REI Voice Magazine Oct-Nov 2011

www.reivoice.com

October- November 2011

TEAM OF ACES WINNING BIG IN REAL ESTATE TAKES A TEAM LOOKING FOR A BROKER • EVALUATING ATTORNEYS • MAKE IT MEMPHIS $4.95 Oct. - Nov. 2011 REI VOICE

1

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 there’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

• 9% Return • 1st Trust Deeds Only • No Pooling

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

• 8-Year Term

• Cash Flowing CA Properties • Ideal for Retirement Accounts (IRAs) • Experienced Team of Experts

• 60-65% LTV Max

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 Group’s trust deed investments earn 9% return backed by discounted, cash-flowing, California real estate.

LOCATION : FONTA APPR AIS NA, CA ED LOAN A VALUE: $170,000 MO LOAN TO UNT: $102 ,000 VALUE: 60 PAYMENT % TO INV ESTOR R ENTED : $765 : $1 TER M OF ,650 PER MONTH LOAN: 8 YEARS

DESERT HOT LOCATION: SPRINGS, CA E: $86,000 ALU APPR AISED V $50,000 NT: LOAN A MOU E: 58.13% LOAN TO VALU STOR: $375 INVE PAYMENT TO 1400 E: $90 0-$ R ENT R ANG EAR S OAN: 8 Y L OF TERM

Propert

y Facts: Duplex SF. LOT, BUILT IN 1990. ts: , 8,712with total of Property Fac , 1,323roSFom 3 be on bath 2 BATHROOMS unit and droom, 2 Bathro 3 BEDROOM, singletrust oms,with 1,470 onedeed Navigating the profitable world of thesf, help of one of bedrinvesting 9,000 sf. oom companies.

Zilpy.co e bathro lot, bu ilt m – Ren California’s leading hard money lendingon ts (One om. in 1949. # Bedroo Last Rent ) m) One two $900-$1,400 Type seen be (Range = Rent

#

$900

1 2 3 4 5 6 7 8

– Rents

1 2 3 4

Address /2010 TH 1 br/ gs, 7/13 $750 rt Hot Sprin TH 1 br/ Ave Dese 9351 Ben $750Desert View nett Ave Last 4 SFH 1 , Fontana 7/13/2010 Bennett 6644 br/1 $850 0 &Sprin CA, 9233 seen gs, CA Randall, 9224 SFH 1 br/ ba Dese 8569 5 Fontana rt Hot CA$650 Rosena CA, 9233 6/4/2010 Ave, Fon ard Way SFH 16550 5 0 tana CA,7/13/201 $7755 Rich 1 br/ Arrow 1372 5/8/2010 92335 SFH 1 , Fongs, 8047 Cyp HotBlvd Sprin tana br/1 0 CA, 9233 ba 7/15/201 9224 Desert ress, Fontana 5 $900 SFH $675 ida Ladera Sierra Ave & Vale CA, 9233 0 7/3/20100 5 Aven /201 SFH 1 6 9233 sqft 6563 7/13 ncia 5 br/1 ba Ave 0 gs, 6/4/2010 Zilpy.co CA 92240 Sier rt ,Hot Sprin , Fontana CA, 3 br/2 ba 1,20 ra Ave Dese m – Ren Fon pola $900 SFH 1/17 tana Ama ts (Two CA, 9233 # /2010 /2010 Bedroo sqft 13227 Calle 1 Ren CA5 7/13 m) t 0 Type/be Hot Springs, 3 br/2 ba 1,37 CA 9224 1/8/2010 ds/bath/ Dr Desert 1 $1,025 SFH t $89510775 Ambrosio sqf Address sqft 7/13/2010 5 TH 2 br/1 Springs, .5 ba 875 0 3 br/2 ba 21,38 9224 sqft Desert Hot $945 $1,100 SFH Miguel Rd9151 Date St, Las0 TH12 San /201 sqft Fontana 1076 br/1.5 ba 0 CA 7/13 seent CA, 9233 Springs, br/2 ba3 1,55 $950 CA 92240 5 Hot 3 1623 rt SFH 5 Randall TH 2 br/1 hurst Cir Dese 7/15/201 $1,200 Ave, Fon ba 4 tana CA, sqft 64735 Pine 7/13/2010 0 CA 4 $945 9233 1789 gs, 5 8 Mar rt Hot Sprin 0 TH 2 br/ 3 br/2 ba 1,90 7/15/201 9224 d Ave, 92316Deseygol Blooming 5 $1,350 SFH lass Ave ton CA, $1,100 Randall 0 sqft 64513 Spyg Ave & Citru SFH 2 5/8/2010 92335 ba 1,634 0 ba s Ave, 3 br/2 9224br/1 6 to see the Fontana $850 16751 $1,400 SFH CA,like Hawthor and would SFH 2 7/3/2010 sqft 92335 entne Ave br/1

Realtor.com

Type/beds/ba TH 3 br/2

th/sqft

d-

$775 Address

5 ba 1,294 sqft

California Trust Deed ByInvesting Bruce Norris 6

1 bedr oom

2 3 br/2 ba 1,417

by

al, entire apprais

2 bedr oom

, Fontana estm d inv9210 $850 l.

Pepper, ig HilCA, 7/3/2010 this trust dee Cra Fon tana CA, ask for d rested in$800 92335 and9258 Pepper estors to fun 9 If you are inte of 5/18/201 951-780-5856 9142 Ave, Fon ble our inv tana CA, Pepper and the 10 ce at$775 to ena Ave, Fon 9233ies 0 5 pan l the ofce tana CA, please cal l com 5/8/2010 92335 IRA $950 9148 ted s, please cal 40374 IRA rm l self-direc Pepper Ave, Fonatana of era list sev CA, If wo h 92335 yourkare wit 9040 Cyp ’dresslike 40264 intereacc Ave, Fon ts. If you oun tana We currently ste pleasreti CA, 9233 ent d in this rem 5 h e ca ll the ofna Bar 40333 these throug Dia ce at 95let. trust deed inve m stment 1-780 -58 on Norris or an eeds.co ask for Aar 56 and NGtru ask for stdd would like Craig H to see th (95185 6 • ww w.T e1 ill. e entire (951) 780-5 ) 780- 58Pag apprais 56 • w w al, 7 8

ba 800 sqft SFH 2 br/1 ba SFH 2 br/1 ba 950 sqft SFH 2 br/1 ba 875 sqft SFH 2 br/1 ba

w

Page.T1NG tr us td

2 REI VOICE Oct. - Nov. 2011 8.875x11-IE-Magazine.indd 1

eeds.c

om

Since 1997, our experienced team of experts has originated California trust deed investments to private individuals, corporations, nonprofits, and retirement accounts (including IRAs).

Our large network of professional real estate investors borrow millions

of dollars every month and demand continues to increase. We scrutinize every deal and every borrower before a trust deed is ever presented to our private money sources.

You can feel good knowing your resources are helping investors clean up neighborhoods and create jobs while simultaneously creating profits for both sides of the equation. It’s a win-win.

Visit our web site or call today to find out how to receive our free book and DVD on trust deed investing.

w w w.TNGtrustdeeds.com 951.780. 5856

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

ER NN WI f t h e a l o ion d r t N a Awarint A P I R E B est t ion f o ru b l i c a P

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

TABLE OF CONTENTS 22

Analysis

6

Select an Active Team for Your Passive Investments

In Intimate Detail: Memphis, TN REI Voice publisher Geraldine Barry interviews Chris Clothier about the Memphis market.

MemphisInvest.com is the largest real estate investment firm in the Mid-South and the largest, private property seller in West Tennessee.

A dvic e

12

Stamp Out Drive

By Shootings! (the importance of having a skilled photographer on your team) Tom Wilson, investor, business owner, and amateur photographer for over 50-years, shares his secrets for producing house photos that have buyers taking a second look.

8

Online Robbery Too many small businesses get duped into paying for something they don’t need and don’t understand. Before you venture into the world of online advertising, hear what on-line marketing expert Aaron Norris has to say.

B asi c s

11

So You Think You Can Buy A Note?

An expert in the note business and note investments, Jeff Armstrong, provides a seven step process for buying a seller financed note.

Features

16

Assembling Your Foreclosure Dream Team Whether investing foreclosures or nondistressed properties, Lloyd Segal, investor and foreclosure expert, suggests that you start by recruiting All Stars in the 12 needed disciplines.

20

Questions to Ask Before You Look for a Lawyer Real Estate Attorney Jeffrey Hare explains how matching the right lawyer to the task requires that you have a good understanding of your objectives and your business plan.

Lori Greymont, CEO of Summit Assets Group, shares with you the four key “E” traits you should look for in a team you want to work with when you are buying “Turnkey” or “Passive Cash Flow” properties.

24

Why an Investor Broker/ Agent may Make All the Difference Investor and broker Stuart Baeriswyl explains how the right broker or agent can be a tremendous asset to an investor’s team. He shows what to look for and how to leverage that team member.

26

Managing a Winning Team Effectively Your attorney, broker, contractor, accountant, and other members of your team all have other clients and other concerns. Susan Hare, consultant and editor of REI Voice, explains how managing your investment team begins with respect.

30 Ger’s Top 5 I nvestor Resour ces

29

The best of the best. Phone/ email/web contacts.

Oct. - Nov. 2011 REI VOICE

3

REI Voice™ Magazine A publication of SJREI Association™

P UB L I S HE R ’ S NOT E

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

WELCOME

At REI Voice we are delighted to share our newest issue. In this edition, we address the benefits of having a real estate team, but whether having a strategic alliance with your children’s teacher, or business partners, the team concept remains true - together we accomplish more. But in terms of real estate this is especially true, a team is a key factor for achieving success as a real estate investor.

Geraldine Barry Publisher, President of SJREI Association

As President of San Jose Real Estate Investment Association, (REI Voice is a division of SJREI), I can say unequivocally that ours is a thriving, vibrant organization largely due to the team that I have strategically assembled.

Flying solo, I could never have accomplished the growth and momentum that we enjoy today. As you develop your team - your goal is to have the relevant professionals and experts in place to get the job done when you find a deal that works for you. I can make a call and have answers to my questions in minutes - that is so powerful. This is why we are encouraging you to take the time to build those key relationships that will help to propel you forward, and assist with accomplishing your goals.

Building a team is not something that can be done vicariously through someone else, although they can point you in the right direction. I get requests from investors for referrals to a “team,” in some cases I am asked for two referrals in several categories! While I am happy to

oblige, you benefit more from building and developing those relationships yourself. Stretch, get outside your comfort zone, and connect with the professionals that you need to be successful.

Cheer your team on. Recognize the team members who go above and beyond the call of duty for you. Validate and reward the performers and they will be motivated to make it happen again. This way you win, they win, win/win all round!

Geraldine Barry P.S. I am happy to share that REI Voice Magazine has won another award for excellence. This time our publication was honored to win an award from the 2011 Visual Media Alliance Showcase of Print/ Design. Thank you to our team Western Web and our designer, Kevin Bell, for making this award possible.

Editor-in-Chief Susan Hare | 408-391-8068 Susan@REIVoice.com Advertising Sales Meghan Ben | 408-264-3198 Meghan@REIVoice.org Art Director Kevin Bell kbell@Western-Web.net Director, Administration Meghan Ben | 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 4309 Sayoko Circle San Jose, CA 95136 www.REIVoice.com Copyright © 2011 SJREI Association.

All rights reserved.

4 REI VOICE Oct. - Nov. 2011

National Real Estate Investors Association Recognizes

SJREI Association

2010 Award of Excellence For Best Small REIA and

2010 Honors of Merit Award for Membership Development 2010 Honors of Merit Award for Printed Communications 2010 Honors of Merit Award for Electronic Communications 2010 Honors of Merit Award for Professional Education 2010 Honors of Merit Award for Community Service 2010 Honors of Merit Award for Government Affairs 2010 Honors of Merit Award for Finance The National REIA Awards for Excellence aim to encourage, recognize, and promote excellence among top performers in its member organizations.

Contributions to the real estate profession, innovation, and community service are a few of the criteria for success in the National REIA Award for Excellence.

SJREI Association’s superior publication, REI Voice Magazine, as well as its excellent speakers and member development were singled out as factors that significantly contributed to its win. Congratulations to Geraldine Barry, President of SJREI Association, and her team for their exceptional contributions to the field of real estate investing.

Oct. - Nov. 2011 REI VOICE

5

AN ALYSI S

In Intimate Detail: MEMPHIS, TN

6 REI VOICE Oct. - Nov. 2011

An Interview with Chris Clothier

by Geraldine Barry I am delighted to have the opportunity to interview Chris Clothier, Vice President of MemphisInvest.com, the largest real estate investment firm in the Mid-South and the largest, private property seller in West Tennessee. As an experienced investor and someone who lives and works in Memphis, Chris’ take on this market is very well grounded. Please enjoy our interview.

Q: How would you summarize the Memphis housing market today?

The investment market is very good, but like any city with a lot of opportunity, there is also a lot of opportunity for mistakes. There are some very risky pockets of the city where property can be picked up for the cost of a small used car and that is not where our company operates. We are concentrating on the outskirts of the city in some of the suburbs and in newer parts of the city. Prices in these areas are hovering around mid 1990 values and represent a great opportunity for investors who want to earn a solid return while eliminating as much risk as possible.

Q: Why is the Memphis a market to consider investing in? It is certainly not a city that comes to mind first for investment.

First of all, we love being considered the sleepy little city on the edge of the Mississippi river and it certainly allows us to play up our “Southern Charm.”

But savvy real estate investors know that many in the U.S. business community consider Memphis a “first choice” city for business and investment. Because of its central location in the country, low cost of living, and commitment by both government and civic leaders to promote the city’s amenities and cultural value, Memphis is thriving and growing. As the 17th larg-

est metropolitan area in the country, Memphis was recently chosen by two international companies as the location for their new world headquarters and the only location outside of Japan to house a heavy generator manufacturing plant. Why does this matter?

Memphis is the distribution hub of the U.S. and is home to five Fortune 500 companies, nine Fortune 1000 companies and these distinctions mean jobs.

Add all of these important considerations to the fact that cost of housing is 22% below national average and you get a market that has a low cost of entry for a real estate investor and a huge upside for growth of capital and return on investment.

Q: How do the employment numbers look currently?

We are hovering right around the national unemployment levels with fewer long-term unemployed and a real struggle for younger people to find work. That being said, local companies announced 5,000 new jobs in the first half of the year and the local government has been working hard to attract more businesses and more jobs.

Q: I discovered recently that 48% of the population in Memphis rent?

Why is this significant and how do you view it – is that a positive or negative thing?

I view it as an absolute positive due to the mindset that is already present with prospective tenants. The number is a little bit skewed because it takes into account some neighborhoods and parts of the city where every property is a rental. As I stated earlier, we have developed our business model by working in the outer sections of the city and the suburbs and the neighborhoods where we manage portfolios for our investors are made up of mostly

owner occupied homes. Still, the mindset in Memphis is that it is ok to rent. The negative stigma that may be present in other cities is not here.

Q: How are rents trending?

Within our company, rents have been trending up as a whole and much of that is attributed to the neighborhoods that we are investing in. During an audit of properties rented in August, we found that 37 of the 55 rental contracts closed during the month were on properties already in the portfolio. Of those properties, 65% saw an increase in rent from the previous contract, 25% remained the same and 10% decreased. This shows how rents and rental trends need to be tracked all the way down to the street location and not just by zip code or neighborhood.

Q: How are investors making money in the Memphis market right now?

We are concentrating on nicer homes and middle class to upper middle class neighborhoods. So the properties and areas we start with for investors are more desirable. From there, we are huge believers in reducing deferred maintenance and how big those savings can be for a long-term investment. So we spend a lot more time and money on the renovation of an investment property.

Our investors are attracted to these two unique messages from our company – invest in better properties, with more extensive renovations. Our investors find this essential to their ability to make money in this market.

Q: What have you learned from the recent financial and reversal of fortune in the housing market?

Do not take anyone else’s opinions on faith! Regardless of who you are dealing with or how good the marketing, an investor’s own curiosity and willingness

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

to ask questions may be the best tool an investor has for long-term success.

There are some fantastic opportunities in today’s investment market, but investors have to protect themselves and do business with whom they feel a connection. This is long-term wealth we are looking to build and that cannot be done with outrageous claims of high returns or fast fixes.

Q: What three things would you share with people who want to become investors or expand their investment portfolio?

Surround yourself with the highest caliber people you can find. The advice investors receive right now will directly impact their net worth in the very near future.

Seek the advice of those you surround yourself with on how to structure your investments to protect your resources. Wealth is built by being able to use capital in such a way that it is protected and working for you at the same time. So do not operate in the dark – seek advice!

Investigate markets outside of your own. If you do not live in a market with affordable price points or high rates of return, there are opportunities and efficiencies that did not exist in similar past real estate markets.

You can find quality partners today who cater to investors from out of the area like MemphisInvest.com.

Oct. - Nov. 2011 REI VOICE

7

ADV I C E

ONLINE ROBBERY

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.

8 REI VOICE Oct. - Nov. 2011

Apparently, there’s now a magic wand pricy consultants can wave over my website to make it the go-to site for every potential customer in my industry. I have been inundated by offers of thousands of impressions, 100,000 subscribers, and top spots in Google by outside vendors selling their overthe-top marketing promises. I would love to hand over these responsibilities to another company, but know respectable search placement takes testing, measurement, and effort ... followed by even more testing, measurement and effort. Why on earth would I let someone experience that for me? (I know, I’m sick.)

In all seriousness, I think too many small businesses get duped into paying for something they don’t need and don’t understand. If you’re venturing into the world of online advertising, it takes many forms and there are certain things you need to be aware of.

Online Ads

Impressions: An impression is the measurement of how many times something is viewed. Let’s pretend you’re reading this article on the fabulous SJREI blog. That counts as one impression. Let’s further pretend you love it so much, you come back to the blog and read it again in a week. That’s two impressions. Let’s go crazy now and say you loved it so much that you forwarded it to your friend Susan and she reads it. Three impressions.

Unique Hits/Unique Impressions: This takes impressions to the next level by getting rid of duplicate data. In the scenario above, you loved the article so much you read it twice. But, if we’re measuring only unique hits, it only counts once (but I still appreciate your enthusiasm). Tossing out one of these

duplicate views gives us two unique hits or unique impressions.

Clicks: Clicks are literally the user engaging with your online ad, link, or media with their mouse. Let’s continue with our example and say in the article I’ve strategically linked to The Norris Group site. You’re in a rush so don’t click on my hyperlink. However, your friend Susan loves the article, but knows very little about The Norris Group. So she decides to click on the hyperlink within the article. She’s instantly transported off of SJREI’s site and starts enjoying the content of The Norris Group. Our math up to this point: three impressions of the article, two unique impressions (you and Susan), and one click.

Conversion: A conversion is when the consumer performs a pre-set goal you’ve defined. This is much more sophisticated than a click and way beyond that of an impression. Let’s say on The Norris Group’s site, I’m measuring the amount of time a user stays on the site and the number of requests they make for information about trust deed investments. If a user is on our website for more than twenty minutes, I am going to assume they fell asleep at the keyboard or they are engaging in some of our rich media (radio, blog, videos, etc.). I also count a conversion if a user fills out an application to receive more information about our trust deed investments.

Back to Hypothetical Land: Susan clicks over from SJREI to The Norris Group and stumbles upon our videos on trust deed investing. She spends 20 minutes going through the material and then notices a link to download a free e-book about trust deeds. She registers quickly online and receives the information in her email.

Susan has just given me two conversions! And all from one click. That’s pretty impressive.

Keep in mind Susan isn’t a customer yet. I’m measuring defined actions I think she’ll take on her way to becoming a customer. This allows me to later look at how much money I’m spending on different routes of advertising to see which one makes more sense.

Furthermore, for you savvy CPAs and finance folks, I’m really cost accounting and figuring out what my cost-perconversion is and comparing not only to other online ads but also my other routes of advertising.

Don’t Be A Sucker

Sharing an embarrassing example of my own will illustrate why this kind of conversion tracking is so important: Several years ago I ran an event and was overjoyed when a national real-estate-specific cable show agreed to run an ad on their website for $3,000 and an agreement to make them sponsors of the event. I was told they had 300,000 unique hits every month and the usual advertising rate was over $6,000 per month. What a deal!

Editors Note: No company can guarantee a top spot on Google. Google’s own marketing states “there is no way to guarantee top placement on a search result page.” As Mr. Norris points out, beware of over-the-top marketing promises.

Trusted by Real Estate Professionals Pre-Listing & Pre-Sales Inspections Preventative Treatments for New Construction Fumigations & Local Treatments Prompt Repairs Licensed & Bonded On-Time, Expert Staff Fully Guaranteed Work Excellent Communication San Diego

• Follow up by calling on advertisers currently appearing on the site.

• Really look at the website and see if the audience is who I’m trying to attract.

I’ve actually fallen for the large impression argument more than once.

The second time was on a site that generated three million unique views and it didn’t fair much better than this embarrassing example. Bigger doesn’t necessarily mean better. Always be asking: Who is my target audience? Be very specific and be able to target and deliver your content to the right audience. Think about industry, location, age, lifestyle, and even how likely your customer is to show up wherever you advertise.

Just because a site has a national brand behind it doesn’t mean it will create a ton of business. One fanatic about your company or brand will be far more effective than a generic ad on a semi-industry-related site. Choose your media outlets wisely and consider engaging your current customers first.

Work from the inside and move out.

Even with industry-specific media, make sure it’s reaching your target audience. The Norris Group doesn’t advertise in many magazines because we’re not national and few magazines have the ability to only deliver in specific markets. I’d rather spend my budget target-marketing to specific locales or creating great content that will spread throughout the web naturally ... and for free.

Nor Cal

I created the artwork and submitted it anticipating that this website would create not only thousands of unique hits, but potentially hundreds of clicks.

Even if it only had a 0.1% conversion rate, it was going to be a big success — that’s 300 conversions that would surely generate business.

Let’s take a minute to do the math.

If I were to achieve a one tenth of a percent conversion, 300 conversions would cost me $10 per conversion ($3,000 paid/300 conversions).

After three months of running my ad on the site, I received three clicks.

Yeah, you read that correctly. Three measly clicks. Zero new business.

Admittedly, I made a few amateurish mistakes. I assumed that: • Large impressions would equate to some reasonable number of conversions.

• Nationally-known media is better than local.

• Industry-specific, niche media will generate more interaction.

Boy was I wrong. Lessoned learned. I could have done a few simple things before I signed on the dotted line to protect myself: • Ask the site salesperson for referrals and overall happiness of current advertisers.

408-354-9944 619-955-5121 www.ThrasherTermite.com We Make Homes Healthy TM

Serving Santa Clara, Santa Cruz, San Mateo & Alameda Counties And All of San Diego County

Oct. - Nov. 2011 REI VOICE

9

A DON’T MISS EVENT March 31st & April 1st E M B A S S Y S U I T E S S A N TA A N N A

CANTU VS. PINNEO Two real estate veterans with well over 60 years of combined experience go Head to Head!

MIKE CANTU has bought hundreds and hundreds of houses in the Los Angeles area during his career and continues to be the Master of Street Smart, no nonsense real estate investing. Mike is a professional skateboarder turned savvy real estate investor with 28 years of industry experience. He is a highly respected and sought after expert in the industry while he daily continues to “walk his talk.”

For more information or to register please visit us at www.reachreturns.com Or feel free to call us at (206) 550-4242

Learn a multitude of various strategies that will start, grow or skyrocket your business to amazing levels!

DO NOT MISS

this highly sought after, one time event to learn from two Masters in the industry. Both Mike and Greg are passionate about their Cause; to educate, motivate, challenge and entertain you and to have you not just explore, but achieve your full and amazing potential.

March 31st & April 1st Embassy Suites Santa Anna

GREG PINNEO brings over 3 decades of experiences in buying, building and investing through ANY and ALL kinds of real estate markets and economic conditions. Greg has pursued his passion for this sport of real estate in all its forms and thrives on bringing his innovative approach both technically and philosophically to audiences across the country.

Greg is a master communicator and enjoys not just educating, but inspiring his audiences.

B AS I C S

SO YOU THINK YOU CAN BUY A NOTE

By Jeff Armstrong

Jeff Armstrong of Armstrong Capital has been a note broker and investor specializing in the seller financed note industry since 1991.

An expert in the note business and note investments, Mr. Armstrong is happy to share his knowledge with investors.

Congratulations! You have decided that you want to buy a note. The first step is to understand what we are talking about when we say “buy a note.” We are NOT talking about funding a loan, creating a new loan, originating a loan, giving someone a loan or buying a loan that someone else is creating. In the Seller Financed Note Industry, when we talk about buying a note we are talking about buying an existing seller financed note at a discount - a first position seller financed note secured by real estate that came about when the seller of the property carried back the financing to facilitate the sale of the property (also called a Purchase Money Mortgage).

Buying a seller financed note has its risks and its rewards. The risks could include the responsibilities and maintenance of holding a note such as worrying about: collecting the payments, default and foreclosure, destruction and devaluation of the property, federal income tax reporting duties, bankruptcy / death / divorce of payor, abandonment of the property, deficiency judgments, IRS tax liens / other liens against payor, assumption of note by another payor, note holder may not be able to sell note if cash is needed and the note holder may spend the small payments frivolously.

The rewards might include a yield (return on investment) that can be much larger than other investments, an investment that is backed by real estate, no loss of initial investment (if the note

is purchased properly) and long term extreme passive income.

Once you understand the advantages and disadvantages of holding a note, you then need to determine for yourself your criteria to alleviate the risks. Some of your personal criteria might include: What states, counties or cities are acceptable and what property types are acceptable (single family home, owneroccupied, rental, mobile home with land, etc.). You will also have to consider your pricing criteria such as minimum discount, minimum yield requirement, minimum note size, maximum note size, maximum ITV, payor credit scores (minimum), whether you will purchase partial purchases or full purchases only, any acceptable unusual circumstances (such as interest only, no payments, zero % interest, etc.) as well as any additional criteria that you make for yourself. It is somewhat of an undertaking but well worth it to learn how to pur-

chase a note properly (preferably, from someone that is a current practitioner and actually purchases notes) so that, if the worst case scenario were to happen (the payor defaults and you have to foreclose), you at least can get your money back.

Buying an existing seller financed note is simple but not as easy as it sounds. You are not able to just go to the internet, find a discounted seller financed note and buy it. You are not able to just call someone on the phone and buy a note tomorrow. There is an entire process and procedures in place to purchase notes and for some it is a full time business.

Seven step process of buying a seller financed note 1) Locating Note Holders - Have 3-5 marketing methods working all the time.

2) Compile Information – Fill out a worksheet, get the story behind the note, get the numbers, build rapport, find the need, get back to them in 24-48 hours with prices.

3) Verify Information – Pick up a calculator; verify payment amount, balloon if any, current balance.

4) Determine Pricing – Use your yield, minimum discount, ITV and other tools to determine your pay price and options and prepare to positively present options.

5) Negotiate Acceptance – Present the options. If NO, then

put on follow up list. If YES, then set the hook! Get a copy of the note, settlement statement and payor’s credit to firm up the prices. Check credit.

Renegotiate if prices need to change because of your criteria.

Prepare initial purchase agreement and list of what you need to continue. Gather all copies and information for due diligence package.

6) Due Diligence - Credit, Appraisal or BPO, Title, Property Taxes, Hazard Insurance, City-Data, etc.

7) Closing and Funding – Prepare and send out closing documents, record assignment, and fund by sending checks or wire to seller. Send goodbye letter to hazard insurance company and servicing company if necessary.

Some note buyers start out by brokering notes to other experienced note investors to gain knowledge, experience and cash flow before buying their own notes. Once you decide to buy notes, you can see that there is quite a bit of work that goes on behind the scenes when a seller financed note is priced and purchased. It is one of the most unknown and unique real estate investments in the nation.

If done properly, buying existing first position seller financed notes can also be one of the safest investments.

Contact Jeff Armstrong at Info@ArmstrongCapital.com www.armstrongcapital.com

Oct. - Nov. 2011 REI VOICE

11

B AS I C S

Stamp Out Drive By Shootings! (the importance of having a skilled photographer on your team)

By Tom Wilson

Tom Wilson is a thirty five year real estate veteran who has executed over $100M and 1,700 units of real estate investments.

After thirty years of managing some of Silicon Valley’s pioneering technology companies, Mr. Wilson put his business and management experience toward fulltime investing. One of his companies, Wilson Investment Properties, offers high quality, highcash flow, fully rehabbed and leased properties to other investors.

I never cease to be amazed at the poor quality of many real estate photographs. Are you aware that the picture for many properties for sale is literally taken from the driver’s seat of a car!? For only an extra 30 min. of your time, or $100 paid to a professional photographer, one of the most expensive products you will ever market can go from an “also available” to “schedule a showing today!” As a serious amateur photographer for 50 years, I’ve learned a few things that make a big difference. Let’s take a look at some common mistakes that are made and how to easily rectify them.

E q uipment For starters I recommend a DSLR (digital single reflex camera), such as an entrylevel Canon Rebel ($300 used to $900 new).

A point and shoot can take very fine every day shots, but this is not an every day sale. A DSLR allows for better lenses, filter attachments, an external flash, and what you see is what you get because you view the scene through the same lens and filter that shoots the picture. You can still set the camera to a point and shoot automatic mood and don’t have to know anything complicated.

A Wide Angle Zoom Lens. (can be purchased with the camera or alone for about $200). The lens should be at least 18mm minimum (or 28mm equivalent to the old 35mm film cameras). Wider is even better but 18mm is acceptable. It should zoom to at least 50mm. Most starter DSLRs come with this lens as the defacto standard, so they are readily available.

95% of point and shoots simply do not have

12 REI VOICE Oct. - Nov. 2011

a sufficiently wide a lens to show all of a room.

Period. Wide angle is the only substitute for when it is impossible or not practical to get farther back. I am flabbergasted at the number of ad photos that only show the toilet and a corner of the tub, or the nice family room with fireplace but don’t let you see that it is attached to the kitchen for a wonderful “Great Room.” A wide angle lens solves this problem.

room from the stairs, and include artistic detail features such as a nice carriage light, flowers, garden arch, or fireplace.

Polarizer ($20-$50 at any camera store; the cheap one is just fine). A polarizing filter attaches to the front of the lens and is used to cut glare and reflections. I rarely take a picture that includes sky, water or through a window without a polarizer. The front element rotates until you see that the picture has the least glare, and best contrast and saturation of color. It works best when you are perpendicular to the angle of the sun or rays. The improvement in the picture is dramatic.

Lighting. Time your exterior pictures with the sun and weather. Don’t shoot an East facing home in the afternoon; go in the morning on a nice day when the front view is lit up. On the interior, go in the daytime, open the windows, turn on all of the lights, use your external flash and angle it to get more diffusion. You want the scene to look warm and lived in.

External Flash ($50-$200). The built in flash is minimally acceptable, however, an external flash (attaches to the metal piece on top of the DSLR called a hot shoe) helps to fill in the shadows at the side of the scene taken with a wide angle, can fill a deeper great room with light more fully and evenly, and can be aimed up so that you don’t get harsh reflections from the bathroom mirror and other reflective surfaces.

Composition Views. First of all, pretend you are the buyer. What would you want to see in addition to the typical pictures? The neighbors’ homes, the street, the back yard, the local park, the development entrance, etc? Then include them in your portfolio of pictures! Consider framing some shots with a tree or doorway, use a step ladder for an elevated view, shoot the living

No Dirty Laundry. Put away or shoot around the trash cans, close the toilet seat, cut the grass, request or pay the resident to straighten up before you arrive, angle your shot to exclude the power pole, the dead bush, etc.

Staging. If the house is occupied get a stager to recommend what to change and remove. If the house it empty, get it staged at least with accessories if not furniture. As a minimum, take along a bag of small accessories to stage the kitchen and baths just for the shots. I stage almost all of my homes for owner occupant sales. Some agents tell me not to do it because most others in that market do not. Perfect. I always want my product to look and be better than my competition.

Using these techniques, you can take better marketing pictures than your competition that will make a big difference in your advertising to entice a prospect to take the next step. If you elect to farm it out to a professional you now know what to look for and what questions to ask. May your next pictures look like you could sell a thousand homes.

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

EXAMPLES

Exterior poor: low light on front, poor angle, trash cans, more driveway than home.

Exterior better: better lighting and angle, framed by trees, pleasing lawn, polarized blue sky

Interior poor: low and uneven lighting, narrow angle

Interior better: wider angle, shows open floor plan, rooms lit, external flash, table staged.

Some people believe photoshop is the solution to poor photography. The staff of REI Voice tested out this notion with the Poor Exterior shot taken by Mr. Wilson. As you can see, after digital manipulation, the colors are brighter and the shadows have lessened; however, it is impossible to digitally reframe a poorly composed photograph, and there is no way to recapture the saturated natural looking sky and lawn without having used a polarized filter in the first place. Conclusion: start with a good photograph and use digital tools for very minor touchups only.

E q u ipment List DSLR $300-900 Wide Angle Zoom Lens $200 Polarizer $20-50 External Flash $50-200 Total Investment: $700-1,000 Amortized over 50 houses:

$20/house

Exterior Poor — digitally altered.

Oct. - Nov. 2011 REI VOICE

13

Your Investing Education

You can spend thousands of dollars and hundreds of hours and still have gaps in your knowledge about real estate investing. For a solid grounding in the fundamentals look no further than SJREI Association’s JumpStart program. We bring you a solid curriculum designed both for the novice real estate investor and for investors ready to tune-up on the latest legal, financial, and practical knowledge necessary for successful investing.

EXPERT INSTRUCTION

With experienced instructors guiding a fast-paced day, you’ll gain knowledge needed to jump start your real estate investing!

LEARN

• The top 10 types of investments and how to determine which is right for you • How to find money to do your deal • How to research and find investment properties

• The critical factors to evaluating a deal • The essential members of your support team and their functions

• The pros and cons of different legal entities: LLCs, Corporations, and Partnerships • When to call on a tax specialist and tax implications of the various investing strategies

• Managing your assets for cash flow and long term gain Geraldine Barry

Jeb Henley

Nancy Chillag

Lori Greymont

Richard Smith

Vernon Williams

Goal Setting

Funding Sources

Investment Types

Tax Issues

Legal Entities

Insurance

Presenter lineup is subject to change.

14 REI VOICE Oct. - Nov. 2011

• Exit strategies for when you need cash for new investments or to fund a long deserved vacation

“The JumpStart program was fabulous!

The day was packed with foundational, and extremely helpful, information on investing. The instructors were both knowledgeable and generous with their time- all of them have been investing for a while. I walked away feeling more confident because of their personal stories (failures and successes with investing), having the opportunity to network with other investors, and the many tools they provided for us. Thank you SJREI.”

—Victoria Moos, JumpStart Participant

Before You Leap Into Investing, JumpStart Your Education!

Saturday, November 5 Cupertino Inn $210 Members of SJREI Association

$6 Com 6 b Savi ined ngs!

$429 Admission, plus 1-year Membership in SJREI and all the member benefits

$230 Non-Member Early Bird Registration $250 Regular Admission Register at SJREI.org For more information, call 408-264-3198

CALE NDA R REGISTER ONLINE for our award-winning events: SJREI.ORG

Sign Up for our email list for the most up to date event news O c tober »»

10/14 I Survived Real Estate Fundraiser, followed by 10/15 breakfast

»»

10/18 Mid-Peninsula Meeting - Deals Gone Wrong / Panel

N ovember »»

11/2 & 11/3 East & South Bay meetings -Lloyd Segal

»»

11/5 JumpStart Program for New Investors

»»

11/12 Lloyd Segal’s Day Seminar at Cupertino Inn

»»

11/15 Mid-Peninsula Meeting - TBA

Dec ember »»

12/1 San Jose, MemphisInvest.com seminar, contact Ashley at 901-751-7191

»»

12/2 SJREI Holiday Lunch – Friday, December 2nd – Save the Date!

»»

12/3 San Diego, Memphisinvest.com seminar, contact Ashley at 901-751-7191

SAV E T H E DAT E !!

March 31, 2011 and April 1, 2012. Mike Cantu and Greg Pinneo – two real estate experts go head to head! Visit www.ReachReturns. com to Register and for More Information!

For More Information or to Register for Any of these Events, Visit: www.SJREI.org

Oct. - Nov. 2011 REI VOICE

15

FE AT U R E

Assembling Your Foreclosure Dream Editors Note: “Assembling Your Foreclosure ‘Dream Team’” contains excerpts from Chapter 22 of Foreclosure Investing by Lloyd Segal, scheduled for release Jan, 2012 by AMACOM. Brackets indicate areas that were truncated due to space considerations.

By Lloyd Segal

By Dream Team, I’m referring to a group of real estate professionals that have years of experience—a team of professionals available to provide assistance to you along the way. Professionals you can count on when and if you need them. Professionals you can call or email when you have questions, and will be there if you run into trouble.

If you’re going to become a successful investor, you’re going to need help. By asking professionals to join your team, you’ll have their experience to rely on, which will give you added confidence. Plus, it will allow you to do what you do best, find deals. Start your team by going out and recruiting all stars in each of the needed disciplines.

Investor Tip: Your Dream Team doesn’t need to have meetings. I’m not suggesting that. It doesn’t have to be that formal. Certainly you can have lunch or coffee meetings with them individually, which is a good idea initially. But in general, you’re just asking them to be available by phone or email to help you.

You only want experienced professionals. In fact, make sure that you’re

16 REI VOICE Oct. - Nov. 2011

the least experienced person on your team. You don’t want people training on your dime. You don’t want someone who is just starting out and has a lot of spare time on their hands. Sure, they may be available, but what good is that if they are inexperienced? There are lots of little tricks of the trade, and you can’t afford to waste your time with someone who is just learning the ropes.

Your team members should include a real estate agent, appraiser, attorney, title officer, insurance agent, mortgage broker, home inspector, escrow officer, general contractor, and accountant to begin with. Later you can expand your team to include a landscaper, financial planner, interior designer, general contractor, and several sub-contractors, etc, etc. Don’t be surprised if it takes longer than you realized to put your team together. Good people are hard to find. It may take some time to assemble qualified professionals that are available to help you. Here is a short list of professionals that you should add to your Dream Team: 1. Spouse/Significant Other

The most important member of your team should first and foremost be your spouse or significant other.

When things go right, they’ll be there to share the joy, and when things get bumpy, they’ll make the ride a little less painful. So your first recruit needs to be them. If your spouse is not on your team, it will make your investing an uphill battle, and one that may eventually burn you out. So share your plans and goals with them first, and

make sure you have their full support and blessing.

2. Real Estate Agents […]

3. Appraisers

You need to work with one or two good appraisers that can provide quick estimates of values, indicate market trends, and provide quality appraisal reviews. The appraisal industry has dramatically changed in recent years.

Lenders and mortgage brokers can no longer select the appraisers they want to use. The new system is completely random. Nevertheless, you’re still going to need a good appraiser on your team for quick estimates of value. In addition, you may want to hire them to review someone else’s appraisal. If you’re looking for a qualified appraiser, check with the American Society of Appraisers at www.appraisers.org.

4. Attorneys […]

5. Mortgage Broker

A mortgage broker is an invaluable member of your team. I prefer mortgage brokers to bankers because they’re able to provide a wide variety of loan programs from many different lenders. You want someone who is familiar with investor loans (non-owner occupied), and has years of experience working with conventional, government, construction, and hard money loans.

Once you have met one or two mortgage brokers who you feel comfortable with, make sure you check their references and credentials. Go

online to your state licensing department to make sure they are licensed and that they are in good standing.

Check the Better Business Bureau and chamber of commerce for membership and complaints. Plug their name (and their company name) into your favorite search engine, and see what comes up – if it is several lawsuits, then it’s time to recruit a new team member. Ask if they stay on top of their ever-changing industry. Also, check their membership in organizations such as the National Association of Mortgage Professionals, www. namp.org and the Mortgage Bankers Association, www.mbaa.org. You want long-term players that are committed to their industry, and to your success.

6. Accountant […]

7. Title Insurance Company

Title insurance companies are a real key to your success. They’ll coordinate with your real estate agent, escrow officer, closing agent, and attorney, to insure your transaction. In preparation to issuing title insurance, the title company will search the public records to determine if previous owners or lien holders have any claims encumbering the house that must be paid before you take title, including outstanding deeds, mortgages, deeds of trust, judgments, liens, and taxes. They can also help you address easements, boundary issues, and other prescriptive rights. So if you don’t want to search the public records yourself, your title insurance company will do it for you.

Some title companies assign title officers and customer representatives

Team most importantly, they must finalize the documents, distribute the money, and resolve any last minute issues that may arise at closing.

by areas. To find your title officer and customer representative, call and ask to speak to the ones assigned to your area.

For your team, you want someone who is there to answer questions and resolve title problems smoothly and quickly.

11. Insurance Agent […]

8. Home Inspectors […]

12. Partners

9. Contractors

Your team will also need experienced contractors and sub-contractors. You may be able to handle the small basic stuff, but when it comes to major repairs like replacing drywall, pouring cement, electrical wiring, and putting on a new roof – hand those tasks over to professionals. Find subcontractors in the following specialties: 1. Major electrical work 2. Major plumbing repairs 3. Heating and cooling systems 4. Drywall replacement and repair 5. Roof replacement 6.

Basement and cement repair 7. Carpet installation […]

10. Escrow

Escrow officers or settlement agents (depending on your state) are key ingredients to your success. Foreclosures are different from normal real estate transactions. There are different documents, different filings, and different payoff requirements. If the foreclosure is still pending, there will typically be lots of last minute phone calls, and frantic, emotional sellers.

Escrow officers need to be very familiar with how foreclosure transactions work and the time limitations. They need to be available to answer questions for you as they come up. And

Depending on your credit worthiness and cash availability, you may need to locate potential partners who can bring the credit or money to a deal. Many new investors need the help of a partner to help finance their foreclosure transactions. You can find partners through the other members of your dream team, referrals from friends and family, and attending real estate investor clubs.

Summary

Foreclosure investing is a business just like any other. You need to be disciplined and professional, but don’t do it alone. Assemble a “Dream Team” of real estate professionals to help you. Your team should include at least one (if not more) real estate agent, appraiser, attorney, mortgage broker, accountant, title officer, home inspector, and contractor. Make sure you’re the least experienced member on your team.

Invite these real estate professionals to join your team and make sure they’ll be available when you need them. Most importantly, your dream team should include your spouse or significant other.

Trained as an attorney, Lloyd Segal is a mortgage banker, author, real estate investor, and public speaker. Mr. Segal is the author of several books, including “Stop Foreclosure Now in California” (Nolo Press), “Stop Foreclosure Now” (published by American Management Association), and ”Foreclosure Investing” (Regency Publishing). With his extensive experience and writings on foreclosure and related topics, Mr. Segal is considered “California’s Leading Foreclosure Expert” and has appeared on numerous radio and TV shows throughout the United States. He currently teaches foreclosure workshops for investors and/or realtors throughout California.

Nov. 12 Buying Foreclosures Workshop with

Lloyd Segal Cupertino Inn Register at www.SJREI.org Learn-California's non-judicial foreclosure procedures How to buy short sales, trustee's sales, and directly from the lenders ●What to say (and not say) to distressed homeowners ●How to get started NOW buying foreclosure properties ●And much, much more! ● ●

Contact Lloyd Segal at www.ForeclosureWorkshop.net

Oct. - Nov. 2011 REI VOICE

17

BE A PART OF SOMETHING AMAZING! BECOME A MEMBER TODAY (408) 264-3198 or www.SJREI.org

W

hether you have yet to purchase your first investment property, or are working on your hundredth deal, you’ve found the bay area’s source for sound, principled advice and networking. As investors ourselves, we understand the challenges that investors face, and customize our programs to address reallife situations and scenarios.

NETWORK WITH INVESTORS, BUYERS, SELLERS, AND THE PEOPLE WHO SUPPORT THEM

MEMBER BENEFITS

THREE CHAPTERS

Hear the best speakers, get the best advice Our educational meetings are delivered by recognized experts in their field. They keep you up to date on issues such as market timing, new legislation, and techniques that may affect or enhance your real estate investing.

EXECUTIVE MEMBERSHIP

PREMIUM MEMBERSHIP

Annual Membership Dues

$500

$225

Additional Member*

$350

$200

1

1

BENEFITS

All successful people rely on a network.

Bringing like-minded people together to share information, assistance, and resources is a core goal of our chapter meetings.

STAY MOTIVATED, AVOID PITFALLS Who but another investor understands the doubts, challenges, and successes of real estate investing? SJREI Association fosters a positive climate of mutual support and sound advice. Your questions are respected, your participation is valued.

• South Bay • East Bay • Mid-Peninsula Membership entitles you to free admission to your local chapter’s monthly educational and networking programs and much, much more.

Guest passes (use at any chapter meeting) Free registration & attendance at local chapter meeting Network with other investors at each event Free registration & attendance at all chapter meetings: Mid-Peninsula, San Jose, East Bay Invitation to annual Leadership roundtable VIP seating at registered events Personalized name badge with expedited event check-in On-line community: member profile, read and post messages on message boards Hundreds in discounts for goods and services through National REIA affiliation Discounts on workshops and special events Invitation to Quarterly Insider Luncheon Audio library of past events New member orientation

THE BAY AREA’S MOST DYNAMIC INVESTORS ASSOCIATION 18 REI VOICE Oct. - Nov. 2011

Plu s

Predictable 9% Monthly Cash Flow 50% Equity Interest!

A Win For You Our system offers Investors capital preservation, immediate 9% monthly interest payments, return of initial investment and a full 50% share of equity at the end of the investment cycle. Investments can be made through a self-directed IRA, 401k or personal check. The investment is secured and puts you in the driver’s seat to be more powerful than the bank! Closing occurs quickly. Your only job during the investment term is to sit back, relax and watch your investment grow.

Truly Hassle Free!

True Wholesale Houses, LLC is for individuals who want to put their money to work in a secure real estate investment that reaps great rewards regardless of your real estate experience or knowledge. The genesis of True Wholesale Houses is taken from a deep understanding of cash flow investment properties and what it takes for the passive investor to succeed. The Investor that chooses to invest with True Wholesale Houses enjoys a predictable 9% monthly cash flow and instant equity.

Call today 888-285-1900 www.TrueWholesaleHouses.com

Oct. - Nov. 2011 REI VOICE

19

FE AT U R E

20 REI VOICE Oct. - Nov. 2011

Questions to Ask Before You Look for a Lawyer

By Jeffrey B. Hare

Jeffrey B. Hare, Attorney at Law, provides outcomeoriented legal services to real estate investors, commercial and residential property owners, and real estate developers. As a real estate attorney with over 25 years experience in ral estate and business transactions, Mr. Hare provides his clients with a practical, cost-effective approach to solving complex legal issues, including due diligence, contract review, and negotiations. He also has extensive experience with entity formations (LLCs, etc.), and is very familiar with the use of self-directed IRAs for alternative investments such as real estate.

Finding the right lawyer can take some time and effort. Even more important is learning how to effectively use that lawyer as a member of your team. You need to know what role you want the lawyer to play in your overall strategy. Like doctors and other professionals, lawyers have different skills and specialties. Matching the right lawyer to the task requires that you have a good understanding of your objectives and your business plan.

The key is to start early. It’s not costeffective to wait until the situation is desperate. The best use of your legal dollar is spent avoiding legal problems. In any case, if you need or want legal assistance, start by asking yourself the following questions: Why should I look for a lawyer now?

Are you planning ahead or reacting to a legal problem? If you are just getting started in a business or real estate transaction, a lawyer should be able to help you spot potential problems and provide useful guidance. If you have been sued or recently experienced a breakdown in a business transaction, you need an attorney who can help you review your options, and if necessary, take legal action on your behalf.

Chances are that an experienced lawyer has handled situations like yours and can help you find a cost-effective solution – but not if you wait too long.

Do you have a business problem or a legal problem?

Many disputes arising from real estate transactions involve primarily business issues rather than legal issues. It makes no sense to spend $100,000 in legal fees to resolve a $5,000 contract dispute, yet it happens all the time! You are entitled to a resolution based on your legal rights, fairness and equity. Your lawyer cannot make business decisions for you, but a lawyer who is familiar with your business model and has experience in business and real estate transactions can provide valuable legal advice to help you make a cost-effective business decision. A cost-effective decision is one that resolves the dispute in a manner that is fair to you, and not designed to drive up legal costs. Find out if your lawyer is familiar with your business model, understands business and real estate transactions, and has experience as an investor.

How can a lawyer help me protect my personal assets?

An experienced lawyer can help you protect your assets by advising you on the proper legal entity for your purposes. Don’t get hoodwinked into spending tens of thousands of dollars on complex “asset protection” schemes that make rich dad richer and you poorer. A good business lawyer can help tailor a common-sense strategy that combines the right legal entity

(such as a LLC), written contracts, and other risk avoidance strategies to provide you with an appropriate level of protection for your situation.

Most of all, a lawyer experienced in working with investors can help you identify and assess the risks associated with your particular investment strategy or business model, and help you to minimize your exposure to those risks.

What kind of lawyer should I have on my team?

A typical real estate transaction involves a range of legal issues in the areas of real estate, land use, business transactions, financing, and contracts, as well as the ability to deal with a range of different personalities. You need a lawyer who has both knowledge and experience in the required legal fields who is a good team player, but who will work hard to represent your interests. You need someone who appreciates the benefit of making the deal happen – while making sure your interests are protected. You need a lawyer who can provide you with relevant legal advice so you can make an informed decision to manage your risk. Finally, you need a lawyer who will stay focused on your objectives, and who will work well with other members of your team so that you can achieve your goals.

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

Oct. - Nov. 2011 REI VOICE

21

FE AT U R E

SELECT AN ACTIVE TEAM FOR YOUR PASSIVE INVESTMENTS

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 Turnkey Cash Flow Investment properties, Fix and Flip properties, and Bulk lists.

Do you consider yourself the Lone Ranger, the Conqueror, the Hero? If so, may I suggest you avoid real estate investing! I am not trying to be harsh, I am just trying to make a point.

Real estate investing is a contact sport. You need to contact sellers, buyers, realtors, attorneys, accountants, renters, property managers, escrow agents, contractors and handymen, maintenance people and the list goes on. If you don’t have a winning team, you aren’t going to win. Why would you play a game if you didn’t intend to win?

I want to share with you the four key “E” traits you should look for in a team you want to work with when you are buying “Turnkey” or “Passive Cash Flow” properties.

Experience. When you are talking with a company that sells turnkey properties, find out about the depth and breadth of their real estate background. You want to hear that they worked in other kinds of real estate, have invested in other markets than the current market, and that they have extensive rehab experience.

Experience is wisdom that is not wasted. A company that only has recent experience, or is only focused in one market, or does not have enough construction background, may not be the resource you need if something goes wrong. Planning for success is easy; it is preparing for the pitfalls that is vital.

Expert. You want to know that the people selling you a turnkey property are experts plain and simple. How do you know? Listen to the stories they tell you. If you only hear about their successful investments, they have not been in the

22 REI VOICE Oct. - Nov. 2011

game long enough. Anyone who has been investing for any period of time has war stories. The question is how did they turn those battles around. If they survived and learned from the experience—they are experts!

Ethical and Enjoyable. Investing you money into a property is a relationship that should last beyond the closing period. As I always say, time is the only resource you can’t replace. Invest your time in a relationship with a team that you enjoy and is ethical. Trust your gut! Don’t over reason it and don’t talk yourself out of your first impression. Second, if you gut tells you that this is a great

company to work with, then confirm it with references. Ronald Reagan said it best, “Trust, but Verify.”

“E”ccessible. Nothing is more frustrating that needing an answer about your investment and then getting put into a voicemail queue, being transferred, transferred again, and still not get an answer to your question. When you have a question, you should be able to reach the team you are working with. If you don’t reach someone immediately, it’s fair to expect a response the same day. Additionally, you’ll want to meet with the team so you can work through your goals face-to-face. It may be impor-

tant for you to work with a company that is within driving distance, while realizing they have remote staff on the ground taking care of your property.

As you evaluate turnkey investment companies, ask yourself if they possess all of the following traits: Experience, Expert, Ethical and Enjoyable, and “E”cessible. If they do, you’ve found yourself a winner. Get in the game! Don’t let the clock run out before you make a move. Remember, time can’t be replaced and there is no better time to act than now.

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

THE CREDIT RESTORATION EXPERT

HANNAH FLIEGEL FICO Pro

The current economy has left investors reeling – Hannah has the expertise to assist with increasing your credit score.

PRE-PAID CREDIT CARD $29.95 Discount for SJREI members $399.00 for credit repair program.

Protect your credit profile with LifeLock for $99 per year.

CALL FOR DETAILS

415-999-9348

BEGIN REBUILDING YOUR CREDIT RATING AFTER BANKRUPTCY TODAY! www.HowDoYouScore.com • Hannah@Marinreia.com

Oct. - Nov. 2011 REI VOICE

23

FE AT U R E

WHY AN INVESTOR BROKER/AGENT MAY MAKE ALL THE DIFFERENCE

By Stuart Baeriswyl

B

uilding a team is an important component of any investment or business strategy.

Think about it, he who knows the right people gets the job done quickly, efficiently and seamlessly. In terms of finding opportunities to invest in real estate an investor-oriented broker or agent, often an investor themselves, brings several important things to the table.

1. They understand what investors are looking for: a solid investment that yields a good return, and how to evaluate a deal from that perspective.

2. They study their markets, constantly screening their areas for properties that make sense.

They deeply understand their

24 REI VOICE Oct. - Nov. 2011

markets and the dynamics involved.

3. They look for specific data points critical to investors: location, school district, price per square foot, rental and occupancy rates, and more.

4. They physically visit properties to determine condition and the condition neighboring properties that may affect value, thereby saving their investor client’s precious time. Essentially, an investor-oriented broker or agent does all the legwork—an important benefit for the busy professional this is very significant.

5. Investor brokers and agents have the resources (their own trusted team) to get the job done. They have relationships with financing partners who are

on top of the latest loans for investors, and who can pre-qualify potential clients to ensure that they fit the criteria and eliminate road blocks before they occur.

They know the best property managers. They drive business to their business alliance partners where relationships are strong and enduring. They are part of a team effort— when one is successful they all are, and this makes their work easier and outcomes more predictable for you.

As an investor, leverage your broker’s and agent’s connections and remember they are motivated to help you be effective and create win/win situations. Value their time and effort and you will be successful.

Contact Stuart Baeriswyl at 408-373-6766 Stuart@CSRteam.com

Stuart Baeriswyl is the investor’s broker. As a seasoned investor in Northern, California, he intimately understands the market and understands the property profiles that are most interesting to investors. Mr. Baeriswyl is a licensed real estate broker with CSR Real Estate Services. He offers professional services for investors and homeowners, conventional and private money loans, and business broker services.

» 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

Let Stuart Baeriswyl be your all-purpose Real Estate Broker.

in

You Tube

EMAIL: stuart@CSRteam.com

f

+

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

Oct. - Nov. 2011 REI VOICE

25

FE AT U R E

26 REI VOICE Oct. - Nov. 2011

Managing a Winning Team Effectively

By Susan Hare Real estate investors are a little like record producers. They have a money making goal in mind and find a band that fits the bill. They bring in the experts: stylists, back-up singers, sound technicians, and others to help with production. When everything works according to plan, they have a hit.

However, if the band is a stinker, if the property you purchased is a stinker, then you’re in trouble from the start.

But when it’s not, when you have a potential money maker in hand, how do you manage your team of experts to produce success?

Realize you are not the center of the universe

Your attorney, broker, contractor, accountant, and other members of your team all have other clients and other concerns. “But I’m paying them,” you shout. Other people are paying them as well, and those other people may have an emergency that just can’t wait. Treat a team of independent consultants like hourly wage employees and you’ll get what you pay for and only what you pay for. However, treat them like the busy professionals they are and they’ll share valuable insight and expertise beyond asking.

Make yourself the center of the universe

Whatever you call them (contractors, independent consultants, consulting professionals, vendors), good teamwork starts with relationships.

Without relationship, the people on your team won’t care what universe you’re in. They’ll do their job, collect

their check, and move on to the next paying client. Relationships take time, which is always in short supply, so start with respect, which ought to be abundant.

Or you might walk in … And find out I’m gone –Aretha Franklin At the time you engage a team member, show your respect by explaining your business model and goals. Clearly articulate where you see that person fitting in and what your expectations are. Then ask about their business model. Discover how working with you can help them reach their goals. For example, you hire a well recommended home stager named Bobby. At first surprised that you asked about her personal goals, Bobby opens up and tells you that she wants to be an interior designer. You have now established a respectful relationship with your new team member.

Let’s build on it. Ensure Bobby that she can use photos of your staged properties for her portfolio and offer to help her in any way you can. What kind of service do you think you’ll get from Bobby? Excellent, of course because she’s a professional. However, since she understands your business model, she may introduce you to someone selling a property that is perfect for your portfolio.

As you move further in to your working relationship, respect your team’s time. Don’t expect them to drop everything just because you called. In fact when you pick up the phone, avoid launching into the reason for your call.

Instead, ask, “have I reached you at a good time?” or “do you have a moment to speak?” This small courtesy has numerous benefits. First, it shows that

you respect your team member’s time.

Second, you waste your time when you talk with someone not fully engaged in the conversation. It is far better to wait until your contractor or consultant is mentally available to address your situation than to push for attention that may be already stretched thin.

Speaking of time, be clear about your timelines and let everyone on your team know when your timelines change.

There are some people who mistakenly believe that their every idea requires an emergency response. Yet, your team members are quick learners. As soon as they realize that everything with you is an emergency, they’ll behave as if nothing is an emergency. Avoid the “cry wolf” syndrome by prioritizing your requests and share those priorities. If everything on your list is #1, then solve your organizational problems before you disenfranchise your team.

Good managers listen. This is as true when dealing with full-time staff as with a team of professionals. If you can’t respect the opinions of the people you’ve surrounded yourself with, then you’re surrounded by the wrong people. Listen to what your rehab contractor has to say. When he tells you that the subfloor needs replacement, replace it. When your attorney says, “that contract might open you up to liability,” believe her. Then go further and ask your team, what have I missed? Really listen to the answers, they just may surprise you. When they do, you’ll know you have built a respectful, working relationship that goes beyond a paycheck.

As principal of Susan Hare Marketing, Ms. Hare puts her 25 years of experience as a marketing and business strategist to work for her clients.

A graduate of Santa Clara University, she has worked with numerous technology and software companies in Silicon Valley.

Her consulting firm focuses on bringing big business methodologies to small businesses and professionals.

Ms. Hare is also a real estate investor.

Contact Susan Hare at 408-391-8068 Susan@SusanHareMarketing.com

Oct. - Nov. 2011 REI VOICE

27

Dr. Joshua Ben

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

408.340.5055

HELP REAL ESTATE INVESTORS HEAR YOUR VOICE — ADVERTISE IN REI VOICE MAGAZINE TODAY

100percentchiropractic.com

100% First Experience

$100 * Initial Discovery (Exam, Consult and X-rays**) * Empowerment Session (includes recommendations) * 1st Life-Changing Adjustment ** X-rays full price of $79. If x-rays not needed then $21 for the First Experience

You’re Invited to Experience Life at 100%

Contact Meghan Koslowski Contact Meghan Ben

Join Our FREE Investor Network!

408-264-3198 Meghan@REIVoice.com Meghan@REIVoice.com

Wealth Real Estate

ww

w.r e

ivo ic

e.c

A Re

alty

411 Pu

blic

atio

n

Vol. 1 • No. 2 • 2011

om

Chris Gleason of

MMG Capital

Offers His Investors High Yields, Low Risk

LEVERAGE When Do You Grow?

When Do You Hold?

Take a Look Inside:

Cash-Flowing Rentals From Around the Nation with Tenants in Place!

No

ve m

be

r2

Tips for Success in 010

Business & Real Estate

Photograph by Sam Green

MA

‘BUILD

PLANNIN ’ • ESTATE UR TEAM ‘BUILD YO

YOUR TE AM’

• ESTA TE

BR

NA GIN

PLANNI

D S • BEHIN LIST SCAM G • REO

ON

=@E ]ifd8E: k_\ @8C @[\ C<J j f] JF FZk EJ fY\ i UC

GT

HE

MA

EN

RG

IN

OR

â&#x20AC;¢B

RIS

DR

AW

TC SW NG â&#x20AC;¢ RE AS O LIST ISD SCAMS H FLO â&#x20AC;¢ BEHI W S OM ND TON AT YO ES UR MOR F â&#x20AC;¢A ?

TGAGR SS E?OM RTGAGE E YOUR MO ES

TP

RO

TE

CT

ION

GA

MB

EX

ITS

PE

â&#x20AC;¢4

RIE

RE

AS

NC

ON

<]

28 REI VOICE Oct. - Nov. 2011

d

ST

E

O B U Y N @ 3 7 D OW = 71 3 1

Get Access to Pocket Deals Around the Country!

Learn About Investing Events in Your Area Chat LIVE with Investors in Our Network Also Post Your Blog, Photos and Videos to Share JOIN NOW AT:

http://realty411guide.ning.com

Investor Resources Accounting Michael Gray, CPA 408-918-3162 mgray@taxtrimmers.com realestateinvestingtax.com

B r o ke rag e / Agents CSR Real Estate Service Stuart Baeriswyl DRE License # 01807909 408-373-6766 stuart@csrteam.com customerservicereality.com

L egal S ervic es Chillag & Associates, P.C. Nancy A. Chillag 650-321-6796 nancy@chillag.com chillag.com Jeffrey B. Hare, APC 408-279-3555 jeffrey@jeffreyhare.com jeffreyhare.com

P roperty S ervic es

Michael Ryan & Associates Michael Ryan DRE License # 01090891 NMLS # 295351 408-986-1798 michael-ryan.com

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

Enro l l e d Agents

Real Estate Investments

Richard Smith & Associates Richard Smith 408-446-5551 rsmithtax@aol.com richardsmithtax.com

Equity Transitions Jeb T. Henley 831-419-4200 jebhenley@gmail.com equitytransitions.com

Insuran c e Brighton Financial Group Vernon Williams 408-931-6582 vwilliams@farmersagent.com farmersagent.com/vwilliams

IRA Entrust Administration Inc. Lamarr Baxter 916-509-7271 entrustcalifornia.com/oakland IRA Services Trust Company Michael McNair 650-593-2221

MemphisInvest.com Chris Clothier 877-773-9998 chris@memphisinvest.com memphisinvest.com Stonecrest Investments LLC Steve Freeman 408-557-0700 reo4sale.net  Summit Assets Group Lori Greymont 888-298-0652 lori@summitassetsgroup.com summitassetsgroup.com The Norris Group 951-780-5856 info@thenorrisgroup.com thenorrisgroup.com

Fort Worth

Dallas

True Wholesale Houses Jay Hinrichs 888-285-1900 jay@truewholesalehouses.com TrueWholesaleHouses.com Wilson Investment Properties Tom Wilson 408-867-1867 tomkwilson@earthlink.net tomwilsonproperties.com

Short Sales Nick of Time Results Team Natalie Knowlton 831-402-5107 natalie@calssp.com nickoftimeresultsteam.com

Training & Education Going Beyond Real Estate Les Isralow KDOW 1220 AM goingbeyondrealestate.com Wise Women Radio Lisa Moren-Bromma blogtalkradio.com/ wisewomeninvestor

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

Other Servi ces 100% Chiropractic Dr. Josh Ben 408-340-5055 100percentchiropractic.com Reach Returns Greg & Shauna Pinneo 206-550-4242 reachreturns.com Susan Hare Marketing Susan Hare 408-391-8068 susan@susanharemarketing.com susanharemarketing.com

WHO YOU GONNA CALL? Need a house inspection, repairs, or property management? Need help from a legal, accounting, banking, or marketing professional who understands real estate investments?

Ready to purchase investment property or performing notes? Make our advertisers and resources on page 29 your first call.

Oct. - Nov. 2011 REI VOICE

29

Ger’s Top 5

by Geraldine Barry

1

Principal , Chris Clothier from MemphisInvest.com has built a very successful business based on integrity and a customer service driven team. Read my interview with Chris to gain some knowledge from his thriving operation in Memphis.

2 3 4

Real Estate Broker , Stuart Baeriswyl shares his strategies for working with an investor’s broker/agent. As an investor himself he knows the drill.

When building your team keep the following in mind - don’t assume that busy professionals will talk to you at length for free - be mindful of their time.

Be prepared when meeting and talking with potential team members. Be clear, concise, and specific about what you need.

Organize your thoughts in advance and be prepared to articulate them succinctly when the opportunity presents itself.

5

Create a win/win situation. If agents, brokers, contractors, attorneys, accountants, and consultants assist you and you are impressed with their service, refer others to them.

Now go build your team!

Geraldine Barry is founder and president of SJREI Association the premier educational and networking association for real estate investors in the Bay area. 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.

SJREI won the Award for Excellence from the National REIA (Real Estate Investors Association) in several categories in 2010. As an avid investor herself, Geraldine has interviewed multiple real estate pros, many of whom have been guests of SJREI. In addition to leading SJREI, Geraldine is the frequent host of the radio program, Going Beyond Real Estate, a regular guest on the nationally broadcasted NTDTV, publisher of award winning publication REI Voice Magazine, and producer of the much acclaimed annual Bay Area Real Estate Expo. As a serial entrepreneur Geraldine is also a principal in Miles/Barry Contract Furniture serving corporations in the Silicon Valley. Additionally, she coaches business principals and CEO’s, guiding them in becoming more productive in less time in their leadership positions, helping them identify their core strengths, focusing on those to achieve their vision, and delegating effectively. Geraldine resides in Silicon Valley, and is the proud mother of Colin & Claire her two children.

30 REI VOICE Oct. - Nov. 2011

At Brighton Financial our goal is to provide you with the best service and most suitable financial and insurance products to satisfy your needs. We don’t “sell” anything.

Although we carry many different lines from major carriers, one of our specialties is real estate-related coverage. Policies such as: Umbrella, Landlord Packages, Vacant Property, Course-of-Construction, HOA, etc are our mainstay.

Vernon M. Williams Broker/Agent 4675 Stevens Creek Blvd., Suite 245 Santa Clara, CA 95051 Ph. (408)931 - 6582 Fx. (408)564 - 5405

• • • • •

vwilliams@thebrightonfinancial.com

Umbrella Landlord protection Apartments /HOA Personal Auto Contractors / Artisans

• • • • •

Health Business Workers Comp Home owner Renters

Brighton Financial & Insurance Services, LLC (408) 931-6582 • www.thebrightonfinancial.com

MILES/BARRY CONTRACT FURNITURE Workplace solutions to fit your business

MILES/BARRY CONTRACT FURNITURE is a full service independent furniture dealership providing quality, cost-effective interiors for businesses of all sizes.

We offer creative, flexible solutions tailored to individual space requirements, budget and aesthetic concerns.

MILES/BARRY CONTRACT FURNITURE’s experience in the industry brings you prompt, professional service for every aspect of your project. You will enjoy the care, accuracy and efficiency of working with just one contact.

PRODUCT SALES • Ergonomic Products • Workstations-New and Refurbished • Casegoods-Veneer & Laminate • Filing Systems • Conference Rooms • Lunch Rooms • Training Table

Call Barbara Miles at 650-359-5611

PROJECT SERVICES • Consultation and Project Phases • Design CAD Drawings • Installation • Reconfiguration • Affordable Pricing • Panel Cleaning • Leasing • Extensive Product Lines

bnmiles@milesbarryfurniture.com www.MilesBarryFurniture.com Oct. - Nov. 2011 REI VOICE

31

We are real estate investors closing hundreds of

transactions yearly with a nationwide client base. We offer long term wealth solutions with comprehensive services available, including licensed property management, structure, and rehab management. We also offer coaching, mentoring, and educational programs for our clients.

We have purchased over 1,000 properties since 2004 for our clients. We currently manage over 820 rental properties throughout the Memphis area for local and out-of-state-investors, of which 95% are single family homes. And we currently have a 95.07% occupancy rate.

Call today! Chris Clothier, Co-Owner, MemphisInvest.com

32 REI VOICE Oct. - Nov. 2011

·

Immediate Equity

·

Instant Positive Cash Flow

·

Tax Advantages

·

Income and Appreciation

·

Completely Passive Investing

·

Leverage-Equity Build Up

·

Undervalued Properties

·

Licensed Property Management Company