Realty411 Featuring Scott Meyers by REALTY411

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PUBLISHER Linda Pliagas PUBLISHED BY Pliagas Enterprises, Inc. VICE PRESIDENT Nikolaos K. Pliagas LEGAL COUNSEL Philip W. Boesch, Jr. Boesch Law Group. REAL ESTATE ADVISORS Steven Kendis, MLO Hector Padilla, GRI ADVERTISING Walt Adams Kasey Barrett Lori Peebles DESIGN DIRECTOR Dru Soriano EDITORIAL STAFF Tim Houghten Stephanie Mojica Karen A. Walker COPY EDITOR Bruce Kellogg Stephanie Mojica PHOTOGRAPHER John DeCindis CONTRIBUTORS Linda Pliagas Gary Massari Lloyd Segal Scott Meyers Michael Mikhail Edward Brown Randy Newman Kathy Kennebrook Stephanie Mojica Dan Kryzanowski Peter Vekselman Rick Tobin WEB MASTER Maria Landicho MARKETING Holly Lynn Rosa Houghten EVENTS & EXPOS Lawrence Ruano Michael Ringwald

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TABLE OF CONTENTS

REALTY411

Real Estate Investing Tips

The 3 Crucial C's for Success in Real Estate Linda Pliagas

Real Estate Investing: A Market Correction is Coming Gary Massari

You Can Sell a Property Without Completing Renovations Lloyd Segal

Profit from Self-Storage: Learn Now With the Industry Leader Scott Meyers

Stratton Equities: Hard Money Loans vs Fix and Flip Loans Michael Mikhail

Best Practices for Credit Bidding at Foreclosure Edward Brown and Randy Newman

FEATURED Scott Meyers

30 Profit from Self-Storage: Learn Now With the Industry Leader

Empowerment

Achieve Success with Your "Dream Team" Kathy Kennebrook

Empowering Your Investors to Retire Sooner Dan Kryzanowski

Geeking Out on Credit Repair & Finding Your Funding Credit Nerds

Wildcat Lending Helps Investors Roar Toward Their Goals With Fast & Easy Funding Wildcat Lending

Kick the Learning Curve to the Curb: Hit the Gas on Your Real Estate Goals Peter Vekselman

Interest Rate and Home Price Swings Rick Tobin

The 3 Crucial C's for Success in Real Estate By Linda Pliagas, Publisher/Editor

eal estate has been a big part of my life for many decades. Beginning with our first nomoneydown deal in Culver City, Calif., in 1993. I was a fulltime journalism student back then and only worked parttime, so we had a tough time qualifying for a $200,000 mortgage. My mother even had to co sign, and she was quite nervous that her 25yearold daughter and new soninlaw were buying an outdated 1920's pink fixer upper with a splotchy green roof and a

leaning front porch. What a sight it was! Everyone thought we were crazy, but I focused on the original stainedglass windows, the amazing 20foot living room beautifully plastered with thick stucco, and the unique builtin hutches in the formal dining room with elongated windows and classic French doors. We did not qualify for the mortgage at first. Luckily, our savvy agent was wellversed in creative deal making and asked the seller to carry a $50,000

Photo by John De Cindis

LINDA'S LETTER

Linda Pliagas, Publisher

second trust deed, thus helping us qualify for now only a $150,000 loan. We managed to qualify for that amount...barely! The property doubled shortly thereafter. Fastforward to 2010 and by then it had tripled. Along the way, we used our primary home to also pay cash for a vacation property on 2.5 acres that we purchased as a HUD foreclosure, which ended up tripling in value. After we cashed out of our primary home in the city (thus earning a taxfree profit), we were able to purchase for cash at half the price elsewhere. (TIP: We plan to do this same type of homeexchange strategy a few more times, so we can continue to make substantial tax free windfalls. The IRS tax code allows individuals to make up to $250,000 taxfree and up to $500,000 per couple, if they have lived in the home as their primary residence for two of the last five years.)

LINDA'S LETTER This is a fantastic way for adventurous individuals who can buy neglected shacks for cash (money talks) and turn them into spectacular homes for substantial taxfree profits... Wow! Do we live in the best country the world or what? The possibilities to make money in real estate are truly endless. The best part of all? They are sanctioned by Uncle Sam! The way I see it, it's our patriotic duty to take advantage of all these phenomenal opportunities given to us. It's noble to want to improve neighborhoods and provide safe, affordable housing to hardworking people, and the rewards can be substantial. Many of our tenants are in the military, as we have specifically purchased near our local air force base to provide quality housing to our amazing troops. What an honor for us to be able to do this! Folks, I implore you to take advantage of all these wonderful opportunities given to us. Our system is designed for real estate investors to succeed, but YOU need to take ACTION. When I wonder why people don't buy a rental property or invest in a building for their own business, three big C's come to mind.

"The possibilities for selfeducation are endless."

These three crucial C's are the basic tenets that every investor needs in order to be successful. 1. Credit 2. Capital 3. Confidence

CREDIT Let's start with credit. The importance of maintaining an optimum credit score cannot be emphasized enough. Your credit score is the blueprint of your life, literally! Skipped out on that last car lease payment and thought nobody would realize? Wrong, it's there! Paid the mortgage late five months in a row? Oops, there goes a 50point drop! Often the reason a credit score goes south is due to overspending and other bad habits, such as not being diligent in paying bills on time or perhaps only paying minimum payments. Honestly, we've gone through this a time or two, maybe three, oops. I'm human, my husband is too. 15

We all are. Who hasn't overdone it with credit cards at one time or another? But we learned, the hard way, that this bad habit restricts progress in portfoliobuilding. Be careful with credit. Your credit score should be the easiest thing to maintain because YOU have TOTAL control over it. Don't blame your parents for that lowball 620 score that's ALL YOU. It's wise to take responsibility and face those bill head on. Make that extra effort to stay on a budget and to set a day aside each week to pay bills and monitor the money. Guard you credit score carefully because these numbers are crucial to your career in real estate investing. One way to get around this is to partner with someone who has credit; however you will be expected to provide something else, like capital, labor and/or knowledge. I always strive for independence as an investor, so I urge each person to pay close attention to their own credit.

LINDA'S LETTER CAPITAL The first C is directly linked to the second C Capital. An investor who has a 750+ credit score will certainly have an advantage in securing funding over one with a 620 FICO. Although nomoney deals can be secured, most often, someone will have to put funds into the deal. Proper use of capital also provides investors with the ability to leverage, which is very important for building wealth... quickly. Leverage helps investors maximize their dollars and potential profits. Imagine securing a property with only 30% down and seeing that property appreciate by hundreds of thousands of dollars in just a few months or a couple of years. That is possible and real and has happened to us and others we know several times. Investors need access to capital partners who they can develop a working relationship with. I recommend looking at the capital resources in this publication. Other sources of finance include traditional brick and mortar banks, credit unions, and private individuals looking to lend their personal funds. Contacting a licensed mortgage loan offer/broker (MLO) is also

smart, as they have a wide access to financial institutions with multiple lending options.

education are endless. One your confidence grows and you've experienced success with a few solid deals, it's now CONFIDENCE important to now begin to give back to others. By sharing what They call it, "Analysis Paralysis". you've learned to date, you'll help That feeling of immobility birthed others who are starting out, plus from fear. That horrible feeling of reap lifechanging benefits. indecision, which prohibits When one shares their professional growth and personal knowledge, they become an wealth. "expert", plus at the same time, the exchange with The 3 Crucial C's other selfmotivated for Success in individuals can be Real Estate invaluable. Remember, when one teaches their trade the interaction with other curious minds, and the open discourse and dialogue, will help one learn even more. I truly hope these Confidence is developed, three C's will help you start or sometimes slowly oftentimes, rekindle your investment career. quickly by necessity. The best way Focus on these three crucial to be a selfassured professional is elements to get yourself on the to be an expert in your craft. right path for real estate success. Knowing and understanding your If I can help you or answer any trade inside and out will give of your questions, please don't you the power to take action. hesitate to call our office directly As an active investor or active at: 310.994.1962. You may also real estate agent/broker, one should reach me personally at dedicate daily time to learning. info@realty411.com. Whether it's scanning the newest I welcome your professional listings in your area, reading a book comments, inquiries and on negotiation, browsing the latest suggestions. Thank you, and I style magazines for remodeling hope you enjoy our new ideas, or driving for dollars in a Realty411 magazine. nearby city. The possibilities for self Linda

CREDIT CAPITAL CONFIDENCE

INVESTING

Real Estate Investing:

A Market Correction is Coming By Gary Massari

t’s inevitable. A market correction is coming. The market has been on a high for years now. In 2018 alone, the Dow Jones Industrial Average broke a record high 15 times. If history has taught us anything, it’s that the market cannot sustain those highs for that long without a correction. Real estate markets across the country are still very hot. Even with the “cooling” that some markets are seeing, real estate prices are still well above records and competition is hot. “A cooldown has been predicted for over in a year in our local market. However, I’ve yet to see it. Sure there are some longer list times for sellers but properties are still selling in record time over asking price.

It’s still a hot market,” says Eric Jones, Director of Sales and Marketing for Freedom Real Estate Group. With all that being said, the question on every wise investor’s mind: how can I prepare myself for the next recession? The short answer, diversify. The long answer, diversify into buy and hold, long term strategies. “The shortgame (fix and flip) is good. It’s instant return. But you get hit hard by the tax man. Buy and hold has some of the best tax advantages of any asset class,” Jones stated. “Depreciation, property taxes, mortgage insurance and more are all deductible expenses. Plus, with fix and flips, it’s simply not a longterm strategy. It’s not a way to build true wealth.”

To lessen the risk of any big swing in the market, the answer is to diversify your investment portfolio so all your eggs aren’t in one basket. The problem many individuals faced in 2008 was that most of their 401k or other retirement accounts were tied up in stocks and mutual funds. When the market tanked, so did their accounts. Now imagine if half of those funds were diversified into buy and hold real estate. For many, the outcome could have been vastly different. Here’s why.

duplex style rentals since it’s more private and familiar than a large apartment complex. Therefore, demand may actually increase in a down market which is a huge win for rental property owners. With all that being said, a down market is definitely not the time to sell your rental properties. It’s a buy and hold strategy. During a down market, it is always best to hold these properties unless there is some absolute reason you must sell. When the market begins to climb again, then you may want to consider selling to upgrade to another investment property in a better neighborhood or better yet, purchase two and double your cash flow. The best part of investing in rental properties is investors are wealth building while cash flowing. Very few investments offer this kind of opportunity. With a buy and hold strategy, you are receiving the benefit of monthly cash flow while also building a portfolio of tangible assets that will always – no matter the market – have value. “If you have the right plan, with a decent amount to invest, you can quickly scale up to a very healthy portfolio. We worked with a dentist who had $400k to invest and wanted to receive $10,000 a month in cash flow so he could retire. We built a plan and got him to his goal in three and a half years. He was able to retire early. However, not only did he keep receiving the cash flow each month, now he has tangible assets that he can sell off if he ever needed to and can pass on to his children and grandchildren,” Dani Lynn Robison, CoFounder of Freedom Real Estate Group stated. Something else to consider is how you are using the power of inflation to your advantage. Most 401k plans aren’t able to keep up with inflation. With the small returns and high managements fees, unless you are able to invest a lot in those funds, you may not even be able to keep up with the rate of inflation. However, with rental property, you are working with inflation to win in two ways. First, your mortgage payment doesn’t change. Let’s say when you purchased the property it was a $500 per month payment. If the market tanks, it’s still a $500 payment on a fixed rate loan. If the market is great, same payment. When the market is doing well, your asset, if all goes as planned, is increasing in value. You’re actually earning value on the asset while effectively reducing the value of the money you’re paying due to inflation. Second, you will likely be able to increase the rental amount between 1%5% per year. That’s additional cash flow and value you will be receiving yearly.

The key to cash flowing, rental properties is that even during a down economy, they’re still cash flowing at the same amount. In some cases, even higher. Let’s look at it this way. If you were getting an 8% return on your stock investments, and the market crashes, you’re likely going to be reduced to 2%4% if you are lucky. With rental properties, the rent amount stays the same. Your mortgage stays the same. Your property management fees, if you have them, stay the same. Essentially, if you were getting 8% returns on your property before, you’re still getting that. In a down economy, rents rarely go down. You may not be able to get rent increases during that time, but you will at least have a steady, consistent amount of cash coming in each month. Rental properties tend to weather a down market in a consistent or even appreciating way. Not necessarily appreciating in value of the asset but appreciating in terms of cash flow being received. In a bad economy, a few things are happening. People simply aren’t buying homes. Credit is tighter. People are scared. The pocketbook is squeezed. Instead of purchasing, individuals and small families tend to continue renting during a recession. In addition, those that may be losing their homes to a foreclosure turn to singlefamily or

Finally, it’s important to note that this is an investment and with any investment, there is inherent risk. No investment is guaranteed. However, real estate is one of the most proven, assetbased investment classes in history. Most millionaires were either made through investing in real estate or find large value in investing in real estate. As you explore this investment opportunity, look for markets that do not have super highs or super lows in market crashes (like 2008). States affected greatly were Florida, California and Arizona. One of the cities most notorious for being hit hard in the crash was Las Vegas. These may be markets to steer clear of. If a market crash occurs again, it may cause migration out of those areas resulting in rent losses. “Consider markets that may seem ‘boring’ like many in the Midwest including our market – Cincinnati and Dayton, Ohio. These have proven to weather a down economy and not have big drops in real estate values or population. These are the markets where you truly win.” Eric said. Diversification is the key to weathering a down turn in the market. More specifically, investing in buy and hold rental properties not only is a proven strategy to survive and even thrive in a down market, but one that holds many positive attributes such as consistent cash flow, numerous tax benefits, and true wealth building.

Gary Massari Leading REI Coach & Trainer Gary Massari is best described as a man with a long and successful past! He is a top real estate investor and trainer who ran a successful peakperformance school and trained over 3000 realtors, investors and loan officers to become top income earners. He was also the managing partner of the largest mortgage brokerage company in northern California. Then there were his years as a co host on the very popular radio show in the San Francisco Bay area where he taught financial literacy to over 25,000 weekly listeners. Gary helps to build his students, followers, and team members their own unique master plan to achieve their REI Wealth. He’s also a bestselling Amazon Author in four different categories, with more than 300 published works and the founder of Make Money Now Real Estate Investors. If there’s anybody in the know, it’s Gary. In fact, through Gary’s mentoring programs, he has had students become millionaires and build their own fortune 5000 companies. 20

But what makes Gary tick? Gary believes that a person’s success requires a few things: Hands on mentorship, community, education & local support. He has built an entire REI club and network around those concepts. For Gary it’s about giving the full experience to the student so they can actually get out there and succeed. One of his singlemost sought after programs is the “Ultimate Master Plan for Real Estate Investors”, which contains many parts that help one become a master of their own life and their own investments. His goal for you is to retire debt free, mortgage free and wealthy. Gary breaks your master plan down into these critical areas: ● A Personal Budget ● Debt Retirement Including Mortgage Debt ● 5Year Income Plan ● A Real Estate Purchasing Schedule for properties and notes ● A Net Worth Balance Sheet to measure their wealth as they grow it. One key service that Gary offers is his national REI Club where he provides to his membership all the key components of success that are so important to him: Hands on mentorship, community, education & local support. And his education is always exciting, thorough and top notch! Just look at some of these workshops: ● How to find hidden deals and beat your competition to the Bank, ● How to build their net worth and a create a debt free mortgage free retirement.

You Can Sell A Property Without Completing Renovations By Lloyd Segal, Director Los Angeles Real Estate Investors Club, LLC

ctually there are several exit strategies available to you that would avoid completing renovations. For example, you could flip the property “as is” without performing any repairs or renovations whatsoever. Or, you could complete only the repairs that are absolutely necessary and then sell the property. Or, finally, you could completely rehab the house and then flip it. Let’s explore each of these strategies separately. 1. Wholesaling. If you enjoy the hunt for properties and are good at negotiating deals, you can make money without doing any repairs or renovations at all. Using this exit strategy, you simply track down a property, put it under contract, and then turn around and sell the contract (“assign”) to another

investor for a profit. Once you establish yourself as a having contracts to flip, you'll have a ready source of flippers eager in taking wholesale properties off your hands. And, you’ll spend very little, if any, of your own cash! The process of finding properties and quickly reselling them to other flippers is called “wholesaling.” The advantages of wholesaling are simple: 1) You don't have to spend time and money performing rehabbing the property; 2) you’ll make money finding great deals for other flippers. The only disadvantages are that: 1) you won't make as much money on each deal, and 2) you could find yourself owning a house that you can't find a flipper to buy.

2. Repairs Only. In the alternative, you could make only the repairs that are absolutely

"These investors don't have time to find properties, evaluate opportunities, negotiate deals, or rehab properties. But you do, so take advantage of it!" 25

necessary. But then, before you begin renovating the house, you could flip it to another investor. For example, you find a property in desperate need of cosmetic repairs: paint, carpet, and landscaping. It could also benefit from major renovations, but you don’t have the funds. It's the smallest house in the neighborhood, and if you built an addition (i.e. another bedroom and bathroom) you could bring its value in line with the other houses and make a handsome profit when you flip it. The problem is that you only have $15,000 to spend, and you need to flip the house quickly before the holding costs overwhelm you. In this situation, your best exit strategy might be to invest $10,000 in carpet, paint, and basic landscaping, saving $5,000 for holding costs (or contingencies). Then, when you show the house to an investor, he will see the potential in the property and pay you a premium as a result. In this way, you may be able to double or even triple your $10,000 repair investment.

3. Partial Rehab. When doing a quick “downanddirty” rehab on a property, you’re not transforming it into a showcase home to sell to consumers. Instead, your goal should be to transform the home into a clean, investment property that would appeal to other investors. This means only replacing old or damaged carpet, painting the interior with neutral colors, thoroughly cleaning the entire house, sprucingup the landscaping, and replacing light fixtures. Flipping before all of the renovations are completed may reduce your profits, but it will also

save you time and keep your investment costs low. In fact, if you have little cash to invest, this might be your only strategy to profit on the deal. Later, when you've builtup your investment funds, you will have more exit strategies to choose from. At this point, you may be asking yourself, where do I find these investors? You can find investors by placing classified ads in your local newspaper. You can also find them by attending local real estate investment clubs. There is no shortage of investors looking to buy investment properties. Often these people don't know how to

"When doing a quick “downanddirty” rehab on a property, you’re not transforming it into a showcase home to sell to consumers. Instead, your goal should be to transform the home into a clean, investment property that would appeal to other investors."

find deals or aren't willing to do the work necessary to find them. Some are parttime investors who hold fulltime jobs. Others are brand new. They have cash to invest and resources to rehab a property. Some want to flip the property, while others are looking for longterm rental properties. Regardless, these investors don't have time to find properties, evaluate opportunities, negotiate deals, or rehab properties. But you do, so take advantage of it! The good news for you is that there are always investors looking to buy properties before, during, and after renovations.

Profit from Self Storage Learn How with the Industry Leader Featuring Scott Meyers

here are so many cool new changes happening around us. You may even be reading this while your Tesla is taking you to your next stop, or you’re waiting on an autonomous vehicle to deliver your latest online shopping purpose. Yet, there are something it just doesn’t seem smart to let others control for you. Like your financial future. If you do nothing, the world will still carry you along. Most likely to somewhere you don’t want to go. Automation and passive investing can be great. Yet, if you want to control your future finances, lifestyle and time, then, like gripping the wheel of a freshly restored Mustang, it is high time to seize the reins. This is true whether you already have a really nice job with an enviable paycheck and a nice nest egg in your 401k, you already have a pretty good sized real estate portfolio, or you’re finding life’s runaway train hurtling you along at a dizzying pace and know you need to take action to change course, or at least stay on the rails of success.

The Problem Okay, there may be more than one, depending on how you are handling your money. It really boils down to either needing more money and time, or protecting the gains you’ve made in these areas. Then really finding fulfillment in life. If you’re reading this, you’re already aware of the need to invest in real estate to get and stay ahead. It’s not a nice to have today. It’s a must. Of course, doing it, and doing it well, can be a whole different rubix cube to solve. There are lots of ways to boost your income and upgrade your life through real estate. Some of the most common can involved those dreaded tenants, toilets and lots of trash. Others struggle with going it alone. Or find that through all of the DIY figuring it out on their own have just been creating a massive new jobs for themselves. One that for sure includes nights, weekends and all the holidays. Even if it is very well paid.

1 in 10 US households use selfstorage. It is a part of every community in America. It has performed great in the good times, and is only second to performance to liquor in a recession.

Others who have been seeing great results from their real estate ventures over the past decade, are also now wisely questioning what’s next. It seems like 90% plus of those in real estate today from gurus to property managers and retail investors have only been in since 2008. Let’s be honest. It has almost been impossible not to make money during these years. You needed no talent, and may not even the ability to write good deals. While some might deny or minimize it, most forms of real estate will dip again. That requires a plan to sustain things and a plan B to generate cash and revenue. If you want to be a major player through the next recession, you might even need a new A game.

When You’re Blessed with Much, You Give Much & Want to Bring Others with You Those that know Scott Meyers may admire him most for all of the missions and charity work he does and backs. He and his family really appreciate how blessed they’ve been with their adventures in real estate. In turn giving back is a big thing for them. Now they are on a mission to help take as many others along with them as possible. That doesn’t just mean achieving financial independence and what many would consider a success lifestyle, but more importantly, to be able to get out there and help others. Not just by donating to good causes, but going and volunteering too.

Today, this is mostly thanks to what Bloomberg has called the best real estate investment of the past decade. One with ‘riskless returns’.

Scott’s Journey

While working in the telecom industry, Scott Meyers discovered house flipping. He took on his first deal with creative financing, and found his way in with an assumable VA mortgage. He kept doubling what he was doing in real estate. He graduated from the intensity of flipping houses to the ‘passive income’ of multifamily investing, and built a portfolio with 400 apartment units. Yet, all of the headaches and hassle of dealing with tenants was still a drain. Regardless of all the money that was coming in, he was really tempted to quit. Still, he knew the benefits of real estate and how essential they are. So, he started looking at other strategies. What types of real estate don’t mean a lot of hassle, time and cost to get nonperforming tenants out, and produce more real passive income? Parking lots is one, but they aren’t a great value add play, and cars and parking is really on its way out thanks to Uber

and new green initiatives. That left one solid option.

The Cinderella of Real Estate Investing Scott landed on selfstorage. The often neglected stepchild of real estate, but which actually delivers some pretty magical and dazzling advantages. 1 in 10 US households use selfstorage. It is a part of every community in America. It has performed great in the good times, and is only second to performance to liquor in a recession. Think about it. How many people are about to get forced to move in the next crisis? Recent stats from ATTOM Data, put the number of homeowners with serious negative equity (owing at least 125% of their property value) at over 5.2M. It is probably far higher than that now. That’s just one form of distress in the current housing market. Even if we avoid a crisis, people will be glad to take on more storage. That doesn’t count the growing demand in the storage space from drop shippers and ecommerce companies. Nor all the vehicle owners who are moving to buildings with no storage or parking or whose HOAs have banned extra and over sized vehicles. Second and third cars, contractors’ vehicles, boats and RVs. In fact, with a little creativity, Scott says there are numerous ways to add value to selfstorage properties today, and generate much larger incomes.

If you’re interested in checking out this space, you’ll want to see Scott’s recent blog on Where to Find Self Storage Facilities for Sale. His website also offers a Self Storage Analysis and Valuator tool for sizing up potential opportunities.

Investing in SelfStorage Real Estate Scott admits he has made a lot of mistakes over the years, which is a main driver behind what he does now in investing his time in sharing this knowledge and expertise. He doesn’t proclaim to be a guru. Though he wants to help others avoid the mistakes he made, and ensure they are successful along the way, if they decide this niche is right for them. This includes a home study course, live events where you can meet Scott in person, and a mastermind group if you already in this sector and want to scale. He also sometimes offers access to private placement or syndication opportunities to qualified investors, as well as helps connect and partner up those who want to do this themselves, but may need someone with more experience on their team. Find out about all these resources and more about Scott at SelfStorageInvesting.com

Some of those are: ● Selling moving supplies ● Providing renters insurance ● Propane tank fill up services ● Wine storage ● Fine art storage ● Moving truck rentals ● Portable storage pods ● Valet storage ● Electric vehicle charging stations ● Cell towers ● Generating energy with solar roofs

In addition to existing selfstorage properties with lots of value add potential or new construction, there are a booming number of mixed use opportunities. All of these strip malls and bankrupt big box stores. Now selfstorage can be an anchor and major money maker, combined with rightsized retail, laundromats, restaurants, coworking spaces and business centers, as well as pack and ship services. While Scott has virtually done it all, today, in his own investing he mostly focuses on $11M plus deals, institutional grade properties, value add, and partnerships. After being stabilized, there is also a big resale market for these properties from bigger institutions and funds craving the safety of real estate and the attractive yields. As of now, those big guys only hold about 10% of the self storage market, meaning a massive opportunity ahead. Scott has taught for ‘Rich Dad’ Robert Kiyosaki, and was a REIA president before being asked to move into education to share his experience in this space. That has morphed into software, syndications and both online and live training, in this niche which few really know well. 32

Stratton Equities:

Hard Money Loans Versus Fix & Flip Loans New Jersey based mortgage lender, Stratton Equities, reviews Hard Money and Fix & Flip Loans Programs

This type of loan doesn’t have as many restrictions as one might think considering that it’s just money, so no more having to worry about bankruptcies, foreclosures, collections, etc. Due to the lack of guidelines and underwriting, a true Hard Money Loan is generally capped at 65% LTV or less. For example, let’s say you have a home worth $1M, if you want $500K against it (50% LTV), you’re able to receive the money within 12 weeks (from day of application), commonly as a first lean position because it’s just money. It’s normally in the form of a Bridge Loan, which is short term financing in a period of 1224 months.

egardless of the type of investor you are, Stratton Equities (www.strattonequities.com) has an array of loan programs that are designed to meet all your mortgage needs. Our background in real estate, mortgage lending, and finance, puts our expertise and experience far above our competitors. We bring something dynamic to the table, and we help you close your loans quickly, efficiently, and professionally. Hard Money and Fix & Flip Loans are among the most popular programs that investors utilize for their real estate investments. Although, they are two different programs, many in and outside the industry believe them to be the same loan…but this is the furthest thing from the truth.

The reason why people confuse Hard Money Loans with Fix & Flip Loans, are because both the loan and the laws are very similar they are both private money to an investment property.

Hard Money Loans A true Hard Money Loan (www.strattonequities.com/ hardmoneyloanprograms) is an assetbased loan, which means the financing is based on the Loan to Value (LTV) of the Asset. Unlike the Fix and Flip loan, it doesn’t go through full underwriting and there’s no minimum FICO requirement for the borrower, as it doesn’t have many guidelines and criteria.

Hard Money and Fix & Flip Loans are among the most popular programs that investors utilize for their real estate investments. One of the reasons why Hard Money Loans are for investment properties ONLY, is due to the high cost regulations and predatory lending – you can’t put such high interest rates and cost on an owner occupied property. In certain states, there are nonjudicial foreclosure laws, which allow a Hard Money lender to get their money back quickly if the borrow defaults on the mortgage. These foreclosure laws make the lender more comfortable doing highrisk loans, usually the money is not sold on the secondary market – the lender holds the note, they don’t sell the paper.

Fix & Flip Loans Fix & Flip Loans (www.strattonequities.com/fixandflip) are also assetbased loans, however they utilize more underwriting guidelines and criteria. While Hard Money

Loans focus solely on the asset, Fix & Flip loans look at both the asset and the borrower. The reason why people confuse Hard Money Loans with Fix & Flip Loans, are because both the loan and the laws are very similar they are both private money to an investment property. Virtually all fix & flip and hard money loans are funded by hedge funds, the money comes from the same place, but the underwriting is different. Contrary to Hard Money Loans, Fix & Flip Loans are usually sold on the secondary market and goes through a full underwriting with tighter guidelines. For instance, depending on the lender, Fix & Flip loans have a minimum FICO requirement. Additionally, the borrower can’t have late payments, foreclosure, judgments, or bankruptcy on their credit for 2436 months. Furthermore, a Fix & Flip loan is a rehab loan, a loan that you utilize to acquire a property and then receive the funds to rehab that property in short term financing (1218 months).

Virtually all fix & flip and hard money loans are funded by hedge funds, the money comes from the same place, but the underwriting is different. Meet Michael Mikhail Michael Mikhail is the Founder and CEO of Stratton Equities, the nation’s leading hard money lender to national real estate investors, with the largest variety of mortgage loans and programs nationwide. Having launched Stratton Equities in early 2017, Michael has always been an entrepreneur and innovator in the real estate market, purchasing his first home at 19. A serial entrepreneur with a foresight for business opportunities, Michael had a slew of small businesses prior to launching Stratton Equities. One of his most prolific ventures was a car wash connected to a gym he was affiliated with in Florida during 20012002 while attending college. It wasn’t until he graduated from Florida State University with a degree in Business, that he officially joined the mortgage industry in 2003 and decided to travel to explore his options globally. After travelling to 19 countries in 5 years, Michael knew two things; he wanted to start his own business and launch it in the United States. He knew that moving back to the states was the best place he could start something small and grow it into something infinite. In 2017, Michael noticed how the mortgage industry had transformed after the regulations presented from 20082012, and knew it was time to set out something on his own, thus creating Stratton Equities. Under Michael’s leadership, Stratton Equities has grown into one of the biggest leaders in the Mortgage and Real Estate industry across genres and platforms.

Stratton Equities As the leading Nationwide Direct Hard Money & NONQM Lender, our reliable and professional team aims to help all real estate investors succeed. Our programs support projects like hard money, fix & flip, stated income commercial loans, blanket loans, and more! In 4 simple steps, you can apply for your mortgage and hopefully get approved quickly! For more information on our services, please contact us today at (800) 9626613 or visit our website at www.strattonequities.com

Best Practices for Credit Bidding at Foreclosure By Edward Brown and Randy Newman

ou currently hold the first mortgage on a rental property in California. The borrower is behind in payments to you and has disregarded all communications from you. You decide to file a notice of default to start the foreclosure process. Three months lapse, the sale has been set, the date of sale approaches, and you want to be strategic in deciding how best to proceed. You start asking yourself the following question: how much do I bid at the foreclosure sale? As the foreclosing party, you are allowed to "credit bid", meaning that you are able to bid as high as your note [including accrued interest, late fees, costs of foreclosure, etc.] without having to come up with actual cash at the sale. In California, other bidders, including non

foreclosing junior liens, must pay 100% of their bid in cashier's checks or the equivalent. (As a side note, this is the reason most bidders will ask their banks for many cashier's checks in varying increments, as the trustee handling the sale does not give back change at the sale. For example, if a bidder asks his bank for two $100,000 checks because he believes the bid will exceed the lender's credit bid of $100,000, and he bids $140,000 at sale, the trustee will not immediately give back the overpaid amount [in this case, $60,000]; the trustee will return the overpayment in about seven to ten days after the sale. For this reason, the bidder should obtain multiple cashier’s checks in various denominations so as not to overpay in the bidding process). At first glance, the foreclosing

party may think to fully credit bid what he is owed, especially if the property is worth considerably more than the amount owed to the lender; however, there are other factors to consider. What if the lender is way off in what he believes the property is worth? Sometimes, a property that is a bit esoteric is much harder to value than one thinks. Does the lender want to keep the property if she is the high bidder? Does she want to sell it right away upon owning it [should she be the high bidder]? Was there a personal guarantee on the note that is being foreclosed on? What is the current condition of the property? Is there a recent appraisal on the property? Are there any IRS liens attached to the property? These and many other questions must be considered when you are the foreclosing party.

Below are some general ideas/concepts to discuss with your real estate attorney (it is suggested that you hire an experienced attorney who is very familiar with the laws on foreclosure) when embarking down the foreclosure path.

becomes the owner for $400,000. Typically, all junior liens are wiped out. However, with the postsale right of redemption, the IRS has 120 days from the date of sale to redeem the property; that is, the IRS can pay the foreclosing lender only $400,000 and force the sale to the IRS. Now, where the foreclosing lender thought they were going to get a windfall, they will actually suffer a loss of $160,000 (the amount they were owed less the amount they received). When a junior IRS lien appears on the public record and there is significant equity in the property, a full credit bid ($560,000 in the above example) should be made in order to protect the foreclosing lender’s interests. What if there are no government liens on the property? There are some potential advantages to credit bidding less than the total amount owed. Below, we discuss a few. We will be using the same assumptions as above, with one caveat: no federal tax lien appears on the property.

IRS/Government Liens First, we believe that the only time to open with a full credit bid is if a federal tax lien exists in a junior position (one needs to check with their attorney as to other government {or quasi government} liens, if the same rules apply). The reason for this is that, although the IRS lien may not have priority to the bidder's lien due to the IRS lien typically being recorded after the foreclosing lien was in place, the IRS has a postsale 120 day right of redemption; thus, if the end bid is less than what is owed, and the IRS exercises its right of redemption, the foreclosing party may experience a potential loss.

Taxes

For example, let's assume the following:

Without a federal tax lien on the public record, it makes sense from an income tax standpoint to open the bidding lower than the amount owed to the foreclosing lender. With a full credit bid, the lender may be subject to paying income tax on the interest owed to the lender even though the lender did not receive any cash. By opening the bidding lower, the lender would not have to pay taxes on the unrealized interest and would have a valid argument that the property is worth less, resulting in a lower basis (remember, the property reverted to the foreclosing lender for the opening bid). If the lender were to then sell the property after holding it for at least one year, the lender may have a longterm capital gain which is usually taxed at a rate considerably lower than ordinary income.

(a) On February 1, 2018, a first position deed of trust is recorded in the principal amount of $500,000. (b) On March 29, 2018, a second position deed of trust is recorded in the principal amount of $75,000. (c) On June 29, 2018, the IRS records a Notice of Federal Tax Lien in third position in the amount of $50,000. (d) On December 1, 2018, the borrower misses the first interest payment and fails to make any subsequent payment to the lender. (e) On January 30, 2019, the lender starts the foreclosure process. (f) The foreclosure sale is set for May 29, 2019. (g) The foreclosing lender is owed $560,000 (including principal, interest, late fee, and foreclosure fees) (h) The foreclosing lender believes the property to be worth $700,000. If the foreclosing lender opens the bidding at $400,000 (possibly to establish a low basis upon possession of the property if the property reverts), and no one else bids at the sale, the foreclosing lender now 46

the damage was intentional, the lender may have no recourse. If the property reverted to the lender for less than what was owed, the lender maintains an insurable interest in the property and can make an insurance claim

Personal Guarantee With entity borrowers (e.g, a corporation or limited liability company), lenders sometimes obtain a personal guaranty from the entity’s principals as a condition to making the loan. If the property reverts for the full credit bid, then nothing else is owed to the lender and they could not seek to collect additional monies from the guarantor. By underbidding, the lender may very well preserve its right to seek remuneration from the guarantor as the property was not worth what was owed. The lender may also be able to seek compensation from the guarantor for any damage done to the property, whether negligent or intentional.

Insurance Proceeds The foreclosing lender typically is unaware of the condition of the property when the foreclosure begins. There may very well be damage to the property. Well, you say, that is why I am listed on the certificate of insurance in the mortgagee section. And you would be right. As the mortgagee, you have an insurable interest in the property. The insurance is to ensure that the lender is made whole. Well, if the foreclosing lender uses a full credit bid, then the foreclosing lender has, essentially, been paid in full. If damage is found on the property after the foreclosing lender becomes owner of the property, the lender may very well be out of luck. The insurance company can deny the claim on the basis that the lender’s full credit bid made the lender whole and that the lender’s insurable interest terminated when the property reverted. Unless the lender can prove that

Generalities and Summary

Meet Edward Brown

In general, keep in mind that a lower opening bid may entice others to begin bidding and create a true auction. The foreclosing lender is not prevented from bidding over and above the opening bid. In fact, the foreclosing lender is allowed to continue to credit bid up to the total amount it is owed; it does not have to accept anything less. Additionally, should the foreclosing lender desire to bid over what it is owed, the foreclosing lender can come to the sale with cashier's checks in the same fashion as the thirdparty bidders. In summary, it appears that best practices dictate that the only time the foreclosing lender should make a full credit bid is when an IRS lien appears on title in a junior position. Even then, the lender needs to investigate the value of the property, the IRS lien, and the likelihood that the IRS would exercise its right of redemption. Many times, the IRS will choose not to exercise its right, and may possibly negotiate its claim, but only a thorough and thoughtful analysis should come to the correct conclusion as to the correct course of action. Other than potential government liens against the property, most foreclosing lenders would be prudent to start off credit bidding less than the entirety of what is owed. Remember, the credit bidder can always increase his bid....at least, up until the time the trustee says, "Sold!" Again, please consult with competent counsel prior to determining the correct amount to underbid in order to preserve as many rights as possible.

Edward Brown currently hosts two radio shows, The Best of Investing and Sports Econ 101. He is also in the Investor Relations department for Pacific Private Money, a private real estate lending company. Edward has published many articles in various financial magazines as well as been an expert on CNN, in addition to appearing as an expert witness and consultant in cases involving investments and analysis of financial statements and tax returns Edward Brown, Host The Best of Investing on KDOW AM1220 on Saturdays at noon 21 Pepper Way San Rafael, CA 94901 4152990330 ebrown1111@aol.com

Meet Randy Newman Randy is the president of Total Lender Solutions.

Achieve Success With Your “Dream Team” By Kathy Kennebrook (Marketing Magic Lady)

such as “bird dogs”, Realtors, mortgage brokers, promotional companies who will supply your business cards, signage, tshirts and whatever advertising materials you need, and people who will do your direct mail campaigns for you. You also need to add to the mix the account representatives who will handle your classified and display ads in your local newspaper and shopper guides. You also need to have someone who can help with placing signs, flyers and business cards around town for you. The more you can automate this part of your business, the more deals you’ll be able to do more quickly.

have been asked a lot lately by real estate investors about how to create a dream team for their business. Putting your “Dream Team” in place while establishing your real estate business is one of the key steps to developing a successful real estate investing business. Your dream team is going to consist of those people or vendors who can help you find deals, provide funding, get your deals closed, fixed up and then sold or leased quickly. Having your dream team in place and being able to close deals quickly will give you a distinct advantage over your competition by allowing you to complete deals they simply won’t be able to finish in a timely manner. The first element you need to think about is your marketing team. Your marketing dream team will include the people who can help you locate good deals,

“Success is dealing with people as they really are, not what you would have them appear to be.” 53

Once you put your dream team in place, you’ll be able to close more deals more quickly and easily than you ever imagined. Next, your dream team needs to include a title agent and/or a real estate attorney. These people are going to insure your deals close smoothly and with a clear title. A real estate attorney can help you to solve a lot of problems that can arise during a closing, such as a title glitch, a survey problem, or estate and probate issues, just to name a few. As you develop a relationship with your title agent and/or real estate attorney, they will become a major asset to your business by being better able to work oneonone with your sellers and you to make sure all your deals close as smoothly as possible. You also need to make sure that your title agent and/or real estate attorney are bilingual so they will be able to work with your Spanish speaking sellers as well. This part of your team is one of the most important. If any part of a deal is going to fall apart it is going to be during the process of closing. Make sure you choose the best in the industry to close your deals from the very beginning, even if it costs a little more! Using the same “team” to close all your deals for you will give

you credibility as a real estate investor both with the sellers you are dealing with and with other vendors you will count on to bring you deals, such as Realtors or mortgage brokers. When you use the same people to close deal after deal for you, they will be willing to go the extra mile to help you in any way they can to get the job done. In addition, they will be able to communicate with one another concerning problems without your having to get involved. Some of the other vendors you’ll need to have on your team include a surveyor, a pest control company (for those states that have termite inspections) private or hard money lenders, an insurance agent, an appraiser and a home inspection service. You will add to that list a mortgage broker, a Realtor and any other vendor that might be unique to the area you live in. These are all people you need to have in place to help you get your deals closed as efficiently as possible. A friend of mine once told me, “Success is dealing with people as they really are, not what you would have them appear to be.” Know, beforehand, the strengths and weakness of your dream team. 54

Establish a rapport and relationship first. Dream team success is greatly affected by lasting relationships. These do not happen overnight. Remember, success breeds success. Create your dream team from only successful people. The longer you work with the same vendors in your business, the more credibility you build along the way. Don’t keep switching vendors from deal to deal just because someone is a little cheaper. Your ability to close quickly can make or break a deal for you. There have been many times where I was able to work with a seller instead of another investor because I was able to close within days instead of weeks. Sometimes a seller’s circumstances dictate that they need to close within days. If you can’t accommodate them, they will find someone who can. Another reason you want to have your dream team in place is because they will work together for you without you having to be involved in any of the headaches of a closing. It’s rare that I’m ever involved in any of the details of a closing until the closing date. The way I handle my “dream team” is this: each member of my team knows who all my other vendors are and they have contact information for each of them. When a problem arises with a closing, they are able to work together to solve it without any involvement from me at all. This is a great way for your closings to be handled on “autopilot” almost, giving you more time to create more deals or do other things that you want to do.

Meet Kathy Kennebrook

You'll also want to have your dream team in place to help you to sell or lease properties rapidly. The members of this part of your team may include a Realtor, a sales person of your choosing, someone to handle marketing of the property, a mortgage broker to get buyers prequalified for you, and a good rehab crew to get your properties ready for sale or lease. You may also use a property management company to handle your leases for you on properties you choose to keep. Make sure that all of the members of this group are as creative as you are when it comes to getting things done and properties leased, sold and closed. Other members of your team may also include wholesale buyers who will purchase properties from you without you having to do any of the repairs. This is a good way to make money quickly and easily in the real estate business. As soon as I put a property under contract to purchase, I know exactly what my exit strategy is going to be, so when I close we are ready to move onto the next phase, the rehabbing, the selling or leasing of the property. Having your dream team in place is an excellent way to streamline your business to enable you to do more deals faster and make more money. Once you put your dream team in place, you’ll be able to close more deals more quickly and easily than you ever imagined. For more information about Kathy Kennebrook’s products for the real estate investor be sure and visit her website at www.marketingmagiclady.com While you are there be sure and sign up for Kathy’s FREE monthly newsletter and receive an additional $149.00 in marketing tools absolutely free!!

Kathy Kennebrook is the ultimate success story. She spent over 20 years in the banking industry before discovering the world of real estate. After attending some real estate seminars this 4 foot 11 mother of two got really excited and before you know it she’d bought and sold hundreds of properties using none of her own money or credit. Kathy holds a degree in finance and has coauthored the books The Venus Approach to Real Estate Investing, Walking With the Wise Real Estate Investor, and Walking With the Wise Entrepreneur which also includes real estate experts Suze Orman, Robert Kiyosaki, and Dr. Wayne Dyer. She is the nation’s leading expert at finding highly qualified, motivated sellers, buyers and lenders using many types of direct mail marketing. She is known throughout the United States and Canada as the Marketing Magic Lady. She has put together a simple stepbystep system that anyone can follow to duplicate her success. Kathy has been speaking throughout the country and across Canada for over 14 years and has shared the stage with Ron LeGrand, Dr. Phil, Dan Kennedy, Mark Victor Hansen, Ted Thomas and Suze Orman to name a few. Kathy is going to share with you how she generates a seven figure income by mailing a handful of letters throughout the year to highly selected targets by knowing exactly what to send them, who to send them to and exactly how to deliver her message. She will teach you the secrets of prescreening and automating your marketing and follow up systems to put your entire Real Estate business on autopilot.

Empowering Your Investors to Retire Sooner

Tips on Sponsorship and Syndicates By Dan Kryzanowski

My Journey to Financial Independence

so mean and life was wonderful as a child in the 20th century. I was also very fortunate that my parents had secure jobs high school principal and social worker with pensions in perpetuity! Grit was (and is still) a valued trait in northeast Pennsylvania (aka NEPA), with NEPA known as coal mining community with strong cultural ties and traditions. There was a solid deference to topdown organizations and assumption of middleclass comfort.

Who do I (or you) have more in common with, Joe Biden or Mitt Romney? Putting politics way aside on my response, my answer is both. Speaking with my business hat on, I morphed from Joe to Mitt.

The Early Days While like Joe, I did grow up on the “mean streets” of Scranton, Pennsylvania. Actually, the streets were not

Dan Kryzanowski Executive Vice President Rocket Dollar

In terms of real estate and investments, the primary residence was the only “alternative” asset for the supermajority. This held true for the singleearner family or highflying businessman that made sixfigures in the early 80s. That said, the immigrant sense of adventure shined with the true immigrants (i.e. firstgeneration Americans) born in the early 1900s. My great aunts and uncles strongly valued family gatherings, so purchased land and built houses outside of town. My entrepreneurial spirit flickered early, though primarily in the “nonprofit” sense, to provide opportunities for my peers. I co founded and stood up programming for a youth leadership group under Hugh O’Brian Youth Leadership (HOBY), and served as matchmaker years before LinkedIn and Facebook. Overall, life was wonderful as a child and teenager in NEPA in the 20th century.

Early Career Sometimes it pays to be lucky, being in the right place at the right time with the right people. I spent

college and my twenties studying and living in three countries (traveling to another 20), ten US states, and locations such as Martha’s Vineyard in the summer of 1998 to Austin, TX prior to the current (infinite?) population boom. I also picked up degrees at Wharton and Thunderbird and benefited immensely from a decade at Merrill Lynch and GE Capital. Life was good and I quietly built up a sizable 401(k) and healthy Roth IRA. Stocks trended upward, public REITs paid double digit dividends and I could receive a whopping 6% on a riskfree Certificate of Deposit (CD)! I felt very “diversified” and sophisticated

within the comforts on the Fidelity online portal.

Turning Point While 9/11 was an obvious shock (I worked at 4 World Financial Center) and wake up call to potential horrors, daytoday living (and investing) in the mid 2000s was quite comfortable. That, of course, all changed in September 2008. The curtain fell on the Wizard of Oz, and what was behind the curtain was not pretty (i.e. “trusted” institutions). Backing up a little bit, it should be noted that I rarely go against my gut feeling, and when I do it tends to put my entrepreneurial and investing endeavors on hold. Instead of remaining in Austin in mid2008 to be at the forefront of the first true “organic” tequila, we ended up back in the northeast, paying $2,000 monthly for a condo with a view of a wall in Stamford, CT (when I literally could have bought a house in east Austin for $40K). Fast forward three winters, the reintroduction of state income tax, and dozens of pints for friends laid offer during the financial crisis it was time to return “home” to Texas.

"Sometimes it pays to be lucky, being in the right place at the right time with the right people." 61

Keeping It Weird Austin, and Texas in general, has a very educated investor base, with folks forming all types of syndicates to invest in everything from conservative multifamily preferred loans to restaurants that cater to dogs and comedy tours (“Ha”, said my CPA, when we wrote off this investment). I immediately cannonballed into both ends of the pool, opening a SelfDirected IRA (SDIRA) to invest in highyield/lowrisk real estate and effectively crowdfund some of my dividends and piggybank savings accounts into hotel/bar/restaurants across Austin, some of which we also own the dirt. Overnight, I morphed from Joe to Mitt. Regardless of deal type, what struck me most was the commonality and comfort of each deal lead to sponsor a syndicate. In the early 2010s this was still a grassroots effort, now aided by various Meetups and crowdfunding platforms. The wild card, though, which has yet to scratch the surface is the “green tsunami” of $10T (yes, trillion) that individuals will shift from stagnant, nameless mutual funds to sponsors/syndicates, with a strong percentage of these funds going towards real estate.

if you monthly rate went up by a whopping $7. Now with both hands in the air (i.e. the universal “it’s good” on a PAT), you have a taste into the beauty of selfstorage and natural attraction to invest in a storage facility with your friends and family. Pinnacle Storage Properties, founded by Uncle Bob’s veteran, John Manes, offers the simple blueprint on how to sponsor a deal. First, assuming you are liked or of greater importance, respected then you should have a natural following of 100+ interested individuals who will engage based on the high level of competency and character you exhibited throughout the years. Second, keep it simple. Unless a single person is willing to take all the equity off the table, then there should not be multiple share classes on your initial deals (or even on future deals or initial fund). Likewise, this eliminates the perception (and possible reality) of preferential treatment of your Grandma’s $50k on Day 1 vs. an

Storage, Baby! Raise your hand if you or somebody you know rents a storage unit. Raise your other hand if you would rather spend Memorial Day Weekend on your boat vs. changing storage providers

ex coworker funding the final $250k from her SDIRA. Finally, set parameters on commitments. Make it crystal clear that you need $X by Y date. That said, it is always best practice to communicate a “funds due date” a good 1430 days before your true ‘D Day’, as is is very common for your next door neighbor’s check to get lost in the mail. Assume also that 10% of commitments will fall through, so either be oversubscribed or be prepared to front or possibly invest that final 10% of equity out of your own pocket.

Six Figures in Six Minutes Did you know you can get 6 figures in 6 minutes? Yes, it’s true! As referenced above, assuming you have a reasonable number of potential investors (e.g. 100 or more), then a simple email or mention in your deal packet should bring you a few checks from your investors’ “forgotten trillions”.

In every deal I sponsor, and even when I do not have a live deal, I always educate any potential investor that s/he may use their retirement dollars to invest in my upcoming deal. Tommy Prate of Magnify Capital is a longtime evangelist of enhanced retirement accounts (Solo 401(k), SDIRA), empowering both his investors and ‘Magnifiers’ (those sourcing deals with boots on the ground diligence) with the knowledge that they may invest in his current/next deal with their retirement accounts. Manes/Pinnacle also regularly receives 15%25% of equity raise from SelfDirected accounts. The added bonus, and ease, of “selling” the concept of retirement accounts is that these dollars are likely locked up (i.e. cannot withdraw without early distribution penalty) for the next 525 years, so the investor has no urgency of receiving (~demanding) his principal back. Secondly, with a checkbook controlled SDIRA, the investor can easily reinvest dividends or have a bit of fun investing smaller checks in other real estate and

private deals, while maintaining all the benefits of a traditional retirement account. Play this to your advantage, and you will literally get 6 figures for 6 minutes of your time.

Playing the Mitt card to Financial Independence When on the campaign trail in 2012, Mitt Romney was asked how his ROTH account could be in the Millions (actually $102,000,000!) when the maximum ROTH contribution was only $5,000? While Mitt took advantage of other types of enhanced retirement accounts (with 10x contribution limits), the takeaway here is that he invested via a posttax account and will not have to pay taxes on this balance during his golden years. Stated differently, would you rather pay taxes today on a small seed or the full evergreen tree in the future? I opted for the former, now very confident that my seed will replicate many times over until I elect to take my first distributions in my 60s. .

About the Author: Dan Kryzanowski Executive Vice President Rocket Dollar dan@rocketdollar.com 512.779.0843 Dan serves as EVP at Rocket Dollar and Capital Partner for Pinnacle Storage Properties. Dan has raised “six figures in six minutes” numerous times across the selfstorage, multifamily, and residential worlds. His profession mission is to guide individuals to take back control of their retirement dollars and empower sponsors raise more money faster. Visit with Dan at Family Office Connect on May 21st in New York City.

Geeking Out

On Free Credit Repair & Finding Your Funding

It’s hard enough trying to make sense of your own credit, never mind trying to fix and keep your credit report clean, and navigating all the lenders and financing products out there. You’d think you need to either be psychic or have superpowers to figure it out. We caught up with Eric Counts, founder of Credit Ners, and he explained how “it’s not about magic money, but smart money.”

Making Sense of all the Data

redit Nerds help real estate investors hack their way through the confusion to polish their credit and get access to the funding they need. 69

Trying to make sense of all the credit advice, best practices, lenders, qualifications and credit scoring models is all about trying to process enormous amounts of data. What works it constantly changing too. To be able to fix your credit, maintain good credit, and find lenders who will fund you without destroying your credit score requires constantly being on top of the changes and being able to calculate hundreds of factors. It can make your head hurt pretty fast. Yet, when you have great credit, the sky is the limit when it comes to elevating your future and wielding money. This is where Credit Nerds can be invaluable. With 11 years in the industry, staying on top of changes daily, being able to view thousands of credit inquiries each month, and having an algorithmic modeling software that enables them to pinpoint chances of approvals with 99% accuracy, Eric and his team can bring a lot of value to the table. They can process all this data in minutes, and save months of searching, DIY attempts and trashing your scores due to failed applications.

Say Hello to Free Credit Repair

of getting approved with all the funding sources out there. So, you aren’t wasting time or dealing with denials. They even start with a soft credit pull, and provide free credit consultations to help you get a handle on where you are and how to get where you want to be. Eric has some pretty cool credit hacks up his sleeve for you too. Such as how to deal with overutilization of credit limits, minimizing credit inquiries, establishing business and startup credit, and taking advantage of balance transfers and 0% interest deals so that you get cheaper money and use it well.

Eric Counts was first a pioneer in the payperdelete model for credit repair. Meaning you only paid for the results they achieved for you. During our exclusive interview Eric announced he is now offering a deal even better than that. How about free credit repair? Sounds wild, but they really are doing it. That’s a no risk opportunity to get your credit improved. In fact, it’s better than that. Eric warns that there is a lot of illegal advice out there, and companies who will commit crimes in your name without even telling you. Like filling out false police reports in your name. Lying to credit companies can be a federal crime with will very severe prison sentences. Credit Nerds keeps it clean, legal, and keep you out of trouble. Though that doesn’t mean you are just limited ridding your credit report of outdated or erroneous items. They’ve helped others get rid of negative items due to creditors failing to follow the regulations on what they must have to report to the bureaus. We’re talking about collections, late payments, charge offs, judgments, tax liens and bankruptcy. In really tricky situations, with really stubborn creditors, they’ll even connect you with a consumer protection attorney, with no upfront fees.

Why Now? While lenders seem to have been pretty aggressive in offers lately and interest rates are low, there is an even more important reason to get your credit in shape and secure lines of credit now. You already know that banks never seem to be there when you need them. When you really need the money, they aren’t interested. When you do have awesome credit and don’t need them, then they are flooding you with offers. The key to mastering money is to be smart and line up all the extra credit facilities and funding you can in advance. You don’t have to use it. Just have it on top and ready to go in case you need to cover unexpected expenses for a rental property, fill a gap on a flip property or take advantage of a wholesale deal with cash. That’s how you get ahead in real estate, and stay in the green when others are falling into the red.

Your Connect for More Credit They’re your connection for better credit, optimizing credit, finding credit, and obtaining personal and business lines of credit, and funding for real estate deals. So, what’s the catch? No one gives away valuable products or services for free, right? The other half of what Credit Nerds does it connect individuals and businesses with the funding they need. They are going to get some form of referral fee for connecting you with a mortgage lender, and take a small fee on successfully securing you personal and business lines of credit. So, free credit repair is their way of proving that they can really get you in shape to get the money you need. There is no obligation to take that money either. Though they can connect you with mortgage lenders, business credit lines and credit cards that will help you fund real estate deals, expanding or setting up your business, financing down payments and marketing, repairs, holding costs and more. What’s really cool is that they use their computer algorithms and machine learning to pinpoint your chances

Earn Extra Revenues From Referrals As a real estate trainer, investor, tech company or mortgage broker who could benefit from more clients who have better credit and have more access to credit and cash, get in touch with Eric’s team at CreditNerds.com to find out how you can add a new revenue stream as an affiliate. For a free consultation on your credit, free credit repair services or to find out what you qualify for in funding right now give the nerds a call at 877.614.6373.

FUNDING

Helps Investors Roar Toward Their Goals With Fast & Easy Funding

the money to buy and rehab, and to fund them faster and more efficiently than everyone else. This is where Wildcat Lending comes in. Wildcat Lending is on a mission to make hard money and rehab loans extremely efficient, simple and effective for investors. They offer lighting fast funding, aggressive terms, and could help fund your next deal. They can finance your flips, wholesale deals and even rentals.

he house flipping market seems to be moving faster than ever. Opportunities are plentiful. Though success in getting started or dominating your market is still all about having the funding on tap. Don’t let those deals get away like a herd of gazelles. Let Wildcat Lending put a spring in your step and fund more deals, faster than the competition.

House Flipping Rates Leap in 2019 According to the latest statistics from ATTOM Data, the US home flipping rate has reached a new high in 2019. The total dollar volume of homes flipped using financing hit a new 12 year high in Q1 2019, at $6.4B. Over 49k homes were flipped in the first three months of the year, for an average gross profit of $60,000 each. Flipping has been growing by double digits in many markets, with several Texas cities growing 41% to 55% year over year. House flippers have been making over 100% returns in at least five markets.

Roar into Action & Speed Up Your Game with the Lender That Makes Hard Money Easy In order to stand out on the landscape and win more contracts, to get started or to scale to crush your new goals, it’s still all about the capital. The deals are there, the buyers are there, new technology is making the operational side easier than ever. It’s just about having 74

What’s New with Wildcat

management before striking out at the Senior Vice President of a community bank. Then being driven to create even more efficiency and better service for investors, he joined Wildcat. When we say Wildcat is fast, we mean really fast, and it is one of the advantages that is helping them scoop up more market share. Kevin says they can close deals in as little as 24 to 48 hours. In fact, when another lender recently turned down a house flipper’s loan in the middle of a deal, Kevin’s team stepped in and got the file from start to closing in a ridiculously fast four and a half hours.

We tracked down Wildcat’s Chief Lending Officer Kevin Shipman to find out the latest on this lender. Kevin says the lender’s recent expansion from Texas to Tennessee has been a huge hit, with new deals being funded there every week. Kevin and his team’s outlook for the market remains very bullish, especially for properties at $300k and below. They see plenty of buyers for deals, and great performance on the loans they’ve been making. What you might not know about Wildcat is that in addition to financing up to 90% of your house flipping projects, they do rental property loans, and they’ll finance 14 unit properties, including condos. While many of their investors are experienced, Kevin says, “we love working with newbies.” It’s always exciting to help someone new get into the game and off the ground. So, if you’ve had trouble meeting the experience requirements at other lenders, consider trying these guys out. Improving the lending experience and helping investors is something Kevin has been passionate about since school. He always liked numbers and was good at math. After getting his finance degree he started working at Wells Fargo and quickly moved up to

You’ll find lots of convenient features at WildcatLending.com, including: ● Online applications ● The ability to text a loan officer ● Rehab worksheets ● Draw request forms ● Online payoff requests They’ve also teamed up with investor friendly title company Strike Title. A title insurance provider who gets investor needs, assignments, double closes, and a sense of urgency. 75

The Wildcat Lending Difference ● Wildcat currently charges just 23 points for hard money loans ● Funding for brand new and experienced property investors ● Same day loan approvals ● No income verification ● Modest credit scores accepted ● Everyone you speak to is a decision maker and able to make a common sense loan decisions

Summary 2019 continues to offer a relentless amount of real estate investment opportunities for income property investors, wholesalers and house flippers. The profit potential is incredible. If funding has been holding you back from your goals, get ahold of Wildcat and see what they can do for you. Head over to WildcatLending.com where you can submit deals online and use their rehab budget worksheet to nail those numbers, or just pick up the phone and run your deal by Kevin now at 817.832.3451.

The Investment Property Loans You Want Fix & Flip Loans ● Up to 90% Loan to Cost(LTC) or 70% of ARV the lessor of the two ● 6 month term with 90 day extension option ● Lender ordered ARV appraisal ● $50k+ loan amounts ● 14 unit homes Rental Property Loans ● Up to 80% LTV for purchases ● Up to 75% Cash out Loans ● 2436 month terms ● Rates as low as 8.99% These loans are ideal for those taking on new income properties which may need some improvement and releasing before investors can season them for more attractive loan term financing. As well as for those who just don’t want to deal with the hassles of out of touch banks.

Kevin M. Shipman | Wildcat Lending, LLC. Chief Lending Officer 76

Kick The Learning Curve To The Curb: Hit The Gas On Your Real Estate Goals

eter Vekselman is looking for aspiring investors who are willing to put in some hustle. In return, his partners not only gain the benefit of a high performance team, but all the money you could ask for to fund your deals too.

Nothing Is The Same Here

As he says “nothing is the same here.” There are a lot of real estate investors who have done a few deals, and now have crowned themselves as educators. The majority of them don’t seem to be doing much in real estate anymore, except for selling books, and more events. While he may already be very successful, Peter is still in the

trenches, doing deals every month. He believes in sharing that knowledge and training the next generation of investors, but his approach is very different. He’s willing to partner with those who are serious and willing to put in some hustle. He’s willing to do deals right alongside them, and put his money on the line to fund their success.

Dubbed ‘America’s Real Estate Investor Expert’, Peter Vekselman has been featured on Market Insider, ABC, Fox, and in the Boston Herald and Washington Business Journal. We managed to catch up with Peter in between writing earnest money deposit checks for thousands of dollars for his partners’ property deals. He is a house flipper, investor and funding partner with offices in multiple states. Though, that’s about where the similarities between Peter and all of those real estate investing ‘gurus’ ends.

“This is a fast paced market, where there is a lot of competition, but where flipping homes and wholesaling houses can be incredibly profitable.” Peter Vekselman 80

Bringing Home The Bacon With Brick Houses When his camera crew isn’t catching him enjoying a thoughtful moment with an Arturo or Brick House cigar, Peter is hosting live coaching sessions, or hugging and highfiving his studentpartners who have seen their lives changed by what real estate can do for them when done right. This mentor has been in the business for over 22 years – clocking up over 3,600 real estate deals over the years. Being transparent, Vekselman tells us that his Partner Driven program helps him do more deal flow every month. As any experienced real estate pro knows, once you start hitting 15 to 30 transactions every month, it takes a team. It takes manpower and womanpower and partners.

So, in exchange for helping aspiring investors avoid all the pain and expense of the pitfalls that are out there waiting for them, Peter partners with them, gets real deals done, and they split the profits 50/50.

Success Stories Peter’s websites sport numerous success stories of those who have partnered with him already. There is Denisha, a mother of six in South Florida, who did her first deal with no money for her own down payment – who made a profit of $18,300. There is 20 year old exbank teller Alex, who went from making a measly $1,500 a month salary to scoring $52,000 on his first deal with Peter. Then there is Ivo, who made $26,000 on his first deal, fresh out 81

of school, and has gone on to closing over 200 transactions, and starting HigherOffer.com – a company that is now doing 8 to 10 deals a month.

No Guru Has This… He does not proclaim to be a guru, yet, if you want to compare Peter to those other guys, he says “no guru has this…” Those who join the Partner Driven program get: ● One on one coaching ● A professional team already in place ● Help with every step of structuring and closing deals ● Support and marketing materials ● Contracts and help using them ● Experts to rehab properties

He even provides an inhouse team who help partners with all the research for finding local preforeclosure deals and ripe single family homes to bank on. You get a real pro to stand by your side, and get to use his experience and money.

What’s The Strategy? Vekselman says “this is a fast paced market, where there is a lot of competition, but where flipping homes and wholesaling houses can be incredibly profitable.” These are the two most popular strategies used by his studentpartners. Though many have gone on to expand their own businesses into great personal brands and diverse empires of their own. If you’re really serious, and willing to at least put in the work parttime, and truly take action, Peter invites you to call him directly. Pick up your phone and dial (404) 915 9685. If you want to learn more, and see the types of results others are getting first, hop onto CoachingByPeter.com, and check out the Facebook group too.

That’s just the foundation. He’ll not only show you how to do the deals, he’ll put up 100% of the money needed to get them done. That means deposit money, closing costs, purchase money and repair money. Some people say they will do these things, and then just leave their students hanging in the wind, out on their own to try and find deals, and deals that work. Not here. Peter has personally jumped on jets to go meet with sellers and get deals closed for his partners.

Interest Rate and Home Price Swings

By Rick Tobin

istorically, the #1 reason why home prices generally rise, remain flat, or fall is directly related to the latest 30year fixed mortgage rates. This is true because the vast majority of home buyers need thirdparty funds from banks, credit unions, or mortgage professionals to purchase and sell their homes to new buyers who also usually need bank financing to cash the seller out. Over the past 10 years, a very high percentage of mortgage loans used to acquire residential (oneto four unit) properties have originated, directly or indirectly, from some form of governmentowned,

backed, or insured money, such as FHA (Federal Housing Administration), VA (U.S. Department of Veterans Affairs), USDA (U.S. Department of Agriculture for more rural properties), Fannie Mae, Ginnie Mac, and Freddie Mac in both the primary and secondary markets. Most of these same government assisted mortgage programs allow buyers to purchase properties with as little as no money down to just 3.5% down payments. Many times, the seller and family members can credit the most or all of the closing costs or down payment requirements so that the buyer really has no money invested in the property. 87

To the buyer, the most important part of the purchase deal is related to qualifying for a very low 30year fixed mortgage rate and an affordable monthly payment. When the interest rates are too high, then fewer buyers can qualify for properties. During these higher rate time periods, home prices typically stay neutral or fall in price as seen during past periods of deflation like back in the mid 1970s. As such, almost all “boom” (positive) or “bust” (negative) housing cycles are directly related to low or high rates of interest, so they tend to correlate or go handinhand with one another.

Interest Rate History: 1971 2018 Between 1971 and 2018, 30 year fixedrate mortgages have ranged between a low of 3.31% in 2012 to a high of 18.63% in 1981. Fixedrate mortgages are still hovering near historical lows at present and in recent years. An estimated 60%+ of mortgage holders are paying fixedrates on their residential owneroccupied properties somewhere within the 3.00% and 4.90% rate ranges as of 2015, per data released by Freddie Mac. During this same 47year timespan (1971 2018), the average 30year fixedrate mortgage was near 8.08%. This rate is almost double the average 30year fixed rate mortgage loan between 2010 and 2019. Because the ease of qualification and the affordability of mortgage loans is typically the most important factor behind a booming or busting housing

market, the more recent 3% to 5% rate ranges over the past 10 years has helped fuel a stronger housing market with rapid appreciation rates as well. Most often, owneroccupants are using some type of a governmentbacked or insured mortgage loan and / or secondary market investor to purchase their properties. These loans include FHA, VA, Fannie Mae, and Freddie Mac. The typical down payment ranges used to purchase these properties are very likely to average somewhere within the 0% to 3.5% down payment range. Many times, the seller provides a credit towards most of the closing costs and / or another family member assists with the down payment as a gift of some sort. If so, a very high percentage of owneroccupied home buyers have purchased their homes with little to no money down out of their own pocket prior to qualifying for taxdeductible

mortgage payments that were less than a nearby apartment to lease. Additionally, these same homeowners have boosted their overall net worth after the vast majority of residential properties have appreciated at significant annual percentage rates. In some cases, homes have double in value in less than five to seven years due to the combination of affordable mortgage loans, easier mortgage underwriting approval processes, and increasing demand for properties to purchase.

Year 2018 2017 2016 2015 2014

Lowest Rate

Highest Rate

3.95% 3.78% 3.41% 3.59% 3.80%

4.94% 4.30% 4.32% 4.09% 4.53%

2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 1984 1983 1982 1981 1980 1979 1978 1977 1976 1975 1974 1973 1972 1971

3.34% 4.58% 3.31% 4.08% 3.91% 5.05% 4.17% 5.21% 4.71% 5.59% 5.10% 6.63% 5.96% 6.74% 6.10% 6.80% 5.53% 6.37% 5.38% 6.34% 5.21% 6.44% 5.93% 7.18% 6.45% 7.24% 7.13% 8.64% 6.74% 8.15% 6.49% 7.22% 6.99% 8.18% 6.94% 8.42% 7.11% 9.22% 6.97% 9.25% 6.74% 8.07% 7.84% 9.03% 8.35% 9.75% 9.56% 10.67% 9.68% 11.22% 9.84% 10.77% 9.03% 11.58% 9.29% 10.99% 11.09% 13.29% 13.14% 14.68% 12.55% 13.89% 13.57% 17.66% 14.80% 18.63% 12.18% 16.35% 10.38% 12.90% 8.98% 10.38% 8.65% 9.00% 8.70% 9.10% 8.80% 9.60% 8.40% 10.03% 7.43% 8.85% 7.23% 7.46% 7.29% 7.73%

Overall

3.31%

18.63%

Average Rate 4.54% 3.99% 3.65% 3.85% 4.17%

3.98% 3.66% 4.45% 4.69% 5.04% 6.03% 6.34% 6.41% 5.87% 5.84% 5.83% 6.54% 6.97% 8.05% 7.44% 6.94% 7.60% 7.81% 7.93% 8.38% 7.31% 8.39% 9.25% 10.13% 10.32% 10.34% 10.21% 10.19% 12.43% 13.88% 13.24% 16.04% 16.64% 13.74% 11.20% 9.64% 8.85% 8.87% 9.05% 9.19% 8.04% 7.38% 7.54% 8.08%

Source: Freddie Mac’s Primary Mortgage Market Survey (PMMS) 89

The Consumer Debt Anchor With home mortgages, the primary collateral for the loan balance is the home itself. In the event of a future default, the lender can file a foreclosure notice and take the property back several months later. With automobile loans, the car dealership or current lender servicing the loan can repossess the car. Homeowners often refinance their nondeductible consumer debt that generally have shorter terms, much higher interest rates, and no tax benefits most often into newer cashout refinance mortgage loans that reduce their monthly debt obligations. While this can be wise for many property owners, it may be a bit risky for other property owners if

they leverage their homes too much. With credit cards, lenders don’t have any real collateral to protect their financial interests, which is why the interest rates can easily be doubledigits about 10%, 20%, or 30% in annual rates and fees, regardless of any national usury laws that were meant to protect borrowers from being charged “unnecessarily and unfairly high rates and fees” as usury laws were originally designed to do when first drafted. Zero Hedge has reported that 50% of Americans don’t have access to even $400 cash for an emergency situation. Some tenants pay upwards of 50% to 60% of their income on rent. A past 2017 study by Northwestern Mutual noted the following details in regard to the lack of

cash and high credit card balances for upwards of 50% of young and older Americans today: * 50% of Baby Boomers have basically no retirement savings. * 50% of Americans (excluding mortgage balances) have outstanding debt balances (credit cards, etc.) of more than $25,000. * The average American with debt has credit card balances of $37,000, and an annual income of just $30,000. * Over 45% of consumers spend up to 50% of their monthly income on debt repayments that are typically near minimum monthly payments.

Rising Global Debt

According to a report released by IIF (Institute of International Finance) Global Debt Monitor, debt rose to a whopping $246 trillion in the 1st quarter of 2019. In just the first three months of 2019, global debt increased by a staggering $3 trillion dollar amount. The rate of global debt far outpaced the rate of economic growth in the same first quarter of 2019 as the total debt/GDP (Gross Domestic Product) ratio rose to 320%. The same IIF Global Debt Monitor report for Q1 2019 noted that the debt by sector as a percentage of GDP as follows: ● Households: 59.8% ● Nonfinancial corporates: 91.4% ● Government: 87.2% ● Financial corporates: 80.8% 90

Rate Cuts and Negative Yields As of 2019, there’s reportedly an estimated $13.64 trillion dollars worldwide that generates negative yields or returns for the investors who hold government or corporate bonds. This same $13.64 trillion dollar number represents approximately 25% of all sovereign or corporate bond debt worldwide. On July 31, 2019, the Federal Reserve announced that they cut shortterm rates 0.25% (a quarter point). Their new target range for its overnight lending rate is now somewhere within the 2% to 2.25% rate range. This is 25 basis points lower than their last Fed meeting decision reached on June 19th. This was the first rate cut since the start of the financial recession (or depression) in almost 11 years ago dating back to December 2008.

There are three additional Federal Reserve twoday meeting dates scheduled for 2019 that include: ● September 1718 ● October 2930 ● December 1011 It’s fairly likely that the Fed will cut rates one or more times at these remaining 2019 meeting dates. If so, short and longterm borrowing costs may move downward and become more affordable for consumers and homeowners. If this happens, then it may be a boost to the housing and financial markets for so long as the economy stabilizes in other sectors as well such as international trade, consumer spending and the retail sector, government deficit spending levels, and other economic factors or trends. We shall see what happens between now and yearend in 2019 and beyond.

Meet Rick Tobin Rick Tobin has a diversified background in both the real estate and securities fields for the past 30+ years. He has held seven (7) different real estate and securities brokerage licenses to date, and is a graduate of the University of Southern California. Rick has an extensive background in the financing of residential and commercial properties around the U.S with debt, equity, and mezzanine money. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), equity funds, and foreign money sources. You can visit Rick Tobin at RealLoans.com for more details.