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October 2017 Issue

Published By: National REIC LLC & Z Publication LLC

Look For Our Issues Each Quarter January - April - July - October

www.NationalREIC.com National REIC Clubs Listed On Page 31

National REIC Visits Palm Beach REIA John Zwirzina, Kent Clothier & Jeff Green

Build Your Business, Live Your Life What does your business need right now? New Than Merrill &

Kent Clothier Articles

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Is it Legal to Buy and Sell Real Estate with No Money? This question has both plagued real estate investors and at the same time made multimillionaires of others. There are actually over 18 legal ways to do real estate transactions without the investor buyer having any money. The easiest and least expensive option is to assign the investor’s contract to his end-buyer. However, most Realtors® and lenders doing short sales or REO (Real Estate that is Bank Owned) sales will not allow assignments of contracts. The other primary way to do legal real estate transactions without any money is to borrow funds from private or hard money lenders who understand transactional funding of a double closing. The double closing has two parts that take place on the same day or the following day typically at the same closing agent but the closings can be at two different closing agents. For transactional funding for real estate simultaneous closings it does not matter what your credit score is, if you have been bankrupt, there is no asset verification, doesn’t matter if you are employed, and there are no Loan to Value requirements. In fact, transactional lenders will always fund 100% of the funds due from the investor buyer at the closing. Transactional lenders would provide investors with free Proof of Funds (POF), an approval of the funding within hours of application and you can choose your preferred closing agent. If there are two closing agents involved, the transactional lender will work closely with the second closing agent to insure the buyer’s funds have been wired into his escrow account and cleared. Minimal or no legal documents are required from the transactional lender in most cases because of the “flash funding” nature of the transaction. By real estate investors’ definition Transactional Funding is a short-term loan specifically to provide for the A – B funding of a double or simultaneous closing. The “A” is defined as the original seller of the property, the “B” is an investor who does not have money to purchase the property but who has found a buyer “C” to buy it from him. The two transactions are referred to as “A – B” and “B – C”. At the closing, the seller (“A”) will sign the necessary documents to sell his property and transfer it to the investor (“B”). Later in the day the investor will sign the documents necessary to sell to his buyer (“C”). The actual closings can be done in any order but typically the “A” seller wants to be paid at closing. The key to these closings using transactional funds is that the end-buyer (“C”) must have cleared and wired funds in the closing agent’s escrow account before the A – B “leg” of the closing is paid out to the property owner (“A”). There are various possibilities for fraud by the original seller and the end-buyer so transactional funding in not a riskless transaction. The cost to use transactional funding varies greatly and in a recent survey that was conducted at www.TransactionalFundingFL.com there were comparisons of various lenders’ costs and expenses. The transactional funds lender should not charge transaction fees, application fees or minimum fees. Rather they should charge a percentage of the amount funded plus at most, a separate wire fee. For example, www.TransactionalFundingFL.com charges one percent (one point) plus a $50 wire fee which is an industry standard. Your cost to borrow transactional funding for a $60,000 amount needed to close would be $60,000 x 1% = $600 + $50 (wire fee) = $650 total.


What is not acceptable to transactional lenders is where the end-buyer (“C”) has to purchase the property with a conventional (bank) loan, VA or FHA loan. The reason is the lender takes too long to review the closing documents and most often wants the seller to be shown on title before they will complete the funding. However, hard money lenders understand transactional funding and will typically work to close quickly for the end-buyer. If a transaction is delayed for the B – C leg of the closing for any reason, the transaction should be considered a hard money loan since the actual closing date may be unknown or extended indefinitely. Reasons that may delay the second closing include a deed restriction, end-buyer financing delayed, end-buyer default, or the hard money lender changing his commitment for some unknown reason. In summary, check online at www.TransactionalFundingFL.com for more articles and videos showing exactly how to make money without using any of you own money for purchasing properties. Dave Dinkel www.DaveDinkel.com www.TransactionalFundingFL.com

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How to choose the right REIA

By Joe DiMaggio, Executive Director Since I founded the Baltimore Real Estate Investors Association a few decades ago, there has been an explosion in REIAs, Meetups, and other organizations for investors. In some markets you may find only one such organization. But in large markets, and even many mid-sized markets, you have a choice. That’s certainly true here in Baltimore, not only because of our own sizable metro area, but also because we’re close to Washington, D.C., an even bigger market. Many of Baltimore REIA’s more than 400 paying members come from the Washington area, as well as from the north towards Philly.

What makes a REIA worth your while Every REIA must generate revenue to pay expenses. The difference between REIAs often lies in how they get that revenue from you. Some REIAs bring in a national speaker almost every month. These gurus present valuable information but also want you to attend a boot camp or buy an educational package, typically for $1,000 to $2,000. As you might imagine, the REIA shares in the revenue. Baltimore REIA does that occasionally, with speakers we consider carefully before inviting them. But most of our meetings, and we have seven each month, feature local presenters, and all of our classes are taught by our own local experts. All of our meeting leaders and class instructors are full-time local investors and professionals.


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A typical monthly Main Event with Baltimore REIA Why? Real estate investing is a local business. Yes, there are principles that apply everywhere, but you must know your market. That’s especially true in Baltimore, which has some really sketchy areas (as you’ve seen on TV) but also has some wonderful areas for rentals and flips. Quite simply, we are successful real estate investors teaching others to be the same.

Is coaching right for you? You’ve seen the slick guys who come through town with their radio commercials and TV informercials. These guys somehow get people to pay $20k, $30k, $50k or more for education and coaching. The kicker is, after taking all that money, these guys then recommend that students join their local REIA. That’s why Baltimore REIA developed an Inner Circle program that lets a new investor team up with a local veteran. Our coaching costs way, way less than those hit-and-run guys charge. You want to be careful about choosing a local coach, too. Is the coach actually doing the investment strategy he’s teaching? Or has he just cobbled together a program from other programs he has seen? Before you invest your precious time and money in any group, class, or program, find others who have tried it and profited from it. With real estate organizations and real estate education, the principle is the same as with real estate itself: buyer beware! Want to know more? www.BaltimoreREIA.com

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The Tragic Case of the Self-Directed IRA That Never Was Just last week, John (not his real name) lost nearly 60% of the value of his self-directed IRA in a single day. There wasn’t a horrible crash in the stock market or an act of fraud that caused this calamity. Instead, John’s misfortune was the result of an esoteric mistake that rendered John’s IRA invalid months before it was even created. Here’s how it happened: On a bright, beautiful day in 2009, John finally rolled over his old 401k plan into a new self-directed IRA. He’d watched in the past two years as the stocks in his 401k had been slashed in half by a rapidly falling market, leaving John with only $150,000 of the $300,000 he started with. John was an accomplished real estate investor, and he decided to use his new self-directed IRA to buy cash flowing properties. John quickly encountered success, acquiring one property which he sold a year later for a very large profit, which enabled him to buy 3 more properties. John’s success as an investor continued onward for many years. He was very careful and very precise, always seeking legal and tax expertise whenever he needed it. That’s why, when he was selected for a random audit by the IRS, John wasn’t worried about the outcome. Unfortunately for John, the IRS found a single 9-word clause in a service agreement that John had signed on behalf of his IRA. This clause, the IRS claimed, involved “cross-collateralization” of John’s IRA, which is strictly prohibited. The Instant Effects of John’s Prohibited Transaction What happened as a result of John’s error? When John signed the fateful service agreement in late 2009, three things happened immediately: Instant Effect #1: SILENCE. That’s right… silence. John heard nothing. John saw nothing. There were no red flags waving or IRS agents knocking down John’s door. He experienced a whole lot of nothing. Why? It’s because neither the IRS nor John knew that he’d committed a prohibited transaction at that time. The IRS doesn’t monitor these things in real time, and John certainly didn’t know that he’d stepped over the line. In fact, he thought he’d taken great care to avoid such a fate. Had John not been randomly selected for audit, it’s possible that nobody would ever have known of the transgression, and presumably at some point, a statute of limitations would apply in John’s favor. Unfortunately for John, he wasn’t so lucky. Instant Effect #2: RETROACTIVE DOWNGRADE. The very moment that John’s IRA committed the prohibited transaction, his IRA was permanently downgraded, effective as of January 1 of the


same year. In John’s case, his prohibited transaction happened in October of 2009, so his IRA was permanently downgraded as of January 1, 2009. What does this downgrade mean? The best way to answer that is to think of all of the benefits that an IRA offers, and to realize those benefits are gone, retroactively. For example: John lost the right to make tax-deductible deposits John lost the right to defer taxes on the profits of his transactions John’s account was no longer protected from creditors, bankruptcy and other legal problems These things are huge problems by themselves, but the biggest problem for John – and for anyone who commits a prohibited transaction – is that you don’t know it’s happened, so you continue to use your IRA as if it was never downgraded. You make deposits, you buy assets, you sell assets and you generally proceed as if everything was totally right with your IRA… …But it’s not. You no longer have an IRA, and you don’t even know it. You have no idea whatsoever that you’re taking deductions and other tax benefits to which you’re no longer entitled, which gives rise to… Instant Effect #3: RETROACTIVE TAXES & PENALTIES. Unbeknownst to John, he began accumulating taxes, penalties and interest at a blistering rate. This is where the real pain of a prohibited transaction is felt. John didn’t know that his IRA was downgraded, effective the first year that he opened. As a result: He continued to make deposits into his IRA each year, and took income tax deductions for those deposits to which he was no longer entitled He continued to buy and sell assets through his account without paying taxes on the profits, falsely believing he was shielded from tax consequences through his IRA With each new deduction John took, for his deposits, and with each new profitable investment he made, John’s tax liability to the IRS grew By the time the IRS caught up to John’s error in 2016, he’d been taking deductions and making successful investments for many years, during which time John’s tax liability grew and grew. But the painful part of a growing tax liability isn’t the taxes, it’s the penalties and interest. That is why the tax liability for prohibited transactions routinely cost taxpayers 50% or more of their IRA balance. In John’s case, he lost 60% of his retirement savings because of this error.John was actually quite careful with his self-directed IRA, and the error that the IRS found in his account was rather esoteric and strange. He did consult with – and receive the blessing of – his attorney before each transaction.


But that wasn’t enough. John should have done these things to protect himself: Only use attorneys with specific experience in self-directed IRA’s. John’s attorney was his family attorney who “did some research” for John, but had no actual experience with self-directed IRAs. This is an area of law with substantial nuance, and should only be trusted to the most knowledgeable counsel. -Have your attorney review every document you sign, not just the “big” ones. Obviously, your attorney should review your purchase and sale agreements, LLCs, etc. But you should have them also review documents required for your bank accounts, insurance policies and anything else involving your self-directed IRA. In John’s case, the problematic clause was in the documents he signed when opening a bank account, and not in any document related to his investments. -If you qualify to do so, consider using a Solo 401(k) for risky assets. The rules for prohibited transactions in 401(k)’s are far more forgiving than the equivalent rules for IRA’s. -John’s outcome was tragic. Fortunately for other self-directed investors like you and me, his fate is avoidable by understanding the profound severity of prohibited transactions, and working proactively to avoid them. Copyright © 2017 Bryan Ellis. All rights reserved. You may publish this article in full without modification, including all links and meta content. If adjustments are necessary to accommodate your specific needs, contact Bryan Ellis at Bryan@SelfDirected.org for authorization prior to publication.


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5 steps that can improve your credit score in 100 days Low interest rates, a strong economy and the turn of the seasons are all causing the real estate market to heat up. More homes on the market bring more competition to buy the inventory that is out there. And one way to stand apart from other buyers who are vying for their dream home is to take steps to improve your credit score now. "Preparing your finances is a must before the busy real estate season," says Barrett Burns, president and CEO of credit score model developer VantageScore Solutions. "Knowing your credit scores and making improvements is essential to getting the best loan at the best rates. This also makes you a more attractive home buyer, especially in a competitive market." With limited time, you may think there's nothing you can do to improve your score. Burns says that's an incorrect assumption. While you can't make dramatic jumps in just a couple months, there are several steps you can take that may influence your score to increase enough to get you prequalified for the loan you want. Keep in mind, lenders will pull your scores from all three major credit bureaus (Equifax, Experian and TransUnion), so it's wise to check your credit report from each of them. You can do so for free once every 12 months at AnnualCreditReport.com. For best results, monitor at least one credit score from each of the bureaus. You also can check your credit score for free through a large number of online services, such as CreditKarma.com, NerdWallet.com or Credit.com. Other sites offering free VantageScore credit scores can be found at VantageScore.com/free. Once you have your reports in hand, you can take steps that may have a positive impact on your scores. Step 1: Check for errors A credit report gives a comprehensive list of your lines of credit and payment history. The first step is to review your credit report for errors and take steps to make corrections, including past and present names, loan amounts and credit cards in your name. When checking your credit score, bear in mind that some differences in credit scores across bureaus is normal. But if one of the three credit scores is an extreme outlier, it could be worth double-checking your credit report from that bureau to make sure it doesn't reflect any questionable or erroneous activity.


Step 2: Don't miss a payment Creditors are interested in seeing how you manage credit, and the consistency of behavior counts. You should always pay at least the minimum amount due on bills on time every month. An easy way to ensure you don't miss a payment is to sign up for automatic bill pay when available. Step 3: Lower credit utilization levels Credit utilization is the ratio of a credit card balance to the credit limit. If your balance is $5,000 and your credit limit is $10,000, then your credit utilization for that credit card is 50 percent. In general, a good credit utilization is less than 30 percent, so if you have a higher ratio, consider using your tax refund to pay down this debt. Step 4: Don't close old credit cards If you have a credit card that is no longer used but was previously paid off on time each month, don't close the account. Not only is this good for your credit utilization ratio, but it also is another indicator you're a responsible candidate for a loan. Step 5: Don't apply for new credit Avoid applying for any new credit, such as an auto loan or a new credit card account, between now and the time you will close on a home purchase. Lenders considering your loan application request your credit score from one or more credit bureaus. And these lender "inquiries" are recorded with one or more of the three national credit bureaus, which may lower your credit score by 10 to 20 points. The score decreases typically only last a few months, as long as you continue to make payments on time. But unless they're absolutely necessary, try to avoid additional inquiries until after you've secured your mortgage. If you follow these five steps, you may see an increase in your score within a few months so you can get a loan and be an attractive buyer when it comes time to put in a bid for your dream home. Keep in mind, the more you can put toward the down payment, the more instant equity you’ll have, the lower your monthly payment will be, and the better your chances are of not needing private mortgage insurance (PMI), which can add hundreds of dollars to your monthly payment. Plus, if you’re able to put down more than a lender requires, a mortgage company may be willing to give you a pass on other issues on your application, such as a less-than-stellar credit score. By: John Zwirzina


Real Estate Portfolio Diversification with REITs By Than Merrill founder of FortuneBuilders.com Today’s most prolific investors know it, and it’s about time you did, too: real estate portfolio diversification is a tried and true strategy that no entrepreneur should be without. After all, what separates today’s best investors from the rest of the pack, if not for a propensity towards risk aversion? At the very least, it’s those that can mitigate the most risk that stand the best chance of closing on a successful deal. No investment opportunity is void of risk altogether. It’s a sad truth, but a reality nonetheless: there is an inherent degree of risk in every investment. However, it’s entirely possible to reduce the amount of risk you are exposed to on a daily basis. And those investors that can mitigate risk will find that the odds tilt greatly in their favor. Does that sound like something you would be interested in? Would you like to simultaneously reduce risk and increase your chances of realizing success? If that sounds like something you could get behind, you are in luck. As it turns out, there is a single, universally accepted strategy to reduce risk: real estate portfolio diversification. Diversifying your holdings within the real estate industry can simultaneously open your career up to a new world of opportunities while protecting you from the cycles the industry has become synonymous with. What’s more, there is one diversification strategy I can’t help but remain encouraged by: real estate investment trusts (REITs). Real Estate Portfolio Diversification at its Finest There is little doubt about it; the real estate industry is firing on all cylinders. Demand is strong, equity has returned in droves, and home values are stronger than we have seen in years. As a result, investors have found themselves the beneficiaries of a lucrative housing cycle; one that saw flipping take centerstage as one of the decade’s most popular exit strategies, but I digress. It’s not enough to simply flip houses. As any investor will tell you, a great portfolio is a diversified portfolio. And while you won’t find more of a house flipping proponent than myself, I maintain that today’s best investors know how to diversify their portfolios. If you hope to realize success at the highest level, you must learn to mitigate risk, and nothing is more universally expected to reduce your risk exposure than diversification. Fortunately, diversifying your portfolio doesn’t require you to leave the red-hot housing market. In fact, it’s entirely possible to diversify your portfolio by investing in more real estate. REITs, for example, offer investors a great way to diversify their holdings without ignoring the housing market’s potential. As their names would lead you to believe, REITs award savvy investors the opportunity to invest in real estate without physically acquiring their own properties. Or, as REIT.com so eloquently puts it, real estate investment trusts are companies that own or finance income-producing real estate. “Modeled after mutual funds, REITs provide investors of all types regular income streams, diversification and long-term capital appreciation. REITs typically pay out all of their taxable income as dividends to shareholders. In turn, shareholders pay the income taxes on those dividends,” says the worldwide representative voice for REITs and publicly traded real estate companies. Not unlike their S&P 500 counterparts, REITs award savvy individuals the opportunity to invest in large-scale companies that have gone public and are currently on major U.S. indices, Just as you would purchase a stock, you can buy into a company that specializes in large-scale portfolios of properties. “In the same way shareholders benefit by owning stocks in other corporations, the stockholders of a REIT earn a share of the income produced through real estate investment,” says REIT.com.


It’s worth noting, however, that not every real estate company can be classified as an REIT. In order to boast the title of REIT, companies are expected to meet certain criteria. That said, to even be considered an REIT, companies must: Invest at least 75 percent of its total assets in real estate Derive at least 75 percent of its gross income from rents from real property, interest on mortgages financing real property or from sales of real estate Pay at least 90 percent of its taxable income in the form of shareholder dividends each year Be an entity that is taxable as a corporation Be managed by a board of directors or trustees Have a minimum of 100 shareholders Have no more than 50 percent of its shares held by five or fewer individuals Those that have already placed an emphasis on real estate portfolio diversification through the use of REITs are more than likely aware of the benefits that may ensue. However, for those of you less familiar of what you may be getting into with REITs, it helps if you know just what’s in store. Namely, the benefits of investing in REITs. For starters, and perhaps the sole reason you are reading this article, REITs offer investors a platform for real estate portfolio diversification few other investment vehicles can even come close to. It’s entirely possible to invest in a number of different types of REITs: hotels, office buildings, movie theaters, and just about any other form of commercial real estate. That means you can tailor your portfolio to specific industries. Like where the data industry is heading? Consider investing in some data center REITs that specialize in warehouse storage. Does tourism have you bullish on the hotel industry? Maybe it’s time to look at some promising hotel REITs. The options are as plentiful as they are diverse. In addition to diversification, REITs offer their faithful shareholders the potential to make money in the form of dividends. As I alluded to before, REITs must pay at least 90 percent of its taxable income in the form of shareholder dividends each year. As recently as the first quarter of this year, the FTSE NAREIT All REITs yielded 4.12% and the FTSE NAREIT All Equity REITs yielded 3.81%. As a comparison, the S&P 500 saw average yields reach 1.99% at the same time. In fact, REITs have outpaced the S&P 500 for quite some time now. Outside of promising dividends, investing in REITs offers investors relatively easy access to their holdings. Perhaps even more importantly, investing in REITs increases your liquidity more than other investment vehicles. Seeing as how REIT shares can easily be bought and sold, it’s a lot easier to manage assets. That means you are able to manage your money as you see fit. Real estate portfolio diversification doesn’t mean you have to choose between today’s most popular exit strategies: flipping, wholesaling and rentals. Of course, each of these is still a viable option, and something I would recommend in the right situation, but they are far from the only choices you have at your disposal. In fact, you are doing yourself a severe disservice if you neglect to look at other options. REITs, for example, offer investors a great way to diversify their portfolios, while still benefiting from today’s hot housing market. Author Than Merrill has been investing in both residential and commercial real estate for the past 14 years and is the founder of FortuneBuilders.com a real estate educational company.


Wind Coverage for your Florida Rehab Projects. Is it Worth it? There are a number of hard equity and private lenders who state they only need a builder’s risk policy and no wind coverage is required. This can bring a significant savings to your bottom line. That is, if a major storm doesn’t hit. We’ve been pretty lucky the last decade. There hasn’t been a significant storm hitting Southeast Florida since 2004 and 2005 when Charley, Frances, Jeanne and Wilma came to town. Now we just got grazed by Irma, and parts of the state took some major damage, including the Keys and the West Coast. So should you get wind storm coverage even if your lender doesn’t require it? It comes down to a few factors, but here’s the analysis. The first is how much is the insurance going to cost you. It can typically increase your insurance cost for a small project from $1200-$1500. The second factor is how much benefit will you actually receive if there is damage. Most policies have a deductible of 5%. This percent isn’t on the amount of the damage, but is on the insured value of your house. If a small rehab has an insurable value of $125,000, then the first $6250 of damage is on you. Irma, not being a direct hit, I had one property lose over half of its shingles and a knocked down fence and another had the fence knocked down. Neither of the properties had wind coverage. But it doesn’t seem that there would be much benefit to doing so. As the public adjuster explained to me (who, by the way, typically take 10% of the recovery if you use one), they can get you all the damage you are entitled to, at the retail price. If you have connections and skills to get it done for less, you can mitigate a lot of the deductible. In my case, had I had coverage, I could have gotten maybe $10,000 of damage shown, less a $6,250 deductible, I would have netted $3,375 (after the public adjuster fee, because the insurance company certainly wouldn’t have offered as much). That’s about what I ended up paying to have the roof and fences done myself, so if it was insured I wouldn’t have been out of pocket anything additional. However I would have paid about $3000, between the properties to have them insured, so in that case it would have been a zero sum game. The analysis doesn’t end there however. Had I been insuring my properties the past 5, I would have paid out $15,000 in premiums and only collected this year (Assuming I did the same number of properties each year). The final factor is what is your tolerance for risk? Are you a gambler? Do you like to play it safe? The original track for Irma had it coming straight through Palm Beach County. It clearly could have done some serious damage to the wood frame houses, and I could have been looking at $40-50,000 in damage. My plan going forward is either get wind coverage with high deductibles, to protect against the catastrophic or to only do fix and flips from December to May.

Warren Kirschbaum ESQ. www.TitleTrustServices.com


Legal “Insurance” for Your Real Estate Investment Business? Consider these frightening facts: America is one of the most litigious countries in the world. We lead the world with 1.1 million lawyers - that’s one for every 300 people. 55% of US companies say they faced 5 or more lawsuits last year (the next worst? UK, at 23%.) As investors, there is scarcely an aspect of our business that does not have a legal side to it, from buying & selling, to contracting, renovating, landlording and financing, not to mention local government agencies and the IRS. So, how do most investors deal with legal matters? A Legal Fire Extinguisher? Most people, and most investors, use lawyers the same way they do fire extinguishers. Most don’t have easy, regular access to one. If they are wise enough or lucky enough to have one, they never use it unless they have… what? A (legal ) fire! For most of us, it’s the same with legal “fires”. We ask friends for favors, use Google, and avoid hiring lawyers until we absolutely must do so - who can spare $300-$500 an hour? But that’s not the way truly wealthy people use lawyers, is it? No, they don’t make important decisions or sign important documents without consulting their… attorney. Do you have your LEGAL fire extinguisher handy?

Insurance Everywhere We all have (or wish we could afford!) medical insurance. Most with families also have life insurance. Drivers are required by law to have auto insurance. If you own your home, you have homeowners insurance, and if you rent? Renter’s insurance. Flood insurance, Errors & Omissions, Malpractice insurance. But until recently, an investor’s legal risk was uninsurable. So, if an affordable legal insurance service WERE available, why would any investor go without it? Or, put another way: If you could talk to a knowledgeable, experienced and helpful attorney about any personal or business legal matter whenever you liked during business hours, and never get a bill… would you? Of course you would.


LegalShield to the rescue In 1972, an Oklahoma insurance agent had that idea, and an industry was born. 45 years later, LegalShield is the dominant provider of legal advice, assistance and protection. They serve nearly 5 million Americans and 100’s of thousands of investors, entrepreneurs and business owners with specialized legal plans for a low flat monthly fee of around $40. As the only TRUE nationwide legal service provider, LegalShield handles over 2 million legal matters annually, in all 50 states (and four Canadian provinces!) How can LegalShield help you, your family and your business? With our exciting new Business Owners Bundle, combining SIX powerful services and tools for investors into one package, for about $40 a month. It combines PERSONAL legal services with BUSINESS legal services, covering most of what you need at 100%... that means NO bill from your lawyers. And all services NOT covered at 100% are still covered at 25%, which means you will never pay more than 75% for legal help again! Fight back against Identity Theft and the Equifax Data Breach Recently, 143,000,000 of us had our information stolen. The Business Owners Bundle also includes identity and credit monitoring, fraud alerts delivered to a nifty Dashboard APP for your smartphone, and something you can’t get anywhere else: full identity restoration by KROLL- the world leader in Identity Theft risk management, along with direct 24/7/365 access to their licensed professional fraud investigators.

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YOU DON’T KNOW WHAT YOU DON’T KNOW By: Sam Ally HIS Capital Group

www.HISCapitalGroup.com

When asked to write this column, my initial thought was a nice “fluff” piece touting some of our acquisitions across the globe. As I pieced together what I thought would be the perfect group of assets to highlight, Hurricane Irma was being introduced to Florida as perhaps the most destructive storm of the century. Hurricane season was now in full bloom and this transplant from Chicago had a front row seat. I was mesmerized by the innocuous, though admittedly nerve racking storm coverage displayed on all our office monitors & found my thoughts drifting back in time about a dozen years ago. The company was building momentum as an up & coming Wholesaler in Central Florida. Month after month our pipeline grew and so did our sales. 30 transactions a month became the expectation, expansion to California ensued, & we acted upon the counsel of trusted mentors & began building a portfolio of cash flowing assets. We were full steam ahead moving aggressively and then, the world began to change. Late 2006 the housing market slowed, housing prices dropped triggering the Sub-Prime meltdown in early 2007, Lehman Brothers went bankrupt, and the cherry on top: the stock market lost 777.68 points, the largest single day loss in history. Suffice it to say, that portfolio of ours took a severe blow. Couldn’t help but shake my head and think to myself Hurricane Irma had nothing on the crash of 2008, yet good fortune was still on our side. We withstood the worst economic crisis of our time and re-positioned our business because we acted on trusted advice to diversify our holdings. And that’s when it hit me, the best value I could provide in this article would be to share some of the things that have contributed to our success. Here’s a few you should consider. We learned many things from the “crash” & the most important nugget: history repeats. Episodes like 2008 have taken place several times over the course of the last 200 years. In fact, we experience a “boom” and “bust” typically every 20 years or so, DEBT being the culprit in most cases. We joke around the office regularly about high school history classes and the fact they were never as interesting or engaging then as learning about our economic history today. The fact is, if real estate investing is your endeavor of choice, you must pay attention to trends and the 4 real estate market cycles or your business will not make it through the next storm. For every season or cycle there are specific strategies that work better during that time than others. Wholesaling has proven over time to be a successful strategy in general, however, even more so during this stage of the market cycle. Across the nation, it is the season of the Wholesaler once again, and if you have the systems, tools and resources to identify & secure offmarket assets you can dominate your market.


You don’t have to re-create the wheel or do it all yourself, in fact doing so would almost certainly stifle any growth. If you’ve been in real estate for even a brief moment you’ve heard the term Leverage, specifically when referencing capital for your deals. If done incorrectly, leveraging money can be dangerous to you financially, see the crash of 2008 and others. If done responsibly, however, it can greatly increase the returns of your investments. OPM as it’s called is not the only form of leverage you should consider when building your business. Leveraging other people’s/ groups time, tools, systems, resources, & networks strategically can enhance your opportunity to succeed beyond your wildest imagination. Your REI team is an investment as important as any financial investment that you will make throughout your investing career. The cold hard truth is, the right supporting cast can and usually is the difference between profit or bust. Surround yourself with those that know what you do not and can do what you cannot. Because of our ability to forge strategic alliances, we are positioned well to navigate with confidence in any economic climate. Great things in business are never done by one person. They are done by a team with a shared focus and vision. A legacy isn’t only about leaving what you earned but also what you’ve learned. Using history’s economic lessons as a guide, our strategy is to take a value based approach to investing & focus on building a substantial real estate portfolio of income producing residential and commercial assets nationally and abroad. The sum of our work to date is reflected in the graphic as one metropolis. From a commercial office square in Philadelphia (#12), residential development lots in Florida (#4), an apartment complex in Germany, (#19) to a Castle of all things in Tipperary, Ireland (#53).


The National REIC & The Palm Beach REIA... The National Real Estate Investors Club was formed as a member benefits provider to offer real estate clubs and associations benefits to offer to their members. The benefits are discounts on products and services used every day by real estate investors,realtors,mortgage brokers and anyone in the field. The concept was to start at 10% of the competition and offer more benefits adding benefits by the day. We are here to help the groups not to take all their profit making sure as a supportive partner we enable them to grow. As an added benefit we have started the magazine the National REIC Magazine to promote our 43 clubs in less than 5 months in 16 states and growing rapidly. We want to feature our groups and member clubs and have formed a network across the United States where we can promote products and services to the network allowing access to our benefits as well as promoting each club in the magazine and have enlisted some great contributors such as: Than Merrill ,Albert Lowry, Sam Ally (HIS Capital) and Bryan Ellis (The Bryan Ellis Newsletter and Forbes). If you are a real estate investor and want to start a REIA or REIC we can help from lining up the venue, the speaker and how to market and promote your group to be successful. We have 35 years of combined real estate investing and marketing experience to help you to have a successful club. If you have an existing club and it is just kinda putting along we will make it profitable and respectable. Real estate is a relationship business and people will do business with who they like and want to do business with. The National REIC just shows how an idea or concept can bloom in such a short time including obtaining a trademark. President John Zwirzina III, created the site, contacted the clubs and offered benefits as well as contacting each benefit such as realeflow/nreic, Office Depot, Home Depot and Vertical Rent just to name a few to make it all happen. We welcome new benefits if you are a provider such as hard money, products or services and we are on track to double in size by summer 2018. We will put you on the map and you will be able to eclipse other groups.. For more information email: Info@NationalREIC.com or visit www.NationalREIC.com From left to right John Zwirzina III, Founder of National REIC & CCREIA also Partner of the PBREIA, Robert Green, Austin Green and Jeff Green founder of Palm Beach REIA and Co-Founder National REIC

Article By;

Jeff Green

(Pic Far Right) Palm Beach REIA

www.PalmBeachREIA.com


Once you have your "why" solidly in your head... I am in Dallas at a conference with a number of other REIA members, and it is a good time. That is not what I want to talk to you about today. I want to talk to you about the one speaker I really resonated with yesterday. He was a Naval Academy Graduate, who played professional football, and then went and became a Navy Seal. I have never met the man, but I suspect we have some common friends. His name was Clint Bruce of Trident Response Group. The topic of his talk was "becoming elite" A lot of what he said clicked with me. I used to work with some of the most elite warriors on the planet and some of the traits that made those people elite, translate directly into being a real estate investor. The core of Clint's talk was that there is a continuum of performance from bad, to good, to excellent, to elite. Nobody wants to be bad. Many people will settle for good. Professionals will strive for excellent. The rarest of individuals will look at excellent and say that is just not good enough. I can do better. The key difference between the good and the excellent, is drive. The excellent will push themselves, to reach their goals. They educated themselves, they work at their craft. The elite are those same people, but they have one more ingredient, they refuse to stop at excellent. That is it pure stubbornness coupled with something more. That something more is an individual thing, and it has to be external. You need to have a "why" that is bigger than yourself. For many of us in the real estate world, that why is our family. We strive, I strive to build a better life for them. Selfish desire will only take you so far, you need a why that is bigger than you are. If you don't have that "why" yet, then I encourage you to find it. One of the most powerful why's is the desire to do good for others. So now I have some homework for all of you reading this message. Don't worry, it wont be collected or graded. Your homework is to figure out your "why" find that external source that drives you, because the elite are not the most talented, the elite are the people who get knocked down and then get up more times than everyone else. I can surely tell you that I was about the least talented member of an elite group at one point in my life. I was surrounded by legends, and people who had accomplished much more than I had. I just knew that the mission was more important that I was, and I was never going to give up. Once you have your "why" solidly in your head, I want you to bring it to life in the real world. I want you to write it down on your fridge, so that you see it every time you open that door. I also want to install a question in your head. I want you to ask this question every time you see your "why". The question is, "what am I doing to perfect my craft, and how am I moving towards my goal today?" This is a simple question, but it puts you on the spot and it makes you accountable to your "why". To your success, and to your "why"

Josh Caldwell Owner Of Pittsburgh REIA www.PittsburghREIA.com

Pittsburgh REIA Is A Member Of The National REIC

Do You Belong To A Real Estate Investment Club? For The Best Benefits Make Sure They Belong To The National REIC, Check Clubs Near You Online.

www.NationalREIC.com


How To Find Home Sellers Ready And Willing To Sell? Where are the home sellers that are really motivated and ready to sell? What are the best ways to find and create communication with potential home sellers? Which ways really work in today’s Real Estate market? There are many Obstacles & Difficulties when trying to get a listing from potential home sellers. Hunting down and finding a potential home seller is not as easy as you may read about online or thru real estate training courses. You will find many course, books, YouTube videos, and motivational speakers and so on showing you real results on how quick and stress-free they find sellers. Of course you will have to pay for these supposed top secrets that no one else knows. Amongst the secrets will be how to do mail outs, what is the newest software’s accessible to agents, how to acquire buyers list, you will hear all of these. Some of these methods if not all might work. It depends on where you live and just how the market is in your area. These systems usually require more work and money then how it’s explained or presented. Agents that expect all this to be free will come to a sudden reality. In Real Estate there is no way around it, from morning till evening, you are in constant prospecting mode. You will get lots of leads with these systems but must learn how to convert them into transactions. Here is a way we have focused on before. Within my farming areas, I have done a mailing campaign for three to five months. You can obtain all the mailing address thru your MLS systems tax records and select a specific location or community. If you use mailing software, you can even personalize with the owner’s name. It’s a great idea to send the postcard or whichever mailing based on the season and time of the year. You can even change it up by mailing postcards, written letters, newly listed, area comparable and so on. This gives you a constant presence to the home owners. When they are ready to sell, you have a great chance of coming to mind and receiving a call.

Is there a better way to connect with these potential sellers? Let try to find more home sellers that are willingly ready to act and list. Here are some additional ways. Investors, if you build good relationships with them, when they purchase and are ready to flip, you will be on their list. REO foreclosure, these sellers are ready to act now, building a relationship with an Asset management company and doing BPO’s is another great way. Are you really Social, you can definitely try paid ads on Facebook to target sellers in a specific areas, Google Adword ( This gets a bit expensive), Bing is also a good alternative costing less. Your circle of influence, is probably the best way as seller leads would be referrals ( Warm Market ). Have you tried other agents, there are many agents who are out of the area, not in town or for various reasons are unable to take the listing. An example of this is an agent that refers me residential listings since all he handles is larger commercial Real Estate. Whichever method you go with, it’s all about the amount of leads you get and can convert. An experienced agent can convert a lead quickly and has a high conversion ratio while a new agent might burn thru lots of leads due to their inexperience.


While the method above works, there are a few draw backs. It’s the upfront investment and conversion ratio. This is where earlier I mentioned that you need to learn how to convert leads in transactions. Luckily for you and I , this is not the only method to find potential sellers. During your prospecting, you will certainly come across leads that are considered Tire Kickers. They are just seeking information on the value of their home and are not truly ready and willing to sell. Learning to identify these sellers will avoid wasting your time. Not even the best Real Estate agent can convert this type of lead. Time is money, so time not wasted is essentially money. All in all, if you put in the work, test out different methods, you will find sellers which are ready. Many sellers have various reasons why they need to sell. Job relocation, down size ( Kids are gone ), retiring investor liquidating their assets and so on. Whatever the reason, you need to be in contact with them during these times to have a good chance of getting the property. Final note, there is not one method which works best then the other, every method works differently for every person. Try and test various ways and stick with the one which gave you the best results. Personally I use Realeflow to find my leads and to handle my mailings. Sign up @ www.RELeadSystem.com or check out the AD in this issue. By: John Zwirzina


My Path To Freedom How Jenna Used RealeFlow to Make Money In Real Estate I was a single mother and real estate investing was our ticket to freedom. This was my daughter’s ticket to the life that I knew she deserved… the life that I was determined to give her. I had no idea what I was doing, but I went for it, and the whole time I felt not scared… terrified. What if I did everything wrong? What if I did one thing wrong and lost everything? What if? I had to trust the process, trust myself, and trust the people and systems around me that promised to never steer me wrong. I knew in the terrifying moments of those first deals that if I could do it this time, I could do it every time. I was a real estate investor. Failure was not an option. In my first month I made 6 offers, which were all accepted. I moved forward with 5 of those deals and purchased the first in just 9 days. I purchased, rehabbed, and sold the other 4 and made $165,000 in profit, and Realeflow helped me do it. Having Realeflow alleviated a lot of the anxiety that I had as a new investor. Estimating the repairs needed on a property is wildly overwhelming. 4 years ago I would have no idea what it would cost to renovate a property. I would get bids from contractors with no clue if they were high or low. Now I have Realeflow’s Repair Estimator to guide me. The first thing I do with any lead from an outside source is put it into Realeflow to pull down all the data on the property. At that point, with no real estate investing or construction experience, I know immediately what the repairs will cost and am confident that I won’t be taken advantage of or get blindsided by a project that’s more expensive than I anticipated. I use the Rehab Planner to create a complete rehab plan for the property, including products, skus, and Home Depot prices so my contractors know exactly what materials to get. I keep all of my contacts in Realeflow, including buyer and seller lists, so when I’m ready to sell, everything I need is there. I use Realeflow to completely manage my deals from beginning to end. I’ve found the lead, done a repair estimate and rehab plan, calculated expenses, pulled comparables, analyzed the deal, uploaded receipts and photos, updated lenders, sellers, and other investors, and sold my property. Because of these tools, my daughter doesn’t see me constantly working, buying and selling properties, struggling to build my business. Because of these tools, I have more time to spend with her. Because of these tools, she just sees me… Mommy. Realeflow. Supporting #FreedomChasers Everywhere.

See The Next Page Advertisement & Visit www.RELeadSystem.com To Become Like Jenna & Get Your Ticket To Freedom.


Hurricane Harvey, Flood Insurance Policies & Zones? Tens of thousands of people have been displaced in Houston, Texas alone by Hurricane Harvey. The long term damage from the catastrophic flooding engulfing the US’s Gulf Coast is expected to cost companies, small businesses, and homeowners as much as $100 billion, according to Imperial Capital. The insurance industry alone may pay out $10-$20 billion, JP Morgan estimates. While big corporations will probably survive the hit, many individual homeowners in Houston could be forced into debt or bankruptcy because they don’t have flood insurance. As of August 2016, just 15% of the 1.6 mil. homes in Harris County, where Houston is located, had flood insurance, according to emailed data from the Insurance Information Institute, and only 28% of the homes in “high-risk” areas for flooding. That’s because only US homeowners in the “100-year floodplain”—areas that have a 1% chance of flooding in any given year—have to buy flood insurance, and then only if they’re taking out a federal mortgage loan or their private lender specifically requires it. This flood insurance in the US is mostly handled by an outdated, heavily debt-laden government scheme, the National Flood Insurance Program (NFIP). The NFIP’s data determining which zones are flood zones can be years, or even decades, out of date

Flood Area In Houston, TX The end result is that many Houston homeowners outside the 100-year floodplain have been flooded several times in just the last few years, and most city homeowners don’t have flood insurance now. More than 50% of Houston’s homes in “high” and “moderate” flood risk areas are not in designated flood zones, according to CoreLogic, a property information company. “There are some early indications that this is going to have an exceptionally large impact on the number of people who are totally uninsured,” says Howard Mills, the global insurance regulatory leaders at consulting and accounting firm Deloitte. “Those folks will be eligible to receive small amounts of disaster assistance, but it won’t be enough to rebuild their home or help them move somewhere safe, or elevate their home,” said Rob Moore, a senior policy analyst on water issues for the Natural Resources Defense Council. “These people are in a situation that no one wants to find themselves in.” While consumer groups & news outlets in Texas have recommended that homeowners buy flood insurance in recent years, not many have. People may not know they don’t have it, or may have decided it’s just too expensive, says Sam Friedman, the insurance research leader for the Deloitte Center for Financial Services. “They don’t want to make the investment,” he said, and they rationalize that a flood is unlikely to happen. While Harvey may make some of them reconsider, there’s no such thing as retroactive insurance. That means people are likely to keep on building where they’re at risk of flooding, and not buying insurance.

Help Us Raise Money For Texas & Florida Hurricane Harvey & Hurricane Irma @ www.GoFundMe.com/NationalREIC Donatations Recognized In Next Issue

By, Iain Day

Owner of TXREIC

Located In Dallas, TX

www.TXREIC.com


Starting a Probate Program: It’s Easier Than You Think By LEON MC KENZIE, CEO, US PROBATE LEADS, LLC

People hear the term ‘probate’ and immediately their mind goes to complicated legalese and the mountain of documents that surrounds the estate of one who has passed. Certainly, for the Executor this can be a heavy burden. Sorting through tax bills, filing deadlines, credit card debts, one can see how this quickly becomes exasperating. Often, there will come a time when the Executor realizes they must sell the estate property in a hurry in order to get the cash needed to make it through an otherwise exhaustive probate process. There is Undeniable Profit in Probates Whether the pressure gets to be too much, or the property requires work—more so than the family is willing to invest, or the heirs would rather just get the cash as soon as possible, the property is most likely going to be sold for much lower than its market value.

Next step: lead services. These are companies that offer all of the information you need regarding probate filings. They have dedicated personnel whose job it is to go from courthouse to courthouse amassing vital data associated with recent, local probate properties. So, you can spend the time and effort doing this yourself, or you can work with a company whose sole function is gathering this information.

Beyond the Leads…The Support You Need!

As a probate investor, you have the chance to purchase estate property at an attractive price point. Even if you were to sell it ‘as is’, odds are you still stand to make anywhere from 30-50% on your original investment. The Executor gets this particular headache off of their already crowded plate, and you get an opportunity to make a decent profit.

The Probate Leads Are Out There – Do You Have the Time to Hunt Them Down? Visiting the various courthouses around your area is one way to track down probate filings and get the necessary information, but this can take an inordinate amount of time. This is time that most just don’t have.

US Probate Leads does more than just offer comprehensive probate data. We want to help you create another source of income, a potentially lucrative revenue stream. Our lead program provides the most up-to-date probate records from any court in the United States. Then, taking it a step further, we give you vast resources, including webinars, seminars, books and software that can help you become a successful probate investor. This is a property niche that is only going to grow immensely in the coming decade. You really do have an opportunity to be a part of this enormous wealth transfer.

Today, an unprecedented amount of wealth is being transferred

Visit us today at www.usprobateleads.com to get started!


Get in on the largest wealth transfer in history –by investing in the rapidly expanding probate market! Why the Probate Niche?

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Perfectionist Type-A Personality Landlords Require Advanced Tenant Screening Capabilities By: Matt Angerer, Co‐Founder, VerticalRent® 

If you’re anything like me, you raise the bar with everything you touch. Raising the bar, as we know, requires an elevation of expectations – and often times, more money and time. Many newbie landlords and real estate investors fall into the “shiny coin” trap as I call it time and again. I have certainly fell into it and attribute it to my perfectionist type-A personality. Let us describe a scenario and you let us know if this resonates with you as well. A property pops up on the MLS or Zillow priced well below market value as compared to similar recent sales. The hairs on the back of your neck stand-up as you hunch over your laptop thinking about the potential to either fix-up and flip, or fix-up and rent for the long-term (buy and hold). Your anxiety runs a little higher because you know that dozens of other investors are looking at this listing at the same time – so you act quickly. You jump in your vehicle for a drive-by. At first glance, you know it needs work – but you underestimate the level of effort and money involved. To keep the momentum and excitement alive, you begin focusing on the positive aspects of this potential investment -- quiet neighborhood, dead end road, and good long-term rental potential. Parked in the driveway of this vacant house, you dial up the listing realtor: Investor: “Barb, I’m calling about the 3-bedroom single family home listed on 36th street with an asking price of $70,000. Is it still available?” Realtor: “Yes, it’s still on the market. Seller is motivated. I happen to be in the area, do you want to see it now?” Investor: “Absolutely. I’m sitting in my car looking at it. I’ll wait here.” Realtor: “Ok, no problem. I’ll see you in 10 minutes.” Sound familiar? The realtor arrives and you spend about 15 minutes doing your walk-thru. Everything checks out and you estimate about 15k in repairs and labor to get it “rent ready” in 2 months. In 30 days, you’ve closed on the property and your crew starts working – carpets ripped out, cabinets ripped out, new windows, new baseboard, etc. Then the “unknowns” begin to rear their ugly heads. Electrical work not up to code, bad plumbing, and water damage you didn’t spot during the walk through. Instead of spending 15k, you end up dropping 50k within 3 months to get the home rent ready. However, that 50k could have easily been 25k if you weren’t such a perfectionist. Does every rental require stainless steel appliances? Hardwood floors? Crown molding? No it doesn’t. But, if you’re like me, sometimes you get carried away on a renovation project. If you ever do carried away by overrenovating that rental property investment, remember one thing: be choosy about the people you let in there. Using a service like VerticalRent to thoroughly screen each applicant can keep that place looking beautiful over the long-term. VerticalRent provides you with advanced screening capabilities to run an applicant’s credit, criminal, and eviction. Plus, you have the option to check past landlord references with VerticalRent’s QualityCheck team. A manual process where they reach out to past landlords and incentivize them to complete a questionnaire about their experience with the applicant whom just applied to your property. Past landlords don’t sugar coat things – they will tell you whether the tenant caused them any issues or not. In summary, it’s OK to be a perfectionist type-A landlord – just as long as you understand the importance of tenant screening to protect the investment.


Is Your Club A Member Of The National REIC ?

Phone: (484) 574 - 5321 Email: Info@NationalREIC.com Web: www.NationalREIC.com Grow your membership by listing your club on our site. We spend money driving traffic to our site for potential members for your club. We also put your Real Estate Investment Club on other sites and blogs. Make sure you are a part of the National REIC. Join Now @ www.NationalREIC.com

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National REIC Club Members

www.NationalREIC.com 43 Clubs in 17 States & Growing •Chester County REIA •www.ChesterCountyREIA.com •2nd Monday Monthly •6:30pm – 9:00pm •Phoenix Area REIC •Date To Be Determined •Coming Soon •Los Angeles County REIC •Date To Be Determined •Coming Soon •Denver Area REIC •Date To Be Determined •Coming Soon •Boulder Area REIC •Date To Be Determined •Coming Soon

•Atlanta REIA •www.AtlantaREIA.com •1st Monday Each Month •5:00pm – 9:00pm •Savannah REIA •www.SavannahREIA.com •2st Monday Each Month •6:30pm – 9:00pm •Hawaii Real Estate Investors •www.HiREI.org •1st Thursday Monthly •6:30pm – 9:00pM •Lake County Property Investors •www.LCPIA.org •2nd Tuesday Monthly •6:00pm – 8:00pm •Baltimore REIA •www.BaltimoreREIA.com •3rd Thursday Monthly •6:00pm - 9:00pm •7 Meetings Monthly To Choose

•Midlands REIA •www.MidlandsREIA.com •2nd Tuesday Monthly •6:30pm - 9:00pm •Pittsburgh REIA •www.PittsburghREIA.com •3rd Tuesday Monthly •7:00pm – 9:00pm •Chattanooga REIA •www.ChattanoogaREIA.com •1st Thursday Each Month •6:30pm – 9:00pm •Texas Real Estate Investors Circle •www.TXREIC.com •Last Thursday Each Month •6:00pm – 9:00pm •1 R.E. Club Fort Worth •www.1REClub.com •2nd Thursday Each Month •6:15pm – 9:00pm •The Texas Wealth Network •www.TexasWealthNetwork.com •7 Clubs In This Network Total •San Antonio RENC •www.SanAntonioRENC.com •2nd Tuesday Each Month •6:00pm – 8:00pm

•Palm Beach REIA •www.PalmBeachREIA.com •4th Wednesday Monthly •6:00pm – 9:00pm

•Ann Arbor REIC •www.A2REIC.com •1st Tuesday of Each Month •(4 Meetings Per Month) •5:30pm - 8:00pm

•Boca Real Estate Investor Club •www.BocaRealEstateClub.com •2nd Thursday Monthly •6:30pm – 9:00pm

•Charlotte REIA •www.CharlotteREIA.com •1st Thursday Each Month •6:00pm – 9:00pm

•Boynton Beach REIA •www.BBREIA.com •2nd Tuesday Monthly •12:00pm – 1:00pm

•Cleveland Investment Club • 2nd Thursday Monthly • 6:30pm - 9:30pm • www.ReoCle.com

•Miami Dade REIA •www.DREIA.com •3rd Wednesday Monthly •6:00pm – 9:00pm

•Akron/Canton Investment Club • 2nd Thursday Monthly • 6:30pm - 9:30pm • www.ReoCle.com

•Broward Investor Forum •www.DREIA.com •Check Website For Schedule •5:30pm – 9:00pm

•Youngstown Investment Club • 2nd Thursday Monthly • 6:30pm - 9:30pm • www.ReoCle.com

•Tampa REIA •www.TampaREIA.com •2nd Thursday Each Month •6:00pm – 9:00pm

•Columbus Investment Club • 2nd Thursday Monthly • 6:30pm - 9:30pm • www.ReoCle.com

•Wisco REIA •www.WiscoREIA.com •2nd Tuesday Monthly (Eau Claire) •2nd Wednesday Monthly (Appleton) •2nd Thursday Monthly (Kenosha) •7:00pm – 9:00pm

•TB REIA •www.TBREIA.com •3rd Thursday Each Month •7:00pm – 9:00pm

•Oregon REIA •www.ORREIA.net •2nd Tuesday Monthly •6:00pm – 8:30pm

•Green Bay REIA •www.GreenBayREIA.com •1st and 3rd Wednesday Monthly •6:00pm - 8:30pm

•REIA Austin •www.REIAAustin.com •1st Tuesday Each Month •6:00pm – 8:00pm •Austin RENC •www.AustinRENC.com •3rd Thursday Each Month •6:00pm – 8:00pm •Houston RENC •www.HoustonRENC.com •1st Thursday Each Month •6:00pm – 8:00pm •Houston REIA •www.HoustonREIA.com •3rd Tuesday Each Month •6:00pm – 8:00pm


Who is your Mentor? Who is your Mentor?

Finding a mentor must be a deliberate and conscious process for you. But engaging someone to be your mentor is not always as straightforward as marching into his or her of�ice and asking, “Will you be my mentor?” One way to search for a good candidate is through meetings at an interest-based organization, such as your local real estate investors club.

Relationships are much more productive if the two members are similar in mindset. It is better to provide too much information about yourself than too little. Relationships don’t respond well to force, but they bloom beautifully when given space and time to unfold naturally. So, start slow and small—ask your prospective mentor one question and see how he or she responds. Relationships may last a lifetime and are often developed with people who have been a longterm and positive in�luence on our development. You want to �ind someone who has the unusual and valuable quality of loyalty and continued interest—one who, no matter what else is happening, will maintain a genuine interest in your continued development.

Ask your mentor whether he or she is willing to brainstorm with you. Tell him your problem, concern, goal, or idea and ask him whether he has ever faced a similar situation. Ask more questions as they come up and follow up by letting your mentor know how things are going for you. Your mentor will probably also toss some tasks your way to test your commitment level— be sure to handle them well as it may determine your future with that mentor. I believe having a mentor is one of the most crucial elements in determining your success as a real estate investor. Over the years, I have mentored hundreds and trained thousands of real estate students across the country; some of my students have become millionaires quietly while others are becoming famous in the real estate industry. What you do with your mentor’s information and guidance is what will make the true difference in your life.

There are all kinds of mentors out there—good and bad. Some mentors some from long-term relationships and were built over time. Professional mentors you hire to take you and your business to another level. Hiring a mentor can cost thousands of dollars, but it can also accelerate your learning curve and make it worth every penny. Only you can decide whether a mentor is right for you.

By: Paul Xavier Hawaii RE Investors


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Hard Money Financing for Single Family Fix 'n Flips Explained What is Hard Money? Hard Money is actually "private money". Hard Money Lenders/Non-Conventional Lenders are either self-funded or funded by high-net-worth investors. Thus, these lenders have the ability to make their own terms for their loans that they lend out to investors. It's very important to note that Hard Money is ONLY available for Investment Properties, NOT primary/owner-occupied homes. Over the last few years, the term "hard money" has received a negative connotation for being "super pricey", when in fact it's the contrary today. Since the Fix/Flip market is going so strong nationwide, the terms for hard money lending have come down significantly and are quite competitive for the experienced flipper/investor. A Hard Money Loan (HML) is a unique type of asset-based funding in which a borrower receives capital, secured by real property, to both purchase and renovate/rehab a distressed 1-4 unit single family home with the intent of either selling the property to an end user/homeowner for a profit, OR, refinance into a 30-year permanent mortgage, and put a tenant in the property to hold on to the asset for cash-flow purposes. Many conventional lenders such as banks, credit unions or savings banks do not have lending products for acquisition and rehab due to the speculative risk involved. What determines your Rate/Term and Pricing for a Hard Money Loan? When it comes to Private Money, there is no "one size fits all" pricing. Several factors determine the pricing of a hard money loan.....they are: •

Experience/Deals Completed

Cash on Hand for Down Payment

Strength of the Deal (do the numbers work?)

Location

Credit Score (Bankruptcy, Foreclosure, Short Sales?)

All of this being said, here are some "General Terms" (subject to change based on the previously mentioned qualification factors): •

Average 15% cash down-payment of total cost (purchase plus rehab)

8.5% to 11.5% Interest Only

65 to 70% of ARV (after-repair-value)

6 to 12 month Term

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Why Use A Land Trust? By Randy Hughes, aka Mr. Land Trust Do you remember 1969? Probably not. You may have been born after 1969 and did not find real estate as an investment until many years later. I remember the year 1969 very well. It was the year in which I purchased my first rental house. I was still in college and realized that I needed to break the cycle of poverty in my family. First, I decided to get more education than anyone else in my family. So, I went to college and majored in business. While studying in college, I realized that most people in America who became wealthy did it through investment real estate. My initial interest was in apartment buildings, but since they took large amounts of down payment money (the “nothing down” concept had not been invented yet) I defaulted to the single family home as my IDEAL investment vehicle. By the time I graduated from college I had acquired three rental houses and one small office building. After graduation I continued acquiring rental houses and titling them in my name personally. One sunny morning I woke up and realized the potential risk I was creating by owning all these properties in my own name. Those were the days before you could access the county recorder’s office online. But, you could go down to the court house and walk into the recorder’s office to look up each owner of every property in town. Wow, was I stupid! I had unwittingly made myself a target for a lawsuit. By perusing the county records anyone could determine the assessed value and original debt on each of my properties and approximate my net worth. This kind of information makes contingency fee lawyers salivate. So, what could I do to protect myself? I began to research different ways of holding title to real estate. When I discovered the Land Trust it was intriguing but VERY difficult to find any information (especially accurate information). After a year of research, I compiled enough data to form my first Land Trust. Very quickly I became comfortable forming my own Land Trusts and I set out to change the title of all the property currently in my name to my Trustee’s names. The title transformation from me personally to my Trustee was liberating. I not only physically felt better but, I actually slept better knowing that I was not “exposed” to the public. I learned that putting each piece of investment real estate into its own separate Land Trust was the smartest way to hold title. Why? Let me count the reasons. First, realize that NO ONE will have an interest in protecting your assets like you will. This means that the burden is on you to learn how to protect your assets. Some professionals will tell you that a Land Trust is “old school” and not of value anymore. Others will tell you to title your investments directly into a Limited Liability Company (which creates a nexus for a lawsuit and causes excessive registration fees). I use LLC’s extensively in my business, but not to hold title to investment property. So, who do you want to take your advice from? Someone who understands legal theory (but has no practical experience) or someone who has been in the trenches for the last 48 years? I have been a full time real estate investor since 1969 and I make my living in the “house business” not the Guru business. My goals have changed over the years and I now want to teach as many real estate investors as I can the benefits of using a Land Trust for privacy, profits and asset protection. I write extensively about the benefits of using a Land Trust and I also speak to real estate clubs all over the United States. Most of the time I get the same questions about why a real estate investor should use a Land Trust. So, I have written a booklet called, “Reasons to Use a Land Trust.” You can get a FREE copy by clicking on this link: www.landtrustsmadesimple.com


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Magazine

October 2017 Issue FREE FOR NATIONAL REIC CLUB MEMBERS

READERSHIP NUMBERS

National Real Estate Investors Club Magazine Published By: National REIC LLC & Z Publication LLC

Kent Clothier Article Than Merrill Article

10k = Paper Copy Readers (Distributed To Each Of Our Clubs) (+ Other RE Investment Clubs Too) 15k - 20k = Online Redership (Kindle, Ipad, Website Downloads)

National REIC Visits Palm Beach REIA John Zwirzina Kent Clothier Jeff Green

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Total = 25k - 30k Readers (1st Year Alone ‘17 - ’18 Issues) Our Issues Will Also Be Delivered To Our Clubs Email Lists Which Could Add To Our Readership Levels

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Potential Reach - 50,000 Readers Our Expected Reach By Mid 2018

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The National REIC Delivers These copies to all of their Real Estate Investment Clubs, which will soon be in every state in the US. They were just started in May 2017.

Phone: (484) 574 - 5321 Email: Info@NationalREIC.com Web: www.NationalREIC.com Grow your membership by listing your club on our site. We spend money driving traffic to our site for potential members for your club. We also put your Real Estate Investment Club on other sites and blogs. Make sure you are a part of the National REIC.

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Demographics Of Readers & Our Investment Clubs Males = 70% Females = 30% Own More Than One Property = 75% Currently Buying Real Estate = 95% New Investors = 25% Active Investors = 75% - +/- 3% - 5% These Numbers Were Taken 09/2017 By Our Real Estate Investment Club Survey

Income Levels -

Over $250,000 = 25% $100,000 - $250,000 = 45% $50,000 - $100,000 = 20% Under $50,000 = 10% +/- 3% - 5%


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Creating Your Tribe: How to Get Your Message Out By Kent Clothier It’s an incredible benefit to any business to have a group of people who follow what you have to say over a long period of time. But if you’re addicted to instant gratification, you’ll struggle with it. This is a long game—a long process that pays off over time. One of the things I love most about the community that I’ve built over years, is the engagement I have with them. It’s not one sided—it’s not me pushing out content and talking at people. It’s about having conversations, asking questions, and gaining insights. It’s the questions I get from my community that help me continue to add value. For instance, recently I had someone contact me and say, “Kent, you guys seem to be everywhere. How do you do it? How do you go about building your tribe? How do you get your name out there for real estate investment opportunities or wholesaling properties” So how do you create it? How do you get people who are highly engaged? How do you get people who want to do business with you, and will stay around for years? Earn Trust Regardless of your business, the first thing you have to do is earn people’s trust. You want somebody be able to transact with you and get to know you and look at you as their trust agent to the point that they are ready to give you money. That's the point of building the tribe. That's the point of going through all of this effort. The challenge with it is most of us are trained to be direct response marketers. I put a dollar into the machine. I run a Facebook ad. I run a Google ad. I send direct mail. And I expect to get my dollar back in return, immediately. If I don't, I throw up my hands and say, “this whole thing sucks.” It takes a lot of discipline to sit there and do the work for the sake of the work. So what’s the best way to earn trust? Do What You Love You’ve heard this many times over, “do what you love and you’ll never work a day in your life.” Well, I call bullsh*t on the work part, because we all know you have to put work into what you love, period. There’s no way around it. You have to get up, think about it, execute it, and deliver it. But the reality is the very first thing you need to do to build a tribe is you have to do what you love. Because if you are not instinctively and genuinely talking about or sharing valuable information about what you truly love, then it’s going to get really boring, really quick, and you are going to lose interest. At that point, all your efforts are basically going to go to sh*t. Nobody is going to care. They’ll know you’ve lost interest, and they will do the same. They’ll see it, hear it and feel it in every piece of forced content you put out there. So you have to love it. You have to be doing it with passion. I totally believe it. Give Value for Value’s Sake The next thing you have to do is give value for the sake of giving value. What does that mean? If you go on our YouTube page, listen to our podcast, go to KentClothier.com or visit RealEstateWorldwide.com, you can clearly see that we are trying to share as much information as possible. Whether that is on entrepreneurship, leadership, real estate investing and wholesaling, or portfolio building. It doesn't matter. We are constantly trying to give away the house when it comes to information because we understand the value and you need to respect people’s time by bringing value to their lives. So how do I want to bring value? I want to encourage, educate and inspire. I want to give them the tools and systems—step-by-step. If you can do that for your community enough times, in a meaningful and authentic way, you will win their trust. See, it all comes around as a circle – gain trust, do what you love, add value – which leads to more trust. Now you’ve earned the right to help people. They will be dedicated to you, your company and the role you play in their journey. What is the value you offer? Who is the person you are trying to impact? What's going on in their head? What is the conversation happening in their head right now? What is the pain they are dealing with? Address it, share it, solve it.


Retarget to Drive Traffic When you see someone’s picture or advertisements again and again, you perceive that person as being a big-name or someone who knows what they are talking about. But are they really? You don’t know, but it doesn’t matter initially because the perception is that they are. Why? Because they are someone whose face and name you see regularly. You can create that perception by consistently producing great content and getting it out in front of the people who are interested in your subject matter. The most massive method is through Retargeting. Let's say you want to drive them to your blog. You need retargeting pixels on your blog. Facebook and Google give you the ability to place a piece of code on your website. Anytime a visitor comes to your website, by mobile or desktop, from that point forward the code is sitting on their device. And so now every other website they go to they see you – your face and your message. It’s also important to retarget your videos. Video is the medium of choice now. YouTube is the #2 search engine in the world which has two benefits. The first is whenever anyone searches for a topic, YouTube videos appear as a top result. The second benefit is people start on YouTube for their searches. Everytime they go anywhere on Facebook they need to be seeing your videos in their feed. You want to be encouraging on every social media platform. Make sure you are engaging your audience on Instagram, Snapchat, and Facebook. And again by 'everywhere' it's everywhere they are.

Build a Sense of Community As human beings, we are wired to find a place to belong. We want a community of like-minded people where we can feel encouraged and supported. There are people out there who are looking for the information and materials you have to offer. But you have to be very clear on your passion and your mission so they pick up your enthusiasm and come to you as the ringleader of the community. And so if people are looking for it every single day, doesn’t it not make sense to give them the opportunity to connect with you? That cannot happen if you are just out there chasing money. It can only happen if you are completely dialed in on your core beliefs. If you are completely dialed in on your vision. And completely dialed in on the value you are trying to bring to the community at large. When you approach your desire to connect with others in the ways I’ve described, you’ll be shocked at how many people gravitate to your message. You will attract because they want to belong. If you’d like to learn more about a variety of topics for investing, entrepreneurship and real estate, tune into my The Time is Now podcasts at KentClothier.com or subscribe on iTunes.

By: Kent Clothier


WHY RECENT EVENTS SHOULD HAVE YOU ASSESSING YOUR RISK & INSURANCE By now, you’ve likely seen the images and heard the stories from Harvey and Irma: millions of people displaced temporarily or permanently due to the storms; billions of dollars of property damage – much of it uncovered by insurance; property and lives left in tatters in the wake of two of the most powerful storms in recent memory. As a real estate investor, you are not averse to taking risk - as a matter of fact, if you were, you wouldn’t be in the real estate business. However, there are ways to mitigate and think about your risk and insurance that are important BEFORE the next big natural disaster occurs. 1. Understand your coverage – when putting your insurance in place, it is important to know what is – and isn’t – covered by your policy. There are many nuances in how your agent insures your property that can lead to expensive lessons at the time of a claim. Be sure to check: a. Deductible – What is your deductible? Can you afford the out of pocket expense if you have a covered claim? Does your deductible apply per property or per occurrence? In the event of a widespread loss event like a hurricane, can you afford one deductible per property? b. What Perils are Covered? Special or “All Risk” is recommended. However, many policies cover you under a Broad or Basic coverage form. These perils limit what types of losses are covered. Under a Special or “All Risk” form, you are covered unless it is specifically excluded. Please note that Flood and Earthquake are typical exclusions. More on flood later. c. Loss Settlement - Replacement cost versus actual cash value – If you have replacement cost, there is no depreciation withheld when you settle your loss. d. Do you have a coinsurance clause? If you’re not sure how coinsurance works in a property insurance policy, it is important to understand, as you can face significant penalty for being underinsured. e. The amount of coverage you have in place – Is the amount of coverage you have in place adequate to repair or rebuild your dwelling? f. Loss of Rental Income - Many investors also suffer a loss of income in the event of a claim – do you have sufficient loss of rental income coverage in place in the event you have a covered insurance loss? Most insurers will cover you for up to 12 months of lost rental income while your dwelling is being repaired or replaced. 2. Understand your geographic risk – If you own multiple dwellings and/or invest in multiple markets, then it is important to understand what types of disaster events can impact your property(ies). Common occurrences are hurricanes, tornados, wildfire, mudslides and flood. As evidenced from the destruction caused by Hurricane Harvey, flooding can be widespread and extremely damaging. As we now know, most of the properties that were affected by the flooding in Houston were not covered by flood insurance. It is important to note that the majority of houses that did experience flood damage were not in what is considered a Special Flood Hazard Area (SFHA,), which is an area where a mortgage lender would require flood coverage. In order to achieve your real estate investment goals and maximize yield, it is important understand the risks you face, how those risks can be controlled or managed, and what your exposure is in the event that you have a loss that may be uncovered by insurance. We are realprotect, the Nation’s leading insurer of residential real estate property. We can review and analyze your insurance coverage and provide strategies to reduce your direct and indirect cost of risk and insurance. Please visit www.realprotect.com or call 1-800-579-0652 for more information.


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are Dead. If you rent a home to a typical tenant, you will get a typical profit of a few hundred dollars a month, maybe. With a typical turnover and a month of vacancy in between you may end up with little or no profit at all at the end of the year. Now, if you were to get TWICE the fair market rent, your profit increases exponentially. Instead of a few hundred dollars in profit you would be netting a few THOUSAND dollars in profit each month.

The answer is, your tenant, the operator of the RAL, will still be able to make a lot of money even after paying you twice the FMR. Let me fully explain that by crunching the numbers.

and how do I find them!

The national average for a private room in a residential assisted living care home is $3,500 per person, per month. Keep in mind that there are people paying 2 and 3 times that and there are people paying half that amount. You get what you pay Senior Assisted Living is the Best Real Estate Investment for of course. Remember that 70% or more of the wealth in the US is controlled Opportunity for the Next 20 Years. by seniors. You may not be able to afford or provide for your own long term care This mega trend is a “Silver Tsunami” and it has created a massive opportunity for needs, but they can. Keep reading and I will share with you how you can live for smart investors who are poised to profit. Let me explain why “typical” SFH rentals free when you need your own long term care.

The reality is that most seniors will not need a nursing home but they can’t live safely on their own either. They do need assistance and that is what is provided with Residential Assisted Living or RAL. Many of you have already faced this situation with your own parents. If not, well, your time is coming. This mega-trend will last for several decades to come and you can profit from this unstoppable wave and help a lot of people by “Doing Good and Doing Well”

$200-$300 a month in positive cash flow? When I was 20 years old, that was exciting. Today, that doesn’t get me very excited at all. Lets face it, one turn over with even 1 month of vacancy eats up an entire year’s worth of profits in most cases. Let me show you how to get TWICE the fair market rent with a long term, low impact tenant or if you’d rather, how you can make $10,000 or more NET per month with Residential Assisted Living. With your typical tenant you have a 1 year lease. They may stay for a 2nd or even a 3rd year but they are looking to buy their own home and move out in most cases. That’s not bad but, on the other hand, what if they move out after a few months in The Baby Boomers are here and they are driving the the middle of the night and leave you with thousands of dollars of repairs from the demographics in housing for the next 20 years. damage they left behind? Been there, done that. 77 million of us were born between 1946 - 1964. We are the Baby Boomers and Let me ask a silly question. Would you rather have a long term, low impact we are turning 65 at the rate of over 10,000 a day. Life expectancy is increasing tenant? A tenant that wants a 5 year lease and wants to have 2 or 3, five year and many of us will live well into our 80s and 90s. There are 4,000 a day turning renewals on top of that? That is what an operator of a RAL wants. That is why 85 and 70% of those people will need help for an average of 3.5 years. The 85+ Senior housing is the best real estate investment opportunity for the next 20 years. year old group is the fastest growing demographic of all in the US. It is projected Long Term Low impact tenants that are willing to pay twice the Fair market rent. to triple over the next 20 years. Senior housing is a great place to be now and will only be getting better and better for the next 20-30 years. Why would someone pay TWICE the fair market rent

Well, that depends on who you are renting them to of course.

Single Family Home Rentals are Dead?


With RAL it doesn’t matter whether the real estate market is at the peak or coming down from it, cash flow is cash flow. After 30 years as a real estate investor, doing everything from fix and flips, short sales, REOs, lease options and more, my goal is now just one thing: significant long term residual cash flow. Residential Assisted living gives you the opportunity to do one deal and you are done. For life.

This is a massive shift in housing demographics. You will either be riding on top of this unstoppable wave or you will hesitate, procrastinate and potentially miss it completely. That choice is yours but you will be a participant one way or the other. I have comparatively little competition. How many people do you know that are in the business of RAL?

This is not just another real estate “fad” that comes and goes.

You will be well served to learn all you can about this opportunity. You will want to know what your tenant, the RAL operator, is supposed to be doing to be successful. That way you can better choose the right tenant and be set up for success from the start. At RAL Academy, I show people how they can profit whether they are a landlord or a tenant. You can profit either way.

If you are considering renting your home to an RAL operator…

The key to success in RAL is in the details. You need to know which type of home works best, what location is best, how to find the home that no one else wants that will work perfectly for a RAL home and how to do it quickly without all the guess work. You need to know how to find the right team to make your life easy and to fill the home with high paying residents. I’m sure there are more questions coming to mind for you like: what about the liability? What about a 2 or 3 story home? What about… There is a lot to know but the good news is you are not on your own.

With a home that is licensed for 10 residents, at an average rate of $3,500 per resident, that is $35,000 per month in potential gross income. The expenses, including debt service or rent and even vacancy is about $25,000. That leaves a net profit of $10,000 per month for an average home. That is for an average home and an average clientele. I have homes that gross $40,000 and $50,000 per month and more. The reality is the expenses are virtually the same for an average home as they are for an above average home. The difference is the cost of the real estate. As a landlord you could be very happy to have a couple thousand dollars per month in positive cash flow. As the operator of the RAL you can earn $10,000 to $20,000 net per month. That is a true win-win situation.

Learn more by visiting www.RALAcademy.com. Gene can be reached at: Gene@RALAcademy.com

Gene Guarino, CFP is the founder of the Residential Assisted Living Academy.

If you would like to learn more, at my training programs we go into depth so you will be totally prepared to succeed in this endeavor. Imagine having one RAL home providing your family a $10,000 per month POSITIVE CASH FLOW… Now, imagine scaling a bit and having two or three… now you’re getting the idea. It’s a new world out there. The days of making a few hundred dollars a month in cash flow per house are history. If you’d like to learn how to do one deal and make $10,000 per month or more, let me show you how you can make that happen.

The Silver Tsunami is here and the opportunity to “Do Good and Do Well” is clear.

If you want help in learning how to do this, it is available. Learn more at www.RALAcademy.com The phrase, “paying for speed” is not just an expression, it’s a reality. That’s why the Residential Assisted Living Academy was founded. To show others what to do and what not to do in an easy to follow, step by step process. I’ve done it and I show you how you can do it too.

What is the key to success in Residential Assisted Living?

How much can I really make?


Learn How to Turn One Single Family House into a Monthly $5,000 - $15,000...

CASHFlow FLOW TSUNAMI Cash Tsunami! “Senior Housing is America’s Best Financial Opportunity for the Next 20 Years!” -Gene Guarino, founder Gene GuarinoPresident Founder and of RAL Academy

RALAcademy.com (480) 704 - 3065 www.RALAcademy.com 480-704-3065

UPCOMING EVENTS October

November

December

3-7

4

1-3

19 - 24

9 - 12

25 - 28

13 - 18

MINNEAPOLIS, MN – REIA

KAUAI, HI - ANDERSON ADVISORS

NEW ORLEANS, LA - NEW ORLEANS INVESTMENT CONFERENCE

WEST JORDAN, UT - UTAH REIA

PHOENIX, AZ

SCOTTSDALE, AZ - RAL NAT CON

ASHEVILLE, NC – CREIA

14 - 19

TOLEDO, OH - REIA

315 W. Elliot Rd., Suite 107-605 Tempe, AZ 85284 Phone: (480) 704-3065 Email: Support@RALAcademy.com

Gene Guarino Founder of the Residential Assisted Living Academy


Is Your Club A Member Of The National REIC ?

Grow your membership by listing your club on our site. We spend money driving traffic to our site for potential members for your club. We also put your Real Estate Investment Club on other sites and blogs. Make sure you are a part of the National REIC.

Join Now @ www.NationalREIC.com

Different Memberships Basic Club Membership

$399 Annual

Pro Club Membership

$599 Annual

More Information On Application Page

National REIC Members pass on our Partnerships, Discounts, and Savings Programs exclusive to your Members as an added benefit. We have a partner for everyone, with 50+ different partners for discounts.

Phone: (484) 574 - 5321 Email: Info@NationalREIC.com

www.NationalREIC.com

Web: www.NationalREIC.com


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National REIC Magazine  

National Real Estate Investors Club Magazine October Issue (Quarterly Issues) (30k - 40k Readership)

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