Lately I’ve been quiet - too quiet - about all the news out of Washington, and its impact on real estate investors.  Nobody else is telling you how all of this will effect you as investors, so I guess that job falls to me again.

You really need to understand what’s going on, and the real effect it will have on you.  Here are a few examples:

• Unemployment -  Fewer jobs directly translates into two huge problems:  More foreclosures, and more people who are motivated to sell their homes.  Both of these things directly result in lower real estate values and thus negatively impacts your potential to be a success in the real estate investing business.  High unemployment means lower opportunity for real estate investors.

• Higher Taxes - The Obama administration has proposed an array of new taxes in the budget they proposed earlier this week, and the effects will be very bad.  Higher taxes mean less disposable income for “average” Americans who would normally be your tenants and buyers, but currently can’t afford to do so.  Even more importantly, higher taxes mean less money in the hands of the very people who can do the most to reduce the epidemic of unemployment in America - small business owners.  Every additional dollar in taxes paid by small business owners is another dollar that can not be used to create new jobs.

• Capital Availability - During the state of the union address, Obama trumpeted his call for giving $30 billion to smaller banks to fund small business loans.  But this ignores the fundamental problem:  Small business owners (like me and maybe you too) can’t afford the risk of taking on more debt in the current environment, because this administration’s activist economic policies have been pushed so quickly and to such extremes that it’s impossible for us to make an informed analysis about the state of the economy at any time in the near future.  The problem is not that there is no money to borrow, and it is not that interest rates are too high (they’re not).  The problem is that small business owners have every reason to fear that Obama’s policies will do the same thing to our economy that Carter’s did.  Obama is trying very hard to change the rules of our economy - such as by taking over car companies and directly controlling the amount of money being paid to employees of other private companies - and this makes it a very scary and confusing environment in which to operate for small business owners.  And few small business owners are going to be willing to take on the burden of greater debt in an environment in which the “rules” are being shifted by the government on what seems to be a daily basis.

Remember, my friend:  You must begin to think of yourself as a BUSINESS OWNER rather than an individual.  Regardless of whether your real estate business is a corporation, LLC or even a sole proprietorship, you are in business for yourself, and thus YOU are the target of the socialist policies Obama is pushing.  It doesn’t even matter if you’ve not yet completed your first real estate transaction:  You are still a business person whose future prosperity will, to a large degree, be caught in the crossfire of the foolish economic policies being pushed upon us right now.

It’s time to stand up and claim the rights we have as Americans.  Forget about party affiliations or any of the labels that are so casually thrown around.  The issue we face at present is that Obama (who is a serious left-wing radical and is neither a Democrat nor Republican if judged by historical standards) has absolutely no regard for the way his policies effect regular Americans.  He talks a good line… and then attacks us all in the policies he endorses.

Don’t ignore the news you hear each day.  There’s a good reason that a recent Bloomberg survey found that an overwhelming number of investors (77%) consider Obama to be opposed to the interests of business people.  And you are a business person, regardless of whether you’re just getting started on the road to real estate success, or if you’ve been in the game for years.

This is no longer about Obama.  He’s clearly demonstrated that he’s in way over his head.  This is about you and me as Americans, and demanding that the government begin to treat us with respect.  We’re just not going to take their garbage any more.  We can’t afford to.

Your comments and thoughts are welcomed below.  Thank you for reading http://realestate.BryanEllis.com.

I saw a really interesting summary of the current state of the economy today at the Tech Ronin blog. While I disagree with several of the points made in that post, I think the analysis is fundamentally reasonable and well informed.