REI Voice Magazine June 2011

www.reivoice.com

June 2011

SHOPPING FOR A DEAL LEVERAGING DISTRESSED ASSETS • TURNING FORECLOSURES INTO OPPORTUNITIES • 5 TIPS FOR FINDING DEALS June 2011 REI VOICE

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SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR

TABLE OF CONTENTS Analysis

6 In Intimate Detail: Phoenix, AZ REI Voice publisher Geraldine Barry interviews Alan Langston about the Phoenix market. As director of Arizona Real Estate Investors Association, AZREIA, and president of the Phoenix Real Estate Club, Langston is an expert on the territory.

Advice

12

Bumpy Ride for Distressed Property Buyers Experienced investor Tom Wilson has purchased and turned over 200 properties into money makers. He discusses whether distressed properties a smart investment for novices.

B asics

8 Bank REO Inventory Rises to Record Highs

Yes, you can purchase multiple properties for as little as $25,000. REO Queen, Lori Greymont, presents five principles for converting empty properties into cash-producers.

Natalie Knowlton, short sale expert and thirdparty negotiator with over 200 approval letters negotiated, explains how short sales benefit both investors and underwater owners.

Property Management: A Time-Saving Investment

The banks’ extend-and-pretend practices create havoc with auction investors at the courthouse steps. It’s impossible to tell which properties are going to sale and which will be postponed to a later date. Michelle Lenahan, Director of Customer Service & Training for ForeclosureRadar.com provides perspective on the banks’ frustrating tactics.

Leveraging Distressed Assets to Your Advantage

Short Take on Short Sales

16

Playing Foreclosure Roulette

22

24

Robert Campbell, market timing expert, projects a whopping 45 to 50% peak-to-trough total decline in real estate values before the correction is over— and he has the numbers to back up his projection.

10

Trends

Are you penny-wise and time foolish?

Investor and portfolio manager Chris Clothier makes the case for property management as a key component of any real estate investment strategy.

Features

26 Facebook for Smarties Social media expert and Vice President of The Norris Group, Aaron Norris, over-delivers on his promised tips for Facebook engagement.

His great advice will bring you new clients.

30 Ger’s Top 5

20 Ignore City Hall at Your Peril

I nvestor Resources

Real estate attorney, Jeffrey Hare, explains how code violations can stop a project cold, or worse. His advice? Don’t ignore the obvious.

The best of the best.

Phone/email/web contacts.

29

June 2011 REI VOICE

REI Voice™ Magazine A publication of SJREI Association™

P U B L I S H E R ’ S NOTE

Publisher Geraldine Barry | 408-264-3198 Geraldine@SJREI.org

WELCOME Welcome to another issue of REI Voice. In this issue, we focus on distressed properties. They provide both a challenge and an opportunity to those involved in real estate. While we often speak of the real estate market, please remember that all real estate is local. There isn’t one real estate market, but many—it is like the weather with multiple micro-climates. The real estate micro-markets act somewhat independently, with some going up while others continue to decline in value.

Geraldine Barry Publisher President of SJREI Association

In 2008, Nicholas Carr advanced the term, “the Google effect” to explain how the internet is changing our reading and thinking habits. In Silicon Valley, we are experiencing a different Google effect, the rebounding of high-tech companies such as Microsoft, eBay, Apple, and Facebook–all companies that are expanding and thriving in our local market. These businesses are driving employment and occupancy rates higher, which in turn is driving rents upwards. According to Michael Pierce, President of Prodesse Properties, “Studios in Mountain View have gone up $300 per month in the last year.” These are properties Michael manages.

As a smart property manager and investor, it’s not surprising that Michael is realizing an increase in rent; however, his micro-market is Mountain View—well within the Googleeffect sun shadow. Travel just five miles to the micro-market of East Palo Alto and you’ll find the Google-effect absent and a real estate market that has yet to bottom out.

As you consider your real estate investment options, remember the saying “Think Globally, Act Locally,” then forget the global part. In real estate investing “Research Locally, Act Locally” in whatever micro-market grabs your interest.

Editor-in-Chief Susan Hare | 408-391-8068 Susan@REIVoice.com Advertising Sales Meghan Koslowski | 408-264-3198 Meghan@REIVoice.org Art Director Kevin Bell kbell@Western-Web.net Director, Administration Meghan Koslowski | 408-264-3198 Meghan@SJREI.org Printer Western Web Western-Web.net

SJREI Association is a member of NREIA®

REI Voice™ is a publication of SJREI Association™ www.SJREI.org

Reproduction or use of any editorial or graphic is prohibited. To request reprints or reprint rights, contact Info@REIVoice.com.

REI Voice Magazine c/o SJREI Association P.O. Box 90542, San Jose, CA 951093542 www.REIVoice.com Copyright © 2011 SJREI Association.

All rights reserved.

REI VOICE June 2011

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June 2011 REI VOICE

A N A LYS I S

In Intimate Detail: PHEONIX, AZ An interview with Alan Langston

by Geraldine Barry

My colleague, Alan Langston, is the founder and executive director of the Arizona Real Estate Investors Association (AZREIA), the American Rental Property Owners and Landlords Association (ARPOLA), and president of the Phoenix Real Estate Club. Organizations under his leadership serve over 3,000 real estate investors. As president of the Phoenix Real Estate Club, Alan conducts highly interactive networking meetings to keep real estate investors up to date on market conditions.

When I wanted details about the Phoenix market, Alan was my first call.

Please enjoy our interview.

Q: What are the economic drivers in Arizona?

Housing, tourism, health care, biomed and high tech drives Arizona.

Arizona currently outpaces the rest of the country in job growth in both the health care and hospitality sectors.

Q: Describe the real estate market today in Arizona, then more specifically in the Phoenix market?

The market is dominated by dis-

REI VOICE June 2011

tressed properties. While our volume is as high as it was in the boom years, well over 50% Alan of the sales are Langston distressed prop480-990-7092 erties. The Phoeazreia.org nix market is arpola.org more impacted (at 65%) than the other major metro areas. As of the end of April in Greater Phoenix, 45% percent of the sales were REO and another 20% were short sales. The Greater Phoenix market hit another price bottom this February. Prior to February 2011, the initial price low had been in March 2009. I expect prices to rise, but very slowly. In general, the Arizona real estate investing market has never been better with low prices and strong demand for rental property.

With traditional sales representing 35% of the market, we still have a market that supports owner to owner sales and rehabs.

Q: What are investors doing to participate in the market? As president of the local real estate investors association I know you have your hand on the pulse of what is happening.

Traditionally, when investing in Arizona and specifically in Phoenix, investors relied on appreciation and not cash flow for buy and holds. That has completely changed. In this market investors are realizing tremendous cash flow and what most believe will be exceptional future appreciation. The fix & flip market is also viable, but not as strong as 12 to 18 months ago.

Q: If one buys for cash flow - when do you anticipate appreciation happening in your market again?

Tough question. Most savvy investors are building in some appreciation when they buy in this market. Our prices are low and investors are buying well below the median pricing. If your question is more general, then market wide appreciation will happen once we work through the distress inventory. Our prices right now are so far below the cost to build that many of us believe the prices will recover to the replacement cost rather quickly as we near absorption of the distressed properties.

Q: How are rental rates? Are they going up or down?

Throughout the entire drop in the real estate market rental rates have continued to go up with short periods of being flat. Rates are currently going up and demand for single family rentals remains high.

Q: What about occupancy rates in Phoenix?

In single family homes, the rate is 4% or less for anyone that knows what they are doing. Most of our members can turn a vacancy in just a couple of weeks. Marketing your rentals is rela-

tively easy. There is no need for concessions. On the multi-family side the vacancy is around 10 – 12%. Concessions are waning and are only needed in some areas of Greater Phoenix.

Q: Do you think that market has hit bottom?

Depends on how you define the bottom. I do believe it has hit bottom from a price perspective. Also, our foreclosures have been declining having hit their peak back in December of 2009. Demand is strong right now and inventory levels are very low, which will continue to put upward pressure on price. Some price sectors have been rising for a few months.

Q: What is your long-term prognosis for the market? Do you see it declining further?

Most economists believe the Greater Phoenix real estate market will recover in the next three to five years.

As an investor, I’m not sure it matters except that you have to know your exit strategies from the start. In this market you need to be prepared to hold the property for a few years if you want to see appreciation. If you are fix and flipping, you need to plan on longer hold times. Can our market decline further?

Anything can happen, but currently our market is getting better.

• The median price home (new and resale) for an out-ofstate buyer was $124,500 • 60% of out-of-state buyers purchased with cash • 69% of out-of-state buyers plan to live in the homes they purchased • In April 2005, Californians bought 2,153 homes; Canadians, 38 • In April 2011, Californians bought

keep in mind as they explore the Arizona market place?

453 homes; Canadians, 540 • The top-ten list by state and the number of buyers: CA, 453; WA, 194; CO, 124; MN, 95; NY, 86; OR, 72; TX, 66; IA, 61; WI, 59 • Maricopa had a least one buyer from all 50 states with the exception of MS and VT • The median price for investors was $71,250…. 24% of all sales... 69% paying cash

what are you investing in?

What is your strategy?

Q: What do out-of-state investors need to be wary of entering your market place? A lot of them were burned when the market crashed in 2006, and they got side-swiped when properties lost 50% of their previous value?

Plenty. We have investors in our market from all over the world as it is easy to see the value in the Greater Phoenix market. Here is some information from May’s Maricopa County (Phoenix) Housing Opinion written

by Tom Ruff from an analysis of affidavits.

A lot of in-state investors lost money in the market crash as well. Out-ofstate investors need to be wary of the same things in-sate investors need to be wary of. Let’s take Greater Phoenix.

There are 30 separate submarkets in Greater Phoenix. An investor needs to understand the specifics about the area they are investing in as they are all different. They need to analyze the market based on their investment strategy. Is the investment property right for rental or fix and flip or neither? How many rentals are you competing against? What improvements need to be made to the property as a rental or to resell? Mistakes can be made in any market including Arizona and the Phoenix area. Investors need to stick to the fundamentals.

• There were 8,751 home sales • 2,718 home buyers or 31% were from out of state

Q: What three things would you recommend that investors

Q: What are the opportunities available to out-of-state investors?

Know the submarket you are investing in. Drill down even further to understand the neighborhood. Invest based on the current return and not future appreciation. Make informed investment decisions.

Q: As an investor yourself,

I invest in commercial office, some residential and a little land. I hold for the long term and employ very conservative investment strategies.

Q: What are your criteria for investing in a given market?

I look for distressed commercial property with under market rents where the property can be reasonably rehabbed and the rents raised to reflect the market. I also look for buildings that can serve a niche tenant as I find it makes the marketing easier and the turnover less.

Q: What resources to you use to research the market place?

We are fortunate in Arizona, and especially Phoenix, that there are many tools available to help understand the market. These include the Cromford Report, Information Market, NetValueCentral and a few of the very sophisticated wholesalers. Many investors use the Market Update that AZREIA publishes monthly. Also, nearly every national data source has information on our markets. One of the best ways to gather information continues to be to attend AZREIA and Phoenix Real Estate club meetings and subgroups. There is nothing that compares to talking with and sharing information with other investors in your market.

June 2011 REI VOICE

A N A LYS I S

The New Real Estate Paradigm An Extract from the May 15, 2011 Campbell Real Estate Timing Letter

Robert Campbell has had a multifaceted 30-year real estate career as a real estate investor, developer, broker, and market timing expert.

The son of a San Diego homebuilder, he spent many hours as a youngster tagging along with his dad and later worked on his father’s construction sites.

Mr. Campbell quickly learned that there was far more to real estate than dirt, concrete, lumber and building materials. He learned that real estate markets are a lot like rollercoaster rides, where spectacular climbs are frequently followed by spectacular falls.

The March Mortgage Monitor released by Lender Process Services (LPS) shows that bank REO inventory stood at 2.2 million homes at the end of March – an all-time high – while foreclosure starts increased by 33% since the end of February.

As shown in the chart: loan delinquencies continued to decline in March, dropping by more than 11% month-over-month – falling to the lowest level since 2008 – as more delinquent loans were either cured or moved into foreclosure. It is important to note the impact of seasonality – namely that the first quarter of almost every year shows a drop in new delinquencies – and historically March is consistently the month of the largest first quarter declines.

Also know that while loan delinquencies are falling, be aware that they are still highly elevated – and are about 1.8 times the 1995-2005 average. Foreclosure inventories, however, are not only even more elevated – but they are rising and not falling – and currently sit at a level that is an incredible 8 times historical norms.

LPS reports there are currently 2.0 million loans that are more than 90 days late, which – as shown in the chart, “cure rate for delinquent loans” (Nov 2010 Campbell Real Estate Timing Letter) have almost a 100% probability of ultimately becoming a bank-owned REO. If we add these 2.0 million homes that are 90+ days late to the current REO

REI VOICE June 2011

inventory of 2.2 million homes, we find they outnumber March foreclosure sales by a factor of over 45 to 1.

Other highlights of the LPS March report include: • Loan delinquencies have declined and foreclosures have increased across all mortgage product lines.

• Almost 31% of all loans in foreclosure have not made a payment in over two years. This is a record high – and up from 13% from a year ago, March 2010.

• There is almost three times the number of foreclosure starts vs. foreclosure sales.

The data from LPS all points to the simple fact that the foreclosure pipeline is bloated with over overhang (also referred to as “shadow inventory” by many) with problem loans that will ultimately get thrown on the market

as bank-owned REO sales. How bloated? As reported in the November 2010 issue of the Campbell Real Estate Timing Letter, there would likely be at total of 7 million distressed properties hitting the re-sale market as either REOs or short-sales in the not-sodistant future. This is what the data from LPS is showing as well.

Be aware that the falling U.S. housing market we are now witnessing is caught in a self-reinforcing, negative feedback loop, whereby falling prices bring more distressed supply to the marketplace because more and more homeowners with mortgages are now underwater – which in turn causes them to “walk away” in greater and greater numbers.

Also, a growing number of homeowners that are not upside down on their properties – and thus do have equity – will likely decide to put their homes up for sale to try to preserve their capital before it

shrinks even more.

On the other side of the vicious cycle coin, while supply tends to increase during a housing market downturn, demand tends to decrease. And the reason is fairly simple: Why should I buy a house today when prices are likely to be cheaper tomorrow?

Bottom line: The rising trend in foreclosures and bank-owned REO inventories – which are the mortal enemies of housing prices – means that today’s national home price indexes as measured by both Case-Shiller and Clear Capital have nowhere to go but down. Reversion to the mean calculations suggest another 15 to 20% fall in prices from current levels, which would result in a 45 to 50% peak-to-trough total decline before the correction is over.

For information on The Campbell Real Estate Timing Letter, visit RealEstateTiming.com

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A DV I C E

Playing Foreclosure Roulette 10 REI VOICE June 2011

By Michelle Lenahan Round and round she goes where she stops nobody knows!

This is really what it feels like to be an auction investor right now at the courthouse steps. You never can tell which properties are going to sale and which will be postponed to a later date. We are in unprecedented times in terms of the number of postponements and delays in the foreclosure process. Knowing which homes are actually going to sale is anyone’s guess.

Sean O’Toole, the founder of ForeclosureRadar wrote, the initial Foreclosure Roulette blog (http://www.foreclosuretruth. com/blog/sean/foreclosure-roulette/) almost a year ago, talking about the banks’ extend-andpretend practices and why there will continue to be delays in the foreclosure process. Some experts will tell you that the banks are trying to control the inventory of REO properties to somehow protect the market. The reality is that lenders are trying to manage their way out of this mess, which means slowly modifying, short

selling and foreclosing on the delinquent inventory. This insures that it will take years to finally dig out from under the negative equity that plagues the nation.

As of March of 2011, in California it now takes on average 302 days to foreclose. This is a process that should take approximately 111 days. These delays can be substantially longer depending on the lender, as you can see in the Short Sale Report at ForeclosureRadar. com. One lender in particular is taking over 767 days to foreclose.

In fact, this lender now has active trustee sale dates on over 2,600 properties in California that had an original Notice of Default filed in 2008. This represents over $917 million in loan origination that has ballooned into the published bids of close to $1.2 billion.

Those of you who have been paying your house payment or rent each month may have mixed feelings when you calculate that these folks have not made a payment in over 3 years. The question remains, are the owners really benefitting from these delays? If you consider that FHA will lend again to homeowners just 3 years

after a foreclosure, these delays have really placed these folks in a perpetual state of foreclosure.

They are not recovering and restarting their lives, they are simply holding on until the bank decides when they can finally close this chapter and move on. The only proactive action a homeowner can take is to try to modify their loan or short sell their property.

When you look at it from that perspective, you can see that this practice may have done more damage to people over the long term than anyone can really calculate.

What this means to investors is that there is a huge opportunity today and for years to come.

Based on these delays, it is important to keep your peripheral vision sharp when looking for the best opportunities. The very best investment may be a short sale, could be an REO purchase, or may be found at a trustee sale. The key is to understand the game you’re in and be prepared to step up and play when the time is right.

Michelle Lenahan is Director of Customer Service & Training for ForeclosureRadar. com. Ms. Lenahan began her career as property manager for a large real estate firm in San Francisco, and then transitioned into escrow, wholesale lending, and the title industry before joining ForeclosureRadar.com.

With a passion to understand and explain real estate related issues to others, her role is to teach agents, investors and homeowners to understand the foreclosure market and to create the best opportunities for themselves.

Contact Michelle Lanahan at michelle@foreclosureradar.com

June 2011 REI VOICE

11

A DV I C E

Bumpy Ride for Distressed Property Buyers

By Tom Wilson

Tom Wilson has been investing in real estate since the 70’s.

He first invested as a part-time activity, and then after thirty years with some of Silicon Valley’s pioneering technology companies, Mr. Wilson put his business and management experience toward fulltime real estate investing. Wilson Investment Properties offers highcash flow, fullyleased investment properties.

12 REI VOICE June 2011

So, you want to jump on the distressed property bandwagon?

Well, hang on; it can be a bumpy ride. I’ve purchased over 260 of these properties. The first three or so were the real estate equivalent of elementary school--skinned knees, huge learning curve, lots of unexpected bills. The next dozen properties were like high school and college: still a lot of learning, but definite progress and profit potential. Ask anyone who has done a lot of deals. You don’t really hit the grad-school equivalent of real estate investing until property number 20. Even then you’ll still learn something new every day, but you’ll have the experience and resources to see you through.

When individuals who haven’t completed an elementary education in real estate investing want to begin with something as challenging as a distressed property, I’m tempted to shout, “Put your money under your mattress!” There are a lot less risky ways to invest in real estate. What are the signs that an individual is on the road to probable disappointment or disaster? He or she says one of the following:

“Foreclosures must be easy to find.

I read about them every day in the paper and everyone seems to be buying them.”

Everyone seems to want to purchase foreclosures, but very few are successful. Good quality properties at a sufficient discount are in short supply relative to the demand. Oh, there are plenty more coming down the pike from the shadow inventory, but the banks are releasing them at a very low rate to avoid damage to their balance sheets.

My company purchases about 6 properties per month, however, good value ones are so difficult to find that we average 48 offers for every one that we have won over the past two years. And that win rate is with a full time staff. There is simply no free lunch; finding high value quality properties is real work. Most buyers over pay because they don’t fully calculate the true costs of getting the property renovated and rented.

“I think it is safe to buy; the market must have hit bottom by now.”

In fact, the double dip is already here and property values in the majority of U.S. cities are projected to go down farther before they hit bottom.

Realty Trac reports that we currently

have $1.5 trillion and 41 months of existing inventory to work through, not even considering the shadow inventory. It will be difficult for the market to recover before we clear out the toxic loans.

Most respected economists project that it will take 3-7 years in most regions before the backlog of foreclosures is off the books and the market turns around. Moody’s Economy projects that it will be 2033 before California returns to its prior peak. It is critical to buy in a region and neighborhood that is at low risk of further declines. One gauge is to find out how much negative equity there is in a particular neighborhood and how much it has declined so far. The more it has declined from the peak, and the more negative equity there is, the more likely it is going down farther.

“The only cost after purchase should be just a little paint and carpet.”

I wish I knew how many times I have heard this from a new buyer or an agent. In fact our company spends on the average an additional 17% of purchase price before a property is leased or ready to sell. And these are properties that need just cosmetic attention! Some of the typical costs that are in addition to the initial rehab es-

timate are: closing costs, debt service, taxes, insurance, advertising, lease up fee, property management fee, utilities and additional surprise real rehab costs, just to name a few. What one thinks is a nice rent ratio at purchase turns out to be something considerable less by the time the first rent check is deposited.

“How hard can it be? I think I’ll do it myself.”

I won’t say turning a distressed property into a profit maker is rocket science, but there are many moving parts, and the cost of mistakes and delays is high. I highly recommend getting an experienced partner or purchasing from a reputable source with a lot of experience. Don’t reinvent the wheel; your elementary education will be too expensive. Wait until you’re a graduate-level investor to purchase and turn distressed properties on your own. All indicators are that distressed properties are here to stay for quite a while--you have time to learn without breaking your bank.

I enjoy assisting new investors and welcome your questions.

Contact Tom Wilson at 408-867-1867 TomKWilson@earthlink.net

June 2011 REI VOICE

13

2011 Real Estate

SF Bay Expo Thank You to All of Our Exhibitors & Sponsors who enabled us to deliver an exceptional opportunity for Bay Area real estate investors and professionals.

Attendees gathered information, listened to marvelous speakers, shopped, and networked.

And you made it possible!

We hope you join us again in 2012.

SFBayExpo.com 14 REI VOICE June 2011

CA L E NDAR REGISTER ONLINE AT WWW.SJREI.ORG

J une: »»

6/1 & 6/2 Update on the CA Market with statistician and economist Mr. Robert Campbell

»»

6/21 Mid-Peninsula Meeting

J uly: »»

7/6 & 7/7 East & South Bay meetings - Bruce Norris

»»

7/19 Mid-Peninsula Meeting -

August: »»

8/3 & 8/4 East & South Bay meetings -

»»

8/16 Mid-Peninsula Meeting - CSR – Commercial Investing Update

Septe m ber »»

9/7 & 9/8 East & South Bay Meetings – Sean O’Toole of Foreclosure Radar

»»

9/20 Mid-Peninsula Meeting -

SAV E T H E DATE!!

I Survived Real Estate 2011 October 14 - Nixon Library, Yorba Linda, CA

SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR

SETTLING DEBT WITH DIGNITY Learn the Benefits of Short Sales A Free Service for Homeowners Do you know a homeowner who needs help? Are you an agent or loan I’ve p e ne rsonall officer who would like to receive over gotiated y a referral by partnering with me? sale 200 short app Short Sales demand a certain level of letter roval s! expertise and tenacity. I’ve procured $11,000,000 of “forgiven” debt for homeowners—that’s an 87% success rate. Call me for a free and confidential telephone consultation. For free weekly industry updates, subscribe to my blog: www.NatKnowsShortSales.com.

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B AS I C S

16 REI VOICE June 2011

PROPERTY MANAGEMENT: A TIME-SAVING INVESTMENT

by Chris Clothier

Chris Clothier is a selfmade entrepreneur who has worked with other members of the Clothier family to build MemphisInvest. com, the largest real estate investment firm in the Mid-South and the largest, private property seller in West Tennessee.

Along with his family, Chris is passionate about assisting real estate investors and real estate investment companies and actively supports others in their goal of building long-term sustainable wealth through real estate.

When I first began investing in real estate, I was counseled over and over again from other investors about managing my own property. They touted the benefits of saving the management fees and earning the tax write-offs, as well as being firmly in control of who was occupying my property. It all sounded so great and their words seemed to be filled with years of wisdom. Yet, they were trading their most precious commodity—time—for a few dollars.

I see this same penny-wise, timefoolish mentality today with people who purchase REOs, foreclosures, and short-sales. It’s better than OK to look for property deals. The majority of money is made by buying right and people with the talent to find deals are spending their time wisely –when finding deals.

When they spend their unique talent managing properties, how are they building wealth?

However you come to the decision that real estate is your wealth building strategy, do not waste time fretting over whether or not to manage your properties yourself. Are you interested in building wealth or developing a second job? Time is your most precious asset and it can be used to improve every aspect of your life or it can be used to fix

toilets and collect rent. I prefer to leave property management to the experts and spend my working time using my expertise--finding and evaluating investments--and spend my spare playing with my family.

Besides putting your time to better use, consider the other benefits of using a professional property management company. High-quality property management companies have systems and processes specifically designed to create efficient work flow. From occupancy to management to legal issues, the company will have the processes in place to handle your properties. Those efficiencies are what lead to increased revenue for an investor, less strain on the investor’s time, and a reduction in costs incurred by the investor just to name a few.

Revenue can actually be increased, even after management fees, by reducing the number of days a property sits on the market waiting to be occupied.

A quality management company will already have applicants ready to rent properties and a process to begin marketing a property immediately. By increasing the number of days a property stays rented, the company is increasing your revenue.

Finally, your costs can be greatly reduced by using a management com-

pany. Simply in terms of having policies in place and a procedure for tenants to report issues or make requests, a management company can quickly answer and decipher which calls are important and necessary and which are issues to be handled by the tenant. As property owners doing our own management, the tendency is to keep the tenant happy because we fear having to repeat the rental process, therefore we often spend money on unnecessary expenses.

There are many landlords who advise keeping overhead small in order to save a dime. In other words, spend as little of your hard-earned rent as possible and do as much work as possible. In my book, building a portfolio of investment properties is a logical way to build wealth and provide for my family. But property management?

I have more profitable things to do.

Before managing your own portfolio, consider the value of your time and use your time where it will give you the best return: it is not in managing your properties, it is in finding the best property management company you can and then doing what you do best. The gains you make will be huge!

Contact Chris Clothier at 877-773-9998 Chris@MemphisInvest.com

June 2011 REI VOICE

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TRENDS

IGNORE CITY HALL AT YOUR PERIL Jeffrey B. Hare, Attorney at Law, provides outcome-oriented legal services to real estate investors, commercial and residential property owners, and real estate developers. As a land-use attorney and real estate investor, Mr. Hare provides clients with a pragmatic but thorough approach to due diligence, contract review, and negotiations.

He has vast experience in entity formation (LLCs, etc.) for check-book IRAs and other business purposes.

By Jeffrey Hare A compliance order from the local Code Enforcement department at City Hall can be very unwelcome news for the investor looking to quickly flip a distressed property.

Typical notices include building or zoning code violations; notice of substandard housing conditions, and other public health and safety requirements. The results can be frustrating and expensive, but they don’t have to be. With a little extra effort and sound advice, you can effectively manage this situation.

Unlike purchasing a home, where the buyer is provided a multitude of disclosure forms and has both the time and opportunity to conduct thorough inspections of the property and the neighborhood, investors often purchase property sold on an “as-is” basis, with limited ability to conduct such inspections.

In some instances, the buyer will have little or no recourse against the seller. Many distressed properties are already the subject of local Code

Enforcement action, just waiting for the new owner to show up. In some cases, the cost of repairs may be the tip of the iceberg: there could be much more severe consequences, including civil penalties and even jail time.

One client purchased what they thought was a duplex in a quiet residential neighborhood, only to find out the propert was zoned for single family use. In addition, the property was located within a Historic Zoning District, and all modifications had to conform to the City’s historic preservation guidelines.

The property could not be occupied – or rented – until it was in full compliance. The delay took over two years. Another client discovered the hard way that substandard housing conditions could lead to condemnation and immediate displacement of all of the tenants. It is illegal to collect rent for substandard housing, and tenants often discover how to report violations to avoid paying rent. Failure to comply with Code Enforcement orders can result in

civil penalties amounting to thousands of dollars, enforced by liens recorded against the property. In extreme cases, the property owner can be sentenced to jail.

Another client discovered that the cute “guest cottage” on a property they had purchased had actually been a garage illegally converted without permits. Illegal conversions, additions and other modifications to the property, often without proper permits, are a common but expensive problems for investors.

Moreover, the renovations must be done in accordance with current codes, with permits, and by licensed contractors.

What can you do? First, look before you leap, and budget accordingly. Hire a competent inspector who can give you a realistic estimate of required repairs – including cost of permits – before you write the check. Find out whether local zoning and building regulations will allow you to use the property as you intend. Some cities provide databases of pending code violation

actions online, and you can always phone the city to inquire before you buy.

Second, if you get a letter from Code Enforcement, respond. Ignoring the issue will not make it disappear. The ultimate objective is compliance; the best use of time is find creative solutions. Work with the inspectors and city staff – don’t yell at them. Cooperation will yield valuable results in most cases. A lawyer who understands local government regulations can provide valuable assistance.

Fighting city hall can be both expensive and futile when it comes to health and safety regulations. After several delays, one property owner begged a Judge for a 30-day extension to comply with the Code Enforcement order. The Judge granted the extension, but told the owner to bring his toothbrush if he came back to Court. The owner complied.

Contact Jeffrey Hare at 408-279-3555 Jeffrey@JeffreyHare.com

June 2011 REI VOICE

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F E AT U R E

LEVERAGING DISTRESSED ASSETS TO YOUR ADVANTAGE

By Lori Greymont

Lori Greymont is CEO of Summit Assets Group. She offers educational presentations around the U.S., trains and mentors people new to purchasing distressed assets and coaches on creative financing techniques. Her company sells single fix and flip properties, bulk lists, and tenanted cashflowing properties.

There’s a house on Vine Street in Atlanta. The homeowners defaulted and the bank foreclosed.

Then the property was listed at 80% of its value by an agent specializing in REOs. The threebedroom, one-bath house in a decent working class neighborhood didn’t sell. So the agent dropped the price. And dropped it again.

Why wouldn’t the house sell? It was in good, not great, condition.

The house didn’t sell because no one in the neighborhood could get a loan. Finally, the asset manager had to get the distressed property off the books. He slashed the asking price to $10,000 and listed it with other similarly priced houses, and then sent the bargain list to investors.

Distressed assets can be huge money makers for savvy investors—as long as they follow the five principles for converting empty properties into cash-producers.

1. Concentrate Efforts. Decide in advance which areas of the country you’d like to invest in.

You’ll find the best bargains in the mid-west and southeast. Focus on a few cities and learn as much as you can about them. Other investors are a great help with this investigation. Also read local blogs.

What are properties renting for?

What is the inventory?

2. Do Due Diligence. Once you have focused on a few areas, start perusing lists of distressed assets. You’ll want the newest house you can find AND with the least liens. Make sure you adjust the offer price to be in line with the neighborhood’s other distressed homes. All distressed

22 REI VOICE June 2011

properties have liens, usually tax liens, but sometimes water or sewer liens. Factor those into your purchase price. Most online real estate sites can’t help much with understanding property condition. There is no substitute for feet on the ground, which leads us to….

3. Build a Team. Because you’ve concentrated your efforts, it’s a lot easier to find someone willing to drive by a property and peek in the windows. This banking meltdown has allowed the creation of many support businesses for the banks to look at, price and manage their own distressed assets. You can search the internet for “Distressed Asset Management”, “BPO’s”, “DriveBy Services” or a host of other

words and pull resources that are your feet and eyes on the ground.

Plug into the existing network of professionals and within a day or less you will know if you found a gem or not. And when you work with someone you like, call them back for repeat business. Relationships are also key.

4. Sell Quickly. There are more properties on the market than anyone can buy so how do you sell your property ahead of the neighbor? Finance your buyer.

There are many creative financing methods that you can employ that offer you control and a great return. If your buyer can be approved by you, they can make a decision in days and be in the home in less than a week or two. This helps preserve your

asset from vandalism, decay and overhead costs that you have to pay if it sits vacant.

5. Get in the Game. There is nothing more expensive than cost of lost opportunity. We all know that inflation is here to stay for the next few years. If our gas and groceries cost more today, won’t our housing cost more in a few years? The best time to buy properties has never been when the market is going up—the best time is actually right now.

Where else, outside of a game of Monopoly, have you been able to purchase multiple properties for as little as $25,000?

Contact Lori Greymont at 888-298-0652 Lori@SummitAssetsGroup.com

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June 2011 REI VOICE

23

A DV I C E

Short Take on Short sales can be a boon to investors and an escape hatch for underwater homeowners. Buyers benefit from low short sale investing prices, while sellers can get rid of mortgages they cannot afford. Lenders, on the other hand, eliminate non-performing loans without going through the whole foreclosure process, which can be much longer and more costly to them than a short sale.

When investing in a short sale remember two things: patience and patience. The lender must sign off on any short sale offer. The lender will also want assurance that there is no financial or other agreement between the buyer and the seller, and will prohibit the seller from ever again renting or owning the property. While some investors may choose to identify troubled homeowners and initiate the short sale paperwork, caution is advised. There are many federal regulations to protect homeowners. The other path is to work with a listing agent. Agents can and do earn commission on a short sale. A few points out of your pocket may be worth having someone with short sale expertise responsible for ensuring that the transaction is done properly.

Natalie Knowlton, Director of Short Sales for Nick of Time Short Sales is a third-party negotiator who has been working with short sells longer, and has more training in the legal and ethical issues than just about anyone else in the field. As a professional involved

24 REI VOICE June 2011

in short sales, we asked her what investors ought to expect. “First, be prepared to agree to the NATALIE lender’s terms.

KNOWLTON I’ve seen ap650-900-4608 proval letters Natalie@ that state no CALSSP.com resale for 30, 60, or 90 days.

If you intend to flip a property this is an issue.

Also, if the buyer intends to finance the purchase, their lender may have seasoning issues.”

Asked about her challenges working with homeowners, Natalie said, “Too many struggling homeowners buy into the myths about short sales.

For example, they incorrectly think that they are ineligible if they own their own business, if they are currently working, if they are current on their payments, if they have a retirement account, if it is an investment property, if they are collecting rent on the underwater property, or if they own several properties. None of these things necessarily disqualify a short sale.”

What are the positive outcomes that Natalie has seen? “My favorite outcomes are approval letters from the lender saying ‘will consider the Note paid in full,’ ‘full and final satisfaction,’ ‘agree to settlement short of full payment,’ and ‘we waive any deficiency rights.’ These are all wins for the seller. I’ve also seen approv-

als for investment properties with full satisfaction, investors who receive money at closing ($4,100 in one case), home warranties and pest inspections paid by the bank, past due HOA fees negotiated down and paid by the bank, investors who collect rent during the short-sale process, and second lenders agreeing to satisfaction. I’ve also seen 6% to 7% real estate commissions go to the agents involved while I handle the paperwork as a third-party negotiator.”

“I’ve seen lives change and become better than the underwater owner ever imaged. One person thanked me for giving him his dignity back. People aren’t struggling with mortgage payments out of choice. And people shouldn’t be paying their mortgage with their retirement account when a short sale may be an option.”

If short sales are so wonderful, why aren’t more real estate professionals involved in them? “The rules and regulations required to run a legitimate business are very exacting,” Natalie said. “I fully comply with all government regulations and it takes a great deal of time and limits the way I can promote my business. Meanwhile there are others in the market making grandiose claims and defrauding the public. I must, and do disclose the following to all my potential clients: ‘I am not associated with the government and my services have not been approved by the government or the lenders. The short sale lender

might not agree or approve the short sale. A homeowner could lose their home and damage their credit if they stop paying their mortgage. If the offer is accepted or rejected the homeowner/ seller does not have to pay our fee.

The lender will. Homeowner/Sellers have the right to reject their bank’s offer without any charges from us. I’m a licensed agent DRE 01885366.’”

Parting thought? “Keep your money in your pocket. Distrust anyone who asks for a fee to assist with a short sale. We offer free consultation to homeowners and investors, and we get paid by the lender if a short sale is approved. The money for a short sale should not come out of the homeowner’s pocket.”

Short Sales Other Truths About Short Sales • S hort sales are not for everyone • A short sale is possible even after a Notice of Default is recorded • H AFA will not save the world and give everyone $3,000 • B ankruptcy may not be the best option for preserving credit • A 1099 does not always mean you will pay taxes • U nderwater investors may receive a refund on their taxes due to a short sale • T he homeowner may owe the lender money if it the property goes to foreclosure—not always so with a short sale • H omeowners can buy another house after a short sale • I nvestors can and do buy short sales • S hort sales can be purchased in a LLC

June 2011 REI VOICE

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F E AT U R E

FACEBOOK FOR

by Aaron Norris

Aaron Norris is Vice President of the Norris Group where he is responsible for business development and production of TNG’s award winning radio show, events, and educational seminars.

Mr. Norris is also principal at Palisoul, Norris, + Conroy, a marketing and strategy team based in Southern California and hosts the marketing and business podcast, The Cocktail Party Statement.

If you did the homework from last issue of the REI Voice, you observed a two-year-old and a 70-year-old using a smart phone and/or tablet computer. Were you amazed?!

What’s so wonderful about technology is that far more developers are focusing on user interface (UI) and experience. An iPad is a perfect example of beautiful interface design. A two-year-old and a senior can both have an amazingly tactile, intuitive, and fun experience without having to know much about the technology they’re using.

Facebook is another of these intelligently-built and addictively interactive sites. It has exploded to over 600 million users since it launched in 2004. Here you can see which sexy actress your grandma most resembles or reconnect with your 3rd grade crush. Or, you can use it strategically for business.

It’s still shocking to see so many small businesses completely ignore Facebook as a serious business tool. Hopefully the accompanying chart puts it into perspective.

You may be wondering why Facebook has more profiles than people in both San Francisco and Sacramento. I have a question in to Facebook on this matter, but it’s most likely due to pages/profiles for things like business, nonprofits and brands.

In comparison, Mercury News and the San Francisco Chronicle have daily circulations of 577,665 and 235,350 respectively. (Source: Audit Bureau of Circulations.) Not bad, but Facebook has almost as many Gen Y’ers as it does total

26 REI VOICE June 2011

Comparison of Facebook Profiles to General Population 226,860

500,340

191,080 125,960 248,940

805,235

945,942

315,120

564,940 393,060

329,620

SAN FRANCISCO

SAN JOSE

Facebook Demographics (by age):

13-30

466,488

SACRAMENTO

31-46

47-64

General Population

The number of Generation Y (ages 13-30), Generation X (ages 31-46), and Baby Boomers (ages 47-64) on Facebook compared to the new census numbers for San Francisco, San Jose, and Sacramento.

Source: Facebook and US Census Bureau 2010 dataset.

subscribers!

Granted, print and Facebook are extremely different mediums.

Both have their benefits, but the numbers in social media are pretty exciting. Properly leveraged, you could be potentially reaching and engaging very targeted demographics.

Enough about numbers — I promised you some tips to engage. Hopefully I’ll reach both those that are beginners and avid Facebook addicts.

Step 1: Be Interesting

Ask someone extremely honest and close to you if you’re interesting or not. If you’re told you’re as interesting as a door knob, don’t worry. Simply skip to step 6 and read the book, Tipping Point. It’s time to figure out if you’re a maven, connector, or a sale person.

Knowing is half the battle. And

when you know, you can use what you’ve got to get what you want.

Step 2: Create Two Separate Accounts

If you’re just beginning with Facebook, create an account. Use your personal email address and only invite close friends and family. Have someone familiar with Facebook settings review important privacy information and settings.

Then? Play! Learn the site, the tools, and the games. Learn how to post pictures, post a status update, and make sure you know the difference between posting on a wall and sending a private message. Then listen, but not in the auditory sense.

Spy on what other people are doing in your network and get to know the rules of engagement.

For those where your personal network is almost 100% uninterested in your work and you plan

to use Facebook for business purposes, consider opening a second account using your business email (it must be a different email from your personal account). Use this exclusively for engaging in business, for networking, and for customer service. Separating to a business account gives you more freedom to talk about work without your personal friends finding you annoying. It also allows you to friend acquaintances without showing them high school photos of you with a mullet or foot-high bangs.

In all seriousness, use common sense and watch what you post online. If you’ve created a network of acquaintances, they don’t always need to know where you are at, what your kids are doing, and how many times you brush your teeth. Facebook has built in

SMARTIES some rich privacy features and filters to separate who sees what but some might prefer a separate profile only for business.

3. Create a Business or Fan Page

Facebook has made a lot of changes to the way fan pages work in the last few years. Creating a business page allows you to post information strictly on your business ranging from address and times open to pictures and web links. This is not as personal as having a personal Facebook account but could easily replace the need for it as long as someone monitors and updates the page regularly.

These pages have some additional benefits. Putting in your physical address allows people to “check in” to your location when they visit you — thanks to GPS technology. You can also install several apps to allow things like your blog, Twitter, and YouTube accounts to automatically post content to your Facebook page. These pages can also be used for the “like” buttons on your website and or to advertise on Facebook and reach more fans.

ready love you.

Word-of-mouth friending is a great way to test the waters of Facebook ads.

Be sure to watch your progress and budget. Don’t be afraid to try different wording and graphics to see what works and what doesn’t. I promise it’s much easier than you think if you give it some time.

6. Hire Someone

Facebook marketing can be extremely complex depending on your product, budget, and how much time you personally have to spend managing pages.

However, it’s worth it. Facebook is extremely detailed on what demographics can be reached. Unlike paid advertising on Google, Facebook can easily target genders, ages groups,

education levels, hobbies, and interests.

Imagine delivering your ad over and over only to single women over the age of 50 who like the book How to Win Friends and Influence People and live in San Francisco. Yep, it’s that powerful.

It’s absolutely acceptable to hire someone to help you manage Facebook. However, not your 13-yearold niece who knows nothing of your business and who might litter your wall with LMAO, LOL, BRB, and a host of other acronyms you know nothing about.

Treat Facebook like any other serious advertising channel.

Make sure whomever you have managing it understands your product, your values and mission, and how you expect them to engage your fans and potential customers.

Facebook leveraged correctly can be an incredible tool for customer service, networking, and referrals. It’s not just for college kids anymore.

Contact Aaron Norris at 951-780-5856 Aaron@TheNorrisGroup.com

4. Show Up

Many people make the mistake of creating an account and disappearing. This reminds me of an 8th grade dance. No one is going to talk to you cowering in a dark corner. Post interesting content, become an indispensable resource, and engage those willing to “like” your page. If you can’t do these things, see number one above.

5. Advertise

Once you’ve set up a page, why not post an ad to get even more followers?

The best way to start is create a simple ad delivered to friends of friends. Set a very low cost per click or cost per thousand (you get charged when Facebook delivers your ad 1,000 times). Your ad will then only be delivered directly to the networks of the people who al-

June 2011 REI VOICE

27

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Are you reaching new customers in a powerful, meaningful way? Are you transforming existing customers into referral machines? At Susan Hare Marketing we evaluate your business, understand your goals, and then tune your marketing message and methods. We write ads and brochures. Develop websites. Engage social media. And ensure that all your marketing activities build on each other.

Call us when you’re ready to use high-octane marketing to grow your business.

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Thrasher Termite & Pest Control Inc. Janet Thrasher 408-354-9944 info@thrashertermite.com www.thrashertermite.com

Brighton Financial Group Vernon Williams 408-931-6582 vwilliams@farmersagent.com www.farmersagent.com/ vwilliams American General Life & Accident Insurance Sandy Zhara 405-297-8577

I RA Entrust Administration Inc. Lamarr Baxter 916-509-7271 www.entrustcalifornia.com/ oakland

Real Estate Invest m ents ACE Capital Group Brian Kammerman 650-364-3330 www.ace4wealth.com Bay Area Equity Group Adrienne Poche 408-369-9244 bayareaequitygroup@gmail. com www.bayareaequitygroup.com

Carolina Liquidator Alex Franks 803-325-1925 alexfranks2002@yahoo.com www.carolinaliquidator.com MemphisInvest.com Chris Clothier 877-773-9998 chris@memphisinvest.com www.memphisinvest.com Real Equity Investment Group Priyam Sawhney 925-639-3674 psawhney@realequity.cc www.realequity.cc

Training & Education Black Belt Investors Sensei Gilliland 951-280-1900 www.blackbeltinvestors.com California Apartment Association Rachelle Hepburn 408-342-3500 rhepburn@caanet.org www.caanet.org

Foreclosure Radar Sean Oâ&#x20AC;&#x2122;Toole 925-513-7175 info@foreclosureradar.com www.foreclosureradar.com Going Beyond Real Estate Les Isralow KDOW 1220 AM www.goingbeyondrealestate. com Real Wealth Network Kathy Fetke 925-280-2830 info@realwealthnetwork.com www.realwealthnetwork.com

Other S ervices Susan Hare Marketing Susan Hare 408-391-8068 susan@susanharemarketing. com www.susanharemarketing.com EveryCircle.com Cesar Plata 408-352-5932 cplata@everycircle.com www.everycircle.com

Stonecrest Investments LLC Steve Freeman 408-557-0700 www.reo4sale.net Summit Assets Group Lori Greymont 888-298-0652 lori@summitassetsgroup.com www.summitassetsgroup.com The Norris Group 951-780-5856 info@thenorrisgroup.com www.thenorrisgroup.com The Real Estate Marketplace Kenneth McNinch 650-489-5712 kenny@theremarketplace.com www.theremarketplace.com Wilson Investment Properties Tom Wilson 408-867-1867 tomkwilson@earthlink.net www.tomwilsonproperties.com

Short Sales Nick of Time Results Team Natalie Knowlton 650-900-4608 natalie@calssp.com www.nickoftimeresultsteam. com

SOUND OPINIONâ&#x20AC;&#x201D;WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR

HELP REAL ESTATE INVESTORS HEAR YOUR VOICE â&#x20AC;&#x201D; ADVERTISE IN REI VOICE MAGAZINE TODAY Contact Meghan Koslowski

408-264-3198 Meghan@REIVoice.com

June 2011 REI VOICE ""

" !

29

Ger’s Top 5

by Geraldine Barry

We hear that the market is ripe with deals. So why is it so hard to find one? One of the investors I know, a sharp go-getter, told me, “Ger, the money isn’t the problem. I can’t find deals.” Of course this investor could easily find properties to purchase, but as I said, he’s a sharp fellow, he’s looking for deals: properties that will turn a profit for an investor. Here, then are my top five tips for finding deals.

1 2 3

Listen to the advice from ForeclosureRadar.com and “Keep your peripheral vision sharp. While you’re pursing one deal, keep your eyes open for others.”

Be open to different types of purchasing opportunities— REOs, foreclosures, short sales, auction properties, and even the house down the street.

Desperation leads to bad decisions. Sure we all want a deal, but not so badly that we over-pay. A bad deal is no “deal” at all when it becomes a deadweight consuming your time and resources. Consider the true cost of your investment and run the numbers; you need a solid margin for error particularly if your goal is to flip the property. If the numbers don’t make sense - move on quickly, don’t waste time and energy.

4 5

Write offers. Lots of them. You need the odds in your favor to win a good deal. Having several options will help you walk away from a mediocre deal (see tip #3).

Let people know what you do. Move beyond just networking with other investors. Expand your horizons. Let everyone you meet know what you’re looking for. You best lead may come from the person on the treadmill next to you at the gym. People love to help other people. It’s part of our nature. Be helpful and open to help others, work consistently toward your goal, and you will see amazing things happen!

Geraldine Barry is founder and president of SJREI Association, the premier educational and networking association for real estate investors in Silicon Valley. Under Geraldine’s leadership SJREI has grown from a half-dozen investors to a vibrant three chapter organization with over 400 investors attending monthly meetings.

She has interviewed many real estate pros such as Bruce Norris, John Schaub, and Jon Freeman all of whom have been guests of SJREI. In addition to leading SJREI, Geraldine is an active real estate investor, guest host of the radio program, “Going Beyond Real Estate,” a frequent guest on the nationally broadcasted NTDTV, Publisher of REI Voice Magazine, and producer of the acclaimed annual SF Bay Expo. Geraldine is also a principal in Miles Barry Contract Furniture.

30 REI VOICE June 2011

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iscover the lowest-risk, highest-quality residential investment properties in the country. Using sophisticated methodology, the best investment properties are carefully selected by an experienced investor and rehabbed beautifully to secure the best tenants. With competent property management, and instant cash flow, your investment pays worry-free dividends from day one.

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• Highest Cash Flow • Lowest Risk Properties & Cities • Immediate Equity • Quality Newer Brick Homes and Stable Neighborhoods • Turnkey – Clear Title, Rehabbed, Leased, Managed • Home Warranty “Wilson Investment Properties makes finding and purchasing a quality property easy and convenient. They offer a system that sets investors up nicely for long-term financial well being.”

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Mention REI Voice Magazine and receive one-year of free property management with your first purchase.

TOM WILSON, President

408-867-1867

TomKWilson@earthlink.net TomWilsonProperties.com

» Full Service Real Estate Broker for the Investor as well as home owner » Residential and Commercial » Conventional and Private Money Loans » Business Broker Services

Stuart Baeriswyl REAL ESTATE BROKER DRE#: 01807909

As the Executive Director and Co-Founder of the SJREI Association, let Stuart Baeriswyl be your all-purpose Real Estate Broker.

P H O N E : 4 0 8 . 3 7 3 . 676 6

EMAIL: stuart@CSRteam.com Feb. 2011 REI VOICE

31

Below are a few recent examples of trust deeds available through The Norris Group.

Location: Fontana, CA Appraised Value: $170,000 Loan Amount: $102,000 Loan to Value: 60% Payment to Investor: $765 per month

California Trust Deed Investing Not everyone has the time or the expertise necessary to be a full-time real estate investor. But thereâ&#x20AC;&#x2122;s still a way to take advantage of the unbelievable opportunity at hand. Welcome to the world of trust deed investing.

Location: Desert Hot Springs, CA Appraised Value: $86,000 Loan Amount: $50,000 Loan to Value: 58.13% Payment to Investor: $375 per month

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Location: Hesperia, CA Appraised Value: $92,000 Loan Amount: $55,000 Loan to Value: 59.78% Payment to Investor: $412 per month

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Location: Victorville, CA Appraised Value: $75,000 Loan Amount: $45,000 Loan to Value: 60% Payment to Investor: $562 per month

Call 951-780 -5856 or visit our web site today for your Free Book and DVD.

To receive property information sheets of available trust deeds and a copy of our free book and DVD on trust deed investing, call our office at 951-780-5856.

Savings accounts, CDs, and stocks have offered dismal returns over the past several years. The Norris Groupâ&#x20AC;&#x2122;s trust deed investments earn 9% return backed E\ GLVFRXQWHG FDVK Ă RZLQJ &DOLIRUQLD real estate.

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California D epar tment of Real Es tate, Real Es tate Broker Bruce Norris Financial Group Inc .

DBA T he Norris Group DRE License 01219911 10/16/2010 10:52:31 AM