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PUBLISHER
Linda Pliagas LEGAL COUNSEL Boesch Law Group CONSULTANTS Steven Kendis, GRI Bruce Kellogg ADVERTISING Jason Burke Kasey Barrett Patricia Rodriguez EDITORIAL STAFF Tim Houghten Stephanie Mojica
COPY EDITOR Bruce Kellogg Stephanie Mojica PHOTOGRAPHER John DeCindis PUBLISHED BY Pliagas Enterprises VICE PRESIDENT Nikolaos K. Pliagas CONTRIBUTORS Jay Butler Dan Harkey Geraldine Barry Jeffery Watson Kathy Kennebrook
Laura Alamery Sharon Vornholt Lex Levinrad Matt Malouf Reggie Brooks Kristine Gentry Sunil Tulsiani WEB MASTER Maria Landicho MARKETING Holly Lynn Rosa Houghten EVENTS & EXPOS Shanelle Koellish Michael Ringwald
805.693.1497 | Visit www.REIWEALTHMAG.com
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Monthly
REIWealth
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Table of Contents
11
Meet Sunil Tulsiani...
18
3 Strategies
25 31
Hang in There!
37
Liens and Encumbrances
45
Probate Leads:
51
Should New Real Estate Investors
57 63
Sand In Your Gears
70
Segregating Assets and Liabilities
79
Benefits of Diversified Portfolio Benefits
85
The Housing Choice Voucher Program
Former Police Officer Turned Millionaire Property Investor To Push Your Business to the Next Level
Feel Like Your Branding Sucks? 5 Ways to Cure That Now! Affecting Real Property
Massively Discounted Properties in Your Market that You're Not Getting... But Your Competition Is
Attend Local REIA Meetings?
Real Estate Investing With No Money or Credit
In International Real Estate
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Learn About Sunil's Upcoming Event with Legendary Investor Robert Allen
Meet Sunil Tulsiani... Former Police Officer Turned Millionaire Property Investor
By Anita Cooper 11
F
"For a rich person, it’s a rich world. For a poor person, it’s a poor world. But, it’s the same world."
Sunil Tulsiani
kitchen, that would be our
“The problem was I was 5'
bedroom, that would be
2". I was skinny. I was
everything.
short...I was not going to amount to anything and I
“And I remember our
was not a good student.”
parents fighting with the landlords all the time and we
Like many successful
What you believe about
would be moving to different
investors and
yourself...and what you tell
locations most of the time.
entrepreneurs...Sunil
yourself...is more important
overcame what many
and more powerful than
“So then we moved to
viewed as being roadblocks
what others say about you.
Canada I was told I was too
to success.
dark, too skinny...that I Why?
would never amount to
He never gave up.
anything. Because it has a direct
“Anyways, I became a
impact on what you can
“I was a bad student all my
police officer; a uniformed
achieve.
life. My parents told me that
officer. I went from
if you don't study hard, you'll
becoming a uniformed
not amount to anything.
officer to a detective, to a
“I was born in India,” says Sunil, “and I came to Canada in 1981.”
police negotiator...and at the My dad used to motivate me
end, before I left the police
by saying if you don't study
force, I became the platoon
“Growing up we were
hard you will beg on
commander.
extremely poor. I would say
streets...and so that was the
we used to live in other
environment I grew up in.
people’s homes as paying guests, all 5 of us. My
“Then, one day my uncle
parents lived with us. If
comes to me and says you
somebody had a 2 bedroom
should be a police officer.
condo, or apartment, we
Here I was, 15 years old in
would rent the one bedroom,
Toronto, and so I looked up
and that would be our
to the police officers.
12
Meet Sunil Tulsiani... Former Police Officer Turned Millionaire Property Investor
“And yea, so it was an
Investment Club, the
thought I was going to open
interesting life, and the
catalyst to his transformation
up a coffee shop or
whole point here is that it’s
from platoon commander to
something like that!
truly...I know people have
successful property investor
heard this before...but if I
began with the words that
“Anyways, they thought I
can do it, then anybody can
nobody wants to hear…
was crazy; I went all the way down. My detachment
“And if someone had asked
but then one day my wife
commander calls me in and
me to get up on the stage
comes to me and says,
said okay, it's been
for 30 seconds and say
“We’re having a
approved, but he said
some words, I would melt.
divorce...you don’t spend
something which I really
time with us. You don’t
didn't like at that time, but I
“Today...I speak around the
spend time with our
love the fact now, was "we
world to big audiences.
children.”
know you'll be back".
“In fact, we just signed a
“When I looked at all my
deal where I just came back
friends I saw that they were
from Lithuania, and I’m
all divorced...unhappy...poor.
going to be sharing the stage with Brian Tracy in
“So I thought, okay...well I
front of over 1200 people.
keep saying that my family is the most important, but am I
“So not only from an
acting in a way that
investor’s point of view, but
suggests that? And I
from a confidence point of
realized I was not.
view, from a success point of view, from a public
“So I decided to go to my
speaking point of view, you
commander and said I would
know it’s a living testimony
like to have a one year leave
that anyone can do what
of absence and they thought
I’ve done.
I was crazy.
While Sunil is now known
“I had no experience in any
as the Celebrity Real Estate
business, entrepreneurship
Wealth Coach and founder
or real estate...I did not
of the prestigious Private
know I was going to be a real estate success at all...I 13
Meet Sunil Tulsiani...
“I was enjoying my career,
Former Police Officer Turned Millionaire Property Investor
up the ladder and came back
do it.
“And to me that was almost like him telling me that I’ll fail.” That same tenacity that helped Sunil rise in the ranks of the police force served him well as he discovered his skill in growing wealth through real estate and coaching others to success. “Well one day I opened up a newspaper in Toronto, and there's this guy named Robert Allen who says you can buy properties, nothing down. “So I picked up the news, I threw it away, and a few minutes later I picked it back up. It was right in my face again, and so I went to that event, it was a two hour event and I bought a $5,000 dollar course of Robert Allen’s; it was a 3 day event. “And that course changed my life completely. “I bought and sold 77 properties the first year. I became almost an instant millionaire, and then I opened up a real estate club and now I have the largest elite real estate club in North America, including America. The Private Investment Club stands above many other real estate investment clubs because it’s a “doing” club. When members meet and network with each other they’re focused on getting things done, not just talking about it.
Meet Sunil Tulsiani... Former Police Officer Turned Millionaire Property Investor 14
Like the elite investors who join his club
Anita Cooper is the founder of
when Sunil wants to do
Northwoods Writer, a marketing
something he goes out
resource for real estate
and does it.
professionals. Errorfree, persuasive writing that meets
“My goal has always been to go and hunt down all my heroes
or exceeds expectations is her
that have changed my life; namely Tony Robbins, Jack Canfield,
obsession...that and
Brian Tracy, Robert Allen, Doctor Deepak Chopra, Oprah...and
coffee...black.
to not only shake hands with them, take photos with them, but She lives with her family in the
also do business with them.
beautiful Northwoods of “Well many years later after taking his course and achieving
Wisconsin when they’re not
great success in real estate I was able to connect with Robert
cruising the highways and
Allen. I was able to tell him look, Robert Allen, your course
byways on the lookout for
changed my life!
something new and interesting or at least calm and relaxing.
“And he was very excited and we ended up doing business
“This event is similar to the event that I took and we're offering the general ticket, for which I paid $5,000 for to a small, select group of people for absolutely zero! “So if you want to have access to these 2 day event tickets...the same kind of event that launched my multimillion dollar career as a real estate investor and celebrity real estate coach...come to our event on September 22nd and 23rd. If you’re ready to learn how to build a real estate portfolio that can help you retire comfortably within five to ten years, click here to book your complimentary tickets now...before we reach capacity. “I look forward to seeing you there!”
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Former Police Officer Turned Millionaire Property Investor
“Nothing Down” event.
Meet Sunil Tulsiani...
together...and now, we're bringing Robert Allen to Dallas, for the
411 16
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JUNE 12, 2018 GERALDINE BARRY
BUSINESS BUSINESS, REAL ESTATE, SILICON VALLEY, SUCCESS
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s an entrepreneur, real estate investor, and writer – someone who has lived and breathed
Three Simple Strategies to Create Efficiencies & Results:
1.
business in Silicon Valley for over 20 years, I’ve experienced the roller coaster that is typical
Invest in high caliber people:
in the life of the entrepreneur.
Depending on the size of your
Running a busy business,
business – a couple of high
publishing a magazine, raising
producing, results oriented
two children – it was stimulating, and even invigorating at times, but also grueling.
team members who buy into the vision can transform the business by invigorating and injecting a new lease of life into
I graduated from university with a degree in
the team. One great addition is better than 10
entrepreneurship in 1994. (Before that was a
mediocre ones.
popular major.) I’ve always enjoyed business, and love living in the entrepreneur capital of the world, Silicon Valley, where a chance meeting at Starbucks can turn into a stimulating conversation with a startup genius. My personal journey includes building a business from the ground up over a 13year period and selling it when I no longer enjoyed
For example, I was struggling with a heavy
what I was doing. As an immigrant who came
workload, and when I analyzed where I was
here from Ireland with $500 in my pocket and a
spending the majority of my time, the results were
dream, I never had a problem working hard. As
enlightening. I discovered that a large portion of
a woman however, I was risk averse, and a little
my week was spent putting out fires, and dealing
rigid in how I did things.
with operational tasks. While important, these are not gamechangers in any business, and could be
Overseeing a business can be grueling even for
easily delegated.
the most efficient entrepreneur. However, there are strategies to deploy to increase
3 Strategies to Push Your Business to the Next Level
effectiveness. Here are three.
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Armed with this new knowledge, I
considered previously. Keeping in mind
decided to hire someone to oversee
that all outsourcing companies are not
operations and wrote an extensive job
created equal, get a good referral. Don’t
description for that position. With a little
trail blaze…
effort and a lot of clarity, I found the perfect person who brought her own gifts
Accounting, marketing, social media
to the table. She surprised and delighted
strategy and implementation, and
me very quickly with her competence,
numerous other tasks, can be outsourced
energy, and operational strengths. That
(locally or nationally) or offshored (out of
position filled with a more appropriate
country). In either case, the recipe for
person freed me up to focus on growing
success includes having a clear vision
the business.
and itemized list of what needs to be
2.
accomplished/handed off. Selecting a
Outsource the tasks that are difficult and not your core competency:
reputable company to ensure that you get good quality service is key. One point of contact at each end creates continuity and simplifies the process.
This step can create spectacular results as well as allowing business leaders the time and mind space to explore opportunities to grow and develop the business. As an example, every year tax season rolls around with increasing speed – from
The result for me is peace of mind.
my perspective, my least favorite season.
Outsourcing is available 52 weeks per
I was anxious about the bookkeeping,
year with more qualified staff that you can
accounts and figures that needed to be
easily scale to accommodate your
put together for tax preparation purposes.
business cycle. Further, it creates
Other entrepreneurs were of the same
diversification in terms of staff. If you have
mind I discovered. I elected to address
one staff member primarily responsible
this by outsourcing my accounting and
for the accounting – if that person leaves
bookkeeping needs, something I had not
suddenly you have a problem.
20 3 Strategies to Push Your Business to the Next Level
3. Marketing & Branding are keys to your success: One of my clients has a strong business model but neglected to project and invest in an online presence. Gone are the days when
Appearances still matter. Intentionality is a key piece here, what
websites cost thousands of
we focus on grows bigger. Once we addressed these
dollars. Hire someone and
weaknesses, business increased the following year by 36%.
task them with improving your image, website and
I’ve enjoyed some success, but in hindsight, had I been focused
online presence, keep it
less on the daytoday operations, I could have attained the
simple and elegant. Revise
same results in a much shorter period. When one is too focused
your logo, update your
on running the business and managing the details, growth
professional photo, take
suffers, and opportunities for additional revenue streams can be
electronic payments with
missed. Additionally, as human beings we thrive on
Square, have a professional
companionship, and when we build teams that create synergy,
email signature, update your
results are the inevitable outcome, and we thrive.
LinkedIn profile. Reputation management and
Remember, have fun along the way – life is short and the bottom
addressing poor online
line with business is that it is all about the relationships. They
reviews is important also.
make the world and business turn…
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Push o t s e ategi t Level r t S 3 e Nex to th
Yo
ess n i s u ur B
Geraldine Barry
3 Strategies to Push Your Business
Geraldine Barry emigrated to California from Ireland with only $500 in her pocket. Through her
to the Next Level
determination, planning, organizational skills, and sense of humor, she has created a life where she can do what makes her heart sing every day. Her philosophy of investing strategically in real estate has put two children through private school, gives her the freedom to live a life dedicated to making a positive change in the world, and has assured her secure retirement – and all this as a single parent. Widely regarded as an “Icon in the Silicon Valley real estate investing world,” Geraldine provides investment counseling and personalized financial plans and investing opportunities to real estate investors, high net worth individuals, and real estate newbies alike. Geraldine founded and previously served as president of the SJREI Association, Silicon Valley’s hub for investment inspiration, forging connections, and building a reputation for calling the markets and leading by example with her own portfolio of investments. She was publisher/founder of REI Voice magazine and in that position interviewed every major player on the real estate landscape from economists to industry thought leaders. Geraldine attributes her success to a willingness to learn along with others, a steady supply of green tea, and the habit she learned from her father of being productive and beginning each day in the early hours of the morning. Geraldine lives in Silicon Valley, the entrepreneurial capital of the world and loves it, with her two children Colin and Claire 22
Our processes help clients achieve a rapid, low risk and sustainable improvement in business KEY BENEFITS OF OUR OFFERINGS INCLUDE: ♦ Cost Savings of 40%+ ♦ Strong Finance and Accounting domain expertise ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
and process knowledge Improved Service Levels and Turnaround time Adaptive Insfrastructure and business flexibility – Overlapping Hours Flexible Team size for seasonal needs Ability to leverage technology strengths on multiple platforms Our "Book of Knowledge" 20 years of experience electronically documented Reduction in the time spent by managers in Transactional Activities Improved Quality & Productivity Improved Accuracy Access to Customized MIS reports
CPA, CA, MBA, MS, BS Finance
Delivery
Book of Knowledge
Discipline
Finance & Accounting in the Realty Domain
Domain Expertise
Well defined process ISO 9001 2008 ISO 270001
Methodology
Yardi, PropertyWare, MRI, RealPage, Jenark, QB, APPFolio, Tops, Nexus
Qualified Consultants
Technical Expertise
Ownership Capability
Knowhow Tools & Technology
Our services are delivered from our ISO 90012008 ISO 27001 certified India center
Property Management Operation Services (PMOS) COMMITTED TO THE REAL ESTATE SECTOR Intellisys has years of experience working with single, multifamily and commercial companies; Intellisys fully understands the nuances of servicing real estate company’s needs. That means we focus on understanding and meeting client’s needs, not learning the industry.
Our Services: ♦ ♦ ♦ ♦ ♦ ♦ ♦
Lease Administration (Lease Audit, Renewals, Periodic Reporting, Review MoveIn/Outs, Section 8/HAP) Accounting (AP, AR, GL, Bank Rec, Coupon Accounting, Sec 8 Payments, Rent Roll Reconciliations) Vendor Payables Management /Validation and Certification Bill Pay & Utility Reimbursements (bill payment for every expense associated with properties; expenses that are tenant responsibilities are added to tenant’s ledger and collected the following month.) Analytics and Reporting (Analysis on various factors (EGI, GPR, OER), Custom Reports, Work Flow Management, Financial Accounting and Reporting), Variance Analysis (Budget vs. Actuals, Month to Month), Aged Payables/Receivables Tax Reconcilliation (Tax Compliance, Tax Planning, Year End Reconciliation and Exception Reporting) Fund Accounting Accounting at Investor Level, Fund Level, Asset Level; Waterfall Calculations, Financial Statements Review, Cash Flow Analysis, Distribution – Fund, Performance Return Analysis, Fund Consolidation
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Property Management Software Implementations/Conversions (USA/Indi based Teams) ♦ ♦ ♦ ♦ ♦
Business Process Definition System setup/configuration Data Migration Integration with Sales Force, Dynamics, Data Warehousing (SQL Server, NoSQL, Oracle), Business Intelligence (MicroStrategy, Tableau, PowerBI) First Tier Support – Address internal and/or external user technical support questions, support user general questions, or technical support issues maintenance issues, help clients access different reports, help with lockout issues, etc.
Reports – scores of reports are available in our repository ♦ ♦ ♦
Work on platforms such as Rently, HouseCanary, Rentlytics, US Census, Maponics Develop several Dashboards Develop Custom Analytical Reports and Trend Reports
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IntellisysTechnology, LLC Geraldine Barry Silicon Valley Branch Tel:408.396.7177 www.Intellisystechnology.com
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H AN G I N TH ER E!
By Kathy Kennebrook (The Marketing Magic Lady) 25
I
recently read that the definition of an Entrepreneur is someone who jumps off a cliff and builds the plane on the way down. I would have to totally agree with this sentiment. Jumping off into “Nevernever land” is almost “par for the course.”
When we first started our real estate investing business my husband used to say I would go out and make the mess (find the deal) and he would clean it up (get the inspections done and get the rehab going). But, my Friend, HANG IN THERE! The second deal we ever did in our real estate
I have always been one of those people who has to jump in first and do it and then fix it later. You need to be able to tame the fear monster and jump in and get some deals done. You will want to get some education in order to do the real estate investing business, or work with someone who already has the education until you figure things out. Working with a partner or a mentor is one good way to get started. I have a mentoring program available and I have many students who have done a ton of profitable deals. However, your own education is going to be an ongoing process and you need to do it. If you try to do deals without having any idea what you are doing, you’re going to get burned out quickly. You will not get offers accepted, you won’t know what to do if you do get an offer accepted and you may not make nearly as good a deal as you could with a little education under your belt.
business was a subject to deal. The seller just wanted us to take over the mortgage payments on his house so he could walk away. There was $145,000 of equity in the deal that I didn’t want to lose out on even though I had no idea what I was doing. Heck…I had no idea what taking a property subject to even was at that point. So we just wrote down on yellow legal pad paper what we had agreed to with the seller. I then went back to my local real estate club and found someone to help us do the deal. He charged us $10,000 for his help in creating the paperwork to legally do the subject to deal. Ultimately our paycheck was $51,000. So yes we built the plane on the way down and it was very profitable for us to do so. Getting started as a Real Estate Investor requires you to at least jot down your “TO DO”
HANG IN THERE!
list and begin making a plan as you go!
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HANG IN THERE!
Remember: Your real estate EDUCATION is a process! There are several things you need to do in order to become a Real Estate Investor. Sitting in front of the television watching re runs or playing video games isn’t one of them. You will be able to find lots of reasons to put off getting started in the real estate business. My personal favorites were “my job is keeping my too busy” or “the kids need me” and “What if I mess up?” Once I started making a specific plan and put it in writing, things started to happen. I started keeping a detailed planner outlaying what I have to do the next day, the next week, the next month, etc. This helped to keep me very focused and moving ahead in a specific direction. This will make your business grow faster than you know. You will be able to track tasks, deals, and you can keep your appointment schedule organized as well. Always remain FOCUSED! Even after all the years I have been investing in real estate, I still go to seminars and read books to learn even more ways to do great deals. Continued education is the KEY. In the beginning, I learned enough in a very short time to do a lot of profitable deals and you can too. But I wasn’t afraid to just jump in and get a deal under contract. Once you get active in the business you will run into a lot of different kinds of scenarios concerning sellers and situations. This is one of the reasons I offer a mentoring program to my students. If they get stuck on a deal or an offer, they know where they can get their questions answered. So, they know they are “building their plane” on the way down. Please understand that continued education is a key to YOUR success.
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A “Hang in there” mentality must always be maintained. You will initially make mistakes. We are human. But eventually, YOU will be very successful. So, HANG IN THERE! For all the information you need on adding mentoring to your business so you can “build your plane” check out my website at www.marketingmagiclady.com or call my office directly at 9417925390. I offer an amazing six month mentoring program for my students. Many of my students have done many deals and made huge profits in their real estate business by working with me as their mentor. I look forward to working with you too!
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 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 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
HANG IN THERE!
9417956887 (fax) kpaddler@att.net
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Feel Like Your Branding Sucks? 5 Ways to Cure That Now!
By Sharon Vornholt 31
F e e l L i ke Y o ur Br a nd i ng Su c k s ? 5 W a ys t o C ur e T ha t N ow !
H Have you ever felt invisible in your
change, but you have no idea where to start when it comes
marketplace? If you can honestly
to branding
answer yes to that question, I’m 100% sure it’s because your
When someone has a strong brand it’s because they were in
branding sucks.
charge of building their brand.
Does this sound like you?
What Are the Major Components For Upleveling Your Brand?
• You feel like the best kept secret in town
• Maybe you have a good reputation, but you’re not well
There are a lot of components to a brand, but when you think about upleveling your brand, there are 5 things to focus on first.
known (we’re not counting your friends and family.
Remember that your brand is how people feel about you.
• You’ve been at it a while and the customers you have are happy, but you just don’t have enough of them
• You’re doing okay, but you know
Here are My Top 5
#1.Your Compelling Story
that’s just not good enough
• You’re losing out to competitors
People might not remember much about you, but at the end
because their marketing is better
of the day, they will always remember a great story. Crafting
or they’re well known
your compelling story is critical. You want to put together
• You know something needs to
your story in a way that compels people to want to work with
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you rather than your competitor. Before you even say it….everyone has a story.
#3. A Great “About Me” Video on Your Website
a root canal than have a professional photoshoot, however this is essential. If you check around you can find someone to do this for you pretty reasonably when
Maybe you didn’t live on the
You probably know that you
you consider the huge impact
streets or have a near fatal
need a great about me page
it will have on your brand.
illness, but YOU have a
on your website. This page
story.
should also have your
#2.Your Customer Avatar
compelling story on it. But did you know, that having a
#5.Your Authority Book
professionally produced “about me” video on your
So, you think you don’t have
page can dramatically
enough expertise to write an
What exactly is this?
increase your credibility?
authority book?
Your customer avatar
Now I’m not talking about a
I want to tell you that just
represents the person that is
quick iPhone video. I’m
simply isn’t true. If you have
your ideal customer or your
talking about a quality
been in business for any
dream customer. When you
professional video. (These
length of time, you have a
get clear on exactly who
can be quite pricey at times,
book in you. Writing an
your ideal customer is, you
but in this series you’ll find out
authority book is the ultimate
stop trying to attract
how to get one.)
credibility piece.
#4. Professional Photos
Take a look at your
“everyone”. Everyone is NOT your ideal customer. When you are just marketing to the masses, what
competitors for just a minute. Who in your immediate area
happens is you end up
Don’t we all
has written an authority book?
attracting the wrong
hate this one?
I’m pretty sure that answer
customers. You know – the ones you hate working with.
“almost no one” no matter Most of us would rather have
where you’re located.
Feel Like Your Branding Sucks? 5 Ways to Cure That Now! 33
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
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Liens and Encumbrances Affecting Real Property. By Dan J. Harkey
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W
hat is a Lien? A lien is a legal right, usually referred to as a security interest, in real or personal property given to a creditor to hold and possess as consideration for a loan. The creditor /lender has a charging interest against the collateral and may seek possession in the event of default by the borrower. A borrower willfully grants the security interest in a real property by agreeing to sign instruments called a deed of trust or mortgage which are recorded in public records as an encumbrance to the real property in consideration for the loan. A lien refers to a monetary claim which may be attached to one or more properties.
What is an Encumbrance?
substandard condition, lis pendens, property settlements,
L i e n s a n d E n c u mb r a n c e s Affecting Real Property.
divorce decrees, subordination, An encumbrance refers to a
nondisturbance and attornment
claim and/or agreement to
agreement (commonly
enforce the rights and
abbreviated as an “SNDA
obligations relating to a
agreement”) parking
property. There are literally
easements, reciprocal usage
dozens of items that may be
and parking agreements,
recorded in public records that
signage easements, property
create either a lien or an
tax, federal or state tax liens.
encumbrance on the property.
etc.
The first will be the original tract map. Then comes utility
The lending industry sometimes
easements, other easements,
uses the terms lien and
government mandated
encumbrance interchangeably.
requirements such as historical
However, a lien is a monetary
registries, association bylaws,
charge against the property. All
ownership and partnership
liens are encumbrances, but
agreements leases; various
not all encumbrances are liens.
public notices such as notice of
They both create a claim against
weed abatement, notices of
the property that impacts the
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transferability and restricts the
Each document that is
recording of a divorce decree
free use until the claim is lifted
recorded on the property may
or a quit claim relinquishing
or is conveyed.
also contains an agreement,
one’s interest in the property.
How does an attachment to a property occur?
considerations, prohibitions, and risk that must be dealt
This body of knowledge and
with. A recorded trust deed
law and the process of
may have 2040 pages of
recording and maintaining the
legalese that need to be
documents becomes very
In the United States we have
reviewed. The document
important when establishing
a government system referred
may contain clauses such as
the priority of a lien or
to as the municipal recorder’s
“dueonsale”, “dueonfurther
encumbrance. California law
office. The recorder’s office
encumbrance,” etc. This
regards lien priority as “firstin
has the task of maintaining
subject relating to clauses in
time, firstin right”.
public records, documents;
loan documents should be
and in this case, relating to
addressed in another article,
real estate ownership.
because of its tremendous
Additionally, their task
complexity.
What is a first, second and third lien priority?
maintaining records, making
Sometimes a property owner
Lien priority is related to the
those records available and
may record changes in
point of time that the
identifiable to the public.
amends ownership status.
document is recorded in the
Those public records can
An example would be
public records office. When a
relate to both voluntary and
changing or conveying the
document is recorded it is
involuntary rights and claims.
title of a property from
date stamped and given a
“husband and wife as joint
sequential recording reference
Each of the above creates a
tenants” to a “revocable
number. If a borrower or
cloud on title that must be
family trust”. Another
his/her title company recorded
dealt with, either accepting to
example may be the
3 liens at the same time on
includes recording and
property with the conditions or clouds, removing from title,
Liens and Encumbrances Affecting Real Property.
releasing, modifying, or rejecting the property because the risk of accepting all the conditions is go great or not practical.
(AMC’s) 39
one property, that would create a first, second,
position. A reconveyance is a written form
and third lien, regardless of the dollar amount
instructing the recorder to remove and release
of each lien. The first lien is considered a
the lien from public records.
senior lien, the second and third liens are junior liens. with the second lien being senior
There are written agreements that can be
to the third. After the documents are recorded
created by principal parties that modify the
and scanned into the public records
priority of a lien, or multiple liens. One is called a
computers the borrower will receive the
subordination agreement that can be recorded
original documents back for safe keeping.
that may make a lien junior to another lien even though it was recorded earlier with an earlier
What insures the order of the recording. How do
date stamp.
you know that the recorder did not make a mistake and record the documents out of
California law regards lien priority as “firstin
order? You may order and pay for an insurance
time, firstin right”. California law also provides
policy referred to as title insurance from a title
for exceptions for some types of liens whereby
insurance carrier. The policy guarantee’s your
some liens are given “skipping power” to the
lien priority position or may be required to pay
front of the line. Government mandate permits
insured claim. If you were to go to the
certain liens to be advanced so that they
recorder’s office yourself, stand in line, and have
become senior in priority to other liens.
the documents recorded you could check the
Mechanic’s liens, meant to ensure that
sequence of recording yourself. But, generally
tradesmen and contractors are paid, is an
your recording of documents is done by a title
example of a priority lien with “skipping power”.
company in relation to a sale or loan transaction
That right is protected by the California
in which you are a principal party.
Constitution, and further enumerated in the California Civil Code (Section 3110 et seq.)
Let’s assume that there was a first lien of $100,000, a second lien of $50,000, and a third lien of $25,000. on a property that you own. If you paid off the first lien, the second would become a first lien, and the third would become a second lien. If you were to refinance and consolidate all three liens, then all three liens would be reconveyed and removed off public records. A new recording, with a fresh date stamp and recording number would be placed on public records reflecting a new first lien
40
s e c ran rty. b m ope u c n l Pr E n d R ea a s t in g n e L i f f ec A
who have written agreements
the “skipping power” of
with dates prior to the
mechanic’s liens. These
recording of a new trust deed
relate to technical
will have a right of occupancy
requirements such as when
and enforcement that is
the construction began and
senior to the new lien. The
the process that the claimant
tenant’s rights will run with
must follow to enforce that
the property until the rights
lien. Even in situations where
expire or are modified in
the mechanic’s lien appears
writing.
to have been “wiped out” by a senior lien holder at a
A real estate lender may
foreclosure sale, the lien is
require some modification of
not automatically expunged.
the statutory priority by using
For more specific
a written agreement between
requirements for mechanic’s
the borrower, the tenant, and
liens the lender should work
of course, the lender. There
with counsel knowledgeable
are times where it may be in
about construction law and
the lender’s best interest not
mechanics lien law.
to preserve the tenancy in which case a straight
Other exceptions relating to
subordination may be used.
“skipping power” may include
Any change in the chain of
issues relating to property
title, whether it is a sale, a
taxes, special tax
new loan or a foreclosure,
assessment districts, and in
can cause the priority of
some cases homeowner’s or
tenancy to be lost.
mutual property associations. In some cases, the lender As a rule, a written tenancy
may wish to preserve the
agreement has “firstintime,
tenancy of credit tenants in
firstin right” priority. Tenants
order to preserve the value of
41
Liens and Encumbrances Affecting Real Property.
There are limits, however, on
the property. A subordination, nondisturbance and attornment agreement (“SNDA agreement”) may be the appropriate document to have recorded. SDNAs are agreements between a tenant and a landlord that lays our certain rights of the tenant, the landlord, and other third parties, such as the landlord’s lender or a purchaser of the property. If I can answer questions or I refer you to good service providers, I am only a phone call away. Please visit my web site www.danharkey.com to read more of my articles related business, real estate finance, and humor & prospective.priority.
Liens and Encumbrances Affecting Real Property.
Dan Harkey Dan Harkey is a business and private money financial consultant. I have been active in the real estate and financial services industry since 1972. I have taught courses on private money lending and underwriting of commercial/industrial properties at over 350 educational seminars. This and many other articles I have written are available to read on my website Danharkey.com You may also reach me at my office (949) 5217115 or by email at dan@danharkey.com you can also find me at
Dan J. Harkey Business and Private Money Finance Consultant Mobile: 949.533.8315 Office: 949.512.7115 dan@danharkey.com The article is for educational purposes only and is not intended as a solicitation
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Probate Leads: Massively Discounted Properties in Your Market that You’re Not Getting…But Your Competition Is.
. D . h P , y r t n e G e n , i n t s o i i t r a nov By K f In L e a d s o P V te a b o r U S P
45
"M
y market is crowded with
Increasing Numbers of Properties Available at a Huge Discount
rise and fall of the 2007 bubble. They are often strapped with debt. When they inherit property from their
investors Baby boomers believed in
parents, they suddenly find
everyone is chasing the
collecting assets like real
themselves responsible for
same deals.” That is usually
estate. Many are cash poor
paying all of the estate
what we hear when we first
but asset rich. They often
expenses with little cash to do
speak to a potential
own property outright with no
so. Also, inherited property is
customer. They are often
mortgage or at least have a
often split between multiple
looking for a source of leads
lot of equity in their property.
family members, so offering
where there isn’t “so much
Often their homes are in
$20,000 less on a property
competition," and they are
great condition with only
may only be a $510,000 loss
thrilled when they begin to
basic updates needed. We
per person. Since the heirs
realize we have a solution
are entering a phase where
didn’t put money into the
for them – marketing to
baby boomers are passing
property, unlike a foreclosure
probate properties.
their assets on to their heirs.
or divorce, they are more
and
interested in selling the
Probate Leads: Massively Discounted Properties in Your Market that You’re Not Getting… But Your Competition Is.
Generation Xers and
property quickly than they are
Millennials, who are
in trying to get as much money
inheriting the assets of their
out of the property as possible.
parents, lived through the
They want cash – quick.
46
g forgotten or remain in state of familial limbo but still possess value.
Probates may also include business interests. More and more, heirs don’t want to be bothered with assuming control of the family business. And yet there is opportunity there as well. Studies have shown that over the next 30 40 years, more than $30 trillion is projected to transfer from baby boomers to their heirs. This means that there will be a lot of properties passing through probate. Moreover, when property is inherited, most often the heirs will sell or transfer the title of the property within 18 months. Probate leads are a great and growing source for smart real estate investors.
Many Types of Properties Available in Probate Real estate tops the list of probate assets that can frustrate heirs and impede the probate process. Anything from residential homes, to rental units, vacant land, office buildings, and even commercial property may be among the inherited property the Executor is left to negotiate. Personal assets also generally fall into the probate property category. These include items such as valuable cars, heirloom pieces, pianos, jewelry, antiques, and other
A knowledgeable probate investor can work with the Executor, ease the burden of their job, and creatively get the family the cash needed to clean things up while creating their own income opportunity.
How to Get Probate Leads The good news about probate is that it is public record and available at all county courthouses across the country. The bad news is that each county handles probate leads in a different manner. In some cases, it is a painstaking process of daily visits to the courthouse to manually collect probate data. In other cases, an individual can sort through public, county records that are available online. Either way, researching and collecting probate leads on your own is very time consuming and ineffective, which is why this source of leads is often overlooked. However, one company, US Probate Leads, developed around the need to make probate leads simple and easy to use. US Probate Leads has been walking people through this process now for over a decade.
such pieces that may have been lon
Probate Leads: Massively Discounted Properties in Your Market that You’re Not Getting… But Your Competition Is.
47
A Probate Investing Program US Probate Leads has literally taken the lead on providing timely and local probate filings to investors looking for a growing source of access to motivated sellers. We have a large team of researchers dedicated to doing the legwork of gathering and organizing probate leads so that you only have to buy and work those leads. Investors can purchase leads at whatever level (25/50/100/250) they deem appropriate. Or, you can invest in a plan which provides you all of the leads available within a given county. A very affordable pricing structure and a guaranteed “in” as far as knowing what is available in probate filings, make this a wonderful opportunity for savvy investors. US Probate Leads’ flexibility is perhaps what makes their program most attractive. Getting in at whatever price point you’re comfortable with, and however many leads you can manage is certainly feasible.
Probate Leads Available Now – In Your Area US Probate Leads has access to virtually any county in the United States, meaning regardless of where you live, you can start receiving leads monthly. Go to the US Probate leads site: www.usprobateleads.com click on your state and get started. To get a 10% discount, place an order before September 30th. Go to realty411.usprobateleads.com. Use discount code “Realty411.” Or you can contact them directly at: (877) 4709751. Now is the time to make your mark in this littleknown niche – never before have more properties become available than will in the coming years. Becoming a US Probate Leads subscriber could really be the start of a whole new future, a more lucrative career, and an exciting investment opportunity.
Probate Leads: Massively Discounted Properties in Your Market that You’re Not Getting… But Your Competition Is.
10% OFF Place an order before September 30, 2018 to get 10% off your first order! Go to realty411.usprobateleads.com. Use discount code “Realty411”. 48
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50
Should New Real Estate Investors Attend Local REIA Meetings?
By Lex Levinrad
51
F
ind the local Real Estate Investment Club in your area and go to the meetings. Attend each meeting religiously. Get involved, become a member and make new friends with other investors who want to learn about real estate as much as you do. Network with rehabbers, wholesalers, investors, mortgage brokers, title companies and realtors at these meetings. If you have very little money to get started investing then know that there are partners, private lenders and hard money lenders at these meetings that will
help you. Don’t bring a friend who is not interested in real estate. They will want to leave or they will bring their own opinions which will influence yours. Do bring a friend who is as passionate as you are about learning about investing in real estate. If you are a realtor keep in mind that there are many new concepts that you will learn about that you may have not been aware of previously. Be open to that and also be open to new ideas.
Network effectively. Make sure
stock and pay someone to
you have a business card with a
design your business card (you
photo. Your card should describe
can do this on www.upwork.com).
exactly what you do and who
Do not act like a know it all at
you are. Your website on your
meetings or make like you know
card should match what you do
more than you do. You are there
and who you are. If it doesn’t you
to learn, and you learn best by
will not be taken seriously. If you
listening to others. Find out the
are a wholesaler then have a
smart people who are having
card that says that. Make sure
meaningful conversations and
that you get a good quality
introduce yourself and listen. If
business card and don’t go for
you don’t understand something
the cheapest option. Get a
ask. Most investors are more
professional logo and picture
than willing to help new
taken and use a thicker card
investors.
Should New Rea l Est Investors Attend ate Local REIA Meeti ngs?
52
Do not rush to shove your
going (especially if is
these meetings and they will
business card into
raining or the weather is
often end their presentation
everyone’s face at every
bad).
with a sales pitch. Look past
opportunity. Instead make
that. Learn from the one
the conversation about the
Other meetings will be
other person (amazing
amazing and you will learn
concept). Ask them
new things and make new
Remember you don’t have to
questions about what they
connections with other
sign up for every item that is
do and be interested. Have
investors.
hour presentation.
presented to you
one or two meaningful
(beginners pay
conversations at
attention). Avoid
every meeting
the shiny new
with someone
object syndrome
new. After a few
where every
meetings you will
week or month
begin to recognize
you are on to a
the familiar faces.
new strategy
You will also notice
or technique
the newbies that
that you
show up at every
heard about.
meeting. Those are
There are
your potential bird
no
dogs. Don’t skip
shortcuts.
meetings. That is what newbies do. They show
Learn and focus on one Remember, you
thing. Become good at that.
up once or twice and then
need to know people and
Then move on to the next
they don’t come back. If you
they need to know you. The
thing. Be wary of charlatans.
want to wholesale or fix and
way you do that is by
Every REIA has them. If you
flip houses you will need to
showing up every month at
are the beginner in the room
put in a lot of effort. Start by
the meeting regardless of
then as Warren Buffett says,
attending meetings
how small it is or how many
“if you don’t know who the
religiously and look at it as a
people attend. Attend more
sucker is then it’s you”. So
work obligation like an
than one REIA meeting if
be cautious of the scam
important appointment you
you can and there are
artists out there (especially
can’t miss. Some meetings
multiple meetings in an
the guys promising you low
will not be great and you will
area. Yes, there will be
interest hard money loans
question why you bothered
speakers presenting at
with upfront fees).
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Should New Real Estate Investors Attend Local REIA Meetings?
As a beginner your job is to listen and to learn and network and to educate yourself. Only work with people that have referrals and that other members say good things about. The good people will be easy to spot. They will always show up, will have lots of people who have done business with them, and will have many people who say good things about them. Use your bullshit detector radar. Scam artists are quite easy to spot. Go with your gut feeling about a person. 9 out of 10 times you will be spot on.
Sh
e al E R w e N ou l d
s t at e
s At t e I n v e s t or
n d Lo
e e t in M A I E R c al
gs ?
Lex Levinrad Lex Levinrad is a South Florida real estate investor that has been wholesaling, buying, fixing and flipping homes for the past 10 years. He has written 7 books about investing in real estate, and is a nationally renowned real estate speaker and coach.
Lex’s Website: http://www.lexlevinrad.com.
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56
Sand in Your Gears
By Jeffery S. Watson,
National REIA Director 57
Sand in Your Gears
W
hile walking near a sandy beach, I passed a stand where bicycles were rented on a selfserve basis using a credit or debit card. There was always a breeze blowing in from the ocean. It didn’t take long to realize that even though these were singlespeed bicycles, it was highly likely that sand was getting into the gears. You don’t need a degree in engineering to realize that this is a cause of friction, and friction can cause things to break down.
This made me think about some
Contractor and handyman
of the “frictioncausing sand” I
drama is another form of
allow to blow into my investing
unnecessary friction that I don’t
deals. One of the things that
want to have blowing into my
comes to mind is unnecessary
life. Working with these
tenant drama. Tenants are
tradesmen is important, and
important customers in my
sometimes they need a friendly,
business; however, I don’t need
sympathetic ear; but I also have
the friction that results from
to make sure they understand
unnecessary tenant drama
that our relationship is a
spilling into my life. I have to set
professional one, and I am
filters and barriers to make sure
ultimately concerned about
the phone calls and text
getting the job done the right
messages don’t overwhelm me.
way, on time and on budget.
58
I could list other illustrations of “sand” blowing into my investment gears, but the bottom line is that the biggest cause of unnecessary friction in my investing business is ME. There are things that I arbitrarily, accidentally or without wise discretion allow to come into and affect my business. Maybe you, like me, need to engage in a little preventive maintenance. Get the “bikes away from the sandy shore and clean them up” before you put them back out into service. As always, I value your feedback. If you found this article helpful, please share it with a friend. Until next time,
Jeffery S.Watson
Sand in Your Gears 59
Jeffery S. Watson Attorney As a frequent and popular guest speaker Jeff Watson has become a recognized thought leader and innovator in the field of real estate investing, asset protection, wealth building and self directed retirement account transactions. Jeff has been a fulltime attorney with an active trial/hearing practice for more than 22 years. During his career he has tried over 20 civil jury trials and thousands of contested hearings. As a contingent fee attorney Jeff has a unique perspective in the field of asset protection, investing and entity structuring. Jeff has been a real estate investor since 1993. In 2011 Noteworthy Publications honored Jeff with the Jon Richards educator of the year award. From 2010 to present Jeff has led the Distressed Property Coalition; a Washington DC lobbying effort in bringing
about several changes in government regulation of distressed property purchases and resales. The new Standard National Short Sale Policy instituted by FHFA, effective Nov. 1st 2012 is due in part to the DPC and Jeff’s efforts. This means that Jeff and the DPC just changed the rules; for the better, on how investors and others buy and sell real estate. He is cofounder of the internationally known real estate investing software powerhouse Realeflow LLC featured in 2011 INC 500 with an astonishing growth rate of 823% in one (1) year. Among his other clients are two (2) real estate investment related 2012 INC 500 companies. He is the Author or CoAuthor of 5 popular books on real estate investing. Jeff, his wife Lorri and their five children
Sand in Your Gears
reside in Conneaut.
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61
62
Real Estate Investing With No Money Or Credit By Laura Alamery 63
So, you want to be your own
direction that is chosen,
price and make a sizeable
boss and do not want to put
building solid connections
profit.
a lot of startup capital into
with others in your
your venture. You have
community will grow your
Wholesaling requires
been researching which
business faster than any
dedication and the people
business options might be
other sales or marketing
skills to build a comprehensive
best for you and keep
campaigns that exist.
database of both sellers and
reading about real estate wholesaling and other strategies that allow you to
What is Wholesaling?
buyers. And is a common niche for new (and veteran) real estate investors. The wholesaler finds the contract
make a profit in real estate investing without putting any
Let’s start with the most
and either assigns the
money down or having
important players involved
contract to a buyer at a
credit checks performed.
in a real estate transaction.
higher price or has a double
The seller, the buyer, and
closing, meaning the
It is not too good to be true!
the person who facilitates
wholesaler technically buys
There are a number of
the sale. Most commonly,
the property but then
different directions that real
the facilitator is a real estate
immediately resells it the
estate can take, and the no
agent. They list the property
same day.
money, no credit path has
for the seller, or scout
many options.
available properties for the buyer, and they most
● Wholesaling
definitely need to be
● Cowholesaling
licensed by the state the
● Subject To Sales
transaction is taking place.
● Seller Financing ● Transactional
Real estate wholesalers act similarly, to an extent. Like
Excelling in each of these
agents, wholesalers are
areas requires the proper
always on the lookout for
knowledge, as well as the
sellers. Unlike agents, most
people skills necessary to
wholesalers are looking for
grow your real estate
properties that are selling at
investing business. Regard
a very serious discount, in
less of the real estate
order to resell it at a higher
64
Real Estate Investing With No Money Or Credit
CoWholesaling
as this are often large
Real Estate Investing With No Money Or Credit
commercial buildings that Connecting with other
significantly impact the
wholesalers can expand
community.
both your customer list and your bank account. If you
before the transaction is a
Subject To Sales
good idea to know where you stand going in.
have a buyer looking for a specific property, a fellow
Subject to real estate
wholesaler may have the
transactions are the best
Rarely does happen, as the
perfect place. Generally, the
option for those with no or
lenders are simply happy
wholesale fee is split
bad credit. This agreement
that the loan is getting paid.
between the two and both
is between the seller and
This is a great example of
can profit from the sale.
the wholesaler or investor.
why wholesalers are always
No down payments are
looking for distressed
Another advantage to co
made or credit checks
properties. Homeowners
wholesaling is that it opens
performed, as the buyer
have many reasons for
your customer base to
ends up simply assuming
needing to relinquish
include more opportunities.
the mortgage.
responsibility of their property. Wholesalers make
Often times, wholesaling is where investors meet and
There are a few things to be
the transition easy, as they
connect to collaboratively
aware of before entering
already come with a list of
purchase a property through
into these types of deals. In
buyers, the seller does not
a real estate investment
the mortgage contract, the
have to go through the
trust (REIT). Working
lender has the right to call
hassle of listing and
together can work wonders!
the note due at any time, in
showing, and the sale
Investment properties such
full. Speaking with the bank
usually happens quickly.
65
Real Estate Investing With No Money Or Credit
Seller Financing Another great option that does not require money down or credit checks is when the seller will provide the financing. How this works is usually that the seller keeps the property in their name and the buyer simply pays the seller instead of the bank. There is also usually an option for the buyer to make the purchase once they are in the position to make the down payment or get a mortgage of their own. Sellers like these kinds of sales because they have a steady stream of monthly income from the payments.
Transactional Funding Here is where those relationships that you have been building are going to come into play. Bank loan officers are a necessity to wholesalers and their relationship should be as important as the buyers and sellers. A great example of when transactional funding will come in handy are bank owned and short sale properties. These properties often sell at bargain prices and a substantial profit can be made. Unfortunately, these sellers do not allow assignment of the contract or double closings, and do require cash at the end of the deal.
66
Finding Your Place in the Real Estate Investing World Real estate can be overwhelming and finding the niche that works best for you is important to maintaining a successful and lucrative business. Once the journey begins, so many doors will open with possibilities of avenues to pursue.
for new real estate investors. Once a few sales have taken place very big part of real estate investing is relying on your intuition and listening to where you feel most comfortable will only help build your business, portfolio, and bottom line. Enlisting the help of experienced investors, and finding a mentor who wants to help, can catapult your business into the next level. There are so many things to learn when it comes to real estate, and while much of it is simply learning by experience, there are options to make it easier. The knowledge of those veteran investors and agents is invaluable and learning from their mistakes can save you many. Start building your real estate investment portfolio with little to money down, with no credit checks, by following these noted strategies. And watch your business take off!
Real Estate Investing
it will be easier to determine which speciality is right for you. A
With No Money Or Credit
The options outlined here are some of the most common areas
Laura Alamery Laura Alamery is a local real estate investor of 30 years & consultant with extensive experience in several aspects of the real estate business she has pioneered several strategies from personal experience that she now teaches nationwide, even to other mentors!
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68
69
Segregating Assets and Liabilities By Jay Butler 70
Islands and Belize) and
(which is advantageous,
'Protected Cell Companies'
albeit more expensive). All
(Republic of Seychelles) for
other jurisdictions leave the
insurance companies and
responsibility of maintaining
other industries servicing
proper books and records
large quantities of related
with the company
clientele.
ownership.
The method of shielding
Nevada added Series LLC
large institutions from mass
legislation in 2005 and, along
claims arising from
with a growing number of
catastrophic events was
states, allows a Series LLC
then brought to average
to enter into contracts, hold
Is a ‘Series’ Limited Liability
individuals engaged in
title to assets, grant security
Company akin to putting all
common business activities
interests and to sue or be
your eggs in one basket or
with varying degrees of risk
sued just like other types of
can a Series LLC truly
such as real estate
entities. Although no court
provide asset protection
investing, construction and
cases have reached any
through the segregation of
fund raising. However, many
State Supreme Court to
subsidiary assets and
questions have since arisen
establish a precedence for
liabilities?
on ‘how to use’ a Series LLC
the efficacy of a Series LLC,
with regards to banking,
there is more than a decade
documentation and taxation.
of use to their credit.
I Originally designed to assist
Nevada is currently working
investment companies in the mutual fund industry avoid a
A Series LLC consists of a
to pass legislation preventing
multitude of SEC filings,
‘master’ company and a
any (future) outofstate
Delaware introduced special
series of ‘subsidiary’
court rulings to be used into
interest legislation in 1996 to
companies, which may
a Nevada court of law.
enable one company to act
conduct unrelated business
as an ‘umbrella’ for the
activities with differing
activities of all their
ownership interests. Of the
individual client funds. Such
thirteen states which
a strategy has also been
currently have legislation
successfully implemented
enacted for a Series LLC,
internationally with
only Illinois requires their
‘Segregated Portfolio
subsidiaries to be registered
Companies’ (British Virgin
with the Secretary of State
71
Segregating Assets and Liabilities
While many states have not
tax election. In 2008, the
the subsidiary is considered
yet enacted any Series LLC
IRS issued Private Letter
an entity under local law.
legislation in their state
Ruling 200803004 which
laws, or do not yet
ruled that the Federal tax
In structuring Nevada
recognize the use of a
classification for a Series
"Series" LLC's for our clients,
Series LLC within their
LLC (whether a disregarded
we have found it beneficial to
state, it is possible to avoid
entity, partnership or taxable
have the 'Master' LLC filing
‘foreign filing’ (ie. registering
association) shall be
as a partnership (for tax
your entity in another state)
determined for each
purposes) utilizing a flow
by combining a Series LLC
subsidiary independently.
through 1065 tax return and
with other structures like
And, proposed Treasury
a Nevada "C" Corporation to
Land Trusts, or onthe
Regulation §301.7701
act as the manager of the
ground ‘data processing
1(a)(1) states subsidiaries
said 'Series' LLC, with or
centers’, or thirdparty
shall likely be treated (for tax
without any ownership
management companies
purposes) as a separate
interest. However you
contracted to perform
entity regardless of whether
choose to structure your
certain statespecific
'Series' LLC, it is important to
activities. Meaning,
note multiple options exist to
"Nevada stays in Nevada"
take advantage of many
and your 'Series' LLC
retirement and taxrelated
should not be foreignfiled
benefits.
in another jurisdiction. The tax treatment of a Series LLC is also becoming clearer as their use continues to spread. A
Segregating Assets and Liabilities
A 'Series' LLC is a specialized type of Limited Liability Company, which requires attention to detail. If you are not organized, then
Series LLC can be formed
you should be sure to seek
with a singlemember (not
the assistance of
recommended) or with
bookkeeper and tax advisor
multiple members and, if
capable of keeping your
not acting as a disregarded
books and records in order.
entity for tax purposes, may
There are two primary
choose to file either a 1065
benefits to a Series LLC and
(partnership), 1120 ("C"
one responsibility which
Corp) or 1120S ("S" Corp)
remains unchanged:
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Segregating Assets and Liabilities The first of two benefits is the ability to form and
for each subsidiary, including operating
renew only one company, as opposed to
agreements, minutes, meetings and resolutions.
multiple entities. This saves a tremendous
While some do not wish to hear this news, try and
amount of money in both formation costs and
think of it this way, "If you had 20 separate Limited
annual renewal filing fees.
Liability Companies, would you not have to maintain separate books and records for each
The second benefit is that a Series LLC only
company?" The answer is 'yes' you would.
requires one tax return to be filed by the master LLC. It is far less expensive to file one tax
If it looks like a duck, walks like a duck and
return, inclusive of financial statements for each
quacks like a duck, it’s not a goat. If the
subsidiary, than it is to file a multitude of (stand
Subsidiary companies of your Series LLC are to
alone) tax returns for the each and every
be respected as such, then your business
subsidiary LLC.
formalities must be in order. Take these action steps into consideration when investigating the
The ‘responsibility which remains unchanged’ is
use of a Series LLC:
that you must keep separate books and records
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– Each subsidiary is a separate and distinct company from the master and keeps their own respective books and records.
– Separate EIN (Employer Identification Numbers) are obtained and maintained to segregate bank accounts of each subsidiary.
– All agreements, contracts, deeds and notes, etc are signed in the name of the respective subsidiary LLC.
– Each subsidiary name should include the name of the master in its title, –
thus providing notice or disclosure to the subsidiary’s existence. i.e. “XYZ Subsidiary, a Series of (Name of Master) LLC” Each subsidiary is to be properly capitalized with no one subsidiary comingling funds or ownership interest in another.
We have a very simple philosophy in our company which states, "Documentation Beats Conversation". If each subsidiary is to be treated and respected as a separate company with its own legal personality, then it must behave accordingly. The more you are able to document the distinct business activities of each subsidiary, onefromtheother, the greater your opportunity will be for a court of law to uphold segregating the assets and liabilities of each subsidiary company within your 'Series' LLC. For more information on how to properly form and use a Series LLC, please contact our offices for your free private asset protection consultation.
Sincerely,
Jay Butler
Managing Director
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Segregating Assets and Liabilities
Jay Butler Jay Butler is the Managing Director of Asset Protection Services of America, the former Managing Director of Asset Protection Services International, Ltd and the former VicePresident of Sales and Marketing for Corporate Support Services of Nevada Inc. Mr. Butler holds a Bachelor's Degree of Fine Arts (BFA) from Boston University. Jay has provided customized business entity structuring for clients in all 50 states along with some of the most respected names in the industry including the Jay Mitton organization "the father of asset protection" and Real Estate Investor Association seminars. While working with Wealth Protection Concepts, LLC under the tutelage of the former Las Vegas and North Las Vegas city attorney Carl E. Lovell Jr. (now deceased from Leukemia), Mr. Butler was bestowed the title of "Asset Protection Planner" for his competency and experience. He also co authored the first edition of his book "Cover Your Assets: Legal Authorities on Asset Protection, Tax Strategies and Estate Planning" © 2006 with Dr. Lovell. While residing in Switzerland, Mr. Butler was the Associate Director of “COHandelszentrum GmbH” providing Swiss company formation and administration services and executed a fullrange of fiduciary responsibilities including sales, client support and international corporate compliance services (KYC, FATCA, AML, FATF and Swiss Code of Obligations). Jay builds his relationships through consistent attention to detail and reliable support. He has traveled extensively throughout the United States (having visited 49 of the 50 states), explored 36 nations worldwide, and has lived in a total of 7 countries throughout North America, Central America, the Middle East, North Africa and Europe.
Asset Protection Services of America 701 South Carson Street Suite #200 Carson City , NV 897015239 Office (775) 4615255 Mobile (239) 3098214 Skype Jay_Butler Email info@AssetProtectionServices.com Website www.AssetProtectionServices.com 75
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Benefits of Diversified Portfolio Benefits in International Real Estate
By Matt Malouf 79
W
hen it comes to
capital flows. We understand the importance of global investment
investing in real
strategy and it’s time that you too understand what this option can
estate, people
offer to you.
tend to be vigilant
about their investments
Most people hesitate to invest in international real estate because
options. What they seem to
of geography. Real estate is generally a longhold investment
ignore is how the profit and
strategy and it’s the long distance that generally makes people
growth ratio investing in real
uncomfortable while investing in international real estate. But
estate abroad can provide
there are certain benefits for global diversification on a real estate
them with great success.
portfolio. Let’s look at a few.
The world is a global village
Investment Diversity
now and so it makes sense that people have started
Being a secure and hard asset, real estate has always been a
investing in international real
preferred investment choice for people all over the world. With
estate. There’s a certain
many fastgrowing international real estate markets, this
charm to this move but more
investment opportunity is too good to miss. Investors can enjoy
than charm, this smart move
low interest rates and avail a variety of lending options. And with a
can help strengthen your
professional team to back you up, these investment opportunities can be the perfect addition to your diversified portfolio. With this new financial step, you can have another stream of income. That’s the best part about this investment. It can generate income and even appreciate in value over time. The exchange rate can help you make a hefty promise every time. If you are investing in
Benefits of Diversified Portfolio Benefits in International Real Estate
countries with a higher currency rate than the USA, your investment portfolio is surely going to enjoy the benefits. The change in interest rate also has a significant impact on making international real estate investments a lucrative financial move.
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Since each property has
By investing in international real estate, you can easily diversify
an intrinsic value, your
your portfolio and give it a global edge. Since the international
investment would never
housing market tends to operate differently, a decline in one
go to waste. This is just
market can cause a significant increase in the other one. With this
one of the properties that
contrasting nature of the international real estate market, you are
set international real
bound to gain great benefits.
estate apart from other investment options such
Ancestral Roots
as stocks.
Risk Management
When you are looking for some international real estate investment opportunities, why not try and connect to your roots? For many of our clients, the first option for investment is mostly
So what makes investing
their ancestral country. Their way of paying tribute to their heritage
in international real estate
is by investing in their ancestral country. This way, they can always
such a glorious option?
have a place to go back to when they want to experience the life
The best part of this move
that their ancestors lived.
is the diversification of risk. When you put all your
For many people, this is a lucrative option because it gives their
eggs in one basket,
children a chance to know their heritage. People whose ancestors
there’s a higher risk of
immigrated to the USA often go for international real estate
losing it all at once. By
investments in their home country. This is a great reason for
spreading your investment
choosing the right international real estate. As long as the real
over several international
estate market in your home country isn’t in a steady decline and is
real estate properties, you
showing great potential, including it in your investment portfolio
can significantly reduce
would be a good call.
the risk. The real estate market is dynamic and always in transition. Even the slightest economic change can have a drastic effect on your investment choices. These effects can either be extremely beneficial for you or leave you at the brink of bankruptcy.
Benefits of Diversified Portfolio Benefits in International Real Estate 81
Recreational Value Investing in international real estate doesn’t just create new income streams but also provides you with the perfect vacation home. So when you are looking for opportunities to diversify your portfolio, make sure you go for an option that can serve well as a vacation spot. Even though the main reason behind this investment is purely financial, buying the right property can also add a recreational value to your investment. If you love the great scenery of icecapped mountains of a vacation spot, you can turn this passion into a great investment opportunity. There are some countries that allow foreigners to own property and you must be prepared to take full advantage of this prospect. Contact MyLifeWorldWide.com and let our professionals help you get a diversified portfolio for international real estate.
Cultural Diversity This is a great opportunity to experience other cultures. Become a local at the place and you’d be able to explore the region to your heart’s content. Your overseas property can provide you with new experiences, enabling you to explore some other parts of the world. If you have the desire to experience cultural diversity, your international real estate portfolio can help you with that.
Residency Eligibility Owning a property in a country can often make you eligible for residency and/or assist you in a naturalization application. With this change of status, many doors in the country also open up for you. You can get access to the country’s banking and financial services industry. You can use this opportunity to divide up your fortune and taking advantage of the profitable banking prospects.
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Investment Security Unfortunately, retirement funds in the USA are subject to some strict laws and many people have already bore the cost of these policies. Your retirement fund can come under the threat of lawsuits and creditors, hence leaving you vulnerable at the later stage of life. For availing the ultimate retirement fun with security, it’s imperative that you invest abroad. Your diversified portfolio of international real estate can’t be subjected to the laws of USA and even the IRA can’t attack them in any way. Your properties in the USA might be at risk of lawsuits but your international real estate is insulated from this risk. This is one of the best reasons for you to consider investing in international real estate. Your international real estate investment would never go to waste if you work with a professional. With their expertise in the industry and years of experience, MyLifeWorldWide.com can help you make some sound financial moves. With a diversified international real estate portfolio, you can yield great profits, without the usual risk that other investment options pose. So make the best of this opportunity and make some sound investments overseas. Contact us at MyLifeWorldWide.com for more information and custom solutions tailored to your unique situation. Matt Malouf, International Real Estate Consultant MyLifeWorldWide.com Clarity.fm/mattmalouf
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84
The Housing Choice Voucher Program
By Reggie Brooks 85
moderately priced home in the local market,
Program, aka “Section 8” is a
recipients can choose to rent a home above or
Housing and Urban
below that cost. They must make up the
Development Program that
difference between the subsidy and the home's
helps to insure that low income
rent. The subsidy does not cover the entire
families, the disables and the elderly have
rent; recipients must pay 30 percent of their
access to safe and sanitary housing. These
income toward their own rent.
private market rentals would ordinarily be out of their financial reach but with assistance, these families can have access to housing where
What Does Section 8 Mean to You as a Landlord?
they can live with dignity. As a landlord, you may question whether or not
Here’s How It Works…
you should accept a tenant with a Section 8 voucher. The program requires that the landlord must provide safe and sanitary
applicant must apply to the program at a local
housing for the tenant and adhere to the terms
public housing agency (PHA) that is an
of the lease that both parties agree on. As a
extension of the federal Housing and Urban
landlord, these should be criteria you are
Development (HUD) agency. The PHA will
already meeting. Additionally, Section 8
determine eligibility based on the applicant's
requires that rentals pass a housing inspection
annual gross income and family size. Once the
to be eligible for the program. The landlord is
PHA has verified the applicant's information
expected to maintain the property throughout
with other families and approved the applicant
the duration of participation in the program.
for a voucher, the applicant becomes eligible
.
for a voucher. In most cases, the need for assistance is greater than the resources provided to HUD and the family is placed on a waiting list until funds become available. The voucher operates as a rent subsidy. Individuals and families who are approved for a Section 8 voucher may select a rental from the private market including an apartment, a townhome, or a singlefamily home. While the PHA uses the amount necessary to rent a
SECTION
In order to qualify for a Section 8 voucher, an
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The Housing Choice Voucher Program
T
he Housing Choice Voucher
The Housing Choice Voucher Program Participation in Section 8 has numerous benefits to a landlord:
providing free marketing to your target audience.
• Guaranteed income. Getting rent paid on time is one of the biggest hassles that a landlord faces, but in the Section 8
• Prescreened tenants with verified
program, the rent subsidy is paid directly
income. The PHA verifies your tenant's income and employment to ensure they can
to you. Additionally, most voucher
pay their portion of the rent. Some PHAs will
recipients will pay their portion on time as
turn away applicants with criminal histories.
nonpayment can risk their continuation in
Combined with your own tenant screening
the program.
process, you should be able to find excellent tenants for your rental.
• High demand for properties. Due to a
While there are some drawbacks for landlords, such as continuing with routine
shortage of properties and an overwhelming
inspections to ensure the property is being
number of applicants, demand for Section 8
maintained and some restrictions on how
housing is high. Your property will also be
much rent can be charged, the benefits for a
listed on the Section 8 website for your area,
landlord are significant.
Reggie Brooks Reggie Brooks, is an international speaker, author and educator, dedicated to inspiring others to achieve personal success through real estate investment. He is also the #1 Vacant, Abandoned & Distressed Property Specialist in North America. Having risen above a life of poverty, he has achieved what 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. 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.
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