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Realty411 part2


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Reaching Investors, Entrepreneurs and Real Estate Providers around the Globe, Realty411 & Real Estate Wealth magazine is a free print and online resource guide developed to assist investors in the …

Reaching Investors, Entrepreneurs and Real Estate Providers around the Globe, Realty411 & Real Estate Wealth magazine is a free print and online resource guide developed to assist investors in the acquisition, management and growth of their real estate portfolios.

The magazine, which features two different covers, each focusing on alternate marketing strategies, is published by investors who own properties around the nation. The publishers have been landlords since 1993. Our company also owns and and operate numerous blogs as well as many online social media groups. Google us for more information.

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  • 1. 411 Print • Online • | Vol. 4 • No. 2 • 2012 A Resource Guide for Investors TERICA KINDRED Founder & CEO of From Local to Global Learn to Invest Outside Your Backyard to Accelerate Cashflow
  • 2. Secret #7 - How do I Make Money?There are several exit strategies possiblewith a note. National REIA elects Tim Norris1. Settlement – borrower to settle at largediscount to 2012 Board of Directors2. Re-sale Re-sell note to a third partyinvestor3. Modification – Creating long term C ongratulations to Tim Norris, an investor and president of the National Real Estate Insurance Group and Affin- ity Group Management, for his recent appointment to the Na-ROI tional REIA’s Board of Directors. Norris continues his com-4. Deed in Lieu of – Taking ownership of mitment of service to the National REIA, he is athe property former board member of the Cincinnati REIA.5. Foreclosures – Creating leverage The National REIA (Real Estate Investor’s Asso-6. Sell the property – Sell, refinance or ciation) is a 501(c) 6 trade association made up ofshort sale investment clubs throughout the United States. The interests of ap- proximately 40,000 members are represented by the National REIA. If you are looking for the best way to One of the changes that Norris is excited about is the implementation of localinvest with returns of over 12% then this chapters within the organization, which he feels will help drive memberships intois for you. Notes can mature at a much the organization. Realty411/reWealth magazine is a member of the Santa Barbarahigher rate. Asset Ventures doesn’t promise you ex- REIA, a club affiliate of the National REIA.traordinary returns each and every time;however, there have been returns at over100% or more in some cases. Retire in Style, Here’s How pg. 17 from where they grew up,” DannenfeldtIf you want to learn more or invest in said. “So we feed into locations that havenotes, please contact us. Feel free to visit other company-managed property. Some that kind of cultural bias where then we canour website at tenants become homeowners in a lease-to- keep people with us for the long-term andOr, if you still prefer the personal touch, own scenario. also attract their family members into ourplease feel free to contact our office for “It’s traditional in the areas that we do system as well.”a free consultation on all our services at rental properties that it’s very rare for peo- For more information, please visit online:855-798-1411. ple to move more than a few blocks away Want to Make a Fortune in Notes? We have the Blueprint for Success sset entures LLC (855) 798-1411
  • 3. Buy, Hold & Rent in ClevelandM eet Sean Whalen, communities, and this greatly by Isaac Newkirk III the CEO of BH&R aided its transition. The area is (Buy, Hold & now one of the most expensive in the business and through traditional Rent) Properties in Cleveland and Whalen’s advertising. He firmly believes in thein Cleveland, Ohio. He started career was born. necessity of thinking outside the box duehis company three years ago, He says the market in to the economy becoming increasinglyostensibly to take advantage of Cleveland has definitely leveled smaller and the market becoming global.the market downturn, but he’s off, as there was no bubble to The properties of BH&R are turn-key; theno rookie. Whalen has been burst in the area, as happened investors buy, BH&R re-habs the propertyinvolved in real estate for 20 years. in so many other markets (including Los from top to bottom, and then, they adver- He grew up in a depressed area of Angeles, San Francisco, and New York). tise for tenants. From there, the in-houseCleveland. His family eventually moved, All of his investors are from outside the property management component of hisbut his dad maintained the management area, most from outside the country (e.g. firm takes over (continuing to provide forof the property they owned (and lived in) Canada, China, Australia). Rather than the property as if it has never been sold).and eventually deeded the property to him. selling to a potential residential customer, Essentially it’s a worry-free, hands-freeWhalen decided to maintain his residence Whalen specializes in selling to investors operation for the investor.there and work on the property. It was a (typically they buy more than one prop- In years past, BH&R had done substan-fortuitous decision as the neighborhood erty, he says). tial business with the government throughbegan to transition with the influx of artists He gets his customers the old fashioned its Section 8 Housing Program. Thatand new restaurants. Whalen points to the way: by word of mouth from having represents a much smaller segment of theirfact that the neighborhood had distinct previously done a good job for a customer.boundaries that set it apart from other He has a lot of relationships with affiliates Continued on pg. 42 True Wealth is Created by Holding Property Long Term We offer completely re-habbed 1 and 2 family homes in Northeast Ohio. Home range from $50,000 - $75,000 bringing in rent from $700 - $1,100 Enjoy a HUGE return on your investment We manage properties We have 20 years experience 3Refer a Buyer and Make $2,000! To learn more about us and view our inventory, visit or call PAGE 26 • 2012
  • 4. Find Real Deals, pg. 18 them, you’ve got their undivid- Terica teaches how to Invest Out of State, pg. 15 ed attention and they are readythere is a strong element of for your solution to their need. What I’ve learned in real your money, but you have thetiming involved when locating Investor Tip: Pick up a estate is that the only way you benefits of the entire asset. It’smotivated sellers. The most ef- “cheapy” dedicated cell phone learn is when you lose. And so a gold mine.fective way of getting this as- exclusively for the purpose or I would say, ride the backs ofpect of timing to work for you your motivated seller market- other people so that you can Question: What are your goalsis through consistent marketing. ing. Place this phone’s num- shorten your losses. for 2012?Direct mail, classified advertis- ber in all of your ads and use Terica: My personal goal foring (both online and off) and it nowhere else. When it rings, Question: For as long as I can this year is to remain healthy.websites are the tools of the you’ll know... game on! remember, the key to personal Professionally, I want to con-trade. Use them all. Regardless In summary, a real deal de- wealth has always been real tinue making an impact in theof the “silver bullet” that was fined is a property that meets estate. Is that still the case? lives of the middle class inves-just promoted by the last guru your criteria and a seller that Terica: I think so. I think it lies tor by helping them build realthat came to town, it’s still a will meet your terms.  By in the diversification. When you estate portfolios that get themnumbers game. The more mar- knowing, and sticking to, your compare stocks to real estate, out of the rat race.keting mediums working, the property criteria and minimum the returns are slower, but right I want to convert all of the ten-better. terms, finding deals isn’t so dif- now, you’re able to get double ants we have into home ownersStep 4 - Answer the phone. ficult. Take it from someone that digit returns secured, and the so they can build a legacy forSeems simple enough, but it’s has transformed their investing tax shelter aspect [of real es- their families. I would like tothis step that’s most frequent- business (0 to 60+ deals) in the tate], plus you have leverage, continue to expand into morely missed. There are many last eighteen months adhering so you don’t have to use all markets, thus creating newschools of thought on how an to this wisdom. jobs, revitalizing more commu-investor should receive incom- It’s amazing once you know nities and doing my part to helping calls, but in my book there’s exactly what you’re looking for fastest growing real estate in- America rebound from this de-only one way. Answer the phone and where to find it how much vesting podcast on iTunes. Visit pression.when they call you. There’s no more often it appears. To your www.EpicProfessionals.combetter time to talk with a moti- success! for more information and to re- To reach Terica Kindred, prin-vated seller than when they call trieve his free real estate invest- cipal of Out Estate Investments,you. Because they called at a Matt Theriault is an author, ing course “How to Do Deals please call: 866-488-1820 ortime when it was convenient for entrepreneur and host of the — No Money Required.” email Tkindred@outestate.comClosing Loans & Opening Doors Since 1960 We specialize in* 3 Investment Properties 3 Up to 10 Financed Properties Allowed 3 Credit Scores, 620 or higher 3 Direct Fannie Mae Service/Seller Please Contact Us for More Information Ph. 901.598.9458 Address:3500-188th Street SW,#121,Lynnwood,WA 98037 Stephen Bighaus Loan Officer Ric Jason Gosser Loan Officer With Great Service & FAST APPROVALS: Individual MLS #112825 TN MLO-57558 Individual MLS #120413 TN MLO-57820 We’ll take care of you!! WA MLO-11285 WA MLO-120413
  • 5. Why Dallas / Ft. Worth is One of the Best Metros in the US by Tom WilsonI Are there markets that able housing of top 20 cities ($116,000 don’t recommend being a have weathered the down- median Q3 2011) real estate investor…un- turn well, are superior in •Central location in the United States at- less you have a well-de- many of the parameters tracts companies desiring time zone and fined strategy, quantitative above, and have had rela- distribution competitive advantagesgoals and are dedicated to go by tively calmer waters dur- •DFW airport is the third busiest in thethe numbers and not by unsup- ing these past few tumultu- worldported advice or emotions. ous years? •One of lowest cost of living major MSAs, My engineering training and Indeed, my experience yet above average household income30 years of experience manag- Tom Wilson in more than 1,800 unit •Highest millionaire growth rate in theing high-tech profit centers in transactions, over 35 years United StatesSilicon Valley taught me how to analyze for has revealed that Dallas / Fort Worth is one •Strong rental market (95% occupancy Q4the best return on investment in any mar- of the best real estate investment markets 2011 for single family homes)ket. in the United States; that is why I chose •Very landlord friendly Today, the principles of analysis remain it for most of my personal portfolio long Yes, the national economy crisis hasthe same. Anyone can do it, however, one term holdings. affected even DFW, but not significantlyneeds to be very disciplined and educated The strengths of Dallas / Ft. Worth are: compared to other MSAs. Texas is the sec-about the submarkets and products, or ride •Business and financial capital of the ond most populous state, so there are in-the coattails of someone who is. South. deed many home foreclosures, especially The primary parameters for selecting •The highest rent per invested dollar for a since there is such low housing costs andthe best investment markets are: major economic center in the United States, consequently a high percentage of govern-•Rent to purchase price ratio and therefore, the highest cash flow ment backed loans, but in spite of this, the•Population growth and inward migration •One of the lowest risk and safest harbors Texas delinquency and foreclosure rate is•Employment growth and business climate in the United States for real estate relatively low compared to other states.•Housing affordability •Lowest housing price decline from peak; I believe that these factors are another•Location only US single-digit depreciation metro strong indicator of whether a metro has hit•Cost of living •Fourth largest and one of the fastest grow- bottom yet, and that many cities and states•Rental market ing MSAs (Metropolitan Statistical Area) have farther to go, so selecting the lowest•Current and projected market conditions in the United States. Projected to double risk metro is as important as seeking high Now that speculative investing for fast population to 12 million by 2030 current cash flow.profit has gone the way of the last super- •Broad-based economy that has had double During the last two decades the appre-model, the wise investor is focused on cash the employment rate growth of the United ciation average was about 5% per year.flowing assets and safe harbors. States during the past decade With a five to one leverage with 80% loans •No. 1 ranked business climate in the Unit- investors got a 25% return on their down ed States payments, in addition to the high cash •No state in- flow. Historically, the last economies to come tax slow down, are the first to go back up. •Leading I don’t know when DFW will start ap- MSA for cor- preciating significantly again, but I believe porate head- it will be before many other areas, and our quarter relo- window of opportunity to invest optimally cations and in any leading area may be shorter than we expansions think. •Second lead- In this economy, I prefer to invest in ing MSA in homes over commercial and multifamily US for For- products because homes have more liquid- tune 500 cor- ity, are generally lower risk, appreciate porate rev- faster, and one can build a “mutual fund” enue by buying in various neighborhoods rather •Most afford- than putting a lot of eggs in one address. Las Vegas Worst Dallas PAGE 28 • 2012
  • 6. Dallas / Ft. Worth Education Field Trip, May 4-6, 2012 Multiple Speakers including Dallas Chamber, Property Managers, Product Suppliers, Lenders & 3rd Party Investment Experts P arachuting surely is a dif- ferent experience than just reading about it. Dallas/ your questions on site? That is certainly a different experi- ence indeed! Ft. Worth is a much sought- This concise, action and after investment city, one that value-packed weekend is you can certainly read up sponsored by The Real Es- about. However, how many tate Guys and it will sell out times can you see it and quickly. For information and have multiple experts teach- a special discount offer, visit ing you, touring with you, www.tomwilsonproperties. and available to answer all of com or call 408.867.1867. Even in a good region, one can vary tremendously in any must be very careful though general geographical area, and in selecting the right product, only experienced profession- neighborhood and professional als can help you minimize that service and management team. risk. Make sure you rely on resourc- I believe that the wise will es that have a lot of investment not wait and see, but act to experience in that region. grasp the best opportunities If I’ve learned anything in of our lifetime before they are investing, it is that variations in gone. performance from the median INVEST WITH CONFIDENCE I M M E D I AT E C A S H F LOW I M M E D I AT E C A S H F LOW D D iscover the lowest-risk, highest-quality residential investment properties in the iscover the lowest-risk, highest-quality residential investment properties in the country. Using sophisticated methodology, the best investment properties are carefully selected bysophisticated methodology, the best investment properties are country. Using an experienced investor and rehabbed beautifully to secure the carefully selected by an experienced investor and rehabbedinstant cash to secure the best tenants. With competent property management, and beautifully flow, your best tenants. With competent property management, and instant cash flow, your investment pays worry-free dividends from day one. investment pays worry-free dividends from day one. PROFILE OF YOUR FUTURE PORTFOLIO PROFILE OF YOUR FUTURE PORTFOLIO Price $139,000 “Contact me for a Rent $1,395 “Contact me for aPrice: $110,000, Builtrenovated, built 2005 Year fully $1,195Currently Rented for 2001 free cash flow analysis.”Price: $110,000, fully renovated, built 2005Currently4 Bed 2.5$1,195 Rented for Baths free cash flow analysis.” TOM WILSON, President Mention REI Voice Magazine and receive one-year of free TOM WILSON, President 408-867-1867 Mention Realty411 or reWEALTH receive one-year of free Mention REI Voice Magazine andyour first purchase. property management with and receive a discount 408-867-1867 on the May 4-6 DFW Field your first purchase. property management with Trip. Don’t Miss It! PAGE 29 • 2012
  • 7. Is It Honest To Use A Land Trust? by Randy Hughes property (helps with day-to-day I management and lease renewal have been using Land Trusts for negotiations). over 30 years, but every now and 6. Co-owners want to know that then someone will challenge me as a lien or judgment or divorce of to the purpose and “honesty” in us- one owner will not affect the titleing a Land Trust to hold title to real estate to the Let’s clear the air. 7. Out of state owners can avoid Recently I was talking to a real estate in- probate and other legal issuesvestment club owner about speaking to his upon death — smooth transitionclub regarding land trusts. He said, “We do of succession.not believe in using Land Trusts because 8. A group of heirs can inherit athey are dishonest.” property held in a land trust with He then went on to explain how some- ease of management (by the di-one had come to his club and spoke about rector) and no need for a partner-Land Trust and that led him to believe that ship agreement and a partnership There are many legitimate reasons to use a Land Trust for privacy and asset protection.the use of a Land Trust was for deception tax return are many legitimate reasons to use a Landand taking advantage of people. 9. Co-operative housing corporations may Trust for privacy and asset protection. No I told him that I was sorry that he had elect to hold title to their land and buildings one will protect your assets like YOU will.been misinformed about Land Trusts and in a Land Trust. They could then issue ben- Learn all you can now because “old andthat he should reconsider their use and eficial shares to their residents in place of cold” matters.benefits. I went on to review with the club stock certificates Ever since 9/11 Rowner why it is important to NOT have —simplifying it gets harder ev-your name in the public records as owner control and re- andy is a full time real estate inves- ery year to be pri-of real property: cord keeping. tor who purchased his first rental vate and protect 10. When a Trust- house in 1969. He has purchased your assets. Do it1. A group of investors may be purchasing ee of a Land over 200 houses and teaches other investors now! Don’t delay!several properties for a special purpose and Trust signs the how to put their properties into Land Trusts I have written ait may be that the desired result can be best mortgage (that for privacy and asset protection. Randy is a report titled, “50accomplished if the objective is not made gets recorded in national teacher, author and mentor. Randy Reasons To Usepublic. the county court writes the only Land Trust Newsletter in the A Land Trust” and2. Co-owners might desire that the interest house records) county and is the founder of the Land Trust will send it to youof each beneficiary must be kept private. the debt will not University (an institution that teaches real for FREE. Email3. An individual owner might not want show on the bor- estate investors how to set up and adminis- me with “50 Rea-to be hassled with inquiries regarding the rower’s credit re- ter their own Land Trusts). Residing in Il- sons” in the sub-property. port. Land Trusts linois (the granddaddy state of Land Trust ject line and I will4. A real estate investor might not want his have been used Law), Randy knows more about Land Trusts return this reportcompetitors to copy his acquisition tech- by American citi- and how to link them to other entities than to you immedi-niques. zens for over 100 anyone else in the America today. Reach ately. My email is5. Real estate investors do not want their years for good Randy at or by randy@realestatetenants to know they are the “owner” of the reasons. There calling him at 1-866-696-7347. PAGE 30 • 2012
  • 8. White Rock Capital Creates leaders Wealth for Investors by Lawrence RuanoW hiterock Capital, Inc., offer. Patrick leads the company efforts in started 2012 off with a the Inland Empire. BANG, This is one of the Established in Southern California, fastest-growing companies Edrosolan, who has a life-long affinityin the real estate market, and it’s one of for Arizona, and in particular the Phoenixour top picks for area, has also identified and developed2012. What’s driv- significant business opportunities anding the big increase expertise in the Phoenix investor interest In constantly changing marketsurrounding this places, Whiterock Capital has thecompany? Whiterock Anthony Patrick and Richard Edrosolan experience and capacity to perform onCapital is aggres- multiple diverse projects simultane- extensive experience in raising capital,sively expanding into ously. Working wholesale deals, ex- arranging project funding, and creat-both the Phoenix and Richard Edrosolan ecuting multiple “fix & flip” projects, ing “win-win” financing for real estateCalifornia markets. preparing “rent ready” properties for investments. His efforts have enabledThe brand-new company purchased hun- long-term hold strategies and managing Whiterock to maintain a stable sourcedreds of properties in the Phoenix area property are everyday activities to satisfy of ready funding for the company’salone last year, and it’s on pace to double the needs of their many investors and joint increasing list of 2012. venture partners. Whiterock Capital, Inc. provides Whiterock Capital, Inc. was born from Many of Whiterock’s initial projects individuals and organizations interestedthe passion that only real estate investing were rehabilitation projects. Drawing uponcan inspire. Yet, the owners are grounded years of Patrick’s experience as a prop- Continued on pg. 45enough to accelerate company growth erty manager andby taking advantage of the many benefits home inspector, thethat today’s diverse market opportunities company continuespresent. to focus on ways of Benefits include an ample supply of reducing and elimi-deeply discounted properties, historically nating expenses,low interest rates, and a growing demand while improvingfor starter homes and cashflowing rental the quality andproperties. salability of the Richard Edrosolan, founder and CEO, refurbished home.met Anthony Patrick several years ago at Consistently, thea real estate investment seminar. While bottom line of eachdiscussing their mutual interests and phi- and every project islosophies on real estate, they realized that enhanced, secur-they had much more in common than just ing the delight andinvestment strategies. satisfaction of their Soon thereafter, a successful business respective venturemodel was developed and a vital new born. Edrosolan, who Based upon the diverse and well-sea- has exceptionalsoned experience that each of these men expertise in variousbrought to the company, financial success ways of raisingwas attained at the earliest stage of this capital, has beenrelationship. Although Edrosolan has able to maintainwide experience within California and a stable source ofstates in the South and Southeast, Whit- ready funding forerock chose to focus initially in Southern the company’s in-California, specifically in the tremendous creasing workload.opportunities the Inland Empire has to Edrosolan PAGE 31 • 2012
  • 9. One Company, Twice the Cashflow by Isaac Newkirk III tion, ranking 49th and 50th, achieve greater cash flow for a fraction ofP respectively.  Investors the cost of the investment. In high property remier Equity Group has have migrated to the value areas, to earn a positive cashflow been one of the most suc- South due to low price may require a property purchase of several cessful providers of cash- points, strong rental hundred thousand dollars. In comparison, flow investment properties markets and low prop- these two markets provide investors within the Southeast. The company has erty taxes. Both mar- affordable cashflow opportunities.offices in Jackson, Mississippi, and kets have huge upside For example, a newly renovated 3 bed-Birmingham, Alabama. potential as big devel- room, 2 bath investment property in Bir- They are a full-service operation, opers are coming in, mingham with a purchase price of $60,000,providing turn-key investment proper- there are six different and a monthly rent of $850, minus a prop-ties, and other real estate services, for major automobile man- erty management fee of $77, minus $40investors all over the world. ufacturing plants and insurance, minus $80 taxes, nets a monthly Birmingham and Jackson are stable modern medical facilities, cash on cash return of $653, which is anmarkets and are not subject to the “peaks & which serve to stabilize the rental markets. annual return of 13%.valleys” present in more speculative areas. Their mindset is to take the investors Premier believes that one of the keys toPremier Equity Group acquires properties “concerns” out of the equation, and offer the success of their company is their in-from multiple sources, including: asset a “hassle-free” investment process. That’s house property management team.managers, banks, foreclosure sources, short easier said than done, as you know. Also, transparency is very important.sales and general listings. Because they get They offer a unique product to investors, Owners have access to a web portal, getthe best deals, they are able to pass on the one that simplifies buying a house, imple- online statements and can receive directsavings to their clients. Both Jackson and menting a top-quality rehab, leasing it out, deposit of rents. For these important ser-Birmingham have also been rated by vari- and placing it with their in-house property vices they charge only 9%.ous publications as Top 10 Cashflow Mar- management team. This process ultimatelykets. The property taxes in Alabama and leads to steady positive cash-flow. Continued on pg. 45Mississippi are the two lowest in the na- In the smaller niche markets, you can Justin Harrison - AL 205.616.3761 Julie Harrison - MS PAGE 32 • 2012
  • 10. Is Flipping Property strategy by Kathy Fettke, CEO of the Real Wealth Network Good for Your Wealth?T V shows make have had to put down flipping houses $13,000 to buy real estate. look easy, and Today that property bootcamps would be completely paidmake it seem extremely off, and would have moreprofitable every time. than tripled in value.But in reality, new inves- What’s more: you’d betors often get burned on earning at least $13,000their first few deals. rental income per year! Everyone wants to The same power of multi-make a quick buck, and plied growth is availablein theory, flipping could today simply becausebe a way to do that. But prices are so low.please heed this warn- Real estate boughting: Flipping is not for today could very well beeveryone! worth more than three Here are some tips to times its value 20 to 30help you decide if it’s for you. years from now. There is no other investment that delivers cash flow andThe Real Costs of Flipping Property • Flipping requires hands-on involvement capital growth like long-term real estateThere are many hidden costs that new and most working people don’t have the investments do. investors fail to calculate on the outset: time. Flipping is a job. Buying and holding• The cost of funds borrowed to purchase • Successful flipping requires that you property is an investment.and/or renovate the property only invest where you physically live. A• The cost to sell, including agent fees and buy & hold investor can invest anywhere, Kathy Fettke is the founder and CEOclosing costs — estimate 10% have many investments working at the of Real Wealth Network “The Real• Holding costs, including on-going prop- same time, and still make money Estate Investors Resource.”erty taxes, interest charges, and insurance doing other things. Members have access to free• Cost overruns — always allow a 10% • A cash flow rental property education, resources, andcushion for the unexpected can yield over 10% return after referrals to turn-key rent-• Sales price variations — allow 10% less all expenses, without the risk of al properties aroundthan what you’re expecting rehabbing and trying to sell the United States.• Estimated profit — 10% at a minimum at the right time. Real Wealth Network(and if this is all you’re expecting, there • Rental has over 8,000are much lower risk investments out income is members, so thethere!) much more shear power• Short-term capital gains taxes — poten- favorably of numbers al-tially 35% of your profit. Always talk to taxed, and lows the groupyour CPA before making any investment. capital gains can be to acquire avoided upon sale if a properties at As you can see, after you calculate all replacement property is huge costs, you’ll still need to be able to purchased according to Membership isacquire the property for less than 60% of IRS 1031 Exchange Rules. free. Kathy is alsocurrent market value. • Growth over time, for both host of The Real Is it possible? Yes. Is it easy? No. rental income and capital Wealth Show on KABC growth, works the same as Los Angeles and on iTunes and is Buy & Sell VS Buy & Hold compound interest; it’s one of a regularly interviewed guest ex- At Real Wealth Network, we advocate the most powerful tools in an pert on ABC, CNBC, CBS Marketbuy & hold investing for the following investor’s arsenal. Watch and NPR.reasons: Thirty years ago, one would
  • 11. Market Spotlight: San Antonio, TX LOCATION: San Antonio, TX COMPANY: Prosperity Homes and Investments CONTACT: Clay Schlinke ph: 210.771.0861 web: ProsperitySA.comT he Texas economy and real estate market remains on fire with inves- tors from around the world flockingto top Texan cities to add rentals to theirportfolio for appreciation, cashflow andadded stability. San Antonio offers one ofthe fastest growing job markets in the coun-try with a projected 10-year job growth of12.2%, according to Thecity also offers lower business and lifestyle Q: I understand the military bases pro- Q: Do you prefer multifamily rentals ascosts than comparable areas and a well edu- vide a great tenant pool and also eco- an investor?cated productive workforce. nomic stability. A: I prefer our product because we offer To learn more about San Antonio, we in- A: Yes, all of our proj- several advantages to our in-terviewed Clay Schlinke, a master devel- ects are in close prox- vestors, which means higheroper, investor and CEO/owner of Prosper- imity — within a 15 rents and higher occupancy lev-ity Homes and Investments (ProsperitySA. minute drive to all of els. First our units are set up ascom), an online resource for the San Anto- the major bases in San townhomes with a garage andnio real estate market. Antonio. backyard. Second, we have 3 bedrooms with 2.5 baths withQuestion: What kind of opportunities Q. What makes Pros- great amenities that includeare you seeing in San Antonio? perity Homes and In- granite counter tops, concreteAnswer: San Antonio has remained stable vestments unique in stained floors, crown moldingduring the past several years and has con- the marketplace? and built-in niches. Lastly, wetinued to add jobs and people to our city. A: We are the only also include a park and pool inMultiple companies have been moving to new home builder that our neighborhoods. As a tenantSan Antonio over the past few years and specializes in building you can get everything at one ofnow with the discovery of the Eagle Ford townhomes, duplexes Clay Schlinke and his family our developments that an apart-Shale oil and gas reserve, it is helping with and fourplexes. ment can offer, but you also getthe continued growth. We develop our a garage and yard with no neigh- own subdivisions bors above or below you.Q: What is the best part of being an in- in locations thatvestor and buying in San Antonio? have high rental Q: How long have you person-A: Due to our economy and great rental demand and are ally invested in real estate?market, it is easy to cashflow in our city. in strong areas for A: I have been investing sinceWith the cashflow and with the stability of future apprecia- graduating college in 1994.our economy, there will be future apprecia- tion. We are able I own both single family andtion of your properties, which all add up to to give the inves- multifamily properties.a great investment. tor instant cashflow and even equity when they purchase. We have also been success- Q: What do you foresee for the San An-Q: How is the rental market? ful in setting up our developments so the tonio market for 2012?A: The rental market is at an all-time high investor can purchase a fourplex building, A: Based on the last few years, San Anto-right now. The occupancy rate is 92%. but later sell them individually as town- nio has as bright of future as any city in homes if they choose to really the United States. Our government is very maximize their return. We also pro business and you can see that when you provide a full two to 10 year arrive here. In 2012, and beyond, we will warranty to the investor to pro- see continued growth and success in San tect their investment. PAGE 34 • 2012
  • 12. Phoenix Starts Recovery by Wendy Pineda with the right team, investors can still and assigning a property managementP purchase investment properties that team. hoenix is a great place to in- will bring them immediate cash flow Bansal also knows that for some vest in real estate. On February and long term appreciation. However, investors hands-on research is the only 9, 2012, released investing in an unknown market can be way to develop a real comfort level a slideshow on the “Top 10 a huge concern for many investors. Ray when investing. That is exactly whyTurnaround Towns” in the Bansal started a Phoenixnation. The slideshow placed Investment Property Tour,Phoenix at number two. so investors can meet with Two years ago, Ray Bansal, him, learn how the companypresident of USA Property works, the many benefits, andInvesting, a company that spe- view the market first hand.cializes in turn-key property By attending theinvestments, had already pre- Phoenix Investment Propertydicted that the Phoenix met- Tour, investors can view theropolitan area would be one workmanship of the rehabbedof the most promising areas in properties, as well as evalu-which to invest. This has been ate the various neighbor-proven to be true partially hoods and view some of thedue to the historically low commercial developmentsprices coupled with the state’s currently enhancing thecommitment on supporting Phoenix economy. Alongeconomic growth in key industries. Bansal understands this, and with his with the research and analysis provided In a recent article published by the 20 plus years of general construction by USA Property Investing, investorsWall Street Journal on March 13 of this and real estate experience, Bansal has can now make a truly informed choice.year, Thomas Lawler, an independent developed a turn-key investment system The team at USA Property Investing iseconomist declared that “Phoenix has designed to eliminate concerns and fully invested in their clients’ successhit a bottom.” The article also stated doubts for real estate investors. and can tailor the investments to suit thethat the low prices in Phoenix paired Through this process investors can individual investor’s personal needs.with the upswing in the economy has choose from fully rehabbed cashflow- Don’t have all the cash needed for aled to an increased demand in hous- ing properties, some already rented, in purchase? No problem, USA Propertying, and not just from first-time home great family-oriented neighborhoods. Investing has the resources to help youbuyers. Big and small investors are The turn-key system allows for USA achieve your goals. Many financingsnapping up the bargains. In fact, one Property Investing to handle the whole options exist, so contact Ray Bansal atquarter of all properties sold last month transaction from beginning to end. This (888) 616-3706 to learn more.was to an out-of-state buyer. includes fully rehabbing the property, Although it may seem like the scheduling appraisals and inspections, Learn about their next tour, at:window of opportunity is almost gone, all the way through to tenant placement PAGE 36 • 2012
  • 13. “W “What We Can BE, motivation hat we can be, we must be,” is one of Dr. We Must BE” Maslow’s famous quotes.Abraham Maslow is the father of human-istic psychology. He is renowned for hisHierarchy of Needs and Self Actualizationtheories. Most of his writingsare about human motivation and have put them Just so we are clear about growth ver-personality. Today, his teach- on the plus 1, but sus comfort, I’ll give a few examples ofings are successfully applied they chose to step how people choose safety over growth:in fields of business, marketing back to safety and 1. You got angry at your son and decid-and communication among oth- landed on negative ed to break off communication a whileers. Maslow was born in New 1, the difference of back. An opportunity arises to sit downYork 1908 and died in 1970. two points and not and talk things over, but you take the "If you deliberately plan on just one, as com- easy way out by going into your comfortbeing less than what you are ca- monly believed. zone and watch the ball game.pable of being then I warn you, Here’s what’s 2. You need to get up early and take careyou will be very unhappy for the worse. Every time of something important. Instead, yourest of your life.” you make such look at the clock and go back to sleep! — Abraham Maslow decisions, the gap 3. You find a good property to invest in Dr. Maslow believes human between what you but at the last minute you’re gripped bybeings have an instinct (need or could have done fear and chicken out!impulse) that drives them to be and what you ac- Recognition is the half way to transfor-the best they can be. On the oth- tually did grows mation. So, first examine your own life Sam Sadater hand, he says that the story wider. Dr. Maslow and look at moments when you could’veof the human race is the story of men and affirms that all our regrets, anxiety, frustra- and should’ve gone for growth but youwomen selling themselves short. tions, unhappiness, anger, depression, etc. chose safety. Then realize that the gap So what gives? Let me give you an ex- lies in that gap which separates growth where all this negative energy residesample. Imagine drawing a straight line that from comfort or realizing one’s full po- is dragging you down. Since there’sgoes to infinity on both sides, from one end tential from settling for less (selling one- not much we can do about the past, weto another. Now think of yourself standing self short.) People take all kinds of drugs need to take action in the present to af-in the middle of this line, which we call for various mental and emotional condi- fect future. For those of us who insist topoint zero. One side of the line starts with tions when all they have to do is to pick live in the past, the famous poet, Omarplus 1, plus 2, plus 3 and so on to plus in- growth over comfort and security. Speak- Khayyam has this to say: “the movingfinity. On the other side of the line, you ing of which, do you really believe there’s finger writes and having writ moves on.have negative 1, negative 2, negative 3 and such a thing as security in life? If you think Nor all thy piety nor wit can lure it backso on to the negative infinity. about it, it becomes clear that “security” is to cancel half a line, nor all thy tears Dr. Maslow states that at any given mo- a myth. After all, we have very little con- wash out one word of it.”ment, when you are faced with making a trol over events and what will happen next. Once you come to terms with your pastdecision, you have a choice to move for- Some schools of thoughts recommend the and realize you can still do somethingward in the direction of growth (plus side notion that if you want “security” it’s best about your future in the present time,of the line) or step back into the direction to seek insecurity! By that, they mean to then resolve to never again step backof safety (comfort), which is on the nega- simply allow things to take their natural into safety when you can choose growthtive side of the line. So that if you are at course. That does not mean you sit back instead. As you begin to make decisionspoint zero and faced with a challenge that and do nothing. Rather, you do the best you that are more growth based and less onrequires a decision on your part. What will can but not get attached to the results. Only safety, you will see that the gap is get-you choose? in this way you would be able to experi- ting narrower and narrower. Soon youll What do most people do when confront- ence a life of joy and fulfillment. gain control of your life and move in theed with problems of life? They usually Back to our discussion of why the vast direction of self-actualization, which is,step back into safety or the negative terri- majority of people choose comfort over according to Maslow, where you can re-tory. The first such decision results in go- growth almost every time they make a de- alize your full potential and maintain aing back to negative 1. And so they justify cision in life. Is there any hope of revers- happy and fulfilled state of saying, “it’s nothing, I just went back ing this vicious cycle? And the answerone step, I can always make up for it lat- is………….. Yes! It’s possible and you To your success and life of abundance,er.” But here’s the catch that most people won’t need several lifetimes to get it done!miss. It really cost them two steps and not You surely can reverse this process but it Sam Sadatone! They could have made a decision to requires effort initially. But in the long run www.samsREclub.commove forward into growth, which would your life will be a lot more effortless! PAGE 37 • 2012
  • 14. Going Global to Meet Demand Small Real Estate Company winters with little to no snowfall; Finds Success Taking its •A high rate of foreclosures, al- lowing properties to purchased Business Model to an and resold inexpensively, pro- viding an optimum product to International Audience an end buyer; •A dollar-based economy; By Robert FeolA Miller and Guenther, who few short years ago, business already held 300 rental partners Bert Miller and Hans homes between them, had no Guenther had a business that problem filing in the logisti- was primarily focused on de- cal blanks, which remained tolivering retail level homes to end users in be identified for them to pro-Memphis, Tennessee. Their partnership, duce what is, today, a brilliantwhich has spanned over 20 years, was success story in the making. Theythriving, as they realized their mission already had a licensed realty broker-to take on foreclosed, non-performing age, which was managing their portfolioreal estate, revitalize it, successfully. Why not offer that service toand provide desirable investors in the scope of a truly ‘turnkey’housing to their buyers system that provided investors who wantedwhile reinvigorating the real estate investors do to purchase full-service properties in Mem-tax base. when their entire target phis great investment homes that were on- Then, the credit crisis sales group evaporates line and performinghit and the two partners before their eyes? Whilefound themselves be- any investors would tuck Going the Distanceing forced to redevelop tail and run, or become What really sets Miller and Guenther aparttheir business model. Hans Guenther and Bert Miller complacent in trying to is their clientele — almost 100% of their The so-called credit simply find a new way to end-user sales are to international investors.crisis has challenged today’s modern real address the problem of U.S. mortgages be- Miller and Guenther have traveled exten-estate investor in a variety of ways, but coming few and far between, the pair opted sively, spending a significant time in Sin-for investors like Miller and Guenther, the to ‘take the red pill’ and go a bit further gapore in 2011 working with their clients,fallout was a significant one — the major- down the rabbit hole, asking a hard-hitting and they are scheduled to travel to Newity of their purchasers were unable to buy and probing question — if our target mar- Zealand and the United Kingdom in thehomes, period. ket has disappeared, who then IS our target early months of 2012 as keynote speakers, “It was like the hammer falling,” says market? discussing their turnkey real estate systemBert Miller. “We woke up one day, and The answer was found, interestingly to foreign investors. The early prognosisso many of our pending purchases were enough, outside of Memphis, Tennessee. for 2012 anticipates Miller and Guentherbeing challenged or falling apart due to Miller and Guenther had focused so in- selling about 150 homes to foreign buyersnew appraisal restrictions, HVCC rules, tensely on their domestic market in their this year, not counting their domestic out-etc... Changes in credit were hamstringing resident city that they had forgotten the put and retail, and the end-user sales theyfamilies who wanted to purchase their pri- whole world was, literally, just waiting for still engage in.mary residences. We began to realize that them to show up. Establishing a truly turnkey systemour only answer to the problem rested not They started to reassess the value of their wasn’t the difficult part of reinventing thein waiting and hoping things got better, product, and looked at it in its most con- business model — the difficult part, ac-but in radically revolutionizing our busi- summate and simple form. Memphis, Ten- cording to Hans Guenther, was convincingness model. There was simply no other nessee real estate offered: investors that there wasn’t some kind ofway to continue our business in its current •Incredible cashflow per square foot; hidden “angle.”incarnation.” •Low purchase points per square foot; He adds: “We had so many investors af- •A stunningly high per capita rent ter meeting us and hearing us at seminars Enter the Matrix al rate (almost 50% of the population ask us bluntly: ‘What’s the catch? What areMiller and Guenther had come to a cross- of Memphis is comprised of renters you guys hiding? This seems to good to beroads, not just metaphorically, but literally seeking rental homes);speaking. What do two ‘rehab to retail’ •A Southern climate, which had mild Continued on pg. PAGE 38 • 2012
  • 15. The Best Opportunities …don’t last forever A division of American Foreclosure Acquisition Services Memphis’ Finest Foreclosure ExpertsB u yMe mp h i s F or e cl o s ur e s. c o m i s yo ur i d e a l s o u rc e f o r p ort f o l io - b u i l di n g a n d c a s h- f l o w i ng pr o p ert i es i n Memp h i s , T e n n es se e a n d ot h er c it i es . W e p r ov id e h o u se s i n pr ef e rr e d are a s at l o w p ri c e p o in t s w it h e xc e l l e nt ca s h f l o w. O u r pr o p er t i e s ar e a lr e ad y r e nt e d a nd w e p r ov i d e ex c ep t i o na l i n -h o u s e ma n a g e me nt . B u i l d yo ur po rt f o l i o th e ri g h t w a y , f r o m a n yw h e r e , w it h a n ex p er i e n c e d a n d r el i a b l e t ea m. W e sp e c ia l i ze in c re at iv e f i n a nc i n g o f f e ri n g p r ef er re d i n st it ut i on a l, p riv at e a n d ow n e r f i n an c i ng . Visit us on the web: (901) 870-2301 Buy Memphis Foreclosures - A Division of GM Realty, Inc. 6262 Poplar Avenue, Memphis, TN 38119
  • 16. BiggerPockets Real Estate Investing Summit & Expo 2012 Denver, CO March 23 - 24 The No-Nonsense, No Upsell Real Estate Investment Conference Join Us At The BiggerPockets Summit!BiggerPockets is at it again. The company that changed the How to invest in real estate whileway real estate investors network, learn, and do business via itswebsite, is announcing it inaugural live conference and accidental landlord, if you’re an experienced pro, or if you’re a service pro-fessional in the real estate investment industry, our BiggerPockets Summit will - Investmentssible for as many people as possible from around the country.” And much more!Don’t Get Shut Out -- Space IS Limited -- Buy Early and Save! Sponsors:BiggerPockets
  • 17. diversification Trading Stocks VS Investing in Stocksby Tyrone Jackson a company whose annual and A trader takes a differentC quarterly earnings are rising. approach to stocks. A trader an you really earn Historically, increased earnings is in the game of taking small $8,000 profit per creates pressure on the stock quick profits. Let’s take a look month trading stocks price to increase. Stocks that at a company like eBay (ticker online? Yes you trade above $100 per symbol EBAY). eBay is cur-can. There’s a reason share have in- rently trading around $37 dol-the really rich own creasing earn- lars per share. Maureen, aand trade stocks ings. In the smart, intelligent and attrac-AND buy real We a l t h y tive real estate investor andestate. The Inves- entrepreneur, understands thatstock market tor pro- to create real wealth she needshas always gram we to be diversified. That meansbeen a place refer to owning stocks and real earn fast, t h e s e She likes investing in Dowsexy money compa- components like MacDonalds,for those that nies as AT&T and IBM for the long Wednesday, two days af-have a financial “good dates.” term and using a small portion ter Maureen purchased hereducation. So what’s As an inves- of her investment capital for eBAY shares, the stock’sthe problem? Most tor, you’re hoping trading others. One of her fa- price reaches $38  shortly af-Americans never seek to be fi- that the company continues to vorite stocks to trade is eBAY. ter the market opens at 9:30nancially educated themselves, have success and earning in- On Monday shortly after the a.m. eastern time. The soft- Isn’t it time you added stock markettrading to your list of revenue streams?therefore they are locked out creases over a long period of stock market opens, Maureen ware inside of Maureen’sof the greatest game in the time, let’s say two to five years. logs into her online brokerage account automatically trig-world… investing and trading When XYZ’s stock price in- account and purchases 1,000 gers a sell while she is atstocks. For way too long the creases from $100 to $110 shares of eBay at $37. That’s the gym. When she returnsstock market has been an ex- and you own the shares, your a total investment of $37,000. home, Maureen gets an emailclusive playground for the up- investment has increased in She’s willing to sell the shares and discovers she has justper class. Today stock research value ten percent. That means the second they reach $38 dol- earned a $1,000 profit fromand the ability to trade is just a your $10,000 is now $11,000. lars and capture a quick profit. the sale of eBay shares. Howclick away. In the above scenario you only Maureen is not day trad- did that happen? Let’s re- There are two major ways have a paper profit. An actual ing. Day trading requires that view. Monday Maureen pur-to earn money in the financial profit results from selling your you sit at a computer while the chased 1,000 shares of eBaymarkets. They are investing, shares. stocks are trading and buy and at $37. Her total investment(purchasing shares and letting Once a stock price has in- sells stocks when they increase was $37,000. When the sharethem increase in value over the creased, you have several inter- five to ten cents above your price reached $38 her 1,000long term), and trading (buying esting choices, you can: purchase price. Most people shares were sold. Maureen’sand selling shares very quick- 1. Sell XYZ stock for a profit, who attempt day trading lose initial investment of $37, 000ly). The real estate equivalent and enjoy your ten percent money. was returned to her accountto stock trading is buying a return. Instead, Maureen prefers to plus a one dollar per sharehouse, fixing it up, and then 2. Purchase more shares and volatility trade because the free profit. One dollar multi-selling it for a profit as soon as ride the wave of success. software in her brokerage ac- plied by one thousand sharespossible. 3. Find another company to count will trigger a sell of her equals $1,000. As a stock investor, your in- invest in using the same crite- eBay shares while she’s out in If Maureen can buy andtention is to purchase shares of ria that led you to XYZ. the world enjoying her life. Continued on pg. PAGE 41 • 2012
  • 18., pg. 11 Spring has Sprung, pg. 9price, square footage, cap rate, asset specif- extremely valuable. 3. New Infrastructure Improvements,ics, etc. Having thousands of connections on 4. Easy Affordability, 5. Opportunity for The platform lists the assets for auction, sites such as personally Pis- Appreciation, 6. Tightening Vacancy,and people are able to deal directly with cano knows the value of an online network 7. Sales Inventory is Turning.each other. and wants to allow RealBay’s members Based on these seven factors, I then as- “I’m allowing the buyer and seller to talk to truly capitalize on the exposure the site sess the area’s median rent prices. It is im-with each other direct and connect without will allow them to have to potential clients portant to analyze the median sales price,any regulation – This greatly increases the as well. The site will have several varia- quality and quantity of the houses in a givenchances of getting a deal done – The other tions on the style of listings and auctions area. The areas offer at least a 1.25% or bet-sites won’t do this because they afraid of users may use. “Own it now” and “Best ter rent ratio (monthly rent/sales price) getbeing cut out of the loop and not getting Offer” selections will be available to peo- a second look. When it’s time to buy, I looktheir fee after the transaction.” according ple, according to Piscano. for houses that will cashflow at just underto Piscano. Currently, the website is open for the the area’s median rent. Buying the right This helps with the buyer and sellers public to create accounts at no cost. It is property is only a small step in investingcoming to an executed transaction faster. a traffic-based website and sponsored op- success. The biggest factor of profitabilityThe website attracts global buyers and portunities will be available soon to spe- is keeping your property rented. A lowereach buyer and seller is different and the cific service providers that would like to be rent range will expose your properties topersonal relationship of direct contact is showcased to members when those mem- the largest group of potential renters in the bers need them the most. area and let you select the best tenants. Buy, Hold & Rent, pg. 26 “In the future, we envision a site where So, going back to the question — “ Is it users pay nothing and we truly become time to buy realbusiness at present, primarily due the in- a free real estate marketplace and social estate and if so,creased difficulties of potential clients get- network, driven by our members activity where?” — Yesting financing. Many Section 8 properties similar to Facebook,” Piscano explains. it is the right timehave been located in neighborhoods that The site will allow for networking con- to buy. Where?have added to the problems in acquiring nections between REALTORS®, investors In a market thatbuyer-financing. BH&R determined that and different types of real estate service will provide youbuying in the more upscale neighborhoods providers in a busy and exciting online stable, depend-significantly increased the prospects of a marketplace. able cash flow for the long term.positive return for investors. The muchlower turnover rate in these neighborhoods For additional information, be sure to Contact Lori Greymont at 888-298-0652was greatly aided by the tenant base. It’s visit Lori@SummitAssetsGroup.comthe age-old real estate mantra of “location,location, location.” Whalen believes thatif you focus your efforts in areas where Rapid Property Analyzer (RPA), pg. 22people want to live, you’ll get a differentclient and a different tenant base. They’re tematic process to help you evaluate then evaluate any property he looks atonly buying out in the suburbs these days. potential property for investment pur- against the same criteria. Hence the con- BH&R’s investors don’t usually worry poses. sistent, repeatable results all profession-about the need to get financing. Almost By using this software the investor als look for to evaluate their work.all deals are sealed with cash; with many evaluates each property the same way Just like the serious golfer who buysclients using savings and retirement funds. using the same criteria. This approach the best set of clubs he can, savvy inves- BH&R remains aware of the com- allows the investor to identify his return tors need decision-based tools that assistpetitive marketplace, but Whalen puts a on investment (ROI) using a standard them in making fast, comprehensive and20-year plus career on the line. Having set of rules for evaluating all properties. accurate assessments of a potential prop-only specialized in the Cleveland area, As shown in the table and the charts erty’s value.he knows the area like the back of his on page 22, multiple properties are Gary Geist is a seasoned real estate in-hand. It’s a people-oriented business and displayed side-by-side in numerous il- vestor with over forty years experience.he proudly points to the fact that he’s on lustrations comparing the performance He has owned property in several statesa first-name basis with all the people that metrics of each. This enables the inves- in the Midwest and currently has largematter. He recognizes that the over $5 bil- tor to quickly grasp the relative value of property holdings in Ohio, Indiana, andlion in construction taking place in Cleve- one property over another. Pennsylvania. He is the owner of Hom-land will attract investors from the world As an investor, this is what you need eReplay, LLC, which is based in theover. He wants potential investors to know to be focusing on, relative rates of return Midwest and provides tools and turn-keythat he’s there to serve their interests. and values set on the same criteria. investment solutions to investors world- RPA allows the investor to tailor the wide. For more information about RPAVisit online at: software to his individual market and visit online at: PAGE 42 • 2012
  • 19. BiggerPockets Hosts a Ate you a Target for a Lawsuit? pg. 23ing any payments pre- GroundBreaking Summitsuming he could buyanother couple yearsof free rent. This Ttime, we waited forsix months (listening he most sophisticat- Geraldine Barry, the headto his empty promises ed investors in the of SJREI Association whoseand excuses). real estate industry club was winner of the 2010 Bill Gatten When we were finally are flocking to Denver, Award of Excellence fromable to effect foreclosure, as per our agree- CO on March 23rd and National REIA; and Tah-ment, the lis pendens (Notice of Legal Ac- 24th for the first annual ani Aburaneh a self-madetion) hit the newspaper, immediately luring BiggerPockets Real estate multi-millionaire real estatethe so-called “Consumer Advocates” out Investing Summit 2012. Joshua Dorkin developer and author of Realfrom under their respective rocks by the The event, produced by the Estate Riches.dozens. The particular “extortionist” that nation’s most popular online real estate “Our goal is creating this unique con-Mr. Williams selected agreed to sue us network, will take place at the Colorado ference is to provide experienced inves-for “equity stripping” and taking uncon- Convention Center. tors, and those trying to learn, with ascionable advantage of the poor, gainfully Over 200 years and thousands of no pressure, no nonsense, and no upsellemployed man who earned approximately deals worth of real estate investment environment,” says Joshua Dorkin, Big-$10,000 per month but refused to pay his experience will be available to those’s founder and CEO.$3,500 monthly mortgage payment (for attending. Scheduled speakers include Tickets for the two day event, whichtwo and a half years by this time). some of the most renowned investors includes access to all conference ses- At the settlement conference in court the in the industry, including: Bruce Nor- sions, are $250. For more information,two opportunists (client and attorney) sug- ris of the Norris Group, best known for please visit: http://www.biggerpockets.gested they would settle with us for an even his California Market Timing Report; com/conference.$1 million dollars. When we insisted on atrial, the attorney decided that he’d nowsettle for an even $40,000. We counteredwith an offer for him to stick his head in More Cashflow, Less Casha bucket and requested a jury trial. Thatturned the tables on Mr. Lawyer, since hewas basically broke (as many are), and not Lgetting paid by his client, hoping for a set- ooking for a way to With all the negative me-tlement and payday. Since he would havehad to front his client’s court costs, he just jump into real estate dia coverage, many investorsgave up (i.e., Williams vs. Land Partners of by utilizing leverage? wrongly assume that investorAmerican, Va. Est. January 2007). Then talk to the Gosser loans are impossible to get, but The basic lesson to be learned here? Be- Bighaus Team at Guild that assumption is false. Take a Mortgage. The team is Jason & Steve look at some of their numbers:cause the property in question was held bya third-party, bona fide, properly structured led by Steve Bighaus and Jason Gos- Gosser Bighuas weekly average:title-holding land trust, all claims of Eq- ser, who specialize in rental property Total Amount Funded: $330,725uity and Unlawful Eviction and Wrongful financing. Equity Partners: $130,275Foreclosure fell on deaf ears. Without the “We have techniques and loans that Cash Flow: $1,931.99land trust, everything would have turned many lenders do not offer, and usual- Gosser Bighuas monthly average:out completely differently, and in addition ly don’t even know about it,” Bighaus Total amount funded: $1,124,087to our $96,000 and $25,000 court costs to explains, and adds that they work with Equity partners: $468,913date, we would have lost the house and many out-of-state investors. Positive Monthly Cash Flow: $8,983been sued for a couple extra hundred thou-sand dollars to boot. Regarding real estate ownership in par-ticular, some legal advisors will tell you start with a Land Trust first, then bring in stead vested in an entity that is designatedthat you do not need to use a Land Trust. the LLC secondarily as the (or “a”) benefi- to serve as a trustee for the beneficiariesThey’ll often suggest that you hold title to ciary of the land trust. (not for a trust). Land Trusts are essential-your real property in an LLC instead. This So, what is a Land Trust? Unlike most ly privacy tools for real estate asset protec-is not necessarily bad advice by any means; trusts, the Illinois-type land trust isn’t a tion. In other words, they are structured soit’s just not great advice. If you are interest- trust per se at all. Despite the terminology, as to obfuscate discovery by the public of aed in setting up the BEST structure to pro- the corpus of a “land trust (the entrusted property’s ownership control.tect you and your real estate assets you’ll property)” is not vested in a trust: it is PAGE 43 • 2012
  • 20. by C. Han of 360 Investments purposes. of default. The executed reverse quit claimA W e  m i n i - deed held in escrow prevents the need to s of just recently, a six m i z e  t h e go through lengthy and expensive foreclo- month Certificate of risk of our sure proceedings and allows the lender to Deposit (CD) interest loan by only take title to the property, which lender can rate was a whopping lending to hold, sell, and/or assign note to a different0.45%, a 1 year CD was 0.76%, borrowers pre-approved refinance borrower. Since weand a 5 year CD was 1.61%. who are pre- loan up to the borrowers maximum loan toChecking and savings interest approved value ratio, typically 70% to 75% minusrates are 0.52%. Other banks like for the refi- closing costs, that leaves 25% to 30% eq-Bank of New York Mellon (BNY) nance loan. uity in these properties to further minimize How Hard is Your Money Working?announced last year that they will start We send potential borrowers to our pre- risk. We hold and escrow the renovationcharging savings account holders 0.13% for ferred mortgage banker to get pre-approved fees with new borrowers and provide a dis-holding their cash. With the stock market and the banker runs the borrowers credit, bursement schedule based on the renova-drops, many people are moving their mon- financials and then provides a pre-approval tion list they provided to the appraiser toey into a saving or CD just to minimize the letter with their maximum loan amount ensure the added value has been made toloss of capital they experience so frequent- and loan-to-value ratio. Based on the bor- the property. Since 2008, we have fundedly in the stock market. Due to many inves- rower’s pre-approval figures, we loan up to over 100 transactions with 0% default rate.tors lack of resources to other investment the borrowers’ maximum refinance loan to We contribute our 0% default rate to ourvehicles, savings, CDs or mutual funds are value minus their refinance closing costs. system in which our funds are only acces-their only options besides sticking it un- These borrowers are real estate investors sible to those borrowers pre-approved withder their mattress. With high inflationary purchasing distressed properties using our our preferred lender, whose experiencetimes, these measly interest rates are noth- short-term funding so they can make stron- has proven to close the refinance loan withing: $1,000,000 with savings rate of 0.52% ger offers with quick closings that get ac- these borrowers based on their initial pre-earns $5,200 a year / $433.33 a month. cepted. These borrowers add value to the approval qualification. There are many other investment vehi- properties through proper renovation there- Now that we have explained our processcles that offer much higher returns. Many by increasing its value and then refinances for minimizing risks through our lendinguneducated investors think any returns which pays off our short term loan based requirements, lets progress to the goodhigher than traditional savings, CDs or av- on this new higher value. The risks asso- stuff, the returns. We offer our investorerage stock market returns are riskier, and ciated our investment lending program is lending partners 2 points (%) of the loanthat could very much be the case, but you the borrower’s inability to refinance due to amount plus 12% interest. We do not poolwill learn how hard our investors’ money loss of job/income, death and/or real estate investor funds together. We match eachis working for them while still minimizing market depreciation lowering value, requir- investing lending partner to the each in-risks. There are many titles that coin this ing borrower to bring funds to close, which dividual loan. The refinance process cantype of investment activity such as Hard they may not have. We minimize the risk take between 30 to 90 days therefore, anMoney Lending, Private Money Lend- by requiring borrowers to get pre-appraisal example, if the investing lending partnering, Trust Deed Investments, Notes, Being report(s) with the approved appraisers on funded $200,000, investor would receive 2the bank, Mortgages, Bridge Lending and the refinance lender’s list. We secure our points (%), $4,000 plus 12% interest onlymany other known titles. Our investor lend- position on title by taking first (1st) lien payments of $2,000 per month. If the re-ing partners earn on average of 20% to 32% position with Trust Deed/Deed of Trust/ finance closed in about 30 days, the totalreturns on their money. Our lending pro- Mortgage (depending on the state). Our profit would be $4,000 plus $2,000 total-gram is short term, up to 90 days, offered to closings also require lender’s title policy, ing $6,000 and their $200,000 reimbursedborrowers purchasing residential (1-4 units) property insurance and a reverse quit claimreal estate for monthly cash flow investment deed executed and held in escrow in case Continued on pg. PAGE 44 • 2012
  • 21. Premier Equity, pg. 32 HomeUnion Services, pg. 6 WhiteRock Capital Creates Wealth, pg. 31 Besides turn-key rentals, the risk of their first investment. in participating in the real to avoid some of the pitfalls.Premiere Equity Group offers a They should not just look at estate market, either as active Also, Anthony and Richard arenumber of products, business returns on paper — there are or passive investors, a proven always available to help in dif-models, and revenue streams a number of factors that may experienced team of real estate ferent situations.”that cater to each type of inves- whack those projections. We experts dedicated to assisting ~ Edwin Mizunagator, including: are doing webinars to edu- investors achieve their goals. Acquisition Lending: Great cate investors. They can also “Since May 2009, I’veproducts for passive investors, download our white paper: WhiteRock Capital’s invested with Whiterock incurrently offering great returns “Critical Mistakes in Real Es- Testimonials from Clients: about six projects including fixon short term funding for ac- tate Investing” from our web- and flips, wholesale deals, andquisitions. site www.homeunionservices. “Learning the real estate now “buy and hold” cashflow Cashflow Properties: The com. We also invite investors investment business is difficult, homes in the Phoenix area. Incompany’s specialty, setting up to “like us” on our Facebook there are many aspects related every case, Richard and An-quality rental property, qual- page ( to the business not brought out thony have gone above and be-ity renovations, in great areas, homeunion), where we offer in the “Real Estate Investment yond to assure the investmentwith their in-house property several tidbits and research Seminars,” as most seminars was secure and profitable. Mymanagement division protect- on real estate investments. are a market place to sell plan is to work with Whiterocking the investments. ideas, and not the details of to acquire ten additional rental IRA conversions:  sing self- U Q: Do you have any tips for investing. properties in 2012.”directed IRAs to take advantage more experienced investors I have worked with both ~ Joseph Hobbsof tax saving opportunities. who may have lost money Anthony and Richard and be- Pre-rehab purchases and during the recent bubble? cause of their combined knowl- To learn how you can benefitpre-funding: Pre-fund your A: Experienced investors are edge, I have gained a better from Whiterock’s experienceown deal to insure the lowest like day traders, they know understanding of the business. and rock-solid integrity, go topossible basis for each transac- which stock to pick and when I have more confidence in ortion. to buy and sell. The single- knowing what to do and how call 877-228-6060. Marketing Program: Pay- family real estate marketing investors to market for the hasn’t had the same level ofcompany and paying up to published research that other nating international inves- began to offer non-qualifying,$1,500 per sale per client. markets enjoy. HomeUnion tor, therefore, faces a unique non-recourse, private lending Premier Equity Group is is changing this and experi- challenge when they find that for each and every propertylooking to make 2012 profit- enced investors can now tap modern institutional bank fi- they offer to investors, re-able for its investors. Premier into new markets and ana- nancing in the United States gardless of nationality. ThisEquity Group invites you to lyze data to reduce their risks is not favorable to the foreign establishment of what is es-visit them on the web at www. without having to fly all over national who wishes to take sentially ‘asset based lending’ and the country to do this. advantage of a weak Ameri- has propelled their businessexplore the many investment can dollar and truly depressed forward. For more information, visit: American housing markets, Miller and Guenther’s rein-opportunities available in their however opportunistic the vention of themselves holdsSoutheastern markets. timing is. critical lessons for us all. Local Company Goes Global, pg. 38 Most banks will just say The real estate business in ‘no’ to foreign investors who the past few years has faced true!’ And the fact of the mat- clientele, the pair are espe- want to apply for loans from a tumultuous and rocky path, ter is, our homes are general- cially well known for their American banks. Miller and one which has seen many in- ly returning net yields of 12% mastery and implementation Guenther, again, had an al- vestors fall to the wayside. to 15% consistently, which in of private financing. ternative answer that was, In an industry vertical and of itself is quite remark- unbeknownst to them, going where only the strong truly able. It is a testament to the Private Financing to have a dynamic impact on survive, Miller and Guen- adaptability and efficacy of Paradigms, Applied their business and transaction ther’s partnership demon- the system my partner and I volume — the use and imple- strates that adaptability and designed.” As in the United States, for- mentation of private lending. perseverance truly carries Miller and Guenther are eign investors are all about le- By partnering with a local robust and great rewards, for certainly at the vanguard of veraging their capital deploy- lender who has just imple- those strong enough to cross the pack of today’s whole- ment and insuring they are mented a trademarked private the finish line. sale turnkey providers. But, maximizing the use of other lending paradigm created by beyond their innovative busi- people’s money, whenever a local Memphis real estate Visit online www.BuyMemphis ness model and international possible. Today’s discrimi- investor, Miller and Guenther PAGE 45 • 2012
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