Realty411Realty411 Print • Online • Networkwww.realty411guide.com | Vol. 3 • No. 2 • 2010 A Resource Guide for InvestorsTips for Long-DistanceLANDLORDING Turn-Key Rentals Around the Nation Cash Flow from the Comfort of Home Mathew Owens, CPA, owner of OCG PROPERTIES Buys & Rehabs Rentals in Tennessee from Redondo Beach Get the Deals DONE Learn Creative Real Estate Techniques from Dave Lindahl, Dolf de Roos, Bruce Norris, Bill Gatten & more! Look Inside FREE Celebrating the Largest Wealth Issue with More Pages & Reports! Opportunities than Ever! photo by Sam Green
<< Table of Contents >>7 Secrets from the Master! Charity Walk and GalaDave Lindahl shares his latest 37 Join the Ultimate Bus Tourtips for Investing Success with MemphisInvest.com9 No Drama in Dayton 39 Creative Financing OptionsTriple Net Houses Helps with MMG Capital, LLCInvestors Profit without Issues 40 Philbin Capital Discovers11 California Living with Deals in the Golden StateTennessee Cash Flow 42 The Key to Success by ClubMathew Owens, CPA, owner of Founder Sam SadatOCG Properties, explains whyhe loves to invest out of state14 Beware of the InvestmentVampires by RBS Homes16 Dolf & Carter: A Master-mind with Arizona Investors19 Enjoy a Tropical Paradisewith Phenomenal Returns photo: Sam Green 45 Buy Bigger and Better Deals by Kathy Fettke 46 Alternative Economics™ Club Debuts in California 51 Stop the Gambling! Mike Woo, a “Rich Dad, PoorIn search of their latest gem in Dad” protégé, advises clientsNicaragua, Maverick Investor 52 Is Your Mortgage Underwa-Group traveled the world ter? Perhaps a Short Pay Refi-22 Investor Nation Shares their nance is the AnswerBlue-Chip Real Estate Strategy 55 Pay Off Your Rental House2 5 G i n g e r M a c i a ’s T h r e e in Five Years with the ShortFREE Ways to find a Great Term Retirement ProgramWholesale Deal27 Creative Real Es-tate Techniques withEducator Bill Gatten28 Matt Malouf’s 10Weeks to Massive,Passive Cash Flow30 A Visit with Senseiat his 12 Rounds Club35 Bruce Norris discusses the 57 Who’s On Your Team?“I Survived Real Estate 2010” Insights by 360 Investments
Platinum Partners A Powerhouse Lineup of Top Industry Experts Presents the Insider’s Edge on The State of REO 2010 The Norris Group’s award-winning event returns September 17, 2010 to the Nixon Library in Yorba Linda, California. We’re assembling an incredible line up of accomplished industry specialists to discuss the state of the REO market, on-going industry regulations, and the opportunities emerging for real estate professionals. New guidelines a ect every sector of our industry. In a climate ripe for both miscalculation and pro table advances, how are our colleagues and partners navigating an industry in continued transition? Our Who’s Who Round Table Includes: Bruce Norris Joseph Magdziarz Tommy Williams Christopher Thornberg President Vice President 2008 President Principal The Norris Group Appraisal Institute National Auctioneers Beacon Economics Association Sean O’Toole Sarah Letts Daniel Phelan Peter Wayman President Director, Credit Loss Mgmt Mortgage Bankers Sr. REO Director Foreclosure Radar Fannie Mae Association Freddie Mac MVT PRODUCTIONSLast year, I Survived Real Estate 2009 focused on the dramatic shifts in regulation facing our industry. This year, ourpanel separates fact from ction as we delve into the health and sustainability of the current real estate market and theopportunities that lie ahead for hungry real estate professionals.To nd out how you can participate as an individual or potential sponsor, see the back of this yer or visit ISurvived2010.com for more information. Seating to this formal dinner event is limited, so go to the website or call our o ce today. Thanks you to all our Platinum and Gold Sponsors and friends for making this unique event a possibility. www.ISurvived2010.com or 951-780-5856
Gold SponsorsBenton Group Investors Association (NSDREI)Delmae Properties Personal Real Estate InvestorElite Auctions MagazineEntrust Mike CantuInland Empire Investors Forum Realty 411 MagazineKeystone CPA Rick & LeeAnne RossiterLas Brisas Escrow Starz PhotographyLeivas Financial Services Tony Alvarez – theREOmentor.comNorth San Diego Real Estate Westin South Coast Plaza Winner of seven communication, outreach, and fundraising awards. SPONSORSHIP OPPORTUNITIESWe can’t do this without your help! Businesses or individuals who are interested inparticipating have two options: 1. SPONSOR the “I Survived Real Estate” Komen Breast Cancer Walking Team in exchange for a seat (or table) at the event 2. JOIN the “I Survived Real Estate” Komen Walking Team and raise money in your network for the walk in Newport Beach September 26th. Every $200 gets you one seat to the event (while seats remain).All donations are made directly to our Susan G. Komen Breast Cancer Walk Team so100% of the proceeds go to the Orange County A liate of Susan G. Komen for theCure.This formal dinner event includes visitation to the Nixon Museum, appetizers, 3 coursemeal, and the live event. Additional bene ts are listed below for those that becomeplatinum and gold sponsors (Please note all funds must be in place July 10th for goldand platinum sponsors to take advantage of initial radio spots). Single Gold Platinum Cost $200 $2,000 $5,000+ Tables (Seats) Received (1) Seat 1 (10) 2 (20) Advertising Logo on Event Website featured SEO-Optimized Pro le Logo on Flyers Name only Digital Signage at Event featured Preferred Seating featured Event Program Ad 1/3 page 1/2 page Radio Show Mention (Intro - 15 total*) Radio Show Mention (Outtro - 15 total*) Event Video (Intro - Single Page) Event Video (Outtro) Press Release Mention Event Bag Marketing Oppotunity Call Diana Barlet at 951-780-5856 or visit ISurvived2010.com for more information and preferred seating. Note: All donations must be made through the “I Survived Real Estate 2010” walk team to be eligible for advertising. July 10th is the deadline for all money to be in place to ensure radio spots include the selected sponsor. There may be more than 15 radio shows that are aired for the run of event.
Don’t You have better things to do than deal with tenants and toilets? Yes, we know you do. This is why the Herrera Sindell Group developed a turn-key program, which provides investors HIGH RETURNS, without any management headaches. With nearly 20 property acquisitionsThe Herrera Sindell Group Offers: per month, The Herrera Sindell Group offers a prime opportunity for busy• Cash-Flow Investment professionals to prosper in this market. Properties in Southern California• Strong Cash-on-Cash Returns Is this opportunity right for you? with Long-Term Holds Visit our ofﬁce and see why so many• Excellent Return-on-Investment investors are enjoying unbeatable (ROI) within 30 to 90 days returns and safety, all while buying the properties of their choice, in local• Options to Utilize Retirement markets and at deep discounts. Plans for Investment Properties• Tenant-Occupied Properties in As featured in Make an appointment to secure your Realty411 Magazine ﬁnancial future with real estate today! Our Local Market The Herrera Sindell Group, Inc.• Property Management In Place, 15060 Ventura Blvd., Ste. 100 No Need to Worry Sherman Oaks, CA 91403 www.herrerasindell.com Toll Free (877) 949-2772 Disclaimer: This is not a public offering nor is it a REIT or hedge fund. This is not an offer or invitation to sell or a solicitation of any offer to purchase securities in the United States or any other jurisdiction. Any securities may only be offered or sold, directly or indirectly, in the state or states in which they have been registered or may be offered under an appropriate exemption.
invest without drama Do you have reservations about becoming a landlord? Triple Net Houses created a program to help investors proﬁt from rental properties without ever having to deal with tenants!I by Carla Fischer n 1903 The Wright (www.triplenethouses. Brothers made history com) takes all the un- in Dayton, Ohio, with knowns off the table. their first power airplane By purchasing a Triple there. When we rehab a property we pretty flight. Net rental, investors will much do everything so we know it’s going One hundred four know exactly what their to be a maintenance-free property. Whenyears later, Peter Julian, CEO of cash flow is going to be we finish, it’s almost like a new house.”Triple Net Houses, reflects on for the next ten years. The company’s record is impressive. “Intheir short three-year revolution- Julian explains: “When the year 2009, we collected 97.4 percent ofary history that began in 2007 as Peter Julian we lease the house it’s a our scheduled rent,” Julian proudly states.a premiere provider of real estate manage- triple net lease, which means we pay taxes, “It even amazes me!”ment. “We’ve reinvented the way people insurance and maintenance. Basically we In Dayton, market rents range from $595invest in residential rental real estate,” Ju- pay all the operating expenses, so there’s to $950. The company rents with a onelian says proudly. He then adds: “It’s kinda nothing our clients have to pay. We man- year lease agreement. A typical scenario If an investor buys a Triple Net House, they know exactly what their cash ﬂow is going to be for the next 10 years. They never have to deal with tenants and never have to deal with or pay for maintenance.overcast. We’re going to get some rain later age the property so there’s no management. is this: A tenant occupies a three bedroom,on, which doesn’t mean a thing for our in- Investors will never have to deal with a ten- one bath home, 1,100 square feet, with avestors who are from all over the country. ant and never have to deal with or pay for one car garage, for $700 a month. ManyThe weather rarely has anything to do with maintenance,” Julian explains. homes are brick with full basements, someour business, unlike the Wright Brothers.” The company offers a 10-year NNN are ranch houses built in the late ’50s. Julian shifts to business quickly explain- (triple net) lease. If investors want to ter- Dayton is home to the largest singleing how he created a NNN (triple net) in- minate early, all they have to do is provide site employer in the state of Ohio: Wrightvesting model, which is traditionally only a 60-day written notice. There is no penalty Patterson Air Force Base with 26,000 em-found in commercial real estate transac- and the investor still owns the property. ployees. The city also has two universities:tions. “It’s a turn-key investment. It pays a Wright State University with an enroll- “I’ve been a real estate broker for a little high yield and we’re able to buy houses at ment of about 18,000, including a medicalover 30 years. I’ve worked with investors low cost and rehab them economically. We school. Next is the University of Dayton,my entire career. When I talk to them, most then pass that deal on to an investor, as a which enrolls over 10,000 students andlike all the good things about real estate, totally turn-key investment. Their total in- also offers a law school program.like the cash flow, the tax write-offs, build- volvement after the investment is to collect As far as the financials, a Triple Net in-ing-up equity, and potential appreciation. a payment from us each month, which is vestor can realize up to 17% return on eachBut when potential investors get to talking electronically deposited into their checking house.about managing, they’ve all heard the hor- account. It’s a perfect storm.” “If the investor pays cash then theyror stories about tenants, maintenance and When asked how Triple Net Houses can will receive 9.1%.” Julian explains fur-all those kinds of things.” provide guaranteed returns for investors, ther: “For example, if they have a $60,000 So Julian and his team came up with regardless of what is going on with their house the investor will be receiving $5,460a unique solution. It’s basic and simple, property, Julian replies: “We’re very care- a year, which is 9.1% of the purchase price.even though it tackles a complicated con- ful in selecting properties in neighborhoods Continued on pg. 47cept. The Triple Net Houses program where we know the rents are going to beRealty411Guide.com PAGE 9 • 2010 reWEALTHmag.com
California InvestorsSpecializing in the Memphis Market!
California Life Tennessee Rentals by Ginger Macias | photography by Sam Green L ast year, while working as a pan- Ginger: What did you do before you elist at a local real estate invest- became a full-time real estate investor? ment club in Los Angeles, I had What is your background? the pleasure of meeting Mathew Mathew: Let’s see, I grew up in the tiny Owens, a certified public accountant and town of Los Angeles and graduated from owner of OCG Properties. I was so im- the University of California, Santa Bar- pressed by his experience and work ethic bara, with a degree in economics and an that I invited him to partner with me on emphasis in accounting. Afterwards, I was syndicating real estate projects. able to achieve one of the accomplishments Having worked closely with him for al- I am most proud of, passing all four parts most six months now, I can say that he’s the of the CPA exam in one sitting, a feat only real deal and you’ll be in for a treat if you 10% of candidates have been able to do. get the chance to work with him. Mathew After passing the exam, I worked as a has many strengths that make him a great CPA, auditor and business adviser, help- partner: integrity, organizational skills, ing my corporate and individual clients and real estate and investment proficiency. increase their bottom line, helping them Plus, he’s very likable. find fraud risk factors inside their business I have met a lot of people in this business, systems and auditing their accounting re- and I expect great things from him in the cords. coming years. I guess that is why I am so good at do- I recently sat down with him to ask about ing due diligence on real estate transactions his real estate investing strategies and the now. The accounting and due diligence current projects he’s working on out in Ten- skills are a perfect match for a real estate nessee. Mathew has purchased, renovated, investor, I just had to adjust my personality and sold or held more than 100 investment to be more outgoing and personable, which properties in the last three years alone. most CPAs are not known to be. Being in Below is a partial transcript of the inter- the real estate industry as a full-time inves- view I had with him. tor, I am finding it is rare to find a CPA who understands the tax and legal implications Ginger: Mathew, in your own words, of investing and the real estate investment what exactly does OCG Properties do? side in detail. Mathew: In a nutshell, we help people in- vest in real estate. At OCG, we sit down and Ginger: So tell us, how did you get your go over our client’s financial situation and start in real estate? resources to help them find the best ways Mathew: I started investing about five to invest and meet their individual goals. years before I decided to take some real With good in-house management in place, estate education courses and quit my cor- you can hold for long-term growth and re- porate job cold turkey. I found that the skill ally get a great return on your money. On sets I gained from working at CPA firms top of that, the price points are low enough were hugely valuable, and I still hold the that you can buy with cash and not even partners of those firms with the upmost have to deal with financing. Talk about low respect for what they taught me, the eth- risk! ics they instilled in me and the guidance We help our clients achieve great returns they gave me. However, the skills that I on their money while doing all of the due have developed running my own company diligence on every investment. We bring a are unparalleled to anything I would have ton of real estate experience to the table and ever expected. While working for myself, help our investors every step of the way. I started flipping and holding properties >Realty411Guide.com PAGE 11 • 2010 reWEALTHmag.com
in Memphis. I got through my initial learn- that the current reported unemployment to go out and develop a team in every mar-ing curve and kept striving for more deals rate is 12.8%, there is a $19.9 billion dollar ket, which is exactly what we did out inwith a magnificent obsession for real estate gap in the California budget, the California Memphis. We have in-house managementthat only few can really understand. It was mortgage delinquency is up almost 100% and a team on the ground there that helpstough, but after getting through the strug- year on year, 90% of us get all of thegles, you find yourself breaking through the Alt-A and Option Mathew Owens, his brother and little sister. information weand finally achieving success. Working that ARM loans coming need to be suc-much taught me multiple things. But one due are underwater in cessful.thing stuck more than anything else: Pas- California, 1/3 of Op-sive income is the goal! tion ARM loans are Ginger: What delinquent already, the team membersGinger: You live in Southern California California tax rate rose should one haveand invest in Memphis, Tennessee. Why from 9.3% in 2008 to when investingdo you invest so far away from where 9.55% in 2009, and it out of state?you live? will rise again to cover Mathew: ThereMathew: That is right, I live in sunny the gap in the budget. are a number ofRedondo Beach and invest in Memphis. On top of all that, team membersMost of the investors I meet ask me this people who are under- you need in orderexact question, and the simple answer is: water in their homes to be a success-I invest with logic and statistics, not based and not in financial ful real estateon what my emotions are telling me. hardship are starting investor. At the Look at the economics in the Memphis to walk away because top of the listmarket. It has one of the highest price-to- it does not make finan- for any buy-and-rent ratios in the nation! It did not take a cial sense to hold them hold investor is ahuge dip like a lot of markets, it had an av- and hope they go up great, and I meanerage annual appreciation of 4% per year $200,000! G R E AT, p r o p -over the past 20 years. It’s a very stable e r t y m a n a g e r.market. The population is also expected to Ginger: I’m an out- Property man-increase and you can pick up property that of-state investor too but other investors agement is the number one reason an in-not only cash flows but gives you apprecia- may be skeptical about owning property vestment property will fail to produce posi-tion potential in the next 10 years, which is so far away. tive cash flow, assuming you did your numbers correctly and did not buy in a ghetto. In addition, an investor needs lend- ers, REALTORS®, inspectors, appraisers, attorneys, CPAs, IT consultants, marketing agents and the whole nine yards to really develop a good system. Each team member is crucial to your success, and that is why investing in real estate can be so difficult at times. Your team can make or break you, and you need to have reliable team members that communicate well with you to be suc- cessful. Ginger: What separates your company, OCG Properties, from the rest? Mathew: At OCG we have in-house prop- erty management, which is the key to our A sample OCG Property. and your investment success. We also take an ethical and conservative approach to in-not something I can say about California. Mathew: They are really missing out! vesting and do all of the right due diligenceCalifornia is a huge risk right now for buy- Ginger, we both know that with technolog- on every investment.and-hold investments. ical advances you can invest anywhere in We really care for our clients and care If you take a look at some of the econom- the world now, and it’s as if you’re invest- about their goals and what their interestsic indicators in the California real estate ing in your own backyard. are. We have a guaranteed tenant and reno-market, some of the things you will find are The reality is, everyone has the resources vation on every property, and put the properRealty411Guide.com PAGE 12 • 2010 reWEALTHmag.com
structuring and risk miti- exactly what the majority of men do.”gation procedures in place If you never quit, you will succeed noon every investment. We matter what adversity you face.also set up proper com- Ginger: What is the first step someonemunication procedures needs to take to invest with you?for our management com- Mathew: They need to call us and sched-pany to keep our investors ule a consultation. We look at each inves-frequently updated on the tor’s resources, financial situation and in-progress of their invest- vestment goals to make sure we help themment. invest the right way and surpass their indi- vidual investment goals. Once an investorGinger: What due dili- schedules a consultation with us, we movegence is done on your them from sitting on the sidelines to devel-investments? oping a passive income stream to retire onMathew: Wow, where — as fast and safely as possible.do I begin? I will giveyou the quick version. To Ginger: Do you have anything else youstart off, we do a complete Mathew: Do not give up, no matter what. would like to share with our readers?neighborhood analysis on every property Any business, any new venture or opportu- Mathew: Yes, thank you. I would just likealong with a market value analysis, which nity that you want to achieve, is 90% men- to add that some people will make up ev-includes pulling comparable sales and get- tal and 10% skill. If you never give up, you ery excuse in the book for why they do notting an appraisal done before we close es- can never lose. It’s best said in the book or cannot do something. I am here to tell “With technological advances you can invest anywhere in the world now, and it’s as if you’re investing in your own backyard.”crow. We also do a rental analysis, cash “Think and Grow Rich” by Napoleon Hill: you that you can do ANYTHING if youflow analysis, profit analysis, renovation “Before success comes in anyone’s life, focus and take ACTION steps towards itsanalysis and every kind of analysis a CPA one is sure to meet with much temporary achievement.can think of to protect ourselves and our defeat, and, perhaps, some failure. When Do not let your emotions tell you it can-investors. defeat overtakes someone, the easiest and not be done, even if you were not initially In addition, we get an inspection by a most logical thing to do is to QUIT. That is successful. Even if it is difficult to see howqualified inspector and compare it to the you are going to accomplish it, don’t giverenovation bid. Each renovation bid comes up. There is always a way, but it comeswith an item-by-item, room-by-room down to taking action. Most people givebreakdown of the renovation costs, includ- up at the mere thought of difficulty, anding materials and labor. This is extremely your success in real estate, and in life, areimportant so you know what your costs are going to be based on your ability to focusgoing to be on future renovations. When and take action.leasing a property, it is important to get a Also, a successful investor has to bequalified tenant. If you do not, you will be completely dedicated. They must ignore allsorry later when you have to evict them of the people who have an opinion but arebecause they cannot afford the rent. We less- educated about the subject.qualify them similar to a home loan pro-cess. We look at their debt-to-income ratio Ginger: Thanks, Mathew. I wish youand credit. We do a background check and continued success in your investments.really get a good assessment of their per- Mathew: You’re welcome, Ginger.sonality, which can tell you a lot. For more information, please visit:Ginger: What tips can you give to people www.ocgproperties.com or email:who want to get started investing in real email@example.com | OCG Propertiesestate? Photograph of Mathew Owens by Sam Green can also be reached at: (424) 757-4680Realty411Guide.com PAGE 13 • 2010 reWEALTHmag.com
Invest Investment Vampires in YOU for the Next Decade by Richard Barrett T Never Miss an Issue! he ten years ahead of us will be cant inflation soon. Experts argue that de- Realty411 Realty411 Wealth Real Estate extremely difficult for investors. flation is the bigger risk. While that may th A e Pu Sp blish ec ia l Ed s of er iti Real on ty fro 41 m 1 Yield and growth will be scarce, be true, it does not make inflation any less www.realty411guide.com | Vol. 3 • No. 2 • 2010 A Resource Guide for Investors Tips for Long-Distance Vol. 1 • No. 1 • 2010 LANDLORDING Turn-Key Rentals but much worse will be the four destructive when it starts nibbling at your Around the Nation Cash Flow from the Comfort of Home vampires waiting to suck the life out of investments. almost every investment you consider. In Mathew Owens, CPA, owner of OCG PROPERTIES Buys & Rehabs Rentals in Tennessee from Redondo Beach Look Inside Get the Deals DONE Learn Creative Real Estate Techniques from Dave Lindahl, Dolf de Roos, this article, we will meet each vampire in- Garlic to Protect Your investments from dividually, understand how they drain your the Inﬂation Vampire Bruce Norris, Bill Gatten and more! FREE Wealth Celebrating the Largest Report! Issue with More Pages & Opportunities than Ever! photo by Sam Green Serving the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth 16 Words of Wisdom from Masters of Real Estate 19 Maverick Investor Group Reveals the Next BIG Thing 35 Bruce Norris Prepares for Annual “I Survived Real Estate” Charity investments dry and learn about some “in- To protect against the corrosive power of vesting garlic” that can keep them away. inflation, you need investing vehicles with 2 Magazines, 1 Mission: three specific features: To GROW Your Wealth Inﬂation: the First Investment Vampire. •Asset value that tracks inflation. If you remember President Gerald Ford •Asset income that tracks inflation. Subscribers are Invited to then you may remember his “Whip Infla- •Asset that has considerable leverage. Our VIP Networking Events tion Now” campaign, created to fight infla- It’s no surprise that investment real es- tion climbing over 10%. 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T he world of real estate investing is a small one. Investors rub elbows at similar events, read in- dustry publications and generally run in the same circles. Carter Froelich, an author, investor andCEO of The Property Ledger, recalls the time he met best- give & the latest DolfreadersCarter Tips from AZselling author and renowned educator Dolf de Roos, Ph.D. The two savvy Phoenix-based investors became friendsafter an introduction by Andrew Waite, publisher of the Ari-zona-based, Personal Real Estate Investor magazine. At the time, Froelich was busy developing The Property Interview by Carter Froelich, CEO of The Property LedgerLedger, his online software designed to analyze propertyholdings, store documents and forecast future returns. Onceready to launch, he asked de Roos to test out his creation.That was three years ago, and de Roos still uses the softwareto track his portfolio. Recently, Froelich welcomed de Roos home from his ex-tended visit to Australia. The famed author of eight books,including the New York Times Best Seller “Real EstateRiches,” was visiting Down Under to raise private moneyfor property investments in Arizona. It proved to be a won-derful opportunity for one master investor to interviewanother. Froelich enthusiastically took on our assignmentand provided an outstanding interview. This indeed is a rare treat; prepare to learn from two of Dolf de Roos Carter FroelichArizona’s top real estate investing giants. —The EditorCarter: Hello, Dolf. Tell us about what Dolf: I like being on the cutting edge of cloud, you can access your portfolio’s de-you’ve been doing lately and give inves- what is available. I have always done well tails from any computer connected to thetors your perspective on the market. with new technology. When fax machines Web. Before long, most services will haveDolf: Well, Carter, although the media re- came out, it saved us thousands of dollars a that feature, but by then The Property Led-peatedly states this is the worst real estate year in courier fees. ger will have innovated yet another area.market we have seen in decades, it is only Now, we don’t fax; scanned attachments Surfing is so much easier one foot ahead of the wave than one foot behind. Furthermore, having all the details of “... with the information stored in the cloud, a property, including title documents, HUD1s, leases, management agreements, you can access your portfolio’s details from and the like, stored in one central reposi- tory is simply a great way to run your prop- any computer connected to the Web.” erty investment business. Once you have experienced it, it is difficult to revert back. It would be like going back to using slide-the worst market if you are in the unfortu- are better quality, in full color and don’t rules, or for those readers not old enough tonate position of being forced to sell. If you require an outdated phone system to get remember what they are, the curly-pagedare in the fortunate position of being able through to a recipient. and faded fax machine — if they even re-to buy, then by definition, this is the best When I come across people in the real es- member that!market we have seen in decades. tate industry who do not use email, and in- With that said, there are still many who sist on using faxes exclusively, I think they Carter: Since you travel often, are thehave trepidation about entering our current must miss out on deals because of their features of Electronic Library useful?real estate market. This has forced me to go aversion to new technology. I do not want Dolf: Absolutely. In fact, more and moreoverseas. There are many countries right to fall into that trap. The Property Ledger companies are trending towards cloudnow experiencing the peak we saw a few is cutting edge, extraordinarily useful and computing. Clearly, it is convenient toyears ago so they see the relative merits of easy to use. Why would you not use it? be able to access all the relevant data onbringing their money to the United States a property from anywhere and not haveand investing here. Carter: What benefits are provided by to be concerned with taking up space on The Property Ledger, which other prod- your own computer, keeping data in sync,Carter: Why did you become interested ucts do not provide? having the data concerned fall into strangein The Property Ledger? Dolf: With the information stored in the hands in the event of a computer loss, in-Realty411Guide.com PAGE 16 • 2010 reWEALTHmag.com
stalling upgrades, etc. It is all done for the investments regularly, with real estate, you simply the income divided by the invest-end user. can buy a property and put the title in a bot- ment. With real estate, since you only need tom drawer, take a six-month cruise, and to come up with a small portion of the pur-Carter: Why is it important for investors not worry if you should sell the property chase price in cash, the cash-on-cash returnto monitor the financial performance of again. However, it is comforting to be able becomes very important and, dare I saytheir real estate portfolio? to put your finger on the pulse of how your it, interesting. It is an advantage inherentDolf: Interestingly, it is important for inves- investments are performing. in real estate investing that is often over-tors in stocks and commodities to maintain looked by financial advisors.a vigilant eye on their volatile investments Carter: What is your favorite financialso that they can jump ship if the ship starts calculation when analyzing your proper- Carter: What type of investment doto sink. With real estate being a much more ties? And why? Here are the choices: you favor right now and why?stable investment, much of the interest in •Gross Rent Multiplier Dolf: When it comes to residential property,monitoring your portfolio is just that: inter- •Cash-on-Cash Return on Investment I prefer the single-family home. However,est. However, if you want to know when •After Tax Cash-on-Cash Return for the last two decades, I have personallyyou can invest in yet another property, •Internal Rate of Return focused on commercial real estate. Thatbased on cash-reserve build-up, equity po- •Return on Equity doesn’t mean I haven’t invested in othersition, available collateral, etc.), then you Dolf: I like to analyze based on cash-on- sectors but the benefits of commercial realwant to have the up-to-date information cash return. This calculation shows you estate for the property owner are incred-available instantly. The Property Ledger how the cash you are putting up is perform- ible. Here are just a few of the benefits:provides just that when you need it. ing. It is the prime indicator of how you 1. The leases tend to be much longer — can truly leverage your money. What other anything from three to twenty years. TheyCarter: How often should an investor investment allows you to get a $100,000 are generally secured by the business, withtrack the financial performance of their asset for only $10,000 or $20,000 in cash? the owners offering a personal guarantee.real estate portfolio? For most investors, you can’t buy 2. Commercial tenants tend to maintain theDolf: As often as they feel comfortable. $100,000 worth of stock or gold or oil property better as the look and condition ofOne of the advantages of real estate invest- without coming up with the entire pur- the property is important to their business.ing that I often tout is that unlike the stock chase price in full. When you put up all themarket, where you have to monitor your money to buy an investment, the return is Continued on next page
Dolf & Carter, pg. 17Tenants often improve and up- the Gilbert Planning Commis-grade the space with their own sion. This is indicative of themoney. long term. In the short term,3. With residential property, the things look pretty grim, again,landlord tends to pay the outgo- if you are forced to sell. Thereings such as property taxes, in- is word on the street that theresurance and maintenance. With will not be a u-turn for years.commercial real estate, the ten- Things go in cycles. Whenants who are leasing the prop- you get old enough to haveerty, pay for those expenses. experienced a few cycles, you learn to embrace them ratherCarter: We’re both located in than fear them. There will be aArizona; let’s discuss the local turnaround. If you can buy realmarket. Where is it heading? estate that cash flows now andDolf: I’m optimistic. There was have a great chance that longan article in the paper just three term the capital value will godays ago stating Taylor Morri- up immensely, why would youson Homes will begin construc- not acquire some real estate?tion in July of a master-planned Learn more online aboutcommunity in Gilbert. There The Property Ledger, visit:will be 17 phases developed www.thepropertyledger.comover the next 12 years accord- To reach Dr. Dolf de Roos, visit:ing to the report submitted to www.dolfderoos.com FREE e-Book Offer, For a Limited Time! Download The Real Estate Wake Up Call Today http://thepropertyledger.com/buy/90-the-real-estate-wake-up-call-e-book-free
Maverick Investor GroupScours the Globe for theBest Investment Properties Interview by Linda PliagasW ith a name like Maverick, one immediately expects the unex- pected. Real estate with a hipand a bit of a rebellious twist. Maverick Investor Group delivers all thatand more. It is a real estate brokerage thatcaters to a community of sophisticated realestate investors and agents, all of whom arecommitted to using real estate as a vehiclefor designing their lifestyles. The broker-age is licensed with its primary office inLas Vegas, but the Maverick principals alllive in different states, work from laptopson rooftop pool decks, and travel the globein search of premium buying opportunitiesfor their exclusive clientele. Maverick negotiates directly with devel-opers and owners for prices and terms thatare not available to the public. The buyingpower of the Maverick community enablesdevelopers to move more properties in lesstime and save money on advertising, mar-keting and other normal overhead. This al-lows them to offer special prices and termsto buyers in the Maverick community thatthey could not offer to the general public. Indeed, the traditional brick-and-mor-tar neighborhood brokerage dedicated tofarming a five-mile radius, driving buyersaround and sitting at open houses seemslike an archaic business model next toMaverick. Even more avant-garde than their busi-ness model is their corporate vision: “To Mark Solak Valerie Schrock Matt BowlesNext Destination: The Hidden Tropical Paradise of...Nicaraguaradically improve people’s lives through close as many as 34 transactions and pay the international component, is just a con-real estate.” out nearly a quarter of a million dollars in tinuation of the global lifestyle enjoyed by And their radical approach to real estate buyer referral fees to real estate brokers in its principals. The company was foundedis working. Even during 2009, in a single the Maverick Referral Network. by Mark Solak, Valerie Schrock and Mat-90-day period, the company was able to Maverick’s business model, including thew Bowles — real estate investors >Realty411Guide.com PAGE 19 • 2010 reWEALTHmag.com
and licensed real estate professionals with worthy people I had ever met, all essential we use. It was crucial for everyone to startformal, advanced degrees. Prior to joining qualities for business partners. The three of with the vision of their own ideal lifestyle.forces, they led cosmopolitan lives, trav- us began pooling our skills, resources and Matt likes to work from his rooftop pooleled the world and lived in foreign coun- creative energies to develop a cutting edge deck in LA, Mark likes to spend extendedtries for extended periods of time. business model that could provide unparal- time in Europe each year, and I like to go Recently, I caught up with the Maverick leled advantages to real estate investors and skiing in Canada and spend part of the yearpower trio to discuss their latest turn-key real estate agents. In 2007, it was ready to in Phoenix with my parents. So we struc-buying opportunity—the Seaside Mariana be launched so we all quit our jobs, flew to tured our real estate business to facilitateSpa & Golf Resort on the Pacific coast of Las Vegas and, while overlooking the Strip our dream lifestyles. But, more than that,Nicaragua. from a rooftop lounge, raised our glasses Maverick has built an entire community Seaside Mariana Spa & Golf Resort features the first Jack Nicklaus Signature Golf Course in Nicaragua.Q: How did the three of you become busi- and announced to the world that Maverick of real estate investors and agents who areness partners? Tell us a bit about how Investor Group was born! focused on using real estate as a vehicleMaverick Investor Group formed? for designing their dream lifestyles. WeMB: Well, Valerie and I met in graduate Q: The Maverick partners live in differ- show our clients how to do what we do.school in 1999. We both got master’s de- ent states — Matt is in Los Angeles, Valer- You will notice that we have a section ongrees in International Peace and Conflict ie is in Washington D.C., and Mark lives our website that discusses “real estate life-Resolution and then worked in human between Chicago and Las Vegas. That is style design” in great detail, down to therights advocacy in Washington, D.C., for pretty incredible! How did you decide to specific technology products we use. Realseveral years. We started investing in real structure your company like that and how estate investing is only a means to an end…estate on the side, reading books about it does it affect your business? it’s always important to keep your eyes onand learning by experience. Soon we had VS: We were intentional about structuring the larger prize. Money isn’t very usefulmillions of dollars in real estate holdings in the company that way from day one, and if you have lost touch with your dreams.states all over the country. the primary reason is “freedom of mobili- How can real estate enable you to recapture I met Mark in 2005 when he sold me over ty” for the Maverick partners. It’s all about your time, design your dream lifestyle and$2 million worth of investment properties lifestyle. We can live wherever we want make enough money to finance it? That’sin Las Vegas. I was blown away by his and travel whenever we want for as long the big picture.customer service; it was the best I had ever as we want, and no business falls throughseen in any industry. These were two of the the cracks because of the systems and pro- Q: Maverick has always encouragedmost talented, ambitious, honest and trust- cesses we have set up and the technology out-of-state investing, why are you nowRealty411Guide.com PAGE 20 • 2010 reWEALTHmag.com
moving to international real ment in Nicaragua, makingestate? it particularly friendly to for-MS: For the same reasons, eign real estate investors.we’re just expanding the play- For example, as an inter-ground. The reason why I national investor who liveswould never limit myself to in the US, I can own freeholdbuying in my own city or state property in Nicaragua withis because there might be a bet- title insurance from a North-ter market than the one I live American-based title com-in. The failure to consider in- pany, and when I sell it forternational real estate markets a profit I will owe no capitalproduces the same restriction. gains tax in Nicaragua. Pres-I want my money in the best ident Ortega has personallymarket in the world no matter endorsed the Seaside Mari-where I live, period. Maverick ana resort because it is an-is opening up a private chan- ticipated that it will result innel for real estate investors to an explosion of tourism andaccess unlisted properties in be a huge economic boon forpremium global markets, with the country. So the govern-property management options ment is very supportive ofin place and a variety of exit foreign investors coming instrategies. Buying through to buy real estate.Maverick has always meant Seaside Mariana Spa & Golf Resort sits on 2 kilometers of pristine beach front.getting exclusive prices and Q: What kind of deal termsterms that are not available to up the coast is Nicaragua. It borders Costa was Maverick able to nego-the public. That has simply expanded to Rica and has the same weather, the same tiate at Seaside Mariana and how can ourthe international arena. beaches, the same sunsets, but a much readers get in on the action? lower cost of living and, at the moment, VS: As you know, our prices and termsQ: Why did Maverick choose Nicaragua? much lower property prices. Seaside Mari- are not available to the public, so I cannotAnd why the Seaside Mariana Spa & Golf ana will be Nicaragua’s first luxury resort unveil any details here. I will tell you thatResort project in particular? with a five-star international brand hotel this is one of the most extraordinary dealsMB: Over the last two years, the Maverick and a Jack Nicklaus signature golf course. I have ever seen and that we have a globalpartners have traveled throughout Europe, We are talking about a 923-acre resort on exclusive on the entire resort—the onlythe Middle East, the Caribbean and Central 2 kilometers of pristine beach front. Noth- way to buy a property at Seaside MarianaAmerica to review real estate projects. In ing like it currently exists in Nicaragua. is through Maverick.our opinion, Nicaragua is one of the pre- This project will single-handedly take the For detailed information and private ac-miere emerging markets on the world stage country to the next level as a tourist desti- cess to our special prices and terms, yourtoday. When you look at a map of Central nation. When the number one golf course readers will need to become part of theAmerica starting from the south, you be- designer in the world chooses to go into a Maverick community. Real Estate Inves-gin with Panama, then Costa Rica — both market for the first time, real estate inves- tors can apply to join our community ofof which have already exploded as tour- tors should perk up their ears. It is exactly VIP Buyers and get access to unlisted dealsist destinations over the last 15 years and these types of seismic events that I look for like Seaside Mariana. Real Estate Agentshave seen corresponding appreciation in when I choose where and when to invest can apply to join the Maverick Referralproperty values — and the next country my own money. Network and make 3% every time their cli- ents close on a Maverick Deal. Q: What is the political We invite smart real estate investors and and economic climate in savvy real estate agents to contact us today. Nicaragua right now? We don’t care if someone has a lot of ex- MS: Nicaragua has had perience, we care if they are serious about a democratic government using real estate to build their wealth and for the past 20 years and design their lifestyle. has had five transfers of power during that time. For information, contact Maverick Investor Recently, the government Group: www.maverickinvestorgroup.com or has been passing laws to email: firstname.lastname@example.org. encourage foreign invest-Realty411Guide.com PAGE 21 • 2010 reWEALTHmag.com