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We Are Concerned About The Real Estate Market – Part II – Yahoo Finance

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Hedge funds and banking institutions may already be feeling the pressure to attempt to contain the losses that are piling up (source: bloomberg).

An extended decline in the global markets will continue to place pressure on institutional financial markets, banks, hedge funds, and other traditional lending and investment firms.  Investors will start to pull investment capital away from risk (out of the markets and funds) and may expose some of these larger institutions’ excessive leverage and risk exposure in the process.

This is almost exactly what happened with Bernie Madoff when his firm, Bernard L. Madoff Investment Securities, collapsed in December 2008.  As long as there was no pressure on his firm from clients pulling out capital or asking too many questions, he was allowed to continue running his Ponzi scheme.  Once investors started pulling capital out of the firm and questioning the transactions/reports, it became evident that it was all a house of cards and would come crashing down quickly.

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If larger investment firms and hedge funds are attempting to “buy the dip” at this point in time, we believe they are making a grave mistake.  We believe the downside risks associated with the Covid-19 virus event are just starting to unfold and the collateral damage that may come from this massive global shutdown that is currently taking place will be unprecedented.  We don’t believe there has been anything like this happening in any recent history – even WWII pales in comparison to this event.

News is starting to hit the wires about large investment firms and Real Estate investment companies sounding the alarm. The fear is evident in the short content of a news article.

“Loan repayment demands are likely to escalate on a systemic level, triggering a domino effect of borrower defaults that will swiftly and severely impact the broad range of stakeholders in the entire real estate market, including property and homeowners, landlords, developers, hotel operators, and their respective tenants and employees,” he wrote.

Just take look at the foreclosures in the major cities starting to spike in the maps below. This was before the virus closed down most businesses, and everyone losing their jobs. Give the fact that 70% or more of the world lives pay-check to pay-check, foreclosures and real estate values are likely to plummet lower to an extreme similar to how overpriced they are now.

I have talked about his in some presentations, and in videos in the past how real estate is grossly overvalued and when the music stops, prices will tumble. Huge opportunities for those who can preserve their capital until the recession matures enough will be able to buy real estate, businesses, and equipment for pennies on the dollar, but this will take another 1-2 years from now I imagine, but it will be great for those with money on hand when things get ugly.

<h3 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Current Los Angeles Foreclosure Map
(Source: Zillow.com)
” data-reactid=”20″>Current Los Angeles Foreclosure Map
(Source: Zillow.com)

Current San Francisco Foreclosure Map

Current New York Foreclosure Map

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Many of you may remember my Crunching Numbers article from just a week ago where I attempted to model what I believe would be the likely outcome of US GDP over the next 5+ years?&nbsp; Well, it now appears others are following up with their own predictions for US GDP.&nbsp;&nbsp; Based on some of the expectations within this Bloomberg article, my predictions pale in comparison to these comments.&nbsp; Source: https://www.bloomberg.com” data-reactid=”75″>Many of you may remember my Crunching Numbers article from just a week ago where I attempted to model what I believe would be the likely outcome of US GDP over the next 5+ years?  Well, it now appears others are following up with their own predictions for US GDP.   Based on some of the expectations within this Bloomberg article, my predictions pale in comparison to these comments.  Source: https://www.bloomberg.com

Now, let’s try to be realistic about how this entire process is likely to take place.  We know the economy will find a base (at some point) and attempt to recover from this virus event.  The question is what does that base look like and where is the bottom?

We won’t really know where the bottom is in the global markets until most of the unknowns have been processed, most of the collateral damage has been identified and processed, and consumers realize the bottom is in sight.  At that point, there is a real chance that the global markets will begin a recovery process that may eventually push to new all-time highs.

What we’re concerned about right now is the Q1 and Q2 economic activity and how that relates to consumer markets, credit markets, existing business enterprises and the potential collateral damage to hard assets like homes, commercial real estate and other foundations of wealth.  We believe the first few dominos of this event will be the collapse of jobs, earnings, and consumer spending.  The longer the global stays in a mostly shutdown economic environment, the greater the risks these critical numbers will implode – possibly taking with it the rest of the economy.

We believe the suspension of Foreclosures for a potential 12 month period may not reduce the total number of foreclosures across the US, we believe it may compound the problem.  The suspension effort is designed to help people stay in their homes if their incomes become threatened or lost.  But the reality is that a Foreclosure suspension will simply start to build larger and larger numbers of properties in foreclosure (waiting for the suspension to be lifted) while home prices potentially collapse.

We’ll dig into more data in Part III of this article and attempt to illustrate the data we believe will point to a clearer picture of how all of this may unfold in the near future.

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for short-term swing traders.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Visit my&nbsp;ETF Wealth Building Newsletter&nbsp;and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.” data-reactid=”82″>Visit my ETF Wealth Building Newsletter and if you like what I offer, and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Chris Vermeulen
www.TheTechnicalTraders.com
” data-reactid=”83″>Chris Vermeulen
www.TheTechnicalTraders.com

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”84″>This article was originally posted on FX Empire

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Waterdown home listed for $2M offers 'rural-style living' – Hamilton Spectator

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#HamOntHouseHunt is a regular feature looking at houses for sale in the Hamilton area market. Have a tip? Email us at fhewitt@torstar.ca.

Price $1,999,900



Barn

The fully functional barn located on the property of 694 Centre Rd. in Waterdown.




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Kitchen

The kitchen of 694 Centre Rd. in Waterdown.






Primary Suite

The primary bedroom of 694 Centre Rd. in Waterdown.




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Deck

The back deck of 694 Centre Rd. in Waterdown.




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Former HGTV star slapped with $10 million fine and jail time for real estate fraud – Fortune

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Back when mortgage rates and home prices were more reasonable and manageable, homeowners invested in fixer-upper properties and made them their own. Now these types of projects aren’t as popular. But in the early-to-mid-2010s, HGTV shows including Fixer Upper, Love It or List It, and Flip It to Win It were all the rage as viewers binge-watched dilapidated homes transform into dream properties.

But as it turns out, one former HGTV star’s house-flipping show was masking major real estate fraud. On Tuesday, Charles “Todd” Hill, was sentenced to four years in jail and ordered to pay back nearly $10 million to his victims following his conviction. Los Gatos, Calif.–based Hill, 58, was the star of HGTV show Flip It to Win It, which aired in 2013 and featured Hill and his team purchasing dilapidated homes and fixing them up. Hill then sold them for a profit.

“Some see the huge amount of money in Silicon Valley real estate as a business opportunity,” Santa Clara County District Attorney Jeff Rosen said in a statement. “Others, unfortunately, see it as a criminal opportunity—and we will hold those people strictly accountable.”

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What did Hill do?

According to the indictment shared with Fortune, the accusations against Hill happened between 2012 and 2014, around the time his show (which lasted just one season) began. The indictment shows 10 counts of grand theft of personal property exceeding $950,000; three counts of embezzlement; and one count of diversion of construction funds. Hill could not be reached by Fortune to comment on the indictment, conviction, or sentencing.

Hill was convicted last year of the multiple fraud schemes, including scams that happened before his show aired. This included a Ponzi scheme with evidence showing that Hill had spent laundered money on a rented apartment in San Francisco, hotels, vacations, and luxury cars, according to a press release from the Santa Clara County District Attorney’s Office. HGTV did not respond to requests for comment from Fortune ahead of publication.

“To hide the theft, he created false balance sheets and got loans using fraudulent information,” according to the district attorney’s office. In another case, Hill diverted construction money for personal use. But one of the strangest accounts came from an investor who had poured $250,000 into a property he wanted Hill to remodel. 

Instead, during a tour of the home, the investor “found it to be a burnt-down shell with no work done on it.”

After the district attorney’s investigation, Hill was indicted in November 2019 and in September 2023 admitted his guilt and was convicted by plea of grand theft against all of his victims. He’ll have to pay restitution of more than $9.4 million and serve 10 years on probation.

Victims who spoke at Tuesday’s hearing said they’re still reeling from the financial and professional damages from the fraud, according to the district attorney’s office.

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Botched home sale costs Winnipeg man his right to sell real estate in Manitoba – CBC.ca

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A Winnipeg man’s registration as a real estate salesman has been cancelled after a family vacated their home on a tight deadline for a sale that never went through, then changed brokerages and, months later, got $60,000 less for their house than what they expected when they moved out.

A Manitoba Securities Commission panel found Reginald Wayne Kehler engaged in professional misconduct and conduct unbecoming a registrant when he signed a document on behalf of sellers without their knowledge, reduced the listing price of a home without their approval, and didn’t tell them for nearly a month that a potential buyer hadn’t paid a promised $100,000 deposit.

The sellers, identified as D.R. and P.R. in the panel decision released Wednesday, were awarded $10,394 from the real estate reimbursement fund. Kehler was ordered to pay $12,075 to cover costs of the investigation and hearing.

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The sellers were a military family who had to move in 2020 after the husband was posted to Ottawa.

They chose Kehler as their listing agent, because he had helped them find the home when they moved to Winnipeg in 2018, and they had a good relationship with him, the panel’s decision says.

They  listed their house in May and on June 15, 2020, accepted an offer of $570,000 with possession on July 15. A deposit of $100,000 was to be paid within 72 hours of acceptance of the offer.

Kehler was the salesperson for both the buyer and the sellers — but the sellers say he never told them that.

A form that indicated the sellers knew he was also representing the buyer, dated June 15, 2020, was filed.

While it appeared to be signed with the sellers’ names, they said they didn’t see it until March 2021. One of the two wasn’t even in Winnipeg on June 15.

“Kehler, in his interview with commission staff, acknowledges that the sellers never signed this document — we note that the purported signatures on the form look nothing like the actual signatures of the sellers on other documents,” the decision says.

Kehler told commission staff he’d been authorized to sign on the sellers’ behalf, which they denied. The panel found them more believable.

Once the deal was made, the sellers, believing they had just a month before the buyer would take possession of their home, quickly packed up and prepared to move with their two young children.

Buyer never made deposit

Meanwhile, the buyer hadn’t made the $100,000 deposit before the deadline — but Kehler didn’t tell the sellers.

Kehler told commission staff that was because he thought the deposit was still coming, and he didn’t want to cause more stress for the sellers.

On July 10, just five days before the buyer was to take possession and the day before the family was leaving Winnipeg, the sellers spoke to Kehler — but he still didn’t tell them the deposit hadn’t been paid.

Kehler “said everything was fine,” according to the decision.

It wasn’t until the evening of July 13, when the family arrived in Toronto on their way to Ottawa and just 36 hours before the scheduled closing, that Kehler told them he’d never received the deposit.

Eventually, they received $4,000 of the deposit, but the sale of the house never closed. The sellers scrambled to extend the insurance on their old home and make sure they continued to pay the utility bills, the decision says.

Home relisted

Kehler then recommended they relist the home, and it went back on the market at $574,900.

On Aug. 10, 2020, Kehler recommended the price be reduced to $569,900. Instead, the seller said he should reduce the price to $567,900.

But when the seller looked at the online listing on Aug. 22, it was listed at $564,900.

The sellers also asked Kehler about maintaining the property, since they were no longer in Winnipeg. He agreed he would, but friends ended up going and mowing the lawn, the decision says.

The sellers asked Kehler and his brokerage about what could be done to “make things right,” the decision says, but they never received any responses.

On Sept. 5, they hired a new brokerage to sell the home. Under the new real estate salesman, they accepted an offer on Dec. 13, and closed the deal Jan. 2, 2021, receiving $507,500 for the home.

Kehler’s actions were “contrary to the best interests of the public” and undermined “public confidence in the real estate industry,” the decision says.

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