February 1987 I just received a telephone call. It was from a person who had rejected an offer of mine to buy his property. He'd been holding out for a higher price and now that all his alternatives had disappeared, he was finally ready to accept my offer, made in mid November. The trouble was, I no longer had any interest in his property because it no longer made any sense. He'd failed to recognize that the implementation of the new tax law has changed not only the appeal of some properties, it has also changed their ECONOMIC VALUE.

Continue reading “It’s Too Late For Tears . . .”

January 1987 When George Orwell wrote '1984' he missed by 3 years. Even he couldn't guess the degree to which government in the United States is going to control the lives of its FREE citizenry. 1986 is going to be a landmark year from which individual liberty's decline will be measured in much the same way that 1967 is the year that the decline in the purchasing power of the American dollar is measured. Consider these tidbits:

Continue reading “Big Brother Is Watching . . .”

December 1986 By the time you receive this letter you'll have less than 60 days in which to do everything necessary to minimize your tax bill for 1986 and 87! I'm doing all I can to alert you to possibilities while there's still time for you to act. Re-read your old CommonWealth Letters from July 1983 and 85 plus those I've written since July 1986. In all of these I've given you some ideas to help you optimize your financial situation. Here are some 1-liners to get you started. Bear in mind that what you do depends upon whether you expect to pay MORE or LESS taxes as a result of the new tax act. And keep things into some sort of perspective. Remember that some of the changes such as consumer interest and real estate rental tax shelter losses will still be 65% deductible against other income in 1987.

Continue reading “The Count-down Has Started . . .”

October 1986 Remember the good old days? You bought a house using multiple mortgages to get 100% financing. You got the owner to carry back the financing for as much as possible of the purchase price by offering to pay high retail prices and high interest rates, and you willingly paid the resulting negative cash flows. Why? Because you'd found this terrific secret to wealth, LEVERAGE. Combined with INFLATION and government subsidies in the form of TAX WRITE-OFFS, you couldn't miss. Millions of people made millions of paper dollars using this fail-safe technique that they learned from the various minstrels who wandered from investment club to investment club and across the TV screen on a continuous cycle.

Continue reading “It’s A Whole New Ball Game . . .”

September 1986 The Congress, suddenly confronted with accountability for its decisions over the past terms, has abandoned statesmanship in favor of full employement - for itself - after the coming election. In the process, they've managed to create a Tax Recession. Responsible business leaders, faced with massive uncertainties generated by the various tax proposals, have elected to play it safe. Hence we have under-used manufacturing capacity, under-employed skilled labor, under-invested cash reserves, under-developed high tech industry all of which have created our under-achieving economy. And they keep calling this a period of recovery.

Continue reading “Is This Real Estate’s Watershed Year?”

August 1986 I think Calvin Cooledge came up with that expression. If he didn't, he should have. In this mid-summer of 1986 our world is being changed. We'll need to change with it! This month's letter will try to point the way. First, let's take a look at the investment landscape to see what confronts us. The Senate and House may argue over some of the ways to raise our tax burden, but it seems clear to me that tax shelter promoters and investors are going to take a bath. So will those who hold long term to get favorable long term capital gains. And those who bought with high leverage in anticipation of a lot of appreciation. And those who 'pulled equity out' with resultant negative cash flows.

Continue reading “The Business Of Business Is Business . . .”

July 1986 Since August of 1983 I've been telling subscribers about the impending revision in the tax law. In spite of the political maneuvering and all the interim proposals, it seems clear that real estate is going to be the whipping boy selected to bear the brunt of coming changes. More particularly, real estate INVESTORS will find themselves paying more and enjoying it less once the final votes are counted. The only thing that isn't clear is WHEN the ax will fall and precisely upon whom - and how hard.

Continue reading “Is Your Cup Half Full Or Half Empty? No 1”

June 1986 Americans have found a new national pastime - going to court to settle their differences. And the trend is on the upswing. A generation ago a person could expect to live out his entire life without the need for a court appearance. Now the reverse is more the rule. It will be the exception in this generation for a person not to either sue or be sued at least once.

Continue reading “Litigation – The American Cancer . . .”

May 1986 Almost 10 years ago this month I held a little 2 hour symposium for a handfull of Realtors. I'd been working on an idea for a seminar which would show ways to invest in single family houses and I wanted to try it out. I'd previously written an article on the same subject and this seemed a logical extension of that article. My remise was so simple that it seemed odd that everyone hadn't already recognized it. In a few words, I wanted to teach people that they could buy houses with less skill, knowledge and cash than any other investment. In order to find true financial independence, all they had to do was to make sure that the houses they bought could be rented for at least enough to pay for the mortgage payments, taxes and insurance on a regular basis and eventually they could have an estate valued in the millions.

Continue reading “The Spring Harvest Season Has Started . . .”

April 1986 The three little pigs used to sing that song. They continued to sing it right up to the time that the wolf huffed and puffed and blew their house down. There's a moral in that story. There's another moral in Aesop's fable about the boy who cried WOLF. While Disney made the point that one should heed the warnings of impending danger or prepare to suffer the consequences, Aesop counseled his readers of the hazards of warning others of imaginary dangers lest they become blase. In both instances the warnings didn't achieve the desired defensive response from the listeners, and they consequently paid a penalty.

Continue reading “Who’s Afraid Of The Big Bad Wolf?”