Realty411 INSIDE: PRIVATE MONEY411 - FINANCE YOUR DEALS NOW! Print • Online • Network
www.realty411guide.com
Vol. 5 • No. 4 • 2016 |
A Resource Guide for Investors
Cashflow with
CONFIDENCE
Network h lt a e W Real ich and R s r e d n fou ttke help Kathy Fe ate freedom e others cr cashflow with high perties. rental pro
! P U S ’ F R SU
AND SO ARE RENTS .
g in
in art
St
id eM
BLACK BE
’s
$40
th
Education • Me
tes
a pR
Ca
d-
-an
Fix
• KickStart 101 – How to Create Cash and Wealth Thr
ies
it tun
or
pp
O Flip
Real Estate Education for I
14%
• Wholesaling – Flipping Houses for Quick Cash • Master’s Program In the Field Wholesale Training • Rehabbing – Making Huge Profits
• Purchase Options – The Best Creative Financing St • Joint Venture – Developing Strategic Alliances sh
Ca
B
• Real Estate Investor Club – Monthly Meetings to Sta
NATIONWIDE TURN-KEY REAL ES
’s $60
h
t g in
rtin
Sta
id eM
• Business Training – Quick Start Entrepreneurs
r
e uild
Cash Flow + Appreciation + Tax Ben • Cleveland, OH
Flo sh Ca
A w&
re pp
cia
tio
n
Starting in the Mid $40’s Cap Rate 14% Strategy: Heavy Cash Flow & Appreciation
• Indianapolis, IN
Starting in the Mid $60’s Cap Rate 9% Strategy: Cash Flow & Appreciation
• Kansas City, MO
Starting in the Mid Cap Rate 9% Strategy: Cash Flo
• Phoenix, AZ
Starting in the Upp Cap Rate 3% - 5% Strategy: Apprecia
( 95 1) 280 BlackBeltInve
ELT INVESTORS
entoring • Nationwide Investments
Investors
Mentoring
rough Real Estate
• One-on-one Coaching in Building, Setting and Achieving Your Goals
Fix-n-Flip Opportunities Offered in Phoenix, Arizona Call Us for More Information
trategies
ay Engaged
STATE INVESTMENTS
nefits = Wealth Builder
d $60’s
ow & Appreciation
per $70’s
ation
• Toledo, OH
Starting in the Low $40’s Cap Rate 12% Strategy: Cash Flow
• We locate properties that are not available on the MLS to find our clients the absolute best deals!
0-1900 stors.com
Mr. James is President and CEO of United States Tax Relief. He has spent his entire career helping people create and preserve wealth through knowledge. His business and tax expertise was instrumental in launching a business tax reduction program with Scott Estill, former senior trail attorney for the IRS. Patrick has dedicated his career to teaching people how to take advantage of every possible tax deduction in order to minimize tax liabilities and only pay what they legally owe.
For Your FREE book visit us online!
To book Patrick James to speak at your next event, call: 253-566-6111
11 Publisher’s Note: A Special Tribute 15 Surf’s Up, and So Are the Rents 18 Kathy & Rich Fettke’s Real Wealth Network 26 Success Secrets with National Note Group 29 Here Comes the New Guard at B2R Finance 31 Exit Strategies Made Simple with Philanthropy 32 Meet Your Creative Financing Experts 33 Disclosing Risk in Private Loans 37 Two Tactical Minds in Finance Team Up 46 Benefits of Using a Private Lender in Deals 49 A Jumpstart with Colony American Finance 52 Way of the Real Estate Warrior by Sensei 54 The Dynamics of the Self-Directed IRA Card 56 Exclusive Interview with Rodeo Realty’s CEO 59 The Clothier Family, based in Memphis, Lead Four Companies on INC.’s 5000 List 62 Kent Clothier states, “The Time is Now” 62 Overcoming Inventory and Lead Shortages 69 Land Trusts and the Savvy Landlord 70 Why to Consider Commercial Real Estate 72 Understanding Lines of Credit with REIA NYC 74 Investors: Welcome to Your Money Patch 76 The Next Tsunami: Residential Assisted Living 78 Live the Life in Style - #LIVETHELIFE 82 Startup Tips for Entrepreneurs 83 Find Your Power with Will Duquette 84 From Top Model to the Top in Real Estate 86 Safety Tips when Showing Listings 89 Steve Love on Why REIAs are Vital 90 Photographs from Our National Expos
pg.62 pg. 78
Photo right: Meet the team at B2R Finance. Left: Syd Leibovitch with Rodeo Realty in Beverly Hills. Syd owns the largest privately-owned agency in the United States.
pg. 56 Realty411Guide.com
Money411 P R I VAT E
FALL ISSUE 2015
Here Comes the New Guard
B2R Finance Leads Lending Innovation
pg. 29
contents
Learn about Kent Clothier ’s new company Real Estate Worldwide. In this exclusive interview, Kent reveals why the time is now to begin your journey towards financial success.
The Source for Real Estate Finance from Realty411guide.com
PAGE 3 • 2015
Photograph from left to right: GREGOR WATSON, Chief Revenue Officer; DARREN THOMPSON, Chief Financial Officer; PAUL BEHM, Chief Information Officer; JASON HOGG, Chief Executive Officer; MATT MALANGA, Chief Marketing Officer; KATHARINE BRIGGS, Chief Operating Officer; JOHN BEACHAM, Chief Investment Officer
reWEALTHmag.com
Realty411 Wealth Real Estate
PUBLISHER Linda Pliagas BRE #01355569 CONSULTANT Sabrina Brown EDITORIAL STAFF Lori Peebles Robb Magley Tim Houghten Stephanie Mojica COPY EDITOR Stephanie Mojica PHOTOGRAPHER John DeCindis COLUMNISTS Tom Wilson Kathy Fettke Leon McKenzie Randy Hughes Sensei Gilliland
PRESIDENT Nikolaos K. Pliagas PRODUCTION Emma Krull WEB MASTER Victoria Landis ADVERTISING Ryan Gay Linda Pliagas EVENTS & EXPOS Lawrence Ruano Anthony Patrick Michael Ringwald DISTRIBUTION To receive complimentary copies, please call our hotline 310.499.9545 ADVERTISING 805.693.1497 Realty411Guide.com reWEALTHmag.com
Questions? 805.693.1497 or 310.499.9545 Join Our VIP Social Network: http://realty411guide.ning.com
Realty411 / reWealth magazine is proudly published from Santa Barbara County, Calif. ©Copyright 2015. 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 advise of your trusted financial advisor, attorney or tax consultant. BEWARE: Real estate investing is risky and may result in loss of capital.
PRINTED IN THE USA — GOD BLESS AMERICA Connect to our virtual network online:
Network, Learn and Prosper Chapter Member of:
We Create Wealth One Property at a Time First Time Admission is FREE Call 818-217-4630 for information
We Serve Southern California www.ProsperityThroughRealEstate.com Realty411Guide.com
PAGE 8 • 2016
reWEALTHmag.com
The #1 Turnkey Real Estate Company In The Country. The goal of our turnkey process is to provide a reliable, consistent, repeatable experience for each of our clients. Each month we work with new clients to provide them with a successful path to owning single-family rental homes, and we work with existing clients continuing to build their portfolio. The Memphis Invest team handles the details here on the ground to ensure you have success as a real estate investor.
Call us today! 877-371-2625
Memphis • Dallas • Houston
Your financial future is already built. All you have to do is claim it. MemphisInvest.com
Patch of Land building wealth. growing communities.
FAST FUNDING. SHORT TERMS. ALL FROM JUST 7%. Start your project today with prefunded loans from $100K to $10M and up, in as little as 7 days.
Get the Flexibility You Need with Nationwide Lending | LTCs up to 80% Up to 80% Rehab Budget Financing | We Scale Your Broker Business Fast Prefunded Loans Don’t miss another opportunity. Get your project funded in as little as 7 days.
‘Makes Sense’ Underwriting Our guidelines and lending parameters are both flexible and credit-friendly.
Relationships Matter We build long-term relationships with developers. Repeat loans are funded faster!
Scale Your Business Go nationwide with access to consistent capital across a national network of investors.
GET STARTED TODAY! SPEAK TO ONE OF OUR SPECIALISTS OR VISIT US ONLINE:
(888) 608-1616
patchofland.com/borrow
originations@patchofland.com
Patch of Land building wealth. growing communities.
©Patch of Land Lending, LLC, a subsidiary of Patch of Land, Inc., is the originator and lender of record. NMLS#1286539; CFL License 60DBO-45420; Oregon Mortgage Lender License #5384. We currently lend in all states except for the following: AZ, NV, SD. Origination fees and other fees may apply. This is not an offer to lend. Any financing will be subject to a credit evaluation, approval of the subject property, and other restrictions. Terms and conditions are subject to change.To qualify, a borrower must meet our underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must meet certain conditions. Your actual rate will depend on a variety of factors. Rates and Terms are subject to change at anytime without notice.
Linda’s Letter
I
’m excited to share our new, large issue featuring some of the most influential companies in the real estate industry. Many of the principals of these compa-
nies, I have personally known for many years. In fact, some of them have been advertising with us consistently since we began publishing. Our industry circle is small, so over time you become acquainted with people on a personal level. Recently, I found out just how caring the real estate investor community can be due to a recent tragedy in our office. Our Empire State Real Estate Investor’s Expo in Times Square had closed with a big bang. I was on cloud nine. Then my joy was zapped away when I was told the news that our sweet office worker, Morgan Schaal, suddenly had passed away.
Jill Benes from Real Wealth Network and Linda Pliagas network in front of the B2R Finance exhibitor booth at the Los Angeles Cashflow Expo. Photographs by John DeCindis, Cool Breeze Photo.
Morgan was a true gift for us. He arrived
retired top producers in the Santa Barbara area. He tried his hand
before the start of his shift every morning and
at property management for awhile. I’ll never forget the day after
often worked extra hours at home. Whether
he attended our first expo what he told me when I asked him if he
it was calling up top CEOs to inquire about
had enjoyed the event. He immediately exclaimed, “Oh yeah! I’m
advertising or walking our office dog, Scruffy,
learning a lot of new things that I never knew before!” For me that was the ultimate compliment. Introducing
Linda with Morgan Schaal.
new ideas and concepts to even a second-generation real estate pro made me so proud. Tragically losing someone close to you really puts life into perspective. I sure have been savoring every minute that I have been spending with my family and friends. The outpouring of sadness over Morgan’s premature death also has made me realize just how lucky I am to be working with people who are so caring. They say God chooses the good ones first, and that is certainly the case here. I know Morgan is in heaven being just the perfect sidekick as he was on Earth. We miss you, Morgan.
LindaPliagas
Morgan never complained about his duties. He was willing to do whatever it took to make sure the business ran smoothly, and that I was
Follow my industry updates and connect with me:
productive and happy. Morgan had worked in real estate most of his adult life; his parents are
Realty411Guide.com
PAGE 11 • 2016
reWEALTHmag.com
Make 2016 your best year ever!!!!
6 1 0 2 Y NUAR
JA
h h - 1 7t t 6 1 h an 15 t J r u o xt T Our Ne
“If you are looking for a true mentor, someone who guides you step by step through the House Flipping process, Anthony is thee go to guy. I have been burned by so called “real estate gurus” before and all they do is take your money in exchange for a few phone calls and books! The education that Anthony offers is invaluable. Any and all questions you have about the home flipping process WILL be answered realistically and honestly which to me speaks volumes about this man and his character. Hope to see you at the next bus tour!” Briana - Realtor, Keller Williams UCLA Athlete and Alumni
VE
I ECE L R R* L I E W UP ARG IGN E CH S TO PHON LE EOP BANK P R 20 WE ST FIR A PO
“This weekend changed our flipping business. Anthony has very high integrity, standards, and is very honest and forthright. He helped us one-on-one and is there whenever we call. He's become a wonderful partner and true , caring friend. We're in our 5th deal and growing. Everyone tells you to build a team, but Anthony actually connects you to the best people and networks. We saw several houses on the tour, learned a lot, found many colleagues for joint ventures and many resources we didn't realize were out there. Thank you Anthony!” Jan - Investor “I attended Anthony’s bus tour looking for a team that were investing in real estate today with current strategies that worked. What I found was just that and I picked way more information and surprising ly specific tips that I could implement right away!” Wilson - Investor “My husband and I took Anthony’s class last year. During the class we learned a lot about business and more on the bust tour. His group is very knowledgeable and helpful. I have a will recommend taking his class and learning.” Nili T. - Real Estate Agent “This Bus Tour Rocks!!! Your learn a lot from real world examples and walk through houses that Anthony is currently working, plus others that they passed on and they explain why they were not good deals. Must attend !!!!!!! James - Accountant
*must attend all 3 days
! P U S ’ F R U S
O S D N A ! S T N E ARE R Real Wealth Network founders, Rich and Kathy Fettke, help others create freedom with high cashflow rental properties.
N
early 18,000 investors in the Real Wealth Network have discovered a new approach to achieving wealth. What are they doing differently?
Realty411Guide.com
PAGE 15 • 2016
reWEALTHmag.com
Photography by Doug Ellis
K
athy Fettke and her husband, Rich, were shocked when Rich was diagnosed with melanoma 13 years ago. What do you do when you become keenly aware that you may not have much time? When it appears that mounting medical bills are inevitable? When you eagerly want to provide for your family? When every moment counts? Rich and Kathy embarked on an urgent mission to learn from the most successful,put their income on autopilot, and build real wealth, while freeing up as much time as possible to really enjoy every moment of life. They did it. As they began sharing the financial tools and tactics they discovered, the Real Wealth Network was born. THE PROOF IS IN THE DATA Today the Real Wealth Network boasts: • 12 years in business • 487 educational webinars given • 18,848 Real Wealth Network Members • $132M in assets acquired REAL WEALTH, BEYOND THE BALANCE SHEET… The Fettkes quickly learned from the self-made millionaires they interviewed that passive income investment in
Realty411Guide.com
real estate was the way to go. They took massive action, refinanced their home, and invested in 14 rental properties. Yet, the financial surplus this created still fails to compare with the real wealth that Kathy and Rich are experiencing in their lives now. Kathy explains, “We now know what it is like to be able to take a month off and travel to Europe with the family, attend our kid’s most important events, and to hit the beach to go surfing whenever the waves are good.” Now completely location independent the family is frequently able to jet off to their favorite vacation spots in “Malibu, California, Esterillos Oeste, Costa Rica, and the Swiss Alps.” It’s not just about gaining wealth, or fun in the sun, or on the slopes either. Their new found wealth and freedom is enabling Rich and Kathy to give more, share more, and follow their passion for helping others more than ever before too. Kathy tells Realty411 Magazine that her favorite charities and causes to support today include; “Operation Smile for saving children’s lives, Amor for building houses in Mexico, and Mentors International for helping families achieve sustainability.” Still, there is no denying that Real Wealth Network continues to be one of the most meaningful and impactful missions Kathy and Rich invest their time, hearts and souls into. This is their gift to others from what they have learned,
PAGE 16 • 2016
Continued on pg. 98
reWEALTHmag.com
Owns 13 properties in 2 states; $7,236 Monthly Net Cashflow
The Joy of Being
JOB OPTIONAL!
How Four Couples Replaced their Income through Passive Real Estate Investments
M
life on your terms. How do you achieve that goal? Well, there are many paths that lead to the same goal. Which path you choose depends on where you are today. Here’s how 4 different couples found their way to cash-flow heaven:
ost people think “flipping” houses is the way to build wealth in real estate. There are plenty of TV shows glorifying the process of fixing up old, beat up homes and selling them for big profits. But what if you don’t have the time or desire to get your hands dirty and work that hard? While flipping can be profitable when done right (and most people don’t get it right their first few times), it’s definitely not a passive investment. Flipping requires your effort and work, rather than letting your money work for you. Do you want to be job-optional? Add up your monthly expenses, and imagine how it would feel to have those expenses covered each month passively - without you having to trade your time for dollars. You wouldn’t have to toil for it. You could spend your time as you wish with the people you love. This is how I define Real Wealth – having both the time and money to live Realty411Guide.com
KIM BOSLER “About a year ago, I met with our financial planner and she asked about our goals. I said, “You know, we’ve raised a large family in California. We love to travel, and we love to do fun things. I’d like to continue doing that, but I’m just not quite sure how we can once we stop working. In fact, we don’t know if we’ll ever be able to retire!” She sat down with all of our charts and said, “My suggestion is investing in annuities, and safe bonds.” I looked at how much money our financial advisor wanted upfront and how little we’d actually receive in return. And we wouldn’t receive it until
PAGE 18 • 2016
we were 90! This was not a workable plan. Three weeks later I was at the gym jogging on the treadmill next to a friend who’s done a lot of real estate investing. I asked him how many properties he had now and he said, “Fourteen.” I said, “Are you kidding? How have you been so bullish in doing this? I mean, aren’t you afraid that it might not be the right timing or location or price or whatever?” “No, I’m really not,” he replied. “I’ve been really successful at it with the help of Real Wealth Network and Kathy Fettke’s podcast, The Real Wealth Show.” When I got home, I went right to the computer and joined Real Wealth Network and the Real Wealth Investor Academy. I immediately started learning so much and just loved it. I felt like it was exactly what I’d been waiting for. Since then I’ve made lots of friends through the network. I was introduced to top-notch, investment property providers, builders, lenders, and property managers - the very cream of the crop. I have not met one person that I just haven’t loved, and the numbers all made sense. The biggest problem was really whom to choose because there are so many good teams - really, really good people and good prices. We now have several properties
reWEALTHmag.com
and are still purchasing more. I can sleep at night now knowing that we have done our due diligence. My husband and I feel really good about the properties that we’ve purchased and our financial future.”
WAYNE AND DANELLE BRICE Wayne: I retired from the Navy after 20 years. When I received my retirement check, I learned that if I died, my wife wouldn’t get access to those funds! I literally couldn’t sleep at night knowing this. We got busy and searched on-line for solutions, and my wife discovered Real Wealth Network. After doing some due diligence, we went to some of their events. We met the property providers and it all looked good, so we purchased some of the rentals. Danelle: We followed the plan we developed with their investment counselors, and sure enough, I was able to accelerate the growth of my own retirement. In fact, a month ago I was actually able to retire before Wayne! This has freed up my time so that now I can focus on everything that’s important to us. Wayne: The amount of hours I’ve spent listening to information has been like getting a college education. Just recently we attended Real Wealth Network’s asset protection seminar. There were many experienced investors in the room, and I could tell by their questions that they were learning things they hadn’t known before - new, cutting edge information. They were
Own 16 properties in 2 states; $8,700 Monthly Net Cashflow
taking lots of notes! Life is messy, right? Stuff happens that you don’t expect, but every time, without exception, the property manager has done what has been actually to our benefit. Sure, it’s our capital that we’re putting down, but we’re getting more back than we’re giving. Danelle: If we went and did this on our own, we’d have to make a lot of mistakes, and that would have cost us our cash flow. PAUL AND CHERYL CHOATE
money and lost some money. So I made myself a promise. I wasn’t going to just buy the first thing I saw. I was going to do my homework. I came across Real Wealth Network and discovered it was just what I was looking for. Their motto is “No Back of the Room Bootcamp Seminars!” They want people investing in real estate, not spending money on expensive, outdated programs. They make their education very affordable – yet the quality is far better than those $20,000 bootcamps! During our strategy session with one Paul: We run an appliance repair busi- of their investment counselors, we took ness, and it makes us a living but no a look at the performance of our beach retirement. So I thought, “I’ve got to get house in North Carolina. We loved it some money saved. I can’t rely on my but we were losing about $1,200 a kids putting me up.” I started looking month. We decided to sell that home for investment groups. I had done some – even at a loss - at the worst possible investing on my own and made some time, but we still ended up with a chunk of money - about a $100,000. That money helped us buy four homes in Ohio. It went so well that we bought two more the next year. Cheryl: One of the things about Real Wealth Network is that they actually do the research on companies that they bring in. For me, the key thing was property management. That was key. Paul: We learned to use all the money we were making and put it towards paying off that first home loan. And we actually paid off that house in two years! Ohio may not be sexy, but the cash flow is!
Own 7 properties in 2 states; $3,008 Monthly Net Cashflow Realty411Guide.com
PAGE 19 • 2016
reWEALTHmag.com
> Strategies from Real Wealth Network
R
ich and Kathy Fettke, Co-Founders of Real Wealth Network, love to teach others how to acquire cash machines that pay double digit returns for life. They show their members how to tap into IRA’s, 401k’s, private money, 20+ conventional loans and 1031 exchanges to build impressive cash flowing real estate portfolios. There are unlimited ways to reach financial goals. “People just need the right education, information and team,” explains Kathy Fettke. Here are two ways you can learn more about wealth-building strategies: 1. Fettke’s book, “Retire Rich with Rentals, How to Enjoy on-Going Cash Flow from Real Estate so You Don’t
If we keep paying off loans, we’ll have six homes free & clear in seven years and can retire with the same lifestyle we have right now.
CLAUDIA & JULIAN FRASER Claudia: It’s been a lifesaver to find Kathy and her team at Real Wealth Network. Some say it’s all about location, location, location, but Kathy says it’s really about timing, timing, timing. She keeps her finger on the pulse and finds markets opening up before
Have to Work Forever,” can be purchased on Amazon.com 2. Join Real Wealth Network for free and get access to live events, weekly educational webinars, research on today’s best performing U.S. real estate markets, access to our list of the best turnkey rental property companies and property managers nationwide: www.RealWealthNetwork.com
anyone else does. Julian: We had a house in San Francisco. It was a rental property, and we knew we wanted to sell it, but we would have had to pay hefty capital gains tax. If we deferred the taxes through a 1031 exchange, we’d have to find $1.5M in replacement property. We had no idea how to do that! And there was no way to get the returns we wanted in California where we live. We heard Kathy on the radio and her message sounded too good to be
Own 13 properties in 3 states; $12,841 Monthly Net Cashflow
Realty411Guide.com
PAGE 20 • 2016
true, so we were cautious. We took our time, and joined the Real Wealth Investor Academy to learn. We followed the entire whole program, and learned a lot! Claudia: We went out and looked at properties with their teams in three different states they recommended. We loved what we saw, so it was just paperwork after that. We were able to sell that one San Francisco property exchange it tax-deferred into 20 properties. We increased our income six-fold! I know the old rule of thumb was “You should live within 30 miles of your rentals.” That’s not really necessary any more, thanks to modern technology. I also didn’t want to become a landlord so I needed great property management teams to take care of all the maintenance. They are great, and we don’t do a thing. We basically accept e-mails and direct deposits in a bank account. It can’t be any easier than that! Julian: We’ve tried to tell our friends, but they just can’t believe it’s that easy.
reWEALTHmag.com
Real Estate
C-Corporations Life Settlements Limited Partnerships
Tax Liens Tax Deeds Gas Oil Life Insurance Art Antiques
Gems
Precious Metals
S-Corporations Alcohol Rugs Metals
Coins
Private Equity
Real Estate Alternative Natural Resource Alternative Private Industry Alternative Prohibited Investment
Timber
LLCs
Private Lending
Road Map of Alternative Assets
Unit Investment Trusts
Private REITs
Trust Deeds
Private Debt Private Placements
Mortgage Notes Promissory Notes
Your partnership with Memphis Invest isn’t just about your short term financial success, it’s about your long term legacy. The goal of our turnkey process is to provide a reliable, consistent, repeatable experience for each of our clients. Each month we work with new clients to provide them with a successful path to owning single-family rental homes, and we work with existing clients continuing to build their portfolio. The Memphis Invest team handles the details here on the ground to ensure you have success as a real estate investor.
Call us today! 877-371-2625
Memphis • Dallas • Houston
Your financial future is already built. All you have to do is claim it. MemphisInvest.com
Money411 P R I VAT E
FALL ISSUE 2015
Here Comes the New Guard
B2R Finance Leads Lending Innovation
The Source for Real Estate Finance from Realty411guide.com Photograph from left to right: GREGOR WATSON, Chief Revenue Officer; DARREN THOMPSON, Chief Financial Officer; PAUL BEHM, Chief Information Officer; JASON HOGG, Chief Executive Officer; MATT MALANGA, Chief Marketing Officer; KATHARINE BRIGGS, Chief Operating Officer; JOHN BEACHAM, Chief Investment Officer
PIONEERS AND VISIONARIES
SELF-DIRECTED IRA REAL ESTATE INVESTING
etifg (866) 904-3336
Money411 P R I VAT E
CONTENTS
26 Turning REO Distress into Success 28 Here Comes the New Guard: B2R Finance Leads Lending Innovation 32 Meet Your Creative Finance Experts 33 Disclosing Risk in Funding 34 Celebrate Private Money411 Live 37 Meet the Money Minds 46 Benefits of Private Funding 59 Colony American Finance Wants to Jumpstart Portfolios
PRIVATE MONEY411
Cover: Photograph from Left to Right: Gregor Watson, Chief Revenue Officer; Darren Thompson, Chief Financial Officer; Paul Behm, Chief Information Officer; Jason Hogg, Chief Executive Officer; Matt Malanga, Chief Marketing Officer; Katharine Briggs, Chief Operating Officer; John Beacham, Chief Investment Officer
CONTACT US: 805.693.1497 or info@realty411guide.com
Below: Mingle with hundreds of active investors around the nation! Join us to celebrate our new issue. Private Money411 will be hosting industry gatherings with a focus on finance. For more information, see page 35.
Be social, look for Realty411 updates on Facebook, Twitter, LinkedIn, Pinterest, Google+
Photo left: Rebecca Rice, founder Rebecca Rice & Associates, pg. 32
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. 411 recommends readers seek the advice of a trusted attorney, broker, CPA and/or financial adviser before investing.
Join Us for a Finance Expo For information, see pg. 35
TURNING DISTRESS
Into Success! The New Book for Wealth Building Breakthroughs and Enhancing Income Investments.
F
uquan Bilal’s new groundbreaking book “Turning Distress into Success” reveals the wealth building and passive income generation secrets of some of the nation’s leading fund managers, and how individual investors can supercharge their investment performance with mortgage notes. “Turning Distress into Success” launched in November 2015, with fresh, actionable, transparent insights into how the truly smart money investors and financiers enjoy the best gains in the real estate and mortgage industry, while squashing risk. The book details how to make more money, while doing good, by disrupting the system, and becoming the bank. Beyond a manual for note investors to uncover better deals and scale their enterprises, this work peels back the current to the inner workings of the industry, and how all investors can negotiate better value investments, leverage more capital, and enjoy more of the rewards they have been seeking, without selling out their own values. WHAT’S INSIDE? • Fuquan Bilal’s personal story of the leap from real estate investor to lien-lord • The ‘Banks’ M.O.’ • Hacking the money to scale investments > Continued on pg. 51
Realty411Guide.com
PAGE 26 • 2016
Private Money411
THE LEADERS OF FINANCE With offices nationwide, B2R Finance is a financial technology company founded to address the unique needs and financial goals of single-family rental property investors. The company offers a full suite of lending solutions designed for investors at all stages of portfolio growth. Current products include fix and flip financing, bridge to term loans, portfolio rental loans for refinancing, the Entrepreneurial Lending Program and the Institutional Lending Program.
FINANCE
the New Guard
BY TIM HOUGHTEN
B2R Finance Leads Lending Innovation What The B2R Finance Lending Lab Is Developing Now…
W
hat is the world’s most innovative real estate financing laboratory cooking up next? B2R Finance CEO Jason Hogg has been shaking things up at one of the most exciting lenders we’ve seen emerge in the new real estate landscape. This is the innovative mortgage lender that brought us new residential buy to rent financing, the industry’s first multi-borrower securitization and was established by funds managed by Blackstone Tactical Opportunities. Jason shares what new loan products and tools are being rolled out, and how investors can stay ahead of the curve. THE WAYNE GRETZKY OF MORTGAGE LENDING “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” – Wayne Gretzky Gretzky developed a formidable reputation on the ice, by staying ahead of the game. B2R Finance appears to not only wield the physique of a legendary hockey player, but is driving the game with its speed skates on, and hitting the puck into the future. The firm has already been disrupting the mechanics of the industry, and paving the way with entrepreneurial lending products. But most don’t realize how much new technology and creative prob-
Realty411Guide.com
lem solving is set to reshape real estate investment. We got a peek inside the brain of the finance giant, and the 411 on what’s next in an exclusive interview with CEO Jason Hogg… DWELL FINANCE: THE NEW DEAL FOR INVESTORS B2R Finance just acquired Dwell Finance. The big move helps B2R dig deeper with an expanding local market presence and adds new investment loan products. Jason Hogg says the Dwell Finance acquisition is significant on three fronts: 1. New Loan Products for Investors Jason says it “augments the suite of products for customers with fix and flip, and bridge to term lending programs.” This includes a single credit line that facilitates rehabbing and reselling houses, acquiring multiple vacant properties for conversion to rentals, and portfolio refinance loans for buy and hold investors. 2. Integrating the Industry Not only does the Dwell move help connect the industry, but few realize that it adds to an expanding national footprint with physical regional offices to optimize service for borrowers. This facilitates “business relationships,” including face-to-face time, which Hogg says is “paramount” to the organization and developing new products. 3. New Technology Platform Dwell provides a simplified front end portal online. This delivers on what the CEO describes as “faster, low friction lending.” It’s not just about beauty in web design either. Behind the curtain is a unified >
PAGE 29 • 2016
Private Money411
Here Comes the New Guard, pg. 29
platform which enhances the lender– investor relationship. It even acts as a mobile dashboard for investors to interact and upload documents on the go, as well as monitoring their portfolio performance from anywhere in the world. This helps further build the relationship by tapping big and small data to provide users better solutions. This isn’t your creepy Facebook stalkingstyle relationship. It is about getting to know where you want to go, where your portfolio is in relation to that, the DNA of your local market, and how to connect the dots with great financing. THE BIG IDEA While some newer real estate investors were griping about access to inventory as we turned the corner into 2015, B2R Finance’s Dwell acquisition and investments in product development suggest bullishness on the US market’s future. We’ve already seen a significant spike in foreclosure activity and distressed properties being leaked onto the market in early 2015.
upgraded B2R-Dwell tool chest automates management to make investing “radically easier.” THE LENDING LAB So where does B2R come up with these innovative products, and what’s next? A peek inside the mortgage lender’s offices reveals that this company
says he loves listening in to the origination team in action in the Charlotte office, as well as sitting next to the due diligence staff clearing loans for funding. It is this connection to the daily mechanical challenges and client that will certainly help B2R retain an edge. The Idea Incubator is where team members get to pose their own suggestions for improving operations and delivering better solutions. The Lend-
A peek inside the mortgage lender’s offices reveals that this company is nothing like the stuffy, dark bankers’ corner offices of the past. This is more like Airbnb and Uber meets mortgage lending. Jason Hogg told Realty411 that the firm sees a “huge growth opportunity, worth billions of dollars.” In fact, Hogg says the firm has seen demand for investment property loans nearly double as of May 2015. B2R Finance’s CEO describes the opportunity as being “ideal for professionals like doctors, lawyers, dentists, and professors looking to achieve higher yields.” He points out the combination of yield and income from an appreciating asset as a far better option for these intelligent individual investors, in addition to professional investors and investment firms. He goes on to highlight how the newly
Realty411Guide.com
is nothing like the stuffy, dark bankers’ corner offices of the past. This is more like Airbnb and Uber meets mortgage lending. In addition to the Dwell Finance acquisition, Jason has headed up a three-pronged approach to driving entrepreneurship in mortgage lending in-house. This includes: 1. Active listening 2. The Idea Incubator 3. The Lending Lab There are few, if any other firms where you’ll catch executives, including the CEO, active in the trenches alongside their frontline team members. Hogg PAGE 30 • 2016
ing Lab is where Hogg has assembled a team of experts from a variety of other industries to pioneer new loan programs for investors. It is here that dynamic “agile development” happens and new pilot programs are launched for live testing with clients. The CEO says that one of the new game changing product tools coming out of this lab is harnessing the power of predicative analytics, and algorithmic approvals. By summer 2015, this is expected to be revealed in the form of ‘Instant Pre-Qualification’ using just seven fields of information. The result is to be an even more efContinued on pg. 51
Private Money411
PHILANTHROPY
Photo copyright: Alex Kalina
Which Would You Prefer: LIFETIME INCOME of $1,237,947 or $718,300?
C
haritable remainder unitrusts are frequently used as a real estate exit strategy. This popular technique can provide incredible tax savings and help you maximize your lifetime income.
Real Estate Exit Strategies
MADE SIMPLE
percentage of 5% for their unitrust. To be ultra conservative, we will assume that the trust only earns 5%. As you read in our example above, a charitable remainder trust or many individuals, real estate repfunded with real estate can resents a significant portion of their net be an excellent worth. Yet quite often it has dramatiexit strategy cally appreciated in value. Consider these for property potential benefits of using a charitable owners who remainder unitrust as your real estate exit are looking to strategy. cash in, want to bypass capital gains taxes, • Minimize or eliminate capital gains tax and desire to • Increase income maximize their • Lower income taxes lifetime income. • Re-position illiquid asset Compared • Create income stream for heirs to the most • Establish a meaningful legacy for charity common recommendation of just selling Here is a simple example in which the property and paying the taxes, this alternative can provide enormous the property owners increase their benefits! lifetime income from an estimated Here’s how it works. Once the char$718,300 to $1,237,947 (72%) using itable remainder trust is established, the leverage of a charitable remainit receives title to the appreciated real der unitrust: estate. Typically the trust then sells Malcolm and Margaret, age 72 the property and invests the sales and 68, own apartment units worth proceeds in a diversified portfolio that $1,000,000 that are fully depreciated will generate income for you and/or with a cost basis of $100,000. They other beneficiaries you select. Upon are in a 43% tax bracket (combined termination of the trust, any remaining federal and state) and a 33% capital assets must pass to a qualified charity gain tax bracket (combined federal or charities. Charitable trusts can be and state). Their joint life expectancy set up for a life, lives, and/or a term is 22 years. They establish a payout
F
Realty411Guide.com
PAGE 31 • 2016
By Cynthia Steiger, CSPG San Diego Rescue Mission
of years, not to exceed 20. Several generations of heirs may be included as beneficiaries. Once the trust sells the asset tax free, the entire proceeds (less costs of sale) are available to re-invest. If a charitable remainder trust is created during your lifetime (intervivos), you will also receive a charitable income tax deduction equal to the present value of the charity’s remainder interest in the trust - a major benefit to lower your federal and state income tax liabilities. This is usually a substantial amount and is tied to the value of the property, the estimated life expectancies of the beneficiaries, the payout rate of the trust and the federal mid-term rate when the trust is established. If the trust is created as part of your estate plan (testamentary), it will provide estate tax savings for taxable estates. You select a payout percentage when establishing the trust. A unitrust payout percentage must comply with three basic rules. The trust must pay a minimum of 5%, cannot exceed a maximum of 50%, and the payout percent must produce a charitable deduction of 10% or greater. Charitable remainder trusts are irrevocable. This means that once the trust is established and funded, the property cannot be returned to you. The trust must obtain a Tax ID number and file annual tax returns. The Continued on pg. 92
Private Money411
Meet Your Creative Financing Experts:
Rebecca Rice & Jim Beam
O
By Sandy Fox
ur 5th Annual Los Angeles Real Estate Investors’ Expo will feature some remarkable experts. On that day, we will spotlight Rebecca Rice and Jim Beam, industry leaders in a little-known financial area. They’ve perfected a way to turn a unique and specific kind of life insurance policy into a reservoir of money you can use to simplify your real estate investing. More than that, the strategy actually compounds and increases the ROI on your investments. A Financial Vehicle That Compounds Your Investments When you hear from Rice and Beam you’ll find a financial vehicle beyond what most investors use. Typically investors turn to cash, mortgages, private lending or a combination of the above. Each has its own costs and limitations. Beam, who started as a real estate investor in Florida said, “We worked awfully hard to make our money. And it seemed like someone was always standing there at the end of the day with their hand out to take our money. Closing costs, fees, taxes, interest rates.” He felt there had to be a better way. His search led him to Rice and her specially constructed policies. He learned a way that he could:
Learn more with Rebecca Rice’s book, “Multiply Your Wealth: Essential Secrets for Financial Freedom.” Contact her directly (501) 868-3434 or online at www. rebeccarice.net - You can connect with Jim Beam at (239) 591-3781 or email: jbeam@lifewayadvisors.com
• Keep his money safe and private • Borrow money at low cost or net-zero cost • Avoid credit checks and bank approval for loans • Gain tax-free retirement income • Loan his business money and save on taxes • Pay off debt faster • Create an emergency fund that earned interest four times higher than most banks pay He now helps other real estate investors learn how to take advantage of this system. This type of insurance poliContinued on pg. 40
Realty411Guide.com
PAGE 32 • 2016
Private Money411
Attracting Private Money DISCLOSING RISK An excerpt from “The Insider’s Guide to Attracting Private Money: Five Secrets to Fast, Unlimited Capital So You Can Save Money, Buy More Real Estate, & Build Wealth,” by Mark Hanf, President of Pacific Private Money.
W
hen you seek to attract capital from private investors, you need to disclose the risk involved in your proposed project. The reasons you need to do so are several, but one of them is that you are asking people to lend you a portion of their life savings, and they are entitled to know what happens to that money in the event that you exit the picture. The fifth question we answer in The Five Steps to Money Method™, “What happens if you disappear?” is asking much more than just “What happens if you get hit by a bus?” Disclosing risk is a very important yet often overlooked or ignored piece of the private lending equation. That is, risk disclosure is often overlooked or ignored by borrowers. Your prospective private lender, on the other hand, is absolutely thinking about the risks of investing with you whether you bring them up or not. And what that prospective lender wants to hear from you is, “What are the risks, and what are your plans if things go wrong?” You can answer this question by showing your lender how you are structuring your company and what measures you are taking to protect that individual’s investment. For example, who on your team is positioned to take over in the event that something happens to you? If you can address this question and others like it, you will show your potential lender that you have thought this through, and that you take the protection of his or her capital investment very seriously. The level of detail that you go into when disclosing risk is up to you (with sound advice from your real estate attorney). But the most basic risk disclosure essentially boils down to this message: YOUR INVESTOR COULD LOSE SOME OR ALL OF HIS OR HER MONEY.
That is why disclosing risk is such an important factor when you create your investment opportunity presentation. Addressing and disclosing risks in your presentation will make you look professional and thorough, just as the other important components that we have discussed so far in this book have done. Many real estate investors don’t want to include Realty411Guide.com
risk-factor disclosures in their presentations because they are afraid that they will scare away their prospective private lenders. They worry that if their potential lender understood the risks, then that person would decide not to invest with them. However, just sitting back and hoping that everything goes perfectly is not a strong strategy for success. The truth is that many real estate entrepreneurs have ended up in lawsuits because they failed to provide even the most basic disclosure of potential risks. You should strongly consider engaging a real estate attorney to advise you if you plan to raise capital from private individuals. I am not an attorney, and this does not constitute legal advice. That being said, I have attended numerous real estate conferences and seminars on the topic of private capital, and I have seen many examples of risk disclosures ranging from simple ones to explanations that were long and complicated. As an example, for my mortgage pool fund, I provide prospective investors with a memorandum that includes over twenty pages of risk-factor disclosures. The fact is that there are basic risks that you should be disclosing to your investors. Those disclosures should be included in any write-up you create for the purpose of raising capital from private individuals. You don’t disclose these risks to your potential investor to scare them away. You disclose them so that the investor can make an informed decision. Risk factors you might discuss
PAGE 33 • 2016
Continued on pg. 44
Private Money411
6
Advertise in Our NEW Issue!
Our NEW Private Money411 Issue will be celebrated with complimentary finance conferences on both coasts. Be sure to reserve your advertising space in our new supplement or sponsor our next conference. For information, contact Realty411 at 805.693.1497
California and New York
Direct Direct Your Your Future™ Future™ Direct Your Future™
Instant Instant Access Access To To Your Your IRA IRA Funds Funds Real estate transactions just got easier Instant Access To Your IRA Real estate transactions just gotFunds easier
Real estate transactions just got easier
The Entrust Group myDirection Visa® Prepaid Card The Entrust Group myDirection Visa® Prepaid Card The Entrust Group Visa® Prepaidpay Card Make faster realmyDirection estate investments,
Make faster real estate investments, pay property costs, and maintain your assets, Make faster realand estate investments, pay property costs, maintain your assets, all with the swipe of a card. property costs, and all with the swipe ofmaintain a card. your assets, all with the swipe of a card. Affordable, convenient, and easy to use, Affordable, convenient, and easy to use, The Entrust Group myDirection Visa® Prepaid Card gives you the freedom to Affordable, and easy to use, The Entrust convenient, Group myDirection Visa® Prepaid Card gives you the freedom to invest in what you want, when you want. The Entrust Group myDirection Visa® Prepaid Card gives you the freedom to invest in what you want, when you want. invest in what you want, when you want. TheEntrustGroup.com TheEntrustGroup.com TheEntrustGroup.com
Cards are issued by Citibank, N.A. pursuant to a license from Visa U.S.A. Inc. and managed by Citi Prepaid Services. This card can be used everywhere Visa debit cards are accepted. Full disclosures, terms and conditions apply. The Entrust Group an administrator for self-directed plans.Inc. Weand specialize in providing administrative services help investors diversifyVisa theirdebit retirement portfolios with alternative investments their choice. Cards are issued byisCitibank, N.A. pursuant to a licenseretirement from Visa U.S.A. managed by Citi Prepaid Services. This card to can be used everywhere cards are accepted. Full disclosures, terms andof conditions apply. © 2014. The Group EntrustisGroup, Inc. All Rights The Entrust an administrator for Reserved. self-directed retirement plans. We specialize in providing administrative services to help investors diversify their retirement portfolios with alternative investments of their choice. © 2014. The Entrust Group, Inc. All Rights Reserved. Cards are issued by Citibank, N.A. pursuant to a license from Visa U.S.A. Inc. and managed by Citi Prepaid Services. This card can be used everywhere Visa debit cards are accepted. Full disclosures, terms and conditions apply. The Entrust Group is an administrator for self-directed retirement plans. We specialize in providing administrative services to help investors diversify their retirement portfolios with alternative investments of their choice. © 2014. The Entrust Group, Inc. All Rights Reserved.
Two of the Best Tactical Minds in Investment Property Financing Team Up By Tim Houghten
The new Bighaus-Chapman mortgage alliance offers a new capital partner for real estate investors navigating financial purgatory.
STEVE BIGHAUS (IN WHITE) AND AARON CHAPMAN (IN BLACK) EXPLAIN THEIR VIEWS ON FINANCE.
Merging two SNMC branches together, these mortgage masters offer a stark contrast that stands out on the investment property financing landscape. This strategic alliance unites two of the best tactical minds currently available in the mortgage business, with the backing of one of the largest and fastest-growing mortgage lenders in the U.S. And, intelligent investors are finding an interesting match in leveraging a business partnership that packs a ton of value. YOUR GUIDES THROUGH FINANCIAL PURGATORY Steve Bighaus, Security National Mortgage Company Branch Manager, says that the new underwriting inquisition is here to stay. And it could get worse! Whether it is new appraisal systems that have been created to generate additional revenues for other providers, or demanding a written, verified, and quality controlled ‘confession’ of your life’s deeds, there is a new status quo in underwriting. While in some ways it has become easier to qualify for
Realty411Guide.com
a loan on the surface, getting from loan application to closing may take an army of 300 Spartans guiding you home with sharp spears and oversized shields. So while CoreLogic reports there are still some almost
PAGE 37 • 2016
15 million underwater and “under-equitied” homes in America, in addition to a fresh batch of foreclosures in 2015, real estate investors still need a fearless > Continued on pg. 39
Private Money411
It’s about time we show you
A REAL HERO
Close your loan in as little as 30 days! Steve Bighaus has over 24 years experience in the mortgage industry. He maintains a focus on servicing the real-estate investor by offering aggressive financing options and resources for buyers interested in purchasing or refinancing their investment property. By concentrating on investment properties and the financing that comes with them, Steve is recognized nationally as an industry expert. The knowledge that he has enables him to find financing for people even when they have had difficulty elsewhere.
Contact Steve Bighaus Senior Loan Officer 206.930.1801
Attention Investors: Pre-Qualify Today!
steve.bighaus@snmc.com NMLS#: 112825 This is not a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant. Security National Mortgage Co. is an Equal Opportunity Lender.
NMLS# 3116
Two of the Best Tactical Minds, pg. 37
and wise guide to unlock the potential out there, and optimize financial leverage. THIS IS WHERE STEVE BIGHAUS AND AARON CHAPMAN COME IN... Merging two SNMC branches together these mortgage masters offer a stark contrast, one that stands out on the investment property financing landscape. They are instantly recognizable, have a very unique style, and yet perhaps most notable is the fact that they have been in the mortgage business for longer than anyone else you’ll probably ever meet. They have both been in the financial industry since well before 2000, which gives them a veritably unrivaled edge in experience in an industry where it is hard to meet anyone that started before 2008. But it is often their mental agility, and refreshing commitment as long-term business partners to their investor clients that make them highly-prized assets. THE MINDS BEHIND THE MONEY To not just survive this long in the mortgage industry, but thrive and grow, and have investor clients coming back for dozens of transactions as they grow their income property portfolios, requires a mind that plays on a whole other level than the thousands that have fallen into the abyss. In fact, there is no question that more real estate investors would have survived and thrived in the last couple of decades if they had paid more attention to how those they chose to do business with kept themselves sharp. Steve Bighaus, who runs operations in Washington state, says he is religious about hitting the gym, as well expanding his love of music from the drums to learning the vibraphone, and experimenting with jazz improvisation. Aaron Chapman who heads up the Mesa, Ariz., office survived a crushing motorcycle accident in 2008, yet continues to volunteer with the local Sheriff’s Office Volunteer rescue unit. His specialties include technical-high angle, off-road rescue & extrication, as well as being a member of their elite six-man helicopter rappel team. These are battle-hardened warrior financiers and tacticians that know how to help investors strategize to stay ahead of the game, assess and successfully navigate calculated risks, and win the long race. Realty411Guide.com
THE VALUE OF THESE CAPITAL PARTNERS The Bighaus-Chapman mortgage team offers intelligent property investors a specialized team to aid in optimizing and growing their portfolios, to hit their individual goals, no matter whether that is having unlimited money to make it rain, or fulfilling philanthropic aspirations. Aaron explains: “The business is evolving to need specialists. If one hits their head and has complications as a result, they don’t have the family general practitioner perform brain surgery in his office. Their situation requires a specialist. Not just any specialist, but they want the best. Investment lending is no different. Why go to a general lender who offers any kind of program available when there are specialists in what they need?” Steve Bighaus describes the mortgage company coalition as a holistic service that aids investors in getting from where they are, to where they want to go, and incorporating all of their real estate financing from residences to second homes, to rental properties, and even commercial properties. Specifically this financial duo act almost as business partners or your CFO, only without having to take on the burden of a giant salary or having to give up a share of your investment portfolio. They provide assistance in financial tactics, the heavy lifting and manpower to get it done, and the capital. Investors just pay the interest and borrowing costs.
Discover more about this dynamic team and the investment property loans offered, visit online at http:// BighausChapman.com.
PAGE 39 • 2016
Private Money411
Meet Your Creative Financing Experts, pg. 32
to become the top life producer. She is also one of only three policy agents endorsed by the Palm Beach Letter, a financial newsletter. Because she has written thousands of policies—and uses many of them herself — she knows every nuance of how to structure it to benefit you.
cy is not new. It’s has been around for centuries and is tried and tested. Currently banks, businesses, and high net worth individuals use it to preserve and grow their money. But Rice and Beam offer a unique structure that makes it a powerful tool for even the small real estate investor.
YOU NEED AN EXPERT
SHE BROKE THE GLASS CEILING Rice discovered Nelson Nash’s book, “Becoming Your Own Banker,” over 25 years ago. She recognized the revolutionary technique and became a protégé of Nash, building on his philosophy with concrete action plans. It became her passion to help as many people as possible. “I help people see how money really works in the economy. It’s often not the way you think it does,” Rice says. “I love to show my clients how to reduce their debt in an extremely short period of time — faster than they ever thought possible.” Through the years she’s structured Living Benefit policies for people from 21 to 93 years old. “Each is unique,” Rice says. “I’ve helped people profit who could only start with $100 a month. And I’ve worked with people who wanted to contribute a million dollars a year. Whatever your income or investment goals, you can use this to take control of your money and grow it faster and safer.” Rice’s passion and dedication to her clients made her extremely successful. She became the first woman to be the top-performing agent at Mutual Trust. Then she went on to break the glass ceiling at Massachusetts Mutual as the first woman in its 170-year history
Realty411Guide.com
On the owner’s side, a policy looks deceptively simple and is easy to use. But the creative side takes an act of genius to give you all the benefits and advantages necessary to use it effectively in your business and investing. Rice always learns what her client’s goals are. Then she tailors a Living Benefits policy specifically to meet those goals. Some want a pool of money to run their business. Others need free access to money for real estate investing or hard money lending. And some have their top goal to safeguard their wealth and transfer it to the next generation. “It’s possible to accomplish all those goals without invading lifestyle money,” Rice says. Lifestyle money is what you live on after paying your bills and Uncle Sam. Rice’s brilliance is that she frees up money for you to invest from other sources. Often it’s from the debt payments you are already making. PUTTING YOUR POLICY TO WORK FOR YOU “The simplest way to use your Living Benefits policy is with hard money lending,” Beam says. “There are hundreds and hundreds of folks out there who are in need of hard money lending.” Beam works through organizations that send out leads for people who want to borrow the amount of money you have to invest — whether that’s $10,000 or $150,000 or more. And the Living Benefits policy creates a vehicle to amplify the investment. “You borrow against your policy at 5% and you put it out on the street to go to work at 10% or 12% plus points,” Beam says. “But you’re still earning 5% on those same dollars within in your policy! Wow, what a platform to work from!” Beam’s strength is that he can guide real estate investors in the best ways to take advantage of this platform for their specific goals. There are a number of ways to take advantage of the policy. One of their clients buys HUD houses to rehab and rent. Although her Living Benefits policy is only a few years old, she’s been able to use money from her policy to cut costs and increase returns. • Used for a down payment for a conventional loan and
PAGE 40 • 2016
Private Money411
saved the cost of mortgage insurance • Used for repair costs on the house and avoided the expense and effort of a construction loan • Kept an “emergency fund” that earns 5% or so on that money instead of a bank’s pitiful near zero rate • Used a regional bank for a 5 year balloon loan with much lower loan origination costs and interest rates. She can do that because this system pays off the bank loan in just a few years—well before the balloon kicks in and interest rates rise The client says, “The best part is that I end up with a house AND all the money that would have gone to mortgage payments!” Can This Work For You? You can learn more about investing in real estate using a Living Benefits policy when you attend national Realty411 events where Rice and Beam will be featured speakers. Plus, look for future issues with articles explaining in more depth how to increase your real estate returns using a Living Benefit policy.
REIWealthmag.com Reach A Qualified Audience with a Proven Leader - Great Ad Rates - Global Readership
Unsecured Business Funding for
REAL ESTATE
& START UPs!
Unsecured funding for rehabs, rentals, business expenses - START UPS OK - 0% for the first year program requires 680 Fico. We offer solutions for bad credit too. Call us for more information.
(925) 708-0131 TheRealProEnterprises.com
The
MOST INTERESTING MAN in
HARD MONEY Meet Leonard Rosen, the CEO of Pitbull Conference as well as several other leading experts in the private lending industry this coming March in Florida.
PITBULL’S 39TH NATIONAL
HARD MONEY CONFERENCE Monday March 7, 2016
Harbor Beach Marriott
Ft Lauderdale
A one day event for...
Real Estate Brokers, Lenders & Investors
Learn how to start & manage your own real estate fund Learn how to create alternate streams of revenue Learn how to raise capital Network with lenders actively deploying capital
858-736-7788
www.pitbullconference.com
FINANCING SOLUTIONS FOR RESIDENTIAL REAL ESTATE INVESTORS
INVESTORS:
We Provide You with Financing Options You Can Count On. Investor Loans on Residential Assets Loans from $500K
to $50M
1 - 4 Family, Town Home, Condo & Small Multi-Family Properties 5 & 10 Year Term Loan Options 12 & 18 Month Credit Line Options We Finance Up To 80% of Cost
NATIONWIDE
Experienced
Efficient
Certain
We’ve purchased, rented and financed thousands of investment properties so we know your business.
Our streamlined closing process allows you to focus on your business, not our paperwork.
We provide funds when you need them most.
Acquisition Lines • Long-Term Debt for Portfolios • Non-Recourse Loans
Contact Us Today!
844.CAF.CAF1
Visit us online at ColonyAmericanFinance.com
Attracting Private Money, Disclosing Risk, pg. 33
could include things such as: • changes in the real estate market • cash flow problems • conflicts of interest • an unproven real estate investing company (if you’ve never done a deal before) CHANGES IN THE REAL ESTATE MARKET Your opportunity presentation is based on a set of assumptions. Those assumptions include things like market demand, potential market appreciation, and an estimate of the increase in value as a result of your planned improvements.
guarantee that the results you predict will be realized. CASH FLOW PROBLEMS You have proposed a budget and a spreadsheet to your lender that shows your sources and uses of funds. But what if you come across significant and unexpected cost increases? Do you have the ability to cover them? Typically, your money partner will not be under any obligation to fund additional costs beyond the agreed-upon budget unless you bring this up in your written agreement beforehand. If the project stops as a result of running out of cash, you could be faced with mounting costs and declining profits as time goes on.
However, the real estate market is subject to cycles that can affect the CONFLICTS OF INTEREST marketability, pricing, and days-onmarket estimate of your project. Real Are you planning to dedicate 100 perestate can and does decline in value as cent of your time to this one project a result of certain market forces. Riswith your prospective money partner? ing interest rates, job growth, joblessOr do you leader have other for projects or work ness,We’re new inventory, and other factors the Northern California loans obligations that might be construed as can contribute to a drop in demand real estate “conflicts of interest”? You can make and to prices for real estate ininvestors. a given a statement in your presentation that market. Your prediction of how well reliable, and never change gives yourwe lender notice that, while yourWe’re proposed fast, project we’re will do should you are dedicated to the success of pricing on you mid-stream. be based on a careful review of local this endeavor, you are nonetheless market conditions, but you cannot free to pursue other business ventures or obligations, as well. UNPROVEN REAL ESTATE INVESTING COMPANY If you are new to real estate investing or if you have formed a new company to pursue real estate investments, you may not have a track record of success. In that case, your business model is unproven. Changes in the market, cash flow problems, conflicts of interest, and an unproven realtoestate Learn how findcompany are just a few examples of the risks that you your own private may want to disclose to your lender. lenders! Get your There are many others that you can
copy of our new book by going to PAGE 44 • 2016 AttractingPrivateMoneyBook.com
identify and include in your proposal to give your investor a complete picture of what the project will entail. A qualified real estate attorney is an integral component to your team and should be consulted to assist you in drafting an appropriate disclosure statement. I have been telling you to always put the best interests of your private lender first, but the fact of the matter is that a primary purpose of your disclosure statement is to protect you in case your lender chooses to sue you. If you can demonstrate that you disclosed material risks to your private lender before that individual invested with you, should things not work out as planned, you will be much better protected in a court of law. Excerpted from the book “The Insider’s Guide to Attracting Private Money” by Mark Hanf, available at www.AttractingPrivateMoneyBook. com. Mark is president of Pacific Private Money Inc., a California-based hard money lender who has raised over $200 million in private capital since 2009. Private Money411
The Benefits of Using
G
a Private Lender
etting started as a new real estate investor or to bring your existing business to the next level of success will generally require investment capital. More and more investors are taking advantage of using private lenders to achieve their business goals. The advantages of using a private lender over conventional lenders or hard money lenders can be summarized as follows: • You may be able to agree to terms more suitable to you. • You may be able to finance 100% of the project plus expenses (many traditional banks and lenders will require
I do get some push-back from people when I suggest that they approach family and friends for investment capital because some feel uneasy asking them for money and the possible implications if things don’t work out exactly to plan. Just keep this in mind, you are asking them to participate in a business opportunity, not a hand out. Furthermore, many of these people are already taking some form of investment risk; so why not in you?
you to have some “skin in the game”). • Less underwriting scrutiny of you and the particular project. • Quicker response. • Avoid the oversight that many lenders are now putting in place during the life cycle of the project. • Private lenders may not require you to have any documented experience.
Realty411Guide.com
Finding Your Private Lenders Once you have decided that using a private lender is the right and perhaps the only possible direction for you to take, it is now time to explore your opportunities of locating people who may be interested in funding your projects. Generally, a great place to start looking is among your personal and business circle of influence. This may include the following: • Family • Friends • Co-workers • Acquaintances • Local real estate groups
Keep it Legal and Get it Down on Paper Just because using a private lender may be a simpler and less formal pro
PAGE 46 • 2016
By Carl Schiovone cess than what you would typically experience with either a hard money lender or conventional lender, this does not mean you will forgo all of the required documents and due diligence that will protect both you and your private lenders. Make sure to discuss the terms and conditions of the private loan with your attorney and have them prepare all of the necessary documents. It is always advisable to encourage your lender to also have their attorney review the documents. Positioning Yourself as a Solid Borrower Even if you personally know the people who will be providing the capital to fund your project, this does not take you off the hook from properly preparing yourself as a reputable borrower. There are some characteristics that your lenders will be expecting from you and include the following: Knowledge of the Business Even as a new investor, it will be critical for you to have the basic skill set in order to effectively analyze opportunities that may come your way. In the excitement of the hunt for your project, you will need to know when it is time to move forward or pass on an opportunity. In fact, as part of your discussions with your lender, you should illustrate why the project is a solid deal by sharing the assumptions and results you have made. In addition, you should >
Private Money411
• Residential • Raw Land • Auctions • Leveraged
• Commercial • Agriculture • Options • Short Sales
• Fix and Flip • Fix and Hold • Trust Deeds • Mineral Rights
Put your Real Estate Expertise to work for your IRA
Traditional, Roth, SEP, SIMPLE, HSA, Individual 401(k) Open an Account Online
View Educational IRA Videos
Schedule a Free Consultation
Download our Real Estate IRA Info Packet
Free Online Bill Pay Personalized Customer Service Online account access with myDirection®
www.NewDirectionIRA.com • 1-877-742-1270 • info@ndira.com • 1070 W Century Dr, Ste 101 Louisville, CO 80027
“
I can’t tell you how many times I have seen this play out with my students. Properly documenting your past performance in your Credibility Report will go a long way in securing new lenders.
pro-actively identify the barriers and risks you may face and how you plan on mitigating them. Remember, by identifying this upfront you will go a long way. Keep in mind that most lenders (or their attorney) will inquire about risks anyway, and it looks much better coming from you without being asked. As part of your business plan, you should have identified all skill set shortfalls you may have and include a specific action plan on overcoming the deficiency. If you are a new investor with no or limited experience, it is advisable to have someone who can shadow your decisions and path and guide you along the way. As a performance coach, all too often I see new investors jumping into their first project without the proper skill foundation and many experience some challenges that could have been prevented. Transparency If there is one thing that can ruin any business relationship is holding back information that is critical to your lender. With real estate investing, things may not always go to plan. However, what is important here is how and when you communicate when there are challenges. Always share information that affects your lenders as soon as possible and during that discussion, communicate possible ways to get back on track and avoid a future re-occurrence. Credibility In order for your business to grow and continue to have your lenders coming Realty411Guide.com
back for more opportunities, it will be critical to leverage off of the success of prior projects. Once they see what you can do and have performed as planned, you will find that the people around you will be literally throwing more money your way. In addition, they will be ask-
ing if they can bring their family and friends along as well. Talk about free marketing, it doesn’t get any better than that! I can’t tell you how many times I have seen this play out with my students. Properly documenting your past performance in your credibility report will go a long way in securing new lenders. As a great way to demonstrate your performance is to invite your lenders and potential new lenders to your projects both before you get started with the project and after it is completed. During this time you can share with them both the initial expectations and how the final results compared. Just think how powerful this can be. During this exchange, if the specific performance you were planning was not comPAGE 48 • 2016
“
pletely achieved, you should elaborate on the root cause. Evaluating lessons learned can be a great way to mitigating future errors on the next project. Have an Exit Strategy As part of your overall project or business plan, you may need to consider your exit strategy from the private lender in advance of moving forward with them. There are generally a few options to consider when exiting private money that include: • Selling the property upon completion of a renovation, the lender will be paid from the proceeds (this is common with a rehab and flip project). • Refinance the property with a cash out conventional mortgage (this is very common on a hold-to-rent property). • Repaying the loan from the sale of other assets or investment sources. In conclusion, building a solid base of reliable private lenders will help set the stage for you to respond very quickly to the opportunities presented, This can clearly be the path for you to scale the business as large as you want! Once the people in your network actually see that you have the bandwidth to move forward they will bring you even more opportunities. Carl Schiovone is a Performance Coach with over 33 years of experience and is President of Carl Schiovone & Associates Real Estate Coaching Inc. In addition Carl is the President of East Coast Real Estate Investors Association. For information, visit http://EastCoastREIA. net or http://CarlSchiovone.com Private Money411
LENDING
Colony American Finance Wants to Jumpstart Your SFR Portfolio D
o you think that you might have missed the boat to invest in single-family rental homes? The answer is a resounding NO! We all remember 2005-2007 when it seemed that investors couldn’t make a mistake in the residential fix and flip market. Investors with little experience were able to outbid the competition, slap some minor paint and carpet improvements and then sell their properties for incredible returns. But then the bubble burst and many investors were left with homes that couldn’t be sold or in some cases, even given away. They had two choices: Give up the properties through foreclosure or become a landlord. RENTAL DEMAND OUTPACES EXPECTATIONS Statistics show that nearly 35% of Americans now rent instead of own. Drill further into the statistics and you’ll find that 35% of renters choose single-family homes and 19% choose duplexes, triplexes or fourplexes. With these two categories encompassing 54% of all rental choices, it makes perfect sense that investors are looking to 1-4 unit properties instead of owning larger multi-family apartment-style buildings; 1-4 unit properties have a lower price point, the ownership risk is spread out among multiple structures and the overall expense ratio is lower. Renters in single family housing tend to pay their own utilities, maintain the landscaping themselves and have access to municipal water/sewer/garbage at a much lower rate than through private service. Rental demand is projected to change significantly over the next ten years, primarily driven by the changing nature of the household. Baby boomers are moving in with their children or into senior housing and millennials are favoring renting over owning because of its flexibility and lower commitment level. Being well versed in the changing market is the key to having a profitable portfolio. Also noteworthy is that there are an estimated 14 million rental homes owned by non-institutional investors in the United States – most of which are owned free and clear. Quick math: Using 14 million rental homes at an average value of $100,000 each, that’s potentially $1.4 trillion in new loans that can be originated and re-invested into the market. Colony American Finance has multiple financing opRealty411Guide.com
By Jennifer Goralski, Senior Vice President Originations
tions available so you can access your portfolio’s equity and quickly put it to work to buy additional properties, invest in your children’s education, or simply replenish your cash position. KNOWLEDGE IS POWER The savviest investor will do three things: research, research and more research. Mortgage brokers and real estate brokers have invaluable information such as market trends and vacancy rates as well as access to properties that might not be listed for sale. But it’s significantly more critical for investors to have access to capital: Both liquid cash and innovative financing. No longer is the SFR rental market monopolized by private money loans with steep interest rates and fees or the more traditional Fannie/Freddie product that caps out at 5-10 properties. Colony American Finance provides non-recourse term loans for stabilized portfolios and fix and flip lines of credit for acquisition funding. FIX/FLIP LINES OF CREDIT If you want to grow your portfolio or perhaps don’t yet own a rental portfolio, a line of credit is definitely the right choice. Colony American Finance offers two different line of credit options depending on investor experience and short-term/long-term goals. Our Entrepreneurial Line of Credit is a non-revolving, declining line designed for the investor who does less
PAGE 49 • 2016
Continued on pg. 50
Private Money411
Jumpstart Your SFR Portfolio, pg. 49
than 20 fix/flip projects per year and only within the 1-4 unit residential arena. Line amounts start at $500,000 and go upwards of $5,000,000. Borrowers have 12 months to utilize the proceeds and 12 months to pay back each draw. This loan has no prepayment penalties. For the more active investor, our Institutional Line of Credit offers additional flexibility as it allows for both residential 1-4 unit properties and commercial properties up to 20 units. The Institutional Line of Credit is also a revolving line, meaning you can access the funds multiple times. Line amounts start at $3,000,000 and can go as high as $50,000,000. Borrowers have 12 months to access the proceeds and typically 9 months to repay each draw. This is a non-recourse loan and has no prepayment penalties. Also important to note is that you can utilize either the Entrepreneurial or Institutional Line of Credit to build your own personal rental portfolio. Once you have completed the renovations on your fix/flip properties, you can look to refinance your holdings into one of Colony American Finance’s term loans. NON-RECOURSE TERM LOAN OPTIONS If your SFR rental portfolio has five or more properties, Colony American Finance is your option for attractive financing options. Our loans are underwritten like a commercial loan, which means no more debt-toincome ratios hurting you when qualifying. Rather, your portfolio is underwritten on the assets and the cash flow generated from those assets. Plus, because we lend across the U.S., a single term loan can be made on portfolios with holdings in multiple states. Our rates are competitive with traditional FNMA loans, are amortized over 30 years and can be fixed for five or ten years. Our loan amounts start at $500,000 and can go up to $100 million – and almost all term loans are available on a non-recourse basis. Important too, is that borrowers can have multiple tranches of loans to facilitate estate planning or property management issues.
Whatever your investment style, we have the capital for either strategy. It’s an exciting time to be an investor; trends indicate that the rental market will continue to improve over the next decade. Colony American Finance is ready to provide meaningful and cost effective financing options for your portfolio. Colony American Finance (www.colonyamericanfinance. com) is the leading provider of low cost, non-recourse revolving bridge & permanent mortgage financing for owners of single family rental portfolios. Our affiliate, Colony American Homes, owns more than 22,000 homes across the United States, so we approach lending from the perspective of the landlord-investor. Both companies are owned and controlled by Colony Capital LLC, a real estate investment firm with $54 billion invested, including a publicly-traded mortgage REIT. When you work with Colony American Finance, you are talking to a professional, experienced lender who offers competitive rates, knows how to underwrite and get your deals funded. Please call 1844.CAF-CAF1 and visit us at http://www.colonyamericanfinance.com to refinance your rental portfolio or leverage your buying power with a credit line. We have the capital for either strategy.
For two years, REI Wealth Monthly has been delivering vital industry news, tips and insider secrets to success.
REIWealthmag.com
REGIONAL STRATEGIES Auction.com recently released data that showed investors are favoring buy-and-hold strategies over fix/ flip on a nationwide basis, but that investor intent varies between online/offline investors, regions, and property prices. Midwesterners and Southerners are more likely to buy and hold whereas those in the Northeast are more likely to fix/flip. Investors in the western states are evenly split between fix/flip and buy/hold strategies.
Realty411Guide.com
PAGE 50 • 2016
Private Money411
Here Comes the New Guard: B2R Finance Leads Lending Innovation, pg. 30
cient lending platform which provides low rates and speed in funding, requiring the least amount of data, while retaining sound credit decisions. Beyond the sunnier math of using single credit lines to flip or rehab and manage multiple properties, this creates a more turnkey financing solution so that investors can redirect their time to growing their portfolios versus managing them.
the best net returns and most time to enjoy their gains from the rest. Whomever investors have been using for leverage until now, it is worth keeping an eye on what’s coming out of the B2R Finance Lending Lab. For more insight into the minds and intelligence being injected into this mortgage maverick’s DNA, check out B2RFinance.com and DwellFinance.com.
SCALING YOUR PORTFOLIO WITH LESS FRICTION Both passive investors and real estate entrepreneurs will find loan solutions like these provide the framework needed to scale their portfolios while the market is ripest. Looking forward, it is finance relationships and the operational edge which will divide those with
The NEW Rules of Fundraising, pg. 26
but with a new twist that make them accessible to regular individual investors.
• How to start your own fund • 7 actionable exit strategies
GET THE KEYS TO YOUR SUCCESS FOR 2016 AND BEYOND, NOW…
• How and where to find highly profitable notes and REOs
Whether wanting to supercharge investments to finish this year strong, simply enhance your understanding of the industry to be better at what you do now, or craving new tools and thought leadership to plow a higher trajectory in 2016, grab your copy of “Turning Distress into Success” today, which is available online at Amazon.com.
• The art of negotiating with banks • Reducing risk in investing • How to operate at 100% IS THIS BOOK IS FOR YOU?
-Book review by editorial staff.
Whether you’ve been timing the markets to get in and invest in the real estate world, already have a portfolio of rentals, have been fixing and flipping houses, or are just looking to diversify from the stock market, this book is for you. It’s about making more money, augmenting current success by taking the next step up, and investing in line with what’s most important in life. Real estate reporter and mortgage analyst, Tim Houghten, says, “Must read! In this book Fuquan spills the real deal, in an honest look behind our mortgage banking system, how to profit from others’ failure to serve investors and Realty411Guide.com
NEW ISSUE! borrowers well, and how to make money, while providing homeowners a desperately needed lifeline.” ABOUT THE AUTHOR When the world got served the most catastrophic financial and real estate crisis in almost 100 years Fuquan Bilal pioneered a way to turn that distress into success. Inside this book you’ll discover the master-plan to sustainable wealth building and passive income strategies that have been leveraged by the ultra-wealthy few for generations,
PAGE 51 • 2016
Realty411guide.com/
CashFlow-Express
Private Money411
Way of the
By Tim Houghten
Real Estate
WARRIOR
What really propels the financial success of real estate leaders that outlast and outperform the crowd?
ABOUT SENSEI GILLILAND
H
ow to get, and keep, more of what you want in life and finances, through real estate, sustainably…
Founder of Black Belt Investors; Sensei Gilliland has been featured on the cover of Real Estate Wealth Magazine, hosts ‘The West’s Top Ranked Real Estate Investors’ Club’ – 12 ROUNDS, and has engineered several highly popular trademarked real estate investment systems. Sensei is the go-to source for serious investors and entrepreneurs seeking extremely effective, no holds barred training, investment properties and funding.
WAY OF THE WARRIOR A real estate warrior isn’t just someone charging ahead determined to achieve ‘rhinoceros success’ at any cost. In fact, the true definition of ‘warrior’ refers more to experience than anything else. Anyone that is even vaguely familiar with the explosion of MMA and the UFC, knows two things. First is that what was once a mixed martial arts competition between different styles and strategies has evolved to where virtually every fighter now trains in a variety of arts in order to be able to survive and win. It’s about making the right moves at the right time. Second; you can’t just be great at offense or defense. Anyone can score a one hit wonder, once. But to win over the long run, you need both. You’ve got to be covered from the hits, and have good technique and know when to strike too. That’s why football teams have both an offense and defense.
Contact information: Black Belt Investors 951.280.1900 or www. BlackBeltInvestors.com
ROLLING WITH THE PUNCHES You’ve got to have stamina, and to be
Realty411Guide.com
PAGE 52 • 2016
able to brush off some hits. That’s true of real estate, personal finance, life, martial arts, and boxing. Just ask Mohammed Ali. This year I’m celebrating 27 years as a martial arts business owner, and 20 years as a real estate business owner. It’s been a couple decades of making great strides in income, wealth building, and being able to share those successes with others. What I haven’t talked about much before is the blows. Not the market cycles and changes. I’ve managed to weather those quite well. But those we all face such as health challenges. Despite decades of fitness and training even I have found myself out of the office due to unexpected medical issues in the past. We all get KO’d by the flu now and again, but I’ve also had to undergo ankle surgeries, and deal with eyesight issues, and more. This year I was hospitalized with meningitis. That meant weeks in bed. Some people never survive that. For the average individual that time off and the medical bills can mean the end of a career and bankruptcy. I made it. Everything continued to keep moving like clockwork, and I’m confident that issues like these won’t take me down thanks to my business, the Ultimate Cash
reWEALTHmag.com
lump sum payouts from wholesaling for those big bills and acquiring more rental properties. All of this is insulated with smart (and legal) tax umbrellas, and has more literal concrete protection than a black belt can break through with a blow. Top that off with a well selected champion portfolio of real estate assets which is set to deliver robust appreciation over the next few years, and it checks all the boxes. That’s the way that I ensure my finances are strong and fighting fit, no matter what I’m up against.
Machine, and the key part passive income real estate plays in that. In fact, even though I thrive on being in action, if I have to, I can kick back and catch an old MMA fight, or even an extended power nap, while in recovery mode. All without missing a check. YOU CAN’T JUST SURVIVE ON THE SIDELINES Today millions of Americans are facing much bigger financial challenges than I have every day. It’s not just about effective defense against those small bumps and bruises that can come at any time. It is career ending injuries, the prospect of trying to catch up with passive income and retirement savings, and having a backup in case of a career field falling apart or being replaced by technology and new regulations. You’ve got to be proactive, and have good defense. But you aren’t going to score any wins or defend what you’ve won by sitting in the bleachers. You can’t get any hits if you aren’t even in the batter’s box. But I don’t even have to tell you that stocks are scary right now, and that oil and gas, and gold offer nowhere to hide. And nor do bank savings accounts, CDs, or under the mattress.
KNOCKING OUT THE CLICHÉS OF REAL ESTATE INVESTMENT The beautiful thing is that all clichés aside, there is a way for everyone to get in and begin building this for themselves. There’s no one magical cookie cutter answer that suits everyone. For some it may require ninja style tactics to get going with little money, time, or credit. That may mean beginning with real estate wholesaling, lease options, or private lending, and partnering up. Maybe some will
MIXING IT UP IN REAL ESTATE I personally love the diversification of my ultimate cash machine, and business which provides consistent income from rents,
Realty411Guide.com
PAGE 53 • 2016
start real estate businesses of their own. For others it may be starting by rolling over IRAs and 401k accounts to self-directed retirement plans, and investing in rental real estate. I do this every day. I share as much as I can because it is just so important. It is sad for anyone to miss out on. It’s not just about having more money. It provides that. But the peace of mind, giving kids the best start they can have, helping their parents, and reaching full potential in giving and helping others can all be priceless. And you don’t necessarily have to become a full time investor or real estate business owner to enjoy it. In fact, my Remote Rehabs service was featured by Globe St. and Market Watch this year for helping individuals achieve their financial goals hands-free. I know that making the leap into real estate can be confusing, and everyone is in a unique situation, with different timelines, and strengths and goals. My companies offer real estate tours and practical workshops, but I also offer personal one-on-one Strategy Sessions for FREE. I’d love the opportunity to help you get to where you want to go financially; making stronger gains, and protecting what you build. If you’re not sure of the best strategy for you, or what the next step is, request a Free Strategy Session online at: BlackBeltInvestors.com/coaching/ free-consultation
reWEALTHmag.com
strategy
The Self-Directed IRA Card that Changes DYNAMICS in Investing a huge step for IRA account holders. This means being able to take advantage of crowdfunding opportunities and auctions. Even in person investors can now potentially snap up tax-liens, mortgage notes, and auction properties with their cards.
Interview by Tim Houghten
E
ver wished self-directed IRA investing was simpler for you and those you work with?
Wished that all the net return and tax advantages of investing through an IRA where as easy to wield, and as comfortable as having cash in your pocket, swiping a card, or making online and mobile payments from your smartphone? The Entrust Group myDirection Visa® Card delivers all of that. EQUIPPING INVESTORS FOR STREAMLINED SUCCESS Self-directed IRAs are undeniably one of the best power tools available to investors today. Self-directed IRAs just makes investing better, and more profitable. Not having one means paying more in taxes, and suffering subpar investment returns. Yet, until now many have passed on the power perks of this vehicle due to perceiving it as complicated, sluggish, and time consuming. This isn’t just a problem for individual investors, but for real estate educators and professionals, and their clients that stand to win so much. The Entrust Group myDirection Card promises to tear down these old barriers, to deliver more of what investors want, need and deserve. It’s the ability and flexibility to direct your future with the swipe of a card or a smartphone app. The new pre-paid Visa card powered by citi enables individual investors to maintain control of their funds, on-demand. Realty411Guide.com
SPECIFICALLY THIS CARD EMPOWERS YOU TO: 1. Make instant transactions 2. Save on transaction fees and paperwork 3. Invest online DIRECT YOUR FUTURE™ In an exclusive interview with Certified IRA Services Professional and President of The Entrust Group, Jason Craig highlights some of the critical investor needs that the myDirection card solves. When put in perspective it’s pretty clear that a card like this is essential for enabling investors to operate effectively in today’s modern landscape, while maximizing opportunities. Being able to invest online is PAGE 54 • 2016
Entrust’s Jason Craig also highlights card benefits that go beyond acquisition to asset and property management. For example, if you own real estate in your IRA the antiquated tradition required contacting your administrator, submitting contractor estimates, and having checks mailed, all before being able to get contractors to work on repairs. That’s not highly efficient on a weekend evening when a major leak shows up. So the card not only “reduces time to payment and action, but eliminates the hassle of receipts, wasted time, and reduces expenses.” That means more freedom, and net profit. HOW IT WORKS Craig explains that one of the reasons a card like this has taken so long to launch is the meticulous attention and re-verifying in every step to ensure compliance, user experience, functionality, and “getting it just right.” It’s kind of like Elon Musk designing the new Tesla reWEALTHmag.com
GO SOUTH
SUV, and ensuring the artistic middle row seats fit just right between the wing doors as it carries executives where they p myDirection Visa® Prepaid Card want to go. You can’t rush perfection.
You’re invited
MEET US IN
al estate investments, pay The card itself is an as, and maintain your assets, set held within the investor’s IRA. Account holders ipe of a card.
can have their cards reloaded with more cash needed in to amounts nvenient,asand easy use, from $100 to $25,000. To ensure compliance, oup myDirection Visa® Prepaid Card and avoid triggering “prohibited transactions” or taxable you want, when you want. events investors have 30 days after a transaction to certify what it was for. DESIGNING THE FUTURE OF INVESTING
MIAMI
setting aside at least 25% of what
you spend entertainment gives youon the freedom and to eating out each month. This app puts that on autopilot, and helps you stay on track to investing.
HOW THE ENTRUST TheEntrustGroup.com GROUP CAN HELP BUILD YOUR BUSINESS
ant to a license from Visa U.S.A. Inc. and managed by Citi Prepaid Services. This card can be used everywhere Visa debit cards are accepted. Full disclosures, terms and conditions apply. r self-directed retirement plans. We specialize in providing administrative services to help investors diversify their retirement portfolios with alternative investments of their choice. s Reserved.
Craig joined The Entrust Group in 2007. Along with pioneer of the first “truly self-directed IRA” founder Hubert Bromma. One of the longest established self-directed IRA companies (since 1981), The Entrust Group now offers a robust, tech-savvy, stronger partner for investors. Craig describes some of the changes as including the consolidation of franchises to bring everything back into one streamlined powerhouse for superior service and compliance. This along with bringing over the human touch and one-on-one service approach from Craig’s private banking background has resulted in a consistent “90% plus client satisfaction rate.”
The Entrust Group’s motto is: “We don’t compete. We complement.” Jason Craig states that “we work with a lot of REALTORS®, are a Keller Williams preferred vendor, and attend NAR shows.” In the past, the firm has also collaborated on educational events and seminars with real estate investment groups and real estate related trade shows. Support and opportunities include training, free professional marketing materials, participating in live workshops, and discounted fees for opening self-directed IRA accounts.
Another tech tool this has produced for investors is the SavedPlus mobile app. While most advocates for IRA investing in the real estate world focus on those with existing large balance accounts, this app enables those just starting out to “open an account, save, and monitor their accounts right from their mobile phones.” Automated transfers can even be created to build up a retirement account based upon preset criteria, including a percentage of expenses on other cards. For example, you might want to ensure you are diligently and religiously Realty411Guide.com
To propel action and add real value Craig says that accounts “can now be set up the same day.” This means real estate pros and businesses can not only attract more prospects and raise their awareness of these tools and tactics for releasing more capital, but can actively and instantly help more clients in a bigger way, while unleashing their own business volume potential. And the myDirection Card is going to make conversions and action a lot easier than ever before. Go online to TheEntrustGroup. com for more tools, details of the B2B accelerator program, to download the SavedPlus app, and request a myDirection card. No one should be caught without one.
PAGE 55 • 2016
6 1 0 2 . 0 2.2
n i s U Join DA
I R O L F
Meet Real Estate Investors, Private Lenders, TOP Producers & more
Network with Industry Leaders in an Ocean-Front Setting in Vibrant Miami Beach!
www.Realty411EXPOS.com
805.693.1497
reWEALTHmag.com
Exclusive Interview by Tim Houghten
The Founder of Rodeo Realty, the largest single-owner firm in the nation with 12 branch offices, 1,200 REALTORS®, and annual sales and listings exceeding $5 billion, shares how he went from operating out of his garage to listing homes for $150 million.
W
hat does it take to achieve elite success, at the top of the ultra-luxury real estate market, in the most exclusive community in the world? Rodeo Realty is a name not just associated with celebrity real estate, but with dominating the ultra-elite markets of Los Angeles and
The KEYS to Unlocking ELITE Success in Real Estate Beverly Hills, California. The Rodeo Realty brand has been ranked the largest single-owner firm in California, with 12 branch offices, 1,300 REALTORS®, and annual closed sales exceeding $5 billion. What does it take to obtain, and own this level of success? Syd Leibovitch is the president and leader of the Rodeo Realty empire, and has been championing the crème of the crop of top-end international real estate, year after year, for 30 years. No matter what you aspire to achieve in real estate, it’s clear that Syd just might have a tip or two on how to get it. In an exclusive interview, Syd Leibovitch gives us a peak behind the glass to see what it takes to get to the top of the real estate world, and stay there. Want elite success? Where do you start? Realty411Guide.com
BLAZE YOUR OWN TRAIL Rodeo Realty’s founder has been breaking through barriers since he got into real estate sales during college. Starting at 23 years old Syd says, “I sold three houses in my first month. I only went into real estate as a job for winter break. I fully intended to go to law school. But when my first sale closed, and the buyer hugged me and told me how excited she was to own a home, I was hooked!” Syd says his family, who thought becoming a doctor or lawyer was a far better career choice, were disappointed when he began pursuing real estate. Yet, by the time he was 25 years old, he was a top-selling agent in Los Angeles. In just three years he opened his own firm. Today the world’s leading doctors, lawyers, and hottest celebrities come to Leibovitch’s firm for help in selling and securing the globe’s finest estates. HARD WORK During his time studying economics and banking at California State University and UCLA, Syd ran for the relay team, track and cross counPAGE 56 • 2016
reWEALTHmag.com
“People can’t ask for more than your best. Shame on you if you don’t give it to them.” – Syd Leibovitch
Photo: Vacclav
try; he set new school records. His take away from the experience, and how it has influenced the success of Rodeo Realty – “Learning the value of hard work.”
Photo: Ernest Prim
CONSISTENCY Last year Rodeo Realty sold at least one unit for $70M, and listed another at $150M. Yet, the surprisingly modest founder says that the majority of the firm’s transactions are in the $1M to $6M range, and that consistency is key. If you’ve ever run cross country you know you have to be able to keep up the pace, for the long haul, and often over unknown and challenging terrain. This could just as well describe navigating the real estate world. Yet, Syd says: “I did at least one deal a week for my first 15 to 17 years in the business.” How do you create that type of consistency in results? He says, “I found something I like doing, and I do it a lot,” explaining that “if you do your best to take care of everyone you meet, the results will take care of themselves.”
Photo: Nito500
DO YOUR BEST Although he is a very hands-on business owner and accessible to his staff, today Syd has certainly handed on the baton to Rodeo Realty’s army of luxury real estate agents, and expert management team. Syd is very clear that he does not compete with his REALTORS® for sales and credits them for the incredible sales figures posted. Asked how he manages to stay organized, and maintains efficient operations at such scale, Syd simply credits his “good people,” whom he says have become “friends,” more than employees. Rodeo Realty surprisingly invites even new agents to come and train with the organization. So why work with Rodeo Realty, besides the prestige of joining one of the world’s most respected and envied real estate companies? Continued on pg. 96
Syd’s Theory – “You’ve got to be the best, you’ve got to give the best.”
Want to see what a great real estate website looks like and view some of the most exclusive real estate eye candy in the world? Check out Syd’s site at http://RodeoRE.com, and download the free Rodeo mobile app. Photo: Andrey Bayda
INVEST
and three other Clothier Companies
Honored on INC.’s 5000 List Steady, Sizzling, Superior Real Estate Strategy
W
By Tim Houghten
hat’s the secret to winning in the real estate race? The tale of the tortoise and the hare used to be a staple in everyone’s education. That appears to be a part of the lesson plan that’s been torn from the pages for many today. Do you remember who won the race? What we all need to remember is the horde of hares that rushed themselves right out of the running just a few years ago. So how can real estate investors achieve steady cash flow, sizzling returns, and superior long term results, without risk of burning out?
WINNING REQUIRES WISDOM Soccer games don’t have all the breaks of American football. In order to win it not only takes great team work, but superior stamina. It also requires that players know when to sprint into action and push, and > Realty411Guide.com
PAGE 59 • 2016
reWEALTHmag.com
The staff of MemphisInvest.com at their main office location in Memphis, Tenn. The company also has teams in Dallas and Houston, Texas.
when to act tactically. True wisdom is the meeting point of knowledge and knowing the right time to act. In real estate it takes stamina to maintain gains for the long run. It requires intelligent execution of action, knowing when to hold, and what to focus on. Yet, in the current environment where anything but rushing in like a bull seems strange, who on earth would have the courage to moderate their growth and pace on purpose? An exclusive interview with Partner and VP of Sales & Marketing at Memphis Invest, Chris Clothier reveals a firm that has been willing to do just that. The net effect of the approach certainly seems to be wowing a sufficient number of savvy investors. And given the number one turnkey real estate company’s status as one of the best known, and most respected brands, a blossoming WOW Club, and being crowned with Inc. 500 recognition, it seems to be working.
have paid off tremendously in business by helping me to stay focused on long-term development both of myself, our clients and our team.” 2. SHARING While others are increasingly concerned about sharing their secrets and playbooks, Chris has become very active on the online real estate forum BiggerPockets. Asked A couple closes on their investment property. They are congratulated by Carol Henderson, client relations with MemphisInvest.com.
The 3 S’s of Memphis, Tennessee’s Most Successful Turnkey Real Estate Company 1. SOCCER Chris Clothier says “The high-level training and licensing I received as a professional soccer coach Realty411Guide.com
PAGE 60 • 2016
reWEALTHmag.com
A couple just closed on their property, photographed with Ashley Claunch (right) with MemphisInvest.com.
“ With 1,125 clients and offices in Memphis, Dallas and Houston, with a team that is 63 members strong, MemphisInvest is on-pace to close 600 plus transactions for our clients this year alone. ” congruency. It is easy to grow too quickly and in a haphazard way. We feel that this is a perfect time to re-calibrate everything we do, and how we deliver our services to our clients and tenants as we prepare to begin growing more rapidly again in 2017.” THE SCOREBOARD What are the results of this approach to building a real estate machine? As of today, Memphis Invest’s founder says, “We now have over 1,125 clients, offices in Memphis, Dallas and Houston, with a team that is 63 members strong, and are on-pace to close 600+ transac-
about this participation in the new sharing economy he says: “When I was 18 years old I was lucky enough to attend a Zig Ziglar event. He said something on stage that really had a profound effect on many of us attend-
ing that night. He stated that you could have anything you wanted in life, if you help enough other people get what they want in life.” That’s a philosophy the Clothiers continue to practice on a daily basis.
tions for our clients this year alone.” There’s nothing sluggish about those digits.
3. SUSTAINABILITY On ensuring sustainable growth when others find it impossible to throttle their ambition Chris said, “Going into 2016, as leaders of our company, we began planning for moderating our growth rate, and spending the next 15 months improving upon our processes, hiring additional team members, and implementing a new, inter-active training program to create even greater Realty411Guide.com
UP YOUR GAME… Whether just starting out in real estate, or seeking to expand an already formidable real estate empire there is no question that it’s worth checking out what’s going on in Memphis. Investors can scoop their Free Passive Income Jumpstart Package, and detailed analysis of three solid rental property markets, Houston, Memphis, and Dallas, at MemphisInvest.com.
PAGE 61 • 2016
reWEALTHmag.com
ghten
u Tim Ho y b w e ntervi
ve i
Exclusi
Real Estate Worldwide
THE TIME IS NOW Kent Clothier
The Clothiers’ connection economy puts four real estate companies on Inc.’s 5000 list
K
ent Clothier lives by the ethos of being “unwilling to waste a single moment.” The fact that his family’s businesses stake claim to four spots on Inc.’s fastest growing private companies list proves that.
From Airbnb to Uber to Facebook, today’s fastest growing and most valuable businesses share one thing in common – they focus on connecting people and resources. It’s most entrepreneurs’ dream to hit a notable list once. Most never dream of being able to replicate that success. So what’s so different about the Clothier culture and system? In an exclusive interview Kent gave us the 411 on what’s driving the machine… >
Realty411Guide.com
PAGE 62 • 2016
reWEALTHmag.com
NO EXCUSES. JUST RESULTS. We will be in Southern California in February to meet with you. The Clothier family and other team members will be in Southern California hosting private meetings and meeting with our clients. We invite interested real estate investors to come and meet us on Saturday February 20th. To reserve your seat call us at
871-371-2625 or visit our website at memphisinvest.com/company/events
Memphis • Dallas • Houston
Your financial future is already built. All you have to do is claim it. MemphisInvest.com
Kent Clothier
Real Estate Worldwide Kent and his companies Real Estate Worldwide and REI Marketing are the conduits that are connecting thousands of individuals with what they really want more of. This is the gateway to learning, an incredible suite of real estate lead generating software, elite real estate coaching for those who want it, and then turnkey investment properties, property management, and realty services via Memphis Invest, Premier Management and Premier Realty. No matter where individuals are, from having never thought about real estate investing, to already running a multi-million dollar enterprise – the Clothier family of companies has a way to help take you to the next level. REWW launched a new website in September 2015 to better serve the flock of investors that have become fans of what Kent and his team stand for. The team that is on a mission to reach and help 2 million plus individuals. But Kent says, “It doesn’t matter if it is 200,000 this year, or 2,000. It is about the individual impact on people’s lives and their families.” Each one is priceless.
Life by Design Kent says he’s “not a real estate guy.” What?! One of the biggest names in the real estate world, and he says he isn’t even really about identifying as a property specialist or worrying about buying and selling houses every day. Kent Clothier is about living on purpose. About maximizing the potential of every minute. He loves data. He loves systems. It just so happens that real estate can deliver the biggest returns in the shortest periods of time, and it can be done on autopilot. REWW’s SMART Software Suite provides automated solutions for finding cash buyers, private lenders and motivated sellers. For Kent, and many of those they serve, income is now turnkey, and coming in like clockwork. Or, in this case, more like a Tesla Model X in ‘Ludacris Mode’. It is all about making the most of every minute. Maximizing efficiency in investing so that when we ask: “Am I spending my time doing what I really want to?”, the answer is always “Yes!” For Kent success in achieving this has come from pioneerRealty411Guide.com
ing ‘Reverse Wholesaling’ and a near death experience. Kent says, “Life is a one-shot deal.” And it is his skill with systems, combined with his burning “passion for living an authentic life,” which enables him to be there for his children, maximize his contribution to them, and that has given birth to real estate’s New Connection Economy. We’ve all had someone we love with incredible intensity and a servant’s heart. That’s ‘our why’. It’s why we do everything we do. For Kent, it is his wife and kids. And he knows that just leaving them a mountain of money, or telling them that they can achieve whatever they want in life, isn’t the most he can do for them. He explains that “in order to really empower them, I want to lead by example, and demonstrate what a life of creating value and lifting up others can do.” This message that has clearly resonated with a surging number of people. It is an ethos lived throughout the organizations, with an annual culture book, and The Time is Now Project, which aids orphans in Haiti. And this is the heart, pumping life into these extraordinary results.
PAGE 64 • 2016
Continued on pg. 98
reWEALTHmag.com
Real Estate
Investing
Made Easy The Next Big Thing is already here.... BUYERS, SELLERS, AND LENDERS ALL AT YOUR FINGERTIPS
Call us today! 888-411-1705 OPPORTUNITYSTARTSNOW.COM
Many U.S. Communities Seeing Real Estate Inventory & Lead Shortage By Leon McKenzie U.S. Probate Leads
A
s a professional real estate investor, keeping a pulse on the changes in the market can be the difference between having a profitable year and seeing losses in your business. Seeing these trends and knowing how to react to them can be one of the most critical skills for any individual working in the property business. One of the most pronounced trends in the market recently has been the tightening of real estate inventory and, consequently, a shortage of leads. This trend has paralyzed many real estate professionals and prevented them from finding and making the deals that will take their business to the next level. The contributing factors to this problem come from many areas. Knowing a bit about the factors that are causing the issue will help you to navigate the current changes in the market.
Alan Heavens of the Philadelphia Inquirer reported, “Research from the National Association of Realtors shows the U.S. needs to build 1.3 million to 1.7 million housing units annually to keep pace with yearly household formations averaging 1 million to 1.4 million, in addition to replacing the 300,000 obsolete dwellings that are razed each year. Statistics released two weeks ago by Freddie Mac, however, show that only 910,000 units were started in 2008 and 550,000 in 2009. Projected starts for 2010 are better, but just 700,000 units.” Decreased construction means that more homeowners and business owners are staying where they are in terms of their location. Homeowners and business owners who would like to relocate to a new home or office space simply don’t have any options from which to choose. This means that people are more likely to pursue the option of remodeling or adding on space rather than going out into the real estate market and looking for a new residential or commercial property. Heavens said that it can be challenging to try to predict how much space will be needed in any given year, “Predicting how much housing is needed involves a complex calculus that weighs hard statistics
CONTRIBUTING FACTORS TO REAL ESTATE SHORTAGE There are a myriad of factors that may be affecting your real estate business and your ability to find good properties – both on the residential and the commercial side – that will lead to profits and excellent options for your portfolio.
(new-home starts, sales of previously owned homes) against a certain amount of demographic tea-leaf reading (household-formation forecasts). Thus, there isn’t complete consensus on what will be enough. “At current levels of housing construction and demand, the nation has just about two years’ worth of excess vacant homes for sale and rent,” said Moody’s Economy.com chief economist Mark Zandi. “Without additional construction, many homeowners and those looking for commercial space may find themselves frustrated.” Here are just a few statistics that support the issues with the current real estate market according to Heavens: • “At the current sales pace nationwide, the supply of previously owned houses would take 7.8 months to exhaust, not including the vast “shadow market” (houses whose owners are waiting to sell until real estate recovers) and “distressed properties” (foreclosures and bank repossessions). • The inventory of unsold new houses is at 9.1 months of supContinued on next page
...people are more likely to pursue the option of remodeling or adding on space rather than going out into the real estate market and looking for a new residential or commercial property. Realty411Guide.com
PAGE 67 • 2016
reWEALTHmag.com
A Shortage of Inventory and Leads
ply, and the volume for sale is flat at 234,000 homes — a 30-year low. • At the end of the fourth quarter, 24 percent of all U.S. homes with a mortgage were worth less than the loan balance. The housing vacancy rate in the fourth quarter was 2.7 percent. • The U.S. homeownership rate is 67.2 percent, down from its peak of 69.2 percent in fourth-quarter 2004 and decimated by record foreclosures.” BOOMING POPULATIONS CONTRIBUTE TO SHORTAGE IN SOME AREAS With the population in the United States continuing to shift to areas with temperate weather, positive economic conditions and those that don’t have issues with fresh water supplies, some areas are seeing a boom in population that no level of construction can meet. Connor Hyde writes, “The Sugar Land and Missouri City area experienced a record number of home sales in 2014. However, population growth in the area paired with various construction woes has led to a low home inventory, causing a rise in home prices and a dip in sales since January. Since 2012 Sugar Land and Missouri City real estate agents have classified the area’s housing market as a seller’s market due to the decreasing inventory of available homes and climbing home costs. As a result, many of Fort Bend County’s master-planned communities are struggling to keep up with the demand brought on by the influx in population in the region.” In fact, these changes to the market have driven up the prices of the homes that are currently on the market. Hyde quoted a local real estate agent, Shad Bogany, who has seen these changes first hand, “‘We have more customers than we have houses to sell, and we are getting multiple Realty411Guide.com
For real estate investors who want to continue to profit no matter the market, looking to alternative leads is the best strategy.
offers on houses,’ said Shad Bogany, a real estate agent with Better Homes and Gardens Real Estate in Sugar Land and Missouri City. ‘We do not have a lot of houses to sell, [and] we have the builders, who have been the biggest pushers of home sales in Fort Bend [County], behind in construction.’” Issues with construction in population booming areas face a twopronged challenge – not enough qualified workers for residential projects and not enough funding. Hyde writes, “Home developers and cities are competing with projects in the Greater Houston area, such as the construction of the new Exxon Mobil campus in Spring and the continued construction of the Grand Parkway. These major projects have contributed to the lag in home construction as there are fewer skilled laborers available. ‘That is exactly why we cannot keep up with building homes fast enough,’ Reichert said. ‘There are just not enough workers out there to build homes [and] builders struggle on a daily basis to find workers.’” While all of the construction that is being completed in booming areas may seem like a good thing, there are also ancillary issues. Hyde writes, “The shortage in laborers and influx of construction projects has also led to an increase in the price of construction materials, which has directly caused housing prices to increase, Reichert said. Since 2011 material costs have increased by 11.7 percent and are expected to climb through June 2016, according to the national construction management company Turner Construction Company’s price index.” Not only are homeowners faced with fewer properties to choose from and fewer new construction projects, but the new construction they do find may cost the average homeowner PAGE 68 • 2016
more money than they can afford to spend. With rising construction material costs, the associated increase in new construction prices may prove to be too much for homeowners. These homeowners may end up staying in their current home to avoid the problem. CHANGES IN SEASON AFFECT INVENTORY Another contributing factor to the shortage in real estate inventory is the upcoming change in season. While spring markets generally show expansion as more and more property owners put their homes on the market, the opposite it true during the fall and winter months, especially in the cold weather climates. Said Lawrence Yun, “As winter approaches, inventory will slide further. Few homes are newly listed after Thanksgiving. Historically, inventory tends to be 15 percent lower in winter than summer. Last year’s seasonal decline was even more dramatic, at 25 percent. We hope we won’t see an inventory decline of that magnitude this winter. Home values rising much faster than income growth will markedly cut into housing affordability.” The contraction in the market will pull many properties off of the market with buyers still looking to purchase homes. Being able to find a property during any time of the year is becoming a significant challenge for buyers who want to have several homes they can investigate. Continued on pg. 95
reWEALTHmag.com
Randy Hughes explains how real estate investors benefit from the use of land trusts. I have been a landlord for 43 years and I have always threatened to write a book of my experiences. Perhaps one day I will write a “tell all” book about the crazy and unique tenant situations that I have found myself in, but for now, I will limit this article to those experiences that relate to using a Land Trust.
Most rental real estate is owned by mom and pop operations that have no separation between the “owner” and the “tenant.” The relationship that develops is one of an adversarial nature. The tenant knows that he/she is dealing directly with the owner of Realty411Guide.com
the property and therefore has an advantage when negotiating lease and maintenance issues. For example, when it comes time to renew a lease it is difficult for the owner of a property to drive up in his/her Mercedes to demand a rent increase. Not that the owner doesn’t deserve an increase, but the perception from the tenant’s point of view is that the owner does not “need” an increase. Unfortunately, most tenants in America today think that the owner of their property is rich and has no cares in the
world! It is a common misconception that people who own rental real estate are wealthy. So, when it comes time to renegotiate a lease the owner is at a distinct disadvantage. Most savvy real estate investors will hold title to their property in a Land Trust with perhaps the beneficiary being PAGE 69 • 2016
land trust
Landlords and Land Trusts
a Limited Liability Company (LLC) or Corporation. This structure gives the investor the anonymity of ownership from a Land Trust and the asset protection benefits of the LLC. When a Land Trust owns title to real estate held inside the trust, the Beneficiary is NOT the owner. The Trustee is the full legal and equitable title holder. This means that as the Beneficiary you can honestly state (to everyone including tenants) that you are not the owner. This puts the Beneficiary in a much better negotiating position with tenants. As the property manager you only have certain powers bestowed upon you by the owner. Beyond those powers your hands are tied and it becomes a take it or leave it proposition. For example, when a property manager presents a rent increase to a tenant it is from instruction from the owner of the property. It is not up to the property manager to negotiate, just deliver the message. Negotiations become much more matter of fact when handled in this manner. The property manager is just “doing her job.” There are other distinct benefits to not being the “owner” of rental Continued on pg. 95
reWEALTHmag.com
The TOP FIVE Reasons to Consider COMMERCIAL
REAL ESTATE for Your Portfolio By Tom K. Wilson
While many investors see single-family homes as their “bread-and-butter” investment, investing in commercial properties is an option that can also help you achieve your financial goals. “Commercial”in its broadest lay vernacular includes multifamily apartments, however, the true industry definition separates multifamily properties (over five residential units) from true commercial, such as retail,
office space, industrial, self-storage or medical centers. I’m often asked what kinds of properties I recommend. There is, of course, no one size that fits all investors or markets. While in a normal market multifamily properties are a natural progression from single family homes, this is anything but a normal market and currently there are too many multifamily buyers chasing too few deals, so it currently has lower CAP* rates or returns than pure commercial.
#1 HIGHER ROI Commercial properties often have higher and more predictable return-oninvestment than single-family homes, in part due to the economies of scale from investing in a larger property not usually available to the small investor. For example, a current commercial retail center that we are acquiring has an 8.2 CAP rate and a four-year internal rate of return* of 12.0%. When you can borrow money at 4.25% and invest it in something yielding 12.0%, that’s worth considering!
Here are five reasons to consider commercial properties for your portfolio.
#2 FEWER HEADACHES It’s generally easier to manage one large property through a professional
*A GLOSSARY OF COMMERCIAL TERMS CAP RATE (Capitalization Rate) A measure of return calculated by dividing the property's net operating income by its purchase price. CONC (Cash on Cash Return) A measure of return calculated by dividing pre-tax cash flow from a property by the total cash invested (e.g., down payment plus closing costs). GRM (Gross Rent Multiplier) The Gross Rent Multiplier is a measure of how expensive a commercial property is relative to the gross rents it brings in, calculated as: GRM = Purchase price of the property / Gross monthly rents. NOI (Net Operating Income) The total income from a property minus vacancy, For your free and copy of Wilson Investment Properties credit losses, operating expenses.
article “Are Real Estate Syndications for You?” and a guide to “Commercial Real Estate NNN (Triple Net) Terms” pleaselease go to our website, A commercial in which the tenanthttp://tomwilsonproperties.com pays three operating expenses (in addition to rent): Property taxes, insurance, and maintenance.
ROI (Return on Investment) ROI measures the amount of return on an investment relative to the investment’s cost and is calculated as: ROI % = (Gain from the investment – Cost of the Realty411Guide.com investment) / Cost of the investment.
PAGE 70 • 2016
reWEALTHmag.com
Steps you can take to actively improve property management firm than to market conditions. And there can be stiff manage scattered single-family homes. NOI include: prepayment penalties. • Upgrading the existing buildings Also the business tenants you get in • Increasing TI (tenant improvement) retail or office space are usually of Not as Liquid • Adding leasable square footage higher quality than most residential If you own 10% of a Commercial • Raising rents tenants. Business tenants have higher building and want to sell your interest, • Reducing operating expenses credit/risk scores, have pride of you can sell to your fellow investors ownership in their businesses and want • Adding amenities (who usually get first right of refusal) to protect their livelihoods. As a result, • Adding additional revenue generating but if none are interested, it may be resources (ATM kiosk), and many more they have an interest in taking care of difficult to get out of the investment. Rather than wait for market forces to the property. That is why long-term funds, like raise real estate prices organically, you Many commercial properties are IRA money, are ideal for commercial can create appreciation using levers like NNN* (triple net), so the tenant properties. the ones listed above. pays most of the expenses including taxes, insurance, and Sale of a Commercial maintenance making the Property can take longer owner’s expenses very om K. Wilson has utilized his experience and skills While just about everyone predictable and consistent. acquired in 30 years of managing some of Silicon wants a home, only a small Valley’s pioneering high tech companies to buy and percentage of the population #3 STABLE sell more than 2,500 units and over $130 million of real is capable of purchasing CASH FLOW estate, including three condo conversion projects, eight a retail center or office Commercial leases are syndications, and seven multifamily properties. He founded building. The smaller typically 5-10 years in and owns Wilson Investment Properties, Inc., a company that market of potential buyers length vs. annually for has provided over 500 high cash flow, high-quality, rehabbed coupled with a detailed due single-family homes. and leased residential properties to investors. diligence process means Additionally, commercial Active in real estate associations, Mr. Wilson is a frequent that the sale of the property leases include annual speaker on real estate investing where his expertise and can take longer than for a bumps in rent and optionsexperience makes him an audience favorite. He is the weekly single-family home. to-renew. As a result of all host of the Wed 2pm edition of KDOW’s RE Radio Live in these factors, cash flows San Francisco, the Wall Street Business Network (1220am). Syndications are more predictable. Many of the challenges outlined above can #4 NO 10-MORTGAGE be mitigated by investing with ADDITIONAL BENEFITS FANNIE MAE LIMIT an experienced syndicator. Their Of course, the five advantages of Any loans taken by the owner or knowledge, track record, and ability commercial real estate listed above are syndicate do not count against your to qualify for the loan and manage the in addition to the usual benefits of any 10-mortgage limit because they are in property, allows the small investor to real estate investment: the name of the owning entity and not participate in a high quality commercial • Tax Benefits on your personal credit. This enables property or to invest in multiple projects • Hedge against inflation you to put more of your capital to to distribute their risks. • A hard asset with intrinsic value work. SUMMARY Caveats of Commercial Investing #5 APPRECIATION The benefits, economies of scale, No discussion of commercial MULTIPLIERS opportunities for forced appreciation investing would be complete without Unlike single-family homes, which and higher returns make commercial noting a few issues that investors should properties an attractive addition to most are strictly valued based on market be aware of. demand, or ‘sales comps’, commercial investors’ portfolio, and one worthy of properties are valued as a multiple of serious consideration. Financing can be more challenging their Net Operating Income (NOI),* Typically, the investor(s) must put down For your free copy of Wilson Investment which can be driven up by a good 25-30% of the sales price and finance property manager’s addition of value. Properties article “Are Real Estate the loan amount over a 5-10 year term At a Cap Rate* of 8.0,everyone-dollar Syndications for You?” and a guide with a balloon payment at the end of increase in annual NOI can result in to “Commercial Real Estate Terms” the term. Selling or refinancing options $12.50 of appreciation! please go to our website, www. at that time will vary depending on TomWilsonProperties.com.
T
Realty411Guide.com
PAGE 71 • 2016
reWEALTHmag.com
finance
UNDERSTANDING
Lines of Credit By Dr. Teresa R. Martin, Esq.
loans. A line of credit is similar to a credit card, but with better interest rates.
T
here are many different ways to borrow money. You can go to a bank for various types of loans. You may choose to use pawnshops or payday loans. Credit cards are another idea. You can even borrow money from friends or family.
Figure out if a line of credit might be the perfect source of funds for you: 1. A line of credit is a flexible loan from a financial institution. A line of credit has a limit, just like a credit card. You can use the available balance as needed.
Another option is a line of credit. While lines of credit have been popular with businesses, they haven’t been widely used by individuals. This is primarily because banks aren’t advertising them, and most borrowers lack the knowledge to inquire.
• Interest is charged as soon as the money is borrowed. The borrower can repay immediately or according to a predetermined schedule.
This is unfortunate, because a line of credit has many unique features that set it apart from other types of
• These loans tend to have a lower risk for banks, so they like to provide lines of credit. The default rate is much higher for credit cards. But, it’s important to qualify because it’s an unsecured loan. 2. There are many times that a line of credit can be useful. Banks prefer to refrain from making onetime personal loans, especially those that are unsecured. It’s pointless for a borrower to take out several short-term loans over the course of a year. A line of credit bypasses these issues by making the money available as needed. • Lines of credit aren’t normally used to make large purchases. They’re mostly used to even out the variability of monthly income and expenses. • While a credit card can perform the same function, a line of credit is usually less expensive to use. The interest rates are significantly
Realty411Guide.com
PAGE 72 • 2016
reWEALTHmag.com
lower and the payment terms are more attractive. • Events or items that require a large cash outlay, like a wedding, are one use for this funding source. Sometimes credit cards aren’t accepted by certain vendors. • A line of credit can be part of a bank’s overdraft products. It can be used to fund quarterly tax payments, and it can be a great source for emergency funds! • A credit line can also be used to fund other projects with uncertain costs. 3. Lines of credit aren’t perfect. Like all loans, a line of credit has some potential downsides.
• Lines of credit have higher interest rates than traditional secured loans like mortgages and car loans. Check with your bank to see just how much you can save. • You’ll require excellent credit to be approved for a line of credit. This type of borrowing has higher qualification standards than a credit card or mortgage. • Many banks will charge a maintenance fee, even if you’re not using the line of credit. These fees are charged either monthly or annually. In most cases, the interest isn’t tax deductible. A line of credit is a lending source you can use, if it fits your needs. Borrowing too much or making unwise
choices can create the same financial challenges as any other type of loan. Like any loan, it’s important to be aware of all of the details. Ensure you understand the repayment schedule, interest, and fees. And remember to shop around for the best deal! Dr. Teresa R. Martin, Esq. is the founder of Real Estate Investors Association of NYC (REIA NYC). REIA NYC (www.reianyc.org) is a premier real estate investment association serving the New York City marketplace. Its primary focus and mission is “helping our members build, preserve, and harvest multi-generational wealth” in the areas of real estate investments, business ownership and personal development.
Connect. Grow. Prosper (646) 278-6724 | www.REIANYC.org
WISE is a Women-Focused Division of REIA NYC Become A Catalyst For Transformational Change And Wealth! We help women achieve their personal and professional goals through education, development, mentoring, networking, service, and leadership.
REIA NYC is one of the premier real estate investment associations serving the New York City marketplace. Our mission is “helping our members build, preserve and harvest multi-generational wealth.
• The Main Event. Our biggest monthly meeting, featuring local & national speakers, roundtables, marketing analysis, deal evaluations, and more. • Mastermind & Strategy Meetings. Peer-2-Peer Insights to take your investing to the next level. • Weekend Workshops. Special intensive events to deliver in-depth knowledge. • REIA NYC PHP Courses. For new and veteran investors.
WISE Is Actively Involved In: Creating awareness regarding financial literacy Strategic networking Development of business alliances Supporting new investors in building and expanding businesses Creating new relationships based on mutual interests Finding new partners in the field
GET YOUR FREE WEALTH GAME PLAN TODAY!
(646) 278-6724 | www.REIANYC.org Reservations For Success
Empowerment Coaching
Wealth Bootcamp
Monthly Meetings
crowdfunding
Welcome To Your MONEY
PATCH Article by Tim Houghten
Money might not grow on trees, but funding portal Patch of Land may have invented the closest thing to it…
W
hether looking to grow your real estate investments with access to attractive capital, or boost your yields with passive income investments, this is one patch of the web worth checking out. Named one of Entrepreneur magazine’s ‘100 brilliant companies of 2015’, Patch of Land brings a unique twist to real estate lending and crowdfunding, and the proof is in the performance.
base investment decisions on for those looking to put their capital to work. Recently, Patch of Land co-founder and CEO Jason Fritton provided a new perspective on how Patch has created a new model of peer to real estate lending. There are two things which really separate this platform from everything else on the landscape:
< PIONEERING WIN-WINS > While peer-to-peer lending, and crowdfunding has been catching plenty of media attention, it hasn’t always been a walk in the park for fundraisers and funders. Until now the two main challenges have been the amount of work required for project promoters, without any guarantee of funding. And then a lack of track record, and organization to Realty411Guide.com
1. Patch offers ‘Pre-funding’, gives you your loan, and then raises funds from the crowd 2. Patch works together with institutional lenders instead of trying to replace them This creates a true hybrid where “real estate, finance, and technology, converge.” PAGE 74 • 2016
reWEALTHmag.com
Now operating in 25 states, and with over $600M per month in funding requests the company is able to offer retail investors, hedge funds, regional and “community banks the yields they really want, along with efficiency in origination.” The startup that Fritton describes as a “tech and efficiency company” shares some threads with other peer-to-peer, online mortgage lending, and crowdfunding sites. These are that real estate fundraisers bring their projects, which are ultimately financed by the crowd. It is the execution that stands out. Fritton highlights that his company is the “first in market to directly secure fractional investors in real estate loans.” That means Patch of Land underwrites, and gives real estate investors and professionals the funding under the supervision of SVP of Underwriting & Acquisitions Douglas Cochrane. Then Patch of Land opens up the opportunity to a range of individual accredited investors and institutional lenders. Now operating in 25 states, and with over $600M per month in funding requests the company is able to offer retail investors, hedge funds, regional and “community banks the yields they really want, along with efficiency in origination.” In fact, Jason explains that this enables these capital sources the freedom
Realty411Guide.com
to participate in deals they could not do directly, while permitting more common sense underwriting of deals. Operating under SEC Rule 506(c) of Regulation D, this connector empowers those with projects to raise money cost-effectively without all the marketing and substantial filing expenses of going it alone. All while delivering the due diligence investors need and crave. As of September 25th, 2015 Patch of Land had a solid track record of performance, with no principal or interest losses.
< THE SECRET SAUCE > Fritton explains that a great deal of the success has come from “the privilege to hire experts in all areas,” to grow the California based Patch of Land team. The founding and executive team now spans a wealth of technology expertise, lending professionals with billions in transactions under their belt, along with an entrepreneurial marketing team with experience in organizations like Disney. Silicon Valley appears very bullish on investing in ‘The Patch’ too, with a successful, oversubscribed Series A round of funding topping $23M, achieved in early 2015. So far Patch of Land has perhaps been most wellknown for funding single family deals, but Jason tells us they have recently funded a Ramada flagged hotel, office, and retail buildings, and are testing moving into new construction financing. Whether you’ve got deals that need funding, or capital that deserves higher yields, Fritton says “give us a try, and come grow with us!” More details, statistics on past performance, and online tools can be found at PatchofLand.com.
PAGE 75 • 2016
reWEALTHmag.com
Single-Family Home Rentals are Dead? Discover the #1 Investment Opportunity FOR THE NEXT 20 YEARS
A
re single-family home (SFH) rentals dead? Well, that depends on who you are renting them to of course. How does $200-$300 a month in positive cash flow sound? When I was 20 years old, that was exciting. Today, that doesn’t get me very excited at all. Lets face it, one turn over with even one month of vacancy eats up an entire year’s worth of profits in most cases. Let me show you how to get TWICE the fair market rent with a long-term, low-impact tenant or if you’d rather, how you can make $10,000 or more NET per month with Residential Assisted Living. The Baby Boomers are here and they are driving the demographics in housing for the next 20 years. Nearly eighty million of us were born between 1946-1964. We are the Baby Boomers, and we are turning 65 at the rate of over 10,000 a day. Life expectancy is increasing and many of us will live well into our 80s and 90s. There are 4,000 a day turning 85 and 70% of those people will need help for an average of 3.5 years. The 85+ year old group is the fastest-growing demographic of all in the U.S. It is projected to triple over the next 20 years. Senior housing is a great place to be now and will only be getting better and better for the next 20-30 years. The reality is that most seniors will not need a nursing home but they can’t live safely on their own either. They do need assistance and that is what is provided with Residential Assisted Living or RAL. Many of you have already faced this situation with your own parents. If not, well, your time is coming. This mega-trend will last for several de-
cades to come and you can profit from this unstoppable wave and help a lot of people by “Doing Good and Doing Well”. Senior Assisted Living is the Best Real Estate Investment Opportunity for the Next 20 Years. This mega trend is a “Silver Tsunami”and it has created a massive opportunity for smart investors who are poised to profit. Let me explain why “typical” SFH rentals are dead. If you rent a home to a typical tenant, you will get a typical profit of a few hundred dollars a month, maybe. With a typical turnover and a month of vacancy in between you may end up with little or no profit at all at the end of the year. Now, if you were to get TWICE the fair market rent, your profit increases exponentially. Instead of a few hundred dollars in profit you would be netting a few THOUSAND dollars in profit each month. With your typical tenant you have a one-year lease. They may stay for a second or even a third year but they are looking to buy their own home and move out in most cases. That’s not bad but, on the other hand, what if they move out after a few months in the middle of the night and leave you with thousands of dollars of repairs from the damage they left behind? Been there, done that. Let me ask a
By Gene Guarino, CFP
silly question: Would you rather have a long-term, low-impact tenant? A tenant that wants a five-year lease and wants to have two or three, fiveyear renewals on top of that? That is what an operator of a RAL wants. That is why senior housing is the best real estate investment opportunity for the next twenty years. Long-term, low-impact tenants who are willing to pay twice the fair market rent. Why would someone pay TWICE the fair market rent and how do I find them! The answer is your tenant, the operator of the RAL, will still be able to make a lot of money even after paying you twice the FMR.
niche
Let me fully explain that by crunching the numbers. The national average for a private room in a residential assisted living care home is $3,500 per person, per month. Keep in mind that there are people paying two and three times that and there are people paying half that amount. You get what you pay for of course. Remember that 70% or more of the wealth in the U.S. is controlled by seniors. You may not be able to afford or provide for your own long-term care needs, but they can. Keep reading and I will share with you how you can live for free when you need your own long term care. How much can I really make? With a home that is licensed for 10 residents, at an average rate of $3,500 per resident, that is $35,000 per month in potential gross income. The expenses, including debt service or rent and even vacancy is about $25,000. That leaves a net profit of $10,000 per month for an average home. That is for an average home and an average clientele. I have homes that gross $40,000 and $50,000 per month and more. The reality is the expenses are virtually the same for an average home as they are for an above average home. The difference is the cost of the real estate. As a landlord you could be very happy to have a couple thousand dollars per month in positive cash flow. As the operator of the RAL you can earn $10,000 to $20,000 net per month. That is a true win-win situation. If you are considering renting your home to an RAL operator… You will be well served to learn all you can about this opportunity. You will want to know what your tenant, the RAL operator, is supposed to be doing to be successful. That way you can better choose the right tenant and be set up for success from the start. At RAL Academy, I show people how they can profit whether they are a landlord or a tenant. You can profit either way. This is not just another real estate “fad” that comes and goes. This is a massive shift in housing demographics. You will either be riding on top of this unstoppable wave or you will hesitate, procrastinate and potentially miss it completely. That choice is yours but you will be a participant one way or the other. I have comparatively little Realty411Guide.com
When we age we become more dependent upon the help of others in order to do basic activities of daily living. These self-care activities include ADLs such as cleaning, clothing, bathing, medication management and food prep. competition. How many people do you know that are in the business of RAL? With RAL it doesn’t matter whether the real estate market is at the peak or coming down from it, cashflow is cashflow. After 30 years as a real estate investor, doing everything from fix and flips, short sales, REOs, lease options and more, my goal is now just one thing: Significant long-term residual cash flow. Residential Assisted living gives you the opportunity to do one deal and you are done. For life. What is the key to success in Residential Assisted Living? The key to success in RAL is in the details. You need to know which type of home works best, what location is best, how to find the home that no one else wants that will work perfectly for a RAL home and how to do it quickly without all the guess work. You need to know how to find the right team to make your life easy and to fill the home with high-paying residents. I’m sure there are more questions coming to mind for you like: What about the liability? What about a two- or three-story home? What about… There is a lot to know, but the good news is you are not on your own. If you want help in learning how to do this, it is available. Learn more at PAGE 77 • 2016
www.RALAcademy.com The phrase, “paying for speed” is not just an expression, it’s a reality. That’s why the Residential Assisted Living Academy was founded. To show others what to do and what not to do in an easyto-follow, step-by-step process. I’ve done it, and I show you how you can do it too. The “Silver Tsunami” is here and the opportunity to “Do Good and Do Well” is clear. If you would like to learn more, at my training programs we go into depth so you will be totally prepared to succeed in this endeavor. Imagine having one RAL home providing your family a $10,000 per month POSITIVE CASH FLOW… Now, imagine scaling a bit and having two or three… now you’re getting the idea. It’s a new world out there. The days of making a few hundred dollars a month in cashflow per house are history. If you’d like to learn how to do one deal and make $10,000 per month or more, let me show you how you can make that happen. Gene Guarino, CFP is the founder of the Residential Assisted Living Academy. Learn more by visiting www. RALAcademy.com. Gene can be reached at: Gene@RALAcademy.com
reWEALTHmag.com
#LIVETHELIFE
The 5 Most Sensational By Tim Houghten
G
et ready to explore the most spectacular vacation resorts in our nation. Whether you’re ready for some living large to enjoy the gains you’ve made in real estate this year, need an awe-inspiring romantic getaway for some quality time, crave exploring new markets, or are on the hunt for new inspiration: Add these spots on your travel itinerary…
Realty411Guide.com
PAGE 78 • 2016
reWEALTHmag.com
Escapes in the Nation
Realty411Guide.com
PAGE 79 â&#x20AC;˘ 2016
reWEALTHmag.com
#LIVETHELIFE 1. The Mansion – Las Vegas, NV You may have been to Vegas, but have you stayed at the Mansion villas at the MGM Grand? This secret enclave at the nation’s largest hotel offers 29 exclusive villas, with their own guarded entrance. In addition to your own full-time butler, you’ll get unlimited use of a Rolls Royce Phantom, and chauffeur. No taxis allowed. 2. Hotel Terra – Jackson Hole, WY For those looking for a luxurious, yet eco-conscious getaway check out the AAA Four Diamond, LEED certified Hotel Terra resort in Jackson Hole. Unique art décor, hiking, and exhilarating skiing, just steps from the entrance to Yellowstone make this a superb escape for the real estate elite, on every level. 3. St. Regis – San Francisco, CA Conde Nast Traveler names this top San Fran hotel as “a delicious urban oasis.” Located in the SoMa district the St. Regis’ expansive accommodations with leather walls, panoramic views, designer finishes, magnificent art, and oversized workspaces make the ideal power suites for planning
your next big moves, high above this innovative center’s core. 4. Four Seasons – Lanai, HI The Four Seasons is undergoing a dramatic update in the summer of 2015. But what is really spectacular beyond the resort itself is that the entire island was purchased by a billionaire who aims to convert it into a 100% green paradise. If you want inspiration to think big, and see how big is possible; this is the vacation spot for you. 5. Acqualina – Miami, FL This AAA Five Diamond resort and spa on Miami Beach blends the fabulous views and ambience of South Beach with sophisticated Mediterranean Chic. Discover condo-hotel residences up to 5,000 square feet, and vistas some might kill for. Flex with a little yoga, rejuvenate in the spa, golf some of the most envied courses in America, or crank up the adrenaline on the water or engaging in Miami’s fabulous nightlife. If you can’t drag yourself away you can buy your own unit for an average of just over $4M.
Where
VACATION STORY
e will you go? Let us know, and share your adventure with the #LIVETHELIFE hashtag!
Q-and-A
a client in Florida who wanted to buy a house and had some collections on his credit report, in less than 45 days we had him bank qualified and ready to buy.
Credit and finance go hand in hand, these two important factors determine the growth of your business. We sat down with Ryan Perron, CEO of Real Pro Enterprises, to discuss how this entrepreneur is expanding his business by helping others expand theirs as well.
started, but I found it didn’t exist. There is no other company out there to my knowledge that will take you through the entire process of getting started and funded. What really separates us is that we put together an action plan that if you can’t get funding, we will help you get the credit repair or lay out other options for the client to fix their credit. Or, we’ll work with a close family member or friend to get the funding they need. This company is for entrepreneurs by entrepreneurs, so we understand that not every file is a simple, straightforward one. We customize a plan for each client, so we can help them get the results they need.
QUESTION: Why is credit repair so essential when trying to grow a business? ANSWER: There are several ways to get funding, but ultimately every one of them will check your credit to make sure they are making a good loan. So your credit is extremely important. We all know that even the littlest things from excessive inquires to a 30-day late, all the way up to a bankruptcy, foreclosure and tax lien, can really have a negative impact on your credit. But once you have a low rating and paid the price for that, it is nice to know that you can legally get that repaired as well. A lot of banks and other big businesses got a bailout. Shouldn't you get the same? So if there are issues that are holding you back from moving forward with business and getting funding, we can put together a plan to make sure your credit gets fixed and you get the coaching to know how to keep it that way.
Q: What are some tips and suggestions you have for our readers in regards to business credit? A: Do not get a lot of inquiries by applying aimlessly for credit. Know where and why you are applying and how much you will get, before you get an inquiry on your credit report. We do a soft pull on your credit and give you a pre-approval amount before you get any inquiries on your report. This leads to higher amounts and more approvals. Q: Can you give us a case study of how a client has benefited from Real Pro Enterprises? A: We had a client with a couple short sales on her credit report from a few years back, but with the market picking back up, she really wanted to get back into real estate investing in Sacramento. She needed credit repair and funding. In just 11 days we had the items removed from her record and received funding a few weeks later. We also had
Q: Why did you start Real Pro Enterprises? A: This is the company I was looking to help me out when I got Realty411Guide.com
PAGE 82 • 2016
Q: What services does Real Pro Enterprises provide? A: We offer credit repair and unsecured business funding for existing businesses and start-ups. This is funding not tied to any property, but cash and credit that you can use for anything you need to build your business, from down payments to advertising and carrying costs. Q: Do you have clients locally or around the country? A: We have helped clients locally and all over the country. We have also helped people in different industries who have trouble getting loan or credit from banks, such as the food truck, real estate and construction industries. Q: What are your company goals? A: To help and empower entrepreneurs to start and expand their businesses. Q: What are some of the biggest mistakes made when seeking credit? A: People get too many inquires on their credit report from institutions that they should have never applied with anyway. This will put them on the sidelines for six months or get them approval amounts that don't really help them out. Q: How can readers get information? A: They can visit our website at www. therealproenterprises.com and follow the simple three steps to get started. Q: Is there anything you wish to add? A: We built this company to help people get funding and get educated about the process and credit management. We take anyone through the process of getting started and funded so that they can achieve their business goals. As someone who struggled for years to find the right ways to get funding, this is the company I wish I could have found, but it didn't exist in one place. — Interview by the editorial staff. reWEALTHmag.com
WILL “POWER” DUQUETTE Finding Your Path & Achieving Significance
Choose where you want to go and figure out how to get there. Sounds easy, right?
I
nternational trainer, consultant, real estate investor and speaker Will Duquette empowers people to make as much as six figures an hour. So how did he land this prestigious gig? How does he help you unlock your income potential? BREAKING THROUGH WITH WILL POWER Sometimes it can be hard to differentiate the hype from the real deal out there today. There’s a lot of noise and fluff. But you won’t find that when you attend one of Will “Power” Duquette’s high-powered events or one-on-one consulting sessions. The proof is in the results. Duquette has… • Helped Shark Tank investor, co-founder and CEO of HSN Direct International, and author of “Act Now: How I Turn Ideas Into
Realty411Guide.com
Million-Dollar Products”, Kevin Harrington, to catapult his on-stage sales – with five PowerPoint slides. • “Never lost a penny in 17 years of investing in real estate.” • Just “bought” a property with $110,000 in instant equity last week, with no money down. • Had real estate investing students make $70,000 in less than 30 days after training events. • Helped the Jax REIA President crush it with a 25% closing ratio. • Had 12 year real estate veterans raving about the value of his experience. • Has shared the speaking stage with Donald Trump and Richard Branson. • Is launching a YouTube challenge to 2016 Presidential candidate Donald Trump.
learning, and take action.” Duquette insists it is this combination of effective training and action that has not only unlocked the massive success potential of his clients, but his own as well. He says there are irrefutable laws like gravity, and our subconscious that run us, and differentiate our results. Through recognizing them and harnessing their power, Duquette empowers leaders to “experience life transformations that stay with you and serve you.”
FROM PAUPER TO MILLIONAIRE MINDSET Will is dogmatic in his belief and service in helping others to not only achieve their financial goals, but personal dreams and more. In fact, he says, “Anyone can receive great wealth and significance, without needing anyone else’s permission. If they’ll invest in
PAGE 83 • 2016
Continued on pg. 94
reWEALTHmag.com
INTERVIEW BY TIM HOUGHTEN
From TOP Model to Top of the Real Estate World Realty411Guide.com
PAGE 84 • 2016
reWEALTHmag.com
K
aya Wittenburg, has gone from small Midwest town, to becoming a top fashion model working directly with Gianni and Donatella Versace, to leading U.S. and global developers in selling the most breathtaking condos in the world. Through beautification in real estate design, Kaya Wittenburg has risen to being involved in over $4B worth of real estate sales in some of the most exclusive locations on the planet. This has included promoting exciting world-class projects in Las Vegas, Miami, Panama and the Bahamas. As a public speaker and high-profile industry personality, he has been featured on CNN, BBC World, GQ, and The Wall Street Journal, just to name a few. I managed to track Kaya down between photo shoots to tap into some highly credentialed insights on branding new construction, and profiting from the highest end real estate investments. So, what tips can be gleaned from Wittenburg’s successes for maximizing personal performance, scooping better deals on luxury real estate, and renovating or building new projects that push new limits in ROI? Just what can the glamorous modeling world teach aspiring real estate moguls?
For real estate investors seeking the most attractive returns with maximum security, the Sky Five Properties founder says, “Investors have a greater margin of safety in branded residences because resale values have been proven to be somewhat more stable than non-branded residences.” He also comments that when it comes to renovating or designing new multifamily, conversions and condo developments one of the worst mistakes is, “A lack of creativity and sex appeal for lobbies and pool decks, which can destroy pre-construction sales efforts.” Being one of the most transparent authorities in the world of real estate sales, Kaya has often ruffled the feathers of his competitors by openly giving condo buyers and investors the upper edge. He says, “Everything is negotiable, even in pre-construction developments,” and often offers insights on common real estate sales tactics via the Sky Five Properties Blog. ON DEVELOPING AND MAINTAINING AN ELITE LEVEL OF PASSION AND CREATIVITY… In addition to world travel, Kaya Wittenburg was blessed growing up in a real estate household with his mother actively sharing her deal-making and entertain-
How do you go from growing up in a small suburb to selling over $4B of the Most Envied Destination Real Estate on the planet? Kaya Wittenburg says from his first big casting in Milan with Gianni Versace, the modeling world provided countless experiences in learning about people, trends and the details of effective styling. From new countries to diverse cultures and new friends, Kaya says he found “Fashion, art, architecture and interior design,” all appreciated by those he mingled with. Of his first Versace dinner Kaya says he remembers being “Totally overwhelmed. The attention to design was simply amazing. Every plate, tray, piece of silverware at the table was a work of art.” While some might find this level of attention to detail and priority on luxury excessive in the real estate world, it has proven to be a consistent component in the success of leading luxury brands, while delivering real lifts to profit margins. When asked what was behind his success, Paul McRae, broker of the Galleria Collection of Fine Homes in Fort Lauderdale once pointed to his $300 per foot office wallpaper. One of the top ten Manhattan brokerage firms MNS recently achieved a $200 per foot premium on unit sales at the Edge through its efforts in marketing. Wittenburg says he is currently working with a hot brand in Miami that plans to catapult oceanfront property prices by 35% with a new luxury development.
ing client-friends for dinner. It was at this young age Wittenburg caught the excitement of real estate investing. Of course, as any investor, REALTOR® or CEO knows, it takes regular maintenance and intentness to keep up an elite level of passion and innovation to operate at the very top of the game. To this end, Kaya has nurtured a lifelong yearning for learning and constant self-improvement. The Miami real estate innovator says “meditation and yoga practice has helped me elevate the quality of my thoughts – thinking thoughts that induce a sense of excitement, confidence, and gratitude, every day.” While others striving to compete in this fast-based business normally wind up letting what they have learned fall to the wayside, Kaya says religiously sticking to “daily journaling makes a huge impact in long-term success,” a practice he picked up from former Florida Governor, Bob Graham. Want to find out what’s the next big pivot for Miami real estate, and which top global label will be the next to unveil a luxury branded building in the Magic City? Kaya says we’ll have to look out for his next update. Find out more about Kaya Wittenburg’s story and track Miami real estate trends online www.SkyFiveProperties. com and via Twitter @Sky5Properties.
Safety FIRST
when Showing
REAL ESTATE Safety at real estate showings and open houses has become a top priority in 2016. So just how critical has it become, and what are some of the most effective tactics for smart self-defense on the real estate field?
Real Estate is DANGEROUS BUSINESS
T
he threat to the personal safety of real estate agents, brokers and investors has become of paramount concern in the industry. Data released by the Bureau of Labor Statistics in September revealed that the vast majority of on-the-job fatalities can be tied to real estate-related work or activities real estate professionals engage in every day. This includes auto accidents, construction incidents, animal attacks and homicides while showing properties or on property management rounds. It’s not just the number of attacks and real estate workplace deaths and injuries, but the statements of malicious attackers out to do “rich brokers” harm. In 2014 NAR reported that over 25% of REALTORS® said they had encountered a threatening or harassing situation at work. So with such high odds of REALTORS®, investors, and property managers encountering physical attacks when showing houses and sitting at open houses what strategies and tactics can be put into play to stay safe? Realty411Guide.com
10 Tips to Ensure Personal Safety 1. INSTALL SMARTER SYSTEMS Dan Zito, of the Zito Realty Group – Keller Williams of Central PA, says, “I think it is important to, as often as possible, set an appointment to meet clients at the office prior to going through any homes with them. Not only does it allow me to meet them in a safe, ‘public’ environment, but it also allows for better customer service to the client. By meeting them at the office first, we are able to sit down and discuss their wants, needs, review homes that are currently on the market and answer financing questions, prior to visiting any homes.” 2. VERIFY THE ID OF PROSPECTIVE BUYERS It’s far less likely that an agent or investor is going to be attacked if the prospect knows that their identification is on file. Requesting a copy of driver’s licenses and keeping records of them is a great first step. The Birmingham Association of REALTORS®, who released its own ‘10 Commandments of Agent Safety’ all the way back in 1988, reportedly takes this even further by documenting the vehicle information of prospects, requesting references, and verifying them before show-
PAGE 86 • 2016
reWEALTHmag.com
- Article by Tim Houghten -
ing property. Today, simply Googling prospects or hitting the most popular social media networks can reveal a lot about prospects too. 3. USE FORMS TO STAY ORGANIZED It’s too easy for industry professionals to become complacent about this issue or to fail because systems are fragmented. BirminghamRealtors.com offers downloadable PDF Agent ID, Prospect ID, and Agent Safety Itinerary forms to beat these challenges. 4. LIMIT ACCESS AND INTERACTION Those lacking the bandwidth to ensure their personal safety when showing property or sitting open houses can opt for reducing risk by limiting time alone with prospects. This could mean installing keyless locks and allowing prospective renters and buyers to show themselves around. Or perhaps limiting viewings to a one-time event, invite-only events or broker-only opens. Or, there is now always the possibility of virtual open houses via Skype or Google Hangouts. 5. SAFER SHOWING STRATEGY Veterans United Home Loans advises not to ride with strangers in your car. Let them meet you there. Don’t show the way and have possible assailants behind you; let them go first instead. Keep showings during day light hours. Make sure you pull into the drive last so you aren’t blocked in. 6. USE THE BUDDY SYSTEM Let someone know where you’ll be. Let a partner know who you are showing to, and where, and have them call you to check in with you. Certainly there has to be someone that would appreciate you doing the same for them. You may even want to tag team showings together. 7. CONDUCT SOME RECONNAISSANCE Getting to know a listing in advance of showing can be a big help. Recognize if windows or exterior lighting has been tampered with. Know your exit routes. Ensure there is reliable mobile service so that you can reach out in an emergency. Don’t have the SWAT team raiding your open house just because your signal was weak and your buddy couldn’t get in touch. 8. DON’T LOOK LIKE A VICTIM Conducting yourself with confidence can help prevent becoming the victim of an opportunist crime, just because you looked like an easy target. PersonRealty411Guide.com
In 2014 NAR reported that over 25% of REALTORS® said they had encountered a threatening or harassing situation at work. al security and identity theft expert Robert Siciliano suggests via his blog that wearing expensive jewelry can just make it too tempting for criminal not to attack, even when it is risky for them. This also certainly carries over to personal social media use and conduct when off the clock. Being a little too open and flamboyant may make you a mark. Pulling up to showings in an armored vehicle might go a long way to scare off any would-be muggers or assassins too. 9. FLEX YOUR TECH Today’s smartphones and tablets can also double as great security tools. The Field Guide to REALTOR® Safety recommends using distress codes to communicate with other team members. Just don’t make it too obvious. Apps like Guardly can reportedly launch GPS tracking, and connect to law enforcement or colleagues with a tap of a screen. Then there are apps like Salient Eye, which can turn your Android or iPhone into a security camera and even set off motion-triggered alarms. Via Facebook Ray Perry, a REALTOR® at CPS Country Air in Santa Rosa has suggested, “Why not the real thing? An app called Glock works well, of course with a concealed carry permit.” 10. UPGRADE YOUR PERSONAL SELFDEFENSE CAPABILITIES While packing a firearm or being known for carrying a new Galil or ‘Mutant AK47’ in your trunk might be a deterrent, it isn’t always the answer. It could also > Continued on pg. 92 PAGE 87 • 2016
reWEALTHmag.com
The BEST Niche in
Commercial Real Estate
Discover Why Real Estate Investors are Excited About SELF STORAGE Here are just some of the Key Points you will learn during our 2-Day Seminars:
Have You Every Thought About Owning A Self Storage Facility? Is It Something You’ve Been Dreaming Of?
•Learn what it takes to buy and mange a facility.
Do You See Yourself Growing Your Portfolio? Do YOU Want to Earn a Comfortable Income?
IF SO, THEN CALL ME!
•Take advantage of our advisory Services services WITHOUT Advisory WITHOUT emptying your wallet!
Kevin Rollings, Owner/Investor
Learn A-Z with Me!
•Find out why 40,000 investors chose this niche. •Taxes, liabilities, software extra Income income sources. and Extra
www.SELFSTORAGEACADEMY.com
The following is an excerpt from “The Real Estate Candy Shop” by Robert A. Weissman, Esq. and Top Real Estate Experts.
THE BENEFITS OF REIA CLUBS: MY OWN STORY
ABOUT STEVE LOVE
I
accidentally (or perhaps serendipitously) ran into a man at a Jim Rohn seminar in 1994. Jim Rohn is a business phiSteve Love losopher and motivational speaker. As it turned out, this man whose name is Jack Fullerton ran a real estate investment club and invited me to come. I did and I can say that it really changed my life. I still remember the first speaker I heard there, Bruce Norris, talk about buying properties at 50 cents on the dollar. I could hardly believe it! Jack introduced me to others who became my trainers such as Jack Miller, Peter Fortunato, John Schaub and Jimmy Napier. Meanwhile, Bruce introduced me to Mike Cantu who was a big part of my early investing career and Mike introduced me to Ron LeGrand. Meanwhile I continued to go to Jack’s club every month and I was even introduced to another club there that was located much nearer to my home. so I continued to attend both clubs every month and learned more and more and became more and more successful at real estate investing. Remember when I discussed networking above? At Jack’s club, I sat next to a guy, Chuck, and we became good friends (another club benefit, friends!). One day Chuck called and had a deal and asked me if I wanted in. I did. A couple of years later, I cashed a huge check for way over six figures, which was my share of the profit of a deal that I had zero money in. Go to these clubs and network! You never know who you’re sitting next to. A few years later, Ron LeGrand asked my wife Robyn and myself to co-found an investment group in Los Angeles. Although Robyn and I had quit our jobs because of our real estate investing success, starting this new club again changed my life completely. We were warned by Jack and other local club leaders that we wouldn’t get rich by running a club and that it takes much more work than it appear and, as it turns out, they were correct. Many months we actually lose money because we pay up to several thousand dollars for the seminar rooms, refreshments, food, gratuities, gift (swag) bags, etc. Other months we make some money and we often just break even. I can honestly say though that running a club has been the most rewarding >
S
teve Love is currently the Co-Executive Director of Prosperity Through Real Estate (formerly IRCA-Los Angeles), which is an educational real estate investors club in Los Angeles. Steve’s real estate career started in the late 1970s when he became a real estate agent and went on to become a broker. Later, he and his wife, Robyn, became appraisers and ran a very successful appraisal business. In the early 1990s, Steve started taking classes in real estate investing, joined a real estate investors club and started buying properties. Eventually his real estate investments allowed both he and Robyn to quit the appraisal business. When the opportunity came to co-found and run a local club in Los Angeles, he and his wife jumped at it. Running the group has been a big commitment of time, but in many ways has been the most satisfying thing he’s ever done. He says it is such a rush to help a new investor see the light go on, not to mention see them receive a big check. Steve and his wife are authors of the book “No Realtors Needed: How Investors Can Help You in Ways That Realtors Can’t.” He loves fishing and goes on several great fishing trips per year. He also loves cruising and takes as many as five per year. Steve has two boys and because of this great real estate business, he can spend lots of time with them and can afford to take them all over the world. He recently started buying properties outside of California and has made some great deals. He is always delighted to help others in any way he can just as so many have helped him in his career. For information, visit: www.prosperitythroughrealestate.com
Continued on pg. 96 Realty411Guide.com
PAGE 89 • 2016
reWEALTHmag.com
expos
indis | Cool
DeC Photos: John
o Breeze Phot
Clockwise top, from left to right: Representatives from phenomenal companies exhibited at our Los Angeles Cashflow Expo, including: Rent to Reward, Rubicon Entertainment, IRA Services Trust, Zinc Financial, Real Wealth Network, Gene Guarino, Robert Hall and Associates, Credit Sense, Diversyfund, Fortune DNA, HomeVestors of America, Secure Capital Network and more!
Network with Top Leaders from Around the Nation! Join us as we
network our way to the top at our expos celebrating our publications. Join our VIP list to be invited to our next event: http://realty411guide.com/VIP
Realty411Guide.com
PAGE 90 â&#x20AC;˘ 2016
reWEALTHmag.com
Safety First When Showing Listings, pg. 87
PHOTOS: JOHN DECINDIS
make you a target or just ensure that attackers show up even better armed than they would otherwise. Plus, there is always the issue of actually having to use it, and the fact that no permit is going to automatically get you off the hook for taking a life. Non-lethal options, such as pepper spray or stun guns, might be effective enough in most scenarios and give real estate pros time to flee to safety and get help, says Sensei Gilliland, Southern California real estate expert and founder of Black Belt Investors. Sensei doesn’t just train in martial arts as a method of self-defense, he operates a chain of 360 Martial Art Academy locations. Self defense methods including Brazilian Jiu-Jitsu, Judo, Haganah and KravMaga provide some of the most effective types of self-defense and handto-hand combat training, even against armed assailants. We encourage you to think of what other things you can do to stay safe and keep your team secure on the front lines of the real estate landscape. A Lifetime of Income, pg. 31
Network with Top Leaders from Around the Nation!
Join us as we network our way to the top at our expos celebrating our publications. Join our VIP list to be invited to our next expo: http://realty411guide.com/VIP
Item
The payout percentage you select, which is specified in the trust when created, can also not be changed. You can, however, retain certain rights. They include the right to change the trustee, the right to change the charitable beneficiaries, and the right to revoke a non-charitable beneficiary’s income interest. These rights must be specified in the trust document. Another advantage of the unitrust is the fact that assets can be added to the trust. For example, you might establish the trust during life and elect to add assets from your estate at death, particularly if it is continuing for the benefit of children or grandchildren. The ideal situation for funding a charitable trust with appreciated real estate is debt-free real estate or real estate with non-recourse debt. However, don’t despair if you have debt on your property as there are several Realty411Guide.com
Top from left to right: The Law Offices of Manny Singh; Jill Benes from Real Wealth Network and Linda Pliagas; Gene Guarino educates at our Los Angeles Cashflow Expo; Curtis H. Wolthuis, director of Secure Capital Network.
Selling Outright Option
Sale Price Cost basis Taxable Gain 33% capital gains tax Cost of Sale Net to Seller Tax Deductions 43% Tax Savings Total Re-investable 5% Earnings Joint Life Expectancy Total Lifetime Income
$1,000,000 $100,000 $900,000 ($297,000) ($50,000) $653,000 $0 $0 $653,000 $32,650 X22 $718,300
ADDITIONAL LIFETIME INCOME possible solutions for this that can be evaluated on a case by case basis. Hopefully this illustration has made you more aware of a real estate exit strategy option that might benefit you significantly.
PAGE 92 • 2016
Charitable Trust Option $1,000,000 Not applicable $0 $0 ($50,000) $950,000 $407,920 $175,406 $1,125,406 $56,270 X22 $1,237,947
$519,647
If you are interested in learning more about how a charitable remainder trust can be used for your property, contact Mark Lagace and Cynthia Steiger at (619) 819-1851 or mlagace@ sdrescue.org reWEALTHmag.com
Will “Power” Duquette Delivers as a Success Coach, pg. 83
THE SHIFT Will Duquette says Donald Trump offers the classic example of how wealthy people think differently. When Trump was $900 million in debt, he didn’t hide like most would. So what did he do? Operating from that millionaire mindset, he attended a cocktail party with those creditors that he owed $900 million to. Gutsy, right. Yet, in a side room at that event, Trump surrounded himself with this mastermind group, and not only seriously discounted this sum, but leveraged their wisdom to craft a massive success plan. Trump is now worth almost $9 BILLION, and is running for U.S. president. So if you want different results, you’ve got to take different actions. But beyond just curating the success habits of others; Duquette has lived it himself. When he was young, he was always told that his family couldn’t afford things. When he found out that he was going to have his own child – that’s when it changed everything, and created a new sense of urgency. He didn’t want that to be the story he had to tell his daughter. Still, he admits that it took several shifts and years for him to make his own ultimate leap. Because most of what he teaches today just wasn’t shared or known back then. HOW WILL GOT THE POWER IN 7 QUICK STEPS: 1. Got fired from the rat race after calling in sick for having pneumonia 2. Opened his own business 3. Began investing in real estate to make bigger chunks of money 4. Discovered the power of blind faith belief 5. Accepted his ‘license to make mistakes’ 6. Learned how to manage and change his own perspective on happiness 7. Decided his apex was in significance through helping others, not just making money THE 4 KEYS TO WILL’S PERSONAL SUCCESS When Duquette started on his adventure the close-knit group that was banking huge in speaking and sales weren’t sharing their secrets. They kept those closely guarded. Yet, he found a way. And he credits his own success to four main factors. • Vowing to never give up • Modeling success wherever he could find it • Investing big in education • Just taking action
Realty411Guide.com
Duquette says the really significant quantum leaps came when he forced himself to step out of his comfort zone and chose to “pay more than comfortable with” for better training. In one case that meant putting $10K on a credit card to really learn how to take his game to the next level. And today, Will might not notice if ten thousand dollars dropped out of his billfold on the way to the podium. UNIQUE PERSPECTIVES ON REAL ESTATE Duquette trains real estate speakers and investors, and still invests in real estate himself. While you may find him gracing the stage at events in London, Prague, and Germany, Duquette’s home base is in Jacksonville, FL. While often overlooked by others; ‘Jax’ is the largest city in the contiguous United States, and the most populous city in Florida. It has also been praised by RealtyTrac as offering the biggest profit margins for house flippers. But you don’t have to tell Duquette that. He once bought a half a million dollar home with just $10 out of pocket, and has mastered a transaction engineering skill set that allows him to invest in many properties with nothing down. Duquette says it is all about “looking for problems and finding solutions.” While he says that world travel and international training has revealed that all people essentially have the same fears, challenges, and belief issues, he himself certainly has a unique perspective, and style, that is proving itself with dollars and changed lives. He claims to be perhaps one of the only people to not have lost a penny in 17 years of real estate investing. His high energy, experiential real estate events that include live deal making have produced profits for attendees before they are done with their homework. And the ‘Profits in Pretty Houses’ course is reportedly one of the first and only to include a flow chart so that investors are never stuck, or wondering what comes next. Looking forward Duquette says the market is just like it was seventeen years ago, only better. “Because all the fundamentals are right, but others are scared to take advantage of the opportunities on sale.” As well as noting that rather than hurting his business, “massive buying sprees by hedge funds have actually helped” his business, as “they have depleted inventory levels”, and make his properties more in demand. CHOOSE WHAT YOU WANT & DUQUETTE WILL UNLOCK YOUR POWER TO ACHIEVE IT… Will “Power” Duquette offers sales, confidence, and personal development training, real estate speaker training, speaker services, real estate investment courses, and oneon-one consulting. Find out how to get more of what you want at www.willpowerduquette.com. - Article by Tim Houghten -
PAGE 94 • 2016
reWEALTHmag.com
Probate Leads Provide New Leads, pg. 68
Land Trusts and the Savvy Landlord, pg. 69
ALTERNATIVE LEADS ARE THE SOLUTION Is there a way to solve the lack of leads currently occurring in the real estate market? There is. For real estate investors who want to continue to profit no matter the market, looking to alternative leads is the best strategy. These leads – found in the probate, divorce and bankruptcy industries – are the best way for investors to find homes and commercial properties despite the shortage in the United States. Probate leads are plentiful. With experts estimating that more than 30,000 probates are filed each month throughout the United States, each and every county has new options of homes, personal property, vacation homes and commercial real estate that are for sale. Executors, responsible for the sale of property held by someone who has passed, are under an obligation from their local court jurisdiction to sell the property in order to close the probate. What does this mean for you as an investor? For real estate investors, probate properties offer discounted prices, sometimes up to 30% to 50% off of current market prices, on homes and other property located in some of the most desirable areas of the region that you work in. Executors are generally eager to look at all offers for property as they need to sell the property in order to pay medical bills, taxes, legal fees and funeral expenses for their loved one. Divorce and bankruptcy leads are also another way to find great deals on property. Usually governed by the local court system, these leads can also provide excellent options for discounted prices. With divorce and probate leads it is critical to have your attorney review all of your documentation especially during your first experience working in this market. The language used in the sales documents can be different that is used in traditional offers due to legal requirements. Ask your legal counsel to ensure that there are ways for you to exit divorce deals if the parties do not cooperate. As an investor it is not wise to have your deal stalled due to marital discord.
real estate. When I was a younger landlord (with two young daughters) the last thing I wanted was an irate tenant (who was being evicted by the “owner.”) to come knocking on my door where I lived to seek retribution. With the easy access to courthouse records that the internet provides looking up the owner of a property is easier than ever. Many of the benefits to holding title in a Land Trust relate to personal safety like the example above. Another personal story to drive home this point was the landlady in Florida who called me and wanted to know how quickly she could put her property into Trust (and get the title out of her name). Seems that one of her male tenants was taking an interest in her. The tenant had looked her up online and found eight properties that she owned in her own name. Armed with this information the tenant was going to each property and knocking on the door looking for her. It never occurred to me before she called that titling your property in a Land Trust could help avoid a stalker! Being a property manager and not an owner is a MUCH better position to be in when dealing with tenants. It puts you in a different light. One with less authority and less ability to change things. It is similar to actors having agents to negotiate their movie contracts. Actors are good at what they do, but not necessarily good at negotiating on their own behalf. Furthermore, it takes confrontation out of the equation and always allows the agent/manager the ability to say, “The owner will not let me do that” or “I will talk to the owner about your request and get back to you.” This lets you back off and think about the tenant’s request with a clear head and a lack of emotion. I could give many more examples of how beneficial it is to hold title to your investment real estate in a Land Trust, but space limits me and I think you are getting the gist of my point anyway. So, do yourself a favor and DON’T OWN REAL ESTATE IN YOUR OWN NAME. There are NO advantages to owning real estate personally…only disadvantages!
ACCESSING ALTERNATIVE TYPES OF LEADS The best way to access these alternative types of leads is to use a lead service that can help you to locate the most current and viable option for your business. U.S. Probate Leads, the industry leader in lead coordination, offers probate, divorce and bankruptcy leads in every county in the United States. Our qualified, trained professionals visit courthouses to collect the most up-to-date information on what types of property is available through the probate. Using an expert service will help you to save time on trips to the courthouse and give you more time to visit properties and make contact with Executors. We offer a full range of services, including webinars, seminars, books, communication software and even individualized mentoring. Call us today or visit us at www.usprobateleads.com for more information. Realty411Guide.com
PAGE 95 • 2016
Randy Hughes, aka, Mr. Land Trust™ It is difficult to convey all of the benefits of using a Land Trust in a short article like this. I have been using (and writing about) Land Trusts for the last 40 years. If you would like to learn more about how to create your own Land Trusts, for FREE training go to: www.landtrustwebinar.com/411or email me at: randy@mrlandtrust.net for my FREE booklet, “50 Reasons to Use a Land Trust” or contact me the old fashioned way by calling 866-6967347 (I actually answer my own phone!) Randy Hughes, aka, Mr. Land Trust™
reWEALTHmag.com
Exclusive Interview with Rodeo Realty’s CEO, pg. 57
At Rodeo Realty this isn’t just evidenced by selling the best real estate on the planet, it is “being the best in ALL areas.” THAT MEANS: • Best Luxury Real Estate Website – ranked by Who’s Who in Luxury Real Estate • Best Marketing – with an in-house print shop with 30 team members • Best Internet Marketing – with an in-house team of 17 graphic artists • Best International Marketing – reaching 200M+ buyers, in 190 countries, monthly • Best Technology – with Cirrus Super Search for deep data, on the go • Best Personal Service – local expertise, global presence
OPEN THE DOORS TO YOUR SUCCESS IN REAL ESTATE… To reach your full potential in real estate; blaze your own trail, work hard, be consistent, give your best, leverage good people and the best tools. Want to see what a great real estate website looks like and view some of the most exclusive real estate eye candy in the world? Check out Syd’s site at RodeoRE.com, and download the free Rodeo mobile app. u The Benefits of a REIA by Steve Love, pg. 89
thing I’ve ever done. There’s nothing better than getting a call from a new investor who just bought his first house or just cashed his first check. I’ve gotten to know and become friends with the top trainers in the business. It’s been like a dream come true. Meanwhile we were asked by the founder of the other club I attended, Phyllis, if we might like to help run her club too. So now we run the evening club meetings Syd says quite frankly and firmly that “real estate agents and all day Saturday workshop events for two clubs. I not that want to serve their clients the best find that ability only am continually learning more about real estate investing at Rodeo Realty,” and that “if you’re not on the Rodeo but sometimes club members even bring us deals to joint Realty team that’s because you’ve got other priorities, and venture on them with. It’s a perfect scenario. are putting something else first, rather than serving your So now, because I started attending a real estate investclients in the best possible way.” ment club some 20 years ago, I can afford to not only do It’s hard to argue with that. > what I want, but I also have the TIME to live as I please. In my case, I go on fishing trips at least once a month and these trips may be for one day or up to a week. We go all over the West plus Alaska and Mexico. Since I love going on cruises, I’ve been taking up to five (5!) cruises per year all over the world. I especially enjoy the European cruises. Since I love rock and roll, I go with my concert buddy Jim often to concerts, most recently bands such as the Rolling Stones, Fleetwood Mac, Bob Seger and The Who. I can take our teenage boys to see their favorite bands like Green Day, Linkin Park, Slipknot and Fallout Boy. We go to lots of theater plays, For more information, professional sports (like the Angels call Randy Hughes at: or Clippers), movies and eat out a lot these days. We take regular trips to places like Yosemite, the Grand Randy Hughes Canyon, the Redwoods and the Mr. Land Trust Or Visit Online: mountains. And I can argue that it 40 Years Experience all started with real estate investment clubs. u
Learn from THE National Expert on how to use Land Trusts for Privacy, Profits & Asset Protection FREE Land Trust Webinar at:
www.LandTrustWebinar.com/411
866-696-7347
LandTrustsMadeSimple.com Realty411Guide.com
PAGE 96 • 2016
reWEALTHmag.com
HIGHEST QUALITY INVESTMENT PROPERTIES INVEST WITH CONFIDENCE SINGLE FAMILY HOMES • ACHIEVE IMMEDIATE CASH FLOW Highest Quality Product Fully and expertly renovated with details to attract the highest quality tenants. Highest Genuine Cash Flow Unlike others we give actual current income and expenses on each property. Highest Quality Metro Area • Highest U.S. employment growth metro. • Broad based economy. • High occupancy.
Price: $139,000 Rent: $1,450 Year Built: 2007 5 bed/3.5 bath/3,131 sq. feet
All Properties Direct from the Source All properties with clear title. Principal has $100M and 2,000 units of experience in DFW.
COMMERCIAL PROPERTIES • GAIN ECONOMIES OF SCALE Invest with as little as $50K! Excellent cash ow and appreciation. Tax sheltered income. Long term leases. Annual rent increases and renewal options. Easier to deploy larger amounts of money. Easier to manage professionally. Excellent innation hedge.
INVESTOR PROPERTY TOUR Sunday, Nov 22nd in DFW Spend the whole day guided by experienced investors. See examples of retail & industrial properties, rentals, p neighborhoods & more. realty411guide.com/events for more info
Preferred rates of return. Triple net with reimbursement for expenses. FREE article “Sell Stocks, Buy Real Estate” visit www.TomWilsonProperties.com for your free copy
Tom K. Wilson, President (408) 867-1867 info@TomWilsonProperties.com www.TomWilsonProperties.com
Surf’s Up with Rich and Kathy Fettke, pg. 16
and that they hope empowers tens of thousands more to realize the same Real Wealth that they are enjoying. Innovating, Disrupting, and Democratizing Wealth through Real Estate Investment Kathy Fettke was honored as one of the ‘100 Most Intriguing Entrepreneurs’ by Goldman Sachs at the Builders and Innovators Summit. She is frequently seen in the media via CNN and Fox News, is the host of The Real Wealth Show, and has become a bestselling author. This success is built on a refreshing approach to wealth building education, and a dedication to quality real estate investment opportunities. The network offers a wealth of resources from live events and webinars to market research, access to wholesale investment opportunities, and a pre-screened network of industry professionals. Yet, what really stands out is the Real Wealth Network Academy with free basic membership and an upgraded version for just $97 per month. That barely registers on the meter when compared to other escalating programs out there that can charge north of $40,000 for similar information. So how can they afford to do that?
Kathy Fettke’s bestselling book, “Retire Rich with Rentals, How to Enjoy on-Going Cash Flow from Real Estate so You Don’t Have to Work Forever,” can be purchased on Amazon. Learn more about these strategies online, simply visit www. RealWealthNetwork.com where you’ll get access to live events, free educational webinars, property tours, a list of highly-rated property managers nationwide and much more.
FAFE MEDIA 118 S. Freeman St. Oceanside, CA 92054
The Time is Now with Kent Clothier, pg. 64
What’s Next…
fafemedia@gmail.com | 760.717.7260
Realty411Guide.com
Kathy says: “We believe people should be investing their money in property, not expensive, outdated bootcamps they don’t need and won’t use. We have worked out a deal with our Academy speakers: We give the top CPAs, attorneys, insurance agents, and property managers exposure to our large network, in trade for their education and resources. We charge a nominal $97/month to pay for the administrative costs, video crews and a small profit. That small profit has us “walking the talk,” modeling passive income strategies. Like everything we do at Real Wealth Network, we barely mark up our products and services, but rather sustain ourselves from volume. We pride ourselves in offering higher quality education than any other real estate program for an affordable price. That adds up when thousands of people have signed up and end up receiving more value than they expected.” Key to their wealth-building philosophy is turnkey real estate investment for passive income. While turnkey real estate investing has been the go-to solution for wealthy and sophisticated investors in Europe for decades, it is still relatively young in the United States. This means many novice, and inexperienced operators attempting their hand at it. In contrast, the Fettkes have been doing this for 12 years, and have strived to constantly set the standard. Kathy explains their approach to ensuring sustainability and excellence includes: • Rigorous screening and vetting of property managers • Recruiting a Six Sigma Black Belt to oversee quality control • Only using licensed and bonded contractors • Independent inspections • Renovating to a superior like-new standard • Maintaining 6 to 12 months capital reserves for each property
Check out the Clothier’ companies online and get connected at KentClothier.com and RealEstateWorld Wide.com. Don’t miss ‘Kent Clothier’s Unlikely Rise to Successful Real Estate Investor’ on YouTube. Just be warned that this video has likely made more than one grown man cry, and may spark the instantaneous drive to track Kent down and find a way to work with him. u
PAGE 98 • 2016
reWEALTHmag.com
We’ve been looking for a way to refinance our rental properties. B2R was the answer.
Brian Evans Investor Plano, TX
Residential real estate investors aren’t used to having easy options for financing, re-financing and unlocking equity from their rental properties. Until now.
“B2R walked us through the process and made sure we were comfortable every step of the way.” - Brian Evans
At B2R Finance, residential rental mortgages are all we do. That means we’re committed to finding faster, easier and smarter options for you. For example, we provide blanket loans allowing you to eliminate multiple mortgages and “package” several properties into a single loan. We also make asset-based loans that consider the cash flow of your rental property rather than your personal debt-to-income ratio. In short, we provide innovative solutions that are tailormade for real estate investors.
855.710.0227
Nationwide Financing Up to 75% LTV Recourse & Non-Recourse Aquisition Line Available Up to 30-Year Amoritization ........................ PROPERTY TYPES Single-Family Residences 2-4 Family Units • Condos Townhomes • Apartments Mixed-Use
B2Rfinance.com
B2R Finance L.P., NMLS ID # 1133465, 1901 Roxborough Road, Suite 110, Charlotte, NC 28211. B2R Finance L.P. is not a residential mortgage lender. B2R Finance L.P. only makes loans with a commercial purpose and is not currently authorized to make such loans in all jurisdictions. Your specific facts and circumstances will determine whether B2R Finance L.P. has the authority to approve loans in your specific jurisdiction. B2R Finance L.P. operates out of several locations, but not all locations conduct business in all jurisdictions. Arizona Mortgage Banker License BK#0926974. Minnesota: This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat. §47.206(3), (4). Oregon Mortgage Lender #ML-5283.
no one cares more about your retirement than â&#x20AC;&#x153;uâ&#x20AC;?.
self-directed retirement plans & services
www.uDirectIRA.com (866) 538-3539