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February 2011
BEST INVESTMENT STRATEGIES FOR 2011 EXPERIENCED INVESTORS IDENTIFY KEYS TO SUCCESS
ELEVEN RESOLUTIONS FOR 2011 • FREE RENT: A ROBO-SIGNER LEGACY • MAKE YOUR OWN REAL ESTATE FORECAST Feb. 2011 REI VOICE
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
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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 Group’s trust deed investments earn 9% return backed E\ GLVFRXQWHG FDVK à RZLQJ &DOLIRUQLD real estate.
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SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
TABLE OF CONTENTS
Analysis
18
6
Real Estate Investment Strategies: Which One is Right for You?
Free Rent: A Robo-Signer Legacy The repercussions of the robo-signer debacle go beyond simply slowing down some foreclosures. Investor and hedge-fund insider Jon Freeman analyses the impact that the sloppy foreclosure processes of two years ago still exert on the lender-borrower relationship.
8 Make Your Own Real Estate Forecast Stuart Baeriswyl, real estate broker, shares his personal insights about marketing timing and why you are your best source of real estate data.
A dvice
10 11 Investment Resolutions for 2011 Real estate investor and attorney Jeffrey B. Hare provides eleven sensible resolutions that should be at the top of every investor’s list of things to do.
11 Top 10 Strategic Philosophies for Successful Investing Learn the surprising, yet simple philosophies gleaned from years experience. As author, investor Tom Wilson says, “Great lessons are often not complicated.”
A specialist in self-directed IRAs, Lamarr Baxter, explains the top four strategies employed by investors interested in diversifying their IRA portfolios.
Trends
12 Monopoly on Baltic Avenue As massive numbers of bank-owned properties hit the market, REO market authority Lori Greymont explains how investors can use REOs to quickly build a portfolio of cash-flowing properties.
14 For Future Trends, Look at Sales, Orders & Backlog Andrew Waite, publisher of Personal Real Estate Investor magazine, says forget the crystal ball and look at real data if you want to know what 2011 will bring.
B asics
16
19 Who Needs Asset Protection? Real estate assets can mean deep pockets to the unscrupulous. 30-year real estate investing veteran Dyches Boddiford discusses assets worth protecting.
21 Lending: Still Alive and Well in 2011 Lending expert Michael Ryan on why you should ignore the headlines and continue to enjoy low interest rates in 2011.
Features
22 What’s Old Is New Again for the New Year Social media expert, Aaron Norris, suggests a $5.95 investment that will have you saying “thanks.”
Home Selling Strategies for the Real Estate Investor The original Wise Woman Investor Lisa Moren Bromma breaks down home sales promotion into three specific strategies tuned for today’s market.
30 Ger’s Top 5 Resources
28
For the profitable real estate investor.
Feb. 2011 REI VOICE
P U B L I S H E R ’ S NOTE
WELCOME
REI Voice™ Magazine A publication of SJREI Assocation™
We are delighted to present another edition of REI Voice Magazine. You’ll find lots of great content and relevant, timely information for real estate investors. I am excited about 2011 and the opportunities it brings. Our goal at REI Voice and the SJREI Association is to deliver the latest and most sound information and data about the real estate market for investors. We share tips on how you, as an investor, can effectively navigate the market.
Publisher Geraldine Barry | 408-264-3198 Geraldine@SJREI.org 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
Geraldine Barry Publisher President of SJREI Association
REI VOICE Feb. 2011
For this issue of REI Voice, we asked our contributors to share their predictions or insights for real estate investing in 2011, or to share their keys to success. You’ll read a great selection of both. I hope you’ll take their valuable contributions to heart. For example, when Tom Wilson (30-years of successful investing) says “Don’t wait too long to buy or sell in hopes of hitting the exact top or bottom of a market.” I listen. How many investors are still waiting on the sideline for the market to hit rock bottom? When will we know the market bottomed out? Only after it goes back up—and then we’ve missed our opportunity! When Jon Freeman (25-years in real estate) says, “Until the courts begin making sensible decisions about delinquent borrowers, the foreclosure slowdown will negatively impact many more communities across the country.” I listen and look more closely at the communities in which I’m considering investments. When Lamarr Baxter (20-years in real estate), reminds me “that investing in small cap funds and large cap funds IS NOT diversification” I look again at my IRA for a source of capital for real estate investments. And when Lisa Bromma (35-
years in real estate) shares “home selling strategies for the real estate investor” I listen. And what advice do I give for 2011? (Aside from read REI Voice Magazine cover to cover and please patronize our advisors: Do not let fear keep you out of the market. Many investors were burned by real estate purchases that never made sense financially, and they paid the price. They are reluctant to take the plunge again. However, by not participating in the current market, you could miss the best buying opportunity that we have had in years. As the President of the SJREI Association, I talk to investors daily and hear their stories, good and bad: mistakes which could easily have been avoided simply by performing due diligence, staying close to the experts, running the deal by savvy investors and professionals, and taking their advice. Emotion should never be a driver in a real estate transaction—whether it is fear or exuberance. So, look at the numbers, learn from the experts, and take action! I know I am.
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.
Subscriptions The annual subscription to REI Voice Magazine is $29.95 for six issues mailed within the United States. To order a subscription, visit REIVoice. com/Subscribe. REI Voice Magazine c/o SJREI Association P.O. Box 90542, San Jose, CA 95109-3542 www.REIVoice.com
Geraldine Barry Publisher President of SJREI Association
Copyright © 2011 SJREI Association. All rights reserved.
“
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NTDTV has proven to be a valuable resource and pathway to the Chinese Community for the SJREI. It has been very beneficial to our organization to have access to this well educated, higher income, and growing demographic in the Bay Area.
NTD-TV, especially in today's difficult business environment, is a valuable and effective resource for connecting members of the local Chinese community and local businesses. These connections benefit everyone involved, as well as the economy in general. Additionally, it is always a pleasure to work with NTD-TV's professional and friendly staff. - Anthony
F. Earle, Esquire Earle Law Offices www.earlelaw.com
- Geraldine Barry President SJREI Association
www.sjrei.org
I was very impressed with the staff at NTDTV. With their help I was able to reach a segment of my market that would not have been available to me otherwise. I am looking forward to working with them in the future.
The only 24/7 Chinese TV Network Covering the Entire Bay Area with Multi-language Programming Comcast Basic Cable KMTP 32 Digital Channel 32.5 www.ntdtv.com www.StarP2P.com mobil.ntdtv.com 1010 Corporation Way, Palo Alto, CA 94303 Tel: 408-656-6155 Fax: 408-904-5545 Email: sf@ntdtv.com
- Richard Smith Richard Smith & Associates
http://richardsmithtax.com
A N A LYS I S
Free Rent:
REI VOICE Feb. 2011
A Robo-Signer Legacy By Jon Freeman
The repercussions of the robo-signer debacle go beyond simply slowing down some foreclosures. It has impacted the entire lender-borrower relationship and the mortgage lending system in ways that will be felt for years to come. First, some background. Setting the Stage.
Not So Quick to Forgive.
Banks and loan servicers (lenders) in an effort to push through thousands of foreclosures hired just about anyone and labeled them as “foreclosure experts.” Their job was to evaluate a loan that was in default and make certain that all the information in the borrower’s file was correct. They then signed affidavits to that fact. Attorneys for the lenders used this information to foreclose on properties. These foreclosure experts, now known as robo-signers, were signing hundreds of affidavits a day on different files: a quantity of files that would be physically impossible to actually review. Most of these signers had no idea what they were doing and just did as they were told by their superiors. In other words, lenders got sloppy and did not meet the letter of the law. In actuality, most of the information in the files was correct; the impacted borrowers were indeed delinquent. However, the courts sided with the borrowerplaintiffs and criticized the lenders for their sloppy practices. Most lenders subsequently and voluntarily stopped foreclosing on properties until internal reviews could be completed. In the meantime, all fifty attorneys general opened investigations into the robo-singer problem. The lenders have now finished their reviews and corrected the problems and/or re-affirmed that the information in their foreclosure files is correct. They hoped this mess was behind them and that foreclosures could proceed.
The reality is a very different story. Many borrowers are still challenging the legitimacy of their foreclosures. Defense lawyers are sharing strategies to hold up the foreclosure process—and succeeding. More troubling for the lenders is that many judges are siding with the borrowers and forcing lenders to restart the foreclosure process. That means new delinquent notices, new final notices, new public notices, new opportunities to appeal, and new piles of paperwork while the clock ticks to the inevitable foreclosure that should have happened the first go ‘round. I spoke to a prominent New York foreclosure attorney who stated that the average foreclosure in New York takes two years. Now, even though the lenders have re-affirmed that the loan paperwork is correct, judges are making them start the entire foreclosure process over from scratch. “In many cases,” he said, “this effectively means that many of these borrowers will be able to stay in their homes payment free for four years.” This attorney’s clients are the banks and hedge funds that own the loans, and they are not happy about having to sit on clearly non-performing loans. The foreclosure process in these judicial states is grinding to a halt. The lenders have been talking about suing the courts over what they consider to be an abuse of the court’s power. They believe that once the paperwork has been re-affirmed by a bona fide foreclosure expert, who read the entire file, the foreclosure should proceed. It should not have to start from scratch.
Interesting enough, the federal government, who thus far has bashed the lenders and let every borrower believe they were “owed” a modification, has not come out in favor of slowing down the foreclosure process. The government has apparently realized that the attorneys general and judges are going too far in trying to stop legitimate foreclosures. Enter Human Nature.
I believe this mess just pushes the housing crisis farther out in the future. How many upside down borrowers will decide to stop paying their mortgage if they can stay payment free for up to four years? I have always been concerned of hitting a tipping point where it is completely acceptable for a borrower to stop making payments. When foreclosure stops becoming a threat, and personal honor no longer binds one to repaying a debt, the foundation of the entire mortgage lending system is undermined. We have hit that tipping point in some communities already and are discovering the disastrous effects of making loan repayment seem optional. Until the courts begin making sensible decisions about delinquent borrowers, the foreclosure slow-down will negatively impact many more communities across the country. At its best, the legacy of the robo-signer debacle means that the housing rebound is a long way off. At its worst, it is creating a generation of over-entitled, untrustworthy, borrowers.
Jon Freeman, President of Stonecrest Financial, is an institutional buyer who deals with banks, hedge funds and bigger institutions buying bulk REO’s. Additionally, he is a turnaround manager for funds that have gotten in trouble financially. He takes them over and assists with liquidating the real estate within the fund where appropriate, and tries to mitigate the damage caused by inappropriate purchases within funds, and stabilize them financially.
Contact Jon Freeman at jfreeman@stonecrest.net
Feb. 2011 REI VOICE
A N A LYS I S
Make Your Own Real Estate Forecast By Stuart Baeriswyl
As an Investor himself, Stuart Baeriswyl of CSR Real Estate Services, makes good use of his understanding of the various Bay Area markets to help other real estate Investors locate and purchase solid cash flowing rental properties. Stuart has been providing his professional services for many types of buyers and sellers, translating his unique skill-sets into helping even regular home buyers and sellers complete their personal residential property goals. Stuart and Geraldine Barry have two lovely children, Colin & Claire. Stuart Baeriswyl also is a Meteorologist
With the exception of certain Realtor associations and many Real Estate Agents - I cannot think of any noteworthy persons or organizations who believes, and has plainly stated, that the real estate market in California has bottomed out and/or is now set to improve significantly. As a reader: What do you think? How do you see the real estate market behaving in the next, say, three to five years? If you are an investor, you almost certainly have been tracking the market and have an opinion. So, where do you think property values are going? And, where are you getting your information from? In 2002-03, when I first began to purchase investment property, I (unbelievably) only had the vaguest notion of where the future value of my investments were heading. Actually, as I look back, all I knew was that property prices were moving up. I thought that this is how real estate worked: you find a unit that cash flows and then you just expect it to appreciate in value, as I had heard, a steady 8% per year. Unlike the weather, real estate seemed reliable and consistent. My main source of information or education on the subject of real estate investing, the Carleton Sheets course: How to Buy your First Home or Investment Property with No Down Payment, actually did a wonderful job of getting me started in locating, evaluating, and managing property. However, that course never, ever spoke to the subject of market timing. Regardless, I did quite well in pur-
REI VOICE Feb. 2011
chasing my first two investment properties, small multi-units in Stockton. However, I shudder to think what would have happened if I failed to see that the market was about to change and I held on to those small apartments. While I owned them, I do remember the wonderful feeling of seeing my property values increase at an astonishing rate of about 30% annually. I recall thinking, when I wasn’t too absorbed with handling property management issues, how great this was and that the worst that could happen in the Stockton market was that prices would just stop increasing at some point – sort of just level off.
If it was not for a very timely forecast given by SJREI guest speaker, Bruce Norris of the Norris Group, I am certain that I would currently be the unhappy owner of two underperforming and management intensive assets. Not only was a very bad scenario averted, but I made tremendous profits by selling when I did. We all know the real estate mantras: “location, location, location,” “never over pay,” “don’t buy in a bad neighborhood,” “never over leverage,” etc. . . . To these I add one more: timing, timing, timing. The real estate climate we presently find ourselves in is certainly different than that of five and ten
years ago. If you are like me, you are very interested in knowing if certain markets have hit bottom. Perhaps we are at the bottom and prices have leveled off, or perhaps prices will continue to decline. So, please, make your own, personal real estate market forecast – and then track it and make adjustments as you gather more information from people and sources you trust. Nothing but good can happen if we are vigilant and pay very close attention to the always changing nature of the real estate market. Contact Stuart Baeriswyl at 408-373-6766 stuart@csrteam.com
Brighton Financial & Insurance Services, LLC (408) 931-6582
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.
Brighton Financial and Insurance Services 4675 Stevens Creek Blvd., Suite 245 Santa Clara, CA 95051 Ph. (408)931 - 6582 Fx. (408)564 - 5405 vwilliams@brighton-financial.com
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. • • • • •
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SOUND OPINION—WISE DECISIONS: VOICE OF THE PROFITABLE REAL ESTATE INVESTOR
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 28 your first call.
Feb. 2011 REI VOICE
ADV I C E
11 Investment Resolutions By Jeffrey B. Hare
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 an land-use attorney and real estate investor, Mr. Hare provides clients with a pragmatic but thorough approach to due diligence, contract review, and negotiations.
Do you want 2011 to be better than 2010? Here are 11 resolutions to make it happen!
9.
1.
Set Goals. Make them realistic, but stretch yourself. Without measurable, achievable goals, you’re more likely to spin your wheels. Write them down. Put them in your wallet or purse – where you can review them regularly. Make a Plan. How are you going to reach your goals? If you don’t know, you’ll get lost quickly. You may have to adjust your plan later on, but without a place to start, you won’t get very far. Simple plans work the best. Example: Liquidate nonperforming assets; determine amount of available funds, evaluate all possible options within range, narrow choices and make an investment decision. Set timelines so you stay on course. Get Educated. Even experienced investors need to learn. There are new laws, new markets, and new opportunities. Join a local real estate investment association in your area, like SJREI. Listen and learn. Read books, attend seminars and workshops. Be careful to distinguish between education and sales pitches. Important: Become educated about the range of possibilities, but focus on the investment opportunities that fit your Plan. Get Help from Professionals. A paid consul-
2.
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10 REI VOICE Feb. 2011
work to eliminate them. A common obstacle for many new investors is a lack of confidence, which often leads to a desire for excessive amounts of data. The term for this is “analysis paralysis.” Learn to recognize that data is a moving target – always changing – at some point you have to pull the trigger. Diversify. It’s foolish to put all of your eggs into one basket, but investors do it all the time. Set aside some of your funds in different types of investments. Resist the urge to chase investments – and keep an eye on all of them. Be smart, be careful, and be alert to new opportunities. Get & Stay Fit. Planning for the future doesn’t make sense if you don’t have one, or if you aren’t healthy enough to enjoy it. It’s well-established that if you are eating right, exercising and getting sufficient rest, you’ll make better decisions. I know I do! A healthy lifestyle must be a fundamental part of your plan. Invest in the Future. Volunteer with your church, community group, or local youth program. Make a difference in the life of a young person and help your neighborhood and your community. Donating your talent and time is a tremendous investment in the future. The return will yield greater rewards than all of your other investments combined, not just for your community, but for yourself and your family!
tation with a tax specialist, financial planner, or an attorney may cost you a few hundred dollars to begin with, but could save you thousands. Clients always ask me how they can keep their legal costs down. It’s simple – ask me for help before you jump, not after you leap. Attorneys, CPAs, and other investment professionals want you to be successful: don’t wait ‘til it’s too late. It’s always more expensive to repair the damage after it’s happened! Time Management. Time is a finite resource, so don’t waste yours or anyone else’s. Learn to prioritize, delegate, and bank time in your work life so you can spend time HAVING a life. Develop a way to measure your productivity, such as tracking time on different projects, and make adjustments. Find a way to schedule time for fun, relaxation and exercise. Protect your Assets. Successful investors take a common sense approach
5.
6.
to protect their assets. Good property management, adequate insurance, and using the appropriate business entity are the three most practical steps towards asset protection. Don’t get sucked into paying for elaborate schemes that cost thousands of dollars. These schemes are not only expensive, but they’re often unnecessary and ineffective. Consult with an attorney who understands real estate and business investing before you get started. Situational Awareness. Knowing where you are in relation to the current investment environment is critical to your success. It’s a good time to take a look around and see what’s changed, and adjust accordingly. Periodically, check your goals – evaluate your Plan. What’s different? What’s new? Has your cheese moved? Identify and Tackle Obstacles. What is preventing you from making progress toward your goals? Identify the obstacles, then
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Contact Jeffrey B. Hare at 408-279-3555 Jeff@jeffreyhare.com
Top 10
Strategic Philosophies for Successful Investing By Tom Wilson
Tom Wilson has been investing in real estate since the 70’s. He first invested as a parttime activity, and then after thirty years with some of Silicon Valley’s pioneering technology companies, Tom put his business and management experience toward fulltime real estate investing. Wilson Investment Properties offers high cash-flow, fully-leased investment properties.
ing to and managing teams of experts.
Every day I learn something new in business that helps my continued growth— even after thirty years of managing high tech companies and thirty four years of real estate investing. Probably the most valuable lessons that I have learned have come from failures. Fortunately, I’ve had more successes than failures and I’ve learned a lot from them too. Here are several of the fundamental lessons that I’ve learned the expensive way, both in the corporate world as well as with real estate investing. Don’t
Be
Too
Greedy.
Don’t wait too long to buy or sell in hopes of hitting the exact top or bottom of a market. The great grandson of the Rothschild dynasty was once asked in an interview what he most attributed to his family’s great wealth. He replied, “by selling too soon.” Use and Don’t Underestimate Your Generalist Skills. Many
investors have managed staff and profit centers and/or have been in sales. Experience with these skill sets is very valuable in any business, product or service, is largely transferrable, and real estate investing is no exception. Make sure you tap on these skills when you are managing your team and your new investment business. Be an Investor and Business Person, not a Worker. Sweat equity earns respect, and helps
you to understand how to manage the experts, but it is not the best use of your time in the long run, and will limit your growth. Manage your managers instead. Secure an Experienced Team and Delegate. Yes you need to understand your busi-
ness, but it is not practical to do it all yourself. I think this is one of the biggest mistakes of novices. Leverage yourself by finding experts whom you trust and respect, make sure they understand your goals and rules, and delegate responsibility and accountability to them. Set up metrics and monitor results carefully, but do not micromanage. I could not have begun to accomplish what I have done without delegat-
Don’t Get Too Much On Your Plate at One Time. Diversity has merit, but not if it keeps
you from focusing on a core business, product, or region, and doing all you can to maximize its success. Be a Contrarian. If everybody is doing it, beware. And if it sounds too good to be true, it probably is. Don’t follow the sheep. My dad taught me when I was very young to buy my bathing suit in the winter and my fur coat in the summer. He was so right. Double Check the Experts. Many national experts for example predicted that the real estate bubble was not serious and that we were not likely to have a crash. Everyone wanted to believe it. You need to collect data from multiple sources, and in the end, make your own decision. Watch Local Markets and Trends Carefully.
Most of the data that is available for economic history, predictions, and business cycles are for global cities, states, and countries. This is valuable information, but there is no substitute for researching the specific product type and local region for your investment. There are amazing differences between submarkets and you should not assume that locally is going to perform the same as globally. In fact, you should assume that it will not, then work to understand why local performance differs and by how much. Learn From Your Mistakes. When we fail, we are hurt, embarrassed, and disappointed in ourselves. Why didn’t I know this would not be successful? The natural human tendency is to run and forget. But don’t. Right in front of you are valuable lessons that can increase your success rate going forward. Stop, review and analyze the failed project, bounce it off of your mentors, and make sure you take away from it some valuable new principles and lessons. Great Lessons are Often Not Complicated.
In your effort to decipher the nuances of critical secrets, don’t miss the obvious. Conrad Hilton was once asked what was the most valuable thing he had learned in building the world’s first great hotel chain. He replied, “To keep the shower curtain inside the tub!” Contact Tom Wilson at 408-867-1867 tomkwilson@earthlink.net
Feb. 2011 REI VOICE
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T R E NDS
Monopoly on Baltic 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 bulk REOs. Her company sells bulk lists and seasoned land contracts.
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Remember playing Monopoly and saving up to buy the fourth house so that you could build a hotel to double your rent? What if you had the opportunity in real life to purchase ten properties at once and start collecting rent from all of them? Massive numbers of bankowned properties are hitting the market giving wise investors the opportunity to make just this kind of bulk purchase (aka bulk REOs). Last year, banks sold hundreds of thousands of properties.This trend will continue through 2011 as a record number of properties continue to be foreclosed upon and the cost of entry remains low. How low? You can get in the game for as little as $50,000 for a small portfolio of cash-flowing properties or as little as $100,000 for ten or more properties ready to be turned into cash-flowing, wealth-building engines. These homes are not in the high rent Park Places of the world, but in the working class Baltic Avenue-type neighborhoods – giving investors the ability to buy ten homes for the price of one or two. The first premise of this business model capitalizes on the large underserved market of working class people who earn enough to cover rent, but cannot qualify or save enough to buy a house (see “Why Good Folks Can’t Get Loans”). Working class people are willing to buy houses and are willing to make repairs—at the right price.That price is equivalent to rent. It makes sense. Let’s say the average rent in an area is $450.Offer a working person a privately financed home for $450 or less per month and they’ll take the deal. And they’ll make the payments because they already have a history of making rental payments. These loans are designed to succeed, not doomed to fail.
Nick of Time Results Team
altic Avenue The second premise of this business modelis that it provides a healthy cash flow with interest rates around 9.5% and an average term of 15 years. Purchasing bulk REOs give investors the opportunity to put these portfolio building strategies into action. An active investor will purchase 10+ houses and then resell them to owner-occupants with seller financing (also called land contracts, contracts for deed, or installment contracts). The investor’s name remains on the deed for the term of the agreement while the owner-occupant makes monthly payments.The owner-occupant also has full responsibility for taxes, repairs, and upkeep of the property. At the end of the term (15 to 20 years) the deed is transferred to the owner-occupant. Meanwhile the investor makes a significant return on the initial investment. For Example: Bulk purchase price $12,000 (one house) Sale price $37,000 Down payment $1,000 Financed price $36,000 (15-year, 9.5% interest) Amortized over 15 years $67,500 Less purchase price -12,000 Return on investment $55,500
Passive investors who want access to the great returns, but don’t want to set up a business to sell houses to individuals, may buy into the business.They purchase the land contracts and the underlying properties from active investors who are looking for cash. These contracts are sold at a discount, which offers even more upside for the passive investor. For example, a 15-year, 9.5% interest contract with a face value of $36,000, bringing in $375/month, can be had for $26,500.Over its term, the contract will bring in $67,500; that is a 40% return on investment.
W hy Goo d Folks Can ’t Get Loans
Stressed? Trapped? Not sleeping?
1. Banks don’t make loans for less than $60,000.The value of most of bank-owned homes is $50,000 or less. Without private financing, these houses will continue to sit vacant. 2. Many low-income families struggle to keep a good credit score. Banks don’t like this.The savvy private investor knows that credit scores do not predict the ability of a person to pay a mortgage.The monthly payment is the predictor: right-priced loans get repaid. Buyer Beware
The bulk REO market is an exciting and fast-paced business, but as with any potentially high return investment, there are many charlatans.The internet is full of web sites purporting to sell bulk REO lists; however, some of these lists are fraudulent, and others contain truly unsellable properties—burned out shells, vacant lots, and uninhabitable mobile homes. In order to navigate this challenging marketplace, trusted mentorship from a reputable list broker is imperative. Do your diligence. Ask for references. A reputable company will happily provide more than five references from non-relatives! Find out about postsale support and get it in writing. Ask about fees. Some companies hide their fees, others offer full disclosure, but all companies charge fees. Finally, take the plunge. The market for severely undervalued homes will dry up. Will you be the person with an income producing portfolio to see you through your golden years? Or will you be the person saying, “If only….” Contact Lori Greymont at 888-440-6826 Lori@SummitAssetsGroup.com
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Feb. 2011 REI VOICE
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T R E NDS
For Futur Look At Sales, O By Andrew Waite
Andrew Waite is publisher of Personal Real Estate Investor Magazine, America’s best selling real estate investment magazine since 2003. We present the Investor Provider Leadership Summits, publish the annual Top 50 Real Estate Investment Opinion Makers & Market Leaders (due May 2011,) Where to Live Books and National Real Estate Investor Association Annual Opportunity, Action & Resource Guide.
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Crystal balls are in short supply for investors trying to understand the future of real estate opportunities. There are indicators that suggest where local real estate markets may be headed although the real estate industry seems ignorant of these. When a securities analyst looks for the future value of a company stock, they look at what customers are buying from the company and at what rate. The current orders and a company’s ability to deliver predict future cash flow. Profit and equity assumptions are made to suggest future stock value. The nearest equivalent in residential real estate is tracking “for sale” inventory to local market expansion or absorption trends can be predicted. Personal Real Estate Investor Magazine uses Marketopoly data to develop trends of available homes on local multiple listing systems. The MLS represents a solid 65% sample of available inventory. Properties in shadow inventory are inherent in this number as ultimately these show up when sold so this affects standing inventory totals. The months’ supply number is derived from the count of available homes (not shown here), divided by
the number of sales made in the most recent month to determine how long (in months) it will take to sell that inventory down to zero. This assumes no other homes are added to the for sale inventory. The reality is new homes are added for sale. Unless the inventory sell rate expands rapidly the month’s supply number indicates an expanding or contracting supply. This shows a growing or shrinking demand and the effect this will have on future value and pricing. Unsurprisingly more supply means less demand and stagnant or deflating prices, while a contracting supply means more pressure and rising prices. This chart shows three months moving number for six cities in the four major real estate markets. This year compared to last year data is also compared. This data is available for every MLS in the U.S. by going to www.PersonalRealEstateInvestorMag.com – click on Market Data and Marketopoly website. The magic is then to take this geographic data and further analyze it by price point to determine appreciation in specific investment grade properties. The media are our friends as they ignore this level of data and with their gloomy reporting reduce competition from retail owner buyers.
re Trends, Orders & Backlog Data through November 2010 % CHANGE MONTH OVER MONTH
% CHANGE YEAR OVER YEAR
2010 NOV MONTHâ&#x20AC;&#x2122;S SUPPLY
2010 OCT OF ACTIVE
2010 SEP PROPERTIES
2009 NOV
Baltimore, MD
4.31%
29.40%
10.65
10.21
9.65
8.23
Boston, MA
2.37%
17.42%
5.19
5.07
4.92
4.42
Manhattan, NY
1.42%
19.29%
5.01
4.94
4.79
4.20
Philadelphia, PA
3.99%
36.70%
7.30
7.02
6.60
5.34
Rochester, NY
2.94%
25.50%
5.61
5.45
5.17
4.47
Washington, DC
1.17%
6.67%
4.32
4.27
4.16
4.05
7.63%
29.39%
9.73
9.04
8.55
7.52
Dallas, TX
6.50%
32.85%
9.18
8.62
8.29
6.91
Detroit, MI
11.03%
38.12%
8.66
7.80
7.08
6.27
Houston, TX
6.29%
34.72%
8.11
7.63
7.33
6.02
Indianapolis, IN
10.57%
35.76%
10.25
9.27
8.68
7.55
Oklahoma City, OK
5.94%
23.70%
6.42
6.06
5.84
5.19
CITY Northeast
Midwest Chicago, IL
South Atlanta, GA
3.53%
9.26%
11.44
11.05
10.43
10.47
Baton Rouge, LA
1.93%
19.90%
7.41
7.27
7.07
6.18
Birmingham, AL
13.80%
22.59%
12.70
11.16
10.54
10.36
Charlotte, NC
2.68%
16.11%
7.28
7.09
6.91
6.27
Jacksonville, FL
1.93%
3.13%
7.92
7.77
7.62
7.68
Miami, FL
2.99%
-13.83%
8.97
8.71
8.58
10.41
Denver, CO
2.13%
10.25%
5.27
5.16
5.06
4.78
Las Vegas, NV
3.88%
58.89%
4.02
3.87
3.68
2.53
Los Angeles, CA
1.04%
32.25%
4.88
4.83
4.72
3.69
Phoenix, AZ
4.78%
59.49%
5.04
4.81
4.55
3.16
San Diego, CA
1.43%
30.41%
2.83
2.79
2.74
2.17
Seattle, WA
2.29%
8.15%
4.91
4.80
4.73
4.54
West
Feb. 2011 REI VOICE
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B AS I C S
Home Selling Strategies for the Real Estate Investor By Lisa Moren
Lisa Moren is the author of Promote Your Note Business, a marketing program for the private mortgage industry, Soup to Nuts, a CD ROM series on everything you need to know to become a successful real estate investor, as well as Real Estate Investing for The Utterly Confused and Wise Women in Real Estate. Her new
With the sheer number of foreclosures in the marketplace, how does an investor compete? How can you sell real estate at a competitive price? How can you find the buyers and get the deal closed in today’s tough environment? It all starts with how the property is being marketed. Consider these three strategies when reselling your investment property.
buyers such as Zillow.com and Craigslist.org. d. Use Facebook, Twitter, and friends to help spread the word.
1. Use technology.
2. Eliminate Obstacles.
Does your real estate agent (or you, if this is a for-sale-byowner) post pictures and property information online? a. Setup a website with the property address as the domain name. b. Have a virtual tour or pictures for review c. Promote the property on sites frequented by prospective
Have the property inspected by a licensed home inspector and make copies of the report available to serious prospective buyers. Spend the few hundred dollars it takes to get the property inspected. It saves time in the closing process to already have the property inspected. Since the buyer does not have to pay the cost of inspection, it
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eliminates a potential contingency clause (subject to an inspection) from the contract. 3. Set a realistic price.
When setting your price, use real comps of property sold from the past 60 days only. Include short sales and foreclosure real estate. Homes priced too high won’t sell in this market. If you want to use a real estate agent, hire someone who is experienced and has the reputation for pushing property. I can write volumes on this subject. The old adage “you make
money when you buy” is especially true if you were fortunate enough to take advantage of today’s real estate crisis and controlled what you acquired. There are other negotiation points you could consider such as picking up some of the closing costs, however I feel that investors who keep it simple and show value have a better chance of creating a win-win for both themselves and their buyer. If you bought right in the first place, know how much profit is in the deal, and are willing to be a little flexible, you can get your investment properties sold, make a profit and become your own success story. Contact Lisa Moren at lmorenbroma@gmail.com Come see Dyches Boddiford AT SJREI MAY 4th AND 5th.
MILES/BARRY CONTRACT FURNITURE Workplace solutions to fit your business
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Feb. 2011 REI VOICE
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B AS I C S
Real Estate Investment Strategies: Which One is Right For You? By Lamarr Baxter Many investors, when evaluating their underperforming, mutual fund heavy IRAs, have come to realize that investing in small cap funds and large cap funds IS NOT diversification. They wonder if some of their IRA ought to be invested in real estate considering that prices are still declining in some areas and/or there is lingering economic uncertainty.
As with any investment, it is crucial to perform your due diligence. There are no guarantees, but careful planning and research can minimize risk. Below are some of the more common real estate strategies being executed nationwide with self-directed IRA funds. All of these options still require careful due diligence to determine the outcome of the investment. Unlike mutual fund investments, you are in control. If you are not comfortable with any investment, it is usually best to refrain from investing until you are. The best way to protect any investment against losses is ongoing education. It’s always a good idea to
make sure you choose a trusted professional to represent and/ or assist you, but don’t depend on someone else’s advice alone. You too should be knowledgeable about any investment you select to invest in with your self-directed IRA. If you are considering some form of real estate investment, below are examples of some of the ways investors are building their retirement accounts:
• Buy and Hold: With this method, the investor purchases real estate with the intent to realize immediate cash flow, with equity to follow over time. It allows you to build your retirement capitalizing on two components within your real estate IRA. • Buy and Sell: With this method, the investor purchases real estate with the intent of turning a profit by buying low and selling high. This is a popular way to build a retirement account. However, it is recommended that you pre-determine cost and expenses associated with this method of investment, as there is a potential for loss if your forecast of value relative to acquisition cost, rehab cost, and ARV (After Repair Value) is incorrect. • Grant Loans Secured by a Deed of Trust: Some investors want to take a more hands-off approach to investing, where there is little or no participation on the behalf of the account holder after the initial investment. Loaning money secured by a Deed of Trust is becoming more and more popular with self-directed IRA investors. Unlike some other
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investments, you have a collateralized asset to minimize the risk of investing. There are many other alternative investment opportunities out there, outside of real estate, requiring investment capital. Using your self-directed IRA can be the answer to building your retirement savings as well as serving a purpose in your community by supporting business growth and loaning much needed capital. • Invest in Other Regions: Investor philosophy is changing as a result of faltering state and local economies, high unemployment, declining and/or projected decline in property values, etc. It may be worth looking into other regions of the country for investment opportunities that offer deep discounts and the right variables for the growth of your investment vehicle. It is highly recommended that you perform extensive due diligence on such an investment opportunity and consult with professionals very familiar with the area to help reduce your risk. There are a multitude of options available to you when considering investing with a self-directed IRA, the above listed are just a few examples of the many options that being used to grow retirement accounts. For more information on the investment choices available using a self-directed retirement plan, please visit: http://www.entrustcalifornia.com/alternativeinvestments/morechoices/ Contact Lamarr Baxter at 916-509-7217 lbaxter@theentrustgroup.com
Lamarr Baxter is a Business Development Representative for Entrust Administration, Inc. In addition to specializing in self-directed retirement accounts, he is knowledgeable in residential mortgage loans for both primary homeowners and investors. He has previous experience in commercial leasing, A/R factoring, and private note loans secured by real estate.
B AS I C S
Who Needs Asset Protection? by Dyches Boddiford
Dyches Boddiford has been a real estate investor since 1980. He speaks from experience in single family homes, owning apartments, mobile homes, buying discount mortgages, hard money loans, and developing. To get information on his upcoming classes and sign up for his free newsletter, visit www. Assets101.com.
Simple answer: Everyone who has any significant assets. For those with few assets, the plan will be simple. But as assets increase, so does the need for a more comprehensive plan. Rental and commercial property owners are common targets of lawsuits. Often property owners are viewed as having “deep pockets,” and thus become virtual magnets for frivolous claims. Even with the best intentions, maintenance and management, if a tragedy should occur and a tenant is seriously injured, liability could be potentially in the millions of dollars. Such a claim could easily exceed the amount of any insurance coverage. And don’t forget claims by government agencies such as EPA and IRS. These cases can sap owners of all financial reserves. In addition, real-estate developers and builders have potential liability to buyers and users of their properties. For instance, in Cali-
fornia, liability for unseen, referred to as ‘latent,’ defects will last for 10 years. Anyone who does not take the necessary steps to protect his accumulated assets is inviting a financial disaster. A good asset protection plan should be designed to discourage a potential lawsuit before it even begins. Maintaining a low profile will help here. Prior to commencing a lawsuit, a plaintiff’s attorney will perform an asset search, seeking to locate any real estate, bank accounts or other valuable property of the defendant. The attorney for the plaintiff will want to make sure that the defendant has sufficient assets that can easily be reached if the litigation is successful. This is especially true when the attorney is considering working on a contingency fee. If the assets of the defendant are substantial and easily reachable, the lawsuit will go forward on a contingency fee basis. Otherwise, the attorney will be looking for a
substantial retainer from their client. The attorney just wants to get paid for his or her work. Only the most self-destructive plaintiff will want to incur the expense of a retainer or even proceeding with the case when there appears to be no significant assets available should the plaintiff get a judgment. One of the primary concepts to keep in mind is to create a situation that makes pursuing a claim costly in time and money. This concept puts the attacking party in a position of “no longer wanting the cheese, rather just wanting out of the trap.” One of the best examples of this is a judgment holder who gets a charging order without the knowledge of the tax implications and how it can be defeated. Don’t underestimate the psychological power of such concepts. Another great tactic is the potential ability to transfer liability to a third party. In its simplest form, this may be a transfer of the obligation to defend against the liability to an
insurance company. But it could be another third party. But that is a topic for another article. I always recommend that entrepreneurs not complicate their lives any more than is necessary, especially in the early stages of their investing. Start with simple things that can be done and only progress to methods requiring more time and expense as your situation dictates. I want to see you get out there and make some money before you complicate your life too much. Don’t feel you have to do everything in the beginning. At the same time, don’t delay putting your protection plan in place while there are no clouds on the horizon. Your choices become fewer as problems arise. Contact Dyches Boddiford at ebriefs@assets101.com see Dyches Boddiford present at the SJREI April 6th, 7th and 9th.
Feb. 2011 REI VOICE
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» Full Service Real Estate Broker for the Investor as well as home owner » Residential and Commercial » Conventional and Private Money Loans » Business Broker Services
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Professional Asset Management & Sales Our company Professional Asset management and Sales was created to serve investors with the highest level of professionalism and competence. With this in mind, our goal is to assist each investor in achieving maximum results. Our sales team has over 40 years’ collective experience in the real estate industry. We understand that property management is a key element of the successful equation. Our managers are Licensed Real Estate Agents who have knowledge of both rental and sales markets. With P.A.M. you will never have to worry about your investment, whether you live in town or across the country!
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Mortgage Interest Rate - 30 Year Mortgage - 45 Year Graph
19% 18% 17% 16% 15% 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4%
1970
1980
1990
2000
Source: Freddie Mac
FEATURES
Lending: Still Alive and Well in 2011 By Michael Ryan
Combining his 19 years of loan experience with his background in managing property, as well as new land development, and construction, Michael Ryan offers a unique insight into all aspects of real estate. A real plus in these day when many lenderâ&#x20AC;&#x2122;s favorite word is no, when you want yes!
Investors who have and educated perspective of interest rates and the many forces affecting the market avoid being paralyzed by headlines. The big story about interest rates is very little in reality. After a 7 ½ month slide in home loan rates, bottoming November 4, 2010, we have seen a bounce back of approximately 1 %, moving us into the rate range of the previous 18 months. Forces to move interest rates will continue to come from appreciation, debt policy, money supply, and external forces from China and the European Union, and the FOREX exchange. Keep in mind, even though the U.S. has its own troubles, as long as our economy and politics seem more stable than those of other countries, others will continue to buy our debt, thereby keeping our interest rates low. Of course the opposite is also true. When the U.S. looks worse than other countries, by comparison, interest rates trend up. Who will win? Only history knows for sure. In the accompanying chart, we see that for the past 20 years, home
A Look Back
What were the two most notable lending changes in 2010? First, the enactment of nationwide licensing for mortgage originators, began January 1, 2010. Second, underwriting of home loans continued to experience tightening standards throughout the year. The tightening of lending standards has been most noticed in the following ways: a) less leniency for waivers of posted guidelines b) more documentary requirements for cash and gift monies c) appraisers noting more on actual condition of various aspects of property with better cross documentation of stated terms and conditions of purchase contracts, as well as the subject property.
loan interest rates having been trending downward. At the same time the size and value of houses has also increased. Why? Because lower rates mean that one is able to qualify for more money at the same monthly payment. The good
news for 2011 is that interest rates are once again very low. In fact, over the past 40 years, 5% is the lowest interest rate ever published for January. For investors, low interest also means more money to the bottom line with an overall higher rate of return on investment property. Thus, mortgage rates and monthly payments are critical as one prepares and considers buying property and growing wealth. Yet, as a part of this preparation, it also critical to pick a winning team of players able to optimize plans, maximizing possible benefits, and custom fit the investment to you. Please understand, if cash is King to any buying strategy, then cashflow and cash reserves are Queen. You need both of these to keep your kingdom running smooth. This takes a well qualified team to coordinate the needed resources if you want avoid disruptions and unexpected frustrations. Secure your future by building wealth today. Contact Michael Ryan at 408-986-1798 mike@michael-ryan.com
Feb. 2011 REI VOICE
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Now is the Time to Take Control of Your Destiny!
2011 Be Your Own Boss Expo Saturday, February 5, 2011 10:30 a.m. — 5:00 p.m. Santa Clara Convention Center Visit the expo website for complete details
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Serving Northern & Southern California Thrasher Termite & Pest Control, Inc. has been serving the Santa Clara Valley and the neighboring communities since 1979. We also have an office in San Diego that services all of the greater San Diego area. We work closely with Realtors, Investors, Property Managers, Homeowners, Landlords, and Homeowner’s Associations to help solve your termite and pest control problems. We offer reasonable and competitive prices. Our staff is professional, knowledgeable and friendly and we aim to please our clients. Ask us about our “green” treatment methods.
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www.ThrasherTermite.com 22 REI VOICE Feb. 2011
FEATURES
WHAT’S OLD IS NEW AGAIN FOR THE NEW YEAR Aaron Norris is Vice President of the Norris Group where he is responsible for business development and production of TNG’s awards winning radio show, events, and educational seminars. Aaron is also principal at Palisoul, Norris, + Conroy, a marketing and strategy team based in Southern California and hosts of the marketing and business podcast, The Cocktail Party Statement.
By Aaron Norris Last month in Riverside, a veteran of the Iraq war and serving officer in the Riverside Police Department was senselessly murdered by a parolee trying to escape a hit-and-run accident. The incident shocked the community. But rather than letting cynicism and apathy rule the day, a small group of friends decided to do something positive. The Thanksgiving Thank You Campaign was created two days later. The simple campaign asked people to send a card to the police department thanking them for their service, share the campaign via email and Facebook and verbally thank an officer whenever they were within earshot. (And yes, that even included while getting a traffic ticket.) Just one week later, the police department posted the following message on its Facebook fan page: “The Chief’s Office has received over 500 emails, postcards and letters of thanks. We thank you most sincerely for your notes of encouragement and support. Your letters are being collected into a series of books that will then be passed along to our employees to
view. Eventually, it will be added into our Department’s historical archive so that future RPD employees may see how the community came together during this trying time. Thank you for your continued support.” That was only the beginning. When that statement was released, the police department had yet to see the full effect of the Girl Scout troops, schools and individuals who had just signed on to help with the campaign. (Two local media channels picked it up as well.) I have a feeling the second wave of cards included way more crayon scribbles, marker mess-ups and pasted collages that can only come from youthful minds. In this incident, hundreds—if not thousands—took part in a small act of kindness to honor those on our police force. Technology was leveraged to encourage what at times seems like an ancient and lost form of communication: the thank you card. Back up for a minute and think about the last time you received a heart-felt, genuine, and well-thoughtout message from someone whose only agenda was to express true gratitude. Cheesy cards with rushed signa-
tures below sappy, generic messages don’t count. We’re talking about the kind of card that makes you sit back in your chair because you realize: 1) someone actually took the time and energy to do it; and 2) the sincerity and lack of ulterior motive actually surprise you. How long did it sit on your desk, shelf, or board or fridge? Is it still there? These days, it’s too easy to send an abbreviated “thx” via text, a #thankyou on Twitter or short email sans “hello.” It’s quick, easy, and ultimately forgettable. “But doing anything more is so much work,” you’re thinking. I know, I know. Time is short and you’ve got a three weeks worth of reality TV waiting on your DVR. Is your competition thinking the same thing? Here’s a challenge: Buy a box of blank thank you cards and dare yourself to get rid of them by the end of the year. It’s still pretty quick and easy, but it will make an impression on those on the receiving end that won’t soon be forgotten. What’s old can truly be new in 2011.
Of course, this retro technology isn’t without dangers. Your cursive has gotten sloppy, your writing muscles are out of shape, and your ability to write in complete and grammatically correct sentences may be impaired. Worst of all, though, you may be out of the habit of engaging in the type of meaningful interactions where real thoughts and feelings can actually emerge and be transcribed. Sure, email and social media will continue to gain favor, and both have their place. The big brains at companies like Facebook and Google will better integrate mobile technology and video into our everyday user experience. But when delving into the marketing and outreach avenues of the 21st century, don’t forget to mix it up by incorporating some of the tried and true tools of years gone by. The Riverside Police Department will happily tell you that there’s nothing uncool about putting ink (or crayon) to paper. Contact Aaron Norris at 951-780-5856 aaron@thenorrisgroup.com
Feb. 2011 REI VOICE
23
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24 REI VOICE Feb. 2011
TOM WILSON 408-867-1867
TomKWilson@earthlink.net TomWilsonProperties.com
STEEL-TOED STILETTOS:
REAL WOMEN OWN REAL ESTATE Women Real Estate Investors Share Success Strategies
Women! Build your financial future by implementing real estate strategies from women who have done it right! We currently have an incredible property buying opportunity in the U.S. Come and discover how you can participate to start building or growing your real estate portfolio. Sponsored by SJREI, the bay area’s premier real estate investors association, and held at the lovely Redwood City Yacht Club, this event is designed to inspire.
• Hear key-note speakers hand-picked to generate lively conversation • Learn relevant, timely information • Meet successful women real estate professionals • Develop strategies and walk out with a plan to find, fund and manage your portfolio
SESSIONS: Wise Women Invest in Real Estate
Finding the Money, Making the Deal
LIsa MoREn
JEnn DIzMang
PREsEntER:
• Why I buy and hold real estate versus buying and flipping. • Property Management from afar. Proven tips and techniques to keep your investment properties rented no matter where they are located. • (3) Clauses every lease must have to save your sanity. • How to produce more income from existing tenants. • Exit strategies & how to create dependable income from real estate I no longer want to hold, has been depreciated out, or no longer meets my criteria in this marketplace.
PREsEntER:
• When the banks aren’t lending, how to continue to do deals with private money • How to FInD private money to fund a deal • How to structure a deal with an IRa: partnering or non-recourse lending • How a real estate portfolio can secure your future
March 26th 8:30 AM 5:00 PM Using owner Financing to achieve Your goals PREsEntER:
tRaCY z. REWEY • Buy real estate with favorable terms…even when banks say no! • sell property fast…for full market value • safely create notes… and sell to investors for top dollar • Buy discounted notes for long term income…without the landlord headaches • Refer notes to investors…and earn referral fees for immediate income
Invest, grow Rich, and Look ten Years Younger: How to Dissect Marketing Hype and Find the Real Deal PREsEntER:
sUsan HaRE • secrets of the Craft: Marketing and social Media • How to inoculate yourself from emotional marketing • Keys to sniffing out hype versus an authentically good deal • Using marketing to your advantage
Mapping the Path to Your goals PREsEntER:
gERaLDInE BaRRY get out your notepads for a hands-on planning session with geraldine Barry. Many real estate investors, particularly those who work full time, spread themselves too thin to be effective. this impacts their ability to grow and move their business forward. In this presentation you will learn and do the following: • Learn three strategies for moving your business forward quickly and efficiently • Identify a plan of action for implementing those strategies to reach your goals • Discover practical ways to maximize your time for maximum results • get feedback from other participants and refine your plan
Rich Moms are in Real Estate
a PanEL DIsCUssIon WItH sEvERaL WoMEn, soME WItH KIDs anD PaRtnERs, soME WItHoUt, BUt aLL WHo’vE MaDE a sUCCEss In REaL EstatE
• How to make real estate work part time as a family business. • How to reinvent yourself in a dramatically changing environment. • How real estate can facilitate you pursuing your dreams by creating cashflow and financial security. • Looking for an opportunity to meet new people, network, learn top notch real estate strategies for today’s market.
Sequoia Yacht Club in Redwood City Register online at www.sjrei.org. Early bird registration discount
CALEN DA R REGISTER ONLINE AT WWW.SJREI.ORG
Feb :
PORTFOLIO BUILDING PRIME LISTS GREAT SUPPORT COMPREHENSIVE SERVICES PRIME LISTS GREAT SUPPORT COMPREHENSIVE SERVICES PRIME LISTS GREAT SUPPORT COMPREHENSIVE SERVICES
Summit Assets Group wholesales bulk REO lists, seasoned land contracts, and offers comprehensive training, mentoring, and support for the bulk REO investor. We help you build a cash-flowing portfolio quickly and successfully. “I know investors who buy homes for cash and then resell them using seller-financing. It’s a great business when you know what you’re doing. If you don’t, well, you aren’t helping yourself or helping rebuild America. Lori Greymont coaches people new to the business of bulk REOs and seller-financing. She and her team have the skill and patience teach people how to succeed......What’s not to like?”—Odell Barnes
Register online for our FREE webinar or call today for more information. Call 1-888-440-6826 SummitAssetsGroup.com 26 REI VOICE Feb. 2011
»»
2/2 & 2/3 East & South Bay meetings, Tom Wilson “Why this out-of-state Investor is Buying in California now!”
»»
2/5 Be Your Own Boss Expo – Silicon Valley 2011
»»
2/19 JumpStart - Day Workshop for new investors
»»
2/15 Mid-Peninsula “Put your Retirement Fund to Work!” “It’s your retirement fund. It should be working for you, not Wall Street!” Speakers will include: Lamarr Baxter, Business Development Manager, Entrust Administration Trust Eric Wikstrom, CPA, CFP, Integrated Wealth Strategies Jeffrey B. Hare, Attorney at Law
March : »»
3/2 & 3/3 East & South Bay meetings, Mary Morrongiello “Rehab your Way to Financial Security”
»»
3/5 & 3/6 Tony Alvarez 2 Day Seminar - see pg 27 for more details
»»
3/26 Steel-Toed Stilettos: Real Women Own Real Estate, Saturday
»»
3/15 Mid-Peninsula Economist Howard Blum
April : »»
4/6 & 4/7 East & South Bay meetings Dyches Boddiford
»»
4/9 One day event with Dyches Boddiford “Advanced Strategies”
»»
4/19 Mid-Peninsula Meeting TBA
»»
4/30 JumpStart - 1/2 Day Workshop for new investors
May: »»
5/4 & 5/5 East & South Bay meetings Lisa Bromma “Wise Women Invest – Tidbits from the Trenches”
»»
5/17 Mid-Peninsula Meeting TBA
June:
Lori Greymont
CEO, Summit Assets Group
»»
6/1 & 6/2 Robert Campbell - Update on the CA Market with statisticion and economist Mr. Robert Campbell
»»
6/21 Mid-Peninsula Meeting TBA
Learn How to Invest in Real Estate With Your IRA or 401k A self-directed IRA from Entrust California gives you the freedom to invest in commercial property, rentals, rehabs, and more. As an IRA administrator, we will help to educate you on the choices available for self-directed investments, and how to achieve tax-deferred or tax-free growth. Entrust offers a full range of retirement accounts, so that you can invest in what you know best.
Get started today! Call Lamarr Baxter at (916) 509-7271. www.EntrustCalifornia.com
Find out how you can take advantage of a world of investment options.
Lamarr Baxter 9245 Laguna Springs Drive Suite 200 Elk Grove, CA 95758 phone: (916) 509-7271 fax: (916) 405-4000
HIT THE GROUND RUNNING IN 2011 This Year’s Most Spectacular Millionaire Making Two-Day Real Estate Event is coming to the Northern California area March 5th & 6th presented by the most successful REO Investor in Southern California: The REO Mentor Tony Alvarez
“Learn the secrets that took me from BK to $7.2 Million in 7 years while making friends. And how you can do it too, using the same simple systems I use daily to make millions.” - Tony Alvarez The Greatest Opportunity of Your Lifetime! If you’re a beginner who wants to get started making money buying REO’s and Short Sales, or an experienced investor who’s presently feeling unsure about getting into the real estate market, show up and get ready to learn the simplest, most straight forward, clear and concise approach to going from broke to millionaire status with REO’s and Short Sales in this coming year! Learn everything you need to know to get into the REO & Short Sale buying business and start making your fortune, NOW! This training class covers everything I did; how Tony went from last man on the totem pole to the first phone call top REO brokers and agents want to make, and still make today. The class breaks down everything Tony is currently doing to consistently land one profitable deal a week. He will walk you through a step-by-step process of what it takes to do an actual profit-making deal from beginning to end, including the fine details of how to find, fix, finance, rent or sell the property for a reasonable profit; and how to repeat this as many times as you want. He will cover the details of what to do and what not to do, to succeed in this business!
Saturday March 5th and Sunday March 6th Register online at www.sjrei.org The class includes 2 conference calls and 2 webinars following the two day event.
Members $297 / Nonmembers $325
Place - TBD Feb. 2011 REI VOICE
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Resources Accounting 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
Chiropractic First Dr. Josh Ben 408-559-1662 chirohealthfirst@gmail.com www.chiropracticfirst.com
Richard Smith & Associates Richard Smith 408-446-5551 rsmithtax@aol.com www.richardsmithtax.com
Summit Assets Group Lori Greymont 888-440-6826 lori@summitassetsgroup.com www.summitassetsgroup.com
Howard Bloom 650-605-3928 www.howardbloom.com Silicon Valley REO Jason Chan Lee 408-998-1300 jason@svreo.com www.svreo.com
Meghan@REIVoice.com
Stonecrest Investments LLC Steve Freeman 408-557-0700 www.reo4sale.net
CSR Real Estate Service Stuart Baeriswyl 408-373-6766 stuart@csrteam.com www.customerservicereality. com
408-264-3198
" !
Other S ervices
B rokerage/ Agents
Contact Meghan Koslowski
""
Michael Gray, CPA 408-918-3162 mgray@taxtrimmers.com www.realestateinvestingtax. com
I nvestment Properties
Chuck McCay 408-836-1091 chuck@chuckmccay.com www.chuckmccay.com
Financial Advisors Bay Area Planners David Beck 408-725-7135 info@ retirementplannersonline.com www. retirementplannersonline.com
=@E 8E: ]ifd I nsurance k_\ @8C @[\ C<J Brighton Financial Group j f] JF FZk EJ Vernon Williams fY\ 408-931-6582 i vwilliams@farmersagent.com
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28 REI VOICE Feb. 2011
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www.farmersagent.com/ vwilliams
Wilson Investment Properties Tom Wilson 408-867-1867 tomkwilson@earthlink.net www.tomwilsonproperties.com
IRA Entrust Administration Inc. Lamarr Baxter 916-509-7271 www.entrustcalifornia.com/ oakland IRA Services Trust Company Michael McNair 650-593-2221
Legal Services Chillag & Associates, P.C. Nancy A. Chillag 650-321-6796 nancy@chillag.com www.chillag.com Earle Law Offices, APC 408-786-1060 www.earlelaw.com Jeffrey B. Hare, APC 408-279-3555 Jeff@Jeffreyhare.com www.jeffreyhare.com
Mortgage Consultants Michael Ryan & Associates Michael Ryan 408-986-1798 mike@michael-ryan.com www.michael-ryan.com
Susan Hare Marketing 408-391-8068 susan@hare.com www.susanharemarketing.com Okubon Management Nobuko Isomata 650-922-1786 The Norris Group Aaron Norris 951-780-5856 aaron@thenorrisgroup.com www.thenorrisgroup.com Thrasher Termite & Pest Control Inc., Janet Thrasher 408-354-9944 info@thrashertermite.com www.thrashertermite.com Property Management David Novelo 916-863-6600 x300 david@capitalmgnt.com www.CapitalMgnt.com
Research Foreclosure Radar Sean Oâ&#x20AC;&#x2122;Toole 925-513-7175 info@foreclosureradar.com www.foreclosureradar.com
S hort Sales Nick of Time Results Team Natalie Knowlton 831-402-5107 natalie@ NickofTimeresultsteam.com www.NickofTimeResultsTeam. com
‘NEVER BEEN A BETTER TIME TO BUY!’
THERE HAS NEVER BEEN A BETTER TIME TO BUY REAL ESTATE! Call me to get in now while prices are cheap!
We currently have properties in Salt Lake City, UT. & Orlando Florida. Investment Properties in Jackson, Mississippi & Coral Beach, Florida are Available. Must have decent credit and a down payment • Owner financing available • Conforming to S.A.F.E Act Regulations • Discounts available to the first five buyers We specialize in single family residences • Turnkey investment opportunity - houses in good condition, rented with good management in place
Ask for Chris and mention this advertisement
415-559-9768
Wholesale and Cash Flow properties for Residential and Commercial Investors!! Short and Long term investment opportunities with great returns !!
Contact APS Today 800-518-0215 | info@ascentps.net www.ascentps.net We are a private investment company that identifies and funds opportunities in distressed Commercial and Residential real estate. Feb. 2011 REI VOICE
29
Ger’s Top 5 by Geraldine Barry
1
Begin by telling a more positive story about your life, how things are, and where you are headed. Act as if you are already there. Look for reasons to feel good, identify what you want, hold your thoughts in a positive, productive place and work toward that goal. Be mindful of your words, only use words that build self-confidence, uplift relationships, and realize your dreams.
2 3 4
Start a journal – just spend 10 minutes a day journaling, it helps to air out your mind, and alleviate toxic thoughts. If you are not sure where to start, begin with a gratitude journal – write five things you are grateful for everyday. Live in the moment – whatever you are doing be fully present. Give your full attention to everything you do, every interaction that you have. Jim Rohn said “Pay attention; don’t just stagger through the day.” Give that gift to yourself and those you interact with. Nurture you relationships – they are the very essence of life, they are the glue that holds your life together. Relationships provide us with positive and negative experiences, but you have the power to make every encounter with family, friends, and acquaintances joyful. Grace the people in your life with forgiveness when they mess up. When they err, it is not about you, it is where they are in life’s journey. Don’t assume responsibility for their toxic actions; let go and move on.
5
Move forward quickly when you are wrong. Here are the 9 magic words that will help you when you blunder royally – “I am sorry, I was wrong, please forgive me.” Then stop talking. Don’t justify. Listen and validate the person you are seeking forgiveness from.
May 2011 be a magical year of growth and fulfillment for you, may you find peace, joy and happiness in everything you do!
Geraldine Barry is founder and president of SJREI, 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 pro’s such as Bruce Norris, John Schaub, and Robert Campbell 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 and Publisher of REI Voice Magazine.
30 REI VOICE Feb. 2011
Clarity
+
=
branding. marketing. strategy & implementation. Most business owners consider marketing a necessary evil. Why? Because thinking about and doing marketing takes time away from serving customers. Yet marketing is essential to growing a business. At Susan Hare Marketing, we prune the clutter to reveal the essence of your company. Clear branding, concise messaging, and materials that make an impression. Contact Susan Hare Marketing when you’re ready to grow your business.
SusanHareMarketing.com
408-391-8068
Susan@Hare.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
Feb. 2011 REI VOICE
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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 32 REI VOICE Feb. 2011