Wealth
Real Estate
THE NEW reWEALTHmag.com | Summer 2017
WEALTH
FORMULA
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PUBLISHED BY Pliagas Enterprises VICE PRESIDENT Nikolaos K. Pliagas COLUMNISTS Tom Wilson Kathy Fettke Randy Hughes Sensei Gilliland Leon McKenzie WEB MASTER Maria Landicho MARKETING Holly Lynn Rosa Houghten EVENTS & EXPOS Kasey Barrett Lawrence Ruano Michael Ringwald
PUBLISHER Linda Pliagas LEGAL COUNSEL Boesch Law Group CONSULTANTS Steven Kendis, GRI Hector Padilla, GRI ADVERTISING Ryan Gay Jason Burke Kasey Barrett EDITORIAL STAFF Tim Houghten Stephanie Mojica COPY EDITOR Lori Peebles Stephanie Mojica PHOTOGRAPHER John DeCindis
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Our Mission is Educate & Inspire Others to Invest. Realty411 / reWealth magazine is proudly published from Santa Barbara County, Calif. ©Copyright 2017. All Rights Reserved. Reproduction without permission is strictly prohibited. The opinions expressed by writers/columnists are not endorsed by the publishers. IMPORTANT DISCLOSURE: Publishers and staff are not responsible for performing due diligence on the opportunities offered by magazine advertisers and expo sponsors. Before investing in real estate seek the advice of your trusted financial advisor, attorney or tax consultant. BEWARE: Real estate investing is risky and may result in loss of capital.
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Learn How to Turn One Single Family House into a Monthly $5,000 - $15,000...
Cash Flow Tsunami! “Senior Housing is America’s Best Financial Opportunity for the Next 20 Years!” -Gene Guarino, President and founder
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PAGE 3 • 2017
reWEALTHmag.com
contents
pg. 35
pg. 77
10 Publisher’s Letter: It’s Time for a Mid-Year Review 12 Approaches to Negotiation: Tips & Techniques
INSIDE: Learn strategies to help your bottom line from renowned industry experts, such as (right, clockwise): Kaaren Hall, Marco Santarelli, Todd Dotson and Brad and Jennifer Sumrok
16 Atlanta: Rich With Renters by Kathy Fettke 21 Three Offbeat Investments to Consider
22 20/20 REI Prepares for Big Business in Texas
27 The Trump Economy: An Emphasis on America 28 #SumrokStyle: Live Free & Fun with Apartment Investing. Learn with Brad & Jennifer Sumrok
31 Double-Digit Returns is Possible with Leverage 34 Discover the All New BREIA / MD-REIA
37 The Truth About Income & Real Estate Investing 40 Marco Santarelli Pinpoints Top National Markets 51 - 88 Private Money411 Featuring Texas Pride Lending, plus Meet the Leaders of Finance
89 Be a Maverick, Do It Different by Paul Finck
pg. 47 pg. 47
92 What Investors Should Be Demanding Now from Property Management by Pam Blanco 95 #TheConnector - A New Investor Emerges 99
Laura Alemery: An Educator on a Mission
105 Protect Your Assets Now with Fortune DNA
109 Your Worth is Beyond Compare with Sam Sadat 110 Money Mindset and Your Bank Account Balance
pg. 35
115 Armando Montelongo Reclaims His Throne
118 Randy Hughes Explains Why a Trust Works
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800.248.8447 info@IRAServices.com www.IRAServicesTrust.com IRA SERVICES AND IRA SERVICES TRUST COMPANY AND THEIR REPRESENTATIVES DO NOT OFFER TAX OR LEGAL ADVICE. DO NOT PROVIDE INVESTMENT ADVICE, DO NOT SELL INVESTMENTS, DO NOT EVALUATE, RECOMMEND, OR ENDORSE ANY ADVISORY FIRM OR INVESTMENTS. INVESTMENTS ARE NOT FDIC INSURED AND ARE SUBJECT TO RISK, INCLUDING THE LOSS OF PRINCIPAL. CLIENTS ARE ADVISED TO PERFORM OR FACILITATE THEIR OWN DUE DILIGENCE WHEN INVESTING. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE LEGAL OR TAX ADVICE AND SHOULD NOT BE CONSTRUED TO APPLY TO ANY INDIVIDUAL PERSON OR SITUATION. EACH PERSON SHOULD CONSULT WITH HIS OR HER OWN PERSONAL TAX ADVISOR, FINANCIAL PLANNER, ATTORNEY OR ACCOUNTANT WITH RESPECT TO SUCH INDIVIDUAL’S SPECIFIC SITUATION AND SHOULD NOT RELY UPON THIS INFORMATION WITHOUT SUCH CONSULTATION.
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LINDA’S LETTER
Photo by John DeCindis
Goals Will Be Reached
Review the Past, Learn, Let Go
T
hank you for joining us for another exciting issue! If you’ve been following us for a few years, you will notice this is our largest magazine yet. At 124 pages, it is a remarkable increase from our premiere publication 10 years ago. This magazine has grown steadily around the country and globally, with a force fueled by my dual life-long passions: media and real estate. My mission is simply to share information, which can expand knowledge, increase motivation, and create a positive impact in our industry. Positive energy attracts the like, and now, even more exciting things are in motion, such as our collaboration with top celebrity rehab stars from
HGTV (Home & Garden Television), the country’s leading cable network for real estate entertainment. Last year, we featured Clint Harp, from Fixer Upper at our expo in Texas. (Client now has his own show, Wood Work, on the DIY (Do It Yourself) Network. This fall, we are proud to host four HGTV celebrity rehabbers: The mother/ daughter duo from Good Bones, as well as the identical twins from Listed Sisters. In addition, recently a producer reached out to me to assist him with a new project, Property Pitch. Now, we have a creative treatment, which he wrote and registered with the Writer’s Guild of America. Life is exciting! I’m reaching my
Linda Pliagas, Publisher
goals, and I hope you are as well. It is important to note that on our quest for success, we will encounter obstacles... mainly our own Self. As we move forward, we tend to review the past and wish we could erase mistakes. We all have things we would like to redo. It’s important to give yourself permission to review the past, learn from it, then... let it go. Move forward to accept the new opportunities in store. Thanks again for your support, and if I can help you in any way, please let me know. Follow on Facebook, Twitter, and Instagram
Orange County’s
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RSVP: 805.693.1497 or REALTY411expo.com/OC PAGE 12 • 2017
reWEALTHmag.com
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STRATEGY
Approaches to
START OUT EARLY
Negotiations begin at the first encounter (e.g., phone inquiry). Many people think the initial pleasantries are just that, and the formal negotiations will begin later. Not so. The superior negotiator will have already begun gathering information and setting expectations. Start early so you don’t have to catch up.
REAL ESTATE NEGOTIATION ARTICLE BY BRUCE KELLOGG
INTRODUCTION
THE THREE ELEMENT There are three elements to any negotiation: 1) Information, 2)
Negotiation, unfortunately, is not taught much to real estate professionals, or to investors. International, corporate, and purchasing courses exist, even to the extent of Master’s degrees, but real estate has not received the same coverage. This article aims to help that. Realty411Guide.com
PAGE 14 • 2017
Continued on pg. 16
reWEALTHmag.com
How to Own Real Estate
Without Mortgages Without Mortgages How to Own Real Estate
Learn to DOMINATE the Bank, OWN Multiple Properties, and ELIMINATE Your Mortgages in 10 Years and Start with Very Little Cashflow.
“If you’re serious about your business, then this is a must-see class!” OUR EXPERT SPEAKER Over the past 15 years, national consultant, speaker and educator, Matthew Pillmore has presented financial education nationally for and in front of countless real estate organizations. He speaks nationally on the topics of credit scoring, debt elimination, fiscal responsibility and strategic cash flow maximization. Mr. Pillmore has studied under the founders of the FICO credit scoring system. We have countless testimonials and references from previous REIA owners, managers and attendees that can attest to the value of the education provided by VIP Financial Education.
In this class you will learn to dominate the banks, this class you willeliminate learn to your dominate the banks, ownInmultiple properties, mortgages in ten years and start witheliminate very littleyour cashmortgages flow. own multiple properties, in ten All educational content is provided free of charge. There is no “selling from the stage” or solicita-
years and start with very little cash flow.
tion by the speaker. The class will last approximately 50 minutes plus time for questions. VIP is not a financial advisor, nor do they sell any financial products. VIP has been providing free financial education for over 15 years and has an A+ rating with the Better Business Bureau.
www.FreeCashFlowEd.com/VIP
Realty411Guide.com
PAGE 16 • 2016
reWEALTHmag.com
Time, and 3) Power. These will be described below.
Gather Information: The negotiator who gathers the most information usually has an advantage.
GATHER INFORMATION The negotiator who gathers the most information usually has an advantage. Interview people, obtain reports, do inspections, use the MLS (Multiple-Listing Service) and other online resources. Hire a private investigator on the seller if the deal is large enough, looking for vulnerabilities (e.g., bitter divorce). You can’t know too much. THE FACTOR OF TIME It helps to know if the other party has any time constraints, along with your own, of course. Pending foreclosure, divorce, condemnation proceedings are some examples. If the property is “a steal”, scoop it up fast. If it’s priced at or above “market”, then “grind real slow”. Use time to your advantage. THE FACTOR OF POWER In some negotiations the power levels are uneven. One party has more leverage over the other. Seasoned negotiators assess power levels and devise strategies to take these into account. Then, even the weaker party can optimize its outcome. BE GENEROUS WHEN SELLING Some sellers believe in “Win-Lose” negotiating. They want “top dollah”. This apparent greed and intransigence grates on everyone involved, sometimes to the extent of legal action or retaliation. Be generous when selling. Paint that bedroom. Purchase a Home Protection Plan for those first-time buyers. You’re on your way to wealth. DON’T BE CHEAP! Keep your word. Perform everything you’ve agreed to do. And smile as you do it, even if the deal is going against you and you are taking a loss. Don’t whine. Smile. Builds character….and your reputation.
so you take the other party’s counteroffer rather than force them to take yours. This way they will feel they won, and you will have less trouble with them the rest of the way. And, please, don’t arbitrarily “split the difference”. Amateur negotiators do that. “SHARP PRACTICES” The day will come, if it hasn’t already, when the other party will bring “sharp practices” to the table. If these are illegal (e.g., undisclosed money back after the close), call them on it, and refuse to participate. If these are not exactly illegal, then counter them as best you can, or walk away. Life is too short, and your reputation is too important. Always “take the high road” in negotiations. RE-NEGOTIATING AFTER INSPECTIONS Y’all know to re-negotiate after property inspections, right? ‘Thought so. READING LIST Included on the next page is a list of “Recommended Reading.” Buy all of them, used. Read and highlight them. Then, once a year, re-read the highlights. You owe it to your clients, and yourself, to be in tip-top shape a as a negotiator. v Bruce Kellogg has been a REALTOR® and investor for 35 years. He has transacted about 500 properties for clients, and about 300 properties for himself in 12 California counties. These include 14 units, 5+ apartments, offices, mixeduse buildings, land, lots, mobile homes, cabins, and churches. He is available for listing, selling, consulting, mentoring, and partnering. Reach him at brucekellogg10@gmail. com, or (408) 489-0131.
THE “CONCESSION PATTERN” In the back-and-forth of negotiations, your “concession pattern” is very important because it sets up expectations in the other party. Always negotiate fairly tightly. Don’t concede too much because the other party will see that as an opening to seek more. Go backand-forth more times if need be. Try to set things up Realty411Guide.com
PAGE 16 • 2017
reWEALTHmag.com
G IN AT S BR AR LE YE CE 14
SAM’S
APPROACHES TO REI NEGOTIATION
REAL ESTATE CLUB
Recommended Reading by Bruce Kellogg
Founded in 2003, Sam’s Real Estate Club has helped thousands of investors learn, network and prosper
• Negotiate This, Herb Cohen, 2003 • Everything Negotiable, Eric Wm. Skopec and Laree S. Kiely, 1994
Watch our real estate investing meetings LIVE online!
• Guerrilla Negotiating, Jay Conrad Levinson, Mark S. A. Smith, and Orvel Ray Wilson, 1999
Founded 2003
• The Negotiating Game, Chester Karrass, 1992
In Person & Online
• The Only Negotiating Guide You’ll Ever Need, Peter J. Stark and Jane Flaherty, 2003
Workshops & Bootcamps
Real Estate Education
Mentoring Programs
• Seal the Deal, Leonard Koren and Peter Goodman, 1991
Investment Opportunities
• You Can Negotiate Anything, Herb Cohen, 1980
Private Lending
• How to Win Friends and Influence People, Dale Carnegie, 1936
Sam Sadat
President & Founder
(800) 998-9930 www.SamsREclub.com
KATHY
Realty411Guide.com
PAGE 17 • 2017
reWEALTHmag.com
MARKETS
Atlanta Suburbs:
RICH with RENTERS
W
e’ve heard a lot about millennials pouring into to city centers as they chase after jobs, social connections, luxury apartments and condos, and the benefits of the sharing economy. But a new report shows that the biggest U.S. metros are experiencing a renter “boom” in the suburbs -- and RentCafe says suburban Atlanta is at the top of that list. That’s creating new opportunities for investors looking for single-family rentals with low prices and high returns, and Atlanta is a great place to find them. Atlanta was a superhot market for the single-family investor just a few years ago, but popular neighborhoods got a little too popular and prices rose. Other neighborhoods hadn’t recovered enough to draw interest. As the wheel turns for real estate hot spots, neighborhoods that were shunned before, are looking better now and many of those great locations are in the suburbs.
What’s Happening in the Suburbs? The RentCafe report says it looks at Census data for a 5-year period, from 2011 through 2015. And, it found that urban centers have not gained as many renters as we’ve come to believe. It says the numbers show that suburban areas gained substantially more renter households than their urban counterparts in 19 out of the Realty411Guide.com
20 metros it reviewed. In Atlanta, the data shows a net gain of 52,300 suburban renter households during that time frame. That’s a 26% increase in those households. That’s a huge number of additional renters in just a 5-year-period. Atlanta’s urban area only gained 15,100 renters which reflects a 10% increase. Suburban rent growth was so strong in Atlanta, St. Louis, Riverside County California, and Boston, it was “three” times that of their more urban counterparts. RentCafe says of the 20 metros areas it studied, suburban areas gained about 700,000 new renter households in that 5-year period. City centers in those same areas gained about 600,000. In Riverside County the percentage of suburban renter growth was lower than Atlanta but the overall number of new renter households was much higher, at 60,500. Just 18,500 renter households were added in urban areas. Chicago also saw substantial suburban renter growth, along with Miami, and Dallas. RentCafe says the main reason for the shift is “cheaper rents”. Renters are also getting more family-friendly neighborhoods with garden-style apartment communities. They are also finding that schools are usually better in the suburbs, neighborhoods are quieter, and their living expenses take a smaller bite out of their paycheck. RentCafe says that an analysis of the Yardi Matrix database shows that renters save about 11% or a month’s worth of rent if they move to the suburbs, based on average rents in the 20 areas studied. PAGE 18 • 2017
Kathy Fettke is Co-CEO of Real Wealth Network and best selling author of Retire Rich with Rentals. She is an active real estate investor, licensed real estate agent, and former mortgage broker, specializing in helping people build multi-million dollar real estate portfolios that generate passive monthly cash flow for life. With a passion for researching real estate market cycles, Kathy is a frequent guest expert on CNN, CNBC, Fox, Bloomberg, NPR, CBS MarketWatch and the Wall Street Journal. She was also named among the “Top 100 Most Intriguing Entrepreneurs” by Goldman Sachs two years in a row. Kathy hosts two podcasts, The Real Wealth Show and Real Estate News for Investors — both top ten podcasts on iTunes with listeners in 27 different countries. Her company, Real Wealth Network, offers free resources and cutting edge education for beginning and experienced real estate investors. Kathy is passionate about teaching others how to create “real wealth,” which she defines as having both the time and the money to live life on your terms.
reWEALTHmag.com
What’s Going on in “Hotlanta”? It’s bustling with life, people are finding jobs, and the city is making some big quality-of-life improvements. Atlanta is undergoing a big redevelopment plan. That’s contributing to those jobs and making the city a more attractive place to be. Just to give you an idea of the kinds of things Atlanta is doing, there’s a huge project underway called the “Atlanta Beltline”. It’s a project that will connect 45 city neighborhoods with a 22-mile loop of multi-use trails, streetcars, and parks. The Beltline website says it has received several awards as for its visionary approach to making the city more walkable, bikeable, and oriented toward public transit. The project is making use of long forgotten rail lines that circled the city. There’s also the former Bellwood Quarry that is being turned into a huge park and reservoir. You may have seen the stunning granite quarry walls and bright blue tint of the water in scenes for “The Hunger Games”, “The Walking Dead”, and “Stranger Things”. The city is investing at least $300 million dollars to turn the water-filled quarry into a 2.4 billion gallon reservoir. When it’s done, it’s expected to hold a 30day supply of drinking water for 1.2 million people. Once the reservoir is finished, the city will develop the surrounding 300 acres as the city’s largest park. The new Westside Reservoir Park will also be connected to the city via the Beltline. There’s also the conversion of the former Fort McPherson Army base into a huge movie studio complex. African American filmmaker Tyler Perry bought the historic 330-acre piece of real estate in 2015 and is turning it into the latest version of Realty411Guide.com
his Tyler Perry Studio. The L.A. Times reports that when it’s done later this year, it will be one of the largest studios in the country. The paper also says that Tyler hopes to create 3 to 4,000 news jobs at the studio, and recruit people from low-income parts of Atlanta. Major upgrades are also coming to one of Martin Luther King Junior Drive which runs right through the city center -- past the state capital, the historic Atlanta University Center, and the Georgia Dome. It’s a 12-mile stretch that has become an eyesore with old or abandoned buildings in need of repair. The city plans to convert the 4-lane road into two traffic lanes, and two for bicycles. There will also be new roundabouts, plant-filled medians, small parks, and new pedestrian crosswalks. And then there are two new sports stadiums in the making. Both the Falcons and the Braves are building new stadiums. That’s expected to bring tens of thousands of new jobs to the city. And the city is already experiencing job growth that’s higher than the nation’s average. The latest report from the U.S. Department of Labor shows that Atlanta experienced a 3.6% growth rate for non-farm jobs in the last year. Jobs for the professional and business services industry grew the PAGE 19 • 2017
most at 4.6%. That’s well above the 3% growth rate for that sector nationally.
Percentage of Suburban Renter Growth These are just a few things going on in “Hotlanta”. As for the percentage of suburban rent growth for the other areas, Phoenix and Riverside County came in with a 23% increase. Tampa, Dallas, and Minneapolis range from 18% down to 15% growth in suburban renters. Detroit, Miami, and Denver experienced a 14% renter growth rate in the suburbs. Houston, Washington, D.C., and Seattle were all at 13%. Chicago was at 12%. San Francisco at 10%. San Diego and St. Louis were at 9%. Los Angeles, Boston, New York, and Philadelphia were at the bottom of the list with a 7% to 3% suburban rental growth. The Real Wealth Network offers opportunities for investors to own single-family rentals in several of those suburban markets. We will be talking about opportunities in suburban Atlanta at some of our upcoming live events. For information about our calander, visit Realwealthnetwork.com and just click on the “learn” tab and then the “live events” tab. v
reWEALTHmag.com
How To SUPER-SIZE Your Rents, ~ While Helping Others ~
G
ene Guarino has found a real estate investment niche, which can more than double the cash flow potential of a property. How does he do it? Could it work for you too? Gene started investing in real estate at 18 years old. He has done everything from fix and flip, buy and hold, wholesaling, commercial and everything in between. Fifteen years ago, he stumbled on a way to super-size rents and net investment income as National Speaker, Educator and Founder of the Residential Assisted Living Academy he was problem-solving a challenge for his own family. Now, he’s teaching live and many will also need assishis solution to investors all around tance with their ADLs. the world. The demand and need is huge now, and it is an unstoppable wave > SUPPLY & DEMAND > of opportunity. There are around 77 million > CREATIVE PROBLEM boomers turning 65. With 10,000 SOLVING > people a day turning 65 and 4,000 turning 85 years old each day. In Gene Guarino experienced this for fact, this “Super senior” group is himself, firsthand. When his mother the fastest-growing demographic in needed this type of assisted living America. help. She didn’t like the ‘big box’ As we continue to live longer, offerings out there. Neither did Gene. the over 85 population is expected He wanted to ensure his mom was to surge by 300% in the next few taken care of in a “home-like” atmoyears; 70% of these retirees and sphere. seniors are going to need help with It isn’t always practical or logistheir activities of daily living or tically possible for us to give them ADLs. They will need a place to
article by: Tim Houghten
what they want and take care of the rest of our families. Gene’s mom wanted to keep living in a regular home. Living alone just wasn’t viable, and didn’t make sense, as will be the case for millions of others. As with all other great innovations, Gene stumbled on his life’s calling, and an innovative solution for investors, by solving this need he felt firsthand: “Significant residual income and helping other people” Today, Gene trains thousands of real estate investors to secure their own great retirement, while helping others live well during theirs. For some that may include their own parents. What he discovered was the ability to acquire, convert and operate a residential assisted living home in a single-family home. It gives residents not only the aid they need, but also a far more comfortable and friendly space to live, with good company. Those things can be priceless at that age, and for the peace of mind for family members, and may not only help extend life, but keep it enjoyable as well. The average resident at an RAL home in the US pays $3,600 per month to stay there. It will have 6, 8, 10, 12 or even 16 or more Continued on pg. 24
STRATEGY
3 OFFBEAT
Investments to Consider by Dr. Teresa Martin, Esq.
W
hen most people think of investing in real estate, homes, mini-malls, or apartment buildings may come to mind first. However, that's only the tip of the real estate investment iceberg. Consider the following offbeat real estate investing opportunities. These investments can provide a significant return in the long run and may very well alter your financial future. 1. RECREATIONAL VEHICLES (RV) Believe it or not, RV rentals and sales is a very big market. With baby boomers leaning into retirement and young families seeking a way to lessen their vacation costs, many people are willing to buy or rent an RV.
Realty411Guide.com
• If you're hoping to purchase an RV to save money on your family vacations, keep the RV until it makes sense to sell it. Make routine cosmetic updates to the RV throughout the years to match the expectations of buyers. • Consider renting out the RV for a profit. The RV rental market is hungry with renters, but is much undeserved. You can easily rent out a class C motor home for 7-nights for a minimum of $125 per night! If you're fully booked every week out of the year, you can earn $46,000 in just one year! • For a class A RV you can charge in upwards of $200 per night, or $1,400 for a seven-day week, which equates to $73,000 over the course of a fully booked year. Pop-up campers can be rented for as much as $75 per night - or just over $27,000 for a fully-booked year. > PAGE 21 • 2017
reWEALTHmag. com
MEET YOUR REIA NYC LEADER
Teresa R Martin, Esq - Founder/Counsel
D • Even if you're only able to rent out your RV for two weeks out of the month for $125 per night, you're able to earn $23,000 per year!
2. SELF-STORAGE Self-storage is a big industry. The shaky state of the economy may be partially to blame, as the number of multi-generation homes and families downsizing their living quarters are increasing. • The Self Storage Association reports that one in ten families rent out-of-home storage space. Typically, units rent between $50 per month for a small unit to over $200 for a sizeable storage unit. • The cost of purchasing a self-storage facility varies widely. It can cost as little as $200,000 or as much as $3,000,000 depending on the size, location and demand for the service in the area. • Keep in mind, aside from the mortgage, there is still overhead. Utilities must be operating in order to keep the storage facility at an acceptable temperature; this is to avoid ruined personal property. Also, employees might be necessary, as well as a security system. But as a whole, the investment generates fairly passive income.
3. ONLINE REAL ESTATE Online real estate, otherwise known as websites, requires very little investment and can typically generate a good ROI over time. Traditionally real estate is thought of as tangible, but don't disregard the earning power of online property. When you consider that Candy.com sold for over $5 million dollars, online real estate has the potential for astronomical returns.
r. Teresa R. Martin, Esq. is a sought-after attorney, real estate broker, real estate and financial health coach, keynote speaker, author, consultant, and a Dave Ramsey Master Coach. As principal of her own practice, she has honed her skills in the areas of residential & commercial real estate transactions, foreclosure defense litigation and credit restoration services. In addition to being an attorney, Teresa wears the hat of a seasoned real estate investor with a focus on creative acquisition strategies. Strategies that she developed, implemented and taught to others through her role as Counsel/Founder of Real Estate Investors Association NYC (“REIA NYC”) and as Director and past President of the New York Chapter of Better Investing, the nation’s largest non-profit organization dedicated to investment education. Her legal experience, coupled with her passion for financial ministry and consumer education, led her to join and complete her Group Leader training with Fellowship of Companies for Christ International (“FCCI”) in 2005. She continues to use her God-given gifts to encourage, equip and help others understand sound financial biblical principles through Generational Wealth Zone, a conduit for the everyday person to achieve financial freedom through tutelage in the areas of financial literacy, business ownership, real estate and stock market investing. Teresa has appeared as a legal and real estate expert on Voice of America, Real Estate Straight Talk and numerous radio programs. She has been featured in such publications as Money magazine and Diva Zone magazine and more. Email: tmartin@reianyc. org
Continued on pg. 24 Realty411Guide.com
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How to Super-Size Your Rents, pg. 20
Three Offbeat Investments to Consider, pg. 22
residents. After all expenses including the cost of the real estate, the net monthly profit can be $5,000 to $15,000. Some of that may be funded from long-term care insurance, government assistance, insurance policies, savings and investments or even the sale of a family home. When you focus on just the private pay residents and not the Medicare or government assisted residents, you can be netting $10,000 to $25,000 per month.
• Approximate startup costs are as follows: $10 for a domain name, $0-75 for a standard website template to over $750 for a unique website design, and content creation starting at around $15 for a quality article. • The key to making money online is having high quality and a high quantity of content, in addition to moneymaking streams like marketing other company's products, on-site advertising, or product sales. There you have it — three markets where the competition isn't very fierce and the bar of entry is relatively low. By investing in any one of the three offbeat investments mentioned, you'll have the opportunity to maximize your investment dollar. And over time, you may be able to transform your investment into a fully expanded business. v
If you just want to own the real estate and lease that to the operator of the RAL home, you can typically charge up to twice the normal or fair market rent. The lease will typically be a long-term lease of 3 - 5 years with renewals of 3 - 5 years. That makes for a significant cash flow. That easily has the potential to generate multiple times the average market rent of a given property that may otherwise be leased annually to another individual. With just one of these tenants, investors could be doubling their gross income. This also happens to be extremely important to investors who are now finding they are facing high property prices, peaking rents, and rising interest rates. > FIND THE RIGHT FIT > According to Gene Guarino there are several ways to implement this strategy, including: 1. ACQUIRING EXISTING ASSETS Although rarely available due to being such strong cash-flow generating investments, there may be some of these existing facilities available for purchase as turnkey operations. That means plugging right into an existing stream of income, and immediate returns. 2. ACQUIRING & REPOSITIONING HOMES Most investors will probably find that they can create the most value by acquiring and repositioning homes with this strategy themselves. There may be licenses and regulations to follow, depending on where the property is located, but the upside can be hugely profitable. Realty411Guide.com
3. NEW BUILDS, NEW OPPORTUNITIES With property prices rising, but interest rates reasonable for now, some investors may apply this strategy by custom-building their own facilities from the ground up. This can provide a new and attractive product, with little maintenance requirements, and perhaps even greater equity. > LEARN MORE, EARN MORE > Gene has been training thousands of individuals on how they can apply these strategies themselves. We caught up with him after a recent trip to Central America where he had been training and educating expats in Belize, Panama, and Mexico about how they can do it in their own communities. His US-based students now have residential investments like this in at least 13 states. This training and education is provided through the Residential Assisted Living Academy, which delivers both live and online training. Online training teaches the RAL Formula through modules like How To Turn A Single Family Home Into A Cash Flow Machine, Find It, Fund It, Fill It, and Running Your Business. The 3-Day FAST TRACK is a live training experience that includes touring his RAL certified homes and learning the business from the inside out. Find out more at http://RALAcademy.com/ or call 480.704.3065
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Big Business
MOVING TO
TEXAS Discover Why Companies are Exiting the West Coast and Staking Ground in the Lone Star State, Giving 2020 REI a Hometown Advantage. >>
C
ompanies are moving to Texas in droves. Toyota is relocating hundreds of their employees to their new headquarters in Plano, Texas by May 15th. The biggest online retailer in the world, Amazon, recently moved a major portion of their distribution center to North Texas. That is just the tip of the iceberg. If you think moving to the Lone Star State is just a passing fad, just ask State Farm, Liberty Mutual, Fed EX, and Jamba Juice. The business gold rush has begun and they are all coming to Texas. Why? Let’s break it down. First and foremost, doing business has never been easier. It’s more about business growth than anything else. “Businesses are sick and tired of being over-taxed and over-regulated and are making the economically sensible choice to move to Texas,” said John Wittman, deputy press secretary for Texas Gov. Greg Abbott’s Office. The timing is simply perfect in Texas as both corporate relocation and real estate demand rises at the same time. “When so many large corporations are lining up to move to Texas, there is going to be a shortage of actual real estate available,” said Marcus Reynolds, VP of Investor Relations for 2020 REI. “Texas is a very business-friendly state for companies to move to. Among the essential benefits for this migration to Texas include no state income tax, a strong economy, steady job market, and affordable housing.” California is losing out to Texas as corporations flee higher tax rates and stringent regulations. “I was raised in California and couldn’t imagine a better place to be but in 2011, I realized that the cost of living was so out of reach my family and I decided to make the move to Texas,” said Abe Romero, VP of Marketing for 2020 REI. “If I would have known what I know now, I would have bought as much Texas real estate as humanly possible.” Texas has always been bigger and better but that statement has never been truer for real estate investors. “Texas is an out-of-state investor’s dream,” said Tim Herriage, CEO of 2020 REI. “Real estate investors can come in and fix and flip or purchase and rent for much greater returns than nearly anywhere in the country. Our state is in such high demand that it is not uncommon for my company to buy a property and then find a buyer who will pay 20% more than we paid for it within the same day.” Real estate has for the most part paid higher returns than the stock market. It’s a way for those who want to
Realty411Guide.com
is a very ‘Texas favorable state
for companies to move to along with hard working Americans.
’
invest to take advantage of an asset that has historically outperformed Wall Street. “At the end of the day, we feel great about the service we provide,” said Tim. “We are an investors one-stop shop for Texas. We offer comprehensive in house services for investors of all sizes and scopes. 2020 and its companies have helped investors sell one home, or sell two dozen; and then flipped roles to help an out-of-state fund acquire hundreds of homes using our licensed real estate agents. We have the unique ability of being able to leverage our in-house finance team, full-service real estate agency, and experienced direct investment teams to provide a complete ecosystem for those wanting to invest in Texas.” 2020 REI was founded to live up to its mission; to provide world-class customer support with the highest level of integrity. “Our team is transacting more than $10MM per month in Texas investment property,” said Herriage. “Investable Realty is expanding beyond Dallas to service more of the state, and it is always exciting when we are able to help investors meet their goals, while achieving our own. I encourage investors of all levels to contact our team, and let us show you why we are the premier one-stop shop for real estate investing in Texas.” v To learn more about 2020 REI and how they can help you grow your real estate investment business, please call or text at 972-382-7866 or email us at sales@2020rei.com
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Texas real estate bought as much as humanly Texas real estate possible. as humanly possible.
stop shopsaid for ted and are making the Tim has 12 2000Herriage homes. He years is provide,” Theto �ming is said Texas.“We Weare offer experience the helping single Tim. passionate in about ce to move Texas,” an family real estate estate investors industry investors other real simply in comprehensive s secretary for perfect Texas Gov. one and has purchased over in house services achieve success” Texas as both 2000 homes. He is stop shop for corporate for investors of The �ming is We offer passionate about helping Texas. reloca�on and in real other real estate investors comprehensive all sizes and simply perfect achieve success” estateas demand 2020 and its companies have helped Texas both inscopes. house services rises at the same investors sellofone home, or sell two dozen; and then corporate for investors �me. “When flipped reloca�on andsoreal all sizes roles and to help an out of state fund acquire many large hundreds2020 of homes our licensed real estate estate demand scopes. and itsusing companies have helped corpora�ons are agents. We unique ability of beingand able to rises at the same investors sellhave one the home, or sell two dozen; then lining “When up to move leverageroles our to help an out of state fund acquire �me. so flipped in-house of homes using our licensed real estate to Texas, there is many large hundreds finance going to be a are corpora�ons agents. team, We have the unique ability of being able to serviceour real shortage of move actual MARCUS Marcus Reynolds is VP of full REYNOLDS leverage lining up to Relations at 2020 estate agency, real estate isInvestor VP of Investor Relain-house to Texas, there is REI. He is an expert at finding available,” tions at 2020 REI. He is and experienced going to besaid a stabilized turnkey properties finance team, direct estor Rela�ons atwho sourcing service real shortagefor of 2020 actual an Marcus Reynolds iswant VP of forexpert investors to full Investor Relations at 2020 estate investment ss friendly for grow their portfolio through 'stabilized turnkey agency, realstate estate REI. He is an expert at finding passive real estate teams to provide mong theavailable,” essen�al benefits investment properand experienced said stabilized turnkey properties investments. ncludeRela�ons no statefor income ties' for investors who a complete estor 2020 for investors who want to direct ecosystem for dyfriendly job market, plan strategically ss stateand for growto their portfolio through investment passivetheir real estate teams those to wan�ng to investment provide mong the essen�al benefits grow investments. in Texas.” portfolio. ainvest complete nclude no state income exas as market, corpora�ons ecosystem for dy job and flee 2020 REI was to ent regula�ons. “I was those wan�ng founded to live ldn’t imagine a be�er invest in Texas.” up to its ealized that the cost flee of exas as corpora�ons mission; my and I decided 2020 REI to was nt family regula�ons. “I was to provide aid Abe Romero, VP of foundedworld to live ldn’t imagine a be�er I wouldthat have known what I Abe Romero is VP of class up tocustomer its ealized the cost of Marketing for 2020 REI and support ught as much realto mission;with to the my family and I Texas decided brings 20 years of marketing highest level of .” provide world aid Abe Romero, VP of experience to the integrity. “Our team is transac�ng more than $10MM I would have known what I ABE Abe Romero is is organization. HeVP ROMERO VP ofis class customer per month in the Texas investment property” said er and that Marketing 2020 REI and passionate for about working in support with ught asbe�er much but Texas real ofbrings Marketing for 2020 20estate years of marketing the real industry and highest truer for real estate Herriage. “Investable Realty is expanding beyond level of .” REI and brings 20 experience to years the Dallas to service more of the state, and it is always helping investors better of-state investors dream,” integrity. “Our team is transac�ng more than $10MM He is understand the market. oforganization. marketing experiexci�ng when we are able to help investors meet their 2020 REI. “Realbut estate per month in Texas investment property” said er and be�er that passionate about working in ence to the organizagoals, while achieving “Investable our own. I encourage investorsbeyond of all level fix andfor flip or estate purchase and rent the for real estate industry and Herriage. truer real Realty is expanding tion. He is passionate helping better our nearly anywhere in the country. Our investors to contact team, and let more us show youstate, why we the premier of-state investors dream,” Dallas to service of the andare it is always about working in the understand the market. one-stop shop for real estate inves�ng in help Texas.” d that it is not uncommon for my exci�ng when we are able to investors meet their 020 REI. “Real estate real estate industry goals, while achieving our own. I encourage investors of all level fix and flip or purchase and rent for and helping investors nearly anywhere in the country. Our to contact better understand the our team, and let us show you why we are the premier one-stop shop for real estate inves�ng in Texas.” d that it is not uncommon for my market.
ry te ry es te es ard
ard
o Texas or’s Dream
Real estate investors can Real estate come in and fix investors can and flip or come in and fix purchase and and flip or rent for much purchase and greater returns rent for much than nearly greater returns anywhere in than nearly the country. anywhere in the country.
‘Real estate investors can come in and fix and flip or purchase and rent for much greater returns than nearly anywhere in the country.’
TIM HERRIAGE has 15 years’ experience in the single family real estate industry and has purchased nearly 2000 homes. He is passionate about helping other real estate investors achieve success.
THE #TRUMPECONOMY W What’s next for America, the real estate market and global investors?
An economic analysis by Tim Houghten
e’re wading into the Trump Economy. How do we survive and thrive in these new times?
It no longer matters whether we loved or hated the idea of Trump winning the election. He’s in the White House. Instead of allowing our emotions to hang on the puppet strings of big media, what we all need to focus on is what is really happening off-screen, and how we can get out in front of it, and make smart investment decisions. THE BIG SHAKE UP Some big shake ups have happened: The firing of many government officials and Continued on pg. 30
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President Trump has been very vocal about easing the ability to lend and borrow, specifically for home buyers and small businesses. the reversal of numerous Obama-era policies. Brace yourself: More change seems imminent. Focusing on the facts; what we do know is that there has been a big shift in both the energy sector and jobs. It appears that there is now far more support for old energy. That includes support for the Keystone XL
pipeline and entrenched automakers. Several major auto manufacturers have already pledged to reverse direction, and expand plants and jobs in the US, to the tune of billions of dollars in investment, and tens of thousands of jobs. That’s on top of the almost 300,000 jobs added in February 2017, which beat estimates by almost 30%. Infrastructure investment, a stronger job market, and hopefully rising wages, could all lay a great
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foundation, and become a launch pad for a far more robust American economy in the years ahead. THE REAL ESTATE PRESIDENT If there is one thing that virtually everyone can agree on, it is that Trump should be great for real estate. One must assume he ought to act in the interest of his main passion and investment of choice. The real estate market is going strong with foreclosures down, inventory tightening and interest rates still being historically low. Funding criteria is also loosening up with stated loans and other creative funding products returning. Despite all the tales of bankruptcies, the conspiracy theories and fake news, Trump remains a real estate legend. That belief has already shown up in the market This fresh confidence in the market has set off a new surge. The idling market, which had appeared set for a dip, got wings in January, setting a 10-year record for home sales, according to NAR (National Association of REALTORS®). Wells Fargo and the National Association of Home Builders simultaneously reported a bump in sentiment, and new highs in home buyer activity, with a bright outlook for
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2017. Buyers are shopping, investors are hunting for deals, sellers are listing high, and real estate and mortgage professionals and businesses are injecting masses of capital into new marketing campaigns to claim a share of the action. The general consensus is that this flurry of confidence and activity will carry the market through the majority of the next four to eight years and beyond. LENDING CAPS The rise of property values and transaction activity may only be hindered by access to credit and affordability. President Trump has been very vocal about easing the ability to lend and borrow, specifically for home buyers and small Realty411Guide.com
businesses. A return to the ‘good old days’ of easy sub-prime lending might be welcomed by many. Yet, banks and big funds have already established new channels for putting capital to work, and avoiding the risk of direct consumer lending. They are currently far happier loaning to real estate investors than retail home buyers, and that’s showing up in underwriting and mortgage approvals. Some investment property lenders are again offering 100% financing and stated income loans. That’s a combo most home buyers may have to wait a little longer for. Meanwhile Fannie Mae and Freddie Mac have publicly announced that they intend to loan billions this year, as they blow through lending caps, thanks to exemptions for ‘affordable’ housing projects. Hopefully the powers that be will be able to gracefully maintain balance Continued on pg. 122
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The Truth About Income & Real Estate Investing
T
BY SENSEI GILLILAND
he art of transacting real estate investments for generating income, and why investing in rental property may not be the move for you, yet… Real estate is absolutely the cornerstone of wealth. It is highly reliable, and an essential element for building and preserving finances. However, some find getting started, and getting the results they hoped for, is a challenge. Over the last 22 years of coaching and training investors, I’ve found that comes down to three main things. 1. Getting lost in the different investment options 2. Making it more complicated than it needs to be 3. Failing to have a solid action plan MYTHS & MISCONCEPTIONS ABOUT REAL ESTATE INVESTING * MYTH 1: There is One Superior Way to Invest One of the biggest hurdles today is not only the increasing number of real estate websites and gurus out there, but that so many are more focused
on sales, rather than true education. Too many try to promise that their strategy is ‘the superior’ solution. The truth is that wholesaling, fixing and flipping houses, private lending, and investing in rental properties can all work. I’ve personally done all of these. I still do today. The best strategy really comes down to your personal preferences, your timeline, capacity to invest, and goals. Some people love rehabbing houses and would do it regardless of the money. Others just want a completely hands-free way to invest and would never dream of taking on a DIY project for any amount of money. For many it is a matter of the right strategy at the right moment, and diversifying and moving up over time. * MYTH 2: You’ve Got to Do a Lot of Deals How many houses does someone need to own or flip per month to live a comfortable life? See most people I encounter think they must do five to 10 houses per month. Then they just get daunted by the size of that, or they set unrealistic goals, which diffuses their motivation, and they never get started. It’s true that there are investors and business owners out there hustling, doing 10, 20 or more deals a month. Big goals
>
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are great. Yet, most don’t need to do anywhere near that. Every deal is different. But if you could make $5,000 wholesaling a property, or $50,000 flipping a house, or $500 a month on a rental, how many would you really need to live well? Two wholesale deals a month would make you over $100,000 per year. Rehabbing and flipping a house every 2 months could pocket you $300,000 per year. Ten modest rentals could give you $50,000 in passive income per year. Or you could loan your capital to some good house flippers as a private lender and make 10% returns, and beat the pants off the performance most are getting in the stock market. * MYTH 3: You Should Focus on Building the Biggest Stash of Cash Having big figures on your bank statements, a six-figure 401(k) balance, and a home safe stuffed with cash might make you feel great. There are definitely benefits of having liquidity and some serious reserves. Yet, no matter how much you’ve got, you can burn through it fast. Check out the stats and you’ll find the average retirement account balances dives around 50% within the first five years of retirement. Today we’ve got to be prepared to live 30 plus years after retirement age. We also need to be prepared to survive and provide, even if we can’t get up and go to work tomorrow. Ongoing passive income streams are far more valuable than cash in the bank. I’d rather have just $100,000 in the bank and $100,000 in perpetual annual income from rentals, than having $1M in the bank, and no passive income sources.
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* CREATING A BATTLE PLAN Whether you need $70,000 or $700,000 a year to life comfortably and afford the lifestyle you want and to sustain it, you need a plan. If you are starting out with nothing, then you may need to start with wholesaling, and then move up to fixing and flipping, and then invest that capital through private lending and acquiring income producing rentals. Or maybe if you already have some capital or properties, you just need to restructure your portfolio to optimize your cash flow and wealthbuilding potential. It doesn’t have to be that complicated or confusing. It can take work and hustle, but if you are passionate about your goals, you can achieve them through real estate. It’s all about having a plan that’s right and that works for you. That’s what I do. I help investors, from brand new beginners to those with established portfolios, to create a straightforward step-by-step battle plan to get where they really want to go, in a way they can stick to. If you are not sure exactly what the right way to start is, or if you are getting the most out of your investments, then visit www.BlackBeltInvestors.com and setup a free strategy session, with me, and I’d be glad to show you how I’ve helped thousands of others get on the financial path they always dreamed of. v PAGE 46 • 2017
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Brad Sumrok quit his corporate job in 2005, thanks to investing in multifamily real estate. He’ll never go back to the rat race, because he and his wife live life on their own terms and have more freedom and income than when he had a job. THE WORLD IS YOUR OYSTER
replaced his six-figure corporate income and put $1M in his pocket from Brad and Jennifer Sumrok are always his investments and quit on the go: From traveling around the his job. He was just 38 world, to teaching students nationyears old. What do you do ally and having homes in two states. when you don’t have to We caught up with Brad one recent work to survive anymore, afternoon as his wife prepared some especially starting at such healthy shakes in the background. a young age? The financially independent couple While you’ll find were getting ready to take off to Brad Sumrok’s popular Hong Kong and Thailand for a 24Facebook profile rich in day birthday getaway. travel pics, workout vidThe Sumroks have a second home eos, and his investment in the sunny Gulf Coast of Florida, properties, Brad says but say they get away internationally that he really found at least two times each year. Rehis gift in teaching cently that includes destinations like others how to master Italy, Costa Rica, and Machu Picchu investing in apartment in Peru. buildings for passive Though Brad says one of his most income. memorable excursions was taking Although he had his dad on his dream vacation — a rarely spoken on 13-day cruise and land exploration stage prior to getting of Alaska, for his 80th birthday. into real estate he says “when you are On another occasion Brad took off led to something, when you are living to live in Mexico for six weeks to in your passion, and area of mastery, immerse himself in the culture and you are not really working.” Addlearn Spanish. ing that what he does now is simply “sharing life experience and transferTHE KEYS ring that mastery,” to his students. TO FREEDOM APARTMENT For the Sumroks, financial freedom INVESTOR MASTERY came from investing in Multifamily real estate. Brad says that in 2003 Brad Sumrok currently hosts three he found a mentor who taught him weekend training events in Texas about real estate and financial indeeach year. These March, July, and pendence. In under three years, Brad November events attract hundreds Realty411Guide.com
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of attendees from all over the United States, and beyond. Over 400 guests visited the March 2017 weekend, which combines live training and loading up in buses to get out and look at active multifamily property deals. As of early 2017, Mr. Sumrok personally owned property in five states, and six different property markets. In the last year his students acquired 29 multifamily complexes, in 11 markets, totaling 2,885 units, worth
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SUMROK’S SUCCESS
STUDENTS’ STORIES <<< months “In less than 10 Brad’s trainafter attending purchase of ing, we led the ahoma for 214 units in Okl d’s Mento$7,350,000. Bra made everyring Program r us.” thing so easy fo and - Tariq Sattar Iven Vien
(Above): Brad’s Weekend Apartment Investor Training in Dallas with over 400 attendees from all over North America and the world.
(Above): Brad and Jennifer Sumrok produce and host multifamily property tours, which have grown to become one of the most popular tours in the industry.
>>> Brad, aka:“The Apartment King,” is surrounded by fun-loving ladies who are also successful apartment investing students.
>>> “We joined Brad’s Program and were surprised at how quickly things happened for us. We followed Brad’s process and closed on two buildings totaling 128 units in New Mexico. Following Brad’s system made it so easy!”
<<< “I was an absolute beginner who purchased a 32-unit property with seven other investors I met in Brad’s Program. Two years later we sold the property and the investors more than doubled their money.” - Tom Lafferty
- Monick and Peter Halm (with partner Chris Rush)
>>> “Brad helped us buy a 32-unit property that initially cashflowed over $3,000 per month. After 3 years, we refinanced and pulled out $450,000 tax-free! We still own it, have over $600,000 equity, and cash flow over $3,000 per month. This one deal changed our lives.” - Phyllis and Ken Salverson Realty411Guide.com
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What will you do with your freedom? $133M. Brad says there are three main types of attendees at his events. This includes: active single-family home investors who are feeling the pain of daily management and trying to scale, and passive investors who have capital to work with and want hands-free, cash-flowing opportunities. Or like him in 2002 — the educated corporate workers who may have some savings, but have never been taught about being an investor or business owner, and who may want to skip over single-family investing and start immediately as a multifamily investor, either buying Realty411Guide.com
large deals as a Syndicator or smaller deals with their own money. While his weekend training events are held in Texas, the strategies taught there can be applied anywhere in the US, as demonstrated by many of Brad’s students and Brad himself who buy in different US markets. Brad says that while he enjoys world travel he believes success comes when you “invest in what you know, and where you know,” and that area of mastery for this educator is in US apartment buildings. While this may sound complicated or a big move to make, attendees love Brad’s ability to break it down
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and make it simple. For those who can commit a few hours per week, achieving their own financial freedom can be a realistic and attainable goal as well. ENRICHING PEOPLE CHANGING MANY LIVES Those interested in finding out more about Brad and his events can do so online at ApartmentInvestorMastery. com or BradSumrok.com. Then it’s up to each individual and family to decide how they will flex their freedom. For the Sumroks, it isn’t just travel and education, but also increasingly enriching others’ lives.
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#SUMROKSTYLE SEE THE WORLD The Sumroks: Live Free, Have Fun, pg. 38
Recently that has included helping family members realize their dreams, charitable contributions for back to school drives, and organizing and matching charitable donations and GoFundMe campaigns for local people such as those who need critical surgeries, but lack the funds. What will you do with your freedom? v
Above: Brad and Jennifer feeding an elephant in Thailand. Below: In Stonehenge. Right: The loving couple renew their vows before family and friends.
ADVENTURES FROM MULTIFAMILY INVESTORS Left: Fun times with family is the foundation of the Sumrok lifestyle. Peace out from Alaska while rafting with Bradâ&#x20AC;&#x2122;s father and Jenniferâ&#x20AC;&#x2122;s mother.
Above: Brad and Jennifer visiting and celebrating with Robert Kiyosaki, founder of the Rich Dad Company, at his birthday party held on a cruise. Above right: Extreme adventures on a glacier in Alaska.
Above: Brad and Jennifer in front of the la rgest Buddh a statue in the world at Lan tau Island, Hong Kong.
HEALTH +
- A Day in the Life of Brad and Jennifer Sumrok What’s it like to run a multi-million dollar multifamily empire with properties around the country? The Sumrok’s take you behind the scenes into their busy, healthy, and fun-filled lives! 7 am - The Sumrok’s awake (to no alarm) after getting a good night’s sleep. The active duo do not set alarms unless they are catching a flight or have some other scheduled voluntary activity. After awaking, they immediately start drinking water.
Workout time with their personal trainer, Robert Terry.
7:15 am - Brad drinks coffee (yes, that is still one of his vices) and Jen has tea while they discuss the upcoming day. 7:30 am - Drink up! Time for a vegan protein shake. 8 am - 9:30 am - The fit couple hit the gym religiously four to five days per week! Workouts consist mostly of weight training (about an hour) followed by abs, then 20 min of high intensity cardio. A yoga day is added for flexibility. When in their Florida home, they also enjoy running or walking on the beach in the morning. While traveling, the Sumrok’s do their best to maintain working out and choose hotels with decent fitness centers and full-service restaurants. Their favorite U.S. chains are Fairmont, W, Four Seasons and JW Marriott. 10 am - Breakfast (either made at their home or in a local restaurant that specializes in paleo/organic foods). Brad and Jen’s favorite is the “hash bowl” (diced sweet potatoes, onions with scrambled egg whites and grilled chicken). Jen doesn’t eat meat so she has hers with eggs, avocado, quinoa and kale. 11 am - 5 pm - This time is usually spent supporting students with coaching calls and reviewing deals, working on their business (planning events, prepping for speaking engagements, growing the business, and meeting and supporting Sumrok team members). They also replying to emails and phone calls. 1 pm - Lunchtime. Brad usually chooses prepared foods from places like MyFitFoods or Snap Kitchen in Dallas, or FitLife Foods when in the Tampa Bay Realty411Guide.com PAGE 40 • 2017
area. They also frequent Whole Foods and eat from the salad bar or hot bar. 6 pm - Dinner time. They either dine on prepared foods, cook dinner or eat out in local restaurants that offer healthy/ organic dining options. 7 pm -11 pm - Time to relax, read, debrief the days activities, discuss plans for the next day/week. They also enjoy Face-Timing with family and staying connected with them. They catch up on emails and listen to voice-mails from the day. Sometimes they work on the business. Occasionally, they watch a movie on AppleTV. They don’t do sitcoms or watch the news. When in their Florida home, they also get together regularly with Jen’s family in the evenings. 9 pm - Usually they have some sort of low-carb snack like non-fat Greek Style yogurt or a vegan protein shake. 11 pm - The health-conscious couple are usually in bed early. Of course they are not always like his 24/7/365. They enjoy eating out a lot and their favorites are Italian food, Thai, Indian and Mediterranean. Pizza and red wine is their typical “splurge” meal. Due to our travel schedule, they do their best to choose healthy options.
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â&#x20AC;&#x153;The Secret to Living is Giving.â&#x20AC;? - Tony Robbins
Brad and Jennifer Sumrok backstage with their mentor, Tony Robbins.
GROWTH
F
or the leveraged investor, today’s financial tools will continue to provide predictable, stable, and secure double-digit returns for the foreseeable future. In an attempt to put this positive outlook in perspective, let’s consider four critical topics. This will help confirm, bring caution, or even deny our opening statement.
plained away by sound reasoning and good explanation. The pendulum had swung. Yet in response, a dual market for financing was created to meet demand. Let’s develop this. Most Investors of “1 -4 units”, understand 30-year fixed rate mortgages and the rule of 10 financed properties. Most know this market now falls under the new “TRID” rules, or just for fun, TILA
with Leverage
by Michael Ryan
• Dodd-Frank, CFPB and Government Restrictions • Lending TRID & Non-TRID Leverage • Interest Rates • Non-TRID Lending
RESPA Integrated Disclosures. What is little known, is the plethora of “NON-TRID” lenders. Why so? Because TRID technically, is only for owner-occupied. Yet to keep lives simple, most lending portals now include non-owner, 1 to 4 units. A healthy way to assure liquidity in this market. Beyond this, a number of lenders are providing mortgages for rental units, but ones based upon a modified set of rules. Though these rules are guided by Federal oversight, they are not as restrictive. Hence the number of leveraged properties is more flexible and required levels of cash reserves are less stringent. Bottom line: Markets adapt to consumer demand and lending options are available. What about interest rates? Truly a favorite topic of mine. After 35 plus years of success in real estate, driven by ever trending lower rates, we maybe on the verge of a season of rising rates. Should this concern us? My answer is: “No.”. Why so? Because rates are but one component of overall market fundamentals. Fur-
The Dodd-Frank financial reform created a new layer of government oversight called the “Consumer Finance Protection Bureau” or CFPB. It was signed into existence by former President Obama, as a solution to the financial crisis of 2008. It took full effect in 2013. Will it be changed anytime soon? Not likely, though promised. Keep in mind, Congress seldom “undoes” what it has done and an executive order is pointless. Let’s be clear, the after shocks of 2008 brought about a significant shift within the lending industry. In effect, it made “protection” of the public, a top priority. This was quite a shift from the traditional viewpoint of lending, one based upon risk-taking and risk aversion. Further it locked into place, barriers to lending, which could not be exRealty411Guide.com
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ther, rates tend to rise in response to a growing economy, one where wages, property appreciation, and rents are showing real signs of lasting strength. Thus the key to success, is not rates alone, but instead “locking” in a lending rate below the “cap rate” of the investment. This is the disciple able to push one’s “return-on-capital” into the mid-teens. Often in history, the time to invest or shift one’s portfolio, is when rates first begin to rise; when wage growth and increasing property values exceed changes in rates and inflation. Now seems a good time. With this, is the growing awareness that today’s interest rates take into account more than just financial fundamentals. They also consider the overall economic, social, and political stability of Europe, the Mideast, Russia, China, and else where. This uncertainty may help explains why US rates did not start increasing in 2014, even though Continued on pg. 97
reWEALTHmag.com
REIA CLUB
Discover the All NEW BREIA / MD-REIA Mentorship Program Learn about the only mentor program in the country that puts up 100% of the funds for every student’s deal! What are the 3 reasons why you should choose a local mentor? Real Estate investing has become one of the most popular ways to get out of the 9-to-5 lifestyle and become financially free. Have you ever heard the saying: There are more self-made millionaires through real estate than all other industries combined? Since the explosion of popular television programming based on people making a lot of money flipping real estate, there are even more people today that are trying and succeeding in the business. Part of the reason for this, and based on the popularity of these television shows, is the fact there are more so called “gurus” or “mentors” for real estate investing than ever! Every time you get on Facebook or YouTube, there is an advertisement for someone that wants to teach you how to become rich flipping properties using their “system”. The biggest challenges for these national mentors and their “systems”, are also the reasons why you should choose a local mentor!
HERE ARE THE 3 REASONS WHY YOU SHOULD CHOOSE A LOCAL MENTOR... 1.) YOUR MENTOR HAS TO BE ACCESSIBLE! When learning any trade, it is almost impossible to not have any hands on training involved in the process. This is especially true for Real Estate investing. Your mentor has to be able to show you the ropes firsthand. It is truly more of an apprenticeship than mentoring. Many of those involved with a national mentor complain of not being able to actually contact their mentor with questions. More importantly, when it comes time to put a property in contract to flip for a profit, their mentor is not there to help them negotiate the deal and sell the property. Even if the national mentor program assigns you to an investor in your state, there is not much guaranteeing that they will be any more accessible. 2.) YOUR MENTOR HAS TO HAVE EXPERIENCE IN YOUR MARKET! If you are going to flip houses in Houston Texas, don’t you think it would make sense to have a mentor that actually flips houses in Houston? Of course it >
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makes more sense! The South Florida market is very different than other markets. There are some general characteristics and basic principles that are the same no matter where you are flipping houses, but not enough to lead you down the path of success. Even some of the small details, like how the City of Miami Gardens requires a new Certificate of Occupancy issued when you buy the house. This process is determined by Code Enforcement performing an inspection of the property. If the house fails the inspection, you cannot purchase the property to flip it so you potentially just lost your profit. There are different rules and regulations imposed by different city and county governing bodies. There are different contracts that are used in different states. There are even different cultures that exist as microcosms within a city or state that can mandate how one is received by sellers and buyers. If your mentor doesn’t know their way around, they cannot guide you!
investors and rehabbers that have been in the South Florida market for about 20 years! The BREIA headquarters is not only where daily one-on-one coaching sessions are given, but there is also a large classroom for the student support classes that range from marketing strategies to roll playing sessions to learn how to actually talk to sellers. There are even classes given by some of the corporate members of BREIA like the HUD class and how to do a proper closing when selling a property. Both the Broward REIA and the Miami Dade REIA are accredited chapters of the National REIA.
3.) YOUR MENTOR HAS TO HAVE A FUNCTIONING NETWORK! If someone has the necessary experience and knowledge to mentor you, then they will have all the connections you need to eventually build your own team. From contractors, to real estate attorneys, to trusted title companies, you will need trusted experts in your area. As they say: It is all in who you know! The Broward Real Estate Investors Association, in conjunction with the Miami Dade REIA, has one of the most successful mentor programs in the country…. but they only mentor students one-onone in their market. The owners, Ryan Kuhlman and Anish Dave, as well as their Director Antonio Lopez are not just out in their market teaching how to flip houses, they are a team of highly successful wholesale
They are the only members of the National REIA in South Florida, and with the collective effort of the NREIA’s 155,000 members nationwide, the BREIA mentor students have more knowledge and experience available to them then they will ever need. So be wise when making a commitment to any mentor. Get out your checklist and don’t be afraid to put the mentor to the test. Anyone that fails or doesn’t feel comfortable with you questioning them is probably not confident about what they can teach you. v
The Broward Real Estate Investors Association, in conjunction with the Miami Dade REIA, has one of the most successful mentor programs in the country… Realty411Guide.com
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Sept. 15,
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in Search of the
Bâ&#x20AC;&#x160;EST MARKETS w ith Marco Santarelli
NORADA REAL ESTATE
INVESTMENTS
NORADA REAL ESTATE Your Premier Source for Turnkey, BY STEPHANIE MOJICA
T
Cash-Flow Investment Property
o Marco Santarelli, founder of the California-based Norada Real Estate Investments and host of the popular “Passive Real Estate Investing” podcast, true wealth is not just about finances. Wealth is “a measure of time, not money,” Santarelli said during a recent email interview. Santarelli made his first real estate investment at age 18, and founded Norada in January 2014. “Norada has been a major force in putting ‘turnkey’ real estate investing on the map,” Santarelli said. “Investors looking for help and guidance seek our services when they want to invest without doing all the heavy lifting. They often lack the time to go it alone and assemble a trustworthy team to work with. We’ve done all that for them.” One of the benefits of working with Santarelli and his team is that they are “market agnostic,” he said. “We are not married to any specific market. In fact, we’re not married to anything—including builders, rehabbers, property managers, lenders, inspectors, etc.” “This is a huge benefit to investors because we only make recommendations based on their financial goals and investment criteria.” All members of Norada’s staff are real estate investors who want to help people succeed, Santarelli added. “I love that I can help hundreds of people create true wealth, which for me is financial freedom that provides time freedom — our most precious commodity. I don’t have to do what I do, but I do it because I love real estate and I love helping people achieve what I’ve been able to achieve in a few short years.” Santarelli hopes to help save others time,
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money and avoid pitfalls. “The wealth formula is simple, but having the right process will save time and avoid costly mistakes, which I’ve made long ago. When we can show others how to create wealth and lifelong passive income, that is truly a winning formula that provides generational wealth.” Major influences behind Santarelli’s personal and professional success are not necessarily formal mentors, but the many real estate, business, finance, and personal development books he’s read over the years. Two of the books that helped him the most are Tony Robbins’ “Personal Power” and Napoleon Hill’s “Think and Grow Rich.” If Santarelli could give only one piece of advice to beginners in real estate investing, it would be for them to educate themselves as much as possible. “Knowledge is the new currency,” he said. “It’s my first rule of successful real estate investing.” Additional advice would be to work with professionals to avoid common pitfalls, such as only investing in one’s geographic backyard (i.e. your local market). “Nothing is further from the truth,” Santarelli said. “The greatest hurdle people have when investing out-of-state is their mindset and psychology. It’s no different than investing in Coca-Cola stock knowing their head office is in Atlanta and you live in San Diego.” “Once you get started and purchase a few properties, you’ll realize that you never have to visit it physically. Everything is done through your team and especially your local property managers.” “Invest your cash where it generates the greatest returns for you. This is particularly true for those
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living in more expensive markets such as those along the U.S. coast. Out-of-state rental properties are the only real solution for many investors in order to see favorable cash-on-cash returns.” Santarelli offers three additional pieces of advice for investors, especially those just starting out. 1. Get started as early in life as you can. 2. Increase your income as soon as possible to put towards investing. 3. The financial system is designed to work against you, and real estate is one of the few ways to beat the system.
To learn more about Marco Santarelli and Norada Real Estate Investments, visit www.NoradaRealEstate. com or www.PassiveRealEstateInvesting.com Many free resources are available on Norada’s website, including “10 Rules of Successful Real Estate Investing” and “The Ultimate Guide to Passive Real Estate Investing.” Norada’s headquarters, in Laguna Niguel, California, can also be reached during normal weekday business hours by phone at (949) 218-6668 or (800) 611-3060.
HOW TO INVEST WISELY
Norada Real Estate has transacted in the most sought-after markets: • Atlanta, GA – Ranked the #1 Rental Market in the US • Birmingham, AL – Host of the 2021 Word Games • Charlotte, NC – 2nd Largest Banking Center • Chicago, IL – Over 50% Renters • Dallas, TX – Double-Digit Appreciation Growth • Fayetteville, AR – Fastest Growing City in the State • Houston, TX - #1 Job Market in the United States • Indianapolis, IN – Most Affordable for Real Estate [Forbes] • Jacksonville, FL – Tech Job Center • Kansas City, MO – Below Average Cost of Living • Little Rock, AR – Best Place to Live in America • Memphis, TN – Non-Bubble Market • Palm Bay, FL – Top 10 City for STEM Jobs [Forbes] • Salt Lake City, UT – Low Unemployment • San Antonio, TX - #2 Recession Proof City [Forbes] • Tampa, FL – 5th Hottest Real Estate City in America
by Tim Houghten
W
hile Norada offers information on a variety of real estate investment options, the company is mostly “focused on passive income-producing turnkey real estate investments.” These are new or like new properties, that have tenants in place and are under professional management. Regarding the debate about new versus existing properties, the firm’s founder says “both can have their advantages. We are seeing more demand for new properties. We are seeing investors trend toward new construction, and especially new fourplexes, in growth markets. They can offer lower maintenance costs now, and can be highly attractive to tenants.” Norada prides itself on being “market agnostic.” In other words, not simply promoting and pushing one product because it is the only inventory they have or know. They constantly analyze about 400 markets across the US and make recommendations according to current dynamics, emerging trends, and individual investor goals and resources. One thing this real estate investment firm is notable for is its diligence in monitoring service providers for its clients. When it comes to management, their philosophy is that, “Full service property management is a must. This is something we take very seriously.
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For more information about the “Passive Real Estate Investing” podcast or to pre-order Marco’s new book, visit www. passiverealestateinvesting.com
We are tough on our vendors. If they are ever caught delivering poor or slow communication, and aren’t up to our constant service standards, we make sure they are replaced. It’s become very rare for our clients. But it’s something we keep a close eye on.” Whether new builds or existing rentals, these turnkey properties are designed to deliver hands-free, truly passive income, even if fully leveraged, with potential for ongoing equity appreciation. It is an ideal strategy for any investor, including those using self-directed IRAs or
PAGE 50 • 2017
401(k)s, as well as young professionals looking to get a head start towards financial freedom. WHERE TO INVEST NOW Asked about his take on some of the latest data, which shows some challenges in markets like San Francisco, Marco tells us that “While everyone has individual goals, and what’s best for their portfolios may be different, I’d never recommend investing in San Fran or other ‘bubble markets’. All real estate is local, and that means looking at each local economy when investing.”
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Money411 P R I VAT E
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Money411 P R I VAT E
CONTENTS 55 Secure Your Financial Future by Kaaren Hall 57 The Serious Club for Serious Investors 61 Comparing Sydications by Tom Wilson 66 Choosing the Right Coach and Mentor 68 Should Buyers Choose the Title Company? 74 What Social Media Marketing Statistics Reveal
Above: Sarah Montes on the cover of Private Money411. Sarah and her team operate Texas Pride Lending, read more about this innovative company (page 72), which provides RMLO services to real estate investors in Texas.
77 Jimmy Reed Reveals Garage SALE Real Estate 81 FAST Funding... Up to 100% Funding for Deals 83 Attack and Get PAID - Training with Todd Dotson
pg. 61
CONTACT US: 805.693.1497 or info@realty411guide.com
pg. 68
Be social, look for our updates on Facebook, Twitter, LinkedIn, Pinterest, Tumblr, Google+ & more! Important Disclosures for Our Readers: The information and presentations provided herein do not constitute an offer or solicitation to buy or sell securities or real estate. Please be aware that real estate investing can be risky. Realty411, the publisher of Private Money411, is not responsible for any information provided and/or statistical data presented, and does not reflect the opinions, advice or research by us. Readers are 100% responsible for their due diligence, for all investment information and for all decisions with respect to any potential investment or transaction. Publisher recommends readers seek the advice of a trusted attorney, broker, CPA and/or financial adviser before investing.
*
pg. 66
LEARN FROM FOUR HGTV REHAB STARS LIVE! See pages 70-71.
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SECURE YOUR FUTURE:
Investing in Real Estate Through Self-Directed IRAs by Kaaren Hall
D
o you have a 401(k) with a previous employer or an IRA? Are these accounts invested in stock market assets? Most retirement accounts are invested in stocks, bonds and mutual funds however the Self-Directed IRA lets you invest outside the stock market. For over 40 years you have been able to invest your retirement dollars into assets like real estate and most people don’t know about it. In fact there is about $24
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Trillion in US retirement accounts. Only 3-4% of that amount is invested in what’s called “alternative assets”. When you think about building a retirement for yourself consider the Self-Directed IRA. When it comes to investing in Real Estate, the Self-Directed IRA allows many ways to do this: • Residential real estate, including: apartments, single family homes, and duplexes >
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•Commercial real estate •Undeveloped or raw land •REITs (Real Estate Investment Trusts) •Real estate notes (mortgages and deeds of trusts) •Promissory notes •Private limited partnerships, limited liability companies, and C corporations •Tax lien certificates Take Joe for example. Joe retired from his employer at the age of 50. It was a forced retirement because the company was restructuring. He spent 20 years at his previous employer putting aside 15% of his annual earnings. Now that he was “retired” Joe decided to become a real estate agent. He noticed his own IRA was losing money and putting this money into a self-directed IRA was something that made sense to him. Joe says, “It gave a monthly boost to my IRA account through the rent money. Plus it gave me equity growth. As a self-employed person, it has given me a small glimpse of security into my retirement age. Whenever that will be.”
Right now and for the next decade ten thousand baby boomers will reach age 65 every day! The average account value for Americans 55 to 64 years old is $103,000. You have to ask yourself is that going to be enough to sustain you through your retirement years? Many people, like Joe, are enjoying the tax-deferred or tax-free benefits of using their IRAs and 401(k)s to secure a better financial future. So how do they do it? Self-Directing your retirement is a 3-step process to: 1) OPEN AN ACCOUNT 2) FUND THAT ACCOUNT AND THEN 3) INVEST We have helped thousands and we can help you accomplish your self-directed retirement goals at uDirect IRA Services. v
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ABOUT KARREN HALL: After 20+ years of experience at Bank of America, Indymac Bank and her own mortgage brokerage experience, Kaaren Hall saw the recession take hold and the mortgage market collapse. Rather than folding up her tent, Hall took her real estate and finance knowledge in a promising new direction – self-directed IRAs. Hall has helped thousands of Americans invest their IRA into real estate, notes and other assets outside of the stock market to improve their financial future. Now, Hall is a passionate educator and facilitator for better retirement through highly diversified and individually controlled IRAs. She shares her expertise with investors and advisors through speaking engagements, online videos and a weekly newsletter.
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NETWORKING
D
The Club for by Tim Houghten
on’t be fooled by the thrill-seeking location. The Las Vegas Investment Club (LVIC) is a group of serious investors who engage in national opportunities, and certainly don’t gamble with their money.
SERIOUS INVESTORS
The LVIC meets regularly in San Diego, California, and Las Vegas, Nevada, bringing together sophisticated investors and thoroughly vetted and carefully managed investment opportunities.
es of consumers and investors over the last decade(s). The alternative presented is one designed to empower individuals with an educational program in order to enable a superior understanding of what they are investing in. The group’s performance, high-level information, and savvy management has investors flying in each month — even from as far as away as Alaska. This certainly says something about the value members feel they are getting. Monthly meetings are held at the Orleans Hotel in Las Vegas and at the Mission Valley Hyatt in San Diego. The meetings include prominent economists and financial analysts as guest speakers, followed by reviews of the current LVIC portfolio as well as analysis on specific investments under consideration for the future. Each investor has the choice to opt-in or out of any individual investment. In addition to monthly club meetings there are special events, as well as the annual two day LVIC, ‘EconoSummit.’ Recent club speakers include: Federal Reserve senior economist, Bill A. Strauss,
AN ATTRACTIVE ALTERNATIVE The LVIC was conceived as an alternative to the traditional financial services route, which has seen repeated abusRealty411Guide.com
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enterprise writer for CNN Politics, Thomas Lake, and Dr. Michael Gunter, MD/VIP. INVESTMENTS The Las Vegas Investment Club invests in a broad range of investments, each typically ranging from $250K to $3.5M in funding. So far this has included: •Two tourist attractions •A factoring company •An investment into several fitness facilities The club publicly posts its performance results on its website at http://lvinvestmentclub. com. Notable successes (so far) include an early exit to PayPal founder, Peter Thiel, for a 92% gain in 10 months, as well as a fully repaid loan to Las Vegas business ‘Adventure Combat,’ with subsequent ongoing royalties. The group has also funded several UFC and Crunch gyms, as well as a $1M in a sub-prime financial firm, which last year surpassed one million loans. If you compare the club’s investment performance to date, it would easily rank in the top 1% of funds, according to the club website. TRENDING INVESTMENTS It is currently the club’s philosophy that there is a disproportionate amount of risk to potential reward in the stock market. For this reason, members have reduced their exposure to the stock market, and have increased the share of their portfolios held in gold and silver (now up from 2-3% to 5%). This is direct investment in the physical metals. The only stock LVIC has participated in has been MOGO Finance Technologies. Since getting in at around $1, the stock (traded on the TSE as ‘MOGO’) has become the top performing stock on the exchange. As of May 2017, it was trading at close to $4 per share, or up around 300% plus. INVESTMENT APPROACH Several things stand out as being different at this club. The first is the lack of egos. There are certainly many investors, asset managers, and “gurus” out there who make a lot of noise, with far weaker track records. Club members here appear to have more of a sense of community, and are far more engaged and involved in decisions and the control of their assets than elsewhere. This applies to the point at which investments are made as well.
‘
The group’s performance, high level information, and savvy management has investors flying in each month — even from as far as away as Alaska. That certainly says something about the value
’
members feel they are getting.
The LVIC only funds projects where one of its senior members takes an active role in the “day-today” operations of the funded company. This may be as an officer, or serving on the Board of Advisors or Board of Directors. A reciprocal strategy exists, which can add a lot of value to the business as well, especially given the significant inventory of skills within the group. The LVIC’s approach definitely has some Warren Buffett-like qualities. This shows up when investing in businesses, where they can have influence. Initial criteria demands that a prospect must be producing immediate cash flow, and offer disproportionately low risk to rewards. The club prides itself on being sure they are over-collateralized every time. They look for a fiveto-one security ratio, or better. That could come in the form of liens on equipment and tangible assets as well as personal guarantees from owners who have significant collateral, and similar structures. Continued on pg. 60
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The Club for Serious Investors, pg. 58
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Things to Look for When Comparing Syndications
T
he increase in popularity of real estate investment syndications in the last few years has presented huge opportunities to investors looking to invest in multifamily and commercial properties for passive income. As syndications are a way to pool money from multiple investors to accomplish a common investment goal. In real estate, this typically involves pooling equity to purchase a property, frequently leveraged with a commercial loan, with the intention of improving or holding it >
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for appreciation and cash flow. With opportunity, however, comes the need to know what to look for when comparing opportunities. I have compiled 10 of the most important factors to look for in a syndication when evaluating them in order to make the most informed and successful investments possible. 1) QUALIFICATIONS. Check to see if the syndication requires you to be an accredited or sophisticated investor. Most syndications are structured under one of two SEC Regulation D, exemptions: a - 506(b) only requires an investor (up to 35 per deal) to be sophisticated, which is simply a borad definition meaning an investor possess sound financial education. An unlimited number of accredited investors can be also be accepted. 506 (b) only allows sponsors to offer investments to their existing client base, therefore, if you are interested in deals from any syndicator, make sure that you establish a relationship, which generally begins with signing up on their website. b. Exemption 506(c) investments require all investors to be accredited (minimum net work $1M exclusive of home or income requirements of $200K single, $300K married) and also unlike 506(b) requires verification, generally done via a CPA or 3rd party service. 2) TRACK RECORD. Syndications are passive (investors cannot manage and have no liability), so it is extremely important that the sponsors have a proven track record and knowledge of the industries and regions they are choosing to invest in. Good syndication sponsors often partner with experts when bringing new asset classes and MSAs to their investor pools. Due diligence is key, and sponsors should be able to clearly articulate
why they like a deal and what sort of risk mitigation exists. 3) PREFERRED RETURNS. Many stabilized properties are generating revenue via rents collected from tenants, and the sponsors of these syndications will often structure a preferred return to investors. This return represents an annual return on the principal amount invested by the investor (i.e. 8% returns on $100,000 investment = $8000/ year). This return accrues at a predetermined rate, and must be paid before any profit-sharing takes place upon the sale of the property. Some deals will have a set preferred return pegged to an investorâ&#x20AC;&#x2122;s initial investment, while others will establish this return as a percentage of actual net cash flow received. 4) DIVIDENDS. Often confused with preferred returns, dividends differ in that they are the actual payments made during the hold period of a deal. These are often paid out monthly or quarterly. Certain value-add deals that require increasing occupancy or rehab work may delay paying dividends until the cash flow of a property is sufficient to cover these payments. Dividends are ultimately paid at the discretion of the sponsor, and can be interrupted due to unexpected expenses or vacancies that arise during the course of the holding period. 5) TAXES. Sponsors should actively work to reduce the amount of taxable income received from real estate deals. For example some sponsors will perform cost segmentation studies and bring a 3rd party to accelerate depreciation, further mitigating taxable obligation on dividends paid out. Dividends are generally tax reported on a form K-1, which should include the depreciation sheltering. 6) REPORTING PERIODS. Sponsors should provide progress reports on the status and management of the property during the course of the investment. Some provide extremely detailed tenant by tenant accounting, and others simply provide a cash flow or overview of the property. Ask a sponsor for previous reports to see what kind typically provide. Generally they are provided at the same interval as the dividends being paid (monthly or quarterly). 7) PROFIT SPLIT. A common feature in syndication deals is for the net profits upon sale to be split with a portion going to the sponsors and the balance to the investors. These profits are what are left over after closing costs and fees are paid, preContinued on pg. 64
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ferred returns are paid, and original investor principal is returned. The percent of profits that get split among investors can vary significantly on a deal, based on risk, sponsor involvement, and overall return structure. 8) SPONSOR FEES. Syndication sponsors derive compensation from one or more of the following categories. A. UPFRONT FEES. These fees are built into the amount of money raised and help compensate sponsors for time and money invested to find and vet the deal, secure the loan and structure the syndication for the investors. There is no formal terminology, but this money is commonly called sponsor fees, acquisition fees, or due diligence fees. These are separate from 3rd party fees from entities such as lenders, attorneys, title companies, and inspectors. B. ASSET MANAGEMENT FEES. During the hold, some sponsors will take compensation for management time and costs incurred to keep the property running successfully. These are typically a percentage of rents collected or net cash flow that the syndication receives and are paid at the same time as dividends to investors. C. PROFIT SPLITS. Typically, most of the value of a property is derived at the time of the sale. A successful syndicator is incentivized by a percentage of net profits to help close a deal out and maximize profits. These will vary by deal, but should be high enough that the sponsor is motivated to invest the time and effort throughout the entire hold period to maximize returns. 9) EXIT PLAN. Syndications are illiquid and are passive investments, meaning sponsors decide how to execute the plan and when to sell the property. A good sponsor will have an exit plan that has a projected hold period or range of years, contingent on market conditions. Most value-add deals will be shorter in length due to most of the value being created in early years. Many Realty411Guide.com
stabilized property deals will be longer in order to take advantage of increasing rents, equity build up through debt payoff, and stabilized cash flow. 10) VOTING RIGHTS. Most syndications are structured through an LLC. The LLC buys and sells the property with the sponsors being Class B managers. The Class A investors will be formally included in the company/operating agreement of the LLC that outlines their percentage of ownership. Some LLCs will give members voting rights as well, which can be used for large decisions such as changing management, restructuring returns, or dealing with death or transfer of existing members. It is important to understand the type of rights you have as an investor and what types of transferability, if any, your shares have. This is just a sampling of the many components of a real estate syndication that savvy investors should be knowledgeable when evaluating opportunities. Knowing how syndications are set up and function will allow you to make the best investment choices. Lastly, a good synidactor will provide a Private Placement Memorandum (PPM) with extensive disclosures and data to all investors, event rhough the sec only rquires it for non-accredited investors. Ask for it. v Best regards to you and your investing,
Tom
Wilson Investment Properties is a turnkey provider of both single family rental homes and multifamily and commercial real estate syndications. Weâ&#x20AC;&#x2122;ve been providing high-quality investments for over 16 years to investors around the world. To learn more, visit us online at: www.tomwilsonproperties.com or contact us at: info@tomwilsonproperties.com or 408-867-1867.
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Education
Choose the RIGHT
Coach & Mentor By Dennis Henson, President of AREA Arlington Real Estate Association of Investors
H
ave you noticed that sports teams and individuals that have the best winning records are the ones with the best coaches? If a professional team does not have a winning record who do they replace first? Of course, it’s the coach! Real estate investing is a business where a single mistake can cost you thousands of dollars and for that reason alone, the most important member of your investment team is your coach and mentor. Another value your coach will bring to the table that is essential to your success is the element of accountability. In order to become really successful in real estate investing, it is imperative that you form successful habits quickly. Legendary football coach, Vince Lombardi said, “Winning is a habit. Unfortunately, so is losing.” A good coach will help you put together a business plan and give you a list of things to do to help ensure your success. But you can only become successful if you stay on the right track and make doing the right things a habit. A good coach will hold your feet to the fire so to speak. Nothing can keep you moving like a good coach and mentor! He or she will help you through the rough times, answer questions and give encouragement, support, motivation, and help you keep your focused. Here are some things that you should consider when choosing a coach and mentor. He or
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she should be… • The real thing — someone who really invests in real estate and not someone trained to help you learn to invest • A successful investor with many verifiable properties • Local — Local is better because you can get face to face time, training & answers AND THEY SHOULD • Have time to spend with just you • Have been a real estate investor for years • Have the respect of their peers in the real estate industry • Be sincerely interested in your success • Be someone you can trust and with whom you have a good rapport Also, the price for their coaching/mentoring program should be reasonable, and they should have a good guarantee for their program. While searching for the right coach you need to be aware that you may encounter a number of unscrupulous programs. Some of these will offer you the moon and stars, and they will gladly take your money. After a short time, you will quickly find that all you received was the moon and stars, but not much here on
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earth. Some things you should avoid when searching for a coach and mentor include... programs that say: • You can quit your job and increase your monthly income! • You don’t need any of your own money to get started! • Purchase many properties even if you have bad credit! • Own a million dollars in real estate in less than a year!
ful investor’s REAL ESTATE websites. Visit Real Estate investment clubs and ask for references. If you cannot find local talent, carefully check out programs offered in nearby communities and surrounding states. Choosing the right coach and mentor can make the difference in the success or failure of your real estate investing business. Take the time, and make the effort to find the right one that will put you on the fast track to reaching your goals. I hope this article will help you in your quest to build wealth through real estate investing. For more articles on real estate investor training, visit my
• Start earning $22,000 per month immediately! Don’t be fooled by promises that sound too good to be true. Before you start writing a check for any of your hard earned money — get the phone numbers and email addresses of five or six of the people who are experiencing these great successes. Then, make a few calls to those people to hear the real story. Don’t get caught up in the mystique of the expert from afar. Remember, local is better. So how do you find a good, honest coach and mentor? Look for the investors in your area that are having success. Use search engines to find successRealty411Guide.com
website at: www.dennisjhenson.com. Also on that site, you may sign up for free reports, articles, and e-books and find free forms, documents, MP3 downloads and much more. I invite you to visit www.evaluatemydeals.com for a great real estate investing tool. v
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TRANSACTION
O
Article by Rob Barney, Owner of DHLC Mortgage
ne of the most common misconceptions out there is that seller ALWAYS gets to choose the title company since he/she is paying for the title policy. In some cases, REOs and HUDs, this is true. However, as the buyer, when you submit a contract/offer, YOU have the the right and opportunity to tell them what title company YOU want to close the transaction with. Why is this a big deal; aren’t most title companies the same? NO! They are not! As a lender I have to deal with the title company listed on the contract, and I can tell you all title companies are not created equal. I have four borrowers ready to
close who have been ready to do so for several days. We are STILL waiting on title commitments that were requested weeks ago. Unfortunately it is out of our hands how fast the title companies turn the title commitments around….they are in control at this point. So what do you do, you ask? The best thing to do is to ask your lender what title company THEY recommend. As a lender, I have several “PREFERRED” title companies that I recommend to buyers who do not know where they want to close. Your lender knows what title companies work best and which ones give them, and by extension, you, the best and fastest service. The title companies take care of their best clients first. It is Realty411Guide.com
Should Buyers Choose the Title Company When Purchasing a Property? a fact of life. That is why many REOs, and also HUD, mandate the use of their preferred title company. If you want to ensure a fast closing with little if any surprises then ask your lender, before you write up a contract, who they prefer to close with. It will save you time, money and stress. v
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Seller Financing: How To Offer It Safely & Efficiently
Interview by Tim Houghten
S
eller financing is trending. The big question is: How can investors navigate this strategy safely, efficiently, and optimize profits in the process? Owner financing of real estate appears to be on the rise again, and may continue to soar in popularity for several years. Yet, real estate investors face fresh challenges and uncertainties in the legalities of this type of private financing, all while being under more pressure to be efficient and competitive, and to stay isolated from risk.
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THE NEED FOR SELLER FINANCING IN 2017 & BEYOND The prevalence of seller financing dipped after the market came roaring back and cash buyers saturated the market. Now many investors have capital tied up in equity, and all cash buyers are declining as a share of the market, according to the latest data from NAR and RealtyTrac. At the same time, hopes of President Trump creating a new era of easy borrowing for regular home buyers havenâ&#x20AC;&#x2122;t materialized. At least not yet. Meanwhile, home prices are high, interest rates are trending up, trust in banks and institutional mortgage lenders remains at dire lows, and the rental market is very competitive. That means investors hoping to resell their properties or turn them into cash cows need to have other strategies and tools at their disposal. Buyers who want to take advantage of the current market, or to kick high rents to the curb, must look for seller-financed options. PAGE 72 â&#x20AC;˘ 2017
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Dodd Frank. Yet, it is true that that are new rules and compliance regulations. Specifically, sellers are required to use third party licensed RMLO (Residential Mortgage Loan Originator) services to facilitate the transaction. Even where this isnâ&#x20AC;&#x2122;t a legal mandate, investors need to know their responsibilities for qualifying borrowers, maintaining documents, and the terms which can be offered or which may trigger issues. The services of an RMLO company can provide clarity on this, as well as organization, help with the labor of dealing with prospects and managing the paperwork, as well as empowering investors with the understanding of what makes truly valuable notes in the secondary market space.
BEST STRATEGY FOR REAL ESTATE INVESTORS Offering owner financing packs a lot of benefit for investors. First of all, it can help speed up sales. Real estate ads promoting seller financing can get a lot of attention. More investors, renters, and regular buyers are seeking them out. This not only helps to move property fast, but can also help boost resale prices. These buyers are typically more payment sensitive than price sensitive. This can yield a superior ROI. The creation of a new asset in the seller-financed mortgage note also provides the ability to enjoy steady streams of high-yield passive income, along with the flexibility to cash in and reclaim lump sum payments by reselling the note or portions of the payments. Of course, one of the best and most important benefits of this real estate strategy is helping others. Offering seller financing is a great service that helps individuals and families to enjoy the advantages of homeownership, while supporting local neighborhoods.
1. STATEMENT OF COMPLIANCE 2. QUALIFIED MORTGAGE REPORT 3. CREDIT REPORT 4. PROOF OF INCOME 5. REQUIRED LOAN DISCLOSURES 6. SUPPORTING UNDERWRITING DOCUMENTS 7. CLOSING DISCLOSURE At Texas Pride Lending, these services are reasonably-priced and can be paid by either the seller or buyer at the time of closing. Most important; this RMLO can turn around files in as little as 24-48 hours.
RMLO SERVICES BY TEXAS PRIDE LENDING Texas Pride Lending is a state licensed RMLO providing many of the previously mentioned services to local, national, and international property investors. These services help to keep investors compliant, minimize their risk, stay organized, and to maximize their profit potential, without breaking regulations. Texas Pride Lending does this by providing pre-qualification and verification of borrowers and their key information, preparing
THE NEW RULES OF SELLER FINANCING While seller financing is attractive to both buyers and sellers, there are some challenges for investors. The biggest is just the murkiness and uncertainty of the legalities of offering seller financing today. The institution of the DoddFrank Act wreaked a lot of havoc on this sector. It sowed a lot of confusion and misinformation. Seller financing is still legal under Realty411Guide.com
The RMLO underwriting package provided by Texas Pride Lending includes:
the required loan disclosures and documents, all within 48 hours! They also assist in connecting investors to friendly, competent service providers for title and loan servicing. v
Executive director of Texas Pride Lending, Sarah Montes has over 10 years experience in residential mortgage lending and owner financing. As one of the true specialists in this area, with a network of equally experienced professionals to serve investors with their needs for servicing and closing loans, investors will be hard pressed to find a resource as valuable for making seller financing work. Find out more about this RMLO or get in touch to get your next deal on the fast track to closing, visit: www.TexasPrideLending.com or call 800.515.0445 or visit: 14114 North Dallas, Parkway, Suite #160, Dallas, TX 75254
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PROSPECTING
Social Media Marketing Statistics and What They Mean For Real Estate Businesses
D
By Leon McKenzie, CEO, US Probate Leads
id you know that there are a total of 2.789 billion social media users in the world? Did you also know that 81% of all Americans have a social media profile currently? Impressive, isn’t it? It is precisely because of the popularity of social media that you should incorporate this platform within your marketing campaign. If you don’t, you are going to lose a lot of potential customers and home sellers who would otherwise have helped boost your business.
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But before you make a foray into social media, here are some social media statistics and their implications that you would do well to pay attention to: 1) 21% of For Sale by Owner Homes (FSBO) Will Be Marketed Via Friends, Relatives, and Neighbors According to the National Association of REALTORS™, FSBOs accounted for at least 8% of all home sales by 2015. What is significant is the fact that many of these homeowners looking to sell will use their friends, relatives, and neighbors as mouthpieces to market their properties. > WHAT THESE NUMBERS IMPLY Many of the people who will help a homeowner sell a home not only have offline relationships, but online ones as well. That means that they will talk about the homes that are available for sale with people in their so-
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cial networks. Considering the fact that 51% of home buyers find their homes via the internet, you cannot afford to underestimate the value of social media in your business. Where do you think they will go to ask for recommendations from when they decide to purchase a home? And who do you think will be in a good position to let them know about an available property? To put it simply, if you do not have social media accounts, you face losing up to 51% of your potential client base. And that means you will struggle to sell any homes you invested in when the time is right. Without social media platforms, you also stand to lose real estate leads that would otherwise have helped you get that property that you have always wanted. 2) 88% of First Time Buyers Will Purchase A Home through an Agent, and Yet Only 9% of Realtors Use Social Media to Market Their Listings Most first time home buyers are not willing to search for a home on their own. And yet despite the high demand for agency services, many realtors do not even bother to market their listings via social media. > WHAT THESE NUMBERS IMPLY You would do well to offer your services as a real estate agent to first time home buyers. You can do this by placing ads on social media platforms like Facebook. However, unlike most realtors, do not fear to market your listings via social media. You can choose to promote your listings once a week. During this time, you should ensure that you list all the homes that you have available for purchase and write a short description of each of them. If you do not promote your business in this manner every day, it is highly doubtful that your audience will get tired of it. Just politely ask people to share and then sit back and watch the power of referral marketing in play. If you have invested time providing value to your audience in other ways, the results of marketing your listings on social media will be positive within a short time. 3) 2% of Online Users are Facebook Users It is not surprising to see such a high number of users online make use of Facebook in their daily lives. This is by far the biggest social media platform available today. Statistics show that Facebook has at least 1.968 billion users worldwide! Realty411Guide.com
> WHAT THESE NUMBERS IMPLY It does not matter whether you are in the business of buying homes or selling them. If you want to reach the widest target market available anywhere online, you cannot afford to ignore Facebook. You could promote your business by marketing your listings on a regular basis. But before you do that, ensure that you provide value to your audience. This can be done through: • Short but informative social media posts • Regular Q & A sessions that allow you to educate your audience on various real estate issues like renovations, real estate business operations, staging, what to look for when buying a home etc. • Live and on-demand webinars that allow people to learn more about the real estate industry. The beauty of it all is that Facebook will enable you to do all these things on one platform. 4) Visual Content Is 4000% More Likely To Be Shared On Social Media Compared To Any Other Type of Content No matter which way you look at it, social media posts are more likely to be shared far and wide if you incorporate visual content within them. > WHAT THESE NUMBERS IMPLY If you have a social media account, and your marketing efforts are not bearing fruit, it is time to analyze whether you have taken the time to include images. Consider using high-quality detailed images of any listings you choose to market on social media. Incorporate infographics to not only increase the chances of your content being shared, but to also improve your online visibility and reputation. Infographics can be based on reputable statistics about what is going on in your little corner of the real estate industry. For example, if you are a probate real estate investor, consider finding links that prove the benefits of probate properties for home buyers. Considering that over half of home buyers will find homes to buy online, an infographic showing the benefits of buying certain types of homes may be the ultimate determinant on what home they end up purchasing. And all those people on social media may help drive a huge amount of traffic to your site. 5) 51% of Home Shoppers Read General Home Information on Mobile Devices Social media is great for interaction with potential and
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>
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existing clients. It is also wonderful for referral marketing. And eventually, many of the people who see the links you share on your social media page will show up on your business website – assuming that you have one. > WHAT THESE NUMBERS IMPLY When you have half of home shoppers reading general home information via their mobile devices, it makes the nature of your website even more important. Perhaps the first question should be: do you have a website? If not, what are you waiting for? The second question is: is your site optimized for mobile users? If the answer is no, then you need to get moving to rectify the matter. According to We Are Social 2017 Global Overview Report on social media, there are 2.547 billion mobile social media users. It is for this reason that you need to move quickly to optimize your website for mobile device users. If you don’t rectify the issue of mobile site optimization, expect Google penalties to apply. This means that you will experience lower online visibility and ultimately, a lower amount of traffic. And if you want to boost your real estate business, then not having a good website is counterproductive even if you spend time promoting your brand on social media. You are going to lose a lot of potential customers who would have wanted to learn more about your properties. Is that what you want? 6) 84% of CEOs and VPs Say They Use Social Media When Making Purchasing Decisions The number of company decision makers that make use of social media in order to come to a decision regarding what to purchase or how to proceed is quite significant.
US Probate Leads
Leon McKenzie Chief Executive Officer
>WHAT THESE NUMBERS IMPLY You cannot ignore the role of social media marketing when it comes to influencing decision makers. Suppose you have commercial properties that you would like to sell? In order to appeal to the people at the top, you need to set yourself as an authority that VPs and CEOs can trust. And yet despite how effective social platforms can be for this purpose, only 27% of top companies say that their C-Level Executives are actively involved in social media. Realty411Guide.com
If you want to stay ahead of the game, do what your competitors are not doing: use social media to elevate your real estate brand. Post long-form content on social media sites like LinkedIn and share your expertise on platforms like Facebook. Make sure that images of your properties appear on Instagram and Pinterest. The more people you attract with your content, the higher the likelihood that you will attract the attention of decision makers as well. So when it is time for you to sell that commercial property to bring in the money, you are going to find a large audience that is willing to recommend your property to as many people as possible. In addition, you may just find the right buyer without much effort. It takes work to market your real estate business on social media. But you know what? This type of internet marketing platform is free at the basic level, offers you the chance to appeal to a larger audience, and enables you to cultivate a good relationship with your potential and existing customers. All these things make it much cheaper and much easier for you to find and good properties that have a higher chance of getting sold easily when the time is right. It is therefore in your best interest to use social media to make a difference in your real estate business. What are you waiting for? Get started today!
Leon co-founded US Probate Leads more than 12 years ago and has witnessed its growth during that period from a one city lead provider in the probate space to the only national provider of probate leads for virtually every county in the country. Leon likes to point out that US Probate Leads is the only company providing Probate-related Real Estate-related leads to Investors and Realtors based on data collected directly from individual probate courts in virtually every state. This has been achieved by building a National Network of Researchers that visit each county one time each month. Leon’s team processes this incoming data and makes it available to individual subscribers for their use in reaching out to highly motivated property sellers. Visit online at: www.usprobateleads.com
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SALE
F
WHO IS JIMMY V REED?
olks are always telling me: “I would love to make money in real estate, but I’m just to broke.” And I respond every time: “So was I.”
Jimmy V. Reed of Fort Worth, Texas has been investing in real estate since 1987 and by 1991 started doing one day trainings in Wholesaling. He then began teaching and mentoring others through out the country. Jimmy also created several training’s used in the past by Whitney, Rich Dad, and others. He currently is the founder of www.1REclub.com & was co-founder of the Fort Worth club REIO-FW.com for 14 years. Now he trains students through his company Real Estate Equity Development. For more info, please visit: www.JimmyReed.net
Back in the late ‘80s, I started reading books on how to make money in real estate. Every time they kept telling me you find a good deal, then you go get a loan and buy it, fix it, sell it, or hold it. That’s when I would say to myself: “Well it sounded too good to be true.” Later I learned it is too good to be true. I learned how to Wholesale Properties. I learned what I would say to be the greatest technique in real estate. How to buy a house without actually buying the house. Now let me tell you how that works. I compare it to when I would go garage selling with my wife on the weekends. We would drive around looking for SIGNS! You know, garage sale signs. We would find a sale and then look for a deal. And we always seemed to find at least one deal, once we started making offers and negotiating. By the way, I have
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taught thousands of students whose number one fear is to make an offer. But the second you put them in a garage sale, they start making offers so low it was like kicking the seller in the knee cap! Anyway we would finally agree upon a price. And many times realize we didn’t have enough money on us to purchase the item. So we would ask the seller to hold it until we came back with the money. And... wahlah... Garage Sale Real Estate! I know you’re thinking: “WHAT?” Well let me tell you the secret to this. At the garage sale we would run to the ATM, get the money, come back and pay. Now take this principal a little deeper as we teach in our wholesale classes. Tell the seller to hold it, how? A simple Purchase Contract. That’s when you tie up the property until you have the money. I know, I know, you’re broke! That’s ok because while it is under contract, we contact other investors who are looking for deals! That’s right, we are deal finders finding deals for our customers. These investors have CASH! Now we just assign the contract to them for a fee. And now you just got Paid! Sometimes we even use a double close to close on the property because the profit margin is so large. That one is a lot of fun. Well hopefully by now you at least can see a glimpse as to how so many investors can make money in real estate without having money. Did you know when you go to a car lot, or even Wal-Mart, the items you purchase from them have most likely not even been paid for by them yet. That’s right Wholesaling has been going on in most business forever. Now the question is are you up for some Garage Selling? Well it’s all up to you, but if you need a little help look us up, we’ve been teaching Wholesale to investors since 1991. v PAGE 77 • 2017
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Fire Your Real Estate Banker! by Mark Willis, CFP Lake Growth Financial Services
A
know who are in debt up to their eyeballs and working 60+ hours a week, or stressing over non-paying tenants, or feverishly rushing from property to property, hoping they can sell a property before the balloon payment comes due. For many real estate investors, the road to becoming a wealthy landlord turned south toward the highway of serfdom, with their banker holding the upper hand. Is there any other way? How can someone who has skill and passion for real estate or their business keep control and a sense of sanity amidst a world gone insane? Is there a way to break free of financial slavery to the banks? Yes, it’s simple. Fire your banker! Where is it written that you have to service your debts and pay off a banker before you can enjoy the fruits of your investment? Who says you have to pay interest on your properties, effectively turning all your real estate assets into liabilities? Where did we get the idea that banks were the only ones who could provide the function of banking in our society? You can be your own source of financing - you can rid your financial portfolio of your banker and provide the function of banking yourself. How? The answer may shock you. I’m talking about a modernized form of dividend-paying whole life insurance. It works like a source of capital, a bank, to provide a guaranteed pool of money liquid and available for whatever you need. The funds you accumulate in your life insurance grow safely and predictably every year, guaranteed - no matter what’s happening in the stock market. You can use the equity in your policy like a line of credit to yourself - and you have complete control over how, when and if you pay your money back to your policy. You are in complete control of the entire process. When most people see the words: whole life insurance, their mind turns off. Mine sure did! I was taught to avoid whole life insurance even in my earliest days as a financial planner.
“A banker is a fellow who will lend you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”
in’t that the truth? As we look ten years back on the Great Recession, we can see how much has changed, and how much more has stayed pretty much the same. Home values are up again to 2007 levels. Unemployment is down to pre-crisis levels. The stock market is hitting record highs as I write these words. And yet, not much has changed since 2008 or since Mr. Twain wrote those humorous words - bankers control the money supply, and just when you need the money most, they are there holding all the umbrellas. I have no problem with bankers, personally. Some of my best friends are bankers! In fact, as investors we’ve been taught to use “other people’s money” (also known as OPM) as leverage to help us gain traction in real estate or to get ahead in our business. Other solutions include getting a business line of credit to buy new equipment, or securing a mortgage on an investment property to renovate and flip a property. These are the standby solutions used by many Americans. But ask yourself - who are the “other people” when OPM is your strategy for leverage? (Remember, leverage can work both ways - for and against you!) And what do other people want so badly that they’re willing to part with their money and hand it to you? Were you just handed an umbrella on a sunny day? When banks control the environment where your money lives, they win every time. When you control the financial environment in which your money lives, you win. 34% of all American income goes to servicing debt. If time is money, as the old saying goes, that means a full one-third of the day is spent working as slaves to a bank! Think of how many folks you
-- Mark Twain
Since then, I’ve come to see how useful and valuable a properly structured, dividend-paying whole life policy can be, when issued from a mutual life insurance company that offers non-direct recognition loans. This vehicle helps my clients overcome the inertia of opportunity cost, accumulate a powerful war-chest of capital, and deploy liquid capital for their real estate ventures. It matters where your money lives. As a CERTIFIED FINANCIAL PLANNER™ I have investigated nearly every financial strategy available to investors. Well over 400+ products are available and tens of thousands of uses of those products have been hocked and sold to folks looking for that golden goose that will just help them sleep better at night. Financial pundits and Wall Street advisors will tell you that whole life insurance is the devil, and while I’m sure I’ll be ostracized by mainstream financial advisors for saying this, I think every person should at least KNOW that becoming your own source of financing through a properly structured whole life policy is an option worth investigating for yourself. Besides, if mainstream financial advice got us into the mess we are in, maybe it’s time for a new way of thinking! We’ve had two major market crashes since the year 2000. Do you think another one will happen in your lifetime? Do you want your reaction to the next market crash to be the same as the last one? If you’d like to not only protect yourself from the next recession, but actually anticipate and take advantage of it, prepare for it now by doing what the banks do, not doing what they tell you to do. Banks purchase a huge amount of life insurance to run their businesses. Prepare by becoming the banker by using a form of capital that banks themselves take advantage of (Google “Bank Owned Life Insurance” to see what I mean). Imagine we’re in the middle of another financial calamity. Everyone is seeing their 401(k) values drop and real estate prices are plummeting. Your friends are nervous about losing their jobs. But instead of fear and instead of begging a banker to lend you his umbrella, you’ve established yourself as your own source of capital, using the cash value in your properly designed life insurance policy. You’re in control. When you see the real estate values crashing, instead of fear, you see opportunity. You borrow from your own policy’s cash, and within 3-5 days your
policy’s cash value is direct deposited into your bank account and you’ve got cash at closing. No tax obligations, no government red tape. You are in control. With this kind of leverage, the kind of leverage you own, you can borrow from your policy and still have it earning interest as if you did not take the loan. You read that right. That’s a rare feature often misunderstood and overlooked by most insurance agents. And when it’s properly implemented into a policy, you overcome the biggest hurdle in the financial universe - opportunity cost, and giving you uninterrupted compound growth - what has been referred to as the 8th Wonder of the World. You can pay your policy back on your own terms, when and if you choose. Do you think that will make you more or less competitive as an investor? Could this help you with more than just investing? How about buying the stuff of life - cars, medical expenses, paying off debt... which financial situation would it NOT make sense to be the banker? The only thing better than being debt free is to be the banker. Then you’re the one lending the umbrellas! There’s more to this than just picking up the phone to call your local insurance guy. Most insurance agents (and certainly most Wall Street brokers) have never heard of this strategy, and you don’t want to put your money with an “I’ll just Google it” advisor. If you’d like to talk to someone who has been specially trained and authorized to specifically design a Bank on Yourself policy as described above, please contact us at: hello@lakegrowth.com o r call us at 1-800-962-9141.
2017
D E V I V R U S I E T A T S E L A E R
Hosted By
A Powerhouse Lineup of Industry Experts Converge for The Biggest Night in Real Estate
On September 22, 2017, join The Norris Group and our 10th annual event at the Nixon Library in Yorba Linda, California for another award-winning evening. Get the inside scoop on top real estate trends from the leaders shaping our industry. Dress up, enjoy a spectacular meal in the Presidential East Room, network with successful real estate professionals from all over California, and help raise funds for kids with life-threatening medical conditions.
THE PANEL
Bruce Norris President The Norris Group
THE CHARITY
John Burns CEO
John Burns Real Estate Consulting
David Kittle President
The Mortgage Collaborative
Ticket/sponsor funds directly benefit Make-AWish and St. Jude Children’s Research Hospital. In eight years, we’ve raised over $700,000 for charity.
Doug Duncan Chief Economist Fannie Mae
Sean O’Toole President PropertyRadar.com
Nick Bailey Vice President Zillow
THE SPONSORS MVT PRODUCTIONS
Coldwell Banker Town and Country Coachella Valley Real Estate Investors Assoc. In A Day Development Inland Valley Association of Realtors Jennifer Buys Houses Keystone CPA Las Brisas Escrow
Apartment Owners Association of California, Inc.
Los Angeles South REIA Michael Ryan & Associates North San Diego Real Estate Investors Northern California Real Estate Investors Association Pacific Premier Bank Pasadena FIBI Pilot Limousine
Real Wealth Network Rick and LeAnne Rossiter San Jose Real Estate Investors Association South OC Real Estate Investors Association uDirect IRA Services Westin South Coast Plaza Wilson Investment Properties
www.ISurvivedRealEstate.com or 951-780-5856
FAST… C
BY TIM HOUGHTEN
alifornia-based Aztec Financial has been funding property investors since 1987. In 2017, the firm has unleashed a strong lineup of new loan programs and progressive terms that leave investors no excuses for not getting their deals done.
HOT LOAN PRODUCTS & TRUE HARD MONEY Aztec Financial’s current loan product lineup includes: • True hard money loans fast!.... without the red tape • Up to 100% LTV fix-and-flip loans • 2nd mortgages (Case by Case) • True stated income loans • New construction loans • Spec home loans • Pull cash out to buy more property or for any type of business purpose
up to 100% Funding for Your California House Deals
Aztec is not your average lender. Far too many lenders out there are still trying to pass themselves off as offering hard money or investor-friendly loans, yet they either don’t understand the needs and models investors are using, or try to put them through processes more fitting of antiquated full doc bank loans. Aztec Financial not only offers a lineup of attractive programs, but has designed them for the benefit of the investor. Founder Joel Hoffman explains that, “If the equity is there, then in many cases, investors can do no money-down deals, and get 100% financing.” That can include 100% of the purchase price, and rehab funds. The firm’s true hard money and stated income loans require NO Tax Returns and NO Bank Statements, and values for calculating LTVs are based on the ARV. If you prefer to use your own rehab funds, then Aztec can do the loan based on between 80% to 90% of the purchase price.
FAST FUNDING
Aztec Financial fuels investors with fresh funding programs and user-friendly terms. Realty411Guide.com
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Aztec Financial doesn’t just offer great loan programs, but hyper-efficiency too. Joel tells us that one of the reasons he believes the firm has survived
>
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FAST... Up to 100% Funding, pg. 81
and thrived since 1987, and has helped individual clients collectively fund thousands of loans, is simply that the process serves them. For a start, investors can be confident in trying this lender out because there are no upfront appraisal or broker fees. Borrowers can also expect approvals in just 24 hours, with closings possible in as little as three days. There is no waiting and hoping, or gambling precious working capital. You get approvals fast, and close fast.
THE BENEFITS OF A DIRECT LENDER Aztec Financial is a direct California lender. That means none of the stress that comes with brokers. There is no hoping your loan officer knows their underwriting criteria or has the right relationships. Joel says this also offers great flexibility and the ability to make
deals work, with common sense underwriting. Approvals and funding are fast, and borrowers can work with the firm to structure terms that work for their strategy and model, while securing the optimal rates. In addition to funding fix and flip loans, Aztec also funds commercial and business purpose loans on 1 to 4-unit family properties, multiple residential apartment buildings and commercial real estate. Whether you need money to purchase an investment property or simply need to pull cash out on one of your properties, Aztec has your back…. And being a local lender, investors may find that the firm’s comfortability and knowledge of the local market could result in better rates, higher LTVs, more flexibility, and more ease in wielding financial leverage. Investors can find out more about loans online at www.AztecFinancial.net, though Joel Hoffman encourages those interested in funding to pick up the phone, call 818.848.8960, run their scenario, and find out just how much better Aztec Financial can be. v
Superior Service. Higher Returns.
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We handle everything + protect your home We are local, full service, and trustworthy Realty411Guide.com
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Do you need money for earnest money deposits or to get a rehab started?
GET A LINE OF CREDIT OF UP TO $150,000! Now is the time to get your line of credit I can not stress enough the
Readily Available Lines of importance of readily available credit when youInvestors are Creditlines ForofReal Estate investing in real estate!
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Stonebridge Capital Group (www.sbcapgroup.com) provides access to:Group (www.sbcapgroup.com) Stonebridge Capital access •provides $10K - $150K in to: business or personal lines of credit $10k - Pre-Approval $150k in business or personal lines of credit ••Instant Instant Pre-Approval ••0% Interest for Up to 24 Months ••Get Lines Credit 7 to 14 Days! 0%Your interest forofup to 24inmonths • Get Your Lines of Credit in 7 to 14 Days!
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100% FINANCING for REHABS INC Financial is now funding up to 100% of rehab costs for house flippers.
In addition, ZINC now has a preferred joint venture program where ZINC will advance 100% of acquisition & rehab costs for well experienced investors. ZINC is a direct lender, not a broker, which allows for decisioning within hours. “There is no middleman,” states Todd Pigott, Principal of ZINC. Todd Pigott, Principal of Zinc Financial He also indicates that all decisions and wires are controlled in-house. Fast growing ZINC Financial is expanding and now offers an even more attractive line up of lending products for serious real estate investors. This includes high LTV loans for rehabbers, stated income programs, and JV opportunities. They even expanded rental financing for up to $10 million in seven nearby states. Pigott states: “This is a great opportunity for investors to seize private money at historical low rates without the hassle of bank requirements.”
LENDING ON THE RISE IN 2017
ZINC Financial, the Fresno, California-based lender, has continued to see 40% to 50% growth in its loan volume each year, and expects a similar rise in funding this year. The firm says liquidity continues to be great, and is banking on the continued bright and stabilized outlook for the market by expanding its office space in California and hiring additional employees.
THE FIRM NOW LENDS IN 10 STATES: 1. California 2. Washington 3. Arizona 4. Texas 5. Colorado 6. Michigan 7. Tennessee 8. Indiana 9. Ohio 10. New Mexico
PROGRESSIVE LOAN PROGRAMS
ZINC now offers one of the most progressive lineups of loan options for real estate investors in the states the company does business in. Whether your investment strategy is to buy and hold or fix and flip, ZINC has a loan program for you.
100% REHAB FUNDING
Rehabber loan options run up to 90% of the acquisition price, plus 100% financing of the rehab. Zinc provides four rehab programs fitting a variety of investor skill sets, ranging from those who are new to the industry to pro investors, as well as those rehabbing to reposition properties as rentals. ZINC even has a program for those seeking to get cash out after buying auction properties.
STATED INCOME LOANS
ZINC Financial also provides aggressive stated income loans for real estate investors. No tax returns are required, and you may need as little as one recent bank statement to qualify. Low credit scores may be accepted on a case-by-case basis. Note that these are all business purpose loans designed for non-owner occupied property investments.
FIX & FLIP LOANS
• • • • • • •
ZINC’s Fix and Flip short-term loans are used for: General fix and flip properties Foreclosures Trustee sales Outdated properties Single and multifamily properties Auction properties Homes with stop work notices or permit issues
• • • • •
Vandalized properties Abandoned homes Probate properties Flood damaged homes Fire damaged homes
BUY & HOLD FINANCING ZINC provides financing, up to $10 million per loan, for acquiring or accessing equity in single and multifamily properties for repositioning and holding as income-producing rental properties. These private, direct lender funds can offer essential liquidity on properties that other lenders won’t touch and can offer increased speed and efficiency. JOINT VENTURES The last time we featured ZINC Financial in the magazine, Todd Pigott revealed that the firm had just closed on four joint venture (“JV”) deals. The success of the JV program has encouraged the company to pursue more volume of similar deals. The JV financing gives investors a powerful financial partner and an edge in the marketplace with far lower risk. This expansion capital is for those seasoned investors who have already completed at least five deals. The program can result in 100% financing for acquisition and rehab, with no cash out of pocket, and no payments. Loan amounts run from just $50,000 to over $2,000,000. Rates remain competitive for investors. FAST FUNDING One of the top reasons to use this lender is speed. ZINC provides 24 hour pre-approvals, same day loan commitments and real estate closings within just 7-10 days. This effectively empowers investors to operate as swiftly as cash buyers and to maintain an advantage over other competitors in the field. Promises are easy to make in advertising, but ZINC’s business is made up of approximately 55% return customers, which says a lot about their ability to deliver. Pigott says that they also reward borrowers with further discounted fees and lower loan costs once they have done five deals together. GET APPROVED Those interested in exploring this funding source can find out more online at www.zincfinancial.net, and may get pre-approved or submit proposed deals online. Or, Todd Pigott recommends you just pick up the phone and call, and run your scenario by them for fast service at (559) 326-2509.
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SERIOUS ABOUT INVESTING? TRAIN WITH TODD
I
f you are serious about investing in real estate, sooner or later you’ll connect with Todd Dotson. Todd Dotson is known for training the trainers. If you’ve been in real estate, or you’ve been searching for the right system or mentor, chances are you’ve already come across a number of Todd’s former students or coaching clients. They include some of the most well-known names in the investing space, top educators, and at least one who has been responsible for launching not one, but four Inc. 500 companies. He’s the real deal.
THE HOW-TO GUY Todd, the head of Tactical Real Estate, and several other companies, is not the ‘Why Guy’. He is the ‘HowTo’ Guy. He isn’t into fluffy theoretic ideas about investing or just motivating you (though he will). He’s known for showing you practical actions that can be put into play to start doing deals immediately. He makes it simple, and even gives you the tools to do it. He has proven systems for getting started and growing, and is generous with complimentary lead lists of properties, lenders, and buyers, that you can use to just start working instantly on the spot. No matter where you are at, from just beginning to already doing 100 plus deals a year, Todd can relate, and he can give you an action plan on the spot, and he’s done deals in every major market in America. INSANE VALUE You might liken Todd Dotson and his team to the Harlem Globe Trotters; he is always playing away games (in different markets training investors across the country), and he always wins as he empowers his attendees to do real deals. Tactical Real Estate may be most well-known for wholesaling, but whether you are interested in wholesaling ugly houses, flipping pretty houses, or even new homes as rentals, or just build a business, you’ll find something to help you take the next step. Lots of people talk about “adding value,” yet we are already inundated with information overload. Todd just
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shows up and delivers with real tactics and application. For example; he is now offering a FREE two-day training, where you’ll see more, and do more in real estate than ever before. This is the type of training most trainers like to make into a highly-expensive paid upgrade. GET PAID Currently Todd is proud to be partnering with Realty411 to present www.GetPaid411com. It’s a big personal and team investment, that provides live FREE real estate success training. It is 2 days of priceless how-to application that will empower attendees to flip a property
in just seven days! You’ll come out with a proven direct action system, lead lists, and knowing exactly what to do next. It's available now for readers, just sign up at www. GetPaid411.com v
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TODD DOTSON incorporates martial arts into his real estate investing business. His ‘Tactical Real Estate Approach’ has been a spot-on formula for success... and the checks don’t lie.
Realty411Guide.com
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reWEALTHmag.com
GROWTH
Be a
MAVERICK Do It DIFFERENT ™ Double Your Income! by Paul Finck The Maverick Millionaire ® “Same old, same old” WILL get you the SAME results you have been getting for the last month, quarter, year, decade, and for some of you, your whole life! You must Do It Different™ to get different results in your life. It doesn’t matter if you are talking about your personal life or your business life; your real estate investing or your dating style. WHEN you take different ACTIONS, you will get different RESULTS. WHEN you take MASSIVELY different action… you will get MASSIVELY different results!
From my more than 30 years as an entrepreneur, 15 years as a real estate investor, and over 10 years as a successful business consultant and coach to entrepreneurs all over the country, let
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me share with you the keys to creating your abundant future. Here are the top six keys to abundant success via the Maverick Difference (www. TheMaverickDifference.com) and how to double your income. TODAY. 1 - CHALLENGE YOUR LIMITING BELIEFS We all have that comfort zone we live in, and within. Some of us have larger ones than others. I remember when I graduated from college, my ultimate vision -- way beyond where I thought I could achieve -- was to make $100,000. That was my vision >
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of what success looked like. So for years, that is what I earned. My thermostat was SET at $100,000. When I was on track to earn $80K, I would work a bit harder. When I was on track to earn $120K, I would relax a bit -- always to land around $100K, year after year. Then I hired a coach, and he helped me change my thermostat. He helped me change my BELIEF. I began to think of myself as a million dollar producer! That one change internally, changed my external results overnight. It does something to your psyche. I began to believe it was possible -- then I began to act as if -- then others saw my confidence and started to believe also. New opportunities came my way. New partnerships emerged. And my income grew. You want to change your income… Change your thermostat!
activity mode, slow it down and do meditation and journaling. Eat lunch at a new place every day for the next month. Take a new way to work every day for the next month. These activities will get you seeing things in a new way; thinking about things in a new way. Your creativity will increase. You will end up stretching your problem-solving abilities and find new solutions to current challenges where you never would have thought otherwise.
2 - STEP AWAY FROM YOUR ROUTINE Change up what you have been doing -- the more the better. That’s right -- I am telling you to be a MAVERICK, and mix it up a bit. Reach out to someone daily you have not spoken to in six months or more. If you are in constant
4 - FAIL OFTEN - MAKE SURE OF IT! - This is the obvious follow-up to number three. When you take massive action, chances are you will not always be right. You will fail! Be okay with that. Better yet, embrace failure. It is the FEAR of >
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3 - DON’T THINK - DO! - Take action long before you believe you are ready. When you hear about “Hero’s” who step in front of a car to save someone’s life, risk being hit by a train to pull someone free of the tracks, run into a burning building because they heard a voice crying for help… do you believe they stopped and considered all the possible outcomes of their actions? Do you believe they weighed out if it was a good idea or not? NO! They jumped in and took action! No thinking. No due diligence time. When interviewed about regret, people absolutely regret things that they have done in the last week or month. However, the overwhelming majority regret things they have NOT DONE when reflected over a life time. The challenge is you do not see the real opportunities in life when you are faced with the choice to say, “YES”. You “feel” the risk, and your instinct is to flee to protect yourself. True Maverick’s have learned to ignore the fear, and do it anyway! You want to be a HERO in your life, take more action.
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Continued on pg. 122
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Are you Interested in
Creating More Income?
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Journey to Freedom
E FRE ad nlo w o D
www.TheMaverickDifference.com and
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{From Property Management Now I
What Investors Should Be Demanding
t all falls apart, or comes together in the property management. What should real estate investors be looking for in order to get the most out of their assets and portfolios now? Property management is such a critical issue, especially in a market that is as large and popular as Texas. So, we tapped into the mind of Pam Blanco, who has been a professional investor, broker, and asset manager in the DFW area for over 20 years, to find out the types of services investors should be seeking today…
THE PERFORMANCE ISSUE It is in the management that investments are proven or broken. In reality, what should be amazing investment opportunities can miserably fail to live up to their potential, if the management isn’t good. At the same time, a borderline, mediocre investment property could become a star asset and multiply in value, with great management. Every real estate investor knows they need professional third-party management. At least if they are to ever really get the best benefits out of their investments, and to be able to enjoy the rewards of their investments, while achieving optimal returns. Of course, finding a great property management service isn’t always easy, even when you are buying ‘turnkey’ properties from out of the area. It’s much the same as trying to pick out a good Realtor, attorney, lender or internet service provider. Sometimes Realty411Guide.com
you have to do a little hunting to find a great one. The need to secure great management is urgent more than ever today, and here’s why…
that they are working with a reputable company that is serious about providing a stellar service.
STOPPING THE LEAKS BEFORE THE MARKET CHANGES The Dallas-Fort Worth area real estate market has been one of the strongest and fastest growing in the US over the past few years. Even though data suggests that markets like San Francisco, may already be deflating. Zillow predict Dallas home values will continue growing, at least through April 2018. With its high rents and high rent-to-price ratio, and reputation for its insulation from market fluctuations, Dallas could become even more popular with global property investors over the next year. However, this is not the time to be lax in property management. Spreads may be great, and tenants may still be plentiful. Yet, these dynamics are constantly influx. Asset prices are expected to rise over 5% in the next year, rents may soften as they push affordability to breaking point, and some tenants may make the leap to homeownership as flippers offer seller financing, and to beat higher interest rates. Landlords must lock in great tenants now, provide an experience which will keep them, ensure their properties are maintained in premium condition, and operate at extreme efficiency to maintain cash flow yields despite converging economics. Pam Blanco says that these are some of the important factors buy and hold investors should be seeking, and signals
1. MOBILE FIRST APPROACH TO SERVICE Google has moved from preferring ‘mobile friendly’ websites, to giving preference to mobile-first websites. That makes it smart from a marketing point of view, but is also just common sense in the effort to best serve both investors and renters who are now mostly mobile.
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2. ONLINE RENTAL APPLICATIONS No one wants to be bogged down in paper today. Much less having to be emailed documents and find a print shop, fill things out and find a way to fax things or drive them back. That’s dinosaur age. Prospective renters should be able to apply online, and that serves the process with increased speed too. Not to mention preserving the environment. 3. CLEAR QUALIFICATION CRITERIA Landlords have to be very, very careful in approving and denying tenants today. Qualifications must be clear and applied evenly and lawfully to avoid expensive lawsuits. Having clear requirements also streamlines the leasing process and keeps the pipeline clear of those who won’t qualify. 4. FAST TENANT APPROVAL Slow operating property management Continued on pg. 116
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by Brandon Richards
A
April 4th, 2017. I closed on my first rehab.
wesome, right? Well, let’s rewind time a bit. December 19th, 2015, I drove to Dallas with my two beautiful daughters, a trailer full of personal belongings, $0 in the bank, and a vision. I came to Texas, got my real estate license and went to work. I had high hopes, just as any new real estate agent does. I was going to just step into an industry in a city I’ve never done business in, and crush it! Wrong. In fact, I didn’t close much of anything for quite some time. I was doing everything right. I had the website, the CRM, office time, cold-calling figured out, and I was sending out postcards! Reality quickly set in: Being a REALTOR® isn’t easy! While I tried to make a footprint as a REALTOR®, I got more and more interested in rehabbing and flipping houses. Around that time, I heard about a strategy called wholesaling. The “get-rich-quick” in real estate method, right? The “no experience, no money” method to getting rich! I was hooked. I bought all the right books, I listened to countless hours of podcasts, and I just about googled everything related to Wholesaling. Alright, so I understand the concept now. But, I was asking myself these questions: “How do I set it up?” “How do I find the leads?” “Where do I find the investors to buy it from me?” The simplest answers to all of these questions fell within my network of people I had stitched together over time. By this time, it was June 2016. I was going to every single real estate networking meetup and weekend guru event I could find that was free.
I listened and took notes, a lot of notes. I was on a mission. At one of the events I attended, the speaker (who had provided an incredible amount of content up until that point) said to the audience, “Nine out of 10 of you won’t take ACTION.” This was fuel to my fire and all the motivation I needed to continue on my mission. I was dead set on not being one of those nine. I went home, bought a domain, paid the extra $15 for the website builder, put in a lead capture form, and went to work. Now I was official. I added my website link to all of my mailers to pre-foreclosures and probates, as well as in my Facebook posts. Facebook? Yes, Facebook works. In fact, my first and largest wholesale came from a Facebook post! So, now I have the know-how, the website, and I have letters going out. For a few months, I JV’d on a couple wholesales until I landed my first direct to seller lead. I owe a lot of my fine-tuning and knowledge to “The Corey’s” in my office at the time. They walked me through my first couple and answered all of my (many) questions. Fast forward to January 2017 when I got a lead off of Facebook (yep, Facebook again) from a seller who is behind on payments. She paid cash for her house when it was new back in 2006. I ended up contracting the house the same day that the phone call came in. Principle balance was $38K and ink’d it at $63K so that the owner could walk away with a sizeable check to put her life back together. After a couple of phone calls, I had an investor out the next day to take a look and he wanted the property at $105K. My investor buyer gave me the assignment agreement he wanted to use and went on to complete title and close. I had just seen the biggest payday I had ever had and I was able to get a seller >
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Realty411Guide.com
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>>>> #CantStopWontStop
out a bad situation by preventing her foreclosure. I was ecstatic! I needed to do it again. I needed to dedicate my time to stopping foreclosures. I found a local company named Propelio providing leads to investors and I began to mail to all their lists; Foreclosures, Probates, Affidavits of Heirship and NOD’s. I send postcards to my Foreclosures and NOD’s, while I send letters to the others. I hired my go-getter daughters to fold, label, stuff and stamp my letters for me. Now, I’ve got Facebook posts and roughly 100 mailers going out daily. I felt the pieces coming together, and I was more thrilled than ever! Roughly three weeks later, I stopped another and wholesaled it to a Subject-To investor. Another two to three weeks later and I have a VA loan on my hands. I was scared; this guy worked his tail off for this and I was one of four other investors making offers. I knew the payoff, I knew this family needed money, I knew the other investors’ strategies, and
I had to do something differently. This family was in trouble, no money, losing their house, and had bad credit. So, I offered $2,500 cash after payoff and paid for six months of credit repair for them. Ink’d it, closed it, and found hard money within my network of people to fund it. They chose me out of the four investors because I built a relationship with them. I talked to them...about life, about money, and about how I wanted to help them. Now, I’m two weeks into my first rehab and I’m on track to finish in under six weeks and nearly $10K under budget. I’m not where I ultimately want to be, but I’m on the right path. I came to Texas with a vision, a mission really, to provide for my family and help as many people as I can along the way. I came, I learned, and I took action. Don’t forget: If you aren’t making offers, you will never make a deal! Cheat on your fears, break up with your doubt, and never stop pursuing your dreams with a relentless passion. v
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Double-Digit Returns with Leverage, pg. 42
“old-school” said otherwise. Fortunately, this puts the USA is in an enviable position and if true, may prove an opportune time for investors to carefully reexamine their portfolios and asset allocations. For astute investors seeking an alternative tool or means to invest in real estate, the availability of nonTRID loans can be prove to be the good news you seek. Why so? Because the non-TRID loans provide a much-needed means to expand existing lending parameters beyond the standard loans instituted by the conventional lending market. Non-TRID loans can often help solve investor questions and liquidity concerns that today’s more restrictive rules and regulations – Dodd-Frank – often dramatically slows or even stops the movement of money. Money needs to flow to have a vibrant economy. Even more, there are often times when the question of loan availability is overshadowed by the question of timing, the number of days-to-close. Non-TRID loans can prove the alternative in helping keep success moving forward. Here are few particular examples where nonTRID loans can prove to be the solution: 1) More flexible limits as to the number of financed properties you may own at the same time. 2) Ability to loan to entities such as LLCs or partnerships. 3) Foreign owners / investors, and this of particular interest as we look to Europe, even China, investing in America. 4) More room to resolve and work around certain credit issues. Within these many benefits, there are two particular issues not to be overlooked. First, the overall condition of the property is critical; and secondly, there is the lender concern about the marketability of the asset. Both are of prime importance. HERE ARE A FEW SPECIFICS TO NON-TRID LOANS: 1) The same basic loan test – Income, Credit, Assets and Property. 2) Banks / lending institu-
Realty411Guide.com
tions are the loan providers and thus obligated to address certain compliance rules and regulations – i.e, audits. 3) Loans are amortized over 25 – 30 years, with the flexibility of fixed rates for the first 1, 3, 5, 7 or even 10 years, before becoming adjustable. 4) Availability of a 30-year fixed loan is limited. 5) Similar to commercial, these loans are kept on the lender’s books and not bundled and sold. 6) Yes, some include an interest-only options, for a fixed period of time, often with pre-payment. 7) As to “no-income” loans, this will be for a future article or by giving us a call or email, today. Non-TRID lenders in this marketplace are limited to perhaps dozens, versus hundreds of providers in the conventional market. Why so? Because such lenders do not sell these loans to another party and thus do not replenish their pool of money available for other lending. As a result, this “balance sheet effect” limits the amount of lending each bank can lend. Their ‘pool’ of money is counted across all forms of lending: residential, commercial, business, construction and such. Having a lending expert available to keep you on top of these complex layers of lending, is key to success. Bottom line: When you find the banks doing this type of lending, enjoy, but don’t hesitate. Often the availability of non-TRID funds may be relatively small, meaning the door can close quickly. In addition, with these loans on their own books, most lenders will likely limit the amount of “individual” exposure, either by the number of loans or the overall dollar amount. Keep in mind, as conventional markets are subject to change, so too, our alternative – portfolio and non-TRID – lending partners. In summary, I am a proponent of purchasing and diversifying into US real estate as an excellent investment. The “buy” signal of an improving and strengthening economy continues. Moreover, the needed pressure to ease overly restrictive, even constrictive, lending is increasing. Further, Europe is sending out teasers to invest, build, and expand their investment in America. Money tends to seek safe havens and secure places. All said, this will bring “new” money into our economy, grow our labor force with higher paying jobs, and bring about ancillary growth as well. The question may be: Can we build fast enough and can builders fill the need? If so, double-digit returns on invested capital, will be confirmed and verified, and investors will the beneficiary. v
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“Are your investments earning you enough income to enjoy the life you deserve?” ~ LAURA ALAMERY
R
eal estate just happens to be an industry with change as its only constant. New data can move the market up, or down, in an instant. Economics, weather, acts of God (earthquakes, hurricanes) can reduce some housing values to dust overnight, while adjoining states might see a surge from migrating away from affected regions. Prices can soar with success of a new industry, such as Silicon Valley, or even marketing campaigns like the ‘imported from Detroit’ phase. These ups and downs have lead some people to bail out from what could have been a profitable investing career. What were they missing, and why are others earning huge amounts of money in a ‘seemingly unstable’ career field? Truth is, there’s money to be made on both sides of the fence. Buying and selling, holding and renting, lending, fixing and flipping are all possible tacks to take – it’s all a matter of timing and balance. Of course, you don’t want to jump off without a net. BUILDING A BUSINESS FROM THE GROUND UP You wouldn’t normally open a restaurant if you don’t know how to make scrambled eggs, right? Yet people venture into real estate every day without any
Realty411Guide.com
- Article by Cherrell Tarantino underpinnings. It’s a real business, folks. Without a foundation, where are you really? Down the river without a paddle. Opening any kind of business, anticipating and limiting your risk is going to come down to experience. When you don’t have it yourself, it makes perfect sense to find a mentor who’s ironed out the wrinkles so you can (literally) avoid losing your shirt. Laura Alamery is such a mentor. Laura remembers what it feels like to crave financial independence. She remembers what it’s like not knowing where to start, or who you can trust. She’s been there and done all of that – and you can benefit from the lessons (good and bad) that’s she’s endured or profited from. That said, there’s a method and diligence required. And intentional purpose alongside accountability to soak in before you head out on your own. Laura’s got it down to a science, from creating a plan of action based on your goals to sharing her tools and resources to get >
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you from A to Z. Having a solid 20 years in and around real estate myself, I found Laura to be a true anomaly, in the best sense of the word. She’s remarkably unexpected. Just when you thought you’ve figured her out, she pulls another rabbit out of her hat. Ideas run rampant when you’re around Laura – yet she’s humble enough to listen to you as well, and her energy is palpable. Her students are devoted, and call her ‘the Real Deal.’ So, what makes Laura stand out in the crowd of trainers and coaches across our country? How did she find the resilience and drive to make something out of nothing, and bad times into way more than merely bearable? Her story is one ‘for the books.’ Read on, and I’m sure you’ll agree… HAWAIIANS CALL IT ‘JUST OFF THE BOAT’ Imagine immigrating in 1985 to America from Italy at the age of 21, barely able to speak English. Sure, it was beautiful, but then Laura Alamery was used to scenic surroundings – born and raised in stunning Vicenza, just 40 miles from the Adriatic Sea, and Venice. For most single young women the language barrier – not to mention the gender politics and culture shock of such a migration – might have been overwhelming. But Laura recognized so many opportunities and took advantage of everything that came her way. As a rule, newcomers to the Hawaiian Islands aren’t always welcomed with open arms; they go through a ‘rites of passage’ period until deemed worthy of trust and friendship. But Laura was bright and engaging and adept at uncovering what isn’t always obvious to everyone else. She had nothing to prove, except to herself; it was a good fit from the start. For Laura, these few years in Hawaii would prove to be fortuitous; the perfect launch pad for the 30-year Realty411Guide.com
journey she was destined to take. Ambitious and determined to have a good life for herself and her family to come, Laura hit the ground running – and never looked back. Of course, college wasn’t an option… It was a NECESSITY, to the future Laura knew she deserved. Enrolled in Hawaii Pacific University, she would earn a Bachelor of Science in Business Administration. Getting an education four miles from Waikiki might have been a major distraction for most people. But real estate caught her eye, and right away she realized it could help to pay for school. Laura started reading everything she could find – watching late night infomercials and buying courses by Dave Del Dotto, Robert Allen and Carlton Sheets. She got her real estate license and joined Dolman and Associates in Honolulu. By the time she earned her bachelor’s degree, Laura had also joined the ranks of multi-million dollar producers! THE VALUE OF MENTORSHIP… Laura credits much of her success to the mentorship of Viola “Vi” Dolman, a feisty lady who became something of a pioneer in Hawaii’s real estate market. The founder and president of Dolman Associates, Vi amassed a formidable army of 75 female agents [and one gentleman] who literally made real estate history in the Aloha State. And, Laura was fortunate enough to be there to absorb the wealth of knowledge and inspiration not normally bestowed on agents by their brokers. Call it serendipity, but the more determined Laura became – and the harder she pressed toward her goals – the more frequently she found herself in just the right places. She relished every dram of knowledge and took in every tidbit of wisdom about the industry; not only surviving, but thriving as an entrepreneur. This transformative experience in Hawaii is the framework around which her real estate coaching and mentoring programs are built today. Okay, so is that all there is? Five years after graduation, Laura moved to Missouri. She worked tirelessly to add another degree, an MBA in Finance. Then, after attending a conference
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in Las Vegas on Short Sales, her real estate investments began soaring. “Within a few months I had 30 properties under contract and a short sale negotiator working for me full time.” With a promising new job in Corporate America, Laura had planned to keep investing in real estate as a side business. But when this part-time income outpaced her salary, she took a leap of faith and plunged into real estate full time – and her career skyrocketed. And then, the rubber met the road…What came next can only be explained in Laura’s own words: “After a few years, it began to get boring. I knew there was something missing; there had to be more to this. The money was great but my heart wasn’t in it. Writing a book wasn’t interesting for me – I’m more of a hands-on person. In 2010, with the Internet so popular, I decided to build a website teaching about real estate. For a year and a half I worked on this website
at night, every night from 8 pm to 2 to 3 am in the morning. I had a limited budget at that point so I did the work myself and was still doing real estate in the daytime. I didn’t really know yet if I was going to do something with this website – I didn’t really know where I was going with it. So I basically did the videos, and basic content and started it as a membership site and launched it in August 2011. It was called RealEstateMentorshipOnline.” My focus at this point was just to give training to Realty411Guide.com
people about buying real estate, and within a year it was successful, I guess, for a membership site. But people kept telling me, ‘You need to go out there, you need to talk to people, you can’t hide behind a computer – you have much more of a presence, charisma.’ This one person, now a good friend, he kind of pushed me to do that. That’s why I started doing these live events. I started first in St Louis, as that’s where I lived, and slowly expanded into other areas.” It had come full circle. This bright young woman – nurtured by a Hawaiian firm full of sage agents so openly generous with their time and wisdom – realized her own life would really only be complete by inspiring others to fulfill their dreams. COACHING FROM A DIFFERENT ANGLE… Hands-on is a requirement with Laura; for both her and the protégés she mentors. So, don’t expect to rest on your laurels – she’s going to hold you accountable until you’ve got the process down pat. You can even reach out later, after you’re on your feet. Laura loves to stay in touch and provides even more ways to keep you in the midst with local live events in your city, webinars, and podcasts. She makes it a point of answering all real estate questions personally that come through her site, and is thoroughly invested in your success at every turn. You’ll also want to get to know Laura’s daughter, Elizabeth Klingseisen; her partner and protégé. A vibrant millennial, with a firm grip on what she wants and how she’ll make it happen, Elizabeth was so inspired by her mother that she’s following in her footsteps. That said, she’ll make her own mark as well, because that’s what’s in her blood – and in her heart. READY, SET, GO!
Laura Alamery has acquired ninja skills in every facet of this industry, while passionately blazing a clear and defining path to ensure her students reach their goals. It’s a calling, a passion to empower those who hope
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>
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Are Your Investments Earning Enough Income, pg. 101
for something better than a deadend job with no redeeming value. It’s simple: You want to be a successful real estate investor, right? Well, you’re in luck.At this stage in her distinguished career, Laura Alamery considers her students to be her most valuable investment, and she’s ready to give you everything she’s got. Are you ready? Visit www.lauraalamery.com or email Laura personally at laura@lauraalamery.com v
Cherrell Tarantino is a writer, web designer, and online marketer with a 20-year background in construction, real estate sales and property management of her own. She thoroughly enjoys managing Laura Alamery’s marketing team and staying in touch with the real estate industry vicariously through the eyes of this remarkable investing mentor.
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he current political climate and economic uncertainty has, in a way, benefited the small- and mediumsized business owner. Proposed changes to the tax code, cutting taxes for some and increasing it for others have entrepreneurs looking closer at the way their business is set up. This self-inquiry, this reflection, is the first step in finding the answers to build your business on a solid foundation. Fortune DNA, a boutique Las Vegas, Nevada structuring company, focuses on custom-building corporate entities for their clients depending on their clients’ specific needs. Many entrepreneurs, even experienced ones, are unsure, which type of entity best allows them to achieve their short-term and long-term goals. Corporations address certain issues differently than partnerships, and although an LLC is a modern amalgamation of the two, an LLC has its own unique set of benefits and detriments. Fortune DNA can assist you in navigating the myriad of choices, helping you choose a corporate entity that best fits your business and financial goals. A well-built and well-run entity separates an individual with a hobby, from an entrepreneur with a business. In the eyes of the IRS and the courts, a sole proprietor and a structured business are treated vastly different in taxation, and in assessing and separating business and personal liabilities. Corporations
a few more webpages and prints himself a gross of business cards with his name proudly preceding his freshly minted title, “President and CEO”. The second type of hobbyist recognizes the inherent pitfalls of purchasing pre-made forms online and instead, calls one of the many structuring firms offering to fill out and file your documents for a fee. This second-tier service provides the hobbyist with a bit more information while upselling him on products that cost a lot, but offer little in return. With false confidence and minimal information, the hobbyist operates his businesses blissfully unaware of the rules of corporate governance. Comingling business and personal funds, signing documents in his personal capacity, failing to hold and record annual meetings are a few grievous mistakes that makes it easier to “pierce the corporate veil” and bring crashing down the protective wall separating the business and personal assets and liabilities. In comparison, the real estate entrepreneur not only understands the importance of having a custom-tailored structure but seeks to educate himself on the proper way to operate the structure to achieve maximum benefits. The real estate entrepreneur understands that a properly operated entity protects your business operations and assets from your personal liabilities and vice-versa. Being the defendant in a civil lawsuit is the wrong time to consider whether you should form a corporate entity to protect your assets. Fortune DNA focuses on action rather than reaction; building corporate entities to prevent future calamities. >
are entitled to tax deductions that are not available to the sole proprietor. Also, an individual may carry losses forward for three years, while a corporation can carry forward its losses for an incredible 20 years. As for Nevada’s corporate tax, there is none. As for liability, a Nevada entity with properly drafted By-laws or an Operating Agreement protects its Officer and Directors, or Managers from personal liability for lawful acts of the entity. A business market niche that epitomizes the difference between a hobbyist and an entrepreneur is real estate investments. The hobbyist may have set up what they believe is a corporate structure, going online and purchasing pre-packaged, discount services that promise much, but deliver little. With the click of the mouse, the hobbyist believes that he is now officially a business. Flushed with excitement at starting his own “company” and patting himself on the back for making the executive decision to save a few bucks, the hobbyist visits
Fortune DNA, a boutique Las Vegas, Nevada structuring company, focuses on custom-building corporate entities for their clients depending on their specific needs. Realty411Guide.com
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THE FUTURE IS bright Lori Greymont announces a new fund focusing on mortgage loans made to:
• Investors • Developers • Small Businesses Loans for Construction, Acquisition, and Rehab of Non-Owner Occupied Properties:
• Commercial • Multifamily • Non-owner single family
Decades of experience in the greater SF area.
For information: 408-891-2820 lori@northpointcapfund.com www.northpointcapfund.com
What separates Fortune DNA, a boutique entity formation and structuring company, from the large, mill-like companies is personal service. Whereas the mills sell you pre-packaged documents with instructions on where to sign and what to mail and to whom, Fortune DNA takes time to educate each client on the more important why things are done and how each action affects the structure. Nick Fortune and his staff of employees and consultants have real-world experience in building and running successful enterprises. This hands-on approach provides clients with personalized insight that cannot be conveyed through written instructions alone. It is Fortune DNA’s goal to educate their clients so they can more efficiently and effectively operate their entity to achieve the full benefits their entity offers. Fortune DNA’s philosophy is that building its clients a custom racecar is worthless, if the client does not know how to drive. Fortune DNA wants to ensure that clients have the best entity suited for them and the know-how to operate their entity to achieve the results they desire. Company clients are not merely numbers in a file, but members of a community of likeminded entrepreneurs seeking to maximize the fruits of their labor. Fortune DNA holds several get togethers throughout the year where clients can meet other entrepreneurs to share their experiences and business ideas. These meetups have been the launching point for successful partnerships and joint ventures and an open forum to interact with other ambitious individuals. The success of Fortune DNA is measured not by the volume of clients it has, but by the number of return clients that come back to the company to address their other business and personal needs. From forming revocable and irrevocable trusts to setting up self directed IRAs, clients recognize the value of having the experience, passion and commitment of Fortune DNA on their side. v For those readers who would like to have a tailoredmade program built specifically for the way they invest, with the customer service and support they deserve, please feel free to reach Fortune DNA at 702-6374040 and mention this article for a free consultation.
MOTIVATION
Your WORTH Is
E
Beyond Compare
ach of us has a personal calling as unique as a fingerprint. You are worthy, simply because you are here.
Accepting and honoring your uniqueness and extending that self-love out into the world is the reason why we're here. When you stop judging and doubting yourself, you can begin to take risks and become more of who you really are. What happens as you find more and more of yourself? You get unstuck. You attract that which is more, better, brighter... of everything. The joy of finding self-worth is best expressed in the following words: We ask ourselves: “Who am I to be brilliant, fabulous, talented, gorgeous?” Actually, who are you not to be? You are a child of God. Your playing small does not serve the world. There's nothing enlightening about shrinking so other people won't feel insecure around you. As we liberate ourselves from our own fear, our presence automatically liberates others. Expect your life to be full and beautiful. Magnify your own qualities of light and love. You'll break out of your own stagnation, and you'll have the energetic voltage to electrify possibilities all around you. The reason people live with limitations is self-judgment. You have clamped down a lid on your expectations. The cells in your body see every particle of nourishment without hesitation, even though you set limits. When we have the same confidence emotionally, as psychologically that comes naturally to every cell as it embraces life, creative intentions are easier to activate. To say "I deserve" strikes some people as egotistical and boastful, which is certainly a pitfall. But
‘
self-worth is not about ego. It's about getting unstuck in a specific way. When you feel worthy, you believe that you should have and can have good things in life. Not only in material terms, but in terms of lasting fulfillment. To have limited or low self-worth requires suppression of desire. You find yourself fighting against positive changes. The validity of your own truth, love, beauty, grace get pushed away. From such a position of self-judgment, creativity feels too risky and doesn't get activated. Self-worth rises when every day you look beyond limitations and feel secure enough to expand your idea of who you really are. In the world's wisdom traditions, each soul plays a necessary part in the evolution of the cosmos. The present moment is unique in the history of the entire universe. Existence itself gives you opportunity to create something new, unique, and necessary. No one can be more unique than anyone else. Your uniqueness is simply a fact that you can joyfully embrace. And when you do, your desires serve a bigger purpose than more money, a bigger house, and new possessions. Those aren't signs of self-worth. True signs of self-worth are to participate fully in your own existence, never shrinking away or judging yourself. The biggest reason existence can bring joy is because love, beauty, truth, creativity, and meaning are ever present and eternal. Human beings are the only creatures who can use and magnify these qualities. Your worth is beyond compare! v Regards,
Sam Sadat www.samsREclub.com | 800-998-9930 Office
When you stop judging and doubting yourself, you can begin to TAKE RISKS and become more of who you really are. Realty411Guide.com
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YOUR MONEY MINDSET *
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I
f you are ready to create powerful breakthroughs in the area of money, then you will want to take a few minutes and invest in reading this article. My name is Cappi Pidwell, and I am a Master of NLP and Hypnotherapy. I have trained thousands of individuals, top companies and organizations for the past 23 years, on the topic of "Money Mindset”. Did you know that you have a personal relationship to money that you have learned how to master for years? Everyone has this relationship, because everyone deals with money on a daily basis. The real question is: Is this relationship one of abundance, growth and joy, or is it one of stress, worry and strain for you? How rich or poor is this relationship for you? Here are some basic questions you can begin asking yourself to identity your Money Mindset: What are your common, daily “feelings" about money? What do you tell yourself about money? Do you tell yourself things like: “Uh, I just don’t have the money right now.”? Or do you feel like you have to work hard for money, or does it come easy to you? Are you someone who feels like everything you touch turns to gold, or
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Your subconscious Money Mindset is driving ALL of your daily decisions, and ALL of your financial outcomes. are you someone who worries about your investments and finances, telling yourself you can’t afford to make a mistake? Do you have a habit of under-earning or overspending? Or do you have non-productive investments? Are you in debt, barely making ends meet? Or are you doing fine and simply wanting more? What are your habitual feelings and beliefs about money? >
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Your Money Mindset, pg. 112
Because I guarantee you…. they have been the same for YEARS! As you can see, there are many places you can be in your personal relationship to money, so take a minute now and identify what your personal relationship to money really is. There are no right or wrong answers, it’s just you being with you, exploring your personal blueprint with money. Most people NEVER even look at this relationship, they jump right into business and skip over this very important fact that they have an internal money blueprint, therefore relating to money in their “trained” way. They often take all the right classes, go to great seminars and hope to “make more money” in their career or investments, yet never resolve their internal money mindset. Your subconscious money mindset is driving ALL of your daily decisions, and ALL of your financial outcomes. I often tell my clients to imagine that they have two bank accounts in their mind: One is the bank account of lack, fear and worry; and the other account is that of joy, prosperity and abundance. Now ask yourself, where are most of your “daily thought deposits” going? Are they going into lack, fear and worry, or are you thinking of joy, prosperity and abundance? Our thoughts, beliefs and feelings are very powerful. With my Mental Money Mastery Audio System, you will learn how to create a new relationship with money that will create a new future, without the old limiting money baggage that continues to run your outcomes and financial results. Your money mindset is priceless and as you enrich it, your outcomes change. Here is one of our client’s testimonial: “Well, something strange is definitely going on here. I've gone from chasing a million dollar net worth, to attracting a $10MM net worth just this week. What's so different is that it feels comfortable and "right" now, whereas before that was just wishful thinking on my part. On top of that, money is just falling out of the sky! I used to have anxiety about finding money for our deals. Now, I've had three investors call me this month asking to put their money on one of our deals! You are a money miracle worker Cappi!” Take the time to upgrade your Money Mindset today. It is the most important investment you will ever make! It took me years to formulate this subconscious system and thousands of people have gotten wonderful results with it. v To learn more about the Mental Money Mastery Subconscious System, go to: www.CappiPidwell.com. Realty411Guide.com
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Whether this is your first step in real estate investing or your continuing education and training, we are very excited to have the opportunity to assist you in reaching your real estate investing goals. ORGANIZER: JOE BOSTON - ADMINISTRATOR: CINDY PULLEN
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Armando Montelongo is Ready to Reclaim his Throne The OG of house flipping, Armando Montelongo, is BACK with a new television show, new houses to flip and the same ‘don’t-give-a-#%&$!’ attitude that made him famous.
Armando first burst onto the scene in 2006 with a nearly three-year run on “Flip This House,” and then largely steered clear of television. He made a few appearances, including a 2015 episode of CBS' "Undercover Boss," and some others. He took a few minutes to discuss what he has been doing, the status of a lawsuit against him and if there’s still room for him in the world he created. Q: You’re the guy who started this flipping craze on TV. How has house flipping changed since then? A: When “Flip This House” ended in 2008 and the market changed, people thought it would be impossible to find deals. The very few educated people -- who came through my company -- were doing extremely well. Now, what's happening in today's market, is you have a bunch of really unedu-
cated people attempting to flip houses. Before, it was really easy to get deals. Now it's still easy to get deals safely -- if you know what you're doing. But if you don't have a clue what you're doing, you're going to lose money in today's marketplace. Q: You have been approached to do a number of house flipping shows. Why haven’t you done them? A: I have been focusing on setting up the largest real estate network in the country. We have taught close to 20,000 house flippers and we have been focusing on the success of our students. Q: So is that why Inc. magazine named you the fastest-growing education company in America? A: I believe so. At the time, our company was young. It took all our focus to teach our students. We didn’t have the capacity to do teaching and television, we had to make a choice. We chose our passion >
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What Investors Should be Demanding, pg. 92
Armando Montelongo, pg. 115
over television. Besides, I always knew television would still want me.
companies and HOAs that drag their feet on approvals are a major detriment to the real estate market today. They hurt all parties involved, including neighboring unit owners. 5. TRACK RECORD Just as with looking at renters’ track records, property owners should be looking at manager’s track records to predict future performance. Many, many people are trying to jump into the PM game to capitalize on the current surge in rental property ownership. Watch who you pick. 6. ONLINE PAYMENTS Renters must be able to pay online today. Failing to have this capability is just asking for performance issues.
jason
7. REGULAR PROPERTY INSPECTIONS Pam Blanco says, “It is surprising how much damage a bad tenant can do to an asset in a short period of time.” Sometimes you just never know, despite how great a prospect appears on paper. Thorough managers will schedule regular property inspections and document them to preserve assets. 8. ONLINE MANAGEMENT TRACKING Investors should also expect transparent and up to date details on their property to be accessible online, all the time. This may be proprietary software, or using property management tech tools like PropertyWare or Rent Manager. v ~Article by Tim Houghten ABOUT PAMS Pam Blanco is the founder and owner/ broker of PAMS (Property Asset Management & Sales). She has been in real estate since 1991, and has built a robust team of industry experts to service single family, multifamily, and commercial real estate income properties in Texas. For a list of properties, which are ideal for turnkey cash-flowing investments in Texas, or to find out more about how PAMS can enhance the performance and profitability of your real estate assets, or help with evaluating potential acquisitions, go online to: www. PamTexas.com or call 682.558.8900.
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Q: There are a lot house flipping house shows and training companies that have imitated you. Why do you keep growing in the marketplace? A: I think it’s because the focus is on our students to give them a real product. We really do house flipping. I did it before the recession, I did it during the recession and I still do it today. We have the pulse of the market. We know what’s happening in the market before it happens. Q: Armando, we have to address this. You have a lawsuit where a number of people said your education didn’t work. How do respond to that? A: Well, their attorney got a lot of free publicity off of me, so I’m not going to expand too much on it. What I can say is that 35 of the plaintiffs were recently dismissed from the lawsuit and another 30 were already dismissed, so it’s down to about 100. And of those, about half of them are either working for competitive companies are have opened companies to compete against me. Q: So is the saying true... that when you’re the leader, everybody wants to bring you down? A: Yeah, there’s a level of truth to that. It also makes you tougher, and if you get past those challenges, then you and your network go to a whole different level. That’s what’s happening with our students right now; they are seeing more success than ever. Q: Your education company is growing, so why get back into television? A: There are a million house-flipping shows out there. Here it is, 10 years later, and they're still showing reruns of "Flip This House." The fans have said: “Please do another show,” and we said, “Let's do a show that fans want to see.” Q: Why should people pay attention to your new show? Aren’t you old news? A: We just hit 1 million views of the trailer for “Flipping Nightmares,” and the response to the first episode has been overwhelming. Old news? I’m just getting started! v
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Armando Montelongo Seminars
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STRATEGY
Holding Title in a Land Trust or Limited Liability Company
I
Randy Hughes, known as “Mr. Land Trust” shares his expertise and insight.
have written a lot about the virtues of holding title to your investment real estate in a Land Trust, but confusion persists. Most attorneys advise their clients to title their property in a Limited Liability Company (LLC). The reasoning is that LLC’s give better asset protection than Land Trusts. While it is true that LLCs provide better asset protection than Land Trusts it makes no sense to put more than one property in ANY one entity. Think about it, didn’t our grandparents tell us “not to put all your eggs in one basket?” What exactly does this mean? When our country was primarily occupied by farmers (and many of them were chicken farmers), it quickly became common knowledge that when you were collecting eggs in the chicken coop, you did not use just one basket. The reason why you used more than one basket was if something happened to that one basket (i.e you dropped it, stepped on it, something fell on it, the cows sat on it, etc.), you could lose ALL your eggs. With multiple baskets you could at least end up with something to eat. This logic holds true with real estate too. If you hold the title to your property in any one entity (i.e. Land Trust, LLC, Corporation, etc.) and a claim occurs against
No one will learn to protect your assets like you will. No one will lose sleep over setting up a good asset protection plan to protect you and your family... other than you! So, take the bull by the horns and get to work. Realty411Guide.com
one property it can infect/affect the other properties. This is just common sense, but since only 5% of the lawyers in the USA are asset protection specialists, poor advice abounds. Think about this logically. If you own five properties and they are all titled in an LLC and a lawsuit occurs against just one property...all the properties will be affected. Oftentimes in a lawsuit a judge will order that no assets be transferred by the “owner” (read: your LLC) even before the jury has rendered its verdict! This means that you can’t sell or refinance ANY of the properties in your LLC until the lawsuit is over. Most lawsuits take years to resolve. Are you getting to see the picture here? I hope so. Furthermore, if you lose the lawsuit and a lien/judgment is recorded against the “owner” (your LLC), you have ALL your equity tied up (in all properties held inside the LLC) until a resolution can be negotiated with the Plaintiff. This puts you in a terrible negotiating position and you will likely be the big loser. You would also likely be restricted on your ability to transfer memberships in your LLC. One of the benefits of getting older (and hopefully wiser) is experience. Not only your own personal experience, but that of your peers. Over the last 44 years of investing in rental real estate, I have seen many >
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Continued on pg. 120
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Santa Barbara Real Estate Investors Association santabarbarareia.com The Santa Barbara Real Estate Investors Association is a great opportunity to help grow your future and add value to your local community and beyond.
Dan Ringwald, Voice & Text: 805-242-3004
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Holding Title in a Land Trust or LLC, pg. 118
investors destroyed by poor planning and bad advice from others (professionals and non-professionals). The real problem is by the time you discover you have been given bad advice, it is too late to do anything about it. You cannot buy fire insurance on your house when it has already caught fire! No one will learn to protect your assets like you will.
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No one will lose sleep over setting up a good asset protection plan to protect you and your family...other than you! So, take the bull by the horns and get to work. It is my suggestion that all real estate investors put each of their properties into separate Land Trusts (so each is insulated from the other). This is easy to do once you have the knowledge and forms. It is also very cheap to do because forming a Land Trust costs NOTHING! Zip, nada. Why not get the “best of both worlds” and link the great privacy benefits of a Land Trust together with the asset protection benefits of an LLC for some dy-no-mite asset protection? This can easily be done by making the beneficiary of the Land Trust your LLC. There are many other structures that I discuss in detail in my Land Trusts Made Simple ™ home study courses. Please go to: www.landtrustsmadesimple.com for more information. Or, if you would like to attend one of my FREE Land Trust Web- inars, go to: www. landtrustwebinar.com. Also, feel free to call me with any questions. I actually answer my phone! 1-866-696-7347 v
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The Trump Economy, pg. 31
Be a Maverick, Do it Different, pg. 90
in lending as interest rates and prices rise. TWEETER IN CHIEF For those real estate pros and investors looking for the best ways to claim their share of the massive opportunity in the current market, the President’s affinity for Twitter can’t be ignored. In fact, some might argue he single handedly saved the social network from going down the same slope as MySpace. If you want to continue to stand out as a real estate investor, agent, broker, or realty service professionals, it’s important to maintain visibility and hold onto market share. Social media marketing is a must. Just don’t ignore the opportunities in print, email, SEM, and engaging live in-person as well. 2020 AND BEYOND Overall it appears that we can expect great things from the real estate market between now and the run up to the 2020 election. Now is definitely the time to make big moves that will pay off in the Trump economy. Lenders are making that even easier for investors who take the time to look up their financing options. Just keep an eye on affordability, and stocks. If there is a new stock market collapse and bursting tech bubble, we can expect a short land rush, and then property prices being pushed to new limits. While scandals may surround the Trump Administration and his political style is unorthodox, his impact on the nation’s economy has been a favorable one thus far and real estate and stock investors are reaping the rewards. Realty411Guide.com
the challenges in our life. It is the covering up and the avoidance of stepping up to admit the wrong that causes most of the heartache. Be willing to be wrong. Admit you’re wrong. Move on with living life to its fullest. As an international speaker, trainer, business consultant, and coach to entrepreneurs and real estate investors all over the world, it is these KEYS that have made the real difference in my life. These Keys are just some of the pieces to living life the Maverick Way to create The Maverick Difference in your life. When you like this and are looking for more, please go to www. TheMaverickDifference.com for a free book of additional keys to ensure your journey is a successful one. v
failure that keeps most people stopped and stuck in life. It is what holds you back from living life to its fullest. Every success story includes failure and most often massive failure. You most likely will not receive the abundance you are looking for without it. AND the avoidance of failure will always leave you with less than. Go ahead and fail yourself to massive success. 5 - LASTLY, BE WILLING TO BE WRONG! - Paul, wait, you promised me six lessons. Yes, I know and I made a mistake to stress the importance of lesson number five. Be willing to be wrong and then step up and admit it. I have observed through my own experiences and coaching thousands of entrepreneurs around the world, everyone makes mistakes, everyone does something wrong every so often. Doing the wrong thing is NOT what causes the majority of
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Written by Paul Finck, The Maverick Millionaire ®. Paul coaches real estate investors on how to double their results. Get connected to Paul at: paul@paulfinck.com
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