REi Wealth Magazine Featuring the Listed Sister from HGTV by REALTY411

Table of Contents

Are You in A Bubbly Market? If So What Do You Do?

Yikes! My Marketing isn’t Working!

Is Timing The Real Estate Market Possible?

Constructive Receipt: A Hidden 1031 Exchange Danger

Rehabbing For Bigger Profits

Working With Motivated Sellers in the Spanish Speaking Market

Why Banks Do Not Allow Junior Liens

AllInclusive Trust Deed or Mortgage

Investment Strategy: BRRRR vs. Filthy Riches

What’s Your Best Investment Strategy?

Some Real Estate Lessons

Growing & Protecting Wealth With 20/20 Visions

The Listed Sisters... Nashville Will Never Be the Same! 6

Are You in A Bubbly Market? If So What Do You Do? By Jimmy V Reed

the complete picture or as I like to say “all the numbers”. Then there are some that

So what do you do when the market is rising and Investors everywhere have become motivated buyers?

are spot on. My wife and I really like the mother daughter team from “Good Bones” Fact they were just in Texas at the Realty 411 Expo. By the way places and events like that are great for Networking. I even made contact with an investor that might work with me in our Costa Rica Investment project. Anyway I have been in real estate for 30 years as an Investor. What you need to keep in

It seems everyone has just

mind is you need many different exit

started buying any and everything

strategies to be successful in real estate

in real estate and for very high

investing. What I mean is you need to know

prices. You go to the tax sales

how to Wholesale real estate when the

and they sell for more than the

equity is there to do so. You need to be able

Tax value and many times more

to Buy & Hold properties to generate

than the comps and the buyers

income on a monthly basis. Buy Rentals

have not even been inside the

right and you always have Cash coming in.

properties. You also need to know the most popular exit Yet I see and know a lot of season investors

these days which is to Buy, Fix & Sell, but

out there that are diversified in their investing

you need a lot of equity to do that. Then you

strategies. They like me refuse to become

also have notes, right now you can get

Motivated Buyers. But not everyone has

some really good deals on notes. They may

that luxury. The reason is most investors

not be local or even in my market, Texas but

seem to have only one or two exit strategies

keep an eye out for them. Some notes may

and that’s it. The most popular has to be

have a lot of equity in them, so if something

Buy, Fix and Flip! More Newbies are

goes wrong you actually may end up with

entering the arena mainly due to the many

that property and a lot of equity.

popular HGTV shows.

Are You in A Bubbly Market? If So What Do You Do?

Some of those shows are really good, but many are, well let’s say they do not show

So as a real estate investor

investors in my market now

you need to be able to adjust

from outside the state.

to wholesale them. I started out as a wholesaler

to the market conditions as they change. Be in properties

If you are a newbie to the

many years ago and still do

that have exit strategies that

investing arena it’s going to be

it today. What I like about it

work for you now. You may

tough, however there are ways

is I did not need any money

also consider opening an IRA

to get paid. You will first need

to get it done. Keep in mind

to wholesale, sell, or buy

to know all you can about

if the market does bust then

rentals & notes with. Then you

real estate investing, so you

the wholesale game becomes

are also building your wealth

may need to get some

the best exit strategy ever,

for the future. Typically with an

training. You are going to

again!

IRA you are building that

have to be able to move really

wealth tax free. Using a Roth

fast when a deal pops up. You

The main thing is position

does have some real

are also going to have a lot

yourself so you can

advantages.

of competition out there. That

maneuver positively so no

is why I teach my students

matter where the market

Currently my market has gone

right now to stay away from list

turns. If you keep your eyes

nuts. But this can work to your

and focus on areas such as

on the market and not so

advantage if you want to sell

Probates that have not even

much on the quick buck,

some inventory. Fact I am

been field or petitioned for

you can become very

selling a lot of my inventory,

probate in the courts yet.

successful at this real

and if possible I try and sell

There is a lot less

estate game!

owner financed with large down payments to investors. There seems to be a lot

Are You in A Bubbly Market? If So What Do You Do?

of Buy & Hold

competition in Probates and you usually can get more

Be Blessed with Success!

time to work the deal which will help new investors be able

Jimmy V Reed

Jimmy V Reed Jimmy V Reed of Fort Worth, Texas has been investing in real estate since 1987 and by 1991 started doing one day trainings in Wholesaling. He then began teaching and mentoring others through out the country. Jimmy also created several training’s used in the past by Whitney, Rich Dad, and others. He currently is the founder of www.1REclub.com & was cofounder of the Fort Worth club REIOFW.com for 14 years. Now he trains students through his company Real Estate Equity Development. More info available at www.JimmyReed.net

Yikes! My Marketing isn’t Working! By Sharon Vornholt

• Craig’s list, Zillow etc. • Calling expired listing

think about that for a minute. You’ve just dropped a chunk of cash sending out direct mail campaigns that are pretty much getting you zero results. One of the main

My marketing isn’t working is a statement

reasons for that is most likely because you have completely neglected to

that I hear just about every

build a brand. There are

week. When I start to ask

also a couple of other

people about their branding,

reasons what we will go

I always get the same

over in a minute.

surprised look. Then that person usually says

Taking Stock

something like, “I’ll worry about branding when my

When your marketing isn’t

marketing is on track”.

working, the first step is to take stock of everything you

I have to tell you, that’s not

are doing. What are all of

how it works. Branding and

your marketing activities?

marketing go hand in hand,

List them all out.

and you need to be working on both things simultaneously. Think of it this way: Marketing is how you get leads. Branding is what makes them choose YOU.

• • • • •

They might include: Direct mail

• Or anyone of a dozen other strategies

Then, ask yourself these 3 questions. 1. Am I marketing consistently? 2. Am I targeting the right group of people? 3. What is it I should be doing that I’m not doing? (You know what that is.) No judgement here, but you do have to own where you are to get where you want to go. Once you have listed out all your marketing activities, be honest and list the exact frequency of those marketing activities. List everything you are doing whether it is daily, weekly, monthly or some other frequency. If you have big gaps in your frequency, I can almost promise you that’s one of the problems. Marketing cannot be a hit or miss thing.

Bandit signs

Consistency is one of the

Networking Websites (you must have a website)

keys to generating a steady stream of leads.

Yikes! My Marketing isn’t Working!

Really

The Next Piece of the Puzzle:

Building Your Brand So what exactly is branding?

want to be perceived to your potential clients, one of two things will happen: 1. Someone else will do it for you. Many times this happens

Branding is the way people

by folks saying negative

feel about you. Another way

things about you. They will

to say it is, “It’s what people

be in charge of what they

There’s no doubt that the

say about you when you

want other people to think

physical components of a

leave the room”. That my

about you. The way you

brand are important. Those

friend is why you need to

combat this is by building

are things like logos, brand

build a brand, and you need

your own online reputation.

colors and other things that

to be the one in charge of

make up the “look” of your

doing that.

2. Or you will simply be invisible in your niche which

brand. But that’s not what branding really is.

If you don’t consciously build

is the kiss of death.

your brand and the way you

What Has Changed? For those of us that were around before the internet (I know, it’s hard to believe we grew up without it), only the big companies like Coca Cola had to worry a lot about branding. The local heating and airconditioning company could run a few local ads, give great customer service and stay in business. That’s not true anymore. When your marketing isn’t working, your failure to build a

Yikes! My Marketing isn’t Working! 12

strong brand is almost always part of the problem.

Whether or not you intend to have a global brand, because of the internet you can be found by everyone. It’s no longer optional to build a brand for your business. In most cases, you will be the brand in our business.

Where Does Branding Count? Everywhere! It counts everywhere people have contact with you whether that’s on your website, social media, on

Remember, that all your marketing has to touch

your marketing pieces or even in the way present

people in some way that makes them take action.

yourself when you’re networking. Your goal should

Whether that is to call you, to fill out a form on

be to build a consistent presence both online and

your website or take some other action, once they

offline.

have found you, what exactly is it that they will find?

You need to ask yourself these questions: • What makes you special? • How have you branded yourself so that you are memorable? • What makes people think you are the authority in your field? • The big questions is why should they choose YOU? What makes you different than your competitors?

Here’s a little exercise for you. Google yourself and see what comes up. Having nothing come up can be as bad as having something negative come up.

How Do You Build a Rock Solid Brand? You can do that many ways. However one of the best ways is through content marketing. and I’m going to talk about that in my next article. I want you to be clear on one thing; you don’t have to write a single article to create great content. There are other ways to create content and that’s what I will go over next time.

You must be able to answer these questions before you can really build a brand that stands out

I also have a free “Brand Assessment Guide” that

from all the rest. Remember that marketing is how

you can get over on my blog. So be sure to stop by

you get leads, and your branding is why they

the Louisville Gals Real Estate Blog and get your

choose YOU.

free copy. It’s a great way to see where you are now, and what steps you can take to create a brand

Yikes! My Marketing isn’t Working!

that leaves your competition in the dust.

Sharon Vornholt Sharon Vornholt is the owner of Innovative Property Solutions, LLC in Louisville, KY. Sharon owned and operated a successful home inspection company for 17 years. She began investing in real estate in 1998 and became a full time real estate investor in January of 2008. Sharon specializes in wholesaling, and is also an experienced landlord and rehabber. In addition, Sharon is an internet marketer and also writes articles for several national real estate sites. Sharon is the author of a popular real estate blog called the “Louisville Gals Real Estate Blog”. For your FREE REPORT “Probates and Absentee Owners: Your Fast Track to Real Estate Riches”, stop by her blog at: http://LouisvilleGalsRealEstateBlog.com. FREE BRAND ASSESSMENT AT https://louisvillegalsrealestateblog.com/brandassessment

Is Timing The Real Estate Market Possible? By Fuquan Bilal

Can investors really time the real estate market, or is it wiser to just consistently invest, and hold? We all know that there can be fluctuations in real estate prices, even if values are constantly going up over time. So, is it possible to time the market? If so, what does it take? What’s the best way to do it?

Why Try to Time the Market Trying to time the market is critical in publicly traded stocks. Stocks are now believed to be 70% or more overvalued. It can take a decade or more to recover from that, just to get back to par. There isn’t anything you can personally do about the stock prices. You just have to wait. Worse, there is no downside protection. If it goes too deep, there is a PR scandal or the industry changes, all capital may be lost. It is vital to sell before the market begins to dip, and buy again before it begins to go up, if you want to avoid negative returns. Real estate is a little different. You can absolutely find greater bargains during tougher times, and sell high in bullish times. This strategy can absolutely help to maximize returns.

Is Timing The Real Estate Market Possible?

However, real estate is a tangible, hard asset, that will be there no matter what. It can also produce income, which doesn’t vary much as asset prices fluctuate. Plus, you can control the value of your real estate assets with improvements and repositioning.

Reasons Not to Try and Time the Real Estate Market

Is Timing The Real Estate Market Possible?

There are two main reasons that most individuals and investors shouldn’t try to time the property market. The first is that investors are notoriously bad at it. Most almost invariably wait too long to sell, and end up folding at the bottom of the market. Then they wait far too long to buy, and miss all the gains. The second reason is that transaction costs can be high. Between time spent on due diligence and hard closing costs, you stand to lose a decent chunk of change if you sell and rebuy the same property in an effort to time it. Depending on where you are, and the fluctuation, this

Factors Involved in Timing the Market

may be more of loss than if you just held, and received income from the property in the meantime.

There are an enormous amount of data points and factors to watch when trying to time the market, including:

• • • • • • • • •

Affordability Interest rates Treasury bond yields Taxes Rents Building costs Seasonal fluctuations Supply and new constructions Default rates and bank balance sheets

• Days on market • Population growth and migration patterns

• Jobs and wages • Local economic trends 17

There is a lot to know, learn, master and monitor to effectively time the market. If you are epically good, you can do far better than most in timing the market. Even then, you may not want to sell all your holdings, as you’ll probably want to reacquire them within 48 months or so. At NNG, we leverage a strong research team, deep data that is way ahead of what the public sees, and maintain a strong mix of assets and strategies, so that some are being turned at their ideal timing, while others are held for consistent yields. Find out more about investing in secured debt

Is Timing The Real Estate Market Possible?

and real estate, go to NNG Capital Fund.

Fuquan Bilal Fuquan Bilal founded NNG in 2012 with the principal mission of capitalizing on the growing supply of mortgage notes in the interbank marketplace. Mr. Bilal utilizes his 17 years of residential and commercial real estate success to identify real estate opportunities and capitalize on them. To date, he has successfully managed three private mortgage note funds that primarily invest in singlefamily performing and nonperforming mortgage notes. His financial acumen and proprietary set of investment criteria enable him to purchase underperforming real estate assets at a deep discount of face and market values, thereby increasing the value of the assets. This, coupled with his ability to maximize the use of leverage, enables him to build strong, secured portfolios with solid passive income flows.

Constructive Receipt:

A Hidden 1031 Exchange Danger By Dr. Robert G. Hetsler, Jr

qualifies as a 1031 exchange. But constructive receipt is slightly more elusive. Constructive receipt occurs

So what is constructive

when the exchanger has

receipt and how is it

the right to receive or

different than actual

control funds, even if he or

receipt? Actual receipt is

she does not have direct

When done correctly, a

easy to identify – the

access to the funds. As an

#1031 exchange can be a

exchanger directly receives

example, if an exchanger

fairly straightforward

the sale proceeds from

receives the proceeds in

process. However, there is

the relinquished property.

the form of a check, then

often one area that

It also doesn’t matter what

he or she is deemed to

catches potential

form the funds take – cash

have constructive receipt

exchangers off guard. The

or wire transfer into an

even if they never cash

concept of constructive

account. The bottom line

the check.

receipt often torpedoes

is if the exchanger has

the tax deferred nature of

direct access to the funds

an exchange, and

at any time, the

subjects the exchanger to

transaction no longer

immediate capital gains taxes.

Constructive Receipt: A Hidden 1031 Exchange Danger

The mere act of accepting the check, made payable to the exchanger (even with no intention of cashing it themselves), cancels the exchange before it really begins. Even if the exchanger plans to immediately endorse the check over to the qualified intermediary. Because of the concept of constructive receipt, it is critical that any investor planning to conduct a 1031 exchange brings a qualified intermediary on board before the relinquished property is sold. This eliminates the possibility of constructive receipt. ***** If a 1031 exchange is in your future, visit our website http://www.qualifiedintermediary.net/ to learn more about these powerful tax deferral tools and our qualified intermediary and replacement property locator services.

Constructive Receipt: A Hidden 1031 Exchange Danger

By Dr. Robert G. Hetsler, Jr. Qualified Intermediary for 1031 Exchanges & 1031 Exchange Replacement Property Expert

I focus almost exclusively on two things and they both involve money/assets. These services are Divorce and 1031 Exchanges, the first relating to retirement division in Divorce, IRA Rollovers, 401K Rollovers, and other Managed Assets as part of a divorce. I prepare, throughout the USA, Qualified Domestic Relations Order “QDROS” and founded the idea of a Transitional Support Expert/Divorce CFO. See below article. I worked for several years for a real estate law firm after law school while developing my decade long divorce mediation practice, provided divorce expert witness testimony in the areas of business valuation, forensic accounting, retirement, asset division & finances. I am also a licensed real estate agent, and that, coupled with being a CPA, with a law degree, and real estate experience positioned me as an optimal Qualified Intermediary (”QI”) for 1031 exchanges. I soon learned that both specialties brought with them several ways to add value, not bills, to my clients, in both specialties, solely by utilizing my existing licenses and relationships which adds tremendous value to all clients. Monetizing these two different services, either through money management referrals, insurance referrals and many others. The incredible part is that my clients are clients for life in that they always have a need for someone with my skillset to provide tax/financial planning and their own personal advisor to ensure their other advisors stay on task so my clients are free to enjoy life. The smile on the satisfied client's face in not quantifiable. I grew up in a divorced home as the oldest of three boys and we lived on food stamps to survive. I was the kid at school that received free lunch and also had to purchase groceries for the family, because my mother and brothers were always too embarrassed. I knew then I was going to make the world a better place and I'd like to think I have made a contribution already and I plan to contribute more with each passing day.

REHABBING FOR BIGGER PROFITS By Reggie Brooks 23

A thorough

Another word of caution. Many

Look in the local telephone

inspection of

times you’ll find that a little

directory under “Rental”.

the subject

cosmetic repair will bring a property

While rehabbing the property,

property will

back to life, thus saving you lots

pay particular attention to the

serve as a

of money. It is important not to

following:

basis from

overrehabilitate your project. If

which to

the property is in a low to

begin the

moderate income neighborhood,

and landscaping are the

rehabilitation. Until you are

the amount of money you spend

first and the last thing a

experienced enough to perform

on such items as flooring,

buyer or renter sees. Don’t

this inspection yourself, it is

plumbing fixtures, door

skimp – make a good

wise to seek the services of a

hardware, etc. would probably

impression. More than

competent professional. Most

be lower than that of a property

likely they’ll drive by at

contractors will give you a free

in a high dollar neighborhood.

different times of the day

estimate of repairs when they

• Curb appeal: Exterior paint

and night. Give them

know they stand a chance of

Do a little shopping around for

something pleasant to

getting the job.

the best prices on materials.

think about.

While your local hardware store

• If you’re remodeling

You may consider exercising

may fill your needs when it

(moving interior walls

your option to do the work

comes to small items, rarely can

around), try to create a

yourself. In the beginning, it

they compete with the large

design that will give the

might be worth while to spend

contractor warehouse type

property an open feeling.

your time working on your

stores. If you are planning to do

properties, but as the number of

some or all the work yourself, I

properties you own increases,

recommend that you purchase

you’ll be better served to

good quality tools. Much money

delegate your fix up work to

is wasted on cheap tools that

some one else, while you focus

have to be repurchased over

on finding more deals. If you

and over again. If you’re

are going to do a fair amount of

performing a small job and have

work on your properties, always

no desire to do your own

keep in mind that if you’re not a

contracting work, then it doesn’t

plumber, electrician, roofer,

matter as much.

carpenter or such, don’t try to tackle jobs that are beyond your

Be aware that you can rent

skill level. Leave those jobs for

almost any tool you’ll ever need

the professionals.

from an equipment rental yard.

REHABBING FOR BIGGE

R PROFITS

• You may find it more cost

The raised foundation is

effective to replace old,

one where the property

outdated kitchen cabinets with

sits on top of a

new ones. Look in your local

continuous concrete

phone directory for

foundation that extends

cabinetmakers and compare

around the perimeter of

prices.

the building. This type of

• Consider using ceramic floor

foundation does have a

tile instead of sheet goods. It

crawlspace which

may be a little more

allows a person to crawl

expensive, but it will pay off in

under the property.

the long run.

Some of the signs of

• Consider installing ceramic counter tops instead of the formica type. Not only are they

possible foundation problems may include, but are not limited to:

more durable, they are also more attractive to potential renters or buyers.

•

Major cracks in exterior walls

•

Major cracks in interior walls

When rehabbing, some of the areas to focus

•

Doors and windows operating improperly

your attention are:

•

Floors not level

• • • • • • •

Foundation

If the subject property shows signs of possible

Plumbing system

foundation trouble, and if the profit potential is

Electrical system

great enough, have a foundation expert take a

Roofing

look at it before you make a commitment to

Interior walls

purchase.

Exterior walls Landscaping

Foundations

Plumbing Systems Water flows to your property from the serving utility company through a water meter, usually

The two most common types of residential

located at the front property line. In very cold

foundations are the concrete slab, and the

climates this meter may be located inside the

raised foundation. Properties that are built on a

house. The main shutoff valve to the property

concrete slab are secured by anchor bolts protruding

should be mounted above grade, and can usually

from the concrete. Also, they have no crawl space

be found near the front of the property on the

to allow a person to get under the property.

same pipe as the outdoor faucet.

REHABBING FOR BIGGER PROFITS

The pipes that carry

terminates at least a foot

not, they can all be

water underground to

above the roof. At or near

replaced. Check and

the property are usually

the top should be a

replace if necessary any

galvanized, copper, or

temperature and pressure

worn grouting and

plastic. The interior

relief valve. The purpose of

caulking.

pipes are usually

this TPRV is to prevent the

galvanized or copper.

buildup of excess heat and

Since building codes

pressure. If it leaks, it can be

vary by jurisdiction,

replaced.

Toilets Make sure the toilet is

check with your own

secured properly to the

local building

At the bottom is a valve that

floor. Check for leaks

department for current

is used for draining the water

around the base. If it

codes.

heater. This too, as well as

does leak, it’s probably as

every other component

simple as a new wax ring

previously discussed can be

that goes under the toilet.

replaced if they prove to be

Flush the toilet and let it

A typical water heater is

defective. However, if the

fill. If it keeps running,

approximately 5 feet tall.

water heater is old, and

either the tank ball

At the top of the water

looks like it may give you

assembly or the flapper

heater are two pipes,

problems, it’s better to

may need to be replaced,

one with a shutoff valve

replace it now than to have

or the water level should

(the cold water inlet

to be bothered with it later.

be adjusted so that it

Water Heaters

side). This is the valve that shuts off the hot water to all the fixtures

Stall Showers And Bathtubs

in the property. The

shuts off before it reaches the top of the overflow. If the toilet is cracked either in the tank, the bowl, or at

water pipes are usually

Your property might have

the base, or otherwise

connected to the water

any combination of standard

causing too many

heater by flexible

bathtub, shower over tub,

problems, replace it.

connectors.

shower enclosure, or stall shower. If the shower or tub

A gas water heater has

has a glass enclosure, it

a vent at the top to allow

must be tempered safety

heat and unburned

glass or approved plastic.

gases to escape. It

The shower head, faucets,

should be connect to a

and spout should all be in

venting system which

good working condition. If

REHABBING FOR BIGGER PROFITS

Sinks Turn the faucets on and off. They should operate

Don’t hesitate to seek the services of a professional whenever appropriate.

Roofing

smoothly. If they drip a little, replacing the seats and

Only if it is necessary should you consider adding a new roof. If the

washers should take care of

ceilings show water damage and a close inspection reveals that the

it. There should be two shut

present roof is deteriorated beyond repair, then you should

off valves under the sink,

consider the possibility of adding a new roof.

unless you have a wall mounted faucet. The shutoff

Contact several reputable roofers in your area. They will usually

valves should operate

give a free roofing inspection. Some roofers may charge a fee, then

smoothly. While you’re under

credit that fee toward the total cost of the roof if you hire them.

the sink, check the drain

Gather several estimates and do some comparison shopping in

lines and the trap for signs of

order to get the best deal.

leaking or rotting. If any of these items do not operate

Consider another option: if you do some inquiring at your local

properly, they should be

roofing supply house, you may find roofers who are between jobs,

replaced.

and will reroof your property at a very reasonable rate. You might consider buying all the materials, and getting the contractor to

Electrical Systems

supply the labor.

REHABBING FOR BIGGER PROFITS

Every circuit should have a standard circuit breaker or should at least be fused. Each room should have at least two electrical receptacles. The kitchen should have at least two receptacles that are on separate circuits. Replace all broken or cracked cover plates on light switches and wall receptacles. If possible, replace all pullchain type fixtures with standard fixtures and wall switches.

Interior Paint Pearl White, Navajo White, and Antique White are the common colors used in residential properties. Using a shade of white paint in the interior will make the rooms feel larger. If you hired a painter, he would probably suggest that you use flat paint in every room except the kitchen and bathroom, where you would use a semigloss paint. Some investors use semigloss paint through their rentals, because it’s easier for a tenant to wash the walls. Waterbased paints are usually easier to work with, and they usually do a sufficient job. Consider using an oilbased paint in the kitchen, bathrooms, service porch, and on the trim. You’ll find that oil based paint is more durable than waterbased paint.

Exterior Paint The exterior of the property may need to be painted. Choose a color that will resist fading and will add to the “curb appeal” of the property. If you’re not sure about a color, drive up and down various streets and see what you like. More people are attracted to the lighter colors. Choose a complementing color for the trim, and consider painting the porch the same color. Whether you do the job yourself or you get a professional painter to do the work, insist on a good quality job. Old paint should be scraped and sanded, and any holes should be filled before primer and paint. Consider using the same color combination on all of your projects. This way you only have to keep one color combination in storage for any touch up that might be needed.

REHABBING FOR BIGGER PROFITS

andscaping Landscaping the front of your property to give it “curb appeal” is essential for getting the most

from your property whether you plan to rent or sell. If you’re planning to rent the property, the nicer you make the front of

It is important to continue your education in creative real estate practices. The more you expose yourself to creative real estate principles and techniques, the more you’ll learn. The more you know, the better prepared you are to solve a seller’s problems. The more problems you solve, the richer you get. I’ll see you at the top! Reggie Brooks

your property look, the better the tenant you’ll attract. Reggie Brooks If the grass needs cutting, you can usually hire some of the neighborhood

Reggie Brooks, is an

kids to clean it up. A schedule of watering

international speaker,

and fertilizing should bring it back to life.

author and educator,

If it’s necessary to get the yard looking

dedicated to inspiring

good right away, then “sod” is your

others to achieve personal

answer. Most gardeners and

success through real estate

landscapers can do a neat job with sod,

investment. He is also the

and the end result can be instant lawn.

#1 Vacant, Abandoned & Distressed Property

Top off your landscape with some

Specialist in North America.

strategically placed shrubs and some pretty flowers. You’ll be surprised at what this can do for your properties curb

Having risen above a life of poverty, he has achieved what

appeal, and ultimately, your bottom line.

many people consider to be impossible. He went from making $36,000 per year at the local telephone company, to making over $40,000 per month in his real estate business.

REHABBING FOR BIGGER PROFITS

Today, Reggie delivers his personal philosophies for success at major business venues and expositions throughout the United States. Reggie attributes his success to faith, dedication to success, and to the invaluable coaches he has had along the way.

h t i W g n i k r o W s r e l l e S d e t a M ot i v h s i n a p S e h t in t e k r a M g n i k Sp e a t ’ n o D u o Y f i n e v E – Speak Spanish

By Kathy Kennebrook (The Marketing Magic Lady)

One of the things I discovered

they too could use direct mail

early on in my business as a

and other types of marketing

real estate investor is that

techniques to reach the

there are many ways to reach

Spanish speaking sellers in

all kinds of motivated sellers.

their areas. They are finding,

The main technique I like to

as am I that these folks have

use to reach specific sellers in

homes they need to sell for a

my market is by using a

variety of reasons and no one

targeted approach, which for

is tapping into this market. Part

me is direct mail. We do add to

of the reason for that is the

the mix other types of

difficulty caused by not

marketing tools including

speaking the language and not

business cards, signage, bus

being able to be understood. I

benches, ads, bird dogs and

found the way to solve that

flyers to name a few.

problem for these sellers and for myself as the investor.

I also discovered that there is another segment of the market

I had all of my marketing

in addition to English speaking

pieces including my direct mail

sellers with folks who have

campaigns for finding

homes they need to sell for all

motivated sellers translated

kinds of reasons. The market

into Spanish. It was a huge

segment I am referring to is the

undertaking but it was well

Spanish speaking seller.

worth the effort. The first thing I had to do was to address all of

The obstacle I ran into was that

the dialect differences in the

many of these folks don't

Spanish language.

speak any English and I don't speak any Spanish. So I needed to develop a system to

Working With Motivated Sellers in the Spanish Speaking Market –Even if You Don’t Speak Spanish

market to these folks effectively since they have the same problems every other seller has. Many of my students were also contacting me to find out how

then sent these

The second way I solved

I then use an interpreter who

letters to the

this dilemma was to use a

meets with me and the seller

specific market

Spanish answering service

so I can put the deals

areas where I

to take the calls and translate

together. We meet at a

wanted to buy

the responses into English

location that works for all

houses. I sent

so I could read them. We

involved. The interpreters are

them out written

provided the telephone

very reasonable in their fees

in English on one side and

scripts for them to use. I

for their services and they are

Spanish on the other. I also

have them both in English

easy to locate. I found one in

had all of my other marketing

and in Spanish so I can

the yellow pages listed under

tools translated into Spanish

provide these to the answering

“interpreters”. Do try to find

as well such as signage,

service in whatever format

someone who specializes in

ads, lumpy mail pieces,

they want it.

real estate. This makes the whole process a lot easier.

business cards, and flyers which were also causing an

You can do the same thing.

By putting a system in place

influx of leads into our pipe

You can take your own

to deal with this market, we

line. Not only that, I even

telephone script, give it a bi

were able to do a lot of deals,

had my tenant referral program

lingual answering service,

make money and solve these

materials translated to Spanish

have them ask the questions

seller's problems.

since we have a lot of

in Spanish and then

Spanish speaking tenants.

translate the responses for you in English so you can

One of the things I discovered

read them. This gives the

very quickly was that while I

seller two different ways to

was getting a lot of response

from the Spanish speaking

what was the most

market, I was unable to

convenient and comfortable

process the deals due to the

for them. I also provide

language barrier. I solved this

these potential sellers with a

problem in two different ways.

response mechanism at the

The first was to send the calls

bottom of the letter I use so

to a 24 hour recorded message

they can mail, email or fax

which I had recorded in Spanish.

their responses to us as

I used a professional translator

well. The more ways you

to do this for me so that the

give a seller to contact you,

grammar, the dialect and the

the more of them are going

language are correct.

to.

Working With Motivated Sellers in the Spanish Speaking Market –Even if You Don’t Speak Spanish

The other method you can

agency in the country is bi

pieces, both in English and in

employ is to use a Spanish

lingual. If yours isn’t find

Spanish for you on CD Rom

speaking Realtor to help you

one that is. This is a very

and I show you exactly how

with your deals and act as

profitable part of the market

to set up an automated

an interpreter, and then pay

that none of your

system to reach this

them a fee for doing this for

competitors are going after

marketplace and process

you. If you already have a

because they simply don’t

these deals. I have basically

Realtor on your team

know how.

done all the work for you so

performing a variety of

all you have to do is get busy

services for you, this

Once you get past the

and find some properties to

shouldn't be difficult to do. I

language barrier, there are

purchase with no competition

would suggest paying the

lots of great deals to be

from anyone else.

Realtor a fee separate from

made within this marketplace

their Realtor commission.

and with these sellers.

Be sure and check out my

This is just another way to

Remember, these sellers

website at

find a reliable person to act

have the same problems

www.marketingmagiclady.com

as an interpreter for you

everyone else does when it

for more information on how

when you need to structure

comes to needing to sell a

to find all the Spanish

these deals.

property. You can set up a

speaking sellers you need for

system in your business

your real estate investing

If you are using hard money

that will bring you many

business. While you are

or private money to fund

deals from the Spanish

there be sure and sign up for

your deals, or you are

speaking market.

my free monthly newsletter

getting the deed, you will be

and receive an additional

closing these properties with

In my system, Marketing

$149.00 in FREE marketing

a title agent or real estate

MagicSpanish Upgrade, I

tools for your real estate

attorney. Almost every title

have all of my marketing

investing business.

Working With Motivated Sellers in the Spanish Speaking Market –Even if You Don’t Speak Spanish 33

Kathy Kennebrook 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

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 Donald Trump, 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, Donald Trump, 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. Dagger LLC P.O. Box 14343 Bradenton Fl 34280 9417925390 9417956887 (fax) kpaddler@att.net

Working With Motivated Sellers in the Spanish Speaking Market –Even if You Don’t Speak Spanish

hundreds of properties using none of her own money or credit.

Why Banks Do Not Allow Junior Liens

By Edward Brown,

Investor Relations at Pacific Private Money 35

Ever wonder why bank’s voluminous real estate loan documents usually include a covenant that the borrower has to accept which prohibits junior [or secondary financing]? Most of the time, these covenants don’t even have language that allows for secondary financing with lender approval. They merely state that no junior liens are allowed. In fact, the language is strong enough to imply that placing a junior lien behind the bank’s 1st mortgage constitutes a default [most likely a curable one] {curable defaults are ones that can be remedied, such as placing insurance on the property if the current insurance expires or is cancelled, as compared to incurable defaults which cannot be remedied (or, undone) such as the borrower filing a Chapter 7 bankruptcy}. Placing a junior lien behind the bank’s 1st mortgage is

usually curable if the junior lien can be reconveyed and the property is put back in the same condition [title wise, that is] as it was at the time the bank made its 1st mortgage. One might ponder why banks

expenses compared to the

loan request by the bank,

are so strict about not

monthly requirement for the

which, in turn, produces a

allowing junior liens. After all,

loan in question [both

lower monthly loan payment.

a junior lien is behind the 1st

principal and interest]. Many

Many borrowers find that they

mortgage. In fact, some non

banks have changed their

have to come up with upwards

bank lenders actually prefer

DSCR ratio requirement,

of a 35% down payment as

subordinate financing

since The Great Recession,

compared to 25% [pre Great

because it is as though there

from 1.1 to 1.35. This can

Recession] in order to satisfy

is additional security –

place a tremendous burden

the 1.35 DSCR. Adding junior

another party has an interest

on the borrower to have to

liens may place the borrower

to protect; however, traditional

come up with a larger down

in the default provision of the

banks do not view it in the

payment, in most cases,

DSCR if the junior lien requires

same way. There are a few

thereby requesting a lower

monthly payments.

reasons for this. First, banks

Why Banks Do Not Allow Junior Liens

have strict underwriting guidelines wherein they look at the DSCR [Debt Service Coverage Ratio]. The DSCR is a ratio that analyzes the cash flow after normal

Another point to consider is that the bank priced its loan based

they do not have to use other

upon original underwriting guidelines and being the only

resources to babysit a loan. The

mortgage and that no junior financing would be added. The

cost of these resources tax the

potential risk of negative changes in the DSCR or possibility

bank’s bottom line. Banks are not

that the borrower stripped equity away by placing a 2nd

in the business of taking over

mortgage had not been considered, and the bank was not

borrower’s properties. They do not

compensated accordingly. The more debt on a property, the

want REO’s [Real Estate Owned

more likely there is for a chance of foreclosure. Although the

properties]. It is much better for

bank may be protected in its 1st position [presuming that the

them to carefully underwrite loans

property has not substantially declined], when a foreclosure is

in the beginning and avoid

triggered, there is a strong likelihood that the bank may have

problems. If the 2nd ends up with

to alter the asset class of the property from performing to non

the property because nobody

performing or it may be categorized as a “troubled asset” or

outbid the 2nd at the foreclosure,

put on the “watch list” by regulatory bodies even if the bank is

the bank is faced with a new

not at risk for losing money. For example, if the borrower put

borrower. The bank may have to

35% down on a $1,000,000 building and borrower $650,000

underwrite the new borrower. In

from the bank, the bank’s 65% LTV loan may be considered

fact, if the 2nd is outbid at

conservative. However, if the borrower obtained a 2nd

foreclosure, the bank is still faced

mortgage for 15% LTV, the property now is 80% leveraged. If

with a different borrower than they

the borrower defaults on paying on the 2nd, he may or may

originally underwrote. This new

not default on paying on the 1st. If the borrower defaults on

borrower may or may not qualify

both the 1st and 2nd, the bank’s loan clearly has turned non

under the bank’s lending

performing. Nonperforming loans can have a devastating

guidelines.

effect on a bank, as they are required to set aside reserves, and defaults exacerbate this situation. The more reserves required to be set aside means the less money the bank has to lend out and generate income. Since banks lend out in multiples of their deposits, any money that is set aside [that cannot be lent out] has a negative multiplier effect. The 2nd may or may not cure the 1st and start its own foreclosure. Even if the 2nd cures the 1st, the bank is still left with a possible foreclosing party [the 2nd]. When banks make loans, they are usually looking/hoping for those loans to continue until maturity. Once a loan is made, there is less work the bank has to do. They collect the interest income and hope

Why Banks Do Not Allow Junior Liens

Why Banks Do Not Allow Junior Liens What about the scenario

they still may consider their

may be a question as to the

wherein the borrower borrows

loan in default. A lender who

validity of the “no junior liens

on a separate property and

crosscollateralizes against

allowed” as this may

crosscollateralizes against

other properties may trigger

technically interfere with the

the bank’s subject property?

a foreclosure on all

borrower’s business,

In this situation, the borrower

properties they encumber in

especially if the bank’s 1st

is not attempting to strip out

order to get the borrower to

mortgage is extremely low.

equity from the original

move toward a solution to

For example, if the 1st

property. The borrower may

satisfy their loan that is in

mortgage only has a balance

just be faced with the reality

default [under their

of 20% [either because the

that he cannot obtain a loan

terms…usually for non

borrow put a substantial

for the target property unless

payment of mortgage

amount down or the 1st loan

he is willing to allow the new

payments].

is so seasoned, that it has

lender [on property two] to

been amortized down to a

place this same loan on

Public policy may state that

low balance], there is very

property one for added

a bank is not allowed to

little risk of the bank not

security. Unfortunately,

interfere with a borrower’s

getting paid in full. Even if a

although this seems innocent

business and force him not

2nd is placed upon the

enough, if the bank finds out

to purchase/borrow on other

property, one has to question

that a junior lien was placed

property that the bank has

how the bank is impeded

on the property, [original one]

no involvement. There also

should the 2nd start a foreclosure.

negatively altered due to a 2nd mortgage, a 20% LTV on the 1st should still satisfy a 1.35 DSCR in most circumstances. After the 2nd obtains the property [or a new owner should the property end up in a higher bidder’s hands], most new borrower’s would hopefully be qualified to service a low LTV. Of course, each circumstance is independent, and most banks will want to preserve their right to enforce the “no junior lien” clause. Usually, only if the bank pulls a preliminary title report, are they aware of the junior lien. They are not usually automatically notified. The main question is whether the bank will automatically declare a default if a 2nd is placed on the property behind their 1st? When banks find out that a 2nd exists, they may either ignore it or send a letter requesting/demanding that the junior lien be removed as per the terms of the bank’s loan documents. Whether a bank decides to pursue its demand that the junior lien be removed is up to the bank; however, they want to preserve their rights by notifying the borrower that they have requested removal, and thus, have written evidence that they contacted the borrower, so the borrower cannot claim ignorance or nonnotification of the break in the covenant of the bank terms. This notification protects the bank should the bank choose to start its own foreclosure due to the default. Most borrowers who have asked permission for a junior lien to be placed behind the bank’s 1st mortgage have usually been told, “No”. That is why most borrowers figure it is better to ask for forgiveness than permission in hopes that the bank will not find out about the junior lien until the borrower either sells or refinances the property in question.

Why Banks Do Not Allow Junior Liens

In previous scenarios above wherein the DSCR was

EDWARD BROWN BIOGRAPHY Current

The Best of Investing Radio Show Host Sports Econ 101 Radio Show Host Pacific Private Money Investor Relations EB Enterprises, President

Education:

Bachelor of Science in Accounting from Golden Gate University (1981) Master of Science in Taxation from Golden Gate University (1983)

Teaching

Weekly Lecturer of Accounting and Taxation, Univ. of Phoenix (20012003) Teacher of Economics, North Bay Christian Academy (2000) Adjunct Professor of Income Tax, Dominican University (1985) Guest lecturer at various Banks, Real Estate companies, and Stock Brokerage firms (1985) and Lectures: Television and Radio:

Publications:

1220AM KDOW, Host, “The Best of Investing” business program (Current) Sports Byline, nationally syndicated, Host, "Sports Econ 101" (Current) KNBR 1050AM CoHost, “The Money Scorecard”, sports/business (200910) CNN show "Your Money" Guest Speaker on leasing investments (1988) CNN show "Ask the Expert" Guest Speaker on Investments, rates of return (1988) The Advisor – What to Consider when Analyzing Real Estate (July 2014) The Advisor – Becoming a Star on Radio – (December 2011). The Advisor – Do Mortgages Hold Up After Six Years of Wild Economic Conditions? – (October 2011). The Advisor – Should You Add Individual Mortgages to Your Client’s Portfolio – (May 2005). Financial Planning Magazine (198889) Various articles on Investments, rates of return, yield to maturity, life insurance, disability insurance, and convertible municipal bonds. Wall Street Journal (1988) Interviewed as expert on Equipment Leasing Partnerships in the Secondary Market. The Practical Accountant (1986) Donors deductions. San Francisco Business Journal (1985) Amending Income Tax Returns.

Professional Accomplishments:

Expert witness in arbitration and court cases dealing with investments. Expert witness consultant regarding tax returns and fraudulent financial statements and information in the largest judgment in US history ($50M) against a gun manufacturerspreadsheets published in US Bankruptcy Court proceedings. Prestigious MBA Tax Award Winner (1983). Appointment by the U. S. Department of Justice to serve as chairman of the Shareholder Equity Committee to protect 29,000 shareholders representing a $500 million REIT (1993). Former semiprofessional bowler.

Professional Licenses Currently Or Formally Held:

Series 7 Securities License, Life and Disability Insurance License Certified Fund Specialist, California Real Estate Sales license California Licensed Tax Preparer

All-Inclusive Trust Deed or Mortgage

By Dr. Albert Lowry 41

An allinclusive trust deed or mortgage is also sometimes referred to as a wraparound or overriding trust deed or mortgage. This is a trust deed or mortgage that is subordinate to, yet includes all the encumbrances to which it is subordinated. But sometimes in connection with refinancing. It is easier to illustrate than to explain.

A few years ago, I knew an

six months’ unearned

the unpaid balance of the first

owner who wanted to sell a

interest, or another $900.

mortgage, and that the seller

property on which he was

would still be responsible for

paying off a twentyfive year

A second possibility is that

making payments on that

loan. The unpaid balance

the buyer might assume the

underlying obligation as it

was $30,000. He was paying

$30,000 existing loan and

stood. So the seller was in the

6% interest. He found a

have the seller carry back a

comfortable position of receiving

wouldbe buyer, and the two

purchase money second

interest at an annual rate of

of them agreed on a price of

trust deed or mortgage for

$4,250 (8 ½ percent of

$60,000, with the buyer to

the remaining $20,000 of

$50,000) while paying out

put up $10,000 in cash,

the sales price. The interest

interest at an annual rate of

leaving $50,000 to be

rate could be whatever the

$1,800 (six percent of

financed somehow.

buyer and seller agreed on

$30,000), thereby netting

up to the maximum legal

$2,450, or 12.25 percent on

One possibility was for the

rate, which in their state

the $20,000 difference between

buyer to try to refinance the

was 10 percent at the time.

the two notes. This is 2.25

$30,000 first mortgage with a

percentage points higher than

new, larger loan. However,

A third possibility (and the

could legally have been

the money market was tight

one they finally decided on)

charged if he had carried back

at the time. Any new loan he

was to use an allinclusive

a $20,000 purchasemoney

might get probably would not

deed of trust. The buyer

second. The arrangement put

be for more than $42,000

gave the seller a promissory

an extra $450 per year into

and would cost him 10

note in the amount of

his pocket.

percent interest plus at least

$50,000 with interest at 8 ½

two points. In addition, there

percent. The note contained

would be a prepayment fee

a clause to the effect that

on the existing loan equal to

it’s face amount included

AllInclusive Trust Deed or Mortgage

The buyer made more

There is a lockedin loan that cannot be paid off – at least

money too. He avoided

without severe penalties.

completely the $900

The buyer is a poor risk and is making a small down

prepayment penalty and some $1,000 in loan

payment. 3.

origination costs he would have incurred if he had

but not to the terms of sale. 4.

taken out the new 10 percent $42,000 mortgage.

The existing loans are at lower interest rates than you could get on new financing.

Furthermore, he ended up paying 1 ½ percentage

A property is overpriced and the seller sticks to the price

There is little time to shop for new loans and little chance of the buyer’s qualifying for them.

The down payment offered is so low that the only practical

points ($750) less annual

alternative would be for the seller to carry back a large

interest than he would have

purchase money mortgage.

paid on a new first and second totaling $50,00

There are so many ways to make money with real estate.

AllInclusive Trust Deed or Mortgage

fortunately, the option to use an allinclusive note is

On Saturday, November 5th, I’m flying in to teach many of the

limited to cases where

most creative strategies that successful investors use to get rich!

there is no acceleration or

These are strategies that are really easy to implement, and you

other alienation clause in

could be using them to make money right away! This is one of the

any of the notes or

best times that I have seen to make money in a very long time,

mortgages against the

but it means nothing unless you make the effort to learn and

property, or if there is such

implement.

a clause, the lender agrees to waive it. He will seldom

Saturday, November 5th! See you in class!

waive it unless he has little to lose by doing so. In that case, the borrower may also have little to gain from the lender’s willingness to allow the loan to stand intact. When there is no clause in the existing loans that blocks them, all inclusive loans can be good

Dr. Albert Lowry

to use when:

Investment Strategy:

BRRRR vs. Filthy Riches By Larry Goins

Larry Goins on the BRRRR strategy and Filthy Riches…

An example scenario may look

Not too long ago, founder of

Purchase price: $50,000

something like this: ARV: $100,000

Realty411 Magazine, Linda Pliagas and I were hanging out with some

Rehab costs: $10,000

fellow investors in Texas. If you know Linda, she has a fantastic

Refinance: $75,000

personality, is a serious magazine editor, and is great at bringing people

Ongoing rental income: $800

together. She also actively invests in

per month, gross, before debt

real estate herself. She mentioned

service and expenses.

that she was just getting ready to refinance some of the free and

clear rental properties she had purchased for cash. I’m like “oh, you’re are doing the BRRRR method.” She hadn’t related the term to what she was doing, but it is a popular model being thrown around on the online forum BiggerPockets. So, what’s BRRRR? How does it work? Is it the best solution for investors?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. This is a cash and cash flow real estate strategy. Investors will purchase properties for cash, or use shortterm, hard money type loans to purchase property. Then dig into repairs and improvements to add value and get them rent ready. Then once that property is in shape and performing, investors attempt to refinance to get cash out and/or get better longterm financing terms, which create more cash flow. The cash extracted can be used to acquire another rental property, while keeping the previous one as a rental.

Investment Strategy: BRRRR vs. Filthy Riches

What is BRRRR in Real Estate Investing?

The Pros & Cons of BRRRR This strategy has both advantages and disadvantages.

The Pros:

The Cons:

• Can be a way to gradually scale your rental

• Slow approach to cash and wealth building. • Long term debt, and skimming equity can

property portfolio.

• Acting as a cash buyer to acquire houses fast and at good prices.

• Achieving lump sums of cash and cash flow.

leave investors in tight spots.

• Lots of equity tied up. • Headaches and risk of rehabbing and renters. • Reliance on refinancing.

The reliance on being able to refinance has been a risky stumbling block for many trying to use this strategy. Some have tapped out credit cards or home equity loans, and have been unable to complete renovations to a stage where they can rent or resale properties. Others haven’t been able to find lenders who will give them cash out loans. There is never a guarantee that refinancing will be possible down the road. There are just too many variables, from personal credit and paperwork requirements, to construction challenges, and a changing lending landscape.

Investment Strategy: BRRRR vs. Filthy Riches

Filthy Riches: A Simpler Strategy for Profiting from Real Estate ‘Filthy Riches’ is all about making great money, on cheaper houses. There are some similarities in these strategies. For example; the ability to generate both lump sum paydays, and cash flow.

However, the Filthy Riches plan stands out with a few additional advantages, including: NO loans needed. NO bank loans needed by buyers to resell your properties. NO problem finding deals. NO getting stuck on the next step. NO taking on wild risks or gambling on the market.

Investment Strategy: BRRRR vs. Filthy Riches

NO fixing up properties. NO credit checks. NO financing delays. NO limits on where you can buy or sell. NO competition. With this strategy, you can make more money on a $5,000 house than the average investor makes on a $100,000 house with the BRRRR strategy. In fact, you can make 141.88% returns, on a $5k house, with no rehabbing, and no tenant hassles. That’s $45,563.06, back on a home bought for just $5,000! You can take those returns in monthly cash flow, lump sum payments, or a combination of both. This system allows for far easier scaling and diversification, which can rapidly put 19 deals under the control of an investor, within about 12 months.

About Me

Larry H. Goins

I’ve been investing in real estate

Larry H. Goins has been investing in

for over 30 years. I bought my first

Real Estate for over 20 years. In the

house in 1985. I’ve been a

past, Larry has served as President

licensed broker, contractor, and

(2003 & 2004) of the Metrolina Real

lender. I’ve done all types of real

Estate Investors Association in

estate deals during this time. This

Charlotte NC, a notforprofit

is by far one of the simplest and

organization that has over 350

fastest ways to get started and

members and is the local chapter of

grow your income through real

the National Real Estate Investors

estate. I still use it today. I have

Association.

students making over $1M with this strategy in 12 states, and from

Larry is an active real estate investor

at least 8 countries.

and travels the US speaking and training audiences at conventions,

Whether you’ve been struggling to

expos and Real Estate Investment

just get started, got stuck on a

Associations on his strategies for

BRRRR deal, or want to grow your

buying 1015 properties per month without ever leaving his

results faster, you can find out

office.

more about how this works in a FREE 7 part video series at

Between speaking engagements and mentoring other

FilthyRiches.com .

Investors, he oversees the daily operations of Investors Rehab, Inc. Investors Rehab, Inc. is a real estate investment company that buys and wholesales 1015 properties per month to other investors.

BRRRR can work. Many investors are trying it. Yet, many could get

On a personal note, Larry and his wife, Pam, have two

going faster, and make far better

children, Linda and Noah. He is a member of River Hills

returns, with less work, and less

Community Church in Lake Wylie, SC and plays guitar in

risk, by using this proven system

the Church Praise Team.

instead. Check out the free videos, and see exactly how it works, and

As a husband, father , businessman and real estate

if it is the right fit for you. You may

investor , Larry holds true to his core values and moral

be very surprised at how much

integrity . His personal and business motto is, “People &

easier this is!

Principles before Profits”.

Investment Strategy: BRRRR vs. Filthy Riches

The Bottom Line

W ha t ’ s Yo ur B e s t I n ve s t m e n t St r a t e g y ? By Ramon Tookes 49

Real estate investing is and will always be one of the best ways to build wealth. As with any investment, you must have a strategy. In real estate, three main strategies are wholesale, buy and hold, and fix and flip. Most people think that fix and flipping is my favorite strategy, but it’s really not!! My favorite is buying and holding. I really enjoy buying and holding for several reasons. One, buying and holding creates long term wealth also known as generational wealth if properly managed. My goals include leaving a legacy and properties for my children and my children’s children and so forth. This is the strategy for that. Two, buying and holding gives you the opportunity to control real estate, which is not being made any more. Three, the properties should and usually appreciate (increase in value) over time. Finally, when you buy and hold properly, you can create cash flow for saving, investing, and financial freedom. I enjoy wholesaling. Wholesaling is making a fee for finding a property for a buyer that will successfully execute their goal. This can be done with assignments and double

What’s Your Best Investment Strategy?

closings. I like this strategy because it takes away a lot of the responsibilities and stress of ownership. Wholesaling can lead to quick profits. If you are building a wholesale system, it requires hard work, which most people that want to wholesale fail to realize. There are lots of fast moving pieces in the wholesale business especially in this market. I have wholesaled hundreds of properties during my career, but have had the most headaches using this strategy. And yes, I do enjoy fixing and flipping. I am known as “Mr. Flipology” because I teach/train investors how to properly flip real estate through my investing educational and training course called Flipology 101:the Bootcamp. This not only includes single family residences, but also land, multifamily, and commercial. I enjoy flipping because it leads to large profits, build communities, and I get a satisfaction of seeing a homeowner own a property that they love. As with the other strategies, to successfully flip, you must create systems. These systems involve lots of other people including contractors. These strategies are implemented according to your preference and what you can use most effectively. Do not try to use one of the other because someone else is using it. Many of the properties that I wholesaled or flipped I wished that I had bought and held them. I know that this is after the fact, but most people who have built massive wealth in real estate have done so through buying and holding.

Ramon Tookes (Mr. Flipology) Ramon Tookes is a real estate investor, coach, author, wealth builder, public speaker, radio celebrity and developer with 20+ years of experience in the industry. Ramon currently oversees the daily operations of The Tookes Group, a firm that he founded in 2005, specializing in real estate investment consulting. Ramon has been surrounded by entrepreneurs for his entire life. He watched his grandfather build many successful businesses, his father amassed a respectable real estate portfolio and his uncles had a lucrative contractor business. Ramon began his entrepreneurial career as a teenager when he started his own lawn care service and car wash. He inked his first real estate deal as a freshman in college and financed his college career with the proceeds from his real estate investments. To satisfy his passion for philanthropy he introduced his 2day signature event, Flipology 101 Bootcamp, as a medium by empowering others to utilize real estate as a viable wealth building vehicle. Flipology is defined just as it sounds “The science of flipping houses”. During this intense learning experience he introduces his proven strategies and tactics, along with his entire team comprised of a closing attorney, credit specialist, Realtor partner, lender partners, and more to his students. He has since expanded this brand to encompass Flipology 402: Buy & Hold, Flipololgy 401: Passive Income, Flipology 201: Wholesaling and other valuable, educational opportunities. He has added one more medium to his educational and informational platform: radio! He recently launched a weekly radio show, Flipology Radio: Late Night Real Estate Talk Show, where he brings on featured guests to talk about different aspects of his favorite topic! Because Ramon knows and understands that real estate investing is just one piece to the puzzle of living a complete and wealthy life, he hosted “Wealth Building 2017”, a conference that encouraged attendees to “Inspire wealthy thoughts! Learn wealthy tactics! Perform wealthy actions! And live a wealthy life!” Wealth Builders will be an annual, oneday, life changing event held every January! Wealth Building 2018 is happening January 20, 2018! This visionary entrepreneur earned his BS in Criminal Justice from Georgia State University and his Juris Doctorate (JD) from Emory Law School. Although he started out wanting to become the next Johnnie Cochran, his passion for real estate was undeniable and continues to grow and intensify daily. Born and raised in Atlanta, GA, he is the proud father of five children and enjoys reading, sports, and travel.

To schedule Ramon for a speaking engagement or training/educational experience please reach out to Jill ForteJackson 7708968723 jsforte2001@yahoo.com @jillfortejackson 51

Some Real Estate Lessons By Bruce Kellogg

The Syndication

Introduction

According to title records, Frank raised nearly $600,000 from six partners in a Limited Liability Company (LLC) structure. He gave each partner a security interest in a deedoftrust that was secondary to a private first loan of $465,000 from a group of

This is the story of the property in Fig. 1, which is a 3,800 square

Along Comes “Frank” (pseudonym)

dentists who owned “Novocaine LLC”. Frank didn’t care if his partners

foot Victorian house that was built

were “accredited” or not,

in 1898 ( i.e., age 120). Some

Frank was a newlyminted “real

years ago, it was converted into

as long as he got the

estate entrepreneur”, who had

five studios and three 1bedroom

money for the project.

recently completed training in

apartment units. The purpose of

“Apartment

this story is to illustrate many

Rehab and Re

lessons that can be learned about

positioning” by a

rehab, “flipping”, and syndication.

national trainer.

History

Being a bright fellow and a smooth talker,

The property was owned by a

Frank decided

woman who lived outside the

to form a

country, an “absentee owner”.

syndication to

She “milked” the property for the

raise the money

cash flow, allowing maintenance

needed. He

to be deferred, and keeping rents

didn’t have any

low to sustain a steady

money of his

occupancy. The management

own. (Actually,

company performed to her low

he was living

standards.

with relatives!)

Fig. 1

Some Real Estate Lessons

The Purchase

Frank said he spent $200,000 on seven units. For

An LLC, Frank’s investment vehicle, paid

run out of money, and the partners said, “NO

$775,000 for the property. (He thought he “stole”

MORE”?)

some reason, one unit was not done. (Did Frank

it since the perunit cost was quite low in this particular market. Actually, counting the

On second glance, not so great. Three years on,

deferredmaintenance, Frank had overpaid!)

the cheap/thin laminate floors are peeling. Frank

With the loan from the dentists, Frank’s partners

replaced three gorgeous stainedglass windows

put in $310,000 plus closing costs. They had a

with cheap imports. (Fig. 2 is one that survived.)

little under $300,000 left for rehab and holding

The stoves and refrigerators are “discounted/

costs.

blemished” with some of the blemishes obvious. (The national trainer probably taught Frank this

The “Rehab”

“moneysaver”.) The exterior was pressure

At first glance, the rehab was fairly thorough.

not scraped or caulked at openings, so it’s looking

New composition roof, laminate and vinyl floors,

ragged now.

washed before spraying on the cheap paint, but

tile kitchens and showers, new kitchen cabinets and vanities, new vinyl windows, new stoves and refrigerators, new interior and exterior paint.

Selling the “Flip” All of the tenants were either helped to vacate or offered a rehabilitated unit at about 40% more rent. (That’s how apartment “turnarounds” are done!) Frank listed the apartments for sale for $1.5 million. There were a few showings, but only after the price was reduced below $1.4 million did it go under contract. Even then, two parties backed out based on discouraging inspection reports.

Some Real Estate Lessons Fig. 2 54

Frank hired a new broker

perimeter foundation. They

who worked “highend”

hired a statelicensed

homes rather than

contractor, who started work.

apartments, and Frank did

However, probably to save

not have the new broker give

time and money, neither the

1) Frank lost money.

the prior inspection reports to

manager nor the licensed

2) Frank’s partners lost money

the buyers (which is legally

contractor obtained a permit

3) Frank has left town

required). For some reason

for the new foundation.

4) The present owners are

the final buyers were not

Someone, a neighbor

going to lose lots of $money

made aware of: 1) low water

probably, complained to

5) The contractor’s license is

pressure (old, clogged

Code Enforcement, who

in jeopardy for not getting a

pipes), 2) inadequate electric

issued a “Stop Work Notice”.

permit

service, 3) crumbling

Fig. 3 shows the boardedup

6) The owners will likely sue

masonry foundation (not

foundation going into its third

the manager, the contractor,

concrete), 4) termites, wood

month.

and their broker

eating beetles, 5) dry rot and

the time being.

Conclusions

7) The broker and the

fungus damage at kitchens

Additionally, Code Enforcement

property manager could face

and baths, 6) faulty exterior

has “red tagged” the unit that

disciplinary action by the

drainage system (basement

had not been rehabbed. It

Bureau of Real Estate

floods in the rain). But the

cannot be rented. Management

broker made a commission

has removed the range and

Attachment #1 is a List of

of over $50,000 on the $1.3+

refrigerator, indicating the

Lessons. What can you add

million sale!

unit has been abandoned for

to it?

The present owners are still using the same property manager as the overseas woman, the manager with the low standards. Recently, the owners decided to replace the masonry

Fig. 3

foundation with a concrete

Some Real Estate Lessons

The Current Situation

List of Lessons 1) Don’t try to flip a 120 yearold Victorian (unless that’s your specialty)! 2) Hire only topquality property managers (and pay them well). 3) Invest only with experienced syndicators with a proven “track record” and plenty of “means” behind them. 4) Borrow only from “accredited” investors, or those who know you. 5) When buying at a discount, make sure it’s a genuine discount. Corollary: Don’t fall in love with the “opportunity”.

6) Rehab with quality materials and workmanship. 7) When buying or selling, use brokers or agents with the appropriate specialty. 8) Invest in all appropriate inspection reports when buying. 9) Obtain permits for all construction work/repairs where permits are required.

Bruce Kellogg has been Bruce Kellogg d investor a Realtor® an cted He has transa for 35 years. nts, perties for clie ro p 0 0 5 t u o b a r 0 properties fo and about 30 ties. alifornia coun himself in 12 C partments, 4 units, 5+ a 1 e d u cl in se T he land, use buildings, d e ix m s, e ic ff o and omes, cabins, lots, mobile h ting, vailable for lis a is e H s. e h churc g, lting, mentorin selling, consu at g. Reach him and partnerin , 0@gmail.com brucekellogg1 131. or (408) 4890

Some Real Estate Lessons

real estate investors. He’s also been where most are today. He’s had to start fresh. He’s managed huge portfolios of business, and he’s all too familiar with the crisis 2008 and other natural disasters have dealt property owners.

Growth Mode A lot of investors are trying to put their pedals to the metal today. They get the opportunities that are out there right now, and how they may not look this good forever. They know interest rates are likely to keep rising, along with asset prices, while these inventory opportunities won’t last forever. Many are exercising the ability to lock in financial independence, long term passive income and growing returns now. ATTOM Data Solutions reports that there has been a big surge in the number of investors who own up to 10 properties, as well as those who own 11 to 100 properties. Tim Herriage and his team have been helping many of them. Some are still looking for missing pieces to the puzzle. As Somewhere in between coming

we’ll reveal in a moment, 2020 REI has a lot of them, and is

fresh off of recording a new episode

on a mission to make real estate investment accessible and

of a new real estate investor

easy.

podcast and roaring onto a Dallas expressway in a Mustang GT, Realty 411 caught up with Tim Herriage of the 2020 REI group of companies. If there is someone who knows about growth and the value

Growing & Protecting Wealth With 20/20 Vision

of protecting your real estate assets, it’s Tim. He has a serious background in high level strategy, and ran a finance division for the nation’s largest alternative investment firm before opening his own suite of companies to serve

Protecting Your Gains

thing that may trump that

“you think you are okay. At

today is the feeling that

least until disaster strikes, or

comes from knowing he has

someone wakes you up to

While not as sexy as high

saved investors’ financial

the fact that you are

volume acquisitions and

futures by providing great

overpaying, without really

flipping high end luxury

protection for their assets as

getting the coverage you

homes to celebrities, winning

well. Tim says “when a client

though you had.” There is no

in real estate is just as much

calls you up and says the

doubt that thousands of

about protecting what you’ve

only reason they are still a

investors could have been

got and are building. Any

millionaire in the wake of the

saved from financial ruin

truly experienced investor

Houston hurricane is the

over the last decade if they

who has lived through 2008,

protection you provided

really had a good insurance

hurricanes, California

them, that’s huge. It really

partner. Unfortunately, too

mudslides or wildfires, or

means something.”

often insurance is an

devastating nor’easters will tell you that. It doesn’t matter how much you make. It

The Investor’s Choice

afterthought, another necessary evil, or just a check mark to get deals closed. It shouldn’t be. Now

matters what you can keep and truly count on. With real

REI Choice Insurance is

estate investments the hard

2020 REI’s powerful

tangible land asset may

property insurance arm. It’s

REI Choice Insurance works

always be there, but most

one of the power tools for

to optimize coverage for

can’t afford to lose the

minimizing risk in investing,

great protection, with low

improvements and their

as well as for optimizing

deductibles and low

anticipated income flow. At

cash flow and overall yields.

premiums. Policies are also

least not for long.

Backed by one of the

specifically designed to work

businesses’ top underwriters

for real estate investors.

Tim says one of his favorite

in this space and overseen

things is seeing the agents in

by industry veteran and EVP

his brokerage connect with

Andy Costlow, the company

new assets that will provide

was designed to squash

for their financial futures. He

insurance challenges for

loves seeing others get the

real estate investors.

funding they need to get in and scale their income

Tim Herriage says that

properties too. Yet, the one

typically as a new investor

Growing & Protecting Wealth With 20/20 Vision

it doesn’t have to be.

Key highlights to love include: • Ability to get quotes and bind insurance right online

The Golden Rolodex

at REIChoice.com

• Coverage for vacant and rental properties

• Pay only for the days

When it comes to getting ahead and staying ahead in real

needed, with monthly

estate it is really still very

payment options

much about who you know.

• No inspections required in advance of coverage

• Theft, windstorm, and

2020 REI has certainly done a lot to breakdown the veil and make it easier for

the market overall,

flood binder options

everyone to invest in real

though like many

• Coverage for foreign

estate. Yet, whether it is

individual investors love

nationals and foreign

looking for deals, finding a

doubling down in our own

property investments

funding partner, selling a

backyard (DFW). It’s good

portfolio, or ensuring your

to be open to different

You can even get coverage

assets are covered in a

markets, but most like

for bed bugs, appliances

moment of mayhem, who

investing close to home.

before they get installed, and

you know still matters. There

Providing you are investing

in case a property become

is no question that Tim and

where the jobs are, then

no longer rentable. Plus, you

his team of elite executives

growth prospects look great.”

can have your future income

and their connections

flows from your properties

represent one of the best

insured. Along with

rolodexes to have access to

bankruptcy coverage.

in the business. They are frequently called on both for

Tim Herriage says that as

their hindsight and for

investors have become

navigating what it ahead.

aware of this service and its advantages they have taken

In terms of his personal

to it in a big way. One

perspective on the single

investor even just moved

family rental market, Tim

over a whole portfolio of 150

says he “like many others

properties to REI Choice.

we’re very bullish on

Growing & Protecting Wealth With 20/20 Vision

Summary The property landscape still looks ripe for seizing on opportunities with low rate leverage and cheap capital. Whether you are just starting out and need deals, are seeking funding in the form of fix and flip loans or $3M credit lines, or are looking to cover your already large portfolio of assets with risk protection, it’s worth looking up the 2020 REI group of companies, finding out how they can help, and making sure they know you and reach out when they have opportunities to help you grow, fund, exit and protect. Find them online at 2020REI.com, call them or attend the next investor meeting in Dallas, TX.

Tim Herriage is the Founder & CEO of 2020 REI Group, a collection of entrepreneurial real estate investment companies specializing in brokerage, acquisition, disposition, private equity, nationwide financing, and advisory services. Herriage has been on the leading edge of the real estate investor space for over a decade, founding the REI Expo and previously serving as Managing Director for Blackstone’s B2R Finance and Franchisee & Development Agent for HomeVestors® of America. Herriage has acquired more than 1,200 singlefamily investment properties and completed more than $1 billion in real estate transactions, predominately in the North Texas area. In addition to being a seasoned entrepreneur, Herriage is passionate about creating and spreading opportunities for others to succeed in real estate investing by providing innovative financing offerings, quality education programs, and reliable structured investments. Through his private equity and fund management firm, Elevate Private Capital, Herriage and his team source and invest in strategic real estate assets, with the current fund focusing on providing investors with exceptional opportunities to benefit from the rapidly growing Dallas/Fort Worth residential real estate market. Herriage also established Investable Realty to provide investors of all sizes with specialized brokerage and investment property finding services. Through DFW Investors, Herriage hosts resourcerich events for the local Dallas / Fort Worth investor community, providing guidance and support for investors in all stages of the investment lifecycle.

Growing & Protecting Wealth With 20/20 Vision

Tim Herriage

The Listed Sisters... Nashville Will Never Be the Same!

together, and it would be really cool if we had

“I feel like twins are very lucky people because they're born with a best friend!”

our own TV show. “We got the idea for the show through our production company who brought it to HGTV; they liked the idea and here we are today.”

- Alana LeBlanc

What’s the best part about working together? “I think the best part of working together,”

said Lex, “is the fact that we’re twin sisters so win sisters Alana and Lex LeBlanc are

we’ve pretty much been best friends since

the dream duo every seller wishes they

we were born.

had in their corner. “We know each other...we know how we

As the stars of HGTV’s Listed Sisters, these two

work...and we actually have completely

busy moms help clients renovate their existing

opposite personalities, so it works for us in

homes so they can get top dollar to move into the

our careers. She thinks of something I don’t

home of their dreams!

think of, I think of something she doesn’t think of, and so we complement each other.”

Let’s find out more about the women who are

How was Twisted Sisters born?

What would you say is the hardest renovation you’ve done so far?

“Alana was actually in real estate here in

“We recently did a ‘neverending’ renovation

Nashville, focusing on new construction, and I

where we added a second story to the

was living in New York at the time, doing my

house,” said Lex.

taking the Nashville real estate market by storm!

interior design thing when she called me down to see if I might be interested in moving out to

“In some neighborhoods here in Nashville,

Nashville and helping her out with her clients.

the code department is a little hard on renovations. It took forever, and was one of

“As you know, with new construction you have to

those never ending renovations, but in the

pick out all of the finishes and materials, so I

end we got it done, it turned out beautifully,

came down for a visit, and I’m like yeah, this

and it was all worth the wait!”

town’s great...we could totally get into business

The Listed Sisters... Nashville Will Never Be the Same!

are some neighborhoods outside of Nashville that we’re pushing towards as well.”

“Absolutely,” said Alana. “Lex just jumped in on the real estate side...she was primarily doing the design side. She’s licensed out here

What would you like people to know about Listed Sisters?

in Nashville, so we’re trying to build our real estate

“I think that in every journey

business.”

there’s a lot of challenges,

So Lex, you’re a realtor now?

and Lex and I have been through quite a few ups and downs...just sticking with it and working really hard we

“I am a realtor now, and

can always work it out.

Alana and I have partnered together so we're doing a lot

“And definitely, keep your

of real estate. We’re still

eyes open for new episodes

doing the design stuff as well

that will be airing over the

but we're also doing a lot of

next year.”

real estate adventures together in town as well.”

What neighborhoods do you usually work in? “We stick to Nashville predominantly,” said Alana, “we’ve got a lot of stuff going on in East Nashville, but the city is growing and it’s

Nashville Will Never Be the Same!

pushing outward, so there

The Listed Sisters...

Where do you see yourself in 5 years? Are you going to keep doing this?

REi Wealth Magazine Featuring the Listed Sister from HGTV

Articles inside

Are We in a Bubble Market?