and mail dispossessory process, is left with a trailer on his land. This bill would allow Owner Doe to collect a storage fee—which Jones Bank would have to pay until the trailer is removed.

HB 642. LOCAL GOVERNMENT; RESIDENTIAL RENTAL PROPERTY; REQUIRE REGISTRATION. This bill involves existing law that was central to the long battle between the City of Marietta and landlords. Existing law forbids a county or municipality from requiring “the registration of residential rental property.” This bill would reverse that, and allow the local government to register. GaREIA had a strong hand in defeating this bill, but I wouldn’t be surprised to see it resurface next year. We need to remain involved in this issue during the summer and autumn, as well as vigil next legislative session.

HB 713. Water, gas and other services; limited liens for unpaid charges; change certain provisions. Under existing law, utility companies are forbidden from placing a lien upon a new owner’s property for an old owner’s unpaid bills, including sewerage service. This bill specifically would add that sewerage service “includes without limitation storm-water runoff.”

HB 800. GEORGIA PROPERTY OWNERS’ ASSOCIATION ACT; LOT OWNERS’ OBLIGATIONS; PROVISIONS. Here, verbatim, is the entire bill: “If a board of directors fails to comply with any requirement of this article [Article 6 – Property Owners' Associations], the articles of incorporation of the association, or the bylaws adopted by the association, then the lot owners´ obligations for the payment of any assessment for common expenses shall be suspended until such time as the board of directors brings itself back into compliance.” ’Nuff said.

HB 825. SAVANNAH, CITY OF; EVICTED TENANTS PROPERTY; PROVIDE CERTAIN PROCEDURES. This local bill, which was introduced four days before the 2007 session finally ended and is bad for GaREIA, would affect just Savannah: Where there has been “nail and mail” eviction notice upon a Savannah tenant, this bill would require the landlord, upon eviction, to place the tenant’s property in storage for at least 45 days. Costs for storage can be deducted from the security deposit and, if the tenant doesn’t claim the property in 60 days, the landlord can sell the property to “recoup his or her costs” for storage.
But, this local bill seems to run afoul of the Georgia Constitutional provision that “[l]aws of a general nature” have to apply statewide. No “local law” is allowed where “provision has been made by an existing general law.” So, while the legal argument is not foolproof, this bill faces uphill battles both on its subject matter, which GaREIA will strongly battle, and, as I see it, its constitutionality.

HOUSE RESOLUTIONS

HR 421. Real estate transfer tax and intangible recording tax; increases; authorize – Constitutional amendment. This resolution would, upon voters’ approval in November 2008, allow the Legislature to increase real estate transfer taxes and intangible recording taxes and to direct the increased funds to a Georgia Housing Trust Fund to assist low and moderate income Georgians get affordable housing. If this resolution passes [by ⅔ vote of both houses, because it calls for an amendment of the Constitution], the matter would be put to the voters in November 2008. I wouldn’t lose any sleep over this one.

SENATE BILLS

SB 8. Property Tax Assessments; appeals; payment of interest; change certain provisions. First scenario: Property owner appeals his tax assessment. The county agency and the Superior Court agree with him, so he’s entitled to a refund of, or credit for, the overpayment plus interest. The interest is $200. But, he’ll only get back $150.00 in interest from the county because that’s the most existing law says it has to pay him. Second scenario: Same facts, except he loses, so, in addition to the tax, he owes the county $200.00 in interest. If this bill passes next year, the most he would have to pay in interest is $150.00. This bill passed the Senate.

SB 41. See HB 292, this section.

SB 58. Taxation; payment of taxes where property lies in more than one county; repeal certain provisions. Under current law, when property overlaps over more than one county, the owner can pay property to one county, and the counties can divvy it up later. This bill would repeal that law.

SB 63. Property; provide for definition of single-family residential real estate; exemption to certain liens; SB 64. Liens; wrong real estate; provide for a special designation; and SB 65. Property; single family residential real estate; contract to perform work; provide requirements. See the blurb on Senate Resolution 636 in “Selected Bills and Resolutions,” above.

SB 159. Homestead Exemptions; change date of filing applications. This bill would extend the deadline in any given calendar year for filing for homestead exemption from the existing March 1st to “the date for the closing of the books for the return of taxes for the calendar year,” in a particular county.

SB 217. Property Owners’ Association; shall have standing as a party to bring action to enforce covenants. Next-door neighbors Sam and Bill live in a subdivision that has a homeowners’ association. Bill builds a fence which, as it turns out, encroaches by a foot onto Sam’s property. But, Sam doesn’t care and doesn’t plan to sue, so that’s the end of that. Under this bill, the HOA would have the right to sue Bill in most circumstances over the encroachment.

SB 271. Taxes; change the period of time within which a tax deed shall ripen by prescription. Under existing law, where a former owner has lost property by failure to pay taxes, even if there is no notice or insufficient or improper notice with regard to a subsequent sale, if the former owner fails to attempt to redeem within four years of the sale under virtually every circumstance, that right to redeem is lost forever. This bill would have reduced the four years to one year for all tax deeds executed on or after the bill’s effective date. This bill passed the Senate.

SB 291. Ad Valorem Taxation; provide annual hearings on property taxes by county/municipal governing authorities/independent school systems. Before a local governing authority could set property taxes in a given year, this bill would require a minimum of two public meetings at varied, convenient times. And, such meetings would have to be preceded by public advertisement of clear, detailed language of the dollars, increased dollars, etc., involved.

SB 334. STATE LICENSING BOARD OF HOME INSPECTORS; CREATE. GaREIA defeated a similar bill last year. This one would attempt to go further. Among other bad leftover provisions from the 2006 bill, this bill would prohibit an inspector from repairing a home which he or she inspected in the past 12 months. Also, of course, this bill would establish still another licensing board, staff, bureaucracy, etc. This bill was filed on the next to last day of the session, so it has had no airing whatsoever. In fact, SB 334 was the last Senate bill filed [there were 892 bills filed in the House].

I want to heartily thank all of you who put so much time, effort and thought into the 2007 Session for GaREIA’s membership. I especially extend my sincerest and heartfelt thanks and appreciation to the extraordinarily dedicated handful of stalwarts on the Legislative and PAC Committees. Sometimes, you guys make this work fun.

As always, I welcome your comments, questions and suggestions.
Ronald P. Jayson

Cracking the Subprime Code

"Subprime Success Secrets!"
Click Here to Register for the Call

On Monday the June 25th we will send out the Telephone Number and Access Code to everyone registered for the call via email.

From humble beginnings in as the oldest of 4 children living in a 1 bedroom trailer, to homeless single mother of 3, Rachel Young has certainly seen her share of hard times. When she decided to start investing, she lived in the basement of a home belonging to a family friend. Her drive, determination, and spectacular marketing abilities brought her "out of the ashes" and led her to being one of Atlanta’s most successful real estate investors in single family homes.

Rachel’s willingness to teach her strategies and marketing techniques to others has made her a much sought-after business woman in the real estate investing community. Her company, Big Cheese Marketing, has skyrocketed through the ranks of other marketing businesses. She is an investor as well as an entrepreneur.

You can learn more about Rachel and Big Cheese Marketing by visiting her online at www.bigcheesemarketing.com.
Recently on the Best Seller List for her New Book: Subprime Real Estate Profits

I can give you THREE MILLION REASONS why your dream can be a reality – in the same amount of time it takes to watch a football game, a NASCAR race, or your favorite movie!

How many times have you said:

• “If I had known Microsoft was gonna be this big, I’d have bought a MILLION shares in the 80’s!"
• “I wish I had known that the real estate market would change so dramatically! I would have gotten in (or out) sooner!”
• “If I had only known that Google would be so successful, I would have bought stock in it!”

We’ve all got things we look back on in our lives and say “I wish I had known…”(For me it was that loser I dated in high school. YIKES!)

But what if you KNEW that a revolution was taking place in an industry so many know about but that so few know what to do about?

YOU DO! I’m talking about the subprime market! You’ve seen it on the news almost daily. You’ve heard about it on the radio. One subprime lender after another is forced to declare bankruptcy. Homeowner after homeowner is forced to watch their house go into foreclosure due to high mortgage payments and adjustable interest rates.In fact, there are an estimated 3,000,000 (that’s 3 MILLION) families who will go into foreclosure this year alone as victims of the subprime lending industry.Just think of all the folks who are struggling to scrape by who haven’t even defaulted on their loans yet, but who need help desperately!?!

But what if we flipped the script a little bit…let’s talk about YOU...

Maybe you’re a seasoned investor, looking to stay on the razor’s edge and blow your competition out of the water.

You’re a smart business owner and know that if you don’t continue your education that your business is in jeopardy of losing out to another.

Maybe you’re new to real estate investing and have yet to find that one magic strategy that will allow you to make the income you deserve without sacrificing your integrity.

Maybe you’re just tired of that J-O-B and are looking for a fresh change (one without a demanding boss!)

Whatever your reason for reading this letter, you know you want to make a change and deposit wheelbarrows full of cash into your bank account doing it.

So what’dya do?

Whatever your reason for reading this letter, you know you want to make a change and deposit wheelbarrows full of cash into your bank account doing it.

1. You try to blaze your own trail, reinventing the wheel as you go, becoming the pioneer real estate investor in your area. (Remember, pioneers come home full of arrows. And when you blaze your own trail, expect to get poison ivy!)

2. You do nothing. There’s always tomorrow (it IS another day after all – or so I hear). One day you wake up, twenty years have passed, and nothing’s changed.

3. You grab life by the horns and ride that sucker ‘til it bucks you off or you’ve tamed it! That means taking advantage of the phenomenal opportunities offered to you.

Go to www.MAREIphoneU.com for more on information abour Rachel Youngs secrets to cracking the subprime code on MAREI's upcoming teleconferenc.

Can Investors market properties for their friends with out a license

In the past year several real estate companies have filed suit against web sites where people with a property to sell or rent has posted information (like advertising in the newspaper). State real estate commissions are filing suit against these sites, as the sites are not regulated by real estate brokerage licenses.

So my question is can real estate investors legaly market a property for sale (that a friend may have) for free with out have a contract of their own to purchase or control the property?

sites like rehablist.com or property marketing on yahoo groups may be next?

Read the recent article from inman news:

Rentals Web site files lawsuit over licensing requirement

State says online display of rental ads requires real estate license

Wednesday, June 13, 2007By Glenn Roberts Jr.Inman News

The operators of a rental-search Web site are suing the Missouri Real Estate Commission over its insistence that the site shut down for lack of a real estate brokerage license to display online real estate information.

The state's Attorney General's Office stated in a court filing that the company's business activities "constitute the practice of a real estate broker ... and/or as a real estate salesperson" under state law and seeks to dismiss the complaint.

Similar lawsuits by other companies have opposed similar regulations in California and New Hampshire. Property advertising Web site ForSaleByOwner.com won its legal dispute against the California Department of Real Estate when a U.S. District Court ruled in November 2004 that state law violated the First Amendment in requiring Web sites to obtain a broker's license in order to display for-sale real estate information.

The Institute for Justice, a libertarian public-interest firm, supported that case and a similar lawsuit filed by ZeroBrokerFees.com against the New Hampshire Real Estate Commission and New Hampshire Attorney General's Office.

Edward F. Walsh IV, a lawyer representing Kansas City Premier Apartments Inc. who has experience in litigation involving regulatory boards, said, "We think this is the latest in a turn of cases that deal with the issue of where you draw the line between the lawful distribution of information and content while balancing public protection interests. We do believe that what we're doing here is no different in principle from what was being litigated in the ForSaleByOwner.com case."

While some may take a cynical view about the motivations for the Missouri real estate regulatory agency to insist on licensure to advertise property information online, Walsh said he believes it has more to do with technological innovations outpacing legal changes. "I think clearly this is one of the challenges that all public regulators have -- staying current with new developments in technology. The laws on the books are not in line with where the technological realities are today."

While several other Web sites display rental property information that can be viewed by consumers in Missouri, Walsh said, "We're aware of no enforcement action" by the state Real Estate Commission against those other sites.

In December 2006, Kansas City Premier Apartments received a cease-and-desist letter because the company does not have a real estate broker's license, and in March the company received a more formal letter that threatened "both criminal and civil action" against the company if it did not cease operations.

The lawsuit filed against the Missouri Real Estate Commission and its members and executive director charges that the state's licensure requirements "are in violation of the state and federal constitutional protections," including free speech rights.

Janet Carder, executive director for the commission, could not be reached for comment Tuesday. The commission consists of seven voting members, six of whom must have at least 10 years of experience as real estate brokers.

Kansas City Premier Apartments contracts with local rental owners and managers to advertise information about available apartment, loft and house rentals on the Web site. The company accepts a fee based on successful rental transactions that are based on users' use of the Web site, and does not offer to sell, exchange, purchase, rent or lease real estate.

"At no time is a fee paid or conditioned upon (the company) participating in the negotiating of the lease terms or rates," the lawsuit states.

In its response, the state Attorney General's Office states that a complaint was filed with the Missouri Real Estate Commission against the rentals Web site on May 25, 2004, alleging that a site operator "was engaged in the unlicensed practice of real estate," and the office asks the court to find that the company's practices violate state law and seeks "an injunction, restraining order, and/or other order ... to enjoin (the company) from engaging in conduct that constitutes the practice of a real estate broker and/or real estate salesperson, or in the alternative dismiss (the lawsuit)."

Ryan Gran, vice president for Kansas City Premier Apartments, said operating a property rental Web site "is an entirely different level versus a real estate agent," and some real estate agents actually refer prospective renters to the Web site.

In Missouri it takes two years to qualify to become a broker, he said, which would require the small company to hire a broker. "We spent a lot of time and pride in this. We are not willing to just roll over," Gran said.
***
Send tips or a Letter to the Editor to glenn@inman.com, or call (510) 658-9252, ext. 137.

Real Estate Feels Pinch From Tougher Lending Rules

Guest perspective: Sales slide, rates rise, economy sputters
Wednesday, June 13, 2007
By John Burns

Spooked by declining home prices and rising delinquencies/foreclosures, lenders are now becoming more restrictive when issuing residential loans, approaching levels not seen since the post-S&L crisis of the early 1990s. The Federal Reserve's most recent Survey of Senior Loan Officers indicates that roughly 16 percent of respondents tightened credit standards in the first quarter of 2007.

Our grading system of the economy and the housing market is a "bell curve" model, with statistics at an all-time high receiving an "A," statistics near the long-term average receiving a "C," and the worst times ever receiving an "F." In this grading system, it is OK to be a "C" student.

Here is our current report card:

Economic Growth: C

Expansion within the U.S. economy is slowing, as evidenced by the recent GDP growth revision to 0.6 percent from 1.3 percent, the lowest quarterly increase since the fourth quarter of 2002. However, May ushered in stronger-than-expected job data, providing a glimmer of optimism. Year-over-year retail sales and personal income both declined during the month of April, along with core CPI.

Leading Indicators: C-

While the U.S. stock market continues to rally, marginal corporate profit growth, a flat yield curve and high oil prices all point towards moderate economic expansion. All of the major stock market indices continued to climb in May, with the Dow, S&P 500 and Wilshire 5000 reaching new all-time highs. Although investors have shunned home builder stocks during the recent stock market rally, the S&P Super Homebuilding Index improved for the second consecutive month, and is currently down only 7 percent year-over-year. Corporate profits for the first quarter of 2007 rose 6.3 percent year-over-year. The yield curve is currently flat, as both 10-year and 2-year Treasuries stand at 4.84 percent. Oil prices continue to remain high and are unlikely to decline in the coming months, as the peak summer driving season is now upon us.

Mortgage Rates: C+

Mortgage rates increased during the month of May, but continue to remain near historical lows. The 30-year fixed mortgage rate increased to 6.42 percent in May, while one-year adjustable rates increased to 5.57 percent. Adjustable-rate loans continue to decrease as a percentage of total loans, falling to 18 percent of total loan activity in the last week of May, which is less than half of the 35 percent figure witnessed during the peak of the housing market in 2005.

Consumer Behavior: C+

High gas prices and a tough housing market are having a minimal impact on consumers' perceptions of the overall economy, as both Consumer Confidence and Consumer Sentiment increased in May. That said, the current stock market rally and buoyant job market are likely outweighing consumers' pessimistic concerns about the economy.

Existing-Home Market: C

The existing-home market continues to suffer, as April sales declined to 5.99 million annualized units, equating to a sequential drop of 3 percent and year-over-year drop of roughly 11 percent. The NAR continues to revise downward its outlook for 2007 existing sales and prices. Specifically, year-over-year existing sales are now forecast to decline 5 percent in 2007, with prices falling 1.3 percent over the same period. We believe the NAR sales data is overstated, and their 2007 estimates are wildly optimistic. Inventory levels, a vital indicator in today's oversupplied market, rose to 8.4 months in April, representing a 38 percent year-over-year increase. Alarmingly, inventory levels now stand at their highest level since August 1992.

New-Home Market: D+

In April, new-home sales increased 16 percent sequentially to an annual rate of 981,000, representing the biggest one-month rise in sales since April 1993. We don't believe these sales volumes are accurate, given what has happened to our clients' businesses. The one factor propping up sales is that the number of communities is up substantially over the last few years. There is no doubt that sales per community have dropped significantly. The rosy Census data conflicts with the downward NAHB index trend, as well as the order trends reported by the public builders.

Housing Supply: D+

Housing starts increased in April, though permits (a leading indicator) witnessed their most precipitous sequential decline since February 1990. Starts increased to a seasonally adjusted annual rate of 1.53 million in April, representing a sequential increase of roughly 2.5 percent, and a 16 percent year-over-year decline. Building permits declined roughly 9 percent sequentially in April, and are now down 28 percent year-over-year to a seasonally adjusted annual rate of 1.06 million.

John Burns is the founder of Real Estate Consulting in Irvine, Calif., which monitors changes in real estate market conditions and provides consulting services, including strategic planning, market research and financial analysis. He can be reached at jbrec@realestateconsulting.com.
***
What's your opinion? Send your Letter to the Editor to opinion@inman.com.
Copyright 2007 John Burns

Mississippi Gulf Coast Affordable Housing

Mississippi Gulf Coast Affordable Housing RE Investment Guide May 2007

Real Estate Investment Criteria

• Positive Cash Flow


• Appreciation Rate (15.9%)


• Job Growth


• Population Growth


• Affordability ($114,900)


• Zoning (Casinos)


• Lower risk towards the bottom of the market


• Buy & Hold (Profit OK)


• GO Zone


• Location


• Timing


• Rental Market


• Commercial Market


• Great for 1st time & seasoned investors!

The Mississippi Gulf Coast

• Hurricane Katrina devestated the area with the loss of 64,120 homes as well as over 47,000 rentals.


• Expanded Casino Zoning to Foster Recovery (extended inland 800’)
  –In Biloxi alone, casinos have acquired 125 acres since Hurricane Katrina
  –Record breaking casino revenues for 6 of the last 7 months; 2 are all time records
  –Area rivals Atlantic City… and then some


• The GO Zone is helping too


• Mississippi wants you there

The InvestmentOpportunity…

• Due to the present housing crisis combined with the huge casino expansion taking place, the MS Gulf Coast is expected to be one of the hottest markets in the country.


• There arequality stick built homes at the lowest price available in the entire Gulf Coast Region. (and we have realtors in the area who are marketing them)


• The realtors in the area will get you pre-approved for a construction loan, acquire your lot, assign a builder, find the lowest priced insurance and refer you to a property management company or help you sell your property.

Why Hancock County / Bay St. Louis / Bayside Park?

• Most affordable lots within densely populated areas
• Infrastructure in place - including sewer
• The area suffered the greatest loss of rental properties
• Convenient to major thoroughfares I-10 & US 90
• Convenient to 26 miles of spectacular beaches
• Close to major employers, development projects and newly created casino sites as a result of dramatic zoning changes
• Centrally located in western edge of Gulfport/Biloxi MSA and neighboring eastern edge of New Orleans MSA
• Hancock County is rumored to be the future home of a new international airport
• It’s important to know… Bayside Park is NOT in a flood zone

Our Realtor's Diligence Process

• Identify regional areas meeting investment critera
• Research the area first-hand!!!
• Make government contacts
• Locate lowest priced lots in major growth and/or populated areas
• Determine what to build with affordability in mind
• Select several capable local builders
• Secure investor construction financing
• Select the areas best real estate agents and property management companies
• Analyze potential investor exit strategies (Flip vs. Buy & Hold)
• Create marketing material and campaigns
• Provide investors with contact information and resource material for individual Due Diligence
• Implement land acquisition
• Implement order processing system
• Assign and train client transaction coordinator
• Continually monitor and adjust for optimal results
  

Notable Recovery Press…

• MONEY Magazine
  –Hurricanes come and go, but coastal markets only go up
  –A University of Florida natural disaster and impact on home values study determined “people aren't really scared off” by infrequent occurrence.
• The Journal of South Mississippi Business
  –Hancock recovery goes from 0 to 60 (Bay St. Louis bridge reopened in May 2007)
  lWLOK / abc channel 13
  –Governor announced an India pipe manufacturer will make its first U.S. venture in Hancock County. The state offered a $9 million incentive package.
• SunHerald
  –Biloxi Mayor Holloway attends Southern Gaming Summit and shared with its attendees… “Biloxi is the engine and the fuel is the 800 foot onshore gaming legislation passed by the legislature and signed into law by the governor.”

Area Facts & Assumptions…

• We feel there are two possibilities
  –The timing is perfect
  –Buying now will be slightly ahead of the curve
• When compared to other areas, such as New Orleans, the MS Coast is on a much faster recovery path.
• Land and property values are already beginning to rise
• Significant population and job opportunities have begun to notably rise as of fall 2006
• Casino expansion and dramatic zoning changes are primary considerations for anticipated appreciation and rental increases (2006 appreciation was 15.9%)
• The MS Gulf Coast is comprised of (3) MSA regions with a combined population of 455,959
• FEMA deadline for full temporary housing assistance is August 31, 2007. After this date, arrangements will need to be made to purchase FEMA trailer or begin sharing expenses
• There are approximately 25,000 FEMA trailers still occupied of the initial 45,000
• Bayside Park elevations are between 11’ and 16’. It’s important to know that this area is NOT in a flood zone
• Bayside Park is comprised of some 3,500 single family lots
• Bayside Park is in a transition period with strict zoning code enforcement… no more trailers will be allowed
• In our opinion, this is a minimum 3 to 5 year hold investment

Casinos & NewDevelopment Projects

• Virtually all area casinos have been rebuilt or reopened. Several have even announced expansion plans
• We are aware of 6 new casino projects in various stages of development (That’s about a 50% increase!)
• There are numerous single-family, condominium, marina and commercial projects that have been proposed or approved
• However, what appears to be lacking is an emphasis on affordable housing!

MS Gulf Coast is Not Just About Casinos…

• The Mississippi I-10 corridor is also known for it’s aerospace technology with such major employers as…
  –NASA’s Stennis Space Center
  –Boeing-Rocketdyne Propulsion and Power facility
• It’s one of the most significant shrimping and fishing communities in the world
• Naval and private ship building

Bayside Park Exclusive Floorplans…

• The Oakwood: 2 bed, 2 bath, 1117 sq ft: $114,900
• The Orchid: 3 bed, 2 bath, 1311 sq ft: $124,900
• The Beachwood: 3 bed, 2.5 bath, 1536 sq ft: $169,900

Projected Income and Expense Statement

Purchase Price (The Orchid) $124,900 (Appraised at $140,000 - Built In Equity)
Estimated Closing Costs $ 4,000
Estimated Construction Interest $ 2,500
Total Investment $131,400

10% Down 20% Down
Mortgage Amount $118,260 $105,120
Monthly Income $ 1,100 $ 1,100

Estimated Annual Expenses
Mortgage Payment (IO, 7.25%) $ 8,456 $ 7,517
Property Taxes $ 1,200 $ 1,200

Management Fee (10%) $ 1,320 $ 1,320
Insurance (Includes Flood Ins.) $ 1,900 $ 1,900
Total Expenses $ 12,876 $ 11,937

Estimated Net Annual Profit (Loss) $ 324 $ 1,263 (positive cash flow)


Summary

• The MS Gulf Coast has made tremendous headway in the recovery process
• Population and job growth
• Tremendous need for affordable housing and rental properties
• Casino expansion alone makes this area worthy of investment consideration
• FEMA programs unwinding
• Positive Cash Flow
• Strong Appreciation and potential
• Anticipated rental rate increases to pre-Katrina levels
• Lowest priced lots
• Good Location
• Good Timing
• GREAT Floorplans
• Good 3 – 5 Year “Buy & Hold” Investor Opportunity

Forward-Looking Statements

Sections of this material contain forward-looking statements that are based on expectations, estimates, projections and assumptions. Words such as “expect,” “anticipate,” “plan,” “believe,” “scheduled,” “estimate” and variations of these words and similar expressions are intended to identify forward-looking statements, which include but are not limited to projections of revenue, earnings, cash flow, appreciation, etc. These statements are not guarantees of future performance and involve certain risks and uncertainties. Actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including and without limitation:

–Changes in real estate market conditions;
–Changes in rental markets;
–Unforeseen changes in interest rates, insurance, and taxes.
–Natural and unnatural disasters.

Anyone considering the purchase of real estate as an investment should consult their own advisor and perform their own due diligence.

If you would like to learn more about investing in Gulf Coast areas and would like to work with a Realtor who knows the area first hand, Would rather have positive or at least break even propositions while your property appreciates in value over 3 to 5 years, and would like to be a part of the rebuilding process. While you are at it, take some time to do some research on "go zone" - for full time investors you may be able to write off your profit for 15 years!

Please let us know a little more about yourself by filling out this informational form.

Thanks

Kim

Fractional-Deed Co-Ownership: Advanced Real Estate Strategy

Fractional-Deed Co-Ownership enables investors to acquire an interest in high-quality properties. These properties are large, professionally managed, and require significantly less hands-on involvement than sole-owned real estate.

Think about Properties like Strip Malls with big box anchors like Best Buy or Hy-Vee that have very long leases, low turn over, and triple net leases. Or Luxury Apartments with upper scale retirement communities or upper scale college studen housing that have high occupance rates and very few vacancies. Or Medical Office Buildings with specialized properties that have low turn over and long term leases. Think very safe investments.

Fractional-Deed Real Estate conforms to IRS standards for a 1031 Exchange, making them a solid solution to identifying the like-kind property for an Exchange. So when an investor needs to 1031 funds quickly, they can buy into a Co-Ownership Property quickly and easily with companies that sell these properties.

It's an opportunity for individuals to own quality real estate while stepping away from day-to-day property management and deferring capital gains taxes.

Why would an investor want a Co-Ownership Situation?

Fractional-Deed co-ownership is ideal for knowledgeable real estate buyers tired of personally managing property day-to-day, but still seeking the benefits of real estate ownership.

Sole-owned real estate and co-ownership properties offer the same tax benefits, wealth preservation, cash flow, and long-term appreciation potential. Co-ownership properties, however, eliminate the headaches of day-to-day management: all management duties are overseen by independent, third-party national firms.

A group of prospective purchasers is identified and organized under a co-ownership structure, and as co-owners are able to purchase a more substantial property than they would as individuals. Each co-owner receives a fractional fee title ownership deed and title report at closing.

The co-owners exit the co-ownership agreement when they unanimously elect to sell the property. Co-owners may also sell their individual interest at any time, either to another co-owner or to a buyer outside of their co-ownership agreement. At this point, the co-owner may either pay taxes on the profit or execute a 1031 Exchange and defer capital gains tax.
Co-ownership agreements include other aspects of the IRS guidelines and enable all participants to benefit from a structured operational agreement.

Key Benefits of Co-Ownership

• Each co-owner has the same rights as an individual owner.


• Fee-simple deed at closing


• Title insurance coverage


• Pro-rata share of all net monthly income, tax benefits, and appreciation.


• Deferred capital gains taxes


• Purchases can be made to fit exact-dollar-amount 1031 Exchange requirements.


• Third-party property and asset management with reporting responsibilities to each co-owner.


• Monthly distribution checks (typically) and an annual property operating statement.


• Economically feasible to acquire a co-ownership interest in multiple properties, decreasing risk through diversification

Institutional-Quality Co-Ownership Properties

• Wide variety of Class-A replacement properties.


• Maximum flexibility in transaction size and property type diversification.


• High-quality properties with more reliable monthly cash flow.


• 1031 Exchange Buyers preserve 100% of their equity by deferring taxes.


• Increased depreciation potential.


• Third-party due diligence reports.


• The opportunity to consolidate several smaller properties into one larger property.


• The opportunity to acquire an interest in a substantially larger property and to use 60%-70% leverage to enhance future overall returns.


• The opportunity to buy an interest in a larger, better-located, higher-quality, or anchored property than a smaller purchase could provide on its own.

Our Co-Ownership Process

Our co-ownership process is straightforward. As a real estate principal, we acquire top-quality properties that meet our stringent acquisition criteria. We acquire these institutional-quality properties from the nation's top brokerage firms, REITS, and other institutions.

We then offer co-ownership in these properties exclusively through Licensed Real Estate Brokers/Agents. Their clients are typically individual real estate owners seeking a quality, alternative asset choice for a 1031 Exchange.

A 1031 Exchange Accommodator facilitates the 1031 Exchange Process. SCI never takes possession of any 1031 Exchange funds. Instead, the buyer's 1031 Exchange Accommodator transfers 1031 Exchange funds directly to the property purchase escrow account.

Upon close, each co-owner is delivered a fractional fee title ownership deed and title report. From there forward, all net monthly cash flow is paid directly to co-owners by the institutional-grade, third-party property management company overseeing the property. We has no control over co-owners' funds. Also, we never dilute co-owner funds for any cash flow, depreciation, or net profit upon disposition.

We are so confident in the quality of our institutional-quality, fractional-deed properties that we buy our own significant fractional interest in each, standing right alongside our co-owners.

Would you like to learn more about

Co-Ownership - Fractional-Deed - Tenants in Common?

To buy in you do need to have

• Good Credit
• A Minimum of $200,000 down for a 30% to 40% down payment
• And can expect returns of 7% to 8%

I am working with a large company with opportunites all over the country for investors to buy into. They believe in their properties and hold a large percentage of each property in their own portfolio. And if you have something that you think might be a property for this company to consider purchasing, please tell me more about yourself by clicking here to fill out an informational form and our expert on co-ownership will contact you..