This document summarizes an article about investing in apartment buildings for passive income. It discusses the benefits of investing in apartment buildings over flipping single family homes, including: receiving monthly rental income without having to work; paying little to no taxes on profits from sales; and hands-off management of properties. The article also outlines some of the risks of flipping single family homes, such as relying on unreliable contractors and dealing with tenant issues. It promotes a mentorship program to teach readers how to successfully invest in apartment buildings.
Discover strategies for real estate wealth and passive income
1. Wealth
Real Estate
Vol. 1 • No. 4 • 2011
INSIDE:
Get Out of the
Sam Sadat
Rat Race with The Master of
Passive Income Motivation Speaks
Discover Why
Now is the
Time to Buy!
Learn from
the RE Divas
Welcome to Sam’s RE Club
at the Beverly Hills Country Club
4. Chris & Ruth
Property Flipping Experts
Share their Secrets on how to rehab and flip properties
for Big Profits in this great Foreclosure Market
in the Southern California Area.
BEFORE AFTER
Upcoming Property Tour Event
Check our website for Calendar of Events in Southern California Only.
www.CaliforniaHomesRepos.com/blog
Free!
Receive Chris & Ruth’s “Property Analyzer” and guide to “How To Start Your Flipping Business”
562-304-7787 or log on to: CaliforniaHomesRepos.com/blog/realty411
www.CaliforniaHomesRepos.com
5. contents
8 and 22 Top secrets from master investor and educator
Dave Lindahl.
10 An interview with Sam Sadat, the
director of Sam’s Real Estate Club.
15 Invest with the best, invest with
MemphisInvest.com.
19 Entrepreneur and
investor Kent Clothier
takes the road less
traveled and succeeds.
20 Black Belt
Investors teaches us
how to master the art
of the flip.
24 True Wholesale
Houses delivers steady
returns for investors in
a volatile industry.
27 Market spotlight: Kevin
and Alex are at the forefront of multiple
top South Eastern markets.
28 Americans Flip to Australians in AZ.
29 Tyrone Jackson wants to diversify your
real estate portfolio with stocks.
30 Christian and Ruth teach Southern
Californians their property rehab secrets. ���������������������� ����������������������
33 Richard Barrett asks: What is ������������������ ���� ������� ������� ������ ��� ����� ��������
your real estate time? ������������������������������ ������������� ����������� ���� �� ������������������������������������������������
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34 In memory: Fred Tingley’s ������� ������ ������ ������� ���������������������������������� ���������������������������������������������
last real estate column for fans. ������� �������� ����� ������� ��������������������������������
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35 Market spotlight: Phoenix, Ariz. ��������������������������������� ���������������������������������
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36 Top 20 excuses for failure. ���� ������� ������������ ������������������������������ N ATIONAL R E
EAL STATE
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38 Gary and George’s monopoly�����������������
secret. ������������� I NSURANCE G ROUP , LLC
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39 to 53 Meet the hip real �������� ��� ���� ��� �� ���� ��� ���� ����������������������������������������������������
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estate divas of today:
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Ladies in the industry give ������ ����������
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54 Maximize your legal protection. ������������������ ��������������� �������� ��� ����
�������������������� ���������������� ���������������������
57 Inside the cashflow board games. ����� ��������� ������ ������ ���� ���� ��� ���� ������� ������������������
58 Tom Wilson gives his insight �������������������������������� �����������
on the market recovery.
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61 Guild Mortgage clarifies misconceptions about financing. ���� ����� ����� ���
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Questions? Need a Referral? ������������������������������ �������������������������������
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805.693.1497 or 310.499.9545 �������������������������������� ����� ��������� �������� �� ����
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Photo credits top right and clockwise: Sam Sadat, Kent Clothier, ���������������������
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Kathy Fettke, Terica Kindred, Tyrone Jackson and Jay Hinrichs ��������������������
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Realty411Guide.com PAGE 5 • 2011
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8. If Single Family Homes Are Such Great
Investments, Why Do Most ‘Investors’
Still Go To Work Every Morning?
W
by Dave Lindahl
ouldn’t you love to discover
how to make $9,700 plus in
passive income month after off, or can’t work for awhile,
month… and how to reap huge positive you have no income. That’s not
cash flows from real estate — with less financial freedom.
risk, less money down, and no tenant
headaches? 4) The government takes
I’ll tell you what, if you want to collect 33%-50% of your profits!
an automatic monthly income of $9,700 When you hold houses for less
or more — without having to get up ev- than a year, your profits are
ery morning and “go to work” — then taxed at the painfully high rate
you need to know that most real estate of “ordinary income”. Com-
experts are giving you the wrong ad- pared to my approach, you have
vice! far less cash to roll into the next
See, they rave about buying and selling property. The result: It could
single family homes, but they don’t tell take you twice as long to attain
When you’re flipping houses, you’ve got to
keep working to earn your next “paycheck”.
you about the risks and downsides. They 1) You’re at the mercy of contrac- financial independence.
don’t admit that single family homes are tors. Most bargain homes are in disre- If you’ve read the best-selling book
poor investments for passive income... pair. You’ve got to renovate them, but Rich Dad Poor Dad, you understand that
for attaining real financial freedom. most contractors are unreliable. You’ve income-producing assets are the key to
Now don’t get me wrong, if you can got to oversee everything they do, or risk financial freedom. You also know that
wait a few years for your upside, single paying for their mistakes. And the good Robert Kiyosaki (the book’s author) built
family homes have a history of appreci- ones are always booked up for months in his personal fortune through buying and
ating nicely. And if you’re happy making advance. holding real estate.
one-shot profits, flipping houses can be Unfortunately, Kiyosaki doesn’t go
an exciting business. Over the past eight 2) You lose money for four to six into detail about how he selected, man-
years, I myself have bought, rehabbed, months. That’s how long it takes to fix aged, or sold his properties. That’s why
and/or sold 422 houses. If you can pull up a house and resell it. When your con- I’m writing, “The Real Secret…Apart-
it off (despite the risks), you can make tractors drag their feet, you’re left help- ment Buildings And How To Manage
a big profit in four to six months. It can less and stressed out. Every day your 642 Units With One Phone Call Each
be a good business model. But it’s not house sits vacant, your bank account is Month!”
financial freedom. further depleted by loan payments, taxes, Today, I own 33 multi-family apart-
When you’re flipping houses, you’ve insurance, and utilities. ment complexes, with 7,322 units in all.
got to keep working to earn your next Yet, I never deal with a single tenant,
“paycheck”. You’ve got to keep market- 3) Your job never ends. When you their complaints, any repairs, or vacan-
ing, buying, renovating, and selling. finally sell, you’ve got to start all over cies.
again, marketing, negotiating, and over- My carefully chosen property manag-
This is the life of a “house flipper”; seeing your contractors. If you take time ers handle 100% of the tenant manage-
Realty411Guide.com PAGE 8 • 2011 reWEALTHmag.com
9. ment. I have one phone call per month from bonds, CDs, or mutual funds, infla- Fortunately for you, I have created
with each of them; that’s it. tion devalues your principal. But when a very successful but limited mentor-
Last year, I sold four of my proper- your buildings appreciate and your ten- ship program. Its aim is to take you by
ties. After paying off my loan balances, ants pay off your loans, you create huge the hand and share with you the proven
I received four separate checks for over equities, and eventually own them free tools you need to be successful in invest-
$200,000 apiece. And I used a legal and clear. ing. But with everything in life there is
tax loophole to pay zero taxes on three of course a catch. And the catch is that
of them. I can show you how to do the 4) Hands off management. Because I can’t work with everyone. There isn’t
same. Why haven’t you heard more apartment houses offer so much income, enough time in the day. But my strate-
about apartment
buildings?
Because apart-
ment inves-
tors don’t want the
general public to
know about their
successes. Apart-
ment inves-
tors are already
wealthy. Just look
at the late Red
Auerbach of the
Boston Celtics. He
made his real mon-
ey buying apart-
ment buildings,
then branching off
into hotels. Like-
wise, Arnold
Schwarzenegger
made his first for-
tune buying apart-
ment houses in
Colorado.
Here Are The Big-
gest Advantages That I See In Apart- property managers charge an average of gists and I can work with a select group
ment Investing: just 4% of the gross rents (versus 10% of people.
for single family homes). There is no better time than right now
1) Apartment buildings are “cash to find out if you qualify for the mentor-
cows”, especially when compared to sin- 5) Cut your taxes in half. Instead of ing program.
gle family homes. For example there is a paying 33% - 50% in taxes, you’ll pay To take my brief questionnaire to de-
six unit building I own in Brockton, MA, the low capital gains rate (now 15%). termine if apartment investing is right for
that nets me $1,877 per month (after all you, and to see if you qualify to become
expenses)! Think about it, more units in Seventeen years ago, I was fortunate one of the lucky few people I will men-
each property brings you more income. to have a mentor that showed me the tor, visit Rementor.com/Realty411, do
truth about apartment investing and he it now.
2) You start profiting instantly. Rather was there to take my hand and get me My mentor made me promise that
than being drained for 4 to 6 months, started! when I became successful, I would pass
carrying the costs of a vacant house, you Now whether you have ever invest- on my knowledge. I hope you are one of
enjoy positive cash flows from day one. ed in real estate before or if this is just the few people I take under my wing to
And you can live off that income, so you something that you have always thought share these powerful techniques.
don’t have to go to a job everyday! about doing, I would love to take your
hand and share with you the exact strate- See How One Mom Makes $7,487/Month
3) Build huge equity and live off the gies and processes that have made me a Part-Time at:
cash flow. If you live off the income multi-millionaire. www.Rementor.com/Realty411
Realty411Guide.com PAGE 9 • 2011 reWEALTHmag.com
10. Mr. Motivator
The founder of Sam’s Real
Estate Club in Beverly Hills
discusses his start in real
estate and explains why
his message of abundance
is so urgently needed into
today’s volatile market.
article by Linda Pliagas
photography by John DeCindis
the nation and eventually made his home
base in Santa Monica, Calif.
Sam’s passion, other than putting togeth-
er real estate transactions, is the study of
metaphysics and spirituality. It is this reap-
and-ye-shall-sow philosophy, which also
permeates at his club, that has attracted
many loyal monthly followers to converge
at the Beverly Hills Country Club.
“I try to shift people’s mindset from scar-
city and lack to that of abundance,” reveals
the daily meditator. “Most people think that
motivation comes from the outside, but that
is an illusion. The fact is, motivation comes
from within.”
Sadat began his quest for real estate
knowledge shortly upon graduating from
T
The University of Texas at Austin, with a
degree in mechanical engineering. He re-
calls: “At the time, I was working for cor-
he Westside of Los which encourages individuals to take action porate America. I took a hard look at my
Angeles is hustling for a life of fulfillment. bosses, who had already been working
with investor activity. With over 2,000 members throughout there for 20 to 30 years, and I knew there
Within a five-mile ra- Southern California, Sadat attracts visitors had to be a better way.”
dius there are no less from up to two hours away. His club also In his quest for real estate, he first became
than seven real estate hosts some of the nation’s most sought-after attracted to real estate finance because he
clubs, serving thou- speakers, such as Than Merrill, Scott Mey- realized that “knowing the numbers,” was
sands of investors. But ers, Richard Roop and Reggie Brooks. vital. Part of Sadat’s real estate education
one organization goes way beyond simply Sam’s Real Estate Club founder is Sam led him to start attending real estate clubs.
being a club that talks about real estate. It Sadat, a spirited U.S. immigrant of Persian He fondly recalls attending investment
is more of a self-help investor organization, descent who has lived in numerous parts of gatherings in different parts of the country,
Realty411Guide.com PAGE 10 • 2011 reWEALTHmag.com
11. including Colorado. By the time Sadat be- “Fear.” He adds: “That is really the funda- creative transaction, later he found out the
gan to live in Los Angeles, he was already mental reason why people don’t act, it’s be- seller was attempting to sell the same prop-
experiencing phenomenal success in real cause of fear. The fear of the unknown and erties again!
estate finance, including traditional mort- fear of failure are really two of the most “It was a learning experience for me and
gage and hard money lending. He was also incredible fears that we have.” for others of what not to do, not having
buying, rehabbing and flipping properties While Sadat is thankful for the success gone though a traditional escrow caused
as a sole investor and also with partners. he has found in real estate, it hasn’t al- me a lot of aggravation and money because
It is then that he says he felt a longing ways been smooth sailing. “I lost millions I ended up having to take legal action.”
to create his own space. “I wanted to have because of the Northridge earthquake in During emotionally and finan-
a forum for me. I wanted to make sure I 1994,” he confides. (Most Californians do cially devastating times, Sadat turns in-
could inspire people.” ward for strength and relies
He carved out a space in on words of wisdom from
Van Nuys and began to
host monthly meetings in
The Scoop on Sam’s Real Estate Club the individuals he admires
most: Carl Yung, Wayne
May 2003. The number Join Sam Sadat the 4th Wednesday of every Dyer, Ralph Waldo Em-
of guests soon swelled month at the beautiful Beverly Hills Country erson and Rumi, a Persian
into hundreds of people. poet.
Sadat prides himself in Club. Meetings start at 7:30 p.m. and usually Successful attributes in
having a club where edu- last about 2 1/2 hours. Reserve your seat online life, like in real estate, need
cation, not promotion, is for $10 per person, which includes valet parking. to be developed. “I’ve heard
the focus. my shares of ‘no’. I’ve had
His goal is to transform Please register for the club meeting online at: to work on myself. It’s a life
each one of his members www.SamsREClub.com mission.”
from being a potential in- For Sadat that calling
vestor into an active one. is not merely a personal,
“My main focus has become teaching not carry earthquake coverage due to its internal goal, as much as it is an evolving
and mentoring my students because often lack of affordability.) Another tough lesson and fully dimensional manifestation. It is
you have to hold their hand and literally he learned was that no matter what type of an avocation that he says he hopes will el-
push them to act upon their knowledge.” transaction a real estate investor does, they evate all those he reaches.
When asked why so many people sit on need to hire an independent escrow com-
the sidelines when it comes to taking ad- pany to make sure the contract is followed Be sure to visit Sam’s Real Estate Club on-
vantage of the greatest buyer’s market of accordingly. Sadat learned the importance line for a schedule of speakers:
all-time, he replies with one simple word: of this when he purchased three homes in a www.SamsREClub.com
“Most people think that motivation comes
from the outside, but that is an illusion.
The fact is, motivation comes from within.”
Realty411Guide.com PAGE 11 • 2011 reWEALTHmag.com
12. This is Your Chance to Learn to Be the Bank!
Private lending can generate mas-
sive cash flow with all these benefits,
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h MEET OUR
ed What is private lending?
TEAM A private lender is somebody (who is
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- GARY BOMERSHINE stands the secrets of private lending,
Gary’s strong domain ex- and how to use OPM (Other People’s
pertise in creative real estate Money) to make a ‘spread.’
de transactions, sales & mar-
Gary Boomershine
Private lenders borrow money at a
de Gary’s strong him a unique in
keting, give domain expertise
lower rate and lend it out at a higher
ability to work with entre-
creative real estate to grow
preneurs looking transactions, rate, making a nice profit or spread,
ide sales & marketing, give him a unique
their business. just like the bank!
ability to work with entrepreneurs
looking to grow their business.
day
Success in life comes with having
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14.
15. Invest with the Best
The Market Leader is MemphisInvest.com
Photograph from left to right: Chris Clothier, Brett Clothier, Kent Clothier Jr. and Kent Clothier Sr.
“If you commit to getting better every day,
your customers will demand you get bigger.”
T
— S. Truett Cathy, founder of Chick-Fil-A.
his sage advice, as well you plan to invest out of state, you need an out of state investor.
as nuggets of gold from to find the right company to partner with Chris continues, “You are looking for
other customer focused gu- — someone that has experience, that has someone with all the business acumen to
rus, has been adopted into knowledge not only of the industry but of put together all the steps that make sense.”
MemphisInvest.com’s own the market, and someone that is a true turn- The Clothier family established Mem-
company goals and aspira- key provider.” phisInvest.com and her sister companies,
tions; namely to be the absolute best turn- While there are many companies who Memphis Invest Renovation Services and
key investment company possible. call themselves “turn-key” (so much so that Premier Property Management on the firm
Many investors try their hand at out-of- he feels it has become an overused phrase), belief that out of state investors need ac-
state investing only to become frustrated Chris believes that investors searching for cess to proven, qualified professionals who
with the less than stellar returns they expe- a turn-key company to partner with should understand their needs. MemphisInvest.
rience when dealing with companies who look for organizations who “own and op- com partners with investors by handling all
claim to be “turn-key” investment compa- erate every step of the equation.” This of the details — from purchasing invest-
nies that simply provide contacts, leaving way, investors are not getting a company ment properties to ongoing maintenance
customer service out of the equation. that says: “buy from me and I will give and property management, helping to al-
Chris Clothier of MemphisInvest.com you contacts for renovation, or contacts leviate the stress that often accompanies
offers his advice for individuals who are for property management or contacts for buying properties far from home.
interested in finding a true turn-key com- insurance.” Chris says this is a recipe for MemphisInvest.com makes investing
pany for their out of state investments. “If disaster and it is a lot of hands-on work for
Continued on pg. 17
Realty411Guide.com PAGE 15 • 2011 reWEALTHmag.com
16.
17. simple for out-of-state investors. “You
make one phone call,” states Chris, “and
you’ve got every department, any answer
— access to every single person in this
company, so [the process is] very stream-
lined.”
Chris believes that successful investors
possess some common traits — “they have
to be inquisitive, they have to have curios-
ity. They shouldn’t ever take everything at
face value. They should be inquisitive as to
who they’re dealing with, and what mar-
kets that they’re looking to buy in. They
should be willing and able to do some
homework, look around, and ask the right
questions. They should also have a long-
term mentality. This is not get rich quick
by any means. The other thing that inves-
tors need to be successful in long-term buy
and hold is they need access to capital. No Top: An out of state real estate investor celebrates purchasing two investment properties.
money down is not an avenue to success.
You have to have access to some capital
and be able to build a long-term portfolio
whether you use straight cash or some kind
of leverage.”
MemphisInvest.com, possessing a strong
customer service focus and attitude, makes
sure that an investor knows, from the start,
if this opportunity is right for them. “I
don’t want to waste an investor’s time or
raise their hopes,” says Chris. “We are very
up front and very frank when we have our
discussions. We need to know the financial
strength and ability of an investor so we
can help make sure they’re successful.”
Investors who partner with their compa-
ny will realize that “they have found a great
opportunity in Memphis, they’ve identified
one of the premier turn-key investment Top photo: Customer Service Team at MemphisInvest.com Carol Henderson, Cyndy
companies in Memphis, and they’ve com- McCrary, Ashley Claunch; Bottom photo: Brett Clothier gets ready to speak to a room
full of real estate investors at a buyer tour in Memphis, Tenn.
municated real clearly exactly what they
want — from there they just let us do it,
and then they buy the opportunities that we
bring to them,” says Chris.
He continues: “This is about buying cash
flow investment property, if an investor tells
us that they need to earn a certain amount
of cash flow to pay their bills each month,
we are very adamant that they need to look
at other financial opportunities, other finan-
cial advice before buying real estate.”
For the Clothiers, “There is no sale
worth making that’s gonna hurt somebody,
just for us to make a little bit of money,”
states Chris.
Why would an investor choose to partner
Continued on next page Continued on pg. 31
Realty411Guide.com PAGE 17 • 2011 reWEALTHmag.com
18. with MemphisInvest.com?
“As a company, we hold in very high
regard the customer service that we pro-
vide,” says Chris, “we have three dedicated
employees that provide customer service,
including calling every one of our clients
every month on behalf of our property
management company and on behalf of the
Clothiers, as the owners — and they ask
the simple question: “What can we do for
you?”
Chris shares the reason for MemphisIn-
vest.com’s amazing growth. “About a year
ago we started to take time every single
week to stop everything, and come togeth-
er and study how to get better at customer
service, and at business as a whole.”
The investment in
customer service has
paid off — in spades.
Top photo: Premier Property Management of Memphis is the
In the first half of
key to their investors’ success! Left photo: Mark Anderson, a
2011, MemphisInvest. portfolio advisor at MemphisInvest.com meets with a couple
com became the larg- from California who purchased three rental properties.
est private home seller
in west Tennessee. The
only companies who
sell more homes than
MemphisInvest.com
Memphis Invest are
Fannie Mae and the De-
Rental Opportunity
partment of Housing and Urban Development.
“To date,” said Chris, “we closed 163 transactions so far in 2011.
Last year at this time, we had closed 79 transactions.”
The integrity and distinction that MemphisInvest.com brings to
the turn-key investment industry is seen clearly by their actions:
MemphisInvest.com doesn’t recommend properties that they
wouldn’t buy themselves. In fact, their investors buy and own in
the same neighborhoods that the Clothier family buys and owns
in.
Traveling to many areas, such as New York, Chicago, Boston,
and all major California cities, MemphisInvest.com takes time to
visit their clients face to face. Why? “We’re willing to do whatever
it takes to provide the best service possible and to show our clients
that we’re there for them,” Chris replies. Here is one sample property, this home is already
— Interview by Anita Cooper sold, but other great rentals are still available.
Be sure to add one to your portfolio.
3 Bed/2 Bath with 2 car garage
MemphisInvest.com invites readers to join Built in 2000 - Sq. Footage - 1,601
them at their events in the following cities: Purchased for $69,000
OR $37.41 PER SQUARE FOOT
•September 8th-11th - New Orleans
$10,000 in full renovation work completed
•October 1st - Boston Tax assessed value in 2010 of $104,000
•October 18th - Phoenix Gross yearly rents between:
•October 29th - NY $9,900 and $10,740
•November 12th - Vancouver Assuming 30% of rents for yearly expenses and
•December 1st - San Jose the property has a cash-on-cash ROI
•December 3rd - San Diego of approximately 10%
Realty411Guide.com PAGE 18 • 2011 reWEALTHmag.com
19. Kent Clothier Chooses to
Follow the Road Less Traveled
by Anita Cooper well as always doing what’s
O
necessary, even the “dirty
ne conversation with Kent work” that nobody else
Clothier will open your eyes to wants to do, has been the
a fatal flaw found in many real key to Kent’s success.
estate programs: Most of the “If you’re willing to do
gurus who pitch the products don’t actu- what others are not, then you
ally utilize them. Well, here is some inside will find that success will
scoop: Kent Clothier (and his entire fam- usually follow,” said Kent.
ily and team) actually use the systems Kent Kent believes that his suc-
promotes. As owner of 1-800-SELLNow, cess, and that of his family,
“If you’re willing to do what
others are not, then you will find
that success will usually follow...”
the systems Find Cash Buyers Now and the Clothiers, “...lies in the
Find Private Lenders Now, and as co-owner fact that we’re willing to do
of MemphisInvest.com, Kent Clothier uses something that others aren’t.
the same knowledge that he shares with his We are always willing to
clients, many have already seen great suc- send someone down to the
cess in their own right. county clerk’s office to sift Kent Clothier
“The industry is filled with people through property records to find cash buy-
who want to tell you how to do it,” notes ers, people that are in our back yard, that we and access to fantastic products, investors
Kent, “but they’re not doing it themselves. get to know, and by doing that we’ve built a learn how to “run their business like a busi-
There’s a lot of people who want you to buy very successful business, not a hobby.” ness.”
this program, or buy that program, [but] When Kent and his family shared the “In our real estate education classes, we
the actuality is, very few of them are doing methods they utilized in growing their only spend 20 percent of our time teaching
deals. Not only do we educate people, but business with others in the real estate in- people on real estate, and we spend prob-
we’re also buying and selling three to four vestment industry, they were surprised at ably 80 percent of our time educating them
hundred houses per year.” the reactions they encountered. Individuals on how to be an entrepreneur, or how to
Kent got his start in real estate after a were amazed that the Clothiers could find actually get in the game the right way,”
successful career in the wholesaling busi- cash buyers, and build a brand for their in- said Kent.
ness with a multi-billion dollar company in vestment business. Rather than wait for the elusive (read:
the grocery industry. After leaving the gro- Kent’s businesses were “born out of our “non existent”) “perfect” time to invest,
cery business, he was, like many individu- own investing interest. We realized that Kent advises his clients to realize that
als, “sucked into” the real estate industry what we were doing was so unique, that we “there will never be a better time, [your]
by those infamous late nite infomercials, needed to share it with other people.” inaction is costing [you] the opportunity of
however unlike so many who try their hand Investors who purchase their systems are a lifetime!”
at real estate investing and fail, he put ev- provided with access to a wealth of infor- “There’s never going to be another op-
erything into his businesses and has grown mation on real estate investing, including portunity like this,” said Kent, “and yes, it’s
three successful ventures in addition to webinars, access to online cash buyers, supposed to be scary, it’s supposed to be a
working with his family’s business, Mem- continuous customer support and access to little unnerving, but it’s also what makes
phisInvest.com, a truly wholesale invest- private lenders; virtually everything a seri- it exhilarating, it also makes it very excit-
ment company. ous individual needs to grow their invest- ing, it also makes it so rewarding when you
A focus on creating a relationship with ment business. finally get there, when you finally achieve
their clients and meeting their needs, as More than just great customer service the level of success you desire. ”
Realty411Guide.com PAGE 19 • 2011 reWEALTHmag.com
20. Disciplined Investing
Mastering the Art of the Flip
by Anita Cooper
Mastering the art of wealth creation takes a transaction — you’re flipping real estate
time, it takes dedication, and most impor- without the risk. get past that obstacle, whether you have to
tantly, it takes direction - guidance from Black Belt Investors is unlike many oth- go around it, over it, through it or under
a wise investor who has himself mastered er real estate consulting, educa- it. If you can learn that from your coach,
his own destiny through smart investment tion and investment firms. you will find yourself in a profitable posi-
strategies. “I truly believe that if you tion. I know with a few of my realty-based
Sensei Gilliland, founder and presi- want to become a real es- techniques, you will be able to pass any
dent of Black Belt Investors, has trained tate entrepreneur and cre- obstacle and get paid.”
hundreds of investors to grow their ate your real estate cash “One thing about Black Belt Investors,”
wealth through his “action oriented and machine,” shared Sensei, shared Sensei, “is that one of our primary
results focused” training programs. Uti- “you need proper training goals is keeping our investors engaged all
lizing discipline gained through years of by an experienced instruc- the time. We’re not a fly by night company
martial arts training, Sensei has created tor that practices what that trains students for 3 days and leaves
a program designed for all levels he teaches. You them to do the work on their own. We’re a
of investors who need guid- also need company that reaches out to help the stu-
ance and direction and the instruc- dent to get to the next level. We accom-
who desire to create a tor to take plish this through my coaching program
real estate business you from which is directly with me and not through
that is cash flowing classroom a call-in center that answers questions
tens of thousands instruc- from a script. We also keep investors en-
of dollars every tion to gaged through multiple free webinars,
month. applying workshops, on-site mentoring and my
Every experi- the tech- free monthly real estate club meetings in
enced, or “black niques in the Southern California, which keeps me ac-
belt” investor, was trenches to help countable as I must show my face there
once a “white belt” you develop every single month. If I was over promis-
(beginner). He did not your newly ing and under delivering, then I would be
attain to his advanced posi- acquired skills exposed at that club meeting. Our inves-
tion overnight; his knowl- and put you on tors keep coming back because they’re en-
edge increased as he put the fast track gaged, and when they’re engaged they be-
Deals are not going to fall in
your lap, deals are created.
his training into practice. He also did not to getting paid. There’s a lot of real estate come more successful. The only way not
train on his own, rather he had a teacher trainers and gurus out there that just pro- to be successful after one of my trainings
that led the way. mote fluff and stuff. They glamorize real is if you were to unplug yourself.”
It’s vital that you find a successful men- estate to be extremely easy and profitable You will learn by doing. “If I were to
tor, someone who is interested in helping all the time, and yes, real estate can be ex- train you to wholesale properties, we
you achieve your business goals. If you’re tremely profitable, but the reality is, you’re would develop a battle plan, grab your
looking for immediate cash, wholesaling going to have to do some work. Deals are hand to lead you onto the field, and start
is the best place to begin. Black Belt In- not going to fall in your lap, deals are cre- doing the business. There is nothing bet-
vestors will train and coach you on how ated. Just know that you will have some ter than hands-on training,” shared Sen-
to control properties and create immediate deals that are extremely easy that will put sei. “Think about it, if you were to learn
cash without the use of cash, without the cash in your pocket quickly and with oth- how to kickbox, and I had a kickboxer that
use of credit, and without the use of loans. ers you’re going to run into obstacles - it’s
Basically, you become the middle man of up to you as an investor to learn how to Continued on pg. 56
Realty411Guide.com PAGE 20 • 2011 reWEALTHmag.com
21. A Way to Effortlessly Flip or Rent
Cash Generating Properties in the
Hottest Markets Across the Nation
We call it Remote Rehabs! Almost everything has been done for you, we have:
• Strategically Targeted Markets to Buy cheap, Fix Easily and Sell Quickly
• Generated a Revolving Inventory of Deeply Discounted Properties starting at $20K
• Taken Away the Headaches of Deal Searching, Pencil Pushing, Rehabbing and Sales
• A Success Manager to Keep you Abreast and Coach You Throughout Your Deal
• Basically Put Time Back on Your Side to Rehab Houses without Lifting a Hammer
• “Gain Complete Control Over Your Life and Spend Less Time on Doing Things You Hate Doing By Using
Remote Rehabs, a 100% Hands-Off Fix and Flip System.”
“Exceeded Expectations”
“Wow! Just wow! I don’t even know where to start with all the things that Remote Rehabs has done for me. Know that list of benefits that
Black Belt Investors offers? Well they are all completely, one hundred and fifty percent true! All I know is that Remote Rehabs is the simplest
and most profitable program I have ever experienced.”
- Pek Lee Choo - Chicago, IL
“Simply Amazing”
“Here is what I did: I enrolled in Sensei’s program Remote Rehabs, he found me a deal and his team did all the work A-Z. Soon after the
rehab and listing the property, I was amazed to receive offers on my investment! At first I put it off to blind luck, but within 45 days I receive
a check for over $17,000 in net profits and I’ve been smiling since.”
- Lynn McCloskey - Concord, CA
27 Days! ash Flow 51 Days!
Sold in E quity & C Sold in
Indianapolis, IN Phoenix, AZ Indianapolis, IN
Purchase Price: $43,000 Purchase Price: $45,300 Purchase Price: $36,500
Repairs & Misc.: $32,000 Repairs & Misc.: $4,200 Repairs & Misc.: $22,700
List Price: $110,000 Fair Market Value: $71,000 List Price: $99,900
Sold Price: $110,000 Equity Position: $21,500 Sold Price: $95,000
Net Profit: $25,100 Cash Flow: $725 mo / 8,700 yr. Net Profit: $27,250
Cash-on-Cash Return: 33% Capitalization Rate: 18% Cash-on-Cash Return: 38%
Black Belt Investors’ Remote Rehabs program is a truly unique and phenomenal way
to build cash quickly. Believe that Remote Rehabs is without rival in any shape and form.
Black Belt Investors stake their reputation on the fact. By getting involved today, you will
be receiving a profitable and automated hands-off rehab business with its time tested meth-
ods, as well as Black Belt Investors’ 15 years of experience. Trust me... This is one chance
you cannot afford to pass up; Take Action Now!
Office: 951-280-1900 www.BlackBeltInvestors.com
22. Dave’s RE Tips Wealth
Real Estate
Fro
m
th
eP
ub
lish
ers
of
Re
alt
y4
11
Vol. 1 • No. 3 • 2011
How could a real estate “investor”
flip houses for eight years, only to
wind up with no assets, no cash
flow, and no income? by Dave Lindahl
Serving the Needs of Accredited Investors - INSIDE: Information to Grow and Maintain Your Wealth
8 TurnaaProfitable Business 10 Be a Private Lender, 18 Zero DownSecret Recipe
into
Real Estate Hobby
Learn to make BANK! Learn Our
Investments
I
started working in real estate with ture appreciation. After all, he always got expenses. The result: at the age of 65, his
my friend, Walter. We both started $5,000 plus upfront in “option consider- net worth is only about $33,000. And that’s
out rehabbing houses, but there were ation” and he always sold his houses and not the worst part... if he stops buying and
two big differences between us. First, made a profit. Over a three year period, he selling, he’ll have no income to live on!
I was a lot younger; I was 32, Walter was grossed an average of $109,000 per year. That’s because he has no income-produc-
58. Second, I grew my net worth and cre- Sounds pretty good, doesn’t it? ing assets. No positive cash flow. No an-
ated a hands-free passive income. Walter, Unfortunately, the IRS calls him a “deal- nuity. And no equity. Now he looks back
by contrast, got hooked on buying and er”. That’s because he rarely holds a house at all of those years and realizes he made
selling. Why? for more than a year. So his profits are a big mistake.
He was afraid of tenants, so he rarely taxed at the painfully high rate of “ordinary Most of the homes he bought in the mid-
rented houses. When he did, it was always income”. For example, if he sold a house 90’s have doubled in value, but he sold
on a “rent to own” basis. (He offered the for a $29,000 profit, that’ll cost him about them all before they had a chance to appre-
tenant a lease option). After all, single $10,000 in taxes. ciate. He gave away hundreds of thousands
family homes don’t generate much posi- After overhead costs and taxes, Walter’s of dollars in appreciation. (And the IRS
tive cash flow. “take home pay” is only about $60,000 per took a third of his profits). He never bought
Walter didn’t mind giving up his fu- year. And every dime pays for his living
Continued on pg. 62
Realty411Guide.com PAGE 22 • 2011 reWEALTHmag.com
23. TrueWholesaleHouses, LLC
“Equity Day 1, True Cash Flow, Peace of Mind”
We are proud to offer a proven cash flow investment with substantial instant equity. The investor receives
the best of both worlds a true turnkey investment backed and managed by a team of life long real estate
professionals.
The Genesis of True Wholesale Houses, LLC is taken from a deep understanding of cash flow real estate
investing properties and what it takes for the passive investor to succeed. The investor that chooses to
invest with True Wholesale Houses, LLC will enjoy a predictable monthly cash flow and instant equity.
True Wholesale Houses, LLC takes the work and worry out
True Wholesale Houses, LLC brings
of owning a rental property, while maintaining a proven cash investors Wholesale to Wholesale deals
flow to the investor. as opposed to Wholesale to Retail
No more worrying about:
1. Collecting Rents. HERE ARE SOME OF OUR NEW ADDITIONS TO
2. Maintenance Emergencies. OUR SELECTIVE INVENTORY
3. Finding a Tenant.
4. No more worrying about managing property and
managing your managers.
5. Property Taxes.
6. Finding the right home in the right neighborhood.
7. Insurance.
True Wholesale Houses, LLC is your Equity Partner for the
life-time of the transaction. Our partners on the ground
have a stake in the home, the tenants, and preventing main- Atlanta, GA - $19,500 Equity DAY 1
Net Investor Cash Flow $340/Mo • Note Price $51,000
tenance problems by doing a quality re-habilitation on the
property before we place a tenant.
True Wholesale Houses, LLC pays monthly cash on cash 9%
return for the term of the note. If the home has a vacancy,
we still pay you every month.
As your partner, True Wholesale Houses, LLC will manage
the property and sell it when the market recovers. If you
wish to keep the cash flow and the 9%, you as the investor
can dictate an extension on the note, holding the home in Jackson, MS - $17,500 Equity DAY 1
the caring hands of True Wholesale Houses, LLC. Net Investor Cash Flow $262/Mo • Note Price $35,000
True Wholesale Houses, LLC is here to work with you to give
you the best value for your money. We are your true whole-
sale partners so we can all prosper together.
For information, contact:
888 285 1900 Atlanta, GA - $20,000 Equity DAY 1
Net Investor Cash Flow $309/Mo • Note Price $53,000
Join True Wholesale Houses, LLC
!
Now Website: http://www.TrueWholesalehouses.com
24. True Wholesale Houses
Offers Investors Security & Returns
T
by Anita Cooper
ruly unique, truly their profit up front. Our profit is
amazing, truly one Rock-Bottom Prices, Secure deferred until the property sells.
of a kind. True Returns & Built-In Exit Strategy And like the triple net lease, we of-
Wholesale Houses fer the same thing — investors get
is different from ev- their payment monthly, regardless
ery other investment of whether it’s rented or not.
company you’ve come across. With this program, investors
Jay Hinrichs, managing owner of Step 1 never have a cash call and they
True Wholesale Houses is uniquely True Wholesale Houses, don’t have to worry about any of
acquires a foreclosed or
qualified to provide investors with the maintenance. True Wholesale
REO property
top-notch investment opportuni- Houses deals with all the manage-
ties that promise consistent returns. ment headaches associated with
Hinrichs is both a licensed mortgage Step 2 owning and managing an asset.
banker in the state of Oregon, and a Partner Company, Unlike other investment com-
licensed real estate broker in Cali- Portland Funding LLC, panies, Hinrichs says that at True
makes a loan at True
fornia, Oregon and Mississippi. Wholesale Houses, both the prop-
Wholesale Cost
Hinrichs shared his reasoning be- Creating Instant Equity erty manager and the rehabber are
hind True Wholesale Houses’ cre- owners of the property. “Our guys
ation; “As a lender, back in 2008 on the ground are vested in the
Step 3
and 2009, like every other lender at True Wholesale Houses properties. They have an ownership
the time, we had foreclosure prob- does a complete Reha- interest, and they too are working
lems, I looked at the model and bilitation of the property, for the equity bonus when we sell
said, ‘There’s gotta be a better way creating a problem and these properties. Our ownership
to protect the investors than just let- maintenance free interest in the properties, assures
property
ting them go off on their own.’” Step 4 investors that the assets are being
Concerned about this trend, Hin- True Wholesale managed to their highest potential
richs devised the current model that Houses tenants the for profit,” Hinrichs maintains.
property creating
True Wholesale Houses follows: His forecast of the market is ex-
instant cash flow
They provide professional invest- plained: “We believe we’re in the
ment and property management middle of a ten year cycle, and that
Step 5
experience that guarantees both in three to five years we’re going
The investor buys the note
the company and the investor yield from Portland Funding, to be coming out of that cycle and
substantial profits from their col- gaining First Deed of Trust once we see a chance to sell our
laboration. on the property, and a properties at a substantially higher
“We’ve combined my years of 50% equity position. amount than what the note values
lending knowledge and my years of are, that’s when we’ll start to roll
buying and owning rental proper- Step 6 out of the properties, because that
ties, and combined that knowledge Monthly interest is where our big profit is lying.”
into a hybrid model that gives the checks are sent There is a steep learning curve
conservative investor, who’s look- to the investor for individuals who are exploring
ing for the utmost in protection Step 7
investing in real estate. According
and equity preservation, another 3 - 5 years later, TWH to Hinrichs, what True Wholesale
avenue.” sells the property and Houses does is “mitigate the learn-
Hinrichs shares one key differ- investor gets 50% of the ing curve, give a real return based
ence between his company and equity built, on top of the on years of experience owning and
monthly returns from the
most other investment companies: renting rental properties, giving the
cash flow generated by
“At the end of the day, none of the tenants utmost consideration to principal
these investment companies have preservation. We’re not going to
an ownership interest in the prop- lose money. You’re investing with
erty going forward, they’ve taken people who do this for a living. We
Realty411Guide.com PAGE 24 • 2011 reWEALTHmag.com
25. stay in these transactions for the throughout the life of the trans- up. “If the investor comes in he shares advantages that his
long haul and for the life of the action.” with us, they already have equi- company has over its competi-
transaction. I have put this mod- According to Hinrichs, when ty because we’re putting them tors. His partner, Mike Hanks,
el together so that everyone is a one invests with their model, into the asset for literally up to is a successful home builder in
stake holder and has skin in the they can expect a nine percent 40% less than anybody else is Oregon. He has built over 500
game. As long as we buy in the cash on cash return with no going to sell it to them for,” he homes. Hanks also has an IT
area we want to be in, rehab to downside, for the life of the in- says. background and has set up prop-
our standards, not just to rental vestment. Then, when it is sold, In addition to Hinrichs’ ex- erty administration systems for
standards, treat our tenants like (they believe that time frame to tensive experience in mort- Guardian Management, which
the gold that they are, the rest be within three to five years), gage banking and real estate, had 11,000 units, so they have
falls into place. Our cash flow there’ll be another 30 to 50 the tools to manage hundreds
is great, and our investors get percent equity payday for the and hundreds of houses.
taken care of.” investor. “Our partners on the ground
The reward is a real estate in- Compared to houses offered are people that we’ve known
vestment with a steady, unwav- by other investment com- for years. They are highly ex-
ering return, which may sound panies, Hinrichs says these perienced and very excited to
like an oxymoron. When asked properties are truly “whole- be part of the team and have an
how this is possible, Hinrichs sale.” For example, in Jackson ownership interest in the house,
replies: “We assure investors of Mississippi, they were able to other than just managing the
a consistent monthly cash flow, offer a home to an investor at house for somebody else and
regardless of whether the prop- approximately $30,000 less not owning any of it.”
erty is rented or not. We achieve than a similar home offered by
Please note:
this by using a conservative another investment company. Investors will be provided, upon
vacancy and maintenance re- In other business models, request, with banking references
serve allocation that assure that the retailer takes the equity up to validate True Wholesale
the property is maintained in front, and the investor is bank- Houses’ financials.
a peak performance standard ing on property values going
26. We Help You Get The Most Out Of
Your Investment!
Carolina Liquidators helps
investors like yourself find the best
deals on properties in your area.
Along with providing a resource to
help you find investment property
we also pride ourselves in having
the ability to educate you on making
sound investments and helping your
make the most out of your business.
1825 Remount Rd. Charlotte. 3 bed 2 bath home
Carolina Liquidator and it’s affiliates are primarily Real Estate Wholesalers.
for $55,500.00 • Tax Value $101,900.00
With over 40 years combined experience in the Real Estate and Mortgage in-
$593.00 Net cash Flow
dustry we are able to help you achive your Real Estate Goals that may have not
otherwise have been possible.
Pricing Property Location Features
$55,500.00 1825 remount Rd Bedrooms: 3
We have a full staff of people hunting, researching, marketing, inspecting and
Charlotte, NC 28208 Bathrooms: 2
negotiating these deals. Companies like us can supply you with deal after deal;
why not let us do the work for you? We have the time and resources to find these
This home is located near downtown Charlotte NC. It is a newer
deals that most likely will not be available to you. 3 bed 2 bath home and will rent for $850.00 a month. With
the sales price being half of the current tax value it’s a steal at
We can provide everything an investor would need to make $55,500.00 and netting $593.00 a month cash flow. It is near
schools, employment and shopping and less than 5 minutes to
a sound decision. We have you covered every step of the
down town Charlotte. Don’t let this one slip away.
way from planning, based on your financial goals, to
property acquisition and property rehabilitation. Breakdown:
Rent: $850.00 Total Expenses: $257.00
We have been doing Real Estate Investing for the last 18 years and mortgage Approximate taxes: $122.00 Net Cash Flow: $593.00
for the last 15 years. We have the experience and know how to get deals done. Insurance: $50.00 Cash on Cash Return: 14%
Whether your looking for a home to make a quick return on, or homes that Property Management: $85.00
produce a constant cash flow. We will find you what you are looking for!
“ ”
Carolina Liquidator made the buying process so easy. I would definitely recommend
their services to anyone who is looking at investing in a home...
www.CarolinaLiquidator.com
803-325-1925
27. Market Spotlight: South East Region
LOCATIONS:
Rock Hill, S.C.
Charlotte, N.C.
Atlanta, Ga. ting money into your retirement. They are Florida market. What we do is figure out
Kansas City, Mo. as much a part of the team as anyone else what you are looking for and what your
Jackson, Miss. involved. It is kind of shocking to some goals are and we put scenarios together that
COMPANY: of the investors when they come out to will help you achieve those goals. We have
Carolina Liquidator visit our office because we have so much a great team that works daily on achiev-
CONTACT: community support, we have churches and ing the goals of our investors. Our team
Kevin & Alex community leaders that work with us to includes our research specialist, Emily
ph: (803) 325-1925 help keep the areas clean and safe. Harris; property manager/office manager,
CarolinaLiquidator.com Cherry Stegall; and general contractor,
Q: Why should investors buy rentals in Bennett James. These three work to keep
Question: What kind of opportunities your area? the daily operations of our office moving
are you seeing in your market? A: Investors should buy rentals in our area so that we can continue to find deals for our
Answer: We currently have a 67 house because we have good, hard working peo- investors.
package that we are working on. It is not
only a great opportunity for us but for in-
vestors who are interested in this package.
About half of the homes are currently rent-
ed and we should be able to place tenants
in the other homes very easily.
This is a once in a life time deal for our
company, to buy so many of these homes,
rehab them, and get tenants in them. It is a
big challenge for our company, but we have
a great team, and we are up for the chal-
lenge. This is just one of the projects that
we have currently going, we have many
smaller deals also, many in the $30,000
dollar range.
Q: How is your market handling the eco-
nomic slump?
A: Being based in the Charlotte, NC area,
we haven’t felt the effects quiet as heav-
ily as other cities, but we have noticed an
increase in the number of tenants interested
in our rent to own program. More people in Alex Franks and Kevin Burrell
the area are looking to rent but still have a
desire to own their own home. With a rent- ple living in our homes. People who rent Q: How long have you personally been
to-own program, we are able to place good our homes are mostly blue collar workers investing in real estate?
tenants in these homes who will pay each who make a living by working anywhere A: Alex Franks started real estate invest-
month because they want to own the home. from retail stores to our local industrial ing in 1999 as a way to generate passive
This is real simple, the property values are plants. income and long-term wealth. Wholesaling
down and the rents are staying the same or For a very small investment, you can deals is something he continues to actively
even going higher than previous years on turn a very good income. Literally for what pursue today. By 2006, he made the leap
some occasions. Just to give you an idea, you could buy a car for, you can buy real from wholesaler to a full- time real estate
we have several homes available in the mid estate in our markets with a net cash flow investor.
$30,000s that are net cash flowing over of more than $400 a month. Just about ev- Kevin Burrell has 18 years experience in
$400 a month with cash purchases. ery home we have is under $50,000, with Real estate and 15 years in the mortgage
the majority being in the $30,000 range. lending business, after he bought his first
Q: What is the best part of being an in- house in 1994, Kevin was hooked on real
vestor in your city? Q: What makes your company unique? estate investing.
A: We handle everything for the investor; A: We don’t just sell real estate to people, In 2008, Alex and Kevin joined forces to
it is a total turnkey process for the passive we create portfolios, we are currently in create Carolina Liquidator, LLC. They both
investor. We take care of our tenants just these areas: Charlotte, NC; Rock Hill, SC; specialize in being able to quickly analyze
as well as we take care of our investors. Atlanta, GA; Kansas City, Mo; and Jack-
After all, these are the people who are put- son, Miss. We are also expanding into the Continued on pg. 31
Realty411Guide.com PAGE 27 • 2011 reWEALTHmag.com